END-OF-YEAR SITUATION

Another Clean Bill of Health

SAP was in good health at the end of 2008, not least because of our sustained profitable growth. Despite the unfavorable economic climate, we can point to our broad, innovative range of solutions, highly qualified and highly motivated workforce, strong market position, efficient processes, sound profitability, and liquidity.

SAP in the Current Economic Environment

Beginning with the deepening of the financial crisis in mid-September 2008, the economic situation deteriorated sharply. The international financial crisis spread a chill through the economies of the industrialized countries that cooled the markets for goods and services. The profound crisis in the economy is remarkable for the global and intense downturn it caused and for its complexity. Missing sales in one region are not counterbalanced by more sales elsewhere. However, the complexity of the economic crisis also represents an opportunity for SAP, because businesses are demanding greater data visibility and more efficiency and flexibility. By acquiring Business Objects, we greatly strengthened our portfolio of solutions in this field.

With a large customer base, high levels of customer satisfaction, a stable business model with a high proportion of recurring revenue, and a sound financial base, SAP is well armed to withstand the changed economic climate. We offer our customers – large or small, in all industries and all countries – a broad palette of innovative business solutions that give them flexibility to stay ahead in their field, capture the full benefits of business networks, and grow profitably.