SAP Hits or Exceeds All Raised Outlook Metrics - Targets More Than 3x Cloud Revenue by 2023
- Cloud Subscription and Support Revenue Up 32% (IFRS) and Up 38% (Non-IFRS at Constant Currencies) in FY 2018
- Cloud Backlog Increased 30%, Exceeding €10 Billion at Year-End
- Cloud and Software Revenue Up 5% (IFRS) and Up 10% (Non-IFRS at Constant Currencies) in FY 2018
- Cloud and Software Order Entry Exceeds €10 Billion, Up 14% at Constant Currencies in FY 2018
- Operating Profit Up 17% (IFRS) and Up 10% (Non-IFRS at Constant Currencies) in FY 2018
- Guiding for Up to 39% Non-IFRS Cloud Subscription and Support Revenue Growth and Up to 10% Non-IFRS Cloud and Software Revenue Growth in 2019 at Constant Currencies
- Guiding for Up to 11.5% Non-IFRS Operating Profit Growth in 2019 at Constant Currencies – Faster Than Total Revenue Growth
- Targeting More Than €35 Billion in Total Revenue by 2023
Full Year 2018 Highlights:
Even after multiple guidance raises during the year SAP met or exceeded all of its 2018 outlook metrics.
For the full year new cloud bookings were €1.81 billion, up 25% (up 28% at constant currencies). Cloud subscriptions and support backlog increased 30%, reaching €10 billion at year-end. Cloud subscriptions and support revenue was €4.99 billion (IFRS) or €5.21 billion (non-IFRS at constant currencies), achieving the full year outlook (€5.15 to €5.25 billion non-IFRS at constant currencies). Software revenue decreased 5 % year over year to €4.65 billion (IFRS), flat year over year (non-IFRS at constant currencies). New cloud and software license order entry exceeded €10 billion and grew by 14% at constant currencies year over year in the full year. Cloud and software revenue was €20.62 billion (IFRS) or €21.58 billion (non-IFRS at constant currencies), exceeding the full year outlook (€21.15 to €21.35 billion non-IFRS at constant currencies). Total revenue was €24.71 billion (IFRS) or €25.96 billion (non-IFRS at constant currencies), exceeding the full year outlook (€25.20 to €25.50 billion non-IFRS at constant currencies).
SAP’s rapidly expanding cloud business together with solid growth in support revenue continued to drive the share of more predictable revenue. The total of non-IFRS cloud subscriptions & support revenue and non-IFRS software support revenue was 65% of non-IFRS total revenue for the full year 2018, up 2 percentage points.
For the full year, operating profit was €5.71 billion (IFRS) or €7.48 billion (non-IFRS at constant currencies), achieving the full year outlook (€7.425 to €7.525 billion non-IFRS at constant currencies). Earnings per share increased 2% to €3.42 (IFRS) and decreased 2% to €4.35 (non-IFRS).
Operating cash flow for the full year was €4.30 billion, a decrease of 15% year over year. Free cash flow decreased 25% year over year to €2.84 billion. At year end, net liquidity was –€2.49 billion.
Fourth Quarter 2018 highlights
In the fourth quarter, new cloud bookings were €736 million, up 25% (23% at constant currencies). Cloud subscriptions and support revenue grew 41% year over year to €1.41 billion (IFRS), up 40% (non-IFRS at constant currencies). Software revenue grew 1% year over year to €2.09 billion (IFRS), up 8% (non-IFRS at constant currencies). New cloud and software license order entry grew 18% at constant currencies year over year. Cloud and software revenue grew 9% year over year to €6.32 billion (IFRS), up 11% (non-IFRS at constant currencies). Total revenue grew 9% year over year to €7.43 billion (IFRS), up 13% (non-IFRS at constant currencies).
In the fourth quarter operating profit increased by 22% year over year to €2.40 billion (IFRS), up 8% (non-IFRS at constant currencies). Earnings per share decreased 8% to €1.41 (IFRS) and decreased 15% to €1.51 (non-IFRS).
SAP S/4HANA
SAP S/4HANA is at the core of the Intelligent Enterprise. With S/4HANA, customers automate more and more of their business processes enabling employees to focus on higher-value tasks. It detects patterns, predicts outcomes and suggests actions empowering companies across all industries to reinvent their business models for the digital economy.
S/4HANA adoption grew to approximately 10,500 customers, up 33% year over year. In the fourth quarter, more than 40% of the additional S/4HANA customers were net new.
Business Outlook 2019
Reflecting SAP’s strong cloud and overall business momentum as well as the Qualtrics acquisition with a January 23rd, 2019 closing date, the Company is providing the following 2019 outlook:
- Non-IFRS cloud subscriptions and support revenue is expected to be in a range of €6.7 − €7.0 billion at constant currencies (2018: €5.03 billion), up 33% – 39% at constant currencies.
- Non-IFRS cloud and software revenue is expected to be in a range of €22.4 – €22.7 billion at constant currencies (2018: €20.66 billion), up 8.5% – 10% at constant currencies.
- Non-IFRS operating profit is expected to be in a range of €7.7 – €8.0 billion at constant currencies (2018: €7.16 billion), up 7.5% – 11.5% at constant currencies.
- In addition, SAP expects total revenues to increase strongly, at a rate slightly lower than operating profit.
- The comparative numbers for 2018 do not include Qualtrics. Callidus revenue and profits are included in the comparative numbers from the April 5th, 2018 acquisition close date.
- While SAP’s full-year 2019 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.
