Ad-hoc | 10 January 2006 16:39

SAP AG: SAP Expects 18% Growth in Software Revenues for Full-Year 2005

Ad hoc announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— Full-Year 2005 Software Revenue Growth Expected to Exceed Company Guidance Fourth Quarter 2005 Software Revenues Expected to Increase 18% to EUR1,180 Million Full-Year Total Revenue Expected to Increase 13% to EUR8.5 Billion WALLDORF – January 10, 2006 – SAP AG (NYSE: SAP) announced today that after a preliminary review of its 2005 fourth quarter results, it expects full-year 2005 software revenues to be approximately EUR2,780 million, representing an increase of 18% (15% at constant currencies *1) compared to full-year 2004 software revenues of EUR2,361 million. The expected 2005 software revenue growth of 18% exceeds the Company’s previously published guidance of a range of 12% – 14% growth. Fourth quarter software revenues are expected to be approximately EUR1,180 million, representing an increase of 18% (12% at constant currencies *1) compared to fourth quarter 2004 software revenues of EUR1,003 million. Based on these preliminary software revenue results, the Company expects its worldwide peer group *2) share to be 63% on a rolling four quarter basis at the end of the fourth quarter of 2005, which represents a gain of three percentage points compared to the third quarter of 2005 and a gain of eight percentage points compared to the fourth quarter of 2004. In the U.S., software revenues for the fourth quarter of 2005 are expected to increase by 35% (21% at constant currencies *1) to EUR315 million compared to the fourth quarter of 2004. The Americas region, which includes the U.S., Canada and Latin America, is expected to report software revenues of EUR424 million for the fourth quarter of 2005, representing an increase of 33% (18% at constant currencies *1) compared to the fourth quarter of 2004. In the EMEA (Europe, Middle East and Africa) region, fourth quarter 2005 software revenues are expected to increase 8% (7% at constant currencies *1) to EUR625 million. Fourth quarter 2005 software revenues in Germany are expected to increase 2% to EUR238 million. In the APA (Asia/Pacific) region, fourth quarter 2005 software revenues are expected to increase by 25% (18% at constant currencies *1) to EUR131 million. Fourth quarter 2005 software revenues in Japan are expected to increase 9% (10% at constant currencies *1) to EUR49 million. Total revenues for the fourth quarter of 2005 are expected to be approximately EUR2.75 billion, which is an increase of 15% (9% at constant currencies *1) compared to EUR2.40 billion reported in the same period last year. Total revenues for the full-year 2005 are expected to be approximately EUR8.5 billion, which is an increase of 13% (12% at constant currencies *1) compared to EUR7.5 billion reported for 2004. On the basis of these figures, SAP expects its 2005 pro forma operating margin to be at the high end of its previously published 2005 pro forma operating margin guidance of an increase in a range of 0.0 to 0.5 percentage points. The 2005 pro forma operating margin can be reconciled to the operating margin by adjusting operating income for stock-based compensation (approximately EUR46 million) and acquisition-related charges (approximately EUR33 million). The Company also expects 2005 pro forma earnings per share to be at the high end of the range of its previously published 2005 pro forma earnings per share guidance of EUR4.85 to EUR4.95 per share. SAP will provide further details of its 2005 preliminary results and outlook for the full-year 2006 on January 25. Footnotes: 1) Constant currency data excludes the impact of currency exchange rates. 2) Worldwide share of what SAP considers to be its peer group of Microsoft Corp. (business solutions segment only), Oracle Corp. (business applications only) and Siebel Systems, Inc. is based on comparable software revenues in U.S. dollars (for vendors that did not yet announce or pre-announce software revenues, analyst estimates were used). SAP’s results have been converted into U.S. dollars. For Oracle Corp. (business applications only), the software revenues of Oracle, PeopleSoft and Retek were combined based on publicly available data. Subsequent revisions of peer group data will often occur as a result of using estimated data at the time the peer group share is originally calculated because actual data is often not yet available. SAP AG Dietmar-Hopp-Allee 16 69190 Walldorf Deutschland ISIN: DE0007164600 (DAX) WKN: 716460 Listed: Amtlicher Markt in Berlin-Bremen, Frankfurt (Prime Standard) und Stuttgart; Freiverkehr in Düsseldorf, Hamburg, Hannover und München; EUREX; NYSE End of ad hoc announcement (c)DGAP 10.01.2006 Issuer’s information/explanatory remarks concerning this ad hoc announcement: For more information, press only: Herbert Heitmann, +49 (6227) 7-61137, herbert.heitmann@sap.com, CET Tony Roddam, +49 (6227) 7-49133, tony.roddam@sap.com, CET For more information, financial community only: Stefan Gruber, +49 (6227) 7-44872, investor@sap.com, CET Martin Cohen, +1 (212) 653-9619, investor@sap.com, EST End of message (c)DGAP