SAP has announced its preliminary financial results for the fourth quarter and full year ended 31 December 2020, reporting a record year for cash flow in every single quarter and the full year. All 2020 figures listed are approximate due to the preliminary nature of the announcement.
Q4 results show SAP’s business performance sequentially improved even as the COVID-19 crisis persisted and lockdowns were reintroduced in many regions. Current cloud backlog was up 7 percent year on year to €7.15bn, with cloud revenue up 8 percent to €2.04bn (IFRS) and 7 percent to €2.04bn (non-IFRS).
IFRS operating profit and operating margin were positively impacted in the fourth quarter by lower share-based compensation expenses compared to the prior year period. Operating profit increased by 26 percent year on year to €2.65bn (IFRS) and was down 3 percent to €2.77bn (non-IFRS), while operating margin increased by 9.1 percentage points year over year to 35.2 percent (IFRS) and increased 1.4 percentage points year over year to 36.7 percent (non-IFRS).
For the full year, SAP’s IFRS operating profit and operating margin were beneficially impacted by significantly lower restructuring charges as well as lower share-based compensation expenses compared to 2019. Operating profit increased by 48 percent year on year to €6.62bn (IFRS) and was up 1 percent to €8.28bn (non-IFRS), while operating margin increased 8.0 percentage points year over year to 24.2 percent (IFRS) and increased 0.6 percentage points year over year to 30.3 percent (non-IFRS) for the full year.
Cloud revenue grew 17 percent year on year to €8.08bn (IFRS) and 15 percent to €8.09bn (non-IFRS) for the full year, while software licenses revenue was down 20 percent year on year to €3.64bn. Operating cash flow is expected to stand at around €7bn, approximately doubling year on year and significantly above the raised outlook of approximately €6bn.
Christian Klein, CEO of SAP, said: “The world’s leading companies are turning to SAP to become intelligent enterprises. We are reinventing how businesses run by accelerating our customers’ transformation in the cloud. Our strong finish to the year and the upcoming launch of our new holistic business transformation offering position us well to meet our new outlook targets.”