Dear Shareholders, Customers, Partners, and Colleagues,

When we announced at the beginning of 2004 that we would grow our software license revenue by 10%, many analysts thought this was going to be very difficult – if not impossible. 2003 had been a challenging year for SAP and the market, but we demonstrated our strength and proved that we were on the right path. That is why we were confident in our predictions for 2004. Now, as we look back at the year, we can say we met, and in some cases exceeded, our goals. While in 2003 our software revenues declined by 6%, we have now returned to double-digit growth – with a 10% increase – despite the rapid weakening of the U.S. dollar. In fact, if you adjust our 2004 software license revenue by currency, it grew by 13%. In U.S. dollars, we grew our software revenue 19%, while the rest of the market grew by only 4%.