EX-99.1 2 d614987dex991.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1

 

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For Immediate Release

October 21, 2013

Third Quarter and Nine Months Results 2013

SAP Announces Strong Quarter with Double-Digit Growth – Leading the Transition to Cloud and In-Memory

€1.2 Billion in Non-IFRS Software and Cloud Subscription Revenue;

€1.3 Billion in Non-IFRS Operating Profit

 

  •   Third Quarter 2013 Non-IFRS Software and Cloud Subscription Revenue Increased 13% at Constant Currencies (6% at Actual Currencies to €1.17 Billion)
  •   Third Quarter 2013 Non-IFRS Software and Software-Related Service Revenue Increased 12% at Constant Currencies (5% at Actual Currencies to €3.36 Billion)
  •   Triple-Digit Year-Over-Year Growth in Cloud Subscription and Support Revenue – Annual Cloud Revenue Run Rate Now Exceeds €1 Billion
  •   Accelerating SAP’s In-Memory Leadership – 90% Year-Over-Year Growth at Constant Currencies in HANA Software Revenue (79% at Actual Currencies)
  •   Third Quarter 2013 Non-IFRS Operating Profit Reached €1.30 Billion, a 15% Increase at Constant Currencies (5% at Actual Currencies)
  •   Strong Growth in Third Quarter 2013 Earnings Per Share
  •   Full Year Outlook Reiterated

 

WALLDORF, Germany – October 21, 2013 – SAP AG (NYSE: SAP) today announced its financial results for the third quarter and nine months ended September 30, 2013.

BUSINESS HIGHLIGHTS IN THE THIRD QUARTER 2013

“SAP is clearly leading the transition to cloud and in-memory. SAP HANA is the market’s most advanced in-memory database and we are well on our way to reach €1 billion in HANA software revenue since market launch. The strong customer adoption of SAP Business Suite on HANA demonstrates our leadership in innovating the future platform for business,” said Bill McDermott and Jim Hagemann Snabe, Co-CEOs of SAP. “We now are the second largest enterprise cloud company with an annual cloud revenue run rate exceeding €1 billion. We continue to gain market share and grow significantly faster than our primary competitor in all regions.”

 

“SAP had a very strong performance in the third quarter, considering the mixed macroeconomic environment and the strong currency headwinds. Our ongoing focus on operating discipline while successfully scaling our cloud business is paying off. We continued our double-digit growth momentum and increased our Non-IFRS operating margin by 180 basis points at constant currencies,” said Werner Brandt, CFO of SAP.

 

Third quarter non-IFRS software and cloud subscriptions revenue increased 13% at constant currencies year-over-year (6% at actual currencies to €1.17 billion). SAP’s third quarter non-IFRS cloud subscription

SAP Reports Third Quarter 2013 Results    Page  2     

 

and support revenue is growing faster than most cloud competitors. SAP closed another significant contract in the cloud: EMC, a US-headquartered Fortune 500 company, selected SAP’s Cloud solutions including Employee Central to attract and better retain and reward employees, and achieve better visibility and collaboration with its suppliers. The annual cloud revenue run rate now exceeds €1 billion1. With approximately 33 million cloud users, SAP has the largest subscriber base in the cloud market. Non-IFRS deferred cloud subscription and support revenue2 was €382 million as of September 30, 2013, a year-over-year increase of 79%. The Ariba business is showing accelerated synergies with new and upsell application billings growing high double digits. The trailing twelve month Ariba network spend volume3 was approximately $500 billion. Today Ariba is the world’s largest Web-based business trading community with 1.2 million connected companies.

SAP HANA, the platform for real-time business applications, continues to be a major growth engine, with accelerating software revenue growth of 90% year-over-year at constant currencies (79% at actual currencies to €149 million) and over 2,100 customers. SAP Business Suite powered by SAP HANA is the best-in-class platform for high-performance applications and in fact SAP has now over 450 customers. Customers are showing strong interest in SAP HANA Enterprise Cloud.

Overall, SAP’s double-digit growth momentum continued in the third quarter with Non-IFRS software and software-related service revenue increasing 12% at constant currencies (5% at actual currencies) to €3.36 billion.

Efficiency in SAP’s business has further improved with Non-IFRS operating profit reaching €1.30 billion in the third quarter, a 15% increase at constant currencies (5% at actual currencies), resulting in a 180 basis points expansion of the non-IFRS operating margin at constant currencies despite a negative effect from acquisitions of 50 basis points.

Third Quarter 2013 Regional Results

The Americas region delivered a strong third quarter in non-IFRS software and cloud subscription revenue4 with 17% growth year-over-year at constant currencies, driven by an excellent software revenue performance in Latin America and strong non-IFRS cloud subscription and support revenue growth in North America. The EMEA region saw strong growth with non-IFRS software and cloud subscription revenue increasing 14% year-over-year at constant currencies, amidst a mixed market environment. Software revenue in EMEA grew double-digit at constant currencies driven by strong double-digit growth in the Netherlands, Switzerland and the U.K. Non-IFRS software and cloud subscription revenue in the Asia Pacific Japan (APJ) region marked a return to growth with solid single-digit growth at constant currencies, driven by a strong performance in China.

Nine Months 2013 Regional Results

The Americas region delivered a very strong first nine months performance in non-IFRS software and cloud subscription revenue with 23% year-over-year growth at constant currencies. The EMEA region saw strong growth with non-IFRS software and cloud subscription revenue increasing 10% at constant currencies for the first nine months of 2013, which is an impressive result in light of continued market uncertainty. Non-IFRS software and cloud subscriptions revenue in the APJ region declined slightly by 2% at constant currencies in the first nine months of 2013.

 

 

 

 

1 The annual revenue run rate is the third quarter 2013 cloud division revenue of €252 million multiplied by 4.

2 Beginning in Q1 2013, SAP discloses non-IFRS deferred cloud subscription and support revenue, which is a subset of the total, non-IFRS deferred revenue number reported on the balance sheet.

3 Network spend volume is the total value of purchase orders transacted on the Ariba Network in the trailing 12 months.

4 Non-IFRS software and cloud subscription revenue in the regional paragraphs follow SAP’s management view, which is calculated as the combination of software revenue based on location of negotiation and cloud subscription and support revenue based on customer location; growth rates at constant currencies. See SAP’s third quarter and nine month interim report for details.

SAP Reports Third Quarter 2013 Results    Page  3     

 

FINANCIAL RESULTS IN DETAIL

FINANCIAL HIGHLIGHTS – Third Quarter 2013

 

    

 

Third Quarter 20131)

 

     IFRS            

Non-

IFRS2)

               
€ million, unless otherwise stated   Q3 2013   Q3 2012  

%

  change

   Q3 2013   Q3 2012  

%

  change

  

% change

  const. curr.

                                     

Software

   975   1,026   –5   977   1,026   –5   2

Cloud subscriptions and support

   191   63   203   197   80   146   162
Software and cloud subscriptions   1,167   1,089   7   1,174   1,106   6   13
Support   2,184   2,105   4   2,189   2,106   4   11
Software and software-related service revenue   3,351   3,194   5   3,363   3,212   5   12
Total revenue   4,045   3,952   2   4,057   3,970   2   9
Total operating expenses   –3,003   –3,031   –1   –2,761   –2,731   1   6
Operating profit   1,043   921   13   1,296   1,239   5   15
Operating margin (%)   25.8   23.3   2.5pp   32.0   31.2   0.8pp   1.8pp
Profit after tax   762   618   23   933   836   12    
Basic earnings per share (€)   0.64   0.52   23   0.78   0.70   11    
Number of employees (FTE)   66,061   61,344   8   N/A   N/A   N/A   N/A

1) All figures are unaudited.

2) For a detailed description of SAP’s non-IFRS measures see Explanation of Non-IFRS Measures online. For a breakdown of the individual adjustments see page F8 in the appendix to this press release.

IFRS software revenue was €975 million (2012: €1.03 billion), a decrease of 5%. Non-IFRS software revenue was €977 million (2012: €1.03 billion), a decrease of 5% (an increase of 2% at constant currencies). IFRS software and cloud subscription revenue was €1.17 billion (2012: €1.09 billion), an increase of 7%. Non-IFRS software and cloud subscription revenue was €1.17 billion (2012: €1.11 billion), an increase of 6% (13% at constant currencies). IFRS software and software-related service revenue was €3.35 billion (2012: €3.19 billion), an increase of 5%. Non-IFRS software and software-related service revenue was €3.36 billion (2012: €3.21 billion), an increase of 5% (12% at constant currencies). IFRS total revenue was €4.05 billion (2012: €3.95 billion), an increase of 2%. Non-IFRS total revenue was €4.06 billion (2012: €3.97 billion), an increase of 2% (9% at constant currencies).

IFRS operating profit was €1.04 billion (2012: €921 million), an increase of 13%. Non-IFRS operating profit was €1.30 billion (2012: €1.24 billion), an increase of 5% (15% at constant currencies). IFRS operating margin was 25.8% (2012: 23.3%), an increase of 2.5 percentage points. Non-IFRS operating margin was 32.0% (2012: 31.2%), an increase of 0.8 percentage points. Non-IFRS operating margin at constant currencies was 33.0%, an increase of 1.8 percentage points. Non-IFRS operating margin for the third quarter 2013 was negatively impacted affected by approximately 50 basis points due to the acquisitions of Ariba and hybris.

IFRS profit after tax was €762 million (2012: €618 million), an increase of 23%. Non-IFRS profit after tax was €933 million (2012: €836 million), an increase of 12%. IFRS basic earnings per share was €0.64 (2012: €0.52 per share), an increase of 23%. Non-IFRS basic earnings per share was €0.78 (2012: €0.70 per share), an increase of 11%. The IFRS and non-IFRS effective tax rates were 26.4% (2012: 24.8%) and 27.6% (2012: 26.7%), respectively.

SAP Reports Third Quarter 2013 Results    Page 4     

 

FINANCIAL HIGHLIGHTS – Nine Months 2013

 

    

 

Nine Months 20131)

 

   

 

IFRS

 

  

 

Non-IFRS2)

 

                                     
€ million, unless otherwise stated   9M 2013    9M 2012  

%

  change 

   9M 2013    9M 2012   

%

  change 

  

% change

  const. curr. 

                             
                                     

Software

   2,614   2,722   –4   2,616   2,722   –4   0

Cloud subscriptions and support

   488   144   238   547   183   198   208
Software and cloud subscriptions   3,101   2,866   8   3,163   2,905   9   14
Support   6,470   6,071   7   6,484   6,075   7   11
Software and software-related service revenue   9,571   8,937   7   9,647   8,980   7   12
Total revenue   11,708   11,200   5   11,784   11,243   5   9
Total operating expenses   –9,031   –8,727   3   –8,368   –7,998   5   7
Operating profit   2,677   2,473   8   3,416   3,245   5   12
Operating margin (%)   22.9   22.1   0.8pp   29.0   28.9   0.1pp   0.9pp
Profit after tax   2,006   1,723   16   2,498   2,249   11    
Basic earnings per share (€)   1.68   1.45   16   2.09   1.89   11    
Number of employees (FTE)   66,061   61,344   8   N/A   N/A   N/A   N/A

1) All figures are unaudited.

2) For a detailed description of SAP’s non-IFRS measures see Explanation of Non-IFRS Measures online. For a breakdown of the individual adjustments see page F8 in the appendix to this press release.

IFRS software revenue was €2.61 billion (2012: €2.72 billion), a decrease of 4%. Non-IFRS software revenue was €2.62 billion (2012: €2.72 billion), a decrease of 4% (flat at constant currencies). IFRS software and cloud subscription revenue was €3.10 billion (2012: €2.87 billion), an increase of 8%. Non-IFRS software and cloud subscription revenue was €3.16 billion (2012: €2.91 billion), an increase of 9% (14% at constant currencies). IFRS software and software-related service revenue was €9.57 billion (2012: €8.94 billion), an increase of 7%. Non-IFRS software and software-related service revenue was €9.65 billion (2012: €8.98 billion), an increase of 7% (12% at constant currencies). IFRS total revenue was €11.71 billion (2012: €11.20 billion), an increase of 5%. Non-IFRS total revenue was €11.78 billion (2012: €11.24 billion), an increase of 5% (9% at constant currencies).

IFRS operating profit was €2.68 billion (2012: €2.47 billion), an increase of 8%. Non-IFRS operating profit was €3.42 billion (2012: €3.25 billion), an increase of 5% (12% at constant currencies). IFRS operating margin was 22.9% (2012: 22.1%), an increase of 0.8 percentage points. Non-IFRS operating margin was 29.0% (2012: 28.9%), an increase of 0.1 percentage points. Non-IFRS operating margin at constant currencies was 29.8%, an increase of 0.9 percentage points.

IFRS profit after tax was €2.01 billion (2012: €1.72 billion), an increase of 16%. Non-IFRS profit after tax was €2.50 billion (2012: €2.25 billion), an increase of 11%. IFRS basic earnings per share was €1.68 (2012: €1.45 per share), an increase of 16%. Non-IFRS basic earnings per share was €2.09 (2012: €1.89 per share), an increase of 11%. The IFRS and non-IFRS effective tax rates were 23.4% (2012: 24.9%) and 25.6% (2012: 26.7%), respectively.

Operating cash flow was €3.04 billion (2012: €3.06 billion), a decrease of 1%. Free cash flow was €2.64 billion (2012: €2.69 billion), a decrease of 2%. Free cash flow was 23% of total revenue (2012: 24%). At September 30, 2013, SAP had a total group liquidity of €3.31 billion (December 31, 2012: €2.49 billion), which includes cash and cash equivalents and short term investments. Net liquidity at September 30, 2013 was -€2.04 billion compared to -€2.50 billion at December 31, 2012.

SAP Reports Third Quarter 2013 Results    Page 5     

 

BUSINESS OUTLOOK

SAP reiterates the outlook for the full year 2013, which remains unchanged from the outlook provided on July 18, 2013:

 

  •   The Company expects full year 2013 non-IFRS software and software-related service revenue to increase by at least 10% at constant currencies (2012: €13.25 billion).
  •   The Company expects full year 2013 non-IFRS cloud subscription and support revenue of around €750 million at constant currencies (2012: €343 million)
  •   The Company expects full year 2013 SAP HANA software revenue in a range of €650 – €700 million (2012: €392 million).
  •   The Company expects full-year 2013 non-IFRS operating profit to be in a range of €5.85 billion – €5.95 billion at constant currencies (2012: €5.21 billion).
  •   The Company projects a full-year 2013 IFRS effective tax rate of 24.0% – 25.0% (2012: 26.2%) and a non-IFRS effective tax rate of 25.5% – 26.5% (2012: 27.5%).

If exchange rates remain at the September 2013 level for the rest of the year, the Company expects both the fourth quarter and full year 2013 non-IFRS software and software-related service revenue growth rate to be negatively impacted by approximately 5 percentage points from currency and the fourth quarter and full year 2013 non-IFRS operating profit growth rate to be negatively impacted by approximately 7 percentage points from currency.

Additional Information

2013 revenue and profit figures include the revenue and profits from Ariba, SuccessFactors and hybris. The comparative numbers for 2012 do not include SuccessFactors until February 21, 2012, Ariba until October 1, 2012.The hybris acquisition closed on August 1, 2013.

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

# #

Third Quarter 2013 Interim Report

SAP’s third quarter 2013 Interim Report was published today and is available for download at www.sap.com/investor.

Webcast

SAP senior management will host a conference call for financial analysts and media on Monday, October 21st at 2:00 PM (CEST) / 1:00 PM (GMT) / 8:00 AM (EDT) / 5:00 AM (PDT). The conference call will be web cast live on the Company’s website at www.sap.com/investor and will be available for replay.

About SAP

As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 251,000 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

SAP Reports Third Quarter 2013 Results    Page 6     

 

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.

© 2013 SAP AG. All rights reserved.

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

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

These materials are provided by SAP AG 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.

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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 2013

(Condensed and Unaudited)

 

     Page

Financial Statements (IFRS)

   

Income Statements – Quarter

    F1

Income Statements – Nine Months

    F2

Statements of Financial Position

    F3-F4

Statements of Cash Flows

    F5

Supplementary Financial Information

   

Reconciliation from Non-IFRS Numbers to IFRS Numbers

    F6-F7

Non-IFRS Adjustments

    F8

Revenue by Region

    F9-F12

Financial Statements (IFRS)

CONSOLIDATED INCOME STATEMENTS

For the three months ended September 30

 

€ millions, unless otherwise stated    Note         2013           2012     

Change

in %

  

Software

           975           1,026         –5   

Cloud subscriptions and support

               191             63         203   

Software and cloud subscriptions

           1,167           1,089         7   

Support

               2,184             2,105         4   

Software and software-related service revenue

           3,351           3,194         5   

Consulting

               553             616         –10   

Other services

           142           142         0   

Professional services and other service revenue

               695             758         –8   

Total revenue

           4,045           3,952         2   
                                         

Cost of software and software-related services

           –636           –638         0   

Cost of professional services and other services

               –605             –619         –2   

Total cost of revenue

           –1,241           –1,257         –1   

Gross profit

               2,804             2,695         4   

Research and development

           –552           –547         1   

Sales and marketing

               –986             –984         0   

General and administration

           –207           –232         –11   

Restructuring

               –17             –4         >100   

TomorrowNow litigation

           0           –7         <-100   

Other operating income/expense, net

               0             0         19   

Total operating expenses

                   –3,003           –3,031         –1   

Operating profit

               1,043             921         13   
               

Other non-operating income/expense, net

               –1             –92         –99   

Finance income

           38           34         13   

Finance costs

               –45             –41         11   

Financial income, net

           –7           –7         1   

Profit before tax

               1,035             822         26   
               

Income tax expense

    (6)          –274             –204         34   

Profit after tax

           762           618         23   

Profit attributable to non-controlling interests

               0             0         N/A   

Profit attributable to owners of parent

           762           618         23   
                                         

Earnings per share, basic (in €)*

    (7)        0.64           0.52         23   

Earnings per share, diluted (in €)*

    (7)          0.64             0.52         23   

* For the three months ended September 30, 2013 and 2012, the weighted average number of shares was 1,193 million (diluted 1,195 million) and 1,192 million (diluted: 1,193 million), respectively (treasury stock excluded).

 

 

F1

CONSOLIDATED INCOME STATEMENTS

For the nine months ended September 30

 

€ millions, unless otherwise stated    Note         2013           2012     

Change

in %

  

Software

               2,614             2,722         –4   

Cloud subscriptions and support

               488             144         238   

Software and cloud subscriptions

               3,101             2,866         8   

Support

               6,470             6,071         7   

Software and software-related service revenue

               9,571             8,937         7   

Consulting

               1,689             1,830         –8   

Other services

               448             433         3   

Professional services and other service revenue

               2,137             2,263         –6   

Total revenue

                       11,708             11,200         5   
                                         

Cost of software and software-related services

               –1,838             –1,743         5   

Cost of professional services and other services

               –1,820             –1,888         –4   

Total cost of revenue

               –3,658             –3,631         1   

Gross profit

               8,050             7,569         6   

Research and development

               –1,676             –1,638         2   

Sales and marketing

               –3,021             –2,786         8   

General and administration

               –635             –664         –4   

Restructuring

               –47             –8         >100   

TomorrowNow litigation

               0             –1         <-100   

Other operating income/expense, net

               6             1         >100   

Total operating expenses

               –9,031             –8,727         3   

Operating profit

               2,677             2,473         8   
                                         

Other non-operating income/expense, net

               –14             –145         –91   

Finance income

               94             86         10   

Finance costs

               –138             –119         16   

Financial income, net

               –44             –33         33   

Profit before tax

               2,620             2,295         14   
                                         

Income tax expense

    (6)          –614             –572         7   

Profit after tax

               2,006             1,723         16   

Profit attributable to non-controlling interests

               0             0         N/A   

Profit attributable to owners of parent

               2,006             1,723         16   
                                         

Earnings per share, basic (in €)*

    (7)          1.68             1.45         16   

Earnings per share, diluted (in €)*

    (7)          1.68             1.45         16   

* For the nine months ended September 30, 2013 and 2012, the weighted average number of shares was 1,193 million (diluted 1,195 million) and 1,191 million (diluted: 1,192 million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.

 

 

F2

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at September 30, 2013, and December 31, 2012

 

€ millions    Notes              2013           2012  

Cash and cash equivalents

             3,255           2,477   

Other financial assets

    (8)              221             154   

Trade and other receivables

    (9)          3,052           3,917   

Other non-financial assets

                   413             294   

Tax assets

             256           156   

Total current assets

                   7,197             6,998   

Goodwill

             13,876           13,227   

Intangible assets

                   3,108             3,234   

Property, plant, and equipment

             1,771           1,708   

Other financial assets

    (8)              524             509   

Trade and other receivables

    (9)          81           88   

Other non-financial assets

                   90             68   

Tax assets

             192           170   

Deferred tax assets

                   693             708   

Total non-current assets

             20,336           19,711   

Total assets

                   27,534             26,710   

 

 

F3

€ millions    Notes      2013        2012  

Trade and other payables

             793           870   

Tax liabilities

             374           511   

Financial liabilities

    (10)        1,748           802   

Other non-financial liabilities

             1,697           2,136   

Provision TomorrowNow litigation

             227           234   

Other provisions

             357           609   

Provisions

             584           843   

Deferred income

    (11)        2,235           1,386   

Total current liabilities

             7,431           6,547   

Trade and other payables

             45           63   

Tax liabilities

             387           388   

Financial liabilities

    (10)        3,799           4,446   

Other non-financial liabilities

             108           98   

Provisions

             277           361   

Deferred tax liabilities

             506           574   

Deferred income

    (11)        64           62   

Total non-current liabilities

             5,186           5,991   

Total liabilities

             12,618           12,538   

Issued capital

             1,229           1,229   

Share premium

             532           492   

Retained earnings

             14,973           13,973   

Other components of equity

             –542           –194   

Treasury shares

             –1,284           –1,337   

Equity attributable to owners of parent

             14,907           14,163   

Non-controlling interests

             9           8   

Total equity

    (12)        14,916           14,171   

Equity and liabilities

             27,534           26,710   

 

 

F4

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended September 30

 

€ millions      2013        2012  

Profit after tax

        2,006           1,723   

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

                      

Depreciation and amortization

        714           622   

Income tax expense

        614           572   

Financial income, net

        44           33   

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

        44           18   

Other adjustments for non-cash items

        64           28   

Decrease/increase in trade and other receivables

        766           588   

Decrease/increase in other assets

        –180           –109   

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

        –856           –345   

Decrease/increase in deferred income

        898           820   

Cash outflows due to TomorrowNow litigation

        –1           –8   

Interest paid

        –101           –135   

Interest received

        50           67   

Income taxes paid, net of refunds

        –1,022           –817   

Net cash flows from operating activities

        3,040           3,057   
                       

Business combinations, net of cash and cash equivalents acquired

        –1,131           –2,757   

Purchase of intangible assets and property, plant, and equipment

        –401           –370   

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

        40           30   

Purchase of equity or debt instruments of other entities

        –1,358           –905   

Proceeds from sales of equity or debt instruments of other entities

        1,311           1,517   

Net cash flows from investing activities

        –1,539           –2,485   
                       

Dividends paid

        –1,013           –1,310   

Purchase of treasury shares

        0           –53   

Proceeds from reissuance of treasury shares

        36           83   

Proceeds from issuing shares (share-based payments)

        0           15   

Proceeds from borrowings

        1,000           1,000   

Repayments of borrowings

        –624           –1,313   

Net cash flows from financing activities

        –601           –1,578   
                       

Effect of foreign exchange rates on cash and cash equivalents

        –122           –33   

Net decrease/increase in cash and cash equivalents

        778           –1,039   

Cash and cash equivalents at the beginning of the period

        2,477           4,965   

Cash and cash equivalents at the end of the period

        3,255           3,926   

 

 

F5

SUPPLEMENTARY FINANCIAL INFORMATION

(UNAUDITED)

RECONCILIATION FROM NON-IFRS NUMBERS TO IFRS NUMBERS

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

 

     For the three months ended September 30  
€ millions, unless otherwise stated   2013     2012     Change in %  
     IFRS     Adj.*     Non-IFRS*    

Currency

Impact**

    

Non-IFRS

Constant

Currency**

     IFRS     Adj.*     Non-IFRS*     IFRS     Non-IFRS*    

Non-IFRS

Constant

Currency**

  

Revenue Numbers

                                                                                        

Software

     975        2        977        65        1,042        1,026        0        1,026        –5        –5        2   

Cloud subscriptions and support

     191        5        197        13        209        63        17        80        203        146        162   

Software and cloud subscriptions

     1,167        7        1,174        78        1,252        1,089        17        1,106        7        6        13   

Support

     2,184        5        2,189        142        2,331        2,105        1        2,106        4        4        11   

Software and software-related service revenue

     3,351        12        3,363        220        3,583        3,194        18        3,212        5        5        12   

Consulting

     553        0        553        35        588        616        0        616        –10        –10        –5   

Other services

     142        0        142        9        151        142        0        142        0        0        6   

Professional services and other service revenue

     695        0        695        44        739        758        0        758        –8        –8        –3   

Total revenue

     4,045        12        4,057        264        4,321        3,952        18        3,970        2        2        9   
                                                                                         

Operating Expense Numbers

                                                                                        

Cost of software and software-related services

     –636        92        –544                        –638        106        –532        0        2           

Cost of professional services and other services

     –605        34        –571                        –619        43        –576        –2        –1           

Total cost of revenue

     –1,241        126        –1,115                        –1,257        149        –1,108        –1        1           

Gross profit

     2,804        138        2,942                        2,695        167        2,862        4        3           

Research and development

     –552        31        –521                        –547        29        –518        1        1           

Sales and marketing

     –986        46        –940                        –984        67        –917        0        2           

General and administration

     –207        21        –185                        –232        44        –188        –11        –2           

Restructuring

     –17        17        0                        –4        4        0        >100        N/A           

TomorrowNow litigation

     0        0        0                        –7        7        0        <-100        N/A           

Other operating income/expense, net

     0        0        0                        0        0        0        19        19           

Total operating expenses

     –3,003        242        –2,761        –135        –2,896        –3,031        300        –2,731        –1        1        6   
                                                                                         

Profit Numbers

                                                                                        

Operating profit

     1,043        253        1,296        129        1,425        921        318        1,239        13        5        15   
Other non-operating income/expense, net     –1        0        –1                        –92        0        –92        –99        –99           

Finance income

     38        0        38                        34        0        34        13        13           

Finance costs

     –45        0        –45                        –41        0        –41        11        11           

Financial income, net

     –7        0        –7                        –7        0        –7        1        1           

Profit before tax

     1,035        253        1,289                        822        318        1,140        26        13           

Income tax expense

     –274        –82        –355                        –204        –100        –304        34        17           

Profit after tax

     762        172        933                        618        218        836        23        12           

Profit attributable to non-controlling interests

     0        0        0                        0        0        0        N/A        N/A           

Profit attributable to owners of parent

     762        172        933                        618        218        836        23        12           
                                                                                         

Key Ratios

                                                                                        
Operating margin (in %)     25.8                32.0                33.0        23.3                31.2        2.5pp        0.8pp        1.8pp   
Effective tax rate (in %)     26.4                27.6                        24.8                26.7        1.6pp        0.9pp           
Earnings per share, basic (in €)*     0.64                0.78                        0.52                0.70        23        11           
                                                                                         
Deferred cloud subscriptions and support revenue (September 30)     376        6        382                        169        44        213        >100        79           

 

 

F6

      For the nine months ended September 30  
€ millions, unless otherwise stated    2013      2012      Change in %  
      IFRS      Adj.*     

Non-

IFRS*

     

Currency

Impact**

     

Non-IFRS

Constant

Currency**

      IFRS      Adj.*     

Non-

IFRS*

      IFRS     

Non-

IFRS*

     

Non-IFRS

Constant

Currency**

  
Revenue Numbers                                                                                                   

Software

      2,614         2         2,616         117         2,732         2,722         0         2,722         –4         –4         0   

Cloud subscriptions and support

      488         60         547         18         565         144         39         183         238         198         208   

Software and cloud subscriptions

      3,101         62         3,163         135         3,298         2,866         40         2,905         8         9         14   

Support

      6,470         14         6,484         249         6,733         6,071         4         6,075         7         7         11   

Software and software-related service revenue

      9,571         76         9,647         384         10,030         8,937         43         8,980         7         7         12   

Consulting

      1,689         0         1,689         59         1,748         1,830         0         1,830         –8         –8         –4   

Other services

      448         0         448         15         463         433         0         433         3         3         7   

Professional services and other service revenue

      2,137         0         2,137         74         2,211         2,263         0         2,263         –6         –6         –2   
Total revenue      11,708         76         11,784         458         12,242         11,200         43         11,243         5         5         9   
                                                                                                    
Operating Expense Numbers                                                                                                   

Cost of software and software-related services

      –1,838         266         –1,572                           –1,743         253         –1,490         5         6            

Cost of professional services and other services

      –1,820         85         –1,735                           –1,888         108         –1,780         –4         –3            

Total cost of revenue

      –3,658         351         –3,307                           –3,631         361         –3,270         1         1            

Gross profit

      8,050         426         8,477                           7,569         404         7,973         6         6            

Research and development

      –1,676         69         –1,607                           –1,638         97         –1,541         2         4            

Sales and marketing

      –3,021         142         –2,879                           –2,786         177         –2,609         8         10            

General and administration

      –635         55         –581                           –664         85         –579         –4         0            

Restructuring

      –47         47         0                           –8         8         0         >100         N/A            

TomorrowNow litigation

      0         0         0                           –1         1         0         <-100         N/A            

Other operating income/expense, net

      6         0         6                           1         0         1         >100         >100            
Total operating expenses      –9,031         663         –8,368         –229         –8,597         –8,727         729         –7,998         3         5         7   
                                                                                                    
Profit Numbers                                                                                                   
Operating profit      2,677         739         3,416         229         3,645         2,473         772         3,245         8         5         12   
Other non-operating income/expense, net      –14         0         –14                           –145         0         –145         –91         –91            

Finance income

      94         0         94                           86         0         86         10         10            

Finance costs

      –138         0         –138                           –119         1         –118         16         17            
Financial income, net      –44         0         –44                           –33         1         –32         33         38            
Profit before tax      2,620         739         3,359                           2,295         773         3,068         14         9            

Income tax expense

      –614         –248         –861                           –572         –247         –819         7         5            
Profit after tax      2,006         491         2,498                           1,723         526         2,249         16         11            

Profit attributable to non-controlling interests

      0         0         0                           0         0         0         N/A         N/A            

Profit attributable to owners of parent

      2,006         491         2,498                           1,723         526         2,249         16         11            
                                                                                                    
Key Ratios                                                                                                   
Operating margin (in %)      22.9                  29.0                  29.8         22.1                  28.9         0.8pp         0.1pp         0.9pp   
Effective tax rate (in %)      23.4                  25.6                           24.9                  26.7         –1.5pp         –1.1pp            
Earnings per share, basic (in €)*      1.68                  2.09                           1.45                  1.89         16         11            
                                                                                                    
Deferred cloud subscriptions and support revenue (September 30)      376         6         382                           169         44         213         >100         79            

* Adjustments in the revenue line items are for support revenue, cloud subscription 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 compensation expenses, restructuring expenses, and discontinued activities.

** 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.

 

 

F7

NON-IFRS ADJUSTMENTS

 

€ millions, unless otherwise stated   

7/1 –

  9/30/2013

 

   

  1/1 –  

  9/30/2013  

 

   

7/1 –

  9/30/2012

 

   

1/1 – 

  9/30/2012 

 

                     
Software and software-related service revenue (IFRS)    3,351    9,571      3,194    8,937 
Adjustment for deferred revenue write-down    12    76      18    43 
Software and software-related service revenue (Non-IFRS)    3,363    9,647      3,212    8,980 
                     
Operating profit (IFRS)    1,043    2,677      921    2,473 

Revenue Adjustments (per above)

    12    76      18    43 

Adjustment for discontinued activities

    0    0      7    1 

Adjustment for acquisition-related charges

    142    424      137    387 

Adjustment for stock-based compensation expenses

    83    192      152    333 

Adjustment for restructuring

    17    47      4    8 

Operating expense adjustments

    242    663      300    729 
Operating profit adjustments    253    739      318    772 
Operating profit (Non-IFRS)    1,296    3,416      1,239    3,245 
                     
Profit after tax (IFRS)    762    2,006      618    1,723 

Revenue adjustments (per above)

    12    76      18    43 

Operating profit expense adjustments (per above)

    242    663      300    729 
Adjustments pre-tax    253    739      318    773 
Taxes on adjustments    –82    –248      –100    –247 
Profit after tax (Non-IFRS)    933    2,498      836    2,249 

Due to rounding, numbers may not add up precisely.

 

 

F8

REVENUE BY REGION

The following table presents our IFRS and non-IFRS revenue by region. Details regarding the different views (based on location of contract negotiation respectively by customer location are described in the note “Segment and Geographic Information” of our Consolidated Financial Statements. 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.

 

Revenues by Region

- Management View

        
                                                                                                    
      For the three months ended September 30  
€ millions    2013      2012      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

      402         1         403         8         411         374         0         374         7         8         10   

Americas

      398         0         398         34         432         458         0         458         –13         –13         –6   

APJ

      176         0         176         23         199         194         0         194         –9         –9         3   
Software revenue      975         2         977         65         1,042         1,026         0         1,026         –5         –5         2   
                                                                                                    
Software revenue by location of negotiation and cloud subscription revenue by region                                                                                                   

EMEA

      433         1         434         9         443         390         0         390         11         11         14   

Americas

      550         5         555         45         600         502         16         518         10         8         17   

APJ

      185         0         185         24         209         197         0         197         –6         –6         6   
Software revenue by location of negotiation and cloud subscription revenue      1,167         7         1,174         78         1,252         1,089         17         1,106         7         6         13   
                                                                                                    

Revenues by Regions – Location of

Customers

                                                                                                   
                                                                                                    
      For the three months ended September 30  
€ millions    2013      2012      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

      422         1         423         10         433         373         0         373         13         13         16   

Americas

      364         1         365         32         397         459         0         459         –21         –20         –14   

APJ

      189         0         189         24         213         194         0         194         –3         –3         10   
Software revenue      975         2         977         65         1,042         1,026         0         1,026         –5         –5         2   
                                                                                                    
Cloud subscriptions and support revenue by region                                                                                                   

EMEA

      31         0         31         1         32         16         0         16         89         89         97   

Americas

      152         5         157         11         168         44         16         60         >100         >100         >100   

APJ

      9         0         9         1         10         3         0         3         >100         >100         >100   
Cloud subscriptions and support revenue      191         5         197         13         209         63         17         80         203         146         162   
                                                                                                    
Software and cloud subscription revenue by region                                                                                                   

EMEA

      452         2         454         11         465         390         0         390         16         16         19   

Americas

      516         6         522         42         564         502         17         519         3         1         9   

APJ

      198         0         198         25         223         197         0         197         1         1         13   
Software and cloud subscription revenue      1,167         7         1,174         78         1,252         1,089         17         1,106         7         6         13   

 

 

F9

Software and software-related service revenue by region

                                                                                                       

Germany

      470         0         470           1         471         438         0         438         7         7           7   

Rest of EMEA

      1,062         2         1,064           34         1,098         957         0         957         11         11           15   

Total EMEA

      1,531         3         1,534           34         1,568         1,395         0         1,395         10         10           12   

United States

      931         8         939           53         992         921         18         939         1         0           6   

Rest of Americas

      357         1         358           49         407         326         0         326         10         10           25   

Total Americas

      1,288         9         1,297           102         1,399         1,247         18         1,265         3         3           11   

Japan

      140         0         140           46         186         174         0         174         –20         –20           7   

Rest of APJ

      391         0         391           38         429         377         0         377         4         4           14   

Total APJ

      531         0         531           84         615         552         0         552         –4         –4           12   

Software and software-related service revenue

      3,351         12         3,363           220         3,583         3,194         18         3,212         5         5           12   
                                                                                                        

Total revenue by region

                                                                                                       

Germany

      598         0         598           0         598         575         0         575         4         4           4   

Rest of EMEA

      1,257         2         1,259           43         1,302         1,142         0         1,142         10         10           14   

Total EMEA

      1,854         3         1,857           43         1,900         1,716         0         1,716         8         8           11   

United States

      1,144         8         1,152           65         1,217         1,152         18         1,170         –1         –2           4   

Rest of Americas

      430         1         431           57         488         423         0         423         2         2           15   

Total Americas

      1,574         9         1,583           122         1,705         1,575         18         1,593         0         –1           7   

Japan

      157         0         157           52         209         197         0         197         –20         –20           6   

Rest of APJ

      460         0         460           47         507         463         0         463         –1         –1           10   

Total APJ

      617         1         618           98         716         661         0         661         –7         –7           8   

Total revenue

      4,045         12         4,057           264         4,321         3,952         18         3,970         2         2           9   

 

 

F10

Revenues by Region

- Management View

                                                                                                   
                                                                                                    
      For the nine months ended September 30  
€ millions    2013      2012      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

      1,116         2         1,118         19         1,137         1,069         0         1,069         4         5         6   

Americas

      1,043         1         1,044         58         1,102         1,131         0         1,131         –8         –8         –3   

APJ

      454         0         454         40         494         522         0         522         –13         –13         –5   

Software revenue

      2,614         2         2,616         117         2,732         2,722         0         2,722         –4         –4         0   
                                                                                                    
Software revenue by location of negotiation and cloud subscription revenue by region                                                                                                   

EMEA

      1,197         2         1,199         21         1,220         1,113         0         1,113         8         8         10   

Americas

      1,425         60         1,485         73         1,558         1,222         40         1,262         17         18         23   

APJ

      479         0         479         41         520         531         0         531         –10         –10         –2   
Software revenue by location of negotiation and cloud subscription revenue      3,101         62         3,163         135         3,298         2,866         39         2,905         8         9         14   
                                                                                                    
                                                                                                    

Revenues by Regions – Location of

Customers

         
                                                                                                    
      For the nine months ended September 30  
€ millions    2013      2012      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

      1,138         1         1,139         20         1,159         1,105         0         1,105         3         3         5   

Americas

      1,007         1         1,008         55         1,063         1,090         0         1,090         –8         –8         –2   

APJ

      469         0         469         41         510         527         0         527         –11         –11         –3   

Software revenue

      2,614         2         2,616         117         2,732         2,722         0         2,722         –4         –4         0   
                                                                                                    
Cloud subscriptions and support revenue by region                                                                                                   

EMEA

      81         0         81         2         83         44         0         44         84         84         88   

Americas

      382         59         441         15         456         91         40         131         >100         >100         >100   

APJ

      25         0         25         1         26         9         0         9         >100         >100         >100   
Cloud subscriptions and support revenue      488         60         547         18         565         144         40         184         238         198         208   
                                                                                                    
Software and cloud subscription revenue by region                                                                                                   

EMEA

      1,219         1         1,220         23         1,243         1,149         0         1,149         6         6         8   

Americas

      1,389         61         1,450         70         1,520         1,181         39         1,220         18         19         25   

APJ

      493         0         493         43         536         536         0         536         –8         –8         0   

Software and cloud subscription revenue

      3,101         62         3,163         135         3,298         2,866         39         2,905         8         9         14   

 

 

F11

Software and software-related service revenue by region

                                                                                                       

Germany

      1,324         0         1324           0         1,324         1,245         1         1,246         6         6           6   

Rest of EMEA

      3,052         2         3,054           67         3,121         2,845         1         2,846         7         7           10   

Total EMEA

      4,376         2         4,378           67         4,445         4,090         2         4,092         7         7           9   

United States

      2,692         71         2,763           84         2,847         2,456         41         2,497         10         11           14   

Rest of Americas

      1,002         1         1,003           81         1,084         872         0         872         15         15           24   

Total Americas

      3,693         73         3,766           164         3,930         3,328         41         3,369         11         12           17   

Japan

      403         0         403           101         504         489         0         489         –18         –18           3   

Rest of APJ

      1,100         0         1,100           51         1,151         1,030         0         1,030         7         7           12   

Total APJ

      1,502         0         1,502           153         1,655         1,519         0         1,519         –1         –1           9   

Software and software-related service revenue

      9,571         76         9,647           384         10,030         8,937         43         8,980         7         7           12   
                                                                                                        

Total revenue by region

                                                                                                       

Germany

      1,714         0         1,714           0         1,714         1,666         1         1,667         3         3           3   

Rest of EMEA

      3,642         2         3,644           83         3,727         3,433         1         3,434         6         6           9   

Total EMEA

      5,356         3         5,359           82         5,441         5,099         2         5,101         5         5           7   

United States

      3,353         71         3,424           102         3,526         3,151         41         3,192         6         7           10   

Rest of Americas

      1,226         1         1,227           97         1,324         1,138         0         1,138         8         8           16   

Total Americas

      4,579         72         4,651           199         4,850         4,289         41         4,330         7         7           12   

Japan

      453         0         453           114         567         557         0         557         –19         –19           2   

Rest of APJ

      1,320         0         1,320           64         1,384         1,254         0         1,254         5         5           10   

Total APJ

      1,774         0         1,774           177         1,951         1,812         0         1,812         –2         –2           8   

Total revenue

      11,708         76         11,784           458         12,242         11,200         43         11,243         5         5           9   

* Adjustments in the revenue line items are for support revenue, cloud subscription 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.

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

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

Due to rounding, numbers may not add up precisely.

 

 

F12