AGM Statement and Trading Update

SQS Software Quality Systems AG

("SQS" or the "Company")

AGM Statement and Trading Update

SQS Software Quality Systems AG (AIM: SQS.L), the world's largest supplier of independent software testing and quality management services, is pleased to provide an update on trading ahead of its annual general meeting to be held at the Company's headquarters, Stollwerckstraße 11, 51149 Cologne, Germany at 10am (CET) today.

SQS has witnessed healthy demand for its services during the first quarter of 2013 across the key Central European geographies of Germany, Switzerland, Austria and the Netherlands, especially around core applications such as SAP. In addition, demand has been strong in Ireland and we are now the dominant player in that market.

Market demand and resulting sales in the UK and Nordics have been relatively flat during the first quarter of 2013. However, this has been more than compensated for by our performance in the aforementioned regions. In addition, our US business is progressing well and we are confident it will deliver a positive EBIT contribution in the second half of 2013.

We have also signed a number of contract extensions in recent months, which led to a good performance in our Managed Services division during the first quarter of the year. Managed Services represented approximately 40% of SQS' revenues in the first quarter of the year, up from 34% for the year to 31 December 2012, such that this is now the largest division within SQS.

In order to service the growth we are currently experiencing in our Managed Services business we aim to significantly increase headcount in our offshore test centres in the coming months. Managed Services contracts are increasingly transferring to our offshore test centres as they achieve volume and maturity. Further to this we are expanding our consultancy headcount in the US and central Europe to better enable us to capture the increasing opportunities in those regions.

Diederik Vos, CEO of SQS, commented: "We have experienced healthy demand for our services across a number of geographies during the first quarter of 2013. Our Managed Services business has witnessed especially strong growth and in order to manage this we will continue to invest in increasing headcount in our offshore test centres in both India and Egypt. It is great to see the good demand for all our test centres. To support our expansion further, we have also accelerated our search for acquisitions, with a focus on strengthening our offshore resources and expertise.

The healthy demand we experienced in the first quarter has continued into the second, giving us confidence that we are on track to meet market forecasts for the current year."

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About SQS Software Quality Systems

SQS is the world's leading specialist in software quality. This position stems from over 30 years of successful consultancy operations. SQS consultants provide solutions for all aspects of quality throughout the whole software product lifecycle driven by a standardised methodology, high offshore automation processes and deep domain knowledge in various industries. Headquartered in Cologne, Germany, the company employs approximately 2,300 staff. SQS has offices in Germany, the UK, Egypt, Finland, France, India, Ireland, the Netherlands, Norway, Austria, Sweden, Switzerland, South Africa and the US. In addition, SQS maintains a minority stake in a company in Portugal. In 2012, SQS generated revenues of 210.1 million Euros.

SQS is the first German company to have a primary listing on the AIM (Alternative Investment Market) in London. In addition, SQS shares are also traded on the German Stock Exchange in Frankfurt am Main.

With over 7,000 completed projects under its belt, SQS has a strong client base, including half of the DAX 30, nearly a third of the STOXX 50 and 20 per cent of the FTSE 100 companies. These include, among others, Allianz, Beazley, BP, Centrica, Daimler, Deutsche Post, Generali, JP Morgan, Meteor, Reuters and Volkswagen as well as companies from our six key focus industries.

For more information, see sqs.com