Production of food and goods through farming and forestry

Farming


SAP AG on Tuesday announced its preliminary financial results for the second quarter ended June 30, 2010.


FINANCIAL HIGHLIGHTS - Second Quarter 2010
------------------------------------------



Second Quarter 2010(1)
----------------------
IFRS
----
%
EUR million, unless Q2 2010 Q2 2009 change
otherwise stated ------- ------- -------
----------------
Software revenue 637 543 17%
---------------- --- --- ---
Software and
software-related
service revenue 2,258 1,953 16%
----------------- ----- ----- ---
Total revenue 2,894 2,576 12%
------------- ----- ----- ---
Total operating
expenses -2,120 -1,935 10%
--------------- ------ ------ ---
-thereof
restructuring -1 -17 -94%
-------------- --- --- ---
Operating profit 774 641 21%
---------------- --- --- ---
Operating margin (%) 26.7 24.9 1.8pp
-------------------- ---- ---- -----
Profit after tax 491 426 15%
---------------- --- --- ---
Basic earnings per
share (EUR) 0.41 0.36 14%
------------------ ---- ---- ---


Second Quarter 2010(1)
----------------------
Non-IFRS(2)
-----------
% %
EUR million, unless Q2 2010 Q2 2009 change change
const.
otherwise stated ------- ------- ------- curr.(3)
---------------- ---------
Software revenue 637 543 17% 5%
---------------- --- --- --- ---
Software and
software-related
service revenue 2,258 1,953 16% 8%
----------------- ----- ----- --- ---
Total revenue 2,894 2,576 12% 5%
------------- ----- ----- --- ---
Total operating
expenses -2,054 -1,866 10% 4%
--------------- ------ ------ --- ---
-thereof
restructuring -1 -17 -94%
-------------- --- --- ---
Operating profit 840 710 18% 5%
---------------- --- --- --- ---
Operating margin (%) 29.0 27.6 1.4pp 0.2pp
-------------------- ---- ---- ----- -----
Profit after tax 551 478 15%
---------------- --- --- ---
Basic earnings per
share (EUR) 0.46 0.40 15%
------------------ ---- ---- ---



(1) All figures are preliminary and unaudited.
(2) Adjustments in the revenue line items are for support revenue
that an entity acquired by SAP would have
recognized had it remained a stand-alone entity 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 and discontinued activities. See
Explanations of Non-IFRS Measures in the
appendix for details.
(3) Constant currency revenue and operating profit figures are
calculated by translating revenue and operating
profit 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. See Explanations of Non-IFRS Measures in the
appendix for details.


 

 

Revenues - Second Quarter 2010

  • IFRS software and software-related service revenues were euro 2.26 billion (2009: euro 1.95 billion), an increase of 16% (8% at constant currencies).
  • IFRS software revenues were euro 637 million (2009: euro 543 million), an increase of 17% (5% at constant currencies).
  • IFRS total revenues were euro 2.89 billion (2009: euro 2.58 billion), an increase of 12% (5% at constant currencies).

 

Income - Second Quarter 2010

  • IFRS operating profit was euro 774 million (2009: euro 641 million), an increase of 21%. Non-IFRS operating profit was euro 840 million (2009: euro 710 million), an increase of 18% (5% at constant currencies). In the second quarter of 2009, the IFRS and Non-IFRS operating income was impacted by restructuring charges of euro 17 million resulting from a reduction of positions. In contrast, restructuring charges were not material in the second quarter of 2010.
  • IFRS operating margin was 26.7% (2009: 24.9%), an increase of 1.8 percentage points. Non-IFRS operating margin was 29.0% (2009: 27.6%), or 27.8% at constant currencies, an increase of 1.4 percentage points (0.2 percentage points at constant currencies). In contrast to the respective quarter in 2009, the second quarter of 2010 was not materially impacted by restructuring expenses which had, in the second quarter of 2009, negatively impacted the IFRS and Non-IFRS operating margin by 0.7 percentage points. However, severance expenses of euro 11 million (2009: euro 1.3 million) negatively impacted the second quarter 2010 IFRS and Non-IFRS operating margin by 0.4 percentage points (2009: 0.1 percentage points).
  • IFRS profit after tax was euro 491 million (2009: euro 426 million), an increase of 15%. Non-IFRS profit after tax was euro 551 million (2009: euro 478 million), an increase of 15%. IFRS basic earnings per share were euro 0.41 (2009: euro 0.36), an increase of 14%. Non-IFRS basic earnings per share were euro 0.46 (2009: euro 0.40), an increase of 15%. The impact, net of tax, of the severance expenses incurred in the second quarter 2010 on the second quarter 2010 IFRS and Non-IFRS basic earnings per share was euro 0.01. The impact, net of tax, of the restructuring expenses incurred in the second quarter 2009 on the second quarter 2009 IFRS and Non-IFRS basic earnings per share was euro 0.01. The IFRS effective tax rate in the second quarter of 2010 was 27.4% (2009: 28.5%).

 

Second Quarter 2010 Non-IFRS operating profit excludes acquisition-related charges and discontinued activities totaling euro 66 million (2009: euro 69 million). Second quarter 2010 Non-IFRS profit after tax and Non-IFRS basic earnings per share exclude acquisition-related charges and discontinued activities totaling euro 60 million net of tax (2009: euro 52 million).

 

"We are pleased to report another quarter of growth in software and software-related service revenue," said Werner Brandt, CFO of SAP. "The top line results were driven by continued growth in software revenue, strong support revenue, mainly from the majority of our customers who endorsed Enterprise Support, and double-digit growth in subscription revenue."

"Customers continue to invest for growth across large, midsized and small enterprises and within many industries," said Bill McDermott, Co-CEO of SAP. "We had outstanding growth in strategic markets like the U.S. and we saw continued double-digit growth in key emerging markets in Latin America and Asia. This solid performance is due to renewed customer confidence, an ever-expanding ecosystem, as well as focused execution on our go-to-market strategy."

"Our focus on customer-driven innovation is positively impacting our growth. Reaching more than 100,000 customers is a testament to the inroads we have made in expanding our volume business and our success in the small and midsized enterprise (SME) segment," said Jim Hagemann Snabe, Co-CEO of SAP. "Our success in the SME segment creates a strong foundation for the new version of our on-demand platform SAP Business ByDesign. The new version will be available on time on July 31st and is ready for volume deployment in six countries."

SAP Completes Tender Offer for Shares of Sybase, Inc.
SAP also announced today that it has completed the cash tender offer for all outstanding shares of common stock of Sybase. Under the terms of the agreement, Sybase will operate as a separate company under the leadership of current CEO John Chen and will remain focused on its core business. Sybase will continue to execute plans and product strategies around its core database and information management business and Sybase's expertise in the mobile business will be a key driver for the Sybase and SAP vision for the unwired enterprise. For more details on SAP and Sybase, please visit www.sap.com/about/investor/sybase.epx .

The acquisition rounds out the Company's three pillar strategy of providing solutions on-premise, on-demand and on-device supported by orchestration. Already the clear leader in on-premise business software solutions, the Company expects that with its aggressive push into on-demand and now on-device, with the biggest and most heterogeneous mobile platform provided by the acquisition of Sybase, it will be able to extend its reach into new user categories well beyond its traditional user base.

SAP will host a press briefing on August 19, 2010 in Boston, Massachusetts, where SAP Co-CEO Bill McDermott, Sybase CEO John Chen and members of the SAP leadership team will share details on joint company strategy and product road maps, along with planned co-innovations in mobility, analytics and database technologies. Details on the event will follow in a media alert to be issued in early August.


FINANCIAL HIGHLIGHTS - Six Months 2010
--------------------------------------



First Half 2010(1)
------------------
IFRS
----
1H 1H %
EUR million, unless 2010 2009 change
otherwise stated ----- ----- -------
----------------
Software revenue 1,101 962 14%
---------------- ----- --- ---
Software and
software-related
service revenue 4,205 3,695 14%
----------------- ----- ----- ---
Total revenue 5,403 4,974 9%
------------- ----- ----- ---
Total operating
expenses -4,072 -4,026 1%
--------------- ------ ------ ---
-thereof
restructuring -1 -183 -99%
-------------- --- ---- ---
Operating profit 1,331 948 40%
---------------- ----- --- ---
Operating margin (%) 24.6 19.1 5.5pp
-------------------- ---- ---- -----
Profit after tax 878 622 41%
---------------- --- --- ---
Basic earnings per
share (EUR) 0.74 0.52 42%
------------------ ---- ---- ---




First Half 2010(1)
------------------
Non-IFRS(2)
-----------
%
change
1H 1H % const.
EUR million, unless 2010 2009 change curr.(3)
otherwise stated ----- ----- ------- ---------
----------------
Software revenue 1,101 962 14% 6%
---------------- ----- --- --- ---
Software and
software-related
service revenue 4,205 3,706 13% 9%
----------------- ----- ----- --- ---
Total revenue 5,403 4,985 8% 4%
------------- ----- ----- --- ---
Total operating
expenses -3,951 -3,879 2% -1%
--------------- ------ ------ --- ---
-thereof
restructuring -1 -178 -99%
-------------- --- ---- ---
Operating profit 1,452 1,106 31% 20%
---------------- ----- ----- --- ---
Operating margin (%) 26.9 22.2 4.7pp 3.5pp
-------------------- ---- ---- ----- -----
Profit after tax 986 740 33%
---------------- --- --- ---
Basic earnings per
share (EUR) 0.83 0.62 34%
------------------ ---- ---- ---





(1) All figures are preliminary and unaudited.
(2) Adjustments in the revenue line items are for support revenue
that an entity acquired by SAP would have
recognized had it remained a stand-alone entity 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 and discontinued activities. See
Explanations of Non-IFRS Measures in
the appendix for details.
(3) Constant currency revenue and operating profit figures are
calculated by translating revenue and
operating profit 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. See Explanations of Non-IFRS Measures in
the appendix for details.


 

 

Revenues - Six Months 2010

  • IFRS software and software-related service revenues were euro 4.21 billion (2009: euro 3.70 billion), an increase of 14%. Non-IFRS software and software-related service revenues were euro 4.21 billion (2009: euro 3.71 billion), an increase of 13% (9% at constant currencies).
  • IFRS software revenues were euro 1.10 billion (2009: euro 962 million), an increase of 14% (6% at constant currencies).
  • IFRS total revenues were euro 5.40 billion (2009: euro 4.97 billion), an increase of 9%. Non-IFRS total revenues were euro 5.40 billion (2009: euro 4.99 billion), an increase of 8% (4% at constant currencies).

 

Six months 2009 Non-IFRS revenue figures exclude a deferred support revenue write-down from the acquisition of Business Objects of euro 11 million.

 

Income - Six Months 2010

  • IFRS operating profit was euro 1.33 billion (2009: euro 948 million), an increase of 40%. Non-IFRS operating profit was euro 1.45 billion (2009: euro 1.11 billion), an increase of 31% (20% at constant currencies). In the first half of 2009, the IFRS and Non-IFRS operating income was impacted by restructuring charges of euro 183 million and euro 178 million, respectively, resulting from a reduction of positions.
  • IFRS operating margin was 24.6% (2009: 19.1%), an increase of 5.5 percentage points. Non-IFRS operating margin was 26.9% (2009: 22.2%), or 25.7% at constant currencies, an increase of 4.7 percentage points (3.5 percentage points at constant currencies). In contrast to the respective first half of 2009, the first half of 2010 was not materially impacted by restructuring expenses which had, in the first half of 2009, negatively impacted the IFRS and Non-IFRS operating margin by 3.7 percentage points and 3.6 percentage points, respectively. However, severance expenses of euro 38 million (2009: euro 3.1 million) and unused lease space expenses of euro 8 million negatively impacted the IFRS and Non-IFRS operating margin by 0.9 percentage points (2009: 0.1 percentage points).
  • IFRS profit after tax was euro 878 million (2009: euro 622 million), an increase of 41%. Non-IFRS profit after tax was euro 986 million (2009: euro 740 million), an increase of 33%. IFRS basic earnings per share were euro 0.74 (2009: euro 0.52), an increase of 42%. Non-IFRS basic earnings per share were euro 0.83 (2009: euro 0.62), an increase of 34%. The impact, net of tax, of the severance and unused lease space expenses incurred in the first half of 2010 on the first half 2010 IFRS and Non-IFRS basic earnings per share was euro 0.03. The impact, net of tax, of the restructuring expenses incurred in the first half of 2009 on the first half 2009 IFRS and Non-IFRS basic earnings per share was euro 0.11. The IFRS effective tax rate in the first half year 2010 was 26.6% (2009: 29.6%). The year over year decrease in the effective tax rate mainly results from tax effects on changes in foreign currency exchange rates. The currency related tax effects recorded in the second quarter 2010 were substantially compensated by several individually minor negative tax effects.

 

First half 2010 Non-IFRS operating profit excludes acquisition-related charges and discontinued activities totaling euro 121 million (2009: euro 158 million). First half 2010 Non-IFRS profit after tax and Non-IFRS basic earnings per share exclude acquisition-related charges and discontinued activities totaling euro 108 million net of tax (2009: euro 118 million).

 

 

Cash Flow - Six Months 2010

 

Operating cash flow was euro 1.28 billion (2009: euro 1.82 billion), a decrease of 30%. The year-over-year decrease in operating cash flow resulted from 1) timing of cash inflows as the Company received significantly more payments from customers in 2009 compared to 2010 due to the onset of the financial crisis that caused 2008 payment delays; 2) net cash outflows for derivative financial instruments used for the hedging of foreign exchange risks which did not affect profit, but were higher in the first six months 2010 compared to the prior period; and 3) a one-time payment in the second quarter of 2010 from the settlement of a lawsuit with the main part of the corresponding insurance reimbursement expected to be received in subsequent periods. Free cash flow was euro 1.16 billion (2009: euro 1.72 billion), a decrease of 33%. Free cash flow was 21% of total revenues (2009: 35%). At June 30, 2010, SAP had a total group liquidity of euro 3.96 billion (December 31, 2009: euro 2.28 billion), which includes cash and cash equivalents and short term investments. At June 30, 2010, net liquidity, defined as total group liquidity less short term debt, was euro 2.19 billion.

 

Business Outlook

 

SAP is providing the following outlook for the full-year 2010, which now takes into account the acquisition of Sybase:

  • The Company expects full-year 2010 Non-IFRS software and software-related service revenue (1) to increase in a range of 9% - 11% at constant currencies (2009: euro 8.2 billion). SAP's business, excluding the contribution from Sybase, is expected to contribute 6 - 8 percentage points to this growth.
  • The Company expects the full-year 2010 Non-IFRS operating margin to be in a range of 30% - 31% (2009: 27.4%) at constant currencies.
  • The Company projects an effective tax rate of 27.5% - 28.5% (based on IFRS) for 2010 (2009: 28.1%).

 

(1) Unchanged from the past, software and software-related service revenue continues to only include software and services directly related to software. Revenues from all other services (including consulting, training and Sybase's messaging services) continue to be reported as Professional Services and Other Service Revenue.

 

 

Major Customer Wins

 

In the second quarter of 2010, SAP closed major contracts in key regions.

 

In EMEA: E.ON IT GmbH, Sisal S.p.A., Bashneft ANK OAO, Swiss Reinsurance Company Ltd., DSG Retail Ltd; In the Americas: American Water Works Service Co., U.S. Department of Agriculture, Delta Air Lines, Inc., Pelagio Oliveira S/A, Montepio Luz Savinon I.A.P, H.D. Smith Wholesale Drug Co., United Nations; In Asia Pacific/Japan: Shanghai Huayi (Group) Company, Huaneng Lancang River Hydro Power, National Institute for Environmental Studies, Sumitomo Chemical Co.,Ltd, Malaysia Airports Holdings Berhad, Parkway Hospitals Singapore Pte Ltd.

 

Webcast / Supplementary Financial Information

 

SAP senior management will host a conference call today at 3:00 PM (CET) / 2:00 PM (UK) / 9:00 AM (Eastern) / 6:00 AM (Pacific). The conference call will be web cast live on the Company's website at http://www.sap.com/investor and will be available for replay.

 

Supplementary financial information pertaining to the quarterly results can be found at http://www.sap.com/investor.

 

 

SAP First Half 2010 Interim Report

 

The First Half 2010 Interim Report will be published on July 29th, 2010 and will be available for download at http://www.sap.com/investor.

 

 

About SAP

SAP is the world's leading provider of business software(*), offering applications and services that enable companies of all sizes and in more than 25 industries to become best-run businesses. With more than 102,500 customers in over 120 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol "SAP." For more information, visit www.sap.com.

 

 

(*) SAP defines business software as comprising enterprise resource planning, business intelligence, and related applications.

 

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," "project," "predict," "should" and "will" and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP's future financial results are discussed more fully in SAP's filings with the U.S. Securities and Exchange Commission ("SEC"), including SAP's most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

 

Copyright © 2010 SAP AG. All rights reserved.

 

SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serve informational purposes only. National product specifications may vary.

 

 

 


For more information, press only:
Christoph Liedtke +49 (6227) 7-50383 [email protected], CET
Guenter Gaugler +49 (6227) 7-65416 [email protected], CET
Jim Dever +1 (610) 661-2161 [email protected], ET

For more information, financial community only:
Stefan Gruber +49 (6227) 7-44872 [email protected], CET
Martin Cohen +1 (212) 653-9619 [email protected], ET

Follow SAP Investor Relations on Twitter at @sapinvestor.

 

 

 

Appendix - Financial Information to Follow

 

 

                                FINANCIAL INFORMATION
FOR THE SECOND QUARTER AND HALF YEAR 2010
- Condensed, Preliminary and Unaudited -


                                                              Page

Financial Statements (IFRS)
Income Statements - Quarter F1
Statements of Comprehensive Income -
Quarter F2
Income Statements - Half Year F3
Statements of Comprehensive Income - Half
Year F4
Statements of Financial Position F5
Statements of Changes in Equity F6
Statements of Cash Flows F7

Supplementary Financial Information
Reconciliations from Non-IFRS Numbers to
IFRS Numbers F8 to F9
Revenue by Region F10 to F11
Share-Based Compensation F12
Free Cash Flow F12
Days Sales Outstanding F12
Headcount F12
Multi-Quarter Summary F13
Explanations of Non-IFRS Measures F14 to F16

 

 

 

Financial Statements (IFRS)

 


CONSOLIDATED INCOME STATEMENTS OF SAP GROUP
For the three months ended June 30
                                                             Change
EUR millions, unless otherwise stated 2010 2009 in %
Software revenue 637 543 17
Support revenue 1,526 1,337 14
Subscription and other
software-related service
revenue 95 73 30
Software and software-
related service revenue 2,258 1,953 16
Consulting revenue 528 517 2
Training revenue 71 70 1
Other service revenue 18 23 -22
Professional services and
other service revenue 617 610 1
Other revenue 19 13 46
Total revenue 2,894 2,576 12

Cost of software and
software-related
services -415 -400 4
Cost of professional
services and other
services -497 -467 6
Research and development -397 -373 6
Sales and marketing -658 -561 17
General and administration -156 -123 27
Restructuring -1 -17 -94
Other operating income/
expense, net 4 6 -33
Total operating expenses -2,120 -1,935 10
Operating profit 774 641 21

Other non-operating
income/expense, net -86 -22 >100
Finance income 11 8 38
Finance costs -21 -28 -25
Other financial gains/
losses, net -2 -3 -33
Financial income, net -12 -23 -48
Profit before tax 676 596 13

Income tax expense -185 -170 9
Profit after tax 491 426 15
- Profit attributable to
non-controlling
interests 0 1 -100
- Profit attributable to
owners of parent 491 425 16

Basic earnings per share,
in EUR0.41 0.36 14
Diluted earnings per
share, in EUR0.41 0.36 14


* For the three months ended June 30, 2010 and 2009 the weighted
average number of shares were 1,188 million
(Diluted: 1,189 million) and 1,188 million (Diluted: 1,189 million),
respectively (treasury stock excluded).

 

 

 

 


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME OF SAP GROUP
for the second quarter ended June 30
    EUR millions                         2010  2009
Profit after tax 491 426
Gains (losses) on exchange
differences on translation,
before tax 142 3
Reclassification adjustments on
exchange differences on
translation, before tax -11 0
Exchange differences on
translation 131 3
Gains (losses) on remeasuring
available-for-sale financial
assets, before tax -7 1
Reclassification adjustments on
available-for-sale financial
assets, before tax 0 0
Available-for-sale financial
assets -7 1
Gains (losses) on cash flow
hedges, before tax -40 -7
Reclassification adjustments on
cash flow hedges, before tax 11 25
Cash flow hedges -29 18
Actuarial gains (losses) on
defined benefit plans, before
tax -5 3
Other comprehensive income before
tax 90 25
Income tax relating to components
of other comprehensive income 10 -6
Other comprehensive income after
tax 100 19
Total comprehensive income 591 445
- attributable to non-
controlling interests 1 1
- attributable to owners of
parent 590 444


 

 

 

 

    CONSOLIDATED INCOME STATEMENTS OF SAP GROUP
For the six months ended June 30
                                                             Change
EUR millions, unless otherwise stated 2010 2009 in %
Software revenue 1,101 962 14
Support revenue 2,920 2,589 13
Subscription and other
software-related service
revenue 184 144 28
Software and software-
related service revenue 4,205 3,695 14
Consulting revenue 1,007 1,071 -6
Training revenue 130 142 -8
Other service revenue 37 47 -21
Professional services and
other service revenue 1,174 1,260 -7
Other revenue 24 19 26
Total revenue 5,403 4,974 9

Cost of software and
software-related
services -814 -786 4
Cost of professional
services and other
services -948 -989 -4
Research and development -790 -738 7
Sales and marketing -1,215 -1,074 13
General and administration -304 -262 16
Restructuring -1 -183 -99
Other operating income/
expense, net 0 6 -100
Total operating expenses -4,072 -4,026 1
Operating profit 1,331 948 40

Other non-operating
income/expense, net -122 -23 >100
Finance income 22 17 29
Finance costs -33 -53 -38
Other financial gains/
losses, net -1 -6 -83
Financial income, net -12 -42 -71
Profit before tax 1,197 883 36

Income tax expense -319 -261 22
Profit after tax 878 622 41
- Profit attributable to
non-controlling
interests 1 1 0
- Profit attributable to
owners of parent 877 621 41

Basic earnings per share,
in EUR0.74 0.52 42
Diluted earnings per
share, in EUR0.74 0.52 42


* For the six months ended June 30, 2010 and 2009 the weighted
average number of shares were 1,189 million
(Diluted: 1,189 million) and 1,188 million (Diluted: 1,189 million),
respectively (treasury stock excluded).

 

 

 

 


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME OF SAP GROUP
for the six months ended June 30
    EUR millions                          2010  2009
Profit after tax 878 622
Gains (losses) on exchange
differences on translation,
before tax 272 35
Reclassification adjustments on
exchange differences on
translation, before tax -17 0
Exchange differences on
translation 255 35
Gains (losses) on remeasuring
available-for-sale financial
assets, before tax -1 1
Reclassification adjustments on
available-for-sale financial
assets, before tax 0 0
Available-for-sale financial
assets -1 1
Gains (losses) on cash flow
hedges, before tax -72 -22
Reclassification adjustments on
cash flow hedges, before tax 16 43
Cash flow hedges -56 21
Actuarial gains (losses) on
defined benefit plans, before
tax -10 2
Other comprehensive income before
tax 188 59
Income tax relating to components
of other comprehensive income 22 -6
Other comprehensive income after
tax 210 53
Total comprehensive income 1,088 675
- attributable to non-
controlling interests 1 1
- attributable to owners of
parent 1,087 674


 

 

 

 


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION OF SAP GROUP
as at June 30, 2010 and December 31, 2009
                                                   Change
EUR millions 2010 2009 in %
------------ ---- ---- ------
Assets
------
Cash and cash
equivalents 3,605 1,884 91
------------- ----- ----- ---
Other financial assets 574 486 18
---------------------- --- --- ---
Trade and other
receivables 2,768 2,546 9
--------------- ----- ----- ---
Other non-financial
assets 217 147 48
------------------- --- --- ---
Tax assets 202 192 5
---------- --- --- ---
Total current assets 7,366 5,255 40
-------------------- ----- ----- ---
Goodwill 5,136 4,994 3
-------- ----- ----- ---
Intangible assets 829 894 -7
----------------- --- --- ---
Property, plant, and
equipment 1,415 1,371 3
-------------------- ----- ----- ---
Other financial assets 337 284 19
---------------------- --- --- ---
Trade and other
receivables 66 52 27
--------------- --- --- ---
Other non-financial
assets 34 35 -3
------------------- --- --- ---
Tax assets 125 91 37
---------- --- --- ---
Deferred tax assets 364 398 -9
------------------- --- --- ---
Total non-current
assets 8,306 8,119 2
----------------- ----- ----- ---
Total assets 15,672 13,374 17
------------ ------ ------ ---


 

 

 




Change
EUR millions 2010 2009 in %
------------ ---- ---- ------
Equity and liabilities
----------------------
Trade and other
payables 698 638 9
--------------- --- --- ---
Tax liabilities 3 125 -98
--------------- --- --- ---
Financial liabilities 219 146 50
--------------------- --- --- ---
Other non-financial
liabilities 990 1,577 -37
------------------- --- ----- ---
Provisions 354 332 7
---------- --- --- ---
Deferred income 1,919 598 >100
--------------- ----- --- ----
Total current
liabilities 4,183 3,416 22
------------- ----- ----- ---


Trade and other
payables 34 35 -3
--------------- --- --- ---
Tax liabilities 259 239 8
--------------- --- --- ---
Financial liabilities 1,764 729 >100
--------------------- ----- --- ----
Other non-financial
liabilities 12 12 0
------------------- --- --- ---
Provisions 224 198 13
---------- --- --- ---
Deferred tax
liabilities 137 190 -28
------------ --- --- ---
Deferred income 88 64 38
--------------- --- --- ---
Total non-current
liabilities 2,518 1,467 72
----------------- ----- ----- ---
Total liabilities 6,701 4,883 37
----------------- ----- ----- ---


Issued capital 1,227 1,226 0
-------------- ----- ----- ---
Treasury shares -1,349 -1,320 2
--------------- ------ ------ ---
Share premium 331 317 4
------------- --- --- ---
Retained earnings 8,851 8,571 3
----------------- ----- ----- ---
Other components of
equity -104 -317 -67
------------------- ---- ---- ---
Equity attributable to
owners of parent 8,956 8,477 6
---------------------- ----- ----- ---


Non-controlling
interests 15 14 7
--------------- --- --- ---
Total equity 8,971 8,491 6
------------ ----- ----- ---
Equity and liabilities 15,672 13,374 17
---------------------- ------ ------ ---


 

 

 

 


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY OF SAP GROUP
For the six months ended June 30


EUR millions Other Components of Equity
---------- --------------------------

Issued Share Retained Exchange Available- Cash
for-
Capital Premium Earnings Differences Sale Flow
------- ------- -------- ----------- Financial Hedges
Assets ------
------
January
1, 2009 1,226 320 7,423 -395 -1 -42
-------- ----- --- ----- ---- --- ---
Profit
after
tax 621
------ ---
Other
comprehensive
income 2 34 1 16
-------------- --- --- --- ---
Share-
based
compensation -2
------------- ---
Dividends -594
--------- ----
Treasury
shares
transactions -4
------------ ---
Convertible
bonds
and
stock
options
exercised 4
----------- ---
Other 1
----- ---
June
30,
2009 1,226 318 7,453 -361 -26
----- ----- --- ----- ---- ---


January
1, 2010 1,226 317 8,571 -319 13 -11
-------- ----- --- ----- ---- --- ---
Profit
after
tax 877
------ ---
Other
comprehensive
income -3 255 -1 -41
-------------- --- --- --- ---
Share-
based
compensation -1
------------- ---
Dividends -594
--------- ----
Treasury
shares
transactions -5
------------ ---
Convertible
bonds
and
stock
options
exercised 1 20
----------- --- ---
June
30,
2010 1,227 331 8,851 -64 12 -52
----- ----- --- ----- --- --- ---

 


EUR millions Other Components of Equity
---------- --------------------------
Non-
Treasury Equity Controlling Total
Shares Attributable Interests Equity
to
------ Owners --------- ------
of
Parent
-------
January
1, 2009 -1,362 7,169 2 7,171
-------- ------ ----- --- -----
Profit
after
tax 621 1 622
------ --- --- ---
Other
comprehensive
income 53 53
-------------- --- ---
Share-
based
compensation -2 -2
------------- --- ---
Dividends -594 -594
--------- ---- ----
Treasury
shares
transactions 21 17 17
------------ --- --- ---
Convertible
bonds
and
stock
options
exercised 4 4
----------- --- ---
Other 1 1
----- --- ---
June
30,
2009 -1,341 7,269 3 7,272
----- ------ ----- --- -----


January
1, 2010 -1,320 8,477 14 8,491
-------- ------ ----- --- -----
Profit
after
tax 877 1 878
------ --- --- ---
Other
comprehensive
income 210 210
-------------- --- ---
Share-
based
compensation -1 -1
------------- --- ---
Dividends -594 -594
--------- ---- ----
Treasury
shares
transactions -113 -118 -118
------------ ---- ---- ----
Convertible
bonds
and
stock
options
exercised 84 105 105
----------- --- --- ---
June
30,
2010 -1,349 8,956 15 8,971
----- ------ ----- --- -----

 

 

 


CONSOLIDATED STATEMENTS OF CASH FLOWS OF SAP GROUP
as at June 30
    EUR millions                        2010    2009
---------- ---- ----
Profit after tax 878 622
---------------- --- ---
Adjustments to reconcile profit
after taxes to net cash
provided by operating
activities:
-------------------------------
Depreciation and amortization 225 253
----------------------------- --- ---
Gains/losses on disposals of
non-current assets 1 3
---------------------------- --- ---
Impairment loss on financial
assets recognized in profit 0 7
---------------------------- --- ---
Decrease/increase in sales and
bad debt allowances on trade
receivables 6 97
------------------------------ --- ---
Other adjustments for non-cash
items 15 13
------------------------------ --- ---
Deferred income taxes 36 -65
--------------------- --- ---
Decrease/increase in trade
receivables 31 628
-------------------------- --- ---
Decrease/increase in other
assets -216 -96
-------------------------- ---- ---
Decrease/increase in trade
payables, provisions and other
liabilities -802 -687
------------------------------- ---- ----
Decrease/increase in deferred
income 1,108 1,048
----------------------------- ----- -----
Net cash flows from operating
activities 1,282 1,823
----------------------------- ----- -----


Business combinations, net of
cash and cash equivalents
acquired 0 -49
----------------------------- --- ---
Purchase of intangible assets
and property, plant, and
equipment -125 -106
----------------------------- ---- ----
Proceeds from sales of
intangible assets or property,
plant, and equipment 17 13
------------------------------- --- ---
Purchase of equity or debt
instruments of other entities -651 -573
------------------------------ ---- ----
Proceeds from sales of equity or
debt instruments of other
entities 689 233
-------------------------------- --- ---
Net cash flows from investing
activities -70 -482
----------------------------- --- ----


Dividends paid -594 -594
-------------- ---- ----
Purchase of treasury shares -120 0
--------------------------- ---- ---
Proceeds from reissuance of
treasury shares 85 10
--------------------------- --- ---
Proceeds from issuing shares
(share-based compensation) 21 4
---------------------------- --- ---
Proceeds from borrowings 1,063 697
------------------------ ----- ---
Repayments of borrowings -6 0
------------------------ --- ---
Purchase of equity-based
derivative instruments (hedge
for cash-settled share-based
payment plans) -14 0
------------------------------ --- ---
Proceeds from exercise of
equity-based derivative
financial instruments 4 4
------------------------- --- ---
Net cash flows from financing
activities 439 121
----------------------------- --- ---


Effect of foreign exchange rates
on cash and cash equivalents 70 -25
-------------------------------- --- ---
Net decrease/increase in cash
and cash equivalents 1,721 1,437
----------------------------- ----- -----
Cash and cash equivalents at the
beginning of the period 1,884 1,280
-------------------------------- ----- -----
Cash and cash equivalents at the
end of the period 3,605 2,717
-------------------------------- ----- -----



 

 

 

Supplementary Financial Information

 

RECONCILIATIONS FROM NON-IFRS NUMBERS TO IFRS NUMBERS

(Preliminary and unaudited)

 

The following tables present a reconciliation from our non-IFRS numbers (including our non-IFRS at constant currency numbers) to the respective most comparable IFRS numbers. Note: Our non-IFRS numbers are not prepared under a comprehensive set of accounting rules or principles.

 

 



EUR millions, unless otherwise stated Three months ended June 30


2010
Non- Non-
IFRS Adj.* IFRS* Currency IFRS
impact** constant
currency**
Non-IFRS
Revenue
Numbers
Software
revenue 637 0 637 -66 571
Support
revenue 1,526 0 1,526 -88 1,438
Subscription
and other
software-
related
service
revenue 95 0 95 -3 92
Software
and
software-
related
service
revenue 2,258 0 2,258 -157 2,101
Consulting
revenue 528 0 528 -36 492
Training
revenue 71 0 71 -4 67
Other
service
revenue 18 0 18 -1 17
Professional
services
and other
service
revenue 617 0 617 -41 576
Other
revenue 19 0 19 -1 18
Total
revenue 2,894 0 2,894 -199 2,695

Non-IFRS
Operating
Expense
Numbers
Cost of
software
and
software-
related
services -415 41 -374
Cost of
professional
services
and other
services -497 1 -496
Research
and
development -397 1 -396
Sales and
marketing -658 15 -643
General and
administration -156 9 -147
Restructuring -1 0 -1
Other
operating
income/
expense,
net 4 0 4
Total
operating
expenses -2,120 66 -2,054 107 -1,947

Non-IFRS
Profit
Numbers
Operating
profit 774 66 840 -92 748
Other non-
operating
income/
expense,
net -86 11 -75
Finance
income 11 0 11
Finance
costs -21 0 -21
Other
financial
gains/
losses,
net -2 0 -2
Financial
income,
net -12 0 -12
Profit
before tax 676 77 753
Income tax
expense -185 -17 -202
Profit
after tax 491 60 551
- Profit
attributable
to non-
controlling
interests 0 0 0
-Profit
attributable
to owners
of parent 491 60 551


Non-IFRS
Key Ratios
Operating
margin in
% 26.7 29.0 27.8
Effective
tax rate
in % 27.4 26.8
Basic
earnings
per share,
in EUR 0.41 0.46


2009
Non-
IFRS Adj.* IFRS*
Non-IFRS
Revenue
Numbers
Software
revenue 543 0 543
Support revenue 1,337 0 1,337
Subscription
and other
software-
related
service
revenue 73 0 73
Software and
software-
related
service
revenue 1,953 0 1,953
Consulting
revenue 517 0 517
Training
revenue 70 0 70
Other service
revenue 23 0 23
Professional
services and
other service
revenue 610 0 610
Other revenue 13 0 13
Total revenue 2,576 0 2,576

Non-IFRS
Operating
Expense
Numbers
Cost of
software and
software-
related
services -400 48 -352
Cost of
professional
services and
other services -467 1 -466
Research and
development -373 1 -372
Sales and
marketing -561 19 -542
General and
administration -123 0 -123
Restructuring -17 0 -17
Other operating
income/
expense, net 6 0 6
Total operating
expenses -1,935 69 -1,866


Non-IFRS
Profit Numbers
Operating
profit 641 69 710
Other non-
operating
income/
expense, net -22 0 -22
Finance income 8 0 8
Finance costs -28 0 -28
Other financial
gains/losses,
net -3 0 -3
Financial
income, net -23 0 -23
Profit before
tax 596 69 665
Income tax
expense -170 -17 -187
Profit after
tax 426 52 478
- Profit
attributable
to non-
controlling
interests 1 0 1
-Profit
attributable
to owners of
parent 425 52 477

Non-IFRS Key
Ratios
Operating
margin in % 24.9 27.6
Effective tax
rate in % 28.5 28.1
Basic earnings
per share, in
EUR 0.36 0.40


Change in %
Non-
IFRS IFRS* Non-IFRS
constant
currency**
Non-IFRS
Revenue Numbers
Software revenue 17 17 5
Support revenue 14 14 8
Subscription and
other software-
related service
revenue 30 30 26
Software and
software-
related service
revenue 16 16 8
Consulting
revenue 2 2 -5
Training revenue 1 1 -4
Other service
revenue -22 -22 -26
Professional
services and
other service
revenue 1 1 -6
Other revenue 46 46 38
Total revenue 12 12 5

Non-IFRS
Operating
Expense Numbers
Cost of software
and software-
related
services 4 6
Cost of
professional
services and
other services 6 6
Research and
development 6 6
Sales and
marketing 17 19
General and
administration 27 20
Restructuring -94 -94
Other operating
income/
expense, net -33 -33
Total operating
expenses 10 10 4

Non-IFRS Profit
Numbers
Operating profit 21 18 5
Other non-
operating
income/
expense, net >100 >100
Finance income 38 38
Finance costs -25 -25
Other financial
gains/losses,
net -33 -33
Financial
income, net -48 -48
Profit before
tax 13 13
Income tax
expense 9 8
Profit after tax 15 15
- Profit
attributable to
non-
controlling
interests -100 -100
-Profit
attributable to
owners of
parent 16 16

Non-IFRS Key
Ratios
Operating margin
in % 1.8pp 1.4pp 0.2pp
Effective tax
rate in % -1.1pp -1.3pp
Basic earnings
per share, in EUR 14 15



* Adjustments in the revenue line items are for support revenue that
an entity acquired by SAP would have recognized had it remained a
stand-alone entity 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 and discontinued activities. See
Explanations of Non-IFRS Measures for details.

** Constant currency revenue and operating income 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. See
Explanations of Non-IFRS Measures for details.

Differences may exist due to rounding.


 

 

 


EUR millions, unless otherwise stated Six months ended June 30


2010
Non- Non-
IFRS Adj.* IFRS* Currency IFRS
impact** constant
currency**
Non-IFRS
Revenue Numbers
Software revenue 1,101 0 1,101 -81 1,020
Support revenue 2,920 0 2,920 -98 2,822
Subscription and
other software-
related service
revenue 184 0 184 -2 182
Software and
software-
related service
revenue 4,205 0 4,205 -182 4,023
Consulting
revenue 1,007 0 1,007 -41 966
Training revenue 130 0 130 -5 125
Other service
revenue 37 0 37 0 37
Professional
services and
other service
revenue 1,174 0 1,174 -46 1,128
Other revenue 24 0 24 -1 23
Total revenue 5,403 0 5,403 -229 5,174

Non-IFRS
Operating
Expense Numbers
Cost of software
and software-
related
services -814 81 -733
Cost of
professional
services and
other services -948 2 -946
Research and
development -790 3 -787
Sales and
marketing -1,215 27 -1,188
General and
administration -304 9 -295
Restructuring -1 0 -1
Other operating
income/
expense, net 0 0 0
Total operating
expenses -4,072 121 -3,951 109 -3,842

Non-IFRS Profit
Numbers
Operating profit 1,331 121 1,452 -120 1,332
Other non-
operating
income/
expense, net -122 17 -105
Finance income 22 0 22
Finance costs -33 0 -33
Other financial
gains/losses,
net -1 0 -1
Financial
income, net -12 0 -12
Profit before
tax 1,197 138 1,335
Income tax
expense -319 -30 -349
Profit after tax 878 108 986
- Profit
attributable to
non-
controlling
interests 1 0 1
-Profit
attributable to
owners of
parent 877 108 985

Non-IFRS Key
Ratios
Operating margin
in % 24.6 26.9 25.7
Effective tax
rate in % 26.6 26.1
Basic earnings
per share, in EUR 0.74 0.83


2009
Non-
IFRS Adj.* IFRS*
Non-IFRS Revenue
Numbers
Software revenue 962 0 962
Support revenue 2,589 11 2,600
Subscription and
other software-
related service
revenue 144 0 144
Software and
software-related
service revenue 3,695 11 3,706
Consulting revenue 1,071 0 1,071
Training revenue 142 0 142
Other service revenue 47 0 47
Professional services
and other service
revenue 1,260 0 1,260
Other revenue 19 0 19
Total revenue 4,974 11 4,985

Non-IFRS Operating
Expense Numbers
Cost of software and
software-related
services -786 99 -687
Cost of professional
services and other
services -989 2 -987
Research and
development -738 2 -736
Sales and marketing -1,074 37 -1,037
General and
administration -262 0 -262
Restructuring -183 5 -178
Other operating
income/expense, net 6 1 7
Total operating
expenses -4,026 147 -3,879

Non-IFRS Profit
Numbers
Operating profit 948 158 1,106
Other non-operating
income/expense, net -23 0 -23
Finance income 17 0 17
Finance costs -53 0 -53
Other financial
gains/losses, net -6 0 -6
Financial income, net -42 0 -42
Profit before tax 883 158 1,041
Income tax expense -261 -40 -301
Profit after tax 622 118 740
- Profit
attributable to non-
controlling
interests 1 0 1
-Profit attributable
to owners of parent 621 118 739

Non-IFRS Key Ratios
Operating margin in % 19.1 22.2
Effective tax rate in
% 29.6 28.9
Basic earnings per
share, in EUR 0.52 0.62


Change in %
Non- Non-
IFRS IFRS* IFRS
constant
currency**
Non-IFRS Revenue
Numbers
Software revenue 14 14 6
Support revenue 13 12 9
Subscription and other
software-related
service revenue 28 28 26
Software and software-
related service
revenue 14 13 9
Consulting revenue -6 -6 -10
Training revenue -8 -8 -12
Other service revenue -21 -21 -21
Professional services
and other service
revenue -7 -7 -10
Other revenue 26 26 21
Total revenue 9 8 4

Non-IFRS Operating
Expense Numbers
Cost of software and
software-related
services 4 7
Cost of professional
services and other
services -4 -4
Research and
development 7 7
Sales and marketing 13 15
General and
administration 16 13
Restructuring -99 -99
Other operating
income/expense, net -100 -100
Total operating
expenses 1 2 -1

Non-IFRS Profit
Numbers
Operating profit 40 31 20
Other non-operating
income/expense, net >100 >100
Finance income 29 29
Finance costs -38 -38
Other financial gains/
losses, net -83 -83
Financial income, net -71 -71
Profit before tax 36 28
Income tax expense 22 16
Profit after tax 41 33
- Profit attributable
to non-controlling
interests 0 0
-Profit attributable
to owners of parent 41 33

Non-IFRS Key Ratios
Operating margin in % 5.5pp 4.7pp 3.5pp
Effective tax rate in
% -3.0pp -2.8pp
Basic earnings per
share, in EUR 42 34



* Adjustments in the revenue line items are for support revenue that
an entity acquired by SAP would have recognized had it remained a
stand-alone entity but that SAP is not permitted to recognize as
revenue under IFRS as a result of business combination accounting
rules. See Explanations of Non-IFRS Measures for details.

** Constant currency revenue figures are calculated by translating
revenue 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.

Differences may exist due to rounding.


 

 

 

REVENUE BY REGION

(Preliminary and unaudited)

 

The following tables present our IFRS and non-IFRS revenue by region based on customer location. The tables also present a reconciliation from our non-IFRS revenue (including our non-IFRS revenue at constant currency) to the respective most comparable IFRS revenue. Note: Our non-IFRS revenues are not prepared under a comprehensive set of accounting rules or principles.

 



EUR millions Three months ended June 30
---------- --------------------------
2010
----
IFRS Adj.* Non-IFRS* Currency Non-IFRS
---- ----- --------- impact** constant
-------- currency**
----------
Software revenue by
region
-------------------
EMEA 241 0 241 -7 234
---- --- --- --- --- ---
Americas 269 0 269 -39 230
-------- --- --- --- --- ---
Asia Pacific Japan 127 0 127 -20 107
------------------ --- --- --- --- ---
Software revenue 637 0 637 -66 571
---------------- --- --- --- --- ---


Software and software-
related service revenue
by region
------------------------


Germany 360 0 360 0 360
------- --- --- --- --- ---
Rest of EMEA 718 0 718 -26 692
------------ --- --- --- --- ---
Total EMEA 1,078 0 1,078 -25 1,053
---------- ----- --- ----- --- -----
United States 616 0 616 -49 567
------------- --- --- --- --- ---
Rest of Americas 207 0 207 -33 174
---------------- --- --- --- --- ---
Total Americas 822 0 822 -81 741
-------------- --- --- --- --- ---
Japan 111 0 111 -14 97
----- --- --- --- --- ---
Rest of Asia Pacific
Japan 247 0 247 -37 210
-------------------- --- --- --- --- ---
Total Asia Pacific Japan 358 0 358 -51 307
------------------------ --- --- --- --- ---
Software and software-
related service revenue 2,258 0 2,258 -157 2,101
------------------------ ----- --- ----- ---- -----


Total revenue by region
-----------------------
Germany 506 0 506 0 506
------- --- --- --- --- ---
Rest of EMEA 884 0 884 -32 852
------------ --- --- --- --- ---
Total EMEA 1,390 0 1,390 -32 1,358
---------- ----- --- ----- --- -----
United States 802 0 802 -62 740
------------- --- --- --- --- ---
Rest of Americas 275 0 275 -43 232
---------------- --- --- --- --- ---
Total Americas 1,077 0 1,077 -106 971
-------------- ----- --- ----- ---- ---
Japan 125 0 125 -16 109
----- --- --- --- --- ---
Rest of Asia Pacific
Japan 302 0 302 -45 257
-------------------- --- --- --- --- ---
Total Asia Pacific Japan 427 0 427 -61 366
------------------------ --- --- --- --- ---
Total revenue 2,894 0 2,894 -199 2,695
------------- ----- --- ----- ---- -----



EUR millions Three months ended June 30
---------- --------------------------
2009
----
IFRS Adj.* Non-IFRS*
---- ----- ---------
Software revenue by region
--------------------------
EMEA 266 0 266
---- --- --- ---
Americas 164 0 164
-------- --- --- ---
Asia Pacific Japan 114 0 114
------------------ --- --- ---
Software revenue 543 0 543
---------------- --- --- ---


Software and software-related service
revenue by region
-------------------------------------


Germany 329 0 329
------- --- --- ---
Rest of EMEA 701 0 701
------------ --- --- ---
Total EMEA 1,030 0 1,030
---------- ----- --- -----
United States 481 0 481
------------- --- --- ---
Rest of Americas 158 0 158
---------------- --- --- ---
Total Americas 639 0 639
-------------- --- --- ---
Japan 107 0 107
----- --- --- ---
Rest of Asia Pacific Japan 178 0 178
-------------------------- --- --- ---
Total Asia Pacific Japan 285 0 285
------------------------ --- --- ---
Software and software-related service
revenue 1,953 0 1,953
------------------------------------- ----- --- -----


Total revenue by region
-----------------------
Germany 463 0 463
------- --- --- ---
Rest of EMEA 882 0 882
------------ --- --- ---
Total EMEA 1,345 0 1,345
---------- ----- --- -----
United States 663 0 663
------------- --- --- ---
Rest of Americas 214 0 214
---------------- --- --- ---
Total Americas 877 0 877
-------------- --- --- ---
Japan 126 0 126
----- --- --- ---
Rest of Asia Pacific Japan 229 0 229
-------------------------- --- --- ---
Total Asia Pacific Japan 355 0 355
------------------------ --- --- ---
Total revenue 2,576 0 2,576
------------- ----- --- -----



EUR millions Three months ended June 30
---------- --------------------------
Change in %
----------
IFRS Non-IFRS* Non-IFRS
---- --------- constant
currency**
----------
Software revenue by region
--------------------------
EMEA -9 -9 -12
---- --- --- ---
Americas 64 64 40
-------- --- --- ---
Asia Pacific Japan 11 11 -6
------------------ --- --- ---
Software revenue 17 17 5
---------------- --- --- ---


Software and software-related service
revenue by region
-------------------------------------


Germany 9 9 9
------- --- --- ---
Rest of EMEA 2 2 -1
------------ --- --- ---
Total EMEA 5 5 2
---------- --- --- ---
United States 28 28 18
------------- --- --- ---
Rest of Americas 31 31 10
---------------- --- --- ---
Total Americas 29 29 16
-------------- --- --- ---
Japan 4 4 -9
----- --- --- ---
Rest of Asia Pacific Japan 39 39 18
-------------------------- --- --- ---
Total Asia Pacific Japan 26 26 8
------------------------ --- --- ---
Software and software-related service
revenue 16 16 8
------------------------------------- --- --- ---


Total revenue by region
-----------------------
Germany 9 9 9
------- --- --- ---
Rest of EMEA 0 0 -3
------------ --- --- ---
Total EMEA 3 3 1
---------- --- --- ---
United States 21 21 12
------------- --- --- ---
Rest of Americas 29 29 8
---------------- --- --- ---
Total Americas 23 23 11
-------------- --- --- ---
Japan -1 -1 -13
----- --- --- ---
Rest of Asia Pacific Japan 32 32 12
-------------------------- --- --- ---
Total Asia Pacific Japan 20 20 3
------------------------ --- --- ---
Total revenue 12 12 5
------------- --- --- ---



* Adjustments in the revenue line items are for support revenue that
an entity acquired by SAP would have recognized had it remained a
stand-alone entity but that SAP is not permitted to recognize as
revenue under IFRS as a result of business combination accounting
rules. See Explanations of Non-IFRS Measures for details.

** Constant currency revenue figures are calculated by translating
revenue 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.

Differences may exist due to rounding.


 

 

 

 


EUR millions Six months ended June 30
2010
----
Non-
IFRS Adj.* IFRS* Currency Non-IFRS
---- ----- ----- impact** constant
-------- currency**
----------
Software revenue by
region
-------------------
EMEA 459 0 459 -14 445
---- --- --- --- --- ---
Americas 440 0 440 -40 400
-------- --- --- --- --- ---
Asia Pacific Japan 201 0 201 -26 175
------------------ --- --- --- --- ---
Software revenue 1,101 0 1,101 -81 1,020
---------------- ----- --- ----- --- -----


Software and
software-related
service revenue by
region
-------------------


Germany 671 0 671 -1 670
------- --- --- --- --- ---
Rest of EMEA 1,409 0 1,409 -45 1,364
------------ ----- --- ----- --- -----
Total EMEA 2,079 0 2,079 -44 2,035
---------- ----- --- ----- --- -----
United States 1,087 0 1,087 -23 1,064
------------- ----- --- ----- --- -----
Rest of Americas 399 0 399 -46 353
---------------- --- --- --- --- ---
Total Americas 1,485 0 1,485 -68 1,417
-------------- ----- --- ----- --- -----
Japan 208 0 208 -14 194
----- --- --- --- --- ---
Rest of Asia Pacific
Japan 432 0 432 -54 378
-------------------- --- --- --- --- ---
Total Asia Pacific
Japan 641 0 641 -69 572
------------------ --- --- --- --- ---
Software and
software-related
service revenue 4,205 0 4,205 -182 4,023
----------------- ----- --- ----- ---- -----


Total revenue by
region
----------------
Germany 949 0 949 0 949
------- --- --- --- --- ---
Rest of EMEA 1,743 0 1,743 -56 1,687
------------ ----- --- ----- --- -----
Total EMEA 2,692 0 2,692 -56 2,636
---------- ----- --- ----- --- -----
United States 1,422 0 1,422 -27 1,395
------------- ----- --- ----- --- -----
Rest of Americas 522 0 522 -62 460
---------------- --- --- --- --- ---
Total Americas 1,944 0 1,944 -89 1,855
-------------- ----- --- ----- --- -----
Japan 235 0 235 -15 220
----- --- --- --- --- ---
Rest of Asia Pacific
Japan 531 0 531 -68 463
-------------------- --- --- --- --- ---
Total Asia Pacific
Japan 767 0 767 -84 683
------------------ --- --- --- --- ---
Total revenue 5,403 0 5,403 -229 5,174
------------- ----- --- ----- ---- -----


EUR millions Six months ended June 30
2009
----
Non-
IFRS Adj.* IFRS*
---- ----- -----
Software revenue by
region
-------------------
EMEA 472 0 472
---- --- --- ---
Americas 316 0 316
-------- --- --- ---
Asia Pacific Japan 174 0 174
------------------ --- --- ---
Software revenue 962 0 962
---------------- --- --- ---


Software and
software-related
service revenue by
region
-------------------


Germany 605 0 605
------- --- --- ---
Rest of EMEA 1,307 4 1,311
------------ ----- --- -----
Total EMEA 1,912 4 1,916
---------- ----- --- -----
United States 941 6 947
------------- --- --- ---
Rest of Americas 312 0 312
---------------- --- --- ---
Total Americas 1,253 6 1,259
-------------- ----- --- -----
Japan 203 0 204
----- --- --- ---
Rest of Asia Pacific
Japan 326 0 327
-------------------- --- --- ---
Total Asia Pacific
Japan 530 1 530
------------------ --- --- ---
Software and
software-related
service revenue 3,695 11 3,706
----------------- ----- --- -----


Total revenue by
region
----------------
Germany 895 0 896
------- --- --- ---
Rest of EMEA 1,673 4 1,676
------------ ----- --- -----
Total EMEA 2,568 4 2,572
---------- ----- --- -----
United States 1,313 6 1,319
------------- ----- --- -----
Rest of Americas 425 0 425
---------------- --- --- ---
Total Americas 1,738 6 1,744
-------------- ----- --- -----
Japan 246 0 246
----- --- --- ---
Rest of Asia Pacific
Japan 422 0 423
-------------------- --- --- ---
Total Asia Pacific
Japan 668 1 669
------------------ --- --- ---
Total revenue 4,974 11 4,985
------------- ----- --- -----


EUR millions Six months ended June 30
Change in %
----------
Non-
IFRS IFRS* Non-IFRS
---- ----- constant
currency**
----------
Software revenue by
region
-------------------
EMEA -3 -3 -6
---- --- --- ---
Americas 39 39 27
-------- --- --- ---
Asia Pacific Japan 16 16 1
------------------ --- --- ---
Software revenue 14 14 6
---------------- --- --- ---


Software and
software-related
service revenue by
region
-------------------


Germany 11 11 11
------- --- --- ---
Rest of EMEA 8 7 4
------------ --- --- ---
Total EMEA 9 9 6
---------- --- --- ---
United States 15 15 12
------------- --- --- ---
Rest of Americas 28 28 13
---------------- --- --- ---
Total Americas 19 18 13
-------------- --- --- ---
Japan 3 2 -5
----- --- --- ---
Rest of Asia Pacific
Japan 33 32 16
-------------------- --- --- ---
Total Asia Pacific
Japan 21 21 8
------------------ --- --- ---
Software and
software-related
service revenue 14 13 9
----------------- --- --- ---


Total revenue by
region
----------------
Germany 6 6 6
------- --- --- ---
Rest of EMEA 4 4 1
------------ --- --- ---
Total EMEA 5 5 2
---------- --- --- ---
United States 8 8 6
------------- --- --- ---
Rest of Americas 23 23 8
---------------- --- --- ---
Total Americas 12 11 6
-------------- --- --- ---
Japan -4 -4 -11
----- --- --- ---
Rest of Asia Pacific
Japan 26 26 9
-------------------- --- --- ---
Total Asia Pacific
Japan 15 15 2
------------------ --- --- ---
Total revenue 9 8 4
------------- --- --- ---



* Adjustments in the revenue line items are for support revenue that
an entity acquired by SAP would have recognized had it remained a
stand-alone entity but that SAP is not permitted to recognize as
revenue under IFRS as a result of business combination accounting
rules. See Explanations of Non-IFRS Measures for details.

** Constant currency revenue figures are calculated by translating
revenue 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.

Differences may exist due to rounding.


 

 

 

    SHARE-BASED COMPENSATION
(Preliminary and unaudited)

    EUR millions                        Six months ended June 30
2010 2009 Change in %
Share-based compensation per
expense line item
Cost of software and software-
related services 0 2 -100
Cost of professional services and
other services 1 4 -75
Research and development 8 7 14
Sales and marketing 4 4 0
General and administration 4 3 33
Total share-based compensation 17 20 -15


Note: The share-based compensation expenses do not differ between
SAP's IFRS and non-IFRS measures.

Differences may exist due to rounding.

 

 

 

 

    FREE CASH FLOW
(Preliminary and unaudited)

    EUR millions                                   Six months ended June 30
Change in
2010 2009 %
Net cash flows from operating activities 1,282 1,823 -30
Additions to non-current assets excluding
additions from acquisitions -125 -106 18
Free cash flow 1,157 1,717 -33


Differences may exist due to rounding.

 

 

 

 

    DAYS SALES OUTSTANDING
(Unaudited)

                                                   as at June 30, 2010 and
December 31, 2009
Change in
2010 2009 days
Days sales outstanding in days* 73 79 -6


* Day Sales Outstanding (DSO) measures the length of time it takes to
collect receivables. SAP calculates
DSO by dividing the average invoiced accounts receivables balance of
the last 12 months by the average
monthly sales of the last 12 months.

 

 

 

 

 


NUMBER OF EMPLOYEES (in Full-Time Equivalents)



June 30, 2010
-------------
Asia
Pacific
EMEA Americas Japan Total
---- -------- -------- -----
Software and
software-related
services 3,479 1,422 2,100 7,001
----------------- ----- ----- ----- -----
Professional
services and other
services 6,407 3,544 2,243 12,194
------------------- ----- ----- ----- ------
Research and
Development 8,288 2,458 3,600 14,346
------------ ----- ----- ----- ------
Sales & Marketing 4,216 3,704 1,811 9,731
----------------- ----- ----- ----- -----
General &
Administration 1,891 717 418 3,026
--------------- ----- --- --- -----
Infrastructure 1,044 471 208 1,723
-------------- ----- --- --- -----
SAP Group (June 30) 25,325 12,316 10,380 48,021
------------------- ------ ------ ------ ------


SAP Group (average
H1) 25,314 12,117 10,304 47,735
------------------ ------ ------ ------ ------


June 30, 2009
-------------
Asia
Pacific
EMEA Americas Japan Total
---- -------- -------- -----
Software and
software-related
services 3,238 1,239 1,840 6,317
----------------- ----- ----- ----- -----
Professional
services and other
services 6,916 3,597 2,358 12,871
------------------- ----- ----- ----- ------
Research and
Development 8,620 2,553 3,889 15,062
------------ ----- ----- ----- ------
Sales & Marketing 4,320 3,600 1,808 9,728
----------------- ----- ----- ----- -----
General &
Administration 1,945 750 418 3,113
--------------- ----- --- --- -----
Infrastructure 888 409 179 1,476
-------------- --- --- --- -----
SAP Group (June 30) 25,927 12,148 10,492 48,567
------------------- ------ ------ ------ ------


SAP Group (average
H1) 26,422 12,712 10,877 50,011
------------------ ------ ------ ------ ------

 

 

 

 


MULTI-QUARTER SUMMARY
(IFRS and non-IFRS; preliminary und unaudited)



EUR millions, unless otherwise stated Q2/2010 Q1/2010
Software revenue (IFRS) 637 464
Revenue adjustment* 0 0
Software revenue (non-IFRS) 637 464

Support revenue (IFRS) 1,526 1,394
Revenue adjustment* 0 0
Support revenue (non-IFRS) 1,526 1,394

Subscription and other software-related service
revenue (IFRS) 95 89
Revenue adjustment* 0 0
Subscription and other software-related service
revenue (non-IFRS) 95 89

Software and software-related service revenue
(IFRS) 2,258 1,947
Revenue adjustment* 0 0
Software and software-related service revenue
(non-IFRS) 2,258 1,947

Total revenue (IFRS) 2,894 2,509
Revenue adjustment* 0 0
Total revenue (non-IFRS) 2,894 2,509

Operating profit (IFRS) 774 557
Revenue adjustment* 0 0
Expense adjustment* 66 54
Operating profit (non-IFRS) 840 612

Operating margin (IFRS) 26.7 22.2
Operating margin (non-IFRS) 29.0 24.4

Effective tax rate (IFRS) 27.4 25.7
Effective tax rate (non-IFRS) 26.8 25.3

Basic earnings per share, in EUR (IFRS) 0.41 0.33
Basic earnings per share, in EUR (non-IFRS) 0.46 0.37

Headcount** 48,021 47,598


EUR millions, unless otherwise stated Q4/2009 Q3/2009 Q2/2009 Q1/2009
Software revenue (IFRS) 1,120 525 543 418
Revenue adjustment* 0 0 0 0
Software revenue (non-IFRS) 1,120 525 543 418

Support revenue (IFRS) 1,364 1,333 1,337 1,252
Revenue adjustment* 0 0 0 11
Support revenue (non-IFRS) 1,364 1,333 1,337 1,263

Subscription and other software-
related service revenue (IFRS) 82 79 73 71
Revenue adjustment* 0 0 0 0
Subscription and other software-
related service revenue (non-IFRS) 82 79 73 71

Software and software-related service
revenue (IFRS) 2,566 1,937 1,953 1,741
Revenue adjustment* 0 0 0 11
Software and software-related service
revenue (non-IFRS) 2,566 1,937 1,953 1,752

Total revenue (IFRS) 3,190 2,508 2,576 2,397
Revenue adjustment* 0 0 0 11
Total revenue (non-IFRS) 3,190 2,508 2,576 2,408

Operating profit (IFRS) 1,022 619 641 307
Revenue adjustment* 0 0 0 11
Expense adjustment* 113 68 69 78
Operating profit (non-IFRS) 1,134 687 710 396

Operating margin (IFRS) 32.0 24.7 24.9 12.8
Operating margin (non-IFRS) 35.5 27.4 27.6 16.4

Effective tax rate (IFRS) 31.1 20.5 28.5 31.7
Effective tax rate (non-IFRS) 30.5 21.0 28.1 30.1

Basic earnings per share, in EUR (IFRS) 0.57 0.38 0.36 0.17
Basic earnings per share, in EUR (non-
IFRS) 0.64 0.42 0.40 0.22

Headcount** 47,584 47,810 48,567 49,922



* Adjustments in the revenue line items are for support revenue that
an entity acquired by SAP would have recognized had it remained a
stand-alone entity 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 and discontinued
activities. See Explanations of Non-IFRS Measures for details.

** in full-time equivalents at quarter end

Differences may exist due to rounding.

 

EXPLANATIONS OF NON-IFRS MEASURES

This document discloses certain financial measures, such as non-IFRS revenues, non-IFRS expenses, non-IFRS operating income, non-IFRS operating margin, non-IFRS net income, non-IFRS earnings per share, free cash flow as well as constant currency revenue and operating income measures that are not prepared in accordance with IFRS and are therefore considered non-IFRS financial measures. Our non-IFRS financial measures may not correspond to non-IFRS financial measures that other companies report. The non-IFRS financial measures that we report should be considered in addition to, and not as substitutes for or superior to, revenue, operating income, cash flows, or other measures of financial performance prepared in accordance with IFRS. Our non-IFRS financial measures included in this document are reconciled to the nearest IFRS measure in the tables on the pages F8 to F13 above.

 

We believe that the supplemental historical and prospective non-IFRS financial information presented here provides useful supplemental information to investors because it is the same information used by our management in running our business and making financial, strategic and operational decisions - in addition to financial data prepared in accordance with IFRS - to attain a more transparent understanding of our past performance and our future results. The non-IFRS measures as defined below replaced the Non GAAP measures which we used until the termination of our US GAAP reporting. We use these non-IFRS measures consistently in our planning and forecasting, reporting, compensation and external communication. Specifically,

  • Our management primarily uses these non-IFRS measures rather than IFRS measures as the basis for making financial, strategic and operating decisions.
  • The variable remuneration components of our board members and employees are based on revenue and operating profit. However, the basis for the compensation is on non-IFRS revenue and non-IFRS operating profit rather than the respective IFRS measures.
  • The annual budgeting process involving all management units is based on non-IFRS revenues and non-IFRS operating income numbers rather than IFRS numbers with costs such as share-based compensation and restructuring only being considered on corporate level.
  • All monthly forecast and performance reviews with all senior managers globally are based on these non-IFRS measures, rather than IFRS numbers.
  • Both, company-internal target setting and guidance provided to the capital markets are based on non-IFRS revenues and non-IFRS income measures rather than IFRS numbers.

 

We believe that our non-IFRS measures are useful to investors for the following reasons:

  • The non-IFRS measures provide investors with insight into management's decision-making since management uses these non-IFRS measures to run our business and make financial, strategic and operating decisions.
  • The non-IFRS measures provide investors with additional information that enables a comparison of year-over-year operating performance by eliminating certain direct effects of acquisitions.

Our non-IFRS financial measures reflect adjustments based on the items below, as well as the related income tax effects:

Non-IFRS revenue:

Revenues in this document identified as non-IFRS revenue have been adjusted from the respective IFRS numbers by including the full amount of support revenue that would have been recorded by an entity acquired by SAP had it remained a stand-alone entity but which we are not permitted to record as revenue under IFRS due to fair value accounting for the support contracts in effect at the time of the respective acquisition.

 

Under IFRS, we record at fair value the support contracts in effect at the time an entity was acquired. Consequently, our IFRS support revenue, our IFRS software and software-related service revenue and our IFRS total revenue for periods subsequent to acquisitions do not reflect the full amount of support revenue that would have been recorded for these support contracts absent the acquisition by SAP. Adjusting revenue numbers for this revenue impact (if significant) provides additional insight into the comparability across periods of our ongoing performance.

 

Non-IFRS operating expense:

 

Operating expense figures in this report that are identified as non-IFRS operating expense have been adjusted by excluding the following acquisition-related charges:

  • Acquisition related charges
    • Amortization expense/impairment charges of intangibles acquired in business combinations and certain standalone acquisitions of intellectual property (including purchased in-process research and development)
    • Restructuring expenses and settlements of pre-existing relationships incurred in connection with a business combination
    • Acquisition-related third-party expenses
  • Discontinued Activities: Results of the discontinued operations that qualify as such under IFRS in all respects except that they do not represent a major line of business

 

Non-IFRS operating income, non-IFRS operating margin, non-IFRS net income and non-IFRS earnings per share:

Operating income, operating margin, net income and earnings per share in this document identified as non-IFRS operating income, non-IFRS operating margin, non-IFRS net income and non-IFRS earnings per share have been adjusted from the respective operating income, operating margin, net income and earnings per share numbers as recorded under IFRS by adjusting for the above mentioned non-IFRS revenues and non-IFRS expenses.

We exclude the acquisition related expense adjustments for the purpose of calculating non-IFRS operating income, non-IFRS operating margin, non-IFRS net income and non-IFRS earnings per share when evaluating the continuing operational performance of the Company because these expenses generally cannot be changed or influenced by management after the relevant acquisition other than by disposing of the acquired assets. Since management at levels below the Executive Board has no influence on these expenses we generally do not consider these expenses for the purpose of evaluating the performance of management units.

 

We include the revenue adjustements outlined above and exclude the expense adjustements when making decisions to allocate resources, both on a Company level and at lower levels of the organization. In addition, we use these non-IFRS measures to gain a better understanding of the Company's comparative operating performance from period to period. We believe that our non-IFRS financial measures described above have limitations, which include but are not limited to the following:

  • The eliminated amounts may be material to us.
  • Without being analyzed in conjunction with the corresponding IFRS measures the non-IFRS measures are not indicative of our present and future performance, foremost for the following reasons:
    • While our non-IFRS income numbers reflect the elimination of certain acquisition-related expenses, no eliminations are made for the additional revenues and other revenues that result from the acquisitions.
    • The acquisition-related charges that we eliminate in deriving our non-IFRS income numbers are likely to recur should SAP enter into material business combinations in the future.
    • The acquisition-related amortization expense that we eliminate in deriving our non-IFRS income numbers is a recurring expense that will impact our financial performance in future years.
    • The revenue adjustment for the fair value accounting of the acquired entities' support contracts and the expense adjustment for acquisition-related charges do not arise from a common conceptual basis. This is because the revenue adjustment aims to improve the comparability of the initial post-acquisition period with future post-acquisition periods while the expense adjustment aims to improve the comparability between post-acquisition periods and pre-acquisition periods. This should particularly be considered when evaluating our non-IFRS operating income and non-IFRS operating margin numbers as these combine our non-IFRS revenue and non-IFRS expenses despite the absence of a common conceptual basis.

 

Additionally, our non-IFRS measures have been adjusted from the respective IFRS numbers for the results of the discontinued operations that qualify as such under IFRS in all respects except that they do not represent a major line of business. We refer to these activities as "discontinued activities." Under our U.S. GAAP which we provided until 2009, we presented the results of operations of the TomorrowNow entities as discontinued operations. Under IFRS, results of discontinued operations may only be presented as discontinued operations if a separate major line of business or geographical area of operations is discontinued. Our TomorrowNow operations were not a separate major line of business and thus did not qualify for separate presentation under IFRS. We believe that this additional non-IFRS adjustment to our IFRS numbers for the results of our discontinued TomorrowNow activities is useful to investors for the following reasons:

  • Despite the migration from U.S. GAAP to IFRS, we will continue to internally view the ceased TomorrowNow activities as discontinued activities and thus will continue to exclude potential future TomorrowNow results, which are expected to mainly comprise of expenses in connection with the Oracle lawsuit, from our internal management reporting, planning, forecasting, and compensation plans. Therefore, adjusting our non-IFRS measures for the results of the discontinued TomorrowNow activities provides insight into the financial measures that SAP will use internally beginning in 2010 with our migration to IFRS.
  • By adjusting the non-IFRS numbers for the results from our discontinued TomorrowNow operations, the non-IFRS numbers are more comparable to the non-GAAP measures that SAP used through the end of 2009, which makes SAP's performance measures before and after the full IFRS migration easier to compare.

 

We believe, however, that the presentation of the non-IFRS measures in conjunction with the corresponding IFRS measures as well as the relevant reconciliations, provides useful information to management and investors regarding present and future business trends relating to our financial condition and results of operations. We therefore do not evaluate our growth and performance without considering both non-IFRS measures and the relevant IFRS measures. We caution the readers of this document to follow a similar approach by considering our non-IFRS measures only in addition to, and not as a substitute for or superior to, revenues or other measures of our financial performance prepared in accordance with IFRS.

Free Cash Flow

 

We use our free cash flow measure to estimate the cash flow remaining after all expenditures required to maintain or expand the organic business have been paid off. This assists management with the supplemental information to assess our liquidity needs. We calculate free cash flow as net cash from operating activities minus additions to non-current assets, excluding additions from acquisitions. Free cash flow should be considered in addition to, and not as a substitute for or superior to, cash flow or other measures of liquidity and financial performance prepared in accordance with IFRS.

Constant Currency Period-Over-Period Changes

We believe it is important for investors to have information that provides insight into our sales. Revenue measures determined under IFRS provide information that is useful in this regard. However, both sales volume and currency effects impact period-over-period changes in sales revenue. We do not sell standardized units of products and services, so we cannot provide relevant information on sales volume by providing data on the changes in product and service units sold. To provide additional information that may be useful to investors in breaking down and evaluating changes in sales volume, we present information about our revenue and various values and components relating to operating income that are adjusted for foreign currency effects. We calculate constant currency year-over-year changes in revenue and operating income by translating foreign currencies using the average exchange rates from the previous year instead of the report year.

We believe that data on constant currency period-over-period changes has limitations, particularly as the currency effects that are eliminated constitute a significant element of our revenue and expenses and may severely impact our performance. We therefore limit our use of constant currency period-over-period changes to the analysis of changes in volume as one element of the full change in a financial measure. We do not evaluate our results and performance without considering both constant currency period-over-period changes in non-IFRS revenue and non-IFRS operating income on the one hand and changes in revenue, expenses, income, or other measures of financial performance prepared in accordance with IFRS on the other. We caution the readers of this document to follow a similar approach by considering data on constant currency period-over-period changes only in addition to, and not as a substitute for or superior to, changes in revenue, expenses, income, or other measures of financial performance prepared in accordance with IFRS.

 

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