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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: JULY 24, 1998
SAP AKTIENGESELLSCHAFT SYSTEME,
ANWENDUNGEN, PRODUKTE IN DER DATENVERARBEITUNG
(Exact name of registrant as specified in its charter)
SAP CORPORATION
Systems, Applications and Products in Data Processing
(Translation of registrant's name into English)
NeurottstraBe 16
69190 Walldorf
Federal Republic of Germany
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-_______.
<PAGE> 2
SAP AKTIENGESELLSCHAFT
Systeme, Anwendungen, Produkte in der Datenverarbeitung
FORM 6-K
SAP Aktiengesellschaft Systeme, Anwendungen, Produkte in der
Datenverarbeitung, a stock corporation organized under the laws of the Federal
Republic of Germany (the "Company"), issued a press release dated July 20, 1998
(the "Press Release") announcing certain financial information for the second
quarter and the first half of 1998 and the development of a Strategic Enterprise
Management Solution (SAP SEM), based on the R/3 System. The Press Release is
attached as Exhibit 99.1 hereto and is incorporated by reference herein.
Exhibits
Exhibit No. Exhibit
- ----------- -------
99.1 Press Release, dated
July 20, 1998
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SAP AKTIENGESELLSCHAFT SYSTEME,
ANWENDUNGEN, PRODUKTE IN DER
DATENVERARBEITUNG
(Registrant)
By: /s/ Prof. Dr. Henning Kagermann
--------------------------------
Name: Prof. Dr. Henning Kagermann
Title: Co-Speaker of the Executive
Board
By: /s/ Michael Junge
--------------------------------
Name: Michael Junge
Title: Head of Legal Dpt.
Date: July 24, 1998
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Exhibit Index
Exhibit No. Exhibit
- ----------- -------
99.1 Press Release, dated
July 20, 1998
<PAGE> 1
EXHIBIT 99.1
[SAP Letterhead]
FOR IMMEDIATE RELEASE
Contact: Kevin S. McKay
SAP America
610-355-4060
-or-
Michael Pfister
SAP AG
011-49-6227-7-41758
-or-
James P. Prout
Taylor Rafferty Associates
212-889-4350
SAP SALES INCREASE 61% IN FIRST HALF 1998
Walldorf, Germany, July 20, 1998 -- SAP AG, the world's leading provider of
enterprise business software, announced today that strong growth continued in
the second quarter of 1998. The Group's second quarter revenues grew to DM 2.2
billion ($1.2 billion), an increase of 59% over the same period last year. SAP
continues to expand its infrastructure and staffing is ahead of plan. These
investments, which are aimed at pacing the company's long-term growth, resulted
in a 70% rise in costs to DM 1.7 billion ($940 million). Pre-tax profits for the
quarter rose 30% to DM 521 million ($288 million). For the 1998 first half,
sales climbed 61% to DM 3.9 billion ($2.1 billion), while pre-tax profits grew
43% to DM 832 million ($460 million). Year-on-year comparisons of costs and
pre-tax figures were affected by provisions for SAP's recently announced
employee incentive program, the details of which are discussed later.
SAP's strong performance in the first six months of 1998 was due to its leading
product portfolio. Expansion plans led to the addition of 5,892 new employees
over the number a year ago, with SAP Group headcount rising to 16,976 as of June
30, 1998. Most of this growth was focused in the Group's research and
development staff which was up 57%. Staff growth since the start of 1998 was
4,120, with roughly 1,289 in Germany alone.
"We've stepped up the pace of our expansion and intensified our investment
activities on the heels of our product success and new product pipeline. Our
very strong first half-year performance shows us that we're on the right track
in adding resources to extend our success," said Prof. Dr. h.c. Hasso Plattner,
Co-Chairman of SAP AG.
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* U.S. dollar equivalents are provided for reader convenience at the June 30,
1998 exchange rate of US $1 = DM 1.8087.
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"Customer focus - in product development, professional services and support -
has enhanced SAP's market leadership position. By building on our core
competencies and providing comprehensive industry focused solutions with
TeamSAP, we broaden our partnerships and enhance our performance." added Paul
Wahl, SAP Board Member and CEO, SAP America.
EMPLOYEE INCENTIVE PROGRAM
Pre-tax profit figures for the second quarter were impacted for the first time
by expense provisions for SAP's long-term equity based compensation program,
STAR ("Stock Appreciation Rights"). These provisions totaled DM 35 million for
the quarter and were derived by multiplying the anticipated number of STARs by
the "fair value" of a STAR at the end of the quarter. Expense provisions
associated with the STAR program are distributed on a pro rata basis over the
months during which the program is effective (May 1998 to April 1999). This
meant that provisions were created for two months in the second quarter.
Excluding STAR program provisions, pre-tax profits would have risen by 49% in
the first half, with costs increasing 64% instead of 66% to DM 3.2 billion
(1997: DM 1.9 billion). The pre-tax profit margin for the half was 22% (1997:
24%). Without the STAR provisions, pre-tax profits would have grown 39% in the
second quarter instead of 30%.
SIGNIFICANT GROWTH IN THE AMERICAS AND EUROPE
Strong sales in all other of the Group's regions more than offset slower sales
in the Asia/Pacific region due to the Asian crisis. Revenues in the Americas
sales region rose 72% to DM 1.7 billion in the first half of 1998 (1997: DM 1.0
billion). Sales in Germany were up 53% to DM 776 million (1997: DM 507 million).
Revenues in the rest of Europe grew 72% to DM 934 million (1997: DM 542 million)
and 19% in Asia/Pacific to DM 376 million (1997: DM 315 million). The proportion
of revenues generated outside Germany increased to 80% from 79% in the first
half of 1997. Compared with the second quarter of 1997, sales were up 75% to DM
963 million (1997: DM 549 million) in the Americas, 53% to DM 424 million (1997:
DM 277 million) in Germany, and 70% to DM 549 (1997: DM 322 million) in the rest
of Europe.
ASIAN MARKET DEVELOPMENTS
The situation in Asia had a larger-than-anticipated impact on SAP's second
quarter. Changes in currency exchange rates in the region were primarily
responsible for lower second-quarter revenues in Asia/Pacific, which fell 5% to
DM 197 million against DM 208 million in the same period last year. On constant
currency rates, sales for the region would have grown 14%. SAP's performance in
Asia/Pacific is increasingly being affected by a trend evident in Japan:
Customers and prospects are postponing and in some cases reducing software
investment and implementation projects as the uncertain business climate
continues to damper investments or spreading them over longer periods of time.
"We are monitoring the current situation in Asia closely and have figured it
into our projections for the current fiscal year," says Plattner. "SAP's
position in Asia remains strong and seizing the long-term growth opportunities
in the region remains a core commitment for us."
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Product revenues accounted for the biggest share of first half-year sales,
increasing 54% to DM 2.5 billion (1997: DM 1.6 billion). Consulting revenues
were up 76% to DM 921 million (1997: DM 522 million) and revenues from training
activities grew 68% to DM 426 million (1997: DM 253 million). Product revenues
thus made up 64% of total sales against 67% in the first half of 1997. Sales of
R/3, SAP's flagship product, rose 59% to DM 2.4 billion (1997: DM 1.5 billion)
in the period under review.
"Against the background of our expansion strategy and the uncertain outlook in
Asia, we are maintaining our previously announced expectations for 1998 that
pre-tax profit for the year will increase 30-35%, excluding effects of the STAR
program," commented Prof. Dr. Henning Kagermann, Co-Chairman of SAP AG. "We
expect that sales growth for the year will be roughly 40% for the same reasons
as well as the unknown impacts associated with the year 2000 issue."
STRATEGIC ENTERPRISE MANAGEMENT SOLUTION ANNOUNCED
At its European users conference SAPPHIRE `98 in Madrid at the end of June,
which attracted more than 8,000 users, SAP announced the development of a
Strategic Enterprise Management solution (SAP SEM), based on the R/3 System.
This solution contains a set of integrated applications designed to enable
senior management of large multinational organizations to rapidly enhance value
creation. SAP SEM consists of four new applications - Business Planning and
Simulation (BPS), Business Consolidation and Sourcing (BCS), Corporate
Performance Monitor (CPM) and Stakeholder Relationship Management (SRM) - which
provide executives with the right information at the right time. "SAP's SEM
applications are a breakthrough in value-oriented management techniques. The SAP
SEM information system lets organizations focus on the things that add value to
their business company-wide," stated Kagermann. SAP SEM will be available as of
the fourth quarter of 1998.
Forward looking statements contained in this release may contain forward-looking
information with respect to plans, projections of future performance of the
Company, the occurrence of which involves certain risks and uncertainties
including, but not limited to, product and market acceptance risks, the impact
of competitive pricing, product development, commercialization, and economic and
currency and other risks detailed in the Company's filings with the Securities
and Exchange Commission.
SAP AG preference and common shares are listed on the Frankfurt Stock Exchange,
as well as a number of other exchanges. SAP is a component of the DAX, the index
of 30 German blue chip companies. In the US, SAP's unrestricted ADR, each
equivalent to one-third of an SAP preference share, currently trades over the
counter under the symbol "SAPHY".
Information on the SAP AG preference shares is available on Bloomberg under the
symbol SAP3 GR, on Reuters under SAPG_p.F or DE and on Quotron under SAGVD.EU.
Information on the SAP common shares is available on Bloomberg under the symbol
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<PAGE> 4
SAP GR, on Reuters under SAPG.F and on Quotron under SAGR.EU. Additional
information is available on SAP AG's home page: http://www.sap.com.
# # #
(Tables to follow)
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SECOND QUARTER REVENUES COMPARISON 1998 / 1997 (IN DM MILLIONS)
<TABLE>
<CAPTION>
Q2 1998 Q2 1997 Change % Change
<S> <C> <C> <C> <C>
TOTAL REVENUES 2,175 1,370 805 59
Product revenues 1,396 920 476 52
Consulting revenues 513 280 233 83
Training revenues 229 150 79 53
Other revenues 37 20 17 85
PRETAX PROFIT 521 401 120 30
================================= ======= ==================== =================== ==================
Employees (June 30) 16,976 11,084 5,892 53
</TABLE>
1998 REVENUES BY QUARTER (IN DM MILLIONS)
<TABLE>
<CAPTION>
Q1 1998 Q2 1998 Q3 1998 Q4 1998 1998
<S> <C> <C> <C> <C> <C>
TOTAL REVENUES 1,682 2,175
Product revenues 1,065 1,396
Consulting revenues 408 513
Training revenues 197 229
Other revenues 12 37
PRETAX PROFIT 311 521
</TABLE>
1997 REVENUES BY QUARTER (IN DM MILLIONS)
<TABLE>
<CAPTION>
Q1 1997 Q2 1997 Q3 1997 Q4 1997 1997
<S> <C> <C> <C> <C> <C>
TOTAL REVENUES 1,032 1,370 1,417 2,198 6,017
Product revenues 677 921 914 1,585 4,097
Consulting revenues 242 279 318 412 1,251
Training revenues 103 150 147 180 580
Other revenues 10 20 38 21 89
PRETAX PROFIT 181 401 251 834 1,667
</TABLE>
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SAP GROUP
PRELIMINARY INCOME STATEMENT
SECOND QUARTER
(IN DM MILLIONS)
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
SALES REVENUES 2,175 1,370
Increase in inventories of finished
goods and work-in-process 3 0
Other operating income 43 25
2,221 1,395
Supplies and purchased goods (5) (3)
Purchased services (249) (143)
COST OF MATERIALS (254) (146)
Personnel expenses (778) (477)
Depreciation and amortization (65) (49)
Other operating expenses (618) (337)
OPERATING EXPENSES (1,461) (863)
OPERATING RESULT 506 386
Income from investments 0 1
Income from other securities and loans
of financial assets 0 0
Write-down of financial assets (1) 0
Net interest income 16 14
RESULT FROM ORDINARY OPERATIONS 521 401
</TABLE>
Note: Figures are reported under German accounting principles.
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SAP GROUP
PRELIMINARY INCOME STATEMENT
FIRST HALF
(IN DM MILLIONS)
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
SALES REVENUES 3,857 2,402
Increase in inventories of finished
goods and work-in-process 9 0
Other operating income 85 48
3,951 2,450
Supplies and purchased goods (10) (7)
Purchased services (446) (241)
COST OF MATERIALS (456) (248)
Personnel expenses (1,467) (913)
Depreciation and amortization (119) (89)
Other operating expenses (1,111) (645)
OPERATING EXPENSES (2,697) (1,647)
OPERATING RESULT 798 555
Income from investments 1 1
Income from other securities and loans
of financial assets 0 0
Write-down of financial assets (1) 0
Net interest income 34 26
RESULT FROM ORDINARY OPERATIONS 832 582
</TABLE>
Note: Figures are reported under German accounting principles.
# # #
