Slide 1: Third Quarter and First Nine Months 2020 Financial Highlights
Third Quarter and First Nine Months 2020 Financial Highlights SAP SE October 26, 2020
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 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,” “pro
Slide 3: Third Quarter Financial Performance
THIRD QUARTER FINANCIAL PERFORMANCE SUCCESSFUL NAVIGATION THROUGH CHALLENGING ENVIRONMENT Cloud and Software Cloud Revenue Total Revenue Operating Profit Revenue in € millions in € millions in € millions in € millions IFRS Non-IFRS IFRS Non-IFRS IFRS Non-IFRS IFRS Non-IFRS 1,984 1,984 5,544 5,544 6,
Slide 4: Third Quarter 2020 - Other Financial and Non-Financial Highlights
THIRD QUARTER 2020 - OTHER FINANCIAL AND NON-FINANCIAL HIGHLIGHTS STRONG DOUBLE-DIGIT GROWTH IN EPS AND CASH FLOW Current cloud backlog up 16% at constant currencies to €6.6 billion Non-IFRS cloud gross margin up 0.7pp to 69.7% IFRS Operating margin down 2.2pp to 22.5% | Non-IFRS up 1.3pp to 31.9% a
Slide 5: First Nine Months 2020 – Key Performance Metrics
FIRST NINE MONTHS 2020 – KEY PERFORMANCE METRICS TOTAL REVENUE AND OPERATING PROFIT UP Cloud and Software Cloud Revenue Total Revenue Operating Profit Revenue in € millions in € millions in € millions in € millions IFRS Non-IFRS IFRS Non-IFRS IFRS Non-IFRS IFRS Non-IFRS 6,039 6,041 16,649 16,651 19,
Slide 6: Income Statement Third Quarter
INCOME STATEMENT THIRD QUARTER IFRS Non-IFRS € millions, unless otherwise stated Q3/20 Q3/19 ∆% Q3/20 Q3/19 ∆ % ∆ % at cc Cloud 1,984 1,789 11 1,984 1,807 10 14 Software licenses 714 932 -23 714 932 -23 -19 Software support 2,845 2,907 -2 2,845 2,907 -2 1 Software licenses and support 3,559 3,839 -7
Slide 7: Income Statement First Nine Months 2020
INCOME STATEMENT FIRST NINE MONTHS 2020 IFRS Non-IFRS € millions, unless otherwise stated 9M/20 9M/19 ∆% 9M/20 9M/19 ∆ % ∆ % at cc Cloud 6,039 5,037 20 6,041 5,106 18 19 Software licenses 1,939 2,531 -23 1,939 2,531 -23 -22 Software support 8,671 8,599 1 8,671 8,599 1 2 Software licenses and support
Slide 8: Regional Performance Third Quarter 2020
REGIONAL PERFORMANCE THIRD QUARTER 2020 AMERICAS EMEA APJ Cloud revenue Cloud revenue Cloud revenue +3% +22% +14% +9% cc +24% cc +19% cc Cloud and software revenue Cloud and software revenue Cloud and software revenue -6% +2% -1% 0% cc +3% cc +4% cc Brazil, Canada and Mexico were highlights in cloud
Slide 9: Gross Margin Development
GROSS MARGIN DEVELOPMENT CLOUD GROSS MARGIN CONTINUING POSITIVE TREND Non-IFRS, in percent as reported FY/18 Q1/19 Q2/19 Q3/19 Q4/19 FY/19 Q1/20 Q2/20 Q3/20 Cloud 63.1 69,0 69,5 68.2 69,5 69,7 66,2 67,9 69,3 Intelligent Spend 77.8 78,0 78,1 78,0 78,0 78.1 78,8 79,9 78,3 Private Cloud (IaaS) 12.2 32,
Slide 10: Operating Profit Third Quarter 2020
OPERATING PROFIT THIRD QUARTER 2020 Non-IFRS Total operating expenses | Operating profit (loss) Total revenue • Non-IFRS operating profit (loss) -1% to €2,069m (Q3/19: €2,086m) Q3/19 4,724 2,086 €6,809m +4% to €2,171m at cc • Non-IFRS operating margin +1.0pp to 31.7% (Q3/19: 30.6%) Q3/20 4,466 2,069
Slide 11: Operating Profit First Nine Months 2020
OPERATING PROFIT FIRST NINE MONTHS 2020 Non-IFRS Total operating expenses | Operating profit (loss) Total revenue • Non-IFRS operating profit (loss) +3% to €5,515m (9M/19: €5,368m) 9M/19 14,214 5,368 €19,583m +4% to €5,584m at cc • Non-IFRS operating margin +0.4pp to 27.9% (9M/19: 27.4%) 9M/20 14,28
Slide 12: Cost Ratios Third Quarter 2020
COST RATIOS THIRD QUARTER 2020 €6.5bn Total revenue, Non-IFRS R&D S&M G&A as % of total revenue as % of total revenue as % of total revenue €0.3bn €1.0bn €1.4bn 15.2% 22.0% 4.1% +1.6pp -1.8pp -0.1pp +1.5pp* -1.6pp* -0.1pp* *Non-IFRS at constant currencies © 2020 SAP SE or an SAP affiliate company. A
Slide 13: Cost Ratios First Nine Months 2020
COST RATIOS FIRST NINE MONTHS 2020 €19.8bn Total revenue, Non-IFRS R&D S&M G&A as % of total revenue as % of total revenue as % of total revenue €0.9bn €3.0bn €4.7bn 15.3% 23.9% 4.5% +1.1pp -1.4pp +0.1pp +1.1pp* -1.4pp* +0.1pp* *Non-IFRS at constant currencies © 2020 SAP SE or an SAP affiliate compa
Slide 14: Balance Sheet Condensed
BALANCE SHEET CONDENSED SEPTEMBER 30, 2020 - IFRS Assets Equity and liabilities € millions 9/30/20 12/31/19 € millions 9/30/20 12/31/19 Cash, cash equivalents and other financial assets 7,964 5,611 Trade and other payables 1,279 1,581 Provisions 99 268 Trade and other receivables 5,595 7,908 Other l
Slide 15: Strong Double-Digit Growth in Operating and Free Cash Flow
STRONG DOUBLE-DIGIT GROWTH IN OPERATING AND FREE CASH FLOW FIRST NINE MONTHS 2020 € millions, unless otherwise stated 9M/20 9M/19 ∆ Operating cash flow 5,094 3,317 +54% - Capital expenditure -652 -703 -7% - Payments of lease liabilities -271 -288 -6% Free cash flow 4,171 2,326 +79% Free cash flow in
Slide 16: Net Debt
NET DEBT € millions +5.094 –652 –271 –61 –742 –106 –1.864 –6.889 –8.286 Free Cash Flow +4.171 Net Operating Capital Lease Business Dividends Treasury Other Net Debt Cash Expen- Payments Combi- Shares Debt 12/31/2019 Flow diture nations 9/30/2020 PY: –2.493 +3.317 –703 –288 –6.186 –1.790 +0 –134 –8.2
Slide 17: Additional Outlook Information and Non-IFRS Adjustments
ADDITIONAL OUTLOOK INFORMATION AND NON-IFRS ADJUSTMENTS The Company now expects a full-year 2020 effective tax rate (IFRS) of 27.0% to 28.0% (previous outlook: 28.5% to 29.5%) and an effective tax rate (non-IFRS) of 26.5% to 27.5% (previous outlook: 27.5% to 28.5%) Actual Amounts Actual Amounts Est.
Slide 18: 2020 Outlook
2020 OUTLOOK REDUCED REVENUE, RESILIENT PROFIT, INCREASED CASH FLOW 2019 Actuals (Non-IFRS) 2020 Outlook (Non-IFRS @cc) Cloud revenue Cloud revenue Operating cash flow €7.01bn in a range of €8.0 – 8.2bn [prev. €8.3 – 8.7bn] approx. €6.0bn [prev. above €5.0bn] Growth: 14% to 17% Cloud and software re
Slide 19: Expected Currency Impact 2020
EXPECTED CURRENCY IMPACT 2020 THIRD QUARTER AND REST OF THE YEAR Expected Currency Impact 2020 Based on September 2020 Level for the Rest of the Year in percentage points Q4 FY Cloud Revenue -6pp to -4pp -3pp to -1pp Cloud and software -5pp to -3pp -3pp to -1pp Operating profit -5pp to -3pp -4pp to
Slide 20: Appendix
Appendix INTERNAL
Slide 21: SAP S/4HANA Customer Count
SAP S/4HANA CUSTOMER COUNT BASED ON UPDATED DEFINITION >15,100 >14,600 ~14,100 >13,800 >12,600 >12,000 ~11,500 >11,100 >10,000 >9,500 ~8,900 >8,500 ~7,500 >6,900 ~6,400 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Main categories added include Digital Sup
Slide 22: Key Cloud Metrics Third Quarter
KEY CLOUD METRICS THIRD QUARTER All figures are Non-IFRS and growth rates at constant currencies unless otherwise stated Global Cloud Applications Total Cloud Revenue Current Cloud Backlog1 Commerce2 Subscribers +14% +16% >$4.1 trillion ~230m €1,984m €6.60bn Concur – Qualtrics – Number of end users
Slide 23: Third Quarter and First Nine Months 2020 Financial Highlights
Third Quarter and First Nine Months 2020 INTERNAL Financial Highlights SAP SE October 26, 2020