SAP Starting Successful into the Financial Year 2004

April 22, 2004 by SAP News

Revenues

  • Software revenues were Euro 370 million (2003: Euro 352 million), representing an increase of five percent compared to 2003. At constant currencies, software revenues increased eleven percent year-over-year.
  • Software revenues in the U.S. increased 45 percent, or 65 percent at constant currencies.
  • Total revenues were Euro 1.6 billion (2003: Euro 1.5 billion), which was an increase of two percent compared to 2003. At constant currencies, total revenues increased eight percent year-over-year.
  • The percentage of order entry from new customers was 33 percent, which was the highest in the past eight quarters.

Income

  • Operating income was Euro 333 million (2003: Euro 298 million), which was an increase of twelve percent compared to last year. Pro forma operating income was Euro 332 million (2003: Euro 304 million), representing an increase of nine percent compared to 2003. At constant currencies, operating income increased 20 percent and pro forma operating income increased 18 percent.
  • The operating margin was 21.4 percent, which was up 1.8 percentage points year-over-year. The pro forma operating margin was 21.3 percent, which represented an increase of 1.3 percentage points compared to 2003.
  • Net income was Euro 229 million (2003: Euro 186 million), or Euro 0.74 per share (2003: Euro 0.60 per share, representing an increase of 23 percent compared to 2003. Pro forma net income was Euro 229 million (2003: Euro 200 million), or pro forma Euro 0.74 per share (2003: Euro 0.64 per share), representing an increase of 15 percent compared to 2003.

Cash Flow and Peer Group Share

  • Operating cash flow was Euro 859 million (2003: Euro 791 million), which was an increase of nine percent compared to last year. Free cash flow as a percentage of total revenues was 53 percent (2003: 50 percent). At March 31, 2004, the Company had Euro 2.9 billion in liquid assets (March 31, 2003: Euro 1.9 billion), representing a 53 percent increase compared to last year.
  • Once again, SAP, with approximately $450 million in software revenues on a quarter-end U.S. dollar exchange rate basis, gained share against its peer group. On a rolling four quarter basis, the Company’s worldwide share against its peer group based on software revenues was 54 percent at the end of the first quarter of 2004 compared to 51 percent at the end of the first quarter of 2003.
  • On a rolling four quarter basis, the Company’s U.S. share against its peer group based on software revenues was 34 percent at the end of the first quarter of 2004 compared to 25 percent at the end of the first quarter of 2003.

“We are pleased with the start to 2004 as our results support our expectations for the year,” said Henning Kagermann, Chief Executive Officer of SAP. “We reported another excellent quarter from our U.S. organization, which is demonstrating strong sales execution.”

Positive business outlook

SAP has not changed its outlook and continues to provide the following guidance for the full year 2004.

  • Software revenues are expected to increase by around ten percent compared to 2003.
  • The pro forma operating margin, which excludes stock-based compensation and acquisition-related charges, is expected to increase by around one percentage point compared to 2003.
  • Pro forma earnings per share, which excludes stock-based compensation, acquisition-related charges and impairment-related charges, are expected to be in the range of Euro 4.20 to Euro 4.30 per share.
  • The outlook is based on an assumed U.S. Dollar to Euro exchange rate of $1.25 per Euro 1.00.

Mr. Kagermann continued, “Companies are looking at software investments in terms of their ability to support growth opportunities and business flexibility. With SAP NetWeaver and our comprehensive product portfolio, we are meeting the needs of our customers in all of our markets.”

Key events in first quarter 2004

  • Major contracts in the first quarter of 2004 include Chevron, Johns Hopkins, and Wyeth in the Americas; Deutz, The Boots Company, and Westdeutsche Allgemeine in EMEA; and AXA Life Insurance, Bank of China, and Nippon Meat Packers in Asia/Pacific.
  • With simultaneous announcements at CeBIT, the world’s leading technology trade fair in Hanover, and at its Palo Alto campus in California, SAP presented the newest release of SAP NetWeaver 2004, the first truly integrated platform to be delivered as one packaged solution. SAP NetWeaver 2004 synchronizes the release of all its technology components and delivers new functional enhancements to help customers execute flexible business strategies and drive business change and innovation while reducing IT costs and complexities. SAP NetWeaver 2004 will serve as the foundation for new releases of mySAP Business Suite solutions.
  • SAP and Visa International announced their intention to integrate SAP NetWeaver and the Visa Commercial Format (VCF), a standard data set containing enhanced spending data from all Visa Commercial payment products, to provide unprecedented levels of data delivery to corporations that use Visa with SAP’s enterprise resource planning (ERP) systems. By integrating SAP NetWeaver and Visa’s enhanced data services, Visa and SAP will enable corporations and their employees to manage payments for business expenditures, automatically integrate related transaction data into enterprise systems and increase the speed and lower the cost of expense administration.
  • SAP and Coca-Cola Enterprises announced a joint strategic development initiative that will result in a new generation of solutions, including mobile solutions, to improve direct store delivery, full-service vending and equipment service for the beverage and other consumer products industries. The initiative combines the expertise of Coca-Cola Enterprises in beverage market development and execution with the software development capabilities of SAP to produce a next-generation software solution supporting the direct store delivery process from order to cash and settlement.
  • SAP announced the launch of the first packaged radio frequency identification (RFID) solution for supply chain management. SAP is delivering a solution that is the first of its kind developed and built entirely from the ground up to help companies manage the data reads from and writes to RFID tags. This technology will dramatically change supply chain management in the retail and consumer product industries. The announcement was made at the National Retail Federation (NRF) show held in January 2004 in New York.
  • To support its customers’ transitions from SAP R/3 to mySAP ERP, SAP announced in March a newly defined maintenance timeframe for reliable, long-term planning. SAP introduced the “5 – 1 – 2” release and maintenance strategy.
  • SAP’s Executive Board and Supervisory Board decide to propose a 33 percent increase in the annual dividend for 2003 to Euro 0.80 per non-par share from Euro 0.60 per non-par share the previous year. The final dividend per ADR is calculated as one-fourth of the Euro 0.80 dividend and is dependent on the Euro-/US-Dollar exchange rate.

SAP senior management will host a conference call today at 3:00 PM (CET) / 2:00 PM (GMT) / 9:00 AM (Eastern) / 6:00 AM (Pacific), The conference call will be web cast live at and will be available for replay as well.

Source: SAP AG

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