SAP SE / Key word(s): Final Results/Preliminary Results
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SAP Announces Preliminary Fourth Quarter and Full Year 2014 Results
- Cloud Business Surges - Non-IFRS Cloud Subscription and Support Revenue Accelerated to 72% in Fourth Quarter, Increased 45% in Full Year, Achieving Guidance
- Strong Cloud Billings - Non-IFRS Calculated Cloud Billings Increased 115% in Fourth Quarter
- Higher Revenue Share from More Predictable Cloud & Support Revenue
- Software and Software-Related Service Revenue Guidance Achieved Despite the Accelerated Shift from Upfront to More Ratable Revenue
- Operating Profit Guidance Achieved Even While Significantly Expanding the Company's Cloud Delivery Capabilities
- Concur Close Expands World's Largest Business Network into US$1.2 Trillion Corporate Travel Market
WALLDORF, Germany - January 12, 2015 - After an initial review of its fourth quarter 2014 performance, SAP SE (NYSE: SAP) today announced its preliminary financial results for the fourth quarter and full year ended December 31, 2014.
For the full year 2014, SAP delivered exceptionally strong growth in the cloud and continues to lead in this industry-wide transformation. Achieving guidance, full year non-IFRS cloud subscriptions and support revenue increased 45% at actual and constant currencies to EUR1.10 billion . The company also showed solid software and software-related service revenue performance despite the accelerated shift from upfront to more ratable revenue. Non-IFRS software and software-related service revenue grew 7% at constant currencies (6% at actual currencies to EUR14.87 billion) achieving the full year target for 6% - 8% growth at constant currencies. Non-IFRS operating profit increased by 3% at constant currencies to EUR5.63 billion (3% at actual currencies to EUR5.64 billion), achieving the full year outlook of EUR5.6 - EUR5.8 billion at constant currencies.
With fourth quarter non-IFRS cloud subscriptions and support revenue increasing 59% year-over-year at constant currencies (72% at actual currencies), SAP is the fastest growing enterprise cloud company at scale . The annual cloud revenue run rate now exceeds EUR1.7 billion  or $2.0 billion . Non-IFRS calculated cloud billings increased 115% (87% at constant currencies) in the fourth quarter. Non-IFRS deferred cloud subscriptions and support revenue was EUR729 million as of December 31, 2014, a year-over-year increase of 63% (45% at constant currencies) .
SAP HANA, the platform for real-time business applications, had another great quarter and continues to be a major growth engine for SAP. Customer adoption this quarter was once again a highlight.
FINANCIAL HIGHLIGHTS - Fourth Quarter 2014
All 2014 figures in this release are approximate due to the preliminary nature of the announcement.
Fourth Quarter 2014(1)
IFRS Non-IFRS (2)
EUR billion, unless Q4 Q4 % Q4 Q4 % % change otherwise stated 2014 2013 cha- 2014 2013 cha- const. nge nge curr.
Cloud subscriptions and
support 0.35 0.21 68% 0.36 0.21 72% 59% Software 1.87 1.90 -2% 1.87 1.90 -2% -5% Support 2.51 2.27 11% 2.51 2.27 10% 8% Software and support 4.37 4.17 5% 4.37 4.18 5% 2% Software and software-
related service revenue 4.72 4.38 8% 4.73 4.39 8% 5% Total revenue 5.46 5.11 7% 5.47 5.11 7% 4% Operating profit 1.75 1.80 -3% 2.13 2.10 1% -2% Operating margin (in %) 32.1 35.3 -3.2pp 38.9 41.0 -2.1pp -2.3pp
(1) All figures are preliminary and unaudited.
(2) For a detailed description of SAP's non-IFRS measures see Explanation of Non-IFRS Measures online
FINANCIAL HIGHLIGHTS - Full Year 2014
Full Year 2014(1)
EUR billion, unless FY FY % FY FY % % change otherwise stated 2014 2013 cha- 2014 2013 cha- const. nge nge curr.
Cloud subscriptions and
support 1.09 0.70 56% 1.10 0.76 45% 45% Software 4.40 4.52 -3% 4.40 4.52 -3% -3% Support 9.37 8.74 7% 9.37 8.76 7% 8% Software and support 13.77 13.25 4% 13.77 13.28 4% 5% Software and software-
related service revenue 14.85 13.95 6% 14.87 14.03 6% 7% Total revenue 17.56 16.82 4% 17.58 16.90 4% 5% Operating profit 4.33 4.48 -3% 5.64 5.48 3% 3% Operating margin (%) 24.7 26.6 -2.0pp 32.1 32.4 -0.4pp -0.7pp
1) All figures are preliminary and unaudited.
2) For a detailed description of SAP's non-IFRS measures see Explanation of Non-IFRS Measures online.
The company will report its fourth quarter and full year 2014 results on January 20th, including the outlook for 2015.
 For the full year 2014, Fieldglass contributed EUR50 million and Concur contributed EUR45 million to SAP's Non-IFRS cloud subscriptions and support revenue at constant currencies, representing a 13 pp contribution to SAP's respective full year 2014 growth rate.
 Compared to SAP's peer group companies with an enterprise software annual cloud revenue run rate above EUR1 billion.
 The annual revenue run rate is the fourth quarter 2014 non-IFRS cloud subscriptions and support revenue (EUR360 million) plus non-IFRS cloud-related professional services and other service revenue (EUR69 million) multiplied by 4.
 Translated into USD for reader's convenience based on $/EUR exchange rate of $1.21/EUR1.00 at the end of the fourth quarter 2014.
 Calculated billings is the total of a period's cloud subscriptions and support revenue and of the respective period's change in the deferred cloud subscription and support revenue balance. In the fourth quarter 2014 Fieldglass contributed EUR19 million and Concur contributed EUR45 million to SAP's Non-IFRS cloud subscription and support revenue at constant currencies. The contribution from Concur to Non-IFRS deferred cloud subscription and support revenue at December 4th, 2014, the closing of Concur, was EUR61 million (IFRS: EUR 42 million) and at December 31st, 2014 was EUR71 million (IFRS: EUR 62 million).
Information and Explanation of the Issuer to this News:
'In 2014 we continued to deliver on our winning growth strategy. We are the fastest growing enterprise cloud business at scale with the most users in the world. SAP HANA is delivering massive simplification for our customers,' said Bill McDermott, CEO of SAP. 'With the wide-spread adoption of the SAP HANA platform, 2015 is all about accelerating the introduction of next generation applications on HANA and scaling the world's largest Business Network. The roadmap for our customers and ever expanding ecosystem to Run Simple couldn't be more clear.'
'In 2014, we achieved a solid 7% growth in non-IFRS software and software-related service revenue at constant currencies - in line with our full-year outlook range despite less upfront and significantly more ratable new business,' said Luka Mucic, CFO of SAP. 'Operating profit also increased year over year even as we stepped up investments in the cloud in response to higher than expected demand for our new cloud offerings. With the powerful shift to the cloud and our growing support revenues we are building a larger, more predictable business over the long term.'
CALCULATED CLOUD BILLINGS
The following table presents the calculated cloud billings metric which we define as the total of a period's cloud subscription and support revenue and of the respective period's change in the deferred cloud subscription and support revenue balance. The table also reconciles the non-IFRS calculated cloud billings metric (including our non-IFRS at constant currency metric) to the respective IFRS based calculated cloud billings metric.'
For the three months ended December 31
EUR millions, unless
otherwise stated 2014
Non-IFRS Cur- Constant rency Currency IFRS Adj.* Non-IFRS* Impact** ** Cloud subscriptions and
support 349 10 360 -26 334 Closing balance deferred
cloud subscriptions and
support 719 10 729 -65 664 Opening balance deferred
cloud subscriptions and
support 498 0 498 -32 466 Change in deferred cloud
subscriptions and support 222 10 231 -34 198 Calculated cloud billings 571 20 591 -59 532
(2014 vs. 2013, in %) 107% 115% 87%
Non-IFRS Currency Constant IFRS Adj.* Non-IFRS* Impact** Currency** 208 1 210 0 210 443 4 447 9 457 376 6 382 0 382 68 -2 66 9 75 276 0 276 9 285
* Adjustments in the revenue and deferred revenue line items are for cloud subscriptions and support revenue, and other similarly recurring revenues that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules. ** Constant currency revenue figures are calculated by translating revenue of the current period using the average exchange rates from the previous year's respective period instead of the current period. Constant currency deferred revenue balances are calculated by translating the current period's opening and closing deferred revenue balances as well as the comparative period's closing deferred revenue balance using the opening exchange rates of the comparative period.
Due to rounding, numbers may not add up precisely.
2014 revenue and profit figures include the full revenue and profit from hybris and the revenue and profit from Concur and Fieldglass since their acquisition dates of December 4 and May 2, respectively. The comparative numbers for 2013 do not include Concur or Fieldglass and hybris was included from August 1, 2013.
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.
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device - SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 263,000 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as 'anticipate,' 'believe,' 'estimate,' 'expect,' 'forecast,' 'intend,' 'may,' 'plan,' 'project,' 'predict,' 'should' and 'will' and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP's future financial results are discussed more fully in SAP's filings with the U.S. Securities and Exchange Commission ('SEC'), including SAP's most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.
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