SAP Reports 20% Growth in Software and Software-Related Service Revenues for the Third Quarter

13% Growth in Non-IFRS Software and Software-Related Service Revenues at Constant Currencies

Company Reaffirms Full-Year 2010 Outlook

Oct 27, 2010, 01:00 ET from SAP AG

WALLDORF, Germany, Oct. 27 /PRNewswire-FirstCall/ -- SAP AG (NYSE: SAP) today announced its preliminary financial results for the third quarter ended September 30, 2010.

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FINANCIAL HIGHLIGHTS – Third Quarter 2010

Third Quarter 2010(1)

IFRS

Non-IFRS(2)

euro million, unless otherwise stated

Q3 2010

Q3 2009

% change

Q3 2010

Q3 2009

% change

% change const. curr.(3)

Software revenue

656

525

25%

656

525

25%

15%

Software and software-related service revenue

2,316

1,937

20%

2,352

1,937

21%

13%

Total revenue

3,003

2,508

20%

3,039

2,508

21%

13%

Total operating expenses

-2,287

-1,889

21%

-2,157

-1,821

18%

11%

    - thereof restructuring

2

-10

<-100%

-1

-11

-91%

Operating profit

716

619

16%

883

687

29%

16%

Operating margin (%)

23.8

24.7

-0.9pp

29.1

27.4

1.7pp

0.8pp

Profit after tax

501

447

12%

605

499

21%

Basic earnings per share (euro )

0.42

0.38

11%

0.51

0.42

21%

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 and discontinued activities.

3) 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.

Third quarter and year to date 2010 revenue, profit and cash flow figures include the revenue, profits and cash flows from Sybase for the period since the acquisition (July 26, 2010). The comparative prior year numbers do not include any Sybase revenues, profits or cash flows.

Revenues – Third Quarter 2010

  • IFRS software and software-related service revenues were euro 2.32 billion (2009: euro 1.94 billion), an increase of 20%. Non-IFRS software and software-related service revenues were euro 2.35 billion (2009: euro 1.94 billion), an increase of 21% (13% at constant currencies).
  • Excluding the contribution from Sybase, SAP’s business contributed 15 percentage points to the growth of our IFRS and Non-IFRS software and software related service revenues (7 percentage points at constant currencies).
  • IFRS software revenues were euro 656 million (2009: euro 525 million), an increase of 25% (15% at constant currencies).
  • IFRS total revenues were euro 3.00 billion (2009: euro 2.51 billion), an increase of 20%. Non-IFRS total revenues were euro 3.04 billion (2009: euro 2.51 billion), an increase of 21% (13% at constant currencies)

Third quarter 2010 Non-IFRS revenue figures exclude a deferred support revenue write-down from acquisitions of euro 36 million.

Income – Third Quarter 2010

  • IFRS operating profit was euro 716 million (2009: euro 619 million), an increase of 16%. Non-IFRS operating profit was euro 883 million (2009: euro 687 million), an increase of 29% (16% at constant currencies). In the third quarter of 2009, the IFRS and Non-IFRS operating profit was impacted by restructuring charges of euro 10 million and euro 11 million, respectively, resulting from a reduction of positions. In contrast, restructuring charges were not material in the third quarter of 2010.
  • IFRS operating margin was 23.8% (2009: 24.7%), a decrease of 0.9 percentage points. Non-IFRS operating margin was 29.1% (2009: 27.4%), or 28.2% at constant currencies, an increase of 1.7 percentage points (0.8 percentage points at constant currencies). In contrast to the respective quarter in 2009, the third quarter of 2010 was not materially impacted by restructuring expenses which had, in the third quarter of 2009, negatively impacted the IFRS and Non-IFRS operating margin by 0.4 percentage points.
  • IFRS profit after tax was euro 501 million (2009: euro 447 million), an increase of 12%. Non-IFRS profit after tax was euro 605 million (2009: euro 499 million), an increase of 21%. IFRS basic earnings per share were euro 0.42 (2009: euro 0.38), an increase of 11%. Non-IFRS basic earnings per share were euro 0.51 (2009: euro 0.42), an increase of 21%. The impact, net of tax, of the restructuring expenses incurred in the third quarter 2009 on the third quarter 2009 IFRS and Non-IFRS basic earnings per share was not material. The IFRS effective tax rate in the third quarter of 2010 was 27.3% (2009: 20.5%).

Third quarter 2010 Non-IFRS operating profit excludes a deferred support revenue write-down from acquisitions of euro 36 million plus acquisition-related charges and discontinued activities totaling euro 131 million (2009: euro 68 million). Third quarter 2010 Non-IFRS profit after tax and Non-IFRS basic earnings per share exclude a deferred support revenue write-down from acquisitions of euro 24 million plus acquisition-related charges and discontinued activities totaling euro 80 million net of tax (2009: euro 52 million). The excluded amounts from discontinued activities result from an increase from $100 million to $160 million in the provision related to our discontinued TomorrowNow activities.

“We are pleased to report double-digit growth in software and software related service revenue and the contribution of Sybase,” said Werner Brandt, CFO of SAP AG. “All of the regions reported growth in the third quarter, with particular strength in the U.S. and the emerging markets of Asia, Europe and Latin America. We saw a good mix of revenues among small, midsized and large enterprises, and we had an increase in deal volume. On the product side, Business Analytics remains a top priority among our customers and continues to be a principal growth driver.”

“We were already delivering our solutions on premise and on demand. With the acquisition of Sybase, we now have the most complete and heterogeneous mobile platform in the industry and with it the added ability to deliver our solutions on device as well,” said Bill McDermott, Co-CEO of SAP. “As customers continue to reengage, seeking opportunities to grow their businesses and differentiate themselves from their competitors, we are able to help them be best run businesses with our unique strategy to deliver a full suite of enterprise software and next generation business intelligence on any device at any time.”

“The experience we have gained with our more than 100,000 customers over many years tells us that they want choice, openness and innovation from their technology partners,” said Jim Hagemann Snabe, Co-CEO of SAP. “The opposite seems to be happening as more technology companies want to lock in their customers to a single vendor on one proprietary technology stack. This has made our business even more important to our customers because at SAP we provide choice, innovation, co-innovation, a completely open platform and the resources of a vast ecosystem of partners, with whom we continue to forge even stronger relationships. Our in-memory High-Performance Analytic Appliance called SAP HANA is a prime example of cutting edge technology delivered through co-innovation with partners.”

FINANCIAL HIGHLIGHTS – Nine Months 2010

Nine Months 2010(1)

IFRS

Non-IFRS(2)

euro  million, unless otherwise stated

9M 2010

9M 2009

% change

9M 2010

9M 2009

% change

% change const. curr.(3)

Software revenue

1,757

1,487

18%

1,757

1,487

18%

9%

Software and software-related service revenue

6,521

5,632

16%

6,557

5,643

16%

10%

Total revenue

8,406

7,482

12%

8,442

7,493

13%

7%

Total operating expenses

-6,359

-5,915

8%

-6,108

-5,700

7%

3%

    - thereof restructuring

1

-193

<-100%

-2

-188

-99%

Operating profit

2,047

1,567

31%

2,334

1,792

30%

19%

Operating margin (%)

24.4

20.9

3.5pp

27.6

23.9

3.7pp

2.7pp

Profit after tax

1,379

1,069

29%

1,591

1,239

28%

Basic earnings per share (euro )

1.16

0.90

29%

1.34

1.04

29%

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 and discontinued activities.

3) 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.

Third quarter and year to date 2010 revenue, profit and cash flow figures include the revenue, profits and cash flows from Sybase for the period since the acquisition (July 26, 2010). The comparative prior year numbers do not include any Sybase revenues, profits or cash flows.

Revenues – Nine Months 2010

  • IFRS software and software-related service revenues were euro 6.52 billion (2009: euro 5.63 billion), an increase of 16%. Non-IFRS software and software-related service revenues were euro 6.56 billion (2009: euro 5.64 billion), an increase of 16% (10% at constant currencies).
  • Excluding the contribution from Sybase, SAP’s business contributed 14 percentage points to the growth of our IFRS and Non-IFRS software and software related service revenues (8 percentage points at constant currencies).
  • IFRS software revenues were euro 1.76 billion (2009: euro 1.49 billion), an increase of 18% (9% at constant currencies).
  • IFRS total revenues were euro 8.41 billion (2009: euro 7.48 billion), an increase of 12%. Non-IFRS total revenues were euro 8.44 billion (2009: euro 7.49 billion), an increase of 13% (7% at constant currencies).

Nine months 2010 Non-IFRS revenue figures exclude a deferred support revenue write-down from acquisitions of euro 36 million (2009: euro 11 million).

Income – Nine Months 2010

  • IFRS operating profit was euro 2.05 billion (2009: euro 1.57 billion), an increase of 31%. Non-IFRS operating profit was euro 2.33 billion (2009: euro 1.79 billion), an increase of 30% (19% at constant currencies). In the first nine months of 2009, the IFRS and Non-IFRS operating profit was impacted by restructuring charges of euro 193 million and euro 188 million, respectively, resulting from a reduction of positions. In contrast, restructuring charges were not material in the 2010 nine month period.
  • IFRS operating margin was 24.4% (2009: 20.9%), an increase of 3.5 percentage points. Non-IFRS operating margin was 27.6% (2009: 23.9 %), or 26.6% at constant currencies, an increase of 3.7 percentage points (2.7 percentage points at constant currencies). In contrast to the respective first nine months of 2009, the first nine months of 2010 were not materially impacted by restructuring expenses which had, in the first nine months of 2009, negatively impacted the IFRS and Non-IFRS operating margin by 2.6 percentage points and 2.5 percentage points, respectively. However, severance expenses of euro 45 million (2009: euro 11 million) and unused lease space expenses of euro 8 million (2009: euro 5 million) negatively impacted the IFRS and Non-IFRS operating margin by 0.6 percentage points (2009: 0.2 percentage points).
  • IFRS profit after tax was euro 1.38 billion (2009: euro 1.07 billion), an increase of 29%. Non-IFRS profit after tax was euro 1.59 billion (2009: euro 1.24 billion), an increase of 28%. IFRS basic earnings per share were euro 1.16 (2009: euro 0.90), an increase of 29 %. Non-IFRS basic earnings per share were euro 1.34 (2009: euro 1.04), an increase of 29 %. The impact, net of tax, of the severance and unused lease space expenses incurred in the first nine months of 2010 on the first nine months 2010 IFRS and Non-IFRS basic earnings per share was euro 0.03 (2009: euro 0.01). The impact, net of tax, of the restructuring expenses incurred in the first nine months of 2009 on the first nine months 2009 IFRS and Non-IFRS basic earnings per share was euro 0.11. The IFRS effective tax rate in the first nine months 2010 was 26.9% (2009: 26.0%).

First nine months 2010 Non-IFRS operating profit excludes a deferred support revenue write-down from acquisitions of euro 36 million (2009: euro 11 million) plus acquisition-related charges and discontinued activities totaling euro 251 million (2009: euro 215 million). First nine months 2010 Non-IFRS profit after tax and Non-IFRS basic earnings per share exclude a deferred support revenue write-down from acquisitions of euro 24 million (2009: euro 7 million) plus acquisition-related charges and discontinued activities totaling euro 188 million net of tax (2009: euro 163 million). The excluded amounts from discontinued activities result from an increase from $100 million to $160 million in the provision related to our discontinued TomorrowNow activities.

Cash Flow – Nine Months 2010

Operating cash flow for the nine months 2010 exceeded euro 2 billion (2009: euro 2.36 billion).  The year-over-year decrease in operating cash flow was mainly the result of a significant increase in payments in 2009 that were delayed from the end of 2008 resulting from the onset of the financial crisis. In 2010, however, the timing of the cash inflows from customers returned to normal.

Free cash flow was euro 1.86 billion (2009: euro 2.19 billion), a decrease of 15%. Free cash flow was 22% of total revenues (2009: 29%). At September 30, 2010, SAP had a total group liquidity of euro 2.83 billion (December 31, 2009: euro 2.28 billion), which includes cash and cash equivalents and short term investments. Net liquidity at September 30, 2010 was -euro 1.64 billion, which included euro 4.47 billion of debt, of which euro 2.20 billion resulted from the proceeds of two successful bond transactions.  These debt offerings were very well-received in the market.

Business Outlook

SAP is providing the following outlook for the full-year 2010, which is unchanged from the previous outlook.

  • The Company expects full-year 2010 Non-IFRS software and software-related service revenue to increase in a range of 9% – 11% at constant currencies (2009: euro 8.2 billion). SAP’s business, excluding the contribution from Sybase, is expected to contribute 6 – 8 percentage points to this growth.
  • The Company expects the full-year 2010 Non-IFRS operating margin to be in a range of 30% – 31% (2009: 27.4%) at constant currencies.
  • The Company projects an effective tax rate of 27.5% – 28.5% (based on IFRS) for 2010 (2009: 28.1%).

Major Customer Wins

In the third quarter of 2010, SAP closed major contracts in key regions.

EMEA: SAP - Electricity Supply Corporation of Malawi (ESCOM) Ltd, TNK-BP, Nedbank Group Limited, Standard Bank of South Africa Limited and Mercuria Energy Group Holding, Iberdrola and City of Johannesburg.  Sybase - BNP Paribas, Commerzbank, Cogetech and Ericsson

Americas: SAP - Fifth Third Processing Solutions, Intermec Technologies Corporation, Applied Industrial Technologies, Fossil, Marisol S.A., Indumotora Automotriz S.A.,  Hasbro, Inc. and American Express. Sybase - Banco Popular Dominicano, Rite Aid, GlobeOp Financial and Symphony Technology

Asia Pacific/Japan: SAP - Jiangsu Electric Power Corp., China Central Television, Chemical Company of Malaysia Berhad, Pacific Pipe Co., Ltd., Punjab State Power Corporation Ltd.,  Sharp Corporation and Eros International Media. Sybase - New Zealand Customs and NTT Data Group

SAP Business ByDesign - Anthesis, Frankfurter Fondsbank, Hangzhou Permanent Magnet Group, KunShan Taidah Chemical and RJT Compuquest.

Webcast / Supplementary Financial Information

SAP senior management will host a conference call today at 3:00 PM (CET) / 2:00 PM (UK) / 9:00 AM (Eastern) / 6:00 AM (Pacific). The conference call will be web cast live on the Company’s website at http://www.sap.com/investor and will be available for replay.

Supplementary financial information pertaining to the quarterly results can be found at http://www.sap.com/investor.

SAP First Nine Months 2010 Interim Report

The First Nine Months 2010 Interim Report will be published on October 29, 2010, and will be available for download at http://www.sap.com/investor

About SAP

SAP is the world’s leading provider of enterprise application software, offering solutions that enable companies of all sizes and in more than 25 industries to become best-run businesses. With more than 105,000 customers in over 120 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol “SAP.” 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.

Copyright © 2010 SAP AG. All rights reserved.

SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects Explorer, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects Software Ltd. in the United States and in other countries. Sybase and Adaptive Server Enterprise, iAnywhere, Sybase 365, SQL Anywhere and other Sybase products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Sybase, Inc.  All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary.

For more information, press only:

Christoph Liedtke

+49 (6227) 7-50383

christoph.liedtke@sap.com, CET

Guenter Gaugler

+49 (6227) 7-65416

guenter.gaugler@sap.com, CET

Jim Dever

+1 (610) 661-2161

james.dever@sap.com, ET

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+65 6768 6439

lynn.ong@sap.com, SGT (GMT +8)

For more information, financial community only:

Stefan Gruber

+49 (6227) 7-44872

investor@sap.com, CET

Martin Cohen

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investor@sap.com, ET

Follow SAP Investor Relations on Twitter at @sapinvestor.

Appendix – Financial Information to Follow

FINANCIAL INFORMATION

FOR THE THIRD QUARTER AND NINE MONTHS 2010

– Condensed, Preliminary and Unaudited –

Page

Financial Statements (IFRS)

Income Statements – Quarter

F1

Statements of Comprehensive Income - Quarter

F2

Income Statements – Nine Months

F2

Statements of Comprehensive Income – Nine Months

F4

Statements of Financial Position

F5

Statements of Changes in Equity

F6

Statements of Cash Flows

F7

Supplementary Financial Information

Reconciliations from Non-IFRS Numbers to IFRS Numbers

F8 to F9

Revenue by Region

F10 to F11

Share-Based Compensation

F12

Free Cash Flow

F12

Days Sales Outstanding(DSO)

F12

Number of Employees

F12

Multi-Quarter Summary

F13

Explanations of Non-IFRS Measures

F14 to F16

Financial Statements (IFRS)

CONSOLIDATED INCOME STATEMENTS OF SAP GROUP

For the three months ended September 30 

euro millions, unless otherwise stated

2010

2009

Change in %

Software revenue 

656

525

25

Support revenue 

1,559

1,333

17

Subscription and other software-related service revenue 

101

79

28

Software and software-related service revenue 

2,316

1,937

20

Consulting revenue 

565

484

17

Other service revenue 

122

87

40

Professional services and other service revenue 

687

571

20

Total revenue 

3,003

2,508

20

Cost of software and software-related services 

-514

-414

24

Cost of professional services and other services 

-530

-436

22

Research and development 

-453

-382

19

Sales and marketing 

-642

-515

25

General and administration 

-157

-133

18

Restructuring

2

-10

<-100

Other operating income/expense, net 

7

1

>100

Total operating expenses 

-2,287

-1,889

21

Operating profit 

716

619

16

Other non-operating income/expense, net  

-13

-39

-67

Finance income 

16

9

78

Finance costs 

-35

-26

35

Other financial gains/losses, net 

5

-1

<-100

Financial income, net 

-14

-18

-22

Profit before tax 

689

562

23

Income tax expense

-188

-115

63

Profit after tax 

501

447

12

– Profit attributable to non-controlling interests 

1

0

N/A

– Profit attributable to owners of parent 

500

447

12

Basic earnings per share, in euro

0.42

0.38

12

Diluted earnings per share, in euro

0.42

0.38

12

* For the three months ended September  30, 2010 and 2009 the weighted average number of shares were 1,188

million (Diluted: 1,188 million) and 1,188 million (Diluted: 1,189 million), respectively (treasury stock excluded).

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME OF SAP GROUP

for the third quarter ended September 30

euro millions

2010

2009

Profit after tax

501

447

Gains (losses) on exchange differences on translation, before tax

-270

18

Reclassification adjustments on exchange differences on translation, before tax

11

0

Exchange differences on translation

-259

18

Gains (losses) on remeasuring available-for-sale financial assets, before tax

6

1

Reclassification adjustments on available-for-sale financial assets, before tax

0

0

Available-for-sale financial assets

6

1

Gains (losses) on cash flow hedges, before tax

6

-11

Reclassification adjustments on cash flow hedges, before tax

31

22

Cash flow hedges

37

11

Actuarial gains (losses) on defined benefit plans, before tax

7

3

Other comprehensive income before tax

-209

33

Income tax relating to components of other comprehensive income

-13

-5

Other comprehensive income after tax

-222

28

Total comprehensive income

279

475

– attributable to non-controlling interests

1

0

– attributable to owners of parent

278

475

CONSOLIDATED INCOME STATEMENTS OF SAP GROUP  

For the nine months ended September 30

euro millions, unless otherwise stated

2010

2009

Change in %

Software revenue

1,757

1,487

18

Support revenue

4,479

3,922

14

Subscription and other software-related service revenue

285

223

28

Software and software-related service revenue

6,521

5,632

16

Consulting revenue

1,572

1,554

1

Other service revenue

313

296

6

Professional services and other service revenue

1,885

1,850

2

Total revenue

8,406

7,482

12

Cost of software and software-related services

-1,328

-1,200

11

Cost of professional services and other services

-1,478

-1,423

4

Research and development

-1,242

-1,120

11

Sales and marketing

-1,858

-1,590

17

General and administration

-461

-395

17

Restructuring

1

-193

<-100

Other operating income/expense, net

7

6

17

Total operating expenses

-6,359

-5,915

8

Operating profit

2,047

1,567

31

Other non-operating income/expense, net

-136

-62

>100

Finance income

38

27

41

Finance costs

-67

-79

-15

Other financial gains/losses, net

4

-8

<-100

Financial income, net

-25

-60

-58

Profit before tax

1,886

1,445

31

Income tax expense

-507

-376

35

Profit after tax

1,379

1,069

29

– Profit attributable to non-controlling interests

2

1

100

– Profit attributable to owners of parent

1,377

1,068

29

Basic earnings per share, in euro

1.16

0.90

29

Diluted earnings per share, in euro

1.16

0.90

29

* For the nine months ended September 30, 2010 and 2009 the weighted average number of shares were 1,188 million (Diluted: 1,189 million) and 1,188 million (Diluted: 1,189 million), respectively (treasury stock excluded).

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME OF SAP GROUP

for the nine months ended September 30

euro  millions

2010

2009

Profit after tax

1,379

1,069

Gains (losses) on exchange differences on translation, before tax

2

53

Reclassification adjustments on exchange differences on translation, before tax

-6

0

Exchange differences on translation

-4

53

Gains (losses) on remeasuring available-for-sale financial assets, before tax

5

2

Reclassification adjustments on available-for-sale financial assets, before tax

0

0

Available-for-sale financial assets

5

2

Gains (losses) on cash flow hedges, before tax

-66

-33

Reclassification adjustments on cash flow hedges, before tax

47

65

Cash flow hedges

-19

32

Actuarial gains (losses) on defined benefit plans, before tax

-3

5

Other comprehensive income before tax

-21

92

Income tax relating to components of other comprehensive income

9

-11

Other comprehensive income after tax

-12

81

Total comprehensive income

1,367

1,150

– attributable to non-controlling interests

2

1

– attributable to owners of parent

1,365

1,149

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION OF SAP GROUP  

as at September 30, 2010 and December 31, 2009 

euro millions

2010

2009

Change in %

Assets

Cash and cash equivalents

2,828

1,884

50

Other financial assets

258

486

-47

Trade and other receivables

2,382

2,546

-6

Other non-financial assets

223

147

52

Tax assets

311

192

62

Total current assets

6,002

5,255

14

Goodwill

8,285

4,994

66

Intangible assets

2,400

894

>100

Property, plant, and equipment

1,415

1,371

3

Other financial assets

374

284

32

Trade and other receivables

68

52

31

Other non-financial assets

31

35

-11

Tax assets

120

91

32

Deferred tax assets

391

398

-2

Total non-current assets

13,084

8,119

61

Total assets

19,086

13,374

43

euro millions

2010

2009

Change in %

Equity and liabilities

Trade and other payables

766

638

20

Tax liabilities

136

125

9

Financial liabilities

238

146

63

Other non-financial liabilities

1,187

1,577

-25

Provisions

389

332

17

Deferred income

1,334

598

>100

Total current liabilities

4,050

3,416

19

Trade and other payables

54

35

54

Tax liabilities

359

239

50

Financial liabilities

4,422

729

>100

Other non-financial liabilities

21

12

75

Provisions

270

198

36

Deferred tax liabilities

605

190

>100

Deferred income

94

64

47

Total non-current liabilities

5,825

1,467

>100

Total liabilities

9,875

4,883

>100

Issued capital

1,227

1,226

0

Treasury shares

-1,391

-1,320

5

Share premium

333

317

5

Retained earnings

9,356

8,571

9

Other components of equity

-331

-317

4

Equity attributable to owners of parent

9,194

8,477

8

Non-controlling interests

17

14

21

Total equity

9,211

8,491

8

Equity and liabilities

19,086

13,374

43

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY OF SAP GROUP 

For the nine months ended

September 30 

euro millions

Issued Capital

Share Premium

Retained Earnings

Other Components of Equity

Treasury Shares

Equity Attributable to Owners of Parent

Non-Controlling Interests

Total Equity

Exchange Differences

Available-for-Sale Financial Assets

Cash Flow Hedges

January 1, 2009

1,226

320

7,423

-395

-1

-42

-1,362

7,169

2

7,171

Profit after tax

1,068

1,068

1

1,069

Other comprehensive income

3

53

1

25

82

82

Share-based compensation

-4

-4

-4

Dividends

-594

-594

-594

Treasury shares transactions

-5

36

31

31

Convertible bonds and stock options exercised

5

5

5

Other

1

1

10

11

September 30, 2009

1,226

316

7,901

-342

-17

-1,326

7,758

13

7,771

January 1, 2010

1,226

317

8,571

-319

13

-11

-1,320

8,477

14

8,491

Profit after tax

1,377

1,377

2

1,379

Other comprehensive income

2

-4

4

-14

-12

-12

Share-based compensation

0

0

Dividends

-594

-594

-594

Treasury shares transactions

-4

-157

-161

-161

Convertible bonds and stock options exercised

1

20

86

107

107

Other

0

1

1

September 30, 2010

1,227

333

9,356

-323

17

-25

-1,391

9,194

17

9,211

CONSOLIDATED STATEMENTS OF CASH FLOWS OF SAP GROUP

as at September 30

euro millions

2010

2009

Profit after tax

1,379

1,069

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

Depreciation and amortization

370

375

Gains/losses on disposals of non-current assets

2

4

Gains/losses on disposals of financial assets

-7

0

Impairment loss on financial assets recognized in profit

0

8

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

-9

91

Other adjustments for non-cash items

33

7

Deferred income taxes

13

-84

Decrease/increase in trade receivables

515

967

Decrease/increase in other assets

-350

16

Decrease/increase in trade payables, provisions and other liabilities

-437

-612

Decrease/increase in deferred income

553

521

Net cash flows from operating activities

2,062

2,362

Business combinations, net of cash and cash equivalents acquired

-4,184

-65

Purchase of intangible assets and property, plant, and equipment

-200

-169

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

23

19

Purchase of equity or debt instruments of other entities

-687

-576

Proceeds from sales of equity or debt instruments of other entities

1,248

324

Net cash flows from investing activities

-3,800

-467

Dividends paid

-594

-594

Purchase of treasury shares

-220

0

Proceeds from reissuance of treasury shares

109

20

Proceeds from issuing shares (share-based compensation)

26

4

Proceeds from borrowings

5,019

697

Repayments of borrowings

-1,721

-902

Purchase of equity-based derivative instruments (hedge for cash-settled share-based payment plans)

-14

0

Proceeds from exercise of equity-based derivative financial instruments

4

4

Cash and cash equivalents at the end of the period

2,828

2,414

Effect of foreign exchange rates on cash and cash equivalents

73

10

Net decrease/increase in cash and cash equivalents

944

1,134

Cash and cash equivalents at the beginning of the period

1,884

1,280

Cash and cash equivalents at the end of the period

2,828

2,414

Supplementary Financial Information

RECONCILIATIONS FROM NON-IFRS NUMBERS TO IFRS NUMBERS

(Preliminary and unaudited)

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.

euro millions, unless otherwise stated

Three months ended September 30

2010

2009

Change in %

IFRS

Adj.*

Non-IFRS*

Currency impact**

Non-IFRS constant currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS constant currency**

Non-IFRS Revenue Numbers

Software revenue

656

0

656

-52

604

525

0

525

25

25

15

Support revenue

1,559

36

1,595

-109

1,486

1,333

0

1,333

17

20

11

Subscription and other software-related service revenue

101

0

101

-6

95

79

0

79

28

28

20

Software and software-related service revenue

2,316

36

2,352

-167

2,185

1,937

0

1,937

20

21

13

- thereof SAP excluding Sybase

2,228

0

2,228

-158

2,070

1,937

0

1,937

15

15

7

Consulting revenue

565

0

565

-40

525

484

0

484

17

17

8

Other service revenue

122

0

122

-8

114

87

0

87

40

40

31

Professional services and other service revenue

687

0

687

-48

639

571

0

571

20

20

12

Total revenue

3,003

36

3,039

-215

2,824

2,508

0

2,508

20

21

13

Non-IFRS Operating Expense Numbers

Cost of software and software-related services

-514

100

-414

-414

48

-366

24

13

Cost of professional services and other services

-530

3

-527

-436

1

-435

22

21

Research and development

-453

1

-452

-382

1

-381

19

19

Sales and marketing

-642

24

-618

-515

18

-497

25

24

General and administration

-157

5

-152

-133

2

-131

18

16

Restructuring

2

-3

-1

-10

-1

-11

<-100

-91

Other operating income/expense, net

7

0

7

1

-1

0

>100

N/A

Total operating expenses

-2,287

131

-2,157

130

-2,027

-1,889

68

-1,821

21

18

11

Non-IFRS Profit Numbers 

Operating profit

716

167

883

-86

797

619

68

687

16

29

16

Other non-operating income/expense, net

-13

-8

-21

-39

0

-39

-67

-46

Finance income

16

0

16

9

0

9

78

78

Finance costs

-35

0

-35

-26

0

-26

35

35

Other financial gains/losses, net

5

0

5

-1

0

-1

<-100

<-100

Financial income, net

-14

0

-14

-18

0

-18

-22

-22

Profit before tax

689

159

848

562

68

630

23

35

Income tax expense

-188

-55

-243

-115

-16

-131

63

85

Profit after tax

501

104

605

447

52

499

12

21

Profit attributable to non-controlling interests

1

0

1

0

0

0

N/A

N/A

Profit attributable to owners of parent

500

104

604

447

52

499

12

21

Non-IFRS Key Ratios  

Operating margin in %

23.8

29.1

28.2

24.7

27.4

-0.9pp

1.7pp

0.8pp

Effective tax rate in %

27.3

28.7

20.5

20.8

6.8pp

7.9pp

Basic earnings per share, in euro

0.42

0.51

0.38

0.42

11

21

euro  millions, unless otherwise stated

Nine months ended September 30

2010

2009

Change in %

IFRS

Adj.*

Non-IFRS*

Currency impact**

Non-IFRS constant currency**

IFRS

Adj.*

Non-IFRS*

IFRS

Non-IFRS*

Non-IFRS constant currency**

Non-IFRS Revenue Numbers

Software revenue

1,757

0

1,757

-133

1,624

1,487

0

1,487

18

18

9

Support revenue

4,479

36

4,515

-207

4,308

3,922

11

3,933

14

15

10

Subscription and other software-related service revenue

285

0

285

-8

277

223

0

223

28

28

24

Software and software-related service revenue

6,521

36

6,557

-349

6,208

5,632

11

5,643

16

16

10

- thereof SAP excluding Sybase

6,433

0

6,433

-340

6,093

5,632

11

5,643

14

14

8

Consulting revenue

1,572

0

1,572

-81

1,491

1,554

0

1,554

1

1

-4

Other service revenue

313

0

313

-15

298

296

0

296

6

6

1

Professional services and other service revenue

1,885

0

1,885

-96

1,789

1,850

0

1,850

2

2

-3

Total revenue

8,406

36

8,442

-444

7,998

7,482

11

7,493

12

13

7

Non-IFRS Operating Expense Numbers

Cost of software and software-related services

-1,328

181

-1,147

-1,200

147

-1,053

11

9

Cost of professional services and other services

-1,478

5

-1,473

-1,423

3

-1,420

4

4

Research and development

-1,242

4

-1,238

-1,120

3

-1,117

11

11

Sales and marketing

-1,858

51

-1,807

-1,590

55

-1,535

17

18

General and administration

-461

14

-447

-395

2

-393

17

14

Restructuring

1

-3

-2

-193

5

-188

<-100

-99

Other operating income/expense, net

7

0

7

6

0

6

17

17

Total operating expenses

-6,359

251

-6,108

239

-5,869

-5,915

215

-5,700

8

7

3

Non-IFRS Profit Numbers 

Operating profit

2,047

288

2,334

-205

2,129

1,567

226

1,792

31

30

19

Other non-operating income/expense, net

-136

9

-127

-62

0

-62

>100

>100

Finance income

38

0

38

27

0

27

41

41

Finance costs

-67

0

-67

-79

0

-79

-15

-15

Other financial gains/losses, net

4

0

4

-8

0

-8

<-100

<-100

Financial income, net

-25

0

-25

-60

0

-60

-58

-58

Profit before tax

1,886

297

2,183

1,445

226

1,671

31

31

Income tax expense

-507

-85

-592

-376

-56

-432

35

37

Profit after tax

1,379

212

1,591

1,069

170

1,239

29

28

Profit attributable to non-controlling interests

2

0

2

1

0

1

100

100

Profit attributable to owners of parent

1,377

212

1,589

1,068

170

1,238

29

28

Non-IFRS Key Ratios 

Operating margin in %

24.4

27.6

26.6

20.9

23.9

3.5pp

3.7pp

2.7pp

Effective tax rate in %

26.9

27.1

26.0

25.9

0.9pp

1.2pp

Basic earnings per share, in euro

1.16

1.34

0.90

1.04

29

29

* 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 and discontinued activities. 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.

REVENUE BY REGION

(Preliminary and unaudited)

The following tables present our IFRS and non-IFRS revenue by region based on customer location. The tables also present a reconciliation from our non-IFRS revenue (including our non-IFRS revenue at constant currency) to the respective most comparable IFRS revenue. Note: Our non-IFRS revenues are not prepared under a comprehensive set of accounting rules or principles.

euro  millions

Three months ended September 30

2010

2009

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

287

0

287

-11

276

254

0

254

13

13

9

Americas

253

0

253

-24

229

180

0

180

41

41

27

Asia Pacific Japan

116

0

116

-17

99

91

0

91

27

27

9

Software revenue  

656

0

656

-52

604

525

0

525

25

25

15

Software and software-related service revenue by region

Germany

369

0

369

0

369

342

0

342

8

8

8

Rest of EMEA

788

10

798

-34

764

695

0

695

13

15

10

Total EMEA

1,158

10

1,167

-34

1,133

1,037

0

1,037

12

13

9

United States

606

21

627

-60

567

476

0

476

27

32

19

Rest of Americas

200

2

203

-18

185

167

0

167

20

22

11

Total Americas

806

24

830

-79

751

643

0

643

25

29

17

Japan

107

1

108

-19

89

89

0

89

20

21

0

Rest of Asia Pacific Japan

246

1

247

-36

211

168

0

168

46

47

26

Total Asia Pacific Japan

352

3

355

-55

300

257

0

257

37

38

17

Software and software-related service revenue

2,316

36

2,352

-167

2,185

1,937

0

1,937

20

21

13

Total revenue by region

Germany

521

0

521

0

521

481

0

481

8

8

8

Rest of EMEA

975

10

985

-42

943

858

0

858

14

15

10

Total EMEA

1,496

10

1,506

-42

1,464

1,339

0

1,339

12

12

9

United States

810

21

831

-81

750

628

0

628

29

32

19

Rest of Americas

268

2

271

-26

245

222

0

222

21

22

10

Total Americas

1,078

24

1,101

-106

995

850

0

850

27

30

17

Japan

125

1

127

-22

105

102

0

102

23

25

3

Rest of Asia Pacific Japan

304

1

305

-45

260

216

0

216

41

41

20

Total Asia Pacific Japan

429

3

432

-67

365

319

0

319

34

35

14

Total revenue  

3,003

36

3,039

-215

2,824

2,508

0

2,508

20

21

13

euro  millions

Nine months ended September 30

2010

2009

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

747

0

747

-26

721

726

0

726

3

3

-1

Americas

694

0

694

-65

629

496

0

496

40

40

27

Asia Pacific Japan

317

0

317

-43

274

265

0

265

20

20

3

Software revenue  

1,757

0

1,757

-133

1,624

1,487

0

1,487

18

18

9

Software and software-related service revenue by region

Germany

1,040

0

1,040

0

1,040

948

0

948

10

10

10

Rest of EMEA

2,197

10

2,207

-79

2,128

2,002

4

2,006

10

10

6

Total EMEA

3,237

10

3,246

-78

3,168

2,950

4

2,954

10

10

7

United States

1,693

21

1,714

-83

1,631

1,417

6

1,423

19

20

15

Rest of Americas

599

2

601

-63

538

479

0

479

25

25

12

Total Americas

2,292

24

2,315

-147

2,168

1,896

6

1,902

21

22

14

Japan

315

1

316

-32

284

292

0

292

8

8

-3

Rest of Asia Pacific Japan

678

1

679

-91

588

494

0

494

37

37

19

Total Asia Pacific Japan

993

3

996

-124

872

786

1

787

26

27

11

Software and software-related service revenue

6,521

36

6,557

-349

6,208

5,632

11

5,643

16

16

10

Total revenue by region

Germany

1,470

0

1,470

0

1,470

1,376

0

1,376

7

7

7

Rest of EMEA

2,718

10

2,728

-98

2,630

2,531

4

2,535

7

8

4

Total EMEA

4,189

10

4,199

-99

4,100

3,907

4

3,911

7

7

5

United States

2,231

21

2,253

-108

2,145

1,941

6

1,947

15

16

10

Rest of Americas

790

2

793

-88

705

647

0

647

22

23

9

Total Americas

3,021

24

3,045

-195

2,850

2,588

6

2,594

17

17

10

Japan

361

1

362

-37

325

348

0

348

4

4

-7

Rest of Asia Pacific Japan

835

1

836

-113

723

639

0

639

31

31

13

Total Asia Pacific Japan

1,196

3

1,198

-150

1,048

987

1

988

21

21

6

Total revenue  

8,406

36

8,442

-444

7,998

7,482

11

7,493

12

13

7

* 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.

SHARE-BASED COMPENSATION

(Preliminary and unaudited)

euro millions

Nine months ended September 30

2010

2009

Change in %

Share-based compensation per expense line item

Cost of software and software-related services

4

5

-20

Cost of professional services and other services

9

10

-10

Research and development

19

20

-5

Sales and marketing

10

15

-33

General and administration

7

10

-30

Total share-based compensation

49

60

-18

Note: The share-based compensation expenses do not differ between SAP's IFRS and non-IFRS measures.

Differences may exist due to rounding.

FREE CASH FLOW

(Preliminary and unaudited)

euro millions

Nine months ended September 30

2010

2009

Change in %

Net cash flows from operating activities

2,062

2,362

-13

Additions to non-current assets excluding additions from acquisitions

-200

-169

18

Free cash flow

1,862

2,193

-15

Differences may exist due to rounding.

DAYS SALES OUTSTANDING (DSO)

(Unaudited)

as at September 30, 2010 and December 31, 2009

2010

2009

Change in days

Days sales outstanding (DSO) in days*

70

79

-9

* Day Sales Outstanding measures the length of time it takes to collect receivables. SAP calculates DSO by dividing the

average invoiced accounts receivables balance of the last 12 months by the average monthly sales of the last 12 months.

NUMBER OF EMPLOYEES (in Full-Time Equivalents)

September 30, 2010

September 30, 2009

EMEA

Americas

Asia Pacific Japan

Total

EMEA

Americas

Asia Pacific Japan

Total

Software and software-related services

3,729

1,743

2,234

7,706

3,211

1,252

1,862

6,325

Professional services and other services

6,772

3,904

2,348

13,024

6,704

3,509

2,277

12,490

Research and development

8,511

3,156

4,108

15,775

8,554

2,525

3,809

14,888

Sales and marketing

4,547

4,148

2,163

10,858

4,222

3,560

1,763

9,545

General and administration

2,037

997

527

3,561

1,965

736

415

3,116

Infrastructure

1,134

594

269

1,997

873

395

178

1,446

SAP Group (September 30)

26,730

14,542

11,649

52,921

25,529

11,977

10,304

47,810

SAP Group (First nine months)

25,668

12,723

10,640

49,031

26,199

12,528

10,734

49,461

MULTI-QUARTER SUMMARY

(IFRS and non-IFRS; preliminary und unaudited)

euro millions, unless otherwise stated

Q3/2010

Q2/2010

Q1/2010

Q4/2009

Q3/2009

Q2/2009

Q1/2009

Software revenue (IFRS)

656

637

464

1,120

525

543

418

Revenue adjustment*