Unless otherwise stated, all figures in this statement are
based on SAP group results from continuing operations.
- Cloud revenue up 24% and up 22% at constant currencies, up 1
percentage point sequentially. S/4HANA cloud revenue up 77% and up
75% at constant currencies
- Current cloud backlog up 25%, both at nominal and constant
currencies, a sequential growth improvement of 1 percentage
point
- IFRS cloud gross profit up 28%, non-IFRS cloud gross profit up
28% and up 27 % at constant currencies fueling double-digit
non-IFRS operating profit growth
- IFRS operating profit down 45%, non-IFRS operating profit up
12% and up 12% at constant currencies
- 2023 outlook updated to reflect the expected Qualtrics
divestiture. SAP reaffirms outlook for continuing operations
including anticipated acceleration of topline and operating profit
growth
- In Q1 2023, the Qualtrics consolidated group ("Qualtrics") has
been classified as discontinued operations under IFRS 5.
Consequently, the contribution from Qualtrics is not included in
the reporting of SAP's continuing operations. See section (N)
Discontinued Operations. For more information on changes in SAP's
presentation and disclosures please see recorded info session
https://www.sap.com/investors/en/reports/reporting-framework.html.
WALLDORF, Germany, April 21,
2023 /PRNewswire/ -- SAP SE (NYSE: SAP) today
announced its financial results for the first quarter ended
March 31, 2023.
Christian Klein, CEO: "We
have entered a powerful new phase in our strategic transformation,
with topline and bottom-line results clearly demonstrating the
tipping point we passed in the fourth quarter 2022. Our cloud
momentum continues at a fast pace which is contributing to our
strong revenue and double-digit non-IFRS operating profit growth
this quarter."
Dominik Asam, CFO: "The
year is off to a good start. I am excited to have joined an
organization which is delivering and staying on the right track. We
have accelerated topline growth and have already achieved
double-digit non-IFRS operating profit growth in Q1. Our results
set solid groundwork for our full year outlook, thereby pivoting
back to profitable growth in 2023. Saying what we do, and doing
what we say, will continue to be of great importance to us."
Financial Performance
|
Group results at a
glance – First quarter 2023
|
|
IFRS
|
|
Non-IFRS1
|
|
€ million, unless
otherwise stated
|
Q1 2023
|
Q1 2022
|
∆ in %
|
|
Q1 2023
|
Q1 2022
|
∆ in %
|
∆ in %
const.
curr.
|
|
Cloud
revenue
|
3,178
|
2,565
|
24
|
|
3,178
|
2,565
|
24
|
22
|
|
Thereof SAP S/4HANA
Cloud revenue
|
716
|
404
|
77
|
|
716
|
404
|
77
|
75
|
|
Software
licenses
|
276
|
317
|
–13
|
|
276
|
317
|
–13
|
–13
|
|
Software
support
|
2,905
|
2,923
|
–1
|
|
2,905
|
2,923
|
–1
|
–1
|
|
Software licenses and
support revenue
|
3,180
|
3,240
|
–2
|
|
3,180
|
3,240
|
–2
|
–2
|
|
Cloud and software
revenue
|
6,358
|
5,806
|
10
|
|
6,358
|
5,806
|
10
|
8
|
|
Total
revenue
|
7,441
|
6,773
|
10
|
|
7,441
|
6,773
|
10
|
9
|
|
Share of more
predictable revenue (in %)
|
82
|
81
|
1pp
|
|
82
|
81
|
1pp
|
|
|
Operating profit
(loss)
|
803
|
1,471
|
–45
|
|
1,875
|
1,676
|
12
|
12
|
|
Profit (loss) after tax
from continuing operations
|
403
|
1,016
|
–60
|
|
1,254
|
1,171
|
7
|
|
|
Profit (loss) after
tax²
|
509
|
632
|
–19
|
|
1,587
|
1,166
|
36
|
|
|
Earnings per share -
Basic (in €) from continuing operations
|
0.35
|
0.87
|
–60
|
|
1.08
|
1.00
|
8
|
|
|
Earnings per share -
Diluted (in €) from continuing operations
|
0.35
|
0.87
|
–60
|
|
|
|
|
|
|
Earnings per share -
Basic (in €)²
|
0.41
|
0.63
|
–35
|
|
1.27
|
1.00
|
27
|
|
|
Earnings per share -
Diluted (in €)²
|
0.41
|
0.63
|
–35
|
|
|
|
|
|
|
Net cash flows from
operating activities from continuing operations
|
2,311
|
2,465
|
–6
|
|
|
|
|
|
|
Free cash
flow
|
|
|
|
|
1,955
|
2,159
|
–9
|
|
|
Number of employees
(FTE, March 31)
|
105,132
|
104,670
|
0
|
|
|
|
|
|
|
1 For a
breakdown of the individual adjustments see table "Non-IFRS
Adjustments by Functional Areas" in this Quarterly
Statement.
|
|
2 From
continuing and discontinued operations.
|
|
Due to rounding,
numbers may not add up precisely.
|
Financial Highlights1
First Quarter 2023
Current cloud backlog grew by 25% to €11.15 billion and was up
25% at constant currencies, a sequential growth improvement of 1
percentage point. SAP S/4HANA current cloud backlog was up 78% to
€3.42 billion and up 79% at constant currencies.
In the first quarter, cloud revenue was up 24% to €3.18 billion
and up 22% at constant currencies, up 1 percentage point
sequentially. SAP S/4HANA cloud revenue was up 77% to €716 million
and up 75% at constant currencies.
Supported by a few major transactions, software licenses revenue
decreased by a moderate 13% to €276 million and was down 13% at
constant currencies. Cloud and software revenue was up 10% to €6.36
billion and up 8% at constant currencies. Services revenue was up
12% to €1.08 billion and up 11% at constant currencies. Total
revenue was up 10% to €7.44 billion and up 9% at constant
currencies.
The share of more predictable revenue increased by 1 percentage
point to 82% in the first quarter.
Cloud gross profit was up 28% (IFRS) to €2.24 billion, up 28% to
€2.27 billion (non-IFRS), and up 27% (non-IFRS at constant
currencies).
IFRS operating profit decreased 45% to €803 million. The
decrease is mainly driven by the increase in share-based
compensation which reflects the increase in share price over the
first quarter as compared to last year's decline over the same
period. In addition, IFRS operating profit was impacted by
restructuring expenses associated with the targeted restructuring
program, as well as expenses resulting from a provision for
pre-existing regulatory compliance matters (see section (D) Basis
of Non-IFRS Presentation). Non-IFRS operating profit was up 12% to
€1.87 billion and up 12% at constant currencies.
As a result, IFRS basic earnings per share decreased 60% to
€0.35. Non-IFRS earnings per share (basic) increased 8% to €1.08.
The effective tax rate was 40.5% (IFRS) and 28.3% (non-IFRS). For
IFRS, the year-over-year increase mainly resulted from changes in
non-deductible expenses and valuation allowances on deferred tax
assets. For non-IFRS, the changes in non-deductible expenses do not
apply due to respective adjustments of pre-tax figures.
Free cash flow was down 9% mainly due to the impact of sale of
trade receivables in the fourth quarter last year which was
weighing on Q1.
Impact of War in Ukraine
The wind down of our business operations in Russia and Belarus is almost complete. Should the
situation escalate beyond its current scope, our business could
potentially be subject to materially adverse consequences.
Business Highlights
In the first quarter, customers around the globe continued to
choose "RISE with SAP" to drive their end-to-end business
transformations. These customers included BMW Group, DOLCE &
GABBANA, GAMA, GlasfaserPlus, The Government of Manitoba, Henkel, KANSAI PAINT CO, Lingong Heavy Machinery, MLS,
NEC Networks & System Integration Corporation, Pastificio Rana,
Sempra Infrastructure, Sodexo BRS, Sri
Intellectual, Thales Defense & Security Inc, VEM
Conveniência, and Zagis.
Advanced Micro Devices, Air India, Aurobay, FLYING WHALES,
Hengan Group, JFE Steel Corporation, Ourofino Agrociência, REPETCO
Innovations, and Shinsegae International went live on SAP S/4HANA
Cloud in the first quarter.
Key customer wins across SAP's solution portfolio included: A.S.
Watson, BayWa, Berlin Hyp,
Brisanet, Dr. Martens (Airwair International Limited), Envision
Energy, Grupo Estrella Blanca,
Grupo Minero Bacis, Haffner Energy,
HCLTech, Hitachi High-Tech Corporation, N+, NTT DATA Business
Solutions, Lee Kum Kee Sauce Group, SMA Solar Technology, Soleum,
University Hospital Bonn, and Whirlpool Corporation. Numerous
customers have also gone live with SAP solutions, including: Dexco,
DKSH Holding Limited, Larsen & Toubro Limited, and Wipro.
In the first quarter, SAP's cloud revenue performance was robust
across all regions. Brazil,
Germany and India had outstanding cloud revenue growth
while China, Japan, Mexico, the
Netherlands, Switzerland,
and the United States performed
particularly strong.
SAP proposed a dividend of €2.05 per share for fiscal year 2022
representing a year-over-year increase of 5% compared to the
regular dividend paid for fiscal year 2021. The dividend is subject
to shareholder approval at the upcoming AGM scheduled for
May 11, 2023.
On February 1, 2023, SAP and Red
Hat, Inc., the world's leading provider of open-source solutions,
announced an expanded partnership intended to significantly
increase SAP's use of and support for Red Hat Enterprise Linux.
On February 8, SAP announced a
strategic partnership with Merck KGaA, Germany, to jointly drive sustainable business
practice innovation. The partnership is expected to further
accelerate the migration of the systems of Merck KGaA to the cloud
with RISE with SAP, a core element of which is SAP S/4HANA
Cloud.
On February 22, SAP announced that
the Supervisory Board of SAP SE nominated Dr. h. c. Punit Renjen to stand for election as a new
member of the Supervisory Board and proposes Dr. Renjen as the
designated successor to Chairman, Prof. Dr. Hasso Plattner.
On March 2, SAP announced that it
filed the SAP Annual Report on Form 20-F for the year ended
December 31, 2022, with the U.S.
Securities and Exchange Commission (SEC) and that the SAP
Integrated Report 2022 is available and accessible online at
www.sapintegratedreport.com.
On March 8, SAP announced the SAP
Datasphere solution, the next generation of its data management
portfolio. In addition, SAP also introduced strategic partnerships
with industry-leading data and AI companies – Collibra NV,
Confluent Inc., Databricks Inc. and DataRobot Inc.
On March 13, SAP announced that it
agreed to sell all of its 423 million shares of Qualtrics
International Inc. as part of the acquisition of Qualtrics by funds
affiliated with Silver Lake as
well as Canada Pension Plan Investment Board. At a purchase price
of US$18.15 in cash per share, the
transaction corresponds to a Qualtrics equity value of
approximately US$12.5 billion on a
fully diluted basis, representing a 73% premium over the 30-day
average trading price prior to SAP's announcement to explore a sale
(approx. 62% premium relative to the unaffected closing price on
January 25, 2023). SAP's stake will
be acquired for approximately US$7.7
billion. The closing of the transaction is subject to
customary regulatory approvals and closing conditions.
On March 16, SAP announced that it
closed a new sustainability-linked revolving credit facility with a
volume of €3 billion and a tenor of five years plus two one-year
extension options.
On March 21, SAP announced GROW
with SAP, a new offering to help midsize customers adopt cloud ERP
that enables speed, predictability and continuous innovation. It is
a comprehensive offering built on SAP S/4HANA Cloud, public edition
and SAP Business Technology Platform.
On March 31, SAP announced that
the SAP Supervisory Board extended the contracts of Executive Board
Members Julia White, Chief Marketing & Solutions Officer, and
Scott Russell, who leads SAP's
Customer Success organization, for three years until 2027.
Furthermore, Sabine Bendiek, Chief People & Operating Officer
and Labor Relations Director, informed the Supervisory Board that
she will not seek to renew her Executive Board contract. Her
contract ends on December 31,
2023.
Segment Results at a Glance
SAP's reportable segment showed the following performance:
|
Applications,
Technology & Services1
|
Q1
2023
|
|
€ million, unless
otherwise stated
(Non-IFRS)
|
Actual Currency
|
∆ in %
|
∆ in %
Constant
Currency
|
|
SaaS2
|
2,204
|
25
|
23
|
|
PaaS3
|
482
|
47
|
45
|
|
IaaS4
|
200
|
–12
|
–13
|
|
Cloud
revenue
|
2,886
|
24
|
23
|
|
Cloud gross
profit
|
1,990
|
30
|
28
|
|
Segment
revenue
|
7,143
|
9
|
8
|
|
Segment profit
(loss)
|
2,103
|
12
|
12
|
|
SaaS2 (in %)
|
68.8
|
0.3pp
|
0.5pp
|
|
PaaS3 (in %)
|
84.3
|
3.6pp
|
4.1pp
|
|
IaaS4 (in %)
|
33.6
|
6.3pp
|
9.0pp
|
|
Segment margin (in
%)
|
29.4
|
0.7pp
|
0.9pp
|
|
1 Segment
information for comparative prior periods were restated to conform
with the new segment composition.
2 Software
as a service
3 Platform
as a service
4
Infrastructure as a service
|
In the first quarter, segment revenue in AT&S was up 9% to
€7.14 billion year-over-year and up 8% at constant currencies,
primarily due to strong cloud revenue growth, which was supported
by SAP S/4HANA as well as Business Technology Platform. Software
licenses revenue decreased due to the shift to the cloud as more
customers chose our 'RISE with SAP' offering. Segment services
revenue was up 12% to €1.08 billion year-over-year and up 11% at
constant currencies.
Cloud Performance
|
Q1
2023
|
|
€ millions, unless
otherwise stated
(non-IFRS)
|
Actual currency
|
∆ in %
|
∆ in %
Constant currency
|
|
Current Cloud Backlog
|
|
|
|
|
Total
|
11,148
|
25
|
25
|
|
Thereof SAP
S/4HANA
|
3,418
|
78
|
79
|
|
Cloud Revenue
|
|
|
|
|
SaaS1
|
2,496
|
24
|
22
|
|
PaaS2
|
482
|
47
|
45
|
|
IaaS3
|
200
|
–12
|
–13
|
|
Total
|
3,178
|
24
|
22
|
|
Thereof SAP
S/4HANA
|
716
|
77
|
75
|
|
Cloud Gross Profit
|
|
|
|
|
SaaS1
|
1,796
|
25
|
23
|
|
PaaS2
|
406
|
54
|
53
|
|
IaaS3
|
67
|
8
|
16
|
|
Total
|
2,269
|
28
|
27
|
|
Cloud Gross Margin (in %)
|
|
|
|
|
SaaS1 (in %)
|
71.9
|
0.3pp
|
0.5pp
|
|
PaaS2 (in %)
|
84.3
|
3.6pp
|
4.1pp
|
|
IaaS3 (in %)
|
33.6
|
6.3pp
|
9.0pp
|
|
Total
|
71.4
|
2.5pp
|
2.9pp
|
|
1 Software
as a service: SaaS comprises all other offerings which are not
shown as PaaS and IaaS.
|
|
2 Platform
as a service: PaaS includes primarily SAP Business Technology
Platform and SAP Signavio.
|
|
3
Infrastructure as a service: Major portion of IaaS comes from SAP
HANA Enterprise Cloud.
|
|
Due to rounding,
numbers may not add up precisely.
|
|
The first quarter 2023
results were also impacted by other effects. For details, please
refer to the disclosure on page 21 of this document.
|
Business Outlook
Reflecting the expected Qualtrics divestiture, SAP is updating
its full-year 2023 outlook to cover only continuing operations.
Financial Outlook 2023
|
Actual 2022
(continuing
operations)
|
2023 Outlook
(as of January 26)
|
Adjustment for
discontinued operations
|
2023
Outlook
(continuing operations)
|
|
Cloud revenue (at
constant currencies)
|
€11.43
billion
|
€15.3 – 15.7
billion
|
€1.3 billion
|
€14.0 – 14.4
billion
+23% to +26%
|
|
Cloud and software
revenue (at constant currencies)
|
€25.39
billion
|
€28.2 – 28.7
billion
|
€1.3 billion
|
€26.9 – 27.4
billion
+6% to +8%
|
|
Operating profit
(non-IFRS, at constant currencies)
|
€7.99
billion
|
€8.8 – 9.1
billion
|
€0.2 billion
|
€8.6 – 8.9
billion
+8% to +11%
|
|
Share of more
predictable revenue
|
79 %
|
approx. 83%
|
n/a
|
approx. 82%
|
|
Free cash
flow
|
n/a
|
approx. €5.0
billion
|
€0.1 billion
|
approx. €4.9
billion
|
|
Effective tax rate
(IFRS)
|
32.0 %
|
28.0 – 32.0%
|
n/a
|
28.0 – 32.0%
|
|
Effective tax rate
(non-IFRS)
|
29.6 %
|
26.0 – 28.0%
|
n/a
|
26.0 – 28.0%
|
The adjustment for cloud revenue and operating profit is based
on the Qualtrics outlook for 2023 as published by Qualtrics on
January 25. In the absence of such
guidance, financial outlook parameters are based on the 2023
Qualtrics analyst consensus as of April
19.
The disposal gain realized upon closing of the transaction will
be included into profit (loss) after tax from discontinued
operations. The divestiture will not impact operating profit or
free cash flow from continuing operations.
SAP confirms its performance expectations underlying its
January 2023 outlook for continuing
operations but now updates its 2023 outlook to reflect the
anticipated divestiture of Qualtrics and expects:
- €14.0 – 14.4 billion cloud revenue at constant currencies
(2022: €11.43 billion), up 23% to 26% at constant currencies.
- €26.9 – 27.4 billion cloud and software revenue at constant
currencies (2022: €25.39 billion), up 6% to 8% at constant
currencies.
- €8.6 – 8.9 billion non-IFRS operating profit at constant
currencies (2022: €7.99 billion), up 8% to 11% at constant
currencies.
- A share of more predictable revenue of approximately 82% (2022:
79%). It is defined as the total of cloud revenue and software
support revenue divided by total revenue.
- Free cash flow of approximately €4.9 billion.
- A full-year effective tax rate (IFRS) of 28.0% to 32.0% (2022:
32.0%) and an effective tax rate (non-IFRS) of 26.0% to 28.0%
(2022: 29.6%).
While SAP's full-year 2023 financial outlook is at constant
currencies, actual currency reported figures are expected to be
impacted by currency exchange rate fluctuations as the Company
progresses through the year. See the table below.
Currency Impact Assuming March
2023 Rates Apply for 2023
|
In percentage
points
|
Q2 2023
|
FY 2023
|
|
Cloud revenue
growth
|
–3pp to
–1pp
|
–3pp to
–1pp
|
|
Cloud and software
revenue growth
|
–2pp to 0pp
|
–3pp to
–1pp
|
|
Operating profit growth
(non-IFRS)
|
–3pp to
–1pp
|
–3pp to
–1pp
|
Non-Financial Outlook 2023
SAP continues to focus on three non-financial indicators:
customer loyalty, employee engagement, and carbon emissions.
In 2023, for continuing operations SAP continues to
expect:
- a Customer Net Promoter Score of 8 to 122.
- an Employee Engagement Index to be in a range of 76% to
80%.
- Net carbon emissions of 0kt, meaning the Company will be carbon
neutral in its own operations.
Ambition 2025
SAP expects to update its mid-term ambition as part of its
financial analyst conference at Sapphire on May 16, 2023.
Additional Information
The full Q1 2023 Quarterly Statement can be downloaded from:
https://www.sap.com/investors/sap-2023-q1-statement.
This press release and all information therein is preliminary
and unaudited.
SAP Performance Measures
For more information about our key growth metrics and
performance measures, their calculation, their usefulness, and
their limitation, please refer to the following document on our
Investor Relations website:
https://www.sap.com/investors/performance-measures
Webcast
SAP senior management will host a financial analyst conference
call on Friday, April 21st
at 2:00 PM (CEST) / 1:00 PM (BST) / 8:00
AM (Eastern) / 5:00 AM
(Pacific). The conference will be webcast on the Company's website
at https://www.sap.com/investor and will be available for
replay. Supplementary financial information pertaining to the first
quarter results can be found at https://www.sap.com/investor.
Financial Analyst and Investor Conference
SAP will hold a financial analyst event on Tuesday, May 16th, in conjunction with
its annual SAP Sapphire conference.
About SAP
SAP's strategy is to help every business run as an intelligent
enterprise. As a market leader in enterprise application software,
we help companies of all sizes and in all industries run at their
best: SAP customers generate 87% of total global commerce. Our
machine learning, Internet of Things (IoT), and advanced analytics
technologies help turn customers' businesses into intelligent
enterprises. SAP helps give people and organizations deep business
insight and fosters collaboration that helps them stay ahead of
their competition. We simplify technology for companies so they can
consume our software the way they want – without disruption. Our
end-to-end suite of applications and services enables business and
public customers across 25 industries globally to operate
profitably, adapt continuously, and make a difference. With a
global network of customers, partners, employees, and thought
leaders, SAP helps the world run better and improve people's lives.
For more information, visit www.sap.com.
|
For customers
interested in learning more about SAP products:
|
|
|
Global Customer
Center:
|
+49 180
534-34-24
|
|
United States
Only:
|
+1 (800) 872-1SAP
(+1-800-872-1727)
|
This document contains forward-looking statements, which are
predictions, projections, or other statements about future events.
These statements are based on current expectations, forecasts, and
assumptions that are subject to risks and uncertainties that could
cause actual results and outcomes to materially differ. Additional
information regarding these risks and uncertainties may be found in
our filings with the Securities and Exchange Commission, including
but not limited to the risk factors section of SAP's 2022 Annual
Report on Form 20-F.
© 2023 SAP SE. All rights reserved.
SAP and other SAP products and services mentioned herein as well
as their respective logos are trademarks or registered trademarks
of SAP SE in Germany and other
countries. Please see https://www.sap.com/copyright for additional
trademark information and notices.
1 The Q1 2023 results were also impacted by other
effects. For details, please refer to the disclosures on page 21 of
this document.
2 The guidance is based on an adjusted methodology
for 2023 to better reflect the business priorities of the
company.
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