SAP Reports 18% Software Revenue Growth For 2005

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    Consolidated Income Statements
    SAP-Group    4th quarter

    PRELIMINARY and UNAUDITED

    (in EUR millions)

                                       2005            2004         delta

      Software revenue                1,183           1,003           18%
      Maintenance revenue               855             739           16%
     Product revenue                  2,038           1,742           17%
      Consulting revenue                605             560            8%
      Training revenue                   96              79           22%
     Service revenue                    701             639           10%
     Other revenue                       15              20          -25%
    Total revenue                     2,754           2,401           15%

      Cost of product                  -274            -230           19%
      Cost of service                  -539            -510            6%
      Research and development         -328            -288           14%
      Sales and marketing              -508            -443           15%
      General and administration       -126            -101           25%
      Other income/expenses, net          1               4          -75%
    Total operating expense          -1,774          -1,568           13%

    Operating income                    980             833           18%

    Other non-operating income/
    expenses, net                       -25              15           N/A
    Financial income, net                 8               5           60%
    Income before income taxes          963             853           13%

    Income taxes                       -343            -310           11%
    Minority interest                    -1              -1            0%
    Net income                          619             542           14%

    Basic earnings per share (in euro) 2.00            1.74           14%



    Consolidated Income Statements
    SAP-Group    4th quarter

    PRELIMINARY and UNAUDITED

    additional information
    (in EUR millions)

                                       2005            2004         delta

    Pro-forma EBITDA reconciliation:

    Net income                          619             542              14%

        Minority  interest                                          1                              1                        0%
        Income  taxes                                                343                          310                      11%

        Net  income  before  income  taxes            963                          853                      13%
        Financial  income,  net                                -8                            -5                      60%
        Other  non-operating  income/expenses,
          net                                                                  25                          -15                      N/A

        Operating  Income                                        980                          833                      18%
        Depreciation  and  amortization                49                            57                    -14%
        Pro-forma  EBITDA  (4)(6)                      1,029                          890                      16%
          as  a  %  of  Sales                                        37%                          37%

        Pro-forma  operating  income
          reconciliation:

        Operating  Income                                        980                          833                      18%
        LTI/STAR/SOP                                                  22                              9                      N/A
        Settlement  of  stock-based
          compensation  programs                                0                              0                      N/A

        Total  stock-based  compensation              22                              9                      N/A
        Acquisition-related  charges                    11                              9                      22%

        Pro-forma  operating  income  excluding
          stock-based  compensation  and
          acquisition-related  charges  (4)    1,013                          851                      19%



        Consolidated  Income  Statements
        SAP-Group        4th  quarter

        PRELIMINARY  and  UNAUDITED

        additional  information
        (in  EUR  millions)

                                                                              2005                        2004                  delta

        Financial  income,  net                                  8                              5                      60%
        -  thereof  impairment-related  charges  -1                            -2                    -50%

        Income  before  income  taxes                    963                          853                      13%
        Income  taxes                                                343                          310                      11%
        Effective  Tax  Rate                                    36%                          36%

        Pro-forma  Net  income  reconciliation:

        Net  income                                                    619                          542                      14%
        Stock-based  compensation,
          net  of  tax                                                    15                              5                    200%
        Acquisition-related  charges,
          net  of  tax                                                      7                              5                      40%
        Impairment-related  charges,
          net  of  tax                                                      1                              2                    -50%
        Pro-forma  net  income  excluding
          stock-based  compensation,
          acquisition-related  charges,
          and  impairment-related  charges  (4)  642                          554                      16%

        Pro-forma  EPS  reconciliation:

        Earnings  per  share  (in  euro)              2.00                        1.74                      14%
        Stock-based  compensation                      0,05                        0.02                      N/A
        Acquisition-related  charges                0,02                        0.02                      N/A
        Impairment-related  charges                  0,00                        0.00                      N/A
        Pro-forma  EPS  excluding
          stock-based  compensation,
          acquisition-related
          charges  and  impairment-related
          charges  (in  euro)  (4)                          2.07                        1.78                      16%
        Weighted  average  number  of  shares
        (in  thousands)                                    309,779                  310,639



        Consolidated  Income  Statements
        SAP-Group  Twelve  months  ended  December  31,

        PRELIMINARY  and  UNAUDITED

        (in  EUR  millions)

                                                                              2005                        2004                  delta

            Software  revenue                                2,783                      2,361                      18%
            Maintenance  revenue                          3,175                      2,823                      12%
          Product  revenue                                    5,958                      5,184                      15%
            Consulting  revenue                            2,139                      1,971                        9%
            Training  revenue                                    343                          302                      14%
          Service  revenue                                    2,482                      2,273                        9%
          Other  revenue                                              73                            57                      28%
        Total  revenue                                          8,513                      7,514                      13%

            Cost  of  product                                    -910                        -804                      13%
            Cost  of  service                                -1,925                    -1,784                        8%
            Research  and  development              -1,172                    -1,020                      15%
            Sales  and  marketing                        -1,747                    -1,524                      15%
            General  and  administration              -434                        -366                      19%
            Other  income/expenses,  net                    6                              2                    200%
        Total  operating  expense                    -6,182                    -5,496                      12%

        Operating  income                                    2,331                      2,018                      16%

        Other  non-operating  income/
        expenses,  net                                              -25                            14                      N/A
        Financial  income,  net                                11                            41                      N/A
        Income  before  income  taxes                2,317                      2,073                      12%

        Income  taxes                                              -818                        -757                        8%
        Minority  interest                                        -3                            -5                    -40%
        Net  income                                                1,496                      1,311                      14%

        Basic  earnings  per  share  (in  euro)  4.83                        4.22                      14%



        Consolidated  Income  Statements
        SAP-Group  Twelve  months  ended  December  31,

        PRELIMINARY  and  UNAUDITED

        additional  information
        (in  EUR  millions)

                                                                              2005                        2004                  delta

        Pro-forma  EBITDA  reconciliation:

        Net  income                                                1,496                      1,311                      14%

        Minority  interest                                          3                              5                    -40%
        Income  taxes                                                818                          757                        8%

        Net  income  before  income  taxes        2,317                      2,073                      12%
        Financial  income,  net                              -11                          -41                    -73%
        Other  non-operating  income/expenses,
          net                                                                  25                          -14                      N/A

        Operating  Income                                    2,331                      2,018                      16%
        Depreciation  and  amortization              204                          210                      -3%
        Pro-forma  EBITDA  (4)(6)                      2,535                      2,228                      14%
          as  a  %  of  Sales                                        30%                          30%

        Pro-forma  operating  income
          reconciliation:

        Operating  Income                                    2,331                      2,018                      16%
        LTI/STAR/SOP                                                  45                            37                      22%
        Settlement  of  stock-based
          compensation  programs                                0                              1                      N/A

        Total  stock-based  compensation              45                            38                      18%
        Acquisition-related  charges                    34                            30                      13%

        Pro-forma  operating  income  excluding
          stock-based  compensation  and
          acquisition-related  charges  (4)    2,410                      2,086                      16%



        Consolidated  Income  Statements
        SAP-Group  Twelve  months  ended  December  31,

        PRELIMINARY  and  UNAUDITED

        additional  information
        (in  EUR  millions)

                                                                              2005                        2004                  delta

        Financial  income,  net                                11                            41                    -73%
        -  thereof  impairment-related  charges  -4                            -5                    -20%

        Income  before  income  taxes                2,317                      2,073                      12%
        Income  taxes                                                818                          757                        8%
        Effective  Tax  Rate                                    35%                          37%

        Pro-forma  Net  income  reconciliation:

        Net  income                                                1,496                      1,311                      14%
        Stock-based  compensation,
          net  of  tax                                                    31                            24                      29%
        Acquisition-related  charges,
          net  of  tax                                                    21                            18                      17%
        Impairment-related  charges,
          net  of  tax                                                      4                              5                    -20%
        Pro-forma  net  income  excluding
        stock-based  compensation,
        acquisition-related  charges,
        and  impairment-related  charges(4)  1,552                      1,358                      14%

        Pro-forma  EPS  reconciliation:

        Earnings  per  share  (in  euro)              4.83                        4.22                      14%
        Stock-based  compensation                      0.10                        0.08                      N/A
        Acquisition-related  charges                0.07                        0.06                      N/A
        Impairment-related  charges                  0.01                        0.01                      N/A
        Pro-forma  EPS  excluding
          stock-based  compensation,
          acquisition-related  charges
          and  impairment-related  charges
          (in  euro)  (4)                                          5.01                        4.37                      14%
        Weighted  average  number  of  shares
        (in  thousands)                                    309,816                  310,802



        Consolidated  Balance  Sheets
        SAP  Group

        PRELIMINARY  and  UNAUDITED
        (in  EUR  millions)
        ASSETS
                                                          12/31/2005      12/31/2004                delta                delta
        Intangible  assets                              766                    525                    241                    46%
        Property,  plant  and  equipment  1,095                    999                      96                    10%
        Financial  assets                                534                    100                    434                  434%
        FIXED  ASSETS                                    2,395                1,624                    771                    47%

        Accounts  receivables                    2,250                1,929                    321                    17%
        Inventories  and  other  assets        673                    549                    124                    23%
        Liquid  assets/Marketable
          securities                                      3,423                3,207                    216                      7%
        CURRENT  ASSETS                                6,346                5,685                    661                    12%

        DEFERRED  TAXES                                    217                    206                      11                      5%

        PREPAID  EXPENSES                                  87                      70                      17                    24%

        TOTAL  ASSETS                                    9,045                7,585                1,460                    19%

        SHAREHOLDERS'  EQUITY  AND
          LIABILITIES
                                                          12/31/2005      12/31/2004                delta                delta

        SHAREHOLDERS'  EQUITY                    5,783                4,594                1,189                    26%

        MINORITY  INTEREST                                  8                      22                    -14                  -64%

        RESERVES  AND  ACCRUED
          LIABILITIES                                    2,004                1,908                      96                      5%

        OTHER  LIABILITIES                              846                    736                    110                    15%

        DEFERRED  INCOME                                  404                    325                      79                    24%

        TOTAL  SHAREHOLDERS'  EQUITY  AND
          LIABILITIES                                    9,045                7,585                1,460                    19%
        Days  Sales  Outstanding                      68                      71


        Consolidated  Statements  of  Cash  Flows
        SAP  Group

        (unaudited)

        Twelve  months  ended  December  31,
        (in  EUR  millions)
                                                                                                                2005                      2004
        Net  income                                                                                  1,496                    1,310
        Minority  interest                                                                            3                            5
        Income  before  minority  interest                                        1,499                    1,315
        Depreciation  and  amortization                                                204                        210
        Gains/Losses  on  disposal  of  property,
          plant  and  equipment  and  marketable
          equity  securities,  net                                                              -6                        -13
        Gains  from  equity  investments,  net                                        -1                            0
        Write-downs  of  financial  assets,  net                                    13                          18
        Impacts  of  hedging                                                                          7                          -7
        Change  in  accounts  receivables  and  other  assets          -380                      -165
        Change  in  deferred  stock  compensation                                -36                            0
        Change  in  reserves  and  liabilities                                      191                        435
        Change  in  deferred  taxes                                                          -39                          18
        Change  in  other  current  assets                                              -23                          -4
        Change  in  deferred  income                                                          77                          20
        Net  cash  provided  by  operating  activities                    1,506                    1,827
        Acquisition  of  minorities  in  subsidiaries                        -60                      -168
        Other  acquisitions,  net  of  cash  and  cash
          equivalents                                                                                -182                        -19
        Purchase  of  intangible  assets  and  property,
          plant  and  equipment                                                                -266                      -193
        Purchase  of  financial  assets                                                -458                        -43
        Proceeds  from  disposal  of  fixed  assets                                31                        117
        Change  in  liquid  assets
          (maturities  greater  than  90  days)
          and  marketable  securities                                                      573                      -581
        Net  cash  used  in  investing  activities                              -362                      -887
        Dividends  paid                                                                            -340                      -249
        Change  in  treasury  stock                                                        -206                      -108
        Proceeds  from  issuance  of  common  stock
          (Stock-based  compensation)                                                      43                          19
        Other  changes  to  additional  paid-in-capital                      44                            5
        Principal  payments  made  on/Proceeds  from
          line  of  credit  and  long-term  debt                                        -1                            4
        Proceeds  from  acquired  derivative  equity  instruments
          (STAR-hedge)                                                                                  39                            0
        Acquisition  of  derivative  equity  instruments
          (STAR-hedge)                                                                                -47                        -43
        Net  cash  used  in  financing  activities                              -468                      -372
        Effect  of  foreign  exchange  rates  on  cash                          114                        -39
        Net  change  in  cash  and  cash  equivalents                            790                        529
        Cash  and  cash  equivalents  at  the  beginning
          of  the  period                                                                          1,513                        984
        Cash  and  cash  equivalents  at  the  end
          of  the  period                                                                          2,303                    1,513



        Full  Year  2005  Free  Cash  Flow  (in  euro  millions,  unaudited)
        SAP  Group

                                                                        FY  2005                  FY  2004            %  Change
        Operating  Cash  Flow                              1,506                      1,827                      -18
            Capital  Expenditure                            -261                        -189                      +38
        Free  Cash  Flow(4)(6)                            1,245                      1,638                      -24
        Free  Cash  Flow                                            15%                          22%                  -7  PP
          as  a  %  of  Revenue
        Total  Revenue                                          8,513                      7,514                      +13


        Footnotes

        1)  Constant  currency  data  excludes  the  impact  of  currency  exchange  rates.

        2)  Worldwide  share  of  what  SAP  considers  to  be  its  peer  group  of  Microsoft
              Corp.  (business  solutions  segment  only),  Oracle  Corp.  (business
              applications  only)  and  Siebel  Systems,  Inc.  is  based  on  comparable
              software  revenues  in  U.S.  dollars  (for  those  vendors  that  did  not  yet
              announce  or  pre-announce  software  revenues,  analyst  estimates  were
              used).    SAP's  results  have  been  converted  into  U.S.  dollars.    For
              Oracle  Corp.  (business  applications  only),  the  software  revenues  of
              Oracle,  PeopleSoft  and  Retek  were  combined  based  on  publicly  available
              data.    Subsequent  revisions  of  peer  group  data  will  often  occur  as  a
              result  of  using  estimated  data  at  the  time  the  peer  group  share  is
              originally  calculated  because  actual  data  is  often  not  yet  available.

        3)  U.S.  share  of  what  SAP  considers  to  be  its  peer  group  of  Microsoft
              Corp.  (business  solutions  segment  only),  Oracle  Corp.  (business
              applications  only),  and  Siebel  Systems,  Inc.  is  based  on  comparable
              U.S.  software  revenues  in  U.S.  dollars  (for  those  vendors  that  did  not
              yet  announce  or  pre-announce  software  revenues,  analyst  estimates  were
              used,  and  for  some  vendors  U.S.  software  revenues  are  estimated).
              SAP's  results  have  been  converted  into  U.S.  dollars.    For  Oracle  Corp.
              (business  applications  only),  the  software  revenues  of  Oracle,
              PeopleSoft  and  Retek  were  combined  based  on  publicly  available  data.
              Subsequent  revisions  of  peer  group  data  will  often  occur  as  a  result  of
              using  estimated  data  at  the  time  the  peer  group  share  is  originally
              calculated  because  actual  data  is  often  not  yet  available.

        4)  Non-GAAP  Measures:
              This  press  release  discloses  certain  financial  measures  such  as  pro
              forma  EBITDA,  free  cash  flow,  pro  forma  operating  income,  pro  forma
              expenses,  pro  forma  net  income,  pro  forma  earnings  per  share  (EPS)  and
              currency-adjusted  year-on-year  changes  in  revenue  and  operating  income.
              These  measures  are  not  prepared  in  accordance  with  generally  accepted
              accounting  principles  and  are,  therefore,  considered  non-GAAP  financial
              measures.  The  non-GAAP  measures  should  be  considered  in  addition  to,
              and  not  as  a  substitute  for,  or  superior  to,  operating  income,  cash
              flows,  or  other  measures  of  financial  performance  prepared  in
              accordance  with  generally  accepted  accounting  principles.  The  pro  forma
              measures  used  by  SAP  may  be  different  from  pro  forma  measures  used  by
              other  companies.

              Management  believes  that  pro  forma  operating  income,  pro  forma
              expenses,  pro  forma  net  income  and  pro  forma  EPS  provide  supplemental
              meaningful  information  to  the  investor  to  fully  assess  the  financial
              performance  of  SAP's  core  operations.  The  pro  forma  operating  measures
              disclosed  are  the  same  SAP  uses  in  its  internal  management  reporting
              and  as  criteria  for  variable  elements  of  management  compensation.

              Eliminated  expenses  in  pro  forma  expenses,  pro  forma  operating  income,
              pro  forma  net  income  and  pro  forma  EPS  are  defined  as  follows:

                  -  Stock-based  compensation  includes  expenses  for  stock-based
                      compensation  as  defined  under  U.S.  GAAP  (STAR,  LTI  and  SOP)  as  well
                      as  expenses  related  to  the  settlement  of  stock-based  compensation
                      plans  in  the  context  of  mergers  and  acquisitions.  Management
                      excludes  stock-based  compensation  expenses  because  SAP  has  no
                      direct  influence  over  the  actual  expense  of  these  awards  once  the
                      Company  enters  into  stock-based  compensation  plans.

                  -  Acquisition-related  charges  include  amortization  of  intangible
                      assets  acquired  in  acquisitions  of  businesses  or  intellectual
                      property.

                  -  Impairment-related  charges  include  other-than-temporary  impairment
                      charges  on  minority  equity  investments.

              Please  note:  In  the  second  quarter  of  2005,  SAP  changed  its  definition
              of  "acquisition-related  charges"  which  is  used  to  determine  SAP's  pro
              forma  operating  income,  pro  forma  earnings  per  share  and  other  pro
              forma  information  provided  by  SAP.    In  the  past,  SAP  regarded
              amortization  of  intangibles  only  as  acquisition-related  charges  if  the
              intangibles  were  acquired  as  part  of  an  acquisition  of  an  entire
              business.    In  the  future,  SAP  expects  to  conduct  acquisitions  more
              frequently  by  acquiring  from  the  target  only  the  intellectual  property
              rights  and  other  related  intangibles  instead  of  acquiring  the  target's
              entire  business.    Therefore,  beginning  in  the  second  quarter  of  2005,
              SAP  will  also  regard  as  acquisition-related  charges  the  amortization  of
              intellectual  property  rights,  patents  etc.  that  were  acquired
              individually,  i.e.  not  as  part  of  a  business  combination.  This  change
              in  definition  has  no  material  impact  on  any  pro  forma  information
              provided  in  the  past,  as  SAP  has  so  far  not  conducted  any  material
              acquisitions  of  intangibles  outside  of  business  combinations.

        5)  These  figures  include  revenues  from  designated  solution  contracts,  as
              well  as  figures  from  integrated  solution  contracts,  which  are  allocated
              based  on  usage  surveys  provided  by  SAP's  customers.    SAP's  solution
              reporting  includes  the  following  specific  software  solutions:  ERP
              (Enterprise  Resource  Planning),  SCM  (Supply  Chain  Management),  CRM
              (Customer  Relationship  Management),  SRM  (Supplier  Relationship
              Management),  PLM  (Product  Lifecycle  Management)  and  SAP  NetWeaver  and
              other  related  products.

        6)  Management  believes  that  pro  forma  EBITDA  and  free  cash  flow  are  widely
              accepted  supplemental  measures  of  evaluating  operating  performance  and
              liquidity  among  companies.  However  these  measures  should  be  considered
              in  addition  to,  and  not  as  a  substitute  for,  or  superior  to,  operating
              income,  cash  flows,  or  other  measures  of  financial  performance  prepared
              in  accordance  with  generally  accepted  accounting  principles.

 


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