Form 6-K SAP SE For: Apr 25

April 25, 2022 10:39 AM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

 

April 25, 2022

 

Commission file number:

 

1-14251

 

SAP SE

(Exact name of registrant as specified in its charter)

 

SAP EUROPEAN COMPANY

(Translation of registrant's name into English)

 

Dietmar-Hopp-Allee 16

69190 Walldorf

Federal Republic of Germany

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F [X] Form 40-F  [   ]

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes           [   ] No [X]

 

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_______.

 

 

 

 

SAP SE

 

FORM 6-K

 

On April 25, 2022, SAP SE, (“SAP"), filed a quarterly statement with Deutsche Boerse AG for the first quarter ended March 31, 2022 (the “Quarterly Statement”). The Quarterly Statement is attached as Exhibit 99.1 hereto and incorporated by reference herein.

 

This Quarterly Statement discloses certain non-IFRS measures. These measures are not prepared in accordance with IFRS and are therefore considered non-IFRS financial measures. 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.

 

Please refer to Explanations of Non-IFRS Measures online (www.sap.com/about/investor/index.epx) for further information regarding the non-IFRS measures.

 

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 (the "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.

 

2

 

 

EXHIBITS

 

Exhibit No.Exhibit
  
99.1Quarterly Statement dated April 22, 2022

 

3

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  SAP SE
  (Registrant)
   
   
  By:   /s/ Christopher Sessar  

  Name:  Dr. Christopher Sessar
  Title: Chief Accounting Officer

 

 

  By:   /s/ Christian Kastler  

  Name:  Christian Kastler
  Title: Co-Head of Corporate Accounting and Reporting

 

Date: April 25, 2022

 

4

 

 

EXHIBIT INDEX

 

Exhibit No.Exhibit
  
99.1Quarterly Statement dated April 22, 2022

 

5

 

Exhibit 99.1

 

(GRAPHIC)

 

SAP Announces Q1 2022 Results With Continued Cloud Momentum

 

Cloud revenue growth further accelerates, up 31% and up 25% at constant currencies

 

Current cloud backlog approaches €10bn, up 28% and up 23% at constant currencies

 

SAP S/4HANA cloud revenue significantly increases, up 78% and up 71% at constant currencies. SAP S/4HANA current cloud backlog expands even faster, up 86% and up 79% at constant currencies

 

SAP reaffirms 2022 outlook for revenue, non-IFRS operating profit and free cash flow

  

in € millions, unless otherwise stated

(GRAPHIC)

 

(GRAPHIC)

Christian Klein, CEO: “Customers powered

  (GRAPHIC) Luka Mucic, CFO: “We are off to a solid start to

another quarter of strong cloud growth as they turned to us for solutions to make their businesses more sustainable, their supply chains more resilient, and their enterprises more future-proof. Our signature ERP offering SAP S/4HANA grew at record levels demonstrating the confidence customers place in us to support their business transformations.”

 

 

the year and our outlook remains strong. Despite the current macroeconomic environment, cloud revenue growth accelerated further, fueling total revenue growth. Current cloud backlog grew at a healthy rate and continues to support our confidence in our long-term plans and outlook for the year.”

 

 

(GRAPHIC)

 

Walldorf, Germany – April 22, 2022. SAP SE (NYSE: SAP) today announced its financial results for the first quarter ended March 31, 2022.

 

 

(GRAPHIC)Financial Performance

 

Group results at a glance – First Quarter 2022

 

  IFRS Non-IFRS1
€ million, unless otherwise stated Q1 2022 Q1 2021 ∆ in % Q1 2022 Q1 2021 ∆ in %

∆ in %

const.

curr.

Cloud revenue 2,820 2,145 31 2,820 2,145 31 25
Software licenses 317 483 –34 317 483 –34 –36
Software support 2,923 2,801 4 2,923 2,801 4 1
Software licenses and support revenue 3,240 3,283 –1 3,240 3,283 –1 –4
Cloud and software revenue 6,060 5,428 12 6,060 5,428 12 7
Total revenue 7,077 6,348 11 7,077 6,348 11 7
Share of more predictable revenue (in %) 81 78 3pp 81 78 3pp  
Operating profit (loss) 1,053 960 10 1,677 1,738 –4 –7
Profit (loss) after tax 632 1,070 –41 1,166 1,720 –32  
Earnings per share - Basic (in €) 0.63 0.88 –29 1.00 1.40 –28  
Earnings per share - Diluted (in €) 0.63 0.88 –29        
Net cash flows from operating activities 2,482 3,085 –20        
Free cash flow       2,165 2,848 –24  
Number of employees (FTE, March 31) 109,798 103,142 6        

 

1 For a breakdown of the individual adjustments see table “Non-IFRS Adjustments by Functional Areas” in this Quarterly Statement.

 

Due to rounding, numbers may not add up precisely

  

Cloud Performance

 

  IFRS Non-IFRS1
€ millions, unless otherwise stated Q1 2022 ∆ in % Q1 2022 ∆ in %

∆ in %

constant

currency

Current Cloud Backlog          
SAP S/4HANA2     1,925 86 79
Total2     9,731 28 23
Cloud Revenue          
SaaS/PaaS 2,585 34 2,585 34 28
SaaS/PaaS - Intelligent Spend 808 23 808 23 16
SaaS/PaaS - Other 1,776 40 1,776 40 34
IaaS 235 10 235 10 5
Total 2,820 31 2,820 31 25
thereof SAP S/4HANA 404 78 404 78 71
thereof Qualtrics 269 69 269 69 58
Cloud gross profit          
SaaS/PaaS 1,858 36 1,909 34 28
SaaS/PaaS - Intelligent Spend 652 27 653 27 20
SaaS/PaaS - Other 1,206 41 1,257 39 33
IaaS 63 –9 65 –9 –7
Total 1,922 33 1,974 32 26
thereof Qualtrics 207 70 241 64 53
Cloud gross margin (in %)          
SaaS/PaaS (in %) 71.9 0.9pp 73.9 0.3pp 0.2pp
SaaS/PaaS - Intelligent Spend 80.7 2.5pp 80.7 2.4pp 2.2pp

2/23

 

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SaaS/PaaS - Other 67.9 0.6pp 70.7 –0.3pp –0.4pp
IaaS (in %) 26.9 –5.6pp 27.6 –5.7pp –3.8pp
Total 68.2 1.0pp 70.0 0.5pp 0.5pp
thereof Qualtrics 76.9 0.4pp 89.6 –2.6pp –2.7pp

 

1 For a breakdown of the individual adjustments see table “Non-IFRS Adjustments by Functional Areas” in this Quarterly Statement.

 

2 As this is an order entry metric, there is no IFRS equivalent.

 

Due to rounding, numbers may not add up precisely

 

The Q1 2022 results were also impacted by other effects. For details, please refer to the disclosures on page 22 of this document.

 

Impact of War in Ukraine

 

In the first quarter, SAP’s business was impacted by the war in Ukraine. At the beginning of March, SAP stopped all new sales in Russia and Belarus. In addition, SAP started to shut down its cloud operations and intends to stop the support and maintenance of its on-premise products in Russia. Current cloud backlog was lowered by approximately €60 million due to the termination of existing cloud engagements, and operating profit by approximately €70 million due to reduced on-premise revenues, accelerated depreciation of data center assets and capitalized sales commissions.

 

For the fiscal year, we expect a total negative revenue impact of approximately €300 million from lack of new business and discontinuation of existing business, in particular software and support and services. For non-IFRS operating profit we expect an impact of approximately €350 million from the revenue gaps mentioned above and other expense items.

 

In addition to the above, the company expects to incur restructuring expenses of approximately €80-100 million for the fiscal year which will not affect non-IFRS results.

 

Despite these headwinds, the cloud performance allows SAP to reaffirm its cloud revenue, cloud and software revenue as well as non-IFRS operating profit and free cash flow outlook. The reiteration of the non-IFRS operating profit outlook reflects the benefits of a continued strong cloud revenue growth, operational discipline and portfolio streamlining measures.

 

Other impacts due to this rapidly evolving situation are currently unknown and could potentially subject our business to materially adverse consequences should the situation escalate beyond its current scope.

 

Financial Highlights

 

Current cloud backlog was up 28% to €9.73 billion and up 23% at constant currencies. The war in Ukraine reduced current cloud backlog growth at constant currencies by 0.8 percentage points.

 

Supported by double-digit growth across the solution portfolio, cloud revenue growth continued to accelerate for the fourth consecutive quarter and was up 31% to €2.82 billion, up 25% at constant currencies.

 

Amidst continuing investments into our next generation cloud delivery program our cloud gross margin was up 1.0 percentage points year over year to 68.2% (IFRS) and up 0.5 percentage points year over year to 70.0% (non-IFRS). Revenue growth, alongside cloud gross margin expansion, drove strong cloud gross profit growth of 33% (IFRS), 32% (non-IFRS) and 26% (non-IFRS at constant currencies).

 

IFRS operating profit increased 10% to €1.05 billion, primarily driven by lower restructuring expenses. Non-IFRS operating profit decreased 4% to €1.68 billion and decreased 7% at constant currencies. This decrease against a very strong prior year comparable was mainly driven by expenses related to the war in Ukraine, as well as accelerated investments into research & development and sales & marketing to capture current and future growth opportunities.

 

IFRS earnings per share (basic and diluted) decreased 29% to €0.63 and non-IFRS earnings per share (basic) decreased 28% to €1.00. The year over year decline of earnings per share reflects a contribution to financial income by Sapphire Ventures that was lower than over the same period last year based on current market conditions.

 

Free cash flow was down 24% to €2.16 billion, mainly attributable to the development of profitability in the quarter and impacts from working capital due to SAP’s continuous move to the cloud, and lower software licenses sales in the fourth quarter 2021. The ongoing business transformation provides more balance of cash inflows throughout the year, and we are reiterating our full year free cash flow outlook.

3/23

 

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On January 13, SAP announced a new share repurchase program to support the transition of SAP’s share-based compensation programs to equity settlement. By March 31, SAP had repurchased 5,680,250 shares at an average price of €102.26 with a purchased value of approximately €581 million.

 

(GRAPHIC)Business Highlights

  

More than 500 customers chose SAP S/4HANA in the quarter, taking total adoption to more than 19,300 customers, up 18% year over year, of which more than 13,900 are live. In the first quarter, more than 60% of the additional SAP S/4HANA customers were net new.

In the first quarter, customers around the globe chose “RISE with SAP” including Accenture, Canon Production Printing, Citizen Watch Company, Daimler Truck AG, Grupo Estrella Blanca, Exide Industries Limited, NEC Corporation, Ooredoo Group, Qinqin Food, Rising Auto, TELUS, Tramontina, and Wipro Limited. Key customer wins across SAP’s solution portfolio included: Air France-KLM, FEMSA, Heineken, L’Oréal, Merck KGaA, MLP, Nippon Telephone and Telegraph Corporation, NHS Shared Business Services, PetSmart, Pick n Pay, Salling Group, Schaeffler, and Swellfun. Further, PT United Tractors, Schwarz Produktion and Vodafone New Zealand all went live on SAP solutions in the first quarter.

 

Microsoft announced it would become the first public cloud provider to adopt “RISE with SAP” and SAP S/4HANA to transform its own SAP ERP deployment. Adopting these solutions will enable Microsoft to deploy new technologies faster and establish best practices that benefit our joint customers.

 

SAP’s cloud revenue performance for the quarter was excellent across all regions. The United States and Germany had an outstanding cloud revenue performance while Japan, China, Brazil, Canada, Switzerland, France, and the UK were particularly strong.

 

SAP proposed a dividend of €2.45 per share for fiscal year 2021 representing a year-over-year increase of approximately 32%. This amount includes a special dividend of €0.50 to celebrate SAP’s 50th anniversary. The dividend is subject to shareholder approval at the upcoming AGM scheduled for May 18, 2022.

  

On March 9, SAP announced that it had completed the acquisition of a majority stake of Taulia, a leading provider of working capital management solutions. Taulia further expands SAP’s Business Network and strengthens SAP’s solutions for the CFO office by providing working capital management cloud solutions.

 

On March 22, SAP and global strategic consultancy BCG announced a partnership to help companies transform their business models, become sustainable enterprises, and gain the data transparency they need to embed sustainability into their core business. The partnership combines SAP’s strength as the leading enterprise software company with BCG’s proven expertise in advising clients on their sustainability transformation strategies. The SAP and BCG sustainability transformation offering is in pilot phase, with an expected broader launch in the third quarter of 2022.

 

On March 28, SAP announced that the SAP Signavio brand will represent our portfolio of Business Process Management solutions. SAP also announced general availability of the SAP Signavio Journey to Process Analytics. The new offering correlates experience data from Qualtrics user surveys with operational data from underlying IT systems, giving companies the ability to understand how best to optimize their end-to-end business processes for both operational excellence and customer experience.

  

Segment Results at a Glance

 

At the beginning of 2022, the Services segment was integrated into the former Applications, Technology & Support segment which was re-named to Applications, Technology & Services.

 

Therefore, SAP now has two reportable segments: the Applications, Technology & Services segment and the Qualtrics segment.

4/23

 

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Segment Performance First Quarter 2022

€ million, unless otherwise stated

(Non-IFRS)

Applications, Technology & Services1   Qualtrics

Actual

Currency

∆ in %

∆ in %

 const. curr.

Actual

Currency

∆ in %

∆ in %

const. curr.

Cloud revenue 2,495 28 22 269 69 58
Segment revenue 6,695 10 6 320 58 48
Segment profit (loss) 2,168 –4 –7 10 –22 –12
Cloud gross margin (in %) 67.8 0.1pp 0.2pp 89.6 –2.6pp –2.7pp
Segment margin (in %) 32.4 –4.5pp –4.6pp 3.1 –3.2pp –2.5pp

1 Segment information for comparative prior periods were restated to conform with the new segment composition.

 

SAP’s two reportable segments showed the following performance:

 

Applications, Technology & Services (AT&S)

 

Segment revenue in AT&S was up 10% to €6.70 billion year over year, up 6% at constant currencies. Segment performance was driven by strong double-digit cloud revenue growth in SAP S/4HANA as well as Business Technology Platform. Software licenses revenue decreased due to the shift to the cloud as more customers are adopting our ‘RISE with SAP’ offering. Segment support revenue was up 4% to €2.92 billion year over year and up 1% at constant currencies.

 

Qualtrics

 

Qualtrics segment revenue was up 58% to €320 million year over year, up 48% at constant currencies. The continued strong growth was driven by robust renewal rates and expansions. Australian Taxation Office, Chipotle, EY, Google Cloud, Grubhub, Hyundai Motor Asia Pacific, Kroger, Microsoft, National Australia Bank, Royal Mail Group, and Shiseido Company, among others, selected Qualtrics Experience Management Solutions.

 

(GRAPHIC)Business Outlook 2022

 

SAP is executing on its cloud-led strategy, which is driving accelerating cloud growth through both new business and cloud adoption by existing customers. The pace and scale of SAP’s cloud momentum places the Company well on track towards its mid-term ambition.

 

For 2022, SAP now expects:

 

€11.55 – 11.85 billion cloud revenue at constant currencies (2021: €9.42 billion), up 23% to 26% at constant currencies.

 

€25.0 – 25.5 billion cloud and software revenue at constant currencies (2021: €24.08 billion), up 4% to 6% at constant currencies.

 

€7.8 – 8.25 billion non-IFRS operating profit at constant currencies (2021: €8.23 billion), flat to down 5% 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 78% (2021: 75%).

 

Free cash flow above €4.5 billion (2021: €5.01 billion).

 

SAP now expects a full-year 2022 effective tax rate (IFRS) of 28.0% to 32.0% (previously: 25.0% to 28.0%) and an effective tax rate (non-IFRS) of 23.0% to 27.0% (previously: 22.0% to 25.0%). The increase of the effective tax rate outlook mainly reflects an updated projection of the 2022 financial income contribution of Sapphire Ventures in light of current market conditions.

 

While SAP’s full-year 2022 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 Q2 and FY 2022 expected currency impacts.

5/23

 

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Expected Currency Impact Assuming March 2022 Rates Apply for the Rest of the Year

 

In percentage points Q2 2022 FY 2022
Cloud revenue growth +7pp to +9pp +5pp to +7pp
Cloud and software revenue growth +4pp to +6pp +3pp to +5pp
Operating profit growth (non-IFRS) +4pp to +6pp +3pp to +5pp

 

Ambition for Non-Financial Performance

 

In 2022, SAP continues to expect:

 

a Customer Net Promoter Score of 11 to 15 (2021: 10)

 

an Employee Engagement Index in a range of 84% to 86% (2021: 83%)

 

Net carbon emissions of 70 kt (2021: 110 kt)

 

Ambition 2025

 

SAP confidently reiterates its mid-term ambition published in its Q3 2020 Quarterly Statement.

6/23

 

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(GRAPHIC)Additional Information

 

This press release and all information therein is preliminary and unaudited.

 

SAP Performance Measures

 

For more information about our key growth metrics and performance measures, their calculation, their usefulness, and their limitation, please refer to the following document on our Investor Relations website: SAP Performance Measures.

 

Webcast

 

SAP senior management will host a financial analyst conference call on Friday, April 22nd at 2:00 PM (CET) / 1:00 PM (GMT) / 8:00 AM (Eastern) / 5:00 AM (Pacific). The conference will be webcast live on the Company’s website at www.sap.com/investor and will be available for replay. Supplementary financial information pertaining to the first quarter can be found at www.sap.com/investor.

 

Financial Analyst and Investor Conference

 

SAP will hold a financial analyst event on Wednesday, May 11th, in conjunction with its annual SAP Sapphire conference kicking off on May 10th.

 

About SAP

 

SAP’s strategy is to help every business run as an intelligent enterprise. As a market leader in enterprise application software, we help companies of all sizes and in all industries run at their best: SAP customers generate 87% of total global commerce. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. SAP helps give people and organizations deep business insight and fosters collaboration that helps them stay ahead of their competition. We simplify technology for companies so they can consume our software the way they want – without disruption. Our end-to-end suite of applications and services enables business and public customers across 25 industries globally to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, SAP helps the world run better and improve people’s lives. For more information, visit www.sap.com.

 

For more information, financial community only:

 

Anthony Coletta +49 (6227) 7-60437 [email protected], CET

Follow SAP Investor Relations on Twitter at @sapinvestor.

 

For more information, press only:

 

Joellen Perry +1 (650) 445-6780 [email protected], PT
Daniel Reinhardt +49 (6227) 7-40201 [email protected], CET

 

For customers interested in learning more about SAP products:

 

Global Customer Center: +49 180 534-34-24
United States Only: +1 (800) 872-1SAP (+1-800-872-1727)

 

Note to editors:

 

To preview and download broadcast-standard stock footage and press photos digitally, please visit www.sap.com/photos. On this platform, you can find high resolution material for your media channels. To view video stories on diverse topics, visit www.sap-tv.com. From this site, you can embed videos into your own Web pages, share video via email links, and subscribe to RSS feeds from SAP TV.

 

 

This document contains forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations, forecasts, and assumptions that are subject to risks and uncertainties that could cause actual results and outcomes to materially differ. Additional information regarding these risks and uncertainties may be found in our filings with the Securities and Exchange Commission, including but not limited to the risk factors section of SAP’s 2021 Annual Report on Form 20-F.

 

© 2022 SAP SE. All rights reserved.

 

SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE in Germany and other countries. Please see https://www.sap.com/copyright for additional information.

7/23

 

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Contents

 

Financial and Non-Financial Key Facts (IFRS and Non-IFRS) 9
   
Primary Financial Statements of SAP Group (IFRS) 11
   
(A) Consolidated Income Statements 11
     
(B) Consolidated Statements of Financial Position 12
     
(C) Consolidated Statements of Cash Flows 13
     
Non-IFRS Numbers 14
   
(D) Basis of Non-IFRS Presentation 14
     
(E) Reconciliation from Non-IFRS Numbers to IFRS Numbers 15
     
(F) Non-IFRS Adjustments – Actuals and Estimates 16
     
(G) Non-IFRS Adjustments by Functional Areas 16
     
Disaggregations 17
   
(H) Segment Reporting 17
     
(I) Reconciliation of Cloud Revenues and Margins 19
     
(J) Revenue by Region (IFRS and Non-IFRS) 20
     
(K) Employees by Region and Functional Areas 21
     
Other Disclosures 22
   
(L) Financial Income, Net 22
     
(M) Business Combinations 22
     
(N) Share Buyback 22
     
(O) Share Based Payments 22
     
(P) Income Tax Related Litigation 22

8/23

 

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Financial and Non-Financial Key Facts (IFRS and Non-IFRS)

 

€ millions, unless otherwise stated Q1
2021
Q2
2021
Q3
2021
Q4
2021
TY
2021
  Q1
2022
 
Revenues                
Cloud 2,145 2,276 2,386 2,611 9,418   2,820  
% change – yoy 7 11 20 28 17   31  
% change constant currency – yoy 13 17 20 24 19   25  
SAP S/4HANA Cloud 227 257 276 329 1,090   404  
% change – yoy 36 33 46 65 46   78  
% change constant currency – yoy 43 39 46 61 47   71  
Software licenses 483 650 657 1,458 3,248   317  
% change – yoy 7 –16 –8 –14 –11   –34  
% change constant currency – yoy 11 –13 –8 –17 –11   –36  
Software support 2,801 2,823 2,867 2,920 11,412   2,923  
% change – yoy –5 –2 1 3 –1   4  
% change constant currency – yoy 0 1 1 1 1   1  
Software licenses and support 3,283 3,474 3,524 4,379 14,660   3,240  
% change – yoy –3 –5 –1 –4 –3   –1  
% change constant currency – yoy 1 –2 –1 –6 –2   –4  
Cloud and software 5,428 5,750 5,910 6,990 24,078   6,060  
% change – yoy 1 1 7 6 4   12  
% change constant currency – yoy 6 5 6 3 5   7  
Total revenue 6,348 6,669 6,845 7,981 27,842   7,077  
% change – yoy –3 –1 5 6 2   11  
% change constant currency – yoy 2 3 5 3 3   7  
Share of more predictable revenue (in %) 78 76 77 69 75   81  
Profits                
Operating profit (loss) (IFRS) 960 984 1,249 1,463 4,656   1,053  
Operating profit (loss) (non-IFRS) 1,738 1,922 2,102 2,468 8,230   1,677  
% change 17 –2 2 –11 –1   –4  
% change constant currency 24 3 2 –12 1   –7  
Profit (loss) after tax (IFRS) 1,070 1,449 1,418 1,440 5,376   632  
Profit (loss) after tax (non-IFRS) 1,720 2,214 2,129 2,274 8,337   1,166  
% change 70 59 1 12 28   –32  
Margins                
Cloud gross margin (IFRS, in %) 67.2 67.5 67.0 66.6 67.0   68.2  
Cloud gross margin (non-IFRS, in %) 69.5 70.0 69.4 69.0 69.5   70.0  
Software license and support gross margin (IFRS, in %) 85.7 86.5 87.1 87.9 86.9   87.0  
Software license and support gross margin (non-IFRS, in %) 86.3 87.3 87.8 88.5 87.6   87.5  
Cloud and software gross margin (IFRS, in %) 78.4 79.0 79.0 79.9 79.1   78.2  
Cloud and software gross margin (non-IFRS, in %) 79.7 80.5 80.4 81.2 80.5   79.4  
Gross margin (IFRS, in %) 70.3 70.8 71.4 73.0 71.5   70.3  
Gross margin (non-IFRS, in %) 72.3 73.4 73.6 75.1 73.7   72.0  
Operating margin (IFRS, in %) 15.1 14.8 18.2 18.3 16.7   14.9  
Operating margin (non-IFRS, in %) 27.4 28.8 30.7 30.9 29.6   23.7  
ATS segment – Cloud gross margin (in %) 67.7 68.2 67.6 66.8 67.6   67.8  
ATS segment – Gross margin (in %) 72.8 73.9 74.4 74.8 74.0   71.8  
ATS segment – Segment margin in % 36.9 38.5 39.7 38.9 38.5   32.4  
Qualtrics segment – Cloud gross margin (in %) 92.2 92.4 91.6 90.2 91.5   89.6  
Qualtrics segment – Segment gross margin (in %) 79.5 80.3 80.7 78.1 79.6   78.9  
Qualtrics segment – Segment margin (in %) 6.2 6.3 5.9 1.6 4.7   3.1  

9/23

 

 

Key Profit Ratios                
Effective tax rate (IFRS, in %) 20.0 19.7 18.9 26.4 21.5   33.1  
Effective tax rate (non-IFRS, in %) 18.7 19.2 18.2 23.2 20.0   25.7  
Earnings per share, basic (IFRS, in €) 0.88 1.15 1.19 1.23 4.46   0.63  
Earnings per share, basic (non-IFRS, in €) 1.40 1.75 1.74 1.85 6.73   1.00  
Order Entry and current cloud backlog                
Current cloud backlog 7,628 7,766 8,171 9,447 9,447   9,731  
% change – yoy 15 17 24 32 32   28  
% change constant currency – yoy 19 20 22 26 26   23  
SAP S/4HANA Current cloud backlog 1,036 1,130 1,283 1,707 1,707   1,925  
% change – yoy 39 45 60 84 84   86  
% change constant currency – yoy 43 48 58 76 76   79  
Share of cloud orders greater than €5 million based on total cloud order entry volume (in %) 27 34 40 49 41   45  
Share of cloud orders smaller than €1 million based on total cloud order entry volume (in %) 39 32 31 22 28   26  
Share of orders greater than €5 million based on total software order entry volume (in %) 23 22 31 24 25   40  
Share of orders smaller than €1 million based on total software order entry volume (in %) 42 43 41 36 39   33  
Liquidity and Cash Flow                
Net cash flows from operating activities 3,085 686 1,183 1,269 6,223   2,482  
Capital expenditure –153 –191 –202 –255 –800   –221  
Payments of lease liabilities –84 –92 –99 –98 –374   –95  
Free cash flow 2,848 403 881 916 5,049   2,165  
% of total revenue 45 6 13 11 18   31  
% of profit after tax (IFRS) 266 28 62 64 94   343  
Group liquidity 11,573 8,548 9,375 11,530 11,530   11,283  
Financial debt (–) –14,230 –13,116 –12,994 –13,094 –13,094   –12,171  
Net debt (–) –2,658 –4,568 –3,619 –1,563 –1,563   –888  
Financial Position                
Cash and cash equivalents 10,332 7,764 7,943 8,898 8,898   8,942  
Goodwill 29,328 29,020 29,600 31,090 31,090   32,159  
Total assets 66,477 63,075 65,029 71,169 71,169   76,374  
Contract liabilities (current) 6,568 5,958 4,627 4,431 4,431   7,630  
Equity ratio (total equity in % of total assets) 52 54 57 58 58   56  
Non-Financials                
Number of employees (quarter end)1 103,142 103,876 105,015 107,415 107,415   109,798  
Employee retention (in %, rolling 12 months) 95.4 94.8 93.7 92.8 92.8   92.1  
Women in management (in %, quarter end) 27.6 27.9 28.2 28.3 28.3   28.6  
Net carbon emissions2 (in kilotons) 30 20 25 35 110   20  

1 In full-time equivalents.  

2 In CO2 equivalents  

Due to rounding, numbers may not add up precisely.

10/23

 

(GRAPHIC)

 

Primary Financial Statements of SAP Group (IFRS)

 

(A) Consolidated Income Statements

 

(A.1)Consolidated Income Statements – Quarter

 

€ millions, unless otherwise stated Q1 2022   Q1 2021 ∆ in %  
Cloud 2,820   2,145 31  
Software licenses 317   483 –34  
Software support 2,923   2,801 4  
Software licenses and support 3,240   3,283 –1  
Cloud and software 6,060   5,428 12  
Services 1,017   919 11  
Total revenue 7,077   6,348 11  
           
Cost of cloud –898   –704 28  
Cost of software licenses and support –422   –471 –10  
Cost of cloud and software –1,320   –1,175 12  
Cost of services –779   –709 10  
Total cost of revenue –2,099   –1,884 11  
Gross profit 4,979   4,464 12  
Research and development –1,425   –1,171 22  
Sales and marketing –1,987   –1,663 20  
General and administration –504   –505 0  
Restructuring 10   –157 <-100  
Other operating income/expense, net –20   –7 >100  
Total operating expenses –6,024   –5,387 12  
Operating profit (loss) 1,053   960 10  
           
Other non-operating income/expense, net –52   62 <-100  
Finance income 342   547 –37  
Finance costs –398   –232 72  
Financial income, net –56   315 <-100  
Profit (loss) before tax 945   1,337 –29  
           
Income tax expense –313   –267 17  
Profit (loss) after tax 632   1,070 –41  
Attributable to owners of parent 740   1,040 –29  
Attributable to non-controlling interests –108   30 <-100  
           
Earnings per share, basic (in €)1 0.63   0.88 –29  
Earnings per share, diluted (in €)1 0.63   0.88 –29  

1 For the three months ended March 31, 2022 and 2021, the weighted average number of shares was 1,177 million (diluted 1,178 million) and 1,180 million (diluted: 1,180 million), respectively (treasury stock excluded). 

Due to rounding, numbers may not add up precisely.

11/23

 

(GRAPHIC)

 

  (B) Consolidated Statements of Financial Position

 

as at 03/31/2022 and 12/31/2021  
€ millions  2022  2021  
Cash and cash equivalents  8,942  8,898  
Other financial assets  2,544  2,758  
Trade and other receivables  9,456  6,352  
Other non-financial assets  1,888  1,633  
Tax assets  537  403  
Total current assets  23,367  20,044  
Goodwill  32,159  31,090  
Intangible assets  4,032  3,965  
Property, plant, and equipment  4,991  4,977  
Other financial assets  6,597  6,275  
Trade and other receivables  118  147  
Other non-financial assets  2,765  2,628  
Tax assets  281  263  
Deferred tax assets  2,065  1,779  
Total non-current assets  53,007  51,125  
Total assets  76,374  71,169  
         
€ millions  2022  2021  
Trade and other payables  1,693  1,580  
Tax liabilities  632  304  
Financial liabilities  7,143  4,528  
Other non-financial liabilities  3,838  5,203  
Provisions  91  89  
Contract liabilities  7,630  4,431  
Total current liabilities  21,027  16,136  
Trade and other payables  114  122  
Tax liabilities  881  827  
Financial liabilities  10,070  11,042  
Other non-financial liabilities  1,053  860  
Provisions  365  355  
Deferred tax liabilities  290  291  
Contract liabilities  –44  13  
Total non-current liabilities  12,729  13,510  
Total liabilities  33,757  29,645  
Issued capital  1,229  1,229  
Share premium  2,088  1,918  
Retained earnings  37,661  37,022  
Other components of equity  2,524  1,756  
Treasury shares  –3,653  –3,072  
Equity attributable to owners of parent  39,850  38,852  
         
Non-controlling interests  2,768  2,670  
Total equity  42,618  41,523  
Total equity and liabilities  76,374  71,169  

Due to rounding, numbers may not add up precisely.

12/23

 

(GRAPHIC)

 

(C)Consolidated Statements of Cash Flows

 

€ millions  Q1 2022  Q1 2021  
Profit (loss) after tax  632  1,070  
Adjustments to reconcile profit (loss) after tax to net cash flows from operating activities:        
Depreciation and amortization  460  436  
Share-based payment expense  471  472  
Income tax expense  313  267  
Financial income, net  56  –315  
Decrease/increase in allowances on trade receivables  17  0  
Other adjustments for non-cash items  –20  119  
Decrease/increase in trade and other receivables  –361  185  
Decrease/increase in other assets  –356  –108  
Increase/decrease in trade payables, provisions, and other liabilities  –1,144  –936  
Increase/decrease in contract liabilities  3,036  2,503  
Share-based payments  –139  –106  
Interest paid  –85  –83  
Interest received  22  8  
Income taxes paid, net of refunds  –421  –425  
Net cash flows from operating activities  2,482  3,085  
Business combinations, net of cash and cash equivalents acquired  –612  –930  
Purchase of intangible assets or property, plant, and equipment  –221  –153  
Proceeds from sales of intangible assets or property, plant, and equipment  27  21  
Purchase of equity or debt instruments of other entities  –1,521  –228  
Proceeds from sales of equity or debt instruments of other entities  1,658  322  
Cash flows from advances (supply chain financing)  –1,093  0  
Net cash flows from investing activities  –1,762  –967  
Dividends paid on non-controlling interests  –2  –2  
Purchase of treasury shares  –581  0  
Proceeds from changes in ownership interests in subsidiaries that do not result in the loss of control  20  1,847  
Payments for taxes related to net share settlement of equity awards  –190  0  
Proceeds from borrowings  0  1,450  
Repayments of borrowings  –944  –550  
Payments of lease liabilities  –95  –84  
Cash flows with funders (supply chain financing)  1,066  0  
Net cash flows from financing activities  –725  2,661  
Effect of foreign currency rates on cash and cash equivalents  50  243  
Net decrease/increase in cash and cash equivalents  44  5,022  
Cash and cash equivalents at the beginning of the period  8,898  5,311  
Cash and cash equivalents at the end of the period  8,942  10,332  

Due to rounding, numbers may not add up precisely.

13/23

 

 

Non-IFRS Numbers

 

(D) Basis of Non-IFRS Presentation

 

We disclose certain financial measures such as revenue (non-IFRS), expense (non-IFRS), and profit measures (non-IFRS) that are not prepared in accordance with IFRS and are therefore considered non-IFRS financial measures.

 

For a more detailed description of all of SAP’s non-IFRS measures and their limitations as well as our constant currency and free cash flow figures, see Explanation of Non-IFRS Measures online.

14/23

 

 

(E)Reconciliation from Non-IFRS Numbers to IFRS Numbers

 

(E.1)Reconciliation from Non-IFRS Numbers to IFRS Numbers – Quarter

 

          Q1 2022       Q1 2021     ∆ in %  
€ millions, unless otherwise stated IFRS Adj. Non-
IFRS
Currency
Impact
Non-IFRS
Constant
Currency
  IFRS Adj. Non-
IFRS
IFRS Non-
IFRS
Non-IFRS
Constant
Currency1
 
Revenue Numbers                          
Cloud 2,820   2,820 –129 2,691   2,145   2,145 31 31 25  
Software licenses 317   317 –10 307   483   483 –34 –34 –36  
Software support 2,923   2,923 –94 2,830   2,801   2,801 4 4 1  
Software licenses and support 3,240   3,240 –104 3,136   3,283   3,283 –1 –1 –4  
Cloud and software 6,060   6,060 –233 5,827   5,428   5,428 12 12 7  
Services 1,017   1,017 –38 979   919   919 11 11 7  
Total revenue 7,077   7,077 –271 6,806   6,348   6,348 11 11 7  
                           
Operating Expense Numbers                          
Cost of cloud –898 53 –845       –704 51 –654 28 29    
Cost of software licenses and support –422 17 –405       –471 21 –450 –10 –10    
Cost of cloud and software –1,320 70 –1,250       –1,175 71 –1,103 12 13    
Cost of services –779 46 –733       –709 52 –657 10 12    
Total cost of revenue –2,099 116 –1,983       –1,884 123 –1,760 11 13    
Gross profit 4,979 116 5,095       4,464 123 4,587 12 11    
Research and development –1,425 102 –1,323       –1,171 94 –1,077 22 23    
Sales and marketing –1,987 205 –1,782       –1,663 188 –1,475 20 21    
General and administration –504 212 –293       –505 215 –290 0 1    
Restructuring 10 –10 0       –157 157 0 <-100 NA    
Other operating income/expense, net –20 0 –20       –7 0 –7 >100 >100    
Total operating expenses –6,024 624 –5,400 209 –5,191   –5,387 778 –4,609 12 17 13  
                           
Profit Numbers                          
Operating profit (loss) 1,053 624 1,677 –62 1,615   960 778 1,738 10 –4 –7  
Other non-operating income/expense, net –52 0 –52       62 0 62 <-100 <-100    
Finance income 342 0 342       547 0 547 –37 –37    
Finance costs –398 0 –398       –232 0 –232 72 72    
Financial income, net –56 0 –56       315 0 315 <-100 <-100    
Profit (loss) before tax 945 624 1,569       1,337 778 2,115 –29 –26    
Income tax expense –313 –90 –403       –267 –127 –395 17 2    
Profit (loss) after tax 632 534 1,166       1,070 650 1,720 –41 –32    
Attributable to owners of parent 740 438 1,178       1,040 606 1,646 –29 –28    
Attributable to non-controlling interests –108 96 –12       30 45 74 <-100 <-100    
                           
Key Ratios                          
Operating margin (in %) 14.9   23.7   23.7   15.1   27.4 –0.2pp –3.7pp –3.6pp  
Effective tax rate (in %)2 33.1   25.7       20.0   18.7 13.1pp 7.0pp    
Earnings per share, basic (in €) 0.63   1.00       0.88   1.40 –29 –28    

1 Constant currency period-over-period changes are calculated by comparing the current year’s non-IFRS constant currency numbers with the non-IFRS numbers of the previous year’s respective period.

2 The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q1 2022 mainly resulted from tax effects of share-based payment expenses and acquisition-related charges. The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q1 2021 mainly resulted from tax effects of share-based payment expenses, acquisition-related charges and restructuring expenses.

Due to rounding, numbers may not add up precisely.

15/23

 

(GRAPHIC)

 

(F)Non-IFRS Adjustments – Actuals and Estimates

 

€ millions Estimated Amounts for
Full Year 2022
Q1 2022   Q1 2021  
Operating profit (loss) (IFRS)   1,053   960  
Adjustment for acquisition-related charges 580–680 164   149  
Adjustment for share-based payment expenses 2,500–2,800 471   472  
Adjustment for restructuring 80–100 –10   157  
Operating expense adjustments   624   778  
Operating profit (loss) (non-IFRS)   1,677   1,738  

Due to rounding, numbers may not add up precisely.

 

(G)Non-IFRS Adjustments by Functional Areas

 

          Q1 2022           Q1 2021  
€ millions IFRS Acquisition-
Related
SBP1 Restruc-
turing
Non-IFRS   IFRS Acquisition-
Related
SBP1 Restruc-
turing
Non-IFRS  
Cost of cloud –898 42 11 0 –845   –704 39 11 0 –654  
Cost of software licenses and support –422 8 9 0 –405   –471 8 13 0 –450  
Cost of services –779 5 41 0 –733   –709 5 47 0 –657  
Research and development –1,425 2 100 0 –1,323   –1,171 2 92 0 –1,077  
Sales and marketing –1,987 101 103 0 –1,782   –1,663 90 98 0 –1,475  
General and administration –504 6 206 0 –293   –505 5 210 0 –290  
Restructuring 10 0 0 –10 0   –157 0 0 157 0  
Other operating income/expense, net –20 0 0 0 –20   –7 0 0 0 –7  
Total operating expenses –6,024 164 471 –10 –5,400   –5,387 149 472 157 –4,609  

1 Share-based Payments

 

Due to rounding, numbers may not add up precisely.

 

If not presented in a separate line item in our income statement, the restructuring expenses would break down as follows:

 

€ millions  Q1 2022  Q1 2021  
Cost of cloud  17  –130  
Cost of software licenses and support  –1  –3  
Cost of services  –2  –14  
Research and development  –3  –9  
Sales and marketing  –1  –2  
General and administration  0  –1  
Restructuring expenses  10  –157  

Due to rounding, numbers may not add up precisely.

16/23

 

(GRAPHIC)

 

Disaggregations

 

(H)Segment Reporting

 

(H.1)Segment Policies and Segment Changes

 

SAP has two reportable segments: the Applications, Technology & Services segment and the Qualtrics segment.

 

In the first quarter 2022, the following changes to the composition of our operating segments occurred:

 

– SAP acquired Taulia, a leading provider of working capital management solutions. This acquisition led to a new operating segment, however due to its size Taulia is not a reportable segment.

 

– In the beginning of 2022, the Services segment was dissolved and integrated into the former Applications, Technology & Support segment which was therefore re-named to Applications, Technology & Services. The segment information for comparative prior periods were restated to conform with the new segment composition.

 

Our non-reportable Business Process Intelligence segment was renamed into SAP Signavio segment in the first quarter of 2022. There were no changes to the composition of this segment.

 

For a more detailed description of SAP’s segment reporting, see Note (C.1) “Results of Segments” of our Integrated Report 2021.

 

(H.2)Segment Reporting – Quarter

 

Applications, Technology & Services

 

€ millions, unless otherwise stated   Q1 2022 Q1 2021 ∆ in % ∆ in %
(non-IFRS) Actual
Currency
Constant
Currency
Actual
Currency
Actual
Currency
Constant
Currency
Cloud 2,495 2,385 1,952 28 22
Software licenses 315 305 482 –35 –37
Software support 2,923 2,829 2,800 4 1
Software licenses and support 3,238 3,134 3,283 –1 –5
Cloud and software 5,732 5,519 5,234 10 5
Services 963 928 872 10 6
Total segment revenue 6,695 6,447 6,106 10 6
Cost of cloud –804 –765 –630 28 21
Cost of software licenses and support –407 –392 –422 –3 –7
Cost of cloud and software –1,211 –1,158 –1,052 15 10
Cost of services –678 –656 –606 12 8
Total cost of revenue –1,889 –1,814 –1,658 14 9
Segment gross profit 4,806 4,633 4,448 8 4
Other segment expenses –2,638 –2,550 –2,197 20 16
Segment profit (loss) 2,168 2,083 2,251 –4 –7
Margins
Cloud gross margin (in %) 67.8 67.9 67.7 0.1pp 0.2pp
Segment gross margin (in %) 71.8 71.9 72.8 –1.1pp –1.0pp
Segment margin (in %) 32.4 32.3 36.9 –4.5pp –4.6pp

Due to rounding, numbers may not add up precisely.

17/23

 

 

Qualtrics

 

€ millions, unless otherwise stated   Q1 2022 Q1 2021 ∆ in % ∆ in %
(non-IFRS) Actual
Currency
Constant
Currency
Actual
Currency
Actual
Currency
Constant
Currency
Cloud 269 252 159 69 58
Cloud and software 269 252 159 69 58
Services 50 47 43 18 10
Total segment revenue 320 299 202 58 48
Cost of cloud –28 –26 –12 >100 >100
Cost of cloud and software –28 –26 –12 >100 >100
Cost of services –40 –37 –29 37 29
Total cost of revenue –68 –64 –41 64 54
Segment gross profit 252 235 161 57 46
Other segment expenses –242 –224 –148 64 51
Segment profit (loss) 10 11 13 –22 –12
Margins
Cloud gross margin (in %) 89.6 89.5 92.2 –2.6pp –2.7pp
Segment gross margin (in %) 78.9 78.7 79.5 –0.7pp –0.9pp
Segment margin (in %) 3.1 3.7 6.2 –3.2pp –2.5pp

Due to rounding, numbers may not add up precisely.

18/23

 

 

(I)Reconciliation of Cloud Revenues and Margins

 

(I.1)Reconciliation of Cloud Revenues and Margins – Quarter

 

          Q1 2022   Q1 2021     ∆ in %
 € millions, unless otherwise stated IFRS Non-
IFRS
Currency
Impact
Non-IFRS
Constant
Currency
IFRS Non-
IFRS
IFRS Non-
IFRS
Non-IFRS
Constant
Currency3
Cloud revenue – SaaS/PaaS1 Intelligent Spend 808 808 –43 765 658 658 23 23 16
Other 1,776 1,776 –76 1,700 1,273 1,273 40 40 34
Total 2,585 2,585 –120 2,465 1,931 1,931 34 34 28
Cloud revenue – IaaS2 235 235 –9 226 214 214 10 10 5
Cloud revenue 2,820 2,820 –129 2,691 2,145 2,145 31 31 25
Cloud gross margin –
SaaS/PaaS1 (in %)
Intelligent Spend 80.7 80.7   80.6 78.1 78.3 2.5pp 2.4pp 2.2pp
Other 67.9 70.7   70.6 67.3 71.0 0.6pp –0.3pp –0.4pp
Total 71.9 73.9   73.7 71.0 73.5 0.9pp 0.3pp 0.2pp
Cloud gross margin – IaaS2
(in %)
26.9 27.6   29.6 32.5 33.3 –5.6pp –5.7pp –3.8pp
Cloud gross margin (in %) 68.2 70.0   70.0 67.2 69.5 1.0pp 0.5pp 0.5pp

 

1 Software as a Service/Platform as a Service

2 Infrastructure as a Service

3 Constant currency period-over-period changes are calculated by comparing the current year’s non-IFRS constant currency numbers with the non-IFRS numbers of the previous year’s respective period.

As of Q1 2022, the allocation of cloud revenues and -expenses to cloud service models has been aligned to internal reporting structures. Presented 2021 comparable periods have been updated accordingly.

Due to rounding, numbers may not add up precisely.

19/23

 

(GRAPHIC)

 

(J)Revenue by Region (IFRS and Non-IFRS)

 

(J.1)Revenue by Region (IFRS and Non-IFRS) – Quarter

 

        Q1 2022   Q1 2021     ∆ in %
€ millions IFRS Non-IFRS Currency
Impact
Non-IFRS
Constant
Currency
IFRS Non-IFRS IFRS Non-IFRS Non-IFRS
Constant
Currency1
Cloud Revenue by Region                  
EMEA 982 982 –22 960 745 745 32 32 29
Americas 1,480 1,480 –100 1,380 1,114 1,114 33 33 24
APJ 358 358 –7 351 286 286 25 25 23
Cloud revenue 2,820 2,820 –129 2,691 2,145 2,145 31 31 25
 Cloud and Software Revenue by Region
EMEA 2,627 2,627 –38 2,589 2,433 2,433 8 8 6
Americas 2,511 2,511 –174 2,338 2,118 2,118 19 19 10
APJ 922 922 –21 900 877 877 5 5 3
Cloud and software revenue 6,060 6,060 –233 5,827 5,428 5,428 12 12 7
Total Revenue by Region
Germany 1,061 1,061 –1 1,059 951 951 12 12 11
Rest of EMEA 2,004 2,004 –42 1,962 1,884 1,884 6 6 4
Total EMEA 3,065 3,065 –43 3,022 2,835 2,835 8 8 7
United States 2,409 2,409 –161 2,248 2,035 2,035 18 18 10
Rest of Americas 550 550 –43 507 486 486 13 13 4
Total Americas 2,959 2,959 –204 2,755 2,521 2,521 17 17 9
Japan 311 311 6 317 322 322 –3 –3 –1
Rest of APJ 743 743 –30 713 670 670 11 11 6
Total APJ 1,053 1,053 –24 1,029 992 992 6 6 4
Total revenue 7,077 7,077 –271 6,806 6,348 6,348 11 11 7

 

1) Constant currency period-over-period changes are calculated by comparing the current year’s non-IFRS constant currency numbers with the non-IFRS numbers of the previous year’s respective period.

Due to rounding, numbers may not add up precisely.

20/23

 

(GRAPHIC)

 

(K)Employees by Region and Functional Areas

 

Full-time equivalents       3/31/2022       3/31/2021
  EMEA Americas APJ Total EMEA Americas APJ Total
Cloud and software 6,029 4,634 5,172 15,835 5,896 4,486 5,089 15,471
Services 8,369 5,710 5,948 20,027 8,468 5,863 6,079 20,410
Research and development 15,693 6,534 10,651 32,878 14,073 6,103 9,944 30,120
Sales and marketing 11,665 11,968 5,621 29,254 10,404 10,450 4,924 25,779
General and administration 3,386 2,206 1,246 6,837 3,407 2,188 1,243 6,838
Infrastructure 2,706 1,401 860 4,966 2,501 1,258 766 4,524
SAP Group (12/31) 47,848 32,453 29,497 109,798 44,749 30,348 28,045 103,142
Thereof acquisitions1 173 214 8 395 359 41 26 426
SAP Group (three months’ end average) 47,389 32,152 29,324 108,864 44,389 30,295 28,007 102,691

1 Acquisitions closed between January 1 and March 31 of the respective year

21/23

 

(GRAPHIC)

 

Other Disclosures

 

(L)Financial Income, Net

 

In the first quarter of 2022, finance income mainly consisted of gains from disposals and fair value adjustments of equity securities totaling €317 million (Q1/2021: €530 million).

 

In the first quarter of 2022, finance costs were primarily impacted by losses from disposals and fair value adjustments of equity securities amounting to €318 million (Q1/2021: €161 million).

 

(M)Business Combinations

 

Taulia

 

On January 27, 2022, SAP announced its intent to acquire a majority stake of Taulia, a leading provider of working capital management solutions. The acquisition closed in March 2022, following satisfaction of customary closing conditions and regulatory approvals. The acquisition is expected to further expand SAP’s business network capabilities and strengthen SAP’s solutions for the CFO office. Consideration transferred amounted to approx. €0.7 billion. As a result of the preliminary purchase price allocation, mainly goodwill of approximately €0.5 billion and intangible assets of €0.2 billion have been recorded. 

As the Taulia acquisition closed only shortly before March 31, 2022, we are still in the process of identifying and measuring the Taulia opening balance sheet assets and liabilities. Thus, the accounting for the Taulia acquisition is incomplete. This relates primarily to intangible assets and tax assets and liabilities but also to the accounting for the supply chain financing transactions offered by Taulia. The supply chain financing related assets and liabilities are included in SAP’s consolidated “Trade and other receivables” as well as current “Financial liabilities” (March 31, 2022: approximately €2.6 billion each). In general, the funds received by Taulia from the banks participating in the financing transactions as investors are classified as “financing cash flow,” and the cash routed through Taulia upon settlement of the receivables subject to supply chain financing on the maturity date are classified as “investing cash flow”.

 

(N)Share Buyback

 

In the first three months of 2022, we acquired 5.7 million treasury shares totaling €581 million. We intend to complete the share buyback program of up to €1.0 billion in 2022.

 

(O)Share Based Payments

 

Starting in 2022, most of the granted share units under the Move SAP plan will vest after a waiting period of six months and ratably thereafter for ten quarters. Under our previous policy, we serviced obligations arising from the plan with cash payments, but we have since decided to settle future share units predominantly in shares.

 

In the first three months of 2022, we granted 14.8 million (Q1/2021: 9.6 million) share units. This includes 13.9 million (Q1/2021: 0) share units which we intend to settle in shares. The dilutive effect of outstanding equity-settled share units is reflected in the calculation of earnings per share, diluted.

 

Obligations from outstanding share units granted before 2022 under the Move SAP plan will continue to be settled in cash and the settlement methods of SAP’s other plans remain unchanged.

 

Under the Own SAP plan, employees can purchase, on a monthly basis, SAP shares without any required holding period. As part of SAP’s 50th anniversary celebration SAP’s contribution was doubled from 40% to 80% from January to March 2022. The number of shares purchased by our employees under this plan was 2.2 million in the first three months of 2022 (Q1/2021: 1.5 million).

 

(P)Income Tax Related Litigation

 

We are subject to ongoing tax audits by domestic and foreign tax authorities. Currently, we are in dispute mainly with the German and only a few foreign tax authorities. The German dispute is in respect of certain secured capital investments, while the few foreign disputes are in respect of the deductibility of intercompany royalty payments and intercompany

22/23

 

(GRAPHIC)

 

services. In all cases, we expect that a favorable outcome can only be achieved through litigation. For all these matters, we have not recorded a provision as we believe that the tax authorities’ claims have no merit and that no adjustment is warranted. If, contrary to our view, the tax authorities were to prevail in their arguments before court, we would expect to have an additional expense of approximately €1,505 million (2021: €1,283 million) in total (including related interest expenses and penalties of approximately €811 million (2021: €677 million)). The contingent liabilities increased in 2022 mainly due to foreign currency exchange rate fluctuations.

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