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THE LEADER IN OPEN INTEGRATED SOFTWARE SOLUTIONS Merrill Lynch TMT Conference London, June 12, 2002 Werner Brandt, CFO & Member of the Executive Board,

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Presentation on theme: "THE LEADER IN OPEN INTEGRATED SOFTWARE SOLUTIONS Merrill Lynch TMT Conference London, June 12, 2002 Werner Brandt, CFO & Member of the Executive Board,"— Presentation transcript:

1 THE LEADER IN OPEN INTEGRATED SOFTWARE SOLUTIONS Merrill Lynch TMT Conference London, June 12, 2002 Werner Brandt, CFO & Member of the Executive Board, SAP AG

2 SAP AG 2002, ML London, WB, June 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 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 Companys future financial results are discussed more fully in the Companys filings with the U.S. Securities and Exchange Commission (the SEC), including the Companys Annual Report on Form 20-F for 2001 filed with the SEC on March 28, Readers are cautioned not to place undue reliance on these forward- looking statements, which speak only as of their dates.

3 SAP AG 2002, ML London, WB, June Agenda SAP: Leading the Way in Business Software mySAP.com: The Growth Strategy Leader in Open, Integrated Software Solutions Infrastructure & Technology Update

4 SAP AG 2002, ML London, WB, June ,265 mill. Revenue 25,000 Employees 15,000 Customers in 120 Countries One-Step Business 1999/2000 SAP Milestones over 30 Years 0.3 mill. Revenue 9 Employees R/ mill. Revenue 60 Employees 50 Customers in 2 Countries R/2 Mainframe mill. Revenue 3,200 Employees 2,800 Customers in 35 Countries Client/ Server ,341 mill. Revenue 29,000 Employees 18,000 Customers in 120+ Countries 2002 Smart Business Solutions mySAP Technology

5 SAP AG 2002, ML London, WB, June Improving the Top Line...: CAGR 35% 10 Years m 42% m 18% m 33% m 66% % % % % % % % R/3 mySAP.com CAGR sales: 35% bn Target 2002: +15%

6 SAP AG 2002, ML London, WB, June into the Operating Line*: CAGR 35% 10 Years % % 1, % % % % % % % 1,244 32% mill. *excl. stock-based compensation and TopTier acquisition cost: 1999 onwards 1,200 1,400 1,600 1,471 18% mySAP.com R/3 CAGR Operating income*: 35% CAGR Net income*: 31% 2002 Target: >21% of revenue

7 SAP AG 2002, ML London, WB, June SAPPHIRE highlights SAPs 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

8 SAP AG 2002, ML London, WB, June Expanding Leadership in Business Software Market Share FY2000 * * Based on License Revenues Market Share FY2001 * SAP 39% ITWO 13% SEBL 20% ORCL 19% PSFT 9% SAP 43% ITWO 8% SEBL 20 % ORCL 17% PSFT 12 %

9 SAP AG 2002, ML London, WB, June Opportunity for Further Market Share Growth Source: IDC/ Gartner, Company Reports Market Share FY2000 Market Share FY2001 Other 67% 14% 7%7% 4%4% PSFT ORCL SAP ITWO SEBL 3%3% 5%5% Other 67% 15% 6%6% 5%5% PSFT ORCL SAP ITWO SEBL 2%2% 5%5% 40,000 ($M) 43,600 ($M)

10 SAP AG 2002, ML London, WB, June SAP Continues to Win Market Share in 2002 Market Share Q1 2001* Market Share Q1 2002* SAP 29,2% ITWO 15,0% SEBL 23,8% ORCL 17,7% PSFT 10,9% SAP 36,0% SEBL 25,2 % ORCL 15,2% PSFT 13,7 % MANU 3,5% ITWO 6,0% MANU 3,9% * Based on License Revenues

11 SAP AG 2002, ML London, WB, June Agenda SAP: Leading the Way in Business Software mySAP.com: The Growth Strategy Leader in Open, Integrated Software Solutions Infrastructure & Technology Update

12 SAP AG 2002, ML London, WB, June Todays 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

13 SAP AG 2002, ML London, WB, June How to capitalize on existing IT investments ? ERP legacy ~15 systems ERP non-SAP ~25 systems, different versions Technical systems Trading Collaborative Engineering e-Sales SAP R/3 ~30 systems, Versions 3.1I - 4.6B E-Procurement 10 units SAP Markets Enterprise 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

14 SAP AG 2002, ML London, WB, June 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

15 SAP AG 2002, ML London, WB, June Bringing it All Together

16 SAP AG 2002, ML London, WB, June Agenda SAP: Leading the Way in Business Software mySAP.com: The Growth Strategy Leader in Open, Integrated Software Solutions Infrastructure & Technology Update

17 SAP AG 2002, ML London, WB, June mySAP.com E-Business Platform mySAP.com 21 Industry Solutions Enterprise Portal mySAP Enterprise Portals Exchange mySAP Exchanges mySAP Services mySAP Technology SCM mySAP SCM CRM mySAP CRM PLM mySAP PLM SRM mySAP SRM HR mySAP HR FIN mySAP Finan- cials BI mySAP BI

18 SAP AG 2002, ML London, WB, June 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

19 SAP AG 2002, ML London, WB, June 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

20 SAP AG 2002, ML London, WB, June Protect IT Investments Solution: SAP R/3 Enterprise ERP tuned to specific industries Including SAP Web AS Packaging concept Available in Q Benefits Proven business functionality Incremental upgrades Greater connectivity Stepwise migration to mySAP.com SAP R/3 4.5 SAP R/3 4.6 SAP R/3 Enterprise... Customers benefit from incremental upgrades, resulting in less maintenance and greater operational flexibility. Derek Prior, Gartner

21 SAP AG 2002, ML London, WB, June 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) Business Views, Events (Context & Insight) SCMCRMPLMHRHRFinan- cials Desk- top/ Office Support LegacySRM Merger & Acquisition Resource & Program Mgmt Employee Relationship Management Sourcing

22 SAP AG 2002, ML London, WB, June xApp Example: Resource and Program Management Mail/ Calendar (Communi- cation) PLM (Product) HR (Skills, Payroll) Finan- cials (Budget) Projects (Project Data) Time (Activity Data) Resource and Program Management Initiate Project Skill Catalog & DB Search Talent Coll. Assignment Project Pipeline Assess People Assess Projects Initiatives Optimize product portfolio Improve company competitiveness Increase employee satisfaction Key technologies used Collaboration/Integration Visualization Knowledge Management

23 SAP AG 2002, ML London, WB, June Agenda SAP: Leading the Way in Business Software mySAP.com: The Growth Strategy Leader in Open, Integrated Software Solutions Infrastructure & Technology Update

24 SAP AG 2002, ML London, WB, June License Revenue Analysis – by Solution Q mySAP SCM 20%* mySAP CRM 18%* mySAP PLM 8%* mySAP BI/ Portals & mySAP SRM / Marketplaces 11%* mySAP Financials / mySAP HR 43%* * of license revenue

25 SAP AG 2002, ML London, WB, June mySAP SCM and mySAP CRM Momentum % 200% 100% mySAP SCM as % of i2 Q1 2001Q2 2001Q Q % 121% 132% 280% mySAP CRM as % of Siebel 0% 20% 40% 60% 80% Q1 2001Q2 2001Q3 2001Q % 31% 37% 69% FY % FY % Q % Q %

26 SAP AG 2002, ML London, WB, June 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


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