WALLDORF, Germany, April 25, 2017 /PRNewswire/ -- SAP SE (NYSE:
SAP) today announced its financial results for the first quarter
2017 ended March 31, 2017.
"SAP's outstanding first quarter results are a decisive
follow-on to our record setting 2016. Led by S/4HANA, we are seeing
mass customer adoption of our solutions globally. Our inspired
workforce is firmly committed to staying focused on the success of
our customers and shareholders." - Bill
McDermott, CEO
"We continued our rapid expansion in cloud, accelerating to 49%
growth in new cloud bookings. This outstanding achievement further
validates our investment decisions to drive future growth. We're
off to a good start to reach our full year targets and we are
confident that we will grow our profitability in 2018 and beyond."
- Luka Mucic, CFO
Business Highlights
Financial Highlights
First Quarter 2017
SAP's rapid cloud expansion continued in the first quarter. New
cloud bookings1 surged 49% (44% at constant currencies)
in the first quarter and reached €215 million. IFRS cloud
subscriptions and support revenue grew 34% year-over-year to €905
million. Non-IFRS cloud subscriptions and support revenue grew 34%
year-over-year (30% at constant currencies) to €906 million. IFRS
software revenue grew 13% year-over-year to €691 million. New cloud
and software license order entry2 grew by more than 30%
year-over-year in the first quarter. IFRS cloud and software
revenue was €4.33 billion, an increase of 12% (9% non-IFRS at
constant currencies). Total cloud subscriptions & support
revenue and software support revenue was 69% of total revenue.
IFRS operating profit was down 17% to €673 million. Non-IFRS
operating profit grew 8% to €1.20 billion (2% at constant
currencies). IFRS earnings per share decreased 9% to €0.43.
Non-IFRS earnings per share increased 15% to €0.73. The IFRS
operating profit and EPS were primarily impacted by an increase in
share-based compensation expenses, which increased due to the
strong development of SAP's share price and an increase in employee
participation. Nearly 65% of SAP employees have participated in
SAP's most recent stock program OWN SAP.
Operating cash flow was €2.87 billion, an increase of 16%
year-over-year. Free cash flow increased 12% year-over-year to
€2.58 billion. As a result, the company continues to deleverage its
balance sheet ending the quarter with net debt of €460 million, an
improvement of €2.8 billion year over year.
SAP S/4HANA
With S/4HANA customers can massively simplify their IT landscape,
run live and reinvent their business model for the digital economy
across both cloud and on-premise deployments. S/4HANA adoption grew
to more than 5,800 customers. In the first quarter approximately
400 additional customers signed up of which almost 50% were net new
SAP customers. Innogy selected S/4HANA in the first quarter.
S/4HANA Cloud brings next generation intelligent ERP to the cloud
with speed and ease of deployment. Citrix and iColor chose the
S/4HANA Cloud edition in the first quarter.
SAP Cloud Platform
SAP Cloud Platform is a platform as a service (PaaS) designed to
help customers become digital enterprises. It offers a broad set of
services to build new fast-paced applications and extensions for
existing applications as well as to integrate across on-premise and
cloud landscapes. SAP Cloud Platform is instrumental in empowering
enterprises to create new Internet of Things (IoT), machine
learning and Big Data solutions by intelligently connecting
processes with people, things and businesses. C&J Energy
Services, a leading provider of oil and gas services selected SAP
Cloud Platform to help build digital field ticketing applications,
that allows rig supervisors to accurately capture job information
and synchronize to the back-end SAP S/4HANA Finance system.
Human Capital Management
With SuccessFactors and Fieldglass, SAP delivers total workforce
management across both permanent and contingent labor, localized
for more than 80 countries and more than 40 languages. Top industry
analysts recently gave SAP SuccessFactors the highest rankings in
Cloud HCM for Core HR and Talent Management for global
organizations with more than 5,000 workers as well as for
mid-market European-headquartered enterprises. SuccessFactors
Employee Central, which is the core of our HCM offering, had close
to 1,700 customers at the end of the first quarter. Companies like
Dolce & Gabbana selected SAP's workforce management solutions
in the first quarter.
Customer Engagement and Commerce
SAP's next generation customer engagement solutions enable
businesses to manage their front office across the entire spectrum
from marketing to sales to services – seamlessly and in real-time.
Businesses get a single view of their customer – be it social,
retail or e-commerce. SAP's CEC solutions serve both B2C and B2B
across a wide range of industries, including retail, telco,
financial services, manufacturing and the public sector. Top
industry analysts recently named SAP Hybris a leader for B2C and
B2B Digital Commerce and Multichannel Marketing Campaign
Management. SAP's CEC solutions once again achieved strong
double-digit cloud subscriptions and support revenue growth as well
as double-digit growth in software revenue.
Business Networks
Each of SAP's business network solutions provide a rich, open,
global platform that connect a large ecosystem of customers,
suppliers, partners and developers delivering ever expanding
content and innovation. On the Ariba Network, more than 2.7 million
companies in over 180 countries collaborate and trade more than
$900 billion in goods and services
annually. Concur helps more than 47 million end users effortlessly
process travel and expenses. With SAP Fieldglass customers manage
over 3.3 million contingent workers in approximately 140 countries.
Cloud subscriptions and support revenue in the SAP Business Network
segment was up 24% in the first quarter.
Regional Revenue Performance in the First Quarter 2017
In the EMEA region, cloud and software revenue increased 10%
(IFRS). Cloud subscriptions and support revenue grew 43% (IFRS)
with an especially strong quarter in Germany, France and Italy. SAP had triple-digit software revenue
growth in South Africa and
the Netherlands.
The Company had a strong performance in the Americas region with
cloud and software revenue growing by 12% (IFRS). Cloud
subscriptions and support revenue was up 27% (IFRS), driven by a
strong performance in Canada and
Mexico with high double-digit
growth. In North America, SAP had
double-digit growth in software revenue. In Latin America Brazil
was a highlight with strong software revenue growth amidst a
difficult macroeconomic environment.
In the APJ region SAP also had an exceptional performance in
both cloud subscription and software revenue. Cloud and software
revenue was up 21% (IFRS), with cloud subscriptions and support
revenue growing by 65% (IFRS). Japan and India were highlights in the quarter with
strong results in both cloud subscriptions and software revenue.
SAP also had strong double-digit software revenue growth in
Greater China3 and
South Korea.
Financial Results at a Glance
First Quarter
20171)
|
|
IFRS
|
Non-IFRS2)
|
€ million, unless
otherwise stated
|
Q1 2017
|
Q1 2016
|
∆ in %
|
Q1 2017
|
Q1 2016
|
∆ in %
|
∆ in %
const.
curr.
|
New Cloud
Bookings3)
|
N/A
|
N/A
|
N/A
|
215
|
145
|
49
|
44
|
Cloud subscriptions
and support
|
905
|
677
|
34
|
906
|
678
|
34
|
30
|
Software licenses and
support
|
3,422
|
3,172
|
8
|
3,422
|
3,173
|
8
|
5
|
Cloud and
software
|
4,328
|
3,850
|
12
|
4,328
|
3,851
|
12
|
9
|
Total
revenue
|
5,285
|
4,727
|
12
|
5,285
|
4,728
|
12
|
8
|
Share of predictable
revenue (in %)
|
69
|
69
|
0pp
|
69
|
69
|
0pp
|
|
Operating
profit
|
673
|
813
|
–17
|
1,198
|
1,104
|
8
|
2
|
Profit after
tax
|
530
|
570
|
–7
|
887
|
763
|
16
|
|
Basic earnings per
share (€)
|
0.43
|
0.48
|
–9
|
0.73
|
0.64
|
15
|
|
Number of employees
(FTE)
|
85,751
|
78,230
|
10
|
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 table "Non-IFRS Adjustments by Functional Areas" in
this Quarterly Statement.
|
3) As this
is an order entry metric, there is no IFRS equivalent.
|
|
Due to rounding,
numbers may not add up precisely.
|
Business Outlook 2017
The Company reiterates the following 2017 outlook:
- Based on the continued strong momentum in SAP's cloud business
the Company expects full year 2017 non-IFRS cloud subscriptions and
support revenue to be in a range of €3.8 billion to €4.0 billion at
constant currencies (2016: €2.99 billion). The upper end of this
range represents a growth rate of 34% at constant currencies.
- The Company expects full year 2017 non-IFRS cloud &
software revenue to increase by 6% to 8% at constant currencies
(2016: €18.43 billion).
- The Company expects full year 2017 non-IFRS total revenue in a
range of €23.2 billion to €23.6 billion at constant currencies
(2016: €22.07 billion).
- The Company expects full-year 2017 non-IFRS operating profit to
be in a range of €6.8 billion to €7.0 billion at constant
currencies (2016: €6.63 billion).
While the Company's full-year 2017 business outlook is at
constant currencies, actual currency reported figures are expected
to continue to be impacted by exchange rate fluctuations. If
exchange rates remain at the March
2017 average level for the rest of the year, the Company
expects its non-IFRS cloud and software revenue growth rate as well
as its non-IFRS operating profit growth rate to experience a
currency benefit in a range of 2 to 5 percentage points for the
second quarter 2017. For the full year 2017, we expect to have a
benefit in a range of 1 to 4 percentage points.
The full Q1 2017 Quarterly Statement can be downloaded from
http://www.sap.com/investors/sap-2017-q1-statement
Additional Information
Changes to the SAP Executive Board
The Supervisory Board of SAP SE has decided to expand the
responsibilities of the Executive Board members Robert Enslin and Bernd
Leukert as of May 1, 2017.
Robert Enslin will lead the new
Cloud Business Group. Furthermore, the Supervisory Board has named
Adaire Fox-Martin and Jennifer Morgan to the Executive Board. They
will be co-presidents of Global Customer Operations and oversee all
SAP regions.
Steve Singh, the Executive Board
member responsible for Business Networks and Applications, will
leave SAP SE on April 30, 2017.
The aforementioned changes to SAP's Executive Board will also
change SAP's segment reporting from the second quarter of 2017
onwards. SAP has already started the process of redefining its
management reporting under the changed Executive Board structure,
which the segment reporting will follow.
General Remarks about this Quarterly Statement and the SAP
Integrated Report
Since Q1 2016, we issue a quarterly statement for each of the four
fiscal quarters. Additionally, we issue a half year report and a
full year integrated report. SAP's 2016 Integrated Report, and 2016
Annual Report on Form 20-F were published on February 28, 2017, and are available for download
at www.sapintegratedreport.com.
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.
Webcast
SAP senior management will host a financial analyst conference call
at 2:00 PM (CET) / 1:00 PM (GMT) / 8:00
AM (Eastern) / 5:00 AM
(Pacific). The call 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 first quarter
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 more than 350,000 business and public sector 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)
|
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1 New cloud bookings is the total of all orders
received in a given period the revenue from which is expected to be
classified as cloud subscription and support revenue and that
result from purchases by new customers and from incremental
purchases by existing customers. Consequently, orders to renew
existing contracts are not included in this metric. The order
amount must be committed. Consequently, due to their pay-per-use
nature, business network transaction fees which do not include a
committed minimum consumption are not reflected in the bookings
metric (e.g. SAP Ariba and SAP Fieldglass transaction-based fees).
Amounts included in the measures are generally annualized
(annualized contract value ACV).
2 New cloud and software license order entry is the
total of new cloud order entry and software license order entry.
The new cloud order entry metric is identical to the new cloud
bookings metric defined above except that it considers the total
contract value (TCV) of the orders where the new cloud bookings
metric considers the orders' annualized contract value (ACV).
Software license order entry is the total of all orders received in
a given period the revenue from which is expected to be classified
as software license revenue. The support services commonly sold
with the software licenses are not included in the software license
order entry metric.
3 SAP's Greater China
region includes China,
Hong Kong and Taiwan.
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SOURCE SAP SE