January 30, 2003

SAP net profit up 49 percent on lower revenue

Apps vendor claims it increased market share

Public sector spending on software is particularly strong in the U.S. , Kagermann said.

Conceding that the U.S. market has "dramatically" declined as a result of the economic downturn, Kagermann said that SAP has "nevertheless done much better than the home players."

Cost-cutting played a big role in the company's profitability, according to Kagermann. SAP cut personnel, reduced the number of external consultants, trimmed travel costs and rationalized its facilities by combining locations, he said.

"Despite our hiring freeze, we have hired people for product development and in some select areas of sales," Kagermann said. "All hiring must be approved by the board, and although we will hire people, we will do so very selectively."

In 2003, SAP expects to continue to gain market share and increase profitability.

"Although it is very difficult to make a long-term forecast, I believe the IT industry will return to double-digit growth once the economic slump is over," Kagermann said.

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