DGAP-Adhoc: SAP SE: SAP Announces Preliminary Q4 and Full-Year 2021 Results and Provides 2022 Outlook

SAP Announces Outstanding Fourth Quarter and Full-Year 2021 With Record Cloud Performance
Exceeds High End of Outlook for Cloud & Software Revenue and Operating Profit

Fourth Quarter

• Rapid expansion of current cloud backlog to 9.45 billion, up 32% (up 26% at constant currencies), a sequential growth acceleration by 4 percentage points at constant currencies.
• Stellar SAP S/4HANA current cloud backlog performance, up 84% (up 76% at constant currencies), driven by strong adoption of "RISE with SAP".
• Cloud revenue up 28% (up 24% at constant currencies), accelerating further with strong execution across the entire cloud portfolio.

Full Year

• Continuing cloud acceleration across the board, delivering results above expectations.
• IFRS cloud revenue up 17%, non-IFRS cloud revenue up 16% (up 19% at constant currencies), hitting high end of revised 2021 outlook.
• Cloud & software revenue up 4% (up 5% at constant currencies), exceeding high end of revised 2021 outlook.
• IFRS operating profit down 30%, non-IFRS operating profit down 1% (up 1% at constant currencies), exceeding high end of revised 2021 outlook.
• Operating cash flow expected above 6.0 billion; Free cash flow expected at around 5.0 billion.
• Strong, accelerating cloud growth reflected in 2022 outlook, targeting up to 26% non-IFRS cloud revenue growth at constant currencies.

Walldorf, Germany - January 13, 2022. After an initial review of its fourth-quarter 2021 performance, SAP SE (NYSE: SAP) today announced its preliminary financial results for the fourth quarter and full year ended December 31, 2021. All 2021 figures in this release are approximate due to the preliminary nature of the announcement.

Financial Performance

Fourth Quarter 2021

Current cloud backlog accelerated faster than anticipated, up 32% to 9.45 billion and up 26% at constant currencies. SAP S/4HANA current cloud backlog was up 84% to 1.71 billion and up 76% at constant currencies. Cloud revenue was up 28% to 2.61 billion and up 24% at constant currencies. SAP S/4HANA cloud revenue was up 65% to 329 million and up 61% at constant currencies. Software licenses revenue was down 14% year over year to 1.46 billion and down 17% at constant currencies. Cloud and software revenue was up 6% to 6.99 billion and up 3% at constant currencies. Services revenue was up 3% year over year to 0.99 billion and flat at constant currencies. Total revenue was up 6% year over year to 7.98 billion and up 3% at constant currencies.

The share of more predictable revenue grew by 5 percentage points year over year to 69% in the fourth quarter.

IFRS operating profit decreased 45% to 1.47 billion and IFRS operating margin decreased by 16.9 percentage points to 18.4% mainly due to higher share-based compensation expenses, primarily related to Qualtrics. Non-IFRS operating profit decreased 11% to 2.47 billion and decreased 12% at constant currencies. Non-IFRS operating margin decreased by 5.8 percentage points to 30.9% and decreased by 5.4 percentage points at constant currencies. Prior year IFRS operating profit included a disposal gain of 194 million and non-IFRS operating profit of 128 million related to the sale of the SAP Digital Interconnect business.

IFRS earnings per share decreased 23% to 1.24 and non-IFRS earnings per share increased 10% to 1.86.

Full Year 2021

SAP hit the high end of its revised 2021 cloud revenue outlook range and exceeded its cloud and software revenue and operating profit outlook ranges.

IFRS cloud revenue was up 17%, non-IFRS cloud revenue was up 16% to 9.42 billion and up 19% to 9.59 billion at constant currencies, hitting the high end of the revised full year outlook (9.4 to 9.6 billion non-IFRS at constant currencies). SAP S/4HANA cloud revenue was up 46% to 1.09 billion and up 47% at constant currencies, exceeding the 1 billion cloud revenue mark as anticipated. Software licenses revenue was down 11% year over year to 3.25 billion and down 11% to 3.24 billion at constant currencies. Cloud and software revenue was up 4% year over year to 24.08 billion and up 5% to 24.41 billion at constant currencies, exceeding the revised full year outlook (23.8 - 24.2 billion non-IFRS at constant currencies). Total revenue was up 2% year over year to 27.84 billion and up 3% to 28.23 billion at constant currencies.

As anticipated, the share of more predictable revenue grew by 3 percentage points year over year to 75% for the full year 2021.

For the full year, IFRS operating profit and operating margin were impacted by significantly higher share-based compensation expenses compared to 2020 mainly due to the Qualtrics IPO and the appreciation of SAP's share price during the year. IFRS operating profit decreased by 30% year over year to 4.66 billion. IFRS operating margin decreased by 7.5 percentage points year over year to 16.7%. Non-IFRS operating profit was down 1% to 8.23 billion and up 1% to 8.41 billion at constant currencies, exceeding the high end of the revised full year outlook (8.1 - 8.3 billion non-IFRS at constant currencies). Non-IFRS operating margin decreased by 0.7 percentage points to 29.6% and decreased by 0.5 percentage points at constant currencies.

IFRS earnings per share increased 3% to 4.46 and non-IFRS earnings per share increased 25% to 6.74, reflecting a strong contribution from Sapphire Ventures throughout the entire year.

Operating cash flow for the full year is expected to be above 6.0 billion. Free cash flow is expected to be at around 5.0 billion.

Business Outlook 2022

For 2022, SAP expects its cloud growth to continue to accelerate. The pace and scale of SAP's cloud momentum places the Company well on track towards its mid-term ambition.

For the full year 2022, SAP expects:

• 11.55 - 11.85 billion non-IFRS cloud revenue at constant currencies (2021: 9.42 billion), up 23% to 26% at constant currencies.
• 25.0 - 25.5 billion non-IFRS cloud and software revenue at constant currencies (2021: 24.08 billion), up 4% to 6% at constant currencies.
• 7.8 - 8.25 billion non-IFRS operating profit at constant currencies (2021: 8.23 billion), flat to down 5% at constant currencies.
• The share of more predictable revenue (defined as the total of cloud revenue and software support revenue) is expected to reach approximately 78% (2021: 75%).

Ambition 2025

SAP confidently reiterates its mid-term ambition which was previously published in its Q3 2020 Quarterly Statement.

Contact:
Anthony Coletta
Chief Investor Relations Officer
+49 (6227) 7-60437
investor@sap.com