China showed strong double-digit revenue growth in Q1 `09
SINGAPORE — SAP Asia Pacific Japan (“APJ”) performed strongly in a challenging first quarter 2009, evidencing sustained Customer Support and delivering improved Operating Margin.
While SAP APJ Total Revenue and Software and Software Related Services Revenue growth slowed by 12 percent and 10 per cent respectively, SAP APJ margins improved materially. All growth figures in this release are expressed in non-GAAP constant currency terms and are measured against the previous comparable period.
“SAP APJ delivered a solid first quarter performance given that we are experiencing recessionary conditions in almost all markets in the region,” said Geraldine McBride, President, SAP Asia Pacific Japan.
“In particular, SAP China has put in an exceptional performance, showing double-digit growth in total revenue and strong margin expansion over the previous comparable period,” she continued.
“Our Customers are with us – in spite of the current economic environment.”
“SAP APJ continued to secure large deals in sectors less affected by current market conditions such as Utilities, Infrastructure and Government. We also continue to see investment in strategic projects by Customers seeking to become more strategically and operationally focused. SAP APJ is showing those Customers how to become ‘Clear Enterprise’ organizations, by helping provide clarity in their quest for strategic and operational excellence.
SAP enjoys strong Customer support
“SAP’s strong first quarter performance further demonstrates our market leadership and inherent financial strength, stemming from our strong customer base and ability to respond to Customer needs,” said McBride.
“Globally, in our first quarter of 2009, 22 per cent of order entry came from new Customers, while recurring revenues comprised almost 55 per cent of total sales revenue. SAP APJ also demonstrated strength in its maintenance revenues – a strong indication that our Customers continue to see the value associated with SAP APJ support.”
“SAP has revolutionized the industry approach to software support. Our recent agreement with SAP User Groups on Enterprise Support services, helps our Customers lower the total cost of their IT operations. We have agreed to deliver on specific KPIs, defined by our User Groups, before we adjust future Enterprise Support pricing. We are committed to Value Delivery for our Customers!” she continued.
“We have also just concluded SAP’s largest-ever Customer event globally, with more than 20,000 Customers participating in an event which saw the launch of SAP’s ‘Clear New World’ strategic initiative. Organisations today need ‘clarity’, in order to refocus their business strategies and streamline operational execution. In response, SAP has launched ‘Clear New World’, a new mid-term strategic thrust, which helps Best-Run businesses attain their vision and thrive in the New Reality.”
“SAP itself is also undertaking its own journey to becoming a ‘Clear Enterprise’, by becoming a more transparent, sustainable and agile organization, able to continually Deliver Value to its Customers.”
SAP APJ margins improve
Attributing SAP’s stronger margin performance to the company’s quick reactions to the economic downturn in the third quarter of 2008, McBride provided an update on the cost saving measures to date.
“We reacted early, adjusting quickly to the challenging market conditions. By effectively managing of our operating costs, we delivered a solid business performance in the first quarter of 2009. Globally SAP has reduced its workforce by approximately 2,200 positions – out of the 3,000 we have planned for 2009.”
“At the same time, we have successfully integrated Business Objects in record time – the third largest acquisition in the software industry – and are now reaping the benefits. The launch of our new solution, the SAP BusinessObjects Explorer, is yet another milestone in SAP’s successful integration of Business Objects. Delivering the most significant and largest combination of SAP and Business Objects technology to date, SAP BusinessObjects Explorer allows an intuitive new way for business users to navigate mountains of data at the ‘speed of thought’.”
“I am confident that we have the strength, agility and flexibility to thrive in the currently challenging market environment. SAP remains the clear global market leader for business software, with a market size nearly twice that of our nearest competitor.”
“We remain committed to delivering tangible business value to our 86,000 Customers globally, helping them to emerge from this current conditions even stronger than before,” she said.
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.