Slide 1: Second Quarter and Half Year 2020 Financial Highlights
Second Quarter and Half Year 2020 Financial Highlights SAP SE July 27, 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: SAP Resilient Amid COVID-19 Crisis
SAP RESILIENT AMID COVID-19 CRISIS OPERATING PROFIT AND OPERATING MARGIN UP STRONGLY 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 2,044 2,044 5,709 5,709 6,743 6
Slide 4: Other Financial and Non-Financial Highlights
OTHER FINANCIAL AND NON-FINANCIAL HIGHLIGHTS SECOND QUARTER 2020 Software licenses: -18% (-18% cc) to €0.77bn – strong sequential improvement compared to first quarter Current cloud backlog: +20% (+21% cc) to €6.65bn Cloud gross margin (non-IFRS): +1.6 pp to 69.5% Operating margin (non-IFRS): + 1.8%
Slide 5: First Six Months 2020 – Key Performance Metrics
FIRST SIX 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 4,055 4,057 11,106 11,107 13,2
Slide 6: Income Statement Second Quarter 2020
INCOME STATEMENT SECOND QUARTER 2020 IFRS Non-IFRS € millions, unless otherwise stated Q2/20 Q2/19 ∆% Q2/20 Q2/19 ∆ % ∆ % at cc Cloud 2,044 1,692 21 2,044 1,717 19 18 Software licenses 773 948 -18 773 948 -18 -18 Software support 2,892 2,854 1 2,892 2,854 1 2 Software licenses and support 3,665 3,80
Slide 7: Income Statement First Six Months 2020
INCOME STATEMENT FIRST SIX MONTHS 2020 IFRS Non-IFRS € millions, unless otherwise stated H1/20 H1/19 ∆% H1/20 H1/19 ∆ % ∆ % at cc Cloud 4,055 3,247 25 4,057 3,299 23 22 Software licenses 1,224 1,599 -23 1,224 1,599 -23 -23 Software support 5,826 5,692 2 5,826 5,692 2 2 Software licenses and support
Slide 8: Regional Performance
REGIONAL PERFORMANCE SECOND QUARTER 2020 AMERICAS EMEA APJ Cloud revenue Cloud revenue Cloud revenue +14% +29% +19% +13% cc +29% cc +18% cc Cloud and software revenue Cloud and software revenue Cloud and software revenue +4% +3% +4% +3% cc +3% cc +4% cc Canada and Mexico were highlights Japan, Singa
Slide 9: Gross Margin Development
GROSS MARGIN DEVELOPMENT CLOUD GROSS MARGIN UP 1.6 PERCENTAGE POINTS YOY Non-IFRS, in percent as reported FY/18 Q1/19 Q2/19 Q3/19 Q4/19 FY/19 Q1/20 Q2/20 Cloud 63.1 69,0 69,5 68.2 69,5 66,2 67,9 69,3 Intelligent Spend 77.8 78,0 78,1 78,0 78,0 78.1 79,9 78,8 Private Cloud (IaaS) 12.2 32,0 22,4 25,3 3
Slide 10: Operating Profit Second Quarter 2020
OPERATING PROFIT SECOND QUARTER 2020 Non-IFRS Total operating expenses | Operating profit (loss) Total revenue • Non-IFRS operating profit (loss) +8% to €1,964m (Q2/19: €1,816m) Q2/19 4,840 1,816 €6,656m +7% to €1,951m at cc • Non-IFRS operating margin +1.8pp to 29.1% (Q2/19: 27.3%) Q2/20 4,780 1,96
Slide 11: Operating Profit First Six Months 2020
OPERATING PROFIT FIRST SIX MONTHS 2020 Non-IFRS Total operating expenses | Operating profit (loss) Total revenue • Non-IFRS operating profit (loss) +5% to €3,446m (HY1/19: €3,283m) HY1/19 9,490 3,283 €12,773m +4% to €3,413m at cc • Non-IFRS operating margin +0.3pp to 26.0% (HY1/19: 25.7%) HY1/20 9,8
Slide 12: Cost Ratios Second Quarter 2020
COST RATIOS SECOND QUARTER 2020 €6.7bn 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 €1.6bn 15.1% 23.3% 4.6% +1.3pp -2.7pp +0.2pp +1.3pp* -2.6pp* +0.2pp* *Non-IFRS at constant currencies © 2020 SAP SE or an SAP affiliate company.
Slide 13: Cost Ratios First Six Months 2020
COST RATIOS FIRST SIX MONTHS 2020 €13.3bn Total revenue, Non-IFRS R&D S&M G&A as % of total revenue as % of total revenue as % of total revenue €0.6bn €2.0bn €3.3bn 15.4% 24.8% 4.7% +0.9pp -1.3pp +0.2pp +0.9pp* -1.2pp* +0.2pp* *Non-IFRS at constant currencies © 2020 SAP SE or an SAP affiliate compan
Slide 14: Balance Sheet Condensed
BALANCE SHEET CONDENSED JUNE 30, 2020 - IFRS Assets Equity and liabilities € millions 6/30/20 12/31/19 € millions 6/30/20 12/31/19 Cash, cash equivalents and other financial assets 7,624 5,612 Trade and other payables 1,311 1,581 Provisions 105 268 Trade and other receivables 6,584 7,908 Other liabi
Slide 15: Sharp Increase in Operating and Free Cash Flow
SHARP INCREASE IN OPERATING AND FREE CASH FLOW FIRST SIX MONTHS 2020 € millions, unless otherwise stated HY1/20 HY1/19 ∆ Operating cash flow 3,772 2,679 +41% - Capital expenditure -497 -539 -8% - Payments of lease liabilities -156 -185 -15% Free cash flow 3,119 1,956 +59% Free cash flow in percent o
Slide 16: Net Debt
NET DEBT € millions +3.772 –497 –156 –47 –442 +65 –1.864 –7.454 –8.286 Free Cash Flow +3.119 Free Cash Flow: +3.119 Net Operating Capital Lease Business Dividends Treasury Other Net Debt Cash Expen- Payments Combi- Shares Debt 12/31/2019 Flow diture nations 6/30/2020 PY: –2.493 +2.679 –539 –185 –6.1
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 28.5% to 29.5% (previous outlook: 27.0% to 28.0%) and an effective tax rate (non-IFRS) of 27.5% to 28.5% (previous outlook: 26.5% to 27.5%) Actual Amounts Actual Amounts Est.
Slide 18: 2020 Revenue and Profit Outlook Confirmed
2020 REVENUE AND PROFIT OUTLOOK CONFIRMED 2019 Actuals (Non-IFRS) 2020 Outlook (Non-IFRS @cc) 2023 Ambition (Non-IFRS) Cloud Revenue Cloud Revenue More than triple €7.01bn in a range of €8.3 – €8.7bn Cloud Revenue Growth: 18.0% to 24.0% Cloud & Software Revenue More than €35.0bn €23.09bn Cloud and S
Slide 19: Expected Currency Impact 2020
EXPECTED CURRENCY IMPACT 2020 THIRD QUARTER AND REST OF THE YEAR Expected Currency Impact 2020 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 -3pp to -1pp -2pp to 0pp Operating profit -2pp to 0pp -1pp to +1pp ©
Slide 20: Appendix
Appendix INTERNAL
Slide 21: SAP S/4HANA Customer Count
SAP S/4HANA CUSTOMER COUNT BASED ON UPDATED DEFINITION >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 Main categories added include Digital Supply Chain Mana
Slide 22: Key Cloud Metrics
KEY CLOUD METRICS SECOND 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 +18% +21% >$3.8 trillion ~221m €2,044m €6.65bn Concur – Qualtrics – Number of end users
Slide 23: Second Quarter and Half Year 2020 Financial Highlights
Second Quarter and Half Year 2020 INTERNAL Financial Highlights SAP SE July 27, 2020