SAP SE Financial Key Figures

2022

SAP assessed the impact of leaving Russia on its business in 2022

The largest impact on SAP's business in 2022 was made by events in Ukraine and the decision to curtail business in Russia and Belarus, according to the annual report on Form 20-F of the German software vendor^[1] on^[2]. The effect of these events on its operating profit under IFRS in 2022 is estimated at €410 million in SAP, mainly due to a decrease in revenue and reserves for bad debts.

Most of all, SAP's business in 2022 was influenced by events in Ukraine and the decision to leave Russia and Belarus, according to the annual report

About 120 million euros of the indicated amount are restructuring costs due to the exit from the Russian market, data are given in the annual report. This type of expenses includes the cost of compensation to employees upon dismissal, depreciation of the right to use office space and data center equipment, write-off of capitalized sales commissions.

About 85 million euros, in particular, SAP in 2022 spent on compensation to employees during dismissal. The vast majority of these costs fell on Russia due to the termination of business in the country.

In 2021, SAP also incurred restructuring costs, but then they mainly included costs for "accelerated harmonization of SAP cloud infrastructure and platforms."

The expected losses on loans in Russia and Belarus for 2022 amount to 62 million euros. Similar losses in 2021 in these countries were about 5 million euros.

SAP revenue in 2022 came out about 220 million euros lower than in 2021, which SAP also associates in its annual report with the decision to stop business in Russia and Belarus.

The document says that the negative impact on revenue and additional costs due to the curtailment of activities in Russia and Belarus affected mainly its business area "Applications, Technologies and Services."

As of the beginning of 2023, three SAP-related legal entities remain active in Russia. They are listed in the company's annual report: SAP CIS, SAP Labs and Emarsis (a Russian subsidiary of Emarsys, which SAP acquired in 2020).

Exit from Russia and a decline in license sales contributed to the fall in SAP profits in 2022

SAP's operating profit (non-IFRS, non- IFRS) for the entire 2022 decreased by 7% and amounted to €8.03 billion in constant currency, follows from the company's statement on quarterly and annual financial results made at the end of January 2023. The first in the list of reasons for the decrease in this indicator in the company led their exit from the markets of Russia and Belarus and reduced sales of licenses.

The contribution to the reduction in operating profit was also made by an increase in investment in R&D, in sales development and marketing, say^[3]

During a conference call with top managers and analysts about financial results, SAP CFO Luka Mucic noted that most of all, SAP's business curtailment in Russia was reflected in the 2nd quarter of 2022, while this did not have time to affect the results of the 1st quarter.

According to the CFO, in 2023 the company does not plan to receive revenue in Russia.

SAP left Russia amid Russian-Ukrainian conflict

SAP's total revenue for the year increased by 11% to €30.9 billion, while from cloud services it grew by 24% in constant currency. License sales sank 39%.

Despite the decline in some indicators, the company believes that it has reached all the planned metrics.

SAP CEO Christian Klein expressed confidence during a conference call that the company will look at 2022 as one of the most important in its history.

More than two years have passed since we launched the transformation strategy. We kept our promises and achieved results, despite the combined influence of three factors: the exit from Russia, the sale of Litmos and the macroeconomic volatility that the world faced, "said Christian Klein.

SAP estimated financial losses from the termination of business in Russia at hundreds of millions of euros

SAP in the 1st quarter of 2022 experienced the impact of events in Ukraine on its business, follows from the company's report on quarterly financial results, published on April 22^[4]. In March, against the background of a special operation in Ukraine, SAP stopped all new sales in Russia and Belarus. Then the company also began to curtail the provision of cloud services. SAP intends to stop supporting its on-premium products in Russia, the report said.

SAP expects that its decision to stop working in Russia and Belarus will have a negative impact on the company's revenue for the entire financial year in the amount of about 300 million euros - in particular, due to the lack of new sales and the termination of the current business. The negative effect on operating profit for the year is estimated at 350 million euros, both due to the impact on revenue and due to increased costs.

The company on the same day, during an open conference call with top SAP managers and analysts, explained that the costs that the company would normally incur in Russia for a long time are now incurred in a very short period. This will greatly affect its losses in operating profit and is one of the reasons why losses in operating profit will be higher than losses in revenue.

SAP calculated the financial effect of the termination of business in Russia "(photo - rb.ru)"

The volume of the cloud order portfolio was reduced by 60 million euros due to the termination of current relations with cloud service customers, and operating profit - by 70 million euros, including due to a decrease in income from on-premium solutions and accelerated depreciation write-offs on data center assets.

The block on the impact of the situation in Ukraine on the company also indicates that, in addition to everything, SAP expects to incur restructuring costs in the amount of 80-100 million euros in fiscal 2022. However, the message does not specify what kind of restructuring we are talking about.

Since 2020, SAP CIS, the Russian division of SAP, is no longer included in the list of the main subsidiaries of the German vendor in its annual reports. The main ones include "subsidiaries," the revenue of which SAP considers significant. When SAP CIS was last included in such a list in 2019, its revenue was 482.5 million euros.

Despite the negative effect of the termination of business in Russia, SAP confirmed its forecast for the current year, according to which the company globally plans to make operating profit in the range of 7.8-8.25 billion euros. Revenue from cloud services is expected at 11.55-11.85 billion euros, from cloud services and the sale of software licenses - 25-25.5 billion euros.

2021

SAP Cloud Business Up 17%

At the end of 2021, SAP revenue amounted to 27.84 billion euros against 27.34 billion euros a year earlier. Thus, annual sales from the German software manufacturer increased by 2%. The company's cloud business grew even more - by 17%, to 9.42 billion euros. At the same time, the implementation of the software not by subscription, but by license decreased by 3%, to 14.66 billion euros. The same amount includes income from the provision of support services for such products.

Revenue from the sale of the SAPS/4HANA cloud system in 2021 was equal to 1.09 billion euros, which is 46% more than a year ago.

In the direction of Applications, Technology & Support in 2021, a turnover of 23.5 billion euros was registered, which is 2% more than a year earlier. Qualtrics, part of the SAP group, earned 929 million euros (+ 37%) for the year, and the company's service business decreased by 4% to 3.23 billion euros.

The largest market for SAP's presence remains the countries of Europe, the Middle East and Africa (EMEA): there the company in 2021 received 12.59 billion euros in revenue, which is 4% more than a year earlier. In Germany, the company's sales rose 8% to €4.34 billion. In the United States, there was revenue of 8.87 billion euros (decline and 3%). In the Asia-Pacific region, SAP sales increased by 3% over the year to reach 4.29 billion euros, including 1.3 billion euros in Japan.

In EMEA, cloud revenue in 2021 increased by 27% to 3.31 billion euros. In the countries of the Americas, this business grew by 10% (to 4.89 billion euros), in the Asia-Pacific - by 18% (to 1.22 billion euros).

SAP's net profit at the end of 2021 reached 5.38 billion euros, an increase of 2% compared to the previous year. The company's headcount for the year increased from 101,476 to 104,364.^[5]

Eighth in the world among ICT developers by revenue

According to Synergy Research Group, the total revenue of the 13 largest manufacturers of software and ICT services for business, including telecom operators, reached $613 billion in this market in 2021, which is 10% more than a year earlier. SAP SE was ranked eighth on this list.

The world's largest manufacturers of ICT solutions for business

Volkswagen beat SAP to become the most expensive company in Germany

On March 17, 2021, SAP lost the title of the most expensive German company to Volkswagen. This is evidenced by the data of the Frankfurt Stock Exchange. Read more here.

2020

Drop in revenue by 1%, to 27.34 billion euros

SAP revenue in 2020 decreased by 1% and amounted to 27.34 billion euros. From the fall in sales, the German company did not sleep the cloud business, the volume of which grew by 17%, to 8.08 billion euros.

SAP said the company managed to overfulfill all financial targets for 2020. For example, the vendor expected revenue in the range of 27.2-27.8 billion euros.

Sales of software and cloud services from SAP in 2020 reached 23.23 billion euros, which is 1% higher than a year ago. The company expected 23.1-23.6 billion euros. Revenues from SaaS and PaaS solutions increased by 27%, from IaaS products - by 23%.

The rapid growth of the cloud business was not enough to increase SAP revenue, it fell by 1%, to 27.34 billion euros

Revenues from the supply of software licenses and support services in 2020 were equal to 15.15 billion euros, down 6% year-on-year. The downturn comes as more customers prefer cloud products.

In the direction of Applications, Technology & Support in 2020, a turnover of 21.68 billion euros was registered against 21.67 billion dollars a year earlier. The service business during this time sank by 8%, to 3.16 billion euros.

Concur, part of the SAP group, earned €1.51 billion in revenue over the year, which is 6% less than a year ago. Revenues at another subsidiary, Qualtrics, jumped by a third, reaching €681m.

EMEA countries remain the largest market for SAP's presence: in 2020, the company received 12.07 billion euros in revenue, which almost exactly corresponds to the result of a year ago. In Germany, sales of the company rose by 2%, to 4.02 billion euros. In the United States, there was revenue of 9.11 billion euros, which is slightly more than a year earlier.

SAP ended 2020 with net income of €5.28 billion versus €3.37 billion in profit a year earlier.^[6]

SAP capitalization fell by 32 billion euros in a day

In one day on October 26, 2020, SAP's market capitalization contracted by 32 billion euros after the company reported financial results that fell short of analysts' expectations. In addition, the German manufacturer of corporate software lowered its forecast for annual income, explaining its decision by the impact of the COVID-19 coronavirus pandemic.

Data from the New York Stock Exchange indicate that by the close of the trading floor on October 26, the SAP quotation rate had sagged by more than 23%. About the same decline is registered on the Frankfurt Stock Exchange. Bloomberg reports that such a rapid decline in the value of SAP securities in one day has not occurred since 1996.

SAP capitalization for the day collapsed by 32 billion euros

As a result, SAP ceased to be the largest technology company in Europe, sliding to third place in terms of market capitalization in the region, the agency said.

Due to the collapse of SAP quotes, the fortune of the company's co-founder Hasso Plattner decreased by $2.4 billion per day. According to the Bloomberg Billionaires Index, 76-year-old Plattner ranks seventh in the list of the richest people in Germany with a net worth of $13.6 billion. About two-thirds of the entrepreneur's fortune falls on SAP shares.

SAP expects the COVID-19 coronavirus pandemic to undermine demand "at least another" in the first half of 2021, as a new wave of quarantine and self-isolation is expected to affect businesses around the world.

The company said that due to the coronavirus, corporate customers are spending less money on its software in 2020. SAP has abandoned its 2023 targets and acknowledged that business recovery from the pandemic will take longer than expected. Under these conditions, the company decided to focus on the cloud business, which remains growing.^[7]

2019: Revenue growth of 12% to €27.55 billion

In 2019, SAP received €27.55 billion in revenue, 12% higher than a year ago. The rise was largely due to the cloud business, the volume of which increased by 39%, to 6.93 billion euros.

Sales of licenses for local (non-cloud) software in 2019 decreased by 2% compared to 2018, amounting to 4.53 billion euros. software the German The company earned 11.55 billion euros on support services, which is 5% more than a year earlier.

SAP Financial Key Figures

Cloud solutions and traditional software brought SAP more than 23 billion euros in annual revenue (an increase of 12%), and services - the remaining 4.54 billion euros (+ 11%).

In 2019, in the direction of Applications, Technology & Services, sales were registered at 23.54 billion euros, an increase of 8% compared to the result of 2018.

Sales in the structure of Intelligent Spend Group increased by 21%, to 3.18 euros, and in the subsidiary Qualtrics revenue amounted to 508 million euros.

The largest market for SAP is EMEA: here revenue in 2019 exceeded 12.1 billion euros, surpassing the value of a year ago by 9%. In the United States, the company's revenues increased by 15%, to 9.08 billion euros. The same growth was all countries in the Americas combined.

In the Asia-Pacific region, SAP's turnover in 2019 amounted to 4.25 billion euros, which is 9% more than a year earlier.

SAP's net profit in 2019 was 3.39 billion euros, down 17% from 2018 profit.

By the end of 2019, SAP's headcount had grown 4% year-on-year to 100,330.

By the end of the reporting year, the number of SAP S/4 HANA customers increased by 24% compared to the same period in 2018 and exceeded 13,800. Approximately 40% of new customers in have not previously used SAP products. ^[8]

2018

Among the largest IT companies in Europe

Data for 2018

32% increase in cloud revenue to €4.99 billion

In 2018, SAP's revenue reached €24.71 billion, up 5% from the previous year. The main merit in this rise belongs to the cloud business: the company's revenues from the implementation of relevant subscriptions and support services amounted to 4.99 billion euros, which is 32% higher than a year ago.

The German company earned 15.63 billion euros at the end of 2018 from sales of software licenses, as well as from related support services. Compared to 2017, this volume of this business decreased by 1%. Annual revenue from sales of cloud subscriptions and software licenses jumped 5%, reaching 20.62 billion euros.

SAP Financial Key Figures

In the direction of Customer Experience, which, in particular, is responsible for the promotion of the CRM system SAP C/4HANA (formerly SAP Hybris), a turnover of 951 million euros was registered in 2018 against 643 million euros in 2017. These results include the indicators of the purchased company Callidus Software.

In the SAP Business Network division, which develops SAP Ariba, SAP Concur and SAP Fieldglass products, sales reached €2.63 billion in 2018. A year earlier, they were at the level of 2.26 billion euros.

The SAP Applications, Technology & Services division ended 2018 with revenues of €20.8 billion, with sales of €20.22 billion in 2017.

SAP's net profit in 2018 was €4.09 billion, up 1% from a year earlier. The volume of orders for the vendor's products for the first time exceeded 10 billion euros.

It also follows from the financial report that by the end of December 2018,    the number of customers using the SAP S/4HANA platform around the world exceeded 10,500, which is 33% higher than a year ago. New customers included Verizon, Cargill (Cargill), Infosys, Nestle, Hilti and Haribo.^[9]

2017: Revenue growth thanks to cloud business

In 2017, SAP's revenue reached €23.5 billion, up 6% from a year earlier. Net profit during this time rose by 12%, amounting to almost 4.1 billion euros.

The financial rise of the German manufacturer of corporate software was largely due to the cloud business, the volume of which in 2017 increased by 26% to 3.8 billion euros. This amount includes subscription sales and customer support services.

Although the traditional software business is growing, the dynamics here remains weak. In 2017, SAP sold software licenses and provided related support services worth €15.8 billion, up 2% from a year ago. Sales of software and cloud solutions directly brought the vendor 19.5 billion euros in revenue - 6% more than in 2016.

Dynamics of changes in software sales and operating profit of SAP

In addition to cloud products, SAP's profit growth was also boosted by the tax credit resulting from the formal transfer of intellectual property rights within the SAP group, U.S. tax reform and the successful operation of Sapphire Ventures' investment arm, which was formerly called SAP Ventures.

It also follows from the report that by the end of December 2017,   the number of customers using the SAP S/4HANA platform worldwide exceeded 7,900, which is 46% more than a year earlier. In particular, companies such as Unilever and Puma began to use the solution. 

SAP's headcount increased by 5% to 88,543 .

SAP Financial Key Figures

The largest market for SAP remains EMEA (Europe, Middle East, Africa), which in 2017 brought the company more than 10.4 billion euros in revenue. Earnings in the Americas reached 9.3 billion euros, in the Asia-Pacific region - about 3.7 billion euros. More than 60% of SAP's cloud revenue came from North and South America.^[10]

2016: Revenue growth to €22.1 billion (+ 6%) thanks to cloud business

On January 24, 2017, SAP published a financial statement in which it reported a 6% increase in annual revenue due to its growing cloud business. The profit of the German enterprise software manufacturer also increased.

In 2016, SAP sales reached 22.1 billion euros against 20.8 billion euros a year earlier. Operating profit climbed 20% to 5.1 billion euros. Net profit rose 18% to 3.6 billion euros.

Генеральный директор SAP Bill McDermott

The company's revenues are growing thanks to the cloud business. In 2016, SAP earned almost 3 billion euros from the sale of cloud subscriptions and related support services, which is almost a third more than in 2015. Sales of software licenses (including support services) amounted to 15.4 billion euros, an increase of 3% compared to a year ago.

Thus, the traditional software business still generates most of SAP's revenue. The company expects the cloud segment to take the lead in revenue by 2018.

By the end of December 2016, the number of customers using the SAP S/4HANA platform worldwide had reached 5,400, compared to 4,100 three months earlier. The number of employees in the company for the year increased by almost 7,200 people and amounted to 84,183 .

Together with the publication of financial results, SAP announced its intentions to increase dividend payments for 2016. In 2015, the company paid shareholders 1.15 euros for each security they owned. The decision on the amount of payments will be made in February 2017, said SAP CFO Luka Mucic.

SAP also released its revenue guidance. At the end of 2017, SAP expects operating profit in the range from 6.8 to 7 billion euros, while it previously predicted 6.7-7 billion euros. The profit forecast for 2020 has been raised from 8-9 billion euros to 8.5-9 billion euros.^[11]

2015: Revenue growth 18% to €20.8 billion

On January 11, 2016, SAP published its 2015 financial statement. The company's sales climbed 18%, helped by its success in the cloud market.

According to the published data, for the 12-month reporting period closed on December 31, 2015, SAP's consolidated revenue in accordance with international financial reporting standards amounted to 20.8 billion euros against 17.6 billion euros a year earlier. Profit during this time decreased by 2% to 4.25 billion euros.

Cloud business helps SAP boost revenue by 18%

SAP was able to increase sales due to the fact that the company's cloud business doubled. In 2014, the German manufacturer earned €1.09 billion from the sale of cloud subscriptions and related support services, and a year later revenue rose to €2.29 billion.

At the same time, traditional software remains the main source of SAP earnings. In 2015, software license sales reached €4.84 billion, up 10% year-on-year. Revenue from the provision of support services to the owners of such licenses jumped even more - by 14%, exceeding 10 billion euros. Thus, the traditional software business brought the company about 14.9 billion euros in annual revenue.

Among the results of the company:

• The key indicator of sales growth in the cloud segment - the number of new "cloud" customers increased by 103% at the end of the year and reached 883 million euros.
• Cloud subscription services and their support became the main drivers of cloud growth, adding 45% and reaching a volume of 3.7 billion euros for the year
• According to unaudited data, revenue from cloud subscription services and their support increased by 109% - to 2.3 billion euros (2 billion euros in hard currency, according to the company)
• According to unaudited data, revenue from "clouds" and software products increased by 20% (12% in hard currency, exceeding the company's forecasts)
• According to unaudited data, operating income grew by 13%, reaching 6.35 billion euros (5.903 billion euros in hard currency, which exceeds the company's expectations)
• The company predicts growth of up to 4 billion euros by 2017 due to "cloud" subscription services based on unaudited data.

The SAP report also states that by the end of December 2015, the number of customers using the SAP S/4HANA platform worldwide exceeded 2,700, more than twice as many as three months earlier.

Our vision of competition in the cloud market and the rapid adoption of S/4HANA gives us great confidence in our business in 2016 and beyond, said SAP CEO Bill McDermott.

Shortly before the annual reporting was published, SAP announced that it had begun working with integrator Accenture to promote SAP S/4HANA. Companies plan to develop solutions on this platform for certain industries and develop various marketing initiatives.^[12]

"The strong performance of 2015 shows that the SAP S4/HANA innovation cycle is well underway," said SAP CEO Bill McDermot. - The completeness of our expertise in the cloud segment has become an important difference from traditional software solution providers. We exceed expectations in cloud services and software, show faster growth in operating income and are confident that SAP will remain a profitable and growing business in the future. "

Companies are increasingly turning to SAP to manage their human capital globally, both as temporary employees and as staff. The number of customers of SAP SuccessFactors Employee Central, the core of the human resources solution, for the first time exceeded 1000 companies in the fourth quarter of 2015. Thus, SAP outperformed its main competitors in the field of HCM, and the gap is especially noticeable outside the United States. For example, Lufthansa chose SuccessFactors.

SAP has seen excellent growth in the areas of customer engagement and sales. Companies get the opportunity to build new, more personalized relationships with their customers, building them richer and more contextual through all channels. New cloud subscriptions to customer acquisition and sales solutions saw triple-digit growth in 2015.

SAP is one of the leading companies in the field of high-load networks. SAP Business Network Group includes Ariba, Fieldglass and Concur, providing the same attributes of a rich open platform and a large ecosystem of customers, suppliers, partners and developers, thus providing opportunities to enhance innovation. The number of new cloud contracts in the field of business networks increased by 187% at the end of the year and reached 309 million euros.

At the end of 2015, approximately 2 million connected companies spent more than 740 billion euros on the Ariba network, more than 32 million end users carried out their trips and expenses through Concur, and with the help of Fieldglass, more than 1.9 temporary personnel from 130 countries were coordinated.

Regional data - double-digit growth in all regions, both in the "clouds" and traditional software. Europe, the Middle East and Africa (EMEA) performed well in the fourth quarter of 2015, showing an 11% increase in unaudited data, including double-digit growth in license sales in Germany and Russia. According to unaudited reporting, the number of cloud subscriptions and support in the region grew by 53% with a steady double-digit growth in new cloud contracts.

The American region is also experiencing stable double-digit growth: according to unaudited data, revenue from cloud services and traditional software grew by 27% in the 4th quarter, including strong revenues from software sales in the United States. Brazil also posted double-digit revenue growth despite a volatile macro environment.

The growth of the cloud segment and traditional software in the American region, according to unaudited data, amounted to 89% with a significant double-digit share of new cloud contracts.

Asia Pacific saw solid double-digit growth in the fourth quarter (according to unaudited data), with cloud services and traditional software growth of 18%, including solid double-digit growth in new traditional software contracts in Australia and India.

2014: Annual revenue growth of 4% to €17.5 billion

On January 12, 2015, SAP published its 2014 financial statement. Sales grew by 4%, but profits fell by 3%, which The Wall Street Journal linked to the continued transition of the German company from traditional software to cloud.^[13]

At the end of 2014, SAP's total revenue amounted to 17.56 billion euros against 16.82 billion euros a year earlier. For the first time, the cloud business accounted for annual revenue exceeding 1 billion euros: revenue from the implementation of subscriptions to cloud services and the provision of related support services reached 1.09 billion euros, an increase of 56% on an annualized basis.

SAP profits fall 3% due to cloud business

Traditional software, which still accounts for most of SAP's revenue, earned €14.85 billion, up 6% from 2013. The company's operating profit in 2014 left 4.33 billion euros, down 3% from a year ago.

According to analysts, SAP's focus on the cloud market negatively affects the profitability of the company's business. If one-time sales of licenses for software installed on client computers generate profits that are instantly reflected in financial statements, the proceeds from the implementation of subscriptions to cloud solutions stretch over long periods.

In addition, SAP spares no money on expensive acquisitions to strengthen its cloud business. So, in September 2014, SAP announced the purchase of Concur Technologies, a developer of Internet tools for managing corporate spending and business trips, for $8.3 billion. This deal won't pay off soon. According to Morgan Stanley analysts, in 2015 the absorbed Concur will add about 750 million euros to SAP's revenue.

As SAP CFO Luka Mucic said, plunging into the cloud market and increasing revenue from support services, the company will be able to increase the scale of its business and make it more predictable.

True, it is not known whether this strategy will help improve profitability, experts at J.P. Morgan warn. In their opinion, SAP may lower its previously announced forecast for reaching a 35 percent profit margin in 2017.

2013: Revenue growth 4% to €16.8 billion

SAP revenue in 2013 increased by 4% to €16.82 billion compared to €16.22 billion in 2012. Profit after tax amounted to €3.33 billion compared to €2.82 billion a year earlier - an increase of 18%.

Revenues from software sales in 2013 decreased by 3% to 4.52 billion, while from cloud services - increased by 158% to 697 million euros, and its main driver was sales of the SAP HANA platform . The decline in sales of traditional software in the company is explained by fluctuations in exchange rates. With a constant exchange rate for the whole of 2013, revenue in this area shows an increase of 2%.

Commenting on the financial results, the company noted that SAP is "one of the few global technology companies that have been able to successfully move to the cloud, while developing key business areas and increasing profitability."

Support services brought SAP revenues of 8.74 billion euros in 2013 - which is 6% more than in 2012.

2012

HANA leads to success

SAP's revenue from sales of software and related services showed significant growth, largely due to the success of SAP HANA systems and the rapid development of cloud solutions, the company said in an official release of January 2013, dedicated to the preliminary results of the fourth quarter and the whole next financial year.

According to the terminology of this document, during the specified period, the company managed to achieve a "breakthrough in the cloud market" and "exceed the goals" set for revenue from SAP HANA, this is how Jim Hagermann Snayb and Bill McDermott described the financial results of the vendor co-director.

Separately, in the fourth quarter, SAP revenue from software sales increased by 9% to $1.94 billion, while revenue from software-related services amounted to $4.23 billion, which is 14% of the same period last year, according to IFRS calculations. In general, revenue for the fourth quarter rose 12% year-on-year to $5.02 billion.

Nevertheless, the operating profit calculated under IFRS decreased in the fourth quarter by 5% to $1.59 billion. For the year as a whole, revenue (not under IFRS) increased by 14% to more than $16 billion, and profit - by 11% to $5.21 billion. At the same time, operating profit under IFRS for the year as a whole decreased by 17% to $4.06 billion. The latter circumstance is explained by a large share of investments in innovation and active expansion in geographical markets.

Sales of HANA systems as a whole for fiscal year 2012 reached $390 million, mobile software - $222 million, and cloud solutions - $850 million. In America, sales of software and related services grew by 17% over the year to $1.49 billion, and in the EMEA region - by 10% to $2.02 billion.

Q3: 17% increase in software sales

SAP revenue from software sales in the third quarter of 2012 increased by 17% to 1.026 billion euros. Revenue from sales of software and related services in the third quarter of 2012 increased by 19% to 3.21 billion euros. Operating profit (not according to IFRS) for the specified period increased by 10% - to 1.24 billion euros.

In addition, in all regions there is a growing demand for the categories of innovative SAP products. Revenues from sales of the SAP HANA solution reached 83 million euros, and it is expected that over the whole year they will amount to at least 320 million euros. Sales of mobile solutions rose to 48 million euros, and, according to SAP forecasts, the company will receive 220 million euros in a whole year. In the third quarter, the successful promotion of SAP cloud services was also observed: the demand for subscriptions and more expensive services increased by 92%.

As for the company's Russian business, SAP traditionally does not disclose specific figures for revenue in the local market. However, as commented by the CEO of SAP CIS (SAP CIS), Igor Bogachev, in the third quarter the division showed an increase of 27.92% in the segment of medium and small businesses compared to the same period last year.

Q2: Revenue growth of 26%

According to the financial statements of SAP AG for the second quarter of 2012, the vendor's revenue increased by 26% in the next reporting three months. Moreover, double-digit growth was recorded in all regions of the company's presence. In total, the company's revenue reached $1.3 billion (or 1.06 billion euros).

Revenue from the sale of software and related services increased by 21% to 3.12 billion euros, according to preliminary estimates by SAP, which will finally calculate the quarter's results by July 24, 2012. Operating profit of the corporation increased by 7% to 0.92 billion euros for the specified period.

SAP AG co-directors Bill McDermott and Jim Hagerman Snaib said the "record financial performance stands for itself. We have achieved double-digit growth in all regions due to the serious successes of SAP HANA, mobile and cloud solutions. "

Sales of SAP HANA and other DBMS "have shown excellent results in all regions," according to SAP. SAP recently bought SuccessFactors, which will allow the corporation to gain a foothold in the cloud market. Taking into account this step and other transactions, the company's staff will grow by more than 5 thousand employees this year, according to its official statement.

Q1: 11% revenue growth

SAP published preliminary financial results for the first quarter of 2012. Compared to the same period last year, the company's revenues increased by 11% and reached $4.46 billion. Profit increased by 6% and now amounts to $839 million. Compared to the previous quarter, profit decreased by 18.8%, a year earlier, such a reduction was 19.7%.

In accordance with IFRS, revenues from sales of software and related services in the first quarter increased by 13% and reached $3.49 billion. Net software revenues increased by 4% to $853 million.

If you exclude the impact of acquisitions made during the year and currency fluctuations, SAP revenues in the first quarter increased by 8%, from software sales - by 1%. Taking into account similar amendments in the second quarter, the company expects to increase revenues from software sales and related services by 14-16%, software sales in its pure form - by 15-20%. Bill McDermott, co-president of SAP, explains such bold forecasts by the presence of projects in development.

At the end of 2012, if the euro remains stable, SAP expects a 10-12% increase in revenues from software sales and related services. These figures include a 2 percentage point correction that enabled the acquisition of the SuccessFactors business to be obtained. Compared to $6.27 billion in revenues received in 2011, the company intends to raise from $6.73 billion to $6.99 billion. SAP has all the prerequisites for optimism: without taking into account the acquisitions made for the year, its staff grew by 1,700 employees on a full basis. As of March 31, SAP employs 59,400 specialists.

The company's revenues grew fastest in the Asia-Pacific region and Japan: by 22% of software sales and related services and by 19% of software in its pure form. However, according to SAP co-president Jim Hagemann Snabe, the emerging trend has nothing to do with the situation in other markets. For example, on the American continents, software sales revenues decreased by 4% to $314 million, mainly due to low performance in North America.

2011: Software revenue growth of 25% for the year

Revenues from the sale of software for 2011 increased by 25% and amounted to 4 billion euros, and the result of economic activity, calculated not in accordance with IFRS, increased to 4.8 billion euros (if we consider the exchange rates unchanged).

• Record Software Sales Revenue: Software sales revenues increased by 22% (or 25% if the exchange rates are considered unchanged) to EUR 3.97 billion for the full year 2011.

• The results exceeded the company's forecast: income from sales of software and related services for 2011, calculated not in accordance with IFRS, increased by 15% (or 17%, if we consider the exchange rates unchanged).

• The results of business activities exceeded the values predicted by the company: the result of business activities for the full year 2011, calculated not in accordance with IFRS, is expressed in the number of 4.71 billion euros (or 4.78 billion euros, if we consider the exchange rates unchanged). Operating margins not calculated in accordance with IFRS showed an increase of 1.1 percentage points and amounted to 33.1% (if we consider the exchange rates unchanged).

• Double-digit earnings per share growth: 23% for the full year 2011 (not in accordance with IFRS).

• Record cash flow from operating activities: increased by 29% - to 3.78 billion euros.

• Significant contribution was made by income from innovative activities: SAP HANA and SAP Mobile brought 270 million euros.

• Capitalization as of May 24, 2011 - $71.15 billion.
• Capitalization as of February 15, 2011 - 53.79 billion euros.

• Income from the sale of software and related services calculated in accordance with IFRS: €11.32 billion (2010 - €9.79 billion); growth was 16%. Income from the sale of software and related services not calculated in accordance with IFRS: 11.35 billion euros (in 2010 - 9.87 billion euros); an increase of 15% (by 17%, if we consider the exchange rates unchanged).

• Total income calculated in accordance with IFRS: €14.23 billion (in 2010 - €12.46 billion); growth was 14%. Total income not calculated in accordance with the IFRS: 14.26 billion euros (in 2010 - 12.54 billion euros); an increase of 14% (by 15%, if we consider the exchange rates unchanged).

• Income from the sale of software and related services for the full year 2011, calculated not in accordance with IFRS, as well as total income, are presented without taking into account a one-time decrease in deferred additional acquisition income in the amount of 27 million euros (in 2010 - 74 million euros).

• Operating profit calculated in accordance with IFRS: €4.88 billion (in 2010 - €2.59 billion); growth was 88%. Non- IFRS operating profit: EUR 4.71 billion (2010: EUR 4.01 billion); an increase of 18% (by 19%, if you consider the exchange rates unchanged).

• Operating profitability calculated in accordance with IFRS: 34.3% (in 2010 - 20.8%); growth amounted to 13.5 percentage points (pp). Operating margin not calculated in accordance with the IFRS: 33.0% (in 2010 - 32.0%); an increase of 33.1%, if we consider the exchange rates unchanged. The growth amounted to 1.0 pp (or 1.1 pp, if we consider the exchange rates unchanged).

• Operating profit calculated in accordance with IFRS, after taxes: 3.44 billion euros (in 2010 - 1.81 billion euros); 90% increase. Operating profit calculated not in accordance with the IFRS, after taxes: 3.37 billion euros (in 2010 - 2.74 billion euros); growth was 23%. Basic earnings per share calculated in accordance with IFRS were €2.89 (2010: €1.52); 90% increase. Basic earnings per share not calculated in accordance with the IFRS are expressed as €2.83 (2010: €2.30); an increase of 23%.

• The full year 2011 operating profit and operating profit figures calculated in accordance with IFRS were positively affected by the re-evaluation of legal costs associated with the case brought against TomorrowNow, while the full year 2010 figures were markedly affected by this lawsuit. Expenses incurred in 2010, as well as revaluations made in 2011, did not affect SAP's non- IFRS operating profit and operating profitability.

• Effective tax rate (calculated in accordance with IFRS and not in accordance with IFRS) for the full year 2011: 27.8% (22.5% in 2010) and 26.5% (27.2% in 2010), respectively.

• The main reason for this significant difference compared to 2010 is the revaluation of legal costs associated with the TomorrowNow case. In 2010, the tax rate was reduced by almost 5 pp as a result of a significant increase in legal costs in the TomorrowNow case. In 2011, the tax rate increased due to the reduction of these legal costs. Nevertheless, this growth was offset by the tax effects associated with financing projects within the group.

In 2011, the effective tax rate for profit not calculated in accordance with the IFRS was 26.5%, which is lower than the corresponding indicator in 2010 (27.2%). The decrease is mainly due to tax effects related to the financing of projects within the Group.

2010: Sales €12.45 billion (+ 17 %)

Indicators for the whole of 2010:

• Total income calculated in accordance with IFRS: approximately €12.45 billion (2009: €10.67 billion). The growth was about 17%. Total income not calculated in accordance with IFRS: approximately €12.52 billion (2009: €10.68 billion), an increase of about 17% (about 11%, if we consider the exchange rates unchanged).

• Revenue from software sales calculated in accordance with IFRS: approximately €3.26 billion (2009: €2.61 billion), an increase of about 25% (about 16%, if we consider the exchange rates unchanged).

• Income from the sale of software and related services calculated in accordance with IFRS: approximately €9.78 billion (2009: €8.20 billion). The growth was approximately 19%. Income from the sale of software and related services, calculated not in accordance with IFRS: approximately 9.85 billion euros (2009: 8.21 billion euros), increased by about 20% (about 13%, if we consider the exchange rates unchanged).

• SAP's revenue from the sale of software and related services for the whole of 2010, calculated not in accordance with IFRS taking into account unchanged exchange rates, increased by about 13%, which exceeds the company's previously published forecast (9-11%).

• Operating profit calculated not in accordance with IFRS: more than 3.9 billion euros. Operating margin not calculated in accordance with IFRS: approximately 31.5% (2009: 27.4%) or 30.5%, if the exchange rates are considered unchanged. There is an increase of about 4 percentage points (3 percentage points, if we consider the exchange rates unchanged). The operating profitability of SAP from the sale of software and related services for the whole of 2010, calculated not in accordance with IFRS taking into account unchanged exchange rates, amounted to 30%, which corresponds to the company's previously published forecast (30-31%). In 2009, in contrast to 2010, expenses were restructured, which had a negative impact on operating profitability (there was a decrease of 1.8 pp), calculated not in accordance with IFRS.

At the end of 2010, SAP expects to record an operating profit of €1.98 billion. SAP expects that the final tax rate will be lower than the estimated 27.5-28.5%. Secondly, the vendor reserved only $160 million for compensation, Oracle while the court ordered to pay $1.3 billion. Oracle accused its rival of industrial espionage through a subsidiary acquired in 2005. TomorrowNow SAP plans to appeal this verdict.

SAP financials vs. competitors

2008: Capitalization €42bn

The company's capitalization as of June 10, 2008 is 42.6 billion euros.

Dynamics of the company's share prices, 2003 - 2008

2007: Revenue €10.25 billion, net income €756 million

The company's revenue in 2007 amounted to 10.25 billion euros, net profit - 756 million euros. In 2007, more than 39,400 companies located in more than 120 countries used SAP solutions.

Notes