SAP SE

Earnings Release • Jul 19, 2018

Second Quarter and Half Year 2018 Financial Highlights

Walldorf, Germany Thursday, July 19, 2018

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 forwardlooking statements. All forward-looking 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.

Income Statement

Balance Sheet and Cash Flow Analysis Outlook and Additional Information Appendix

Key performance metrics Q2 2018 2018

Key performance metrics H1 2018 2018

Regional performance Q2 2018

Revenues calculated based on customer location; All numbers are IFRS unless otherwise stated. Individual country highlights are based on Non-IFRS at constant currencies

Key cloud metrics Q2 2018

Q2/18 unless otherwise stated

All figures are Non-IFRS and growth rates at constant currencies unless otherwise stated

Cloud Subscriptions and Support Revenue	New Cloud Bookings1	Total Network Commerce2	Cloud Applications Total Subscribers
+40% €1,227m	+29% €421m	~\$2.4 trillion	>160m
SAP Business Network – Segment Revenue3	Customer Experience Revenue3	Number of end users processing travel and expense with Concur	Flexible workers managed with Fieldglass platform
€688m +21%	€242m +65%	>50m	>5.1m

1) New cloud bookings – key measure for SAP's sales success in the cloud – consist of order entry of a given period that is expected to be classified as cloud subscription and support revenue and results from purchases by new customers and from incremental purchases by existing customers. Consequently, orders to renew existing contracts are not included. The order amount must be committed. Consequently, due to their pay-peruse nature, business network transaction fees which do not include a committed minimum consumption are not reflected in the bookings metric (e.g. SAP Ariba and SAP Fieldglass transaction-based fees). Amounts included in the measures are generally annualized.

2) SAP Business Network commerce is the total commerce transacted on the Ariba, Concur and Fieldglass Networks in the trailing 12 months. Ariba commerce includes procurement and sourcing spend

3) Total Segment Revenue and growth rates at constant currencies

Double-digit operating profit growth continues in Q2

€ millions, unless otherwise stated		IFRS			Non-IFRS
Revenue Numbers	Q2/18	Q2/17	∆ %	Q2/18	Q2/17	∆ %	∆ % at cc
Cloud subscriptions and support	1,213	932	30	1,227	932	32	40
Software licenses	996	1,090	-9	996	1,090	-9	-5
Software support	2,735	2,736	0	2,735	2,736	0	7
Software licenses and support	3,731	3,826	-2	3,731	3,826	-2	3
Cloud and software	4,944	4,757	4	4,959	4,758	4	10
Services	1,056	1,024	3	1,056	1,024	3	10
Total revenue	5,999	5,782	4	6,014	5,782	4	10
Total operating expenses	-4,955	-4,856	2	-4,374	-4,212	4	10
Operating profit	1,044	926	13	1,640	1,570	4	12
Financial income, net	66	-26	<-100	66	-26	<-100
Profit before tax	1,029	908	13	1,625	1,552	5
Income tax expense	-309	-242	28	-452	-432	5
Profit after tax	720	666	8	1,173	1,120	5
Operating margin (in %)	17.4	16.0	1.4pp	27.3	27.2	0.1pp	0.4pp
Earnings per share, basic (in €)	0.60	0.56	8	0.98	0.94	5

H1 2018 - Cloud and software and operating profit up double-digit

€ millions, unless otherwise stated		IFRS			Non-IFRS
Revenue Numbers	H1/18	H1/17	∆ %	H1/18	H1/17	∆ %	∆ % at cc
Cloud subscriptions and support	2,283	1,837	24	2,299	1,837	25	36
Software licenses	1,621	1,781	-9	1,621	1,781	-9	-4
Software support	5,391	5,467	-1	5,391	5,467	-1	6
Software licenses and support	7,012	7,248	-3	7,012	7,248	-3	3
Cloud and software	9,295	9,085	2	9,311	9,085	2	10
Services	1,965	1,981	-1	1,965	1,981	-1	8
Total revenue	11,260	11,066	2	11,276	11,067	2	10
Total operating expenses	-9,192	-9,467	-3	-8,401	-8,299	1	8
Operating profit	2,069	1,599	29	2,876	2,768	4	13
Financial income, net	41	-13	<-100	41	-13	<-100
Profit before tax	2,019	1,576	28	2,826	2,744	3
Income tax expense	-591	-379	56	-785	-738	6
Profit after tax	1,428	1,197	19	2,041	2,006	2
Operating margin (in %)	18.4	14.5	3.9pp	25.5	25	0.5pp	0.7pp
Earnings per share, basic (in €)	1.20	0.99	21	1.71	1.67	3

Q2 2018 – Continued strong topline drives margin turnaround

H1 2018 - Continued strong topline drives margin turnaround

Cost ratios Q2 2018

€6.0bn Total revenue, Non-IFRS

*Non-IFRS at constant currencies

Cost ratios H1 2018

€11.3bn Total revenue, Non-IFRS

*Non-IFRS at constant currencies

Income Statement Balance Sheet and Cash Flow Analysis Outlook and Additional Information Appendix

Balance Sheet, Condensed June 30, 2018, IFRS

Assets
€ millions	06/30/18	12/31/17
Cash, cash equivalents and other financial assets	4,911	5,001
Trade and other receivables	5,075	5,899
Other current assets	1,461	1,031
Total current assets	11,448	11,930
Goodwill	23,377	21,267
Intangible assets	3,383	2,967
Property, plant, and equipment	3,284	2,967
Other non-current assets	3,989	3,374
Total non-current assets	34,034	30,575
Total assets	45,481	42,506

Equity and liabilities
---------------------------	--

€ millions	06/30/18	12/31/17
Trade and other payables	1,175	1,151
Provisions	113	184
Other liabilities	5,283	6,104
Contract liabilities / deferred income, current	4,867	2,771
Total current liabilities	11,437	10,210
Financial liabilities	6,537	5,034
Provisions	269	303
Contract liabilities / deferred income, non-current	52	79
Other non-current liabilities	1,329	1,340
Total non-current liabilities	8,187	6,756
Total liabilities	19,624	16,966
Total equity	25,857	25,540
Total equity and liabilities	45,481	42,506

Operating cash flow and free cash flow H1 2018

€ millions, unless otherwise stated	H1/18	H1/17	∆
Operating cash flow	2,985	3,514	-15%
- Capital expenditure	-818	-610	+34%
Free cash flow	2,167	2,903	-25%
Free cash flow in percent of total revenue	19	26	-7pp
Cash conversion rate	2.09	2.94	-29%
Days sales outstanding (DSO in days, June 30)	68	72	-4

Group Liquidity

Group Liquidity = cash and cash equivalent + current investments

Other = mainly purchase and sales of equity or debt instruments of other entities, and effects of FX rates on cash and cash equivalents Net Liquidity = group liquidity minus financial debt - for more information see our 2017 integrated report

Income Statement Balance Sheet and Cash Flow Analysis Outlook and Additional Information Appendix

SAP raises 2018 outlook and 2020 ambition

outlook*

^{2017 2018}

• Cloud Subscription Revenue €3.77bn
• Cloud and Software Revenue €19.55bn
• Total Revenue €23.46bn

• Operating Profit €6.77bn

• Cloud Subscription Revenue €5.050 – 5.200bn, up 34% to 38%

• Cloud and Software Revenue €21.025 – 21.250bn, up 7.5% to 8.5%
• Total Revenue €24.975 – 25.300bn, up 6.0% to 7.5%
• Operating Profit €7.400 – 7.500bn, up 9% to 11%

Cloud Subscription Revenue €8.2 – 8.7bn

Total Revenue €28.0 – 29.0bn

2020

ambition

• Operating Profit €8.5 – 9.0bn
• Share of more predictable revenue 70% to 75%

Beyond 2020

• Fast growing cloud business increasingly dominates business mix
• Cloud scale, ever higher recurring base lead to consistent expansion of operating margin

Expected Currency Impact Based on June 2018 Level for the Rest of the Year
in percentage points Q3 FY
Cloud subscriptions and support	1 to -1pp	-4 to -6pp
Cloud and software	1 to -1pp	-2 to -4pp
Operating profit	1 to -1pp	-2 to -4pp

FY 2018 – Additional outlook information and non-IFRS adjustments

The company continues to expect a full-year 2018 effective tax rate (IFRS) of 27.0% to 28.0% (2017: 19.3%) and an effective tax rate (non-IFRS) of 27.0% to 28.0% (2017: 22.6%) but now expects to reach the upper end of these ranges.

Non-IFRS adjustments	Actual Amounts H1/17	Actual Amounts H1/18	Est. Amounts for FY/18*
Revenue adjustments	€0m	€16m	€30m to €60m
Share-based payment expenses	€618m	€491m	€800m to €1,100m
Acquisition-related charges	€309m	€278m	€550m to €610m
Restructuring charges	€242m	€22m	€25m to €35m
Sum of all adjustments	€1,168m	€807m	€1,405m to €1,805m

Due to rounding, numbers may not add precisely

Income Statement Balance Sheet and Cash Flow Analysis Outlook and Additional Information Appendix

Gross margin development 2015 – Q2 2018

Non-IFRS	FY/15	Q1/16	Q2/16	Q3/16	Q4/16	FY/16	Q1/17	Q2/17	Q3/17	Q4/17	FY/17	Q1/18	Q2/18
Cloud*	66	66	65	65	63	64	65	62	61	61	62	63	64
Business Network*	75	75	76	77	75	76	77	77	76	77	77	77	77
Software & Support	87	86	87	87	88	87	85	87	87	89	87	86	87
Cloud & Software	84	82	84	83	85	84	81	82	82	84	82	81	81
Services	23	14	18	20	20	18	21	24	25	25	24	20	26
Total gross margin	73	70	73	73	76	73	70	71	73	75	72	70	71

* Subscriptions and support

Second Quarter and Half Year 2018 Financial Highlights

Walldorf, Germany Thursday, July 19, 2018