Stefan Gruber, Director, Investor Relations Werner Brandt, Chief Financial Officer Henning Kagermann, Chief Executive Officer

John Frederick, J.P Morgan Gill, Citigroup Mark Bryan, Deutsche Bank Adam Shepherd, Dresdner Rick Sherlund, Goldman Sachs Gary Rollo, Morgan Stanley Charles DiBona, Sanford Bernstein Raimo Lenschow, Merrill Lynch Michael Briest, UBS Matthew Hammond, Credit Suisse Michael Schacht, Cheuvreux Alla Gorelova, Sal Oppenheim Stefan Gruber, Director, Investor Relations: Good morning or good afternoon. This is Stefan Gruber. Thank you for joining us to discuss SAP’s First Quarter 2006 Results. I am joined in Waldorf by Henning Kagermann and Werner Brandt. And Leo Apotheker joins us by phone from Paris. Werner will discuss the Q1 financials in detail and Henning will then provide some further commentary on the quarter’s performance and SAP’s product successes. Before we start with the call, I would like to remind everybody about the upcoming SAPPHIRE conferences in Orlando and Paris, in May. We will be holding investor briefings in Orlando on Wednesday the 17th of May and in Paris on Tuesday, May 30th. In addition, I will make a few remarks about forward-looking statements. Any statements made during this call 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 including SAP's annual report on Form 20-F for 2005, filed with the SEC on March 22nd 2006. Participants of this call are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates. And now I would like to turn the call over to Werner. Werner Brandt, Chief Financial Officer: Thank you Stefan. Ladies and gentlemen, welcome also from my side. It was another solid quarter for SAP, as our investments in product and market continue to pay dividend. Software revenues for the first quarter of 2006 were €528 million, which is an increase of 22% compared to €434 million reported for the same quarter last year. On a constant currency basis, software revenue were up 14% year-over-year. Maintenance revenues were €860 million, which is an increase of 16% compared to the first quarter of 2005. Sequentially, maintenance revenues were relatively flat compared to the fourth quarter of 2005 similar to what we saw in the first quarter of 2003, 2004 and 2005. First of all, we had some positive effect in the fourth quarter of 2005, similar to the positive effect in the fourth quarter of the previous year. This positive effect is mainly due to reversals of sales allowances and concessions. In addition, as in 2003, 2004 and 2005, we carefully reviewed our accounts receivables in regard to collectability and we have set up sales allowance for probable concessions and credit to customers. Product revenues, which consist of software revenues plus maintenance revenues were €1.4 billion in the first quarter compared to €1.2 billion in the same period last year. This represents a year-over-year increase of 18%. Consulting revenues were €557 million for the first quarter of 2006 compared to €475 million in the first quarter last year, which represents an increase of 17%. Consequently, total revenues for the first quarter were €2 billion compared to €1.7 billion reported for the same period last year. This was an increase of 18%. At constant currencies, total revenues increased 13% year-over-year. Operating expenses increased by €277 million or 20% year-over-year. The higher operating expenses were the result of addition of personnel, we hired over 3,400 FTEs since the first quarter of last year and increased the third party usage and travel related costs due to higher business activities. For the first quarter of 2006, we had €34 million and €40 million of stock-based compensation expenses and acquisition related charges respectively. This compares to €0 stock-based compensation expenses and €7 million of acquisition related charges respectively for the first quarter of 2005. On a pro-forma basis, which excludes the stock-based compensation and acquisitions related charges, first quarter expenses increased 236 million or 17.5% compared to the first quarter of 2005. Excluding the currency impact, operating expenses increased €175 million or 13% compared to the first quarter of 2005. The pro-forma product margin was 81% for the first quarter of 2006, which is slightly lower than the 82% product margins reported in the first quarter of 2005. The decrease in 2006 is a result of a higher amount of purchase licenses, a one-time effect from litigation related expenses and account fee impact. The pro-forma service margin were 22% this past quarter compared to 20% in the first quarter of 2005, as we saw higher billable utilization. We are pleased to see an improvement in year-over-year service margin as we continue to drive towards our goal of 25% service margin. Consequently, our 2006 first quarter pro-forma gross margin improved by one percentage point to 63% compared to the first quarter of 2005. Pro-forma R&D expenses as a percentage of total revenue were flat year-over-year. The 19% increase in R&D expenses on an absolute basis was a result of additional R&D personnel hired since the first quarter of last year. Pro-forma sales and marketing expenses as percentage of total revenues were also flat year-over-year. The 21% increase in sales and marketing expenses on an absolute basis was mainly due to further investments into the mid market business in both the channel and our direct sales force to support our hybrid model. Pro-forma G&A expenses as a percentage of total revenue were also flat year-over-year. On an absolute basis, we saw an increase of 7% to €101 million. Operating income was €409 million for the first quarter of 2006, representing an increase of 9% compared to the first quarter of previous year. Our pro-forma operating income which excludes again stock-based compensation expenses and acquisition related charges was €457 million, an increase of 20% compared to last year’s first quarter. The operating margin for the first quarter was 20%, which was down 1.6 percentage points from the 21.6 operating margin reported in the first quarter of 2005. The pro-forma operating margin which excludes stock-based compensation expenses and acquisition related charges increased by 40 basis points to 22.4% in the first quarter of 2006, compared to 22% in the same period last year. As we stated in January, we do not expect the 2006 pro-forma operating margin improvement to be linear throughout the year. Finance income increased €28 million in the first quarter of 2006 compared to the first quarter of last year. The increase was primarily the result of an increase in interest income due to a higher liquidity and higher interest rates. For the first quarter of 2006, net income rose 11% to €282 million. Pro-forma net income which again excludes stock-based compensation expenses and acquisition related charges and impairment related charges rose 22% up to €315 million. Earnings per share for the first quarter of 2006 were €0.91 compared to €0.82 in the same period last year and pro-forma EPS which excludes stock-based compensation acquisition related charges and impairment related charges was €1.02 compared to €0.84 in the first quarter of 2005. Our effective tax rate for the first quarter was 34% compared to 36% in the first quarter of last year. For the full year, we continue to project a tax rate of 34.5%. For the period ended March 31st 2006, cash flow from continuing operations was €856 million. Capital expenditure was €63 million, leaving free cash flow of €793 million for the first three months of 2006. This compares to free cash flow of €858 million for the first three months of 2005. The year-over-year decrease in free cash flow is the result of an increase in working capital mostly driven by a decrease in reserves and liabilities, and higher investments made in capital expenditure. For 2006, we expect cash flow to be close to €2 billion. The free cash flow generated reviews in the following ways: First, return to shareholders who share buybacks in an amount of 428 million in the first quarter and acquisitions in the amount of roughly 150 million, which was driven mainly by the Khimetrics acquisition which actually closed in January. Consequently, we had liquid asset of €3.8 billion plus another roughly €409 million in US bonds at the end of the March quarter compared to a 3.4 billion in liquid asset plus an additional 421 million in US bonds at the end of 2005. We continue to plan to use cash for further share buybacks, dividend payment and filling acquisitions. Beginning of the first quarter of 2006, we modified headcount reporting. To December 31st, 2005 SAP had previously grew headcount data by business area. However, we modified the reporting in an effort to better line headcount with the expense line item of the company’s consolidated income statement and to improve transparency. This change did not effect the total headcount numbers but only the headcount data within the reported headcount line items. Headcount is now reported in the following line items: Co-Product, mainly comprising support and custom development; Services, which includes consulting, training and hosting; research and development, sales and marketing, general and administration; and finally infrastructure, which includes IT and building. Year-over-year headcount increased by 3438 FTEs and by 775 FTEs sequentially from the period ended December 2005. At the end of the first quarter, total headcount stood at 36,647 full-time equivalent. We are still targeting to a higher 3,500 FTEs net for 2006. Of this 774 FTEs hired in the first quarter, 56% were in R&D, and out of the total R&D, 34 were hired in low cost areas. In the press release we have provided table showing our new and previous headcounts reporting structure for the quarter ended December 1st, 2004 and March 31st, 2006. For the first quarter we bought back 2.53 million share for a total of the €423 million. The average share price paid was €167. At March 31st, 2006 treasury stock stood at 8.34 million shares, which included the relief of 867,000 shares from treasury during the first quarter. Given the company’s strong free cash flow generation, we’ve planned to further evaluate opportunities to buyback shares in the future in order to increase our buyback activities in 2006. Day sales outstanding stood at 69 days at the end of the first quarter of 2005, which compares to 71 days at the end of the same period last year. One-day reduction equates to approximately €20 to €25 million in free cash flow and provides us the opportunity to continually improve cash collection quarter-over-quarter. Let me now finish up with our outlook for 2006. As described in our January 26, 2006 fourth quarter results press release, we continue to provide the following outlook for the full year 2006. The company expects full year 2006 product revenue to increase in a range of 13% to 15% compared to 2005. This growth rate is based on the company’s expectation for full year 2006 software revenue growth in the range of 15% to 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 50 to 100 basis points compared to 2005. And company expects full year 2006 pro-forma earnings per share which excludes stock-based compensation, acquisition related charges and impairment related charges to be in the range of €5.80 to €6.10 per share. The outlook is based on the US dollar to Euro exchange rate of $1.23 per €1. I would now like to pass over to Henning. Henning Kagermann, Chief Executive Officer: Thank you Werner, and good morning or good afternoon everyone, and thanks also from my side for joining us today. It was another strong quarter for SAP as we reported solid growth in license and product revenues. Also the pro-forma operating margin of 22.4%, which was an improvement of 40 basis points year-over-year came as we expected. Therefore, based on these results for the first quarter, we can reiterate our 2006 full year outlook. Meanwhile, the software environment remains unchanged discontinued but stable pricing pressure and customers continuing to spend cautiously. We have adjusted quite successfully to this pricing environment and continue to do well as a result. And while customer buying remains cautious, customers are willing to spend but they want to spend intelligently the software that knows it can deliver the right solutions and leads them into the next decade. SAP seems to be that chosen vendor as reflected in our strong performance for the past many quarters. Customers’ willingness to spend this SAP as a result of the strong portfolio of products, our ability to deliver the next generation of software solutions, a clear and concise road map for the IT investment and trust, which is extremely important in this business. I will get back to that in a moment. As we mentioned in January, we will no longer be providing peer group shares based on our previous definition of the peer group, we believe that after the large amount of market consolidation that we have seen among the larger companies in the software industry, the peer group has become too small to provide an adequate metric for the purpose of measuring sales market. Therefore, based on the larger $16 billion software market, our share in terms of license revenues on holding four quarter basis to that 21.4% at the end of the first quarter of 2006, which is slightly higher than the first quarter of 2005. This compares to Oracle at 8.8% and Microsoft business solutions at 4.6%. At 21.4%, we are nearly 2.5 times larger than our next largest competitor in terms of software revenues on holding four-quarter base. We have been quite successful in building the largest customer base in business applications over the past 33 years. More significantly, our success came through mostly organic growth. We believe organic growth is a right strategy, because it’s less expensive and more efficient for SAP, and we have much better control over the quality of application development and it provides some better return to our shareholders. In addition, it’s more predictable and less risky for our customers. The augment of our organic growth strategies were co-innovation and small strategic acquisitions. Examples of success in this area include partnering was more than 1000 ISVs data is a power or certify on NetWeaver, partnering the Siemens in healthcare, co-innovating was Microsoft and Mendocino and acquiring companies such as Triversity, Khimetrics, Lighthammer, and most recently Virsa. So, first acquisition stands out because it puts our concept of partnering with and potentially acquiring ISVs as both beneficiary and lowest for SAP and our customers. The benefits of this acquisition I am giving because Virsa was a partner, was a complimentary solution that already run on SAP’s technology, their product was being resourced by our sales force, and the acquisition health reduce complexity for our customers. The acquisition also provides a boost to our ecosystem, which was a motivating highest leased partner with SAP and develop software in our platform. It was a beginning acquisition for SAP Virsa our customers and our partners. Let me now get back to the topic of customer trust, which has been a crucial ingredient to building the largest customer base in our business. Building trust with our customers continues to be a top priority for our company and as a result, customer satisfaction is measured by an independent third-party remain at an all time high at SAP. While our customers have shown a lot of confidence in SAP over the past 30 plus years, it just is important to continue to deliver and remain a trusted business partner to our customers. What we are delivering are real tangible next generation product to our customers are presently implementing. It’s not just idle talk. We are delivering on our vision and promises with ESA based product already been shipped to some market. The good example is the delivery of the first enterprise service architecture enabled business suite on which we’re already receiving positive feedback from our customers in rent-up base. Let me now share with you some additional metric at the first quarter. Order entry was strong and total contract signed increased by 26% compared to the first quarter of 2005, as we continue to successfully grow our volume business. These greater than (inaudible) (inaccessible to microphone) up slightly from 24% in the first quarter last year, valued less than €1 million accounted for 42% of order entry, up from 40% in the first quarter of last year. The share of new customers based on order entry was 22% for the first quarter compared to 25% in the same period last year. The decrease is not unexpected as we continue to see more new customers come from the mid-market. Therefore it’s also important to talk about the number of contracts signed by new customers, which was 34% for the first quarter. We have revised and the direct channel increase slightly in the first quarter compared to the same period last year, while the average deal size, this was indirect channel decreased but this was compensated for by addition of volumes with indirect channel. Let me now cover our regional performance for which we reported gross in all regions. Software revenues in EMEA was up 7% or 6% in constant currencies, while America was strong, good results also coming from Russia. Germany did well for the first quarter, the software sales increasing by 8%. The contract wins in the EMEA region included E.On, City of Munich, Endesa and the African Development Bank. The Americas region was again the strong performer with 47% growth in software revenues was 30% at constant currencies. Good execution in U.S. drove an increase of 25% of software revenues or 15% at constant currencies. Latin America turned in a strong performance as a result of a unique large transaction from that region. Canada also performed well. Key contract wins in the Americas region included the Government of Manitoba, Honeywell, Jefferson County, Panasonic and The Dow Chemical Company. Software revenues in the Asia-Pacific region increased 12% or 7% at constant currencies. While Japan did not perform well in the first quarter as indicated by an 18% decline in software revenues or 17% constant currencies, the decrease was only €4 million on an absolute basis. Therefore, we would not view Japan’s performance as any indication of a long-term issue. We expect Japan to do better as we move ahead into the remainder of the year. Key contract wins in the Asia-Pacific region included Matsushita Electric Industrial, Sojitz Corporation, NCS and Torrent Pharmaceuticals. Our Safe Passage program continues to be a top priority for SAP. Year-to-date, we have signed in addition of 40 customers under the Safe Passage initiatives. Some recent Safe Passage wins include Fujitsu Australia and Korea Water in the Asia-Pacific region and Hettich Management Services in EMEA. Let me now move to the mid-market, where we continue to invest in our hybrid model approach to grow revenues in this market. The hybrid model incorporate selling those in the right piece of channel partners and directly going to our sales force. At the end of the first quarter, the small and mid size business segment represented 30% of order entry on holding for quarter basis. Among our mid market peer group, our share of the small and mid size business segments took at 36% at the end of Q1 compares to Oracle at 24%, Siebel at 23% and Microsoft at 17%. As for the indirect channel we continue to successfully grow the number of channel partners as well as customers. The number of channel partners and the number of SME channel customers grew by 40% and 45% respectively year-over-year. Before I close, I would like to give a quick update on solution reporting and NetWeaver and briefly discuss here on demand, which we announced in the first quarter. As we’ve stated back in January, we are no longer providing software revenues by solutions since customers are buying more and more industry scenarios in which each industry solution incorporate specific modulus or many of the various point solutions and moreover, we have moved to industry solution based pricing structure. However, as SAP NetWeaver we’ll continue to play a very important role for SAP, we will continue to break our NetWeaver sales. Therefore, for the first quarter was reported NetWeaver sales of €107 million, of which 21% came from standalone at NetWeaver sales. As you know, we have delivered ahead of expectations enrolment to the completion of our enterprise services architecture. For 2006, we have some additional steps along road map that you would expect. There will be hundreds of additional enterprise services for mySAP business suite. We will have ESA connectors to extend our enterprise service architecture implementation to SAP R/3, we will deliver mySAP All-in-One for industries on SAP NetWeaver. SAP NetWeaver will evolve to the end of the year into a business process platform. We would deliver the first host of solution All-in-One S on the business process platform, and there will be a broad excess for ISVs to the business process platform. With here among demand, we created a unique solution because it provides for an easy to deploy on-demand solution but at the same time provides for the quick and easy migration to an on-premise solution when the customer wants to migrate. Also, off-premise or on-premise, our solution easily integrates with our customers’ existing enterprise systems. Therefore, our CRM solution goes well beyond the limitations of today’s NetWeaver focused on demand pure place. Key contracts include American Standard, DuPont and Capita Insurance Services in the UK. Our goals for 2006 include continued growth as defined by our financial guidance, successful new product releases, marketing 2006 as one of the biggest years of new product releases in quite some time, and continued development of our business process platform as defined by our product growth metrics. Key investment areas for 2006 include Mendocino, Analytics All-in-One. Our on-demand offerings in mid market and further development of the business process platform. These investments will help us further penetrate, given its user, the enterprise in general and help us achieve our long-term goals of significantly expanding our addressable market by 2010. So, thank you and we are now happy to take your questions.

Q - John Frederick: Hi, just a two quick questions if I can. First off, Werner, the 2 billion cash flow target, was that operating cash flow or free cash flow? A - Werner Brandt: Operating cash flow. Q - John Frederick: Operating, fine and then if you look at the product gross margins over the last couple of years you have been able to deliver quite a strong improvement in the gross margin going from 80% to 82.7% to 84.8%, how much further do you think you can drive that gross margin obviously as the mix change continues, it should keep expanding but what do you think the right progression is over the next couple of years? A - Werner Brandt: Yeah let me first address this year -- this quarter performance on the product margin. I mentioned we saw a decrease and the decrease is really driven by additional expenses related to litigations, lawyer fees were included here and we had a strong currency impact. So, if you compare and eliminate this and compare with the first quarter of 2005, you would see the same margin as in 2005. Going forward, I would argue that we anticipate the product margin as the same range as we had it in 2005 though from our perspective of today, no further increase of the product margin. Q - John Frederick: Okay, thanks.

Our next question will be coming from Mr. Gill of Citigroup. Please go ahead sir. Q – Gill: Hi, good afternoon every one. Could you just run-through a little bit strategy on the professional services side, in the past Werner you’ve sort of commented that, you know, as you did internal work, and utilization rates were low, and you had a higher third party content as a consequence, it seems that resource is being freed up but it looks as if you get the third party resource in place as well, where should we be looking for going forward? A – Werner Brandt: I think first of all, maybe Leo can add to this. We have increased our billable utilization quite amazingly, if you compare with the first quarter of 2005 but I am sure that Leo wants to add something here. A – Leo Apotheker: Thank you very much Werner. As we have seen in the results, we have managed to improve the profitability of our Professional Services consistently across the board, which we had committed to do. Also in line with the guidance that Werner provided we are getting off the air for Professional Services. What you will see moving forward is that we will stabilize as we move ahead in the coming quarter, the revenue that we derive for Professional Services. So, you should not extrapolate the kind of growth rate that we had in Q1 in Professional Services for the entire year, that would be an over statement.

Mr. Gill, does that answer your question sir? Q – Gill: Thank you.

Thank you. My next question will be coming from Mr. Mark Bryan of Deutsche Bank. Please go ahead sir. Q – Mark Bryan: Yeah, good afternoon. I just wondered if you could expand a bit more on the U.S. market specifically, obviously and the growth is still very respectable, was down somewhat on the trend from last year, should we expect any lumpiness going forward in this revenue stream or is that now if you like setting the threshold for the rest of 2006? Thank you. A – Henning Kagermann: Let me try to answer that, let’s see here. We had another good quarter in the U.S., it’s the 14th quarter in a row of double-digit growth and we have every intention of keeping growing in U.S., so quite a lot of opportunities for us in that marketplace, obviously as we are comparing more challenge in quarters as we move forward, you should not expect 40 or 50% every quarter, that would be little bit too optimistic, by the way the new product that we are bringing in stream with the effects that we hope to get from the business suite unable to meet the endless opportunities that available in the U.S. market which would count on the U.S. as to continue to be one of the growth engines of SAP in 2006. Q – Mark Bryan: Thank you.

Our next question is coming from Mr. Adam Shepherd of Dresdner. Please go ahead. Q – Adam Shepherd: Hi, good afternoon. Just a quick question on the ecosystem you are building up. The feedback from major customers that we get, one of the major attractions of NetWeaver is the potential of the third party extensions are being build out bringing to your platform. And the question I have is, how you monetize this more directly, and I think this is clearly indirectly how this helps you expand your penetration within accounts but I wonder if you are also intending to monetize this directly, would you act as an intermediary for example in some of the transactions between Eurologic customers and some of the small IPCs that they are out there? A – Henning Kagermann: Yeah, it’s Henning. There are two ways to monetize and we would go for both. One is clearly that we will get revenue stream because nearly all of the solutions, the ecosystem partners are building today need as a minimum NetWeaver as a technological base to run on it and develop it. But in the future more and more, it will be solution so-called composites, which will be used or ready to run services, we offer with the business process platform. And then I think the revenue will be higher because today we have to – let’s say a certain price point if somebody is using development license fees from NetWeaver or if we used NetWeaver as one-time environment but once as they also use the end up by services coming from the application component bundled into NetWeaver next year, once it becomes a business process platform, you can imagine that we can charge more, customers knows this, customers are willing, let’s say to get – and from that point of view, I think the revenue stream will be larger and as I pointed out, it’s the beginning of the year in particular of higher margin because that is not a definite sales we have to do because once these products are sold more or less the customers have to call in us for the exercise to the business process platform. Q – Adam Shepherd: And just a follow-up I mean, some of your partners are suggesting you act as a broker for these transactions as well, so do you see a direct revenue contribution as a result of that? A – Henning Kagermann: I think here we should be a little bit careful, I think the field to the U.S. organization will be very careful in selecting a few of the partners product and resell them directly, that makes a lot of sense. And that was a reason why I refer too much to the Virsa transaction. In this case, it’s clear as that we get fees because we are more or less will be selling on. But as a broker I think that is too far ahead and we should not focus on these type of revenues, let’s focus on the others two reselling and more important getting revenues to be from using our underlying software environment, I think that’s where we are mostly after. Q – Adam Shepherd: Okay, thanks very much.

Thank you, Mr. Shepherd. We will now go to Rick Sherlund of Goldman Sachs. Please go ahead sir. Q – Rick Sherlund: Thanks. First, I wonder if you could expand a little bit on this hosted product probably heard you say Henning All-in-One by the end of the year and also if I could get anymore on this unique deal in Latin America, is there anyway to size that or any comment on that? A – Henning Kagermann: Yeah, Rick, from Latin America I think Leo will take this over, just let me comment on the first one. You know that with CRM on demand, we made a step into let’s say different business model, you ask me on stage sometime ago if this could be applicable to other product outside of CRM, for example, to an ERP system and I said why not. I think for the mid market it makes lot of sense to start with that, and therefore we always said that in particular, might up All-in-One will be the product to start with, therefore we pointed out hosted where we can might up All-in-One first because I wanted to exclude that you are expecting me to be below the entire Suite here. Q – Rick Sherlund: I am sorry, are you hosting the entire All-in-One suite by the end of the year? A – Werner Brandt: We will by the end of the year make a decision but the intention is really not let’s say to host trust if you functions but looking forward to suite, yes. A – Henning Kagermann: Let me maybe pick up on the Latin America thing, we had a single very large transaction that happened in southern America, the rate is to grow material, which of course because of such a large transaction, distorts the picture a little bit. Q – Rick Sherlund: Thanks.

Thanks sir. Our next question will be coming from Gary Rollo of Morgan Stanley. Please go ahead sir. Q - Gary Rollo: Hi folks, Gary Rollo from Morgan Stanley. I just want to ask a couple of questions; maybe if I could drill down little further on that, what we can expect in U.S. market and maybe a follow-up with a question on the financial buyback. On the U.S. market first, I think Leo commented that we should expect growth to continue, should we expect U.S. business to pickup to an above average growth rate for the rest of the year and has been the growth as you have pointed out in the last 14 quarters, just trying to guess feel for how we should expect that comes true maybe in the next couple of quarters? A – Werner Brandt: Let me just reiterate what we have said all along. We have tremendous opportunities to open for us in the U.S., we are right now the market leader in the U.S. even after the recent spate of acquisitions, and we have every intention of continuing the leadership. So, we see opportunities and as we have said in the beginning of the year, we can confirm this also after this quarter. The U.S. will be one of the growth engines for the company in the year to come. Therefore, you should expect that U.S. would achieve higher growth rate than the average growth rate of the company. Q - Gary Rollo: Thank you. A – Henning Kagermann: Gary, your question with regard to buyback? A – Gary Rollo: Yeah, I think you’ve done quite a lot of what you thought you would do for the full year already in the quarter, and I am thinking that we will have a lot of room from your free cash flow generation, that would do more wondering if you care to give us an idea uptakes to what this year might be? A – Werner Brandt: Yeah, we will do more and I gave you an indication during the earnings release of Q4, when I said that our guidance for 2006 is based on 307 million shares outstanding, so as of today as you see weighted average we are at 308.9 million, so that at least what we want to buyback on top of what we did in the first quarter. Q - Gary Rollo: Thank you very much.

Thank you, Mr. Rollo. Our next question is from Charles DiBona of Sanford Bernstein. Please go ahead. Q – Charles DiBona: Thank you. I am wondering if you could help characterize this – the standalone that NetWeaver sells it, I think a fairly big up search of that, can you give us some color on whether those are existing customers sort of expanding their NetWeaver usage or there new customers buying into this as a standalone platform and then maybe a little bit of color on to how they are using the product as a standalone product? A – Henning Kagermann: Thanks. It’s mostly existing clients that are using the integration capabilities of NetWeaver to integrate on SAP product. I think that’s what we also expected to know that there are few cases where non-SAP customers use the technically integration capabilities of NetWeaver to integrate their legacy systems but this is most exception, rule is integrating on SAP systems to SAP. I think it’s not unexpected if you know these that lot of traction is coming to Xi, because people start integrating first the processes so there is a lot of uptick in particular in Xi usage, then next is ported (phonetic) and finally, I think they are also customers starting to develop let’s say Xi solution based on NetWeaver and then it depends on the small as the entire platform, but let’s make the priorities I would say today you could say most customers start using Xi. Q – Charles DiBona: Okay, thank you.

Thank you sir, our next question will be coming from Raimo Lenschow of Merrill Lynch. Please go ahead. Q - Raimo Lenschow: Hi, two quick questions for Werner. First of all, on the financial income, Werner, obviously you mentioned that you achieved a lot more from the interest income, and but the cash position is pretty much similar to the quarters before hand, have you negotiated some special deals then, what can we expect going forward? And then the second thing is on the stock-based expenses that we see in the various cost lines, it seems that R&D and product side are seeing a lot more stock-based expenses than the other lines. Can you just explain, are they kind of more linked to options payments or what’s your driver for that? A – Werner Brandt: The second part of course depends how we allocate the stock-based options within the organization, and it’s for sure the majority goes into sales and marketing, and on the product so the development side. Related to finance income, I think it’s a combination of both as I mentioned higher liquidity and keep in mind that we have roughly 400 million included in financial assets, that’s corporate bond we hold with a very attractive interest rate for us. If you look down the road, I would argue that from a finance income perspective for the full year, we will achieve roughly 100 million. Q - Raimo Lenschow: Okay, perfect, thank you.

Thanks very much sir, our next question will be coming from Michael Briest of UBS, Please go ahead sir. Q – Michael Briest: Thank you, could we get an update on the premium maintenance software, and what the interest that will from customers if they, whether we should expect to get any impact on the maintenance revenues this year? And then secondly, the press stories are out the unionization of the workforce or the employee council, could you give us an idea of - is that’s an impact on SAP and you will be with that, thanks? A – Henning Kagermann: Yes I was twice to take both as Henning and might be at the end Leo can add something to the maintenance. The premium maintenance came out at the end of January beginning of February or so, so I would say half nearly or a third of the quarter was gone, it’s a little too early to comment on this from my point of view. I think what we can comment is more the maintenance, this makes attention maintenance which is out there for sometime and where we see a lot of particular large customers taking that, so that tells us is that there is a life service behind customers are willing to pay the additional amount, they know it’s make attention is 25%. And I would say ask us next quarter for the premium one, it’s a little too early now. For the work council, it is very important to know that to heading the work’s council has nothing to do to get unionized. If you look to SAP, you know that we are the only large company left in Germany that has no work’s council, so it was a direction of time when a few people were asking for it, we have now 36,000 employees and they can - and I don’t know it’s 13,000 in Germany and CI enough just to give put this into perspective. I expect that we will get a work’s council in June when the elections are, was a very, very high representation of people that want to preserve SAP’s culture and the induction to the management like it was very successful in the past. I can’t exclude because we will get 37 members in the work’s council, if there is one or might be two from the unions because that would mean that 2% or 3% of our employee based, German employee-based would hopefully but this is by far my novelty so you would expect to see the culture in SAP, the efficiency and the way we work continue like we did it in the past. Q - Michael Briest: Okay, thank you.

Thank you Mr. Briest. We have another question from Mr. Matthew Hammond of Credit Suisse. Please go ahead sir. Q – Matthew Hammond: Thank you, two quick questions. First of all, can you just give us a feeling of how many extra heads do you think you are going to add in services this year, you’ve given the sort of overall figure but if you give us some sort of feeling, what you are thinking in adding services, especially given you know they are very significant uptake in Q1. And secondly, can you give us a feeling for Japan, it seems to be a sort of primarily difficult business for you to forecast, not only for us but I guess you guys too. A – Henning Kagermann: Matt, if I can take the - and give Leo and on a time to think about the services. As I pointed out we are not concerned about Japan, we are in a transition there. Leo has installed a new MD (phonetic) which has all let’s say our trust behind to make the necessary transitions into more volume business, that’s one point of mettle and that takes a little time. The second is we are confident that now having NetWeaver, we can address better than in the past these, I would say, special interest of the Japanese customers in home grown software. In the past, it was tough for SAP to expand the market. You know our market share in Japan is a high package software, as we have it in Germany but Japan has more potential so it’s up to us to create a market for package software, we think now it is set form in NetWeaver, this is a good opportunity. So, we are looking forward that Japan will grow this year and you will see it at the end of the year. It’s a similar situation like last year but revenue where we’re a little bit concerned at the beginning and at the end pretty as the same what happened in Japan. A – Werner Brandt: Yeah, maybe I can answer the second part of the question as well. You should not correlate necessarily your expectations in consulting our services with headcount. What we do is the first when we attempted to do and we were very successful in 2005, and now in particularly in Q1 2006 is to increase the bidding rate of our variable capabilities and capacities which we have done rather well in Q1 which has on the one hand tools of revenues but significantly also the margin in consulting. And we are going to try to keep that policy moving forward, so you shouldn’t expect huge amount of additional headcount and as I said earlier on, it is not our intention to keep growing consulting or services at the rate that you are seeing today. We are moving in the mix of revenues and consulting more and more towards high value-added premium services, which therefore can be delivered without necessarily going into so much the workforce but by adding significant added value to the existing workforce and therefore being able to either achieve higher billable rates or even higher rates. As to Japan, just to complement what Henning has said, you should bear in mind that the little dip that we had in Q1 is nothing more than 4 million, and given the structure of the Japanese market is usually 1 to 2 last years that have either slipped or have been postponed by a customer, it is not indicative of any trend. A – Henning Kagermann: And Matthew, if you look to the presentation we provided, there is one charge included in worldwide headcount, and there you will see that in the service line we even had a decrease in headcount if you compare the March 31st number with the December 31st number. Q - Matthew Hammond: Thank you very much.

Thank you Mr. Hammond. We will now go to Mr. Michael Schacht of Cheuvreux. Please go ahead sir. Q – Michael Schacht: Yes, thank you and good afternoon everybody. I got two questions if I may. First one is maybe a follow-up on the service side, you mentioned that you are going to increasingly focus on industry solutions, does it not incorporate on higher service on revenues as a percentage of the business model? And secondly, Latin America you mentioned a very large deal in the quarter and in the past, these deals have always been split over several quarters so should we impact, should we model similar impact also over the next quarters from this last year? Thank you. A – Henning Kagermann: Mike, I will take the first one and then Leo can come to Latin America. We stretch so much industry solutions was a following reason. If you look to our price list then you know that a few years ago we sold the components like CRM, STM etc.. Over time we added components, except came in and we added engines because the business is getting more and more automated, which means our price list got more complex. We wanted to simplify our price list and we really made a lot of in-depths analysis with our customers and the result was that the best is having industry specific price list and going away from here ERP CM etc., having more or less in ERP as a backbone but then on topnotch so much is a pricing management CRM but end to end business processes and that is very much appreciated from the market and that will be changed off prices accordingly. So, we are not following so much as the categories of CRM STM etc., but it has nothing to do just to finish this with a change in our strategy and services etc., It’s just a flow to the market and these are artificial that the use of looking to enterprise applications that is something which came up five, six years ago when we had the era of best of fleet which is now gone and customers looking at it. A – Leo Apotheker: Yes, as to your specific question in Latin America, it was indeed a significant projection, we always do the same thing, we booked contract according to deployment and speed of adoption of the customers so, that nothing historically added here, we have done the same thing on that particular deal as well. It so happens that a deal of that type of goods with an existing customer so part of it can be adopted rather quickly. Another part of it will be adopted overtime, and that is how we will of course that would meet to fill our revenues that will be generated from this contract. Q – Michael Schacht: Thank you. A – Henning Kagermann: Thank you, we have time for one final question.

Yes sir, the final question will be coming from Alla Gorelova of Sal Oppenheim. Please go ahead. Q - Alla Gorelova: Thank you so much, I have two clarification questions. First of all on Germany, if you could give us some indication what exactly happened in Q1 that you were able to report such a strong revenue increase if it’s any particular sector or any particular reason specific for the German market? And the second question is on the progress in Mendocino, where you are standing now, what’s the pricing, if you could give us little bit some more information. A – Henning Kagermann: This is Henning. On Mendocino, use it’s on bracket going according to plan, so I think we said we want to shift in June if that’s still the case and we will show something as it aspires, the Mendocino is normally on track. In Germany, I have to say therefore under description that the team did a very good job so it’s a good sales execution we have to say here. And therefore they are also confident for the rest of the year in Germany, but let me add as being a German, one final remark I am also seeing that the Germany economy in particular the companies, our customers did a good job in the past earning money and are ready to invest. Q - Alla Gorelova: Is that possibly an indication of an upgrade cycle turning now in your favor in Germany? A – Werner Brandt: That’s too early to say, but I just wanted to indicate that we have a large installed base and these large installed base is to see solid business. Q - Alla Gorelova: Alright, thank you. A – Henning Kagermann: Thank you very much. Stefan Gruber, Director Investor Relations: I think this concludes today’s conference call. Thank you all for joining us then we look forward to seeing you at the upcoming SAPPHIRE in May.