download the press conference presentation
TRANSCRIPT
SAP AG Q2 and H1 2003 Preliminary Results Release
New York, July 17, 2003
Werner BrandtCFO, SAP AG
SAP AG 2003, Q2 2003 preliminary results release, IR 3
Safe Harbor Statement
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP’s future financial results are discussed more fully in SAP’s filings with the U.S. Securities and Exchange Commission (“SEC”), including SAP’s most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.
SAP AG 2003, Q2 2003 preliminary results release, IR 4
Agenda
Outlook 2003
2nd Quarter 2003 Financials
First Half 2003 Financials
SAP AG 2003, Q2 2003 preliminary results release, IR 5
Q2 2002€ millions
Q2 2003€ millions
License revenues
%
Total revenues
Net income- Margin as a % of sales
Operating income - Margin as a % of sales
Income before income taxes
Key Figures – 2nd Quarter 2003
Earnings per share (in €)
- Margin as a % of sales
* percentage points
336 21
347
21913
0.71
21
1,638
431
1,778
320
-107
18
-232na
-0.74
na
496
-8
63*
na
nana
na
na
-13
340
2**
-5**
** % currency adjusted – actuals 2003 converted with the exchange rates of 2002
SAP AG 2003, Q2 2003 preliminary results release, IR 6
Q2 2002€ millions
Q2 2003€ millions
* percentage points
EBITDA(2)
- Margin as a % of sales
Pro forma Operating income excl. stock-based comp. and acquisition-related charges(1)
Key Figures – 2nd Quarter 2003
- Margin as a % of sales
na 37% na Effective tax rate
Pro forma EPS excluding stock-based compensation, acquisition-related charges, and impairment-related charges(1)
620.81 0.49
324 20
6* 18
388
24
%
377 4392 3* 21 24
SAP AG 2003, Q2 2003 preliminary results release, IR 7
Q2 2003€ millions
Q2 2002€ millions %
Group Sales by Revenue Type – 2nd Quarter 2003
Q2 2002% of revenue
Q2 2003% of revenue
Product 1,091 61-21,064 65
Maintenance 595 336633 39License 496 28-13431 26
660545
3731
-16-12
554479
3429
115 65
Other revenue
Total
Consulting Service
Training
20
1,638
75
27
1,778
-26
-8
-35
1 2
** % currency adjusted – actuals 2003 converted with the exchange rates of 2002
%currencyadjusted
7**
18**-5**
-7**-3**
-13**
2**
-28**
SAP AG 2003, Q2 2003 preliminary results release, IR 8
Maintenance Analysis* – 2nd Quarter 2003 – part I
** incl. sequential currency impact– in € millions
€ 600
€ 610
€ 620
€ 630
€ 640
€ 590
Q2 02 Q3 02 Q4 02 Q1 03 Q2 03
623**
644**
€ 580
595*
603*
628*
608*
633*
* actuals – in € millions
SAP AG 2003, Q2 2003 preliminary results release, IR 9
One time Effects
€ 608mill.
17% Maint. on SW Q1
Q1 2003 Q1 2003run rate
Calculated Maintenance Q2
Currency
SalesAllowance
Othereffects
€ 633mill.
Q2 2003
Maintenance Analysis – 2nd Quarter 2003 – part II
Transition Maintenance Revenue Q1 – Q2 2003
SAP AG 2003, Q2 2003 preliminary results release, IR 10
Q2 2002€ millions
Q2 2003€ millions %
Gross Margin Analysis – 2nd Quarter 2003
Product revenueCost of product
Product gross margin in % -205 -8-189
82 81
1,091 -21,064
1*
* in percentage points
Service revenueCost of service
Service gross margin in % -480 -14-411 660 -16554
2726 -1*
6163
1,751 -81,618 -685 -12-600
2*
Product / Service revenueProduct / Service cost
Gross margin in %
SAP AG 2003, Q2 2003 preliminary results release, IR 11
Q2 2003€ millions
Q2 2002€ millions
Cost Analysis – 2nd Quarter 2003 – part I
Total costs Total revenues
-1,2981,638
* In percentage points
% yoy
Research & Developm.as % of sales
Sales & Marketingas % of sales
3
-8
-358
-99
0 -100
22
56
0
-3*
1*
0*
-24115
-438
-231
-96
13
25-18
4 2*
General & Admin.as % of sales
Other income/expensesas % of sales 0
% yoyexcl. SBC/AC
-12
-100
-21
2
-1,458 -11 1,778 -8
-14
SAP AG 2003, Q2 2003 preliminary results release, IR 12
Q2 2003€ millions
Q1 2003€ millions
Cost Analysis – 2nd Quarter 2003 – part II
Operating Expenses
SBC & AC
Operating Expenses excl. SBC&AC
Q2 2002€ millions
-1,222-1,298 -1,458
648 4
-1,216-1,250 -1,454
% seq.
3
6
% yoy
-14
-11
-6
-3
% atconst. curr.
SAP AG 2003, Q2 2003 preliminary results release, IR 13
06/2003 12/2002
Worldwide Headcount* as of June 30, 2003
seq. Q2/03
Group
EMEA
Americas
APA
156
-25176
307
* in FTE
net new hires
28,961
19,379
6,0973,485
Q22003307
R&D
Service & Support
Sales & Marketing
G&A
41
67
3
1968,391
12,473
5,108
2,989
28,797
19,235
6,3113,251
7,966
12,753
5,067
3,011
Q12003-143
03/2003
28,654
19,223
6,1223,309
8,195
5,041
2,986
yoy Q2/03
-75
-544226
-393
-715
-180
-117
619
06/2002
29,354
19,454
6,6413,259
7,772
13,188
5,288
3,106
12,432
SAP AG 2003, Q2 2003 preliminary results release, IR 14
Agenda
Outlook 2003
2nd Quarter 2003 Financials
First Half 2003 Financials
SAP AG 2003, Q2 2003 preliminary results release, IR 15
H1 2002€ millions
H1 2003€ millions
License revenues
%
Total revenues
Net income- Margin as a % of sales
Operating income - Margin as a % of sales
Income before income taxes
Key Figures – First Half 2003
Earnings per share (in €)
- Margin as a % of sales
* percentage points
336 20
658
40513
1.31
21
3,158
783
3,436
506
20
15
-167na
-0.53
1
898
-8
265*
3190
nana
na
20*
-13
638
1**
-5**
** % currency adjusted – actuals 2003 converted with the exchange rates of 2002
SAP AG 2003, Q2 2003 preliminary results release, IR 16
H1 2002€ millions
H1 2003€ millions
* percentage points
EBITDA(2)
- Margin as a % of sales
Pro forma operating income excl. stock-based comp. and acquisition-related charges(1)
Key Figures – First Half 2003
- Margin as a % of sales
na 38% naEffective tax rate
Pro forma EPS excluding stock-based compensation, acquisition-related charges, and impairment-related charges(1)
711.45 0.84
562 23
6* 16
692
22
%
617 20740 5* 18 23
SAP AG 2003, Q2 2003 preliminary results release, IR 17
Shareholders‘ Equity & LiabilitiesAssets
Consolidated Balance Sheet as of June 30, 2003
Other assets
Liquid assets
Inventories/Accountsreceivable
Fixed assets
Other liabilities
Deferred income
Shareholders‘ equity
TOTAL TOTAL
Dec 31, 02Jun 30, 03
436
1,782
1,925
1,588
5,731
in € millions
Reserves, accrued liabilities
Minority interest
Jun 30, 03
699
833
3,014
5,731
1,130
55
Dec 31, 02
490
1,239
2,242
1,639
5,610
758
362
2,872
1,562
56
5,610
SAP AG 2003, Q2 2003 preliminary results release, IR 18
Dec 31, 02
H1 2002
Jun 30, 03
H1 2003
%
Balance Sheet & Cash Flow Analysis
* percentage points** days
Operating Cash Flow CapExFree Cash FlowFree Cash Flow as a % of Revenue
739 9807 -126 -29-90 613 17717
18% 5*23%
in € mill.
DSO -7**80**
%
87**
SAP AG 2003, Q2 2003 preliminary results release, IR 19
Agenda
License Revenue Analysis
1st Quarter 2003 Financials
Outlook 2003
SAP AG 2003, Q2 2003 preliminary results release, IR 20
Outlook 2003
SAP continues to expect pro forma earnings per share for 2003, excluding stock-based compensation, acquisition-related charges and impairment-related charges, to be in the range of €3.45 per share to €3.60 per share. The Company has slightly increased its target for pro forma operating margin, excluding stock-based compensation and acquisition-related charges. Previously, the Company expected its 2003 pro forma operating margin to increase by around 1 percentage point compared to 2002. The Company now expects its 2003 pro forma operating margin to be between 1 and 1.5 percentage points higher than the level achieved in 2002. While the Company continued to not provide revenue expectations, it expects to achieve its pro forma operating margin and pro forma earnings per share targets through continued market share gains and cost containment amid the current business environment and business seasonality in line with historical patterns.
SAP AG 2003, Q2 2003 preliminary results release, IR 21
Outlook 2003 cont‘d
Management does not provide its guidance on operating margin and earnings per share based on US GAAP measures because these measures include expenses like stock based compensation, impairment related charges and acquisition related charges. Management deems these expenses as either not being meaningful to fully assess the financial performance of our core operations or as highly dependent on the movement of SAP’s share price, or the share price of companies we acquire or in which we invest.
Léo ApothekerPresident Global Field Operations,Member of the Executive BoardSAP AG
SAP AG 2003, Q2 2003 preliminary results release, IR 23
License Revenue by Region – 2nd Quarter 2003
License Revenue Q2 2003: €431 mill.-13%* | -5%**
of which US €86 m-14%* | +6%**
Americas €112 m-12%* | +9%**
of which Japan €25 m-26%* | -12%**
APA €58 m0%* | +16%**
EMEA €261 m-16%* | -15%**
of which Germany €97 m-4%* | -4%**
* y-o-y growth ** % currency adjusted – actuals 2003 converted with the exchange rates of 2002
SAP AG 2003, Q2 2003 preliminary results release, IR 24
Group Sales by Region – 2nd Quarter 2003
Total Revenue Q2 2003: €1,638 mill.-8%* | +2%**
of which US €397 m-15%* | +5%**
Americas €506 m-15%* | +6%**
of which Japan €91 m-23%* | -10%**
APA €190 m-9%* | +5%**
EMEA €942 m-3%* | -2%**
of which Germany €392 m-1%* | -1%**
* y-o-y growth ** % currency adjusted – actuals 2003 converted with the exchange rates of 2002
SAP AG 2003, Q2 2003 preliminary results release, IR 25
Customer Wins in Q2 2003
AMERICAS Colgate-Palmolive Fender Sony Pictures Univ. of Cincinnati Wrigley‘s
EMEA Allied Irish Bank European Central Bank Ferrero Swisscom Telecom Italia Vattenfall
ASIA / PACIFIC Australia Department of Defense J-Oil Mills Sharp Shougang Toyota Tsusho
SAP AG 2003, Q2 2003 preliminary results release, IR 26
Highlights Q2 2003
Continued license growth in the US (currency adjusted)
Strong results from APA – specifically China SAPPHIRE Orlando - demonstration of clear
leadership with the mySAP CRM 4.0 Launch, SAP NetWeaver, SAP xApps
SMB momentum with key partnerships announced and US launch of Business One
SAP AG 2003, Q2 2003 preliminary results release, IR 27
Market Conditions Q2 2003
Decreasing average deal size Higher volume of deals Sales team better aligned to exploit all opportunities
at lower cost Shifting competitive environment
Creates price pressures Continued uncertainty in the market
SAP AG 2003, Q2 2003 preliminary results release, IR 28
US – Relative Market Shares
Source: CMI Analysis based on Company Data and Financial Analysts Estimates* Forecast by Company Data and Financial Analysts (I2, JDE, PSFT, SEBL)** Fiscal year is not calendar year - Comparison based on most recent quarter (e.g. SAP Q1 vs. Oracle Q3)
Q2 2000-Q1 2001
Q3 2000-Q2 2001
Q4 2000-Q3 2001
Q1 2001-Q4 2001
Q2 2001-Q1 2002
Q4 2001-Q3 2002
Q1 2002-Q4 2002
Q2 2002-Q1 2003
Q3 2001-Q2 2002
SAP
Siebel*Oracle **PeopleSoft*
I2*
JDE**
Q3 2002-Q2 2003E
0%
5%
10%
15%
20%
25%
30%
35%
2526
30
25 25
20
8
6 65 5
67 7
8 8
20
1918
17 1819
23 23
21
2320
2121
242525
12
16 16
1410
87
6 6
2020
1816
14
2423
2221
181818
5
8
1917
2019
31
(rolling 4 quarters; based on license revenues)
SAP AG 2003, Q2 2003 preliminary results release, IR 29
mySAP SCM and mySAP CRM Momentum 2003
mySAP SCM as % of i2 & Manugistics
300%
200%
100%
Q1/02 Q2/02 Q3/02 Q4/020%
Q1/03 Q2/03
mySAP CRM as % of Siebel
0%
20%
40%
60%
80%
100%
163%140%113%
188%
241% 231%
41%48% 54%
67%
86% 96%
Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03
SAP AG 2003, Q2 2003 preliminary results release, IR 30
Industry Expertise
Customers want more than CRM or SCM – they want solutions for their unique business needs
mySAP CRM 4.0 – more than 280 end-to-end industry-specific processes Leasing for the High Tech industry Basel ll and IAS for Banking industry Maintenance repair and overhaul for Aerospace industry Sarbanes-Oxley for Financial Services industry Service parts management for Automotive and heavy equipment
manufactures RFID for smart shelves for the Retail industry
SAP AG 2003, Q2 2003 preliminary results release, IR 31
License Revenue Analysis – by Industry Q2 2003
* Compared to FY 2002
Service Industries25% | 0%*
Financial Services10% | 2%*
Consumer Industries18% | 0%*Discrete Industries
22% | 1%*
Process Industries15% | -5%*
Public Services10% | 2%*
Henning KagermannCEOSAP AG
SAP AG 2003, Q2 2003 preliminary results release, IR 33
First Half 2003 Business Environment I
Customer spending environment remains challenging, but SAP benefits through market share gains
Deal sizes continue to decline as customers prefer smaller deals with a quick ROI, providing advantages for SAP
SAP’s integration platform, SAP NetWeaver, combined with open standards help to integrate isolated projects, ensure interoperability of the systems and provides lower TCO
Pressure on CIOs to reduce TCO leads to: Consolidation and simplification of IT landscapes (e.g. Novartis) Strategic projects with SAP (e.g. Ford/Caterpillar etc.)
SAP AG 2003, Q2 2003 preliminary results release, IR 34
First Half 2003 Business Environment II
Operational efficiency – one of the top priorities of CEOs Demand for ERP solutions remains strong, in particular in EMEA
and APA Announcement of mySAP ERP was well received in the market
Recent industry consolidation increases customer confusion in the short term
Competitors discount heavily with pricing pressure on software licenses and consulting
SAP AG 2003, Q2 2003 preliminary results release, IR 35
Customer Feedback
“The successful implementation in 2001 of our new Enterprise Resource Planning System, SAP, has provided a very effective tool for managing changes in demand.“
“When faced with a choice between stand-alone systems or a suite solution, the added value, scalability, and flexibility of mySAP Business Suite made SAP the clear choice.“
Peter Sany, CIO, Novartis
Sir John Rose, Chief Executive, Rolls-Royce (2002 annual report)
SAP AG 2003, Q2 2003 preliminary results release, IR 36
Strategic Focus in 2003
In a challenging market environment, SAP is focused on:
Improving productivity
Increasing market share
Adapting to the new environment
SAP AG 2003, Q2 2003 preliminary results release, IR 37
Second Quarter 2003 Summary
Pro forma operating income increased 20% representing a strong performance given an 8% revenue decline and more than 300 new employees
Software revenues down 5% currency adjusted – SAP continued to gain market share
Deal size was down significantly, but SAP signed more deals with lower cost of sales
Deal size based on order entry shifted significantly >€3 mill. 27% (Q2 2002: 42%) <€1 mill. 44% (Q2 2002: 33%)
Strengthened long-term partnerships with clients
SAP AG 2003, Q2 2003 preliminary results release, IR 38
0%
10%
20%
30%
40%
50%
60%
SAP*
Siebel*
Oracle **
PeopleSoft*
I2*
JDE**
36%
20%20%19%
41%39%
37%
9% 10% 10%
13% 12%
8%10%
12%17% 16% 17% 16%
19%
6% 5% 4% 4%
Total license revenue - Relative Market Shares (rolling 4 quarters; based on license revenues)
43%45%
47%
51%
19% 18% 17%15%16% 15% 15% 14%
12% 12% 12%
11%6% 5%
4% 3%4% 5%5% 5%
Q2 2000-Q1 2001
Q3 2000-Q2 2001
Q4 2000-Q3 2001
Q1 2001-Q4 2001
Q2 2001-Q1 2002
Q3 2001-Q2 2002
Q4 2001-Q3 2002
Q1 2002-Q4 2002
SAP is still gaining market share from key competitors
54%
13%14%12%
3%
5%
Q2 2002-Q1 2003
55%
12%14%
3%
5%11%
Q3 2002-Q2 2003E
Source: CMI Analysis based on Company Data and Financial Analysts Estimates* Forecast by Company Data, Financial Analysts (SEBL, PSFT, I2, JDE) and latest SAP internal estimate** Fiscal year is not calendar year - Comparison based on most recent quarter (e.g. SAP Q1 vs. Oracle Q3)
SAP AG 2003, Q2 2003 preliminary results release, IR 39
Source: NFO Infratest
Overall Satisfaction with SAP
6.67.2 6.97.0 6.7
7.57.07.1 7.0
7.5 7.16.9
GLOBAL Asia/Pacific The Americas Europe/MiddleEast/Africa
2000 2001 H1 2003
Customer Satisfaction Survey H1 2003
7.2
2002
7.17.6
7.1
SAP AG 2003, Q2 2003 preliminary results release, IR 40
SAP Blueprint for Sustainable Success
EnterpriseServices
Architecture
23 industry solutions
New releases:mySAP CRM 4.0and mySAP SCM 4.0
New user interface for mySAP ERP announced
First demo of Master Data Management
Adaptive ComputingInfrastructure announced
SAP AG 2003, Q2 2003 preliminary results release, IR 41
Shared Quality Commitment
Joint Business Solutions(e.g. Midmarket)
SAP NetWeaver & SAP xApps Partner Programs
Joint TCO Reduction Program
The Best Partner to Deliver
SAP AG 2003, Q2 2003 preliminary results release, IR 42
2003 Looking Ahead
Economic environment remains challenging until year-end Confusion in the market due to industry consolidation leads to
increased price pressure in the short-term, but SAP should benefit in the medium-term
2003 pro forma EPS target confirmed; pro forma operating margin target increased slightly
Comprehensive product portfolio combined with strong technology offering enables SAP to capture a larger “share of wallet”
Further industry focus will enhance SAP’s leading position SAP xApps provide additional opportunities for cross-functional &
vertical solutions
SAP AG 2003, Q2 2003 preliminary results release, IR 43
Market Shares by Industry in 2002*
*Based on product revenues (license & maintenance) /preliminarySources: SAP Analysis 2003, IDC 2002 & 2003, Company filings
Discrete Process Consumer Services Financial Serv.
12%
8.4
31%
3.3
15%
4.9
20%
5.8
14%
2.3
20%
1.9
Public Serv.
SAP othersTotal
$26.5 bn
Ø SAP 17.5%
SAP AG Q2 and H1 2003 Preliminary Results Release
New York, July 17, 2003
SAP AG 2003, Q2 2003 preliminary results release, IR 45
Appendix
APPENDIX
SAP AG 2003, Q2 2003 preliminary results release, IR 46
Q2 2003€ millions
Q2 2002€ millions
Cost Analysis – 2nd Quarter 2003 – part I
Total costs Total revenues
-1,2981,638
* In percentage points
% yoyincl SBC/AC
Research & Developm.as % of sales
Sales & Marketingas % of sales
3
-8
-358
-99
0 -100
22
56
0
-3*
1*
0*
-24115
-438
-231
-96
13
25-18
4 2*
General & Admin.as % of sales
Other income/expensesas % of sales 0
% yoyexcl. SBC/AC
-12
-100
-21
2
-8
-441
-225
-101
-1,250
-348
-88
0
-229
incl SBC/AC
incl SBC/AC
excl. SBC/AC
excl. SBC/AC
-1,458 1,778
-1,454 -11-8
-14
SAP AG 2003, Q2 2003 preliminary results release, IR 47
Q2 2003*% of
license revenue
Q1 2003*% of
license revenue
License Revenue Analysis – by Order Entry
% mySAP Business Suite
% new customers mySAP BS
% new customers R/3, etc.
% new customers TOTAL
* Based on order entry
-4
3
-9
0
82%
32%
10%
28%
seq. in percentage
points
86%
29%
19%
28%
1
-2
-4
-2
YoY in percentage
points
Q2 2003 Q2 2003
SAP AG 2003, Q2 2003 preliminary results release, IR 48
0%
10%
20%
30%
40%
50%
60%
mySAP FI / HR
mySAP SCM
mySAP CRM
mySAP SRM /BI / Portals /MarketsmySAP PLM
Linie 6
36%
22%22%23%
39%38%38%
15%16%14%
8%
13%
7%7%7%
17% 18% 19%20%
22%
rolling last 4 quarters; as a % of license revenues
40% 39%
20% 21%
21% 21%
11% 12%
7% 7%
Q1 2001-Q4 2001
Q2 2001-Q1 2002
Q3 2001-Q2 2002
Q4 2001-Q3 2002
Q1 2002-Q4 2002
License Revenue Analysis – by Solution
Q2 2002-Q1 2003
Q3 2002-Q2 2003
39%
21%
21%
12%
7%
SAP AG 2003, Q2 2003 preliminary results release, IR 49
License Revenue Analysis – by Solution Q2 2003
Total License Revenue Q2 2003 : € 431 mill.
* Of license revenue** Y-o-Y growth in percentage points
mySAP SCM20%* (-1**)
mySAP Financials /mySAP HR41%* (+1**)
mySAP CRM20%* (0**)
mySAP BI/ mySAP Enterprise Portal/mySAP SRM/ Marketplaces11%* (-1**)
mySAP PLM8%* (+1**)
SAP AG 2003, Q2 2003 preliminary results release, IR 50
Q2 2003as % ofrevenue
Q2 2003€ millions
Q1 2003€ millions
License Revenue Analysis – by Solution Q2 2003
mySAP SCM
mySAP Financials /mySAP HR
mySAP PLM
mySAP BI / mySAP Enterprise Portal /mySAP SRM / Marketplaces
mySAP CRM 85
33
49
178
86
74
33
44
172
79
-16
-3
-16
-11
-17
20
8
11
41
20
Q1 2003as % ofrevenue
21
7
15
33
24
YoY in %
Q2 2003
15
0
11
4
9
seq. in %
Q2 2003
SAP AG 2003, Q2 2003 preliminary results release, IR 51
mySAP SCM as % of I2* and Manugistics** mySAP CRM as % of Siebel*
License Revenue breakdown by solution (rolling 4 quarters; based on License Revenues)
SCM & CRM – Relative Market Shares
0%
50%
100%
150%
200%
86%
163%
140%
113%
41%37%48%
54%
188%
241%
67%
86%
Q1 2001-Q4 2001
Q2 2001-Q1 2002
Q3 2001-Q2 2002
Q4 2001-Q3 2002
Q1 2002-Q4 2002
Q2 2002-Q1 2003
231%
96%
Q3 2002-Q2 2003E
250%
Source: CMI Analysis based on Company Data and Financial Analysts Estimates* Forecast by financial analysts (I2, SEBL)** Fiscal year is not calendar year - Comparison based on most recent quarter (e.g. SAP Q1 vs. MANU Q4)
SAP AG 2003, Q2 2003 preliminary results release, IR 52
0%
5%
10%
15%
20%
25%
30%
Service
Discrete
Process
Consumer
Financial
Public
22%
24%
27%26%
15%15%
7% 7%
21%
22%
7%7%
rolling last 4 quarters; as a % of license revenues
26%25%
21% 21% 21%
20%19%
17%19% 19%
8% 8%
7%8%
Q1 2001-Q4 2001
Q2 2001-Q1 2002
Q3 2001-Q2 2002
Q4 2001-Q3 2002
Q1 2002-Q4 2002
License Revenue Analysis – by Industry
24%
19%
8%
8%
Q2 2002-Q1 2003
26%
22%
20%
19%
7%
8%
19%
20%
22%
24%
9%
7%
Q3 2002-Q2 2003
SAP AG 2003, Q2 2003 preliminary results release, IR 53
License Revenue Analysis – by Industry Q2 2003
* Compared to FY 2002
Service Industries25% | 0%*
Financial Services10% | 2%*
Consumer Industries18% | 0%*Discrete Industries
22% | 1%*
Process Industries15% | -5%*
Public Services10% | 2%*
SAP AG 2003, Q2 2003 preliminary results release, IR 54
License Revenue by Region – First Half 2003
License Revenue H1 2003: €783 mill.-13%* | -5%**
of which US €157 m-8%* | +13%**
Americas €200 m-8%* | +16%**
of which Japan €60 m+22%* | +38%**
APA €117 m+14%* | +30%**
EMEA €466 m-19%* | -18%**
of which Germany €183 m-9%* | -9%**
* y-o-y growth ** % currency adjusted – actuals 2003 converted with the exchange rates of 2002
SAP AG 2003, Q2 2003 preliminary results release, IR 55
Group Sales by Region – First Half 2003
Total Revenue H1 2003: €3,158 mill.-8%* | +1%**
of which US €772 m-17%* | +2%**
Americas €974 m-17%* | +4%**
of which Japan €202 m-2%* | +10%**
APA €388 m-2%* | +12%**
EMEA €1,796 m-4%* | -2%**
of which Germany €755 m-2%* | -2%**
* y-o-y growth ** % currency adjusted – actuals 2003 converted with the exchange rates of 2002
SAP AG 2003, Q2 2003 preliminary results release, IR 56
Q2 2002€ millions
Q2 2003€ millions %
Pro forma operating income excl. stock-based compensation and acquisition-related charges(1)
Key Figures – 2nd Quarter 2003 Analysis – Part I
Operating income as reported under US GAAP
Acquisition-related chargesStock-based compensation
Finance incomethereof impairment-related charges
324 20388
320 6340
-3 na42 7 -146
na-4555
EBITDA(2)
Operating income as reported under US GAAP
Depreciation & amortization
377 4392
320 6340 57 -952
na-390-2
LTI 2000/STAR -18 na41 Settlement of stock-based compensation prog. 15 -931
SAP AG 2003, Q2 2003 preliminary results release, IR 57
Q2 2002€ millons
Q2 2003€ millions %
Key Figures – 2nd Quarter 2003 Analysis – Part II
Pro forma EPS excluding stock-based compensation, acquisition-related charges, andimpairment-related charges(1)
Earnings per share (in €)as reported under US GAAPStock-based compensationAcquisition-related chargesImpairment-related charges
0.49 620.81
na-0.74 0.71na-0.01 0.09
00.01 0.01-1001.23 0.00
Pro forma Net income excluding stock-based compensation, acquisition-related charges, andimpairment-related charges(1)
Net income as reported under US GAAPStock-based compensation, net of tax Acquisition-related charges, net of taxImpairment-related charges, net of tax
155 62251
na-232 219na-227-294 3-99385 2
SAP AG 2003, Q2 2003 preliminary results release, IR 58
Pro forma information
(1) SAP has provided information in 2002 and 2001 using pro forma measures on a consolidated basis and released guidance based on these measures for 2003. Management believes that those pro forma measures provide supplemental meaningful information to the investor to fully assess our financial performance of the core operations. Management excludes stock-based compensation expenses because we have no direct influence over the actual expense of these awards once we enter into Stock-Based Compensation Plans.Eliminated expenses in the pro forma measures are defined as follows:- Acquisition-related charges include amortization of intangible assets acquired in acquisitions - Impairment-related charges include other than temporary impairment charges on minority equity investments. - Stock-based compensation includes expenses for stock-based compensation as defined under US GAAP (STAR and LTI 2000) as well as expenses related to the settlement of stock-based compensation plans in the context of mergers and acquisitions.However these measures should be considered in addition to, and not as a substitute for, or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with generally accepted accounting principles. The pro forma measures used by us may be different from pro forma measures used by other companies.
SAP AG 2003, Q2 2003 preliminary results release, IR 59
Pro forma information
(2) Management believes that EBITDA and free cash flow are widely accepted supplemental measures of evaluating operating performance and liquidity among companies. However these measures should be considered in addition to, and not as a substitute for, or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with generally accepted accounting principles.