WALLDORF, Germany,
Jan. 14, 2021 /PRNewswire/ --
Fourth Quarter
- IFRS Cloud Revenue Up 8%; Non-IFRS Cloud Revenue Up 13% At
Constant Currencies
- Current Cloud Backlog Up 14% At Constant Currencies
- IFRS Software Licenses Revenue Down 15%; Non-IFRS Software
Licenses Revenue Down 11% At Constant Currencies
- IFRS Cloud & Software Revenue Down 4%; Non-IFRS Cloud &
Software Revenue Up 1% At Constant Currencies
- IFRS Operating Profit Up 26%; Non-IFRS Operating Profit Up 3%
At Constant Currencies
- IFRS Operating Margin Up 9.1pp; Non-IFRS Operating Margin Up
1.5pp At Constant Currencies
Full Year
- Non-IFRS Operating Profit Reaches High End of Revised Outlook
Range
- Operating Cash Flow Expected At Around €7.0 Billion,
Approximately Doubling Year-over-Year; Free Cash Flow Expected At
Around €5.9 Billion; Significantly Exceeding Raised Outlook
- 2021 Outlook Reflects Expedited Move to Cloud
"The world's leading companies are turning to SAP to become
intelligent enterprises. We are reinventing how businesses run by
accelerating our customers' transformation in the cloud. Our strong
finish to the year and the upcoming launch of our new holistic
business transformation offering position us well to meet our new
outlook targets."
Christian Klein, CEO
"In a uniquely challenging environment, 2020 was a record year
for cash flow in every single quarter and the full year. Our
better-than-anticipated top line performance combined with our
quick response on the cost side drove strong operating profit.
SAP's expedited shift to the cloud will drive long-term,
sustainable growth while significantly increasing the resiliency
and predictability of our business."
Luka Mucic, CFO
Fourth Quarter Business Update
After an initial review of its fourth-quarter 2020 performance,
SAP SE (NYSE: SAP) today announced its preliminary financial
results for the fourth quarter and full year ended December 31, 2020. All 2020 figures in this
release are approximate due to the preliminary nature of the
announcement.
SAP's business performance sequentially improved in the fourth
quarter even as the COVID-19 crisis persisted and lockdowns were
reintroduced in many regions. Cloud revenue in the fourth quarter
continued to be impacted by lower pay-as-you-go transactional
revenue, mainly Concur business travel related. However, continued
high demand for e-commerce, Business Technology Platform, and
Qualtrics solutions along with several competitive wins –
particularly for SuccessFactors Human Experience Management –
produced a strong finish to the year for SAP's cloud business. SAP
also saw strong early take up of its new holistic business
transformation offering among pilot customers, contributing to the
cloud performance in the quarter. Both North America and Europe experienced a better-than-expected
performance in cloud order entry as well as software licenses
revenue reflecting strong demand for SAP's digital supply chain
solutions in particular. In addition SAP had significant
competitive wins in ERP.
Throughout the COVID-19 crisis, SAP continues to serve its
customers effectively with an embedded virtual sales and remote
implementation strategy. The company retains a disciplined
approach to hiring and discretionary spend while capturing natural
savings e.g. from lower travel, facility-related costs and virtual
events. In combination with the strong topline performance these
actions drove higher operating profit (IFRS and non-IFRS at
constant currencies) and operating margin despite the challenging
macro environment.
Fourth-Quarter and Full-Year Financial Performance
In the fourth quarter, current cloud backlog was up 7% to €7.15
billion (up 14% at constant currencies). Cloud revenue was up 8%
year over year to €2.04 billion (IFRS), up 7% to €2.04 billion
(non-IFRS) and up 13% (non-IFRS at constant currencies). Software
licenses revenue was down 15% year over year to €1.70 billion (IFRS
and non-IFRS) and down 11% (non-IFRS at constant currencies). Cloud
and software revenue was down 4% year over year to €6.58 billion
(IFRS and non-IFRS) and up 1% (non-IFRS at constant currencies).
Total revenue was down 6% year over year to €7.54 billion (IFRS and
non-IFRS) and down 2% (non-IFRS at constant currencies).
The share of more predictable revenue1 grew by
approximately 4 percentage points year over year to approximately
65% in the fourth quarter.
In the fourth quarter, IFRS operating profit and operating
margin were positively impacted by lower share-based compensation
expenses compared to the prior year period. Operating profit
increased by 26% year over year to €2.65 billion (IFRS) and was
down 3% to €2.77 billion (non-IFRS) and up 3% (non-IFRS at constant
currencies). Operating margin increased by 9.1 percentage points
year over year to 35.2% (IFRS) and increased 1.4 percentage points
year over year to 36.7% (non-IFRS) and 1.5 percentage points to
36.8% (non-IFRS at constant currencies).
For the full year, cloud revenue grew 17% year over year to
€8.08 billion (IFRS), up 15% to €8.09 billion (non-IFRS) and up 18%
(non-IFRS at constant currencies). Software licenses revenue was
down 20% year over year to €3.64 billion (IFRS and non-IFRS) and
down 17% (non-IFRS at constant currencies). Cloud and software
revenue was up 1% year over year to €23.23 billion (IFRS and
non-IFRS) and up 3% (non-IFRS at constant currencies). Total
revenue was down 1% year over year to €27.34 billion (IFRS and
non-IFRS) and up 1% (non-IFRS at constant currencies).
For the full year, the share of more predictable
revenue1 grew by approximately 5 percentage points year
over year to approximately 72%.
For the full year, IFRS operating profit and operating margin
were positively impacted by significantly lower restructuring
charges as well as lower share-based compensation expenses compared
to 2019. Operating profit increased by 48% year over year to €6.62
billion (IFRS) and was up 1% to €8.28 billion (non-IFRS) and up 4%
(non-IFRS at constant currencies). Operating margin increased 8.0
percentage points year over year to 24.2% (IFRS) and increased 0.6
percentage points year over year to 30.3% (non-IFRS) and 0.8
percentage points to 30.5% (non-IFRS at constant currencies) for
the full year.
Operating cash flow for the full year is expected to be at
around €7.0 billion, approximately doubling year-over-year and
significantly above the raised outlook of approximately €6.0
billion. Free cash flow for the full year is expected to be at
around €5.9 billion, significantly above the raised outlook of
above €4.5 billion. Cash flow was positively impacted by lower tax
and restructuring payments and a successful working capital
management.
1 Share of more predictable revenue is the total of
non-IFRS cloud revenue and non-IFRS software support revenue as a
percentage of total revenue.
Financial Results at
a Glance
|
|
Fourth Quarter
2020
|
|
IFRS
|
Non-IFRS1)
|
€ billion, unless
otherwise stated
|
Q4 2020
|
Q4 2019
|
∆ in %
|
Q4 2020
|
Q4 2019
|
∆ in %
|
∆ in %
constant
currency
|
Current Cloud
Backlog2)
|
NA
|
NA
|
NA
|
7.15
|
6.68
|
7
|
14
|
Cloud
revenue
|
2.04
|
1.90
|
8
|
2.04
|
1.91
|
7
|
13
|
Software licenses
revenue
|
1.70
|
2.00
|
–15
|
1.70
|
2.00
|
–15
|
–11
|
Software support
revenue
|
2.83
|
2.95
|
–4
|
2.83
|
2.95
|
–4
|
0
|
Software licenses and
support revenue
|
4.54
|
4.95
|
–8
|
4.54
|
4.95
|
–8
|
–4
|
Cloud and software
revenue
|
6.58
|
6.85
|
–4
|
6.58
|
6.86
|
–4
|
1
|
Total
revenue
|
7.54
|
8.04
|
–6
|
7.54
|
8.05
|
–6
|
–2
|
Share of more
predictable revenue (in %)
|
65
|
60
|
4pp
|
65
|
60
|
4pp
|
|
Operating profit
(loss)
|
2.65
|
2.10
|
26
|
2.77
|
2.84
|
–3
|
3
|
Profit (loss) after
tax
|
1.93
|
1.64
|
18
|
2.02
|
2.19
|
–8
|
|
Operating margin (in
%)
|
35.2
|
26.1
|
9.1pp
|
36.7
|
35.3
|
1.4pp
|
1.5pp
|
Number of employees
(FTE, December 31)
|
102,430
|
100,330
|
2
|
NA
|
NA
|
NA
|
NA
|
|
|
Full Year
2020
|
|
IFRS
|
Non-IFRS1)
|
€ billion, unless
otherwise stated
|
Q1–Q4
2020
|
Q1–Q4
2019
|
∆ in %
|
Q1–Q4
2020
|
Q1–Q4
2019
|
∆ in %
|
∆ in %
constant
currency
|
Current Cloud
Backlog2)
|
NA
|
NA
|
NA
|
7.15
|
6.68
|
7
|
14
|
Cloud
revenue
|
8.08
|
6.93
|
17
|
8.09
|
7.01
|
15
|
18
|
Software licenses
revenue
|
3.64
|
4.53
|
–20
|
3.64
|
4.53
|
–20
|
–17
|
Software support
revenue
|
11.51
|
11.55
|
0
|
11.51
|
11.55
|
0
|
1
|
Software licenses and
support revenue
|
15.15
|
16.08
|
–6
|
15.15
|
16.08
|
–6
|
–4
|
Cloud and software
revenue
|
23.23
|
23.01
|
1
|
23.23
|
23.09
|
1
|
3
|
Total
revenue
|
27.34
|
27.55
|
–1
|
27.34
|
27.63
|
–1
|
1
|
Share of more
predictable revenue (in %)
|
72
|
67
|
5pp
|
72
|
67
|
5pp
|
|
Operating profit
(loss)
|
6.62
|
4.47
|
48
|
8.28
|
8.21
|
1
|
4
|
Profit (loss) after
tax
|
5.28
|
3.37
|
57
|
6.53
|
6.15
|
6
|
|
Operating margin (in
%)
|
24.2
|
16.2
|
8.0pp
|
30.3
|
29.7
|
0.6pp
|
0.8pp
|
Number of employees
(FTE, December 31)
|
102,430
|
100,330
|
2
|
NA
|
NA
|
NA
|
NA
|
|
1) For a detailed description of
SAP's non-IFRS measures Explanation of Non-IFRS
Measures online.
|
2) As
this is an order entry metric, there is no IFRS
equivalent.
|
|
All figures are
preliminary and unaudited. Due to rounding, numbers may not add up
precisely.
|
Non-IFRS Adjustments
The total difference between non-IFRS revenue metrics and the
respective IFRS revenue metrics results from adjusting the impact
of business combination fair value accounting. In the fourth
quarter, the difference between non-IFRS operating profit and IFRS
operating profit includes, in addition to the revenue adjustments
of significantly less than €0.01 billion (Q4 2019: €0.01
billion),
- adjustments for acquisition-related charges of €0.17 billion
(Q4 2019: €0.17 billion),
- adjustments for share-based payment expenses of €0.02 billion
(Q4 2019: €0.52 billion) and
- adjustments for restructuring expenses of €0.01 billion (Q4
2019: €0.03 billion).
For the full-year 2020, the difference between non-IFRS
operating profit and IFRS operating profit includes, in addition to
the revenue adjustments of significantly less than €0.01 billion
(FY 2019: €0.08 billion),
- adjustments for acquisition-related charges of €0.64 billion
(FY 2019: €0.69 billion),
- adjustments for share-based payment expenses of €1.08 billion
(FY 2019: €1.84 billion) and
- adjustments for restructuring expenses of €0.01 billion (FY
2019: €1.13 billion).
For more details on the individual adjusted expense and revenue
categories, our reasons for providing non-IFRS measures and the
limitations of our non-IFRS measures please refer to Explanation of
Non-IFRS Measures.
Business Outlook
SAP provides the following full-year 2021 outlook reflecting its
solid business momentum and best estimates concerning the timing
and pace of recovery from the COVID-19 crisis. This outlook assumes
the COVID-19 crisis will begin to recede as vaccine programs roll
out globally, leading to a gradually improving demand environment
in the second half of 2021.
- SAP expects €9.1 – 9.5 billion non-IFRS cloud revenue at
constant currencies (2020: €8.09 billion), up 13% to 18% at
constant currencies
- SAP expects €23.3 – 23.8 billion non-IFRS cloud and software
revenue at constant currencies (2020: €23.23 billion), flat to up
2% at constant currencies
- SAP expects €7.8 – 8.2 billion non-IFRS operating profit at
constant currencies (2020: €8.28 billion), down 1% to 6% at
constant currencies
- The share of more predictable revenue (defined as the total of
cloud revenue and software support revenue) is expected to reach
approximately 75% (2020: 72%).
While SAP's full-year 2021 business outlook is at constant
currencies, actual currency reported figures are expected to be
impacted by currency exchange rate fluctuations as the Company
progresses through the year. See the table below for the Q1 and FY
2021 expected currency impacts.
Expected Currency
Impact Based on December 2020 Level for the Rest of the
Year
|
In percentage
points
|
Q1
|
FY
|
Cloud
revenue
|
-6pp to
-8pp
|
-3pp to
-5pp
|
Cloud and software
revenue
|
-5pp to
-7pp
|
-2pp to
-4pp
|
Operating
profit
|
-7pp to
-9pp
|
-2pp to
-4pp
|
SAP also confirms its mid-term ambition which was previously
published in its Q3 2020 Quarterly Statement.
Additional Information
The 2019 comparative numbers for full year only include
Qualtrics revenues and profits from acquisition date of
January 23rd.
This press release and all information therein is preliminary
and unaudited.
Fourth Quarter 2020 Quarterly Statement
SAP's fourth quarter 2020 quarterly statement will be published on
January 29, 2021 and will be
available for download at www.sap.com/investor.
Webcast
SAP senior management will host a virtual press conference on
Friday, January 29th 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 fourth quarter and full-year results can be found
at www.sap.com/investor.
Virtual Launch Event
SAP will hold a virtual event to launch its new holistic business
transformation offering "RISE with SAP" on Wednesday, January 27th at
4:00 PM (CET) / 10:00 AM (Eastern).
About SAP
SAP's strategy is to help every business run as an intelligent
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difference. With a global network of customers, partners,
employees, and thought leaders, SAP helps the world run better and
improve people's lives. For more information, visit
http://www.sap.com.
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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