SAP – Leading the Digital Transformation
16th German Corporate Conference Frankfurt – January 17, 2017 Luka Mucic, CFO
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.
SAP is the world's leading business software company
A compelling customer base Unmatched vertical expertise
SAP is running the world's mission-critical business processes
76% of the world's transaction revenue touches an SAP system
SAP touches $16 trillion of consumer
purchases around the world
SAP customers distribute more than 78% of the world's food
SAP customers produce more than 82% of the world's medical devices
SAP's brand value ranked #22 of top 100 worldwide1)
Among the top 100 companies worldwide by market capitalization
1) Source: MillwardBrown 2016 BrandZ Top 100 Global Brands
For over 40 years, SAP has turned technological change into customer value
Business software & online processing
Globalization & mainframe computing Internet & clientserver technologies
In-memory & cloud computing
SAP R/1:
Enabled customers to get a complete view of their business with realtime processing of data across integrated modules for materials, procurement, and accounting.
SAP R/2: Helped customers successfully manage large global enterprises on a mainframe architecture, while retaining the integration and real-time processing capabilities of SAP R/1.
SAP R/3 and SAP ECC: Enabled customers to take advantage of clientserver and internet technologies. Created a unified graphical user interface and new functional components.
SAP S/4HANA:
Helps customers thrive in the New Digital Economy. We are now focused on eradicating complexity and running live with our in-memory database technology SAP HANA and cloud computing.
1972 1982 1992 2015
SAP will continue to drive business value – fueled by three powerful trends affecting all businesses in all industries
Cloud computing
In-memory database
Hyper-connectivity
Platform-as-a-service Infrastructure-as-a-service
Machine learning &
artificial intelligence Internet of Things
Network marketplaces
Online platforms
Mobile devices
Innovations Business value
- Software-as-a-service Substantial economies of scale
- Easier consumption of software
- Lower barriers to entry
- Benefits of IT spread more widely
- Big data analytics Instant insight and decision-making based on "live" data
- Reduced operational expenses driven by new wave of automation
- New business models
- Improved business processes
- Reduced risks and costs
- Multiple new ways in which companies can interact with their stakeholders Social media
Only SAP can help businesses implement their digital strategy
In the digital core, SAP's next-generation business suite SAP S/4HANA helps companies harness "live" data for immediate action
- Groundbreaking new architecture: SAP S/4HANA has changed ERP from a system of record to a system of innovation
- It provides immediate insight, intelligence beyond automation, integration between departments, and connections to the world
- These technological advances were made possible by the most advanced in-memory platform available: SAP HANA
- SAP S/4HANA provides an enhanced user experience with SAP Fiori
- SAP offers on-premise and cloud editions to provide customers with real choice
- SAP S/4HANA is catalyzing broad customer adoption of our entire innovation portfolio
4,100 SAP S/4HANA customers – fastest upgrade cycle in SAP's history >7,000 trained partners 4,300 startups developing on SAP HANA platform Numbers as of Q3 2016
SAP helps companies, ISVs, and partners create value in networked economies
SAP's unique business network assets
- SAP is leading the charge in connecting businesses and building new ecosystems across all spend categories – materials and services with SAP Ariba, contingent labor with SAP Fieldglass, and travel with Concur
- These network solutions are highly synergistic to SAP's other offerings
SAP is a forerunner in the Internet of Things (IoT) revolution
- Drawing on deep insights into companies' business processes and leveraging a broad range of products and technologies
- IoT use cases include:
- Monitoring the status, location, and movement of physical assets
- Providing contextualized experiences based on information from sensors
- Delivering new services based on IoT-enabled products
- SAP HANA Cloud Platform plays a key role in consolidating all the data generated by IoT – and enable advanced analytics on top of it
~2.4 million
connected companies trade over \$840bn of commerce on the SAP Ariba Network
~44 million
end users process travel and expenses effortlessly with Concur
>2.8 million
flexible workers were managed in about 130 countries over the past 12 months on the SAP Fieldglass platform
~75 billion
connected devices in the Internet of Things by 2020
Companies can now run real time – based on a holistic view of the organization, instant insights, and predictive analytics
Total transparency
- Get a 360° view in real time
- Visualize insights in context
- Align on one source of truth
Instant insights
- Answer ad-hoc questions on-the-fly
- Analyze root causes
- Simulate impact of decisions
Simplified boardroom processes
• Reduce preparation time and effort
For a demo, visit https://www.youtube.com/ watch?v=ofq7ygnWpbw
Powerful combination of a rapidly expanding cloud business and a growing core
Well-positioned for strong cloud growth
- Broadest portfolio of best-in-class cloud offerings
- Extremely synergistic to SAP S/4HANA, providing tremendous cross and upsell opportunities
- Combination of backlog and deferred revenue indicates continued strength in contractually committed future cloud subscriptions and support revenue
High growth sustained through additional drivers
- Upscaling of SaaS offerings
- Expanding Concur internationally
- Expanding HEC and fostering a strong ecosystem (IaaS)
- Enhancing S/4HANA cloud editions (public & private)
- Refining the Digital Enterprise Platform (PaaS)
Software licenses revenue
- SAP S/4HANA innovation cycle catalyzes growth across SAP's innovation portfolio and strategic industries
- Certain solution areas e.g. HCM, Procurement, CEC, T&E – are rapidly shifting to the cloud
- SAP S/4HANA now available as cloud subscription option
Strong support revenue base – and growing
- Very high renewal rates
- The blended support fee across the entire support customer base is ~20%
Summary – Why invest in SAP
SAP's innovation leadership is helping customers win in the digital economy
- SAP runs the world's mission-critical business processes and is perfectly positioned at the top of the IT stack – close to the end user where the business value is generated
- In addition, SAP has developed the most advanced in-memory platform available today: SAP HANA
- Based on SAP's groundbreaking new architecture, SAP is in the early stages of a powerful multi-year innovation cycle with SAP S/4HANA as the digital core coupled with the most comprehensive, best-in-class cloud & network portfolio
- Only SAP offers customers choice of deployment model (cloud, on premise or hybrid) and seamless integration
SAP is outpacing the market
- SAP's broad global footprint provides resilience in an uncertain world
- Powerful combination of a rapidly expanding cloud business and a growing core
- Successful business transformation improve efficiency and effectiveness in each and every business
- Growing overall operating profit even as we continue to hire in fast growth areas such as S/4HANA, HCM, CEC, HCP (PaaS), Networks
SAP is pushing relentlessly towards a much more predictable business in the long term
SAP – Leading the Digital Transformation
16th German Corporate Conference Frankfurt – January 17, 2017 Luka Mucic, CFO