H1 Contract Wins Update

8 July 2010

SQS Software Quality Systems AG

("SQS" or the "Company")

H1 Contract Wins Update

SQS Software Quality Systems AG (AIM: SQS.L), the world's largest pure play supplier of independent software testing and quality management services, is pleased to provide an update on contracts signed in the first half of the current year.

As stated in the Company's AGM statement on 26 May 2010, SQS has made good progress in its strategy to increase the proportion of its revenues from managed services, with an order intake at the time of €15m.

Managed services contract wins since that date include:

·; a three year blended onshore/offshore managed services contract with a leading global insurance company, valued at approximately €6m in total. SQS was awarded this contract due to its multi-language offshore capabilities and strong track record in the insurance industry;

·; a further tranche of onshore/offshore consulting to assist a major UK utility with new IT project roll outs worth in excess of €2.5m;

·; an expanded role with one of the leading gaming companies in Europe (having previously worked on project based contracts) to provide managed services for computer games testing. This new contract, signed for an initial 12 month period, is valued at approximately €500k and will be carried out by SQS consultants both onshore and offshore.

The Company has also continued to win new contracts in its traditional project consultancy business. New wins since the last trading update include a 12 month project management contract with Europe's largest renewable energy company at a value of approximately €400k and a 12 month contract with Africa's largest food retail company on testing in a SAP rollout project. A further project-based contract was signed with an international specialist banking group in security testing on a new payments project.

Rudolf van Megen, Chief Executive Officer of SQS commented,

"We are delighted to have signed a number of new contracts across multiple sectors, including gaming, insurance, energy, retail and banking, maintaining our momentum in the current year. In addition, it is very encouraging to see the progress being made with our managed services offering and the increasing proportion of our overall business that this represents.

"We are also pleased to report that trading for the first half has been in line with expectations."

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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 1,600 employees across Europe, Asia, North America and Africa. The Group has a strong presence in Germany (Cologne, Munich, Frankfurt, Stuttgart, Goerlitz and Hamburg) and in the UK (London, Woking, Birmingham, Manchester, Belfast), Ireland, the Netherlands, Switzerland, Austria, Sweden, Norway, Finland, 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 FTSE-100 companies, half of the DAX 30 and nearly a third of the STOXX-50. It supports clients in a wide range of industries, including major corporations such as Allianz, Beazley, BP, Centrica, Commerzbank, Daimler, Deutsche Post, Generali, JP Morgan, Meteor, Reuters and Volkswagen.

www.sqs-group.com