SAP SE — Investor Presentation 2014

Apr 28, 2014

SAP Debt Investor Presentation First Quarter 2014 Update Call

Walldorf, Germany April 28, 2014

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Agenda

SAP Strategy Mid-term and 2014 Outlook 2014-Q1 Performance Update Financing Strategy & Credit Profile

Foundation of a winning strategy

Mobile Database & Technology Cloud Analytics Applications BI/Analytics Middleware Core ERP + Suite 2010 \$110bn \$350bn 2020 1bn EUR Revenue Fastest Growing Database #1 in Mobility #1 in Analytics #1 in Applications Addressable market (\$ billion) SAP position

Our cloud vision – SAP Cloud powered by SAP HANA

Strategy for top-line growth

Focus on new growth areas in the core

• Big data
• HANA platform monetization
• Customer's customer / B2B2C
• Industries Financial Services, Retail, Public Sector & Healthcare
• Fast growth markets

Agenda

SAP Strategy Mid-term and 2014 Outlook 2014-Q1 Performance Update Financing Strategy & Credit Profile

Midterm outlook (unchanged from outlook provided Jan 21, 2014)

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

SAP reiterated its outlook for the full year 2014 (unchanged from outlook provided Jan 21, 2014)

	SAP's Outlook FY 2014	Basis for Comparison 2013
Cloud subscription and support revenue (Non-IFRS at cc)	€950m – €1bn	€758m
Software and Software-related Service Revenue (Non-IFRS at cc)	+ 6% – 8%	€14.03bn
Operating Profit (Non-IFRS at cc)	€5.8bn to €6bn	€5.51bn

Agenda

SAP Strategy Mid-term and 2014 Outlook 2014-Q1 Performance Update Financing Strategy & Credit Profile

Our 9% growth in non-IFRS software and software-related service revenue puts us ahead of our annual outlook growth range

Non-IFRS SSRS revenue : +9% at cc

Year on year growth rates in % at cc

Non-IFRS software and software-related service revenue increased 9% at constant currencies

4% at actual currencies to €3.06 bn impacted by strong currency headwinds

Key performance metrics Q1 2014

Cloud Subscriptions and Support Revenue (€ bn)

IFRS		+60%	Non-IFRS		+32%	IFRS		Non-IFRS
					(+38%*)	2.77	2.84		2.77	2.84
0.14	0.22		0.17	0.22
Q1/13	Q1/14		Q1/13	Q1/14		Q1/13	Q1/14		Q1/13	Q1/14

* At constant currencies

Q1 2014: Successfully transitioning to the cloud demonstrated by fast growth in cloud and a solid performance in the core business

€ millions, unless otherwise stated		IFRS			Non-IFRS
Revenue Numbers	Q1/14	Q1/13	∆%	Q1/14	Q1/13	∆%	∆% at cc
Cloud subscriptions and support	219	137	60	221	167	32	38
Software	623	657	-5	623	657	-5	1
Support	2.213	2.109	5	2.214	2.113	5	9
Software & Support	2.836	2.765	3	2.838	2.770	2	7
SSRS revenue	3.055	2.903	5	3.058	2.937	4	9
PSOS revenue	643	698	-8	643	698	-8	-4
thereof cloud	43	43	0	43	43	0	5
Total revenue	3.698	3.601	3	3.701	3.636	2	6
Operating Expense Numbers
Total operating expenses	-2.975	-2.955	1	-2.782	-2.734	2	6
Profit Numbers
Operating profit	723	646	12	919	901	2	7
Finance income, net	-9	-15	-41	-9	-15	-41
Profit before tax	704	621	13	900	877	3
Income tax expense	-170	-101	68	-233	-188	24
Profit after tax	534	520	3	667	689	-3
Operating margin in %	19,5	17,9	+1,6pp	24,8	24,8	0,0pp	+0,1pp
Basic earnings per share, in €	0,45	0,44	3	0,56	0,58	-3

Agenda

SAP Strategy Mid-term and 2014 Outlook 2014-Q1 Performance Update Financing Strategy & Credit Profile

Balance sheet, condensed March 31, 2014, IFRS

Assets € millions	03/31/14	12/31/13
Cash, cash equivalents and other financial assets	5,218	2,999
Trade and other receivables	3,867	3,865
Other non-financial assets and tax assets	579	488
Total current assets	9,664	7,352
Goodwill	13,694	13,688
Intangible assets	2,824	2,956
Property, plant, and equipment	1,832	1,820
Other non-current assets	1,334	1,277
Total non-current assets	19,685	19,742
Total assets	29,349	27,094

Equity and liabilities € millions	03/31/14	12/31/13
Trade and other payables	818	850
Deferred income	4,118	1,408
Provisions	489	645
Other liabilities	2,565	3,444
Current liabilities	7,990	6,347
Financial liabilities	3,766	3,758
Provisions	320	278
Deferred income	67	74
Other non-current liabilities	590	588
Non current liabilities	4,744	4,699
Total liabilities	12,734	11,046
Total equity	16,616	16,048
Equity and liabilities	29,349	27,094

Strongest operating cash flow ever in a first quarter – increase by 9% to €2.35bn

€ millions, unless otherwise stated	01/01/14 - 03/31/14	01/01/13 - 03/31/13	∆
Operating cash flow	2,352	2,162	+9%
- Capital expenditure	-130	-113	+15%
Free cash flow	2,222	2,049	+8%
Free cash flow as a percentage of total revenue	60%	57%	+3pp
Cash conversion rate	4.40	4.16	+6%
Days sales outstanding (DSO in days)	63	61	+2

Due to strong operating cash flow, back to positive net liquidity in a relatively short time frame after sizable acquisitions in past 2 years

€ millions

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

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

Three Pillar Financing Strategy Liquidity Protection – Ensure Maximum Financial Stability & Flexibility

Minimum Operating Group Liquidity

M&A Driven External Debt Financing

Revolving Credit Facility

€ 2bn

SAP's Minimum Operating Group Liquidity is ensured by stable cash flows driven by recurring revenue streams

M&A activities since 2007 to optimally position SAP in the current industry transformation, especially towards cloud business

Latest acquisition Fieldglass complements SAP's portfolio of managing the workforce

€ 2bn

SAP's Revolving Credit Facility serves as back-up credit facility

Facility was successfully refinanced and increased to € 2bn in November 2013 to enhance financial flexibility

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

M&A @ SAP – Consistent Financing Strategy

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

SAP has negotiated a Term Loan to partly finance the acquisition of Fieldglass

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

With the acquisition of Fieldglass, SAP now offers a solution to manage the entire workforce of a company in the cloud

Acquisition SuccessFactors	Acquisition Ariba		Acquisition hybris	Acquisition Fieldglass
2011	2012		2013	2014
Term Loan	Term Loan		Term Loan	Term Loan
€1.0bn Dec 15, 2011	€2.4bn May 22, 2012		€1.0bn June 05, 2013	Deal unclosed
Full Repayment Nov 12, 2012	Full Repayment Dec 05, 2012		Full Repayment Dec 6, 2013	Fast Repayment envisaged
	Debt Capital Market Issuance			Acquisition not closed yet
	Issue of Eurobonds	Issue of US Private Placement
	€1.3bn Nov 13, 2012	\$1.4bn Nov. 15, 2012

SAP's Hedging Strategy Effect of Macroeconomic Development of FX

FX Hedging Strategy at SAP

SAP hedges both balance sheet and forecasted FX exposures:

• Balance sheet exposure is hedged on both SAP AG and subsidiary level. Currencies with significant exposure positions are hedged.
• In addition, SAP AG hedges expected licenses of its subsidiaries in currencies in which significant revenue volumes are realized.
• The effect of hedging is reflected in the position "Other non-operating income/ expense, net" and with that it does not influence the operating profit result.

SAP does not hedge translation exposure:

• Exchange differences on translation of group companies financial statements into the consolidated statements are shown in equity. As SAP disposes of a very strong equity position impact is not significant.
• While translation exposure effects are not cash-relevant, a potential hedging of those exposures could cause actual cash in- and outflows, increasing volatility in our liquidity position.
• For potential translation hedges there would be no full hedge accounting achievable therefore hedging translation risk could actually increase earnings volatility.

As a large portion of SAP's revenue is realized in currencies other than Euro, SAP experienced strong headwinds due to appreciation of Euro

Debt Issuance Programme Successful renewal of SAP's Debt Issuance Programme

SAP's Debt Issuance Programme (DIP)

Key facts:

• Issuer: SAP AG
• Programme volume was increased to € 6bn
• Currencies: no restrictions
• Unsecured and unsubordinated, pari passu, negative pledge, cross default, no financial covenants
• Listing: Luxembourg Stock Exchange
• Successful issuance of € 1.3bn Eurobonds in 2012 Signed and dated April 8, 2014 under the Debt Issuance Programme

Balance Sheet Stability - Goodwill Profitability of Reported Segments

Goodwill by Segment in 2013

Goodwill mainly based on highly profitable segments

Profitability of On-Premise Products amounted to 59% in 2013. On Premise Services delivered a profitability of 21% in 2013.

Goodwill added in 2013: € 840m, thereof € 780m due to the acquisition of hybris.

of Goodwill is mapped to highly profitable On-Premise segment

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