EX-99.1 2 d247917dex991.htm EXHIBIT 99.1 EXHIBIT 99.1

Exhibit 99.1

LOGO

For Immediate Release

October 26, 2011

SAP Reports Record Third Quarter 2011 Software Revenue

 

• 7th Consecutive Quarter of Double-Digit Growth in Non-IFRS Software and Software-Related Service Revenue

 

• 27% Increase in Third Quarter Non-IFRS Operating Profit at Constant Currencies Leads to 3.0 Percentage Point Increase in Non-IFRS Operating Margin at Constant Currencies

 

• 36% Increase in Third Quarter Non-IFRS Earnings Per Share

 

• €3 Billion in Operating Cash Flow for the First Nine Months 2011 – 45% Increase Year-over-Year

 

• Third Quarter IFRS Operating Profit and Operating Margin Positively Impacted by Reduction of TomorrowNow Litigation Provision by €723 million

 

• SAP Reiterates the High End of its Full Year 2011 Outlook

WALLDORF, Germany — October 26, 2011 — SAP AG (NYSE: SAP) today announced its financial results for the third quarter ended September 30, 2011.

“We are very pleased with the exceptionally strong top-line growth this quarter. Continued efficiency gains combined with operational excellence led to a very strong operating margin performance,” said Werner Brandt, CFO of SAP. “Our momentum puts us on pace to achieve a record cash flow year.”

“SAP’s third quarter software revenue grew at its fastest rate in a decade because customers are shifting their investments to software that helps them grow and innovate. Our core solutions together with our industry-leading innovation in mobility, in-memory computing and cloud deliver exceptional value to our customers across all regions and industries,” said Bill McDermott, Co-CEO of SAP. “This is a growth company executing on a powerful vision.”

“Our strong performance and market share gains clearly show that our customer-focused innovation strategy is winning,” said Jim Hagemann Snabe, Co-CEO of SAP. “Delivering innovations in non-disruptive steps reduces the costs for our customers so they can invest in our breakthrough technologies to speed up decisions, strengthen customer relationships and drive growth. When our customers win, we win.”

SAP Reports Third Quarter 2011 Results      Page  2   

 

FINANCIAL HIGHLIGHTS — Third Quarter 2011

 

       Third Quarter 20111)  
       IFRS      Non-IFRS2)  

€ million, unless
otherwise stated

      Q3 2011        Q3 2010        %
change		      Q3 2011        Q3 2010        %
change		      %  change
const.
curr.3)		  

Software revenue

        841           656           28 %       841           656           28 %       32 % 

Support revenue

        1,757           1,559           13 %       1,758           1,595           10 %       13 % 

Software and software-related service revenue

        2,691           2,316           16 %       2,692           2,352           14 %       18 % 

Total revenue

        3,409           3,003           14 %       3,410           3,039           12 %       15 % 

Total operating expenses

        -1,650           -2,287           -28 %       -2,279           -2,124           7 %       10 % 

Operating profit

        1,759           716           146 %       1,131           915           24 %       27 % 

Operating margin (%)

        51.6           23.8           27.8pp         33.2           30.1           3.1pp         3.0pp   

Profit after tax

        1,251           501           150 %       860           629           37 %    

Basic earnings per share (€)

        1.05           0.42           150 %       0.72           0.53           36 %    

Number of employees (FTE)

        54,589           52,921           3 %       na           na           na         na   

 

 

1) All figures are unaudited.

 

2) Adjustments in the revenue line items are for the support revenue that would have been recognized had the acquired entities remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges, share-based compensation expenses, restructuring and discontinued activities.

 

3) Constant currency revenue and operating profit 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.

Revenue — Third Quarter 2011

 

• IFRS software revenue was €841 million (2010: €656 million), an increase of 28% (32% at constant currencies).

 

• IFRS software and software-related service revenue was €2.69 billion (2010: €2.32 billion), an increase of 16%. Non-IFRS software and software-related service revenue was €2.69 billion (2010: €2.35 billion), an increase of 14% (18% at constant currencies).

 

• IFRS total revenue was €3.41 billion (2010: €3.00 billion), an increase of 14%. Non-IFRS total revenue was €3.41 billion (2010: €3.04 billion), an increase of 12% (15% at constant currencies).

Third quarter 2011 non-IFRS software and software-related service revenue and total revenue exclude a deferred support revenue write-down from acquisitions of €1 million (2010: €36 million).

SAP Reports Third Quarter 2011 Results      Page  3   

 

Profit — Third Quarter 2011

 

•  

IFRS operating profit was €1.76 billion (2010: €716 million), an increase of 146%. Non-IFRS operating profit was €1.13 billion (2010: €915 million), an increase of 24% (27% at constant currencies).

 

•  

IFRS operating margin was 51.6% (2010: 23.8%), an increase of 27.8 percentage points. Non-IFRS operating margin was 33.2% (2010: 30.1%), or 33.1% at constant currencies, an increase of 3.1 percentage points (3.0 percentage points at constant currencies).

 

•  

IFRS profit after tax was €1.25 billion (2010: €501 million), an increase of 150%. Non-IFRS profit after tax was €860 million (2010: €629 million), an increase of 37%. IFRS basic earnings per share was €1.05 (2010: €0.42), an increase 150%. Non-IFRS basic earnings per share was €0.72 (2010: €0.53), an increase of 36%.

 

•  

The IFRS and non-IFRS effective tax rates in the third quarter of 2011 were 28.7% (2010: 27.3%) and 23.3% (2010: 28.5%), respectively.

Third quarter 2011 non-IFRS operating profit excludes a deferred support revenue write-down from acquisitions of €1 million, acquisition-related charges of €110 million, profit from discontinued activities of €723 million, share-based compensation expenses of -€17 million and restructuring expenses of €1 million (2010: €36 million, €89 million, expenses of €45 million, €31 million and -€2 million). Third quarter 2011 non-IFRS profit after tax and non-IFRS basic earnings per share exclude a deferred support revenue write-down from acquisitions of €1 million, acquisition-related charges of €74 million, profit from discontinued activities of €454 million, share-based compensation expenses of -€13 million and restructuring expenses of €1 million (2010: €24 million, €64 million, expenses of €20 million, €22 million and -€1 million) net of tax.

FINANCIAL HIGHLIGHTS — Nine Months 2011

 

       Nine Months 20111)  
       IFRS      Non-IFRS2)  

€ million, unless
otherwise stated

      9M 2011        9M 2010        %
change		      9M 2011        9M 2010        %
change		      %  change
const.
curr.3)		  

Software revenue

        2,226           1,757           27 %       2,226           1,757           27 %       31 % 

Support revenue

        5,093           4,479           14 %       5,119           4,515           13 %       15 % 

Software and software-related service revenue

        7,597           6,521           17 %       7,623           6,557           16 %       18 % 

Total revenue

        9,733           8,406           16 %       9,759           8,442           16 %       18 % 

Total operating expenses

        -6,520           -6,359           3 %       -6,830           -6,057           13 %       15 % 

Operating profit

        3,213           2,047           57 %       2,929           2,386           23 %       25 % 

Operating margin (%)

        33.0           24.4           8.6pp         30.0           28.3           1.7pp         1.7pp   

Profit after tax

        2,242           1,379           63 %       2,091           1,629           28 %    

Basic earnings per share (€)

        1.88           1.16           62 %       1.76           1.37           28 %    

Number of employees (FTE)

        54,589           52,921           3 %       na           na           na         na   

 

 

1) All figures are unaudited.

 

2) Adjustments in the revenue line items are for the support revenue that would have been recognized had the acquired entities remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges, share-based compensation expenses, restructuring and discontinued activities.

SAP Reports Third Quarter 2011 Results      Page  4   

 

 

3) Constant currency revenue and operating profit 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.

Revenue — Nine Months 2011

 

  •  

IFRS software revenue was €2.23 billion (2010: €1.76 billion), an increase of 27% (31% at constant currencies).

 

  •  

IFRS software and software-related service revenue was €7.60 billion (2010: €6.52 billion), an increase of 17%. Non-IFRS software and software-related service revenue was €7.62 billion (2010: €6.56 billion), an increase of 16% (18% at constant currencies).

 

  •  

IFRS total revenue was €9.73 billion (2010: €8.41 billion), an increase of 16%. Non-IFRS total revenue was €9.76 billion (2010: €8.44 billion), an increase of 16% (18% at constant currencies).

Nine months 2011 Non-IFRS software and software-related service revenue as well as total revenue exclude a deferred support revenue write-down from acquisitions of €26 million (2010: €36 million).

Profit — Nine Months 2011

 

  •  

IFRS operating profit was €3.21 billion (2010: €2.05 billion), an increase of 57%. Non-IFRS operating profit was €2.93 billion (2010: €2.39 billion), an increase of 23% (25% at constant currencies).

 

  •  

IFRS operating margin was 33.0% (2010: 24.4%), an increase of 8.6 percentage points. Non-IFRS operating margin was 30.0% (2010: 28.3%), or 30.0% at constant currencies, an increase of 1.7 percentage points (1.7 percentage points at constant currencies).

 

  •  

IFRS profit after tax was €2.24 million (2010: €1.38 billion), an increase of 63%. Non-IFRS profit after tax was €2.09 billion (2010: €1.63 billion), an increase of 28%. IFRS basic earnings per share was €1.88 (2010: €1.16), an increase of 62%. Non-IFRS basic earnings per share was €1.76 (2010: €1.37), an increase of 28%.

 

  •  

The IFRS and non-IFRS effective tax rates in the first nine months 2011 were 28.7% (2010: 26.9%) and 26.7% (2010: 27.1%), respectively.

Nine months 2011 non-IFRS operating profit excludes a deferred support revenue write-down from acquisitions of €26 million, acquisition-related charges of €333 million, profit from discontinued activities of €711 million, share-based compensation expenses of €66 million and restructuring expenses of €2 million (2010: €36 million, €209 million, expenses of €46 million, €49 million and -€1 million). Nine months 2011 non-IFRS profit after tax and non-IFRS basic earnings per share exclude a deferred support revenue write-down from acquisitions of €17 million, acquisition-related charges of €224 million, profit from discontinued activities of €442 million, share-based compensation expenses of €48 million and restructuring expenses of €2 million (2010: €24 million, €152 million, expenses of €38 million, €36 million and €0 million) net of tax.

SAP Reports Third Quarter 2011 Results      Page  5   

 

Cash Flow — Nine Months 2011

Operating cash flow was €2.97 billion (2010: €2.05 billion), an increase of 45%. Free cash flow was €2.64 billion (2010: €1.85 billion), an increase of 42%. Free cash flow was 27% of total revenue (2010: 22%). At September 30, 2011, SAP had a total group liquidity of €4.93 billion (December 31, 2010: €3.53 billion), which includes cash and cash equivalents and short term investments. Net liquidity at September 30, 2011 was €1.00 billion compared to -€850 million at December 31, 2010. This is mainly due the positive development of the operating cash flow in the first nine months of 2011.

Given SAP’s strong free cash flow generation over the first nine months of 2011, the Company plans to further evaluate buying back shares in the future. On September 30, 2011, the Company held approximately 38 million treasury shares (approximately 3.1% of total shares outstanding) at an average price of €36.05. In the first nine months of 2011, the Company bought back 3.6 million shares at an average price of €43.84 (total amount: €158 million). These stock purchases were mainly in connection with SAP’s share-based compensation plans.

Business Outlook

SAP’s pipeline continues to remain very strong and companies continue to invest in IT, in particular in innovative software solutions. Due to the ongoing uncertain macroeconomic environment, the Company’s outlook for the full year 2011 remains unchanged from its previous guidance reported on July 26th, 2011 (except for the IFRS effective tax rate):

 

  •  

The Company expects full-year 2011 non-IFRS software and software-related service revenue to increase in a range of 10% – 14% at constant currencies (2010: €9.87 billion), but expects to reach the high end of the range.

 

  •  

The Company expects full-year 2011 non-IFRS operating profit to be in a range of €4.45 billion – €4.65 billion at constant currencies (2010: €4.01 billion), but expects to reach the high end of the range, resulting in 2011 non-IFRS operating margin increasing in a range of 0.5—1.0 percentage points at constant currencies (2010: 32.0%).

 

  •  

The Company projects a full-year 2011 IFRS effective tax rate of 28.5% – 29.5% (2010: 22.5%) and a non-IFRS effective tax rate of 27.5%—28.5% (2010: 27.3%).

Additional Information

Third quarter and year-to-date 2011 revenue, profit and cash flow figures include the revenue, profits and cash flows from Sybase. For the prior-year periods those numbers were only included since the acquisition (July 26, 2010).

SAP Reports Third Quarter 2011 Results      Page  6   

 

For a more detailed description of the non-IFRS adjustments and their limitations as well as our constant currency and free cash flow figures see Explanations of Non-IFRS Measures online (www.sap.com/investor).

SAP has completed a review of the appropriate re-measurement of the provision recorded for the TomorrowNow litigation following the motion granted by the judge on the original jury verdict. The judge’s decision vacated the original verdict of $1.3 billion, but gave Oracle the choice of accepting $272 million or seeking a new trial. The deadline for Oracle to make that choice will vary depending on the outcome and timing of a ruling on Oracle’s motion for an early appeal. If the early appeal is denied and Oracle rejects the reduced damages of $272 million, then there will be a new trial to determine damages.

The re-measurement of the provision additionally reflects currency exchange rate changes, changes in the estimate of related legal expenses and the fact that TomorrowNow reached an agreement in the copyright case with the United States Department of Justice in the third quarter for $20 million. As this amount was paid in the third quarter it is no longer included in the provision recorded for the litigation.

While the resulting re-measurement of the TomorrowNow litigation provision favorably impacts SAP’s IFRS operating profit and margin it does not have an effect on SAP’s non-IFRS operating profit and margin.

Major Customer Wins

In the third quarter of 2011, SAP closed the following major contracts.

EMEA

TOTAL SA, Unilever PLC, AOK, DekaBank Deutsche Girozentrale, Givaudan Suisse SA, Royal Bank of Scotland Group Plc

Americas

Automercados S.A. de C. V, Johnson Controls, Inc., American Railcar Industries, Inc, Waters Corporation, Bristol-Myers Squibb Company, Pacific Coast Building Products

Asia Pacific/Japan

Assam Power Distribution Company Ltd., Beijing Toread Outdoor Products Co., Union Steel Mfg. Co., Ltd., Maharashtra State Electricity, Transfield Services Limited, Far East Organization

SAP Business ByDesign

SOUPLETUBE, Markwins International Corp, INFORA GmbH, AbsolutData Research & Analytics, Wireless Advanced Communications, SolarBridge Technologies, Marsulex Environmental Technologies Corp, BIOBASE GmbH

Q3 2011 Interim Report

SAP’s Q3 2011 Interim Report was published today and is available at www.sap.com/investor for download. The interim report includes an update on SAP’s sustainability performance.

SAP Reports Third Quarter 2011 Results      Page  7   

 

Webcast

SAP senior management will host a conference call Wednesday, October 26th at 2:00 PM (CET) / 1:00 PM (GMT) / 8:00 AM (Eastern) / 5:00 AM (Pacific). 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 176,000 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.

# # #

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP’s future financial results are discussed more fully in SAP’s filings with the U.S. Securities and Exchange Commission (“SEC”), including SAP’s most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

© 2011 SAP AG. All rights reserved.

SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects Explorer, StreamWork, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries.

Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects Software Ltd. Business Objects is an SAP company. Sybase and Adaptive Server, iAnywhere, Sybase 365, SQL Anywhere, and other Sybase products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Sybase, Inc. Sybase is an SAP company.

All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary.

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For more information, press only:

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SAP Reports Third Quarter 2011 Results      Page  8   

 

For more information, financial community only:

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Follow SAP Investor Relations on Twitter at @sapinvestor.

Appendix – Financial Information to Follow

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FINANCIAL INFORMATION

FOR THE THIRD QUARTER 2011

(Condensed and Unaudited)

 

        Page  

Financial Statements (IFRS)

  

Income Statements – Quarter

     F1   

Income Statements – Nine Months

     F2   

Statements of Financial Position

     F3   

Statements of Cash Flows

     F5   

Supplementary Financial Information

  

Reconciliations from Non-IFRS Numbers to IFRS Numbers

     F6 to F7   

Revenue by Region

     F8 to F9   

Financial Statements (IFRS)

CONSOLIDATED INCOME STATEMENT

for the three months ended September 30

 

€ millions, unless

otherwise stated

    2011      2010      Change
in %		  

Software revenue

      841         656         28   

Support revenue

      1,757         1,559         13   

Subscription and other software-related service revenue

      93         101         –8   

Software and software-related service revenue

      2,691         2,316         16   

Consulting revenue

      578         565         2   

Other service revenue

      140         122         15   

Professional services and other service revenue

      718         687         5   

Total revenue

      3,409         3,003         14   

Cost of software and software-related services

      –513         –469         9   

Cost of professional services and other services

      –537         –530         1   

Research and development

      –436         –453         –4   

Sales and marketing

      –721         –642         12   

General and administration

      –168         –157         7   

Restructuring

      –1         2         –150   

TomorrowNow litigation

      723         –45         –1,707   

Other operating income/expense, net

      3         7         –57   

Total operating expenses

      –1,650         –2,287         –28   

Operating profit

      1,759         716         146   

Other non-operating income/expense, net

      0         –13         –100   

Finance income

      29         24         19   

Finance Cost TomorrowNow litigation

      7         0         N/A   

Other finance costs

      –38         –38         0   

Finance costs

      –31         –38         –20   

Financial income, net

      –2         –14         –86   

Profit before tax

      1,757         689         155   

Income tax TomorrowNow litigation

      –276         17         –1,724   

Other income tax expense

      –229         –205         12   

Income tax expense

      –505         –188         169   

Profit after tax

      1,251         501         150   

Profit attributable to non-controlling interests

      0         1         –100   

Profit attributable to owners of parent

      1,251         500         150   

    

                           

Basic earnings per share, in €*

      1.05         0.42         150   

Diluted earnings per share, in €*

      1.05         0.42         150   

 

* For the three months ended September 30, 2011 and 2010 the weighted average number of shares were 1,190 million (Diluted: 1,190 million) and 1,188 million (Diluted: 1,188 million), respectively (treasury stock excluded).

 

F1

CONSOLIDATED INCOME STATEMENT

for the nine months ended September 30

 

€ millions, unless

otherwise stated

    2011      2010      Change
in %		  

Software revenue

      2,226         1,757         27   

Support revenue

      5,093         4,479         14   

Subscription and other software-related service revenue

      278         285         –2   

Software and software-related service revenue

      7,597         6,521         17   

Consulting revenue

      1,726         1,572         10   

Other service revenue

      410         313         31   

Professional services and other service revenue

      2,136         1,885         13   

Total revenue

      9,733         8,406         16   

Cost of software and software-related services

      –1,503         –1,281         17   

Cost of professional services and other services

      –1,672         –1,478         13   

Research and development

      –1,402         –1,243         13   

Sales and marketing

      –2,140         –1,858         15   

General and administration

      –515         –461         12   

Restructuring

      –2         1         –300   

TomorrowNow litigation

      711         –46         –1,646   

Other operating income/expense, net

      3         7         –57   

Total operating expenses

      –6,520         –6,359         3   

Operating profit

      3,213         2,047         57   

Other non-operating income/expense, net

      –34         –136         –75   

Finance income

      78         52         50   

Finance costs TomorrowNow litigation

      7         0         N/A   

Other finance costs

      –119         –77         55   

Finance costs

      –112         –77         45   

Financial income, net

      –34         –25         36   

Profit before tax

      3,145         1,886         67   

Income tax TomorrowNow litigation

      –276         18         –1,633   

Other income tax expense

      –626         –525         19   

Income tax expense

      –902         –507         78   

Profit after tax

      2,242         1,379         63   

Profit attributable to non-controlling interests

      1         2         –50   

Profit attributable to owners of parent

      2,241         1,377         63   

    

                           

Basic earnings per share, in €*

      1.88         1.16         62   

Diluted earnings per share, in €*

      1.88         1.16         62   

 

* For the nine months ended September 30, 2011 and 2010 the weighted average number of shares were 1,189 million (Diluted: 1,190 million) and 1,188 million (Diluted: 1,189 million), respectively (treasury stock excluded).

 

F2

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

as at September 30, 2011 and December 31, 2010

 

€ millions

    2011      2010  

Cash and cash equivalents

      3,911         3,518   

Other financial assets

      1,150         158   

Trade and other receivables

      2,530         3,099   

Other non-financial assets

      224         181   

Tax assets

      157         187   

Assets held for sale

      28         0   

Total current assets

      8,000         7,143   

Goodwill

      8,441         8,428   

Intangible assets

      2,081         2,376   

Property, plant, and equipment

      1,497         1,449   

Other financial assets

      541         475   

Trade and other receivables

      72         78   

Other non-financial assets

      36         31   

Tax assets

      131         122   

Deferred tax assets

      440         737   

Total non-current assets

      13,239         13,696   

Total assets

      21,239         20,839   

 

F3

€ millions

    2011      2010  

Trade and other payables

      809         923   

Tax liabilities

      128         164   

Financial liabilities

      177         142   

Other non-financial liabilities

      1,325         1,726   

Provision TomorrowNow litigation

      230         997   

Other provisions

      312         290   

Provisions

      542         1,287   

Deferred income

      1,536         911   

Liabilities held for sale

      10         0   

Total current liabilities

      4,527         5,153   

Trade and other payables

      46         30   

Tax liabilities

      437         369   

Financial liabilities

      4,007         4,449   

Other non-financial liabilities

      85         85   

Provisions

      239         292   

Deferred tax liabilities

      499         574   

Deferred income

      60         63   

Total non-current liabilities

      5,373         5,862   

Total liabilities

      9,900         11,015   

Issued capital

      1,228         1,227   

Share premium

      395         337   

Retained earnings

      11,277         9,767   

Other components of equity

      –201         –142   

Treasury shares

      –1,368         –1,382   

Equity attributable to owners of parent

      11,331         9,807   

Non-controlling interests

      8         17   

Total equity

      11,339         9,824   

Equity and liabilities

      21,239         20,839   

 

F4

CONSOLIDATED STATEMENTS OF CASH FLOWS

for the nine months ended September 30

 

€ millions

    2011      2010  

Profit after tax

      2,242         1,379   

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

      

Depreciation and amortization

      536         370   

Income tax expense

      902         507   

Finance income and finance costs, net

      34         25   

Gains/losses on disposals of non-current assets

      2         2   

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

      0         –9   

Other adjustments for non-cash items

      30         36   

Decrease/increase in trade receivables

      473         515   

Decrease/increase in other assets

      –58         –371   

Decrease/increase in trade payables, provisions and other liabilities

      –1,184         –328   

Decrease/increase in deferred income

      667         553   

Cash flows due to TomorrowNow litigation

      –32         –3   

Interest paid

      –109         –48   

Interest received

      65         49   

Income taxes paid, net of refunds

      –602         –625   

Net cash flows from operating activities

      2,966         2,052   

Business combinations, net of cash and cash equivalents acquired

      –66         –4,184   

Purchase of intangible assets and property, plant and equipment

      –329         –200   

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

      26         23   

Purchase of equity or debt instruments of other entities

      –1,560         –687   

Proceeds from sales of equity or debt instruments of other entities

      518         1,248   

Net cash flows from investing activities

      –1,411         –3,800   

Purchase of non-controlling interests

      –24         0   

Dividends paid

      –713         –594   

Purchase of treasury shares

      –158         –220   

Proceeds from reissuance of treasury shares

      170         109   

Proceeds from issuing shares (share-based compensation)

      34         26   

Proceeds from borrowings

      519         5,019   

Repayments of borrowings

      –1,005         –1,721   

Net cash flows from financing activities

      1,177         2,619   

Effect of foreign exchange rates on cash and cash equivalents

      15         73   

Net decrease/increase in cash and cash equivalents

      393         944   

Cash and cash equivalents at the beginning of the period

      3,518         1,884   

Cash and cash equivalents at the end of the period

      3,911         2,828   

 

F5

Supplementary Financial Information

RECONCILIATIONS FROM NON-IFRS NUMBERS TO IFRS NUMBERS

(Unaudited)

The following table presents 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.

 

    Three months ended September 30  

€ millions, unless
otherwise stated

   2011     2010     Change in %  
    IFRS     Adj.*     Non-
IFRS*		     Currency
impact**		     Non-IFRS
constant
currency**		     IFRS     Adj.*      Non-
IFRS*		     IFRS     Non-
IFRS*		     Non-IFRS
constant
currency**		  

Non-IFRS Revenue Numbers

                                                                                         

Software revenue

     841        0        841        26        867        656        0         656        28        28        32   

Support revenue

     1,757        1        1,758        47        1,805        1,559        36         1,595        13        10        13   

Subscription and other software- related service revenue

     93        0        93        1        94        101        0         101        –8        –8        –7   

Software and software-related service revenue

     2,691        1        2,692        74        2,766        2,316        36         2,352        16        14        18   

Consulting revenue

     578        0        578        19        597        565        0         565        2        2        6   

Other service revenue

     140        0        140        4        144        122        0         122        15        15        18   

Professional services and other service revenue

     718        0        718        23        741        687        0         687        5        5        8   

Total revenue

     3,409        1        3,410        97        3,507        3,003        36         3,039        14        12        15   

Non-IFRS Operating Expense Numbers

                                                                                         

Cost of software and software-related services

     –513        70        –443            –469        59         –410        9        8     

Cost of professional services and other services

     –537        3        –534            –530        10         –520        1        3     

Research and development

     –436        –4        –440            –453        12         –441        –4        0     

Sales and marketing

     –721        19        –702            –642        30         –612        12        15     

General and administration

     –168        5        –163            –157        9         –148        7        10     

Restructuring

     –1        1        0            2        –2         0        –150        0     

TomorrowNow litigation

     723        –723        0            –45        45         0        –1,707        0     

Other operating income/expense, net

     3        0        3            7        0         7        –57        –57     

Total operating expenses

     –1,650        –629        –2,279        –68        –2,347        –2,287        163         –2,124        –28        7        10   

Non-IFRS Profit Numbers

                                                                                         

Operating profit

     1,759        –628        1,131        29        1,160        716        199         915        146        24        27   

Other non-operating income/expense, net

     0        0        0            –13        –8         –21        –100        –100     

Finance income

     29        0        29            24        0         24        19        19     

Finance Cost TomorrowNow litigation

     7        –7        0            0        0         0        N/A        0     

Other finance costs

     –38        0        –38            –38        0         –38        0        0     

Finance costs

     –31        –7        –38            –38        0         –38        –20        0     

Financial income, net

     –2        –7        –9                        –14        0         –14        –86        –36        –86   

Profit before tax

     1,757        –635        1,122            689        191         880        155        28     

Income tax TomorrowNow litigation

     –276        276        0            17        –17         0        –1,724        0     

Other income tax expense

     –229        –32        –261            –205        –46         –251        12        4     

Income tax expense

     –505        244        –261                        –188        –63         –251        169        4           

Profit after tax

     1,251        –391        860            501        128         629        150        37     

Profit attributable to non - controlling interests

     0        0        0            1        0         1        –100        –100     

Profit attributable to owners of parent

     1,251        –391        860            500        128         628        150        37     

Non-IFRS Key Ratios

                                                                                         

Operating margin in %

     51.6                33.2                33.1        23.8                 30.1        27.8pp        3.1pp        3.0pp   

Effective tax rate in %

     28.7                23.3                        27.3                 28.5        1.4pp        –5.2pp           

Basic earnings per share, in €*

     1.05          0.72            0.42           0.53        150        36     

 

F6

    Nine months ended September 30  

€ millions, unless
otherwise stated

   2011     2010     Change in %  
    IFRS     Adj.*     Non-
IFRS*		     Currency
impact**		     Non-IFRS
constant
currency**		     IFRS     Adj.*     Non-
IFRS*		     IFRS     Non-
IFRS*		     Non-IFRS
constant
currency**		  

Non-IFRS Revenue Numbers

                                                                                        

Software revenue

     2,226        0        2,226        78        2,304        1,757        0        1,757        27        27        31   

Support revenue

     5,093        26        5,119        61        5,180        4,479        36        4,515        14        13        15   

Subscription and other software-related service revenue

     278        0        278        1        279        285        0        285        –2        –2        –2   

Software and software-related service revenue

     7,597        26        7,623        140        7,763        6,521        36        6,557        17        16        18   

Consulting revenue

     1,726        0        1,726        34        1,760        1,572        0        1,572        10        10        12   

Other service revenue

     410        0        410        7        417        313        0        313        31        31        33   

Professional services and other service revenue

     2,136        0        2,136        41        2,177        1,885        0        1,885        13        13        15   

Total revenue

     9,733        26        9,759        181        9,940        8,406        36        8,442        16        16        18   

Non-IFRS Operating Expense Numbers

                                                                                        

Cost of software and software-related services

     –1,503        216        –1,287            –1,281        138        –1,143        17        13     

Cost of professional services and other services

     –1,672        28        –1,644            –1,478        13        –1,465        13        12     

Research and development

     –1,402        36        –1,366            –1,243        23        –1,220        13        12     

Sales and marketing

     –2,140        96        –2,044            –1,858        61        –1,797        15        14     

General and administration

     –515        23        –492            –461        22        –439        12        12     

Restructuring

     –2        2        0            1        –1        0        –300        0     

TomorrowNow litigation

     711        –711        0            –46        46        0        –1,646        0     

Other operating income/expense, net

     3        0        3            7        0        7        –57        –57     

Total operating expenses

     –6,520        –310        –6,830        –124        –6,954        –6,359        303        –6,057        3        13        15   

Non-IFRS Profit Numbers

                                                                                        

Operating profit

     3,213        –284        2,929        57        2,986        2,047        339        2,386        57        23        25   

Other non-operating income/expense, net

     –34        0        –34            –136        9        –127        –75        –73     

Finance income

     78        0        78            52        0        52        50        50     

Finance costs TomorrowNow litigation

     7        –7        0            0        0        0        N/A        0     

Other finance costs

     –119        0        –119            –77        0        77        55        –255     

Finance costs

     –112        –7        –119            –77        0        –77        45        54     

Financial income, net

     –34        –7        –41                        –25        0        –25        36        64           

Profit before tax

     3,145        –291        2,854            1,886        348        2,234        67        28     

Income tax TomorrowNow litigation

     –276        276        0            18        –18        0        –1,633        N/A     

Other income tax expense

     –626        –136        –762            –525        116        –409        19        86     

Income tax expense

     –902        140        –762                        –507        –98        –605        78        26           

Profit after tax

     2,242        –151        2,091            1,379        250        1,629        63        28     

Profit attributable to non-controlling interests

     1        1        2            2        0        2        –50        0     

Profit attributable to owners of parent

     2,241        152        2,089            1,377        250        1,627        63        28     

Non-IFRS Key Ratios

                      
                                                                                         

Operating margin in %

     33.0                30.0                30.0        24.4                28.3        8.6pp        1.7pp        1.7pp   

Effective tax rate in %

     28.7                26.7                        26.9                27.1        1.8pp        0.4pp           

Basic earnings per share, in €*

     1.88          1.76            1.16          1.37        62        28     

 

* Adjustments in the revenue line items are for support revenue that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges, share-based compensation expenses, restructuring expenses and discontinued activities.

 

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

Differences may exist due to rounding.

 

F7

REVENUE BY REGION

(Unaudited)

The following table presents our IFRS and non-IFRS revenue by region based on customer location. The table also presents 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.

 

     Three months ended September 30  

€ millions

    2011      2010      Change in %  
     IFRS      Adj.*      Non-
IFRS*		      Currency
impact**		      Non-IFRS
constant
currency**		      IFRS      Adj.*      Non-
IFRS*		      IFRS      Non-
IFRS*		      Non-IFRS
constant
currency**		  

Software revenue by region

                                                                                                   

EMEA

      356         0         356         5         361         287         0         287         24         24         26   

Americas

      321         0         321         21         342         253         0         253         27         27         35   

Asia Pacific Japan

      163         0         163         2         165         116         0         116         41         41         42   

Software revenue

      841         0         841         26         867         656         0         656         28         28         32   

Software and software-related service revenue by region

                                                                                                   

Germany

      420         0         420         0         420         369         0         369         14         14         14   

Rest of EMEA

      897         0         897         4         901         788         10         798         14         12         13   

Total EMEA

      1,316         0         1,316         4         1,320         1,158         10         1,168         14         13         13   

United States

      680         1         681         58         739         606         21         627         12         9         18   

Rest of Americas

      258         0         258         11         269         200         2         202         29         28         33   

Total Americas

      938         1         939         68         1,007         806         24         830         16         13         21   

Japan

      137         0         137         2         135         107         1         108         28         27         25   

Rest of Asia Pacific Japan

      300         0         300         3         303         246         1         247         22         21         23   

Total Asia Pacific Japan

      437         0         437         2         439         352         3         355         24         23         24   

Software and software-related service revenue

      2,691         1         2,692         74         2,766         2,316         36         2,352         16         14         18   

Total revenue by region

                                                                                                   

Germany

      577         0         577         0         577         521         0         521         11         11         11   

Rest of EMEA

      1,086         0         1,086         5         1,091         975         10         985         11         10         11   

Total EMEA

      1,663         0         1,663         6         1,669         1,496         10         1,506         11         10         11   

United States

      888         1         889         76         965         810         21         831         10         7         16   

Rest ofst Americas

      334         0         334         14         348         268         2         270         25         24         29   

Total Americas

      1,222         1         1,223         91         1,314         1,078         24         1,102         13         11         19   

Japan

      158         0         158         2         156         125         1         126         26         25         24   

Rest of Asia Pacific Japan

      366         0         366         3         369         304         1         305         20         20         21   

Total Asia Pacific Japan

      524         0         524         1         525         429         3         432         22         21         22   

Total revenue

      3,409         1         3,410         97         3,507         3,003         36         3,039         14         12         15   

 

F8

     Nine months ended September 30  

€ millions

    2011      2010      Change in %  
     IFRS      Adj.*      Non-
IFRS*		      Currency
impact**		      Non-IFRS
constant
currency**		      IFRS      Adj.*      Non-
IFRS*		      IFRS      Non-
IFRS*		      Non-IFRS
constant
currency**		  

Software revenue by region

                                                                                                   

EMEA

      929         0         929         7         936         747         0         747         24         24         25   

Americas

      870         0         870         66         936         694         0         694         25         25         35   

Asia Pacific Japan

      427         0         427         6         433         317         0         317         35         35         37   

Software revenue

      2,226         0         2,226         78         2,304         1,757         0         1,757         27         27         31   

Software and software-related service revenue by region

                                                                                                   

Germany

      1,148         0         1,148         0         1,148         1,040         0         1,040         10         10         10   

Rest of EMEA

      2,544         7         2,551         –13         2,538         2,197         10         2,207         16         16         15   

Total EMEA

      3,691         7         3,698         –13         3,685         3,237         10         3,247         14         14         13   

United States

      1,975         15         1,990         151         2,141         1,693         21         1,714         17         16         25   

Rest of Americas

      709         2         711         13         724         599         2         601         18         18         20   

Total Americas

      2,684         16         2,700         165         2,865         2,292         24         2,316         17         17         24   

Japan

      398         1         399         –12         387         315         1         316         26         26         22   

Rest of Asia Pacific Japan

      825         1         826         –1         825         678         1         679         22         22         22   

Total Asia Pacific Japan

      1,222         2         1,224         –12         1,212         993         3         996         23         23         22   

Software and software-related service revenue

      7,597         26         7,623         140         7,763         6,521         36         6,557         17         16         18   

Total revenue by region

                                 

Germany

      1,617         0         1,617         0         1,617         1,470         0         1,470         10         10         10   

Rest of EMEA

      3,143         7         3,150         –15         3,135         2,718         10         2,728         16         15         15   

Total EMEA

      4,760         7         4,767         –15         4,752         4,189         10         4,199         14         14         13   

United States

      2,591         15         2,606         196         2,802         2,231         21         2,252         16         16         24   

Rest of Americas

      930         2         932         16         948         790         2         792         18         18         20   

Total Americas

      3,521         16         3,537         214         3,751         3,021         24         3,045         17         16         23   

Japan

      450         1         451         –13         438         361         1         362         25         25         21   

Rest of Asia Pacific Japan

      1,003         1         1,004         –4         1,000         835         1         836         20         20         20   

Total Asia Pacific Japan

      1,453         2         1,455         –17         1,438         1,196         3         1,199         21         21         20   

Total revenue

      9,733         26         9,759         181         9,940         8,406         36         8,442         16         16         18   

 

* Adjustments in the revenue line items are for support revenue that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules. See Explanations of Non-IFRS Measures for details.

 

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

Differences may exist due to rounding.

For a more detailed description of these adjustments and their limitations as well as our constant currency and free cash flow figures see Explanations of Non-IFRS Measures online (www.sap.com/about/investor/index.epx).

 

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