Number One in Supply Chain Management; Number Two in CRM
Singapore — – SAP AG, (NYSE: SAP), -the world’s leading provider of e-business software solutions, today announced its preliminary financial results for the fourth quarter and year ended December 31, 2001. For the year, sales increased 17% over 2000 to € 7.34 billion (2000: € 6.27 billion). Revenues contributed by Asia Pacific grew by nine percent to € 841 million. However, at constant currency rates, revenues would have increased by 17 percent.
“2001 was a challenging year for Asia Pacific businesses with slowing regional economies, exacerbated by the events of September 11. Despite the environment, we are pleased that SAP Asia Pacific continued to grow its business, doubling customer installations and extending our footprint into the Customer Relationship Management and Supply Chain Management space,” said Les Hayman, President & CEO of SAP Asia Pacific and SAP Board Member.
SAP maintained its lead in the region, where the company has nearly 30 percent market share in the ERM software market (Asia/Pacific ex Japan), almost six times larger than the next competitor (Source : IDC Asia/Pacific ERM report, 2000). SAP maintained momentum in 2001 by doubling its customer installations to 6,200.
Customers in the region who have selected solutions from mySAP.com :
mySAP Customer Relationship Management : Jones Lang LaSalle (Australia); FAW-Volkswagen (China), Haitian Machinery (China), Shanghai SVA (China), and Shanghai Mitsubishi Elevator (China); CLP Power (Hong Kong); Yodobashi Camera Co., Ltd (Japan); Cheil Jedang (Korea), LG Siltron (Korea); San Miguel (Philippines); and Siam City Cement (Thailand).
mySAP Supply Chain Management : Jinbei GM Automotive (China), Shanghai Mitsubishi Elevator (China); Tata Iron and Steel Company Limited (India); Hansol CSN (Korea), Hitachi Ltd. (Japan); Halla Climate Control Corporation (Korea); Mando Climate Control (Korea).
mySAP Product Lifecycle Management : Yankuang Mining Group (China), Shanghai General Motors (China), Shanghai Mitsubishi Elevator (China); CLP Power (Hong Kong); Bharat Heavy Electricals Limited (India), Delhi Metro Railways Corporation (India); PT Expan Nusantara (Indonesia), PT Toyota Astra Motor (Indonesia); Korea Hydro & Nuclear Power Co. Ltd (Korea), FuYu Manufacturing (Singapore), and Schneider Electric (Singapore).
Commenting on the focus in Asia Pacific for 2002, Hayman added, “SAP remains committed to Asia as a major growth area for the future. To reinforce this focus, SAP is strengthening its regional management team with the appointment of Hans-Peter Klaey to the newly created position of President, SAP Asia (comprising Korea, India, Greater China and Asean), based in Singapore. This appointment, together with Kiyotaka Fujii (SAP Japan) and Chris Bennett (SAP Australia & New Zealand) gives SAP one of the most senior, capable and experienced management teams in the IT Industry in Asia Pacific.”
Klaey has over 15 years experience in the IT Industry and joins the SAP Asia Pacific Management Team after five highly successful years at SAP. He joined SAP Switzerland in 1996 and held roles as Director Sales and Deputy MD until January 2000, when he was promoted to the position of Managing Director at SAP UK and Ireland. In 2001, Africa was also added to his list of responsibilities. During his term as MD for UK & Ireland, the region experienced growth of over 70% in both license and total external revenues, making the region one of the top four revenue-generating countries in SAP group of companies.
Global Fourth Quarter Results
In the fourth quarter of 2001, revenues rose 7% over the same period last year to € 2.32 billion (2000: € 2.16 billion). Fourth quarter 2001 operating income, before charges for stock-based compensation programs (STAR and LTI) and TopTier acquisition related charges, declined 8% to € 613 million (2000: € 668 million). Operating margin, excluding stock based compensation and TopTier acquisition related charges, was 26% (2000: 31%). Net income for the fourth quarter 2001, adjusted for the TopTier acquisition costs and the Commerce One impact, was € 379 million (2000: € 375 million) and earnings per share was € 1.21 (2000: € 1.19).
“SAP is alone in providing companies and organizations with a comprehensive approach to business efficiency,” said Hasso Plattner, Co-Chairman and CEO of SAP AG. “We continue to strengthen our offerings in CRM, SCM, ERP, and Marketplaces/Portals, spending on technology that unifies existing software investment and for optimum return.”
In the quarter, revenues in Europe, the Middle East and Africa (EMEA) region increased 6% to € 1.2 billion (2000: € 1.14 billion) and in the Asia-Pacific region (APA) revenues were up 8% to € 248 million (2000: € 230 million). Revenues in the Americas region rose 8% to € 864 million (2000: € 797 million); however, at constant currency rates, revenues in the Americas would have risen 13%.
“Our organization executed well in the fourth quarter, particularly given the very tough business environment. Europe was solid as anticipated, and the US exceeded our expectations and continued to gain market share,” said Henning Kagermann, Co-Chairman and CEO of SAP AG. “Our focus now is squarely on the customer, and we are initiating a stream of new products and services as well as enhanced solutions to create an irresistible software offering.”
Product revenues in the fourth quarter rose 5% to € 1.6 billion (2000: € 1.52 billion). License revenues were down 2% to € 1.03 billion (2000: € 1.06 billion). Consulting and training revenues rose 11% to € 572 million (2000: € 516 million) and 5% to € 117 million (2000: € 111 million), respectively.
The Company continued to take market share in sales of specific software solutions. In the fourth quarter of 2001, software revenues related to mySAP CRM (Customer Relationship Management) reached approximately € 196 million, representing 19% of total software license sales (€ 1.03 billion). Fourth quarter mySAP SCM (Supply Chain Management) related software revenues totaled around € 232 million, representing 23% of total software license sales. These figures include revenues from designated solution contracts, as well as figures from integrated solution contracts, which are allocated based on usage surveys.
Full Year Results
For 2001, sales increased 17% over 2000 to € 7.34 billion (2000: € 6.27 billion). Operating income, before charges for stock-based compensation and TopTier acquisition related charges, was up 18% to € 1.47 billion (2000: € 1.24 billion). License revenues for 2001 rose 5% to € 2.58 billion (2000: € 2.46 billion). Consulting revenues grew 27% to € 2.08 billion (2000: € 1.65 billion) and training revenue increased 16% to € 466 million (2000: € 401 million).
In 2001, sales in the APA region were up 9% to € 841 million (2000: € 769 million), in the EMEA region, revenues increased 23% to € 3.8 billion (2000: € 3.09 billion) and in the Americas, revenues rose 12% to € 2.7 billion (2000: € 2.41 billion).
Over the year, software revenues related to mySAP CRM (Customer Relationship Management) reached approximately € 445 million, representing 17% of total software license sales (€ 2.58 billion). Full year mySAP SCM (Supply Chain Management) related license revenues totaled around € 583 million, representing 23% of total software license sales. These figures include revenues from designated solution contracts, as well as figures from integrated solution contracts, which are allocated based on usage surveys.
With these results the Company established itself as number one in the market for SCM software and a fast growing number two in CRM software.
Outlook
SAP expects 2002 to be another challenging year, as software sales trends continue to be unsettled in a tough economic environment. For the full year, SAP anticipates revenue to grow by around 15%, with stronger software license sales coming in the second half, in line with past quarterly developments. For the whole of 2002, SAP also expects its operating margin excluding stock-based compensation and TopTier acquisition related charges to improve at least one percentage point over the 20.0% achieved in 2001. SAP anticipates that the improvement will become more evident in the second half as software license performance improves and the Group benefits from ongoing cost curtailment measures.
2001 Highlights
SAP extends its position as the world’s leading provider of e-business software solutions. Key contracts in the fourth quarter include Air Products, Graybar Electric, Nike, Petrobras and PricewaterhouseCoopers in the Americas; in EMEA Danone, Deutsche Post, EDF-GDF, Hoffmann La Roche and Unilever; and in Asia/Pacific CLP Power HongKong, Mitsubishi Heavy Industries, Samsung, and Yamaha among others.
SAP announced mySAP Technology for open integration at TechEd 2001 in Los Angeles. mySAP Technology consists of three elements: Web Application Server, exchange infrastructure and portal infrastructure. This technology reduces the customer’s cost of ownership and increases flexibility by allowing collaboration across business processes and among users – even beyond company boundaries – on one reliable Web infrastructure.
SAP created a new company, SAP Portals, dedicated to developing and marketing comprehensive, open-enterprise portal and business intelligence products. SAP Portals combines SAP’s existing efforts in enterprise portals with the technology of TopTier Software, a leading provider of enterprise information portal software, which was acquired by SAP in April.
SAP concluded additional investment in Commerce One in August. SAP and Commerce One remain strategic partners and are closely engaged with development, sales and support for MarketSet, the platform for marketplaces. The relationship continues to grow and strengthen especially as it relates to mySAP Technology and in particular regarding exchange-based business-to-business integration among business partners. SAP currently owns around 20% of Commerce One.
SAP began shipping the newest version of mySAP Customer Relationship Management to customers worldwide in August. Among other solution highlights, SAP delivered mySAP CRM with unparalleled breadth and depth of functionality. mySAP CRM serves as a platform to openly integrate with either SAP or non-SAP business applications such as supply chain management, product lifecycle management and human lifecycle management providing flexibility that meets each businesses’ unique needs.
SAP converted its preference shares into ordinary shares moving to a one-share, one-vote standard. This provides the Company with greater flexibility and brings SAP more in-line with international corporate governance practices.
SAP welcomed more than 20,000 attendees to its three SAPPHIRE customer conferences in Lisbon, Orlando and Brisbane. In addition, over 21,000 people followed these conferences on the Internet at http://www.sap.com/sapphire
