Q4 2024 SAP SE Earnings Call - Press Conference

January 28, 2025

Yeah.

Okay.

Good morning, Good afternoon, good evening and a very warm welcome. Thank you for joining us he lives and bite off and thank you to everyone who is joining us virtually I'm Monica Schalow Chief Communications Officer.

Speaker Change: All numbers youre going to see to the unknown ifr isn't gross rates in percentage points changes among iPhone is at constant currencies, our CEO Christian Klein they'll kick it off followed by our CFO Dominik Awesome. Later on you will have the opportunity to ask questions.

Speaker Change: Should you ask questions virtually please also give your name and outlet and with that lets them at least anytime over to your question. Yeah. Thank you Monica welcome everyone. Yeah onsite at our headquarter and of course also welcome to everyone. Joining us worldwide in a moment, we will deep dive on our <unk>.

Christian Klein: Yeah. Thank you, Monika. Welcome, everyone here on-site at our headquarters, and of course, also welcome to everyone joining us worldwide. In a moment, we will deep dive on our numbers. We will talk more about our earnings today. Just attending my fifth WEF, World Economic Forum in Davos, obviously also, please allow me to share a bit of the, you know, dominant topics in Davos, on the C-suite, but of course also with our political leaders. AI and Europe's competitiveness were, of course, a big topic. You know, when we look at the economic situation, I mean, for sure, the US and China have large tech players. We in Europe have one, and these tech players in the US and China are very dominating when it comes to AI infrastructure, when it comes to large language models.

Speaker Change: We will talk about more about our earnings today.

Speaker Change: But chuck's attending my fifth West World Economic Forum Davos. Obviously also please allow me to share a bit of the dominant topic in Davos on the C suite, but of course also with our political leaders.

Speaker Change: And Europe's competitiveness as well of course big topic, and you know when we look at the economic situation I mean for sure. The U S and China have large tech plant V. In Europe have one in these tech players in the U S and China very dominating when it comes to AI infrastructure when it comes to large.

Christian Klein: Yes, for sure we see it. AI is a very transformative technology, and it's very key that we apply AI so that our industries remain competitive. With everything what is happening around us, I have to say the wake-up call for Europe is loud and clear. Now, there was also a lot of talk, how should the response look like from Europe and Germany? My strong advice also to our political leaders is not to copy the US-Chinese playbook. We in Europe have very strong industries, and we don't need the European Union or the German government to subsidize new hardware factories or products which are not competitive. This is on us, the private sector, to make the investments, to deliver great products and innovations.

Speaker Change: <unk> modules and yes.

Speaker Change: For sure we see it is very transformation transformative technology and it's very key that we apply AI so that our industries remain competitive.

Speaker Change: And with everything what is happening around us I have to say.

Speaker Change: The wake up call for Europe, It's loud and clear now there was also a lot of talk how should the response looked like from Europe and Germany.

Speaker Change: And my swung at twice also to our political leaders its not to copy.

Speaker Change: The U S Chinese playbook.

Speaker Change: We in Europe have whoever is Tong industries and.

Speaker Change: And we don't need the European Union or the German government to subsidize you hardware factory, so products, which are not competitive. This is an off the private sector to make the investments to deliver great products and innovations, but what is also very key for us on the private sector is that the <unk>.

Christian Klein: What is also very key for us on the private sector is that the union, the European Union, finally becomes a union. We don't have the framework to invest and drive innovation. I mean, just to give you a few examples on the digitization, which is so key for all of the industries, not only SAP. I mean, we have one AI and Data Act for Europe, but we have 27 in each member state. So with adding one more, you know, you are adding bureaucracy, you're adding regulation, and you kill innovation before it's actually, you know, going into adoption. When we are talking in the United States about the Sovereign Cloud, we talk about one. In this one, Sovereign Cloud is also SAP software included.

Speaker Change: In the European Union finally becomes a union, we don't have to framework to invest and drive innovation.

Speaker Change: I mean, just to give you a few examples on the Digitization, which is so key for all of the industries not only as a P.

Speaker Change: We have one AI and data for Europe, but we have 27, each member state so with adding one more you know you are adding bureaucracy, you asking regulation and you kill innovation before it's actually you know going into adoption.

Speaker Change: When we are talking in the United States about the sovereign cloud we talk about one.

Speaker Change: And in this one sovereign cloud. It's also SDP software included software, which has also developed in Europe. So we should come together and find a very pragmatic definition about how this one European sovereign cloud should look like and how to run our workloads.

Christian Klein: Software which is also developed in Europe. We should come together and find a very pragmatic definition about how this one European Sovereign Cloud should look like and how to run our workloads. That it doesn't matter maybe so much where every piece of hardware is coming from. Security questions, fair. Where the data resides, very fair. We need one Sovereign Cloud, not 27. I mean, think about it. We are a multinational. We make choices of investments in our labs in the US, in China, in India, everywhere. For our startups, it's again, a big obstacle to scale. Most importantly, what we need across Europe are bold and fast decisions. Now, asking us, asking what SAP can contribute, sometimes it's a bit forgotten. We have a large tech company in Europe, and that is SAP.

Speaker Change: And that it doesn't matter, maybe so much where every piece of hardware is coming from security question Fair, where the data resides where are we fair, but we tell you we need one sovereign cloud not 27, I mean think about it we are a multinational weekend, we make choices of investments in our labs in the U S and China, and India everywhere, but for.

Speaker Change: Our start ups.

Speaker Change: Again, a big obstacle to scale and most importantly, what we need across Europe.

Speaker Change: World and fast decisions now asking us asking what S&P can contribute sometimes it's a bit forgotten.

Speaker Change: We have a large tech company in Europe and that is S. P.

Christian Klein: What is the advantage of SAP? Looking at yesterday's news about the scale of AI infrastructure and the cost coming down and performance going up, I would say SAP has the big competitive advantage that we have business data no other tech company has. We are sitting at the nexus between business and technology. The value creation, how a Mercedes, how our German industry giants improve their cash flow, improve the resiliency of the supply chain, is not happening on the infrastructure layer. It's about infusing AI in their supply chain, in their finance, in their HR software. This is, you know, what this is about. Just to give you a flavor, we made the math. We would be willing also to invest over EUR 40 billion in R&D and cloud operations in Europe only, SAP, EUR 40 billion.

Speaker Change: And what is the advantage of S. AP and looking at yesterday's news about the scale of AI infrastructure and the cost coming down and performance going up I would say S. E. P has the big competitive advantage that we have business data no. Other tech company as we are sitting at the Nexus between busy.

Speaker Change: Nurse and technology the value equation, how MSC this how our chairman industry shines improve their cash flow improve the resiliency of the supply chain, it's not happening on the infrastructure layer, it's about infusing AI in their supply chain in their findings in the HR software and this is what is this about.

Speaker Change: And just to give you a flavor we made the mess we would be willing also to invest over $40 billion in R&D and cloud operations in Europe only S. A P 40 billion, but what we need.

Christian Klein: What we need, as everyone else, is the union we just talked about. It's really imperative now that we take actions both in the public and in the private sector. Talking about SAP. We are climbing this mountain. I hope you can see it. It was sometimes a very steep mountain. In the first two years, there were a lot of doubts, can SAP pull it off? I have to say, I come later to that, I'm very proud about the team, customers, and partners on how we mastered that. When you look at our outlook for 2025, I would say it's a very confident and bold outlook. Because even beyond 2025, we actually see a continuing cloud acceleration. We also see that our customers like the speed of innovation.

Speaker Change: We will announce is the union, we just talked about and it's really imperative now that we take actions both in the public and the private sector.

Speaker Change: Talking about S E P.

Speaker Change: So we are climbing this mountain I hope you can see it.

Speaker Change:

It was sometimes a very steep mountain and the first two years of a lot of towers can S&P pull it off and I have to say I come later to that I'm very proud to support the team customers and partners on how we model that and when you look at our outlook for 2025, I would say, it's a very confident and bullish outlook and pickup.

Speaker Change: Even beyond 2025, we actually see a continuing cloud acceleration.

Speaker Change: And we also see that our customers like the speed of innovation, who wants to sit on an eight year old on premise of the lease with outdated components and is completely decoupled from the innovations we are shaping our business suite, each and every quarter.

Christian Klein: Who wants to sit on an 8-year-old on-premise release with outdated components and is completely decoupled from the innovations we are shipping in our SAP Business Suite each and every quarter? At Joule, I mean, I just talked about it, what SAP can do. I would say the AI strategy of SAP was spot on to focus on business data, to focus on things like Knowledge Graph, to do a lot of R&D investment in places where SAP has a unique competitive edge. Just yesterday, there is a demo actually out there. You can see it. We showed, you know, a German CFO on how to collect cash faster by multiple agents playing together with tools sitting on top to provide various recommendations on, you know, how to collect cash faster. Is it an issue on the logistical side? There is the agent for logistics.

Sandy Guy: Sandy Guy.

Sandy Guy: I mean, I just talked about it what S&P can do and I would say the ice by the Chi of S&P was brought on to focus on business data to focus on things like knowledge Quaff to do a lot of R&D invest on places where S&P has a unique competitive edge just yesterday and there is a demo actually out there.

Sandy Guy: You can see it we showed you know chairman and CFO, how and how to collect cash faster by multiple agents playing together with tools sitting on top to provide wherever he is got commendations on and know how to collect cash faster is it an issue on the logistical side. There is the agent for logistics is it an issue on.

Christian Klein: Is it an issue on the procurement side? There is this agent for the procurement. There is also the agent for sales. All of them talk to each other. Cash collection, you know, will not only become more automated, you actually also see more value in collecting cash faster. That is, you know, the next age of AI. Then 2025, and I hope you have some time for us on 13 February 2025. We worked on the next breakthrough innovation for a long, long time, and now we are ready to launch it. 2025 will be the year of data, and I will come in a second to this big launch we are going to have in February. Now, Q4 was strong. I mean, you have seen it. Cloud revenue expanded once again by 27%.

Sandy Guy: On the procurement side days this agent for the procurement. There is also the agent for faith and all of them talk to each other so cash collection now will not only become more automated you actually also see more value in collecting cash faster and that is you know the next age of AI and then <unk>.

Sandy Guy: 25, and I hope you'll have some time for us on February 13, we worked on the next place where innovation for a long long time.

Sandy Guy: And now we are wedded to launch it in 2025 will be the year of data and I will come in the second to speak launch we're going to have in February now Q4 was strong.

Sandy Guy: I mean, you have seen it cloud revenue expanded once again by 27%.

Christian Klein: The most important figure is for me, the current cloud backlog and 29%. Think about that. I mean, the base is getting larger and larger. You know, when you make the math work, you know, you see that these percentage points are not getting easier. Still, we have accelerated the CCB throughout the year, and so that gives us, of course, a lot of resiliency. This EUR 63 billion of total cloud backlog, which we already have signed in the books, but not yet realized as revenue, of course, gives SAP the resiliency in times where the macro is, of course, not always easier. 2024, we achieved all our cloud goals. We doubled the cloud revenue since 2020. I would say, looking at the growth, there is no SaaS company growing faster than SAP.

Sandy Guy: Most important figures for me to Cowen cloud backlog, and 29% think about that I mean, the base is getting larger and larger and you know when you make the math work you know you see that this percentage points I'm not getting easier still how do we accelerate the CCP throughout the year and so.

Sandy Guy: That gives us of course, a lot of resiliency and this 63 billion of total cloud backlog, which we already have signed in the books, but not yet realized as revenue of course gifts S&P. The resiliency in times, where the macro is of course not always easier.

Sandy Guy: So 2024, we achieved all our cloud goals, we doubled the cloud revenues since 2020 <unk>.

Sandy Guy: And I would say looking at the close days no soft company, calling fostered in S. E P and the recovering havent used shelves, 63% of course again gives us the resiliency on the topline, but as well as on the part of Bottomline.

Christian Klein: The recurring revenue share of 63% of course, again, gives us the resiliency on the top line, but as well as on the bottom line. Four years ago, we pulled this transformation off. There were some doubts, but first and foremost, I don't want to miss the opportunity here. We have later on an employee all hands, where I really have to say, I have to thank our 100,000 employees. I know the speed of change at SAP was fast. People of course, you know, always, you know, said, "Hey, there is another change." But everything what we pulled off from strategy to execution landed in these numbers. The tech sector moves unbelievable fast. I know, yeah, we have requested and asked our employees a lot, but they delivered. This is their success story.

Four years ago, we pulled this transformation off.

Sandy Guy: There were some doubt, but first and foremost I don't want to Miss the opportunity here and we have laid on an employee all hands.

Sandy Guy: I really I have to say I have to think of a 100000 employees and I know the speed of change. It is a P was fast.

Sandy Guy: People of course, you know always said hey, there is another change, but everything what we pulled off from strategy to execution landed in this number and the tech sector moves unbelievable fast and I know you know we had requested and asked our employees a lot, but they delivered and so this is Dan.

Christian Klein: Of course, we have a big ecosystem of partners. We are nothing without our partners. They are following their strategy. They are helping us on the execution side, be it in development, in services, and sales. Kudos to our over 20,000 partners. Last but not least, thanks to our customers for the trust, who are always sometimes in economic tough times, investing in our software as a sign of trust, seeing the value. This is of course also a big thank you to all of our 400,000 customers. You see some of the plans. I mean, I mentioned in the earnings call this morning, we signed 2 large energy companies. Actually, what is so important also with these customers, you know, their business model is changing.

Sandy Guy: First though enough cost we have a big ecosystem of partners. We are nothing without our partners and so all today are falling the strategy. They are helping us on the execution side bead in development in services and sales. So kudos to also to our over 20000 partners and last but not least <unk>.

Sandy Guy: Thanks to all of our customers for the trust, who are always sometimes in economic tough times investing in our software.

Sandy Guy: As a sign of trust seeing the value and this is of course also a big thank you to all of our 400000 customers Youll.

Sandy Guy: You'll see some of the plants.

Sandy Guy: I mean I mentioned in the earnings call. This morning, we signed two large energy companies and actually.

Sandy Guy: What is so important to also with these customers.

That business model is changing and so they are not only going on this wise, China with because they want to be only in the cloud, but S&P is doing is transforming that business module is helping them to one new businesses at scale simplifying business processes and of course AI as I said, it's already in 50% of our deal.

Christian Klein: They are not only, you know, going on this RISE journey because they want to be only in the cloud. What SAP is doing is transforming their business models, helping them to run new businesses at scale, simplifying business processes. Of course, AI, as I said, is. It's already in 50% of our deals, is a major value driver for customers signing in these days. We had major go-lives, IBM, General Motors, super important, of course, yeah. In the cloud, we walk with the customers every step, and customer satisfaction is key. Adoption is key. This is also what we infused into the DNA of SAP over the last four years. Now, numbers are up. 2024 is a great year. In the technology space, there is no time to rest.

Speaker Change: <unk> is a major why did you travel for customer signing in in these days we are.

Speaker Change: Major go lives IBM General Motors Super Super important of course in the cloud we work with the customers and with stack and customer satisfaction is key adoption is key. This is also what we infused into the DNA of S&P over the last four years now.

Speaker Change: Numbers are up 'twenty 'twenty four is a great year in the technology space. There is no time to west. So what we have to do is we are waiting to buy we need new ideas, we need new ways to accelerate our close and of course to also expand our operating profit not only in <unk>.

Christian Klein: What we have to do is we are raising the bar. We need new ideas. We need new ways to accelerate our growth and, of course, to also expand our operating profit, not only in 2025. We are in for the mid and for the long term. Let me quickly talk about some of the levers we are pulling off. First, I talked about product innovation. This S/4HANA, S/4HANA, it's shining because it's integrated. I mean, four years back, we were heavily criticized, and now we are beating a lot of best of breed because, you know, every enterprise, no matter if you're in cloud or on-prem, and no AI will change that, needs to run integrated on one consistent data model. That is, you know, this is the foundation with BTP.

Speaker Change: 125, we are in for the mid and for the long term. So let me quickly talk about some of the levers we are pulling off.

Speaker Change: First I talked about product innovation.

Speaker Change: Yes.

Speaker Change: Sunshine half Sunshine, it's shiny because its integrated I mean four years back we were heavily criticized and now we are beating a lot of best of breed because every enterprise no matter if you're on cloud.

In no way I will change that needs to Juan indicated on one consistent data module and that is you know this is the foundation with PDP and now we deliver already you know a 130 churn AI use cases over thousand narrow AI use cases and or tool already has 1300 skills.

Christian Klein: Now we delivered already, you know, 130 GenAI use cases, over 1,000, you know, narrow AI use cases and over Joule already have 1,300 skills where end users can work with, you know, their language in translating and automating activities, what they are doing on a day-to-day basis, which is a massive boost on productivity. In 2025, we are doubling down again. Now, I talked about this exciting announcement. Let me quickly talk about it. Today, no matter which customer, they invest a ton of money, IT money, to overcome data silos. You can build data lakes, which is good. You can put a lot of data in a lake. That doesn't mean that your data fits to each other. That is actually the biggest challenge of all of our customers.

Speaker Change: And use those can work with that language in translating in automating activities are what they are doing on a day to day basis, which is a massive boost on productivity and in 2025, we are doubling down again now I talked about this exciting announcement, let me quickly talk about it.

Speaker Change: Today, no matter, which customer de invest a ton of money money to overcome data silos and you can build data lakes, which is good you can put a lot of data in the lake that doesn't mean that your data fit to each other and that is actually the biggest challenge of all of our customers.

Christian Klein: SAP has the commercial definition of all material, of all financial flows of employee tasks in our solutions. What we are doing, we are opening this up to break silos so that customers, partners, we can match semantically all data, structured, unstructured, SAP, non-SAP data, because only then you can not only run your business better and you can steer your business better, you can also exploit even more value out of AI. Especially when you talk about these agents, they won't talk to each other if you have 20 different agents from all kinds of technology players. They need to talk one language semantically. I would really like to invite you to our SAP Business Unleashed event on 13 February. Commercial matters. I mean, we needed to make it easier for our customers to sell, to buy, to adopt, and consume our portfolio.

Speaker Change: In S. E. P has the commercial definition of all material of all financial flows of employee tasks in our solutions and what we are doing we are opening this up to plague silo. So that customers partners. We can match semantically all data structured unstructured S&P known S. A P data.

Speaker Change: Because only then you cannot only one your business better than you can steer your business better you can also exploit even more value out of AI and especially when you talk about these agents.

Speaker Change: I won't talk to each other if you have 20 different agents from all kinds of technology play as they need to talk one language semantically and I would really like to invite you to our business unleashed event on February 13.

Speaker Change: Marshals met us I mean, we needed to make it easier for our customers to sell to buy to adopt and consume our portfolio. So with every wise and come out and quote contract. Our customers are now having to benefit to consume all of our business suite in the cloud. So they can stop refinance they can start with HR or supply chain.

Christian Klein: With every RISE and GROW contract, our customers are now having the benefit to consume all of our Business Suite in the cloud. They can start with finance, they can start with HR, or supply chain. It's up to them. This flexibility is key. They can go into their transformation journey based on their priorities. They can land and expand without again and again having the commercial negotiations. Of course, the integration makes it easier to plug in and play. Land and expand is key for our customers, and it will get way easier product-wise and commercial-wise. Now, simplification. You know, to be credible to our customers, obviously, we need to walk the talk.

Speaker Change: It's up to them and this flexibility is key and then they can go into that transformation journey based on their priorities, but they can land and expand without again and again, having the commercial negotiations and of course, the indication makes it easier to plug in and play so land and expand is key for our cost.

Speaker Change: And it will get ways here product wise and commercial wise now simplification.

Speaker Change: And it was such a company and.

Speaker Change: And also to be credible to our customers, obviously, we need to walk the talk so you cannot go out and say hey, Here's business AI and it will help you to drive productivity of course, we have to use it by alone to gain more productivity, but also to show our customers. How we are wanting is P and.

Christian Klein: You cannot go out and say, "Hey, here is business AI, and it will help you to drive productivity." Of course, we have to use it on our own to gain more productivity, but also to show our customers how we are running SAP. When you would walk around in our labs here and everywhere in the world, 20,000 SAP developers are already using Joule for Developers. What we are seeing is that they can produce code faster by 20%. AI-assisted contract validation. We are closing a ton of new business. Salespeople, finance people, a lot of billing, shared service people are working on this business. With Joule for quote-to-cash, we actually could reduce the average contract booking time by 75%.

Speaker Change: And when you would walk a wound in our laps here and everywhere in the World 20000, S&P developers are already using tune for developer and what we are seeing is that they can put to use code faster by 20%.

Speaker Change: Hey, I assist the contract validation, we are closing a ton of new business, So salespeople finance people.

Speaker Change: A lot of billing shared service people are walking on this business and with Shaw for quote to cash we actually could choose to arrow, which contract booking time by 75%. So while we are growing our business, we can actually equip our people with AI to do that.

Christian Klein: While we are growing our business, we can actually equip our people with AI to do their job way more productive than before. We have numerous examples. Delivery, finance, HR, in sales, and in consulting with tool for consultants, which will also help us to really, you know, make SAP more simple and of course, also more productive. People. When you are a tech company, it's all about your people. This year will also be the year of reskilling and learning. It was always a priority, but now so many job profiles are changing because of AI. Fifteen percent of the working time of our employees should be freed up to be, to dedicate to learning and development. No matter if you are in development, in sales, consulting, everywhere, AI will change your job.

Speaker Change: So way more productive than before.

Speaker Change: And we have numerous examples delivery finance HR and sales and consulting with tool for consultant, which will also help us to really own Omega S&P more simple and of course also more productive.

Speaker Change: People.

Speaker Change: New AD Tech company, it's all about your people and this year will also be the year of re skilling and learning it was always a priority, but now so many chop profiles are changing because of AI. So 15% after working time off our employees should be freed up to peak to dedicate to learning.

Speaker Change: <unk> and development and no matter. If you are in development and sales consulting everywhere AI.

Speaker Change: I will change at sharp and it's important to also we continuously re skill our employees more important than ever. We also hire new people I mean, you have heard all the news about our transformation. It's also important that we added 9000 people data scientists focus AI.

Christian Klein: It's important to also continuously reskill our employees, more important than ever. We also hire new people. I mean, you have heard all the news about, you know, our transformation. It's also important that we added 9,000 people, data scientists focused on AI. We added also more go-to-market people in places where SAP is growing that fast, but we have not yet the footprint as some in our mature markets. That is, you know, where we are also increasing our workforce. Then Gina and team pulled off a new cultural transformation. Best is never done. We talked about performance, which matters, and I hope it's also getting now more common in Germany that you can talk about performance.

Speaker Change: We added also more go to market people in places, where it's a P is growing that fast, but we have not yet the footprint. Some in our mature markets that is where we are also increasing our workforce and then Jean on team pulled off a new cultural transformation best is never done we.

We talked about performance, which matter and I hope. It's also getting now more common in Germany that you can talk about performance and we need performance and we need to equip our people with the skills. But then we also need to help them twice, even better performance going forward and that is something very important when you want to compete.

Christian Klein: We need performance, and we need to equip our people with the skills, but then we also need to help them, you know, to drive even better performance going forward. That is something very important when you want to compete with a lot of technology companies around the world. There will be a dedicated program also around that to really equip our people with the skills, to also make sure that our leaders can drive the change. That, of course, at the end, we also have a workforce which also can drive SAP into the future. We are very proud about what our people have delivered in 2024. Now, when you talk about leadership, we also announced some leadership changes this morning, starting with Sebastian. Sebastian Steinhauser started as head of strategy four years ago.

Speaker Change: With a lot of technology companies around the world and so there will be a dedicated program also wound that to really equipped our people with the skills to also make sure that our leaders can twice to change and that of course at the end. We also have a workforce, which also can twice S. A P into the future and we are very proud.

Speaker Change: About what the what our people have delivered in 2024.

Speaker Change: Now when you talk about leadership, we also announced some leader ship changes this morning.

Speaker Change: Starting with Sebastian Sebastian Steinhauser started as our head of strategy four years ago in the meantime, he lifts and pleased S&P.

Christian Klein: In the meantime, he lives and breathes SAP. We gave him last year already more responsibilities on combining our operations teams, IT, processes, to not only drive strategy but also strategy to execution. We found, together with the supervisory board actually, that we want to make this an executive board position. Why? Change needs to happen across SAP, and it's very important that we connect the dots end to end, and that's why we elevate Sebastian to the executive board. Also, we're gonna announce Philipp Herzig as our new CTO. Philipp, great visionary. He's a great pioneer also in driving new innovations even before AI. Now in AI, he did a great job, which also is a testament to the results we are reporting this morning. Now he assumes more responsibility.

Speaker Change: We gave him last year already more responsibility is on combining our operations teams I T processes to not only twice strategy, but also a strategy to execution and we found together with the supervisory board actually that we want to make this an executive board position why change needs to happen across the SCP.

Speaker Change: And it's very important that we connect the dots and to earn and that's why we elevate Sebastian to the Executive Board also we garner announced Philip Hudson as our new CTO Philip Quade wishing here. He's equate pioneer also in driving new innovation, even before AI now and AI, who did equate shop.

Speaker Change: Which also is a testament of the results. We are reporting this morning, and now he assumes more responsibility and in this responsibility. He will look into topics like Quantico, monotonous and always we will make sure that in Sweden to five years as the S&P is still very competitive in applying this technology in our portfolio.

Christian Klein: In this responsibility, he will look into topics like quantum and others, and always will make sure that in three to five years, SAP is still very competitive in applying this technology in our portfolio to drive value for our customers, focusing on the mid, on the long term. Now, chief revenue officer, both Jan Gilg and Manos Raptopoulos will actually be the two in the box for our customer success organization. Jan will focus on Americas and our global suite. Manos will focus on EMEA, APAC, and MEE. Both will report into me because we want to continue with the successful transformation of our go-to-market function we started in 2024. Marketing will actually remain with Ada. Ada Agrait will now become our new chief marketing officer. We are very happy with Ada. Ada built great bridges to sales, digitized our marketing.

Speaker Change: All you to twice value pharma customers focusing on the mid on the long term.

Now Chief revenue officer, both young Gilligan Manav Gupta of <unk> will actually be the tool in the box for our customer success organization.

Speaker Change: Young we will focus on America, and our global suite.

Speaker Change: Manav, we'll focus on EMEA, and APAC and Emmy and both will report into me because we want to continue with the successful transformation of our go to market function. We started in 2024.

Speaker Change: Marketing will actually remain with other EDA. Okay. It will now become our new Chief marketing Officer, where are we happy with either other built great pitches to sales digitized our marketing the marketing funnel is working swimmingly well and so we are very happy with the team and other will be our new chief marketing officer.

Christian Klein: The marketing funnel is working extremely well, and so we are very happy with the team, and Ada will be our new Chief Marketing Officer. That is actually it from the personnel and leadership side. Look, the past four years, I guess we have proven very much that we can turn an ambitious plan into reality. Now we are raising the bar. We are confident. We built a very strong foundation, and now it's about a continuous profitable growth journey for 2025 and beyond. With that, over to you, Dominik.

And that is actually at pharma from the personal formed a leadership side look the past four years I guess, we have gone very much that we can turn them vicious plan into reality now we are waiting the bar. We are confident we have built a very strong foundation and now it's about.

Speaker Change: Our continuous profitable close journey for 2025 and beyond with that over to you Dominic.

Dominik Asam: Thank you very much, Christian. Of course, thanks to all of you for joining us here this morning. Given it's early in the year, I would also like to wish everyone good health, peace, and success in 2025. SAP's strong finish to 2024 once again demonstrates great resilience in a year that presented new challenges and opportunities. We not only delivered on our financial commitments for the year, but also built strong momentum that positions us firmly on track to achieve our stated financial goals for 2025 and beyond. 2024 was a year of transformation, highlighted by both top and bottom line growth, as well as exceptional free cash flow strength. Our success in cloud revenue and robust non-IFRS operating profit throughout the year reflect the effectiveness of our strategic growth initiatives and our relentless focus on operational efficiency.

Speaker Change: Thanks.

Dominic: Thank you very much Christian and of course, thanks to all of you for joining US here. This morning.

Speaker Change: Give me it's early in the year I would also like to wish everyone. Good health piece.

Dominic: And success in 2025.

Dominic: Sep's strong finish to 2024 once again demonstrates great resilience in a year that presented new challenges and opportunities.

Dominic: We not only delivered on our financial commitments for the year, but also built strong momentum that positions us firmly on track to achieve our stated financial goals for 2025 and beyond.

Dominic: 2024, it was a year of transformation highlighted by both top and bottom line growth.

Dominic: As well as exceptional free cash flow strength.

Dominic: Our success in cloud revenue and robust manav risk operating profit throughout the year.

Dominic: Reflect the effectiveness of our strategic growth initiatives.

Dominic: Our relentless focus on operational efficiency.

Dominik Asam: Customers worldwide continue to choose RISE with SAP as their solution of choice for their end-to-end business transformation in large scale enterprises. While small and medium-sized companies rely on GROW with SAP to drive their growth and innovation. This is reflected in strong order intake and large cloud transactions with a volume greater than EUR 5 million, contributing 63% to our cloud order entry for the full year and an impressive 68% in Q4. Now let me provide more details around our financial highlights. CCB, Current Cloud Backlog, reached EUR 18.1 billion, up 29%. Total cloud backlog for the year grew even at 40% to EUR 63.3 billion. Cloud revenue grew 26% year-over-year, supported by cloud revenue growth of 27% in Q4, primarily driven by the strong performance of SAP Cloud ERP.

Dominic: Customers worldwide continue to choose rise with AP their solution of choice for the end to end business transformation in large scale enterprises.

Dominic: But small and medium sized companies rely on grow with S&P to drive their growth and innovation.

Dominic: This is reflected in strong order intake.

Dominic: And large cloud transactions with the volume greater than 5 million euro contributing 63% to our cloud order entry for the full year.

Dominic: And an impressive 68% in Q4.

Dominic: Now, let me provide more details around our financial highlights.

Dominic: CCP current low backlog reached $18 1 billion euros up 29%.

Dominic: Total cloud backlog for the year grew even at 40% to $63 3 billion Euro cloud.

Cloud revenue grew 26% year on year supported by cloud revenue growth of 27% in Q4.

Dominic: Primarily driven by the strong performance of cloud ERP suite.

Dominik Asam: It had an impressive year demonstrating its role as SAP's core driver of growth, with an increase of 34% in 2024, up from 33% in the prior year. SAP Cloud ERP reached 84% of total cloud revenue in Q4, underscoring its growing contribution to our success. Software licenses revenue decreased by 21%. Finally, total revenue for the full year exceeded EUR 34 billion, up 10%. This performance was mainly driven by strong growth in cloud revenue and resilience of our support business, reflecting the ongoing progress of our strategic pivot towards cloud-based solutions. Now, moving down the income statement, our non-IFRS cloud gross margin for the year continued its upward trend from last year and expanded by 1.4 percentage points to 73.3%, driving cloud gross profit up by 28%.

Dominic: It had an impressive year demonstrating its role.

Dominic: As Sap's core driver of growth.

Dominic: With an increase of 34% in 2024 up from 33% in the prior year.

Dominic: Claudia piece, we'd reached 84% of total cloud revenue in Q4.

Dominic: Underscoring its growing contribution to our success.

Dominic: Software licenses revenue decreased by 21%.

Dominic: Finally total revenue for the full year exceeded 34 billion euro up 10%.

Dominic: This performance was mainly driven by strong growth in cloud revenue and resilience of our support business.

Dominic: Reflecting the ongoing progress of our strategic pivot towards cloud based solutions now moving down the income statement.

Dominic: Our non <unk> cloud gross margin for the year.

Dominic: Continued its upward trend from last year and expanded by one four percentage points to 73, 3%.

Dominic: Driving cloud gross profit up by 28%.

Dominik Asam: In Q4, non-IFRS operating profit was 24% up. Operating profit growth in Q4 was mainly driven by the strong performance in SAP software licenses and support business, as well as disciplined execution of the 2024 transformation program. For the fiscal year, we delivered outstanding operating profit growth of 26% year-over-year, reaching EUR 8.2 billion. The IFRS effective tax rate for the full year was 34% and the non-IFRS tax rate was 32%, as previously guided. Free cash flow for the full year was down 19% to EUR 4.1 billion, exceeding the revised outlook range of EUR 3.5 to 4 billion.

Dominic: In the fourth quarter non <unk> operating profit was 24% up.

Dominic: Operating profit growth in Q4 was mainly driven by the strong performance in Sap's software licenses and support business as.

Dominic: As well as disciplined execution of the 2024 transformation program.

Dominic: For the fiscal year, we delivered outstanding operating profit growth of 26% year over year, reaching 8.2 billion euros.

Dominic: The effective tax rate for the full year was 34% in the non <unk> tax rate was 32% as previously guided.

Dominic: Free cash flow for the full year was down 19% to $4 1 billion euro exceeding the revised outlook range of three five to 4 billion Euro.

Dominik Asam: Recall that on top of payouts for restructuring of EUR 2.5 billion, we also absorbed EUR 0.2 billion of cash out for compliance related settlement matters and fully discontinued SAP triggered financing, weighing on free cash flow with another couple of hundred million EUR. On the other hand, we received a couple of hundred million EUR from customers for receivables due in 2025 already before the turn of the year, which in combination with strong profitability, enabled us to slightly exceed even the upper end of the previously guided range of EUR 3.5 to 4 billion. Non-IFRS basic earnings per share in fiscal year 2024 increased by 22% to EUR 4.53. That then brings us to the outlook, the future. As you've likely seen in the quarterly statement published earlier today, we have provided that year's outlook by now.

Dominic: Recall that on top of payouts for restructuring of 2.5 billion Euro. We also absorbed open 2 billion of cash held for compliance related settlement matters.

Dominic: And fully discontinued S. A P triggered financing weighing on free cash flow with another couple of hundred million Euro.

Dominic: On the other hand, we received a couple of hundred million euro from customers for receivables due in 'twenty to 'twenty five already before the turn of the year, which in combination with strong profitability enabled us to slightly exceed even the upper end of the previously guided range of three five to 4 billion Euro.

Dominic: Non ifas basic earnings per share in fiscal year 2024 increased by 22%.

Dominic: Two four euro 53 cents.

Dominic: But that then brings us to the outlook for the future.

Dominic: As you've likely seen the quarterly statement published earlier today, we have provided that year's outlook by now.

Dominik Asam: Four years ago, SAP outlined bold long-term goals to guide our transition toward cloud-based solutions. Today, we are proud that this year's outlook solidly aligns with the ambitions we set in 2020, demonstrating the progress we've made in executing our strategy. Before I move on, I want to provide an update on our compensation metrics and foreign exchange hedging strategy that we will adopt going forward. As of 2025, we'll enhance our compensation framework by incorporating free cash flow as a metric alongside non-IFRS operating profit. This will ensure heightened attention towards working capital and other key drivers of free cash flow. Additionally, to reduce foreign exchange related impacts on free cash flow, we have further developed our hedging strategy, in particular for the US dollar. As a reminder, we currently provide all income statement KPIs that are relevant for compensation purposes on a constant currency basis.

Dominic: Four years ago, S&P outlines bold long term goals to guide our transition towards cloud based solutions.

Dominic: Today, we are proud that this year's outlook solidly alliance with the ambitions that we set in 2020, demonstrating the progress we've made in executing our strategy.

Dominic: Before I move on I want to provide an update on our compensation metrics and foreign exchange hedging strategy that we will adopt going forward.

Dominic: As of 2025, we will enhance our compensation framework by incorporating free cash flow as a metric alongside non Io.

Dominic: <unk> operating profit.

Dominic: This will ensure a heightened attention towards working capital and other key drivers of free cash flow.

Dominic: Additionally.

Dominic: To reduce foreign exchange related impact on free cash flow.

Dominic: We have further developed our hedging strategy in particular for the U S dollar.

Dominic: As a reminder, we currently provide all income statement kpis that are relevant for compensation purposes on a constant currency basis.

Dominik Asam: Free cash flow has been and will continue to be provided on a nominal currency basis, as unlike the compensation relevant income statement KPIs, it does include the result from foreign exchange hedges. We continue implementing a hedging strategy with a lead time of up to one year to mitigate the risks from US dollar euro exchange rate fluctuations in free cash flow. By aligning hedging instruments with forecasted cash flows and maintaining a one-to-one hedge ratio wherever possible, we aim to reduce volatility and minimize the impact of exchange rate fluctuations on that free cash flow KPI.

Dominic: Free cash flow has been and will continue to be provided on a nominal currency basis is unlike the compensation relevant income statement Kpis. It does include the results from foreign exchange hedges.

Dominic: We continue implementing our hedging strategy.

Dominic: With a lead time of up to one year to mitigate the risks from U S. Dollar Euro exchange rate fluctuations in free cash flow by.

Dominic: By aligning hedging instruments with forecast of cash flows and maintaining a one to one hit ratio wherever possible, we aim to reduce volatility and minimize the impact of exchange rate fluctuations.

Dominic: On that free cash flow kpis.

Dominik Asam: This approach is by now largely completed and reflected already in the free cash flow outlook we have provided today. While the average exchange rate for 2024, and as a result, the constant currency exchange rate underlying our outlook for income statement KPIs for 2025 is 1.08, that's the euro US dollar exchange rate. The spot rate today at year-end, and even today, is at 1.04, and that's relevant for the CCB. The forward rate of our hedge portfolio for free cash flow for 2025 logically sits somewhere in the middle at around 1.06. In summary, we delivered on our key objectives for 2024, achieving strong top and bottom line results while demonstrating resilience in a dynamic environment.

Dominic: This approach is by now largely completed and reflected already in the free cash flow outlook. We have provided today. So while the average exchange rate for 2024 and as a result, the constant currency exchange rates underlying our outlook for income statement Kpis for 2025 is one.

Dominic: Oh eight that's the Euro U S dollar exchange rate the spot rate today at year end and even today is at 104 and that's relevant for the CCP.

Dominic: But the forward rate of our hedge portfolio for free cash flow for 2025 logically sits somewhere in the middle is around one six.

Dominic: In summary.

Dominic: We delivered on our key objectives for 2024, achieving strong top and bottom line results, while demonstrating resilience in a dynamic environment.

Dominik Asam: Customers continue to choose our solutions to help transform their businesses into more intelligent, sustainable enterprises, as reflected in our cloud performance across all regions of the world. With our foundations now firmly established, in 2025, we must remain vigilant in our execution to sustain growth and set the stage for long-term success for years to come. I also wanna thank all the hardworking employees we had, and both those who remain with us and also those who have moved on. We deeply appreciate their contribution to helping SAP thrive and navigate this transformational year. We remain optimistic about the opportunities ahead, confident that our commitment to innovation and disciplined operating strategy will continue to drive results. Thank you, and we will now be happy to take your questions.

Dominic: Customers continue to choose our solutions to help transform their businesses into more intelligence sustainable enterprises as reflected in our cloud performance across all regions of the world.

Dominic: With our foundation is now firmly established.

Dominic: In 2025, we must remain vigilant in our execution to sustained growth and set the stage for long term success for years to come.

Dominic: I also want to thank all the hardworking employees, we had in both those who remained with US and also those who have moved on we deeply appreciate their contribution to helping S&P thrive and navigate this transformational year.

Dominic: And we remain optimistic about the opportunities ahead confident that our commitment to innovation and disciplined operating strategy will continue to drive results.

Dominic: Thank you and we will now be happy to take your questions.

Monika Schaller: Thank you, Dominik. Thank you, Christian. With this, we are moving into the Q&A session. As pointed out before, please state your name and the outlet. I'll take the first virtual question, and then the next one goes to Heidi. Christian, you mentioned our EUR 40 billion investment in AI. We have a question from Bloomberg. Do you envision a European Stargate? Would you participate in such efforts? If so, why hasn't Europe's biggest tech company done so yet?

Dominic: Thank you Dominic. Thank you question with this we are moving into the Q&A session as pointed out before please state your name and E.

Dominic: Outlet.

Dominic: I'll take it first virtual question and then the next one goes to goes to Heidi.

Dominic: Christian you mentioned, our 40 billion investment in AI, we have a question from Bloomberg.

Dominic: In addition, the European stock eight would you participate in such efforts and if so why hasn't Europe's biggest take company done so yet.

Christian Klein: Oh, we have done a lot. We invested and, but sadly, we're investing in each country, and not in one Europe. You heard probably about Delos. Delos is not a marketing campaign. I mean, we had our best engineers and still working on a sovereign cloud for Germany. There's so much talk about sovereign clouds here, sovereign clouds there. At the end, what the BSI told us, they wanna have cloud, but completely decoupled from a global network. Now, when you're an engineer and know how cloud works, this is damn complex, and this is high, you know, requirements on data security, and rightfully. Actually, higher requirements than what we have seen in Washington for our sovereign cloud there. Now, we do almost the same in France. Italy wants the same. Spain wants the same. Yeah, but does this scale?

Dominic: They have done a lot our reinvestments and.

Dominic: But sadly we are investing in each country.

Dominic: Not in one Europe and so probably.

Dominic: Probably about Dallas.

Dominic: Telesis.

Dominic: Now the marketing campaign.

Dominic: We had our best engineers and still working on the sovereign cloud for Germany, and there's so much talk about sovereign clouds here sovereign clouds, there at the envoy the BSI told us they want to have cloud, but completely decoupled from global network now when you're an engineer Knowhow cloud works. This is complex and this is <unk>.

Dominic: Hi requirements on data secure with him rightfully.

Dominic: Rightfully actually higher requirements than what we have seen in Washington.

Dominic: For our Soma and cloud there now we do almost the same enforce.

Dominic: Italy wants to say, Spain wants the same so yeah, but does this scale no. It doesn't scale and it's also not possible because at the end you know you are competing with U S. Tech players will have forgotten also a whole market, which scales and we are benefiting of course also form a strong U S. So with regard to the.

Christian Klein: No, it doesn't scale. It's also not possible because at the end, you know, you are competing, you know, with US tech players who have, you know, also a home market which scales. We are benefiting, of course, also from a strong US. With regard to the EUR 40 billion, that is not set in stone. We wanna invest, and that is actually a clear increase. What we need is, of course, a framework where we're not asking for money. What we are asking for is a framework where it's really good for SAP to invest and take startups with us, of course. That should be not exclusive. That is a platform which really should, you know, one, and digitize public sector and private sector. We have many regulated industries who don't wanna move one to one to a public cloud.

Dominic: A $40 billion that is not set in stone, we want to invest and that is actually a clear increase but what we need is of course, a framework, where we are not asking for money, but we are asking for is a framework, where it's really good for asap to invest and take startups with us of course that should be not exclusive that is a platform.

Dominic: Form, which we just showed you know one and digitize public sector and private sector. We have many regulated industries, who don't want to move one to one to a public cloud fare, but do we now need to build the 28 Sylvan cloud here in Germany, and then you know you'll have.

Christian Klein: Fair, but do we now need to build the 28th Sovereign Cloud here in Germany? Then, you know, you have, you know, all these, you know. Every member state, even here in Germany, you know, you count Europe, then comes Germany, and then there is not one on the federal. I mean, then comes the states of Germany. When everyone orders software and interprets somehow data security rules by their own, I mean, obviously nothing can fit together. It's a pretty simple logic. That is, you know, my ask. That requires, honestly, also bold decisions. Will all your people like that when you take something away and centralize it? No. I mean, in SAP, the change was also sometimes required some tough decisions. Again, don't think so much about the election in four years. Think about what this country needs.

Dominic: All of this.

Dominic: And every member state even here in Germany. You know you can Europe, then comes Germany, and then there is not one on the federal I mean, Dan comes to states of Germany, and when everyone. All the software and integrate somehow data security rules by their own I mean, obviously nothing can fit together, it's a pretty simple logic.

Dominic: That is my ask and that's pretty quiet honestly also Paul decisions will all your people like that when you take something away and centralize it no I mean and S&P to change must also sometimes sneak via some tough decisions, but again don't think so much about the election in four years think about what this country needs.

Christian Klein: This country and this Europe needs more Europe, more federal with regard to digitization. The time to act is really now. We are investing, but we have choice, and we wanna invest further. Again, not only we, everyone in the private sector needs this framework.

Speaker Change: Could this country indices co op needs more Europe.

Speaker Change: More favorable.

Speaker Change: With regard to Digitization, but time to act is really now and we are investing but we have choice and we want to invest further but again not only we everyone on the private sector needs. This framework.

Monika Schaller: Thank you. Heidi Rohde, Börsen-Zeitung.

Speaker Change: Thank you.

Speaker Change: That's helpful.

Heidi Rohde: Hi, good morning. Just, if you look at the numbers, very impressive numbers. Still the share seems to take a break or even a small dip. What do you make out of it? Is this a reaction to yesterday's news, when with this getting in doubt about the perspective of the western tech industry regarding to AI progress? What is your view on that? The second question, if I may, is about the management changes you've mentioned. You have a new CTO who is obviously a visionary, as I understood, but he's still not member of the top management, but part of the-

Speaker Change: Hi, good morning.

Speaker Change: I'm just if you look at the numbers they are impressive numbers.

Speaker Change: And it seems to take a break.

Speaker Change: Even if more deep so what do you make out of it is in reaction to yesterday's news.

Speaker Change: When with this.

Speaker Change: I'm getting in doubt about the prospective off the yes, the western tech industry regarding to AI progress.

Speaker Change: One if you are you on that and the second question. If I may is about.

Speaker Change: About the management changes you mentioned you have a new CTO, who is obviously visionary, yes, I understood, but he is still not remember off the.

Speaker Change: Top management, but part of the broader consultancy team as I understood. So does that mean that in a company founded the Hasso plattner. The CTO is no longer so important.

Heidi Rohde: Broader consultancy team, as I understood. Does that mean that in a company founded by Hasso Plattner, the CTO is no longer so important?

Christian Klein: Yeah, Hasso. Yeah, he would be happy if he would be still in the supervisory board. He would be happy with the solution we found. Let me quickly illustrate why. I mean, first talking about the news yesterday. I mean, yeah, of course, our share developed really well. Dominik always reminds me rightfully, you know, what happens today, you know, is of course important, but even more important is that we're delivering on our promises mid and long term. What we have guided today is a, in my eyes, a very ambitious outlook in a macroeconomic environment which is not easy. When you look at the kind of growth rates, I would say you can need to look really a long time, and you will not find a SaaS company with similar growth rates to SAP.

Speaker Change: Uh huh.

Speaker Change: He he he would be happy if he would be still in the supervisory board he would be happy with the solution. We've found in let me quickly illustrate why I mean first talking about the news yesterday I mean.

Speaker Change: Yeah of course, our share developed really well and.

Speaker Change: Dominique always reminds me why truly.

Speaker Change: What happens today is of course important but even more important is that we are delivering on our promises mid and long term and what we have guided today.

Speaker Change: My eyes, very ambitious outlook in a macroeconomic environment, which is not easy and when you look at the kind of close rates I would say you can need to look really long time, and you will not find a SaaS company with similar close rates than S&P now yesterday's news.

Christian Klein: Now, yesterday's news was also around, and there is a big debate also here in Germany. Do we not miss a hardware company or compute, you know, who is really playing on AI infrastructure? Yesterday actually was the day where someone showed that AI infrastructure will scale. It will become commodity. It's of course very important because without this infrastructure, you cannot run the GenAI modules. But, you know, more and more players entering the markets, and there will be not one large language model. So yesterday was actually a good day for SAP because it proved what we always said. We invest our R&D money into building the strongest AI foundations for businesses. What businesses need is not only unstructured content. They need the business data. They need agents who talk to each other semantically.

Speaker Change: Also wound and that's a big debate also in Germany, and do we not Miss a hardware company or compute who is really playing on AI infrastructure.

Speaker Change: Yesterday actually what's the day, where we showed with someone showed that AI infrastructure will scale. It will become commodity it's of course very important because without this infrastructure you cannot run the Chennai, Montreal, but you know more and more players and knowing the markets and there will be not one large.

Speaker Change: Which model so yesterday was actually a good day for S&P because it proved what we always said, we invest our R&D money into building the strongest AI foundations for businesses and what businesses need is not only unstructured content they need the business data they need agents, who talk to each other semantically.

Christian Klein: That is what SAP is about. Last but not least, not every company, also not here, the German Mittelstand, has actually hundreds of data scientists sitting around and making this AI work. Also by embedding AI into our software and delivering out of the box, that's what you can't do in on-prem, is actually 100% the right strategy. With regard to Philipp, look, Philipp even before he became the head of AI of SAP had a really impressive career. He was very fundamental in making sure that our cloud Business Suite is the suite we are looking at today. It's complex things. We are running complex business processes, and Philipp was one of the masterminds behind, you know, making integration work, making extensibility work, and giving us the strong foundation. He ended up in the AI role.

Speaker Change: That is what S&P is about and last but not least not every company also Nokia to German mittelstand has actually hundreds of data scientists sitting alone and making you say I work. So also by embedding AI into our software and delivering out of the box. That's what your comp doing on Prem is actually 100% of the wide strategy and then.

Speaker Change: With regard to Phillip and look.

Speaker Change: Phillip even before he became the head of AI of SCP.

Speaker Change: It had a really impressive career he was very fundamental in making sure that our cloud business leaders to suite. We are looking at today. It's complex things, we're wanting complex business processes and fill it was one of the mastermind behind making integration work, making extensibility work and giving us the swung fountain.

Speaker Change: <unk>.

Speaker Change: He and up into the eyeball and now why did we say CTO will still work very closely together with the CEO and will become part of the extended bought which is a very crucial function, which by the way a lot of U S. Hunger tech companies have as well.

Christian Klein: Now why did we say CTO will still work very closely together with the CEO and will become part of the extended board, which is a very crucial function. Which by the way, a lot of US tech companies have as well. Philipp will be now involved also in a lot of decisions around how much do we bet on quantum. How much do we bet on certain other technology innovations which are going to hit us in three to five years. He will be involved in decisions on, do we invest into a startup, into a unicorn. He will be involved into M&A.

Speaker Change: Philip will be now involved also in a lot of decisions around how much do we bet on quantum how much do we bet on sub not a technology innovations, which are going to hit us in suite to five years. He will be involved in decisions on do we invest into a startup into a unicorn he.

Speaker Change: We'll be involved into M&A and all of these topics obviously require close collaborations with the CEO and that's why we said Hey, why do we want to break something which worked so well on AI and that's how we then came to this set up and we will have a very powerful and empower CTO and even more important we have found.

Christian Klein: All of these topics obviously require a close collaboration with the CEO, and that's why we said, "Hey, why do we want to break something which worked so well on AI?" That's how we then, you know, came to this setup. We will have a very powerful and empowered CTO, and even more important, we have found the right candidate in Philipp.

Speaker Change: White candidate in Finland.

Monika Schaller: Thank you. I will take a question from the virtual audience before we continue with Angela Meyer and then Reuters. Dominik, this one is for you, and it's about Current Cloud Backlog. Dominik, the question is, your release says that the Current Cloud Backlog will grow slower this year than last. Why?

Dominic: Thank you I will take a question from the virtual audience before we continue this angle on Maya and writers Dominic. This one is for you and it's about current cloud backlog and Dominique. The question is you read the release says that the current cloud backlog will grow slower this year than last life.

Dominik Asam: I mean, first of all, there is a more technical effect, which is we have recently consolidated an acquisition called WalkMe, which added a good percentage point to Current Cloud Backlog. Just mathematically, once you then wait for more than a year in the bases you compare to, it's also added, and then that kind of increment is falling away. The other thing is, of course, the base is growing bigger and bigger, and 29% is extremely high number. We need a lower rate to still sustain acceleration in total revenue growth because the cloud revenues are currently below CCB. We have some room to sustain cloud revenue growth. As I mentioned in my introductory remarks, the question, what is really driving cloud revenue growth is all about the SAP Cloud ERP.

Dominic: I mean first of all there's a more technical effect, which is you have recently consolidated an acquisition called walk me, which added two percentage points to come to our backlog and just mathematically. Once you then wait for more than a year in the base as you compare to its also added and then that's kind of increment is falling way.

Dominic: The other thing is of course, the basis growing bigger and bigger and 29% is extremely high number.

Dominic: We need.

Dominic: A lower rate to still sustained acceleration in total revenue growth because the cloud revenues.

Dominic: Currently below CCP. So we have some room to sustain cloud revenue growth and as I mentioned in my introductory remarks the Christian.

Dominic: What is really driving cloud revenue growth is all about the cloud ERP suite, 84% of the revenues at.

Dominik Asam: 84% of the revenues, at 30%+ growth rates for 12 quarters in a row, we think that this will sustain itself. From that perspective, I think these are extremely strong numbers and underpin the commitments we've made, to see acceleration in total revenue growth in both 2026 and 2027.

Dominic: At 30% plus growth rates for 12 quarters in a row, we think that this will sustain itself. So from that perspective I think these are extremely strong numbers and underpin the commitments we've made to see acceleration in total revenue growth in both 2006 and 2027.

Christian Klein: Maybe one point to add. Look, also, looking at our sales numbers, I mean, 2024 was a record year. I would say the best in SAP's history. Now, when you are setting targets, I mean, Dominik and I discussed also about, you know, how aggressive do we also want to plan the numbers? Customers bought a lot of software. Still, there is enormous potential in our install base. Only 40%, you know, so far have started the journey. The others will follow. The pipeline is really good. Of course, you also want to focus now on the customers who invested into a software. It's also about building a healthy business. We also said in the target setting, let's also focus on adoption because we are here for the mid and the long term.

Dominic: And maybe one point to add.

Dominic: Look also looking at our sales numbers.

Dominic: 2024 was a record year.

I would say that.

Dominic: The best in Sap's history.

Speaker Change: Now when you are setting targets I mean, Dominic and I discussed also about.

Dominic: How aggressive do we also want to plan the numbers.

Dominic: And customers bought a lot of software still days enormous potential in our installed base only 40%.

Dominic: So far have started to cherny the audits will follow the pipeline is really good but of course.

Dominic: You also one of focus now on the customers we invested into a software. It's also about building a healthy business. So we also set in the Taco setting. That's also a focus on adoption because we are here for the mid and the long term it's always easy.

Christian Klein: It's always, you know, easy to preload invest and to stimulate further sales, but I guess it's also important in the cloud that we found the right balance. Now the base is becoming bigger and bigger, yeah? So, you know, one plus one is two, you know, it's a high growth rate, but when you have a million plus a million, the growth rate becomes, you know, a bit more challenging. That's the thing about percentage growth rates. I would say it's also about the balance and also signal to our teams on the go-to-market side, yes, we wanna win more customers and we are winning. Our win rates are way up. But what is also very important is adoption, especially around AI. When we walk into Sapphire, I wanna see these customers on stage. I don't only wanna feed into a hype.

Dominic: E C to preload invest and to stimulate further sales, but I guess, it's also important in the cloud that we found the right balance and now the base is becoming bigger and bigger.

Dominic: So.

Dominic: One plus one is two is it's a high close rate, but when you have a million plus 1 million to close way it becomes a bit more challenging that's the thing about percentage growth rates and I would say, it's also about the balance and also seeking out to our teams on the go to market side, Yes, we want to win more customers and we are winning are at.

Dominic: When weights are way up but what is also very important is adoption, especially a wound AI when we walk into Sapphire I want to see these customers on stage I don't only want to feed into a hi, I wanted to see adoption and that was also a little bit about the target setting and of course, if we can pull forward.

Christian Klein: I wanna see adoption. That was also a little bit about the target setting. Of course, if we can prove ourselves that we can do more, of course, we can do more. I would say this was a reasonable target, an ambitious target, especially when you also look at our competition.

Dominic: Cells that we can do more of course, we can do more but I would say this was a reasonable target and ambitious target, especially when you also look at our competition.

Monika Schaller: Thank you. Angela Meyer.

Dominic: Thank you.

Dominic: <unk>.

Angela Meyer: Angela Meyer, The Market NZZ. Two questions, if you allow, first, on your, could you give us your view on your M&A strategies, or your liquidity is growing, your valuation is growing, so maybe could be time for bigger deals, or do you have any gap in your product portfolio? This is first question. The second, in the analyst call, you said that you have offered transformation credits in Q4 to convince all the big customers. What exactly are these transformation credits, and did you give more of them in Q4 than in the previous quarters? Thank you.

Dominic:

Dominic: Market.

Dominic: Two questions.

Dominic: Could you give us your view on the M&A side the key.

Dominic: Even though your liquidity is growing nominations Guangzhou maybe.

Dominic: Could be time for a bigger do you. So do you have any gap.

Dominic: Could formula and so.

Dominic: Last question and the second and then lets call you said that you have offered transformation credits.

Dominic: In Q4, two to convince all the big customer so what exactly is it transformation credits and did you give more of them in Q4 than in the previous quarter.

Christian Klein: Yeah. I mean, last question first. Every tech company, and I really underscore every tech company, works with migration credits. It's, you know, actually, when you look at it's also way more healthy than to give discounts. Because, you know, when you can hold up your price, this is where you see recurring revenues for the long term. That's why every tech company also uses migration credits more as an incentive, yeah, to actually convince customers to move ahead. There was actually not a big change, you know, compared to previous quarters. Obviously, Q4 is bigger from a volume perspective. I mean, that is clear. It was now not actually a big, you know, uptick.

Yeah, I mean last question first every tech company and I really underscore every tech company works with my equation credits. It's you know and actually when you look at it it's all to weigh more healthy.

Dominic: Then to give discounts because.

And you can hold up your price. This is where you will see coming revenues for the long term and so that's why every Tech company also uses my question credits more as an incentive to actually convince customers to move ahead.

Dominic: And that was actually not a big change compared to previous quarters. Obviously Q4 is pick up from a volume perspective, I mean that is clear, but it was now not actually a big uptick now price is actually in.

Christian Klein: Now, prices actually, and contracts, and multiples on, you know, customers actually pay us this much maintenance and pay us this much in the cloud actually develop very healthy. That is also, for me, the most important indicator for the long term, yeah, that we have really a healthy development in our customer base when it comes to pricing. But of course, customers challenge us. I mean, they are not buying these AI use cases lightly. They wanna see value. There we also said, "Hey, we wanna have a consumption-based and outcome-based commercial model to prove to our customers that we are doing the right thing." On the commercial side, actually, we are very happy with the progress and the trend we have seen in the last year, actually. Yeah.

Dominic: And multiples on customer actually payoffs this much maintenance and pay us this much in the cloud actually developed very healthy and that is also for me. The most important indicator for the long term and that we have really a healthy development.

Dominic: In our customer base when it comes to pricing, but of course customers challenge us I mean, they are not buying this AI use case slightly they want to see value and there. We also said hey, we want to have a consumption based and outcome based commercial module to prove our customers that we are doing the wide thing. So on the commercial side actually we are we are.

Dominic: Are we happy with the poll question the trend we have seen in the last year actually yeah.

Monika Schaller: M&A.

Christian Klein: M&A. Look, M&A, the good piece is looking at the pipeline for this year and looking at the momentum. Now we are launching in February 13, a big thing, a new offering, which will also further drive organic growth. There is no need yet for us to acquire revenue to do any kind of moves just to keep up our accelerated total revenue growth. This is what we will do organically. Now, can we rule out acquisitions like we did with LeanIX, with WalkMe? If it fits really well and it serves our customers' needs, and actually it fills a wide space in the portfolio, we wouldn't rule it out, but there is no immediate need now to buy something. Think about it.

Dominic: M&A look M&A.

Dominic: The good piece is looking at the pipeline for this year and looking at the momentum now we are launching in February 13.

Dominic: A big thing and new offering which will also further drive organic growth. So there is no need yet fast to acquire a avenue to do any kind of moves to tough to keep up our accelerated total revenue growth. This is what we will do organically now can we roll out <unk>.

Dominic: <unk> like we did with <unk> with want me, if it fits really well.

Dominic: And it serves our customers' needs and actually it filled a white space in the portfolio, we wouldn't rule it out but there is no immediate need now to buy something think about it.

Christian Klein: Everyone also ask us, Why you are not acquiring, you know, an AI company, large language models? Yesterday was a good day, maybe, to show that we did well not to do it, but rather build on our organic platform. I guess this is always, you know, the balance what you have to strike. We don't wanna just acquire for, you know, further accelerating our growth. The pipeline is good enough, strong enough.

Dominic: Everyone also ask US why you are not acquiring you know an AI company large language modules.

Dominic: Yesterday.

Dominic: Well, it's a good day may be to show that we did well not to do it but rather build on our organic platform and I guess this is always you know that the balance what you have to swipe, we don't want to just take while for further accelerating our quotes the pipeline is good enough strong enough.

Monika Schaller: Thank you. Reuters.

Dominic: Thank you.

Hakan Ersen: Hakan Ersen from Reuters. Going back to the DeepSeek, did you have a chance to assess what the AI can achieve? Would you incorporate it into SAP, given that it's a Chinese company and there's always issues with data security? A quick question. You mentioned that 2024 was a record year for SAP. Did you mean that just in regard to the sales or overall?

Dominic: How can it hasnt underwriters and going back to the to the deep seek and did you have a chance to assess what the a I.

Dominic: Can achieve and.

Dominic: Would you incorporated into U S. A P. Given that it's a Chinese company and there's always issues with data security.

Dominic: A quick question you mentioned that that 2024 was a record year for our SAP did you did you mean that just oh.

Dominic: In regard to the sales or overall.

Christian Klein: Yeah, I mean, 2024 record year. I mean, first of all, look at what we are coming from, and we should never take it for granted that this company does such a turnaround in just four years. I would say no matter if you now look at order entry, revenue, and health of business. I really underscore health of business. The renewal rates are way better, way better than four years ago. Customer satisfaction, I mean, these are all the indicators where I can see this was really a fantastic year. Yes, in terms of numbers and order entry and everything, it was definitely a record year. Now, with regard to DeepSeek, look, we, of course, also have in China, for China, various technology players. I mean, all the multinationals we want to still do business in China.

Dominic: In 2024, where car T. I mean first of all I mean look at what we are coming from and we should never take it climbed at that this company does such a turnaround in just four years and.

Dominic: And I would say no matter. If you now look at order entry Avenue health of business are really underscore health of business. So then you'd awaits a way better way better than four years ago, and so customer satisfaction. I mean these are all the indicators are where I can see and this was really a.

And test a year and yes in terms of numbers in order entry and everything it was definitely a record year now with regard to deep seek Luke.

Dominic: Luke.

Dominic: We of course also have in China for China.

Dominic: Various technology players I mean, all the multinationals, we won still do business in China and of course, we also using local technology in China for China.

Christian Klein: Of course, we are also using local technology in China for China. We don't use Chinese technology always outside of China, and that is also customer's choice, honestly. We want, definitely wanna always adhere to the several Sovereign Cloud standards, where we have too many in Europe. You know, we wanna adhere to that because, you know, we wanna respect our customers' data, their security requirements, et cetera. Yes, but oftentimes we use the Chinese technology in China. On the large language model side, performance-wise, this model is great. We have tested it as well. Philipp and team have tested it as we test many other models. Just to give you a European example, Mistral AI also does a fantastic job. Their model is also great.

Dominic: We don't use Chinese technology always outside of China and that is also customers choice honestly.

Dominic: But we want definitely won't always adhere to the servers to the several sovereign cloud stand up when we have too many in Europe, but we want to adhere to that because we want to respect our customers stayed at the security requirements et cetera, and so yes, but oftentimes we use the Chinese technology in China, and so and.

Dominic: On the large language module side performance wise this Montreal, it's great.

Dominic: We have tested it as well Philip and team have tested it as we test many other mushrooms, but just to give you a European example, Mr. Les I also does a fantastic job that much release also equate I mean, not yet at the costs, but they are serving different use cases, so you know.

Christian Klein: I mean, not yet at the cost, but they are serving different use cases. You know, we are testing all of these modules, and we are using them in different use cases. There is not one LLM fitting all of our manufacturing use cases or finance use cases, HR use cases. We are agnostic. That yesterday, I guess, was really a day where it has been proven that this is the right strategy.

Dominic: We are testing all of these materials and we are using them.

Dominic: In different use case does not one LLM fitting all of our manufacturing use cases of finance. He was co HR use cases, so we're agnostic on that yesterday, I guess, what's really day, where it has been proven that this is the right strategy.

Monika Schaller: Thank you. Trying to get the order right. Yes.

Dominic: Thank you trying to get the order right.

Dominic: Yes.

[Journalist] (Deutsche Presse-Agentur): Yes. Robin, Deutsche Presse-Agentur. Two questions. Hope that's okay. First one, I mean, summarizing what you just said, almost everything looks pretty good. However, what potential risks do you see that could negatively impact your business this year? I don't know, looking at the global economy or political changes in the US or also in Germany. The second question regarding your restructuring program. This should be completed at the beginning of this year, it was said. In Germany, around 3,500 employees left the company in this context, but up to 10,000 jobs worldwide are said to be affected. What is the current status here? So how many employees have now left the company in this context?

[Analyst] (Deutsche Presse-Agentur): Yes. Robin, Deutsche Presse-Agentur. Two questions. Hope that's okay. First one, I mean, summarizing what you just said, almost everything looks pretty good. However, what potential risks do you see that could negatively impact your business this year? I don't know, looking at the global economy or political changes in the US or also in Germany. The second question regarding your restructuring program. This should be completed at the beginning of this year, it was said. In Germany, around 3,500 employees left the company in this context, but up to 10,000 jobs worldwide are said to be affected. What is the current status here? So how many employees have now left the company in this context?

Dominic: Yes.

Dominic: It does go into place on too.

Dominic: Two questions I hope that's okay.

Dominic: First one I mean summarizing what you just said.

Dominic: Almost everything looks pretty good.

Dominic: However, what potential risks do you see that could negatively impact your business.

Dominic: This year I don't know looking at the.

Dominic: Global economy or political changes in the U S or also in Germany.

Dominic: And the second question regarding your restructuring broke ground.

Dominic: This should be completed at the beginning of this year was that.

Dominic: In Germany around <unk> 500 employees left the company in this context, but up to 10000 shops worldwide.

Dominic: So that will be affected.

Dominic: What is the current status here. So how many employees have now left the company in this context on in general are looking at your structuring broke them.

[Journalist] (Deutsche Presse-Agentur): In general, looking at your restructuring programs, was that it for now?

[Analyst] (Deutsche Presse-Agentur): In general, looking at your restructuring programs, was that it for now?

Dominic: Once that it for now.

Christian Klein: Yeah. Coming to your first question, Robin, first, I mean the risks. Obviously, I mean, when I look four years back, we delivered on our promise, but this promise included a Russian market, which was pretty sizable. We couldn't really foresee how COVID, you know, will impact us, and still we delivered. Looking at the geopolitics right now, I mean, a lot of discussion around tariffs and other things. It's hard to predict. But the good piece is, in this world, SAP is super resilient. We have a very high recurring revenue share. We have a very strong customer base who is loyal, who actually, you know, use our products. That is actually a good foundation to have. Obviously, when you look at risks, we want a strong German economy.

Dominic: Yeah.

Dominic: Coming.

Dominic: To your first question Robin first I mean.

Dominic: I mean, obviously I mean, when I look four years back we delivered on our promise, but this promise included the Washington market, which was pretty sizable.

Dominic: We couldnt really foreseeable.

Dominic: Covid will impact us and still be delivered.

And I mean looking at to geopolitics why now I mean, a lot of discussion around tariffs and other things I mean, it's hard to predict.

Dominic: But the good pieces in this world.

Dominic: Super resilient I mean, we have a very high recurring revenue share we have a very strong customer base, who is loyal who actually use our product and so that is actually a good foundation to have I mean, obviously when you look at risks I mean, we wanted to strong German economy, I mean, when Germany is strong.

Christian Klein: I mean, when Germany is strong, it also is to the benefit of SAP. We wanna, you know, see this economy here thriving. But the same is true, you know, for some other markets we are playing in. Of course, you cannot always predict what will happen, but we feel very safe and bold about the outlook we have given. Your second question, sorry, Robin, was about?

Dominic: It also adds to the benefit of a S. A P. We want to see this economy is thriving but the same is tool you know form some other markets. We are playing and then of course, you cannot always predict what will happen, but we feel very safe in bold about the outlook.

Dominic: We have we have forgiven.

Dominic: And your second question, sorry, Robin was about.

Monika Schaller: Mm-hmm.

Christian Klein: Transformational restructuring. Yeah. Some people left. We added 9,000 new jobs. Yes, the last wave of the restructuring will happen now in Q1. This program is finished. We are finished for the year. Now, look at all of our competitors. I mean, sometimes here in Germany, we are making up that, "Oh, there is restructuring." They restructure every year. Every year. While I'm not saying, you know, we will restructure again this year, for this year we are then done after Q1. I mean, can you rule it out? No. The tech sector is moving so fast. I mean, at the end of the day, you need to stay competitive, and sometimes you have to make these very tough calls. For the time being, I don't see any further restructuring on the horizon.

Dominic: For information on restructuring.

Dominic: Yeah. So.

Dominic: Some people left we added 9000, new chops, yes, the last wave after restructuring will happen now in Q1 than this program is finished we are finished for the year.

Dominic: No.

Look at all of our competitors I mean, sometimes here in Germany, we are making up that Oh days restructuring.

Dominic: They restructure every year.

Dominic: Every year.

Dominic: And so while I'm not saying you know we will restructure again this year for this year. We have done done after Q1, I mean can you rule it out now, but the tech sector is moving so fast I mean at the end of the day you need to stay competitive competitive and sometimes you have to make this very tough calls for the time being I don't see any firm.

Dominic: Our restructuring onto whole wisely, but I also want to say if in 1234 years, whatever S&P needs. We will make this decision and again it's of course.

Christian Klein: I also wanna say, if in 1, 2, 3, 4 years, whatever SAP needs, we will make these decisions. Again, it's of course never easy to make these decisions, but we are also doing this for the 100,000 employees who are staying. They need to work for a winning company. They need to work for SAP, who is also in for the mid and the long term. While these measures are never easy, sometimes they are necessary. For this year, after Q1, we are done. Yes.

Dominic: Never easy to make this decisions, but we're also doing this for the 100000 employees, who are saying they need to work for a winning company they need to work for as C. P was in also for the mid and the long term. So while these measures are never easy sometimes stay unnecessarily put for D. C. After Q1.

Dominic: We aren't done yes.

Monika Schaller: Thank you. We have three more questions in the room. Please stick to one question with regards to time. If we manage, I'll get you in. Capital, FT, and then F.A.Z., and WiWo if we manage.

Dominic: We have three more questions in the room. Please stick to one question with regards to time, if we manage I'll get you mean capital S. T and then if upset and we bought it for a minute.

Christian Klein: Maybe also shorter answers.

Dominic: Maybe also short answer.

Monika Schaller: I would never say this.

Dominic: Would never status.

Christian Klein: You can.

Dominic: Okay.

Hanna Speicher: Okay. Good morning. Hanna Speicher from Capital. I believe you have a small anniversary today. It's your fifth annual press conference as, like, the only CEO.

Dominic: Okay. Good morning, Hello staff copy time, I got some I believe.

Dominic: Small anniversary today, it's yes, yes.

Our press conference that's like the only C O M. You've talked a lot today about your team and the progress you've done can you talk a little bit about how you look back on your personal performance and they were undertaken.

Hanna Speicher: You talked a lot today about your team and the progress you've done. Can you talk a little bit about how you look back on your personal performance and the road taken?

Christian Klein: Personally, that's a hard question. I would rather prefer others to judge it. Look, anniversaries, yeah. Actually, it always reminds me about the birthday of my daughter. She will hear that for her lifelong, that this was the night where I had to escape from the hospital and come here for this press conference. But again, I would say personally, you have to always, you know, challenge yourself. I mean, I'm also not the type of person who sits here and says, "Hey, great year. Now let's lean back." I mean, as a CEO sometimes, but also I would say as the CFO, you need to be almost paranoid a bit about, you know, what happens in the world, what technological innovations can come. You already, as great this day is, you're already thinking ahead about, you know, what has to come in 12, 24 months.

Dominic: Personally that's a hard question I would rather prefer to touch it look.

Dominic: Anniversaries, Yeah actually it's always reminds me about first day of my daughter, she will hear that for her life long debt. This was Tonight, where I had to escape home the hospital and come here for this press conference.

Dominic: But again.

Dominic: I would say.

Dominic: Personally youll have to always challenge yourself I mean, I'm also not the type of person who sits here and says hey, great year.

Dominic: Now, let's lean back I mean, as the C O, sometimes but also I would say as the CFO at <unk>.

Dominic: Need to be almost paranoid a bit about what happens in the world with technical innovations can come you already created stay is you're already thinking ahead about you know what has to come in 12 24 months that is my job and of course, there is a ton of pressure.

Christian Klein: That is my job. Of course, there is a ton of pressure, but you have to deliver. This is what we aim for. Personally, I have to say, yes, I learned my lessons. I mean, you know, you always personally also developing yourself. I have a lot of support from my team. Without that, it would be impossible. No matter if it's, you know, think about how much time you spend. Your day has 24 hours, and you need some time for yourself, for the family, for doing sports. It's very important. Then how much time do you spend internally? How much time do you spend with research, with universities, with customers, and so on? So you personally develop. So that was a journey also for myself. You know, this journey's never ended.

Dominic: But do you have to deliver and this is what we have informed personally I have to say, yes, I learned my lesson.

Dominic: I know you always personally also developing yourself.

Dominic: I have a lot of support from my team without that it would be impossible.

Dominic: But no matter if it's you know about.

Dominic: Think about how much time, you spend you get they have 24 hours and the.

If you need some time for yourself for the family for doing spot. It's very important but then how much time do you spend internally how much time do you spend with research with universities with customers and so on and so you personally developed and so that was a journey also for myself and discharged is never ended I mean I'd tell this also to our employees the momo.

Christian Klein: I mean, I tell this also to our employees. The moment we rest and be satisfied and, you know, just celebrate each other, how great we are, at that moment, we are running a big risk. That is the kind of mentality what we have to have, especially in this sector, who's so moving so fast. Yeah. These bold decisions. Look, this is sometimes. I had to learn that as well. You're doing decisions, and you know, sometimes the media won't like it, people won't like it, customers. I even would say, when you look now at the customers to say innovation only, you know, AI in the cloud, I mean, trust me, it's also to the best for our customers.

Dominic: And we less than be satisfied and you know just celebrated sada how great. We are at that moment, we are wanting a big risk.

Dominic: And so that is the kind of mentality, but we what we have to have especially in this sector, whose so moving so fast and then dispose decisions Luke.

Dominic: This is sometimes I had to learn that as well youre doing decisions and you know sometimes to meet you won't like it people won't lag at customers.

Dominic: But even would say when you look now at the customers to say.

Dominic: Ovation only.

Dominic: AI in the cloud.

Speaker Change: Trust me, it's also to the best for our customers.

Christian Klein: Of course, some customers said, "Yeah, but why can I not have it singular for myself?" It won't work. It won't create the value. We also need to move forward as a company and innovate where everyone is innovating in the cloud. All the tech players in the US made this shift for some time. You need to strike the balance, and you have to make those decisions. These decisions are never easy. I had to learn also, honestly, how to make these decisions and stay resilient and stay course, which is never easy when you have to always this quarterly pressure. I'm not alone in this.

Speaker Change: Some customer set there, but why can I not to have it.

Speaker Change: <unk> from myself it won't work it wont create the value and we also need to move forward as a company and in a way where everyone is innovating in the cloud all of the tech players in the U S made this shift for some time and so you need to strike the balance and you have to make those decisions and these decisions are never easy and I had to learn also honestly how to make this too.

Speaker Change: Decisions and stay resilient and stay cost, which is never easy when you have to all the always this quarterly pressure, but I'm not alone in this.

Monika Schaller: Thank you. FT.

Speaker Change: Thank you <unk>.

Florian Müller: Florian Müller, FT. Can you share a little bit more on why you decided to create this extended board? Can you maybe also share some information on the departure of Jürgen Müller? Are there any updates from the company side?

Speaker Change: Can you share a little bit the Trulia molesky can you share a little bit more on why you decided to create this extended board can you may be also share some information on the departure of Humana other any updates from the company side.

Christian Klein: Yeah. The extended board, I mean, of course, we are also looking at, together with the supervisory board, first of all, I mean, looking at, setups of other tech companies and, you know, my ask to the supervisory board and of course, talking to Dominik and the team, Gina, was, "Hey, our day has 24 hours, and, you know, this is, in the meantime, a very sizable company, and we need scale." Then when you're looking at the extended board, you know, it's for us now a great place where Ada comes in for marketing, then Beck comes in from, you know, from the US talking about SuccessFactors end to end with our two go-to-market chief revenue officers. We will discuss a lot of portfolio topics, M&A, investments in research.

Speaker Change: Yeah.

Speaker Change:

Speaker Change: They extended bought I mean of course, we are also looking at together with the supervisory Board first of all I mean looking at setups.

Speaker Change: Setups of other tech companies and my asks to the supervisory board and of course talking to Dominican to team.

Speaker Change: Ciena was eight hour day has 24 hours and.

Speaker Change: This is in the meantime, a very sizable company and we need scale.

Speaker Change: And and then when Youre looking at the extended board.

Speaker Change: It's fast now equate place where that comes in for marketing Dan Beck comes in from you know from the U S talking about Successfactors and to end with our two go to market Chief revenue officers, and we will discuss a lot of portfolio topics M&A.

Christian Klein: It's very good to have this diverse team together and making decisions. It allows us as an executive board to scale because you are reaching a certain point your limit. This extended board is really allowing us to scale and make faster decisions. On Jürgen, I have to say, you know, the supervisory board, we made a decision, and now it's actually you know, you have to reach out to Jürgen or someone else to see where we stand. I'm busy with running this company.

Speaker Change: Investments in research and it's very good to have this diverse team together and making decisions and also it allows us as an executive board to scale because you are reaching at certain point you limit in this extended bought.

Speaker Change: Really, allowing us to scale and make faster decisions.

Speaker Change: On Europe I have to say you know I'm. The supervisory board, we made a decision and now it's actually you have to reach out to you or someone else to see where we stand.

Speaker Change: <unk> busy with wanting this company.

Monika Schaller: With that, Herr Freitag.

Speaker Change: So with that.

Speaker Change: Doug.

Speaker Change: Okay.

Bernd Freitag: Bernd Freitag, Frankfurter Allgemeine. Could you give us some insights about your talks with the Deutsche Börse concerning the weight in the DAX? Will you stay in Germany if the Börse doesn't change their rules?

Speaker Change: Okay.

Speaker Change: Hum.

Speaker Change: One for the other minor.

Speaker Change: Could you give us some insights about your talks with the Deutsche buzzer concerning the weight in the.

Speaker Change: Dax.

Speaker Change: Would you stay in Germany that doesn't it doesn't change the rules.

Christian Klein: Yeah. It's a little bit of a pity that we cannot outgrow the DAX. There was a cap at 10%. We were successfully negotiating that up to 15%. Now we cannot pass that cap again. I think it's simply a result of the digital economy taking a larger and larger share of the economy at large. If you look at the top 10 market caps on the planet, in 1980, there was only one, which was IBM in technology. In 2000 there were four. It was Microsoft, still around today in that bucket, Intel, Cisco, and one European company called Nokia. Today there's actually 8 if you include Tesla, because it's also a technology company.

Speaker Change: It's a little bit of a pity that we kind of outgrow the ducks.

Speaker Change: There was a cap at 10% we were successful in negotiating that up to 15%.

Speaker Change: No we can hold some of that gap that that kept again.

Speaker Change: I think it's simply.

Speaker Change: The result of the digital economy, taking a larger and larger share of.

Speaker Change: The economy at large if you look at the top 10 market caps on the planet and 1980, there was only one which was IBM and technology in 2000, there were four it was Microsoft still around today in that bucket.

Speaker Change: Intel Cisco and one European company called Nokia.

Speaker Change: And today, there's actually eight if you include Tesla because it's also technology company. So you'll see how the digital economy is really taking a larger larger Sharon we don't find it very intuitive that you then cup kept that digital technology only because in one country. It's concentrated on one company in this case, it's a P.

Christian Klein: You see how the digital economy is really taking a larger and larger share, and we don't find it very intuitive that you then cap that digital technology only because in one country it's concentrated on one company, in this case SAP. The good news is our strong efforts to attract US investors are bearing fruit. We spend more time there, and there is a huge demand in the US in terms of capital to be allocated. If you think about the 3 trillion being invested in the biggest tech companies, if you only kind of are able to attract a tiny share of that more than offsets that point of view. In total, I think it's more about the general regulatory environment. How conducive is the regulation in Europe for a company like SAP?

But the good news is our strong efforts to attract you as investors are bearing fruit, we spent more time there.

Speaker Change: And there is a huge demand in the U S. In terms of capital to be allocated if you think about the 3000 billions being invested in the biggest tech companies. If you only kind of are able to attract the tiny show that that more than offsets that point of view, but in total I think it's more about the general regulatory environment, how conducive as the regulation.

In Europe for a company like S&P.

Christian Klein: We just mentioned one topic like that cap in the DAX, and there are many other things that hopefully the wake-up call we receive from United States will resonate and then give us some opportunities to thrive even better in the future.

Speaker Change: We just mentioned one topic like that capped in the decks.

And there are many other things that hopefully the wafer call. We received from the United States will resonate and then give us some opportunities to thrive even even better in the future.

Monika Schaller: Thank you, Dominik. Last question, WirtschaftsWoche. Short question, short answer.

Speaker Change: Thank you Dominic last question vivo short question short answer.

Michael Koch: Hi. Michael Koch of SAP, one question. You are really bullish on your approach towards AI. Can you give or will you give some certain numbers how this AI use cases influence your revenue?

Mike: Hi, Mike Cocoanuts herself.

Speaker Change: One question.

Speaker Change: Really.

Speaker Change: Bullish on your approach towards AI can give or will you give some numbers. How this AI use cases infants who have 11 you.

Speaker Change: Yes.

Christian Klein: I mean, Michael, yeah, we talked today about, you know, the 50% of, you know, AI use cases embedded in the deals. What is, I guess, fair to say when you buy a supply chain or HR software from SAP? I mean, there is a certain bookings impact already in the CCB, and of course it will go very fast because we embed it, and it will also be turned into revenue. When you look at the overall CCB growth and how well this is developing and the kind of acceleration that you can see, of course, one strong lever, the strongest lever is AI. We don't break out, you know, revenue numbers, but I guess, you know, 34,000 customers using AI, and I underscore using, is actually a pretty strong testament that there is a lot of value.

Michael: I mean, Michael.

Speaker Change: I mean.

Speaker Change: Yes, I mean, we talked today about 50% of AI use cases embedded into deals what is I guess fair to say when you buy a supply chain or HR software form S. C. P. I mean days of certain.

Speaker Change: Bookings impact already in the CCP.

Speaker Change: Of course, it will go very fast because we embedded also be turned into revenue and so when you look at overall, the CCP close and how well. This is developing in that kind of acceleration of what you can see of course, one strong the strongest lever is AI. So we don't break out revenue numbers.

Speaker Change: But I guess you know.

Speaker Change: 34000 customers using AI and I underscore using is actually a pretty strong Testament that day is a lot of value and when you look at now the next wave of AI and we have prepared an early glimpse of wound at <unk> P. M. Cash collection example.

Christian Klein: When you look at now the next wave of AI, and we have prepared there an early glimpse around agentic AI and SAP, cash collection example, you see, you know, how we are sitting really at this nexus between business and technology. We are very confident. The outlook we have given, the acceleration on total revenue, is a lot of that, of course, also related to AI.

Speaker Change: You'll see you know how we are setting media.

Speaker Change: Nexus between business and technology and so we are very confident in the outlook. We have given the acceleration on total revenue is a lot of that is of course also related to AI.

Monika Schaller: Yeah. Thank you very much. We are running out of time. Thank you very much for everyone joining us online. In case of any more questions, please feel free to reach out to the global PR team or myself. Thank you very much for joining us. Have a great day. For everyone here in the room, we go off link now. We would love to invite you to join Christian and Dominik for some food and drinks outside. We have something very special. Our call-

Speaker Change: Yes. Thank you very much they're running out of time. Thank you very much for everyone. Joining us online in case of any more questions. Please feel.

Speaker Change: <unk> I'll take novo.

Speaker Change: Our team or myself. Thank you very much for joining us have a great day.

Speaker Change: And for everyone here in the room and to go off of links now and we would love to invite you to shine and Christian Dominique flight time, food and drinks outside and we have something very special.

Speaker Change: Yeah.

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