SAP Asia Pacific Japan Q2 2008 earnings results reflect strategic consistency, strengthening SAP’s competitive position across the Region

July 29, 2008 by SAP News 0

SAP Asia Pacific Japan reaffirms its role as SAP’s global growth engine in the first half of 2008

SingaporeSAP Asia Pacific Japan (“APJ”) exceeded revenue growth expectations in the second quarter of 2008, achieving 49 per cent growth in Software Revenue year-on-year to €159 million. Software and Software-Related Service Revenues in Asia Pacific Japan grew 40 per cent year-on-year, while Total Revenue for the quarter grew 31 per cent year-on-year, to €399 million. All figures quoted in this release are Non-GAAP constant currency.

“SAP APJ has delivered a strong first half year, in line with our strategy. We have a clear vision of where we want to be, we engaged the right people and we are consistently transforming the business to produce profitable growth” said Geraldine McBride, President and CEO, SAP Asia Pacific Japan.

“SAP APJ is currently growing at around five times the software market growth rate in APJ and we intend to keep that momentum. Key markets such as India, China and Japan exhibit tremendous potential for growth and we will continue to invest in our industry leadership in those markets.”

Investing in future success in Asia Pacific Japan

A key pillar to SAP’s success in the region is the attraction and retention of talent. In the second quarter of 2008, SAP APJ added an additional 1,547 full time equivalent staff – a 16 per cent growth in headcount – bringing the total number of employees in the region to over 11,000.

Later this week, SAP APJ will announce further new investment initiatives to boost post-graduate education in China.

During Q2 2008, SAP also announced the opening of a second SAP Co-Innovation Lab in Ohtemachi, Tokyo, Japan. This initiative aims at broadening efforts by SAP to work with its software solution partners, technology partners, service partners and customers, accelerating the innovation and delivery of solutions designed to address industry-specific issues.

Strong Adoption of SAP by New Customers

Around 50 per cent of all SAP APJ deals in the first half of 2008 came from new Customers – up significantly from the previous corresponding period. SAP APJ also increased its average deal size per Customer by 27 per cent during the quarter.

“Customers continue to see that the proven capability of SAP software allows them to transform their businesses, resulting in faster growth and deeper engagement with global markets,” said McBride. “A key part of our growth in APJ is also being fuelled by our deeper involvement with Business Objects, an SAP Company, which won its largest deal ever in APJ during Q2 2008.”

SAP’s SME performance was consistently strong in Q2 2008, achieving growth of more than 29 per cent over the previous comparable period. SAP’s indirect channel partners continued to provide significant momentum for the SME business, contributing 85 per cent of new deals during the quarter.

Building on SAP’s commitment to empower customers and leverage software to create profitable business growth, SAP recently launched the Fast Start Program for SAP® Business All-in-One, offering midsize companies in the manufacturing, services and wholesale industries the opportunity to have industry-specific business processes up and running in six to eight (6-8) weeks. The program has experienced a strong customer response in Australia, India, China, Korea, Malaysia, Philippines and Singapore and will be rolled out in Japan in Q3.

SAP – the Business Process Platform of Choice

The continued acceptance of SAP’s Business Process Platform was further demonstrated by strong revenue growth during Q2 2008, with revenues growing 86 per cent year-on-year, including a major contract with Neptune Orient Lines Ltd in Singapore.

SAP Expands Market Share

SAP continued to gain market share in the second quarter of 2008, marking its tenth consecutive quarter of market share gains. Based on U.S. GAAP second quarter 2008 software and software-related service revenues on a rolling four-quarter basis, SAP’s worldwide share of Core Enterprise Applications vendors, which account for approximately $38.1 billion in software and software-related service revenues as defined by the Company based on industry analyst research, was 33.7% for the four-quarter period ended June 30, 2008.

This represents an increase of 7.7 percentage points compared to the four quarter period ended June 30, 2007, of which approximately 4.5 percentage points came from organic growth and 3.2 percentage points from the acquisition of Business Objects.

Use of Non-GAAP Financial Measures
This press release contains certain financial measures such as Non-GAAP revenues, Non-
GAAP operating income, Non-GAAP operating margin, free cash flow, constant currency revenue and operating income measures, as well as U.S. Dollar based Non-GAAP revenue numbers. These measures are not prepared in accordance with U.S. GAAP and therefore are considered non-GAAP financial measures. Our non-GAAP financial measures may not correspond to non-GAAP financial measures that other companies report. The non-GAAP financial measures that we report should be considered as additional to, and not as a substitute for or superior to revenue, operating margin or our other measures of financial performance prepared in accordance with U.S. GAAP. See the Appendix at the end of the financial section of this press release for additional information regarding the Non-GAAP measures included in this press release and for the reconciliations to the corresponding U.S. GAAP measures.

About SAP
SAP is the world’s leading provider of business software, offering applications and services that enable companies of all sizes and in more than 25 industries to become best-run businesses. With around 76,000 customers in over 120 countries, SAP is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol “SAP.” (For more information, visit www.sap.com)

(*) SAP defines business software as comprising enterprise resource planning and related applications.

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Selection of Key Customer Wins for SAP Asia Pacific in Q2 2008:

ANZ
7-Eleven Stores Pty Ltd (Retail)

India
Oil & Natural Gas Corporation (Oil & Gas)
KPIT-Cummins Infosystems Ltd (Professional Services)
Essel Group (Forest products, fur)
Rain Commodities Limited (Building Materials)
Sasken Communication (Professional Services)
Bharat Electronics Limited (Defence)
Axis Bank TBC (Financial Services)

Japan
Sumisho Computer Systems (Professional Services)

North Asia
China Petroleum & Chemical (Oil & Gas)
Shanxi Electric Power Corp. (Utilities & Waste)

South East Asia
PT Purinusa Ekapersada (Professional Services)
PT Anugerah Pharmindo Lestari (Life Sciences)
Neptune Orient Lines Ltd (Logistics & Postal Services)
Singapore Technologies Kinetics (Industrial Machinery)
HSBC (Financial Services)

SAP Q2 2008 Financial Statements
Financial Statement (PDF)