Exhibit 99.1

EX-99.1 2 d336810dex991.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1


SAP Q3 2017 Quarterly Statement

SAP Raises Outlook Backed by Outstanding S/4HANA Momentum

◾

Digital core business soars with over 6,900 S/4HANA customers – around 70% growth year over year

◾

Continued strong business performance despite significant currency headwinds

◾

Software revenue stable (IFRS) and up 3% (Non-IFRS at constant currencies)

◾

Cloud subscriptions and support revenue up 22% (IFRS) and up 27% (Non-IFRS at constant currencies)

◾

EPS up 35% (IFRS) and up 10% (Non-IFRS)

◾

On track to execute €500 million share buy back by year end, €288 million bought back in Q3

LOGO

Cloud Subscriptions &

Share of

Total Revenue

Support Revenue

Predictable Revenue

in € millions

in percent

in € millions

IFRS

Non-IFRS

Q3 2017

IFRS

Non-IFRS

937

938

65%

5,590

+22%

+22% (+27% cc)

+1 p.p.

+4%

+4% (+8% cc)

“SAP has evolved from the world’s system of record to the platform for the digital revolution. Led by S/4HANA, we are delivering intelligent business applications built on the most data rich architecture ever created. We see growth in every corner of the business, which is why we are again raising our guidance for the full year.”

Bill McDermott, CEO

“I am very pleased that we continue to have excellent software revenue and that non-IFRS earnings per share are up again double-digit. We now expect a strong non-IFRS earnings per share performance for the entire year. Our performance, portfolio and pipeline make me truly confident that we will deliver on our mid-term ambitions.”

Luka Mucic, CFO


SAP Q3 2017 Quarterly Statement			1

Walldorf, Germany – October 19, 2017

SAP SE (NYSE: SAP) today announced its financial results for the third quarter 2017 ended September 30, 2017.

Business Highlights

Financial Highlights

Third Quarter 2017

SAP’s fast revenue growth in the cloud continued in the third quarter. New cloud bookings¹ grew by 14% (19% at constant currencies) in the third quarter and reached €302 million. IFRS cloud subscriptions and support revenue grew 22% year over year to €937 million and non-IFRS cloud subscriptions and support revenue grew 22% year over year (27% at constant currencies) to €938 million. IFRS and non-IFRS software revenue was €1.03 billion, stable year over year (up 3% at constant currencies). New cloud and software license order entry² grew by 15% year over year in the third quarter. IFRS and non-IFRS cloud and software revenue was €4.66 billion, an increase of 5% (8% at constant currencies). SAP’s “predictable revenue”, i.e. the total of cloud subscriptions & support revenue and software support revenue, was 65% of total revenue, up 1 percentage point year over year.

IFRS operating profit was up 19% to €1.3 billion. Non-IFRS operating profit was stable at €1.64 billion (up 4% at constant currencies). IFRS earnings per share increased 35% to €0.82. Non-IFRS earnings per share increased 10% to €1.01.

Operating cash flow for the first nine months was €4.13 billion, an increase of 14% year over year. Free cash flow increased 7% year over year to €3.16 billion. At quarter end, net debt was €1.71 billion, an improvement of €2 billion year over year. SAP’s strong growth and cash generation provide significant flexibility around capital allocation aimed at driving shareholder value. Consistent with the Company’s announcement in the second quarter, SAP is on track to buy back €500 million in shares. As of the end of the third quarter, the company has bought back €288 million.

SAP S/4HANA

With S/4HANA customers can massively simplify their IT landscape, run live and reinvent their business model for the digital economy across both cloud and on-premise deployments. S/4HANA adoption grew to more than 6,900 customers, up around 70% year over year. In the third quarter, approximately 600 additional customers signed up of which more than 40% were net new. S/4HANA continues to be adopted by the most forward thinking global companies, including Shell and China International Marine Containers.

SAP Leonardo

SAP Leonardo brings together deep process and industry expertise, advanced design thinking methodology and cutting edge software capabilities such as IoT, Big Data, Machine Learning, Analytics, and Blockchain. SAP Leonardo is about orchestrating these disruptive capabilities to create completely new ways of working and new business models. Hanon Systems (Korea) and Citco Technology Management (USA) among many others adopted SAP Leonardo solutions in the third quarter to redefine their businesses and become intelligent enterprises.

¹ New cloud bookings is the total of all orders received in a given period the revenue from which is expected to be classified as cloud subscription and support revenue and that result from purchases by new customers and from incremental purchases by existing customers. Consequently, orders to renew existing contracts are not included in this metric. The order amount must be committed. Consequently, due to their pay-per-use nature, business network transaction fees which do not include a committed minimum consumption are not reflected in the bookings metric (e.g. SAP Ariba and SAP Fieldglass transaction-based fees). Amounts included in the measures are generally annualized (annualized contract value ACV).

² New cloud and software license order entry is the total of new cloud order entry and software license order entry. The new cloud order entry metric is identical to the new cloud bookings metric defined above except that it considers the total contract value (TCV) of the orders where the new cloud bookings metric considers the orders’ annualized contract value (ACV). Software license order entry is the total of all orders received in a given period, the revenue from which is expected to be classified as software license revenue. The support services commonly sold with the software licenses are not included in the software license order entry metric.


SAP Q3 2017 Quarterly Statement			2

Human Capital Management

With SuccessFactors and Fieldglass, SAP delivers total workforce management across both permanent and contingent labor, localized for 84 countries and 42 languages. SuccessFactors Employee Central, which is the core of our HCM offering, had more than 2,000 customers at the end of the third quarter. SAP SuccessFactors was named a leader in Forrester Research Inc.’s “The Forrester Wave™: SaaS Human Resource Management Systems, Q3 2017.” La Liga (Spanish Football League) and Bancolombia, the largest commercial bank in Colombia, selected SAP’s workforce management solutions in the third quarter to deliver unified, high-quality employee experiences.

Customer Engagement and Commerce

SAP’s next generation customer engagement solutions enable businesses to manage their front office across the entire spectrum from marketing to sales to services – seamlessly and in real-time. Businesses get a single view of their customer – be it social, retail or e-commerce. SAP’s Customer Engagement and Commerce (CEC) solutions serve both B2C and B2B across a wide range of industries, including retail, telco, financial services, manufacturing and the public sector. SAP’s CEC solutions once again achieved double-digit growth in new cloud bookings and software revenue. In September, SAP announced that it would acquire Gigya. This will further enhance SAP’s CEC solutions by allowing companies to better manage customers’ profile, preference, opt-in and consent settings, with customers maintaining control of their data at all times.

Business Networks

Each of SAP’s business network solutions provides a rich, open, global platform that connects a large ecosystem of customers, suppliers, partners and developers delivering ever expanding content and innovation. On the Ariba Network, approximately 3 million companies in over 180 countries collaborate and trade around $1 trillion in goods and services annually. Concur helps close to 50 million end users effortlessly process travel and expenses. With SAP Fieldglass customers manage over 3.9 million contingent workers in more than 180 countries. Total revenue in the SAP Business Network segment was up 19% in the third quarter to €578 million at constant currencies.

Regional Revenue Performance in the Third Quarter 2017

SAP had a strong performance in the EMEA region with cloud and software revenue increasing 8% (IFRS) and 9% (non-IFRS constant currencies). Cloud subscriptions and support revenue grew by 42% (IFRS) and 46% (non-IFRS at constant currencies) with an especially strong quarter in Germany and Spain. In addition, SAP had strong double-digit software revenue growth in Germany, Russia and the Middle East & North Africa (MENA) region.

The Company had solid growth in the Americas region, despite the natural disasters that plagued both the United States and Mexico. Cloud and software revenue grew by 2% (IFRS) and 7% (non-IFRS constant currencies). Cloud subscriptions and support revenue increased by 13% (IFRS) and 19% (non-IFRS at constant currencies). In Cloud subscriptions and support revenue Brazil was a highlight, while the United States had a strong quarter in software revenue.

In the APJ region, SAP had a strong performance in both cloud and software revenue and cloud subscriptions and support revenue. Cloud and software revenue was up 2% (IFRS) and 9% (non-IFRS constant currencies). Cloud subscriptions and support revenue grew by 30% (IFRS) and 37% (non-IFRS at constant currencies). Japan and Australia were very strong in cloud subscriptions and support revenue. For software revenue, Australia had triple digit growth and China had strong double-digit growth.


SAP Q3 2017 Quarterly Statement			3

Financial Results at a Glance


Third Quarter 2017¹⁾
	IFRS						Non-IFRS²⁾
€ million, unless otherwise stated	Q3 2017		Q3 2016		D in %		Q3 2017		Q3 2016		D in %		D in % const. curr.
New Cloud Bookings³⁾		N/A		N/A		N/A		302		265		14		19
Cloud subscriptions and support		937		769		22		938		769		22		27
Software licenses and support		3,720		3,686		1		3,720		3,687		1		4
Cloud and software		4,657		4,455		5		4,658		4,456		5		8
Total revenue		5,590		5,375		4		5,590		5,375		4		8
Share of predictable revenue (in %)		65		64		1pp		65		64		1pp
Operating profit		1,314		1,103		19		1,637		1,638		0		4
Profit after tax		993		725		37		1,214		1,089		11
Basic earnings per share (€)		0.82		0.61		35		1.01		0.91		10
Number of employees (FTE, September 30)		87,874		82,426		7		N/A		N/A		N/A		N/A


Nine months ended September 2017¹⁾
	IFRS						Non-IFRS²⁾
€ million, unless otherwise stated	Q1–Q3 2017		Q1–Q3 2016		D in %		Q1–Q3 2017		Q1–Q3 2016		D in %		D in % const. curr.
New Cloud Bookings³⁾		N/A		N/A		N/A		857		664		29		30
Cloud subscriptions and support		2,775		2,166		28		2,775		2,168		28		28
Software licenses and support		10,968		10,497		4		10,968		10,500		4		4
Cloud and software		13,742		12,663		9		13,743		12,668		8		8
Total revenue		16,656		15,339		9		16,657		15,343		9		8
Share of predictable revenue (in %)		66		65		1pp		66		65		1pp
Operating profit		2,913		3,184		–9		4,405		4,258		3		3
Profit after tax		2,189		2,108		4		3,220		2,832		14
Basic earnings per share (€)		1.81		1.77		3		2.67		2.37		13
Number of employees (FTE, September 30)		87,874		82,426		7		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 table “Non-IFRS Adjustments by Functional Areas” in this Quarterly Statement.

³⁾ As this is an order entry metric, there is no IFRS equivalent.

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			4

Business Outlook 2017

The Company is raising its outlook for the full year 2017:

–

Based on the strong momentum in SAP’s cloud business, the Company continues to expect full year 2017 non-IFRS cloud subscriptions and support revenue to be in a range of €3.8 billion to €4.0 billion at constant currencies (2016: €2.99 billion).

–

Due to increasing adoption of S/4HANA and our Digital Business Platform the Company now expects full year 2017 non-IFRS cloud & software revenue to increase by 7.0% to 8.5% at constant currencies (2016: €18.43 billion). The lower end of the range was previously 6.5%.

–

The Company now expects full year 2017 non-IFRS total revenue in a range of €23.4 billion to €23.8 billion at constant currencies (2016: €22.07 billion). The previous range was €23.3 billion to €23.7 billion at constant currencies.

–

The Company now expects full-year 2017 non-IFRS operating profit to be in a range of €6.85 billion to €7.0 billion at constant currencies (2016: €6.63 billion). The lower end of the range was previously €6.8 billion.

While the Company’s full-year 2017 business outlook is at constant currencies, actual currency reported figures are expected to continue to be impacted by exchange rate fluctuations. If exchange rates remain at the September 2017 average level for the rest of the year, we expect non-IFRS cloud and software revenue and non-IFRS operating profit growth rates to experience a currency headwind in a range of -5 to -8pp in Q4 2017 (-1 to -3pp for the full year 2017).

The Company now expects its full-year 2017 effective tax rates (IFRS and non-IFRS) to be below the previous outlook. The previous outlook for the effective tax rate (IFRS) was 26.0% to 27.0% (2016: 25.3%) and for the effective tax rate (non-IFRS) 27.0% to 28.0% (2016: 26.8%). The decrease in comparison to the previous outlook mainly results from a one-time tax benefit relating to an intra-group transfer of intellectual property rights expected to be executed in the fourth quarter. As soon as the impact can be determined the Company will update the effective tax rate outlook.


SAP Q3 2017 Quarterly Statement			5

Additional Information

Extension of the SAP Executive Board

The Supervisory Board of SAP SE has named Christian Klein (Chief Operating Officer) to the SAP Executive Board heading the new board area Global Business Operations effective January 1, 2018.

Additionally, the Supervisory Board of SAP SE has extended Michael Kleinemeier’s Executive Board contract until December 31, 2019.

Acquisition of Gigya, Inc.

On September 24, 2017, SAP announced that it has entered into an agreement to acquire US-based Gigya, Inc., a market leader for customer identity and access management. The transaction is expected to close in the final quarter of 2017, subject to regulatory approval.

General Remarks about this Quarterly Statement and the SAP Integrated Report

Since Q1 2016, we issue a quarterly statement for each of the four fiscal quarters. Additionally, we issue a half year report and a full year integrated report. SAP’s 2016 Integrated Report and Annual Report to Shareholders, and 2016 Annual Report on Form 20-F were published on February 28, 2017, and are available for download at www.sapintegratedreport.com.

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.

Webcast

SAP senior management will host a financial analyst conference call today at 2:00 PM (CET) / 1:00 PM (GMT) / 8:00 AM (Eastern) / 5:00 AM (Pacific). The call 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 third quarter results can be found at www.sap.com/investor.

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 365,000 business and public sector 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
Rajiv Sekhri	+49 (6227) 7-74871	rajiv.sekhri@sap.com, CET

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)

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SAP Q3 2017 Quarterly Statement			6

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.

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.


SAP Q3 2017 Quarterly Statement			7

Financial and Non-Financial Key Facts (IFRS and Non-IFRS)


€ millions, unless otherwise stated	Q1 2016		Q2 2016		Q3 2016		Q4 2016		TY 2016		Q1 2017		Q2 2017		Q3 2017
Revenues
Cloud subscriptions and support (IFRS)		677		720		769		827		2,993		905		932		937
Cloud subscriptions and support (non-IFRS)		678		721		769		827		2,995		906		932		938

% change – yoy		33		30		28		31		30		34		29		22

% change constant currency – yoy		33		33		29		29		31		30		27		27
Software licenses (IFRS)		609		1,040		1,034		2,177		4,860		691		1,090		1,033
Software licenses (non-IFRS)		609		1,042		1,034		2,177		4,862		691		1,090		1,033

% change – yoy		–13		6		2		1		1		13		5		0

% change constant currency – yoy		–10		10		2		0		1		10		4		3
Software support (IFRS)		2,564		2,598		2,653		2,756		10,571		2,731		2,736		2,687
Software support (non-IFRS)		2,564		2,598		2,653		2,756		10,572		2,731		2,736		2,687

% change – yoy		5		3		6		6		5		7		5		1

% change constant currency – yoy		5		6		6		5		6		3		4		4
Software licenses and support (IFRS)		3,172		3,639		3,686		4,933		15,431		3,422		3,826		3,720
Software licenses and support (non-IFRS)		3,173		3,640		3,687		4,934		15,434		3,422		3,826		3,720

% change – yoy		1		4		5		4		3		8		5		1

% change constant currency – yoy		2		7		5		3		4		5		4		4
Cloud and software (IFRS)		3,850		4,359		4,455		5,760		18,424		4,328		4,757		4,657
Cloud and software (non-IFRS)		3,851		4,361		4,456		5,761		18,428		4,328		4,758		4,658

% change – yoy		5		7		8		7		7		12		9		5

% change constant currency – yoy		6		11		9		6		8		9		8		8
Total revenue (IFRS)		4,727		5,237		5,375		6,724		22,062		5,285		5,782		5,590
Total revenue (non-IFRS)		4,728		5,239		5,375		6,724		22,067		5,285		5,782		5,590

% change – yoy		5		5		8		6		6		12		10		4

% change constant currency – yoy		6		9		8		5		7		8		9		8
Share of predictable revenue (IFRS, in %)		69		63		64		53		61		69		63		65
Share of predictable revenue (non-IFRS, in %)		69		63		64		53		61		69		63		65


Profits
Operating profit (IFRS)		813		1,269		1,103		1,950		5,135		673		926		1,314
Operating profit (non-IFRS)		1,104		1,516		1,638		2,375		6,633		1,198		1,570		1,637

% change		5		9		1		4		4		8		4		0

% change constant currency		4		11		1		2		4		2		3		4
Profit after tax (IFRS)		570		813		725		1,526		3,634		530		666		993
Profit after tax (non-IFRS)		763		979		1,089		1,826		4,658		887		1,120		1,214
% change		9		2		–7		9		3		16		14		11


Margins
Cloud subscriptions and support gross margin (IFRS, in %)		57.0		56.6		56.3		54.8		56.1		57.7		56.0		54.8
Cloud subscriptions and support gross margin (non-IFRS, in %)		65.9		64.8		64.5		62.7		64.4		64.6		62.4		60.8
Software license and support gross margin (IFRS, in %)		84.2		86.1		85.4		87.1		85.9		83.3		85.3		86.2
Software license and support gross margin (non-IFRS, in %)		85.9		87.4		87.4		88.4		87.4		85.1		86.6		87.3
Cloud and software gross margin (IFRS, in %)		79.4		81.2		80.4		82.4		81.0		77.9		79.6		79.9
Cloud and software gross margin (non-IFRS, in %)		82.3		83.6		83.4		84.7		83.7		80.8		81.8		82.0
Gross margin (IFRS, in %)		66.9		70.4		69.3		73.0		70.2		66.7		69.0		70.1
Gross margin (non-IFRS, in %)		69.6		72.6		72.7		75.5		72.9		69.9		71.5		72.5
Operating margin (IFRS, in %)		17.2		24.2		20.5		29.0		23.3		12.7		16.0		23.5
Operating margin (non-IFRS, in %)		23.4		28.9		30.5		35.3		30.1		22.7		27.2		29.3
AT&S segment – Cloud subscriptions and support gross margin (in %)		54		52		51		49		52		52		49		47
AT&S segment – Gross margin (in %)		70		73		74		77		74		70		72		73
AT&S segment – Segment margin (in %)		34		39		40		45		40		32		37		39


SAP Q3 2017 Quarterly Statement			8

€ millions, unless otherwise stated

2016

2017

SAP BN segment – Cloud subscriptions and support gross margin (in %)

SAP BN segment – Gross margin (in %)

SAP BN segment – Segment margin (in %)

Key Profit Ratios

Effective tax rate (IFRS, in %)

23.3

28.9

28.4

22.3

25.3

20.6

26.6

28.6

Effective tax rate (non-IFRS, in %)

26.2

29.6

29.7

23.5

26.8

25.7

27.8

29.2

Earnings per share, basic (IFRS, in €)

0.48

0.68

0.61

1.27

3.04

0.43

0.56

0.82

Earnings per share, basic (non-IFRS, in €)

0.64

0.82

0.91

1.53

3.90

0.73

0.94

1.01

Order Entry

New Cloud Bookings

145

255

265

483

1,147

215

340

302

Deferred income (current)¹⁾

5,265

4,470

3,373

2,383

6,215

4,898

3,531

Orders – Number of on-premise software deals (in transactions)

12,884

14,468

13,048

16,891

57,291

13,115

14,361

13,889

Share of orders greater than € 5 million based on total software order entry volume (in %)

Share of orders smaller than € 1 million based on total software order entry volume (in %)

Liquidity and Cash Flow

Net cash flows from operating activities

2,482

439

707

1,000

4,628

2,872

642

611

Free cash flow

2,313

202

446

665

3,627

2,581

322

258

% of total revenue (IFRS)

% of profit after tax (IFRS)

406

100

487

Group liquidity, gross

5,853

4,347

4,388

4,673

7,345

4,927

4,960

Group debt

–9,080

–8,593

–8,134

–7,826

–7,805

–6,716

–6,667

Group liquidity, net

–3,227

–4,245

–3,746

–3,153

–460

–1,789

–1,706

Days’ sales outstanding (DSO, in days)²⁾

Financial Position

Cash and cash equivalents

5,743

4,206

4,112

3,702

5,937

4,236

4,220

Goodwill

21,922

22,354

22,279

23,311

23,091

21,949

21,353

Total assets

42,884

41,788

41,604

44,277

47,724

42,900

41,430

Equity ratio (total equity in % of total assets)

Non-Financials

Number of employees (quarter end)³⁾

78,230

79,962

82,426

84,183

85,751

87,114

87,874

Employee retention (in %, rolling 12 months)

92.0

92.6

93.4

93.7

94.1

94.3

94.2

Women in management (in %, quarter end)

23.6

24.1

24.3

24.5

24.8

25.0

25.2

Greenhouse gas emissions (in kilotons)

120

380

100

¹⁾ SAP is in the final stage of migrating its processes and customer contracts to IFRS 15. At this point of the migration, there is no reliable way to report deferred cloud revenue any longer, therefore the separate disclosure of the cloud portion of deferred income is discontinued. SAP will continue to disclose new cloud bookings as the key metric to measure SAP’s sales success in the cloud.

²⁾ Days’ sales outstanding measures the length of time it takes to collect receivables. SAP calculates DSO by dividing the average invoiced accounts receivables balance of the last 12 months by the average monthly sales of the last 12 months.

³⁾ In full-time equivalents

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			9

Consolidated Income Statements of SAP Group (IFRS) – Quarter

€ millions, unless otherwise stated

Q3 2017

Q3 2016

D in %

Cloud subscriptions and support

937

769

Software licenses

1,033

1,034

Software support

2,687

2,653

Software licenses and support

3,720

3,686

Cloud and software

4,657

4,455

Services

932

920

Total revenue

5,590

5,375

Cost of cloud subscriptions and support

–423

–336

Cost of software licenses and support

–512

–537

–5

Cost of cloud and software

–935

–873

Cost of services

–738

–776

–5

Total cost of revenue

–1,673

–1,649

Gross profit

3,917

3,726

Research and development

–781

–766

Sales and marketing

–1,640

–1,587

General and administration

–251

–268

–6

Restructuring

>100

Other operating income/expense, net

–4

<-100

Total operating expenses

–4,276

–4,272

Operating profit

1,314

1,103

Other non-operating income/expense, net

–43

<-100

Finance income

130

>100

Finance costs

–58

–78

–26

Financial income, net

–46

<-100

Profit before tax

1,390

1,013

Income tax expense

–398

–288

Profit after tax

993

725

Attributable to owners of parent

983

730

Attributable to non-controlling interests

–5

<-100

Earnings per share, basic (in €)¹⁾

0.82

0.61

Earnings per share, diluted (in €)¹⁾

0.82

0.61

¹⁾ For the three months ended September 30, 2017 and 2016, the weighted average number of shares was 1,198 million (diluted 1,198 million) and 1,198 million (diluted: 1,199 million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			10

Consolidated Income Statements of SAP Group (IFRS) – Year-to-Date

€ millions, unless otherwise stated

Q1–Q3 2017

Q1–Q3 2016

D in %

Cloud subscriptions and support

2,775

2,166

Software licenses

2,814

2,682

Software support

8,154

7,815

Software licenses and support

10,968

10,497

Cloud and software

13,742

12,663

Services

2,914

2,675

Total revenue

16,656

15,339

Cost of cloud subscriptions and support

–1,216

–939

Cost of software licenses and support

–1,646

–1,543

Cost of cloud and software

–2,862

–2,483

Cost of services

–2,366

–2,282

Total cost of revenue

–5,228

–4,765

Gross profit

11,428

10,574

Research and development

–2,475

–2,184

Sales and marketing

–5,055

–4,452

General and administration

–820

–727

Restructuring

–174

–20

>100

Other operating income/expense, net

–5

<-100

Total operating expenses

–13,743

–12,154

Operating profit

2,913

3,184

–9

Other non-operating income/expense, net

–6

–180

–97

Finance income

273

105

>100

Finance costs

–213

–210

Financial income, net

–105

<-100

Profit before tax

2,966

2,900

Income tax expense

–777

–792

–2

Profit after tax

2,189

2,108

Attributable to owners of parent

2,172

2,118

Attributable to non-controlling interests

–10

<-100

Earnings per share, basic (in €)¹⁾

1.81

1.77

Earnings per share, diluted (in €)¹⁾

1.81

1.77

¹⁾ For the nine months ended September 30, 2017 and 2016, the weighted average number of shares was 1,198 million (diluted 1,199 million) and 1,198 million (diluted: 1,199 million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			11

Consolidated Statements of Financial Position of SAP Group (IFRS)


as at September 30, 2017 and December 31, 2016
€ millions	2017		2016
Cash and cash equivalents		4,220		3,702
Other financial assets		1,013		1,124
Trade and other receivables		4,869		5,924
Other non-financial assets		756		581
Tax assets		361		233
Total current assets		11,219		11,564
Goodwill		21,353		23,311
Intangible assets		3,038		3,786
Property, plant, and equipment		2,806		2,580
Other financial assets		1,233		1,358
Trade and other receivables		124		126
Other non-financial assets		552		532
Tax assets		434		450
Deferred tax assets		672		571
Total non-current assets		30,212		32,713
Total assets		41,430		44,277

€ millions	2017		2016
Trade and other payables		1,089		1,281
Tax liabilities		256		316
Financial liabilities		1,289		1,813
Other non-financial liabilities		3,077		3,699
Provisions		266		183
Deferred income		3,531		2,383
Total current liabilities		9,507		9,674
Trade and other payables		118		127
Tax liabilities		442		365
Financial liabilities		5,811		6,481
Other non-financial liabilities		465		461
Provisions		211		217
Deferred tax liabilities		422		411
Deferred income		84		143
Total non-current liabilities		7,553		8,205
Total liabilities		17,060		17,880
Issued capital		1,229		1,229
Share premium		568		599
Retained earnings		22,992		22,302
Other components of equity		960		3,346
Treasury shares		–1,379		–1,099
Equity attributable to owners of parent		24,369		26,376

Non-controlling interests		1		21
Total equity		24,370		26,397
Total equity and liabilities		41,430		44,277

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			12

Consolidated Statements of Cash Flows of SAP Group (IFRS)


€ millions	Q1–Q3 2017		Q1–Q3 2016
Profit after tax		2,189		2,108
Adjustments to reconcile profit after tax to net cash flows from operating activities:
Depreciation and amortization		961		932
Income tax expense		777		792
Financial income, net		–59		105
Decrease/increase in sales and bad debt allowances on trade receivables		–15		61
Other adjustments for non-cash items		–35		8
Decrease/increase in trade and other receivables		731		290
Decrease/increase in other assets		–338		–351
Decrease/increase in trade payables, provisions, and other liabilities		–456		–583
Decrease/increase in deferred income		1,480		1,402
Interest paid		–145		–145
Interest received		53		57
Income tax paid, net of refunds		–1,016		–1,048
Net cash flows from operating activities		4,125		3,628
Business combinations, net of cash and cash equivalents acquired		–22		–54
Purchase of intangible assets or property, plant, and equipment		–964		–666
Proceeds from sales of intangible assets or property, plant, and equipment		77		48
Purchase of equity or debt instruments of other entities		–2,098		–559
Proceeds from sales of equity or debt instruments of other entities		2,371		457
Net cash flows from investing activities		–636		–773
Dividends paid		–1,499		–1,378
Dividends paid on non-controlling interests		–39		0
Purchase of treasury shares		–288		0
Proceeds from reissuance of treasury shares		0		24
Proceeds from borrowings		27		401
Repayments of borrowings		–1,007		–1,394
Transactions with non-controlling interests		0		3
Net cash flows from financing activities		–2,806		–2,345
Effect of foreign currency rates on cash and cash equivalents		–165		192
Net decrease/increase in cash and cash equivalents		518		702
Cash and cash equivalents at the beginning of the period		3,702		3,411
Cash and cash equivalents at the end of the period		4,220		4,112

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			13

Segment Reporting – Quarter

Applications, Technology & Services¹⁾


€ millions, unless otherwise stated			Q3 2017		Q3 2016		D in %		D in %
	Actual Currency		Constant Currency		Actual Currency		Actual Currency		Constant Currency
Cloud subscriptions and support – SaaS/PaaS²⁾		408		424		307		33		38
Cloud subscriptions and support – IaaS³⁾		77		80		58		34		39
Cloud subscriptions and support		485		504		365		33		38
Software licenses		1,042		1,076		1,033		1		4
Software support		2,683		2,767		2,647		1		5
Software licenses and support		3,725		3,842		3,680		1		4
Cloud and software		4,210		4,346		4,045		4		7
Services		823		850		824		0		3
Total segment revenue		5,033		5,196		4,869		3		7
Cost of cloud subscriptions and support – SaaS/PaaS²⁾		–178		–184		–120		48		53
Cost of cloud subscriptions and support – IaaS³⁾		–79		–81		–57		39		42
Cost of cloud subscriptions and support		–257		–265		–177		45		50
Cost of software licenses and support		–466		–478		–466		0		3
Cost of cloud and software		–723		–743		–643		12		16
Cost of services		–632		–648		–636		–1		2
Total cost of revenue		–1,355		–1,391		–1,279		6		9
Segment gross profit		3,677		3,805		3,589		2		6
Other segment expenses		–1,730		–1,779		–1,633		6		9
Segment profit		1,947		2,026		1,956		0		4
Margins
Cloud subscriptions and support gross margin – SaaS/PaaS²⁾ (in %)		56		57		61		–4pp		–4pp
Cloud subscriptions and support gross margin – IaaS³⁾ (in %)		–3		–1		1		–4pp		–2pp
Cloud subscriptions and support gross margin (in %)		47		47		51		–4pp		–4pp
Gross margin (in %)		73		73		74		–1pp		–0pp
Segment margin (in %)		39		39		40		–1pp		–1pp

¹⁾ The segment that focuses on our small and medium-sized customers is no longer an operating segment, and its activities were included in the Applications, Technology & Services segment. We have retrospectively adjusted the revenue and results for the Applications, Technology & Services segment to reflect this change.

²⁾ Software as a Service/Platform as a Service

³⁾ Infrastructure as a Service

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			14

SAP Business Network


€ millions, unless otherwise stated			Q3 2017		Q3 2016		D in %		D in %
	Actual Currency		Constant Currency		Actual Currency		Actual Currency		Constant Currency
Cloud subscriptions and support – SaaS/PaaS¹⁾		453		474		404		12		17
Cloud subscriptions and support – IaaS²⁾		0		0		0		NA		NA
Cloud subscriptions and support		453		474		404		12		17
Software licenses		0		0		0		NA		NA
Software support		4		4		6		–25		–25
Software licenses and support		4		4		5		–21		–21
Cloud and software		457		478		410		12		17
Services		95		100		75		26		32
Total segment revenue		552		578		485		14		19
Cost of cloud subscriptions and support – SaaS/PaaS¹⁾		–109		–114		–94		16		21
Cost of cloud subscriptions and support – IaaS²⁾		0		0		0		NA		NA
Cost of cloud subscriptions and support		–109		–114		–94		16		21
Cost of software licenses and support		–1		–1		0		>100		>100
Cost of cloud and software		–111		–115		–94		18		23
Cost of services		–66		–69		–61		8		13
Total cost of revenue		–177		–185		–155		14		19
Segment gross profit		375		393		330		14		19
Other segment expenses		–279		–290		–234		19		24
Segment profit		96		103		96		0		7
Margins
Cloud subscriptions and support gross margin – SaaS/PaaS¹⁾ (in %)		76		76		77		–1pp		–1pp
Cloud subscriptions and support gross margin – IaaS²⁾ (in %)		NA		NA		NA		NA		NA
Cloud subscriptions and support gross margin (in %)		76		76		77		–1pp		–1pp
Gross margin (in %)		68		68		68		–0pp		0pp
Segment margin (in %)		17		18		20		–2pp		–2pp

¹⁾ Software as a Service/Platform as a Service

²⁾ Infrastructure as a Service

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			15

Reconciliation of Cloud Subscription Revenues and Margins


€ millions, unless otherwise stated				Q3 2017		Q3 2016		D in %		D in %
		Actual Currency		Constant Currency		Actual Currency		Actual Currency		Constant Currency
Cloud subscriptions and support revenue – SaaS/PaaS¹⁾	SAP Business Network segment		453		474		404		12		17
	Other		409		424		307		33		38
	Total		861		898		711		21		26
Cloud subscriptions and support revenue – IaaS²⁾			77		80		58		34		39
Cloud subscriptions and support revenue			938		978		769		22		27
Cloud subscriptions and support gross margin – SaaS/PaaS¹⁾ (in %)	SAP Business Network segment		76		76		77		–1pp		–1pp
	Other		56		57		60		–4pp		–4pp
	Total		66		67		70		–3pp		–3pp
Cloud subscriptions and support gross margin – IaaS²⁾ (in %)			–3		–1		1		–4pp		–2pp
Cloud subscriptions and support gross margin (in %)			61		61		65		–4pp		–3pp

¹⁾ Software as a Service/Platform as a Service

²⁾ Infrastructure as a Service

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			16

Segment Reporting – Year-to-Date

Applications, Technology & Services¹⁾


€ millions, unless otherwise stated			Q1–Q3 2017		Q1–Q3 2016		D in %		D in %
	Actual Currency		Constant Currency		Actual Currency		Actual Currency		Constant Currency
Cloud subscriptions and support – SaaS/PaaS²⁾		1,163		1,162		856		36		36
Cloud subscriptions and support – IaaS³⁾		234		235		146		60		60
Cloud subscriptions and support		1,397		1,396		1,002		39		39
Software licenses		2,813		2,821		2,685		5		5
Software support		8,139		8,101		7,796		4		4
Software licenses and support		10,953		10,922		10,481		4		4
Cloud and software		12,350		12,318		11,483		8		7
Services		2,569		2,557		2,455		5		4
Total segment revenue		14,919		14,875		13,938		7		7
Cost of cloud subscriptions and support – SaaS/PaaS²⁾		–489		–487		–317		54		53
Cost of cloud subscriptions and support – IaaS³⁾		–222		–221		–159		39		39
Cost of cloud subscriptions and support		–710		–707		–476		49		48
Cost of software licenses and support		–1,472		–1,465		–1,399		5		5
Cost of cloud and software		–2,182		–2,173		–1,876		16		16
Cost of services		–2,030		–2,021		–1,983		2		2
Total cost of revenue		–4,212		–4,193		–3,859		9		9
Segment gross profit		10,707		10,682		10,079		6		6
Other segment expenses		–5,348		–5,336		–4,802		11		11
Segment profit		5,359		5,346		5,277		2		1
Margins
Cloud subscriptions and support gross margin – SaaS/PaaS²⁾ (in %)		58		58		63		–5pp		–5pp
Cloud subscriptions and support gross margin – IaaS³⁾ (in %)		5		6		–9		14pp		15pp
Cloud subscriptions and support gross margin (in %)		49		49		52		–3pp		–3pp
Gross margin (in %)		72		72		72		–1pp		–1pp
Segment margin (in %)		36		36		38		–2pp		–2pp

²⁾ Software as a Service/Platform as a Service

³⁾ Infrastructure as a Service

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			17

SAP Business Network


€ millions, unless otherwise stated			Q1–Q3 2017		Q1–Q3 2016		D in %		D in %
	Actual Currency		Constant Currency		Actual Currency		Actual Currency		Constant Currency
Cloud subscriptions and support – SaaS/PaaS¹⁾		1,378		1,373		1,166		18		18
Cloud subscriptions and support – IaaS²⁾		0		0		0		NA		NA
Cloud subscriptions and support		1,378		1,373		1,166		18		18
Software licenses		0		0		0		NA		NA
Software support		15		15		20		–26		–25
Software licenses and support		15		15		20		–24		–24
Cloud and software		1,393		1,388		1,185		17		17
Services		297		297		218		36		36
Total segment revenue		1,690		1,685		1,404		20		20
Cost of cloud subscriptions and support – SaaS/PaaS¹⁾		–322		–322		–278		16		16
Cost of cloud subscriptions and support – IaaS²⁾		0		0		0		NA		NA
Cost of cloud subscriptions and support		–322		–322		–278		16		16
Cost of software licenses and support		–3		–3		0		>100		>100
Cost of cloud and software		–326		–325		–278		17		17
Cost of services		–218		–218		–177		23		23
Total cost of revenue		–544		–543		–455		20		19
Segment gross profit		1,146		1,142		949		21		20
Other segment expenses		–861		–858		–692		24		24
Segment profit		286		284		256		11		11
Margins
Cloud subscriptions and support gross margin – SaaS/PaaS¹⁾ (in %)		77		77		76		0pp		0pp
Cloud subscriptions and support gross margin – IaaS²⁾ (in %)		NA		NA		NA		NA		NA
Cloud subscriptions and support gross margin (in %)		77		77		76		0pp		0pp
Gross margin (in %)		68		68		68		0pp		0pp
Segment margin (in %)		17		17		18		–1pp		–1pp

¹⁾ Software as a Service/Platform as a Service

²⁾ Infrastructure as a Service

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			18

Reconciliation of Cloud Subscription Revenues and Margins


€ millions, unless otherwise stated				Q1–Q3 2017		Q1–Q3 2016		D in %		D in %
		Actual Currency		Constant Currency		Actual Currency		Actual Currency		Constant Currency
Cloud subscriptions and support revenue – SaaS/PaaS¹⁾	SAP Business Network segment		1,378		1,373		1,166		18		18
	Other		1,163		1,162		856		36		36
	Total		2,541		2,534		2,021		26		25
Cloud subscriptions and support revenue – IaaS²⁾			234		235		146		60		60
Cloud subscriptions and support revenue			2,775		2,769		2,168		28		28
Cloud subscriptions and support gross margin – SaaS/PaaS¹⁾ (in %)	SAP Business Network segment		77		77		76		0pp		0pp
	Other		57		58		63		–5pp		–4pp
	Total		68		68		70		–3pp		–2pp
Cloud subscriptions and support gross margin – IaaS²⁾ (in %)			5		6		–9		14pp		15pp
Cloud subscriptions and support gross margin (in %)			63		63		65		–2pp		–2pp

¹⁾ Software as a Service/Platform as a Service

²⁾ Infrastructure as a Service

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			19

Reconciliation from Non-IFRS Numbers to IFRS Numbers – Quarter


€ millions, unless otherwise stated									Q3 2017						Q3 2016						D 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		937		0		938		41		978		769		0		769		22		22		27
Software licenses		1,033		0		1,033		33		1,067		1,034		0		1,034		0		0		3
Software support		2,687		0		2,687		84		2,771		2,653		0		2,653		1		1		4
Software licenses and support		3,720		0		3,720		117		3,837		3,686		0		3,687		1		1		4
Cloud and software		4,657		0		4,658		158		4,815		4,455		1		4,456		5		5		8
Services		932		0		932		32		965		920		0		920		1		1		5
Total revenue		5,590		0		5,590		190		5,780		5,375		1		5,375		4		4		8

Operating Expense Numbers
Cost of cloud subscriptions and support		–423		56		–368						–336		63		–273		26		35
Cost of software licenses and support		–512		41		–471						–537		71		–465		–5		1
Cost of cloud and software		–935		97		–839						–873		135		–738		7		14
Cost of services		–738		41		–697						–776		45		–732		–5		–5
Total cost of revenue		–1,673		137		–1,536						–1,649		179		–1,469		1		4
Gross profit		3,917		138		4,055						3,726		180		3,906		5		4
Research and development		–781		64		–717						–766		86		–679		2		6
Sales and marketing		–1,640		162		–1,478						–1,587		214		–1,373		3		8
General and administration		–251		28		–223						–268		56		–211		–6		6
Restructuring		67		–67		0						1		–1		0		>100		NA
Other operating income/expense, net		1		0		1						–4		0		–4		<-100		<-100
Total operating expenses		–4,276		323		–3,953		–118		–4,071		–4,272		534		–3,738		0		6		9

Profit Numbers
Operating profit		1,314		323		1,637		72		1,709		1,103		535		1,638		19		0		4
Other non-operating income/expense, net		4		0		4						–43		0		–43		<-100		<-100
Finance income		130		0		130						32		0		32		>100		>100
Finance costs		–58		0		–58						–78		0		–78		–26		–26
Financial income, net		73		0		73						–46		0		–46		<-100		<-100
Profit before tax		1,390		323		1,714						1,013		535		1,548		37		11
Income tax expense		–398		–102		–500						–288		–171		–459		38		9
Profit after tax		993		221		1,214						725		364		1,089		37		11
Attributable to owners of parent		983		221		1,204						730		364		1,094		35		10
Attributable to non-controlling interests		9		0		9						–5		0		–5		<-100		<-100

Key Ratios
Operating margin (in %)		23.5				29.3				29.6		20.5				30.5		3.0pp		–1.2pp		–0.9pp
Effective tax rate (in %)³⁾		28.6				29.2						28.4				29.7		0.2pp		–0.5pp
Earnings per share, basic (in €)		0.82				1.01						0.61				0.91		35		10

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, as well as restructuring expenses.


SAP Q3 2017 Quarterly Statement			20

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, Adjustments and Full-Year Estimates”.

³⁾ The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q3 2017 mainly results from tax effects of acquisition-related charges. The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q3 2016 mainly results from tax effects of acquisition-related charges and share-based payment expenses.

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			21

Reconciliation from Non-IFRS Numbers to IFRS Numbers – Year-to-Date


€ millions, unless otherwise stated									Q1–Q3 2017						Q1–Q3 2016						D 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		2,775		0		2,775		–6		2,769		2,166		2		2,168		28		28		28
Software licenses		2,814		0		2,814		8		2,822		2,682		2		2,685		5		5		5
Software support		8,154		0		8,154		–39		8,116		7,815		0		7,815		4		4		4
Software licenses and support		10,968		0		10,968		–31		10,937		10,497		3		10,500		4		4		4
Cloud and software		13,742		1		13,743		–37		13,706		12,663		4		12,668		9		8		8
Services		2,914		0		2,914		–12		2,902		2,675		0		2,675		9		9		8
Total revenue		16,656		1		16,657		–49		16,608		15,339		4		15,343		9		9		8

Operating Expense Numbers
Cost of cloud subscriptions and support		–1,216		178		–1,039						–939		182		–758		29		37
Cost of software licenses and support		–1,646		151		–1,495						–1,543		170		–1,373		7		9
Cost of cloud and software		–2,862		329		–2,533						–2,483		352		–2,131		15		19
Cost of services		–2,366		126		–2,240						–2,282		74		–2,208		4		1
Total cost of revenue		–5,228		455		–4,773						–4,765		426		–4,339		10		10
Gross profit		11,428		455		11,884						10,574		430		11,004		8		8
Research and development		–2,475		216		–2,258						–2,184		135		–2,049		13		10
Sales and marketing		–5,055		536		–4,519						–4,452		404		–4,048		14		12
General and administration		–820		109		–710						–727		83		–644		13		10
Restructuring		–174		174		0						–20		20		0		>100		NA
Other operating income/expense, net		9		0		9						–5		0		–5		<-100		<-100
Total operating expenses		–13,743		1,491		–12,252		46		–12,206		–12,154		1,069		–11,085		13		11		10

Profit Numbers
Operating profit		2,913		1,492		4,405		–3		4,402		3,184		1,073		4,258		–9		3		3
Other non-operating income/expense, net		–6		0		–6						–180		0		–180		–97		–97
Finance income		273		0		273						105		0		105		>100		>100
Finance costs		–213		0		–213						–210		0		–210		2		2
Financial income, net		59		0		59						–105		0		–105		<-100		<-100
Profit before tax		2,966		1,492		4,458						2,900		1,073		3,973		2		12
Income tax expense		–777		–461		–1,238						–792		–350		–1,142		–2		8
Profit after tax		2,189		1,031		3,220						2,108		724		2,832		4		14
Attributable to owners of parent		2,172		1,031		3,203						2,118		724		2,842		3		13
Attributable to non-controlling interests		17		0		17						–10		0		–10		<-100		<-100

Key Ratios
Operating margin (in %)		17.5				26.4				26.5		20.8				27.8		–3.3pp		–1.3pp		–1.2pp
Effective tax rate (in %)³⁾		26.2				27.8						27.3				28.7		–1.1pp		–1.0pp
Earnings per share, basic (in €)		1.81				2.67						1.77				2.37		3		13


SAP Q3 2017 Quarterly Statement			22

³⁾ The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in the first nine months of 2017 and 2016 mainly results from tax effects of acquisition-related charges and share-based payment expenses.

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			23

Non-IFRS Adjustments – Actuals and Estimates

€ millions

Estimated Amounts for

Full Year 2017

Q3 2017

Q1–Q3
2017

Q3 2016

Q1–Q3
2016

Operating profit (IFRS)

1,314

2,913

1,103

3,184

Revenue adjustments

<20

Adjustment for acquisition-related charges

580 to 610

140

449

168

504

Adjustment for share-based payment expenses

1,000 to 1,150

250

868

368

545

Adjustment for restructuring¹⁾

150 to 200

–67

174

–1

Operating expense adjustments

323

1,491

534

1,069

Operating profit adjustments

323

1,492

535

1,073

Operating profit (non-IFRS)

1,637

4,405

1,638

4,258

¹⁾ reflects our expectations for restructuring activities in our services and support business


SAP Q3 2017 Quarterly Statement			24

Non-IFRS Adjustments by Functional Areas


€ millions	Q3 2017												Q3 2016
€ millions	IFRS		Acquisition- Related		SBP¹⁾		Restruc- turing		Non-IFRS		IFRS		Acquisition- Related		SBP¹⁾		Restruc- turing		Non-IFRS
Cost of cloud and software		–935		72		24		0		–839		–873		98		37		0	–738
Cost of services		–738		2		39		0		–697		–776		3		42		0	–732
Research and development		–781		3		61		0		–717		–766		3		84		0	–679
Sales and marketing		–1,640		62		100		0		–1,478		–1,587		67		147		0	–1,373
General and administration		–251		1		26		0		–223		–268		–3		59		0	–211
Restructuring		67		0		0		–67		0		1		0		0		–1	0
Other operating income/expense, net		1		0		0		0		1		–4		0		0		0	–4
Total operating expenses		–4,276		140		250		–67		–3,953		–4,272		168		368		–1	–3,738
¹⁾ Share-based Payments


€ millions	Q1–Q3 2017												Q1–Q3 2016
€ millions	IFRS		Acquisition- Related		SBP¹⁾		Restruc- turing		Non-IFRS		IFRS		Acquisition- Related		SBP¹⁾		Restruc- turing		Non-IFRS
Cost of cloud and software		–2,862		236		92		0		–2,533		–2,483		293		58		0	–2,131
Cost of services		–2,366		6		120		0		–2,240		–2,282		9		65		0	–2,208
Research and development		–2,475		8		208		0		–2,258		–2,184		7		128		0	–2,049
Sales and marketing		–5,055		196		340		0		–4,519		–4,452		190		214		0	–4,048
General and administration		–820		2		107		0		–710		–727		4		79		0	–644
Restructuring		–174		0		0		174		0		–20		0		0		20	0
Other operating income/expense, net		9		0		0		0		9		–5		0		0		0	–5
Total operating expenses		–13,743		449		868		174		–12,252		–12,154		504		545		20	–11,085
¹⁾ Share-based payments

If not presented in a separate line item in our income statement, the restructuring expenses would break down as follows:


€ millions	Q3 2017		Q1–Q3 2017		Q3 2016		Q1–Q3 2016
Cost of cloud and software		–50		55		0		2
Cost of services		–3		107		0		5
Research and development		–7		10		1		4
Sales and marketing		–7		2		–2		8
General and administration		0		0		0		1
Restructuring expenses		–67		174		–1		20


SAP Q3 2017 Quarterly Statement			25

Revenue by Region (IFRS and Non-IFRS) – Quarter


€ millions	Q3 2017										Q3 2016						D 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		259		0		259		7		267		182		0		182		42		42		46
Americas		576		0		576		28		604		508		0		508		13		13		19
APJ		102		0		102		5		108		78		0		78		30		30		37
Cloud subscriptions and support revenue		937		0		938		41		978		769		0		769		22		22		27

Cloud and software revenue by region
EMEA		2,099		0		2,099		22		2,121		1,942		0		1,942		8		8		9
Americas		1,849		0		1,849		92		1,942		1,820		1		1,821		2		2		7
APJ		709		0		709		44		753		693		0		693		2		2		9
Cloud and software revenue		4,657		0		4,658		158		4,815		4,455		1		4,456		5		5		8

Total revenue by region
Germany		857		0		857		1		858		749		0		749		14		14		15
Rest of EMEA		1,636		0		1,637		25		1,662		1,567		0		1,567		4		4		6
Total EMEA		2,494		0		2,494		26		2,520		2,315		0		2,315		8		8		9
United States		1,800		0		1,800		94		1,894		1,772		1		1,773		2		2		7
Rest of Americas		447		0		447		19		465		462		0		462		–3		–3		1
Total Americas		2,247		0		2,247		112		2,360		2,234		1		2,235		1		1		6
Japan		198		0		198		28		225		214		0		214		–8		–8		5
Rest of APJ		651		0		651		24		676		611		0		611		7		7		11
Total APJ		849		0		849		52		901		825		0		825		3		3		9
Total revenue		5,590		0		5,590		190		5,780		5,375		1		5,375		4		4		8

¹⁾ Adjustments in the revenue line items are for 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.

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			26

Revenue by Region (IFRS and Non-IFRS) – Year-to-Date


€ millions	Q1–Q3 2017										Q1–Q3 2016						D 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		738		0		738		6		744		511		0		512		44		44		45
Americas		1,735		0		1,735		–9		1,726		1,450		1		1,451		20		20		19
APJ		302		0		302		–3		299		205		0		205		47		47		46
Cloud subscriptions and support revenue		2,775		0		2,775		–6		2,769		2,166		2		2,168		28		28		28

Cloud and software revenue by region
EMEA		5,992		0		5,992		–22		5,970		5,499		1		5,499		9		9		9
Americas		5,572		1		5,573		–18		5,555		5,213		4		5,216		7		7		6
APJ		2,178		0		2,178		3		2,182		1,952		0		1,952		12		12		12
Cloud and software revenue		13,742		1		13,743		–37		13,706		12,663		4		12,668		9		8		8

Total revenue by region
Germany		2,312		0		2,312		–2		2,310		2,035		0		2,035		14		14		14
Rest of EMEA		4,886		0		4,886		–22		4,864		4,597		1		4,597		6		6		6
Total EMEA		7,198		0		7,199		–24		7,174		6,632		1		6,632		9		9		8
United States		5,488		1		5,488		–7		5,481		5,116		4		5,120		7		7		7
Rest of Americas		1,358		0		1,358		–19		1,339		1,260		0		1,260		8		8		6
Total Americas		6,846		1		6,847		–27		6,820		6,376		4		6,380		7		7		7
Japan		647		0		647		23		670		583		0		583		11		11		15
Rest of APJ		1,964		0		1,964		–20		1,944		1,748		0		1,748		12		12		11
Total APJ		2,612		0		2,612		2		2,614		2,331		0		2,331		12		12		12
Total revenue		16,656		1		16,657		–49		16,608		15,339		4		15,343		9		9		8

Due to rounding, numbers may not add up precisely.


SAP Q3 2017 Quarterly Statement			27

Employees by Region and Functional Areas


	30.9.2017					30.9.2016
Full-time equivalents		EMEA	Americas	APJ	Total		EMEA	Americas	APJ	Total
Cloud and software		5,760	3,839	4,707	14,306		6,260	3,996	5,330	15,586
Services		7,407	4,792	4,751	16,951		6,423	4,044	3,921	14,388
Research and development		11,199	5,240	8,386	24,826		10,219	4,704	7,780	22,702
Sales and marketing		9,199	9,118	4,889	23,206		8,425	8,861	4,365	21,651
General and administration		2,706	1,801	1,041	5,548		2,578	1,723	1,012	5,314
Infrastructure		1,688	852	498	3,038		1,552	785	447	2,784
SAP Group (September 30)		37,960	25,642	24,272	87,874		35,458	24,113	22,855	82,426
Thereof acquisitions ¹⁾		4	13	0	17		37	68	0	105
SAP Group (nine months’ end average)		37,250	25,359	23,925	86,534		34,552	23,193	21,809	79,555

¹⁾ Acquisitions closed between January 1 and September 30 of the respective year


SAP Q3 2017 Quarterly Statement			28

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


SAP Q3 2017 Quarterly Statement			29