SAP Announces Best Ever Second Quarter Performance Significantly Outperforming Market Expectations By Exceeding Euro 1 Billion in Software Revenue

WALLDORF, Germany, July 12, 2012 /PRNewswire/ -- After a preliminary review of its second quarter 2012 performance, SAP AG (NYSE: SAP) today announced its preliminary financial results for the second quarter ended June 30, 2012.

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BUSINESS HIGHLIGHTS IN THE SECOND QUARTER

SAP demonstrated strong growth in the second quarter. All regions posted double-digit revenue gains. The company is on track with solid results in its core business and exceptional demand for its new categories. Cloud momentum continued, driven by synergies between SuccessFactors and SAP. The company also strengthened its leadership in enterprise mobility. SAP HANA and the database business had an outstanding quarter with significant deals in all regions. Key industries such as financial services and retail as well as continued expansion of sales through SAP partners contributed significantly to the company's top-line.

"Our record performance speaks for itself. We delivered double-digit growth in all regions driven by strong momentum from the core as well as SAP HANA, mobile and the cloud. The results came in at the upper end of our second quarter software revenue guidance in an uncertain macro-economic environment," said Bill McDermott and Jim Hagemann Snabe, Co-CEOs. "SAP's customer-centric innovation strategy remains the key differentiator in the industry. The results are a validation that SAP is the better choice for companies to run better in any operating environment – allowing them to improve productivity, reduce costs and grow."

FINANCIAL HIGHLIGHTS – Second Quarter 2012

All 2012 figures in this release are approximate due to the preliminary nature of the announcement.

(1) All figures are preliminary and unaudited.

(2) For a detailed description of SAP's non-IFRS measures see Explanation of Non-IFRS Measures online.

IFRS software revenue was euro 1.06 billion (2011: euro 0.84 billion), an increase of 26% (19% at constant currencies). IFRS software and software-related service revenue was euro 3.12 billion (2011: euro 2.58 billion), an increase of 21%. Non-IFRS software and software-related service revenue was euro 3.14 billion (2011: euro 2.59 billion), an increase of 21% (15% at constant currencies). IFRS total revenue was euro 3.90 billion (2011: euro 3.30 billion), an increase of 18%. Non-IFRS total revenue was euro 3.92 billion (2011: euro 3.31 billion), an increase of 18% (12% at constant currencies).

IFRS operating profit was euro 0.92 billion (2011: euro 0.86 billion), an increase of 7%. Non-IFRS operating profit was euro 1.17 billion (2011: euro 1.02 billion), an increase of 15% (8% at constant currencies).

IFRS operating margin was 23.6% (2011: 26.0%), a decrease of 2.4 percentage points. Non-IFRS operating margin was 30.0% (2011: 30.8%), or 29.6% at constant currencies, a decrease of 0.8 percentage points (a decrease of 1.2 percentage points at constant currencies).

Non-IFRS operating profit and non-IFRS operating margin for the second quarter 2012 were impacted by severance expenses which amounted to euro 31 million (2011: euro 13 million) and the acquisition of SuccessFactors, which impacted the non-IFRS operating margin by approximately 110 basis points. In addition, the company increased its headcount by 3,655 FTEs (thereof 1,789 organic) in the first quarter of 2012 and another 1,552 FTEs (thereof 1,376 organic) in the second quarter of 2012 to capture future growth opportunities.

Second Quarter 2012 non-IFRS software and software-related service revenue and non-IFRS operating profit excludes a deferred revenue write-down from acquisitions of euro 18 million (2011: euro 8 million). Non-IFRS operating profit additionally excludes acquisition-related charges of euro 129 million, expenses from discontinued activities of euro 2 million, share-based compensation expenses of euro 99 million and restructuring expenses of euro 4 million (2011: euro 111 million, expenses of euro 10 million, euro 32 million and euro 1 million).

FINANCIAL HIGHLIGHTS – First Half 2012

(1) All figures are preliminary and unaudited.

(2) For a detailed description of SAP's non-IFRS measures see Explanation of Non-IFRS Measures online.

IFRS software revenue was euro 1.70 billion (2011: euro 1.45 billion), an increase of 17% (11% at constant currencies). IFRS software and software-related service revenue was euro 5.74 billion (2011: euro 4.91 billion), an increase of 17%. Non-IFRS software and software-related service revenue was euro 5.77 billion (2011: euro 4.93 billion), an increase of 17% (12% at constant currencies). IFRS total revenue was euro 7.25 billion (2011: euro 6.32 billion), an increase of 15%. Non-IFRS total revenue was euro 7.27 billion (2011: euro 6.35 billion), an increase of 15% (10% at constant currencies).

IFRS operating profit was euro 1.55 billion (2011: euro 1.45 billion), an increase of 7%. Non-IFRS operating profit was euro 2.01 billion (2011: euro 1.80 billion), an increase of 12% (6% at constant currencies).

IFRS operating margin was 21.4% (2011: 23.0%), a decrease of 1.6 percentage points. Non-IFRS operating margin was 27.6% (2011: 28.3%), or 27.2% at constant currencies, a decrease of 0.7 percentage points (a decrease of 1.1 percentage points at constant currencies).

First half 2012 non-IFRS software and software-related service revenue and non-IFRS operating profit excludes a deferred revenue write-down from acquisitions of euro 25 million (2011: euro 25 million). Non-IFRS operating profit additionally excludes acquisition-related charges of euro 250 million, profit from discontinued activities of euro 5 million, share-based compensation expenses of euro 181 million and restructuring expenses of euro 4 million (2011: euro 222 million, expenses of euro 12 million, euro 84 million and euro 1 million).

The company will report its full second quarter and first half 2012 results on July 24th.

Additional Information

2012 revenue and profit figures include the revenue, profits and cash flows from SuccessFactors starting on February 21, 2012. For the prior-year period those numbers were not included.

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 Explanation of Non-IFRS Measures online.

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 190,000 customers (includes customers from the acquisition of SuccessFactors) 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.

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