UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
January 15, 2021
Commission file number:
1-14251
SAP SE
(Exact name of registrant as specified in its charter)
SAP EUROPEAN COMPANY
(Translation of registrant's name into English)
Dietmar-Hopp-Allee 16
69190 Walldorf
Federal Republic of Germany
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
| Form 20-F x | Form 40-F ¨ |
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
| Yes ¨ | No x |
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_____.
SAP SE
FORM 6-K
On January 15, 2021, SAP SE, (“SAP"), issued a press release (the “Press Release”) announcing its preliminary financial results for the fourth quarter and full year ended December 31, 2020. The Press Release is attached as Exhibit 99.1 hereto and incorporated by reference herein.
This Press Release discloses certain non-IFRS measures. These measures are not prepared in accordance with IFRS and are therefore considered non-IFRS financial measures. The non-IFRS financial measures that we report should be considered in addition to, and not as substitutes for or superior to, revenue, operating income, cash flows, or other measures of financial performance prepared in accordance with IFRS.
Please refer to Explanations of Non-IFRS Measures online (http://global.sap.com/corporate-en/investors/pdf/sap-non-ifrs-measures.pdf) for further information regarding the non-IFRS measures.
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 (the "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.
2
EXHIBITS
| Exhibit No. | Exhibit |
| 99.1 | Press Release dated January 15, 2021 |
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SAP SE | |||
| (Registrant) | |||
| By: | /s/ Christopher Sessar | ||
| Name: | Dr. Christopher Sessar | ||
| Title: | Chief Accounting Officer | ||
| By: | /s/ Julia Zicke | ||
| Name: | Dr. Julia Zicke | ||
| Title: | Head of Corporate External Reporting | ||
Date: January 15, 2021
4
EXHIBIT INDEX
| Exhibit No. | Exhibit |
| 99.1 | Press Release dated January 15, 2021 |
5
Exhibit 99.1
For Immediate Release
| SAP Announces Preliminary Fourth Quarter 2020 Results | January 14, 2021 |
SAP Pre-Announces Strong Fourth Quarter and Full-Year 2020 Results Topline Exceeds Revised 2020 Outlook, Profit Hits High End Stellar Cash Flow Performance
Fourth Quarter
| · | IFRS Cloud Revenue Up 8%; Non-IFRS Cloud Revenue Up 13% At Constant Currencies |
| · | Current Cloud Backlog Up 14% At Constant Currencies |
| · | IFRS Software Licenses Revenue Down 15%; Non-IFRS Software Licenses Revenue Down 11% At Constant Currencies |
| · | IFRS Cloud & Software Revenue Down 4%; Non-IFRS Cloud & Software Revenue Up 1% At Constant Currencies |
| · | IFRS Operating Profit Up 26%; Non-IFRS Operating Profit Up 3% At Constant Currencies |
| · | IFRS Operating Margin Up 9.1pp; Non-IFRS Operating Margin Up 1.5pp At Constant Currencies |
Full Year
| · | Non-IFRS Operating Profit Reaches High End of Revised Outlook Range |
| · | Operating Cash Flow Expected At Around €7.0 Billion, Approximately Doubling Year-over-Year; Free Cash Flow Expected At Around €5.9 Billion; Significantly Exceeding Raised Outlook |
| · | 2021 Outlook Reflects Expedited Move to Cloud |
“The world's leading companies are turning to SAP to become intelligent enterprises. We are reinventing how businesses run by accelerating our customers’ transformation in the cloud. Our strong finish to the year and the upcoming launch of our new holistic business transformation offering position us well to meet our new outlook targets.”
Christian Klein, CEO
“In a uniquely challenging environment, 2020 was a record year for cash flow in every single quarter and the full year. Our better-than-anticipated top line performance combined with our quick response on the cost side drove strong operating profit. SAP’s expedited shift to the cloud will drive long-term, sustainable growth while significantly increasing the resiliency and predictability of our business.”
Luka Mucic, CFO
| SAP Announces Preliminary Fourth Quarter 2020 Results | 1 |
Fourth Quarter Business Update
Walldorf, Germany – January 14, 2021. After an initial review of its fourth-quarter 2020 performance, SAP SE (NYSE: SAP) today announced its preliminary financial results for the fourth quarter and full year ended December 31, 2020. All 2020 figures in this release are approximate due to the preliminary nature of the announcement.
SAP’s business performance sequentially improved in the fourth quarter even as the COVID-19 crisis persisted and lockdowns were reintroduced in many regions. Cloud revenue in the fourth quarter continued to be impacted by lower pay-as-you-go transactional revenue, mainly Concur business travel related. However, continued high demand for e-commerce, Business Technology Platform, and Qualtrics solutions along with several competitive wins – particularly for SuccessFactors Human Experience Management – produced a strong finish to the year for SAP’s cloud business. SAP also saw strong early take up of its new holistic business transformation offering among pilot customers, contributing to the cloud performance in the quarter. Both North America and Europe experienced a better-than-expected performance in cloud order entry as well as software licenses revenue reflecting strong demand for SAP’s digital supply chain solutions in particular. In addition SAP had significant competitive wins in ERP.
Throughout the COVID-19 crisis, SAP continues to serve its customers effectively with an embedded virtual sales and remote implementation strategy. The company retains a disciplined approach to hiring and discretionary spend while capturing natural savings e.g. from lower travel, facility-related costs and virtual events. In combination with the strong topline performance these actions drove higher operating profit (IFRS and non-IFRS at constant currencies) and operating margin despite the challenging macro environment.
Fourth-Quarter and Full-Year Financial Performance
In the fourth quarter, current cloud backlog was up 7% to €7.15 billion (up 14% at constant currencies). Cloud revenue was up 8% year over year to €2.04 billion (IFRS), up 7% to €2.04 billion (non-IFRS) and up 13% (non-IFRS at constant currencies). Software licenses revenue was down 15% year over year to €1.70 billion (IFRS and non-IFRS) and down 11% (non-IFRS at constant currencies). Cloud and software revenue was down 4% year over year to €6.58 billion (IFRS and non-IFRS) and up 1% (non-IFRS at constant currencies). Total revenue was down 6% year over year to €7.54 billion (IFRS and non-IFRS) and down 2% (non-IFRS at constant currencies).
The share of more predictable revenue1 grew by approximately 4 percentage points year over year to approximately 65% in the fourth quarter.
In the fourth quarter, IFRS operating profit and operating margin were positively impacted by lower share-based compensation expenses compared to the prior year period. Operating profit increased by 26% year over year to €2.65 billion (IFRS) and was down 3% to €2.77 billion (non-IFRS) and up 3% (non-IFRS at constant currencies). Operating margin increased by 9.1 percentage points year over year to 35.2% (IFRS) and increased 1.4 percentage points year over year to 36.7% (non-IFRS) and 1.5 percentage points to 36.8% (non-IFRS at constant currencies).
For the full year, cloud revenue grew 17% year over year to €8.08 billion (IFRS), up 15% to €8.09 billion (non-IFRS) and up 18% (non-IFRS at constant currencies). Software licenses revenue was down 20% year over year to €3.64 billion (IFRS and non-IFRS) and down 17% (non-IFRS at constant currencies). Cloud and software revenue was up 1% year over year to €23.23 billion (IFRS and non-IFRS) and up 3% (non-IFRS at constant currencies). Total revenue was down 1% year over year to €27.34 billion (IFRS and non-IFRS) and up 1% (non-IFRS at constant currencies).
For the full year, the share of more predictable revenue1 grew by approximately 5 percentage points year over year to approximately 72%.
For the full year, IFRS operating profit and operating margin were positively impacted by significantly lower restructuring charges as well as lower share-based compensation expenses compared to 2019. Operating profit increased by 48% year over year to €6.62 billion (IFRS) and was up 1% to €8.28 billion (non-IFRS) and up 4% (non-IFRS at constant currencies). Operating margin increased 8.0 percentage points year over year to 24.2% (IFRS) and increased 0.6 percentage points year over year to 30.3% (non-IFRS) and 0.8 percentage points to 30.5% (non-IFRS at constant currencies) for the full year.
Operating cash flow for the full year is expected to be at around €7.0 billion, approximately doubling year-over-year and significantly above the raised outlook of approximately €6.0 billion. Free cash flow for the full year is expected to be at around €5.9 billion, significantly above the raised outlook of above €4.5 billion. Cash flow was positively impacted by lower tax and restructuring payments and a successful working capital management.
1 Share of more predictable revenue is the total of non-IFRS cloud revenue and non-IFRS software support revenue as a percentage of total revenue.
| SAP Announces Preliminary Fourth Quarter 2020 Results | 2 |
Financial Results at a Glance
Fourth Quarter 2020
| IFRS | Non-IFRS1) | ||||||
| € billion, unless otherwise stated | Q4 2020 | Q4 2019 | ∆ in % | Q4 2020 | Q4 2019 | ∆ in % | ∆
in % constant currency |
| Current Cloud Backlog2) | NA | NA | NA | 7.15 | 6.68 | 7 | 14 |
| Cloud revenue | 2.04 | 1.90 | 8 | 2.04 | 1.91 | 7 | 13 |
| Software licenses revenue | 1.70 | 2.00 | –15 | 1.70 | 2.00 | –15 | –11 |
| Software support revenue | 2.83 | 2.95 | –4 | 2.83 | 2.95 | –4 | 0 |
| Software licenses and support revenue | 4.54 | 4.95 | –8 | 4.54 | 4.95 | –8 | –4 |
| Cloud and software revenue | 6.58 | 6.85 | –4 | 6.58 | 6.86 | –4 | 1 |
| Total revenue | 7.54 | 8.04 | –6 | 7.54 | 8.05 | –6 | –2 |
| Share of more predictable revenue (in %) | 65 | 60 | 4pp | 65 | 60 | 4pp | |
| Operating profit (loss) | 2.65 | 2.10 | 26 | 2.77 | 2.84 | –3 | 3 |
| Profit (loss) after tax | 1.93 | 1.64 | 18 | 2.02 | 2.19 | –8 | |
| Operating margin (in %) | 35.2 | 26.1 | 9.1pp | 36.7 | 35.3 | 1.4pp | 1.5pp |
| Number of employees (FTE, December 31) | 102,430 | 100,330 | 2 | NA | NA | NA | NA |
Full Year 2020
| IFRS | Non-IFRS1) | ||||||
| € billion, unless otherwise stated | Q1–Q4 2020 |
Q1–Q4 2019 |
Δ in % | Q1–Q4 2020 |
Q1–Q4 2019 |
Δ in % | Δ
in % constant currency |
| Current Cloud Backlog2) | NA | NA | NA | 7.15 | 6.68 | 7 | 14 |
| Cloud revenue | 8.08 | 6.93 | 17 | 8.09 | 7.01 | 15 | 18 |
| Software licenses revenue | 3.64 | 4.53 | –20 | 3.64 | 4.53 | –20 | –17 |
| Software support revenue | 11.51 | 11.55 | 0 | 11.51 | 11.55 | 0 | 1 |
| Software licenses and support revenue | 15.15 | 16.08 | –6 | 15.15 | 16.08 | –6 | –4 |
| Cloud and software revenue | 23.23 | 23.01 | 1 | 23.23 | 23.09 | 1 | 3 |
| Total revenue | 27.34 | 27.55 | –1 | 27.34 | 27.63 | –1 | 1 |
| Share of more predictable revenue (in %) | 72 | 67 | 5pp | 72 | 67 | 5pp | |
| Operating profit (loss) | 6.62 | 4.47 | 48 | 8.28 | 8.21 | 1 | 4 |
| Profit (loss) after tax | 5.28 | 3.37 | 57 | 6.53 | 6.15 | 6 | |
| Operating margin (in %) | 24.2 | 16.2 | 8.0pp | 30.3 | 29.7 | 0.6pp | 0.8pp |
| Number of employees (FTE, December 31) | 102,430 | 100,330 | 2 | NA | NA | NA | NA |
1) For a detailed description of SAP’s non-IFRS measures Explanation of Non-IFRS Measures online.
2) As this is an order entry metric, there is no IFRS equivalent.
All figures are preliminary and unaudited. Due to rounding, numbers may not add up precisely.
| SAP Announces Preliminary Fourth Quarter 2020 Results | 3 |
Non-IFRS Adjustments
The total difference between non-IFRS revenue metrics and the respective IFRS revenue metrics results from adjusting the impact of business combination fair value accounting. In the fourth quarter, the difference between non-IFRS operating profit and IFRS operating profit includes, in addition to the revenue adjustments of significantly less than €0.01 billion (Q4 2019: €0.01 billion),
· adjustments for acquisition-related charges of €0.17 billion (Q4 2019: €0.17 billion),
· adjustments for share-based payment expenses of €0.02 billion (Q4 2019: €0.52 billion) and
· adjustments for restructuring expenses of €0.01 billion (Q4 2019: €0.03 billion).
For the full-year 2020, the difference between non-IFRS operating profit and IFRS operating profit includes, in addition to the revenue adjustments of significantly less than €0.01 billion (FY 2019: €0.08 billion),
· adjustments for acquisition-related charges of €0.64 billion (FY 2019: €0.69 billion),
· adjustments for share-based payment expenses of €1.08 billion (FY 2019: €1.84 billion) and
· adjustments for restructuring expenses of €0.01 billion (FY 2019: €1.13 billion).
For more details on the individual adjusted expense and revenue categories, our reasons for providing non-IFRS measures and the limitations of our non-IFRS measures please refer to Explanation of Non-IFRS Measures.
Business Outlook
SAP provides the following full-year 2021 outlook reflecting its solid business momentum and best estimates concerning the timing and pace of recovery from the COVID-19 crisis. This outlook assumes the COVID-19 crisis will begin to recede as vaccine programs roll out globally, leading to a gradually improving demand environment in the second half of 2021.
· SAP expects €9.1 – 9.5 billion non-IFRS cloud revenue at constant currencies (2020: €8.09 billion), up 13% to 18% at constant currencies
· SAP expects €23.3 – 23.8 billion non-IFRS cloud and software revenue at constant currencies (2020: €23.23 billion), flat to up 2% at constant currencies
· SAP expects €7.8 – 8.2 billion non-IFRS operating profit at constant currencies (2020: €8.28 billion), down 1% to 6% at constant currencies
· The share of more predictable revenue (defined as the total of cloud revenue and software support revenue) is expected to reach approximately 75% (2020: 72%).
While SAP’s full-year 2021 business outlook is at constant currencies, actual currency reported figures are expected to be impacted by currency exchange rate fluctuations as the Company progresses through the year. See the table below for the Q1 and FY 2021 expected currency impacts.
| Expected Currency Impact Based on December 2020 Level for the Rest of the Year | ||
| In percentage points | Q1 | FY |
| Cloud revenue | -6pp to -8pp | -3pp to -5pp |
| Cloud and software revenue | -5pp to -7pp | -2pp to -4pp |
| Operating profit | -7pp to -9pp | -2pp to -4pp |
SAP also confirms its mid-term ambition which was previously published in its Q3 2020 Quarterly Statement.
| SAP Announces Preliminary Fourth Quarter 2020 Results | 4 |
Additional Information
The 2019 comparative numbers for full year only include Qualtrics revenues and profits from acquisition date of January 23rd.
This press release and all information therein is preliminary and unaudited.
Fourth Quarter 2020 Quarterly Statement
SAP’s fourth quarter 2020 quarterly statement will be published on January 29, 2021 and will be available for download at www.sap.com/investor.
Webcast
SAP senior management will host a virtual press conference on Friday, January 29th at 10:00 AM (CET) / 9:00 AM (GMT) / 4:00 AM (Eastern) / 1:00 AM (Pacific), followed by a financial analyst conference call at 2:00 PM (CET) / 1:00 PM (GMT) / 8:00 AM (Eastern) / 5:00 AM (Pacific). Both conferences will be webcast live on the Company’s website at www.sap.com/investor and will be available for replay. Supplementary financial information pertaining to the fourth quarter and full-year results can be found at www.sap.com/investor.
Virtual Launch Event
SAP will hold a virtual event to launch its new holistic business transformation offering “RISE with SAP” on Wednesday, January 27th at 4:00 PM (CET) / 10:00 AM (Eastern).
About SAP
SAP’s strategy is to help every business run as an intelligent enterprise. As a market leader in enterprise application software, we help companies of all sizes and in all industries run at their best: 77% of the world’s transaction revenue touches an SAP® system. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. SAP helps give people and organizations deep business insight and fosters collaboration that helps them stay ahead of their competition. We simplify technology for companies so they can consume our software the way they want – without disruption. Our end-to-end suite of applications and services enables business and public customers across 25 industries globally to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, SAP helps the world run better and improve people’s lives. For more information, visit http://www.sap.com.
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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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| SAP Announces Preliminary Fourth Quarter 2020 Results | 5 |
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| SAP Announces Preliminary Fourth Quarter 2020 Results | 6 |