Contract Extensions and New Wins

SQS Software Quality Systems AG

("SQS" or the "Company")

Contract Extensions and New Wins

SQS Software Quality Systems AG (AIM: SQS.L), the world's largest pure play supplier of independent software testing and quality management services, provides an update on contract extensions and new wins during the first quarter of 2012.

Strategy

The major focus of the first quarter of 2012 has been to increase the value of agreements with existing clients and reduce the number of lower margin assignments. The results of this strategy are already being recognised, with the extension of our full range of services to two of our largest and longest standing clients within the automotive and insurance sectors.

These two clients now rely on SQS for their complete software development cycle from business analysis to final software testing and distribution of the application. Moreover, both these contract expansions were achieved despite significant competition from global system integrators, which we believe clearly demonstrates the compelling value proposition of our deep business domain knowledge.

Managed Services

We have also successfully extended our managed services contracts with two existing clients within the banking sector and signed a new managed services contract with one of the largest providers of internet and retail banking based in Germany.

Consulting Services

During the period, we also secured new contracts with two Central European insurance companies and a global asset management company for the development of a project management suite to be developed in the popular Agile software development environment.

Within the UK and Ireland, the Company has continued to gain market share in the financial services and private banking sectors and successfully pushed further into the relatively new sector of Manufacturing. The size of these contracts varies from €100,000 to €200,000 for execution within this year.

In aggregate, the financial impact of these new and expanded engagements has secured revenue in excess of €10m over the next two years.

Rudolf van Megen, CEO of SQS, commented: "The beginning of 2012 has seen a strong start to the current financial year due to the successful execution of the strategy outlined at the time of our full year results. In particular, the focus on expanding the value of engagements with current clients has proven positive and we continue to win new clients within our traditional sectors and some emerging ones.

"We continue to seek to increase the proportion of overall revenues derived from our Managed Services business and have successfully extended contracts with existing and new clients in the first quarter of 2012."

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About SQS

SQS is the world's largest pure play supplier of independent software testing and quality management services. SQS consultants design and oversee quality management processes during the software and IT systems life cycle and test the resulting products for errors and omissions.

Headquartered in Cologne, Germany, SQS has approximately 2,100 employees across Europe, Asia, North America and Africa. The Group has a presence in Germany (Cologne, Munich, Frankfurt, Stuttgart, Goerlitz and Hamburg), the UK (London, Woking, Birmingham, Manchester, Belfast), Ireland, the Netherlands, Switzerland, Austria, Sweden, Norway, Finland, France, India, Egypt, the United States and South Africa. SQS also has a minor stake in an operation in Portugal and a partnership operation in Spain.

With more than 5,000 completed projects, SQS has a strong customer base including 20% of the FTSE-100 companies, more than half of the DAX 30 and a third of the STOXX-50. It supports clients in a wide range of industries, including major corporations such as Allianz, Beazley, BP, Centrica, Daimler, Deutsche Post, Generali, JP Morgan, Meteor, Reuters, SEB, Siemens and Volkswagen.