SAP SE — Investor Presentation 2024

Jan 24, 2024

Fourth Quarter and Full-Year 2023 Results

Christian Klein, CEO Dominik Asam, CFO

Safe Harbor Statement

During this presentation we will make forward-looking statements which are predictions, projections, or other statements about future events. These statements are based on current expectations, forecasts, and assumptions that are subject to risks and uncertainties that could cause actual results and outcomes to materially differ. Additional information regarding these risks and uncertainties may be found in our filings with the Securities and Exchange Commission, including but not limited to the risk factors section of SAP's 2022 Annual Report on Form 20-F.

Christian Klein CEO

We accelerated profitable growth in Q4

All numbers are in € millions, non-IFRS unless otherwise stated, SAP continuing operations excl. Qualtrics

Q4 2023 FY 2023 Outlook, Ambition & Transformation

We met or exceeded our outlook for 2023 in all key metrics

All numbers are in € millions, non-IFRS unless otherwise stated, SAP continuing operations excl. Qualtrics

We're laying the basis for sustained, rapid growth beyond 2025 setting clear priorities to reach our revenue growth ambitions

2024 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC

1: Cloud revenue 2024 outlook shown at mid-point

2: Compound annual growth rates refer to lower ends, adjusted for the Ambition 2025 USD rate of 1.10 USD per EUR.

Q4 2023 FY 2023 Outlook, Ambition & Transformation

We see an opportunity to accelerate profitability increasing focus with a dedicated transformation program

Transformation program set up to drive:

More cloud- and adoption-centric go-tomarket model along the customer value journey

More focused product portfolio driving synergies with our Cloud ERP Suite

Comprehensive infusion of Business AI across all functions and processes

Accelerated workforce transformation

to ensure having the best skills in the right places

1: Incl. share-based compensation (SBC)

2: Operating profit 2024 outlook shown at mid-point

3: Compound annual growth rate adjusted for the Ambition 2025 USD rate of 1.10 USD per EUR

Q4 2023 FY 2023 Outlook, Ambition & Transformation

2024 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC

1: New non-IFRS definition incl. share-based compensation; estimates for historic data (2021-2022) 2: Compound Annual Growth Rate adjusted for the Ambition 2025 USD rate assumption of 1.10 USD/ EUR

CFO

Dominik Asam

Financial Highlights Regional Performance Gross Profit Development Tax Rate, EPS & Cash Flow Outlook Non-Financial Performance

All outlook key metrics met or exceeded for FY 2023

FY Other Financial Highlights

Current cloud backlog € millions	SAP S/4HANA current cloud backlog € millions	SAP S/4HANA Cloud revenue € millions	Cloud gross profit € millions		Percent	Cloud gross margin
			IFRS	Non-IFRS	IFRS	Non-IFRS
13,745 +25% (+27% @cc) ▲	5,046 +58% (+61% @cc) ▲	3,495 +67% (+72% @cc) ▲	9,780 +23% ▲	9,915 +23% (+27% @cc) ▲	71.6 +2.2pp ▲	72.6 ▲+2.2pp (+2.4pp @cc)

2024 SAP SE or an SAP affiliate company. All rights reserved. ǀ PUBLIC

SAP continuing operations excl. Qualtrics

Regional cloud revenue performance

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

Gross profit development

	Revenue		Gross Profit (Gross margin %)
Non-IFRS in € millions, unless otherwise stated	FY 23	∆ in %	∆ in % @cc	FY 23	∆ in %	∆ in % @cc
Cloud	13,664	20	23	9,915 (72.6)	23	27
SaaS	10,734	19	23	7,809 (72.7)	21	25
PaaS	2,182	42	46	1,849 (84.8)	49	53
IaaS	748	-18	-16	257 (34.3)	-20	-22
Software licenses and support	13,264	-5	-3	11,939 (90.0)	-6	-3
Cloud and software	26,928	6	9	21,854 (81.2)	6	9
Services	4,279	4	6	1,251 (29.2)	2	6
Total	31,207	6	9	23,104 (74.0)	5	8

Tax rate, EPS & Cash flow

outlook

2024 Non-financial

2024 Financial outlook¹

in € billions, unless otherwise stated; continuing operations

Customer Net Promoter Score in points Net Carbon Emissions in kilotons Employee Engagement Index in percent

SAP continuing operations excl. Qualtrics

SAP Q4 2023 Financial Results

in € millions, unless otherwise stated

Total revenue Cloud & Software revenue		Cloud revenue	S/4HANA Cloud revenue
8,468 7,386 ▲ ▲ +5% (+9% @cc) +6% (+10% @cc)		3,699 ▲ +20% (+25% @cc)	1,028 ▲ +55% (+61% @cc)
Share of more predictable revenue		Current cloud backlog	S/4HANA current cloud backlog
77% ▲ +2pp		13,745 ▲ +25% (+27% @cc)	5,046 ▲ +58% (+61% @cc)
Gross profit (Gross margin in %)	Cloud gross profit (Cloud gross margin in %)	Operating profit	Earnings per Share (in €)
IFRS	IFRS	IFRS	IFRS basic
6,197 (73.2%)	2,658 (71.9%)	1,900	1.02
▲ +5%	▲ +25%	▼ -5%	▲+60%
Non-IFRS	Non-IFRS	Non-IFRS	IFRS diluted Non-IFRS basic
6,331 (74.8%)	2,693 (72.8%)	2,510	1.01 1.41
▲ +5% (+9% @cc)	▲ +24% (30% @cc)	-2% (+2% @cc) ▼	▲ ▲ +59% +44%

Income statement: Fourth quarter 2023

			IFRS				Non-IFRS
€ millions, unless otherwise stated	Q4 23	Q4 22	∆ %	Q4 23	Q4 22	∆ %	∆ % @cc
Cloud	3,699	3,078	20	3,699	3,078	20	25
Software licenses	841	907	-7	841	907	-7	-6
Software support	2,846	2,993	-5	2,846	2,993	-5	-1
Software licenses and support	3,687	3,900	-5	3,687	3,900	-5	-2
Cloud and software	7,386	6,978	6	7,386	6,978	6	10
Services	1,081	1,085	0	1,081	1,085	0	4
Total revenue	8,468	8,064	5	8,468	8,064	5	9
Total operating expenses	-6,567	-6,061	8	-5,957	-5,504	8	12
Operating profit (loss)	1,900	2,002	-5	2,510	2,560	-2	2
Financial income, net	-107	-884	-88	-107	-884	-88
Profit (loss) before tax from continuing operations	1,761	1,048	68	2,371	1,605	48
Income tax expense	-595	-448	33	-745	-597	25
Profit (loss) after tax from continuing operations	1,165	600	94	1,626	1,008	61
Profit (loss) after tax from discontinued operations	0	-273	N/A	0	15	N/A
Profit (loss) after tax*	1,165	326	>100	1,626	1,023	59
Operating margin (in %)	22.4	24.8	-2.4pp	29.6	31.7	-2.1pp	-2.1pp
Earnings per share, basic (in €) from continuing operations	1.02	0.63	60	1.41	0.98	44
Earnings per share, basic (in €)*	1.02	0.46	>100	1.41	1.00	41

Income statement: Full year 2023

			IFRS				Non-IFRS
€ millions, unless otherwise stated	FY 23	FY 22	∆ %	FY 23	FY 22	∆ %	∆ % @cc
Cloud	13,664	11,426	20	13,664	11,426	20	23
Software licenses	1,767	2,056	-14	1,767	2,056	-14	-12
Software support	11,497	11,909	-3	11,497	11,909	-3	-1
Software licenses and support	13,264	13,965	-5	13,264	13,965	-5	-3
Cloud and software	26,928	25,391	6	26,928	25,391	6	9
Services	4,279	4,128	4	4,279	4,128	4	6
Total revenue	31,207	29,520	6	31,207	29,520	6	9
Total operating expenses	-25,421	-23,429	9	-22,486	-21,531	4	7
Operating profit (loss)	5,785	6,090	-5	8,721	7,989	9	13
Financial income, net	-469	-1,389	-66	-469	-1,389	-66
Profit (loss) before tax from continuing operations	5,292	4,513	17	8,228	6,412	28
Income tax expense	-1,728	-1,446	19	-2,413	-1,895	27
Profit (loss) after tax from continuing operations	3,564	3,068	16	5,815	4,517	29
Profit (loss) after tax from discontinued operations	2,363	-1,359	N/A	2,145	28	>100
Profit (loss) after tax*	5,928	1,708	>100	7,960	4,545	75
Operating margin (in %)	18.5	20.6	-2.1pp	27.9	27.1	0.9pp	1.2pp
Earnings per share, basic (in €) from continuing operations	3.08	2.80	10	5.01	4.03	24
Earnings per share, basic (in €)*	5.23	1.95	>100	7.02	4.08	72

Gross margin development

Non-IFRS, in percent as reported	FY 22	Q1 23	Q2 23	Q3 23	Q4 23	FY 23
Cloud	70.3	71.4	72.2	73.7	72.8	72.6
SaaS	72.1	71.5	72.5	74.0	72.9	72.7
PaaS	80.9	84.3	83.9	84.7	85.8	84.8
IaaS	35.2	38.4	35.3	35.4	27.9	34.3
Software Licenses & Support	90.7	89.2	90.5	90.4	89.9	90.0
Cloud & Software	81.5	80.3	81.2	81.7	81.3	81.2
Services	29.7	29.5	28.0	29.5	29.9	29.2
Total Gross Margin	74.3	72.9	73.8	74.5	74.8	74.0

Cost ratios: Fourth quarter 2023

€8.5bn Total revenue

All numbers are Non-IFRS unless otherwise stated. *Non-IFRS at constant currencies

Cost ratios: Full year 2023

€31.2bn Total revenue

All numbers are Non-IFRS unless otherwise stated. *Non-IFRS at constant currencies

Balance sheet condensed: December 31, 2023 – IFRS

Assets

€ millions	12/31/23	12/31/22
Cash, cash equivalents and other financial assets	8,124	9,008
Trade and other receivables	6,361	6,236
Other current assets	6,046	3,278
Total current assets	20,531	18,522
Goodwill	29,088	33,077
Intangible assets	2,505	3,835
Property, plant, and equipment	4,276	4,934
Other non-current assets	11,892	11,792
Total non-current assets	47,760	53,638
Total assets	68,291	72,159

Equity and liabilities

€ millions	12/31/23	12/31/22
Trade and other payables	1,775	2,147
Provisions	232	90
Other liabilities	7,543	9,908
Contract liabilities, current	5,026	5,309
Total current liabilities	14,576	17,453
Financial liabilities	7,945	9,547
Provisions	486	359
Contract liabilities, non-current	33	33
Other non-current liabilities	1,887	1,918
Total non-current liabilities	10,350	11,858
Total liabilities	24,926	29,311
Total equity	43,365	42,848
Total equity and liabilities	68,291	72,159

Cash flow development

€ millions, unless otherwise stated	FY/23	FY/22	∆ in %
Operating cash flow	6,193	5,675	9
– Capital expenditure	–785	–877	-11
– Payments of lease liabilities	–325	–410	-21
Free cash flow	5,083	4,388	16
Free cash flow in percent of total revenue	16%	15%	+1pp
Free cash flow in percent of profit after tax (IFRS)	143%	143%	+0pp

Due to rounding, numbers may not add up precisely

Net debt

€ millions, unless otherwise stated	2023	2022
Net Debt 12/31/2022 PY: 12/31/2021	–2,070	–1,563
Operating cash flow	6,193	5,675
Capital expenditure	–785	–877
Payments of lease liabilities	–325	–410
Business combinations	–1,168	–679
Dividends	–2,395	–2,865
Treasury shares	–949	–1,500
Net proceeds from Qualtrics sale	5,510	0
Other	–490	150
Net Debt 12/31/2023 PY: 12/31/2022	3,521	–2,070

Net Debt as of 12/31/2022 includes continuing and discontinued operations, Net Debt as of 3/31/2023 only includes continuing operations. Due to rounding, numbers may not add up precisely

Additional outlook information and Non-IFRS adjustments

The Company expects a full-year 2024 effective tax rate (non-IFRS) of around 32% (2023:30.3%) based on updated tax rate definition (non-IFRS).

Non-IFRS adjustments	Actual Amounts FY/22	Actual Amounts FY/23	Est. Amounts FY/24
Acquisition-related charges	€330m	€345m	€305m to €385m
Share-based payment expenses	€1,431m	€2,221m	N/A
Restructuring charges	€138m	€215m	at around €2 billion
Adjustment for regulatory compliance matter expenses	-	€155m	0
Sum of all adjustments	€1,899m	€2,936m

Due to rounding, numbers may not add up precisely

Expected currency impact 2024

Expected Currency Impact Based on December 2023 Level Applied for 2024

in percentage points	Q1 24	FY 24
Cloud revenue growth	–2.5pp to –0.5pp	–2.0pp to 0.0pp
Cloud and software revenue growth	–2.0pp to 0.0pp	–1.5pp to +0.5pp
Operating profit growth (non-IFRS)	–3.0pp to –1.0pp	–2.0pp to 0.0pp