SAP reports 7 percent revenue growth in Q4

Business software maker SAP AG is reporting modest revenue growth for the fourth quarter, though profit was down as a result of exceptional items.

Net income for the quarter stood at €319 million ($A522 million as of Dec. 31, the last day of the period being reported), dragged down by the one-time costs of SAP's acquisition of TopTier Software Inc. and of additional investment to bring SAP's stake in Commerce One Inc. to about 20 percent. In the year-ago quarter, SAP posted net profit of €367 million.

Excluding exceptional items, net income for the quarter would have been €379 million, up slightly from a comparable figure of €375 million for the year-ago period, SAP said in a statement Wednesday.

Revenue for the last quarter, at €2.32 billion, was up 7 percent over the €2.16 billion posted during the same period last year. Earnings per share amounted to €1.02, as against the fourth-quarter 2000 figure of €1.17.

For the full year, net income was down some 6 percent, to €581 million from the €616 million posted in 2000. Revenue for the year, on the other hand, was up 17 percent, at €7.34 billion, as against the €6.27 billion the company reported for the previous year.

Europe was once again "the region of the year" for SAP, said Co-Chairman and Chief Executive Officer (CEO) Henning Kagermann, in a news conference broadcast live over the Web.

The company made €1.2 billion in revenue in Europe, the Middle East and Africa (EMEA) in the fourth quarter, an increase of 6 percent over the €1.14 billion posted in the same quarter last year. The Americas came in second, with €864 million in quarterly revenue, up 8 percent over the €797 million posted in the year-ago quarter -- though the company noted that if currency exchange rates had remained constant, revenue in the region would have risen 13 percent. Asia-Pacific revenue, at €248 million, also marked a rise of 8 percent, having stood at €230 million in the fourth quarter of 2000.

The company said it expects 2002 to be "another challenging year," and projected revenue growth of about 15 percent.

SAP's marketing focus this year will remain on the growth areas of supply chain management (SCM), customer relations management (CRM), product lifecycle management, portals and marketplace software, said Hasso Plattner, the company's other co-chairman and CEO. He acknowledged, though, that a large part of SAP's revenue still comes from the more traditional areas of finance and human resources applications.

Software revenue for the company's mySAP CRM platform, at some €196 million for the quarter, accounted for 19 percent of total software license sales, while mySAP SCM revenue, at about €232 million, represented another 23 percent . The company did not provide a breakdown of revenue from portals or marketplace software.

Plattner added that the company will combine its two divisions SAP Markets and SAP Portals into a new, independent company based in Palo Alto, California.

The new entity will be "totally open and devoted to standards," he said, addressing past criticisms that SAP's products have not been oriented toward integration with other companies' software.

"That doesn't mean other parts of SAP aren't open to integration," Platter said. "But obviously we need interfaces, and this is actually the company that does the interfaces."

Plattner said a final name for the new company has yet to be decided, adding, "It will not be called SAP Markets and Portals, because our American partners turned that into SAP Mortals."

Executives also noted that SAP has no plans to increase its share in the California-based business-to-business software maker Commerce One beyond the current 20 percent.

"Commerce One remains a strategic partner of SAP," said Plattner. "However we told them they also have to generate revenue outside the SAP business. ... The cross-selling of each other's products didn't really work."

He added that although SAP would not make any firm commitment, "at the moment it is not planned" to reduce the company's stake in Commerce One.

Commerce One announced during the past quarter job cuts amounting to about 46 percent of its staff of 2,800. SAP itself cut some 7 percent of its U.S. staff, or about 300 people, but Plattner stressed he does not foresee any further such moves.

"We think we can really use the people we have on board in the coming growth phase," he said.

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