Walldorf — SAP AG (NYSE: SAP) today announced that after a preliminary review of its fourth quarter results, it expects fourth quarter software revenues to be approximately €930 million, representing a decrease of 3% compared to fourth quarter 2002 software revenues of €958 million. However, on a constant currency basis, fourth quarter software revenues were up by 4% compared to the fourth quarter of 2002. The software revenue results were achieved mainly through strong performances in the United States and Germany. Total revenues for the fourth quarter are expected to be approximately €2.2 billion, which is down 3% from the €2.3 billion reported in the same period last year. On a constant currency basis, fourth quarter total revenues were up by 4% compared to the fourth quarter of 2002.
Software revenues for the full year of 2003 are expected to be approximately €2.15 billion, representing a decline of 6% compared to the €2.29 billion reported for 2002. On a constant currency basis, however, full year software revenues were up by approximately 1% compared to 2002. Total revenues for the full year are expected to be slightly above €7.0 billion, which is 5% lower than total revenues of €7.4 billion reported for 2002. On a constant currency basis, total revenues for the full year were up by approximately 3% compared to 2002.
On the basis of these figures, SAP expects to significantly exceed its previously published target for pro forma operating margin and pro forma earnings per share. The Company now expects its 2003 pro forma operating margin to increase by approximately 4 percentage points to around 27 % (2002: 23%). The 2003 pro forma operating margin can be reconciled to the operating margin by adjusting for stock-based compensation (approximately €130 million) and acquisition-related charges (approximately €24 million).
SAP will provide further details of its 2003 preliminary results on January 22.