DGAP-Ad-hoc: SAP SE / Key word(s): Quarter Results/Preliminary Results
SAP SE: SAP Pre-Announces Outstanding Third Quarter Results

11-Oct-2019 / 00:05 CET/CEST
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The issuer is solely responsible for the content of this announcement.

'The growth story at SAP continues with maximum strength. I couldn't be prouder of this very significant top line and bottom line expansion,' said Bill McDermott, SAP. 'The future is bright!'

'We have delivered a very strong result on the bottom line based on further acceleration of our operational excellence initiative and restructuring benefits in the third quarter. In parallel we have continued to execute extremely well on our cloud transition in the first nine months - a dynamic cloud business growing at 41% combined with a stable core, leading to double digit topline growth' said Luka Mucic, SAP. 'It is with great confidence that we reiterate our 2019 outlook.'

Business Outlook 2019

The company reiterates its outlook for the full year 2019.

SAP continues to expect:

• Non-IFRS cloud revenue to be in a range of EUR6.7 - EUR7.0 billion at constant currencies (2018: EUR5.03 billion), up 33% - 39% at constant currencies.
• Non-IFRS cloud and software revenue to be in a range of EUR22.4 - EUR22.7 billion at constant currencies (2018: EUR20.66 billion), up 8.5% - 10% at constant currencies.
• Non-IFRS operating profit to be in a range of EUR7.85 - EUR8.05 billion at constant currencies (2018: EUR7.16 billion), up 9.5% - 12.5% at constant currencies.

In addition, SAP expects total revenues to increase strongly, at a rate lower than operating profit.

Ambition 2020 and 2023

Ambition 2020

SAP continues to expect:

• EUR8.6 - EUR9.1 billion non-IFRS cloud revenue
• EUR28.6 - EUR29.2 billion non-IFRS total revenue
• The share of more predictable revenue (defined as the total of cloud revenue and software support revenue) in a range of 70% - 75%
• EUR8.8 - EUR9.1 billion non-IFRS operating profit

Ambition 2023

Over the period from 2018 through 2023, SAP continues to expect to:

• More than triple non-IFRS cloud revenue (2018: EUR5.03 billion)
• Grow to more than EUR35 billion in non-IFRS total revenue (2018: EUR24.74 billion)
• Approach a share of more predictable revenue of 80%
• Reach a Non-IFRS cloud gross margin of 75%
• Increase the non-IFRS operating margin by one percentage point per year on average, representing a total expansion of approximately 500 basis points.

Additional Information

This press release and all information therein is unaudited.

The 2019 numbers include Qualtrics' revenues and profits only from the acquisition date of January 23rd. The comparative numbers for full year 2018 do not include Qualtrics revenues and profits and include Callidus revenue and profits only from the April 5th, 2018 acquisition date.

Definition of key growth metrics

New cloud bookings are the total of all orders received in a given period the revenue from which is expected to be classified as cloud revenue and that result from purchases by new customers and from incremental purchases by existing customers. Consequently, orders to renew existing contracts are not included in this metric. The order amount must be committed. Consequently, due to their pay-per-use nature, business network transaction fees which do not include a committed minimum consumption are not reflected in the bookings metric (e.g. SAP Ariba and SAP Fieldglass transaction-based fees). Amounts included in the measures are generally annualized (annualized contract value ACV).

Share of more predictable revenue is the total of non-IFRS cloud revenue and non-IFRS software support revenue as a percentage of total revenue.

Third Quarter 2019 Quarterly Statement

SAP's third quarter 2019 quarterly statement will be published on October 21, 2019 and will be available for download at www.sap.com/investor.

Webcast

SAP senior management will host a financial analyst conference call on Monday, October 21st at 2:00 PM (CET) / 1:00 PM (GMT) / 8:00 AM (Eastern) / 5:00 AM (Pacific). The call will be webcast live on the Company's website at www.sap.com/investor and will be available for replay. Supplementary financial information pertaining to the third quarter results can be found at www.sap.com/investor.

Special Capital Markets Day

SAP will host a Special Capital Markets Day on November 12, 2019 in New York City.

About SAP

As the Experience Company powered by the Intelligent Enterprise, SAP is the market leader in enterprise application software, helping companies of all sizes and in all industries run at their best: 77% of the world's transaction revenue touches an SAP(R) system. 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 more than 437,000 business and public customers 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 http://www.sap.com.

For more information, financial community only:

Stefan Gruber +49 (6227) 7-44872 [email protected], CET
Follow SAP Investor Relations on Twitter at @sapinvestor.

For more information, press only:

Rajiv Sekhri +49 (6227) 7-74871 [email protected], CET
Marcus Winkler +49 (6227) 7-67497 [email protected], CET

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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 ('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.
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