SAP SE

Earnings Release • Oct 6, 2008

News Details

Ad-hoc | 6 October 2008 17:06

SAP AG: Preliminary Third Quarter 2008 Software and Software-Related Service Revenue Numbers

SAP AG / Preliminary Results

Release of an Ad hoc announcement according to § 15 WpHG, transmitted by
DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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SAP Announces 2008 Third Quarter Preliminary Software and Software-Related
Service Revenue Numbers

WALLDORF – October 6, 2008 – SAP AG (NYSE: SAP) announced today that after
a preliminary review of its 2008 third quarter revenues, it expects third
quarter 2008 U.S. GAAP software and software-related service revenues to be
between €1.970 billion and €1.980 billion (2007: €1.74 billion),
representing an increase of 13% - 14% compared to the third quarter of
2007. Non-GAAP software and software-related service revenues, which
exclude a non-recurring deferred support revenue write-down from the
acquisition of Business Objects of around €40 million, for the third
quarter of 2008 is expected to be between €2.010 and €2.020 billion (2007:
€1.74 billion). This represents an increase of 16% - 17% (20% - 21% at
constant currencies) compared to the third quarter of 2007.

Third quarter 2008 U.S. GAAP software revenues are expected to be between
€740 and €750 million (2007: €715 million), representing an increase of 4%
- 5% (7% - 9% at constant currencies) compared to the third quarter of
2007.

As SAP is still finalizing the quarter-end closing process, total revenues
and operating income are not yet available and will be provided along with
further details on October 28th, including an update of its 2008 outlook.

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Information and Explaination of the Issuer to this News:

'The market developments of the past several weeks have been dramatic and
worrying to many businesses. These concerns triggered a very sudden and
unexpected drop in business activity at the end of the quarter,' said
Henning Kagermann, Co-CEO of SAP. 'Throughout the third quarter we felt
quite positive about our ability to meet our expectations. Unfortunately,
SAP was not immune from the economic and financial crisis that has
enveloped the markets in the second half of September, causing us to report
numbers below our expectations.'

'The overall fundamentals of our business remain in place. SAP did report
double-digit growth in software and software-related service revenues for
the quarter and we expect to have gained further market share, even during
unfavorable market conditions. This is the result of our leading product
portfolio, our widely diversified customer base and our geographic and
industry diversification and strength. We will continue to asses and
monitor the situation and report back at the end of the month,' concluded
Mr. Kagermann.

Regional Performance
On a U.S. GAAP basis, the Americas region is expected to report software
and software-related service revenues growth of around 12% for the third
quarter of 2008 compared to the third quarter of 2007. The EMEA region is
expected to report U.S. GAAP software and software-related service revenues
growth of around 14% for the third quarter of 2008 compared to the third
quarter of 2007. The APJ region is expected to report U.S. GAAP software
and software-related service revenues growth of around 18% for the third
quarter of 2008 compared to the third quarter of 2007.

On a Non-GAAP basis, the Americas region is expected to report software and
software-related service revenues growth of around 16% (around 23% at
constant currencies) for the third quarter of 2008 compared to the third
quarter of 2007. The EMEA region is expected to report Non-GAAP software
and software-related service revenues growth of around 16% (around 18% at
constant currencies) for the third quarter of 2008 compared to the third
quarter of 2007. The APJ region is expected to report Non-GAAP software
and software-related service revenues growth of around 18% (around 24% at
constant currencies) for the third quarter of 2008 compared to the third
quarter of 2007.

Nine Month 2008 Performance
Nine months 2008 U.S. GAAP software and software-related service revenues
are expected to be between €5.770 billion and €5.780 billion (2007: €4.95
billion), representing an increase of 16% - 17% compared to the first nine
months of 2007. Non-GAAP software and software-related service revenues
for the first nine months of 2008, which exclude a non-recurring deferred
support revenue write-down from the acquisition of Business Objects of
around €140 million, are expected to be between €5.910 and €5.920 billion
(2007: €4.95 billion). This represents an increase of 19% - 20% (25% - 26%
at constant currencies) compared to the first nine months of 2007.

Webcast/Supplementary Financial Information
SAP senior management will host a conference call for financial analysts
today at 5:30 pm (CET) / 4:30 pm (UK) / 11:30 am (EDT) / 8:30 am (PDT),
followed by conference call for media at 6:00 pm (CET) / 5:00 pm (UK) /
12:00 am (EDT) / 9:00 am (PDT).
Both conference calls will be Webcast live on the Company’s Web site at
http://www.sap.com and will be available for replay purposes as well.

Dial-in numbers for conference calls:

Investor and Analyst Conference Call
(Germany) +49 6958 999 0797
(UK) +44 20 8515 2302
(US) +1 480 248 5085

Replay Numbers:
(UK/Europe) +44 20 7154 2833
(US) +1 303 590 3030
Passcode: 3929159#

Press Conference Call
(Germany) +49 6958 999 0706
(UK) +44 207 190 1596
(US) +1 480 629 9041

Replay Numbers:
(UK/Europe) +44 207 154 2833
(US) +1 303 590 3030
Passcode: 3929163#

About SAP
SAP is the world’s leading provider of business software, offering
applications and services that enable companies of all sizes and in more
than 25 industries to become best-run businesses. With more than 75,000
customers in over 120 countries, SAP is listed on several exchanges,
including the Frankfurt stock exchange and NYSE, under the symbol 'SAP.'
(For more information, visit www.sap.com)

(*) SAP defines business software as comprising enterprise resource
planning and related applications.

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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,' 'outlook,' '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 SEC. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of their
dates.

Copyright © 2008 SAP AG. All rights reserved.
SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP
products and services mentioned herein as well as their respective logos
are trademarks or registered trademarks of SAP AG in Germany and in several
other countries all over the world. All other product and service names
mentioned are the trademarks of their respective companies. Data contained
in this document serve informational purposes only. National product
specifications may vary.

Use of Non-GAAP Financial Measures

This document discloses certain financial measures, such as Non-GAAP
revenues and constant currency revenue measures that are not prepared in
accordance with U.S. GAAP and are therefore considered non-GAAP financial
measures. Our non-GAAP financial measures may not correspond to non-GAAP
financial measures that other companies report. The non-GAAP financial
measures that we report should be considered as additional to, and not as
substitutes for or superior to, revenue or other measures of financial
performance prepared in accordance with U.S. GAAP.

Non-GAAP Revenues
We believe that it is of interest to investors to receive certain
supplemental historical and prospective financial information used by our
management in running our business – in addition to financial data prepared
in accordance with U.S. GAAP. Beginning in 2008 we useNon-GAAP revenues
as defined below consistently in our planning, forecasting, reporting,
compensation and external communication.

Non-GAAP revenue: Revenues in this document identified as 'Non-GAAP
revenue' have been adjusted from the respective U.S. GAAP numbers by
including the full amount of Business Objects support revenues that would
have been reflected by Business Objects had it remained a stand-alone
entity but are not permitted to be reflected as revenues under U.S. GAAP as
a result of fair value accounting for Business Objects support contracts in
effect at the time of the Business Objects acquisition.
Under U.S. GAAP we record at fair value the Business Objects support
contracts in effect at the time of the acquisition of Business Objects.
Consequently, our U.S. GAAP support revenues, our U.S. GAAP software and
software-related service revenues and our U.S. GAAP total revenues for
periods subsequent to the Business Objects acquisition do not reflect the
full amount of support revenue that Business Objects would have recorded
for these support contracts absent the acquisition by SAP. Adjusting
revenue numbers for this one-time revenue impact provides additional
insight into our ongoing performance because the support contracts are
typically one-year contracts and renewals of these contracts are expected
to result in revenues that are not impacted by the business
combination-related fair value accounting.
We believe that our Non-GAAP revenue numbers have limitations, particularly
as the eliminated amounts may be material to us. We therefore do not
evaluate our growth and performance without considering both Non-GAAP
revenues and U.S. GAAP revenues. We caution the readers of this document to
follow a similar approach by considering our Non-GAAP revenues only in
addition to, and not as a substitute for or superior to, revenues or other
measures of our financial performance prepared in accordance with U.S.
GAAP.

Constant Currency Period-over-Period Changes of Revenue Measures
We believe it is important for investors to have information that provides
insight into our sales. Revenue measures determined under U.S. GAAP provide
information that is useful in this regard. However, both sales volume and
currency effects impact period-over-period changes in sales revenue. We do
not sell standardized units of products and services, so we cannot provide
relevant information on sales volume by providing data on the changes in
product and service units sold. To provide additional information that may
be useful to investors in breaking down and evaluating changes in sales
volume, we present information about our revenue that is adjusted for
foreign currency effects. We calculate constant currency year-over-year
changes in revenue by translating foreign currencies using the average
exchange rates from the previous (comparator) year instead of the report
year.
We believe that data on constant currency period-over-period changes have
limitations, particularly as the currency effects that are eliminated
constitute a significant element of our revenues and may severely impact
our performance. We therefore limit our use of constant currency
period-over-period changes to the analysis of changes in volume as one
element of the full change in a financial measure. We do not evaluate our
results and performance without considering both constant currency
period-over-period changes on the one hand and changes in revenues or other
measures of financial performance prepared in accordance with U.S. GAAP on
the other. We caution the readers of this document to follow a similar
approach by considering data on constant currency period-over-period
changes only in addition to, and not as a substitute for or superior to,
changes in revenues or other measures of financial performance prepared in
accordance with U.S. GAAP.

For more information, press only:
Herbert Heitmann, +49 (6227) 7-61137, herbert.heitmann@sap.com, CET

For more information, financial community only:
Stefan Gruber, +49 (6227) 7-44872, investor@sap.com, CET

06.10.2008 Financial News transmitted by DGAP

Language: English
Issuer: SAP AG
Dietmar-Hopp-Allee 16
69190 Walldorf
Deutschland
Phone: +49 (0)6227 - 74 74 74
Fax: +49 (0)6227 - 75 75 75
E-mail: investor@sap.com
Internet: www.sap.com
ISIN: DE0007164600
WKN: 716460
Indices: DAX
Listed: Regulierter Markt in Berlin, Frankfurt (Prime Standard),
Stuttgart; Freiverkehr in Hannover, Düsseldorf, Hamburg,
München; Terminbörse EUREX; Foreign Exchange(s) NYSE

End of News DGAP News-Service

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