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Questions and Answers

Question and Answers

Question and Answers

Company

When was SAP founded?

In 1972, five former IBM employees founded the company they call SAP Systemanalyse und Programmentwicklung ("System Analysis and Program Development").Taking the initial form of a private partnership under the German Civil Code, the company establishes its headquarters in Weinheim, Germany, and opens an office in nearby Mannheim. However, SAP's five founders spend most of their time in the data centers of their first customers, which include the German branch of Imperial Chemical Industries in Östringen.

Further information can be found on the SAP History page.

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What does the acronym "SAP" stand for?

"SAP" stands for Systems, Applications, and Products in Data Processing.

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What is SAP’s vision and mission?

The world is experiencing unprecedented change. Experts across industries know that in the new digital economy, only the most adaptive businesses will prevail. SAP provides what is needed to become a digital business. Our enduring vision is to help the world run better and improve people’s lives.

Complexity has become a problem of staggering proportions and stands in the way of digital transformation and innovation. We enable organizations to tackle complexity by unlocking their ability to Run Simple. This principle guides everything we do and powers our customers’ transformation into digital businesses. We offer what is required to support this transformation – our deep experience as a leader in enterprise software for more than 44 years; our solutions and services; and our global reach, which includes a base of 320,000 customers across 25 industries; and an ecosystem of thousands of partners. 

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What is your business outlook for 2016?

We are providing the following outlook for the full year 2016:

Based on the continued strong momentum in SAP's cloud business the Company expects full year 2016 non-IFRS cloud subscriptions and support revenue to be in a range of €2.95 - €3.05 billion at constant currencies (2015: €2.30 billion). The upper end of this range represents a growth rate of 33% at constant currencies.

The Company expects full year 2016 non-IFRS cloud and software revenue to increase by 6% - 8% at constant currencies (2015: €17.23 billion).

The Company expects full-year 2016 non-IFRS operating profit to be in a range of €6.4 billion - €6.7 billion at constant currencies (2015: €6.35 billion).

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What is SAP´s mid-term outlook?

As stated in the press release on January 22, 2016, SAP has raised its 2017 ambition to reflect both the current exchange rate environment and excellent business momentum as follows:

Assuming a stable exchange rate environment going forward SAP expects non-IFRS cloud subscriptions and support revenue in a range of €3.8 - €4.0 billion in 2017. The upper end of this range represents a 2015 to 2017 CAGR of 32%. Non-IFRS total revenue is expected to be in a range of €23.0 - €23.5 billion in 2017. The Company expects its 2017 non-IFRS operating profit to be in a range of €6.7 - €7.0 billion.

SAP continues to anticipate that the fast-growing cloud business along with growth in support revenue will drive a higher share of more predictable revenue. Given the current software license revenue momentum the Company expects the total of cloud subscriptions & support revenue and software support revenue to be in a range of 63% - 65% of total revenue in 2017.

By 2017 SAP continues to expect its rapidly growing cloud subscriptions and support revenue to be close to software license revenue and is expected to exceed software license revenue in 2018. At that time, SAP expects to reach a scale in its cloud business that will clear the way for accelerated operating profit expansion.

The Company is not adjusting its long term, high level 2020 ambition at this time. The Company's 2020 ambition communicated in 2015 was:

€7.5 - €8.0 billion non-IFRS cloud subscriptions and support revenue

€26 - €28 billion non-IFRS total revenue

€8.0 - €9.0 billion non-IFRS operating profit

70% - 75% share of more predictable revenue (defined as the total of cloud subscriptions & support revenue and software support revenue).

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Are you planning to grow organically or through acquisitions?

Organic growth remains the primary driver of our strategy. We will continue to invest in our own product development and technology innovation, improving the speed, number of projects, and innovations brought to market. We will also continue to acquire targeted, strategic, and “fill-in” technology and software to add to our broad solution offerings and improve coverage in key strategic markets. By doing so, we will strive to best support our customers’ needs for simplified operations. Additional information can be obtained here.

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Where can I find information about SAP's most important acquisitions?

Detailed information on our acquisitions can be found in section Acquisitions.

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What is SAP's current headcount?

On December 31, 2015, we had 76,986 full-time equivalent (FTE) employees worldwide (December 31, 2014: 74,406).

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Do SAP employees participate in the company's success?

SAP offers its employees and managers various investment programs.

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Can you explain SAP’s commitment to sustainable business practices?

Sustainability is core to the overall business strategy at SAP and our vision to help the world run better and improve people’s lives. For us, sustainability means holistically managing the financial, social, and environmental dimensions of business, in order to reduce economic risks and to seize opportunities for increased profitability. As our Integrated Report 2014 shows, SAP is committed to not only providing a comprehensive view of the dependencies between our economic, social and environmental performance. It also helps us move closer towards a sustainable business strategy. Such a strategy is defined by embedding sustainability deeply into how we create value for our customers in the first place, i.e. through the software we create for businesses around the world.

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Why can’t I order a printed annual report anymore?

SAP, as a digital leader, in now taking a digital-first approach to reporting. Further, this approach supports our environmental goals to reduce printed material.

Therefore, SAP has decided to provide a small number of printed reports at the Annual General Meeting of Shareholders only. The full SAP Integrated Report is available online and for download at www.sapintegratedreport.com.

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Where can I read current SAP business and financial news?

Current SAP business and financial news are listed under Financial News and in the Press Room.

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European company (SE)

What is an SE?

The European Company (Societas Europaea, SE) is a supranational legal form under European law for commercial enterprises within the territory of the European Union.

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Why was SAP AG converted into an SE?

The change of legal form from a stock corporation under German law to a European Company was made to manifest SAP’s self-image as an international player with European roots. Presenting itself as a European Company thus reflects the importance of the Company’s European and international operations.

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What were the advantages of the conversion for SAP?

The legal form of the European Company enabled the Company to develop, together with representatives of the European workforce, a model for the involvement of employees which was tailored to the needs of the Company. It could thus be ensured that both the corporate governance structure of SAP and the work of its corporate organs were optimized. An important step in this development was the opportunity to be able to limit the size of the Supervisory Board to 18 members. Without the change of legal form to the SE, in contrast, a larger Supervisory Board comprising 20 members would have been inevitable having regard to the development of the number of German employees, which would have adversely affected the efficiency of the work of the Supervisory Board. SAP’s aim was a Supervisory Board size of 18 members. This had been determined in an agreement between the central management of SAP AG and representatives of the European workforce on the involvement of the employees in SAP SE. Furthermore, it is provided in the Employee Involvement Agreement that the shareholders have the possibility to reduce the size of the Supervisory Board in the future (i.e. at the earliest in the Annual General Meeting of Shareholders in 2018, with effect from the Annual General Meeting of Shareholders in 2019) to 12 members. Following the change of legal form to the SE, the Supervisory Board is of course still required to be composed of an equal number of shareholders’ and employees’ representatives, i.e. half of its members are employees’ representatives. However, these representatives are no longer exclusively – directly or indirectly – designated by the German employee representatives of the SAP Group and the German trade unions, but also – directly or indirectly – with the involvement of the employees and trade unions from other member states of the EU or signatory states to the agreement on the EEA. The legal form of a European Company thus presented an opportunity for the Company to reflect its international character even more strongly now also with regard to the employees’ representatives on the Supervisory Board.

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How was the conversion achieved?

The conversion required that the Annual General Meeting of Shareholders consented to this measure on the basis of the Conversion Plan established by the Executive Board, and approved the Articles of Incorporation of SAP SE. Such consent and approval were granted by a resolution of the 27th Annual General Meeting of Shareholders of SAP AG on May 21, 2014. Furthermore, the procedure for the involvement of employees in the SE had to be conducted, which in the case of SAP resulted in the conclusion of an Employee Involvement Agreement between the central management and representatives of the employees from all over Europe. The conversion became effective on July 7, 2014, upon registration in the commercial register of the Company, i.e. the commercial register at the Local Court of Mannheim.

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How are the European employees involved in the decision-making within SAP SE?

In connection with the conversion of an AG to an SE, a procedure for the involvement of the European employees in the SE had to be conducted in order to secure the rights acquired by the employees of the AG as regards their involvement in company decisions. That procedure resulted in the conclusion of an agreement on employee involvement, which governs on the one hand the participation of the European employees in the Supervisory Board of the SE and on the other hand the procedure for informing and consulting the European employees through the SE Works Council. For more information on the Employee Involvement Agreement, please click here.

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What were the costs of the conversion?

The costs amounted to approximately €4 million.

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What were the consequences of the conversion in terms of corporate law and accounting?

The conversion of SAP AG to an SE did not result in the winding-up of the company or the creation of a new legal person. The legal and economic identity of the company was preserved by the change of legal form. For this reason, there was also no transfer of assets. The law applicable to SAP SE largely corresponds to the law applicable to a German stock corporation. As regards the annual financial statements, the management report, the group annual financial statements and the group management report, the same provisions apply to an SE as to an AG.

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What were the consequences of the conversion for the shareholders?

The shareholdings of the shareholders remained unchanged following the conversion to an SE. The shareholders retained the same number of shares that they had held in SAP AG immediately prior to the effective date of conversion. The notional portion of the capital stock represented by each no-par value share also remained the same as immediately prior to the effective date of conversion. There are no differences between SAP AG and SAP SE as regards the dividend entitlement of the shareholders. As at SAP AG, the General Meeting of Shareholders decides on the appropriation of retained earnings at SAP SE.

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What were be the tax consequences of the conversion?

The conversion of the company to an SE has not had any income tax effect nor triggered any obligation to pay German VAT or property transfer tax. Furthermore, the conversion has not resulted in a taxable profit or a loss that is relevant for taxation purposes for the shareholders. SAP SE is treated like a German corporation and is subject to corporate income tax and trade tax in the same way as SAP AG previously was. Disposals of shares in SAP SE are generally treated, at the level of the shareholders of SAP SE, in the same way as disposals of shares in SAP AG formerly were, unless applicable law or the factual circumstances change. The same applies to dividend distributions.

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What were the consequences of the conversion with regard to the shares and the stock exchange listing?

The conversion of SAP AG to SAP SE did not have any serious implications relating to the shares in the company and its listing. As the legal identity of the company was preserved by the change of legal form, the shareholders of SAP AG became shareholders of SAP SE upon the conversion. Exchange trading in SAP shares was not affected by the conversion, either. Only the quotation had to be adjusted to “SE” due to the change of name.

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Stock and ADR

When was SAP stock first publicly traded and what was the first quote?
SAP was first publicly traded on November 4, 1988, on the German Stock Exchange. The first quote was 753.06 DM (385.03 €). The SAP American Depositary Receipt (ADR) has been listed on the New York Stock Exchange since August 3, 1998.
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What kind of shares does SAP offer and where are SAP stocks listed?

SAP shares are listed as SAP ordinary shares through the Frankfurt Stock Exchange, the electronic system XETRA, and other German regional stock exchange centers, under the ticker symbol "SAP."

In the United States, shares are listed on the New York Stock Exchange in the form of American Depositary Receipts (ADRs). An ADR is a receipt representing ordinary or common shares of a non-U.S. company. ADRs are priced in dollars and traded on U.S. exchanges, allowing investors to buy and sell shares of non-U.S. companies in exactly the same way as they purchase or sell shares of U.S. companies. SAP ADRs, with the ticker symbol "SAP," are dollar-denominated securities backed by the shares trading in Germany. The ratio between the ADR and the underlying ordinary shares is 1:1, meaning that one SAP ADR is the equivalent of one SAP ordinary share.

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How can I buy SAP shares?

SAP shares are available for purchase as SAP ordinary shares through the Frankfurt Stock Exchange, the electronic system XETRA, and other German regional stock exchange centers. Individual investors who aren't from the United States can purchase SAP ordinary shares through their custodian banks, a stockbroker, or generally any institution that offers such brokerage services.

U.S. investors can purchase SAP ADRs through a broker as they would any ordinary security. They can also buy SAP ADRs through the DB-Direct Investor Services Program, which offers investors a variety of convenient, low-cost services to make it easier to invest in ADRs. DB-Direct is administered by Deutsche Bank Trust Company Americas and allows new and existing holders to make ADR purchases, sell ADRs, and reinvest dividends. Visit www.adr.db.com and click on the "DB-Direct" icon for more information about the program.

Or, contact:
Deutsche Bank Trust Company Americas
SAP ADR Processing Unit
c/o American Stock Transfer & Trust Company,
P.O. Box 2050,
Peck Slip Station,
New York, NY 10272-2050

Telephone: +1-877-484-5046 or +1-718-921-8137 www.amstock.com
db@amstock.com

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Whom should I contact regarding questions about SAP shares or SAP ADRs?

Holders of SAP shares should contact SAP investor relations.

Holders of SAP ADRs with questions about stock transfer or dividend payments should contact the Deutsche Bank Trust Company Americas. Call +1-877-484-5046 or visit www.adr.db.com.

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In which indices is SAP listed?
SAP shares have been listed in the DAX since September 18, 1995. They are also listed in the Prime All Share-Index, CDAX, HDAX, Stoxx50, and EuroStoxx50. You can find the current share price on the SAP Stock page.
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What is the par value of SAP stock?
SAP ordinary shares are no-par shares by resolution of the Annual General Meeting of Shareholders of June 16, 1998.
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When does SAP pay out dividends?

SAP pays a dividend once a year. The SAP Executive and Supervisory Boards jointly recommend the dividend amount. It is based on the SAP SE financial statements. The amount of dividend requires the shareholders’ approval and is officially decided upon at the SAP Annual General Meeting of Shareholders. Payout usually occurs on the next business day following our Annual General Meeting of Shareholders. For information about SAP's dividends policy, access the Dividends & Share Buybacks page.

Note to holders of SAP ADRs (American Depositary Receipts): One SAP ADR represents one SAP share. The final dividend is dependent upon the Euro/US-Dollar exchange rate. SAP pays cash dividends on the ordinary shares in Euro, so exchange rate fluctuations will affect the US-Dollar amounts received by holders of ADRs, depending on the foreign exchange rate at the time of the conversion of the dividend cash from Euro to US-Dollar. The final dividend payment by SAP to the depositary bank is usually scheduled for the day after the Annual General Meeting of Shareholders. The depositary bank will then convert the dividend payment from Euro into US-Dollar as promptly as practicable.

ADR investors can invest all or a portion of the cash dividends paid on SAP ADRs through our Dividend Reinvestment Program, operated in cooperation with the Deutsche Bank Trust Company Americas. Visit www.adr.db.com and click on the "DB-Direct" icon for more information about this program.

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How many shares are outstanding?
You can find information on shares outstanding on the Key Data page.
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Does SAP buy back stock?
We currently have no concrete plans for future share buybacks. You can find more information on the Dividends and Share Buybacks page.
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What is the current market capitalization?
You can find information on SAP’s market capitalization on the stock Key Data page.
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When was the first trading day of SAP preference shares and when were preference shares transformed into ordinary shares?
The first trading day of SAP preference shares was August 6, 1990. By resolution of the Annual General Meeting of Shareholders on May 3, 2001, and entry into the German commercial register on June 18, 2001, all preference shares were transformed into ordinary shares. For more information, access the press release "SAP to Simplify Share Structure".
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At which dates the stock has been split and at which ratios?

1990: Capital increase from corporate funds 1:1,25

1994: Capital increase from corporate funds 1:5

1995: Stock split 1:10

2000: Stock split 1:3

2006: Capital increase from corporate funds 1:4

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Debt

What is a credit rating? Does SAP have a credit rating?

A credit rating is a qualified assessment and formal evaluation of a company's creditworthiness, ability and willingness of repaying outstanding debt obligations on time.

SAP has a long-term issuer credit rating of “A2” by Moody's and “A” by Standard & Poor's, both with stable outlook.

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Why does SAP dispose of a rating?

While SAP had continuously realized successful financing transactions at attractive terms before obtaining an external credit rating in September 2014, a rating now provides SAP with the opportunity to broaden its investor access, to issue further capital market instruments and to optimally benefit from its high creditworthiness. Furthermore, it provides investors, customers and suppliers with an independent view of SAP’s strength and stability as a business partner.

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Can you briefly describe your approach for the financing of your business units or subsidiaries?

We apply a centralized financial management, i.e. financial resources should be raised and invested centrally whenever possible. Therefore, subsidiaries are financed by intercompany loans and/ or cash pooling agreements according to their needs.

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Which role do considerations on capital structure optimization play for your future financing strategy?

For SAP, sufficient liquidity has highest priority. We are aware that an optimized capital structure with a higher financial leverage and lower cash levels might imply a slight reduction in the cost of capital. However, in the current environment a proper liquidity level with still moderate gross debt is more important to us. Moreover, our company operates in growth markets. Therefore continuous access to debt capital markets is essential in order to seize growth opportunities as they arise.

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What is your Bank Relationship Management approach?

The bank relationship policy of SAP targets a long-term and mutually beneficial business relationship. Bank partners who support us with significant credit amounts make up our core bank group. Within this group we allocate treasury-related business on a competitive basis. Moreover, we take into account the respective core competencies and abilities of each individual bank.

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How do you monitor the creditworthiness of your business partners in the bank sector?

Besides the credit ratings we also look into the development of the CDS spreads and the share price of the banks on a daily basis. Moreover, a counterparty limit has been assigned to each bank partner. We have defined a detailed contingency plan which stipulates specific measures to be undertaken in case of a sudden and significant deterioration in the creditworthiness of our bank partners.

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What credit facilities do you currently have?

We currently have a syndicated revolving credit facility in the amount of EUR 2.0bn and maturity in November 2020 in place. The facility includes 27 banks and strengthens our financial flexibility. It can be used for general corporate purposes and supplements our existing bilateral credit facilities. The credit facility has not been drawn so far and currently we do not intend to do so. Additionally, SAP has available bilateral credit facilities in the amount of EUR 471m as of December 31, 2015, in place. As at December 31, 2015, there were no borrowings outstanding under these credit facilities, neither from SAP SE nor any of our subsidiaries.

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What role do the current market turbulences play with regard to SAP’s financial situation?

To a very large extent we have concentrated our liquidity at SAP SE. It is distributed among a large number of counterparties and invested almost completely short-term. The liquidity reserve has a high priority for SAP. We have a daily overview of the group liquidity and follow a very conservative approach on the investment side by using only standard instruments and short maturities.

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Shareholder Meeting

Where can I find detailed information on SAP´s General Meetings of Shareholders?

Detailed information on our General Meetings of Shareholders can be found in our “Corporate Governance” section.

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Reporting

Which accounting standard does SAP use for its annual financial statements?
Since 2008, SAP prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) endorsed by the European Union (EU). In addition to providing the disclosures required under IFRS, the notes to our statements contain a great deal of additional detail, which we provide voluntarily.
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In what currency are SAP´s results reported?

SAP is a European company, so our results are reported in euros.

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In the first quarter of 2015 SAP has changed its segment reporting, why?

On December 4, 2014, we completed our acquisition of Concur and in the first quarter of 2015 we announced our intention to combine all SAP network offerings (that is, predominantly the activities of the purchased Concur business and the network activities of the Ariba and Fieldglass businesses acquired earlier) and launch the SAP Business Network, a network of networks which covers sourcing, procurement, and travel and expense.

The SAP Business Network qualifies as an operating segment and as a reportable segment under IFRS 8.

Consequently, since the first quarter 2015, SAP has two segments – Applications, Technology & Services and SAP Business Network. These are the components of SAP that our Executive Board, regularly reviews to assess the performance of our Company and for making resource allocation decisions.

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Cloud Reporting

What are the most important cloud reporting metrics for SAP and how are they defined and calculated?

The basis for most of our cloud metrics are non-IFRS cloud subscriptions and support revenue and non-IFRS cloud-related professional services and other service revenue. The two revenue figures can be found directly on the face of our Income Statement. In addition to those we report the non-IFRS deferred cloud subscriptions and support revenue which is a subset of the deferred revenue found on our balance sheet.

In addition, we do also also look at new cloud bookings. This measure reflects the committed order entry from new customers and from incremental purchases by existing customers for offerings that generate cloud subscriptions and support revenue. In this way, it is an indicator for cloud-related sales success in a period and for secured future cloud subscriptions and support revenue. We focus primarily on the average contract value variant of the new cloud bookings measure that takes into account annualized amounts for multiyear contracts. Additionally, we monitor the total contract value variant of the new cloud bookings measure that takes into account the total committed order entry amounts regardless of contract durations. There are no comparable IFRS measures for these bookings metrics.

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What is network revenue?

Although the network revenue is booked along with other cloud revenue in cloud subscriptions and support revenue on the income statement there a two important metrics that help track the network business: We track the number of connected companies to our cloud-based business trading network as well as the trailing twelve month network spend volume, which is the total value of purchase orders transacted on the network in the trailing 12 months.

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Non-IFRS

Why does SAP report Non-IFRS financial results?

SAP reports its financial results in accordance with IFRS and additionally discloses certain financial results on a non-IFRS basis. Certain non-IFRS measures (for example non-IFRS revenue, non-IFRS operating profit and non-IFRS operating margin) are provided both, on a nominal currency basis (as reported basis) and on a constant currency basis.

Read more (PDF)

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XBRL

What is XBRL?
XBRL (eXtensible Business Reporting Language) is an XML-based computer software language for the electronic communication of business and financial data. It is an open standard for financial reporting and provides a unique, electronically readable tag for each individual disclosure item within the financial statements. Each item on the financial statements is tagged with such individualized information, thus permitting the automatic exchange and reliable extraction of financial information. XBRL is not an accounting standard; it is simply a standard for providing an identifying tag for business and financial data. XBRL-tagged data can be read by any software that includes an XBRL processor and thus can be easily transferred between computers.
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What XBRL information do we provide?

Due to our listing in the US, we prepare IFRS Consolidated Financial Statements in accordance with the requirements of the US Securities and Exchange Commission (SEC). Going forward, the SEC is expected to require these consolidated financial statements (form 20-F) to be filed in an XBRL format. Therefore, SAP has decided to publish the consolidated financial statements in XBRL format since fiscal year 2009 already. 

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How did we prepare our XBRL files?

We prepared our XBRL files using the application SAP Disclosure Management. Further information regarding this product can be found at www.sap.com/epm

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What XBRL taxonomies do we use?

The tags used in XBRL data are contained in taxonomies. Taxonomies are dictionaries that define the specific tags that are used for individual items of data (such as "revenue"), their attributes and their interrelationships. We’re using the most up to date XBRL taxonomy as published by the IASB to create XBRL data. 

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What is needed to view the XBRL files?

To view the XBRL data in a readable format, the XBRL files must be loaded into an XBRL viewer. Such a viewer is available for free, for example, on the website of the SEC. For the convenience of the reader, we have also included an HTML version of our XBRL files.

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Where can I find SAP’s most recent XBRL files?

The most recent XBRL files are available in the section Financial Reports.

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Currency Effects

Why does SAP provide constant currency period-over-period numbers?

We believe it is important for investors to have information that provides insight into our sales. Revenue measures determined under IFRS provide information that is useful in this regard. However, both sales volume and currency effects impact period-over-period changes in sales revenue. We do not sell standardized units of products and services, so we cannot provide relevant information on sales volume by providing data on the changes in product and service units sold. To provide additional information that may be useful to investors in breaking down and evaluating changes in sales volume, we present information about our revenue and various values and components relating to operating profit that are adjusted for foreign currency effects. We calculate constant currency revenue and operating profit measures by translating foreign currencies using the average exchange rates from the previous year instead of the current year.

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How does SAP calculate constant currency numbers?

It is a two-step process to get from our IFRS numbers to our constant currency non-IFRS numbers:

Step 1: We eliminate certain effects from our IFRS numbers (see a description of these adjustments in our Explanation of non-IFRS Measures which is available at www.sap.com/investor for more details on these eliminations). The resulting figures are our non-IFRS numbers.

Step 2: We then adjust those non-IFRS numbers by eliminating currency effects. The result is our non-IFRS constant currency financial measures.The elimination of currency effects is achieved by translating foreign currencies using the average exchange rates from the previous year’s period (i.e. quarter) instead of the current year.

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SAP’s guidance format – based on constant currencies

SAP provides a yearly revenue and profit outlook, which is based on non-IFRS at constant currencies. We provide guidance on a non-IFRS constant currency basis because these numbers are used as a basis for SAP’s internal management reporting as well. In addition, we provide guidance at constant currencies since we cannot influence currency movements, and it helps prevent frequent changes in guidance due to fluctuations in currency.

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Products and Markets

What products, solutions and services does SAP offer?

As market leader in enterprise application software and cloud company with the greatest number of users, SAP pursues a commitment to helping companies of all sizes and industries run better. With its software and services offering - whether deployed in the cloud or on-premise -, SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. 

More information can be found on the SAP Solutions page. See also the Products, Research & Development, and Services  section of the Integrated Report.

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What is SAP HANA?

SAP HANA is our platform for in-memory computing.

It combines database, data processing, integration, and application platform capabilities and holds the power to simplify both the user experience and the overall IT landscape.

Enterprises can now reduce their data footprint, increase their system throughput, and simplify their data processing and operation.

For this reason, we have evolved SAP HANA from a database to a full business platform that will act as the basis for our products going forward.

By providing advanced capabilities such as predictive analytics on the same architecture, it further simplifies application development and processing across Big Data sources and structures.

You can find an overview at: http://hana.sap.com/abouthana.html

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What is Cloud Computing?

Cloud Computing is a generic term for flexible, IT-related services available through, or hosted on, the Internet for consumers and business, including storage, computing power, software development environments, and applications, combined with service delivery. Accessed as needed “in the cloud,” these services eliminate the need for in-house IT resources. 

You can find an overview at: http://www.sap.com/pc/tech/cloud.html

For more information on how we report our Cloud results see our Reporting Q & A.

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How much revenue do the most important solutions earn for SAP?

SAP does not publish a breakdown of revenue by product.

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Where are SAP solutions developed?

Nearly all of our software products are developed at our 15 SAP Labs locations in 13 countries across the globe. This global reach means that we have access to leading talent worldwide; in addition, we can collaborate with top universities throughout the world and have access to major technology hubs as well as diverse and vibrant startup communities. By understanding trends in different regions, as well as the specific needs of our customers that operate there, SAP has a major strategic advantage in developing products and services for the future.

For more information see http://www.sap.com/corporate/en/company/innovation/sap-labs.html

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What does SAP spend on research and development annually?

In 2015, we increased our R&D expense (IFRS) by €515 million, to €2,845 million (2014: €2,331 million). We spent 13.7% of total revenue on R&D in 2015 (2014: 13.3%). Our non-IFRS R&D expense as a portion of total operating expenses declined slightly from 18.5% to 18.3% year-over-year.

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What is SAP S/4HANA?

SAP S/4HANA is our next-generation business suite, designed to provide the digital core our customers need to run their entire business in the new digital world.

It represents a huge step forward in simplifying how applications are built, consumed, and deployed. It provides real-time, mission-critical industry-specific business processes across organizations and lines of business.

Companies are now enabled to integrate their core business processes with running their key operations, from their supply chain to their workforce.

With SAP S/4HANA, we provide companies a full business platform to reimagine their businesses and achieve the creation of their own next-generation products and services so critical in the digital economy.

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What is the SAP HANA Cloud Platform?

SAP HANA Cloud Platform is our strategic platform-as-a-service offering.

Providing both ease of use and flexibility, this cloud platform allows our customers and partners to build, extend, run, and sell applications and services in the cloud.

SAP HANA Cloud Platform includes infrastructure, data, and storage, as well as a toolbox of platform and application extension services.

Moreover it enables connectivity between SAP solutions, including on-premise software such as SAP Business Suite as well as software-as-a-service offerings such as SAP SuccessFactors solutions.

For more informations see: https://hcp.sap.com/index.html

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Why does SAP invests in Business Networks?

In today’s hyperconnected business landscape, how companies interact with the outside world is undergoing profound change. At SAP, we are helping to lead this transformation through our business networks, which are helping drive innovation in key areas that impact an organization’s core operations. Our business network strategy is to bring the world’s vast network of partners, suppliers, and services to best-in-class solutions that fulfill the needs of specific lines of business – all within a few clicks. Moving far beyond basic automation, our network solutions are enabling new processes and outcomes for customers.

http://go.sap.com/solution/business-networks.html

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Sustainability

What is SAP’s sustainability strategy?

SAP defines sustainability as the holistic management of social, environmental, and economic risks and opportunities to increase short- and long-term profitability. In line with this definition, we aim to move from a separate sustainability strategy to a sustainable corporate strategy. This means we seek to embed sustainability in everything we do: our solutions, our operations, and our social investment.

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What solutions does SAP offer in the area of sustainability?

SAP helps companies run more sustainably with innovations that increase profits, engage people and communities, and protect natural resources to have a positive economic, environmental, and social impact on the world, and touch the lives of billions of people. Solutions from SAP help the world run better and more sustainably. SAP is helping its customers achieve more sustainable operations through a range of solutions that address energy, environmental, health, and safety needs.

Specifically, SAP enables large and small enterprises to increase long-term and short-term profitability by holistically managing the opportunities and risks associated with economic, environmental, and societal concerns.

For more information, visit http://www.sap.com/solution/lob/sustainability.html

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What is integrated reporting and what is SAP’s involvement in it?

The International Integrated Reporting Council (IIRC, http://www.theiirc.org/) defines integrated reporting as „a process that results in communication, most visibly a periodic ‚integrated report‘, about value creation over time. An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects lead to the creation of value over the short, medium and long term.“ SAP is a member of the IIRC pilot program and published the SAP Integrated Report 2015 – SAP’s fourth integrated report - in March 2016 at www.sapintegratedreport.com.

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What is the employee engagement index?

We define employee engagement as a score for the level of employee commitment, pride, and loyalty, as well as our employees’ feeling of being an advocate of SAP. It is calculated based on the results of regular employee surveys. Employee engagement remains one of SAP’s four corporate strategic goals, along with growth, profitability, and customer loyalty. In 2015, we achieved an overall employee engagement score of 81%, compared to 79% in 2014. We aim at achieving a score of 82% in 2016. For more information, visit the SAP Integrated Report, Employees and Social Investment section.

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Especially considering SAP’s transition to the cloud, what steps is SAP taking to ensure it achieves its carbon reduction target?

SAP aims to reduce greenhouse gas emissions to their year 2000 level by 2020. Since 2014, SAP has been powering all internal and external data centers and facilities globally with 100% renewable electricity. The shift helps minimize the company’s carbon footprint as it moves to a cloud business model, and helps eliminate carbon emissions caused by its customers’ systems by moving them into a green cloud. SAP has developed strict quality guidelines for the procurement of renewable energy certificates together with CDP (formerly Carbon Disclosure Project) and the World Wide Fund for Nature (WWF). These guidelines define the accepted sources of renewable energy (solar, wind, biogas, geothermal, and hydro; biomass is only considered if not related to deforestation), and that the power plant may not be older than 10 years. Further, SAP aims to increase the portion of electric vehicles in its company car fleet to 20 percent by 2020. In alignment with its existing policy for office business and data centers, at SAP locations electric company cars are charged only from 100 percent renewable sources. For more information, visit the SAP Integrated Report, Energy and Emissions section.

In 2015 we reported net emissions of 455 Ktons CO2, a reduction of 9% compared to 2014. 

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What are your global policies that govern employee behavior and avoid corruption?

Our compliance management system details our policies and procedures for ensuring ethical business conduct. Our policies govern the conduct of our management, employees, suppliers and partners, as well as critical areas of our business such as sales, vendor selection, and payroll. In addition, we train employees on the SAP Code of Business Conduct for Employees, which includes guidelines on bribery, antitrust, and a host of other topics. In the case of any breaches of compliance, we take appropriate remedial action. You can find more information in the SAP Integrated Report, Business Conduct section.

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How is your sustainability department structured?

Our goal is to ensure that sustainability is embedded across our business, exemplified by our integrated report and integrated approach to measuring business performance. We have been successful in embedding sustainability professionals across our lines of business, e.g. in development, finance, communications, human resources, IT operations, or facility management. Luka Mucic, CFO of SAP, is the Sustainability sponsor on the SAP Executive Board. This ensures that there is a dedicated Board member overseeing this significant priority, which is a key to our path towards simplification. Daniel Schmid, Chief Sustainability Officer, and his team focus on driving sustainability into SAP’s operations. The sustainability team reports into the office of the CFO. Dieter Haesslein drives the innovation of SAP’s sustainability products as Chief Product Owner of the Sustainability and EHS product unit, part of our development organization.

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How do you ensure data privacy and security

Security has always been a very important topic for SAP and our customers. That is why we introduced a secure software development lifecycle to address security holistically throughout the development process.

Our security standards meet high standards and have been certified in many areas, including data center operations, software operations, business continuity, and internal inspection. Certifications include SOC1 Type II, SOC2 Type II, ISO 27001, ISO 22301, and BS 10012, among others.

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