SAP Announces Preliminary Fourth Quarter and Full-Year 2019 Results

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Overig advies 28/01/2020 08:18
WALLDORF, Germany — SAP SE (NYSE: SAP) today announced its preliminary financial results for the fourth quarter ended December 31, 2019.

New Cloud Bookings Up 25%; Up 31% Excluding Infrastructure as-a-Service in FY 2019
IFRS Cloud Revenue Up 39%; Non-IFRS Cloud Revenue Up 40% in FY 2019
Cloud and Software as Well as Total Revenue Up 12% in FY 2019
Cloud Gross Margin Up 5pp in FY 2019
IFRS Operating Profit Down 21%; Non-IFRS Operating Profit Up 15% in FY 2019
IFRS Operating Margin Down 6.8pp; Non-IFRS Operating Margin Up 0.8pp in FY 2019
IFRS Earnings per Share Down 18%; Non-IFRS Earnings per Share Up 18% in FY 2019
2020 Total Revenue and Operating Profit Outlook Increased from Previous 2020 Ambition
Greenhouse Gas Emissions Reduced for the Fifth Year in a Row; On Track for Being Carbon Neutral by 2025
Women Representation in Workforce 34%; Women in Management 26%, Remains Committed to Goal of 30% by 2022

SAP Cloud Growth, Margin Focus and S/4HANA Adoption Power 2019 Results

SAP’s strategy to be the experience company powered by the intelligent enterprise is resonating. More and more customers are turning to SAP and Qualtrics to close their experience gap. At the same time, we continue to see strong adoption of S/4HANA as the core of the intelligent enterprise across all deployment models.

Jennifer Morgan and Christian Klein, Co-CEOs

For the fifth year in a row, we delivered on our full year outlook. I am particularly proud of our strong increase in non-IFRS profits and margins while continuing our remarkable top line momentum. This success would not have been possible without the dedication, innovative spirit and discipline of our people.

Luka Mucic, CFO

Business Performance
Financial Highlights1
Full Year 2019
SAP hit all of its 2019 revenue and profit targets.
For the full year new cloud bookings were €2.27 billion, up 25% (up 21% at constant currencies) and up 31% excluding Infrastructure-as-aService (IaaS). Cloud subscriptions and support backlog increased 23%, exceeding €12 billion at year-end. Cloud revenue was €6.93 billion
(IFRS) or €6.77 billion (non-IFRS at constant currencies), achieving the full year outlook (€6.7 to €7.0 billion non-IFRS at constant
currencies). Software licenses revenue decreased 2% (down 5% at constant currencies) year over year to €4.53 billion. New cloud and
software license order entry exceeded €11.5 billion and grew by 10% year over year (7% at constant currencies). Cloud and software revenue
was €23.01 billion (IFRS) or €22.49 billion (non-IFRS at constant currencies), achieving the full year outlook (€22.4 to €22.7 billion non-IFRS
at constant currencies). Total revenue was up 12% year over year to €27.55 billion (IFRS), up 12% (non-IFRS) and up 9% at (non-IFRS at
constant currencies).
The share of more predictable revenue grew by 2 percentage points year-over-year to 67% for the full year 2019.
Cloud gross margin increased 4.9 percentage points year over year to 63.5% (IFRS) and increased by 5.2 percentage points year over year to
68.2% (non-IFRS).
As expected, IFRS operating profit, operating margin and earnings per share were impacted by higher acquisition-related charges due to the
Qualtrics acquisition and the charges from SAP’s global restructuring program announced in early 2019. In addition, IFRS operating profit,
operating margin and earnings per share were impacted by higher share-based compensation (due to the Qualtrics acquisition and the
strong SAP share price increase over the year). For the full year, IFRS operating profit was down 21% to €4.50 billion and operating margin
decreased 6.8 percentage points year over year to 16.3% (IFRS). Non-IFRS operating profit at constant currencies was €7.96 billion, achieving
the full year outlook (€7.85 to €8.05 billion non-IFRS at constant currencies). Non-IFRS operating margin expanded by 0.8 percentage points
year over year (non-IFRS) and 0.6 percentage points (non-IFRS at constant currencies).
Earnings per share decreased 18% to €2.80 (IFRS) and increased 18% to €5.11 (non-IFRS).
Operating cash flow for the full year was €3.50 billion, a decrease of 19% year over year. The decrease in operating cash flow was primarily
due to higher payouts related to share-based compensation (€286 million), restructuring payouts (€784 million) and higher tax cash
outflows (€651 million) compared to the full year 2018. In addition, operating cash flow experienced a year over year benefit of roughly €404
million from the application of IFRS 16. Free cash flow decreased 20% year over year to €2.28 billion. At year end, net debt was –€8.29 billion.
Fourth Quarter 2019
In the fourth quarter, new cloud bookings were €878 million, up 19% (up 17% at constant currencies) and up 20% excluding Infrastructureas-a-Service (IaaS). Validating SAP’s hybrid cloud strategy, one of SAP’s largest on premise customers decided to move most of its SAP on
premise landscape to the cloud and augmented the use of SAP SaaS solutions. This contract contributed 10 percentage points to the total
new cloud bookings growth of 19%. SAP expects more of its larger customers to follow this path. Cloud revenue grew 35% year over year to
€1.90 billion (IFRS), up 35% (non-IFRS) and up 32% (non-IFRS at constant currencies). Software licenses revenue was down 4% year over
year to €2.00 billion (IFRS), down 4% (non-IFRS) and down 6% (non-IFRS at constant currencies). New cloud and software order entry
exceeded €5 billion and grew by 6% year over year (5% at constant currencies) in the fourth quarter. Cloud and software revenue grew 8%
year over year to €6.85 billion (IFRS), up 8% (non-IFRS) and 6% (non-IFRS at constant currencies). Total revenue was up 8% year over year
to €8.04 billion (IFRS), up 8% (non-IFRS) and up 6% (non-IFRS at constant currencies).
Cloud gross margin increased 6.9 percentage points year over year to 65.2% (IFRS) and increased by 7.4 percentage points year over year to
69.5% (non-IFRS).
Operating profit decreased 11% year over year to €2.12 billion (IFRS), up 12% (non-IFRS) and up 9% (non-IFRS at constant currencies).
Operating margin decreased 5.9 percentage points year over year to 26.4% (IFRS) and expanded by 1.1 percentage points (non-IFRS) and 1.0
percentage points (non-IFRS at constant currencies).
Earnings per share was down 3% to €1.37 (IFRS) and up 21% to €1.82 (non-IFRS).


1 The full year and Q4 2019 results were also impacted by changes in accounting policies, business combinations and other effects. For details, please refer to the
disclosures on page 32 of this Quarterly Statement.

Segment Performance Fourth Quarter 2019
SAP’s three reportable segments “Applications, Technology & Services”, “Intelligent Spend Group” and “Qualtrics2” showed the following
performance:
Applications, Technology & Services (AT&S)
In the fourth quarter, segment revenue in AT&S was up 5% to €6.97 billion year-over-year (up 3% at constant currencies). Solutions which
contributed to this growth are listed below.
SAP S/4HANA
SAP S/4HANA, the core of the Intelligent Enterprise, embeds analytics, simulation, prediction, and decision support to run LIVE business.
SAP offers customers a choice of deployment options including cloud, on-premise and hybrid so they can choose the scenario or
combination that is right for them. SAP S/4HANA is the market-leading intelligent ERP that provides unparalleled business agility,
empowering companies across all industries to reinvent their business models for the digital economy and navigate dynamic marketplaces.
Approximately 1,200 SAP S/4HANA customers were added in the quarter, taking total adoption to more than 13,800 customers, up 24% year
over year. In the fourth quarter, approximately 40% of the additional SAP S/4HANA customers were net new. 3
In Q4, world class organizations such as Ford Motor Group, Zalando, die Autobahn GmbH, Decathlon, E.ON, Lockheed Martin, MINTH Group,
and Roche selected SAP S/4HANA. Vodafone recently went live on a single global instance of SAP S/4HANA. Additional go lives include BDO,
Deutsche Telekom, Sandvik Mining and Construction, ARAMEX,Aareal Bank and PayPal Giving Fund. A fast-growing number of companies of
all sizes including Kubota Corporation, Gate Gourmet Switzerland, Centaur Holding and Tom Tailor are deploying SAP S/4HANA in part or
entirely in the cloud. Mercedes Benz Formula E is now live on SAP S/4HANA Cloud.
Human Experience Management (HXM)
The SAP SuccessFactors Human Experience Management (HXM) Suite provides powerful solutions for core HR and payroll, talent
management, employee experience management and people analytics to empower employees while enabling HR leaders to accelerate
business growth. As the next evolution of human capital management (HCM), HXM is a new way of delivering software that is designed
completely around what employees need, how they work, and what motivates them. The SAP SuccessFactors HXM Suite is unique in that it
builds on the best of HCM and extends it to create truly dynamic, engaging and employee-centered experiences.
SAP SuccessFactors Human Experience Management solutions from SAP leverage Qualtrics to help customers gain real-time insight into
which behaviors are trending across the organization and the sentiment behind them. More than 450 customers have selected these
solutions since their launch in May 2019.
Landesbank Baden-Württemberg, Genting Hong Kong, and Universal Beijing Resort were some of many competitive wins and Eurobank,
Computacenter and Chalhoub Group went live on SAP SuccessFactors this quarter.
SAP C/4HANA
SAP C/4HANA combines leading solutions for marketing, sales, commerce, service and customer data, enabling companies to manage and
deliver personalized customer experiences across touchpoints and channels based on a complete view of the customer. As part of the
Intelligent Enterprise, SAP C/4HANA integrates with SAP S/4HANA from demand signals to fulfillment in one end-to-end process.
SAP C/4HANA solutions also use the benefits of Qualtrics Customer Experience Management to understand the wants and needs of
customers. This enables organizations to combine customer feedback and operational data to listen, understand and take action in the
moment to improve the customer experience.
The Nielsen Company, Royal Dutch Shell, Chevron, Carhartt, Intersport Deutschland, and Aldo Group all chose SAP C/4HANA solutions in Q4.
Business Technology Platform
SAP’s business technology platform helps customers to turn their data into business value. It encompasses database and data
management, application development and integration, analytics, and intelligent technologies. The business technology platform represents
a combination of SAP’s leading technologies such as SAP HANA, SAP Cloud Platform, SAP Data Warehouse Cloud, SAP Analytics Cloud,
SAP Data Intelligence and SAP Intelligent Robotic Process Automation bundled into one single reference architecture. It supports cloud, onpremise and hybrid customer landscapes. Additionally, the business technology platform offers seamless interoperability with hyperscalers’
technologies to deliver a high level of scalability and flexibility. The business technology platform provides customers with convenient access
to SAP data, SAP technology and SAP pre-configured business services to help them drive business value across their entire solution
landscape.
Barclaycard, Telecom Italia, GetYourGuide and Allegiant Travel Company selected SAP’s business technology platform and analytics cloud
solutions in the fourth quarter.

2 As of Q4 2019, the Company renamed the former Customer and Experience Management segment to Qualtrics segment since our customer experience
offerings are no longer included in this segment. For details, please refer to the disclosures on page 21 of this Quarterly Statement.
3 Please refer to page 33 for information on changes in the definition of S/4HANA and its impact on the respective customer count.

Intelligent Spend Group (ISG)
In the fourth quarter, segment revenue in the Intelligent Spend Group was up 15% to €830 million year-over-year (up 12% at constant
currencies).
With the Intelligent Spend Group, SAP provides collaborative commerce capabilities (SAP Ariba), effortless travel and expense processing
(SAP Concur) and flexible workforce management (SAP Fieldglass). SAP Intelligent Spend is also leveraging Qualtrics. Every Ariba screen will
have Qualtrics embedded to enhance experience and to create a continuous feedback loop for buyers and suppliers on the network. The
Intelligent Spend Group portfolio represents the largest commerce platform in the world with over $3.6 trillion in global commerce annually
transacted in more than 180 countries.
Kärcher, Electrolux, Coca-Cola Hellenic Bottling Company, GEA Group, Repsol, and New York Yankees chose SAP’s Intelligent Spend Group
solutions in the fourth quarter.
Qualtrics
In the fourth quarter, Qualtrics segment revenue was €156 million.
With Qualtrics, SAP combines market leadership in Experience Management (XM) with end-to-end operational power in over 25 industries to
help organizations manage and improve the four core experiences of business: customer, employee, product, and brand. Chalhoub Group is
one example of numerous companies using the SuccessFactors Qualtrics platform.
The Qualtrics XM™ Platform is trusted by over 11,450 customers to listen, understand, and take action on experience data (X-data™) by
combining X-data with the operational data (O-data™) systems of the enterprise.
In Q4, Volkswagen Group Australia, JPMorgan Chase, Allianz SE, Alaska Airlines, ExxonMobil, Santander, Samsung Group and the Hearst
Corporation and many others selected Qualtrics to move beyond systems of record to new systems of action and achieve breakthrough
results.
Segment Results at a Glance4

see & read more on
https://www.sap.com/docs/download/investors/2019/sap-2019-q4-statement.pdf

tijd 10.43
DAX 13.188,54 -16,23 -0,12% SAP EUR 119,36 -3,10 vol. 966.000



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