Graphisoft Published its Half Year Report

Operating margin consistently over 10%

Budapest, August 14, 2003 - Graphisoft® reported today an operating profit for the third consecutive quarter with an operating margin that continues to exceed 10%. Significantly improving in the first half of 2003, operating profit reached € 1,479 thousand compared to an operating profit of € 55 thousand for the same period last year. Revenues grew by 2.3% in the second quarter of 2003 from € 6.6 million to € 6.7 million compared to 2002 results. 2003 six-month revenues of € 13.1 million were slightly below the results of the same 2002 period (€ 13.2 million).

Graphisoft® completed the rollout of all the localized versions of its architectural design software, ArchiCAD® 8, boosting revenues in the second quarter.

In Europe, revenues derived from the architectural software and facility management business lines improved in both the three- and six-month periods. Revenues in Europe increased by 13.1% in the three-month and 11.5% in the six-month periods, respectively. Sales performance in Switzerland, Italy, Austria and the Nordic region improved significantly over the previous period. However, in North America, government orders dropped, depressing the region's overall sales performance. In addition, the depreciation of the US dollar had a negative impact on the region's consolidated revenues when reported in €.

Continued focus on cost management resulted in a decrease by 11.3% in the three-month period and by 11.4% in the six-month period in expenses. Lower expenditures can be substantially attributed to the strong decrease in cost of revenues due to rationalization of Graphisoft's logistics and inventory management. Moreover, the Company's sales, marketing and development expenses were decreased significantly as a result of focusing the new projects for certain geographic regions.

"Despite unfavorable economic conditions worldwide, the financial and market positions of the Company remain strong," said Ray Small, CEO of Graphisoft. "We continue to focus on opportunities for profitable growth while managing our operations to reflect current market realities. The results of the last three quarters provide a solid basis for continued optimism for the rest of the year."

*All amounts are in thousand €, earnings per share are in €.
** EBITDA: Earnings Before Interest, Tax, Depreciation, Amortization
*** n.a.: the exact calculation is ambiguous

Telephone conference:

Graphisoft management will hold a telephone conference regarding this statement at 2:00 pm CET, Thursday, August 14, 2003 for investors, analysts and journalists. To participate, please dial +49 69 27110 400. The telephone conference will be recorded and available at +49 69 92056 444 for 24 hours after the conference call.

The complete report can be downloaded here.

Graphisoft® is a leading provider of design and management software solutions for the architectural profession and the building industry. Founded in 1982, Graphisoft is ranked today among the largest AEC CAD software developers in the world, with ten offices worldwide in addition to its headquarters. ArchiCAD® and other Graphisoft products are used by over 100,000 architects, facility managers and building professionals all over the world. Shares of Graphisoft are traded on the Frankfurt (GPH) and on the Budapest (GRAPHI) Stock Exchange. More information about Graphisoft is available at www.graphisoft.com.