SAP Reports Double-Digit Growth in Software and Software-Related Service Revenues for the First Quarter 2010

(PresseBox) (Walldorf, ) .
- SAP AG (NYSE: SAP) today announced its preliminary financial results for the first quarter ended March 31, 2010.

Revenues

- IFRS software and softwarerelated service revenues were €1.95 billion (2009: €1.74 billion), an increase of 12%. Non-IFRS software and softwarerelated service revenues were €1.95 billion (2009: €1.75 billion), an increase of 11% (10% at constant currencies).
- IFRS software revenues were €464 million (2009: €418 million), an increase of 11% (7% at constant currencies).
- IFRS total revenues were €2.51 billion (2009: €2.40 billion), an increase of 5%. Non-IFRS total revenues were €2.51 billion (2009: €2.41 billion), an increase of 4% (3% at constant currencies).

First quarter 2009 Non-IFRS revenue figures exclude a deferred support revenue writedown from the acquisition of Business Objects of €11 million

Income

- IFRS operating profit was €557 million (2009: €307 million), an increase of 81%. Non-IFRS operating profit was €612 million (2009: €396 million), an increase of 55% (47% at constant currencies). In the first quarter of 2009, the IFRS operating income was impacted by restructuring charges of €166 million (Non-IFRS: €160 million) resulting from a reduction of positions.

- IFRS operating margin was 22.2% (2009: 12.8%), an increase of 9.4 percentage points. Non-IFRS operating margin was 24.4% (2009: 16.4%), or 23.6% at constant currencies, an increase of 8.0 percentage points (7.2 percentage points at constant currencies). In contrast to the respective quarter in 2009, the first quarter 2010 was not impacted by restructuring expenses which had, in the first quarter of 2009, negatively impacted the IFRS and Non-IFRS operating margin by 6.9 percentage points and 6.6 percentage points, respectively. However, reorganizations in the first quarter 2010 resulted in severance expenses of €27 million and unused lease space expenses of €9 million, which negatively impacted the IFRS and Non-IFRS operating margin by 1.4 percentage points.

- IFRS profit after tax was €387 million (2009: €196 million), an increase of 97%. Non-IFRS profit after tax was €435 million (2009: €263 million), an increase of 65%. IFRS basic earnings per share were €0.33 (2009: €0.17), an increase of 94%. Non-IFRS basic earnings per share were €0.37 (2009: €0.22), an increase of 68%. The impact, net of tax, of the severance and unused lease space expenses incurred in the first quarter 2010 on the first quarter 2010 IFRS and Non-IFRS basic earnings per share was €0.02. The impact, net of tax, of the restructuring expenses incurred in the first quarter 2009 on the first quarter of 2009 IFRS and Non-IFRS basic earnings per share was €0.09. First quarter 2010 IFRS and Non-IFRS profit after tax and IFRS and Non-IFRS basic earnings per share were also impacted by a lower IFRS and Non-IFRS effective tax rate in the first quarter of 2010 compared to the first quarter of 2009.

First Quarter 2010 Non-IFRS operating profit excludes acquisitionrelated charges and discontinued activities totaling €54 million (2009: €78 million). First quarter 2010 Non-IFRS profit after tax and Non-IFRS basic earnings per share exclude acquisitionrelated charges and discontinued activities totaling €48 million net of tax (2009: €67 million).

"We are excited by our strong momentum and our return to growth in the first quarter," said Werner Brandt, CFO of SAP. "A solid topline performance in combination with an increasing operating margin puts us on track to achieve our financial objective of profitable growth over the long term."

Bill McDermott, co-CEO of SAP added, "The first quarter growth was made possible by all around solid execution in both our large, well established markets and our fast growing emerging markets. We saw strong results from the rapidly expanding demand for SAP BusinessObjects solutions, as well as in our small and midsized enterprise business. We were also pleased by the strong performance in our focus industries as our customers are turning to SAP to help their businesses run better."

"As the environment improves and customers begin to invest for growth again, SAP is extremely wellpositioned because of our broad and consistently integrated portfolio of products supporting business processes and enabling business insight through analytics," said Jim Hagemann Snabe, co-CEO of SAP. "We have the outstanding ability to innovate technology and solutions that work seamlessly together regardless of whether they are delivered on premise, on demand, or on device."

Cash Flow Operating cash flow was €772 million (2009: €1.39 billion), a decrease of 44%. Operating cash flow in the first quarter 2010 was below the prior year comparison, mainly due to our decision to delay billing our customers for the 2010 support fees until customers had communicated whether they chose SAP Enterprise Support or SAP Standard Support - an option offered under the introduction of SAP's twotiered support model. Free cash flow was €715 million (2009: €1.34 billion), a decrease of 46%. Free cash flow was 28% of total revenues (2009: 56%). At March 31, 2010, SAP had a total group liquidity of €3.00 billion (December 31, 2009: €2.28 billion), which includes cash and cash equivalents, restricted cash and short term investments. At March 31, 2010, net liquidity, defined as total group liquidity less bank liabilities, was €2.30 billion.

Business Outlook

SAP is providing the following outlook for the fullyear 2010, which is unchanged from the outlook issued on January 27, 2010:

- The Company expects fullyear 2010 non-IFRS software and softwarerelated service revenue to increase in a range of 4% to 8% at constant currencies (2009: €8.2 billion).
- The Company expects its fullyear 2010 non-IFRS operating margin to be in a range of 30% to 31% at constant currencies (2009: 27.4%).
- The Company projects an effective tax rate of 27.5% to 28.5% (based on IFRS) for 2010 (2009: 28.1%).

Major Customer Wins

In the first quarter of 2010, SAP closed major contracts in key regions.
In EMEA: Boots UK Limited, Daimler AG, Gazprom OAO, Krones AG, VESTAS WIND SYSTEMS A/S; In the Americas: Cooper Tire & Rubber Co., Dole Food Company, Inc., El Palacio de Hierro, Jabil Circuit, Inc., McCain Foods Limited, ConAgra Foods Inc.; In Asia Pacific/Japan: A-DATA Technology Co., Ltd., Hong Tu-San Bao Hi-Tech Co., Ltd., Industry And Commercial Bank of China, Nissha Printing Co., Ltd., Shaanxi Electric Power Corp.

Webcast / Supplementary Financial Information

SAP senior management will host a conference call today at 3:00 PM (CET) / 2:00 PM (UK) / 9:00 AM (Eastern) / 6:00 AM (Pacific). The conference call will be web cast live on the Company's website at http://www.sap.com/investor and will be available for replay.
Supplementary financial information pertaining to the quarterly results can be found at http://www.sap.com/investor.

Any statements contained in this document that are not historical facts are forwardlooking 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 forwardlooking statements. SAP undertakes no obligation to publicly update or revise any forwardlooking statements. All forwardlooking 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 forwardlooking statements, which speak only as of their dates.

SAP AG

SAP is the world's leading provider of business software, offering applications and services that enable companies of all sizes and in all industries to become bestrun businesses. With more than 97,000 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)

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