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    SAP   DE0007164600

SAP SE

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SAP : Announces Q2 2022 Results - Form 6-K

07/26/2022 | 06:09am EDT

SAP Announces Q2 2022 Results

·Cloud revenue up 34% and up 24% at constant currencies to become the largest revenue stream

·Current cloud backlog exceeds €10 billion, up 34% and up 25% at constant currencies

·SAP S/4HANA current cloud backlog extends its growth trend, up 100% and up 87% at constant currencies

·Cloud gross profit up 39% (IFRS), up 38% (non-IFRS) and up 28% (non-IFRS at constant currencies), leading to a strong cloud gross margin expansion

·IFRS operating profit down 32%, non-IFRS operating profit down 13% and down 16% at constant currencies, primarily due to the impact of the war in Ukraine

·SAP reaffirms 2022 revenue and free cash flow outlook, updates operating profit outlook range

in € millions, unless otherwise stated

Christian Klein, CEO:"As our Q2 results

Luka Mucic, CFO:"This quarter again proves

demonstrate, SAP's portfolio is more relevant than ever. Our transition to the cloud is ahead of schedule and we have exceeded topline expectations, with cloud revenue becoming SAP's largest revenue stream. Our pipeline is strong, and we are winning market share underpinned by the very strong 100% growth of S/4HANA current cloud backlog."

that our strategy is resonating, even in an increasingly challenging external environment. We continued to deliver strong topline growth, exceeding revenue expectations and increasing cloud profitability. This quarter, we have recognized the main impact of the war in Ukraine. We believe that we are now able to capitalize on our substantial growth investments of the last 18 months, by delivering sustained growth and profitability expansion."

Walldorf, Germany - July 21, 2022. SAP SE (NYSE: SAP) today announced its financial results for the second quarter ended June 30, 2022.

Financial Performance
Group results at a glance - Second quarter 2022
IFRS Non-IFRS1
€ million, unless otherwise stated Q2 2022 Q2 2021 ∆ in % Q2 2022 Q2 2021 ∆ in % ∆ in %
const.
curr.
Cloud revenue 3,056 2,276 34 3,056 2,276 34 24
Software licenses 426 650 -34 426 650 -34 -38
Software support 2,977 2,823 5 2,977 2,823 5 0
Software licenses and support revenue 3,403 3,474 -2 3,403 3,474 -2 -7
Cloud and software revenue 6,459 5,750 12 6,459 5,750 12 5
Total revenue 7,517 6,669 13 7,517 6,669 13 5
Share of more predictable revenue (in %) 80 76 4pp 80 76 4pp
Operating profit (loss) 673 984 -32 1,680 1,922 -13 -16
Profit (loss) after tax 203 1,449 -86 1,093 2,214 -51
Earnings per share - Basic (in €) 0.29 1.15 -75 0.96 1.75 -45
Earnings per share - Diluted (in €) 0.28 1.15 -75
Net cash flows from operating activities 268 686 -61
Free cash flow -86 403 <-100
Number of employees (FTE, June 30) 110,409 103,876 6

1 For a breakdown of the individual adjustments see table "Non-IFRS Adjustments by Functional Areas" in this Quarterly Statement.

Due to rounding, numbers may not add up precisely.

Group results at a glance - Six months ended June 2022
IFRS Non-IFRS1
€ million, unless otherwise stated

Q1-Q2

2022

Q1-Q2

2021

∆ in %

Q1-Q2

2022

Q1-Q2

2021

∆ in % ∆ in %
const.
curr.
Cloud revenue 5,876 4,421 33 5,876 4,421 33 25
Software licenses 743 1,133 -34 743 1,133 -34 -38
Software support 5,900 5,624 5 5,900 5,624 5 0
Software licenses and support revenue 6,643 6,757 -2 6,643 6,757 -2 -6
Cloud and software revenue 12,519 11,178 12 12,519 11,178 12 6
Total revenue 14,594 13,017 12 14,594 13,017 12 6
Share of more predictable revenue (in %) 81 77 4pp 81 77 4pp
Operating profit (loss) 1,726 1,944 -11 3,358 3,660 -8 -12
Profit (loss) after tax 835 2,519 -67 2,259 3,934 -43
Earnings per share - Basic (in €) 0.92 2.03 -55 1.96 3.14 -37
Earnings per share - Diluted (in €) 0.91 2.03 -55
Net cash flows from operating activities 2,750 3,771 -27
Free cash flow 2,079 3,251 -36
Number of employees (FTE, June 30) 110,409 103,876 6

1 For a breakdown of the individual adjustments see table "Non-IFRS Adjustments by Functional Areas" in this Quarterly Statement.

Due to rounding, numbers may not add up precisely

2/31

Cloud Performance - Second quarter 2022
IFRS Non-IFRS1
€ millions, unless otherwise stated Q2 2022 ∆ in % Q2 2022 ∆ in %

∆ in %

constant
currency

Current Cloud Backlog
Total2 NA NA 10,403 34 25
Thereof SAP S/4HANA2 NA NA 2,258 100 87
Cloud Revenue
SaaS3 2,409 35 2,409 35 24
PaaS4 389 49 389 49 40
IaaS5 257 14 257 14 7
Total 3,056 34 3,056 34 24
Thereof SAP S/4HANA 472 84 472 84 72
Thereof Qualtrics 279 61 279 61 43
Cloud Gross Profit
SaaS3 1,753 41 1,813 40 28
PaaS4 310 47 310 47 41
IaaS5 70 -12 73 -11 -6
Total 2,132 39 2,196 38 28
Thereof Qualtrics 211 52 247 54 37
Cloud Gross Margin (in %)
SaaS3 (in %) 72.8 3.1 pp 75.2 2.6 pp 2.6 pp
PaaS4 (in %) 79.5 -1.2 pp 79.6 -1.2 pp 0.5 pp
IaaS5 (in %) 27.1 -8.1 pp 28.5 -8.2 pp -4.6 pp
Total 69.8 2.3 pp 71.9 1.8 pp 2.3 pp
Thereof Qualtrics 75.8 -4.4pp 88.6 -3.8 pp -3.9 pp

1 For a breakdown of the individual adjustments, see table "Non-IFRS Adjustments by Functional Areas" in this Quarterly Statement.

2 As this is an order entry metric, there is no matching IFRS equivalent.

3 Software as a service

4 Platform as a service

5 Infrastructure as a service

Due to rounding, numbers may not add up precisely

3/31

Cloud Performance - Six months ended June 2022
IFRS Non-IFRS1
€ millions, unless otherwise stated Q1-Q2 2022 ∆ in % Q1-Q2 2022 ∆ in %

∆ in %

constant
currency

Current Cloud Backlog
Total2 NA NA 10,403 34 25
Thereof SAP S/4HANA2 NA NA 2,258 100 87
Cloud Revenue
SaaS3 4,644 33 4,644 33 25
PaaS4 739 50 739 50 43
IaaS5 492 12 492 12 6
Total 5,876 33 5,876 33 25
Thereof SAP S/4HANA 876 81 876 81 71
Thereof Qualtrics 548 65 548 65 50
Cloud Gross Profit
SaaS3 3,343 38 3,453 36 27
PaaS4 583 46 583 46 41
IaaS5 129 -13 134 -12 -9
Total 4,054 36 4,170 35 27
Thereof Qualtrics 418 60 489 59 45
Cloud Gross Margin (in %)
SaaS3 (in %) 72.0 2.3 pp 74.4 1.8 pp 1.6 pp
PaaS4 (in %) 78.8 -1.9 pp 78.8 -2.0 pp -0.9 pp
IaaS5 (in %) 26.2 -7.6 pp 27.3 -7.7 pp -5.0 pp
Total 69.0 1.7 pp 71.0 1.2 pp 1.4 pp
Thereof Qualtrics 76.3 -2.1pp 89.1 -3.2 pp -3.3 pp

1 For a breakdown of the individual adjustments, see table "Non-IFRS Adjustments by Functional Areas" in this Quarterly Statement.

2 As this is an order entry metric, there is no matching IFRS equivalent.

3 Software as a service

4 Platform as a service

5 Infrastructure as a service

Due to rounding, numbers may not add up precisely

The Q1-Q2 2022 results were also impacted by other effects. For details, please refer to the disclosures on page 31 of this document.

Financial Highlights

Current cloud backlog exceeded €10 billion for the first time and was up 34% to €10.40 billion and up 25% at constant currencies, accelerating from 23% at constant currencies in the first quarter and demonstrating a strong foundation of future cloud revenue.

Driven by double-digit growth across the SaaS and PaaS portfolio, cloud revenue was up 34% to €3.06 billion, up 24% at constant currencies.

Our cloud gross margin was up 2.3 percentage points to 69.8% (IFRS) and up 1.8 percentage points to 71.9% (non-IFRS). This was driven by a strong increase in our SaaS margin, despite increased investments into our next generation cloud delivery program. Revenue growth, alongside cloud gross margin expansion, drove strong cloud gross profit growth of 39% (IFRS), 38% (non-IFRS) and 28% (non-IFRS at constant currencies).

IFRS operating profit decreased 32% to €673 million and IFRS operating margin decreased by 5.8 percentage points to 8.9%. Non-IFRS operating profit was down 13% to €1.68 billion and decreased 16% at constant currencies. Non-IFRS operating margin decreased by 6.5 percentage points to 22.4% and was down by 5.8 percentage points at constant

4/31

currencies. This was mainly driven by reduced contribution from software licenses revenue, as well as significant bad debt expenses related to the war in Ukraine. In addition, IFRS operating profit was affected by restructuring expenses of €130 million, primarily incurred due to the exit from Russia and Belarus. Estimated immediate financial impacts of the war in Ukraine lowered IFRS operating profit growth by 28 percentage points, non-IFRS operating profit growth by 8 percentage points and non-IFRS operating profit growth at constant currencies by 6 percentage points.

IFRS earnings per share decreased 75% to €0.29 and non-IFRS earnings per share decreased 45% to €0.96. The year-over-year decline of earnings per share reflects a contribution to financial income by Sapphire Ventures that, due to current market conditions, was lower than in the same period last year. Our effective tax rate was 62.2% (IFRS) and 29.3% (non-IFRS). The year-over-year effective tax rate increase mainly resulted from changes in tax exempt income and non-deductible expenses. For non-IFRS, the changes in non-deductible expenses do not apply due to respective adjustments of pre-tax figures.

Free cash flow for the first six months was down 36% to €2.08 billion. The decrease versus last year is mainly attributable to the development of profitability and impacts from working capital due to SAP's continuing move to the cloud. In the second half-year, we expect a more favorable cash flow development due to lower cash taxes and better profitability. We are therefore reiterating our free cash flow outlook for the year.

On January 13, SAP announced a new share repurchase program to support the transition of SAP's share-based compensation programs to equity settlement, which was completed on April 29. SAP had repurchased 10,004,763 shares at an average price of €99.63 with a purchased value of approximately €997 million. In addition, on July 21, SAP announced another share buyback program of approximately €500 million. Repurchased shares will primarily be used to service awards granted under share-based compensation plans for employees.

Impact of War in Ukraine

In the first six months, SAP's business was impacted by the war in Ukraine and SAP's decision to wind down its business operations in Russia and Belarus.

In the second quarter current cloud backlog was approximately €64 million lower due to the termination of existing cloud engagements, reducing current cloud backlog growth by approximately 1 percentage point at constant currencies. IFRS and non-IFRS operating profit were lowered mainly due to reduced software licenses and support revenues and bad debt reserves recorded on trade receivables. IFRS operating profit was additionally affected by restructuring expenses of approximately €120 million incurred due to severance payments to employees in Russia and Belarus and further impairments of assets. The increase of restructuring expenses versus prior expectations is due to the appreciation of the Russian ruble over the past quarter. The overall impact on IFRS operating profit was approximately €280 million (first six months: approximately €350 million) and on non-IFRS operating profit approximately €160 million (first six months: approximately €230 million).

For the fiscal year, we expect a total revenue impact of approximately €300 million at constant currencies from lack of new business and discontinuation of existing business. For non-IFRS operating profit we expect an impact of approximately €350 million at constant currencies from the revenue gaps mentioned above and other expense items.

Other impacts due to this rapidly evolving situation are currently unknown and could potentially subject our business to materially adverse consequences should the situation escalate beyond its current scope.

Business Highlights
More than 650 customers chose SAP S/4HANA in the quarter, increasing total adoption to approximately 20,000 customers, up 15% year over year, of which more than 14,500 are live. In the second quarter, more than 60% of the additional SAP S/4HANA customers were net new.

In the second quarter, customers around the globe chose "RISE with SAP" to drive end-to-end business transformation, including ABB Information Systems, Bridgestone Australia, Capitec Bank, EisnerAmper, Hisense Group, Mitsubishi Materials Corporation, Moderna, Pitney Bowes, RWE, Sumitomo Rubber Industries, Zoomlion. Customers continue to expand their SAP landscape: Microsoft invested in "RISE with SAP", while GlobalFoundries, HeidelbergCement, Malaysia Airlines, and Mapletree Investments combined the "RISE with SAP" offering with further solutions.

Key customer wins across SAP's solution portfolio included: ALTANA, Analog Devices, ASUS, BeiGene, Coop Genossenschaft, Corning, Ericsson, Fisker Inc., FUNKE Mediengruppe, Kyndryl, Moët Hennessy, Persán, Positivo

5/31

Tecnologia, Sportradar, Votorantim, Wieland-Werke. Antonio Puig, CONA Services, HCL Technologies, and Wittenstein all went live on SAP solutions in the second quarter.

SAP's cloud revenue performance for the quarter was strong across all regions. Germany had an outstanding cloud revenue performance while the U.S., Brazil, Japan, India and Switzerland were particularly strong.

On May 4, SAP and Google Cloud announced an expansion of their relationship, unveiling new integrations between Google Workspace and SAP's flagship cloud ERP, SAP S/4HANA Cloud.

On May 11, SAP and IBM announced the latest milestone in their long-standing partnership as IBM undertakes one of the world's largest corporate transformation projects based on SAP ERP software, designed to fuel the company's growth and better support its clients.

On May 18, SAP announced that the Annual General Meeting of Shareholders of SAP SE approved all proposals of the Executive Board and Supervisory Board. Prof. Dr. h. c. mult. Hasso Plattner, Dr. Rouven Westphal and Dr. Gunnar Wiedenfels were reelected and Jennifer Xin-Zhe Li was elected to the Supervisory Board. With these elections, the Supervisory Board has reached gender parity. In addition, the compensation report was approved and to ensure a smooth transition between auditors, KPMG, for fiscal year 2022, and the new auditor, BDO, for fiscal year 2023, were elected. Furthermore, the dividend proposal of €2.45 per share for fiscal year 2021 was approved. This amount includes a special dividend of €0.50 to mark the Company's 50th anniversary.

Segment Results at a Glance

At the beginning of 2022, the Services segment was integrated into the former Applications, Technology & Support segment which was re-named to Applications, Technology & Services.

Therefore, SAP now has two reportable segments: the Applications, Technology & Services segment and the Qualtrics segment.

In addition, certain marketing costs that we primarily incur for product and solution-specific activities in the Applications, Technology & Services segment are now presented in the results of this segment and are no longer allocated to SAP's corporate functions.

Segment Performance Second Quarter 2022

€ million, unless otherwise stated

(Non-IFRS)

Applications, Technology & Services1 Qualtrics

Actual

Currency

∆ in %

∆ in %

const. curr.

Actual

Currency

∆ in %

∆ in %

const. curr.

Cloud revenue 2,704 31 22 279 61 43
Segment revenue 7,109 11 4 330 57 39
Segment profit (loss) 2,094 -11 -15 17 25 45
Cloud gross margin (in %) 69.5 1.3pp 2.0pp 88.6 -3.8pp -3.9pp
Segment margin (in %) 29.5 -7.4pp -6.7pp 5.1 -1.3pp 0.2pp

1 Segment information for comparative prior periods were restated to conform with the new segment composition.

SAP's two reportable segments showed the following performance:

Applications, Technology & Services (AT&S)

Segment revenue in AT&S was up 11% to €7.11 billion year over year, up 4% at constant currencies. Segment performance was mainly due to strong Cloud Revenue growth, driven by SAP S/4HANA as well as Business Technology Platform. Software licenses revenue decreased due to the shift to the cloud as more customers are adopting our 'RISE with SAP' offering. Segment support revenue was up 5% to €2.98 billion year over year and flat at constant currencies.

6/31

Qualtrics

Qualtrics segment revenue was up 57% to €330 million year over year, up 39% at constant currencies. The continued strong growth was driven by robust renewal rates and expansions. LINE Plus, Merck KGaA, the New York City Department of Education, PGA TOUR, PNC Financial Services Group, Progress Residential, Scarlet Health, Tata Digital, Toyota North America, and Venues NSW, among others, selected Qualtrics Experience Management Solutions.

Business Outlook 2022

SAP is executing on its cloud-led strategy, which is driving accelerating cloud growth through both new business and cloud adoption by existing customers. The pace and scale of SAP's cloud momentum places the Company well on track towards its mid-term ambition.

Financial Outlook

For 2022, SAP now expects:

· €7.6 - 7.9 billion non-IFRS operating profit at constant currencies (2021: €8.23 billion), down 4% to 8% at constant currencies. The updated non-IFRS operating profit outlook range reflects the expected 2022 non-IFRS operating profit impact of approximately €350 million at constant currencies from the war in Ukraine and a potential continued marked decline of software licenses revenue. The previous range was €7.8 - 8.25 billion at constant currencies.

Despite the expected total revenue impact of approximately €300 million at constant currencies of the war in Ukraine and a further accelerated move of our customers from upfront software licenses revenue to the cloud in the current macro-environment, SAP continues to expect for 2022:

· €11.55 - 11.85 billion cloud revenue at constant currencies (2021: €9.42 billion), up 23% to 26% at constant currencies.
· €25.0 - 25.5 billion cloud and software revenue at constant currencies (2021: €24.08 billion), up 4% to 6% 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%).
· Free cash flow above €4.5 billion (2021: €5.01 billion).

SAP is also updating its full-year 2022 effective tax rate outlook (IFRS) to 34.0% to 38.0% (previously: 28.0% to 32.0%). The adjustment mainly results from an updated projection of non-deductible expenses and of the lower 2022 financial income contribution of Sapphire Ventures given current market conditions. As the updated non-deductible expenses are not included in non-IFRS, SAP continues to anticipate a full-year 2022 effective tax rate (non-IFRS) of 23.0% to 27.0% but expects to be at the upper end of this range.

While SAP's full-year 2022 business 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 for the Q3 and FY 2022 expected currency impacts.

Expected Currency Impact Assuming June 2022 Rates Apply for the Rest of the Year
In percentage points Q3 2022 FY 2022
Cloud revenue growth +8pp to +10pp +7pp to +9pp
Cloud and software revenue growth +5pp to +7pp +4pp to +6pp
Operating profit growth (non-IFRS) +3.5pp to +5.5pp +2.5pp to +4.5pp

Non-Financial Outlook

SAP now expects the Employee Engagement Index to be in a range of 80% to 84% in 2022 (previously: 84% to 86%).

7/31

In 2022, SAP continues to expect:

a Customer Net Promoter Score of 11 to 15 (2021: 10)
Net carbon emissions of 70 kt (2021: 110 kt)

Ambition 2025

SAP reiterates its mid-term ambition published in its Q3 2020 Quarterly Statement including the commitment of double-digit growth of operating profit in 2023. In light of its strong cloud momentum and most recent favorable currency exchange rates development, SAP expects to update its mid-term ambition in the upcoming quarters.

8/31

Additional Information

This press release and all information therein is preliminary and unaudited.

SAP Performance Measures

For more information about our key growth metrics and performance measures, their calculation, their usefulness, and their limitation, please refer to the following document on our Investor Relations website: SAP Performance Measures.

Webcast

SAP senior management will host a financial analyst conference call on Thursday, July 21st at 2:00 PM (CET) / 1:00 PM (GMT) / 8:00 AM (Eastern) / 5:00 AM (Pacific). The conference 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 first quarter can be found at 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 investor@sap.com, CET

Follow SAP Investor Relations on Twitter at @sapinvestor.

For more information, press only:

Joellen Perry +1 (650) 445-6780 joellen.perry@sap.com, PT
Daniel Reinhardt +49 (6227) 7-40201 daniel.reinhardt@sap.com, 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:

To preview and download broadcast-standard stock footage and press photos digitally, please visit www.sap.com/photos. On this platform, you can find high resolution material for your media channels. To view video stories on diverse topics, visit www.sap-tv.com. From this site, you can embed videos into your own Web pages, share video via email links, and subscribe to RSS feeds from SAP TV.

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 2021 Annual Report on Form 20-F.

© 2022 SAP SE. All rights reserved.

SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE in Germany and other countries. Please see https://www.sap.com/copyright for additional information.

9/31

Contents

Financial and Non-Financial Key Facts (IFRS and Non-IFRS) 11
Primary Financial Statements of SAP Group (IFRS) 13
(A) Consolidated Income Statements 13
(B) Consolidated Statements of Financial Position 15
(C) Consolidated Statements of Cash Flows 16
Non-IFRS Numbers 17
(D) Basis of Non-IFRS Presentation 17
(E) Reconciliation from Non-IFRS Numbers to IFRS Numbers 18
(F) Non-IFRS Adjustments - Actuals and Estimates 20
(G) Non-IFRS Adjustments by Functional Areas 20
Disaggregations 22
(H) Segment Reporting 22
(I) Reconciliation of Cloud Revenues and Margins 26
(J) Revenue by Region (IFRS and Non-IFRS) 28
(K) Employees by Region and Functional Areas 30
Other Disclosures 31
(L) Financial Income, Net 31
(M) Business Combinations 31
(N) Share Buyback 31
(O) Share Based Payments 31

10/31

Financial and Non-Financial Key Facts (IFRS and Non-IFRS)

€ millions, unless otherwise stated

Q1

2021

Q2

2021

Q3

2021

Q4

2021

TY

2021

Q1

2022

Q2

2022

Revenues
Cloud 2,145 2,276 2,386 2,611 9,418 2,820 3,056
% change - yoy 7 11 20 28 17 31 34
% change constant currency - yoy 13 17 20 24 19 25 24
SAP S/4HANA Cloud 227 257 276 329 1,090 404 472
% change - yoy 36 33 46 65 46 78 84
% change constant currency - yoy 43 39 46 61 47 71 72
Software licenses 483 650 657 1,458 3,248 317 426
% change - yoy 7 -16 -8 -14 -11 -34 -34
% change constant currency - yoy 11 -13 -8 -17 -11 -36 -38
Software support 2,801 2,823 2,867 2,920 11,412 2,923 2,977
% change - yoy -5 -2 1 3 -1 4 5
% change constant currency - yoy 0 1 1 1 1 1 0
Software licenses and support 3,283 3,474 3,524 4,379 14,660 3,240 3,403
% change - yoy -3 -5 -1 -4 -3 -1 -2
% change constant currency - yoy 1 -2 -1 -6 -2 -4 -7
Cloud and software 5,428 5,750 5,910 6,990 24,078 6,060 6,459
% change - yoy 1 1 7 6 4 12 12
% change constant currency - yoy 6 5 6 3 5 7 5
Total revenue 6,348 6,669 6,845 7,981 27,842 7,077 7,517
% change - yoy -3 -1 5 6 2 11 13
% change constant currency - yoy 2 3 5 3 3 7 5
Share of more predictable revenue (in %) 78 76 77 69 75 81 80
Profits
Operating profit (loss) (IFRS) 960 984 1,249 1,463 4,656 1,053 673
Operating profit (loss) (non-IFRS) 1,738 1,922 2,102 2,468 8,230 1,677 1,680
% change 17 -2 2 -11 -1 -4 -13
% change constant currency 24 3 2 -12 1 -7 -16
Profit (loss) after tax (IFRS) 1,070 1,449 1,418 1,440 5,376 632 203
Profit (loss) after tax (non-IFRS) 1,720 2,214 2,129 2,274 8,337 1,166 1,093
% change 70 59 1 12 28 -32 -51
Margins
Cloud gross margin (IFRS, in %) 67.2 67.5 67.0 66.6 67.0 68.2 69.8
Cloud gross margin (non-IFRS, in %) 69.5 70.0 69.4 69.0 69.5 70.0 71.9
Software license and support gross margin (IFRS, in %) 85.7 86.5 87.1 87.9 86.9 87.0 87.7
Software license and support gross margin (non-IFRS, in %) 86.3 87.3 87.8 88.5 87.6 87.5 88.5
Cloud and software gross margin (IFRS, in %) 78.4 79.0 79.0 79.9 79.1 78.2 79.2
Cloud and software gross margin (non-IFRS, in %) 79.7 80.5 80.4 81.2 80.5 79.4 80.6
Gross margin (IFRS, in %) 70.3 70.8 71.4 73.0 71.5 70.3 70.7
Gross margin (non-IFRS, in %) 72.3 73.4 73.6 75.1 73.7 72.0 73.1
Operating margin (IFRS, in %) 15.1 14.8 18.2 18.3 16.7 14.9 8.9
Operating margin (non-IFRS, in %) 27.4 28.8 30.7 30.9 29.6 23.7 22.4
ATS segment - Cloud gross margin (in %) 67.7 68.2 67.6 66.8 67.6 67.8 69.5
ATS segment - Segment gross margin (in %) 72.8 73.9 74.4 74.8 74.0 71.8 72.9
ATS segment - Segment margin in % 35.4 36.8 38.2 36.9 36.8 30.7 29.5
Qualtrics segment - Cloud gross margin (in %) 92.2 92.4 91.6 90.2 91.5 89.6 88.6
Qualtrics segment - Segment gross margin (in %) 79.5 80.3 80.7 78.1 79.6 78.9 77.5
Qualtrics segment - Segment margin (in %) 6.3 6.3 6.0 1.6 4.8 3.1 5.1

11/31

Key Profit Ratios
Effective tax rate (IFRS, in %) 20.0 19.7 18.9 26.4 21.5 33.1 62.2
Effective tax rate (non-IFRS, in %) 18.7 19.2 18.2 23.2 20.0 25.7 29.3
Earnings per share, basic (IFRS, in €) 0.88 1.15 1.19 1.23 4.46 0.63 0.29
Earnings per share, basic (non-IFRS, in €) 1.40 1.75 1.74 1.85 6.73 1.00 0.96
Order Entry and current cloud backlog
Current cloud backlog 7,628 7,766 8,171 9,447 9,447 9,731 10,403
% change - yoy 15 17 24 32 32 28 34
% change constant currency - yoy 19 20 22 26 26 23 25
SAP S/4HANA Current cloud backlog 1,036 1,130 1,283 1,707 1,707 1,925 2,258
% change - yoy 39 45 60 84 84 86 100
% change constant currency - yoy 43 48 58 76 76 79 87
Share of cloud orders greater than €5 million based on total cloud order entry volume (in %)3 25 29 38 45 41 41 48
Share of cloud orders smaller than €1 million based on total cloud order entry volume (in %)3 45 38 35 27 28 31 28
Share of orders greater than €5 million based on total software order entry volume (in %) 23 22 31 24 25 40 33
Share of orders smaller than €1 million based on total software order entry volume (in %) 42 43 41 36 39 33 40
Liquidity and Cash Flow
Net cash flows from operating activities 3,085 686 1,183 1,269 6,223 2,482 268
Capital expenditure -153 -191 -202 -255 -800 -221 -235
Payments of lease liabilities -84 -92 -99 -98 -374 -95 -120
Free cash flow 2,848 403 881 916 5,049 2,165 -86
% of total revenue 45 6 13 11 18 31 -1
% of profit after tax (IFRS) 266 28 62 64 94 343 -42
Group liquidity 11,573 8,548 9,375 11,530 11,530 11,283 8,256
Financial debt (-) -14,230 -13,116 -12,994 -13,094 -13,094 -12,171 -12,282
Net debt (-) -2,658 -4,568 -3,619 -1,563 -1,563 -888 -4,026
Financial Position
Cash and cash equivalents 10,332 7,764 7,943 8,898 8,898 8,942 7,492
Goodwill 29,328 29,020 29,600 31,090 31,090 32,172 33,913
Total assets 66,477 63,075 65,029 71,169 71,169 76,387 75,575
Contract liabilities (current) 6,568 5,958 4,627 4,431 4,431 7,630 6,883
Equity ratio (total equity in % of total assets) 52 54 57 58 58 56 57
Non-Financials
Number of employees (quarter end)1 103,142 103,876 105,015 107,415 107,415 109,798 110,409
Employee retention (in %, rolling 12 months) 95.4 94.8 93.7 92.8 92.8 92.1 91.6
Women in management (in %, quarter end) 27.6 27.9 28.2 28.3 28.3 28.6 28.8
Net carbon emissions2 (in kilotons) 30 20 25 35 110 20 25

1 In full-time equivalents

2 In CO2 equivalents

3 To conform to refined calculation logic prior quarters have been adjusted

Due to rounding, numbers may not add up precisely.

12/31

Primary Financial Statements of SAP Group (IFRS)

(A) Consolidated Income Statements

(A.1) Consolidated Income Statements - Quarter

€ millions, unless otherwise stated Q2 2022 Q2 2021 ∆ in %
Cloud 3,056 2,276 34
Software licenses 426 650 -34
Software support 2,977 2,823 5
Software licenses and support 3,403 3,474 -2
Cloud and software 6,459 5,750 12
Services 1,057 920 15
Total revenue 7,517 6,669 13
Cost of cloud -924 -740 25
Cost of software licenses and support -419 -468 -10
Cost of cloud and software -1,343 -1,208 11
Cost of services -856 -738 16
Total cost of revenue -2,199 -1,946 13
Gross profit 5,318 4,723 13
Research and development -1,545 -1,306 18
Sales and marketing -2,343 -1,828 28
General and administration -530 -593 -11
Restructuring -130 -6 >100
Other operating income/expense, net -98 -5 >100
Total operating expenses -6,844 -5,685 20
Operating profit (loss) 673 984 -32
Other non-operating income/expense, net -17 -33 -50
Finance income 178 1,002 -82
Finance costs -297 -149 99
Financial income, net -118 853 <-100
Profit (loss) before tax 538 1,804 -70
Income tax expense -335 -355 -6
Profit (loss) after tax 203 1,449 -86
Attributable to owners of parent 334 1,356 -75
Attributable to non-controlling interests -131 93 <-100
Earnings per share, basic (in €)1 0.29 1.15 -75
Earnings per share, diluted (in €)1 0.28 1.15 -75

1 For the three months ended June 30, 2022 and 2021, the weighted average number of shares was 1,171 million (diluted 1,174 million) and 1,180 million (diluted: 1,180 million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.

13/31

(A.2) Consolidated Income Statements - Year-to-Date

€ millions, unless otherwise stated

Q1-Q2

2022

Q1-Q2

2021

∆ in %
Cloud 5,876 4,421 33
Software licenses 743 1,133 -34
Software support 5,900 5,624 5
Software licenses and support 6,643 6,757 -2
Cloud and software 12,519 11,178 12
Services 2,075 1,839 13
Total revenue 14,594 13,017 12
Cost of cloud -1,822 -1,444 26
Cost of software licenses and support -841 -939 -10
Cost of cloud and software -2,663 -2,383 12
Cost of services -1,635 -1,447 13
Total cost of revenue -4,298 -3,830 12
Gross profit 10,296 9,187 12
Research and development -2,970 -2,478 20
Sales and marketing -4,330 -3,491 24
General and administration -1,034 -1,098 -6
Restructuring -119 -164 -27
Other operating income/expense, net -118 -12 >100
Total operating expenses -12,868 -11,073 16
Operating profit (loss) 1,726 1,944 -11
Other non-operating income/expense, net -69 29 <-100
Finance income 521 1,549 -66
Finance costs -695 -381 82
Financial income, net -174 1,168 <-100
Profit (loss) before tax 1,483 3,141 -53
Income tax expense -648 -622 4
Profit (loss) after tax 835 2,519 -67
Attributable to owners of parent 1,074 2,396 -55
Attributable to non-controlling interests -239 123 <-100
Earnings per share, basic (in €)1 0.92 2.03 -55
Earnings per share, diluted (in €)1 0.91 2.03 -55

1 For the six months ended June 30, 2022 and 2021, the weighted average number of shares was 1,174 million (diluted: 1,174 million) and 1,180 million (diluted: 1,180 million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.

14/31

(B) Consolidated Statements of Financial Position
as at 06/30/2022 and 12/31/2021
€ millions 2022 2021
Cash and cash equivalents 7,492 8,898
Other financial assets 987 2,758
Trade and other receivables 8,674 6,352
Other non-financial assets 2,112 1,633
Tax assets 856 403
Total current assets 20,121 20,044
Goodwill 33,913 31,090
Intangible assets 4,295 3,965
Property, plant, and equipment 4,996 4,977
Other financial assets 6,920 6,275
Trade and other receivables 113 147
Other non-financial assets 3,010 2,628
Tax assets 307 263
Deferred tax assets 1,901 1,779
Total non-current assets 55,454 51,125
Total assets 75,575 71,169
€ millions 2022 2021
Trade and other payables 1,939 1,580
Tax liabilities 317 304
Financial liabilities 8,150 4,528
Other non-financial liabilities 3,458 5,203
Provisions 148 89
Contract liabilities 6,883 4,431
Total current liabilities 20,894 16,136
Trade and other payables 104 122
Tax liabilities 903 827
Financial liabilities 9,515 11,042
Other non-financial liabilities 657 860
Provisions 382 355
Deferred tax liabilities 300 291
Contract liabilities 33 13
Total non-current liabilities 11,894 13,510
Total liabilities 32,788 29,645
Issued capital 1,229 1,229
Share premium 2,547 1,918
Retained earnings 35,109 37,022
Other components of equity 5,031 1,756
Treasury shares -4,072 -3,072
Equity attributable to owners of parent 39,844 38,852
Non-controlling interests 2,943 2,670
Total equity 42,787 41,523
Total equity and liabilities 75,575 71,169

Due to rounding, numbers may not add up precisely.

15/31

(C) Consolidated Statements of Cash Flows
€ millions Q1-Q2 2022 Q1-Q2 2021
Profit (loss) after tax 835 2,519
Adjustments to reconcile profit (loss) after tax to net cash flows from operating activities:
Depreciation and amortization 933 871
Share-based payment expense 1,184 1,256
Income tax expense 648 622
Financial income, net 174 -1,168
Decrease/increase in allowances on trade receivables 108 -11
Other adjustments for non-cash items 7 110
Decrease/increase in trade and other receivables 865 1,074
Decrease/increase in other assets -621 -229
Increase/decrease in trade payables, provisions, and other liabilities -1,312 -1,024
Increase/decrease in contract liabilities 2,133 1,888
Share-based payments -918 -779
Interest paid -140 -125
Interest received 45 21
Income taxes paid, net of refunds -1,192 -1,254
Net cash flows from operating activities 2,750 3,771
Business combinations, net of cash and cash equivalents acquired -627 -995
Purchase of intangible assets or property, plant, and equipment -456 -344
Proceeds from sales of intangible assets or property, plant, and equipment 51 40
Purchase of equity or debt instruments of other entities -2,256 -754
Proceeds from sales of equity or debt instruments of other entities 4,005 1,325
Cash flows from advances (supply chain financing)1 -1,432 0
Net cash flows from investing activities -715 -728
Dividends paid -2,865 -2,182
Dividends paid on non-controlling interests -3 -16
Purchase of treasury shares -1,000 0
Proceeds from changes in ownership interests in subsidiaries that do not result in the loss of control 21 1,847
Payments for taxes related to net share settlement of equity awards -224 0
Proceeds from borrowings 38 1,600
Repayments of borrowings -944 -1,802
Payments of lease liabilities -215 -176
Cash flows with funders (supply chain financing)1 1,409 0
Net cash flows from financing activities -3,782 -729
Effect of foreign currency rates on cash and cash equivalents 341 139
Net decrease/increase in cash and cash equivalents -1,406 2,453
Cash and cash equivalents at the beginning of the period 8,898 5,311
Cash and cash equivalents at the end of the period 7,492 7,764
1 For more information, see Note (M) in this Quarterly Statement or Note (D.1) in the SAP Half-Year Report 2022.
Due to rounding, numbers may not add up precisely.

16/31

Non-IFRS Numbers

(D) Basis of Non-IFRS Presentation

We disclose certain financial measures such as revenue (non-IFRS), 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 our constant currency and free cash flow figures, see Explanation of Non-IFRS Measures online.

17/31

(E) Reconciliation from Non-IFRS Numbers to IFRS Numbers
(E.1) Reconciliation from Non-IFRS Numbers to IFRS Numbers - Quarter
€ millions, unless otherwise stated Q2 2022 Q2 2021 ∆ in %
IFRS Adj. Non-
IFRS

Currency

Impact

Non-IFRS
Constant
Currency
IFRS Adj. Non-
IFRS
IFRS Non-
IFRS
Non-IFRS
Constant
Currency1
Revenue Numbers
Cloud 3,056 3,056 -232 2,824 2,276 2,276 34 34 24
Software licenses 426 426 -25 401 650 650 -34 -34 -38
Software support 2,977 2,977 -158 2,820 2,823 2,823 5 5 0
Software licenses and support 3,403 3,403 -183 3,221 3,474 3,474 -2 -2 -7
Cloud and software 6,459 6,459 -414 6,045 5,750 5,750 12 12 5
Services 1,057 1,057 -70 987 920 920 15 15 7
Total revenue 7,517 7,517 -484 7,033 6,669 6,669 13 13 5
Operating Expense Numbers
Cost of cloud -924 64 -860 -740 57 -682 25 26
Cost of software licenses and support -419 28 -391 -468 29 -439 -10 -11
Cost of cloud and software -1,343 92 -1,252 -1,208 86 -1,122 11 12
Cost of services -856 87 -769 -738 87 -651 16 18
Total cost of revenue -2,199 179 -2,020 -1,946 173 -1,773 13 14
Gross profit 5,318 179 5,496 4,723 173 4,896 13 12
Research and development -1,545 181 -1,363 -1,306 157 -1,149 18 19
Sales and marketing -2,343 315 -2,028 -1,828 294 -1,534 28 32
General and administration -530 203 -326 -593 307 -286 -11 14
Restructuring -130 130 0 -6 6 0 >100 NA
Other operating income/expense, net -98 0 -98 -5 0 -5 >100 >100
Total operating expenses -6,844 1,008 -5,836 419 -5,417 -5,685 938 -4,748 20 23 14
Profit Numbers
Operating profit (loss) 673 1,008 1,680 -65 1,615 984 938 1,922 -32 -13 -16
Other non-operating income/expense, net -17 0 -17 -33 0 -33 -50 -50
Finance income 178 0 178 1,002 0 1,002 -82 -82
Finance costs -297 0 -297 -149 0 -149 99 99
Financial income, net -118 0 -118 853 0 853 <-100 <-100
Profit (loss) before tax 538 1,008 1,546 1,804 938 2,741 -70 -44
Income tax expense -335 -118 -453 -355 -173 -528 -6 -14
Profit (loss) after tax 203 890 1,093 1,449 765 2,214 -86 -51
Attributable to owners of parent 334 794 1,129 1,356 706 2,061 -75 -45
Attributable to non-controlling interests -131 95 -36 93 59 153 <-100 <-100
Key Ratios
Operating margin (in %) 8.9 22.4 23.0 14.8 28.8 -5.8pp -6.5pp -5.8pp
Effective tax rate (in %)2 62.2 29.3 19.7 19.2 42.5pp 10.0pp
Earnings per share, basic (in €) 0.29 0.96 1.15 1.75 -75 -45

1 Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS numbers of the previous year's respective period.

2 The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q2 2022 mainly resulted from tax effects of share-based payment expenses, acquisition-related charges and restructuring expenses. The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q2 2021 mainly resulted from tax effects of share-based payment expenses and acquisition-related charges.

Due to rounding, numbers may not add up precisely.

18/31

(E.2) Reconciliation from Non-IFRS Numbers to IFRS Numbers - Year-to-Date
€ millions, unless otherwise stated Q1-Q2 2022 Q1-Q2 2021 ∆ in %
IFRS Adj. Non-
IFRS

Currency

Impact

Non-IFRS

Constant

Currency

IFRS Adj. Non-
IFRS
IFRS Non-
IFRS

Non-IFRS

Constant

Currency1

Revenue Numbers
Cloud 5,876 5,876 -361 5,515 4,421 4,421 33 33 25
Software licenses 743 743 -35 708 1,133 1,133 -34 -34 -38
Software support 5,900 5,900 -251 5,649 5,624 5,624 5 5 0
Software licenses and support 6,643 6,643 -287 6,357 6,757 6,757 -2 -2 -6
Cloud and software 12,519 12,519 -647 11,872 11,178 11,178 12 12 6
Services 2,075 2,075 -108 1,967 1,839 1,839 13 13 7
Total revenue 14,594 14,594 -755 13,839 13,017 13,017 12 12 6
Operating Expense Numbers
Cost of cloud -1,822 116 -1,706 -1,444 108 -1,336 26 28
Cost of software licenses and support -841 45 -796 -939 50 -889 -10 -10
Cost of cloud and software -2,663 161 -2,502 -2,383 158 -2,225 12 12
Cost of services -1,635 133 -1,502 -1,447 139 -1,308 13 15
Total cost of revenue -4,298 294 -4,003 -3,830 297 -3,533 12 13
Gross profit 10,296 294 10,591 9,187 297 9,484 12 12
Research and development -2,970 284 -2,686 -2,478 251 -2,227 20 21
Sales and marketing -4,330 520 -3,810 -3,491 482 -3,009 24 27
General and administration -1,034 415 -619 -1,098 522 -576 -6 7
Restructuring -119 119 0 -164 164 0 -27 NA
Other operating income/expense, net -118 0 -118 -12 0 -12 >100 >100
Total operating expenses -12,868 1,632 -11,236 628 -10,608 -11,073 1,715 -9,357 16 20 13
Profit Numbers
Operating profit (loss) 1,726 1,632 3,358 -127 3,231 1,944 1,715 3,660 -11 -8 -12
Other non-operating income/expense, net -69 0 -69 29 0 29 <-100 <-100
Finance income 521 0 521 1,549 0 1,549 -66 -66
Finance costs -695 0 -695 -381 0 -381 82 82
Financial income, net -174 0 -174 1,168 0 1,168 <-100 <-100
Profit (loss) before tax 1,483 1,632 3,115 3,141 1,715 4,856 -53 -36
Income tax expense -648 -208 -856 -622 -300 -922 4 -7
Profit (loss) after tax 835 1,424 2,259 2,519 1,415 3,934 -67 -43
Attributable to owners of parent 1,074 1,232 2,306 2,396 1,310 3,706 -55 -38
Attributable to non-controlling interests -239 192 -47 123 105 228 <-100 <-100
Key Ratios
Operating margin (in %) 11.8 23.0 23.3 14.9 28.1 -3.1pp -5.1pp -4.8pp
Effective tax rate (in %)2 43.7 27.5 19.8 19.0 23.9pp 8.5pp
Earnings per share, basic (in €) 0.92 1.96 2.03 3.14 -55 -37

1 Constant-currency period-over-period changes are calculated by comparing the current year's non-IFRS constant-currency numbers with the non-IFRS number of the previous year's respective period.

2 The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in the first half of 2022 and 2021 mainly resulted from tax effects of share-based payment expenses, acquisition-related charges and restructuring expenses.

Due to rounding, numbers may not add up precisely.

19/31

(F) Non-IFRS Adjustments - Actuals and Estimates
€ millions

Estimated Amounts for

Full Year 2022

Q1-Q2

2022

Q2 2022 Q1-Q2
2021
Q2 2021
Operating profit (loss) (IFRS) 1,726 673 1,944 984
Adjustment for acquisition-related charges 620-720 328 165 296 147
Adjustment for share-based payment expenses 2,500-2,700 1,184 714 1,256 784
Adjustment for restructuring 130-150 119 130 164 6
Operating expense adjustments 1,632 1,008 1,715 938
Operating profit (loss) (non-IFRS) 3,358 1,680 3,660 1,922

Due to rounding, numbers may not add up precisely.

(G) Non-IFRS Adjustments by Functional Areas
€ millions Q2 2022 Q2 2021
IFRS Acquisition-
Related
SBP1 Restruc-
turing
Non-IFRS IFRS Acquisition-
Related
SBP1 Restruc-
turing
Non-IFRS
Cost of cloud -924 44 20 0 -860 -740 41 16 0 -682
Cost of software licenses and support -419 8 20 0 -391 -468 8 21 0 -439
Cost of services -856 6 81 0 -769 -738 5 82 0 -651
Research and development -1,545 3 178 0 -1,363 -1,306 2 156 0 -1,149
Sales and marketing -2,343 104 211 0 -2,028 -1,828 91 203 0 -1,534
General and administration -530 1 202 0 -326 -593 1 306 0 -286
Restructuring -130 0 0 130 0 -6 0 0 6 0
Other operating income/expense, net -98 0 0 0 -98 -5 0 0 0 -5
Total operating expenses -6,844 165 714 130 -5,836 -5,685 147 784 6 -4,748
€ millions Q1-Q2 2022 Q1-Q2 2021
IFRS

Acquisition-

Related

SBP1 Restruc-
turing
Non-IFRS IFRS

Acquisition-

Related

SBP1 Restruc-
turing
Non-IFRS
Cost of cloud -1,822 85 31 0 -1,706 -1,444 80 28 0 -1,336
Cost of software licenses and support -841 15 30 0 -796 -939 16 34 0 -889
Cost of services -1,635 11 122 0 -1,502 -1,447 10 129 0 -1,308
Research and development -2,970 5 279 0 -2,686 -2,478 3 248 0 -2,227
Sales and marketing -4,330 205 315 0 -3,810 -3,491 181 301 0 -3,009
General and administration -1,034 7 408 0 -619 -1,098 6 516 0 -576
Restructuring -119 0 0 119 0 -164 0 0 164 0
Other operating income/expense, net -118 0 0 0 -118 -12 0 0 0 -12
Total operating expenses -12,868 328 1,184 119 -11,236 -11,073 296 1,256 164 -9,357

1 Share-based Payments

Due to rounding, numbers may not add up precisely.

20/31

If not presented in a separate line item in our income statement, the restructuring expenses would break down as follows:

€ millions Q2 2022 Q1-Q2 2022 Q2 2021 Q1-Q2 2021
Cost of cloud -5 12 -1 -130
Cost of software licenses and support -3 -4 -1 -4
Cost of services -59 -61 -1 -15
Research and development -4 -7 -2 -11
Sales and marketing -56 -57 -1 -3
General and administration -2 -3 0 -1
Restructuring expenses -130 -119 -6 -164

Due to rounding, numbers may not add up precisely.

21/31

Disaggregations
(H) Segment Reporting
(H.1) Segment Policies and Segment Changes

SAP has two reportable segments: the Applications, Technology & Services segment and the Qualtrics segment.

For a more detailed description of SAP's segment reporting, see Note (C.1) "Results of Segments" of our Consolidated Half-Year Financial Statements 2022.

(H.2) Segment Reporting - Quarter

Applications, Technology & Services

€ millions, unless otherwise stated
(non-IFRS)

Q2 2022 Q2 2021 ∆ in % ∆ in %

Actual

Currency

Constant

Currency

Actual

Currency

Actual

Currency

Constant

Currency

Cloud 2,704 2,507 2,063 31 22
Software licenses 425 400 649 -34 -38
Software support 2,977 2,819 2,823 5 0
Software licenses and support 3,402 3,220 3,472 -2 -7
Cloud and software 6,106 5,726 5,535 10 3
Services 1,003 940 877 14 7
Total segment revenue 7,109 6,666 6,412 11 4
Cost of cloud -824 -747 -656 26 14
Cost of software licenses and support -403 -380 -410 -2 -7
Cost of cloud and software -1,227 -1,127 -1,066 15 6
Cost of services -697 -659 -608 15 8
Total cost of revenue -1,924 -1,786 -1,674 15 7
Segment gross profit 5,185 4,879 4,738 9 3
Other segment expenses -3,091 -2,869 -2,377 30 21
Segment profit (loss) 2,094 2,011 2,361 -11 -15
Margins
Cloud gross margin (in %) 69.5 70.2 68.2 1.3pp 2.0pp
Segment gross margin (in %) 72.9 73.2 73.9 -1.0pp -0.7pp
Segment margin (in %) 29.5 30.2 36.8 -7.4pp -6.7pp

Due to rounding, numbers may not add up precisely.

22/31

Qualtrics

€ millions, unless otherwise stated

(non-IFRS)

Q2 2022 Q2 2021 ∆ in % ∆ in %

Actual

Currency

Constant

Currency

Actual

Currency

Actual

Currency

Constant

Currency

Cloud 279 248 174 61 43
Cloud and software 279 248 174 61 43
Services 51 45 37 38 22
Total segment revenue 330 293 211 57 39
Cost of cloud -32 -28 -13 >100 >100
Cost of cloud and software -32 -28 -13 >100 >100
Cost of services -43 -38 -28 51 36
Total cost of revenue -74 -67 -41 80 61
Segment gross profit 256 226 169 51 34
Other segment expenses -239 -207 -156 53 33
Segment profit (loss) 17 19 13 25 45
Margins
Cloud gross margin (in %) 88.6 88.5 92.4 -3.8pp -3.9pp
Segment gross margin (in %) 77.5 77.2 80.3 -2.9pp -3.1pp
Segment margin (in %) 5.1 6.6 6.3 -1.3pp 0.2pp

Due to rounding, numbers may not add up precisely.

23/31

(H.3) Segment Reporting - Year-to-Date

Applications, Technology & Services

€ millions, unless otherwise stated

(non-IFRS)

Q1-Q2 2022 Q1-Q2 2021 ∆ in % ∆ in %

Actual

Currency

Constant

Currency

Actual

Currency

Actual

Currency

Constant

Currency

Cloud 5,199 4,891 4,015 29 22
Software licenses 740 705 1,132 -35 -38
Software support 5,899 5,648 5,623 5 0
Software licenses and support 6,640 6,353 6,755 -2 -6
Cloud and software 11,838 11,245 10,769 10 4
Services 1,966 1,868 1,749 12 7
Total segment revenue 13,804 13,113 12,519 10 5
Cost of cloud -1,629 -1,512 -1,287 27 18
Cost of software licenses and support -810 -772 -832 -3 -7
Cost of cloud and software -2,438 -2,285 -2,119 15 8
Cost of services -1,375 -1,316 -1,214 13 8
Total cost of revenue -3,814 -3,600 -3,333 14 8
Segment gross profit 9,991 9,512 9,186 9 4
Other segment expenses -5,841 -5,526 -4,663 25 19
Segment profit (loss) 4,149 3,986 4,523 -8 -12
Margins
Cloud gross margin (in %) 68.7 69.1 67.9 0.7pp 1.1pp
Segment gross margin (in %) 72.4 72.5 73.4 -1.0pp -0.8pp
Segment margin (in %) 30.1 30.4 36.1 -6.1pp -5.7pp

Due to rounding, numbers may not add up precisely.

24/31

Qualtrics

€ millions, unless otherwise stated

(non-IFRS)

Q1-Q2 2022 Q1-Q2 2021 ∆ in % ∆ in %

Actual

Currency

Constant

Currency

Actual

Currency

Actual

Currency

Constant

Currency

Cloud 548 500 333 65 50
Cloud and software 548 500 333 65 50
Services 102 92 80 27 15
Total segment revenue 650 592 413 57 43
Cost of cloud -60 -55 -26 >100 >100
Cost of cloud and software -60 -55 -26 >100 >100
Cost of services -82 -76 -57 44 32
Total cost of revenue -142 -130 -83 72 58
Segment gross profit 508 461 330 54 40
Other segment expenses -481 -431 -304 58 42
Segment profit (loss) 26 30 26 2 17
Margins
Cloud gross margin (in %) 89.1 89.0 92.3 -3.2pp -3.3pp
Segment gross margin (in %) 78.1 78.0 80.0 -1.8pp -2.0pp
Segment margin (in %) 4.1 5.1 6.3 -2.2pp -1.2pp

Due to rounding, numbers may not add up precisely.

25/31

(I) Reconciliation of Cloud Revenues and Margins
(I.1) Reconciliation of Cloud Revenues and Margins - Quarter

€ millions, unless otherwise stated

Q2 2022 Q2 2021 ∆ in %
IFRS Non-
IFRS
Currency
Impact
Non-IFRS
Constant
Currency
IFRS Non-
IFRS
IFRS Non-
IFRS
Non-IFRS
Constant
Currency4
Cloud revenue - SaaS1 2,409 2,409 -191 2,218 1,789 1,789 35 35 24
Cloud revenue - PaaS2 389 389 -24 366 262 262 49 49 40
Cloud revenue - IaaS3 257 257 -17 240 225 225 14 14 7
Cloud revenue 3,056 3,056 -232 2,824 2,276 2,276 34 34 24
Cloud gross margin - SaaS1 (in %) 72.8 75.2 75.2 69.6 72.6 3.1 pp 2.6 pp 2.6 pp
Cloud gross margin - PaaS2 (in %) 79.5 79.6 81.4 80.7 80.8 -1.2 pp -1.2 pp 0.5 pp
Cloud gross margin - IaaS3 (in %) 27.1 28.5 32.1 35.2 36.7 -8.1 pp -8.2 pp -4.6 pp
Cloud gross margin (in %) 69.8 71.9 72.3 67.5 70.0 2.3 pp 1.8 pp 2.3 pp

1 Software as a service

2 Platform as a service

3 Infrastructure as a service

4 Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS numbers of the previous year's respective period.

As of Q1 2022, the allocation of cloud revenues and -expenses to cloud service models has been aligned to internal reporting structures. Presented 2021 comparable periods have been updated accordingly.

Due to rounding, numbers may not add up precisely.

26/31

(I.2) Reconciliation of Cloud Revenues and Margins - Year-to-Date
€ millions, unless otherwise stated Q1-Q2 2022 Q1-Q2 2021 ∆ in %
IFRS Non-
IFRS
Currency
Impact
Non-IFRS
Constant
Currency
IFRS Non-
IFRS
IFRS Non-
IFRS
Non-IFRS
Constant
Currency4
Cloud revenue - SaaS1 4,644 4,644 -298 4,347 3,489 3,489 33 33 25
Cloud revenue - PaaS2 739 739 -37 703 493 493 50 50 43
Cloud revenue - IaaS3 492 492 -26 466 439 439 12 12 6
Cloud revenue 5,876 5,876 -361 5,515 4,421 4,421 33 33 25
Cloud gross margin - SaaS1 (in %) 72.0 74.4 74.2 69.7 72.6 2.3 pp 1.8 pp 1.6 pp
Cloud gross margin - PaaS2 (in %) 78.8 78.8 79.9 80.7 80.8 -1.9 pp -2.0 pp -0.9 pp
Cloud gross margin - IaaS3 (in %) 26.2 27.3 30.0 33.8 35.0 -7.6 pp -7.7 pp -5.0 pp
Cloud gross margin (in %) 69.0 71.0 71.2 67.3 69.8 1.7 pp 1.2 pp 1.4 pp

1 Software as a service

2 Platform as a service

3 Infrastructure as a service

4 Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS numbers of the previous year's respective period.

Due to rounding, numbers may not add up precisely.

27/31

(J) Revenue by Region (IFRS and Non-IFRS)
(J.1) Revenue by Region (IFRS and Non-IFRS) - Quarter
€ millions Q2 2022 Q2 2021 ∆ in %
IFRS Non-IFRS

Currency
Impact

Non-IFRS
Constant
Currency

IFRS Non-IFRS IFRS Non-IFRS

Non-IFRS
Constant
Currency1

Cloud Revenue by Region
EMEA 1,054 1,054 -35 1,018 803 803 31 31 27
Americas 1,614 1,614 -182 1,432 1,176 1,176 37 37 22
APJ 389 389 -15 374 297 297 31 31 26
Cloud revenue 3,056 3,056 -232 2,824 2,276 2,276 34 34 24
Cloud and Software Revenue by Region
EMEA 2,728 2,728 -62 2,666 2,616 2,616 4 4 2
Americas 2,754 2,754 -314 2,440 2,218 2,218 24 24 10
APJ 977 977 -38 939 915 915 7 7 3
Cloud and software revenue 6,459 6,459 -414 6,045 5,750 5,750 12 12 5
Total Revenue by Region
Germany 1,068 1,068 -2 1,066 1,006 1,006 6 6 6
Rest of EMEA 2,106 2,106 -72 2,034 2,014 2,014 5 5 1
Total EMEA 3,174 3,174 -73 3,101 3,020 3,020 5 5 3
United States 2,619 2,619 -296 2,323 2,132 2,132 23 23 9
Rest of Americas 611 611 -72 539 488 488 25 25 11
Total Americas 3,230 3,230 -368 2,862 2,619 2,619 23 23 9
Japan 302 302 13 315 306 306 -1 -1 3
Rest of APJ 811 811 -56 754 724 724 12 12 4
Total APJ 1,112 1,112 -43 1,069 1,030 1,030 8 8 4
Total revenue 7,517 7,517 -484 7,033 6,669 6,669 13 13 5

1) Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS numbers of the previous year's respective period.

Due to rounding, numbers may not add up precisely.

28/31

(J.2) Revenue by Region (IFRS and Non-IFRS) - Year-to-Date
€ millions Q1-Q2 2022 Q1-Q2 2021 ∆ in %
IFRS Non-IFRS

Currency
Impact

Non-IFRS
Constant
Currency

IFRS Non-IFRS IFRS Non-IFRS

Non-IFRS
Constant
Currency1

Cloud Revenue by Region
EMEA 2,036 2,036 -57 1,979 1,547 1,547 32 32 28
Americas 3,094 3,094 -282 2,812 2,291 2,291 35 35 23
APJ 746 746 -22 724 582 582 28 28 24
Cloud revenue 5,876 5,876 -361 5,515 4,421 4,421 33 33 25
Cloud and Software Revenue by Region
EMEA 5,355 5,355 -100 5,255 5,050 5,050 6 6 4
Americas 5,265 5,265 -488 4,777 4,336 4,336 21 21 10
APJ 1,899 1,899 -60 1,839 1,792 1,792 6 6 3
Cloud and software revenue 12,519 12,519 -647 11,872 11,178 11,178 12 12 6
Total Revenue by Region
Germany 2,129 2,129 -3 2,126 1,957 1,957 9 9 9
Rest of EMEA 4,110 4,110 -114 3,997 3,898 3,898 5 5 3
Total EMEA 6,239 6,239 -117 6,123 5,855 5,855 7 7 5
United States 5,028 5,028 -456 4,571 4,166 4,166 21 21 10
Rest of Americas 1,161 1,161 -115 1,046 974 974 19 19 7
Total Americas 6,189 6,189 -571 5,617 5,140 5,140 20 20 9
Japan 613 613 19 632 628 628 -2 -2 1
Rest of APJ 1,553 1,553 -86 1,467 1,394 1,394 11 11 5
Total APJ 2,166 2,166 -67 2,099 2,022 2,022 7 7 4
Total revenue 14,594 14,594 -755 13,839 13,017 13,017 12 12 6

1 Constant-currency period-over-period changes are calculated by comparing the current year's non-IFRS constant-currency numbers with the non-IFRS number of the previous year's respective period.

Due to rounding, numbers may not add up precisely.

29/31

(K) Employees by Region and Functional Areas
Full-time equivalents 6/30/2022 6/30/2021
EMEA Americas APJ Total EMEA Americas APJ Total
Cloud and software 5,978 4,570 5,157 15,705 5,859 4,456 5,029 15,345
Services 8,304 5,516 5,864 19,684 8,264 5,627 6,102 19,993
Research and development 15,920 6,348 10,677 32,945 14,489 6,162 10,021 30,672
Sales and marketing 11,983 12,394 5,691 30,068 10,607 10,765 4,991 26,363
General and administration 3,423 2,271 1,252 6,945 3,452 2,184 1,187 6,823
Infrastructure 2,780 1,405 877 5,061 2,588 1,299 792 4,679
SAP Group (6/30) 48,388 32,504 29,518 110,409 45,261 30,493 28,123 103,876
Thereof acquisitions1 173 214 8 395 377 43 26 446
SAP Group (six months' end average) 47,842 32,354 29,456 109,652 44,741 30,332 28,021 103,094

1 Acquisitions closed between January 1 and June 30 of the respective year

30/31

Other Disclosures

(L) Financial Income, Net

In the second quarter of 2022, finance income mainly consisted of gains from disposals and fair value adjustments of equity securities totaling €146 million (Q2/2021: €985 million) and €463 million in the first half 2022 (HY1/2021: €1,515 million).

In the second quarter of 2022, finance costs were primarily impacted by losses from disposals and fair value adjustments of equity securities amounting to €225 million (Q2/2021: €67 million) and €543 million in the first half 2022 (HY1/2021: €228 million).

(M) Business Combinations

Taulia

On January 27, 2022, SAP announced its intent to acquire a majority stake of Taulia, a leading provider of working capital management solutions. The acquisition closed on March 9, 2022, following satisfaction of customary closing conditions and regulatory approvals; the operating results and assets and liabilities are reflected in our consolidated financial statements starting on that date. The acquisition is expected to further expand SAP's business network capabilities and strengthen SAP's solutions for the CFO office. Consideration transferred amounted to €0.7 billion.

In the second quarter Taulias contribution to revenue was approx. €16 million, to operating profit approx. -€12 million (IFRS) and approx. -€6 million (Non-IFRS).

For more information about Business Combinations, see the Notes to the 2022 Consolidated Half-Year Financial Statements Note (D.1.).

(N) Share Buyback

In the second quarter of 2022, we acquired 4.3 million treasury shares totaling €419 million and thus completed the 2022 share buyback program.

(O) Share Based Payments

Starting in 2022, most of the granted share units under the Move SAP plan will vest after a waiting period of six months and ratably thereafter for ten quarters. Under our previous policy, we serviced obligations arising from the plan with cash payments, but we have since decided to settle future share units predominantly in shares.

In the first six months of 2022, we granted 16.8 million (first six months of 2021: 11.2 million) share units. This includes 14.3 million (first six months of 2021: 0) share units which we intend to settle in shares. The dilutive effect of outstanding equity-settled share units is reflected in the calculation of earnings per share, diluted.

Obligations from outstanding share units granted before 2022 under the Move SAP plan will continue to be settled in cash and the settlement methods of SAP's other plans remain unchanged.

Under the Own SAP plan, employees can purchase, on a monthly basis, SAP shares without any required holding period. As part of SAP's 50th anniversary celebration SAP's contribution was doubled from 40% to 80% from January to March 2022. The number of shares purchased by our employees under this plan was 4.6 million in the first six months of 2022 (first six month of 2021: 2.9 million).

31/31

Disclaimer

SAP SE published this content on 26 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 July 2022 10:08:07 UTC.


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