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[SAP LOGO]
FOR IMMEDIATE RELEASE
Contact: Gundolf Moritz
SAP AG
011-49-6227-7-44872
-or-
David Lowy
Taylor Rafferty, New York
212-889-4350
SAP REPORTS SOLID SECOND QUARTER PERFORMANCE
Sales of mySAP.com exceeds expectations
NEW YORK/WALLDORF -- JULY 20, 2000 -- SAP AG (NYSE: SAP), the leading provider
of inter-enterprise software solutions, today announced its results for the
quarter ended June 30, 2000. In the second quarter, revenues rose 19% over the
same period last year to Euro 1.50 billion (1999: Euro 1.26 billion). License
revenues grew by 23% to Euro 554 million (1999: Euro 452 million) of which sales
of mySAP.com, the leading e-business platform, accelerated to Euro 261 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 Euro 288
million (1999: Euro 260 million); pre-tax profit including STAR decreased 22% to
Euro 193 million (1999: Euro 248 million). Net income in the quarter decreased
18% to Euro 116 million (1999: Euro 142 million).
Sales for the first half of 2000 grew 15% to Euro 2.68 billion from Euro 2.34
billion in the same period last year. Pre-tax profit in the first half before
charges for STAR was up 50% to Euro 622 million (1999: Euro 416 million);
pre-tax profit including STAR decreased 31% to Euro 288 million (1999: Euro 420
million). Net income in the first half was down 28% to Euro 172 million (1999:
Euro 240 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,
Co-Chairman and CEO 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. Nestle is one example. The company signed a
contract that will put mySAP.com at the fingertips 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 Euro 598 million
(1999: Euro 521 million). Sales in the Asia Pacific (APA) region were up 67% to
Euro 192 million (1999: Euro 115 million) while in the region comprising Europe,
the Middle East and Africa (EMEA) revenues increased 13% to Euro 708 million
(1999: Euro 624 million).
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Breaking out license revenues for the quarter: the Americas grew 33% to Euro 215
million, APA were up 197% to Euro 89 million and EMEA decreased 4% to Euro 250
million.
In the first half, sales in the APA region were up 55% to Euro 331 million
(1999: Euro 214 million), in the EMEA region, revenues increased 14% to Euro
1.32 billion (1999: Euro 1.15 billion) and in the Americas, revenues rose 7% to
Euro 1.03 billion (1999: Euro 0.97 billion).
"The sales strength of mySAP.com picked up further pace in the second quarter,"
said Henning Kagermann, 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 resources in an effort to improve
margins and reap the benefits of our healthy pipeline."
For the first half, product revenues rose 25% to Euro 1.69 billion (1999: Euro
1.35 billion) and amounted to 63% of total sales. License revenues increased by
14% to Euro 923 million (1999: Euro 807 million). mySAP.com contributed Euro 341
million, or 37% of license sales. Consulting revenues in the first half slowed,
decreasing 2% to Euro 725 million (1999: Euro 741 million). Training revenues
fell 10% to Euro 195 million (1999: Euro 216 million).
SECOND QUARTER 2000 HIGHLIGHTS
o 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.
o 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.
o 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 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, Degussa-Huls, Henkel, Wacker-Chemie GmbH, KSB,
Linde, Sartorius, Siemens and Wollschlager (http://chempharm.mySAP.com);
Marketplace joint venture for Austria with Austria Telekom
(http://www.abusiness.at); European Real Estate Marketplace
(http://www.sky7home.de); a Healthcare Marketplace
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(http://www.neoforma.com); an online marketplace for office supplies,
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, Continental AG, INA Walzlager Scheffler oHG and ZF
Friedrichshafen 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 at 9:00 AM EDT
will be broadcast live on the Internet at http://www.SAP.com/investor
KEY FIGURES AT A GLANCE (IN EUR MILLIONS)
SAP Group
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
1ST HALF 2000 1ST HALF 1999 CHANGE % CHANGE
<S> <C> <C> <C> <C>
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Revenues 2,681 2,336 345 15
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Income before taxes 288 420 -132 -31
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Net income 172 240 -68 -28
==================================================================================================================
Headcount 22,988 20,880 2,108 10
(June 30)
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- of which in Germany 3,543 2,951 592 20
operational
</TABLE>
Any statements contained in this document that are not historical facts are
forward-looking statements as defined in the U.S. Private Securities Litigation
Reform Act 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
as well as a number of other exchanges. In the US, SAP's American Depositary
Receipts (ADRs), each worth one-fourth of a preference share, trade on the New
York Stock Exchange 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 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
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.
# # #
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CONSOLIDATED INCOME STATEMENTS (IN EURO MILLIONS) - SECOND QUARTER 2000
SAP Group
<TABLE>
<CAPTION>
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2000 1999 D
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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%
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TOTAL REVENUE 1,498 1,260 19%
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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%
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TOTAL OPERATING EXPENSE -1,252 -1,025 22%
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STAR expense -95 -12 692%
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TOTAL OPERATING EXPENSE INCL. STAR -1,347 -1,037 30%
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OPERATING INCOME 151 223 -32%
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Other non-operating income/
expenses, net -11 -7 57%
Financial income, net 53 32 66%
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INCOME BEFORE INCOME TAXES 193 248 -22%
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Income taxes -77 -105 -27%
Minority interest 0 -1
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NET INCOME 116 142 -18%
-------------------------------------------------------------------------------------------------------
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BASIC EARNINGS PER SHARE (IN EURO)
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Ordinary shares 0.36 0.45 -20%
Preference shares 0.37 0.46 -20%
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DSO (IN DAYS) 105 108
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TAX RATE (AS A PERCENTAGE) 40.0% 42.3%
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</TABLE>
FIGURES ARE REPORTED ACCORDING TO US-GAAP.
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CONSOLIDATED INCOME STATEMENTS (IN EURO MILLIONS) - FIRST HALF 2000
SAP Group
<TABLE>
<CAPTION>
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2000 1999 D
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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%
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TOTAL REVENUE 2,681 2,336 15%
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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%
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TOTAL OPERATING EXPENSE EXCL. STAR -2,307 -1,943 19%
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STAR expense -334 4 -8450%
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TOTAL OPERATING EXPENSE INCL. STAR -2,641 -1,939 36%
-------------------------------------------------------------------------------------------------------
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OPERATING INCOME 40 397 -90%
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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%
-------------------------------------------------------------------------------------------------------
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BASIC EARNINGS PER SHARE (IN EURO)
-------------------------------------------------------------------------------------------------------
Ordinary shares 0.54 0.76 -29%
Preference shares 0.55 0.78 -29%
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DSO (IN DAYS) 105 108
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TAX RATE (AS A PERCENTAGE) 40.0% 42.5%
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</TABLE>
FIGURES ARE REPORTED ACCORDING TO US-GAAP.
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CONSOLIDATED BALANCE SHEET (IN EUR MILLIONS) - FIRST HALF 2000
SAP Group
ASSETS
<TABLE>
<S> <C> <C>
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06/30/2000 12/31/1999
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INTANGIBLE ASSETS 119 120
-------------------------------------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT 816 794
-------------------------------------------------------------------------------------------------------------------------
FINANCIAL ASSETS 539 610
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FIXED ASSETS 1,474 1,524
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INVENTORIES/ACCOUNTS RECEIVABLES 1,940 2,157
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LIQUID ASSETS 1,156 810
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CURRENT ASSETS 3,096 2,967
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DEFERRED TAXES 388 284
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PREPAID EXPENSES 104 52
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TOTAL ASSETS 5,062 4,827
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SHAREHOLDERS' EQUITY AND LIABILITIES
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06/30/2000 12/31/1999
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SHAREHOLDERS' EQUITY 2,388 2,559
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MINORITY INTEREST 9 9
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RESERVES AND ACCRUED LIABILITIES 1,335 1,278
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OTHER LIABILITIES 597 605
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DEFERRED INCOME 733 376
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TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 5,062 4,827
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</TABLE>
FIGURES ARE REPORTED ACCORDING TO US-GAAP.
