Debt Investor Call. Thursday, February 14, 2019 PUBLIC

Transcription

1 Debt Investor Call Thursday, February 14, 2019

2 Safe Harbor Statement 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 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 forwardlooking 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 Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. 2

3 Scott Smith Investor Relations

4 Income Statement and Outlook Balance Sheet and Cash Flow Analysis Acquisition of Qualtrics

5 SAP is delivering the Intelligent Enterprise 5

6 SAP hits or exceeds all raised outlook metrics Cloud Subscriptions & Support Revenue in billions Cloud and Software Revenue in billions Total Revenue in billions Operating Profit in billions IFRS Non-IFRS* % +38% Guidance % to 39.0% IFRS Non-IFRS* % +10% Guidance % to 9.0% IFRS Non-IFRS* % +11% Guidance % to 8.5% IFRS Non-IFRS* % +10% Guidance % to 11.0% Other Highlights (FY): New cloud bookings: +25% to 1.81bn (+28% cc) Cloud backlog: > 10bn (+30% cc) New cloud and software license order entry**: +11% to > 10bn (+14% cc) *Non-IFRS figures and growth rates at constant currencies **(Cloud TCV Order Entry + SW Order Entry) 6

7 SAP s unmatched global reach Strength across all geographies in Q4 and FY 2018 Americas Q4/18 FY/18 EMEA Q4/18 FY/18 APJ Q4/18 FY/18 Cloud subscriptions and support revenue 41% +38% cc 28% +33% cc 40% +39% cc Cloud subscriptions and support revenue 40% +43% cc Cloud subscriptions and support revenue 48% +50% cc 46% +53% cc Cloud and software revenue 14% +20% cc 4% +13% cc For the FY, Brazil and Mexico had a strong performance in cloud revenue. The U.S. had a solid performance in both cloud and software revenue. Cloud and software revenue 6% +7% cc 7% +8% cc For the FY, Germany, Middle East/Africa and Spain had a strong cloud revenue growth. The UK and Italy had a strong software revenue growth. Cloud and software revenue 5% +6% cc 6% +10% cc For the FY, Greater China and Japan had strong cloud revenue growth. Greater China and India had a strong, Japan a solid performance in software revenue. Revenues calculated based on customer location; All numbers are Non-IFRS unless otherwise stated Individual country highlights are based on Non-IFRS at constant currencies 7

8 Full year gross margins up for all business models in percent FY/17 FY/18 Cloud Subscriptions & Support Business Network Private Cloud (IaaS) Public Cloud (SaaS/PaaS) Software & Support Cloud & Software Services Total Gross Margin Cloud gross margin expanded 60 basis points, reaching 63% in 2018 Business network margin increased for the full year by 1.1 percentage points Private cloud margin improved to 14% for the full year. Going forward we expect it to improve significantly due to partnerships with hyperscalers Public cloud gross margin improvement is primarily driven by top line growth and will increasingly benefit from platform convergence Software and support gross margin slightly up yoy Cloud and software margin impacted by revenue mix shift by 1.2 percentage points Services gross margin was up to 24% in 2018 and remains among best in class 8

9 Continued operating profit expansion Operating profit (Non-IFRS) FY/18: 7.16bn +10% cc 2019 and beyond: Increasing benefits from highly standardized converged platform Efficiency improvements in each business Leverage from scaling cloud and an ever higher renewal base SAP will further increase its focus on key strategic growth areas in % Operating profit 7.16bn 6.77bn Non-IFRS Operating margin (R4Q) 30.1% 29.7% 28.9% 29.0% 29.0% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Non-IFRS 9

10 2019 outlook and mid-term ambition Targeting >3x cloud revenue and > 35bn in total revenue by Cloud Subscription Revenue 5.03bn Cloud and Software Revenue 20.66bn Total Revenue 24.74bn Operating Profit 7.16bn 2019 outlook* Cloud Subscription Revenue in a range of bn Growth: 33.0% to 39.0% Cloud and Software Revenue in a range of bn Growth: 8.5% to 10.0% Operating Profit in a range of bn Growth: 7.5% to 11.5% 2020 ambition Cloud Subscription Revenue in a range of bn Total Revenue in a range of bn Operating Profit in a range of bn Share of more predictable revenue 70% to 75% 2023 ambition More than triple Cloud Subscription Revenue More than 35.0bn Total Revenue Operating Profit Growth: 7.5% 10.0% [CAGR] Share of more predictable revenue approaching 80% Total Revenue to increase strongly at a rate slightly lower than Operating Profit Non-IFRS; *Non-IFRS at constant currencies. 10

11 Dympna Donnelly Global Treasury

12 Income Statement and Outlook Balance Sheet and Cash Flow Analysis Acquisition of Qualtrics

13 Balance Sheet, Condensed June 30, 2018, IFRS Assets millions 12/31/18 12/31/17 Cash, cash equivalents and other financial assets 9,075 5,001 Trade and other receivables 6,384 5,899 Other current assets 1,445 1,031 Total current assets 16,904 11,930 Goodwill 23,725 21,271 Intangible assets 3,227 2,967 Property, plant, and equipment 3,553 2,967 Other non-current assets 4,278 3,349 Total non-current assets 34,781 30,554 Total assets 51,685 42,484 Equity and liabilities millions 12/31/18 12/31/17 Trade and other payables 1,501 1,151 Provisions Other liabilities 5,991 6,140 Contract liabilities / deferred income, current 3,047 2,771 Total current liabilities 10,619 10,210 Financial liabilities 10,553 5,034 Provisions Contract liabilities / deferred income, non-current Other non-current liabilities 1,249 1,318 Total non-current liabilities 12,191 6,756 Total liabilities 22,810 16,966 Total equity 28,876 25,515 Total equity and liabilities 51,685 42,484 13

14 Group Liquidity Development Group Liquidity = cash and cash equivalent + current investments Other = mainly purchase and sales of equity or debt instruments of other entities, purchase and proceeds from treasury shares and effects of foreign currency rates on cash and cash equivalents 14

15 Operating cash flow and free cash flow FY 2018 millions, unless otherwise stated FY/18 FY/17 Operating cash flow 4,302 5,045-15% - Capital expenditure -1,458-1, % Free cash flow 2,843 3,770-25% Free cash flow in percent of total revenue pp Cash conversion rate % Days sales outstanding (DSO in days, June 30)

16 Group Liquidity Development Operating Cash Flow 4.6 bn 5bn Key incremental effects on cash flow: 4.3bn SBC payouts Tax Insurance Payments Currency SBC payouts (Qualtrics) Restructuring Tax Interest (Qualtrics) DSO upside potential IFRS 16 (re-classification) Restructuring DSO upside e 2020e Capital Expenditure Free Cash Flow 1bn 1.3bn 1.5bn 1.5bn 3.6bn 3.8bn 2.8bn Previous Definition Adjusted Definition e e 16

17 Income Statement and Outlook Balance Sheet and Cash Flow Analysis Acquisition of Qualtrics

18 Qualtrics Acquisition Finance Initial financing On Nov. 11, 2018, SAP announced the acquisition of Qualtrics, the global pioneer of the experience management (XM) software category Financing of the purchase price of USD 8.0bn was safeguarded with an acquisition facility of EUR 7.0bn Similar to the acquisition of Concur in Dec. 2014, the facility was split into a EUR 4.0bn Bridge Facility and a EUR 3.0bn Term Loan Refinancing Just three weeks after the announcement of the acquisition, SAP priced EUR 4.5bn of Eurobonds in a challenging market environment Clear objective was to refinance the Bridge Facility completely within one transaction and a one day execution strategy Timing and execution strategy turned out to be very successful after a rather positive G20 summit the weekend before Finally, five tranches with fixed and variable coupons and maturities between 2 and years were issued The transaction turned out to be the only corporate issuance in December 2018 and the largest ever printed on the Eurobond market in December Syndication Beginning of January 2019, the remaining EUR 2.5bn of the Term Loan were syndicated amongst SAP s core banks The loan was fully drawn when the purchase price was paid on January 23. It can flexibly be repaid within its lifetime of three years Ratings Rating maintained and outlook stable Stable Stable Stable 18

19 Maturity Profile, Dec 31 st 2018 Fixed/Floating Mix After Swaps Total Fixed 71.6% Total Floating 28.4% 19

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21 Thank you.

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