sap ag profile

7/23/2019 SAP AG Profile

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COMPANY PROFILE

SAP AG

REFERENCE CODE: BAD259E2-8800-4E53-8366-80B825AB36A2

PUBLICATION DATE: 30 Jun 2014

www.marketline.comCOPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED.


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TABLE OF CONTENTS

Company Overview..............................................................................................3

Key Facts............................................................................................................... 3

Business Description...........................................................................................4

History................................................................................................................... 5

Key Employees...................................................................................................11

Key Employee Biographies................................................................................12

Major Products and Services............................................................................20

Revenue Analysis...............................................................................................22

SWOT Analysis...................................................................................................24

Top Competitors.................................................................................................30

Company View.....................................................................................................31

Locations and Subsidiaries...............................................................................33

SAP AG Page 2 MarketLine

SAP AGTABLE OF CONTENTS
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COMPANY OVERVIEW

SAP AG (SAP or the company) is engaged in selling licenses for enterprise application softwareproducts, solutions, and cloud subscriptions. In addition, the company also offers support, consulting,development, training, and other services for its software solutions. SAP operates in the Americas,Europe, the Middle East and Africa (EMEA) and Asia Pacific Japan (APJ). It is headquartered inWalldorf, Germany and employed 66,572 people as of December 31, 2013.

The company recorded revenues of E16,815 million ($22,330.3 million) during the financial yearended December 2013 (FY2013), an increase of 3.6% over FY2012.The operating profit of thecompany was E4,479 million ($5,948.1 million) in FY2013, an increase of 10.8% over FY2012.Thenet profit was E3,326 million ($4,416.9 million) in FY2013, an increase of 18.7% over FY2012.

KEY FACTS

SAP AGHead OfficeDietmar-Hopp-Allee 1669190 WalldorfDEU

49 6227 7 47474Phone

49 6227 7 57575Faxhttp://www.sap.comWeb Address

16,815.0Revenue / turnover(EUR Mn)

DecemberFinancial Year End

66,572Employees


SAP AGCompany Overview


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BUSINESS DESCRIPTION

SAP AG (SAP or the company) is one of the leading companies offering enterprise applications interms of software and software related services. The company's core business includes sellinglicenses for on-premise software products, solutions, and the use of its cloud subscription solutions.SAP also derives revenue from its support, consulting, development, training, and other services.SAP serves more than 253,500 customers in over 180 countries.

The company markets and distributes its products and services primarily through a worldwide networkof local subsidiaries, which are licensed to distribute SAP products to customers in defined territories.The company also has distributorship agreements with independent resellers in some countries.

SAP primarily operates through two divisions: on-premise and cloud, which are further divided intooperating sub segments.The on-premise division is comprised of two operating segments: on-premiseproducts and on-premise services.The cloud division is comprised of cloud applications and Ariba.

The on-premise division is primarily engaged in the sale of on-premise software, mobile softwareand related software services.Within the on-premise division, the on-premise products segment isprimarily engaged in marketing and licensing SAP's on-premise and mobile software products andproviding support services for these software products. The on-premise services segment primarilyperforms various professional services, such as implementation services of SAP's software productsand educational services on the use of SAP's software products.

The cloud division is primarily engaged in the sale of cloud software and related services, includingsupport services, professional services, and educational services. Within the cloud division, thecloud applications segment is primarily engaged in marketing and selling subscriptions of cloudsoftware offerings developed by SAP and SuccessFactors. The Ariba segment primarily marketsand sells the cloud software offerings developed by Ariba and derives revenue from its cloud-basedcollaborative business network.


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Business Description


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HISTORY

In 1972, SAP AG (SAP or "the company") was established as Systems, Applications, and Productsin data processing by five former IBM systems engineers. In 1973 and 1979, the company launchedR/1 Solutions and R/2 Solutions, respectively. In 1988, SAP GmbH became SAP AG. In the sameyear, the company's shares were listed on the Frankfurt and Stuttgart stock exchanges. In 1992,SAP launched its R/3 Solutions. In 1996, the company provided the first SAP internet enabledsolutions. In the following year, solutions for customer relationship management, supply chainmanagement and business intelligence were launched, increasing the company's suite of customerspecific software.The following year, saw the delivery of industry solution maps, business technologymaps, and service maps for customer life-cycle solutions and support.

In 1998, the company was listed on the New York Stock Exchange. In 2000, Statoil, the world'ssecond-largest supplier of crude oil, and SAP entered into a joint venture to co-develop the first openglobal online marketplace for the oil and gas industry.

In 2002, SAP acquired Israeli management and accounting specialist TopManage. In the same year,the company combined two of its subsidiaries, SAP Markets and SAP Portals into one subsidiary.In 2002, SAP created SAP Global Custom Development Services organization.

In 2004, the company and beverage company Coca-Cola joined hands for a strategic developmentinitiative that would result in a new generation of solutions to improve direct store delivery, vendingand equipment service for the beverage and other consumer products. Also, in the same year, the

company launched its new version of mySAP Supply Chain Management.

In 2005, SAP acquired TomorrowNow, a software maintenance provider based in the US. In thesame year, the company also purchased DCS Quantum, a vehicle dealer management system,from DCS Automotive. In the same year, SAP acquired Lighthammer Software Development, aprivately held supplier of enterprise manufacturing intelligence and collaborative manufacturingsoftware. Also, in the same year, the company inaugurated its 10th research and development centerin Budapest, Hungary. In the same year, SAP acquired privately held Triversity of Toronto, Canada,a provider of point of sale software solutions. In the same year, the company acquired Khimetrics,a privately held provider of enterprise software solutions based in the US.

In 2006, the company acquired Virsa Systems, a private supplier of cross-enterprise compliance

solutions. In the same year, the company also acquired Frictionless Commerce, a provider ofrelationship management software. In the same year, SAP made an investment in Questra, a providerof intelligent device management, for the development of new solutions on the SAP NetWeaverplatform. Also, in 2006, the company made a minority investment in Visiprise, a provider of businesssolutions, for integrated manufacturing operations.

In 2007, SAP acquired Pilot Software, a privately-held company specializing in strategy managementsoftware. In the same year, SAP made a minority investment in Conformia Software, a provider of


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History


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enterprise solutions for product and process lifecycle management (PPLM) across regulated processmanufacturing industries such as life sciences and alcoholic beverages. In 2007, SAP acquiredWicom Communications, a privately-held provider of all-IP contact center and enterprisecommunications software based in Espoo, Finland. During the same year, the global IT servicesdivision of Indian IT services vendor Wipro and SAP expanded their existing partnership. In 2007,SAP acquired YASU Technologies, a privately held provider of business rules management systems.

In 2008, the company launched joint offerings following the acquisition of enterprise software companyBusiness Objects.The joint offerings included packages to addresses the business challenges suchas corporate compliance, business performance, and business insights among others. In the sameyear, SAP and its subsidiary SAP Japan and Japanese multinational NEC opened the 'SAP GlobalCompetence Center' in Walldorf, Germany.

In the year 2008, SAP acquired Visiprise, a privately-held provider of manufacturing executionsoftware solutions delivering integrated manufacturing operations to companies of all sizes. In 2008,SAP opened a second SAP Co-Innovation Lab in Ohtemachi, Tokyo, Japan. Also, in the same year,the company closed the operations of TomorrowNow that provided third-party support for Oracleand other applications. In the same year, the company launched SAP EcoHub, an online marketplacethat accelerates the discovery, evaluation and purchase of partner solutions complementing SAPofferings. In the same year, SAP launched a new public security research lab in Darmstadt, Germany.

In 2009, American multinational technology and consulting company IBM and SAP launched theirfirst joint software product, Alloy software that combines IBM Lotus Notes software with SAP BusinessSuite. In the same year, the company introduced the SAP Investigative Case Management for PublicSector to support police and other investigating authorities in preventing, detecting and investigating

crime. In the same year, the company partnered with enterprise software and services companySybase to deliver the new SAP Business Suite software to iPhone, Windows Mobile, BlackBerryand other devices by integrating it with Sybase's mobile enterprise application platform. In 2009, thecompany opened SAP Co-Innovation Lab, at SAP Labs India in Bangalore, to foster co-innovationand streamlining collaboration with partners and customers.

In 2009, SAP agreed to acquire Highdeal, a privately held provider of real-time billing solutions fortelecommunications. In the same year, the company also signed an agreement to acquire ClearStandards, a privately held innovator of enterprise carbon management solutions. In the same year,SAP introduced new versions of SAP BusinessObjects Risk Management and SAP BusinessObjectsProcess Control which automates and unifies risk and compliance initiatives. In 2009, the companyacquired the majority shareholding in 'SAF Simulation Analysis and Forecasting' (SAF), a provider

of forecasting and replenishment software. In the same year, SAP partnered with Americanmultinational Microsoft and management consulting and technology company Accenture to developa global carbon reporting, benchmarking, and analytics system for the Carbon Disclosure Project(CDP), a carbon reporting initiative.

In 2010, the company introduced SAP Best Practices packages for sustainability, including the SAPBest Practices for Analytics in Health and Safety, SAP Best Practices for Analytics in Product Safetyand Stewardship and SAP Best Practices for Analytics in Environmental Compliance packages. In


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the same year, the company signed an agreement to acquire TechniData, a provider of productsafety and environment, health and safety (EHS) solutions.

Also during 2010, SAP America signed a definitive merger agreement to acquire Sybase for anenterprise value of approximately $5.8 billion. Later in the year, German chemical and pharmaceuticalcompany Bayer finalized a global enterprise agreement with SAP, under which, the two companieswould focus on supporting Bayer's IT strategy based on the comprehensive, long-term deploymentof standardized SAP solutions across Bayer's worldwide operations. In 2010, the company completedthe acquisition of Sybase.

Also, in 2010, SAP created an iPhone application for the SAP Business ByDesign solution andlaunched on Apple iTunes Store. In the same year, SAP and Siemens IT Solutions and Servicesfinalized a mutual working agreement for establishing an eCar proof of concept. In 2010, the company

signed an agreement to acquire disclosure management solutions from Cundus.

In the second quarter of 2011, the company renewed its reseller partnership with IBM for the IBMSPSS Modeler solution. In the following quarter, SAP opened up mobile solutions from the Sybaseportfolio to partners within the company's global ecosystem.

In the third quarter of 2011, the company signed an agreement to acquire Right Hemisphere, aprovider of visual enterprise solutions. Subsequently, in the same quarter, SAP signed an agreementto acquire business-to-business (B2B) integration provider Crossgate. Later in the same quarter,Capgemini, a provider of consulting, technology and outsourcing services, entered into a strategicrelationship with Sybase, a SAP company, to manage the deployment of enterprise mobility solutions.

In the last quarter of 2011, SAP and multinational IT corporation HP entered into an agreement forHP Enterprise Services to provide cloud-based delivery of SAP applications. Subsequently, in thesame quarter, the company and the United Nations Population Fund (UNFPA), unveiled two interactivepopulation dashboards using business analytics technology from SAP to help create greatertransparency and awareness around core UN population data and trends. In the last quarter of 2011,SAP America, a SAP company, entered into a definitive merger agreement to acquire SuccessFactors,a provider of cloud-based human capital management (HCM) solutions for approximately $3.4 billion.The acquisition was completed in the first quarter of 2012. In the same quarter, the company openeda SAP Labs location in Skolkovo, Russia.

In early 2012, the company agreed to acquire software and relevant assets from datango, a providerof workforce performance support software. In the same year, SAP acquired SAF Simulation, Analysisand Forecasting, a provider of automated ordering and forecasting software. Also, during the firstquarter of 2012, SAP launched SAP Business One OnDemand solution, a new offering, addressingsmall enterprise preferences for minimal up-front cost and lower IT operations. In the same quarter,the company made a four-year plan worth $450 million to up-skill local talent and drive sustainableinnovation and growth in the Middle East and North Africa region.


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In the second quarter of 2012, the company launched SAP BusinessObjects Predictive Analysissoftware. In the same quarter, SAP signed an agreement to acquire Syclo, a provider of enterprisemobile applications and technologies.

In the following quarter, the company expanded the SAP Labs location in Latin America with theconstruction of an additional building adjacent to its first office at the Technology Center of Unisinosin Sao Leopoldo, Brazil. In the same quarter, the company launched new SAP NetWeaver DecisionService Management software. In the last quarter of 2012, SAP completed the acquisition of Ariba,a cloud-based business commerce network for approximately $4.3 billion. Through the acquisition,SAP will deliver a cloud procurement solution and become the leader in the segment of inter-enterprisecloud-based business networks.

In the same quarter, the company unveiled the SAP NetWeaver Cloud Applications Partner program

giving partners full access to the SAP NetWeaver Cloud service.

In February 2013, SAP and NetApp, a provider of storage and data management solutions, deepenedtheir collaboration to support next-generation solutions, including the SAP HANA platform and SAPNetWeaver Landscape Virtualization Management software. In the following month, SAP signed anagreement to acquire Camilion, a provider of insurance product development, product life-cycle andunderwriting solutions to broaden the SAP solution portfolio in the insurance space.

In May 2013, the company planned to simplify its organizational structure and create a singledevelopment organization to accelerate innovations powered by the SAP HANA platform for existingand new products. In the same month, SAP unified its cloud portfolio with the SAP HANA CloudPlatform to serve companies of all sizes.

Subsequently, in August 2013, SAP completed the acquisition of e-commerce software andmulti-channel solution provider hybris. The two companies plan to combine hybrisomni-channelcommerce solutions with enterprise technology and in-memory, cloud and mobile technology fromSAP to help facilitate new levels of customer insight and engagement.

In the same month, SAP Cloud for Travel solution, designed to manage travel and expenses, startedoffering open booking capabilities in integration with Traxo, a web based travel management provider.

In September 2013, the company entered into an agreement to acquire KXEN, a provider of predictiveanalytics technology. The combination of KXEN with SAP, along with the SAP HANA platform is

expected to help companies harness big data. Moreover, in the same month, SAP partnered withMindtree, a global IT solutions provider to help customers execute cloud strategies on SAP cloudapplications and mobile platforms.

The company entered into collaboration with South Korean multinational conglomerate Samsungto provide mobile security and management solutions for Samsung KNOX, a solution that addressesthe mobile security needs of enterprise IT, in October 2013. In the same month, SAP entered intoa strategic partnership with business analytics software company SAS to advance in-memory dataanalysis capabilities for businesses across industries. As part of the partnership, the companies


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History


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intend to create a joint technology and product roadmap designed to leverage the SAP HANA platformand SAS analytics capabilities. Subsequently, the company and big data analysis solutions providerVendavo expended their development road map and partnership based on the SAP HANA platformaimed at providing customers with new real-time profit optimization solutions.

In November 2013, Rolta and SAP entered into a strategic original equipment manufacturer (OEM)agreement, under which, Rolta will integrate several industry solutions with platform technology fromSAP. In the same month, the company and China Telecom entered into a strategic partnership incloud computing pursuant to which the SAP Cloud portfolio will be offered to small and largeorganizations in China by China Datacom, a joint venture between SAP and China CommunicationServices. Subsequently, SAP established a University Competence Center to support local universitiesby offering students access to the SAP software.

Japanese multinational NEC entered into an OEM agreement with SAP to integrate the SAP BusinessByDesign solution with its global cloud-based ERP services, in January 2014. In the same month,Hitachi, Hitachi Data Systems, and SAP expanded their worldwide alliance by signing a global OEMagreement that introduced plans to include SAP HANA delivered by Hitachi Data Systems.

In February 2014, SAP became a sector member of the International Telecommunication Union, aspecialized agency of the United Nations. In the same month, Mexican integrated telecommunicationsservices operator Maxcom Telecommunications selected SAP ERP application and solutions fromthe SAP Cloud portfolio to enhance operational flexibility and support a process of internalreengineering. Subsequently, the company expanded its relationship with DigitalRoute, a providerof new approaches to Big Data management.The partnership is aimed at enhancing customerexperience for telecommunications companies. During the same month, SAP launched a new and

expanded version of the cloud-based SAP Learning Hub site, which provides easy access toeducational content on a range of SAP solutions. Also, in the same month, the company developeda technology infrastructure for in-vehicle mobility services in collaboration with BMW Group Researchand Technology, a wholly-owned subsidiary of automotive company BMW. The research prototypeis based on the SAP HANA Cloud Platform and will provide personalized services to drivers basedon their location and route.

In the following month, SAP signed an agreement to acquire Fieldglass, a technology provider forprocuring and managing contingent labor and services. Fieldglasscloud-based Vendor ManagementSystem (VMS) solution when combined with the capabilities of Ariba and SuccessFactors, positionsSAP to deliver a platform for businesses to manage their entire workforce from initial recruiting andon-boarding to ongoing development, performance management, retention and retirement. During

the same month, SAP and Accenture decided to create a new business group focused on acceleratingthe time it takes to jointly develop and deliver new industry-specific solutions based on cloud andother digital technologies. Also, in March 2014, SAP launched a rapid-deployment solution thatenables businesses embracing bring-your-own-device (BYOD) policies to offer secure mobile devices,content and apps.


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In April 2014, SAP undertook an initiative with two of its partners, software and consulting companyCOMPIRICUS and SAP consultant ConVista Consulting, to expand the availability of the SAPFinancial Asset Management application to insurance companies in North America.

In May 2014, SAP announced plans to acquire SeeWhy, a provider of cloud-based behavioral targetmarketing solutions to help businesses increase customer engagement.The addition of SeeWhycomplements the commerce platform of hybris, an SAP company, with 1-to-1 personalized marketingbased on real-time customer behavior that converts customer interactions into sales. In the samemonth, the shareholders of SAP approved the conversion of the company's legal form to a Europeanstock corporation (Societas Europaea, SE).The conversion of the company's legal form is expectedto take place in July 2014.


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KEY EMPLOYEES

CompensationBoardJob TitleName

331700 EURNon Executive BoardChairman of the Supervisory BoardHasso Plattner

210800 EURNon Executive BoardDeputy Chairperson of theSupervisory Board

Christiane Kuntz-Mayr

180000 EURNon Executive BoardMember of the Supervisory BoardPekka Ala-Pietila

170000 EURNon Executive BoardMember of the Supervisory BoardPanagiotis Bissiritsas

160800 EURNon Executive BoardMember of the Supervisory BoardAnja Feldmann

190800 EURNon Executive BoardMember of the Supervisory BoardWilhelm Haarmann

170000 EURNon Executive BoardMember of the Supervisory BoardMargret Klein-Magar

170800 EURNon Executive BoardMember of the Supervisory BoardLars Lamade

180000 EURNon Executive BoardMember of the Supervisory BoardBernard Liautaud

160800 EURNon Executive BoardMember of the Supervisory BoardHartmut Mehdorn

170000 EURNon Executive BoardMember of the Supervisory BoardKurt Reiner

159200 EURNon Executive BoardMember of the Supervisory BoardMario Rosa-Bian

185000 EURNon Executive BoardMember of the Supervisory BoardErhard Schipporeit

175800 EURNon Executive BoardMember of the Supervisory BoardStefan Schulz

175000 EURNon Executive BoardMember of the Supervisory BoardInga Wiele

175000 EURNon Executive BoardMember of the Supervisory BoardKlaus Wucherer

9612300 EURSenior ManagementChief Executive OfficerBill McDermott

3877900 EURSenior ManagementChief Financial Officer, HumanResources and Labor RelationsDirector

Werner Brandt

3865900 EURSenior ManagementHead of Scale, Quality and SupportBoard

Gerhard Oswald

Senior ManagementPresident, Global CustomerOperations

Robert Enslin

Senior ManagementHead of Products and InnovationBernd Leukert

Senior ManagementHead of Global FinanceLuka MucicSenior ManagementExecutive Vice President and

General Manager, Global MobilitySolutions

Rick Costanzo

Senior ManagementGlobal Head of Human ResourcesStefan Ries

Senior ManagementChief Information Officer and Headof Cloud Delivery

Ingrid-Helen Arnold


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KEY EMPLOYEE BIOGRAPHIES

Hasso Plattner

Board: Non Executive BoardJob Title: Chairman of the Supervisory BoardSince: 2003Age: 70

Dr. Plattner has been the Chairman of the Supervisory Board at SAP since 2003. He is one of thefounders of the company. Dr. Plattner served at SAP in various senior management roles, including

the Vice Chairman of the Executive Board from 1988 to 1997; the Chairman of the Executive Boardand the Chief Executive Officer from 1997 to 2003. He also founded the Hasso Plattner Institute(HPI) for IT Systems Engineering at the University of Potsdam. Dr. Plattner is a Professor at the HPIfor enterprise software systems.

Christiane Kuntz-Mayr

Board: Non Executive BoardJob Title: Deputy Chairperson of the Supervisory BoardSince: 2012Age: 51

Ms. Kuntz-Mayr has been the Deputy Chairperson of the Supervisory Board at SAP since 2012.She is the Deputy Chairperson of the Works Council at the company and also serves on the SAPEuropean Works Council. Ms. Kuntz-Mayr was a Member of the Supervisory Board at SAP from2002 to 2007, and was elected to the Supervisory Board again in 2009. She joined SAP in 1988from BULL where she served as a Consultant. Ms. Kuntz-Mayr held various positions at SAP indevelopment and management before being released for Works Council duties in 2008. She alsoserves on the Humboldt-Viadrina School of Governance Round Table for Business and SocialPartnership in Berlin.

Pekka Ala-Pietila

Board: Non Executive BoardJob Title: Member of the Supervisory BoardSince: 2002Age: 57

Dr. Ala-Pietila has been a Member of the Supervisory Board at SAP since 2002. He is the ChiefExecutive Officer and co-Founder at Blyk, a mobile media company. Prior to that, Dr. Ala-Pietilaspent over 20 years at Nokia. From 1992 to 1998 he was the President at Nokia Mobile Phones,


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and from 1999 through 2005, he was the President at Nokia and the Head of Customer MarketOperations. Dr. Ala-Pietila currently serves as the Chairman of the Board at Solidium. He is anHonorary Member at Ornamo, the Finnish Association of Designers.

Panagiotis Bissiritsas


Mr. Bissiritsas has been a Member of the Supervisory Board at SAP since 2007. He is a Memberof the General and Compensation Committee, Finance and Investment Committee at the company.

Mr. Bissiritsas is a Support Expert.

Anja Feldmann


Dr. Feldmann has been a Member of the Supervisory Board at SAP since 2012. She is a Professorat Deutsche Telekom Laboratories. Prior to this, Dr. Feldmann was a Professor at the Electrical

Engineering and Computer Science Faculty at the Technische Universitat Berlin. Previously, shewas a Professor in the computer science department at the Technische Universitat Munchen andthe Universitat des Saarlandes. Prior to that, Dr. Feldmann was a Member of the IP NetworkMeasurement and Performance Department at AT&T Labs-Research.

Wilhelm Haarmann


Dr. Haarmann has been a Member of the Supervisory Board at SAP since 1988. He has been aPartner at the international law firm Linklaters since March 2013. Dr. Haarmann is also the Chairmanof the tax committee at the Institute of Public Auditors in Germany (IDW) and a Member of theExecutive Board at the International Fiscal Associations German section. From 2005 until 2009, hewas a Member of the Executive Board at the German Private Equity and Venture Capital Association.Until 2007, Dr. Haarmann was a Member of the World Economic Forum for 15 years. Beforeco-founding HAARMANN Partnerschaftsgesellschaft, he was a Partner at Peat Marwick Mitchelland then co-founded Haarmann, Hemmelrath & Partner in 1987. Dr. Haarmann is a Honorary




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Professor of tax law at the University of Bamberg. He is also the Chairman of the Supervisory Boardat CinemaxX, Hamburg, Germany.

Margret Klein-Magar


Ms. Klein-Magar has been a Member of the Supervisory Board at SAP since 2012. She is theChairperson of the SpokespersonsCommittee of Senior Managers at the company. Ms. Klein-Magaralso serves as the Vice President of SAP Transformation at the company. She joined SAP in 1991,

working on technology platform development and in service and support. From 2000 to 2007, Ms.Klein-Magar headed a global product management organization in the technology platform field.Subsequently, she drove change management and transformation at SAP development until 2011.She has also chaired the committee of senior management spokespersons at SAP since 2007.

Lars Lamade


Mr. Lamade has been a Member of the Supervisory Board at SAP since 2002. Between 1999 and2001, he was responsible for supporting the Marketing and Business Development departments inthe Global Partner Program. In 2002, Mr. Lamade was elected as an Employee Representative onthe Supervisory Board, a position that he has held for the last 10 years. In 2003, he transferred toHuman Resources, where he was responsible for graduate recruitment. Since 2004, Mr. Lamadehas worked as a Project Manager at the OPD Operations Office.

Bernard Liautaud


Mr. Liautaud has been a Member of the Supervisory Board at SAP since 2008. He is a GeneralPartner at Balderton Capital, a venture capital firm in Europe. Mr. Liautaud founded Business Objectsin 1990 and served as its Chief Executive Officer for 15 years. He is also a Member at Cap GeminisBoard of Directors. Mr. Liautaud is a Member at the Board of Fondation MSF (Doctors withoutBorders). In addition, he also serves on the Boards of Directors at nlyte Software, Talend, Quickbridge




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(UK), SCYTL Secure Electronic Voting, Abiquo, Vestiaire de Copines, Recorded Future, Qubit Digital,eWise, and Dashlane.

Hartmut Mehdorn


Dr. Mehdorn has been a Member of the Supervisory Board at SAP since 1998. He has been theChief Executive Officer at Flughafen Berlin-Brandenburg (FBB) since 2013. From 1966 to 1978, Mr.Mehdorn worked at VFW, most recently as the Production Head at MBB. From 1979 to 1984, he

was a Member of the Management at Airbus Industrie. Between 1984 and 1989, Mr. Mehdorn wasthe Head at the MBB Transport- und Verkehrsflugzeuge and from 1985 was also a Member at theMBB management team in Munich. From 1989 to 1992, he was the Chairman at Deutsche Airbusfrom 1992 to 1995 and was a Member of the Board at Deutsche Aerospace. Mr. Mehdorn also servedas the Chairman of the Board at Heidelberger Druckmaschinen and was also a Member of the Boardat RWE. He also served as the Chief Executive Officer and the Chairman of the Board at DeutscheBahn.

Kurt Reiner

Board: Non Executive Board

Job Title: Member of the Supervisory BoardSince: 2012Age: 55

Dr. Reiner has been a Member of the Supervisory Board at SAP since 2012. He joined the companyas a Software Developer in 1989 and is currently a Development Expert. Dr. Reiner has served onthe SAP Works Council since 2006. He worked in pure research before joining SAP.

Mario Rosa-Bian


Mr. Rosa-Bian has been a Member of the Supervisory Board at SAP since 2012. He has served onthe Works Council at SAP Deutschland since 2006. Mr. Rosa-Bian is a qualified Wholesale andExport Commercial Officer and began his career at Rank Xerox in 1973 in the field of organizationand rationalization. He advanced to the consulting division at Nixdorf Computer in 1984 and then toSAP in 1987. Mr. Rosa-Bian is the Chairman at the ver.di members' group at SAP.


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Key Employee Biographies


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Erhard Schipporeit


Dr. Schipporeit has been a Member of the Supervisory Board at SAP since 2005. He is an independentManagement Consultant. Dr. Schipporeit is a Non-Executive Director at TUI Travel, and is a Memberof several Supervisory Boards, including Deutsche Borse, Talanx, BDO and HanoverRueckversicherung. He started his career in 1979 at Bosch and in 1981 joined VARTA AG/VARTABattery, where he became the Chief Financial Officer in 1990 and the Chief Executive Officer andChairman of the Executive Board in 1993.

Stefan Schulz


Mr. Schulz has been a Member of the Supervisory Board at SAP since 2002. He joined the companyin 1998 and currently serves as a Development Project Manager. Before SAP, Mr. Schulz workedin strategy consulting and in executive recruitment.

Inga Wiele


Ms. Wiele has been a Member of the Supervisory Board at SAP since 2012. She has been a SAPemployee since 2000 and currently serves as a Senior Internal Strategic Consultant. During hercareer at SAP, Ms. Wiele also served at the company's financial and business warehousingdevelopment teams and on the sales force. Before joining SAP, she worked in Germany and inBoston as a SAP Consultant with one of the company's partners.

Klaus Wucherer





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Dr.Wucherer has been a Member of the Supervisory Board at SAP since 2007. He is the Presidentat the International Electrotechnical Commission. Dr. Wucherer is also the Managing Director at theDr. Klaus Wucherer Innovations and Technologieberatung. He is also a Member of the SupervisoryBoards at Leoni, Durr, Festo and Heitec. Previously, from 1999 through 2007, Dr. Wucherer was aMember of the Corporate Executive Committee at Siemens. He started his career at Siemens in1970 as a Project Engineer. Dr. Wucherer is an Honorary Professor at the Technical University ofChemnitz, Osnabruck University of Applied Sciences and Tongji University in Shanghai, China. Heis the Chairman of the Board of Trustees at IPK-Berlin.

Bill McDermott

Board: Senior ManagementJob Title: Chief Executive Officer

Age: 52

Mr. McDermott is the Chief Executive Officer at SAP. He joined the company in 2002 and becamea Member of its Executive Board in 2008. Besides the duties as the Chief Executive Officer, Mr.McDermott is responsible for strategy, governance, business development, corporate development,sales and ecosystem activities, communications, and marketing. Prior to joining SAP, he served asa global executive in several technology companies. Mr. McDermott also serves as a Director atANSYS and Under Armour. He is also a Member of the Deans Advisory Council at Villanova Schoolof Business.

Werner Brandt

Board: Senior ManagementJob Title: Chief Financial Officer, Human Resources and Labor Relations DirectorSince: 2013Age: 60

Dr. Brandt has been the Chief Financial Officer at SAP since 2001 and has been the HumanResources Officer and Labor Relations Director at the company since 2013. He is responsible forfinance and administration including investor relations and data protection and privacy. Prior to

joining SAP, Dr. Brandt was the Chief Financial Officer and Member of the Executive Board atFresenius Medical Care since 1999. In this role, he was also responsible for labor relations. Before

joining Fresenius Medical Care, Dr. Brandt headed the finance function of the European operations

at Baxter International. He is also a Member of the Supervisory Board at Deutsche Lufthansa,QIAGEN, and RWE.

Gerhard Oswald

Board: Senior ManagementJob Title: Head of Scale, Quality and Support BoardAge: 60


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Mr. Oswald serves as the Head of Scale, Quality and Support Board at SAP. He is also a Memberof the Executive Board and the Global Managing Board at the company. Mr. Oswald joined SAP in1981 and subsequently was responsible for developing the sales support network for the SAP R/2software and quality control in the development of the SAP R/3 software. From 1987 to 1993, hewas a Member of the project management team responsible for conceiving, developing, and deliveringSAP R/3. In 1994, Mr. Oswald assumed responsibility for the SAP R/3 Services division, and wasappointed as a Member of the SAP Executive Board in 1996.

Robert Enslin

Board: Senior ManagementJob Title: President, Global Customer Operations

Mr. Enslin serves as the President of Global Customer Operations at SAP. He has been a Memberof the SAP Global Managing Board since 2012. Previously, Mr. Enslin held several positions at thecompany, including the President of SAP North America; the Chief Operating Officer and the ExecutiveVice President of Fast Growth Markets; the Interim President and Chief Executive Officer of SAPLatin America; and the President and Chief Executive Officer at SAP Japan. He also serves as theChairman of the Board at SAP China. Before joining SAP in 1992, Mr. Enslin spent 11 years invarious roles in the IT industry.

Bernd Leukert

Board: Senior Management

Job Title: Head of Products and Innovation

Mr. Leukert is the Head of Products and Innovation at SAP. He has been a Member of the GlobalManaging Board at the company since 2013. Mr. Leukert is responsible for on-premise applicationand SAP Business One development and support, Globalization Services, and Applications InstalledBase Maintenance and Support. He joined the company in 1994 and has held various managementpositions in application development, technology development, software engineering, and processgovernance. Mr. Leukert began as a Software Developer for SAP R/3 and then took on responsibilitiesas Project Lead for international customer development projects.

Luka Mucic

Board: Senior ManagementJob Title: Head of Global Finance

Mr. Mucic is the Head of Global Finance at SAP. He previously served as the Chief Financial Officerfor Global Customer Operations and the Head of Global Field Finance at the company. From 2008to 2012, Mr. Mucic served as the Chief Financial Officer at SAP's DACH region (Germany, Austria,and Switzerland) and at SAP Deutschland. Prior to that, he served in various executive roles withinthe Global Finance and Administration board area, overseeing merger and acquisition activities,


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heading SAP's Global Risk Management organization, and leading the legal function at SAP MarketsEurope. Mr. Mucic began his career at SAP in 1996 as a Member of SAP's Corporate Legaldepartment, where he focused on corporate and commercial law.

Rick Costanzo

Board: Senior ManagementJob Title: Executive Vice President and General Manager, Global Mobility SolutionsSince: 2014

Mr. Costanzo has been the Executive Vice President and General Manager of Global MobilitySolutions at SAP since February 2014. He has over 20 years of experience of serving in seniormanagement roles, including network services, operations, marketing and sales at both BlackBerry

and AT&T. Most recently, Mr. Costanzo was the Executive Vice President of Global Sales atBlackBerry. He currently serves as a Member of the Advisory Board at Mobile World CapitalBarcelona.

Stefan Ries

Board: Senior ManagementJob Title: Global Head of Human ResourcesSince: 2014

Mr. Ries has been the Global Head of Human Resources at SAP since April 2014. He rejoined SAP

from Egon Zehnder, where he served during the last three years as a Principal Consultant. From2002 and 2010 Mr. Ries held several global and regional leadership positions at SAP s HumanResources organization. Before working at SAP, he held Human Resource leadership positions atCompaq and Microsoft.

Ingrid-Helen Arnold

Board: Senior ManagementJob Title: Chief Information Officer and Head of Cloud DeliverySince: 2014

Ms. Arnold has been the Chief Information Officer and Head of Cloud Delivery at SAP since May2014. From 2012 to 2013, she headed Enterprise Analytics & Innovative Solutions at SAP, drivingthe internal adoption agenda of innovative solutions for SAP and leading several board programs.Before that, Ms. Arnold held various positions within SAP, including the Business Controller for theGlobal Consulting Organization and the Chief Operating Officer for Controlling. She began her careerin the finance department at Lafarge (Canada) before joining SAP in 1996.




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MAJOR PRODUCTS AND SERVICES

SAP AG (SAP or the company) is engaged in selling licenses for enterprise application softwareproducts, solutions, and cloud subscriptions. The company's key products and services include thefollowing:

Business applications:

Business suiteCustomer relationship management (CRM)Enterprise asset managementEnterprise resource planning

Financial managementHuman capital managementProcurementProduct lifecycle managementSupply chain managementSustainability

Database and technology:Application foundationSecurityBusiness process management and integrationCloud computing

Content management and collaborationDatabaseData warehousingEnterprise info managementIn-memory computing (SAP HANA)Information technology (IT) managementMobileData management

Analytics:Applied analyticsBusiness intelligence

Data warehousingEnterprise performance managementGovernance, risk, compliancePredictive analytics

Cloud:ApplicationsBusiness networks


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InfrastructurePlatformSocial collaboration

Mobile:Mobile apps

Mobile apps platformMobile commerce solutionsMobile device managementManaged mobilityMobile services


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REVENUE ANALYSIS

Overview

The company recorded revenues of E16,815 million ($22,330.3 million) during the financial yearended December 2013 (FY2013), an increase of 3.6% over FY2012. For FY2013, the US, thecompany's largest geographic market, accounted for 27.7% of the total revenues.

SAP generates revenues through four segments: on-premise products (78.3% of the total revenuesduring FY2013), on-premise services (16%), cloud applications (3%), and Ariba (2.7%).

Revenues by segment*

In FY2013, the on-premise products segment recorded revenues of E13,227 million ($17,565.5million), an increase of 2.7% over FY2012.

The on-premise services segment recorded revenues of E2,695 million ($3,579 million) in FY2013,a decrease of 9.2% compared to FY2012.

The cloud applications segment recorded revenues of E514 million ($682.6 million) in FY2013, anincrease of 53% over FY2012.

The Ariba segment recorded revenues of E461 million ($612.2 million) in FY2013, an increase of284.2% over FY2012.

*As reported by the company.

Revenues by geography

The US, SAP's largest geographical market, accounted for 27.7% of the total revenues in FY2013.Revenues from the US reached E4,661 million ($6,189.8 million) in FY2013, an increase of 4.5%over FY2012.

Germany accounted for 14.9% of the total revenues in FY2013. Revenues from Germany reached

E2,505 million ($3,326.6 million) in FY2013, an increase of 5.3% over FY2012.

Japan accounted for 3.7% of the total revenues in FY2013. Revenues from Japan reached E624million ($828.7 million) in FY2013, a decrease of 20.9% compared to FY2012.

Rest of Europe, the Middle East and Africa (EMEA) accounted for 32% of the total revenues inFY2013. Revenues from rest of EMEA reached E5,381 million ($7,146 million) in FY2013, an increaseof 5.4% over FY2012.


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Rest of Asia Pacific Japan (APJ) accounted for 11.5% of the total revenues in FY2013. Revenuesfrom rest of APJ reached E1,939 million ($2,575 million) in FY2013, an increase of 4.9% over FY2012.

Rest of Americas accounted for 10.1% of the total revenues in FY2013. Revenues from rest ofAmericas reached E1,705 million ($2,264.2 million) in FY2013, an increase of 4% over FY2012.


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SWOT ANALYSIS

SAP AG (SAP or the company) is engaged in selling licenses for enterprise application softwareproducts, solutions, and cloud subscriptions. SAP's diversified presence across geographies diversifiesits business risks. Furthermore, the company is well positioned to tap into growth opportunitiesoffered across the regions. However, intense competition may lead to pricing pressures therebyadversely impacting the financial performance and market share of the company.

WeaknessesStrengths

Lack of scale and product diversificationDiversified end markets and geographic

reachExtensive partner networkRobust research and developmentcapabilitiesStrong financial position

ThreatsOpportunities

Intense competitionIncreasing adoption of cloud computingRisk from exchange rate fluctuationsGrowing demand for enterprise mobility

Big Data presents growth opportunity

Strengths

Diversified end markets and geographic reach

The company has developed deep expertise within specific industry groups.The company followsa vertical strategy and offers around 25 industry-specific solutions, which are categorized into sixgroups. In FY2013, the energy and natural resources group generated approximately 24.2% of SAP'revenues, followed by consumer (22.5%); discrete manufacturing (17.8%); services (15.8%); publicservices (10.1%); and financial services (9.7%). By catering to diversified industries, the companyreduces vulnerability to industry specific risks and also enhances the revenue generation opportunitiesfor the company.

In addition, SAP has diversified geographic presence with operations in more than 180 countries.For FY2013, SAP derived approximately 27.7% of its revenues from the US; Germany (14.9%);Japan (3.7%); rest of EMEA (32%); rest of APJ (11.5%); and rest of Americas (10.1%). The company'srevenue growth from all the regions has been fairly balanced and all regions except Japan registereda growth on a year on year basis in FY2013. SAP's diversified presence across geographies diversifies


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its business risks. Furthermore, the company is well positioned to tap into growth opportunitiesoffered across the regions.

Extensive partner network

SAP has an extensive partner network, comprising of approximately 11,500 partners as of FY2013.The companys partners operate independently of SAP and complement SAPs business by sellingsoftware, by developing solutions that complement SAP software, and by providing implementationand other services. SAP partners help companies of all sizes identify, purchase, and deploy theideal solutions to address their business needs. SAP value-added resellers (VARs) and multitierdistribution channels offer local market and industry expertise that addresses specific market needs.SAP also engages with the partner community in the development of new solutions, and works withpartners on new product initiatives. SAP has strong partnerships with a broad network of IT

professional services firms that provide consulting, system integration, hosting, education, and more.As of FY2013, the companys partners collectively had more than 380,000 skilled resources in SAPsolutions and technology.

The companys strong partner network provides significant and sustainable value to the companyin expanding its revenues and geographical spread. It also acts as a competitive advantage over itspeers.

Robust research and development capabilities

The company has significant focus on research and development (R&D) activities which enables itto launch new and innovative products. SAP' research is directed towards development of new

products and solutions and towards building technological capabilities in the enterprise applicationsoftware markets.The company is focused on developing innovative technologies and iswell-positioned to participate in future development programs. In addition, it owns a strong portfolioof patents and has several pending patent applications.The company holds 5,500 validated patentsworldwide and of these, more than 700 were granted and validated in FY2013. In FY2013, SAP'sR&D expenditure was E2,282 million ($3,030.5 million), representing approximately 13.6% of itsrevenues.

SAP' strong focus on R&D allowed it to develop new solutions as well as enhance the existingproducts. For instance, in February 2014, the company developed a technology infrastructure forin-vehicle mobility services in collaboration with BMW Group Research and Technology.The researchprototype is based on the SAP HANA Cloud Platform and will provide personalized services to driversbased on their location and route.This collaboration brings SAP one step closer toward making itsvision of the connected car a reality. Also, in March 2014, SAP launched a rapid-deployment solutionthat enables businesses embracing bring-your-own-device (BYOD) policies to offer secure mobiledevices, content and apps.The company's robust R&D capabilities enable it to uphold thetechnological leadership in most of its product segments. It has also enabled SAP to developinnovative products, leading to strong sales.

Strong financial position


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The company reported strong financials in FY2013. For instance, SAP recorded revenues of E16,815million ($22,330.3 million) during FY2013, an increase of 3.6% over FY2012. The operating profitof the company was E4,479 million ($5,948.1 million) in FY2013, an increase of 10.8% over FY2012.The net profit was E3,326 million ($4,416.9 million) in FY2013, an increase of 18.7% over FY2012.As a result, the operating margin and net margin increased from 24.9% and 17.3% in FY2012 to26.6% and 19.8%, respectively in FY2013. The improved margins are an indicator to measure theprofitability of the company, its pricing strategies and its control over the costs. Improved profitmargins indicate the management's efficiency is investing in profitable ventures. Strong financialsenhances its shareholder's value and allows the company to fuel its expansion plans.

Weaknesses

Lack of scale and product diversification

The company lacks the scale and product diversification to compete with other major players. Someof its competitors such as Microsoft and Oracle have greater financial strength and diversified productportfolio. Microsoft reported revenues of $77,849 million during the year ended June 2013, whileOracle recorded revenues of $37,180 million during the year ending May 2013. Comparatively, SAPreported revenues of E16,815 million ($22,330.3 million) in FY2013. In addition, the company lacksproduct diversification when compared to its competitors. SAP concentrates on the business softwaresegment, while competitors also address other segments of the IT market, such as databasemanagement applications, operating systems, desktop applications, and servers. Its major competitor,Microsoft, is diversified into networking, operating systems, hardware and online business services.Oracle provides database and middleware software and applications software for enterprises. SAP's

relative lack of scale and product diversification limits its ability to compete effectively.

Opportunities

Increasing adoption of cloud computing

The worldwide demand for cloud computing services is expected to record strong growth in thecoming years. Cloud computing is a computing infrastructure model, which enables delivery ofsoftware-as-a-service (SaaS).The appeal of cloud computing has been increasing as it enablescompanies to reduce expenses such as upfront royalty or licensing payments, investment in hardware

infrastructure and other operating expenses. Consequently, the demand for cloud computing serviceshas been increasing and is expected to grow rapidly and cross $241 billion by 2020. In addition,public cloud services market is forecast to grow at a CAGR of 23.5% during 2013-17.The marketis expected to be driven by smartphones, tablets and high-speed internet access demand.

SAP has increased its focus on cloud computing in the recent times. The company provides thecomplete set of cloud offerings, including, cloud platform, cloud services, cloud applications, andbusiness network services. To strengthen its presence in the rapidly growing market for cloud


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computing, the company also made a number of significant acquisitions, including Ariba andSuccessFactors. Moreover, in November 2013, SAP and China Telecom entered into a strategicpartnership in cloud computing pursuant to which the SAP Cloud portfolio will be offered to smalland large organizations in China by China Datacom, a joint venture between SAP and ChinaCommunication Services. Further in January 2014, Japanese multinational NEC entered into anOEM agreement with SAP to integrate the SAP Business ByDesign solution with its global cloud-basedERP services. Further in March 2014, SAP and Accenture decided to create a new business groupfocused on jointly developing and delivering new industry-specific solutions based on cloud andother digital technologies.

SAP's increasing presence in the expanding cloud computing domain and the rapidly growing endmarket will provide the company with the steady revenues and increasing customer base.

Growing demand for enterprise mobility

The market for enterprise mobility solutions has been growing at a rapid pace. Increasing mobileworker population, emergence of sophisticated mobile devices such as tablets and smartphonesand introduction of several business applications is expected to drive the market for enterprisemobility over the next few years. According to industry sources, the market for enterprise mobilitysolutions is expected to exceed approximately $174 billion by 2017.

SAP has increased its focus on enterprise mobility solutions in the recent times. For instance, inOctober 2013, the company collaborated with Samsung to provide mobile security and managementsolutions for Samsung KNOX, a solution that addresses the mobile security needs of enterprise IT.Similarly, in March 2013, SAP launched a rapid-deployment solution that enables businesses

embracing bring-your-own-device (BYOD) policies to offer secure mobile devices, content and apps.The SAP Mobile Secure portfolio provides compliant access to corporate data, and with options todeploy on premise, in the cloud or in a hybrid environment, as per the customersneeds.The positiveoutlook for the enterprise mobility solutions and the company's increased focus on this business willenable it to enhance its customer base and market share in the coming years.

Big Data presents growth opportunity

Big Data, which is a primary contributor to the pace of overall data growth, refers to the largerepositories of corporate and external data, including unstructured information created by newapplications, including medical, entertainment, energy and geophysical, social media and other webrepositories. It also refers to the new analytics and other technologies that are available to helppeople do things with the significant amount of enterprise and external data. According to industryestimates, the total amount of digital information is expected to reach 40 zettabytes by 2020. Also,the global Big Data market is expected to reach $48.3 billion by 2018, growing at a CAGR of morethan 40% for the 2012-18 periods. Moreover it is also estimated that, 70% of enterprise organizationswould have either deployed or are planning to deploy Big Data-related projects and programs in2014.


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The company is keen to take advantage of this growth opportunity. SAPs technology strategy centerson SAP HANA as the real-time in-memory computing platform for analytics and applications. SAPHANA enables organizations to analyze business operations based on a large volume and varietyof detailed data in real time.The company has established strategic partnerships with leadingcompanies to enhance its Big Data offerings. For instance, in October 2013, SAP entered into astrategic partnership with business analytics software company SAS to advance in-memory dataanalysis capabilities for businesses across industries. As part of the partnership, the companiesintend to create a joint technology and product roadmap designed to leverage the SAP HANA platformand SAS analytics capabilities. In the same month, the company and big data analysis solutionsprovider Vendavo expanded their development road map and partnership based on the SAP HANAplatform aimed at providing customers with new real-time profit optimization solutions. Further, inFebruary 2014, the company expanded its relationship with DigitalRoute, a provider of newapproaches to Big Data management to enhance the customer experience of telecommunicationscompanies. Moreover, the company entered into an agreement to acquire KXEN, a provider ofpredictive analytics technology, in September 2013. The combination of KXEN with SAP, along withthe SAP HANA platform is intended to help companies harness the Big Data opportunities.

The companys strong presence, increased focus, and the positive outlook for the end market provideit with an opportunity to gain more customers and increase its revenues in future.

Threats

Intense competition

The company operates in a highly competitive and rapidly evolving software industry. SAP's primarycompetitors in applications include IBM, Oracle, and Microsoft.The company's key competitors inanalytics include IBM (Cognos), SAS Institute, and Oracle (Hyperion). The mobile market is stillhighly fragmented. Competitors with offerings that overlap with SAP's include Pegasystems andSpring Mobile Solutions. Similarly, in the cloud market, the company faces line-of-business playerssuch as Salesforce.com, Workday, and NetSuite. In addition, SAP's principal competitors in thedatabase and technology business include IBM, Microsoft, and Oracle. Its offerings also competewith those of specialized vendors in various local markets and sub-segments.

Intense competition may lead to pricing pressures thereby adversely impacting the financialperformance and market share of the company.

Risk from exchange rate fluctuations

SAP operates globally and is exposed to foreign exchange risk arising from various currencies.Themagnitude of foreign exchange exposures changes over time as a function of the company's presencein different markets and the prevalent currencies used for transactions in those markets. SAP'snon-Euro based sales gives rise to substantial foreign exchange exposure. In general, depreciationof another currency relative to the Euro will have a negative impact on the company's sales and


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operating profit. Approximately 71% and 72% of SAP's total revenue in FY2013 and FY2012,respectively, was attributable to operations in non-Euro participating countries.

In addition, foreign currency denominated assets and liabilities together with foreign currencydenominated cash flows from highly probable or probable purchases and sales contribute to foreignexchange exposure.These transaction exposures are managed against various local currenciesbecause of the company's substantial production and sales outside the Euro zone. Since the companyhas subsidiaries outside the Euro zone, the Euro-denominated value of the shareholders' equity ofSAP is also exposed to fluctuations in exchange rates. Exchange rate fluctuations from time to timemay significantly weaken the company's results of operations and financial condition.


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TOP COMPETITORS

The following companies are the major competitors of SAP AG

Microsoft CorporationOracle CorporationInternational Business Machines CorporationNetSuite Inc.Salesforce.com, Inc.SAS Institute Inc.


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COMPANY VIEW

A joint statement by Bill McDermott, the Co-Chief Executive Officer and Jim Hagemann Snabe, theformer Co-Chief Executive Officer at SAP is given below. The statement has been taken from thecompanys 2013 annual report.

Dear Stakeholders,

In 2010, we launched our customer-centric innovation strategy based on a strong conviction thatyesterdays technologies could not solve tomorrows challenges.

We listened to our customers that wanted to adopt innovation faster, analyze unprecedented amountsof data, reach their customers and consumers across all channels, and manage their mobile workers.In response, we expanded our portfolio by investing in cloud-based solutions and mobile technologyand by introducing SAP HANA, our game-changing in-memory technology.

Now, in 2014, it is clear that our strategy was the right one. Today, cloud, mobile, and Big Data arethe dominant themes in the IT industry. With four consecutive years of double-digit growth, oursuccess is evident.We are the fastest-growing mega-cap company in the enterprise software industry.For 2013, we reported 16.9 billion non-IFRS total revenue, with 11% constant currency growth insoftware and cloud subscription revenue (5% at actual currencies). In the same period, our non-IFRSoperating margin increased to 33.5% at constant currencies (32.6% at actual currencies).We havemore than 253,500 customers from companies of all sizes, across 25 industries, in mature as well

as emerging markets.

With the market position and innovation pipeline we have today, we now have a unique opportunityto deliver significantly more value to our customers and reshape the technology landscape for lowercost and higher performance.

The trends we identified in 2010 have only accelerated, and we remain focused and determined towin in rapidly growing areas, especially in cloud and in-memory technology. Our SAP HANAtechnology has evolved from a real-time database to a true in-memory platform. SAP HANA nowallows companies to radically simplify their IT infrastructure. In 2013, we put our entire SAP BusinessSuite on SAP HANA. Going forward, our software portfolio and the innovations of our partnerecosystem will be built on the foundation of SAP HANA. In the three years since its launch, SAPHANA has generated nearly 1.2 billion in revenue and has become one of the fastest growingproducts in the history of enterprise software. In 2013 alone, SAP HANA generated 664 million inrevenue, which is an increase of 69% over the previous year at constant currencies.

Cloud computing has now become mainstream and is a widely accepted delivery model in the UnitedStates, and increasingly in Asia and Europe.The cloud offers an unprecedented opportunity tosimplify software delivery and speed to value as customers get immediate access to innovation. Ourannual cloud revenue run rate reached 1.06 billion at the end of 2013. For the year, we reported


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757 million non-IFRS cloud subscription and support revenue.Today, SAP Cloud powered by SAPHANA is the broadest cloud portfolio in the industry. More than 35 million users work with our solutionsin the cloud, and approximately 1.4 million companies trade over half a trillion U.S. dollars of goodsand services through our cloud-based Ariba Network.

Our strategy was always embedded in a higher purpose and vision to help the world run better andimprove peoples lives.In a world of limited resources, we are proud that, with our solutions, 10million people in South Africa now have access to banking services with their mobile phones, urbangovernments in more than 50 countries deliver better services to their citizens, and people in morethan 21 countries have easier access to education. In addition, we continue to uphold our commitmentto the United Nations Global Compact.

Our non-financial performance indicators remained strong in 2013: We increased our Net Promoter

Score by 3.2 percentage points.We also reduced our carbon footprint by 9% since the beginningof 2008. And, for the seventh time in a row, we have been ranked the number one software companyin the Dow Jones Sustainability Index. As more customers choose our cloud solutions and our datacenters grow, our total energy use will also increase. In 2014, we are addressing this growth bypowering all of our data centers with 100% renewable energy. Moreover, we achieved an employeeengagement score of 77%, which is among the highest benchmarks for this indicator. We areespecially proud of our more than 66,500 employees, and thank them wholeheartedly for their hardwork and innovative spirit.

Our momentum and strong foundation allows us to be bold about our future and set ambitious goals.By 2017, we expect to deliver at least 22 billion in total revenue (thereof 3.03.5 billion from ourcloud business).To capture the growth in the cloud, we have extended the time horizon for our 35%

operating margin target to 2017. Further, we aim to increase customer loyalty by another fourpercentage points in 2014. In addition, we remain committed to increasing our already high level ofemployee engagement to 82% by 2015.

In a world of increasing velocity, innovation is imperative. But innovation must never lose sight ofthe human spirit, which craves simplicity and clarity. That is why our focus now is to simplifyeverything so we can do anything.With this guiding principle, we believe SAP is positioned to deliverprofitable growth and to continue our vision of helping the world run better while improving peopleslives.


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LOCATIONS AND SUBSIDIARIES

Head Office

SAP AGDietmar-Hopp-Allee 1669190 WalldorfDEUP:49 6227 7 47474F:49 6227 7 57575http://www.sap.com

Other Locations and Subsidiaries

SAP BrazilSAP Argentina S.A.Av. das Nacoes UnidasPanamerican Bureau14.171 - Marble Tower - 7 andarSargento Cabral 3770 - Piso 2Vila Almeida Sao Pauloc.p. B1605EFJSP - CEP 04794-000MunroBRABuenos Aires

ARG

SAP Agencia en ChileSAP Canada Inc. - CalgaryRosario Norte N 100855 2nd Street S.WPiso 13Bankers Hall Suite 3900

Las CondesCalgarySantiagoAlberta T2P 4J8CHLCAN

SAP Labs Israel Ltd.SAP Egypt LLC15 Hatidhar st.New Cairo - 5th SettlementRa'anana 43665North 90th St.ISRThe 47th Building 6th Floor

Cairo 11835EGY

SAP Philippines, Inc.SAP China - Beijing Chaoyang

27th Floor NAC Tower12th Floor Tower 232nd Street Bonifacio Global CityChina Central PlaceTaguig City 1632No. 79 Jianguo RoadPHLChaoyang District

Beijing 100025CHN


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SAP India Pvt. Ltd. - BangaloreSAP Australia Pty. Ltd. - Sydney

Wing-A, 2nd Floor, Tower BLevel 7Salarpuria Softzone168 Walker StreetSarjapur Outer Ring RoadNorth SydneyBellandur PostNew South Wales 2060Bangalore 560 103AUSIND


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C o p y r i g h t o f S A P S E M a r k e t L i n e C o m p a n y P r o f i l e i s t h e p r o p e r t y o f M a r k e t L i n e , a

D a t a m o n i t o r b u s i n e s s a n d i t s c o n t e n t m a y n o t b e c o p i e d o r e m a i l e d t o m u l t i p l e s i t e s o r p o s t e d

t o a l i s t s e r v w i t h o u t t h e c o p y r i g h t h o l d e r ' s e x p r e s s w r i t t e n p e r m i s s i o n . H o w e v e r , u s e r s m a y

p r i n t , d o w n l o a d , o r e m a i l a r t i c l e s f o r i n d i v i d u a l u s e .

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