SAP SE

Earnings Release • Jul 24, 2014

SAP Debt Investor Presentation Second Quarter 2014 Update Call

Walldorf, Germany Thursday, July 24, 2014

Safe Harbor Statement

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forwardlooking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP's future financial results are discussed more fully in SAP's filings with the U.S. Securities and Exchange Commission ("SEC"), including SAP's most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

Agenda

2014 – Q2 Performance Update

Mid-term and 2014 Outlook

Financing Strategy & Credit Profile

Other Topics

• I. US Private placement structure
• II. Counterparty Risk Management
• III. Conversion from AG to SE

Continuing a winning strategy – SAP Cloud powered by SAP HANA simplifies everything

Q2 Highlights: Strong Cloud Momentum with 39% Growth and Broad Market Adoption of SAP HANA Continues

• Delivered Second Quarter at High End of Full Year SSRS Outlook: Non-IFRS Software and Software-Related Service Revenue Increased 8% at Constant Currencies (4% at Actual Currencies to €3.48 Billion)
• Fastest Growing Enterprise Cloud Company at Scale: Non-IFRS Cloud Subscriptions and Support Revenue Increased 39% at Constant Currencies (32% at Actual Currencies)
• Strong Cloud Billings: Non-IFRS Calculated Cloud Billings Increased 37% at Constant Currencies
• Raising Full Year 2014 Non-IFRS Cloud Subscriptions and Support Revenue Outlook to €1,000 €1,050 Million at Constant Currencies
• Growing the World's Largest Business Network: Approximately 1.55 Million Connected Companies Transacting Approximately \$540 Billion
• Broad Market Adoption of SAP HANA as Real-Time Business Platform: 1,200 SAP Business Suite on HANA Customers
• IFRS Operating Profit of €698 Million (2013: €988 Million) Impacted by Provision of €289 Million for Seven-Year Old Versata Litigation
• Non-IFRS Operating Profit Increased 7% at Constant Currencies (4% at Actual Currencies to €1.24 Billion), Resulting in a 60 Basis Point Increase in Non-IFRS Operating Margin at Constant Currencies

Our 8% growth in non-IFRS software and software-related service revenue puts us at the upper end of our annual guidance range

Non-IFRS SSRS revenue : +8% at cc

Year on year growth rates in % at cc

Non-IFRS software and software-related service revenue increased 8% at constant currencies

4% at actual currencies to €3.48bn impacted by

Key performance metrics Q2 2014

Cloud Subscriptions and Support Revenue (€ bn)

IFRS				Non-IFRS			IFRS			Non-IFRS
			+52%			+32% (+39%*)	3.16	3.24		3.16	3.24
	0.16	0.24		0.18	0.24
	Q2/13	Q2/14		Q2/13	Q2/14		Q2/13	Q2/14		Q2/13	Q2/14

* At constant currencies

Key performance metrics H1 2014

Cloud Subscriptions and Support Revenue (€ bn)

IFRS			Non-IFRS			IFRS			Non-IFRS
		+55%			+32% (+38%*)	5.92	6.07		5.93	6.08
0.30	0.46		0.35	0.46
H1/13	H1/14		H1/13	H1/14		H1/13	H1/14		H1/13	H1/14

SSRS Revenue (€ bn) IFRS Non-IFRS H1/13 H1/14 H1/13 H1/14 +5% +4% (+8%*) 6.22 6.53 6.28 6.54

* At constant currencies

Non-IFRS SSRS1) revenue increased 8% at constant currencies yoy in Q2 2014 (+4% at actual curr. to €3.48bn)

Regional performance2)

EMEA: strong performance with +8% yoy SSRS1) revenue, despite uncertainties due to Ukraine crisis

• This was the result of 51% growth in cloud subscriptions and support revenue for the region as well as
• strong software revenue growth in the UK and France.
• Americas: solid performance with +6% in SSRS1) revenue. Continued fast transition to the cloud with +34% growth in cloud subscriptions and support revenue.
• Strong software revenue growth in Canada and continued strong demand in Latin America with tremendous growth opportunities.
• APJ: strong performance with + 12% yoy SSRS1) revenue growth; Cloud subscriptions and support revenue grew +48%.
• Australia and Malaysia were highlights, with strong triple-digit software revenue growth.

¹⁾ Software and software-related services

²⁾ Revenues calculated based on customer location; All numbers are non-IFRS; Growth rates at constant currency.

Q2 2014: Non-IFRS operating margin increased by 80BP – litigation provision impacted IFRS operating margin

€ millions, unless otherwise stated		IFRS			Non-IFRS
Revenue Numbers	Q2/14	Q2/13	∆%	Q2/14	Q2/13	∆%	∆% at cc
Cloud subscriptions and support	241	159	52	242	183	32	39
Software	957	982	-2	957	982	-2	1
Support	2,279	2,177	5	2,280	2,182	4	9
Software & Support	3,237	3,159	2	3,238	3,164	2	6
SSRS revenue	3,478	3,318	5	3,480	3,347	4	8
PSOS revenue	673	744	-10	673	744	-10	-6
thereof cloud	54	39	39	54	39	39	44
Total revenue	4,151	4,062	2	4,153	4,091	2	5
Operating Expense Numbers
Total operating expenses	-3,453	-3,074	12	-2,917	-2,905	0	5
Profit Numbers
Operating profit	698	988	-29	1,236	1,186	4	7
Finance income, net	17	-23	<-100	17	-23	<-100
Profit before tax	719	963	-25	1,257	1,161	8
Income tax expense	-163	-239	-32	-319	-311	3
Profit after tax	556	724	-23	938	850	10
Operating margin in %	16.8	24.3	-7,5pp	29.8	29.0	0,8pp	0,6pp
Basic earnings per share, in €	0.47	0.61	-23	0.79	0.71	10

© 2014 SAP SE. All rights reserved. 10

H1 2014: Non-IFRS operating margin increased by 40BP – litigation provision impacted IFRS operating margin

€ millions, unless otherwise stated		IFRS		Non-IFRS
Revenue Numbers	H1/14	H1/13	∆%	H1/14	H1/13	∆%	∆% at cc
Cloud subscriptions and support	460	296	55	463	350	32	38
Software	1,581	1,638	-4	1,581	1,638	-4	1
Support	4,492	4,286	5	4,495	4,295	5	9
Software & Support	6,072	5,924	3	6,075	5,934	2	6
SSRS revenue	6,533	6,220	5	6,538	6,284	4	8
PSOS revenue	1,316	1,443	-9	1,316	1,443	-9	-5
thereof cloud	98	82	19	98	82	19	24
Total revenue	7,849	7,663	2	7,854	7,727	2	6
Operating Expense Numbers
Total operating expenses	-6,428	-6,029	7	-5,699	-5,639	1	5
Profit Numbers
Operating profit	1,421	1,634	-13	2,155	2,088	3	7
Finance income, net	9	-37	<-100	9	-37	<-100
Profit before tax	1,423	1,584	-10	2,157	2,038	6
Income tax expense	-332	-340	-2	-553	-499	11
Profit after tax	1,090	1,244	-12	1,604	1,539	4
Operating margin in %	18.1	21.3	-3,2pp	27.4	27.0	0,4pp	0,3pp
Basic earnings per share, in €	0.91	1.04	-12	1.34	1.29	4

Gross margin declined by 30 bps Q2 2014

* Professional services and other services

Gross margin declined by 50 bps H1 2014

* Professional services and other services

Cost ratios Q2 2014, Non-IFRS

Non-IFRS, Q2/14

	R&D as a % of Total Revenue 12.8% -0.7pp				S&M as a % of Total Revenue 24.2% -0.6pp				G&A as a % of Total Revenue 5.0% -0.1pp
Total revenue €4.1bn		Total revenue €4.2bn		Total revenue €4.1bn		Total revenue €4.2bn		Total revenue €4.1bn		Total revenue €4.2bn
	R&D expenses €0.6bn		R&D expenses €0.5bn		S&M expenses €1.0bn		S&M expenses €1.0bn		G&A expenses €0.2bn		G&A expenses €0.2bn
Q2/13			Q2/14		Q2/13		Q2/14	Q2/13		Q2/14

Cost ratios H1 2014, Non-IFRS

Non-IFRS, H1/14

	R&D as a % of Total Revenue 13.5% -0.6pp				S&M as a % of Total Revenue 24.7% -0.4pp				as a % of Total Revenue 5.0% -0.1pp	G&A
Total revenue €7.7bn		Total revenue €7.9bn		Total revenue €7.7bn		Total revenue €7.9bn		Total revenue €7.7bn		Total revenue €7.9bn
	R&D expenses €1.1bn		R&D expenses €1.1bn		S&M expenses €1.9bn		S&M expenses €1.9bn		G&A expenses €0.4bn		G&A expenses €0.4bn
H1/13			H1/14		H1/13		H1/14	H1/13		H1/14

Agenda

2014 – Q2 Performance Update Mid-term and 2014 Outlook Financing Strategy & Credit Profile Other Topics

• I. US Private placement structure
• II. Counterparty Risk Management
• III. Conversion from AG to SE

SAP updated its outlook for the full year 2014

	SAP's Outlook FY 2014		Basis for Comparison 2013
Cloud subscription and support revenue (Non-IFRS at cc)	€1,000m – €1,050m Upper end of this range represents a growth rate of +39%	Previously: €950m – €1bn	€757m
Software and Software-related Service Revenue (Non-IFRS at cc)	+ 6% – 8%		€14.03bn
Operating Profit (Non-IFRS at cc)	€5.8bn to €6bn		€5.48bn

While the Company's full-year 2014 business outlook is at constant currency, actual currency reported figures are expected to continue to be negatively impacted by currency exchange rate fluctuations. If exchange rates remain at the June 2014 level for the rest of the year, the Company expects non-IFRS software and software-related service revenue and non-IFRS operating profit growth rates at actual currency to experience a negative currency impact of approximately 2 percentage points and 2 percentage points respectively for the third quarter of 2014 and of approximately 2 percentage points and 2 percentage points respectively for the full year 2014.

The above mentioned indication for the expected currency exchange rate impact on actual currency reported figures replaces the earlier indication disclosed in SAP's Q1 2014 earnings announcement on April 17st, 2014.

SAP's Mid-term Outlook

Financial Objectives

• Transition to the Cloud while growing our stable core
• Commitment to 2015 top-line aspirations; extend outlook to 2017
• Continued margin expansion

2017 Outlook

• €22B+ in total revenue
• €3.0B - €3.5B in Cloud revenue
• 35% operating margin

Agenda

2014 – Q2 Performance Update

Mid-term and 2014 Outlook

Financing Strategy & Credit Profile

Other Topics

• I. US Private placement structure
• II. Counterparty Risk Management
• III. Conversion from AG to SE

Balance sheet, condensed June 30, 2014, IFRS

Assets € millions	06/30/14	12/31/13
Cash, cash equivalents and other financial assets	3,353	2,999
Trade and other receivables	3,614	3,865
Other non-financial assets and tax assets	642	488
Total current assets	7,610	7,352
Goodwill	14,380	13,684
Intangible assets	2,907	2,956
Property, plant, and equipment	1,847	1,820
Other non-current assets	1,482	1,275
Total non-current assets	20,616	19,736
Total assets	28,226	27,089

Equity and liabilities € millions	06/30/14	12/31/13
Trade and other payables	846	850
Deferred income	3,304	1,408
Provisions	834	645
Other liabilities	2,401	3,444
Current liabilities	7,385	6,347
Financial liabilities	3,791	3,758
Provisions	211	278
Deferred income	63	74
Other non-current liabilities	622	583
Non current liabilities	4,687	4,694
Total liabilities	12,072	11,041
Total equity	16,154	16,048
Equity and liabilities	28,226	27,089

Strongest operating cash flow ever in a first half – increase by 4% to €2.58bn

€ millions, unless otherwise stated	01/01/14 - 06/30/14	01/01/13 - 06/30/13	∆
Operating cash flow	2,575	2,482	+4%
- Capital expenditure	-304	-265	+15%
Free cash flow	2,271	2,217	+2%
Free cash flow as a percentage of total revenue	29%	29%	+/-0pp
Cash conversion rate	2.36	2.00	+18%
Days sales outstanding (DSO in days)	64	62	+2

Net liquidity improved by >€400m to -€1.06bn since year end 2013 – strong result given the dividend and cash payout for acquisitions

1) Cash and cash equivalents + restricted cash + current investments

• 2) Business combinations, net of cash and cash equivalents acquired amounted to -€729m
• 3) Total Group Liquidity less financial liabilities (=bank loans, private placement transactions and bonds); corresponds with net liquidity 2 for more details see second quarter 2014 Interim Report

SAP's Credit Story Debt Serving Track Record – Fast Repayments envisaged to continue

M&A @ SAP – Consistent Financing Strategy

On March 26th ,Sap announced to acquire Fieldglass, the Global Cloud Technology Leader in Contingent Workforce Management.

Acquisition was completed on May 2nd 2014

Consistent with past acquisitions of this size, SAP commits to fast repayment of the acquisition term loan

Currently expect to have repaid the €500 m. acquisition term loan for Fieldglass by the end of the first quarter of 2015 at the latest

Acquisition SuccessFactors	Acquisition Ariba	Acquisition hybris	Acquisition Fieldglass
2011	2012	2013	2014
Term Loan	Term Loan	Term Loan	Term Loan
€1.0bn Feb. 21, 2012	€2.4bn Oct .05, 2012	€1.0bn Aug 06, 2013	€0,5bn May 06, 2014
Full Repayment Nov 12, 2012	Full Repayment Dec 05, 2012	Full Repayment Dec 6, 2013	Fast Repayment envisaged

	Debt Capital Market Issuance
Issue of Eurobonds	Issue of US Private Placement
€1.3bn	\$1.4bn
Nov 13, 2012	Nov. 15, 2012

Agenda

2014 – Q2 Performance Update Mid-term and 2014 Outlook Financing Strategy & Credit Profile Other Topics I. US Private placement structure

• II. Counterparty Risk Management
• III. Conversion from AG to SE

US Private Placement Structure and Administration

Counter party risk management

Essential tool to protect operating and strategic liquidity

Who are SAP's core counterparties?	Those banks participating in SAP's €2bn Revolving Credit Facility
How is risk defined?	Risks resulting from material adverse changes in the economic development and/or in the default probabilities of the counterparty
How is risk managed?	Trading limits set based on Official long term credit rating of one of the major rating agencies of at least "BBB flat" (in the case of I. different allocated rating categories the lowest is relevant Tier 1 capital of the respective financial institution II. Additional information on credit worthiness (eg. Credit default swaps, news of extraordinary events) Trading limits are split into sub limits distinguish between different types of transactions (money market investments, FX deals etc.) and to assign (free) limits to specific business
What is the goal?	 Maintain operating and strategic liquidity at all times insolvency)  Diversification to minimize exposure to bank risks (bank
How is the process driven?	 Counterparty and counterparty limits are monitored on a weekly basis (counterparty limit utilization report)
© 2014 SAP SE. All rights reserved.	26

SAP changed it's legal form to a European Company (SE) on 7th Jul. No consequences for its contract partners, customers or employees

Why convert

The change of legal form from a stock corporation under German law to a European Company was made to manifest SAP's self-image as an international player with European roots. Presenting itself as a European Company thus reflects the importance of the Company's European and international operations

What were the advantages

Enabled the Company to develop, together with representatives of the European workforce, a model for  the involvement of employees which was tailored to the needs of the Company Provided the opportunity to be able to limit the size of supervisory board member to 18 to ensure efficiently  run Provided the opportunity for the company to better reflect it's international character even more strongly  with employee representatives from other EU member states rather than being exclusively from Germany

No Impact or consequences for

• Debt Investors
• Corporate Law
• Accounting & Financial reporting
• Taxation

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