SAP raises targets for 2020

For the full year 2016, cloud and software revenue grew seven percent (IFRS) and eight percent (non-IFRS, constant currency), respectively, above the midpoint of the full-year target raised in October (constant currency growth, non-IFRS, of 6.5 percent to 8.5 percent).

Cloud subscription and support revenue was €2.99 billion (IFRS) and €3.01 billion (non-IFRS, constant currency), meeting the full-year target raised in October (€3.00 billion to €3.05 billion, non-IFRS, constant currency).

New cloud bookings, the key indicator of sales success in SAP's cloud business, rose 31 percent to €1.15 billion for the full year.

The backlog of cloud subscriptions and support grew by 47 percent to reach 5.4 billion euros at the end of the year.

New cloud bookings and backlog are key SAP indicators of continued strong cloud growth.

Operating profit for the full year was 5.12 billion euros (IFRS) and 6.60 billion euros (non-IFRS, currency-adjusted).

The full-year target raised in October was thus achieved (6.5 billion euros to 6.7 billion euros, non-IFRS, currency-adjusted).

Earnings per share (IFRS) increased by 18 percent to 3.03 euros (IFRS) and by three percent to 3.89 euros (non-IFRS).

SAP's growing cloud business and growth in support revenue continued to drive an increase in the share of more predictable revenue as a percentage of total revenue.

Total cloud subscriptions and support and software support revenue increased by two percentage points in the full year 2016 and exceeded a 61 percent share of total revenue.

For the full year, operating cash flow amounted to 4.63 billion euros (2015: 3.64 billion euros). This corresponds to a year-on-year increase of 27 percent.

Free cash flow increased by 21 percent year-on-year to 3.63 billion euros (2015: 3.00 billion euros).

S/4 Hana

The number of SAP S/4Hana customers doubled year-on-year to over 5400.

In the fourth quarter, around 1,300 additional customers opted for this product. Of these, around 30 percent are new customers.

In the new digital economy, it is becoming imperative for more and more customers, for economic reasons, to take advantage of a live business that operates on the basis of a drastically simplified software architecture.

Nike and Ameco Beijing invested in S/4 Hana in the fourth quarter.

SAP Cloud Platform

With SAP Cloud Platform, customers can extend existing functionality, develop applications for rapidly changing business processes using rapid development tools, and integrate them with other applications and operating models.

SAP Cloud Platform plays a major role in the IoT (Internet of Things) revolution by enabling more and more smart devices and machines to be connected to people and processes to achieve outstanding business results.

Burger King Brazil has adopted SAP Cloud Platform to analyze its sales data in real time and optimize its marketing strategies.

Through the Internet of Things, gamification and mobile apps, the restaurant chain aims to manage in-store performance and improve the customer experience.

Targets for 2020

Beyond 2017, SAP is also raising its 2020 targets to reflect consistently strong growth in the cloud, strong software revenue and operating profit growth, and foreign exchange performance.

In an exchange rate environment comparable to 2016, SAP plans to achieve the following targets by 2020:

Revenue from cloud subscriptions and support (non-IFRS) is expected to be in a range between EUR 8.0 billion and EUR 8.5 billion (previously between EUR 7.5 billion and EUR 8.0 billion).

Total sales (non-IFRS) are targeted at between 28 billion euros and 29 billion euros (previously between 26 billion euros and 28 billion euros). Operating profit (non-IFRS) is expected to be between 8.5 billion euros and 9.0 billion euros (previously between 8 billion euros and 9 billion euros).