Business Update

26 June 2014

SQS Software Quality Systems AG

("SQS" or the "Company")

Business Update

New Contracts and Contract Extensions worth approximately €60 million

SQS Software Quality Systems AG (AIM: SQS.L), the world's largest supplier of independent software testing and quality management services, announces a number of new contract wins and contract extensions together worth approximately €60 million during the next three years.

SQS continues to experience solid growth within its target sectors and across the majority of geographies in which it provides its services. This is highlighted by the following new contract awards and contract extensions:

· A two year extension with a global, European headquartered bank worth more than €30 million. As well as the continuing provision of services supplied as part of the initial managed services contract, the extension will include a number of smaller service engagements in Asia and the US. These smaller engagements will be serviced by consultants from our recently consolidated Thinksoft acquisition which has greatly expanded our presence in these geographies;

· A managed services contract extension worth €15 million with a major European telecommunications provider. This is for a further three years' provision of software testing for the client's billing application;

· A new managed services contract with a major European bank initially worth €10 million, comprising the testing of the client's digital strategy applications until the end of 2015. SQS was previously engaged in providing specialist testing to this client as part of a large regional project. However, this has now developed into an international managed services contract, with the international element being delivered by Thinksoft specialists;

· A new contract with a UK utility services provider worth €3.7m. This is a managed services contract of which a significant proportion of the service delivery will be provided from offshore resources;

· A new specialist consulting contract with a leading Central and Eastern European insurance group. SQS has been engaged owing to its specific domain and application experience in the insurance field; and

· A number of new contracts with major US car and car parts producers. These engagements are of strategic importance to the Company's continued growth in the US manufacturing industry.

Diederik Vos, CEO of SQS, commented: "I am delighted to announce these order intakes that came in at the back end of our first half. They demonstrate clear progress in deploying our strategy of focusing on servicing larger, long term contracts. This strategy is resulting in improved revenue visibility and, with a number of these contracts being of a managed services nature, increasing the offshore element of our service delivery.

Our recent acquisition of Thinksoft has also been instrumental in enabling us to secure or enhance the value of a number of these contracts. Thinksoft has strengthened our offshore capabilities, deepened our expertise in the financial services sector and expanded our international reach, particularly in the US.

As we continue to build scale we hope to be able to secure ever larger contracts going forward and we are confident of announcing further successes in the future."

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About SQS

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, offshore automation processes and deep domain knowledge in various industries. Headquartered in Cologne, Germany, the company now employs approximately 3,900 staff (incl. Thinksoft). SQS (incl. Thinksoft) has offices in Germany, the UK, Australia, Egypt, Finland, France, India, Ireland, Malaysia, the Netherlands, Norway, Austria, Singapore, Sweden, Switzerland, South Africa, UAE and the US. In addition, SQS maintains a minority stake in a company in Portugal. In 2013, SQS generated revenues of 225.8 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, Commerzbank, Daimler, Deutsche Post, Generali, JP Morgan, Meteor, Reuters, UBS and Volkswagen as well as other companies from the six key industries of SQS.