Q4 2023 SAP SE Earnings Call - Press Conference

January 24, 2024

Okay.

Monika Schaller: Good morning and welcome to today's Q4 and Full Year Press Conference. Thank you for joining us here in Walldorf in person and of course, thank you to everyone joining us virtually. I'm Monika Schaller, Chief Communications Officer, and for today's flow we have our CEO, Christian Klein, and our CFO, Dominik Asam, who will talk a little bit about our earnings, full year results, and strategy. Following the presentation, you will have the opportunity for a Q&A session. For everyone being dialed in virtually, you can of course use the tool as of now and ask your questions. With that, Christian, let's not waste time. Over to you.

Okay.

Good morning, and Bell come to today's fourth quarter and full year Press conference. Thank you for joining us here in vials of in person and of course, Thank you to everyone. Joining us virtually I'm wanting to shatter Chief Communications officer and for today's floral behalf O S T or Christian Klein and O S. T F O Dominic Awesome, who will talk.

Thank you for joining us here in Waldorf in person and of course thank you to everyone joining us virtually. I'm Monika Schaller, Chief Communications Officer, and for today's flow we have our CEO Christian Klein and our CFO Dominique Arsum who will talk a little bit about our earnings, full year results and strategy. Following the presentation you will have the opportunity for a Q&A session and for everyone being dialed in virtually you can of course use the tool as of now and ask your questions. And with that, Christian, let's not waste time. Over to you. Yeah, thanks.

Christian Klein: A little bit about our earnings full year results and strategy. Following the presentation, you would have to opportunity for a Q&A session and for everyone being dialed in virtually you'll kind of course use the tool as of now and ask your questions and if that's kristian, let's not waste time over to you yeah. Thank you Monica.

Christian Klein: Yeah. Thank you, Monika. Thanks to everyone who is joining us here on site despite the train strike here in Germany. Of course, also a very warm welcome to those of you who are joining us virtually from all over the world. It's still January, so I guess it's fair to say also a Happy New Year to everyone. The mic is on, that helps. Thanks a lot, Monika. Look, 2023 earnings, what a great year for SAP. I mean, we met and exceeded the outlook on all key metrics. This is also a day when you remember back when we were sitting here three years ago. We just started the transformation of SAP, and we made a promise that we are going to accelerate cloud revenue and that we come back to profitable growth, and we delivered.

Kristian: Thanks to everyone, who is joining us onsite despite a train to Ikea in Germany.

Christian Klein: See ya.

Christian Klein: Thanks for watching!

Speaker Change: Wayne Dwight,

Speaker Change: and of course also a very warm welcome to those

Kristian: It's also a very warm welcome to those of you who are joining us virtually from all over the world and it's still January So I guess, it's fair to say also a happy new year to everyone.

Speaker Change: Thank you for joining us.

Speaker Change: And it's still January, so I guess it's fair to say also a Happy New Year to everyone.

Kristian: And the microphone that helps thanks, a lot moniker.

Speaker Change: And the mic is on. That helps. Thanks a lot, Monika.

Speaker Change: Look, 2023 earnings, what a great year for SAP. I mean, we meet and exceeded the outlook on all key metrics. And this is also a day when you remember back when we were sitting here three years ago, we just started the transformation of SAP.

Kristian: Look 2023 earnings.

Waterway T F O S. A P. I mean, we meet or exceeded.

Kristian: The outlook on all key metrics.

Kristian: And this is also the day when you remember back when we were sitting here three years ago. We just started the transformation of S. E P.

Speaker Change: And we made a promise. We made a promise that we are going to accelerate cloud revenue and that we come back to profitable growth. And we delivered.

Kristian: And we made a promise we made a promise that we are going to accelerate cloud revenue.

Kristian: And that would come back to profitable close and we delivered.

Christian Klein: At that day, I cannot thank enough all our 100,000 employees, because to turn around such a tanker like SAP in over 180 countries, that's not a given. This is a remarkable result. Behind all of these numbers, when you look behind the scenes, when you look at our tech, when you look at our platform, who is more modern than ever, how we reduce the technical debt. I mean, the platform is the platform who actually integrates the businesses the best, who helps them to remove complexity. Who helps them to remove data silos in the world of AI, which is super important, and I come into that in a second. Today it's fair to say that SAP is stronger and more relevant than ever. Also in tech, and this is not only to SAP, there's no time to rest.

Kristian: And at that day I cannot thank enough all of about 100000 employees, because two turnaround such a tanker like S. C P and over 100 and a D countries.

Speaker Change: And at that day, I cannot thank enough all our 100,000 employees because to turn around such a tanker like SAP in over 180 countries, that's not a given. And this is a remarkable result.

Kristian: That's not a given and this is a remarkable result.

Speaker Change: And behind all of these numbers, when you look behind the scenes, when you look at our tech, when you look at our platform, who is more modern than ever, how we reduce the technical debt, I mean the platform is the platform who actually integrates the businesses the best.

Kristian: And behind all of these numbers when you look behind the scenes when you look at our tech when you look at our platform.

It was more modern than ever how we reduce the technical depth I mean, the platform is the platform, who actually integrates the businesses the best who helps them to remove complexity, who helps them to whom we move data silos in a world of AI, which is super important and I come in that in a second.

Speaker Change: who helps them to remove complexity, who helps them to remove data silos in the world of AI, which is super important, and I come into that in a second.

Speaker Change: So today it's fair to say that SAP is stronger and more relevant than ever.

Kristian: So today, it's fair to say that S P, a stronger and more relevant than ever.

Kristian: Yeah.

Speaker Change: But also in tech, and this is not only to SAP,

Kristian: But also in tech and this is not only to S. P.

Speaker Change: There is no time to waste. I believe there is no faster moving industry than the technology industry. And it's our job to always think ahead, what comes next. And that's also part of the earnings, how we will continue.

Christian Klein: I believe there is no faster moving industry than the technology industry. It's our job to always think ahead what comes next. That's also part of the earnings, how we will continue. We will see accelerated growth in the next two years. We want to make SAP the number one enterprise application company in the years to come, 2025 and beyond. That's why we are not stopping, we are not resting. We are continuing with our transformation, and we want to do that based on a position of strength. When you look at Q4, again, also thanks to Scott and the team, it was a fantastic year, and the numbers speak for themselves. I mean, the current cloud backlog is up 27%. Further acceleration, it was the highest growth we have ever seen.

Kristian: There is no time to west I believe there is no fast moving industry than the technology industry and it's our job.

Kristian: To always think ahead what comes next and that's also part of the earnings how we will continue.

Speaker Change: We will see accelerated quotes in the next two years.

Kristian: We will see accelerated quotas in the next two years.

Speaker Change: But we want to make SAP the number one enterprise application company in the years to come, 2025 and beyond. And that's why we are not stopping. We are not resting. We are continuing with our transformation. And we want to do that based on the position of trend.

But we want to make a C. P. The number one enterprise application company in the years to come 2025, and beyond and that's why we are not stopping we are not westing, we're continuing with our transformation and we want to do that based on the position of strength.

Speaker Change: When you look at Q4,

Kristian: When you look at Q4.

Kristian: Again also thanks to Scott and the team it was a fantastic he and and the numbers speak for themselves I mean, the current cloud backlog is up 27%.

Speaker Change: Again, also thanks to Scott and the team. It was a fantastic year, and the numbers speak for themselves. The current cloud backlog is up 27%.

Kristian: Further acceleration it was the highest quotes we have ever seen and also the cloud revenue as an effort with salt accelerated by 25%.

Speaker Change: Further acceleration, it was the highest growth we have ever seen, and also the cloud revenue as a result accelerated by 25%.

Christian Klein: Also the cloud revenue as a result accelerated by 25%. There were also other highlights in Q4. We completed the LeanIX acquisition. They are now also part of the SAP family. We got very good feedback from our customers and partners. Also we made, you know, further announcements around NVIDIA. I will come to that in a second. We also were at COP28. It was remarkable, the interest in our technology to create further transparency around carbon footprint, around ESG, also beyond Scope 2 and Scope 3, where SAP is also extremely well positioned. For the full year, there's one number which really stands out for me, and that just shows the massive resilience what SAP has in the meantime. That's this total cloud backlog of EUR 44 billion, which is increasing 39% year over year.

Kristian: There were also other highlights in Q4, we completed a lean IX acquisition. There are no auto part of the S&P firmly we got very good feedback from our customers and partners.

Speaker Change: There were also other highlights in Q4. We completed the LeanIX acquisition. They are now also part of the SAP family. We got very good feedback from our customers and partners.

Speaker Change: And also we made, you know, further announcements around NVIDIA. I will come to that in a second. We also were at COP28. It was remarkable the interest in our technology to create further transparency around carbon footprint, around ESG, also beyond Scope 2 and Scope 3, where SAP is also extremely well positioned.

Kristian: And also we made you know further announcements of wound in VJ I will come to that in a second we also word cop 28.

Kristian: It was remarkable and the interest in our technology to create further transparency around carbon footprint around ESG also beyond scope, two and scope suite, whereas the PS also extremely well positioned for.

Operator: Thank you for joining us here in Waldorf in person, and, of course, thank you to everyone joining us virtually.

I'm Monika Schaller, Chief Communications Officer, and for today's flow, we have our CEO Christian Klein and our CFO Dominique Arsum who will talk a little bit about our earnings, full year results, and strategy.

Speaker Change: For the full year, there's one number which really stands out for me, and that just shows the massive resilience what SAP has in the meantime. That's this total cloud backlog of $44 billion, which is increasing 39% year over year. And also, it's remarkable to say that we also actually, our new customers, the new customer share is up by 50% year over year.

Kristian: For the full year, there is one number which really stands out for me in that chart shows the massive gazillions what S&P has in the meantime, that's the total cloud backlog of 44 billion, which is increasing 39% year over year.

Following the presentation, you will have the opportunity for a Q&A session, and for everyone being dialed in virtually, you can, of course, use the tool as of now and ask your questions. And with that, Christian, let's not waste time. Over to you.

Christian Klein: Also it's remarkable to say that we also actually our new customers, the new customer share is up by 50% year over year. When I just quickly go into the key success factors for SAP's strong momentum. I mean, first I have to mention our customers. They are loyal, they co-innovate, they are moving with us. This is not a lift and shift to the cloud. These are real transformations. Maybe to highlight a few. NVIDIA, great partner, instrumental for our AI platform, but also a great customer. Now, they decided to select SAP to build further resilience in their supply chain. They need scale. They have not a lack of pipeline, and they are looking to our technology to digitize and build a more resilient operations end to end.

Kristian: And also it's remarkable to say that we also actually our new customers the new customer share is up by 50% year over year.

Speaker Change: When I just quickly go into the key success factors for SAP Strong Momentum, I mean, first, I have to mention our customers. They are loyal. They co-innovate. They are moving with us. And this is not a lift and shift to the cloud. These are real transformations. Maybe to highlight a few, NVIDIA.

Christian Klein: Yeah, thanks.

Kristian: When I just quickly go into the key success factors for Sap's 12 momentum I mean first I have to mention our customers. They are loyal they coin a weight. They are moving with us and this is not a lift and shift to the cloud is a real transformation maybe to highlight a few in.

Christian Klein: See ya.

Operator: Thanks for watching!

Wayne Dwight, and of course, a very warm welcome to everyone. Thank you for joining us. And it's still January, so I guess it's fair to say also a Happy New Year to everyone. And the mic is on. That helps.

Kristian: Vito.

Kristian: Great partner instrumental for our AI platform, but also equate customer now they decided to select S&P to build further resilience in their supply chain. They need scale. They have not a lack of pipeline and they are looking to our technology to digitize and build a more resilient.

Speaker Change: Great partner, instrumental for our AI platform, but also a great customer. Now, they decided to select SAP to build further resilience in their supply chain. They need scale. They have not a lack of pipeline. And they are looking to our technology to digitize and build a more resilient operations end-to-end. Volkswagen, I mean, I was part of SuccessFactor some years back.

Christian Klein: Thanks a lot, Monika. Look, 2023 earnings, what a great year for SAP. I mean, we meet and exceed the outlook on all key metrics. And this is also a day to remember that when we were sitting here three years ago, we just started the transformation of SAP. And we made a promise. We made a promise that we were going to accelerate cloud revenue and that we would come back to profitable growth.

Christian Klein: Volkswagen, I mean, I was part of SuccessFactors some years back, and the comeback of SuccessFactors is remarkable. It's one of our strongest lines of businesses. To run a Volkswagen or a Nestlé in over 100 countries, there is no other HR player in the market who can do that. Also not with the type of integration into payroll, into finance, to really also make sure you can really manage the employee experience end to end. EMS was an Oracle replacement. LG Chem moving over to SAP. These are the kind of net new customers who actually see the value and see by far more than only lifting and shifting systems to the cloud. I just said it in the room, I had a fantastic experience going with the train to Davos.

Kristian: Operations end to end Foxwell, I mean, I was part of Successfactors some years back.

Speaker Change: And the comeback of SuccessFactors is remarkable. It's one of our strongest lines of businesses.

Kristian: And the comeback of Successfactors is remarkable it's one of our strongest lines of businesses.

Christian Klein: And we delivered. And on that day, I cannot thank enough all our 100,000 employees because to turn around such a tanker like SAP in over 180 countries is not a given. And this is a remarkable result.

Speaker Change: and to run a Volkswagen or a Nestle in over 100 countries, there is no other HR player in the market who can do that. Also not with the type of integration into payroll, into finance, to really also make sure you can really manage the employee experience end-to-end.

Kristian: And to one of Forbes slack or nessler in over 100 countries. There is no other HR player in the market, who can do that also not with the type of integration into payroll into finance to really also make sure you can really manage the employee experience end to end.

Speaker Change: EMS was an Oracle replacement, LG Chemicals moving over to SAP. So these are the kind of net new customers who actually see the value and see by far more than only lifting and shifting systems to the cloud.

Christian Klein: And behind all of these numbers, when you look behind the scenes, when you look at our tech, when you look at our platform, which is more modern than ever, how we reduce technical debt, I mean, the platform is the one that actually integrates businesses the best, who helps them to remove complexity, who helps them to remove data silos in the world of AI, which is super important, and I will go into that in a second. So today it's fair to say that SAP is stronger and more relevant than ever. But also in tech, and this is not only true of SAP, There is no time to waste.

Kristian: E M S wasn't Oregon replacement LG chemicals, moving over to S. A P. So these are the kind of net new customers, who actually see who see the value and see by far more than only shoot lifting and shifting systems to the cloud.

Kristian: I just said it in the room I had a fantastic experience going with the train to Davos.

Speaker Change: I just said it in the room, I had a fantastic experience going with the train to Davos.

Christian Klein: Taking the train in Switzerland is actually even more exciting as the CEO of SAP because they are one of our best companies. The trains come on time. They are maintained in the right way. They have a great total workforce. They are really ready for the future. This is done with SAP technology end to end across the whole Swiss railway. Again, we also actually welcomed over 11,000 net new customers in 2023. Second, and the most important pillar, our employees. I mentioned it at the beginning. There was a lot of change in the last three years inside SAP, and the strategy is one thing. But to execute on the strategy, to drive the change management is actually immense. You should never underestimate that.

Speaker Change: and

Kristian: And.

Kristian: Taking the train in Switzerland is actually even more exciting is the CEO of as a pea because they're one of our best companies.

Speaker Change: Taking the train in Switzerland is actually even more exciting as the CEO of SAP because they are one of our best companies.

Speaker Change: The trains come on time, they are maintained in the right way, they have a great total workforce, they are really ready for the future and this is done with SAP technology end-to-end across the whole Swiss Railway.

Kristian: So the trains come on time, they are maintained in a wide way they have equate total workforce. They are really ready for the future and this is done.

Christian Klein: I believe there is no faster moving industry than the technology industry.

Kristian: With S&P technology, and two and of course, the whole Swiss squared away.

Christian Klein: And it's our job to always think ahead to what comes next. And that's also part of the profit, how we will continue.

Speaker Change: And again, we also actually welcomed over 11,000 net new customers in 2020.

Kristian: And again, we also actually welcomed over 11000 net new customers in 2023.

Christian Klein: We will see accelerated growth in the next two years, but we want to make SAP the number one enterprise application company in the years to come, 2025 and beyond. And that's why we are not stopping. We are not resting. We are continuing with our transformation, and we want to do that based on the position of trend. When you look at Q4, Again, also thanks to Scott and the team. It was a fantastic year, and the numbers speak for themselves.

Kristian: So second.

Speaker Change: So, second, and

Kristian: And the most important pillar our employees I mentioned it at the beginning.

Speaker Change: and the most important pillar, our employees. I mentioned it at the beginning.

Kristian: There was a lot of change in the last three years inside is a pea and the strategy is one thing.

Speaker Change: There was a lot of change in the last three years inside SAP, and the strategy is one thing.

Speaker Change: But to execute on the strategy, to drive the change management,

Kristian: To execute on the strategy to drive to change management.

Speaker Change: It's actually immense, and you should never underestimate that. The way how we develop, the way how we deliver, the way how we serve, the way how we sell.

Kristian: It's actually mens and you should never underestimate that the way how we develop the way how we deliver the way how we serve the way how we sell.

Christian Klein: The way how we develop, the way how we deliver, the way how we serve, the way how we sell, is fundamentally different with the customer success in mind. I want to thank again to all of our 100,000 employees. It's not a given to do such a turnaround within only three years. Another lever is the innovation. You saw our outlook. We are very confident, we are resilient, but we are also very relevant, especially in Business AI. Why? To give you a glimpse about what happened at the World Economic Forum, there were a lot of concerns from business leaders about keeping up the productivity in times of inflation, keeping up the growth in times of macroeconomic challenges, keeping up the supply chain and build more resilient supply chain in times of geopolitical tensions.

Speaker Change: Fundamentally different with the customer success in mind and I want to thank again to all of our 100,000 employees. It's not a given to do such a turnaround within only three years.

Kristian: It's fundamentally different with the customer success in mind and I want to thanks again to all of our 100000 employees, it's not a given to do such a turnaround in within only Sui yes.

Christian Klein: The current cloud backlog is up 27%. Further acceleration, it was the highest growth we have ever seen, and also, cloud revenue as a result accelerated by 25%. There were also other highlights in Q4. We completed the LeanIX acquisition. They are now also part of the SAP family. We received very good feedback from our customers and partners. And also, we made, you know, further announcements around NVIDIA. I will come to that in a second. We also were at COP28. It was remarkable the interest in our technology to create further transparency around the carbon footprint, around ESG, also beyond Scope 2 and Scope 3, where SAP is also extremely well positioned. For the full year, there's one number which really stands out for me, and that just shows the massive resilience SAP has in the meantime. That's this total cloud backlog of $44 billion, which is increasing 39% year over year.

Kristian: Another lever is the innovation.

Speaker Change: Another lever is the innovation.

Speaker Change: You saw our outlook. We are very confident. We are resilient. But we are also very relevant, especially in business AI. Why?

Kristian: You saw our outlook. We are very confident we are resilient, but we also were with element, especially in business AI y.

Speaker Change: To give you a glimpse about what happened at the World Economic Forum, there were a lot of concerns from business leaders about keeping up the productivity in times of inflation, keeping up the growth in times of macroeconomic challenges.

Kristian: To give you a glimpse about what happened at the World Economic Forum, the where a lot of concerns from business leaders about keeping up the productivity in times of inflation keeping up the clothes in times of macroeconomic challenges.

Kristian: Keeping up the supply chain and build more resilient supply chain in times of geopolitical tensions.

Speaker Change: Keeping up the supply chain and build more resilient supply chain in times of geopolitical tension.

Christian Klein: In all of that, GenAI can actually provide solutions for these challenges. Even more interesting is when you talk to the Microsoft, to the NVIDIAs, and all of them, they're actually also looking at our AI platform and say, "Hey, how can we connect? How we can extend the AI platform?" Because as Jensen from NVIDIA said, we have a treasure. Our treasure is that we are sitting on very mission-critical business data, where 30,000 customers already gave us the consent to use their data to infuse more intelligence on how to better predict sales and optimize inventory, where we can take out billions of CapEx by optimizing the whole supply chain for our customers. On the question on how to attract and retain the best total workforce. I mean, what we are announcing today is a big total transformation on our workforce.

Kristian: And in all of that.

Speaker Change: and in all of that,

Speaker Change: Gen AI can actually provide solutions for these challenges.

Kristian: <unk> AI can actually provide solutions for these challenges.

Speaker Change: And even more interesting is, when you talk to the Microsoft, to the NVIDIA and all of them, they're actually also looking at our AI platform and say, hey, how can we connect? How we can extend the AI platform? Because, as Jensen from NVIDIA said, we have a treasure. Our treasure is that we are sitting on very mission-critical business data. Where 30,000 customers already gave us the content to use their data, to infuse more intelligence on how to better predict sales and optimize inventory. Where we can take out billions of capex by optimizing the whole supply chain for our customers.

And even more interesting is when you talk to the Microsoft today in retail and all of them. They actually also looking at our AI platform and say Hey, how can we connect how we can extend the AI platform because as churn from forming easier said, we have a treasure our to Russia is that we are sitting on.

Christian Klein: And also, it's remarkable to say that we also actually have new customers; the new customer share is up by 50% year over year. When I just quickly go into the key success factors for SAP Strong Momentum, I mean, first, I have to mention our customers. They are loyal.

Kristian: Very mission critical business data with 30000 customers already gave us the content to use their data to build to infuse more intelligence on how to better predict sales and optimize inventory, where we can take out billions of capex by optimizing the whole supply chain for our customers.

Christian Klein: They co-innovate. They are moving with us. And this is not a lift and shift to the cloud. These are real transformations.

Christian Klein: Maybe to highlight a few: NVIDIA. A great partner, instrumental in our AI platform, but also a great customer.

Kristian: But a question on how to attract and retain the best total workforce I mean, what we are announcing today is a big total transformation on our workforce and technology can help to find the best talents to retain the best talent and that's S. A P business AI.

Speaker Change: What a question on how to attract and retain the best total workforce. I mean, what we are announcing today is a big total transformation on our workforce. And technology can help to find the best talents, to retain the best talents. And that's SAP Business AI.

Christian Klein: Now, they have decided to select SAP to build further resilience in their supply chain. They need scale.

Christian Klein: Technology can help to find the best talents, to retain the best talents. That's SAP Business AI. Joule, our digital AI system, which we will also harmonize with some of the AI systems of our partners, will not only speak finance. Joule will help to not only automate activities. Joule will help to solve some of the most pressing challenges our customers have by guiding the end users, by giving smart answer to some of the challenges I just mentioned. The 2024 outlook confidence. I mean, with a backlog of EUR 44 billion, we have much better predictability than 3 years ago. Pipeline remains strong. The business cases are compelling for all the innovation I just mentioned. We imply a growth rate of 25.5%, which also, you know, actually indicates acceleration of growth in the cloud.

Christian Klein: They have not a lack of pipeline.

Christian Klein: And they are looking to our technology to digitize and build a more resilient operations end-to-end. Volkswagen, I mean; I was part of SuccessFactor some years back. And the comeback of SuccessFactors is remarkable. It's one of our strongest lines of business, and to run a Volkswagen or a Nestle in over 100 countries, there is no other HR player in the market who can do that. Also, not with the type of integration into payroll and into finance to really make sure you can really manage the employee experience end-to-end. EMS was an Oracle replacement, with LG Chemicals moving over to SAP.

Kristian: And tool.

Speaker Change: Our digital AI system, which we will also harmonize with some of the AI assistance of our partners, will not only speak finance.

Kristian: Our digitally I system, which we will also harmonize with some of the AI assistance of our partners.

Kristian: We'll not only speak finance.

Speaker Change: Joule will help to not only automate activities, Joule will help to solve some of the most pressing challenges our customers have by guiding the end users, by giving smart answer to some of the challenges I just mentioned.

Kristian: Sure will help to not only automate activities tool will help to solve some of the most pressing challenges our customers have by guiding the end users by giving smart answer to some of the challenges I just mentioned.

Kristian: Yeah.

Kristian: The 2024 outlook confidence I mean with a backlog of 44 billion, we have much better apparatus predictability than three years ago.

Speaker Change: The 2024 Outlook

Speaker Change: Confidence. I mean, with a backlog of 44 billion, we have much better predictability than three years ago. Pipeline remains strong. The business cases are compelling for all the innovation I just mentioned.

Kristian: Pipeline remains strong the business cases are compelling for all the innovation I just mentioned, we imply a growth rate of 25, 5%, which also acts.

Speaker Change: We imply a growth rate of 25.5%, which also actually indicates acceleration of growth in the cloud.

Kristian: Indicates acceleration of quotes in the cloud.

Christian Klein: So these are the kind of net new customers who actually see the value and see far more than only lifting and shifting systems to the cloud. I just said it in the room. I had a fantastic experience going on the train to Davos, and taking the train in Switzerland is actually even more exciting as the CEO of SAP because they are one of our best companies. The trains come on time, they are maintained in the right way, they have a great total workforce, they are really ready for the future, and this is done with SAP technology end-to-end across the whole Swiss Railway. And again, we also actually welcomed over 11,000 net new customers in 2020. So, second, and the most important pillar, our employees.

Christian Klein: We raised our ambition for 2025 because clearly we're also applying AI internally to gain further scale. Of course, we are already working now with the transformation program we announced to not only give SAP significant growth in until 2025, but also in the years beyond. The growth formula. What do we have? RISE and GROW. Smiling because when I look back again 3 years, it was exactly the right thing to not only say we follow the trend and lifting and shifting systems to the cloud. No, no. We have 400,000 customers. We know how Samsung wants. We know how NVIDIA wants. We know how ASML wants. We know how we are doing pay-as-you-go consumption-based business models. Let's infuse that. Let's really help our customers to transform. With the new board area, this is actually a commitment to double down on that.

Speaker Change: We raised our ambition for 2025 because clearly we are also applying AI internally to gain further scale and of course we are already working now with the transformation program we announced to not only give SAP significant growth until 2025 but also in the years beyond.

Kristian: We waste our ambition for 2025, because clearly we also are applying here internally to gain further scale and of course, we're already working now with the transformation program, we announced to not only give S&P significant quotas in until 2025, but also in the years beyond.

Kristian: The close Formula what do we have.

Speaker Change: The close formula, what do we have?

Speaker Change: Wise and Quo

Kristian: Why isn't cool.

Speaker Change: Smiling because when I look back again three years, it was exactly the right thing to not only say we follow the trend and lifting and shifting systems to the cloud. No, no, no. We have 400,000 customers. We know how Samsung wants. We know how NVIDIA wants. We know how ASML wants. We know how you're doing pay-as-you-go consumption-based business models. Let's infuse that. Let's really help our customers to transform. And with the new board area, this is actually a commitment to double down on that. So Thomas Sauer, I think, and team will further actually help our customers to really also gain the business outcomes what they expect from the investment into SAP.

Kristian: Smiling because when I look back against three years. It was exactly the right thing to not only say, we've followed the trend and lifting and shifting systems to the cloud no no. No. We have 400000 customers, we know how Samsung ones. We know how in V. Gel once we know how ASML once we know how well youre doing payer.

Kristian: As you go consumption based business models, let's infuse that let's really help our customers to transform and with the New Board area. This is actually a commitment to double down on that so Thomas our ASIC and team will further actually help our customers to really also gain the business outcomes, what they expect from the investment.

Christian Klein: Thomas Saueressig and team will further actually help our customers to really also gain the business outcomes, what they expect from the investment into SAP. GROW. I mentioned it, 11,000 net new customers. It's actually remarkable how many mid-sized customers are actually also helping us, you know, to fuel our growth because they see that they can globalize and localize their business best with SAP software. Of course, every one of these mid-sized companies wants to become the next SAP, wants to become the next big retailer. This is possible seamlessly with our platform. Talking about platform. It's a platform which in the meantime drives EUR 2.5 billion. I mean, this was a platform three years ago which was hardly not integrated with our applications. Now there's a harmonized data model.

Kristian: And into a S. A P.

Speaker Change: Quo, I mentioned it, 11,000 net new customers.

Kristian: Quo I mentioned at 11000 net new customers.

Speaker Change: It's actually remarkable how many mid-sized customers are actually also helping us to fuel our growth because they see that they can globalize and localize their business best with SAP software. And of course, every one of these mid-sized companies wants to become the next SAP, wants to become the next big retailer. And this is possible seamlessly with our platform.

Kristian: It's actually remarkable how many midsized customers actually also helping us to for all our quotes because they see that they can globalize and localize their business best with Sap's software.

Kristian: And of course every one of these mid sized companies wants to become the next S&P wants to become the next big retailer and this is possible seamlessly with our platform.

Christian Klein: I mentioned it at the beginning. There has been a lot of change in the last three years inside SAP, and the strategy is one thing. But to execute on the strategy, to drive the change management, It's actually immense, and you should never underestimate that. The way we develop, the way we deliver, the way we serve, the way we sell. Fundamentally different with customer success in mind, and I want to thank again all of our 100,000 employees. It's not a given to do such a turnaround within only three years. Another lever is innovation. You saw our outlook. We are very confident. We are resilient.

Speaker Change: Talking about blood form.

Kristian: Talking about platform.

Speaker Change: It's a platform which in the meantime drives 2.5 billion euros.

Kristian: It's a platform, which in the meantime twice 2.5 billion Euro.

Kristian: I mean, this was a platform three years ago.

Speaker Change: I mean, this was a platform three years ago which was hardly not integrated with our applications.

Christian Klein: around the carbon footprint, around ESG, also beyond scope 2 and scope 3, where SAP is also extremely well positioned. For the full year, there's one number which really stands out for me.

Kristian: Which was hardly not integrated with our applications.

Speaker Change: Now, there is a harmonized data model, there is strong integration, and we can run the IT landscapes of our customers with much less complexity in the cloud, with much better integration also to non-SAP solutions.

Kristian: Now Theres, a harmonized data model strong integration and we can one the I T landscapes of our customers with much less complexity in the cloud with much better integration order to known S&P solutions and of course that also gives us now.

Christian Klein: There's strong integration, and we can run the IT landscapes of our customers with much less complexity in the cloud, with much better integration also to non-SAP solutions. Of course, that also gives us now the leverage to also actively cross-sell. I mean, when you look into some of our customers also here in Germany, they often start with finance and logistics. We move on to total workforce. Let's really digitize procurement. Let's really look into the supply chain. All is happening on BTP. Last but not least, let me also shed a little bit light on the transformation program, what we actually announced today. We invest. We invest heavily into future growth. SAP is a growth company, and we will not fall short on investments to really capture these massive opportunities we have.

Christian Klein: And that just shows the massive resilience SAP has in the meantime. That's this total cloud backlog of 44 billion, which is increasing 39 percent year over year. And also, it's remarkable to say that our new customers, the new customer share is up by 50 percent year over year. When I just quickly go into the key success factors for SAP Strong Momentum, I mean, first, I have to mention our customers. They are loyal and hard-working.

Speaker Change: and of course that also gives us now

Speaker Change: The Leverwich to also actively cross-sell. I mean, when you look into some of our customers, also here in Germany, they often start with finance and logistics. Then we move on to total workforce. Then let's really digitize procurement. Then let's really look into the supply chain. And all is happening on BTP.

Kristian: The lever, which towards are actively cross sell I mean, when you look into some of our customers also here in Germany. They often start with finance and logistics then we move on to total workforce then let's really digitize procurement then, let's really look into the supply chain and all is happening on BGP.

Kristian: Yeah.

Speaker Change: Last but not least,

Kristian: As partner leased them.

Christian Klein: But we are also very relevant, especially in business AI.

Christian Klein: They co-innovate. They are moving with us. And this is not a lift and shift to the cloud. These are real transformations.

Speaker Change: Let me also shed a little bit light on the transformation program, what we actually announced today. We invest. We invest heavily into future growth.

Let me also shed a little bit light on the transformation program, what we actually announced today, we invest we didn't have asked heavily into future growth.

Christian Klein: Why?

Christian Klein: To give you a glimpse of what happened at the World Economic Forum, there were a lot of concerns from business leaders about keeping up productivity in times of inflation, keeping up growth in times of macroeconomic challenges, and keeping up the supply chain and building more resilient supply chains in times of geopolitical tension. And in all of that, Gen AI can actually provide solutions for these challenges. And even more interesting is, when you talk to Microsoft, to NVIDIA, and all of them, they're actually also looking at our AI platform and saying, hey, how can we connect? How can we extend the AI platform? Because, as Jensen from NVIDIA said, we have a treasure. Our treasure is that we are sitting on very mission-critical business data.

Christian Klein: Maybe to highlight a few: NVIDIA. A great partner, instrumental in our AI platform, but also a great customer. Now they have decided to select SAP to build further resilience in their supply chain. They need scale.

Speaker Change: SEP is a growth company, and we will not fall short in investments to really capture these massive opportunities we have. We're going to invest nearly a billion.

Kristian: SAP is a growth company and we will not fall short on investments to really capture this massive opportunities we have begun to invest nearly $1 billion.

Christian Klein: We're gonna invest nearly EUR 1 billion in AI by the end of 2025. We will invest heavily into really stellar portfolios like supply chain, like sustainability, to further accelerate the innovation for our customers. We're gonna invest into new architectures, to the point earlier, to make sure that our customers are transforming and not only lifting and shifting. Second, of course, we're also going to apply AI internally. We're gonna reach more scale. We're gonna automate activities. With that, of course, comes also a transformation of our workforce. Also have you seen today that we are going to allocate roughly EUR 2 billion into this transformation program for restructuring. The transformation program is actually impacting over 8,000 people. Here at that point, I want to highlight one thing. To make such decisions is never easy.

Speaker Change: In AI by the end of 2025, we will invest heavily into really stellar portfolios like supply chain, like sustainability to further accelerate the innovation for our customers.

Christian Klein: They have not a lack of pipeline, and they are looking to our technology to digitize and build a more resilient operations end-to-end. Volkswagen, I mean; I was part of SuccessFactors some years back.

Kristian: In AI by the end of 2025, we will invest heavily into really stellar portfolios like supply chain like sustainability to further accelerate the innovation for our customers, we're going to invest into new architect to the point earlier to make sure that our customers are transforming.

Speaker Change: We're going to invest into new architects to the point earlier to make sure that our customers are transforming and not only lifting and shifting.

Christian Klein: And the comeback of success factors is remarkable. It's one of our strongest lines of business. And to run a Volkswagen or a Nestle in over 100 countries, there is no other HR player in the market who can do that. Also, not with the type of integration into payroll, into finance, to really also make sure you can really manage the employee experience end to end.

Kristian: And not only lifting and shifting.

Kristian: And second of course, we also going to apply AI internally.

Kristian: So we garner reach more scale, we got to automate activities.

Speaker Change: And with that, of course, comes also a transformation of our workforce.

Kristian: And with that of course comes also a transformation of our workforce announced.

Speaker Change: And I also have you seen today that we are going to allocate roughly 2 billion euro into this transformation program for restructuring.

Christian Klein: EMS was an Oracle replacement, with LG Chemicals moving over to SAP. So these are the kind of net new customers who actually see the value and see by far more than only lifting and shifting systems to the cloud. I just said it in the room. I had a fantastic experience going on the train to Davos, and taking the train in Switzerland is actually even more exciting as the CEO of SAP because they are one of our best companies. So the trains come on time, they are maintained in the right way, they have a great total workforce, and they are really ready for the future.

Kristian: And I also have you seen today that we are going to allocate roughly 2 billion euro into this transformation program for restructuring.

Christian Klein: Where 30,000 customers already gave us the content to use their data to infuse more intelligence on how to better predict sales and optimize inventory. Where we can take out billions of capex by optimizing the whole supply chain for our customers. What a question on how to attract and retain the best total workforce. I mean, what we are announcing today is a big total transformation in our workforce. And technology can help to find the best talents and retain the best talents. And that's SAP Business AI.

Kristian: Yeah.

Speaker Change: The transformation program is actually impacting over 8,000 people.

Kristian: The transformation program is actually impacting our weight thousand people.

Kristian: And here at that point I want to highlight one thing.

Speaker Change: And here at that point I want to highlight one thing.

Kristian: To make that such decisions is never easy I'm part now of Sap's, Enzo 24 years in the meantime.

Speaker Change: To make such decisions is never easy. I'm a partner of SAP since over 24 years in the meantime.

Christian Klein: I'm a partner of SAP since over 24 years in the meantime. I'm a child of SAP, and when you impact people, that's never easy. The same what we did 3 years ago, we are doing here now again. We are giving SAP the best future. We are giving SAP the future, a future with high growth to compete in the tech industry. This is for us very important, to give our 100,000 people the best future we can. Then you yes, you have to make tough decisions. Out of the 8,000 people, two-thirds, hopefully, we can also handle with voluntary measures like early retirement, like lift and shift. We are going to invest over EUR 100 million in education to help people to find new jobs in the growth areas I just mentioned.

Kristian: I'm.

Speaker Change: I'm a child of SAP and when you impact people, that's never easy.

Kristian: I'm, a child of S&P and when you impact people that's never easy.

Kristian: But the same what we did three years ago. We are doing here now again, we are giving us the P. The best future, we are giving us the P. The future a future with high close to compete in the tech industry and this is for us where we important to give our 100000 people the best future.

Speaker Change: But the same what we did three years ago, we are doing here now again. We are giving SAP the best future. We are giving SAP the future, a future with high growth to compete in the tech industry. And this is for us very important, to give our 100,000 people the best future we can. And then, yes, you have to make tough decisions.

Christian Klein: And this is done with SAP technology end to end across the whole Swiss railway. And again, we also actually welcomed over 11,000 net new customers in 2020. So second, and the most important pillar, our employees. I mentioned them at the beginning.

Christian Klein: Our digital AI system, which we will also harmonize with some of the AI assistance of our partners, will not only speak finance.

Kristian: We can and then you asked do you have to make tough decisions.

Speaker Change: and out of the 8,000 people, two-thirds hopefully, we can also handle with voluntary measures like early retirement, like lift and shift. We are going to invest over $100 million in education.

Kristian: And out of the 8000 people two thirds hopefully we can also handle with voluntary measures like early retirement like lift and shift we're going to invest over 100 million in education to help people to find new chops and nikos areas. I just mentioned so we have two people in mind when we do our.

Christian Klein: Joule will help to not only automate activities; Joule will help to solve some of the most pressing challenges our customers have by guiding the end users and giving smart answers to some of the challenges I just mentioned. The 2024 Outlook, Confidence. I mean, with a backlog of 44 billion, we have much better predictability than three years ago. And the pipeline remains strong. The business cases are compelling for all the innovation I just mentioned. We imply a growth rate of 25.5%, which also actually indicates an acceleration of growth in the cloud. We raised our ambition for 2025 because, clearly, we are also applying AI internally to gain further scale, and, of course, we are already working now with the transformation program we announced to not only give SAP significant growth until 2025 but also in the years beyond. The close formula, what do we have?

Christian Klein: There has been a lot of change in the last three years inside SAP, and the strategy is one thing. But executing on the strategy, driving change management, is actually immense, and you should never underestimate that.

Speaker Change: Thank you for watching.

Christian Klein: We have the people in mind when we do our best to make this as smooth as we can. To net it out, actually, we had a very strong 2023. We now ready to build the next phase of our transformation. We're gonna see that we are accelerate cloud revenue and profit towards 2025 and also, the years beyond. Again, many thanks to all of our employees, to our partners, to our customers for being with us on this journey. A journey which will not stop here. We're gonna continue, and we're gonna make SAP also a great company in the years to come. Thanks a lot. Now over to you, Dominik.

Kristian: Best to make this as smooth as we can.

Speaker Change: To net it out.

Christian Klein: The way we develop, the way we deliver, the way we serve, the way we sell, fundamentally different with customer success in mind, and I want to thank again all of our 100,000 employees. It's not a given to do such a turnaround within only three years. Another level is innovation. You saw our outlook. We are very confident. We are resilient. But we are also very relevant, especially in business AI. Why?

Kristian: To netted out.

Speaker Change: Actually, we had a very strong 2023.

Kristian: Actually we had a very strong 2023.

Kristian: We now ready to build the next phase of our transformation, we gonna see that we accelerated cloud revenue and profit towards 2025 and also <unk>.

Speaker Change: We're now ready to build the next phase of our transformation. We're going to see that we accelerate cloud revenue and profit towards 2025 and also in the years beyond. Again, many thanks to all of our employees, to our partners, to our customers for being with us on this journey, a journey which will not stop here. We're going to continue, and we're going to make SAP also a great company in the years to come. Thanks a lot, and now over to you, Dominic.

Kristian: In the years beyond again.

Kristian: Many thanks to all of our employees to our partners to our customers for being with US on this journey, a journey, which will not stop here. We would garner continue and we are gonna make S&P also equate company in the years to come Thanks, a lot and now over to you Dominic.

Christian Klein: To give you a glimpse of what happened at the World Economic Forum, there were a lot of concerns from business leaders about keeping up productivity in times of inflation, keeping up growth in times of macroeconomic challenges, and keeping up the supply chain and building more resilient supply chains in times of geopolitical tension. And in all of that... Gen AI can actually provide solutions for these challenges. And even more interesting is, when you talk to Microsoft, to NVIDIA, and all of them, they're actually also looking at our AI platform and saying, hey, how can we connect? How can we extend the AI platform? Because, as Jensen from NVIDIA said, we have a treasure.

Dominik Asam: Thank you, Christian, and thank you all for joining us this morning. A happy and healthy 2024 to everyone. We once again delivered on our financial targets for the year and are making great progress towards our ambition 2025. Our financial results demonstrate our commitment to our stated goals. With a strong finish in Q4, we're exceeding our own expectations in cloud and software revenue, non-IFRS operating profit, and free cash flow. The strong order intake and resulting current cloud backlog gives us confidence that we'll keep the momentum this year. This is underpinned by the success we've seen with RISE with SAP. It is the solution of choice for our global customers to help drive their end-to-end business transformations.

Dominic Awesome: Thank you Christian and thank you all for joining us this morning.

Dominic: Thank you, Christian, and thank you all for joining us this morning.

Dominic Awesome: A happy and healthy 2024 to everyone.

Dominic: Happy and healthy 2024 to everyone.

Dominic Awesome: We once again delivered on our financial targets for the year and are making great progress towards our ambition 2025.

Dominic: We once again delivered on our financial targets for the year and are making great progress towards our ambition 2021.

Christian Klein: Wise and Quo, smiling because when I look back again three years from now, it was exactly the right thing to not only say we follow the trend and lifting and shifting systems to the cloud. No, no, no.

Our financial results demonstrate our commitment to our stated goals.

Dominic: Our financial results demonstrate our commitment to our stated goal.

Dominic: With a strong finish in Q4, we're exceeding our own expectations.

Dominic Awesome: With a strong finish in Q4 exceeding our own expectations in cloud and software revenue.

Christian Klein: We have over 400,000 customers.

Dominic: Cloud and Software Revenue.

Dominic: Non-Alphares Operating Profit, and Free Cash Flow.

Christian Klein: We know what Samsung wants. We know what NVIDIA wants. We know how ASML wants it. We know how you're doing pay-as-you-go consumption-based business models. Let's infuse that. Let's really help our customers to transform. And with the new board area, this is actually an commitment to double down on that. So Thomas Sauer, I think, and his team will further actually help our customers to really also gain the business outcomes they expect from the investment into SAP.

Dominic Awesome: Non <unk> operating profit and free cash flow.

Dominic: The strong order intake and resulting current cloud backlog gives us confidence that we'll keep the momentum this year.

Dominic Awesome: The strong order intake and the resulting current cloud backlog gives us confidence that we will keep the momentum this year.

Christian Klein: Our treasure is that we are sitting on very mission-critical business data, where 30,000 customers already gave us consent to use their data to infuse more intelligence on how to better predict sales and optimize inventory, where we can take out billions of CAPEX by optimizing the whole supply chain for our customers. What a question on how to attract and retain the best total workforce. I mean, what we are announcing today is a big total transformation of our workforce, and technology can help to find the best talent and to retain the best talent. And that's SAP Business AI. And Joule.

Dominic: This is underpinned by the success we've seen with RISE with SAP.

Dominic Awesome: This is underpinned by the success, we've seen with rise with S&P.

Dominic: It is the solution of choice for our global customers.

Dominic Awesome: It is the solution of choice for our global customers to help drive the end to end business transformations.

Dominic: to help drive the end-to-end business transformation.

Dominik Asam: This is evident as large cloud transactions with a volume greater than EUR 5 million contributed 55% to cloud order entry for the full year, and an impressive 62% in Q4. I'd like to remind everyone about the reporting changes we announced a good month ago and give you a brief update on the new Cloud ERP Suite disclosure. Cloud ERP Suite is our growth engine. It is representing 82% of our combined SaaS and PaaS revenues, and growing by 33% in fiscal year 2023, up from 32% in the prior year. We expect Cloud ERP Suite to sustain very high growth rates and therefore to represent a growing share of our cloud business going forward. Current cloud backlog reached EUR 13.7 billion, continuing its growth at scale to 27%. That is the fastest pace on record.

Dominic: This is evident as large cloud transactions with a volume greater than 5 million euros contributed 55% to cloud order entry for the full year and an impressive 62%

Dominic Awesome: This is evident as large cloud transactions with a volume of greater than 5 million euros contributed 55% to cloud order entry for the full year and an impressive 62%.

Dominic: in Q4.

Dominic Awesome: In Q4.

Dominic Awesome: I'd like to remind everyone about the reporting changes, we announced the good months ago and give you a brief update on the new cloud ERP suite disclosure.

Dominic: I'd like to remind everyone about the reporting changes we announced a good month ago and give you a brief update on the new cloud ERP suite disclosure.

Christian Klein: Quo, I mentioned it, 11,000 net new customers. It's actually remarkable how many mid-sized customers are also helping us to fuel our growth because they see that they can globalize and localize their business best with SAP software. And, of course, every one of these mid-sized companies wants to become the next SAP, wants to become the next big retailer, and this is made seamless with our platform. Talking about blood form, it's a platform which, in the meantime, drives 2.5 billion euros.

Christian Klein: Our digital AI system, which we will also harmonize with some of the AI assistance of our partners, will not only speak finance. Juul will help to not only automate activities. Juul will help to solve some of the most pressing challenges our customers have by guiding the end users, by giving smart answers to some of the challenges I just mentioned. The 2024 outlook. Confidence.

Dominic: Cloud Air P Suite is our growth engine.

Dominic Awesome: Cloud ERP suite is our growth engine, it is representing 82% of our combined sauce and parts revenues.

Dominic: It is representing 82% of our combined SAS and PAS revenues and growing by 33% in fiscal year 2023.

Dominic Awesome: And growing by 33% in fiscal year 2023.

Dominic: Up from 32% in the prior year.

Dominic Awesome: Up from 32% in the prior year.

Dominic: We expect Cloud Air P Suite to sustain very high growth rates.

Dominic Awesome: We expect cloud ERP suite to sustain very high growth rates, and therefore represent a growing share of our cloud business going forward.

Dominic: and therefore to represent a growing share of our cloud business going forward.

Christian Klein: With a backlog of 44 billion, we have much better predictability than three years ago. The pipeline remains strong. The business cases are compelling for all the innovation I just mentioned. We imply a growth rate of 25.5%, which also, you know, actually indicates an acceleration of growth in the cloud. We raised our ambition for 2025 because, clearly, we are also applying AI internally to gain further scale. And, of course, we are already working now on the transformation program we announced to not only give SAP significant growth until 2025 but also in the years beyond. The growth formula, what do we have? Wyeth and Quo, smiling because when I look back again three years from now, it was exactly the right thing to not only say we follow the trend but also lift and shift systems to the cloud. No, no, no.

Dominic Awesome: Current cloud backlog reached $13 7 billion euros, continuing its growth at scale to 27%.

Dominic: Current cloud backlog reached 13.7 billion euros, continuing its growth at scale to 27%.

Christian Klein: I mean, this was a platform three years ago that was hardly integrated with our applications. Now, there is a harmonized data model, there is strong integration, and we can run the IT landscapes of our customers with much less complexity in the cloud, with much better integration also to non-SAP solutions, and of course, that also gives us The Leverwich now to also actively cross-sell. I mean, when you look at some of our customers, also here in Germany, they often start with finance and logistics. Then we move on to the total workforce. Then let's really digitize procurement.

Dominic: That is the fastest pace on record.

Dominic Awesome: That is the fastest pace on record.

Dominik Asam: Total cloud backlog for the year even grew at 39%. Cloud revenue grew 23% year on year, underpinned by cloud revenue growth of 25% in the last quarter and underlying strong performance across all geographies. Cloud revenue now surpasses the combined software licenses and software support revenue. It is effectively our largest and fastest growing revenue stream. Our combined SaaS and PaaS portfolio for 2023 continued to grow by an impressive 26%. SaaS revenue was up 23% and PaaS up 46%. This strong performance was primarily driven by outstanding contribution of the aforementioned Cloud ERP Suite, including the Business Technology Platform. Total revenue for the full year was up 9%, supported by cloud and also service revenue. Now going down the P&L. Our cloud gross margin for the full year continued its upward trend from last year.

Dominic: Total cloud backlog for the year even grew at 39%.

Dominic Awesome: Total cloud backlog for the year, even grew at 13, 9%.

Dominic: Cloud revenue grew 23% year-on-year, underpinned by cloud revenue growth of 25% in the last quarter and underlying strong performance across all geographies.

Dominic Awesome: Cloud revenue grew 23% year on year underpinned by cloud revenue growth of 25% in the last quarter.

And underlying strong performance across all geographies.

Dominic Awesome: Cloud revenue now surpasses the combined software licenses and software support revenue it is effectively our largest and fastest growing revenue stream.

Dominic: Cloud revenue now surpasses the combined software licenses and software support revenue. It is effectively our largest and fastest growing revenue system.

Dominic Awesome: Our combined soph and Pos portfolio for 2023 continued to grow by an impressive 26%.

Dominic: Our combined SaaS and PaaS portfolio for 2023 continued to grow by an impressive 26%.

Dominic: SAAS revenue was up 23% and PASS up

Dominic Awesome: Sales revenue was up 23% and pass up.

Dominic: 46

Dominic Awesome: 46%.

Dominic: This strong performance was primarily driven by outstanding contribution of the aforementioned cloud ERP suite, including the business technology platform.

Dominic Awesome: This strong performance was primarily driven by outstanding contribution of the aforementioned cloud ERP suite, including the business technology platform.

Speaker: Then let's really look into the supply chain, and all this is happening on BTP.

Dominic: Total revenue for the full year was up 9%.

Dominic Awesome: Total revenue for the full year was up 9%.

Dominic: and also services.

Speaker: Last but not least, let me also shed a little light on the transformation program, what we actually announced today. We invest.

Dominic Awesome: Courted by cloud and also service revenue.

Christian Klein: We have 400,000 customers. We know what Samsung wants. We know what NVIDIA wants.

Dominic Awesome: Now going down the P&L, our cloud gross margin for the full year continued its upward trend from last year. It expanded by two four percentage points to 72, 6% driving cloud gross profit up by 27%.

Dominic: Now, going down the P&L, our cloud gross margin for the full year continued its upward trend from last year. It expanded by 2.4 percentage points to 72.6%, driving cloud gross profit up by 27%.

Speaker: We invest heavily in future growth. SEP is a growth company, and we will not fall short in investments to really capture these massive opportunities we have. We're going to invest nearly a billion in AI by the end of 2025. We will invest heavily in really stellar portfolios like supply chain and sustainability to further accelerate innovation for our customers. We're going to invest in new architects to the point earlier to make sure that our customers are transforming and not only lifting and shifting. And with that, of course, comes a transformation of our workforce. And I also let you know today that we are going to allocate roughly 2 billion euros to this transformation program for restructuring. The transformation program is actually impacting over 8,000 people.

Dominik Asam: It expanded by 2.4 percentage points to 72.6%, driving cloud gross profit up by 27%. In Q4, non-IFRS operating profit was up 2%. As a reminder, there are some special effects. Operating profit was negatively impacted by the accelerated amortization of capitalized sales commissions related to on-prem business, higher bonus accruals because we had an extremely strong finish to the year in Q4. Don't forget, prior year operating profit baseline included a disposal gain of EUR 109 million related to the sale of Litmos. For the entire fiscal year, we kept our promise and delivered double-digit operating profit growth of 13% year over year, reaching EUR 8.72 billion.

Christian Klein: We know how ASML wants it. We know how we are doing pay-as-you-go consumption-based business models. Let's infuse that.

Christian Klein: Let's really help our customers to transform, and with the new boardroom area, this is actually an commitment to double down on that. So Thomas Zawasik and his team will further help our customers to really also gain the business outcomes they expect from the investment into SAP. Quo, I mentioned it, 11,000 net new customers. It's actually remarkable how many mid-sized customers are actually also helping us to fuel our growth because they see that they can globalize and localize their business best with SAP software. And, of course, every one of these mid-sized companies wants to become the next SAP, wants to become the next big retailer, and this is made seamless with our platform. Talking about the platform.

Dominic: In the fourth quarter, non-IFRS operating profit was up 2%, but as a reminder, there are some special effects.

Dominic Awesome: In the fourth quarter non <unk> operating profit was up 2%, but as a reminder, there are some special effects.

Dominic: Operating profit was negatively impacted by the accelerated amortization of capitalized sales commissions related to on-prem business.

Dominic Awesome: Operating profit was negatively impacted by the accelerated amortization of capitalized sales commissions related to on premise business.

Dominic: I have bonus accruals because we had an extremely strong finish to the year in Q4. And don't forget, prior year operating profit baseline included a disposal gain of 109 million euros related to the sale of Lidl.

Dominic Awesome: Higher bonus accruals, because we had an extremely strong finish to the year in Q4.

Dominic Awesome: And don't forget prior year operating profit baseline included a disposal gain of <unk> 9 million related to the sale of litmus.

Dominic Awesome: For the entire fiscal year, we kept our promised and delivered double digit operating profit growth of 13% year over year, reaching 8.72 billion euros.

Dominic: For the entire fiscal year, we kept our promised and delivered double-digit operating profit growth of 13% year-over-year, reaching 8.72 billion euros.

Dominik Asam: I'm particularly pleased that we have snapped back to growth on non-IFRS operating profit, especially as starting in 2024, we will no longer exclude share-based compensation expenses from our non-IFRS results. I recall that was an issue some of you took issue with it. We announced last month that we will report based on post stock-based compensation, and I can also confirm that we turned the corner in terms of snapping back to growth on that profit measure.

Dominic: I'm particularly pleased that we have snapped back to growth on non-IFRS operating profit.

Dominic Awesome: I'm, particularly pleased that we have snapped back to growth, while non <unk> operating profit.

Dominic: Especially as starting in 2024, we will no longer exclude share-based compensation expenses from our non-IFRS results. I recall that was an issue some of you took it.

Dominic Awesome: Especially as starting in 2024, we will no longer exclude share based compensation expenses from our non Io first results I recall that was an issue with some of you took it.

Speaker: And here at that point, I want to highlight one thing. Making such decisions is never easy. I've been a partner of SAP for over 24 years in the meantime. I'm a child of SAP, and when you impact people, that's never easy. But the same thing we did three years ago, we are doing here now again. We are giving SAP the best future. We are giving SAP the future, a future with high growth to compete in the tech industry. And this is, for us, very important, to give our 100,000 people the best future we can. And then, yes, you have to make tough decisions, and out of the 8,000 people, two-thirds, hopefully, we can also handle with voluntary measures like early retirement, like lift and shift. We are going to invest over $100 million in education. Thank you for watching. To net it out,

Dominic: So we announced last month that we will report based on post-stock-based compensation, and I can also confirm that we turned the corner in terms of snapping back to growth on that profit measure.

Dominic Awesome: So we announced last month that we will report based on post stock based compensation and I can also confirm that we turned the corner in terms of snapping back to growth on that profit measure.

Christian Klein: It's a platform which, in the meantime, drives 2.5 billion euros. I mean, this was a platform three years ago that was hardly integrated with our applications. Now there's a harmonized data model, strong integration, and we can run the IT landscapes of our customers with much less complexity in the cloud, with much better integration also to non-SVP solutions. And, of course, that also gives us now the leverage to also actively cross sell. I mean, when you look at some of our customers, also here in Germany, they often start with finance and logistics. Then we move on to the total workforce. Then let's really digitize procurement. Then let's really look into the supply chain. And all this is happening on BTP.

Dominik Asam: Earnings per share increased by 24% to EUR 5.01, and free cash flow for the full year was up 16% to EUR 5.1 billion, exceeding the revised outlook of approximately EUR 4.9 billion. The positive development was primarily driven by obviously the profitability improvement and working capital improvements, but we also had some positive impact on phasing of capital expenditures and leasing, which we pushed out into 2024. Overall, we are making good progress on our journey to solidify our free cash flow plans. Restructuring expenses in the context of the planned transformation program already described by Christian are projected to amount to approximately EUR 2 billion. The vast majority is expected to be recognized in H1 2024.

Dominic Awesome: Earnings per share increased by 24% to five Europe on Sem and free cash flow for the full year was up 16% to $5 1 billion euros.

Dominic: Earnings per share increased by 24% to 5 euro 1 cent.

Dominic: The free cash flow for the full year was up 16% to 5.1 billion euros, exceeding the revised outlook of approximately 4.9 billion.

Dominic Awesome: Exceeding the revised outlook of approximately $4 9 billion.

Dominic: The positive development was primarily driven by obviously the profitability improvement and working capital improvements.

Dominic Awesome: This development was primarily driven by obviously the profitability improvement and working capital improvements.

Dominic: But we also had some positive impacts on phasing of capital expenditures and leasing, which we pushed out into 2020.

Dominic Awesome: But we also had some positive impact on phasing of capital expenditures and leasing, which we pushed out into 2024.

Dominic Awesome: Overall, we are making good progress on our journey to solidify our free cash flow plants.

Dominic: Overall, we are making good progress on our journey to solidify our free cash flow plans.

Dominic: Now, restructuring expenses in the context of the plant transformation program, already described by Christian, are projected to amount to approximately 2 billion euros.

Dominic Awesome: Now restructuring expenses in the context of the planned transformation program already described by Christian.

Dominic Awesome: Projected to amount to approximately 2 billion euros. The vast majority is expected to be recognized in the first half of 2024.

Dominic: The vast majority is expected to be recognized in the first half of 2024.

Dominik Asam: I have to caution you though, we're just starting the negotiation with social partners in some countries and need to make certain assumptions on the specific mix of measures and its geographic composition. This might require some material adjustments to these numbers as we move forward, and then of course, the related cash out. Simultaneously, we are stepping up our investment in Business AI to drive automation. We see significant growth opportunities lying ahead, and we wanna improve what we call operating leverage, i.e., the ability to contain cost growth at lower levels than the revenue growth. The incremental savings will allow us to increase our non-IFRS operating profit ambition before stock-based compensation for 2025 from EUR 11.5 billion to 12 billion. Now net of share-based compensation of approximately EUR 2 billion, this translates into EUR 10 billion under our new non-IFRS operating profit definition.

Speaker Change: I have to caution you though, we're just starting the negotiation with social partners in some countries,

I have to caution you, though we're just starting the negotiation with the social partners in some countries.

Speaker: Actually, we had a very strong 2023.

Speaker Change: and need to make certain assumptions on the specific mix of measures and its geographic composition.

Dominic Awesome: And need to make certain assumptions on the specific mix of measures and its geographic composition.

Speaker: We're now ready to build the next phase of our transformation. We're going to see that we accelerate cloud revenue and profit towards 2025 and also in the years beyond. Again, many thanks to all of our employees, to our partners, to our customers for being with us on this journey, a journey which will not stop here. We're going to continue, and we're going to make SAP a great company in the years to come.

Christian Klein: Last but not least... Let me also shed a little light on the transformation program we actually announced today. We invest. We invest heavily in future growth. SAP is a growth company, and we will not fall short in investments to really capture these massive opportunities we have. We're going to invest nearly a billion in AI by the end of 2025.

Dominic Awesome: So this requires some material adjustments to this numbers as we move forward and then of course the related cash out.

Speaker Change: This requires some material adjustments to these numbers as we move forward, and then, of course, the related caching.

Speaker Change: Simultaneously, we are stepping up our investment in business AI to drive automation.

Dominic Awesome: Simultaneously, we are stepping up our investment in business AI to drive automation.

Speaker Change: We see significant growth opportunities lying ahead and we want to improve what we call operating leverage, i.e. the ability to contain cost growth at lower levels than the revenue growth.

Dominic Awesome: We see significant growth opportunities lying ahead, and we want to improve what we call operating leverage I E. The ability to contain cost roles at lower levels than the revenue growth.

Dominic Awesome: The incremental savings will allow us to increase our non <unk> operating profit ambition before stock based compensation for 2025 from 11 5 billion to $12 billion now net of share based compensation of approximately 2 billion euros. This translates into 10 billion under our new non <unk> operating profit definition.

Speaker Change: The incremental savings will allow us to increase our non-IFRS operating profit ambition before stock-based compensation for 2025 from €11.5 billion to €12 billion. Now net of share-based compensation of approximately €2 billion. This translates into €10 billion under our new non-IFRS operating profit definition.

Speaker: Thanks a lot, and now it's over to you, Dominic.

Dominic: Thank you, Christian, and thank you all for joining us this morning.

Christian Klein: We will invest heavily in really stellar portfolios like supply chain, like sustainability, to further accelerate the innovation for our customers. We're going to invest in new architects, to the point earlier, to make sure that our customers are transforming and not only lifting and shifting. And second, of course, we're also going to apply AI internally. So we're gonna reach more scale. We're gonna automate activities.

Speaker: Happy and healthy 2024 to everyone. We once again delivered on our financial targets for the year and are making great progress towards our ambition of 2021. Our financial results demonstrate our commitment to our stated goal. With a strong finish in Q4, we're exceeding our own expectations. Cloud and Software Revenue, Non-Alphares Operating Profit, and Free Cash Flow. The strong order intake and resulting current cloud backlog gives us confidence that we'll keep the momentum this year. This is underpinned by the success we've seen with RISE for SAP. It is the solution of choice for our global customers to help drive the end-to-end business transformation. This is evident as large cloud transactions with a volume greater than 5 million euros contributed 55% to cloud order entry for the full year and an impressive 62% in Q4.

Dominik Asam: The benefits of the planned program and from the investments in Business AI will become more apparent in subsequent years as we capitalize on improved operating leverage at increased scale. This also allows us to increase the free cash flow ambition for 2025 to EUR 8 billion. This is net of any cash out for restructuring that might spill over from 2024 into 2025. As we have to absorb about EUR 400 million of cash out for pre-existing compliance related measures and the unwinding of some kind of SAP triggered factoring we've done in the past on top of the preliminary estimate of EUR 2 billion cash out for restructuring. The corresponding underlying free cash flow number net of these effects in 2024 is EUR 5.9 billion. EUR 5.1 billion last year, EUR 5.9 billion adjusted for these effects.

Dominic Awesome: Yeah.

Dominic Awesome: The benefits of the planned program and from the investments in business. They are it will become more apparent in subsequent years as we capitalize on improved operating leverage at increased scale.

Speaker Change: The benefits of the planned program and from the investments in business AI will become more apparent in subsequent years as we capitalize on improved operating leverage at increased scale.

Dominic Awesome: This also allows us to increase the free cash flow ambition for 2025 to 8 billion euros.

Speaker Change: This also allows us to increase the free cash flow ambition for 2025 to 8 billion euros.

Speaker Change: This is net of any cash out for restructuring that might spill over from 2024 into 2025.

Dominic Awesome: This is net of any cash out for restructuring that might spillover from 2024 into 2025.

Christian Klein: And with that, of course, comes also a transformation of our workflow. And I also want to point out today that we are going to allocate roughly 2 billion euros to this transformation program for restructuring. The transformation program is actually impacting over 8,000 people. And at that point, I want to highlight one thing. Making such decisions is never easy.

Dominic Awesome: As we have to absorb about $400 million of cash out for pre existing compliance related massive measures and the unwinding of some kind of S&P triggered factoring we've done in the past on top of the preliminary estimate of 2 billion cash out for restructuring.

Speaker Change: As we have to absorb about 400 million of cash out for pre-existing compliance-related measures and the unwinding of some kind of SAP-triggered factoring we've done in the past on top of the preliminary estimate of 2 billion cash out for restructuring,

Speaker Change: The corresponding underlying free cash flow number net of these effects in 2024 is 5.9 billion, so 5.1 last year, 5.9 depolluted for these effects.

Dominic Awesome: The corresponding underlying free cash flow number net of these effects in 2024.

Dominic Awesome: Is five 9 billion or $5, one last year of $5 90 polluted for these effects and now you might wonder how do we get to $8 billion, which is a steep increase in 2025, well it's simply the improvement in the profitability net of Texas, plus the fact that we have switched stock based compensation from cash settled equity settled and.

Dominik Asam: Now we might wonder, how do we get to EUR 8 billion, which is a steep increase in 2025? Well, it's simply the improvement in the profitability net of taxes, plus the fact that we have switched stock-based compensation from cash settled to equity settled. Then that actually gives you almost a full bridge to that EUR 8 billion in 2025. Now, our investments in the winning sustainability solution portfolio have been very well received by the market. We now have approximately 1,000 Cloud for Sustainable Enterprises customers. We view sustainability as an additional growth space with market trends that, as the convergence of sustainability and financial standards, and increasing disclosure requirements, playing to our strength. In Q4, we released two new sustainability solutions. One is called Sustainability Data Exchange, which helps businesses gain transparency on suppliers' CO2 emissions.

Speaker Change: And now you might wonder, how do we get to $8 billion, which is a steep increase in 2025? Well, it's simply the improvement in the profitability net of taxes, plus the fact that we have switched stock-based compensation from cash-settled to equity-settled. And then that actually gives you almost a full bridge to that $8 billion in 2025.

Christian Klein: I've been a partner of SAP for over 24 years in the meantime. I'm a child of SAP, and when you impact people, that's never easy. But the same thing we did three years ago, we are doing here now again. We are giving SAP the best future. We are giving SAP the future, a future with high growth to compete in the tech industry. And this is, for us, very important to give our 100,000 people the best future we can. And then, yes, you have to make tough decisions.

Dominic Awesome: And then that actually gives you almost a full bridge to that $8 billion in 2025.

Speaker: I'd like to remind everyone about the reporting changes we announced a good month ago and give you a brief update on the new cloud ERP suite disclosure. Cloud Air P Suite is our growth engine. It represents 82% of our combined SAS and PAS revenues and is growing by 33% in fiscal year 2023, up from 32% in the prior year. We expect Cloud Air P Suite to sustain very high growth rates and therefore to represent a growing share of our cloud business going forward. The current cloud backlog reached 13.7 billion euros, continuing its growth at scale to 27%. That is the fastest pace on record.

Dominic Awesome: Now our investments in the winning sustainability solution portfolio has been very well received by the market.

Speaker Change: Now, our investments in the winning sustainability solution portfolio have been very well received by the market.

Speaker Change: We now have approximately 1,000 Cloud for Sustainable Enterprise customers.

We now have approximately 1000 cloud for sustainable enterprise customers be view sustainability as an additional growth space.

Speaker Change: We view sustainability as an additional growth space.

Speaker Change: with market trends as the convergence of sustainability and financial standards and increasing disclosure requirements playing to our strengths.

Dominic Awesome: With market trends, that's as the convergence of sustainability and financial standards, and increasing disclosure requirements playing to our strength.

Dominic Awesome: In Q4.

Speaker Change: Into your four.

Christian Klein: And out of the 8,000 people, two-thirds, hopefully, we can also handle with voluntary measures like early retirement, like lift and shift. We are going to invest over $100 million in education to help people to find new jobs in the close areas I just mentioned. So we have those people in mind when we do our best to make this as smooth as we can, to net it out. Actually, we had a very strong 2023.

Dominic Awesome: We released two new sustainability solutions, one is called sustainability data exchange, which helps businesses gained transparencies.

Speaker Change: We released two new sustainability solutions. One is called Sustainability Data Exchange,

Speaker Change: helps businesses gain transparency

Dominic Awesome: On suppliers C O two emissions and then Theres Green Tau, which enables companies to provide traceability and transparency across the supply chain.

Speaker Change: and suppliers CO2 emissions.

Dominik Asam: Then there's Green Token, which enables companies to provide traceability and transparency across the supply chain. I'm also happy to confirm that we have met our 2023 non-financial metric targets, including being carbon neutral in our own operations. In summary, we have achieved all key objectives in 2023. Our strategy works and remains consistent. However, also we have to evolve and continue to adapt to fast changing environments. Our outlook illustrates that we are on the right trajectory to achieve our updated 2025 ambition. In 2024, we will focus on staying the course. Also delivering on that ambition is a compelling argument to convince our customers to build intelligent, sustainable enterprises based on Business AI, and to attract and retain the best talent to master the challenges lying ahead. With continued focus on strong execution, we remain confident about SAP's future.

Speaker Change: and then there's Green Token which enables companies to provide traceability and transparency across the supply chain

Dominic Awesome: I'm also happy to confirm that we have met our 2023 nonfinancial metric targets, including being carbon neutral in our own operations.

Speaker Change: I'm also happy to confirm that we have met our 2023 non-financial metric targets, including being carbon neutral in our own operations.

Dominic Awesome: In summary, we have achieved all key objectives in 2023.

Speaker Change: In summary, we have achieved all key objectives in 2023

Speaker Change: Our strategy works and remains consistent.

Speaker: Total cloud backlog for the year even grew by 39%. Cloud revenue grew 23% year-on-year, underpinned by cloud revenue growth of 25% in the last quarter and underlying strong performance across all geographies. Cloud revenue now surpasses combined software licenses and software support revenue.

Dominic Awesome: Our strategy works and remains consistent however.

Speaker Change: However, also we have to evolve and continue to adapt to fast...

Dominic Awesome: However, also we have to evolve and continue to adapt to fast changing environments.

Speaker Change: Changing Environment.

Speaker Change: Our outlook illustrates that we are on the right trajectory to achieve our updated 2025 ambition.

Dominic Awesome: Our outlook illustrates that we're on the right trajectory to achieve our updated 2025 ambition.

Speaker Change: In 2024, we will focus on staying the course

Christian Klein: We're now ready to build the next phase of our transformation. We're going to see that we accelerate cloud revenue and profit towards 2025 and also in the years beyond. Again, many thanks to all of our employees, to our partners, to our customers for being with us on this journey, a journey which will not stop here. We're going to continue, and we're going to make SAP a great company in the years to come. Thanks a lot.

Dominic Awesome: In 2024, we will focus on staying the course.

Dominic Awesome: Also delivering on that ambition is a compelling argument to convince our customers to build intelligent sustainable enterprises based on business AI and to attract and retain the best talent to master. The challenges lying ahead with continued focus on strong execution, we remain confident about sap's future.

Speaker Change: Also delivering on that ambition is a compelling argument to convince our customers to build intelligent, sustainable enterprises based on business AI and to attract and retain the best talent to master the challenges lying ahead.

Speaker Change: With continued focus and strong execution, we remain confident about SAP's future.

Speaker: It is effectively our largest and fastest growing revenue system. Our combined SaaS and PaaS portfolio for 2023 continued to grow by an impressive 26%. SAAS revenue was up 23% and PASS up 46%. This strong performance was primarily driven by the outstanding contribution of the aforementioned cloud ERP suite, including the business technology platform. Total revenue for the full year was up 9%, and also services. Now, going down the P&L, our cloud gross margin for the full year continued its upward trend from last year. It expanded by 2.4 percentage points to 72.6%, driving cloud gross profit up by 27%. In the fourth quarter, non-IFRS operating profit was up 2%, but, as a reminder, there are some special effects. Operating profit was negatively impacted by the accelerated amortization of capitalized sales commissions related to the on-prem business. I have bonus accruals because we had an extremely strong finish to the year in Q4. And don't forget, the prior year operating profit baseline included a disposal gain of 109 million euros related to the sale of Lidl.

Dominik Asam: Thank you, and we'll now be happy to answer your questions.

Dominic Awesome: Thank you and we'll now be happy to answer your questions.

Speaker Change: Thank you and we'll now be happy to answer your questions.

Monika Schaller: Yes. Thank you, Christian. Thank you, Dominik. With that, we are going to move into the Q&A session. As I pointed out earlier on, use the chat tool to send us your question. Please also let us know your name and outlet. I would like to start it here in the room. Do we have any questions from the audience? Robin Wille, Deutsche Presse-Agentur.

Speaker Change: Yes. Thank you Christian Thank you Dominic and with that we are going to move into the Q&A session and as I pointed out earlier on use the chat tool to send US. Your question. Please also let us know your name and outlets.

Speaker Change: Yes, thank you Christian, thank you Dominic. With that we are going to move into the Q&A session. As I pointed out earlier on, use the chat tool to send us your question. Please also let us know your name and outlet. But

Speaker Change: But.

Speaker Change: I would like to start a T in the room and do we have any questions from the audience and robbing delight I chip.

Speaker Change: I would like to start it here in the room. Do we have any questions from the audience? Robin Wille, Deutsche Presseagentur.

Dominic: And now, over to you, Dominic. Thank you, Christian, and thank you all for joining us this morning. A happy and healthy 2024 to everyone. We have once again delivered on our financial targets for the year and are making great progress towards our Ambition 2020. Our financial results demonstrate our commitment to our stated goals. With a strong finish in Q4, we are exceeding our own expectations for cloud and software revenue, non-IFRS operating profit, and free cash flow. The strong order intake and resulting current cloud backlog gives us confidence that we'll keep the momentum this year. This is underpinned by the success we've seen with RISE for SAP. It is the solution of choice for our global customers to help drive the end-to-end business transformation. This is evident as large cloud transactions with a volume greater than €5 million contributed 55% to cloud order entry for the full year and an impressive 62% in Q4.

Speaker Change: And to us.

Robin Wille: Yes, good morning. Mr. Klein, one question regarding your restructuring program. You said that you want to focus on strategic growth areas such as AI, but in which areas or functions do you specifically want to make savings? Where exactly are the 8,000 jobs affected by the program located?

Robin Wille: Yes, good morning. Mr. Klein, one question regarding your restructuring program. So you said that you want to focus on strategic growth areas such as AI, but in which areas or functions do you specifically want to make savings? So where exactly are the 8,000 jobs affected by the program located?

Robbing: Yes, good morning.

Speaker Change: Mr. Klein one question regarding your restructuring program.

Speaker Change: So you've said that you want to focus on strategic growth areas, such as AI, but in which areas or functions to us. It's typically one to make savings so where exactly are the 8000 shops effected by the program located.

Dominik Asam: Yeah, thanks a lot for the question, Robin. Look, indeed, we invest and we invest a few billion EUR to fuel SAP's growth. Main investment area, clearly AI. We are applying AI internally, broadly, in development, in delivery, in services, in sales, in finance, and the jobs will change. When you're looking into some of our ratios, where we actually see the most productivity levels, it's clearly on the go-to-market. It's also in some of the supporting functions. It will go across SAP. Very important, as you also heard.

Christian Klein: Yeah, thanks a lot for the question, Robin. Look, indeed, we invest and we invest a few billion EUR to fuel SAP's growth. Main investment area, clearly AI. We are applying AI internally, broadly, in development, in delivery, in services, in sales, in finance, and the jobs will change. When you're looking into some of our ratios, where we actually see the most productivity levels, it's clearly on the go-to-market. It's also in some of the supporting functions. It will go across SAP. Very important, as you also heard.

Speaker Change: Yeah. Thanks, a lot for the question, Rob and look.

Christian Klein: Thanks a lot for the question, Robin. Look, indeed, we invest.

Speaker Change: Indeed, we invest and we invest a few billion to Fu L. S&P Squoze main investment area clearly AI.

Christian Klein: We invest a few billion to fuel SAP's growth. Main investment area, clearly AI.

Christian Klein: We are applying AI internally.

Speaker Change: We are applying AI internally, partly development and delivery services and sales and finance.

Christian Klein: Development, Delivery, Services, Sales, Finance,

Speaker Change: And the Trups will change and when Youre looking into some of our ratios where.

Christian Klein: The jobs will change. And when you're looking into some of our ratios, where we actually see the most productivity levels, it's clearly on the go-to-market. It's also in some of the supporting functions. So it will go across SAP. But very important, as you also heard, out of the 8,000, two-thirds, hopefully, we're going to find voluntary measures. So we also invest in rescaling. Some of these people we can definitely also see in future growth functions of SAP. So I really want to underscore that. And so we are very, very confident that we can run this program as smooth as we can also for our employees.

Speaker Change: Where we actually see the most productivity levels. It's clearly on the go to market. It's also in some of the supporting functions. So it will go cross sell SAP, but very important as you also heard out of the 8002 thirds hopefully we gonna find voluntary measure. So we also invest in V scaling some of these people we.

Christian Klein: Out of the 8,000, two thirds, hopefully we're gonna find voluntary measures. We also invest in reskilling. Some of these people we can definitely also see in future growth functions of SAP. I really wanna underscore that. We are very, very confident that we can run this program as smooth as we can also for our employees. Yeah.

Speaker Change: Can definitely also see in future growth functions of SVP, So I really want to underscore that and so we are where we where are we confident that we can one this program as smooth as we can also for our employees.

Monika Schaller: Thank you, Christian. We got a similar question via our tool from Capital, also asking which job profiles will change. Hannah, I hope we have answered that question, but let's stick to the topic of restructuring, Christian. A question from Reuters Breakingviews. We are wondering if this is one of those situations where tech companies overhired during the pandemic and are now using the shift towards AI as an opportunity to straighten that out. We'd appreciate details on what kinds of jobs are being cut.

Speaker Change: Thank you Christian we got a similar question by our tool from Catheti I'm also asking which show proof at this stage.

Speaker Change: Thank you, Christian. We got a similar question via our tool from Capital. I'm also asking which job profiles will change. So, Hannah, I hope we have answered that question, but let's stick to the topic of restructuring, Christian. A question from Reuters Breaking News.

Speaker: For the entire fiscal year, we kept our promises and delivered double-digit operating profit growth of 13% year-over-year, reaching 8.72 billion euros.

Speaker Change: Chop profile will change shorthand that I hope, we have answered that question, but let's stick to the topic of restructuring kristian aggression from writers breaking news. We are wondering if this is one of those situations that tech companies all of our Hyatt during the pandemic and then now we're using the shift towards AI as an opportunity.

Dominic: I'd like to remind everyone about the reporting changes we announced a good month ago and give you a brief update on the new Cloud ERP Suite Disclosure. Cloud Air P Suite is our growth engine. It represents 82% of our combined SaaS and PaaS revenues and is growing by 33% in fiscal year 2023, up from 32% in the prior year. We expect Cloud ERP Suite to sustain very high growth rates and therefore to represent a growing share of our cloud business going forward. Current cloud backlog reached 13.7 billion euros. That is the fastest pace on record. Total cloud backlog for the year even grew by 39%. Cloud revenue grew 23% year-on-year, underpinned by cloud revenue growth of 25% in the last quarter and underlying strong performance across all geographies.

Christian Klein: We are wondering if this is one of those situations where tech companies overhired during the pandemic and are now using the shift towards AI as an opportunity to straighten that out. So we'd appreciate details on what kinds of tech companies.

Speaker Change: To straighten that out so we'd appreciate details on what kinds of trucks.

Speaker: I'm particularly pleased that we have snapped back to growth in non-IFRS operating profit, especially as starting in 2024, we will no longer exclude share-based compensation expenses from our non-IFRS results. I recall that was an issue some of you took it on. So we announced last month that we will report based on post-stock-based compensation, and I can also confirm that we have turned the corner in terms of snapping back to growth on that profit measure. Earnings per share increased by 24% to 5 euros and 1 cent. The free cash flow for the full year was up 16% to 5.1 billion euros, exceeding the revised outlook of approximately 4.9 billion. The positive development was primarily driven by the obviously profitability improvement and working capital improvements.

Christian Klein: Yeah. I mean, we definitely didn't overhire. I mean, first of all, you have seen the growth we delivered. When you're growing, you're also gonna see in the future investments, and also of course headcount growth in headcount also in many parts of this company. Of course under proportional. You know, as we are also sharing with our customers, look at the impact of AI on their business model, on their business processes, and it's not different to SAP. Also very important when you look into our hiring. We are hiring some of the best PhDs from Berkeley. We are hiring some of the best PhD from the HPI. We are bringing in great data scientists. We are bringing in great engineers. We are hiring in UX. We are hiring in Southeast Asia to capture the growth market there.

Speaker Change: Yeah, I mean, we definitely didn't know, Ohio, I mean first of all you have seen the quotes we delivered and when you're growing you also going to see in the future investments and also of course head count growth in head count.

Speaker Change: Yeah, I mean, we definitely didn't overhire. I mean, first of all, you have seen the growth we delivered. And when you're growing, you're also going to see in the future investments and also, of course, headcount, growth in headcount, also in many parts of this company. But, of course, underproportional. And, you know, as we are also sharing with our customers, look at the impact of AI on their business model, on their business process, and it's not different.

Speaker Change: So in many parts of this company, but of course under proportional and can horse. We also sharing with our customers look at the impact of AI on that business model on that business pulse width, and its not different to Asap and.

Speaker Change: to SAP and also very important when you look into our hiring.

Speaker Change: Also very important when you look into our hiring.

Speaker Change: We are hiring some of the best PhDs from Berkeley, we are hiring some of the best PhDs from the HPI, we are bringing in great data scientists, we are bringing in great engineers, we are hiring in UX, we are hiring in Southeast Asia to capture the gross market there, we are doing business in 160 countries.

Speaker Change: We are hiring some of the best Phds from Berkeley, we are hiring some of the best Phd from the API, we are bringing create data scientists we are bringing great engineers, we are hiring in UX via hiring in southeast Asia to capture the close market. There we're doing business in 160 countries.

Christian Klein: We are doing business in 160 countries. We for sure didn't overhire. What is our job, and this is also what we owe to our employees actually, is to always make sure that we also have, you know, the best workforce in the market. Sometimes, you know, while the technology helps us to scale, you also have to make sure that you drive the necessary transformation to secure the future growth, to really build on the strong foundation what SAP does. There was for sure no over-hiring. Again, you know, we're also going to continue to invest. On the other side, we of course also, you know, gain the necessary productivity to also build a successful future for SAP.

Speaker Change: So we for sure didn't overhire, but what is our job, and this is also what we owe to our employees actually.

Speaker Change: So we for sure didn't know, Ohio, but what is our job and this is also what we owe to our employees, who actually is to always make sure that we also have the best workforce in the market and sometimes in a while the technology helps us to scale. You also have to make sure that you drive the necessary transformation to secure the future growth to really.

Speaker Change: To always make sure that we also have, you know, the best workforce in the market. And sometimes, you know, while the technology helps us to scale, you also have to make sure that you drive the necessary transformation to secure the future.

Speaker: But we also had some positive impacts on the phasing of capital expenditures and leasing, which we pushed out into 2020. Overall, we are making good progress on our journey to solidify our free cash flow plans. Now, restructuring expenses in the context of the plant transformation program, already described by Christian, are projected to amount to approximately 2 billion euros, and the vast majority is expected to be recognized in the first half of 2024. I have to caution you though, we're just starting the negotiations with social partners in some countries and need to make certain assumptions about the specific mix of measures and its geographic composition. This requires some material adjustments to these numbers as we move forward, and then, of course, the related caching.

Dominic: Cloud revenue now surpasses the combined software licenses and software support revenue. It is effectively our largest and fastest growing revenue stream. Our combined SaaS and PaaS portfolio for 2023 continued to grow by an impressive 26%. SAAS revenue was up 23% and passed up by 46.

Speaker Change: to really build on this strong foundation what SAP does. So there was for sure no overhiring. And again, we're also going to continue to invest. And on the other side, we of course also gain the necessary productivity to also build a successful future for SAP.

Speaker Change: Build on this strong foundation, what S&P does so there was for sure no over hiring.

Speaker Change: And again you know, we also going to continue to invest and on the other side. We of course also gain the necessary productivity to also build a successful future for S. E P.

Monika Schaller: Thank you, Christian. I have one more question on the restructuring from the online tool. Before I go back to the online tool, any other questions here from the audience? Excellent. Herr Gross, Rhein-Neckar-Zeitung.

Speaker Change: Thank you, Christian. I have one more question on restructuring from the online tool, but before I go back to the online tool, any other questions here from the audience?

Speaker Change: Thank you Christian I have one more question on the restructuring from the online tool, but before I go back to the online tool any other questions here from the audience.

Dominic: This strong performance was primarily driven by the outstanding contribution of the aforementioned cloud ERP suite, including the business technology platform. Total revenue for the full year was up 9%, supported by the cloud and also services. Now going down the P&L, our cloud gross margins for the full year continued their upward trend from last year. It expanded by 2.4 percentage points to 72.6%, driving cloud gross profit up by 27%. In the fourth quarter, non-IFRS operating profit was up 2%, but, as a reminder, there are some special effects. Operating profit was negatively impacted by the accelerated amortization of capitalized sales commissions related to on-prem business.

Speaker Change: Excellent.

[Analyst] (Rhein-Neckar-Zeitung): In your outlook, it is said that you expect approximately EUR 500 million savings from this restructuring, this transformation. Maybe you can explain how is it possible when the total number of employees will be the same in the end of the year?

Speaker Change: Air closer eye makeup title knowledge.

Matthias Kros: In your outlook, it is said that you expect approximately EUR 500 million savings from this restructuring, this transformation. Maybe you can explain how is it possible when the total number of employees will be the same in the end of the year?

Speaker Change: In your outlook, it is said that you

Speaker Change: In your outlook, you just said that.

Speaker Change: Okay.

Speaker Change: Approximately 500 million euros savings from this restructuring.

Speaker Change: Approximately 500 million euros savings from this restructuring this transformation. So maybe you can explain how is it possible when the.

Speaker Change: Transformation. So maybe you can explain how is it possible when the

Speaker Change: The total number of employees will be the same in the end of the year.

Speaker Change: Total number of employees will be the same in the end of the year.

Dominik Asam: Yeah. I mean, that's really the net amount of what we do. As Christian has highlighted, on the one hand, we are reducing headcount. On the other side, we are investing also in IT, i.e., automation already in 2024, which will make our people more productive. In 2025, we start reaping that improved efficiency. Because in 2024, actually, you don't see any savings yet. First of all, we start the program only in Q2 in terms of really starting to see some departures. Second, we will redeploy money here to really make us more productive. I think artificial intelligence, Business AI, gives us some unique opportunities to become more efficient. Don't forget, I mean, our customers always very closely watch how we are doing on that front.

Yeah, I mean, that's really the net amount of what we do and as Christian has highlighted on the one hand, we are reducing head count.

Speaker Change: I mean that's really the net amount of what we do as Christian has highlighted. On the one hand we are reducing headcount, on the other side we are investing also in IT, i.e. automation already in 2024 which will make our people more productive.

Speaker Change: On the other side, we are investing also in I T E automation already in 2024, which will make our people more productive.

Speaker Change: So then in 2025, we start reaping that improved efficiency because in 2024, actually, you don't see any savings yet. First of all, we start the program only in Q2 in terms of really starting to see some

Speaker Change: So then in 2025, we start reaping that improved efficiency because in 2024 actually you don't see any savings yet.

Speaker Change: First of all the stock the program all in Q2 in terms of really starting to see some.

Speaker: Simultaneously, we are stepping up our investment in business AI to drive automation. We see significant growth opportunities lying ahead, and we want to improve what we call operating leverage, i.e. the ability to contain cost growth at lower levels than revenue growth. The incremental savings will allow us to increase our non-IFRS operating profit ambition before stock-based compensation for 2025 from €11.5 billion to €12 billion. Now net of share-based compensation of approximately €2 billion. This translates into €10 billion under our new non-IFRS operating profit definition. The benefits of the planned program and from the investments in business AI will become more apparent in subsequent years as we capitalize on improved operating leverage at increased scale. This also allows us to increase the free cash flow ambition for 2025 to 8 billion euros.

Speaker Change: Departures.

Speaker Change: and Departures.

Speaker Change: Secondly, we will redeploy money here to really make us more productive. I think artificial intelligence, business AI, gives us some unique opportunities to become more efficient. And don't forget, I mean, our customers always very closely watch how we are doing on that front. If we cannot demonstrate that capability to become more productive ourselves, how should we convince them that we are the right partner for them to make them more productive on their own digital transformation?

Speaker Change: Secondly, we will redeploy money here to really make us more productive I think artificial intelligence business AI gives us some unique opportunities to become more efficient and don't forget I mean, our customers always very closely watch how we're doing on that front. If you cannot demonstrate that capability to become more productive ourselves how should we can.

Dominic: I have bonus accruals because we had an extremely strong finish to the year in Q4. And, don't forget, the prior year operating profit baseline included a disposal gain of 109 million euros related to the sale of Littler. For the entire fiscal year, we kept our promise and delivered double-digit operating profit growth of 13% year-over-year, reaching €8.72 billion. I'm particularly pleased that we have snapped back to growth in non-IFRS operating profit, especially as starting in 2024 we will no longer exclude share-based compensation expenses from our non-IFRS results. I recall that was an issue some of you took up.

Dominik Asam: If we cannot demonstrate that capability to become more productive ourselves, how should we convince them that we are the right partner for them to make them more productive on their own digital transformation journeys? It's a net number, kind of fueled by the combination of, kind of making our resources fit better to what our needs are, and then also using some of the savings to boost productivity.

Speaker Change: Many of them that we're the right partner for them to make them more productive on their own digital transformation journeys. So it's a net number.

Speaker Change: So it's a net number kind of fueled by the combination of making our resources fit better to what our needs are and then also boosting using some of the savings to boost productivity.

Speaker Change: Fueled by the combination of himself, making our resources fit better to what our needs are and then also boosting some using some of the savings to boost productivity.

Monika Schaller: Dominik, to add on that one, I have one other question for you from Bloomberg. Is there clarity on a regional breakdown of the restructuring? Will Germany be most affected?

Speaker Change: Dominic, to add on that one, I have one other question for you from Bloomberg. Is there clarity on a regional breakdown of the restructuring? Will Germany be most affected?

Speaker Change: Dominic to add on that one I have one other question for you from Bloomberg and clarity on a regional breakdown of the restructuring will Germany be most affected.

Dominik Asam: There, we are just fine-tuning these numbers, so bear with us a little bit on that one. Don't expect anything that's kind of wildly different from our footprint we have today. It would be quite balanced throughout the world.

Dominic: We are just fine-tuning these numbers, so bear with us a little bit on that one, but don't expect anything that's kind of wildly different from our footprint we have today, so it would be quite balanced throughout the work.

Speaker Change: We are just fine tuning these numbers, so bear with us a little bit on that one but don't expect anything that's kind of wildly different from our footprint. We have today. So it would be quite balanced throughout the world.

Monika Schaller: Thank you. I think here in the room, Herr Freitag, I think you were next, right?

Dominic: So, we announced last month that we will report based on post-stock-based compensation, and I can also confirm that we have turned the corner in terms of snapping back to growth on that profit measure. Earnings per share increased by 24% to €5.01, and free cash flow for the full year was up 16% to €5.1 billion, exceeding the revised outlook of approximately €4.9 billion. The positive development was primarily driven by, obviously, the profitability improvement and working capital improvements. But we also had some positive impact on the phasing of capital expenditures and leasing, which we pushed out into 2020. Overall, we are making good progress on our journey to solidify our free cash flow plans. Restructuring expenses in the context of the planned transformation program, already described by Christian, are projected to amount to approximately 2 billion euros. The vast majority are expected to be recognized in the first half of 2024.

Speaker Change: Thank you and so I think here in the room.

Speaker Change: Thank you. So I think here in the room, Herr Freitag, I think you were next, right?

Speaker Change: Hi Tech guys. Thank you Ben next right.

Speaker: This is net of any cash out for restructuring that might spill over from 2024 into 2025. As we have to absorb about 400 million of cash out for pre-existing compliance-related measures and the unwinding of some kind of SAP-triggered factoring we've done in the past on top of the preliminary estimate of 2 billion cash out for restructuring, the corresponding underlying free cash flow number net of these effects in 2024 is 5.9 billion, so 5.1 last year, 5.9 depolluted for these effects. And now you might wonder, how do we get to $8 billion, which is a steep increase in 2025? Well, it's simply an improvement in profitability net of taxes, plus the fact that we have switched stock-based compensation from cash-settled to equity-settled. And then that actually gives you almost a full bridge to that $8 billion in 2025.

[Analyst 1]: Okay.

Monika Schaller: Mm-hmm.

[Analyst 1]: Yeah. Okay. Hasso Plattner is leaving the company. What impact does this mean for you and your strategy? This is my first question. The second question, what role will M&A activities play in the future?

Speaker Change: Mhm.

Speaker Change: Okay.

Herr Freitag: Hasselbladner is leaving the company. What impact?

Speaker Change: Hasso Plattner is leaving the company.

Speaker Change: What impact.

Herr Freitag: I mean for you all.

Speaker Change: Does this mean for you.

Herr Freitag: This is my first question. And the second question, what role will M&A...

Speaker Change: Our strategy. This is my first question and the second question.

Speaker Change: What role will M&A activities play in the future.

Christian Klein: Yeah. Hasso. Look, first of all, it was great to see actually over the weekend. I studied the press, the media, and I guess he got the credit, you know, about all of his achievements for this company. I got so many nice mails also from our employees who didn't forget or don't forget what Hasso did for this company. Personally, I have to say, I mean, to manage such a turnaround, especially three years ago, where we actually had a different share price reaction, it also means you need a lot of backing by Hasso and the supervisory board. I'm extremely thankful that I always felt that. With Puneet now coming on board, I mean, Puneet knows us. I mean, he was a CEO of a large partner of SAP. He knows our business. Transition is working and he's coming on board.

Speaker Change: Yeah. So look first of all it's.

Speaker Change: Yeah, Hasso. Look, first of all, it was great to see actually over the weekend. I studied the press, the media, and I guess he got the credit.

Speaker Change: It was great to see actually over the weekend I studied depressed in media and I guess he got to credits.

Speaker Change: You know, about all of his achievements for this company. I got so many nice mails also from our employees who didn't forget or don't forget what Hasso did for this company.

Speaker Change: You know about all of us to achieve more treatment for this company I got so many.

Speaker Change: And I've made sort of harm our employees, who didn't forget don't forget for the household debt for this company.

Speaker Change: And personally, I have to say, I mean, to manage such a turnaround.

Speaker Change: And personally I have to say.

Speaker Change: Mean to manage such a turnaround.

Speaker Change: Specialties, we years ago, where we actually had a different share price reaction. It also means you need a lot of backing by hustle and the supervisory board and I am extremely thankful that I always felt that.

Speaker Change: Especially three years ago, when we actually had a different share price reaction.

Speaker Change: It also means you need a lot of backing by Hasso and the supervisory board, and I'm extremely thankful that I always felt

Speaker Change: With Puneet now coming on board I mean, puneet knows us I mean, he was the CEO of a large partner SCP. He knows our business transition is working.

Speaker Change: With Puneet now coming on board, I mean, Puneet knows us. I mean, he was the CEO of a large partner of SAP. He knows our business.

Speaker Change: Transition is working and he's coming on board. And I'm also very confident that we're going to also manage that transition in the best interest of SAP. And with regard to M&A.

Christian Klein: I'm very confident that we gonna also manage that transition in the best interest of SAP. With regard to M&A, it's a good situation to be in where you can look into the market, and of course we are looking, and see, you know, where are fields in our portfolio where customers actually asking us to get, you know, acceleration, you know, certain roadmaps where customers are asking us, Hey, I don't wanna use actually a third party solution because it's mission-critical data, and I don't wanna replicate this data from system A, SAP to non-SAP system. You saw LeanIX, you saw Signavio. LeanIX, rather new, but already had a great Q4, and we see positive momentum, and Signavio was one of the best acquisitions we did.

Speaker Change: And he's coming on board and I and we're we also where we are confident that we gone also manage that transition in the best interest of S&P and with regard to M&A.

Speaker: Now, our investments in the winning sustainability solution portfolio have been very well received by the market. We now have approximately 1,000 Cloud for Sustainable Enterprise customers. We view sustainability as an additional growth space, with market trends such as the convergence of sustainability and financial standards and increasing disclosure requirements playing to our strengths.

Speaker Change: It's a good situation to be in where you can look into the market and of course, we are looking and see where.

Speaker Change: It's a good situation to be in where you can look into the market, and of course we are looking, and see, you know, where are fields in our portfolio where customers are actually asking us to get, you know, acceleration of certain roadmaps, where customers are asking us, hey, I don't want to use actually a third-party solution because it's mission-critical data and I don't want to replicate this data from system A, SAP, to non-SAP.

Speaker Change: Our field and our portfolio of where customers are actually asking us to get you know acceleration and all of sudden halt maps, where customers are asking us.

Speaker Change: I don't want to use actually a third party solution because it's mission critical data and I don't want to replicate this data of home system a S. A P to non sap's system.

Speaker Change: So you saw Lena X, you saw Signavia.

Speaker Change: So you saw a lean I ask you saw scenario benign.

Speaker Change: Dana X, rather new but already had a great Q4 and we see positive momentum and Singario was one of the best acquisitions we did. And this really remains the strategy that we are only looking at what is very complementary to our core. We are of course listening to our customers and I would not rule it out, but again there is no need to buy now revenue which is a good position to be in.

Dominic: I have to caution you though, we're just starting the negotiations with social partners in some countries and need to make certain assumptions about the specific mix of measures and its geographic composition. So this might require some material adjustments to these numbers as we move forward. And then, of course, the related cash.

Speaker Change: And I ask what are new but already had a great Q4, and we see positive momentum in scenario was one of the best acquisitions, we did in.

Christian Klein: This will really remain the strategy that we are only looking at what is very complementary to our core. We are of course listening to our customers, and I would not rule it out, but again, there is no need to buy now revenue, which is a good position to be in.

Speaker: Into your four. We released two new sustainability solutions. One is called Sustainability Data Exchange, which helps businesses gain transparency on suppliers' CO2 emissions, and then there's Green Token, which enables companies to provide traceability and transparency across the supply chain. I'm also happy to confirm that we have met our 2023 non-financial metric targets, including being carbon neutral in our own operations. In summary, we have achieved all key objectives in 2023. Our strategy works and remains consistent. However, we also have to evolve and continue to adapt to the fast... Changing Environment.

Speaker Change: And this will really means to strategy that we all need looking what is very complementary to our core.

Speaker Change: We of course listening to our customers and I would not rule it out but again there is no need to buy now Avenue, which is a good position to be in.

Monika Schaller: Christian, at the moment I don't see any other questions on restructuring. Why don't we move to the topic of AI? I have two AI questions for you. Is SAP planning any further investments in AI companies following up on our investments in Aleph Alpha? And are we considering investing in Mistral AI?

Speaker Change: So appreciate the moment that it has any other questions on restructuring violently moved to the topic of AI edge to AI questions for you.

Speaker Change: Christian, at the moment I don't have any other questions on restructuring. Why don't we move to the topic of AI? I have two AI questions for you. Is SAP planning any further investments in AI companies following up on our investments in Aleph Alpha? And are we considering investing in Mysterio?

Dominic: Simultaneously, we are stepping up our investment in business AI to drive automation. We see significant growth opportunities lying ahead, and we want to improve what we call operating leverage, i.e. the ability to contain cost growth at lower levels than revenue growth. The incremental savings will allow us to increase our non-IFRS operating profit ambition before stock-based compensation for 2025 from €11.5 billion to €12 billion, now a net of share-based compensation of approximately €2 billion. This translates into €10 billion under our new non-IFRS operating profit definition.

Speaker Change: S&P planning any third investment in AI companies following up on our investments and added iPhone.

Speaker Change: Are we considering investing in this trial.

Christian Klein: I mean, you heard our announcement this morning with the partnership of NVIDIA. We're gonna use, and we're gonna integrate our two AI platforms, the DGX of NVIDIA with SAP. As you know, we can definitely also ensure that we can deliver together more trustworthy AI, a very important topic, especially in the business world. You're gonna probably hear a few more announcements. But for us it's also very important, as I mentioned, to also work together, you know, with top universities around the world on research, because what we can deliver organically is super strong. We have a treasure, that's our data, and now we need to make sure that our intelligent digital assistant is the smartest in the industry, you know, who can talk various languages, can process data across the company, and with that solve some of the hardest challenges of our customers.

Speaker Change: I mean, you heard our announcement this morning with the partnership of NV, Joe are we going to use and we're going to integrate our two AI platforms to TG acts of in Huizhou with S. P. As you know we can definitely also ensure that we can deliver together more trustworthy AI and very important topic, especially in the business world.

Christian Klein: I mean, you heard our announcement this morning with the partnership of NVIDIA we're going to use and we're going to integrate our two AI platforms, the TGX of NVIDIA with SAP, as you know, we can definitely also ensure that we can deliver together more trustworthy AI, a very important topic, especially in the business world. And you're going to probably hear a few more announcements, but for us, it's also very important, as I mentioned, to also work together with top universities around the world on research, because what we can deliver organically is super strong, we have a treasure, that's our data, and now we need to make sure that our digital assistant is the smartest in the industry, who can talk various languages, can process data across the company, and with that solve some of the hardest challenges of our customers. And we are in agreement. We're on a good track for that. There's no shortage of partners asking us, you know, to further co-innovate, and also our services partner, be it Accenture, Deloitte, PwC, EY, could now go on and on and on. I mean, they are actually reaching out and they are building up SAP AI practices, which is always a good sign. When they're investing, you know, there's something going on in the market, it's a good early indicator. And so also our services partners are ramping up more and more now to really move. Move in with SAP into the field of business AI. So yes, further partnerships, but also strong focus on organic innovation.

Speaker Change: And you're going to probably hear a few more announcements, but for US. It's also very important as I mentioned and to also work together with top universities around the world on research because what we can deliver organically is super strong and we have a treasure that our data and now we need to make sure that our digital assistant is the smartest in the industry.

Speaker: Our outlook illustrates that we are on the right trajectory to achieve our updated 2025 ambition. In 2024, we will focus on staying the course. Also, delivering on that ambition is a compelling argument to convince our customers to build intelligent, sustainable enterprises based on business AI and to attract and retain the best talent to master the challenges lying ahead. With continued focus and strong execution, we remain confident about SAP's future.

Dominic: The benefits of the planned program and from the investments in business AI will become more apparent in subsequent years as we capitalize on improved operating leverage at increased scales. This also allows us to increase the free cash flow ambition for 2025 to 8 billion euros. This is net of any cash out for restructuring that might spill over from 2024 into 2025. As we have to absorb about 400 million in cash-out for pre-existing compliance-related measures and the unwinding of some kind of SAP-triggered factoring we've done in the past on top of the preliminary estimate of 2 billion in cash-out for restructuring. The corresponding underlying free cash loan number, net of these effects in 2024, is 5.9 billion. So 5.1 last year, 5.9 depolluted for these effects.

Speaker Change: And who can talk various languages can process data across the company and with that solve some of the hardest challenges of our customers and we earn a good track for that there is no shortage of partners are asking us to further coin of weight and also our services partner.

Christian Klein: We are on a good track for that. There's no shortage of partners asking us, you know, to further co-innovate. Our services partner, be it Accenture, Deloitte, PwC, EY, could now go on and on and on. I mean, they are actually reaching out and they're building up SAP AI practices, which is always a good sign. When they're investing, you know there is something going on in the market. It's a good early indicator. Our services partners are ramping up more and more now to really move in with SAP into the field of Business AI. Yes, further partnerships, but also strong focus on organic innovation.

Speaker Change: We at Accenture, Deloitte Pwc Ey why couldn't you go on and on and on.

Speaker Change: They are actually reaching out and they are building up S&P AI practices, which is always a good sign when theyre investing you know there is something going on in the market. It's a good early indicator and so also our services partners are ramping up more and more now to really move in with S&P into the field of business AI. So yes further.

Speaker Change: No ships, but also a strong focus on organic innovation.

Monika Schaller: The second one for you before we go back to the room from Bo, IDC. What are your thoughts on what elements of AI to include in existing licenses subscriptions, and which ones do you charge extra for? Some SAP competitors are claiming not to charge extra for AI.

Christian Klein: Before we go back to the room from Bo from IDC, what are your thoughts on what elements of AI to include in existing licenses subscriptions and which ones do you charge extra for? Some SAP competitors are claiming not to charge extra for AI.

Speaker Change: One for you before we go back to the end to the room from ball from IDC. What are your thoughts on what elements of AI to include an existing licenses subscriptions and which ones do you charge extra for some ACP competitors are claiming not to charge extra for AI.

Christian Klein: Naya. Okay, let's go. I mean, first of all, we have two commercial offerings out there. Before I start with the commercial offerings, I really wanna emphasize that it's very important to sit there with customers, and this is what Philipp and Walter and the team are doing, looking at our use cases and measuring outcomes, measuring what you do today and how much more automated is this. Or when you do sales forecasting or inventory planning, what do you do today and how much smarter you can do it in the future, and what are the outcomes? Because if there's no outcome, there's no commercial, there's no success. On the commercial side, we are embedding AI also in our standard offerings. Yes, there are machine learning scenarios. There are other scenarios which we are embedding in our standard offerings.

Naya, Okay. So let's go.

Speaker Change: Naya. Okay, so let's go. I mean, first of all, we have two commercial offerings.

Speaker: Thank you, and we'll be happy to answer your questions now.

Naya: I mean first of all.

Speaker: Yes, thank you Christian, and thank you Dominic. With that, we are going to move into the Q&A session. As I pointed out earlier on, use the chat tool to send us your question. Please also let us know your name and outlet. But I would like to start it here in the room.

Naya: We have two commercial offerings out there.

Speaker Change: And before I start with the commercial offerings,

Naya: And before I start with the commercial offerings.

Speaker Change: I really want to emphasize that it's very important to sit there with customers, and this is what Philip and Walter and the team are doing, looking at our use cases and measuring outcomes.

Naya: I really want to emphasize that it's very important to sit there with customers and this is what filip and Walter and her team are doing looking at our use cases and measuring outcomes measuring.

Dominic: And now you might wonder, how do we get to $8 billion, which is a steep increase in 2025? Well, it's simply the improvement in profitability net of taxes, plus the fact that we have switched stock-based compensation from cash-settled to equity-settled, and then that actually gives you almost a full bridge to that $8 billion in 2025. Now, our investments in the winning sustainability solution portfolio have been very well received by the market. We now have approximately 1,000 cloud for sustainable enterprise customers. We view sustainability as an additional growth space, with market trends such as the convergence of sustainability and financial standards and increasing disclosure requirements playing to our strengths. In Q4, we released two new sustainability solutions.

Speaker Change: What do you do today and how much more automated is this? Or when you do sales forecasting or inventory planning, what do you do today and how much smarter you can do it in the future? And what are the outcomes?

Naya: What do you do today and how much more automated as this or when you do the sales forecasting our inventory planning what do you do today and how much smarter you can do it in the future and what are the outcomes because if there is no outcome. There is no commercial dose no success.

Speaker: Do we have any questions from the audience?

Speaker Change: Because if there's no outcome, there's no commercial, there's no success.

Robin Wille, Deutsche Presseagentur.

Speaker: Yes, good morning.

Speaker Change: and on the commercial side, we are embedding AI also in our standard offerings. Yes, there are machine learning scenarios. There are other scenarios which we are embedding in our standard offerings.

Naya: And on the commercial side, we are embedding AI also in our standard offerings. Yes. They are machine learning scenarios. There are other scenarios, which we are embedding in our standard offerings, but of course. There are also certain high value use cases, our digital assistant tool a few others, which we also package up in premium packages.

Mr. Klein, I have one question regarding your restructuring program.

Speaker: So you said that you want to focus on strategic growth areas such as AI, but in which areas or functions do you specifically want to make savings?

Christian Klein: Of course, there are also certain high value use cases. Our digital assistant, Joule, a few others, which we also package up in premium packages. The result in Q4 was really strong. To give you a flavor with our core offering, where we got a lot of net new customers on board, 60% of those customers decided to also embed AI right away in the solution of SAP. They pay an upside for that, but they see the value. Last but not least, we also have a kind of token offering. What does this mean? The customer buys a certain package of tokens. It's a consumption-based offering. You only pay when you're gonna use it. You only pay when you're gonna see the value. That's also a very attractive offering.

Speaker Change: But of course, there are also certain high-value use cases, our digital assistant Shul, a few others, which we also package up in premium packages, and the result in Q4 was really strong. To give you a flavor, with our quo offering, where we got a lot of new customers on board,

Naya: The result in Q4 was released one to give you a flavor with our CRO offering where we got a lot of net new customers on board.

Speaker: So where exactly are the 8,000 jobs affected by the program located? Thanks a lot for the question, Robin. Look, indeed, we invest. We invest a few billion to fuel SAP's growth. The main investment area is clearly AI. We are already applying AI internally. Development, Delivery, Services, Sales, Finance. The jobs will change. And when you're looking at some of our ratios, where we actually see the highest productivity levels, it's clearly on the go-to-market. It's also in some of the supporting functions, so it will go across SAP. But very important, as you also heard, out of the 8,000, two-thirds, hopefully, we're going to find voluntary measures. So we also invest in rescaling. Some of these people we can definitely also see in future growth functions of SAP. So I really want to emphasize that.

Naya: 60% of those customers decided to also embed AI wide away in the solution of S&P and they pay a upside for that but they see the value and then last but not least we also have a kind of a total offering what does this mean the customer buys a certain package of tokens.

Speaker Change: 60% of those customers decided to also embed AI right away in the solution of SAP. And they pay an upside for that, but they see the value. And then last but not least, we also have a kind of a token offering. What does this mean? The customer buys a certain package of tokens. It's a consumption-based offering. You only pay when you're going to use it. You only pay when you're going to see the value. And that's also a very attractive offering. And you can use those tokens for our HR, for our finance, for our supply chain. So we also give the customers the flexibility they need. And it's all coming back always to also...

Naya: As a consumption based offering you only pay when you're going to use it you only pay when you're going to see the value and that's also a very attractive offering and you can use those tokens and of our each of our finance for our supply chain. So we also give the customers the flexibility they need and it's all coming back always too also.

Christian Klein: You can use those tokens, you know, for our HR, for our finance, for our supply chain. We also give the customers the flexibility they need. It's all coming back always to, you know, also figuring out the right price according to the value for our customers.

Dominic: One is called Sustainability Data Exchange, which helps businesses gain transparency on supplier's CO2 emissions. And then there's Green Token, which enables companies to provide traceability and transparency across the supply chain. I'm also happy to confirm that we have met our 2023 non-financial metric targets, including being carbon neutral in our own operation. In summary, we have achieved all key objectives in 2023.

Naya: Pre going out to wide price according to the value for our customers. Thank.

Speaker Change: Figuring out the right price according to the value for our company.

Monika Schaller: Thank you, Christian. Back to the floor. Christoph Klackmann.

Speaker Change: Thank you, Christian. Back to the floor, Christoph Kerkman.

Thank you Christian and actually a few I am Christopher Kirkman.

Naya: Yeah.

[Analyst 2]: Thank you. AI is not a magic wand that you can wave to gain, to have efficiency gains. Could you specify a bit how you want to use the technology internally in order to make the organization more efficient?

Speaker Change: Thank you.

Christoph Kerkman: Thank you. AI is not a magic wand that you can wave to have efficiency gains. So could you specify a bit how you want to use the technology internally in order to make the organization more efficient?

Speaker Change: It's not a magic wand that you can wave to gain to have efficiency gains. So could you specify a bit how you want to use the technology internally in order to make the organization more efficient.

Christian Klein: And so we are very, very confident that we can run this program as smoothly as we can also for our employees.

Christian Klein: I mean, Christoph, thanks for the question. I mean, when you look into AI, I give you three examples now internal. Development. Can our developers code faster? Absolutely, they can. I would say the technology will more and more mature. We will see huge productivity gains. Today, do we then need to still do some more quality checks? Yes. But that comes with, you know, more maturity, less quality, but the outcome is already great. When you look into our sales. Figure out the right price, figure out the right demo, figure out the right content for this customer is sometimes, you know, very cumbersome. You need time, you know, to really pull together the right business case for our customers.

Speaker Change: I mean, Chris.

Christoph Kerkman: I mean

Speaker Change: Christoph, thanks for the question. I mean, when you look into AI, I give you

Chris: So thanks for the question I mean, when you look into AI. It gives you how Sui example, now internal.

Speaker Change: we example now internally.

Speaker: Thank you, Christian. We got a similar question via our tool from Capital. I'm also asking which job profiles will change. So, Hannah, I hope we have answered that question, but let's stick to the topic of restructuring, Christian. A question from Reuters Breaking News: We are wondering if this is one of those situations where tech companies overhired during the pandemic and are now using the shift toward AI as an opportunity to straighten that out. So we'd appreciate details on what kinds of tech companies they are.

Chris: Development.

Speaker Change: Give a lot more.

Chris: Ken our developers code foster absolutely they can.

Speaker Change: Can our developers code faster? Absolutely they can.

Speaker Change: I would say the technology will more and more mature.

Chris: I would say the technology will more and more mature and.

Speaker Change: We will see huge productivity gains. Today, do we need to still do some more quality checks? Yes, but that comes with more maturity, less quality, but the outcome is already great. When you look into our sales,

We will see huge productivity gains today do we de near need to still do some more quality checks, yes, but that comes with more maturity less quality, but the outcome is already create when you look into our sales.

Dominic: Our strategy works and remains consistent. However, we also have to evolve and continue to adapt to a faster, changing environment. Our outlook illustrates that we are on the right trajectory to achieve our updated 2025 ambition. In 2024, we will focus on staying the course.

Chris: Figure out a wide twice figure out a wide day more figure out the right content for this customer.

Speaker Change: Figure out the right price, figure out the right demo, figure out the right content for this customer.

Speaker Change: It's sometimes, you know, very cumbersome. You need time to really pull together the right business case for our customers. This is now where we already embedded AI to be much smarter in the way how we attract and convince our customers to build on our or to buy our technology.

Chris: Is sometimes you know where we cumbersome you need time to really pull together the wide business case for our customers. This is now where we already embedded AI and to be much smarter in the way, how we attract and convince our customers to build on our two by our technology.

Dominic: Also, delivering on that ambition is a compelling argument to convince our customers to build intelligent, sustainable enterprises based on business AI and to attract and retain the best talent to master the challenges lying ahead. With continued focus and strong execution, we remain confident about SAP's future. Thank you, and we'll now be happy to answer your questions.

Christian Klein: This is now where we already embedded AI and to be much smarter in the way how we attract and convince our customers to build on our or to buy our technology. Then no matter if you are in accounting or commercial deal support, our contracts are today a bit too long. We are working on that. This is not what AI can do for us. But you know, when you're looking, when you're going through hundreds of pages, I mean, this is what AI can do for you and can do certain checks. You need much less time to make sure that we have commercially and accounting-wise, the right offering, the right contract signed. These are only a few examples.

Christian Klein: Yeah, I mean, we definitely didn't overhire. First of all, you have seen the growth we delivered. And when you're growing, you're also going to see in future investments and also, of course, headcount, growth in headcount, in many parts of this company. But, of course, underproportional. And, you know, as we are also sharing with our customers, look at the impact of AI on their business model, on their business processes, and it's not different for SAP and also very important when you look into our hiring.

Speaker Change: And then, no matter if you are in accounting or commercial deal support, our contracts are today a bit too long. We are working on that. This is not what AI can do for us. But, you know, when you're looking, when you're going through hundreds of pages, I mean, this is what AI can do for you and can do certain checks. So you need much less time to make sure that we have commercially and accounting-wise the right offering, the right contract sign. And these are only a few examples. When you are working in HR, we rolled out our tool, and tool will make sure that you don't have to type all the employee details in the system. Tool does this for you. Tool helps on the recruiting side. Tool helps on the retention side. So these scenarios are either already rolled out or will be rolled out in the next coming months.

Chris: And then no matter, if youre, an accounting or commercial deal. So part of our contracts are today too long we are working on that.

Chris: This is not what AI can do fast, but you know when you are looking when youre going through hundreds of pages. I mean this is what AI can do for you and can do certain checks. So you need will have much less time to make sure that we have commercially and accounting wise to wide offering the wide contract time and these are only a few examples where when you are.

Christian Klein: When you are working in HR, we rolled out our Joule, and Joule will make sure that you don't have to type all the employee details in the system. Joule does this for you. Joule helps on the recruiting side. Joule helps on the retention side. These scenarios are either already rolled out or will be rolled out in the next coming months.

Chris: Working in a jar, we rolled out our tool and tool will make sure that you have don't have to tie up all the employee details in our system tool dusters for Ya tool helps on the recording science tool helps on the retention side. So D scenarios are either already rolled out or will be rolled out in the next coming months.

Operator: Thank you, Dominic. With that, we are going to move into the Q&A session. As I pointed out earlier, use the chat tool to send us your questions.

Christian Klein: We are hiring some of the best PhDs from Berkeley, we are hiring some of the best PhDs from HPI, we are bringing in great data scientists, we are bringing in great engineers, we are hiring for UX, we are hiring in Southeast Asia to capture the gross market there. We are doing business in 160 countries.

Monika Schaller: Thank you, Christian. I'll give you a short break. I have one for Dominik.

Speaker Change: Thank you Christian to give you a short break I had one for Dominic good.

Speaker Change: Thank you, Krishna, give you a short break. I have one for Dominic.

Operator: Please also let us know your name and outlet. I would like to start it here in the room. Do we have any questions from the audience? Robin Wille, Deutsche Presse Agentur.

Christian Klein: Good.

Monika Schaller: Dominik, in the financial analyst call this morning, you mentioned that you see growth potential for SAP in the sustainability space. Where exactly do you see this, and why would SAP have higher potential than your competitors?

Speaker Change: Dominic, in the financial analyst call this morning, you mentioned that you see growth potential for SAP in the sustainability space. Where exactly do you see this and why would SAP have higher potential than your competitors?

Speaker Change: Dominic in the financial Analyst call. This morning, you mentioned that you see growth potential for ACP and the sustainability space, where exactly do you see this advice by wood S&P has higher potential than your competitors.

Christian Klein: Yes, good morning. Mr. Klein, one question regarding your restructuring program. You said that you wanted to focus on strategic growth areas such as AI, but in which areas or functions do you specifically want to make savings? And where exactly are the 8,000 jobs affected by the program located?

Dominik Asam: Yeah, thank you for that question. I mean, first of all, we at SAP strongly believe that global warming is the challenge for humankind and that we have an ability to contribute to solving that challenge or helping solve that challenge. I mean, just to give you an order of magnitude, if you think about burning one barrel of oil, you basically emit close to half a ton of CO2. Then if you look at the price of oil and what it costs you to abate CO2, you will figure out that many technologies like electrification of cars, carbon capture and storage, and so forth have price tags which by far exceed EUR 200. Which would mean that these technologies, the market for CO2 abatement, will become bigger than the oil market. The oil market is a gigantic market.

Dominic Awesome: Yeah. Thank you for that question.

Dominic: Thank you for that question. I mean, first of all, we at SAP strongly believe that global warming is the challenge for humankind.

Christian Klein: So we for sure didn't overhire, but that's our job, and this is also what we owe to our employees, actually. To always make sure that we also have, you know, the best workforce in the market. And sometimes, you know, while technology helps us to scale, you also have to make sure that you drive the necessary transformation to secure the future, to really build on this strong foundation what SAP does.

Speaker Change: I mean first of all be at S&P strongly believe that global warming is the challenge for humankind and that we have.

Speaker Change: And the ability to contribute to solving the challenge of helping solve that challenge.

Dominic: An ability to contribute to solving that challenge or helping solve that challenge, I mean just to give you a note of magnitude, if you think about burning one barrel of oil, you basically emit

Just to give you an order of magnitude if you think about.

Speaker Change: Burning one barrel of oil you basically emits close to half a ton of Seo tool and then if you look at the price of oil and what it costs you to abates, you to where you would figure out that many technologies like electrification of cars carbon capture and storage and so forth have price tags, which by far exceed 200 euros.

Christian Klein: Thanks a lot for the question Robin. Look, indeed, we do invest. We invest a few billion to fuel SAP's growth. The main investment area is clearly AI. We are applying AI internally, in development, in delivery, in services, in sales, in finance. Jobs will change. And when you're looking at some of our ratios, where we actually see the highest productivity levels, it's clearly in the go-to-market, but it's also in some of the supporting functions, so it will go across SAP. But very important, as you also heard, out of the 8,000 two-thirds, hopefully, we're going to find voluntary measures, so we also invest in rescaling. Some of these people, we can definitely also see in future growth functions of SAP. So I really want to emphasize that, and so we are very, very confident that we can run this program as smoothly as we can also for our employees. Thank you, Christian.

Dominic: close to half a ton of CO2 and then if you look at the price

Dominic: and what it costs you to abate CO2, you will figure out that many technologies like electrification of cars, carbon capture and storage and so forth have price tags which by far exceed 200 euros.

Christian Klein: So there was for sure no overhiring. And again, we're also going to continue to invest.

Dominic: which would mean that these technologies, the market for CO2 abatement will become bigger than the oil market and the oil market is a gigantic market. Now, we think it's a little bit naive to assume that the world will continue to estimate approximately what type of CO2 volumes are kind of transacted.

Speaker Change: Which would mean that these technologies the market for steel to abatement will become bigger than the oil market in the oil market is a gigantic market now we think it's a little bit naive to assume that the world will continue to estimate approximately what type of zero two volumes are transacted.

Christian Klein: And on the other hand, we will also gain the necessary productivity to also build a successful future for SAP.

Dominik Asam: Now, we think it's a little bit naive to assume that the world will continue to estimate approximately what type of CO2 volumes are kind of transacted. Because it's such a huge market and such a huge value, there's a lot of companies who invest enormously to contribute to that abatement, and they want to see that investment being protected by giving assurance that there's reliable data about that. This is why we are focusing on leveraging our ERP engine to add data about CO2. It's a little bit like value-added tax. You know, when you have value-added tax, it's booked through the supply chain. Why not really book it in a hard way, the same way you book dollars or euros? It's a new currency.

Speaker: Thank you, Christian. I have one more question on restructuring from the online tool, but before I go back to the online tool, any other questions from the audience? Excellent. In your outlook, it is said that you will save approximately 500 million euros from this restructuring. Transformation.

Dominic: because it's such a huge market and such a huge value there's a lot of companies who invest enormously to contribute to that abatement and they want to see that investment being protected by giving assurance that there's reliable data about that and this is why we are focusing on leveraging our ERP engine to add data about co2 it's a little bit like like value-added tax you know when you have value-added tax it's booked through the supply chain

Speaker Change: Because it's such a huge market and such a huge value. There is a lot of companies, we invest enormously to contribute to that abatement and they want to see that investment being protected by giving assurance that there is a reliable data about that and this is why we are focusing on leveraging our ERP engine to add data.

Speaker: So maybe you can explain how it is possible when the total number of employees will be the same at the end of the year.

Speaker: I mean, that's really the net amount of what we do, as Christian has highlighted. On the one hand, we are reducing headcount; on the other hand, we are also investing in IT, i.e. automation already in 2024, which will make our people more productive. So then, in 2025, we start reaping that improved efficiency because in 2024, actually, you don't see any savings yet. First of all, we start the program only in Q2 in terms of really starting to see some progress and departures. Secondly, we will redeploy money here to really make us more productive. I think artificial intelligence, business AI, gives us some unique opportunities to become more efficient. And don't forget, I mean, our customers always very closely watch how we are doing on that front.

Speaker Change: About <unk> two it's a little bit light like value added tax you know when you have a value added tax it's booked through the supply chain.

Dominic: So why not really book it in the hard way, the same way you book dollars or euros? It's a new currency. It will never have the same price because there's good reasons why it's very tough to establish one uniform market price for that. But it's extremely important that we have strong assurance on where our CO2 footprint is. And given the complexity of our supply chains, it's very important to have that network built up. And this is where we have a pole position and think that we can capitalize on that opportunity going forward.

Speaker Change: So why not really book it in the hard way the same way you book.

Operator: We got a similar question via our tool from Kapital. I'm also asking which job profiles will change. So, Hannah, I hope we have answered that question.

Speaker Change: Dollars or euros, it's a new currency it will never have the same price because there's good reasons why it's very tough to establish one uniform market price for that but it's extremely important that we have strong assurance on where our Youtube footprint is and given the complexity of our supply chains. It's very important to have that network build up and this is where we have a pole position.

Dominik Asam: It will never have the same price because there's good reasons why it's very tough to establish one uniform market price for that. It's extremely important that we have strong assurance on where our CO2 footprint is. Given the complexity of our supply chains, it's very important to have that network built up, and this is where we have a pole position and think that we can capitalize on that opportunity going forward.

Christian Klein: But let's stick to the topic of restructuring, Christian. A question from Reuters, Breaking News. We are wondering if this is one of those situations where tech companies overhired during the pandemic and are now using the shift toward AI as an opportunity to straighten that out. So we'd appreciate details on what kinds of jobs.

Speaker Change: And think that we can capitalize on that opportunity going forward.

Monika Schaller: Thank you, Dominik. Before we come back to Walldorf, why don't we go to Spain?

Speaker Change: Thank you Dominic so before we come back to my daughter, why don't they go to Spain.

Speaker Change: Thank you, Dominic. So before we come back to Waldorf, why don't we go to Spain?

Dominik Asam: Mm-hmm.

Monika Schaller: The question is from Pablo Fernández from Silicon España. Can you talk a little bit more on how SAP ensures data privacy and governance to its clients when it comes to use AI and training models?

Speaker Change: And the question is from Pablo Fernandez from Silicon Spain. Can you talk a little bit more on how SAP ensures data privacy and governance to its clients when it comes to use AI and training model?

Speaker Change: And so and the question is from Pablo sur and analyst from Citi can Spain can you talk a little bit more on how S&P ensure state of privacy and governance to its clients when it comes to use AI and training models.

Christian Klein: Yeah, I mean, we definitely didn't overhire. First of all, you have seen the growth we delivered. And when you're growing, you're also going to see in future investments and also, of course, headcount, growth in headcount, in many parts of this company, but, of course, under-proportional. And, you know, as we are also sharing with our customers, look at the impact of AI on their business model, on their business processes, and it's not different to SAP. And also very important when you look into our hiring. We are hiring some of the best PhDs from Berkeley.

Christian Klein: I mean, I can do this in, you know, with an example in Spain. You know, we have many customers in Spain, and of course, they're also reaching out to SAP and say, "Hey, what is your deployment model for AI and where do you store the data? Will it be stored in the European Union or will it be stored in the US?" We can guarantee that it will be stored in the European Union. Who is touching the data? European people, European citizens, or people everywhere in the world. We can give them a guarantee that we also have the European Union citizens touching only the data of the Spanish customer. Second, cloud doesn't mean that the customer data is our data. I mean, it's still the customer data. We are asking for consent. We are not violating any copyrights.

Speaker Change: I mean I can do this in.

Speaker Change: I mean, I can do this.

Pablo Fernandez: with an example in Spain.

Speaker Change: We have an example in Spain.

Speaker Change: You know we have many customers in Spain and of course, they're also reaching out to a S. A P and say hey.

Pablo Fernandez: We have many customers in Spain and of course they're also reaching out to SAP and say, hey, what is your deployment model for AI and where do you store the data?

Speaker Change: What is your.

Speaker Change: Deployment model for AI on where do you start a data will it be stored in the European Union or will it be stored in the U S and we can't guarantee that it will be stored in the European Union, who is touching the data European people European citizens or people everywhere in the world, we can give them a guarantee.

Speaker: If we cannot demonstrate that capability to become more productive ourselves, how should we convince them that we are the right partner for them to make them more productive in their own digital transformation? So it's a net number kind of fueled by the combination of making our resources fit better to what our needs are and then also using some of the savings to boost productivity. Dominic, to add to that one, I have one more question for you from Bloomberg. Is there clarity on a regional breakdown of the restructuring? Will Germany be most affected? We are just fine-tuning these numbers, so bear with us a little bit on that one, but don't expect anything that's kind of wildly different from our footprint we have today, so it would be quite balanced throughout the work. Thank you. So I think here in this room, Herr Freitag. I think you were next, right? Hasselbladner is leaving the company. What impact will that have?

Pablo Fernandez: Will it be stored in the European Union or will it be stored in the US?

Pablo Fernandez: We can guarantee that it will be stored in the European Union with touching the data. European people, European citizens, or people everywhere in the world, we can give them a guarantee that we also have the European Union citizens touching only the data of this Spanish customer.

Speaker Change: That we also have the European Union citizens touching only the data of the Spanish customer.

Christian Klein: We are hiring some of the best PhDs from the HBI. We are bringing in great data scientists. We are bringing in great engineers. We are hiring for UX. We are hiring in Southeast Asia to capture the growth market there. We are doing business in 160 countries.

Pablo Fernandez: And then second.

Speaker Change: And then second.

Speaker Change: Cloud.

Pablo Fernandez: Cloud doesn't mean that the customer data is our data.

Speaker Change: Doesn't mean that the customer data is our data.

Speaker Change: It's still the customer data. So we are asking for content, we're not violating any copyrights. It's for us very important that we also gained the trust and we are asking for constant if we can anonymize. The data. If we came with can train with this data our algorithms.

Speaker Change: Thank you very much.

Christian Klein: It's for us very important that we also gain the trust, and we are asking for consent if we can anonymize the data, if we can train with this data our algorithms. It's another important factor. Then last but not least, when you talk about trustworthy, it's also very important that you look into the algorithms and what kind of impact do they have on a firm or a business in Spain, so that you have no bias in your algorithms. We have even external counsels who are actually working with us to make sure that we're also delivering AI, which is good for the company, and good for our society.

Christian Klein: So we for sure didn't overhire, but what our job, and this is also what we owe to our employees, is to always make sure that we also have, you know, the best workforce in the market. And sometimes, you know, while technology helps us to scale, you also have to make sure that you drive the necessary transformation to secure the future, to really build on this strong foundation that SAP does. So there was for sure no overhiring.

Speaker Change: It's another important factor.

Speaker Change: It's another important factor and then last but not least when you talk about trustworthy. It's also very important that you look into the algorithms and what kind of impact do they have all of our business in Spain. So that you have non bias in your algorithms and we have even external counsels, we're actually working with.

Speaker Change: and then last but not least, when you talk about trustworthiness, it's also very important that you look into the algorithms and what kind of impact do they have on a business in Spain so that you have non-bias in your algorithms and we have even external councils who are actually working with us to make sure that we are also delivering AI which is good, good for the company and good for our society.

Speaker Change: To make sure.

Speaker Change: We're also delivering AI, which is good good for the company and good for our society.

Monika Schaller: Back to the room. Alexander Jungert, Mannheimer Morgen.

So back to their own and Alexandra Yogurt Manhattan Memorial.

Speaker Change: So back to the room.

Speaker: I mean, for you all.

Speaker: This is my first question.

Speaker Change: Yeah.

Speaker: And the second question, what role will M&A play... Yeah, Hasso.

Alexander Jungert: Yes. Now, hi, and thank you for having my two questions. The first one is: How can you combat the growing uncertainty of the employees? The second one: How is your position according to the AfD? Thank you.

Christian Klein: And again, you know, we're also going to continue to invest. And on the other side, we will, of course, gain the necessary productivity to also build a successful future for SAP. Thank you, Christian.

Speaker Change: You have now.

Speaker Change: Yes, now. Hi, and thank you for having my two questions. The first one is how can you combat the growing uncertainty of the employee

Speaker Change: Hi, and thank you for having my two questions first one is how can you combat growing uncertainty off the employees.

Christian Klein: Look, first of all, it was great to see you actually over the weekend.

Speaker Change: And the second one, how is your position according to the eye?

Speaker Change: The second one how is your position according to the RFT.

Christian Klein: I studied the press and the media, and I guess he got the credit.

Christian Klein: Yeah, Alexander, I guess also with regard to concerns employees, I mean, first of all, I feel that the SAP employees, they see that what we did together as a team the last three years, and this turnaround is remarkable. I guess every SAP employee understands that they're working for a winning company, a growing company, which also ensures that they have a safe and secure working place in the future. This is a high asset also for the years to come, and will also, by the way, attract many new talents to join SAP because we are a very attractive employer. Hybrid work, back to office. It's a change. Look, for me, very important also to mention here, and we will have that also for sure in the all-hands this afternoon.

Speaker Change: Q.

Speaker Change: Yes, Alexander I guess thoughts with regard to concerns employees I mean first of all I feel that the C. P. M. Please stay seated.

Speaker Change: Yeah, Alexander, I guess with regard to concerns, employees, I mean, first of all, I feel that the SAP employees, they see that.

Operator: I have one more question on restructuring from the online tool, but before I go back to the online tool, any other questions from the audience? Excellent, Herr Groß-Reinmecker.

Christian Klein: You know, about all of his achievements for this company. I got so many nice mails also from our employees who didn't forget or won't forget what Hasso did for this company.

Speaker Change: What we did together as a team the last three years, and this turnaround is remarkable.

Speaker Change: What we did together as a team the last three years and this turnaround is remarkable.

Christian Klein: And personally, I have to say, I mean, to manage such a turnaround. Especially three years ago, when we actually had a different share price reaction. It also means you need a lot of backing by Hasso and the supervisory board, and I'm extremely thankful that I always felt, With Puneet now coming on board, I mean, Puneet knows us. I mean, he was the CEO of a large partner of SAP. He knows our business well. The transition is working, and he's coming on board. And I'm also very confident that we're going to also manage that transition in the best interests of SAP. And with regard to M&A. It's a good situation to be in where you can look into the market, and of course, we are looking and seeing where there are fields in our portfolio where customers are actually asking us to get, you know, acceleration of certain roadmaps, where customers are asking us, hey, I don't want to use a third-party solution because it's mission-critical data and I don't want to replicate this data from system A, SAP, to non So you saw Lena X. You saw Signavia.

Dominic: In your outlook, it is said that you... approximately €500 million savings from this restructuring and transformation. So maybe you can explain how that is possible when the total number of employees will be the same at the end of the year. Yeah, I mean, that's really the net amount of what we do, as Christian has highlighted. On the one hand, we are reducing headcount. On the other hand, we are also investing in IT, i.e., automation, already in 2024, which will make our people more productive. So then, in 2025, we start reaping that improved efficiency because in 2024, actually, you don't see any savings yet.

Speaker Change: And I guess every SAP employee understands that they are working for a winning company, a growing company, which also ensures that they have a safe and secure working place in the future. This is a high asset also for the years to come and will also, by the way, attract many new talents to join SAP.

Speaker Change: I guess every M. S N P M blue he understands that they are working for a winning company a growing company, which also ensures that they have a safe and secure working plays in the future. This is a high acid answer for the years to come and will also by the way attract many new talents to China's AP.

Speaker Change: because we are a very attractive employer.

Speaker Change: Because we earn a very attractive employer.

Speaker Change: Hybrid work vector.

Speaker Change: Hybrid Work,

Speaker Change: Back to office.

Speaker Change: It's a change and look for me very important also to mention here and we will have that also for sure in the all hands this afternoon.

Speaker Change: And it's a change and look.

Speaker Change: For me very important also to mention Ian we will have that auto for sure and the Orleans This afternoon.

Christian Klein: It's not about getting the people five out of five days back to the office. It's not about controlling people. We, I'm actually a big believer. Look at me. I built my career here at SAP by having great mentors, by having, sitting next to people who showed me how to run the best analytics, how our products are getting applied. I was sitting together, you know, with great architects to really better understand on how we're gonna build our products. Would this have been possible in the home office? No. We need to find the right balance. I don't want to go back to the time where I actually had to ask my manager for every hour I had to go to a doctor, or my kids were ill, or not being able to school or to kindergarten. That's not about it.

Speaker Change: It's not about getting the people five out of five days back to the office. It's not about controlling people.

Speaker Change: It's not about getting the people five out of five days back to the office, it's not about controlling people.

Speaker Change: But we, I'm actually a big believer, look at me.

Speaker Change: But we I'm actually a big believer look at me.

Speaker Change: I built my career here at SAP by having great mentors, by sitting next to people who showed me how to run the best analytics.

Speaker Change: I built my career here in D. C. P by having create Mentos Miami sitting next to people who showed me how to run the best analytics, how to actually how our products are getting a blind applied our sitting together with great architects to really better understand on how we got to build our products.

Dominic: First of all, we start the program only in Q2 in terms of really starting to see some progress and departures. Secondly, we will redeploy money here to really make us more productive. I think artificial intelligence, business AI, gives us some unique opportunities to become more efficient. And don't forget, I mean, our customers always very closely watch how we are doing on that front. If we cannot demonstrate that capability to become more productive ourselves, how should we convince them that we are the right partner for them to make them more productive in their own digital transformation?

Speaker Change: How to actually, how our products are getting applied. And we're sitting together with great architects to really better understand on how we're going to build our products.

Speaker Change: Would this have been possible in the home office? No. So we need to find the right balance. And I don't want to go back to the time where I actually had to ask my manager for every hour I had to go to a doctor or my kids were ill or not being able to school or to begin. That's not about it. People should stay home and find the right balance together with their manager. I really want to emphasize that. But what we cannot allow, because it's part of our culture as well, that we only work from the home office because then we are losing our culture and we have to be a team. And teamwork also comes with.

Speaker Change: This has been possible in the home office now so we need to find the right balance and I don't want to go back to the time, where I actually had to ask my manager for every hour to go to a doctor or my kids were ill or not being able to school order to Gander, that's not about it people should stay home and find the right balance together with their manager really want to emphasize that.

Christian Klein: People should stay home and find the right balance together with their manager. I really want to emphasize that. What we cannot allow, because it's part of our culture as well, is that we only work from the home office because then we are losing our culture and we have to be a team. Teamwork also comes with, to a certain extent, also being in the office. The other piece is around performance culture. We are competing in an industry with a lot of competitors around the world. You know, for me, high performance culture, what is this about? It's about that you are sitting together with your manager, that you get coaching, that you know what you have done great, but also that you know where you have upside, where you can do better.

Speaker Change: But what we cannot allow because it's part of our culture as well that we only work from the home office. Because then we are losing our culture and we have to be a team and teamwork also comes with.

Dominic: So it's a net number fueled by the combination of making our resources fit better to what our needs are and then also using some of the savings to boost productivity. Dominic, to add to that one, I have one other question for you from Bloomberg. Is there clarity on a regional breakdown of the restructuring? Will Germany be most affected?

Speaker Change: to a certain extent also being in the office.

Speaker Change: To a certain intend also being in the office.

Speaker Change: and the other pieces around

Speaker Change: And the other pieces the wound.

Speaker Change: Performance culture.

Speaker Change: Performance Culture.

Speaker Change: We are.

Speaker Change: We are...

Speaker Change: competing in an industry with a lot of competitors around the world and you know for me a performing culture what is this about it's about that you are sitting together with your manager

Speaker Change: Competing in an industry.

Speaker Change: With a lot of competitors around the world and.

Christian Klein: Dana X is rather new but already had a great Q4 and we see positive momentum, and Singario was one of the best acquisitions we did. And this really remains the strategy that we are only looking at what is very complementary to our core. We are, of course, listening to our customers, and I would not rule it out, but again, there is no need to buy now, which is a good position to be in. Christian, at the moment, I don't have any other questions on restructuring.

For me.

Speaker Change: Performing culture, what is this about its about that you are sitting together with your manager that Youll get coaching that you know what is what you have done Kuwait, but also that you know where you have upside where you can do better if my people only telling me how good I am it doesn't help I also want to see in our work and I am pools.

Speaker Change: That you get coaching, that you know what you have done great.

Speaker Change: But also that you know where you have upside, where you can do better. If my people only tell me how good I am, it doesn't help. I also want to see where can I improve. Everyone can improve. Everyone can learn every day. And this is something what we lost a few years ago, which I want to reestablish. And it's not about moving people out of the company. This is about helping the people, coaching the people to get better every day.

Christian Klein: If my people only tell me how good I am, it doesn't help. I also want to see, you know, where can I improve? Everyone can improve. Everyone can learn every day. This is something what we lost a few years ago, which I want to reestablish. It's not about moving people out of the company. This is about helping the people, coaching the people to get better every day. What I also want to make sure is that if you are a high performer in SAP, that you're also going to see that in your compensation. Because otherwise, why would you set targets and bonus plans if there is no relation to your performance? This is true in business. This is true in sports. This is true in every part of our life.

Speaker Change: Everyone can improve everyone can learn every day and this is something what we lost a few years ago, which are one of the established and this is not about moving people out of the company. This is about helping the people coaching the people to get better every day.

Christian Klein: Hasselbladner is leaving the company. What impact does this mean for you and your strategy? This is my first question. And the second question: what role will M&A play? Yeah, Hasso. Look, first of all, it was great to see him over the weekend. I studied the press, and the media, and I guess he got the credit.

Speaker Change: And what I also want to make sure is that if you are a high performer in SAP, that you're also going to see that in your compensation, because otherwise, why would you set targets and bonus plans if there is no relation to your performance?

And what I also want to make sure is that if you are a high performer in S. E. P that you're also going to see that in the compensation because otherwise why would you set targets and bonus plans. If there is no relation to your performance.

Speaker: Why don't we move to the topic of AI? I have two AI questions for you. Is SAP planning any further investments in AI companies following up on our investments in Aleph Alpha? And are we considering investing in Mysterio?

Christian Klein: You know, about all of his achievements for this company. I got so many nice mails also from our employees who didn't forget, who don't forget what Hustle did for this company. Personally, I have to say, I mean, to manage such a turnaround, especially three years ago when we actually had a different share price reaction. It also means you need a lot of backing by Hasso and the Supervisory Board, and I'm extremely thankful that I always felt that way. With Puneet now coming on board, I mean, Puneet knows us.

Speaker Change: This is true in business. This is true in sports. This is true in in every part of our life.

Speaker Change: This is true in business, this is true in sports, this is true in every part of our life.

Christian Klein: This is something what I really want to have also as part of SAP. This is the changes what we are doing. I feel it's really also to the benefit of our employees. It's to the benefit of SAP.

Speaker Change: And this is something what I really want to have also as part of S&P and this is the changes what we are doing.

Speaker Change: and this is something what I really want to have also as part of SAP and this is the changes what we are doing and I feel it's really also to the benefit of our employees, it's to the benefit of SAP.

Christian Klein: I mean, you heard our announcement this morning about the partnership with NVIDIA, which we're going to use, and we're going to integrate our two AI platforms, the TGX of NVIDIA with SAP, as you know, we can definitely also ensure that we can deliver together more trustworthy AI, a very important topic, especially in the business world.

Speaker Change: And I feel it's really also to the benefit of our employees, it's to the benefit of Asap.

Monika Schaller: Christian, let's continue with the topic. It's slightly different, but a similar one way or the other. From Michael from WirtschaftsWoche. I read both out to you, and I think you can cover with one answer. The European Works Council has written an open letter to the SAP board, which massively criticizes the back to office initiative. SAP employees would not focus their priorities on the first quarter's goal, but would search for a stable work elsewhere instead. What do you reply to such allegations? Similar. Same question, again from WirtschaftsWoche. The back to office initiative has really caused some internal stir among SAP employees. Don't you fear to scare off talent and harm our brand?

Speaker Change: Kristian, let's continue with the topic, it's slightly different but a similar one way or the other and from Nike from that shift.

Speaker Change: Christian, let's continue with the topic. It's slightly different, but similar one way or the other. From Michael from Wirtschaftswoche, I read both out to you, and I think you can cover with one answer. The European Workers' Council has written an open letter to the SAP board, which massively criticizes the back-to-office initiative. SAP employees would not focus their priorities on the first quarter's goal, but would search for a stable work elsewhere instead. What do you reply to such allegations? And similar, similar, similar, same question again from Wirtschaftswoche. The back-to-office initiative has really caused some internal steer among SAP employees. Don't you fear to scare off talent and harm our brand?

Speaker Change: And I read those out to you anything you can call the funnel into the European Workers' Council. This week in an open letter to the S&P port, which massively criticizes the back office initiatives S&P employees would not focused our priorities on the first quarter School bus for a search for Atwood search for a stable book elsewhere instead, what do your reply.

Christian Klein: I mean, he was the CEO of a large partner of SAP. He knows our business, transition is working and he's coming on board and I and I'm very also very confident that we're going to also manage that transition in the best interest of SAP and with regard to M&A, It's a good situation to be in where you can look into the market and, of course, we are looking and see, you know, where are fields in our portfolio where customers are actually asking us to get, you know, acceleration, you know, certain roadmaps where customers are asking us, hey, I don't want to use actually a third-party solution because it's mission-critical data and I don't want to replicate this data from system A, SAP, to non-SAP. So you saw Lina X, you saw SignalVue.

Speaker Change: Two such allegations and similar similar similar same question again from that shift.

Speaker Change: <unk> two office initiative has really caused some internals T. Among a plane. It's a P. M. Please don't you fear to scare of talent and Tom our friend.

Christian Klein: And you're going to probably hear a few more announcements, but for us, it's also very important, as I mentioned, to also work together with top universities around the world on research, because what we can deliver organically is super strong, we have a treasure, that's our data, and now we need to make sure that our digital assistant is the smartest in the industry, who can talk various languages, can process data across the company, and with that solve some of the hardest challenges of our customers.

Christian Klein: I mean, first, when we talk about talent, when I see who is now joining right now SAP, as I said, we get top people, top data scientists all over the world. Our, you know, attrition and people leaving SAP is, I guess, on an all-time low, which we don't take for granted, but it's a fact. We are a very good employer, and we are delivering results. We are securing the future of this company. With regard to the back to office, as I just mentioned, I'm a big believer of a hybrid workspace, and we will also talk about that in the afternoon. I have two kids, and they are sometimes getting ill. When you have a kid in a kindergarten, they get all kinds of colds, or especially over the winter. Someone has to stay at home.

Speaker Change: I mean first when we talk about talent.

Christian Klein: I mean, first, when we talk about talent,

Speaker Change: When I see who is now joining widen our SVP as I said, we get top people top data scientists all over the world.

Christian Klein: When I see who is now joining White Now SAP, as I said, we get top people, top data scientists.

Christian Klein: All over the world.

Speaker Change: Our you know their tuition and people, leaving as it appears on I guess on an all time low, which we don't take for granted.

Christian Klein: Our, you know, attrition and people leaving SAP is, I guess, on an all-time low, which we don't take for granted.

Christian Klein: but it's a fact.

Speaker Change: But its effect.

Christian Klein: So we are a very good employer and we are delivering results. We are securing the future of this company.

Speaker Change: So we are aware is good employer and we are delivering results. We are securing the future of this company.

Speaker Change: And with regard to the back to office as I just mentioned.

Christian Klein: and with regard to the back to office, as I just mentioned.

Speaker: And we are in agreement. We're on a good track for that. There's no shortage of partners asking us, you know, to further co-innovate, and also our services partners, be it Accenture, Deloitte, PwC, EY, could go on and on and on.

Speaker Change: Yeah.

Speaker Change: I'm, a big believer of a hybrid workspace and we will also talk about that in the afternoon.

Christian Klein: I'm a big believer of a hybrid workspace and we will also talk about that in the afternoon.

Christian Klein: The NIAX is rather new, but it already had a great Q4, and we see positive momentum, and Singario was one of the best acquisitions we did. And this really remains the strategy, that we are only looking for what is very complementary to our core. We are, of course, listening to our customers, and I would not rule it out, but again, there is no need to buy revenue now, which is a good position to be in. So Christian, at the moment, I don't have any other questions on restructuring. Why don't we move to the topic of AI? I have two questions for you.

Speaker Change: I have two kids and they are sometimes getting into when you have a kid in a kindergarten they get all kinds of calls, especially over the window and then youre someone has to stay at home and I don't want to lose the people who have to stay at home or you have wherewith, sometimes where we personal reasons why you have to work from home and we are not saying that this is not possible.

Christian Klein: I have two kids, and they are sometimes getting ill. When you have a kid in a kindergarten, they get all kinds of colds, especially over the winter, and then someone has to stay at home, and I don't want to lose the people who have to stay at home. Or you have sometimes very personal reasons why you have to work from home. And we are not saying that this is not possible. Absolutely it's possible. But what I cannot allow to happen as a CEO, I really want to mention that, that I have empty offices, where we are onboarding this year over 15,000 people. Just to mention that. We stay flat, but we also, of course, have some kind of attrition, and we're getting new people on board. And we have internal transfers.

Christian Klein: I don't want to lose the people who have to stay at home. Or you have very, sometimes very personal reasons why you have to work from home. We are not saying that this is not possible. Absolutely, it's possible. What I cannot allow to happen as a CEO, I really want to mention that I have empty offices where we are onboarding this year over 15,000 people. Just to mention that we stay flat. We also, of course, have some kind of attrition and we're getting new people on board. We have internal transfers. How can this ever happen when you are new to SAP or in a new job inside SAP because you decided to grow your career and there's no one in the office?

Christian Klein: I mean, they are actually reaching out, and they are building up SAP AI practices, which is always a good sign.

Speaker: When they're investing, you know, there's something going on in the market; it's a good early indicator. And so also, our services partners are ramping up more and more now to really move in with SAP into the field of business AI.

Speaker Change: Faludi, it's possible, but what I cannot allow to have massive C. O I really want to mention that that I have empty offices, where we are on boarding this year over 15000 people just to mention that we stay flat, but we also of course have some kind of attrition and we are getting new people on board and we have internal trends.

Christian Klein: So yes, further partnerships but also a strong focus on organic innovation.

Speaker: Before we go back to the room, Bo from IDC, what are your thoughts on what elements of AI to include in existing license subscriptions and which ones do you charge extra for? Some SAP competitors are claiming not to charge extra for AI. Naya. Okay, so let's go.

Christian Klein: Is SAP planning any further investments in AI companies following up on our investments in ALF-Alpha? And are we considering investing in... I mean, you heard our announcement this morning about the partnership with NVIDIA, which we're going to use, and we're going to integrate our two AI platforms, the TGX of NVIDIA with SAP. We can definitely also ensure that we can deliver together more trustworthy AI, a very important topic, especially in the business world. And you're probably going to hear a few more announcements.

Speaker Change: Fourth.

Christian Klein: How can this ever happen when you are new to SAP or on a new job inside SAP because you decided to grow your career and there's no one in the office? I'm not a big believer that on a video conference platform you can understand our culture, you can get educated, you can get enabled to do your job best. And this is something where we just put up some guidance, but again, it's not about controlling people, it's about our belief, what is best actually for our people, and I'm sure we will find good solutions also to enable and foster a culture of hybrid work for sure.

Speaker Change: How can this ever happen when you are new to us a pea on the new chop inside as a pea because you decided to quo year career.

Christian Klein: I'm not a big believer that on a video conference platform you can understand our culture, you can get educated, you can get enabled to do your job best. This is something where we just, you know, put up some guidance. Again, it's not about controlling people. It's about our belief, what is best actually for our people. I'm sure we will find good solutions also to enable and foster a culture of hybrid work for sure.

Speaker Change: And there's no one in the office.

Speaker Change: I am not a big believer that on a videoconference platform you can understand our culture. You can get educated you can get enabled to do your job past and this is something where we just put up some guidance, but again, it's not about controlling people. It's about our believe what is bass actually for our people and I'm sure.

Christian Klein: I mean, first of all, we have two commercial offerings. And before I start with the commercial offerings, I really want to emphasize that it's very important to sit there with customers, and this is what Philip and Walter and the team are doing, looking at our use cases and measuring outcomes. What do you do today and how much more automated is this? Or when you do sales forecasting or inventory planning, what do you do today and how much smarter can you do it in the future? And what are the outcomes? Because if there's no outcome, there's no business, there's no success, and on the commercial side, we are embedding AI also in our standard offerings. Yes, there are machine learning scenarios.

Speaker Change: Sure we will find good solutions also to enable and foster a culture of hybrid work for sure.

Monika Schaller: Thank you, Christian. Let's move to France. Philippe from TechTarget France. Many SAP user groups seem to fear that your innovation, AI Sustainable Cockpit, will only be available for the RISE with SAP customers. What is your position on innovations? Will your cloud customer outside RISE also benefit from those new disruptive-

Thank you Christian and let's move to France, Felipe from Tech and target, France. Many S&P user groups seem to fear that your innovation AI sustainable cockpit will only be available for the rice with ACP customers. What is your position on innovations will your cloud customer outage right will also benefit from those new to <unk>.

Speaker Change: Thank you, Christian. Let's move to France. Philippe from TechTarget France. Many SAP user groups seem to fear that your innovation AI sustainable cockpit will only be available for the RISE with SAP customers. What is your position on innovations? Will your cloud customer outside RISE also benefit from those new disruptive features?

Christian Klein: But for us, it's also very important, as I mentioned, to also work together with top universities around the world on research, because what we can deliver organically is super strong. We have a treasure, that's our data. And now we need to make sure that our digital assistant is the smartest in the industry, who can talk various languages, process data across the company, and with that, solve some of the hardest challenges of our customers. And we are on a good track for that.

Christian Klein: Yes. I mean, first, I really want to emphasize that we are not leaving one customer behind. If you look at our Q4 results, you have seen we still have a pretty decent software business. We are not stopping here, you know, or allowing our customers to not further also invest into their existing SAP on-premise landscape. We gave a commitment to also extend the maintenance for until 2040. We are not going to extend the maintenance for the older releases because otherwise SAP is losing the speed of innovation, what we need, against all the competitors, who by the way, when you wanna buy a piece of on-premise software from one of our competitors, I would say good luck. It's not possible. Second, why cloud and why certain innovations only in the cloud?

Speaker Change: Yes.

Speaker Change: I mean

Felipe: I mean.

Felipe: First I really want to emphasize that.

Philippe: First, I really want to emphasize

Felipe: That we are not leaving one customer behind and we if you look at our Q4 result.

Philippe: That we are not leaving one customer behind. And if you look at our Q4 results, you have seen we still have a pretty decent software business.

Felipe: You have seen we still have a pretty decent software business.

Philippe: So we are not stopping here, you know, or allowing our customers to not further also invest into the existing SAP on-premise lens.

Christian Klein: There are other scenarios which we are embedding in our standard offerings. But, of course, there are also certain high-value use cases, such as our digital assistant Shul, and a few others, which we also package up in premium packages, and the result in Q4 was really strong. To give you a flavor, with our quo offering, where we got a lot of new customers on board, 60% of those customers decided to also embed AI right away in the SAP solution. And they pay an upfront cost for that, but they see the value. And last but not least, we also have a kind of token offering. What does this mean? The customer buys a certain package of tokens.

Felipe: So we are not stopping here, you know or allowing our customers to not further also invest into their existing S&P on premise landscape and we gave her commitment to also extend the maintenance or the maintenance until 2040, we are not going to extend the maintenance for the older leases because otherwise as a.

Christian Klein: There is no shortage of partners asking us to further co-innovate. And also, our services partners, be it Accenture, Deloitte, PWC, EY, could go on and on and on. I mean, they are actually reaching out, and they are building up SAP AI practices, which is always a good sign. When they're investing, you know, there's something going on in the market. It's a good early indicator.

Philippe: And we gave a commitment to also extend the maintenance or the maintenance until 2040. We are not going to extend the maintenance for the older releases.

Philippe: Because otherwise SAP is losing the speed of innovation, what we need, against all the competitors who, by the way, when you want to buy a piece of on-premise software and one of our competitors, I would say good luck.

Felipe: P is losing the speed of innovation, what we need against all the competitors, who by the way when you want to buy a piece of on premise software at one of our competitors I would say good luck its not possible.

Philippe: Not possible.

Philippe: And then second, why cloud and why certain innovations only in the cloud? I mean, when you're sitting on a 10-year-old on-premise release, you're anyway not seeing any kind of innovation because all the code what we are producing is, of course, not available in a 10-year-old on-premise release.

Felipe: And then second.

Christian Klein: And so also our services partners are ramping up more and more now to really move in with SAP into the field of business AI. So yes, further partnerships but also a strong focus on organic innovation. We have a second one for you before we go back to the room from Bo from IDC. What are your thoughts on what elements of AI should be included in existing license subscriptions? And which ones do you charge extra for?

Felipe: Why cloud and why suddenly innovations only in the cloud.

Christian Klein: I mean, when you're sitting on a 10-year-old on-premise release, you anyway not seeing any kind of innovation because all the code, what we are producing is of course not available in a 10-year-old on-premise release. When we are talking about having content from thousands of SAP customers and to really train algorithms to infuse AI, I mean, this is cloud. This is not on-prem. It's just a fact. Also on the Green Ledger, on sustainability, and further innovations. The Green Ledger, what also Dominik Asam mentioned is, we also want to give transparency around Scope 2 and Scope 3. We not only connecting supply chains, we are also measuring ESG. We are actually aggregating data across supply chains, which is possible in the cloud.

Felipe: When youre sitting on a 10 year old on premise Lilly's you anyway, not seeing any kind of innovation because all the code. What we're producing is of course not available in the 10 year old on premise release.

Christian Klein: It's a consumption-based offering. You only pay for it when you're going to use it.

And when we are talking about having content from thousands of SCP customers and to really train algorithms to infuse AI I.

Philippe: and when we are talking about having content from thousands of SAP customers and to really train algorithms to infuse AI

Christian Klein: You only pay when you see the value, and that's also a very attractive offering.

Speaker: And you can use those tokens for our HR, for our finance, for our supply chain. So we also give the customers the flexibility they need. And it's all coming back to also... Figuring out the right price according to the value of our company.

Felipe: I mean this is cloud this is not on Prem.

Philippe: This is clout.

Philippe: It's not on-prem. It's just a fact. And also on the Green Ledger on sustainability and further innovations. The Green Ledger, what also Dominic mentioned, is we also want to give transparency around scope 2 and scope 3. So we're not only connecting supply chains, we're also measuring ESG. We're actually aggregating data across supply chains, which is possible in the cloud.

Felipe: Perfect.

Felipe: Also on the Queen latch on sustainability and further innovations the green lecture, but also Dominic mentioned is we also want to give transparency around scope two and scope suite. So we not only connecting supply chains. We also measuring ESG, we actually aggregating data across supply chain, which is possible.

Christian Klein: Some SAP competitors are claiming not to charge extra for AI. Naya. Okay, so let's go. First of all, we have two commercial offerings. And before I start with the commercial offering, I really want to emphasize that it's very important to sit there with customers, and this is what Philip and Walter and the team are doing, looking at our use cases and measuring outcomes. What do you do today?

Christian Klein: Thank you, Christian.

Speaker: Back to the floor, Christoph Kerkman.

Christian Klein: Please also understand that while SAP is committed to take every customer with us, we are also of course innovating much faster in the cloud, which by the way, all our competitors already do. We do our very, very best with RISE and with GROW to take the customers with us. Again, not only with us to lift and shift and have certainly a system in the cloud with no impact on the business. No, no. We want to also help them on their business transformation.

Felipe: All in the cloud.

Philippe: So I please also understand that while SAP is committed to take every customer with us,

Speaker: Thank you. AI is not a magic wand that you can wave to gain efficiency gains. So could you specify a bit how you want to use the technology internally in order to make the organization more efficient?

So I. Please also understand that while S&P has committed to take every customer with US. We are also of course innovating much faster in the cloud, which by the way all our competitors already do.

Philippe: We are also of course innovating much faster in the cloud, which by the way all our competitors already do.

Philippe: and we do our very very best with Rise and with Quo to take the customers with us and again not only with us to lift and shift and have suddenly a system in the cloud with no impact on the business, no no no, we want to also help them on their business transformation.

Felipe: And we do our very very best with why isn't was quote to take the customers with us and again, not only with us to lift and shift and half suddenly a system in the cloud with no impact on the business No no no we want all to help them on their business transformation.

Christian Klein: I mean, Christoph, thanks for the question.

Speaker: I mean, when you look into AI, I give you an example now internally. There are a lot more.

Christian Klein: And how much more automated is this? Or when you do sales forecasting or inventory planning, what do you do today? And how much smarter can you do it in the future? And what are the outcomes?

Christian Klein: Can our developers code faster? Absolutely they can. I would say the technology will become more and more mature.

Monika Schaller: Before we go to Marco, as promised, I have one other one for Dominik. Via the online from Klaus. This is a bit of a longer one. SAP is one of many large investors in OpenAI competitor, Anthropic. How do you secure the value of this investment for your company in regard with the other major investors? Please talk a little bit in short about SAP's value from partnerships with Google Cloud, IBM watsonx, Microsoft, short please. Like this is the only way to lift the value of SAP customers' data in AI.

Speaker Change: Before we go to Markwest promised I have one other one for Dominic and online from Klaus This is Ed.

Speaker Change: So, before we go to Marco, as promised, I have one other one for Dominic. Birthday online from Klaus. This is a bit of a longer one. So, SAP is one of many large investors in OpenAI competitor Entropic. How do you secure the value of this investment for your company in regard with the other major investors? Please talk a little bit in short about SAP's value from partnerships with Google Cloud, IBM Watson, Microsoft, short please. Like this is the only way to lift the value of SAP customers' data in AI.

Christian Klein: We will see huge productivity gains. Today, do we still need to do some more quality checks? Yes, but that comes with more maturity, less quality, but the outcome is already great. When you look at our sales, figure out the right price, figure out the right demo, figure out the right content for this customer.

Christian Klein: Because if there's no outcome, there's no business, there's no success. And on the commercial side, we are embedding AI also in our standard offerings. Yes, there are machine learning scenarios.

Ed: Long island, so S&P's one of many large investors in open AI competitor Entropic, how do you secure the value of this investment for your company in regard with the other major investors. Please talk a little bit in short about sap's venue from partnerships with Google Cloud IBM Watson Microsoft.

Christian Klein: There are other scenarios which we are embedding in our standard offerings. But, of course, there are also certain high-value use cases, such as our digital assistant, Jules, and a few others, which we also package up in premium packages, and the result in Q4 was really strong. To give you a flavor, with our Quo offering, where we got a lot of new customers on board, 60% of those customers decided to also embed AI right away in the SAP solution. And they pay an upside for that, but they see the value. And then, last but not least, we also have a kind of token offering. What does this mean?

Speaker: It's sometimes, you know, very cumbersome. You need time to really pull together the right business case for our customers.

Ed: Got it and like this is the only way to lift the value of ACP customers data and AI.

Dominik Asam: Okay. Before I answer that, I cannot resist the temptation to answer a question about RFD you asked. I know it's,

Speaker: This is now where we have already embedded AI to be much smarter in the way we attract and convince our customers to build on our platform or to buy our technology. And then, no matter if you are in accounting or commercial deal support, our contracts are today a bit too long. We are working on that. This is not what AI can do for us. But, you know, when you're looking, when you're going through hundreds of pages, I mean, this is what AI can do for you and can do certain checks. So you need much less time to make sure that we have, commercially and accounting-wise, the right offering, the right contract sign. And these are only a few examples. When you are working in HR, we rolled out our tool, and it will make sure that you don't have to type all the employee details into the system. Tool does this for you. It helps on the recruiting side. Tool helps on the retention side. So these scenarios are either already rolled out or will be rolled out in the next coming months.

Ed: So before I answer that I cannot resist the temptation to answer that question.

Speaker Change: So before I answer that, I cannot resist the temptation to answer a question about RFD you asked. Yeah, we have it here that we...

Ed: Note RFT you afterwards.

Monika Schaller: Yeah. We have it here that we

Dominik Asam: Let me try the following one. I've learned in my history lessons that it's always extremely dangerous when some people think they have extremely easy answers to very complicated questions. Now, coming to the investment about artificial intelligence investments, we have different paths how we explore these partnership and leverage these partnerships. We are really playing with a couple of dozens of foundation models to figure out which of those are really the best suited to support use cases we infuse in our portfolio. I think that's the strength we can offer. Using the BTP, we make them accessible for the developers of these applications in a very seamless way. We are not nervous about other people investing alongside or taking much larger stakes in that.

Speaker Change: Yeah that would be.

Speaker Change: And let me try the following one.

Speaker Change: Let me try the following one. I've learned in my history lessons that it's always extremely dangerous when some people think they have extremely easy answers to very complicated questions.

Speaker Change: I've learned in my history lessons that it's always extremely dangerous when some people think they are extremely easy answers to very complicated questions.

Speaker Change: Now coming to the investment about.

Speaker Change: Now, coming to the investment about...

Speaker Change: and artificial intelligence investors.

Speaker Change: Artificial intelligence investments.

Christian Klein: The customer buys a certain package of tokens. It's a consumption-based offering. You only pay when you're gonna use it. You only pay when you're going to see the value.

Speaker Change: Behafton,

Speaker Change: We have.

Speaker Change: Different paths, how we explore these partnerships and leverage these partnerships. We are really playing with a couple of dozens of foundation models to figure out which of those are really the best suited to support use cases we infuse in our portfolio. And I think that's the strength we can offer. Using the BTP, we make them accessible for the developers of these applications in a very seamless way. So we're not nervous about other people investing alongside or taking much larger stakes in that. We just want to make sure that we're not missing the train and we have a good overview on all the models out there to identify the best value for money, actually, because it's sometimes amazing how different the pricing is for these models so we can not only deliver the best effectiveness on the use case, but also the lowest cost for them.

Speaker Change: Different path, how we explore these partnership in these partnerships. We are really playing with a couple of dozen of foundation models to figure out which of those are really the best suited to support use cases being fuels in our portfolio.

Christian Klein: And that's also a very attractive offering. And you can use those tokens for our HR, for our finance, for our supply chain. So we also give the customers the flexibility they need. And it's all coming back to also figuring out the right price according to the value for our customers. Thank you, Christian. Back to the floor, yeah, Christopher Kerkman.

Speaker Change: And I think that's the strengths we can offer them using.

Speaker Change: Using the PTP, we make them accessible for the developers of these applications in a very seamless way so.

Speaker Change: We are not nervous about other people investing alongside or taking much larger stakes in that we just want to make sure that we're not missing the train and with a good overview on all the models out there to identify the best the best value for money actually because it's.

Dominik Asam: We just want to make sure that we are not missing the train, and we have a good overview on all the models out there to identify the best value for money actually, because it's sometimes amazing how different the pricing is for these models. We can not only deliver the best effectiveness on the use case, but also the lowest cost for that.

Christian Klein: Thank you. AI is not a magic wand that you can wave to gain efficiency gains. So could you specify a bit how you want to use the technology internally in order to make the organization more efficient? Um, I mean, Christoph, thanks for the question. I mean, when you look into AI, I give you an example. We exampled, now internal. Developed. Can our developers code faster? Absolutely they can.

Speaker Change: It's sometimes amazing how different the pricing is for these models. So we can not only deliver the best effectiveness on the use case, but also the lowest cost product.

Thank you, Krishna. I'll give you a short break.

Monika Schaller: Thank you.

Christian Klein: Yeah, maybe one topic on that one. I mean, when you look at watsonx, when you look at Microsoft and their Copilot, of course we are focusing heavily on our organic innovation. But you can extract even more value if you're using tool for HR, and suddenly you can also have bundling our Copilots together with Microsoft, and you can also extract data from Excel or from Word or from PowerPoint. I mean, why wouldn't we do that? It just makes our Copilot and our AI even more compelling. With regard to the question around the R&D, I said it also in Davos. When you walk around here in the campus, you're gonna find a lot of people from India, from all over Asia. You find people from the United States, from Latin America. I just saw a young talent there, down there from Brazil.

Speaker Change: Thank you on the... Yeah, maybe one topic on that one. I mean, when you look at Watson, when you look at Microsoft and their co-pilot,

Speaker Change: Thank you Andy Yeah, maybe one topic on that one I mean, when you look at Watson when you look at Microsoft and their co pilot.

Speaker: I have one for Dominic.

Dominic: Dominic, in the financial analyst call this morning, you mentioned that you see growth potential for SAP in the sustainability space.

Speaker Change: Of course we are focusing heavily on our organic innovation, but you can extract even more value if you're using Joule for HR and suddenly you can also have binding our co-pilots together with Microsoft and you can also extract data from an Excel or from Word or from PowerPoint.

Speaker Change: Of course, we are focusing heavily on our organic innovation, but you can expect even more well you if youre using tool for HR and suddenly you can also have binding our copilots together with Microsoft and you can also extract data from an exit from water from Powerpoint.

Speaker: Where exactly do you see this, and why would SAP have higher potential than your competitors?

Speaker: Thank you for that question.

Speaker: I mean, first of all, we at SAP strongly believe that global warming is a challenge for humankind.

Speaker Change: I mean, why wouldn't we do that? It just makes our co-pilot and our AI even more compelling. And with regard to the question around the RFD,

Speaker Change: Why wouldn't we do that it just makes our copilot now AI even more compelling.

Speaker: An ability to contribute to solving that challenge or helping solve that challenge, I mean just to give you a note of magnitude, if you think about burning one barrel of oil, you basically emit, close to half a ton of CO2 and then if you look at the price and what it costs you to abate CO2, you will figure out that many technologies like electrification of cars, carbon capture and storage and so forth have price tags which by far exceed 200 euros, which would mean that these technologies, the market for CO2 abatement will become bigger than the oil market and the oil market is a gigantic market. Now, we think it's a little bit naive to assume that the world will continue to estimate approximately what type of CO2 volumes are kind of transacted, because it's such a huge market and such a huge value there's a lot of companies who invest enormously to contribute to that abatement and they want to see that investment being protected by giving assurance that there's reliable data about that and this is why we are focusing on leveraging our ERP engine to add data about co2 it's a little bit like like value-added tax you know when you have value-added tax it's booked through the supply chain, So why not really book it in the hard way, the same way you book dollars or euros? It's a new currency.

Speaker Change: And with regard to the question and then one day after day.

Christian Klein: I would say the technology will become more and more mature, and we will see huge productivity gains. Today, do we still need to do some more quality checks? Yes, but that comes with, you know, more maturity, and less quality, but the outcome is already great.

Speaker Change: I said it also in Davos, when you walk around here in the campus, you're going to find a lot of people from India, from all over Asia, you'll find people from the United States, from Latin America, I just saw a young talent down there from Brazil, and she was so happy.

Speaker Change: I said it also in Davos and when you walk a warranty and campus youre going to find a lot of people from India from all away share you'll find people from the United States from Latin America saw a young talent down there from Brazil, and she was so happy.

Christian Klein: She was so happy because we welcomed her. She finds a country which is welcoming her. We are onboarding her, and we make her part of the team. We have to be very careful in Germany that we are not allowing any kind of form of, you know, discrimination or moving, you know, more to the white side because we need these talents. They need to feel welcome in Germany. For us, this is important. I mean, they are delivering here out of Berlin, out of Munich, out of Walldorf, our headquarters. They're delivering new innovations, and we need to make sure in Germany that we stand up and that we really make sure that these people really feel welcome when they're joining or when they're coming to Germany.

Speaker Change: Because we welcomed her. She finds a country which is welcoming her. We are onboarding her and we make her part of the team.

Speaker Change: Because we welcomed her she finds a country, which is well coming are we onboarding her and we make a part of their team.

Christian Klein: When you look into our sales... figure out the right price, figure out the right demo, and figure out the right content for this customer. It's sometimes, you know, very cumbersome; you need time, you know, to really pull together the right business case for our customers. This is now where we have already embedded AI, and to be much smarter in the way we attract and convince our customers to build on our, to buy our technology. And then, no matter if you are in accounting or commercial deal support, our contracts are today a bit too long. We are working on that. This is not what AI can do for us. But you know, when you're looking, when you're going through hundreds of pages, I mean, this is what AI can do for you and can do certain checks.

Speaker Change: and we have to be very careful in Germany that we are not allowing any kind of form of discrimination or moving more to the right side because we need these talents, they need to feel welcome in Germany. For us this is important, I mean they are delivering here out of Berlin, out of Munich, out of Waldorf, our headquarter, they are delivering new innovations and we need to make sure in Germany that we stand up and that we really make sure that these people really feel welcome when they are joining or when they are coming to Germany.

Speaker Change: And we have to be very careful in Germany that we are not allowing any kind of form of.

Speaker Change: Discrimination or moving more to the wide side, because we need this.

Speaker Change: Islands, they need to feel welcome in Germany fastest is important I mean, they're delivering here out of Pearl and out of Munich out of one of our headquarter, they're delivering new innovations and we need to make sure in Germany that we stand up and that we really make sure that these people really feel welcome when their choice.

Speaker Change: Inning or when they are coming to Germany.

Monika Schaller: Thank you, Christian. We have three more minutes to go. Marco, it looks like this is the final question for today.

Speaker Change: Thank you Christian.

Speaker Change: Thank you, Christian. So, we have three more minutes to go, Marco. It looks like this is the final question for today.

Speaker Change: So and we have three more minutes to pay or to go macro it looks like this is the final question for today. Okay. Thank you very much.

[Analyst 3]: Okay. Thank you very much. Back to the AI aspect a little bit and maybe more on the sell side opportunities. Just to get a sense of the scope and size, I remember Mr. Klein, you were talking about a possible price markup of 30% on an AI enhanced products. How much of the planned growth until 2025 and maybe even through 2027 is from AI or is there upside to those targets from AI?

Marco Engemann: Okay. Thank you very much. Back to the AI aspect a little bit and maybe more on the sell side opportunities. Just to get a sense of the scope and size, I remember Mr. Klein, you were talking about a possible price markup of 30% on an AI enhanced products. How much of the planned growth until 2025 and maybe even through 2027 is from AI or is there upside to those targets from AI?

Marco: Thank you very much. Back to the AI aspect a little bit and maybe more on the sell side opportunities.

Speaker Change: Bank to the AI aspect, a little bit maybe more on the Sunshine opportunities I'm.

Speaker Change: Just to get a sense of the scope and size, I remember, Mr. Klein, you were talking about a possible price markup of 30% on AI-enhanced products. How much of the planned growth until 2025 and maybe even through 2037 is from AI, or is there upside to those targets from AI?

Speaker Change: Just to get a sense of the scope and size I remember Mr. Klein you were talking about a possible price markup of 30% on.

Speaker Change: The enhanced products how much of the planned growth until 2025, and maybe even through 2027 is from AI or is there upside to those targets from here.

Speaker: It will never have the same price because there are good reasons why it's very tough to establish one uniform market price for that. But it's extremely important that we have strong assurance on where our CO2 footprint is. And given the complexity of our supply chains, it's very important to have that network built up. And this is where we have a unique position and think that we can capitalize on that opportunity going forward.

Christian Klein: So you need much less time to make sure that we have, commercially and accounting-wise, the right offering, and the right contract signature. And these are only a few examples. When you are working in HR, we rolled out our tool, and it will make sure that you don't have to type all the employee details into the system. It does this for you.

Christian Klein: Yeah.

[Analyst 3]: Thank you.

Marco Engemann: Thank you.

Christian Klein: Thanks a lot, Michael, for the question. I mean, first, as I also illustrated before, we are also embedding AI in our standard offering. There will be certain standard AI use cases which will come out of the box with our existing products. There will be some packages where we also have an uplift. Very important there also, especially in our consumption offering, consumption-based offering, is that we of course also always compare it to the value of these AI use cases so that customers can see what kind of cost, what kind of OpEx can I take out of the P&L? How much more smarter do I become in making those decisions? You know, we're gonna see it over the course of the year, but now having the first customers already live, we see absolutely the value, and that determines the price.

Speaker Change: Thank you.

Speaker Change: Thanks a lot Michael for the question. First, as I also illustrated before, we are also embedding AI in our standard offering. There will be certain standard AI use cases which will come out of the box with our existing products. Then there will be some packages where we also have an uplift. But very important there, also especially in our consumption offering, consumption-based offering, is that we of course also always compare it to the value of these AI use cases so that customers can see what kind of cost, what kind of OPEX can I take out of the P&L? How much more smarter do I become in making those decisions? So, you know, we're going to see it over the course of the year, but now having the first customers already live, we see absolutely the value and that determines the price. And the price, as I said, can differentiate. There is a premium price and there is a standard price and it really depends on the AI use case around, you know, how much, how, what will be then the final market price we charge, you know, to our customers.

Speaker Change: Thanks, a lot Michael for the question I mean first of all also illustrated before we.

Speaker Change: We're also embedding AI and our standard offering out there will be certain standard AI use cases, which will come out of the box with our existing products and there will be some packages, where we also have an uplift, but very important they're also especially in our consumption offer wing consumption based offering is that we of course also always compare it to the value.

Christian Klein: Tool helps on the recruiting side. Tool helps on the retention side. So these scenarios are either already rolled out or will be rolled out in the next coming months. Thank you, Christian. I'll give you a short break. I have one for Dominic.

Dominic: Thank you, Dominic.

Speaker Change: <unk> of these AI use cases, so that customers can see what kind of costs, what kind of opex can I take out of the P&L, how much more smarter do I become in making those decisions. So we are going to see it over the course of the year, but now having the first customers already live we see absolutely the value in that deter.

Speaker: So before we come back to Waldorf, why don't we go to Spain?

And the question is from Pablo Fernandez from Silicon Spain.

Dominic: Good Dominic, in the financial analyst call this morning, you mentioned that you see growth potential for SAP in the sustainability space. Where exactly do you see this, and why would SAP have higher potential than your competitors? Thank you for that question. I mean, first of all, we at SAP strongly believe that global warming is a challenge for humankind and that we have... Thanks a lot, close to half a ton of CO2 and then if you look at the price of oil and what it costs you to abate, you too will figure out that many technologies like electrification of cars, carbon capture and storage, and so forth have price tags that by far exceed 200 euros, which would mean that these technologies, the market for CO2 abatement, will become bigger than the oil market.

Speaker: Can you talk a little bit more about how SAP ensures data privacy and governance for its clients when it comes to using AI and training models?

Christian Klein: The price, as I said, can differentiate. There's a premium price and there's a standard price, and it really depends on the AI use case around, you know, how much, how, what will be then the final market price we charge, you know, to our customers.

Speaker Change: And the price and the price as I said can differentiate there is a premium price on their sustained acquired and it really depends on the AI use case of wound journal how much how what will be the in fact, the final market price, we charge to our customers.

Speaker: I mean, I can do this with an example in Spain. We have many customers in Spain, and, of course, they're also reaching out to SAP and saying, hey, what is your deployment model for AI, and where do you store the data? Will it be stored in the European Union, or will it be stored in the US?

Monika Schaller: Yeah. Thank you very much. We are getting to an end. Thanks, Christian. Thanks, Dominik. Thanks to the more than 600 people who joined us today in our virtual stream. Should you have any other questions, please feel free to reach out to our media relations team. Thank you for all of you joining us here in Walldorf. With that, have a great day. Thank you and bye-bye.

Speaker Change: Yeah. Thank you very much were getting to an end. Thanks Christian thanks, Dominic and thanks to the more than 600 people, who joined US today in our virtual stream and should you have any other questions. Please feel free to reach out to our media relations team.

Speaker Change: Thank you very much. We are getting to an end. Thanks, Christian. Thanks, Dominic. Thanks to the more than 600 people who joined us today in our virtual stream. Should you have any other questions, please feel free to reach out to our media relations team. Thank you for all of you joining us here in Waldorf, and with that, have a great day. Thank you, and bye-bye. Thanks a lot.

Speaker: We can guarantee that it will be stored in the European Union without touching the data. European people, European citizens, or people everywhere in the world, we can give them a guarantee that we also have European Union citizens touching only the data of this Spanish customer. And then second, the cloud doesn't mean that the customer's data is our data.

Speaker Change: Thank you for all of you joining us here in Valdosta and does that have a great day. Thank you and bye bye. Thanks a lot.

Christian Klein: Thanks a lot.

Speaker Change: One films liquidate in here on the ground and she doesn't listen Lewis Hamilton's types of opinion, and Tim Klein and Awesome debating senior can be 10000 islands tankage and.

Speaker Change: And for our colleagues here on the ground, if you would like to spend some more time with us, with Mr. Klein and Mr. Asam, the two of them are still a bit outside with us. Thank you very much.

Dominic: And the oil market is a gigantic market. Now, we think it's a little bit naive to assume that the world will continue to estimate approximately what type of CO2 volumes are kind of transacted. Because it's such a huge market and such a huge value, there are a lot of companies who invest enormously to contribute to that abatement, and they want to see that investment being protected by giving assurance that there's reliable data about that. And this is why we are focusing on leveraging our ERP engine to add data about CO2. It's a little bit like value-added tax. You know, when you have value-added tax, it's booked through the supply chain. So why not really book it in a hard way, the same way you book dollars or euros? It's a new currency; it will never have the same price because there are good reasons why it's very tough to establish one uniform market price for it.

Speaker: Thank you very much.

Speaker: It's another important factor, and last but not least, when you talk about trustworthiness, it's also very important that you look into the algorithms and what kind of impact they have on a business in Spain so that you have no bias in your algorithms, and we have even external advisors who are actually working with us to make sure that we are also delivering AI that is good, good for the company, and good for our society. So back to the room. Yes, now. Hi, and thank you for having my two questions.

Speaker Change: Okay.

Speaker Change: Yeah.

Alexander: The first one is, how can you combat the growing uncertainty of employees, and the second one, how is your position according to the eye?

Speaker: Yeah, Alexander, with regard to concerns and employees, I mean, first of all, I feel that the SAP employees see that. What we did together as a team the last three years, and this turnaround is remarkable. And I guess every SAP employee understands that they are working for a winning company, a growing company, which also ensures that they have a safe and secure workplace in the future. This is a major asset also for the years to come and will also, by the way, attract many new talents to join SAP, because we are a very attractive employer.

Dominic: But it's extremely important that we have strong assurance on where our CO2 footprint is, and given the complexity of our supply chains, it's very important to have that network built up. And this is where we have a unique position and think that we can capitalize on that opportunity going forward. Thank you, Dominic. So before we come back to Waldorf, why don't we go to Spain?

Speaker Change: Yeah.

Christian Klein: And the question is from Pablo Fernandez from Silicon Spain. Can you talk a little bit more about how SAP ensures data privacy and governance for its clients when it comes to using AI and training models? I mean, I can do this and... you know, with an example in Spain. We have many customers in Spain, and, of course, they're also reaching out to SAP and saying, hey, what is your deployment model for AI? Where will you store the data? Will it be stored in the European Union, or will it be stored in the US?

Speaker: Hybrid Work, Back to the office. It's a change and looks for me very important also to mention here, and we will have that also for sure on all hands this afternoon. It's not about getting people five out of five days back to the office. It's not about controlling people. But we, I'm actually a big believer, look at me. I built my career here at SAP by having great mentors, by sitting next to people who showed me how to run the best analytics. How our products are getting applied. And we're sitting together with great architects to really better understand how we're going to build our products. Would this have been possible in the home office?

Speaker Change: Yeah.

Christian Klein: And we can guarantee that it will be stored in the European Union. Who is touching the data? European people, European citizens, or people everywhere in the world.

Speaker Change: Yeah.

Christian Klein: We can give them a guarantee that we also have European Union citizens touching only the data of the Spanish customs. And then second, the Cloud doesn't mean that the customer data is our data, but it is still the customer data, so we are asking for consent. We are not violating any copyrights.

Speaker Change: Yeah.

Speaker: So we need to find the right balance. And I don't want to go back to the time when I actually had to ask my manager for every hour that I had to go to the doctor or my kids were ill or not able to go to school or anything like that. That's not about it. People should stay home and find the right balance together with their manager. I really want to emphasize that.

Christian Klein: It's very important for us to also gain trust, and we are asking for consent. If we can anonymize the data, and if we can train with this data, our algorithm. It's another important factor. And last but not least, when you talk about trustworthiness, it's also very important that you look into the algorithms and what kind of impact they have on a business in Spain so that you have no bias in your algorithms, and we have even external advisors who are actually working with us to make sure that we're also delivering AI that is good, good for the company, and good for our society. So back to the room. Alexander Jungert, Manheimer Morgenstern.

Speaker: But what we cannot allow, because it's part of our culture as well, that we only work from the home office because then we are losing our culture, and we have to be a team. And teamwork also comes with, to a certain extent, also being in the office, and the other pieces around performance culture. We are competing in an industry with a lot of competitors around the world, and you know, for me, a performing culture. What is this about? It's about you sitting together with your manager, that you get coaching, that you know what you have done great, but also that you know where you have an upside, where you can do better. If my people only tell me how good I am, it doesn't help. I also want to see where I can improve. Everyone can improve. Everyone can learn something new every day.

Speaker Change: Yeah.

Christian Klein: Yes, now. Hi, and thank you for having me ask my two questions. The first one is, how can you combat the growing uncertainty of employees? And the second one, how is your position according to the... Yeah, Alexander, I guess with regard to employees' concerns. I mean, first of all, I feel that they say P employees because they see that. What we have done together as a team the last three years and this turnaround is remarkable.

Speaker: And this is something we lost a few years ago, which I want to reestablish. And it's not about moving people out of the company. This is about helping people, coaching people to get better every day. And what I also want to make sure is that if you are a high performer in SAP, you're also going to see that in your compensation, because otherwise, why would you set targets and bonus plans if there is no relation to your performance? This is true in business, this is true in sports, this is true in every part of our lives, and this is something I really want to have also as part of SAP, and these are the changes we are doing, and I feel it's really also to the benefit of our employees, it's to the benefit of SAP.

Speaker Change: Yeah.

Christian Klein: And I guess every SAP employee understands that they are working for a winning company, a growing company, which also ensures that they have a safe and secure workplace in the future. This is a major asset also for the years to come and will also, by the way, attract many new talents to join SAP, because we are a very attractive employer of hybrid work. Back to the office. It's a change and look, for me, very important also to mention here, and we will have that also for sure at All Hands this afternoon. It's not about getting people five out of five days back to the office. It's not about controlling.

Speaker Change: Okay.

Speaker Change: Yeah.

Christian Klein: But we, I'm actually a big believer, look at me. I built my career here at SAP by having great mentors, by sitting next to people who showed me how to run the best analytics, how to actually understand how our products are getting applied. I was sitting together with great architects to really better understand how we're gonna build our product. Would this have been possible in the home office? No.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yeah.

Christian Klein: So we need to find the right balance, and I don't want to go back to the time where I actually had to ask my manager for every hour that I had to go to the doctor or my kids were ill or not able to go to school or do gynecology. That's not about it. People should stay home and find the right balance together with their manager. I really want to emphasize that. But what we cannot allow, because it's part of our culture as well, that we only work from the home office, because then we are losing our culture, and we have to be a team. And teamwork also comes with, to a certain extent also being in the office, and the other pieces around performance culture.

Speaker Change: Yeah.

Speaker Change: Yes.

Christian Klein: We are competing in an industry with a lot of competitors around the world. And, you know, for me, a performing culture. What is this about? It's about sitting together with your manager, that you get coaching, that you know what you have done great, but also that you know where you have an upside, where you can do better. If my people only tell me how good I am, it doesn't help. I also wanna see, you know, where I can improve.

Speaker Change: Yeah.

Christian: Christian, let's continue with the topic.

Christian Klein: Everyone can improve. Everyone can learn something new every day. And this is something we lost a few years ago, which I wanna reestablish. And it's not about moving people out of the company. This is about helping people, coaching people to get better every day. And what I also want to make sure is that if you are a high performer in SAP, you're also going to see that in your compensation. Because otherwise, why would you set targets and bonus plans if there is no relation to your performance?

Speaker Change: Yes.

Speaker: It's slightly different, but similar in one way or the other.

Yes.

From Michael from Wirtschaftswoche. I read them both out to you, and I think you can cover them with one answer.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker: The European Workers' Council has written an open letter to the SAP board, which massively criticizes the back-to-office initiative.

Speaker Change: Yes.

Speaker Change: Yeah.

Yeah.

Speaker: SAP employees would not focus their priorities on the first quarter's goal but would search for stable work elsewhere instead.

Speaker: What do you reply to such allegations?

Speaker: And similar, similar, similar, same question again from Wirtschaftswoche. The back-to-office initiative has really caused some internal friction among SAP employees. Don't you fear that it could scare off talent and harm our brand?

Speaker Change: Yes.

Speaker: I mean, first, when we talk about talent. When I see who is now joining White Now SAP, as I said, we get top people, top data scientists, all over the world. Our, you know, attrition and people leaving SAP is, I guess, on an all-time low, which we don't take for granted, but it's a fact. So we are a very good employer, and we are delivering results. We are securing the future of this company, and with regard to the back to office, as I just mentioned, I'm a big believer in the hybrid workspace, and we will also talk about that in the afternoon. I have two kids, and they sometimes get ill. When you have a kid in a kindergarten, they get all kinds of colds, especially over the winter, and then someone has to stay at home, and I don't want to lose the people who have to stay at home.

Speaker Change: Yes.

Speaker: Or you have sometimes very personal reasons why you have to work from home. And we are not saying that this is not possible. Absolutely not possible. But what I cannot allow to happen as a CEO, I really want to mention that I have empty offices where we are onboarding over 15,000 people this year.

Speaker: Just to mention that we stay flat, but we also, of course, have some kind of attrition, and we're getting new people on board. And we have internal transfers. How can this ever happen when you are new to SAP or to a new job inside SAP because you decided to grow your career and there's no one in the office? I'm not a big believer that on a video conference platform you can understand our culture, you can get educated, you can get enabled to do your job best. And this is something where we just put up some guidance, but again, it's not about controlling people, it's about our belief in what is best for our people, and I'm sure we will find good solutions also to enable and foster a culture of hybrid work.

Speaker Change: Yeah.

Speaker: Thank you, Christian.

Speaker: Let's move to France.

Philippe from TechTarget France.

Speaker Change: Yes.

Speaker: Many SAP user groups seem to fear that your innovation AI sustainable cockpit will only be available for the RISE with SAP customers. What is your position on innovations? Will your cloud customer outside RISE also benefit from those new disruptive features? Yes. I mean, First, I really want to emphasize that we are not leaving one customer behind.

Christian Klein: This is true in business, this is true in sports, this is true in every part of our lives. And this is something I really want to have as part of SAP. And this is the change we are doing, and I feel it's really to the benefit of our employees. It's to the benefit of SAP. Christian, let's continue with the topic. It's slightly different, but similar in one way or another, from Michael from Wirtschaftswoche. I'll read both out to you, and I think you can cover both with one answer. The European Workers' Council has written an open letter to the SAP board which massively criticizes the back-to-office initiative. SAP employees would not focus their priorities on the first quarter's goal but would search for stable work elsewhere instead. What do you reply to such allegations?

Speaker: And if you look at our Q4 results, you will see we still have a pretty decent software business.

Speaker: So we are not stopping here, you know, or allowing our customers to not further invest in the existing SAP on-premise lens. And we have given an commitment to also extend the maintenance or support until 2040.

Speaker: We are not going to extend the maintenance for the older releases because otherwise SAP is losing the speed of innovation, which we need, against all the competitors who, by the way, when you want to buy a piece of on-premise software from one of our competitors, I would say good luck. Not possible. And second, why the cloud and why certain innovations are only in the cloud? I mean, when you're sitting on a 10-year-old on-premise release, you're not really seeing any kind of innovation because all the code that we are producing is, of course, not available in a 10-year-old on-premise release, and when we are talking about having content from thousands of SAP customers and to really train algorithms to infuse AI, This is clout. It's not on-premise.

Speaker Change: Yeah.

Christian Klein: And similar, similar, similar, same question again from Wirtschaftswoche. The back-to-office initiative has really caused some internal fear among SAP employees. Don't you fear scaring off talent and harming our brand? I mean, first, when we talk about talent.

Speaker Change: [noise].

Christian Klein: When I see who is joining right now as EP, as I said, we get top people, top data scientists, all over the world. Our, you know, tuition and people leaving SEP is, I guess, on an all-time low, which we don't take for granted, but it's a fact. So we are a very good employer, and we are delivering results. We are securing the future of this company. And with regard to the back to office, as I just mentioned, I'm a big believer in the hybrid workspace, and we will also talk about that in the afternoon. I have two kids, and they are sometimes ill. When you have a kid in a kindergarten, they get all kinds of colds, especially around the window, and then someone has to stay at home, and I don't want to lose the people who have to stay at home.

Speaker Change: Yeah.

Speaker: It's just a fact. And also on the Green Ledger for sustainability and further innovations. The Green Ledger, as Dominic mentioned, is we also want to give transparency around scope 2 and scope 3. So we're not only connecting supply chains, we're also measuring ESG. We're actually aggregating data across supply chains, which is possible in the cloud.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Yeah.

Christian Klein: Or you have very, sometimes very personal reasons why you have to work from home. And we are not saying that this is not possible; absolutely it's possible. But what I cannot allow to happen as a CEO, I really want to mention that I have empty offices where we are onboarding this year over 15,000 people. Just to mention that we stay flat, but we also, of course, have some kind of attrition, and we're getting new people on board, and we have internal transfers. How can this ever happen when you are new to SAP or in a new job inside SAP because you decided to grow your career and there's no one in the office?

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker: So I please also understand that while SAP is committed to take every customer with us, We are also of course innovating much faster in the cloud, which by the way all our competitors already do, and we do our very very best with Rise and with Quo to take the customers with us and again not only with us to lift and shift and have suddenly a system in the cloud with no impact on the business, no no no, we want to also help them on their business transformation.

Christian Klein: I'm not a big believer that on a video conference platform, you can understand our culture, you can get educated, you can get enabled to do your job best. And this is something where we just, you know, put up some guidance. But again, it's not about controlling people.

Speaker Change: Yeah.

Speaker Change: Yes.

Christian Klein: It's about our belief in what is best for our people, and I'm sure we will find good solutions also to enable and foster a culture of hybrid work. Thank you, Christian. Let's move to France.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Yes.

Christian Klein: Philippe from TechTarget France. Many SAP user groups seem to fear that your innovation AI sustainable cockpit will only be available for the RISE with SAP customers. What is your position on innovations? Will your cloud customer outside RISE also benefit from those new disruptive, Yes, I mean.

Speaker: So, before we go to Marco, as promised, I have one more for Dominic.

Dominic: Happy birthday online from Klaus.

Klaus: This is a bit of a longer one.

Speaker: So, SAP is one of the many large investors in OpenAI competitor Entropic.

Speaker Change: Yeah.

Christian Klein: First, I really want to emphasize that we are not leaving one customer behind. And if you look at our Q4 results, you will see that we still have a pretty decent software business. So, we are not stopping here, you know, or allowing our customers to not further invest in their existing SAP on-premise land. And we have given an commitment to also extend the maintenance or maintenance until 2040. We are not going to extend the maintenance for older releases.

Speaker Change: Yes.

Speaker: How do you secure the value of this investment for your company in relation to the other major investors?

Speaker: Please talk a little bit in short about SAP's value from partnerships with Google Cloud, IBM Watson, and Microsoft. Short, please. Like this is the only way to lift the value of SAP customers' data in AI. So before I answer that, I cannot resist the temptation to answer a question about RFD you asked. Yeah, we have it here that we... Let me try the following one.

Yeah.

Dominic: I've learned in my history lessons that it's always extremely dangerous when some people think they have extremely easy answers to very complicated questions.

Speaker Change: Yeah.

Speaker: Now, coming to the investment about... and artificial intelligence investors. Behafton, Different paths, how we explore these partnerships and leverage these partnerships. We are really playing with a couple of dozens of foundation models to figure out which of those are really the best suited to support the use cases we infuse into our portfolio. And I think that's the strength we can offer. Using the BTP, we make them accessible to the developers of these applications in a very seamless way. So we're not nervous about other people investing alongside or taking much larger stakes in that. We just want to make sure that we're not missing the train and we have a good overview of all the models out there to identify the best value for money, actually, because it's sometimes amazing how different the pricing is for these models so we can not only deliver the best effectiveness for the use case but also the lowest cost for them.

Christian Klein: Because otherwise SAP is losing the speed of innovation, which we need, against all the competitors who, by the way, when you want to buy a piece of on-premise software from one of our competitors, I would say good luck. Not possible. And then second, why the cloud? And why certain innovations are only in the cloud? I mean, when you're sitting on a 10-year-old on-premise release, you're not really seeing any kind of innovation because all the code that we are producing is, of course, not available in a 10-year-old on-premise release. And when we are talking about having content from thousands of SAP customers and really training algorithms to infuse AI. I mean, this is the cloud, not on prem. It's just a fact.

Yeah.

Speaker Change: Yeah.

Speaker Change: [noise].

Speaker Change: Sure.

Speaker: Thank you on the... Yeah, maybe one topic on that one. I mean, when you look at Watson, when you look at Microsoft and their co-pilots, Of course, we are focusing heavily on our organic innovation, but you can extract even more value if you're using Joule for HR, and suddenly you can also connect our co-pilots together with Microsoft, and you can also extract data from Excel or from Word or from PowerPoint.

Speaker: I mean, why wouldn't we do that? It just makes our co-pilot and our AI even more compelling. And with regard to the question about the RFD, I said it also in Davos: when you walk around here on the campus, you're going to find a lot of people from India, from all over Asia, you'll find people from the United States, from Latin America. I just saw a young talent down there from Brazil, and she was so happy because we welcomed her. She finds a country which is welcoming her.

Christian Klein: And also on the green ledger on sustainability and further innovations. The green ledger, which Dominic mentioned, we also want to give transparency around scope two and scope three. So we are not only connecting supply chains, we are also measuring ESG, and we are actually aggregating data across supply chains, which is possible in the cloud.

Speaker: We are onboarding her, and we make her part of the team, and we have to be very careful in Germany that we are not allowing any kind of form of discrimination or moving more to the right side because we need these talents; they need to feel welcome in Germany.

Speaker: For us, this is important, I mean they are delivering here in Berlin, out of Munich, out of Waldorf, our headquarters, new innovations, and we need to make sure in Germany that we stand up and that we really make sure that these people really feel welcome when they are joining or when they are coming to Germany.

Christian Klein: So I would also like to explain that while SAP is committed to taking every customer with us, we are also, of course, innovating much faster in the cloud, which, by the way, all our competitors already do. And we do our very, very best with WISE and with Quo to take the customers with us, and again, not only with us to lift and shift and have a system in the cloud with no impact on the business. No, no, no; we want to also help them with their business transformation. So, before we go to Marco, as promised, I have one more one for Dominic. Börse Online from Klaus.

Christian: Thank you, Christian.

Speaker: So, we have three more minutes to go, Marco.

Marco: It looks like this is the final question for today.

Speaker: Thank you very much. Back to the AI aspect a little bit and maybe more on the sell side opportunities.

Michael: Just to get a sense of the scope and size, I remember, Mr. Klein, you were talking about a possible price markup of 30% on AI-enhanced products.

Speaker: How much of the planned growth until 2025 and maybe even through 2037 is from AI, or is there an upside to those targets from AI?

Speaker: Thanks a lot Michael for the question. First, as I also illustrated before, we are also embedding AI in our standard offering. There will be certain standard AI use cases which will come out of the box with our existing products. And then there will be some packages where we also have an uplift. But very important there, especially in our consumption offering, our consumption-based offering, is that we, of course, also always compare it to the value of these AI use cases so that customers can see what kind of cost, what kind of OPEX can I take out of the P&L? How much smarter do I become in making those decisions?

Dominic: This is a bit of a longer one. So, SAP is one of many large investors in open AI competitor Entropic. How do you secure the value of this investment for your company in relation to the other major investors? Please talk a little bit in short about SAP's value from partnerships with Google Cloud, IBM, Watson, and Microsoft.

Dominic: Like this is the only way to lift the value of SAP customers' data in AI. So before I answer that, I cannot resist the temptation to answer a question about IFD. You asked, I know it's a... Yeah, we have it here that we... Let me try the following one. I've learned in my history lessons that it's always extremely dangerous when some people think they have extremely easy answers to very complicated questions.

Speaker: So, you know, we're going to see it over the course of the year, but now that we have the first customers already live, we see absolutely the value, and that determines the price. And the price, as I said, can vary. There is a premium price, and there is a standard price, and it really depends on the AI use case around, you know, how much, how, what will then be the final market price we charge our customers. Thank you very much. We are getting to the end. Thanks, Christian. Thanks, Dominic. Thanks to the more than 600 people who joined us today in our virtual stream. Should you have any other questions, please feel free to reach out to our media relations team.

Dominic: Now, coming to the investment about from AI Investments. We have different paths for how we explore these partnerships and leverage these partnerships. We are really playing with a couple of dozen foundation models to figure out which of those are really the best suited to support use cases we infuse in our portfolio.

Speaker: Thank you for all of you joining us here in Waldorf. And with that, have a great day.

Speaker: Thank you, and bye-bye.

Speaker: Thanks a lot.

Speaker: And for our colleagues here on the ground, if you would like to spend some more time with us, with Mr. Klein and Mr. Asam, the two of them are still a bit outside with us.

Dominic: And I think that's the strength we can offer. Using the BTP, we make it accessible to the developers of these applications in a very seamless way. So we are not nervous about other people investing alongside or taking much larger stakes than that. We just want to make sure that we are not missing the train and we have a good overview of all the models out there to identify the best value for money, actually, because it's sometimes amazing how different the pricing is for these models. So we can not only deliver the best effectiveness for the use case but also the lowest cost for them. Thank you on the... Yeah, maybe one topic on that one. I mean, when you look at Watson, when you look at Microsoft and their co-pilots... Of course, we are focusing heavily on our organic innovation, but you can extract even more value if you're using JOOL for HR, and suddenly you can also connect our co-pilots together with Microsoft, and you can also extract data from Excel or from Word or from PowerPoint. I mean, why wouldn't we do that?

Speaker: Thank you very much.

Christian Klein: It just makes our co-pilot and our AI even more compelling. And with regard to the question about the RFD. I said it also in Davos, when you walk around here on the campus, you're going to find a lot of people from India, from all over Asia, you find people from the United States, from Latin America. I just saw a young talent down there from Brazil, and she was so happy because we welcomed her. She found a country which was welcoming her.

Christian Klein: We are onboarding her, and we make her part of the team. And we have to be very careful in Germany that we are not allowing any kind of form of, you know, discrimination or moving, you know, more to the white side because we need this talent. They need to feel welcome in Germany.

Christian Klein: For us, this is important. I mean, they are delivering new innovations here in Berlin, in Munich, in Waldorf, our headquarter. And we need to make sure in Germany that we stand up and that we really make sure that these people really feel welcome when they join or when they come to Germany.

Christian Klein: Thank you Christian. We have three more minutes to go. Marco, it looks like this is the final question for today. Thank you very much. Back to the AI aspect a little bit, and maybe more on the cell side opportunities. Just to get a sense of the scope and size, I remember, Mr. Klein, you were talking about a possible price markup of 30% on AI-enhanced products. How much of the planned growth until 2025, and maybe even through 2037, is from AI, or is there upside to those targets from? Thank you.

Christian Klein: Yeah, thanks a lot, Michael, for the question. First, as I also illustrated before, we are also embedding AI in our standard offering. There will be certain standard AI use cases which will come out of the box with our existing products. And then there will be some packages where we also have an uplift. But very important there, especially in our consumption offering, our consumption-based offering, is that we, of course, also always compare it to the value of these AI use cases so that customers can see what kind of cost, what kind of op-ex can I take out of the P&L? How much smarter do I become in making those decisions? So, you know, we're going to see it over the course of the year, but now that we have the first customers already live, we see absolutely the value, and that determines the price. And the price, as I said, can vary. There's a premium price, and there's a standard price, and it really depends on the AI use case around how much what will then be the final market price we charge our customers.

Christian Klein: Yeah, thank you very much. We are coming to an end. Thanks, Christian. Thanks, Dominic. Thanks to the more than 600 people who joined us today in our virtual stream. Should you have any other questions, please feel free to reach out to our Media Relations team. Thank you for all of you joining us here in Waldorf. And with that, have a great day. Thank you and bye-bye. Thanks a lot, and to our colleagues here on the ground, if they still have a bit of a craving to spend time with us, with Mr. Klein and Mr. Asam, who are both still a bit draußen with us. Dankeschön.

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