Slide 1: Fourth-Quarter & Full-Year 2020 Results Presentation
January 29, 2021 Fourth-Quarter & Full-Year 2020 Results Presentation Christian Klein Luka Mucic CEO CFO
Slide 2: Stefan Gruber, Investor Relations
Stefan Gruber Investor Relations
Slide 3: 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 4: Christian Klein, CEO
Christian Klein CEO
Slide 5: Full Year 2020: Topline Exceeds, Profit Hits Upper End of Revised Outlook
Full Year 2020: Topline Exceeds, Profit Hits Upper End of Revised Outlook Cloud revenue Cloud and software revenue +27% (@cc) in € millions in € millions SaaS/PaaS cloud revenue growth excl. Intelligent Spend IFRS Non-IFRS @cc IFRS Non-IFRS @cc 8,080 8,241 23,228 23,722 72% (+4.4 ppt. @cc) + 17% + 1
Slide 6: Relentless focus on customer value: Q4 highlights and TY customer metrics
Relentless focus on customer value: Q4 highlights and TY customer metrics Q4 Competitive Wins / Go-lives Customer metrics TY2020 S/4 >25,000 Net new customers >35,000 Go-lives CX HXM ~16,000 (+16%) S/4HANA Customers Other © 2021 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC 6
Slide 7: Executing our Strategy to reinvent how businesses run
Executing our Strategy to reinvent how businesses run Relentless focus on customer value to help ▪ NET PROMOTER SCORE INCREASE: +10 pts the world run better & improve people's lives ▪ COVID-19 VACCINE DISTRIBUTION powered by SAP ▪ “RISE WITH SAP” LAUNCHED: Our new offering for Accelerating our custo
Slide 8: COVID-19 contact tracing, vaccine production & distribution supported by SAP
COVID-19 contact tracing, vaccine production & distribution supported by SAP Examples only CONTACT TRACING VACCINE PRODUCTION DISTRIBUTION >25m 17/20 Corona downloads are helping to curb top 20 global vaccine has chosen SAP solutions to plan Warn App the COVID-19 pandemic manufacturers run SAP and m
Slide 9: Executing our Strategy to reinvent how businesses run
Executing our Strategy to reinvent how businesses run Relentless focus on customer value to help ▪ NET PROMOTER SCORE INCREASE: +10 pts the world run better & improve people's lives ▪ COVID-19 VACCINE DISTRIBUTION powered by SAP ▪ “RISE WITH SAP” LAUNCHED: Our new offering for Accelerating our custo
Slide 10: RISE with SAP: Business Transformation as a Service
RISE with SAP: Business Transformation as a Service Intelligent ENTERPRISE BUSINESS TOOLS & I N F R A S T R U C T U R E S A P S A P S A P S / 4 H A N A PROCESS SERVICES & O P E R A T I O N S B U S I N E S S B U S I N E S S C L O U D INTELLIGENCE T E C H N O L O G Y N E T W O R K P L A T F O R M Star
Slide 11: Signavio acquisition: Improve business processes, adapt business models
acquisition: Improve business processes, adapt business models DISCOVER & RECOMMEND DESIGN & SIMULATE IMPROVE & ROLL-OUT Identify potential based on Preview future processes to take Execute actions to realize business benchmarks intelligent decisions value (implement S/4, RPA, etc.) © 2021 SAP SE or
Slide 12: Executing our Strategy to reinvent how businesses run
Executing our Strategy to reinvent how businesses run Relentless focus on customer value to help ▪ NET PROMOTER SCORE INCREASE: +10 pts the world run better & improve people's lives ▪ COVID-19 VACCINE DISTRIBUTION powered by SAP ▪ “RISE WITH SAP” LAUNCHED: Our new offering for Accelerating our custo
Slide 13: Microsoft Partnership: Teams integration with first use cases in Q2 2021
Microsoft Partnership: Teams integration with first use cases in Q2 2021 Expanded partnership in 2021 Integration of Microsoft Teams and SAP solutions to facilitate remote collaboration and enable the frictionless enterprise Simplification of the move from on-premise editions of SAP ERP to SAP S/4HA
Slide 14: Qualtrics: Independence to capture full potential, strong product bundles with SAP
Qualtrics: Independence to capture full potential, strong product bundles with SAP valuation increase Shift the market narrative from LoB feature comparisons to smart end-to-end journeys since acquisition HUMAN EXPERIENCE MANAGEMENT SMART SPEND COMMERCE-FIRST EXPERIENCE (Hire to Retire) (Travel & Ex
Slide 15: We will continue to execute our strategy with a strengthened team
We will continue to execute our strategy with a strengthened team Christian Klein Chief Executive Officer New as of New since 03/2021 01/2021 Julia White Sabine Bendiek Chief Marketing & Chief People Officer & Solutions Officer Labor Relations Director New as of 02/2021 Scott Russell Luka Mucic Cust
Slide 16: Luka Mucic, CFO
Luka Mucic CFO
Slide 17: Topline exceeds revised full year outlook; Operating profit and Free Cash Flow up strongly
Topline exceeds revised full year outlook Operating profit and Free Cash Flow up strongly Cloud and software Cloud revenue Total revenue Operating profit revenue in € millions in € millions in € millions in € millions IFRS Non-IFRS @cc IFRS Non-IFRS @cc IFRS Non-IFRS @cc IFRS Non-IFRS @cc 8,080 8,24
Slide 18: Regional revenue: Solid performance across all regions
Regional revenue Solid performance across all regions AMERICAS EMEA APJ Q4/20 FY/20 Q4/20 FY/20 Q4/20 FY/20 Cloud revenue Cloud revenue Cloud revenue +3% +10% +11% +23% +17% +18% +11% cc +13% cc +14% cc +25% cc +22% cc +21% cc Cloud and software revenue Cloud and software revenue Cloud and software
Slide 19: Margin development
Margin development Non-IFRS at constant currencies as reported FY/19 Q1/20 Q2/20 Q3/20 Q4/20 FY/20 Cloud 68.2 69,3 69,3 69,7 69,8 69.5 Intelligent Spend Group 78.1 78,7 79,7 78,3 78,9 78.9 Private Cloud (IaaS) 28.9 30,7 35,6 33,0 35,9 33.8 Public Cloud (SaaS/PaaS) 68.5 70,3 69,5 71,4 70,7 70.5 Softw
Slide 20: Tax rate, EPS, Cash Flow & CapEx
Tax rate, EPS, Cash Flow & CapEx EFFECTIVE TAX RATE Actuals FY/20 IFRS tax rate came in below and Non-IFRS tax rate • IFRS: 26.9% | +0.2pp at the lower end of our tax range guidance • Non-IFRS: 26.5% | +0.3pp EPS Actuals FY/20 • IFRS: €4.35 | +56% Reflecting a strong contribution from Sapphire Ventu
Slide 21: Outlook 2021
Outlook 2021 2020 Actuals (Non-IFRS) 2021 Outlook (Non-IFRS @cc) Cloud Revenue Cloud Revenue Operating Cash Flow €8.09bn in a range of €9.1 – 9.5bn approx. €6.0bn Growth: 13.0% to 18.0% Cloud & Software Revenue Free Cash Flow €23.23bn Cloud and Software Revenue above €4.5bn in a range of €23.3 – 23.
Slide 22: Q&A
Q&A
Slide 23: Appendix
Appendix
Slide 24: Q4 2020: Strong year end performance
Q4 2020: Strong year end performance 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 2,041 2,044 6,579 6,582 7,538 7,541 2,655 2,768 +8% +7% -4% -4% -6% -6% +26% -3
Slide 25: Income statement: Fourth quarter
Income statement: Fourth quarter IFRS Non-IFRS € millions, unless otherwise stated Q4/20 Q4/19 ∆% Q4/20 Q4/19 ∆% ∆ % at cc Cloud 2,041 1,896 8 2,044 1,907 7 13 Software licenses 1,703 2,002 -15 1,703 2,002 -15 -11 Software support 2,835 2,948 -4 2.835 2,948 -4 0 Software licenses and support 4,538 4
Slide 26: Income statement: Full year 2020
Income statement: Full year 2020 IFRS Non-IFRS € millions, unless otherwise stated FY/20 FY/19 ∆% FY/20 FY/19 ∆% ∆ % at cc Cloud 8,080 6,933 17 8,085 7,013 15 18 Software licenses 3,642 4,533 -20 3,642 4,533 -20 -17 Software support 11,506 11,547 0 11,506 11,548 0 1 Software licenses and support 15,
Slide 27: Gross margin development
Gross margin development Non-IFRS, in percent as reported FY/18 Q1/19 Q2/19 Q3/19 Q4/19 FY/19 Q1/20 Q2/20 Q3/20 Q4/20 FY/20 Cloud 63.1 69,0 69,5 68.2 69,3 69,5 69,7 70,0 69.6 66,2 67,9 Intelligent Spend 77.8 78,0 78,1 78,0 78,0 78.1 78,8 79,9 78,3 79,2 78.9 Private Cloud (IaaS) 12.2 28.9 36,0 36,9 3
Slide 28: Operating profit: Fourth quarter 2020
Operating profit: Fourth quarter 2020 IFRS Total operating expenses | Operating profit (loss) Total revenue • IFRS operating profit (loss) +26% to €2,655m (Q4/19: €2,102m) Q4/19 5,938 2,102 €8,041m • IFRS operating margin +9.1pp to 35.2% (Q4/19: 26.1%) Q4/20 4,884 2,655 €7,538m Non-IFRS Total operat
Slide 29: Operating profit: Full year 2020
Operating profit: Full year 2020 IFRS Total operating expenses | Operating profit (loss) Total revenue • IFRS operating profit (loss) +48% to €6,621m (FY/19: €4,473m) FY/19 23,081 4,473 €27,553m • IFRS operating margin +8.0pp to 24.2% (FY/19: 16.2%) FY/20 20,717 6,621 €27,338m Non-IFRS Total operati
Slide 30: Cost ratios: Fourth quarter 2020
Cost ratios: Fourth quarter 2020 €7.5bn Total revenue, Non-IFRS R&D S&M G&A as % of total revenue as % of total revenue as % of total revenue €0.3bn €1.1bn €1.6bn 14.8% 21.7% 4.0% +1.5pp -1.0pp +0.3pp +1.3pp* -0.8pp* +0.3pp* *Non-IFRS at constant currencies © 2020 SAP SE 2021 SAP SE or or an an SAP
Slide 31: Cost ratios: Full year 2020
Cost ratios: Full year 2020 €27.3bn Total revenue, Non-IFRS R&D S&M G&A as % of total revenue as % of total revenue as % of total revenue €1.2bn €4.2bn €6.4bn 15.2% 23.3% 4.4% +1.2pp -1.2pp +0.2pp +1.2pp* -1.2pp* +0.2pp* *Non-IFRS at constant currencies © 2020 SAP SE 2021 SAP SE or or an an SAP SAP
Slide 32: Balance sheet condensed: December 31, 2020 – IFRS
Balance sheet condensed: December 31, 2020 – IFRS Assets Equity and liabilities € millions 12/31/20 12/31/19 € millions 12/31/20 12/31/19 Cash, cash equivalents and other financial assets 6,946 5,611 Trade and other payables 1,213 1,581 Provisions 73 247 Trade and other receivables 6,593 7,908 Other
Slide 33: Record year for cash flow in 2020
Record year for cash flow in 2020 € millions, unless otherwise stated FY/20 FY/19 ∆ Operating cash flow 7,193 3,496 +106% - Capital expenditure -816 -817 0% - Payments of lease liabilities -378 -403 -6% Free cash flow 6,000 2,276 +164% Free cash flow in percent of total revenue 22 8 +14pp Free cash
Slide 34: Net debt
Net debt € millions +7.193 –816 –378 –659 –1.864 –1.492 –202 –6.503 –8.286 Free Cash Flow +6.000 Net Operating Capital Lease Business Dividends Treasury Other Net Debt Cash Expen- Payments Combi- Shares Debt 12/31/2019 Flow diture nations 12/31/2020 PY: –2.493 +3.496 –817 –403 –6.215 –1.790 +0 –64 –
Slide 35: Additional outlook information and Non-IFRS adjustments
Additional outlook information and Non-IFRS adjustments SAP expects a full-year 2021 effective tax rate (IFRS) of 27.5% to 28.5% (2020: 26.9%) and an effective tax rate (non-IFRS) of 24.5% to 25.5% (2020: 26.5%) Actual Amounts Actual Amounts Est. Amounts Non-IFRS adjustments FY/19 FY/20 for FY/21 €0
Slide 36: Expected currency impact 2021
Expected currency impact 2021 Expected Currency Impact 2021 Based on December 2020 Level for the Rest of the Year in percentage points Q1 FY Cloud Revenue -6pp to -8pp -3pp to -5pp Cloud and software -5pp to -7pp -2pp to -4pp Operating profit -7pp to -9pp -2pp to -4pp © 2020 SAP SE 2021 SAP SE or or
Slide 37: SAP S/4HANA customer count
SAP S/4HANA customer count >16,000 >15,100 >14,600 >13,800 ~14,100 >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 Q4/20 Main categories added include Digital Supply Chain Mana
Slide 38: Key cloud metrics: Fourth quarter
Key cloud metrics: Fourth 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 +13% +14% >$4.1 trillion ~238m €2,044m €7.15bn Concur – Qualtrics – Number of end user