SAP Announces 2006 Second Quarter Preliminary Results

Company Reaffirms Full-Year 2006 Outlook

WALLDORF - July 13, 2006 - SAP AG (NYSE: SAP) announced today that after a preliminary review of its 2006 second quarter results, it expects second quarter 2006 software revenues to be approximately €621 million, representing an increase of 8% (10% at constant currencies1) compared to the second quarter of 2005. Second quarter 2006 product revenues are expected to be approximately €1.48 billion, representing an increase of 9% (10% at constant currencies1) compared to the same quarter last year. Total revenues for the 2006 second quarter are expected to be approximately €2.20 billion, which represents an increase of 9% (9% at constant currencies1) compared to the 2005 second quarter.

Strong growth in operating income
The second quarter 2006 pro forma operating income is expected to be around €558 million, representing an increase of 13% compared to the second quarter of last year and the pro forma operating margin is expected to increase by approximately 80 basis points to 25.4% compared to the second quarter of 2005. The second quarter pro forma net income is expected to be approximately €432 million, representing an increase of 38% compared to the same quarter last year and pro forma earnings per share is expected to be approximately €1.41 per share, which represents an increase of 38% compared to the second quarter of 2005. The second quarter 2006 pro forma operating margin can be reconciled to the operating margin by adjusting operating income for stock-based compensation (approximately €16 million) and acquisition-related charges (approximately €11 million).

Regional Performance
The Americas region, which includes the U.S., Canada and Latin America, is expected to report software revenues of €239 million for the second quarter of 2006, representing an increase of 18% (21% at constant currencies1) compared to the second quarter of 2005. In the U.S., software revenues for the second quarter of 2006 are expected to increase by 16% (20% at constant currencies1) to €201 million compared to the second quarter of 2005. In the EMEA (Europe, Middle East and Africa) region, second quarter 2006 software revenues are expected to increase 3% (3% at constant currencies1) to €296 million. Second quarter 2006 software revenues in Germany are expected to increase 8% to €100 million. In the APA (Asia/Pacific) region, second quarter 2006 software revenues are expected to be flat (4% increase at constant currencies1) at €86 million. Second quarter 2006 software revenues in Japan are expected to decrease 4% (4% increase at constant currencies1) to €23 million.

Business Outlook
The Company also announced that it reaffirmed its outlook for 2006 and as a result it continues to provide the following outlook for the full-year 2006 as described in its April 20, 2006 first quarter results press release.

* The Company expects full-year 2006 product revenues to increase in a range of 13% - 15% compared to 2005. This growth rate is based on the Company’s expectation for full-year 2006 software revenue growth in a range of 15% - 17% compared to 2005.
* The Company expects the full-year 2006 pro forma operating margin, which excludes stock-based compensation and acquisition-related charges, to increase in a range of 0.5 – 1.0 percentage points compared to 2005.
* The Company expects full-year 2006 pro forma earnings per share, which exclude stock-based compensation, acquisition-related charges and impairment-related charges, to be in a range of €5.80 to €6.00 per share.
* The outlook is based on an assumed U.S. Dollar to Euro exchange rate of $1.23 per €1.00.

“With our results in the first half of 2006, we are within our targeted range for product revenue growth, pro forma operating margin growth and pro forma earnings per share,” said Henning Kagermann, CEO of SAP. “Therefore, we remain confident for the remainder of 2006 as demonstrated by the reaffirmation of our full-year 2006 outlook.”

Mr. Kagermann continued, “Our order entry is strong and we continue to see a robust pipeline. Product launches are moving forward as planned and customer interest in new solutions like mySAP ERP 2005, Duet and SAP Analytics is strong.”

SAP will provide further details of its second quarter and first half 2006 preliminary results on July 20th.

Webcast/Supplementary Financial Information
SAP senior management will host a conference call today at 4:00 PM (CET) / 3:00 PM (GMT) / 10:00 AM (Eastern) / 7:00 AM (Pacific). The conference call will be web cast live on the Company’s website at http://www.sap.com/investor and will be available for replay purposes as well.

About SAP
SAP is the world’s leading provider of business software solutions*. Today, SAP has more than 33,000 customers in over 120 countries. SAP® software solutions address the needs of small and midsize enterprises to global organizations. Powered by the SAP NetWeaver® platform to drive innovation and enable business change, SAP solutions are helping enterprises around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP industry solutions support the unique business processes of more than 25 industry segments, including high tech, healthcare, retail, public sector and financial services. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol “SAP.” (Additional information at http://www.sap.com)

(*) SAP defines business software solutions as consisting of Enterprise Resource Planning and related software solutions such as Supply Chain Management, Customer Relationship Management, Product Lifecycle Management, Supplier Relationship Management.

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 “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP 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 SAP’s future financial results are discussed more fully in SAP’s filings with the U.S. Securities and Exchange Commission (“SEC”), including SAP’s most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

Copyright © 2006 SAP AG. All rights reserved.
SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary.

For more information, financial community only:

Stefan Gruber, +49 (6227) 7-44872, investor@sap.com, CET
Martin Cohen, +1 (212) 653-9619, investor@sap.com, EST

Footnotes
1) SAP calculates “constant-currency” year-on-year changes in revenue and operating income by translating foreign currencies using the average exchange rates from 2005 instead of 2006. SAP believes that such constant-currency measures provide supplemental meaningful information for investors as they show how the Company would have performed if it had not been affected by changes in exchange rates.

Contact Information

Herbert Heitmann

SAP AG

Contact via E-mail