SAP outperforms rivals, revenues still fall


17 April 2003 Enterprise resource planning (ERP) software supplier SAP outperformed all of its key competitors in the first three months of 2003, but that was not enough to keep its sales from slipping.

For its first quarter, SAP reported revenues down 8%, from €1.67 billion to €1.52 billion. This was blamed on falling licence sales, falling consulting and training revenues and static maintenance revenues. The results were also adversely affected by fluctuating currency rates. According to SAP, its revenues would only have fallen 1% year-on-year if exchange rates had been constant.

However, SAP’s continued focus on cost-cutting meant that despite the revenue slide it still managed to almost triple net income, which rose from €65 million in the first quarter of 2002 to €186 million. SAP’s operating margin now stands at an impressive 20%, compared to 11% in the first quarter of 2002.

The company was also quick to point out that the it is still winning business at the expense of its key rivals, all of which have released downbeat financial statements in recent weeks. According to SAP, its share of the business software market — defined as the combined ERP software revenues of JD Edwards, Oracle, i2 Technologies, Siebel, and PeopleSoft — rose from 51% to 54% year-on-year.

“Our continuing market share gains, specifically in our competitors’ home market [the US], tell me that the market favours SAP’s style of business,” said Hasso Plattner, SAP co-founder and CEO. “Our results this quarter demonstrate that our strategy is working and we are well positioned to capitalise on an economic recovery.”

Although SAP’s revenues in the US were down 20% year-on-year, the company said that at constant exchange rates, revenues would have risen 1%. The company’s best performing market was Asia, where sales grew 7%. In Europe, sales were down 4%.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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