QUARTERLY REPORT Q3/2002 WE MAKE IT RUN

Transcription

1 SAP SI AG ly report QUARTERLY REPORT Q3/2002 WE MAKE IT RUN

2 Key performance indicators for the financial statements as of September 30, 2002 (US-GAAP) SAP Systems Integration AG July 1, 2002 July 1, 2001 Change over Jan. 1, Jan. 1, Change over - Sept. 30, Sept. 30, 2001 previous year in % - Sept. 30, Sept. 30, 2001 previous year in % or percentage points* or percentage points * Key revenue/earnings figures Total revenue in thousands 73,296 68, % 219, , % Restructuring costs 5,274 0 n.a. 9,769 0 n.a. Operating profit before restructuring costs 10,923 8, % 21,430 28, % Operating profit before restructuring costs as a percentage of total revenue 14.9% 12.0% 2.9%* 9.8% 14.5% -4.7% * Operating profit in thousands 2) 5,649 8, % 11,661 28, % Operating profit as a percentage of total revenue 2) 7.7% 12.0% -4.3%* 5.3% 14.5% -9.2% * EBITDA based on total revenue in thousands 6,875 8, % 14,856 31, % EBITDA as a percentage of total revenue 9.4% 13.1% -3.7%* 6.8% 16.4% -9.6% * EBIT in thousands 2) 5,626 7,671-26,7% 10,897 28, % EBIT as a percentage of total revenue 2) 7.7% 11.2% -3.5%* 5.0% 14.5% -9.5% * EBT in thousands 2) 6,468 8, % 13,837 31, % EBT as a percentage of total revenue 2) 8.8% 12.9% -4.1%* 6.3% 16.4% -10.1% * Key balance sheet figures 1) Equity-to-total-assets ratio 79.9% 78.5% 1.4%* 79.9% 78.5% 1.4% * Cash-to-total-assets ratio 39.7% 39.9% -0.2%* 39.7% 39.9% -0.2% * Working capital in thousands 142, ,787 8,8% 142, , % Other key figures Cashflow in thousands 1) 12,242 24, % 12,242 24, % Average number of employees 1,816 1, % 1,837 1, % Revenue per employee in thousands % % 1) All figures as of September 30 2) Figures for the previous year refer to figures before goodwill amortization

3 HIGHLIGHTS DEAR STOCKHOLDERS, AND BUSINESS PARTNERS, Operating profit margin before restructuring costs increases in the third quarter to 14.9 % 13.0 % increase in revenues within the Group (excluding COPA 4.3 %) to million in the first 9 months Restructuring program taking effect Major orders from BHW, Bitzer and Dusseldorf municipal authorities Guidance for 2002 confirmed Following a rather weak first half of the year, the company s economic situation has improved considerably in the third quarter. We have successfully continued our consolidation program and are once again set to see a clear increase in our profitability: SAP SI increased its operating profit margin within the Group to 14.9% in 3Q 2002 before restructuring costs, compared with 12.0% in the same period of the previous year and 5.9% in the previous quarter. This increase shows that the measures taken to reduce costs as part of the four-point program started this year are taking effect and that SAP SI has returned to double-figure operating margins. The four-point program was launched at the start of the year and includes measures for reducing costs, optimizing resource management, enhancing performance and strengthening sales. In the third quarter Group revenues rose from 68.3 million to 73.3 million, an increase of 7.3% compared with the previous quarter. Excluding COPA which has been consolidated since January 1, 2002, revenues in the quarter under review fell to 67.2 million, a drop of 2.0% on the previous quarter. At 152 million, order backlog remained on a par with the previous quarter ( 151 million, same quarter in the previous year 123 million), despite difficult market conditions. One of the measures taken to strengthen sales has been the stepping up of our key account management. This has contributed to this improvement. By September 30 the number of employees had fallen to 1,799 (June 30, 2002: 1,831). A further 47 employees had left SAP SI by this date or were released pending termination of their employment contract. This development too is a result of the four-point program, which involves us adapting our resources to suit market demand. In view of the sluggish market in certain sectors we decided in the third quarter, in addition to the downsizing already announced in the first half of the year and now more or less complete, to cut a further 80 to 100 jobs by the end of the year. The slow market is a consequence of the current weakness in the economy and a fundamental upheaval in the IT consulting market. Market requirements are changing Customers are looking for the best means to adapt their IT system landscapes - which are mostly heterogeneous and have grown up organically over time to ever changing business processes. In more and more cases, IT projects need to provide a Return on Investment (ROI) within a short period of time. The average volume of IT projects is falling because it is no longer a case of customers requesting a defined level of performance and then simply meeting the cost, but rather of providing the best possible level of performance that can be achieved within a specified budget. In the current climate of increasing economic intermeshing of international groups, more and more companies are looking for an IT partner who can advise them on all their 3

4 IT needs and help them set up an IT infrastructure geared to the future and one that can also do this beyond the boundaries of their own company. SAP SI is well equipped With the technological expertise at our disposal to embed SAP and non-sap components into existing IT environments efficiently, and therefore profitably, we are able to fulfil one of the key fundamental requirements for successful integration projects. In this regard, SAP SI also profits from its closeness to SAP. SAP SI has a great deal of industry know-how. This knowledge provides us with a sound basis from which to advise our customers on adapting existing and new systems to their business processes. According to two recently published META Group studies: In both e-business services and business intelligence projects, potential users in Germany already see SAP SI as a leading player thanks to its high performance and reputation. We want to considerably expand our services in the sectors IT strategy consulting as well as the implementation, administration and operation of IT systems with focus on industries experiencing strong growth. This should result in even better solutions for our customers in terms of performance, added value and investment security. Operating business SAP SI won a large number of major orders in the last quarter and was able to further consolidate its market position in certain key industries: Financial Services: SAP SI has signed an IT services contract with the BHW- Bausparkasse AG, Hameln. The value of the order in millions runs into double figures. Since the start of the year, SAP SI and BHW have been jointly developing an application system for the building society and home finance sector using the industry standard solution mysap Banking as a strategic platform. By 2005, the new application from SAP SI will replace the relevant systems. The total solution will eventually be incorporated into the BHW corporate portal and is intended to be used by all companies in the BHW Group. The solution is being designed to suit the standard processes of the building society/home finance sector. The system is being developed using a modular, flexible approach based on the very latest SAP standard technologies. Manufacturing: SAP SI is handling the introduction of mysap.com for BITZER Kühlmaschinen GmbH, Sindelfingen, one of the world s largest manufacturers of cooling and refrigeration technology. For this project, BITZER has opted for SAP SI s all-round service which includes consulting, implementation and implementation hosting of the development systems. Within the mysap.com system environment, SAP SI is providing BITZER with a corporate portal that, among other things, gives BITZER staff all over the world constant access to a business warehouse that supports both knowledge management and PLM (Product Lifecycle Management) solution components. SAP SI has introduced the logistics components of the ERP system SAP R/3 and the planning tool SAP Advanced Planner & Optimizer (SAP APO) into the Condensors and Inductors divisions of EPCOS AG. These two divisions of Europe s largest manufacturer of electronic components now have their first standardized system environment, where all sales, production, procurement, billing and controlling processes are seamlessly integrated. As part of the rollout, these will be implemented into all other divisions and sites worldwide in order to provide a global standard system environment. Sales went live in Asia on October 7, 2002 at the Singapore, Hong Kong and Shanghai sites. Over the next few months, other production sites will also benefit from the new solution, which was developed in Heidenheim. Heidelberg Web Systems, LLC, USA, partnered with SAP SI America in France, the United States and Netherlands to provide a business systems platform to improve and standardize processes and information for its global business operations. With SAP SI America s consulting expertise, the mysap.com implementation will improve business process efficiencies in supply chain management, financial applications and management controlling functions. The new system enabled more than 1,800 users at Heidelberg Web Systems to have ready access to strategic business information and applications across global operating sites. 4

5 Utilities: Dusseldorf municipal authorities have commissioned SAP SI to integrate the industry solution mysap Utilities into their existing IT environment. SAP SI will function as general contractor in this three-year project. The project includes implementing mysap Utilities together with data transfer from the legacy systems, upgrading the municipal authorities SAP R/3 system to a new release and linking in third-party systems. SAP SI s tasks also include developing an archiving concept and implementing it within a non-sap document management and archive system. Once the work has been completed, the SAP industry solution will be used to manage all 520,000 tariff and special contract customers. Up to 400 staff will then benefit from the mysap Utilities functions. SAP SI is currently advising the project team at Vorarlberger Kraftwerke AG (VKW) in Bregenz, which is in the process of introducing the SAP solution mysap Utilities and SAP Business Information Warehouse in its electricity sales and power grid operations. Revenues and operating profit During the first 9 months of the fiscal year, Group revenues rose from million to million, an increase of 13% compared with the same period in the previous year million of this is attributable to COPA, consolidated for the first time this year, and 26.9 million to SAP SI America (previous year: 15.6 million). The operating profit in the first 9 months was 11.7 million (previous year: 28.2 million). This corresponds to an operating profit margin of 5.3% compared with 14.5% in the same period of the previous year. Excluding restructuring costs, the operating profit for the first 9 months amounts to 21.4 million and the operating profit margin is 9.8%. COPA contributed 2.1 million to the operating profit. SAP SI America achieved an operating profit of 2.4 million after a loss of 2.1 million the previous year. In the third quarter, SAP SI s total revenues were 73.3 million (previous year: 68.3 million), of which 6.1 million came from COPA and 7.9 million from the USA (previous year: 6.3 million). The Group operating profit in the third quarter was 5.6 million (previous year: 8.2 million). This corresponds to an operating profit margin of 7.7% (previous year: 12.0%). Excluding restructuring costs, Group operating profit is 10.9 million and the margin 14.9%. This means that, as announced earlier, SAP SI s operating margins in the third quarter are once again well into double digit figures. COPA s contribution to the operating profit came to 0.5 million, SAP SI America s to 1.0 million (previous year: million). This corresponds to operating profit margins of 8.0% (COPA) and 13.2% (SAP SI America, same quarter previous year -21.3%). Compared with the second quarter 2002, the SAP SI divisions Germany/ Switzerland, USA and COPA fared differently in the third quarter: While revenues in Germany/Switzerland rose by 5.4% from 56.3 million to 59.3 million and COPA revenues by 9.2% from 5.5 million to 6.1 million, SAP SI America revenues fell by 18.2% from 9.7 million to 7.9 million. This drop in sales was caused by the weaker dollar and the use of fewer third-party service providers, as planned. Operating profit increased significantly in the third quarter ( 5.6 million) compared with the second quarter ( 0.5 million). SAP SI Germany/Switzerland achieved the best earnings contribution ( 4.1 million) following a loss of 0.7 million in the second quarter. The operating profit margin was therefore 6.9% (-1.2% in the previous quarter). The significant rise in operating profits is due not only to the increase in revenues, but also to the cost reductions achieved through the introduction of cost-cutting measures. Without the restructuring costs which came to 5.3 million, the operating profit margin in Germany/Switzerland in the quarter under review would already have been 15.9%. The operating profit of COPA fell to 0.5 million because of higher marketing and sales outlay, a drop of 0.1 million compared with the second quarter, while in the USA it rose from 0.5 million to 1.0 million, mainly due to the one-off restructuring costs incurred in the second quarter. 85.0% of the Group s quarterly revenues (previous year: 85.6%) came from Consulting and Project Development business, 12.6% (previous year: 10.5%) from Outsourcing/Application Services business and 2.4% (previous year: 3.9%) from product business. Costs and prices Costs in the quarter under review increased to 67.6 million, a rise of 12.6% compared with the previous year ( 60.1 million). This includes 5.6 million for COPA and provisions of 5

6 5.3 million for implementing the up to 100 additional job cuts already mentioned. These restructuring costs consist primarily of redundancy costs for employees and managers who have either already left the company or are leaving in the next few months. Adjusted for the restructuring costs and costs incurred by COPA and as such comparable with the same quarter in the previous year, costs fell by 5.5% in the third quarter from 60.1 million to 56.8 million. Due to the competitiveness of the market, there is continued price pressure in the field of standard IT consulting services business. However, SAP SI is able to avoid much of this pressure in segments outside standard IT consulting. Earnings per share Consolidated earnings per share after minority interests for the reporting period amount to 0.10 (previous year: 0.17 before goodwill amortization and after goodwill amortization). Balance-sheet structure The balance-sheet total at September 30, 2002 amounted to million (December 31, 2001: million). At million, liquid assets accounted for 39.7% of the balance-sheet total compared with 42.8% on December 31, Fixed assets increased slightly to 92.3 million (December 31, 2001: 91.5 million). This increase is mainly due to the acquisition of a further 25% share of COPA GmbH, Wesel. While revenue figures were higher, it was possible to reduce receivables relating to deliveries and services and receivables vis-à-vis affiliates by 11.0% to 57.9 million (December 31, 2001: 65.1 million). The increase in other assets by 10.7 million compared with December 31, 2001 was mainly due to tax prepayments ( 9.7 million). Accruals mainly consist of insurance contributions and contributions to the support fund for SAP SI employees. Equity showed an increase of 6.6 million compared to December 31, 2001, mainly due to profits achieved during the first 9 months. The equity-to-total-assets ratio increased to an impressive 80% (December 31, 2001: 77%). Provisions and liabilities fell by 11.8 million compared with December 31, This reduction is mainly due to the reduction in tax commitments. Cash flow The cash inflow from operating activities over the first 9 months was 12.2 million. The change in funds from ordinary operating activities was million and is attributable in particular to the drop in liabilities and provisions ( million). Improved receivables management reduced receiv- Development of Equity thousands No. of Comprehensive Accumulated other Retained Capital Subscribed Total shares Income Comprehensive earnings stock Capital Income thousands December 31, , , ,524 35, ,933 Operating profit 7,453 7,453 7,453 Currency translation differences -439 Other Comprehensive Income Comprehensive Income 7,014 Consolidation of COPA GmbH September 30, , , ,070 35, ,493 6

7 ables and other assets by around 5.6 million. As a consequence, the Days Sales Outstanding (DSO) fell to 64 days from 72 days in the same period of the previous year. Investment activities and in particular the acquisition of COPA GmbH, Wesel increased the cash outflow by a further 8.4 million. Financing was entirely through own funds. This produced a net change in cash and cash equivalents of million as of September 30, 2002, resulting in cash and cash equivalents of million (December 31, 2001: million). Research and development activities No significant research and development activities took place in the third quarter. Workforce On September 30, 2002, SAP SI employed 1,799 people, including 153 at COPA and 109 in the USA. On the same reporting date in the previous year, SAP SI employed 1,620 people, including 128 in the USA. Due to the implemented restructuring program, the workforce has fallen by 32 since June 30, By the end of the year, as a result of the weak markets, the number of jobs in the Group will be reduced to below 1, Development of employee numbers at SAP Systems Integration AG 1, ,540 1,854 1,831 1,799* , ,579 1,537 Dec. 31, 01 March 31, 02 June 30, 02 Sept.30, 02 SAP SI (D/CH) SAP SI America LLC COPA GmbH *) A further 47 employees had left SAP SI by September 30 or had been released pending termination of their employment contract. Investments Under the four-point program, the company is maintaining its policy of minimal new investment. Total investments (excluding acquisitions) in the first nine months of 2002 came to 3.2 million (previous year: 4.4 million). Of this, 2.1 million was invested in hardware and other office and plant equipment and a further 1.1 million in the acquisition of intangible assets. Changes in the executive organs On July 1, 2002, Joachim Müller was appointed the new Chief Financial Officer (CFO) on the SAP SI Executive Board. Until recently, he held the post of Vice President Finance & Controlling at Software AG where he managed the Finance Department worldwide and played a key role in the company s listing on the stock market in The responsibilities of the CFO will continue to include Controlling, Finance, Investor Relations, Mergers and Acquisitions/Legal, Facilities Management and Internal Technical Services. The SAP SI Supervisory Board has appointed Dr. Bernd- Michael Rumpf Chairman of the Executive Board of SAP SI with effect from September 2, Dr. Rumpf has been a Member of the Executive Board since February this year. Previously, as Regional Director at SAP AG, he worked in a number of areas including the subsidiaries SAP Retail Solutions, SAP CRM Consulting and Steeb Anwendungssysteme. Equity holdings The total number of shares as of September 30, 2002 remained unchanged at 35.8 million. At that date the members of the Company s organs held the following shares and rights: 7

8 Equity holdings Company organs and SAP SI AG as of September 30, 2002 Name Number Number Other of shares of CB*) rights Supervisory Board: Léo Apotheker Dr. Werner Brandt Frank Ficker Prof. Dr. Henning Kagermann Thomas Maik Nestler Richard Stewart Executive Board: Ulrich Assmann Alfred Ermer Joachim Müller Dr. Bernd-Michael Rumpf SAP Systems Integration AG 0 n. a. 0 *) CB = convertible bonds of SAP SI AG Outlook Due to the current market situation we are aiming for profitability rather than strong growth in the fourth quarter, too. We can confirm our revenue and earnings goals for the whole of fiscal 2002 announced in July this year: We are expecting an increase in revenue of 9 to 12% and an operating profit margin before restructuring costs also between 9 and 12%. The Executive Board and the Supervisory Board will adopt the SAP SI Corporate Governance guidelines in the fourth quarter. SAP SI is to adhere to the German Corporate Governance Codex and the Corporate Governance guidelines for the SAP Group. Transparency, high-quality reporting and the best possible information for stockholders about the company s prospects for the future therefore remain the primary goals of our financial communication. Performance In view of the long-term image crisis on the Neuer Markt, Deutsche Börse AG (DBAG) has announced two new stock exchange listing segments at the end of September Prime Standard and Domestic Standard. The Neuer Markt and SMAX segments will be closed at the end of The new segments will allow DBAG to set higher quality requirements for the companies listed there. We welcome these changes and will call for SAP SI to be included in the international Prime Standard segment as soon as possible. We already meet all the known criteria. This, too, emphasizes our determination to achieve maximum transparency for our stockholders both at home and abroad. Dresden, October 2002 The Executive Board Performance of SAP SI shares The price of SAP SI shares was unable to escape the downward trend on the Neuer Markt in the third quarter and had fallen to 6.58 by September 30, 2002 (Xetra closing price, source: Deutsche Börse). Since the start of the year, the price of SAP SI shares has lost around 71% and as such has been unable to free itself from the weakness in the market as a whole. The Nemax50 and Nemax IT-Service indexes fell in the same period by around 71% and 63% respectively. SAP SI AG NEMAX50 NEMAX IT-Services 120 % 100 % 80 % 60 % 40 % 20 % Jan. 02, 02 Jan Feb. 27, 02 March 27, 02 April 28, 02 May 27, 02 June 24, 02 July 22, 02 Aug. 19, 02 Sept. 16, 02 8

9 TABLES Income Statements Balance Sheets Statement of Cash Flows Structured quarterly reports Deutsche Börse AG has issued guidelines on the publication of Structured quarterly reports with effect from July 1, This SAP SI 2002 report is based on these guidelines. The existing balance-sheet structure has been retained in order to ensure uniformity of reporting throughout the SAP Group. The Income Statement, Statement of Cash Flows and segment reports have been created in accordance with the rules for Structured quarterly reports. Accounting principles SAP SI s consolidated financial statements as contained in this quarterly report have been prepared according to the US Generally Accepted Accounting Principles ( US-GAAP ). The consolidated financial statements include the following subsidiaries: SAP Systems Integration America LLC, SAP Systems Integration America Holding Inc., SAP Systems Integration (Schweiz) AG and COPA GmbH. The figures for the previous year include SAP Systems Integration AG, as well as the subsidiaries in Switzerland and the USA. Figures for the previous year The comparative figures for the previous year refer to the consolidated financial statements and do not conform to the pro forma statements during this period. The differences in the balance sheet derive from the value for goodwill. In the Statement of Cash Flows the figures have been presented in a way that corresponds to the financial statements as at December 31, In other words, the previous years values have been calculated correspondingly and shown in a new form. 9

10 Consolidated Income Statement (US GAAP) SAP Systems Integration AG ly report III/2002 ly report III/2001 Change over July 1, 2002 Sept. 30, 2002 July 1, 2001 Sept. 30, 2001 previous year in % thousands thousands Software revenue 470 1, % Maintenance revenue 1, % Revenue from products 1,740 2, % Revenue from services 61,581 56, % Outsourcing/Application Services 9,240 7, % Other revenue 735 1, % Revenue 73,296 68, % Product costs , % Service costs -58,448-52, % Cost of revenue -59,250-54, % Gross profit/loss 14,046 13, % Selling and marketing expenses -4,178-2, % General and administrative expenses -4,181-3, % Research & Development % Other operating income and expenses % Total costs -67,647-60,060 12,6% Operating profit/income/loss before amortization of goodwill 5,649 8, % Amortization of goodwill 0-11, % Operating profit/income/loss after amortization of goodwill 5,649-3, % Interest income and expenditure 842 1, % Foreign currency exchange gains/losses % Other income/expense % Result before income taxes 6,468-3, % Income tax -2,629-2,780-5,4% Net income/loss before minority interest 3,839-5, % Minority interest n.a. Net income/loss 3,673-5, % Earnings per share Net income per share before goodwill amortization (basic/diluted) 0.10/ / %/-41.2% Weighted average shares outstanding (basic/diluted) 35,800,000/35,800,000 35,800,000/35,800, %/0.0% 10

11 Consolidated Income Statement (US GAAP) SAP Systems Integration AG 9-month-report month-report 2001 Change over Jan. 1, Sept. 30, 2002 Jan. 1, Sept. 30, 2001 previous year in % thousands thousands Software revenue 1,231 3, % Maintenance revenue 3,737 2, % Revenue from products 4,968 5, % Revenue from services 187, , % Outsourcing/Application Services 25,101 18, % Other revenue 1,927 2, % Revenue 219, , % Product costs -2,782-3, % Service costs -171, , % Cost of revenue -174, , % Gross profit/loss 44,652 48, % Selling and marketing expenses -13,593-7, % General and administrative expenses -18,864-10, % Research & Development , % Other operating income and expenses % Total costs -207, , % Operating profit/income/loss before amortization of goodwill 11,661 28, % Amortization of goodwill 0-35, % Operating profit/income/loss after amortization of goodwill 11,661-7, % Interest income and expenditure 2,940 3, % Foreign currency exchange gains/losses % Other income/expense % Result before income taxes 13,837-3, % Income tax -5,781-11, % Net income/loss before minority interest 8,056-15, % Minority interest n.a. Net income/loss 7,453-15, % Earnings per share Net income per share before goodwill amortization (basic/diluted) 0.21/ / %/-62.5% Weighted average shares outstanding (basic/diluted) 35,800,000/ 35,800,000 35,800,000/ 35,800, %/0.0% 11

12 Comparison of Consolidated Balance Sheets (US GAAP) ASSETS Sept. 30, 2002 December 31, 2001 Sept. 30, 2001 Change Sept. 30, 2002 over thousands thousands thousands Sept. 30, 2001 in % Intangible assets 82,005 77,638 89,019-8% Property and equipment 8,479 9,052 8,191 4% Financial assets 1,865 4, % Fixed assets 92,349 91,543 97,727-6% Inventories 2, ,475% Receivables from goods and services 41,575 44,457 49,564-16% Receivables from affiliated companies 16,357 20,613 15,806 3% Receivables from associated companies % Other currents assets 21,219 10,493 9, % Receivables and other current assets 79,151 75,563 75,233 5% Cash and cash equivalents 116, , ,270-1% Non-fixed assets 197, , ,635 2% Deferred taxes 683 1,631 1,921-64% Prepaid expenses 2, ,613 26% Total assets 292, , ,896-1% of which short-term 189, , ,771 2% 12

13 Comparison of Consolidated Balance Sheets (US GAAP) STOCKHOLDERS EQUITY AND LIABILITIES Sept. 30, 2002 December 31, 2001 Sept. 30, 2001 Change Sept. 30, 2002 over thousands thousands thousands Sept. 30, 2001 in % Capital stock 35,800 35,800 35,800 0% Additional paid-in-capital 218, , ,524 0% Other comprehensive Income -19,945-27,398-23,324 14% Retained earnings % Stockholders equity 233, , ,753 1% Minority interest 1, n.a. Accruals for pensions 1, ,026 66% Other accruals 36,625 40,338 44,712-18% Accrued liabilities 38,332 41,067 45,738-16% Convertible bonds 1,294 1,303 1,322-2% Other liabilities 17,003 26,143 15,814 8% Liabilities 18,297 27,446 17,136 7% Deferred Income % Total liabilities and stockholders equity 292, , ,896-1% of which short-term liabilities excluding stockholders equity 54,017 66,947 60,795-11% 13

14 Consolidated Statement of Cash Flows (US GAAP) SAP Systems Integration AG for January 1 September Absolute Change thousands thousands thousands Net income (before tax) 13,837-3,698 17,535 Income tax -5,781-11,795 6,014 Minority interest Net income (after tax) after amortization of goodwill 7,453-15,493 22,946 Amortization of goodwill 0 35,453-35,453 Net income (after tax) before amortization of goodwill 7,453 19,960-12,507 Depreciation of intangible assets, property and equipment and financial assets, long term 3,959 3, Changes in accruals for pensions Operating Cash Flow 12,242 24,225-11,983 Changes in deferred taxes ,425 Changes in inventories -2, ,974 Changes in receivables and other current assets 5,634-22,981 28,615 Changes in short-term accrued liabilities -5,451 18,888-24,339 Changes in short-term liabilities -13,603-2,452-11,151 Changes in other assets, liablities and in stockholders equity ,458 Net cash from operating activities -2,151 15,798-17,949 Additions to intangible assets, property and equipment (excluding goodwill) -3,338-4, Changes in the scope of consolidation -4,775-10,666 5,891 Additions to financial assets Disposals of fixed assets 235 7,493-7,258 Net cash from investing activities -8,442-7, Other changes in stockholders equity Net cash from financial activities Effect of foreign exchange rates on cash Net changes in cash and cash equivalents (term up to 3 months) -10,433 7,880-18,313 Cash and cash equivalents at the beginning of the reporting period 126, ,390 17,055 Cash and cash equivalents at the end of the reporting period 116, ,270-1,258 14

15 Segment report Revenues, costs and the earnings contribution of the three segments Consulting & Customer Development, Managed Services and Components developed over the first nine months of the fiscal year as shown in the figure on the right hand side. in million Consulting & Customer Development Managed Services Components Jan. 1 Sept Segment revenue Segment costs Segment contribution Segment profitability as a percentage of revenue 14.7% 21.1% 12.0% 18.5% % -32.2% The segment contributions only contain the expenditure that can be assigned to the relevant segments, but do not include administrative costs, other overheads or interest received or paid. The operating profit of 11.7 million was achieved by adjusting the total segment contribution ( 31.1 million) by this expenditure ( 19.4 million). At 14.7%, the profitability of the Consulting & Customer Development business is 6.4% points lower than the previous year, mainly due to the restructuring costs incurred. Before restructuring outlay ( 6.8 million) and writedowns ( 3.5 million), profitability in this sector amounts to 20.1%. The profitability of the Managed Services business is 6.5% points lower than the comparable value for the previous year, caused, among other factors, by the commissioning of the 3rd computer center at the start of this year. Overview of previous quarters ly results of SAP Systems Integration AG , /2000 2/2000 3/2000 4/2000 1/2001 2/2001 3/2001 4/2001 1/2002 2/2002 3/2002 Revenue in mio. Operating Profit (up to Q before amortization of goodwill) in mio. 15

16 Financial calendar 2003* January 30, 2003 Publication of provisional result for 2002 April 29, 2003 Publication of the 3-monthly report May 22, 2003 Annual General Meeting, Dresden July 30, 2003 Publication of the half-yearly report October 29, 2003 Publication of the 9-monthly report * All dates are provisional. Changes reserved. WE MAKE IT RUN Additional information is available on the internet at: or send an inquiry via to investor@sap-si.com SAP SI AG St. Petersburger Strasse Dresden/Germany T +49 (0) F +49 (0)