CEO Bill McDermott and CFO Luka Mucic comments :
“SAP is enabling companies to Run Simple,” said SAP CEO Bill McDermott. “Whether it’s optimizing the customer experience, collaborating with partners across a digital network, engaging your workforce or managing your core operations with S/4HANA – we are helping our customers go digital. The HANA database and platform are the foundation for a ‘live system strategy’ enabling companies to capture the immense Internet of Things opportunity. This new architecture defeats complexity and radically increases speed so businesses can execute their mission in real-time. Our strong Q3 results are the latest validation of our strategy.”
“What I am particularly pleased about is that our operating profit grew even faster than our revenue. This reflects the positive impact of our business transformation and our continued focus on operating excellence across all of our lines of business, as shown in particular by an almost 9 percentage point year-over-year increase in our cloud gross margin,” said SAP CFO Luka Mucic. “In addition, we continued to increase our operating and free cash flow. In fact, we exceeded €3.2 billion for the first nine months in operating cash flow, while free cash flow marked an 8% increase year-over-year.”
SAP again delivered strong growth in the cloud, outpacing most pure cloud competitors even without the contribution from the Concur acquisition. Third quarter non-IFRS cloud subscriptions and support revenue grew 116% year-over-year (90% at constant currencies) to €600 million. New cloud bookings, the key measure for SAP’s sales success in the cloud, increased 102% in the third quarter to €216 million.
The Company had very strong top and bottom line growth in the third quarter. Non-IFRS cloud and software revenue increased 19% (12% at constant currencies) to €4.12 billion. Non-IFRS operating profit increased 19% (15% at constant currencies) to €1.62 billion.
Business Outlook
The Company reiterates the following full year 2015 outlook: Based on the strong momentum in SAP’s cloud business the Company expects full-year 2015 non-IFRS cloud subscriptions and support revenue to be in a range of €1.95 - €2.05 billion at constant currencies (2014: €1.10 billion). The upper end of this range represents a growth rate of 86% at constant currencies. Concur and Fieldglass are expected to contribute approximately 50 percentage points to this growth.
The Company expects full year 2015 non-IFRS cloud and software revenue to increase by 8% - 10% at constant currencies (2014: €14.33 billion).
The Company expects full-year 2015 non-IFRS operating profit to be in a range of €5.6 billion - €5.9 billion at constant currencies (2014: €5.64 billion).
While the Company's full-year 2015 business outlook is at constant currencies, actual currency reported figures are expected to continue to be impacted by currency exchange rate fluctuations. If exchange rates remain at the September 2015 average rates for the rest of the year, the Company expects its non-IFRS cloud and software revenue growth rate as well as its non-IFRS operating profit growth rate to experience a currency benefit in a range of 7 to 9 percentage points for the full-year 2015 (2 to 4 percentage points for the fourth quarter 2015).
source : SAP - SAP Investor Relations, Walldorf (Germany), October 20, 2015
