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January 27, 1998

SAP ANNOUNCES SOLID PRELIMINARY RESULTS FOR FY97

By CBR Staff Writer

SAP AG has reported strong preliminary results for fiscal 1997. The German enterprise applications giant projects that sales for the year surged 62% to $3.36bn and income before taxes rose 72% to $932m. Net income rose 63% to $516m, while earnings per share for the year rose 62% to DM 8.86 ($4.94). Fourth-quarter revenue grew 63% to $1.23bn. The company attributes the revenue growth to robust sales of packaged application software spurred on by European monetary union and year 2000 issues. The healthy bottom line numbers come in spite of overall costs that grew 57% to $2.51bn an increase in the company’s tax rate from 41.3% to 44.5%. The relative strength of the US dollar also helped SAP – which saw 81% of its revenues from outside Germany – with currency gains adding 11% to revenue and 12% to pretax profits. Total product revenue grew 56% to $2.29bn, while consulting revenue rose 70% to $697.5m and training revenue was up 90% at $323.6m. SAP says business was strong across all of its geographies, including Asia/Pacific, which saw 66% sales growth for the year. Sales in the Americas rose 91%; Europe grew 59% and Germany saw 21% growth. Headcount has risen rapidly, with 12,860 in the fold at year’s end, up 40% from the end of 1996. Looking ahead, the company figures that sales growth in 1998 will be in the 30%-35% range. it also expects to list it American Depository Receipts on the New York Stock Exchange in the third quarter of the year. All figures were calculated at the December 31 rate of DM 1.7921 to the dollar.

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