Good Q4 Boosts SAP's Results for Fiscal 1999

MUNICH (01/24/2000) - Citing record growth in its fourth quarter, SAP AG today said its net income in the 1999 fiscal year grew 14 percent.

The fourth quarter's rebound in sales contributed strongly to its financial results for the overall fiscal year, SAP said. Net income for the quarter, ended Dec. 31, 1999, surged 109 percent to 317 million euros (US$320 million), as compared to 152 million euros in the same period a year ago.

Sales in the fourth quarter rose 30 percent to 1.65 billion euros, up from 1.27 billion euros in the fourth quarter of 1998. Sales of SAP's new Internet-based line of products -- mySAP.com -- were a contributing factor, accounting for 129 million euros in license sales. Total license sales were 811 million euros, compared to 559 million euros in the fourth quarter of the previous year.

Net income for the 1999 fiscal year, ended Dec. 31, 1999, rose to 602 million euros, up from 527 million euros a year ago, according to a company statement based on preliminary earnings results.The German business software vendor's revenue increased by 18 percent to 5.11 billion euros, up from 4.32 billion euros in 1998.

Taking into account an increased number of shares that it issued in 1999, SAP's earnings per share rose 14 percent to 5.76 euros, up from 5.05 euros the previous fiscal year, the company said.

SAP's employee stock option plan, called STAR (Stock Appreciation Rights Program), however, put a damper on profitability, the company said. Pre-tax profit excluding costs associated with STAR grew 18 percent to 1.12 billion euros, up from 948 million euros in 1998. With STAR taken into account, however, pre-tax profit only increased by 5 percent, to 981 million euros, from 932 million euros.

SAP's revenue overall was lower than the vendor originally predicted at the start of the fiscal year. In October, the company revised its optimistic prediction of 20 percent to 25 percent revenue growth for the year to between 15 percent and 20 percent. [See "SAP Warns of Lower 1999 Revenues," Oct. 13, 1999.] Like other vendors of ERP (enterprise resource planning) software, SAP was hit by companies deferring purchases of new software.

That trend was most marked in the Americas region, where SAP increased overall sales for the year by only 7 percent, to 2.14 billion euros, from 2 billion euros in 1998. Annual revenue growth was healthier in EMEA (Europe, Middle East and Africa), growing 29 percent to 2.41 billion euros, compared to 1.87 billion in 1998, and in Asia-Pacific, where sales rose 27 percent to 506 million euros, up from 397 million euros.

SAP's consulting revenue grew most strongly, by 38 percent, while product sales increased 14 percent year-on-year. Training revenue fell by 4 percent, SAP said.

Looking ahead, SAP expects service revenue to grow more slowly in the past in the first part of 2000. It also expects revenues for the current fiscal year to be roughly double that of 1998.

SAP, in Walldorf, Germany, can be reached at +49-6227-747474, or on the Web at http://www.sap.com/.

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