SAP Reports Revenue of EUR 1.66 Billion for the First Quarter of 2002.Business Editors WALLDORF, Germany--(BUSINESS WIRE)--April 18, 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 sap, fluid in plants consisting of water and dissolved substances. Cell sap refers to this fluid present in the large vacuole, or cell cavity, that occupies most of the central portion of mature plant cells. ): - SAP extends its position as the world's leading provider of e-business software solutions. Key contracts in the first quarter include Fleet Capital, Fossil, Industrias Gessy Lever, Lord Corporation, and Watson Pharmaceuticals, in the Americas; in EMEA Barclays Bank, CGEY, L'Oreal, Itellium Systems (KarstadtQuelle), Porsche, and Rolls Royce PLC; and in Asia/Pacific China Ocean Shipping, Crystal Group, PTT, Shionogi, Singapore Civil Service, and Toyota Tsusho among others. - SAP announced its new Smart Business Solutions program for the small and medium business (SMB) market at CeBIT. For "sophisticated" SMBs with a high need for individualization and industry-specific functionality, SAP is globally expanding its strategy of offering industry-specific SMB solutions. SAP is also introducing a new application for "advanced" SMBs, which require less sophisticated individualization and industry-specific functionality from their IT solutions. This solution will be based on TopManage, a product currently developed and marketed by Israeli software company TopManage Financial Solutions LTD, which SAP acquired in the first quarter. - SAP extends its open integration strategy with mySAP Technology. SAP announced that it has proactively integrated third-party infrastructure technologies, including Microsoft .NET and IBM WebSphere, satisfying the demand for easy integration of Web services in platform-specific environments. mySAP Technology consists of three elements: the SAP Web Application Server, the exchange infrastructure, and the portal infrastructure. All three elements enable compatibility with technologies from other vendors, including Microsoft .NET and third-party J2EE application servers. The SAP Web Application Server provides an ABAP and J2EE personality and is able to run any J2EE application. - At the SAP Conference on Business Intelligence and Enterprise Portals in Leipzig, Germany, SAP announced the next generation of the mySAP Business Intelligence (mySAP BI) solution. Major enhancements to this solution enable companies to achieve top business intelligence by providing the access, analysis and delivery of any information, structured and unstructured, to anyone throughout the enterprise and beyond. The SAP Conference on Business Intelligence and Enterprise Portals was the world's largest conference of this kind with over 2,500 attendees. SAP AG (NYSE: SAP), the 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 results for the quarter ended March 31, 2002. In the first quarter of 2002, revenues increased 9% over the same period last year 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. 1.66 billion (2001: EUR 1.52 billion). First quarter 2002 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 and TopTier acquisition related charges, rose 2% to EUR 237 million (2001: EUR 233 million), reflecting an operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 14%. Net income for the first quarter 2002, adjusted for the TopTier acquisition costs and the Commerce One impact, was EUR 121 million (2001: EUR 117 million). Earnings per share, adjusted for the TopTier acquisition costs and the Commerce One impact, for the quarter was EUR 0.38 (2001: EUR 0.37). Net income for the first quarter 2002, not adjusted for acquisition costs related to TopTier and the Commerce One impact, was EUR 65 million (2001: EUR 109 million) and respective earnings per share for the quarter was EUR 0.21 (2001: EUR 0.35). "SAP is now positioned as the most open, integrated and comprehensive business software solution provider," 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. "Companies are carefully weighing weigh 1 v. weighed, weigh·ing, weighs v.tr. 1. To determine the weight of by or as if by using a scale or balance. 2. how to get the most out of the investments they've they've Contraction of they have. they've have made. SAP continues to be a leader in this new, more challenging environment." 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 11% to EUR 886 million (2001: EUR 796 million) 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 increased 4% to EUR 185 million (2001: EUR 178 million). Revenues in the Americas A·mer·i·cas , the See America. region grew 7% to EUR 587 million (2001: EUR 550 million). At constant currency rates, revenues in the Americas would have risen 5%. "Against a very strong first quarter last year and despite tougher market conditions, our first quarter turned out largely as we expected. As the new year began, companies in the Americas approached new software investments cautiously cau·tious adj. 1. Showing or practicing caution; careful. 2. Tentative or restrained; guarded: felt a cautious optimism that the offer would be accepted. . 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). once again delivered an
encouraging performance and contributed significantly to our overall
revenue figure," commented 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. Product revenues in the first quarter rose 6% to EUR 999 million (2001: EUR 943 million). License revenues were down by 12% to EUR 402 million (2001: EUR 458 million). Consulting revenues increased 18% to EUR 539 million (2001: EUR 458 million). Training revenues were up 1% to EUR 110 million (2001: EUR 109 million). The number of full-time equivalent Full-time equivalent (FTE) is a way to measure a worker's involvement in a project, or a student's enrollment at an educational institution. An FTE of 1.0 means that the person is equivalent to a full-time worker, while an FTE of 0.5 signals that the worker is only half-time. employees at March 31, 2002, was 29,156, an increase of 3% over the number at December December: see month. 31, 2001. SAP has provided information on revenues from certain specific software solutions since the first quarter of 2001. In the first quarter of 2002, 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) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. (Customer Relationship Management) reached roughly EUR 74 million (2001: EUR 67 million), while mySAP SCM (1) (Software Configuration Management, Source Code Management) See configuration management. (2) See supply chain management. (Supply Chain Management) related revenues totaled around EUR 79 million (2001: EUR 103 million). These figures include revenues from designated solution contracts, as well as figures from integrated solution contracts allocated based on usage surveys. Outlook Conditions for software purchases are challenging, and while Europe remains relatively strong, businesses in the Americas are taking a more deliberate Willful; purposeful; determined after thoughtful evaluation of all relevant factors; dispassionate. To act with a particular intent, which is derived from a careful consideration of factors that influence the choice to be made. and measured approach to new software investments. The company expects a much stronger second half of the year, and still anticipates revenue for the full year to grow by around 15%. 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 of the year 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. First Quarter Highlights - SAP extends its position as the world's leading provider of e-business software solutions. Key contracts in the first quarter include Fleet Capital, Fossil, Industrias Gessy Lever, Lord Corporation, and Watson Pharmaceuticals, in the Americas; in EMEA Barclays Bank, CGEY, L'Oreal, Itellium Systems (KarstadtQuelle), Porsche, and Rolls Royce PLC; and in Asia/Pacific China Ocean Shipping, Crystal Group, PTT, Shionogi, Singapore Civil Service, and Toyota Tsusho among others. - SAP announced its new Smart Business Solutions program for the small and medium business (SMB) market at CeBIT. For "sophisticated" SMBs with a high need for individualization and industry-specific functionality, SAP is globally expanding its strategy of offering industry-specific SMB solutions. SAP is also introducing a new application for "advanced" SMBs, which require less sophisticated individualization and industry-specific functionality from their IT solutions. This solution will be based on TopManage, a product currently developed and marketed by Israeli software company TopManage Financial Solutions LTD, which SAP acquired in the first quarter. - SAP extends its open integration strategy with mySAP Technology. SAP announced that it has proactively integrated third-party infrastructure technologies, including Microsoft .NET and IBM WebSphere, satisfying the demand for easy integration of Web services in platform-specific environments. mySAP Technology consists of three elements: the SAP Web Application Server, the exchange infrastructure, and the portal infrastructure. All three elements enable compatibility with technologies from other vendors, including Microsoft .NET and third-party J2EE application servers. The SAP Web Application Server provides an ABAP and J2EE personality and is able to run any J2EE application. - At the SAP Conference on Business Intelligence and Enterprise Portals in Leipzig, Germany, SAP announced the next generation of the mySAP Business Intelligence (mySAP BI) solution. Major enhancements to this solution enable companies to achieve top business intelligence by providing the access, analysis and delivery of any information, structured and unstructured, to anyone throughout the enterprise and beyond. The SAP Conference on Business Intelligence and Enterprise Portals was the world's largest conference of this kind with over 2,500 attendees. Conference Call/Webcast/Supporting Slides SAP senior management will host a conference call today at 3:00 PM (CET CET abbr. Central European Time CET Central European Time CET n abbr (= Central European Time) → hora de Europa central CET abbr ) / 2:00 PM (GMT (Greenwich Mean Time) See UTC. GMT - Universal Time 1 ) / 9:00 AM (Eastern) / 6:00 AM (Pacific). The conference call will be web cast live at http://www.sap.com/investor and will be available for replay purposes as well. Slides related to today's announcement will be used during the conference call and are also available on the SAP website.
Revenue by Region (in EUR millions)
----------------------------------------------------------------------
Revenue Revenue % License License
1Q 2002 1Q 2001 Change Revenues Revenues
1Q 2002 1Q 2001
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Total 1,658 1,524 9 402 458
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- at constant
currency rates 8
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EMEA 886 796 11 267 264
----------------------------------------------------------------------
- at constant
currency rates 11
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Asia Pacific 185 178 4 45 66
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- at constant
currency rates 6
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Americas 587 550 7 90 128
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- at constant
currency rates 5
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Key figures at a glance (in EUR millions)
SAP Group
----------------------------------------------------------------------
%
1Q 2002 1Q 2001(a) Change Change
----------------------------------------------------------------------
Revenues 1,658 1,524 134 9
----------------------------------------------------------------------
License revenues 402 458 -56 -12
----------------------------------------------------------------------
Operating income 237 233 4 2
before SBCP and TT acquisition
related charges
======================================================================
Headcount 29,156 28,410 746 3
(March 31, 2002 vs.
December 31, 2001)
----------------------------------------------------------------------
(a) except headcount figures
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 2001 filed with the SEC on March 28, 2002. 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 an 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
SAP Group 1. Quarter
(in EUR millions)
----------------------------------------------------------------------
2002 2001 % Change
----------------------------------------------------------------------
Software revenue 402 458 -12%
Maintenance revenue 597 485 23%
Product revenue 999 943 6%
Consulting revenue 539 458 18%
Training revenue 110 109 1%
Service revenue 649 567 14%
Other revenue 10 14 -29%
----------------------------------------------------------------------
Total revenue 1,658 1,524 9%
----------------------------------------------------------------------
Cost of product -221 -197 12%
Cost of service -510 -456 12%
Research and development -222 -206 8%
Sales and marketing -402 -365 10%
General and administration -115 -86 34%
Other income/expenses, net -2 -8 -75%
----------------------------------------------------------------------
Total operating expense -1,472 -1,318 12%
----------------------------------------------------------------------
----------------------------------------------------------------------
Operating income 186 206 -10%
----------------------------------------------------------------------
Other non-operating income/
expenses, net 0 5 -100%
Financial income, net -59 -25 136%
----------------------------------------------------------------------
Income before income taxes 127 186 -32%
----------------------------------------------------------------------
Income taxes -60 -74 -19%
Minority interest -2 -3 -33%
----------------------------------------------------------------------
Net income 65 109 -40%
----------------------------------------------------------------------
----------------------------------------------------------------------
Basic earnings per share (in EUR) 0.21 0.35 -40%
----------------------------------------------------------------------
Consolidated Income Statements
SAP Group 1. Quarter
additional information
(in EUR millions)
----------------------------------------------------------------------
2002 2001 % Change
----------------------------------------------------------------------
Operating Income 186 206 -10%
Depreciation & Amortization 54 53 2%
In-Process R&D 0 0 n/a
----------------------------------------------------------------------
EBITDA 240 259 -7%
Margin as a % of Sales 14% 17%
----------------------------------------------------------------------
Operating Income 186 206 -10%
Total Stock Based Compensation 45 27 67%
Top Tier acquisition cost 6 0 n/a
----------------------------------------------------------------------
Operating Income excluding Stock Based
Compensation & Top Tier acquisition cost 237 233 2%
Margin as a % of Sales 14% 15%
----------------------------------------------------------------------
----------------------------------------------------------------------
Commerce One impact on finance income -52 -8 550%
----------------------------------------------------------------------
----------------------------------------------------------------------
Income before income taxes 127 186 -32%
----------------------------------------------------------------------
Income taxes 60 74 -19%
----------------------------------------------------------------------
Effective Tax Rate 47% 40%
----------------------------------------------------------------------
Tax impact of Top Tier, Commerce One
and others in Percentage Points 14% 2%
----------------------------------------------------------------------
----------------------------------------------------------------------
Net income excluding acquisition cost
of Top Tier & Commerce One 121 117 3%
----------------------------------------------------------------------
EPS excluding acquisition cost of
Top Tier & Commerce One (in EUR) 0.38 0.37 3%
----------------------------------------------------------------------
Consolidated Balance Sheets
SAP Group
(in EUR millions)
ASSETS
----------------------------------------------------------------------
03/31/2002 12/31/2001 % Change
----------------------------------------------------------------------
Intangible assets 497 500 -1%
Property, plant and equipment 1,013 997 2%
Financial assets 672 707 -5%
----------------------------------------------------------------------
FIXED ASSETS 2,182 2,204 -1%
Inventories/Accounts receivables 2,420 2,394 1%
Liquid assets/Marketable securities 1,118 964 16%
----------------------------------------------------------------------
CURRENT ASSETS 3,538 3,358 5%
DEFERRED TAXES 449 480 -6%
PREPAID EXPENSES 188 154 22%
----------------------------------------------------------------------
TOTAL ASSETS 6,357 6,196 3%
----------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
----------------------------------------------------------------------
03/31/2002 12/31/2001 % Change
----------------------------------------------------------------------
SHAREHOLDERS' EQUITY 3,240 3,110 4%
MINORITY INTEREST 66 63 5%
RESERVES AND ACCRUED LIABILITIES 1,057 1,428 -26%
OTHER LIABILITIES 790 1,218 -35%
DEFERRED INCOME 1,204 377 219%
----------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY
AND LIABILITIES 6,357 6,196 3%
----------------------------------------------------------------------
Days Sales Outstanding 94 94
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