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The Leader in
Business Software
Solutions
SAP Senior Management Team
Global Investor Roadshow
April 23 – 25, 2003
Safe Harbor Statement
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 “believe,”
“estimate,” “intend,” “may,” “will,” “expect,” and “project” and
similar expressions as they relate to the Company are intended to
identify such forward-looking statements. The Company 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 the
Company’s future financial results are discussed more fully in the
Company’s filings with the U.S. Securities and Exchange Commission
(the “SEC”), including SAP's most recent Annual Report on Form 20-F
filed with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates.
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 2
Agenda
SAP – Leading the Way in
Business Software
Key Financial Data
SAP‘s Leading Business
Plattform
New Customer Business
Reality
2003 Opportunities
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 3
SAP Milestones over 30 Years
One Platform Full Solution
Multi mySAP- Provider for
Solutions: Enterprise
Internet CRM, SCM, etc. Application
Multi-Product Software
Vendor
€7,341 mill.
Revenue Infrastructure
Technologies
€1,892 mill.
Revenue
Client/Server
~29,000
€424 mill. 28,400 Employees
Revenue Employees
R/2 Mainframe
10,000
Employees
€5.1 mill.
Revenue 3,200
60 Employees
Employees
R/1 2,800
7,500
Customers
15,000 19,800
Customers
50 Customers Customers
Customers in 70
€0.3 mill. in 2 in 35 in 120 in +120
Revenue Countries
9 Employees Countries Countries Countries Countries
1972 1979 . . . . .1992 1996 2001 2002
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 4
Improving the Top Line...: CAGR 29% last 12 Years
€ bn
10
CAGR sales: 29%
€7.34 €7.41
8 1%
€6.27 17%
€5.11 23%
6 €4.32 18%
43%
€3.02
4 mySAP Business
59% Suite
R/3 €1.9
€1.38 38%
2
€563m €936m 47%
€362m €425m
33% 66%
42% 18%
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 5
...into the Operating Line*: CAGR 27% last 12 Years
€m €1,686
1,600 €1,471 15%
18%
€1,244
1,400
CAGR Operating income*: 27% 32%
1,200
CAGR Net income**: 26% €942
€901 5%
1,000 16%
€775
61%
800
mySAP Business
€482 Suite
600
46%
€333
400 €230 45%
R/3 €116 98%
200 €88 €76 53%
66% -16%
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
*excl. stock-based compensation and acquisition related charges: 1999 onwards
*excl. extraordinary gains, acquisition related charges, Commerce One impact and other impairment charges
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 6
SAP has continuously gained market share against
key competitors
Total license revenue - Relative Market Shares
(rolling 4 quarters; based on license revenues)
60%
54%
51%
50%
47%
45%
43%
41%
40% 39%
37% SAP
36%
Siebel*
30% Oracle **
Peoplesoft*
19% 20% 20% 19% 19% I2*
20% 18%
17% 17%
17% 16% 16% 16% 15% JDE**
15%
14%
13% 12% 12% 12% 12% 15%
10% 14% 13%
10% 8% 12% 12%
9% 11%
10% 10% 6%
5% 5% 5% 5%
6% 5%
5% 4%
4% 4% 4% 3% 3%
0%
Q2 2000- Q3 2000- Q4 2000- Q1 2001- Q2 2001- Q3 2001- Q4 2001- Q1 2002- Q2 2002-
Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003E
Analysis based on Company Data and Financial Analysts Estimates
* Forecast by Company Data and Financial Analysts (Siebel, Peoplesoft, I2, JDE)
** Fiscal year is not calendar year - Comparison based on most recent quarter (e.g. SAP Q1 vs. Oracle Q3)
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 7
The Global Leader in Business Software Solutions
30 years of success
Unparalleled global spread with
60,000+ installations in 120+
countries
19,000+ companies run SAP – the
largest installed base in the
enterprise software sector
Strong focus on R&D with ~8,200
developers – a bigger investment
than any other business software
vendor
Strategic vertical solutions for 23
Industries
The most complete business
software suite
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 8
Agenda
SAP – Leading the Way in
Business Software
Key Financial Data
SAP‘s Leading Business
Plattform
New Customer Business
Reality
2003 Opportunities
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 9
Key Achievements in Q1 2003
Q1 2003 total revenues are up 1% at constant currencies
Q1 2003 net income up 186% yoy
Q1 2003 pro forma operating margin increased 6 percentage points to 20%
Strong performance in US and Japan
SAP is the # 1 enterprise software provider in the US
SAP extended global market share sequentially by another 3 percentage
points
Free Cash Flow increased 45% and was 50% of Q1 2003 revenues
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 10
Key Figures – 1st Quarter 2003
Q1 2003 Q1 2002
€ millions € millions %
License revenues 352 402 -12
-4**
Total revenues 1,520 1,658 -8
1**
Operating income 336
298 186 60
- Margin as a % of sales 20 11 9*
Income before income taxes 311 127 145
- Margin as a % of sales 20 8 12*
Net income 186 65 186
- Margin as a % of sales 12 4 8*
Earnings per share (in €) 0.60 0.21 186
* percentage points
** % currency adjusted – actuals 2003 converted with the exchange rates of 2002
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 11
Key Figures – 1st Quarter 2003
Q1 2003 Q1 2002
€ millions € millions %
EBITDA(2) 348 240 45
- Margin as a % of sales 23 14 9*
Pro forma Operating income excl. stock- 304 238 28
based comp. and acquisition-related charges(1)
- Margin as a % of sales 20 14 6*
Effective tax rate 40% 47% -7*
Pro forma EPS excluding stock-based
compensation, acquisition-related charges, and 0.64 0.35 83
impairment-related charges(1)
* percentage points
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 12
License Revenue by Region – 1st Quarter 2003
License Revenue Q1 2003: €352 mill.
-12%* | -4%**
Americas €88 m
-2%* | +26%**
of which US €71 m
EMEA €205 m +1%* | +24%**
-23%* | -22%**
APA €59 m
+31%* | +49%**
of which Japan €35 m
of which Germany €86 m +133%* | +153%**
-13%* | -13%**
* Y-o-y growth
** % currency adjusted – actuals 2003 converted with the exchange rates of 2002
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 13
Group Sales by Region – 1st Quarter 2003
Total Revenue Q1 2003: €1,520 mill.
-8%* | +1%**
Americas €468 m
-20%* | +1%**
of which US €375 m
EMEA €854 m -20%* | -2%**
-4%* | -3%**
APA €198 m
+7%* | +20%**
of which Germany €363 m
-3%* | -3%** of which Japan €111 m
+25%* | +37%**
* Y-o-y growth
** % currency adjusted – actuals 2003 converted with the exchange rates of 2002
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 14
License Revenue Analysis – by Solution Q1 2003
Total License Revenue Q1 2003 : € 352 mill.
mySAP Financials / mySAP SCM
mySAP HR 24%* (+4**)
33%* (-10**)
mySAP CRM
21%* (+3**)
mySAP BI/ mySAP
Enterprise Portal/
mySAP SRM/
Marketplaces mySAP PLM
15%* (+4**) 7%* (-1**)
* Of license revenue
** Y-o-Y growth in percentage points
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 15
License Revenue Analysis – by Industry Q1 2003
Consumer Industries
14% (-4%*)
Discrete Industries
24% (3%*)
Service Industries
25% (0%*)
Process Industries
24% (4%*)
Public Services Financial Services
7% (-1%*) 6% (-2%*)
* Compared to FY 2002
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 16
Balance Sheet & Cash Flow Analysis
* percentage points
in € mill. Mar 31, 03 Dec 31, 02
** days
%
DSO 84** 87** -3**
Q1 2003 Q1 2002 %
Change in Working Capital 535 360 49
Operating Cash Flow 793 546 45
CapEx -37 -58 -36
Free Cash Flow 756 488 55
Free Cash Flow as a % of Revenue 50% 29% 21*
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 17
Agenda
SAP – Leading the Way in
Business Software
Key Financial Data
SAP‘s Leading Business
Plattform
New Customer Business
Reality
2003 Opportunities
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 18
SAP Product Portfolio: Best of Suite
SAP for <Industry> SAP for Aerospace & Defense ...
SAP for Automotive
SAP Packaged Service Management for <Industry> ...
Solutions Financial Insights for <Industry>
SAP xApps mySAP Business Suite SAP Smart
Business Solutions
SAP xApp Resource mySAP ERP mySAP Enterprise
& Program Mgmt Portal mySAP SAP
mySAP Financials
mySAP Business All-in-One Business
SAP xApp Product mySAP HCM
Intelligence One
Definition
mySAP CRM
SAP xApp Mergers & mySAP Marketplace
Acquisition mySAP SCM
SAP R/3 Enterprise*
... mySAP SRM
mySAP PLM
SAP NetWeaver SAP
Business
SAP Enterprise Portal SAP Business Intelligence ---
One
SAP Master Data Mgmt SAP Exchange Infrastructure ... Server
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 19
Value for Our Customers – Products + Services
PRODUCTS +
SERVICES
SAP PARTNER &
CUSTOMER SERVICE NETWORK
Global
Educational
Prof. Custom
Services & Hosting Support
Services Develop-
Products
ment
Business Maps & Engagement Tools
Ramp Up
REAL VALUE
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 20
SAP NetWeaver - The Business Foundation
SAP NetWeaver Unifies and aligns people,
PEOPLE INTEGRATION information and business
Multi channel access processes
Integrates across
COMPOSITE APPLICATION FRAMEWORK
Portal Collaboration
technologies and
LIFE CYCLE MANAGEMENT
INFORMATION INTEGRATION organizational boundaries
Bus. Intelligence Knowledge Mgmt
A safe choice with full .NET
and J2EE interoperability
Master Data Management
The business foundation for
PROCESS INTEGRATION
SAP and partners
Integration Bus. Process
Broker Mgmt
Powers business-ready
solutions that reduce custom
APPLICATION PLATFORM integration
J2EE ABAP Its Enterprise Services
Architecture increases
DB and OS Abstraction
business process flexibility
...
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 21
Solutions for Small to Midsize Businesses
SAP CHANNEL PARTNERS
Excellent industry knowledge and long-term relationship with SAP
Creation and deployment of complete solution packages
Based on mySAP Business Suite Standard software package
SAP Best Practices Covering business needs for
accounting, reporting, logistics,
SAP One Server Toolkit sales force automation, and more
Vertical Solution Development Easy to configure and easy to use
Toolkit Low investment and low cost of op.
3,500+ customers, 200+ partner 1,300+ customers, 100+ partner
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 22
SAP xApps:
Orchestrate New Business Processes in a Heterogeneous Landscape
Merger & Acquisition
Events (Context & Insight)
Business Views,
Resource &
Program Mgmt
Employee Relationship Management
Sourcing Desk-
top/
Legacy HR Finan- PLM E-Proc SCM CRM Office
cials Support
Functional Transactions (Hindsight)
Cross-functional, composite, collaborative, integrative applications
Orchestrating heterogeneous underlying sources
Decoupled from specific vendor applications
Built on a unification platform for people, information and processes
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 23
xApp Example: Resource and Program Management
Resource and Program Management
Search Talent
Skill Catalog
Assignment
Projects
Pipeline
Assess
Assess
Project
Project
People
Initiate
& DB
Coll.
Projects HR Finan- PLM Time Mail/
(Project (Skills, cials (Product) (Activity Calendar
Data) Payroll) (Budget) Data) (Communi-
cation)
Initiatives Key technologies used
Optimize product portfolio Collaboration/Integration
Improve company competitiveness Visualization
Increase employee satisfaction Knowledge Management
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 24
Agenda
SAP – Leading the Way in
Business Software
Key Financial Data
SAP‘s Leading Business
Plattform
New Customer Business
Reality
2003 Opportunities
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 25
New Customer Business Reality
Reduce costs
Improve efficiency by better processes & practices
Decrease TCO of IT solutions
Faster ROI on IT investments
Leverage existing investments, i.e. integrate them
Solutions aimed at business pain points, not "three letters
acronyms"
Adaptive Business Solutions
Service-based solutions for competitive strategies
Solutions that do not slow down the evolution of business
Better visibility
Business performance management
“Real Time" (event driven) business
SAP meets customer requirements
Solutions for enterprises of all sizes
Breadth and depths of products based on technology
leadership
Next generation of applications (xApps)
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 26
Reduce Total Cost of Ownership
How to capitalize on existing IT investments ?
ERP legacy Challenge:
~15 systems
Cost of Integration
SAP R/3
15,000 interfaces
~30 systems,
ERP non-SAP Versions 3.1I - 4.6B Development cost:
~25 systems,
different versions
~ 75,000 USD /
E-Procurement interface
10 units
Costs of
Technical SAP Markets ownership:
systems Enterprise Buyer ~ 10,000 USD /
Professional Edition year / interface
Trading e-Sales Overall:
Collaborative 150 Mio. USD / year
Engineering
... through SAP integration of heterogeneous systems !
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 27
Value for Our Customers – Reduce TCO
Real Life Customer Example
Customer Potential Cost Savings in Shared Services (per year)
Global SAP NetWeaver > € 53 million
Enterprise SAP Enterprise Portal > € 20 million
Manufacturing
Industry
SAP Financials > € 48 million
SAP Human Resources > € 3 million
Division 1 Potential Cost Savings (per year)
Division 1
Division 2 Procurement (MRO) > € 7 million
Division 2
Division 3
Engineering (PLM) > € 15 million
Division 4 Division 3
Complete Logistics Processes (SCM) > € 60 million
Industry
Solution Division 4
CRM > € 7 million
Total € 213 million
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 28
Reduce TCO via SAP NetWeaver (XI)
Real Life Customer Example
Misc
13% IT
Infrastructure
20%
Licences
IT Costs 5%
€500 million
Remaining Operations Implementation
Operational Interfacing Remaining
40% 22% Costs of Implem.
Costs Costs
Integration Costs
50% 50%
67% 33%
Operations Implementation
€200 million €110 million
Potential Cost Savings Potential Cost Savings
for Interfaces (35%): €35 million for Integration (25%): €18 million
SAP NetWeaver (XI) is able to reduce IT costs from 1.7%1) to 1.5%2) of overall
revenue; this means cost savings of €53 million per year
1) Customer‘s Estimate
2) Industry Benchmark
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 29
Deliver Better ROI
cash
Leverage IT
Reduce Initial flow
Landscape
Investments
Improve
Accelerate Time-to- Efficiency
Benefit
Improve Efficiency
Accelerate time
Time-to-Benefit
Leverage IT
Infrastructure
Reduce Initial
Investments
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 30
Divergence The Next Move to Adaptive Business Solutions
Technology Technology
Sea Change Sea Change
SCM
CRM
HR
ERP
PCAs*
Convergence
1993 2003
PCA* = Packaged Composite Application (as delivered through SAP xApps)
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 31
Web Services
A Web service is a modular application functionality that can be
published
discovered and
invoked over the internet using open Internet standards
Analysts are telling our
clients to “Demand Web 2 1
Service Service
services interfaces from Discovery Publication
packaged apps vendors” Service Directory
and to verify that “the Web
services interfaces expose
all the objects they need 3
access to” – Forrester, Service Invocation
December, 2001
Service Requester Service Provider
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 32
Web Services: Examples
A Web Service is a programmable self-contained, self-describing,
modular application functionality that can be published, discovered
and invoked through open Internet standards.
Intelligent product catalog Publish and analyze financial
search reports (XBRL based)
Product availability check Finance: Derivatives trading
Pricing inquiry Oil&Gas: Joint venture
reporting
Customer credit check
Electronic bill presentment and
Order status check payment
Inventory check Matching vacancies and job
applicants profiles
Vendor managed inventory
Demand forecasts, stock Postal service address check
replenishment …
Automated Web searches
Dynamic bidding (Google)
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 33
Web Services
Assemble enterprise web services and web services from partners
to build flexible event-driven business scenarios.
Role-based
User Interfaces
Composite
Business
Scenarios
Service request Price ATP Delivery delay
Focused
Operational
"Nodes"
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 34
Adaptive Services-Based Business Solutions
Services Shared Services
“on demand“ Corporate Finance
HR
Scaled for
Division ..
Channel Mgmt. Your Subsidaires
Division 1
mySAP All-in-One
Designed
Web mySAP ERP
for Your
Services SAP Business One
Industry
VMI
Ready for
Your Future
Production Distribution Service
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 35
Agenda
SAP – Leading the Way in
Business Software
Key Financial Data
SAP‘s Leading Business
Plattform
New Customer Business
Reality
2003 Opportunities
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 36
Summary
In a challenging market environment, SAP is focused on:
Increasing market share
SAP’s worldwide market share compared to the Top 5 competitors increased
to 54% in Q1 2003 from 51% in Q4 2002 (on a rolling four quarter basis)
SAP expects to continue to gain market share in 2003
Improving profitability
Operating income (excluding stock based compensation and acquisition-
related charges) went up by 28% in Q1 2003 despite an 8% decrease in
revenues
2003 guidance focuses on profitability
Market readiness
Increased customer satisfaction (especially in the U.S.)
Increased partner engagement with SAP
Key performers come back to SAP
Comprehensive product set backed by strong technology offering
(SAP NetWeaver)
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 37
Outlook 2003
While the world economy remains difficult and the geopolitical
environment is still unpredictable, SAP has not changed its
guidance for 2003. The Company expects to continue to gain
market share, and based on modest revenue growth, continued
cost containment and customer buying patterns in line with
normal business seasonality, the Company continues to expect
its 2003 pro forma operating margin,1 excluding stock-based
compensation programs and acquisition-related charges, to
increase by around 1 percentage point compared to 2002. Pro
forma earnings per share1 for 2003, excluding stock-based
compensation, acquisition-related charges and impairment-
related charges are expected to be in the range of €3.45 per share
to €3.60 per share.
Management does not provide its guidance on operating margin and earnings per share based
on US-GAAP measures because these measures include expenses like stock based
compensation, impairment related charges and acquisition related charges. Management
deems these expenses as either not being meaningful to fully assess the financial
performance of our core operations or as highly dependent on the movement of SAP’s share
price, or the share price of companies we acquire or in which we invest.
SAP AG 2003 Global Roadshow, EMEA, April 2003, WB 38
The Leader in
Business Software
Solutions
SAP Senior Management Team
Global Investor Roadshow
April 23 – 25, 2003
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