Substantial dividend increase recommended
Most companies in the in the software industry do not pay dividends. However, SAP believes its shareholders should again benefit appropriately from the Company’s success in the fiscal year. Last year, the Executive Board based its dividend recommendation on the Company’s sustainable profitability and therefore excluded from its consideration the nonrecurring impact that minority investment impairment charges had on income in 2002. Consistently with that approach, the Executive Board this year makes a recommendation based primarily on the 24% increase in pro-forma earnings per share, as well as its optimism concerning business in the future. The Executive Board will recommend to the Supervisory Board and to the Annual General Shareholders' Meeting that a dividend of €0.80 be paid per share, a 33% increase in comparison with last year. If the shareholders approve this recommendation and treasury stock remains at the 2003 year-end level, the total amount distributed in dividends would be approximately €249 million. The amount would vary if the number of shares held in treasury on the day of the Annual General Shareholders’ Meeting is not the same as at the end of 2003. Aside from the distributed dividend, the Company also returned €88 million to the shareholders by repurchasing SAP shares for treasury.

Targeted 3% headcount growth in 2003
Unlike several other companies, in 2003 SAP again managed to avoid significant layoffs despite the difficult economic situation. It was a declared aim of the Company to increase operating margin in 2003. Therefore, as in the previous year, SAP recruited new employees in a highly targeted manner. Expressed in full-time equivalents (FTEs), the number of employees rose 3% to 29,610. The majority of recruits joined research and development (R&D), which, when calculated as FTEs, grew 11%. In contrast, the number of sales and marketing employees in FTEs increased only 2%, the number of service and support employees in FTEs actually declined 2%, and general and administration headcount in FTEs remained almost unchanged.

Comparing regions, the greatest headcount growth was in Asia-Pacific, where the headcount (in FTEs) rose 14% due chiefly to the expansion of the Company’s development facilities in India and China.

The commitment, creativity, and skill level of employees are critical success factors. Most SAP employees have a university degree, with science, engineering, and business disciplines predominating. To maintain the expertise of its employees at a high level, the Company continued to invest in rigorous training and education. As in previous years, SAP provided extensive classroom training and Internet-based courses provided through SAP University and SAP’s training business.

Leading German daily Frankfurter Allgemeine Zeitung and human resources provider Access AG together confirmed SAP’s reputation as a highly attractive employer by choosing the Company for their prestigious Employer of Choice Award.