WALLDORF — SAP SE (NYSE: SAP) today announced updates to its reporting and receivables financing practices, which will become effective January 1, 2024.
The updates mainly include:
- The inclusion of share-based compensation (SBC) expenses in non-IFRS results,
- The exclusion of gains/losses from equity investments, mainly driven by SAPPHIRE Ventures, from non-IFRS results,
- The general shift of gains/losses even on smaller divestitures to non-operating income/expense,
- The discontinuation of the company’s receivables financing program (“SAP triggered financing”).
The updates will be reflected for the first time in SAP’s Q1 2024 results, which will be reported on April 22, 2024. While the updates will not impact Q4/FY 2023 results, which will be reported January 24, they will be reflected in SAP’s outlook for 2024 as well as potential updates to its Financial Ambition 2025.
“By implementing these updates, we hope to further increase the transparency of our operating results, while at the same time reducing short-term noise and volatility,“ said Dominik Asam, CFO and member of the Executive Board of SAP. “Including share-based compensation in our adjusted earnings may be interpreted as a disadvantage in comparison with some of our peers. But we believe recognizing share-based compensation as a genuine expense of running a business is long overdue. We are also convinced that appropriately reflecting it in steering and the incentivization of management will ultimately add economic value.”
Reflecting the company’s increasing focus on cross- and upselling its broader cloud solution portfolio, SAP also announced its intent to replace the current “SAP S/4HANA Cloud” revenue and current cloud backlog disclosure with a more broadly defined “Cloud ERP Suite” revenue disclosure in 2024.
Additional background on the announced updates, including a replay of an analyst and investor call hosted by Dominik Asam on Monday, December 18, can be found at SAP’s investor relations website at www.sap.com/investor.
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