SAP SE

  • WKN: 716460
  • ISIN: DE0007164600
  • Land: Deutschland

Nachricht vom 13.01.2011 | 16:44

SAP AG: SAP Announces Record Fourth Quarter 2010 Software Revenue


SAP AG  / Key word(s): Preliminary Results/Final Results

13.01.2011 16:44

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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Software Revenue Increases Around 34% (Around 24% at Constant Currencies)
To Approximately EUR1.5 billion

Full-Year 2010 Non-IFRS Software and Software Related Service Revenue
Increases Around 20% (Around 13% at Constant Currencies) and Exceeds
Company Guidance

Full-Year 2010 Non-IFRS Operating Margin of Around 31.5% (Around 30.5% at
Constant Currencies)


WALLDORF - January 13, 2011 - After a preliminary review of its 2010 fourth
quarter performance, SAP AG (NYSE: SAP) today announced the following
preliminary financial results for the fourth quarter and full year ended
December 31, 2010.


Fourth Quarter 2010
  - IFRS software revenue: approximately EUR1.50 billion (2009: EUR1.12
    billion), an increase of around 34% (around 24% at constant
    currencies).

  - IFRS software and software-related service revenue: approximately
    EUR3.26 billion (2009: EUR2.57 billion), an increase of around 27%.
    Non-IFRS software and software-related service revenue: approximately
    EUR3.30 billion (2009: EUR2.57 billion), an increase of around 28%
    (around 20% at constant currencies).

  - IFRS total revenue: approximately EUR4.04 billion (2009: EUR3.19
    billion), an increase of around 27%. Non-IFRS total revenue:
    approximately EUR4.08 billion (2009: EUR3.19 billion), an increase of
    around 28% (around 19% at constant currencies).

  - Non-IFRS operating margin: approximately 39% (2009: 35.5%), or
    approximately 38% at constant currencies, an increase of around 4
    percentage points (around 3 percentage points at constant currencies). 
    In contrast to the respective quarter in 2009, the fourth quarter of
    2010 was not materially impacted by restructuring expenses which had,
    in the fourth quarter of 2009, negatively impacted the Non-IFRS
    operating margin by 0.3 percentage points.

Full Year 2010
  - IFRS software revenue: approximately EUR3.26 billion (2009: EUR2.61
    billion), an increase of around 25% (around 16% at constant
    currencies).

  - IFRS software and software-related service revenue: approximately
    EUR9.78 billion (2009: EUR8.20 billion), an increase of around 19%.
    Non-IFRS software and software-related service revenue: approximately
    EUR9.85 billion (2009: EUR8.21 billion), an increase of around 20%
    (around 13% at constant currencies).

  - The Company's full-year 2010 Non-IFRS software and software-related
    service revenue growth rate of around 13% at constant currencies
    exceeds its previously published outlook range of 9% - 11%.

  - IFRS total revenue: approximately EUR12.45 billion (2009: EUR10.67
    billion), an increase of around 17%. Non-IFRS total revenue:
    approximately EUR12.52 billion (2009: EUR10.68 billion), an increase of
    around 17% (around 11% at constant currencies).

  - Non-IFRS operating income: above EUR3.9 billion. Non-IFRS operating
    margin: approximately 31.5% (2009: 27.4%), or approximately 30.5% at
    constant currencies, an increase of around 4 percentage points (around
    3 percentage points at constant currencies). The Company's full-year
    2010 Non-IFRS operating margin at constant currencies at around 30.5%
    is in line with the Company's previously published outlook range of 30
    - 31%. The full year 2010 Non-IFRS operating margin was not materially 
    impacted by restructuring expenses which had negatively impacted the 
    Non-IFRS operating margin by 1.8 percentage points in 2009.

The company has not yet completed its preliminary review of the appropriate
re-measurement of the provision recorded for the TomorrowNow litigation
following the jury verdict of USD 1.3 billion released in November 2010.
The expense resulting from this re-measurement impacts SAP's IFRS operating
margin but does not have an effect on SAP's Non-IFRS operating margin.
Therefore, the company does not yet have available and cannot yet disclose
preliminary fourth quarter and full year 2010 IFRS profit and IFRS
operating margin numbers or reconciliations from the disclosed Non-IFRS
operating margin to the IFRS operating margin.

The company expects that the re-measurement of the provision recorded for
the TomorrowNow litigation will have significant negative impact on SAP's
preliminary fourth quarter and full year 2010 IFRS operating profit and
IFRS operating margin. The company also expects, as a consequence, that the
fourth quarter and full year 2010 IFRS tax rate will be lower than the
Company's previous expectations of 27.5 - 28.5%.

The deferred support revenue write-down from acquisitions and the
acquisition-related charges which are eliminated for the purpose of SAP's
Non-IFRS revenue and operating margin numbers are expected to amount, in
the fourth quarter 2010, to EUR36 million and EUR98 million respectively
(full year 2010: EUR72 million and EUR301 million respectively).

SAP will provide further details of its 2010 preliminary results and
outlook for the full-year 2011 on January 26th.


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Information and Explaination of the Issuer to this News:



For more information, financial community only:
Stefan Gruber +49 (6227) 7-44872 investor@sap.com, CET
Martin Cohen +1 (212) 653-9619  investor@sap.com, ET

For more information, press only:
Christoph Liedtke +49 (6227) 7-50383 christoph.liedtke@sap.com, CET
Guenter Gaugler   +49 (6227) 7-65416 guenter.gaugler@sap.com, CET
Jim Dever    +1 (610) 661-2161  james.dever@sap.com, ET
Lynn Ong   +65 6768 6439 lynn.ong@sap.com, SGT (GMT +8)


About SAP

SAP is the world's leading provider of enterprise application software,
offering solutions that enable companies of all sizes and in more than 25
industries to become best-run businesses. With more than 105,000 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.

# # #

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 (c) 2010 SAP AG. All rights reserved. 
SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects
Explorer, 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 other countries. Business Objects and the Business Objects
logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web
Intelligence, Xcelsius, and other Business Objects products and services
mentioned herein as well as their respective logos are trademarks or
registered trademarks of Business Objects Software Ltd. in the United
States and in other countries. Sybase and Adaptive Server Enterprise,
iAnywhere, Sybase 365, SQL Anywhere and other Sybase products and services
mentioned herein as well as their respective logos are trademarks or
registered trademarks of Sybase, Inc.  All other product and service names
mentioned are the trademarks of their respective companies. Data contained
in this document serves informational purposes only. National product
specifications may vary.


Follow SAP Investor Relations on Twitter at @sapinvestor.

Explanations of Non-IFRS Measures

This document discloses certain financial measures, such as non-IFRS
revenues, non-IFRS expenses, non-IFRS operating income and non-IFRS
operating margin, 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.

We believe that the supplemental historical and prospective non-IFRS
financial information presented in this report provides useful supplemental
information to investors because it is also used by our management - in
addition to financial data prepared in accordance with IFRS - to attain a
more transparent understanding of our past performance and our future
results. At the beginning of 2010 the non-IFRS measures (as defined below)
replaced the non-GAAP measures we used until the termination of our U.S.
GAAP reporting. Specifically, we use these non-IFRS measures consistently
in our planning and forecasting, reporting, compensation, and external
communication, as follows:
  - 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 Executive Board members and
    employees are based on non-IFRS revenue and non-IFRS operating profit
    rather than the respective IFRS measures.

  - The annual budgeting process for all management units is based on
    non-IFRS revenues and non-IFRS operating profit numbers rather than the
    respective IFRS numbers with costs such as share-based compensation and
    restructuring only being considered on a Company level.

  - All forecast and performance reviews with all senior managers globally
    are based on these non-IFRS measures, rather than the respective IFRS
    numbers.

  - Company-internal target setting and guidance provided to the capital
    markets are both based on non-IFRS revenues and non-IFRS profit
    measures rather than the respective 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 adjustments for 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 entities acquired by SAP had they
remained stand-alone entities 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 acquisitions.

Under IFRS, we record at fair value the support contracts in effect at the
time entities were 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 these acquisitions by SAP. Adjusting revenue numbers for
this revenue impact 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

  o Amortization expense/impairment charges of intangibles acquired in
    business combinations and certain standalone acquisitions of
    intellectual property (including purchased in-process research and
    development)

  o Restructuring expenses and settlements of pre-existing relationships
    incurred in connection with a business combination

  o 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 Profit, Non-IFRS Operating Margin

Operating profit and operating margin in this document identified as
non-IFRS operating profit and non-IFRS operating margin have been adjusted
from the respective IFRS measures by adjusting for the above mentioned
non-IFRS revenues and non-IFRS operating expenses.

We exclude certain acquisition related expenses for the purpose of
calculating non-IFRS operating profit and non-IFRS operating margin 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.

Additionally, our non-IFRS measures have been adjusted from the respective
IFRS measures 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 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 treat 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 uses internally.

  - 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 make
    SAP's performance measures before and after the full IFRS migration
    easier to compare.

We include the revenue adjustments outlined above and exclude the expense
adjustments 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:

  o While our non-IFRS profit 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.

  o The acquisition-related charges that we eliminate in deriving our
    non-IFRS profit numbers are likely to recur should SAP enter into
    material business combinations in the future.

  o The acquisition-related amortization expense that we eliminate in
    deriving our non-IFRS profit numbers is a recurring expense that will
    impact our financial performance in future years.

  o 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 profit 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.

  o The results of our discontinued activities could result in significant
    cash outflows.

We believe, however, that the presentation of the non-IFRS measures in
conjunction with the corresponding IFRS measures, together with 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.

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 profit that are adjusted for foreign
currency effects. We calculate constant currency year-over-year changes in
revenue and operating profit by translating foreign currencies using the
average exchange rates from the previous year instead of the current year.

We believe that data on constant currency period-over-period changes have
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
profit on the one hand and changes in revenue, expenses, profit, 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, profit, or other measures of financial performance
prepared in accordance with IFRS.

13.01.2011 DGAP's Distribution Services include Regulatory Announcements, 
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language:     English
Company:      SAP AG
              Dietmar-Hopp-Allee 16
              69190 Walldorf
              Deutschland
Phone:        +49 (0)6227 - 74 74 74
Fax:          +49 (0)6227 - 75 75 75
E-mail:       investor@sap.com
Internet:     www.sap.com
ISIN:         DE0007164600
WKN:          716460
Indices:      DAX
Listed:       Regulierter Markt in Berlin, Frankfurt (Prime Standard),
              Stuttgart; Freiverkehr in Düsseldorf, Hamburg, Hannover,
              München; Terminbörse EUREX; NYSE
 
End of Announcement                             DGAP News-Service
 
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