EX-99.1 2 d41809dex991.htm EXHIBIT 99.1 Exhibit 99.1
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Exhibit 99.1

 

SAP Announces Third Quarter and Nine Months 2015 Results    Page 1

 

LOGO

For Immediate Release

October 20, 2015

SAP Announces Third Quarter and Nine Months 2015 Results

Cloud Revenue up 116% – Non-IFRS Operating Profit Up 19%

 

  •  

Strong Growth in New Cloud Bookings: Up 102%

 

  •  

Non-IFRS Cloud and Software Revenue Up 19% to €4.12 Billion

 

  •  

HANA Continues to Soar – SAP S/4HANA Customer Count Exceeds 1,300

 

  •  

Non-IFRS Operating Profit Increased 19% to €1.62 Billion, Non-IFRS Earnings per Share Increased 16% to €0.98

 

  •  

Reiterates Full Year 2015 Outlook

WALLDORF, Germany – October 20, 2015 – SAP SE (NYSE: SAP) today announced its financial results for the third quarter and nine months ended September 30, 2015.

SAP again delivered strong growth in the cloud, outpacing most pure cloud competitors even without the contribution from the Concur acquisition. Third quarter non-IFRS cloud subscriptions and support revenue grew 116% year-over-year (90% at constant currencies) to €600 million.1 New cloud bookings, the key measure for SAP’s sales success in the cloud, increased 102% in the third quarter to €216 million.2

The Company had very strong top and bottom line growth in the third quarter. Non-IFRS cloud and software revenue increased 19% (12% at constant currencies) to €4.12 billion. Non-IFRS operating profit increased 19% (15% at constant currencies) to €1.62 billion.

“SAP is enabling companies to Run Simple,” said SAP CEO Bill McDermott. “Whether it’s optimizing the customer experience, collaborating with partners across a digital network, engaging your workforce or managing your core operations with S/4HANA – we are helping our customers go digital. The HANA database and platform are the foundation for a ‘live system strategy’ enabling companies to capture the immense Internet of Things opportunity. This new architecture defeats complexity and radically increases speed so businesses can execute their mission in real-time. Our strong Q3 results are the latest validation of our strategy.”

“What I am particularly pleased about is that our operating profit grew even faster than our revenue. This reflects the positive impact of our business transformation and our continued focus on operating excellence across all of our lines of business, as shown in particular by an almost 9 percentage point year-over-year increase in our cloud gross margin,” said SAP CFO Luka Mucic. “In addition, we continued to increase our operating and free cash flow. In fact, we exceeded €3.2 billion for the first nine months in operating cash flow, while free cash flow marked an 8% increase year-over-year.”

 

1  For the third quarter 2015, Concur contributed €149 million to SAP’s Non-IFRS cloud subscriptions and support revenue at constant currencies.

 

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 transaction-based fees are not reflected in the new cloud bookings metric. Amounts included in the measure are annualized. Concur contributed €59 million to SAP’s new cloud bookings in the third quarter.

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SAP Announces Third Quarter and Nine Months 2015 Results

 

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BUSINESS HIGHLIGHTS IN THE THIRD QUARTER 2015

Continued Momentum in Human Capital Management and Customer Engagement and Commerce

Customers continue to turn to SAP to manage their global workforce, both permanent and flexible. SuccessFactors Employee Central, which is the core of our Human Capital Management offerings, is localized for 73 countries and the number of customers has increased 79% to more than 800 in just 12 months. SAP is increasingly winning against its key HCM competitors, especially in markets outside of the United States.

SAP saw excellent growth in its Customer Engagement and Commerce solutions. SAP helps businesses manage the shift from traditional CRM to real-time customer engagement where the lines between marketing, sales, service, and commerce are fading. SAP is unique in that it can help businesses connect the front-office and back-office in real-time and fulfill ecommerce in one end to end value chain. New cloud bookings for Customer Engagement and Commerce saw strong double-digit growth.

Exceptional SAP S/4HANA Traction

Customer adoption of SAP HANA continues to surge on the back of high demand for our new digital core solution SAP S/4HANA. SAP S/4HANA’s robust early traction continues with more than 1,300 SAP S/4HANA customers by the end of the third quarter across all industries and regions. SAP S/4HANA enabled strong growth across our portfolio and allows customers to turn insight into action by seamlessly connecting their entire value chain in real time.

Strong Business Network Momentum – Triple Digit Growth, Concur Accelerates

SAP is digitizing ecosystem collaborations with its Business Network solutions. Total revenue in the SAP Business Network segment was €412 million (€358 million at constant currencies) in the third quarter, a year-over-year increase of 159% (125% at constant currencies). Concur’s new business momentum has seen a significant increase since the acquisition with further acceleration of bookings in the third quarter 2015.

Approximately 1.9 million connected companies trade over $730 billion of commerce3 on the Ariba network, approximately 30 million end users process travel and expenses with Concur annually and customers are managing 1.7 million flexible workers with the Fieldglass platform annually.

Regional Performance

The EMEA region had an outstanding performance in the third quarter, with a 13% increase in non-IFRS cloud and software revenue. Non-IFRS cloud subscriptions and support revenue grew by 67% with high double-digit growth in new cloud bookings. Highlights in the region include strong software license performance in Germany and France.

The Americas region had strong double-digit growth, with non-IFRS cloud and software revenue rising 32%. Cloud subscriptions and support revenue in the region grew 139% with new cloud bookings growing by triple-digits. An improved performance in Latin America which stabilized amid macroeconomic challenges contributed to this growth.

 

 

3  Network spend volume is the total value of purchase orders transacted on the Ariba Network in the trailing 12 months. In previous quarters this also included Concur and Fieldglass for which as of the third quarter 2015 separate more relevant metrics are disclosed.

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SAP Announces Third Quarter and Nine Months 2015 Results

 

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In the APJ region, non-IFRS cloud subscriptions and support revenue grew 88%, driving non-IFRS cloud and software revenue up 8%. New cloud bookings grew by double-digits. In the APJ region SAP had strong growth in India and South Korea across cloud and software.

FINANCIAL RESULTS IN DETAIL

FINANCIAL RESULTS IN THE THIRD QUARTER 2015

 

     Third Quarter 20151)  
     IFRS      Non-IFRS2)  

€ million, unless otherwise stated

    Q3
2015		      Q3
2014		      %
change		      Q3
2015		      Q3
2014		      %
change		      % change
const. curr.		  

Cloud subscriptions and support

      599         277         116         600         278         116         90   

Software licenses and support

      3,523         3,184         11         3,524         3,185         11         6   

Cloud and software

      4,122         3,461         19         4,124         3,463         19         12   

Total revenue

      4,985         4,254         17         4,987         4,256         17         10   

Operating profit

      1,214         1,157         5         1,616         1,355         19         15   

Profit after tax

      895         881         2         1,173         1,010         16      

Basic earnings per share (€)

      0.75         0.74         2         0.98         0.84         16      

Number of employees (FTE)

      75,643         68,835         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 €599 million (2014: €277 million), an increase of 116%. Non-IFRS cloud subscriptions and support revenue was €600 million (2014: €278 million), an increase of 116% (90% at constant currencies). IFRS software licenses revenue was €1.01 billion (2014: €951 million), an increase of 7%. Non-IFRS software licenses revenue was €1.02 billion (2014: €952 million), an increase of 7% (4% at constant currencies). IFRS software licenses and support revenue was €3.52 billion (2014: €3.18 billion), an increase of 11%. Non-IFRS software licenses and support revenue was €3.52 billion (2014: €3.18 billion), an increase of 11% (6% at constant currencies). IFRS cloud and software revenue was €4.12 billion (2014: €3.46 billion), an increase of 19%. Non-IFRS cloud and software revenue was €4.12 billion (2014: €3.46 billion), an increase of 19% (12% at constant currencies). IFRS total revenue was €4.98 billion (2014: €4.25 billion), an increase of 17%. Non-IFRS total revenue was €4.99 billion (2014: €4.26 billion), an increase of 17% (10% at constant currencies).

IFRS operating profit was €1.21 billion (2014: €1.16 billion), an increase of 5%. Non-IFRS operating profit was €1.62 billion (2014: €1.36 billion), an increase of 19% (15% at constant currencies). IFRS operating margin was 24.3% (2014: 27.2%), a decrease of 2.9 percentage points. Non-IFRS operating margin was 32.4% (2014: 31.8%), an increase of 0.6 percentage points (1.3 percentage points at constant currencies).

IFRS profit after tax was €895 million (2014: €881 million), an increase of 2%. Non-IFRS profit after tax was €1.17 billion (2014: €1.01 billion), an increase of 16%. IFRS basic earnings per share was €0.75 (2014: €0.74), an increase of 2%. Non-IFRS basic earnings per share was €0.98 (2014: €0.84), an increase of 16%. The IFRS and non-IFRS effective tax rates in the third quarter of 2015 were 27.1% (2014: 26.5%) and 28.0% (2014: 27.7%), respectively.

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SAP Announces Third Quarter and Nine Months 2015 Results

 

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FINANCIAL RESULTS IN THE FIRST NINE MONTHS 2015

 

     Nine Months 20151)  
     IFRS      Non-IFRS2)  

€ million, unless otherwise stated

    9M
2015		      9M
2014		      %
change		      9M
2015		      9M
2014		      %
change		      % change
const. curr.		  

Cloud subscriptions and support

      1,654         738         124         1,664         741         124         92   

Software licenses and support

      10,183         9,019         13         10,184         9,023         13         4   

Cloud and software

      11,837         9,757         21         11,848         9,764         21         11   

Total revenue

      14,451         12,103         19         14,462         12,110         19         9   

Operating profit

      2,552         2,578         –1         4,066         3,510         16         5   

Profit after tax

      1,778         1,971         –10         2,831         2,615         8      

Basic earnings per share (€)

      1.49         1.65         –10         2.37         2.19         8      

Number of employees (FTE)

      75,643         68,835         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 €1.65 billion (2014: €738 million), an increase of 124%. Non-IFRS cloud subscriptions and support revenue was €1.66 billion (2014: €741 million), an increase of 124% (92% at constant currencies). IFRS software licenses revenue was €2.69 billion (2014: €2.53 billion), an increase of 6%. Non-IFRS software licenses revenue was €2.69 billion (2014: €2.53 billion), an increase of 6% (a decrease of 1% at constant currencies). IFRS software licenses and support revenue was €10.18 billion (2014: €9.02 billion), an increase of 13%. Non-IFRS software licenses and support revenue was €10.18 billion (2014: €9.02 billion), an increase of 13% (4% at constant currencies). IFRS cloud and software revenue was €11.84 billion (2014: €9.76 billion), an increase of 21%. Non-IFRS cloud and software revenue was €11.85 billion (2014: €9.76 billion), an increase of 21% (11% at constant currencies). IFRS total revenue was €14.45 billion (2014: €12.10 billion), an increase of 19%. Non-IFRS total revenue was €14.46 billion (2014: €12.11 billion), an increase of 19% (9% at constant currencies).

IFRS operating profit was €2.55 billion (2014: €2.58 billion), a decrease of 1%. Non-IFRS operating profit was €4.07 billion (2014: €3.51 billion), an increase of 16% (5% at constant currencies). IFRS operating margin was 17.7% (2014: 21.3%), a decrease of 3.6 percentage points. Non-IFRS operating margin was 28.1% (2014: 29.0%), a decrease of 0.9 percentage points (1.0 percentage points at constant currencies).

IFRS profit after tax was €1.78 billion (2014: €1.97 billion), a decrease of 10%. Non-IFRS profit after tax was €2.83 billion (2014: €2.61 billion), an increase of 8%. IFRS basic earnings per share was €1.49 (2014: €1.65), a decrease of 10%. Non-IFRS basic earnings per share was €2.37 (2014: €2.19), an increase of 8%. The IFRS and non-IFRS effective tax rates for the first nine months of 2015 were 24.2% (2014: 24.8%) and 26.6% (2014: 26.4%), respectively.

Operating cash flow was €3.24 billion (2014: €3.08 billion), an increase of 5% year-over-year. Free cash flow increased slightly year-over-year to €2.82 billion (2014: €2.61 billion). Free cash flow was 19% of total revenue (2014: 22%). At September 30, 2015, SAP had a total group liquidity of €4.61 billion (December 31, 2014: €3.42 billion), which includes cash and cash equivalents and current investments. Net liquidity 2 at September 30, 2015 was -€5.82 billion compared to -€7.67 billion at December 31, 2014.

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SAP Announces Third Quarter and Nine Months 2015 Results    Page 5

BUSINESS OUTLOOK 2015

The Company reiterates the following full year 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 remain at the September 2015 average rates for the rest of the year, the Company expects its non-IFRS cloud and software revenue growth rate as well as its non-IFRS operating profit growth rate to experience a currency benefit in a range of 7 to 9 percentage points for the full-year 2015 (2 to 4 percentage points for the fourth quarter 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.

Third Quarter 2015 Interim Report

SAP’s third 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, October 20th 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 296,000 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

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SAP Announces Third Quarter and Nine Months 2015 Results

 

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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)

Note to editors:

To preview and download broadcast-standard stock footage and press photos digitally, please visit www.sap.com/photos. On this platform, you can find high resolution material for your media channels. To view video stories on diverse topics, visit www.sap-tv.com. From this site, you can embed videos into your own Web pages, share video via e-mail links and subscribe to RSS feeds from SAP TV.

# # #

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.

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Appendix – Financial Information to Follow

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LOGO

FINANCIAL INFORMATION

FOR THE THIRD 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   

 

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Financial Statements (IFRS, Unaudited)

CONSOLIDATED INCOME STATEMENTS OF SAP GROUP – QUARTER

For the three months ended September 30

 

€ millions, unless otherwise stated

    2015      2014      Change
in %		  

Cloud subscriptions and support

      599         277         116   

Software licenses

      1,014         951         7   

Software support

      2,509         2,232         12   

Software licenses and support

      3,523         3,184         11   

Cloud and software

      4,122         3,461         19   

Services

      863         793         9   

Total revenue

      4,985         4,254         17   

Cost of cloud subscriptions and support

      –249         –132         89   

Cost of software licenses and support

      –528         –490         8   

Cost of cloud and software

      –777         –622         25   

Cost of services

      –767         –662         16   

Total cost of revenue

      –1,544         –1,285         20   

Gross profit

      3,440         2,970         16   

Research and development

      –660         –545         21   

Sales and marketing

      –1,182         –1,018         16   

General and administration

      –239         –190         26   

Restructuring

      –145         –43         >100   

TomorrowNow and Versata litigation

      0         –17         <-100   

Other operating income/expense, net

      –3         1         <-100   

Total operating expenses

      –3,771         –3,097         22   

Operating profit

      1,214         1,157         5   

Other non-operating income/expense, net

      –26         51         <-100   

Finance income

      102         30         >100   

Finance costs

      –60         –39         53   

Financial income, net

      42         –9         <-100   

Profit before tax

      1,229         1,199         3   

Income tax TomorrowNow and Versata litigation

      0         9         <-100   

Other income tax expense

      –333         –327         2   

Income tax expense

      –333         –318         5   

Profit after tax

      895         881         2   

attributable to owners of parent

      898         880         2   

attributable to non-controlling interests

      –2         1         <-100   
        

Earnings per share, basic (in €)1)

      0.75         0.74         2   

Earnings per share, diluted (in €)1)

      0.75         0.73         2   

 

1) 

For the three months ended September 30, 2015 and 2014, the weighted average number of shares was 1,198 million (diluted 1,198 million) and 1,195 million (diluted: 1,198 million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.

 

F1

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CONSOLIDATED INCOME STATEMENTS OF SAP GROUP – NINE MONTHS

For the nine months ended September 30

 

€ millions, unless otherwise stated

    2015      2014      Change
in %		  

Cloud subscriptions and support

      1,654         738         124   

Software licenses

      2,689         2,532         6   

Software support

      7,494         6,487         16   

Software licenses and support

      10,183         9,019         13   

Cloud and software

      11,837         9,757         21   

Services

      2,614         2,346         11   

Total revenue

      14,451         12,103         19   

Cost of cloud subscriptions and support

      –708         –320         121   

Cost of software licenses and support

      –1,632         –1,506         8   

Cost of cloud and software

      –2,340         –1,826         28   

Cost of services

      –2,423         –1,983         22   

Total cost of revenue

      –4,763         –3,810         25   

Gross profit

      9,689         8,293         17   

Research and development

      –2,058         –1,661         24   

Sales and marketing

      –3,749         –3,035         24   

General and administration

      –766         –612         25   

Restructuring

      –563         –97         >100   

TomorrowNow and Versata litigation

      0         –307         <-100   

Other operating income/expense, net

      0         –4         <-100   

Total operating expenses

      –11,899         –9,525         25   

Operating profit

      2,552         2,578         –1   

Other non-operating income/expense, net

      –228         44         <-100   

Finance income

      189         99         91   

Finance costs

      –169         –100         70   

Financial income, net

      20         –1         <-100   

Profit before tax

      2,344         2,621         –11   

Income tax TomorrowNow and Versata litigation

      0         86         <-100   

Other income tax expense

      –566         –736         –23   

Income tax expense

      –567         –650         –13   

Profit after tax

      1,778         1,971         –10   

attributable to owners of parent

      1,783         1,971         –10   

attributable to non-controlling interests

      –5         0         >100   
        

Earnings per share, basic (in €)1)

      1.49         1.65         –10   

Earnings per share, diluted (in €)1)

      1.49         1.65         –10   

 

1) 

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

Due to rounding, numbers may not add up precisely.

 

F2

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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION OF SAP GROUP

as at September 30, 2015 and December 31, 2014

 

€ millions

    2015      2014  

Cash and cash equivalents

      3,844         3,328   

Other financial assets

      921         678   

Trade and other receivables

      4,120         4,342   

Other non-financial assets

      531         435   

Tax assets

      203         215   

Total current assets

      9,618         8,999   

Goodwill

      22,231         21,005   

Intangible assets

      4,353         4,604   

Property, plant, and equipment

      2,122         2,102   

Other financial assets

      1,324         1,021   

Trade and other receivables

      81         100   

Other non-financial assets

      232         164   

Tax assets

      245         231   

Deferred tax assets

      452         230   

Total non-current assets

      31,039         29,459   

Total assets

      40,657         38,458   

as at September 30, 2015 and December 31, 2014

 

€ millions

    2015      2014  

Trade and other payables

      968         1,035   

Tax liabilities

      99         339   

Financial liabilities

      1,742         2,561   

Other non-financial liabilities

      2,268         2,810   

Provision TomorrowNow and Versata litigation

      0         1   

Other provisions

      557         149   

Provisions

      557         150   

Deferred income

      2,961         1,680   

Total current liabilities

      8,595         8,575   

Trade and other payables

      77         55   

Tax liabilities

      397         371   

Financial liabilities

      9,117         8,980   

Other non-financial liabilities

      199         219   

Provisions

      150         151   

Deferred tax liabilities

      512         496   

Deferred income

      70         78   

Total non-current liabilities

      10,521         10,350   

Total liabilities

      19,116         18,925   

Issued capital

      1,229         1,229   

Share premium

      547         614   

Retained earnings

      18,778         18,317   

Other components of equity

      2,088         563   

Treasury shares

      –1,128         –1,224   

Equity attributable to owners of parent

      21,513         19,499   

Non-controlling interests

      28         34   

Total equity

      21,541         19,533   

Total equity and liabilities

      40,657         38,458   

Due to rounding, numbers may not add up precisely.

 

F3

Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS OF SAP GROUP

For the nine months ended September 30

 

€ millions

    2015      2014  

Profit after tax

      1,778         1,971   

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

      

Depreciation and amortization

      965         733   

Income tax expense

      567         650   

Financial income, net

      –20         1   

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

      111         29   

Other adjustments for non-cash items

      –12         53   

Decrease/increase in trade and other receivables

      197         480   

Decrease/increase in other assets

      –212         –295   

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

      –248         –136   

Decrease/increase in deferred income

      1,216         914   

Cash outflows due to TomorrowNow and Versata litigation

      0         –233   

Interest paid

      –111         –83   

Interest received

      60         46   

Income taxes paid, net of refunds

      –1,049         –1,048   

Net cash flows from operating activities

      3,241         3,082   

Business combinations, net of cash and cash equivalents acquired

      –13         –730   

Cash receipts from derivative financial instruments related to business combinations

      266         –125   

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

      253         –855   

Purchase of intangible assets and property, plant, and equipment

      –424         –472   

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

      46         37   

Purchase of equity or debt instruments of other entities

      –1,709         –726   

Proceeds from sales of equity or debt instruments of other entities

      1,042         704   

Net cash flows from investing activities

      –793         –1,312   

Dividends paid

      –1,316         –1,194   

Proceeds from reissuance of treasury shares

      58         45   

Proceeds from borrowings

      1,745         501   

Repayments of borrowings

      –2,520         –586   

Net cash flows from financing activities

      –2,033         –1,234   

Effect of foreign currency rates on cash and cash equivalents

      101         70   

Net decrease/increase in cash and cash equivalents

      516         606   

Cash and cash equivalents at the beginning of the period

      3,328         2,748   

Cash and cash equivalents at the end of the period

      3,844         3,354   

Due to rounding, numbers may not add up precisely.

 

F4

Table of Contents

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 September 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

     599        1        600        –72        528        277        1        278        116        116        90   

Software licenses

     1,014        1        1,015        –29        986        951        0        952        7        7        4   

Software support

     2,509        0        2,509        –132        2,377        2,232        1        2,233        12        12        6   

Software licenses and support

     3,523        1        3,524        –161        3,363        3,184        1        3,185        11        11        6   

Cloud and software

     4,122        2        4,124        –233        3,892        3,461        2        3,463        19        19        12   

Services

     863        0        863        –54        808        793        0        793        9        9        2   

Total revenue

     4,985        2        4,987        –287        4,700        4,254        2        4,256        17        17        10   

Operating Expense Numbers

                      

Cost of cloud subscriptions and support

     –249        65        –184            –132        22        –110        89        67     

Cost of software licenses and support

     –528        61        –468            –490        59        –431        8        8     

Cost of cloud and software

     –777        126        –652            –622        81        –541        25        20     

Cost of services

     –767        20        –747            –662        16        –647        16        16     

Total cost of revenue

     –1,544        145        –1,399            –1,285        97        –1,188        20        18     

Gross profit

     3,440        148        3,588            2,970        99        3,068        16        17     

Research and development

     –660        25        –635            –545        13        –532        21        19     

Sales and marketing

     –1,182        76        –1,105            –1,018        24        –994        16        11     

General and administration

     –239        8        –230            –190        3        –187        26        23     

Restructuring

     –145        145        0            –43        43        0        >100        0     

TomorrowNow and Versata litigation

     0        0        0            –17        17        0        <-100        0     

Other operating income/expense, net

     –3        0        –3            1        0        1        <-100        <-100     

Total operating expenses

     –3,771        400        –3,372        228        –3,143        –3,097        196        –2,901        22        16        8   

Profit Numbers

                      

Operating profit

     1,214        402        1,616        –59        1,557        1,157        198        1,355        5        19        15   

Other non-operating income/expense, net

     –26        0        –26            51        0        51        <-100        <-100     

Finance income

     102        0        102            30        0        30        >100        >100     

Finance costs

     –60        0        –60            –39        0        –39        53        53     

Financial income, net

     42        0        42            –9        0        –9        <-100        <-100     

Profit before tax

     1,229        402        1,631            1,199        198        1,397        3        17     

Income tax TomorrowNow and Versata litigation

     0        0        0            9        –9        0        <-100        0     

Other income tax expense

     –333        –124        –457            –327        –60        –387        2        18     

Income tax expense

     –333        –124        –457            –318        –69        –387        5        18     

Profit after tax

     895        278        1,173            881        129        1,010        2        16     

attributable to owners of parent

     898        278        1,176            880        129        1,009        2        17     

attributable to non-controlling interests

     –2        0        –2            1        0        1        <-100        <-100     

Key Ratios

                      

Operating margin (in %)

     24.3          32.4          33.1        27.2          31.8        –2.9pp        0.6pp        1.3pp   

Effective tax rate (in %)

     27.1          28.0            26.5          27.7        0.6pp        0.4pp     

Earnings per share, basic (in €)

     0.75          0.98            0.74          0.84        2        16     

 

F5

Table of Contents
    For the nine months ended September 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

     1,654        9        1,664        –240        1,424        738        3        741        124        124        92   

Software licenses

     2,689        1        2,690        –186        2,504        2,532        0        2,532        6        6        –1   

Software support

     7,494        0        7,494        –572        6,922        6,487        3        6,491        16        15        7   

Software licenses and support

     10,183        1        10,184        –758        9,426        9,019        4        9,023        13        13        4   

Cloud and software

     11,837        11        11,848        –998        10,850        9,757        7        9,764        21        21        11   

Services

     2,614        0        2,614        –228        2,386        2,346        0        2,346        11        11        2   

Total revenue

     14,451        11        14,462        –1,225        13,237        12,103        7        12,110        19        19        9   

Operating Expense Numbers

                      

Cost of cloud subscriptions and support

     –708        162        –546            –320        58        –262        121        108     

Cost of software licenses and support

     –1,632        207        –1,425            –1,506        185        –1,321        8        8     

Cost of cloud and software

     –2,340        369        –1,970            –1,826        243        –1,583        28        24     

Cost of services

     –2,423        118        –2,305            –1,983        76        –1,907        22        21     

Total cost of revenue

     –4,763        487        –4,276            –3,810        319        –3,490        25        23     

Gross profit

     9,689        498        10,186            8,293        327        8,620        17        18     

Research and development

     –2,058        133        –1,926            –1,661        71        –1,590        24        21     

Sales and marketing

     –3,749        260        –3,489            –3,035        101        –2,934        24        19     

General and administration

     –766        60        –706            –612        30        –582        25        21     

Restructuring

     –563        563        0            –97        97        0        >100        0     

TomorrowNow and Versata litigation

     0        0        0            –307        307        0        <-100        0     

Other operating income/expense, net

     0        0        0            –4        0        –4        <-100        <-100     

Total operating expenses

     –11,899        1,504        –10,396        862        –9,534        –9,525        926        –8,600        25        21        11   

Profit Numbers

                      

Operating profit

     2,552        1,514        4,066        –363        3,703        2,578        933        3,510        –1        16        5   

Other non-operating income/expense, net

     –228        0        –228            44        0        44        <-100        <-100     

Finance income

     189        0        189            99        0        99        91        91     

Finance costs

     –169        0        –169            –100        0        –100        70        70     

Financial income, net

     20        0        20            –1        0        –1        <-100        <-100     

Profit before tax

     2,344        1,514        3,858            2,621        933        3,554        –11        9     

Income tax TomorrowNow and Versata litigation

     0        0        0            86        –86        0        <-100        0     

Other income tax expense

     –566        –461        –1,027            –736        –203        –939        –23        9     

Income tax expense

     –567        –461        –1,027            –650        –289        –939        –13        9     

Profit after tax

     1,778        1,053        2,831            1,971        644        2,615        –10        8     

attributable to owners of parent

     1,783        1,053        2,836            1,971        644        2,615        –10        8     

attributable to non-controlling interests

     –5        0        –5            0        0        0        >100        >100     

Key Ratios

                      

Operating margin (in %)

     17.7          28.1          28.0        21.3          29.0        –3.6pp        –0.9pp        –1.0pp   

Effective tax rate (in %)

     24.2          26.6            24.8          26.4        –0.6pp        0.2pp     

Earnings per share, basic (in €)

     1.49          2.37            1.65          2.19        –10        8     

 

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

Table of Contents

EXPLANATION OF NON-IFRS ADJUSTMENTS

 

€ millions

    Q3
2015		      1/1 -
9/30/2015		      Q3
2014		      1/1 -
9/30/2014		  

Operating profit (IFRS)

      1,214         2,552         1,157         2,578   

Revenue adjustments

      2         11         2         7   

Adjustment for acquisition-related charges

      183         554         141         402   

Adjustment for share-based payment expenses

      72         386         –5         119   

Adjustment for restructuring

      145         563         43         97   

Adjustment for TomorrowNow and Versata litigation

      0         0         17         307   

Operating expense adjustments

      400         1,504         196         926   

Operating profit adjustments

      402         1,514         198         933   

Operating profit (non-IFRS)

      1,616         4,066         1,355         3,510   

Due to rounding, numbers may not add up precisely.

 

F7

Table of Contents

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 September 30  

€ millions

    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)		  

Cloud subscriptions and support revenue by region

                                 

EMEA

      119         0         119         –7         112         71         0         71         68         67         57   

Americas

      431         1         432         –62         370         181         1         181         139         139         104   

APJ

      48         0         49         –2         46         26         0         26         88         88         78   

Cloud subscriptions and support revenue

      599         1         600         –72         528         277         1         278         116         116         90   

Cloud and software revenue by region

                                 

EMEA

      1,817         0         1,817         –10         1,807         1,614         1         1,615         13         13         12   

Americas

      1,695         2         1,697         –199         1,498         1,284         1         1,285         32         32         17   

APJ

      610         0         610         –23         587         563         0         563         8         8         4   

Cloud and software revenue

      4,122         2         4,124         –233         3,892         3,461         2         3,463         19         19         12   

Total revenue by region

                                 

Germany

      685         0         685         0         685         639         0         639         7         7         7   

Rest of EMEA

      1,503         0         1,504         –16         1,488         1,342         1         1,342         12         12         11   

Total EMEA

      2,188         0         2,189         –16         2,172         1,981         1         1,982         10         10         10   

United States

      1,681         2         1,683         –261         1,422         1,193         1         1,195         41         41         19   

Rest of Americas

      375         0         375         18         393         391         0         391         –4         –4         1   

Total Americas

      2,056         2         2,058         –243         1,815         1,585         1         1,586         30         30         14   

Japan

      171         0         171         –3         168         172         0         172         –1         –1         –3   

Rest of APJ

      569         0         569         –25         545         516         0         516         10         10         6   

Total APJ

      740         0         740         –27         713         688         0         688         8         8         4   

Total revenue

      4,985         2         4,987         –287         4,700         4,254         2         4,256         17         17         10   

 

F8

Table of Contents
     For the nine months ended September 30  

€ millions

    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)		  

Cloud subscriptions and support revenue by region

                                 

EMEA

      350         1         351         –30         320         185         0         185         89         90         73   

Americas

      1,163         8         1,170         –195         975         488         3         491         138         138         99   

APJ

      142         0         143         –14         128         65         0         65         117         118         96   

Cloud subscriptions and support revenue

      1,654         9         1,664         –240         1,424         738         3         741         124         124         92   

Cloud and software revenue by region

                                 

EMEA

      5,129         1         5,131         –98         5,032         4,590         3         4,593         12         12         10   

Americas

      4,888         9         4,897         –747         4,150         3,656         4         3,661         34         34         13   

APJ

      1,820         0         1,820         –152         1,668         1,511         0         1,511         20         20         10   

Cloud and software revenue

      11,837         11         11,848         –998         10,850         9,757         7         9,764         21         21         11   

Total revenue by region

                                 

Germany

      1,872         0         1,872         –2         1,869         1,771         0         1,772         6         6         6   

Rest of EMEA

      4,390         1         4,392         –126         4,266         3,944         2         3,946         11         11         8   

Total EMEA

      6,262         1         6,263         –128         6,135         5,715         3         5,718         10         10         7   

United States

      4,793         9         4,802         –844         3,958         3,419         4         3,422         40         40         16   

Rest of Americas

      1,187         0         1,187         –69         1,118         1,131         0         1,132         5         5         –1   

Total Americas

      5,980         9         5,989         –913         5,076         4,550         4         4,554         31         32         11   

Japan

      477         0         477         –17         460         436         0         436         9         9         5   

Rest of APJ

      1,732         0         1,732         –166         1,565         1,401         0         1,402         24         24         12   

Total APJ

      2,209         0         2,209         –184         2,026         1,838         0         1,838         20         20         10   

Total revenue

      14,451         11         14,462         –1,225         13,237         12,103         7         12,110         19         19         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.

 

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