SAP Announces Strong Quarter with Double-Digit Growth - Leading the Transition to Cloud and In-Memory Euro 1.2 Billion in Non-IFRS Software and Cloud Subscription Revenue; Euro 1.3 Billion in Non-IFRS Operating Profit

WALLDORF, Germany, Oct. 21, 2013 /PRNewswire/ --

  • Third Quarter 2013 Non-IFRS Software and Cloud Subscription Revenue Increased 13% at Constant Currencies (6% at Actual Currencies to €1.17 Billion)
  • Third Quarter 2013 Non-IFRS Software and Software-Related Service Revenue Increased 12% at Constant Currencies (5% at Actual Currencies to €3.36 Billion)
  • Triple-Digit Year-Over-Year Growth in Cloud Subscription and Support Revenue – Annual Cloud Revenue Run Rate Now Exceeds €1 Billion
  • Accelerating SAP's In-Memory Leadership – 90% Year-Over-Year Growth at Constant Currencies in HANA Software Revenue (79% at Actual Currencies)
  • Third Quarter 2013 Non-IFRS Operating Profit Reached €1.30 Billion, a 15% Increase at Constant Currencies (5% at Actual Currencies)
  • Strong Growth in Third Quarter 2013 Earnings Per Share
  • Full Year Outlook Reiterated

Third Quarter and Nine Months Results 2013

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SAP AG (NYSE: SAP) today announced its financial results for the third quarter and nine months ended September 30, 2013.

BUSINESS HIGHLIGHTS IN THE THIRD QUARTER 2013

"SAP is clearly leading the transition to cloud and in-memory. SAP HANA is the market's most advanced in-memory database and we are well on our way to reach €1 billion in HANA software revenue since market launch. The strong customer adoption of SAP Business Suite on HANA demonstrates our leadership in innovating the future platform for business," said Bill McDermott and Jim Hagemann Snabe, Co-CEOs of SAP. "We now are the second largest enterprise cloud company with an annual cloud revenue run rate exceeding €1 billion. We continue to gain market share and grow significantly faster than our primary competitor in all regions."

"SAP had a very strong performance in the third quarter, considering the mixed macroeconomic environment and the strong currency headwinds. Our ongoing focus on operating discipline while successfully scaling our cloud business is paying off. We continued our double-digit growth momentum and increased our Non-IFRS operating margin by 180 basis points at constant currencies," said Werner Brandt, CFO of SAP.

Third quarter non-IFRS software and cloud subscriptions revenue increased 13% at constant currencies year-over-year (6% at actual currencies to €1.17 billion). SAP's third quarter non-IFRS cloud subscription and support revenue is growing faster than most cloud competitors. SAP closed another significant contract in the cloud: EMC, a US-headquartered Fortune 500 company, selected SAP's Cloud solutions including Employee Central to attract and better retain and reward employees, and achieve better visibility and collaboration with its suppliers. The annual cloud revenue run rate now exceeds €1 billion1. With approximately 33 million cloud users, SAP has the largest subscriber base in the cloud market. Non-IFRS deferred cloud subscription and support revenue2 was €382 million as of September 30, 2013, a year-over-year increase of 79%. The Ariba business is showing accelerated synergies with new and upsell application billings growing high double digits. The trailing twelve month Ariba network spend volume3 was approximately $500 billion. Today Ariba is the world's largest Web-based business trading community with 1.2 million connected companies.

SAP HANA, the platform for real-time business applications, continues to be a major growth engine, with accelerating software revenue growth of 90% year-over-year at constant currencies (79% at actual currencies to €149 million) and over 2,100 customers. SAP Business Suite powered by SAP HANA is the best-in-class platform for high-performance applications and in fact SAP has now over 450 customers. Customers are showing strong interest in SAP HANA Enterprise Cloud.

Overall, SAP's double-digit growth momentum continued in the third quarter with Non-IFRS software and software-related service revenue increasing 12% at constant currencies (5% at actual currencies) to €3.36 billion.

Efficiency in SAP's business has further improved with Non-IFRS operating profit reaching €1.30 billion in the third quarter, a 15% increase at constant currencies (5% at actual currencies), resulting in a 180 basis points expansion of the non-IFRS operating margin at constant currencies despite a negative effect from acquisitions of 50 basis points.

Third Quarter 2013 Regional Results
The Americas region delivered a strong third quarter in non-IFRS software and cloud subscription revenue4 with 17% growth year-over-year at constant currencies, driven by an excellent software revenue performance in Latin America and strong non-IFRS cloud subscription and support revenue growth in North America. The EMEA region saw strong growth with non-IFRS software and cloud subscription revenue increasing 14% year-over-year at constant currencies, amidst a mixed market environment. Software revenue in EMEA grew double-digit at constant currencies driven by strong double-digit growth in the Netherlands, Switzerland and the U.K. Non-IFRS software and cloud subscription revenue in the Asia Pacific Japan (APJ) region marked a return to growth with solid single-digit growth at constant currencies, driven by a strong performance in China.

Nine Months 2013 Regional Results
The Americas region delivered a very strong first nine months performance in non-IFRS software and cloud subscription revenue with 23% year-over-year growth at constant currencies. The EMEA region saw strong growth with non-IFRS software and cloud subscription revenue increasing 10% at constant currencies for the first nine months 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 slightly by 2% at constant currencies in the first nine months of 2013.

 


FINANCIAL RESULTS IN DETAIL

 

FINANCIAL HIGHLIGHTS – Third Quarter 2013




Third Quarter 20131)


IFRS



Non-IFRS2)




€ million, unless otherwise stated

Q3 2013

Q3 2012

%

change

Q3 2013

Q3 2012

%

change

% change

const. curr.









Software

975

1,026

−5

977

1,026

−5

2

Cloud subscriptions and support

191

63

203

197

80

146

162

Software and cloud subscriptions

1,167

1,089

7

1,174

1,106

6

13

Support

2,184

2,105

4

2,189

2,106

4

11

Software and software-related service

revenue

3,351

3,194

5

3,363

3,212

5

12

Total revenue

4,045

3,952

2

4,057

3,970

2

9

Total operating expenses

−3,003

−3,031

−1

−2,761

−2,731

1

6

Operating profit

1,043

921

13

1,296

1,239

5

15

Operating margin (%)

25.8

23.3

2.5pp

32.0

31.2

0.8pp

1.8pp

Profit after tax

762

618

23

933

836

12


Basic earnings per share (€)

0.64

0.52

23

0.78

0.70

11


Number of employees (FTE)

66,061

61,344

8

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 software revenue was €975 million (2012: €1.03 billion), a decrease of 5%. Non-IFRS software revenue was €977 million (2012: €1.03 billion), a decrease of 5% (an increase of 2% at constant currencies). IFRS software and cloud subscription revenue was €1.17 billion (2012: €1.09 billion), an increase of 7%. Non-IFRS software and cloud subscription revenue was €1.17 billion (2012: €1.11 billion), an increase of 6% (13% at constant currencies). IFRS software and software-related service revenue was €3.35 billion (2012: €3.19 billion), an increase of 5%. Non-IFRS software and software-related service revenue was €3.36 billion (2012: €3.21 billion), an increase of 5% (12% at constant currencies). IFRS total revenue was €4.05 billion (2012: €3.95 billion), an increase of 2%. Non-IFRS total revenue was €4.06 billion (2012: €3.97 billion), an increase of 2% (9% at constant currencies).

IFRS operating profit was €1.04 billion (2012: €921 million), an increase of 13%. Non-IFRS operating profit was €1.30 billion (2012: €1.24 billion), an increase of 5% (15% at constant currencies). IFRS operating margin was 25.8% (2012: 23.3%), an increase of 2.5 percentage points. Non-IFRS operating margin was 32.0% (2012: 31.2%), an increase of 0.8 percentage points. Non-IFRS operating margin at constant currencies was 33.0%, an increase of 1.8 percentage points. Non-IFRS operating margin for the third quarter 2013 was negatively impacted affected by approximately 50 basis points due to the acquisitions of Ariba and hybris.

IFRS profit after tax was €762 million (2012: €618 million), an increase of 23%. Non-IFRS profit after tax was €933 million (2012: €836 million), an increase of 12%. IFRS basic earnings per share was €0.64 (2012: €0.52 per share), an increase of 23%. Non-IFRS basic earnings per share was €0.78 (2012: €0.70 per share), an increase of 11%. The IFRS and non-IFRS effective tax rates were 26.4% (2012: 24.8%) and 27.6% (2012: 26.7%), respectively.

 


FINANCIAL HIGHLIGHTS – Nine Months 2013




Nine Months 20131)


IFRS

Non-IFRS2)

€ million, unless otherwise stated

9M 2013

9M 2012

%

change

9M 2013

9M 2012

%

change

% change

const. curr.









Software

2,614

2,722

−4

2,616

2,722

−4

0

Cloud subscriptions and support

488

144

238

547

183

198

208

Software and cloud subscriptions

3,101

2,866

8

3,163

2,905

9

14

Support

6,470

6,071

7

6,484

6,075

7

11

Software and software-related service

revenue

9,571

8,937

7

9,647

8,980

7

12

Total revenue

11,708

11,200

5

11,784

11,243

5

9

Total operating expenses

−9,031

−8,727

3

−8,368

−7,998

5

7

Operating profit

2,677

2,473

8

3,416

3,245

5

12

Operating margin (%)

22.9

22.1

0.8pp

29.0

28.9

0.1pp

0.9pp

Profit after tax

2,006

1,723

16

2,498

2,249

11


Basic earnings per share (€)

1.68

1.45

16

2.09

1.89

11


Number of employees (FTE)

66,061

61,344

8

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 software revenue was €2.61 billion (2012: €2.72 billion), a decrease of 4%. Non-IFRS software revenue was €2.62 billion (2012: €2.72 billion), a decrease of 4% (flat at constant currencies). IFRS software and cloud subscription revenue was €3.10 billion (2012: €2.87 billion), an increase of 8%. Non-IFRS software and cloud subscription revenue was €3.16 billion (2012: €2.91 billion), an increase of 9% (14% at constant currencies). IFRS software and software-related service revenue was €9.57 billion (2012: €8.94 billion), an increase of 7%. Non-IFRS software and software-related service revenue was €9.65 billion (2012: €8.98 billion), an increase of 7% (12% at constant currencies). IFRS total revenue was €11.71 billion (2012: €11.20 billion), an increase of 5%. Non-IFRS total revenue was €11.78 billion (2012: €11.24 billion), an increase of 5% (9% at constant currencies).

IFRS operating profit was €2.68 billion (2012: €2.47 billion), an increase of 8%. Non-IFRS operating profit was €3.42 billion (2012: €3.25 billion), an increase of 5% (12% at constant currencies). IFRS operating margin was 22.9% (2012: 22.1%), an increase of 0.8 percentage points. Non-IFRS operating margin was 29.0% (2012: 28.9%), an increase of 0.1 percentage points. Non-IFRS operating margin at constant currencies was 29.8%, an increase of 0.9 percentage points.

IFRS profit after tax was €2.01 billion (2012: €1.72 billion), an increase of 16%. Non-IFRS profit after tax was €2.50 billion (2012: €2.25 billion), an increase of 11%. IFRS basic earnings per share was €1.68 (2012: €1.45 per share), an increase of 16%. Non-IFRS basic earnings per share was €2.09 (2012: €1.89 per share), an increase of 11%. The IFRS and non-IFRS effective tax rates were 23.4% (2012: 24.9%) and 25.6% (2012: 26.7%), respectively.

Operating cash flow was €3.04 billion (2012: €3.06 billion), a decrease of 1%. Free cash flow was €2.64 billion (2012: €2.69 billion), a decrease of 2%. Free cash flow was 23% of total revenue (2012: 24%). At September 30, 2013, SAP had a total group liquidity of €3.31 billion (December 31, 2012: €2.49 billion), which includes cash and cash equivalents and short term investments. Net liquidity at September 30, 2013 was -€2.04 billion compared to -€2.50 billion at December 31, 2012.

BUSINESS OUTLOOK

SAP reiterates the outlook for the full year 2013, which remains unchanged from the outlook provided on July 18, 2013:

  • The Company expects full year 2013 non-IFRS software and software-related service revenue to increase by at least 10% at constant currencies (2012: €13.25 billion).
  • The Company expects full year 2013 non-IFRS cloud subscription and support revenue of around €750 million at constant currencies (2012: €343 million)
  • The Company expects full year 2013 SAP HANA software revenue in a range of €650 – €700 million (2012: €392 million).
  • The Company expects full-year 2013 non-IFRS operating profit to be in a range of €5.85 billion – €5.95 billion at constant currencies (2012: €5.21 billion).
  • The Company projects a full-year 2013 IFRS effective tax rate of 24.0% – 25.0% (2012: 26.2%) and a non-IFRS effective tax rate of 25.5% – 26.5% (2012: 27.5%).

If exchange rates remain at the September 2013 level for the rest of the year, the Company expects both the fourth quarter and full year 2013 non-IFRS software and software-related service revenue growth rate to be negatively impacted by approximately 5 percentage points from currency and the fourth quarter and full year 2013 non-IFRS operating profit growth rate to be negatively impacted by approximately 7 percentage points from currency.

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

Third Quarter 2013 Interim Report
SAP's third quarter 2013 Interim Report was published today and is available for download at www.sap.com/investor.

Webcast
SAP senior management will host a conference call for financial analysts and media on Monday, October 21st at 2:00 PM (CET) / 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 251,000 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.

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United States Only:            

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Claudia Cortes                    

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

Follow SAP Investor Relations on Twitter at @sapinvestor.

_________________________
1 The annual revenue run rate is the third quarter 2013 cloud division revenue of €252 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 third quarter and nine month interim report for details.

Appendix – Financial Information to Follow


 


FINANCIAL INFORMATION


FOR THE THIRD QUARTER 2013


(Condensed and Unaudited)







Page



Financial Statements (IFRS)


       Income Statements – Quarter  

F1

       Income Statements – Nine 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 September 30






€ millions, unless otherwise stated

Note

2013

2012

Change

in %

Software


975

1,026

−5

Cloud subscriptions and support


191

63

203

Software and cloud subscriptions


1,167

1,089

7

Support


2,184

2,105

4

Software and software-related service revenue


3,351

3,194

5

Consulting


553

616

−10

Other services


142

142

0

Professional services and other service revenue


695

758

−8

Total revenue


4,045

3,952

2






Cost of software and software-related services


−636

−638

0

Cost of professional services and other services


−605

−619

−2

Total cost of revenue


−1,241

−1,257

−1

Gross profit


2,804

2,695

4

Research and development


−552

−547

1

Sales and marketing


−986

−984

0

General and administration


−207

−232

−11

Restructuring


−17

−4

>100

TomorrowNow litigation


0

−7

<-100

Other operating income/expense, net


0

0

19

Total operating expenses


−3,003

−3,031

−1

Operating profit


1,043

921

13






Other non-operating income/expense, net


−1

−92

−99

Finance income


38

34

13

Finance costs


−45

−41

11

Financial income, net


−7

−7

1

Profit before tax


1,035

822

26






Income tax expense

(6)

−274

−204

34

Profit after tax


762

618

23

Profit attributable to non-controlling interests


0

0

N/A

Profit attributable to owners of parent


762

618

23






Earnings per share, basic (in €)*

(7)

0.64

0.52

23

Earnings per share, diluted (in €)*

(7)

0.64

0.52

23






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



F1

 

 


CONSOLIDATED INCOME STATEMENTS

For the nine months ended September 30






€ millions, unless otherwise stated

Note

2013

2012

Change

in %

Software


2,614

2,722

−4

Cloud subscriptions and support


488

144

238

Software and cloud subscriptions


3,101

2,866

8

Support


6,470

6,071

7

Software and software-related service revenue


9,571

8,937

7

Consulting


1,689

1,830

−8

Other services


448

433

3

Professional services and other service revenue


2,137

2,263

−6

Total revenue


11,708

11,200

5






Cost of software and software-related services


−1,838

−1,743

5

Cost of professional services and other services


−1,820

−1,888

−4

Total cost of revenue


−3,658

−3,631

1

Gross profit


8,050

7,569

6

Research and development


−1,676

−1,638

2

Sales and marketing


−3,021

−2,786

8

General and administration


−635

−664

−4

Restructuring


−47

−8

>100

TomorrowNow litigation


0

−1

<-100

Other operating income/expense, net


6

1

>100

Total operating expenses


−9,031

−8,727

3

Operating profit


2,677

2,473

8






Other non-operating income/expense, net


−14

−145

−91

Finance income


94

86

10

Finance costs


−138

−119

16

Financial income, net


−44

−33

33

Profit before tax


2,620

2,295

14






Income tax expense

(6)

−614

−572

7

Profit after tax


2,006

1,723

16

Profit attributable to non-controlling interests


0

0

N/A

Profit attributable to owners of parent


2,006

1,723

16






Earnings per share, basic (in €)*

(7)

1.68

1.45

16

Earnings per share, diluted (in €)*

(7)

1.68

1.45

16






* For the nine months ended September 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).

 

Due to rounding, numbers may not add up precisely.



F2

 

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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





€ millions

Notes

2013

2012

Cash and cash equivalents


3,255

2,477

Other financial assets

(8)

221

154

Trade and other receivables

(9)

3,052

3,917

Other non-financial assets


413

294

Tax assets


256

156

Total current assets


7,197

6,998

Goodwill


13,876

13,227

Intangible assets


3,108

3,234

Property, plant, and equipment


1,771

1,708

Other financial assets

(8)

524

509

Trade and other receivables

(9)

81

88

Other non-financial assets


90

68

Tax assets


192

170

Deferred tax assets


693

708

Total non-current assets


20,336

19,711

Total assets


27,534

26,710












F3

 










€ millions

Notes

2013

2012

Trade and other payables


793

870

Tax liabilities


374

511

Financial liabilities

(10)

1,748

802

Other non-financial liabilities


1,697

2,136

Provision TomorrowNow litigation


227

234

Other provisions


357

609

Provisions


584

843

Deferred income

(11)

2,235

1,386

Total current liabilities


7,431

6,547

Trade and other payables


45

63

Tax liabilities


387

388

Financial liabilities

(10)

3,799

4,446

Other non-financial liabilities


108

98

Provisions


277

361

Deferred tax liabilities


506

574

Deferred income

(11)

64

62

Total non-current liabilities


5,186

5,991

Total liabilities


12,618

12,538

Issued capital


1,229

1,229

Share premium


532

492

Retained earnings


14,973

13,973

Other components of equity


−542

−194

Treasury shares


−1,284

−1,337

Equity attributable to owners of parent


14,907

14,163

Non-controlling interests


9

8

Total equity

(12)

14,916

14,171

Equity and liabilities


27,534

26,710












F4


 



CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended September 30




€ millions

2013

2012

Profit after tax

2,006

1,723

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



Depreciation and amortization

714

622

Income tax expense

614

572

Financial income, net

44

33

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

44

18

Other adjustments for non-cash items

64

28

Decrease/increase in trade and other receivables

766

588

Decrease/increase in other assets

−180

−109

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

−856

−345

Decrease/increase in deferred income

898

820

Cash outflows due to TomorrowNow litigation

−1

−8

Interest paid

−101

−135

Interest received

50

67

Income taxes paid, net of refunds

−1,022

−817

Net cash flows from operating activities

3,040

3,057




Business combinations, net of cash and cash equivalents acquired

−1,131

−2,757

Purchase of intangible assets and property, plant, and equipment

−401

−370

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

40

30

Purchase of equity or debt instruments of other entities

−1,358

−905

Proceeds from sales of equity or debt instruments of other entities

1,311

1,517

Net cash flows from investing activities

−1,539

−2,485




Dividends paid

−1,013

−1,310

Purchase of treasury shares

0

−53

Proceeds from reissuance of treasury shares

36

83

Proceeds from issuing shares (share-based payments)

0

15

Proceeds from borrowings

1,000

1,000

Repayments of borrowings

−624

−1,313

Net cash flows from financing activities

−601

−1,578




Effect of foreign exchange rates on cash and cash equivalents

−122

−33

Net decrease/increase in cash and cash equivalents

778

−1,039

Cash and cash equivalents at the beginning of the period

2,477

4,965

Cash and cash equivalents at the end of the period

3,255

3,926









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 September 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

975

2

977

65

1,042

1,026

0

1,026

−5

−5

2

Cloud subscriptions and

support

191

5

197

13

209

63

17

80

203

146

162

Software and cloud subscriptions

1,167

7

1,174

78

1,252

1,089

17

1,106

7

6

13

Support

2,184

5

2,189

142

2,331

2,105

1

2,106

4

4

11

Software and software-related

service revenue

3,351

12

3,363

220

3,583

3,194

18

3,212

5

5

12

Consulting

553

0

553

35

588

616

0

616

−10

−10

−5

Other services

142

0

142

9

151

142

0

142

0

0

6

Professional services and other

service revenue

695

0

695

44

739

758

0

758

−8

−8

−3

Total revenue

4,045

12

4,057

264

4,321

3,952

18

3,970

2

2

9













Operating Expense Numbers












Cost of software and software-

related services

−636

92

−544



−638

106

−532

0

2


Cost of professional services and

other services

−605

34

−571



−619

43

−576

−2

−1


Total cost of revenue

−1,241

126

−1,115



−1,257

149

−1,108

−1

1


Gross profit

2,804

138

2,942



2,695

167

2,862

4

3


Research and development

−552

31

−521



−547

29

−518

1

1


Sales and marketing

−986

46

−940



−984

67

−917

0

2


General and administration

−207

21

−185



−232

44

−188

−11

−2


Restructuring

−17

17

0



−4

4

0

>100

N/A


TomorrowNow litigation

0

0

0



−7

7

0

<-100

N/A


Other operating income/expense,

net

0

0

0



0

0

0

19

19


Total operating expenses

−3,003

242

−2,761

−135

−2,896

−3,031

300

−2,731

−1

1

6













Profit Numbers












Operating profit

1,043

253

1,296

129

1,425

921

318

1,239

13

5

15

Other non-operating income/expense, net

−1

0

−1



−92

0

−92

−99

−99


Finance income

38

0

38



34

0

34

13

13


Finance costs

−45

0

−45



−41

0

−41

11

11


Financial income, net

−7

0

−7



−7

0

−7

1

1


Profit before tax

1,035

253

1,289



822

318

1,140

26

13


Income tax expense

−274

−82

−355



−204

−100

−304

34

17


Profit after tax

762

172

933



618

218

836

23

12


Profit attributable to non-controlling

interests

0

0

0



0

0

0

N/A

N/A


Profit attributable to owners of parent

762

172

933



618

218

836

23

12














Key Ratios












Operating margin (in %)

25.8


32.0


33.0

23.3


31.2

2.5pp

0.8pp

1.8pp

Effective tax rate (in %)

26.4


27.6



24.8


26.7

1.6pp

0.9pp


Earnings per share, basic (in €)*

0.64


0.78



0.52


0.70

23

11














Deferred cloud subscriptions and

support revenue (September 30)

376

6

382



169

44

213

>100

79

















































F6

 

 


For the nine months ended September 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

2,614

2

2,616

117

2,732

2,722

0

2,722

−4

−4

0

Cloud subscriptions and

support

488

60

547

18

565

144

39

183

238

198

208

Software and cloud subscriptions

3,101

62

3,163

135

3,298

2,866

40

2,905

8

9

14

Support

6,470

14

6,484

249

6,733

6,071

4

6,075

7

7

11

Software and software-related

service revenue

9,571

76

9,647

384

10,030

8,937

43

8,980

7

7

12

Consulting

1,689

0

1,689

59

1,748

1,830

0

1,830

−8

−8

−4

Other services

448

0

448

15

463

433

0

433

3

3

7

Professional services and other

service revenue

2,137

0

2,137

74

2,211

2,263

0

2,263

−6

−6

−2

Total revenue

11,708

76

11,784

458

12,242

11,200

43

11,243

5

5

9













Operating Expense Numbers












Cost of software and software-

related services

−1,838

266

−1,572



−1,743

253

−1,490

5

6


Cost of professional services and

other services

−1,820

85

−1,735



−1,888

108

−1,780

−4

−3


Total cost of revenue

−3,658

351

−3,307



−3,631

361

−3,270

1

1


Gross profit

8,050

426

8,477



7,569

404

7,973

6

6


Research and development

−1,676

69

−1,607



−1,638

97

−1,541

2

4


Sales and marketing

−3,021

142

−2,879



−2,786

177

−2,609

8

10


General and administration

−635

55

−581



−664

85

−579

−4

0


Restructuring

−47

47

0



−8

8

0

>100

N/A


TomorrowNow litigation

0

0

0



−1

1

0

<-100

N/A


Other operating income/expense,

net

6

0

6



1

0

1

>100

>100


Total operating expenses

−9,031

663

−8,368

−229

−8,597

−8,727

729

−7,998

3

5

7













Profit Numbers












Operating profit

2,677

739

3,416

229

3,645

2,473

772

3,245

8

5

12

Other non-operating income/expense,

net

−14

0

−14



−145

0

−145

−91

−91


Finance income

94

0

94



86

0

86

10

10


Finance costs

−138

0

−138



−119

1

−118

16

17


Financial income, net

−44

0

−44



−33

1

−32

33

38


Profit before tax

2,620

739

3,359



2,295

773

3,068

14

9


Income tax expense

−614

−248

−861



−572

−247

−819

7

5


Profit after tax

2,006

491

2,498



1,723

526

2,249

16

11


Profit attributable to non-controlling

interests

0

0

0



0

0

0

N/A

N/A


Profit attributable to owners of parent

2,006

491

2,498



1,723

526

2,249

16

11














Key Ratios












Operating margin (in %)

22.9


29.0


29.8

22.1


28.9

0.8pp

0.1pp

0.9pp

Effective tax rate (in %)

23.4


25.6



24.9


26.7

−1.5pp

−1.1pp


Earnings per share, basic (in €)*

1.68


2.09



1.45


1.89

16

11














Deferred cloud subscriptions and

support revenue (September 30)

376

6

382



169

44

213

>100

79














* 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

7/1 –

9/30/2013

 

1/1 –

9/30/2013

 

7/1 –

9/30/2012

 

1/1 –

9/30/2012

 






Software and software-related service revenue (IFRS)

3,351

9,571

3,194

8,937

Adjustment for deferred revenue write-down

12

76

18

43

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

3,363

9,647

3,212

8,980






Operating profit (IFRS)

1,043

2,677

921

2,473

Revenue Adjustments (per above)

12

76

18

43

Adjustment for discontinued activities

0

0

7

1

Adjustment for acquisition-related charges 

142

424

137

387

Adjustment for stock-based compensation expenses

83

192

152

333

Adjustment for restructuring

17

47

4

8

Operating expense adjustments

242

663

300

729

Operating profit adjustments

253

739

318

772

Operating profit (Non-IFRS)

1,296

3,416

1,239

3,245






Profit after tax  (IFRS)

762

2,006

618

1,723

Revenue adjustments (per above)

12

76

18

43

Operating profit expense adjustments (per above)

242

663

300

729

Adjustments pre-tax

253

739

318

773

Taxes on adjustments

−82

−248

−100

−247

Profit after tax (Non-IFRS)

933

2,498

836

2,249






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 September 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

402

1

403

8

411

374

0

374

7

8

10

Americas

398

0

398

34

432

458

0

458

−13

−13

−6

APJ

176

0

176

23

199

194

0

194

−9

−9

3

Software revenue  

975

2

977

65

1,042

1,026

0

1,026

−5

−5

2













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












EMEA

433

1

434

9

443

390

0

390

11

11

14

Americas

550

5

555

45

600

502

16

518

10

8

17

APJ

185

0

185

24

209

197

0

197

−6

−6

6

Software revenue by location of negotiation and cloud subscription revenue

1,167

7

1,174

78

1,252

1,089

17

1,106

7

6

13

















Revenues by Regions – Location

of Customers















For the three months ended September 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

422

1

423

10

433

373

0

373

13

13

16

Americas

364

1

365

32

397

459

0

459

−21

−20

−14

APJ

189

0

189

24

213

194

0

194

−3

−3

10

Software revenue  

975

2

977

65

1,042

1,026

0

1,026

−5

−5

2













Cloud subscriptions and support

revenue by region












EMEA

31

0

31

1

32

16

0

16

89

89

97

Americas

152

5

157

11

168

44

16

60

>100

>100

>100

APJ

9

0

9

1

10

3

0

3

>100

>100

>100

Cloud subscriptions and support revenue

191

5

197

13

209

63

17

80

203

146

162













Software and cloud subscription

revenue by region












EMEA

452

2

454

11

465

390

0

390

16

16

19

Americas

516

6

522

42

564

502

17

519

3

1

9

APJ

198

0

198

25

223

197

0

197

1

1

13

Software and cloud subscription

revenue

1,167

7

1,174

78

1,252

1,089

17

1,106

7

6

13































F9

 



Software and software-related

service revenue by region












Germany

470

0

470

1

471

438

0

438

7

7

7

Rest of EMEA

1,062

2

1,064

34

1,098

957

0

957

11

11

15

Total EMEA

1,531

3

1,534

34

1,568

1,395

0

1,395

10

10

12

United States

931

8

939

53

992

921

18

939

1

0

6

Rest of Americas

357

1

358

49

407

326

0

326

10

10

25

Total Americas

1,288

9

1,297

102

1,399

1,247

18

1,265

3

3

11

Japan

140

0

140

46

186

174

0

174

−20

−20

7

Rest of APJ

391

0

391

38

429

377

0

377

4

4

14

Total APJ

531

0

531

84

615

552

0

552

−4

−4

12

Software and software-related service revenue

3,351

12

3,363

220

3,583

3,194

18

3,212

5

5

12













Total revenue by region












Germany

598

0

598

0

598

575

0

575

4

4

4

Rest of EMEA

1,257

2

1,259

43

1,302

1,142

0

1,142

10

10

14

Total EMEA

1,854

3

1,857

43

1,900

1,716

0

1,716

8

8

11

United States

1,144

8

1,152

65

1,217

1,152

18

1,170

−1

−2

4

Rest of Americas

430

1

431

57

488

423

0

423

2

2

15

Total Americas

1,574

9

1,583

122

1,705

1,575

18

1,593

0

−1

7

Japan

157

0

157

52

209

197

0

197

−20

−20

6

Rest of APJ

460

0

460

47

507

463

0

463

−1

−1

10

Total APJ

617

1

618

98

716

661

0

661

−7

−7

8

Total revenue 

4,045

12

4,057

264

4,321

3,952

18

3,970

2

2

9




































F10











Revenues by Region

- Management View















For the nine months ended September 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

1,116

2

1,118

19

1,137

1,069

0

1,069

4

5

6

Americas

1,043

1

1,044

58

1,102

1,131

0

1,131

−8

−8

−3

APJ

454

0

454

40

494

522

0

522

−13

−13

−5

Software revenue  

2,614

2

2,616

117

2,732

2,722

0

2,722

−4

−4

0













Software revenue by location of

negotiation and cloud subscription

revenue by region












EMEA

1,197

2

1,199

21

1,220

1,113

0

1,113

8

8

10

Americas

1,425

60

1,485

73

1,558

1,222

40

1,262

17

18

23

APJ

479

0

479

41

520

531

0

531

−10

−10

−2

Software revenue by location of

negotiation and cloud subscription

revenue

3,101

62

3,163

135

3,298

2,866

39

2,905

8

9

14





























Revenues by Regions – Location of

Customers















For the nine months ended September 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

1,138

1

1,139

20

1,159

1,105

0

1,105

3

3

5

Americas

1,007

1

1,008

55

1,063

1,090

0

1,090

−8

−8

−2

APJ

469

0

469

41

510

527

0

527

−11

−11

−3

Software revenue  

2,614

2

2,616

117

2,732

2,722

0

2,722

−4

−4

0













Cloud subscriptions and support

revenue by region












EMEA

81

0

81

2

83

44

0

44

84

84

88

Americas

382

59

441

15

456

91

40

131

>100

>100

>100

APJ

25

0

25

1

26

9

0

9

>100

>100

>100

Cloud subscriptions and support

revenue

488

60

547

18

565

144

40

184

238

198

208













Software and cloud subscription

revenue by region












EMEA

1,219

1

1,220

23

1,243

1,149

0

1,149

6

6

8

Americas

1,389

61

1,450

70

1,520

1,181

39

1,220

18

19

25

APJ

493

0

493

43

536

536

0

536

−8

−8

0

Software and cloud subscription

revenue

3,101

62

3,163

135

3,298

2,866

39

2,905

8

9

14




































F11


 


 


Software and software-related

service revenue by region












Germany

1,324

0

1324

0

1,324

1,245

1

1,246

6

6

6

Rest of EMEA

3,052

2

3,054

67

3,121

2,845

1

2,846

7

7

10

Total EMEA

4,376

2

4,378

67

4,445

4,090

2

4,092

7

7

9

United States

2,692

71

2,763

84

2,847

2,456

41

2,497

10

11

14

Rest of Americas

1,002

1

1,003

81

1,084

872

0

872

15

15

24

Total Americas

3,693

73

3,766

164

3,930

3,328

41

3,369

11

12

17

Japan

403

0

403

101

504

489

0

489

−18

−18

3

Rest of APJ

1,100

0

1,100

51

1,151

1,030

0

1,030

7

7

12

Total APJ

1,502

0

1,502

153

1,655

1,519

0

1,519

−1

−1

9

Software and software-related

service revenue

9,571

76

9,647

384

10,030

8,937

43

8,980

7

7

12













Total revenue by region












Germany

1,714

0

1,714

0

1,714

1,666

1

1,667

3

3

3

Rest of EMEA

3,642

2

3,644

83

3,727

3,433

1

3,434

6

6

9

Total EMEA

5,356

3

5,359

82

5,441

5,099

2

5,101

5

5

7

United States

3,353

71

3,424

102

3,526

3,151

41

3,192

6

7

10

Rest of Americas

1,226

1

1,227

97

1,324

1,138

0

1,138

8

8

16

Total Americas

4,579

72

4,651

199

4,850

4,289

41

4,330

7

7

12

Japan

453

0

453

114

567

557

0

557

−19

−19

2

Rest of APJ

1,320

0

1,320

64

1,384

1,254

0

1,254

5

5

10

Total APJ

1,774

0

1,774

177

1,951

1,812

0

1,812

−2

−2

8

Total revenue 

11,708

76

11,784

458

12,242

11,200

43

11,243

5

5

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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