WALLDORF, Germany, July 21, 2021 /PRNewswire/ --
Cloud Revenue
in € millions
|
Total Revenue
in € millions
|
|
|
|
|
IFRS
|
Non-IFRS
|
IFRS
|
Non-IFRS
|
|
2,276
|
2,276
|
6,669
|
6,669
|
|
+11%
|
+11% (+17%
cc)
|
-1%
|
-1% (+3%
cc)
|
|
The share of more predictable revenue reached 76% in the second
quarter 2021 (+3 percentage points)
Cloud & Software
Revenue
in € millions
|
Operating Profit
in € millions
|
|
|
|
|
IFRS
|
Non-IFRS
|
IFRS
|
Non-IFRS
|
|
5,750
|
5,750
|
984
|
1,922
|
|
+1%
|
+1% (+5%
cc)
|
-23%
|
-2% (+3%
cc)
|
|
We're seeing strong adoption of our cloud portfolio as customers
select SAP for their business transformation. Our strategy is
working; This is the third straight quarter of strong execution,
and we continue to deliver unparalleled customer value through the
strength of our platform and applications.
Christian Klein, CEO
This has been another strong quarter with accelerating growth
for SAP's cloud portfolio. We saw excellent customer momentum and
adoption and are raising our outlook for revenue and profit.
Luka Mucic, CFO
SAP SE (NYSE: SAP) today announced its financial results for the
second quarter ended June 30,
2021.
Business Update Second Quarter 2021
Customers continue to choose SAP as they move to the cloud and
transform their business processes. SAP is seeing strong demand and
adoption of its 'RISE with SAP' offering which customers of all
sizes are selecting to manage this transition. SAP is also seeing
strong growth in current cloud backlog across its cloud portfolio
including Business Technology Platform, Business Process
Intelligence, Qualtrics, as well as Customer Experience. SAP had
significant competitive wins in ERP, SuccessFactors, Commerce,
Intelligent Spend, and across its broader cloud solution
portfolio.
SAP's cloud revenue growth accelerated sequentially. SAP saw the
first signs of recovery in travel and expense management with the
easing of global travel restrictions, which led to Concur
stabilizing its sequential performance for the first time since the
pandemic began. The Company's Intelligent Spend category returned
to growth but continued to be impacted by the COVID-19 crisis more
than other SaaS/PaaS solutions.
Current cloud backlog growth also accelerated further
sequentially. As more customers transition to the 'RISE with SAP'
subscription offering, software licenses revenue decreased as
anticipated.
In general, as many countries began to reopen, SAP saw a
positive impact on demand around the world.
Highlights
- 'RISE with SAP' gained even more traction after a successful
launch in the first quarter. SAP saw strong demand from companies
of all sizes and closed deals with more than 250 customers in the
second quarter. Large customers such as AMD, Coop Switzerland,
Etihad Airways, and Siemens Energy selected 'RISE with SAP'.
Additional wins included arena, Dixons Carphone, EBANX, Fujifilm
Diosynth Biotechnologies, The Great Eastern Shipping Co., Inchcape,
Mollie, National Basketball Association (NBA), Randstad, R. Twining
& Co., and South32 Group.
- More than 600 S/4HANA customers were added in the quarter,
taking total adoption to more than 17,000 customers, up 16% year
over year, of which more than 10,100 are live. In the second
quarter, more than 50% of the additional S/4HANA customers were net
new.
- Key customer wins across SAP's solutions portfolio included:
ABN AMRO, Clarins, Coca-Cola FEMSA,
, Florida Crystals, Florida Department of Management Services,
Keolis Group, LeasePlan Corporation, Moderna, Molson Coors Brewing,
Nationwide Building Society, Rabobank, Roca Sanitario, The
Singapore University of Technology and
Design, Stanley Black & Decker,
and Tenneco. Bitburger Braugruppe, Wales & West Utilities, and Weber-Stephen
Products all went live on SAP solutions in the second quarter.
- SAP Business Technology Platform (SAP BTP) is the foundation of
the Intelligent Enterprise, providing a single platform for
integration and extensibility across the SAP portfolio and non-SAP
solutions, as well as deriving insights from data. The Company
already has over 8,000 productive BTP customers and more than 4,000
partners within its ecosystem actively engaged. Hilti, Lenovo, NEC,
and Renault chose SAP BTP offerings in the second quarter. Current
cloud backlog grew in strong double digits. Hilti, Lenovo, NEC, and
Renault chose SAP BTP offerings in the second quarter.
- Signavio had an outstanding first full quarter as part of SAP's
Business Process Intelligence (BPI) segment. Current cloud backlog
grew in triple digits. SAP's BPI solutions are key to our
customers' business transformation and acceleration to the
cloud.
- More than 52,000 attendees from 158 countries joined SAPPHIRE
NOW, SAP's flagship customer event, across its global and regional
sessions.
- In addition to driving innovation in and beyond our core, SAP
is continuously expanding into new markets. SAP expects to expand
its 2025 Total Addressable Market (TAM) by $150 billion, totaling $600 billion.
- Sustainability continues to be at the center of SAP's business
model. In the second quarter, SAP joined the World Economic Forum
Stakeholder Capitalism Coalition.
- SAP announced 'pledge to flex' in April, showing its commitment
to a truly flexible remote workforce operating model even beyond
the pandemic.
- SAP paid out an annual dividend of €1.85 per share in the
amount of €2.2 billion for fiscal year 2020 representing a
year-over-year increase of €0.27 or 17%.
Financial Performance Second Quarter 20211
SAP's strong cloud momentum continued in the second quarter with
both current cloud backlog and cloud revenue growth accelerating
sequentially. Current cloud backlog was up 17% to €7.77 billion
(non-IFRS) and up 20% (at constant currencies). Cloud revenue was
up 11% to €2.28 billion and up 17% (at constant currencies).
SaaS/PaaS cloud revenue outside the Intelligent Spend business was
up 20% and up 25% (at constant currencies). Software licenses
revenue was down 16% year over year to €0.65 billion and down 13%
(at constant currencies). Cloud and software revenue was up 1% to
€5.75 billion and up 5% (at constant currencies). Services revenue
was down 11% year over year to €0.92 billion and down 7% (at
constant currencies). This revenue decline is primarily
attributable to the November 2020
divestiture of SAP Digital Interconnect, which contributed
approximately €80 million of services revenue in the second quarter
of 2020. Total revenue was down 1% year over year to €6.67 billion
and up 3% (at constant currencies).
The share of more predictable revenue grew by 3 percentage
points year over year to 76% in the second quarter.
Operating profit decreased 23% to €0.98 billion and Operating
margin decreased by 4.3 percentage points to 14.8% due to higher
share-based compensation expenses (primarily related to Qualtrics).
Non-IFRS operating profit decreased 2% to €1.92 billion, up 3%
(non-IFRS at constant currencies) and non-IFRS operating margin
decreased by 0.3 percentage points to 28.8%, down 0.2 percentage
points (non-IFRS at constant currencies) despite the accelerated
cloud transition which resulted in higher margin software licenses
revenue trending lower, as expected.
Earnings per share increased 57% to €1.15 (IFRS) and increased
50% to €1.75 (non-IFRS) reflecting another outstanding contribution
from Sapphire Ventures. With Sapphire Ventures SAP supports
entrepreneurs that aspire to build industry-leading businesses
through venture capital funds. In the second quarter, the SAP
Supervisory Board approved the financing of a new Sapphire Ventures
fund ("Sapphire Ventures Fund VI"). The total volume committed for
Sapphire Ventures Fund VI is $1.75
billion.
Operating cash flow for the first six months was flat year over
year to €3.77 billion. Free cash flow increased 4% year over year
to €3.25 billion. Positive effects from lower share-based
compensation and lower restructuring payments were compensated by
higher income taxes paid net of refunds. At quarter end, net
debt was –€4.57 billion.
Expanded Financial Disclosure – SAP's Accelerated Cloud
Transition
Beginning in 2021, SAP expanded its financial disclosure to
provide investors with transparency on the transition of its core
ERP business to the cloud. Specifically, the Company discloses
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 second quarter, S/4HANA current cloud backlog was up 45%
(Non-IFRS) to €1.13 billion and up 48% (at constant currencies).
S/4HANA cloud revenue was up 33% to €257 million and up 39% (at
constant currencies).
SAP is seeing strong momentum with its S/4HANA current cloud
backlog growth, in particular in the
United States. SAP expects S/4HANA cloud revenue growth to
significantly accelerate in the second half of 2021.
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 Second 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 flat at € 5.62 billion year over
year and 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 decreased as anticipated due to strong adoption of 'RISE
with SAP'. Segment support revenues were up 1% year over year (at
constant currencies) reflecting high retention rates coupled with
the shift of some support revenue to cloud.
Qualtrics
Qualtrics segment revenue was up 25% to €211 million year over
year, up 37% (at constant currencies). The continued strong growth
was driven by robust renewal rates and expansions as customers
increase their usage and acquire additional modules of Qualtrics to
measure all four experience areas: customer, employee, product, and
brand. Daikin, Merck KGaA, Mitsubishi Heavy Industries, M&T
Bank, Noom, Trivago, Virgin Cruises and many others selected
Qualtrics Experience Management Solutions.
Services
Services segment revenue was down 7% to €796 million year over
year, down 3% (at constant currencies). While SAP continues to see
solid growth in its Premium Engagement revenue on the back of a
very resilient business model, consulting revenue declined year
over year due to a strong prior year comparison.
Segment Results at a Glance
Segment Performance Second 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
|
2,066
|
8
|
14
|
174
|
33
|
46
|
0
|
NA
|
NA
|
Segment
revenue
|
5,619
|
0
|
4
|
211
|
25
|
37
|
796
|
–7
|
–3
|
Segment profit
(loss)
|
2,279
|
–4
|
0
|
13
|
>100
|
>100
|
180
|
9
|
16
|
Cloud gross margin
(in %)
|
69.2
|
–0.1pp
|
–0.2pp
|
92.4
|
1.4pp
|
1.5pp
|
NM1)
|
NM1)
|
NM1)
|
Segment margin (in
%)
|
40.6
|
–1.6pp
|
–1.5pp
|
6.3
|
4.9pp
|
4.0pp
|
22.6
|
3.2pp
|
3.7pp
|
Regional Revenue Performance Second Quarter 2021
SAP had a strong cloud performance across all of its
regions.
In the EMEA region, cloud and software revenue increased 4% and
5% (at constant currencies). Cloud revenue increased 22% and 23%
(at constant currencies) with Germany and Saudi
Arabia being highlights.
In the Americas region, cloud and software revenue decreased 3%
and was up 5% (at constant currencies). Cloud revenue increased 4%
and was up 12% (at constant currencies) with a robust performance
in Brazil and Mexico. The United
States, SAP's largest market, had a strong sequential
acceleration in cloud revenue growth combined with an even stronger
current cloud backlog growth.
In the APJ region, cloud and software revenue increased 2% and
6% (at constant currencies). Cloud revenue increased 18% and 23%
(at constant currencies) with Japan, Australia and South
Korea being highlights.
Financial Results at a Glance
Second Quarter 2021
|
IFRS
|
Non-IFRS1)
|
€ million, unless
otherwise stated
|
Q2 2021
|
Q2 2020
|
∆ in %
|
Q2 2021
|
Q2 2020
|
∆ in %
|
∆ in % const.
curr.
|
Current cloud
backlog2)
|
NA
|
NA
|
NA
|
7,766
|
6,638
|
17
|
20
|
Thereof SAP S/4HANA
Current Cloud Backlog2)
|
NA
|
NA
|
NA
|
1,130
|
780
|
45
|
48
|
Cloud
revenue
|
2,276
|
2,044
|
11
|
2,276
|
2,044
|
11
|
17
|
Thereof SAP S/4HANA
Cloud revenue
|
257
|
193
|
33
|
257
|
193
|
33
|
39
|
Software licenses and
support revenue
|
3,474
|
3,665
|
–5
|
3,474
|
3,665
|
–5
|
–2
|
Cloud and software
revenue
|
5,750
|
5,709
|
1
|
5,750
|
5,709
|
1
|
5
|
Total
revenue
|
6,669
|
6,743
|
–1
|
6,669
|
6,744
|
–1
|
3
|
Share of more
predictable revenue (in %)
|
76
|
73
|
3pp
|
76
|
73
|
3pp
|
|
Operating profit
(loss)
|
984
|
1,284
|
–23
|
1,922
|
1,964
|
–2
|
3
|
Profit (loss) after
tax
|
1,449
|
885
|
64
|
2,214
|
1,395
|
59
|
|
Basic earnings per
share (in €)
|
1.15
|
0.73
|
57
|
1.75
|
1.17
|
50
|
|
Number of employees
(FTE, June 30)
|
103,876
|
101,379
|
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.
|
Six months ended June 2021
|
IFRS
|
Non-IFRS1)
|
€ million, unless
otherwise stated
|
Q1–Q2
2021
|
Q1–Q2
2020
|
∆ in %
|
Q1–Q2
2021
|
Q1–Q2
2020
|
∆ in %
|
∆ in % const.
curr.
|
Current Cloud
Backlog2)
|
NA
|
NA
|
NA
|
7,766
|
6,638
|
17
|
20
|
Thereof SAP S/4HANA
Current cloud backlog2)
|
NA
|
NA
|
NA
|
1,130
|
780
|
45
|
48
|
Cloud
revenue
|
4,421
|
4,055
|
9
|
4,421
|
4,057
|
9
|
15
|
Thereof S/4HANA Cloud
revenue
|
485
|
360
|
34
|
485
|
360
|
34
|
41
|
Software licenses and
support revenue
|
6,757
|
7,051
|
–4
|
6,757
|
7,051
|
–4
|
0
|
Cloud and software
revenue
|
11,178
|
11,106
|
1
|
11,178
|
11,107
|
1
|
5
|
Total
revenue
|
13,017
|
13,264
|
–2
|
13,017
|
13,266
|
–2
|
3
|
Share of more
predictable revenue (in %)
|
77
|
74
|
3pp
|
77
|
74
|
3pp
|
|
Operating profit
(loss)
|
1,944
|
2,494
|
–22
|
3,660
|
3,446
|
6
|
12
|
Profit (loss) after
tax
|
2,519
|
1,697
|
48
|
3,934
|
2,409
|
63
|
|
Basic earnings per
share (in €)
|
2.03
|
1.42
|
43
|
3.14
|
2.02
|
56
|
|
Number of employees
(FTE, June 30)
|
103,876
|
101,379
|
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 is raising its full-year 2021 outlook, reflecting the strong
business performance which is expected to accelerate 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 further improvements in global demand in the second half
of 2021.
SAP now expects:
- €9.3 – 9.5 billion cloud revenue at constant currencies (2020:
€8.09 billion), up 15% to 18% at constant currencies. The previous
range was €9.2 – 9.5 billion at constant currencies.
- €23.6 – 24.0 billion cloud and software revenue at constant
currencies (2020: €23.23 billion), up 2% to 3% at constant
currencies. The previous range was €23.4 – 23.8 billion at constant
currencies.
- €7.95 – 8.25 billion operating profit at constant currencies
(2020: €8.28 billion), flat to down 4% at constant currencies. The
previous range was €7.8 – 8.2 billion at constant currencies.
SAP continues to expect the share of more predictable revenue to
reach approximately 75% (2020: 72%).
SAP continues to expect operating cash flow of approximately
€6.0 billion (2020 €7.2 billion) and free cash flow above €4.5
billion (2020 €6.0 billion).
SAP now expects a full-year 2021 effective tax rate (IFRS) of
21.5% to 23.0% (previously: 26.0% to 27.0%) and an effective tax
rate (non-IFRS) of 20.0% to 21.5% (previously: 22.5% to 23.5%).
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 Q3 and FY
2021 expected currency impacts.
Expected Currency
Impact Based on June 2021 Level for the Rest of the Year
(Non-IFRS)
|
In percentage
points
|
Q3
|
FY
|
Cloud revenue
growth
|
-3pp to
-1pp
|
-5pp to
-3pp
|
Cloud and software
revenue growth
|
-2pp to
0pp
|
-4pp to
-2pp
|
Operating profit
growth
|
-3pp to
-1pp
|
-4pp to
-2pp
|
SAP is focusing on three non-financial indicators: customer
loyalty, employee engagement, and carbon emissions.
In 2021 SAP continues to aim for:
- a Customer Net Promoter Score of 5 to 10 (2020: 4),
- an Employee Engagement Index in a range of 84% to 86% (2020:
86%)
As a result of the ongoing COVID-19 pandemic, as well as the
introduction of a more flexible working model at SAP, the level of
remote work will be higher than previously anticipated. As a
consequence, SAP is lowering its 2021 carbon emissions outlook. SAP
now expects carbon emissions in a range of 90 to 110 kt, assuming
the high level of remote work continues. Previously, SAP expected
145 kt (2020: 135 kt).
The full Q2 2021 Quarterly Statement can be downloaded from
http://www.sap.com/investors/sap-2021-q2-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 cloud revenue
and 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 and
SAP's Half-Year Report 2021, which can be found at
www.sap.com/investor.
Webcast
SAP senior management will host a financial analyst conference
call on Wednesday, July 21, 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
second quarter results can be found at
www.sap.com/investor.
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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____________
|
1 The
Q2 2021 results were also impacted by other effects. For details
please refer to the disclosures on page 30 of this
document.
|
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