Double-Digit Growth Continues in a Challenging Market - SAP Driving the Transition to the Cloud and Gaining Market Share SAP Announces Second Quarter and First Half Results 2013

WALLDORF, Germany, July 18, 2013 /PRNewswire/ --

  • Three Years of Double-Digit Growth – Second Quarter 2013 Non-IFRS Software and Software-Related Service Revenue Increased 10% at Constant Currencies (7% at Actual Currencies to €3.35 Billion)
  • Second Quarter 2013 Non-IFRS Software and Cloud Subscription Revenue Increased 7% at Constant Currencies (3% at Actual Currencies to €1.17 Billion)
  • Triple-Digit Year-Over-Year Growth in Cloud Subscription and Support Revenue, Annual Cloud Revenue Run Rate Exceeded €930 Million
  • Expanding Leadership in In-Memory Computing with SAP HANA
  • Second Quarter 2013 Non-IFRS Operating Profit Reached €1.22 Billion, a 10% Increase at Constant Currencies (4% at Actual Currencies)
  • SAP Reaffirms Non-IFRS Operating Profit Outlook and Remains Committed to Be a Double-Digit Growth Company with an Increase of at Least 10% in Non-IFRS Software and Software-Related Service Revenue at Constant Currencies in 2013

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SAP AG (NYSE: SAP) today announced its financial results for the second quarter and first half ended June 30, 2013.

BUSINESS HIGHLIGHTS IN THE SECOND QUARTER 2013

"The industry transformation we predicted back in 2010 is now happening at full speed and our strategy of innovation for growth is paying off," said Bill McDermott and Jim Hagemann Snabe, Co-CEOs of SAP. "We continued our double-digit growth momentum, we are leading the transformation of the industry, and our market opportunity is bigger than ever. We are gaining market share in a challenging macroeconomic environment, and with the HANA Enterprise Cloud, we are resolute to capture the future as the cloud company."

"SAP had a solid overall performance in the second quarter. We remained focused on operating discipline, resulting in double-digit growth in non-IFRS operating profit at constant currencies. We improved the profitability of our core business and see good traction in the cloud on our way towards building a profitable cloud business," said Werner Brandt, CFO of SAP. "We reaffirm our full year 2013 Non-IFRS operating profit outlook and remain committed to double-digit topline growth despite a difficult macroeconomic environment, in particular in Asia Pacific Japan and the rapid transition to the cloud."

Second quarter non-IFRS cloud subscription and support revenue increased 166% (171% at constant currencies) year-over-year to €183 million. SAP's non-IFRS cloud subscription and support revenue in the second quarter outperformed many cloud competitors on a sequential quarterly growth basis. The annual cloud revenue run rate has now reached €932 million[1]. With approximately 30 million cloud users, SAP has the largest subscriber base in the cloud market. Non-IFRS deferred cloud subscription and support revenue[2] was €361 million as of June 30, 2013, a year-over-year increase of 68%. The Ariba business is showing accelerated synergies. For the Ariba segment the trailing twelve month network spend volume[3] was approximately $465 billion, an increase of 27% year-over-year. More than 1.1 million companies are connected through the Ariba network, the world's largest Web-based business trading community.

SAP HANA, the Company's platform for real-time business applications, continues to be a major growth engine with €102 million software revenue contribution, growing 21% year-on-year. The Company continues to expect HANA software revenue of €650 - €700 million in 2013. Customers have already shown strong interest in SAP Business Suite powered by SAP HANA which was made generally available in May and -- together with HANA Enterprise Cloud -- is expected to drive adoption of the HANA platform.

SAP's double-digit growth momentum continued in the second quarter with Non-IFRS software and software-related service revenue increasing 10% at constant currencies (7% at actual currencies to €3.35 billion). Non-IFRS software and cloud subscription revenue in the quarter increased 7% at constant currencies (3% at actual currencies to €1.17 billion). Non-IFRS operating profit reached €1.22 billion in the quarter, a 10% increase at constant currencies (4% at actual currencies), resulting in a 60 basis points expansion of the non-IFRS operating margin at constant currencies despite a negative effect from the Ariba acquisition of 40 basis points. The margin performance demonstrates that the efficiency in SAP's core business has further improved.

Regional Performance

Second Quarter 2013

The Americas region delivered a strong second quarter in non-IFRS software and cloud subscription revenue[4] with 18% growth year-over-year, driven by excellent software revenue performance in Latin America -- in particular Brazil -- and strong cloud subscription and support revenue growth in North America. The EMEA region saw solid growth with non-IFRS software and cloud subscription revenue increasing 3% year-over-year, despite a continued difficult market environment and a tough year-over-year comparison. High single-digit software revenue growth in Germany contributed to this performance. Non-IFRS software and cloud subscription revenue in the Asia Pacific Japan (APJ) region declined 7%, mainly due to continued macroeconomic challenges. However, some markets in APJ, such as Southeast Asia and India, saw strong growth in software revenue.

First Half 2013

The Americas region delivered a strong first half in non-IFRS software and cloud subscription revenue with 29% growth year-over-year, driven by a very strong performance in the United States and Brazil. The EMEA region saw solid growth with non-IFRS software and cloud subscription revenue increasing 8% for the first half of 2013 which is an impressive result in light of continued market uncertainty. Non-IFRS software and cloud subscriptions revenue in the APJ region declined 7% in the first half of 2013.

[1] The annual revenue run rate is the second quarter 2013 cloud division revenue of €233 million multiplied by 4.

[2] Beginning in Q1 2013, SAP discloses non-IFRS deferred cloud subscription and support revenue, which is a subset of the total, non-IFRS deferred revenue number reported on the balance sheet.

[3] Network spend volume is the total value of purchase orders transacted on the Ariba Network in the trailing 12 months.

[4] Non-IFRS software and cloud subscription revenue in the regional paragraphs follow SAP's management view, which is calculated as the combination of software revenue based on location of negotiation and cloud subscription and support revenue based on customer location; growth rates at constant currencies. See SAP's second quarter and half year interim report for details.  

FINANCIAL RESULTS IN DETAIL

FINANCIAL HIGHLIGHTS – Second Quarter 2013

 


Second Quarter 20131)


IFRS



Non-
IFRS2)




€ million, unless otherwise stated

Q2 2013

Q2 2012

%
change

Q2 2013

Q2 2012

%
change

% change
const. curr.









Software

982

1,059

−7

982

1,059

−7

−3

Cloud subscriptions and support

159

52

206

183

69

166

171

Software and cloud subscriptions

1,141

1,110

3

1,165

1,127

3

7

Support

2,177

2,013

8

2,182

2,014

8

11

Software and software-related service revenue

3,318

3,124

6

3,347

3,142

7

10

Total revenue

4,062

3,898

4

4,091

3,916

4

8

Total operating expenses

−3,074

−2,977

3

−2,873

−2,743

5

7

Operating profit

988

921

7

1,219

1,173

4

10

Operating margin (%)

24.3

23.6

0.7pp

29.8

30.0

−0.2pp

0.6pp

Profit after tax

724

661

10

874

831

5


Basic earnings per share (€)

0.61

0.55

11

0.73

0.70

4


Number of employees (FTE)

64,937

60,972

7

N/A

N/A

N/A

N/A

1) All figures are unaudited.

2) For a detailed description of SAP's non-IFRS measures see Explanation of Non-IFRS Measures online. For a breakdown of the individual adjustments see page F8 in the appendix to this press release.

IFRS and non-IFRS software revenue was €982 million (2012: €1.06 billion), a decrease of 7% (3% at constant currencies). IFRS software and cloud subscription revenue was €1.14 billion (2012: €1.11 billion), an increase of 3%. Non-IFRS software and cloud subscription revenue was €1.17 billion (2012: €1.13 billion), an increase of 3% (7% at constant currencies). IFRS software and software-related service revenue was €3.32 billion (2012: €3.12 billion), an increase of 6%. Non-IFRS software and software-related service revenue was €3.35 billion (2012: €3.14 billion), an increase of 7% (10% at constant currencies). IFRS total revenue was €4.06 billion (2012: €3.90 billion), an increase of 4%. Non-IFRS total revenue was €4.09 billion (2012: €3.92 billion), an increase of 4% (8% at constant currencies).

IFRS operating profit was €988 million (2012: €921 million), an increase of 7%. Non-IFRS operating profit was €1.22 billion (2012: €1.17 billion), an increase of 4% (10% at constant currencies). IFRS operating margin was 24.3% (2012: 23.6%), an increase of 0.7 percentage points. Non-IFRS operating margin was 29.8% (2012: 30.0%), a decrease of 0.2 percentage points. Non-IFRS operating margin was 30.6% at constant currencies, an increase of 0.6 percentage points. Non-IFRS operating profit and operating margin for the second quarter 2013 were affected by the acquisition of Ariba, which impacted the operating margin by approximately 40 basis points.

IFRS profit after tax was €724 million (2012: €661 million), an increase of 10%. Non-IFRS profit after tax was €874 million (2012: €831 million), an increase of 5%. IFRS basic earnings per share was €0.61 (2012: €0.55), an increase of 11%. Non-IFRS basic earnings per share was €0.73 (2012: €0.70), an increase of 4%. The IFRS and non-IFRS effective tax rates were 24.8% (2012: 23.6%) and 26.8% (2012: 25.6%), respectively.


FINANCIAL HIGHLIGHTS – First Half 2013

 


First-Half 20131)


IFRS

Non-IFRS2)

€ million, unless otherwise stated

1H 2013

1H 2012

%
change

1H 2013

1H 2012

%
change

% change
const. curr.









Software

1,638

1,696

−3

1,638

1,696

−3

0

Cloud subscriptions and support

296

81

266

350

104

238

243

Software and cloud subscriptions

1,935

1,777

9

1,989

1,799

11

14

Support

4,286

3,966

8

4,295

3,968

8

11

Software and software-related service revenue

6,220

5,743

8

6,284

5,768

9

12

Total revenue

7,663

7,248

6

7,727

7,273

6

9

Total operating expenses

−6,029

−5,696

6

-5,607

-5,266

6

8

Operating profit

1,634

1,551

5

2,120

2,007

6

11

Operating margin (%)

21.3

21.4

−0.1pp

27.4

27.6

−0.2pp

0.4pp

Profit after tax

1,244

1,104

13

1,563

1,414

11


Basic earnings per share (€)

1.04

0.93

12

1.31

1.19

10


Number of employees (FTE)

64,937

60,972

7

N/A

N/A

N/A

N/A

1) All figures are unaudited.

2) For a detailed description of SAP's non-IFRS measures see Explanation of Non-IFRS Measures online. For a breakdown of the individual adjustments see page F8 in the appendix to this press release.

IFRS and non-IFRS software revenue was €1.64 billion (2012: €1.70 billion), a decrease of 3%, (flat at constant currencies). IFRS software and cloud subscription revenue was €1.94 billion (2012: €1.78 billion), an increase of 9%. Non-IFRS software and cloud subscription revenue was €1.99 billion (2012: €1.80 billion), an increase of 11% (14% at constant currencies). IFRS software and software-related service revenue was €6.22 billion (2012: €5.74 billion), an increase of 8%. Non-IFRS software and software-related service revenue was €6.28 billion (2012: €5.77 billion), an increase of 9% (12% at constant currencies). IFRS total revenue was €7.66 billion (2012: €7.25 billion), an increase of 6%. Non-IFRS total revenue was €7.73 billion (2012: €7.27 billion), an increase of 6% (9% at constant currencies).

IFRS operating profit was €1.63 billion (2012: €1.55 billion), an increase of 5%. Non-IFRS operating profit was €2.12 billion (2012: €2.01 billion), an increase of 6% (11% at constant currencies). IFRS operating margin was 21.3% (2012: 21.4%), a decrease of 0.1 percentage points. Non-IFRS operating margin was 27.4% (2012: 27.6%), a decrease of 0.2 percentage points. Non-IFRS operating margin was 28.0% at constant currencies, an increase of 0.4 percentage points.

IFRS profit after tax was €1.24 billion (2012: €1.10 billion), an increase of 13%. Non-IFRS profit after tax was €1.56 billion (2012: €1.41 billion), an increase of 11%. IFRS basic earnings per share was €1.04 (2012: €0.93), an increase of 12%. Non-IFRS basic earnings per share was €1.31 (2012: €1.19), an increase of 10%. The IFRS and non-IFRS effective tax rates were 21.5% (2012: 25.0%) and 24.5% (2012: 26.7%), respectively.

Operating cash flow was €2.48 billion (2012: €2.40 billion), an increase of 3%. Free cash flow was €2.22 billion (2012: €2.13 billion), an increase of 4%. Free cash flow was 29% of total revenue (2012: 29%). At June 30, 2013, SAP had a total group liquidity of €3.53 billion (December 31, 2012: €2.49 billion), which includes cash and cash equivalents and short term investments. Net liquidity at June 30, 2013 was -€1.49 billion compared to -€2.50 billion at December 31, 2012.


BUSINESS OUTLOOK

SAP reaffirms its full year 2013 non-IFRS operating profit outlook to be in a range of €5.85 billion - €5.95 billion at constant currencies (2012: €5.21 billion). Although the difficult macroeconomic environment in particular in Asia Pacific Japan and the rapid transition to the cloud have resulted in lower software revenue expectations, SAP remains committed to be a double-digit growth company with at least 10% growth in non-IFRS software and software-related service revenue at constant currencies in full year 2013 (2012: €13.25 billion). This replaces the previous growth outlook for non-IFRS software and software-related service revenue of 11% -13% at constant currencies and the underlying guidance for software and cloud subscription revenue.

In addition, SAP reaffirms its outlook for the fast-growing innovation categories cloud and in-memory. The company continues to expect full year 2013 non-IFRS cloud subscription and support revenue of around €750 million at constant currencies (2012: €343 million) and full year 2013 SAP HANA software revenue in a range of €650 - €700 million (2012: €392 million).

Additional Information

2013 revenue and profit figures include the revenue and profits from Ariba and SuccessFactors. The comparative numbers for 2012 do not include SuccessFactors until February 21, 2012 and Ariba until October 1, 2012.

For a more detailed description of all of SAP's non-IFRS measures and their limitations as well as our constant currency and free cash flow figures see Explanation of Non-IFRS Measures online.

Second Quarter 2013 Interim Report

SAP's second quarter 2013 Interim Report was published today and is available for download at www.sap.com/investor. The interim report includes an update on SAP's sustainability performance.

Webcast

SAP senior management will host a conference call for financial analysts and media on Thursday, July 18th at 2:00 PM (CEST) / 1:00 PM (GMT) / 8:00 AM (EDT) / 5:00 AM (PDT). The conference call will be web cast live on the Company's website at www.sap.com/investor and will be available for replay.

About SAP

As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device -- SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 248,500 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit 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 "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 ("SEC"), including SAP's most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

© 2013 SAP AG.  All rights reserved.

No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG.  The information contained herein may be changed without prior notice.

Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. National product specifications may vary.

These materials are provided by SAP AG and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials.  The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any.  Nothing herein should be construed as constituting an additional warranty.

SAP, R/3, ABAP, BAPI, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects Explorer, StreamWork, SAP HANA, the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, Sybase, Adaptive Server, Adaptive Server Enterprise, iAnywhere, Sybase 365, SQL Anywhere, Crossgate, B2B 360° and B2B 360° Services, m@gic EDDY, Ariba, Quadrem, b-process, Ariba Discovery, SuccessFactors, Execution is the Difference, BizX Mobile Touchbase, It's time to love work again, SuccessFactors Jam and BadAss SaaS, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany or an SAP affiliate company.

For customers interested in learning more about SAP products:

Global Customer Center:           

+49 180 534-34-24


United States Only:                  

1 (800) 872-1SAP (1-800-872-1727)



For more information, press only:

Christoph Liedtke                     

+49 (6227) 7-50383       

christoph.liedtke@sap.com, CET

Daniel Reinhardt                        

+49 (6227) 7-40201      

daniel.reinhardt@sap.com, CET

Jim Dever                                

+1 (610) 661-2161         

james.dever@sap.com, ET

Claudia Cortes                         

+65 6664-4450              

claudia.cortes@sap.com, SGT (GMT +8)




For more information, financial community only:

Stefan Gruber                          

+49 (6227) 7-44872       

investor@sap.com, CET




Follow SAP Investor Relations on Twitter at @sapinvestor.

 

 

Appendix – Financial Information to Follow


 

 

 

FINANCIAL INFORMATION

FOR THE SECOND QUARTER 2013

(Condensed and Unaudited)




Page

Financial Statements (IFRS)


        Income Statements – Quarter

F1

        Income Statements – Six Months    

F2                                    

        Statements of Financial Position            

F3-F4

        Statements of Cash Flows     

F5



Supplementary Financial Information


        Reconciliation from Non-IFRS Numbers to IFRS Numbers    

F6-F7 

        Non-IFRS Adjustments 

F8

        Revenue by Region    

F9-F12

 

Financial Statements (IFRS)

CONSOLIDATED INCOME STATEMENTS

For the three months ended June 30






€ millions, unless otherwise stated

Note

2013

2012

Change

in %

Software


982

1,059

-7

Cloud subscriptions and support


159

52

206

Software and cloud subscriptions


1,141

1,110

3

Support


2,177

2,013

8

Software and software-related service revenue


3,318

3,124

6

Consulting


580

617

-6

Other services


165

157

5

Professional services and other service revenue


744

774

-4

Total revenue


4,062

3,898

4






Cost of software and software-related services


-598

-568

5

Cost of professional services and other services


-609

-644

-5

Total cost of revenue


-1,207

-1,212

0

Gross profit


2,855

2,686

6

Research and development


-567

-568

0

Sales and marketing


-1,059

-972

9

General and administration


-232

-222

5

Restructuring


-17

-4

<-100

TomorrowNow litigation


0

-2

<-100

Other operating income/expense, net


9

3

>100

Total operating expenses


-3,074

-2,977

3

Operating profit


988

921

7






Other non-operating income/expense, net


-2

-45

-95

Finance income


26

28

-6

Finance costs


-49

-39

27

Financial income, net


-23

-11

<-100

Profit before tax


963

865

11






Income tax expense

(6)

-239

-204

17

Profit after tax


724

661

10

Profit attributable to non-controlling interests


0

0

N/A

Profit attributable to owners of parent


725

661

10






Earnings per share – basic (in €)*

(7)

0.61

0.55

11

Earnings per share – diluted (in €)*

(7)

0.61

0.55

11






* For the three months ended June 30, 2013 and 2012, the weighted average number of shares was 1,193 million (diluted 1,195 million) and 1,191 million (diluted: 1,192 million), respectively (treasury stock excluded).


F1

 

 

CONSOLIDATED INCOME STATEMENTS

For the six months ended June 30






€ millions, unless otherwise stated

Note

2013

2012

Change

in %

Software


1,638

1,696

-3

Cloud subscriptions and support


296

81

266

Software and cloud subscriptions


1,935

1,777

9

Support


4,286

3,966

8

Software and software-related service revenue


6,220

5,743

8

Consulting


1,136

1,214

-6

Other services


306

291

5

Professional services and other service revenue


1,443

1,505

-4

Total revenue


7,663

7,248

6






Cost of software and software-related services


-1,202

-1,106

9

Cost of professional services and other services


-1,215

-1,268

-4

Total cost of revenue


-2,416

-2,374

2

Gross profit


5,246

4,874

8

Research and development


-1,124

-1,091

3

Sales and marketing


-2,034

-1,802

13

General and administration


-429

-431

-1

Restructuring


-31

-4

<-100

TomorrowNow litigation


0

5

-92

Other operating income/expense, net


5

1

>100

Total operating expenses


-6,029

-5,696

6

Operating profit


1,634

1,551

5






Other non-operating income/expense, net


-13

-53

-76

Finance income


56

52

8

Finance costs


-93

-78

19

Financial income, net


-37

-26

41

Profit before tax


1,584

1,472

8






Income tax expense

(6)

-340

-368

-8

Profit after tax


1,244

1,104

13

Profit attributable to non-controlling interests


0

0

N/A

Profit attributable to owners of parent


1,245

1,104

13






Earnings per share – basic (in €)*

(7)

1.04

0.93

12

Earnings per share – diluted (in €)*

(7)

1.04

0.93

12






* For the six months ended June 30, 2013 and 2012, the weighted average number of shares was 1,193 million (diluted 1,195 million) and 1,191 million (diluted: 1,191 million), respectively (treasury stock excluded).


Due to rounding, numbers may not add up precisely.





F2

 

 


Consolidated Statements of Financial Position

As at June 30, 2013, and December 31, 2012





€ millions

Notes

2013

2012

   Cash and cash equivalents


3,386

2,477

   Other financial assets

(8)

296

154

   Trade and other receivables

(9)

3,379

3,917

   Other non-financial assets


408

294

   Tax assets


308

156

Total current assets


7,776

6,998

   Goodwill


13,333

13,227

   Intangible assets


2,996

3,234

   Property, plant, and equipment


1,751

1,708

   Other financial assets

(8)

495

509

   Trade and other receivables

(9)

92

88

   Other non-financial assets


97

68

   Tax assets


192

170

   Deferred tax assets


761

708

 Total non-current assets


19,717

19,711

Total assets


27,494

26,710








F3

 

  


€ millions

Notes

2013

2012

  Trade and other payables


883

870

  Tax liabilities


395

511

  Financial liabilities

(10)

1,365

802

  Other non-financial liabilities


1,404

2,136

    Provision TomorrowNow litigation


235

234

    Other provisions


390

609

Provisions


624

843

Deferred income

(11)

3,125

1,386

Total current liabilities


7,797

6,547

    Trade and other payables


47

63

    Tax liabilities


396

388

    Financial liabilities

(10)

3,859

4,446

    Other non-financial liabilities


107

98

    Provisions


330

361

    Deferred tax liabilities


518

574

    Deferred income

(11)

62

62

  Total non-current liabilities


5,319

5,991

Total liabilities


13,116

12,538

    Issued capital


1,229

1,229

    Share premium


521

492

    Retained earnings


14,212

13,973

    Other components of equity


-263

-194

    Treasury shares


-1,330

-1,337

   Equity attributable to owners of parent


14,369

14,163

   Non-controlling interests


9

8

  Total equity

(12)

14,378

14,171

Equity and liabilities


27,494

26,710








F4

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended June 30




€ millions

2013

2012

Profit after tax

1,244

1,104

Adjustments to reconcile profit after taxes to net cash provided by operating activities:



Depreciation and amortization

478

402

Income tax expense

340

368

Financial income, net

37

26

Decrease/increase in sales and bad debt allowances on trade receivables

38

26

Other adjustments for non-cash items

44

24

Decrease/increase in trade and other receivables

470

362

Decrease/increase in other assets

-129

-134

Decrease/increase in trade payables, provisions, and other liabilities

-945

-752

Decrease/increase in deferred income

1,735

1,629

Cash outflows due to TomorrowNow litigation

-1

-4

Interest paid

-80

-96

Interest received

33

47

Income taxes paid, net of refunds

-782

-602

Net cash flows from operating activities

2,482

2,400




Business combinations, net of cash and cash equivalents acquired

-99

-2,757

Purchase of intangible assets and property, plant, and equipment

-265

-275

Proceeds from sales of intangible assets or property, plant, and equipment

23

22

Purchase of equity or debt instruments of other entities

-1,200

-558

Proceeds from sales of equity or debt instruments of other entities

1,079

941

Net cash flows from investing activities

-462

-2,627




Dividends paid

-1,013

-1,310

Purchase of treasury shares

0

-53

Proceeds from reissuance of treasury shares

9

69

Proceeds from issuing shares (share-based payments)

0

14

Proceeds from borrowings

0

1,002

Repayments of borrowings

0

-1,023

Net cash flows from financing activities

-1,004

-1,301




Effect of foreign exchange rates on cash and cash equivalents

-107

-61

Net decrease/increase in cash and cash equivalents

909

-1,589

Cash and cash equivalents at the beginning of the period

2,477

4,965

Cash and cash equivalents at the end of the period

3,386

3,376






F5

 

 

SUPPLEMENTARY FINANCIAL INFORMATION


(UNAUDITED)


RECONCILIATION FROM NON-IFRS NUMBERS TO IFRS NUMBERS

The following tables present a reconciliation from our non-IFRS numbers (including our non-IFRS at constant currency numbers) to the respective most comparable IFRS numbers. Note: Our non-IFRS numbers are not prepared under a comprehensive set of accounting rules or principles.



for the three months ended June 30

€ millions, unless otherwise stated

2013

2012

Change in %


IFRS

Adj.*

Non-IFRS*

Currency

impact**

Non-IFRS

constant

currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS

constant

currency**

Revenue Numbers












Software

982

0

982

41

1,022

1,059

0

1,059

-7

-7

-3

Cloud subscriptions and support

159

24

183

4

187

52

17

69

206

166

171

Software and cloud subscriptions

1,141

24

1,165

45

1,209

1,110

17

1,127

3

3

7

Support

2,177

5

2,182

62

2,245

2,013

1

2,014

8

8

11

Software and software-related service revenue

3,318

29

3,347

107

3,454

3,124

18

3,142

6

7

10

Consulting

580

0

580

16

595

617

0

617

-6

-6

-3

Other services

165

0

165

4

169

157

0

157

5

5

7

Professional services and other service revenue

744

0

744

19

764

774

0

774

-4

-4

-1

Total revenue

4,062

29

4,091

127

4,218

3,898

18

3,916

4

4

8













Operating Expense Numbers












Cost of software and software-related services

-598

76

-522



-568

77

-491

5

6


Cost of professional services and other services

-609

23

-586



-644

34

-610

-5

-4


Total cost of revenue

-1,207

99

-1,108



-1,212

111

-1,101

0

1


Gross profit

2,855

129

2,984



2,686

129

2,815

6

6


Research and development

-567

17

-551



-568

45

-523

0

5


Sales and marketing

-1,059

44

-1,015



-972

56

-916

9

11


General and administration

-232

24

-208



-222

16

-206

5

1


Restructuring

-17

17

0



-4

4

0

<-100

N/A


TomorrowNow litigation

0

0

0



-2

2

0

<-100

N/A


Other operating income/expense, net

9

0

9



3

0

3

>100

>100


Total operating expenses

-3,074

201

-2,873

-54

-2,926

-2,977

234

-2,743

3

5

7













Profit Numbers












Operating profit

988

230

1,219

73

1,292

921

252

1,173

7

4

10

Other non-operating income/expense, net

-2

0

-2



-45

0

-45

-95

-95


Finance income

26

0

26



28

0

28

-6

-6


Finance costs

-49

0

-49



-39

0

-39

27

27


Financial income, net

-23

0

-23



-11

0

-11

<-100

<-100


Profit before tax

963

230

1,194



865

252

1,117

11

7


Income tax expense

-239

-81

-320



-204

-82

-286

17

12


Profit after tax

724

149

874



661

170

831

10

5


Profit attributable to non-controlling interests

0

0

0



0

0

0

N/A

N/A


Profit attributable to owners of parent

725

149

874



661

170

831

10

5














Key Ratios












Operating margin in %

24.3


29.8


30.6

23.6


30.0

0.7pp

-0.2pp

0.6pp

Effective tax rate in %

24.8


26.8



23.6


25.6

1.2pp

1.2pp


Earnings per share – basic (in €)*

0.61


0.73



0.55


0.70

11

4














Deferred cloud subscriptions and support revenue
   (June 30)

354

7

361



155

60

215

>100

68

























F6

 


for the six months ended June 30

€ millions, unless otherwise stated

2013

2012

Change in %


IFRS

Adj.*

Non-IFRS*

Currency

impact**

Non-IFRS

constant

currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS

constant

currency**

Revenue Numbers












Software

1,638

0

1,638

52

1,690

1,696

0

1,696

-3

-3

0

Cloud subscriptions and support

296

54

350

6

356

81

23

104

266

238

243

Software and cloud subscriptions

1,935

54

1,989

57

2,046

1,777

23

1,799

9

11

14

Support

4,286

10

4,295

106

4,402

3,966

2

3,968

8

8

11

Software and software-related service revenue

6,220

64

6,284

163

6,448

5,743

25

5,768

8

9

12

Consulting

1,136

0

1,136

24

1,160

1,214

0

1,214

-6

-6

-4

Other services

306

0

306

6

313

291

0

291

5

5

7

Professional services and other service revenue

1,443

0

1,443

30

1,473

1,505

0

1,505

-4

-4

-2

Total revenue

7,663

64

7,727

194

7,921

7,248

25

7,273

6

6

9













Operating Expense Numbers












Cost of software and software-related services

-1,202

173

-1,028



-1,106

149

-957

9

7


Cost of professional services and other services

-1,215

51

-1,164



-1,268

64

-1,204

-4

-3


Total cost of revenue

-2,416

224

-2,192



-2,374

213

-2,161

2

1


Gross profit

5,246

288

5,535



4,874

238

5,112

8

8


Research and development

-1,124

38

-1,086



-1,091

68

-1,023

3

6


Sales and marketing

-2,034

96

-1,939



-1,802

110

-1,692

13

15


General and administration

-429

33

-396



-431

40

-391

-1

1


Restructuring

-31

31

0



-4

4

0

<-100

N/A


TomorrowNow litigation

0

0

0



5

-5

0

-92

N/A


Other operating income/expense, net

5

0

5



1

0

1

>100

>100


Total operating expenses

-6,029

422

-5,607

-94

-5,701

-5,696

430

-5,266

6

6

8













Profit Numbers












Operating profit

1,634

486

2,120

100

2,220

1,551

456

2,007

5

6

11

Other non-operating income/expense, net

-13

0

-13



-53

0

-53

-76

-76


Finance income

56

0

56



52

0

52

8

8


Finance costs

-93

0

-93



-78

1

-77

19

21


Financial income, net

-37

0

-37



-26

1

-25

41

48


Profit before tax

1,584

486

2,070



1,472

457

1,929

8

7


Income tax expense

-340

-167

-507



-368

-147

-515

-8

-2


Profit after tax

1,244

318

1,563



1,104

310

1,414

13

11


Profit attributable to non-controlling interests

0

0

0



0

0

0

N/A

N/A


Profit attributable to owners of parent

1,245

318

1,563



1,104

310

1,414

13

11














Key Ratios












Operating margin in %

21.3


27.4


28.0

21.4


27.6

-0.1pp

-0.2pp

0.4pp

Effective tax rate in %

21.5


24.5



25.0


26.7

-3.5pp

-2.2pp


Earnings per share – basic (in €)*

1.04


1.31



0.93


1.19

12

10














Deferred cloud subscriptions and support revenue
  (June 30)

354

7

361



155

60

215

>100

68














* Adjustments in the revenue line items are for support revenue, cloud subscription revenue, and other similarly recurring revenues that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges, share-based compensation expenses, restructuring expenses, and discontinued activities.

** Constant currency revenue and operating income figures are calculated by translating revenue and operating income of the current period using the average exchange rates from the previous year's respective period instead of the current period. Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS number of the previous year's respective period.












F7

 

 

NON-IFRS ADJUSTMENTS










€ millions, unless otherwise stated

04/01/ -

6/30/2013

 

01/01/ -

6/30/2013

 

04/01/ -

6/30/2012

 

01/01/ -

6/30/2012

 






Software and software-related service revenue (IFRS)

3,318

6,220

3,124

5,743

Adjustment for deferred revenue write-down

29

64

18

25

Software and software-related service revenue  (Non-IFRS)

3,347

6,284

3,142

5,768






Operating profit (IFRS)

988

1,634

921

1,551

    Revenue Adjustments (per above)

29

64

18

25

    Adjustment for discontinued activities

0

0

2

-5

    Adjustment for acquisition-related charges 

145

283

130

250

    Adjustment for stock-based compensation expenses

39

109

98

181

    Adjustment for restructuring

17

31

4

4

    Operating expense adjustments

201

422

234

430

Operating profit adjustments

230

486

252

456

Operating profit (Non-IFRS)

1,219

2,120

1,173

2,007






Profit after tax  (IFRS)

724

1,244

661

1,104

  Revenue adjustments (per above)

29

64

18

25

  Operating profit adjustments (per above)

201

422

234

430

Adjustments pre-tax

230

486

252

457

Taxes on adjustments

-81

-167

-82

-147

Profit after tax (Non-IFRS)

874

1,563

831

1,414






Due to rounding, numbers may not add up precisely.




F8

 


 

REVENUE BY REGION

The following table presents our IFRS and non-IFRS revenue by region. Details regarding the different views (based on location of contract negotiation respectively by customer location are described in the note "Segment and Geographic Information" of our Consolidated Financial Statements.  The table also presents a reconciliation from our non-IFRS revenue (including our non-IFRS revenue at constant currency) to the respective most comparable IFRS revenue.

Note: Our non- IFRS revenues are not prepared under a comprehensive set of accounting rules or principles.

Revenues by Region – Management View















for the three months ended June 30

€ millions

2013

2012

 Change in %


IFRS

Adj.*

Non-IFRS*

Currency

impact**

Non-IFRS

constant

currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS

constant

currency**

Software revenue by region












    EMEA

417

0

417

7

424

419

0

419

-1

-1

1

    Americas

391

0

391

21

412

435

0

435

-10

-10

-5

    APJ

174

0

174

13

187

205

0

205

-15

-15

-9

Software revenue  

982

0

982

41

1,022

1,059

0

1,059

-7

-7

-3













Software revenue by location of negotiation and cloud subscription revenue by region












    EMEA

441

0

441

7

448

437

0

437

1

1

3

     Americas

518

24

542

24

566

465

17

482

11

13

18

    APJ

181

0

181

14

195

209

0

209

-13

-13

-7

Software revenue by location of negotiation and cloud subscription revenue

1,141

24

1,165

45

1,209

1,110

17

1,127

3

3

7













Revenues by Regions – Location of

Customers















for the three months ended June 30

€ millions

2013

2012

 Change in %


IFRS

Adj.*

Non-IFRS*

Currency

impact**

Non-IFRS

constant

currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS

constant

currency**

Software revenue by region












    EMEA

416

0

416

7

423

453

0

453

-8

-8

-7

    Americas

391

0

391

20

411

395

0

395

-1

-1

4

    APJ

175

0

175

14

189

210

0

210

-17

-17

-10

Software revenue  

982

0

982

41

1,022

1,059

0

1,059

-7

-7

-3













Cloud subscriptions and support revenue  by region












    EMEA

24

0

24

1

25

18

0

18

35

35

37

    Americas

127

24

151

3

154

30

17

47

>100

>100

>100

    APJ

8

0

8

0

8

4

0

4

97

97

103

Cloud subscriptions and support revenue

159

24

183

4

187

52

17

69

206

166

171













Software and cloud subscription revenue by region












    EMEA

440

0

440

7

447

471

0

471

-6

-6

-5

    Americas

518

24

542

23

565

426

16

442

22

22

28

    APJ

183

0

183

14

197

214

0

214

-15

-15

-8

Software and cloud subscription revenue

1,141

24

1,165

45

1,209

1,110

17

1,127

3

3

7
























F9

Software and software-related service revenue
 by region












    Germany

455

0

455

0

455

436

0

436

4

4

4

    Rest of EMEA

1,054

0

1,054

19

1,073

1,026

0

1,026

3

3

5

Total EMEA

1,509

0

1,509

20

1,529

1,462

0

1,462

3

3

5

    United States

953

29

982

26

1,008

843

18

861

13

14

17

    Rest of Americas

337

0

337

18

355

292

0

292

16

16

22

Total Americas

1,290

29

1,319

43

1,362

1,135

18

1,153

14

14

18

    Japan

128

0

128

34

162

171

0

171

-25

-25

-6

    Rest of APJ

390

0

390

11

401

356

0

356

10

10

13

Total APJ

519

0

519

44

563

527

0

527

-2

-2

7

Software and software-related
 service revenue

3,318

29

3,347

107

3,454

3,124

18

3,142

6

7

10













Total revenue by region












    Germany

591

0

591

0

591

575

0

575

3

3

3

    Rest of EMEA

1,254

0

1,254

24

1,278

1,233

0

1,233

2

2

4

Total EMEA

1,845

0

1,845

24

1,869

1,808

0

1,808

2

2

3

    United States

1,185

29

1,214

30

1,244

1,085

18

1,103

9

10

13

    Rest of Americas

419

0

420

21

441

382

0

382

10

10

15

Total Americas

1,604

29

1,634

51

1,685

1,468

18

1,486

9

10

13

    Japan

145

0

145

38

183

195

0

195

-25

-25

-6

    Rest of APJ

467

0

467

14

481

427

0

427

9

9

13

Total APJ

612

0

612

52

664

622

0

622

-2

-2

7

Total revenue 

4,062

29

4,091

127

4,218

3,898

18

3,916

4

4

8
























F10


 

Revenues by Region – Management View















for the six months ended June 30

€ millions

2013

2012

 Change in %


IFRS

Adj.*

Non-IFRS*

Currency

impact**

Non-IFRS

constant

currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS

constant

currency**

Software revenue by region












    EMEA

715

0

715

11

726

694

0

694

3

3

4

    Americas

645

0

645

24

669

674

0

674

-4

-4

-1

    APJ

278

0

278

17

295

328

0

328

-15

-15

-10

Software revenue  

1,638

0

1,638

52

1,690

1,696

0

1,696

-3

-3

0













Software revenue by location of negotiation and cloud subscription revenue by region












    EMEA

766

0

766

11

777

722

0

722

6

6

8

    Americas

875

55

930

28

958

721

23

744

21

25

29

    APJ

294

0

294

17

311

333

0

333

-12

-12

-7

Software revenue by location of negotiation and cloud subscription revenue

1,935

54

1,989

57

2,046

1,777

23

1,799

9

11

14
























F11

Revenues by Regions – Location of

Customers















for the six months ended June 30

€ millions

2013

2012

 Change in %


IFRS

Adj.*

Non-IFRS*

Currency

impact**

Non-IFRS

constant

currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS

constant

currency**

Software revenue by region












    EMEA

716

0

716

11

727

731

0

731

-2

-2

-1

    Americas

643

0

643

23

666

631

0

631

2

2

6

    APJ

280

0

280

17

297

333

0

333

-16

-16

-11

Software revenue  

1,638

0

1,638

52

1,690

1,696

0

1,696

-3

-3

0













Cloud subscriptions and support revenue  by region












    EMEA

51

0

51

0

51

28

0

28

81

80

83

    Americas

230

54

284

5

289

47

23

70

>100

>100

>100

    APJ

15

0

15

1

16

5

0

5

>100

>100

>100

Cloud subscriptions and support revenue

296

54

350

6

356

81

23

104

266

238

243













Software and cloud subscription
 revenue by region












    EMEA

766

0

766

12

778

759

0

759

1

1

2

    Americas

873

54

927

28

955

678

23

701

29

32

36

    APJ

295

0

295

18

313

339

0

339

-13

-13

-8

Software and cloud subscription revenue

1,935

54

1,989

57

2,046

1,777

23

1,799

9

11

14












F11

Software and software-related service revenue by region












    Germany

854

0

854

0

854

807

0

807

6

6

6

    Rest of EMEA

1,990

0

1,990

33

2,023

1,887

1

1,888

5

5

7

  Total EMEA

2,844

0

2,844

33

2,877

2,694

1

2,695

6

6

7

    United States

1,760

63

1,824

30

1,854

1,535

24

1,559

15

17

19

    Rest of Americas

644

0

645

32

677

546

0

546

18

18

24

  Total Americas

2,405

64

2,469

62

2,531

2,081

24

2,105

16

17

20

   Japan

263

0

263

55

318

315

0

315

-17

-17

1

    Rest of APJ

709

0

709

12

721

652

0

652

9

9

11

  Total APJ

971

0

971

68

1,039

967

0

967

0

0

7

Software and software-related service revenue

6,220

64

6,284

163

6,448

5,743

25

5,768

8

9

12













Total revenue by region












    Germany

1,116

0

1,116

0

1,116

1,092

0

1,092

2

2

2

    Rest of EMEA

2,385

0

2,385

40

2,425

2,291

1

2,292

4

4

6

  Total EMEA

3,502

0

3,502

39

3,541

3,383

1

3,384

4

3

5

    United States

2,209

63

2,272

36

2,308

1,998

24

2,022

11

12

14

    Rest of Americas

796

0

797

39

836

715

0

715

11

11

17

  Total Americas

3,005

64

3,069

75

3,144

2,714

24

2,738

11

12

15

    Japan

296

0

296

63

359

360

0

360

-18

-18

0

    Rest of APJ

860

0

860

16

876

791

0

791

9

9

11

  Total APJ

1,156

0

1,156

79

1,235

1,151

0

1,151

0

0

7

Total revenue 

7,663

64

7,727

194

7,921

7,248

25

7,273

6

6

9













* Adjustments in the revenue line items are for support revenue, cloud subscription revenue, and other similarly recurring revenues that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules.

** Constant currency revenue figures are calculated by translating revenue of the current period using the average exchange rates from the previous year's respective period instead of the current period. Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS number of the previous year's respective period.

For a more detailed description of these adjustments and their limitations as well as our constant currency figures, see our Web site www.sap.com/corporate-en/investors/newsandreports/reporting-framework.epx under "Non-IFRS Measures and Estimates."

Due to rounding, numbers may not add up precisely.

F12


 

 

 


SOURCE SAP AG



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