SAP ANZ Announces 2005 Second Quarter and Half Year Results

Retail, Government, Mining and Resources Sectors Deliver SAP Growth; Continued Momentum in SMB Sector and SAP NetWeaver Integration Solutions

SydneySAP Australia and New Zealand (ANZ) today announced financial results for the second quarter and new business in the first half of 2005, which ended on June 30, 2005. In Q2, the company achieved a total product revenue growth rate of 22% across Australia and New Zealand, compared to the same period last year.

SAP increased its share of the local market for business applications in the second quarter; key business trends included momentum in the retail, government, mining and resources industries, rapid growth throughout small to midsize business (SMB) and successful execution against the company’s application infrastructure strategy with SAP NetWeaver. For further information about SAP’s success in the SMB sector during the second quarter and first half, refer to today’s announcement entitled, “Small and Midsize Companies Across Australia and New Zealand Chose SAP.”

SAP’s performance in Australia and New Zealand is consistent with the positive full year results, released by SAP AG on 21st July, 2005. Globally, total revenues for the second quarter were €2.02 billion, which was an increase of 13% compared to the same period last year. At constant currencies1, global software revenues increased 16% year-over-year.

Significant business in the Public Sector included the Department of Defence, which purchased SAP Business Suite. SAP Australia and New Zealand closed major deals with new and existing customers during the first half of the current financial year, including retailers Franklins, Coles-Myer Limited and PlayCorp Group of Companies (incorporating Everlast, NRL, AFL and Deborah Hutton). In New Zealand, SAP closed new business with New Zealand Lotteries and The Farmers Trading Company.

SAP ANZ grew its SMB division by 18% during the first half of 2005. New customers include General Pants, Wagners Investments and Orion Laboratories. SAP and partner, Supply Chain Consulting, beat Intentia to secure a mySAP All-in-One contract with Rusty, a surf wear and apparel company.

“The public sector, retail, mining and resources industries contributed significantly to a successful financial quarter for SAP Australia and New Zealand, but we experienced growth across the board,” said Geraldine McBride, Chief Executive Officer and Managing Director, SAP Australia and New Zealand. “The clarity of our strategic vision, continued investment in research and development, focus on customers and the SAP Best Practice approach to the business requirements of vertical industries continue to resonate with new and existing customers in this market.”

Record Investment in the Federal and Public Sector

In total, the Australian Federal Government invested more in SAP technology during the first half of 2005, than it has in any previous twelve month period. The major focus for this sector is on enterprise resource planning (ERP) upgrades, customer relationship management (CRM), collections and disbursement applications and SAP NetWeaver.

SAP closed deals for ERP upgrades at the Commonwealth Rehabilitation Services, Health Insurance Commission, IP Australia, Department of Communications and Information Technology and the Arts and the Department of Family and Community Services. The Australian Trade Commission, Australian Tax Office and Department of Employment and Workplace Relations signed up with SAP for increases in user licenses.

SAP continued its close association with the Queensland Premier Beattie’s Smart State initiative; the company has sponsored ten PhD scholarships. The scholarships are available to prospective PhD students at the School of Information and Electrical Engineering at Queensland University of Technology (QUT) to the value of $25,000 per year for each student. Successful candidates will be invited to gain hands-on experience with SAP engineers at the SAP Research Centre Brisbane.

Continued Growth in Retail

The Australian discount retailer, Franklins, extended its relationship with SAP when it committed to the implementation of the SAP Multi-site Workforce Deployment solution. Franklins recently completed an enterprise wide implementation of the SAP For Retail solution.

A major competitive win over Oracle at The Farmers Trading Company in New Zealand, completed during the first half, will see SAP implement the SAP for Retail solution in a project designed to improve core retail, supply chain execution, warehouse management and financial processes across the enterprise.

A current project at Coles-Myer Limited, closed in the first half of 2005, will see SAP replace PeopleSoft’s enterprise wide HR implementation. The HR system will manage payroll at Coles-Myers Limited for over 186,000 employees.

In other deals closed during the first half, New Zealand Lotteries selected mySAP ERP to meet its business requirements for finance, retailer management, stock management and distribution, human resources and analysis and reporting functions. New Zealand Lotteries selected SAP over Oracle on the basis of the SAP Best Practice technology, which ensured a tight fit with its existing business processes.

Leveraging SAP NetWeaver in Heterogeneous Environments

SAP successfully executed on its SAP NetWeaver strategy, providing new application integration and portal capabilities to a wide range of clients across Australia and New Zealand. Typically, businesses are deploying SAP’s powerful integration broker, SAP Exchange Infrastructure (XI), to enable greater efficiencies in business processes that span heterogeneous applications and to deliver information to users via the SAP Enterprise Portal.

Examples during the quarter include BHP Billiton, which is using SAP Exchange Infrastructure to integrate SAP NetWeaver Enterprise Portal with numerous heterogeneous systems in its Carbon Steel Materials division. In New Zealand, SCA Hygiene (previously part of Carter Holt Harvey) replaced two instances of WebMethods with SAP NetWeaver XI to improve integration between its logistics and inventory systems.

An additional area of SAP NetWeaver activity has been in relation to Java development infrastructures, which allow organisations to create Java applications more quickly. SAP has also seen impressive take up of SAP NetWeaver Master Data Management, a solution which ensures cross system data integrity in complex business computing environments.

Strengthening Relationships in Australia’s High Growth Mining and Resources Sector

In the mining and resources sector, SAP responded to increasing demand for systems that enable resources companies to optimise their cost base and improve supply chain and supplier management processes.

SAP for Mill Products, SAP’s industry solution targeting steel and paper manufacturers, provided additional revenue growth due to rich application functionality and ability to deliver process efficiencies. SAP closed deals with new and existing customers in the mining and resources sector, including Rio Tinto, BHP Billiton and Bluescope Steel and Zinifex.