SAP Unveils New Enhancements to Solution for Retailers; Expanded Core Merchandising with mySAP...

Business Editors/High-Tech & Retail Writers

Retail Systems 2002 Conference & Exhibition

SAP AG (NYSE:SAP) today announced the introduction of significant new merchandise management and planning functionality for mySAP(TM) Retail. The new capabilities enhance the core

merchandising functionality of mySAP Retail, providing more accurate inventory management, sophisticated allocation, promotion planning, and pricing optimization capabilities. The announcement was made at the Retail Systems 2002(R) Conference & Exhibition in Chicago, Ill., June 24-27.

Developed based on experience with, and input from, SAP's extensive worldwide retail customer base, the enhancements further advance the functionality of mySAP Retail by enabling more effective supply chain management, merchandise and assortment planning, promotion management, mass maintenance, and scalability/throughput. The new mySAP Retail capabilities will be available in the third quarter of 2002.

"SAP has listened to its customers to introduce capabilities that help retailers master the challenges that matter to them most," said Michael Feuer, chairman and chief executive officer of OfficeMax, Inc. "The SAP retail solution has helped us improve the quality of our data and ability to respond in real time to changes throughout our chain."

New merchandise and assortment planning capabilities of mySAP Retail allow a retailer to fully integrate the planning activities within the overall inventory management process. The flexible system allows retailers to tightly integrate style and color planning in addition to using business metrics to measure performance. Merchandise and assortment planning enhancements increase planning flexibility and control by utilizing flexible templates and analytics. Additional merchandise and assortment planning features include links to execution processes, such as purchase order management, allocation, space planning, and promotions. Enhanced pre-pack and allocation features enable fully comprehensive procurement processes.

"Retailers understand the difference that an effective IT strategy can make in improving their operating performance and are embracing solutions that offer robust core merchandise management and planning functionality," said Andrew White, research director, Gartner, Inc. "Vendors who can offer sophisticated inventory management and merchandising capabilities and a comprehensive end-to-end solution are helping retailers realize higher levels of operational efficiencies and return from their IT strategies."

New capabilities for store grouping and new store opening from mySAP Retail decrease the time required to set up data for new stores and improve the manageability of purchasing and logistics data maintained at the store group level. "SAP provides scalable software and can support our current and future growth," said John Atkins, vice president of information technology, Tractor Supply Company, which plans to open more than 100 additional stores as a result of both acquisition and organic new-store growth. "With mySAP Retail, we were confident that our infrastructure could support this business initiative. We were able to do this without any significant changes to our system infrastructure."

Enhanced markdown planning features support price and sales planning for high volumes, enabling better execution of planned price changes and improving compliance with standard retail pricing. Other capabilities include enhanced promotion planning and improved retail analytics.

In addition, mySAP Retail enables more flexible and accurate forecasting using data from store point-of-sale (POS), sales orders, or shipments, as well as any combination of these sources. mySAP Retail is able to maintain the proper relationship between distribution centers and exactly those product/store combinations for which they must approve inventory. The solution features enhanced methodology to maintain a clearer line of communication between stores and distribution centers about product types and quantities requiring replenishment. This functionality optimizes the retail supply chain by enabling forecasting based on cumulated store POS sales, cumulated store orders, or any combination for greater accuracy in distribution center forecasting and reduced inventory levels.

New world-class mass maintenance capabilities from SAP help retailers better organize and improve the quality of core enterprise data, reducing data maintenance times and costs, and help increase the efficiency of purchase order changes and cancellations for improved reaction time to exceptions, better replenishment accuracy, and reduced purchase order maintenance and costs.

"The enhancements to our retail solution represent a major step forward in our strategy, which significantly strengthens SAP's offerings and commitment to the retail industry in markets across the globe," said Peter J. Kirschbauer, senior vice president of Service Industries, SAP AG. "mySAP Retail delivers the comprehensive functionality and robust inventory management capabilities necessary for retailers to master the unique challenges of the industry, optimize the efficiency of their supply chains, and enhance the service they deliver to their customers."

For more information on mySAP Retail, please refer to the mySAP Retail Press Fact Sheet, www.sap.com/usa/sapphire/press/factsheets.

About SAP

SAP is the world's leading provider of e-business software solutions. Through the mySAP.com(R) e-business platform, people in businesses around the globe are improving relationships with customers and partners, streamlining operations, and achieving significant efficiencies throughout their supply chains. Today, more than 18,000 companies in over 120 countries run more than 50,000 installations of SAP(R) software. With subsidiaries in over 50 countries, the company is listed on several exchanges including the Frankfurt stock exchange and NYSE under the symbol "SAP." (Additional information at http://www.sap.com.)

Any statements contained in this document 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 "believe," "estimate," "intend," "may," "will," "expect," and "project" 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 (the "SEC"), including the SAP Annual Report on Form 20-F for 2001 filed with the SEC on March 28, 2002. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

Note to Editors: SAP, the SAP logo, mySAP.com, mySAP, and all other SAP products and services mentioned herein are trademarks or registered trademarks of SAP AG in Germany and several other countries. Other product or service names mentioned herein are the trademarks of their respective owners.

For customers interested in learning more about SAP products:

Global Customer Center: +49 180 534-34-24

United States Only: 800/872-1SAP (800/872-1727)