SAP to meet targets on strong US performance

FRANKFURT: German software maker SAP AG expects a strong performance in its U.S. business to help it meet targets for 2002 despite a punishing downturn in the software sector, a newspaper said on Friday. "We have costs under control and are focusing on sales...We will meet our financial targets and, above all, we will contribute to meet the company's operating margins," Bill McDermott, newly appointed head of SAP's U.S. unit, said in an interview with FT Deutschland.

SAP, which like its rivals has been hit by a sharp slowdown in spending on information technology this year as confidence in an economic recovery has crumbled, in October abandoned its 2002 forecast of a five-to-10 percent rise. It said then it would no longer provide a forecast but still expected an operating margin of at least 21 percent even on unchanged full-year sales.

McDermott, a former sales and marketing executive at rival Siebel Systems, told the FTD he was confident that SAP would meet this margin target. He said he planned to significantly boost the group's U.S. revenues from about one-third of group total to 50 percent or more, adding he expected SAP's U.S. activities to grow faster than the rest of SAP.

"My target is clearly set to make the group's U.S. activities count more than 50 percent of total sales," he said without setting a timeframe for that goal. "At the moment we only make two billion euros, which is just about a third of SAP's total sales, whereas the U.S. activities of our competitors represent over 50 percent."

© Reuters Ltd.