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SAP Reports Strong Growth in Software and Software Related Service Revenues

WALLDORF, Germany, April 30 /PRNewswire-FirstCall/ -- SAP AG (NYSE: SAP) today announced its preliminary financial results for the first quarter ended April 30, 2008. Business Objects is included in these results from January 21, 2008 onwards. SAP - First Quarter 2008* U.S. GAAP Non-GAAP** %change in euro % % constant million Q1/2008 Q1/2007 change Q1/2008 Q1/2007 change currency*** Software revenues 622 562 11 622 562 11 18 Software and 1,736 1,515 15 1,783 1,515 18 24 software- related service revenues Total revenues 2,460 2,162 14 2,507 2,162 16 22 Operating income 359 436 -18 489 447 9 20 Operating margin(%) 14.6 20.2 -5.6pp 19.5 20.7 -1.2pp -0.5pp Income from 247 312 -21 345 319 8 _ continuing operations Net income 242 310 -22 340 317 7 _ Basic EPS from 0.21 0.26 -19 0.29 0.26 12 _ cont. operations(euro) * All figures are preliminary and unaudited and are based on the current status of the purchase price allocation for the Business Objects acquisition which is not yet final. ** Revenue line items are adjusted for the Business Objects support revenue that Business Objects would have recognized had it remained a standalone entity but that SAP is not permitted to recognize as revenue under U.S. GAAP as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition related charges. See Appendix at the end of the financial section of the press release for explanations of the Non-GAAP measures used in this press release and for related reconciliations to U.S. GAAP. *** Constant currency Non-GAAP revenue and operating income figures are calculated by translating Non-GAAP revenue and Non-GAAP operating income of the current period using the average exchange rates from the previous year's respective period instead of the current period. Constant currency period-over-period changes are calculated by comparing the current year's Non-GAAP constant currency numbers with the Non-GAAP number of the previous year's respective period. See Appendix at the end of the financial section of press release for details. HIGHLIGHTS - First Quarter 2008 Revenues -- First quarter 2008 U.S. GAAP software and software related service revenues were euro 1.74 billion (2007: euro 1.52 billion), representing an increase of 15% compared to the first quarter of 2007. Non-GAAP software and software related service revenues, which excludes a non recurring deferred support revenue write-down from the acquisition of Business Objects of euro 47 million, for the first quarter of 2008 were euro 1.78 billion (2007: euro 1.52 billion). This represents an increase of 18% (24% at constant currencies) compared to the first quarter of 2007. -- Excluding the contribution from Business Objects, SAP's business contributed 12 percentage points to the constant currency growth of the Non-GAAP software and software related service revenues. This represents the 17th consecutive quarter of double-digit growth in software and software related service revenues at constant currencies. -- U.S. GAAP total revenues for the 2008 first quarter were euro 2.46 billion (2007: euro 2.16 billion), which was a year-over-year increase of 14%. Non-GAAP total revenues, which excludes a non-recurring deferred support revenue write-down from the acquisition of Business Objects of euro 47 million for the first quarter of 2008, were euro 2.51 billion (2007: euro 2.16 billion), which is an increase of 16% (22% at constant currencies) compared to the first quarter of 2007. -- First quarter 2008 U.S. GAAP software revenues were euro 622 million (2007: euro 562 million), representing an increase of 11% (18% at constant currencies) compared to the first quarter of 2007. Income -- U.S. GAAP operating income was €359 million (2007: euro 436 million), which was a decrease of 18% compared to the first quarter of 2007. First quarter Non-GAAP operating income, which excludes a non-recurring deferred support revenue write-down from the acquisition of Business Objects and acquisition-related charges totaling euro 130 million, was euro 489 million (2007: euro 447 million), which was an increase of 9% (20% at constant currencies) compared to the first quarter of 2007. -- The U.S. GAAP operating margin for the first quarter of 2008 was 14.6% (2007: 20.2%). The first quarter Non-GAAP operating margin was 19.5% (2007: 20.7%), or 20.2% at constant currencies. Both the U.S. GAAP and the Non-GAAP operating margins were impacted by accelerated investments of approximately euro 40 million (2007: euro 23 million) to build a business around the new SAP Business ByDesign solution to address new untapped segments in the midmarket as announced by the Company at the beginning of 2007. The U.S. GAAP operating margin was additionally impacted by a significant increase in acquisition-related charges as a result of the acquisition of Business Objects. -- U.S. GAAP income from continuing operations for the first quarter of 2008 was euro 247 million (2007: euro 312 million), representing a decrease of 21% compared to the first quarter of 2007. Non-GAAP income from continuing operations, which excludes a non-recurring deferred support revenue write-down from the acquisition of Business Objects and acquisition-related charges totaling euro 98 million, was euro 345 million (2007: euro 319 million), representing an increase of 8% compared to the first quarter of 2007. -- U.S. GAAP earnings per share from continuing operations for the first quarter of 2008 was euro 0.21 (2007: euro 0.26), which was a decrease of 19% compared to the same period in 2007. Non-GAAP earnings per share from continuing operations for the first quarter of 2008 was euro 0.29 (2007: euro 0.26), which was an increase of 12% compared to the same period in 2007. Core Enterprise Applications Vendor Share

WALLDORF, Germany, April 30 /PRNewswire-FirstCall/ — SAP AG (NYSE: SAP) today announced its preliminary financial results for the first quarter ended April 30, 2008. Business Objects is included in these results from January 21, 2008 onwards. SAP – First Quarter 2008* U.S. GAAP Non-GAAP** %change in euro % % constant million Q1/2008 Q1/2007 change Q1/2008 Q1/2007 change currency*** Software revenues 622 562 11 622 562 11 18 Software and 1,736 1,515 15 1,783 1,515 18 24 software- related service revenues Total revenues 2,460 2,162 14 2,507 2,162 16 22 Operating income 359 436 -18 489 447 9 20 Operating margin(%) 14.6 20.2 -5.6pp 19.5 20.7 -1.2pp -0.5pp Income from 247 312 -21 345 319 8 _ continuing operations Net income 242 310 -22 340 317 7 _ Basic EPS from 0.21 0.26 -19 0.29 0.26 12 _ cont. operations(euro) * All figures are preliminary and unaudited and are based on the current status of the purchase price allocation for the Business Objects acquisition which is not yet final. ** Revenue line items are adjusted for the Business Objects support revenue that Business Objects would have recognized had it remained a standalone entity but that SAP is not permitted to recognize as revenue under U.S. GAAP as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition related charges. See Appendix at the end of the financial section of the press release for explanations of the Non-GAAP measures used in this press release and for related reconciliations to U.S. GAAP. *** Constant currency Non-GAAP revenue and operating income figures are calculated by translating Non-GAAP revenue and Non-GAAP operating income of the current period using the average exchange rates from the previous year's respective period instead of the current period. Constant currency period-over-period changes are calculated by comparing the current year's Non-GAAP constant currency numbers with the Non-GAAP number of the previous year's respective period. See Appendix at the end of the financial section of press release for details. HIGHLIGHTS – First Quarter 2008 Revenues — First quarter 2008 U.S. GAAP software and software related service revenues were euro 1.74 billion (2007: euro 1.52 billion), representing an increase of 15% compared to the first quarter of 2007. Non-GAAP software and software related service revenues, which excludes a non recurring deferred support revenue write-down from the acquisition of Business Objects of euro 47 million, for the first quarter of 2008 were euro 1.78 billion (2007: euro 1.52 billion). This represents an increase of 18% (24% at constant currencies) compared to the first quarter of 2007. — Excluding the contribution from Business Objects, SAP's business contributed 12 percentage points to the constant currency growth of the Non-GAAP software and software related service revenues. This represents the 17th consecutive quarter of double-digit growth in software and software related service revenues at constant currencies. — U.S. GAAP total revenues for the 2008 first quarter were euro 2.46 billion (2007: euro 2.16 billion), which was a year-over-year increase of 14%. Non-GAAP total revenues, which excludes a non-recurring deferred support revenue write-down from the acquisition of Business Objects of euro 47 million for the first quarter of 2008, were euro 2.51 billion (2007: euro 2.16 billion), which is an increase of 16% (22% at constant currencies) compared to the first quarter of 2007. — First quarter 2008 U.S. GAAP software revenues were euro 622 million (2007: euro 562 million), representing an increase of 11% (18% at constant currencies) compared to the first quarter of 2007. Income — U.S. GAAP operating income was €359 million (2007: euro 436 million), which was a decrease of 18% compared to the first quarter of 2007. First quarter Non-GAAP operating income, which excludes a non-recurring deferred support revenue write-down from the acquisition of Business Objects and acquisition-related charges totaling euro 130 million, was euro 489 million (2007: euro 447 million), which was an increase of 9% (20% at constant currencies) compared to the first quarter of 2007. — The U.S. GAAP operating margin for the first quarter of 2008 was 14.6% (2007: 20.2%). The first quarter Non-GAAP operating margin was 19.5% (2007: 20.7%), or 20.2% at constant currencies. Both the U.S. GAAP and the Non-GAAP operating margins were impacted by accelerated investments of approximately euro 40 million (2007: euro 23 million) to build a business around the new SAP Business ByDesign solution to address new untapped segments in the midmarket as announced by the Company at the beginning of 2007. The U.S. GAAP operating margin was additionally impacted by a significant increase in acquisition-related charges as a result of the acquisition of Business Objects. — U.S. GAAP income from continuing operations for the first quarter of 2008 was euro 247 million (2007: euro 312 million), representing a decrease of 21% compared to the first quarter of 2007. Non-GAAP income from continuing operations, which excludes a non-recurring deferred support revenue write-down from the acquisition of Business Objects and acquisition-related charges totaling euro 98 million, was euro 345 million (2007: euro 319 million), representing an increase of 8% compared to the first quarter of 2007. — U.S. GAAP earnings per share from continuing operations for the first quarter of 2008 was euro 0.21 (2007: euro 0.26), which was a decrease of 19% compared to the same period in 2007. Non-GAAP earnings per share from continuing operations for the first quarter of 2008 was euro 0.29 (2007: euro 0.26), which was an increase of 12% compared to the same period in 2007.

Core Enterprise Applications Vendor Share

SAP reported its ninth consecutive quarter of share gains. Based on U.S. GAAP first quarter 2008 software and software related service revenues on a rolling four-quarter basis, SAP's worldwide share of Core Enterprise Applications vendors, which account for approximately $37.4 billion in software and software related service revenues as defined by the Company based on industry analyst research, was 32.6% for the four-quarter period ended March 31, 2008 compared to 31.9% for the four-quarter period ended December 31, 2007, and 28.2% for the four-quarter period ended March 31, 2007, representing a year-over-year share gain of 7.6 percentage points, of which approximately 4 percentage points came from organic growth. All prior period share numbers have been adjusted to reflect the acquisition of Business Objects.

"We are pleased to report our 17th consecutive quarter of double-digit growth in software and software related service revenues, even without the inclusion of Business Objects' contributions for the quarter, along with our ninth consecutive quarter of share gains against Core Enterprise Application vendors," said Henning Kagermann, co-CEO of SAP. "Our continued strong performance can be partly attributed to having a leading presence in all regions of the world, making SAP a truly global software company."

Mr. Kagermann continued, "Our growth strategy, which comprises three pillars – the established business, the midmarket and the business user solutions – is working quite well. For the established business, SAP ERP 6.0 adoption is exceeding our expectations, providing continued opportunities for growth of business process platform; the midmarket business continued to perform well with over 1,570 customers from small businesses and midsize companies added in the first quarter; and business user solutions remained the fastest-growing business at the Company. Moreover, we have strengthened our position and significantly broadened our opportunity in the fast-growing market for business user solutions with the successful acquisition of Business Objects."

Cash Flow

Operating cash flow from continuing operations for the first quarter of 2008 was euro 1.07 billion (2007: euro 852 million). Free cash flow for the first quarter of 2008 was euro 1.0 billion (2007: euro 773 million), which was 41% of total revenues (2007: 36%). At March 31, 2008, the Company had total group liquidity of €2.4 billion, which includes cash and cash equivalents, restricted cash and short term investments (December 31, 2007: euro 2.8 billion).

Share Buyback

In the first quarter of 2008, the Company bought back 8.0 million shares at an average price of euro 32.19 (total amount: euro 258 million). As of March 31, 2008, the Company held treasury stock in the amount of 54.3 million shares (approximately 4.4% of total shares outstanding) at an average price of euro 35.50. For 2008, the Company expects to invest an additional approximately euro 250 million buying back shares.

Small and Midsize Enterprises and SAP Business ByDesign

SAP's small and midsize enterprise (SME) business continued to perform well in the first quarter of 2008 as the Company added more than 1,570 new SME customers (excluding customers from Business Objects) in the quarter, representing a 28% increase compared to the first quarter of 2007. A principal component of the SME strategy is SAP's breakthrough innovative new solution, SAP Business ByDesign. Since last September's announcement of SAP Business ByDesign, the Company has been working closely with early customers and partners to validate and fine-tune the solution. As a result of this process, SAP has elected to modify the rollout strategy for SAP Business ByDesign to ensure a more focused and controlled ramp-up process. The new rollout strategy includes the following:

— For 2008, go-to-market efforts for SAP Business ByDesign will focus on six countries, where all the current productive early customers are based and which represent a large amount of the worldwide volume market opportunity. Additional country rollouts will be executed in 2009. — It is expected to take around 12 months to 18 months longer than the original 2010 target to reach the SAP Business ByDesign $1 billion revenue and 10,000 customer potential. — However, the Company will use SAP Business ByDesign innovations and technologies for the existing solutions and this will contribute significantly to the overall revenues of SAP in 2010. — Also, the Company will engage with significantly less than 1,000 customers in 2008.

In light of the modified rollout strategy, SAP will reduce its accelerated investments around SAP Business ByDesign in 2008 by approximately euro 100 million, which is expected to result in additional operating margin expansion in 2008 as noted in the "Business Outlook" section of this release. Furthermore, beginning in 2009 there will be no further accelerated investments. The expected expenses related to SAP Business ByDesign will be funded out of SAP's normal operational business.

SAP maintains its full confidence in the product, the market opportunity and the associated business model of SAP Business ByDesign, as the Company continues to move toward volume readiness in 2008.

BUSINESS OUTLOOK

The Company is providing the following outlook for the full-year 2008, which differs from the original outlook provided in January 2008 only with regards to SAP's expectations for the 2008 Non-GAAP operating margin at constant currencies

— The Company expects full-year 2008 Non-GAAP software and software related service revenue, which excludes a non-recurring deferred support revenue write-down from the acquisition of Business Objects of approximately euro 180 million, to increase in a range of 24% – 27% at constant currencies (2007: euro 7.428 billion). SAP's business, excluding the contribution from Business Objects, is expected to contribute 12 – 14 percentage points to this growth. — The Company now expects the full-year 2008 Non-GAAP operating margin at constant currencies, which excludes a non-recurring deferred support revenue write-down from the acquisition of Business Objects and acquisition-related charges, to be in the range of 28.5% – 29.0% (2007 non-GAAP operating margin: 27.3%). The previous outlook originally provided in January 2008 was expected to be in a range of 27.5% – 28.0%. The change is the result of the Company's decision to reduce accelerated investments around SAP Business ByDesign by approximately euro 100 million in 2008. Therefore, the 2008 Non-GAAP operating margin outlook now includes accelerated investments around SAP Business ByDesign of around euro 100 million for the full-year 2008 (previously euro 175 million to euro 225 million). — The Company is projecting an effective tax rate of 31.0% to 31.5% (based on U.S. GAAP income from continuing operations) for 2008. KEY EVENTS – First Quarter 2008 — In the first quarter of 2008, SAP closed major contracts in several key regions including Al Futtaim Group, Barclays Bank, Landesamt fur Besoldung und Versorgung, Nordrhein-Westfalen, Germany, and Nationwide Building Society in EMEA, Bank of America, LensCrafters, Sigdo Koppers S.A., Tawa Supermarkets in Americas, and Fujian Electric Power Co., Ltd., National Health Insurance Corporation, Korea, Mitsui High-tec, Inc., and Pegatron Corporation in the Asia Pacific Japan region. — On March 17, 2008, SAP announced an extension of their relationship with Novell to enable customers of all sizes to run, manage and secure mission-critical operations on Linux. In a move that will help meet the growing demand for SUSE Linux Enterprise and provide support for the open source community, Novell and SAP are planning to offer enhanced options for customers who choose to run open source. — Further enabling customers to realize the benefits of enterprise service-oriented architecture, SAP and IDS Scheer announced an expansion of their strategic partnership that will enable customers, for the first time, to take a model and process-centric approach to the implementation of service-enabled business applications from SAP. — Building upon its recently announced fast-start program for SAP Business All-in-One solutions, SAP revealed plans for an expansion of its partnership with Intel. SAP and its long-term technology partner Intel intend to introduce a ground-breaking offering that will be offered on an Intel-based system via original equipment manufacturer (OEM) and hardware system providers based on SUSE Linux Enterprise from Novell and the database SAP MaxDB. — On February 25, 2008, SAP announced the third enhancement package for its market-leading enterprise resource planning (ERP) application, SAP ERP. Enhancement packages enable customers to access new software features via a simple download to switch on as needed, responding directly to customer requests for access to new innovation without touching mission-critical core systems. — On February 25, 2008, SAP announced a new fast-start program for its proven SAP Business-All-in-One solutions. The program targets midsize companies in the manufacturing, services and trade industries and provides them with the pre-configured industry-specific processes needed to streamline and gain visibility into their core business operations. — On February 13, 2008, SAP announced that the company had been named "Germany's Best Employer" for the fourth consecutive year in the 2008 "Great Place to Work" initiative, and that it has been named among the leading employers in Japan by the Great Place to Work Institute (GPTW). — On February 12, 2008, SAP announced the industry's first Intelligence Platform. A single, enterprise-scale platform, BusinessObjects XI 3.0 breaks the barriers of traditional business intelligence (BI), helping to ensure that all people connected with an organization can have access to the information they need to make a difference. — On February 11, 2008, SAP announced the squeeze-out of Business Objects securities by SAP France which was completed during the quarter. — On January 29, 2008, SAP announced the launch of an industry value network for public security. The Industry Value Network for public security will join 15 existing industry-focused networks hosted by SAP and brings together customers, partners and SAP to develop solutions that solve the unique challenges of the public security industry. The solutions are based on an enterprise service-oriented architecture and open standards to fuel a new dimension of industry interoperability and collaboration. — On January 21, 2008, SAP obtained control over Business Objects. — On January 21, 2008, SAP and IBM announced at the annual Lotusphere conference plans to deliver their first joint software product codenamed "Atlantic" which will integrate IBM Lotus Notes software with SAP Business Suite. The combined efforts to create "Atlantic" will result in a new style of applications that present information and data in a context familiar to users of the Lotus Notes desktop. This will make it easier for users to do their jobs and greatly enhance the return on investment that companies have made in their SAP applications. — On January 16, 2008, SAP and Business Objects unveiled their first joint offerings. Nine combined product packages were chosen to address the most common challenges facing business users from the C-suite to main street, which include: gaining better business insight, improving company performance and ensuring compliance with corporate governance policies. — On January 16, 2008, SAP announced that by uniting two of the technology industry's biggest brands, SAP and Business Objects now intend to embark on a road map to transform their wide lead in the market of software for business users into leadership in the emerging market for business performance optimization. — At the National Retail Federation (NRF) 97th Annual Convention and Expo in New York, SAP announced on January 15, 2008, increasing momentum for SAP solutions in the retail industry as evidenced by newly released data for customers that have recently implemented SAP for Retail solutions. More than 500 customers went live with SAP solutions in 2007, solidifying SAP's reputation as the preeminent solution provider among retailers.

Use of Non-GAAP Measures

This press release contains certain financial measures such as Non-GAAP revenues, Non-GAAP operating income, Non-GAAP operating margin, free cash flow and constant currency period-over-period changes in revenue and operating income. These measures are not prepared in accordance with U.S. GAAP and therefore are considered non-GAAP financial measures. Our non-GAAP financial measures may not correspond to non-GAAP financial measures that other companies report. The non-GAAP financial measures that we report should be considered as additional to, and not as a substitute for or superior to revenue, operating margin or our other measures of financial performance prepared in accordance with U.S. GAAP. See the Appendix at the end of the financial section of this press release for additional information regarding the Non-GAAP measures included in this press release and for the reconciliations to the corresponding U.S. GAAP measures.

Core Enterprise Applications Vendor Share

The Company provides share data based on the vendors of Core Enterprise Applications solutions, which account for approximately $37.4 billion in software and software related service revenues as defined by the Company based on industry analyst research. For 2008, industry analysts project approximately 7% year-on-year growth for core Enterprise Applications vendors. For its quarterly share calculation, SAP assumes that this approximate 7% growth will not be linear throughout the year. Instead, quarterly adjustments are made based on the financial performance of a sub set of (approximately 25) Core Enterprise Application vendors.

Webcast/Supplementary Financial Information

SAP senior management will host a conference call today at 3:00 pm (CEDT) / 2:00 pm (GMT) / 9:00 am (EDT) / 6:00 am (PDT). The conference call will be Webcast live on the Company's Web site at http://www.sap.com/investor and will be available for replay purposes as well. Supplementary financial information pertaining to the quarterly results can be found at http://www.sap.com/investor.

About SAP

SAP is the world's leading provider of business software, offering applications and services that enable companies of all sizes and in more than 25 industries to become best-run businesses. With more than 47,800 customers (excludes customers from the acquisition of Business Objects) in over 120 countries, SAP is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol "SAP." (For more information, visit www.sap.com)

(*) SAP defines business software as comprising enterprise resource planning and related applications.

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 "anticipate," "believe," "estimate," "expect," "forecast," "outlook," "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP 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 SAP's future financial results are discussed more fully in SAP's filings with the U.S. Securities and Exchange Commission ("SEC"), including SAP's most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

Copyright (C) 2008 SAP AG. All rights reserved.

SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serve informational purposes only. National product specifications may vary.

For more information, press only: Herbert Heitmann, +49 (6227) 7-61137, herbert.heitmann@sap.com, CET Christoph Liedtke, +49 6227 7-50383, christoph.liedtke@sap.com, CET Frank Hartmann, +49 (6227) 7-42548, f.hartmann@sap.com, CET Andy Kendzie +1 (202) 312-3919, andy.kendzie@sap.com, Eastern For more information, financial community only: Stefan Gruber, +49 (6227) 7-44872, investor@sap.com, CET Martin Cohen, +1 (212) 653-9619, investor@sap.com, Eastern Appendix – Financial Information to Follow Financial Information for the First Quarter 2008 – Condensed, Preliminary and Unaudited – Financial Statements Statements of Income Balance Sheets Statements of Cash Flow Supplementary Financial Information Revenue by Region Stock-based Compensation Free Cash Flow Headcount Multi Quarter Overview Appendix Explanation of Non-GAAP Measures CONSOLIDATED INCOME STATEMENT (U.S. GAAP, Non-GAAP* and Non-GAAP at Constant Currency**) Preliminary and unaudited euro millions, unless otherwise stated Three months ended March 31, 2008 Non-GAAP U.S. Non- Currency constant GAAP Adj.* GAAP* impact** currency** Software revenue 622 0 622 43 665 Support revenue 1,058 47 1,105 54 1,159 Subscription and other software- related service revenue 56 0 56 1 57 Software and software- related service revenue 1,736 47 1,783 98 1,881 Consulting revenue 587 0 587 32 619 Training revenue 104 0 104 6 110 Other service revenue 25 0 25 2 27 Professional services and other service revenue 716 0 716 40 756 Other revenue 8 0 8 0 8 Total revenue 2,460 47 2,507 138 2,645 Cost of software and software-related services -367 48 -319 Cost of professional services and other services -567 0 -567 Research and development -417 14 -403 Sales and marketing -597 21 -576 General and administration -152 0 -152 Other operating income/expense, net -1 0 -1 Total operating expenses -2,101 83 -2,018 -92 -2,110 Operating income 359 130 489 46 535 Other non-operating income/expense, net -1 0 -1 Financial income/expense, net -2 0 -2 Income from continuing operations before income taxes 356 130 486 Income taxes -109 -32 -141 Minority interests 0 0 0 Income from continuing operations 247 98 345 Loss from discontinued operations, net of tax -5 0 -5 Net income 242 98 340 Earnings per Share (EPS) EPS from continuing operations – basic in euro 0.21 0.29 EPS from continuing operations – diluted in euro 0.21 0.29 EPS from net income – basic in euro 0.20 0.28 EPS from net income – diluted in euro 0.20 0.28 Weighted average number of shares*** 1,196 1,196 Key Ratios Operating margin 14.6% 19.5% 20.2% Effective tax rate from continuing operations 30.6% 29.0% Three months ended March 31, 2007 U.S. GAAP Adj.* Non-GAAP* Software revenue 562 0 562 Support revenue 914 0 914 Subscription and other software-related service revenue 39 0 39 Software and software- related service revenue 1,515 0 1,515 Consulting revenue 518 0 518 Training revenue 94 0 94 Other service revenue 28 0 28 Professional services and other service revenue 640 0 640 Other revenue 7 0 7 Total revenue 2,162 0 2,162 Cost of software and software-related services -287 10 -277 Cost of professional services and other services -505 0 -505 Research and development -339 0 -339 Sales and marketing -478 1 -477 General and administration -119 0 -119 Other operating income/expense, net 2 0 2 Total operating expenses -1,726 11 -1,715 Operating income 436 11 447 Other non-operating income/expense, net -3 0 -3 Financial income/expense, net 36 0 36 Income from continuing operations before income taxes 469 11 480 Income taxes -157 -4 -161 Minority interests 0 0 0 Income from continuing operations 312 7 319 Loss from discontinued operations, net of tax -2 0 -2 Net income 310 7 317 Earnings per Share (EPS) EPS from continuing operations – basic in euro 0.26 0.26 EPS from continuing operations – diluted in euro 0.26 0.26 EPS from net income – basic in euro 0.26 0.26 EPS from net income – diluted in euro 0.26 0.26 Weighted average number of shares*** 1,214 1,214 Key Ratios Operating margin 20.2% 20.7% Effective tax rate from continuing operations 33.5% 33.5% Three months ended March 31, % change Non-GAAP Non- constant U.S. GAAP GAAP* currency** Software revenue 11 11 18 Support revenue 16 21 27 Subscription and other software-related service revenue 44 44 46 Software and software- related service revenue 15 18 24 Consulting revenue 13 13 20 Training revenue 11 11 17 Other service revenue -11 -11 -4 Professional services and other service revenue 12 12 18 Other revenue 14 14 14 Total revenue 14 16 22 Cost of software and software-related services 28 15 Cost of professional services and other services 12 12 Research and development 23 19 Sales and marketing 25 21 General and administration 28 28 Other operating income/expense, net -150 -150 Total operating expenses 22 18 23 Operating income -18 9 20 Other non-operating income/expense, net -67 -67 Financial income/expense, net -106 -106 Income from continuing operations before income taxes -24 1 Income taxes -31 -12 Minority interests N/A N/A Income from continuing operations -21 8 Loss from discontinued operations, net of tax 150 150 Net income -22 7 Earnings per Share (EPS) EPS from continuing operations – basic in euro -19 12 EPS from continuing operations – diluted in euro -19 12 EPS from net income – basic in euro -23 8 EPS from net income – diluted in euro -23 8 Weighted average number of shares*** Key Ratios Operating margin -5.6pp -1.2pp -0.5pp Effective tax rate from continuing operations * adjustments in the revenue line items are for the Business Objects support revenue that Business Objects would have recognized had it remained a standalone entity but that SAP is not permitted to recognize as revenue under U.S. GAAP as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges. See Appendix for details ** constant currency revenue and operating income figures are calculated by translating revenue and operating income of the current period using the average exchange rates from the previous year's respective period instead of the current period. Constant currency period-over- period changes are calculated by comparing the current year's Non-GAAP constant currency numbers with the Non-GAAP number of the previous year's respective period. See appendix for details *** in millions, treasury stock excluded CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. GAAP) Preliminary and unaudited March 31, 2008 December 31, 2007 euro millions Assets Cash and cash equivalents 2,237 1,608 Restricted cash 3 550 Short-term investments 179 598 Accounts receivable, net 2,861 2,895 Other assets 469 541 Deferred income taxes 171 125 Prepaid expenses/deferred charges 115 76 Assets held for sale 16 15 Current assets 6,051 6,408 Goodwill 4,837 1,423 Intangible assets, net 1,244 403 Property, plant, and equipment, net 1,345 1,316 Investments 88 89 Accounts receivable, net 2 3 Other assets 589 555 Deferred income taxes 192 146 Prepaid expenses/deferred charges 24 23 Noncurrent assets 8,321 3,958 Total assets 14,372 10,366 March 31, 2008 December 31, 2007 euro millions Liabilities, Minority interests and Shareholders' equity Accounts payable 601 715 Income tax obligations 420 341 Other liabilities 1,126 1,456 Provisions 218 154 Deferred income taxes 130 47 Deferred income 1,689 477 Liabilities held for sale 13 9 Current liabilities 4,197 3,199 Accounts payable 5 10 Income tax obligations 95 90 Other liabilities 3,034 79 Provisions 359 369 Deferred income taxes 160 73 Deferred income 36 42 Noncurrent liabilities 3,689 663 Total liabilities 7,886 3,862 Minority interests 1 1 Common stock, no par value 1,247 1,246 Treasury stock -1,929 -1,734 Additional paid-in capital 358 347 Retained earnings 7,401 7,159 Accumulated other comprehensive loss -592 -515 Shareholders' equity 6,485 6,503 Total liabilities, Minority interests and Shareholders' equity 14,372 10,366 Days Sales Outstanding 68 66 CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. GAAP) Preliminary and unaudited euro millions Three months ended March 31, 2008 2007 Net income 242 310 Net income from discontinued operations 5 2 Minority interests 0 0 Income from continuing operations before minority interests 247 312 Adjustments to reconcile income before minority interests to net cash provided by operating activities: Depreciation and amortization 141 56 Losses from equity investees 1 1 Gains/losses on disposal of intangible assets and property, plant, and equipment 1 -1 Gains on disposal of investments -8 -1 Writeups/downs of financial assets 0 -1 Allowances for doubtful accounts 19 13 Impacts of hedging for cash-settled share-based payment plans 9 12 Stock-based compensation including income tax benefits 17 -22 Excess tax benefit from stock-based compensation -8 0 Deferred income taxes -58 -11 Change in accounts receivable 242 36 Change in other assets 32 -76 Change in accrued and other liabilities -764 -556 Change in deferred income 1,201 1,090 Net cash provided by operating activities from continuing operations 1,072 852 Business combinations, net of cash and cash equivalents acquired -3,687 -17 Repayment of acquirees' debt in business combinations -450 0 Purchase of intangible assets and property, plant, and equipment -61 -79 Proceeds from disposal of intangible assets and property, plant, and equipment 7 5 Cash transferred to restricted cash -451 0 Reduction of restricted cash 1,000 0 Purchase of investments -5 -471 Sales of investments 422 225 Purchase of other financial assets -4 -4 Sales of other financial assets 17 4 Net cash used in investing activities from continuing operations -3,212 -337 Purchase of treasury stock -258 -339 Proceeds from reissuance of treasury stock 41 18 Proceeds from issuance of common stock (stock-based compensation) 7 1 Excess tax benefit from stock-based compensation 7 0 Proceeds from short-term and long-term debt 3,859 13 Repayments of short-term and long-term debt -911 -10 Proceeds from the exercise of equity-based derivative instruments (STAR hedge) 66 75 Purchase of equity-based derivative instruments (hedge for cash- settled share-based payment plans) -46 0 Net cash used in financing activities from continuing operations 2,765 -242 Effect of foreign exchange rates on cash and cash equivalents 8 -3 Net cash used in operating activities from discontinued operations -4 -4 Net cash used in investing activities from discontinued operations 0 0 Net cash used in financing activities from discontinued operations 0 0 Net cash used in discontinued operations -4 -4 Net change in cash and cash equivalents 629 266 Cash and cash equivalents at the beginning of the period 1,608 2,399 Cash and cash equivalents at the end of the period 2,237 2,665 REVENUE BY REGION (U.S. GAAP, Non-GAAP* and Non-GAAP at Constant Currency**) Preliminary and unaudited euro millions Three months ended March 31, 2008 Non-GAAP U.S. Non- Currency constant GAAP Adj.* GAAP* impact** currency** Software revenue by region*** EMEA 292 0 292 10 302 Americas 217 0 217 27 244 Asia Pacific Japan 113 0 113 6 119 Total 622 0 622 43 665 Software and software related service revenue by region*** Germany 302 1 303 0 303 Rest of EMEA 616 17 633 21 654 Total EMEA 918 18 936 21 957 United States 413 24 437 65 502 Rest of Americas 150 2 152 2 154 Total Americas 563 26 589 67 656 Japan 86 1 87 1 88 Rest of Asia Pacific Japan 169 2 171 9 180 Total Asia Pacific Japan 255 3 258 10 268 Total 1,736 47 1,783 98 1,881 Total revenue by region*** Germany 453 1 454 0 454 Rest of EMEA 837 17 854 27 881 Total EMEA 1,290 18 1,308 27 1,335 United States 635 24 659 97 756 Rest of Americas 202 2 204 2 206 Total Americas 837 26 863 99 962 Japan 112 1 113 1 114 Rest of Asia Pacific Japan 221 2 223 11 234 Total Asia Pacific Japan 333 3 336 12 348 Total 2,460 47 2,507 138 2,645 Three months ended March 31, 2007 U.S. GAAP Adj.* Non-GAAP* Software revenue by region*** EMEA 237 0 237 Americas 248 0 248 Asia Pacific Japan 77 0 77 Total 562 0 562 Software and software related service revenue by region*** Germany 271 0 271 Rest of EMEA 480 0 480 Total EMEA 751 0 751 United States 419 0 419 Rest of Americas 148 0 148 Total Americas 567 0 567 Japan 62 0 62 Rest of Asia Pacific Japan 135 0 135 Total Asia Pacific Japan 197 0 197 Total 1,515 0 1,515 Total revenue by region*** Germany 408 0 408 Rest of EMEA 673 0 673 Total EMEA 1,081 0 1,081 United States 619 0 619 Rest of Americas 196 0 196 Total Americas 815 0 815 Japan 88 0 88 Rest of Asia Pacific Japan 178 0 178 Total Asia Pacific Japan 266 0 266 Total 2,162 0 2,162 Three months ended March 31, % change Non-GAAP constant U.S. GAAP Non-GAAP* currency** Software revenue by region*** EMEA 23 23 27 Americas -13 -13 -2 Asia Pacific Japan 47 47 55 Total 11 11 18 Software and software related service revenue by region*** Germany 11 12 12 Rest of EMEA 28 32 36 Total EMEA 22 25 27 United States -1 4 20 Rest of Americas 1 3 4 Total Americas -1 4 16 Japan 39 40 42 Rest of Asia Pacific Japan 25 27 33 Total Asia Pacific Japan 29 31 36 Total 15 18 24 Total revenue by region*** Germany 11 11 11 Rest of EMEA 24 27 31 Total EMEA 19 21 24 United States 3 6 22 Rest of Americas 3 4 5 Total Americas 3 6 18 Japan 27 28 30 Rest of Asia Pacific Japan 24 25 32 Total Asia Pacific Japan 25 26 31 Total 14 16 22 * adjustments in the revenue line items are for the Business Objects support revenue that Business Objects would have recognized had it remained a standalone entity but that SAP is not permitted to recognize as revenue under U.S. GAAP as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges. See Appendix for details ** constant currency revenue and operating income figures are calculated by translating revenue and operating income of the current period using the average exchange rates from the previous year's respective period instead of the current period. Constant currency period-over- period changes are calculated by comparing the current year's Non-GAAP constant currency numbers with the Non-GAAP number of the previous year's respective period *** based on customer location STOCK BASED COMPENSATION (U.S. GAAP and Non-GAAP) Preliminary and unaudited euro millions Three months ended March 31, 2008 2007 %change Stock based compensation per expense line item (both U.S. GAAP and Non-GAAP): Cost of software and software related services 1 1 0 Cost of professional services and other services 1 3 -67 Research and development 4 5 -20 Sales and marketing 2 3 -33 General and administration 1 3 -67 Other operating income/expense, net 0 0 0 Total Stock Based Compensation 9 15 -40 FREE CASH FLOW Preliminary and unaudited euro millions Three months ended March 31, 2008 2007 %change Net cash provided by operating activities from continuing operations 1,072 852 26 Purchase of long-lived assets excluding additions from business combinations -61 -79 -23 Free Cash Flow 1,011 773 31 HEADCOUNT Preliminary and unaudited in Full-Time-Equivalents – from March 31, December 31, March 31, continuing operations 2008 2007 2007 Headcount by Region Germany 15,112 14,749 14,324 Rest of EMEA 11,214 8,905 8,367 Total EMEA 26,326 23,654 22,691 United States 9,586 7,832 7,155 Rest of Americas 4,474 2,797 2,367 Total Americas 14,060 10,629 9,522 Japan 1,466 1,344 1,253 Rest of Asia Pacific Japan 9,422 8,234 6,852 Total Asia Pacific Japan 10,888 9,578 8,105 Total 51,274 43,861 40,318 Headcount by Functional Area Software and software related services 6,594 5,831 5,450 Professional services and other services 14,012 12,785 11,777 Research and development 14,990 12,951 11,936 Sales and marketing 10,767 8,282 7,441 General and administration 3,356 2,797 2,581 Infrastructure 1,555 1,215 1,133 Total 51,274 43,861 40,318 MULTI QUARTER SUMMARY (U.S. GAAP and Non-GAAP) Preliminary and unaudited euro millions, unless stated otherwise Q1/2008 Q4/2007 Q3/2007 Q2/2007 Q1/2007 Software revenue (U.S. GAAP) 622 1,415 714 716 562 Revenue adjustment* 0 0 0 0 0 Software revenue (Non-GAAP) 622 1,415 714 716 562 Support revenue (U.S. GAAP) 1,058 1,005 975 944 914 Revenue adjustment* 47 0 0 0 0 Support revenue (Non-GAAP) 1,105 1,005 975 944 914 Subscription and other software-related service revenue (U.S. GAAP) 56 53 46 44 39 Revenue adjustment* 0 0 0 0 0 Subscription and other software-related service revenue (Non-GAAP) 56 53 46 44 39 Software and software-related service revenue (U.S. GAAP) 1,736 2,473 1,735 1,704 1,515 Revenue adjustment* 47 0 0 0 0 Software and software-related service revenue (Non-GAAP) 1,783 2,473 1,735 1,704 1,515 Total revenue (U.S. GAAP) 2,460 3,240 2,419 2,421 2,162 Revenue adjustment* 47 0 0 0 0 Total revenue (Non-GAAP) 2,507 3,240 2,419 2,421 2,162 Operating income (U.S. GAAP) 359 1,109 606 581 436 Revenue adjustment* 47 0 0 0 0 Expense adjustment* 83 19 18 13 11 Operating income (Non-GAAP) 489 1,128 624 594 447 Operating margin (U.S. GAAP) 14.6% 34.2% 25.1% 24.0% 20.2% Operating margin (Non-GAAP) 19.5% 34.8% 25.8% 24.5% 20.7% Effective tax rate from continuing operations 29.0% 33.8% 35.1% 25.8% 33.5% EPS from continuing operations – basic in euro (U.S. GAAP) 0.21 0.63 0.34 0.37 0.26 EPS from continuing operations – diluted in euro (U.S. GAAP) 0.21 0.63 0.34 0.37 0.26 EPS from continuing operations – basic in euro (Non-GAAP) 0.29 0.64 0.35 0.38 0.26 EPS from continuing operations – diluted in euro (Non-GAAP) 0.29 0.64 0.35 0.38 0.26 Headcount** 51,274 43,861 42,601 41,736 40,318 * adjustments in the revenue line items are for the Business Objects support revenue that Business Objects would have recognized had it remained a standalone entity but that SAP is not permitted to recognize as revenue under U.S. GAAP as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges. See Appendix for details ** in Full-Time-Equivalents – from continuing operations APPENDIX Explanation of Non-GAAP Measures

This document discloses certain financial measures, such as Non-GAAP revenues, Non-GAAP operating income, Non-GAAP operating margin, free cash flow, and constant currency period-over-period changes in revenue and operating income, that are not prepared in accordance with U.S. GAAP and are therefore considered non-GAAP financial measures. Our non-GAAP financial measures may not correspond to non-GAAP financial measures that other companies report. The non-GAAP financial measures that we report should be considered as additional to, and not as substitutes for or superior to, revenue, operating income, cash flows, or other measures of financial performance prepared in accordance with U.S. GAAP. Our non-GAAP financial measures included in this press release are reconciled to the nearest U.S. GAAP measure in the tables on the pages F1 to F6 above.

Non-GAAP Revenues, Non-GAAP Operating Income and Non-GAAP Operating Margin

We believe that it is of interest to investors to receive certain supplemental historical and prospective financial information used by our management in running our business -

– in

addition to financial data prepared in accordance with U.S. GAAP. Beginning in 2008 we use both Non-GAAP revenues and Non-GAAP operating income / Non-GAAP operating margin as defined below consistently in our planning, forecasting, reporting, compensation and external communication.

Non-GAAP revenue: Revenues in this document identified as "Non-GAAP revenue'' have been adjusted from the respective U.S. GAAP numbers by including the full amount of Business Objects support revenues that would have been reflected by Business Objects had it remained a stand-alone entity but are not permitted to be reflected as revenues under U.S. GAAP as a result of fair value accounting for Business Objects support contracts in effect at the time of the Business Objects acquisition.

Under U.S. GAAP we record at fair value the Business Objects support contracts in effect at the time of the acquisition of Business Objects. Consequently, our U.S. GAAP support revenues, our U.S. GAAP software and software-related service revenues and our U.S. GAAP total revenues for periods subsequent to the Business Objects acquisition do not reflect the full amount of support revenue that Business Objects would have recorded for these support contracts absent the acquisition by SAP. Adjusting revenue numbers for this one-time revenue impact provides additional insight into our ongoing performance because the support contracts are typically one-year contracts and renewals of these contracts are expected to result in revenues that are not impacted by the business combination-related fair value accounting.

We believe that our Non-GAAP revenue numbers have limitations, particularly as the eliminated amounts may be material to us. We therefore do not evaluate our growth and performance without considering both Non-GAAP revenues and U.S. GAAP revenues. We caution the readers of this document to follow a similar approach by considering our Non-GAAP revenues only in addition to, and not as a substitute for or superior to, revenues or other measures of our financial performance prepared in accordance with U.S. GAAP.

Non-GAAP operating income / Non-GAAP operating margin: Operating income and operating margin in this document identified as ''Non-GAAP operating income'' or ''Non-GAAP operating margin" have been adjusted from the respective operating income and operating margin numbers as recorded under U.S. GAAP by including the full amount of Business Objects support revenues to be included in Non-GAAP revenue, and by excluding acquisition-related charges. Acquisition related charges in this context comprise:

— Amortization expense of intangibles acquired in business combination and standalone acquisitions of intellectual property — Expense from purchased in-process research and development — Restructuring expenses as far as incurred in connection with a business combinations and accounted for under SFAS 146 in SAP's U.S. GAAP financial statements

Although acquisition-related charges include recurring items from past acquisitions, such as amortization of acquired intangible assets, they also include an unknown component, relating to current-year acquisitions. We cannot accurately assess or plan for that unknown component until we have finalized our purchase price allocation. Furthermore acquisition-related charges may include one-time charges that are not reflective of our ongoing operating performance.

We believe that our Non-GAAP financial measures described above have limitations, particularly as the eliminated amounts may be material to us. We therefore do not evaluate our growth and performance without considering both Non-GAAP operating income / Non-GAAP operating margin numbers and U.S. GAAP operating income and margin numbers. We caution the readers of this document to follow a similar approach by considering our Non-GAAP operating income / Non-GAAP operating margin numbers only in addition to, and not as a substitute for or superior to, revenues or other measures of our financial performance prepared in accordance with U.S. GAAP.

Free Cash Flow:

We believe that free cash flow is a widely accepted supplemental measure of liquidity. Free cash flow measures a company's cash flow remaining after all expenditures required to maintain or expand the business have been paid off. We calculate free cash flow as operating cash flow from continuing operations minus additions to long-lived assets excluding additions from acquisitions. Free cash flow should be considered in addition to, and not as a substitute for or superior to, cash flow or other measures of liquidity and financial performance prepared in accordance with U.S. GAAP.

Constant Currency Period-over-Period Changes

We believe it is important for investors to have information that provides insight into our sales. Revenue measures determined under U.S. GAAP provide information that is useful in this regard. However, both sales volume and currency effects impact period-over-period changes in sales revenue. We do not sell standardized units of products and services, so we cannot provide relevant information on sales volume by providing data on the changes in product and service units sold. To provide additional information that may be useful to investors in breaking down and evaluating changes in sales volume, we present information about our revenue and various values and components relating to operating income that are adjusted for foreign currency effects. We calculate constant currency year-over-year changes in revenue and operating income by translating foreign currencies using the average exchange rates from the previous (comparator) year instead of the report year.

We believe that data on constant currency period-over-period changes have limitations, particularly as the currency effects that are eliminated constitute a significant element of our revenues and expenses and may severely impact our performance. We therefore limit our use of constant currency period-over-period changes to the analysis of changes in volume as one element of the full change in a financial measure. We do not evaluate our results and performance without considering both constant currency period-over-period changes on the one hand and changes in revenues, expenses, income, or other measures of financial performance prepared in accordance with U.S. GAAP on the other. We caution the readers of this document to follow a similar approach by considering data on constant currency period-over-period changes only in addition to, and not as a substitute for or superior to, changes in revenues, expenses, income, or other measures of financial performance prepared in accordance with U.S. GAAP.

SOURCE SAP AG

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