WALLDORF, Germany — SAP SE (NYSE: SAP) today announced its financial results for the fourth quarter ended December 31, 2020.

Topline Exceeds Full Year Outlook
Operating Profit and Free Cash Flow Up Strongly
“RISE with SAP” To Drive Customers’ Business Transformation in the Cloud
IFRS Cloud Revenue Up 17%, Non-IFRS Cloud Revenue Up 18% At Constant Currencies in FY 2020
Current Cloud Backlog of €7.2 Billion, Up 14% At Constant Currencies
IFRS Cloud Gross Margin 66.5%, Up 3.1pp; Non-IFRS Cloud Gross Margin Reaches 69.6%, Up 1.3pp At Constant Currencies in FY2020
IFRS Operating Profit Up 48%; Non-IFRS Operating Profit Up 4% At Constant Currencies in FY 2020
IFRS EPS Up 56%; Non-IFRS EPS Up 6% in FY 2020
Operating Cash Flow At €7.2 Billion, Approximately Doubling Year over Year; Free Cash Flow at €6.0 Billion in FY 2020,
Significantly Exceeding Raised Outlook
Customer Net Promoter Score Up Sharply; Employee Engagement Index at Record High
2021 Outlook Reflects Expedited Move to Cloud
Successful IPO of Qualtrics

The world’s leading companies are turning to SAP to become intelligent enterprises. We are reinventing how businesses run by accelerating our customers’ transformation in the cloud. Our strong finish to the year and the launch of RISE with SAP, our new holistic business transformation offering, position us well to meet our new outlook targets.

Christian Klein, CEO

In a uniquely challenging environment, 2020 was a record year for cash flow in every single quarter and the full year. Our better-than-anticipated top line performance combined with our quick response on the cost side drove strong operating profit. SAP’s expedited shift to the cloud will drive long-term, sustainable growth while significantly increasing the resiliency and predictability of our business.

Luka Mucic, CFO

Business Update
SAP’s business performance sequentially improved in the fourth quarter even as the COVID-19 crisis persisted and
lockdowns were reintroduced in many regions. Cloud revenue in the fourth quarter continued to be impacted by lower payas-you-go transactional revenue, mainly Concur business travel related. However, continued high demand for e-commerce,
Business Technology Platform, and Qualtrics solutions along with several competitive wins – particularly for SuccessFactors
Human Experience Management – produced a strong finish to the year for SAP’s cloud business. SAP also saw strong early
take up of its new holistic business transformation offering “RISE with SAP” among pilot customers, contributing to the cloud
performance in the fourth quarter. Both North America and Europe experienced a better-than-expected performance in
cloud order entry as well as software licenses revenue reflecting strong demand for SAP’s digital supply chain solutions in
particular. In addition, SAP had significant competitive wins in ERP.
Recent Highlights:
• SAP launched “RISE with SAP” on January 27, 2021, a simplified pathway for customers to transition their mission
critical systems to the cloud and transform their business, delivered as a holistic commercial package with one
subscription fee.
• Successful IPO of Qualtrics on January 28, 2021, maximizing Qualtrics’ opportunity to expand their business and
build the best talent while SAP retains majority ownership. At IPO, the company was valued at almost $18 billion,
more than double the original acquisition price. Qualtrics shares moved even higher on the first day of trading,
ending the day with a gain of just over +50%.
• Completed the acquisition of Emarsys on November 4
th, 2020, a leading omnichannel customer engagement
platform provider.
• Deepened business process intelligence capabilities with the acquisition of Signavio.
• Expanded Microsoft relationship around Teams integration, Industry 4.0 and simplification of SAP ERP migration to
the cloud on Azure.
• Announced a new partnership with Europe’s leading industrial companies, car manufacturers and their suppliers to
build the automotive network of the future.
Throughout the COVID-19 crisis, SAP continues to serve its customers effectively with an embedded virtual sales and remote
implementation strategy. The company retains a disciplined approach to hiring and discretionary spend while capturing
natural savings e. g. from lower travel, facility-related costs and virtual events. In combination with the strong topline
performance these actions drove higher operating profit and operating margin (both in IFRS and non-IFRS at constant
currencies) despite the challenging macro environment.
SAP also continues to be a key technology partner in helping customers and the broader community address COVID-19
challenges. Initiatives include:
• Launched a vaccine collaboration hub (VCH) for Life Sciences organizations to better manage vaccine supply
distribution, and to help governments and their industry partners coordinate and successfully deploy mass
vaccination programs.
• The "Corona Warn App", SAP's contact track and trace app, has now been downloaded more than 25 million times
helping to curb the virus spread.
• Co-innovation with Parkland Health & Hospital System to tackle urgent needs related to COVID-19: a command
center dashboard to make essential decisions; a critical inventory tracker to help ensure real-time accurate tracking
and availability of critical inventory such as ventilators; an online, self-service, multilingual symptom checker
chatbot enabling patients to go through an initial COVID-19 screening thereby reducing load on its overwhelmed call
center and reducing face-to-face interactions to improve safety.
• Partnered with Mercy Technology Services, the IT division of St. Louis-based health system Mercy, to harness the
power of data analytics to produce real-world evidence (RWE) for more informed patient care.

see & read more on
https://www.sap.com/docs/download/investors/2020/sap-2020-q4-statement.pdf

Business Outlook 2021
SAP provides the following full-year 2021 outlook reflecting its solid business momentum and current estimates concerning
the timing and pace of recovery from the COVID-19 crisis. This outlook assumes the COVID-19 crisis will begin to recede as
vaccine programs roll out globally, leading to a gradually improving demand environment in the second half of 2021.
• SAP expects €9.1 – 9.5 billion non-IFRS cloud revenue at constant currencies (2020: €8.09 billion), up 13% to 18%
at constant currencies
• SAP expects €23.3 – 23.8 billion non-IFRS cloud and software revenue at constant currencies (2020: €23.23
billion), flat to up 2% at constant currencies
• SAP expects €7.8 – 8.2 billion non-IFRS operating profit at constant currencies (2020: €8.28 billion), down 1% to
6% at constant currencies
• The share of more predictable revenue (defined as the total of cloud revenue and software support revenue) is
expected to reach approximately 75% (2020: 72%).
Following a record cash flow performance in 2020, the company expects operating cash flow of approximately €6.0 billion
(2020 €7.2 billion) primarily reflecting moderately lower profit, higher expected income tax payments, and adverse currency
exchange movements. Free cash flow is expected above €4.5 billion (2020 €6.0 billion), also impacted by a modest increase
in capex.
While SAP’s full-year 2021 business outlook is at constant currencies, actual currency reported figures are expected to be
impacted by currency exchange rate fluctuations as the Company progresses through the year. See the table below for the
Q1 and FY 2021 expected currency impacts.
Expected Currency Impact Based on December 2020 Level for the Rest of the Year
In percentage points Q1 FY
Cloud revenue -6pp to -8pp -3pp to -5pp
Cloud and software revenue -5pp to -7pp -2pp to -4pp
Operating profit -7pp to -9pp -2pp to -4pp
SAP also confirms its mid-term ambition which was previously published in its Q3 2020 Quarterly Statement.
In addition to the financial goals, SAP also focuses on three non-financial targets for 2021: customer loyalty, employee
engagement, and carbon emissions. SAP aims to achieve a Customer Net Promoter Score score of 5 to 10 in 2021. The
Company targets an Employee Engagement Index in a range of 84% to 86%. Further,the Company targets greenhouse gas
emissions of 145 kt in 2021

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