EX-99.1 2 f00248ex99-1.txt PRESS RELEASE 1 EXHIBIT 99.1 PRESS INFORMATION SAP AG Neurottstrasse 16 D-69190 Walldorf Germany CORPORATE COMMUNICATIONS Phone +49 (62 27) 7-4 63 11 FOR IMMEDIATE RELEASE Fax +49 (62 27) 7-4 63 31 www.sap.com E-mail: press@sap.com Contact: Gundolf Moritz SAP AG +49-6227-7-44872 -or- Stefan Gruber SAP AG +1-212-653-9821 -or- Jim Prout Taylor Rafferty +1-212-889-4350 SAP REPORTS STRONG SECOND QUARTER RESULTS o Revenues increased 24% to E 1.85 billion o Operating margins improved to 23% o Software license revenues increased 17% o Extends global leadership in e-business solutions o Achieves global leadership in supply chain management solutions o Confirms expectations through the first nine months of 2001 o Expects better than 20% growth in revenue for full year 2001 NEW YORK/WALLDORF, GERMANY -- JULY 19, 2001 -- SAP AG (NYSE: SAP), the leading provider of e-business software solutions, today announced strong sales and profit performance for the second quarter and half year ended June 30, 2001. In the second quarter of 2001, revenues rose 24% over the same period last year to E 1.85 billion (2000: E 1.5 billion). Second quarter 2001 operating income, before charges for stock-based compensation programs (STAR and LTI) and TopTier acquisition related costs, rose 72% to E 424 million (2000: E 246 million). Operating margin, excluding stock based compensation and TopTier acquisition related charges, improved to 23% (2000: 16%). Earnings before interest, taxes, depreciation and amortization ("EBITDA") improved by 118% to E 450 million (2000: E 206 million). Net income for the second quarter 2001 grew 78% to E 206 million (2000: E 116 million) and earnings per share for the quarter was E 0.65 (2000: E 0.37). Earnings per share excluding charges related to the acquisition of TopTier were up 92% to E 0.71 (2000: E 0.37). "We are the acknowledged leader in e-business software solutions -- no other company comes even close in the breadth and depth of our offerings," commented Hasso Plattner, Co-Chairman and CEO of SAP AG. "Customers and prospects trust our ability to deliver complete solutions to business challenges in any industry anywhere. We continue to 6 2 - 2 - expand our leadership through investments in enterprise portal solutions and exchange technology, which we consider to be significant revenue drivers of the future." In the quarter, revenues in Europe, the Middle East and Africa (EMEA) region increased 36% to E 962 million (2000: E 708 million) and in the Asia-Pacific region (APA) revenues were up 15% to E 220 million (2000: E 192 million). Revenues in the Americas region rose 12% to E 671 million (2000: E 598 million); however, at constant currency rates, revenues in the Americas would have risen 6%. "Our strong operating performance this quarter was driven mostly by our ability to control on-going costs. In an uncertain business environment, SAP's strength and commitment are a competitive advantage. Excluding the currency effects, all regions performed well; even in the Americas, where we believe our overall market share increased," said Henning Kagermann, Co-Chairman and CEO of SAP AG. SAP confirms its earlier expectations for the first nine months of 2001. SAP has also provided its extended expectations for revenue and margin performance for the full year. SAP expects revenue for the full year 2001 to grow by more than 20%. Operating margin, excluding stock based compensation and acquisition related charges, are expected to exceed the 20% achieved in 2000 by 1 to 2 percentage points. Product revenues were strong in the second quarter rising 22% to E 1.16 billion (2000: E 950 million). License revenues were up 17% to E646 million (2000: E 554 million). Consulting and training revenues were strong during the second quarter, rising 35% to E 529 million (2000: E 393 million) and 27% to E 127 million (2000: E 100 million), respectively. For the second consecutive quarter, the company is providing additional information on revenues from certain specific software solutions. In the second quarter of 2001, software revenues related to mySAP CRM (Customer Relationship Management) reached roughly E 104 million up 55% from the first quarter (E 67 million). mySAP SCM (Supply Chain Management) related revenues totaled around E 150 million, up 46% from the first quarter of 2001 (E 103 million). In the SCM solution market, SAP is now the clear market leader. These figures include revenues from designated solution contracts, as well as figures from integrated solution contracts, which are allocated based on usage surveys. HALF YEAR RESULTS For the first half, sales increased 26% over 2000 to E 3.38 billion (2000: E 2.68 billion). Operating income before charges for stock based compensation and acquisition charges related to TopTier was up 76% to E 657 million (2000: E 374 million). License revenues for the first half of 2001 rose 20% to E 1.1 billion (2000: E 923 million). Consulting revenues grew 36% to E 987 million (2000: E 725 million) and training revenue increased 21% to E 236 million (2000: E 195 million). In the first half, sales in the APA region were up 20% to E 398 million (2000: E 331 million), in the EMEA region, revenues increased 34% to E 1.76 billion (2000: E 1.32 billion) and in the Americas, revenues rose 18% to E 1.22 billion (2000: E 1.03 billion). 3 - 3 - SECOND QUARTER HIGHLIGHTS o MAJOR CONTRACTS IN THE QUARTER included Acterna and Compaq from the US, Globe and Mail from Canada, and Unibanco from Brazil in the Americas; Cadbury Schweppes, Poste Italiane, AstraZeneca, Nokia, BBC and Siemens Business Services in EMEA; Korean Broadcasting Systems, Japan Airlines and Sankyo from Japan in Asia/Pacific. o MORE THAN 18,000 DELEGATES ATTENDED SAPPHIRE LISBON AND SAPPHIRE ORLANDO, SAP'S INTERNATIONAL E-BUSINESS CONFERENCES. At the conferences, SAP outlined its open integration strategy based on component integration within the mySAP.com e-business platform, collaborative process integration provided by public and private exchanges from SAPMarkets, and user level integration through Portals provided by the SAP Portals subsidiary. SAP also announced plans for SAP R/3 Enterprise, the evolution of SAP R/3. SAP R/3 Enterprise preserves customers' investments in existing information technology and enables a more seamless evolution to mySAP.com Solutions. In addition, SAP announced an expansion of the long-standing global strategic alliance with IBM to cover the entire mySAP.com e-business platform. o SAP AND COMMERCE ONE ANNOUNCED AN EXPANSION OF THEIR ALLIANCE in which SAP has agreed to make a substantial additional investment in Commerce One of up to $225 million. Including prior investments and considering Commerce One's recent issuance of new shares, SAP will own approximately 20 percent of Commerce One outstanding common stock. o SAP ANNUAL GENERAL MEETING APPROVED THE MERGER OF ITS TWO SHARE CLASSES. The single class of ordinary shares began trading on June 18. This move to a one-share, one-vote standard puts SAP more closely in line with international corporate governance practice and capital market expectations. CONFERENCE CALL/WEBCAST/SUPPORTING SLIDES SAP senior management will host a press conference in New York today at 3:00 PM (CET) / 2:00 PM (GMT) / 9:00 AM (Eastern) / 6:00 AM (Pacific), followed by an investor conference at 6:00 PM (CET) / 5:00 PM (GMT) / 12:00 PM (Eastern) / 9:00 AM (Pacific). Both conferences 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 and are also available on the SAP website. 4 - 4 - REVENUE BY REGION (IN E MILLIONS)
REVENUE REVENUE 2Q 2001 2Q 2000 CHANGE % CHANGE ------- ------- ------ -------- Total 1,853 1,498 355 24 ------- ------- ------ -------- - at constant currency rates 22 EMEA 962 708 254 36 - at constant currency rates 36 Asia Pacific 220 192 28 15 - at constant currency rates 20 Americas 671 598 73 12 - at constant currency rates 6
KEY FIGURES AT A GLANCE (IN E MILLIONS) SAP GROUP
2Q 2001 2Q 2000 CHANGE % CHANGE ------- ------- ------ -------- Revenues 1,853 1,498 355 24 License revenues 646 554 92 17 Income before taxes 354 193 161 83 Net income 206 116 90 78 ------- ------- ------ -------- Headcount (June 30) 26,774 22,736 4,038 18
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 2000 filed with the SEC on March 28, 2001. 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 as well as a number of other exchanges. In the US, SAP's American Depositary Receipts (ADRs), each worth one-fourth of a ordinary 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 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 5 - 5 - CONSOLIDATED INCOME STATEMENTS -- 2ND QUARTER SAP Group (in E millions)
2001 2000 (DELTA) ----- ----- ------- Software revenue 646 554 17% Maintenance revenue 515 396 30% Product revenue 1,161 950 22% Consulting revenue 529 393 35% Training revenue 127 100 27% Service revenue 656 493 33% Other revenue 36 55 -35% ----- ----- ---- TOTAL REVENUE 1,853 1,498 24% ===== ===== ==== Cost of product -189 -160 18% Cost of service -468 -422 11% Research and development -230 -231 0% Sales and marketing -480 -434 11% General and administration -96 -102 -6% Other income/expenses, net -17 2 -950% ----- ----- ---- TOTAL OPERATING EXPENSE -1,480 -1,347 10% ===== ===== ==== OPERATING INCOME 373 151 147% ----- ----- ---- Other non-operating income/ expenses, net -34 -11 209% Financial income, net 15(1) 53 -72% ----- ----- ---- INCOME BEFORE INCOME TAXES 354 193 83% ----- ----- ---- Income taxes -145 -77 88% Minority interest -3 0 n/a ----- ----- ---- NET INCOME 206 116 78% ----- ----- ---- BASIC EARNINGS PER SHARE (IN E) 0.65 0.37 76% ----- ----- ----
6 - 6 - CONSOLIDATED INCOME STATEMENTS -- 2ND QUARTER SAP Group (in E millions) Additional Information
2001 2000 (DELTA) ---- ---- ------- Operating Income 373 151 147% Depreciation & Amortization 71 55 29% In-Process R&D 6 0 n/a ---- ---- ---- EBITDA 450 206 118% AS A % OF SALES 24% 14% ---- ---- Operating Income 373 151 147% Total Stock Based Compensation 31 95 -67% TopTier Acquisition costs 20 0 n/a ---- ---- ---- OPERATING INCOME EXCLUDING STOCK BASED COMPENSATION AND TOPTIER ACQUISITION COSTS 424 246 72% AS A % OF SALES 23% 16% ---- ---- ---- INCOME BEFORE INCOME TAXES 354 193 83% ---- ---- ---- Income taxes 145 77 88% ---- ---- ---- EFFECTIVE TAX RATE 41% 40% ---- ---- EPS EXCLUDING TOPTIER ACQUISITION COST 0.71 0.37 92% ---- ---- ----
7 - 7 - CONSOLIDATED INCOME STATEMENTS -- 1ST HALF SAP Group (in E millions)
2001 2000 (DELTA) ----- ------ ------- Software revenue 1,104 923 20% Maintenance revenue 1,000 769 30% Product revenue 2,104 1,692 24% Consulting revenue 987 725 36% Training revenue 236 195 21% Service revenue 1,223 920 33% Other revenue 50 69 -28% ----- ------ ------- TOTAL REVENUE 3,377 2,681 26% ===== ====== ======= Cost of product -386 -313 23% Cost of service -924 -850 9% Research and development -436 -486 -10% Sales and marketing -845 -770 10% General and administration -182 -217 -16% Other income/expenses, net -25 -5 400% ----- ------ ------- TOTAL OPERATING EXPENSE -2,798 -2,641 6% ===== ====== ======= OPERATING INCOME 579 40 1348% ----- ------ ------- Other non-operating income/ expenses, net -29 -43 -33% Financial income, net -2(1) 291 -101% ----- ------ ------- INCOME BEFORE INCOME TAXES 548 288 90% ===== ====== ======= Income taxes -219 -115 90% Minority interest -6 -1 n/a ----- ------ ------- NET INCOME 323 172 88% ----- ------ ------- BASIC EARNINGS PER SHARE (IN E) 1.03 0.55 87% ----- ------ -------
8 - 8 - CONSOLIDATED INCOME STATEMENTS -- 1ST HALF SAP Group (in E millions) Additional Information
2001 2000 (DELTA) ---- ---- ------- Operating Income 579 40 1348% Depreciation & Amortization 124 104 19% In-Process R&D 6 0 n/a ---- ---- ----- EBITDA 709 144 392% AS A % OF SALES 21% 5% ---- ---- ----- Operating Income 579 40 1348% Total Stock Based Compensation 58 334 -83% TopTier acquisition costs 20 0 n/a ---- ---- ----- OPERATING INCOME EXCLUDING STOCK BASED COMPENSATION AND TOPTIER ACQUISITION COSTS 657 374 76% AS A % OF SALES 19% 14% ---- ---- ----- INCOME BEFORE INCOME TAXES 548 288 90% ---- ---- ----- Income taxes 219 115 90% ---- ---- ----- EFFECTIVE TAX RATE 40% 40% ---- ---- ----- EPS EXCLUDING TOPTIER ACQUISITION COST 1.08 0.55 96% ---- ---- -----
9 - 9 - CONSOLIDATED BALANCE SHEET SAP Group (in E millions) ASSETS
06/30/2001 12/31/2000 ---------- ---------- INTANGIBLE ASSETS 519 116 PROPERTY, PLANT AND EQUIPMENT 962 871 FINANCIAL ASSETS 406(1) 604 ----- ----- FIXED ASSETS 1,887 1,591 INVENTORIES/ACCOUNTS RECEIVABLES 2,267 2,393 LIQUID ASSETS/MARKETABLE SECURITIES 1,145 1,182 ----- ----- CURRENT ASSETS 3,412 3,575 DEFERRED TAXES 289 305 PREPAID EXPENSES 244 115 ----- ----- TOTAL ASSETS 5,832 5,586 ===== =====
SHAREHOLDERS' EQUITY AND LIABILITIES
06/30/2001 12/31/2000 ---------- ---------- SHAREHOLDERS' EQUITY 2,647 2,894(2) MINORITY INTEREST 63 61 RESERVES AND ACCRUED LIABILITIES 1,140 1,435 OTHER LIABILITIES 1,121 831 DEFERRED INCOME 861 365 ----- ----- TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 5,832 5,586 ===== ===== DAYS SALES OUTSTANDING 94 93
(1) As a result of SAP's additional investment in Commerce One, Inc., SAP will be required to use the equity method of accounting to record, in finance income, a portion of Commerce One's net income or loss based upon SAP's investment percentage. Under U.S. GAAP, the equity method must also be applied retroactively. Accordingly, SAP anticipates including restated first and second quarter 2001 finance income figures in the third quarter press release. Finance income will be restated to include approximately 2.6% and 4.4% of Commerce One's first and second quarter loss, respectively. (2) includes temporary equity of E 409.5 million