Exhibit 99.1
Quarterly Statement Q1 2021 |
Stellar Start to 2021
Fastest Growth in New Cloud Business in Five Years
Reaccelerates Current Cloud Backlog, Up 19% at Constant
Currencies, to €7.6 Billion
· | S/4HANA Current Cloud Backlog Up 43% At Constant Currencies Highlighting SAP’s Accelerated Cloud Transition |
· | IFRS EPS Up 29%; Non-IFRS EPS Up 63% |
· | Operating Cash Flow Up 3% To €3.09 Billion; Free Cash Flow Up 10% to €2.85 Billion |
„ We are seeing very strong order entry growth across our applications portfolio. And we are just getting started. Our new offering ‘RISE with SAP’ is rapidly becoming a massive accelerator to our customers’ business transformations with our platform at the center. Together with our unique ecosystem of more than 22,000 partners and with a strong innovation pipeline for the year, we are well on track with our strategy to deliver robust cloud growth.” | „ The first quarter of 2021 was unique in many ways. We had the highest order entry growth across cloud and software in five years while posting the strongest increase in Non-IFRS operating profit and margin in a decade. Free cash flow was up double-digit compared to a record prior year. In the mid term SAP’s expedited shift to the cloud will accelerate topline growth and significantly increase the resiliency and predictability of our business.” | |
Christian Klein, CEO | Luka Mucic, CFO |
SAP Quarterly Statement Q1 2021 | 1 |
Walldorf, Germany – April 22, 2021
SAP SE (NYSE: SAP) today announced its financial results for the first quarter ended March 31, 2021.
Business Update First Quarter 2021
SAP saw a sharp acceleration in new cloud business across its cloud portfolio including Qualtrics, Human Experience Management, Procurement, Customer Experience, Business Technology Platform, as well as a strong start for ‘RISE with SAP’ which is driving customers’ business transformations in the cloud. Software licenses were up 7% (IFRS) and had strong, double-digit growth of 11% (Non-IFRS at constant currencies). SAP had significant competitive wins in ERP, digital supply chain and across its broader cloud solution portfolio.
Despite the continued impact of global travel restrictions on Concur’s business, SAP’s cloud revenue growth was resilient in the first quarter, up 7% (IFRS) and up 13% (Non-IFRS at constant currencies). SaaS/PaaS cloud revenue outside the Intelligent Spend business was up 17% (IFRS) and up 24% (Non-IFRS at constant currencies). Looking forward, SAP’s strong new cloud business performance is expected to reaccelerate cloud revenue growth.
Throughout the COVID-19 crisis, SAP continues to serve its customers effectively with an embedded virtual sales and remote implementation strategy. The company retains a disciplined approach to hiring and discretionary spend while capturing natural savings e.g. from lower travel, facility-related costs and virtual events. The prior year included a cost of approximately €36 million in relation to the cancellation of its in-person annual SAPPHIRE NOW and other customer events, as well as normal travel behavior.
Highlights
· | Key customer wins included: Unilever, BioNTech, IKEA, Nippon Express, BMW, Yamaha Motor Company, Toshiba Corporation, AstraZeneca, Zalando, Deichmann, B. Braun, and Clemson University. AkzoNobel, CONA Services, Daikin Chemicals, Olam International, Google, Bosch Siemens Hausgeräte, Douglas, LIVEKINDLY Collective, Peloton, and Chobani went live on SAP solutions. |
· | SAP launched "RISE with SAP" on January 27, a simplified pathway for customers to transform their business in the cloud. In the first quarter alone, SAP closed more than 100 transactions. Customers such as Carrefour Brazil, Sono Motors, KIA Chile, Hillrom, and Grupo Feromax chose “RISE with SAP” in the first quarter. |
· | In total, more than 400 S/4HANA customers were added in the quarter, taking total adoption to more than 16,400 customers, up more than 16% year over year, of which more than 9,600 are live. In the first quarter, more than 50% of the additional S/4HANA customers were net new. |
· | The acquisition of Signavio was completed on March 5, significantly deepening SAP’s business process intelligence capabilities. |
· | SAP closed the acquisition on AppGyver, a no-code development pioneer. AppGyver’s solutions will become part of the SAP Business Technology Platform. |
· | SAP announced a strategic partnership with Dediq to jointly expand SAP’s financial services portfolio with a significant investment in developing new solutions to better serve the rapidly changing banking and insurance industry. The new solutions will be built as part of SAP’s industry cloud solutions. SAP and Dediq intend to form a dedicated Financial Services Industry (FSI) Unit, which will be jointly owned by the two companies. Pending regulatory approval, the new FSI Unit is expected to be established in September 2021. |
· | SAP proposed a dividend of €1.85 per share for fiscal year 2020 representing a year-over-year increase of €0.27 or 17%. The dividend is subject to shareholder approval at the upcoming AGM to be held on May 12, 2021. |
SAP Quarterly Statement Q1 2021 | 2 |
Financial Performance First Quarter 20211
Current cloud backlog was up 15% to €7.63 billion and up 19% (at constant currencies). Cloud revenue was up 7% year over year to €2.14 billion (IFRS), up 7% to €2.15 billion (non-IFRS) and up 13% (non-IFRS at constant currencies). Software licenses revenue was up 7% year over year to €0.48 billion (IFRS and non-IFRS) and up 11% (non-IFRS at constant currencies). Cloud and software revenue was up 1% to €5.43 billion (IFRS and non-IFRS) and up 6% (non-IFRS at constant currencies). Services revenue was down 18% year over year to €0.9 billion (IFRS and non-IFRS) and down 14% (non-IFRS at constant currencies). This revenue decline reflects the November 2020 divestiture of SAP Digital Interconnect, which contributed approximately €90 million of services revenue (IFRS and non-IFRS) in the first quarter of 2020. Total revenue was down 3% year over year to €6.35 billion (IFRS and non-IFRS) and up 2% (non-IFRS at constant currencies).
The share of more predictable revenue2 grew by approximately 2 percentage points year over year to approximately 78% in the first quarter.
IFRS operating profit decreased 21% to €0.96 billion and IFRS operating margin decreased by 3.4 percentage points to 15.1% due to higher share-based compensation expenses (primarily related to Qualtrics IPO awards) and restructuring expenses related to the accelerated harmonization of SAP’s cloud delivery infrastructure. Non-IFRS operating profit increased 17% to €1.74 billion, up 24% (non-IFRS at constant currencies) and operating margin increased by 4.7 percentage points to 27.4%, up 4.9 percentage points (non-IFRS at constant currencies).
Earnings per share increased 29% to €0.88 (IFRS) and increased 63% to €1.40 (non-IFRS) reflecting another strong contribution from Sapphire Ventures.
Operating cash flow for the first quarter was €3.09 billion. Free cash flow increased 10% year over year to €2.85 billion. Cash flow was positively impacted by lower share-based and restructuring payments. Free cash flow was further supported by a decline in capex. At quarter end, net debt was –€2.66 billion.
Expanded Financial Disclosure – SAP’s Accelerated Cloud Transition
Starting with the first quarter 2021, SAP is expanding its financial disclosure to provide investors with transparency on the transition of its core ERP business to the cloud. Specifically, the Company is disclosing current cloud backlog and cloud revenue contributed by SAP S/4HANA Cloud, along with nominal and constant currencies year-over-year growth rates.
In the first quarter S/4HANA current cloud backlog was up 39% to €1.04 billion and up 43% (at constant currencies). S/4HANA cloud revenue was up 36% to €227 million (IFRS and non-IFRS) and up 43% (at constant currencies).
SAP S/4HANA Cloud represents SAP’s cloud offering for core ERP processes. It mainly includes cloud solutions for financial management, supply chain management, engineering and manufacturing, order management and asset management, as well as associated data management, analytics, development and integration capabilities.
“RISE with SAP “, SAP’s holistic offering for business transformation in the cloud, is an important driver of S/4HANA Cloud and Business Technology Platform adoption.
1 The Q1 2021 results were also impacted by other effects. For details please refer to the disclosures on page 24 of this document.
2 Share of more predictable revenue is the total of non-IFRS cloud revenue and non-IFRS software support revenue as a percentage of total revenue.
SAP Quarterly Statement Q1 2021 | 3 |
Segment Performance First Quarter 2021
SAP’s three reportable segments “Applications, Technology & Support”, “Qualtrics” and “Services” showed the following performance:
Applications, Technology & Support (AT&S)
Segment revenue in AT&S was down 1% to €5.31 billion year over year (up 4% at constant currencies). Segment performance was driven by strong double-digit cloud revenue growth in S/4HANA Cloud, Digital Supply Chain, Business Technology Platform, and Customer Experience, in particular ecommerce. Software licenses revenue grew sharply driven by a significant number of ERP and supply chain competitive wins against peers. Segment support revenues were flat at constant currencies (year over year) reflecting high retention rates coupled with the shift of some support revenue to cloud.
Qualtrics
Qualtrics segment revenue was up 25% to €202 million year over year (up 37% at constant currencies). The strong growth was driven by companies using Qualtrics experience data and insights to drive employee retention and engagement, to find new customers and strengthen relationships to keep the ones they already have. LIXIL, Singapore Post, Bank of Montreal, Los Angeles County Public Health, Mitsubishi Electric Corporation, Royal Caribbean International, and many others selected Qualtrics Experience Management Solutions.
Services
Services segment revenue was down 12% to €800 million year over year (down 8% at constant currencies). The services implementation business continues to demonstrate its resilience and flexibility with SAP’s shift to remote delivery, and SAP’s premium services remain in high demand. However, SAP’s training business continues to be impacted due to delays in re-opening of global training centers.
Segment Results at a Glance
First Quarter 2021
Applications, Technology & Support | Qualtrics | Services | |||||||
€ million, unless otherwise stated (Non-IFRS) | Actual Currency | ∆ in % | ∆ in % const. | Actual Currency | ∆ in % | ∆ in % const. | Actual Currency | ∆ in % | ∆ in % const. |
Cloud revenue | 1,958 | 4 | 10 | 160 | 33 | 45 | 0 | NA | NA |
Segment revenue | 5,314 | –1 | 4 | 202 | 25 | 37 | 800 | –12 | –8 |
Segment profit (loss) | 2,127 | 8 | 13 | 13 | <-100 | <-100 | 170 | 26 | 33 |
Cloud gross margin (in %) | 68.8 | –0.1pp | –0.2pp | 92.2 | 1.4pp | 1.5pp | NM1) | NM1) | NM1) |
Segment margin (in %) | 40.0 | 3.1pp | 3.2pp | 6.4 | 16.5pp | 15.6pp | 21.2 | 6.4pp | 6.5pp |
1) NM = not meaningful
Regional Revenue Performance First Quarter 2021
SAP had a strong performance across all of its regions.
In the EMEA region, cloud and software revenue increased 5% (IFRS) and 7% (non-IFRS at constant currencies). Cloud revenue increased 21% (IFRS) and 24% (non-IFRS at constant currencies) with Germany and Switzerland being highlights.
In the Americas region, cloud and software revenue decreased 6% (IFRS) and was up 3% (non-IFRS at constant currencies). Cloud revenue decreased 2% (IFRS) and was up 7% (non-IFRS at constant currencies). Canada and Mexico had a robust performance.
In the APJ region, cloud and software revenue increased 7% (IFRS) and 11% (non-IFRS at constant currencies). Cloud revenue increased 14% (IFRS) and 18% (non-IFRS at constant currencies) with Japan, Australia and Singapore being highlights.
SAP Quarterly Statement Q1 2021 | 4 |
Financial Results at a Glance
First Quarter 2021
IFRS | Non-IFRS1) | ||||||
€ million, unless otherwise stated | Q1 2021 | Q1 2020 | ∆ in % | Q1 2021 | Q1 2020 | ∆ in % | ∆ in % const. curr. |
Current cloud backlog2) | NA | NA | NA | 7,628 | 6,634 | 15 | 19 |
Cloud revenue | 2,145 | 2,011 | 7 | 2,147 | 2,012 | 7 | 13 |
Software licenses and support revenue | 3,283 | 3,386 | –3 | 3,283 | 3,386 | –3 | 1 |
Cloud and software revenue | 5,428 | 5,397 | 1 | 5,431 | 5,398 | 1 | 6 |
Total revenue | 6,348 | 6,521 | –3 | 6,350 | 6,522 | –3 | 2 |
Share of more predictable revenue (in %) | 78 | 76 | 2pp | 78 | 76 | 2pp | |
Operating profit (loss) | 960 | 1,210 | –21 | 1,741 | 1,482 | 17 | 24 |
Profit (loss) after tax | 1,070 | 811 | 32 | 1,722 | 1,015 | 70 | |
Basic earnings per share (in €) | 0.88 | 0.68 | 29 | 1.40 | 0.85 | 63 | |
Number of employees (FTE, March 31) | 103,142 | 101,150 | 2 | NA | NA | NA | NA |
1) For a breakdown of the individual adjustments see table “Non-IFRS Adjustments by Functional Areas” in this Quarterly Statement.
2) As this is an order entry metric, there is no IFRS equivalent.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q1 2021 | 5 |
Business Outlook 2021
SAP raised its full-year 2021 outlook on April 13 reflecting the strong new cloud business performance which is expected to reaccelerate cloud revenue growth. The Company continues to expect a software licenses revenue decline for the full year as more customers turn to the “RISE with SAP” subscription offering for their mission-critical core processes. This outlook also continues to assume the COVID-19 crisis will begin to recede as vaccine programs roll out globally, leading to a gradually improving global demand environment in the second half of 2021.
SAP expects:
· | €9.2 – 9.5 billion non-IFRS cloud revenue at constant currencies (2020: €8.09 billion), up 14% to 18% at constant currencies. The previous range was €9.1 – 9.5 billion at constant currencies. |
· | €23.4 – 23.8 billion non-IFRS cloud and software revenue at constant currencies (2020: €23.23 billion), up 1% to 2% at constant currencies. The previous range was €23.3 – 23.8 billion at constant currencies. |
· | €7.8 – 8.2 billion non-IFRS operating profit at constant currencies (2020: €8.28 billion), down 1% to 6% at constant currencies. |
· | The share of more predictable revenue (defined as the total of cloud revenue and software support revenue) to reach approximately 75% (2020: 72%). |
The Company continues to expect operating cash flow of approximately €6.0 billion (2020 €7.2 billion) primarily reflecting moderately lower profit, higher expected income tax payments and adverse currency exchange movements. Free cash flow is expected above €4.5 billion (2020 €6.0 billion), also impacted by a modest increase in capex.
While SAP’s full-year 2021 business outlook is at constant currencies, actual currency reported figures are expected to be impacted by currency exchange rate fluctuations as the Company progresses through the year. See the table below for the Q2 and FY 2021 expected currency impacts.
Expected Currency Impact Based on March 2021 Level for the Rest of the Year | ||
In percentage points | Q2 | FY |
Cloud revenue | -6pp to -4pp | -4pp to -2pp |
Cloud and software revenue | -5pp to -3pp | -3pp to -1pp |
Operating profit | -5pp to -3pp | -3pp to -1pp |
SAP focuses on three non-financial targets for 2021: customer loyalty, employee engagement, and carbon emissions. SAP continues to aim for:
· | a Customer Net Promoter Score of 5 to 10 in 2021, |
· | an Employee Engagement Index in a range of 84% to 86%, and |
· | net greenhouse gas emissions of 145 kt in 2021. |
SAP Quarterly Statement Q1 2021 | 6 |
Additional Information
This Quarterly Statement and all information therein is unaudited.
Definition of key growth metrics
Current cloud backlog (CCB) is the contractually committed cloud revenue we expect to recognize over the upcoming 12 months as of a specific key date. Thus, it is a subcomponent of our overall remaining performance obligations following IFRS 15.120. For CCB, we take into consideration committed deals only. CCB can be regarded as a lower boundary for cloud revenue to be recognized over the next 12 months, as it excludes utilization-based models without pre-commitments and committed deals, both new and renewal, closed after the key date. For our committed cloud business, we believe the CCB is a valuable indicator of go-to-market success, as it reflects both new contracts closed as well as existing contracts renewed.
Share of more predictable revenue is the total of non-IFRS cloud revenue and non-IFRS software support revenue as a percentage of total revenue.
For explanations on other key growth metrics please refer to the performance management section of SAP’s Integrated Report 2020, which can be found at www.sap.com/investor.
Webcast
SAP senior management will host a financial analyst conference call on Thursday, April 22, at 2:00 PM (CEST) / 1:00 PM (BST) / 8:00 AM (Eastern) / 5:00 AM (Pacific), The conference will be webcast live on the Company’s website at www.sap.com/investor and will be available for replay. Supplementary financial information pertaining to the first quarter results can be found at www.sap.com/investor.
Financial Analyst and Investor Conference
SAP will hold a virtual financial analyst event on Tuesday, June 15, in conjunction with its annual SAPPHIRE NOW conference kicking off on June 2nd https://events.sap.com/sapandasug/en/home.
About SAP
SAP’s strategy is to help every business run as an intelligent enterprise. As a market leader in enterprise application software, we help companies of all sizes and in all industries run at their best. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. SAP helps to give people and organizations deep business insight and fosters collaboration that helps them stay ahead of their competition. We simplify technology for companies so they can consume our software the way they want – without disruption. Our end-to-end suite of applications and services enables business and public customers across 25 industries globally to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, SAP helps the world run better and improve people’s lives. For more information, visit http://www.sap.com.
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SAP Quarterly Statement Q1 2021 | 7 |
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 Q1 2021 | 8 |
Contents
Financial and Non-Financial Key Facts (IFRS and Non-IFRS) | 10 | |
Primary Financial Statements of SAP Group (IFRS) | 12 | |
(A) | Consolidated Income Statements | 12 |
(B) | Consolidated Statements of Financial Position | 13 |
(C) | Consolidated Statements of Cash Flows | 14 |
Non-IFRS Numbers | 15 | |
(D) | Basis of Non-IFRS Presentation | 15 |
(E) | Reconciliation from Non-IFRS Numbers to IFRS Numbers | 16 |
(F) | Non-IFRS Adjustments – Actuals and Estimates | 17 |
(G) | Non-IFRS Adjustments by Functional Areas | 17 |
Disaggregations | 19 | |
(H) | Segment Reporting | 19 |
(I) | Reconciliation of Cloud Revenues and Margins | 21 |
(J) | Revenue by Region (IFRS and Non-IFRS) | 22 |
(K) | Employees by Region and Functional Areas | 23 |
Other Disclosures | 24 | |
(L) | Financial Income, Net | 24 |
(M) | Business Combinations | 24 |
(N) | Qualtrics Initial Public Offering (IPO) | 24 |
(O) | Share Based Payments | 24 |
(P) | Financial Liabilities | 24 |
SAP Quarterly Statement Q1 2021 | 9 |
Financial and Non-Financial Key Facts
(IFRS and Non-IFRS)
€ millions, unless otherwise stated | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | TY 2020 | Q1 2021 | ||||||
Revenues | ||||||||||||
Cloud (IFRS) | 2,011 | 2,044 | 1,984 | 2,041 | 8,080 | 2,145 | ||||||
Cloud (non-IFRS) | 2,012 | 2,044 | 1,984 | 2,044 | 8,085 | 2,147 | ||||||
% change – yoy | 27 | 19 | 10 | 7 | 15 | 7 | ||||||
% change constant currency – yoy | 25 | 18 | 14 | 13 | 18 | 13 | ||||||
S/4HANA Cloud (IFRS) | 168 | NA | NA | NA | NA | 227 | ||||||
S/4HANA Cloud (non-IFRS) | 168 | NA | NA | NA | NA | 227 | ||||||
% change – yoy | NA | NA | NA | NA | NA | 36 | ||||||
% change constant currency – yoy | NA | NA | NA | NA | NA | 43 | ||||||
Software licenses (IFRS) | 451 | 773 | 714 | 1,703 | 3,642 | 483 | ||||||
Software licenses (non-IFRS) | 451 | 773 | 714 | 1,703 | 3,642 | 483 | ||||||
% change – yoy | –31 | –18 | –23 | –15 | –20 | 7 | ||||||
% change constant currency – yoy | –31 | –18 | –19 | –11 | –17 | 11 | ||||||
Software support (IFRS) | 2,934 | 2,892 | 2,845 | 2,835 | 11,506 | 2,801 | ||||||
Software support (non-IFRS) | 2,934 | 2,892 | 2,845 | 2,835 | 11,506 | 2,801 | ||||||
% change – yoy | 3 | 1 | –2 | –4 | 0 | –5 | ||||||
% change constant currency – yoy | 2 | 2 | 1 | 0 | 1 | 0 | ||||||
Software licenses and support (IFRS) | 3,386 | 3,665 | 3,559 | 4,538 | 15,148 | 3,283 | ||||||
Software licenses and support (non-IFRS) | 3,386 | 3,665 | 3,559 | 4,538 | 15,148 | 3,283 | ||||||
% change – yoy | –3 | –4 | –7 | –8 | –6 | –3 | ||||||
% change constant currency – yoy | –4 | –3 | –4 | –4 | –4 | 1 | ||||||
Cloud and software (IFRS) | 5,397 | 5,709 | 5,544 | 6,579 | 23,228 | 5,428 | ||||||
Cloud and software (non-IFRS) | 5,398 | 5,709 | 5,544 | 6,582 | 23,233 | 5,431 | ||||||
% change – yoy | 6 | 3 | –2 | –4 | 1 | 1 | ||||||
% change constant currency – yoy | 5 | 3 | 2 | 1 | 3 | 6 | ||||||
Total revenue (IFRS) | 6,521 | 6,743 | 6,535 | 7,538 | 27,338 | 6,348 | ||||||
Total revenue (non-IFRS) | 6,522 | 6,744 | 6,535 | 7,541 | 27,343 | 6,350 | ||||||
% change – yoy | 7 | 1 | –4 | –6 | –1 | –3 | ||||||
% change constant currency – yoy | 5 | 1 | 0 | –2 | 1 | 2 | ||||||
Share of more predictable revenue (IFRS, in %) | 76 | 73 | 74 | 65 | 72 | 78 | ||||||
Share of more predictable revenue (non-IFRS, in %) | 76 | 73 | 74 | 65 | 72 | 78 | ||||||
Profits | ||||||||||||
Operating profit (loss) (IFRS) | 1,210 | 1,284 | 1,473 | 2,657 | 6,623 | 960 | ||||||
Operating profit (loss) (non-IFRS) | 1,482 | 1,964 | 2,069 | 2,772 | 8,287 | 1,741 | ||||||
% change | 1 | 8 | –1 | –2 | 1 | 17 | ||||||
% change constant currency | 0 | 7 | 4 | 3 | 4 | 24 | ||||||
Profit (loss) after tax (IFRS) | 811 | 885 | 1,652 | 1,934 | 5,283 | 1,070 | ||||||
Profit (loss) after tax (non-IFRS) | 1,015 | 1,395 | 2,098 | 2,026 | 6,534 | 1,722 | ||||||
% change | –6 | 6 | 34 | –7 | 6 | 70 | ||||||
Margins | ||||||||||||
Cloud gross margin (IFRS, in %) | 66.4 | 66.0 | 66.4 | 67.6 | 66.6 | 67.2 | ||||||
Cloud gross margin (non-IFRS, in %) | 69.3 | 69.5 | 69.7 | 70.3 | 69.7 | 69.6 | ||||||
Software license and support gross margin (IFRS, in %) | 85.2 | 86.4 | 86.7 | 88.2 | 86.7 | 85.7 | ||||||
Software license and support gross margin (non-IFRS, in %) | 85.7 | 87.4 | 87.6 | 88.5 | 87.4 | 86.3 | ||||||
Cloud and software gross margin (IFRS, in %) | 78.2 | 79.1 | 79.4 | 81.8 | 79.7 | 78.4 | ||||||
Cloud and software gross margin (non-IFRS, in %) | 79.6 | 81.0 | 81.2 | 82.8 | 81.2 | 79.7 | ||||||
Gross margin (IFRS, in %) | 68.3 | 69.9 | 71.1 | 74.8 | 71.2 | 70.3 | ||||||
Gross margin (non-IFRS, in %) | 69.8 | 72.6 | 73.7 | 75.8 | 73.1 | 72.3 | ||||||
Operating margin (IFRS, in %) | 18.6 | 19.0 | 22.5 | 35.2 | 24.2 | 15.1 | ||||||
Operating margin (non-IFRS, in %) | 22.7 | 29.1 | 31.7 | 36.8 | 30.3 | 27.4 |
SAP Quarterly Statement Q1 2021 | 10 |
€ millions, unless otherwise stated | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | TY 2020 | Q1 2021 | ||||||
AT&S segment – Cloud gross margin (in %) | 68.9 | 69.1 | 69.2 | 69.5 | 69.2 | 68.8 | ||||||
AT&S segment – Segment gross margin (in %) | 78.5 | 80.1 | 80.6 | 82.5 | 80.5 | 78.9 | ||||||
AT&S segment – Segment margin (in %) | 36.9 | 43.5 | 43.4 | 48.4 | 43.3 | 40.0 | ||||||
Services segment – Services gross margin (in %) | 30.1 | 36.0 | 38.9 | 33.2 | 34.4 | 36.7 | ||||||
Services segment – Segment gross margin (in %) | 26.8 | 33.7 | 36.5 | 30.1 | 31.7 | 32.8 | ||||||
Services segment – Segment margin (in %) | 14.8 | 19.7 | 23.9 | 19.2 | 19.3 | 21.2 | ||||||
Qualtrics segment – Cloud gross margin (in %) | 90.8 | 91.0 | 90.9 | 94.1 | 91.8 | 92.2 | ||||||
Qualtrics segment – Segment gross margin (in %) | 75.4 | 78.6 | 79.1 | 77.4 | 77.6 | 79.6 | ||||||
Qualtrics segment – Segment margin (in %) | –10.1 | 1.4 | 4.7 | 0.9 | –0.6 | 6.4 | ||||||
Key Profit Ratios | ||||||||||||
Effective tax rate (IFRS, in %) | 27.7 | 33.1 | 20.2 | 28.5 | 26.8 | 20.0 | ||||||
Effective tax rate (non-IFRS, in %) | 27.2 | 30.3 | 21.3 | 28.2 | 26.5 | 18.7 | ||||||
Earnings per share, basic (IFRS, in €) | 0.68 | 0.73 | 1.32 | 1.62 | 4.35 | 0.88 | ||||||
Earnings per share, basic (non-IFRS, in €) | 0.85 | 1.17 | 1.70 | 1.70 | 5.41 | 1.40 | ||||||
Order Entry and current cloud backlog | ||||||||||||
Current cloud backlog | 6,634 | 6,638 | 6,599 | 7,155 | 7,155 | 7,628 | ||||||
% change – yoy | 25 | 20 | 10 | 7 | 7 | 15 | ||||||
% change constant currency – yoy | 24 | 21 | 16 | 14 | 14 | 19 | ||||||
S/4HANA Current cloud backlog | 744 | NA | NA | NA | NA | 1,036 | ||||||
% change – yoy | NA | NA | NA | NA | NA | 39 | ||||||
% change constant currency – yoy | NA | NA | NA | NA | NA | 43 | ||||||
Orders – number of cloud deals (in transactions) | 3,113 | 3,755 | 3,975 | 6,045 | 16,888 | 4,155 | ||||||
Share of cloud orders greater than €5 million based on total cloud order entry volume (in %) | 28 | 28 | 28 | 31 | 29 | 27 | ||||||
Share of cloud orders smaller than €1 million based on total cloud order entry volume (in %) | 37 | 35 | 36 | 32 | 34 | 39 | ||||||
Orders – number of on-premise software deals (in transactions) | 10,517 | 9,175 | 11,006 | 14,918 | 45,616 | 9,687 | ||||||
Share of orders greater than €5 million based on total software order entry volume (in %) | 24 | 34 | 30 | 29 | 30 | 23 | ||||||
Share of orders smaller than €1 million based on total software order entry volume (in %) | 42 | 38 | 37 | 32 | 36 | 42 | ||||||
Liquidity and Cash Flow | ||||||||||||
Net cash flows from operating activities | 2,984 | 788 | 1,321 | 2,100 | 7,194 | 3,085 | ||||||
Capital expenditure | –333 | –164 | –155 | –164 | –816 | –153 | ||||||
Payments of lease liabilities | –72 | –84 | –115 | –107 | –378 | –84 | ||||||
Free cash flow | 2,580 | 540 | 1,052 | 1,829 | 6,000 | 2,848 | ||||||
% of total revenue (IFRS) | 40 | 8 | 16 | 24 | 22 | 45 | ||||||
% of profit after tax (IFRS) | 318 | 61 | 64 | 95 | 114 | 266 | ||||||
Group liquidity | 7,872 | 7,401 | 7,760 | 6,781 | 6,781 | 11,573 | ||||||
Financial debt (–) | –13,700 | –14,855 | –14,649 | –13,283 | –13,283 | –14,230 | ||||||
Net debt (–) | –5,827 | –7,454 | –6,889 | –6,503 | –6,503 | –2,658 | ||||||
Financial Position | ||||||||||||
Cash and cash equivalents | 7,816 | 6,205 | 7,434 | 5,311 | 5,311 | 10,332 | ||||||
Goodwill | 29,731 | 29,214 | 28,184 | 27,560 | 27,560 | 29,374 | ||||||
Total assets | 62,947 | 60,709 | 59,278 | 58,472 | 58,472 | 66,495 | ||||||
Contract liabilities (current) | 6,726 | 5,791 | 4,237 | 4,150 | 4,150 | 6,800 | ||||||
Equity ratio (total equity in % of total assets) | 49 | 48 | 50 | 51 | 51 | 52 | ||||||
Non-Financials | ||||||||||||
Number of employees (quarter end)1) | 101,150 | 101,379 | 101,450 | 102,430 | 102,430 | 103,142 | ||||||
Employee retention (in %, rolling 12 months) | 93.3 | 93.9 | 94.8 | 95.3 | 95.3 | 95.4 | ||||||
Women in management (in %, quarter end) | 26.8 | 27.3 | 27.3 | 27.5 | 27.5 | 27.6 | ||||||
Greenhouse gas emissions (in kilotons) | 65 | 25 | 25 | 20 | 135 | 30 |
1) In full-time equivalents.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q1 2021 | 11 |
Primary Financial Statements of SAP Group (IFRS)
(A) | Consolidated Income Statements |
€ millions, unless otherwise stated | Q1 2021 | Q1 2020 | ∆ in % | |||
Cloud | 2,145 | 2,011 | 7 | |||
Software licenses | 483 | 451 | 7 | |||
Software support | 2,801 | 2,934 | –5 | |||
Software licenses and support | 3,283 | 3,386 | –3 | |||
Cloud and software | 5,428 | 5,397 | 1 | |||
Services | 919 | 1,124 | –18 | |||
Total revenue | 6,348 | 6,521 | –3 | |||
Cost of cloud | –704 | –675 | 4 | |||
Cost of software licenses and support | –471 | –502 | –6 | |||
Cost of cloud and software | –1,175 | –1,176 | 0 | |||
Cost of services | –709 | –890 | –20 | |||
Total cost of revenue | –1,884 | –2,066 | –9 | |||
Gross profit | 4,464 | 4,455 | 0 | |||
Research and development | –1,171 | –1,051 | 11 | |||
Sales and marketing | –1,663 | –1,851 | –10 | |||
General and administration | –505 | –315 | 60 | |||
Restructuring | –157 | –15 | >100 | |||
Other operating income/expense, net | –7 | –12 | –41 | |||
Total operating expenses | –5,387 | –5,311 | 1 | |||
Operating profit (loss) | 960 | 1,210 | –21 | |||
Other non-operating income/expense, net | 62 | –49 | <-100 | |||
Finance income | 547 | 163 | >100 | |||
Finance costs | –232 | –203 | 15 | |||
Financial income, net | 315 | –39 | <-100 | |||
Profit (loss) before tax | 1,337 | 1,122 | 19 | |||
Income tax expense | –267 | –310 | –14 | |||
Profit (loss) after tax | 1,070 | 811 | 32 | |||
Attributable to owners of parent | 1,040 | 814 | 28 | |||
Attributable to non-controlling interests | 30 | –3 | <-100 | |||
Earnings per share, basic (in €)1) | 0.88 | 0.68 | 29 | |||
Earnings per share, diluted (in €)1) | 0.88 | 0.68 | 29 |
1) For the three months ended March 31, 2021 and 2020, the weighted average number of shares was 1,180 million (diluted 1,180 million) and 1,191 million (diluted: 1,191 million), respectively (treasury stock excluded).
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q1 2021 | 12 |
(B) Consolidated Statements of Financial Position
as at 3/31/2021 and 12/31/2020 | ||||
€ millions | 2021 | 2020 | ||
Cash and cash equivalents | 10,332 | 5,311 | ||
Other financial assets | 1,413 | 1,635 | ||
Trade and other receivables | 6,617 | 6,593 | ||
Other non-financial assets | 1,434 | 1,321 | ||
Tax assets | 282 | 210 | ||
Total current assets | 20,078 | 15,069 | ||
Goodwill | 29,374 | 27,560 | ||
Intangible assets | 4,082 | 3,784 | ||
Property, plant, and equipment | 4,947 | 5,041 | ||
Other financial assets | 4,163 | 3,512 | ||
Trade and other receivables | 95 | 137 | ||
Other non-financial assets | 2,056 | 1,926 | ||
Tax assets | 272 | 271 | ||
Deferred tax assets | 1,427 | 1,173 | ||
Total non-current assets | 46,417 | 43,402 | ||
Total assets | 66,495 | 58,472 | ||
€ millions | 2021 | 2020 | ||
Trade and other payables | 1,203 | 1,213 | ||
Tax liabilities | 504 | 414 | ||
Financial liabilities | 4,594 | 2,348 | ||
Other non-financial liabilities | 3,588 | 4,643 | ||
Provisions | 96 | 73 | ||
Contract liabilities | 6,800 | 4,150 | ||
Total current liabilities | 16,786 | 12,842 | ||
Trade and other payables | 106 | 98 | ||
Tax liabilities | 746 | 667 | ||
Financial liabilities | 12,369 | 13,605 | ||
Other non-financial liabilities | 944 | 770 | ||
Provisions | 375 | 368 | ||
Deferred tax liabilities | 239 | 158 | ||
Contract liabilities | 93 | 36 | ||
Total non-current liabilities | 14,873 | 15,702 | ||
Total liabilities | 31,659 | 28,544 | ||
Issued capital | 1,229 | 1,229 | ||
Share premium | 970 | 545 | ||
Retained earnings | 33,930 | 32,026 | ||
Other components of equity | 502 | –1,011 | ||
Treasury shares | –3,072 | –3,072 | ||
Equity attributable to owners of parent | 33,558 | 29,717 | ||
Non-controlling interests | 1,278 | 211 | ||
Total equity | 34,836 | 29,928 | ||
Total equity and liabilities | 66,495 | 58,472 |
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q1 2021 | 13 |
(C) Consolidated Statements of Cash Flows
€ millions | Q1 2021 | Q1 2020 | ||
Profit (loss) after tax | 1,070 | 811 | ||
Adjustments to reconcile profit (loss) after tax to net cash flows from operating activities: | ||||
Depreciation and amortization | 436 | 464 | ||
Share-based payment expense | 472 | 93 | ||
Income tax expense | 267 | 310 | ||
Financial income, net | –315 | 39 | ||
Decrease/increase in allowances on trade receivables | 0 | 11 | ||
Other adjustments for non-cash items | 119 | –1 | ||
Decrease/increase in trade and other receivables | 185 | 522 | ||
Decrease/increase in other assets | –108 | –264 | ||
Increase/decrease in trade payables, provisions, and other liabilities | –936 | –835 | ||
Increase/decrease in contract liabilities | 2,503 | 2,451 | ||
Share-based payments | –106 | –162 | ||
Interest paid | –83 | –109 | ||
Interest received | 8 | 25 | ||
Income taxes paid, net of refunds | –425 | –371 | ||
Net cash flows from operating activities | 3,085 | 2,984 | ||
Business combinations, net of cash and cash equivalents acquired | –930 | –28 | ||
Purchase of intangible assets or property, plant, and equipment | –153 | –333 | ||
Proceeds from sales of intangible assets or property, plant, and equipment | 21 | 24 | ||
Purchase of equity or debt instruments of other entities | –228 | –133 | ||
Proceeds from sales of equity or debt instruments of other entities | 322 | 96 | ||
Net cash flows from investing activities | –967 | –373 | ||
Dividends paid on non-controlling interests | –2 | 0 | ||
Purchase of treasury shares | 0 | –150 | ||
Proceeds from changes in ownership interests in subsidiaries that do not result in the loss of control | 1,847 | 0 | ||
Proceeds from borrowings | 1,450 | 11 | ||
Repayments of borrowings | –550 | –12 | ||
Payments of lease liabilities | –84 | –72 | ||
Net cash flows from financing activities | 2,661 | –223 | ||
Effect of foreign currency rates on cash and cash equivalents | 243 | 113 | ||
Net decrease/increase in cash and cash equivalents | 5,022 | 2501 | ||
Cash and cash equivalents at the beginning of the period | 5,311 | 5,314 | ||
Cash and cash equivalents at the end of the period | 10,332 | 7,816 | ||
Due to rounding, numbers may not add up precisely. |
SAP Quarterly Statement Q1 2021 | 14 |
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 Q1 2021 | 15 |
(E) Reconciliation from Non-IFRS Numbers to IFRS Numbers
€ millions, unless otherwise stated | Q1 2021 | Q1 2020 | ∆ in % | |||||||||||||||||||
IFRS | Adj. | Non-IFRS | Currency Impact | Non-IFRS Constant Currency | IFRS | Adj. | Non-IFRS | IFRS | Non-IFRS | Non-IFRS Constant Currency1) | ||||||||||||
Revenue Numbers | ||||||||||||||||||||||
Cloud | 2,145 | 2 | 2,147 | 132 | 2,280 | 2,011 | 1 | 2,012 | 7 | 7 | 13 | |||||||||||
Software licenses | 483 | 0 | 483 | 19 | 501 | 451 | 0 | 451 | 7 | 7 | 11 | |||||||||||
Software support | 2,801 | 0 | 2,801 | 127 | 2,927 | 2,934 | 0 | 2,934 | –5 | –5 | 0 | |||||||||||
Software licenses and support | 3,283 | 0 | 3,283 | 145 | 3,429 | 3,386 | 0 | 3,386 | –3 | –3 | 1 | |||||||||||
Cloud and software | 5,428 | 2 | 5,431 | 278 | 5,708 | 5,397 | 1 | 5,398 | 1 | 1 | 6 | |||||||||||
Services | 919 | 0 | 919 | 47 | 966 | 1,124 | 0 | 1,124 | –18 | –18 | –14 | |||||||||||
Total revenue | 6,348 | 2 | 6,350 | 325 | 6,675 | 6,521 | 1 | 6,522 | –3 | –3 | 2 | |||||||||||
Operating Expense Numbers | ||||||||||||||||||||||
Cost of cloud | –704 | 51 | –654 | –675 | 56 | –618 | 4 | 6 | ||||||||||||||
Cost of software licenses and support | –471 | 21 | –450 | –502 | 18 | –483 | –6 | –7 | ||||||||||||||
Cost of cloud and software | –1,175 | 71 | –1,103 | –1,176 | 75 | –1,102 | 0 | 0 | ||||||||||||||
Cost of services | –709 | 52 | –657 | –890 | 22 | –868 | –20 | –24 | ||||||||||||||
Total cost of revenue | –1,884 | 123 | –1,760 | –2,066 | 97 | –1,969 | –9 | –11 | ||||||||||||||
Gross profit | 4,464 | 126 | 4,590 | 4,455 | 98 | 4,553 | 0 | 1 | ||||||||||||||
Research and development | –1,171 | 94 | –1,077 | –1,051 | 25 | –1,027 | 11 | 5 | ||||||||||||||
Sales and marketing | –1,663 | 188 | –1,475 | –1,851 | 126 | –1,725 | –10 | –15 | ||||||||||||||
General and administration | –505 | 215 | –290 | –315 | 7 | –307 | 60 | –6 | ||||||||||||||
Restructuring | –157 | 157 | 0 | –15 | 15 | 0 | >100 | NA | ||||||||||||||
Other operating income/expense, net | –7 | 0 | –7 | –12 | 0 | –12 | –41 | –41 | ||||||||||||||
Total operating expenses | –5,387 | 778 | –4,609 | –222 | –4,831 | –5,311 | 271 | –5,040 | 1 | –9 | –4 | |||||||||||
Profit Numbers | ||||||||||||||||||||||
Operating profit (loss) | 960 | 780 | 1,741 | 102 | 1,843 | 1,210 | 272 | 1,482 | –21 | 17 | 24 | |||||||||||
Other non-operating income/expense, net | 62 | 0 | 62 | –49 | 0 | –49 | <-100 | <-100 | ||||||||||||||
Finance income | 547 | 0 | 547 | 163 | 0 | 163 | >100 | >100 | ||||||||||||||
Finance costs | –232 | 0 | –232 | –203 | 0 | –203 | 15 | 15 | ||||||||||||||
Financial income, net | 315 | 0 | 315 | –39 | 0 | –39 | <-100 | <-100 | ||||||||||||||
Profit (loss) before tax | 1,337 | 780 | 2,117 | 1,122 | 272 | 1,394 | 19 | 52 | ||||||||||||||
Income tax expense | –267 | –128 | –395 | –310 | –69 | –379 | –14 | 4 | ||||||||||||||
Profit (loss) after tax | 1,070 | 652 | 1,722 | 811 | 203 | 1,015 | 32 | 70 | ||||||||||||||
Attributable to owners of parent | 1,040 | 608 | 1,648 | 814 | 203 | 1,018 | 28 | 62 | ||||||||||||||
Attributable to non-controlling interests | 30 | 45 | 74 | –3 | 0 | –3 | <-100 | <-100 | ||||||||||||||
Key Ratios | ||||||||||||||||||||||
Operating margin (in %) | 15.1 | 27.4 | 27.6 | 18.6 | 22.7 | –3.4pp | 4.7pp | 4.9pp | ||||||||||||||
Effective tax rate (in %)2) | 20.0 | 18.7 | 27.7 | 27.2 | –7.7pp | –8.5pp | ||||||||||||||||
Earnings per share, basic (in €) | 0.88 | 1.40 | 0.68 | 0.85 | 29 | 63 |
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.
2) The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q1 2021 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 Q1 2020 mainly resulted from tax effects of acquisition-related charges and share-based payment expenses.
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q1 2021 | 16 |
(F) Non-IFRS Adjustments – Actuals and Estimates
€ millions | Estimated Amounts for Full Year 2021 | Q1 2021 | Q1 2020 | |||
Operating profit (loss) (IFRS) | 960 | 1,210 | ||||
Revenue adjustments | 0–30 | 2 | 1 | |||
Adjustment for acquisition-related charges | 540–640 | 149 | 162 | |||
Adjustment for share-based payment expenses | 2,300–2,800 | 472 | 93 | |||
Adjustment for restructuring | 150–200 | 157 | 15 | |||
Operating expense adjustments | 778 | 271 | ||||
Operating profit (loss) adjustments | 780 | 272 | ||||
Operating profit (loss) (non-IFRS) | 1,741 | 1,482 |
Due to rounding, numbers may not add up precisely.
(G) Non-IFRS Adjustments by Functional Areas
€ millions | Q1 2021 | Q1 2020 | ||||||||||||||||||
IFRS | Acquisition- Related | SBP1) | Restruc- turing | Non-IFRS | IFRS | Acquisition- Related | SBP1) | Restruc turing | Non-IFRS | |||||||||||
Cost of cloud | –704 | 39 | 11 | 0 | –654 | –675 | 53 | 3 | 0 | –618 | ||||||||||
Cost of software licenses and support | –471 | 8 | 13 | 0 | –450 | –502 | 11 | 7 | 0 | –483 | ||||||||||
Cost of services | –709 | 5 | 47 | 0 | –657 | –890 | 1 | 22 | 0 | –868 | ||||||||||
Research and development | –1,171 | 2 | 92 | 0 | –1,077 | –1,051 | 2 | 23 | 0 | –1,027 | ||||||||||
Sales and marketing | –1,663 | 90 | 98 | 0 | –1,475 | –1,851 | 95 | 31 | 0 | –1,725 | ||||||||||
General and administration | –505 | 5 | 210 | 0 | –290 | –315 | 1 | 7 | 0 | –307 | ||||||||||
Restructuring | –157 | 0 | 0 | 157 | 0 | –15 | 0 | 0 | 15 | 0 | ||||||||||
Other operating income/expense, net | –7 | 0 | 0 | 0 | –7 | –12 | 0 | 0 | 0 | –12 | ||||||||||
Total operating expenses | –5,387 | 149 | 472 | 157 | –4,609 | –5,311 | 162 | 93 | 15 | –5,040 |
1) Share-based Payments
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q1 2021 | 17 |
If not presented in a separate line item in our income statement, the restructuring expenses would break down as follows:
€ millions | Q1 2021 | Q1 2020 | ||
Cost of cloud | –130 | 0 | ||
Cost of software licenses and support | –3 | –2 | ||
Cost of services | –14 | –4 | ||
Research and development | –9 | –5 | ||
Sales and marketing | –2 | –2 | ||
General and administration | –1 | 0 | ||
Restructuring expenses | –157 | –15 |
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q1 2021 | 18 |
Disaggregations
(H) Segment Reporting
(H.1) Segment Policies and Segment Changes
SAP has three reportable segments: the Applications, Technology & Support segment, the Qualtrics segment, and the Services segment.
In the first quarter 2021, the following changes to the composition of our operating segments occurred due to internal reorganizations and acquisitions:
– | SAP acquired Signavio GmbH to complement its Business Process Intelligence offerings. Consequently, this acquisition led to a new operating segment called Business Process Intelligence. Due to its size, however, Business Process Intelligence is not a reportable segment. |
– | In the beginning of 2021, the Concur segment was dissolved and integrated into the Applications, Technology & Support segment and the Services segment. |
– | In the first quarter of 2021, the finance and legal functions of Qualtrics were reintegrated into the Qualtrics segment. |
For a more detailed description of SAP’s segment reporting, see Note (C.1) “Results of Segments” of our Integrated Report 2020.
(H.2) Segment Reporting – Quarter
Applications, Technology & Support
€ millions, unless otherwise stated (Non-IFRS) | Q1 2021 | Q1 2020 | ∆ in % | ∆ in % | ||||||
Actual Currency | Constant Currency | Actual Currency | Actual Currency | Constant Currency | ||||||
Cloud | 1,958 | 2,075 | 1,890 | 4 | 10 | |||||
Software licenses | 482 | 501 | 447 | 8 | 12 | |||||
Software support | 2,801 | 2,927 | 2,933 | –5 | 0 | |||||
Software licenses and support | 3,283 | 3,428 | 3,381 | –3 | 1 | |||||
Cloud and software | 5,241 | 5,504 | 5,271 | –1 | 4 | |||||
Services | 73 | 76 | 84 | –13 | –10 | |||||
Total segment revenue | 5,314 | 5,579 | 5,355 | –1 | 4 | |||||
Cost of cloud | –611 | –649 | –587 | 4 | 10 | |||||
Cost of software licenses and support | –412 | –430 | –452 | –9 | –5 | |||||
Cost of cloud and software | –1,023 | –1,079 | –1,039 | –2 | 4 | |||||
Cost of services | –99 | –103 | –112 | –12 | –8 | |||||
Total cost of revenue | –1,122 | –1,182 | –1,151 | –3 | 3 | |||||
Segment gross profit | 4,192 | 4,398 | 4,204 | 0 | 5 | |||||
Other segment expenses | –2,065 | –2,158 | –2,225 | –7 | –3 | |||||
Segment profit (loss) | 2,127 | 2,239 | 1,978 | 8 | 13 | |||||
Margins | ||||||||||
Cloud gross margin (in %) | 68.8 | 68.7 | 68.9 | –0.1pp | –0.2pp | |||||
Segment gross margin (in %) | 78.9 | 78.8 | 78.5 | 0.4pp | 0.3pp | |||||
Segment margin (in %) | 40.0 | 40.1 | 36.9 | 3.1pp | 3.2pp |
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q1 2021 | 19 |
Qualtrics
€ millions, unless otherwise stated (Non-IFRS) | Q1 2021 | Q1 2020 | ∆ in % | ∆ in % | ||||||
Actual Currency | Constant Currency | Actual Currency | Actual Currency | Constant Currency | ||||||
Cloud | 160 | 174 | 120 | 33 | 45 | |||||
Software licenses | 0 | 0 | 0 | NA | NA | |||||
Software support | 0 | 0 | 0 | NA | NA | |||||
Software licenses and support | 0 | 0 | 0 | NA | NA | |||||
Cloud and software | 160 | 174 | 120 | 33 | 45 | |||||
Services | 43 | 47 | 42 | 3 | 12 | |||||
Total segment revenue | 202 | 221 | 161 | 25 | 37 | |||||
Cost of cloud | –12 | –13 | –11 | 13 | 21 | |||||
Cost of software licenses and support | 0 | 0 | 0 | NA | NA | |||||
Cost of cloud and software | –12 | –13 | –11 | 13 | 21 | |||||
Cost of services | –29 | –31 | –29 | 1 | 8 | |||||
Total cost of revenue | –41 | –44 | –40 | 4 | 12 | |||||
Segment gross profit | 161 | 176 | 122 | 32 | 45 | |||||
Other segment expenses | –148 | –164 | –138 | 7 | 19 | |||||
Segment profit (loss) | 13 | 12 | –16 | <-100 | <-100 | |||||
Margins | ||||||||||
Cloud gross margin (in %) | 92.2 | 92.3 | 90.8 | 1.4pp | 1.5pp | |||||
Segment gross margin (in %) | 79.6 | 79.9 | 75.4 | 4.2pp | 4.5pp | |||||
Segment margin (in %) | 6.4 | 5.5 | –10.1 | 16.5pp | 15.6pp |
Due to rounding, numbers may not add up precisely.
Services
€ millions, unless otherwise stated (Non-IFRS) | Q1 2021 | Q1 2020 | ∆ in % | ∆ in % | ||||||
Actual Currency | Constant Currency | Actual Currency | Actual Currency | Constant Currency | ||||||
Cloud | 0 | 0 | 0 | NA | NA | |||||
Software licenses | 0 | 0 | 0 | NA | NA | |||||
Software support | 0 | 0 | 1 | <-100 | <-100 | |||||
Software licenses and support | 0 | 0 | 1 | <-100 | <-100 | |||||
Cloud and software | 0 | 0 | 1 | –63 | –63 | |||||
Services | 799 | 839 | 909 | –12 | –8 | |||||
Total segment revenue | 800 | 839 | 910 | –12 | –8 | |||||
Cost of cloud | –23 | –24 | –18 | 26 | 34 | |||||
Cost of software licenses and support | –8 | –9 | –12 | –33 | –29 | |||||
Cost of cloud and software | –31 | –33 | –30 | 2 | 8 | |||||
Cost of services | –506 | –530 | –635 | –20 | –17 | |||||
Total cost of revenue | –537 | –563 | –666 | –19 | –15 | |||||
Segment gross profit | 262 | 276 | 244 | 7 | 13 | |||||
Other segment expenses | –93 | –97 | –109 | –15 | –11 | |||||
Segment profit (loss) | 170 | 179 | 135 | 26 | 33 | |||||
Margins | ||||||||||
Services gross margin (in %) | 36.7 | 36.8 | 30.1 | 6.6pp | 6.7pp | |||||
Segment gross margin (in %) | 32.8 | 32.9 | 26.8 | 6.0pp | 6.1pp | |||||
Segment margin (in %) | 21.2 | 21.3 | 14.8 | 6.4pp | 6.5pp |
Due to rounding, numbers may not add up precisely.
SAP Quarterly Statement Q1 2021 | 20 |
(I) Reconciliation of Cloud Revenues and Margins
Q1 2021 | Q1 2020 | ∆ in % | ||||||||||||||||||||||
€ millions, unless otherwise stated
| IFRS | Adj. | Non-IFRS | Currency Impact | Non-IFRS Constant Currency | IFRS | Adj. | Non-IFRS | IFRS | Non-IFRS | Non-IFRS Constant Currency3) | |||||||||||||
Cloud revenue – SaaS/PaaS1) | Intelligent Spend | 661 | 0 | 661 | 46 | 707 | 719 | 0 | 719 | –8 | –8 | –2 | ||||||||||||
Other | 1,270 | 2 | 1,273 | 73 | 1,346 | 1,087 | 1 | 1,088 | 17 | 17 | 24 | |||||||||||||
Total | 1,931 | 2 | 1,933 | 119 | 2,052 | 1,806 | 1 | 1,807 | 7 | 7 | 14 | |||||||||||||
Cloud revenue – IaaS2) | 214 | 0 | 214 | 13 | 228 | 205 | 0 | 205 | 5 | 5 | 11 | |||||||||||||
Cloud revenue | 2,145 | 2 | 2,147 | 132 | 2,280 | 2,011 | 1 | 2,012 | 7 | 7 | 13 | |||||||||||||
Cloud gross margin – SaaS/PaaS1) (in %) | Intelligent Spend | 78.3 | 78.7 | 79.1 | 78.6 | 78.7 | –0.3pp | –0.1pp | 0.4pp | |||||||||||||||
Other | 67.2 | 71.0 | 70.7 | 65.2 | 70.2 | 2.1pp | 0.8pp | 0.5pp | ||||||||||||||||
Total | 71.0 | 73.6 | 73.6 | 70.5 | 73.6 | 0.5pp | –0.0pp | –0.0pp | ||||||||||||||||
Cloud gross margin – IaaS2) (in %) | 32.4 | 33.1 | 32.8 | 30.6 | 31.0 | 1.8pp | 2.2pp | 1.8pp | ||||||||||||||||
Cloud gross margin (in %) | 67.2 | 69.6 | 69.5 | 66.4 | 69.3 | 0.7pp | 0.3pp | 0.2pp |
1) Software as a Service/Platform as a Service
2) Infrastructure as a Service
3) 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 Q1 2021 | 21 |
(J) Revenue by Region (IFRS and Non-IFRS)
€ millions | Q1 2021 | Q1 2020 | ∆ in % | |||||||||||||||||||
IFRS | Adj. | Non-IFRS | Currency Impact | Non-IFRS Constant Currency | IFRS | Adj. | Non-IFRS | IFRS | Non-IFRS | Non-IFRS Constant Currency1) | ||||||||||||
Cloud Revenue by Region | ||||||||||||||||||||||
EMEA | 745 | 1 | 746 | 19 | 765 | 618 | 0 | 618 | 21 | 21 | 24 | |||||||||||
Americas | 1,114 | 1 | 1,115 | 103 | 1,218 | 1,142 | 1 | 1,144 | -2 | -2 | 7 | |||||||||||
APJ | 286 | 0 | 286 | 10 | 296 | 251 | 0 | 251 | 14 | 14 | 18 | |||||||||||
Cloud revenue | 2,145 | 2 | 2,147 | 132 | 2,280 | 2,011 | 1 | 2,012 | 7 | 7 | 13 | |||||||||||
Cloud and Software Revenue by Region | ||||||||||||||||||||||
EMEA | 2,433 | 1 | 2,435 | 45 | 2,480 | 2,326 | 0 | 2,326 | 5 | 5 | 7 | |||||||||||
Americas | 2,118 | 1 | 2,118 | 198 | 2,316 | 2,252 | 1 | 2,253 | –6 | –6 | 3 | |||||||||||
APJ | 877 | 0 | 877 | 35 | 912 | 820 | 0 | 820 | 7 | 7 | 11 | |||||||||||
Cloud and software revenue | 5,428 | 2 | 5,431 | 278 | 5,708 | 5,397 | 1 | 5,398 | 1 | 1 | 6 | |||||||||||
Total Revenue by Region | ||||||||||||||||||||||
Germany | 951 | 1 | 952 | 1 | 953 | 894 | 0 | 894 | 6 | 6 | 7 | |||||||||||
Rest of EMEA | 1,884 | 1 | 1,885 | 50 | 1,935 | 1,895 | 0 | 1,895 | –1 | -1 | 2 | |||||||||||
Total EMEA | 2,835 | 1 | 2,837 | 51 | 2,887 | 2,789 | 0 | 2,789 | 2 | 2 | 4 | |||||||||||
United States | 2,035 | 1 | 2,036 | 183 | 2,218 | 2,266 | 1 | 2,267 | -10 | -10 | -2 | |||||||||||
Rest of Americas | 486 | 0 | 486 | 51 | 537 | 503 | 0 | 503 | -3 | -3 | 7 | |||||||||||
Total Americas | 2,521 | 1 | 2,522 | 234 | 2,756 | 2,769 | 1 | 2,770 | -9 | -9 | -1 | |||||||||||
Japan | 322 | 0 | 322 | 21 | 343 | 306 | 0 | 306 | 5 | 5 | 12 | |||||||||||
Rest of APJ | 670 | 0 | 670 | 18 | 688 | 657 | 0 | 657 | 2 | 2 | 5 | |||||||||||
Total APJ | 992 | 0 | 992 | 40 | 1,031 | 963 | 0 | 963 | 3 | 3 | 7 | |||||||||||
Total revenue | 6,348 | 2 | 6,350 | 325 | 6,675 | 6,521 | 1 | 6,522 | -3 | -3 | 2 |
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 Q1 2021 | 22 |
(K) Employees by Region and Functional Areas
Full-time equivalents | 3/31/2021 | 3/31/2020 | |||||||||||||
EMEA | Americas | APJ | Total | EMEA | Americas | APJ | Total | ||||||||
Cloud and software | 5,896 | 4,486 | 5,089 | 15,471 | 6,469 | 4,561 | 5,425 | 16,455 | |||||||
Services | 8,468 | 5,863 | 6,079 | 20,410 | 8,253 | 6,049 | 5,940 | 20,241 | |||||||
Research and development | 14,073 | 6,103 | 9,944 | 30,120 | 12,842 | 5,939 | 9,273 | 28,054 | |||||||
Sales and marketing | 10,404 | 10,450 | 4,924 | 25,779 | 10,187 | 10,485 | 5,186 | 25,859 | |||||||
General and administration | 3,407 | 2,188 | 1,243 | 6,838 | 3,211 | 2,215 | 1,236 | 6,661 | |||||||
Infrastructure | 2,501 | 1,258 | 766 | 4,524 | 2,205 | 1,009 | 665 | 3,879 | |||||||
SAP Group (3/31) | 44,749 | 30,348 | 28,045 | 103,142 | 43,166 | 30,259 | 27,726 | 101,150 | |||||||
Thereof acquisitions1) | 359 | 41 | 26 | 426 | 0 | 0 | 0 | 0 | |||||||
SAP Group (three months' end average) | 44,389 | 30,295 | 28,007 | 102,691 | 43,143 | 30,088 | 27,632 | 100,864 | |||||||
1) Acquisitions closed between January 1 and March 31 of the respective year |
SAP Quarterly Statement Q1 2021 | 23 |
Other Disclosures
(L) Financial Income, Net
In the first quarter 2021, finance income mainly consists of gains from disposal or IFRS 9-related fair value adjustments of equity securities totaling €530 million (Q1/2020: €123 million).
In the first quarter 2021, finance costs mainly consist of losses from disposal or IFRS 9-related fair value adjustments of equity securities totaling €161 million (Q1/2020: €102 million).
(M) Business Combinations
In January 2021, SAP announced it had entered into an agreement to acquire Signavio GmbH (Berlin, Germany), a leader in the enterprise business process intelligence and process management space. The initial purchase price is approx. €950 million. The transaction closed on March 5, following satisfaction of regulatory and other approvals; the operating results and assets and liabilities are reflected in our consolidated financial statements starting on that date.
(N) Qualtrics Initial Public Offering (IPO)
On January 28, 2021, Qualtrics International Inc. (Qualtrics) successfully issued 12% of its shares on the Nasdaq Stock Market (NASDAQ) which resulted in SAP’s ownership decreasing to 83% (however, SAP continues to hold high-vote Class B common stock and, as a result, its current voting power is significantly higher). The IPO related cash inflow amounted to €1,847 million and the initial value of the non-controlling interests in net assets was calculated to be €909 million.
(O) Share Based Payments
In January 2021, 65.9 million Qualtrics RSU (Retention Share Units) awards were granted to encourage and enable Qualtrics executives and employees, upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business, to acquire an ownership interest in the Company.
Upon completion of a voluntary exchange offer for eligible Qualtrics employees on January 28, 2021, 5.4 million of Qualtrics Rights and 1.3 million SAP RSU awards were exchanged into 12.8 million Qualtrics RSU awards. The terms of the voluntary exchange offer, including the exchange ratio, were designed to preserve the intrinsic value of the Qualtrics Rights and SAP RSUs that were tendered.
(P) Financial Liabilities
In March 2021, SAP drew two short-term bank loans of €950 million and €500 million with tenors of one year. The loans can be repaid flexibly over time and bear interest of the Euribor reference rate plus 0.08% and 0.05%, respectively.
SAP Quarterly Statement Q1 2021 | 24 |