Stefan Gruber - Head of IR Henning Kagermann - CEO Werner Brandt - CFO Léo Apotheker - Deputy CEO and President, Global Customer Solutions & Operations

Knut Woller - UniCredit Stefan Gruber - Head of Investor Relations: Good afternoon and welcome everybody in Frankfurt, to SAP's Fourth Quarter Results Conference. My name is Stephan Gruber. I am Head of Investor Relations at SAP. Let me quickly walk you through the agenda for the day. First of all, you'll get a quick recap of the 2007 numbers by Henning Kagermann, the CEO of SAP, including future analysis of our growth opportunities and a midterm outlook up until 2010. Then Werner Brandt, the CFO of SAP will walk you through the results of 2007 in detail and he will also introduce you to the outlook as well as the changed format to the outlook. And then, we have Léo Apotheker, Deputy CEO of SAP and President, Customer Solutions & Operations, who will provide more color on the regions and who will discuss our growth opportunities both in the established and the new businesses. As usual, a couple of technical comments. This conference is being webcast in our Investor Relations website. For those who follow this event on the web, I guess probably that's a majority of today's attendees, please send questions by e-mail to investor@sap.com and we try to take some questions by e-mail later on. For those of you here in the room in Frankfurt, we have roaming microphones, please use one of the roaming microphones later on during the Q&A session, so everybody on the Internet can hear the entire dialogue. And all the slides we will be showing today are available for download on the SAP Investor Relations website. And finally, the standard statement I have to read, that's the Safe Harbor Statement. Please note that except for certain information and matters discussed in today's conference may contain forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the company's future financial results are discussed more fully in the company's most recent filings with the Securities and Exchange Commission. And with that, I would like to turn it over to Henning Kagermann. Thank you. Henning Kagermann - Chief Executive Officer: Thank you and let me just add that it could be that I use product revenue instead of software and software-related revenue because its quicker sometimes, okay. So we had a good year 2007 and I want to come to the highlights. Let's start with the guidance. You know that we had the highest growth after the boom year 2000. For product revenue, it was on a constant currency base 17% that shows the volume and therefore let's say beyond the range we have given in the guidance. On the margin, it's similar we came up at the higher end of this range, its 26.7% and you know that let's say we have invested into Business ByDesign as indicated 120 basis points, currency 30. So you can easily see how strong the underlying business was also from a margin side. Now let's look to the market. As every year, market is measured in U.S. dollars. So I have just translated normally, without sophistication, our numbers in U.S. dollars. And you see the downwards that this corresponds to more than $10 billion, total more than $14 billion. And therefore, if we compare ourselves to the market with 15% growth in U.S. dollars, it's 24, so clearly our performance is same on the total revenue side, like in the last years. And I think on that it's obvious that the market share gains are significant four percentage points, all organic growth. Yes we made some small acquisitions, but it was roughly 1 percentage point to our product revenue and therefore it is not substantially up. We gained by the way our market share in all regions and Leo will come to this. Now we have done a few other things, I would like to highlight. You know that our target is always to be a market leader in those segments we identify as strategic for SAP. We want to do it more through innovation and less through consolidation and I would like to guide you through the four key areas we had identified many year's ago, known to you. We said in order to double our expressible market, we want to focus, in particular, on the business process platform, mid market, business user solutions and not to forget the core business. So, let me start with the core... with the business process platform, because it's underlying under the other business as well. This is key for us. We talked about it many year's. It's now completed, but more important we have a huge adoption in the market. You know that a business process platform that is unique in the market or SAP defines it as three key pillars; one is the integration platform NetWeaver, momentum is huge. We have now 29,000 productive systems, we add 1000 every month. From a software revenue point of view, those revenues we allocate to NetWeaver have reached roughly €1 billion. Two-thirds is application related, it's when we sell the suite in NetWeaver is bundled, but a third is where the standalone NetWeaver sales, €330 million doubling against last year, so you see the momentum. Second key pillar is the services. I think the more services we have, the better are the more chances that we have people are consuming these services through composite applications from other applications you know that was something that we referred to as potential revenues in the future. We have now over 2000 of these services available. Roadmap is completed as announced. We have 150 references clients that speak about it. So that's in a good shape. And very important, the third pillar, composition, is now available as well. That was a key achievement of last year that this final package for ERPs is chipped. So process platform is complete. All our product are transformed with the exception of Business One, but this was never our intention. Let's come to the core business end here. It's key that clients are adapting to these platform-based ERP systems and that was a frontrunner and you know that now the suite is there, so therefore that will be the next one. More than 5000 productive clients, adding 500 a month, that's a pretty fast momentum. Behind this concept of enhancement packages. So not the traditional upgrades any longer, you know that clients don't like it, it costs money takes time. Enhancement packages I've not to quote here, but if you go through them, you know them. Here there is a cost implementing them is nothing more than a support package, which is nearly nothing. An enhancement package is not small and cheap for you. An enhancement package is something like 100,000 person days. It's a lot of innovation to our client. There is key. Good growth in some key industries. Again Leo will cover that, and for me most important in the last year is the successful launch of the new CIM release in December. So it's now available for our clients and we had a extremely good feedback from the press and from the business analysts, because it has both, it has a lot of functionality in it, but it's extremely simple. And we need both to attract users and to push it more into install base. From mid market, we have completed the portfolio; it's a $45 billion market. We believe with these suite products we can cover the entire market. It's a lower end risk Business One. We added 4,690 new customers in 2007, at the higher-end SAP business All-in-One, which is now more on a business process platform that was achieved, we had bundled some CIM. We added 1700 new customers, so that is in a good shape. And you know that we have taken some of our money in 07 and we would take some of our money in 08 for organic growth into a new business segment, which we will address by SAP Business ByDesign. We believe it's more the lower end of the mid-market. It's not only a new product, it's an entire business model. We achieved 650 customer engagements. People ask, what is an engagement here? So let me explain. This is everybody who is either in trial or in implementation or line. What about the final segment business user solutions? Here we have adopted a different strategy. We wanted to be as quick as possible, the number one in this segment as well, because it's fast growing. We had the unique opportunity to acquire the leader Business Objects, the leader in business intelligence, the size of $1.25 billion for product revenue. And now you can see that the combined entity is the instant market leader with 17%. The market data coming from IDC, roughly $15 billion, grows 9% to 12%. And if you look through the three segments, business intelligence that's where the portfolio of Business Objects kicks in. It's more or less their portfolio, they are the leader here. Governance, risk and compliance is coming from SAP exclusively. We are the perceived market leader. We have launched this category first to the market, enterprise performance management is a combination, both parties have something and we combine our portfolio here. Now, as we look forward, we would first ask ourselves and you ask what is the potential SAP has and it's a pretty simple view. We have three dimensions, we can grow, we can attract new customer, it's obvious. We have now 46,000 and 20% of our order entry is coming from new clients, so a significant piece. So we can more or less get a large piece of this cake. Whereas the mid-market, I said it already 45 billion market, so it was to go there, BRIC countries where we are very successful. 3.5 billion opportunity, fast growing and we should not forget the services industries. Now we are transforming into a services society, so they become more... they grow more and more, have more users. That is something SAP will focus as well, we guess it's a $14 billion market. Then we have two dimensions, we can either let's say make the cake a little bit bigger and putting something on top or something underneath; more users, more functionality. And you'll see it in our price list, we price per user, we price per engine. Engine is obvious because if you automate more and more, there are no users. But we bring value to the client, and we want money as well, so therefore both. From a user side, three segments; business intelligence, definitely. That's the reason why we did this acquisition. We believe today 15% of employees in the company have access to really business intelligence and it will change in the future our estimations in the next five years up to 50. So the 50% of the employees have the access to business intelligence. We should not forget, packaged software is successful but, many, many clients has to customize software, they program a lot since they have launched. That's now getting better for us, this is composition environment business services with the tools. So we believe that we will get more and more users in this space as well. And then finally, we try to reach users where their natural home is, so some of them are living in the office space for Microsoft, some are living in the office space from Lotto's, from IBM many of them are using smart phone and using this more and more also to business intelligence. And there are the areas where the corporation like Microsoft in IBM the one hand side, and going more into the mobile space. We will let's say attract users to drill down to the information given from SAP. Functionality, the engine prices is something like meters, the barriers [ph] produced revenue all those things. There is an ongoing consolidation of the application landscape. We believe in a top 2000, this is a market of roughly $10 billion. I have already highlighted the space of the new performance optimization solutions, business intelligence and finally, there is an integration market, the integration tools. I have said that SAP NetWeaver is an integration platform. We have seen the standalone 330 million. This is a huge market, where we are just a little bit in, but we can get more out of this market. So that brings us to a slightly different view in particular for the financial market and I think both Leo and Werner will use the slide as well. If you look to SAP, not so much from let's say how we strategically put our acts into the different portfolio basket, but view from the outside. You will see more or less three slices. It all a big piece of the established business, which will continue to be the foundation of our business, highly profitable organic growth double digit. We will outperform the market with this segment and we expect further operating margin expansion, no doubt. But we have prepared for the future and we add two large additional segments; one is Business ByDesign, as we said not just a new product. We open an entirely new market organically. So we pay the bill every month for what we are doing here in 2008, €1075 million to €2025 million. We would build the infrastructure for the volume business in 08. In 07 it was about having the product volume ready, that's done. And we believe, we end up with 1000 costumer engagements at the end 08 and then we'll ramp up the business more and more in terms of top line but also bottom line, so that the revenue potential of 2010 is about a billion. On the other side, we have the Business User Solutions. Now encapsulated in this new entity SAP Business Objects. 2008, we will do all the integration, the product growth and everything and then, we believe after 08 this entity will grow faster than our established business, it's a faster growing market. And please have in mind, both segments as by definition today at a far lower margin. This will move up and therefore the entire margin should improve significantly. The final point, and I think it's important. All the investments we are doing in these two segments Business ByDesign, Business User Solution have a positive impact on our established business. And I will explain why with two final slides. Let's start with Business Objects. If you look, at a first glance you would say, what they are doing as they get 25,000 to 30,000 customers from Business Objects which are non-SAP customers, what will they do with that? First answer, we want to extend this market. We will continue to sell in the non-SAP market, therefore it's a standalone entity. So this is waxing [ph] that comes in addition. Second, we can now combine both. We have best business intelligence, we have best business process platform. So we can create a new category of applications which we call it closed-loop business performance optimization that you can only do if you have both in place. That will help us to sell into the installed base. Mid-market; Business Objects has a lot of partners in the mid-market. They have packages for the mid-market. They have the information on demand, we'd just leverage fees and bundle it into our offerings. Business Process Platform, they cannot contribute, but we will build a complementary business intelligence platform, which you need to cover the entire space. So industry solutions, they have a very strong presence in the industries where SAP is not that strong; for example, financial services, telecommunication retail, we can leverage that. And please don't forget that if you have the best business intelligence capabilities in-house, you can push the suite even forward and come to really operational analytics embedded, analytics industry. So there is more than just covering this additional segment. And by the way the same is too for Business ByDesign. Last year, we were focusing very much on this new... or exclusively on this new market we want to open for us. Now, well, we know it's more about go-to-market, more about the business model but less about the product we can extend our view. It was obvious from the beginning that Business ByDesign is a good vehicle for smaller business partners of large... for entitiesto take it and perhaps interconnectivity network readiness out-of-the-box, because we come more and more to seamless processes across enterprises that's important for the small businesses as well. We can extend this, we can now start offering it also for small subsidiary of large groups, which I think everybody believe we will do at some point in time and the design is very modular. That's that important both from the technology side and from the application side. So we can take certain modules, certain pieces... not the entire product, certain pieces and reuse them to bring new innovation extensions to the large enterprises as well. That means the benefit is obvious for clients of this out-of-the-box integration on a business level, lower TCO for us that we can increase share wallet, but that we have definitely lower around the investments. So with that let me conclude. We believe these are our three advantages. I always believe we have more but let's bring it down to three. We are the market leader for all the key segments, for our large and mid-market and in particular, now for these very important business user applications. We have a varied balance and a rich portfolio of opportunities, because we are strong in all geographies and all industries which is particular important in a more volatile economic environment and we have natively integrated product portfolio. We have not assembled our product portfolio, but buying it piece by piece from the market which we believe in the mid to long term is an important strategic and competitive advantage. Thank you. Werner Brandt - Chief Financial Officer: Yes, let's continue with more detailed financial analysis and I will jump right away here in the financial highlights for the full year 2007. You see that software and software related service revenue increased by 17% on a constant currency basis but you also see that we provide double-digit growth since 2004 with regard to the software and software-related service revenue. This is heavily supported by a strong double-digit increase on the software revenue side, also with 18% here in 2007 and Leo will go into more detail in his presentation from a regional perspective and also from a market share gain perspective. If you look to the operating cash flow, you'll see that we achieved more than close to 2 billion in operating cash flow and free cash flow being 1.4 billion. So the difference here is investments in capital expenditure and we announced beginning of the year that we would achieve 2 billion, that's what we achieved in 2007. If you look to the operating margin, you'll see that we ended the year with 26.7% but if you look into more detail here, we would have to add back 30 basis points for the currency and additionally 120 basis points from the investments of accelerated investments in Business ByDesign. So the margin of the underlying established business is about 28%, it's 28.2%. If you look to the group total revenue in detail, you'll see I mentioned before 17% on the software and software-related side at constant currency driven by software revenue growing by 18% and also support revenue on a constant currency basis increased double-digit by 15% and subscription revenue even increased by 46%, inline with our expectations regarding the subscription revenue. If you look to the service side, you'll see we have growth on constant currency by 4%. This is inline with our expectations. We have limited growth on the consulting side. That's what we want to achieve. We drive the consulting business more from a profitability perspective and we have a strong increase also double-digit on the training side, which is a highly profitable business for us, so here it makes sense to grow double-digit year-over-year. So total revenue increased from a constant currency perspective 13% and we achieved for the first time to be €10 billion benchmark. If you look to the currency impact, we talked about this from rate perspective. You will see the absolute numbers. If you look to software revenue, I think the currency impact was on the top line 124 million. If you go to software and software-related service revenue it's 260 million, and if you look to total revenue it's even more than 360 million, which was the impact from the currency. If you look to the operating income, it's 129 million and the impact from the margin perspective as I mentioned before was 30 basis points. If you look to the income statement, there is one point I would like to highlight that's the inclusion of income from discontinued operation net of tax, it's 40 million. That's our to move in [ph] new business, where we have indicated that about towards the end of last year that we want discontinue this and we are looking to sell this business throughout 2008, and this is in the consequence from U.S. GAAP that we separated from the continuing operations and put it into a separate line item in to our P&L. Some additional supplementary information about the finance income. First, you will see we have an increase in interest income here which has two reasons; number one, we were able to achieve high interest rates by roughly higher by 80 basis points and that will be at an average of 4.3%, number one. And number two our average liquidity is a bit lower than last year, roughly 300 million lower. So the average we had throughout 2006 was roughly €3.1 billion. Average financial income and gains and losses from investments were impacted in 2006 by an appreciation of our derivatives related to the STAR hedging. This was an amount of roughly 7 million and second reason for the swing here from positive 2 to minus 10 that we had higher write downs of minority investments in 2007 compared to 2006 and this was an amount... is higher amount of 5 million. But there is no need to worry, the total write down did not exceed 10 million, I think the expected amount was 9.7 million. If you look to the tax rate; we achieved 32.2%. It seems that if we would have had an increase on from a pure U.S GAAP perspective, that's true. But we have to keep in mind that our effective tax rate of 2006 was impacted positively by non-recurring tax benefit of roughly 85 million and this represented roughly 3.2 percentage points. This came from settlements of various tax audits throughout the world. And if you add this back, the comparable tax rate would be 33.1%. So we have a reduction here actually of 110 basis points on an apples-to-apples comparison. Finally, I have some additional information. Our acquisition-related charges in 2007, this is €61 billion, and if you would strip this out, then you would come to operating margin of 27.3%. So this is actually versus 60 basis points and we need to refer back to this, when we talk about the guidance for 2008 which is based on non-GAAP numbers. If you look to the operating expense; first of all, from a gross margin perspective, you see that on the product side, or software and software-related service side, we have a margin a decrease of 110 basis points and 50% of this relates to the investments in business by design and this would mean that we have a reduction of 60 basis points year-over-year and this reduction is mainly due to the fact that we have an over proportional increase in our purchase licenses, which is driven by three factors. Number one, software, where we sell to our customers' software and like Adobe, McAfee, RWD from as a software vendors; number two, database; and number three what also is also included in these software and software related services is the amortization of a client IP when we do acquisition into this part of the P&L and of course, leads to a reduction of the product margin. Now if you look to the professional service, then you see here a reduction of 20 basis points. If you split out the investment... accelerated investments for Business ByDesign, and then we have an increase of 30 basis point year-over-year. I think this is going into the right direction, although we have invested heavily in additional headcount mainly in the consulting area. We added more than 1200 consultants throughout 2007 in order to match the demand from the market, and I think this has an impact on the billable utilization in the... here in EMEA [ph], because these new consultants are not productive from day one onwards, leading to this picture. If you look to the gross margin for product and services as a whole, we see an increase here and this is balanced out by the Business ByDesign and investment as you can recalculate this. This is true that even if you see a reduction on both sides, you see as a whole an increase because the product-related margin has a much higher impact here. If you look to the cost from an R&D sales marketing and G&A perspective, then first of all, you will see that we stay flat with regard to R&D expenses to total revenue here being 14.2%. We have to mention that this is impacted by 30 basis points from the accelerated investment in Business ByDesign. So we actually see on an apples-to-apples comparison excluding these investments, a reduction of R&D expenses through total sales by 30 basis points. This goes into the right direction. If you look to sales and marketing, I think also Business ByDesign, the investment into this new product and business model, accounted for 40 basis points here and the remaining part of the increase is related to additional hirings in the sales and marketing arena, roughly 1,260 additions on a worldwide basis. Nearly 100% related to sales, not on the marketing side, and if you look to the split, 50% of this relates to the Americas and the remaining 50% of the additions relates to Asia Pacific and Europe, both 50-50, so in both region roughly 300 additions. G&A stay flat, although I strongly believe that we have here potential for further improvement, so in 2007 flat compared to 2006 with a clear ambition to decreases going forward. If you look to the investment now by Business ByDesign, you'll see that we have invested $125 million in 2007. This is completely inline with our own expectations and in 2008, what we intent to do is to invest in additional 175 million to 225 million into this new product and business model. If you know it goes up together, you come into a range of 300 million to 350 million, if you add those numbers that's...or we might see a spillover of spending into the first quarter of 2009. Remember, beginning of last year, we said we would do this investments over eight quarters. We didn't start right since the beginning of the first quarter of 2008. So if you look to it from an eight quarter perspective, it can be that we will have, as I said before a bit of investments also in the first quarter of 2009. But I want to make one thing clear right now here, we will never exceed this 400 million, we gave as a sealing for these investments. Balance sheet; you see normal structure, no big changes. The total assets increased by 9% and I would like to go into detail with regard to two or three items here. The first one is our equity ratio still very strong with 63%. We achieved a further two days reduction in our DSO, which also led to an operating cash flow of nearly 2 billion here as I mentioned before, that's an increase we anticipated for 2007 and you'll see the capital expenditure here was roughly 400 million. If you look through the development of the Group liquidity, you'll see that we had a Group liquidity by the end of last year. So it's 2006 now of 3.3 billion we went down to 2.8 billion, and you see the bridging here. First of all, we start of course with the operational cash flow being roughly 2 billion, then capital expenditure 400 million, then acquisitions 670 million. This accounts for seven acquisitions we conducted and concluded in 2007, excluding of course business objects, that's a 2008 event and this includes AutoSoft, this includes Wicom and also includes SAP Arabia where we terminated an exclusive partnership and are now in a position to do the business on our own. We are the first company... software company in Saudi Arabia which is allowed to sell through an owned legal entity software in this market and I think this will help us to get more out of this market and I think Leo will come back to this in his presentation. And the dividend is 565 million and finally the repurchase of stock share buyback and I have a summary here for you. In the fourth quarter, we bought back 6.9 million shares worth of roughly 250 million, as we indicated beginning of the fourth quarter. We spent now in total 1 billion and we have 48 million in treasury stock, and this accounts for roughly 3.9% of our outstanding shares. We will continue with share buyback activities right now. We said in our press release that we would at least invest 500 million through 2008 for share buyback activities. We have in 2007, cancelled shares, the 23 million shares if you remember and that's something we will reconsider when we have bought back more shares. These 48 million shares we have in the treasury stock now roughly matches the number of outstanding options and if you exceed this, then we will cancel again shares. But that's something we will discuss when we get the approval of our Board. In the headcount situation, I think we added 4600 a bit more than 4600 people to our base on an FTE basis. Thereof roughly 500 are coming from acquisitions. So actually we are a bit higher than we guided for. If you remember. we started with 3500 at the beginning of the year, then in October we said we would achieve roughly 4000 employees if you exclude acquisitions and now we are at 4100 if you exclude these acquisitions. And here you'll see the allocation and from a regional perspective, it is quite balanced with a strong focus on Asia Pacific, which is our growth region number one if you look to the growth percentages and here of course, also related to low cost locations, India and China and you see also here's the indication for R&D and support what we hired in offshore locations. Finally, let me come to the outlook. We expect for 2008, non-GAAP software and software-related service revenue to increase by 24% to 27% at constant currency and non-GAAP refers to the exclusion of a non-recurring deferred to support revenue write down from the acquisition of Business Objects. I think this is normal procedure if you look into our industry and if you then strip out the SAP business excluding the contribution of Business Objects, we expect to contribute 12 to 14 percentage points to the growth of 24% to 27% at constant currency. If you look to the margin side of the house, we also guide here on a non-GAAP basis, the non-GAAP operating margin at constant currency and this includes number one, the non-recurring deferred support revenue write-down from the Business Objects acquisition and excludes acquisition-related charges. And we expect this to be in a range... the non-GAAP operating margin at constant currency in a range of 27.5% to 28% and the comparable number for 2007 is 27.3% as I explained before. This operating margin includes the impact coming from the accelerated investments in our Business ByDesign model and it is a range for 2008, between 175 million and 225 million in 2008. The projection also includes an effective tax rate for 2008 in a range of 31% to 31.5% and this is based on U.S. GAAP income from continuing operations for 2008. And if you compare the guidance format here, the guidance format between 2007 and 2008, let me summarize the differences. First of all, we look for non-GAAP measures on the software and software-related service side as a difference to 2007. If you look to the top line and if you look to the operating margin you see number one, it is based on constant currency; number two, it is also a non-GAAP operating margin which excludes, number one the non-referring deferred to support revenue write down and number two, the acquisition-related charges. That's all for my side and I want to hand it over to Leo. Léo Apotheker - Deputy Chief Executive Officer and President, Global Customer Solutions & Operations: Yes, thank you very much Werner. Good afternoon. Let me start by taking you through our strong and profitable growth in our established business. In 2007, we delivered outstanding results as you can see with our established business and it remains the foundation for our profitable growth going forward as well. Software and software-related services revenues were 17% at constant currency for Q4 in 2008 and software revenues pure license, due 18% at constant currency for Q4 and also for the full year. We delivered a 16 consecutive quarters of double-digit growth, which I think is an outstanding performance in this industry and it's organic and even more important is the fact that 2007 marked the fastest growth we have achieved since the boom year of the year 2000. We have, therefore, achieved the highest share we ever had in terms of market share. We now stand at 28.4%, it's the highest that we have achieved. Our lead... next biggest competitor is bigger than ever, we have a 12 percentage point lead over them. We are the market leader in every region, I would like to insist on that in almost every industry. We continue to see a very strong competitor win rate against our competitor. We run at about an 80% run rate and just to illustrate it more specifically, we announced at the end of Q3 a 100-day program that has an objective to 100 Hyperion replacements in the SAP customer base. We overshot their targets that we achieved 111 replacements. We see a very good mix of new customer wins, compared to the base established business and the installed base. We have 21% of our business coming from new customers, based on order value and 31% based on number of contracts, which is a very good measure if you take into account the small order value that you get from SME. Besides of the above, we also led the foundation in 2007 for additional future profitable growth opportunities essentially, of course, the launch of SAP Business ByDesign and all of the work that went into the acquisition of Business Objects. In order to give you some color on the various regions, let me start with the Americas, where our product revenue to use the term that showed... in the Americas more than doubled in the last few years and in 2007 we saw yet again double solid digit growth with 17% and 16% respectively quarter and the full year. We have a very healthy mix in the U.S and in the Americas between a robust large enterprise business and the growing volume business, a growing mid-sized business, and in the U.S specifically we continued our solid double-digit growth bars [ph] with plus 16% in the highly contested highly competitive markets, where we continue to win based on a very simple saying, we provide more value to our customers. In the U.S we have now delivered a 21 consecutive quarters of double-digit growth, a thing that is unheard of performance in this industry. But I am also very happy to share with you that we had a very strong growth in Latin America in particular driven by double-digit growth in Mexico and in Brazil. Some selective customer wins so that... just to put some color on this, the U.S Navy that's a fourth quarter large win, Sara Lee as well, Tyco, Magna Services, Petrobras in Brazil, GCC Cemento in Mexico, COMGAS and CTAP in Latin America just to name a few. In EMEA, our whole market so to speak, we continued to grow very solidly in double digits, we had a strong performance across the entire region with 14% growth in the quarter and in the full year. We have continued very strong demand from the installed base, but we also gained significantly... in significant terms new customers that's very important as we want to expand our footprint in Europe as well. We had outstanding performance in Russia, in France and in Nordic, and just for your information Russia is now a fourth largest country in terms of software. It's quite important to remember when we talk about global economy and things like that. We had a great performance here in Germany, where we grew by 7%, which was at the higher end of our own expectations. And as Werner has already mentioned, we have now our own operations in the Gulf, particularly is Saudi Arabia and we have great opportunities there. We already started with some good traction, we have some new key customer wins there. One is Saudi Arabia Airlines and the other one is a partnership with the Egyptian Government, which was translated into a license agreement with Egypt Post. Some selected customer wins; in Russia we have Informgazinvest, RUSAL; we have in France Veolia, Printemps, La Poste; and in the Nordics, Lego, Nokia and Ericsson. In Asia Pacific, we had a very, very strong quarter. We grew by 32% in the quarter, it was extraordinary good performance which differ results in a full year of 24% growth. We were able to continue the transformation we started in 2006 in Japan, and Japan delivered a very good year, it resulted in a strong 21% growth number, that's driven by our value approach in this market as well. You remember we talked about the turnaround in that transformation for Japan for quite some quarters. You can now see it from solid trends, and very important of course to mention China and India shine with high double-digit growth rates. In India and in China, we are the strategic platform of choice of large and midsized companies and the ecosystem is helping us to drive the business in these countries. Both of these countries came in with a very high double-digit growth. India by the way is our fastest growing market worldwide. Some selected customer wins in these markets, China Tobacco, China National Chemical, Aluminum Corporation of China, Sharp, Yamaha, Toyota Tsusho, Tata Motors and United India Insurance. May be a little bit of color now on BRIC, we don't report BRIC as such. I already spoke about Brazil... about Russia, India and China maybe a few words about Brazil as well. Fast growing market. One of the industries that we really drive very well in Brazil that helps to support our growth happens to be banking, and as you can see not every bank necessarily in the world has such a large exposure to subprime. We are also the market leader in 20 out of 24 industries. We have a very balanced and a very healthy growth in these industries, including our focused ones. It is in fact our industry focus that helps us to drive our established business forward, and the ones that move the fastest, the industries that moved the fastest in 2007 were oil and gas, consumer goods and utilities. Perhaps, as you know, we are also putting lots of emphasis on focus industries like retail banking and public sector, and I'll give you some information on those as well. We are by now the global market leader in 20 out of the 24 industries we compete in, and we want to actually widen that footprint. The reason why we are successful is pretty simple. We have deep industry expertise. We provide deep mission critical industry functionality. We have very strong customer relationships which are based on the fact that not only our products but our entire go-to-market organization brings with it, a lot of industry competence. If we look at the focus industries, over the years we've talked many times about the fact that we wanted to expand in banking. We have achieved that. We actually grew significantly in banking in 2007, high double-digits and we have one... a number of very important, very strategic banks; Lloyds TSB for example and Nationwide in U.K. Muenchener Hypothekenbank, here in Germany; Standardbank in South Africa just to name a few. Equally important than this direct wins, we have established strategic partnerships. There's four very important banking partners; Mysis, Sungard, Callatay & Wouters and CSC, to whom we provide our banking platform so they can add their own software on these platforms and provide that to their customers. It is important for two reasons A) it expands our go-to-market and our footprint in banks, and two, back to Hennings point early on, it is another way to actually monetize our platform, because that is an indirect fashion on how we get more users to our platform in the banking industry. Public sector continued to grow double-digit as well, and some very important customer wins, the U.S. Navy I have mentioned early on, Egypt Post as well. The Ministry of Finance in Singapore, and The Ministry of Finance & Economy in Greece. But we are also very proud of the fact that U.S. Postal went live with our HR System, it's a landmark events. We actually went live with 700,000 employees on that system which is quite a performance. Last but not least, retail. You know that we have been focusing on the retail for now quite some time. And we have achieved yet again a double-digit growth in 2007. It is now the third in a row. In fact we have doubled our retail revenues even more than doubled over the last few years. We are now the clear market leader in this industry. And some key customer wins here; just to name a few, Wal-Mart it's a small U.S. retailer, Marks & Spencer, a well known English brand, Edeka, Best Buy in the U.S., X5 it is the largest Russian retailer, Woolworth in Australia, Printemps in France and of course Metro as well. If we look at the segments, large enterprises had another very good year. We did really well. And we did really well not only in absolute booking and getting the license revenues in, we actually closed 11 global enterprise agreements at the end of 2007, which shows that we have a real edge in establishing strategic relationships with key customers. In Q4, we closed an additional 3, I can mention two of these 3 names; it's Lockheed Martin in the U.S. and Nestle, which means that in the 2007 we achieved six GEAs and that's a number we wanted to achieve, so we are exactly in line with our own expectations. We maintain a balanced older entry structure. If I look at the percentage of deals above €5 million, we achieved 24%. Last year equivalent number was 21% while the number of deals below €1 million stayed stable at 41%. It shows that we have a good balance and if I look at what's happening in SME, we are the clear market leader in this business. Our market share is 36%, which is a tremendous achievement. SME is about 30% of order entry on a rolling full quarter basis in 2007. We added 7,400 new customers in the SME space, 6,500 came from the channel. Business All-in-One is now running at about 1,1350 customers, that's 18% more than last year and Business One 17,780 customers to be very precise that's 37% growth. The indirect channel is picking up very nicely. We saw a revenue growth of 31% and Henning already mentioned this SAP Business ByDesign. We now have slightly more than 150 customer engagements and we have recruited slightly more than 50 partners through this business. Now there is an ongoing debate that we have usually when we talk to you, about the whole issue of migration and how do we monetize our established basis. And it is very important maybe to talk about this for a minute or two. If you look at the slide, you will realize that today less than 10% of our order entry is generated in this fewer migration. So you wonder why do we bother, I'd explain to you, later why there is such a great monetization opportunity, every time we actually migrate a customer. In fact, I would even go as far as to say that migration isn't to a fair degree the foundation of the profitable growth of the installed base, because once we have migrated a customer, the risk comes from offsetting and cross-setting in the expanded usage of the SAP software in that customer and that's what the really sustainable and profitable growth is coming from. It's actually probably one of our biggest asset is the large install base that we have and the capability that we have to selling to that base more and more software. And if you look at this rather simplified slide and I'll just walk you through it very quickly, I'm sure you will understand. If a customer started out in line with SAP with R3 product which was a key product, migrates to SAP ERP. The first thing that happens is ERP and Henning already mentioned that early on, is service enabled. Usually you get more users for an ERP system, if it's the modern service one than the old R3. Typically, the next step is that customers actually expand more functionality, either they migrate from the ERP, only use it through the whole business suite, that's pro-definition more business for us. We drive this by selling additional or specific industry solutions service, either an add-on or just a pull, but it's in any case more revenue. Given the fact that we should pursuit an ERP with NetWeaver, we can then start to expand the usage of NetWeaver outside of this pure SAP space, beginning to integrate non-SAP applications with SAP or be it the usage of actual NetWeaver technology components in this whole environment, example, the portal that is revenue again. We can then take it a level higher as we also ship with the business suite and ERP in order to integrate the services, the enterprise service depository and now that we have created the composition capabilities of NetWeaver. We can now help customers to actually start to compose their own applications. You can start at a place homemade, self made, self developed applications as well, by the way that is more revenue. And last but not least, of course, the Business User Solutions that could set on this entire platform. So as you see there is simply, what happens by simply migrating a customer from our suite to ERP, we open up numerous additional revenue opportunities. You could might even say, there would be where's where to gives us the migration away for free, but we don't like doing this. What are the growth opportunities beyond the established business? As it has already been address by both Henning and by Werner, of course by design, clearly 2008 is the year we are going to transform our Business ByDesign approach into a volume capability, we want to create a real volume processes. We are going to rollout into additional countries. Right now we are in Germany, UK, France, U.S., and China. We are going to try to go into 15 additional ones in 2008. We are continuing to a build a partner network. We are trying to attract resellers and we are trying to attract the usages of already existing partners, complementary content providers. And Business Objects of course, I have little to add what has already been said, it's clear that the combination creates huge opportunities for us offsetting and cross selling into the mutual customer base, of course. But I would also like to stress the large SME opportunity that we have here, Business Objects has a great reseller structure we have one too and by the way one of the things, we have done, now we announced nine packages that those companies will bring to market. Three of these nines are dedicated to the respective channels. What are we going to do in 2008? To wrap up, well we are well positioned for profitable growth in 2008 again. We will of course continue to drive to growth in the established business. We will benefit from the continued adoption of our branded... of our ERP 6.0 products for the reasons I just explained early on. Also of course, NetWeaver. CRM 2007 is a fantastic opportunity, it will attract lots of demand, which will help to drive the machine as well. So we are very, very optimistic about that and yes we will continue to expand the large enterprise business. I know that people believe that there's nothing to been gained anymore in large enterprise, it is completely wrong. We can do opt and cross selling in that installed base. We can do lots of competitive appraisements. We have done 800 by now and there are new names to be won in strategic industries as well, we will go aggressively after those and we can gain them in the established markets and in the emerging markets such as the BRIC countries. SME is a huge greenfield opportunity. We are the market leader, that is true but there's still so much to be gained there and we want to do this in an effective, professional and profitable ways by pushing the volume business there. And last but certainly not least, we will focus of course into achieving a successful and profitable leveraging of the acquisition of Business Objects. Thank you very much. Stefan Gruber - Head of Investor Relations: Thank you, Leo. We now have time for Q&A again. As a reminder for those on the Internet, on the phone please do send us questions by email to investor@sap.com. We make sure we take a lot of questions from the web. It's almost a standard tradition here for the Frankfurt kind of event that we give the first question to our Frankfurt-based participants and lastly before they ensure you have a question, so I would like to ask Johanna [ph], please to open up the discussion. Question And Answer

Good afternoon. Let's start with more general question, because I think there is a strongest concern of some market regarding SAP's concern about economy. You have given us a rather detailed guidance, but we would like to hear a little bit what are the assumptions of SAP regarding the economy and impact of your business? I saw on Reuters that you have said, that you have not seen that your customer intend to cut in anyway their budgets, but may be you can give us more of a general view also what you are based on your guidance? Werner Brandt - Chief Financial Officer: Its two answers to this. First, you've heard indirectly from all of us that is the demand is there, at least at the moment we are living in time today in all regions, some effort such in particularly Asia's is pretty I can say bullish. If you look to the category where we are working, IT is not IT, we are not an IT services, our service business is pretty small. We are not in the IT consumer space. So what we are delivering is fundamental for successful companies to weather as a storm as they are in good as well as in better days, and to this capability to deliver beneficial solutions in bad days has increased since the last three to four years. One of the issues... not issues but what, one of the challenges we had in 2002 and 2003 was the customers saying, we like the product but they are not flexible enough if something happens in the market to shift strategy completely. And this was more or less the reason why we invested from 2003 until more or less to-date 2007 to completely change the architecture. You have seen this now for more vertical applications side-by-side to a more reasoned layout structure where we have this platform, which tends for integrity, stability, volume, efficiency as there is a machine running, and the layer on top which stands for flexibility, innovation, et cetera. And if you remember, three years ago we always said, okay, what we will achieve is that somebody as a CEO ever can shift this strategy more or less on flight. I think we are ready on time, because our product portfolio is on such a business process platform, composition in Miament [ph] is out. But for my side most important, our customers are following us. So what does this help you, if you are sitting there with a best possible, let's say next-generation applications but customers still sit on the old stuff. And in our case, and I think this is a big achievement, people are not valuing enough we have moved to our installed base significantly if you look to the figures. Therefore we are pretty confident in this environment. Stefan Gruber - Head of Investor Relations: Thank you. In the meantime we got a lot of questions already from the web. I would like to take two of them. The first one it's more a product-related question coming from Charlie Di Bona of Sanford Bernstein, referring to the new business model. I assume he means SAP Business ByDesign. One of our new businesses, you indicated the new business model was a work-in-progress. Can you give us an update, especially regarding the partner strategy and how you incentivize them? And as a second question, I would like to take the question we got from Michael Briest [UBS]. It's a question to Werner, can you please elaborate a bit on cost synergies. I believe by line item, I don't know whether we want to go that far. And you expect restructuring charges? And similarly a question to Leo. Can you please elaborate on the Business Objects and SAP sales force alignment and how do you incentivize cross-selling? Maybe Henning, I think you... before you take the first question on the business model, the question from Charlie Di Bona. Henning Kagermann - Chief Executive Officer: Okay, the second part is partner, Leo should do. Yes, it's indeed work-in-progress. Charlie as we indicated first step in the new business model is the new product. Our product company and we are building new business models on new products. That's key because we have these new business model in mind when we designed the new product, it's by the way one of the reasons why it's called ByDesign. And the new business model was that we are not splitting between the product supplier SAP and the service players that are implementing it, but we believe we can only bring TCO significantly down if we start looking to the entire lifecycle from how to discover the opportunity, how to do presales which is more in a trail system out here, how to do implementation which is done more or less in a hosted mode. So we are doing the work that might be on site and later on we do the operation. So therefore we have it in our hand to bring TCO down to 10% as we promised. That cannot be done overnight I think that's a big, big task, but if we achieve it I think it's a competitive differentiator. So that will be gone out of the second phase and we ramp up the machine, because we know the product is ready for this business model Léo Apotheker - Deputy Chief Executive Officer and President, Global Customer Solutions & Operations: Yes, [inaudible] great midway to give you the answer Charlie on the second part is this is a machine and because it is a machine, we need all of the moving parts of the machine to really come together. So you can't really isolate partners from the infrastructure, from the core centers, from the telesales, from the web environment, et cetera, et cetera although the partners can't redo their job either. But specifically talking about partners, our strategy has not changed. We have a mixed model. Customers can access and can engage with Business ByDesign via the web, via the phone, via any modern telecommunication device to us, they can come to us via partners, they can come to us via resellers and in fact, they can come to us via our direct sales force as well. So that's moving along well. What we are trying to do is we are trying to respect the economic model of our partners and not get them to engage too early into the ByDesign investment phase, because there is one. So we ramped them up, as we ramp up to rest of the machine, that's why these things take some time and that is going well and we have good feedback from the partners. And just to continue on the question regarding business objects and SAP, on the sales side we spend elaborate time between the two companies to align our sales models, we actually went almost account by account, have re-planned those, have reallocated the sales forces. You know that for a Business Object will be run as a independent unit inside SAP, was that on the sales force but what we have done is we have created a mapping of the accounts, engagement in models per account have been defined. There are some SAP programs now joined the key organization for bringing some of our sales methodology there as well, and of course we launched on day one, nine common products at the two sales organizations. We will sell in parallel as well. So actually we feel very confident that we are hitting the ground running. Werner Brandt - Chief Financial Officer: Michael and Mark, you had questions related to cost structure, cost synergies and the hiring in 2008. Before answering this questions let me spend a minute on explaining what we exclude as acquisition-related charges. I think its important that you understand that we have a very clear definition what we exclude and everything else will not be excluded. And the acquisition-related charges will include the amortization of intangibles and this is a true component acquired in the business combination and acquired in the standalone acquisitions of intellectual property, that's what we always do. We have acquisitions where we simply buy intellectual property as SAP, we did it in the past and might do it in the future, number one. Number two, we exclude expenses from purchase in process, research and development. So in-process R&D is a second component which will be excluded from the operating income, operating expense base and finally its restructuring expenses and these restructuring expenses have to meet the following conditions. Number one, incurred in connection with the business combination that's very important and secondly, it must qualify under SFAS 146, before we can include it and consider it in our non-GAAP measures. Having said that, coming back to the cost structure, if you look to our cost structure, I think the flexibility we have is at least 10% of our overall operating expenses, that's the first part. The second part is regarding the cost synergies. I think if you look to the combined organization, then we have clearly identified synergies on the third party front, especially if we put together our purchasing power as a combined organization that we have been able to reduce the overall purchasing expenses by better leveraging the third party expenses. On the personnel side that's the second area, personnel side because we of course, we look into the combined organization and see whether we can leverage what we have rather than using what we have in the budget as additional hiring for 2008 and that will be of course also on the infrastructure side aligned with what we do on the IT on the facility side. If we looked to the hiring for 2008 based on what I said before, we anticipate that we will add roughly 4000 people to the overall base, we had in 2010. Stefan Gruber - Head of Investor Relations: Okay, thank you. I think we take another question here in the room in Frankfurt. Mr. Klansman [ph].

Coming back to the guidance for 2008. I mean, I'm kind of like trying to find out like the 12% to 14% you are guiding is exactly the same number you had for 2007. I guess you may be expecting the same year as in '07 like. Did you go through your model, or your math checks, where do you think you will see the most change of that. I mean will we see more business coming from the existing customer base or will it be more new customer base, where we see more SME business, I mean pretty much ever since you show us the shot [ph], how much SME is, it's around about 30% or no clear acceleration here would be more subscription, I mean where do you think we are going to see more growth in 08 and where will we see less growth in 08? And then the second question would be on Business Objects. When if I look at your target of 24 to 27 including Business Objects, if I do the math right that means that you expect for Business Objects spend a low on growth between 5% and 15%, which to me seems quite aggressive, considering that there will be some integration problems and probably not everybody's happy in the organization and so. Maybe I did something wrong or maybe you can give us an idea of where you see or what do you expect some Business Objects in 08. Léo Apotheker - Deputy Chief Executive Officer and President, Global Customer Solutions & Operations: So why don't I try to give you first an answer on the growth expectations for 2008. The honest answer is probably all of the above, so we expect good continuous business from our established installed base which is what I have tried to indicate to you earlier on by showing you or of the off sell and cross sell capabilities that set in our installed base. From a regional perspective, as it is pretty obvious that Asia-Pacific, Japan will be the fastest growing region, but if you want the BRIC countries will put their weight in as well, no question about it. But in fact we do expect that all regions will accommodate that double-digits also the Americas, also the U.S. for that matter. SME will continue to outgrow the reason why it stays at 30% by the way is purely the role of large numbers. You need to serve lots of SME to compensate for one very large transaction in the large enterprise base, but from a volume perspective we will see lots of growth coming from SME and from an industrial perspective, we will continue to drive most established industries of course. But we will continue to push hard on the focused industries because that's also good business and that you will see coming through SAP. Henning Kagermann - Chief Executive Officer: Mike if I can answer the second one, there are definitely some assumptions in it the range is a little bit broader than your math, we can might be find out if we have the same. So it's a lower range, we in the worst case expect it not plus 5 but I think a little bit minus. So, therefore, the range is broader and is more realistic than you saw. So we still weigh all options of more or less flat up to a significant growth. The question is there is a little bit difficultly in this case how you value it, we will definitely split in a way that we acquire products from Business Objects that's more or less what we later all will say is a business coming as for Business Objects because that's the acquired business, you want to know what is organic and what's acquired. Please set in mind that the Business Objects entity has also some SAP products, so as synergy from combining the product and what is very difficult to look for multi is the synergy that's coming from Leo's operation. That means if an experienced sales force like that for Leo is pushing Business Objects products to the install base. That's a little bit difficult so that for at the of the day the assumption was what can we do with business product if it was product acquired from Business Objects, let's see. Stefan Gruber - Head of Investor Relations: Thank you, Jim. I have another question here [Inaudible.].

Thanks, I am going to Werner first, may be two points; one, when you talk about Business ByDesign we talked about 150 customer engagements and the 3000 registrations. Can you give us an idea what's your plan is for 2008, with regards to 3000 turn to engagements and potentially even put a number in that? And coming back to non-cash charges mostly I guess non-cash with Business Objects you gave. Earlier on 190 million for deferred revenue write downs and in process R&D as one-off indication and you gave I think it was 210 to 230 in terms of recurring plus then as a third number you've talked about synergies in the range I think it was a minimum expectation 300 to 320. I am not quite sure if all those numbers referred to 2008 and just of clarify could you give an update on those three items? Thanks. Werner Brandt - Chief Financial Officer: Let me answer the first one it's pretty simple. We have only given these numbers not to give you a feeling about how many we want to convert but that you are seeing that we have started already, there was the volume processes that's the value beginning. I could have said 300 and then you will have said it's not volume at the beginning. That was the only indication. I think its fair now not to speculate about the figures you are asking for. I think we have huge spreadsheets where we have all of these machine written down and we will monitor this is in a future day carefully. But I guess honestly that we will learn during 2008 what the exact figures are and then we will start to communicate once the machine is running. We should not talk about those things once you build the machine, if you do it if it's running and we will do them. Regarding this acquisition-related charges, I think I explained in connection with the guidance, it's a write down of maintenance with demand to roughly approximately 180 million and I hope you understand, we have not completed the purchase plus accounting. So, I only kind of infer with regard to the amortization of intangibles and the write down expenses from purchased in-process R&D that this will be in the range of roughly 210 plus 30 million for Business Objects, according to the business case, we have set up. The actual numbers will then be provided during our Q1 call, where we will show you how the PPA at the end of the day will result in acquisition related charges. Now that's not yet completed, but I do not think that the numbers will differ materially from the one we provided to you. And I think if you look to the side of SAP where we had 60 million in 2007 and I think a comparable number for 2008 would be roughly 80 million acquisition-related charges for SAP on a standalone basis. So you can calculate this in together for your model. I think I answered the question with regard to the synergies already. I think what we indicated when we announced the acquisition was the number on an annualized basis and we have embedded all the synergies. We think we can realize in 2008 into our guidance and I think I do not need to go into further details. Stefan Gruber - Head of Investor Relations: Thank you. I think we can take two questions from the web. One is from James Dawson, Morgan Stanley, referring to your mid-term outlook. Can we expect the business user segment to outperform the growth rate of the established business already in 2008? Probably not. Henning Kagermann - Chief Executive Officer: No, we have just discussed. If everything goes perfect for business user and not so good for the establishment what that might be, I don't hope so, because I would prefer more that will come to the higher end of the established. That one, then it will be tough. Stefan Gruber - Head of Investor Relations: And may be them the clarification question, really got this from several analyst Adam Broach [ph], Ross MacMillan, Neil Steer, referring to the constant currency operating margin guidance. I think it will be helpful if we could provide the average U.S dollar exchange rate that corresponds to this constant currency margin guidance and I am not sure, whether we can give that, but they asked for whether we can indicate what the margin guidance would have been if today's foreign exchange rates prevailed throughout the year? Werner Brandt - Chief Financial Officer: I think let me explain how this works. If the exchange rates we use to calculate a constant currency growth rate, will it be balanced we had in 2003 fixed average by quarter, so the average exchange rate by currency in the first quarter is then used to calculate the trends or to translate the revenue on cost in the local financial statements in local currency into Euro. So that the only rates which are secure now, because we know these rates and I don't have all of them in my mind now for the first quarter 2006, second, third and fourth quarter. And when I agreed to this, Stefan that he will put this on our web page so that you have exactly the exchange rates and the use... the average exchange rates we used in the fourth quarter of 2006, so that you can calculate the translation effects out of this. Stefan Gruber - Head of Investor Relations: I think you referred to 2007. Werner Brandt - Chief Financial Officer: Yes sorry, 2007. Stefan Gruber - Head of Investor Relations: Okay, we have more time for questions here in the room. I see one Elizabeth Barkley and then Jim Estefan [ph].

Yes. Hi, good afternoon. Just to clarify once again on the synergies. Do you expect revenue synergies in 2008 given the risk of revenue attrition to be above 2009 SAP platforms? That's my first question. And then the second question comes on, it looks like the growth rate actually came down a bit in the second half relative to the 50% growth we saw in the first half of '07. Could you just talk a bit about what you are seeing there and how is the demand trends? And also how you see the consolidation that we are seeing among your peers affect your growth potential in 2008 and any acquisition plans that you many have in the worse days? Thanks. Henning Kagermann - Chief Executive Officer: May be we can split between us and Leo might be commenting on our competition. I will say something to acquisition and to the other topic. Look there are good reasons that we have given the guidance in the way we gave it. We can give hundreds of details, but later on we have to fulfill hundreds of components of the guidance. I think we give enough and there is room for a lot of speculation what is better and less, but I think the guidance is good and ambitious guidance and keep it like that. From an acquisition point of view, we have a lot of on our plate. I think we are determined to make business objects acquisition a success so that's our number one priority, in 2008. We will continue with organic growth, who don't believe that we will faint in our strategy but, there is always a but, as you have seen with business object. They are sometimes opportunities, unique opportunities, we are not going for everything but in this case we could become the instant market leader immediately. In a segment where we have not so much overlap, 10% overlap of products. If such an opportunity is there again we would consider it. But don't expect me here to speculate about those opportunities. Okay Leo. Léo Apotheker - Deputy Chief Executive Officer and President, Global Customer Solutions & Operations: Yes and the competitors situation in the market, hasn't really changed as much. We are competing on a daily basis with the same competitors, nothing really new has happened there on the contrary it was a consolidation driven by one after two. It becomes soon as circumstance even simpler. You know in large I can assume you are going to compete. Interestingly enough, I think our competitor is focusing a lot or what is left at the installed base. I can easily understand that after we have managed to convince about 800 of their customers to move to SAP. I would also try to first of all protect my installed base and not compete so much on the other stuff. And even though it is clear that a vast majority of the UGS that are happening are all competitors, we have a very high win rate. We win about 80% of the deals and that's a positive thing. We will continue to fine-tune our competitor skills first from a product point of view and then from a go-to-market point of view to make sure that we can stay competitive. And on the SME side its basically the same story we compete against two global players and a host of local players and that's going as you can see reasonably well, as well. But of course, you should never say that you have won this kind of a situation, you always wanted to be better yesterday... tomorrow than yesterday. And NetWeaver is actually going very strongly and having indicated the number of installations that are up and running we are handling about a thousand a month that's a huge number. We compete against other providers of this kind of an environment. We have our particular strengths and I do not expect, actually no one expects that a given customer will always have only one platform, why should they. And therefore this market has a lot of potential in it and we'll continue to compete very successfully. Stefan Gruber - Head of Investor Relations: I think the next question from Jim Estefan [ph].

Thank you. Are you presently satisfied with last year's performance of Business Objects, I mean in respect to EBIT margin. And in respect to your guidance for 2008 how much of the total EBIT margins can be contributed by Business Objects, I mean what type of EBIT margins you have recommended for Business Objects. That's the first question. Second question can you explain the Nestle deal. If I remember correctly, Nestle already bought in the past all the latest and the upcoming product and I am not quite sure whether this was in Euro or Denmark it was 120 million, so why should Nestle now buy again? Léo Apotheker - Deputy Chief Executive Officer and President, Global Customer Solutions & Operations: So let me answer the second question first. Because that is actually perfect illustration of our model. So and you are absolutely right, yes they did buy everything SAP has to offer in the year 2000. It went so well that you actually reached the limit of that contracts sooner than expected. So not only will they renew that relationship they want us to expand it. There was a expiration date of that contract. We have a new extension of that so that's all new things that we will develop will flow into this contract as well and the footprint has been widened, so that you have more engines, more uses and it's a classical illustration of the type of business model I have tried to illustrate early on. Once you end and then start to replace you just keep on widening the relationship. Henning Kagermann - Chief Executive Officer: If I'd comment, in addition, you see how important it is that we have declared some years ago we want to have 50% of our revenue from new products. If you control such a flow of innovation I don't think it would be and it's tougher Leo to sign such a deal right? Léo Apotheker - Deputy Chief Executive Officer and President, Global Customer Solutions & Operations: Of course. Henning Kagermann - Chief Executive Officer: Okay. So a little bit explanation, why we do what we are doing. Werner Brandt - Chief Financial Officer: And with regard to margin, I suppose the results of Business Objects which were published yesterday showed very strong top line growth total revenue of 20% on the product side is 18%, if you look to the margin on a adjusted non-GAAP basis its 17% this of course lower than SAP's margin but I think that's one of the advantage we have now as a combined organization to readily look for these cost synergies, implement them and then accreting them, the margin of this business unit is that's exactly what we intend to do.

Just the recommended margin for Business Objects in the current year? Stefan Gruber - Head of Investor Relations: I think this is something what we -- Werner Brandt - Chief Financial Officer: Do you mean the underlying margins?

Yes. Werner Brandt - Chief Financial Officer: No that's not what we want to disclose. I think we have one margin for the entire company it's the same as on the top line. Hope you understand if we put everything together all of the different parts of our business, the established business, Business ByDesign and then Business Objects, Business User Organization and then come up this one guidance from a top line perspective and from a margin perspective. Stefan Gruber - Head of Investor Relations: So I am looking to my watch, we have been discussing for almost 90 minutes. I think we can take two final questions. I will take the one from Ross MacMillan here on by email. I saw earlier question from Knut Woller. Maybe we start with Ross MacMillan, Jefferies, first. He wants a clarification on the investments on the incremental investments on Business ByDesign and Werner you referred to the potential spillover in 2009. How should we think about maybe additional incremental investments in Business ByDesign beyond 2008 and maybe if just a clarification? Werner Brandt - Chief Financial Officer: So if we disregard potential spillover into 2009 then there will not be any incremental investments in Business ByDesign beyond 2008. Stefan Gruber - Head of Investor Relations: Thank you. And now we have one final question from Knut Woller, UniCredit. Knut Woller - UniCredit: Yes, Knut Woller from UniCredit, thanks. Just regarding your hiring. Looking at your hiring it seems that R&D has peaked because it was down year-over-year. So should we expect R&D spending as a percentage of revenues to come down to the 12% that we have seen. It was 12% to 14% I guess, in which timeframe? And second regarding sales and marketing that was significantly up in '07 and so I'd just want to understand regarding your SSR guidance on 12% to 14% unchanged compared to the start last year. Is that a bit cautious or where do I get the math, if I look at your sales and marketing hiring a significant increased for '08? Thanks. Werner Brandt - Chief Financial Officer: I will answer the R&D question. Yes, we have promised several times R&D will peak more than true, if it would peak in 07 or already in 06. You have seen how its flat in 07 compared to 06 and it will definitely go down in '08. It's too early to give an exact prognosis how fast, that depends on many things in the market, but I think it's clear it will go down in 08 and it will go down further in 09, there is no doubt about that. How much we will see. It depends a little bit of the overall business, and the opportunities in the market. Henning Kagermann - Chief Executive Officer: Yes, and maybe I will try to answer the second question regarding the guidance and the hiring in sales and marketing. We hired in sales and marketing in 2007 in order to make sure that we were not leaving any part of the portfolio uncovered. In particular when you talk about things such as NetWeaver and sort of the technology elements that are in NetWeaver. That investment has paid off, will continue to payoff in 2008 as well. And as you can see by hiring all of these people we also managed to go very significantly in some of these new markets where a lot of the hiring did occur. The average selling price in these markets is slightly different from other countries, so that you have a slightly different margin mix, but that will level out overtime. So, that is the explanation when it comes to the hiring and when I look at the guidance of 12% to 14% in constant currency for the established business that is an ambitious strong guidance, and I am confident that we can deliver that by working very hard with all of the people that we have hired. Stefan Gruber - Head of Investor Relations: Well, thank you very much. And this closes our analyst conference today. Thank you for all your questions and our next event will be the Q1 Earnings Announcement which is scheduled for Wednesday April 30th. This is the first time for us to announce the consolidated results with Business Objects. Thank you for your attention and bye-bye.