SAP Announces Best Ever Second Quarter Performance -- Exceeding euro 1 Billion in Software Revenue

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SAP AG

Jul 24, 2012, 01:06 ET

WALLDORF, Germany, July 24, 2012 /PRNewswire/ -- 

  • Second Quarter 2012 Software Revenue Increased 26% to €1,059 Million (19% at Constant Currencies) Driven By Double-Digit Growth in All Regions
  • Strong Growth Momentum From Key Innovations: SAP HANA Contributed €85 Million, Mobile €54 Million and Cloud €69 Million
  • Second Quarter 2012 Non-IFRS Software and Software-Related Service Revenue Increased 21% to €3.14 Billion (15% at Constant Currencies)
  • Second Quarter 2012 Non-IFRS Operating Profit Increased 15% to €1.17 Billion (8% at Constant Currencies)
  • Second Quarter 2012 Non-IFRS Earnings Per Share Increased 19% to €0.70
  • SAP Reiterates Full-Year Guidance

SAP AG (NYSE: SAP) today announced its financial results for the second quarter ended June 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20110126/AQ34470LOGO)

BUSINESS HIGHLIGHTS IN THE SECOND QUARTER

SAP achieved record software revenue in the second quarter, exceeding €1 billion. All regions posted double-digit software revenue gains.  Demand for SAP's new innovation categories continued to accelerate: Cloud momentum continued with a 112% increase year-on-year in 12 month new and upsell subscription billings for SuccessFactors on a stand-alone basis.  SAP's strong combination with SuccessFactors is allowing the company to accelerate its strategy to become the leading cloud provider. SAP recorded €85 million in SAP HANA revenue putting the company on track to meet full-year expectations of at least €320 million. Mobile revenue was €54 million and keeps SAP on track to meet full-year expectations of €220 million.  SAP also saw significant traction in strategic industries, with financial services and retail both growing more than 60 percent in software revenue, and solid growth across the manufacturing sectors, which grew more than 20 percent in software revenue.

"Our customer-focused innovation strategy is delivering exceptional business value for our customers and driving record results for SAP in an uncertain macro-economic environment," said SAP Co-CEOs Bill McDermott and Jim Hagemann Snabe. "SAP stands apart in its ability to bring its customers innovations in cloud, mobile and in-memory computing on top of a proven, consistent and stable core.  We will continue to provide game-changing solutions and remain on track to achieve our 2015 goals."

"We reached the upper end of our second quarter software revenue guidance range and were at the mid-point of the software and software-related service revenue guidance range," said Werner Brandt, CFO of SAP. "With this momentum in the first half of 2012 and our focused commitment to operational excellence we are on track to deliver on our targets for the full-year 2012 – in line with our 2015 goals."

FINANCIAL RESULTS IN DETAIL

FINANCIAL HIGHLIGHTS – Second Quarter 2012

Second Quarter 20121)

IFRS

Non-IFRS2)

€ million, unless otherwise stated

Q2 2012

Q2 2011

% change

Q2 2012

Q2 2011

% change

% change const. curr.








Software

1,059

838

26

1,059

838

26

19

Support

2,013

1,737

16

2,014

1,745

15

10

Cloud subscriptions and support

52

4

1,200

69

4

1,625

1,450

Software and software-related service revenue

3,124

2,579

21

3,142

2,587

21

15

Total revenue

3,898

3,300

18

3,916

3,308

18

12

Total operating expenses

−2,977

 −2,443

22

−2,743

−2,289

20

14

Operating profit

921

857

7

1,173

1,019

15

8

Operating margin (%)

23.6

26.0

  −2.4pp

30.0

30.8

−0.8pp

−1.2pp

Profit after tax

661

588

12

831

703

18

Basic earnings per share (€)

0.55

0.49

12

0.70

0.59

19

Number of employees (FTE)

60,972

54,043

13

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 F-8 in the appendix to this press release.

 

IFRS software revenue was €1,059 million (2011: €838 million), an increase of 26% (19% at constant currencies). IFRS software and software-related service revenue was €3.12 billion (2011: €2.58 billion), an increase of 21%. Non-IFRS software and software-related service revenue was €3.14 billion (2011: €2.59 billion), an increase of 21% (15% at constant currencies). IFRS total revenue was €3.90 billion (2011: €3.30 billion), an increase of 18%. Non-IFRS total revenue was €3.92 billion (2011: €3.31 billion), an increase of 18% (12% at constant currencies).

IFRS operating profit was €921 million (2011: €857 million), an increase of 7%. Non-IFRS operating profit was €1.17 billion (2011: €1.02 billion), an increase of 15% (8% at constant currencies). IFRS operating margin was 23.6% (2011: 26.0%), a decrease of 2.4 percentage points. Non-IFRS operating margin was 30.0% (2011: 30.8%), or 29.6% at constant currencies, a decrease of 0.8 percentage points (a decrease of 1.2 percentage points at constant currencies).

Non-IFRS operating profit and non-IFRS operating margin for the second quarter 2012 were impacted by severance expenses which amounted to €31 million (2011: €12 million) and the acquisition of SuccessFactors, which impacted the non-IFRS operating margin by approximately 100 basis points (at constant currencies). In addition, the company increased its headcount by 3,655 FTEs (thereof 1,866 from acquisitions) in the first quarter of 2012 and another 1,552 FTEs (thereof 176 from acquisitions) in the second quarter of 2012 to capture future growth opportunities.

IFRS profit after tax was €661 million (2011: €588 million), an increase of 12%. Non-IFRS profit after tax was €831 million (2011: €703 million), an increase of 18%. IFRS basic earnings per share was €0.55 (2011: €0.49), an increase of 12%. Non-IFRS basic earnings per share was €0.70 (2011: €0.59), an increase of 19%. The IFRS and non-IFRS effective tax rates in the second quarter of 2012 were 23.6% (2011: 26.9%) and 25.6% (2011: 27.2%), respectively.

FINANCIAL HIGHLIGHTS – First-Half 2012

First-Half 20121)

IFRS

Non-IFRS2)

€ million, unless otherwise stated

1H 2012

1H 2011

% change

1H 2012

1H 2011

% change

% change const. curr.








Software

1,696

1,453

17

1,696

1,453

17

11

Support

3,966

3,445

15

3,968

3,470

14

10

Cloud subscriptions and support

81

8

913

104

8

1,200

1,088

Software and software-related service revenue

5,743

4,906

17

5,768

4,931

17

12

Total revenue

7,248

6,324

15

7,273

6,349

15

10

Total operating expenses

−5,696

−4,870

17

−5,266

−4,551

16

12

Operating profit

1,551

1,454

7

2,007

1,798

12

6

Operating margin (%)

21.4

23.0

−1.6pp

27.6

28.3

−0.7pp

−1.1pp

Profit after tax

1,104

991

11

1,414

1,231

15

Basic earnings per share (€)

0.93

0.83

12

1.19

1.04

14

Number of employees (FTE)

60,972

54,043

13

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 F-8 in the appendix to this press release.

 

IFRS software revenue was €1.70 billion (2011: €1.45 billion), an increase of 17% (11% at constant currencies). IFRS software and software-related service revenue was €5.74 billion (2011: €4.91 billion), an increase of 17%. Non-IFRS software and software-related service revenue was €5.77 billion (2011: €4.93 billion), an increase of 17% (12% at constant currencies). IFRS total revenue was €7.25 billion (2011: €6.32 billion), an increase of 15%. Non-IFRS total revenue was €7.27 billion (2011: €6.35 billion), an increase of 15% (10% at constant currencies).

IFRS operating profit was €1.55 billion (2011: €1.45 billion), an increase of 7%. Non-IFRS operating profit was €2.01 billion (2011: €1.80 billion), an increase of 12% (6% at constant currencies). IFRS operating margin was 21.4% (2011: 23.0%), a decrease of 1.6 percentage points. Non-IFRS operating margin was 27.6 (2011: 28.3%), or 27.2% at constant currencies, a decrease of 0.7 percentage points (a decrease of 1.1 percentage points at constant currencies).

IFRS profit after tax was €1.10 billion (2011: €991 million), an increase of 11%. Non-IFRS profit after tax was €1.41 billion (2011: €1.23 billion), an increase of 15%. IFRS basic earnings per share was €0.93 (2011: €0.83), an increase of 12%. Non-IFRS basic earnings per share was €1.19 (2011: €1.04 billion), an increase of 14%.  The IFRS and non-IFRS effective tax rates in the first six months of 2012 were 25.0% (2011: 28.6) and 26.7 (2011: 28.9), respectively.

Operating cash flow was €2.40 billion (2011: €2.27 billion), an increase of 6%. Free cash flow was €2.13 billion (2011: €2.02 billion), an increase of 5%. Free cash flow was 29% of total revenue (2011: 32%). At  June 30, 2012, SAP had a total group liquidity of €3.60 billion (December 31, 2011: €5.60 billion), which includes cash and cash equivalents and short term investments. Net liquidity at June 30, 2012 was −€376 million compared to €1.64 billion at December 31, 2011. This decrease in net liquidity was primarily the result of the dividend payment and the acquisition of SuccessFactors in the first half of 2012.

BUSINESS OUTLOOK

SAP reiterates the following outlook for the full-year 2012:

  • The Company expects full-year 2012 non-IFRS software and software-related service revenue to increase in a range of 10% – 12% at constant currencies (2011: €11.35 billion). This includes a contribution of up to 2 percentage points from SuccessFactors' business.
  • The Company expects full-year 2012 non-IFRS operating profit to be in a range of €5.05 billion – €5.25 billion at constant currencies (2011: €4.71 billion). Full-year 2012 non-IFRS operating profit excluding SuccessFactors is expected to be in a similar range.
  • The Company projects a full-year 2012 IFRS effective tax rate of 26.5% – 27.5% (2011: 27.9%) and a non-IFRS effective tax rate of 27.0% – 28.0% (2011: 26.6%).

Additional Regional Disclosure

Starting with the reporting for the second quarter 2012, SAP will report both, software revenue by customer location and software revenue by location of negotiation. The focus of the communication will be on the reporting by location of negotiation. For additional information please refer to the pages F-9 and F-10 of the appendix to this press release as well as SAP's second quarter 2012 interim report.

Other Additional Information                

Second quarter 2012 revenue, profit and cash flow figures include the revenue, profits and cash flows from SuccessFactors. For the prior-year period those numbers were not included.

TomorrowNow litigation update: The retrial date was scheduled for June 18, 2012. Due to a scheduling conflict affecting Oracle's legal team the trial has been rescheduled to August 27, 2012.

SAP has updated its non-IFRS estimates for the full-year 2012. For the updated estimates please see SAP's second quarter 2012 interim report. 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 2012 Interim Report

SAP's second quarter 2012 Interim Report was published today and is available for download at www.sap.com/investor. The interim report includes an update on SAP's sustainability performance.

Webcast

SAP senior management will host a conference call on Tuesday, July 24th at 1:00 PM (CEST) / 12:00 PM (GMT) / 7:00 AM (EDT) / 4:00 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 195,000 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.

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Appendix – Financial Information to Follow

FINANCIAL INFORMATION
FOR THE SECOND QUARTER 2012
(Condensed and Unaudited)








Financial Statements (IFRS)    

Page

   Income Statements -Quarter 

F1

   Income Statements – Six Months

F2

   Statements of Financial Position 

F3-F4

   Statements of Cash Flows 

F5

Supplementary Financial Information

   Reconciliations from Non-IFRS Numbers to IFRS Numbers 

F6-F7

   Non-IFRS Adjustments

F8

   Revenue by Region 

F9-F10

 

Financial Statements (IFRS)

 

 

CONSOLIDATED INCOME STATEMENTS

 

For the three months ended June 30

 



€ millions, unless otherwise stated


2012

2011

Change

in %

Software

1,059

838

26

Support

2,013

1,737

16

Cloud subscriptions and support

52

4

1,200

Software and software-related service revenue

3,124

2,579

21

Consulting

617

579

7

Other services

157

142

11

Professional services and other service revenue

774

721

7

Total revenue

3,898

3,300

18





Cost of software and software-related services

−568

−495

15

Cost of professional services and other services

−644

−558

15

Total cost of revenue

−1,212

−1,053

15

Gross profit

2,686

2,247

20

Research and development

−568

−468

21

Sales and marketing

−972

−743

31

General and administration

−222

−170

31

Restructuring

−4

−1

>100

TomorrowNow litigation

−2

−10

−80

Other operating income/expense, net

3

2

50

Total operating expenses

−2,977

−2,443

22

Operating profit

921

857

7





Other non-operating income/expense, net


−45

−35

29

Finance income

28

20

40

Finance Cost TomorrowNow litigation

0

0

0

Other finance costs

−39

−38

3

Finance costs

−39

−38

3

Financial income, net

−11

−18

−39

Profit before tax

865

804

8





Income tax TomorrowNow litigation

1

0

N/A

Other income tax expense

−205

−216

−5

Income tax expense

−204

−216

−6

Profit after tax

661

588

12

Profit attributable to non-controlling interests

0

1

−100

Profit attributable to owners of parent

661

587

13





Basic earnings per share, in €*

0.55

0.49

12

Diluted earnings per share, in €*

0.55

0.49

12

 

* For the three months ended June 30, 2012 and 2011, the weighted average number of shares was 1,191 million (diluted 1,192 million) and 1,189 million (diluted: 1,189 million), respectively (treasury stock excluded).

 

 

F1

 

CONSOLIDATED INCOME STATEMENTS

 

For the six months ended June 30

 



€ millions, unless otherwise stated


2012

2011

Change

in %

Software

1,696

1,453

17

Support

3,966

3,445

15

Cloud subscriptions and support

81

8

913

Software and software-related service revenue

5,743

4,906

17

Consulting


1,214

1,148

6

Other services

291

270

8

Professional services and other service revenue

1,505

1,418

6

Total revenue

7,248

6,324

15





Cost of software and software-related services

−1,106

−990

12

Cost of professional services and other services

−1,268

−1,134

12

Total cost of revenue

−2,374

−2,124

12

Gross profit

4,874

4,200

16

Research and development

−1,091

−966

13

Sales and marketing

−1,802

−1,420

27

General and administration

−431

−347

24

Restructuring

−4

−1

>100

TomorrowNow litigation

5

−12

<-100

Other operating income/expense, net

1

0

N/A

Total operating expenses

−5,696

−4,870

17

Operating profit

1,551

1,454

7





Other non-operating income/expense, net


−53

−34

56

Finance income

52

49

6

Finance costs TomorrowNow litigation

−1

0

N/A

Other finance costs

−77

−81

−5

Finance costs

−78

−81

−4

Financial income, net

−26

−32

−19

Profit before tax

1,472

1,388

6





Income tax TomorrowNow litigation

−1

0

N/A

Other income tax expense

−367

−397

−8

Income tax expense

−368

−397

−7

Profit after tax

1,104

991

11

Profit attributable to non-controlling interests

0

1

−100

Profit attributable to owners of parent

1,104

990

12





Basic earnings per share, in €*

0.93

0.83

12

Diluted earnings per share, in €*

0.93

0.83

12

 

 

* For the six months ended June 30, 2012 and 2011, the weighted average number of shares was 1,191 million (diluted 1,191 million) and 1,188 million (diluted: 1,189 million), respectively (treasury stock excluded).

 

Due to rounding, numbers may not add up precisely.

 

 

F2

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

As at June 30, 2012, and December 31, 2011

 

€ millions

2012

2011

Cash and cash equivalents

3,376

4,965

Other financial assets

374

817

Trade and other receivables

3,185

3,493

Other non-financial assets

371

187

Tax assets

230

207

Total current assets

7,536

9,669




Goodwill


11,163

8,711

Intangible assets

2,689

2,024

Property, plant, and equipment

1,656

1,551

Other financial assets

651

538

Trade and other receivables

86

84

Other non-financial assets

50

39

Tax assets

157

146

Deferred tax assets

500

465

Total non-current assets

16,952

13,558

Total assets

24,488

23,227

F3

 

  

€ millions

2012

2011

Trade and other payables

899

937

Tax liabilities

303

409

Financial liabilities

1,450

1,331

Other non-financial liabilities

1,259

1,981

Provision TomorrowNow litigation

227

231

Other provisions

465

331

Provisions

692

562

Deferred income

2,862

1,046

Total current liabilities

7,465

6,266




Trade and other payables

39

43

Tax liabilities

424

408

Financial liabilities

2,754

2,925

Other non-financial liabilities

98

92

Provisions

311

268

Deferred tax liabilities

565

474

Deferred income

49

44

Total non-current liabilities

4,240

4,254

Total liabilities

11,705

10,520




Issued capital

1,228

1,228

Share premium

456

419

Retained earnings

12,260

12,466

Other components of equity

177

−37

Treasury shares

−1,347

−1,377

Equity attributable to owners of parent

12,774

12,699




Non-controlling interests

9

8

Total equity

12,783

12,707

Equity and liabilities

24,488

23,227













F4




 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

For the six months ended June 30

 

€ millions

2012

2011

Profit after tax

1,104

991

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

Depreciation and amortization

402

357

Income tax expense

368

396

Financial income, net

26

32

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

26

8

Other adjustments for non-cash items

24

10

Decrease/increase in trade receivables

362

241

Decrease/increase in other assets

−134

−74

Decrease/increase in trade payables, provisions and other liabilities

−752

−646

Decrease/increase in deferred income

1,629

1,353

Cash outflows due to TomorrowNow litigation

−4

−3

Interest paid

−96

−77

Interest received

47

37

Income taxes paid, net of refunds

−602

−356

Net cash flows from operating activities

2,400

2,269



Purchase of intangible assets and property, plant and equipment and business combinations *)

−3,006

−248

Cash payments for derivative instruments related to business combinations

−26

0

Total cash outflows for intangible assets and property, plant and equipment and business combinations

−3,032

−248

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

22

18

Purchase of equity or debt instruments of other entities

−558

−730

Proceeds from sales of equity or debt instruments of other entities

941

186

Net cash flows from investing activities

−2,627

−774



Purchase of non-controlling interests

0

−21

Dividends paid

−1,310

−713

Purchase of treasury shares

−53

−158

Proceeds from reissuance of treasury shares

69

157

Proceeds from issuing shares (share-based compensation)

14

34

Proceeds from borrowings

1,002

519

Repayments of borrowings

−1,023

−1,005

Net cash flows from financing activities

−1,301

−1,187



Effect of foreign exchange rates on cash and cash equivalents

−61

16

Net decrease/increase in cash and cash equivalents

−1,589

324

Cash and cash equivalents at the beginning of the period

4,965

3,518

Cash and cash equivalents at the end of the period

3,376

3,842

*) In 2012 thereof: €2,731 million business combinations, net of cash and cash equivalents acquired.




F5

 

SUPPLEMENTARY FINANCIAL INFORMATION

 

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

2012

2011

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

1,059

0

1,059

−63

996

838

0

838

26

26

19

Support

2,013

1

2,014

−93

1,921

1,737

8

1,745

16

15

10

Cloud subscriptions and support

52

17

69

-7

62

4

0

4

1,200

1,625

1,450

Software and software-related

service revenue

3,124

18

3,142

−163

2,979

2,579

8

2,587

21

21

15

Consulting

617

0

617

−32

585

579

0

579

7

7

1

Other services

157

0

157

−6

151

142

0

142

11

11

6

Professional services and other

service revenue

774

0

774

−38

736

721

0

721

7

7

2

Total revenue

3,898

18

3,916

−201

3,715

3,300

8

3,308

18

18

12












Operating Expense Numbers










Cost of software and software-

related services

−568

77

−491

−495

69

−426

15

15

Cost of professional services and

other services

−644

34

−610

−558

11

−547

15

12

Total cost of revenue

−1,212

111

−1,101

−1,053

80

−973

15

13

Gross profit

2,686

129

2,815

2,247

88

2,335

20

21

Research and development

−568

45

−523

−468

18

−450

21

16

Sales and marketing

−972

56

−916

−743

39

−704

31

30

General and administration

−222

16

−206

−170

6

−164

31

26

Restructuring

−4

4

0

−1

1

0

>100

0

TomorrowNow litigation

−2

2

0

−10

10

0

−80

0

Other operating income/expense,

net

3

0

3

2

0

2

50

50

Total operating expenses

−2,977

234

−2,743

126

−2,617

−2,443

154

−2,289

22

20

14












Profit Numbers










Operating profit

921

252

1,173

−75

1,098

857

162

1,019

7

15

8

Other non-operating income/expense, net

−45

0

−45

−35

0

−35

29

29

Finance income

28

0

28

20

0

20

40

40

Finance Cost TomorrowNow

litigation

0

0

0

0

0

0

0

0

Other finance costs

−39

0

−39

−38

0

−38

3

3

Finance costs

−39

0

−39

−38

0

−38

3

3

Financial income, net

−11

0

−11

−18

0

−18

−39

−39

Profit before tax

865

252

1,117

804

162

966

8

16

Income tax TomorrowNow litigation

1

−1

0

0

0

0

N/A

0

Other income tax expense

−205

−81

−286

−216

−47

−263

−5

9

Income tax expense

−204

−82

−286

−216

−47

−263

−6

9

Profit after tax

661

170

831

588

115

703

12

18

Profit attributable to non-controlling

interests

0

0

0

1

0

1

−100

−100

Profit attributable to owners of parent

661

170

831

587

115

702

13

18












Key Ratios












Operating margin in %

23.6

30.0

29.6

26.0

30.8

−2.4pp

−0.8pp

−1.2pp

Effective tax rate in %

23.6

25.6

26.9

27.2

−3.3pp

−1.6pp

Basic earnings per share, in €

0.55

0.70

0.49

0.59

12

19




































F6

for the six months ended June 30

€ millions, unless otherwise stated

2012

2011

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

1,696

0

1,696

−77

1,619

1,453

0

1,453

17

17

11

Support

3,966

2

3,968

−136

3,832

3,445

25

3,470

15

14

10

Cloud subscriptions and support

81

23

104

−9

95

8

0

8

913

1,200

1,088

Software and software-related

service revenue

5,743

25

5,768

−222

5,546

4,906

25

4,931

17

17

12

Consulting

1,214

0

1,214

−46

1,168

1,148

0

1,148

6

6

2

Other services

291

0

291

−9

282

270

0

270

8

8

4

Professional services and other

service revenue

1,505

0

1,505

−55

1,450

1,418

0

1,418

6

6

2

Total revenue

7,248

25

7,273

−277

6,996

6,324

25

6,349

15

15

10












Operating Expense Numbers










Cost of software and software-

related services

−1,106

149

−957

−990

146

−844

12

13

Cost of professional services and

other services

−1,268

64

−1,204

−1,134

24

−1,110

12

8

Total cost of revenue

−2,374

213

−2,161

−2,124

170

−1,954

12

11

Gross profit

4,874

238

5,112

4,200

195

4,395

16

16

Research and development

−1,091

68

−1,023

−966

41

−925

13

11

Sales and marketing

−1,802

110

−1,692

−1,420

77

−1,343

27

26

General and administration

−431

40

−391

−347

18

−329

24

19

Restructuring

−4

4

0

−1

1

0

>100

0

TomorrowNow litigation

5

−5

0

−12

12

0

<-100

0

Other operating income/expense,

 net

1

0

1

0

0

0

N/A

N/A

Total operating expenses

−5,696

430

−5,266

171

−5,095

−4,870

319

−4,551

17

16

12












Profit Numbers










Operating profit

1,551

456

2,007

−106

1,901

1,454

344

1,798

7

12

6

Other non-operating income/expense, net

−53

0

−53

−34

0

−34

56

56

Finance income

52

0

52

49

0

49

6

6

Finance costs TomorrowNow

litigation

−1

1

0

0

0

0

N/A

0

Other finance costs

−77

0

−77

−81

0

−81

−5

−5

Finance costs

−78

1

−77

−81

0

−81

−4

−5

Financial income, net

−26

1

−25

−32

0

−32

−19

−22

Profit before tax

1,472

457

1,929

1,388

344

1,732

6

11

Income tax TomorrowNow litigation

−1

1

0

0

0

0

N/A

0

Other income tax expense

−367

−148

−515

−397

−104

−501

−8

3

Income tax expense

−368

−147

−515

−397

−104

−501

−7

3

Profit after tax

1,104

310

1,414

991

240

1,231

11

15

Profit attributable to non-controlling

interests

0

0

0

1

0

1

−100

−100

Profit attributable to owners of parent

1,104

310

1,414

990

240

1,230

12

15












Key Ratios












Operating margin in %

21.4

27.6

27.2

23.0

28.3

−1.6pp

−0.7pp

−1.1pp

Effective tax rate in %

25.0

26.7

28.6

28.9

−3.6pp

−2.2pp

Basic earnings per share, in €

0.93

1.19

0.83

1.04

12

14

 

 

* 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

4/1/ -

6/30/2012

1/1/ -

6/30/2012

 

4/1/ -

6/30/2011

1/1/ -

6/30/2011

 





Software and software-related service revenue (IFRS)

3,124

5,743

2,579

4,906

Adjustment for deferred revenue write-down

18

25

8

25

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

3,142

5,768

2,587

4,931





Operating profit (IFRS)

921

1,551

857

1,454

Revenue Adjustments (per above)

18

25

8

25

Adjustment for discontinued activities

2

−5

10

12

Adjustment for acquisition-related charges 

130

250

111

222

Adjustment for stock-based compensation expenses

98

181

32

84

Adjustment for restructuring

4

4

1

1

Operating expense adjustments

234

430

154

319

Operating profit adjustments

252

456

162

344

Operating profit (Non-IFRS)

1,173

2,007

1,019

1,798





Profit after tax  (IFRS)

661

1,104

588

991

Revenue adjustments (per above)

18

25

8

25

Operating profit adjustments (per above)

234

430

154

319

Adjustments pre-tax

252

456

162

344

Taxes on adjustments

−82

−147

−47

−104

Profit after tax (Non-IFRS)

831

1,414

703

1,231

 

Due to rounding, numbers may not add up precisely.


F8

 

REVENUE BY REGION

 

The following tables present our IFRS and non-IFRS revenue by region. Software revenue by region is based on location of negotiation whereas software and software-related service revenue by region and total revenue by region are 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

2012

2011

 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

419

0

419

−5

414

344

0

344

22

22

20

Americas

435

0

435

−40

395

329

0

329

32

32

20

APJ

205

0

205

−18

187

164

0

164

25

25

14

Software revenue  

1,059

0

1,059

−63

996

838

0

838

26

26

19












Software and software-related service revenue by region










Germany

436

0

436

0

436

397

0

397

10

10

10

Rest of EMEA

1,026

0

1,026

−20

1,006

852

2

854

20

20

18

Total EMEA

1,462

0

1,462

−20

1,442

1,249

2

1,251

17

17

15

United States

843

18

861

−96

765

675

4

679

25

27

13

Rest of Americas

292

0

292

−3

289

230

1

231

27

26

25

Total Americas

1,135

18

1,153

−99

1,054

904

5

909

26

27

16

Japan

171

0

171

−21

150

137

0

137

25

25

9

Rest of APJ

356

0

356

−23

333

289

0

289

23

23

15

Total APJ

527

0

527

−44

483

426

1

427

24

23

13

Software and software-related service revenue

3,124

18

3,142

−163

2,979

2,579

8

2,587

21

21

15












Total revenue by region










Germany

575

0

575

0

575

554

0

554

4

4

4

Rest of EMEA

1,233

0

1,233

−23

1,210

1,060

2

1,062

16

16

14

Total EMEA

1,808

0

1,808

−23

1,785

1,614

2

1,616

12

12

10

United States

1,085

18

1,103

−122

981

884

4

888

23

24

10

Rest of Americas

382

0

382

−5

377

304

1

305

26

25

24

Total Americas

1,468

18

1,486

−127

1,359

1,187

5

1,192

24

25

14

Japan

195

0

195

−25

170

153

0

153

27

27

11

Rest of APJ

427

0

427

−26

401

345

0

345

24

24

16

Total APJ

622

0

622

−51

571

498

1

499

25

25

14

Total revenue 

3,898

18

3,916

−201

3,715

3,300

8

3,308

18

18

12

F9

for the six months ended June 30

€ millions

2012

2011

 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

694

0

694

−6

688

611

0

611

14

14

13

Americas

674

0

674

−49

625

574

0

574

17

17

9

APJ

328

0

328

−22

306

267

0

267

23

23

15

Software revenue  

1,696

0

1,696

−77

1,619

1,453

0

1,453

17

17

11












Software and software-related service revenue by region










Germany

807

0

807

0

807

728

0

728

11

11

11

Rest of EMEA

1,887

1

1,888

−26

1,862

1,647

7

1,654

15

14

13

Total EMEA

2,694

1

2,695

−26

2,669

2,375

7

2,382

13

13

12

United States

1,535

24

1,559

−125

1,434

1,295

14

1,309

19

19

10

Rest of Americas

546

0

546

−4

542

451

2

453

21

21

20

Total Americas

2,081

24

2,105

−129

1,976

1,746

16

1,762

19

19

12

Japan

315

0

315

−32

283

261

1

262

21

20

8

Rest of APJ

652

0

652

−34

618

525

1

526

24

24

17

Total APJ

967

0

967

−66

901

785

2

787

23

23

14

Software and software-related service revenue

5,743

25

5,768

−222

5,546

4,906

25

4,931

17

17

12












Total revenue by region










Germany

1,092

0

1,092

0

1,092

1,040

0

1,040

5

5

5

Rest of EMEA

2,291

1

2,292

−30

2,262

2,057

7

2,064

11

11

10

Total EMEA

3,383

1

3,384

−30

3,354

3,097

7

3,104

9

9

8

United States

1,998

24

2,022

−160

1,862

1,703

14

1,717

17

18

8

Rest of Americas

715

0

715

−7

708

596

2

598

20

20

18

Total Americas

2,714

24

2,738

−168

2,570

2,299

16

2,315

18

18

11

Japan

360

0

360

−37

323

292

1

293

23

23

10

Rest of APJ

791

0

791

−41

750

636

1

637

24

24

18

Total APJ

1,151

0

1,151

−78

1,073

929

2

931

24

24

15

Total revenue 

7,248

25

7,273

−277

6,996

6,324

25

6,349

15

15

10

 

SOFTWARE REVENUE BY CUSTOMER LOCATION

 

The table below shows the breakdown of software revenue by customer location.

 

€ millions

Q2 2012

1/1/-

6/30/2012

Q2 2011

1/1/-

6/30/2011

EMEA

453

731

344

611

Americas

395

631

329

574

APJ

210

333

164

267

SAP Group

1,059

1,696

838

1,453

* 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 and free cash flow figures see Non-IFRS Measures online (www.sap.com/corporate-en/investors/newsandreports/reporting-framework.epx).

 

Due to rounding, numbers may not add up precisely.


F10

SOURCE SAP AG

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