THE LEADER IN OPEN INTEGRATED SOFTWARE SOLUTIONS Merrill Lynch TMT Conference London, June 12, 2002...

THE LEADER IN OPENINTEGRATED SOFTWARE

SOLUTIONS Merrill Lynch TMT Conference

London, June 12, 2002

Werner Brandt,

CFO & Member of the Executive Board, SAP AG

SAP AG 2002, ML London, WB, June2002 2

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 the Company’s Annual Report on Form 20-F for 2001 filed with the SEC on March 28, 2002. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.


Agenda

SAP: Leading the Way in Business Software SAP: Leading the Way in Business Software

mySAP.com: The Growth Strategy

Leader in Open, Integrated Software Solutions

Infrastructure & Technology Update


6,265 mill. € Revenue

25,000Employees

15,000 Customers

in 120 Countries

One-Step Business

1999/2000

SAP Milestones over 30 Years

0.3 mill. € Revenue

9 Employees

R/1

1972

5.1 mill. €Revenue

60Employees

50 Customersin 2

Countries

R/2 Mainframe

1979 . . . . .

424 mill. € Revenue

3,200Employees

2,800 Customers

in 35 Countries

Client/Server

1992

7,341 mill. € Revenue

29,000Employees

18,000 Customers

in 120+ Countries

2002

Smart BusinessSolutionsmySAP Technology


Improving the Top Line...: CAGR 35% 10 Years

1991

€362m

42%

1992

€425m

18%

1993

€563m

33%

1994

€936m

66%

1995

€1.38

47%

1996

€1.9

38%

1997

€3.02

59%

1998

€4.32

43%

1999

€5.11

18%

2000

€6.27

23%

2001

€7.34

17%

R/3R/3

mySAP.commySAP.com

10

8

6

4

2

0

CAGR sales: 35%

€ bn

Target 2002: +15%


...into the Operating Line*: CAGR 35% 10 Years

1991 1992 1993

€8866%

€76-16%

1,000

800

600

400

200

01994 1995

€11653%

1996

€23098%

1997

€33345%

1998

€48246%

1999

€77561%

2000

€90116%

2001

€9425%

€1,24432%

€ mill.

*excl. stock-based compensation and TopTier acquisition cost: 1999 onwards

1,200

1,400

1,600 €1,47118%

mySAP.commySAP.com

R/3R/3

CAGR Operating income*: 35%

CAGR Net income*: 31%

2002 Target: >21% of revenue


SAPPHIRE highlights SAP‘s unique strengths

Leading in Products and Technology

Most complete E-Business Suite

Unparalleled Global Spread 50,000 Installations in

120+ countries

The Largest Installed Base 18,000 Companies run SAP

Matchless Business Experience Providing 21 Industry Solutions 30 years of blending industry

expertise

Providing Solutions for Customers of all Sizes

Unique Distribution Power Multi-channel and Advanced

Account Mgmt. Program supported by Superb Brand


Expanding Leadership in Business Software

Market Share FY2000 *

* Based on License Revenues

Market Share FY2001 *

SAP39%

ITWO13%

SEBL20%

ORCL19%

PSFT9% SAP

43%

ITWO 8%

SEBL 20%

ORCL17%

PSFT 12%


Opportunity for Further Market Share Growth

Source: IDC/ Gartner, Company Reports

Market Share FY2000

Market Share FY2001

Other67%

14%

7%

4%PSFT

ORCL

SAP

ITWO

SEBL

3%5%

Other67%

15%

6%

5%PSFT

ORCL

SAP

ITWO

SEBL

2%

5%

40,000 ($M)43,600 ($M)

Joachim Hartmann

noch nicht bearbeitet


SAP Continues to Win Market Share in 2002

Market Share Q1 2001*

Market Share Q1 2002*

SAP29,2%

ITWO15,0%

SEBL23,8%

ORCL17,7%

PSFT10,9% SAP

36,0%

SEBL 25,2%

ORCL15,2%

PSFT 13,7%

MANU3,5%

ITWO 6,0%

MANU3,9%

* Based on License Revenues


Agenda

SAP: Leading the Way in Business Software



Infrastructure & Technology Update Infrastructure & Technology Update


Today‘s Customer Requirements

All Customers Want Quick ROI Reduced Cost of Ownership Protection of existing IT

investments Lower switching costs

Many Customers Want Tightly integrated targeted

solutions (point-to-point) Complete end-to-end

solutions Guaranteed mission

readiness


How to capitalize on existing IT investments ?

ERP legacy~15 systems

ERP non-SAP~25 systems,

different versions

Technical systems

Trading

CollaborativeEngineering

e-Sales

SAP R/3~30 systems,

Versions 3.1I - 4.6B

E-Procurement10 units

SAP MarketsEnterprise Buyer

Professional Edition

15,000 interfaces

Development cost:~ 75,000 USD / interface

Costs of ownership: ~ 10,000 USD / year / interface

Overall:

150 Mio. USD / year

Challenge: Cost of Integration

The Cost of Integration – Customer Reality


IT Infrastructure for Adaptive Business

Information

Process

Transactions

User

Solution: Integration Platform for

Distributed environments Heterogeneous

landscapes Based on open

standards

Benefits Lower maintenance and

integration cost Reduced switching cost Prepare for incremental

business transformation


Bringing it All Together


Agenda


mySAP.com: The Growth Strategy mySAP.com: The Growth Strategy




mySAP.com E-Business Platform

mySAP.commySAP.com21 In

du

stry So

lutio

ns

21 Ind

ustry S

olu

tion

s

Enterprise Portal

mySAP Enterprise Portals

Exchange

mySAP Exchanges

myS

AP

Ser

vice

s

mySAP TechnologymySAP Technology

SCMmySAP

SCM

CRMmySAP

CRM

PLMmySAP

PLM

SRMmySAP

SRM

HRmySAP

HR

FINmySAPFinan-cials

BImySAP

BI


Dimension of Process Scalability

mySAP.com

SAP Business One

mySAP All-in-One

Functionality / Industry Support

Business Size

Full functionality

Full functionality pre-configured, single database

Necessary functionality


Smart Business Solutions

Small enterprises and subsidiaries

“Off-the-shelf” product Easy to customize

Wide range of innovative functionality

Immediate impact Easy to use / running in a few

days Low cost of entry and

ownership Fulfillment through existing and

incremental channels Over 800 customers

SMB companies and subsidiaries Complete

Full functionality, end-to-end business transactions across the value chain, scalable

Easy to get started Pre-packaged

Adaptable Industry templates & configurable

Vertical Channels Proven ROI and over 2000

customers


Protect IT Investments

Solution: SAP R/3 Enterprise

ERP tuned to specific industries

Including SAP Web AS Packaging concept Available in Q3 2002

Benefits Proven business

functionality Incremental upgrades Greater connectivity Stepwise migration

to mySAP.com

SAPR/3 4.5

SAPR/3 4.6

SAPR/3 Enterprise

...

”Customers benefit from incremental upgrades, resulting in less maintenance and greater operational flexibility.“

Derek Prior, Gartner


xApps - From Transactions to Intelligent Action

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

Functional Transactions (Hindsight)

Bu

sin

ess

Vie

ws,

Eve

nts

(C

onte

xt &

Insi

ght)

SCM CRMPLMHR Finan-cials

Desk-top/

OfficeSupport

Legacy SRM

Merger & Acquisition

Resource &Program Mgmt

Employee Relationship Management

Sourcing


xApp Example: Resource and Program Management

Mail/Calendar(Communi-cation)

PLM(Product)

HR(Skills,Payroll)

Finan-cials

(Budget)

Projects(ProjectData)

Time(ActivityData)

Resource and Program Management

Initiate

Pro

ject

Skill C

atalog

& D

B

Search

T

alent

Co

ll. A

ssign

men

t

Pro

ject P

ipelin

e

Assess

Peo

ple

Assess

Pro

jects

Initiatives Optimize product portfolio Improve company competitiveness Increase employee satisfaction

Key technologies used Collaboration/Integration Visualization Knowledge Management


Agenda



Leader in Open, Integrated Software Solutions Leader in Open, Integrated Software Solutions



License Revenue Analysis – by Solution Q1 2002

mySAP SCM20%*

mySAP CRM18%*

mySAP PLM8%*

mySAP BI/Portals &

mySAP SRM /Marketplaces

11%*

mySAP Financials /mySAP HR

43%*

* of license revenue


mySAP SCM and mySAP CRM Momentum 2001

300%

200%

100%

mySAP SCM as % of i2

Q1 2001 Q2 2001 Q3 2001 Q4 2001

41%

121% 132%

280%

mySAP CRM as % of Siebel

0%

0%

20%

40%

60%

80%

Q1 2001 Q2 2001 Q3 2001 Q4 2001

18%

31% 37%

69%

FY 2001

113%

FY 2001

37%

Q1 2002

117%

Q1 2002

26%


Growth Drivers 2002 and Beyond

2002 is expected to be another challenging year, software sales trends continue to be unsettled in a tough economic environment

2002 sales to be expected up by around 15% 2002 operating margin excl. stock based compensation and TopTier acquisition

cost to be expected up at least 100 basis points (2000: 20%) Operating margin excl. stock based compensation and TopTier acquisition cost

mid-term target of 25% License revenue growth drivers: CRM, SCM, Technology & ERP Migration path to mySAP.com:

Currently ~25% of global customers run mySAP.com ~15% of R/3 customers have migrated to mySAP.com By 2005: 80-90% migration to mySAP.com

THE LEADER IN OPEN INTEGRATED SOFTWARE SOLUTIONS Merrill Lynch TMT Conference London, June 12, 2002...

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Transcript of THE LEADER IN OPEN INTEGRATED SOFTWARE SOLUTIONS Merrill Lynch TMT Conference London, June 12, 2002...