v2.3.0.11
Note 29 - Segment and Geographic Information
 12 Months Ended
Dec. 31, 2011
Disclosure - Note 29 - Segment and Geographic Information  
Disclosure of segment and geographic information
(29) Segment and Geographic Information
 
a) Information on the Reportable Segments
Our internal reporting system produces reports in which business activities are presented in a variety of ways, for example, by line of business, geography, and areas of responsibility of the individual Executive Board members (Board areas). Based on these reports, the Executive Board, which is responsible for assessing the performance of various company components and making resource allocation decisions as our Chief Operating Decision Maker (CODM), evaluates business activities in a number of different ways. Until the second quarter of 2010 we had only three operating segments, which were organized according to our lines of business. After the acquisition of Sybase in July 2010, we implemented a dedicated Sybase business unit next to our existing segments Product, Consulting, and Training. Consequently, a new segment was added to our segment reporting. Although the new segment is called Sybase, it is not identical to the acquired Sybase business. Certain activities of the acquired business are integrated and thus reported in our Product, Consulting, and Training segments while certain activities that existed in SAP prior to the Sybase business combination have been transferred to the Sybase segment. In our segment reporting, the revenue is presented according to the sales responsibilities rather than the product being sold. As such, the Sybase segment is able to generate revenue selling SAP products as well as Sybase products, while the revenue shown in the other segments can also be attributable to both SAP and Sybase products, which have been sold by sales personnel of SAP.
 
The Product segment is primarily engaged in marketing and licensing our software products and providing support services for our software products. The Consulting segment performs various professional services, mainly relating to the implementation of our software products. The Training segment provides educational services on the use of our software products and related topics for customers and partners. The Sybase segment derives its revenue from licensing a range of software products, including enterprise and mobile databases, middleware, synchronization, encryption and device management software, from performing support services, professional services, and training services associated with these software products, and from providing mobile messaging services.
 
Our management reporting system reports our inter-segment services as cost reductions and does not track them as internal revenue. Inter-segment services mainly represent utilization of manpower resources of one segment by another segment on a project-by-project basis. Inter-segment services are charged based on internal cost rates including certain indirect overhead costs but without profit margin.
 
The accounting policies applied in the internal reporting to our CODM differ from IFRS accounting principles described in Note (3) as follows:
-      The internal reporting to our CODM generally attributes revenue to the segment that is responsible for the related transaction regardless of revenue classification in our income statement. Thus, for example, the Training segment's revenue includes certain amounts classified as software revenue in our Consolidated Income Statements. Additionally revenue for Sybase products might be reported under any of the four segments.
-      The internal reporting to our CODM excludes share-based compensation expenses and - since 2009 - restructuring costs at segment level. For all years presented, these expenses were managed and reviewed at Group level only.
-      Differences in foreign currency translations result in deviations between the amounts reported internally to our CODM and the amounts reported in the Consolidated Financial Statements.
-      The revenue numbers in the internal reporting to our CODM include the support revenue that would have been reflected by acquired entities had it remained a stand-alone entity but which are not reflected as revenue under IFRS as a result of purchase accounting for support contracts in effect at the time of an acquisition.
-      The income measures in the internal reporting to our CODM include the full amount of support revenue and exclude the following acquisition-related charges as well as discontinued activities:
-     Amortization expense/impairment charges of intangibles acquired in business combinations and certain stand-alone acquisitions of intellectual property
-     Expenses from purchased in-process research and development
-     Restructuring expenses and settlements of pre-existing relationships
-     Acquisition-related third-party costs that are required to be expensed
-     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. For 2011, 2010 and 2009, this relates exclusively to the operations of TomorrowNow.
 
Segment Revenue and Results
 
€ millions
Product
Consulting
Training
Sybase
Total
2011
 
 
 
 
 
External revenue from reportable segment
10,025
2,955
376
873
14,229
Segment result
5,940
864
147
226
7,177
Depreciation and amortization directly attributable to each segment
-14
-11
-1
-16
-42
2010
 
 
 
 
 
External revenue from reportable segment
9,020
2,714
362
387
12,483
Segment result
5,395
746
136
127
6,404
Depreciation and amortization directly attributable to each segment
-17
-8
-2
-7
-34
2009
 
 
 
 
 
External revenue from reportable segment
7,846
2,498
332
N/A
10,676
Segment result
4,731
781
115
N/A
5,627
Depreciation and amortization directly attributable to each segment
-53
-7
-2
N/A
-62
 
 
Reconciliation of Revenue and Segment Results
 
 
€ millions
2011
2010
2009
External revenue from reportable segments
14,229
12,483
10,676
External revenue from activities outside of the reportable segments
31
55
7
Adjustment support revenue
-27
-74
-11
Total revenue
14,233
12,464
10,672
 
 
 
 
Segment result from reportable segments
7,177
6,404
5,627
External revenue from activities outside of the reportable segments
31
55
7
Development expense - management view
-1,746
-1,800
-1,801
Administration and other corporate expenses - management view
-751
-651
-659
Share-based payment expense
-68
-58
-54
Restructuring
-4
-2
-194
Acquisition-related restructuring expenses
0
5
-4
Acquisition-related charges
-448
-305
-267
Adjustment support revenue
-27
-74
-11
TomorrowNow litigation
717
-983
-56
Operating profit
4,881
2,591
2,588
Other non-operating expense, net
-75
-186
-73
Financial income, net
-38
-67
-80
Profit before tax
4,768
2,338
2,435
 
 
 
Segment Revenue
External revenue from activities outside of the reportable segments mainly represents revenue incidental to our main business activities and minor currency translation differences.
 
Segment Result
The segment results of our segments Product, Consulting, and Training reflects operating expenses directly attributable or reasonably allocable to the segments, including costs of revenue, and sales and marketing expenses. Costs that are not directly attributable or reasonably allocable to the segments such as administration and other corporate expenses are not included in the segment result. Development expense is excluded from the segment result because our CODM reviews segment performance without taking development expense into account.
 
The measurement of the segment result for the Sybase segment differs from the measurement for the other segments, as the Sybase segment result includes development, administration and other corporate expenses while these expenses are excluded from the measurement of the segment results of the other segments.
 
Depreciation and amortization expenses reflected in the segment result include the amounts directly attributable to each segment.
 
Development expense and administration and other corporate expense disclosed in the reconciliation above are based on a management view and do not equal the amounts under the corresponding caption in the Consolidated Income Statements. The differences are mainly due to the fact that the development expense which is attributed to Sybase is included in the Sybase segment expenses, and that our management view focuses on organizational structures and cost centers rather than the classification of cost by functional area.
 
Segment Assets/Liabilities
Segment asset/liability information is not regularly provided to our CODM. Goodwill by reportable segment is disclosed in Note (16).
 
b) Geographic Information
The following tables present revenue by location of customers and information about non-current assets detailed by geographic region. Noncurrent assets comprise goodwill, intangible assets, property, plant, and equipment, tax assets and other nonfinancial assets.
 
Total Revenue by Location of Customers
 
 
€ millions
2011
2010
2009
Germany
2,347
2,195
2,029
Rest of EMEA1)
4,644
4,068
3,614
Total EMEA
6,991
6,263
5,643
 
 
 
 
United States
3,699
3,243
2,695
Rest of Americas
1,392
1,192
925
Total Americas
5,091
4,435
3,620
 
 
 
 
Japan
652
513
476
Rest of Asia Pacific Japan
1,499
1,253
933
Total Asia Pacific Japan
2,151
1,766
1,409
 
 
 
 
SAP Group
14,233
12,464
10,672
 
1) Europe, Middle East, Africa
 
 
 
Software and Software-Related Service Revenue by Location of Customers
 
 
€ millions
2011
2010
2009
Germany
1,726
1,564
1,439
Rest of EMEA1)
3,803
3,319
2,897
Total EMEA
5,529
4,883
4,336
 
 
 
 
United States
2,870
2,497
2,018
Rest of Americas
1,088
930
700
Total Americas
3,958
3,427
2,718
 
 
 
 
Japan
579
448
404
Rest of Asia Pacific Japan
1,253
1,036
740
Total Asia Pacific Japan
1,832
1,484
1,144
 
 
 
 
SAP Group
11,319
9,794
8,198
 
1) Europe, Middle East, Africa
 
 
 
Software Revenue by Location of Customers
 
 
€ millions
2011
2010
2009
Total EMEA 1)
1,774
1,471
1,304
Total Americas
1,482
1,247
855
Total Asia Pacific Japan
715
547
449
 
 
 
 
SAP Group
3,971
3,265
2,607
 
1) Europe, Middle East, Africa
 
 
 
Non-Current Assets
 
 
€ millions
2011
2010
Germany
2,162
1,896
Rest of EMEA1)
5,537
4,808
Total EMEA
7,699
6,704
 
 
 
United States
4,513
5,565
Rest of Americas
96
60
Total Americas
4,609
5,625
 
 
 
Japan
12
4
Rest of Asia Pacific Japan
196
117
Total Asia Pacific Japan
208
121
 
 
 
SAP Group
12,516
12,450
 
1) Europe, Middle East, Africa
 
 
 
For information about the breakdown of our full-time equivalent employee numbers by region, see Note (8).