WALLDORF, Germany, April 22, 2021 /PRNewswire/ --
Cloud Revenue
in € millions
|
Total Revenue
in € millions
|
|
|
|
IFRS
|
Non-IFRS
|
IFRS
|
Non-IFRS
|
2,145
|
2,147
|
6,348
|
6,350
|
+7%
|
+7% (+13%
cc)
|
-3%
|
-3% (+2%
cc)
|
The share of more predictable revenue reached 78% in the first
quarter 2021 (+2 percentage points)
Cloud & Software
Revenue
in € millions
|
Operating Profit
in € millions
|
|
|
|
IFRS
|
Non-IFRS
|
IFRS
|
Non-IFRS
|
5,428
|
5,431
|
960
|
1,741
|
+1%
|
+1% (+6% cc)
|
-21%
|
+17% (+24% cc)
|
" We are seeing very strong order entry growth across our
applications portfolio. And we are just getting started. Our new
offering 'RISE with SAP' is rapidly becoming a massive accelerator
to our customers' business transformations with our platform at the
center. Together with our unique ecosystem of more than 22,000
partners and with a strong innovation pipeline for the year, we are
well on track with our strategy to deliver robust cloud
growth."
Christian Klein, CEO
The first quarter of 2021 was unique in many ways. We had the
highest order entry growth across cloud and software in five years
while posting the strongest increase in Non-IFRS operating profit
and margin in a decade. Free cash flow was up double-digit compared
to a record prior year. In the mid term SAP's expedited shift to
the cloud will accelerate topline growth and significantly increase
the resiliency and predictability of our business."
Luka Mucic, CFO
SAP SE (NYSE: SAP) today announced its financial results for the
first quarter ended March 31,
2021.
Business Update First Quarter 2021
SAP saw a sharp acceleration in new cloud business across its
cloud portfolio including Qualtrics, Human Experience Management,
Procurement, Customer Experience, Business Technology Platform, as
well as a strong start for 'RISE with SAP' which is driving
customers' business transformations in the cloud. Software licenses
were up 7% (IFRS) and had strong, double-digit growth of 11%
(Non-IFRS at constant currencies). SAP had significant competitive
wins in ERP, digital supply chain and across its broader cloud
solution portfolio.
Despite the continued impact of global travel restrictions on
Concur's business, SAP's cloud revenue growth was resilient in the
first quarter, up 7% (IFRS) and up 13% (Non-IFRS at constant
currencies). SaaS/PaaS cloud revenue outside the Intelligent Spend
business was up 17% (IFRS) and up 24% (Non-IFRS at constant
currencies). Looking forward, SAP's strong new cloud business
performance is expected to reaccelerate cloud revenue growth.
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.
The prior year included a cost of approximately €36 million in
relation to the cancellation of its in-person annual SAPPHIRE NOW
and other customer events, as well as normal travel behavior.
Highlights
- Key customer wins included: Unilever, BioNTech, IKEA, Nippon
Express, BMW, Yamaha Motor Company, Toshiba Corporation,
AstraZeneca, Zalando, Deichmann, B. Braun, and Clemson University. AkzoNobel, CONA Services,
Daikin Chemicals, Olam International, Google, Bosch Siemens
Hausgeräte, Douglas, LIVEKINDLY Collective, Peloton, and Chobani
went live on SAP solutions.
- SAP launched "RISE with SAP" on January
27, a simplified pathway for customers to transform their
business in the cloud. In the first quarter alone, SAP closed more
than 100 transactions. Customers such as Carrefour Brazil, Sono
Motors, KIA Chile, Hillrom, and Grupo Feromax chose "RISE with SAP"
in the first quarter.
- In total, more than 400 S/4HANA customers were added in the
quarter, taking total adoption to more than 16,400 customers, up
more than 16% year over year, of which more than 9,600 are live. In
the first quarter, more than 50% of the additional S/4HANA
customers were net new.
- The acquisition of Signavio was completed on March 5, significantly deepening SAP's business
process intelligence capabilities.
- SAP closed the acquisition on AppGyver, a no-code development
pioneer. AppGyver's solutions will become part of the SAP Business
Technology Platform.
- SAP announced a strategic partnership with Dediq to jointly
expand SAP's financial services portfolio with a significant
investment in developing new solutions to better serve the rapidly
changing banking and insurance industry. The new solutions will be
built as part of SAP's industry cloud solutions. SAP and Dediq
intend to form a dedicated Financial Services Industry (FSI) Unit,
which will be jointly owned by the two companies. Pending
regulatory approval, the new FSI Unit is expected to be established
in September 2021.
- SAP proposed a dividend of €1.85 per share for fiscal year 2020
representing a year-over-year increase of €0.27 or 17%. The
dividend is subject to shareholder approval at the upcoming AGM to
be held on May 12, 2021.
Financial Performance First Quarter 20211
Current cloud backlog was up 15% to €7.63 billion and up 19% (at
constant currencies). Cloud revenue was up 7% year over year to
€2.14 billion (IFRS), up 7% to €2.15 billion (non-IFRS) and up 13%
(non-IFRS at constant currencies). Software licenses revenue was up
7% year over year to €0.48 billion (IFRS and non-IFRS) and up 11%
(non-IFRS at constant currencies). Cloud and software revenue was
up 1% to €5.43 billion (IFRS and non-IFRS) and up 6% (non-IFRS at
constant currencies). Services revenue was down 18% year over year
to €0.9 billion (IFRS and non-IFRS) and down 14% (non-IFRS at
constant currencies). This revenue decline reflects the
November 2020 divestiture of SAP
Digital Interconnect, which contributed approximately €90 million
of services revenue (IFRS and non-IFRS) in the first quarter of
2020. Total revenue was down 3% year over year to €6.35 billion
(IFRS and non-IFRS) and up 2% (non-IFRS at constant
currencies).
The share of more predictable revenue2 grew by
approximately 2 percentage points year over year to approximately
78% in the first quarter.
IFRS operating profit decreased 21% to €0.96 billion and IFRS
operating margin decreased by 3.4 percentage points to 15.1% due to
higher share-based compensation expenses (primarily related to
Qualtrics IPO awards) and restructuring expenses related to the
accelerated harmonization of SAP's cloud delivery infrastructure.
Non-IFRS operating profit increased 17% to €1.74 billion, up 24%
(non-IFRS at constant currencies) and operating margin increased by
4.7 percentage points to 27.4%, up 4.9 percentage points (non-IFRS
at constant currencies).
Earnings per share increased 29% to €0.88 (IFRS) and increased
63% to €1.40 (non-IFRS) reflecting another strong contribution from
Sapphire Ventures.
Operating cash flow for the first quarter was €3.09 billion.
Free cash flow increased 10% year over year to €2.85 billion. Cash
flow was positively impacted by lower share-based and restructuring
payments. Free cash flow was further supported by a decline in
capex. At quarter end, net debt was –€2.66 billion.
Expanded Financial Disclosure – SAP's Accelerated Cloud
Transition
Starting with the first quarter 2021, SAP is expanding its
financial disclosure to provide investors with transparency on the
transition of its core ERP business to the cloud. Specifically, the
Company is disclosing current cloud backlog and cloud revenue
contributed by SAP S/4HANA Cloud, along with nominal and constant
currencies year-over-year growth rates.
In the first quarter S/4HANA current cloud backlog was up 39% to
€1.04 billion and up 43% (at constant currencies). S/4HANA cloud
revenue was up 36% to €227 million (IFRS and non-IFRS) and up 43%
(at constant currencies).
SAP S/4HANA Cloud represents SAP's cloud offering for core ERP
processes. It mainly includes cloud solutions for financial
management, supply chain management, engineering and manufacturing,
order management and asset management, as well as associated data
management, analytics, development and integration
capabilities.
"RISE with SAP ", SAP's holistic offering for business
transformation in the cloud, is an important driver of S/4HANA
Cloud and Business Technology Platform adoption.
Segment Performance First Quarter 2021
SAP's three reportable segments "Applications, Technology &
Support", "Qualtrics" and "Services" showed the following
performance:
Applications, Technology & Support (AT&S)
Segment revenue in AT&S was down 1% to €5.31 billion year
over year (up 4% at constant currencies). Segment performance was
driven by strong double-digit cloud revenue growth in S/4HANA
Cloud, Digital Supply Chain, Business Technology Platform, and
Customer Experience, in particular ecommerce. Software licenses
revenue grew sharply driven by a significant number of ERP and
supply chain competitive wins against peers. Segment support
revenues were flat at constant currencies (year over year)
reflecting high retention rates coupled with the shift of some
support revenue to cloud.
Qualtrics
Qualtrics segment revenue was up 25% to €202 million year over
year (up 37% at constant currencies). The strong growth was driven
by companies using Qualtrics experience data and insights to drive
employee retention and engagement, to find new customers and
strengthen relationships to keep the ones they already have. LIXIL,
Singapore Post, Bank of Montreal,
Los Angeles County Public Health, Mitsubishi Electric Corporation,
Royal Caribbean International, and many others selected Qualtrics
Experience Management Solutions.
Services
Services segment revenue was down 12% to €800 million year over
year (down 8% at constant currencies). The services implementation
business continues to demonstrate its resilience and flexibility
with SAP's shift to remote delivery, and SAP's premium services
remain in high demand. However, SAP's training business continues
to be impacted due to delays in re-opening of global training
centers.
Segment Results at a Glance
First Quarter 2021
|
Applications,
Technology & Support
|
Qualtrics
|
Services
|
€ million, unless
otherwise stated
(Non-IFRS)
|
Actual
Currency
|
∆ in %
|
∆ in %
const.
curr.
|
Actual
Currency
|
∆ in %
|
∆ in %
const.
curr.
|
Actual
Currency
|
∆ in %
|
∆ in %
const.
curr.
|
Cloud
revenue
|
1,958
|
4
|
10
|
160
|
33
|
45
|
0
|
NA
|
NA
|
Segment
revenue
|
5,314
|
–1
|
4
|
202
|
25
|
37
|
800
|
–12
|
–8
|
Segment profit
(loss)
|
2,127
|
8
|
13
|
13
|
<-100
|
<-100
|
170
|
26
|
33
|
Cloud gross margin
(in %)
|
68.8
|
–0.1pp
|
–0.2pp
|
92.2
|
1.4pp
|
1.5pp
|
NM1)
|
NM1)
|
NM1)
|
Segment margin (in
%)
|
40.0
|
3.1pp
|
3.2pp
|
6.4
|
16.5pp
|
15.6pp
|
21.2
|
6.4pp
|
6.5pp
|
Regional Revenue Performance First Quarter 2021
SAP had a strong performance across all of its regions.
In the EMEA region, cloud and software revenue increased 5%
(IFRS) and 7% (non-IFRS at constant currencies). Cloud revenue
increased 21% (IFRS) and 24% (non-IFRS at constant currencies) with
Germany and Switzerland being highlights.
In the Americas region, cloud and software revenue decreased 6%
(IFRS) and was up 3% (non-IFRS at constant currencies). Cloud
revenue decreased 2% (IFRS) and was up 7% (non-IFRS at constant
currencies). Canada and
Mexico had a robust
performance.
In the APJ region, cloud and software revenue increased 7%
(IFRS) and 11% (non-IFRS at constant currencies). Cloud revenue
increased 14% (IFRS) and 18% (non-IFRS at constant currencies) with
Japan, Australia and Singapore being highlights.
Financial Results at a Glance
First Quarter 2021
|
IFRS
|
Non-IFRS1)
|
€ million, unless
otherwise stated
|
Q1 2021
|
Q1 2020
|
∆ in %
|
Q1 2021
|
Q1 2020
|
∆ in %
|
∆ in %
const. curr.
|
Current cloud
backlog2)
|
NA
|
NA
|
NA
|
7,628
|
6,634
|
15
|
19
|
Cloud
revenue
|
2,145
|
2,011
|
7
|
2,147
|
2,012
|
7
|
13
|
Software licenses and
support revenue
|
3,283
|
3,386
|
–3
|
3,283
|
3,386
|
–3
|
1
|
Cloud and software
revenue
|
5,428
|
5,397
|
1
|
5,431
|
5,398
|
1
|
6
|
Total
revenue
|
6,348
|
6,521
|
–3
|
6,350
|
6,522
|
–3
|
2
|
Share of more
predictable revenue (in %)
|
78
|
76
|
2pp
|
78
|
76
|
2pp
|
|
Operating profit
(loss)
|
960
|
1,210
|
–21
|
1,741
|
1,482
|
17
|
24
|
Profit (loss) after
tax
|
1,070
|
811
|
32
|
1,722
|
1,015
|
70
|
|
Basic earnings per
share (in €)
|
0.88
|
0.68
|
29
|
1.40
|
0.85
|
63
|
|
Number of employees
(FTE, March 31)
|
103,142
|
101,150
|
2
|
NA
|
NA
|
NA
|
NA
|
|
1) For a breakdown of the individual
adjustments see table "Non-IFRS Adjustments by Functional Areas" in
this Quarterly Statement.
|
2) As
this is an order entry metric, there is no IFRS
equivalent.
|
Due to rounding,
numbers may not add up precisely.
|
Business Outlook 2021
SAP raised its full-year 2021 outlook on April 13 reflecting the strong new cloud business
performance which is expected to reaccelerate cloud revenue growth.
The Company continues to expect a software licenses revenue decline
for the full year as more customers turn to the "RISE with SAP"
subscription offering for their mission-critical core processes.
This outlook also continues to assume the COVID-19 crisis will
begin to recede as vaccine programs roll out globally, leading to a
gradually improving global demand environment in the second half of
2021.
SAP expects:
- €9.2 – 9.5 billion non-IFRS cloud revenue at constant
currencies (2020: €8.09 billion), up 14% to 18% at constant
currencies. The previous range was €9.1 – 9.5 billion at constant
currencies.
- €23.4 – 23.8 billion non-IFRS cloud and software revenue at
constant currencies (2020: €23.23 billion), up 1% to 2% at constant
currencies. The previous range was €23.3 – 23.8 billion at constant
currencies.
- €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) to reach approximately
75% (2020: 72%).
The Company continues to expect operating cash flow of
approximately €6.0 billion (2020 €7.2 billion) primarily reflecting
moderately lower profit, higher expected income tax payments and
adverse currency exchange movements. Free cash flow is expected
above €4.5 billion (2020 €6.0 billion), also impacted by a modest
increase in capex.
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 Q2 and FY
2021 expected currency impacts.
Expected Currency
Impact Based on March 2021 Level for the Rest of the
Year
|
In percentage
points
|
Q2
|
FY
|
Cloud
revenue
|
-6pp to
-4pp
|
-4pp to
-2pp
|
Cloud and software
revenue
|
-5pp to
-3pp
|
-3pp to
-1pp
|
Operating
profit
|
-5pp to
-3pp
|
-3pp to
-1pp
|
SAP focuses on three non-financial targets for 2021: customer
loyalty, employee engagement, and carbon emissions. SAP continues
to aim for:
- a Customer Net Promoter Score of 5 to 10 in 2021,
- an Employee Engagement Index in a range of 84% to 86%, and
- net greenhouse gas emissions of 145 kt in 2021.
The full Q1 2021 Quarterly Statement can be downloaded from
http://www.sap.com/investors/sap-2021-q1-statement.
Additional Information
This Quarterly Statement and all information therein is
unaudited.
Definition of key growth metrics
Current cloud backlog (CCB) is the contractually committed cloud
revenue we expect to recognize over the upcoming 12 months as of a
specific key date. Thus, it is a subcomponent of our overall
remaining performance obligations following IFRS 15.120. For CCB,
we take into consideration committed deals only. CCB can be
regarded as a lower boundary for cloud revenue to be recognized
over the next 12 months, as it excludes utilization-based models
without pre-commitments and committed deals, both new and renewal,
closed after the key date. For our committed cloud business, we
believe the CCB is a valuable indicator of go-to-market success, as
it reflects both new contracts closed as well as existing contracts
renewed.
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.
For explanations on other key growth metrics please refer to the
performance management section of SAP's Integrated Report 2020,
which can be found at www.sap.com/investor.
Webcast
SAP senior management will host a financial analyst conference
call on Thursday, April 22, at
2:00 PM (CEST) / 1:00 PM (BST) / 8:00
AM (Eastern) / 5:00 AM
(Pacific), The conference 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.
Financial Analyst and Investor Conference
SAP will hold a virtual financial analyst event on Tuesday, June 15, in conjunction with its annual
SAPPHIRE NOW conference kicking off on June
2nd
https://events.sap.com/sapandasug/en/home.
About SAP
SAP's strategy is to help every business run as an intelligent
enterprise. As a market leader in enterprise application software,
we help companies of all sizes and in all industries run at their
best. Our machine learning, Internet of Things (IoT), and advanced
analytics technologies help turn customers' businesses into
intelligent enterprises. SAP helps to give people and organizations
deep business insight and fosters collaboration that helps them
stay ahead of their competition. We simplify technology for
companies so they can consume our software the way they want –
without disruption. Our end-to-end suite of applications and
services enables business and public customers across 25 industries
globally to operate profitably, adapt continuously, and make a
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.
Follow SAP Investor Relations on Twitter at @sapinvestor.
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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historical facts are forward-looking statements as defined in the
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____________________
|
1 The
Q1 2021 results were also impacted by other effects. For details
please refer to the disclosures on page 24 of this
document.
|
2 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.
|
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