SAP 2001 Revenues Total EUR 7.3 Billion; Record Fourth Quarter Sales; Number One in Supply Chain Management; Number Two in CRM.Business Editors WALLDORF, Germany--(BUSINESS WIRE)--Jan. 23, 2002 SAP AG (company) SAP AG - (Systeme, Anwendungen, Produkte in der Datenverarbeitung - German for "Systems, Applications and Products in Data Processing") A company from Germany that sells the leading suite of client-server business software. The US branch is called SAP America. (NYSE NYSE See: New York Stock Exchange : SAP): -- License sales up 5% in FY 2001 -- Operating margins excluding stock-based compensation and TopTier acquisition related charges stable at 20% -- Leader in open, integrated software solutions SAP AG (NYSE: SAP), the world's leading provider of e-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. software solutions, today announced its preliminary financial results for the fourth quarter and year ended December December: see month. 31, 2001. For the year, sales increased 17% over 2000 to EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 7.34 billion (2000: EUR 6.27 billion). Fourth Quarter Results In the fourth quarter of 2001, revenues rose 7% over the same period last year to EUR 2.32 billion (2000: EUR 2.16 billion). Fourth quarter 2001 operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , before charges for stock-based compensation programs (STAR and LTI LTI Linear Time Invariant LTI Long Term Incentive (NZ) LTI Lingua Tertii Imperii (language of the NAZI empire, Latin) LTI Lost Time Injury LTI Leadership Training Institute LTI Lost Time Incident ) and TopTier acquisition related charges, declined 8% to EUR 613 million (2000: EUR 668 million). Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , excluding stock based compensation and TopTier acquisition related charges, was 26% (2000: 31%). Net income for the fourth quarter 2001, adjusted for the TopTier acquisition costs and the Commerce One impact, was EUR 379 million (2000: EUR 375 million) and earnings per share was EUR 1.21 (2000: EUR 1.19). "SAP is alone in providing companies and organizations with a comprehensive approach to business infrastructure software," said Hasso Plattner Hasso Plattner is a cofounder of software giant SAP AG. Today he's Chairman of the Supervisory Board of SAP AG. Biography Hasso Plattner (1944-01-21 – in Berlin) is a German entrepreneur. , Co-Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of SAP AG. "We continue to strengthen our offerings in CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. , SCM (1) (Software Configuration Management, Source Code Management) See configuration management. (2) See supply chain management. , ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. , and Marketplaces/Portals, spending on technology that unifies existing software investment and leveraging it for optimum return." In the quarter, revenues in Europe, the Middle East and Africa Europe, the Middle East and Africa, usually abbreviated to EMEA, is a regional designation used for government, marketing and business purposes. It is particularly common amongst North American based companies, who often divide their international operations into the (EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. ) region increased 6% to EUR 1.2 billion (2000: EUR 1.14 billion) and in the Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). region (APA (All Points Addressable) Refers to an array (bitmapped screen, matrix, etc.) in which all bits or cells can be individually manipulated. APA - Application Portability Architecture ) revenues were up 8% to EUR 248 million (2000: EUR 230 million). Revenues in the Americas A·mer·i·cas , the See America. region rose 8% to EUR 864 million (2000: EUR 797 million); however, at constant currency rates, revenues in the Americas would have risen 13%. "Our organization executed well in the fourth quarter, particularly given the very tough business environment. Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). was solid
as anticipated, and the US exceeded our expectations and continued to
gain market share," said Henning Kagermann '''Executive Board: Henning Kagermann.Chairman of the Executive Board of SAP AG and CEO''' Henning Kagermann is chairman of the Executive Board of SAP AG and Chief Executive Officer (CEO). , Co-Chairman and CEO of SAP AG. "Our focus now is squarely square·ly adv. 1. Mathematics At right angles: sawed the beam squarely. 2. In a square shape. 3. on the customer, and we are initiating a stream of new products and services as well as enhanced solutions to create an irresistible ir·re·sis·ti·ble adj. 1. Impossible to resist: an irresistible impulse to sneeze. 2. Having an overpowering appeal: irresistible beauty. software offering." Product revenues in the fourth quarter rose 5% to EUR 1.6 billion (2000: EUR 1.52 billion). License revenues were down 2% to EUR 1.03 billion (2000: EUR 1.06 billion). Consulting and training revenues rose 11% to EUR 572 million (2000: EUR 516 million) and 5% to EUR 117 million (2000: EUR 111 million), respectively. The Company continued to take market share in sales of specific software solutions. In the fourth quarter of 2001, software revenues related to mySAP SAP's brand name for a variety of its products. mySAP Business Suite includes modules for enterprise resource planning (ERP), customer relationship management (CRM), product life cycle management (PLM), supplier relationship management (SRM) and supply chain management (SCM). See mySAP.com and SAP. CRM (Customer Relationship Management) reached approximately EUR 196 million, representing 19% of total software license sales (EUR 1.03 billion). Fourth quarter mySAP SCM (Supply Chain Management) related software revenues totaled around EUR 232 million, representing 23% of total software license sales. These figures include revenues from designated solution contracts, as well as figures from integrated solution contracts, which are allocated based on usage surveys. Full Year Results For 2001, sales increased 17% over 2000 to EUR 7.34 billion (2000: EUR 6.27 billion). Operating income, before charges for stock-based compensation and TopTier acquisition related charges, was up 18% to EUR 1.47 billion (2000: EUR 1.24 billion). License revenues for 2001 rose 5% to EUR 2.58 billion (2000: EUR 2.46 billion). Consulting revenues grew 27% to EUR 2.08 billion (2000: EUR 1.65 billion) and training revenue increased 16% to EUR 466 million (2000: EUR 401 million). In 2001, sales in the APA region were up 9% to EUR 841 million (2000: EUR 769 million), in the EMEA region, revenues increased 23% to EUR 3.8 billion (2000: EUR 3.09 billion) and in the Americas, revenues rose 12% to EUR 2.7 billion (2000: EUR 2.41 billion). Over the year, software revenues related to mySAP CRM (Customer Relationship Management) reached approximately EUR 445 million, representing 17% of total software license sales (EUR 2.58 billion). Full year mySAP SCM (Supply Chain Management) related license revenues totaled around EUR 583 million, representing 23% of total software license sales. These figures include revenues from designated solution contracts, as well as figures from integrated solution contracts, which are allocated based on usage surveys. With these results the Company established itself as number one in the market for SCM software and a fast growing number two in CRM software. Outlook SAP expects 2002 to be another challenging year, as software sales trends continue to be unsettled in a tough economic environment. For the full year, SAP anticipates revenue to grow by around 15%, with stronger software license sales coming in the second half, in line with past quarterly developments. For the whole of 2002, SAP also expects its operating margin excluding stock-based compensation and TopTier acquisition related charges to improve at least one percentage point over the 20.0% achieved in 2001. SAP anticipates that the improvement will become more evident in the second half as software license performance improves and the Group benefits from ongoing cost curtailment Curtailment The act of contracting or reducing operations of a company in the hope of bringing it financial or operational stability. This management technique is often used when a company has grown too fast and is unable to effectively manage its operations. measures. 2001 Highlights -- SAP extends its position as the world's leading provider of e-business software solutions. Key contracts in the fourth quarter include Air Products, Graybar Electric, Nike, Petrobras and PricewaterhouseCoopers in the Americas; in EMEA Danone, Deutsche Post Deutsche Post AG (ISIN: DE0005552004, LSE: DPO) is a German post, logistics and courier headquartered in Bonn, previously the German state-owned mail monopoly. It has 520,000 employees in more than 220 countries and territories worldwide and generated revenue of € 60. , EDF-GDF, Hoffmann La Roche La Roche may refer to:
Unilever; and in Asia/Pacific CLP 1. CLP - Cornell List Processor. 2. CLP - Constraint Logic Programming. Power HongKong, Mitsubishi Heavy Industries, Samsung, and Yamaha among others. -- SAP announced mySAP Technology for open integration at TechEd teched adj. Variant of tetched. 2001 in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. . mySAP Technology consists of three elements: Web Application Server, exchange infrastructure and portal infrastructure. This technology reduces the customer's cost of ownership and increases flexibility by allowing collaboration Working together on a project. See collaborative software. across business processes and among users - even beyond company boundaries - on one reliable Web infrastructure. -- SAP created a new company, SAP Portals, dedicated to developing and marketing comprehensive, open-enterprise portal and business intelligence products. SAP Portals combines SAP's existing efforts in enterprise portals See corporate portal. with the technology of TopTier Software, a leading provider of enterprise information portal software Portal Software was founded in 1985 as Portal Information Network, one of the first ISPs in the San Francisco Bay Area. It was founded by John Little. The company offered its own interface through modem access that featured Internet email. , which was acquired by SAP in April. -- SAP concluded additional investment in Commerce One in August. SAP and Commerce One remain strategic partners and are closely engaged with development, sales and support for MarketSet, the platform for marketplaces. The relationship continues to grow and strengthen especially as it relates to mySAP Technology and in particular regarding exchange-based business-to-business integration among business partners. SAP currently owns around 20% of Commerce One. -- SAP began shipping the newest version of mySAP Customer Relationship Management to customers worldwide in August. Among other solution highlights, SAP delivered mySAP CRM with unparalleled breadth and depth of functionality. mySAP CRM serves as a platform to openly integrate with either SAP or non-SAP business applications such as supply chain management, product lifecycle Product lifecycle or product life cycle is the course of a product's sales and profits over time. The five stages of each product lifecycle are product development, introduction, growth, maturity and decline. management and human lifecycle management providing flexibility that meets each businesses' unique needs. -- SAP converted its preference shares into ordinary shares moving to a one-share, one-vote standard. This provides the Company with greater flexibility and brings SAP more in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with international corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. practices. -- SAP welcomed more than 20,000 attendees to its three SAPPHIRE customer conferences in Lisbon, Orlando and Brisbane. In addition, over 21,000 people followed these conferences on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.sap.com/sapphire Conference Call/Webcast/Supporting Slides SAP senior management will host a conference call today at 5:00 PM (CET CET abbr. Central European Time CET Central European Time CET n abbr (= Central European Time) → hora de Europa central CET abbr ) / 4:00 PM (GMT (Greenwich Mean Time) See UTC. GMT - Universal Time 1 ) / 11:00 AM (Eastern) / 8:00 AM (Pacific). This call will be web cast live and will be available for replay purposes.
Revenue by Region (in EUR millions)
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Revenue Revenue %
4Q 2001 4Q 2000 Change Change
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Total 2,315 2,163 152 7
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- at constant currency rates 10
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EMEA 1,203 1,136 67 6
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- at constant currency rates 7
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Asia Pacific 248 230 18 8
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- at constant currency rates 19
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Americas 864 797 67 8
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- at constant currency rates 13
Key figures at a glance (in EUR millions)
SAP Group
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%
4Q 2001 4Q 2000 Change Change
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Revenues 2,315 2,163 152 7
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License revenues 1,030 1,056 -26 -2
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Income before taxes 509 582 -73 -13
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Net income 319 367 -48 -13
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Headcount
(December 31) 28,410 24,178 4,232 18
Any statements contained in this document that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined in the U.S. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Words such as "believe," "estimate," "intend," "may," "will," "expect," and "project" and similar expressions as they relate to the Company are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the Company's future financial results are discussed more fully in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC"), including the Company's Annual Report on Form 20-F for 2000 filed with the SEC on March 28, 2001. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. SAP AG ordinary shares are listed on the Frankfurt Stock Exchange Frankfurt Stock Exchange The largest of Germany's eight securities exchanges, operated by Deutsche Borse AS. as well as a number of other exchanges. In the US, SAP's American Depositary Receipts American Depositary Receipt (ADR) Certificates issued by a US depository bank, representing foreign shares held by the bank, usually by a branch or correspondent in the country of issue. (ADRs), each worth one-fourth of a ordinary share, trade on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol `SAP'. SAP is a component of the DAX, the index of 30 German blue chip companies. Information on the SAP common shares is available on Bloomberg Bloomberg A major global provider of 24-hour financial news and information including real-time and historic price data, financials data, trading news and analyst coverage, as well as general news and sports. under the symbol SAP GR, on Reuters Reuters British cooperative news agency. Founded in 1851 by Paul Julius Reuter, it was initially concerned with commercial news but began to serve a growing newspaper clientele after the London Morning Advertiser subscribed in 1858. under SAPG SAPG Software Acquisition Process Group SAPG Sam Ace Plumbing Goods SAPG Secret Army of Pro Gamers (online gaming army) .F and on Quotron under SAGR SAGR Stand-Alone Air GPS Receiver .EU. Additional information is available on SAP AG's home page: http://www.sap.com
Consolidated Income Statements - 4th Quarter
SAP Group (in EUR millions)
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2001 2000(DELTA)
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Software revenue 1,030 1,056 -2%
Maintenance revenue 573 468 22%
Product revenue 1,603 1,524 5%
Consulting revenue 572 516 11%
Training revenue 117 111 5%
Service revenue 689 627 10%
Other revenue 23 12 92%
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Total revenue 2,315 2,163 7%
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Cost of product -296 -235 26%
Cost of service -529 -471 12%
Research and development -245 -260 -6%
Sales and marketing -518 -460 13%
General and administration -109 -108 1%
Other income/expenses, net -44 -14 214%
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Total operating expense -1,741 -1,548 12%
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Operating income 574 615 -7%
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Other non-operating income/
expenses, net -2 -18 -89%
Financial income, net -63 -15 320%
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Income before income
taxes 509 582 -13%
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Income taxes -187 -215 -13%
Minority interest -3 0 n/a
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Net income 319 367 -13%
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Basic EPS (in EUR) 1.02 1.17 -13%
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Consolidated Income Statements - 4th Quarter
SAP Group (in EUR millions)
Additional Information
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2001 2000(DELTA)
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Operating Income 574 615 -7%
Depreciation & Amortization 80 67 19%
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EBITDA 654 682 -4%
as a % of Sales 28% 32%
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Operating Income 574 615 -7%
Total Stock Based Compensation 19 53 -64%
TopTier Acquisition costs 20 0 n/a
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Operating Income excluding
Stock Based Compensation
and TopTier acquisition costs 613 668 -8%
as a % of Sales 26% 31%
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Commerce One impact on finance income -41 -8 413%
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----------------------------------------------------------------------
Income before income taxes 509 582 -13%
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Income taxes 187 215 -13%
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Effective Tax Rate 37% 37%
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Tax impact of Top Tier & Commerce One in
Percentage Points 4% 1%
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EPS excluding acquisition cost of Top Tier &
Commerce One (in EUR) 1.21 1.19 2%
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Consolidated Income Statements - 1st - 4th Quarter
SAP Group (in EUR millions)
----------------------------------------------------------------------
2001 2000(DELTA)
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Software revenue 2,581 2,459 5%
Maintenance revenue 2,121 1,670 27%
Product revenue 4,702 4,129 14%
Consulting revenue 2,083 1,645 27%
Training revenue 466 401 16%
Service revenue 2,549 2,046 25%
Other revenue 90 90 0%
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Total revenue 7,341 6,265 17%
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Cost of product -885 -722 23%
Cost of service -1,963 -1,750 12%
Research and development -898 -969 -7%
Sales and marketing -1,801 -1,577 14%
General and administration -388 -418 -7%
Other income/expenses, net -94 -26 262%
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Total operating expense -6,029 -5,462 10%
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Operating income 1,312 803 63%
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Other non-operating income/
expenses, net -11 -56 -80%
Financial income, net -233 266 -188%
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Income before income taxes 1,068 1,013 5%
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Income taxes -475 -392 21%
Minority interest -12 -5 140%
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Net income 581 616 -6%
----------------------------------------------------------------------
----------------------------------------------------------------------
Basic EPS (in EUR) 1.85 1.96 -6%
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Consolidated Income Statements - 1st - 4th Quarter
SAP Group (in EUR millions)
Additional Information
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2001 2000(DELTA)
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Operating Income 1,312 803 63%
Depreciation & Amortization 280 223 26%
In-Process R&D 6 0 n/a
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EBITDA 1,598 1,026 56%
as a % of Sales 22% 16%
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Operating Income 1,312 803 63%
Total Stock Based Compensation 98 441 -78%
TopTier acquisition costs 61 0 n/a
----------------------------------------------------------------------
Operating Income excluding
Stock Based Compensation
and TopTier acquisition costs 1,471 1,244 18%
as a % of Sales 20% 20%
----------------------------------------------------------------------
----------------------------------------------------------------------
Commerce One impact on finance income -163 -19 758%
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----------------------------------------------------------------------
Income before income taxes 1,068 1,013 5%
----------------------------------------------------------------------
Income taxes 475 392 21%
----------------------------------------------------------------------
Effective Tax Rate 44% 39%
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Tax impact of Top Tier & Commerce One in
Percentage Points 7% 1%
----------------------------------------------------------------------
----------------------------------------------------------------------
EPS excluding acquisition cost of Top Tier &
Commerce One (in EUR) 2.54 2.02 26%
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Consolidated Balance Sheet
SAP Group (in EUR millions)
ASSETS
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12/31/2001 12/31/2000(DELTA)
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Intangible Assets 496 116 328%
Property, plant and equipment 997 871 14%
Financial Assets 707 637 11%
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FIXED ASSETS 2,200 1,624 35%
Inventories/Accounts receivables 2,389 2,393 0%
Liquid Assets/Marketable Securities 965 1,182 18%
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CURRENT ASSETS 3,354 3,575 -6%
DEFERRED TAXES 465 305 52%
PREPAID EXPENSES 156 115 37%
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TOTAL ASSETS 6,175 5,619 10%
----------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
----------------------------------------------------------------------
12/31/2001 12/31/2000(DELTA)
----------------------------------------------------------------------
SHAREHOLDERS' EQUITY 3,109 2,927(1) 6%
MINORITY INTEREST 60 61 -2%
RESERVES AND ACCRUED LIABILITIES 1,411 1,435 -2%
OTHER LIABILITIES 1,218 831 47%
DEFERRED INCOME 377 365 3%
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TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 6,175 5,619 10%
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Days Sales Outstanding 94 93
(1) includes temporary equity of EUR 409.5 million
Remark As a result of surpassing the 20% ownership threshold in Commerce One Inc., SAP is required to use the equity method of accounting to record, in finance income, a portion of Commerce One's net income or loss based upon SAP's investment percentage. In addition, SAP allocated the purchase price based on the ownership percentage of the Commerce One's recorded net equity. Any excess purchase price resulted in capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. of additional assets including, in-process research and development ("in-process R&D"), software or other intangibles. Amounts pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to in-process R&D were written off immediately. Other intangibles identified are amortized over their estimated useful lives. Remaining amounts were considered goodwill, which is not amortized but rather will be subjected to annual impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. testing. Amounts capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. are recorded in financial assets Financial assets Claims on real assets. and related expenses are reflected in finance income. Under U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , the equity method must also be applied retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin for investments previously held in Commerce One Inc., to improve comparability. Accordingly, financial result, financial assets and stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. amounts included since the second quarter of 2000 have been restated to reflect this retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a change in accounting. This is purely an accounting measure that neither effects SAP's cash position, nor its operating results. The 2001 second quarter impact is largely due to Commerce One's one-time charges resulting from the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . |
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