WALLDORF, Germany, Jan. 27 /PRNewswire-FirstCall/ -- SAP AG (NYSE: SAP) today announced its preliminary financial results for the fourth quarter and full-year ended December 31, 2009.
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FINANCIAL HIGHLIGHTS - Full Year 2009 SAP - Full Year 2009(1) --------------------- U.S. GAAP --------- FY FY % EUR million, unless stated otherwise 2009 2008 change ---------------------------------- ----- ----- ------- Software revenues 2,606 3,606 -28 ----------------- ----- ----- --- Software and software- related service revenues 8,197 8,457 -3 ---------------- ----- ----- --- Total revenues 10,671 11,565 -8 -------------- ------ ------ --- Operating expenses -8,031 -8,725 -8 --------- ------ ------ --- -Thereof restructuring charges -196 - - -------------- ---- --- --- Operating income 2,640 2,840 -7 ---------------- ----- ----- --- Operating margin (%) 24.7 24.6 0.1pp ---------------- ---- ---- ----- Income from continuing operations 1,825 1,928 -5 ----------- ----- ----- --- Net income 1,789 1,869 -4 ---------- ----- ----- --- Basic EPS from cont. operations (EUR) 1.54 1.62 -5 ----------------- ---- ---- --- SAP - Full Year 2009(1) --------------------- Non-GAAP(2) ---------- % change EUR million, unless stated FY FY % const. otherwise 2009 2008 change curr.(3) ------------------------- ----- ----- ------- ------------- Software revenues 2,606 3,606 28 -27 ----------------- ----- ----- --- --- Software and software- related service revenues 8,208 8,623 -5 -5 ---------------- ----- ----- --- --- Total revenues 10,682 11,731 -9 -9 -------------- ------ ------ --- --- Operating expenses -7,766 -8,428 -8 -8 --------- ------ ------ --- --- -Thereof restructuring charges -196 - - - -------------- ---- --- --- --- Operating income 2,916 3,303 -12 -11 ---------------- ----- ----- --- --- Operating margin (%) 27.3 28.2 -0.9pp -0.6pp ---------------- ---- ---- ------ ------ Income from continuing operations 2,036 2,269 -10 ----------- ----- ----- --- Net income 2,000 2,210 -10 ---------- ----- ----- --- Basic EPS from cont. operations (EUR) 1.71 1.91 -10 ----------------- ---- ---- --- (1) All figures are preliminary and unaudited. (2) Adjustments in the revenue line items are for support revenue that the acquired entity would have recognized had it remained a stand- alone entity but that SAP is not permitted to recognize as revenue under U.S. GAAP as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges. See Explanations of Non-GAAP Measures for details. (3) Constant currency revenue and operating income figures are calculated by translating revenue and operating income of the current period using the average exchange rates from the previous year's respective period instead of the current period. Constant currency period-over-period changes are calculated by comparing the current year's non-GAAP constant currency numbers with the non- GAAP number of the previous year's respective period. See Explanations of Non-GAAP Measures for details.
Revenues - Full Year 2009
-- U.S. GAAP software and software-related service revenues were euro 8.20 billion (2008: euro 8.46 billion), a decrease of 3%. Non-GAAP software and software-related service revenues were euro 8.21 billion (2008: euro 8.62 billion), a decrease of 5% (5% at constant currencies). -- U.S. GAAP total revenues were euro 10.67 billion (2008: euro 11.57 billion), a decrease of 8%. Non-GAAP total revenues were euro 10.68 billion (2008: euro 11.73 billion), a decrease of 9% (9% at constant currencies). -- U.S. GAAP software revenues were euro 2.61 billion (2008: euro 3.61 billion), a decrease of 28% (27% at constant currencies).
Full Year 2009 Non-GAAP revenue figures exclude an acquisition-related deferred support revenue write-down of euro 11 million (2008: euro 166 million).
Income - Full Year 2009
-- U.S. GAAP operating income was euro 2.64 billion (2008: euro 2.84 billion), a decrease of 7%. Non-GAAP operating income was euro 2.92 billion (2008: euro 3.30 billion), a decrease of 12% (11% at constant currencies). U.S. GAAP and Non-GAAP operating income were negatively impacted by restructuring charges of euro 196 million resulting from the previously announced reduction of positions. -- U.S. GAAP operating margin was 24.7% (2008: 24.6%), an increase of 0.1 percentage points. Non-GAAP operating margin was 27.3% (2008: 28.2%), or 27.6% at constant currencies, a decrease of 0.9 percentage points (0.6 percentage points at constant currencies). The euro 196 million in restructuring charges resulting from the previously announced reduction of positions negatively impacted the U.S. GAAP and Non-GAAP operating margin by 1.8 percentage points. -- U.S. GAAP income from continuing operations was euro 1.83 billion (2008: euro 1.93 billion), a decrease of 5%. Non-GAAP income from continuing operations was euro 2.04 billion (2008: euro 2.27 billion), a decrease of 10%. U.S. GAAP and Non-GAAP income from continuing operations were negatively impacted by restructuring charges of euro 138 million, net of tax, resulting from the previously announced reduction of positions. -- U.S. GAAP basic earnings per share from continuing operations were euro 1.54 (2008: euro 1.62), a decrease of 5%. Non-GAAP earnings per share from continuing operations were euro 1.71 (2008: euro 1.91), a decrease of 10%. The restructuring charges, net of tax, resulting from the previously announced reduction of positions negatively impacted the U.S. GAAP and Non-GAAP basic earnings per share by euro 0.12.
Full Year 2009 Non-GAAP operating income excludes an acquisition-related deferred support revenue write-down and acquisition-related charges totaling euro 275 million (2008: euro 463 million), and Full Year 2009 Non-GAAP income from continuing operations and Non-GAAP earnings per share from continuing operations exclude an acquisition-related deferred support revenue write-down and acquisition-related charges totaling euro 211 million net of tax (2008: euro 341 million).
Cash Flow - Full Year 2009
Operating cash flow from continuing operations was euro 3.04 billion (2008: euro 2.18 billion), an increase of 39%. Free cash flow was euro 2.81 billion (2008: euro 1.84 billion), an increase of 52%. Free cash flow was 26% of total revenues (2008: 16%). At December 31, 2009, SAP had a total group liquidity of euro 2.28 billion (December 31, 2008: euro 1.66 billion), which includes cash and cash equivalents, restricted cash and short term investments. At December 31, 2009, net liquidity, defined as total group liquidity less bank liabilities, was euro 1.58 billion.
FINANCIAL HIGHLIGHTS - Fourth Quarter 2009 SAP - Fourth Quarter 2009(1) ---------------------------- U.S. GAAP EUR million, unless stated otherwise Q4/2009 Q4/2008 % change ---------------------------------- ------- ------- -------- Software revenues 1,119 1,322 -15 ----------------- ----- ----- --- Software and software- related service revenues 2,565 2,666 -4 ---------------- ----- ----- --- Total revenues 3,189 3,487 -9 -------------- ----- ----- --- Operating expenses -2,134 -2,212 -4 --------- ------ ------ --- -Thereof restructuring charges -10 - - -------------- --- --- --- Operating income 1,055 1,275 -17 ---------------- ----- ----- --- Operating margin (%) 33.1 36.6 -3.5pp ---------------- ---- ---- ------ Income from continuing operations 748 860 -13 ----------- --- --- --- Net income 727 830 -12 ---------- --- --- --- Basic EPS from cont. operations (EUR) 0.63 0.72 -13 ----------------- ---- ---- --- SAP - Fourth Quarter 2009(1) ---------------------------- Non-GAAP(2) % change % const. EUR million, unless stated otherwise Q4/2009 Q4/2008 change curr.(3) ---------------------------------- ------- ------- ------ -------- Software revenues 1,119 1,322 -15 -14 ------------------------------------ ----- ----- --- --- Software and software- related service revenues 2,565 2,692 -5 -2 ---------------- ----- ----- --- --- Total revenues 3,189 3,513 -9 -7 -------------- ----- ----- --- --- Operating expenses -2,070 -2,140 -3 0 --------- ------ ------ --- --- -Thereof restructuring charges -10 - - - -------------- --- --- --- --- Operating income 1,119 1,373 -18 -16 ---------------- ----- ----- --- --- Operating margin (%) 35.1 39.1 -4.0pp -4.1pp ---------------- ---- ---- ------ ------ Income from continuing operations 797 930 -14 ----------- --- --- --- Net income 776 900 -14 ---------- --- --- --- Basic EPS from cont. operations (EUR) 0.67 0.78 -14 ----------------- ---- ---- --- (1) All figures are preliminary and unaudited. (2) Adjustments in the revenue line items are for support revenue that the acquired entity would have recognized had it remained a stand- alone entity but that SAP is not permitted to recognize as revenue under U.S. GAAP as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges. See Explanations of Non-GAAP Measures for details. (3) Constant currency revenue and operating income figures are calculated by translating revenue and operating income of the current period using the average exchange rates from the previous year's respective period instead of the current period. Constant currency period-over-period changes are calculated by comparing the current year's non-GAAP constant currency numbers with the non- GAAP number of the previous year's respective period. See Explanations of Non-GAAP Measures for details.
Revenues - Fourth Quarter 2009
-- U.S. GAAP software and software-related service revenues were euro 2.57 billion (2008: euro 2.67 billion), a decrease of 4%. Non-GAAP software and software-related service revenues were euro 2.57 billion (2008: euro 2.69 billion), a decrease of 5% (2% at constant currencies). -- U.S. GAAP total revenues were euro 3.19 billion (2008: euro 3.49 billion), a decrease of 9%. Non-GAAP total revenues were euro 3.19 billion (2008: euro 3.51 billion), a decrease of 9% (7% at constant currencies). -- U.S. GAAP software revenues were euro 1.12 billion (2008: euro 1.32 billion), a decrease of 15% (14% at constant currencies).
Income - Fourth Quarter 2009
-- U.S. GAAP operating income was euro 1.06 billion (2008: euro 1.28 billion), a decrease of 17%. Non-GAAP operating income was euro 1.12 billion (2008: euro 1.37 billion), decrease of 18% (16% at constant currencies). U.S. GAAP and Non-GAAP operating income were negatively impacted by restructuring charges of euro 10 million resulting from the previously announced reduction of positions. -- U.S. GAAP operating margin was 33.1% (2008: 36.6%), a decrease of 3.5 percentage points. Non-GAAP operating margin was 35.1% (2008: 39.1%), or 35.0% at constant currencies, a decrease of 4.0 percentage points (4.1 percentage points at constant currencies). The euro 10 million in restructuring charges resulting from the previously announced reduction of positions negatively impacted the U.S. GAAP and Non-GAAP operating margin by 0.3 percentage points. -- U.S. GAAP income from continuing operations was euro 0.75 billion (2008: euro 0.86 billion), a decrease of 13%. Non-GAAP income from continuing operations was euro 0.80 billion (2008: euro 0.93 billion), a decrease of 14%. U.S. GAAP and Non-GAAP income from continuing operations were negatively impacted by restructuring charges of euro 7 million, net of tax, resulting from the previously announced reduction of positions. -- U.S. GAAP basic earnings per share from continuing operations were euro 0.63 (2008: euro 0.72), a decrease of 13%. Non-GAAP basic earnings per share from continuing operations were euro 0.67 (2008: euro 0.78), a decrease of 14% year-over-year. The restructuring charges, net of tax, resulting from the previously announced reduction of positions negatively impacted the U.S. GAAP and Non-GAAP basic earnings per share by euro 0.01.
Fourth Quarter 2009 Non-GAAP operating income excludes acquisition-related charges totaling euro 64 million (2008: euro 98 million, which also included an acquisition-related deferred support revenue write-down), and Fourth Quarter 2009 Non-GAAP income from continuing operations and Non-GAAP earnings per share from continuing operations exclude acquisition-related charges totaling euro 49 million net of tax (2008: euro 70 million, which also included a deferred revenue write-down).
"As a result of a very difficult and unstable market environment that began in the third quarter of 2008 and then continued into 2009, we rapidly put into place a plan to reduce operating expenses in order to protect our operating margin. I am pleased to report that we exceeded our initial expectations," said Werner Brandt, CFO of SAP. "In 2009, we significantly reduced Non-GAAP operating expenses by around euro 650 million to euro 7.8 billion despite restructuring costs of approximately euro 200 million. The Non-GAAP operating margin at constant currencies was 27.6% which included a negative impact of 1.8 percentage points related to the restructuring charge. For 2010, we will continue to maintain strict cost controls with a spotlight on further margin expansion."
Leo Apotheker, CEO of SAP continued, "Along with margin expansion for 2010, we are also ready to return to top-line growth, although the market continues to be challenging and uncertainty among customers still exists. Despite the difficult environment last year, we never lost focus on innovation, which is the cornerstone for growth going forward. Building on a strong foundation, we will drive growth by continuing to strengthen our core business and expand beyond the core with new products and technologies that speed implementation, provide for instant consumption and are easy accessible from anywhere, anytime, and from a broad range of devices."
IFRS Financial Data
SAP will discontinue its U.S. GAAP reporting and will only report financial data under IFRS from fiscal 2010 onwards. The guidance provided by SAP for 2010 is based on Non-IFRS numbers that are derived from SAP's IFRS figures by excluding acquisition-related charges and discontinued activities. To prepare the capital markets for this change, IFRS financial data are provided in the financial section of this press release.
Business Outlook
SAP is providing the following outlook for the full-year 2010:
-- The Company expects full-year 2010 Non-IFRS software and software related service revenue to increase in a range of 4% to 8% at constant currencies (2009: euro 8.2 billion). -- The Company expects its full-year 2010 Non-IFRS operating margin to be in a range of 30% - 31% at constant currencies (2009: 27.4%). -- The Company projects an effective tax rate of 27.5% - 28.5% (based on IFRS) for 2010 (2009: 26.7%).
KEY EVENTS - Fourth Quarter 2009
-- In the fourth quarter of 2009, SAP closed major contracts in several key regions including Achmea and Rabobank Nederland, Aeroflot Russian Airlines, AOK, Credit Agricole S.A., Deutsche Bank AG, Hilti AG, NMBS-SNCB Group, and Talanx AG in EMEA; 3M Company, Baker & McKenzie, Dairy Farmers of America, Inc., Pfizer Inc., Servicios Nacional de Chocolates S.A., Sybase Inc., Verizon Services Corporation, and W.W. Grainger, Inc. in Americas; and Daiwa House Industry Co., Ltd., Department of Defence, Australia, Hubei Electric Power Corporation, Malaysian Airline System Berhad, National Australia Bank Limited, Singapore Power Ltd, and Vietnam National Petroleum Corporation in the Asia Pacific Japan region.
-- In December, Deutsche Bank and SAP signed a letter of intent to start a multi-year initiative in 2010 to replace individual software solutions in its home market by a new core banking system based on SAP for Banking solutions. The SAP implementation underpins the bank's strategy to push for a high degree of industrialization and standardization of processes.
-- On December 17, SAP announced that Valero Energy Corporation signed a global enterprise agreement with SAP that will create a tighter relationship between the two companies, including a particular focus on collaboration on solution innovation and development over the next five years.
-- On December 10, SAP announced the new SAP Business Objects Sustainability Performance Management application designed to help businesses more easily set sustainability goals and objectives, measure and communicate performance, and reduce data collection costs and errors. The new application helps organizations focus on improving economic, social and environmental performance rather than spending time on data collection and report compilation. The software features a library of key sustainability performance indicators and is the first solution to be certified by the Global Reporting Initiative Certified Software and Tools Program. The Global Reporting Initiative (GRI) is a network-based organization that has pioneered the development of the world's most widely used sustainability reporting framework and is committed to its continuous improvement and application worldwide.
-- On December 7, SAP further extended its modular, market-leading solution offerings tailored for the banking industry by announcing innovations to its industry-specific banking software that supports banks' business processes from the front to the back office.
-- On December 1, SAP announced that the 2009 Key Performance Indicator achievements of the SAP User Group Executive Network (SUGEN) SAP Enterprise Support program have shown clear value to participating SAP customers.
-- On November 20, SAP reported that market research firm IDC identified SAP as a leading vendor of customer information systems (CIS) and customer relationship management (CRM) systems for the utilities industry. The IDC study, published by IDC Energy Insights, is conducted on an annual basis. The report evaluated the seven most relevant vendors of utility-specific CIS / CRM systems in the light of the challenges of the new energy economy. SAP received the highest ratings in the category "ownership confidence" and the second highest ratings in the category "ability to address market needs."
-- On November 19, SAP was named as a leader in business performance solutions in a report by independent analyst firm Forrester Research. In the November 2009 report - "The Forrester Wave: Business Performance Solutions, Q4 2009" - SAP was positioned as a leader and ranked with the strongest overall current offering out of 10 other vendors.
-- On October 27, SAP unveiled an interactive sustainability map for the SAP EcoHub solution marketplace, providing a clear view of the ecosystem of sustainability and "Green IT" solutions and services available from SAP and its partners. By simply clicking on defined areas in the SAP sustainability map within SAP EcoHub, customers can easily discover, evaluate and buy sustainability solutions and services from SAP and its partners.
-- On October 21, SAP announced that Siemens AG, a global leader in electronics and electrical engineering, expanded its strategic relationship with SAP through its selection of the SAP Supplier Relationship Management application for Siemens' worldwide e-procurement operations. Also announced was the completion of Siemens' contract renewal for SAP maintenance support services for all SAP solutions based on SAP's maintenance standards for large customers for duration of three years.
Use of Non-GAAP and Non-IFRS Financial Measures
This press release contains certain financial measures such as Non-GAAP and Non-IFRS revenues, Non-GAAP and Non-IFRS operating income, Non-GAAP and Non-IFRS operating margin, free cash flow, constant currency revenue and operating income measures, as well as U.S. Dollar based Non-GAAP revenue numbers. These measures are not prepared in accordance with U.S. GAAP or IFRS and therefore are considered Non-GAAP or Non-IFRS financial measures. SAP's Non-GAAP and Non-IFRS financial measures may not correspond to Non-GAAP and Non-IFRS financial measures that other companies report. The Non-GAAP and Non-IFRS financial measures that SAP reports should be considered in addition to, and not as a substitute for or superior to, revenue, operating margin or SAP's other measures of financial performance prepared in accordance with U.S. GAAP and IFRS. See the financial section of this press release for additional information regarding the Non-GAAP and Non-IFRS measures included in this press release and for the reconciliations to the corresponding U.S. GAAP and IFRS measures.
Webcast / Supplementary Financial Information
SAP senior management will host a press conference in Frankfurt today at 10:00 AM (CET) / 9:00 AM (GMT) / 4:00 AM (Eastern) / 1:00 AM (Pacific), followed by an investor conference at 2:00 PM (CET) / 1:00 PM (GMT) / 8:00 AM (Eastern) / 5:00 AM (Pacific). Both conferences will be web cast live on the Company's website at http://www.sap.com/investor and will be available for replay. Supplementary financial information pertaining to the full-year and quarterly results can be found at http://www.sap.com/investor.
Note to editors (TV/ radio/ print/ online)
SAP will post material from the press conference as well as collective TV interviews with SAP CEO Leo Apotheker in both English and German, in which he will discuss the Company's Q4 2009 and full-year 2009 financial results. You can find these interviews on the SAP stock footage platform www.sap.com/stockfootage on Wednesday, January 27, 2010, following the event. The interviews will be conducted by TV journalists in English and German language.
These interviews will be published in their entirety and without any edits, as well as for your unrestricted use free of charge (also for parts of it). In addition, these clips are not branded, are clean feed, and will be available as high resolution video files, as well as mp3 files for radio journalists. SAP will also broadcast these clips via satellite starting at approximately 11:35 a.m. CET. If you are interested in recording this feed, please contact us via broadcast@sap.com for the necessary satellite and technical information.
About SAP
SAP is the world's leading provider of business software, offering applications and services that enable companies of all sizes and in all industries to become best-run businesses. With approximately 95,000 customers in over 120 countries, SAP is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol "SAP." (For more information, visit www.sap.com)
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "outlook," "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP's future financial results are discussed more fully in SAP's filings with the U.S. Securities and Exchange Commission ("SEC"), including SAP's most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.
Copyright © 2010 SAP AG. All rights reserved.
SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP Business ByDesign, and other SAP products and
services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in
Germany and other countries. Business Objects and the Business Objects logo, Business Objects, Crystal Reports,
Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects S.A. in the United States and in other countries. Business Objects is an SAP company. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary.
For more information, press only: Christoph Liedtke, +49 (6227) 7-50383, christoph.liedtke@sap.com, CET -------------------------------------- Guenter Gaugler +49 (6227) 7-65416, guenter.gaugler@sap.com, CET ------------------------------------------------------------ Jim Dever +1 (610) 661-2161, james.dever@sap.com, ET ---------------------------------------------------- For more information, financial community only: Stefan Gruber, +49 (6227) 7-44872, investor@sap.com, CET -------------------------------------------------------- Martin Cohen, +1 (212) 653-9619, investor@sap.com, ET -----------------------------------------------------
Appendix - Financial Information to Follow
Financial Information for the Fourth Quarter and the Full Year 2009 - Condensed, Preliminary and Unaudited - Page U.S. GAAP Financial Information Financial Statements Statements of Income F1 and F2 Balance Sheets F3 Statements of Cash Flows F4 Supplementary Financial Information Reconciliations from Non-GAAP Numbers to U.S. GAAP Numbers F5 and F6 Reconciliations from Non-GAAP Revenue in U.S. Dollar to U.S. GAAP Revenue in Euro F7 Revenue by Region F8 and F9 Share-Based Compensation F10 Free Cash Flow F10 Days Sales Outstanding F10 Headcount F10 Multi-Quarter Summary F11 Explanations of Non-GAAP Measures F12 to F14 IFRS Financial Information Financial Statements Statements of Income F15 Statements of Financial Position F16 Supplementary Financial Information Reconciliations from U.S. GAAP and Non-GAAP to IFRS and Non-IFRS Numbers F17 U.S. GAAP -IFRS Significant Differences with Impact on Income F18 Explanations of Non-IFRS Measures F19
CONSOLIDATED STATEMENTS OF INCOME (U.S. GAAP; preliminary and unaudited) EUR millions, unless otherwise stated Three months ended December 31 ------------------------------ 2009 2008 Change in % ---- ---- ----------- Software revenue 1,119 1,322 -15 Support revenue 1,364 1,269 7 Subscription and other software- related service revenue 82 75 9 Software and software-related service revenue 2,565 2,666 -4 Consulting revenue 519 666 -22 Training revenue 71 111 -36 Other service revenue 18 30 -40 Professional services and other service revenue 608 807 -25 Other revenue 16 14 14 ------------- --- --- --- Total revenue 3,189 3,487 -9 ------------- ----- ----- --- Cost of software and software- related services -457 -480 -5 Cost of professional services and other services -439 -565 -22 Research and development -490 -395 24 Sales and marketing -602 -629 -4 General and administration -163 -145 12 Restructuring -10 0 N/A Other operating income/expense, net 27 2 >100 ----------------------------------- --- --- ---- Total operating expenses -2,134 -2,212 -4 ------------------------ ------ ------ --- Operating income 1,055 1,275 -17 ---------------- ----- ----- --- Other non-operating income/ expense, net -17 -50 -66 Financial income/expense, net -19 -29 -34 ----------------------------- --- --- --- Income from continuing operations before income taxes 1,019 1,196 -15 ------------ ----- ----- --- Income taxes -271 -336 -19 ------------ ---- ---- --- Income from continuing operations 748 860 -13 --------------------------------- --- --- --- Loss from discontinued operations, net of tax -21 -30 -30 ---------------------------------- --- --- --- Net income 727 830 -12 ---------- --- --- --- -Net income attributable to noncontrolling interests* 1 0 N/A -Net income attributable to shareholders of SAP AG 726 830 -13 Earnings per share (EPS) EPS from continuing operations - basic in EUR 0.63 0.72 -13 EPS from continuing operations - diluted in EUR 0.63 0.72 -13 EPS from net income attributable to shareholders of SAP AG - basic in EUR 0.61 0.70 -13 EPS from net income attributable to shareholders of SAP AG - diluted in EUR 0.61 0.70 -13 Weighted average number of shares in millions, treasury stock excluded 1,189 1,187 ------------------------------------ ----- ----- Key ratios Operating margin in % 33.1 36.6 -3.5pp Effective tax rate from continuing operations in % 26.6 28.1 *Due to the first-time application of SFAS 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 the term minority interest has been replaced with noncontrolling interests and the categorization of noncontrolling interests is now shown below net income. The prior year figures have also been changed as a result of the adoption of this standard.
CONSOLIDATED STATEMENTS OF INCOME (U.S. GAAP; preliminary and unaudited) EUR millions, unless otherwise stated Twelve months ended December 31 ------------------------------- Change 2009 2008 in % ---- ---- ------- Software revenue 2,606 3,606 -28 Support revenue 5,285 4,593 15 Subscription and other software-related service revenue 306 258 19 Software and software- related service revenue 8,197 8,457 -3 Consulting revenue 2,074 2,498 -17 Training revenue 273 434 -37 Other service revenue 85 107 -21 Professional services and other service revenue 2,432 3,039 -20 Other revenue 42 69 -39 ------------- --- --- --- Total revenue 10,671 11,565 -8 ------------- ------ ------ --- Cost of software and software-related services -1,649 -1,646 0 Cost of professional services and other services -1,862 -2,296 -19 Research and development -1,608 -1,631 -1 Sales and marketing -2,192 -2,540 -14 General and administration -556 -623 -11 Restructuring -196 0 N/A Other operating income/ expense, net 32 11 >100 ----------------------- --- --- ---- Total operating expenses -8,031 -8,725 -8 ------------------------ ------ ------ --- Operating income 2,640 2,840 -7 ---------------- ----- ----- --- Other non-operating income/expense, net -80 -25 >100 Financial income/ expense, net -71 -62 15 ----------------- --- --- --- Income from continuing operations before income taxes 2,489 2,753 -10 ------------ ----- ----- --- Income taxes -664 -825 -20 ------------ ---- ---- --- Income from continuing operations 1,825 1,928 -5 ---------------------- ----- ----- --- Loss from discontinued operations, net of tax -36 -59 -39 ----------------------- --- --- --- Net income 1,789 1,869 -4 ---------- ----- ----- --- -Net income attributable to noncontrolling interests* 2 1 100 -Net income attributable to shareholders of SAP AG 1,787 1,868 -4 Earnings per share (EPS) EPS from continuing operations - basic in EUR 1.54 1.62 -5 EPS from continuing operations - diluted in EUR 1.53 1.62 -6 EPS from net income attributable to shareholders of SAP AG - basic in EUR 1.50 1.57 -4 EPS from net income attributable to shareholders of SAP AG - diluted in EUR 1.50 1.57 -4 Weighted average number of shares in millions, treasury stock excluded 1,188 1,190 ------------------------ ----- ----- Key ratios Operating margin in % 24.7 24.6 0.1pp Effective tax rate from continuing operations in % 26.7 30.0 *Due to the first-time application of SFAS 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 the term minority interest has been replaced with noncontrolling interests and the categorization of noncontrolling interests is now shown below net income. The prior year figures have also been changed as a result of the adoption of this standard.
CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. GAAP; preliminary and unaudited) December 31, December 31, EUR millions 2009 2008 ------------ ------------- ------------- Assets Cash and cash equivalents 1,883 1,277 Restricted cash 1 3 Short-term investments 400 382 Accounts receivable, net 2,447 3,128 Other assets 528 705 Deferred income taxes 190 203 Prepaid expenses/deferred charges 93 84 Current assets 5,542 5,782 Goodwill 5,034 5,009 Intangible assets, net 884 1,127 Property, plant, and equipment, net 1,371 1,405 Investments 106 95 Accounts receivable, net 1 2 Other assets 690 566 Deferred income taxes 185 187 Prepaid expenses/deferred charges 50 24 Noncurrent assets 8,321 8,415 Total assets 13,863 14,197 ------------ ------ ------ December 31, December 31, EUR millions 2009 2008 ---------- ------------- ------------- Liabilities and total equity Accounts payable 512 538 Income tax obligations 323 363 Financial liabilities 148 2,574 Other liabilities 1,640 1,486 Provisions 290 214 Deferred income taxes 22 48 Deferred income 585 611 Current liabilities 3,520 5,834 Accounts payable 0 5 Income tax obligations 193 278 Financial liabilities 739 36 Other liabilities 100 94 Provisions 510 497 Deferred income taxes 142 157 Deferred income 64 61 Noncurrent liabilities 1,748 1,128 Total liabilities 5,268 6,962 Common stock, no par value 1,226 1,226 Treasury stock -1,320 -1,362 Additional paid-in capital 317 320 Retained earnings 8,902 7,709 Accumulated other comprehensive loss -551 -660 Total equity attributable to shareholders of SAP AG 8,574 7,233 Noncontrolling interests* 21 2 Total equity 8,595 7,235 Total liabilities and total equity 13,863 14,197 --------------------------- ------ ------ * Reclassification of noncontrolling interests (previously minority interests) is based on the first-time application of SFAS 160.
CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. GAAP; preliminary and unaudited) Twelve months ended EUR millions December 31 -------------------- 2009 2008 ---- ---- Net income 1,789 1,869 Net loss from discontinued operations 36 59 Income from continuing operations 1,825 1,928 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization 496 548 Gains/losses from equity investees -1 -1 Losses on disposal of intangible assets and property, plant, and equipment -11 4 Gains on disposal of investments -1 -15 Writedowns of financial assets 11 15 Allowances for doubtful accounts 66 76 Impacts of hedging for cash-settled share-based payment plans 5 39 Share-based compensation including income tax benefits 9 19 Excess tax benefit from share-based compensation 0 -7 Deferred income taxes -74 -67 Change in accounts receivable 640 -50 Change in other assets 9 -118 Change in accrued and other liabilities 15 -255 Change in deferred income 47 67 ------------------------- --- --- Net cash provided by operating activities from continuing operations 3,036 2,183 ---------------------------------------------- ----- ----- Business combinations, net of cash and cash equivalents acquired -74 -3,773 Repayment of acquirees' debt in business combinations 0 -450 Purchase of intangible assets and property, plant, and equipment -225 -339 Proceeds from disposal of intangible assets and property, plant, and equipment 45 44 Cash transferred to restricted cash 0 -451 Reduction of restricted cash 3 1,001 Purchase of investments -1,059 -380 Sales of investments 1,011 579 Purchase of other financial assets -14 -16 Sales of other financial assets 17 16 ------------------------------- --- --- Net cash used in investing activities from continuing operations -297 -3,769 ------------------------------------------ ---- ------ Dividends paid -594 -594 Purchase of treasury stock 0 -487 Proceeds from reissuance of treasury stock 24 85 Proceeds from issuance of common stock (share- based compensation) 6 13 Excess tax benefit from share-based compensation 0 7 Proceeds from private placement transaction 697 0 Proceeds from short-term and long-term debt 0 3,859 Repayments of short-term and long-term debt -2,303 -1,571 Proceeds from the exercise of equity-based derivative instruments (STAR hedge) 4 24 Purchase of equity-based derivative instruments (hedge for cash-settled share-based payment plans) 0 -55 ----------------------------------------------- --- --- Net cash provided by/used in financing activities from continuing operations -2,166 1,281 --------------------------------------- ------ ----- Effect of foreign exchange rates on cash and cash equivalents 52 -1 ------------------------------------------------- --- --- Net cash used in operating activities from discontinued operations -17 -25 ------------------------------------------ --- --- Net change in cash and cash equivalents 606 -331 --------------------------------------- --- ---- Cash and cash equivalents at the beginning of the period 1,277 1,608 ------------------------------------------------- ----- ----- Cash and cash equivalents at the end of the period 1,883 1,277 ------------------------------------------- ----- -----
Reconciliations from Non-GAAP Numbers to U.S. GAAP Numbers Preliminary and unaudited The following table presents a reconciliation from our non-GAAP numbers (including our non-GAAP at constant currency numbers) to the respective most comparable U.S. GAAP numbers. Note: Our non-GAAP numbers are not prepared under a comprehensive set of accounting rules or principles. EUR millions, unless otherwise stated Three months ended December 31 ------------------------------ 2009 ---- U.S. Non- Non- GAAP Adj.* GAAP* Currency GAAP impact** constant currency** Non- GAAP Revenue Numbers ======== Software revenue 1,119 0 1,119 23 1,142 Support revenue 1,364 0 1,364 48 1,412 Subscription and other software- related service revenue 82 0 82 3 85 Software and software- related service revenue 2,565 0 2,565 74 2,639 Consulting revenue 519 0 519 18 537 Training revenue 71 0 71 2 73 Other service revenue 18 0 18 1 19 Professional services and other service revenue 608 0 608 21 629 Other revenue 16 0 16 0 16 Total revenue 3,189 0 3,189 95 3,284 -------- ----- --- ----- --- ----- Non- GAAP Operating Expense Numbers ========== Cost of software and software- related services -457 44 -413 Cost of professional services and other services -439 0 -439 Research and development -490 0 -490 Sales and marketing -602 18 -584 General and administration -163 2 -161 Restructuring -10 0 -10 Other operating income/ expense, net 27 0 27 Total operating expenses -2,134 64 -2,070 -64 -2,134 ---------- ------ --- ------ --- ------ Non- GAAP Income Numbers ======== Operating income 1,055 64 1,119 32 1,151 Other non- operating income/ expense, net -17 0 -17 Financial income/ expense, net -19 0 -19 Income from continuing operations before income taxes 1,019 64 1,083 Income taxes -271 -15 -286 Income from continuing operations 748 49 797 Loss from discontinued operations, net of tax -21 0 -21 Net income 727 49 776 -Net income attributable to noncontrolling interests 1 0 1 -Net income attributable to shareholders of SAP AG 726 49 775 ------------- --- --- --- Non- GAAP EPS ===== EPS from continuing operations - basic in EUR 0.63 0.67 EPS from continuing operations - diluted in EUR 0.63 0.67 EPS from net income attributable to shareholders of SAP AG - basic in EUR 0.61 0.65 EPS from net income attributable to shareholders of SAP AG - diluted in EUR 0.61 0.65 Weighted average number of shares in millions, treasury stock excluded 1,189 1,189 ---------- ----- ----- Non- GAAP Key Ratios ======= Operating margin in % 33.1 35.1 35.0 Effective tax rate from continuing operations in % 26.6 26.4 EUR millions, unless otherwise stated Three months ended December 31 ------------------------------ 2008 ---- U.S. Non- GAAP Adj.* GAAP* Non- GAAP Revenue Numbers ======== Software revenue 1,322 0 1,322 Support revenue 1,269 26 1,295 Subscription and other software- related service revenue 75 0 75 Software and software- related service revenue 2,666 26 2,692 Consulting revenue 666 0 666 Training revenue 111 0 111 Other service revenue 30 0 30 Professional services and other service revenue 807 0 807 Other revenue 14 0 14 Total revenue 3,487 26 3,513 -------- ----- --- ----- Non- GAAP Operating Expense Numbers ========== Cost of software and software- related services -480 51 -429 Cost of professional services and other services -565 0 -565 Research and development -395 -1 -396 Sales and marketing -629 22 -607 General and administration -145 0 -145 Restructuring 0 0 0 Other operating income/ expense, net 2 0 2 Total operating expenses -2,212 72 -2,140 ---------- ------ --- ------ Non- GAAP Income Numbers ======== Operating income 1,275 98 1,373 Other non- operating income/ expense, net -50 0 -50 Financial income/ expense, net -29 0 -29 Income from continuing operations before income taxes 1,196 98 1,294 Income taxes -336 -28 -364 Income from continuing operations 860 70 930 Loss from discontinued operations, net of tax -30 0 -30 Net income 830 70 900 -Net income attributable to noncontrolling interests 0 0 0 -Net income attributable to shareholders of SAP AG 830 70 900 ------------- --- --- --- Non- GAAP EPS ===== EPS from continuing operations - basic in EUR 0.72 0.78 EPS from continuing operations - diluted in EUR 0.72 0.78 EPS from net income attributable to shareholders of SAP AG - basic in EUR 0.70 0.76 EPS from net income attributable to shareholders of SAP AG - diluted in EUR