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Sap Announces Third Quarter And Nine Months 2015 Results

The following excerpt is from the company's SEC filing.

Page 1

For Immediate Release

October 20, 2015

SAP Announces Third Quarter and Nine Months 2015 Results

Cloud Revenue up 116% Non-IFRS Operating Profit Up 19%

Strong Growth in New Cloud Bookings: Up 102%

Non-IFRS Cloud and Software Revenue Up 19% to 4.12 Billion

HANA Continues to Soar SAP S/4HANA Customer Count Exceeds 1,300

Non-IFRS Operating Profit Increased 19% to 1.62 Billion, Non-IFRS Earnings per Share Increased 16% to 0.98

Reiterates Full Year 2015 Outlook

WALLDORF, Germany October 20, 2015

SAP SE (NYSE: SAP) to day announced its financial results for the third quarter and nine months ended September 30, 2015.

SAP again delivered strong growth in the cloud, outpacing most pure cloud competitors even without the contribution from the Concur acquisition. Third quarter non-IFRS cloud subscriptions and support revenue grew 116% year-over-year (90% at constant currencies) to 600 million.

New cloud bookings, the key measure for SAPs sales success in the cloud, increased 102% in the third quarter to 216 million.

The Company had very strong top and bottom line growth in the third quarter. Non-IFRS cloud and software revenue increased 19% (12% at constant currencies) to 4.12 billion. Non-IFRS operating profit increased 19% (15% at constant currencies) to 1.62 billion.

SAP is enabling companies to Run Simple, said SAP CEO Bill McDermott. Whether its optimizing the customer experience, collaborating with partners across a digital network, engaging your workforce or managing your core operations with S/4HANA we are helping our customers go digital. The HANA database and platform are the foundation for a live system strategy enabling companies to capture the immense Internet of Things opportunity. This new architecture defeats complexity and radically increases speed so businesses can execute their mission in real-time. Our strong Q3 results are the latest validation of our strategy.

What I am particularly pleased about is that our operating profit grew even faster than our revenue. This reflects the positive impact of our business transformation and our continued focus on operating excellence across all of our lines of business, as shown in particular by an almost 9 percentage point year-over-year increase in our cloud gross margin, said SAP CFO Luka Mucic. In addition, we continued to increase our operating and free cash flow. In fact, we exceeded 3.2 billion for the first nine months in operating cash flow, while free cash flow marked an 8% increase year-over-year.

For the third quarter 2015, Concur contributed 149 million to SAPs Non-IFRS cloud subscriptions and support revenue at constant currencies.

New cloud bookings consist of all order entry of a given period that is expected to be classified as cloud subscription and support revenue and results from purchases by new customers and from incremental purchases by existing customers. The order amount must be contractually committed (i.e. variable amounts from pay-per-use and similar arrangements are not included). Consequently, due to their uncommitted pay-per-use nature Ariba and Fieldglass transaction-based fees are not reflected in the new cloud bookings metric. Amounts included in the measure are annualized. Concur contributed 59 million to SAPs new cloud bookings in the third quarter.

Table of Contents

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BUSINESS HIGHLIGHTS IN THE THIRD QUARTER 2015

Continued Momentum in Human Capital Management and Customer Engagement and Commerce

Customers continue to turn to SAP to manage their global workforce, both permanent and flexible. SuccessFactors Employee Central, which is the core of our Human Capital Management offerings, is localized for 73 countries and the number of customers has increased 79% to more than 800 in just 12 months. SAP is increasingly winning against its key HCM competitors, especially in markets outside of the United States.

SAP saw excellent growth in its Customer Engagement and Commerce solutions. SAP helps businesses manage the shift from traditional CRM to real-time customer engagement where the lines between marketing, sales, service, and commerce are fading. SAP is unique in that it can help businesses connect the front-office and back-office in real-time and fulfill ecommerce in one end to end value chain. New cloud bookings for Customer Engagement and Commerce saw strong double-digit growth.

Exceptional SAP S/4HANA Traction

Customer adoption of SAP HANA continues to surge on the back of high demand for our new digital core solution SAP S/4HANA. SAP S/4HANAs robust early traction continues with more than 1,300 SAP S/4HANA customers by the end of the third quarter across all industries and regions. SAP S/4HANA enabled strong growth across our portfolio and allows customers to turn insight into action by seamlessly connecting their entire value chain in real time.

Strong Business Network Momentum Triple Digit Growth, Concur Accelerates

SAP is digitizing ecosystem collaborations with its Business Network solutions. Total revenue in the SAP Business Network segment was 412 million (358 million at constant currencies) in the third quarter, a year-over-year increase of 159% (125% at constant currencies). Concurs new business momentum has seen a significant increase since the acquisition with further acceleration of bookings in the third quarter 2015.

Approximately 1.9 million connected companies trade over $730 billion of commerce

on the Ariba network, approximately 30 million end users process travel and expenses with Concur annually and customers are managing 1.7 million flexible workers with the Fieldglass platform annually.

Regional Performance

The EMEA region had an outstanding performance in the third quarter, with a 13% increase in non-IFRS cloud and software revenue. Non-IFRS cloud subscriptions and support revenue grew by 67% with high double-digit growth in new cloud bookings. Highlights in the region include strong software license performance in Germany and France.

The Americas region had strong double-digit growth, with non-IFRS cloud and software revenue rising 32%. Cloud subscriptions and support revenue in the region grew 139% with new cloud bookings growing by triple-digits. An improved performance in Latin America which stabilized amid macroeconomic challenges contributed to this growth.

Network spend volume is the total value of purchase orders transacted on the Ariba Network in the trailing 12 months. In previous quarters this also included Concur and Fieldglass for which as of the third quarter 2015 separate more relevant metrics are disclosed.

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In the APJ region, non-IFRS cloud subscriptions and support revenue grew 88%, driving non-IFRS cloud and software revenue up 8%. New cloud bookings grew by double-digits. In the APJ region SAP had strong growth in India and South Korea across cloud and software.

FINANCIAL RESULTS IN DETAIL

FINANCIAL RESULTS IN THE THIRD QUARTER 2015

Third Quarter 2015

million, unless otherwise stated

change

% change

const. curr.

Cloud subscriptions and support

Software licenses and support

Cloud and software

Operating profit

Profit after tax

Basic earnings per share ()

Number of employees (FTE)

75,643

68,835

All figures are unaudited.

For a detailed description of SAPs non-IFRS measures see

Explanation of Non-IFRS Measures

online. For a breakdown of the individual adjustments see page F7 in the appendix to this press release.

IFRS cloud subscriptions and support revenue was 599 million (2014: 277 million), an increase of 116%. Non-IFRS cloud subscriptions and support revenue was 600 million (2014: 278 million), an increase of 116% (90% at constant currencies). IFRS software licenses revenue was 1.01 billion (2014: 951 million), an increase of 7%. Non-IFRS software licenses revenue was 1.02 billion (2014: 952 million), an increase of 7% (4% at constant currencies). IFRS software licenses and support revenue was 3.52...


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