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SAP Beats 2015 Targets - Raises 2017 Midterm Ambition

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SAP Announces Preliminary Fourth Quarter and Full Year 2015 Results

WALLDORF, Germany, Jan. 22, 2016 /PRNewswire/ -- 

  • Tremendous Momentum in New Cloud Bookings – Up 103% in the Full Year
  • Cloud Subscriptions and Support Backlog, A Lead Indicator for Continued Strong Cloud Growth, Increased 45%, Reaching €3.7 Billion at Year-End
  • Full Year Non-IFRS Cloud Subscription and Support Revenue Up 109% to €2.30 Billion (€2.00 Billion at Constant Currencies, Achieving Company Guidance)
  • Full Year Non-IFRS Cloud and Software Revenue Up 20% (12% at Constant Currencies, Beating Company Guidance)
  • SAP S/4HANA Adoption Surges – More Than Doubling the Number of Customers in the Fourth Quarter, Now Exceeding 2,700 Customers
  • Full Year Non-IFRS Operating Profit Up 13% to €6.35 Billion (€5.903 Billion at Constant Currencies, Beating Company Guidance)
  • Targeting Up to €4.0 Billion Non-IFRS Cloud Subscriptions and Support Revenue By 2017
SAP Logo.

SAP SE (NYSE: SAP) today announced its financial results for the fourth quarter and full year ended December 31, 2015.

SAP had exceptional momentum in the fourth quarter with fast growth in cloud and double-digit growth in its core license business. For the full year, non-IFRS cloud and software revenue grew by 20% or 12% at constant currencies and exceeded the outlook of 8% - 10% growth at constant currencies. New cloud bookings, the key measure for SAP's sales success in the cloud, increased 103% in the full year to €883 million and 75% in the fourth quarter to €344 million1. Non-IFRS cloud subscriptions and support revenue was €2.30 billion (€2.00 billion2 at constant currencies, achieving the full year outlook of €1.95 to €2.05 billion at constant currencies). Non-IFRS operating profit was €6.35 billion (€5.903 billion at constant currencies, beating the full year outlook of €5.6 - €5.9 billion at constant currencies).

"Our strength in 2015 shows that the S/4HANA innovation cycle is well underway," said Bill McDermott, CEO of SAP. "Our completeness of vision in the cloud has distinguished SAP from both legacy players and point solution providers. We beat on cloud and software, we beat on operating income and we are ever confident that SAP will remain a profitable growth business well into the future."

"Our tremendous 2015 results validate our strategy of innovating across the core, the cloud and business networks to help our customers become true digital enterprises," said Luka Mucic, CFO of SAP. "We have transformed our company and made it leaner by shifting investments from noncore activities to strategic growth areas enabling us to capture the tremendous growth opportunities in the market. This puts us on a strong path for the future reflected in an increase of our 2017 ambition."

BUSINESS HIGHLIGHTS IN THE FOURTH QUARTER 2015

SAP S/4HANA Adoption Soars, More Than Doubling in the Fourth Quarter

SAP S/4HANA is the next generation business suite and the "nucleus" around which businesses can operate all their processes in real time and seamlessly integrate their enterprise and their external ecosystem to enable successful business outcomes. Customer adoption of SAP S/4HANA continues to accelerate sharply, with more than 2,700 customers across all regions and industries at the end of 2015, more than doubling quarter over quarter. S/4HANA is also catalyzing broad customer adoption of our entire innovation portfolio. For example, Merck is turning to S/4HANA for fast data access, enhanced user experience, and productivity through simplified business processes.

Human Capital Management Shows Strong Momentum

Customers are increasingly turning to SAP to manage their global workforce, both permanent and flexible. The customer count for SuccessFactors Employee Central, which is the core of our Human Capital Management offerings, surpassed 1,000 for the first time in the fourth quarter. SAP is winning against its key HCM competitors, especially in markets outside of the United States. For example, Lufthansa selected SAP SuccessFactors. SAP's innovations in HCM will further increase SAP's differentiation and drive market share gains.

Customer Engagement and Commerce Drives Triple-Digit Bookings Growth

SAP saw excellent growth in its Customer Engagement and Commerce solutions. Customers build a new, more personalized relationship with their consumers, making it richer and more contextual across all channels. SAP is unique because it also enables businesses to connect the front and back office in real-time and fulfill ecommerce in one end-to-end value chain. New cloud bookings for Customer Engagement and Commerce saw triple-digit growth in full year 2015.

Strong Growth in Business Networks

SAP is leading the charge to a hyperconnected world. SAP Business Network Group comprises Ariba, Fieldglass and Concur – providing the common attributes of a rich open platform and a large ecosystem of customers, suppliers, partners and developers delivering ever expanding content and innovation. New cloud bookings for the business network increased 187% in the full year to €309 million.

Approximately 2 million connected companies trade over $740 billion of commerce3 on the Ariba network, more than 32 million end users process travel and expenses with Concur and customers managed over 1.9 million flexible workers in approximately 130 countries with the Fieldglass platform over the past 12 months.

Regional Performance – Double-Digit Growth Across All Regions in Cloud and Software Revenue

The EMEA region had an outstanding performance in the fourth quarter, with an 11% increase in non-IFRS cloud and software revenue including a strong double-digit software license performance in Germany and Russia. Non-IFRS cloud subscriptions and support revenue in EMEA grew by 53% with very strong double-digit growth in new cloud bookings.

The Americas region had strong double-digit growth, with non-IFRS cloud and software revenue rising 27% including a strong software revenue performance in the U.S.. Brazil rebounded with a strong double-digit software revenue performance amidst a macro environment that continued to be unstable. Non-IFRS cloud subscriptions and support revenue in the Americas region grew 89% with new cloud bookings growing in double-digits.

The APJ region was back to solid double-digit growth in the fourth quarter with non-IFRS cloud and software growth of 18% including strong double-digit software revenue growth in Australia and India. Non-IFRS cloud subscriptions and support revenue in APJ grew 55%. The Company saw exceptional momentum in new cloud bookings and grew in triple-digits.

FINANCIAL RESULTS IN DETAIL

FOURTH QUARTER 2015


Fourth Quarter 2015


IFRS

Non-IFRS

€ million, unless otherwise stated

Q4
2015

Q4
2014

%
change

Q4
2015

Q4
2014

%
change

%
change
const.
curr.









New cloud bookings

344

197

75

N/A

N/A

N/A

N/A

Cloud subscriptions and support

632

349

81

633

360

76

60

Software licenses and support

4,749

4,209

13

4,749

4,210

13

9

Cloud and software

5,381

4,558

18

5,382

4,570

18

13

Total revenue

6,346

5,458

16

6,347

5,469

16

11

Operating profit

1,699

1,753

–3

2,280

2,127

7

3

Profit after tax

1,283

1,309

–2

1,674

1,569

7


Basic earnings per share (€)

1.07

1.10

–2

1.40

1.31

7


Number of employees (FTE)

76,986

74,406

3

N/A

N/A

N/A

N/A

All figures are unaudited.

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 F7 in the appendix to this press release.

IFRS cloud subscriptions and support revenue was €632 million (2014: €349 million), an increase of 81%. Non-IFRS cloud subscriptions and support revenue was €633 million (2014: €360 million), an increase of 76% (60% at constant currencies). IFRS software licenses revenue was €2.15 billion (2014: €1.87 billion), an increase of 15%. Non-IFRS software licenses revenue was €2.15 billion (2014: €1.87 billion), an increase of 15% (11% at constant currencies). IFRS software licenses and support revenue was €4.75 billion (2014: €4.21 billion), an increase of 13%. Non-IFRS software licenses and support revenue was €4.75 billion (2014: €4.21 billion), an increase of 13% (9% at constant currencies). IFRS cloud and software revenue was €5.38 billion (2014: €4.56 billion), an increase of 18%. Non-IFRS cloud and software revenue was €5.38 billion (2014: €4.57 billion), an increase of 18% (13% at constant currencies). IFRS total revenue was €6.35 billion (2014: €5.46 billion), an increase of 16%. Non-IFRS total revenue was €6.35 billion (2014: €5.47 billion), an increase of 16% (11% at constant currencies).

IFRS operating profit was €1.70 billion (2014: €1.75 billion), a decrease of 3%. Non-IFRS operating profit was €2.28 billion (2014: €2.13 billion), an increase of 7% (3% at constant currencies). IFRS operating margin was 26.8% (2014: 32.1%), a decrease of 5.3 percentage points. Non-IFRS operating margin was 35.9% (2014: 38.9%), a decrease of 3.0 percentage points (2.6 percentage points at constant currencies).

IFRS profit after tax was €1.28 billion (2014: €1.31 billion), a decrease of 2%. Non-IFRS profit after tax was €1.67 billion (2014: €1.57 billion), an increase of 7%. IFRS basic earnings per share was €1.07 (2014: €1.10), a decrease of 2%. Non-IFRS basic earnings per share was €1.40 (2014: €1.31), an increase of 7%. The IFRS and non-IFRS effective tax rates in the fourth quarter of 2015 were 22.0% (2014: 24.5%) and 24.8% (2014: 25.5%), respectively.

FULL YEAR 2015


Full Year 2015


IFRS

Non-IFRS

€ million, unless otherwise stated

FY
2015

FY
2014

%
change

FY
2015

FY
2014

%
change

%
change
const.
curr.









New cloud bookings

883

436

103

N/A

N/A

N/A

N/A

Cloud subscriptions and support

2,286

1,087

110

2,296

1,101

109

82

Software licenses and support

14,931

13,228

13

14,933

13,233

13

6

Cloud and software

17,218

14,315

20

17,229

14,334

20

12

Total revenue

20,797

17,560

18

20,809

17,580

18

10

Operating profit

4,251

4,331

–2

6,346

5,638

13

5

Profit after tax

3,061

3,280

–7

4,505

4,182

8


Basic earnings per share (€)

2.56

2.75

–7

3.77

3.50

8


Number of employees (FTE)

76,986

74,406

3

N/A

N/A

N/A

N/A

All figures are unaudited.

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 F7 in the appendix to this press release.

IFRS cloud subscriptions and support revenue was €2.29 billion (2014: €1.09 billion), an increase of 110%. Non-IFRS cloud subscriptions and support revenue was €2.30 billion (2014: €1.10 billion), an increase of 109% (82% at constant currencies). IFRS software licenses revenue was €4.84 billion (2014: €4.40 billion), an increase of 10%. Non-IFRS software licenses revenue was €4.84 billion (2014: €4.40 billion), an increase of 10% (4% at constant currencies). IFRS software licenses and support revenue was €14.93 billion (2014: €13.23 billion), an increase of 13%. Non-IFRS software licenses and support revenue was €14.93 billion (2014: €13.23 billion), an increase of 13% (6% at constant currencies). IFRS cloud and software revenue was €17.22 billion (2014: €14.32 billion), an increase of 20%. Non-IFRS cloud and software revenue was €17.23 billion (2014: €14.33 billion), an increase of 20% (12% at constant currencies). IFRS total revenue was €20.80 billion (2014: €17.56 billion), an increase of 18%. Non-IFRS total revenue was €20.81 billion (2014: €17.58 billion), an increase of 18% (10% at constant currencies).  

IFRS operating profit was €4.25 billion (2014: €4.33 billion), a decrease of 2%. Non-IFRS operating profit was €6.35 billion (2014: €5.64 billion), an increase of 13% (5% at constant currencies). IFRS operating margin was 20.4% (2014: 24.7%), a decrease of 4.2 percentage points. Non-IFRS operating margin was 30.5% (2014: 32.1%), a decrease of 1.6 percentage points (1.5 percentage points at constant currencies).

IFRS profit after tax was €3.06 billion (2014: €3.28 billion), a decrease of 7%. Non-IFRS profit after tax was €4.50 billion (2014: €4.18 billion), an increase of 8%. IFRS basic earnings per share was €2.56 (2014: €2.75), a decrease of 7%. Non-IFRS basic earnings per share was €3.77 (2014: €3.50), an increase of 8%. The IFRS and non-IFRS effective tax rates for the twelve months of 2015 were 23.3% (2014: 24.7%) and 26.0% (2014: 26.1%), respectively.

Operating cash flow was €3.64 billion (2014: €3.50 billion), an increase of 4% year-over-year. Free cash flow increased year-over-year to €3.0 billion (2014: €2.76 billion). Free cash flow was 14% of total revenue (2014: 16%). At December 31, 2015, SAP had a total group liquidity of €3.56 billion (December 31, 2014: €3.42 billion), which includes cash and cash equivalents and current investments. Net liquidity 2 at December 31, 2015 was -€5.62 billion compared to -€7.67 billion at December 31, 2014.

BUSINESS OUTLOOK 2016

The Company is providing the following full year outlook:

  • Based on the continued strong momentum in SAP's cloud business the Company expects full year 2016 non-IFRS cloud subscriptions and support revenue to be in a range of €2.95 - €3.05 billion at constant currencies (2015: €2.30 billion). The upper end of this range represents a growth rate of 33% at constant currencies.
  • The Company expects full year 2016 non-IFRS cloud and software revenue to increase by 6% - 8% at constant currencies (2015: €17.23 billion).
  • The Company expects full-year 2016 non-IFRS operating profit to be in a range of €6.4 billion - €6.7 billion at constant currencies (2015: €6.35 billion).

While the Company's full-year 2016 business outlook is at constant currencies, actual currency reported figures are expected to be impacted by currency exchange rate fluctuations as we progress through the year.

MID-TERM OUTLOOK

Looking beyond 2016, SAP is raising its 2017 ambition to reflect both the current exchange rate environment and excellent business momentum.

Assuming a stable exchange rate environment going forward SAP now expects non-IFRS cloud subscriptions and support revenue in a range of €3.8 - €4.0 billion in 2017. The upper end of this range represents a 2015 to 2017 CAGR of 32%. Non-IFRS total revenue is now expected to be in a range of €23.0 - €23.5 billion in 2017. The Company now expects its 2017 non-IFRS operating profit to be in a range of €6.7 - €7.0 billion.

SAP continues to anticipate that the fast-growing cloud business along with growth in support revenue will drive a higher share of more predictable revenue. Given the current software license revenue momentum the Company now expects the total of cloud subscriptions & support revenue and software support revenue to be in a range of 63% - 65% of total revenue in 2017.

By 2017 SAP continues to expect its rapidly growing cloud subscriptions and support revenue to be close to software license revenue and is expected to exceed software license revenue in 2018. At that time, SAP expects to reach a scale in its cloud business that will clear the way for accelerated operating profit expansion.

The Company is not adjusting its long term, high level 2020 ambition at this time. The Company's 2020 ambition communicated in 2015 was:

  • €7.5 - €8.0 billion non-IFRS cloud subscriptions and support revenue
  • €26 - €28 billion non-IFRS total revenue
  • €8.0 - €9.0 billion non-IFRS operating profit
  • 70% - 75% share of more predictable revenue (defined as the total of cloud subscriptions & support revenue and software support revenue).

Additional Information
2015 revenue and profit figures include the full revenue and profit from Concur and Fieldglass. The comparative numbers for 2014 include Concur and Fieldglass starting December 4 and May 2, respectively.

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.

In the fourth quarter 2015, we updated the customer location data underlying our cloud subscription and support revenue by region disclosures in 2015 to make the 2015 numbers comparable to prior year numbers. Updated revenue by region numbers for the first, second and third quarter of 2015 reflecting the updated customer location data are available on our website under Revenue by Region. Prior year numbers are not affected by the update.

2015 Integrated Report and Annual Report
SAP's 2015 Integrated Report and Annual Report to Shareholders and 2015 Annual Report on Form 20-F are scheduled to be published on March 29, 2016, and will be available for download at www.sap.com/investor.

Webcast
SAP senior management will host a press conference in Walldorf today at 10:00 AM (CET) / 9:00 AM (GMT) / 4:00 AM (Eastern) / 1:00 AM (Pacific), followed by a financial analyst conference call at 2:00 PM (CET) / 1:00 PM (GMT) / 8:00 AM (Eastern) / 5:00 AM (Pacific). Both conferences will be webcast live on the Company's website at www.sap.com/investor and will be available for replay. Supplementary financial information pertaining to the full-year and quarterly results can be found at www.sap.com/investor.

About SAP
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable approximately 300,000 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.

For more information, financial community only:
Stefan Gruber             +49 (6227) 7-44872    investor@sap.com, CET

Follow SAP Investor Relations on Twitter at @sapinvestor.

For more information, press only:
Nicola Leske              +49 (6227) 7-50852    nicola.leske@sap.com, CET
Daniel Reinhardt         +49 (6227) 7-40201    daniel.reinhardt@sap.com, CET
Rajiv Sekhri                +49 (6227) 7-74871    rajiv.sekhri@sap.com, CET

For customers interested in learning more about SAP products:
Global Customer Center:        +49 180 534-34-24
United States Only:                1 (800) 872-1SAP (1-800-872-1727)

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.

© 2016 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.

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

These materials are provided by SAP SE and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials.  The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any.  Nothing herein should be construed as constituting an additional warranty.

SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries.  Please see http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark for additional trademark information and notices.

___________________________

1 New cloud bookings consist of all order entry of a given period that is expected to be classified as cloud subscription and support revenue and results from purchases by new customers and from incremental purchases by existing customers. The order amount must be contractually committed (i.e. variable amounts from pay-per-use and similar arrangements are not included). Consequently, due to their uncommitted pay-per-use nature Ariba and Fieldglass transaction-based fees are not reflected in the new cloud bookings metric. Amounts included in the measure are annualized. Concur contributed approximately €39 million to SAP's new cloud bookings in the fourth quarter 2015.
2 For the fourth quarter 2015, Concur contributed approximately €162 million to SAP's Non-IFRS cloud subscriptions and support revenue at constant currencies. The Concur acquisition was closed on December 4th, 2014.
3 Network spend volume is the total value of purchase orders transacted on the Ariba Network in the trailing 12 months. In previous quarters this also included Concur and Fieldglass for which as of the third quarter 2015 separate more relevant metrics are disclosed.

Appendix – Financial Information to Follow


FINANCIAL INFORMATION


FOR THE FOURTH QUARTER 2015


(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-F6

     Explanation of Non-IFRS Adjustments

F7

     Revenue by Region 

F8-F9

     Multi-Quarter Summary

F10-F11

 


Financial Statements (IFRS, Unaudited)


CONSOLIDATED INTERIM FINANCIAL STATEMENTS – IFRS


CONSOLIDATED INCOME STATEMENTS OF SAP GROUP – QUARTER


For the three months ended December 31

€ millions, unless otherwise stated


2015

2014

Change

in %

Cloud subscriptions and support


632

349

81

Software licenses


2,149

1,867

15

Software support


2,600

2,342

11

Software licenses and support


4,749

4,209

13

Cloud and software


5,381

4,558

18

Services


965

899

7

Total revenue


6,346

5,458

16






Cost of cloud subscriptions and support


–305

–161

89

Cost of software licenses and support


–660

–569

16

Cost of cloud and software


–964

–730

32

Cost of services


–891

–732

22

Total cost of revenue


–1,856

–1,463

27

Gross profit


4,490

3,995

12

Research and development


–796

–670

19

Sales and marketing


–1,654

–1,269

30

General and administration


–286

–279

2

Restructuring


–59

–29

>100

TomorrowNow and Versata litigation


0

–2

<-100

Other operating income/expense, net


3

8

–62

Total operating expenses


–4,647

–3,705

25

Operating profit


1,699

1,753

–3






Other non-operating income/expense, net


–29

4

<-100

Finance income


52

28

83

Finance costs


–76

–52

46

Financial income, net


–24

–24

2

Profit before tax


1,646

1,733

–5

Income tax TomorrowNow and Versata litigation


0

1

<-100

Other income tax expense


–363

–425

–15

Income tax expense


–363

–424

–15

Profit after tax


1,283

1,309

–2

attributable to owners of parent


1,286

1,309

–2

attributable to non-controlling interests


–3

0

<-100






Earnings per share, basic (in €)1)


1.07

1.10

–2

Earnings per share, diluted (in €)1)


1.07

1.09

–2


1) For the three months ended December 31, 2015 and 2014, the weighted average number of shares was 1,198 million (diluted 1,199 million) and 1,195 million (diluted: 1,198 million), respectively (treasury stock excluded).


Due to rounding, numbers may not add up precisely.

 


CONSOLIDATED INCOME STATEMENTS OF SAP GROUP – TWELVE MONTHS


For the twelve months ended December 31

€ millions, unless otherwise stated


2015

2014

Change

in %

Cloud subscriptions and support


2,286

1,087

110

Software licenses


4,838

4,399

10

Software support


10,094

8,829

14

Software licenses and support


14,931

13,228

13

Cloud and software


17,218

14,315

20

Services


3,580

3,245

10

Total revenue


20,797

17,560

18






Cost of cloud subscriptions and support


–1,013

–481

111

Cost of software licenses and support


–2,291

–2,076

10

Cost of cloud and software


–3,304

–2,557

29

Cost of services


–3,314

–2,716

22

Total cost of revenue


–6,619

–5,272

26

Gross profit


14,179

12,288

15

Research and development


–2,855

–2,331

22

Sales and marketing


–5,403

–4,304

26

General and administration


–1,052

–892

18

Restructuring


–621

–126

>100

TomorrowNow and Versata litigation


0

–309

<-100

Other operating income/expense, net


3

4

–30

Total operating expenses


–16,546

–13,230

25

Operating profit


4,251

4,331

–2






Other non-operating income/expense, net


–257

49

<-100

Finance income


241

127

89

Finance costs


–246

–152

62

Financial income, net


–5

–25

–80

Profit before tax


3,990

4,355

–8

Income tax TomorrowNow and Versata litigation


0

86

<-100

Other income tax expense


–929

–1,161

–20

Income tax expense


–929

–1,075

–14

Profit after tax


3,061

3,280

–7

attributable to owners of parent


3,069

3,280

–6

attributable to non-controlling interests


–8

0

>100






Earnings per share, basic (in €)1)


2.56

2.75

–7

Earnings per share, diluted (in €)1)


2.56

2.74

–7


1) For the twelve months ended December 31, 2015 and 2014, the weighted average number of shares was 1,197 million (diluted 1,198 million) and 1,195 million (diluted: 1,197 million), respectively (treasury stock excluded).


Due to rounding, numbers may not add up precisely.

 


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION OF SAP GROUP


as at December 31, 2015 and December 31, 2014

€ millions


2015

2014

Cash and cash equivalents


3,411

3,328

Other financial assets


359

678

Trade and other receivables


5,288

4,342

Other non-financial assets


465

435

Tax assets


230

215

Total current assets


9,751

8,999

Goodwill


22,689

21,000

Intangible assets


4,280

4,604

Property, plant, and equipment


2,195

2,102

Other financial assets


1,336

1,021

Trade and other receivables


87

100

Other non-financial assets


332

164

Tax assets


283

231

Deferred tax assets


438

343

Total non-current assets


31,640

29,566

Total assets


41,391

38,565



as at December 31, 2015 and December 31, 2014

€ millions


2015

2014

Trade and other payables


1,111

1,032

Tax liabilities


220

339

Financial liabilities


841

2,561

Other non-financial liabilities


3,434

2,811

Provisions


299

150

Deferred income


1,999

1,680

Total current liabilities


7,903

8,574

Trade and other payables


81

55

Tax liabilities


420

371

Financial liabilities


8,681

8,980

Other non-financial liabilities


283

219

Provisions


180

151

Deferred tax liabilities


436

603

Deferred income


108

78

Total non-current liabilities


10,188

10,457

Total liabilities


18,091

19,031

Issued capital


1,229

1,229

Share premium


558

614

Retained earnings


20,049

18,317

Other components of equity


2,561

564

Treasury shares


–1,124

–1,224

Equity attributable to owners of parent


23,272

19,499





Non-controlling interests


28

34

Total equity


23,300

19,534

Total equity and liabilities


41,391

38,565


Due to rounding, numbers may not add up precisely.                                 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS OF SAP GROUP


For the twelve months ended December 31

€ millions

2015

2014

Profit after tax

3,061

3,280

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



Depreciation and amortization

1,289

1,010

Income tax expense

929

1,075

Financial income, net

5

25

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

45

47

Other adjustments for non-cash items

–3

70

Decrease/increase in trade and other receivables

–857

–286

Decrease/increase in other assets

–317

–329

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

759

573

Decrease/increase in deferred income

218

16

Cash outflows due to TomorrowNow and Versata litigation

0

–555

Interest paid

–172

–130

Interest received

82

59

Income taxes paid, net of refunds

–1,399

–1,356

Net cash flows from operating activities

3,639

3,499

Business combinations, net of cash and cash equivalents acquired

–39

–6,360

Cash receipts from derivative financial instruments related to business combinations

266

–111

Total cash flows for business combinations, net of cash and cash equivalents acquired

226

–6,472

Purchase of intangible assets and property, plant, and equipment

–637

–737

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

68

46

Purchase of equity or debt instruments of other entities

–1,929

–910

Proceeds from sales of equity or debt instruments of other entities

1,939

833

Net cash flows from investing activities

–334

–7,240

Dividends paid

–1,316

–1,194

Proceeds from reissuance of treasury shares

64

51

Proceeds from borrowings

1,748

7,503

Repayments of borrowings

–3,852

–2,062

Net cash flows from financing activities

–3,356

4,298

Effect of foreign currency rates on cash and cash equivalents

134

23

Net decrease/increase in cash and cash equivalents

84

580

Cash and cash equivalents at the beginning of the period

3,328

2,748

Cash and cash equivalents at the end of the period

3,411

3,328


Due to rounding, numbers may not add up precisely.                                                                                              

 

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 December 31

€ millions, unless otherwise stated

2015

2014

Change in %


IFRS

Adj.1)

Non-IFRS1)

Currency

Impact2)

Non-IFRS

Constant

Currency2)

IFRS

Adj.1)

Non-IFRS1)

IFRS

Non-IFRS1)

Non-IFRS

Constant

Currency2)

Revenue Numbers












Cloud subscriptions and support

632

1

633

–57

575

349

10

360

81

76

60

Software licenses

2,149

0

2,149

–69

2,080

1,867

0

1,867

15

15

11

Software support

2,600

0

2,600

–106

2,494

2,342

1

2,343

11

11

6

Software licenses and support

4,749

0

4,749

–175

4,574

4,209

1

4,210

13

13

9

Cloud and software

5,381

1

5,382

–232

5,149

4,558

12

4,570

18

18

13

Services

965

0

965

–48

918

899

0

899

7

7

2

Total revenue

6,346

1

6,347

–280

6,067

5,458

12

5,469

16

16

11













Operating Expense Numbers












Cost of cloud subscriptions and support

–305

70

–235



–161

30

–131

89

80


Cost of software licenses and support

–660

76

–583



–569

72

–497

16

17


Cost of cloud and software

–964

146

–818



–730

103

–628

32

30


Cost of services

–891

62

–829



–732

49

–683

22

21


Total cost of revenue

–1,856

208

–1,647



–1,463

152

–1,311

27

26


Gross profit

4,490

209

4,700



3,995

163

4,158

12

13


Research and development

–796

69

–727



–670

55

–615

19

18


Sales and marketing

–1,654

188

–1,465



–1,269

69

–1,200

30

22


General and administration

–286

55

–231



–279

55

–224

2

3


Restructuring

–59

59

0



–29

29

0

>100

0


TomorrowNow and Versata litigation

0

0

0



–2

2

0

<-100

0


Other operating income/expense, net

3

0

3



8

0

8

–62

–62


Total operating expenses

–4,647

580

–4,067

200

–3,867

–3,705

362

–3,342

25

22

16













Profit Numbers












Operating profit

1,699

581

2,280

–80

2,200

1,753

374

2,127

–3

7

3

Other non-operating income/expense, net

–29

0

–29



4

0

4

<-100

<-100


Finance income

52

0

52



28

0

28

83

83


Finance costs

–76

0

–76



–52

0

–52

46

46


Financial income, net

–24

0

–24



–24

0

–24

2

2


Profit before tax

1,646

581

2,226



1,733

374

2,108

–5

6


Income tax TomorrowNow and Versata litigation

0

0

0



1

–1

0

<-100

0


Other income tax expense

–363

–190

–553



–425

–113

–539

–15

3


Income tax expense

–363

–190

–553



–424

–114

–538

–15

3


Profit after tax

1,283

391

1,674



1,309

260

1,569

–2

7


attributable to owners of parent

1,286

391

1,677



1,309

260

1,569

–2

7


attributable to non-controlling interests

–3

0

–3



0

0

0

<-100

<-100














Key Ratios












Operating margin (in %)

26.8


35.9


36.3

32.1


38.9

–5.3pp

–3.0pp

–2.6pp

Effective tax rate (in %)

22.0


24.8



24.5


25.5

–2.4pp

–0.7pp


Earnings per share, basic (in €)

1.07


1.40



1.10


1.31

–2

7


 


For the twelve months ended December 31

€ millions, unless otherwise stated

2015

2014

Change in %


IFRS

Adj.1)

Non-IFRS1)

Currency

Impact2)

Non-IFRS

Constant

Currency2)

IFRS

Adj.1)

Non-IFRS1)

IFRS

Non-IFRS1)

Non-IFRS

Constant

Currency2)

Revenue Numbers












Cloud subscriptions and support

2,286

10

2,296

–297

2,000

1,087

14

1,101

110

109

82

Software licenses

4,838

1

4,839

–255

4,584

4,399

0

4,399

10

10

4

Software support

10,094

0

10,094

–678

9,416

8,829

5

8,834

14

14

7

Software licenses and support

14,931

2

14,933

–933

14,000

13,228

5

13,233

13

13

6

Cloud and software

17,218

11

17,229

–1,230

15,999

14,315

19

14,334

20

20

12

Services

3,580

0

3,580

–276

3,304

3,245

0

3,245

10

10

2

Total revenue

20,797

11

20,809

–1,505

19,303

17,560

19

17,580

18

18

10













Operating Expense Numbers












Cost of cloud subscriptions and support

–1,013

232

–781



–481

88

–393

111

99


Cost of software licenses and support

–2,291

283

–2,008



–2,076

258

–1,818

10

10


Cost of cloud and software

–3,304

516

–2,788



–2,557

346

–2,211

29

26


Cost of services

–3,314

180

–3,134



–2,716

125

–2,590

22

21


Total cost of revenue

–6,619

696

–5,923



–5,272

471

–4,801

26

23


Gross profit

14,179

707

14,886



12,288

490

12,778

15

16


Research and development

–2,855

202

–2,653



–2,331

127

–2,204

22

20


Sales and marketing

–5,403

449

–4,954



–4,304

170

–4,134

26

20


General and administration

–1,052

116

–936



–892

86

–806

18

16


Restructuring

–621

621

0



–126

126

0

>100

0


TomorrowNow and Versata litigation

0

0

0



–309

309

0

<-100

0


Other operating income/expense, net

3

0

3



4

0

4

–30

–30


Total operating expenses

–16,546

2,083

–14,463

1,062

–13,401

–13,230

1,288

–11,942

25

21

12













Profit Numbers












Operating profit

4,251

2,095

6,346

–443

5,903

4,331

1,307

5,638

–2

13

5

Other non-operating income/expense, net

–257

0

–256



49

0

49

<-100

<-100


Finance income

241

0

241



127

0

127

89

89


Finance costs

–246

0

–246



–152

0

–152

62

62


Financial income, net

–5

0

–5



–25

0

–25

–80

–80


Profit before tax

3,990

2,095

6,085



4,355

1,307

5,662

–8

7


Income tax TomorrowNow and Versata litigation

0

0

0



86

–86

0

<-100

0


Other income tax expense

–929

–651

–1,580



–1,161

–318

–1,479

–20

7


Income tax expense

–929

–651

–1,580



–1,075

–405

–1,479

–14

7


Profit after tax

3,061

1,444

4,505



3,280

902

4,182

–7

8


attributable to owners of parent

3,069

1,444

4,513



3,280

902

4,182

–6

8


attributable to non-controlling interests

–8

0

–8



0

0

0

>100

>100














Key Ratios












Operating margin (in %)

20.4


30.5


30.6

24.7


32.1

–4.2pp

–1.6pp

–1.5pp

Effective tax rate (in %)

23.3


26.0



24.7


26.1

–1.4pp

–0.2pp


Earnings per share, basic (in €)

2.56


3.77



2.75


3.50

–7

8



1) Adjustments in the revenue line items are for software support revenue, cloud subscriptions and support revenue, and other similarly recurring revenues that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges, share-based payment expenses, restructuring expenses, as well as the TomorrowNow and Versata litigation expenses.

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


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


Due to rounding, numbers may not add up precisely.

 

EXPLANATION OF NON-IFRS ADJUSTMENTS


€ millions

Q4 2015

1/1–

12/31/2015

Q4 2014

1/1–

12/31/2014

Operating profit (IFRS)

1,699

4,251

1,753

4,331

Revenue adjustments

1

11

12

19

Adjustment for acquisition-related charges 

184

738

160

562

Adjustment for share-based payment expenses

336

724

171

290

Adjustment for restructuring

59

621

29

126

Adjustment for TomorrowNow and Versata litigation

0

0

2

309

Operating expense adjustments

580

2,083

362

1,288

Operating profit adjustments

581

2,095

374

1,307

Operating profit (non-IFRS)

2,280

6,346

2,127

5,638


Due to rounding, numbers may not add up precisely.                                                                                                

 


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.


In the fourth quarter 2015, we updated the customer location data underlying our cloud subscription and support revenue by region disclosures in 2015 to make the 2015 numbers comparable to prior year numbers. Updated revenue by region numbers for the first, second and third quarter of 2015 reflecting the updated customer location data are available on our website under Revenue by Region. Prior year numbers are not affected by the update.



For the three months ended December 31

€ millions

2015

2014

 Change in %


IFRS

Adj. 1)

Non-IFRS 1)

Currency

Impact 2)

Non-IFRS

Constant

Currency 2)

IFRS

Adj. 1)

Non-IFRS 1)

IFRS

Non-IFRS 1)

Non-IFRS

Constant

Currency 2)

Cloud subscriptions and support revenue by region












EMEA

142

0

142

–6

136

92

1

93

54

53

46

Americas

435

0

435

–49

386

222

9

231

96

89

67

APJ

55

0

55

–2

53

36

0

36

55

55

48

Cloud subscriptions and support revenue

632

1

633

–57

575

349

10

360

81

76

60













Cloud and software revenue by region












EMEA

2,479

1

2,480

–15

2,464

2,229

2

2,232

11

11

10

Americas

2,061

0

2,061

–174

1,887

1,619

9

1,629

27

27

16

APJ

841

0

841

–43

798

710

0

710

18

18

12

Cloud and software revenue

5,381

1

5,382

–232

5,149

4,558

12

4,570

18

18

13













Total revenue by region












Germany

897

0

897

0

897

799

0

799

12

12

12

Rest of EMEA

2,010

1

2,010

–22

1,988

1,869

2

1,871

8

7

6

Total EMEA

2,906

1

2,907

–22

2,884

2,668

2

2,671

9

9

8

United States

1,973

0

1,973

–245

1,728

1,479

9

1,488

33

33

16

Rest of Americas

494

0

494

35

529

460

0

460

7

7

15

Total Americas

2,467

0

2,467

–210

2,258

1,939

9

1,948

27

27

16

Japan

190

0

190

–15

175

164

0

164

16

16

7

Rest of APJ

783

0

783

–33

750

687

0

687

14

14

9

Total APJ

973

0

973

–48

925

850

0

851

14

14

9

Total revenue 

6,346

1

6,347

–280

6,067

5,458

12

5,469

16

16

11

 



For the twelve months ended December 31

€ millions

2015

2014

 Change in %


IFRS

Adj.1)

Non-IFRS 1)

Currency

Impact 2)

Non-IFRS

Constant

Currency 2)

IFRS

Adj. 1)

Non-IFRS 1)

IFRS

Non-IFRS 1)

Non-IFRS

Constant

Currency 2)

Cloud subscriptions and support revenue by region












EMEA

507

1

508

–38

470

277

1

278

83

83

69

Americas

1,579

8

1,587

–242

1,345

709

12

721

123

120

86

APJ

200

0

201

–17

184

101

0

101

98

99

82

Cloud subscriptions and support revenue

2,286

10

2,296

–297

2,000

1,087

14

1,101

110

109

82













Cloud and software revenue by region












EMEA

7,624

2

7,625

–115

7,510

6,819

5

6,824

12

12

10

Americas

6,931

9

6,940

–919

6,021

5,276

14

5,289

31

31

14

APJ

2,663

0

2,664

–195

2,468

2,221

0

2,221

20

20

11

Cloud and software revenue

17,218

11

17,229

–1,230

15,999

14,315

19

14,334

20

20

12













Total revenue by region












Germany

2,772

0

2,772

–3

2,769

2,570

1

2,571

8

8

8

Rest of EMEA

6,411

2

6,413

–149

6,264

5,813

4

5,817

10

10

8

Total EMEA

9,183

2

9,185

–152

9,033

8,383

5

8,389

10

9

8

United States

6,752

9

6,761

–1,088

5,673

4,898

13

4,911

38

38

16

Rest of Americas

1,678

0

1,678

–34

1,644

1,591

0

1,592

5

5

3

Total Americas

8,430

9

8,439

–1,121

7,317

6,489

14

6,503

30

30

13

Japan

667

0

668

–32

636

600

0

600

11

11

6

Rest of APJ

2,517

0

2,517

–200

2,317

2,088

0

2,088

21

21

11

Total APJ

3,185

0

3,185

–232

2,953

2,688

0

2,688

18

18

10

Total revenue 

20,797

11

20,809

–1,505

19,303

17,560

19

17,580

18

18

10


1) Adjustments in the revenue line items are for software support revenue, cloud subscriptions and support revenue, and other similarly recurring revenues that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules.

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


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.

 

MULTI-QUARTER SUMMARY (IFRS and non-IFRS)


€ millions, unless otherwise stated

Q1

2014

Q2

2014

Q3

2014

Q4

2014

TY

2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015

TY

2015

Revenue Numbers











Cloud subscriptions and support (IFRS)

219

241

277

349

1,087

503

552

599

632

2,286

Cloud subscriptions and support (non-IFRS)

221

242

278

360

1,101

509

555

600

633

2,296












Software licenses (IFRS)

623

957

951

1,867

4,399

696

979

1,014

2,149

4,838

Software licenses (non-IFRS)

623

957

952

1,867

4,399

696

979

1,015

2,149

4,839












Software support (IFRS)

2,097

2,158

2,232

2,342

8,829

2,454

2,531

2,509

2,600

10,094

Software support (non-IFRS)

2,098

2,160

2,233

2,343

8,834

2,454

2,531

2,509

2,600

10,094












Software licenses and support (IFRS)

2,720

3,116

3,184

4,209

13,228

3,150

3,510

3,523

4,749

14,931

Software licenses and support (non-IFRS)

2,722

3,117

3,185

4,210

13,233

3,150

3,510

3,524

4,749

14,933












Cloud and software (IFRS)

2,939

3,357

3,461

4,558

14,315

3,653

4,062

4,122

5,381

17,218

Cloud and software (non-IFRS)

2,942

3,359

3,463

4,570

14,334

3,659

4,065

4,124

5,382

17,229












Services (IFRS = non-IFRS)

759

794

793

899

3,245

844

908

863

965

3,580












Total revenue (IFRS)

3,698

4,151

4,254

5,458

17,560

4,497

4,970

4,985

6,346

20,797

Total revenue (non-IFRS)

3,701

4,153

4,256

5,469

17,580

4,502

4,972

4,987

6,347

20,809












Operating profit (IFRS)

723

698

1,157

1,753

4,331

638

701

1,214

1,699

4,251

Operating profit (non-IFRS)

919

1,236

1,355

2,127

5,638

1,056

1,394

1,616

2,280

6,346












Operating margin (IFRS, in %)

19.5

16.8

27.2

32.1

24.7

14.2

14.1

24.3

26.8

20.4

Operating margin (non-IFRS, in %)

24.8

29.8

31.8

38.9

32.1

23.5

28.0

32.4

35.9

30.5












Effective tax rate (IFRS, in %)

24.1

22.6

26.5

24.5

24.7

13.6

26.4

27.1

22.0

23.3

Effective tax rate (non-IFRS, in %)

25.9

25.4

27.7

25.5

26.1

22.3

27.8

28.0

24.8

26.0












Earnings per share, basic (IFRS, in €)

0.45

0.47

0.74

1.10

2.75

0.35

0.39

0.75

1.07

2.56

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

0.56

0.79

0.84

1.31

3.50

0.58

0.80

0.98

1.40

3.77












Net cash flows from operating activities

2,352

223

507

416

3,499

2,366

410

466

398

3,639

Purchase of intangible assets and property, plant, and equipment (without acquisitions)

–130

–174

–168

–265

–737

–139

–137

–148

–213

–637

Free cash flow

2,222

49

339

151

2,762

2,227

273

317

184

3,001












Deferred cloud subscriptions and support revenue (IFRS, quarter end)

451

445

498

689

689

794

789

782

951

951












Days' sales outstanding (DSO, in days)1)

63

64

65

65

65

67

68

69

71

71


































Headcount (quarter end)2)

66,750

67,651

68,835

74,406

74,406

74,551

74,497

75,643

76,986

76,986

Employee retention (in %, rolling 12 months)

93.4

93.5

93.3

93.5

93.5

93.3

92.6

91.9

91.8

91.8

Women in management (in %, quarter end)

20.9

21.1

21.3

22.4

22.4

22.3

22.9

23.2

23.6

23.6

Greenhouse gas emissions (in kilotons)

120

140

125

115

500

145

125

110

75

75


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

2) In full-time equivalents


Due to rounding, numbers may not add up precisely.

 

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SOURCE SAP SE

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