SAP Reports Solid Second Quarter Performance; Sales of mySAP.com Exceeds Expectations.Business and Technology Editors NEW YORK/WALLDORF, Germany--(BUSINESS WIRE)--July 20, 2000 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), the leading provider of inter-enterprise software solutions, today announced its results for the quarter ended June June: see month. 30, 2000. In the second quarter, revenues rose 19% over the same period last year to E1.50 billion (1999: E1.26 billion). License revenues grew by 23% to E554 million (1999: E452 million) of which sales of mySAP.com SAP's brand name for its Internet strategy in the late 1990s as well as a name for its business suite. SAP later changed the mySAP.com business suite to mySAP Business Suite. See mySAP. , the leading e-business platform, accelerated to E261 million or 47% of total license revenues in the second quarter, compared to 22% in the first quarter 2000. Pre-tax profit in the quarter before charges for the employee stock appreciation rights program (STAR) increased 11% to E288 million (1999: E260 million); pre-tax profit including STAR decreased 22% to E193 million (1999: E248 million). Net income in the quarter decreased 18% to E116 million (1999: E142 million). Sales for the first half of 2000 grew 15% to E2.68 billion from E2.34 billion in the same period last year. Pre-tax profit in the first half before charges for STAR was up 50% to E622 million (1999: E416 million); pre-tax profit including STAR decreased 31% to E288 million (1999: E420 million). Net income in the first half was down 28% to E172 million (1999: E240 million). "Less than a year after its introduction, mySAP.com already accounts for almost 50% of total license revenues in the second quarter," 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. "That clearly shows that our e-business platform mySAP.com is enabling an increasing number of businesses around the world to be part of the Internet economy The Internet Economy refers to conducting business through markets whose infrastructure is based on the Internet and World-Wide Web. An Internet economy differs from a traditional economy in a number of ways, including: communication, market segmentation, distribution costs, and price. . Nestle is one example. The company signed a contract that will put mySAP.com at the fingertips "Fingertips" is a 1963 number-one hit single recorded live by "Little" Stevie Wonder for Motown's Tamla label. Wonder's first hit single, "Fingertips" was the first live, non-studio recording to reach number-one on the Billboard Pop Singles chart in the United States. of over 230,000 Nestle employees. Another indication that SAP continues to extend its leadership is that over half of our mySAP.com sales this quarter were to new customers." Improved Performance in the Americas In the second quarter, revenues in the Americas rose 15% to E598 million (1999: E521 million). Sales in the Asia Pacific (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 ) region were up 67% to E192 million (1999: E115 million) while in the region comprising 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. ) revenues increased 13% to E708 million (1999: E624 million). Breaking out license revenues for the quarter: the Americas grew 33% to E215 million, APA were up 197% to E89 million and EMEA decreased 4% to E250 million. In the first half, sales in the APA region were up 55% to E331 million (1999: E214 million), in the EMEA region, revenues increased 14% to E1.32 billion (1999: E1.15 billion) and in the Americas, revenues rose 7% to E1.03 billion (1999: E0.97 billion). "The sales strength of mySAP.com picked up further pace in the second quarter," 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 US organization has quickly refocused its efforts to take advantage of increased market demand. In addition, demand in the Asia Pacific region was particularly strong. In the second half, we will continue to reallocate Verb 1. reallocate - allocate, distribute, or apportion anew; "Congressional seats are reapportioned on the basis of census data" reapportion allocate, apportion - distribute according to a plan or set apart for a special purpose; "I am allocating a loaf of resources in an effort to improve margins and reap the benefits of our healthy pipeline." For the first half, product revenues rose 25% to E1.69 billion (1999: E1.35 billion) and amounted to 63% of total sales. License revenues increased by 14% to E923 million (1999: E807 million). mySAP.com contributed E341 million, or 37% of license sales. Consulting revenues in the first half slowed, decreasing 2% to E725 million (1999: E741 million). Training revenues fell 10% to E195 million (1999: E216 million). Second Quarter 2000 Highlights - Strong customer acceptance of mySAP.com, the SAP e-business platform, continued in the second quarter. New mySAP.com customers in the quarter include: in the Americas, Canada Post, Commonwealth of Pennsylvania, Compaq, Massachusetts Mutual Life Insurance Co.; in Europe, Assicurazioni Generali, British Airways Engineering, Nestle, ProSieben Media, Sainsbury's Homebase; in Asia/Pacific, Mitsui Chemical, NTT Comware, Yamaha Corporation. - SAP welcomed more than 21,000 conference attendees to its SAPPHIRE customer conferences in Berlin and Las Vegas. At the events, SAP showcased continued delivery and strong customer acceptance of mySAP.com. At the European conference, SAP unveiled a new program to provide a clear path for current customers to upgrade to mySAP.com as well as a comprehensive integration strategy that will open mySAP.com to third-party solutions, giving customers greater choice and flexibility. At SAPPHIRE Las Vegas, SAP AG, SAPMarkets, the SAP subsidiary dedicated to deliver mySAP.com marketplaces, and Commerce One announced a preliminary agreement to jointly deliver the next-generation e-business marketplace solution for the Internet economy. - SAPMarkets currently has nine mySAP.com Marketplaces in operation. These electronic marketplaces enable enterprises of all sizes and industries to efficiently conduct collaborative business: Companies' systems and employees are dynamically linked through mySAP.com Marketplaces, allowing them to seamlessly work together over 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 and across company boundaries. Among those currently in operation are the mySAP.com Marketplace for the US (http://marketplace.mySAP.com); the SAP Service Marketplace (http://service.sap.com); a chemical and pharmaceutical Marketplace with BASF BASF Bar Association of San Francisco (since 1872; San Francisco, California) BASF Badische Anilin und Soda Fabrik (German chemical products company) BASF Builders Association of South Florida , Degussa-Huls, Henkel, Wacker-Chemie GmbH, KSB KSB Kogod School of Business (American University) KSB Kelley School of Business (Indiana University) KSB Kantonsschule Am Brühl St. , Linde, Sartorius, Siemens and Wollschlager (http://chempharm.mySAP.com); Marketplace joint venture for Austria with Austria Telekom (http://www.abusiness.at); European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Real Estate Marketplace (http://www.sky7home.de); a Healthcare Marketplace(http://www.neoforma.com); an online marketplace for office supplies Office supplies is the generic term that refers to all supplies regularly used in offices by businesses and other organizations, from private citizens to governments, who works with the collection, refinement, and output of information (colloquially referred to as "paper work"). , equipment and furniture together with Deutsche Bank (http://www.emaro.com); a Marketplace for the UK utilities industry with Achilles (http://www.achillesmarket.com); and a Marketplace for automotive suppliers with Robert Bosch GmbH Robert Bosch GmbH [1] is a German corporation which was started in 1886 by Robert Bosch in Stuttgart, Germany. [2] Bosch businesses include:
Continental AG, INA Ina (ē`nä), city (1990 pop. 60,062), Nagano prefecture, central Honshu, Japan, on the Tenryu River. It is an agricultural and industrial center with a famous agricultural school. Walzlager Scheffler oHG and ZF Friedrichshafen ZF Friedrichshafen AG is a leading worldwide supplier of driveline and chassis technology. With 122 facilities in 26 countries and approximately 55,000 employees worldwide, ZF provides components and systems to the automotive, commercial vehicle, off-highway/construction, marine, AG (http://www.automotive-supplier-mart.com). In addition to the nine mySAP.com Marketplaces currently live, SAPMarkets is actively engaged in the development of 15 more, scheduled to go live in the near future. The SAP Earnings Results Press Conference held today in New York Today in New York is WNBC-TV's pre-Today newscast, also post-Today on weekends, airing from 5 AM to 7 AM weekdays with the local news cut ins being branded as such. at 9:00 AM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT will be broadcast live on the Internet at http://www.SAP.com/investor
Key figures at a glance (in EUR millions)
SAP Group
1st half 1st half %
2000 1999 Change Change
----------------------------------------------------------------------
Revenues 2,681 2,336 345 15
Income before taxes 288 420 -132 -31
Net income 172 240 -68 -28
======================================================================
Headcount 22,988 20,880 2,108 10
(June 30)
- of which in Germany 3,543 2,951 592 20
operational
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 1999 filed with the SEC on April 7, 2000. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. SAP AG preference and common 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 preference 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 AG preference 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 SAP3 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) _p.F or DE and on Quotron under SAGVD.EU. Information on the SAP common shares is available on Bloomberg under the symbol SAP GR, on Reuters under SAPG.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 (in E millions) - Second Quarter 2000
SAP Group
2000 1999 D
------ ------ ----
Software revenue 554 452 23%
Maintenance revenue 396 284 39%
Product revenue 950 736 29%
Consulting revenue 393 398 -1%
Training revenue 100 106 -6%
Service revenue 493 504 -2%
Other revenue 55 20 175%
Total revenue 1,498 1,260 19%
------------- ----- ----- ----
Cost of product -150 -106 42%
Cost of service -394 -414 -5%
Research and development -202 -166 22%
Sales and marketing -420 -276 52%
General and administration -88 -57 54%
Other income/expenses, net 2 -6 -133%
Total operating expense -1,252 -1,025 22%
----------------------- ------ ------ ----
STAR expense -95 -12 692%
Total operating expense incl. STAR -1,347 -1,037 30%
Operating income 151 223 -32%
Other non-operating income/
expenses, net -11 -7 57%
Financial income, net 53 32 66%
Income before income taxes 193 248 -22%
Income taxes -77 -105 -27%
Minority interest 0 -1
Net income 116 142 -18%
Basic earnings per share (in E)
Ordinary shares 0.36 0.45 -20%
Preference shares 0.37 0.46 -20%
DSO (in days) 105 108
Tax rate (as a percentage) 40.0% 42.3%
Figures are reported according to US GAAP.
Consolidated Income Statements (in E millions) - First Half 2000
SAP Group
2000 1999 D
-------- ------- -----
Software revenue 923 807 14%
Maintenance revenue 769 544 41%
Product revenue 1,692 1,351 25%
Consulting revenue 725 741 -2%
Training revenue 195 216 -10%
Service revenue 920 957 -4%
Other revenue 69 28 146%
Total revenue 2,681 2,336 15%
------------- ------ ------ ----
Cost of product -276 -203 36%
Cost of service -760 -808 -6%
Research and development -396 -306 29%
Sales and marketing -708 -504 40%
General and administration -162 -104 56%
Other income/expenses, net -5 -18 -72%
Total operating expense excl. STAR -2,307 -1,943 19%
---------------------------------- ------- ------- -----
STAR expense -334 4 -8450%
Total operating expense incl. STAR -2,641 -1,939 36%
---------------------------------- ------- ------- -----
Operating income 40 397 -90%
Other non-operating income/
expenses, net -43 -13 231%
Financial income, net 291 36 708%
Income before income taxes 288 420 -31%
Income taxes -115 -179 -36%
Minority interest -1 -1 0%
Net income 172 240 -28%
Basic earnings per share (in E)
Ordinary shares 0.54 0.76 -29%
Preference shares 0.55 0.78 -29%
DSO (in days) 105 108
Tax rate (as a percentage) 40.0% 42.5%
Figures are reported according to US GAAP.
Consolidated Balance Sheet (in EUR millions) - First Half 2000
SAP Group
ASSETS
06/30/2000 12/31/1999
------------- ------------
Intangible Assets 119 120
Property, plant and equipment 816 794
Financial Assets 539 610
FIXED ASSETS
1,474 1,524
Inventories/Accounts receivables 1,940 2,157
Liquid Assets 1,156 810
CURRENT ASSETS 3,096 2,967
DEFERRED TAXES 388 284
PREPAID EXPENSES 104 52
TOTAL ASSETS 5,062 4,827
------ ------
SHAREHOLDERS' EQUITY AND LIABILITIES
06/30/2000 12/31/1999
------------ ------------
SHAREHOLDERS' EQUITY 2,388 2,559
MINORITY INTEREST 9 9
RESERVES AND ACCRUED LIABILITIES 1,335 1,278
OTHER LIABILITIES 597 605
DEFERRED INCOME 733 376
TOTAL SHAREHOLDERS'
EQUITY AND LIABILITIES 5,062 4,827
Figures are reported according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . |
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