6-K
Sap SE (SAP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO SECTION 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
October 20, 2023
Commission file number:
001-14251
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 [ ]
SAP SE
FORM 6-K
On October 19, 2023, SAP SE, (“SAP"), filed a quarterly statement with Deutsche Boerse AG for the first quarter ended September 30, 2023 (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 |
|---|---|
| 99.1 | Quarterly<br> Statement dated October 18, 2023 |
| --- | --- |
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/ Julia Zicke |
| Name: Dr. Julia Zicke | |
| Title: Head of<br> External Reporting and Accounting Technology |
Date: October 20, 2023
4
EXHIBIT INDEX
| Exhibit No. | Exhibit |
|---|---|
| 99.1 | Quarterly Statement dated October 18, 2023 |
| --- | --- |
5
Exhibit 99.1
SAPAnnounces Q3 2023 Results
| ● | Cloud<br> revenue up 16% and up 23% at constant currencies |
|---|---|
| ● | Current<br> cloud backlog of €12.3 billion up 19% and up 25% at constant currencies |
| --- | --- |
| ● | IFRS<br> cloud gross profit up 21%, non-IFRS cloud gross profit up 21% and up 28% at constant<br> currencies, supported by the expansion of cloud gross margin |
| --- | --- |
| ● | IFRS<br> operating profit up 11%, non-IFRS operating profit up 10% and up 16% at constant currencies |
| --- | --- |
| ● | SAP<br> reaffirms 2023 outlook |
| --- | --- |
in € millions, unless otherwise stated; based on SAP group results from continuing operations
 |
ChristianKlein, CEO: |  |
Dominik Asam, CFO: |
|---|---|---|---|
| "Our<br> Q3 results are yet another proof point that we have entered the next phase of our transformation.<br> We accelerated cloud growth across our portfolio and significantly expanded our cloud<br> gross margins. Our strong focus on innovation, including our latest SAP Business AI capabilities,<br> ensure SAP's continued resiliency in the face of tough macroeconomic conditions and increasing<br> geopolitical tensions." | "Our<br> Q3 results demonstrate strong execution and the resilience of our business, including<br> sustained cloud growth in spite of persisting macro headwinds. Also, we carefully balance<br> growth and profitability at all times. In combination, this allows us to boost our bottom-line<br> with the aim to achieve double-digit operating profit growth this year." |
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Walldorf, Germany – October 18, 2023.
SAP SE (NYSE: SAP) today announced its financial results for the third quarter ended September 30, 2023.
All figures in this statement are based on SAP group results from continuing operations unless otherwise noted. See section (M) Discontinued Operations.
| Financial Performance |
|---|
Group results at a glance – Third quarter 2023
| IFRS | Non-IFRS^1^ | ||||||
|---|---|---|---|---|---|---|---|
| €<br> million, unless otherwise stated | Q3<br> 2023 | Q3<br> 2022 | ∆<br> in % | Q3<br> 2023 | Q3<br> 2022 | ∆<br> in % | ∆<br> in %<br><br>const.<br><br>curr. |
| Cloud revenue | 3,472 | 2,986 | 16 | 3,472 | 2,986 | 16 | 23 |
| Thereof<br> SAP S/4HANA Cloud revenue | 914 | 546 | 67 | 914 | 546 | 67 | 77 |
| Software<br> licenses | 335 | 406 | –17 | 335 | 406 | –17 | –14 |
| Software<br> support | 2,872 | 3,016 | –5 | 2,872 | 3,016 | –5 | –1 |
| Software<br> licenses and support revenue | 3,208 | 3,422 | –6 | 3,208 | 3,422 | –6 | –2 |
| Cloud<br> and software revenue | 6,679 | 6,408 | 4 | 6,679 | 6,408 | 4 | 9 |
| Total<br> revenue | 7,744 | 7,476 | 4 | 7,744 | 7,476 | 4 | 9 |
| Share<br> of more predictable revenue (in %) | 82 | 80 | 2pp | 82 | 80 | 2pp | |
| Operating<br> profit (loss) | 1,724 | 1,557 | 11 | 2,278 | 2,075 | 10 | 16 |
| Profit<br> (loss) after tax from continuing operations | 1,272 | 839 | 52 | 1,687 | 1,240 | 36 | |
| Profit<br> (loss) after tax² | 1,272 | 547 | >100 | 1,687 | 1,263 | 34 | |
| Earnings<br> per share - Basic (in €) from continuing operations | 1.09 | 0.75 | 45 | 1.45 | 1.10 | 32 | |
| Earnings<br> per share - Diluted (in €) from continuing operations | 1.08 | 0.75 | 44 | ||||
| Earnings<br> per share - Basic (in €)² | 1.09 | 0.57 | 91 | 1.45 | 1.12 | 30 | |
| Earnings<br> per share - Diluted (in €)² | 1.08 | 0.57 | 90 | ||||
| Net<br> cash flows from operating activities from continuing operations | 1,124 | 887 | 27 | ||||
| Free<br> cash flow | 865 | 513 | 69 | ||||
| Number<br> of employees (FTE, September 30) | 106,495 | 106,912 | 0 |
^1^For a breakdown of the individual adjustments see table “Non-IFRS Adjustments by Functional Areas” in this Quarterly Statement.
^2^From continuing and discontinued operations.
Group results at a glance – Nine months ended September 2023
| IFRS | Non-IFRS^1^ | ||||||
|---|---|---|---|---|---|---|---|
| €<br> million, unless otherwise stated | Q1–Q3<br><br> <br><br><br> <br>2023 | Q1–Q3<br><br> <br><br><br> <br>2022 | ∆<br> in % | Q1–Q3<br><br> <br><br><br> <br>2023 | Q1–Q3<br><br> <br><br><br> <br>2022 | ∆<br> in % | ∆<br> in %<br><br>const.<br><br>curr. |
| Cloud revenue | 9,965 | 8,348 | 19 | 9,965 | 8,348 | 19 | 22 |
| Thereof<br> SAP S/4HANA Cloud revenue | 2,453 | 1,422 | 72 | 2,453 | 1,422 | 72 | 77 |
| Software<br> licenses | 927 | 1,149 | –19 | 927 | 1,149 | –19 | –17 |
| Software<br> support | 8,651 | 8,916 | –3 | 8,651 | 8,916 | –3 | –1 |
| Software<br> licenses and support revenue | 9,577 | 10,065 | –5 | 9,577 | 10,065 | –5 | –3 |
| Cloud<br> and software revenue | 19,542 | 18,413 | 6 | 19,542 | 18,413 | 6 | 9 |
| Total<br> revenue | 22,739 | 21,456 | 6 | 22,739 | 21,456 | 6 | 8 |
| Share<br> of more predictable revenue (in %) | 82 | 80 | 1pp | 82 | 80 | 1pp | |
| Operating<br> profit (loss) | 3,885 | 4,088 | –5 | 6,211 | 5,429 | 14 | 19 |
| Profit<br> (loss) after tax from continuing operations | 2,399 | 2,468 | –3 | 4,189 | 3,508 | 19 | |
| Profit<br> (loss) after tax^2^ | 4,671 | 1,382 | >100 | 6,243 | 3,522 | 77 |
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| Earnings<br> per share - Basic (in €) from continuing operations | 2.07 | 2.17 | –5 | 3.60 | 3.05 | 18 |
|---|---|---|---|---|---|---|
| Earnings<br> per share - Diluted (in €) from continuing operations | 2.05 | 2.16 | –5 | |||
| Earnings<br> per share - Basic (in €)^2^ | 4.13 | 1.49 | >100 | 5.53 | 3.08 | 80 |
| Earnings<br> per share - Diluted (in €)^2^ | 4.09 | 1.48 | >100 | |||
| Net<br> cash flows from operating activities from continuing operations | 4,284 | 3,653 | 17 | |||
| Free<br> cash flow | 3,423 | 2,662 | 29 | |||
| Number<br> of employees (FTE, September 30) | 106,495 | 106,912 | 0 |
^1^For a breakdown of the individual adjustments see table “Non-IFRS Adjustments by Functional Areas” in this Quarterly Statement.
^2^From continuing and discontinued operations.
| Financial Highlights**^1^** |
|---|
Third Quarter 2023
Current cloud backlog grew by 19% to €12.27 billion and was up 25% at constant currencies. SAP S/4HANA current cloud backlog was up 58% to €4.20 billion and up 66% at constant currencies.
In the third quarter, cloud revenue was up 16% to €3.47 billion and up 23% at constant currencies, mainly driven by the growth of SAP’s combined SaaS and PaaS portfolio, which was up 19% and up 26% at constant currencies. SAP S/4HANA cloud revenue was up 67% to €914 million and up 77% at constant currencies.
Supported by a few major transactions, software licenses revenue decreased by 17% to €335 million and was down 14% at constant currencies. Cloud and software revenue was up 4% to €6.68 billion and up 9% at constant currencies. Services revenue was flat at €1.07 billion and up 4% at constant currencies. Total revenue was up 4% to €7.74 billion and up 9% at constant currencies.
The share of more predictable revenue increased by 2 percentage points to 82% in the third quarter.
Cloud gross profit was up 21% (IFRS) to €2.53 billion, up 21% to €2.56 billion (non-IFRS), and up 28% (non-IFRS at constant currencies). Cloud gross profit growth was supported by a strong increase in cloud gross margins. IFRS cloud gross margin was up 2.9 percentage points to 72.7%, non-IFRS cloud gross margin up 2.9 percentage points to 73.7% and up 2.9 percentage points at constant currencies.
IFRS operating profit increased 11% to €1.72 billion. Non-IFRS operating profit was up 10% to €2.28 billion and up 16% at constant currencies. The increase was supported by the resilience of our on-premise business as well as continued operational discipline, which overcompensated the negative impact of an accelerated amortization of capitalized sales commissions related to the on-premise business (see section (O) Capitalized Cost from Contracts with Customers – Costs of Obtaining Customer Contracts).
IFRS earnings per share (basic) increased 45% to €1.09. Non-IFRS earnings per share (basic) increased 32% to €1.45. The effective tax rate was 27.8% (IFRS) and 27.1% (non-IFRS).
Free cash flow in the third quarter increased by 69% to €865 million. While payments for taxes and share-based compensation increased, the positive development was driven by SAP’s profitability, improvements in working capital and lower payments for capex and leasing. For the first nine months, free cash flow was up 29% to €3.42 billion.
Share Repurchase Program
On May 16, SAP announced a new share repurchase program with an aggregate volume of up to €5 billion and a term until December 31, 2025. As of September 29, SAP had repurchased 7,190,252 shares at an average price of €125.49 with a purchased value of approximately €902 million under the program.
^1^The Q3 2023 results were also impacted by other effects. For details, please refer to the disclosures on page 29 of this document.
3/29
| Business Highlights |
|---|
In the third quarter, customers around the globe continued to choose “RISE with SAP” to drive their end-to-end business transformations. These customers included ADAC, Alnatura, BC Hydro, Bobst Mex, Constellium, Graybar, Hitachi Zosen Corporation, KAESER KOMPRESSOREN, LG Electronics, LG Energy Solution, PUMA, Siemens Healthineers, and University of Leeds.
BMW Group, Celltrion Healthcare, City of Vancouver, Schneider Electric, Toll Group, and UPL Limited went live on SAP S/4HANA Cloud in the third quarter.
Atria, elobau, Leanin’ Tree, Northstar Clean Technologies, PERSSA, Phoenix Global, Tait International, and Ziegler Holding chose “GROW with SAP”, a new offering helping midsize customers adopt cloud ERP with speed, predictability, and continuous innovation.
Key customer wins across SAP’s solution portfolio included: Accenture, Adobe, BVG (Berlin public transport), Ecovacs, freenet DLS, Fressnapf, Heidelberger Druckmaschinen, Hyundai Motor Company / Kia, Jollibee Foods Corporation, Lenovo, RICOH, Salling Group, and thyssenkrupp Steel Europe.
Ducati Motor Holding, Gilead Sciences, Hunkemöller, The KaDeWe Group, Swiss Federal Railways, and SCOTT Sports went live on SAP solutions.
In the third quarter, SAP’s cloud revenue performance was particularly strong in APJ and EMEA and solid in the Americas region. Brazil, India, and the Netherlands had outstanding cloud revenue growth while Canada, China, France, Germany, Japan, and Switzerland performed particularly strong.
On July 4, 2023, SAP was informed that Standard and Poor’s (S&P) upgraded its credit rating to A+ from A, citing SAP’s sound cloud transition execution, its track record of deleveraging quickly and its high cash generation.
On July 18, SAP announced the next step in its commitment to deliver Business AI that is relevant, reliable, and responsible with strategic investments in three leading generative AI companies. The investments in Aleph Alpha, Anthropic, and Cohere reinforce SAP’s open ecosystem approach to AI, leveraging the best technology to embed AI across SAP’s portfolio.
On August 29, SAP announced that Gina Vargiu-Breuer has been appointed to the Executive Board of SAP as Chief People Officer and labor director, effective from February 1, 2024. She will succeed Sabine Bendiek, who will be leaving the company at her own request upon the end of her term on December 31, 2023.
On August 29, SAP and Google Cloud announced an expanded partnership to help enterprises harness the power of data and generative AI. The companies will combine their integrated open data cloud using the SAP Datasphere solution with Vertex AI to launch new generative AI-powered industry solutions starting with automotive and to introduce new capabilities to help customers improve sustainability performance.
On September 1, SAP announced the appointment of Walter Sun as Global Head of Artificial Intelligence. Sun joined SAP from Microsoft where he served as vice president of Copilot Applied Artificial Intelligence for business applications.
On September 7, SAP and LeanIX GmbH announced that SAP has entered into an agreement to acquire LeanIX, a leader in enterprise architecture management (EAM) software. The planned acquisition is expected to help SAP expand its business transformation portfolio, giving customers access to the full suite of tools required for continuous business transformation and facilitating AI-enabled process optimization. The transaction is expected to close in the fourth quarter of 2023, subject to customary closing conditions and regulatory approvals.
On September 26, SAP announced Joule, a natural-language, generative AI copilot. Joule will be embedded throughout SAP’s cloud enterprise portfolio, delivering proactive and contextualized insights from across the breadth and depth of SAP solutions and third-party sources.
4/29
Segment Results at a Glance
SAP’s reportable segment showed the following performance:
| Applications, Technology & Services^1^ | Q3 2023 | ||
|---|---|---|---|
| €<br> million, unless otherwise stated<br><br> <br><br><br> <br>(Non-IFRS) | Actual<br><br> <br><br><br> <br>Currency | ∆<br> in % | ∆<br> in %<br><br> <br><br><br> <br>Constant<br> Currency |
| Cloud<br> revenue – SaaS^2^ | 2,448 | 17 | 24 |
| Cloud<br> revenue – PaaS^3^ | 558 | 39 | 46 |
| Cloud<br> revenue – IaaS^4^ | 186 | –20 | –16 |
| Cloud<br> revenue | 3,192 | 17 | 24 |
| Cloud<br> gross profit – SaaS^2^ | 1,750 | 18 | 26 |
| Cloud<br> gross profit – PaaS^3^ | 473 | 48 | 55 |
| Cloud<br> gross profit – IaaS^4^ | 70 | 1 | –3 |
| Cloud<br> gross profit | 2,292 | 23 | 30 |
| Segment<br> revenue | 7,460 | 3 | 9 |
| Segment<br> profit (loss) | 2,666 | 18 | 24 |
| Segment<br> margin (in %) | 35.7 | 4.3pp | 4.4pp |
^1^Segment information for comparative prior periods were restated to conform with the new segment composition.
^2^Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS.
^3^Platform as a service: PaaS primarily includes SAP Business Technology Platform and SAP Signavio.
^4^Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud.
In the third quarter, segment revenue in AT&S was up 3% to €7.46 billion and up 9% at constant currencies, primarily due to strong cloud revenue growth, which was supported by SAP S/4HANA as well as Business Technology Platform. Operating Expenses of the segment decreased by 3% and increased by 2% at constant currencies, resulting in a segment margin of 35.7% and 35.8% at constant currencies. This implies a growth of 4.3 percentage points and 4.4 percentage points at constant currencies compared to the third quarter of the prior year.
Cloud Performance
| Q3 2023 | Q1–Q3 2023 | |||||
|---|---|---|---|---|---|---|
| €<br> millions, unless otherwise stated<br><br> <br><br><br> <br>(non-IFRS) | Actual<br><br><br> Currency | ∆<br> in % | ∆<br> in %<br><br> Constant<br><br> Currency | Actual<br><br><br> Currency | ∆<br> in % | ∆<br> in %<br><br> Constant<br><br> Currency |
| Current<br> Cloud Backlog | ||||||
| Total | 12,269 | 19 | 25 | 12,269 | 19 | 25 |
| Thereof<br> SAP S/4HANA | 4,199 | 58 | 66 | 4,199 | 58 | 66 |
| Cloud<br> Revenue | ||||||
| SaaS^1^ | 2,727 | 16 | 23 | 7,827 | 20 | 22 |
| PaaS^2^ | 558 | 39 | 46 | 1,561 | 43 | 46 |
| IaaS^3^ | 186 | –20 | –16 | 577 | –18 | –17 |
| Total | 3,472 | 16 | 23 | 9,965 | 19 | 22 |
| Thereof<br> SAP S/4HANA | 914 | 67 | 77 | 2,453 | 72 | 77 |
| Cloud<br> Gross Profit | ||||||
| SaaS^1^ | 2,016 | 17 | 24 | 5,688 | 20 | 23 |
| PaaS^2^ | 473 | 48 | 55 | 1,316 | 49 | 53 |
| IaaS^3^ | 70 | 1 | –3 | 219 | –11 | –11 |
| Total | 2,558 | 21 | 28 | 7,222 | 23 | 26 |
| Cloud<br> Gross Margin (in %) | ||||||
| SaaS^1^(in %) | 73.9 | 0.6pp | 0.7pp | 72.7 | 0.2pp | 0.4pp |
| PaaS^2^(in %) | 84.7 | 5.0pp | 5.0pp | 84.3 | 3.8pp | 3.9pp |
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| Q3 2023 | Q1–Q3 2023 | |||||
|---|---|---|---|---|---|---|
| €<br> millions, unless otherwise stated<br><br> <br><br><br> <br>(non-IFRS) | Actual<br><br><br> Currency | ∆<br> in % | ∆<br> in %<br><br> Constant<br><br> Currency | Actual<br><br><br> Currency | ∆<br> in % | ∆<br> in %<br><br> Constant<br><br> Currency |
| IaaS^3^(in %) | 37.4 | 7.9pp | 4.6pp | 37.9 | 3.0pp | 2.4pp |
| Total | 73.7 | 2.9pp | 2.9pp | 72.5 | 2.1pp | 2.3pp |
^1^Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS.
^2^Platform as a service: PaaS primarily includes SAP Business Technology Platform and SAP Signavio.
^3^Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud.
Due to rounding, numbers may not add up precisely.
| Business Outlook |
|---|
Financial Outlook 2023
For 2023, SAP continues to expect:
| ● | €14.0<br> – 14.2 billion cloud revenue at constant currencies (2022: €11.43 billion),<br> up 23% to 24% at constant currencies. |
|---|---|
| ● | €27.0<br> – 27.4 billion cloud and software revenue at constant currencies (2022: €25.39<br> billion), up 6% to 8% at constant currencies. |
| --- | --- |
| ~~●~~ | €8.65<br> – 8.95 billion non-IFRS operating profit at constant currencies (2022: €7.99<br> billion), up 8% to 12% at constant currencies. |
| --- | --- |
| ● | A<br> share of more predictable revenue of approximately 82% (2022: 79%). |
| --- | --- |
| ● | Free<br> cash flow of approximately €4.9 billion (2022: €4.4 billion). |
| --- | --- |
| ● | An<br> effective tax rate (IFRS) of 28.0% to 32.0% (2022: 32.0%) and an effective tax rate (non-IFRS)<br> of 26.0% to 28.0% (2022: 29.6%). |
| --- | --- |
While SAP’s 2023 financial 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.
Currency Impact Assuming September 2023 Rates Apply for 2023
| In<br> percentage points | Q4<br> 2023 | FY<br> 2023 |
|---|---|---|
| Cloud<br> revenue growth | –5pp<br> to –3pp | –4pp<br> to –2pp |
| Cloud<br> and software revenue growth | –4pp<br> to –2pp | –4pp<br> to –2pp |
| Operating<br> profit growth (non-IFRS) | –4pp<br> to –2pp | –5pp<br> to –3pp |
Non-Financial Outlook 2023
SAP continues to focus on three non-financial indicators: customer loyalty, employee engagement, and carbon emissions.
In 2023, SAP continues to expect:
| ● | a<br> Customer Net Promoter Score of 8 to 12^2^. |
|---|---|
| ● | an<br> Employee Engagement Index to be in a range of 76% to 80%. |
| --- | --- |
| ● | Net<br> carbon emissions of 0kt, meaning the Company will be carbon neutral in its own operations. |
| --- | --- |
^2^The guidance is based on an adjusted methodology for 2023 to better reflect the business priorities of the company.
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| Additional Information |
|---|
This press release and all information therein is preliminary and unaudited. Due to rounding, numbers may not add up precisely.
SAP Performance Measures
For more information about our key growth metrics and performance measures, their calculation, their usefulness, and their limitations, please refer to the following document on our Investor Relations website: https://www.sap.com/investors/performance-measures
Webcast
SAP senior management will host a financial analyst conference call on Wednesday, October 18^th^ at 11:00 PM (CEST) / 10:00 PM (BST) / 5:00 PM (EDT) / 2:00 PM (PDT). The conference will be webcast on the Company’s website at https://www.sap.com/investor and will be available for replay. Supplementary financial information pertaining to the third quarter results can be found at https://www.sap.com/investor.
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 X 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:
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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 2022 Annual Report on Form 20-F.
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Contents
| Financial<br> and Non-Financial Key Facts (IFRS and Non-IFRS) | 9 | |
|---|---|---|
| Primary<br> Financial Statements of SAP Group (IFRS) | 11 | |
| (A) | Consolidated<br> Income Statements | 11 |
| (B) | Consolidated<br> Statements of Financial Position | 13 |
| (C) | Consolidated<br> Statements of Cash Flows | 14 |
| Non-IFRS<br> Numbers | 15 | |
| (D) | Basis<br> of Non-IFRS Presentation | 15 |
| (E) | Reconciliation<br> from Non-IFRS Numbers to IFRS Numbers | 15 |
| (F) | Non-IFRS<br> Adjustments – Actuals and Estimates | 18 |
| (G) | Non-IFRS<br> Adjustments by Functional Areas | 18 |
| Disaggregations | 20 | |
| (H) | Segment<br> Reporting | 20 |
| (I) | Revenue<br> by Region (IFRS and Non-IFRS) | 24 |
| (J) | Employees<br> by Region and Functional Areas | 25 |
| Other<br> Disclosures | 26 | |
| (K) | Financial<br> Income, Net | 26 |
| (L) | Updated<br> Cost Allocation Policy | 26 |
| (M) | Discontinued<br> Operations | 26 |
| (N) | Correction<br> of Q2 2023 Qualtrics divestiture reporting | 27 |
| (O) | Capitalized<br> Cost from Contracts with Customers – Costs of Obtaining Customer Contracts | 29 |
8/29
Financialand Non-Financial Key Facts
(IFRS and Non-IFRS)
| €<br> millions, unless otherwise stated | Q1<br><br> <br>2022 | Q2<br><br> <br>2022 | Q3<br><br> <br>2022 | Q4<br><br> <br>2022 | TY<br><br> <br>2022 | Q1<br><br> <br>2023 | restatedQ2<br><br> <br>2023^1^ | Q3<br><br> <br>2023 |
|---|---|---|---|---|---|---|---|---|
| Revenues | ||||||||
| Cloud | 2,565 | 2,796 | 2,986 | 3,078 | 11,426 | 3,178 | 3,316 | 3,472 |
| %<br> change – yoy | 29 | 32 | 36 | 29 | 31 | 24 | 19 | 16 |
| %<br> change constant currency – yoy | 23 | 23 | 23 | 21 | 23 | 22 | 22 | 23 |
| SAP<br> S/4HANA Cloud | 404 | 472 | 546 | 660 | 2,081 | 716 | 823 | 914 |
| %<br> change – yoy | 78 | 84 | 98 | 101 | 91 | 77 | 74 | 67 |
| %<br> change constant currency – yoy | 71 | 72 | 81 | 90 | 79 | 75 | 79 | 77 |
| Software<br> licenses | 317 | 426 | 406 | 907 | 2,056 | 276 | 316 | 335 |
| %<br> change – yoy | –34 | –34 | –38 | –38 | –37 | –13 | –26 | –17 |
| %<br> change constant currency – yoy | –36 | –38 | –42 | –39 | –39 | –13 | –24 | –14 |
| Software<br> support | 2,923 | 2,977 | 3,016 | 2,993 | 11,909 | 2,905 | 2,873 | 2,872 |
| %<br> change – yoy | 4 | 5 | 5 | 3 | 4 | –1 | –3 | –5 |
| %<br> change constant currency – yoy | 1 | 0 | –2 | –1 | 0 | –1 | –1 | –1 |
| Software<br> licenses and support | 3,240 | 3,403 | 3,422 | 3,900 | 13,965 | 3,180 | 3,189 | 3,208 |
| %<br> change – yoy | –1 | –2 | –3 | –11 | –5 | –2 | –6 | –6 |
| %<br> change constant currency – yoy | –4 | –7 | –9 | –14 | –9 | –2 | –4 | –2 |
| Cloud<br> and software | 5,806 | 6,199 | 6,408 | 6,978 | 25,391 | 6,358 | 6,505 | 6,679 |
| %<br> change – yoy | 10 | 11 | 12 | 3 | 9 | 10 | 5 | 4 |
| %<br> change constant currency – yoy | 6 | 4 | 3 | –1 | 3 | 8 | 8 | 9 |
| Total<br> revenue | 6,773 | 7,207 | 7,476 | 8,064 | 29,520 | 7,441 | 7,554 | 7,744 |
| %<br> change – yoy | 10 | 11 | 13 | 5 | 10 | 10 | 5 | 4 |
| %<br> change constant currency – yoy | 6 | 5 | 4 | 0 | 4 | 9 | 8 | 9 |
| Share<br> of more predictable revenue (in %) | 81 | 80 | 80 | 75 | 79 | 82 | 82 | 82 |
| Profits | ||||||||
| Operating<br> profit (loss) (IFRS) | 1,471 | 1,060 | 1,557 | 2,002 | 6,090 | 803 | 1,358 | 1,724 |
| Operating<br> profit (loss) (non-IFRS) | 1,676 | 1,678 | 2,075 | 2,560 | 7,989 | 1,875 | 2,058 | 2,278 |
| %<br> change | –3 | –12 | –1 | 3 | –3 | 12 | 23 | 10 |
| %<br> change constant currency | –6 | –15 | –8 | 1 | –7 | 12 | 28 | 16 |
| Profit<br> (loss) after tax (IFRS) | 1,016 | 613 | 839 | 600 | 3,068 | 403 | 724 | 1,272 |
| Profit<br> (loss) after tax (non-IFRS) | 1,171 | 1,098 | 1,240 | 1,008 | 4,517 | 1,254 | 1,249 | 1,687 |
| %<br> change | –29 | –50 | –42 | –56 | –45 | 7 | 14 | 36 |
| Margins | ||||||||
| Cloud<br> gross margin (IFRS, in %) | 68.2 | 70.2 | 69.8 | 69.2 | 69.4 | 70.5 | 71.1 | 72.7 |
| Cloud<br> gross margin (non-IFRS, in %) | 68.9 | 71.2 | 70.8 | 70.3 | 70.3 | 71.4 | 72.2 | 73.7 |
| Software<br> license and support gross margin (IFRS, in %) | 89.3 | 90.1 | 90.0 | 90.8 | 90.1 | 88.6 | 90.1 | 90.0 |
| Software<br> license and support gross margin (non-IFRS, in %) | 89.7 | 90.7 | 90.7 | 91.4 | 90.7 | 89.2 | 90.5 | 90.4 |
| Cloud<br> and software gross margin (IFRS, in %) | 80.0 | 81.1 | 80.6 | 81.3 | 80.8 | 79.5 | 80.3 | 81.0 |
| Cloud<br> and software gross margin (non-IFRS, in %) | 80.5 | 81.9 | 81.4 | 82.1 | 81.5 | 80.3 | 81.2 | 81.7 |
| Gross<br> margin (IFRS, in %) | 72.2 | 72.7 | 72.8 | 73.4 | 72.8 | 71.0 | 71.6 | 72.8 |
| Gross<br> margin (non-IFRS, in %) | 73.1 | 74.3 | 74.4 | 75.1 | 74.3 | 72.9 | 73.8 | 74.5 |
| Operating<br> margin (IFRS, in %) | 21.7 | 14.7 | 20.8 | 24.8 | 20.6 | 10.8 | 18.0 | 22.3 |
| Operating<br> margin (non-IFRS, in %) | 24.8 | 23.3 | 27.8 | 31.7 | 27.1 | 25.2 | 27.2 | 29.4 |
| ATS<br> segment – Segment gross margin (in %) | 72.5 | 73.7 | 73.3 | 74.5 | 73.5 | 72.3 | 73.3 | 74.3 |
| ATS<br> segment – Segment margin in % | 28.9 | 27.6 | 31.4 | 35.0 | 30.9 | 29.6 | 32.3 | 35.7 |
| Key<br> Profit Ratios | ||||||||
| Effective<br> tax rate (IFRS, in %) | 25.5 | 34.2 | 28.3 | 42.8 | 32.0 | 40.5 | 33.8 | 27.8 |
9/29
| €<br> millions, unless otherwise stated | Q1<br><br> <br>2022 | Q2<br><br> <br>2022 | Q3<br><br> <br>2022 | Q4<br><br> <br>2022 | TY<br><br> <br>2022 | Q1<br><br> <br>2023 | restated Q2<br><br> <br>2023^1^ | Q3<br><br> <br>2023 |
|---|---|---|---|---|---|---|---|---|
| Effective<br> tax rate (non-IFRS, in %) | 25.4 | 29.1 | 26.6 | 37.2 | 29.6 | 28.3 | 30.4 | 27.1 |
| Earnings<br> per share, basic (IFRS, in €) from continuing operations | 0.87 | 0.54 | 0.75 | 0.63 | 2.80 | 0.35 | 0.62 | 1.09 |
| Earnings<br> per share, basic (non-IFRS, in €) from continuing operations | 1.00 | 0.95 | 1.10 | 0.98 | 4.03 | 1.08 | 1.07 | 1.45 |
| Earnings<br> per share, basic (IFRS, in €)^1,2^ | 0.63 | 0.29 | 0.57 | 0.46 | 1.95 | 0.41 | 2.63 | 1.09 |
| Earnings<br> per share, basic (non-IFRS, in €)^1,2^ | 1.00 | 0.96 | 1.12 | 1.00 | 4.08 | 1.27 | 2.81 | 1.45 |
| Order<br> Entry and current cloud backlog | ||||||||
| Current<br> cloud backlog | 8,937 | 9,543 | 10,334 | 11,024 | 11,024 | 11,148 | 11,537 | 12,269 |
| %<br> change – yoy | 25 | 32 | 36 | 27 | 27 | 25 | 21 | 19 |
| %<br> change constant currency – yoy | 21 | 23 | 24 | 24 | 24 | 25 | 25 | 25 |
| SAP<br> S/4HANA Current cloud backlog | 1,925 | 2,258 | 2,662 | 3,171 | 3,171 | 3,418 | 3,717 | 4,199 |
| %<br> change – yoy | 86 | 100 | 108 | 86 | 86 | 78 | 65 | 58 |
| %<br> change constant currency – yoy | 79 | 87 | 90 | 82 | 82 | 79 | 70 | 66 |
| Share<br> of cloud orders greater than €5 million based on total cloud order entry volume (in %)^3^ | 43 | 49 | 42 | 55 | 50 | 45 | 46 | 49 |
| Share<br> of cloud orders smaller than €1 million based on total cloud order entry volume (in %)^3^ | 29 | 25 | 26 | 18 | 23 | 26 | 25 | 21 |
| Share<br> of on-premise orders greater than €5 million based on total software order entry volume (in %) | 40 | 33 | 28 | 29 | 31 | 26 | 22 | 21 |
| Share<br> of on-premise orders smaller than €1 million based on total software order entry volume (in %) | 33 | 40 | 49 | 37 | 40 | 50 | 50 | 44 |
| Liquidity<br> and Cash Flow | ||||||||
| Net<br> cash flows from operating activities | 2,465 | 301 | 887 | 2,022 | 5,675 | 2,311 | 848 | 1,124 |
| Capital<br> expenditure | –212 | –196 | –277 | –193 | –877 | –257 | –156 | –182 |
| Payments<br> of lease liabilities | –93 | –116 | –97 | –103 | –410 | –99 | –89 | –78 |
| Free<br> cash flow | 2,159 | –10 | 513 | 1,726 | 4,388 | 1,955 | 604 | 865 |
| %<br> of total revenue | 32 | 0 | 7 | 21 | 15 | 26 | 8 | 11 |
| %<br> of profit after tax (IFRS) | 213 | –2 | 61 | 288 | 143 | 485 | 83 | 68 |
| Group<br> liquidity | 11,267 | 8,236 | 8,554 | 9,694 | 9,694 | 9,700 | 14,326 | 12,122 |
| Financial<br> debt (–) | –12,171 | –12,282 | –12,282 | –11,764 | –11,764 | –10,751 | –10,146 | –8,445 |
| Net<br> debt (–) | –904 | –4,046 | –3,728 | –2,070 | –2,070 | –1,050 | 4,180 | 3,677 |
| Financial<br> Position | ||||||||
| Cash<br> and cash equivalents | 8,927 | 7,472 | 7,316 | 9,008 | 9,008 | 8,766 | 14,142 | 9,378 |
| Goodwill | 32,140 | 33,879 | 35,664 | 33,077 | 33,077 | 28,563 | 28,581 | 29,144 |
| Total<br> assets | 73,754 | 72,605 | 74,840 | 72,159 | 72,159 | 73,533 | 69,719 | 68,011 |
| Contract<br> liabilities (current) | 7,630 | 6,883 | 5,487 | 5,309 | 5,309 | 7,547 | 6,743 | 5,256 |
| Equity<br> ratio (total equity in % of total assets)^1^ | 58 | 59 | 62 | 59 | 59 | 58 | 60 | 64 |
| Non-Financials | ||||||||
| Number<br> of employees (quarter end)^4^ | 104,670 | 104,988 | 106,912 | 106,312 | 106,312 | 105,132 | 105,328 | 106,495 |
| Employee<br> retention (in %, rolling 12 months) | 92.5 | 92.0 | 92.2 | 92.8 | 92.8 | 93.8 | 95.1 | 96.0 |
| Women<br> in management (in %, quarter end) | 28.6 | 28.9 | 29.2 | 29.3 | 29.3 | 29.4 | 29.5 | 29.5 |
| Net<br> carbon emissions^5^(in kilotons) | 20 | 20 | 20 | 20 | 85 | 0 | 0 | 0 |
^1^ During the third quarter 2023, SAP identified a need for an error correction in the accounting related to the divestiture of Qualtrics as reported in Q2. The affected financial statement line items have been restated. The error correction is limited to SAP’s discontinued operations. SAP’s continuing operations net income as well as total operating, investing, or financing cash flows for the second quarter ended June 30, 2023, were not impacted. For details, please refer to section (N) Correction of Q2 2023 Qualtrics divestiture reporting in this quarterly statement.
^2^ From continuing and discontinued operations.
^3^ To conform to refined calculation logic, prior quarters have been adjusted.
^4^ In full-time equivalents.
^5^ In CO2 equivalents. SAP’s carbon emission numbers are rounded to the nearest 5 kt. Therefore, the rounded full-year totals may not precisely equal the sum of the rounded quarterly numbers.
10/29
PrimaryFinancial Statements of SAP Group (IFRS)
(A) Consolidated Income Statements
(A.1) Consolidated Income Statements – Quarter
| €<br> millions, unless otherwise stated | Q3<br> 2023 | Q3<br> 2022 | ∆<br> in % |
|---|---|---|---|
| Cloud | 3,472 | 2,986 | 16 |
| Software<br> licenses | 335 | 406 | –17 |
| Software<br> support | 2,872 | 3,016 | –5 |
| Software<br> licenses and support | 3,208 | 3,422 | –6 |
| Cloud<br> and software | 6,679 | 6,408 | 4 |
| Services | 1,065 | 1,069 | 0 |
| Total<br> revenue | 7,744 | 7,476 | 4 |
| Cost<br> of cloud | –946 | –902 | 5 |
| Cost<br> of software licenses and support | –321 | –341 | –6 |
| Cost<br> of cloud and software | –1,268 | –1,242 | 2 |
| Cost<br> of services | –840 | –795 | 6 |
| Total<br> cost of revenue | –2,108 | –2,037 | 3 |
| Gross<br> profit | 5,637 | 5,439 | 4 |
| Research<br> and development | –1,515 | –1,571 | –4 |
| Sales<br> and marketing | –2,105 | –1,997 | 5 |
| General<br> and administration | –327 | –333 | –2 |
| Restructuring | 36 | 8 | >100 |
| Other<br> operating income/expense, net | –2 | 10 | <-100 |
| Total<br> operating expenses | –6,020 | –5,919 | 2 |
| Operating<br> profit (loss) | 1,724 | 1,557 | 11 |
| Other<br> non-operating income/expense, net | 112 | –54 | <-100 |
| Finance<br> income | 204 | 163 | 25 |
| Finance<br> costs | –279 | –496 | –44 |
| Financial<br> income, net | –75 | –333 | –77 |
| Profit<br> (loss) before tax from continuing operations | 1,761 | 1,170 | 50 |
| Income<br> tax expense | –489 | –332 | 47 |
| Profit<br> (loss) after tax from continuing operations | 1,272 | 839 | 52 |
| Attributable<br> to owners of parent | 1,278 | 880 | 45 |
| Attributable<br> to non-controlling interests | –6 | –42 | –85 |
| Profit<br> (loss) after tax from discontinued operations | 0 | –292 | –100 |
| Profit<br> (loss) after tax^2^ | 1,272 | 547 | >100 |
| Attributable<br> to owners of parent^2^ | 1,278 | 669 | 91 |
| Attributable<br> to non-controlling interests^2^ | –6 | –123 | –95 |
| Earnings<br> per share, basic (in €)^1^ from continuing operations | 1.09 | 0.75 | 45 |
| Earnings<br> per share, basic (in €)^1, 2^ | 1.09 | 0.57 | 91 |
| Earnings<br> per share, diluted (in €)^1^ from continuing operations | 1.08 | 0.75 | 44 |
| Earnings<br> per share, diluted (in €)^1, 2^ | 1.08 | 0.57 | 90 |
^1^For the three months ended September 30, 2023 and 2022, the weighted average number of shares was 1,168 million (diluted 1,180 million) and 1,168 million (diluted: 1,173 million), respectively (treasury stock excluded).
^2^From continuing and discontinued operations
11/29
(A.2) Consolidated Income Statements – Year-to-Date
| €<br> millions, unless otherwise stated | Q1–Q3<br> 2023 | Q1–Q3<br> 2022 | ∆<br> in % |
|---|---|---|---|
| Cloud | 9,965 | 8,348 | 19 |
| Software<br> licenses | 927 | 1,149 | –19 |
| Software<br> support | 8,651 | 8,916 | –3 |
| Software<br> licenses and support | 9,577 | 10,065 | –5 |
| Cloud<br> and software | 19,542 | 18,413 | 6 |
| Services | 3,197 | 3,043 | 5 |
| Total<br> revenue | 22,739 | 21,456 | 6 |
| Cost<br> of cloud | –2,843 | –2,552 | 11 |
| Cost<br> of software licenses and support | –1,008 | –1,027 | –2 |
| Cost<br> of cloud and software | –3,852 | –3,578 | 8 |
| Cost<br> of services | –2,557 | –2,311 | 11 |
| Total<br> cost of revenue | –6,409 | –5,889 | 9 |
| Gross<br> profit | 16,330 | 15,567 | 5 |
| Research<br> and development | –4,653 | –4,481 | 4 |
| Sales<br> and marketing | –6,562 | –5,838 | 12 |
| General<br> and administration | –997 | –943 | 6 |
| Restructuring | –221 | –111 | 100 |
| Other<br> operating income/expense, net | –12 | –105 | –89 |
| Total<br> operating expenses | –18,854 | –17,368 | 9 |
| Operating<br> profit (loss) | 3,885 | 4,088 | –5 |
| Other<br> non-operating income/expense, net | 9 | –117 | <-100 |
| Finance<br> income | 573 | 683 | –16 |
| Finance<br> costs | –935 | –1,188 | –21 |
| Financial<br> income, net | –363 | –506 | –28 |
| Profit<br> (loss) before tax from continuing operations | 3,532 | 3,466 | 2 |
| Income<br> tax expense | –1,132 | –998 | 13 |
| Profit<br> (loss) after tax from continuing operations | 2,399 | 2,468 | –3 |
| Attributable<br> to owners of parent | 2,413 | 2,537 | –5 |
| Attributable<br> to non-controlling interests | –13 | –69 | –81 |
| Profit<br> (loss) after tax from discontinued operations | 2,272 | –1,086 | <-100 |
| Profit<br> (loss) after tax^2^ | 4,671 | 1,382 | >100 |
| Attributable<br> to owners of parent^2^ | 4,826 | 1,743 | >100 |
| Attributable<br> to non-controlling interests^2^ | –155 | –362 | –57 |
| Earnings<br> per share, basic (in €)^1^ from continuing operations | 2.07 | 2.17 | –5 |
| Earnings<br> per share, basic (in €)^1, 2^ | 4.13 | 1.49 | >100 |
| Earnings<br> per share, diluted (in €)^1^ from continuing operations | 2.05 | 2.16 | –5 |
| Earnings<br> per share, diluted (in €)^1, 2^ | 4.09 | 1.48 | >100 |
^1^ For the nine months ended September 30, 2023 and 2022, the weighted average number of shares was 1,168 million (diluted: 1,179 million) and 1,172 million (diluted: 1,175 million), respectively (treasury stock excluded).
^2^ From continuing and discontinued operations
12/29
(B) Consolidated Statements of Financial Position
| as<br> at 9/30/2023 and 12/31/2022 | ||
|---|---|---|
| €<br> millions | 2023 | 2022 |
| Cash<br> and cash equivalents | 9,378 | 9,008 |
| Other<br> financial assets | 3,050 | 853 |
| Trade<br> and other receivables | 5,355 | 6,236 |
| Other<br> non-financial assets | 2,375 | 2,139 |
| Tax<br> assets | 660 | 287 |
| Total<br> current assets | 20,817 | 18,522 |
| Goodwill | 29,144 | 33,077 |
| Intangible<br> assets | 2,190 | 3,835 |
| Property,<br> plant, and equipment | 4,402 | 4,934 |
| Other<br> financial assets | 5,631 | 5,626 |
| Trade<br> and other receivables | 117 | 169 |
| Other<br> non-financial assets | 3,421 | 3,580 |
| Tax<br> assets | 334 | 323 |
| Deferred<br> tax assets | 1,954 | 2,095 |
| Total<br> non-current assets | 47,194 | 53,638 |
| Total<br> assets | 68,011 | 72,159 |
| €<br> millions | 2023 | 2022 |
| Trade<br> and other payables | 1,618 | 2,147 |
| Tax<br> liabilities | 312 | 283 |
| Financial<br> liabilities | 1,640 | 4,808 |
| Other<br> non-financial liabilities | 4,289 | 4,818 |
| Provisions | 276 | 90 |
| Contract<br> liabilities | 5,256 | 5,309 |
| Total<br> current liabilities | 13,391 | 17,453 |
| Trade<br> and other payables | 50 | 79 |
| Tax<br> liabilities | 954 | 893 |
| Financial<br> liabilities | 9,228 | 9,547 |
| Other<br> non-financial liabilities | 624 | 705 |
| Provisions | 343 | 359 |
| Deferred<br> tax liabilities | 155 | 241 |
| Contract<br> liabilities | 24 | 33 |
| Total<br> non-current liabilities | 11,379 | 11,858 |
| Total<br> liabilities | 24,771 | 29,311 |
| Issued<br> capital | 1,229 | 1,229 |
| Share<br> premium | 1,675 | 3,081 |
| Retained<br> earnings | 41,102 | 36,418 |
| Other<br> components of equity | 3,775 | 3,801 |
| Treasury<br> shares | –4,821 | –4,341 |
| Equity<br> attributable to owners of parent | 42,959 | 40,186 |
| Non-controlling<br> interests | 281 | 2,662 |
| Total<br> equity | 43,241 | 42,848 |
| Total<br> equity and liabilities | 68,011 | 72,159 |
13/29
(C) Consolidated Statements of Cash Flows
| €<br> millions | Q1–Q3<br> 2023 | Q1–Q3<br> 2022^1^ |
|---|---|---|
| Profit<br> (loss) after tax | 4,671 | 1,382 |
| Adjustments<br> to reconcile profit (loss) after tax to net cash flows from operating activities: | ||
| (Profit)<br> loss after tax from discontinued operations | –2,272 | 1,086 |
| Depreciation<br> and amortization | 1,042 | 1,180 |
| Share-based<br> payment expense | 1,677 | 937 |
| Income<br> tax expense | 1,132 | 998 |
| Financial<br> income, net | 363 | 506 |
| Decrease/increase<br> in allowances on trade receivables | 12 | 72 |
| Other<br> adjustments for non-cash items | –35 | 2 |
| Decrease/increase<br> in trade and other receivables | 678 | 1,329 |
| Decrease/increase<br> in other assets | –555 | –704 |
| Increase/decrease<br> in trade payables, provisions, and other liabilities | –470 | –1,039 |
| Increase/decrease<br> in contract liabilities | 552 | 523 |
| Share-based<br> payments | –967 | –1,077 |
| Interest<br> paid | –305 | –169 |
| Interest<br> received | 331 | 84 |
| Income<br> taxes paid, net of refunds | –1,570 | –1,457 |
| Net<br> cash flows from operating activities – continuing operations | 4,284 | 3,653 |
| Net<br> cash flows from operating activities – discontinued operations | 80 | –51 |
| Net<br> cash flows from operating activities | 4,364 | 3,602 |
| Business<br> combinations, net of cash and cash equivalents acquired | 0 | –679 |
| Cash<br> flows from derivative financial instruments related to the sale of subsidiaries or businesses | –91 | 0 |
| Purchase<br> of intangible assets or property, plant, and equipment | –595 | –685 |
| Proceeds<br> from sales of intangible assets or property, plant, and equipment | 72 | 65 |
| Purchase<br> of equity or debt instruments of other entities | –2,969 | –2,772 |
| Proceeds<br> from sales of equity or debt instruments of other entities | 865 | 4,164 |
| Net<br> cash flows from investing activities – continuing operations | –2,718 | 94 |
| Net<br> cash flows from investing activities – discontinued operations | 5,625 | –20 |
| Net<br> cash flows from investing activities | 2,907 | 74 |
| Dividends<br> paid | –2,395 | –2,865 |
| Dividends<br> paid on non-controlling interests | –18 | –13 |
| Purchase<br> of treasury shares | –718 | –1,500 |
| Proceeds<br> from borrowings | 0 | 38 |
| Repayments<br> of borrowings | –3,442 | –1,016 |
| Payments<br> of lease liabilities | –266 | –307 |
| Transactions<br> with non-controlling interests | 42 | 0 |
| Net<br> cash flows from financing activities – continuing operations | –6,797 | –5,663 |
| Net<br> cash flows from financing activities – discontinued operations | 24 | –228 |
| Net<br> cash flows from financing activities | –6,773 | –5,891 |
| Effect<br> of foreign currency rates on cash and cash equivalents | –128 | 634 |
| Net<br> decrease/increase in cash and cash equivalents | 370 | –1,582 |
| Cash<br> and cash equivalents at the beginning of the period | 9,008 | 8,898 |
| Cash<br> and cash equivalents at the end of the period | 9,378 | 7,316 |
^1^ We do no longer show cash flows linked to the supply chain financing (SCF) transactions from Taulia in investing/financing cash flow separately and therefore adjusted the comparative figures accordingly.
Due to rounding, numbers may not add up precisely.
14/29
Non-IFRSNumbers
(D) Basis of Non-IFRS Presentation
SAP disclose certain financial measures such as 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 SAP’s constant currency and free cash flow figures, see Explanation of Non-IFRS Measures online.
(E) Reconciliation from Non-IFRS Numbers to IFRS Numbers
(E.1) Reconciliation of Non-IFRS Revenue – Quarter
| €<br> millions, unless otherwise stated | Q3 2023 | Q3<br> 2022 | ∆<br> in % | |||
|---|---|---|---|---|---|---|
| IFRS | Currency<br><br> <br>Impact | Non-IFRS<br><br> <br>Constant<br><br> <br>Currency | IFRS | IFRS | Non-IFRS<br><br> <br>Constant<br><br> <br>Currency | |
| Revenue<br> Numbers | ||||||
| Cloud | 3,472 | 194 | 3,666 | 2,986 | 16 | 23 |
| Software<br> licenses | 335 | 14 | 349 | 406 | –17 | –14 |
| Software<br> support | 2,872 | 126 | 2,998 | 3,016 | –5 | –1 |
| Software<br> licenses and support | 3,208 | 140 | 3,348 | 3,422 | –6 | –2 |
| Cloud<br> and software | 6,679 | 335 | 7,014 | 6,408 | 4 | 9 |
| Services | 1,065 | 51 | 1,116 | 1,069 | 0 | 4 |
| Total<br> revenue | 7,744 | 385 | 8,130 | 7,476 | 4 | 9 |
(E.2) Reconciliation of Non-IFRS Operating Expenses – Quarter
| €<br> millions, unless otherwise stated | Q3 2023 | Q3<br> 2022 | ∆<br> in % | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| IFRS | Adj. | Non-IFRS | Currency<br><br> <br>Impact | Non-IFRS<br><br> <br>Constant<br><br> <br>Currency | IFRS | Adj. | Non-IFRS | IFRS | Non-IFRS | Non-IFRS<br><br> <br>Constant<br><br> <br>Currency | |
| Operating<br> Expense Numbers | |||||||||||
| Cost<br> of cloud | –946 | 33 | –914 | –902 | 29 | –873 | 5 | 5 | |||
| Cost<br> of software licenses and support | –321 | 13 | –309 | –341 | 22 | –319 | –6 | –3 | |||
| Cost<br> of cloud and software | –1,268 | 45 | –1,223 | –1,242 | 51 | –1,191 | 2 | 3 | |||
| Cost<br> of services | –840 | 89 | –751 | –795 | 72 | –722 | 6 | 4 | |||
| Total<br> cost of revenue | –2,108 | 134 | –1,974 | –2,037 | 123 | –1,914 | 3 | 3 | |||
| Gross<br> profit | 5,637 | 134 | 5,770 | 5,439 | 123 | 5,563 | 4 | 4 | |||
| Research<br> and development | –1,515 | 165 | –1,350 | –1,571 | 134 | –1,437 | –4 | –6 | |||
| Sales<br> and marketing | –2,105 | 255 | –1,850 | –1,997 | 222 | –1,774 | 5 | 4 | |||
| General<br> and administration | –327 | 37 | –291 | –333 | 46 | –287 | –2 | 1 | |||
| Restructuring | 36 | –36 | 0 | 8 | –8 | 0 | >100 | NA | |||
| Other<br> operating income/expense, net | –2 | 0 | –2 | 10 | 0 | 10 | <-100 | <-100 | |||
| Total<br> operating expenses | –6,020 | 554 | –5,466 | –254 | –5,720 | –5,919 | 518 | –5,401 | 2 | 1 | 6 |
15/29
(E.3) Reconciliation of Non-IFRS Profit Figures, Income Tax, and Key Ratios – Quarter
| €<br> millions, unless otherwise stated | Q3 2023 | Q3<br> 2022 | ∆<br> in % | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| IFRS | Adj. | Non-IFRS | Currency<br><br> <br>Impact | Non-IFRS<br><br> <br>Constant<br><br> <br>Currency | IFRS | Adj. | Non-IFRS | IFRS | Non-IFRS | Non-IFRS<br><br> <br>Constant<br><br> <br>Currency | |
| Profit<br> Numbers | |||||||||||
| Operating<br> profit (loss) | 1,724 | 554 | 2,278 | 131 | 2,409 | 1,557 | 518 | 2,075 | 11 | 10 | 16 |
| Profit<br> (loss) before tax from continuing operations | 1,761 | 554 | 2,315 | 1,170 | 518 | 1,688 | 50 | 37 | |||
| Income<br> tax expense | –489 | –139 | –628 | –332 | –117 | –448 | 47 | 40 | |||
| Profit<br> (loss) after tax from continuing operations | 1,272 | 415 | 1,687 | 839 | 401 | 1,240 | 52 | 36 | |||
| Attributable<br> to owners of parent | 1,278 | 414 | 1,692 | 880 | 398 | 1,279 | 45 | 32 | |||
| Attributable<br> to non-controlling interests | –6 | 1 | –5 | –42 | 2 | –39 | –85 | –87 | |||
| Profit<br> (loss) after tax^1^ | 1,272 | 415 | 1,687 | 547 | 716 | 1,263 | >100 | 34 | |||
| Attributable<br> to owners of parent^1^ | 1,278 | 414 | 1,692 | 669 | 634 | 1,303 | 91 | 30 | |||
| Attributable<br> to non-controlling interests^1^ | –6 | 1 | –5 | –123 | 82 | –41 | –95 | –87 | |||
| Key<br> Ratios | |||||||||||
| Operating<br> margin (in %) | 22.3 | 29.4 | 29.6 | 20.8 | 27.8 | 1.4pp | 1.7pp | 1.9pp | |||
| Effective<br> tax rate (in %)^2^ | 27.8 | 27.1 | 28.3 | 26.6 | –0.6pp | 0.6pp | |||||
| Earnings<br> per share, basic (in €) from continuing operations | 1.09 | 1.45 | 0.75 | 1.10 | 45 | 32 | |||||
| Earnings<br> per share, basic (in €)^1^ | 1.09 | 1.45 | 0.57 | 1.12 | 91 | 30 |
^1^From continuing and discontinued operations
^2^The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q3 2023 and Q3 2022 mainly resulted from tax effects of share-based payment expenses, restructuring expenses and acquisition-related charges.
(E.4) Reconciliation of Non-IFRS Revenue – Year-to-Date
| €<br> millions, unless otherwise stated | Q1–Q3 2023 | Q1–Q3<br> 2022 | ∆<br> in % | |||
|---|---|---|---|---|---|---|
| IFRS | Currency<br><br> <br>Impact | Non-IFRS<br><br> <br>Constant<br><br> <br>Currency | IFRS | IFRS | Non-IFRS<br><br> <br>Constant<br><br> <br>Currency | |
| Revenue<br> Numbers | ||||||
| Cloud | 9,965 | 233 | 10,198 | 8,348 | 19 | 22 |
| Software<br> licenses | 927 | 24 | 950 | 1,149 | –19 | –17 |
| Software<br> support | 8,651 | 180 | 8,830 | 8,916 | –3 | –1 |
| Software<br> licenses and support | 9,577 | 204 | 9,781 | 10,065 | –5 | –3 |
| Cloud<br> and software | 19,542 | 437 | 19,979 | 18,413 | 6 | 9 |
| Services | 3,197 | 65 | 3,263 | 3,043 | 5 | 7 |
| Total<br> revenue | 22,739 | 503 | 23,242 | 21,456 | 6 | 8 |
16/29
(E.5) Reconciliation of Non-IFRS Operating Expenses – Year-to-Date
| €<br> millions, unless otherwise stated | Q1–Q3 2023 | Q1–Q3<br> 2022 | ∆<br> in % | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| IFRS | Adj. | Non-IFRS | Currency<br><br> <br>Impact | Non-IFRS<br><br> <br>Constant<br><br> <br>Currency | IFRS | Adj. | Non-IFRS | IFRS | Non-IFRS | Non-IFRS<br><br> <br>Constant<br><br> <br>Currency | |
| Operating<br> Expense Numbers | |||||||||||
| Cost<br> of cloud | –2,843 | 101 | –2,743 | –2,552 | 75 | –2,477 | 11 | 11 | |||
| Cost<br> of software licenses and support | –1,008 | 55 | –954 | –1,027 | 58 | –969 | –2 | –2 | |||
| Cost<br> of cloud and software | –3,852 | 155 | –3,696 | –3,578 | 133 | –3,445 | 8 | 7 | |||
| Cost<br> of services | –2,557 | 287 | –2,270 | –2,311 | 169 | –2,142 | 11 | 6 | |||
| Total<br> cost of revenue | –6,409 | 443 | –5,966 | –5,889 | 302 | –5,587 | 9 | 7 | |||
| Gross<br> profit | 16,330 | 443 | 16,773 | 15,567 | 302 | 15,869 | 5 | 6 | |||
| Research<br> and development | –4,653 | 539 | –4,113 | –4,481 | 301 | –4,180 | 4 | –2 | |||
| Sales<br> and marketing | –6,562 | 989 | –5,573 | –5,838 | 532 | –5,306 | 12 | 5 | |||
| General<br> and administration | –997 | 134 | –864 | –943 | 95 | –848 | 6 | 2 | |||
| Restructuring | –221 | 221 | 0 | –111 | 111 | 0 | 100 | NA | |||
| Other<br> operating income/expense, net | –12 | 0 | –12 | –105 | 0 | –105 | –89 | –89 | |||
| Total<br> operating expenses | –18,854 | 2,326 | –16,528 | –274 | –16,803 | –17,368 | 1,341 | –16,027 | 9 | 3 | 5 |
(E.6) Reconciliation of Non-IFRS Profit Figures, Income Tax, and Key Ratios – Year-to-Date
| €<br> millions, unless otherwise stated | Q1–Q3 2023 | Q1–Q3<br> 2022 | ∆<br> in % | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| IFRS | Adj. | Non-IFRS | Currency<br><br> <br>Impact | Non-IFRS<br><br> <br>Constant<br><br> <br>Currency | IFRS | Adj. | Non-IFRS | IFRS | Non-IFRS | Non-IFRS<br><br> <br>Constant<br><br> <br>Currency | |
| Profit<br> Numbers | |||||||||||
| Operating<br> profit (loss) | 3,885 | 2,326 | 6,211 | 228 | 6,439 | 4,088 | 1,341 | 5,429 | –5 | 14 | 19 |
| Profit<br> (loss) before tax from continuing operations | 3,532 | 2,326 | 5,857 | 3,466 | 1,341 | 4,807 | 2 | 22 | |||
| Income<br> tax expense | –1,132 | –536 | –1,668 | –998 | –300 | –1,298 | 13 | 28 | |||
| Profit<br> (loss) after tax from continuing operations | 2,399 | 1,790 | 4,189 | 2,468 | 1,041 | 3,508 | –3 | 19 | |||
| Attributable<br> to owners of parent | 2,413 | 1,787 | 4,200 | 2,537 | 1,037 | 3,574 | –5 | 18 | |||
| Attributable<br> to non-controlling interests | –13 | 3 | –11 | –69 | 4 | –65 | –81 | –84 | |||
| Profit<br> (loss) after tax^1^ | 4,671 | 1,571 | 6,243 | 1,382 | 2,140 | 3,522 | >100 | 77 | |||
| Attributable<br> to owners of parent^1^ | 4,826 | 1,634 | 6,460 | 1,743 | 1,866 | 3,609 | >100 | 79 | |||
| Attributable<br> to non-controlling interests^1^ | –155 | –63 | –217 | –362 | 274 | –88 | –57 | >100 | |||
| Key<br> Ratios | |||||||||||
| Operating<br> margin (in %) | 17.1 | 27.3 | 27.7 | 19.1 | 25.3 | –2.0pp | 2.0pp | 2.4pp | |||
| Effective<br> tax rate (in %)^2^ | 32.1 | 28.5 | 28.8 | 27.0 | 3.3pp | 1.5pp | |||||
| Earnings<br> per share, basic (in €) from continuing operations | 2.07 | 3.60 | 2.17 | 3.05 | –5 | 18 | |||||
| Earnings<br> per share, basic (in €)^1^ | 4.13 | 5.53 | 1.49 | 3.08 | >100 | 80 |
^1^ From continuing and discontinued operations
^2^The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in the first nine months of 2023 and 2022 mainly resulted from tax effects of share-based payment expenses, restructuring expenses and acquisition-related charges.
17/29
(F) Non-IFRS Adjustments – Actuals and Estimates
| €<br> millions | Estimated<br> Amounts <br><br>for<br><br> <br>Full<br> Year 2023 | Q1–Q3<br><br> <br>2023 | Q3<br> 2023 | Q1–Q3<br><br> <br>2022 | Q3<br> 2022 |
|---|---|---|---|---|---|
| Operating<br> profit (loss) (IFRS) | 3,885 | 1,724 | 4,088 | 1,557 | |
| Adjustment<br> for acquisition-related charges | 300–380 | 257 | 80 | 293 | 102 |
| Adjustment<br> for share-based payment expenses | 2,000–2,250 | 1,677 | 510 | 937 | 424 |
| Adjustment<br> for restructuring | 200–240 | 221 | –36 | 111 | –8 |
| Adjustment<br> for regulatory compliance matter expenses | 170 | 170 | - | - | - |
| Operating<br> expense adjustments | 2,326 | 554 | 1,341 | 518 | |
| Operating<br> profit (loss) (non-IFRS) | 6,211 | 2,278 | 5,429 | 2,075 |
(G) Non-IFRS Adjustments by Functional Areas
| €<br> millions | Q3 2023 | Q3<br> 2022 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| IFRS | Acquisition-<br><br>Related | SBP^1^ | Restruc-<br><br>turing | RCM^2^ | Non-<br><br>IFRS | IFRS | Acquisition-<br><br> <br>Related | SBP^1^ | Restruc-<br><br>turing | RCM^2^ | Non-<br><br>IFRS | |
| Cost<br> of cloud | –946 | 10 | 23 | 0 | 0 | –914 | –902 | 14 | 16 | 0 | - | –873 |
| Cost<br> of software licenses and support | –321 | 4 | 9 | 0 | 0 | –309 | –341 | 8 | 13 | 0 | - | –319 |
| Cost<br> of services | –840 | 0 | 88 | 0 | 0 | –751 | –795 | 0 | 72 | 0 | - | –722 |
| Research<br> and development | –1,515 | 2 | 163 | 0 | 0 | –1,350 | –1,571 | 3 | 131 | 0 | - | –1,437 |
| Sales<br> and marketing | –2,105 | 64 | 191 | 0 | 0 | –1,850 | –1,997 | 75 | 148 | 0 | - | –1,774 |
| General<br> and administration | –327 | 0 | 36 | 0 | 0 | –291 | –333 | 2 | 44 | 0 | - | –287 |
| Restructuring | 36 | 0 | 0 | –36 | 0 | 0 | 8 | 0 | 0 | –8 | - | 0 |
| Other<br> operating income/expense, net | –2 | 0 | 0 | 0 | 0 | –2 | 10 | 0 | 0 | 0 | - | 10 |
| Total<br> operating expenses | –6,020 | 80 | 510 | –36 | 0 | –5,466 | –5,919 | 102 | 424 | –8 | - | –5,401 |
^1^ Share-based Payments
^2^Regulatory Compliance Matters
| €<br> millions | Q1–Q3 2023 | Q1–Q3<br> 2022 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| IFRS | Acquisition-<br><br> <br>Related | SBP^1^ | Restruc-<br><br>turing | RCM^2^ | Non-<br><br>IFRS | IFRS | Acquisition-<br><br> <br>Related | SBP^1^ | Restruc-<br><br>turing | RCM^2^ | Non-<br><br>IFRS | |
| Cost<br> of cloud | –2,843 | 31 | 70 | 0 | 0 | –2,743 | –2,552 | 40 | 35 | 0 | - | –2,477 |
| Cost<br> of software licenses and support | –1,008 | 26 | 29 | 0 | 0 | –954 | –1,027 | 24 | 34 | 0 | - | –969 |
| Cost<br> of services | –2,557 | 1 | 287 | 0 | 0 | –2,270 | –2,311 | 1 | 169 | 0 | - | –2,142 |
| Research<br> and development | –4,653 | 6 | 534 | 0 | 0 | –4,113 | –4,481 | 8 | 294 | 0 | - | –4,180 |
| Sales<br> and marketing | –6,562 | 193 | 626 | 0 | 170 | –5,573 | –5,838 | 213 | 319 | 0 | - | –5,306 |
| General<br> and administration | –997 | 1 | 132 | 0 | 0 | –864 | –943 | 8 | 88 | 0 | - | –848 |
| Restructuring | –221 | 0 | 0 | 221 | 0 | 0 | –111 | 0 | 0 | 111 | - | 0 |
| Other<br> operating income/expense, net | –12 | 0 | 0 | 0 | 0 | –12 | –105 | 0 | 0 | 0 | - | –105 |
| Total<br> operating expenses | –18,854 | 257 | 1,677 | 221 | 170 | –16,528 | –17,368 | 293 | 937 | 111 | - | –16,027 |
^1^ Share-based Payments
^2^Regulatory Compliance Matters
18/29
If not presented in a separate line item in our income statement, the restructuring expenses would break down as follows:
| €<br> millions | Q3<br> 2023 | Q1–Q3<br> 2023 | Q3<br> 2022 | Q1–Q3<br> 2022 |
|---|---|---|---|---|
| Cost<br> of cloud | 9 | 2 | 7 | 20 |
| Cost<br> of software licenses and support | 2 | –9 | 0 | –4 |
| Cost<br> of services | 8 | –26 | 0 | –61 |
| Research<br> and development | –4 | –44 | 1 | –6 |
| Sales<br> and marketing | 22 | –128 | 0 | –57 |
| General<br> and administration | –1 | –16 | 0 | –3 |
| Restructuring<br> expenses | 36 | –221 | 8 | –111 |
19/29
Disaggregations
(H) SegmentReporting
(H.1) Segment Policies and Segment Changes
SAP has one reportable segment: the Applications, Technology & Services segment.
At the end of the second quarter 2023, we sold Qualtrics, formerly a reportable segment which derived its revenues mainly from the sale of experience management cloud solutions. For more information related to the sale of Qualtrics, see Note (M) in this quarterly statement.
For a more detailed description of SAP’s segment reporting, see Note (C.1) “Results of Segments” of our Consolidated Half-Year Financial Statements 2023.
(H.2) Segment Reporting – Quarter
Applications, Technology & Services^1^
| €<br>millions, unless otherwise stated<br><br> <br>(non-IFRS) | Q3 2023 | Q3<br> 2022 | ∆<br> in % | ∆<br> in % | |
|---|---|---|---|---|---|
| Actual<br><br> <br>Currency | Constant<br><br> <br>Currency | Actual<br><br> <br>Currency | Actual<br><br> <br>Currency | Constant<br><br> <br>Currency | |
| Cloud<br> – SaaS^2^ | 2,448 | 2,588 | 2,094 | 17 | 24 |
| Cloud<br> – PaaS^3^ | 558 | 586 | 401 | 39 | 46 |
| Cloud<br> – IaaS^4^ | 186 | 196 | 233 | –20 | –16 |
| Cloud | 3,192 | 3,370 | 2,728 | 17 | 24 |
| Software<br> licenses | 335 | 349 | 406 | –17 | –14 |
| Software<br> support | 2,872 | 2,998 | 3,016 | –5 | –1 |
| Software<br> licenses and support | 3,207 | 3,348 | 3,422 | –6 | –2 |
| Cloud<br> and software | 6,400 | 6,718 | 6,150 | 4 | 9 |
| Services | 1,060 | 1,110 | 1,061 | 0 | 5 |
| Total<br> segment revenue | 7,460 | 7,828 | 7,211 | 3 | 9 |
| Cost<br> of cloud | –900 | –950 | –863 | 4 | 10 |
| Cost<br> of software licenses and support | –299 | –312 | –336 | –11 | –7 |
| Cost<br> of cloud and software | –1,199 | –1,262 | –1,199 | 0 | 5 |
| Cost<br> of services | –715 | –743 | –724 | –1 | 3 |
| Total<br> cost of revenue | –1,914 | –2,005 | –1,923 | 0 | 4 |
| Cloud<br> gross profit – SaaS^2^ | 1,750 | 1,857 | 1,477 | 18 | 26 |
| Cloud<br> gross profit – PaaS^3^ | 473 | 497 | 320 | 48 | 55 |
| Cloud<br> gross profit – IaaS^4^ | 70 | 67 | 69 | 1 | –3 |
| Cloud<br> gross profit | 2,292 | 2,420 | 1,866 | 23 | 30 |
| Segment<br> gross profit | 5,546 | 5,824 | 5,289 | 5 | 10 |
| Other<br> segment expenses | –2,880 | –3,019 | –3,022 | –5 | 0 |
| Segment<br> profit (loss) | 2,666 | 2,804 | 2,267 | 18 | 24 |
| SAP<br> S/4 HANA | |||||
| SAP<br> S/4HANA Cloud revenue | 914 | 967 | 546 | 67 | 77 |
| SAP<br> S/4HANA Current cloud backlog | 4,199 | 4,423 | 2,662 | 58 | 66 |
| Margins | |||||
| Segment<br> gross margin (in %) | 74.3 | 74.4 | 73.3 | 1.0pp | 1.1pp |
| Segment<br> margin (in %) | 35.7 | 35.8 | 31.4 | 4.3pp | 4.4pp |
^1^Segment information for comparative prior periods were restated to conform with the new segment composition.
^2^Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS.
^3^Platform as a service: PaaS primarily includes SAP Business Technology Platform and SAP Signavio.
^4^Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud.
^5^Mainly derived from Applications, Technology & Services segment.
20/29
Reconciliationof Cloud Revenues – Quarter
| €<br> millions, unless otherwise stated<br><br> <br>(Non-IFRS) | Q3 2023 | Q3<br> 2022 | ∆<br> in % | |||
|---|---|---|---|---|---|---|
| Actual<br><br>Currency | Currency<br><br>Impact | Constant<br><br>Currency | Actual<br><br>Currency | Actual<br><br>Currency | Constant<br><br>Currency | |
| Cloud<br> revenue – SaaS^1^ | 2,727 | 157 | 2,884 | 2,351 | 16 | 23 |
| Cloud<br> revenue – PaaS^2^ | 558 | 28 | 586 | 401 | 39 | 46 |
| Cloud<br> revenue – IaaS^3^ | 186 | 10 | 196 | 233 | –20 | –16 |
| Cloud<br> revenue | 3,472 | 194 | 3,666 | 2,986 | 16 | 23 |
| Cloud<br> gross profit – SaaS^1^ | 2,016 | 121 | 2,136 | 1,724 | 17 | 24 |
| Cloud<br> gross profit – PaaS^2^ | 473 | 24 | 497 | 320 | 48 | 55 |
| Cloud<br> gross profit – IaaS^3^ | 70 | –3 | 67 | 69 | 1 | –3 |
| Cloud<br> gross profit | 2,558 | 142 | 2,700 | 2,113 | 21 | 28 |
^1^Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS.
^2^Platform as a service PaaS primarily includes SAP Business Technology Platform and SAP Signavio.
^3^Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud
21/29
| (H.3) | Segment<br>Reporting – Year-to-Date |
|---|
Applications, Technology & Services^1^
| €<br> millions, unless otherwise stated<br><br> <br>(non-IFRS) | Q1–Q3 2023 | Q1–Q3<br> 2022 | ∆<br> in % | ∆<br> in % | |
|---|---|---|---|---|---|
| Actual<br><br> <br><br><br> <br>Currency | Constant<br><br> <br>Currency | Actual<br><br> <br>Currency | Actual<br><br> <br><br><br> <br>Currency | Constant<br><br> <br><br><br> <br>Currency | |
| Cloud<br> – SaaS^2^ | 6,994 | 7,163 | 5,810 | 20 | 23 |
| Cloud<br> – PaaS^3^ | 1,561 | 1,595 | 1,096 | 43 | 46 |
| Cloud<br> – IaaS^4^ | 577 | 589 | 708 | –18 | –17 |
| Cloud | 9,132 | 9,348 | 7,614 | 20 | 23 |
| Software<br> licenses | 926 | 950 | 1,149 | –19 | –17 |
| Software<br> support | 8,650 | 8,829 | 8,916 | –3 | –1 |
| Software<br> licenses and support | 9,576 | 9,780 | 10,065 | –5 | –3 |
| Cloud<br> and software | 18,708 | 19,128 | 17,679 | 6 | 8 |
| Services | 3,180 | 3,245 | 3,025 | 5 | 7 |
| Total<br> segment revenue | 21,888 | 22,373 | 20,704 | 6 | 8 |
| Cost<br> of cloud | –2,707 | –2,751 | –2,451 | 10 | 12 |
| Cost<br> of software licenses and support | –922 | –936 | –996 | –7 | –6 |
| Cost<br> of cloud and software | –3,629 | –3,687 | –3,448 | 5 | 7 |
| Cost<br> of services | –2,207 | –2,247 | –2,104 | 5 | 7 |
| Total<br> cost of revenue | –5,836 | –5,934 | –5,552 | 5 | 7 |
| Cloud<br> gross profit – SaaS^2^ | 4,891 | 5,030 | 4,034 | 21 | 25 |
| Cloud<br> gross profit – PaaS^3^ | 1,316 | 1,347 | 882 | 49 | 53 |
| Cloud<br> gross profit – IaaS^4^ | 219 | 219 | 247 | –11 | –11 |
| Cloud<br> gross profit | 6,426 | 6,596 | 5,162 | 24 | 28 |
| Segment<br> gross profit | 16,053 | 16,439 | 15,152 | 6 | 8 |
| Other<br> segment expenses | –8,923 | –9,093 | –9,076 | –2 | 0 |
| Segment<br> profit (loss) | 7,130 | 7,346 | 6,076 | 17 | 21 |
| SAP<br> S/4 HANA | |||||
| SAP<br> S/4HANA Cloud revenue | 2,453 | 2,519 | 1,422 | 72 | 77 |
| SAP<br> S/4HANA Current cloud backlog | 4,199 | 4,423 | 2,662 | 58 | 66 |
| Margins | |||||
| Segment<br> gross margin (in %) | 73.3 | 73.5 | 73.2 | 0.2pp | 0.3pp |
| Segment<br> margin (in %) | 32.6 | 32.8 | 29.3 | 3.2pp | 3.5pp |
^1^Segment information for comparative prior periods were restated to conform with the new segment composition.
^2^Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS.
^3^Platform as a service: PaaS primarily includes SAP Business Technology Platform and SAP Signavio.
^4^Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud.
^5^Mainly derived from Applications, Technology & Services segment.
22/29
Reconciliationof Cloud Revenues and Gross Profit – Year-to-Date
| €<br> millions, unless otherwise stated<br><br> <br><br><br> <br>(non-IFRS) | Q1–Q3 2023 | Q1-Q3<br> 2022 | ∆<br> in % | |||
|---|---|---|---|---|---|---|
| Actual<br><br><br> Currency | Currency<br><br><br> Impact | Constant<br><br><br> Currency | Actual<br><br><br> Currency | Actual<br><br>Currency | Constant<br><br><br> Currency | |
| Cloud<br> revenue – SaaS^1^ | 7,827 | 187 | 8,014 | 6,544 | 20 | 22 |
| Cloud<br> revenue – PaaS^2^ | 1,561 | 34 | 1,595 | 1,096 | 43 | 46 |
| Cloud<br> revenue – IaaS^3^ | 577 | 13 | 589 | 708 | –18 | –17 |
| Cloud<br> revenue | 9,965 | 233 | 10,198 | 8,348 | 19 | 22 |
| Cloud<br> gross profit – SaaS^1^ | 5,688 | 155 | 5,842 | 4,742 | 20 | 23 |
| Cloud<br> gross profit – PaaS^2^ | 1,316 | 31 | 1,347 | 882 | 49 | 53 |
| Cloud<br> gross profit – IaaS^3^ | 219 | 1 | 219 | 247 | –11 | –11 |
| Cloud<br> gross profit | 7,222 | 186 | 7,408 | 5,871 | 23 | 26 |
^1^Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS.
^2^Platform as a service: PaaS primarily includes SAP Business Technology Platform and SAP Signavio.
^3^Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud.
23/29
| (I) | Revenue by Region (IFRS and Non-IFRS) | |||||
|---|---|---|---|---|---|---|
| (I.1) | Revenue<br> by Region (IFRS and Non-IFRS) – Quarter | |||||
| --- | --- | |||||
| €<br> millions | Q3 2023 | Q3<br> 2022 | ∆<br> in % | |||
| --- | --- | --- | --- | --- | --- | --- |
| Actual<br><br><br> currency | Currency<br><br> <br><br><br> <br>Impact | Constant<br><br> <br><br><br> <br>Currency | Actual<br><br><br> currency | Actual<br><br><br> currency | Constant<br><br> <br>Currency | |
| Cloud<br> Revenue by Region | ||||||
| EMEA | 1,352 | 21 | 1,373 | 1,043 | 30 | 32 |
| Americas | 1,678 | 125 | 1,803 | 1,556 | 8 | 16 |
| APJ | 442 | 48 | 490 | 386 | 14 | 27 |
| Cloud<br> revenue | 3,472 | 194 | 3,666 | 2,986 | 16 | 23 |
| Cloud<br> and Software Revenue by Region | ||||||
| EMEA | 3,010 | 22 | 3,031 | 2,690 | 12 | 13 |
| Americas | 2,696 | 205 | 2,902 | 2,727 | –1 | 6 |
| APJ | 973 | 107 | 1,081 | 990 | –2 | 9 |
| Cloud<br> and software revenue | 6,679 | 335 | 7,014 | 6,408 | 4 | 9 |
| Total<br> Revenue by Region | ||||||
| Germany | 1,212 | 1 | 1,213 | 1,076 | 13 | 13 |
| Rest<br> of EMEA | 2,280 | 23 | 2,303 | 2,055 | 11 | 12 |
| Total<br> EMEA | 3,492 | 24 | 3,516 | 3,131 | 12 | 12 |
| United<br> States | 2,506 | 195 | 2,701 | 2,588 | –3 | 4 |
| Rest<br> of Americas | 651 | 44 | 696 | 629 | 4 | 11 |
| Total<br> Americas | 3,157 | 240 | 3,397 | 3,217 | –2 | 6 |
| Japan | 297 | 38 | 335 | 308 | –4 | 9 |
| Rest<br> of APJ | 798 | 83 | 882 | 820 | –3 | 8 |
| Total<br> APJ | 1,095 | 121 | 1,216 | 1,128 | –3 | 8 |
| Total<br> revenue | 7,744 | 385 | 8,130 | 7,476 | 4 | 9 |
24/29
| (I.2) | Revenue<br> by Region (IFRS and Non-IFRS) – Year-to-Date | |||||||
|---|---|---|---|---|---|---|---|---|
| €<br> millions | Q1–Q3 2023 | Q1–Q3<br> 2022 | ∆<br> in % | |||||
| --- | --- | --- | --- | --- | --- | --- | ||
| Actual<br> Currency | Currency<br><br> <br><br><br> <br>Impact | Constant<br><br> <br><br><br> <br>Currency | Actual<br> Currency | Actual<br> Currency | Constant<br><br> <br><br><br> <br>Currency | |||
| Cloud<br> Revenue by Region | ||||||||
| EMEA | 3,810 | 37 | 3,846 | 3,009 | 27 | 28 | ||
| Americas | 4,873 | 107 | 4,979 | 4,251 | 15 | 17 | ||
| APJ | 1,282 | 90 | 1,373 | 1,087 | 18 | 26 | ||
| Cloud<br> revenue | 9,965 | 233 | 10,198 | 8,348 | 19 | 22 | ||
| Cloud<br> and Software Revenue by Region | ||||||||
| EMEA | 8,670 | 61 | 8,731 | 7,975 | 9 | 9 | ||
| Americas | 7,979 | 172 | 8,151 | 7,594 | 5 | 7 | ||
| APJ | 2,892 | 205 | 3,097 | 2,844 | 2 | 9 | ||
| Cloud<br> and software revenue | 19,542 | 437 | 19,979 | 18,413 | 6 | 9 | ||
| Total<br> Revenue by Region | ||||||||
| Germany | 3,495 | 1 | 3,496 | 3,190 | 10 | 10 | ||
| Rest<br> of EMEA | 6,619 | 68 | 6,687 | 6,104 | 8 | 10 | ||
| Total<br> EMEA | 10,113 | 69 | 10,182 | 9,294 | 9 | 10 | ||
| United<br> States | 7,480 | 148 | 7,628 | 7,154 | 5 | 7 | ||
| Rest<br> of Americas | 1,884 | 53 | 1,938 | 1,765 | 7 | 10 | ||
| Total<br> Americas | 9,364 | 202 | 9,566 | 8,919 | 5 | 7 | ||
| Japan | 913 | 90 | 1,003 | 910 | 0 | 10 | ||
| Rest<br> of APJ | 2,348 | 142 | 2,491 | 2,333 | 1 | 7 | ||
| Total<br> APJ | 3,261 | 232 | 3,493 | 3,243 | 1 | 8 | ||
| Total<br> revenue | 22,739 | 503 | 23,242 | 21,456 | 6 | 8 | ||
| (J) | Employees by Region and Functional Areas | |||||||
| --- | --- | |||||||
| Full-time<br> equivalents | 9/30/2023 | 9/30/2022 | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| EMEA | Americas | APJ | Total | EMEA | Americas | APJ | Total | |
| Cloud<br> and software^1^ | 4,150 | 4,193 | 4,181 | 12,523 | 4,308 | 4,030 | 4,553 | 12,891 |
| Services | 8,124 | 5,044 | 5,502 | 18,669 | 8,180 | 5,074 | 5,889 | 19,143 |
| Research<br> and development^1^ | 17,952 | 5,907 | 12,698 | 36,557 | 17,574 | 5,871 | 11,900 | 35,345 |
| Sales<br> and marketing | 11,796 | 10,166 | 5,311 | 27,272 | 11,661 | 10,775 | 5,500 | 27,935 |
| General<br> and administration | 3,518 | 1,772 | 1,305 | 6,595 | 3,408 | 1,860 | 1,247 | 6,514 |
| Infrastructure | 2,786 | 1,244 | 849 | 4,878 | 2,806 | 1,376 | 902 | 5,085 |
| SAP<br> Group (9/30) | 48,325 | 28,324 | 29,846 | 106,495 | 47,936 | 28,985 | 29,991 | 106,912 |
| Thereof<br> acquisitions^2^ | 7 | 0 | 0 | 7 | 188 | 189 | 8 | 385 |
| SAP<br> Group (nine months’ end average) | 47,967 | 28,170 | 29,487 | 105,624 | 47,147 | 28,773 | 29,313 | 105,233 |
^1^to the updated cost allocation policy described in Note (L), headcount numbers for the comparative period were adjusted accordingly.
^2^Acquisitions closed between January 1 and September 30 of the respective year.
25/29
OtherDisclosures
(K) FinancialIncome, Net
In the third quarter of 2023, finance income mainly consisted of gains from disposals and fair value adjustments of equity securities totaling €53 million (Q3/2022: €91 million) and €239 million in the first nine months of 2023 (Q1-Q3/2022: €554 million), and interest income from loans and receivables, other financial assets (cash, cash equivalents, and current investments) as well as from derivatives amounting to €153 million in the third quarter of 2023 (Q3/2022: €58 million) and €343 million in the first nine months of 2023 (Q1-Q3/2022: €123 million).
In the third quarter of 2023, finance costs were primarily impacted by losses from disposals and fair value adjustments of equity securities amounting to €103 million (Q3/2022: €397 million) and €329 million in the first nine months of 2023 (Q1-Q3/2022: €940 million) and interest expense on financial liabilities including lease liabilities and negative effects from derivatives amounting to €134 million in the third quarter of 2023 (Q3/2022: €65 million) and €504 million in the nine months of 2023 (Q1-Q3/2022: €162 million).
(L) UpdatedCost Allocation Policy
Starting January 1, 2023, all activities related to changes in the code of SAP’s cloud and on-premise solutions are treated as development-related activities. Some of those activities, specifically code corrections, were previously considered as support-related activities. SAP believes this update aligns SAP’s accounting policy with market standards and increases comparability to its peers.
In the third quarter 2023, this update of our cost allocation policy resulted in an increase of the cloud gross profit by approximately €25 million, an increase of the software license and support gross profit by approximately €65 million, and an increase of our R&D expenses by approximately €85 million.
In the first nine months of 2023, the update of our cost allocation policy led to an increase of the cloud gross profit by approximately €70 million, an increase of the software license and support gross profit by approximately €195 million, and an increase of our R&D expenses by approximately €265 million.
For the full year 2023, the updated cost allocation policy is expected to result in decreased cost of cloud by approximately €95 million and cost of support by approximately €260 million, while in consequence increased R&D expenses by approximately €355 million.
Had SAP applied this accounting policy in 2022, its cost of cloud, cost of software licenses and support and R&D expense would have been as follows:
| €<br> millions | IFRS | Non-IFRS | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | FY 2022 | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | FY 2022 | |
| Cost<br> of cloud | –817 | –833 | –902 | –947 | –3,499 | –798 | –806 | –873 | –915 | –3,391 |
| Cost<br> of software licenses and support | –347 | –339 | –341 | –358 | –1,384 | –334 | –316 | –319 | –334 | –1,302 |
| Research<br> and development expenses | –1,396 | –1,514 | –1,571 | –1,598 | –6,080 | –1,351 | –1,393 | –1,437 | –1,449 | –5,629 |
(M) DiscontinuedOperations
The sale of Qualtrics has closed in Q2 2023. For the full disclosure, please refer to section (M) Discontinued Operations in SAP’s quarterly statement Q2 2023. During the third quarter 2023, SAP identified a need for an error correction in the accounting related to the divestiture of Qualtrics as reported in Q2. The affected financial statement line items have been restated. For details, please refer to section (N) Correction of Q2 2023 Qualtrics divestiture reporting in this quarterly statement.
The P&L line item “Profit (loss) from discontinued operation” still reflects the Qualtrics activities up to the date of the sale (the comparative figures have been adjusted accordingly). In the third quarter 2023, tax payment of €0,7bn relating to the gain on the sale of Qualtrics were made. These payments were recognized in SAP’s discontinued operations, reducing the investing cash flow. Financial information relating to Qualtrics is presented in the following tables (revenues and expenses are presented after consolidation of transactions between Qualtrics and SAP’s continuing operations):
26/29
| €<br> billion, unless otherwise stated | Q1–Q3<br> 2023 | Q1–Q3<br> 2022 |
|---|---|---|
| Consolidated<br> Income Statements | ||
| Cloud<br> revenue | 0.6 | 0.8 |
| Total<br> revenue | 0.7 | 1.0 |
| Cost<br> of cloud | –0.1 | –0.2 |
| Total<br> cost of revenue | –0.2 | –0.4 |
| Total<br> operating expenses (including total cost of revenue) | –1.2 | –2.1 |
| Disposal<br> gain before tax | 3.6 | 0.0 |
| Operating<br> profit | 3.2 | –1.1 |
| Profit<br> (loss) before tax | 3.2 | –1.1 |
| Income<br> tax expense^1^ | –0.9 | 0.0 |
| Profit<br> (loss) after tax | 2.3 | –1.1 |
| Attributable<br> to owners of parent | 2.4 | –0.8 |
| Earnings<br> per share, basic (IFRS, in €)^2^ | 2.07 | –0.68 |
| Earnings<br> per share, diluted (IFRS, in €)^2^ | 2.05 | –0.68 |
| Earnings<br> per share, basic (non-IFRS, in €)^2^ | 1.94 | 0.03 |
| Consolidated<br> Statements of Cash Flow | ||
| Net operating<br> cash flow | 0.1 | –0.1 |
| Net investing<br> cash flow | 5.6 | –0.0 |
| Net financing<br> cash flow | 0.0 | –0.2 |
^1^For 2023, € 0.9 billion is relating to the gain on sale of discontinued operations.
^2^For the nine months ended September 30, 2023 and 2022, the weighted average number of shares was 1,168 million (diluted 1,179 million) and 1,172 million (diluted: 1,175 million), respectively (treasury stock excluded).
| €<br> billion, unless otherwise stated | Q1–Q3<br> 2023 | Q1–Q3<br> 2022 |
|---|---|---|
| Profit (loss) after tax (IFRS) | 2.3 | –1.1 |
| Adjustment<br> for acquisition related charges | –0.8 | 0.2 |
| Adjustment<br> for share-based payment expenses | 0.4 | 0.9 |
| Adjustment<br> for restructuring expenses | 0.0 | 0.0 |
| Adjustment<br> for tax impact of non-IFRS adjustments | 0.2 | –0.0 |
| Profit (loss) after tax (non-IFRS) | 2.1 | 0.0 |
| Attributable<br> to owners of parent | 2.3 | 0.0 |
(N) Correctionof Q2 2023 Qualtrics divestiture reporting
During the third quarter 2023, SAP identified a need for an error correction in the accounting related to the divestiture of Qualtrics as reported in Q2. The error correction is limited to SAP’s discontinued operations. SAP’s continuing operations net income as well as total operating, investing, or financing cash flows for the second quarter ended June 30, 2023, were not impacted.
Specifically, the taxable gain was determined to be incorrect, with the adjustment leading to an increase in tax expenses from discontinued operations of €0.4 billion. In addition, the distribution of income taxes to the owners of parent and non-controlling interests was adjusted. The error correction has been addressed by restating each of the affected financial statement line items for the second quarter as well as half-year 2023 information. The following tables summarize the impacts on the Group’s consolidated financial statements.
27/29
Impact of adjustments on consolidated statements of financial position
| €<br> millions | as at 6/30/2023 | ||
|---|---|---|---|
| As<br> previously<br><br> reported | Adjustments | As<br> restated | |
| Total<br> current assets | 22,990 | 22,990 | |
| Total<br> non-current assets | 46,730 | 46,730 | |
| Total<br> Assets | 69,719 | 69,719 | |
| Tax<br> liabilities | 582 | 398 | 980 |
| Total<br> current liabilities | 16,176 | 398 | 16,574 |
| Total<br> non-current liabilities | 11,314 | 11,314 | |
| Total<br> liabilities | 27,490 | 398 | 27,888 |
| Retained<br> earnings | 40,225 | –399 | 39,826 |
| Other<br> components of equity | 3,100 | 1 | 3,101 |
| Total<br> equity | 42,229 | –398 | 41,831 |
| Total<br> equity and liabilities | 69,719 | 69,719 |
Impact of adjustments on consolidated income statements
| €<br> millions, unless otherwise stated | Q2 2023 | Q1-Q2 2023 | ||||
|---|---|---|---|---|---|---|
| As<br> previously<br><br> reported | Adjustments | As<br> restated | As<br> previously<br><br> reported | Adjustments | As<br> restated | |
| Profit<br> (loss) after tax from continuing operations | 724 | 724 | 1,128 | 1,128 | ||
| Profit<br> attributable to owners of parent | 728 | 728 | 1,135 | 1,135 | ||
| Profit<br> attributable to non-controlling interests | –4 | –4 | –7 | –7 | ||
| Profit<br> (loss) after tax from discontinued operations | 2,656 | –490 | 2,166 | 2,763 | –490 | 2,272 |
| Profit<br> (loss) after tax^1^ | 3,381 | –490 | 2,890 | 3,890 | –490 | 3,400 |
| Profit<br> attributable to owners of parent^1^ | 3,455 | –385 | 3,070 | 3,933 | –385 | 3,548 |
| Profit<br> attributable to non-controlling interests^1^ | –74 | –105 | –179 | –43 | –105 | –149 |
| Key<br> Ratios | ||||||
| Operating<br> margin (in %) | 18.0 | 18,0 | 14,4 | 14,4 | ||
| Effective<br> tax rate (in %) | 33.8 | 33,8 | 36,3 | 36,3 | ||
| Earnings<br> per share, basic (in €) from continuing operations^2^ | 0.62 | 0.62 | 0.97 | 0.97 | ||
| Earnings<br> per share, basic (in €)^1,2^ | 2.96 | –0.33 | 2.63 | 3.37 | –0.33 | 3.04 |
| Earnings<br> per share, diluted (in €) from continuing operations^2^ | 0.62 | 0.62 | 0.97 | 0.97 | ||
| Earnings<br> per share, diluted (in €)^1,2^ | 2.93 | –0.33 | 2.60 | 3.34 | –0.33 | 3.02 |
^1^From continuing and discontinued operations
^2^For the three months ended June 30, 2023, the weighted average number of shares was 1,169 million (diluted 1,180 million), treasury stock excluded. For the six months ended June 30, 2023, the weighted average number of shares was 1,168 million (diluted 1,176 million), treasury stock excluded.
28/29
Impact of adjustments on consolidated income statements – discontinued operations
| €<br> billion, unless otherwise stated | Q2 2023 | Q1-Q2 2023 | ||||
|---|---|---|---|---|---|---|
| As<br> previously<br><br> reported | Adjustments | As<br> restated | As<br> previously<br><br> reported | Adjustments | As<br> restated | |
| Cloud<br> revenue | 0.3 | 0.3 | 0.6 | 0.6 | ||
| Total<br> revenue | 0.4 | 0.4 | 0.7 | 0.7 | ||
| Cost<br> of cloud | –0.0 | –0.0 | –0.1 | –0.1 | ||
| Total<br> cost of revenue | –0.1 | –0.1 | –0.2 | –0.2 | ||
| Total<br> operating expenses (including total cost of revenue) | –0.5 | –0.5 | –1.2 | –1.2 | ||
| Disposal<br> gain before tax | 3.7 | –0.1 | 3.6 | 3.7 | –0.1 | 3.6 |
| Operating<br> profit | 3.5 | –0.1 | 3.4 | 3.2 | –0.1 | 3.2 |
| Profit (loss) before tax | 3.5 | –0.1 | 3.4 | 3.3 | –0.1 | 3.2 |
| Income<br> tax expense^1^ | –0.9 | –0.4 | –1.3 | –0.5 | –0.4 | –0.9 |
| Profit (loss) after tax | 2.7 | –0.5 | 2.2 | 2.8 | –0.5 | 2.3 |
| Attributable<br> to owners of parent | 2.7 | –0.4 | 2.3 | 2.8 | –0.4 | 2.4 |
| Earnings<br> per share, basic (IFRS, in €)^2^ | 2.33 | –0.33 | 2.00 | 2.40 | –0.33 | 2.07 |
| Earnings<br> per share, diluted (IFRS, in €)^2^ | 2.31 | –0.33 | 1.98 | 2.38 | –0.33 | 2.05 |
^1^For 2023. €0.9 billion relates to the gain on sale of discontinued operations.
^2^ For the three months ended June 30, 2023, the weighted average number of shares was 1,169 million (diluted 1,180 million), treasury stock excluded. For the six months ended June 30, 2023, the weighted average number of shares was 1,168 million (diluted 1,176 million), treasury stock excluded.
| (O) | CapitalizedCost from Contracts with Customers – Costs of Obtaining Customer Contracts |
|---|
As disclosed in Consolidated Financial Statements for 2022, Note (A.3), the determination of the amortization period for capitalized sales commissions requires judgement. In exercising this judgment, we consider our expectation about future contract renewals which we evaluate periodically to confirm that the resulting amortization period properly reflects the expected contract life or if there are potential indicators of impairment. The latest review of the amortization periods resulted in a shorter contract life for on-premise support contracts. As a result of this assessment, we have impaired the related capitalized sales commissions in the amount of €65 million as of September 30, 2023. For Q4 2023 SAP estimates this change in contract life to result in higher amortization costs of approximately €61 million and resulting in an estimated impact for the full year 2024 of €126 million. The amortization periods now range from 18 months to seven years depending on the type of offering.
29/29