SAP SE — Investor Presentation 2017

Feb 9, 2017

SAP Capital Markets Day Leading the Digital Transformation

February 9, 2017

Agenda

01:00pm	Welcome Stefan Gruber, Head of Investor Relations
01:00 – 01:30pm	Strategy and Vision: Helping Customers Win in the New Digital Economy Bill McDermott, CEO Moderated by Maria Bartiromo, Global Markets Editor, Fox Business Network
01:30 – 02:15 pm	Product Innovation: Leading Customers' Digital Transformation Bernd Leukert, Products & Innovation Steve Singh, Business Networks & Applications
02:15 – 02:45 pm	E2E Digital Transformation enabled by SAP – Through the Eyes of the Customer Rob Enslin, Global Customer Operations Ittaya Sirivasukarn, INSEE CEO
02:45 – 02:55 pm	Coffee Break
02:55 – 03:45 pm	Customer Deep Dive – moderated by Jennifer Morgan, President SAP North America Jim Ferolo, Vice President Digital and Marketing Technologies, Maui Jim, Inc Robert Meshew, Chief Technology Officer, Microsoft Supply Chain, Microsoft Georgina Jarratt, Managing Director, Head of Transformation, Global HR, HSBC Bank PLC Richard Taylor, Partner at The Birchman Group
03:45 – 04:10pm	Driving Growth, Predictability, and Profitability Luka Mucic, CFO
04:10 – 05:00pm	Q&A Bill McDermott, Luka Mucic, Rob Enslin, Bernd Leukert, Steve Singh
05:00 – 05:30pm	Cocktails and Social Hour

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 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.

Strategy and Vision: Helping Customers Win in the New Digital Economy

Bill McDermott, CEO

February 9, 2017

Seven Years of Significant, Sustainable Growth

Driven by strong customer, employee and brand engagement

* Interbrand Ranking. All numbers are non-IFRS unless otherwise stated.

SAP Cloud is the Digital Business Platform

SAP Cloud Platform accelerates digital innovation

SAP Capital Markets Day Leading Customers' Digital Transformation

February 9, 2017 Bernd Leukert, Products & Innovation Steve Singh, Business Networks & Applications

SAP's Modular Suite for Digital Differentiation

Data Foundation (SAP HANA, SAP HANA Vora)

SAP Cloud Applications

SAP Cloud Applications

SAP Cloud Platform

Infrastructure as-a-Service SAP Datacenters

(or others e.g: Microsoft | Google | Amazon)

	SAP Clea Applications	Custom Applications
	SAP Clea for …
	Cash Application
User	Brand Intelligence
	Service Ticket Intelligence
	Resume Matching

SAP API Business Hub

	Business Services	Technical Services	Training
Developer	Invoice Processing Enterprise Bot Profile Matching	Text Image / Video Advanced Numerical	Data Science Interface	Data
		SAP Clea on SAP Cloud Platform		Scientist

Cloud Foundry

SAP Cloud Platform

SAP's Modular Suite

One SAP – Integration across all applications

Open Platforms: Innovation where users are

Business Beyond Bias

We're making it easier for customers to do business with SAP

Connected to Customers

Cloud Simple Selling:

• § Contracts
• § Pricing
• § Support

E2E Digital Transformation enabled by SAP – Through the Eyes of the Customer

Ittaya Sirivasukarn, INSEE CEO Rob Enslin, SAP Global Customer Operations

February 9, 2017

Digital Business Framework

Enterprise architecture for the Digital Economy

Digital Business Framework

SIAM CITY CEMENT

• Siam City Cement (SCCC) is the 2nd largest of Cement & Building Products Producer & Distributor in Thailand
• INSEE Digital is the IT of SCCC who provides all IT Application & Infrastructure to SCCC
• Annual revenue of 800m-Euro and 4,000 employees
• SCCC is embarking on a regional expansion strategy buying assets from competing cement brands (e.g. Holcim, Cemex) throughout Asia
• Ambition to be the first Digital Enterprise in Thailand, leading the transformation of Asian enterprises into Industry 4.0

SAP Capital Markets Day Leading the Digital Transformation

February 9, 2017

Bringing it all Together Customer Deep-Dive

February 9, 2017 Jennifer Morgan, President SAP North America

Bringing it all together

Customer deep-dive

Jim Ferolo

Vice President Digital and Marketing Technologies, Maui Jim, Inc.

Georgina Jarratt

Managing Director, Head of Transformation, Global HR, HSBC Bank PLC

Richard Taylor

Partner at The Birchman Group

Robert Meshew

Chief Technology Officer, Microsoft Supply Chain, Microsoft

Digital Business Framework

Driving Growth, Predictability, and Profitability

Luka Mucic, CFO

February 9, 2017

2020 growth trajectory

Continued strong cloud growth

Taking market share & driving share of wallet New cloud bookings: +31% in FY 16 Cloud backlog: €5.4bn; +47% @cc as of FY 16

Growth in our core business

+

Software Low- to mid-single digit license decline through 2020

Support

Highly predictable due to resilient growth and very high renewal rates

High single-digit cloud and software revenue growth

Pushing towards a larger more predictable business

Cloud gross margins on track towards long-term ambition

*Cloud subscriptions and support gross margin; 2020 potential

Increased transparency in our segment reporting

Business development by delivery model

Extract from new segment reporting***	FY/16	FY/20e
ATS* IaaS	-5.4	~40
ATS* SaaS/PaaS	62.0	~80
Business Network SaaS/PaaS*	75.9	~80
Cloud*	64.8	~73
Software & Support	87.4	~88
Cloud & Software	83.7
Services	18.2	~20
Total gross margin	72.9

Expected development of cost ratios

R&D will slightly decline

S&M expected to follow growth of business

G&A will remain broadly stable at reduced level

* Subscriptions and support

** Applications, Technology and Services

***Non-IFRS gross margins in %; starting Q1/17

Driving increased profitability

Highly profitable cloud business in the long term

• Mix shift effects
• Cloud investments
• Services margin dampened by strategic co-innovation

2017

• Mix shift effects
• Cloud investments
• Services margin improving

2016 2018 – 2020

• Cloud investments paying off increasing gross margin improvements
• Cloud overtakes software
• Efficiency in each business improving and cost ratios start to improve
• Cloud at scale contributes to profit acceleration through increased share of renewal base
• Services margin improving

Strong growth ambitions through 2020

Cloud Subscription €2.99bn

2016

Cloud and Software €18.43bn

Total Revenue €22.07bn

Operating Profit €6.63bn

2017 outlook*

Cloud Subscription €3.8 – 4.0bn upper end +34%

Cloud and Software +6% to +8%

Total Revenue €23.2 – 23.6bn

Operating Profit €6.8 – 7.0bn

2020 ambition

Cloud Subscription €8.0 – 8.5bn

Total Revenue €28.0 – 29.0bn

Operating Profit €8.5 – 9.0bn

Support + cloud subs – share of revenue 70% to 75%

Non-IFRS; *Non-IFRS at constant currencies

Expanding operating cash flow while significantly paying back debt, increasing dividends, and investing in growth

Considerations for share buyback

Capital allocation priorities

Expected amounts in € billions for 2017

SAP remains a growth company, today and beyond 2020

• SAP is the leader in business and enterprise software and has never been in a stronger position
• We are continuously investing in growth and our proven track record of innovation is helping to capture new business opportunities and ensure long-term success
• As we continue our acceleration to the cloud we will increase the predictability of our revenues, improve margins, profitability, and cash flow
• Our unique position provides optionality around strategic decisions aimed at driving shareholder value

Q&A

February 9, 2017

SAP Capital Markets Day Leading the Digital Transformation

February 9, 2017