SAP Asia Pacific Japan Grows Software Revenue by 23% in 2008

SAP APJ continues to secure key customers in Q4 2008

KUALA LUMPUR – February 11, 2009 – SAP Asia Pacific Japan (“APJ”) continued to outperform the business software market across the Region in 2008.

On a full year basis, SAP Asia Pacific Japan remains SAP AG’s fastest growing region with 23 per cent Software Revenue growth, to €594 million. Software and Software Related Services grew at 24 per cent for the year, to €1.192 billion. All revenue figures in this release are expressed in non-GAAP constant currency terms and all growth is measured against the previous comparable period.

Software Revenue for SAP grew by 20 per cent in South East Asia for the full year of 2008. Software and Software Related Services revenue also grew by 19 per cent in South East Asia in the year. In Malaysia, Software Revenue for grew by 24 per cent, while Software and Software Related Services revenue increased by 18 per cent in FY2008.

While SAP APJ experienced difficult market conditions in the fourth quarter, growing Software and Software Related Services at 5 per cent, Total Revenue for the full year grew at 20 per cent, to €1.532 billion.

“The steady growth shown by SAP across the region and in Malaysia demonstrates the pull of our products, especially in such trying economic conditions,” said Krish Datta, Managing Director, SAP Malaysia. “In Malaysia for example, the high number of customer wins from the SME sector demonstrates the fact that we in SAP are attuned to the needs of local industries and organizations, regardless of size or deployment scale.”

“I am extremely proud of the way our team in SAP Asia Pacific Japan handled market conditions we experienced during the last quarter of 2008,” added Datta.

“In spite of the circumstances, we secured a number of very large strategic deals across the Region, running contrary to the trend we are seeing for the industry as a whole.”

“In Q4 ’08 we secured major deals, including with Sony in Japan, proving that a sound business case and the capacity to quantify and deliver business value continue to be of interest to SAP customers across the region, notwithstanding the economic climate,” he continued.

Cost saving measures help SAP manage its margin

As part of its 2008 full-year earnings announcement, SAP AG announced cost saving measures which included an estimated reduction of SAP’s global workforce by about 3,000 people during 2009.

Elaborating on the cost saving measures, Datta explained, “We always talk to our Customers about helping them to become ‘Best-Run Businesses’ and obviously we need to lead by example. We are continually looking for ways to drive productivity and reduce our cost-base across the Region. We expect that a combination of additional travel restrictions, natural attrition and further reductions in non-staff variable expenses will help SAP Asia Pacific Japan comfortably manage its margin targets in 2009.”

“SAP is a strong, financially sound organization; we see significant opportunity in the current market circumstances. Many of our larger Customers remain motivated to pursue strategic systems objectives in the year ahead and we see the chance to extend our global industry leadership in 2009,” he continued.

New product offerings to address new opportunities

“The current economic and business environment is challenging for everyone – not just for SAP, but also for our Customers. Yet new opportunities continue to emerge as our Customers look to SAP for solutions which provide better business insight, more efficiency and greater agility, to help them through these difficult times,” said Datta.

SAP reacted swiftly to the economic crisis by introducing ‘Best-Run Now’ value packages. These comprehensive new packages assemble offerings from existing SAP and partner solutions, combined with services which offer speedy implementation of ready-to-run software packages, targeted at specific business processes.

“Our ‘Best-Run Now’ initiative has helped Customers become leaner and more agile by synthesizing market insights and driving efficiencies to stay competitive – all of which they find important in the current environment.”
“In 2009, we will continue to focus on delivering measurable business value to our Customers. We are confident that investment in SAP’s product portfolio and the introduction of innovative new offerings will enable us to further extend our industry and solution leadership,” he concluded.

Use of Non-GAAP Financial Measures
This press release contains certain financial measures such as Non-GAAP revenues, Non-
GAAP operating income, Non-GAAP operating margin, free cash flow, constant currency revenue and operating income measures, as well as U.S. Dollar based Non-GAAP revenue numbers. These measures are not prepared in accordance with U.S. GAAP and therefore are considered non-GAAP financial measures. Our non-GAAP financial measures may not correspond to non-GAAP financial measures that other companies report. The non-GAAP financial measures that we report should be considered as additional to, and not as a substitute for or superior to revenue, operating margin or our other measures of financial performance prepared in accordance with U.S. GAAP. See the Appendix at the end of the financial section of this press release for additional information regarding the Non-GAAP measures included in this press release and for the reconciliations to the corresponding U.S. GAAP measures.