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SAP SE
Earnings Release • Apr 22, 2021
365_ip_2021-04-22_643b2800-99a8-40fe-92de-be4f8b6bfe7a.pdf
Earnings Release
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April 22, 2021
First Quarter 2021 Financial Highlights
PUBLIC
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 Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.
Financial highlights
Q1 Other Financial Highlights*
- Current Cloud Backlog:
- SAP S/4HANA Current Cloud Backlog:
- SAP S/4HANA Cloud Revenue:
- SaaS/PaaS Revenue excl. Intelligent Spend:
- Share of more predictable revenue now at
- Cloud Gross Margin:
- Earnings per Share:
- Earnings per Share (IFRS):
* All numbers are Non-IFRS unless otherwise stated.
Strong performance across all regions
Q1/21
Cloud Revenue
Cloud and Software Revenue
Canada and Mexico had a robust performance in cloud revenue.
Q1/21
Cloud Revenue
Cloud and Software Revenue
Germany and Switzerland were highlights in cloud revenue.
Q1/21
Cloud Revenue
Cloud and Software Revenue
For cloud revenue, Japan, Australia and Singapore were highlights.
Revenues calculated based on customer location; All numbers are Non-IFRS unless otherwise stated; Individual country highlights are based on Non-IFRS at constant currencies
Gross margins of all business models up in the first quarter
| Non-IFRS at constant currencies as reported |
FY/19 | Q1/20 | Q2/20 | Q3/20 | Q4/20 | FY/20 | Q1/21 |
|---|---|---|---|---|---|---|---|
| Cloud | 68.2 | 69,3 | 69,3 | 69,7 | 70,1 | 69.6 | 69,5 |
| SaaS/PaaS – Intelligent Spend Group |
78.1 | 78,7 | 79,7 | 78,3 | 78,9 | 78.9 | 79,1 |
| SaaS/PaaS – Other |
68.5 | 70,3 | 69,5 | 71,4 | 71,4 | 70.7 | 70,7 |
| IaaS | 28.9 | 30,7 | 35,6 | 33,0 | 35,9 | 33.8 | 32,8 |
| Software Licenses & Support | 87.4 | 85,9 | 87,4 | 88,2 | 88,9 | 87.7 | 86,5 |
| Cloud & Software | 81.6 | 79,7 | 81,0 | 81,6 | 83,0 | 81.4 | 79,7 |
| Services | 25.0 | 22,3 | 25,6 | 31,4 | 28,2 | 26.8 | 28,8 |
| Total Gross Margin | 72.3 | 69,9 | 72,5 | 74,0 | 76,0 | 73.3 | 72,4 |
First quarter 2021
Effective Tax Rate
- IFRS: 20.0% | -7.7pp
- Non-IFRS: 18.7% | -8.5pp
Decrease mainly resulted from tax effects related to changes in tax exempt income and a one-time change in deferred tax liabilities for taxable temporary differences associated with investments in subsidiaries
EPS
- IFRS: €0.88 | +29%
- Non-IFRS: €1.40 | +63%
Reflecting a strong contribution from Sapphire Ventures
Cash Flow Operating Cash Flow
€3.09bn | +3%
Free Cash Flow €2.85bn | +10% Cash flow positively impacted by lower share-based and restructuring payments as well as lower CapEx
CapEx
• €0.15bn | -54%
More of SAP's cloud assets run on hyperscalers' infrastructure
Raising revenue metrics to reflect strong new cloud business performance
| Actuals (Non-IFRS) | Outlook (Non-IFRS @cc) | |
|---|---|---|
| Cloud Revenue Cloud and Software Revenue Total Revenue Operating Profit |
Cloud Revenue in a range of |
Operating Cash Flow approx. |
| Growth: Cloud and Software Revenue |
Free Cash Flow above |
|
| in a range of Growth: |
||
| Operating Profit in a range of Growth: |
||
| Share of more predictable revenue to reach approx. |
||
Appendix
| IFRS | Non-IFRS | ||||||
|---|---|---|---|---|---|---|---|
| € millions, unless otherwise stated |
Q1/21 | Q1/20 | ∆ % | Q1/21 | Q1/20 | ∆ % | ∆ % at cc |
| Cloud | 2,145 | 2,011 | 7 | 2,147 | 2,012 | 7 | 13 |
| Software licenses | 483 | 451 | 7 | 483 | 451 | 7 | 11 |
| Software support | 2,801 | 2,934 | -5 | 2,801 | 2,934 | -5 | 0 |
| Software licenses and support |
3,283 | 3,386 | -3 | 3,283 | 3,386 | -3 | 1 |
| Cloud and software | 5,428 | 5,397 | 1 | 5,431 | 5,398 | 1 | 6 |
| Services | 919 | 1,124 | -18 | 919 | 1,124 | -18 | -14 |
| Total revenue | 6,348 | 6,521 | -3 | 6,350 | 6,522 | -3 | 2 |
| Total operating expenses |
-5,387 | -5,311 | 1 | -4,609 | -5,040 | -9 | -4 |
| Operating profit (loss) |
960 | 1,210 | -21 | 1,741 | 1,482 | 17 | 24 |
| Financial income, net | 315 | -39 | <-100 | 315 | -39 | <-100 | |
| Profit (loss) before tax |
1,337 | 1,122 | 19 | 2,117 | 1,394 | 52 | |
| Income tax expense |
-267 | -310 | -14 | -395 | -379 | 4 | |
| Profit (loss) after tax | 1,070 | 811 | 32 | 1,722 | 1,015 | 70 | |
| Operating margin | 15.1% | 18.6% | -3.4pp | 27.4% | 22.7% | 4.7pp | 4.9pp |
| Earnings per share, basic (in €) | 0.88 | 0.68 | 29 | 1.40 | 0.85 | 63 |
| Non-IFRS, in percent as reported |
FY/18 | Q1/19 | Q2/19 | Q3/19 | Q4/19 | FY/19 | Q1/20 | Q2/20 | Q3/20 | Q4/20 | FY/20 | Q1/21 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cloud | 63.1 | 66,2 | 67,9 | 69,0 | 69,5 | 68.2 | 69,3 | 69,5 | 69,7 | 70,3 | 69.7 | 69,6 |
| SaaS/PaaS – Intelligent Spend Group |
77.8 | 78,0 | 78,1 | 78,0 | 78,0 | 78.1 | 78,8 | 79,9 | 78,3 | 79,1 | 78.9 | 78,7 |
| SaaS/PaaS – Other |
60.0 | 63,8 | 69,0 | 70,5 | 70,0 | 68.5 | 70,2 | 69,5 | 71,4 | 71,4 | 70.7 | 71,0 |
| IaaS | 12.2 | 32,0 | 22,4 | 25,3 | 35,7 | 28.9 | 31,0 | 36,0 | 33,4 | 36,8 | 34.3 | 33,1 |
| Software Licenses & Support |
87.4 | 85,7 | 87,1 | 87,6 | 88,8 | 87.4 | 85,7 | 87,4 | 87,6 | 88,5 | 87.4 | 86,3 |
| Cloud & Software | 81.5 | 79,6 | 81,1 | 81,7 | 83,4 | 81.6 | 79,6 | 81,0 | 81,2 | 82,8 | 81.2 | 79,7 |
| Services | 22.9 | 20,3 | 23,9 | 26,9 | 28,1 | 25.0 | 22,8 | 26,3 | 31,5 | 28,0 | 27.0 | 28,5 |
| Total Gross Margin | 71.8 | 69,5 | 71,4 | 72,3 | 75,2 | 72.3 | 69,8 | 72,6 | 73,7 | 75,8 | 73.1 | 72,3 |
IFRS
Non-IFRS
| Total operating expenses Operating profit (loss) | Total revenue | |||
|---|---|---|---|---|
| Q1/20 | 5,040 | 1,482 | €6,522m | |
| Q1/21 | 4,609 | 1,741 | €6,350m |
• Non-IFRS operating profit (loss) +17% to €1,741m (Q1/20: €1,482m) +24% to €1,843m at cc
• Non-IFRS operating margin +4.7pp to 27.4% (Q1/20: 22.7%) +4.9pp to 27.6% at cc
€6.3bn Total revenue, Non-IFRS
*Non-IFRS at constant currencies
| Assets | Equity and liabilities | ||||
|---|---|---|---|---|---|
| € millions | 3/31/21 | 12/31/20 | € millions | 3/31/21 | 12/31/20 |
| Cash, cash equivalents and other financial assets | 10,332 | 5,311 | Trade and other payables | 1,203 | 1,213 |
| Trade and other receivables | 6,617 | 6,593 | Provisions | 96 | 73 |
| Other liabilities | 8,686 | 7,405 | |||
| Other current assets | 3,129 | 3,166 | Contract liabilities, current | 6,800 | 4,150 |
| Total current assets |
20,078 | 15,069 | Total current liabilities |
16,786 | 12,842 |
| Goodwill | 29,374 | 27,560 | Financial liabilities | 12,369 | 13,605 |
| Provisions | 375 | 368 | |||
| Intangible assets | 4,082 | 3,784 | Contract liabilities, non-current | 93 | 36 |
| Property, plant, and equipment | 4,947 | 5,041 | Other non-current liabilities | 2,035 | 1,693 |
| Other non-current assets | 8,013 | 7,019 | Total non-current liabilities |
14,873 | 15,702 |
| Total liabilities | 31,659 | 28,544 | |||
| Total non-current assets |
46,417 | 43,402 | Total equity | 34,836 | 29,928 |
| Total assets | 66,495 | 58,472 | Total equity and liabilities |
66,495 | 58,472 |
Due to rounding, numbers may not add precisely
| € millions, unless otherwise stated | Q1/21 | Q1/20 | ∆ |
|---|---|---|---|
| Operating cash flow |
3,085 | 2,984 | +3% |
| - Capital expenditure |
-153 | -333 | -54% |
| - Payments of lease liabilities |
-84 | -72 | +17% |
| Free cash flow |
2,848 | 2,580 | +10% |
| Free cash flow in percent of total revenue | 45 | 40 | +5pp |
| Free cash flow conversion rate | 2.66 | 3.18 | -0.52 |
Net Liquidity = cash and cash equivalent plus current time deposits and debt securities minus financial debt
Other = mainly purchase and sales of equity or debt instruments of other entities, proceeds from sales of non-current assets, and effects of foreign currency rates on cash and cash equivalents – for more information see our 2020 Integrated Report
| Non-IFRS adjustments | Actual Amounts Q1/20 |
Actual Amounts Q1/21 |
Est. Amounts for FY/21 |
|---|---|---|---|
| Revenue adjustments | €1m | €2m | €0m to €30m |
| Acquisition-related charges | €162m | €149m | €540m to €640m |
| Share-based payment expenses | €93m | €472m | €2,300m to €2,800m |
| Restructuring charges | €15m | €157m | €150m to €200m |
| Sum of all adjustments | €271m | €780m | €2,990m to €3,670m |
| Expected Currency Impact Based on March 2021 Level for the Rest of the Year | ||||
|---|---|---|---|---|
| in percentage points | Q2 | FY | ||
| Cloud Revenue | -6pp to -4pp |
-4pp to -2pp | ||
| Cloud and software | -5pp to -3pp |
-3pp to -1pp |
||
| Operating profit | -5pp to -3pp |
-3pp to -1pp |
© 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC
© 2020 SAP SE or an SAP affiliate company. All rights reserved . ǀ PUBLIC 18
All figures are Non-IFRS and growth rates at constant currencies unless otherwise stated
- 1) Current Cloud Backlog replaces our previous disclosure of 'New Cloud Bookings'. The 'Current Cloud Backlog' or CCB for short gives you the contractually committed cloud revenue we expect to recognize over the upcoming twelve months. The CCB is thus a subset of our Remaining Performance Obligations: Cloud only and 12 months only. Its expansion between two key dates reflects our success in both, contracting new cloud business as well as renewing existing business. So compared to New Cloud Bookings, it is a better, more holistic indicator of our cloud progress.
- 2) Starting in Q1 2021, SAP is expanding its financial disclosure to provide transparency on the transition of its core ERP business to the cloud. Specifically SAP is disclosing current cloud backlog and cloud revenue contributed by SAP S/4HANA Cloud, which represents SAP's cloud offering for core ERP processes. It mainly includes cloud solutions for financial management, supply chain management, engineering and manufacturing, order management and asset management, as well as associated data management, analytics, development and integration capabilities.
April 22, 2021
First Quarter 2021 Financial Highlights
PUBLIC
