Exhibit 99.1
Quarterly Statement Q2 2020 | 
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SAP Resilient Amid COVID-19 Crisis
Sharp Increase in Operating and Free Cash Flow
Strong Current Cloud Backlog of €6.65 Billion,
Up 21% At Constant Currencies
· IFRS Cloud Gross Margin Up 3.4pp; Non-IFRS Cloud Gross Margin Up 1.6pp
· IFRS Operating Margin Up 6.6pp; Non-IFRS Operating Margin Up 1.8pp
· IFRS EPS At €0.73, Up 54%; Non-IFRS EPS At €1.17, Up 7%
· Operating Cash Flow Up 41%, Free Cash Flow Up 59% in First Six Months
„ This quarter demonstrated that our Intelligent Enterprise strategy clearly resonates with customers around the world. More than ever, the pandemic has proven that digitalization is no longer an option but a must-have to withstand challenging times and to achieve desired business outcomes. We will continue to invest in innovative offerings for our customers to drive business transformations and run complex business processes. We also aim to expand the ecosystem on our business technology platform to complement our solutions and foster growth. Christian Klein, CEO | | | „ We were happy to see such a strong sequential improvement in software licenses revenue and a robust margin expansion. Our broad solution portfolio, unmatched industry and geographic diversification coupled with our strong base of more predictable revenue have allowed us to manage the COVID-19 crisis this quarter. With our investments in strategic growth areas we are confident we will not only weather the crisis but emerge even stronger. We were also pleased to see a strong acceleration in free cash flow despite the current market dynamics. Luka Mucic, CFO |
SAP Q2 2020 Quarterly Statement Q2 2020 | 1 |
Walldorf, Germany — July 27, 2020
SAP SE (NYSE: SAP) today announced its financial results for the second quarter and the first half-year ended June 30, 2020.
Business Performance Second Quarter 2020
Financial Highlights1
Business activity gradually improved over the course of the second quarter following the global emergence of the COVID-19 crisis primarily in the last month of the first quarter. Software licenses revenue, while still below normal levels, recovered more than expected. In particular, the APJ region had a strong recovery in software licenses revenue.
In the second quarter, current cloud backlog2 was up 20% to €6.65 billion (21% at constant currencies) with continued high demand for digital supply chain, e-commerce, cloud platform and Qualtrics solutions. Cloud revenue was impacted by lower pay-as-you-go transactional revenue as a result of the COVID-19 crisis and grew 21% year over year to €2.04 billion (IFRS), up 19% to €2.04 billion (non-IFRS) and up 18% (non-IFRS at constant currencies). Software licenses revenue was down 18% year over year to €0.77 billion (IFRS and non-IFRS) and down 18% (non-IFRS at constant currencies), a strong sequential improvement compared to the first quarter. Cloud and software revenue grew 4% year over year to €5.71 billion (IFRS), up 3% to €5.71 billion (non-IFRS) and up 3% (non-IFRS at constant currencies). Total revenue grew 2% year over year to €6.74 billion (IFRS), up 1% to €6.74 billion (non-IFRS) and up 1% (non-IFRS at constant currencies).
The share of more predictable revenue grew by five percentage points year-over-year to 73% in the second quarter.
Cloud gross margin increased 3.4 percentage points year over year to 66.0% (IFRS) and increased by 1.6 percentage points year over year to 69.5% (non-IFRS).
IFRS operating profit in the second quarter increased strongly primarily due to a significantly lower impact from restructuring expenses compared to the previous year. Operating profit increased by 55% year over year to €1.28 billion (IFRS) and was up 8% to €1.96 billion (non-IFRS) and up 7% (non-IFRS at constant currencies). Operating margin increased 6.6 percentage points year over year to 19.0% (IFRS) and increased 1.8 percentage points year over year to 29.1% (non-IFRS) and 1.7 percentage points to 28.9% (non-IFRS at constant currencies).
Earnings per share was up 54% year over year to €0.73 (IFRS) and was up 7% to €1.17 (non-IFRS).
Operating cash flow and free cash flow grew strongly in the second quarter. This was mainly driven by positive effects from lower payments to suppliers and lower than expected income tax payments. Operating cash flow for the first six months was €3.77 billion, up 41% year-over-year. Free cash flow for the first six months was up 59% year-over-year at €3.12 billion. Free cash flow additionally benefited from lower capital expenditure compared to the previous year. At the end of the second quarter, net debt was -€7.45 billion.
COVID-19 Response
SAP remains focused on supporting its customers, employees and communities during the COVID-19 pandemic. SAP continues to operate with a virtual sales and remote implementation strategy to enable the large majority of its employees to work productively from home while continuing to serve customers effectively. In certain locations around the globe a small number of SAP employees have started to return or are planning to return to the office at a cautious pace as permitted by local regulations. SAP remains focused on the safety of the small number of its employees who are working onsite.
To ensure the Company’s financial flexibility, SAP is maintaining a slower pace of hiring than in usual circumstances and reduced discretionary spend in addition to natural savings e.g. from lower travel, facility related costs and virtualized events.
SAP remains focused on ensuring continuity for its customers and partners and SAP’s data centers are online with appropriate backup plans.
Since the COVID-19 crisis began, SAP has also been providing solutions to address many of the issues faced by its customers and the broader community. Some recent examples:
· SAP has developed, together with Deutsche Telekom, the Corona Warning App which is the official German tracing app. The app went live in less than 50 days and has been downloaded more than 16 million times.
· Qualtrics back-to-business solution is helping many US states and communities restart their economies.
· To address ongoing disruption to global supply chains, SAP has extended open access to SAP Ariba Discovery to the end of 2020 so that buyers can post immediate sourcing needs and any supplier can respond.
1 Q2 2020 results were also impacted by other effects. For details, please refer to the disclosures on page 33 of this document.
2 For an explanation please refer to page 8 of this document. Additional information is available at https://www.sap.com/investors/en/reports/reporting-framework.html.
SAP Q2 2020 Quarterly Statement Q2 2020 | 2 |
Due to the current uncertainty regarding the duration and severity of the COVID-19 pandemic, SAP cannot predict whether our response to date or actions that we may take in the future will be effective in mitigating the impact of COVID-19 on our business and results of operations.3
Segment Performance Second Quarter 2020
SAP’s four reportable segments “Applications, Technology & Support”, “Concur”, “Qualtrics” and “Services” showed the following performance:
Applications, Technology & Support (AT&S)
In the second quarter, segment revenue in AT&S was up 3% to €5.31 billion year-over-year (up 3% at constant currencies). Solutions which contributed to this growth are listed below.
SAP S/4HANA
SAP S/4HANA is an intelligent, integrated ERP system that runs on SAP’s real time in-memory platform, SAP HANA. It addresses industry-specific requirements with proven best practices for 26 verticals and enables new business models as marketplaces evolve. It revolutionizes business processes with intelligent automation, supported by artificial intelligence and robotic process automation. It helps users make better decisions faster with embedded analytics, a conversational interface, and digital assistants. SAP offers customers a choice of deployment options including cloud, on-premise and hybrid so they can choose the scenario or combination that is right for them, all on the same data model with a consistent user experience.
Over 500 SAP S/4HANA customers were added in the quarter, taking total adoption to more than 14,600 customers, up 22% year over year, of which more than 7,400 are live. In the second quarter, more than 37% of the additional SAP S/4HANA customers were net new.
In the second quarter, world class organizations such as Neptune Energy, Vedanta, BNP Paribas, Comix, and Deutsche Börse AG selected SAP S/4HANA. RAK Ceramics, beeline GmbH, and Zalando recently went live on SAP S/4HANA. A fast-growing number of companies of all sizes such as E.ON, Rizing LLC, Mageline and Trevi Finanziaria Industriale chose SAP S/4HANA Cloud. Colgate-Palmolive, De Nora Group, Grupo Ultra, and SUSE Software Solutions are now live on SAP S/4HANA Cloud. IDC MarketScape recently named SAP S/4HANA Cloud as a Leader for Cloud Finance and Accounting Apps.
Human Experience Management (HXM)
The SAP SuccessFactors Human Experience Management (HXM) Suite provides solutions for core HR and payroll, talent management, employee experience management and people analytics. Built as a highly scalable platform it meets complex cross border requirements, delivering tax regulation and HR policy updates in 99 specific countries, 42 languages and payroll in 46 countries.
HXM is designed around what employees need, how they work, and what motivates them. It empowers employees and enables HR leaders to accelerate business growth.
SAP SuccessFactors HXM solutions leverage Qualtrics solutions allowing customers to capture insights from employees and link them with operational data to see what is happening, understand why and take action. More than 640 customers have selected these solutions. FMC Corporation is one example of numerous companies using the Qualtrics and SAP SuccessFactors platforms.
Capgemini, JSC Lithuanian Railways, Bechtle AG, and Migros Group were some of many competitive wins. Etihad Aviation, Group Erste Group Bank, and Royal London Mutual Insurance Society recently went live with SAP SuccessFactors solutions.
SAP was recently ranked as a Leader in “The Forrester Wave: Cloud Human Capital Management Suites for Q2 2020”.
SAP Customer Experience
SAP Customer Experience (CX) combines leading solutions for commerce, service, marketing, sales, and customer data, enabling companies to manage and deliver personalized customer experiences across touchpoints and channels based on a complete view of the customer. As part of the Intelligent Enterprise, SAP CX suite integrates with SAP S/4HANA from demand signals to fulfillment in one end-to-end process.
SAP CX solutions also use the benefits of Qualtrics Customer Experience Management to understand the wants and needs of customers. This enables organizations to combine customer feedback and operational data to listen, understand and take action in the moment to improve the customer experience.
In the second quarter, SAP’s e-commerce solution was a standout, almost doubling new cloud business year over year.
3 For additional COVID-19 related disclosures and risk factors, please refer to SAP’s 2020 Half-Year Report.
SAP Q2 2020 Quarterly Statement Q2 2020 | 3 |
Lumileds, Commission de la construction du Québec, Delivery Hero, Jiangsu Hengshun Group Co. Ltd., Telefônica Vivo, and Hirose Electric Co. are some examples of companies who chose SAP Customer Experience solutions.
Business Technology Platform
SAP’s Business Technology Platform helps customers to turn their data into business value. It encompasses database and data management, analytics, application development and integration, and intelligent technologies. The Business Technology Platform represents a combination of SAP’s leading technologies such as SAP HANA, SAP Cloud Platform, SAP Data Warehouse Cloud, SAP Analytics Cloud, SAP Data Intelligence and SAP Intelligent Robotic Process Automation bundled into one single reference architecture. It supports cloud, on-premise and hybrid customer landscapes. Additionally, the Business Technology Platform offers seamless interoperability with hyperscalers’ technologies to deliver a high level of scalability and flexibility. The Business Technology Platform provides customers with convenient access to SAP data, SAP technology and SAP pre-configured business services to help them drive business value across their entire solution landscape.
The Swiss Canton of Zurich, the Australian Department of Defence, and L’Oréal selected SAP’s business technology platform and analytics cloud solutions in the second quarter.
SAP was recently named as a leader in Gartner’s Magic Quadrant for Multiexperience Development Platforms.
Ariba & Fieldglass
SAP Ariba provides collaborative commerce capabilities from sourcing and orders through invoice and payment along with expertise to help customers optimize their spend. It drives simple, intelligent exchanges between millions of buyers and suppliers across both direct and indirect expense categories. The SAP Ariba platform is embedding Qualtrics to enhance experience and to create a continuous feedback loop for buyers and suppliers on the network.
SAP Ariba and SAP Fieldglass, together with SAP Concur, represent SAP’s intelligent spend platform, the largest commerce platform in the world with over $3.8 trillion in global commerce annually transacted in more than 180 countries.
Carrefour and NEC Corporation chose SAP Ariba solutions in the second quarter. Google is now live on SAP Ariba.
SAP Fieldglass is the leader in external workforce management and services procurement. It helps organizations find, engage, and manage all types of flexible resources including contingent workers, consultants and freelancers. SAP Fieldglass added more than 760,000 new external workers during the second quarter. Apache Corporation chose SAP Fieldglass solutions in the second quarter.
Concur
In the second quarter, Concur segment revenue was down 4% to €379 million year-over-year (down 5% at constant currencies) due to lower pay-as-you-go transactional revenue as a result of significantly reduced business travel due to the COVID-19 crisis.
SAP Concur provides integrated travel, expense, and invoice management solutions that simplify and automate these time-consuming everyday processes. The SAP Concur mobile app guides employees through every trip, charges are effortlessly populated into expense reports, and invoice approvals are automated. By integrating near real-time data and using AI to audit 100% of transactions, businesses can see and efficiently control their travel spend.
Royal Voluntary Service was among the organizations who chose SAP Concur solutions in the second quarter.
Qualtrics
In the second quarter, Qualtrics segment revenue was up 34% to €168 million year-over-year (up 32% at constant currencies).
With Qualtrics, SAP combines market leadership in Experience Management (XM) with end-to-end operational power in 26 industries to help organizations manage and improve the four core experiences of business: customer, employee, product, and brand.
The Qualtrics XM Platform™ is trusted by over 11,800 customers to listen, understand, and take action on experience data (X-data™) by combining X-data with the operational data (O-data™) systems of the enterprise.
In the second quarter, Etsy, Inc., Blue Cross and Blue Shield of Alabama, Kendra Scott Design, Tableau and many others selected Qualtrics to move beyond systems of record to new systems of action and achieve breakthrough results.
Services
In the second quarter, Services segment revenue was down 6% to €796 million year-over-year (down 6% at constant currencies).
SAP deploys a global team of service professionals with in-depth expertise in SAP solutions and innovation to help companies create valuable outcomes and experience to succeed in becoming Intelligent Enterprises.
The Services organization improves time to value for our customers’ digital transformation through:
· Outcome-focused services and proactive support offerings designed to guide customers transformation from end to end
SAP Q2 2020 Quarterly Statement Q2 2020 | 4 |
· Intelligent tools that automate delivery and support
· Embedded services with prepackaged reference solutions based on leading industry practices and processes
· Value-added partnerships with leading system integrators that facilitate success in any environment
Segment Results at a Glance
Segment Performance Second Quarter 2020 | |
| Applications, Technology & Support | Services | Concur | Qualtrics |
€ million, unless otherwise stated (Non-IFRS) | Actual
Currency | D in % | D in %
const.
curr. | Actual
Currency | D in % | D in %
const.
curr. | Actual
Currency | D in % | D in %
const.
curr. | Actual
Currency | ∆ in % | ∆ in % const.
curr. |
Cloud revenue | 1,589 | 24 | 24 | 0 | NA | NA | 323 | –4 | –6 | 130 | 38 | 36 |
Segment revenue | 5,314 | 3 | 3 | 796 | –6 | –6 | 379 | –4 | –5 | 168 | 34 | 32 |
Segment profit (loss) | 2,329 | 5 | 5 | 121 | >100 | 96 | 137 | –4 | –6 | 7 | 2 | 1 |
Cloud gross margin (in %) | 65.2 | 2.8pp | 2.6pp | NM1) | NM1) | NM1) | 88.4 | 1.9pp | 1.8pp | 91.0 | –0.9pp | –1.0pp |
Segment margin (in %) | 43.8 | 0.9pp | 0.7pp | 15.2 | 8.3pp | 7.6pp | 36.0 | 0.0pp | –0.4pp | 4.3 | –1.4pp | –1.3pp |
1) NM = not meaningful
Regional Revenue Performance
SAP had a solid performance in the EMEA region with cloud and software revenue increasing 3% (both IFRS and non-IFRS at constant currencies). Cloud revenue increased 29% (both IFRS and non-IFRS at constant currencies) with Germany and Switzerland being highlights. Spain and Saudi Arabia had strong quarters in software licenses revenue.
The Company had a solid performance in the Americas region. Cloud and software revenue increased 5% (IFRS) and 3% (non-IFRS at constant currencies). Cloud revenue increased 17% (IFRS) and 13% (non-IFRS at constant currencies) with Canada and Mexico being highlights. In addition, the United States had a solid quarter in software licenses revenue.
In the APJ region, SAP had a stellar performance backed by a strong recovery in software licenses revenue particularly in Japan, South Korea and Indonesia. Cloud and software revenue was up 4% (both IFRS and non-IFRS at constant currencies). Cloud revenue increased 19% (IFRS) and 18% (non-IFRS at constant currencies) with Japan, Singapore and South Korea being highlights.
SAP Q2 2020 Quarterly Statement Q2 2020 | 5 |
Financial Results at a Glance
Second Quarter 2020
| IFRS | Non-IFRS1) |
€ million, unless otherwise stated | Q2 2020 | Q2 2019 | ∆ in % | Q2 2020 | Q2 2019 | ∆ in % | ∆ in % const.
curr. |
Current cloud backlog2) | NA | NA | NA | 6,655 | 5,526 | 20 | 21 |
Cloud revenue | 2,044 | 1,692 | 21 | 2,044 | 1,717 | 19 | 18 |
Software licenses and support revenue | 3,665 | 3,802 | –4 | 3,665 | 3,802 | –4 | –3 |
Cloud and software revenue | 5,709 | 5,495 | 4 | 5,709 | 5,520 | 3 | 3 |
Total revenue | 6,743 | 6,631 | 2 | 6,744 | 6,656 | 1 | 1 |
Share of more predictable revenue (in %) | 73 | 69 | 5pp | 73 | 69 | 5pp | |
Operating profit (loss) | 1,284 | 827 | 55 | 1,964 | 1,816 | 8 | 7 |
Profit (loss) after tax | 885 | 582 | 52 | 1,395 | 1,317 | 6 | |
Basic earnings per share (in €) | 0.73 | 0.48 | 54 | 1.17 | 1.09 | 7 | |
Number of employees (FTE, June 30) | 101,379 | 98,332 | 3 | NA | NA | NA | NA |
1) For a breakdown of the individual adjustments see table “Non-IFRS Adjustments by Functional Areas” in this Quarterly Statement.
2) As this is an order entry metric, there is no IFRS equivalent.
Due to rounding, numbers may not add up precisely.
Six months ended June 2020
| IFRS | Non-IFRS1) |
€ million, unless otherwise stated | Q1–Q2 2020 | Q1–Q2 2019 | ∆ in % | Q1–Q2 2020 | Q1–Q2 2019 | ∆ in % | ∆ in %
const.
curr. |
Current Cloud Backlog2) | NA | NA | NA | 6,655 | 5,526 | 20 | 21 |
Cloud revenue | 4,055 | 3,247 | 25 | 4,057 | 3,299 | 23 | 22 |
Software licenses and support revenue | 7,051 | 7,291 | –3 | 7,051 | 7,291 | –3 | –4 |
Cloud and software revenue | 11,106 | 10,538 | 5 | 11,107 | 10,589 | 5 | 4 |
Total revenue | 13,264 | 12,722 | 4 | 13,266 | 12,773 | 4 | 3 |
Share of more predictable revenue (in %) | 74 | 70 | 4pp | 74 | 70 | 4pp | |
Operating profit (loss) | 2,494 | 691 | >100 | 3,446 | 3,283 | 5 | 4 |
Profit (loss) after tax | 1,697 | 475 | >100 | 2,409 | 2,397 | 1 | |
Basic earnings per share (in €) | 1.42 | 0.38 | >100 | 2.02 | 1.99 | 1 | |
Number of employees (FTE, June 30) | 101,379 | 98,332 | 3 | NA | NA | NA | NA |
1) For a breakdown of the individual adjustments see table “Non-IFRS Adjustments by Functional Areas” in this Quarterly Statement.
2) As this is an order entry metric, there is no IFRS equivalent.
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 6 |
Business Outlook 2020
The Company confirms its 2020 revenue and profit outlook which was previously published in its Q1 2020 Quarterly Statement on April 21st. The outlook continues to be based on the assumption of a gradually improving demand environment in the third and fourth quarter, expecting further reopening of economies and easing of population lockdowns.
Non-IFRS cloud revenue is still expected to be in a range of €8.3 billion to €8.7 billion at constant currencies (2019: €7.01 billion), up 18% to 24% at constant currencies.
Non-IFRS cloud and software revenue is still expected to be in a range of €23.4 to €24.0 billion at constant currencies (2019: €23.09 billion), up 1% to 4% at constant currencies.
Non-IFRS total revenue is still expected to be in a range of €27.8 to €28.5 billion at constant currencies (2019: €27.63 billion), up 1% to 3% at constant currencies.
Non-IFRS operating profit is still expected to be in a range of €8.1 to €8.7 billion at constant currencies (2019: €8.21 billion), down 1% to up 6% at constant currencies.
The share of more predictable revenue (defined as the total of cloud revenue and software support revenue) is still expected to reach approximately 72%.
The Company has updated its cash flow expectations for 2020 and now expects an operating cash flow of above €5.0 billion (previously approximately €5.0 billion) and a free cash flow of approximately €4.0 billion (previously approximately €3.5 billion).
While SAP’s full-year 2020 business outlook is at constant currencies, actual currency reported figures are expected to be impacted by currency exchange rate fluctuations as the Company progresses through the year. See the table below for the Q3 and FY 2020 expected currency impacts.
Expected Currency Impact Based on June 2020 Level for the Rest of the Year |
In percentage points | Q3 | FY |
Cloud revenue | -3pp to -1pp | -1pp to +1pp |
Cloud and software revenue | -3pp to -1pp | -2pp to 0pp |
Operating profit | -2pp to 0pp | -1pp to +1pp |
Ambition 2023 and Capital Markets Day
SAP confirms its 2023 ambition.4 The Company also expects to hold a virtual Capital Markets Day in the fourth quarter 2020 to provide an update on its mid-term strategy.
4 For details on the 2023 ambition, please refer to SAP’s 2020 Half-Year Report.
SAP Q2 2020 Quarterly Statement Q2 2020 | 7 |
Additional Information
This Quarterly Statement and all information therein is unaudited.
The 2019 comparative numbers for first half only include Qualtrics revenues and profits from acquisition date of January 23rd.
SAP SE yesterday announced its intent to take Qualtrics public through an initial public offering (IPO) in the United States. SAP currently owns 100% of Qualtrics shares. SAP will retain majority ownership of Qualtrics.
Definition of key growth metrics
Current cloud backlog (CCB) is the contractually committed cloud revenue we expect to recognize over the upcoming 12 months as of a specific key date. Thus, it is a subcomponent of our overall remaining performance obligations following IFRS 15.120. For CCB, we take into consideration committed deals only. CCB can be regarded as a lower boundary for cloud revenue to be recognized over the next 12 months, as it excludes utilization-based models without pre-commitments and committed deals, both new and renewal, closed after the key date. For our committed cloud business, we believe the expansion of CCB over a period is a valuable indicator of go-to market success, as it reflects both new contracts closed as well as existing contracts renewed.
Share of more predictable revenue is the total of non-IFRS cloud revenue and non-IFRS software support revenue as a percentage of total revenue.
Global commerce is the total commerce volume transacted on the SAP Ariba, SAP Concur and SAP Fieldglass Networks in the trailing 12 months. SAP Ariba commerce includes procurement and sourcing spend.
For explanations on other key growth metrics please refer the performance management section of SAP’s Integrated Report 2019, which can be found at www.sapintegratedreport.com.
Webcast
SAP senior management will host a financial analyst conference call today at 2:00 PM (CET) / 1:00 PM (GMT) / 8:00 AM (Eastern) / 5:00 AM (Pacific). The call will be webcast live on the Company’s website at www.sap.com/investor and will be available for replay. Supplementary financial information pertaining to the second quarter results can be found at www.sap.com/investor.
About SAP
SAP’s strategy is to help every business run as an intelligent enterprise. As the market leader in enterprise application software, we help companies of all sizes and in all industries run at their best: 77% of the world’s transaction revenue touches an SAP® system. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. SAP helps give people and organizations deep business insight and fosters collaboration that helps them stay ahead of their competition. We simplify technology for companies so they can consume our software the way they want — without disruption. Our end-to-end suite of applications and services enables business and public customers across 25 industries globally to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, SAP helps the world run better and improve people’s lives. For more information, visit www.sap.com.
For more information, financial community only:
Stefan Gruber | +49 (6227) 7-44872 | investor@sap.com, CET |
Follow SAP Investor Relations on Twitter at @sapinvestor. |
For more information, press only:
Susan Miller | +1 (610) 661-9225 | susan.miller@sap.com, ET |
Marcus Winkler | +49 (6227) 7-67497 | marcus.winkler@sap.com, CET |
For customers interested in learning more about SAP products:
Global Customer Center: | +49 180 534-34-24 | |
United States Only: | +1 (800) 872-1SAP (+1-800-872-1727) |
SAP Q2 2020 Quarterly Statement Q2 2020 | 8 |
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SAP Q2 2020 Quarterly Statement Q2 2020 | 9 |
Contents
Financial and Non-Financial Key Facts (IFRS and Non-IFRS) | 11 |
| |
Primary Financial Statements of SAP Group (IFRS) | 13 |
(A) | Consolidated Income Statements | 13 |
| (A.1) | Consolidated Income Statements – Quarter | 13 |
| (A.2) | Consolidated Income Statements – Year-to-Date | 14 |
(B) | Consolidated Statements of Financial Position | 15 |
(C) | Consolidated Statements of Cash Flows | 16 |
| | |
Non-IFRS Numbers | 17 |
(D) | Basis of Non-IFRS Presentation | 17 |
(E) | Reconciliation from Non-IFRS Numbers to IFRS Numbers | 18 |
| (E.1) | Reconciliation from Non-IFRS Numbers to IFRS Numbers – Quarter | 18 |
| (E.2) | Reconciliation from Non-IFRS Numbers to IFRS Numbers – Year-to-Date | 19 |
(F) | Non-IFRS Adjustments – Actuals and Estimates | 20 |
(G) | Non-IFRS Adjustments by Functional Areas | 20 |
| | |
Disaggregations | 22 |
(H) | Segment Reporting | 22 |
| (H.1) | Segment Policies and Segment Changes | 22 |
| (H.2) | Segment Reporting – Quarter | 22 |
| (H.3) | Segment Reporting – Year-to-Date | 26 |
(I) | Revenue by Region (IFRS and Non-IFRS) | 30 |
| (I.1) | Revenue by Region (IFRS and Non-IFRS) – Quarter | 30 |
| (I.2) | Revenue by Region (IFRS and Non-IFRS) – Year-to-Date | 31 |
(J) | Employees by Region and Functional Areas | 32 |
| | |
Other Disclosures | 33 |
(K) | Financial Income, Net | 33 |
(L) | Divestments | 33 |
SAP Q2 2020 Quarterly Statement Q2 2020 | 10 |
Financial and Non-Financial Key Facts
(IFRS and Non-IFRS)
€ millions, unless otherwise stated | | Q1
2019 | | Q2
2019 | | Q3
2019 | | Q4
2019 | | TY
2019 | | Q1
2020 | | Q2
2020 |
Revenues | | | | | | | | | | | | | | |
Cloud (IFRS) | | 1,555 | | 1,692 | | 1,789 | | 1,896 | | 6,933 | | 2,011 | | 2,044 |
Cloud (non-IFRS) | | 1,581 | | 1,717 | | 1,807 | | 1,907 | | 7,013 | | 2,012 | | 2,044 |
% change – yoy | | 48 | | 40 | | 37 | | 35 | | 40 | | 27 | | 19 |
% change constant currency – yoy | | 41 | | 35 | | 33 | | 32 | | 35 | | 25 | | 18 |
Software licenses (IFRS) | | 650 | | 948 | | 932 | | 2,002 | | 4,533 | | 451 | | 773 |
Software licenses (non-IFRS) | | 650 | | 948 | | 932 | | 2,002 | | 4,533 | | 451 | | 773 |
% change – yoy | | 4 | | –5 | | –1 | | –4 | | –2 | | –31 | | –18 |
% change constant currency – yoy | | 1 | | –6 | | –4 | | –6 | | –5 | | –31 | | –18 |
Software support (IFRS) | | 2,838 | | 2,854 | | 2,907 | | 2,948 | | 11,547 | | 2,934 | | 2,892 |
Software support (non-IFRS) | | 2,838 | | 2,854 | | 2,907 | | 2,948 | | 11,548 | | 2,934 | | 2,892 |
% change – yoy | | 7 | | 4 | | 5 | | 4 | | 5 | | 3 | | 1 |
% change constant currency – yoy | | 4 | | 2 | | 3 | | 2 | | 3 | | 2 | | 2 |
Software licenses and support (IFRS) | | 3,489 | | 3,802 | | 3,839 | | 4,950 | | 16,080 | | 3,386 | | 3,665 |
Software licenses and support (non-IFRS) | | 3,489 | | 3,802 | | 3,840 | | 4,950 | | 16,080 | | 3,386 | | 3,665 |
% change – yoy | | 6 | | 2 | | 4 | | 1 | | 3 | | –3 | | –4 |
% change constant currency – yoy | | 3 | | 0 | | 1 | | –1 | | 1 | | –4 | | –3 |
Cloud and software (IFRS) | | 5,044 | | 5,495 | | 5,629 | | 6,846 | | 23,012 | | 5,397 | | 5,709 |
Cloud and software (non-IFRS) | | 5,070 | | 5,520 | | 5,647 | | 6,857 | | 23,093 | | 5,398 | | 5,709 |
% change – yoy | | 16 | | 11 | | 13 | | 8 | | 12 | | 6 | | 3 |
% change constant currency – yoy | | 12 | | 8 | | 10 | | 6 | | 9 | | 5 | | 3 |
Total revenue (IFRS) | | 6,091 | | 6,631 | | 6,791 | | 8,041 | | 27,553 | | 6,521 | | 6,743 |
Total revenue (non-IFRS) | | 6,118 | | 6,656 | | 6,809 | | 8,052 | | 27,634 | | 6,522 | | 6,744 |
% change – yoy | | 16 | | 11 | | 13 | | 8 | | 12 | | 7 | | 1 |
% change constant currency – yoy | | 12 | | 8 | | 10 | | 6 | | 9 | | 5 | | 1 |
Share of more predictable revenue (IFRS, in %) | | 72 | | 69 | | 69 | | 60 | | 67 | | 76 | | 73 |
Share of more predictable revenue (non-IFRS, in %) | | 72 | | 69 | | 69 | | 60 | | 67 | | 76 | | 73 |
| | | | | | | | | | | | | | |
Profits | | | | | | | | | | | | | | |
Operating profit (loss) (IFRS) | | –136 | | 827 | | 1,679 | | 2,102 | | 4,473 | | 1,210 | | 1,284 |
Operating profit (loss) (non-IFRS) | | 1,467 | | 1,816 | | 2,086 | | 2,839 | | 8,208 | | 1,482 | | 1,964 |
% change | | 19 | | 11 | | 20 | | 12 | | 15 | | 1 | | 8 |
% change constant currency | | 13 | | 8 | | 15 | | 9 | | 11 | | 0 | | 7 |
Profit (loss) after tax (IFRS) | | –108 | | 582 | | 1,259 | | 1,637 | | 3,370 | | 811 | | 885 |
Profit (loss) after tax (non-IFRS) | | 1,080 | | 1,317 | | 1,564 | | 2,190 | | 6,152 | | 1,015 | | 1,395 |
% change | | 25 | | 12 | | 15 | | 22 | | 18 | | –6 | | 6 |
| | | | | | | | | | | | | | |
Margins | | | | | | | | | | | | | | |
Cloud gross margin (IFRS, in %) | | 61.2 | | 62.6 | | 64.5 | | 65.1 | | 63.5 | | 66.4 | | 66.0 |
Cloud gross margin (non-IFRS, in %) | | 66.2 | | 67.9 | | 69.0 | | 69.5 | | 68.2 | | 69.3 | | 69.5 |
Software license and support gross margin (IFRS, in %) | | 84.6 | | 86.0 | | 87.0 | | 88.1 | | 86.6 | | 85.2 | | 86.4 |
Software license and support gross margin (non-IFRS, in %) | | 85.7 | | 87.1 | | 87.6 | | 88.8 | | 87.4 | | 85.7 | | 87.4 |
Cloud and software gross margin (IFRS, in %) | | 77.4 | | 78.8 | | 79.9 | | 81.7 | | 79.6 | | 78.2 | | 79.1 |
Cloud and software gross margin (non-IFRS, in %) | | 79.6 | | 81.1 | | 81.7 | | 83.4 | | 81.6 | | 79.6 | | 81.0 |
Gross margin (IFRS, in %) | | 66.5 | | 68.2 | | 70.3 | | 72.8 | | 69.7 | | 68.3 | | 69.9 |
Gross margin (non-IFRS, in %) | | 69.5 | | 71.4 | | 72.3 | | 75.2 | | 72.3 | | 69.8 | | 72.6 |
Operating margin (IFRS, in %) | | –2.2 | | 12.5 | | 24.7 | | 26.1 | | 16.2 | | 18.6 | | 19.0 |
Operating margin (non-IFRS, in %) | | 24.0 | | 27.3 | | 30.6 | | 35.3 | | 29.7 | | 22.7 | | 29.1 |
AT&S segment – Cloud gross margin (in %) | | 61.1 | | 62.4 | | 63.1 | | 63.1 | | 62.5 | | 64.4 | | 65.2 |
AT&S segment – Segment gross margin (in %) | | 78.4 | | 80.0 | | 80.4 | | 82.9 | | 80.6 | | 78.3 | | 80.1 |
AT&S segment – Segment margin (in %) | | 37.0 | | 43.0 | | 44.8 | | 48.4 | | 43.7 | | 36.7 | | 43.8 |
Services segment – Services gross margin (in %) | | 21.3 | | 25.0 | | 31.2 | | 29.1 | | 26.8 | | 26.9 | | 33.3 |
Services segment – Segment gross margin (in %) | | 17.1 | | 21.8 | | 28.3 | | 25.8 | | 23.4 | | 23.1 | | 30.4 |
SAP Q2 2020 Quarterly Statement Q2 2020 | 11 |
€ millions, unless otherwise stated | | Q1
2019 | | Q2
2019 | | Q3
2019 | | Q4
2019 | | TY
2019 | | Q1
2020 | | Q2
2020 |
Services segment – Segment margin (in %) | | 3.3 | | 6.9 | | 15.9 | | 12.3 | | 9.8 | | 10.1 | | 15.2 |
Concur segment – Cloud gross margin (in %) | | 84.9 | | 86.5 | | 86.9 | | 88.7 | | 86.8 | | 88.1 | | 88.4 |
Concur segment – Segment gross margin (in %) | | 76.8 | | 77.5 | | 77.9 | | 80.6 | | 78.3 | | 79.8 | | 79.2 |
Concur segment – Segment margin (in %) | | 36.4 | | 36.0 | | 39.8 | | 40.5 | | 38.2 | | 37.6 | | 36.0 |
Qualtrics segment – Cloud gross margin (in %) | | 91.4 | | 92.0 | | 91.4 | | 90.1 | | 91.1 | | 90.8 | | 91.0 |
Qualtrics segment – Segment gross margin (in %) | | 81.4 | | 79.9 | | 78.6 | | 74.9 | | 78.3 | | 75.4 | | 78.6 |
Qualtrics segment – Segment margin (in %) | | 7.9 | | 5.6 | | 3.2 | | –6.5 | | 1.6 | | –7.5 | | 4.3 |
| | | | | | | | | | | | | | |
Key Profit Ratios | | | | | | | | | | | | | | |
Effective tax rate (IFRS, in %) | | 23.2 | | 28.6 | | 26.1 | | 26.2 | | 26.7 | | 27.7 | | 33.1 |
Effective tax rate (non-IFRS, in %) | | 26.1 | | 27.0 | | 25.8 | | 25.9 | | 26.2 | | 27.2 | | 30.3 |
| | | | | | | | | | | | | | |
Earnings per share, basic (IFRS, in €) | | –0.10 | | 0.48 | | 1.04 | | 1.36 | | 2.78 | | 0.68 | | 0.73 |
Earnings per share, basic (non-IFRS, in €) | | 0.90 | | 1.09 | | 1.30 | | 1.82 | | 5.11 | | 0.85 | | 1.17 |
| | | | | | | | | | | | | | |
Order Entry and current cloud backlog | | | | | | | | | | | | | | |
Current cloud backlog | | 5,329 | | 5,526 | | NA | | NA | | NA | | 6,647 | | 6,655 |
% change – yoy | | NA | | NA | | NA | | NA | | NA | | 25 | | 20 |
% change constant currency – yoy | | NA | | NA | | NA | | NA | | NA | | 24 | | 21 |
Orders – number of cloud deals (in transactions) | | 2,961 | | 3,624 | | 3,717 | | 5,377 | | 15,679 | | 3,113 | | 3,775 |
Share of cloud orders greater than €5 million based on total cloud order entry volume (in %) | | 26 | | 26 | | 29 | | 35 | | 31 | | 28 | | 28 |
Share of cloud orders smaller than €1 million based on total cloud order entry volume (in %) | | 39 | | 34 | | 33 | | 28 | | 32 | | 37 | | 35 |
Orders – number of on-premise software deals (in transactions) | | 12,229 | | 12,522 | | 12,270 | | 15,563 | | 52,584 | | 10,517 | | 9,175 |
Share of orders greater than €5 million based on total software order entry volume (in %) | | 28 | | 28 | | 31 | | 35 | | 32 | | 24 | | 34 |
Share of orders smaller than €1 million based on total software order entry volume (in %) | | 42 | | 36 | | 39 | | 31 | | 35 | | 42 | | 38 |
| | | | | | | | | | | | | | |
Liquidity and Cash Flow | | | | | | | | | | | | | | |
Net cash flows from operating activities | | 2,802 | | –122 | | 638 | | 178 | | 3,496 | | 2,984 | | 788 |
Capital expenditure | | –359 | | –180 | | –164 | | –114 | | –817 | | –333 | | –164 |
Payments of lease liabilities | | –78 | | –106 | | –104 | | –115 | | –403 | | –72 | | –84 |
Free cash flow | | 2,365 | | –409 | | 370 | | –50 | | 2,276 | | 2,580 | | 540 |
% of total revenue (IFRS) | | 39 | | –6 | | 5 | | –1 | | 8 | | 40 | | 8 |
% of profit after tax (IFRS) | | –2,198 | | –70 | | 29 | | –3 | | 68 | | 318 | | 61 |
Group liquidity | | 7,673 | | 5,280 | | 5,597 | | 5,382 | | 5,382 | | 7,872 | | 7,401 |
Financial debt (–) | | –13,866 | | –13,833 | | –13,874 | | –13,668 | | –13,668 | | –13,700 | | –14,855 |
Net debt (–) | | –6,193 | | –8,553 | | –8,277 | | –8,286 | | –8,286 | | –5,827 | | –7,454 |
Days sales outstanding (DSO, in days)1) | | 69 | | 70 | | 71 | | 71 | | 71 | | 73 | | 76 |
| | | | | | | | | | | | | | |
Financial Position | | | | | | | | | | | | | | |
Cash and cash equivalents | | 7,332 | | 5,168 | | 5,525 | | 5,314 | | 5,314 | | 7,816 | | 6,205 |
Goodwill | | 29,160 | | 28,853 | | 29,904 | | 29,159 | | 29,159 | | 29,731 | | 29,214 |
Total assets | | 60,860 | | 57,874 | | 59,963 | | 60,212 | | 60,212 | | 62,947 | | 60,709 |
Contract liabilities (current) | | 6,068 | | 5,558 | | 4,400 | | 4,266 | | 4,266 | | 6,726 | | 5,791 |
Equity ratio (total equity in % of total assets) | | 48 | | 48 | | 50 | | 51 | | 51 | | 49 | | 48 |
| | | | | | | | | | | | | | |
Non-Financials | | | | | | | | | | | | | | |
Number of employees (quarter end)2) | | 98,659 | | 98,332 | | 99,710 | | 100,330 | | 100,330 | | 101,150 | | 101,379 |
Employee retention (in %, rolling 12 months) | | 93.8 | | 93.5 | | 93.3 | | 93.3 | | 93.3 | | 93.3 | | 93.9 |
Women in management (in %, quarter end) | | 26.0 | | 26.2 | | 26.3 | | 26.4 | | 26.4 | | 26.8 | | 27.3 |
Greenhouse gas emissions (in kilotons) | | 110 | | 75 | | 65 | | 50 | | 300 | | 65 | | 25 |
1) Days sales outstanding measures the average number of days from the raised invoice to cash receipt from the customer. We calculate DSO by dividing the average invoiced trade receivables balance of the last 12 months by the average monthly cash receipt of the last 12 months.
2) In full-time equivalents.
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 12 |
Primary Financial Statements of SAP Group (IFRS)
(A) Consolidated Income Statements
(A.1) Consolidated Income Statements – Quarter
€ millions, unless otherwise stated | | Q2 2020 | Q2 2019 | ∆ in % |
Cloud | | 2,044 | 1,692 | 21 |
Software licenses | | 773 | 948 | –18 |
Software support | | 2,892 | 2,854 | 1 |
Software licenses and support | | 3,665 | 3,802 | –4 |
Cloud and software | | 5,709 | 5,495 | 4 |
Services | | 1,034 | 1,136 | –9 |
Total revenue | | 6,743 | 6,631 | 2 |
| | | | |
Cost of cloud | | –695 | –633 | 10 |
Cost of software licenses and support | | –497 | –531 | –6 |
Cost of cloud and software | | –1,192 | –1,164 | 2 |
Cost of services | | –835 | –946 | –12 |
Total cost of revenue | | –2,028 | –2,111 | –4 |
Gross profit | | 4,716 | 4,520 | 4 |
Research and development | | –1,159 | –1,053 | 10 |
Sales and marketing | | –1,833 | –1,995 | –8 |
General and administration | | –414 | –457 | –9 |
Restructuring | | 3 | –199 | <-100 |
Other operating income/expense, net | | –29 | 10 | <-100 |
Total operating expenses | | –5,459 | –5,803 | –6 |
Operating profit (loss) | | 1,284 | 827 | 55 |
| | | | |
Other non-operating income/expense, net | | –54 | –41 | 32 |
Finance income | | 243 | 158 | 54 |
Finance costs | | –151 | –129 | 17 |
Financial income, net | | 92 | 29 | >100 |
Profit (loss) before tax | | 1,322 | 815 | 62 |
| | | | |
Income tax expense | | –437 | –233 | 87 |
Profit (loss) after tax | | 885 | 582 | 52 |
Attributable to owners of parent | | 866 | 569 | 52 |
Attributable to non-controlling interests | | 19 | 13 | 47 |
| | | | |
Earnings per share, basic (in €)1) | | 0.73 | 0.48 | 54 |
Earnings per share, diluted (in €)1) | | 0.73 | 0.48 | 54 |
1) For the three months ended June 30, 2020 and 2019, the weighted average number of shares was 1,180 million (diluted 1,180 million) and 1,194 million (diluted: 1,194 million), respectively (treasury stock excluded).
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 13 |
(A.2) Consolidated Income Statements – Year-to-Date
€ millions, unless otherwise stated | | Q1–Q2 2020 | Q1–Q2 2019 | ∆ in % |
Cloud | | 4,055 | 3,247 | 25 |
Software licenses | | 1,224 | 1,599 | –23 |
Software support | | 5,826 | 5,692 | 2 |
Software licenses and support | | 7,051 | 7,291 | –3 |
Cloud and software | | 11,106 | 10,538 | 5 |
Services | | 2,159 | 2,184 | –1 |
Total revenue | | 13,264 | 12,722 | 4 |
| | | | |
Cost of cloud | | –1,370 | –1,237 | 11 |
Cost of software licenses and support | | –998 | –1,069 | –7 |
Cost of cloud and software | | –2,368 | –2,306 | 3 |
Cost of services | | –1,725 | –1,845 | –7 |
Total cost of revenue | | –4,094 | –4,151 | –1 |
Gross profit | | 9,171 | 8,571 | 7 |
Research and development | | –2,210 | –2,114 | 5 |
Sales and marketing | | –3,684 | –3,833 | –4 |
General and administration | | –729 | –895 | –19 |
Restructuring | | –13 | –1,085 | –99 |
Other operating income/expense, net | | –41 | 48 | <-100 |
Total operating expenses | | –10,770 | –12,031 | –10 |
Operating profit (loss) | | 2,494 | 691 | >100 |
| | | | |
Other non-operating income/expense, net | | –103 | –44 | >100 |
Finance income | | 406 | 286 | 42 |
Finance costs | | –354 | –258 | 37 |
Financial income, net | | 53 | 29 | 84 |
Profit (loss) before tax | | 2,444 | 675 | >100 |
| | | | |
Income tax expense | | –747 | –201 | >100 |
Profit (loss) after tax | | 1,697 | 475 | >100 |
Attributable to owners of parent | | 1,681 | 455 | >100 |
Attributable to non-controlling interests | | 16 | 20 | –19 |
| | | | |
Earnings per share, basic (in €)1) | | 1.42 | 0.38 | >100 |
Earnings per share, diluted (in €)1) | | 1.42 | 0.38 | >100 |
1) For the six months ended June 30, 2020 and 2019, the weighted average number of shares was 1,185 million (diluted: 1,185 million) and 1,194 million (diluted: 1,194 million), respectively (treasury stock excluded).
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 14 |
(B) Consolidated Statements of Financial Position
as at 6/30/2020 and 12/31/2019 |
€ millions | | 2020 | 2019 |
Cash and cash equivalents | | 6,205 | 5,314 |
Other financial assets | | 1,419 | 297 |
Trade and other receivables | | 6,584 | 7,908 |
Other non-financial assets | | 1,359 | 1,188 |
Tax assets | | 476 | 506 |
Total current assets | | 16,043 | 15,213 |
Goodwill | | 29,214 | 29,159 |
Intangible assets | | 4,158 | 4,491 |
Property, plant, and equipment | | 5,272 | 5,496 |
Other financial assets | | 2,595 | 2,336 |
Trade and other receivables | | 91 | 129 |
Other non-financial assets | | 1,777 | 1,701 |
Tax assets | | 313 | 435 |
Deferred tax assets | | 1,246 | 1,251 |
Total non-current assets | | 44,666 | 44,999 |
Total assets | | 60,709 | 60,212 |
|
€ millions | | 2020 | 2019 |
Trade and other payables | | 1,311 | 1,581 |
Tax liabilities | | 391 | 255 |
Financial liabilities | | 4,066 | 3,273 |
Other non-financial liabilities | | 3,636 | 4,818 |
Provisions | | 105 | 268 |
Contract liabilities | | 5,791 | 4,266 |
Total current liabilities | | 15,300 | 14,462 |
Trade and other payables | | 7 | 8 |
Tax liabilities | | 566 | 538 |
Financial liabilities | | 14,499 | 12,923 |
Other non-financial liabilities | | 603 | 814 |
Provisions | | 515 | 478 |
Deferred tax liabilities | | 79 | 79 |
Contract liabilities | | 69 | 89 |
Total non-current liabilities | | 16,338 | 14,929 |
Total liabilities | | 31,637 | 29,390 |
Issued capital | | 1,229 | 1,229 |
Share premium | | 548 | 545 |
Retained earnings | | 28,529 | 28,783 |
Other components of equity | | 1,749 | 1,770 |
Treasury shares | | –3,072 | –1,580 |
Equity attributable to owners of parent | | 28,982 | 30,746 |
| | | |
Non-controlling interests | | 89 | 76 |
Total equity | | 29,072 | 30,822 |
Total equity and liabilities | | 60,709 | 60,212 |
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 15 |
(C) Consolidated Statements of Cash Flows
€ millions | Q1–Q2 2020 | Q1–Q2 2019 |
Profit (loss) after tax | 1,697 | 475 |
Adjustments to reconcile profit (loss) after tax to net cash flows from operating activities: | | |
Depreciation and amortization | 925 | 897 |
Share-based payment expense | 612 | 1,114 |
Income tax expense | 747 | 201 |
Financial income, net | –53 | –29 |
Decrease/increase in allowances on trade receivables | 47 | –9 |
Other adjustments for non-cash items | –3 | –55 |
Decrease/increase in trade and other receivables | 1,132 | 354 |
Decrease/increase in other assets | –404 | –390 |
Increase/decrease in trade payables, provisions, and other liabilities | –977 | –2 |
Increase/decrease in contract liabilities | 1,578 | 2,363 |
Share-based payments | –949 | –832 |
Interest paid | –176 | –176 |
Interest received | 87 | 45 |
Income taxes paid, net of refunds | –491 | –1,277 |
Net cash flows from operating activities | 3,772 | 2,679 |
Business combinations, net of cash and cash equivalents acquired | –47 | –6,147 |
Proceeds from sales of subsidiaries or other businesses | 0 | 61 |
Purchase of intangible assets or property, plant, and equipment | –497 | –539 |
Proceeds from sales of intangible assets or property, plant, and equipment | 39 | 35 |
Purchase of equity or debt instruments of other entities | –1,390 | –579 |
Proceeds from sales of equity or debt instruments of other entities | 248 | 469 |
Net cash flows from investing activities | –1,647 | –6,700 |
Dividends paid | –1,864 | –1,790 |
Dividends paid on non-controlling interests | –2 | –2 |
Purchase of treasury shares | –442 | 0 |
Proceeds from borrowings | 2,015 | 2,523 |
Repayments of borrowings | –832 | –29 |
Payments of lease liabilities | –156 | –185 |
Net cash flows from financing activities | –1,281 | 517 |
Effect of foreign currency rates on cash and cash equivalents | 46 | 45 |
Net decrease/increase in cash and cash equivalents | 890 | –3,459 |
Cash and cash equivalents at the beginning of the period | 5,314 | 8,627 |
Cash and cash equivalents at the end of the period | 6,205 | 5,168 |
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 16 |
Non-IFRS Numbers
(D) Basis of Non-IFRS Presentation
We disclose certain financial measures such as revenue (non-IFRS), expense (non-IFRS), and profit measures (non-IFRS) that are not prepared in accordance with IFRS and are therefore considered non-IFRS financial measures.
For a more detailed description of all of SAP’s non-IFRS measures and their limitations as well as our constant currency and free cash flow figures, see Explanation of Non-IFRS Measures online.
SAP Q2 2020 Quarterly Statement Q2 2020 | 17 |
(E) Reconciliation from Non-IFRS Numbers to IFRS Numbers
(E.1) Reconciliation from Non-IFRS Numbers to IFRS Numbers – Quarter
€ millions, unless otherwise stated | Q2 2020 | Q2 2019 | ∆ in % |
IFRS | Adj. | Non-
IFRS | Currency
Impact | Non-IFRS
Constant
Currency | IFRS | Adj. | Non-IFRS | IFRS | Non-IFRS | Non-IFRS
Constant
Currency1) |
Revenue Numbers | | | | | | | | | | | |
Cloud | 2,044 | 0 | 2,044 | –11 | 2,033 | 1,692 | 25 | 1,717 | 21 | 19 | 18 |
Software licenses | 773 | 0 | 773 | 6 | 779 | 948 | 0 | 948 | –18 | –18 | –18 |
Software support | 2,892 | 0 | 2,892 | 6 | 2,898 | 2,854 | 0 | 2,854 | 1 | 1 | 2 |
Software licenses and support | 3,665 | 0 | 3,665 | 12 | 3,677 | 3,802 | 0 | 3,802 | –4 | –4 | –3 |
Cloud and software | 5,709 | 0 | 5,709 | 1 | 5,710 | 5,495 | 25 | 5,520 | 4 | 3 | 3 |
Services | 1,034 | 0 | 1,034 | –3 | 1,031 | 1,136 | 0 | 1,136 | –9 | –9 | –9 |
Total revenue | 6,743 | 0 | 6,744 | –3 | 6,741 | 6,631 | 25 | 6,656 | 2 | 1 | 1 |
| | | | | | | | | | | |
Operating Expense Numbers | | | | | | | | | | | |
Cost of cloud | –695 | 71 | –624 | | | –633 | 82 | –552 | 10 | 13 | |
Cost of software licenses and support | –497 | 34 | –463 | | | –531 | 41 | –490 | –6 | –6 | |
Cost of cloud and software | –1,192 | 106 | –1,086 | | | –1,164 | 123 | –1,042 | 2 | 4 | |
Cost of services | –835 | 73 | –763 | | | –946 | 82 | –864 | –12 | –12 | |
Total cost of revenue | –2,028 | 179 | –1,849 | | | –2,111 | 205 | –1,906 | –4 | –3 | |
Gross profit | 4,716 | 179 | 4,895 | | | 4,520 | 230 | 4,750 | 4 | 3 | |
Research and development | –1,159 | 138 | –1,021 | | | –1,053 | 132 | –921 | 10 | 11 | |
Sales and marketing | –1,833 | 262 | –1,571 | | | –1,995 | 264 | –1,730 | –8 | –9 | |
General and administration | –414 | 104 | –310 | | | –457 | 164 | –293 | –9 | 6 | |
Restructuring | 3 | –3 | 0 | | | –199 | 199 | 0 | <-100 | NA | |
Other operating income/expense, net | –29 | 0 | –29 | | | 10 | 0 | 10 | <-100 | <-100 | |
Total operating expenses | –5,459 | 680 | –4,780 | –10 | –4,790 | –5,803 | 964 | –4,840 | –6 | –1 | –1 |
| | | | | | | | | | | |
Profit Numbers | | | | | | | | | | | |
Operating profit (loss) | 1,284 | 680 | 1,964 | –12 | 1,951 | 827 | 989 | 1,816 | 55 | 8 | 7 |
Other non-operating income/expense, net | –54 | 0 | –54 | | | –41 | 0 | –41 | 32 | 32 | |
Finance income | 243 | 0 | 243 | | | 158 | 0 | 158 | 54 | 54 | |
Finance costs | –151 | 0 | –151 | | | –129 | 0 | –129 | 17 | 17 | |
Financial income, net | 92 | 0 | 92 | | | 29 | 0 | 29 | >100 | >100 | |
Profit (loss) before tax | 1,322 | 680 | 2,002 | | | 815 | 989 | 1,804 | 62 | 11 | |
Income tax expense | –437 | –170 | –607 | | | –233 | –254 | –487 | 87 | 25 | |
Profit (loss) after tax | 885 | 510 | 1,395 | | | 582 | 734 | 1,317 | 52 | 6 | |
Attributable to owners of parent | 866 | 510 | 1,376 | | | 569 | 734 | 1,304 | 52 | 6 | |
Attributable to non-controlling interests | 19 | 0 | 19 | | | 13 | 0 | 13 | 47 | 47 | |
| | | | | | | | | | | |
Key Ratios | | | | | | | | | | | |
Operating margin (in %) | 19.0 | | 29.1 | | 28.9 | 12.5 | | 27.3 | 6.6pp | 1.8pp | 1.7pp |
Effective tax rate (in %)2) | 33.1 | | 30.3 | | | 28.6 | | 27.0 | 4.5pp | 3.3pp | |
Earnings per share, basic (in €) | 0.73 | | 1.17 | | | 0.48 | | 1.09 | 54 | 7 | |
1) Constant currency period-over-period changes are calculated by comparing the current year’s non-IFRS constant currency numbers with the non-IFRS numbers of the previous year’s respective period.
2) The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q2 2020 mainly resulted from tax effects of share-based payment expenses and acquisition-related charges. The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q2 2019 mainly resulted from tax effects of share-based payment expenses, restructuring expenses and acquisition-related charges.
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 18 |
(E.2) Reconciliation from Non-IFRS Numbers to IFRS Numbers – Year-to-Date
€ millions, unless otherwise stated | Q1–Q2 2020 | Q1–Q2 2019 | ∆ in % |
IFRS | Adj. | Non-IFRS | Currency
Impact | Non-IFRS
Constant
Currency | IFRS | Adj. | Non-IFRS | IFRS | Non-IFRS | Non-IFRS
Constant
Currency1) |
Revenue Numbers | | | | | | | | | | | |
Cloud | 4,055 | 2 | 4,057 | –46 | 4,011 | 3,247 | 51 | 3,299 | 25 | 23 | 22 |
Software licenses | 1,224 | 0 | 1,224 | 5 | 1,230 | 1,599 | 0 | 1,599 | –23 | –23 | –23 |
Software support | 5,826 | 0 | 5,826 | –27 | 5,800 | 5,692 | 0 | 5,692 | 2 | 2 | 2 |
Software licenses and support | 7,051 | 0 | 7,051 | –21 | 7,029 | 7,291 | 0 | 7,291 | –3 | –3 | –4 |
Cloud and software | 11,106 | 2 | 11,107 | –67 | 11,040 | 10,538 | 51 | 10,589 | 5 | 5 | 4 |
Services | 2,159 | 0 | 2,159 | –21 | 2,137 | 2,184 | 0 | 2,184 | –1 | –1 | –2 |
Total revenue | 13,264 | 2 | 13,266 | –88 | 13,178 | 12,722 | 51 | 12,773 | 4 | 4 | 3 |
| | | | | | | | | | | |
Operating Expense Numbers | | | | | | | | | | | |
Cost of cloud | –1,370 | 128 | –1,242 | | | –1,237 | 151 | –1,086 | 11 | 14 | |
Cost of software licenses and support | –998 | 53 | –946 | | | –1,069 | 79 | –990 | –7 | –4 | |
Cost of cloud and software | –2,368 | 180 | –2,188 | | | –2,306 | 231 | –2,075 | 3 | 5 | |
Cost of services | –1,725 | 95 | –1,630 | | | –1,845 | 146 | –1,699 | –7 | –4 | |
Total cost of revenue | –4,094 | 276 | –3,818 | | | –4,151 | 377 | –3,774 | –1 | 1 | |
Gross profit | 9,171 | 277 | 9,448 | | | 8,571 | 428 | 8,999 | 7 | 5 | |
Research and development | –2,210 | 163 | –2,047 | | | –2,114 | 257 | –1,857 | 5 | 10 | |
Sales and marketing | –3,684 | 388 | –3,296 | | | –3,833 | 496 | –3,337 | –4 | –1 | |
General and administration | –729 | 111 | –618 | | | –895 | 325 | –570 | –19 | 8 | |
Restructuring | –13 | 13 | 0 | | | –1,085 | 1,085 | 0 | –99 | NA | |
Other operating income/expense, net | –41 | 0 | –41 | | | 48 | 0 | 48 | <-100 | <-100 | |
Total operating expenses | –10,770 | 950 | –9,820 | 55 | –9,765 | –12,031 | 2,540 | –9,490 | –10 | 3 | 3 |
| | | | | | | | | | | |
Profit Numbers | | | | | | | | | | | |
Operating profit (loss) | 2,494 | 952 | 3,446 | –33 | 3,413 | 691 | 2,592 | 3,283 | >100 | 5 | 4 |
Other non-operating income/expense, net | –103 | 0 | –103 | | | –44 | 0 | –44 | >100 | >100 | |
Finance income | 406 | 0 | 406 | | | 286 | 0 | 286 | 42 | 42 | |
Finance costs | –354 | 0 | –354 | | | –258 | 0 | –258 | 37 | 37 | |
Financial income, net | 53 | 0 | 53 | | | 29 | 0 | 29 | 84 | 84 | |
Profit (loss) before tax | 2,444 | 952 | 3,396 | | | 675 | 2,592 | 3,267 | >100 | 4 | |
Income tax expense | –747 | –239 | –986 | | | –201 | –669 | –870 | >100 | 13 | |
Profit (loss) after tax | 1,697 | 713 | 2,409 | | | 475 | 1,923 | 2,397 | >100 | 1 | |
Attributable to owners of parent | 1,681 | 713 | 2,393 | | | 455 | 1,923 | 2,378 | >100 | 1 | |
Attributable to non-controlling interests | 16 | 0 | 16 | | | 20 | 0 | 20 | –19 | –19 | |
| | | | | | | | | | | |
Key Ratios | | | | | | | | | | | |
Operating margin (in %) | 18.8 | | 26.0 | | 25.9 | 5.4 | | 25.7 | 13.4pp | 0.3pp | 0.2pp |
Effective tax rate (in %)2) | 30.6 | | 29.0 | | | 29.7 | | 26.6 | 0.9pp | 2.4pp | |
Earnings per share, basic (in €) | 1.42 | | 2.02 | | | 0.38 | | 1.99 | >100 | 1 | |
1) Constant-currency period-over-period changes are calculated by comparing the current year’s non-IFRS constant-currency numbers with the non-IFRS number of the previous year’s respective period.
2) The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in the first half of 2020 mainly resulted from tax effects of share-based payment expenses and acquisition-related charges. The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in the first half of 2019 mainly resulted from tax effects of share-based payment expenses, restructuring expenses and acquisition-related charges.
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 19 |
(F) Non-IFRS Adjustments – Actuals and Estimates
€ millions | Estimated Amounts for
Full Year 2020 | Q1–Q2 2020 | Q2 2020 | Q1–Q2
2019 | Q2 2019 |
Operating profit (loss) (IFRS) | | 2,494 | 1,284 | 691 | 827 |
Revenue adjustments | 0–30 | 2 | 0 | 51 | 25 |
Adjustment for acquisition-related charges | 580–690 | 325 | 163 | 341 | 168 |
Adjustment for share-based payment expenses | 1,200–1,600 | 612 | 519 | 1,114 | 517 |
Adjustment for restructuring | 20–40 | 13 | –3 | 1,085 | 199 |
Operating expense adjustments | | 950 | 680 | 2,540 | 964 |
Operating profit (loss) adjustments | | 952 | 680 | 2,592 | 989 |
Operating profit (loss) (non-IFRS) | | 3,446 | 1,964 | 3,283 | 1,816 |
Due to rounding, numbers may not add up precisely.
(G) Non-IFRS Adjustments by Functional Areas
€ millions | Q2 2020 | Q2 2019 |
IFRS | Acqui-
sition-
Related | SBP1) | Restruc-
turing | Non-IFRS | IFRS | Acquisition-
Related | SBP1) | Restruc-
turing | Non-IFRS |
Cost of cloud and software | –1,192 | 64 | 42 | 0 | –1,086 | –1,164 | 79 | 44 | 0 | –1,042 |
Cost of services | –835 | 1 | 72 | 0 | –763 | –946 | 1 | 81 | 0 | –864 |
Research and development | –1,159 | 2 | 136 | 0 | –1,021 | –1,053 | 2 | 130 | 0 | –921 |
Sales and marketing | –1,833 | 96 | 166 | 0 | –1,571 | –1,995 | 85 | 179 | 0 | –1,730 |
General and administration | –414 | 1 | 103 | 0 | –310 | –457 | 1 | 163 | 0 | –293 |
Restructuring | 3 | 0 | 0 | –3 | 0 | –199 | 0 | 0 | 199 | 0 |
Other operating income/expense, net | –29 | 0 | 0 | 0 | –29 | 10 | 0 | 0 | 0 | 10 |
Total operating expenses | –5,459 | 163 | 519 | –3 | –4,780 | –5,803 | 168 | 597 | 199 | –4,840 |
€ millions | Q1–Q2 2020 | Q1–Q2 2019 |
IFRS | Acqui- sition- Related | SBP1) | Restruc-
turing | Non-IFRS | IFRS | Acqui- sition- Related | SBP1) | Restruc-
turing | Non-IFRS |
Cost of cloud and software | –2,368 | 127 | 53 | 0 | –2,188 | –2,306 | 150 | 81 | 0 | –2,075 |
Cost of services | –1,725 | 2 | 94 | 0 | –1,630 | –1,845 | 3 | 144 | 0 | –1,699 |
Research and development | –2,210 | 4 | 159 | 0 | –2,047 | –2,114 | 5 | 252 | 0 | –1,857 |
Sales and marketing | –3,684 | 191 | 197 | 0 | –3,296 | –3,833 | 169 | 327 | 0 | –3,337 |
General and administration | –729 | 1 | 110 | 0 | –618 | –895 | 14 | 311 | 0 | –570 |
Restructuring | –13 | 0 | 0 | 13 | 0 | –1,085 | 0 | 0 | 1,085 | 0 |
Other operating income/expense, net | –41 | 0 | 0 | 0 | –41 | 48 | 0 | 0 | 0 | 48 |
Total operating expenses | –10,770 | 325 | 612 | 13 | –9,820 | –12,031 | 341 | 1,114 | 1,085 | –9,490 |
1) Share-based Payments
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 20 |
If not presented in a separate line item in our income statement, the restructuring expenses would break down as follows:
€ millions | Q2 2020 | Q1–Q2 2020 | Q2 2019 | Q1–Q2 2019 |
Cost of cloud and software | 0 | –2 | –10 | –127 |
Cost of services | –1 | –5 | –25 | –169 |
Research and development | 1 | –5 | –57 | –443 |
Sales and marketing | 3 | 0 | –104 | –281 |
General and administration | 0 | 0 | –3 | –64 |
Restructuring expenses | 3 | –13 | –199 | –1,085 |
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 21 |
Disaggregations
(H) Segment Reporting
(H.1) Segment Policies and Segment Changes
SAP has four reportable segments: the Applications, Technology & Support segment, the Services segment, the Concur segment, and the Qualtrics segment.
For a more detailed description of SAP’s segment reporting, see Note (C.1) “Results of Segments” of our Half-Year Report 2020.
(H.2) Segment Reporting – Quarter
Applications, Technology & Support
€ millions, unless otherwise stated (Non-IFRS) | Q2 2020 | Q2 2019 | ∆ in % | ∆ in % |
Actual Currency | Constant Currency | Actual Currency | Actual Currency | Constant Currency |
Cloud | 1,589 | 1,585 | 1,282 | 24 | 24 |
Software licenses | 773 | 778 | 940 | –18 | –17 |
Software support | 2,891 | 2,897 | 2,852 | 1 | 2 |
Software licenses and support | 3,664 | 3,676 | 3,792 | –3 | –3 |
Cloud and software | 5,252 | 5,260 | 5,075 | 3 | 4 |
Services | 62 | 62 | 83 | –25 | –25 |
Total segment revenue | 5,314 | 5,322 | 5,158 | 3 | 3 |
Cost of cloud | –553 | –554 | –482 | 15 | 15 |
Cost of software licenses and support | –435 | –438 | –465 | –6 | –6 |
Cost of cloud and software | –988 | –992 | –946 | 4 | 5 |
Cost of services | –70 | –71 | –86 | –18 | –17 |
Total cost of revenue | –1,058 | –1,063 | –1,032 | 3 | 3 |
Segment gross profit | 4,256 | 4,259 | 4,126 | 3 | 3 |
Other segment expenses | –1,927 | –1,936 | –1,909 | 1 | 1 |
Segment profit (loss) | 2,329 | 2,323 | 2,217 | 5 | 5 |
Margins | | | | | |
Cloud gross margin (in %) | 65.2 | 65.1 | 62.4 | 2.8pp | 2.6pp |
Segment gross margin (in %) | 80.1 | 80.0 | 80.0 | 0.1pp | 0.0pp |
Segment margin (in %) | 43.8 | 43.7 | 43.0 | 0.9pp | 0.7pp |
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 22 |
Services
€ millions, unless otherwise stated (Non-IFRS) | Q2 2020 | Q2 2019 | ∆ in % | ∆ in % |
Actual Currency | Constant Currency | Actual Currency | Actual Currency | Constant Currency |
Cloud | 0 | 0 | 0 | NA | NA |
Software licenses | 0 | 0 | 0 | NA | NA |
Software support | 1 | 1 | 1 | –39 | –39 |
Software licenses and support | 1 | 1 | 1 | –39 | –38 |
Cloud and software | 1 | 1 | 2 | –44 | –44 |
Services | 795 | 794 | 849 | –6 | –6 |
Total segment revenue | 796 | 795 | 850 | –6 | –6 |
Cost of cloud | –17 | –18 | –15 | 13 | 15 |
Cost of software licenses and support | –6 | –6 | –12 | –48 | –47 |
Cost of cloud and software | –24 | –24 | –28 | –14 | –13 |
Cost of services | –531 | –534 | –637 | –17 | –16 |
Total cost of revenue | –555 | –558 | –665 | –17 | –16 |
Segment gross profit | 242 | 237 | 186 | 30 | 27 |
Other segment expenses | –121 | –121 | –127 | –5 | –4 |
Segment profit (loss) | 121 | 115 | 59 | >100 | 96 |
Margins | | | | | |
Services gross margin (in %) | 33.3 | 32.7 | 25.0 | 8.3pp | 7.8pp |
Segment gross margin (in %) | 30.4 | 29.8 | 21.8 | 8.5pp | 7.9pp |
Segment margin (in %) | 15.2 | 14.5 | 6.9 | 8.3pp | 7.6pp |
Due to rounding, numbers may not add up precisely.
Concur
€ millions, unless otherwise stated (Non-IFRS) | Q2 2020 | Q2 2019 | ∆ in % | ∆ in % |
Actual Currency | Constant Currency | Actual Currency | Actual Currency | Constant Currency |
Cloud | 323 | 318 | 338 | –4 | –6 |
Software licenses | 0 | 0 | 0 | NA | NA |
Software support | 0 | 0 | 0 | NA | NA |
Software licenses and support | 0 | 0 | 0 | NA | NA |
Cloud and software | 323 | 318 | 338 | –4 | –6 |
Services | 56 | 56 | 57 | –2 | –3 |
Total segment revenue | 379 | 374 | 395 | –4 | –5 |
Cost of cloud | –38 | –37 | –46 | –18 | –18 |
Cost of software licenses and support | 0 | 0 | 0 | NA | NA |
Cost of cloud and software | –38 | –37 | –46 | –18 | –18 |
Cost of services | –42 | –41 | –43 | –4 | –5 |
Total cost of revenue | –79 | –79 | –89 | –11 | –12 |
Segment gross profit | 300 | 295 | 306 | –2 | –4 |
Other segment expenses | –164 | –162 | –164 | 0 | –1 |
Segment profit (loss) | 137 | 133 | 142 | –4 | –6 |
Margins | | | | | |
Cloud gross margin (in %) | 88.4 | 88.3 | 86.5 | 1.9pp | 1.8pp |
Segment gross margin (in %) | 79.2 | 79.0 | 77.5 | 1.7pp | 1.5pp |
Segment margin (in %) | 36.0 | 35.6 | 36.0 | 0.0pp | –0.4pp |
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 23 |
Qualtrics
€ millions, unless otherwise stated (Non-IFRS) | Q2 2020 | Q2 2019 | ∆ in % | ∆ in % |
Actual Currency | Constant Currency | Actual Currency | Actual Currency | Constant Currency |
Cloud | 130 | 128 | 94 | 38 | 36 |
Software licenses | 0 | 0 | 0 | NA | NA |
Software support | 0 | 0 | 0 | NA | NA |
Software licenses and support | 0 | 0 | 0 | NA | NA |
Cloud and software | 130 | 128 | 94 | 38 | 36 |
Services | 37 | 37 | 31 | 21 | 19 |
Total segment revenue | 168 | 165 | 125 | 34 | 32 |
Cost of cloud | –12 | –11 | –8 | 55 | 52 |
Cost of software licenses and support | 0 | 0 | 0 | NA | NA |
Cost of cloud and software | –12 | –11 | –8 | 55 | 52 |
Cost of services | –24 | –24 | –18 | 38 | 36 |
Total cost of revenue | –36 | –35 | –25 | 43 | 41 |
Segment gross profit | 132 | 129 | 100 | 32 | 29 |
Other segment expenses | –125 | –122 | –93 | 34 | 31 |
Segment profit (loss) | 7 | 7 | 7 | 2 | 1 |
Margins | | | | | |
Cloud gross margin (in %) | 91.0 | 91.0 | 92.0 | –0.9pp | –1.0pp |
Segment gross margin (in %) | 78.6 | 78.5 | 79.9 | –1.3pp | –1.4pp |
Segment margin (in %) | 4.3 | 4.3 | 5.6 | –1.4pp | –1.3pp |
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 24 |
Reconciliation of Cloud Revenues and Margins
€ millions, unless otherwise stated (Non-IFRS) | | Q2 2020 | Q2 2019 | ∆ in % | ∆ in % |
Actual Currency | Constant Currency | Actual Currency | Actual Currency | Constant Currency |
Cloud revenue – SaaS/PaaS1) | Intelligent Spend3) | 691 | 684 | 666 | 4 | 3 |
Thereof Concur segment | 323 | 318 | 338 | –4 | –6 |
Other4) | 1,137 | 1,133 | 880 | 29 | 29 |
Total | 1,828 | 1,817 | 1,547 | 18 | 17 |
Cloud revenue – IaaS2) | | 216 | 216 | 170 | 27 | 26 |
Cloud revenue | | 2,044 | 2,033 | 1,717 | 19 | 18 |
Cloud gross margin – SaaS/PaaS1) (in %) | Intelligent Spend3) | 79.9 | 79.7 | 78.1 | 1.8pp | 1.7pp |
Thereof Concur segment | 88.4 | 88.3 | 86.5 | 1.9pp | 1.8pp |
Other4) | 69.5 | 69.5 | 69.0 | 0.6pp | 0.5pp |
Total | 73.5 | 73.3 | 72.9 | 0.6pp | 0.5pp |
Cloud gross margin – IaaS2) (in %) | | 36.0 | 35.6 | 22.4 | 13.6pp | 13.2pp |
Cloud gross margin (in %) | | 69.5 | 69.3 | 67.9 | 1.6pp | 1.5pp |
1) Software as a service/platform as a service
2) Infrastructure as a service; completely included in the Applications, Technology & Support segment
3) Intelligent Spend includes the Concur segment and further Intelligent Spend offerings mainly included in the Applications, Technology & Support segment.
4) Other includes all other SaaS/PaaS offerings that do not belong to Intelligent Spend.
The individual revenue and margin numbers for segments are disclosed on the previous pages.
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 25 |
(H.3) Segment Reporting – Year-to-Date
Applications, Technology & Support
€ millions, unless otherwise stated (Non-IFRS) | Q1–Q2 2020 | Q1–Q2 2019 | ∆ in % | ∆ in % |
Actual Currency | Constant Currency | Actual Currency | Actual Currency | Constant Currency |
Cloud | 3,112 | 3,087 | 2,482 | 25 | 24 |
Software licenses | 1,220 | 1,225 | 1,590 | –23 | –23 |
Software support | 5,824 | 5,798 | 5,689 | 2 | 2 |
Software licenses and support | 7,044 | 7,023 | 7,280 | –3 | –4 |
Cloud and software | 10,156 | 10,110 | 9,761 | 4 | 4 |
Services | 145 | 144 | 162 | –11 | –11 |
Total segment revenue | 10,301 | 10,253 | 9,923 | 4 | 3 |
Cost of cloud | –1,095 | –1,088 | –948 | 15 | 15 |
Cost of software licenses and support | –887 | –886 | –932 | –5 | –5 |
Cost of cloud and software | –1,982 | –1,974 | –1,880 | 5 | 5 |
Cost of services | –156 | –156 | –179 | –13 | –13 |
Total cost of revenue | –2,138 | –2,130 | –2,059 | 4 | 3 |
Segment gross profit | 8,163 | 8,124 | 7,864 | 4 | 3 |
Other segment expenses | –4,004 | –3,993 | –3,886 | 3 | 3 |
Segment profit (loss) | 4,159 | 4,131 | 3,978 | 5 | 4 |
Margins | | | | | |
Cloud gross margin (in %) | 64.8 | 64.8 | 61.8 | 3.0pp | 3.0pp |
Segment gross margin (in %) | 79.2 | 79.2 | 79.2 | 0.0pp | 0.0pp |
Segment margin (in %) | 40.4 | 40.3 | 40.1 | 0.3pp | 0.2pp |
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 26 |
Services
€ millions, unless otherwise stated
(Non-IFRS) | Q1–Q2 2020 | Q1–Q2 2019 | ∆ in % | ∆ in % |
Actual Currency | Constant Currency | Actual Currency | Actual Currency | Constant Currency |
Cloud | 0 | 0 | 0 | NA | NA |
Software licenses | 0 | 0 | 0 | NA | NA |
Software support | 2 | 2 | 2 | –21 | –21 |
Software licenses and support | 2 | 2 | 2 | –22 | –22 |
Cloud and software | 2 | 2 | 3 | –26 | –25 |
Services | 1,644 | 1,630 | 1,654 | –1 | –1 |
Total segment revenue | 1,646 | 1,632 | 1,656 | –1 | –1 |
Cost of cloud | –37 | –37 | –29 | 28 | 28 |
Cost of software licenses and support | –21 | –21 | –34 | –39 | –39 |
Cost of cloud and software | –57 | –58 | –63 | –8 | –8 |
Cost of services | –1,151 | –1,149 | –1,270 | –9 | –10 |
Total cost of revenue | –1,208 | –1,206 | –1,333 | –9 | –10 |
Segment gross profit | 438 | 426 | 324 | 35 | 32 |
Other segment expenses | –231 | –230 | –238 | –3 | –3 |
Segment profit (loss) | 207 | 196 | 85 | >100 | >100 |
Margins | | | | | |
Services gross margin (in %) | 30.0 | 29.5 | 23.2 | 6.8pp | 6.3pp |
Segment gross margin (in %) | 26.6 | 26.1 | 19.5 | 7.1pp | 6.6pp |
Segment margin (in %) | 12.6 | 12.0 | 5.2 | 7.4pp | 6.8pp |
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 27 |
Concur
€ millions, unless otherwise stated
(Non-IFRS) | Q1–Q2 2020 | Q1–Q2 2019 | ∆ in % | ∆ in % |
Actual Currency | Constant Currency | Actual Currency | Actual Currency | Constant Currency |
Cloud | 690 | 675 | 654 | 5 | 3 |
Software licenses | 0 | 0 | 0 | NA | NA |
Software support | 0 | 0 | 0 | NA | NA |
Software licenses and support | 0 | 0 | 0 | NA | NA |
Cloud and software | 690 | 675 | 654 | 5 | 3 |
Services | 118 | 115 | 115 | 2 | 0 |
Total segment revenue | 807 | 791 | 770 | 5 | 3 |
Cost of cloud | –81 | –80 | –93 | –13 | –14 |
Cost of software licenses and support | 0 | 0 | 0 | NA | NA |
Cost of cloud and software | –81 | –80 | –93 | –13 | –14 |
Cost of services | –84 | –83 | –82 | 2 | 1 |
Total cost of revenue | –166 | –163 | –176 | –6 | –7 |
Segment gross profit | 642 | 628 | 594 | 8 | 6 |
Other segment expenses | –344 | –339 | –315 | 9 | 7 |
Segment profit (loss) | 297 | 289 | 279 | 7 | 4 |
Margins | | | | | |
Cloud gross margin (in %) | 88.2 | 88.2 | 85.7 | 2.5pp | 2.4pp |
Segment gross margin (in %) | 79.5 | 79.4 | 77.2 | 2.3pp | 2.2pp |
Segment margin (in %) | 36.8 | 36.5 | 36.2 | 0.6pp | 0.3pp |
Due to rounding, numbers may not add up precisely.
Qualtrics
€ millions, unless otherwise stated
(Non-IFRS) | Q1–Q2 2020 | Q1–Q2 2019 | ∆ in % | ∆ in % |
Actual Currency | Constant Currency | Actual Currency | Actual Currency | Constant Currency |
Cloud | 250 | 244 | 158 | 59 | 55 |
Software licenses | 0 | 0 | 0 | NA | NA |
Software support | 0 | 0 | 0 | NA | NA |
Software licenses and support | 0 | 0 | 0 | NA | NA |
Cloud and software | 250 | 244 | 158 | 59 | 55 |
Services | 79 | 77 | 56 | 41 | 37 |
Total segment revenue | 329 | 321 | 214 | 54 | 50 |
Cost of cloud | –23 | –22 | –13 | 74 | 71 |
Cost of software licenses and support | 0 | 0 | 0 | NA | NA |
Cost of cloud and software | –23 | –22 | –13 | 74 | 71 |
Cost of services | –53 | –52 | –29 | 85 | 81 |
Total cost of revenue | –76 | –74 | –42 | 82 | 78 |
Segment gross profit | 253 | 247 | 172 | 47 | 43 |
Other segment expenses | –258 | –251 | –158 | 63 | 59 |
Segment profit (loss) | –5 | –4 | 14 | <-100 | <-100 |
Margins | | | | | |
Cloud gross margin (in %) | 90.9 | 90.9 | 91.8 | –0.8pp | –0.9pp |
Segment gross margin (in %) | 77.0 | 76.9 | 80.5 | –3.5pp | –3.6pp |
Segment margin (in %) | –1.5 | –1.2 | 6.6 | –8.1pp | –7.8pp |
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 28 |
Reconciliation of Cloud Revenues and Margins
€ millions, unless otherwise stated | | Q1–Q2 2020 | Q1–Q2 2019 | D in % | D in % |
(Non-IFRS) | | Actual
Currency | Constant
Currency | Actual
Currency | Actual
Currency | Constant
Currency |
Cloud revenue – SaaS/PaaS1) | Intelligent Spend3) | 1,411 | 1,389 | 1,292 | 9 | 7 |
Thereof Concur segment | 690 | 675 | 654 | 5 | 3 |
Other4) | 2,225 | 2,205 | 1,678 | 33 | 31 |
Total | 3,636 | 3,594 | 2,970 | 22 | 21 |
Cloud revenue – IaaS2) | | 421 | 417 | 329 | 28 | 27 |
Cloud revenue | | 4,057 | 4,011 | 3,299 | 23 | 22 |
Cloud gross margin – SaaS/PaaS1) (in %) | Intelligent Spend3) | 79.3 | 79.2 | 77.9 | 1.4pp | 1.3pp |
Thereof Concur segment | 88.2 | 88.2 | 85.7 | 2.5pp | 2.4pp |
Other4) | 69.8 | 69.9 | 66.6 | 3.3pp | 3.3pp |
Total | 73.5 | 73.5 | 71.5 | 2.0pp | 2.0pp |
Cloud gross margin – IaaS2) (in %) | | 33.5 | 33.2 | 27.1 | 6.5pp | 6.1pp |
Cloud gross margin (in %) | | 69.4 | 69.3 | 67.1 | 2.3pp | 2.2pp |
1) Software as a service/platform as a service
2) Infrastructure as a service; completely included in the Applications, Technology & Support segment
3) Intelligent Spend includes the Concur segment and further Intelligent Spend offerings mainly included in the Applications, Technology & Support segment.
4) Other includes all other SaaS/PaaS offerings that do not belong to Intelligent Spend.
The individual revenue and margin numbers for segments are disclosed on the previous pages.
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 29 |
(I) Revenue by Region (IFRS and Non-IFRS)
(I.1) Revenue by Region (IFRS and Non-IFRS) – Quarter
€ millions | | | | | | | Q2 2020 | | | | Q2 2019 | | | | | | D in % | |
| | IFRS | | Adj. | | Non-IFRS | Currency
Impact | Non-IFRS
Constant
Currency | | IFRS | | Adj. | | Non-IFRS | | IFRS | | Non-IFRS | | Non-IFRS
Constant
Currency1) | |
Cloud Revenue by Region | | | | | | | | | | | | | | | | | | | |
EMEA | | 660 | | 0 | | 660 | 1 | 660 | | 511 | | 0 | | 511 | | 29 | | 29 | | 29 | |
Americas | | 1,133 | | 0 | | 1,133 | –12 | 1,122 | | 970 | | 25 | | 995 | | 17 | | 14 | | 13 | |
APJ | | 251 | | 0 | | 251 | 0 | 251 | | 212 | | 0 | | 212 | | 19 | | 19 | | 18 | |
Cloud revenue | | 2,044 | | 0 | | 2,044 | –11 | 2,033 | | 1,692 | | 25 | | 1,717 | | 21 | | 19 | | 18 | |
| | | | | | | | | | | | | | | | | | | | | |
Cloud and Software Revenue by Region | | | | | | | | | | | | | | | | | |
EMEA | | 2,515 | | 0 | | 2,515 | 12 | 2,526 | | 2,445 | | 0 | | 2,445 | | 3 | | 3 | | 3 | |
Americas | | 2,294 | | 0 | | 2,294 | –14 | 2,281 | | 2,185 | | 25 | | 2,210 | | 5 | | 4 | | 3 | |
APJ | | 900 | | 0 | | 900 | 2 | 903 | | 865 | | 0 | | 865 | | 4 | | 4 | | 4 | |
Cloud and software revenue | | 5,709 | | 0 | | 5,709 | 1 | 5,710 | | 5,495 | | 25 | | 5,520 | | 4 | | 3 | | 3 | |
| | | | | | | | | | | | | | | | | | | | | |
Total Revenue by Region | | | | | | | | | | | | | | | | | | | |
Germany | | 951 | | 0 | | 951 | 0 | 951 | | 948 | | 0 | | 948 | | 0 | | 0 | | 0 | |
Rest of EMEA | | 1,968 | | 0 | | 1,968 | 13 | 1,981 | | 1,961 | | 0 | | 1,961 | | 0 | | 0 | | 1 | |
Total EMEA | | 2,919 | | 0 | | 2,919 | 13 | 2,932 | | 2,910 | | 0 | | 2,910 | | 0 | | 0 | | 1 | |
United States | | 2,311 | | 0 | | 2,311 | –44 | 2,267 | | 2,201 | | 25 | | 2,226 | | 5 | | 4 | | 2 | |
Rest of Americas | | 480 | | 0 | | 480 | 26 | 506 | | 499 | | 0 | | 499 | | –4 | | –4 | | 1 | |
Total Americas | | 2,791 | | 0 | | 2,791 | –18 | 2,773 | | 2,700 | | 25 | | 2,725 | | 3 | | 2 | | 2 | |
Japan | | 336 | | 0 | | 336 | –12 | 324 | | 262 | | 0 | | 262 | | 28 | | 28 | | 24 | |
Rest of APJ | | 698 | | 0 | | 698 | 14 | 713 | | 759 | | 0 | | 759 | | –8 | | –8 | | –6 | |
Total APJ | | 1,034 | | 0 | | 1,034 | 3 | 1,037 | | 1,021 | | 0 | | 1,021 | | 1 | | 1 | | 2 | |
Total revenue | | 6,743 | | 0 | | 6,744 | –3 | 6,741 | | 6,631 | | 25 | | 6,656 | | 2 | | 1 | | 1 | |
1) Constant currency period-over-period changes are calculated by comparing the current year’s non-IFRS constant currency numbers with the non-IFRS numbers of the previous year’s respective period.
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 30 |
(I.2) Revenue by Region (IFRS and Non-IFRS) – Year-to-Date
€ millions | | | | | Q1–Q2 2020 | | Q1–Q2 2019 | | | ∆ in % |
| IFRS | Adj. | Non-IFRS | Currency Impact | Non-IFRS Constant Currency | IFRS | Adj. | Non-IFRS | IFRS | Non-IFRS | Non-IFRS Constant Currency1) |
Cloud Revenue by Region | | | | | | | | | | | |
EMEA | 1,277 | 0 | 1,277 | –5 | 1,272 | 967 | 0 | 967 | 32 | 32 | 32 |
Americas | 2,275 | 2 | 2,277 | –38 | 2,239 | 1,868 | 51 | 1,919 | 22 | 19 | 17 |
APJ | 502 | 0 | 502 | –3 | 499 | 412 | 0 | 412 | 22 | 22 | 21 |
Cloud revenue | 4,055 | 2 | 4,057 | –46 | 4,011 | 3,247 | 51 | 3,299 | 25 | 23 | 22 |
| | | | | | | | | | | |
Cloud and Software Revenue by Region | | | | | | |
EMEA | 4,840 | 0 | 4,840 | –2 | 4,838 | 4,629 | 0 | 4,629 | 5 | 5 | 5 |
Americas | 4,545 | 2 | 4,547 | –60 | 4,487 | 4,230 | 51 | 4,281 | 7 | 6 | 5 |
APJ | 1,720 | 0 | 1,720 | –5 | 1,715 | 1,680 | 0 | 1,680 | 2 | 2 | 2 |
Cloud and software revenue | 11,106 | 2 | 11,107 | –67 | 11,040 | 10,538 | 51 | 10,589 | 5 | 5 | 4 |
| | | | | | | | | | | |
Total Revenue by Region | | | | | | |
Germany | 1,846 | 0 | 1,846 | –1 | 1,845 | 1,783 | 0 | 1,783 | 3 | 3 | 3 |
Rest of EMEA | 3,862 | 0 | 3,862 | –2 | 3,860 | 3,754 | 0 | 3,754 | 3 | 3 | 3 |
Total EMEA | 5,708 | 0 | 5,708 | –3 | 5,705 | 5,537 | 0 | 5,537 | 3 | 3 | 3 |
United States | 4,577 | 2 | 4,578 | –108 | 4,471 | 4,245 | 51 | 4,296 | 8 | 7 | 4 |
Rest of Americas | 983 | 0 | 983 | 29 | 1,012 | 957 | 0 | 957 | 3 | 3 | 6 |
Total Americas | 5,560 | 2 | 5,561 | –79 | 5,483 | 5,202 | 51 | 5,253 | 7 | 6 | 4 |
Japan | 641 | 0 | 641 | –25 | 617 | 526 | 0 | 526 | 22 | 22 | 17 |
Rest of APJ | 1,356 | 0 | 1,356 | 18 | 1,373 | 1,457 | 0 | 1,457 | –7 | –7 | –6 |
Total APJ | 1,997 | 0 | 1,997 | –7 | 1,990 | 1,983 | 0 | 1,983 | 1 | 1 | 0 |
Total revenue | 13,264 | 2 | 13,266 | –88 | 13,178 | 12,722 | 51 | 12,773 | 4 | 4 | 3 |
1) Constant-currency period-over-period changes are calculated by comparing the current year’s non-IFRS constant-currency numbers with the non-IFRS number of the previous year’s respective period.
Due to rounding, numbers may not add up precisely.
SAP Q2 2020 Quarterly Statement Q2 2020 | 31 |
(J) Employees by Region and Functional Areas
Full-time equivalents | 6/30/2020 | 6/30/2019 |
| EMEA | Americas | APJ | Total | EMEA | Americas | APJ | Total |
Cloud and software | 6,354 | 4,638 | 5,461 | 16,454 | 6,390 | 4,530 | 5,260 | 16,180 |
Services | 8,278 | 6,067 | 5,992 | 20,337 | 8,302 | 5,766 | 5,772 | 19,839 |
Research and development | 12,941 | 5,942 | 9,330 | 28,214 | 12,486 | 5,378 | 8,805 | 26,668 |
Sales and marketing | 10,266 | 10,493 | 5,104 | 25,863 | 9,966 | 10,223 | 5,118 | 25,307 |
General and administration | 3,208 | 2,215 | 1,233 | 6,656 | 3,120 | 2,064 | 1,239 | 6,424 |
Infrastructure | 2,138 | 1,049 | 670 | 3,857 | 2,240 | 1,022 | 651 | 3,913 |
SAP Group (6/30) | 43,184 | 30,404 | 27,791 | 101,379 | 42,504 | 28,983 | 26,844 | 98,332 |
Thereof acquisitions1) | 0 | 0 | 0 | 0 | 338 | 1,638 | 137 | 2,113 |
SAP Group (six months’ end average) | 43,190 | 30,248 | 27,718 | 101,156 | 42,538 | 29,283 | 26,784 | 98,605 |
1) Acquisitions closed between January 1 and June 30 of the respective year
SAP Q2 2020 Quarterly Statement Q2 2020 | 32 |
Other Disclosures
(K) Financial Income, Net
Finance income mainly consists of gains from disposal of equity securities and IFRS 9-related fair value adjustments totaling €211 million in the second quarter 2020 (Q2/2019: €113 million) and €333 million in the first half 2020 (HY1/2019: €196 million).
Finance costs mainly consist of losses from disposal or IFRS 9-related fair value adjustments of Sapphire Ventures
investments totaling €57 million in the second quarter 2020 (Q2/2019: €21 million) and €159 million in the first half 2020 (HY1/2019: €27 million).
For more information about Financial Income, Net, see the Notes to the 2020 Consolidated Half-Year Financial Statements, Note (C.4).
(L) Divestments
On May 5, 2020, SAP and Sinch AB, Stockholm, Sweden (hereafter “Sinch”) announced that they had entered into a definitive agreement for Sinch to acquire the SAP Digital Interconnect group. The purchase price amounts to €225 million (on a cash-free, debt-free basis). The transaction is expected to close in the fourth quarter of 2020 — following satisfaction of applicable regulatory and other approvals.
For more information about divestments, see the Notes to the 2020 Consolidated Half-Year Financial Statements, Note (D.1).
SAP Q2 2020 Quarterly Statement Q2 2020 | 33 |
