Just as impressive an improvement was achieved in earnings before interest and tax (EBIT), which grew by 36.1 percent from Euro 7.7 million to Euro 10.4 million. This means that the EBIT margin was 13.7 percent (previous year: 11.8 percent). Consolidated net income rose by 22.7 percent from Euro 5.5 million in the same quarter the previous year to Euro 6.7 million, so that earnings per share increased from Euro 0.15 to Euro 0.19. SAP SI Chief Financial Officer Joachim Müller: “We confirmed once again the leading position we hold as one of the most profitable IT service providers in Europe.”
In the core market Germany/Switzerland, SAP SI generated revenues of Euro 64.8 million in the period under review in spite of the economic and market development (which continued to be slow), 17.5 percent more than in the same quarter the previous year (Euro 58.2 million). The revenues recorded by SAP SI America developed very encouragingly too. At Euro 7.5 million, they were 13.8 percent higher than in the previous year – as much as 32.3 percent higher in constant currency. SAP SI Germany/Switzerland contributed Euro 10.0 million (previous year: Euro 6.7 million) to EBIT. SAP SI America reported earnings of Euro 0.4 million, compared with Euro 0.9 million in the previous year.
Consulting revenues in the SAP SI Group went up by 15.4 percent in the quarter to Euro 66.0 million, while revenues in the Hosting/Application Management business rose by as much as 29.7 percent to Euro 10.0 million. Profitability continued to increase in both segments as well. Orders on hand also developed encouragingly. At the end of the quarter, they totalled Euro 171 million compared with Euro 163 million on December 31 and Euro 142 million on March 31 of the previous year. The number of employees increased to 1,886 on March 31, 2004 (previous year: 1,666). Excluding the SLI and SPM acquisitions, the number of employees decreased slightly to 1,652.
Voluntary public offer made by SAP AG
On April 28, 2004, SAP AG published the voluntary public offer to purchase SAP SI shares that it had announced previously. After the announcement on March 23, 2004 of its decision to submit a tender offer SAP AG already made a further increase in the interest it held in SAP SI and revealed in the context of publication of the offer that it now owns 78.45 percent of the voting rights to SAP SI. SAP AG’s aim in acquiring up to 100 percent of the shares in SAP SI in return for payment of Euro 20.40 per SAP SI share to the outside shareholders is to make the strategic move of continuing to strengthen its consulting operations. The Executive Board of SAP SI supports the planned transaction and will be publishing a statement about the tender offer in the coming week.
SAP SI is expecting business in the core market Germany/Switzerland to develop slowly in the first half of 2004, but with an improvement in the second half. Chief Executive Officer Bernd-Michael Rumpf has emphasised the existing targets: “We are still working on the assumption that we will achieve organic growth of between eight and twelve percent as well as an EBIT margin of 14 to 15 percent in the fiscal year.”
Source: SAP SI