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Business at SAP
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Liquid assets grow
In 2004, operating cash flow increased 21 % to €1,827 million.
Main reason for the increase were the improvements in
income.
In 2004, net cash used in investments was €887 million
of which €168 million was used for the payments made to
increase the Company’s stake in SAP SI, €212 million for new
investments in intangible assets and in property, plant, and
equipment, and €581 million for investment of cash equivalents
in time deposits. The net cash used for investments was
22 % less than in 2003, primarily because the increase in time
deposits was significantly lower than in 2003.
In 2004, SAP increased its dividend to shareholders
33 % in view of the Company’s 2003 results. Net cash used in
financing activities increased 22 % in 2004 to €372 million,
chiefly as a result of the dividend increase.
Cash and cash equivalents held at the end of 2004 came
to €1,513 million, a 54 % increase on the figure for 2003. Liquid
assets, comprising cash and cash equivalents as well as time
deposits, increased 52 % to €3,196 million.
To gain financial flexibility, in November 2004 SAP
established a €1,000 million syndicated credit facility through
an international group of banks. The Company already had
other lines of credit in place; the new line was arranged to
provide additional liquidity. SAP has no current plans to draw
on the facility.
Assets grow; equity ratio improves
The growth of liquid assets was the chief factor in the 20%
growth in total assets to €7,585 million at the end of 2004 (2003:
€6,326 million). Fixed assets grew slightly, by 1 %. A decline in
financial assets was counterbalanced chiefly by the investment
in intangible assets. The equity-to-fixed-assets ratio rose again,
from 231% in 2003 to 283 % in 2004.
SAP improved receivables management, as it repeatedly has
for several years. The Company reduced its rolling 12-month
average collection period, which is measured in days’ sales outstanding
(DSO), by five days to 71 days.
Net income growth increased shareholders’ equity in
SAP. The equity ratio (that is, the ratio of equity to total assets)
increased two percentage points to 61 % in 2004.
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