SAP SE: Cloud Revenue up 129% - SAP Business Network Revenue up 194%

SAP Announces Second Quarter and First Half 2015 Results

Jul 21, 2015, 01:01 ET from SAP SE

WALLDORF, Germany, July 21, 2015 /PRNewswire/ --

  • Strong Growth in New Cloud Bookings: Up 162%
  • Non-IFRS Cloud and Software Revenue Increased 21% to €4.06 Billion
  • HANA Customers Doubled Year Over Year, S/4HANA Customers Up More Than 140% Quarter Over Quarter
  • Non-IFRS Operating Profit Increased 13% to €1.39 Billion
  • Reiterates Full Year 2015 Outlook

SAP SE (NYSE: SAP) today announced its financial results for the second quarter and first half ended June 30, 2015.

SAP again delivered exceptionally strong growth in the cloud. Second quarter non-IFRS cloud subscriptions and support revenue grew 129% year-over-year (92% at constant currencies) to €555 million.1 New cloud bookings, the key measure for SAP's sales success in the cloud, increased 162% in the second quarter to €203 million.2

The Company had a very strong non-IFRS cloud and software revenue performance with 21% growth (9% at constant currencies) to €4.06 billion. Non-IFRS operating profit increased 13% (1% at constant currencies) to €1.39 billion.

"When I speak with CEOs, they are looking for a road map to digitize their business and to create new business models," said SAP CEO Bill McDermott. "Our business is thriving because we have the most complete vision for how to make this transition to digital business a simple one. I am confident that our strategy to deliver a platform, applications and business networks is exactly what customers need from SAP."

"Our second quarter growth in new cloud bookings was significantly higher than in the first quarter. This momentum showed across our entire cloud and business network portfolio," said SAP CFO Luka Mucic. "Our operating profit performance is beginning to reflect the business transformation we initiated to make SAP ready for the future. We are on track to achieve our full year business outlook."

BUSINESS HIGHLIGHTS IN THE SECOND QUARTER 2015

Strong Momentum in Human Capital Management and Customer Engagement and Commerce Drives Cloud Applications Revenue

Customers increasingly turn to us to manage the total workforce, both permanent and flexible workers, globally. Our Human Capital Management offering, SuccessFactors Employee Central, is localized for 71 countries and the number of customers has increased to more than 730 from around 390 a year ago. This represents an 87% growth in customers in just 12 months. We also saw strong growth in Customer Engagement and Commerce where SAP is helping businesses track and engage customers in real-time across all channels and seamlessly execute and fulfill ecommerce in one end-to-end value chain. New cloud bookings for Customer Engagement and Commerce once again saw strong triple digit growth.

Surge in Number of SAP S/4HANA Customers

Customer adoption confirms that SAP HANA is key to running a data-driven business in the Digital Economy. This quarter, the number of HANA customers surpassed 7,200 compared with 3,600 a year ago. S/4HANA's robust early traction – more than 900 SAP S/4HANA customers by the end of the second quarter compared to over 370 at the end of the first quarter – is a major catalyst in SAP HANA's broader market adoption across all industries and regions.

SAP Business Network Increases in Size, Revenue and Relevance

As the SAP Business Network grows, its value increases for all companies taking advantage of frictionless commerce in the digital economy. Total revenue in the SAP Business Network segment was €400 million (€333 million at constant currencies) in the second quarter, a year-over-year increase of 194% (145% at constant currencies). Approximately 1.9 million connected companies trade over $800 billion of commerce3 on this network.

Regional Performance

Growth was solid in the EMEA region, with a 10% increase in non-IFRS cloud and software revenue. Non-IFRS cloud subscriptions and support revenue grew by 94% with triple-digit growth in new cloud bookings. Some highlights in the region include very strong growth across cloud and software in the Middle East and solid growth in Germany, France and the UK.

The Americas region saw strong double-digit growth, with non-IFRS cloud and software revenue growing 36%. Cloud subscriptions and support revenue in the region grew 141% with new cloud bookings nearly tripling, driven by a very strong performance in North America. The United States was a highlight with a strong performance across cloud and software. Regional macro-economic issues impacted results across Latin America.

In the APJ region, non-IFRS cloud subscriptions and support revenue grew by 138%, driving non-IFRS cloud and software revenue up 19%. New cloud bookings grew triple-digits. Japan continued its recovery with another strong quarter across cloud and software.

FINANCIAL RESULTS IN DETAIL

FINANCIAL RESULTS IN THE SECOND QUARTER 2015

Second Quarter 20151)

IFRS

Non-IFRS2)

€ million, unless otherwise stated

Q2 2015

Q2 2014

% change

Q2 2015

Q2 2014

% change

% change const. curr.

Cloud subscriptions and support

552

241

129

555

242

129

92

Software licenses and support

3,510

3,116

13

3,510

3,117

13

3

Cloud and software

4,062

3,357

21

4,065

3,359

21

9

Total revenue

4,970

4,151

20

4,972

4,153

20

8

Operating profit

701

698

1

1,394

1,236

13

1

Profit after tax

469

556

–16

960

938

2

Basic earnings per share (€)

0.39

0.47

–16

0.80

0.79

2

Number of employees (FTE)

74,497

67,651

10

N/A

N/A

N/A

N/A

1) All figures are unaudited.

2) For a detailed description of SAP's non-IFRS measures see Explanation of Non-IFRS Measures online. For a breakdown of the individual adjustments see page F7 in the appendix to this press release.

IFRS cloud subscriptions and support revenue was €552 million (2014: €241 million), an increase of 129%. Non-IFRS cloud subscriptions and support revenue was €555 million (2014: €242 million), an increase of 129% (92% at constant currencies). IFRS software licenses revenue was €979 million (2014: €957 million), an increase of 2%. Non-IFRS software licenses revenue was €979 million (2014: €957 million), an increase of 2% (a decrease of 7% at constant currencies). IFRS software licenses and support revenue was €3.51 billion (2014: €3.12 billion), an increase of 13%. Non-IFRS software licenses and support revenue was €3.51 billion (2014: €3.12 billion), an increase of 13% (3% at constant currencies). IFRS cloud and software revenue was €4.06 billion (2014: €3.36 billion), an increase of 21%. Non-IFRS cloud and software revenue was €4.06 billion (2014: €3.36 billion), an increase of 21% (9% at constant currencies). IFRS total revenue was €4.97 billion (2014: €4.15 billion), an increase of 20%. Non-IFRS total revenue was €4.97 billion (2014: €4.15 billion), an increase of 20% (8% at constant currencies).

IFRS operating profit was €701 million (2014: €698 million), an increase of 1%. Non-IFRS operating profit was €1.39 billion (2014: €1.24 million), an increase of 13% (1% at constant currencies). IFRS operating margin was 14.1% (2014: 16.8%), a decrease of 2.7 percentage points. Non-IFRS operating margin was 28.0% (2014: 29.8%), a decrease of 1.7 percentage points (2.0 percentage points at constant currencies).

IFRS profit after tax was €469 million (2014: €556 million), a decrease of 16%. Non-IFRS profit after tax was €960 million (2014: €938 million), an increase of 2%. IFRS basic earnings per share was €0.39 (2014: €0.47), a decrease of 16%. Non-IFRS basic earnings per share was €0.80 (2014: €0.79), an increase of 2%. The IFRS and non-IFRS effective tax rates in the second quarter of 2015 were 26.4% (2014: 22.6%) and 27.8% (2014: 25.4%), respectively.

FINANCIAL RESULTS IN THE FIRST HALF 2015

First Half 20151)

IFRS

Non-IFRS2)

€ million, unless otherwise stated

6M 2015

6M 2014

% change

6M 2015

6M 2014

% change

% change const. curr.

Cloud subscriptions and support

1,056

460

129

1,063

463

130

93

Software licenses and support

6,660

5,836

14

6,660

5,839

14

4

Cloud and software

7,715

6,296

23

7,723

6,301

23

10

Total revenue

9,467

7,849

21

9,475

7,854

21

9

Operating profit

1,339

1,421

–6

2,451

2,155

14

0

Profit after tax

882

1,090

–19

1,657

1,604

3

Basic earnings per share (€)

0.74

0.91

–19

1.39

1.34

3

Number of employees (FTE)

74,497

67,651

10

N/A

N/A

N/A

N/A

1) All figures are unaudited.

2) For a detailed description of SAP's non-IFRS measures see Explanation of Non-IFRS Measures online. For a breakdown of the individual adjustments see page F7 in the appendix to this press release.

IFRS cloud subscriptions and support revenue was €1.06 billion (2014: €460 million), an increase of 129%. Non-IFRS cloud subscriptions and support revenue was €1.06 billion (2014: €463 million), an increase of 130% (93% at constant currencies). IFRS software licenses revenue was €1.67 billion (2014: €1.58 billion), an increase of 6%. Non-IFRS software licenses revenue was €1.67 billion (2014: €1.58 billion), an increase of 6% (a decrease of 4% at constant currencies). IFRS software licenses and support revenue was €6.66 billion (2014: €5.84 billion), an increase of 14%. Non-IFRS software licenses and support revenue was €6.66 billion (2014: €5.84 billion), an increase of 14% (4% at constant currencies). IFRS cloud and software revenue was €7.72 billion (2014: €6.30 billion), an increase of 23%. Non-IFRS cloud and software revenue was €7.72 billion (2014: €6.30 billion), an increase of 23% (10% at constant currencies). IFRS total revenue was €9.47 billion (2014: €7.85 billion), an increase of 21%. Non-IFRS total revenue was €9.47 billion (2014: €7.85 billion), an increase of 21% (9% at constant currencies).  

IFRS operating profit was €1.34 billion (2014: €1.42 billion), a decrease of 6%. Non-IFRS operating profit was €2.45 billion (2014: €2.16 billion), an increase of 14% (flat at constant currencies). IFRS operating margin was 14.1% (2014: 18.1%), a decrease of 4.0 percentage points. Non-IFRS operating margin was 25.9% (2014: 27.4%), a decrease of 1.6 percentage points (2.3 percentage points at constant currencies).

IFRS profit after tax was €882 million (2014: €1.09 billion), a decrease of 19%. Non-IFRS profit after tax was €1.66 billion (2014: €1.60 billion), an increase of 3%. IFRS basic earnings per share was €0.74 (2014: €0.91), a decrease of 19%. Non-IFRS basic earnings per share was €1.39 (2014: €1.34), an increase of 3%. The IFRS and non-IFRS effective tax rates for the first half of 2015 were 20.9% (2014: 23.4%) and 25.6% (2014: 25.6%), respectively.

Operating cash flow was €2.78 billion (2014: €2.58 billion), an increase of 8% year-over-year. Free cash flow increased slightly year-over-year to €2.50 billion (2014: €2.27 billion). Free cash flow was 26% of total revenue (2014: 29%). At June 30, 2015, SAP had a total group liquidity of €4.18 billion (December, 2014: €3.42 billion), which includes cash and cash equivalents and current investments. Net liquidity 2 at June 30, 2015 was -€6.25 billion compared to -€7.67 billion at December 31, 2014.

BUSINESS OUTLOOK 2015

The Company reiterates the following 2015 outlook:

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

While the Company's full-year 2015 business outlook is at constant currencies, actual currency reported figures are expected to continue to be impacted by currency exchange rate fluctuations. If exchange rates stay at the June 2015 average level for the rest of the year, the Company would expect approximately a 5 to 8 percentage points currency benefit on cloud and software growth and 5 to 8 percentage points currency benefit on operating profit growth for the third quarter of 2015 and 6 to 9 percentage points and 7 to 10 percentage points respectively for the full-year 2015.

Additional Information 2015 revenue and profit figures include the full revenue and profit from Concur and Fieldglass. The comparative numbers for 2014 include Concur and Fieldglass starting December 4 and May 2, respectively.

For a more detailed description of all of SAP's non-IFRS measures and their limitations as well as our constant currency and free cash flow figures see Explanation of Non-IFRS Measures online.

Second Quarter 2015 Interim Report SAP's second quarter 2015 Interim Report was published today and is available for download at www.sap.com/investor.

Webcast SAP earnings conference call for financial analysts will take place on Tuesday, July 21st at 2:00 PM (CEST) / 1:00 PM (GMT) / 8:00 AM (EDT) / 5:00 AM (PDT). The conference call will be web cast live on the Company's website at www.sap.com/investor and will be available for replay.

About SAP As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 293,500 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.

For more information, financial community only:

Stefan Gruber

+49 (6227) 7-44872

investor@sap.com, CET

Follow SAP Investor Relations on Twitter at @sapinvestor.

For more information, press only:

Nicola Leske

+49 (6227) 7-50852

nicola.leske@sap.com, CET

Daniel Reinhardt

+49 (6227) 7-40201

daniel.reinhardt@sap.com, CET

Andy Kendzie

+1 (202) 312-3919

andy.kendzie@sap.com, ET

For customers interested in learning more about SAP products:

Global Customer Center:

+49 180 534-34-24

United States Only:

1 (800) 872-1SAP (1-800-872-1727)

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.

© 2015 SAP SE.  All rights reserved.

No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE.  The information contained herein may be changed without prior notice.

Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors. National product specifications may vary.

These materials are provided by SAP SE and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials.  The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any.  Nothing herein should be construed as constituting an additional warranty.

SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries.  Please see http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark for additional trademark information and notices.

1 For the second quarter 2015, Fieldglass contributed €21 million and Concur contributed €137 million to SAP's Non-IFRS cloud subscriptions and support revenue at constant currencies. The Fieldglass acquisition was closed on May 2nd 2014.

2 New cloud bookings consist of all order entry of a given period that is expected to be classified as cloud subscription and support revenue and results from purchases by new customers and from incremental purchases by existing customers. The order amount must be contractually committed (i.e. variable amounts from pay-per-use and similar arrangements are not included). Consequently, due to their uncommitted pay-per-use nature Ariba and Fieldglass network transaction fees are not reflected in the new cloud bookings metric. Amounts included in the measure are annualized. Concur contributed €46 million to SAP's new cloud bookings in the second quarter.

3 Network spend volume is the total value of purchase orders transacted on the Ariba, Concur and Fieldglass Networks in the trailing 12 months.

Appendix – Financial Information to Follow

FINANCIAL INFORMATION

FOR THE SECOND QUARTER 2015

(Condensed and Unaudited)

Page

Financial Statements (IFRS, Unaudited)

Consolidated Income Statements

F1-F2

Consolidated Statements of Financial Position

F3

Consolidated Statements of Cash Flows

F4

Supplementary Financial Information (Unaudited)

Reconciliation from Non-IFRS Numbers to IFRS Numbers

F5-F6

Explanation of Non-IFRS Adjustments

F7

Revenue by Region

F8-F9

                                                                                                                                                                                                          

Financial Statements (IFRS, Unaudited)

CONSOLIDATED INCOME STATEMENTS OF SAP GROUP – QUARTER

For the three months ended June 30

€ millions, unless otherwise stated

2015

2014

Change

in %

Cloud subscriptions and support

552

241

129

Software licenses

979

957

2

Software support

2,531

2,158

17

Software licenses and support

3,510

3,116

13

Cloud and software

4,062

3,357

21

Services

908

794

14

Total revenue

4,970

4,151

20

Cost of cloud subscriptions and support

–212

–105

>100

Cost of software licenses and support

–560

–517

8

Cost of cloud and software

–772

–621

24

Cost of services

–835

–667

25

Total cost of revenue

–1,607

–1,289

25

Gross profit

3,363

2,862

18

Research and development

–728

–566

29

Sales and marketing

–1,314

–1,049

25

General and administration

–256

–218

17

Restructuring

–367

–39

>100

TomorrowNow and Versata litigation

0

–289

<-100

Other operating income/expense, net

3

–3

<-100

Total operating expenses

–4,269

–3,453

24

Operating profit

701

698

1

Other non-operating income/expense, net

–53

4

<-100

Finance income

39

47

–17

Finance costs

–50

–30

69

Financial income, net

–11

17

<-100

Profit before tax

637

719

–11

Income tax TomorrowNow and Versata litigation

0

76

<-100

Other income tax expense

–168

–239

–30

Income tax expense

–168

–163

3

Profit after tax

469

556

–16

attributable to owners of parent

471

557

–15

attributable to non-controlling interests

–3

–1

>100

Earnings per share, basic (in €)1)

0.39

0.47

–16

Earnings per share, diluted (in €)1)

0.39

0.47

–16

1) For the three months ended June 30, 2015 and 2014, the weighted average number of shares was 1,196 million (diluted 1,198 million) and 1,194 million (diluted: 1,197 million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.

F1

 

CONSOLIDATED INCOME STATEMENTS OF SAP GROUP – HALF-YEAR

For the six months ended June 30

€ millions, unless otherwise stated

2015

2014

Change

in %

Cloud subscriptions and support

1,056

460

129

Software licenses

1,675

1,581

6

Software support

4,985

4,255

17

Software licenses and support

6,660

5,836

14

Cloud and software

7,715

6,296

23

Services

1,751

1,553

13

Total revenue

9,467

7,849

21

Cost of cloud subscriptions and support

–409

–188

>100

Cost of software licenses and support

–1,103

–1,016

9

Cost of cloud and software

–1,512

–1,204

26

Cost of services

–1,654

–1,321

25

Total cost of revenue

–3,166

–2,525

25

Gross profit

6,301

5,324

18

Research and development

–1,451

–1,116

30

Sales and marketing

–2,568

–2,016

27

General and administration

–528

–423

25

Restructuring

–418

–54

>100

TomorrowNow and Versata litigation

0

–290

<-100

Other operating income/expense, net

3

–4

<-100

Total operating expenses

–8,128

–6,428

26

Operating profit

1,339

1,421

–6

Other non-operating income/expense, net

–201

–7

>100

Finance income

87

69

26

Finance costs

–109

–61

81

Financial income, net

–22

9

<-100

Profit before tax

1,115

1,423

–22

Income tax TomorrowNow and Versata litigation

0

77

<-100

Other income tax expense

–233

–409

–43

Income tax expense

–233

–332

–30

Profit after tax

882

1,090

–19

attributable to owners of parent

885

1,091

–19

attributable to non-controlling interests

–3

–1

>100

Earnings per share, basic (in €)1)

0.74

0.91

–19

Earnings per share, diluted (in €)1)

0.74

0.91

–19

1) For the six months ended June 30, 2015 and 2014, the weighted average number of shares was 1,198 million (diluted 1,200 million) and 1,194 million (diluted: 1,197 million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.

F2

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION OF SAP GROUP

as at June 30, 2015 and December 31, 2014

€ millions

2015

2014

Cash and cash equivalents

3,923

3,328

Other financial assets

381

678

Trade and other receivables

4,521

4,342

Other non-financial assets

634

435

Tax assets

252

215

Total current assets

9,710

8,999

Goodwill

22,157

20,866

Intangible assets

4,557

4,604

Property, plant, and equipment

2,145

2,102

Other financial assets

1,336

1,021

Trade and other receivables

90

100

Other non-financial assets

167

164

Tax assets

262

231

Deferred tax assets

520

230

Total non-current assets

31,233

29,319

Total assets

40,944

38,318

as at June 30, 2015 and December 31, 2014

€ millions

2015

2014

Trade and other payables

989

1,035

Tax liabilities

169

339

Financial liabilities

1,778

2,561

Other non-financial liabilities

2,144

2,810

Provision TomorrowNow and Versata litigation

0

1

Other provisions

494

149

Provisions

494

150

Deferred income

4,196

1,680

Total current liabilities

9,769

8,575

Trade and other payables

66

55

Tax liabilities

387

371

Financial liabilities

9,097

8,980

Other non-financial liabilities

261

219

Provisions

154

151

Deferred tax liabilities

344

356

Deferred income

63

78

Total non-current liabilities

10,373

10,210

Total liabilities

20,142

18,785

Issued capital

1,229

1,229

Share premium

533

614

Retained earnings

17,883

18,317

Other components of equity

2,260

563

Treasury shares

–1,133

–1,224

Equity attributable to owners of parent

20,772

19,499

Non-controlling interests

31

34

Total equity

20,802

19,533

Total equity and liabilities

40,944

38,318

Due to rounding, numbers may not add up precisely.

F3

 

CONSOLIDATED STATEMENTS OF CASH FLOWS OF SAP GROUP

For the six months ended June 30

€ millions

2015

2014

Profit after tax

882

1,090

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

Depreciation and amortization

646

478

Income tax expense

233

332

Financial income, net

22

–9

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

14

16

Other adjustments for non-cash items

–21

32

Decrease/increase in trade and other receivables

32

297

Decrease/increase in other assets

–156

–168

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

–412

–593

Decrease/increase in deferred income

2,361

1,855

Interest paid

–90

–73

Interest received

40

27

Income taxes paid, net of refunds

–776

–709

Net cash flows from operating activities

2,775

2,575

Business combinations, net of cash and cash equivalents acquired

–10

–729

Cash receipts from derivative financial instruments related to business combinations

266

0

Total cashflows for business combinations, net of cash and cash equivalents aquired

256

–729

Purchase of intangible assets and property, plant, and equipment

–276

–304

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

27

27

Purchase of equity or debt instruments of other entities

–1,099

–713

Proceeds from sales of equity or debt instruments of other entities

868

721

Net cash flows from investing activities

–224

–998

Dividends paid

–1,316

–1,194

Proceeds from reissuance of treasury shares

24

27

Proceeds from borrowings

1,745

500

Repayments of borrowings

–2,520

–586

Net cash flows from financing activities

–2,067

–1,253

Effect of foreign currency rates on cash and cash equivalents

111

51

Net decrease/increase in cash and cash equivalents

595

375

Cash and cash equivalents at the beginning of the period

3,328

2,748

Cash and cash equivalents at the end of the period

3,923

3,123

Due to rounding, numbers may not add up precisely.

F4

 

Supplementary Financial Information (Unaudited)

RECONCILIATION FROM NON-IFRS NUMBERS TO IFRS NUMBERS

The following tables present a reconciliation from our non-IFRS numbers (including our non-IFRS at constant currency numbers) to the respective most comparable IFRS numbers. Note: Our non-IFRS numbers are not prepared under a comprehensive set of accounting rules or principles.

For the three months ended June 30

€ millions, unless otherwise stated

2015

2014

Change in %

IFRS

Adj.1)

Non-IFRS1)

Currency

Impact2)

Non-IFRS

Constant

Currency2)

IFRS

Adj.1)

Non-IFRS1)

IFRS

Non-IFRS1)

Non-IFRS

Constant

Currency2)

Revenue Numbers

Cloud subscriptions and support

552

2

555

–89

465

241

1

242

129

129

92

Software licenses

979

0

979

–87

891

957

0

957

2

2

–7

Software support

2,531

0

2,531

–223

2,308

2,158

1

2,160

17

17

7

Software licenses and support

3,510

0

3,510

–310

3,200

3,116

1

3,117

13

13

3

Cloud and software

4,062

2

4,065

–400

3,665

3,357

2

3,359

21

21

9

Services

908

0

908

–90

818

794

0

794

14

14

3

Total revenue

4,970

2

4,972

–489

4,483

4,151

2

4,153

20

20

8

Operating Expense Numbers

Cost of cloud subscriptions and support

–212

25

–187

–105

17

–87

>100

>100

Cost of software licenses and support

–560

73

–487

–517

66

–451

8

8

Cost of cloud and software

–772

98

–674

–621

84

–538

24

25

Cost of services

–835

45

–790

–667

35

–633

25

25

Total cost of revenue

–1,607

143

–1,464

–1,289

118

–1,171

25

25

Gross profit

3,363

145

3,508

2,862

120

2,982

18

18

Research and development

–728

80

–648

–566

35

–531

29

22

Sales and marketing

–1,314

92

–1,223

–1,049

43

–1,006

25

22

General and administration

–256

10

–246

–218

12

–206

17

19

Restructuring

–367

367

0

–39

39

0

>100

0

TomorrowNow and Versata litigation

0

0

0

–289

289

0

<-100

0

Other operating income/expense, net

3

0

3

–3

0

–3

<-100

<-100

Total operating expenses

–4,269

691

–3,578

339

–3,239

–3,453

536

–2,917

24

23

11

Profit Numbers

Operating profit

701

693

1,394

–150

1,244

698

538

1,236

1

13

1

Other non-operating income/expense, net

–53

0

–53

4

0

4

<-100

<-100

Finance income

39

0

39

47

0

47

–17

–17

Finance costs

–50

0

–50

–30

0

–30

69

69

Financial income, net

–11

0

–11

17

0

17

<-100

<-100

Profit before tax

637

693

1,330

719

538

1,257

–11

6

Income tax TomorrowNow and Versata litigation

0

0

0

76

–76

0

<-100

0

Other income tax expense

–168

–201

–369

–239

–80

–319

–30

16

Income tax expense

–168

–201

–369

–163

–156

–319

3

16

Profit after tax

469

492

960

556

382

938

–16

2

attributable to owners of parent

471

492

963

557

382

939

–15

3

attributable to non-controlling interests

–3

0

–3

–1

0

–1

>100

>100

Key Ratios

Operating margin (in %)

14.1

28.0

27.8

16.8

29.8

–2.7pp

–1.7pp

–2.0pp

Effective tax rate (in %)

26.4

27.8

22.6

25.4

3.8pp

2.4pp

Earnings per share, basic (in €)

0.39

0.80

0.47

0.79

–16

2

F5

For the six months ended June 30

€ millions, unless otherwise stated

2015

2014

Change in %

IFRS

Adj.1)

Non-IFRS1)

Currency

Impact2)

Non-IFRS

Constant

Currency2)

IFRS

Adj.1)

Non-IFRS1)

IFRS

Non-IFRS1)

Non-IFRS

Constant

Currency2)

Revenue Numbers

Cloud subscriptions and support

1,056

8

1,063

–168

896

460

2

463

129

130

93

Software licenses

1,675

0

1,675

–157

1,518

1,581

0

1,581

6

6

–4

Software support

4,985

0

4,985

–440

4,545

4,255

3

4,258

17

17

7

Software licenses and support

6,660

0

6,660

–597

6,063

5,836

3

5,839

14

14

4

Cloud and software

7,715

8

7,723

–765

6,958

6,296

5

6,301

23

23

10

Services

1,751

0

1,751

–173

1,578

1,553

0

1,553

13

13

2

Total revenue

9,467

8

9,475

–938

8,537

7,849

5

7,854

21

21

9

Operating Expense Numbers

Cost of cloud subscriptions and support

–409

47

–362

–188

36

–152

>100

>100

Cost of software licenses and support

–1,103

146

–957

–1,016

126

–890

9

8

Cost of cloud and software

–1,512

193

–1,319

–1,204

162

–1,042

26

27

Cost of services

–1,654

96

–1,558

–1,321

61

–1,260

25

24

Total cost of revenue

–3,166

289

–2,877

–2,525

223

–2,302

25

25

Gross profit

6,301

297

6,598

5,324

228

5,552

18

19

Research and development

–1,451

160

–1,291

–1,116

58

–1,057

30

22

Sales and marketing

–2,568

184

–2,383

–2,016

77

–1,939

27

23

General and administration

–528

52

–476

–423

27

–396

25

20

Restructuring

–418

418

0

–54

54

0

>100

0

TomorrowNow and Versata litigation

0

0

0

–290

290

0

<-100

0

Other operating income/expense, net

3

0

3

–4

0

–4

<-100

<-100

Total operating expenses

–8,128

1,104

–7,024

634

–6,391

–6,428

729

–5,699

26

23

12

Profit Numbers

Operating profit

1,339

1,112

2,451

–305

2,146

1,421

735

2,155

–6

14

0

Other non-operating income/expense, net

–201

0

–201

–7

0

–7

>100

>100

Finance income

87

0

87

69

0

69

26

26

Finance costs

–109

0

–109

–61

0

–61

81

81

Financial income, net

–22

0

–22

9

0

9

<-100

<-100

Profit before tax

1,115

1,112

2,227

1,423

735

2,157

–22

3

Income tax TomorrowNow and Versata litigation

0

0

0

77

–77

0

<-100

0

Other income tax expense

–233

–338

–571

–409

–144

–553

–43

3

Income tax expense

–233

–338

–571

–332

–221

–553

–30

3

Profit after tax

882

775

1,657

1,090

514

1,604

–19

3

attributable to owners of parent

885

775

1,660

1,091

514

1,605

–19

3

attributable to non-controlling interests

–3

0

–3

–1

0

–1

>100

>100

Key Ratios

Operating margin (in %)

14.1

25.9

25.1

18.1

27.4

–4.0pp

–1.6pp

–2.3pp

Effective tax rate (in %)

20.9

25.6

23.4

25.6

–2.5pp

0.0pp

Earnings per share, basic (in €)

0.74

1.39

0.91

1.34

–19

3

1) Adjustments in the revenue line items are for software support revenue, cloud subscriptions and support revenue, and other similarly recurring revenues that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges, share-based payment expenses, restructuring expenses, as well as the TomorrowNow and Versata litigation expenses.

2) Constant currency revenue and operating income figures are calculated by translating revenue and operating income of the current period using the average exchange rates from the previous year's respective period instead of the current period. Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS number of the previous year's respective period.

For a more detailed description of these adjustments and their limitations as well as our constant currency figures, see our Web site www.sap.com/corporate-en/investors/newsandreports/reporting-framework.epx under "Non-IFRS Measures and Estimates".

Due to rounding, numbers may not add up precisely.

F6

 

EXPLANATION OF NON-IFRS ADJUSTMENTS

€ millions, unless otherwise stated

Q2 2015

1/1–

6/30/2015

Q2 2014

1/1–

6/30/2014

Operating profit (IFRS)

701

1,339

698

1,421

Revenue adjustments

2

8

2

5

Adjustment for acquisition-related charges 

188

371

131

261

Adjustment for share-based payment expenses

135

314

76

124

Adjustment for restructuring

367

418

39

54

Adjustment for TomorrowNow and Versata litigation

0

0

289

290

Operating expense adjustments

691

1,104

536

729

Operating profit adjustments

693

1,112

538

735

Operating profit (Non-IFRS)

1,394

2,451

1,236

2,155

Due to rounding, numbers may not add up precisely.

F7

 

REVENUE BY REGION

The following tables present our IFRS and non-IFRS revenue by region based on customer location. The tables also present a reconciliation from our non-IFRS revenue (including our non-IFRS revenue at constant currency) to the respective most comparable IFRS revenue.

Note: Our non-IFRS revenues are not prepared under a comprehensive set of accounting rules or principles.

For the three months ended June 30

€ millions

2015

2014

 Change in %

IFRS

Adj. 1)

Non-IFRS 1)

Currency

Impact 2)

Non-IFRS

Constant

Currency 2)

IFRS

Adj. 1)

Non-IFRS 1)

IFRS

Non-IFRS 1)

Non-IFRS

Constant

Currency 2)

Cloud subscriptions and support revenue by region

EMEA

115

0

115

–12

104

60

0

60

93

94

74

Americas

388

2

390

–72

318

160

1

162

142

141

96

APJ

50

0

50

–6

44

21

0

21

137

138

111

Cloud subscriptions and support revenue

552

2

555

–89

465

241

1

242

129

129

92

Cloud and software revenue by region

EMEA

1,743

0

1,743

–52

1,691

1,583

1

1,584

10

10

7

Americas

1,684

2

1,686

–284

1,403

1,241

2

1,243

36

36

13

APJ

635

0

635

–64

571

533

0

532

19

19

7

Cloud and software revenue

4,062

2

4,065

–400

3,665

3,357

2

3,359

21

21

9

Total revenue by region

Germany

629

0

629

–1

628

597

0

597

5

5

5

Rest of EMEA

1,504

0

1,504

–63

1,441

1,369

1

1,370

10

10

5

Total EMEA

2,133

0

2,133

–64

2,069

1,967

1

1,967

8

8

5

United States

1,657

2

1,659

–317

1,342

1,162

2

1,163

43

43

15

Rest of Americas

413

0

413

–31

381

384

0

384

7

7

–1

Total Americas

2,070

2

2,072

–349

1,723

1,546

2

1,547

34

34

11

Japan

152

0

152

–6

146

134

0

134

13

13

9

Rest of APJ

616

0

616

–70

545

504

0

504

22

22

8

Total APJ

768

0

768

–77

691

638

0

638

20

20

8

Total revenue 

4,970

2

4,972

–489

4,483

4,151

2

4,153

20

20

8

F8

For the six months ended June 30th

€ millions

2015

2014

 Change in %

IFRS

Adj.1)

Non-IFRS 1)

Currency

Impact 2)

Non-IFRS

Constant

Currency 2)

IFRS

Adj. 1)

Non-IFRS 1)

IFRS

Non-IFRS 1)

Non-IFRS

Constant

Currency 2)

Cloud subscriptions and support revenue by region

EMEA

230

1

231

–23

208

114

0

114

103

103

83

Americas

731

7

738

–133

605

307

2

309

138

138

96

APJ

94

0

94

–12

82

40

0

40

137

137

108

Cloud subscriptions and support revenue

1,056

8

1,063

–168

896

460

2

463

129

130

93

Cloud and software revenue by region

EMEA

3,312

1

3,314

–88

3,225

2,976

2

2,978

11

11

8

Americas

3,193

7

3,200

–547

2,652

2,372

3

2,375

35

35

12

APJ

1,209

0

1,210

–129

1,081

948

0

948

28

28

14

Cloud and software revenue

7,715

8

7,723

–765

6,958

6,296

5

6,301

23

23

10

Total revenue by region

Germany

1,187

0

1,187

–2

1,185

1,132

0

1,132

5

5

5

Rest of EMEA

2,887

1

2,888

–110

2,778

2,602

1

2,604

11

11

7

Total EMEA

4,074

1

4,075

–112

3,963

3,734

2

3,736

9

9

6

United States

3,112

6

3,119

–583

2,536

2,225

3

2,228

40

40

14

Rest of Americas

812

0

812

–87

725

740

0

740

10

10

–2

Total Americas

3,924

7

3,931

–670

3,261

2,965

3

2,968

32

32

10

Japan

306

0

307

–15

292

264

0

264

16

16

11

Rest of APJ

1,163

0

1,163

–142

1,021

886

0

886

31

31

15

Total APJ

1,469

0

1,469

–156

1,313

1,149

0

1,150

28

28

14

Total revenue 

9,467

8

9,475

–938

8,537

7,849

5

7,854

21

21

9

1) Adjustments in the revenue line items are for software support revenue, cloud subscriptions and support revenue, and other similarly recurring revenues that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules.

2) Constant currency revenue figures are calculated by translating revenue of the current period using the average exchange rates from the previous year's respective period instead of the current period. Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS number of the previous year's respective period.

For a more detailed description of these adjustments and their limitations as well as our constant currency figures, see our Web site www.sap.com/corporate-en/investors/newsandreports/reporting-framework.epx under "Non-IFRS Measures and Estimates".

Due to rounding, numbers may not add up precisely.

F9

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