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Technology Stocks : SAP A.G. -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (1504)	7/18/1998 6:55:00 AM
From: JJ	Read Replies (1) \| Respond to of 3424

To all: excerpts from Lehman research report..... * Company pre-announced (it has become a customary event over the past year) 1H and 2Q98 results. 1H growth came in at 60%, however expenses grew 66%, so earnings were up 40% for the half. * Growth of 60% in 1H was DESPITE weakness in Asia/Pacific. Region declined in 2Q98: Asia/Pacific was 13% of revenues in 1997, we are expecting flat-to-down this year. * Higher expenses should be viewed as BULLISH not bearish. Company remains very upbeat on business in 4Q98 and 1999 and is hiring accordingly in a tight labor market. Higher expenses also attributed to synthetic stock option program (STAR). * We continue to like this name and view any significant correction as a buying opportunity. SAP is a global world-class technology company larger than its next 5 competitors combined. Moreover, 60% growth on a $5 billion/year company is excellent. We reiterate our 2-Outperform rating and $225 target price. Seems odd that the price target remained the same as the last report. There was mention of an analyst meeting in Frankfurt on July 20th. Perhaps waiting to update the target based on the meeting. I wasn't aware of the fact that SAP is larger than the next 5 competitors combined........ Regards, --JJ

To: Ibexx who wrote (1504)	7/20/1998 5:22:00 AM
From: TimeToMakeTheInvs	Read Replies (2) \| Respond to of 3424

Looks good on the DAX for SAP this morning, guess the news was viewed positively. Really like these links someone on the thread provided. Still long! Tim Have ya'll discussed SAP's internal OLAP development?

To: Ibexx who wrote (1504)	7/20/1998 6:01:00 AM
From: Holger Johannsen	Read Replies (1) \| Respond to of 3424

Walldorf, Germany, July 20, 1998 -- SAP AG, the world's leading provider of enterprise business software, announced today that strong growth continued in the second quarter of 1998. The Group's second quarter revenues grew to DM 2.2 billion ($1.2 billion), an increase of 59% over the same period last year. SAP's continues to expand its infrastructure and staffing is ahead of plan. These investments, which are aimed at pacing the company's long-term growth, resulted in a 70% rise in costs to DM 1.7 billion ($940 million). Pre-tax profits for the quarter rose 30% to DM 521 million ($288 million). For the 1998 first half, sales climbed 61% to DM 3.9 billion ($2.1 billion), while pre-tax profits grew 43% to DM 832 million ($460 million). Year-on-year comparisons of costs and pre-tax figures were affected by provisions for SAP's recently announced employee incentive program, the details of which are discussed later. SAP's strong performance in the first six months of 1998 was due to its leading product portfolio. Expansion plans led to the addition of 5,892 new employees over the number a year ago, with SAP Group headcount rising to 16,976 as of June 30, 1998. Most of this growth was focused in the Group's research and development staff which was up 57%. Staff growth since the start of 1998 was 4,120, with roughly 1,289 in Germany alone. "We've stepped up the pace of our expansion and intensified our investment activities on the heels of our product success and new product pipeline. Our very strong first half-year performance shows us that we're on the right track in adding resources to extend our success," said Prof. Dr. h.c. Hasso Plattner, Co-Chairman of SAP AG. "Customer focus - in product development, professional services and support - has enhanced SAP's market leadership position. By building on our core competencies and providing comprehensive industry focused solutions with TeamSAP, we broaden our partnerships and enhance our performance." added Paul Wahl, SAP Board Member and CEO, SAP America. * US dollar equivalents are provided for reader convenience at the June 30, 1998 exchange rate of US $1 = DM 1.8087 Employee Incentive Program Pre-tax profit figures for the second quarter were impacted for the first time by expense provisions for SAP's long-term equity based compensation program, STAR ("Stock Appreciation Rights"). These provisions totaled DM 35 million for the quarter and were derived by multiplying the anticipated number of STARs by the "fair value" of a STAR at the end of the quarter. Expense provisions associated with the STAR program are distributed on a pro rata basis over the months during which the program is effective (May 1998 to April 1999). This meant that provisions were created for two months in the second quarter. Excluding STAR program provisions, pre-tax profits would have risen by 49% in the first half, with costs increasing 64% instead of 66% to DM 3.2 billion (1997: DM 1.9 billion). The pre-tax profit margin for the half was 22% (1997: 24%). Without the STAR provisions, pre-tax profits would have grown 39% in the second quarter instead of 30%. Significant Growth in the Americas and Europe Strong sales in all other of the Group's regions more than offset slower sales in the Asia/Pacific region due to the Asian crisis. Revenues in the Americas sales region rose 72% to DM 1.7 billion in the first half of 1998 (1997: DM 1.0 billion). Sales in Germany were up 53% to DM 776 million (1997: DM 507 million ). Revenues in the rest of Europe grew 72% to DM 934 million (1997: DM 542 million) and 19% in Asia/Pacific to DM 376 million (1997: DM 315 million). The proportion of revenues generated outside Germany increased to 80% from 79% in the first half of 1997. Compared with the second quarter of 1997, sales were up 75% to DM 963 million (1997: DM 549 million) in the Americas, 53% to DM 424 million (1997: DM 277 million) in Germany, and 70% to DM 549 (1997: DM 322 million) in the rest of Europe. Asian Market Developments The situation in Asia had a larger-than-anticipated impact on SAP's second quarter. Changes in currency exchange rates in the region were primarily responsible for lower second-quarter revenues in Asia/Pacific, which fell 5% to DM 197 million against DM 208 million in the same period last year. On constant currency rates, sales for the region would have grown 14%. SAP's performance in Asia/Pacific is increasingly being affected by a trend evident in Japan: Customers and prospects are postponing and in some cases reducing software investment and implementation projects as the uncertain business climate continues to damper investments or spreading them over longer periods of time. "We are monitoring the current situation in Asia closely and have figured it into our projections for the current fiscal year," says Plattner. "SAP's position in Asia remains strong and seizing the long-term growth opportunities in the region remains a core commitment for us." Product revenues accounted for the biggest share of first half-year sales, increasing 54% to DM 2.5 billion (1997: DM 1.6 billion). Consulting revenues were up 76% to DM 921 million (1997: DM 522 million) and revenues from training activities grew 68% to DM 426 million (1997: DM 253 million). Product revenues thus made up 64% of total sales against 67% in the first half of 1997. Sales of R/3, SAP's flagship product, rose 59% to DM 2.4 billion (1997: DM 1.5 billion) in the period under review. "Against the background of our expansion strategy and the uncertain outlook in Asia, we are maintaining our previously announced expectations for 1998 that pre-tax profit for the year will increase 30 - 35%, excluding effects of the STAR program," commented Prof. Dr. Henning Kagermann, Co-Chairman of SAP AG. "We expect that sales growth for the year will be roughly 40% for the same reasons as well as the unknown impacts associated with the year 2000 issue."