SAP Reports 23% Revenue Growth for the First Nine Months of 2001
Walldorf - October 18, 2001 - SAP AG (NYSE: SAP), the leading provider of e-business software solutions, today announced its financial results for the third quarter and nine months ended September 30, 2001. For the first nine months, sales increased 23% over 2000 to €5.0 billion (2000: €4.1 billion).
- Revenues for the nine month period exceeded €5.0 billion (23% increase); third quarter revenues were €1.65 billion (16% increase)
- Operating margin, excluding stock based compensation and TopTier acquisition related charges, increased 3% points to 17% for the first nine months
- Meets expectations for the first nine months of 2001 and improves market share
- New full year guidance
Third Quarter Results
In the third quarter of 2001, revenues rose 16% over the same period last year to €1.65 billion (2000: €1.42 billion). Third quarter 2001 operating income, before charges for stock-based compensation programs (STAR and LTI) and TopTier acquisition related charges, were flat at €201 million (2000: €202 million). Operating margin, excluding stock based compensation and TopTier acquisition related charges, was 12% (2000: 14%). Earnings before interest, taxes, depreciation and amortization ("EBITDA") improved by 18% to €235 million (2000: €200 million). Net income for the third quarter 2001, adjusted for the TopTier acquisition costs and the Commerce One impact, was €78 million (2000: €88 million) and earnings per share was €0.25 (2000: €0.28).
"Recently, we have seen significant changes in the software market, mainly in the U.S., with customers and prospects postponing decisions on software purchases," commented Hasso Plattner, Co-Chairman and CEO of SAP AG. "However, companies remain committed to investing in the most cost effective solutions available and are increasingly turning to SAP for high returns on investments, broad functionality and ease of integration."
In the quarter, revenues in Europe, the Middle East and Africa (EMEA) region increased 32% to €841 million (2000: €639 million) and in the Asia-Pacific region (APA) revenues were down 6% to €195 million (2000: €208 million). Revenues in the Americas region rose 7% to €613 million (2000: €574 million); however, at constant currency rates, revenues in the Americas would have risen 9%.
"We are pleased to have met our guidance for the first nine months of 2001, although we had thought software license sales for the quarter would be stronger," said Henning Kagermann, Co-Chairman and CEO of SAP AG. "Consulting and training revenues contributed significantly to our revenue mix, and our regional strength was evidenced by robust results in Europe."
Product revenues in the third quarter rose 9% to €995 million (2000: €913 million). License revenues were down 7% to €447 million (2000: €480 million). Consulting and training revenues rose 30% to €524 million (2000: €404 million) and 19% to €113 million (2000: €95 million), respectively.
For the third consecutive quarter, the Company is providing additional information on revenues from certain specific software solutions. In the third quarter of 2001, software revenues related to mySAP CRM (Customer Relationship Management) reached approximately €78 million, representing 17% of total software license sales (€447 million). Third quarter mySAP SCM (Supply Chain Management) related revenues totaled around €98 million, representing 22% of total software license sales. These figures include revenues from designated solution contracts, as well as figures from integrated solution contracts, which are allocated based on usage surveys.
Nine Months Results
For the first nine months, sales increased 23% over 2000 to €5.0 billion (2000: €4.1 billion). Operating income, before charges for stock based compensation and TopTier acquisition related charges, was up 49% to €858 million (2000: €576 million). License revenues for the first nine months of 2001 rose 11% to €1.55 billion (2000: €1.4 billion). Consulting revenues grew 34% to €1.51 billion (2000: €1.13 billion) and training revenue increased 20% to €349 million (2000: €290 million).
In the first nine months, sales in the APA region were up 10% to €593 million (2000: €539 million), in the EMEA region, revenues increased 33% to €2.6 billion (2000: €1.96 billion) and in the Americas, revenues rose 14% to €1.83 billion (2000: €1.61 billion).
In the nine month period, software revenues related to mySAP CRM (Customer Relationship Management) reached approximately €249 million, representing 16% of total software license sales (€1,551 million). Nine month mySAP SCM (Supply Chain Management) related revenues totaled around €351 million, representing 23% of total software license sales. These figures include revenues from designated solution contracts, as well as figures from integrated solution contracts, which are allocated based on usage surveys.
Full Year Guidance
Due to changes in corporate software spending timetables, SAP has updated its full year outlook and now sees full year 2001 revenues growing by around 15% and expects operating margins excluding stock based compensation and TopTier acquisition related charges to match the 20% levels achieved in 2000.
SAP continues to shape and re-focus its global organization and enhance its products and services in this rapidly changing environment. Consequently, the Company is accelerating cost reduction measurements, including adjusting the levels and mix of its employees, particularly in the U.S. The Company continues to extend its infrastructure in certain areas where SAP is growing its profile, such as CRM and SCM.
Third Quarter Highlights
- Major contracts in the quarter included Rolls-Royce, Centrica and Getronics in the EMEA region; CreoScitex, City of Montreal and Agilent in the Americas; and Samsung, Telephone Organization of Thailand and Shanghai Pudong Development Bank in the APA region among others in all regions.
- SAP concluded additional investment in Commerce One: SAP received all necessary approvals from U. S. antitrust authorities for its additional investment. SAP now owns slightly more than 20% of Commerce One outstanding stock.
- SAP began shipping the newest version of mySAP Customer Relationship Management to customers worldwide in August: mySAP CRM provides unparalleled breadth and depth of functionality through a full suite of CRM functions. In addition, mySAP CRM can also serve as a platform to openly integrate with either SAP or non-SAP business applications such as supply chain management, product lifecycle management and human lifecycle management for flexibility that meets each business’s unique needs.
- SAP AG established a Global Professional Services Organization (Global PSO) within SAP AG: The new business unit will work closely with the global consulting partners of SAP and focus on high-profile SAP customers that require consulting services for global e-business solution projects, independent of geography and across industries.
Conference Call/Webcast/Supporting Slides
SAP senior management will host a conference call today at 5:00 PM (CET) / 4:00 PM (GMT) / 11:00 AM (Eastern) / 8:00 AM (Pacific). This call will be web cast live at http://www.sap.com/investor and will be available for replay purposes as well.
Revenue by Region (in € millions)
Revenue
3Q 2001 |
Revenue
3Q 2000 |
Change |
% Change |
| Total |
1,649 |
1,421 |
228 |
16 |
| - at constant currency rates |
|
|
|
19 |
| EMEA |
841 |
639 |
202 |
32 |
| - at constant currency rates |
|
|
|
32 |
| Asia Pacific |
195 |
208 |
-13 |
-6 |
| - at constant currency rates |
|
|
|
3 |
| Americas |
613 |
574 |
39 |
7 |
| - at constant currency rates |
|
|
|
9 |
Key figures at a glance (in € millions)
SAP Group
|
3Q 2001
|
3Q 2000 |
Change |
% Change |
| Revenues |
1649 |
1,421 |
228 |
16 |
| License revenues |
447 |
480 |
-33 |
-7 |
| Income before taxes |
109 |
149 |
-40 |
-27 |
| Net income |
37 |
83 |
-46 |
-55 |
Headcount
(September 30) |
27,884 |
23,363 |
4521 |
19 |
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “intend,” “may,” “will,” “expect,” and “project” and similar expressions as they relate to the Company are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the Company’s future financial results are discussed more fully in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 20-F for 2000 filed with the SEC on March 28, 2001. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.
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Contact:
Gundolf Moritz, SAP AG, +49-6227-7-44872
Stefan Gruber, SAP AG, +1-212-653-9821
Jim Prout, Taylor Rafferty, +1-212-889-4350