Quarterly Statement Q3 2019 | |
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Double-Digit Growth Across Revenue, Profit and Cash Flow
Operational Excellence Boosts Margins
· New Cloud Bookings Up 39%, Software License Revenue Down 1%
· Cloud Revenue Up 37%
· Cloud Gross Margin Up More Than 5 Percentage Points
· IFRS Operating Profit Up 36%; Non-IFRS Operating Profit Up 20%
· IFRS Operating Margin Up 4.2pp; Non-IFRS Operating Margin Up 1.7pp
· Q3 Operating Cash Flow Up 28%, Free Cash Flow Up 116%
„ Our third quarter results reflect the momentum we’ve built entering the final quarter of the year and more broadly where we are on our journey of growth and operational excellence. We are excited and energized to write the next chapter in SAP’s story alongside the best workforce anywhere in the technology industry.
Jennifer Morgan and Christian Klein, Co-CEOs |
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| „ In April we promised a stronger focus on profits and here we go: Q3 marks yet another milestone in delivering on this commitment. Q3 is also a manifesto of us keeping our second promise: continued strong top line momentum. Despite continued macro uncertainties we couldn’t be more confident to make 2019 another stellar year for SAP.
Luka Mucic, CFO |
SAP Quarterly Statement Q3 2019 |
Walldorf, Germany – October 21, 2019
SAP SE (NYSE: SAP) today announced its financial results for the third quarter ended September 30, 2019.
Business Performance
Financial Highlights Third Quarter 20191
In the third quarter, new cloud bookings were up 39% to €572 million (34% at constant currencies) and up 51% excluding Infrastructure-as-a-Service (IaaS). A new partnership with Microsoft contributed 18 percentage points to the 39% Q3 new cloud bookings growth. The deal has a term of 3 years, with revenue recognition starting in the fourth quarter 2019. Cloud revenue grew 37% year over year to €1.79 billion (IFRS), up 37% (non-IFRS) and 33% (non-IFRS at constant currencies). Software licenses revenue was down 1% year over year to €932 million (IFRS), down 1% (non-IFRS) and down 4% (non-IFRS at constant currencies). New cloud and software order entry was up 20% (15% at constant currencies) year over year in the third quarter. Cloud and software revenue grew 12% year over year to €5.63 billion (IFRS), up 13% (non-IFRS) and 10% (non-IFRS at constant currencies). Total revenue grew 13% year over year to €6.79 billion (IFRS), up 13% (non-IFRS) and 10% (non-IFRS at constant currencies).
The share of more predictable revenue grew by two percentage points year-over-year to 69% in the third quarter.
Cloud gross margin increased 5.9 percentage points year over year to 64.5% (IFRS) and increased by 5.4 percentage points year over year to 69.0% (non-IFRS).
Operating profit increased 36% year over year to €1.68 billion (IFRS), up 20% (non-IFRS) and up 15% (non-IFRS at constant currencies). Operating margin increased 4.2 percentage points year over year to 24.7% (IFRS) and expanded by 1.7 percentage points year over year to 30.6% (non-IFRS) and 1.5 percentage points to 30.4% (non-IFRS at constant currencies). Operating profit in the third quarter benefitted from disciplined hiring and accelerated operating efficiency gains. IFRS operating profit additionally benefitted from lower share-based compensation expenses.
Earnings per share was up 28% to €1.04 (IFRS) and up 14% to €1.30 (non-IFRS).
Operating cash flow in the third quarter developed significantly better than in the first half of 2019 and contributed €638 million (up 28% year-over-year) to the nine-month operating cash flow. Operating cash flow for the first nine months was €3.32 billion, down 5% year-over-year. The decrease in operating cash flow was primarily due to higher payouts related to share-based compensation (€205 million), restructuring payouts (€239 million) and higher tax cash outflows (€490 million) compared to the first nine months of 2018. In addition, operating cash flow experienced a year over year benefit of roughly €288 million from the application of IFRS 16. Free cash flow2 was flat year-over-year at €2.33 billion. At the end of the third quarter, net liquidity was -€8.28 billion.
Segment Performance Third Quarter 2019
SAP’s three reportable segments “Applications, Technology & Services”, “Intelligent Spend Group” and “Customer and Experience Management” showed the following performance:
Applications, Technology & Services (AT&S)
In the third quarter, segment revenue in AT&S was up 9% to €5.52 billion year-over-year (up 6% at constant currencies). Solutions which contributed to this growth are listed below.
In the third quarter, SAP and Microsoft established a preferred partnership to move on-premise SAP ERP and S/4HANA customers to the cloud through industry specific best practices, reference architectures, and cloud-delivered services on Microsoft Azure. This partnership will both accelerate and simplify customer migration to S/4HANA on Microsoft Azure, and Microsoft will embed SAP Cloud platform solutions and related services within Azure Cloud Services.
SAP S/4HANA
SAP S/4HANA is at the core of the Intelligent Enterprise. It embeds analytics, simulation, prediction, and decision support to run LIVE business. SAP offers customers a choice of deployment options including cloud, on-premise and hybrid so they can choose any scenario or combination that is right for them. Built on SAP’s advanced in-memory computing platform, SAP S/4HANA is the market-leading intelligent ERP that provides unparalleled business agility, empowering companies across all industries to reinvent their business models for the digital economy and navigate dynamic marketplaces.
Adding over 500 customers in the quarter, S/4HANA adoption grew to more than 12,000 customers, up 25% year over year. In the third quarter close to 40% of the additional S/4HANA customers were net new.
1 Q3 2019 results were also impacted by changes in accounting policies, business combinations and other effects. For details, please refer to the disclosures on page 34 of this Quarterly Statement.
2 IFRS 16 also affects SAP’s cash flow statement: operating cash flow increased and cash flow from financing activities decreased by €288 million. The Company has modified its free cash flow metric by subtracting this impact. Therefore, free cash flow is not affected by this change. For details, please refer to the disclosures on page 34 of this Quarterly Statement.
SAP Quarterly Statement Q3 2019 |
S/4HANA continues to be selected by world-class organizations, including State of Nevada, Grupo Crystal and BrandX. Dow Jones, Callaway Golf, Daewoong Pharmaceutical and Breitling have gone live on S/4HANA. A growing number of companies including British Telecom and CIE Automotive have chosen S/4HANA in the Cloud. McDonald’s UAE and Xinjiang Daming Mining Group Co. have gone live on S/4HANA Cloud.
Human Capital Management Solutions (HCM)
SuccessFactors’ evolution towards Human Experience Management (EmployeeXM™) represents the next generation of human capital management (HCM).
The unique combination of SAP SuccessFactors and Qualtrics Employee Experience Management elevates HCM solutions beyond facilitating transactions to truly reinvent human experiences in ways that accelerate business growth. Employees are the frontline face to the customer. Delivering great customer experiences requires focusing on employees and delivering great employee experiences. Organizations that deliver exceptional employee experiences achieve better business results and outperform the competition.
Proximus Group, a top Belgian provider of information and communications technology, selected Qualtrics Employee Experience to support an ambitious new employee listening program. The combination of SAP and Qualtrics solutions will ultimately empower Proximus Group to blend customer experience data with employee experience data to enable holistic, personalized experience management.
SAP SuccessFactors Employee Central, which is the flagship of SAP’s HCM offering, added more than 150 customers in the quarter and has now more than 3,500 customers globally. Vonovia SE was one of many competitive wins and the International Committee of the Red Cross went live on SAP SuccessFactors this quarter.
Business Technology Platform
SAP’s business technology platform represents an evolution of the digital platform helping customers to turn their data into business value. It encompasses database and data management, application development and integration, analytics, and intelligent technologies. The business technology platform represents a combination of SAP’s leading technologies such as SAP HANA, SAP Cloud Platform, SAP Data Warehouse Cloud, SAP Analytics Cloud, SAP Data Intelligence and SAP Intelligent Robotic Process Automation bundled into one single reference architecture. It supports cloud, on-premise and hybrid customer landscapes. Additionally, the business technology platform offers seamless interoperability with hyperscalers’ technologies to deliver a high level of scalability and flexibility. The business technology platform provides customers with convenient access to SAP data, SAP technology and SAP pre-configured business services to help them drive business value across their entire solution landscape.
Nippon Express, Impossible Foods Inc and Amazonas & Roraima Energia selected SAP’s business technology platform and analytics cloud solutions in the third quarter.
Intelligent Spend Group
In the third quarter, segment revenue in the Intelligent Spend Group was up 23% to €828 million year-over-year (up 18% at constant currencies).
With the Intelligent Spend Group, SAP provides collaborative commerce capabilities (SAP Ariba), effortless travel and expense processing (SAP Concur) and flexible workforce management (SAP Fieldglass). The Intelligent Spend Group portfolio represents the largest commerce platform in the world with approximately $3.4 trillion in global commerce annually transacted in more than 180 countries.
British Telecom, Prada, and Xiaomi Communications chose SAP’s Intelligent Spend Group solutions in the third quarter.
SAP Quarterly Statement Q3 2019 |
Customer and Experience Management (CXM)
In the third quarter, segment revenue in Customer and Experience Management was up 75% to €371 million year-over-year (69% at constant currencies). Solutions which contributed to this growth in the third quarter are listed below3.
SAP C/4HANA
SAP’s C/4HANA suite enables companies to manage and deliver personalized customer experiences across every touchpoint and across channels based on a complete view of the customer. C/4HANA combines leading solutions for marketing, sales, commerce, service and customer data. As part of the Intelligent Enterprise, C/4HANA integrates with S/4HANA to connect demand signals to fulfillment in one end-to-end process.
SAP C/4HANA solutions also leverage Qualtrics CustomerXM™. This enables organizations to combine customer feedback and operational data to listen, understand and take action in the moment to improve the customer experience.
E.ON, Swift, and Cintac Mining all chose SAP C/4HANA in Q3.
Experience Management Solutions (Qualtrics)
With Qualtrics, SAP combines market leadership in Experience Management (XM) with end-to-end operational power in over 25 industries to help organizations manage and improve the four core experiences of business: customer, employee, product, and brand.
The Qualtrics XM™ Platform is trusted by approx. 11,000 customers to listen, understand, and take action on experience data (X-data™) by combining X-data with the operational data (O-data™) systems of the enterprise.
In Q3, Slack Technologies, U-Haul, Sharper Image Corp, Stanley Black & Decker, Garmin International, Dish Networks and many others selected Qualtrics to move beyond systems of record to new systems of action and achieve breakthrough results.
Segment Results at a Glance4
Segment Performance Third Quarter 2019 | |||||||||
| Applications, Technology & Services | Intelligent Spend Group | Customer and Experience | ||||||
€ million, unless otherwise stated | Actual | D in % | D in % | Actual | D in % | D in % | Actual | D in % | D in % |
Cloud revenue | 813 | 35 | 32 | 699 | 24 | 20 | 294 | 98 | 92 |
Segment revenue | 5,518 | 9 | 6 | 828 | 23 | 18 | 371 | 75 | 69 |
Segment profit (loss) | 2,475 | 17 | 13 | 211 | 36 | 31 | 2 | –84 | –88 |
Cloud gross margin (in %) | 57.8 | 9.7pp | 10.2pp | 78.0 | –0.4pp | –0.4pp | 76.4 | 8.8pp | 8.7pp |
Segment margin (in %) | 44.9 | 3.0pp | 2.8pp | 25.5 | 2.5pp | 2.4pp | 0.5 | –5.0pp | –5.1pp |
Regional Revenue Performance
SAP had a solid performance in the EMEA region with cloud and software revenue increasing 10% (IFRS) and 9% (non-IFRS at constant currencies). Cloud revenue increased 49% (IFRS) and 46% (non-IFRS at constant currencies) with Germany and the UK being highlights. France and the UK had exceptional quarters in software license revenue.
The Company had a strong performance in the Americas region. Cloud and software revenue increased 16% (IFRS) and 12% (non-IFRS at constant currencies). Cloud revenue increased 31% (IFRS) and 26% (non-IFRS at constant currencies) with Canada, Brazil and Mexico being highlights. In addition, the United States and Brazil had strong quarters in software license revenue.
In the APJ region, SAP had a solid quarter amidst a challenging market environment. Cloud and software revenue was up 9% (IFRS) and 5% (non-IFRS at constant currencies). Cloud revenue increased 40% (IFRS) and 37% (non-IFRS at constant currencies) with Japan and Australia being highlights. For software license revenue, Japan had an exceptional quarter.
3 Q3 2019 results were impacted by business combinations. For details, please refer to the disclosures on page 33 of this Quarterly Statement
4 For details on the performance of our segments please refer to pages 21-29.
SAP Quarterly Statement Q3 2019 |
Financial Results at a Glance
Third Quarter 2019 | |||||||
| IFRS | Non-IFRS1) | |||||
€ million, unless otherwise stated | Q3 2019 | Q3 2018 | D in % | Q3 2019 | Q3 2018 | D in % | D in % |
New Cloud Bookings2) | NA | NA | NA | 572 | 411 | 39 | 34 |
Cloud revenue | 1,789 | 1,304 | 37 | 1,807 | 1,315 | 37 | 33 |
Software licenses and support revenue | 3,839 | 3,702 | 4 | 3,840 | 3,702 | 4 | 1 |
Cloud and software revenue | 5,629 | 5,007 | 12 | 5,647 | 5,017 | 13 | 10 |
Total revenue | 6,791 | 6,020 | 13 | 6,809 | 6,031 | 13 | 10 |
Share of more predictable revenue (in %) | 69 | 68 | 2pp | 69 | 68 | 2pp |
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Operating profit (loss) | 1,679 | 1,236 | 36 | 2,086 | 1,742 | 20 | 15 |
Profit (loss) after tax | 1,259 | 972 | 30 | 1,564 | 1,358 | 15 |
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Basic earnings per share (in €) | 1.04 | 0.81 | 28 | 1.30 | 1.14 | 14 |
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Number of employees (FTE, September 30) | 99,710 | 94,989 | 5 | NA | NA | NA | NA |
Nine months ended September 2019 | |||||||
| IFRS | Non-IFRS1) | |||||
€ million, unless otherwise stated | Q1–Q3 | Q1–Q3 | D in % | Q1–Q3 | Q1–Q3 | D in % | D in % |
New Cloud Bookings2) | NA | NA | NA | 1,389 | 1,078 | 29 | 24 |
Cloud revenue | 5,037 | 3,588 | 40 | 5,106 | 3,614 | 41 | 36 |
Software licenses and support revenue | 11,130 | 10,714 | 4 | 11,130 | 10,714 | 4 | 1 |
Cloud and software revenue | 16,167 | 14,302 | 13 | 16,236 | 14,328 | 13 | 10 |
Total revenue | 19,513 | 17,280 | 13 | 19,583 | 17,307 | 13 | 10 |
Share of more predictable revenue (in %) | 70 | 68 | 2pp | 70 | 68 | 2pp |
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Operating profit (loss) | 2,370 | 3,304 | –28 | 5,368 | 4,618 | 16 | 12 |
Profit (loss) after tax | 1,733 | 2,397 | –28 | 3,961 | 3,397 | 17 |
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Basic earnings per share (in €) | 1.43 | 2.01 | –29 | 3.29 | 2.85 | 16 |
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Number of employees (FTE, September 30) | 99,710 | 94,989 | 5 | 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.
SAP Quarterly Statement Q3 2019 |
Business Outlook 2019
The Company reiterates its outlook for the full year 2019.
SAP continues to expect:
· Non-IFRS cloud revenue to be in a range of €6.7 – €7.0 billion at constant currencies (2018: €5.03 billion), up 33% – 39% at constant currencies.
· Non-IFRS cloud and software revenue to be in a range of €22.4 – €22.7 billion at constant currencies (2018: €20.66 billion), up 8.5% – 10% at constant currencies.
· Non-IFRS operating profit to be in a range of €7.85 – €8.05 billion at constant currencies (2018: €7.16 billion), up 9.5% – 12.5% at constant currencies (previously: €7.7 – €8.0 billion, up 7.5% – 11.5% at constant currencies)
In addition, SAP expects total revenues to increase strongly, at a rate lower than operating profit.
The 2019 numbers include Qualtrics’ revenues and profits only from the acquisition date of January 23rd. The comparative numbers for full year 2018 do not include Qualtrics revenues and profits and include Callidus revenue and profits only from the April 5th, 2018 acquisition date.
While SAP’s full-year 2019 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 Q4 and FY 2019 expected currency impacts.
Expected Currency Impact Based on September 2019 Level for the Rest of the Year | ||
In percentage points | Q4 | FY |
Cloud revenue | +3pp to +5pp | +4pp to +6pp |
Cloud and software revenue | +2pp to +4pp | +2pp to +4pp |
Operating profit | +2pp to +4pp | +3pp to +5pp |
Ambition 2020 and 2023
Looking beyond 2019, SAP continues to expect the following:
Ambition 2020
SAP continues to expect:
· €8.6 – €9.1 billion non-IFRS cloud revenue
· €28.6 – €29.2 billion non-IFRS total revenue
· The share of more predictable revenue (defined as the total of cloud revenue and software support revenue) in a range of 70% – 75%
· €8.8 – €9.1 billion non-IFRS operating profit
Ambition 2023
Over the period from 2018 through 2023, SAP continues to expect to:
· More than triple non-IFRS cloud revenue (2018: €5.03 billion)
· Grow to more than €35 billion in non-IFRS total revenue (2018: €24.74 billion)
· Approach a share of more predictable revenue of 80%
· Reach a Non-IFRS cloud gross margin of 75%
· Increase the non-IFRS operating margin by one percentage point per year on average, representing a total expansion of approximately 500 basis points
SAP Quarterly Statement Q3 2019 |
Additional Information
This Quarterly Statement and all information therein is unaudited.
Definition of key growth metrics
New cloud bookings are the total of all orders received in a given period the revenue from which is expected to be classified as cloud 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).
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
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 license are not included in the software license order entry metric.
Global commerce is the total commerce volume transacted on the SAP Ariba, SAP Concur and SAP Fieldglass Networks in the trailing 12 months. SAP Ariba commerce includes procurement and sourcing spend.
For explanations on other key growth metrics please refer the performance management section of SAP’s Integrated Report 2018, which can be found at www.sapintegratedreport.com.
Webcast
SAP senior management will host a financial analyst conference call today 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 third quarter results can be found at www.sap.com/investor.
Special Capital Markets Day
SAP will host a Special Capital Markets Day on November 12, 2019 in New York City.
About SAP
As the Experience Company powered by the Intelligent Enterprise, SAP is the market leader in enterprise application software, helping companies of all sizes and in all industries run at their best: 77% of the world’s transaction revenue touches an SAP system. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. SAP helps 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 more than 437,000 business and public customers 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 www.sap.com.
For more information, financial community only:
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Follow SAP Investor Relations on Twitter at @sapinvestor. |
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For customers interested in learning more about SAP products:
Global Customer Center: | +49 180 534-34-24 |
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United States Only: | +1 (800) 872-1SAP (+1-800-872-1727) |
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SAP Quarterly Statement Q3 2019 |
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.
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SAP Quarterly Statement Q3 2019 |
Contents
Financial and Non-Financial Key Facts (IFRS and Non-IFRS) | 10 | ||
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Primary Financial Statements of SAP Group (IFRS) | 12 | ||
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(A) | Consolidated Income Statements | 12 | |
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| (A.1) | Consolidated Income Statements – Quarter | 12 |
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| (A.2) | Consolidated Income Statements – Year-to-Date | 13 |
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(B) | Consolidated Statements of Financial Position | 14 | |
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(C) | Consolidated Statements of Cash Flows | 15 | |
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Non-IFRS Numbers | 16 | ||
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(D) | Basis of Non-IFRS Presentation | 16 | |
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(E) | Reconciliation from Non-IFRS Numbers to IFRS Numbers | 17 | |
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| (E.1) | Reconciliation from Non-IFRS Numbers to IFRS Numbers – Quarter | 17 |
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| (E.2) | Reconciliation from Non-IFRS Numbers to IFRS Numbers – Year-to-Date | 18 |
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(F) | Non-IFRS Adjustments – Actuals and Estimates | 19 | |
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(G) | Non-IFRS Adjustments by Functional Areas | 19 | |
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Disaggregations | 21 | ||
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(H) | Segment Reporting | 21 | |
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| (H.1) | Segment Policies and Segment Changes | 21 |
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| (H.2) | Segment Reporting – Quarter | 22 |
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| (H.3) | Segment Reporting – Year-to-Date | 26 |
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(I) | Revenue by Region (IFRS and Non-IFRS) | 30 | |
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| (I.1) | Revenue by Region (IFRS and Non-IFRS) – Quarter | 30 |
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| (I.2) | Revenue by Region (IFRS and Non-IFRS) – Year-to-Date | 31 |
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(J) | Employees by Region and Functional Areas | 32 | |
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Other Disclosures | 33 | ||
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(K) | Accounting Policy Changes | 33 | |
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| (K.1) | Adoption of IFRS 16 | 33 |
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(L) | Impact of Hyperinflation | 33 | |
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(M) | Business Combinations and Divestments | 33 | |
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| (M.1) | Business Combinations | 33 |
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| (M.2) | Divestments | 34 |
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(N) | Miscellaneous Disclosures | 34 | |
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| (N.1) | Changes in Estimates | 34 |
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| (N.2) | Financial Income, Net | 34 |
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| (N.3) | Financial Instruments | 34 |
SAP Quarterly Statement Q3 2019 |
Financial and Non-Financial Key Facts
(IFRS and Non-IFRS)
€ millions, unless otherwise stated |
| Q1 |
| Q2 |
| Q3 |
| Q4 |
| TY |
| Q1 |
| Q2 |
| Q3 |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud (IFRS) |
| 1,070 |
| 1,213 |
| 1,304 |
| 1,406 |
| 4,993 |
| 1,555 |
| 1,692 |
| 1,789 |
Cloud (non-IFRS) |
| 1,072 |
| 1,227 |
| 1,315 |
| 1,413 |
| 5,027 |
| 1,581 |
| 1,717 |
| 1,807 |
% change – yoy |
| 18 |
| 32 |
| 40 |
| 42 |
| 33 |
| 48 |
| 40 |
| 37 |
% change constant currency – yoy |
| 31 |
| 40 |
| 41 |
| 40 |
| 38 |
| 41 |
| 35 |
| 33 |
Software licenses (IFRS) |
| 625 |
| 996 |
| 937 |
| 2,089 |
| 4,647 |
| 650 |
| 948 |
| 932 |
Software licenses (non-IFRS) |
| 625 |
| 996 |
| 937 |
| 2,089 |
| 4,647 |
| 650 |
| 948 |
| 932 |
% change – yoy |
| –10 |
| –9 |
| –9 |
| 1 |
| –5 |
| 4 |
| –5 |
| –1 |
% change constant currency – yoy |
| –2 |
| –5 |
| –8 |
| 8 |
| 0 |
| 1 |
| –6 |
| –4 |
Software support (IFRS) |
| 2,656 |
| 2,735 |
| 2,765 |
| 2,825 |
| 10,981 |
| 2,838 |
| 2,854 |
| 2,907 |
Software support (non-IFRS) |
| 2,656 |
| 2,735 |
| 2,765 |
| 2,826 |
| 10,982 |
| 2,838 |
| 2,854 |
| 2,907 |
% change – yoy |
| –3 |
| 0 |
| 3 |
| 3 |
| 1 |
| 7 |
| 4 |
| 5 |
% change constant currency – yoy |
| 5 |
| 7 |
| 6 |
| 3 |
| 5 |
| 4 |
| 2 |
| 3 |
Software licenses and support (IFRS) |
| 3,281 |
| 3,731 |
| 3,702 |
| 4,914 |
| 15,628 |
| 3,489 |
| 3,802 |
| 3,839 |
Software licenses and support (non-IFRS) |
| 3,281 |
| 3,731 |
| 3,702 |
| 4,914 |
| 15,629 |
| 3,489 |
| 3,802 |
| 3,840 |
% change – yoy |
| –4 |
| –2 |
| 0 |
| 2 |
| –1 |
| 6 |
| 2 |
| 4 |
% change constant currency – yoy |
| 4 |
| 3 |
| 2 |
| 5 |
| 4 |
| 3 |
| 0 |
| 1 |
Cloud and software (IFRS) |
| 4,351 |
| 4,944 |
| 5,007 |
| 6,320 |
| 20,622 |
| 5,044 |
| 5,495 |
| 5,629 |
Cloud and software (non-IFRS) |
| 4,353 |
| 4,958 |
| 5,017 |
| 6,327 |
| 20,655 |
| 5,070 |
| 5,520 |
| 5,647 |
% change – yoy |
| 1 |
| 4 |
| 8 |
| 9 |
| 6 |
| 16 |
| 11 |
| 13 |
% change constant currency – yoy |
| 9 |
| 10 |
| 10 |
| 11 |
| 10 |
| 12 |
| 8 |
| 10 |
Total revenue (IFRS) |
| 5,261 |
| 5,999 |
| 6,020 |
| 7,428 |
| 24,708 |
| 6,091 |
| 6,631 |
| 6,791 |
Total revenue (non-IFRS) |
| 5,262 |
| 6,014 |
| 6,031 |
| 7,434 |
| 24,741 |
| 6,118 |
| 6,656 |
| 6,809 |
% change – yoy |
| 0 |
| 4 |
| 8 |
| 9 |
| 5 |
| 16 |
| 11 |
| 13 |
% change constant currency – yoy |
| 9 |
| 10 |
| 10 |
| 13 |
| 11 |
| 12 |
| 8 |
| 10 |
Share of more predictable revenue (IFRS, in %) |
| 71 |
| 66 |
| 68 |
| 57 |
| 65 |
| 72 |
| 69 |
| 69 |
Share of more predictable revenue (non-IFRS, in %) |
| 71 |
| 66 |
| 68 |
| 57 |
| 65 |
| 72 |
| 69 |
| 69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit (loss) (IFRS) |
| 1,025 |
| 1,044 |
| 1,236 |
| 2,399 |
| 5,703 |
| –136 |
| 827 |
| 1,679 |
Operating profit (loss) (non-IFRS) |
| 1,235 |
| 1,640 |
| 1,742 |
| 2,545 |
| 7,163 |
| 1,467 |
| 1,816 |
| 2,086 |
% change |
| 3 |
| 4 |
| 6 |
| 8 |
| 6 |
| 19 |
| 11 |
| 20 |
% change constant currency |
| 14 |
| 12 |
| 11 |
| 8 |
| 10 |
| 13 |
| 8 |
| 15 |
Profit (loss) after tax (IFRS) |
| 708 |
| 718 |
| 972 |
| 1,691 |
| 4,088 |
| –108 |
| 582 |
| 1,259 |
Profit (loss) after tax (non-IFRS) |
| 868 |
| 1,171 |
| 1,358 |
| 1,802 |
| 5,199 |
| 1,080 |
| 1,317 |
| 1,564 |
% change |
| –2 |
| 5 |
| 12 |
| –16 |
| –3 |
| 25 |
| 12 |
| 15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margins |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud gross margin (IFRS, in %) |
| 59.3 |
| 58.3 |
| 58.6 |
| 58.2 |
| 58.6 |
| 61.2 |
| 62.6 |
| 64.5 |
Cloud gross margin (non-IFRS, in %) |
| 63.2 |
| 63.6 |
| 63.5 |
| 62.1 |
| 63.1 |
| 66.2 |
| 67.9 |
| 69.0 |
Software license and support gross margin (IFRS, in %) |
| 85.7 |
| 85.8 |
| 86.0 |
| 88.3 |
| 86.6 |
| 84.6 |
| 86.0 |
| 87.0 |
Software license and support gross margin (non-IFRS, in %) |
| 86.4 |
| 87.0 |
| 87.1 |
| 88.7 |
| 87.4 |
| 85.7 |
| 87.1 |
| 87.6 |
Cloud and software gross margin (IFRS, in %) |
| 79.2 |
| 79.0 |
| 78.9 |
| 81.6 |
| 79.8 |
| 77.4 |
| 78.8 |
| 79.9 |
Cloud and software gross margin (non-IFRS, in %) |
| 80.7 |
| 81.2 |
| 80.9 |
| 82.8 |
| 81.5 |
| 79.6 |
| 81.1 |
| 81.7 |
Gross margin (IFRS, in %) |
| 68.5 |
| 68.6 |
| 68.3 |
| 72.9 |
| 69.8 |
| 66.5 |
| 68.2 |
| 70.3 |
Gross margin (non-IFRS, in %) |
| 70.2 |
| 71.5 |
| 71.0 |
| 74.0 |
| 71.8 |
| 69.5 |
| 71.4 |
| 72.3 |
Operating margin (IFRS, in %) |
| 19.5 |
| 17.4 |
| 20.5 |
| 32.3 |
| 23.1 |
| –2.2 |
| 12.5 |
| 24.7 |
Operating margin (non-IFRS, in %) |
| 23.5 |
| 27.3 |
| 28.9 |
| 34.2 |
| 29.0 |
| 24.0 |
| 27.3 |
| 30.6 |
AT&S segment – Cloud gross margin (in %) |
| 49.1 |
| 48.8 |
| 48.1 |
| 46.9 |
| 48.2 |
| 53.2 |
| 55.9 |
| 57.8 |
AT&S segment – Segment gross margin (in %) |
| 71.2 |
| 72.6 |
| 72.4 |
| 75.2 |
| 73.1 |
| 70.1 |
| 72.5 |
| 73.7 |
AT&S segment – Segment margin (in %) |
| 36.6 |
| 41.3 |
| 41.9 |
| 46.9 |
| 42.1 |
| 36.4 |
| 42.4 |
| 44.9 |
ISG segment – Cloud gross margin (in %) |
| 77.4 |
| 77.4 |
| 78.4 |
| 78.0 |
| 77.8 |
| 78.0 |
| 78.2 |
| 78.0 |
ISG segment – Segment gross margin (in %) |
| 68.7 |
| 69.3 |
| 69.1 |
| 69.2 |
| 69.1 |
| 69.2 |
| 69.7 |
| 69.9 |
SAP Quarterly Statement Q3 2019 |
€ millions, unless otherwise stated |
| Q1 |
| Q2 |
| Q3 |
| Q4 |
| TY |
| Q1 |
| Q2 |
| Q3 |
ISG segment – Segment margin (in %) |
| 16.7 |
| 20.3 |
| 23.0 |
| 20.4 |
| 20.2 |
| 21.6 |
| 19.6 |
| 25.5 |
CXM segment – Cloud gross margin (in %) |
| 65.4 |
| 68.7 |
| 67.6 |
| 63.1 |
| 66.2 |
| 74.9 |
| 76.6 |
| 76.4 |
CXM segment – Segment gross margin (in %) |
| 75.8 |
| 77.5 |
| 75.0 |
| 79.7 |
| 77.4 |
| 75.3 |
| 75.2 |
| 74.1 |
CXM segment – Segment margin (in %) |
| –7.0 |
| 1.6 |
| 5.5 |
| 24.2 |
| 9.4 |
| –2.5 |
| –1.1 |
| 0.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Profit Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate (IFRS, in %) |
| 28.3 |
| 29.5 |
| 24.1 |
| 26.9 |
| 27.0 |
| 23.2 |
| 28.6 |
| 26.1 |
Effective tax rate (non-IFRS, in %) |
| 27.6 |
| 27.5 |
| 24.0 |
| 26.7 |
| 26.3 |
| 26.1 |
| 27.0 |
| 25.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share, basic (IFRS, in €) |
| 0.59 |
| 0.60 |
| 0.81 |
| 1.41 |
| 3.42 |
| –0.10 |
| 0.48 |
| 1.04 |
Earnings per share, basic (non-IFRS, in €) |
| 0.73 |
| 0.98 |
| 1.14 |
| 1.51 |
| 4.35 |
| 0.90 |
| 1.09 |
| 1.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Order Entry |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New cloud and software order entry |
| 1,346 |
| 2,332 |
| 2,221 |
| 4,533 |
| 10,432 |
| 1,579 |
| 2,404 |
| 2,656 |
% change – yoy |
| 1 |
| 8 |
| 11 |
| 15 |
| 11 |
| 17 |
| 3 |
| 20 |
% change constant currency – yoy |
| 10 |
| 12 |
| 12 |
| 18 |
| 14 |
| 13 |
| 1 |
| 15 |
New cloud bookings |
| 245 |
| 421 |
| 411 |
| 736 |
| 1,814 |
| 324 |
| 494 |
| 572 |
% change – yoy |
| 14 |
| 24 |
| 36 |
| 25 |
| 25 |
| 32 |
| 17 |
| 39 |
% change constant currency – yoy |
| 25 |
| 29 |
| 37 |
| 23 |
| 28 |
| 26 |
| 15 |
| 34 |
Orders – number of cloud deals (in transactions) |
| 2,376 |
| 3,032 |
| 3,375 |
| 6,055 |
| 14,839 |
| 2,956 |
| 3,609 |
| 3,718 |
Share of cloud orders greater than €5 million based on total cloud order entry volume (in %) |
| 20 |
| 32 |
| 28 |
| 33 |
| 30 |
| 26 |
| 26 |
| 29 |
Share of cloud orders smaller than €1 million based on total cloud order entry volume (in %) |
| 39 |
| 31 |
| 35 |
| 28 |
| 32 |
| 39 |
| 33 |
| 33 |
Orders – number of on-premise software deals (in transactions) |
| 13,549 |
| 14,538 |
| 13,794 |
| 16,649 |
| 58,530 |
| 12,229 |
| 12,522 |
| 12,270 |
Share of orders greater than €5 million based on total software order entry volume (in %) |
| 18 |
| 29 |
| 22 |
| 35 |
| 29 |
| 28 |
| 28 |
| 31 |
Share of orders smaller than €1 million based on total software order entry volume (in %) |
| 50 |
| 41 |
| 42 |
| 33 |
| 39 |
| 42 |
| 36 |
| 39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity and Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from operating activities |
| 2,578 |
| 407 |
| 499 |
| 819 |
| 4,303 |
| 2,802 |
| –122 |
| 638 |
Capital expenditure |
| –427 |
| –391 |
| –328 |
| –312 |
| –1,458 |
| –359 |
| –180 |
| –164 |
Payments of lease liabilities |
| NA |
| NA |
| NA |
| NA |
| NA |
| –78 |
| –106 |
| –104 |
Free cash flow |
| 2,151 |
| 16 |
| 171 |
| 506 |
| 2,844 |
| 2,365 |
| –409 |
| 370 |
% of total revenue (IFRS) |
| 41 |
| 0 |
| 3 |
| 7 |
| 12 |
| 39 |
| –6 |
| 5 |
% of profit after tax (IFRS) |
| 304 |
| 2 |
| 18 |
| 30 |
| 70 |
| –2,198 |
| –70 |
| 29 |
Group liquidity, gross |
| 8,270 |
| 4,688 |
| 4,738 |
| 8,838 |
| 8,838 |
| 7,673 |
| 5,280 |
| 5,597 |
Group debt |
| –7,723 |
| –7,660 |
| –7,521 |
| –11,331 |
| –11,331 |
| –13,866 |
| –13,833 |
| –13,874 |
Group liquidity, net |
| 546 |
| –2,972 |
| –2,784 |
| –2,493 |
| –2,493 |
| –6,193 |
| –8,553 |
| –8,277 |
Days sales outstanding (DSO, in days)1) |
| 68 |
| 68 |
| 68 |
| 70 |
| 70 |
| 69 |
| 70 |
| 71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Position |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| 7,598 |
| 4,516 |
| 4,507 |
| 8,627 |
| 8,627 |
| 7,332 |
| 5,168 |
| 5,525 |
Goodwill |
| 20,856 |
| 23,406 |
| 23,523 |
| 23,736 |
| 23,736 |
| 29,091 |
| 28,784 |
| 29,833 |
Total assets |
| 45,463 |
| 45,491 |
| 45,631 |
| 51,502 |
| 51,502 |
| 60,700 |
| 57,716 |
| 59,800 |
Contract liabilities (current) |
| 5,046 |
| 4,867 |
| 3,600 |
| 3,028 |
| 3,028 |
| 6,068 |
| 5,558 |
| 4,400 |
Equity ratio (total equity in % of total assets) |
| 56 |
| 57 |
| 59 |
| 56 |
| 56 |
| 48 |
| 48 |
| 51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Financials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of employees (quarter end)2) |
| 91,120 |
| 93,846 |
| 94,989 |
| 96,498 |
| 96,498 |
| 98,659 |
| 98,332 |
| 99,710 |
Employee retention (in %, rolling 12 months) |
| 94.4 |
| 94.3 |
| 94.1 |
| 93.9 |
| 93.9 |
| 93.8 |
| 93.5 |
| 93.3 |
Women in management (in %, quarter end) |
| 25.6 |
| 25.8 |
| 25.9 |
| 25.7 |
| 25.7 |
| 26.0 |
| 26.2 |
| 26.3 |
Greenhouse gas emissions (in kilotons) |
| 100 |
| 75 |
| 65 |
| 70 |
| 310 |
| 110 |
| 75 |
| 65 |
1) Days sales outstanding measures the average number of days from the raised invoice to cash receipt from the customer. We calculate DSO by dividing the average invoiced trade receivables balance of the last 12 months by the average monthly cash receipt of the last 12 months.
2) In full-time equivalents.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
Primary Financial Statements of SAP Group (IFRS)
(A) Consolidated Income Statements
(A.1) Consolidated Income Statements – Quarter
€ millions, unless otherwise stated |
| Q3 2019 | Q3 2018 | D in % |
Cloud |
| 1,789 | 1,304 | 37 |
Software licenses |
| 932 | 937 | –1 |
Software support |
| 2,907 | 2,765 | 5 |
Software licenses and support |
| 3,839 | 3,702 | 4 |
Cloud and software |
| 5,629 | 5,007 | 12 |
Services |
| 1,162 | 1,014 | 15 |
Total revenue |
| 6,791 | 6,020 | 13 |
|
|
|
|
|
Cost of cloud |
| –635 | –540 | 18 |
Cost of software licenses and support |
| –499 | –517 | –4 |
Cost of cloud and software |
| –1,134 | –1,057 | 7 |
Cost of services |
| –884 | –851 | 4 |
Total cost of revenue |
| –2,017 | –1,908 | 6 |
Gross profit |
| 4,773 | 4,112 | 16 |
Research and development |
| –975 | –918 | 6 |
Sales and marketing |
| –1,774 | –1,673 | 6 |
General and administration |
| –323 | –284 | 14 |
Restructuring |
| –15 | –4 | >100 |
Other operating income/expense, net |
| –7 | 2 | <-100 |
Total operating expenses |
| –5,111 | –4,784 | 7 |
Operating profit (loss) |
| 1,679 | 1,236 | 36 |
|
|
|
|
|
Other non-operating income/expense, net |
| –19 | 33 | <-100 |
Finance income |
| 253 | 84 | >100 |
Finance costs |
| –211 | –71 | >100 |
Financial income, net |
| 42 | 12 | >100 |
Profit (loss) before tax |
| 1,702 | 1,280 | 33 |
|
|
|
|
|
Income tax expense |
| –443 | –309 | 44 |
Profit (loss) after tax |
| 1,259 | 972 | 30 |
Attributable to owners of parent |
| 1,246 | 971 | 28 |
Attributable to non-controlling interests |
| 13 | 1 | >100 |
|
|
|
|
|
Earnings per share, basic (in €)1) |
| 1.04 | 0.81 | 28 |
Earnings per share, diluted (in €)1) |
| 1.04 | 0.81 | 28 |
1) For the three months ended September 30, 2019 and 2018, the weighted average number of shares was 1,194 million (diluted 1,194 million) and 1,194 million (diluted: 1,194 million), respectively (treasury stock excluded).
2) In 2019, we renamed “cloud subscription and support” revenue and “cost of cloud subscription and support” to “cloud” revenue and “cost of cloud” without changing the content of these line items.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
(A.2) Consolidated Income Statements – Year-to-Date
€ millions, unless otherwise stated |
| Q1–Q3 | Q1–Q3 | D in % |
Cloud |
| 5,037 | 3,588 | 40 |
Software licenses |
| 2,531 | 2,558 | –1 |
Software support |
| 8,599 | 8,156 | 5 |
Software licenses and support |
| 11,130 | 10,714 | 4 |
Cloud and software |
| 16,167 | 14,302 | 13 |
Services |
| 3,346 | 2,979 | 12 |
Total revenue |
| 19,513 | 17,280 | 13 |
|
|
|
|
|
Cost of cloud |
| –1,872 | –1,481 | 26 |
Cost of software licenses and support |
| –1,568 | –1,518 | 3 |
Cost of cloud and software |
| –3,439 | –2,999 | 15 |
Cost of services |
| –2,729 | –2,451 | 11 |
Total cost of revenue |
| –6,169 | –5,450 | 13 |
Gross profit |
| 13,344 | 11,831 | 13 |
Research and development |
| –3,089 | –2,680 | 15 |
Sales and marketing |
| –5,607 | –4,986 | 12 |
General and administration |
| –1,218 | –832 | 47 |
Restructuring |
| –1,100 | –26 | >100 |
Other operating income/expense, net |
| 41 | –3 | <-100 |
Total operating expenses |
| –17,142 | –13,976 | 23 |
Operating profit (loss) |
| 2,370 | 3,304 | –28 |
|
|
|
|
|
Other non-operating income/expense, net |
| –63 | –58 | 9 |
Finance income |
| 539 | 269 | >100 |
Finance costs |
| –469 | –229 | >100 |
Financial income, net |
| 70 | 40 | 77 |
Profit (loss) before tax |
| 2,377 | 3,286 | –28 |
|
|
|
|
|
Income tax expense |
| –644 | –889 | –28 |
Profit (loss) after tax |
| 1,733 | 2,397 | –28 |
Attributable to owners of parent |
| 1,701 | 2,396 | –29 |
Attributable to non-controlling interests |
| 32 | 1 | >100 |
|
|
|
|
|
Earnings per share, basic (in €)1) |
| 1.43 | 2.01 | –29 |
Earnings per share, diluted (in €)1) |
| 1.43 | 2.01 | –29 |
1) For the nine months ended September 30, 2019 and 2018, the weighted average number of shares was 1,194 million (diluted: 1,194 million) and 1,194 million (diluted: 1,194 million), respectively (treasury stock excluded).
2) In 2019, we renamed “cloud subscription and support” revenue and “cost of cloud subscription and support” to “cloud” revenue and “cost of cloud”, respectively, without changing the content of these line items.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
(B) Consolidated Statements of Financial Position
as at 09/30/2019 and 12/31/2018 | |||
€ millions |
| 2019 | 20181) |
Cash and cash equivalents |
| 5,525 | 8,627 |
Other financial assets |
| 328 | 448 |
Trade and other receivables |
| 5,846 | 6,362 |
Other non-financial assets |
| 1,306 | 889 |
Tax assets |
| 1,079 | 293 |
Total current assets |
| 14,085 | 16,620 |
Goodwill |
| 29,833 | 23,736 |
Intangible assets |
| 4,736 | 3,227 |
Property, plant, and equipment |
| 5,449 | 3,553 |
Other financial assets |
| 2,443 | 1,536 |
Trade and other receivables |
| 131 | 118 |
Other non-financial assets |
| 1,539 | 1,301 |
Tax assets |
| 379 | 397 |
Deferred tax assets |
| 1,205 | 1,014 |
Total non-current assets |
| 45,715 | 34,881 |
Total assets |
| 59,800 | 51,502 |
| |||
€ millions |
| 2019 | 20181) |
Trade and other payables |
| 1,510 | 1,491 |
Tax liabilities |
| 462 | 611 |
Financial liabilities |
| 2,791 | 1,125 |
Other non-financial liabilities |
| 3,852 | 4,120 |
Provisions |
| 869 | 110 |
Contract liabilities |
| 4,400 | 3,028 |
Total current liabilities |
| 13,884 | 10,486 |
Trade and other payables |
| 13 | 129 |
Tax liabilities |
| 580 | 495 |
Financial liabilities |
| 13,649 | 10,553 |
Other non-financial liabilities |
| 725 | 501 |
Provisions |
| 321 | 270 |
Deferred tax liabilities |
| 306 | 102 |
Contract liabilities |
| 93 | 88 |
Total non-current liabilities |
| 15,687 | 12,138 |
Total liabilities |
| 29,571 | 22,624 |
Issued capital |
| 1,229 | 1,229 |
Share premium |
| 546 | 543 |
Retained earnings |
| 27,215 | 27,407 |
Other components of equity |
| 2,750 | 1,234 |
Treasury shares |
| –1,580 | –1,580 |
Equity attributable to owners of parent |
| 30,159 | 28,832 |
|
|
|
|
Non-controlling interests |
| 69 | 45 |
Total equity |
| 30,228 | 28,877 |
Total equity and liabilities |
| 59,800 | 51,502 |
1) Under the adoption method we chose for IFRS 16, prior years are not restated to conform to the new policies. See section (K) Accounting Policy Changes in this Quarterly Statement.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
(C) Consolidated Statements of Cash Flows
€ millions | Q1–Q3 2019 | Q1–Q3 20181) |
Profit (loss) after tax | 1,733 | 2,397 |
Adjustments to reconcile profit (loss) after tax to net cash flows from operating activities: |
|
|
Depreciation and amortization | 1,371 | 986 |
Share-based payment expense | 1,313 | 838 |
Income tax expense | 644 | 889 |
Financial income, net | –70 | –40 |
Decrease/increase in allowances on trade receivables | –3 | –59 |
Other adjustments for non-cash items | –55 | 3 |
Decrease/increase in trade and other receivables | 668 | 1,522 |
Decrease/increase in other assets | –672 | –514 |
Increase/decrease in trade payables, provisions, and other liabilities | 208 | –547 |
Increase/decrease in contract liabilities | 1,059 | 86 |
Share-based payments | –1,058 | –853 |
Interest paid | –228 | –123 |
Interest received | 74 | 75 |
Income taxes paid, net of refunds | –1,667 | –1,177 |
Net cash flows from operating activities | 3,317 | 3,484 |
Business combinations, net of cash and cash equivalents acquired | –6,186 | –2,017 |
Proceeds from sales of subsidiaries or other businesses | 61 | 0 |
Purchase of intangible assets or property, plant, and equipment | –703 | –1,146 |
Proceeds from sales of intangible assets or property, plant, and equipment | 52 | 54 |
Purchase of equity or debt instruments of other entities | –774 | –810 |
Proceeds from sales of equity or debt instruments of other entities | 564 | 1,309 |
Net cash flows from investing activities | –6,985 | –2,609 |
Dividends paid | –1,790 | –1,671 |
Dividends paid on non-controlling interests | –6 | –6 |
Proceeds from borrowings | 3,023 | 1,833 |
Repayments of borrowings | –546 | –626 |
Payments of lease liabilities | –288 | 0 |
Net cash flows from financing activities | 393 | –470 |
Effect of foreign currency rates on cash and cash equivalents | 174 | 91 |
Net decrease/increase in cash and cash equivalents | –3,102 | 496 |
Cash and cash equivalents at the beginning of the period | 8,627 | 4,011 |
Cash and cash equivalents at the end of the period | 5,525 | 4,507 |
1) Under the adoption method we chose for IFRS 16, prior years are not restated to conform to the new policies. See the Notes to the Consolidated Half-Year Financial Statements, Note (D.3).
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
Non-IFRS Numbers
(D) Basis of Non-IFRS Presentation
We disclose certain financial measures such as revenue (non-IFRS), expense (non-IFRS), and profit measures (non-IFRS) that are not prepared in accordance with IFRS and are therefore considered non-IFRS financial measures.
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.
SAP Quarterly Statement Q3 2019 |
(E) Reconciliation from Non-IFRS Numbers to IFRS Numbers
(E.1) Reconciliation from Non-IFRS Numbers to IFRS Numbers – Quarter
€ millions, unless otherwise stated | Q3 2019 | Q3 2018 | ∆ in % | ||||||||
IFRS | Adj. | Non- | Currency | Non-IFRS | IFRS | Adj. | Non- | IFRS | Non- | Non-IFRS | |
Revenue Numbers |
|
|
|
|
|
|
|
|
|
|
|
Cloud | 1,789 | 18 | 1,807 | –55 | 1,752 | 1,304 | 10 | 1,315 | 37 | 37 | 33 |
Software licenses | 932 | 0 | 932 | –32 | 900 | 937 | 0 | 937 | –1 | –1 | –4 |
Software support | 2,907 | 0 | 2,907 | –66 | 2,842 | 2,765 | 0 | 2,765 | 5 | 5 | 3 |
Software licenses and support | 3,839 | 0 | 3,840 | –97 | 3,742 | 3,702 | 0 | 3,702 | 4 | 4 | 1 |
Cloud and software | 5,629 | 18 | 5,647 | –153 | 5,494 | 5,007 | 11 | 5,017 | 12 | 13 | 10 |
Services | 1,162 | 0 | 1,162 | –32 | 1,130 | 1,014 | 0 | 1,014 | 15 | 15 | 11 |
Total revenue | 6,791 | 18 | 6,809 | –185 | 6,624 | 6,020 | 11 | 6,031 | 13 | 13 | 10 |
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Operating Expense Numbers |
|
|
|
|
|
|
|
|
|
|
|
Cost of cloud | –635 | 74 | –561 |
|
| –540 | 61 | –479 | 18 | 17 |
|
Cost of software licenses and support | –499 | 24 | –475 |
|
| –517 | 41 | –476 | –4 | 0 |
|
Cost of cloud and software | –1,134 | 97 | –1,036 |
|
| –1,057 | 101 | –956 | 7 | 8 |
|
Cost of services | –884 | 34 | –849 |
|
| –851 | 59 | –792 | 4 | 7 |
|
Total cost of revenue | –2,017 | 132 | –1,886 |
|
| –1,908 | 160 | –1,747 | 6 | 8 |
|
Gross profit | 4,773 | 150 | 4,924 |
|
| 4,112 | 171 | 4,283 | 16 | 15 |
|
Research and development | –975 | 51 | –923 |
|
| –918 | 91 | –828 | 6 | 12 |
|
Sales and marketing | –1,774 | 153 | –1,621 |
|
| –1,673 | 201 | –1,471 | 6 | 10 |
|
General and administration | –323 | 36 | –287 |
|
| –284 | 39 | –245 | 14 | 17 |
|
Restructuring | –15 | 15 | 0 |
|
| –4 | 4 | 0 | >100 | NA |
|
Other operating income/expense, net | –7 | 0 | –7 |
|
| 2 | 0 | 2 | <-100 | <-100 |
|
Total operating expenses | –5,111 | 388 | –4,724 | 111 | –4,613 | –4,784 | 496 | –4,289 | 7 | 10 | 8 |
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Profit Numbers |
|
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Operating profit (loss) | 1,679 | 406 | 2,086 | –74 | 2,011 | 1,236 | 506 | 1,742 | 36 | 20 | 15 |
Other non-operating income/expense, net | –19 | 0 | –19 |
|
| 33 | 0 | 33 | <-100 | <-100 |
|
Finance income | 253 | 0 | 253 |
|
| 84 | 0 | 84 | >100 | >100 |
|
Finance costs | –211 | 0 | –211 |
|
| –71 | 0 | –71 | >100 | >100 |
|
Financial income, net | 42 | 0 | 42 |
|
| 12 | 0 | 12 | >100 | >100 |
|
Profit (loss) before tax | 1,702 | 406 | 2,108 |
|
| 1,280 | 506 | 1,786 | 33 | 18 |
|
Income tax expense | –443 | –101 | –544 |
|
| –309 | –119 | –428 | 44 | 27 |
|
Profit (loss) after tax | 1,259 | 305 | 1,564 |
|
| 972 | 387 | 1,358 | 30 | 15 |
|
Attributable to owners of parent | 1,246 | 305 | 1,552 |
|
| 971 | 387 | 1,358 | 28 | 14 |
|
Attributable to non-controlling interests | 13 | 0 | 13 |
|
| 1 | 0 | 1 | >100 | >100 |
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Key Ratios |
|
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|
Operating margin (in %) | 24.7 |
| 30.6 |
| 30.4 | 20.5 |
| 28.9 | 4.2pp | 1.7pp | 1.5pp |
Effective tax rate (in %)2) | 26.1 |
| 25.8 |
|
| 24.1 |
| 24.0 | 1.9pp | 1.8pp |
|
Earnings per share, basic (in €) | 1.04 |
| 1.30 |
|
| 0.81 |
| 1.14 | 28 | 14 |
|
1) 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.
2) The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q3 2019 and Q3 2018 mainly resulted from tax effects of share-based payment expenses and acquisition-related charges.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
(E.2) Reconciliation from Non-IFRS Numbers to IFRS Numbers – Year-to-Date
€ millions, unless otherwise stated | Q1–Q3 2019 | Q1–Q3 2018 | ∆ in % | ||||||||
IFRS | Adj. | Non- | Currency | Non-IFRS | IFRS | Adj. | Non- | IFRS | Non- | Non-IFRS | |
Revenue Numbers |
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Cloud | 5,037 | 69 | 5,106 | –194 | 4,912 | 3,588 | 26 | 3,614 | 40 | 41 | 36 |
Software licenses | 2,531 | 0 | 2,531 | –65 | 2,466 | 2,558 | 0 | 2,558 | –1 | –1 | –4 |
Software support | 8,599 | 0 | 8,599 | –209 | 8,390 | 8,156 | 0 | 8,156 | 5 | 5 | 3 |
Software licenses and support | 11,130 | 0 | 11,130 | –274 | 10,856 | 10,714 | 0 | 10,714 | 4 | 4 | 1 |
Cloud and software | 16,167 | 70 | 16,236 | –468 | 15,768 | 14,302 | 27 | 14,328 | 13 | 13 | 10 |
Services | 3,346 | 0 | 3,346 | –102 | 3,244 | 2,979 | 0 | 2,979 | 12 | 12 | 9 |
Total revenue | 19,513 | 70 | 19,583 | –570 | 19,013 | 17,280 | 27 | 17,307 | 13 | 13 | 10 |
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Operating Expense Numbers |
|
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|
|
Cost of cloud | –1,872 | 225 | –1,647 |
|
| –1,481 | 161 | –1,320 | 26 | 25 |
|
Cost of software licenses and support | –1,568 | 103 | –1,465 |
|
| –1,518 | 112 | –1,406 | 3 | 4 |
|
Cost of cloud and software | –3,439 | 328 | –3,111 |
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| –2,999 | 273 | –2,726 | 15 | 14 |
|
Cost of services | –2,729 | 181 | –2,548 |
|
| –2,451 | 145 | –2,306 | 11 | 11 |
|
Total cost of revenue | –6,169 | 509 | –5,660 |
|
| –5,450 | 417 | –5,032 | 13 | 12 |
|
Gross profit | 13,344 | 579 | 13,923 |
|
| 11,831 | 444 | 12,275 | 13 | 13 |
|
Research and development | –3,089 | 308 | –2,781 |
|
| –2,680 | 217 | –2,462 | 15 | 13 |
|
Sales and marketing | –5,607 | 649 | –4,958 |
|
| –4,986 | 520 | –4,466 | 12 | 11 |
|
General and administration | –1,218 | 362 | –857 |
|
| –832 | 106 | –725 | 47 | 18 |
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Restructuring | –1,100 | 1,100 | 0 |
|
| –26 | 26 | 0 | >100 | NA |
|
Other operating income/expense, net | 41 | 0 | 41 |
|
| –3 | 0 | –3 | <-100 | <-100 |
|
Total operating expenses | –17,142 | 2,928 | –14,214 | 378 | –13,836 | –13,976 | 1,286 | –12,690 | 23 | 12 | 9 |
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Profit Numbers |
|
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Operating profit (loss) | 2,370 | 2,998 | 5,368 | –192 | 5,177 | 3,304 | 1,313 | 4,618 | –28 | 16 | 12 |
Other non-operating income/expense, net | –63 | 0 | –63 |
|
| –58 | 0 | –58 | 9 | 9 |
|
Finance income | 539 | 0 | 539 |
|
| 269 | 0 | 269 | >100 | >100 |
|
Finance costs | –469 | 0 | –469 |
|
| –229 | 0 | –229 | >100 | >100 |
|
Financial income, net | 70 | 0 | 70 |
|
| 40 | 0 | 40 | 77 | 77 |
|
Profit (loss) before tax | 2,377 | 2,998 | 5,375 |
|
| 3,286 | 1,313 | 4,599 | –28 | 17 |
|
Income tax expense | –644 | –770 | –1,414 |
|
| –889 | –313 | –1,202 | –28 | 18 |
|
Profit (loss) after tax | 1,733 | 2,228 | 3,961 |
|
| 2,397 | 1,000 | 3,397 | –28 | 17 |
|
Attributable to owners of parent | 1,701 | 2,228 | 3,929 |
|
| 2,396 | 1,000 | 3,396 | –29 | 16 |
|
Attributable to non-controlling interests | 32 | 0 | 32 |
|
| 1 | 0 | 1 | >100 | >100 |
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Key Ratios |
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|
Operating margin (in %) | 12.1 |
| 27.4 |
| 27.2 | 19.1 |
| 26.7 | –7.0pp | 0.7pp | 0.5pp |
Effective tax rate (in %)2) | 27.1 |
| 26.3 |
|
| 27.1 |
| 26.1 | 0.0pp | 0.2pp |
|
Earnings per share, basic (in €) | 1.43 |
| 3.29 |
|
| 2.01 |
| 2.85 | –29 | 16 |
|
1) 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.
2) The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in the first nine month of 2019 mainly resulted from tax effects of share-based payment expenses, acquisition-related charges and restructuring expenses. The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in the first nine month of 2018 mainly resulted from tax effects of share-based payment expenses and acquisition-related charges.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
(F) Non-IFRS Adjustments – Actuals and Estimates
€ millions | Estimated Amounts | Q1–Q3 | Q3 2019 | Q1–Q3 | Q3 2018 |
Operating profit (loss) (IFRS) |
| 2,370 | 1,679 | 3,304 | 1,236 |
Revenue adjustments | 70–120 | 70 | 18 | 27 | 11 |
Adjustment for acquisition-related charges | 650–750 | 515 | 174 | 422 | 144 |
Adjustment for share-based payment expenses | 1,650–1,900 | 1,313 | 199 | 838 | 347 |
Adjustment for restructuring | 1,050–1,150 | 1,100 | 15 | 26 | 4 |
Operating expense adjustments |
| 2,928 | 388 | 1,286 | 496 |
Operating profit (loss) adjustments |
| 2,998 | 406 | 1,313 | 506 |
Operating profit (loss) (non-IFRS) |
| 5,368 | 2,086 | 4,618 | 1,742 |
Due to rounding, numbers may not add up precisely.
(G) Non-IFRS Adjustments by Functional Areas
€ millions |
|
|
|
| Q3 2019 |
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|
|
| Q3 2018 |
| IFRS | Acquisition- | SBP1) | Restructuring | Non-IFRS | IFRS | Acquisition- | SBP1) | Restructuring | Non-IFRS |
Cost of cloud and software | –1,134 | 81 | 17 | 0 | –1,036 | –1,057 | 69 | 32 | 0 | –956 |
Cost of services | –884 | 1 | 33 | 0 | –849 | –851 | 2 | 57 | 0 | –792 |
Research and development | –975 | 2 | 50 | 0 | –923 | –918 | 2 | 89 | 0 | –828 |
Sales and marketing | –1,774 | 89 | 64 | 0 | –1,621 | –1,673 | 71 | 130 | 0 | –1,471 |
General and administration | –323 | 1 | 35 | 0 | –287 | –284 | 1 | 38 | 0 | –245 |
Restructuring | –15 | 0 | 0 | 15 | 0 | –4 | 0 | 0 | 4 | 0 |
Other operating income/expense, net | –7 | 0 | 0 | 0 | –7 | 2 | 0 | 0 | 0 | 2 |
Total operating expenses | –5,111 | 174 | 199 | 15 | –4,724 | –4,784 | 144 | 347 | 4 | –4,289 |
€ millions |
|
|
| Q1–Q3 2019 |
|
|
| Q1–Q3 2018 | ||
| IFRS | Acquisition- | SBP1) | Restructuring | Non-IFRS | IFRS | Acquisition- | SBP1) | Restructuring | Non-IFRS |
Cost of cloud and software | –3,439 | 231 | 97 | 0 | –3,111 | –2,999 | 195 | 78 | 0 | –2,726 |
Cost of services | –2,729 | 4 | 177 | 0 | –2,548 | –2,451 | 7 | 138 | 0 | –2,306 |
Research and development | –3,089 | 7 | 301 | 0 | –2,781 | –2,680 | 5 | 212 | 0 | –2,462 |
Sales and marketing | –5,607 | 259 | 390 | 0 | –4,958 | –4,986 | 205 | 315 | 0 | –4,466 |
General and administration | –1,218 | 15 | 347 | 0 | –857 | –832 | 11 | 96 | 0 | –725 |
Restructuring | –1,100 | 0 | 0 | 1,100 | 0 | –26 | 0 | 0 | 26 | 0 |
Other operating income/expense, net | 41 | 0 | 0 | 0 | 41 | –3 | 0 | 0 | 0 | –3 |
Total operating expenses | –17,142 | 515 | 1,313 | 1,100 | –14,214 | –13,976 | 422 | 838 | 26 | –12,690 |
1) Share-based Payments
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
If not presented in a separate line item in our income statement, the restructuring expenses would break down as follows:
€ millions | Q3 2019 | Q1–Q3 2019 | Q3 2018 | Q1–Q3 2018 |
Cost of cloud and software | –9 | –136 | –1 | –3 |
Cost of services | 2 | –167 | –1 | –9 |
Research and development | –5 | –448 | –2 | –3 |
Sales and marketing | –3 | –284 | –1 | –10 |
General and administration | –1 | –65 | 0 | 0 |
Restructuring expenses | –15 | –1,100 | –4 | –26 |
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
Disaggregations
(H) Segment Reporting
(H.1) Segment Policies and Segment Changes
SAP has three reportable segments: the Applications, Technology & Services segment, the Intelligent Spend Group segment, and the Customer and Experience Management segment.
For some offerings, revenues are currently included in the Customer and Experience Management segment, whereas related costs (mainly research and development costs and cost of software licenses and support) are allocated to the Applications, Technology & Services segment. The following numbers display the above mentioned costs:
– Cost of software licenses and support:
¡ Q3/2019: €5 million (Q3/2018: €7 million)
¡ Q1–Q3/2019: €22 million (Q1–Q3/2018: €23 million)
– Other segment expenses:
¡ Q3/2019: €8 million (Q3/2018: €11 million)
¡ Q1–Q3/2019: €28 million (Q1–Q3/2018: €33 million)
For a more detailed description of SAP’s segment reporting, see the Notes to the 2019 Consolidated Half-Year Financial Statements, Note (C.1).
SAP Quarterly Statement Q3 2019 |
(H.2) Segment Reporting – Quarter
Applications, Technology & Services
€ millions, unless otherwise stated |
| Q3 2019 | Q3 2018 | D in % | D in % |
| Actual | Constant | Actual | Actual | Constant |
Cloud – SaaS/PaaS1) | 638 | 622 | 470 | 36 | 32 |
Cloud – IaaS2) | 175 | 170 | 131 | 33 | 29 |
Cloud | 813 | 792 | 601 | 35 | 32 |
Software licenses | 891 | 860 | 874 | 2 | –2 |
Software support | 2,904 | 2,839 | 2,761 | 5 | 3 |
Software licenses and support | 3,795 | 3,699 | 3,635 | 4 | 2 |
Cloud and software | 4,607 | 4,491 | 4,237 | 9 | 6 |
Services | 911 | 887 | 828 | 10 | 7 |
Total segment revenue | 5,518 | 5,378 | 5,065 | 9 | 6 |
Cost of cloud – SaaS/PaaS1) | –212 | –203 | –203 | 4 | 0 |
Cost of cloud – IaaS2) | –131 | –127 | –109 | 20 | 17 |
Cost of cloud | –343 | –331 | –312 | 10 | 6 |
Cost of software licenses and support | –460 | –451 | –460 | 0 | –2 |
Cost of cloud and software | –803 | –781 | –772 | 4 | 1 |
Cost of services | –648 | –634 | –625 | 4 | 1 |
Total cost of revenue | –1,451 | –1,415 | –1,397 | 4 | 1 |
Segment gross profit | 4,067 | 3,963 | 3,668 | 11 | 8 |
Other segment expenses | –1,592 | –1,560 | –1,547 | 3 | 1 |
Segment profit (loss) | 2,475 | 2,403 | 2,121 | 17 | 13 |
Margins |
|
|
|
|
|
Cloud gross margin – SaaS/PaaS1) (in %) | 66.7 | 67.3 | 56.8 | 9.9pp | 10.5pp |
Cloud gross margin – IaaS2) (in %) | 25.3 | 25.0 | 16.8 | 8.5pp | 8.2pp |
Cloud gross margin (in %) | 57.8 | 58.3 | 48.1 | 9.7pp | 10.2pp |
Segment gross margin (in %) | 73.7 | 73.7 | 72.4 | 1.3pp | 1.3pp |
Segment margin (in %) | 44.9 | 44.7 | 41.9 | 3.0pp | 2.8pp |
1) Software as a service/platform as a service
2) Infrastructure as a service
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
Intelligent Spend Group
€ millions, unless otherwise stated |
| Q3 2019 | Q3 2018 | D in % | D in % |
| Actual | Constant | Actual | Actual | Constant |
Cloud – SaaS/PaaS1) | 699 | 674 | 563 | 24 | 20 |
Cloud | 699 | 674 | 563 | 24 | 20 |
Software licenses | 0 | 0 | 0 | <-100 | <-100 |
Software support | 3 | 3 | 4 | –8 | –12 |
Software licenses and support | 3 | 3 | 4 | –9 | –13 |
Cloud and software | 702 | 677 | 566 | 24 | 19 |
Services | 126 | 122 | 109 | 16 | 12 |
Total segment revenue | 828 | 798 | 675 | 23 | 18 |
Cost of cloud – SaaS/PaaS1) | –153 | –148 | –121 | 26 | 22 |
Cost of cloud | –153 | –148 | –121 | 26 | 22 |
Cost of software licenses and support | –3 | –3 | –1 | >100 | >100 |
Cost of cloud and software | –157 | –151 | –123 | 28 | 23 |
Cost of services | –93 | –89 | –86 | 7 | 4 |
Total cost of revenue | –249 | –240 | –209 | 19 | 15 |
Segment gross profit | 579 | 558 | 466 | 24 | 20 |
Other segment expenses | –368 | –355 | –311 | 18 | 14 |
Segment profit (loss) | 211 | 203 | 155 | 36 | 31 |
Margins |
|
|
|
|
|
Cloud gross margin – SaaS/PaaS1) (in %) | 78.0 | 78.1 | 78.4 | –0.4pp | –0.4pp |
Cloud gross margin (in %) | 78.0 | 78.1 | 78.4 | –0.4pp | –0.4pp |
Segment gross margin (in %) | 69.9 | 69.9 | 69.1 | 0.8pp | 0.8pp |
Segment margin (in %) | 25.5 | 25.4 | 23.0 | 2.5pp | 2.4pp |
1) Software as a service/platform as a service
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
Customer and Experience Management
€ millions, unless otherwise stated |
| Q3 2019 | Q3 2018 | D in % | D in % |
| Actual | Constant | Actual | Actual | Constant |
Cloud – SaaS/PaaS1) | 294 | 284 | 148 | 98 | 92 |
Cloud | 294 | 284 | 148 | 98 | 92 |
Software licenses | 41 | 39 | 63 | –35 | –37 |
Software support | 0 | 0 | 0 | <-100 | <-100 |
Software licenses and support | 41 | 39 | 63 | –35 | –38 |
Cloud and software | 334 | 323 | 211 | 59 | 53 |
Services | 37 | 35 | 2 | >100 | >100 |
Total segment revenue | 371 | 358 | 212 | 75 | 69 |
Cost of cloud – SaaS/PaaS1) | –69 | –67 | –48 | 44 | 40 |
Cost of cloud | –69 | –67 | –48 | 44 | 40 |
Cost of software licenses and support | –5 | –5 | –4 | 19 | 16 |
Cost of cloud and software | –74 | –72 | –52 | 42 | 38 |
Cost of services | –22 | –21 | –1 | >100 | >100 |
Total cost of revenue | –96 | –93 | –53 | 81 | 75 |
Segment gross profit | 275 | 265 | 159 | 73 | 66 |
Other segment expenses | –273 | –264 | –148 | 85 | 79 |
Segment profit (loss) | 2 | 1 | 12 | –84 | –88 |
Margins |
|
|
|
|
|
Cloud gross margin – SaaS/PaaS1) (in %) | 76.4 | 76.4 | 67.6 | 8.8pp | 8.7pp |
Cloud gross margin (in %) | 76.4 | 76.4 | 67.6 | 8.8pp | 8.7pp |
Segment gross margin (in %) | 74.1 | 74.0 | 75.0 | –0.9pp | –0.9pp |
Segment margin (in %) | 0.5 | 0.4 | 5.5 | –5.0pp | –5.1pp |
1) Software as a service/platform as a service
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
Reconciliation of Cloud Revenues and Margins
€ millions, unless otherwise stated |
|
| Q3 2019 | Q3 2018 | D in % | D in % |
|
| Actual | Constant | Actual | Actual | Constant |
Cloud revenue – SaaS/PaaS1) | Intelligent Spend Group segment | 699 | 674 | 563 | 24 | 20 |
Other3) | 934 | 909 | 621 | 50 | 46 | |
Total | 1,632 | 1,582 | 1,184 | 38 | 34 | |
Cloud revenue – IaaS2) |
| 175 | 170 | 131 | 33 | 29 |
Cloud revenue |
| 1,807 | 1,752 | 1,315 | 37 | 33 |
Cloud gross margin – SaaS/PaaS1) (in %) | Intelligent Spend Group segment | 78.0 | 78.1 | 78.4 | –0.4pp | –0.4pp |
Other3) | 70.4 | 70.5 | 59.9 | 10.5pp | 10.6pp | |
Total | 73.7 | 73.7 | 68.7 | 4.9pp | 5.0pp | |
Cloud gross margin – IaaS2) (in %) |
| 25.3 | 25.0 | 16.8 | 8.5pp | 8.2pp |
Cloud gross margin (in %) |
| 69.0 | 69.0 | 63.5 | 5.4pp | 5.5pp |
1) Software as a service/platform as a service
2) Infrastructure as a service
3) Other includes the Applications, Technology & Services segment, the Customer and Experience Management segment, and miscellaneous. The individual revenue and margin numbers for the Applications, Technology & Services segment and the Customer and Experience Management segment are disclosed on the previous pages.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
(H.3) Segment Reporting – Year-to-Date
Applications, Technology & Services
€ millions, unless otherwise stated |
| Q1–Q3 2019 | Q1–Q3 2018 | ∆ in % | ∆ in % |
| Actual | Constant | Actual | Actual | Constant |
Cloud – SaaS/PaaS1) | 1,800 | 1,747 | 1,319 | 36 | 32 |
Cloud – IaaS2) | 503 | 486 | 348 | 45 | 40 |
Cloud | 2,303 | 2,232 | 1,667 | 38 | 34 |
Software licenses | 2,381 | 2,321 | 2,371 | 0 | –2 |
Software support | 8,588 | 8,379 | 8,147 | 5 | 3 |
Software licenses and support | 10,969 | 10,700 | 10,518 | 4 | 2 |
Cloud and software | 13,272 | 12,932 | 12,185 | 9 | 6 |
Services | 2,621 | 2,550 | 2,410 | 9 | 6 |
Total segment revenue | 15,893 | 15,482 | 14,595 | 9 | 6 |
Cost of cloud – SaaS/PaaS1) | –649 | –624 | –552 | 18 | 13 |
Cost of cloud – IaaS2) | –370 | –361 | –304 | 22 | 19 |
Cost of cloud | –1,020 | –985 | –856 | 19 | 15 |
Cost of software licenses and support | –1,415 | –1,383 | –1,371 | 3 | 1 |
Cost of cloud and software | –2,435 | –2,368 | –2,227 | 9 | 6 |
Cost of services | –1,987 | –1,944 | –1,841 | 8 | 6 |
Total cost of revenue | –4,421 | –4,312 | –4,068 | 9 | 6 |
Segment gross profit | 11,472 | 11,170 | 10,527 | 9 | 6 |
Other segment expenses | –4,893 | –4,788 | –4,680 | 5 | 2 |
Segment profit (loss) | 6,579 | 6,382 | 5,848 | 13 | 9 |
Margins |
|
|
|
|
|
Cloud gross margin – SaaS/PaaS1) (in %) | 63.9 | 64.3 | 58.2 | 5.8pp | 6.1pp |
Cloud gross margin – IaaS2) (in %) | 26.4 | 25.7 | 12.7 | 13.7pp | 13.1pp |
Cloud gross margin (in %) | 55.7 | 55.9 | 48.7 | 7.1pp | 7.2pp |
Segment gross margin (in %) | 72.2 | 72.1 | 72.1 | 0.1pp | 0.0pp |
Segment margin (in %) | 41.4 | 41.2 | 40.1 | 1.3pp | 1.2pp |
1) Software as a service/platform as a service
2) Infrastructure as a service
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
Intelligent Spend Group
€ millions, unless otherwise stated |
| Q1–Q3 2019 | Q1–Q3 2018 | ∆ in % | ∆ in % |
| Actual | Constant | Actual | Actual | Constant |
Cloud – SaaS/PaaS1) | 1,992 | 1,903 | 1,577 | 26 | 21 |
Cloud | 1,992 | 1,903 | 1,577 | 26 | 21 |
Software licenses | 0 | 0 | 0 | <-100 | <-100 |
Software support | 11 | 11 | 12 | –2 | –7 |
Software licenses and support | 11 | 11 | 12 | –7 | –11 |
Cloud and software | 2,003 | 1,914 | 1,589 | 26 | 20 |
Services | 351 | 336 | 320 | 10 | 5 |
Total segment revenue | 2,355 | 2,249 | 1,908 | 23 | 18 |
Cost of cloud – SaaS/PaaS1) | –436 | –418 | –351 | 24 | 19 |
Cost of cloud | –436 | –418 | –351 | 24 | 19 |
Cost of software licenses and support | –7 | –7 | –5 | 58 | 51 |
Cost of cloud and software | –444 | –425 | –355 | 25 | 20 |
Cost of services | –271 | –261 | –236 | 15 | 11 |
Total cost of revenue | –715 | –686 | –591 | 21 | 16 |
Segment gross profit | 1,640 | 1,563 | 1,317 | 25 | 19 |
Other segment expenses | –1,114 | –1,067 | –933 | 19 | 14 |
Segment profit (loss) | 526 | 496 | 384 | 37 | 29 |
Margins |
|
|
|
|
|
Cloud gross margin – SaaS/PaaS1) (in %) | 78.1 | 78.0 | 77.8 | 0.3pp | 0.3pp |
Cloud gross margin (in %) | 78.1 | 78.0 | 77.8 | 0.3pp | 0.3pp |
Segment gross margin (in %) | 69.6 | 69.5 | 69.0 | 0.6pp | 0.5pp |
Segment margin (in %) | 22.3 | 22.0 | 20.1 | 2.2pp | 1.9pp |
1) Software as a service/platform as a service
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
Customer and Experience Management
€ millions, unless otherwise stated |
| Q1–Q3 2019 | Q1–Q3 2018 | ∆ in % | ∆ in % |
| Actual | Constant | Actual | Actual | Constant |
Cloud – SaaS/PaaS1) | 804 | 770 | 358 | >100 | >100 |
Cloud | 804 | 770 | 358 | >100 | >100 |
Software licenses | 140 | 136 | 187 | –25 | –27 |
Software support | 0 | 0 | 0 | –28 | –32 |
Software licenses and support | 141 | 137 | 187 | –25 | –27 |
Cloud and software | 944 | 906 | 545 | 73 | 66 |
Services | 93 | 88 | 4 | >100 | >100 |
Total segment revenue | 1,038 | 994 | 550 | 89 | 81 |
Cost of cloud – SaaS/PaaS1) | –193 | –187 | –116 | 65 | 61 |
Cost of cloud | –193 | –187 | –116 | 65 | 61 |
Cost of software licenses and support | –15 | –15 | –15 | 2 | 0 |
Cost of cloud and software | –208 | –202 | –131 | 58 | 54 |
Cost of services | –54 | –51 | 0 | >100 | >100 |
Total cost of revenue | –261 | –253 | –131 | 99 | 92 |
Segment gross profit | 777 | 741 | 418 | 86 | 77 |
Other segment expenses | –786 | –754 | –413 | 90 | 83 |
Segment profit (loss) | –10 | –13 | 5 | <-100 | <-100 |
Margins |
|
|
|
|
|
Cloud gross margin – SaaS/PaaS1) (in %) | 76.0 | 75.7 | 67.5 | 8.5pp | 8.1pp |
Cloud gross margin (in %) | 76.0 | 75.7 | 67.5 | 8.5pp | 8.1pp |
Segment gross margin (in %) | 74.8 | 74.6 | 76.1 | –1.2pp | –1.5pp |
Segment margin (in %) | –0.9 | –1.3 | 1.0 | –1.9pp | –2.3pp |
1) Software as a service/platform as a service
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
Reconciliation of Cloud Revenues and Margins
€ millions, unless otherwise stated |
|
| Q1–Q3 2019 | Q1–Q3 2018 | ∆ in % | ∆ in % |
|
| Actual | Constant | Actual | Actual | Constant |
Cloud revenue – SaaS/PaaS1) | Intelligent Spend Group segment | 1,992 | 1,903 | 1,577 | 26 | 21 |
Other3) | 2,611 | 2,524 | 1,689 | 55 | 49 | |
Total | 4,603 | 4,427 | 3,266 | 41 | 36 | |
Cloud revenue – IaaS2) |
| 503 | 486 | 348 | 45 | 40 |
Cloud revenue |
| 5,106 | 4,912 | 3,614 | 41 | 36 |
Cloud gross margin – SaaS/PaaS1) (in %) | Intelligent Spend Group segment | 78.1 | 78.0 | 77.8 | 0.3pp | 0.3pp |
Other3) | 67.8 | 67.9 | 60.6 | 7.2pp | 7.3pp | |
Total | 72.3 | 72.2 | 68.9 | 3.4pp | 3.4pp | |
Cloud gross margin – IaaS2) (in %) |
| 26.4 | 25.7 | 12.7 | 13.7pp | 13.1pp |
Cloud gross margin (in %) |
| 67.8 | 67.6 | 63.5 | 4.3pp | 4.2pp |
1) Software as a service/platform as a service
2) Infrastructure as a service
3) Other includes the Applications, Technology & Services segment, the Customer and Experience Management segment, and miscellaneous. The individual revenue and margin numbers for the Applications, Technology & Services segment and the Customer and Experience Management segment are disclosed on the previous pages.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
(I) Revenue by Region (IFRS and Non-IFRS)
(I.1) Revenue by Region (IFRS and Non-IFRS) – Quarter
€ millions |
|
|
|
|
|
| Q3 2019 |
|
|
| Q3 2018 |
|
|
|
|
| D in % |
| |||
|
| IFRS |
| Adj. |
| Non-IFRS | Currency | Non-IFRS |
| IFRS |
| Adj. |
| Non-IFRS |
| IFRS |
| Non-IFRS |
| Non-IFRS |
|
Cloud Revenue by Region |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
EMEA |
| 540 |
| 0 |
| 540 | –7 | 532 |
| 363 |
| 0 |
| 363 |
| 49 |
| 48 |
| 46 |
|
Americas |
| 1,031 |
| 18 |
| 1,049 | –44 | 1,005 |
| 784 |
| 10 |
| 795 |
| 31 |
| 32 |
| 26 |
|
APJ |
| 219 |
| 0 |
| 219 | –4 | 214 |
| 157 |
| 0 |
| 157 |
| 40 |
| 40 |
| 37 |
|
Cloud revenue |
| 1,789 |
| 18 |
| 1,807 | –55 | 1,752 |
| 1,304 |
| 10 |
| 1,315 |
| 37 |
| 37 |
| 33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud and Software Revenue by Region |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
EMEA |
| 2,410 |
| 0 |
| 2,410 | –23 | 2,388 |
| 2,186 |
| 0 |
| 2,186 |
| 10 |
| 10 |
| 9 |
|
Americas |
| 2,332 |
| 18 |
| 2,350 | –98 | 2,253 |
| 2,008 |
| 10 |
| 2,019 |
| 16 |
| 16 |
| 12 |
|
APJ |
| 886 |
| 0 |
| 886 | –32 | 854 |
| 813 |
| 0 |
| 813 |
| 9 |
| 9 |
| 5 |
|
Cloud and software revenue |
| 5,629 |
| 18 |
| 5,647 | –153 | 5,494 |
| 5,007 |
| 11 |
| 5,017 |
| 12 |
| 13 |
| 10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue by Region |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Germany |
| 943 |
| 0 |
| 943 | –1 | 942 |
| 902 |
| 0 |
| 902 |
| 5 |
| 5 |
| 4 |
|
Rest of EMEA |
| 1,939 |
| 0 |
| 1,939 | –25 | 1,914 |
| 1,714 |
| 0 |
| 1,714 |
| 13 |
| 13 |
| 12 |
|
Total EMEA |
| 2,882 |
| 0 |
| 2,882 | –26 | 2,856 |
| 2,616 |
| 0 |
| 2,616 |
| 10 |
| 10 |
| 9 |
|
United States |
| 2,345 |
| 18 |
| 2,363 | –107 | 2,256 |
| 2,005 |
| 10 |
| 2,015 |
| 17 |
| 17 |
| 12 |
|
Rest of Americas |
| 525 |
| 0 |
| 525 | –14 | 512 |
| 439 |
| 0 |
| 439 |
| 20 |
| 20 |
| 17 |
|
Total Americas |
| 2,870 |
| 18 |
| 2,888 | –120 | 2,768 |
| 2,444 |
| 10 |
| 2,454 |
| 17 |
| 18 |
| 13 |
|
Japan |
| 313 |
| 0 |
| 313 | –26 | 288 |
| 240 |
| 0 |
| 240 |
| 31 |
| 31 |
| 20 |
|
Rest of APJ |
| 726 |
| 0 |
| 726 | –13 | 713 |
| 721 |
| 0 |
| 721 |
| 1 |
| 1 |
| –1 |
|
Total APJ |
| 1,039 |
| 0 |
| 1,039 | –39 | 1,000 |
| 961 |
| 0 |
| 961 |
| 8 |
| 8 |
| 4 |
|
Total revenue |
| 6,791 |
| 18 |
| 6,809 | –185 | 6,624 |
| 6,020 |
| 11 |
| 6,031 |
| 13 |
| 13 |
| 10 |
|
1) Constant currency period-over-period changes are calculated by comparing the current year’s non-IFRS constant currency numbers with the non-IFRS numbers of the previous year’s respective period.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
(I.2) Revenue by Region (IFRS and Non-IFRS) – Year-to-Date
€ millions |
|
|
|
|
|
| Q1–Q3 2019 |
|
|
| Q1–Q3 2018 |
|
|
|
|
| D in % |
| |||
|
| IFRS |
| Adj. |
| Non-IFRS | Currency | Non-IFRS |
| IFRS |
| Adj. |
| Non-IFRS |
| IFRS |
| Non- |
| Non-IFRS |
|
Cloud Revenue by Region |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
EMEA |
| 1,507 |
| 0 |
| 1,507 | –22 | 1,484 |
| 1,034 |
| 0 |
| 1,034 |
| 46 |
| 46 |
| 44 |
|
Americas |
| 2,899 |
| 69 |
| 2,968 | –156 | 2,813 |
| 2,117 |
| 26 |
| 2,143 |
| 37 |
| 38 |
| 31 |
|
APJ |
| 631 |
| 0 |
| 631 | –16 | 615 |
| 436 |
| 0 |
| 436 |
| 45 |
| 45 |
| 41 |
|
Cloud revenue |
| 5,037 |
| 69 |
| 5,106 | –194 | 4,912 |
| 3,588 |
| 26 |
| 3,614 |
| 40 |
| 41 |
| 36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud and Software Revenue by Region |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
EMEA |
| 7,039 |
| 0 |
| 7,039 | –48 | 6,991 |
| 6,393 |
| 0 |
| 6,393 |
| 10 |
| 10 |
| 9 |
|
Americas |
| 6,562 |
| 70 |
| 6,632 | –345 | 6,287 |
| 5,594 |
| 27 |
| 5,620 |
| 17 |
| 18 |
| 12 |
|
APJ |
| 2,566 |
| 0 |
| 2,566 | –75 | 2,491 |
| 2,315 |
| 0 |
| 2,315 |
| 11 |
| 11 |
| 8 |
|
Cloud and software revenue |
| 16,167 |
| 70 |
| 16,236 | –468 | 15,768 |
| 14,302 |
| 27 |
| 14,328 |
| 13 |
| 13 |
| 10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue by Region |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Germany |
| 2,726 |
| 0 |
| 2,726 | –2 | 2,724 |
| 2,519 |
| 0 |
| 2,519 |
| 8 |
| 8 |
| 8 |
|
Rest of EMEA |
| 5,693 |
| 0 |
| 5,693 | –54 | 5,639 |
| 5,159 |
| 0 |
| 5,159 |
| 10 |
| 10 |
| 9 |
|
Total EMEA |
| 8,419 |
| 0 |
| 8,419 | –56 | 8,363 |
| 7,678 |
| 0 |
| 7,678 |
| 10 |
| 10 |
| 9 |
|
United States |
| 6,590 |
| 70 |
| 6,659 | –379 | 6,280 |
| 5,578 |
| 27 |
| 5,604 |
| 18 |
| 19 |
| 12 |
|
Rest of Americas |
| 1,482 |
| 0 |
| 1,482 | –46 | 1,436 |
| 1,290 |
| 0 |
| 1,290 |
| 15 |
| 15 |
| 11 |
|
Total Americas |
| 8,072 |
| 70 |
| 8,142 | –425 | 7,716 |
| 6,867 |
| 27 |
| 6,894 |
| 18 |
| 18 |
| 12 |
|
Japan |
| 839 |
| 0 |
| 839 | –54 | 785 |
| 683 |
| 0 |
| 683 |
| 23 |
| 23 |
| 15 |
|
Rest of APJ |
| 2,183 |
| 0 |
| 2,183 | –35 | 2,148 |
| 2,052 |
| 0 |
| 2,052 |
| 6 |
| 6 |
| 5 |
|
Total APJ |
| 3,022 |
| 0 |
| 3,022 | –89 | 2,933 |
| 2,735 |
| 0 |
| 2,735 |
| 10 |
| 10 |
| 7 |
|
Total revenue |
| 19,513 |
| 70 |
| 19,583 | –570 | 19,013 |
| 17,280 |
| 27 |
| 17,307 |
| 13 |
| 13 |
| 10 |
|
1) 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.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q3 2019 |
(J) Employees by Region and Functional Areas
Full-time equivalents |
|
|
|
|
|
|
| 9/30/2019 |
|
|
|
|
|
|
| 9/30/2018 |
|
|
| EMEA |
| Americas |
| APJ |
| Total |
| EMEA |
| Americas |
| APJ |
| Total |
|
Cloud and software |
| 6,443 |
| 4,405 |
| 5,261 |
| 16,109 |
| 6,237 |
| 4,109 |
| 5,183 |
| 15,529 |
|
Services |
| 8,224 |
| 5,969 |
| 5,969 |
| 20,163 |
| 8,097 |
| 5,682 |
| 5,491 |
| 19,270 |
|
Research and development |
| 12,604 |
| 5,655 |
| 9,055 |
| 27,315 |
| 12,113 |
| 5,616 |
| 8,787 |
| 26,516 |
|
Sales and marketing |
| 10,187 |
| 10,297 |
| 5,190 |
| 25,675 |
| 9,839 |
| 9,532 |
| 5,008 |
| 24,379 |
|
General and administration |
| 3,129 |
| 2,138 |
| 1,310 |
| 6,577 |
| 2,784 |
| 1,916 |
| 1,098 |
| 5,798 |
|
Infrastructure |
| 2,224 |
| 995 |
| 652 |
| 3,871 |
| 2,010 |
| 931 |
| 555 |
| 3,496 |
|
SAP Group (9/30) |
| 42,812 |
| 29,460 |
| 27,438 |
| 99,710 |
| 41,080 |
| 27,786 |
| 26,123 |
| 94,989 |
|
Thereof acquisitions1) |
| 338 |
| 1,638 |
| 137 |
| 2,113 |
| 638 |
| 952 |
| 434 |
| 2,024 |
|
SAP Group (nine months’ end average) |
| 42,585 |
| 29,287 |
| 26,949 |
| 98,821 |
| 40,077 |
| 27,274 |
| 25,493 |
| 92,844 |
|
1) Acquisitions closed between January 1 and September 30 of the respective year
SAP Quarterly Statement Q3 2019 |
Other Disclosures
(K) Accounting Policy Changes
(K.1) Adoption of IFRS 16
As of January 1, 2019, SAP changed its accounting policies to adopt IFRS 16 ‘Leases’. Under the IFRS 16 adoption method chosen by SAP, prior years are not restated to conform to the new policies. Consequently, the year over year changes in profit, assets and liabilities and cash flows in 2019 are impacted by the new policies.
The transition impact of the policy change as of January 1, 2019, was as follows:
– Property, plant and equipment are higher by €1.9 billion resulting from the recognition of right-of-use assets,
– Financial liabilities are higher by €2.1 billion due to the recognition of lease liabilities,
– Trade and other payables are lower by €0.1 billion due to the de-recognition of deferred rent.
In the third quarter (first nine months) of 2019, we have recognized in our consolidated income statement depreciation expense from right-of-use assets of €102 million (€282 million) and interest expense on lease liabilities of €13 million (€39 million).
IFRS 16 also affects SAP’s cash flow statement in the third quarter (first nine months) of 2019 as follows:
– Operating cash flow increased by €104 million (€288 million),
– Cash flow from financing activities decreased by €104 million (€288 million).
The Free Cash Flow measure is not affected by this change.
Please also refer to section “Impact of the New Accounting Standard IFRS 16 ‘Leases’” in our 2019 Consolidated Half-Year Financial Statements for further explanations of the changes in accounting policies as a result of the adoption of IFRS 16.
For more information about the financial impacts of the adoption of IFRS 16, see the Notes to the 2019 Consolidated Half-Year Financial Statements, Note (D.3).
(L) Impact of Hyperinflation
We apply hyperinflation accounting for our subsidiaries in Argentina and Venezuela by restating the financial statements of these subsidiaries for the current period to account for changes in the general purchasing power of the local currency based on relevant price indexes at the reporting date. The restated financial statements of our subsidiaries in Venezuela and Argentina are translated at closing rates. The effects on SAP’s consolidated income statements in the third quarter and the first nine months of 2019 and on SAP’s balance sheet as at September 30, 2019 are not material.
For more information about hyperinflation accounting, see the Notes to the 2019 Consolidated Half-Year Financial Statements, Note (C.4).
(M) Business Combinations and Divestments
(M.1) Business Combinations
We acquired several businesses during 2018 and in the first nine months of 2019 which, since their acquisition date, have contributed to our consolidated income statement but not in the comparison period.
The legal entities added by our significant acquisitions recognized (incremental amounts not included in the comparative periods)
– cloud revenue
n in the third quarter 2019 of €85 million (IFRS) and of €103 million (non-IFRS),
n in the first nine months 2019 of €248 million (IFRS) and of €318 million (non-IFRS),
– operating profit
n in the third quarter 2019 of –€117 million (IFRS) and of –€0.5 million (non-IFRS),
n in the first nine months 2019 of –€546 million (IFRS) and of €21 million (non-IFRS).
SAP Quarterly Statement Q3 2019 |
These legal entities added by our significant acquisitions also recognized operating profit within our Customer and Experience Management segment
– in the third quarter 2019 of €4 million,
– in the first nine months 2019 of €28 million.
For more information about the 2019 business combinations, see the Notes to the 2019 Consolidated Half-Year Financial Statements, Note (D.1).
(M.2) Divestments
At the beginning of 2019, we sold one content as a service (CaaS) business to a third party. This sale generated
– a profit of €53 million in the first half of 2019, which is classified, in our consolidated income statement, as other operating income,
– incremental employee related expenses of €7 million in the first quarter 2019, that are classified, in our consolidated income statement, as cost of research and development.
(N) Miscellaneous Disclosures
(N.1) Changes in Estimates
At the beginning of 2019, we changed our estimate of the expected useful lives of certain computer hardware. The effect of this change is a reduction of actual and expected depreciation expense of
– €24 million in the third quarter 2019 (thereof €16 million in cost of cloud),
– €73 million in the first nine months 2019 (thereof €50 million in cost of cloud),
– €93 million expected for the full year 2019 (thereof €71 million in cost of cloud).
For more information regarding changes in estimates, see the Notes to the 2019 Consolidated Half-Year Financial Statements, Note (D.2).
(N.2) Financial Income, Net
Finance income mainly consists of gains from disposal of equity securities and IFRS 9-related fair value adjustments totaling €209 million in the third quarter 2019 (Q3/2018: €48 million) and €405 million in the first nine months of 2019 (Q1–Q3/2018: €156 million) respectively, interest income from loans and receivables, and other financial assets (cash, cash equivalents, and current investments) totaling €20 million in the third quarter 2019 (Q3/2018: €15 million) and €59 million in the first nine months of 2019 (Q1–Q3/2018: €48 million) respectively, and income from derivatives totaling €24 million in the third quarter 2019 (Q3/2018: €13 million) and €67 million in the first nine months of 2019 (Q1–Q3/2018: €61 million) respectively.
Finance costs mainly consist of losses from disposal or IFRS 9-related fair value adjustments of Sapphire Ventures investments totaling €98 million in the third quarter 2019 (Q3/2018: €11 million) and €125 million in the first nine months of 2019 (Q1–Q3/2018: €25 million) respectively, interest expense on financial liabilities amounting to €50 million in the third quarter 2019 (Q3/2018: €23 million) and €157 million in the first nine months of 2019 (Q1–Q3/2018: €71 million) respectively, and negative effects from derivatives amounting to €36 million in the third quarter 2019 (Q3/2018: €32 million) and €133 million in the first nine months of 2019 (Q1–Q3/2018: €101 million) respectively.
(N.3) Financial Instruments
In September 2019, we initiated our commercial paper program (“Commercial Paper”). As of September 30, 2019, we had €0.5 billion of Commercial Paper outstanding with maturities generally less than three months. The funds were used to partially repay the Qualtrics related acquisition term loan.
SAP Quarterly Statement Q3 2019 |