A strong Deutschmark wiped off the equivalent of $8.7m from SAP AG’s half yearly net profits, which stood at the equivalent of $101m, resulting in a fall of 1% in the price of the Walldorfer’s preference shares on the IBIS electronic trading system – against a market climbing nearly 0.5%. Although the company’s figures were very good – profits up 79.3%, turnover up 67.2%, orders up 97% – traders’ reaction was somewhat muted since the market expected nothing less from the company, especially after the first quarter’s storming results (CI No 2,660). And despite exchange rates working against SAP, it still managed to grow its overseas sales in the half year so that they accounted for 67% of total revenues of $832.3m, compared with a 58% share last year. The company did particularly well in the US, in creasing sales by 85% to $242.3m. But this expansion abroad fuelled growth of the workforce, something the company is concerned about. Last month it said it plans to rein in this growth sharply over the next 12 to 18 months. Nevertheless, it has added 1,178 employees since the end of December to total 6,407 at the end of June. The workforce at foreign subsidiaries rose by 41% to 2,959. As chairman Dieter Hopp told the company’s annual meeting last month (CI No 2,690), business had developed very strongly in the first half: orders rose 97% from year-ago levels to $537.3m and it won 448 new customers including Royal Dutch Shell NV, Philips Electronics NV and Microsoft Corp as users of its R/3 financial software. The Redmonder will use R/3 on Windows NT servers with the SQL Server 6.0 database; it will replace the company’s legacy financial systems worldwide and users around the globe will communicate with a central SQL Server system located in Redmond, Washington. The latest version R/3, version 3.0, is expected in the fourth quarter and likely will boost sales. But ever cautious with its predictions the company said, All indications are that the second half of 1995 will be successful, although it seems unlikely that SAP will sustain the breathtaking rate of growth achieved in the first half of the year.
