SAP Announces Preliminary Fourth Quarter and Full Year 2014 Results

SAP Expedites Transition to Cloud - Targets 7x Growth in Cloud to Reach Up To €28 Billion Total Revenue By 2020

20 Jan, 2015, 01:01 ET from SAP SE

WALLDORF, Germany, Jan. 20, 2015 /PRNewswire/ --

  • Cloud Business Surges – Guidance Achieved as Non-IFRS Cloud Subscriptions and Support Revenue Jumped 72% in Fourth Quarter and Increased 45% in Full Year
  • Cloud Subscriptions and Support Backlog Increased 94%, Exceeding €2.3 Billion at Year-End
  • Strong HANA Momentum – More Than 5,800 HANA Customers and More Than 1,850 Suite on HANA Customers
  • Software and Software-Related Service Revenue Guidance Achieved Despite the Accelerated Shift from Upfront to More Ratable Revenue
  • Operating Profit Guidance Achieved While Significantly Expanding the Company's Cloud Delivery Capabilities
  • Targeting €7.5 - €8.0 Billion in Cloud Subscriptions and Support Revenue and €26 - €28 Billion Total Revenue by 2020

SAP SE (NYSE: SAP) today announced its financial results for the fourth quarter and twelve months ended December 31, 2014.

BUSINESS HIGHLIGHTS IN THE FOURTH QUARTER AND FULL YEAR 2014

SAP delivered exceptionally strong growth in the cloud and continues to lead in this industry-wide transformation. Full year non-IFRS cloud subscriptions and support revenue increased 45% at actual and constant currencies to €1.10 billion1.

The company also showed a solid software and software-related service revenue performance despite the accelerated shift from upfront software revenue to more subscription-based cloud revenue. Non-IFRS software and software-related service revenue grew 7% at constant currencies (6% at actual currencies to €14.87 billion) achieving the full year target of 6% - 8% growth at constant currencies. Non-IFRS operating profit increased by 3% at constant currencies to €5.63 billion (3% at actual currencies to €5.64 billion), achieving the full year outlook of €5.6 - €5.8 billion at constant currencies.

"In 2014 we delivered on our Run Simple strategy to help our customers transform their businesses. SAP's strong growth is driven by the HANA platform, the broadest cloud portfolio and the largest business network in the world," said Bill McDermott, CEO of SAP. "SAP powers the clear path to growth for businesses in the 21st century: run real-time, run networked, run simple. We will continue to push relentlessly toward a much more predictable business model and are once again raising our cloud ambition to grow 7X from 2014 through 2020."

"We had exceptional growth in our cloud business and have significantly lifted the total of cloud backlog and non-IFRS deferred cloud revenue to more than €3 billion. This is committed business that will drive strong cloud growth in the future," said Luka Mucic, CFO of SAP. "We expect cloud subscriptions to exceed software license revenue in 2018. At that time SAP expects to reach a scale in its cloud business that will clear the way for accelerated operating profit expansion."

SAP is the fastest growing enterprise cloud company at scale2 with fourth quarter non-IFRS cloud subscriptions and support revenue increasing 72% year-over-year (59% at constant currencies). The annual total cloud revenue run rate now exceeds €1.7 billion3 or $2.0 billion4. Non-IFRS calculated cloud billings increased 104% (78% at constant currencies) in the fourth quarter5. Non-IFRS deferred cloud subscriptions and support revenue was €699 million as of December 31, 2014, a year-over-year increase of 56% (40% at constant currencies)6. The Company's cloud subscriptions and support backlog7 as of December 31, 2014 was €2.3 billion, a year-over-year increase of 94%.

SAP's acquisition of Concur in December 2014 propels the world's largest business network into the $1.2 trillion corporate travel and expense market. More than 1.7 million connected companies trade over $700 billion of frictionless commerce8 on this network – more than Amazon, eBay and Alibaba all combined.

SAP's intense focus on next-generation customer engagement is also fueling growth. Its hybris omni-channel e-commerce platform, combined with Cloud for Sales, once again saw strong revenue contribution in 2014 with triple-digit growth in software revenue and cloud subscriptions and support revenue combined.

SAP HANA, the platform for real-time business applications, had a phenomenal year and continues to be a major growth engine for SAP. The Company saw continued broad market adoption of SAP HANA across all industries and regions as customers recognize the compelling business benefits of SAP HANA. SAP now has more than 5,800 HANA customers and more than 1,850 customers for SAP Business Suite on HANA. SAP HANA is also evolving into a leading development platform.

In its services business, SAP is radically simplifing the way it engages with customers and delivers services to its customers: Under the new ONE Service approach, SAP provides one service portfolio, out of one global organization and under one contract. To execute on ONE Service SAP has combined all lines of services under one organizational umbrella.

Fourth Quarter 2014 Regional Revenue

SAP had another solid performance in EMEA, despite the macroeconomic conditions weighing on the business in Russia and Ukraine. Non-IFRS software and software-related service revenue increased 5% (5% at constant currencies) with a strong software revenue performance in the UK. Non-IFRS cloud subscriptions and support revenue in EMEA grew 85% (75% at constant currencies).

In the Americas, non-IFRS software and software-related service revenue increased 14% (6% at constant currencies), driven by strong growth in the United States. In Latin America, SAP continued to face a difficult macroeconomic and political environment. Non-IFRS cloud subscriptions and support revenue in the Americas increased 63% (50% at constant currencies).

In APJ, the Company achieved exceptional revenue growth in cloud and an overall solid revenue performance. Non-IFRS software and software-related service revenue grew 6% (2% at constant currencies). India delivered strong double-digit software revenue growth. Non-IFRS cloud subscriptions and support revenue grew 98% (87% at constant currencies) in APJ.

FINANCIAL RESULTS IN DETAIL

FINANCIAL HIGHLIGHTS – Fourth Quarter 2014

Fourth Quarter 20141)

IFRS

Non- IFRS2)

€ million, unless otherwise stated

Q4 2014

Q4 2013

% change

Q4 2014

Q4 2013

% change

% change const. curr.

Cloud subscriptions and support

349

208

68

360

210

72

59

Software

1,867

1,902

–2

1,867

1,903

–2

–5

Support

2,506

2,268

11

2,507

2,272

10

8

Software and support

4,373

4,170

5

4,374

4,175

5

2

Software and software-related service revenue

4,722

4,378

8

4,734

4,385

8

5

Total revenue

5,458

5,106

7

5,469

5,113

7

4

Total operating expenses

–3,704

–3,305

12

–3,342

–3,015

11

8

Operating profit

1,754

1,802

–3

2,127

2,098

1

–2

Operating margin (%)

32.1

35.3

–3.2pp

38.9

41.0

–2.1pp

–2.3pp

Profit after tax

1,304

1,319

–1

1,564

1,522

3

Basic earnings per share (€)

1.09

1.11

–1

1.31

1.28

3

Number of employees (FTE)

74,406

66,572

12

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 cloud subscriptions and support revenue was €349 million (2013: €208 million), an increase of 68%. Non-IFRS cloud subscriptions and support revenue was €360 million (2013: €210 million), an increase of 72% (59% at constant currencies). IFRS software and support revenue was €4.37 billion (2013: €4.17 billion), an increase of 5%. Non-IFRS software and support revenue was €4.37 billion (2013: €4.18 billion), an increase of 5% (2% at constant currencies). IFRS software and software-related service revenue was €4.72 billion (2013: €4.38 billion), an increase of 8%. Non-IFRS software and software-related service revenue was €4.73 billion (2013: €4.39 billion), an increase of 8% (5% at constant currencies). IFRS total revenue was €5.46 billion (2013: €5.11 billion), an increase of 7%. Non-IFRS total revenue was €5.47 billion (2013: €5.11 billion), an increase of 7% (4% at constant currencies).

IFRS operating profit was €1.75 billion (2013: €1.80 billion), a decrease of 3%. Non-IFRS operating profit was €2.13 billion (2013: €2.10 billion), an increase of 1% (a decrease of 2% at constant currencies). IFRS operating margin was 32.1% (2013: 35.3%), a decrease of 3.2 percentage points. Non-IFRS operating margin was 38.9% (2013: 41.0%), a decrease of 2.1 percentage points (2.3 percentage points at constant currencies).

IFRS profit after tax was €1.30 billion (2013: €1.32 billion), a decrease of 1%. Non-IFRS profit after tax was €1.56 billion (2013: €1.52 billion), an increase of 3%. IFRS basic earnings per share was €1.09 (2013: €1.11), a decrease of 1%. Non-IFRS basic earnings per share was €1.31 (2013: €1.28), an increase of 3%. The IFRS and non-IFRS effective tax rates in the fourth quarter of 2014 were 24.8% (2013: 25.7%) and 25.8% (2013: 26.6%), respectively.

FINANCIAL HIGHLIGHTS – Full Year 2014

Full Year 20141)

IFRS

Non-IFRS2)

€ million, unless otherwise stated

FY 2014

FY 2013

% change

FY 2014

FY 2013

% change

% change const. curr.

Cloud subscriptions and support

1,087

696

56

1,101

757

45

45

Software

4,399

4,516

–3

4,399

4,518

–3

–3

Support

9,368

8,738

7

9,373

8,756

7

8

Software and support

13,767

13,254

4

13,773

13,275

4

5

Software and software-related service revenue

14,855

13,950

6

14,874

14,032

6

7

Total revenue

17,560

16,815

4

17,580

16,897

4

5

Total operating expenses

–13,229

–12,336

7

–11,942

–11,415

5

6

Operating profit

4,331

4,479

–3

5,638

5,482

3

3

Operating margin (%)

24.7

26.6

–2.0pp

32.1

32.4

–0.4pp

–0.7pp

Profit after tax

3,275

3,325

–1

4,178

3,998

4

Basic earnings per share (€)

2.74

2.79

–2

3.50

3.35

4

Number of employees (FTE)

74,406

66,572

12

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 cloud subscriptions and support revenue was €1.09 billion (2013: €696 million), an increase of 56%. Non-IFRS cloud subscriptions and support revenue was €1.10 billion (2013: €757 million), an increase of 45% (45% at constant currencies). IFRS software and support revenue was €13.77 billion (2013: €13.25 billion), an increase of 4%. Non-IFRS software and support revenue was €13.77 billion (2013: €13.28 billion), an increase of 4% (5% at constant currencies). IFRS software and software-related service revenue was €14.86 billion (2013: €13.95 billion), an increase of 6%. Non-IFRS software and software-related service revenue was €14.87 billion (2013: €14.03 billion), an increase of 6% (7% at constant currencies). IFRS total revenue was €17.56 billion (2013: €16.82 billion), an increase of 4%. Non-IFRS total revenue was €17.58 billion (2013: €16.90 billion), an increase of 4% (5% at constant currencies).

IFRS operating profit was €4.33 billion (2013: €4.48 billion), a decrease of 3%. Non-IFRS operating profit was €5.64 billion (2013: €5.48 billion), an increase of 3% (3% at constant currencies). IFRS operating margin was 24.7% (2013: 26.6%), a decrease of 2.0 percentage points. Non-IFRS operating margin was 32.1% (2013: 32.4%), a decrease of 0.4 (0.7 percentage points at constant currencies).

IFRS profit after tax was €3.28 billion (2013: €3.33 billion), a decrease of 1%. Non-IFRS profit after tax was €4.18 billion (2013: €4.00 billion), an increase of 4%. IFRS basic earnings per share was €2.74 (2013: €2.79), a decrease of 2%. Non-IFRS basic earnings per share was €3.50 (2013: €3.35), an increase of 4%. The IFRS and non-IFRS effective tax rates in 2014 were 24.8% (2013: 24.4%) and 26.2% (2013: 25.9%), respectively.

Cash Flow – Twelve Months 2014

Operating cash flow was €3.57 billion (2013: €3.83 billion), a decrease of 7% year-over-year. This was mainly due to payouts for litigation in the amount of €555 million. Free cash flow was €2.84 billion (2013: €3.27 billion), a decrease of 13% year-over-year. Free cash flow was 16% of total revenue (2013: 19%). At December 31, 2014, SAP had a total group liquidity of €3.42 billion (December 31, 2013: €2.84 billion), which includes cash and cash equivalents and short term investments. Net debt at December 31, 2014 was -€7.67 billion compared to -€1.47 billion at December 31, 2013.

ONE Service and Impact on SAP's Financial Reporting

As outlined above, SAP is implementing the ONE Service approach to provide holistic service offerings to its customers. This combination of services will be reflected in SAP's financial reporting by combining the respective revenue in one revenue line item of the income statement. Therefore, SAP will amend the structure of its income statement, starting with the first quarter of 2015 by presenting one revenue line item called 'Services' which includes premium support services, professional services and other services. Revenue from Enterprise Support and other standardised support offerings will continue to be reported in the 'Software support' line. The formerly presented subtotal 'Software and software-related services' (SSRS) which still included premium support revenue is replaced by the subtotal 'Cloud & software' which excludes premium support services.

This income statement modification does neither change total revenue nor the reported cloud subscriptions & support revenue and software revenue. The outlook the Company provides below for 2015 and beyond is based on this modified income statement format. For more information refer to the Company's webinar at www.sap.com/investor.

BUSINESS OUTLOOK 2015

The Company is providing the following 2015 outlook:

  • Based on the strong momentum in SAP's cloud business the Company expects full year 2015 non-IFRS cloud subscriptions and support revenue to be in a range of €1.95 - €2.05 billion at constant currencies (2014: €1.10 billion). The upper end of this range represents a growth rate of 86% at constant currencies. Concur and Fieldglass are expected to contribute approximately 50 percentage points to this growth.
  • The Company expects full year 2015 non-IFRS cloud & software revenue to increase by 8% - 10% at constant currencies (2014: €14.33 billion).
  • The Company expects full-year 2015 non-IFRS operating profit to be in a range of €5.6 billion - €5.9 billion at constant currencies (2014: €5.64 billion).

This 2015 outlook replaces the previously communicated 2015 mid-term ambition.

While the Company's full-year 2015 business outlook is at constant currencies, actual currency reported figures are expected to continue to be impacted by currency exchange rate fluctuations. If exchange rates remain at the December 2014 closing rates for the rest of the year, the Company expects non-IFRS cloud & software revenue growth rate to experience a currency benefit of approximately 2 percentage points and non-IFRS operating profit growth rate at actual currencies to experience a currency benefit of approximately 1 percentage points for the full year 2015.

MID-TERM OUTLOOK

SAP expects to grow its more predictable revenue business while steadily increasing operating profit.

Looking beyond 2015, SAP is updating its 2017 ambition. SAP continues to expect fast growth in its cloud business with non-IFRS cloud subscriptions and support revenue reaching a range of €3.5 - €3.6 billion in 2017. Non-IFRS total revenue is expected to reach €21 - €22 billion in 2017. The Company expects non-IFRS operating profit in a range of €6.3 - €7.0 billion in 2017.

The changes to the 2017 goals reflect the impact from the Concur acquisition and anticipated faster customer adoption of SAP's private cloud offering. SAP also anticipates the fast-growing cloud business along with growth in support revenue will drive a higher share of more predictable revenue with the total of cloud subscriptions & support revenue and software support revenue reaching a range of 65% - 70% of total revenue in 2017.

By 2017 SAP's rapidly growing cloud subscriptions and support revenue is expected to be close to software license revenue and is expected to exceed software license revenue in 2018. At that time SAP expects to reach a scale in its cloud business that will clear the way for accelerated operating profit expansion.

SAP is also introducing high level 2020 ambitions with 2020 non-IFRS cloud subscriptions and support revenue expected to reach €7.5 - €8.0 billion. Total revenue is expected to be in a range of €26 - €28 billion and non-IFRS operating profit in a range of €8 - €9 billion. The share of more predictable revenue is expected to grow further with the total of cloud subscriptions & support revenue and software support revenue reaching a range of 70% - 75% of total revenue in 2020.

Additional Information 2014 revenue and profit figures include the full revenue and profit from hybris and the revenue and profit from Concur and Fieldglass since their acquisition dates of December 4 and May 2, respectively. The comparative numbers for 2013 do not include Concur or Fieldglass and hybris was included from August 1, 2013. 

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.

2014 Integrated Report and Annual Report SAP's 2014 Integrated Report and Annual Report to Shareholders and 2014 Annual Report on Form 20-F are scheduled to be published on March 20, 2015, and will be available for download at www.sap.com/investor.

Webcast SAP senior management will host a press conference in Walldorf today at 10:00 AM (CET) / 9:00 AM (GMT) / 4:00 AM (Eastern) / 1:00 AM (Pacific), followed by an investor conference at 2:00 PM (CET) / 1:00 PM (GMT) / 8:00 AM (Eastern) / 5:00 AM (Pacific). Both conferences will be web cast live on the Company's website at www.sap.com/investor and will be available for replay. Supplementary financial information pertaining to the full-year and quarterly results can be found at www.sap.com/investor.

SAP will also be hosting a Capital Markets Day and live webcast in New York on Tuesday, February 3, 2015.

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 282,000 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.

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1 For the full year 2014, Fieldglass contributed €50 million and Concur contributed €45 million to SAP's Non-IFRS cloud subscriptions and support revenue at constant currencies, representing a 13 percentage point contribution to SAP's respective full year 2014 growth rate. 2 Compared to SAP's peer group companies with an enterprise software annual cloud revenue run rate above €1 billion. 3 The annual revenue run rate is the fourth quarter 2014 non-IFRS cloud subscriptions and support revenue (€360 million) plus non-IFRS cloud-related professional services and other service revenue (€69 million) multiplied by 4. 4 Translated into USD for reader's convenience based on $/€ exchange rate of $1.21/€1.00 at the end of the fourth quarter 2014. 5 The calculated billings numbers and respective growth rates reported herein update the preliminary numbers reported in the pre-release from January 12th. 6 Calculated billings is the total of a period's cloud subscriptions and support revenue and of the respective period's change in the deferred cloud subscriptions and support revenue balance. In the fourth quarter 2014 Fieldglass contributed €19 million and Concur contributed €45 million to SAP's Non-IFRS cloud subscriptions and support revenue at constant currencies. The contribution from Concur to non-IFRS deferred cloud subscriptions and support revenue at December 31st, 2014 was €65 million at constant currencies and €71 million at actual currencies (IFRS: €62 million). At December 4th, 2014, the closing of Concur, the balance was €61 million at actual currencies (IFRS: € 42 million). 7 Cloud subscriptions and support backlog represents expected future cloud subscriptions and support revenue that is contracted but not yet invoiced and thus not recorded in deferred revenue. 8 Network spend volume is the total value of purchase orders transacted on the Ariba, Concur and Fieldglass Networks in the trailing 12 months.

Appendix – Financial Information

FINANCIAL INFORMATION

FOR THE FOURTH QUARTER 2014

(Condensed and Unaudited)

Page

Financial Statements (IFRS, Unaudited)

Consolidated Income Statements 

F1-F2

Consolidated Statements of Financial Position 

F3

Consolidated Statements of Cash Flows 

F4

Supplementary Financial Information (Unaudited)

Reconciliation from Non-IFRS Numbers to IFRS Numbers 

F5-F8

Explanation of Non-IFRS Adjustments 

F8

Calculated Cloud Billings 

F9

Revenue by Region 

F10-F11

Multi-Quarter Summary 

F12-F13

 

Financial Statements (IFRS, Unaudited)

CONSOLIDATED INCOME STATEMENTS OF SAP GROUP – QUARTER

For the three months ended December 31

€ millions, unless otherwise stated

2014

2013

Change

in %

Cloud subscriptions and support

349

208

68

Software

1,867

1,902

–2

Support

2,506

2,268

11

Software and support

4,373

4,170

5

Software and software-related service revenue

4,722

4,378

8

Professional services and other service revenue

735

728

1

Total revenue

5,458

5,106

7

Cost of software and software-related services

–852

–759

12

Cost of professional services and other services

–611

–582

5

Total cost of revenue

–1,463

–1,341

9

Gross profit

3,995

3,765

6

Research and development

–670

–606

11

Sales and marketing

–1,269

–1,111

14

General and administration

–279

–230

21

Restructuring

–29

–23

27

TomorrowNow and Versata litigation

–2

–1

>100

Other operating income/expense, net

8

7

21

Total operating expenses

–3,704

–3,305

12

Operating profit

1,754

1,802

–3

Other non-operating income/expense, net

5

–3

<-100

Finance income

28

20

40

Finance costs

–52

–43

22

Financial income, net

–24

–22

7

Profit before tax

1,734

1,776

–2

Income tax TomorrowNow and Versata litigation

1

0

>100

Other income tax expense

–431

–458

–6

Income tax expense

–430

–457

–6

Profit after tax

1,304

1,319

–1

attributable to owners of parent

1,304

1,319

–1

attributable to non-controlling interests

0

–1

<-100

Earnings per share, basic (in €)*

1.09

1.11

–1

Earnings per share, diluted (in €)*

1.09

1.10

–1

* For the three months ended December 31, 2014 and 2013, the weighted average number of shares was 1,195 million (diluted 1,198 million) and 1,194 million (diluted: 1,196 million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.

F1

 

CONSOLIDATED INCOME STATEMENTS OF SAP GROUP – TWELVE MONTHS

For the twelve months ended December 31

€ millions, unless otherwise stated

2014

2013

Change

in %

Cloud subscriptions and support

1,087

696

56

Software

4,399

4,516

–3

Support

9,368

8,738

7

Software and support

13,767

13,254

4

Software and software-related service revenue

14,855

13,950

6

Professional services and other service revenue

2,706

2,865

–6

Total revenue

17,560

16,815

4

Cost of software and software-related services

–2,894

–2,629

10

Cost of professional services and other services

–2,379

–2,402

–1

Total cost of revenue

–5,272

–5,031

5

Gross profit

12,288

11,784

4

Research and development

–2,331

–2,282

2

Sales and marketing

–4,304

–4,131

4

General and administration

–891

–866

3

Restructuring

–126

–70

80

TomorrowNow and Versata litigation

–309

31

<-100

Other operating income/expense, net

4

12

–64

Total operating expenses

–13,229

–12,336

7

Operating profit

4,331

4,479

–3

Other non-operating income/expense, net

49

–17

<-100

Finance income

127

115

11

Finance costs

–152

–181

–16

Financial income, net

–25

–66

–63

Profit before tax

4,356

4,396

–1

Income tax TomorrowNow and Versata litigation

86

–8

<-100

Other income tax expense

–1,166

–1,063

10

Income tax expense

–1,080

–1,071

1

Profit after tax

3,275

3,325

–1

attributable to owners of parent

3,275

3,326

–2

attributable to non-controlling interests

0

–1

<-100

Earnings per share, basic (in €)*

2.74

2.79

–2

Earnings per share, diluted (in €)*

2.74

2.78

–2

* For the twelve months ended December 31, 2014 and 2013, the weighted average number of shares was 1,195 million (diluted 1,197 million) and 1,193 million (diluted: 1,195 million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.

F2

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION OF SAP GROUP

as at December 31, 2014 and December 31, 2013

€ millions

2014

2013

Cash and cash equivalents

3,348

2,748

Other financial assets

658

251

Trade and other receivables

4,330

3,864

Other non-financial assets

433

346

Tax assets

173

142

Total current assets

8,942

7,351

Goodwill

20,831

13,690

Intangible assets

4,608

2,954

Property, plant, and equipment

2,102

1,820

Other financial assets

1,020

607

Trade and other receivables

100

98

Other non-financial assets

164

107

Tax assets

229

172

Deferred tax assets

378

292

Total non-current assets

29,432

19,739

Total assets

38,374

27,091

as at December 31, 2014 and December 31, 2013

€ millions

2014

2013

Trade and other payables

1,006

850

Tax liabilities

333

433

Financial liabilities

3,801

748

Other non-financial liabilities

2,797

2,562

Provision TomorrowNow and Versata litigation

1

223

Other provisions

149

123

Provisions

150

346

Deferred income

1,681

1,408

Total current liabilities

9,767

6,347

Trade and other payables

55

45

Tax liabilities

373

319

Financial liabilities

7,741

3,758

Other non-financial liabilities

231

257

Provisions

149

132

Deferred tax liabilities

386

110

Deferred income

78

74

Total non-current liabilities

9,013

4,695

Total liabilities

18,780

11,043

Issued capital

1,229

1,229

Share premium

614

551

Retained earnings

18,311

16,258

Other components of equity

570

–718

Treasury shares

–1,224

–1,280

Equity attributable to owners of parent

19,500

16,040

Non-controlling interests

94

8

Total equity

19,594

16,048

Total equity and liabilities

38,374

27,091

Due to rounding, numbers may not add up precisely.

F3

 

CONSOLIDATED STATEMENTS OF CASH FLOWS OF SAP GROUP

For the twelve months ended December 31

€ millions

2014

2013

Profit after tax

3,275

3,325

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

Depreciation and amortization

1,010

951

Income tax expense

1,080

1,071

Financial income, net

25

66

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

47

42

Other adjustments for non-cash items

85

57

Decrease/increase in trade and other receivables

–286

–110

Decrease/increase in other assets

–344

–131

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

648

–176

Decrease/increase in deferred income

16

125

Cash outflows due to TomorrowNow and Versata litigation

–555

–1

Interest paid

–130

–159

Interest received

59

67

Income taxes paid, net of refunds

–1,356

–1,295

Net cash flows from operating activities

3,574

3,832

Business combinations, net of cash and cash equivalents acquired

–6,354

–1,160

Cash payments for derivative financial instruments related to business combinations

–111

0

Total cash outflows for business combinations, net of cash and cash equivalents acquired

–6,465

–1,160

Purchase of intangible assets and property, plant, and equipment

–737

–566

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

46

55

Purchase of equity or debt instruments of other entities

–891

–1,531

Proceeds from sales of equity or debt instruments of other entities

833

1,421

Net cash flows from investing activities

–7,214

–1,781

Dividends paid

–1,194

–1,013

Proceeds from reissuance of treasury shares

51

49

Proceeds from borrowings

7,581

1,000

Repayments of borrowings

–2,219

–1,625

Net cash flows from financing activities

4,219

–1,589

Effect of foreign currency rates on cash and cash equivalents

21

–191

Net decrease/increase in cash and cash equivalents

600

271

Cash and cash equivalents at the beginning of the period

2,748

2,477

Cash and cash equivalents at the end of the period

3,348

2,748

Due to rounding, numbers may not add up precisely.

F4

 

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 December 31

€ millions, unless otherwise stated

2014

2013

IFRS

Adj.*

Non-IFRS*

Currency

Impact**

Non-IFRS

Constant

Currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS

Constant

Currency**

Revenue Numbers

Cloud subscriptions and support

349

10

360

–26

334

208

1

210

68

72

59

Software

1,867

0

1,867

–59

1,808

1,902

0

1,903

–2

–2

–5

Support

2,506

1

2,507

–64

2,444

2,268

5

2,272

11

10

8

Software and support

4,373

1

4,374

–123

4,251

4,170

5

4,175

5

5

2

Software and software-related service revenue

4,722

12

4,734

–149

4,586

4,378

6

4,385

8

8

5

Professional services and other service revenue

735

0

735

–24

712

728

0

728

1

1

–2

thereof cloud-related

69

0

69

–3

66

45

0

45

54

54

47

Total revenue

5,458

12

5,469

–172

5,297

5,106

6

5,113

7

7

4

Cloud subscriptions and support

349

10

360

–26

334

208

1

210

68

72

59

Cloud-related professional services revenue

69

0

69

–3

66

45

0

45

54

54

47

Cloud revenue

418

10

429

–29

400

253

1

254

65

69

57

Operating Expense Numbers

Cost of software and software-related services

–852

105

–747

–759

98

–661

12

13

thereof cloud

–161

30

–131

–83

18

–66

93

99

Cost of professional services and other services

–611

47

–564

–582

38

–543

5

4

Total cost of revenue

–1,463

152

–1,311

–1,341

137

–1,204

9

9

Gross profit

3,995

164

4,158

3,765

143

3,909

6

6

Research and development

–670

55

–615

–606

51

–555

11

11

Sales and marketing

–1,269

69

–1,201

–1,111

63

–1,047

14

15

General and administration

–279

55

–224

–230

15

–215

21

4

Restructuring

–29

29

0

–23

23

0

27

0

TomorrowNow and Versata litigation

–2

2

0

–1

1

0

>100

0

Other operating income/expense, net

8

0

8

7

0

7

21

21

Total operating expenses

–3,704

362

–3,342

98

–3,244

–3,305

290

–3,015

12

11

8

F5

For the three months ended December 31

€ millions, unless otherwise stated

2014

2013

Change in %

IFRS

Adj.*

Non-IFRS*

Currency

Impact**

Non-IFRS

Constant

Currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS

Constant

Currency**

Profit Numbers

Operating profit

1,754

374

2,127

–74

2,053

1,802

296

2,098

–3

1

–2

Other non-operating income/expense, net

5

0

5

–3

0

–3

<-100

<-100

Finance income

28

0

28

20

0

20

40

40

Finance costs

–52

0

–52

–43

0

–43

22

22

Financial income, net

–24

0

–24

–22

0

–22

7

7

Profit before tax

1,734

374

2,108

1,776

296

2,072

–2

2

Income tax TomorrowNow and Versata litigation

1

–1

0

0

0

0

>100

0

Other income tax expense

–431

–113

–544

–458

–93

–550

–6

–1

Income tax expense

–430

–114

–544

–457

–93

–550

–6

–1

Profit after tax

1,304

260

1,564

1,319

203

1,522

–1

3

attributable to owners of parent

1,304

260

1,564

1,319

203

1,523

–1

3

attributable to non-controlling interests

0

0

0

–1

0

–1

<-100

<-100

Key Ratios

Operating margin (in %)

32.1

38.9

38.8

35.3

41.0

–3.2pp

–2.1pp

–2.3pp

Effective tax rate (in %)

24.8

25.8

25.7

26.6

–1.0pp

–0.8pp

Earnings per share, basic (in €)

1.09

1.31

1.11

1.28

–1

3

F6

For the twelve months ended December 31

€ millions, unless otherwise stated

2014

2013

IFRS

Adj.*

Non-IFRS*

Currency

Impact**

Non-IFRS

Constant

Currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS

Constant

Currency**

Revenue Numbers

Cloud subscriptions and support

1,087

14

1,101

–3

1,098

696

61

757

56

45

45

Software

4,399

0

4,399

0

4,399

4,516

2

4,518

–3

–3

–3

Support

9,368

5

9,373

114

9,487

8,738

19

8,756

7

7

8

Software and support

13,767

5

13,773

113

13,886

13,254

21

13,275

4

4

5

Software and software-related service revenue

14,855

19

14,874

110

14,984

13,950

82

14,032

6

6

7

Professional services and other service revenue

2,706

0

2,706

32

2,738

2,865

0

2,865

–6

–6

–4

thereof cloud-related

222

0

222

1

222

170

0

170

30

30

31

Total revenue

17,560

19

17,580

142

17,722

16,815

82

16,897

4

4

5

Cloud subscriptions and support

1,087

14

1,101

–3

1,098

696

61

757

56

45

45

Cloud-related professional services revenue

222

0

222

1

222

170

0

170

30

30

31

Cloud revenue

1,309

14

1,323

–3

1,320

866

61

927

51

43

42

Operating Expense Numbers

Cost of software and software-related services

–2,894

350

–2,543

–2,629

364

–2,265

10

12

thereof cloud

–481

88

–393

–314

97

–218

53

80

Cost of professional services and other services

–2,379

121

–2,258

–2,402

123

–2,278

–1

–1

Total cost of revenue

–5,272

471

–4,801

–5,031

487

–4,543

5

6

Gross profit

12,288

490

12,778

11,784

570

12,354

4

3

Research and development

–2,331

127

–2,204

–2,282

120

–2,162

2

2

Sales and marketing

–4,304

169

–4,134

–4,131

205

–3,926

4

5

General and administration

–891

85

–806

–866

70

–796

3

1

Restructuring

–126

126

0

–70

70

0

80

0

TomorrowNow and Versata litigation

–309

309

0

31

–31

0

<-100

0

Other operating income/expense, net

4

0

4

12

0

12

–64

–64

Total operating expenses

–13,229

1,288

–11,942

–152

–12,093

–12,336

921

–11,415

7

5

6

F7

For the twelve months ended December 31

€ millions, unless otherwise stated

2014

2013

Change in %

IFRS

Adj.*

Non-IFRS*

Currency

Impact**

Non-IFRS

Constant

Currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS

Constant

Currency**

Profit Numbers

Operating profit

4,331

1,307

5,638

–9

5,629

4,479

1,003

5,482

–3

3

3

Other non-operating income/expense, net

49

0

49

–17

0

–17

<-100

<-100

Finance income

127

0

127

115

0

115

11

11

Finance costs

–152

0

–152

–181

0

–181

–16

–16

Financial income, net

–25

0

–25

–66

0

–66

–63

–63

Profit before tax

4,356

1,307

5,662

4,396

1,003

5,399

–1

5

Income tax TomorrowNow and Versata litigation

86

–86

0

–8

8

0

<-100

0

Other income tax expense

–1,166

–318

–1,485

–1,063

–338

–1,401

10

6

Income tax expense

–1,080

–405

–1,485

–1,071

–330

–1,401

1

6

Profit after tax

3,275

902

4,178

3,325

674

3,998

–1

4

attributable to owners of parent

3,275

902

4,177

3,326

674

3,999

–2

4

attributable to non-controlling interests

0

0

0

–1

0

–1

<-100

<-100

Key Ratios

Operating margin (in %)

24.7

32.1

31.8

26.6

32.4

–2.0pp

–0.4pp

–0.7pp

Effective tax rate (in %)

24.8

26.2

24.4

25.9

0.4pp

0.3pp

Earnings per share, basic (in €)

2.74

3.50

2.79

3.35

–2

4

* Adjustments in the revenue line items are for support revenue, cloud subscriptions and support 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 payment expenses, restructuring expenses, as well as the TomorrowNow and Versata litigation expenses.

** 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.

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.

 

EXPLANATION OF NON-IFRS ADJUSTMENTS

€ millions, unless otherwise stated

Q4 2014

1/1–

12/31/2014

Q4 2013

1/1–

12/31/2013

Operating profit (IFRS)

1,754

4,331

1,802

4,479

Revenue adjustments

12

19

6

82

Adjustment for acquisition-related charges 

160

562

130

555

Adjustment for share-based payment expenses

171

290

135

327

Adjustment for restructuring

29

126

23

70

Adjustment for TomorrowNow and Versata litigation

2

309

1

–31

Operating expense adjustments

362

1,288

290

921

Operating profit adjustments

374

1,307

296

1,003

Operating profit (Non-IFRS)

2,127

5,638

2,098

5,482

Due to rounding, numbers may not add up precisely.

F8

 

CALCULATED CLOUD BILLINGS

The following table presents the calculated cloud billings metric which we define as the total of a period's cloud subscription and support revenue and of the respective period's change in the deferred cloud subscription and support revenue balance. The table also reconciles the non-IFRS calculated cloud billings metric (including our non-IFRS at constant currency metric) to the respective IFRS based calculated cloud billings metric.

For the three months ended December 31

€ millions, unless otherwise stated

2014

2013

IFRS

Adj.*

Non-IFRS*

Cur-

rency

Impact**

Non-IFRS

Cons-

tant

Cur-

rency**

IFRS

Adj.*

Non-IFRS*

Cur-

rency

Impact**

Non-IFRS

Cons-

tant

Cur-

rency**

Cloud subscriptions and support

349

10

360

–26

334

208

1

210

0

210

Closing balance deferred cloud subscriptions and support

690

10

699

–62

637

443

4

447

9

457

Opening balance deferred cloud subscriptions and support

498

0

498

–32

466

376

6

382

0

382

Change in deferred cloud subscriptions and support

192

10

202

–31

171

68

–2

66

9

75

Calculated cloud billings

542

20

562

–56

505

276

0

276

9

285

Year-over-year changes (2014 vs. 2013, in %)

96%

104%

78%

* Adjustments in the revenue and deferred revenue line items are for cloud subscriptions and support 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 deferred revenue balances are calculated by translating the current period's opening and closing deferred revenue balances as well as the comparative period's closing deferred revenue balance using the opening exchange rates of the comparative 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.

F9

 

 

REVENUE BY REGION

The following tables present our IFRS and non-IFRS revenue by region based on customer location. The tables also present 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.

For the three months ended December 31

€ millions

2014

2013

 Change in %

IFRS

Adj.*

Non-IFRS*

Currency

Impact**

Non-IFRS

Constant

Currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS

Constant

Currency**

Cloud subscriptions and support revenue by region

EMEA

92

1

93

–5

88

50

0

50

84

85

75

Americas

222

9

231

–19

212

140

1

141

58

63

50

APJ

36

0

36

–2

34

18

0

18

97

98

87

Cloud subscriptions and support revenue

349

10

360

–26

334

208

1

210

68

72

59

Software and software-related service revenue by region

EMEA

2,290

2

2,292

4

2,296

2,189

3

2,193

5

5

5

Americas

1,682

9

1,691

–126

1,565

1,478

3

1,481

14

14

6

APJ

751

0

751

–27

724

711

0

711

6

6

2

Software and software-related service revenue

4,722

12

4,734

–149

4,586

4,378

6

4,385

8

8

5

Total revenue by region

Germany

799

0

799

–1

799

793

1

794

1

1

1

Rest of EMEA

1,869

2

1,871

3

1,874

1,758

3

1,761

6

6

6

Total EMEA

2,668

2

2,671

2

2,672

2,551

3

2,555

5

5

5

United States

1,479

9

1,488

–127

1,361

1,264

2

1,266

17

18

7

Rest of Americas

460

0

460

–16

444

490

1

491

–6

–6

–10

Total Americas

1,939

9

1,948

–144

1,805

1,754

3

1,757

11

11

3

Japan

164

0

164

7

171

173

0

173

–5

–5

–1

Rest of APJ

687

0

687

–37

650

628

0

628

9

9

3

Total APJ

850

0

851

–30

820

801

0

801

6

6

2

Total revenue 

5,458

12

5,469

–172

5,297

5,106

6

5,113

7

7

4

F10

For the twelve months ended December 31

€ millions

2014

2013

 Change in %

IFRS

Adj.*

Non-IFRS*

Currency

Impact**

Non-IFRS

Constant

Currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS

Constant

Currency**

Cloud subscriptions and support revenue by region

EMEA

277

1

278

–1

277

176

0

176

58

58

57

Americas

709

12

721

–3

719

457

61

517

55

39

39

APJ

101

0

101

1

102

64

0

64

59

59

60

Cloud subscriptions and support revenue

1,087

14

1,101

–3

1,098

696

61

757

56

45

45

Software and software-related service revenue by region

EMEA

7,028

5

7,034

45

7,079

6,616

6

6,622

6

6

7

Americas

5,489

14

5,503

12

5,515

5,097

76

5,173

8

6

7

APJ

2,337

0

2,337

53

2,390

2,237

0

2,237

4

4

7

Software and software-related service revenue

14,855

19

14,874

110

14,984

13,950

82

14,032

6

6

7

Total revenue by region

Germany

2,570

1

2,571

–1

2,571

2,513

2

2,514

2

2

2

Rest of EMEA

5,813

4

5,817

53

5,870

5,462

5

5,467

6

6

7

Total EMEA

8,383

5

8,389

52

8,441

7,975

6

7,981

5

5

6

United States

4,898

13

4,911

–35

4,875

4,487

73

4,561

9

8

7

Rest of Americas

1,591

0

1,592

61

1,653

1,746

2

1,748

–9

–9

–5

Total Americas

6,489

14

6,503

26

6,528

6,233

76

6,309

4

3

3

Japan

600

0

600

46

646

631

0

631

–5

–5

2

Rest of APJ

2,088

0

2,088

18

2,106

1,975

0

1,976

6

6

7

Total APJ

2,688

0

2,688

64

2,753

2,606

0

2,607

3

3

6

Total revenue 

17,560

19

17,580

142

17,722

16,815

82

16,897

4

4

5

* Adjustments in the revenue line items are for support revenue, cloud subscriptions and support 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.

F11

 

MULTI-QUARTER SUMMARY

(IFRS AND NON-IFRS)

€ millions, unless otherwise stated

Q1

2013

Q2

2013

Q3

2013

Q4

2013

TY

2013

Q1

2014

Q2

2014

Q3

2014

Q4

2014

TY

2014

Cloud subscriptions and support (IFRS)

137

159

191

208

696

219

241

277

349

1,087

Revenue adjustment*

30

24

5

1

61

1

1

1

10

14

Cloud subscriptions and support (non-IFRS)

167

183

197

210

757

221

242

278

360

1,101

Software (IFRS)

657

982

975

1,902

4,516

623

957

951

1,867

4,399

Revenue adjustment*

0

0

2

0

2

0

0

0

0

0

Software (non-IFRS)

657

982

977

1,903

4,518

623

957

952

1,867

4,399

Support (IFRS)

2,109

2,177

2,184

2,268

8,738

2,213

2,279

2,370

2,506

9,368

Revenue adjustment*

4

5

5

5

19

2

1

1

1

5

Support (non-IFRS)

2,113

2,182

2,189

2,272

8,756

2,214

2,280

2,371

2,507

9,373

Software and support (IFRS)

2,765

3,159

3,159

4,170

13,254

2,836

3,237

3,322

4,373

13,767

Revenue adjustment*

4

5

7

5

21

2

1

1

1

5

Software and support (non-IFRS)

2,770

3,164

3,166

4,175

13,275

2,838

3,238

3,323

4,374

13,773

Software and software-related service revenue (IFRS)

2,903

3,318

3,351

4,378

13,950

3,055

3,478

3,599

4,722

14,855

Revenue adjustment*

35

29

12

6

82

3

2

2

12

19

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

2,937

3,347

3,363

4,385

14,032

3,058

3,480

3,601

4,734

14,874

Consulting

557

580

553

553

2,242

508

520

512

555

2,095

Other services

142

165

142

175

623

134

153

143

180

611

Professional services and other service revenue

(IFRS = non-IFRS)

698

744

695

728

2,865

643

673

655

735

2,706

Total revenue (IFRS)

3,601

4,062

4,045

5,106

16,815

3,698

4,151

4,254

5,458

17,560

Revenue adjustment*

35

29

12

6

82

3

2

2

12

19

Total revenue (non-IFRS)

3,636

4,091

4,057

5,113

16,897

3,701

4,153

4,256

5,469

17,580

Operating profit (IFRS)

646

988

1,043

1,802

4,479

723

698

1,157

1,754

4,331

Revenue adjustment*

35

29

12

6

82

3

2

2

12

19

Expense adjustment*

222

168

242

290

921

193

536

196

362

1,288

Operating profit (non-IFRS)

902

1,186

1,296

2,098

5,482

919

1,236

1,355

2,127

5,638

Operating margin (IFRS, in %)

17.9

24.3

25.8

35.3

26.6

19.5

16.8

27.2

32.1

24.7

Operating margin (non-IFRS, in %)

24.8

29.0

32.0

41.0

32.4

24.8

29.8

31.8

38.9

32.1

Effective tax rate (IFRS, in %)

16.3

24.8

26.4

25.7

24.4

24.1

22.6

26.5

24.8

24.8

Effective tax rate (non-IFRS, in %)

21.4

26.8

27.6

26.6

25.9

25.9

25.4

27.7

25.8

26.2

Earnings per share, basic (IFRS, in €)

0.44

0.61

0.64

1.11

2.79

0.45

0.47

0.74

1.09

2.74

Earnings per share, basic (non-IFRS, in €)

0.58

0.71

0.78

1.28

3.35

0.56

0.79

0.84

1.31

3.50

F12

€ millions, unless otherwise stated

Q1

2013

Q2

2013

Q3

2013

Q4

2013

TY

2013

Q1

2014

Q2

2014

Q3

2014

Q4

2014

TY

2014

Net cash flows from operating activities

2,162

320

558

792

3,832

2,352

223

507

491

3,574

Purchases of intangible assets, and property, plant, and equipment

–113

–152

–136

–165

–566

–130

–174

–168

–265

–737

Free cash flow

2,049

168

422

627

3,266

2,222

49

339

226

2,837

Deferred cloud subscriptions and support revenue (IFRS, quarter end)

344

354

376

443

443

451

445

498

690

690

Revenue adjustment*

33

7

6

4

4

3

3

0

10

10

Deferred cloud subscriptions and support revenue (non-IFRS, quarter end)

377

361

382

447

447

454

448

498

699

699

Days' sales outstanding (DSO, in days)**

61

62

62

62

62

63

64

65

65

65

Headcount (quarter end)***

64,598

64,937

66,061

66,572

66,572

66,750

67,651

68,835

74,406

74,406

Employee retention (in %, rolling 12 months)

93.9

93.6

93.6

93.5

93.5

93.4

93.5

93.3

93.5

93.5

Women in management (in %, quarter end)

21.4

21.4

21.0

21.2

21.2

20.9

21.1

21.3

21.3

21.3

Greenhouse gas emissions (in kilotons)

145

145

135

120

545

120

140

125

115

500

* Adjustments in the revenue line items are for support revenue, cloud subscriptions and support 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 payment expenses, restructuring expenses, as well as the TomorrowNow and Versata litigation expenses.

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".

** Days' Sales Outstanding measures the length of time it takes to collect receivables. SAP calculates DSO by dividing the average invoiced accounts receivables balance of the last 12 months by the average monthly sales of the last 12 months.

*** In full-time equivalents

Due to rounding, numbers may not add up precisely.

F13

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SOURCE SAP SE



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