029 Group SE

Quarterly Report • Apr 29, 2003

SAP Systems Integration AG Quarterly Report Q1/2003

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Key performance indicators as of March 31, 2003 (US-GAAP)

SAP Systems Integration AG

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	J 0 , 2 0 0 3 1 an	J 0 , 2 0 0 2 1 an	C h an ge
/ R i f i ev en ue ea rn n gs gu re s	– M 3 , 2 0 0 3 1 ar	– M 3 , 2 0 0 2 1 ar	i % , % i nts n -po
in € t ho nd Re ven ue usa s of wh ich fo tho nd rei in € gn usa s	64 ,84 3 11 ,97 7	74 ,44 7 15 ,33 6	-12 .9 % -21 .9 %
tho nd Re in s in € str tur ost uc g c usa s	0	766	-10 0.0 %
O in rof it i n € th ds rat pe g p ou san	,67 2 7	5 ,54 5	38. 4 %
O in rof it a of pe rat g p pe nt s a rce rev en ue	11. 8 %	7.4 %	4.4 PP
th ds EB ITD A i n € ou san	8 ,83 0	6 ,97 2	26. 6 %
of EB ITD A a nt s a pe rce rev en ue	13. 6 %	9.4 %	4.2 PP
bef in s in € tho nd EB IT str tur ost ore re uc g c usa s	,65 1 7	6 ,40 4	19. 5%
EB IT bef in of str tur ost nt ore re uc g c s a s a pe rce rev en ue	11. 8%	8.6 %	3.2 PP
ho nd EB IT in € t usa s	7 ,65 1	5 ,63 8	35. 7 %
f re EB IT t o as a p erc en ven ue	11. 8 %	7.6 %	4.2 PP
T i n € th ds EB ou san	8 ,40 6	6 ,65 2	26. 4%
EB T a of nt s a pe rce rev en ue	13. 0 %	8.9 %	4.1 PP
B al h t f i an ce -s ee gu re s	M 3 1 , 2 0 0 3 ar	D 3 1 , 2 0 0 2 ec
l-a E it ati y-t o-t ota ts r qu sse o	80. 9%	78. 3%	2.6 PP
sh d c ash ale / al a Ca uiv nts tot ts an eq sse	45. 1 %	44. 3 %	0.8 PP
rki pit al i th ds Wo n € ng ca ou san	150 ,13 8	149 ,49 2	0.4 %
	J 0 1 , 2 0 0 3 an	J 0 1 , 2 0 0 2 an
O f th k i er e gu re s y	– M 3 1 , 2 0 0 3 ar	– M 3 1 , 2 0 0 2 ar
( ) in Ea rni sha dil d € ute ng s p er re un	0.1 5	0.1 0	50. 0 %
sha ( dil d ) in Ea rni € ute ng s p er re	0.1 5	0.1 0	50. 0 %
sh flo th ds Ca w i n € ou san	6 ,69 2	4 ,93 2	35. 7 %
pit al i lud in dw ill in ho nd Ca € t est nt nv me exc g g oo usa s	649	2 ,89 3	.6 -77 %
Av mb of plo era ge nu er em yee s	1 ,67 9	1 ,83 5	-8. 5 %
tho nd Re lo in € ven pe r e mp ue yee usa s	39	41	-4. 9%

DEAR STOCKHOLDERS

HIGHLIGHTS

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• 35.7% increase in EBIT to €7.7 million, which corresponds to an EBIT margin of 11.8% (previous year: 7.6%)
• Quarterly earnings per share 50% higher than in the previous year at €0.15
• Revenues down 12.9% to €64.8 million (previous year: €74.4 million) due to the economic situation and currency translation
• Growth of 24.4% to €7.7 million in Hosting/Application Management
• Operating cash flow up €5.6 million to €9.1 million
• Market environment still difficult and continued reluctance to invest, especially in our core market Germany
• Inclusion in the TecDAX

"Integration for customer value" has been your Company's motto since last year. We generate quantifiable additional benefits by improving integration of customers' existing IT solutions to create a consistent overall solution. With the help of this corporate realignment, we are meeting the demands of increasingly fierce competition in what continues to be a difficult market environment. The main features of this situation are uncertainty about the development of the economy, the crisis in Iraq and a stagnant IT market. There are no signs of a recovery of the economy and the IT service market in our core market Germany in particular.

In spite of this market environment, in the first quarter we succeeded in reaching our most important target – a substantial increase in profitability over the previous year. The restructuring measures already carried out last year and further strict cost management produced results: earnings (EBIT) were 35.7% higher than in the same quarter the previous year at €7.7 million. This corresponds to an EBIT margin of 11.8% (previous year: 7.6%), which means that we have been able to report a double-digit operating margin for the third quarter in a row (disregarding restructuring costs).

As expected, SAP SI recorded a shortfall in revenues compared with the strong performance in the same quarter of the previous year. Reluctance to invest, a further increase in competition, the effects of fluctuations in the dollar exchange rate and the focus on profitable orders in the current market environment led to a reduction of 12.9 % in SAP SI Group first quarter revenues over the same period the previous year to €64.8 million. Revenues were down 10.8% if adjusted to eliminate currency translation.

We nevertheless managed to obtain important new orders inside and outside Germany in the first quarter, e.g. from Energie- und Wasserversorgung Altenburg, Honeywell Aerospace, Singapore Airlines, Stadtwerke Bielefeld and Vivendi Water Germany. The volume of orders on books was only slightly lower than in the same quarter the previous year and totalled €142 million on the reporting date.

In spite of the current weakness of the market, numerous talks with interested customers at CeBIT in March confirmed once again that we have become even more attractive as a full-service provider with proven know-how about the integration of heterogeneous system environments. We will therefore be continuing to implement this approach systematically.

Dresden, Germany, April 2003

The Executive Board

Contents

Let th kho lde ter to toc e s rs	1
SA P S I S k toc	2
Inte rim nt ort m ana me rep ge	3
fin Inte ial rim sta tem ent anc s	5
No tes	8

SAP SI STOCK

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The factors that influenced the German stock market in the first quarter of 2003 were mainly negative in their effects. Uncertainty about developments in Iraq and the anticipated outbreak of war were elements that were very difficult for capital market players to evaluate. Increasingly gloomy economic forecasts for Germany also had an adverse impact on the mood of the market in general. The continued withdrawal of many institutional investors from the Neuer Markt depressed more than just sales volume as well. It led in addition to lower share prices in spite of positive company reports.

SAP SI STOCK PERFORMANCE IN COMPARISON WITH RELEVANT INDICES Jan 2, 2003 = 100

The SAP SI share closed the year 2002 at €8.90. The final price on March 31, 2003 was about 5% lower at €8.44. The DAX lost approximately 16% in the first quarter, while the Nemax 50 fell about 5%. There was remarkably large SAP SI share turnover in the first quarter of 2003, particularly in the final weeks of this period. One reason for this is the resegmentation of the stock market by Deutsche Börse, which forced index-oriented funds to rearrange their portfolios. This affected the SAP SI share too, which has been listed in the TecDAX since March 24. The SAP SI share had a higher weighting in the Nemax 50 than is the case in the TecDAX, so that index-based funds have been forced to reduce their percentage weighting. Currently, SAP SI has a weighting of about 1.7% in the new technology index.

SAP AG increased its shareholding in SAP SI moderately from 67.9% to 70.0% during the current phase of stock market weakness in the quarter under review. The free float was therefore 30.0% on March 31. SAP continues to view its majority interest in SAP SI as a strategic investment in an IT service provider and systems integrator with independent long-term operations.

SAP SI's investor relations activities again focussed on the provision of information about the Company and the potential of the share in the first quarter of 2003. During a period of decreasing confidence in the capital markets, we concentrated not only on such classic instruments as the publication of the annual report and regular, transparent communication with the capital market but also and above all on direct contacts with existing and potential investors.

SAP SI managers explained the Company's potential on numerous occasions. At events held for investors by Crédit Lyonnais and Deutsche Bank, the Chief Financial Officer presented SAP SI. On Februrary 6, the annual press conference to announce the provisional results for fiscal 2002 took place in Frankfurt and was followed the same day by a conference for analysts with more than 50 participants. Additionally, several roadshows were held at the international centres of the financial community in Frankfurt, Paris and London. Finally, the management presented the Company and answered analysts' questions at the DVFA IT forum in connection with CeBIT in Hanover. At all these events our new business model attracted a great deal of interest.

The total number of shares remained unchanged on March 31, 2003 at 35.8 million. The members of the Company's organs held the following shares and rights on the reporting date:

DIRECTORS HOLDINGS ACCORDING TO MARCH 31, 2003

Na me	Sh are s	Co rtib le b ond nve s	Oth ght ri er s
Su Bo ard vis per ory :
Dr. W Bra ndt ern er	0	0	0
Léo A hek pot er	0	0	0
Fra nk Fic ker	211	1.0 00	0
f. D Pro r. H in g K enn age rma nn	0	0	0
Tho s M aik Ne stle ma r	551	1.3 00	0
Ric har d S tew art	0	0	0
Exe ive Bo ard cut :
Dr. Be rnd -M ich ael Ru f mp	0	0	0
Alf red Er me r	0	25 .00 0	0
Joa chi m M ülle r	0	0	0

INTERIM MANAGEMENT REPORT

ECONOMIC ENVIRONMENT

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It is difficult to predict how the economy will develop in 2003. Ifo-Institut expects GDP growth of 2.5% in the USA. Economic growth in Germany will be considerably lower: in their spring report, the leading German economic research institutes estimate that growth there will be only 0.5%. The IT market will be developing slowlyin the current year too, following the decrease in 2002: in liaison with EITO, the industry association BITKOM anticipates global growth of 2.5% and a reduction of 1.8% in Germany for 2003. BITKOM is similarly restrained about IT service market growth: the association is expecting a reduction of 1.9% in our core German market here. BITKOM's growth forecasts for the IT market start to become somewhat more positive again in 2004.

BUSINESS DEVELOPMENT

Order situation

Despite the difficult market environment, the volume of orders on books on March 31, 2003 was only slightly lower than at the same time the previous year (€149 million) at €142 million. The most important marketing activity in the quarter under review was SAP SI's participation in CeBIT in Hanover. Trade visitors were particularly interested in the SAP SI solution portfolios for Business Intelligence, Customer Relationship Management and Enterprise Application Integration.

Revenue development

The poor economic environment depressed business development in the 1st quarter of 2003. Continued strong reluctance to invest, a further increase in competition combined with price pressure, the development of the US dollar exchange rate and the focus on profitable orders in the current market environment led to a reduction in SAP SI Group revenues of 12.9% to €64.8 million. While revenues in Germany/Switzerland fell 10.3% from €59.8 million to €53.6 million, revenues in the USA decreased by 28.8% from €9.3 million to €6.6 million. Adjusted to eliminate the effects of currency translation, the revenue reduction in the USA would have been 12.8%. COPA's sales were down 13.9% from €5.4 million to €4.6 million.

About 85.2% (previous year: 89.4%) of revenues were accounted for by the consulting business, 11.9% (previous year: 8.3%) by Hosting/Application Management business1) and 2.9% (previous year: 2.3%) by product business.18.5% (previous year: 20.6%) of Group revenues were generated outside Germany.

1) The Hosting/Application Management business includes the revenues of what used to be known as Outsourcing/Application Services, excluding revenues from Technical Consulting (previous year: €1.2 million). Following the reorganisation of the Company, these revenues are now shown as revenues from services.

Cost development

Costs were reduced by 17.0% over the same quarter the previous year, from €68.9 million to €57.2 million. Major reasons for this were the reduction in the number of employees, systematic cost management and a cut in third-party

expenses. Adjusted to eliminate the effects of the change in the dollar exchange rate, the reduction in costs amounted to 15.2%. The costs in the same quarter the previous year included €2.8 million in special items that were attributable to about €0.8 million in restructuring costs and €2.0 million in writedowns of accounts receivable.

Earnings development

Earnings before interest and tax (EBIT) increased by 35.7% over the same quarter the previous year, from €5.6 million to €7.7 million. The EBIT growth amounted to 19.5% if the figures are adjusted to eliminate the restructuring costs of €0.8 million incurred in the 1st quarter of the previous year. The EBIT margin reported for the Group was 11.8%, compared with 7.6% in the previous year. This means that before restructuring costs SAP SI has reached its goal of reporting double-digit revenue margins for three quarters in succession now.

SAP SI Germany/Switzerland contributed €6.2 million to the EBIT, COPA €0.5 million and SAP SI America €1.0 million. This corresponds to EBIT margins of 11.6% in Germany/Switzerland (previous year: 6.4%), 10.8% at COPA (previous year: 19.1%) and 14.3% at SAP SI America (previous year: 8.7%).

The increases in earnings in Germany/Switzerland and the USA are attributable to a large extent to a substantial reduction in costs and to an improvement in capacity utilisation. The lower earnings at COPA compared with the very strong performance in the same quarter the previous year was influenced primarily by a significant increase in sales and marketing costs.

Consolidated net income in the first quarter of 2003 was €5.5 million (previous year: €3.6 million). The undiluted earnings per share (consolidated net income divided by the number of shares) therefore amounted to €0.15 and were 50% higher than the figure reported in the previous year (€0.10).

Research & development activities

The research and development expenses were incurred in the ongoing development of the software solution REA (Recycling Administration) and consisted mainly of personnel costs.

Changes in equity holdings

SAP SI acquired the remaining 49.9% of the shares in COPA Computer Organisation, Programmierung und Anwendungs-Software GmbH, Wesel, on January 1, 2003. The company is now a wholly-owned subsidiary of SAP SI.

Assets and financial situation

Balance sheets:

On March 31, 2003, the balance sheet total was €303.8 million (December 31, 2002: €306.5 million). The change on the assets side was due in particular to a reduction in receivables and other current assets (- €8.8 million) as well as to an increase in fixed assets (+ €5.6 million). On the liabilities side, accrued liabilities and liabilities decreased by €7.8 million, while stockholders' equity due to the increase in results increased by €5.7 million to €245.7 million. The equity-to-total-assets ratio therefore increased from 78% to 81% of the total liabilities and stockholders' equity.

Cash and cash equivalents increased by €1.3 million compared with December 31, 2002 and amounted to €137.0 million on the reporting date. The development of cash and cash equivalents is explained in the "Statements of cash flows" section.

Capital investment:

€0.6 million were invested during the first quarter of 2003, particularly in hardware and assets under construction. The additions to the intangible assets (€6.4 million) were attributable mainly to the acquisition of COPA on January 1, 2003.

Statements of cash flow:

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The inflow of net cash from operating activities was €9.1 million (previous year: €3.5 million). The inflow was due primarily to the consolidated net income for the quarter and a smaller decrease in liabilities.

The outflow of cash and cash equivalents from investing activities in the quarter under review increased by €0.7 million over the same quarter the previous year to - €8.4 million.

Employees

4

By comparison with the same quarter the previous year (1,854 employees), SAP SI reduced personnel as scheduled by 10.1% to 1,666 employees on March 31, 2003. 1,423 of the staff were deployed in Germany/Switzerland, 148 at COPA and 95 in the USA.

The average number of employees (total of the figures at the end of the months divided by the number of months) since the beginning of fiscal 2003 was 1,679 employees (previous year: 1,835). This reduction is attributable to a very large extent to the restructuring programme carried out in 2002.

EMPLOYEE DEVELOPMENT

Development of the risk situation

We reported in detail about the Company's exposure in the annual report of SAP Systems Integration AG for 2002. There have been no major changes in the risks of future development compared with the review presented there.

Events after the end of the quarter

The Supervisory Board appointed Mr Ronald Geiger to the Executive Board of SAP SI with effect from April 1, 2003. Mr Geiger has taken over responsibility for the manufacturing and service industries areas as well as for sales.

Outlook and forecast

As explained at the press conference on February 6, 2003, SAP SI is expecting business to develop very slowly in the first half of 2003 due to the economic situation. At the present time, we are working on the assumption of only a gradual economic recovery in the second half of the year too.

Reluctance to invest is continuing in the IT services market, while competition is increasing due to the excess capacities available on the market. The sales cycles have lengthened considerably, partly because of the uncertainty about political and overall economic developments. We are countering this trend by intensifying account management and by expanding sales activities in all areas.

Although it is still impossible to forecast economic and political developments, SAP SI has not changed the outlook for 2003. Achievement of the revenue target (organic growth in the low single-digit percentage range) will depend to a major extent on the development of the IT services market in the next few quarters too. Partly in view of the costcutting measures taken in recent quarters, however, we continue to assume that the profitability target (EBIT margin of 12% to 14%) will be reached and that profitability will therefore be improved substantially.

CONSOLIDATED INCOME STATEMENTS (US-GAAP)

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th and in € ous s	Jan – M 01 , 20 03 31 , 20 03 ar	Jan – M 01 , 20 02 31 , 20 02 ar
So ftw are re ven ue	541	514
Ma inte nan ce rev enu e	1,3 11	1,2 27
Rev e f odu cts enu rom pr	1,8 52	1,74 1
Rev e f rvic enu rom se es	54 ,42 9	65 ,66 5
Ho g/A ppl M stin ica tion ent ana gem	7,6 99	6,1 90
Oth er rev enu e	863	851
Rev enu e	64 ,84 3	74, 447
Pro duc t c ost s	-86 9	-1,0 44
Se rvic ost e c s	-48 ,20 7	-56 ,74 7
Re rch d d lo ent sea an eve pm	-55	-23 9
Sa les d m ark etin ost an g c s	-4, 048	-4, 446
Ge al a dm inis tra tive sts ner co	-4, 076	-6, 379
Oth nd rat in inc net er ope g e xpe nse s a om e,	84	-47
Tot al c ost s	-57 ,17 1	-68 ,90 2
O ati fit per ng pro	7,6 72	5,5 45
Oth and inc net er exp ens es om e,	-21	93
( ) Ear bef d t EB IT nin in ter est gs ore an ax	7,6 51	5,6 38
Fin ial inc net anc om e,	755	1,0 14
x ( ) Ear bef EB T nin ta gs ore	8 ,40 6	6 ,65 2
Inc e t om ax	-2, 911	-2, 736
Ne t in fte r ta com e a x	5,4 95	3 ,91 6
Min orit y in ter est	0	-31 0
Co lida ted t in nso ne com e	5,4 95	3 ,60 6
Ear nin sh in € gs per are
( ) Ear sh und ilut ed nin gs per are	0.1 5	0.1 0
( ) Ear sh dilu ted nin gs per are	0.1 5	0.1 0
s ( ) Av ber of sh din th and und ilut ed uts tan g in era ge num are s o ous	35 ,80 0	35 ,80 0
s ( ) Av ber of sh din th and dilu ted g in uts tan era ge num are s o ous	35 ,80 0	35 ,51 4

CONSOLIDATED BALANCE SHEETS (US-GAAP)

ASSETS

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in € th and ous s	Ma r 3 1, 2 003	De c 3 1, 2 00 2
Inta ble ngi set as s	88 ,15 5	82 ,05 6
Pro nd i t ent per y a equ pm	7,4 42	7,6 68
Fin ial ets anc ass	809	1,10 6
Fix ed As set s	96 ,40 6	90 ,83 0
Inv ori ent es	1,16 9	883
Re vab les fro ood nd cei vic m g s a ser es	33 ,20 8	38 ,47 9
Re vab les fro ffili d c cei ate ies m a om pan	17,0 05	16, 542
Oth t a ts er cur ren sse	17,0 10	20 ,96 3
Re cei vab les d o the ent set an r c urr as s	67 ,22 3	75, 984
Ca sh and sh len iva ts ca equ	137 ,02 8	135 9 ,71
No n-f ixe d a ts sse	205 ,42 0	212 ,58 6
De fer red ta ts x a sse	1,2 35	1,8 00
Pre d e pai xpe nse s	726	1,2 53
Tot al a ts sse	303 ,78 7	306 ,46 9
of w hic h s hor t-te rm	205 9 ,77	214 ,07 9

LIABILITIES

in € th and ous s	Ma r 3 1, 2 003	De c 3 1, 2 00 2
Ca l st ock 1) pita	35 ,80 0	35 ,80 0
Ad diti l pai d-in pita l ona ca	218 ,47 8	218 ,07 0
Ret ed gs/ ula ted los ain nin ear acc um s	-7,7 06	-13 ,20 1
Ac ula ted her reh ive inc ot cum co mp ens om e	-82 5	-64 0
Sto ckh old ´ e it ers qu y	245 ,74 7	240 ,02 9
Mi it y i nte t nor res	0	1,2 86
Ac als fo ion cru r p ens s	1,5 75	1,5 57
Oth ls er acc rua	33 ,23 9	36 ,04 4
Ac ed liab iliti cru es	34 ,81 4	37 ,60 1
Co rtib le b ond s nve	1,14 9	1,2 10
Oth liab ilitie er s	20 ,89 4	25 ,84 0
Lia bili tie s	22 ,04 3	27 ,05 0
De fer red in com e	1,18 3	503
Tot al l iab iliti and ock hol der s´e it st es qu y	303 ,78 7	306 ,46 9
of w hic h s hor liab ilitie t-te rm s	,31 6 55	62 ,38 7

1) Authorized-but-unissued capital at the relevant date €1,149 thousands (Dec 31, 2002: €1,210 thousands)

CONSOLIDATED STATEMENTS OF CASH FLOWS (US-GAAP)

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in € th and ous s	Jan 01 , 20 03 – M 31 , 20 03 ar	Jan 01 , 20 02 – M 31 , 20 02 ar
Co lida ted t in nso ne com e	95 5,4	3,6 06
De d a f fix ed cia tion rtiz atio ets pre an mo n o ass ,
d f lon als g-t inv est nts ina nci set erm me an as s	1,17 9	1,3 36
Ch ual s fo in a ion ang es ccr r p ens s	18	-10
Ch in d efe d t ang es rre axe s	848	149
Ch in i nto ries ang es nve	-28 6	-29 5
Ch ble nd oth in r iva t a ts ang es ece s a er cur ren sse	8,7 61	7,2 36
Ch hor d li abi litie in s t-te ang es rm acc rue s	-3, 08 8	-55 8
Ch hor liab ilitie in s t-te ang es rm s	-5, 007	-10 ,20 7
Ch the liab ilitie nd kho lde rs' in o ts, in s toc it ang es r a sse s a equ y	1,2 07	2,2 64
Ne ash fro ati ivit ies t c act m o per ng	9 ,12 7	3 ,52 1
Ad diti ible nd to int set ert i ent ons ang as s, p rop y a equ pm	-7,1 33	-2, 893
Ch he of sol ida in t tion ang es sco pe con	0	-4, 775
fin Ad diti ial to ets ons anc ass	0	-34
Dis als of fix ed ets pos ass	64	70
Ch in m ino rit y in ter est ang es	-1,2 86	0
Ne ash ed in i stin ctiv itie t c us nve g a s	-8 ,35 5	-7,6 32
Oth cha ckh old ' e s to sto qui t er nge ers y	408	-42 6
Ne ash fro m f al a ina nci ctiv itie t c s	40 8	-42 6
Cu nsl d tra atio jus tm ent rre ncy n a s	129	0
( ) Ne han h a nd h e len o 3 hs t c in iva ts ter p t ont ges cas cas qu m u m	1,3 09	537 -4,
Ca sh and sh len he be f th od iva gin nin rtin eri ts at t ca equ g o e r epo g p	135 ,71 9	126 ,44 5
Ca sh and sh iva len he end of th rtin eri od ts at t ca equ e r epo g p	137 ,02 8	121 ,90 8

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (US-GAAP)

	Tho nd usa	Co reh ive mp ens	Ac ula ted her ot cum
th and in € ous s	sha res	inc om e	hen siv e in com pre com e	Re ed tain nin ear gs	Ad diti l d-in l pai pita ona ca	Ca l st ock pita	Tot al
As of Ja 1, 2 00 2 nua ry	35 ,80 0		7	-27 ,39 8	218 ,52 4	35 ,80 0	226 ,93 3
Co lida ted t in nso ne com e		3,6 06		3,6 06			3,6 06
Oth hen siv e in er com pre com e		28	28				28
Co reh ive in mp ens com e		3 ,63 4
Exc al i s fr th l co lida ion e in itia tion ept tem om nso
of CO G PA mb H					-45 4		-45 4
As of M h 3 1, 2 00 2 arc	35 ,80 0	3 ,63 4	35	-23 ,79 2	218 ,07 0	35 ,80 0	230 ,113
As of Ja 1, 2 003 nua ry	35 ,80 0		35	-23 ,79 2	218 ,07 0	35 ,80 0	230 ,113
Co lida ted t in nso ne com e		95 5,4		95 5,4			95 5,4
Oth hen siv e in er com pre com e		-18 5	-18 5				-18 5
Co reh ive in mp ens com e		5,3 10
Exc al i s fr th ept ion tem te isit ion om e s p a cqu
of CO PA G mb H					408		408
As of M h 3 1, 2 003 arc	35 ,80 0		-15 0	-18 ,29 7	218 ,47 8	35 ,80 0	235 ,83 1

NOTES

GENERAL INFORMATION

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The consolidated financial statements have been prepared in accordance with the accounting principles for interim reports that are generally accepted in the United States of America (US-GAAP). The quarterly financial statements reflect all the adjustments that are necessary in order to present the asset, financial and earnings situation at the end of the periods that finished in March 2003 and 2002. All the adjustments are of an ordinary kind. The quarterly financial statements should be read in connection with the consolidated financial statements of SAP SI as per December 31, 2002. With the exception of specific explanations given about changes, the comments made there also apply to quarterly financial statements and are not included again here.

The interim consolidated financial statements include all the current business transactions and classifications that the Executive Board of SAP SI considers to be necessary in order to guarantee appropriate presentation of the interim results.

In the interests of greater clarity, the income statements have been expanded on the basis of the presentation in the 2002 consolidated financial statements.

The "Hosting/Application Management" business created in the context of Company reorganisation includes the revenues from what used to be the Outsourcing/Application Services business, excluding the revenues from

Technical Consulting (same quarter the previous year: €1.2 million). These revenues are now shown as revenues from services. The relevant figures for the previous year have been adjusted. In the Hosting/Application Management business, customers are in particular given the option of having their IT solutions (systems and applications) operated by SAP SI.

NOTES ABOUT THE FIRST QUARTER 2003 Equity holdings

SAP SI took over a further 49.9% of the shares in COPA on January 1, 2003. The equity interest is now 100%.

Financial assets

In valuation of the financial assets, the shareholding shown, in which it is not possible to exert a controlling influence, has been valued at acquisition cost. Depreciation to a lower value on the balance sheet date is only charged to earnings if the reduction in value is considered to be probable. A depreciation charge of €0.2 million was made in the first quarter of 2003.

Contractual commitments

The most important contractual commitments of SAP SI are attributable to operating leasing contracts, including rental contracts. €16.4 million of them are due within one year and a further €44.0 million within the subsequent 5 years.

SEGMENT REPORT

QB_E 0.3 28.04.2003 12:22 Uhr Seite 9

The segment report has been revised in the context of the restructuring of SAP SI as per January 1, 2003. Information about the Company and its areas of operation as well as a reconciliation calculation of segment contributions to EBT are provided in the following segment report. The segment breakdown made as of January 1, 2003 has been structured in accordance with the opportunities and risks that the Company faces. The accounting and valuation methods have been observed in compiling the segment data. The figures for the same quarter the previous year have been adjusted.

	SA P S I A G
	( ) Ge & S wit lan d rma ny zer		CO G PA mb H		SA P S I A rica me		Tot al
	Jan 01 , 20 03	Jan 01 , 20 02	Jan 01 , 20 03	Jan 01 , 20 02	Jan 01 , 20 03	Jan 01 , 20 02	Jan 01 , 20 03	Jan 01 , 20 02
in € illio m ns	– M 31 , 20 03 ar	– M 31 , 20 02 ar	– M 31 , 20 03 ar	– M 31 , 20 02 ar	– M 31 , 20 03 ar	– M 31 , 20 02 ar	– M 31 , 20 03 ar	– M 31 , 20 02 ar
Rev enu e	53 .6	59 .8	4.6	5.4	6.6	9.3	64 .8	74. 4
Co sts	47. 4	56 .1	4.1	4.3	5.7	8.5	2 57.	68 .9
n ( it) Co ibu rof ntr tio rat in ope g p	6.2	3.7	0.5	1.1	0.9	0.8	7.7	5.5
of Nu mb plo he g d n t ort in ate er em yee s o rep	1,4 23	1,6 08	148	139	95	107	1,6 66	1,8 54

The Company is organised in the Consulting and Hosting/Application Management areas. The following tables show the quarterly revenues, costs and contributions in the individual areas as well as a reconciliation calculation of segment contributions to EBT:

			Ho g/A stin	ppl ica tion
	Co nsu	ltin g	Ma ent nag em		Tot al
	Jan 01 , 20 03	Jan 01 , 20 02	Jan 01 , 20 03	Jan 01 , 20 02	Jan 01 , 20 03	Jan 01 , 20 02
illio in € m ns	– M 31 , 20 03 ar	– M 31 , 20 02 ar	– M 31 , 20 03 ar	– M 31 , 20 02 ar	– M 31 , 20 03 ar	– M 31 , 20 02 ar
Se ent gm re ven ue	57. 2	68 .3	7.7	6.2	64 .8	74. 4
Se ent sts gm co	47. 5	56 .5	5.6	5.9	53 .1	62 .4
Se ibu tio ent ntr gm co n	9.6	11. 7	2.1	0.3	11. 7	12. 0
Se ofit abi lit f s ent nt o ent gm pr y a s a pe rce egm re ven ue	16. 8%	17.2 %	27. 4%	4.9 %	18. 1%	16. 1%

	Jan 01 , 20 03	Jan 01 , 20 02
in € illio m ns	– M 31 , 20 03 ar	– M 31 , 20 02 ar
Tot al c ribu of all ont tion ent se gm s	11.7	12. 0
Oth lloc d c ate ost er una s	-4. 0	-6. 5
O ati fit per ng pro	7.7	5.5
Oth and inc net er exp ens es om e,	0.0	0.1
( ) Ear bef d t EB IT nin in ter est gs ore an ax	7.7	5.6
Fin ial inc net anc om e,	0.7	1.0
x ( ) Ear bef EB T nin ta gs ore	8.4	6.7

SAP SI AG

St. Petersburger Strasse 9 01069 Dresden Germany

QB_E 0.3 28.04.2003 12:22 Uhr Seite U1

T +49 (0) 351 4811-0 F +49 (0) 351 4811-603

Additional information is available on the internet at:www.sap-si.com

or send an inquiry via e-mail to investor@sap-si.com

F i i al l d ar* na nc ca en
An l st ock hol der s' m Dre sde eet in nua g, n	Ma y 2 2, 200 3
Pub lica of th e h alf- rl tion rt yea y r epo	Jul y 3 0, 200 3
of Pub lica th e 9 nth l tion rt -mo y r epo	Oc tob 29 , 20 03 er
Pub lica of elim ult for 20 03 tion ina pr ry res	Jan y 3 0, 200 4 uar
* Su bjec cha hou t to wit t no tice nge