EX-99.1 2 d760457dex991.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1

 

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For Immediate Release

July 17, 2014

SAP Announces Second Quarter 2014 Results

SAP Raises Cloud Outlook

Strong Cloud Momentum with 39% Growth and Broad Market Adoption of SAP HANA Continues – Validating “Run simple” Vision

 

  •  

Raising Full Year 2014 Non-IFRS Cloud Subscriptions and Support Revenue Outlook to €1,000 – €1,050 Million at Constant Currencies

 

  •  

Fastest Growing Enterprise Cloud Company at Scale: Non-IFRS Cloud Subscriptions and Support Revenue Increased 39% at Constant Currencies (32% at Actual Currencies)

 

  •  

Strong Cloud Billings: Non-IFRS Calculated Cloud Billings Increased 37% at Constant Currencies

 

  •  

Growing the World’s Largest Business Network: Approximately 1.55 Million Connected Companies Transacting Approximately $540 Billion

 

  •  

Broad Market Adoption of SAP HANA as Real-Time Business Platform: 1,200 SAP Business Suite on HANA Customers

 

  •  

Delivered Second Quarter at High End of Full Year SSRS Outlook: Non-IFRS Software and Software-Related Service Revenue Increased 8% at Constant Currencies (4% at Actual Currencies to €3.48 Billion)

 

  •  

IFRS Operating Profit of €698 Million (2013: €988 Million) Impacted by Provision of €289 Million for Seven-Year Old Versata Litigation

 

  •  

Non-IFRS Operating Profit Increased 7% at Constant Currencies (4% at Actual Currencies to €1.24 Billion), Resulting in a 60 Basis Point Increase in Non-IFRS Operating Margin at Constant Currencies1

WALLDORF, Germany – July 17, 2014 – SAP SE (NYSE: SAP) today announced its financial results for the second quarter and first half ended June 30, 2014.

BUSINESS HIGHLIGHTS IN THE SECOND QUARTER 2014

SAP again delivered strong growth in the cloud and a solid performance in its core business. With non-IFRS cloud subscriptions and support revenue increasing 39% at constant currencies (32% at actual currencies) SAP is the fastest growing enterprise cloud company at scale2. Non-IFRS software and software-related service revenue grew 8% at constant currencies (4% at actual currencies).

 

1  Starting in the second quarter 2014 SAP additionally adjusted its non-IFRS operating expenses definition by excluding the expenses resulting from the Versata litigation. Prior period amounts have been adjusted to comply with the new definition. Second quarter 2013 non-IFRS operating margin is now 29.0%.
2  Defined as enterprise application companies with an annual cloud revenue run rate above €1 billion.

SAP Reports Second Quarter and First Half 2014 Results    Page 2

 

At the Company’s user conference SAPPHIRE NOW in May SAP launched the “Run simple” strategy with cloud and SAP HANA at its core to simplify the business experience and consumption for its customers. HANA is radically simplifying the technology stack. Cloud is radically simplifying the consumption of SAP’s solutions. As a first example for “Run simple” the Company has included the SAP FIORI user experience within underlying licenses of SAP software.

“We are successfully executing our shift to the cloud helping customers run simple – from total workforce management in the cloud to frictionless commerce through the world’s largest business network,” said Bill McDermott, CEO of SAP. “And we are redefining customer engagement with our omni-channel e-commerce platform – all of this in real time demonstrating our clear commitment to be THE Cloud Company powered by SAP HANA.”

“With 8% constant currency growth in non-IFRS software and software-related service revenue we are delivering solid growth at the high end of our full year outlook range. We continue to improve our profitability with operating profit up 7% on a non-IFRS constant currency basis leading to double-digit growth in non-IFRS EPS,” said Luka Mucic, CFO of SAP. “As we continue to expand our cloud business we have increased our full year non-IFRS cloud subscriptions and support revenue outlook to €1,000 – €1,050 million at constant currencies.”

SAP’s annual cloud revenue run rate is now approaching €1.2 billion3 or $1.6 billion4. Non-IFRS calculated cloud billings5 increased 37% year-over-year at constant currencies. Non-IFRS deferred cloud subscriptions and support revenue was €448 million as of June 30, 2014, a year-over-year increase of 29% at constant currencies. SAP’s cloud applications total subscribers now exceed 38 million, which is the most of any enterprise cloud vendor in the industry today. The Company has also launched “Industry Cloud” to build the deepest and broadest industry cloud solutions.

SAP is redefining customer engagement. Its hybris omni-channel e-commerce platform in combination with Cloud for Sales saw triple-digit growth in software revenue and cloud subscriptions and support revenue.

SAP is enabling the global “Network Economy” with approximately 1.55 million connected companies on the world’s largest cloud-based business trading community. Trailing twelve month Ariba network spend volume6 was approximately $540 billion – two times the size of Amazon and eBay combined. The addition of Fieldglass expands our network capabilities by increasing our addressable market to cover flexible workforce in addition to materials and services.

The Company saw continued broad market adoption of SAP HANA as the Real-Time Business Platform across all industries and regions. SAP HANA is at the core of the Company’s “Run simple” strategy: integrating all SAP solutions on ONE business platform in the Cloud. SAP saw accelerated HANA momentum and now has more than 3,600 HANA customers and more than 1,200 customers for SAP Business Suite on HANA. SAP HANA is also evolving into the leading technology platform with more than 1,500 startup companies building applications on SAP HANA and new strategic partnerships with HP and VMware.

 

3  The annual revenue run rate is the total of second quarter 2014 non-IFRS cloud subscriptions and support revenue (€242 million) plus non-IFRS cloud-related professional services and other service revenue (€54 million) multiplied by 4.
4  Translated into USD for reader’s convenience based on $/€ exchange rate of $1.37/€1.00 at the end of the second quarter 2014.
5  Total of a period’s cloud subscriptions and support revenue and of the respective period’s change in the deferred cloud subscription and support revenue balance. The opening balance for Fieldglass deferred cloud subscriptions and support revenue at May 2, 2014 was €1 million (both on an IFRS and non-IFRS basis). In the second quarter 2014, Fieldglass contributed €11 million to SAP’s cloud subscriptions and support revenue (both on an IFRS and non-IFRS basis).
6  Network spend volume is the total value of purchase orders transacted on the Ariba Network in the trailing 12 months.

SAP Reports Second Quarter and First Half 2014 Results    Page 3

 

Second Quarter 2014 Regional Revenue

SAP saw a strong performance in EMEA, despite uncertainties due to the Ukraine crisis. Non-IFRS software and software-related service revenue increased 8% year-over-year at constant currencies. This was the result of 51% growth in non-IFRS cloud subscriptions and support revenue at constant currencies for the region as well as strong software revenue growth in the UK and France.

The Americas region had a solid performance. Non-IFRS software and software-related service revenue increased 6% year-over-year at constant currencies. The region continued the fast transition to the cloud with 34% growth in non-IFRS cloud subscriptions and support revenue at constant currencies. SAP also saw strong software revenue growth in Canada and continues to see strong demand in Latin America with tremendous growth opportunities.

In the APJ region SAP had a strong performance. Non-IFRS software and software-related service revenue grew by 12% at constant currencies. Non-IFRS cloud subscriptions and support revenue grew by 48% at constant currencies. Australia and Malaysia were highlights, with strong triple-digit software revenue growth at constant currencies.

FINANCIAL RESULTS IN DETAIL

FINANCIAL HIGHLIGHTS – Second Quarter 2014

 

     Second Quarter 20141)  
     IFRS      Non-IFRS2)  

€ million, unless otherwise stated

    Q2 2014      Q2 2013      %
change		      Q2 2014      Q2 2013      %
change		      % change
const. curr.		  

Cloud subscriptions and support

      241         159         52         242         183         32         39   

Software

      957         982         –2         957         982         –2         1   

Support

      2,279         2,177         5         2,280         2,182         4         9   

Software and support

      3,237         3,159         2         3,238         3,164         2         6   

Software and software-related service revenue

      3,478         3,318         5         3,480         3,347         4         8   

Total revenue

      4,151         4,062         2         4,153         4,091         2         5   

Total operating expenses

      –3,453         –3,074         12         –2,917         –2,905         0         5   

Operating profit

      698         988         –29         1,236         1,186         4         7   

Operating margin (%)

      16.8         24.3         –7.5pp         29.8         29.0         0.8pp         0.6pp   

Profit after tax

      556         724         –23         938         850         10      

Basic earnings per share (€)

      0.47         0.61         –23         0.79         0.71         10      

Number of employees (FTE)

      67,651         64,937         4         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 F10 in the appendix to this press release.

IFRS cloud subscriptions and support revenue was €241 million (2013: €159 million), an increase of 52%. Non-IFRS cloud subscriptions and support revenue was €242 million (2013: €183 million), an increase of 32% (39% at constant currencies). IFRS software and support revenue was €3.24 billion (2013: €3.16 billion), an increase of 2%. Non-IFRS software and support revenue was €3.24 billion (2013: €3.16 billion), an increase of 2% (6% at constant currencies). IFRS software and software-related service revenue was €3.48 billion (2013: €3.32 billion), an increase of 5%. Non-IFRS software and software-related service revenue was €3.48 billion (2013: €3.35 billion), an increase of 4% (8% at constant currencies). IFRS total revenue was €4.15 billion (2013: €4.06 billion), an increase of 2%. Non-IFRS total revenue was €4.15 billion (2013: €4.09 billion), an increase of 2% (5% at constant currencies).

SAP Reports Second Quarter and First Half 2014 Results    Page 4

 

IFRS operating profit was €698 million (2013: €988 million), a decrease of 29%. Non-IFRS operating profit was €1.24 billion (2013: €1.19 billion), an increase of 4% (7% at constant currencies). IFRS operating margin was 16.8% (2013: 24.3%), a decrease of 7.5 percentage points. The IFRS operating profit and margin were negatively impacted by the Versata litigation provision. Non-IFRS operating margin was 29.8% (2013: 29.0%), or 29.5% at constant currencies, an increase of 0.6 percentage points at constant currencies.

IFRS profit after tax was €556 million (2013: €724 million), a decrease of 23%. Non-IFRS profit after tax was €938 million (2013: €850 million), an increase of 10%. IFRS basic earnings per share was €0.47 (2013: €0.61), a decrease of 23%. Non-IFRS basic earnings per share was €0.79 (2013: €0.71), an increase of 10%. The IFRS and non-IFRS effective tax rates in the second quarter of 2014 were 22.6% (2013: 24.8%) and 25.4% (2013: 26.8%), respectively.

FINANCIAL HIGHLIGHTS – First Half 2014

 

     First Half 20141)  
     IFRS      Non-IFRS2)  

€ million, unless otherwise stated

    1H 2014      1H 2013      %
change		      1H 2014      1H 2013      %
change		      % change
const. curr.		  

Cloud subscriptions and support

      460         296         55         463         350         32         38   

Software

      1,581         1,638         –4         1,581         1,638         –4         1   

Support

      4,492         4,286         5         4,495         4,295         5         9   

Software and support

      6,072         5,924         3         6,075         5,934         2         6   

Software and software-related service revenue

      6,533         6,220         5         6,538         6,284         4         8   

Total revenue

      7,849         7,663         2         7,854         7,727         2         6   

Total operating expenses

      –6,428         –6,029         7         –5,699         –5,639         1         5   

Operating profit

      1,421         1,634         –13         2,155         2,088         3         7   

Operating margin (%)

      18.1         21.3         –3.2pp         27.4         27.0         0.4pp         0.3pp   

Profit after tax

      1,090         1,244         –12         1,604         1,539         4      

Basic earnings per share (€)

      0.91         1.04         –12         1.34         1.29         4      

Number of employees (FTE)

      67,651         64,937         4         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 F10 in the appendix to this press release.

IFRS cloud subscriptions and support revenue was €460 million (2013: €296 million), an increase of 55%. Non-IFRS cloud subscriptions and support revenue was €463 million (2013: €350 million), an increase of 32% (38% at constant currencies). IFRS software and support revenue was €6.07 billion (2013: €5.92 billion), an increase of 3%. Non-IFRS software and support revenue was €6.08 billion (2013: €5.93 billion), an increase of 2% (6% at constant currencies). IFRS software and software-related service revenue was €6.53 billion (2013: €6.22 billion), an increase of 5%. Non-IFRS software and software-related service revenue was €6.54 billion (2013: €6.28 billion), an increase of 4% (8% at constant currencies). IFRS total revenue was €7.85 billion (2013: €7.66 billion), an increase of 2%. Non-IFRS total revenue was €7.85 billion (2013: €7.73 billion), an increase of 2% (6% at constant currencies).

IFRS operating profit was €1.42 billion (2013: €1.63 billion), a decrease of 13%. Non-IFRS operating profit was €2.16 billion (2013: €2.09 billion), an increase of 3% (7% at constant currencies). IFRS operating margin was 18.1% (2013: 21.3%), a decrease of 3.2 percentage points. The IFRS operating profit and margin were negatively impacted by the Versata litigation provision. Non-IFRS operating margin was 27.4% (2013: 27.0%), or 27.4% at constant currencies, an increase of 0.3 percentage points at constant currencies.

SAP Reports Second Quarter and First Half 2014 Results    Page 5

 

IFRS profit after tax was €1.09 billion (2013: €1.24 billion), a decrease of 12%. Non-IFRS profit after tax was €1.60 billion (2013: €1.54 billion), an increase of 4%. IFRS basic earnings per share was €0.91 (2013: €1.04), a decrease of 12%. Non-IFRS basic earnings per share was €1.34 (2013: €1.29), an increase of 4%. The IFRS and non-IFRS effective tax rates in the first half of 2014 were 23.4% (2013: 21.5%) and 25.6% (2013: 24.5%), respectively.

Cash Flow – First Half 2014

Operating cash flow was €2.58 billion (2013: €2.48 billion), an increase of 4% year-over-year. Free cash flow was €2.27 billion (2013: €2.22 billion), an increase of 2% year-over-year. Free cash flow was 29% of total revenue (2013: 29%). At June 30, 2014, SAP had a total group liquidity of €3.18 billion (December 31, 2013: €2.84 billion), which includes cash and cash equivalents and short term investments. Net liquidity at June 30, 2014 was -€1.06 billion compared to -€1.47 billion at December 31, 2013.

BUSINESS OUTLOOK 2014

The Company updated its outlook for the full-year 2014:

 

  •  

The Company now expects full year 2014 non-IFRS cloud subscriptions and support revenue to be in a range of €1,000 – €1,050 million (previously €950 – €1,000 million) at constant currencies (2013: €757 million). The upper end of this range represents a growth rate of 39%.

 

  •  

The Company continues to expect full year 2014 non-IFRS software and software-related service revenue to increase by 6% – 8% at constant currencies (2013: €14.03 billion).

 

  •  

The Company continues to expect full-year 2014 non-IFRS operating profit to be in a range of €5.8 billion – €6.0 billion at constant currencies (2013: €5.48 billion).

While the Company’s full-year 2014 business outlook is at constant currency, actual currency reported figures are expected to continue to be negatively impacted by currency exchange rate fluctuations. If exchange rates remain at the June 2014 level for the rest of the year, the Company expects non-IFRS software and software-related service revenue and non-IFRS operating profit growth rates at actual currency to experience a negative currency impact of approximately 2 percentage points and 2 percentage points respectively for the third quarter of 2014 and of approximately 2 percentage points and 2 percentage points respectively for the full year 2014.

SAP Reports Second Quarter and First Half 2014 Results    Page 6

 

Additional Information

2014 revenue, profit and cash flow figures include the revenue and profits from hybris and Fieldglass. The comparative numbers for 2013 do not include Fieldglass and hybris was included first on August 1, 2013.

In the second quarter 2014 SAP recognized an expense resulting from a provision for the Versata litigation in the amount of €289 million. In contrast, the respective operating expense from the second quarter of 2013 decreased as SAP reversed the then-existing Versata provision of €33 million in response to the United States Patent and Trademark Office (USPTO) decision to cancel the disputed patent. The Versata litigation is a seven year old case that is still ongoing. Recent developments in the courts have made it probable that SAP will be required to pay Versata although the patent has been canceled by the USPTO. For more information about this litigation, see the Notes to the second quarter 2014 Interim Report (Interim Financial Statements section, Note (16)).

While the resulting provision for the Versata litigation impacts SAP’s IFRS operating profit and margin it does not have an effect on SAP’s non-IFRS operating profit and margin. Beginning with Q2 2014 SAP now additionally adjusts its non-IFRS operating expenses definition by excluding the expenses resulting from the Versata litigation. Prior period amounts have been adjusted to comply with the new definition.

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.

# #

Second Quarter 2014 Interim Report

SAP’s second quarter 2014 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 Thursday, July 17th 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 261,000 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.

© 2014 SAP SE. All rights reserved.

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

SAP Reports Second Quarter and First Half 2014 Results    Page 7

 

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Follow SAP Investor Relations on Twitter at @sapinvestor.

Appendix – Financial Information

 

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FINANCIAL INFORMATION

FOR THE SECOND QUARTER 2014

(Condensed and Unaudited)

 

     Page

Financial Statements (IFRS, Unaudited)

   

Consolidated Income Statements

    F1-F2

Consolidated Statements of Financial Position

    F3

Consolidated Statements of Cash Flows

    F4

Supplementary Financial Information (Unaudited)

   

Reconciliation from Non-IFRS Numbers to IFRS Numbers

    F5-F8

Calculated Cloud Billings

    F9

Explanation of Non-IFRS Adjustments

    F10

Revenue by Region

    F11-F12

Financial Statements (IFRS, Unaudited)

CONSOLIDATED INCOME STATEMENTS OF SAP GROUP – QUARTER

For the three months ended June 30

 

€ millions, unless otherwise stated

    2014      2013      Change
in %		  

Cloud subscriptions and support

      241         159         52   

Software

      957         982         –2   

Support

      2,279         2,177         5   

Software and support

      3,237         3,159         2   

Software and software-related service revenue

      3,478         3,318         5   

Professional services and other service revenue

      673         744         –10   

Total revenue

      4,151         4,062         2   

Cost of software and software-related services

      –698         –630         11   

Cost of professional services and other services

      –591         –609         –3   

Total cost of revenue

      –1,289         –1,240         4   

Gross profit

      2,862         2,822         1   

Research and development

      –566         –567         0   

Sales and marketing

      –1,049         –1,059         –1   

General and administration

      –218         –232         –6   

Restructuring

      –39         –17         >100   

TomorrowNow and Versata litigation

      –289         33         <-100   

Other operating income/expense, net

      –3         9         <-100   

Total operating expenses

      –3,453       – 3,074         12   

Operating profit

      698         988         –29   

Other non-operating income/expense, net

      4         –2         <-100   

Finance income

      47         26         79   

Finance costs

      –30         –49         –39   

Financial income, net

      17         –23         <-100   

Profit before tax

      719         963         –25   

Income tax TomorrowNow and Versata litigation

      76         –9         <-100   

Other income tax expense

      –239         –230         4   

Income tax expense

      –163         –239         –32   

Profit after tax

      556         724         –23   

Profit attributable to non-controlling interests

      –1         0         38   

Profit attributable to owners of parent

      557         725         –23   

Earnings per share, basic (in €)*

      0.47         0.61         –23   

Earnings per share, diluted (in €)*

      0.47         0.61         –23   

 

* For the three months ended June 30, 2014 and 2013, the weighted average number of shares was 1,194 million (diluted 1,197 million) and 1,193 million (diluted: 1,195million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.

 

 

F1

CONSOLIDATED INCOME STATEMENTS OF SAP GROUP – HALF-YEAR

For the six months ended June 30

 

€ millions, unless otherwise stated

    2014      2013      Change
in %		  

Cloud subscriptions and support

      460         296         55   

Software

      1,581         1,638         –4   

Support

      4,492         4,286         5   

Software and support

      6,072         5,924         3   

Software and software-related service revenue

      6,533         6,220         5   

Professional services and other service revenue

      1,316         1,443         –9   

Total revenue

      7,849         7,663         2   

Cost of software and software-related services

      –1,343         –1,234         9   

Cost of professional services and other services

      –1,182         –1,215         –3   

Total cost of revenue

      –2,525         –2,448         3   

Gross profit

      5,324         5,215         2   

Research and development

      –1,116         –1,124         –1   

Sales and marketing

      –2,016         –2,034         –1   

General and administration

      –423         –429         –1   

Restructuring

      –54         –31         78   

TomorrowNow and Versata litigation

      –290         32         <-100   

Other operating income/expense, net

      –4         5         <-100   

Total operating expenses

      –6,428         –6,029         7   

Operating profit

      1,421         1,634         –13   

Other non-operating income/expense, net

      –7         –13         –48   

Finance income

      69         56         24   

Finance costs

      –61         –93         –35   

Financial income, net

      9         –37         <-100   

Profit before tax

      1,423         1,584         –10   

Income tax TomorrowNow and Versata litigation

      77         –9         <-100   

Other income tax expense

      –409         –331         23   

Income tax expense

      –332         –340         –2   

Profit after tax

      1,090         1,244         –12   

Profit attributable to non-controlling interests

      –1         0         >100   

Profit attributable to owners of parent

      1,091         1,245         –12   

Earnings per share, basic (in €)*

      0.91         1.04         –12   

Earnings per share, diluted (in €)*

      0.91         1.04         –12   

 

* For the six months ended June 30, 2014 and 2013, the weighted average number of shares was 1,194 million (diluted 1,197million) and 1,193 million (diluted: 1,195million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.

 

 

F2

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION OF SAP GROUP

as at June 30, 2014 and December 31, 2013

 

€ millions

    2014      2013  

Cash and cash equivalents

      3,123         2,748   

Other financial assets

      230         251   

Trade and other receivables

      3,614         3,865   

Other non-financial assets

      470         346   

Tax assets

      172         142   

Total current assets

      7,610         7,352   

Goodwill

      14,380         13,684   

Intangible assets

      2,907         2,956   

Property, plant, and equipment

      1,847         1,820   

Other financial assets

      726         607   

Trade and other receivables

      80         98   

Other non-financial assets

      105         107   

Tax assets

      192         172   

Deferred tax assets

      379         292   

Total non-current assets

      20,616         19,736   

Total assets

      28,226         27,089   

as at June 30, 2014 and December 31, 2013

 

€ millions

    2014      2013  

Trade and other payables

      846         850   

Tax liabilities

      205         433   

Financial liabilities

      580         748   

Other non-financial liabilities

      1,616         2,263   

Provision TomorrowNow and Versata litigation

      514         223   

Other provisions

      320         422   

Provisions

      834         645   

Deferred income

      3,304         1,408   

Total current liabilities

      7,385         6,347   

Trade and other payables

      50         45   

Tax liabilities

      355         318   

Financial liabilities

      3,791         3,758   

Other non-financial liabilities

      115         112   

Provisions

      211         278   

Deferred tax liabilities

      102         109   

Deferred income

      63         74   

Total non-current liabilities

      4,687         4,694   

Total liabilities

      12,072         11,041   

Issued capital

      1,229         1,229   

Share premium

      578         551   

Retained earnings

      16,156         16,258   

Other components of equity

      –582         –718   

Treasury shares

      –1,234         –1,280   

Equity attributable to owners of parent

      16,147         16,040   

Non-controlling interests

      7         8   

Total equity

      16,154         16,048   

Total equity and liabilities

      28,226         27,089   

Due to rounding, numbers may not add up precisely.

 

 

F3

CONSOLIDATED STATEMENTS OF CASH FLOWS OF SAP GROUP

For the six months ended June 30

 

€ millions

    2014      2013  

Profit after tax

      1,090         1,244   

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

      

Depreciation and amortization

      478         478   

Income tax expense

      332         340   

Financial income, net

      –9         37   

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

      16         38   

Other adjustments for non-cash items

      52         44   

Decrease/increase in trade and other receivables

      297         470   

Decrease/increase in other assets

      –188         –129   

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

      –593         –945   

Decrease/increase in deferred income

      1,855         1,735   

Cash outflows due to TomorrowNow and Versata litigation

      0         –1   

Interest paid

      –73         –80   

Interest received

      27         33   

Income taxes paid, net of refunds

      –709         –782   

Net cash flows from operating activities

      2,575         2,482   

Business combinations, net of cash and cash equivalents acquired

      –729         –99   

Purchase of intangible assets and property, plant, and equipment

      –304         –265   

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

      27         23   

Purchase of equity or debt instruments of other entities

      –713         –1,200   

Proceeds from sales of equity or debt instruments of other entities

      721         1,079   

Net cash flows from investing activities

      –998         –462   

Dividends paid

      –1,194         –1,013   

Proceeds from reissuance of treasury shares

      27         9   

Proceeds from borrowings

      500         0   

Repayments of borrowings

      –586         0   

Net cash flows from financing activities

      –1,253         –1,004   

Effect of foreign exchange rates on cash and cash equivalents

      51         –107   

Net decrease/increase in cash and cash equivalents

      375         909   

Cash and cash equivalents at the beginning of the period

      2,748         2,477   

Cash and cash equivalents at the end of the period

      3,123         3,386   

Due to rounding, numbers may not add up precisely.

 

 

F4

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 June 30  

€ millions, unless otherwise stated

   2014     2013     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

                      

Cloud subscriptions and support

     241        1        242        12        254        159        24        183        52        32        39   

Software

     957        0        957        29        987        982        0        982        –2        –2        1   

Support

     2,279        1        2,280        90        2,370        2,177        5        2,182        5        4        9   

Software and support

     3,237        1        3,238        119        3,357        3,159        5        3,164        2        2        6   

Software and software-related service revenue

     3,478        2        3,480        131        3,611        3,318        29        3,347        5        4        8   

Professional services and other service revenue

     673        0        673        26        699        744        0        744        –10        –10        –6   

thereof cloud-related

     54        0        54        2        56        39        0        39        39        39        44   

Total revenue

     4,151        2        4,153        157        4,310        4,062        29        4,091        2        2        5   

Cloud subscriptions and support

     241        1        242        12        254        159        24        183        52        32        39   

Cloud-related professional services revenue

     54        0        54        2        56        39        0        39        39        39        44   

Cloud revenue

     295        1        296        14        310        198        24        222        49        34        40   

Operating Expense Numbers

                      

Cost of software and software-related services

     –698        86        –612            –630        76        –554        11        10     

thereof cloud

     –105        17        –87            –71        21        –50        47        75     

Cost of professional services and other services

     –591        33        –559            –609        23        –586        –3        –5     

Total cost of revenue

     –1,289        118        –1,171            –1,240        99        –1,140        4        3     

Gross profit

     2,862        120        2,982            2,822        129        2,951        1        1     

Research and development

     –566        35        –531            –567        17        –551        0        –3     

Sales and marketing

     –1,049        43        –1,006            –1,059        44        –1,015        –1        –1     

General and administration

     –218        12        –206            –232        24        –208        –6        –1     

Restructuring

     –39        39        0            –17        17        0        >100        0     

TomorrowNow and Versata litigation

     –289        289        0            33        –33        0        <-100        0     

Other operating income/expense, net

     –3        0        –3            9        0        9        <-100        <-100     

Total operating expenses

     –3,453        536        –2,917        –119        –3,036        –3,074        168        –2,905        12        0        5   

 

 

F5

    For the three months ended June 30  

€ millions, unless otherwise stated

   2014     2013     Change in %  
    IFRS     Adj.*     Non-
IFRS*		     Currency
Impact**		     Non-IFRS
Constant
Currency**		     IFRS     Adj.*     Non-
IFRS*		     IFRS     Non-
IFRS*		     Non-IFRS
Constant
Currency**		  

Profit Numbers

                      

Operating profit

     698        538        1,236        38        1,273        988        198        1,186        –29        4        7   

Other non-operating income/expense, net

     4        0        4            –2        0        –2        <-100        <-100     

Finance income

     47        0        47            26        0        26        79        79     

Finance costs

     –30        0        –30            –49        0        –49        –39        –39     

Financial income, net

     17        0        17            –23        0        –23        <-100        <-100     

Profit before tax

     719        538        1,257            963        198        1,161        –25        8     

Income tax TomorrowNow and Versata litigation

     76        –76        0            –9        9        0        <-100        >100     

Other income tax expense

     –239        –80        –319            –230        –81        –311        4        3     

Income tax expense

     –163        –156        –319            –239        –72        –311        –32        3     

Profit after tax

     556        382        938            724        125        850        –23        10     

Profit attributable to non-controlling interests

     –1        0        –1            0        0        0        38        38     

Profit attributable to owners of parent

     557        382        939            725        125        850        –23        10     

Key Ratios

                      

Operating margin (in %)

     16.8          29.8          29.5        24.3          29.0        –7.5pp        0.8pp        0.6pp   

Effective tax rate (in %)

     22.6          25.4            24.8          26.8        –2.2pp        –1.4pp     

Earnings per share, basic (in €)

     0.47          0.79            0.61          0.71        –23        10     

 

 

F6

    For the six months ended June 30  

€ millions, unless otherwise stated

   2014     2013     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

                      

Cloud subscriptions and support

     460        2        463        22        485        296        54        350        55        32        38   

Software

     1,581        0        1,581        67        1,647        1,638        0        1,638        –4        –4        1   

Support

     4,492        3        4,495        173        4,667        4,286        10        4,295        5        5        9   

Software and support

     6,072        3        6,075        239        6,315        5,924        10        5,934        3        2        6   

Software and software-related service revenue

     6,533        5        6,538        261        6,800        6,220        64        6,284        5        4        8   

Professional services and other service revenue

     1,316        0        1,316        56        1,372        1,443        0        1,443        –9        –9        –5   

thereof cloud-related

     98        0        98        4        102        82        0        82        19        19        24   

Total revenue

     7,849        5        7,854        318        8,172        7,663        64        7,727        2        2        6   

Cloud subscriptions and support

     460        2        463        22        485        296        54        350        55        32        38   

Cloud-related professional services revenue

     98        0        98        4        102        82        0        82        19        19        24   

Cloud revenue

     558        2        560        26        587        378        54        433        47        30        36   

Operating Expense Numbers

                      

Cost of software and software-related services

     –1,343        165        –1,178            –1,234        173        –1,060        9        11     

thereof cloud

     –188        36        –152            –154        58        –96        22        58     

Cost of professional services and other services

     –1,182        58        –1,124            –1,215        51        –1,164        –3        –3     

Total cost of revenue

     –2,525        223        –2,302            –2,448        224        –2,224        3        4     

Gross profit

     5,324        228        5,552            5,215        288        5,503        2        1     

Research and development

     –1,116        58        –1,057            –1,124        38        –1,086        –1        –3     

Sales and marketing

     –2,016        77        –1,939            –2,034        96        –1,939        –1        0     

General and administration

     –423        27        –396            –429        33        –396        –1        0     

Restructuring

     –54        54        0            –31        31        0        78        0     

TomorrowNow and Versata litigation

     –290        290        0            32        –32        0        <-100        0     

Other operating income/expense, net

     –4        0        –4            5        0        5        <-100        <-100     

Total operating expenses

     –6,428        729        –5,699        –237        –5,936        –6,029        390        –5,639        7        1        5   

 

 

F7

    For the six months ended June 30  

€ millions, unless otherwise stated

   2014     2013     Change in %  
    IFRS     Adj.*     Non-IFRS*     Currency
Impact**		     Non-IFRS
Constant
Currency**		     IFRS     Adj.*     Non-IFRS*     IFRS     Non-IFRS*     Non-IFRS
Constant
Currency**		  

Profit Numbers

                      

Operating profit

     1,421        735        2,155        81        2,236        1,634        454        2,088        –13        3        7   

Other non-operating income/expense, net

     –7        0        –7            –13        0        –13        –48        –48     

Finance income

     69        0        69            56        0        56        24        24     

Finance costs

     –61        0        –61            –93        0        –93        –35        –35     

Financial income, net

     9        0        9            –37        0        –37        <-100        <-100     

Profit before tax

     1,423        735        2,157            1,584        454        2,038        –10        6     

Income tax TomorrowNow and Versata litigation

     77        –77        0            –9        9        0        <-100        >100     

Other income tax expense

     –409      – 144        –553            –331      – 168        –499        23        11     

Income tax expense

     –332      – 221        –553            –340      – 159        –499        –2        11     

Profit after tax

     1,090        514        1,604            1,244        295        1,539        –12        4     

Profit attributable to non-controlling interests

     –1        0        –1            0        0        0        >100        >100     

Profit attributable to owners of parent

     1,091        514        1,605            1,245        295        1,540        –12        4     

Key Ratios

                      

Operating margin (in %)

     18.1          27.4          27.4        21.3          27.0        –3.2pp        0.4pp        0.3pp   

Effective tax rate (in %)

     23.4          25.6            21.5          24.5        1.9pp        1.2pp     

Earnings per share, basic (in €)

     0.91          1.34            1.04          1.29        –12        4     

 

* Adjustments in the revenue line items are for support revenue, cloud subscriptions and support revenue, and other similarly recurring revenues that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges, share-based compensation expenses, restructuring expenses, discontinued activities, and the Versata litigation.
** Constant currency revenue and operating income figures are calculated by translating revenue and operating income of the current period using the average exchange rates from the previous year’s respective period instead of the current period. Constant currency period-over-period changes are calculated by comparing the current year’s non-IFRS constant currency numbers with the non-IFRS number of the previous year’s respective period.

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

Due to rounding, numbers may not add up precisely.

 

 

F8

CALCULATED CLOUD BILLINGS

The following table presents the calculated cloud billings metric which we define as the total of a period’s cloud subscription and support revenue and of the respective period’s change in the deferred cloud subscription and support revenue balance. The table also reconciles the non-IFRS calculated cloud billings metric (including our non-IFRS at constant currency metric) to the respective IFRS based calculated cloud billings metric.

 

     For the three months ended June 30  

€ millions, unless otherwise stated

    2014     2013  
     IFRS     Adj.*      Non-
IFRS*		     Currency
Impact**		      Non-
IFRS
Constant
Currency**		     IFRS      Adj.*      Non-
IFRS*		      Currency
Impact**		      Non-IFRS
Constant
Currency**		  

Cloud subscriptions and support

      241        1         242        12         254        159         24         183         0         183   

Closing balance deferred cloud subscriptions and support

      445        3         448        30         478        354         7         361         9         370   

Opening balance deferred cloud subscriptions and support

      451        3         454        37         491        344         33         377         0         377   

Change in deferred cloud subscriptions and support

      –6        0         –6        –7         –13        10         –26         –16         9         –7   

Calculated cloud billings

      235        1         236        5         241        169         –2         167         9         176   

Year-over-year changes (2014 vs. 2013, in %)

      39 %         41 %         37 %               

 

* Adjustments in the revenue and deferred revenue line items are for cloud subscriptions and support revenue, and other similarly recurring revenues that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules.
** 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 deferred revenue balances are calculated by translating the current period’s opening and closing deferred revenue balances as well as the comparative period’s closing deferred revenue balance using the opening exchange rates of the comparative 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.

 

 

F9

EXPLANATION OF NON-IFRS ADJUSTMENTS

 

€ millions, unless otherwise stated

    4/1  –6/30/
2014		      1/1  –6/30/
2014		      4/1  –6/30/
2013		      1/1  –6/30/
2013		  

Software and software-related service revenue (IFRS)

      3,478         6,533         3,318         6,220   

Adjustment for deferred revenue write-down

      2         5         29         64   

Software and software-related service revenue (Non-IFRS)

      3,480         6,538         3,347         6,284   

Operating profit (IFRS)

      698         1,421         988         1,634   

Revenue Adjustments (per above)

      2         5         29         64   

Adjustment for discontinued activities

      0         1         0         0   

Adjustment for Versata litigation

      289         289         –33         –32   

Adjustment for acquisition-related charges

      131         261         145         283   

Adjustment for stock-based compensation expenses

      76         124         39         109   

Adjustment for restructuring

      39         54         17         31   

Operating expense adjustments

      536         729         168         390   

Operating profit adjustments

      538         735         198         454   

Operating profit (Non-IFRS)

      1,236         2,155         1,186         2,088   

Profit after tax (IFRS)

      556         1,090         724         1,244   

Revenue adjustments (per above)

      2         5         29         64   

Operating profit expense adjustments (per above)

      536         729         168         390   

Adjustments pre-tax

      538         735         198         454   

Taxes on adjustments

      –156         –221         –72         –159   

Profit after tax (Non-IFRS)

      938         1,604         850         1,539   

Due to rounding, numbers may not add up precisely.

 

 

F10

REVENUE BY REGION

The following tables present our IFRS and non-IFRS revenue by region based on customer location. The tables also present a reconciliation from our non-IFRS revenue (including our non-IFRS revenue at constant currency) to the respective most comparable IFRS revenue.

Note: Our non-IFRS revenues are not prepared under a comprehensive set of accounting rules or principles.

 

    For the three months ended June 30  

€ millions

   2014     2013     Change in %  
     IFRS     Adj.*     Non-IFRS*     Currency
Impact**		     Non-IFRS
Constant
Currency**		     IFRS     Adj.*     Non-IFRS*     IFRS     Non-IFRS*     Non-IFRS
Constant
Currency**		  

Cloud subscriptions and support revenue by region

                      

EMEA

     60        0        60        2        61        41        0        41        47        47        51   

Americas

     160        1        162        9        170        103        24        127        55        27        34   

APJ

     21        0        21        1        22        15        0        15        38        38        48   

Cloud subscriptions and support revenue

     241        1        242        12        254        159        24        183        52        32        39   

Software and software-related service revenue by region

                      

EMEA

     1,632        1        1,633        17        1,650        1,528        0        1,528        7        7        8   

Americas

     1,290        2        1,292        77        1,369        1,263        29        1,292        2        0        6   

APJ

     555        0        555        37        592        527        0        527        5        5        12   

Software and software-related service revenue

     3,478        2        3,480        131        3,611        3,318        29        3,347        5        4        8   

Total revenue by region

                      

Germany

     597        0        597        0        598        593        0        593        1        1        1   

Rest of EMEA

     1,369        1        1,370        21        1,391        1,277        0        1,277        7        7        9   

Total EMEA

     1,967        1        1,967        21        1,989        1,869        0        1,869        5        5        6   

United States

     1,162        2        1,163        54        1,217        1,138        29        1,167        2        0        4   

Rest of Americas

     384        0        384        40        424        431        0        431        –11        –11        –2   

Total Americas

     1,546        2        1,547        94        1,641        1,569        29        1,599        –2        –3        3   

Japan

     134        0        134        11        146        147        0        147        –8        –8        –1   

Rest of APJ

     504        0        504        31        535        477        0        477        6        6        12   

Total APJ

     638        0        638        42        681        623        0        623        2        2        9   

Total revenue

     4,151        2        4,153        157        4,310        4,062        29        4,091        2        2        5   

 

 

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    For the six months ended June 30  

€ millions

   2014     2013     Change in %  
    IFRS     Adj.*     Non-IFRS*     Currency
Impact**		     Non-IFRS
Constant
Currency**		     IFRS     Adj.*     Non-IFRS*     IFRS     Non-IFRS*     Non-IFRS
Constant
Currency**		  

Cloud subscriptions and support revenue by region

                      

EMEA

     114        0        114        3        117        81        0        81        41        41        45   

Americas

     307        2        309        16        325        186        54        241        65        29        35   

APJ

     40        0        40        3        42        29        0        29        36        36        46   

Cloud subscriptions and support revenue

     460        2        463        22        485        296        54        350        55        32        38   

Software and software-related service revenue by region

                      

EMEA

     3,071        2        3,072        41        3,113        2,878        0        2,878        7        7        8   

Americas

     2,471        3        2,474        140        2,614        2,355        64        2,419        5        2        8   

APJ

     992        0        992        81        1,073        987        0        987        1        1        9   

Software and software-related service revenue

     6,533        5        6,538        261        6,800        6,220        64        6,284        5        4        8   

Total revenue by region

                      

Germany

     1,132        0        1,132        1        1,133        1,121        0        1,121        1        1        1   

Rest of EMEA

     2,602        1        2,604        51        2,655        2,427        0        2,427        7        7        9   

Total EMEA

     3,734        2        3,736        51        3,787        3,547        0        3,547        5        5        7   

United States

     2,225        3        2,228        98        2,326        2,123        64        2,187        5        2        6   

Rest of Americas

     740        0        740        73        813        816        0        816        –9        –9        0   

Total Americas

     2,965        3        2,968        171        3,139        2,939        64        3,003        1        –1        5   

Japan

     264        0        264        30        294        299        0        299        –12        –12        –2   

Rest of APJ

     886        0        886        65        950        877        0        877        1        1        8   

Total APJ

     1,149        0        1,150        95        1,245        1,177        0        1,177        –2        –2        6   

Total revenue

     7,849        5        7,854        318        8,172        7,663        64        7,727        2        2        6   

 

* Adjustments in the revenue line items are for support revenue, cloud subscriptions and support revenue, and other similarly recurring revenues that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules.
** Constant currency revenue figures are calculated by translating revenue of the current period using the average exchange rates from the previous year’s respective period instead of the current period. Constant currency period-over-period changes are calculated by comparing the current year’s non-IFRS constant currency numbers with the non-IFRS number of the previous year’s respective period.

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

Due to rounding, numbers may not add up precisely.

 

 

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