SAP Announces Fourth Quarter and Full Year Results 2013

Successful Transition to the Cloud Outgrowing the Market and Expanding Operating Margin in 2013;

SAP Accelerating Customer-Driven Transition to the Cloud – Aiming for €3.0 - €3.5 Billion Cloud Revenue in 2017

DUBAI, United Arab Emirates – January 23, 2013 – Fast Growing Cloud Business and Solid Core Drive 4th Consecutive Year of Double-Digit Growth: Full Year 2013 Non-IFRS Software and Software-Related Service Revenue Increased 11% at Constant Currencies (6% at Actual Currencies to €14.03 Billion)

Cloud Subscription and Support Backlog Increased 50% to approximately €1.2 billion as of December 31, 2013, Non-IFRS Deferred Cloud Subscription and Support Revenue Increased 25% to €447 Million as of December 31, 2013

SAP HANA Success Continued in 2013: Full Year 2013 HANA Software Revenue Increased 69% at Constant Currencies to €664 Million (61% at Actual Currencies to €633 Million), SAP HANA Becomes the Real-Time Platform for the Industry

Full Year 2013 Non-IFRS Operating Profit Increased 13% at Constant Currencies to €5.90 Billion, Resulting in Non-IFRS Operating Margin Expansion of 150 Basis Points at Constant Currencies to 33.5%

Full Year 2013 Non-IFRS Earnings Per Share Increased 11% to €3.37

Introducing 2017 Targets Reflecting Customer-Driven Shift to Cloud: At least €22 Billion in Total Revenue, €3.0 - €3.5 Billion Total Revenue from the Cloud Business and 35% Non-IFRS Operating Margin by 2017

SAP AG (NYSE: SAP) has announced its financial results for the fourth quarter and full year ended December 31, 2013.

BUSINESS HIGHLIGHTS IN THE FOURTH QUARTER AND FULL YEAR 2013
SAP delivered strong revenue growth in 2013. Full year non-IFRS software and cloud subscription revenue increased 11% at constant currencies (6% at actual currencies to €5.28 billion). Non-IFRS software and software-related service revenue grew 11% at constant currencies (6% at actual currencies to €14.03 billion). Non-IFRS total revenue grew 8% at constant currencies (4% at actual currencies to €16.90 billion).

“We are proud of having delivered another year of double digit growth, outperforming the market and expanding our margin, while at the same time investing in innovation and the cloud,” said Co-CEOs Bill McDermott and Jim Hagemann Snabe. “Based on our strong global momentum from 2013 we will accelerate the transition to the cloud by offering customers choice. With all solutions moving to the Cloud powered by our real time platform HANA, we will simplify for our customers, extend our lead and drive growth that is more predictable and profitable for the long term.”

“We finished 2013 with a strong fourth quarter. We significantly expanded our Non-IFRS operating margin in the fourth quarter, leading to a full-year Non-IFRS operating margin expansion of 150 basis points at constant currencies and 11% growth in Non-IFRS EPS for the full year 2013,” said Werner Brandt, CFO of SAP. “This was driven by operational excellence despite the margin impact from acquisitions and our momentum in the cloud.”

SAP's fast-growing cloud business demonstrates the Company's leadership in the cloud. Non-IFRS cloud subscription and support revenue was €787 million at constant currencies, which exceeded the Company's full year 2013 guidance of €750 million (2012: €343 million).

Non-IFRS deferred cloud subscription and support revenue(1) was €447 million as of December 31, 2013, a year-over-year increase of 25%. The Company's cloud subscription and support backlog(2) as of December 31, 2013 was approximately €1.2 billion, a year-over-year increase of 50%. SAP's annual cloud revenue run rate now exceeds €1.06 billion(3). SAP's total cloud portfolio applications subscribers now exceed 35 million. The trailing twelve month Ariba network spend volume(4) now exceeds $0.5 trillion. Today Ariba is the world's largest Web-based business trading community with 1.4 million connected companies.

SAP HANA, the platform for real-time business applications, was a major growth engine in 2013. The Company has now over 3,000 HANA customers. Full year 2013 HANA software revenue increased 69% at constant currencies to €664 million (61% at actual currencies to €633 million). SAP Business Suite powered by SAP HANA is the best-in-class platform for high-performance applications. With 800 customers at the end of 2013, demand for SAP Business Suite powered by HANA has exceeded SAP's own expectations in the short period since its launch in May 2013.

 Fourth Quarter 2013 Regional Revenue
The EMEA region saw high single-digit growth with non-IFRS software and cloud subscription revenue increasing 9% at constant currencies. This was the result of high double-digit growth in cloud subscription and support revenue in this region and strong double-digit software revenue growth at constant currencies in Germany, France, Russia, Middle East and Africa. The Americas region grew single-digit in the fourth quarter in non-IFRS software and cloud subscription revenue at constant currencies. This was the result of the transition to the cloud and a tough year-over-year comparison in software revenue. Non-IFRS software and cloud subscription revenue in the Asia Pacific Japan (APJ) region continued on its path of double-digit growth at constant currencies, driven by a strong performance in China.

Full Year 2013 Regional Revenue
The EMEA region saw high-single digit growth with non-IFRS software and cloud subscription revenue at constant currencies which is an impressive result in light of continued market uncertainty seen throughout the year. The Americas region delivered a very strong full year performance in non-IFRS software and cloud subscription revenue with 15% growth at constant currencies while rapidly shifting to the Cloud. Non-IFRS software and cloud subscriptions revenue in the APJ region increased by 3% at constant currencies in the full year 2013 after ending the year with a strong fourth quarter.

(1) Beginning in Q1 2013, SAP discloses non-IFRS deferred cloud subscription and support revenue, which is a subset of the total, non-IFRS deferred revenue number reported on the balance sheet. The opening balance for Ariba deferred cloud subscription and support revenue at October 1st, 2012 was €118 million (Non-IFRS) and €53 million (IFRS).
(2) Cloud subscription and support backlog represents expected future cloud subscription and support revenue that is contracted but not yet invoiced and thus not recorded in deferred revenue.
(3) The annual revenue run rate is the fourth quarter 2013 cloud division revenue of €266 million multiplied by 4.
(4) Network spend volume is the total value of purchase orders transacted on the Ariba Network in the trailing 12 months.