SAP SE — Investor Presentation 2016

Jan 18, 2016

The World's Leading Business Software Company

Luka Mucic CFO and COO, SAP SE

UniCredit KeplerCheuvreux 15th German Corporate Conference Frankfurt – January 18th, 2016

01 2015 Preliminary Results

SAP outpaces market with record 2015 cloud and software revenue FY 2015 – Guidance achievement

	Outlook FY 2015	Actual performance 2015
Cloud subscription and support revenue (Non-IFRS at cc)	€1.95bn to €2.05bn	€2.00bn
Cloud and software revenue (Non-IFRS at cc)	+ 8% to 10%	+ 12%
Operating profit (Non-IFRS at cc)	€5.6bn to €5.9bn	€5.902m

All 2015 figures in this presentation are approximate due to the preliminary nature of the Q4 2015 pre-announcement on Jan 11, 2016

Exceptional momentum in 2015 – SAP is unique in combining a rapidly expanding cloud business and a growing core

Cloud

• Cloud subscription and support: +109% to €2.30bn (€2.00bn at cc, achieving company guidance) in FY
• New cloud bookings: tremendous momentum with +103% (€0.89bn) in FY; +75% (€0.35bn) in Q4

Core

• SAP S/4HANA provides companies with the digital core
• Adoption surges: >2,700 customers, more than doubling the number of customers in Q4
• Software license: +10% to €4.84bn (+4% at cc)
• Resilient software support: +14% to €10.09bn (+7% at cc)

Cloud and software

• 20% to €17.23bn (+12% at cc) in FY

Highest operating profit in SAP's history

Through strong top line growth and successful business transformation

+13% to €6.35bn (€5.902bn at cc) in FY

02 SAP's strategy – value creation in a digital economy

SAP is extending its lead as the trusted innovator in the business software industry across markets and industries

SAP HANA PLATFORM

03

SAP's strategy – financial impact due to transformation of business model

A fast growing cloud business changes SAP's revenue mix

Shifting to more subscription based revenue and increasing share of more predictable revenue

Much larger cloud business in 2020 relative to core business – change in revenue mix weighs on blended operating margin for the group in short/medium term

Share of more predictable revenue is expected to increase to 70-75% by 2020

Share of more predictable revenue

SAP has a broad cloud offering with three different business models

Public Cloud

• Classical subscription SaaS model for cloud applications
• Most comparable cloud offering to pure cloud vendors
• Mostly three year contracts
• Massively scaling while continuing to improve efficiency
• Primarily annual pre-billing which results in deferred revenue

Business Network

• The world's largest network of its kind, with SAP Ariba, Concur, and SAP Fieldglass
• Steady predictable revenue stream with a very high stickiness
• Primarily 'Pay-as-you-go' model with contractual commitments
• Stable revenue growth rates

Private Cloud

• Start-up business supporting large customers' transition to SAP HANA and Cloud (significant up selling potential)
• Mission critical processes
• High set-up costs and significant ramp up weighs on margins short term – while scaling & leveraging partnerships in future
• Pre-billing with short (monthly) billing terms, consequently lower deferred revenues

~40%

*long term gross margin

~80% *long term gross margin

~80% *long term gross margin

* Long term cloud subscription and support gross margin potential in mature state (excluding cloud-related professional services)

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As share of new bookings reduces over time – ramping cloud profitability through increased scale

Cloud revenue Cloud profitability ramps as share of new bookings reduces over time

Typical cloud deal impact on gross profit*

(three years contract duration)

* excl. G&A and R&D

Resilient core business – steady improvement of profitability due to growing support, solid license revenue and efficiency gains

Software license revenue

• Driven by innovations next generation Business Suite S/4HANA, Customer Engagement & Commerce (CEC) and strategic industries
• Dependent on macroeconomic environment, in particular in emerging markets
• SAP outlook implies moderate decline in software revenue due to secular shift to cloud and assumption of unchanged market conditions

Support revenue

• High renewal rates of ~97%
• Enterprise support is today our de facto standard with a very high acceptance rate of net new customers

Software & support revenue

Example: existing customer with continued software purchases

Assumptions: License purchases decline by 5% p.a.; Enterprise Support offering fee 22% p.a.

FY 2016 outlook

Our completeness of vision in the cloud and soaring adoption of SAP S/4HANA gives us tremendous confidence in our business in 2016 and beyond.

2015

• Cloud subscription and support revenue (non-IFRS) €2.30bn
• Cloud and software revenue (non-IFRS) €17.23bn

• Operating profit (non-IFRS) €6.35bn

• Cloud subscriptions and support revenue (non-IFRS) in a range of €2.95 - €3.05bn at cc Upper end represents a growth rate of 33% at cc

• Cloud and software revenue (non-IFRS) to increase by 6% - 8% at cc
• Operating profit (non-IFRS) to be in a range of €6.4 - €6.7bn at cc

SAP will report detailed preliminary fourth quarter and full year 2015 results on January 22nd .

Run Simple

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 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.