In the fourth quarter, revenues increased 31% over the same period last year to EUR 2.164 billion (1999: EUR 1.651 billion). Fourth quarter operating income before charges for the employee stock appreciation rights program (STAR) rose 51% to EUR 659 million (1999: EUR 436 million), putting operating margins at approximately 30%. Pre-tax profit including STAR was up 21% to EUR 583 million (1999: EUR 481 million). Net income in the quarter increased 16% to EUR 366 million (1999: EUR 316 million). Earnings per share increased 15% to EUR 1.16 (1999: EUR 1.01).
Sales of mySAP.com, SAP’s leading e-business platform, grew 412% to EUR 661 million (1999: EUR 129 million) in the fourth quarter. mySAP.com revenues represented 63% of total license revenues in the quarter, compared to 61% in the third quarter. Over the full year, e-business sales grew to EUR 1.3 billion, or 53% of license revenues.
These results confirm SAP’s leadership in providing complete e-business solutions that companies want, said Henning Kagermann, Co-Chairman and CEO of SAP AG. Our organization is focused and energized. When you combine this with the growing customer understanding of the power of mySAP.com and our strong pipeline, 2001 looks like another very good year for SAP.
Product revenues in the quarter were up 35% to EUR 1.524 billion (1999: EUR 1.132 billion). License revenues, which are comprised of mySAP.com sales as well as component based software sales, grew 30% to EUR 1.056 billion (1999: EUR 811 million). Consulting revenues rose 27% to EUR 517 million (1999: EUR 408 million). Training revenues increased 25% to EUR 111 million (1999: EUR 89 million).
In the fourth quarter, revenues in the Europe, the Middle East and Africa (EMEA) region increased 42% to EUR 1.136 billion (1999: EUR 800 million) and in the Asia-Pacific region (APA) revenues were up 38% to EUR 231 million (1999: EUR 167 million). Revenues in the Americas region rose 17% to EUR 797 million (1999: EUR 684 million). Americas’ growth was paced by a strengthened US organization, which grew revenues 23% to EUR 593 million.
Full Year Results
For 2000, sales grew 23% over 1999 to EUR 6.266 billion (1999: EUR 5.110 billion). Operating income before charges for STAR were up 32% to EUR 1.235 billion. Pre-tax profit before charges for STAR was up 31% to EUR 1.466 billion (1999: EUR 1.120 billion); pre-tax profit including STAR grew 5% to EUR 1.025 billion (1999: EUR 980 million). Net income for the year increased 4% to EUR 626 million (1999: EUR 601 million). Earnings per share excluding charges for the STAR program rose 31% to EUR 2.86 (1999: EUR 2.19); earnings per share including STAR were up 4% to EUR 2.00 (1999: EUR 1.92). EPS calculations reflect the 3-for-1 stock split which occurred during 2000.
mySAP.com accounted for 53% or EUR 1.3 billion of license revenues for 2000, which rose 27% to EUR 2.46 billion (1999: EUR 1.932 billion). Consulting revenues grew 6% to EUR 1.646 billion (1999: EUR 1.547 billion) and training revenue increased 2% to EUR 401 million (1999: EUR 395 million).
Total operating expenses excluding STAR rose 21% in 2000 to EUR 5.031 billion (1999: EUR 4.174 billion); operating margin excluding STAR was 20%. An overall tax rate of 38.0% is anticipated, as opposed to 38.4% in 1999.
All of the pieces of our e-business strategy are in place — people, products, marketing and commitment to win — and we have the customer wins and win-backs to prove that we successfully reinvented SAP, commented Hasso Plattner, Co-Chairman and CEO of SAP AG. There is no other business software vendor with the product depth, industry knowledge and global reach of SAP.
Outlook
SAP expects revenue growth through the first half of 2001 to slightly exceed the rate it achieved in its 2000 fiscal year. As a consequence, the Group’s three-year target of doubling 1998 revenues will take one quarter longer to achieve than originally thought. The company also expects to enhance its operating profit margin before STAR in the first half 2001 to roughly match the improvement seen in 2000.
As permitted under the Shareholder resolution of January 18, 2000, the Executive Board has decided to repurchase SAP Preference Shares during the period of January 24, 2001 until June 30, 2001. The Company intends to purchase its preference shares from the market in an amount not to exceed 1.5% of the total preference shares outstanding.
The purchase price paid by the company for each SAP AG preference share shall not be more or less than 10% of the average market price of the preference share over the five trading days before such purchase. The average market price is calculated based upon SAP AG preference share closing prices in the Frankfurt Stock Exchange XETRA trading system.
