SAP Reports Best Ever Results - Full-Year 2011 Software Revenue Increases 25% at Constant Currencies to EUR 4 Billion - Non-IFRS Operating Profit EUR 4.8 Billion at Constant Currencies - Best Ever Software Revenue Performance: Full-Year 2011 Software Revenue Increases 22% to EUR 3.97 Billion (25% at Constant Currencies)

- Exceeding Revenue Guidance: Full-Year 2011 Non-IFRS Software and Software-Related Service Revenue Increases 15% (17% at Constant Currencies)

- Exceeding Operating Profit Guidance: Full-Year 2011 Non-IFRS Operating Profit EUR 4.71 Billion (EUR 4.78 Billion at Constant Currencies), Resulting in Full-Year 2011 Non-IFRS Operating Margin Increasing by 1.1 Percentage Points at Constant Currencies to 33.1%

- Double-Digit Earnings Per Share Growth: 23% Increase in Full-Year 2011 Non-IFRS Earnings Per Share

- Record Operating Cash Flow: 29% Increase to EUR 3.78 Billion

- Strong Contribution From Innovations: SAP HANA and Mobile EUR 270 Million

WALLDORF, Germany, Jan. 25, 2012 /PRNewswire/ -- SAP AG (NYSE: SAP) today announced its preliminary financial results for the fourth quarter and full-year ended December 31, 2011.

(Logo:  http://photos.prnewswire.com/prnh/20110126/AQ34470LOGO )

"SAP performed exceptionally well in 2011 clearly exceeding its guidance for revenue and profit. This record performance was driven by strong top line results with double-digit software revenue growth in all regions, resulting in year over year total revenue growth of EUR 1.7 billion and a record cash flow," said Werner Brandt, CFO of SAP. "We are well positioned to exceed our EUR 20 billion revenue target and reach a 35% operating margin in 2015."

"In an uncertain environment, we had the best year in our 40 year history and clearly outperformed the competition. We extended our leadership in enterprise applications, analytics and mobile and are reinventing the database and cloud markets," said Bill McDermott and Jim Hagemann Snabe, co-CEOs of SAP. "We have significant momentum going into 2012, as our customers continue to benefit from faster innovation, easier adoption and our unmatched industry expertise."

FINANCIAL RESULTS IN DETAIL

FINANCIAL HIGHLIGHTS – Fourth Quarter 2011



Fourth Quarter 2011(1)


IFRS

Non-IFRS(2)

EUR million, unless otherwise stated

Q4 2011

Q4 2010

%
change

Q4 2011

Q4 2010

%
change

% change
const.
curr.(3)









Software revenue

1,744

1,507

16

1,744

1,507

16

17

Support revenue

1,874

1,654

13

1,875

1,692

11

11

Software and software-related service revenue

3,720

3,273

14

3,721

3,311

12

13

Total revenue

4,498

4,058

11

4,499

4,096

10

10

Total operating expenses

−2,832

−3,514

−19

−2,718

−2,474

10

10

- thereof TomorrowNow litigation

6

−934

<-100

N/A

N/A

N/A

N/A

Operating profit

1,666

544

206

1,781

1,622

10

10

Operating margin (%)

37.0

13.4

23.6pp

39.6

39.6

0

0.1pp

Profit after tax

1,199

434

176

1,281

1,109

16


Basic earnings per share (EUR)

1.01

0.37

173

1.08

0.93

16


Number of employees (FTE)

55,765

53,513

4

N/A

N/A

N/A

N/A


(1) All figures are preliminary and unaudited.

(2) Adjustments in the revenue line items are for the support revenue that would have been recognized had the acquired entities 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 and discontinued activities.  

(3) Constant currency revenue and operating profit 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.



Revenue – Fourth Quarter 2011

  • IFRS software revenue was EUR 1.74 billion (2010: EUR 1.51 billion), an increase of 16% (17% at constant currencies).
  • IFRS software and software-related service revenue was EUR 3.72 billion (2010: EUR 3.27 billion), an increase of 14%. Non-IFRS software and software-related service revenue was EUR 3.72 billion (2010: EUR 3.31 billion), an increase of 12% (13% at constant currencies).
  • IFRS total revenue was EUR 4.50 billion (2010: EUR 4.06 billion), an increase of 11%. Non-IFRS total revenue was EUR 4.50 billion (2010: EUR 4.10 billion), an increase of 10% (10% at constant currencies).

Fourth Quarter 2011 non-IFRS software and software-related service revenue and total revenue exclude a deferred support revenue write-down from acquisitions of EUR 1 million (2010: EUR 38 million).

Profit – Fourth Quarter 2011

  • IFRS operating profit was EUR 1.67 billion (2010: EUR 544 million), an increase of 206%. Non-IFRS operating profit was EUR 1.78 billion (2010: EUR 1.62 billion), an increase of 10% (10% at constant currencies).
  • IFRS operating margin was 37.0% (2010: 13.4%), an increase of 23.6 percentage points. Non-IFRS operating margin was 39.6% (2010: 39.6%), or 39.7% at constant currencies, an increase of 0.1 percentage points at constant currencies.
  • IFRS profit after tax was EUR 1.20 billion (2010: EUR 434 million), an increase of 176%. Non-IFRS profit after tax was EUR 1.28 billion (2010: EUR 1.11 billion), an increase of 16%. IFRS basic earnings per share was EUR 1.01 (2010: EUR 0.37), an increase of 173%. Non-IFRS basic earnings per share was EUR 1.08 (2010: EUR 0.93), an increase of 16%.
  • The IFRS and non-IFRS effective tax rates in the fourth quarter of 2011 were 25.9% (2010: 4.0%) and 26.1% (2010: 27.5%), respectively.
  • Fourth quarter 2011 operating profit and operating margin were impacted by SAP's continued investments in go-to-market activities intended to capture future growth opportunities, resulting in a sequential increase in headcount in sales and marketing by almost 500 full-time-equivalents (FTEs). Total headcount for the Group grew in the fourth quarter by almost 1,200 FTEs compared to the previous quarter.
  • Fourth quarter 2010 IFRS operating profit and operating margin were negatively impacted by the provision for the TomorrowNow litigation while there was no such effect on SAP's non-IFRS operating profit and operating margin.

Fourth Quarter 2011 non-IFRS operating profit excludes a deferred support revenue write-down from acquisitions of EUR 1 million, acquisition-related charges of EUR 115 million, profit from discontinued activities of EUR 6 million, share-based compensation expenses of EUR 3 million and restructuring expenses of EUR 2 million (2010: EUR 38 million, EUR 99 million, expenses of EUR 935 million, EUR 9 million and -EUR 2 million). Fourth Quarter 2011 non-IFRS profit after tax and non-IFRS basic earnings per share exclude a deferred support revenue write-down from acquisitions of EUR 1 million, acquisition-related charges of EUR 78 million, profit from discontinued activities of EUR 2 million, share-based compensation expenses of EUR 4 million and restructuring expenses of EUR 1 million (2010: EUR 25 million, EUR 70 million, expenses of EUR 575 million, EUR 6 million and -EUR 1 million) net of tax.

FINANCIAL HIGHLIGHTS – Full-Year 2011



Full-Year 2011(1)


IFRS

Non-IFRS(2)

EUR million, unless otherwise stated

FY 2011

FY 2010

%
change

FY 2011

FY 2010

%
change

% change
const.
curr.(3)









Software revenue

3,970

3,265

22

3,970

3,265

22

25

Support revenue

6,967

6,133

14

6,994

6,207

13

14

Software and software-related service revenue

11,318

9,794

16

11,345

9,868

15

17

Total revenue

14,232

12,464

14

14,259

12,538

14

15

Total operating expenses

−9,353

−9,873

−5

−9,549

−8,531

12

13

- thereof TomorrowNow litigation

717

−981

<-100

N/A

N/A

N/A

N/A

Operating profit

4,879

2,591

88

4,710

4,007

18

19

Operating margin (%)

34.3

20.8

13.5pp

33.0

32.0

1.0pp

1.1pp

Profit after tax

3,441

1,813

90

3,371

2,738

23


Basic earnings per share (EUR)

2.89

1.52

90

2.83

2.30

23


Number of employees (FTE)

55,765

53,513

4

N/A

N/A

N/A

N/A


(1) All figures are preliminary and unaudited.

(2) Adjustments in the revenue line items are for the support revenue that would have been recognized had the acquired entities 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 and discontinued activities.

(3) Constant currency revenue and operating profit 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.



Revenue – Full-Year 2011

  • IFRS software revenue was EUR 3.97 billion (2010: EUR 3.27 billion), an increase of 22% (25% at constant currencies).
  • IFRS software and software-related service revenue was EUR 11.32 billion (2010: EUR 9.79 billion), an increase of 16%. Non-IFRS software and software-related service revenue was EUR 11.35 billion (2010: EUR 9.87 billion), an increase of 15% (17% at constant currencies).
  • IFRS total revenue was EUR 14.23 billion (2010: EUR 12.46 billion), an increase of 14%. Non-IFRS total revenue was EUR 14.26 billion (2010: EUR 12.54 billion), an increase of 14% (15% at constant currencies).

Full-Year 2011 Non-IFRS software and software-related service revenue as well as total revenue exclude a deferred support revenue write-down from acquisitions of EUR 27 million (2010: EUR 74 million).

Profit – Full-Year 2011

  • IFRS operating profit was EUR 4.88 billion (2010: EUR 2.59 billion), an increase of 88%. Non-IFRS operating profit was EUR 4.71 billion (2010: EUR 4.01 billion), an increase of 18% (19% at constant currencies).
  • IFRS operating margin was 34.3% (2010: 20.8%), an increase of 13.5 percentage points. Non-IFRS operating margin was 33.0% (2010: 32.0%), or 33.1% at constant currencies, an increase of 1.0 percentage points (1.1 percentage points at constant currencies).
  • IFRS profit after tax was EUR 3.44 billion (2010: EUR 1.81 billion), an increase of 90%. Non-IFRS profit after tax was EUR 3.37 billion (2010: EUR 2.74 billion), an increase of 23%. IFRS basic earnings per share was EUR 2.89 (2010: EUR 1.52), an increase of 90%. Non-IFRS basic earnings per share was EUR 2.83 (2010: EUR 2.30), an increase of 23%.
  • Full year 2011 IFRS operating profit and operating margin numbers were favorably impacted by the re-measurement of the TomorrowNow litigation provision while full year 2010 IFRS operating profit and operating margin were negatively impacted by the TomorrowNow litigation provision. The provision in 2010 as well as the re-measurement in 2011 did not affect SAP's non-IFRS operating profit and operating margin results.
  • The IFRS and non-IFRS effective tax rates in the first twelve months 2011 were 27.8% (2010: 22.5%) and 26.5% (2010: 27.2%), respectively.
  • The main reason for the significant year over year difference is the change in the measurement of the TomorrowNow litigation provision. While 2010 saw a tax rate reduction of almost 5 percentage points as a result of the significant increase of the TomorrowNow litigation provision, 2011 experienced the tax rate increase resulting from the reduction of the same provision. However, this increase was offset by tax effects related to intercompany financing.
  • The 2011 effective tax rate based on Non-IFRS profit was 26.5% and thus below the respective rate in 2010 (27.2%). The main reasons for the decrease were tax effects related to intercompany financing.

Full-Year 2011 non-IFRS operating profit excludes a deferred support revenue write-down from acquisitions of EUR 27 million, acquisition-related charges of EUR 448 million, profit from discontinued activities of EUR 717 million, share-based compensation expenses of EUR 69 million and restructuring expenses of EUR 4 million (2010: EUR 74 million, EUR 304 million, expenses of EUR 983 million, EUR 58 million and -EUR 3 million). Full-Year 2011 non-IFRS profit after tax and non-IFRS basic earnings per share exclude a deferred support revenue write-down from acquisitions of EUR 18 million, acquisition-related charges of EUR 303 million, profit from discontinued activities of EUR 444 million, share-based compensation expenses of EUR 51 million and restructuring expenses of EUR 2 million (2010: EUR 50 million, EUR 221 million, expenses of EUR 613 million, EUR 42 million and -EUR 1 million) net of tax.

Cash Flow – Full-Year 2011

Operating cash flow was EUR 3.78 billion (2010: EUR 2.92 billion), an increase of 29%. Free cash flow was EUR 3.33 billion (2010: EUR 2.59 billion), an increase of 29%. Free cash flow was 23% of total revenue (2010: 21%). At December 31, 2011, SAP had a total group liquidity of EUR 5.60 billion (December 31, 2010: EUR 3.53 billion), which includes cash and cash equivalents and short term investments. Net liquidity at December 31, 2011 was EUR 1.64 billion compared to -EUR 850 million at December 31, 2010. This increase in net liquidity was mainly due to the increased operating cash flow in the fiscal year 2011.

SuccessFactors

On December 3, 2011, SAP entered into a merger agreement with SuccessFactors, Inc., the market-leading provider of cloud-based human capital management solutions. A successful closing of the acquisition will add SuccessFactors' team and technology to SAP's powerful cloud assets, significantly accelerating SAP's momentum as a provider of cloud applications, platforms and infrastructure. Currently, we expect the acquisition to close in the first quarter of 2012.

Change in Income Statement Presentation

In light of SAP's strong focus on the cloud market, SAP intends to realign, for periods starting on or after January 1, 2012, its income statement to provide additional transparency on cloud-related revenue streams and revenues from multi-year licensing arrangements (formerly known as software subscriptions):

  • 'Cloud subscriptions and support' will no longer be included in the line item 'Subscription and other software-related service revenue' but will be presented as a separate line item within 'Software and software-related service revenue'
  • Revenues from multi-year licensing arrangements and all other revenues so far included in the 'Subscription and other software-related service revenue' line item will be split into their software portion and support portion with these portions being allocated to the 'Software revenue' and 'Support revenue' line items respectively.

This reclassification only affects sub items of 'Software and software-related service revenue'. The total of 'Software and software-related service revenue' and consequently total revenue as well as profit numbers and operating margin figures will not be affected by this change. The financial section of this press release also includes the preliminary full year 2011 income statement and the reconciliations from non-IFRS numbers to IFRS numbers under the new format.

In addition, for periods starting on or after January 1, 2012, SAP has modified the definition of its non-IFRS revenue and profit measures. See the section below called Adjustment to Definition of Non-IFRS Revenue and Profit Measures for additional details.

Business Outlook

Based on the expectation of a successful closing of the SuccessFactors acquisition in the first quarter of 2012, SAP is providing the following outlook for the full-year 2012:

  • The Company expects full-year 2012 non-IFRS software and software-related service revenue to increase in a range of 10% – 12% at constant currencies (2011: EUR 11.35 billion). This includes a contribution of up to 2 percentage points from SuccessFactors' business.
  • The Company expects full-year 2012 non-IFRS operating profit to be in a range of EUR 5.05 billionEUR 5.25 billion at constant currencies (2011: EUR 4.71 billion). Full-year 2012 non-IFRS operating profit excluding SuccessFactors is expected to be in a similar range.
  • The Company projects a full-year 2012 IFRS effective tax rate of 26.5% – 27.5% (2011: 27.8%) and a non-IFRS effective tax rate of 27.0% – 28.0% (2011: 26.5%).

Major Customer Wins

In the fourth quarter of 2011, SAP closed major contracts in key regions:

EMEA

Deutsche Lufthansa AG, Bundesrechenzentrum GmbH, Lidl, Clariant International Ltd., FIAT, Vodafone

Americas

U.S. Department of Agriculture, ConAgra Foods, Inc., Ace Hardware Corporation, Delta Air Lines, Inc., Banco de Galicia y Buenos Aires S.A., Petroleos Mexicanos

Asia Pacific/Japan

Yonghui Superstores Co. Ltd., Tingyi Holding Corporation, Department of Finance and Deregulation, Usha International Ltd., Powercor, Sharp Corporation

HANA

Gonhermex, S.A. de C.V., Grupo Gonher, Schukat electronic Vertriebs GmbH, EBY-Brown Company LLC, Newell Rubbermaid, Inc., Coinstar, Inc., T-Mobile USA, Inc.

SAP Business ByDesign

EC Bioenergie GmbH, DESANO Pharmacy, Innogence Limited, Matchcode, metaio, Schaltbau Holding AG, Schukat electronic Vertriebs GmbH

Adjustment to Definition of Non-IFRS Revenue and Profit Measures

In light of SAP's strong focus on the cloud market and considering the planned acquisition of SuccessFactors, SAP widens the range of revenues for which acquisition-related deferred revenue write-downs are adjusted in determining SAP's non-IFRS revenue and profit numbers. SAP continues to adjust for deferred revenue write-downs, i.e. for revenues that would have been recognized had the acquired entities remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules. However, in the definitions of SAP's non-IFRS measures used through 2011, such adjustments for deferred revenue write downs were limited to support revenues. From 2012 onwards, SAP will additionally make such deferred revenue write -down adjustments for cloud subscription revenues and other similarly recurring revenues.

All other non-IFRS measures will remain unchanged. Since the deferred revenue write-down adjustments for recurring revenues other than support revenue from acquisitions that were executed through 2011 were immaterial, SAP does not restate prior period non-IFRS measures to align with the new definition.

For a more detailed description of all of SAP's non-IFRS adjustments and their limitations as well as our constant currency and free cash flow figures see Explanations of Non-IFRS Measures online (www.sap.com/investor).

Additional Information

Fourth Quarter and year-to-date 2011 revenue, profit and cash flow figures include the revenue, profits and cash flows from Sybase. For the prior-year periods those numbers were only included since the acquisition (July 26, 2010).

In 2011, SAP re-measured the provision recorded for the TomorrowNow litigation following the motion granted by the judge on the original jury verdict. The judge's decision vacated the original verdict of $1.3 billion, but gave Oracle the choice of accepting $272 million or seeking a new trial. The deadline for Oracle to make that choice depended on the outcome and timing of a ruling on Oracle's motion for an early appeal. The early appeal was denied on January 6, 2012, and Oracle now has the choice to accept the reduced damages of $272 million or seek a new trial to determine damages.

The re-measurement of the provision additionally reflects currency exchange rate changes and changes in the estimate of related legal expenses. While the resulting re-measurement of the TomorrowNow litigation provision favorably impacted SAP's fiscal year 2011 IFRS operating profit and operating margin it did not have an effect on SAP's fiscal year 2011 non-IFRS operating profit and operating margin.

2011 Annual Report

SAP's 2011 Annual Report to Shareholders and 2011 Annual Report on Form 20-F are scheduled to be published on March 23, 2012, and will be available for download at www.sap.com/investor.

Webcast

SAP senior management will host a press conference in Frankfurt 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.

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 183,000 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.

© 2012 SAP AG. All rights reserved.

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Appendix – Financial Information to Follow


FINANCIAL INFORMATION

FOR THE FOURTH QUARTER 2011

(Condensed and Unaudited)








Page





Financial Statements (IFRS)


Income Statements – Quarter    


F1


Income Statements – Twelve Months  


F2


Statements of Financial Position  


F3


Statements of Cash Flows


F5


Supplementary Financial Information


Reconciliations from Non-IFRS Numbers to IFRS Numbers                    


F6 to F7


Revenue by Region                                                        


F8 to F9


New Income Statement Format–Consolidated Income Statements                


F10


New Income Statement Format–Reconciliations from Non-IFRS Numbers to IFRS Numbers  


F11



Financial Statements (IFRS)


CONSOLIDATED INCOME STATEMENT

for the three months ended December 31

(Preliminary and Unaudited)


EUR millions, unless otherwise stated

2011

2010

Change

in %

Software revenue

1,744

1,507

16

Support revenue

1,874

1,654

13

Subscription and other software-related service revenue

102

112

−9

Software and software-related service revenue

3,720

3,273

14

Consulting revenue

615

625

−2

Other service revenue

163

160

2

Professional services and other service revenue

778

785

−1

Total revenue

4,498

4,058

11





Cost of software and software-related services

−607

−541

12

Cost of professional services and other services

−560

−593

−6

Research and development

−537

−487

10

Sales and marketing

−940

−788

19

General and administration

−203

−175

16

Restructuring

−2

2

<-100

TomorrowNow litigation

6

−934

<-100

Other operating income/expense, net

11

2

>100

Total operating expenses

−2,832

−3,514

−19

Operating profit

1,666

544

206





Other non-operating income/expense, net

−45

−50

−10

Finance income

46

21

>100

Finance Cost TomorrowNow litigation

1

−12

<-100

Other finance costs

−49

−51

−4

Finance costs

−48

−63

−24

Financial income, net

−2

−42

−95

Profit before tax

1,619

452

258





Income tax TomorrowNow litigation

−5

359

<-100

Other income tax expense

−415

−377

10

Income tax expense

−420

−18

2,233

Profit after tax

1,199

434

176

Profit attributable to non-controlling interests

0

0

0

Profit attributable to owners of parent

1,199

434

176





Basic earnings per share, in EUR*

1.01

0.37

173

Diluted earnings per share, in EUR*

1.01

0.37

173





*  for the three months ended December 31, 2011 and 2010 the weighted average number of shares were 1,190 million (Diluted: 1,190 million) and 1,188 million (Diluted: 1,188 million), respectively (treasury stock excluded).



CONSOLIDATED INCOME STATEMENT

for the twelve months ended December 31

(Preliminary and Unaudited)


EUR millions, unless otherwise stated

2011

2010

Change

in %

Software revenue

3,970

3,265

22

Support revenue

6,967

6,133

14

Subscription and other software-related service revenue

381

396

−4

Software and software-related service revenue

11,318

9,794

16

Consulting revenue

2,341

2,197

7

Other service revenue

573

473

21

Professional services and other service revenue

2,914

2,670

9

Total revenue

14,232

12,464

14





Cost of software and software-related services

−2,111

−1,823

16

Cost of professional services and other services

−2,232

−2,071

8

Research and development

−1,939

−1,729

12

Sales and marketing

−3,080

−2,645

16

General and administration

−718

−636

13

Restructuring

−4

3

<-100

TomorrowNow litigation

717

−981

<-100

Other operating income/expense, net

14

9

56

Total operating expenses

−9,353

−9,873

−5

Operating profit

4,879

2,591

88





Other non-operating income/expense, net

−79

−186

−58

Finance income

123

73

68

Finance costs TomorrowNow litigation

8

−12

<-100

Other finance costs

−168

−128

31

Finance costs

−160

−140

14

Financial income, net

−37

−67

−45

Profit before tax

4,763

2,338

104





Income tax TomorrowNow litigation

−281

377

<-100

Other income tax expense

−1,041

−902

15

Income tax expense

−1,322

−525

152

Profit after tax

3,441

1,813

90

Profit attributable to non-controlling interests

1

2

−50

Profit attributable to owners of parent

3,440

1,811

90





Basic earnings per share, in EUR*

2.89

1.52

90

Diluted earnings per share, in EUR*

2.89

1.52

90


*  for the twelve months ended December 31, 2011 and 2010 the weighted average number of shares were 1,189 million (Diluted: 1,190 million) and 1,188 million (Diluted: 1,189 million), respectively (treasury stock excluded).



CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

as at December 31, 2011 and December 31, 2010

(Preliminary and Unaudited)



EUR millions

2011

2010

Cash and cash equivalents

4,965

3,518

Other financial assets

816

158

Trade and other receivables

3,494

3,099

Other non-financial assets

205

181

Tax assets

214

187

Total current assets

9,694

7,143




Goodwill

8,709

8,428

Intangible assets

2,024

2,376

Property, plant, and equipment

1,551

1,449

Other financial assets

538

475

Trade and other receivables

84

78

Other non-financial assets

39

31

Tax assets

146

122

Deferred tax assets

466

737

Total non-current assets

13,557

13,696

Total assets

23,251

20,839




EUR millions

2011

2010

Trade and other payables

979

923

Tax liabilities

379

164

Financial liabilities

1,331

142

Other non-financial liabilities

1,994

1,726

Provision TomorrowNow litigation

231

997

Other provisions

315

290

Provisions

546

1,287

Deferred income

1,048

911

Total current liabilities

6,277

5,153




Trade and other payables

43

30

Tax liabilities

410

369

Financial liabilities

2,925

4,449

Other non-financial liabilities

91

85

Provisions

273

292

Deferred tax liabilities

477

574

Deferred income

44

63

Total non-current liabilities

4,263

5,862

Total liabilities

10,540

11,015




Issued capital

1,228

1,227

Share premium

421

337

Retained earnings

12,468

9,767

Other components of equity

−37

−142

Treasury shares

−1,377

−1,382

Equity attributable to owners of parent

12,703

9,807




Non-controlling interests

8

17

Total equity

12,711

9,824

Equity and liabilities

23,251

20,839



CONSOLIDATED STATEMENTS OF CASH FLOWS

for the twelve months ended December 31

(Preliminary and Unaudited)


EUR millions

2011

2010

Profit after tax

3,441

1,813

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



Depreciation and amortization

724

534

Income tax expense

1,322

525

Financial income, net

37

67

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

−18

−49

Other adjustments for non-cash items

17

29

Decrease/increase in trade receivables

−428

−123

Decrease/increase in other assets

−76

−122

Decrease/increase in trade payables, provisions and other liabilities

−335

1,116

Decrease/increase in deferred income

124

66

Cash outflows due to TomorrowNow litigation

−53

−102

Interest paid

−139

−66

Interest received

92

52

Income taxes paid, net of refunds

−932

−818

Net cash flows from operating activities

3,776

2,922




Business combinations, net of cash and cash equivalents acquired

−188

−4,194

Purchase of intangible assets and property, plant and equipment

−445

−334

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

55

44

Purchase of equity or debt instruments of other entities

−2,045

−842

Proceeds from sales of equity or debt instruments of other entities

1,398

1,332

Net cash flows from investing activities

−1,225

−3,994




Purchase of non-controlling interests

−28

0

Dividends paid

−713

−594

Purchase of treasury shares

−246

−220

Proceeds from reissuance of treasury shares

252

127

Proceeds from issuing shares (share-based compensation)

46

23

Proceeds from borrowings

519

5,380

Repayments of borrowings

−1,005

−2,196

Net cash flows from financing activities

−1,175

2,520




Effect of foreign exchange rates on cash and cash equivalents

71

186

Net decrease/increase in cash and cash equivalents

1,447

1,634

Cash and cash equivalents at the beginning of the period

3,518

1,884

Cash and cash equivalents at the end of the period

4,965

3,518





Supplementary Financial Information

RECONCILIATIONS FROM NON-IFRS NUMBERS TO IFRS NUMBERS

(Preliminary and Unaudited)


The following table presents 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.



Three months ended December 31

EUR millions, unless otherwise stated

2011

2010

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 revenue

1,744

0

1,744

17

1,761

1,507

0

1,507

16

16

17

Support revenue

1,874

1

1,875

−3

1,872

1,654

38

1,692

13

11

11

Subscription and other software-related service revenue

102

0

102

−1

101

112

0

112

−9

−9

−10

Software and software-related service revenue

3,720

1

3,721

13

3,734

3,273

38

3,311

14

12

13

Consulting revenue

615

0

615

1

616

625

0

625

−2

−2

−1

Other service revenue

163

0

163

1

164

160

0

160

2

2

3

Professional services and other service revenue

778

0

778

2

780

785

0

785

−1

−1

−1

Total revenue

4,498

1

4,499

15

4,514

4,058

38

4,096

11

10

10













Operating Expense Numbers












Cost of software and software-related

services

−607

69

−538



−541

64

−477

12

13


Cost of professional services and other

services

−560

5

−555



−593

5

−588

−6

−6


Research and development

−537

5

−532



−487

0

−487

10

9


Sales and marketing

−940

32

−908



−788

34

−754

19

20


General and administration

−203

7

−196



−175

5

−170

16

15


Restructuring

−2

2

0



2

−2

0

<-100

0


TomorrowNow litigation

6

−6

0



−934

934

0

<-100

0


Other operating income/expense, net

11

0

11



2

0

2

>100

>100


Total operating expenses

−2,832

114

−2,718

−5

−2,723

−3,514

1,041

−2,474

−19

10

10













Profit Numbers












Operating profit

1,666

115

1,781

10

1,791

544

1,079

1,622

206

10

10

Other non-operating income/expense, net

−45

0

−45



−50

−14

−64

−10

−30


Finance income

46

0

46



21

0

21

>100

>100


Finance Cost TomorrowNow litigation

1

−1

0



−12

12

0

<-100

0


Other finance costs

−49

0

−49



−51

0

−51

−4

−4


Finance costs

−48

−1

−49



−63

12

−51

−24

−4


Financial income, net

−2

−1

−3



−42

12

−30

−95

−90


Profit before tax

1,619

114

1,733



452

1,077

1,529

258

13


Income tax TomorrowNow litigation

−5

5

0



359

−359

0

<-100

0


Other income tax expense

−415

−37

−452



−377

−43

−420

10

8


Income tax expense

−420

−32

−452



−18

−402

−420

2,233

8


Profit after tax

1,199

82

1,281



434

675

1,109

176

16


Profit attributable to non-controlling interests

0

0

0



0

0

0

0

0


Profit attributable to owners of parent

1,199

82

1,281



434

675

1,109

176

16














Key Ratios












Operating margin in %

37.0


39.6


39.7

13.4


39.6

23.6pp

0

0.1pp

Effective tax rate in %

25.9


26.1



4.0


27.5

21.9pp

−1.4pp


Basic earnings per share, in EUR*

1.01


1.08



0.37


0.93

173

16





Twelve months ended December 31

EUR millions, unless otherwise stated

2011

2010

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 revenue

3,970

0

3,970

96

4,066

3,265

0

3,265

22

22

25

Support revenue

6,967

27

6,994

58

7,052

6,133

74

6,207

14

13

14

Subscription and other software-related service revenue

381

0

381

−1

380

396

0

396

−4

−4

−4

Software and software-related service revenue

11,318

27

11,345

153

11,498

9,794

74

9,868

16

15

17

Consulting revenue

2,341

0

2,341

35

2,376

2,197

0

2,197

7

7

8

Other service revenue

573

0

573

8

581

473

0

473

21

21

23

Professional services and other service revenue

2,914

0

2,914

43

2,957

2,670

0

2,670

9

9

11

Total revenue

14,232

27

14,259

196

14,455

12,464

74

12,538

14

14

15













Operating Expense Numbers












Cost of software and software-related

services

−2,111

285

−1,826



−1,823

202

−1,621

16

13


Cost of professional services and other

services

−2,232

33

−2,199



−2,071

18

−2,053

8

7


Research and development

−1,939

41

−1,898



−1,729

23

−1,706

12

11


Sales and marketing

−3,080

127

−2,953



−2,645

95

−2,550

16

16


General and administration

−718

31

−687



−636

26

−610

13

13


Restructuring

−4

4

0



3

−3

0

<-100

0


TomorrowNow litigation

717

−717

0



−981

981

0

<-100

0


Other operating income/expense, net

14

0

14



9

0

9

56

56


Total operating expenses

−9,353

−196

−9,549

−128

−9,677

−9,873

1,342

−8,531

−5

12

13













Profit Numbers












Operating profit

4,879

−169

4,710

68

4,778

2,591

1,416

4,007

88

18

19

Other non-operating income/expense, net

−79

0

−79



−186

−4

−190

−58

−58


Finance income

123

0

123



73

0

73

68

68


Finance costs TomorrowNow litigation

8

−8

0



−12

12

0

<-100

0


Other finance costs

−168

0

−168



−128

0

−128

31

31


Finance costs

−160

−8

−168



−140

12

−128

14

31


Financial income, net

−37

−8

−45



−67

12

−55

−45

−18


Profit before tax

4,763

−177

4,586



2,338

1,424

3,762

104

22


Income tax TomorrowNow litigation

−281

281

0



377

−377

0

<-100

0


Other income tax expense

−1,041

−174

−1,215



−902

−122

−1,024

15

19


Income tax expense

−1,322

107

−1,215



−525

−499

−1,024

152

19


Profit after tax

3,441

−70

3,371



1,813

925

2,738

90

23


Profit attributable to non-controlling interests

1

0

1



2

0

2

−50

−50


Profit attributable to owners of parent

3,440

−70

3,370



1,811

925

2,736

90

23














Key Ratios












Operating margin in %

34.3


33.0


33.1

20.8


32.0

13.5pp

1.0pp

1.1pp

Effective tax rate in %

27.8


26.5



22.5


27.2

5.3pp

−0.7pp


Basic earnings per share, in EUR*

2.89


2.83



1.52


2.30

90

23














* Adjustments in the revenue line items are for support revenue 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 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.


Differences may exist due to rounding.



REVENUE BY REGION

(Preliminary and Unaudited)


The following table presents our IFRS and non-IFRS revenue by region based on customer location. 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.



Three months ended December 31

EUR millions

2011

2010

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

844

0

844

7

851

724

0

724

17

17

18

Americas

612

0

612

10

622

553

0

553

11

11

12

Asia Pacific Japan

288

0

288

1

289

230

0

230

25

25

26

Software revenue  

1,744

0

1,744

17

1,761

1,507

0

1,507

16

16

17













Software and software-related service revenue

by region












Germany

577

0

577

0

577

524

0

524

10

10

10

Rest of EMEA

1,260

0

1,260

9

1,269

1,122

11

1,133

12

11

12

Total EMEA

1,837

0

1,837

9

1,846

1,646

11

1,657

12

11

11

United States

895

0

895

−5

890

804

21

825

11

8

8

Rest of Americas

379

0

379

18

397

331

3

334

15

13

19

Total Americas

1,274

1

1,275

12

1,287

1,135

24

1,159

12

10

11

Japan

182

0

182

−13

169

133

2

135

37

35

25

Rest of Asia Pacific Japan

428

0

428

4

432

358

2

360

20

19

20

Total Asia Pacific Japan

609

0

609

−8

601

492

3

495

24

23

21

Software and software-related service revenue

3,720

1

3,721

13

3,734

3,273

38

3,311

14

12

13













Total revenue by region












Germany

728

0

728

1

729

724

0

724

1

1

1

Rest of EMEA

1,501

0

1,501

11

1,512

1,350

11

1,361

11

10

11

Total EMEA

2,230

0

2,230

10

2,240

2,074

11

2,085

8

7

7

United States

1,108

0

1,108

−7

1,101

1,012

21

1,033

9

7

7

Rest of Americas

462

0

462

20

482

402

3

405

15

14

19

Total Americas

1,569

1

1,570

13

1,583

1,414

24

1,438

11

9

10

Japan

202

0

202

−14

188

153

2

155

32

30

21

Rest of Asia Pacific Japan

497

0

497

5

502

418

2

420

19

18

20

Total Asia Pacific Japan

699

0

699

−9

690

571

3

574

22

22

20

Total revenue  

4,498

1

4,499

15

4,514

4,058

38

4,096

11

10

10




Twelve months ended December 31

EUR millions

2011

2010

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

1,773

0

1,773

14

1,787

1,471

0

1,471

21

21

21

Americas

1,482

0

1,482

75

1,557

1,247

0

1,247

19

19

25

Asia Pacific Japan

714

0

714

8

722

547

0

547

31

31

32

Software revenue  

3,970

0

3,970

96

4,066

3,265

0

3,265

22

22

25













Software and software-related service revenue

by region












Germany

1,725

0

1,725

0

1,725

1,564

0

1,564

10

10

10

Rest of EMEA

3,804

8

3,812

−5

3,807

3,319

20

3,339

15

14

14

Total EMEA

5,528

8

5,536

−4

5,532

4,883

20

4,903

13

13

13

United States

2,870

15

2,885

146

3,031

2,497

42

2,539

15

14

19

Rest of Americas

1,088

2

1,090

31

1,121

930

5

935

17

17

20

Total Americas

3,958

17

3,975

178

4,153

3,427

47

3,474

15

14

20

Japan

579

1

580

−24

556

448

3

451

29

29

23

Rest of Asia Pacific Japan

1,253

1

1,254

4

1,258

1,036

4

1,040

21

21

21

Total Asia Pacific Japan

1,832

2

1,834

−21

1,813

1,484

7

1,491

23

23

22

Software and software-related service revenue

11,318

27

11,345

153

11,498

9,794

74

9,868

16

15

17













Total revenue by region












Germany

2,346

0

2,346

0

2,346

2,195

0

2,195

7

7

7

Rest of EMEA

4,644

8

4,652

−5

4,647

4,068

20

4,089

14

14

14

Total EMEA

6,990

8

6,998

−6

6,992

6,263

20

6,283

12

11

11

United States

3,699

15

3,714

189

3,903

3,243

42

3,286

14

13

19

Rest of Americas

1,392

2

1,394

37

1,431

1,192

5

1,197

17

16

20

Total Americas

5,091

17

5,108

226

5,334

4,435

47

4,482

15

14

19

Japan

652

1

653

−28

625

513

3

516

27

27

21

Rest of Asia Pacific Japan

1,499

1

1,500

2

1,502

1,253

4

1,256

20

19

20

Total Asia Pacific Japan

2,151

2

2,153

−25

2,128

1,766

7

1,772

22

22

20

Total revenue  

14,232

27

14,259

196

14,455

12,464

74

12,538

14

14

15



NEW INCOME STATEMENTS FORMAT – CONSOLIDATED INCOME STATEMENT

for the twelve months ended December 31

(Preliminary and Unaudited)


EUR millions, unless otherwise stated

2011

2010

Change

in %

Software

4,106

3,410

20

Support

7,194

6,370

13

Cloud subscriptions and -support

18

14

29

Software and software-related service revenue

11,318

9,794

16

Consulting

2,341

2,197

7

Other services

573

473

21

Professional services and other service revenue

2,914

2,670

9

Total revenue

14,232

12,464

14





Cost of software and software-related services

−2,111

−1,823

16

Cost of professional services and other services

−2,232

−2,071

8

Total cost of revenue

−4,343

−3,894

12

Gross profit

9,889

8,570

15

Research and development

−1,939

−1,729

12

Sales and marketing

−3,080

−2,645

16

General and administration

−718

−636

13

Restructuring

−4

3

<-100

TomorrowNow litigation

717

−981

<-100

Other operating income/expense, net

14

9

56

Total operating expenses

−9,353

−9,873

−5

Operating profit

4,879

2,591

88





Other non-operating income/expense, net

−79

−186

−58

Finance income

123

73

68

Finance costs TomorrowNow litigation

8

−12

<-100

Other finance costs

−168

−128

31

Finance costs

−160

−140

14

Financial income, net

−37

−67

−45

Profit before tax

4,763

2,338

104





Income tax TomorrowNow litigation

−281

377

<-100

Other income tax expense

−1,041

−902

15

Income tax expense

−1,322

−525

152

Profit after tax

3,441

1,813

90

Profit attributable to non-controlling interests

1

2

−50

Profit attributable to owners of parent

3,440

1,811

90





Basic earnings per share, in EUR*

2.89

1.52

90

Diluted earnings per share, in EUR*

2.89

1.52

90



NEW INCOME STATEMENTS FORMAT – RECONCILIATIONS FROM NON-IFRS NUMBERS TO IFRS NUMBERS (NEW)

(Preliminary and Unaudited)



Twelve months ended December 31

EUR millions, unless otherwise stated

2011

2010

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

4,106

0

4,106

96

4,202

3,410

0

3,410

20

20

23

Support

7,194

27

7,221

57

7,278

6,370

74

6,444

13

12

13

Cloud subscriptions and -support

18

0

18

0

18

14

0

14

29

29

29

Software and software-related service

revenue

11,318

27

11,345

153

11,498

9,794

74

9,868

16

15

17

Consulting

2,341

0

2,341

35

2,376

2,197

0

2,197

7

7

8

Other services

573

0

573

8

581

473

0

473

21

21

23

Professional services and other service

revenue

2,914

0

2,914

43

2,957

2,670

0

2,670

9

9

11

Total revenue

14,232

27

14,259

196

14,455

12,464

74

12,538

14

14

15













Operating Expense Numbers












Cost of software and software-related

services

−2,111

285

−1,826



−1,823

202

−1,621

16

13


Cost of professional services and other

services

−2,232

33

−2,199



−2,071

18

−2,053

8

7


Total cost of revenue

−4,343

318

−4,025



−3,894

220

−3,674

12

10


Gross profit

9,889

345

10,234



8,570

294

8,864

15

15


Research and development

−1,939

41

−1,898



−1,729

23

−1,706

12

11


Sales and marketing

−3,080

127

−2,953



−2,645

95

−2,550

16

16


General and administration

−718

31

−687



−636

26

−610

13

13


Restructuring

−4

4

0



3

−3

0

<-100

0


TomorrowNow litigation

717

−717

0



−981

981

0

<-100

0


Other operating income/expense, net

14

0

14



9

0

9

56

56


Total operating expenses

−9,353

−196

−9,549

−128

−9,677

−9,873

1,342

−8,531

−5

12

13













Profit Numbers












Operating profit

4,879

−169

4,710

68

4,778

2,591

1,416

4,007

88

18

19

Other non-operating income/expense, net

−79

0

−79



−186

−4

−190

−58

−58


Finance income

123

0

123



73

0

73

68

68


Finance costs TomorrowNow litigation

8

−8

0



−12

12

0

<-100

0


Other finance costs

−168

0

−168



−128

0

−128

31

31


Finance costs

−160

−8

−168



−140

12

−128

14

31


Financial income, net

−37

−8

−45



−67

12

−55

−45

−18


Profit before tax

4,763

−177

4,586



2,338

1,424

3,762

104

22


Income tax TomorrowNow litigation

−281

281

0



377

−377

0

<-100

0


Other income tax expense

−1,041

−174

−1,215



−902

−122

−1,024

15

19


Income tax expense

−1,322

107

−1,215



−525

−499

−1,024

152

19


Profit after tax

3,441

−70

3,371



1,813

925

2,738

90

23


Profit attributable to non-controlling

interests

1

0

1



2

0

2

−50

−50


Profit attributable to owners of parent

3,440

−70

3,370



1,811

925

2,736

90

23














Key Ratios












Operating margin in %

34.3


33.0


33.1

20.8


32.0

13.5pp

1.0pp

1.1pp

Effective tax rate in %

27.8


26.5



22.5


27.2

5.3pp

−0.7pp


Basic earnings per share, in EUR*

2.89


2.83



1.52


2.30

90

23














* Adjustments in the revenue line items are for support revenue 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. See Explanations of Non-IFRS Measures for details.


** 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.


Differences may exist due to rounding.


For a more detailed description of these adjustments and their limitations as well as our constant currency and free cash flow figures see Explanations of Non-IFRS Measures online (www.sap.com/about/investor/index.epx).



SOURCE SAP AG



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