Topline Exceeds Full Year Outlook Operating Profit and Free Cash Flow Up Strongly

SAP’s business performance sequentially improved in the fourth quarter even as the COVID-19 crisis persisted and lockdowns were reintroduced in many regions. Cloud revenue in the fourth quarter continued to be impacted by lower pay-as-you-go transactional revenue, mainly Concur business travel related. However, continued high demand for e-commerce, Business Technology Platform, and Qualtrics solutions along with several competitive wins – particularly for SuccessFactors Human Experience Management – produced a strong finish to the year for SAP’s cloud business. SAP also saw strong early take up of its new holistic business transformation offering “RISE with SAP” among pilot customers, contributing to the cloud performance in the fourth quarter. Both North America and Europe experienced a better-than-expected performance in cloud order entry as well as software licenses revenue reflecting strong demand for SAP’s digital supply chain solutions in particular. In addition, SAP had significant competitive wins in ERP.

Recent Highlights:
• SAP launched “RISE with SAP” on January 27, 2021, a simplified pathway for customers to transition their mission critical systems to the cloud and transform their business, delivered as a holistic commercial package with one subscription fee.
• Successful IPO of Qualtrics on January 28, 2021, maximizing Qualtrics’ opportunity to expand their business and build the best talent while SAP retains majority ownership. At IPO, the company was valued at almost $18 billion, more than double the original acquisition price. Qualtrics shares moved even higher on the first day of trading, ending the day with a gain of just over +50%.
• Completed the acquisition of Emarsys on November 4th, 2020, a leading omnichannel customer engagement platform provider.
• Deepened business process intelligence capabilities with the acquisition of Signavio.
• Expanded Microsoft relationship around Teams integration, Industry 4.0 and simplification of SAP ERP migration to the cloud on Azure.
• Announced a new partnership with Europe’s leading industrial companies, car manufacturers and their suppliers to build the automotive network of the future.

Throughout the COVID-19 crisis, SAP continues to serve its customers effectively with an embedded virtual sales and remote implementation strategy. The company retains a disciplined approach to hiring and discretionary spend while capturing natural savings e. g. from lower travel, facility-related costs and virtual events. In combination with the strong topline performance these actions drove higher operating profit and operating margin (both in IFRS and non-IFRS at constant currencies) despite the challenging macro environment.

SAP also continues to be a key technology partner in helping customers and the broader community address COVID-19 challenges. Initiatives include:
• Launched a vaccine collaboration hub (VCH) for Life Sciences organizations to better manage vaccine supply distribution, and to help governments and their industry partners coordinate and successfully deploy mass vaccination programs.
• The "Corona Warn App", SAP’s contact track and trace app, has now been downloaded more than 25 million times helping to curb the virus spread.
• Co-innovation with Parkland Health & Hospital System to tackle urgent needs related to COVID-19: a command center dashboard to make essential decisions; a critical inventory tracker to help ensure real-time accurate tracking and availability of critical inventory such as ventilators; an online, self-service, multilingual symptom checker chatbot enabling patients to go through an initial COVID-19 screening thereby reducing load on its overwhelmed call center and reducing face-to-face interactions to improve safety.
• Partnered with Mercy Technology Services, the IT division of St. Louis-based health system Mercy, to harness the power of data analytics to produce real-world evidence (RWE) for more informed patient care.

More information is attached.