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Exhibit 99.1
[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 THIRD QUARTER RESULTS
o Revenues Up 27%
o Operating Income (excluding STAR) Up 89%
o mySAP.com Revenue Share Up to 61%
WALLDORF - OCTOBER 19, 2000 -- SAP AG (NYSE: SAP), the leading provider of
collaborative e-business software solutions, today announced its results for the
quarter ended September 30, 2000. In the third quarter, revenues rose 27% over
the same period last year to Euro 1.42 billion (1999: Euro 1.12 billion).
Operating income before charges for the employee stock appreciation rights
program (STAR) was up 89% to Euro 202 million (1999: Euro 107 million). Pre-tax
profit excluding STAR increased 100% to Euro 208 million (1999: Euro 104
million); pre-tax profit including STAR increased 95% to Euro 154 million (1999:
Euro 79 million). Net income in the quarter increased 96% to Euro 88 million
(1999: Euro 45 million). Third quarter earnings per share increased 100% to
Euro 0.28 per share (1999: Euro 0.14).
Sales of mySAP.com, SAP's leading e-business platform, accelerated to Euro 294
million in the quarter or 61% of total license revenues, compared to 47% in the
second quarter. New customers accounted for 49% of mySAP.com sales.
"In the third quarter, mySAP.com established itself as the leading e-business
platform," said Hasso Plattner, Co-Chairman and CEO of SAP AG. "The market
clearly understands the power of our new solutions and the number of installed
supply chain, customer relationship management and business intelligence systems
is growing rapidly. We are going to capitalize on this deepened understanding to
speed acceptance of our new technology."
In the third quarter, product revenues increased to Euro 913 million (1999:Euro
611 million). License revenues, which are comprised of mySAP.com sales as well
as component based software sales, rose 53% to Euro 480 million (1999:Euro 314
million). Consulting revenues increased 2% toEuro 404 million (1999:Euro 398
million). Training revenues grew 6% to Euro 95 million (1999:Euro 90 million).
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In the third quarter, SAP's operating margin (before STAR) improved to 14% from
10% in last year's third quarter. STAR expenses for the quarter increased 116%
to Euro 54 million (1999: Euro 25).
"We had a very good third quarter as mySAP.com awareness grew and our US
organization continued to rebuild," said Henning Kagermann, Co-Chairman and CEO
of SAP AG. "Moving into the fourth quarter, we expect demand to keep growing.
While the fourth quarter of 1999 was extremely strong, we still expect solid top
line improvement for the fourth quarter of 2000."
NINE MONTHS RESULTS
Sales for the first nine months of 2000 grew 19% to Euro 4.1 billion from
Euro 3.46 billion in the same period last year. Pre-tax profit in the first nine
months before charges for STAR were up 60% to Euro 830 million (1999: Euro 520
million); pre-tax profit including STAR decreased 11% to Euro 442 million (1999:
Euro 499 million). Net income in the first nine months fell by 9% to Euro 260
million (1999: Euro 285).
HIGHLIGHTS IN THE QUARTER
o New mySAP.com customers in the 3rd quarter include: in the Americas, Exxon
Mobil, Molex, Interconnect Technologies Division; in Europe, Air Liquide,
Eggsbenefit.com, Usinor; in Asia/Pacific, Cheil Jedang, Kyushu Electric
Power Company, Singapore Airlines, Tokyo Broadcasting System.
o SAP AG unveiled a wide-ranging, global advertising and promotional
awareness campaign designed to build upon its success as the world's
leading provider of e-business solutions. The announcement was made in
September at the Indianapolis Motor Speedway, site of the SAP United States
Grand Prix Formula One racing, one of the most famous racing venues in the
world. The campaign includes print and television advertisements to be run
in more than 25 countries.
o SAPMarkets Inc., the SAP AG subsidiary dedicated to creating and powering
globally interconnected business-to-business marketplaces, and Commerce
One, Inc. announced availability of both MarketSet and Enterprise Buyer,
their jointly developed next-generation e-business offerings that combine
Commerce One's leading e-marketplace infrastructure with e-procurement,
supply chain, product planning and analysis applications from SAP and
SAPMarkets. The SAPMarkets and Commerce One "dream team" have now delivered
their first joint solution to e-marketplace customers: the "Quadrem" Metals
and Mining procurement marketplace, created by 16 companies in a $200
billion procurement market, and "Enporion", an open, global exchange for
the energy industry founded by five North American power utilities. Other
significant customer wins include corProcure, ForestExpress and the
marketplace for the engineering industry ec4ec (more see:
www.sapmarkets.com).
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o SAP AG announced a broad realignment of its global development force of
almost 6,000 people worldwide. SAP is establishing six General Business
Units (GBUs) to manage its applications development activities; seven
Industry Business Sectors, responsible for the development of mySAP.com
industry solutions; and three additional GBUs, responsible for particular
technologies. The changes will create a more nimble organization, enabling
SAP to better respond to the fast-changing needs of its customers and the
overall market.
CONFERENCE CALL AND WEBCAST
SAP senior management will host a conference call today at 5:00 PM (CET) / 4:00
PM (GMT) / 11:00 AM (EDT) / 8:00 AM (PDT). The conference call will be webcast
live at http://www.sap.com/investor and will be available for replay purposes as
well.
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KEY FIGURES AT A GLANCE (IN EUR MILLIONS)
SAP GROUP
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
3Q 2000 3Q 1999 CHANGE % CHANGE
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
Revenues 1,421 1,123 298 27
------------------------------------------------------------------------------------------------------------------
License revenues 480 314 166 53
------------------------------------------------------------------------------------------------------------------
mySAP.com revenues 294
------------------------------------------------------------------------------------------------------------------
Income before taxes 154 79 75 95
==================================================================================================================
Net income 88 45 43 96
------------------------------------------------------------------------------------------------------------------
Headcount 23,792 21,086 2,706 13
(September 30)
</TABLE>
REVENUE BY REGION (IN EUR MILLIONS)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
REVENUE REVENUE LICENSE REVENUES 3Q LICENSE REVENUES 3Q
3Q 2000 3Q 1999 2000 1999
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
Americas 574 492 188 128
------------------------------------------------------------------------------------------------------------------
Asia Pacific 208 125 92 44
------------------------------------------------------------------------------------------------------------------
EMEA 639 506 200 142
</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 - 3RD QUARTER
SAP Group (in Euro millions)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
2000 1999 (DELTA)
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Software revenue 480 314 53%
Maintenance revenue 433 297 46%
Product revenue 913 611 49%
Consulting revenue 404 398 2%
Training revenue 95 90 6%
Service revenue 499 488 2%
Other revenue 9 24 -63%
---------------------------------------------------------------------------------------------------
TOTAL REVENUE 1,421 1,123 27%
---------------------------------------------------------------------------------------------------
Cost of product -167 -101 65%
Cost of service -411 -394 4%
Research and development -213 -165 29%
Sales and marketing -336 -283 19%
General and administration -86 -63 37%
Other expenses -6 -10 -40%
---------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSE -1,219 -1,016 20%
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
OPERATING INCOME EXCL. STAR 202 107 89%
---------------------------------------------------------------------------------------------------
STAR expense -54 -25 116%
---------------------------------------------------------------------------------------------------
OPERATING INCOME INCL. STAR 148 82 80%
---------------------------------------------------------------------------------------------------
Other non-operating income/
expenses, net 1) 5 -6 -183%
Financial income, net 2) 1 3 -67%
---------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 154 79 95%
---------------------------------------------------------------------------------------------------
Income taxes -62 -33 88%
Minority interest -4 -1 300%
---------------------------------------------------------------------------------------------------
NET INCOME 88 45 96%
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
BASIC EARNINGS PER SHARE (IN Euro) 3)
---------------------------------------------------------------------------------------------------
Ordinary shares 0.28 0.14 100%
Preference shares 0.28 0.14 100%
-----------------------------------------------------------------------------------
DSO (IN DAYS) 4) 104 110
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
TAX RATE (AS A PERCENTAGE) 40.3% 41.8%
-----------------------------------------------------------------------------------
</TABLE>
Figures are reported according to US-GAAP.
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CONSOLIDATED INCOME STATEMENTS - 1ST - 3RD QUARTER
SAP Group (in Euro millions)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
2000 1999 (DELTA)
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Software revenue 1,403 1,121 25%
Maintenance revenue 1,202 841 43%
Product revenue 2,605 1,962 33%
Consulting revenue 1,129 1,139 -1%
Training revenue 290 306 -5%
Service revenue 1,419 1,445 -2%
Other revenue 78 52 50%
---------------------------------------------------------------------------------------------------
TOTAL REVENUE 4,102 3,459 19%
---------------------------------------------------------------------------------------------------
Cost of product -443 -304 46%
Cost of service -1,171 -1,202 -3%
Research and development -609 -471 29%
Sales and marketing -1,044 -787 33%
General and administration -248 -167 49%
Other expenses -11 -28 -61%
---------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSE -3,526 -2,959 19%
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
OPERATING INCOME EXCL. STAR 576 500 15%
---------------------------------------------------------------------------------------------------
STAR expense -388 -21 1748%
---------------------------------------------------------------------------------------------------
OPERATING INCOME INCL. STAR 188 479 -61%
---------------------------------------------------------------------------------------------------
Other non-operating income/
expenses, net 1) -38 -19 100%
Financial income, net 2) 292 39 649%
---------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 442 499 -11%
---------------------------------------------------------------------------------------------------
Income taxes -177 -212 -17%
Minority interest -5 -2 150%
---------------------------------------------------------------------------------------------------
NET INCOME 260 285 -9%
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
BASIC EARNINGS PER SHARE (IN Euro) 3)
---------------------------------------------------------------------------------------------------
Ordinary shares 0.82 0.90 -9%
Preference shares 0.83 0.92 -10%
------------------------------------------------------------------------------------
DSO (IN DAYS) 4) 104 110
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
TAX RATE (AS A PERCENTAGE) 40.0% 42.5%
------------------------------------------------------------------------------------
</TABLE>
Figures are reported according to US-GAAP.
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CONSOLIDATED BALANCE SHEET
SAP Group (in Euro millions)
ASSETS
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
09/30/2000 12/31/1999
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Intangible Assets 127 120
-----------------------------------------------------------------------------------------------------------------------
Property, plant and equipment 853 794
-----------------------------------------------------------------------------------------------------------------------
Financial Assets 5) 718 610
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
FIXED ASSETS 1,698 1,524
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Inventories/Accounts receivables 1,931 2,157
-----------------------------------------------------------------------------------------------------------------------
Liquid Assets 1,048 810
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS 2,979 2,967
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
DEFERRED TAXES 306 284
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
PREPAID EXPENSES 148 52
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 5,131 4,827
-----------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
-----------------------------------------------------------------------------------------------------------------------
09/30/2000 12/31/1999
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY 6) 2,683 2,559
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
MINORITY INTEREST 57 9
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
RESERVES AND ACCRUED LIABILITIES 1,142 1,278
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
OTHER LIABILITIES 695 605
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
DEFERRED INCOME 554 376
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 5,131 4,827
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
Figures are reported according to US-GAAP.
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1) Amount includes non-recurring item of approximately Euro 40 million of
pre-tax gain on initial public offering of a majority owned subsidiary
2) Amount includes non-recurring item of approximately Euro 25 million pre-tax
exit costs relating to an equity investment
3) Adjusted for three for one stock split
4) Based upon 12 month period ended September 30, 2000.
5) In September 2000, the company entered into a call option to hedge the cash
flow exposure resulting from the non-vested STAR expense. Under the terms
of the call option, the Company may elect to receive cash equal to a
portion of the appreciation for 1.5 million SAP Preference Shares in excess
of a fixed price per share. The call option is recorded in Financial Assets
at its fair market value. Changes in fair value are recorded through
earnings and shareholders' equity depending upon the effectiveness of the
hedging relationship. The call option expires in February, 2001
6) In September 2000, the company sold a put option through a private
placement with an institutional investor. The put option, if exercised,
entitles the holder to sell 1.5 million SAP Preference Shares to the
Company for a fixed price per share with limitations on the maximum
exposure to the Company. The put option is recorded in Shareholders' Equity
at its original fair market value. Changes in fair value do not impact
earnings as a result of the option's settlement terms. The put option
expires in February, 2001.
