SAP – The World's Leading Business Software Company
Investor Presentation SAP Senior Management Global Investor Roadshow, Nov. 2 - 4, 2011
Safe Harbor Statement
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Agenda
- y SAP at a Glance
- y Driving Innovation at SAP Expanding the Addressable Market
- y SAP's Strategy for Continued Profitable Growth
- y Appendix
SAP is the World's Leading Business Software Company
SAP is…
- y #1 in enterprise applications
- y #1 in SME applications
- y #1 in business analytics
- y #1 in enterprise mobility
SAP is a truly global company…
- y €12.5bn total revenue
- y 176,000 customers
- y 120 countries
- y 34 global technology partners
- y 2,900+ certified partners
Our Purpose
VISION MAKE THE WORLD RUN BETTER
MISSION MAKE EVERY CUSTOMER A BEST-RUN BUSINESS
BY MID OF THE DECADE
€20bn 35% MARGIN 1 BILLION PEOPLE
Strongest Third Quarter in a Decade
Software Revenue
YOY Growth Rates (€ millions)
Q3 / 2011
- 7 th Quarter of Double-Digit Growth
- 86% of order entry from existing customers
- ~1/3 order entry from SME
- Diversified revenue stream by region and industry
- Record operating cash flow of €3.0 billion in first 9M
- Plan to further evaluate buying back shares in future
- Continued margin progression year-over-year operating margin +310 bps
Strong Revenue and Profit Despite of Challenging Macroeconomic Situation in the First Nine Months
* At constant currencies
Increasing Recurring Revenue Streams – Basis for Sustainable and Stable Cash Flows
- Share of recurring revenues increased by 13pp between 2007 and 2010 (from 39% to 52%)
- Recurring revenues had a CAGR of +17.9% between 2007 and 2010
- Stability through steadily growing share of recurring revenues
Diversification of Revenue Streams Across Geographies and Industries
- In Q3/11, best ever third quarter in both traditional and emerging markets
- Software revenue grew in EMEA +26%, Americas +35%, APJ +42% and BRIC >60% yoy at cc
-
All regions grew double-digit yoy in 2010 with APJ leading the way at 26%
-
In Q3/11 consumer industries, financial services and process industries showed significant growth
- Leading vertical strategy with more than 24 industry-specific solutions
- We achieved double-digit growth in all six industry sectors in 2010
Agenda
- y SAP at a Glance
- y Driving Innovation at SAP Expanding the Addressable Market Growth
- y SAP's Strategy for Continued Profitable Growth
- y Appendix
Overall IT Trends – Structural Shift in IT Spending Towards the Value Drivers in Applications Software
Transformation of the IT stack – Structural shift in IT spending away from commoditized hardware and towards the value drivers in applications software
Overall IT Trends – Convergence
In Memory
Big Data |
On Mobile
IT-Consumerization |
In the Cloud
Increased availability |
|
|
|
|
|
y
Data volume for
enterprise
applications is
doubling every 18
months
100x – 1.000x faster
y
in data processing1 |
y
"Bring your own"
y
App explosion
y
1B smartphones,
1.2B mobile
workers by 2013
y
Corporate
applications access
via mobile growing
>40% p.a. |
y
Any access, any
workload anywhere
y
80% of new
software in 2011
will be available as
cloud services
y
Hybrid cloud
solutions drive TCO
and integration |
|
| 1- SAP HANA customer benchmark |
|
|
|
New Business Models
- y "Real"- real time business
- y Extending the enterprise
- y Mobile scenarios
Innovations Reshape Business IT World – SAP Orchestrates Analytics, Mobility, Cloud & In-Memory Capabilities
SAP's Product Strategy – Accelerates the Expansion of its Addressable Market
Expansion of SAP's addressable market due to:
- market growth within established solution categories
- addition of new solution categories 2
Agenda
- y SAP at a Glance
- y Driving Innovation at SAP Expanding the Addressable Market
- y SAP's Strategy for Continued Profitable Growth
- y Appendix
SAP's Strategy for Continued Profitable Growth
- y SAP strives to significantly expand its addressable market by the middle of the decade and achieve
- at least €20bn in total revenue
- an operating margin of 35%
- y Continuous margin expansion
- y Drive double-digit organic growth with a strong pipeline of new products
- y SAP expects the key drivers of growth will be innovation:
- Core business
- In-Memory technology
- On-device solutions
- On-demand solutions
Together with our customers and partners, SAP helps people in businesses of all sizes and industries to collaborate better, decide better, adapt better and operate better.
Macroeconomic Environment Remains Uncertain – Outlook for FY/11 Unchanged (Except Effective IFRS Tax Rate)
|
SAP's Outlook**
FY 2011 |
|
Basis for comparison
FY 2010 |
SSRS Revenue
(Non-IFRS at cc) |
+ 10% to 14% |
Company expects
to reach the high end
of the range. |
€ 9.87bn |
Operating Profit
(Non-IFRS at cc) |
€4.45bn to €4.65bn |
Company expects
to reach the high end
of the range. |
€ 4.01bn |
Operating Margin
(Non-IFRS at cc) |
+0.5pp to +1.0pp |
|
32.0% |
Effective Tax Rate
(IFRS) |
28.5% to 29.5% |
|
22.5%* |
Effective Tax Rate
(Non-IFRS) |
27.5% to 28.5% |
|
27.3% |
* Impacted by 4.7pp due to increased provisions for TomorrowNow Litigation
** Business outlook was provided on July 27th, 2011 at the time of SAP's second quarter 2011 results announcement, reiterated - except the guidance for the IFRS tax rate - on October 16th announcing SAP's third quarter 2011 results
Agenda
- y SAP at a Glance
- y Driving Innovation at SAP Expanding the Addressable Market
- y SAP's Strategy for Continued Profitable Growth
- y Appendix
SAP's Answer to Big Data – In-Memory Technology Enables "Real" Real-Time Computing with SAP HANA
SAP HANA
- Make decisions faster by analyzing large volumes of data in real-time
- Data stored in-memory rather than on hard disk
- In-memory columnar processing optimized for modern multi-core
- Data source agnostic appliance
- 5 leading hardware partners: Cisco, IBM, HP, Fujitsu, Dell (80% of HW market)
Taking Hours
Before SAP HANA
• Build new class of real-time applications and analytics
- Sophisticated planning engines, business functions and predictive analytics to provide insights on granular data
- Simplifying existing IT landscapes
Key differentiators
- Direct access to operational data w/o affecting performance of ERP
- Strong pipeline for SAP HANA
- Strategic Workforce Planning is 1 st HANA-enabled application
- Sub-seconds with HANA 100x-1,000x faster than traditional disk-based relational databases
SAP is #1 in Enterprise Mobility – Most Comprehensive Mobile Enterprise Solution Set
Mobility
- Access SAP anytime & anywhere
- Building-up a device agnostic mobility strategy is critical
- Integrate "bring-yourown" in mobility strategy
- Security is key topic in mobility strategy
- Making mobile technology integral to business strategy will gain competitive advantage for customers
SAP Offering
- Integration to Back-endand Core-Systems
- SUP allows IT units & partners to easily create new/mobilize existing apps
- Mobile Apps to boost employee productivity, CRM and service for key industries; 50 Apps to be delivered end FY11
- Afaria ensures reliable, secure data across multiple device platforms
Unique combination of SAP Business Analytics, SAP HANA and new mobile capabilities puts answers to complex questions into the hands of mobile users instantly
Customers of All Sizes, Subsidiaries and Line of Businesses Benefit from Cloud & On-Demand Offering
Comprehensive SAP cloud portfolio:
- SAP Business ByDesign – integrated on-demand suite for mid market customers and subsidiaries
- Line-of-Business solutions (e.g. Sales & Sourcing OD) – extend on-premise core with ondemand
- Î Seamless integration on-premise & on-demand
- For SAP Business Suite customers:
- Î SAP Virtualization and Cloud Mgmt product to come Nov 2011
Business Value
- SAP helps customers to run on-premise systems in the cloud and on virtualized and abstracted infrastructure
- Significant TCO-reduction through tools and services
- Simultaneously enabling as much automation as possible
- Customers and partners can combine all on-demand and on-premise solutions and services in a hybrid environment – incl. real-time analytics, in-memory computing and mobility
Comprehensive Cloud & On-Demand Solution Portfolio – Seamlessly Integrated for a Hybrid World
SAP – The World's Leading Business Software Company
Investor Presentation SAP Senior Management Global Investor Roadshow, Nov. 2 - 4, 2011