Market Sentiment Affects SAP Stock in 2008
Despite the turbulence on the markets, SAP stock fared well in the first three quarters of
2008. It started the year at € 35.53, kept ahead of the DAX for a while, left the DAX behind
from the beginning of May on positive news, and rose to € 39.93 by September 19 while
the DAX retreated continuously. The alacrity, with which SAP integrated Business Objects
into our operations, and the fact that it already made a significant contribution to our revenue,
impressed the market. Business Objects is the French software manufacturer we acquired
in 2008. At the beginning of October, we announced preliminary third-quarter figures that
were well below our own expectations and those of the market. As prices on all stock exchanges
slumped, our stock fell more than one-third in value to € 24.97 within 14 days’ trading.
It bottomed for the year on October 28, 2008 at € 23.45. Buffeted by market ructions,
SAP stock drifted in the fourth quarter to end the year at € 25.24. Over the full year, it fell
29 % – thus performing better than any of the key indexes. The average number of SAP
shares traded per day in 2008 was just short of nine million, some 5 % fewer than in 2007.
Price movements of SAP stock were closely paralleled by those of SAP American depositary
receipts (ADRs) on the New York Stock Exchange. The price of the ADRs depends
largely on the price of the underlying SAP stock and on the euro-to-dollar exchange rate. The
ADRs stood at US$ 51.05 at the end of 2007 and at US$ 36.22 one year later. Like the
SAP stock, the ADRs thus fell 29 % over the year. The U.S. dollar gained approximately 4 %
against the euro during the year, but this was offset by the slightly greater than usual
arbitrageable difference between the highly volatile markets.
|
2004 |
2005 |
2006 |
2007 |
2008 |
| Year-end price (€) |
32.85 |
38.29 |
40.26 |
35.53 |
25.24 |
| Year high (€) |
35.68 |
39.11 |
46.86 |
42.27 |
39.93 |
| Year low (€) |
29.03 |
27.66 |
34.56 |
33.37 |
23.45 |
| Shares outstanding at year end (thousands) |
1,264,016 |
1,265,832 |
1,267,537 |
1,246,040 |
1,225,763 |
| Market capitalization at year end (€ billions) |
41.50 |
48.50 |
51.00 |
44.30 |
30.1 |
| Earnings per share (€, U.S. GAAP) |
1.05 |
1.21 |
1.53 |
1.60 |
1.62 |
| Dividend per share (€) |
0.28 |
0.36 |
0.46 |
0.50 |
0.50*** |
| Dividend distributions* (€) |
26% |
30% |
30% |
31% |
32%*** |
| Key data for SAP ADRs** |
|
|
|
|
|
| Year-end price (US$) |
44.21 |
45.07 |
53.10 |
51.05 |
36.22 |
| Year high (US$) |
45.45 |
46.43 |
43.57 |
59.86 |
58.98 |
| Year low (US$) |
35.50 |
36.96 |
56.56 |
44.17 |
29.70 |
* Dividend distributions as a percent of net income
** SAP shares are traded on the New York Stock Exchange in the form of American Depositary Receipts (ADRs). One SAP ADR is equivalent to one SAP ordinary share.
*** Proposal for 2009.