SAP Reports 2003 Second Quarter and Six Months Results

Second Quarter Operating Income Increased 6% to euro 340 Million Company Gains Additional Market Share

NEW YORK and WALLDORF, Germany, July 17 /PRNewswire-FirstCall/ -- SAP AG today announced its preliminary financial results for the second quarter and six months ended June 30, 2003.

  (Logo:  http://www.newscom.com/cgi-bin/prnh/20020923/SFM002LOGO )

  Operational Performance

For the second quarter of 2003, operating income increased 6% to euro 340 million (2002: euro 320 million). Pro forma operating income(1), excluding stock-based compensation and acquisition-related charges, increased 20% to euro 388 million (2002: euro 324 million). The operating margin for the second quarter of 2003 was up three percentage points to 21% compared to the second quarter of last year. The pro forma operating margin(1), before stock-based compensation and acquisition related charges, was up six percentage points to 24% compared to same period last year.

Software revenues for the 2003 second quarter were euro 431 million (2002: euro 496 million), down 13% from the second quarter of last year. On a constant currency basis, software revenues were down 5% compared to last year.

Based on software revenues, the Company believed it continued to gain additional market share in the second quarter of 2003. On a rolling four quarter basis, the Company's worldwide share of the market (consisting of SAP and the five companies mentioned in footnote 2) based on software revenues was 55% at the end of the second quarter of 2003 compared to 54% at the end of the first quarter of 2003 and 45% at the end of the second quarter of 2002.

Total revenues for the second quarter of 2003 were down 8% to euro 1.6 billion (2002: euro 1.8 billion). At constant currency rates, however, total revenues for the 2003 second quarter increased by 2% compared to the second quarter of 2002. Product revenues, which include software and maintenance revenues, for the second quarter were euro 1.1 billion (2002: euro 1.1 billion). Maintenance revenues were euro 633 million (2002: euro 595 million). Consulting and training revenues were euro 479 million (2002: euro 545 million) and euro 75 million (2002: euro 115 million), respectively.

Net income for the second quarter of 2003 was euro 219 million (2002: euro -232 million), or euro 0.71 per share (2002: euro -0.74 per share). The second quarter 2002 net income included impairment charges related to the Commerce One write down of euro 297 million. Excluding stock-based compensation, acquisition-related charges and impairment-related charges, pro forma net income(1) for the second quarter of 2003 was euro 251 million (2002: euro 155 million), or euro 0.81 per share (2002: euro 0.49 per share), representing an increase of 62%.

The Company had 28,961 full-time equivalent employees at June 30, 2003. This represents an increase of 307 full-time employees since March 31, 2003.

Regional Performance

For the second quarter of 2003, revenues in the Europe, Middle East and Africa (EMEA) region decreased 3% to euro 942 million (2002: euro 976 million). Revenues in Germany decreased 1%. Second quarter 2003 revenues in the Americas region were down 15% to euro 506 million (2002: euro 593 million). More importantly, however, at constant currency rates, revenues in the Americas were up 6%. The Company continued to outperform its U.S. based competitors, as it believed it continued to gain market share in this region. Moreover, the Company also believed that in the second quarter it remained the number one business software application vendor in the U.S. based on software revenues.(3) Revenues in the Asia-Pacific region (APA) for the second quarter of 2003 decreased 9% to euro 190 million (2002: euro 209 million). At constant currency rates, however, APA revenues increased 5%.

"The business environment remains tough, but we executed better than most of our competitors and, more importantly, we once again achieved our goals of improved operating margins and continued market share gains," said Henning Kagermann, chief executive officer, SAP AG. "We remain focused on investing in product innovation and on continually evolving our business to meet the requirements of a changing industry environment."

Software Revenue by Solution

For the second quarter of 2003, software revenues related to mySAP CRM (Customer Relationship Management) reached approximately euro 85 million, down 16% from the same period last year (euro 101 million) and represented 20% of total software revenues. mySAP SCM (Supply Chain Management) related second quarter 2003 software revenues totaled approximately euro 86 million, down 17% from the second quarter of 2002 (euro 104 million) and represented 19% of total software revenues. These figures include revenues from designated solution contracts, as well as figures from integrated solution contracts, which are allocated based on usage surveys.

Six Months Results

For the six months ended June 30, 2003, total revenues decreased 8% to euro 3.2 billion (2002: euro 3.4 billion). On a constant currency basis, total revenues for the first six months increased 1% compared to the same period last year.

For the first six months of 2003, operating income increased 26% to euro 638 million (2002: euro 506 million). Pro forma operating income,(1) excluding stock-based compensation and acquisition-related charges, for the 2003 six month period increased 23% to euro 692 million (2002: euro 562 million).

For the first half of 2003, software revenues decreased 13% to euro 783 million (2002: euro 898 million). On a constant currency basis, software revenues for the first six months decreased 5% compared to the same period last year. Consulting revenues for the 2003 six month period were euro 955 million (2002: euro 1.1 billion) and training revenues were euro 152 million (2002: euro 225 million).

In the first half of 2003, sales in the EMEA region decreased 4% to euro 1.8 billion (2002: euro 1.9 billion). Sales in the Americas declined 17% to euro 974 million (2002: euro 1.2 billion) and in the APA region revenues were down 2% to euro 388 million (2002: euro 394 million).

In the first half of 2003, the Company generated euro 717 million of free cash flow(1) (defined as operating cash flow less capital expenditures, which were euro 90 million for the first half of 2003), and at June 30, 2003, the Company had euro 1.8 billion of liquid assets.

Outlook

SAP continues to expect pro forma earnings per share(1) for 2003, excluding stock-based compensation, acquisition-related charges and impairment-related charges, to be in the range of euro 3.45 per share to euro 3.60 per share. The Company has slightly increased its target for pro forma operating margin(1), excluding stock-based compensation and acquisition-related charges. Previously, the Company expected its 2003 pro forma operating margin(1) to increase by around 1 percentage point compared to 2002. The Company now expects its 2003 pro forma operating margin1 to be between 1 and 1.5 percentage points higher than the level achieved in 2002. While the Company continued to not provide revenue expectations, it expects to achieve its pro forma operating margin(1) and pro forma earnings per share(1) targets through continued market share gains and cost containment amid the current business environment and business seasonality in line with historical patterns.

  Second Quarter Highlights
  * SAP continues to gain market share in the business applications market.
    Key contracts in the second quarter include Coca-Cola Enterprises,
    Fender, Sony Pictures, and University of Cincinnati in the Americas
    region, European Central Bank, Ferrero, Telecom Italia and Vattenfall in
    the EMEA region and Dentsu Information Services, Sharp, Shougang und
    Toyota Tsusho in the Asia/Pacific region.

  * SAP hosted its annual SAPPHIRE customer conference in Orlando, FL,
    attracting more than 7,000 attendees. SAP highlighted the continued
    momentum and value of SAP NetWeaver and announced several key
    partnerships dedicated to develop and deliver solutions for the SMB
    market with IBM and BearingPoint. In addition, the Company announced the
    first vertical solution developed by American Express based on SAP
    Business One for wholesale distribution.

  * Also featured at SAPPHIRE Orlando was the latest release of mySAP CRM,
    delivering the most comprehensive solution on the market with a powerful
    set of industry-specific end-to-end processes adapted for unique
    industry environments.  Also announced was the latest release of mySAP
    SCM, which provides customers in the discrete, process manufacturing,
       and  consumer  products  industries  with  more  than  twenty  new  processes  and
        more  than  thirty  process  enhancements  to  help  them  build  their  adaptive
        supply  chain  networks.

    *  SAP  launched  the  SAP  Customer  Services  Network.    The  initiative  offers
        easy  and  more  coordinated  access  to  the  comprehensive  scope  of  SAP
        services  including  new  offerings  such  as  services  for  increasing  the
        quality  in  upgrades  and  risk  management,  business  and  benefit  mapping,
        consulting,  custom  development  and  global  customer  competence  center
        programs.

    *  SAP  held  its  Annual  General  Meeting  in  May.    All  items  proposed  by  the
        Supervisory  Board  and  Executive  Board  were  approved  at  the  meeting  by
        more  than  99  percent  of  the  represented  voting  capital.    Hasso  Plattner,
        former  Co-Chairman  and  CEO  of  the  SAP  Executive  Board,  was  elected  as  a
        member  of  the  Supervisory  Board  and  then  elected  Chairman  by  that  Board.
        A  dividend  in  the  amount  of  euro  0.60  per  non-par  value  share  was  paid
        to  SAP  shareholders.

    Conference  Call  /  Webcast
 


1 | 2 | 3  Next Page »



Review Article Be the first to review this article

Featured Video
Editorial
Jeff RoweJeff's MCAD Blogging
by Jeff Rowe
Siemens Goes ECAD With Mentor Graphics Acquisition
Jobs
Mechanical Engineer for IDEX Corporation at West Jordan,, UT
Business Partner Manager for Cityworks - Azteca Systems, LLC at Sandy, UT
GIS Analyst II for Air Worldwide at Boston, MA
Senior Structural Engineer for Design Everest at San Francisco, CA
Upcoming Events
Design & Manufacturing, Feb 7 - 9, 2017 Anaheim Convention Center, Anaheim, CA at Anaheim Convention Center Anaheim CA - Feb 7 - 9, 2017
Innorobo 2017 at Docks de Paris Paris France - May 16 - 18, 2017
Display Week 2017 at Los Angeles Convention Center 1201 S Figueroa St Los Angeles CA - May 21 - 26, 2017
SolidCAM: Program your CNCs directly inside your existing CAD system.



Internet Business Systems © 2016 Internet Business Systems, Inc.
595 Millich Dr., Suite 216, Campbell, CA 95008
+1 (408)-337-6870 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering EDACafe - Electronic Design Automation GISCafe - Geographical Information Services TechJobsCafe - Technical Jobs and Resumes ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy Policy Advertise