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Artificial Intelligence: Press Release

SAP Reports 20% Growth in Software and Software-Related Service Revenues

13% Growth in Non-IFRS Software and Software-Related Service Revenues at Constant Currencies

SAP AG on Wednesday announced its preliminary financial results for the third quarter ended September 30, 2010.

"We are pleased to report double-digit growth in software and software related service revenue and the contribution of Sybase," said Werner Brandt, CFO of SAP AG. "All of the regions reported growth in the third quarter, with particular strength in the U.S. and the emerging markets of Asia, Europe and Latin America. We saw a good mix of revenues among small, midsized and large enterprises, and we had an increase in deal volume. On the product side, Business Analytics remains a top priority among our customers and continues to be a principal growth driver."

"We were already delivering our solutions on premise and on demand. With the acquisition of Sybase, we now have the most complete and heterogeneous mobile platform in the industry and with it the added ability to deliver our solutions on device as well," said Bill McDermott, Co-CEO of SAP. "As customers continue to reengage, seeking opportunities to grow their businesses and differentiate themselves from their competitors, we are able to help them be best run businesses with our unique strategy to deliver a full suite of enterprise software and next generation business intelligence on any device at any time."

"The experience we have gained with our more than 100,000 customers over many years tells us that they want choice, openness and innovation from their technology partners," said Jim Hagemann Snabe, Co-CEO of SAP. "The opposite seems to be happening as more technology companies want to lock in their customers to a single vendor on one proprietary technology stack. This has made our business even more important to our customers because at SAP we provide choice, innovation, co-innovation, a completely open platform and the resources of a vast ecosystem of partners, with whom we continue to forge even stronger relationships. Our in-memory High-Performance Analytic Appliance called SAP HANA is a prime example of cutting edge technology delivered through co-innovation with partners."

FINANCIAL HIGHLIGHTS - Third Quarter 2010


Third Quarter 2010(1)
---------------------
IFRS
----
euro million, unless Q3 2010 Q3 2009 % change
otherwise stated ------- ------- --------
----------------
Software revenue 656 525 25%
---------------- --- --- ---
Software and
software-related
service revenue 2,316 1,937 20%
----------------- ----- ----- ---
Total revenue 3,003 2,508 20%
------------- ----- ----- ---
Total operating
expenses -2,287 -1,889 21%
--------------- ------ ------ ---
-thereof
restructuring 2 -10 <-100%
-------------- --- --- ------
Operating profit 716 619 16%
---------------- --- --- ---
Operating margin (%) 23.8 24.7 -0.9pp
-------------------- ---- ---- ------
Profit after tax 501 447 12%
---------------- --- --- ---
Basic earnings per
share (euro ) 0.42 0.38 11%
------------------ ---- ---- ---

 

 

 


Third Quarter 2010(1)
---------------------
Non-IFRS(2)
-----------
%
euro million, unless Q3 2010 Q3 2009 change % change
const.
otherwise stated ------- ------- ------- curr.(3)
---------------- ---------
Software revenue 656 525 25% 15%
---------------- --- --- --- ---
Software and
software-related
service revenue 2,352 1,937 21% 13%
----------------- ----- ----- --- ---
Total revenue 3,039 2,508 21% 13%
------------- ----- ----- --- ---
Total operating
expenses -2,157 -1,821 18% 11%
--------------- ------ ------ --- ---
-thereof
restructuring -1 -11 -91%
-------------- --- --- ---
Operating profit 883 687 29% 16%
---------------- --- --- --- ---
Operating margin (%) 29.1 27.4 1.7pp 0.8pp
-------------------- ---- ---- ----- -----
Profit after tax 605 499 21%
---------------- --- --- ---
Basic earnings per
share (euro ) 0.51 0.42 21%
------------------ ---- ---- ---


1) All figures are preliminary and unaudited.
2) Adjustments in the revenue line items are for the support revenue
that would have been recognized had the acquired entities remained
stand-alone entities but that SAP is not permitted to recognize as
revenue under IFRS as a result of business combination accounting
rules. Adjustments in the operating expense line items are for
acquisition-related charges and discontinued activities.
3) Constant currency revenue and operating income figures are
calculated by translating revenue and operating income of the
current period using the average exchange rates from the previous
year's respective period instead of the current period. 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.

Third quarter and year to date 2010 revenue, profit and cash flow figures include the revenue, profits and cash flows from Sybase for the period since the acquisition (July 26, 2010). The comparative prior year numbers do not include any Sybase revenues, profits or cash flows.

 

Revenues - Third Quarter 2010

  • IFRS software and software-related service revenues were euro 2.32 billion (2009: euro 1.94 billion), an increase of 20%. Non-IFRS software and software-related service revenues were euro 2.35 billion (2009: euro 1.94 billion), an increase of 21% (13% at constant currencies).
  • Excluding the contribution from Sybase, SAP's business contributed 15 percentage points to the growth of our IFRS and Non-IFRS software and software related service revenues (7 percentage points at constant currencies).
  • IFRS software revenues were euro 656 million (2009: euro 525 million), an increase of 25% (15% at constant currencies).
  • IFRS total revenues were euro 3.00 billion (2009: euro 2.51 billion), an increase of 20%. Non-IFRS total revenues were euro 3.04 billion (2009: euro 2.51 billion), an increase of 21% (13% at constant currencies)

 

Third quarter 2010 Non-IFRS revenue figures exclude a deferred support revenue write-down from acquisitions of euro 36 million.

Income - Third Quarter 2010

  • IFRS operating profit was euro 716 million (2009: euro 619 million), an increase of 16%. Non-IFRS operating profit was euro 883 million (2009: euro 687 million), an increase of 29% (16% at constant currencies). In the third quarter of 2009, the IFRS and Non-IFRS operating profit was impacted by restructuring charges of euro 10 million and euro 11 million, respectively, resulting from a reduction of positions. In contrast, restructuring charges were not material in the third quarter of 2010.
  • IFRS operating margin was 23.8% (2009: 24.7%), a decrease of 0.9 percentage points. Non-IFRS operating margin was 29.1% (2009: 27.4%), or 28.2% at constant currencies, an increase of 1.7 percentage points (0.8 percentage points at constant currencies). In contrast to the respective quarter in 2009, the third quarter of 2010 was not materially impacted by restructuring expenses which had, in the third quarter of 2009, negatively impacted the IFRS and Non-IFRS operating margin by 0.4 percentage points.
  • IFRS profit after tax was euro 501 million (2009: euro 447 million), an increase of 12%. Non-IFRS profit after tax was euro 605 million (2009: euro 499 million), an increase of 21%. IFRS basic earnings per share were euro 0.42 (2009: euro 0.38), an increase of 11%. Non-IFRS basic earnings per share were euro 0.51 (2009: euro 0.42), an increase of 21%. The impact, net of tax, of the restructuring expenses incurred in the third quarter 2009 on the third quarter 2009 IFRS and Non-IFRS basic earnings per share was not material. The IFRS effective tax rate in the third quarter of 2010 was 27.3% (2009: 20.5%).

 

Third quarter 2010 Non-IFRS operating profit excludes a deferred support revenue write-down from acquisitions of euro 36 million plus acquisition-related charges and discontinued activities totaling euro 131 million (2009: euro 68 million). Third quarter 2010 Non-IFRS profit after tax and Non-IFRS basic earnings per share exclude a deferred support revenue write-down from acquisitions of euro 24 million plus acquisition-related charges and discontinued activities totaling euro 80 million net of tax (2009: euro 52 million). The excluded amounts from discontinued activities result from an increase from $100 million to $160 million in the provision related to our discontinued TomorrowNow activities.

FINANCIAL HIGHLIGHTS - Nine Months 2010


Nine Months 2010(1)
-------------------
IFRS
----
euro million, unless 9M 2010 9M 2009 % change
otherwise stated ------- ------- --------
----------------
Software revenue 1,757 1,487 18%
---------------- ----- ----- ---
Software and
software-related
service revenue 6,521 5,632 16%
----------------- ----- ----- ---
Total revenue 8,406 7,482 12%
------------- ----- ----- ---
Total operating
expenses -6,359 -5,915 8%
--------------- ------ ------ ---
-thereof
restructuring 1 -193 <-100%
-------------- --- ---- ------
Operating profit 2,047 1,567 31%
---------------- ----- ----- ---
Operating margin (%) 24.4 20.9 3.5pp
-------------------- ---- ---- -----
Profit after tax 1,379 1,069 29%
---------------- ----- ----- ---
Basic earnings per
share (euro ) 1.16 0.90 29%
------------------ ---- ---- ---

 

 

 


Nine Months 2010(1)
-------------------
Non-IFRS(2)
-----------
% change
% const.
euro million, unless 9M 2010 9M 2009 change curr.(3)
otherwise stated ------- ------- ------- ---------
----------------
Software revenue 1,757 1,487 18% 9%
---------------- ----- ----- --- ---
Software and
software-related
service revenue 6,557 5,643 16% 10%
----------------- ----- ----- --- ---
Total revenue 8,442 7,493 13% 7%
------------- ----- ----- --- ---
Total operating
expenses -6,108 -5,700 7% 3%
--------------- ------ ------ --- ---
-thereof
restructuring -2 -188 -99%
-------------- --- ---- ---
Operating profit 2,334 1,792 30% 19%
---------------- ----- ----- --- ---
Operating margin (%) 27.6 23.9 3.7pp 2.7pp
-------------------- ---- ---- ----- -----
Profit after tax 1,591 1,239 28%
---------------- ----- ----- ---
Basic earnings per
share (euro ) 1.34 1.04 29%
------------------ ---- ---- ---


1) All figures are preliminary and unaudited.
2) Adjustments in the revenue line items are for the support revenue
that would have been recognized had the acquired entities remained
stand-alone entities but that SAP is not permitted to recognize as
revenue under IFRS as a result of business combination accounting
rules. Adjustments in the operating expense line items are for
acquisition-related charges and discontinued activities.
3) Constant currency revenue and operating income figures are
calculated by translating revenue and operating income of the
current period using the average exchange rates from the previous
year's respective period instead of the current period. 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.

 

 

 

Third quarter and year to date 2010 revenue, profit and cash flow figures include the revenue, profits and cash flows from Sybase for the period since the acquisition (July 26, 2010). The comparative prior year numbers do not include any Sybase revenues, profits or cash flows.

 

Revenues - Nine Months 2010

  • IFRS software and software-related service revenues were euro 6.52 billion (2009: euro 5.63 billion), an increase of 16%. Non-IFRS software and software-related service revenues were euro 6.56 billion (2009: euro 5.64 billion), an increase of 16% (10% at constant currencies).
  • Excluding the contribution from Sybase, SAP's business contributed 14 percentage points to the growth of our IFRS and Non-IFRS software and software related service revenues (8 percentage points at constant currencies).
  • IFRS software revenues were euro 1.76 billion (2009: euro 1.49 billion), an increase of 18% (9% at constant currencies).
  • IFRS total revenues were euro 8.41 billion (2009: euro 7.48 billion), an increase of 12%. Non-IFRS total revenues were euro 8.44 billion (2009: euro 7.49 billion), an increase of 13% (7% at constant currencies).

 

Nine months 2010 Non-IFRS revenue figures exclude a deferred support revenue write-down from acquisitions of euro 36 million (2009: euro 11 million).

 

Income - Nine Months 2010

 

  • IFRS operating profit was euro 2.05 billion (2009: euro 1.57 billion), an increase of 31%. Non-IFRS operating profit was euro 2.33 billion (2009: euro 1.79 billion), an increase of 30% (19% at constant currencies). In the first nine months of 2009, the IFRS and Non-IFRS operating profit was impacted by restructuring charges of euro 193 million and euro 188 million, respectively, resulting from a reduction of positions. In contrast, restructuring charges were not material in the 2010 nine month period.
  • IFRS operating margin was 24.4% (2009: 20.9%), an increase of 3.5 percentage points. Non-IFRS operating margin was 27.6% (2009: 23.9 %), or 26.6% at constant currencies, an increase of 3.7 percentage points (2.7 percentage points at constant currencies). In contrast to the respective first nine months of 2009, the first nine months of 2010 were not materially impacted by restructuring expenses which had, in the first nine months of 2009, negatively impacted the IFRS and Non-IFRS operating margin by 2.6 percentage points and 2.5 percentage points, respectively. However, severance expenses of euro 45 million (2009: euro 11 million) and unused lease space expenses of euro 8 million (2009: euro 5 million) negatively impacted the IFRS and Non-IFRS operating margin by 0.6 percentage points (2009: 0.2 percentage points).
  • IFRS profit after tax was euro 1.38 billion (2009: euro 1.07 billion), an increase of 29%. Non-IFRS profit after tax was euro 1.59 billion (2009: euro 1.24 billion), an increase of 28%. IFRS basic earnings per share were euro 1.16 (2009: euro 0.90), an increase of 29 %. Non-IFRS basic earnings per share were euro 1.34 (2009: euro 1.04), an increase of 29 %. The impact, net of tax, of the severance and unused lease space expenses incurred in the first nine months of 2010 on the first nine months 2010 IFRS and Non-IFRS basic earnings per share was euro 0.03 (2009: euro 0.01). The impact, net of tax, of the restructuring expenses incurred in the first nine months of 2009 on the first nine months 2009 IFRS and Non-IFRS basic earnings per share was euro 0.11. The IFRS effective tax rate in the first nine months 2010 was 26.9% (2009: 26.0%).

 

First nine months 2010 Non-IFRS operating profit excludes a deferred support revenue write-down from acquisitions of euro 36 million (2009: euro 11 million) plus acquisition-related charges and discontinued activities totaling euro 251 million (2009: euro 215 million). First nine months 2010 Non-IFRS profit after tax and Non-IFRS basic earnings per share exclude a deferred support revenue write-down from acquisitions of euro 24 million (2009: euro 7 million) plus acquisition-related charges and discontinued activities totaling euro 188 million net of tax (2009: euro 163 million). The excluded amounts from discontinued activities result from an increase from $100 million to $160 million in the provision related to our discontinued TomorrowNow activities.

 

Cash Flow - Nine Months 2010

 

Operating cash flow for the nine months 2010 exceeded euro 2 billion (2009: euro 2.36 billion). The year-over-year decrease in operating cash flow was mainly the result of a significant increase in payments in 2009 that were delayed from the end of 2008 resulting from the onset of the financial crisis. In 2010, however, the timing of the cash inflows from customers returned to normal.

 

Free cash flow was euro 1.86 billion (2009: euro 2.19 billion), a decrease of 15%. Free cash flow was 22% of total revenues (2009: 29%). At September 30, 2010, SAP had a total group liquidity of euro 2.83 billion (December 31, 2009: euro 2.28 billion), which includes cash and cash equivalents and short term investments. Net liquidity at September 30, 2010 was -euro 1.64 billion, which included euro 4.47 billion of debt, of which euro 2.20 billion resulted from the proceeds of two successful bond transactions. These debt offerings were very well-received in the market.

 

Business Outlook

 

SAP is providing the following outlook for the full-year 2010, which is unchanged from the previous outlook.

  • The Company expects full-year 2010 Non-IFRS software and software-related service revenue to increase in a range of 9% - 11% at constant currencies (2009: euro 8.2 billion). SAP's business, excluding the contribution from Sybase, is expected to contribute 6 - 8 percentage points to this growth.
  • The Company expects the full-year 2010 Non-IFRS operating margin to be in a range of 30% - 31% (2009: 27.4%) at constant currencies.
  • The Company projects an effective tax rate of 27.5% - 28.5% (based on IFRS) for 2010 (2009: 28.1%).

 

 

Major Customer Wins

 

In the third quarter of 2010, SAP closed major contracts in key regions.

 

EMEA: SAP - Electricity Supply Corporation of Malawi (ESCOM) Ltd, TNK-BP, Nedbank Group Limited, Standard Bank of South Africa Limited and Mercuria Energy Group Holding, Iberdrola and City of Johannesburg. Sybase - BNP Paribas, Commerzbank, Cogetech and Ericsson

 

Americas: SAP - Fifth Third Processing Solutions, Intermec Technologies Corporation, Applied Industrial Technologies, Fossil, Marisol S.A., Indumotora Automotriz S.A., Hasbro, Inc. and American Express. Sybase - Banco Popular Dominicano, Rite Aid, GlobeOp Financial and Symphony Technology

 

Asia Pacific/Japan: SAP - Jiangsu Electric Power Corp., China Central Television, Chemical Company of Malaysia Berhad, Pacific Pipe Co., Ltd., Punjab State Power Corporation Ltd., Sharp Corporation and Eros International Media. Sybase - New Zealand Customs and NTT Data Group

 

SAP Business ByDesign - Anthesis, Frankfurter Fondsbank, Hangzhou Permanent Magnet Group, KunShan Taidah Chemical and RJT Compuquest.

 

Webcast / Supplementary Financial Information

 

SAP senior management will host a conference call today at 3:00 PM (CET) / 2:00 PM (UK) / 9:00 AM (Eastern) / 6:00 AM (Pacific). The conference call will be web cast live on the Company's website at http://www.sap.com/investor and will be available for replay.

 

Supplementary financial information pertaining to the quarterly results can be found at http://www.sap.com/investor.

 

 

SAP First Nine Months 2010 Interim Report

 

The First Nine Months 2010 Interim Report will be published on October 29, 2010, and will be available for download at http://www.sap.com/investor

 

 

 

About SAP

 

SAP is the world's leading provider of enterprise application software, offering solutions that enable companies of all sizes and in more than 25 industries to become best-run businesses. With more than 105,000 customers in over 120 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol "SAP." For more information, visit www.sap.com.

 

 

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.

 

Copyright © 2010 SAP AG. All rights reserved.

SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects Explorer, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects Software Ltd. in the United States and in other countries. Sybase and Adaptive Server Enterprise, iAnywhere, Sybase 365, SQL Anywhere and other Sybase products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Sybase, Inc. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary.

 

 

 


For more information, press only:
Christoph [email protected],
Liedtke +49 (6227) 7-50383 CET
Guenter [email protected],
Gaugler +49 (6227) 7-65416 CET
Jim Dever +1 (610) 661-2161 [email protected], ET
[email protected], SGT
Lynn Ong +65 6768 6439 (GMT +8)


For more information, financial community only:
Stefan Gruber +49 (6227) 7-44872 [email protected], CET
Martin Cohen +1 (212) 653-9619 [email protected], ET

Follow SAP Investor Relations on Twitter at @sapinvestor.


 

 

 

Appendix - Financial Information to Follow

 

 

                         FINANCIAL INFORMATION
FOR THE THIRD QUARTER AND NINE MONTHS 2010
- Condensed, Preliminary and Unaudited -


Page

Financial Statements (IFRS)
Income Statements - Quarter F1
Statements of Comprehensive Income -
Quarter F2
Income Statements - Nine Months F2
Statements of Comprehensive Income -
Nine Months F4
Statements of Financial Position F5
Statements of Changes in Equity F6
Statements of Cash Flows F7

Supplementary Financial Information
Reconciliations from Non-IFRS Numbers
to IFRS Numbers F8 to F9
F10 to
Revenue by Region F11
Share-Based Compensation F12
Free Cash Flow F12
Days Sales Outstanding(DSO) F12
Number of Employees F12
Multi-Quarter Summary F13
F14 to
Explanations of Non-IFRS Measures F16


 

 

 

    Financial Statements (IFRS)

CONSOLIDATED INCOME STATEMENTS OF SAP GROUP
For the three months ended September 30
    euro millions, unless                        Change
otherwise stated 2010 2009 in
%
Software revenue 656 525 25
Support revenue 1,559 1,333 17
Subscription and other
software-related
service revenue 101 79 28

Software and software-
related service revenue 2,316 1,937 20
Consulting revenue 565 484 17
Other service revenue 122 87 40
Professional services
and other service
revenue 687 571 20
Total revenue 3,003 2,508 20


Cost of software and
software-related
services -514 -414 24
Cost of professional
services and other
services -530 -436 22

Research and development -453 -382 19
Sales and marketing -642 -515 25
General and
administration -157 -133 18
Restructuring 2 -10 <-100
Other operating income/
expense, net 7 1 >100

Total operating expenses -2,287 -1,889 21
Operating profit 716 619 16

Other non-operating
income/expense, net -13 -39 -67
Finance income 16 9 78
Finance costs -35 -26 35
Other financial gains/
losses, net 5 -1 <-100
Financial income, net -14 -18 -22
Profit before tax 689 562 23

Income tax expense -188 -115 63
Profit after tax 501 447 12
- Profit attributable to
non-controlling
interests 1 0 N/A
- Profit attributable to
owners of parent 500 447 12

Basic earnings per
share, in euro 0.42 0.38 12
Diluted earnings per
share, in euro 0.42 0.38 12


* For the three months ended September 30, 2010 and 2009 the
weighted average number of shares were 1,188
million (Diluted: 1,188 million) and 1,188 million (Diluted: 1,189
million), respectively (treasury stock excluded).

 

 

 

 


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME OF SAP GROUP
for the third quarter ended September 30
    euro millions                        2010  2009
Profit after tax 501 447
Gains (losses) on exchange
differences on translation,
before tax -270 18
Reclassification adjustments on
exchange differences on
translation, before tax 11 0
Exchange differences on
translation -259 18
Gains (losses) on remeasuring
available-for-sale financial
assets, before tax 6 1
Reclassification adjustments on
available-for-sale financial
assets, before tax 0 0
Available-for-sale financial
assets 6 1
Gains (losses) on cash flow
hedges, before tax 6 -11
Reclassification adjustments on
cash flow hedges, before tax 31 22
Cash flow hedges 37 11
Actuarial gains (losses) on
defined benefit plans, before
tax 7 3
Other comprehensive income before
tax -209 33
Income tax relating to components
of other comprehensive income -13 -5
Other comprehensive income after
tax -222 28
Total comprehensive income 279 475
- attributable to non-
controlling interests 1 0
- attributable to owners of
parent 278 475


 

 


CONSOLIDATED INCOME STATEMENTS OF SAP GROUP
For the nine months ended September 30
    euro millions, unless                              Change
otherwise stated 2010 2009 in
%
Software revenue 1,757 1,487 18
Support revenue 4,479 3,922 14
Subscription and other
software-related service
revenue 285 223 28
Software and software-
related service revenue 6,521 5,632 16
Consulting revenue 1,572 1,554 1
Other service revenue 313 296 6
Professional services and
other service revenue 1,885 1,850 2
Total revenue 8,406 7,482 12

Cost of software and
software-related services -1,328 -1,200 11
Cost of professional
services and other
services -1,478 -1,423 4
Research and development -1,242 -1,120 11
Sales and marketing -1,858 -1,590 17
General and administration -461 -395 17
Restructuring 1 -193 <-100
Other operating income/
expense, net 7 6 17
Total operating expenses -6,359 -5,915 8
Operating profit 2,047 1,567 31

Other non-operating
income/expense, net -136 -62 >100
Finance income 38 27 41
Finance costs -67 -79 -15
Other financial gains/
losses, net 4 -8 <-100
Financial income, net -25 -60 -58
Profit before tax 1,886 1,445 31

Income tax expense -507 -376 35
Profit after tax 1,379 1,069 29
- Profit attributable to
non-controlling interests 2 1 100
- Profit attributable to
owners of parent 1,377 1,068 29

Basic earnings per share,
in euro 1.16 0.90 29
Diluted earnings per share,
in euro 1.16 0.90 29


* For the nine months ended September 30, 2010 and 2009 the weighted
average number of shares were 1,188 million (Diluted: 1,189 million)
and 1,188 million (Diluted: 1,189 million), respectively (treasury
stock excluded).

 

 

 


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME OF SAP GROUP
for the nine months ended September 30
    euro  millions                         2010    2009
-------------- ---- ----
Profit after tax 1,379 1,069
---------------- ----- -----
Gains (losses) on exchange
differences on translation,
before tax 2 53
---------------------------- --- ---
Reclassification adjustments on
exchange differences on
translation, before tax -6 0
------------------------------- --- ---
Exchange differences on
translation -4 53
----------------------- --- ---
Gains (losses) on remeasuring
available-for-sale financial
assets, before tax 5 2
----------------------------- --- ---
Reclassification adjustments on
available-for-sale financial
assets, before tax 0 0
------------------------------- --- ---
Available-for-sale financial
assets 5 2
---------------------------- --- ---
Gains (losses) on cash flow
hedges, before tax -66 -33
--------------------------- --- ---
Reclassification adjustments on
cash flow hedges, before tax 47 65
------------------------------- --- ---
Cash flow hedges -19 32
---------------- --- ---
Actuarial gains (losses) on
defined benefit plans, before
tax -3 5
------------------------------ --- ---
Other comprehensive income before
tax -21 92
--------------------------------- --- ---
Income tax relating to components
of other comprehensive income 9 -11
--------------------------------- --- ---
Other comprehensive income after
tax -12 81
-------------------------------- --- ---
Total comprehensive income 1,367 1,150
-------------------------- ----- -----
- attributable to non-
controlling interests 2 1
---------------------- --- ---
- attributable to owners of
parent 1,365 1,149
--------------------------- ----- -----


 

 

 


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION OF SAP GROUP
as at September 30, 2010 and December 31, 2009
                                                    Change
euro millions 2010 2009 in %
Assets
Cash and cash
equivalents 2,828 1,884 50
Other financial assets 258 486 -47
Trade and other
receivables 2,382 2,546 -6
Other non-financial
assets 223 147 52
Tax assets 311 192 62
Total current assets 6,002 5,255 14
Goodwill 8,285 4,994 66
Intangible assets 2,400 894 >100
Property, plant, and
equipment 1,415 1,371 3
Other financial assets 374 284 32
Trade and other
receivables 68 52 31
Other non-financial
assets 31 35 -11
Tax assets 120 91 32
Deferred tax assets 391 398 -2
Total non-current
assets 13,084 8,119 61
Total assets 19,086 13,374 43


 

 

 




Change
euro millions 2010 2009 in %
------------- ---- ---- ------
Equity and liabilities
----------------------
Trade and other
payables 766 638 20
--------------- --- --- ---
Tax liabilities 136 125 9
--------------- --- --- ---
Financial liabilities 238 146 63
--------------------- --- --- ---
Other non-financial
liabilities 1,187 1,577 -25
------------------- ----- ----- ---
Provisions 389 332 17
---------- --- --- ---
Deferred income 1,334 598 >100
--------------- ----- --- ----
Total current
liabilities 4,050 3,416 19
------------- ----- ----- ---


Trade and other
payables 54 35 54
--------------- --- --- ---
Tax liabilities 359 239 50
--------------- --- --- ---
Financial liabilities 4,422 729 >100
--------------------- ----- --- ----
Other non-financial
liabilities 21 12 75
------------------- --- --- ---
Provisions 270 198 36
---------- --- --- ---
Deferred tax
liabilities 605 190 >100
------------ --- --- ----
Deferred income 94 64 47
--------------- --- --- ---
Total non-current
liabilities 5,825 1,467 >100
----------------- ----- ----- ----
Total liabilities 9,875 4,883 >100
----------------- ----- ----- ----


Issued capital 1,227 1,226 0
-------------- ----- ----- ---
Treasury shares -1,391 -1,320 5
--------------- ------ ------ ---
Share premium 333 317 5
------------- --- --- ---
Retained earnings 9,356 8,571 9
----------------- ----- ----- ---
Other components of
equity -331 -317 4
------------------- ---- ---- ---
Equity attributable to
owners of parent 9,194 8,477 8
---------------------- ----- ----- ---


Non-controlling
interests 17 14 21
--------------- --- --- ---
Total equity 9,211 8,491 8
------------ ----- ----- ---
Equity and liabilities 19,086 13,374 43
---------------------- ------ ------ ---


 

 

 

 


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY OF SAP GROUP
For the nine months ended
September 30
                           Issued     Share    Retained
euro millions Capital Premium Earnings

January 1, 2009 1,226 320 7,423
Profit after tax 1,068
Other comprehensive
income 3
Share-based
compensation -4
Dividends -594
Treasury shares
transactions -5
Convertible bonds
and stock options
exercised 5
Other 1
September 30, 2009 1,226 316 7,901

January 1, 2010 1,226 317 8,571
Profit after tax 1,377
Other comprehensive
income 2
Share-based
compensation
Dividends -594
Treasury shares
transactions -4
Convertible bonds
and stock options
exercised 1 20
Other
September 30, 2010 1,227 333 9,356

 

 

 


Other Components of
euro millions Equity
------------- -------------------
Available-
for-
Sale Cash
Exchange Financial Flow
Differences Assets Hedges
------------ ----------- -------
January 1, 2009 -395 -1 -42
--------------- ---- --- ---
Profit after tax
----------------
Other comprehensive
income 53 1 25
------------------- --- --- ---
Share-based
compensation
-------------
Dividends
---------
Treasury shares
transactions
---------------
Convertible bonds
and stock options
exercised
------------------
Other
-----
September 30, 2009 -342 -17
------------------ ---- ---


January 1, 2010 -319 13 -11
--------------- ---- --- ---
Profit after tax
----------------
Other comprehensive
income -4 4 -14
------------------- --- --- ---
Share-based
compensation
-------------
Dividends
---------
Treasury shares
transactions
---------------
Convertible bonds
and stock options
exercised
------------------
Other
-----
September 30, 2010 -323 17 -25
------------------ ---- --- ---

 

 

 


Equity
Attributable
to
Owners Non-
Treasury of Controlling Total
euro millions Shares Parent Interests Equity
------------- -------- ------------ ----------- ------


January 1, 2009 -1,362 7,169 2 7,171
--------------- ------ ----- --- -----
Profit after tax 1,068 1 1,069
---------------- ----- --- -----
Other
comprehensive
income 82 82
-------------- --- ---
Share-based
compensation -4 -4
------------- --- ---
Dividends -594 -594
--------- ---- ----
Treasury shares
transactions 36 31 31
--------------- --- --- ---
Convertible
bonds and stock
options
exercised 5 5
---------------- --- ---
Other 1 10 11
----- --- --- ---
September 30,
2009 -1,326 7,758 13 7,771
------------- ------ ----- --- -----


January 1, 2010 -1,320 8,477 14 8,491
--------------- ------ ----- --- -----
Profit after tax 1,377 2 1,379
---------------- ----- --- -----
Other
comprehensive
income -12 -12
-------------- --- ---
Share-based
compensation 0 0
------------- --- ---
Dividends -594 -594
--------- ---- ----
Treasury shares
transactions -157 -161 -161
--------------- ---- ---- ----
Convertible
bonds and stock
options
exercised 86 107 107
---------------- --- --- ---
Other 0 1 1
----- --- --- ---
September 30,
2010 -1,391 9,194 17 9,211
------------- ------ ----- --- -----

 

 

 

 


CONSOLIDATED STATEMENTS OF CASH FLOWS OF SAP GROUP
as at September 30
    euro millions                        2010    2009
------------- ---- ----
Profit after tax 1,379 1,069
---------------- ----- -----
Adjustments to reconcile profit
after taxes to net cash
provided by operating
activities:
-------------------------------
Depreciation and amortization 370 375
----------------------------- --- ---
Gains/losses on disposals of
non-current assets 2 4
---------------------------- --- ---
Gains/losses on disposals of
financial assets -7 0
---------------------------- --- ---
Impairment loss on financial
assets recognized in profit 0 8
---------------------------- --- ---
Decrease/increase in sales and
bad debt allowances on trade
receivables -9 91
------------------------------ --- ---
Other adjustments for non-cash
items 33 7
------------------------------ --- ---
Deferred income taxes 13 -84
--------------------- --- ---
Decrease/increase in trade
receivables 515 967
-------------------------- --- ---
Decrease/increase in other
assets -350 16
-------------------------- ---- ---
Decrease/increase in trade
payables, provisions and other
liabilities -437 -612
------------------------------- ---- ----
Decrease/increase in deferred
income 553 521
----------------------------- --- ---
Net cash flows from operating
activities 2,062 2,362
----------------------------- ----- -----


Business combinations, net of
cash and cash equivalents
acquired -4,184 -65
----------------------------- ------ ---
Purchase of intangible assets
and property, plant, and
equipment -200 -169
----------------------------- ---- ----
Proceeds from sales of
intangible assets or property,
plant, and equipment 23 19
------------------------------- --- ---
Purchase of equity or debt
instruments of other entities -687 -576
------------------------------ ---- ----
Proceeds from sales of equity or
debt instruments of other
entities 1,248 324
-------------------------------- ----- ---
Net cash flows from investing
activities -3,800 -467
----------------------------- ------ ----


Dividends paid -594 -594
-------------- ---- ----
Purchase of treasury shares -220 0
--------------------------- ---- ---
Proceeds from reissuance of
treasury shares 109 20
--------------------------- --- ---
Proceeds from issuing shares
(share-based compensation) 26 4
---------------------------- --- ---
Proceeds from borrowings 5,019 697
------------------------ ----- ---
Repayments of borrowings -1,721 -902
------------------------ ------ ----
Purchase of equity-based
derivative instruments (hedge
for cash-settled share-based
payment plans) -14 0
------------------------------ --- ---
Proceeds from exercise of
equity-based derivative
financial instruments 4 4
------------------------- --- ---
Cash and cash equivalents at the
end of the period 2,828 2,414
-------------------------------- ----- -----


Effect of foreign exchange rates
on cash and cash equivalents 73 10
-------------------------------- --- ---
Net decrease/increase in cash
and cash equivalents 944 1,134
----------------------------- --- -----
Cash and cash equivalents at the
beginning of the period 1,884 1,280
-------------------------------- ----- -----
Cash and cash equivalents at the
end of the period 2,828 2,414
-------------------------------- ----- -----



 

 

 

 

 

    Supplementary Financial Information

RECONCILIATIONS FROM NON-IFRS NUMBERS TO IFRS NUMBERS
(Preliminary and unaudited)

The following tables present a reconciliation from our non-IFRS
numbers (including our non-IFRS at constant currency numbers) to
the
respective most comparable IFRS numbers. Note: Our non-IFRS numbers
are not prepared under a comprehensive set of accounting rules or
principles.
    euro
millions,
unless
otherwise Three months ended September
stated 30
2010
Non- Non-
IFRS Adj.* IFRS* Currency IFRS
---- ----- ----- impact** constant
-------- currency**
----------



Non-IFRS
Revenue
Numbers
--------
Software
revenue 656 0 656 -52 604
-------- --- --- --- --- ---
Support
revenue 1,559 36 1,595 -109 1,486
-------- ----- --- ----- ---- -----
Subscription
and other
software-
related
service
revenue 101 0 101 -6 95
------------ --- --- --- --- ---
Software
and
software-
related
service
revenue 2,316 36 2,352 -167 2,185
---------- ----- --- ----- ---- -----
-thereof
SAP
excluding
Sybase 2,228 0 2,228 -158 2,070
---------- ----- --- ----- ---- -----
Consulting
revenue 565 0 565 -40 525
---------- --- --- --- --- ---
Other
service
revenue 122 0 122 -8 114
-------- --- --- --- --- ---
Professional
services
and other
service
revenue 687 0 687 -48 639
------------ --- --- --- --- ---
Total
revenue 3,003 36 3,039 -215 2,824
-------- ----- --- ----- ---- -----


Non-IFRS
Operating
Expense
Numbers
----------
Cost of
software
and
software-
related
services -514 100 -414
---------- ---- --- ----
Cost of
professional
services
and other
services -530 3 -527
------------- ---- --- ----
Research
and
development -453 1 -452
------------ ---- --- ----
Sales and
marketing -642 24 -618
---------- ---- --- ----
General
and
administration -157 5 -152
--------------- ---- --- ----
Restructuring 2 -3 -1
------------- --- --- ---
Other
operating
income/
expense,
net 7 0 7
---------- --- --- ---
Total
operating
expenses -2,287 131 -2,157 130 -2,027
---------- ------ --- ------ --- ------


Non-IFRS
Profit
Numbers
--------
Operating
profit 716 167 883 -86 797
--------- --- --- --- --- ---
Other non-
operating
income/
expense,
net -13 -8 -21
---------- --- --- ---
Finance
income 16 0 16
------- --- --- ---
Finance
costs -35 0 -35
------- --- --- ---
Other
financial
gains/
losses,
net 5 0 5
---------- --- --- ---
Financial
income,
net -14 0 -14
--------- --- --- ---
Profit
before
tax 689 159 848
------- --- --- ---
Income tax
expense -188 -55 -243
---------- ---- --- ----
Profit
after tax 501 104 605
---------- --- --- ---
Profit
attributable
to non-
controlling
interests 1 0 1
------------- --- --- ---
Profit
attributable
to owners
of parent 500 104 604
------------- --- --- ---


Non-IFRS
Key
Ratios
--------
Operating
margin in
% 23.8 29.1 28.2
---------- ---- ---- ----
Effective
tax rate
in % 27.3 28.7
--------- ---- ----
Basic
earnings
per
share, in
euro 0.42 0.51
---------- ---- ----

 

 

 


euro
millions,
unless
otherwise Three months ended September
stated 30
2009
Non-
IFRS Adj.* IFRS*
---- ----- -----



Non-IFRS
Revenue
Numbers
--------
Software
revenue 525 0 525
-------- --- --- ---
Support
revenue 1,333 0 1,333
-------- ----- --- -----
Subscription
and other
software-
related
service
revenue 79 0 79
------------ --- --- ---
Software
and
software-
related
service
revenue 1,937 0 1,937
---------- ----- --- -----
-thereof
SAP
excluding
Sybase 1,937 0 1,937
---------- ----- --- -----
Consulting
revenue 484 0 484
---------- --- --- ---
Other
service
revenue 87 0 87
-------- --- --- ---
Professional
services
and other
service
revenue 571 0 571
------------ --- --- ---
Total
revenue 2,508 0 2,508
-------- ----- --- -----


Non-IFRS
Operating
Expense
Numbers
----------
Cost of
software
and
software-
related
services -414 48 -366
---------- ---- --- ----
Cost of
professional
services
and other
services -436 1 -435
------------- ---- --- ----
Research
and
development -382 1 -381
------------ ---- --- ----
Sales and
marketing -515 18 -497
---------- ---- --- ----
General
and
administration -133 2 -131
--------------- ---- --- ----
Restructuring -10 -1 -11
------------- --- --- ---
Other
operating
income/
expense,
net 1 -1 0
---------- --- --- ---
Total
operating
expenses -1,889 68 -1,821
---------- ------ --- ------


Non-IFRS
Profit
Numbers
--------
Operating
profit 619 68 687
--------- --- --- ---
Other non-
operating
income/
expense,
net -39 0 -39
---------- --- --- ---
Finance
income 9 0 9
------- --- --- ---
Finance
costs -26 0 -26
------- --- --- ---
Other
financial
gains/
losses,
net -1 0 -1
---------- --- --- ---
Financial
income,
net -18 0 -18
--------- --- --- ---
Profit
before
tax 562 68 630
------- --- --- ---
Income tax
expense -115 -16 -131
---------- ---- --- ----
Profit
after tax 447 52 499
---------- --- --- ---
Profit
attributable
to non-
controlling
interests 0 0 0
------------- --- --- ---
Profit
attributable
to owners
of parent 447 52 499
------------- --- --- ---


Non-IFRS
Key
Ratios
--------
Operating
margin in
% 24.7 27.4
---------- ---- ----
Effective
tax rate
in % 20.5 20.8
--------- ---- ----
Basic
earnings
per
share, in
euro 0.38 0.42
---------- ---- ----

 

 

 


euro
millions,
unless
otherwise Three months ended September
stated 30
Change
in %
Non- Non-
IFRS IFRS* IFRS
---- ----- constant
currency**
----------



Non-IFRS
Revenue
Numbers
--------
Software
revenue 25 25 15
-------- --- --- ---
Support
revenue 17 20 11
-------- --- --- ---
Subscription
and other
software-
related
service
revenue 28 28 20
------------ --- --- ---
Software
and
software-
related
service
revenue 20 21 13
---------- --- --- ---
-thereof
SAP
excluding
Sybase 15 15 7
---------- --- --- ---
Consulting
revenue 17 17 8
---------- --- --- ---
Other
service
revenue 40 40 31
-------- --- --- ---
Professional
services
and other
service
revenue 20 20 12
------------ --- --- ---
Total
revenue 20 21 13
-------- --- --- ---


Non-IFRS
Operating
Expense
Numbers
----------
Cost of
software
and
software-
related
services 24 13
---------- --- ---
Cost of
professional
services
and other
services 22 21
------------- --- ---
Research
and
development 19 19
------------ --- ---
Sales and
marketing 25 24
---------- --- ---
General
and
administration 18 16
--------------- --- ---
Restructuring <-100 -91
------------- ----- ---
Other
operating
income/
expense,
net >100 N/A
---------- ---- ---
Total
operating
expenses 21 18 11
---------- --- --- ---


Non-IFRS
Profit
Numbers
--------
Operating
profit 16 29 16
--------- --- --- ---
Other non-
operating
income/
expense,
net -67 -46
---------- --- ---
Finance
income 78 78
------- --- ---
Finance
costs 35 35
------- --- ---
Other
financial
gains/
losses,
net <-100 <-100
---------- ----- -----
Financial
income,
net -22 -22
--------- --- ---
Profit
before
tax 23 35
------- --- ---
Income tax
expense 63 85
---------- --- ---
Profit
after tax 12 21
---------- --- ---
Profit
attributable
to non-
controlling
interests N/A N/A
------------- --- ---
Profit
attributable
to owners
of parent 12 21
------------- --- ---


Non-IFRS
Key
Ratios
--------
Operating
margin in
% -0.9pp 1.7pp 0.8pp
--------- ------ ----- -----
Effective
tax rate
in % 6.8pp 7.9pp
--------- ----- -----
Basic
earnings
per
share, in
euro 11 21
---------- --- ---

 

 

 



euro
millions,
unless
otherwise
stated Nine months ended September 30
2010
Non- Non-
IFRS Adj.* IFRS* Currency IFRS
---- ----- ----- impact** constant
-------- currency**
----------



Non-IFRS
Revenue
Numbers
--------
Software
revenue 1,757 0 1,757 -133 1,624
-------- ----- --- ----- ---- -----
Support
revenue 4,479 36 4,515 -207 4,308
-------- ----- --- ----- ---- -----
Subscription
and other
software-
related
service
revenue 285 0 285 -8 277
------------ --- --- --- --- ---
Software
and
software-
related
service
revenue 6,521 36 6,557 -349 6,208
---------- ----- --- ----- ---- -----
-thereof
SAP
excluding
Sybase 6,433 0 6,433 -340 6,093
---------- ----- --- ----- ---- -----
Consulting
revenue 1,572 0 1,572 -81 1,491
---------- ----- --- ----- --- -----
Other
service
revenue 313 0 313 -15 298
-------- --- --- --- --- ---
Professional
services
and other
service
revenue 1,885 0 1,885 -96 1,789
------------ ----- --- ----- --- -----
Total
revenue 8,406 36 8,442 -444 7,998
-------- ----- --- ----- ---- -----


Non-IFRS
Operating
Expense
Numbers
----------
Cost of
software
and
software-
related
services -1,328 181 -1,147
---------- ------ --- ------
Cost of
professional
services
and other
services -1,478 5 -1,473
------------- ------ --- ------
Research
and
development -1,242 4 -1,238
------------ ------ --- ------
Sales and
marketing -1,858 51 -1,807
---------- ------ --- ------
General
and
administration -461 14 -447
--------------- ---- --- ----
Restructuring 1 -3 -2
------------- --- --- ---
Other
operating
income/
expense,
net 7 0 7
---------- --- --- ---
Total
operating
expenses -6,359 251 -6,108 239 -5,869
---------- ------ --- ------ --- ------


Non-IFRS
Profit
Numbers
--------
Operating
profit 2,047 288 2,334 -205 2,129
--------- ----- --- ----- ---- -----
Other non-
operating
income/
expense,
net -136 9 -127
---------- ---- --- ----
Finance
income 38 0 38
------- --- --- ---
Finance
costs -67 0 -67
------- --- --- ---
Other
financial
gains/
losses,
net 4 0 4
---------- --- --- ---
Financial
income,
net -25 0 -25
--------- --- --- ---
Profit
before
tax 1,886 297 2,183
------- ----- --- -----
Income tax
expense -507 -85 -592
---------- ---- --- ----
Profit
after tax 1,379 212 1,591
---------- ----- --- -----
Profit
attributable
to non-
controlling
interests 2 0 2
------------- --- --- ---
Profit
attributable
to owners
of parent 1,377 212 1,589
------------- ----- --- -----


Non-IFRS
Key
Ratios
--------
Operating
margin in
% 24.4 27.6 26.6
---------- ---- ---- ----
Effective
tax rate
in % 26.9 27.1
--------- ---- ----
Basic
earnings
per
share, in
euro 1.16 1.34
---------- ---- ----

 

 

 



euro
millions,
unless
otherwise
stated Nine months ended September 30
2009
Non-
IFRS Adj.* IFRS*
---- ----- -----



Non-IFRS
Revenue
Numbers
--------
Software
revenue 1,487 0 1,487
-------- ----- --- -----
Support
revenue 3,922 11 3,933
-------- ----- --- -----
Subscription
and other
software-
related
service
revenue 223 0 223
------------ --- --- ---
Software
and
software-
related
service
revenue 5,632 11 5,643
---------- ----- --- -----
-thereof
SAP
excluding
Sybase 5,632 11 5,643
---------- ----- --- -----
Consulting
revenue 1,554 0 1,554
---------- ----- --- -----
Other
service
revenue 296 0 296
-------- --- --- ---
Professional
services
and other
service
revenue 1,850 0 1,850
------------ ----- --- -----
Total
revenue 7,482 11 7,493
-------- ----- --- -----


Non-IFRS
Operating
Expense
Numbers
----------
Cost of
software
and
software-
related
services -1,200 147 -1,053
---------- ------ --- ------
Cost of
professional
services
and other
services -1,423 3 -1,420
------------- ------ --- ------
Research
and
development -1,120 3 -1,117
------------ ------ --- ------
Sales and
marketing -1,590 55 -1,535
---------- ------ --- ------
General
and
administration -395 2 -393
--------------- ---- --- ----
Restructuring -193 5 -188
------------- ---- --- ----
Other
operating
income/
expense,
net 6 0 6
---------- --- --- ---
Total
operating
expenses -5,915 215 -5,700
---------- ------ --- ------


Non-IFRS
Profit
Numbers
--------
Operating
profit 1,567 226 1,792
--------- ----- --- -----
Other non-
operating
income/
expense,
net -62 0 -62
---------- --- --- ---
Finance
income 27 0 27
------- --- --- ---
Finance
costs -79 0 -79
------- --- --- ---
Other
financial
gains/
losses,
net -8 0 -8
---------- --- --- ---
Financial
income,
net -60 0 -60
--------- --- --- ---
Profit
before
tax 1,445 226 1,671
------- ----- --- -----
Income tax
expense -376 -56 -432
---------- ---- --- ----
Profit
after tax 1,069 170 1,239
---------- ----- --- -----
Profit
attributable
to non-
controlling
interests 1 0 1
------------- --- --- ---
Profit
attributable
to owners
of parent 1,068 170 1,238
------------- ----- --- -----


Non-IFRS
Key
Ratios
--------
Operating
margin in
% 20.9 23.9
---------- ---- ----
Effective
tax rate
in % 26.0 25.9
--------- ---- ----
Basic
earnings
per
share, in
euro 0.90 1.04
---------- ---- ----

 

 

 



euro
millions,
unless
otherwise
stated Nine months ended September 30
Change
in %
Non- Non-
IFRS IFRS* IFRS
---- ----- constant
currency**
----------



Non-IFRS
Revenue
Numbers
--------
Software
revenue 18 18 9
-------- --- --- ---
Support
revenue 14 15 10
-------- --- --- ---
Subscription
and other
software-
related
service
revenue 28 28 24
------------ --- --- ---
Software
and
software-
related
service
revenue 16 16 10
---------- --- --- ---
-thereof
SAP
excluding
Sybase 14 14 8
---------- --- --- ---
Consulting
revenue 1 1 -4
---------- --- --- ---
Other
service
revenue 6 6 1
-------- --- --- ---
Professional
services
and other
service
revenue 2 2 -3
------------ --- --- ---
Total
revenue 12 13 7
-------- --- --- ---


Non-IFRS
Operating
Expense
Numbers
----------
Cost of
software
and
software-
related
services 11 9
---------- --- ---
Cost of
professional
services
and other
services 4 4
------------- --- ---
Research
and
development 11 11
------------ --- ---
Sales and
marketing 17 18
---------- --- ---
General
and
administration 17 14
--------------- --- ---
Restructuring <-100 -99
------------- ----- ---
Other
operating
income/
expense,
net 17 17
---------- --- ---
Total
operating
expenses 8 7 3
---------- --- --- ---


Non-IFRS
Profit
Numbers
--------
Operating
profit 31 30 19
--------- --- --- ---
Other non-
operating
income/
expense,
net >100 >100
---------- ---- ----
Finance
income 41 41
------- --- ---
Finance
costs -15 -15
------- --- ---
Other
financial
gains/
losses,
net <-100 <-100
---------- ----- -----
Financial
income,
net -58 -58
--------- --- ---
Profit
before
tax 31 31
------- --- ---
Income tax
expense 35 37
---------- --- ---
Profit
after tax 29 28
---------- --- ---
Profit
attributable
to non-
controlling
interests 100 100
------------- --- ---
Profit
attributable
to owners
of parent 29 28
------------- --- ---


Non-IFRS
Key
Ratios
--------
Operating
margin in
% 3.5pp 3.7pp 2.7pp
--------- ----- ----- -----
Effective
tax rate
in % 0.9pp 1.2pp
--------- ----- -----
Basic
earnings
per
share, in
euro 29 29
---------- --- ---


* Adjustments in the revenue line items are for support revenue that
entities acquired by SAP would have recognized had they remained
stand-alone entities but that SAP is not permitted to recognize as
revenue under IFRS as a result of business combination accounting
rules. Adjustments in the operating expense line items are for
acquisition-related charges and discontinued activities. See
Explanations of Non-IFRS Measures for details.

** Constant currency revenue figures are calculated by translating
revenue of the current period using the average exchange rates from
the previous year's respective period instead of the current period.
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.

Differences may exist due to rounding.

 

 

 

 

 

 

    REVENUE BY REGION
(Preliminary and unaudited)

The following tables present our IFRS and non-IFRS revenue by region
based on customer location. The tables also present a reconciliation
from our non-IFRS revenue (including our non-IFRS revenue at
constant currency) to the respective most comparable IFRS revenue.
Note: Our non-IFRS revenues are not prepared under a comprehensive
set of accounting rules or principles.

    euro               Three months ended September
millions 30
2010
Non- Non-
IFRS Adj.* IFRS* Currency IFRS
---- ----- ----- impact** constant
-------- currency**
----------



Software
revenue
by region
----------
EMEA 287 0 287 -11 276
---- --- --- --- --- ---
Americas 253 0 253 -24 229
-------- --- --- --- --- ---
Asia
Pacific
Japan 116 0 116 -17 99
-------- --- --- --- --- ---
Software
revenue 656 0 656 -52 604
-------- --- --- --- --- ---


Software
and
software-
related
service
revenue
by region
----------


Germany 369 0 369 0 369
------- --- --- --- --- ---
Rest of
EMEA 788 10 798 -34 764
------- --- --- --- --- ---
Total EMEA 1,158 10 1,167 -34 1,133
---------- ----- --- ----- --- -----
United
States 606 21 627 -60 567
------- --- --- --- --- ---
Rest of
Americas 200 2 203 -18 185
--------- --- --- --- --- ---
Total
Americas 806 24 830 -79 751
--------- --- --- --- --- ---
Japan 107 1 108 -19 89
----- --- --- --- --- ---
Rest of
Asia
Pacific
Japan 246 1 247 -36 211
-------- --- --- --- --- ---
Total Asia
Pacific
Japan 352 3 355 -55 300
---------- --- --- --- --- ---
Software
and
software-
related
service
revenue 2,316 36 2,352 -167 2,185
---------- ----- --- ----- ---- -----


Total
revenue
by region
----------
Germany 521 0 521 0 521
------- --- --- --- --- ---
Rest of
EMEA 975 10 985 -42 943
------- --- --- --- --- ---
Total EMEA 1,496 10 1,506 -42 1,464
---------- ----- --- ----- --- -----
United
States 810 21 831 -81 750
------- --- --- --- --- ---
Rest of
Americas 268 2 271 -26 245
--------- --- --- --- --- ---
Total
Americas 1,078 24 1,101 -106 995
--------- ----- --- ----- ---- ---
Japan 125 1 127 -22 105
----- --- --- --- --- ---
Rest of
Asia
Pacific
Japan 304 1 305 -45 260
-------- --- --- --- --- ---
Total Asia
Pacific
Japan 429 3 432 -67 365
---------- --- --- --- --- ---
Total
revenue 3,003 36 3,039 -215 2,824
-------- ----- --- ----- ---- -----

 

 

 


euro Three months ended September
millions 30
2009
Non-
IFRS Adj.* IFRS*
---- ----- -----



Software
revenue
by region
----------
EMEA 254 0 254
---- --- --- ---
Americas 180 0 180
-------- --- --- ---
Asia
Pacific
Japan 91 0 91
-------- --- --- ---
Software
revenue 525 0 525
-------- --- --- ---


Software
and
software-
related
service
revenue
by region
----------


Germany 342 0 342
------- --- --- ---
Rest of
EMEA 695 0 695
------- --- --- ---
Total EMEA 1,037 0 1,037
---------- ----- --- -----
United
States 476 0 476
------- --- --- ---
Rest of
Americas 167 0 167
--------- --- --- ---
Total
Americas 643 0 643
--------- --- --- ---
Japan 89 0 89
----- --- --- ---
Rest of
Asia
Pacific
Japan 168 0 168
-------- --- --- ---
Total Asia
Pacific
Japan 257 0 257
---------- --- --- ---
Software
and
software-
related
service
revenue 1,937 0 1,937
---------- ----- --- -----


Total
revenue
by region
----------
Germany 481 0 481
------- --- --- ---
Rest of
EMEA 858 0 858
------- --- --- ---
Total EMEA 1,339 0 1,339
---------- ----- --- -----
United
States 628 0 628
------- --- --- ---
Rest of
Americas 222 0 222
--------- --- --- ---
Total
Americas 850 0 850
--------- --- --- ---
Japan 102 0 102
----- --- --- ---
Rest of
Asia
Pacific
Japan 216 0 216
-------- --- --- ---
Total Asia
Pacific
Japan 319 0 319
---------- --- --- ---
Total
revenue 2,508 0 2,508
-------- ----- --- -----

 

 

 


euro Three months ended September
millions 30
Change
in %
Non- Non-
IFRS IFRS* IFRS
---- ----- constant
currency**
----------



Software
revenue
by region
----------
EMEA 13 13 9
---- --- --- ---
Americas 41 41 27
-------- --- --- ---
Asia
Pacific
Japan 27 27 9
-------- --- --- ---
Software
revenue 25 25 15
-------- --- --- ---


Software
and
software-
related
service
revenue
by region
----------


Germany 8 8 8
------- --- --- ---
Rest of
EMEA 13 15 10
------- --- --- ---
Total EMEA 12 13 9
---------- --- --- ---
United
States 27 32 19
------- --- --- ---
Rest of
Americas 20 22 11
--------- --- --- ---
Total
Americas 25 29 17
--------- --- --- ---
Japan 20 21 0
----- --- --- ---
Rest of
Asia
Pacific
Japan 46 47 26
-------- --- --- ---
Total Asia
Pacific
Japan 37 38 17
---------- --- --- ---
Software
and
software-
related
service
revenue 20 21 13
---------- --- --- ---


Total
revenue
by region
----------
Germany 8 8 8
------- --- --- ---
Rest of
EMEA 14 15 10
------- --- --- ---
Total EMEA 12 12 9
---------- --- --- ---
United
States 29 32 19
------- --- --- ---
Rest of
Americas 21 22 10
--------- --- --- ---
Total
Americas 27 30 17
--------- --- --- ---
Japan 23 25 3
----- --- --- ---
Rest of
Asia
Pacific
Japan 41 41 20
-------- --- --- ---
Total Asia
Pacific
Japan 34 35 14
---------- --- --- ---
Total
revenue 20 21 13
-------- --- --- ---

 

 



euro
millions Nine months ended September 30
2010
Non- Non-
IFRS Adj.* IFRS* Currency IFRS
---- ----- ----- impact** constant
-------- currency**
----------



Software
revenue
by
region
--------
EMEA 747 0 747 -26 721
---- --- --- --- --- ---
Americas 694 0 694 -65 629
-------- --- --- --- --- ---
Asia
Pacific
Japan 317 0 317 -43 274
-------- --- --- --- --- ---
Software
revenue 1,757 0 1,757 -133 1,624
-------- ----- --- ----- ---- -----


Software
and
software-
related
service
revenue
by
region
----------


Germany 1,040 0 1,040 0 1,040
------- ----- --- ----- --- -----
Rest of
EMEA 2,197 10 2,207 -79 2,128
------- ----- --- ----- --- -----
Total
EMEA 3,237 10 3,246 -78 3,168
----- ----- --- ----- --- -----
United
States 1,693 21 1,714 -83 1,631
------- ----- --- ----- --- -----
Rest of
Americas 599 2 601 -63 538
--------- --- --- --- --- ---
Total
Americas 2,292 24 2,315 -147 2,168
--------- ----- --- ----- ---- -----
Japan 315 1 316 -32 284
----- --- --- --- --- ---
Rest of
Asia
Pacific
Japan 678 1 679 -91 588
-------- --- --- --- --- ---
Total
Asia
Pacific
Japan 993 3 996 -124 872
-------- --- --- --- ---- ---
Software
and
software-
related
service
revenue 6,521 36 6,557 -349 6,208
---------- ----- --- ----- ---- -----


Total
revenue
by
region
--------
Germany 1,470 0 1,470 0 1,470
------- ----- --- ----- --- -----
Rest of
EMEA 2,718 10 2,728 -98 2,630
------- ----- --- ----- --- -----
Total
EMEA 4,189 10 4,199 -99 4,100
----- ----- --- ----- --- -----
United
States 2,231 21 2,253 -108 2,145
------- ----- --- ----- ---- -----
Rest of
Americas 790 2 793 -88 705
--------- --- --- --- --- ---
Total
Americas 3,021 24 3,045 -195 2,850
--------- ----- --- ----- ---- -----
Japan 361 1 362 -37 325
----- --- --- --- --- ---
Rest of
Asia
Pacific
Japan 835 1 836 -113 723
-------- --- --- --- ---- ---
Total
Asia
Pacific
Japan 1,196 3 1,198 -150 1,048
-------- ----- --- ----- ---- -----
Total
revenue 8,406 36 8,442 -444 7,998
-------- ----- --- ----- ---- -----

 

 

 



euro
millions Nine months ended September 30
2009
Non-
IFRS Adj.* IFRS*
---- ----- -----



Software
revenue
by
region
--------
EMEA 726 0 726
---- --- --- ---
Americas 496 0 496
-------- --- --- ---
Asia
Pacific
Japan 265 0 265
-------- --- --- ---
Software
revenue 1,487 0 1,487
-------- ----- --- -----


Software
and
software-
related
service
revenue
by
region
----------


Germany 948 0 948
------- --- --- ---
Rest of
EMEA 2,002 4 2,006
------- ----- --- -----
Total
EMEA 2,950 4 2,954
----- ----- --- -----
United
States 1,417 6 1,423
------- ----- --- -----
Rest of
Americas 479 0 479
--------- --- --- ---
Total
Americas 1,896 6 1,902
--------- ----- --- -----
Japan 292 0 292
----- --- --- ---
Rest of
Asia
Pacific
Japan 494 0 494
-------- --- --- ---
Total
Asia
Pacific
Japan 786 1 787
-------- --- --- ---
Software
and
software-
related
service
revenue 5,632 11 5,643
---------- ----- --- -----


Total
revenue
by
region
--------
Germany 1,376 0 1,376
------- ----- --- -----
Rest of
EMEA 2,531 4 2,535
------- ----- --- -----
Total
EMEA 3,907 4 3,911
----- ----- --- -----
United
States 1,941 6 1,947
------- ----- --- -----
Rest of
Americas 647 0 647
--------- --- --- ---
Total
Americas 2,588 6 2,594
--------- ----- --- -----
Japan 348 0 348
----- --- --- ---
Rest of
Asia
Pacific
Japan 639 0 639
-------- --- --- ---
Total
Asia
Pacific
Japan 987 1 988
-------- --- --- ---
Total
revenue 7,482 11 7,493
-------- ----- --- -----

 

 

 



euro
millions Nine months ended September 30
Change
in %
Non- Non-
IFRS IFRS* IFRS
---- ----- constant
currency**
----------



Software
revenue
by
region
--------
EMEA 3 3 -1
---- --- --- ---
Americas 40 40 27
-------- --- --- ---
Asia
Pacific
Japan 20 20 3
-------- --- --- ---
Software
revenue 18 18 9
-------- --- --- ---


Software
and
software-
related
service
revenue
by
region
----------


Germany 10 10 10
------- --- --- ---
Rest of
EMEA 10 10 6
------- --- --- ---
Total
EMEA 10 10 7
----- --- --- ---
United
States 19 20 15
------- --- --- ---
Rest of
Americas 25 25 12
--------- --- --- ---
Total
Americas 21 22 14
--------- --- --- ---
Japan 8 8 -3
----- --- --- ---
Rest of
Asia
Pacific
Japan 37 37 19
-------- --- --- ---
Total
Asia
Pacific
Japan 26 27 11
-------- --- --- ---
Software
and
software-
related
service
revenue 16 16 10
---------- --- --- ---


Total
revenue
by
region
--------
Germany 7 7 7
------- --- --- ---
Rest of
EMEA 7 8 4
------- --- --- ---
Total
EMEA 7 7 5
----- --- --- ---
United
States 15 16 10
------- --- --- ---
Rest of
Americas 22 23 9
--------- --- --- ---
Total
Americas 17 17 10
--------- --- --- ---
Japan 4 4 -7
----- --- --- ---
Rest of
Asia
Pacific
Japan 31 31 13
-------- --- --- ---
Total
Asia
Pacific
Japan 21 21 6
-------- --- --- ---
Total
revenue 12 13 7
-------- --- --- ---


* Adjustments in the revenue line items are for support revenue that
entities acquired by SAP would have recognized had they remained
stand-alone entities but that SAP is not permitted to recognize as
revenue under
IFRS as a result of business combination accounting rules. See
Explanations of Non-IFRS Measures for details.

** Constant currency revenue figures are calculated by translating
revenue of the current period using the average exchange rates from
the previous year's respective period instead of the current period.
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.

Differences may exist due to rounding.

 

 

 

 

 

 

 

    SHARE-BASED COMPENSATION
(Preliminary and unaudited)

                                    Nine months ended
euro millions September 30
Change
2010 2009 in %
---- ---- -------
Share-based
compensation per
expense line item
------------------
Cost of software
and software-
related services 4 5 -20
----------------- --- --- ---
Cost of
professional
services and other
services 9 10 -10
------------------- --- --- ---
Research and
development 19 20 -5
------------ --- --- ---
Sales and marketing 10 15 -33
------------------- --- --- ---
General and
administration 7 10 -30
--------------- --- --- ---
Total share-based
compensation 49 60 -18
----------------- --- --- ---


    Note: The share-based compensation expenses do not differ between
SAP's IFRS and non-IFRS measures.

Differences may exist due to rounding.

 

 

 

 

    FREE CASH FLOW
(Preliminary and unaudited)

                                    Nine months
ended September
euro millions 30
Change
2010 2009 in %
---- ---- ------
Net cash flows from
operating activities 2,062 2,362 -13
--------------------- ----- ----- ---
Additions to non-current
assets excluding
additions from
acquisitions -200 -169 18
------------------------ ---- ---- ---
Free cash flow 1,862 2,193 -15
-------------- ----- ----- ---


    Differences may exist due to rounding.

 

 

 

 

 

 

 

    DAYS SALES OUTSTANDING (DSO)
(Unaudited)

                               as at September 30,
2010 and December
31, 2009
Change
2010 2009 in days
---- ---- -------
Days sales
outstanding (DSO) in
days* 70 79 -9
--------------------- --- --- ---

    * Day Sales Outstanding measures the length of time it takes to
collect receivables. SAP calculates DSO by dividing the
average invoiced accounts receivables balance of the last 12 months
by the average monthly sales of the last 12 months.

 

 

 

 

 

    NUMBER OF EMPLOYEES (in Full-Time Equivalents)

                                 September 30, 2010
Asia
Pacific
EMEA Americas Japan Total
---- -------- ------- -----
Software and
software-related
services 3,729 1,743 2,234 7,706
----------------- ----- ----- ----- -----
Professional
services and other
services 6,772 3,904 2,348 13,024
------------------- ----- ----- ----- ------
Research and
development 8,511 3,156 4,108 15,775
------------ ----- ----- ----- ------
Sales and marketing 4,547 4,148 2,163 10,858
------------------- ----- ----- ----- ------
General and
administration 2,037 997 527 3,561
--------------- ----- --- --- -----
Infrastructure 1,134 594 269 1,997
-------------- ----- --- --- -----
SAP Group
(September 30) 26,730 14,542 11,649 52,921
--------------- ------ ------ ------ ------


SAP Group (First
nine months) 25,668 12,723 10,640 49,031
---------------- ------ ------ ------ ------

 

 

 


September 30, 2009
Asia
Pacific
EMEA Americas Japan Total
---- -------- ------- -----
Software and
software-related
services 3,211 1,252 1,862 6,325
----------------- ----- ----- ----- -----
Professional
services and other
services 6,704 3,509 2,277 12,490
------------------- ----- ----- ----- ------
Research and
development 8,554 2,525 3,809 14,888
------------ ----- ----- ----- ------
Sales and marketing 4,222 3,560 1,763 9,545
------------------- ----- ----- ----- -----
General and
administration 1,965 736 415 3,116
--------------- ----- --- --- -----
Infrastructure 873 395 178 1,446
-------------- --- --- --- -----
SAP Group
(September 30) 25,529 11,977 10,304 47,810
--------------- ------ ------ ------ ------


SAP Group (First
nine months) 26,199 12,528 10,734 49,461
---------------- ------ ------ ------ ------

 

 

 

 

    MULTI-QUARTER SUMMARY
(IFRS and non-IFRS; preliminary und unaudited)

    euro millions,
unless otherwise
stated Q3/2010 Q2/2010 Q1/2010 Q4/2009
Software revenue
(IFRS) 656 637 464 1,120
Revenue
adjustment* 0 0 0 0
Software revenue
(non-IFRS) 656 637 464 1,120

Support revenue
(IFRS) 1,559 1,526 1,394 1,364
Revenue
adjustment* 36 0 0 0
Support revenue
(non-IFRS) 1,595 1,526 1,394 1,364

Subscription and
other software-
related service
revenue (IFRS) 101 95 89 82
Revenue
adjustment* 0 0 0 0
Subscription and
other software-
related service
revenue (non-
IFRS) 101 95 89 82

Software and
software-related
service revenue
(IFRS) 2,316 2,258 1,947 2,566
Revenue
adjustment* 36 0 0 0
Software and
software-related
service revenue
(non-IFRS) 2,352 2,258 1,947 2,566

Total revenue
(IFRS) 3,003 2,894 2,509 3,190
Revenue
adjustment* 36 0 0 0
Total revenue
(non-IFRS) 3,039 2,894 2,509 3,190

Operating profit
(IFRS) 716 774 557 1,022
Revenue
adjustment* 36 0 0 0
Expense
adjustment* 131 66 54 113
Operating profit
(non-IFRS) 883 840 612 1,134

Operating margin
(IFRS) 23.8 26.7 22.2 32.0
Operating margin
(non-IFRS) 29.1 29.0 24.4 35.5

Effective tax rate
(IFRS) 27.3 27.4 25.7 31.1
Effective tax rate
(non-IFRS) 28.7 26.8 25.3 30.5

Basic earnings per
share, in euro
(IFRS) 0.42 0.41 0.33 0.57
Basic earnings per
share, in euro
(non-IFRS) 0.51 0.46 0.37 0.64

Headcount** 52,921 48,021 47,598 47,584

 

 

 


euro millions, unless
otherwise stated Q3/2009 Q2/2009 Q1/2009
Software revenue
(IFRS) 525 543 418
Revenue adjustment* 0 0 0
Software revenue
(non-IFRS) 525 543 418

Support revenue
(IFRS) 1,333 1,337 1,252
Revenue adjustment* 0 0 11
Support revenue (non-
IFRS) 1,333 1,337 1,263

Subscription and
other software-
related service
revenue (IFRS) 79 73 71
Revenue adjustment* 0 0 0
Subscription and
other software-
related service
revenue (non-IFRS) 79 73 71

Software and
software-related
service revenue
(IFRS) 1,937 1,953 1,741
Revenue adjustment* 0 0 11
Software and
software-related
service revenue
(non-IFRS) 1,937 1,953 1,752

Total revenue (IFRS) 2,508 2,576 2,397
Revenue adjustment* 0 0 11
Total revenue (non-
IFRS) 2,508 2,576 2,408

Operating profit
(IFRS) 619 641 307
Revenue adjustment* 0 0 11
Expense adjustment* 68 69 78
Operating profit
(non-IFRS) 687 710 396

Operating margin
(IFRS) 24.7 24.9 12.8
Operating margin
(non-IFRS) 27.4 27.6 16.4

Effective tax rate
(IFRS) 20.5 28.5 31.7
Effective tax rate
(non-IFRS) 21.0 28.1 30.1

Basic earnings per
share, in euro
(IFRS) 0.38 0.36 0.17
Basic earnings per
share, in euro
(non-IFRS) 0.42 0.40 0.22

Headcount** 47,810 48,567 49,922


* Adjustments in the revenue line items are for support revenue that
entities acquired by SAP would have recognized had they remained
stand-alone entities
but that SAP is not permitted to recognize as revenue under IFRS as a
result of business combination accounting rules. Adjustments in the
operating expense line items are for
acquisition-related charges and discontinued activities. See
Explanations of Non-IFRS Measures for details.

** in full-time equivalents at quarter end

Differences may exist due to rounding.

 

 

 

 

 

 

EXPLANATIONS OF NON-IFRS MEASURES

 

This document discloses certain financial measures, such as non-IFRS revenues, non-IFRS expenses, non-IFRS operating income, non-IFRS operating margin, non-IFRS net income, non-IFRS earnings per share, free cash flow as well as constant currency revenue and operating income measures that are not prepared in accordance with IFRS and are therefore considered non-IFRS financial measures. Our non-IFRS financial measures may not correspond to non-IFRS financial measures that other companies report. The non-IFRS financial measures that we report should be considered in addition to, and not as substitutes for or superior to, revenue, operating income, cash flows, or other measures of financial performance prepared in accordance with IFRS. Our non-IFRS financial measures included in this document are reconciled to the nearest IFRS measure in the tables on the pages F8 to F13 above.

 

We believe that the supplemental historical and prospective non-IFRS financial information presented here provides useful supplemental information to investors because it is the same information used by our management in running our business and making financial, strategic and operational decisions - in addition to financial data prepared in accordance with IFRS - to attain a more transparent understanding of our past performance and our future results. At the beginning of 2010 the non-IFRS measures as defined below replaced the Non GAAP measures which we used until the termination of our U.S. GAAP reporting. We use these non-IFRS measures consistently in our planning and forecasting, reporting, compensation and external communication. Specifically,

 

  • Our management primarily uses these non-IFRS measures rather than IFRS measures as the basis for making financial, strategic and operating decisions.
  • The variable remuneration components of our board members and employees are based on non-IFRS revenue and non-IFRS operating profit rather than the respective IFRS measures.
  • The annual budgeting process involving all management units is based on non-IFRS revenues and non-IFRS operating income numbers rather than IFRS numbers with costs such as share-based compensation and restructuring only being considered on corporate level.
  • All monthly forecast and performance reviews with all senior managers globally are based on these non-IFRS measures, rather than IFRS numbers.
  • Both, company-internal target setting and guidance provided to the capital markets are based on non-IFRS revenues and non-IFRS income measures rather than IFRS numbers.

We believe that our non-IFRS measures are useful to investors for the following reasons:

  • The non-IFRS measures provide investors with insight into management's decision-making since management uses these non-IFRS measures to run our business and make financial, strategic and operating decisions.
  • The non-IFRS measures provide investors with additional information that enables a comparison of year-over-year operating performance by eliminating certain direct effects of acquisitions.

 

Our non-IFRS financial measures reflect adjustments based on the items below, as well as the related income tax effects:

 

Non-IFRS revenue:

 

Revenues in this document identified as non-IFRS revenue have been adjusted from the respective IFRS numbers by including the full amount of support revenue that would have been recorded by entities acquired by SAP had they remained stand-alone entities but which we are not permitted to record as revenue under IFRS due to fair value accounting for the support contracts in effect at the time of the respective acquisitions.

 

Under IFRS, we record at fair value the support contracts in effect at the time entities were acquired. Consequently, our IFRS support revenue, our IFRS software and software-related service revenue and our IFRS total revenue for periods subsequent to acquisitions do not reflect the full amount of support revenue that would have been recorded for these support contracts absent these acquisitions by SAP. Adjusting revenue numbers for this revenue impact (if significant) provides additional insight into the comparability across periods of our ongoing performance.

 

Non-IFRS operating expense:

 

Operating expense figures in this report that are identified as non-IFRS operating expense have been adjusted by excluding the following acquisition-related charges:

  • Acquisition related charges
    • Amortization expense/impairment charges of intangibles acquired in business combinations and certain standalone acquisitions of intellectual property (including purchased in-process research and development)
    • Restructuring expenses and settlements of pre-existing relationships incurred in connection with a business combination
    • Acquisition-related third-party expenses
  • Discontinued Activities: Results of the discontinued operations that qualify as such under IFRS in all respects except that they do not represent a major line of business

 

 

 

Non-IFRS operating income, non-IFRS operating margin, non-IFRS net income and non-IFRS earnings per share:

 

Operating income, operating margin, net income and earnings per share in this document identified as non-IFRS operating income, non-IFRS operating margin, non-IFRS net income and non-IFRS earnings per share have been adjusted from the respective operating income, operating margin, net income and earnings per share numbers as recorded under IFRS by adjusting for the above mentioned non-IFRS revenues and non-IFRS expenses.

 

We exclude the acquisition related expense adjustments for the purpose of calculating non-IFRS operating income, non-IFRS operating margin, non-IFRS net income and non-IFRS earnings per share when evaluating the continuing operational performance of the Company because these expenses generally cannot be changed or influenced by management after the relevant acquisition other than by disposing of the acquired assets. Since management at levels below the Executive Board has no influence on these expenses we generally do not consider these expenses for the purpose of evaluating the performance of management units.

 

We include the revenue adjustements outlined above and exclude the expense adjustements when making decisions to allocate resources, both on a Company level and at lower levels of the organization. In addition, we use these non-IFRS measures to gain a better understanding of the Company's comparative operating performance from period to period. We believe that our non-IFRS financial measures described above have limitations, which include but are not limited to the following:

  • The eliminated amounts may be material to us.
  • Without being analyzed in conjunction with the corresponding IFRS measures the non-IFRS measures are not indicative of our present and future performance, foremost for the following reasons:
    • While our non-IFRS income numbers reflect the elimination of certain acquisition-related expenses, no eliminations are made for the additional revenues and other revenues that result from the acquisitions.
    • The acquisition-related charges that we eliminate in deriving our non-IFRS income numbers are likely to recur should SAP enter into material business combinations in the future.
    • The acquisition-related amortization expense that we eliminate in deriving our non-IFRS income numbers is a recurring expense that will impact our financial performance in future years.
    • The revenue adjustment for the fair value accounting of the acquired entities' support contracts and the expense adjustment for acquisition-related charges do not arise from a common conceptual basis. This is because the revenue adjustment aims to improve the comparability of the initial post-acquisition period with future post-acquisition periods while the expense adjustment aims to improve the comparability between post-acquisition periods and pre-acquisition periods. This should particularly be considered when evaluating our non-IFRS operating income and non-IFRS operating margin numbers as these combine our non-IFRS revenue and non-IFRS expenses despite the absence of a common conceptual basis.

 

Additionally, our non-IFRS measures have been adjusted from the respective IFRS numbers for the results of the discontinued operations that qualify as such under IFRS in all respects except that they do not represent a major line of business. We refer to these activities as "discontinued activities." Under our U.S. GAAP which we provided until 2009, we presented the results of operations of the TomorrowNow entities as discontinued operations. Under IFRS, results of discontinued operations may only be presented as discontinued operations if a separate major line of business or geographical area of operations is discontinued. Our TomorrowNow operations were not a separate major line of business and thus did not qualify for separate presentation under IFRS. We believe that this additional non-IFRS adjustment to our IFRS numbers for the results of our discontinued TomorrowNow activities is useful to investors for the following reasons:

 

  • Despite the migration from U.S. GAAP to IFRS, we will continue to internally treat the ceased TomorrowNow activities as discontinued activities and thus will continue to exclude potential future TomorrowNow results, which are expected to mainly comprise of expenses in connection with the Oracle lawsuit, from our internal management reporting, planning, forecasting, and compensation plans. Therefore, adjusting our non-IFRS measures for the results of the discontinued TomorrowNow activities provides insight into the financial measures that SAP uses internally.
  • By adjusting the non-IFRS numbers for the results from our discontinued TomorrowNow operations, the non-IFRS numbers are more comparable to the non-GAAP measures that SAP used through the end of 2009, which makes SAP's performance measures before and after the full IFRS migration easier to compare.

 

We believe, however, that the presentation of the non-IFRS measures in conjunction with the corresponding IFRS measures as well as the relevant reconciliations, provides useful information to management and investors regarding present and future business trends relating to our financial condition and results of operations. We therefore do not evaluate our growth and performance without considering both non-IFRS measures and the relevant IFRS measures. We caution the readers of this document to follow a similar approach by considering our non-IFRS measures only in addition to, and not as a substitute for or superior to, revenues or other measures of our financial performance prepared in accordance with IFRS.

 

 

Free Cash Flow

 

We use our free cash flow measure to estimate the cash flow remaining after all expenditures required to maintain or expand the organic business have been paid off. This assists management with the supplemental information to assess our liquidity needs. We calculate free cash flow as net cash from operating activities minus additions to non-current assets, excluding additions from acquisitions. Free cash flow should be considered in addition to, and not as a substitute for or superior to, cash flow or other measures of liquidity and financial performance prepared in accordance with IFRS.

 

Constant Currency Period-Over-Period Changes

 

We believe it is important for investors to have information that provides insight into our sales. Revenue measures determined under IFRS provide information that is useful in this regard. However, both sales volume and currency effects impact period-over-period changes in sales revenue. We do not sell standardized units of products and services, so we cannot provide relevant information on sales volume by providing data on the changes in product and service units sold. To provide additional information that may be useful to investors in breaking down and evaluating changes in sales volume, we present information about our revenue and various values and components relating to operating income that are adjusted for foreign currency effects. We calculate constant currency year-over-year changes in revenue and operating income by translating foreign currencies using the average exchange rates from the previous year instead of the report year.

 

We believe that data on constant currency period-over-period changes have limitations, particularly as the currency effects that are eliminated constitute a significant element of our revenue and expenses and may severely impact our performance. We therefore limit our use of constant currency period-over-period changes to the analysis of changes in volume as one element of the full change in a financial measure. We do not evaluate our results and performance without considering both constant currency period-over-period changes in non-IFRS revenue and non-IFRS operating income on the one hand and changes in revenue, expenses, income, or other measures of financial performance prepared in accordance with IFRS on the other. We caution the readers of this document to follow a similar approach by considering data on constant currency period-over-period changes only in addition to, and not as a substitute for or superior to, changes in revenue, expenses, income, or other measures of financial performance prepared in accordance with IFRS.

 

 

 

 

 

 

 

 

 

 

SOURCE SAP AG

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Recently, IoT seems emerging as a solution vehicle for data analytics on real-world scenarios from setting a room temperature setting to predicting a component failure of an aircraft. Compared with developing an application or deploying a cloud service, is an IoT solution unique? If so, how? How does a typical IoT solution architecture consist? And what are the essential components and how are they relevant to each other? How does the security play out? What are the best practices in formulating...
In his session at @ThingsExpo, Arvind Radhakrishnen discussed how IoT offers new business models in banking and financial services organizations with the capability to revolutionize products, payments, channels, business processes and asset management built on strong architectural foundation. The following topics were covered: How IoT stands to impact various business parameters including customer experience, cost and risk management within BFS organizations.
SYS-CON Events announced today that Elastifile will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Elastifile Cloud File System (ECFS) is software-defined data infrastructure designed for seamless and efficient management of dynamic workloads across heterogeneous environments. Elastifile provides the architecture needed to optimize your hybrid cloud environment, by facilitating efficient...
SYS-CON Events announced today that Golden Gate University will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Since 1901, non-profit Golden Gate University (GGU) has been helping adults achieve their professional goals by providing high quality, practice-based undergraduate and graduate educational programs in law, taxation, business and related professions. Many of its courses are taug...
SYS-CON Events announced today that DXWorldExpo has been named “Global Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Digital Transformation is the key issue driving the global enterprise IT business. Digital Transformation is most prominent among Global 2000 enterprises and government institutions.
An increasing number of companies are creating products that combine data with analytical capabilities. Running interactive queries on Big Data requires complex architectures to store and query data effectively, typically involving data streams, an choosing efficient file format/database and multiple independent systems that are tied together through custom-engineered pipelines. In his session at @BigDataExpo at @ThingsExpo, Tomer Levi, a senior software engineer at Intel’s Advanced Analytics ...
21st International Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Me...
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
There is only one world-class Cloud event on earth, and that is Cloud Expo – which returns to Silicon Valley for the 21st Cloud Expo at the Santa Clara Convention Center, October 31 - November 2, 2017. Every Global 2000 enterprise in the world is now integrating cloud computing in some form into its IT development and operations. Midsize and small businesses are also migrating to the cloud in increasing numbers. Companies are each developing their unique mix of cloud technologies and service...
WebRTC is great technology to build your own communication tools. It will be even more exciting experience it with advanced devices, such as a 360 Camera, 360 microphone, and a depth sensor camera. In his session at @ThingsExpo, Masashi Ganeko, a manager at INFOCOM Corporation, will introduce two experimental projects from his team and what they learned from them. "Shotoku Tamago" uses the robot audition software HARK to track speakers in 360 video of a remote party. "Virtual Teleport" uses a...
SYS-CON Events announced today that Secure Channels, a cybersecurity firm, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Secure Channels, Inc. offers several products and solutions to its many clients, helping them protect critical data from being compromised and access to computer networks from the unauthorized. The company develops comprehensive data encryption security strategie...
Recently, WebRTC has a lot of eyes from market. The use cases of WebRTC are expanding - video chat, online education, online health care etc. Not only for human-to-human communication, but also IoT use cases such as machine to human use cases can be seen recently. One of the typical use-case is remote camera monitoring. With WebRTC, people can have interoperability and flexibility for deploying monitoring service. However, the benefit of WebRTC for IoT is not only its convenience and interopera...
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
SYS-CON Events announced today that App2Cloud will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct. 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. App2Cloud is an online Platform, specializing in migrating legacy applications to any Cloud Providers (AWS, Azure, Google Cloud).
IoT is at the core or many Digital Transformation initiatives with the goal of re-inventing a company's business model. We all agree that collecting relevant IoT data will result in massive amounts of data needing to be stored. However, with the rapid development of IoT devices and ongoing business model transformation, we are not able to predict the volume and growth of IoT data. And with the lack of IoT history, traditional methods of IT and infrastructure planning based on the past do not app...
Internet-of-Things discussions can end up either going down the consumer gadget rabbit hole or focused on the sort of data logging that industrial manufacturers have been doing forever. However, in fact, companies today are already using IoT data both to optimize their operational technology and to improve the experience of customer interactions in novel ways. In his session at @ThingsExpo, Gordon Haff, Red Hat Technology Evangelist, shared examples from a wide range of industries – including en...
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. Jack Norris reviews best practices to show how companies develop, deploy, and dynamically update these applications and how this data-first...
Intelligent Automation is now one of the key business imperatives for CIOs and CISOs impacting all areas of business today. In his session at 21st Cloud Expo, Brian Boeggeman, VP Alliances & Partnerships at Ayehu, will talk about how business value is created and delivered through intelligent automation to today’s enterprises. The open ecosystem platform approach toward Intelligent Automation that Ayehu delivers to the market is core to enabling the creation of the self-driving enterprise.
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Consumers increasingly expect their electronic "things" to be connected to smart phones, tablets and the Internet. When that thing happens to be a medical device, the risks and benefits of connectivity must be carefully weighed. Once the decision is made that connecting the device is beneficial, medical device manufacturers must design their products to maintain patient safety and prevent compromised personal health information in the face of cybersecurity threats. In his session at @ThingsExpo...