Trading Update

Embargoed Release: 07:00hrs Tuesday 18 January 2005

                                  SOPHEON PLC                                  

                         (`Sopheon' or `the Company')                          

                                TRADING UPDATE                                 

Sopheon plc, the international provider of solutions that improve the return
from innovation and product development, announces that the Company's EBITDA
result for the final quarter of 2004 is expected to be positive, and that the
consolidated annual EBITDA loss for 2004 is expected to be in line with broker
forecasts of £1.15m (2003 - £4.07m). Sales growth over the prior year achieved
in Sopheon's continuing software business is substantial, however, total
reported revenues for 2004 are expected to be moderately below broker
forecasts. This expectation is due in part to the weakness in the dollar during
the later stages of the year. Nevertheless the overall effect of the weak
dollar is expected to have been marginally positive, due to the fact that a
large portion of Sopheon's costs are dollar denominated.

As indicated in earlier announcements, the final quarter performance was
dependent on completion of major sales in December. Sopheon was successful in
signing three such orders. Each customer is a global leader in its respective
industry and a widely recognized name, and two of the transactions included
license fees of around $600,000. Apart from their financial and brand value,
these deals underpin Sopheon's credentials in two industries with significant
identified potential: fast-moving consumer goods (FMCG) and financial services.
Several other transactions were concluded during the quarter, primarily in the
chemicals sector, where we already have a substantial base of customers. We
continue to focus on pipeline creation and extending business with existing
customers. An excellent example of the latter is BASF. Developed as a customer
through one of Sopheon's distribution partners, BASF began implementation of
Accolade a year ago. Our relationship with this chemicals industry leader has
grown rapidly since then, and BASF is now one of four Sopheon clients that have
contracted for 2000 or more Accolade seat-licenses.

Sopheon made important progress in 2004 in positioning itself for the longer
term by securing partnerships on two fronts: strategic alliances in key
markets, and distribution partners in geographical areas outside the Company's
existing sphere of operations. As a result of this effort we are part of
Microsoft's Collaborative Product Development initiative. Since announcement of
the program in October, Microsoft and Sopheon have been working together to
enhance and promote the integration of their technologies. To enable
development efforts arising from this and other initiatives, and with support
from Microsoft, Sopheon implemented a controlled expansion in R&D resources,
recruiting into our Denver development center. During the year Sopheon also
undertook a successful balance sheet restructuring, and continues to have
access to the group's €10m equity line, of which over 90% remains untapped.

Financial expectations noted above are subject to the completion of the
year-end financial close process. Consistent with prior years, Sopheon plans to
issue its 2004 preliminary results around the end of March.

Sopheon's Chairman, Barry Mence said:

'Achieving a positive quarterly result is an important milestone for Sopheon.
We are focused on the challenge of maintaining this momentum into the first
half of 2005, encouraged by our recent successes and the opportunities that are
building through our strategic relationships.'

For further information contact:

Barry Mence, Chairman   Sopheon plc                  Tel : + 44 (0) 1483 685   
                                                     735                       
Arif Karimjee, CFO                                                             
                                                                               
Adam Reynolds           Hansard Communications       Tel : + 44 (0) 207 245    
                                                     1100                      
Andrew Tan                                                                     
                                                     + 44 (0) 7957 203 685     
                                                                               
Barbara Jansen          Citigate First Financial     Tel : + 31 (0) 205 754 010

About Sopheon

Sopheon (LSE:SPE) is an international provider of software and services that
help organizations improve the business impact of product development. The
Sopheon Accolade® product development system automates gate- or phase-based
product development (PD) processes and provides strategic decision support that
allows companies to improve innovation, cut product development spending waste
and shorten time to market. Sopheon is listed on the AIM market of the London
Stock Exchange and on the Euronext in the Netherlands. For more information,
please visit www.sopheon.com.