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TBR 4Q10 SAP Initial Response

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Technology Business Research is a different kind of research company. Our bottoms-up approach provides a look at the technology industry unlike anything you’ve seen before. We analyze company …

Technology Business Research is a different kind of research company. Our bottoms-up approach provides a look at the technology industry unlike anything you’ve seen before. We analyze company performance in professional services, networking and mobility, computing and hardware, and software on a quarterly basis, leveraging our data to create industry benchmarks and landscapes that provide a business perspective on leaders and laggards and their business plans. We are experts in the business of technology.

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  • 1. SOFTWARE BUSINESS QUARTERLYSM4Q10 INITIAL RESPONSESAPFourth Calendar Quarter 2010Fourth Fiscal Quarter 2010 Ended December 31, 2010Publish Date: January 26, 2011Author: Jessica Breen (Jessica.Breen@tbri.com), SBQ AnalystContent Editor: Stuart Williams, SBQ Practice Manager TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .
  • 2. Executive Summary TBRSAP’s revamped business drove success in 2010, and its three-prongedstrategy positions the company for continued growth in 2011TBR Position: SAP 4Q10 PERFORMANCE VS. EXPECTATIONSSAP’s financial performance is the result of redirecting In $ Millions, except EPS Consensus Guidance Range Actualthe company’s focus toward innovation, customer Revenue $ 5,410 SSRS 9%-11% YTY $ 5,512satisfaction and new growth opportunities in cloud and Operating Income N/A 30% - 31% OM $ 733mobility. Non-IFRS EPS $ 0.88 N/A $ 0.78• SAP fully recovered from the effects of 2009’s Coming Quarter recession, as full-year growth reached 16.8% year-to- SAP 1Q11 GUIDANCE AND EXPECTATIONS year. New product releases, like SAP’s on-demand In $ Millions, except EPS TBR Estimate Consensus Guidance Range offering Business ByDesign, along with core application Revenue $ 4,145 $ 4,186 SSRS 12%-15% YTY offerings now being delivered via on-device, are Operating Income $ 1,103 N/A 30% - 31% OM driving net new growth for the company. Non-IFRS EPS N/A $ 1.08 N/A• SAP reported double-digit growth across all of its key segments, as the company’s go-to-market strategies in on-premise, on-demand and on-device gained traction. SAP Software Corporate Strategies• SAP realigned its Global Field Organization (GFO) to • Leverage customer adoption of cloud and mobile better capture growth opportunities across all solutions to drive platform sales geographies, especially in emerging regions. • Drive revenue growth and customer satisfaction• SAP made two tuck-in acquisitions during 4Q10 that through value engineering and value consumption will enable it to deliver stronger solutions in on- • Drive success in the midmarket by moving to volume readiness across the portfolio demand and on-device and increase its innovative • Expand ecosystem program to all partners to drive power. SAP acquired the IP of Cundus AG and the revenue growth and end-user satisfaction security portion of SECUDE’s business to expand its • Target growth through a three-pronged strategy: on- capabilities. premise, on-demand and on-device withReported euros are converted to U.S. dollars using the average quarterly exchange rate of 1.36 dollarsper euro. orchestration 2 SAP 4Q10 Initial Response | Software Business Quarterly ©2011 Technology Business Research, Inc.
  • 3. Executive Summary TBRSAP will sustain its growth trajectory across 2011 by capitalizingon mobile and cloud opportunitiesKey Developments • SAP reported record software revenue of 35% year-to-year in its fourth quarter, as it reached €1.5 billion in 4Q10. Restructuring efforts and go-to-market strategies to listen to customers and accelerate innovation led to record growth, which prompted SAP to report preliminary earnings.SAP’s focus on • Total revenue grew 27.2% year-to-year as SAP’s new on-device business led to net new revenue. Co-CEOcustomers and Bill McDermott stated that SAP believes it is no longer seeing pent-up demand from the recession; theinnovation paid core business is back with SAP’s on-premise offerings in ERP and CRM.off with double- • SAP reported that in the six months since the close of the acquisition, Sybase contributed threedigit software percentage points to full-year growth, and added €150 million to operating income, resulting in direct profit. TBR believes Sybase provides new opportunities for SAP to expand its applications business, via on-growth device and in-memory technology, and we expect further developments. • Business ByDesign, SAP’s on-demand offering, has over 100 customers after being available for six months. SAP reported that Business ByDesign is its fastest growing product to date. • As part of SAP’s ongoing restructuring efforts, the company realigned its Global Field Organization. TBR believes SAPs success in the marketplace led McDermott to use his influence to promote from the inside, rather than routine executive shuffle. These leadership changes mark more changes to come. • TBR believes the realignment will help SAP target growth across its core geographies, as well as acrossSAP realigned emerging regions.executive talent • Despite the strength of SAP’s business in 2010, SAP lost some of its executive talent to HP when formerto take CEO Leo Apotheker poached from SAP and Marge Breya left her position as EVP to become general manager of HP Software and Solutions. TBR believes SAP may see more departures as Apotheker offersadvantage of executive roles within the growing HP Software division.opportunities • Jose Duarte, former president of EMEA, will assume the position of president of Global Services, while Franck Cohen will take over as president of EMEA. Robert Enslin is now the president of Global Sales, and Robert Courteau is the president of SAP North America, reporting to Enslin. Sanjay Poonen was promoted to president of Global Solutions Go-to-Market, where he will report to co-CEOs Jim Hagemann Snabe and McDermott.3 SAP 4Q10 Initial Response | Software Business Quarterly ©2011 Technology Business Research, Inc.
  • 4. Executive Summary TBRPushing hard to close fourth quarter deals lifted revenue across allsegments Quarterly Segment Performance 4Q10 Growth Segment Key Changes & Drivers Trends to Monitor Revenue Y/Y Software revenue increased SAP will begin to deliver more significantly, as SAP saw a return to €1.5 mobile solutions from its core Software 34.7% its core business applications in billion applications portfolio to support ERP and CRM. the on-device strategy. Maintenance revenue continues to €1.7 Maintenance revenue streams will Maintenance grow as SAP adds net new 21.5% continue to increase following customers to its installed base. billion software growth. Business ByDesign led revenue TBR expects SAP to develop and €110 Subscription growth as SAP’s core on-demand 32.5% deliver additional on-demand million offering. solutions. Consulting revenue increased as a SAP’s on-demand business will €625 Consulting result of new on-premise and on- 20.2% result in more rapid consulting million demand deployments. services growth. Sybase’s messaging business led to €82 355.6% The messaging business will boost Other triple-digit growth on top of SAP’s million overall revenue growth in this existing “Other” revenue stream. (est.) segment until 2H11.Reported euros are converted to U.S. dollars using the average quarterly exchange rate of 1.36 dollars per euro.4 SAP 4Q10 Initial Response | Software Business Quarterly ©2011 Technology Business Research, Inc.
  • 5. Financial Model Strategy TBRThe €933 million litigation settlement with Oracle hobbled operatingmargin and will impact free cash flow for future investment Revenues • Software revenue grew 34.7% year-to-year, as SAP saw a SAP OPERATING METRICS TBR return in customer spending in its core applications. $8,000 • Support revenue increased 21.5% year-to-year to Gross Income $6,000 In $ Mi l lions €1.66 billion, as prior license revenue stimulated revenue $3,346 $3,962 SG&A growth. $4,000 $1,133 R&D • Subscription and software-related service revenue increased $2,000 $727 $1,309 32.5% year-to-year, as SAP strategically pursued an on- $1,539 $653 Operating Income $0 $733 demand business model to offer customers a choice between 4Q09 4Q10 on-demand and on-premise. SOURCE: SAP AG Margins • SAP’s gross margin rose 100 basis points year-to-year to 71.9% TBR SAP OPERATING RATIOS of revenue, as an increase in software and support lifted 100% margins. COS 80% 29.1% % of Revenue • Operating margin fell 1,880 basis points year-to-year as a result 18.9% 5.1% S&M 60% 28.1% of the Oracle litigation and the €933 million settlement. 19.4% G&A Backing out the settlement, operating margin increased 420 40% 15.4% 4.4% basis points year-to-year. 20% 32.2% 11.9% R&D • Net income was not greatly impacted by the litigation 13.4% 0% Operating Margin settlement due to a tax benefit; however, free cash flow was 4Q09 4Q10 weakened as SAP waits for the repeals hearing. SOURCE: SAP AG Expenses • SAP reported the Oracle settlement of €933 million under its operating expenses in 4Q10. • SAP added 592 new employees sequentially and 5,935 year-to-year, increasing expenses across all business functions. • Sales & marketing expenses rose 30.5% year-to-year to €787 million, or 19.4% of revenue. • G&A expenses increased 8.6% year-to-year to €177 million, or 4.4% of revenue. • R&D expenses rose 25.8% year-to-year to €481 million, or 11.9% of revenue.Reported euros are converted to U.S. dollars using the average quarterly exchange rate of 1.36 dollars per euro.5 SAP 4Q10 Initial Response | Software Business Quarterly ©2011 Technology Business Research, Inc.
  • 6. Go to Market and Product Strategies TBR SMB customers represent new business opportunities that SAP will tap with its mature ecosystem• TBR believes SAP is well-positioned to grow its application footprint within SMB accounts through the delivery of prepackaged software solutions that reduce the cost and complexity for growing businesses.• SAP delivered a preconfigured, end-to-end package for small and mid-sized businesses with SAP Business All-in- One. The solution provides SMB customers with a simplified user interface to eliminate the need for coding, as small businesses may not have the IT experience required.• SAP’s Business All-in-One solution was the collaboration of SAP and its partners and gives said partners more opportunities to target the SMB market through the delivery of Business All-in-One.• SAP Business All-in-One allows users to perform accounting, finance, purchasing and sales functions from one dashboard, providing all the core functions for running a business in one solution. Software Services Product Strategies Stack Offerings Services Strategies Software Expand Enterprise Support from seven to • Integrate modular SaaS functionality into Stack • SAP’s flagship Business Suite to increase nine years. flexibility in deployment and consumption. • Continue to roll out the combined BI • SAP Enhancement Packages reduce update Consult Enterprise & Standard Support offerings, and upgrade time to value. building support across key customers and • Shift from a platform focus to an industry- Apps Premium segments. focused portfolio to better address unique • Increase the number of certified SAP requirements. MW technicians available to partners. Base • Integrate BusinessObjects to add • Invest in packaged services to establish intelligence and performance Support global standard service components that management. DB will reduce risk and improve profitability. • Expand OnDemand offerings, including • Increase knowledge training and SAP ByDesign and BusinessObjects. OS Education accessibility of on-demand offerings. 6 SAP 4Q10 Initial Response | Software Business Quarterly ©2011 Technology Business Research, Inc.
  • 7. Go to Market and Product Strategies TBRSAP simplified in-house communication through its ongoingdevelopment of SAP Streamwork and EcoHub• TBR believes SAP’s upgraded Streamwork application enables customers to leverage strategic partnerships and develop applications more effectively for customers to collaborate more easily.• The SAP Streamwork application allows customers to relay company information via a live, streaming feed, allowing customers to receive time-sensitive information more quickly. The application also provides collaborative decision-making (CDM) technology, creating a think tank for decision-making.• SAP also relaunched EcoHub, which offers over 100 solutions for trial or purchase. Like SAP Streamwork, EcoHub enables collaboration and product review.• SAP’s EcoHub portal increases visibility for partners as customers have an easily accessible search engine tool to find specific solutions available through either SAP or its partners. Indirect Sales Strategies SAP 4Q10 Revenue Mix By Segment Direct Sales Strategies • Invest in formal ecosystem • Target large enterprise through development, cooperation and industry, compliance and business community building. Services 18% intelligence perspectives to • Support partners with development expand SAP’s footprint and wallet tools, templates, marketing $1.07 billion share. resources, development funds and • Partner with VARs and SIs to training/certification. License 40% maintain channel involvement, • Cooperate with partners on joint $2.20 billion even for direct-named accounts. sales engagements. • Sustain customer contact and • Leverage distributors to better 42% control of accounts by handling manage resellers. Maintenance custom coding and support $2.25 billion contract renewals directly. Reported euros are converted to U.S. dollars using the average quarterly exchange rate of 1.36 dollars per euro.7 SAP 4Q10 Initial Response | Software Business Quarterly ©2011 Technology Business Research, Inc.
  • 8. Resource Management Strategy TBRA new executive leadership team will continue driving rapid growth SAP employs 53,513 globally 11,741 employeesStrategy are located• SAP continues to increase headcount inorganically, in Asia Pacific through acquisitions, and organically, filling in positions to support its new businesses. Headcount 14,783 employees increased by 5,935 year-to-year. are located in the• SAP and Sybase continue to build out mobile and on- Americas demand offerings to target new growth opportunities. These offerings will continue to play a 26,989 employees crucial role in SAP’s competitive advantage. are located in EMEALeadership Changes• Patricia Hume, head of SAP Global Indirect Sales Acquisition Organization, has left the company. The position has been filled by Fritz Neumeyer, previously head of SAP • SAP will acquire security offerings from SECUDE as Ecosystem Operations. market competitors place greater pressure to host in- house security products. Technology acquired includes• Doug Scott joined SAP as VP of Sales. Scott previously security, identity and access-managed software worked as head of Global Enterprise CRM Business at solutions. Amdocs. • SAP plans to acquire the disclosure solutions• Marge Breya left her position as executive VP and management branch of Cundus, a German-based general manager at SAP Business Objects for a position company. The acquisition will give SAP intellectual as general manager of HP Software and Solutions. property rights and ownership of both Cundus• SAP realigned its GFO positions: Jose Duarte to Financial Statement Factory and InformationCollector president of Global Services, Franck Cohen to president finance solutions. The acquisition will equip SAP with of SAP EMEA, and Robert Enslin to president of Global financial software that meets customers needs as Sales, among others. global financial reporting standards grow more rigid.8 SAP 4Q10 Initial Response | Software Business Quarterly ©2011 Technology Business Research, Inc.
  • 9. Income Statement TBR SAP AG CONSOLIDATED STATEMENT OF INCOME TBRNote: Income Statement (i n € Thous a nds ; except s ha res i n mi l l i ons ) CALENDAR QUARTER 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Est.reported using IFRS Total Revenue Cost of Sales € € 3,189,000 928,000 € € 2,509,000 850,000 € € 2,894,000 912,000 € € 3,003,000 1,044,000 € 4,058,000 € 1,141,000 € 2,961,000 € 977,000 Gross Profit € 2,261,000 € 1,659,000 € 1,982,000 € 1,959,000 € 2,917,000 € 1,984,000 Sales and Marketing € 603,000 € 557,000 € 658,000 € 642,000 € 787,000 € 592,000 General and Administrative € 163,000 € 148,000 € 156,000 € 157,000 € 177,000 € 169,000 Research and Development € 491,000 € 393,000 € 397,000 € 453,000 € 481,000 € 435,000 Restructuring € 5,000 € - € 1,000 € (2,000) € 2,000 € - Other Expenses € (39,000) € 4,000 € (4,000) € (7,000) € (931,000) € - Operating Expense less COGS € 1,223,000 € 1,102,000 € 1,208,000 € 1,243,000 € 2,374,000 € 1,196,000 Total Operating Expenses € 2,151,000 € 1,952,000 € 2,120,000 € 2,287,000 € 3,515,000 € 2,173,000 Operating Income € 1,026,000 € 557,000 € 774,000 € 716,000 € 543,000 € 788,000 Investment Income € - € - € - € - € - € - EBITD € 995,000 € 521,000 € 676,000 € 689,000 € 451,000 € 742,000 Income Taxes € 276,000 € 134,000 € 185,000 € 188,000 € 14,000 € 208,000 Net Income € 719,000 € 387,000 € 491,000 € 501,000 € 437,000 € 534,000 Earnings per Share € 0.60 € 0.33 € 0.41 € 0.42 € 0.37 € 0.45 Shares Outstanding (in millions) € 1,188,000 € 1,172,727 € 1,188,000 € 1,188,000 € 1,188,000 € 1,188,000 AS A PERCENTAGE OF REVENUE Cost of Product 15.7% 15.9% 14.3% 17.1% 13.5% 15.0% Cost of Services 13.4% 18.0% 17.2% 32.5% 14.6% 18.0% Cost of Sales 29.1% 33.9% 31.5% 34.8% 28.1% 33.0% Gross Margin 70.9% 66.1% 68.5% 65.2% 71.9% 67.0% Sales and Marketing 18.9% 22.2% 22.7% 21.4% 19.4% 20.0% General and Administrative 5.1% 5.9% 5.4% 5.2% 4.4% 5.7% R&D 15.4% 15.7% 13.7% 15.1% 11.9% 14.7% Operating Margin 32.2% 22.2% 26.7% 23.8% 13.4% 26.6% Other, Net -0.3% -1.4% -3.0% -0.4% -1.2% -1.6% Investment Income 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% EBITD 31.2% 20.8% 23.4% 22.9% 11.1% 25.1% Income Taxes 8.7% 5.3% 6.4% 6.3% 0.3% 7.0% Net Margin 22.5% 15.4% 17.0% 16.7% 10.8% 18.0% YEAR-TO-YEAR CHANGE Total Revenue 4.7% 12.3% 19.7% 27.2% 18.0% Cost of Sales -6.3% 5.2% 23.1% 23.0% 14.9% Gross Profit 11.3% 16.0% 18.0% 29.0% 19.6% Sales and Marketing 8.6% 17.3% 24.4% 30.5% 6.3% General and Administrative 6.5% 26.8% 18.0% 8.6% 14.2% R&D 7.7% 6.4% 18.6% -2.0% 10.7% Operating Income 81.4% 20.7% 15.7% -47.1% 41.5% EBITD 81.5% 13.4% 22.6% -54.7% 42.4% Net Income -46.2% 26.9% 2.0% -12.8% 22.2% SOURCE: TBR ESTIMATES AND SAP.9 SAP 4Q10 Initial Response | Software Business Quarterly ©2011 Technology Business Research, Inc.
  • 10. Income Statement TBR SAP AG CONSOLIDATED STATEMENT OF INCOME TBRNote: Income Statement (i n USD Thous a nds ) Exchange Rate ($ per €) for € to $reported using IFRS Conversion 1.48 1.38 1.27 1.29 1.36 1.40 CALENDAR QUARTER 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Est. Total Revenue $ 4,720,000 $ 3,470,000 $ 3,684,000 $ 3,878,000 $ 5,512,000 $ 4,145,000 Cost of Sales 1,373,000 1,176,000 1,161,000 1,348,000 1,550,000 1,368,000 Gross Profit $ 3,346,000 $ 2,294,000 $ 2,523,000 $ 2,530,000 $ 3,962,000 $ 2,778,000 Sales and Marketing 892,000 770,000 838,000 829,000 1,069,000 829,000 General and Administrative 241,000 205,000 199,000 203,000 240,000 237,000 Research and Development 727,000 543,000 505,000 585,000 653,000 609,000 Other Expenses (58,000) 6,000 (5,000) (9,000) (1,265,000) - Operating Income $ 1,539,000 $ 770,000 $ 985,000 $ 924,000 $ 3,263,000 $ 1,103,000 Other, Net (16,300) (49,800) (109,500) (16,800) (67,900) (64,400) EBITD $ 1,473,000 $ 720,000 $ 861,000 $ 890,000 $ 613,000 $ 1,039,000 Income Taxes 408,000 185,000 236,000 243,000 19,000 291,000 Net Income $ 1,064,000 $ 535,000 $ 625,000 $ 647,000 $ 594,000 $ 748,000 Earnings per Share $ 0.89 $ 0.46 $ 0.52 $ 0.54 $ 0.50 $ 0.63 Shares Outstanding 1,188,000 1,172,727 1,188,000 1,188,000 1,188,000 1,188,000 AS A PERCENTAGE OF REVENUE Cost of Sales 29.1% 33.9% 31.5% 34.8% 28.1% 33.0% Gross Margin 70.9% 66.1% 68.5% 65.2% 71.9% 67.0% Sales and Marketing 18.9% 22.2% 22.7% 21.4% 19.4% 20.0% General and Administrative 5.1% 5.9% 5.4% 5.2% 4.4% 5.7% R&D 15.4% 15.6% 13.7% 15.1% 11.8% 14.7% Operating Margin 32.6% 22.2% 26.7% 23.8% 59.2% 26.6% Other, Net -0.3% -1.4% -3.0% -0.4% -1.2% -1.6% EBITD 31.2% 20.7% 23.4% 22.9% 11.1% 25.1% Income Taxes 8.6% 5.3% 6.4% 6.3% 0.3% 7.0% Net Margin 22.5% 15.4% 17.0% 16.7% 10.8% 18.0% YEAR-TO-YEAR CHANGE Total Revenue 10.5% 9.2% 8.1% 16.8% 19.5% Cost of Sales -1.1% 2.2% 11.1% 12.9% 16.3% Gross Profit 17.5% 12.7% 6.6% 18.4% 21.1% Sales and Marketing 14.6% 14.0% 12.3% 19.8% 7.7% General and Administrative 12.6% 23.6% 6.8% -0.4% 15.6% R&D 13.6% 3.3% 7.1% -10.2% 12.2% Operating Income 24.2% 14.3% 2.7% 112.0% 43.2% EBITD 91.5% 10.2% 10.7% -58.4% 44.3% Net Income 108.2% 12.0% 1.3% -44.2% 39.8% SOURCE: TBR ESTIMATES AND SAP.10 SAP 4Q10 Initial Response | Software Business Quarterly ©2011 Technology Business Research, Inc.
  • 11. Balance Sheet TBR SAP AG CONSOLIDATED BALANCE SHEETS (i n € Thous a nds ) TBR Note: Balance Sheet CALENDAR QUARTER ASSETS 4Q09 1Q10 2Q10 3Q10 4Q10 Current Assets reported using IFRS Cash and Equivalents € 1,884,000 € 2,413,000 € 3,605,000 € 2,828,000 € 3,518,000 Other Financial Assets € 486,000 € 683,000 € 574,000 € 258,000 € 158,000 Trade and Other Receivables € 2,546,000 € 3,555,000 € 2,768,000 € 2,382,000 € 3,101,000 Other non-financial Assets € 147,000 € 168,000 € 217,000 € 223,000 € 180,000 Tax Assets € 192,000 € 124,000 € 202,000 € 311,000 € 186,000 Total Current Assets € 5,255,000 € 6,943,000 € 7,366,000 € 6,002,000 € 7,143,000 Goodwill € 4,994,000 € 5,052,000 € 5,136,000 € 8,285,000 € 8,378,000 Intangible Assets € 894,000 € 849,000 € 829,000 € 2,400,000 € 2,376,000 Property, Plant, Equip. (Net of Dep.) € 1,371,000 € 1,393,000 € 1,415,000 € 1,415,000 € 1,450,000 Other assets € 284,000 € 307,000 € 337,000 € 374,000 € 404,000 Trade and Other Receivables € 52,000 € 58,000 € 66,000 € 68,000 € 78,000 Tax Assets € 91,000 € 110,000 € 125,000 € 120,000 € 123,000 Deferred Tax Assets € 398,000 € 447,000 € 364,000 € 391,000 € 735,000 Total non-current Assets € 8,119,000 € 8,250,000 € 8,306,000 € 13,084,000 € 13,575,000 Total Assets € 13,374,000 € 15,193,000 € 15,672,000 € 19,086,000 € 20,718,000 LIABILITIES AND EQUITY Current Liabilities Trade and other Payables € 638,000 € 708,000 € 698,000 € 766,000 € 908,000 Tax Liabilities € 125,000 € 74,000 € 3,000 € 136,000 € 160,000 Bank Loans € 4,000 € 7,000 € - € - € - Other financial Liabilities € 142,000 € 258,000 € - € - € - Financial Liabilities € 146,000 € 265,000 € 219,000 € 238,000 € 142,000 Provisions € 332,000 € 345,000 € 354,000 € 389,000 € 1,285,000 Deferred Income € 598,000 € 2,248,000 € 1,919,000 € 1,334,000 € 911,000 Total Current Liabilities € 3,416,000 € 4,752,000 € 4,183,000 € 4,050,000 € 5,133,000 Trade and other Payables € 35,000 € 33,000 € 34,000 € 54,000 € 50,000 Tax Liabilities € 239,000 € 247,000 € 259,000 € 359,000 € 371,000 Bank Loans € 699,000 € 699,000 € - € - € - Other financial Liabilities € 30,000 € 46,000 € - € - € - Financial Liabilities € 729,000 € 745,000 € 1,764,000 € 4,422,000 € 4,449,000 Provisions € 198,000 € 206,000 € 224,000 € 270,000 € 291,000 Deferred Tax Liabilities € 190,000 € 151,000 € 137,000 € 605,000 € 576,000 Deferred Income € 64,000 € 76,000 € 88,000 € 94,000 € 63,000 Total non-current Liabilities € 1,467,000 € 1,470,000 € 2,518,000 € 5,825,000 € 5,811,000 Total Liabilities € 4,883,000 € 6,222,000 € 6,701,000 € 9,875,000 € 10,944,000 Total Shareholders Equity € 8,491,000 € 8,971,000 € 8,971,000 € 9,194,000 € 9,757,000 Noncontrolling Interests € 14,000 € 14,000 € 15,000 € 17,000 € 17,000 Total Liabilities and Equity € 13,374,000 € 15,193,000 € 15,672,000 € 19,086,000 € 20,718,000 FINANCIAL RATIOS Turns on Inventory 71.90 127.50 86.10 71.40 68.80 Fixed Asset Turnover 9.23 7.27 8.34 8.59 11.45 Days Cash Outstanding 66.89 111.06 129.96 92.49 81.53 Total Asset Turnover 0.93 0.70 0.75 0.69 0.82 Debt/Asset Ratio 0.37 0.41 0.43 0.52 0.53 Current Ratio 1.54 1.46 0.57 0.67 0.72 Return on Assets 12.4% 13.6% 14.0% 13.6% 10.8% Return on Equity 23.1% 24.8% 24.6% 24.2% 20.0% Average Annual Revenue per Employee € 224,263 € 226,522 € 231,149 € 219,100 € 232,915 Employee Count 47,578 47,598 48,021 52,921 53,513 SOURCE: SAP.11 SAP 4Q10 Initial Response | Software Business Quarterly ©2011 Technology Business Research, Inc.
  • 12. Balance Sheet TBR SAP AG CONSOLIDATED BALANCE SHEETS TBR (i n € Thous a nds ) Note: Balance Sheet Excha nge Ra te ($ per €) for € to $ Convers i on CALENDAR QUARTER 1.48 4Q09 1.38 1Q10 1.27 2Q10 1.29 3Q10 1.36 4Q10 ASSETS reported using IFRS Current As s ets Cash and Equivalents $ 2,788,000 $ 3,337,000 $ 4,589,000 $ 3,652,000 $ 4,778,000 Other Financial Assets $ 719,000 $ 945,000 $ 731,000 $ 333,000 $ 215,000 Trade and Other Receivables $ 3,768,000 $ 4,916,000 $ 3,524,000 $ 3,076,000 $ 4,212,000 Other non-financial Assets $ 218,000 $ 232,000 $ 276,000 $ 288,000 $ 244,000 Tax Assets $ 284,000 $ 171,000 $ 257,000 $ 402,000 $ 253,000 Total Current Assets $ 7,777,000 $ 9,601,000 $ 9,377,000 $ 7,751,000 $ 9,702,000 Goodwill $ 7,391,000 $ 6,986,000 $ 6,538,000 $ 10,699,000 $ 11,380,000 Property, Plant, Equip. (Net of Dep.) $ 2,029,000 $ 1,926,000 $ 1,801,000 $ 1,827,000 $ 1,969,000 Other assets $ 420,000 $ 425,000 $ 429,000 $ 483,000 $ 549,000 Trade and Other Receivables $ 77,000 $ 80,000 $ 84,000 $ 88,000 $ 106,000 Other non-financial Assets $ 52,000 $ 47,000 $ 43,000 $ 40,000 $ 42,000 Tax Assets $ 135,000 $ 152,000 $ 159,000 $ 155,000 $ 167,000 Deferred Tax Assets $ 589,000 $ 618,000 $ 463,000 $ 505,000 $ 998,000 Total non-current Assets $ 12,016,000 $ 11,409,000 $ 10,574,000 $ 16,896,000 $ 18,439,000 Total Assets $ 19,794,000 $ 21,010,000 $ 19,950,000 $ 24,647,000 $ 28,141,000 LIABILITIES AND EQUITY Current Liabilities Trade and other Payables $ 944,000 $ 979,000 $ 889,000 $ 989,000 $ 1,233,000 Tax Liabilities $ 185,000 $ 102,000 $ 4,000 $ 176,000 $ 217,000 Bank Loans $ 6,000 $ 10,000 $ - $ - $ - Other financial Liabilities $ 210,000 $ 357,000 $ - $ - $ - Financial Liabilities $ 216,000 $ 366,000 $ 279,000 $ 307,000 $ 193,000 Other non-financial liabilities $ 2,334,000 $ 1,538,000 $ 1,260,000 $ 1,533,000 $ 2,346,000 Provisions $ 491,000 $ 477,000 $ 451,000 $ 502,000 $ 1,745,000 Deferred Income $ 885,000 $ 3,109,000 $ 2,443,000 $ 1,723,000 $ 1,237,000 Total Current Liabilities $ 5,056,000 $ 6,572,000 $ 5,325,000 $ 5,230,000 $ 6,972,000 Trade and other Payables $ 52,000 $ 46,000 $ 43,000 $ 70,000 $ 68,000 Tax Liabiliities $ 354,000 $ 342,000 $ 330,000 $ 464,000 $ 504,000 Bank Loans $ 1,035,000 $ 967,000 $ - $ - $ - Other financial Liabilities $ 44,000 $ 64,000 $ - $ - $ - Financial Liabilities $ 1,079,000 $ 1,030,000 $ 2,246,000 $ 5,710,000 $ 6,043,000 Other non-financial liabilities $ 18,000 $ 17,000 $ 15,000 $ 27,000 $ 15,000 Provisions $ 293,000 $ 285,000 $ 285,000 $ 349,000 $ 395,000 Deferred Tax Liabilities $ 281,000 $ 209,000 $ 174,000 $ 781,000 $ 782,000 Deferred Income $ 95,000 $ 105,000 $ 112,000 $ 121,000 $ 86,000 Total non-current Liabilities $ 2,171,000 $ 2,033,000 $ 3,205,000 $ 7,522,000 $ 7,893,000 Total Liabilities $ 7,227,000 $ 8,604,000 $ 8,530,000 $ 12,752,000 $ 14,865,000 Total Shareholders Equity $ 12,567,000 $ 12,406,000 $ 11,420,000 $ 11,873,000 $ 13,253,000 Noncontrolling Interests $ 21,000 $ 19,000 $ 19,000 $ 22,000 $ 23,000 Total Liabilities and Equity $ 19,794,000 $ 21,010,000 $ 19,950,000 $ 24,647,000 $ 28,141,000 FINANCIAL RATIOS Days Sales Outstanding 71.85 127.50 86.09 71.39 68.77 Turns on Inventory 14.05 11.12 13.22 7.47 6.97 Fixed Asset Turnover 7.30 4.96 5.34 5.29 6.78 Days Cash Outstanding 66.87 111.06 129.97 92.48 81.53 Total Asset Turnover 0.95 0.69 0.73 0.73 0.94 Debt/Asset Ratio 0.37 0.41 0.43 0.52 0.53 Current Ratio 0.65 0.68 0.57 0.67 0.72 Return on Assets 15.9% 13.9% 14.3% 13.6% 10.6% Return on Equity 20.4% 25.3% 25.1% 24.2% 19.5% Average Annual Revenue per Employee $311,510 $318,312 $321,942 $297,651 $309,159 Employee Count 47,578 47,598 48,021 52,921 53,513 SOURCE: SAP.12 SAP 4Q10 Initial Response | Software Business Quarterly ©2011 Technology Business Research, Inc.
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