WALLDORF, Germany, April 20, 2016 /PRNewswire/ -- SAP SE (NYSE: SAP) today announced its financial results for the first quarter ended March 31, 2016.
Business Highlights
Financial Highlights
SAP had strong growth in the cloud, ahead of its mid-term aspirations. First quarter non-IFRS cloud subscriptions and support revenue grew 33% year-over-year (33% at constant currencies) to €678 million. New cloud bookings1 grew a solid 23% (26% at constant currencies) in the first quarter and reached €145 million.
The rapidly growing cloud business together with solid growth in support revenue drove a record share of more predictable revenue. The total of cloud subscriptions & support revenue and software support revenue reached 69% share of total revenue in the first quarter 2016.
IFRS cloud and software revenue was €3.85 billion (2015: €3.65 billion), an increase of 5%. Non-IFRS cloud and software revenue was €3.85 billion (2015: €3.66 billion), an increase of 5% (6% at constant currencies).
IFRS operating profit was up 28% to €0.81 billion. Non-IFRS operating profit grew 5% to €1.10 billion (4% at constant currencies). IFRS earnings per share increased 38% to €0.48. Non-IFRS earnings per share increased 9% to €0.64.
Operating cash flow was €2.48 billion (2015: €2.37 billion), an increase of 5% year-over-year. Free cash flow increased 4% year-over-year to €2.31 billion (2015: €2.23 billion).
"The entire SAP company is focused on delivering best in class solutions to our customers. Our pipeline is strong across our entire portfolio and we are confidently reiterating our guidance for the full year," said Bill McDermott, SAP CEO.
"SAP's strong cloud growth was at the high end of our guidance range for 2016 and ahead of our midterm aspirations. Our cloud gross margin expanded year over year which – along with the successful business transformation – drove operating profit up 5% even with a lower than expected license performance," said Luka Mucic, SAP CFO.
SAP S/4HANA
SAP S/4HANA momentum continued in the first quarter as customers increasingly embrace the benefits of running simple and real time. SAP added more than 500 SAP S/4HANA customers in the quarter, of which approximately 30% are net new SAP customers. A growing driver behind the global S/4HANA adoption is SAP HANA Enterprise Cloud (HEC). Customers can migrate their mission-critical processes to the cloud – HEC offers secure and fast access to SAP's new innovation. Benetton, Norton Rose Fulbright, Beiqi Foton Motor and Huaxin Cement selected SAP S/4HANA in the first quarter.
Human Capital Management
SAP continues to gain traction with its cloud-based Human Capital Management solutions. SAP delivers total workforce management solutions globally and provides extensibility with the HANA Cloud Platform. The customer count for SAP SuccessFactors Employee Central, which is the core of our Human Capital Management offerings, exceeded 1,100 at the end of the first quarter.
Customer Engagement and Commerce
With SAP's Customer Engagement and Commerce (CEC) solutions customers can build a new, more personalized relationship with their consumers, making it richer and more contextual across all channels. SAP is unique because it also enables businesses to connect the front and back office in real-time and fulfill ecommerce in one end-to-end value chain. CEC cloud subscription and support revenue saw strong double-digit growth in the first quarter.
Business Networks
SAP is leading the charge to a hyperconnected world. SAP's business network solutions which include Ariba, Fieldglass and Concur provide a rich open platform that connects a large ecosystem of customers, suppliers, partners and developers delivering ever expanding content and innovation.
Approximately 2.1 million connected companies trade over $800 billion of commerce2 on the Ariba network, approximately 40 million end users process travel and expenses effortlessly with Concur and customers managed over 2.3 million flexible workers in approximately 130 countries with the Fieldglass platform over the past 12 months.
Regional Performance
The Company had a solid performance in the EMEA region, with an 8% increase in Non-IFRS cloud and software revenue. Non-IFRS cloud subscriptions and support revenue grew 49%. In EMEA SAP had solid software license revenue growth.
In the Americas region, the Company grew Non-IFRS cloud and software revenue by 4% and Non-IFRS cloud subscriptions and support revenue by 29%. North America, coming off a very strong fourth quarter in 2015, had a slower than anticipated start to the year. In Latin America, in particular in Brazil, the continuing political and macroeconomic instability weighed on the company's first quarter performance.
In the APJ region Non-IFRS cloud and software revenue was up 1%, with Non-IFRS cloud subscriptions and support revenue growing by 26%. SAP's software revenue performance in the region was in line with the Company's expectations given a tough prior year comparison. China was a highlight with double-digit software revenue growth.
Financial Results at a Glance
Business Outlook 2016
The Company reiterates the following 2016 outlook:
While the Company's full-year 2016 business outlook is at constant currencies, actual currency reported figures are expected to continue to be impacted by exchange rate fluctuations. If exchange rates remain at the March 2016 average level for the rest of the year, the Company expects its non-IFRS cloud and software revenue growth rate as well as its non-IFRS operating profit growth rate to experience a currency benefit in a range of 0 to 2 percentage points for the second quarter 2016 (1 to 3 percentage points for the full year 2016).
Additional Information
Subsequent Events
As of April 1, 2016 SAP has combined its small and medium-sized customers focused solutions SAP Anywhere, SAP Business One and SAP Business ByDesign into one end-to-end organization under the leadership of Executive Board member Steve Singh. In addition, Steve Singh will also be responsible for SAP's healthcare strategy and solutions and continues to be responsible for the SAP Business Networks. This is likely to lead to a change in our segment reporting as of Q2/2016.
General Remarks About this Quarterly Statement
In the past, SAP's quarterly earnings reporting consisted of an earnings press release with condensed financial information and an interim report. This quarterly statement replaces both of these documents and includes all relevant information of both of these documents. Going forward, we will issue a quarterly statement for each of the four fiscal quarters. Additionally, we will issue, as before, a half year report and a full year integrated report.
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.
Webcast
SAP earnings conference call for financial analysts will take place on Wednesday, April 20th at 2:00 PM (CEST) / 1:00 PM (GMT) / 8:00 AM (EDT) / 5:00 AM (PDT). The conference call will be web cast live on the Company's website at www.sap.com/investor and will be available for replay.
About SAP
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable approximately 310,000 business and public sector customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.
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Link: SAP SE: Cloud Revenue Up 33% - IFRS EPS Up 38% - Non-IFRS EPS Up 9%