CIMdata PLM Industry Summary Online Archive
28 April 2011
Financial News
SAP Reports 26% Growth in Software Revenue and 20% Growth in Software and Software Related Service Revenue
SAP AG announced its financial results for the first quarter ended March 31, 2011.
View the Detailed Results (PDF)
Presentation (PDF)
“We are pleased to report our fifth consecutive quarter of double-digit growth in software and software related service revenue,” said Werner Brandt, CFO of SAP. “The strong top line results coupled with a double-digit increase in non-IFRS operating profit keep us on track to deliver further profitable growth in 2011 and beyond.”
“Coming off our largest fourth quarter software revenue results in our history, our strong momentum continued in the first quarter,” said Bill McDermott, Co-CEO of SAP. “Our customers are embracing our innovation and open ecosystem strategy. This is driving demand across our industry leading portfolio of business applications, analytics, and enterprise mobility solutions. We delivered double-digit revenue growth in all regions, benefitting from an increasing contribution to software revenue from our partner and channel business.”
Jim Hagemann Snabe, Co-CEO of SAP, continued, “SAP’s strategy of growth through innovation is clearly paying off and we remain confident about our future outlook. We offer great value to our customers with the most modern business suite and analytics solutions in the industry. In addition, our innovations addressing new markets with in memory, on demand and mobility are rapidly gaining traction. We are innovating faster in all product areas and continue to increase operational efficiency across the company.”
FINANCIAL HIGHLIGHTS – First Quarter 2011
First Quarter 20111) |
|||||||
IFRS |
Non-IFRS2) |
||||||
€ million, unless stated otherwise |
Q1 2011 |
Q1 2010 |
% change |
Q1 2011 |
Q1 2010 |
% change |
% change constant currency3) |
Software revenue |
583 |
464 |
26% |
583 |
464 |
26% |
24% |
Software and software-related service revenue |
2,327 |
1,947 |
20% |
2,344 |
1,947 |
20% |
17% |
Total revenue |
3,024 |
2,509 |
21% |
3,041 |
2,509 |
21% |
18% |
Total operating expenses |
-2,427 |
-1,952 |
24% |
-2,262 |
-1,892 |
20% |
17% |
- thereof TomorrowNow litigation |
-2 |
0 |
n/a |
0 |
0 |
0% |
- |
Operating profit |
597 |
557 |
7% |
779 |
617 |
26% |
21% |
Operating margin (%) |
19.7 |
22.2 |
-2.5pp |
25.6 |
24.6 |
1.0pp |
0.7pp |
Profit after tax |
403 |
387 |
4% |
528 |
439 |
20% |
|
Basic earnings per share (€) |
0.34 |
0.33 |
3% |
0.44 |
0.37 |
19% |
|
Number of employees (FTE) |
53,872 |
47,598 |
13% |
na |
na |
na |
na |
1) All figures are unaudited.
2) Adjustments in the revenue line items are for the support revenue that would have been recognized had the acquired entities remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges, share-based compensation expenses, restructuring and discontinued activities.
3) Constant currency revenue and operating profit figures are calculated by translating revenue and operating income of the current period using the average exchange rates from the previous year's respective period instead of the current period. Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS number of the previous year's respective period.
Revenue – First Quarter 2011
- IFRS software revenue was €583 million (2010: €464 million), an increase of 26% (24% at constant currencies).
- IFRS software and software-related service revenue was €2.33 billion (2010: €1.95 billion), an increase of 20%. Non-IFRS software and software-related service revenue was €2.34 billion (2010: €1.95 billion), an increase of 20% (17% at constant currencies).
- IFRS total revenue was €3.02 billion (2010: €2.51 billion), an increase of 21%. Non-IFRS total revenue was €3.04 billion (2010: €2.51 billion), an increase of 21% (18% at constant currencies).
First quarter 2011 non-IFRS software and software-related service revenue and total revenue exclude a deferred support revenue write-down from acquisitions of €17 million.
Profit – First Quarter 2011
- IFRS operating profit was €597 million (2010: €557 million), an increase of 7%. Non-IFRS operating profit was €779 million (2010: €617 million), an increase of 26% (21% at constant currencies).
- IFRS operating margin was 19.7% (2010: 22.2%), a decrease of 2.5 percentage points. Non-IFRS operating margin was 25.6% (2010: 24.6%), or 25.3% at constant currencies, an increase of 1.0 percentage point (0.7 percentage points at constant currencies).
- IFRS profit after tax was €403 million (2010: €387 million), an increase of 4%. Non-IFRS profit after tax was €528 million (2010: €439 million), an increase of 20%. IFRS basic earnings per share was €0.34 (2010: €0.33), an increase of 3%. Non-IFRS basic earnings per share was €0.44 (2010: €0.37), an increase of 19%. The IFRS effective tax rate in the first quarter of 2011 was 30.9% (2010: 25.7%). The non-IFRS effective tax rate in the first quarter of 2011 was 31.0% (2010: 25.2%).
First quarter 2011 non-IFRS operating profit excludes a deferred support revenue write-down from acquisitions of €17 million, acquisition-related charges of €112 million, discontinued activities of €2 million and stock-based compensation expenses of €52 million (2010: €0 million, €54 million, €0 million and €5 million). First quarter 2011 non-IFRS profit after tax and non-IFRS basic earnings per share exclude a deferred support revenue write-down from acquisitions of €11 million, acquisition-related charges of €76 million, discontinued activities of €1 million and stock-based compensation expenses of €37 million (2010: €0 million, €41 million, €7 million and €4 million) net of tax.
Cash Flow – First Quarter 2011
Operating cash flow for the first quarter 2011 was €1.59 billion (2010: €772 million), which is the highest operating cash flow for a first quarter in the Company’s history. Free cash flow was €1.45 billion (2010: €715 million), an increase of 103%. Free cash flow was 48% of total revenue (2010: 28%). At March 31, 2011, SAP had a total group liquidity of €4.49 billion (December 31, 2010: €3.53 billion), which includes cash and cash equivalents and short term investments. Net liquidity at March 31, 2011 was €633 million, which included €3.85 billion of debt, of which €3.25 billion resulted from the proceeds of bond and private placement transactions.
Business Outlook
SAP is providing the following outlook for the full-year 2011, which is unchanged from its previous outlook reported on January 26, 2011 and then reaffirmed in the 2010 Annual Report to Shareholders published on March 18, 2011 and the Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission on March 18, 2011.
- The Company expects full-year 2011 non-IFRS software and software-related service revenue to increase in a range of 10% – 14% at constant currencies (2010: €9.87 billion).
- The Company expects full-year 2011 non-IFRS operating profit to be in a range of €4.45 billion – €4.65 billion at constant currencies (2010: €4.01 billion), resulting in a 2011 non-IFRS operating margin increasing in a range of 0.5 - 1.0 percentage points at constant currencies (2010: 32.0%).
- For the full-year 2011, the Company projects an IFRS effective tax rate of 27.0% – 28.0% (2010: 22.5%) and a non-IFRS effective tax rate of 27.5% - 28.5% (2010: 27.3%).
Major Customer Wins
In the first quarter of 2011, SAP closed major contracts in key regions.
EMEA:
SAP - Kantonsspital Aarau AG, Stadtverwaltung Biel, PIERRE & VACANCES SA, GALP ENERGIA, S.A., OJSC Promsvyazbank (PSB), OOO Rosgosstrakh
Sybase - Ericsson, Telefonica, 1&1 Internet AG
Americas:
SAP - Banco Intermedium S.A., PrimeSource Building Products Inc., Coinstar, Inc., Interpublic Group of Companies Inc., Sedgwick County, Kansas, Mohawk Industries, Inc.
Sybase – Synnex, Fujioka Eletro Imagem S/A, Medical Data Systems
Asia Pacific/Japan:
SAP - Jiangsu King's Luck Brewery Co., Ltd, Texhong (China) Investment Co., Ltd., Guangzhou Liby Enterprise Group Co., Astro All Asia Networks PLC, KyungDong Navien Co., Ltd., Microelectronics Technology Inc.
Sybase - YunNan Local Taxation, Jiaxing International Creative Culture Industry Park
SAP Business ByDesign
Hartung Consulting, KAI Computer Services Limited, Tennants Fine Chemicals Ltd, Dicentra, RB-INFO Kontor, HBC, Framos, EURO RSCG, siller AG, Wildnissport, Nowis
Q1 2011 Interim Report
SAP’s Q1 2011 Interim Report was published today and is available at www.sap.com/investor for download.
Webcast
SAP senior management will host a conference call today at 3:00 PM (CET) / 2:00 PM (GMT) / 9:00 AM (Eastern) / 6:00 AM (Pacific). The conference call will be web cast live on the Company’s website at www.sap.com/investor and will be available for replay.
2010 Annual Report
The 2010 Annual Report was published on March 18, 2011 and is available for download at www.sap.com/investor.
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