Nyse Sap 2019

SAP
Annual Report
on Form 20-F
UNITED STATES SECURITIES AN D EXCHANGE COMMISSIO N
Washington, D.C. 20549
FORM 20-F
 REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
For the fiscal year ended December 31, 2019
OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OR
 SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)
Date of event requiring this shell company report……………
For the transition period from_______to_________
Commission file number: 1-14251
SAP SE
(Exact name of Registrant as specified in its charter)
SAP EUROPEAN COMPANY
(Translation of Registrant’s name into English)
Federal Republic of Germany
(Jurisdiction of incorporation or organization)
Dietmar-Hopp-Allee 16
69190 Walldorf
Federal Republic of Germany
(Address of principal executive offices)
Wendy Boufford
c/o SAP Labs
3410 Hillview Avenue, Palo Alto, CA, 94304, United States of America
650-849-4000 (Tel), 650-843-2041 (Fax)
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class (SAP) SAP Name of each exchange on which registered
American Depositary Shares, each Representing one Ordinary New York Stock Exchange
Share, without nominal value
Ordinary Shares, without nominal value New York Stock Exchange*

Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered
by the annual report:
Ordinary Shares, without nominal value: 1,228,504,232 (as of December 31, 2019)**
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes  No 
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934.
Yes  No 
Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes  No 
Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files.)
Yes  No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth
company. See definition of “accelerated filer,” “large accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated filer  Accelerated filer  Non-accelerated filer  Emerging growth company 
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financ ial accounting standards†
provided pursuant to Section 13(a) of the Exchange Act.
1
†
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Boa rd to its
Accounting Standards Codification after April 5, 2012.
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP  International Financial Reporting Standards as issued by the International Accounting Standards Board  Other 
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the regi strant
has elected to follow.
Item 17  Item 18 
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  No 
* Listed not for trading or quotation purposes, but only in connection with the registration of American Depositary Shares repr esenting such ordinary shares
pursuant to the requirements of the Securities and Exchange Commission.
** Including 34,854,354 treasury shares.
[THIS PAGE INTENTIONALLY LEFT BLANK]
2
Introduction..................................................................................................................................................................................................................... 4
Forward-Looking Statements ........................................................................................................................................................................................ 4
Performance Management System ..............................................................................................................................................................................6
PART I 12
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS ........................................................................................................ 12
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE ...................................................................................................................................... 12
ITEM 3. KEY INFORMATION ........................................................................................................................................................................................ 12
Selected Financial Data ................................................................................................................................................................................................ 12
Exchange Rates ............................................................................................................................................................................................................ 13
Dividends ....................................................................................................................................................................................................................... 13
Risk Factors................................................................................................................................................................................................................... 14
ITEM 4. INFORMATION ABOUT SAP.......................................................................................................................................................................... 24
Strategy and Business Model ......................................................................................................................................................................................25
Seasonality ................................................................................................................................................................................................................... 29
Products, Research & Development, and Services................................................................................................................................................... 30
Security, Data Protection, and Privacy ...................................................................................................................................................................... 34
Customers .................................................................................................................................................................................................................... 36
Energy and Emissions .................................................................................................................................................................................................. 37
Intellectual Property, Proprietary Rights and Licenses ............................................................................................................................................ 39
Description of Property ............................................................................................................................................................................................... 39
ITEM 4A. UNRESOLVED STAFF COMMENTS ............................................................................................................................................................ 41
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS .......................................................................................................................... 41
Operating Results (IFRS) ............................................................................................................................................................................................ 44
Foreign Currency Exchange Rate Exposure ...............................................................................................................................................................54
Liquidity and Capital Resources ..................................................................................................................................................................................54
Off-Balance Sheet Arrangements ...............................................................................................................................................................................58
Contractual Obligations ...............................................................................................................................................................................................58
Research and Development ........................................................................................................................................................................................ 59
Critical Accounting Estimates .................................................................................................................................................................................... 59
New Accounting Standards not yet Adopted ............................................................................................................................................................ 59
Expected Developments ............................................................................................................................................................................................. 59
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES .......................................................................................................................... 63
Compensation Report ................................................................................................................................................................................................. 65
Employee ...................................................................................................................................................................................................................... 86
Share Ownership ..........................................................................................................................................................................................................87
Share-Based Compensation Plans..............................................................................................................................................................................87
ITEM 7. MAJOR SHAREHOLDERS AND RELATED-PARTY TRANSACTIONS ..........................................................................................................87
ITEM 8. FINANCIAL INFORMATION ........................................................................................................................................................................... 88
ITEM 9. THE OFFER AND LISTING ............................................................................................................................................................................. 88
ITEM 10. ADDITIONAL INFORMATION ...................................................................................................................................................................... 88
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK............................................................................................97
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES .......................................................................................................97
PART II 98
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES ................................................................................................................. 98
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS ..................................................... 98
ITEM 15. CONTROLS AND PROCEDURES ................................................................................................................................................................. 98
ITEM 16. [RESERVED] ................................................................................................................................................................................................. 99
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT ................................................................................................................................................ 99
ITEM 16B. CODE OF ETHICS ....................................................................................................................................................................................... 99
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES .................................................................................................................................. 99
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES .................................................................................... 100
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS ............................................................... 100
ITEM 16F. CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT................................................................................................................. 100
ITEM 16G. DIFFERENCES IN CORPORATE GOVERNANCE PRACTICES .............................................................................................................. 100
PART III 103

ITEM 17. FINANCIAL STATEMENTS .......................................................................................................................................................................... 103
ITEM 18. FINANCIAL STATEMENTS ......................................................................................................................................................................... 103
ITEM 19. EXHIBITS...................................................................................................................................................................................................... 103
Signatures ................................................................................................................................................................................................................... 105
Index to the consolidated Financial Statements ....................................................................................................................................................... F-1
Report of Independent Registered Public Accounting Firm .................................................................................................................................... F-2
Consolidated Financial Statements IFRS.................................................................................................................................................................. F-5
3
Introduction Forward-Looking
Statements
SAP SE is a European Company (Societas Europaea, or “SE”) and
is referred to in this report, together with its subsidiaries, as SAP, or
as “Company,” “Group,” “we,” “our,” or “us.” This report contains forward-looking statements and information
In this report: (i) references to “US$,” “$,” or “dollars” are to U.S. based on the beliefs of, and assumptions made by, our management
dollars; (ii) references to ‘‘€” or “euro” are to the euro. Our financial using information currently available to them. Any statements
statements are denominated in euros, which is the currency of our contained in this report that are not historical facts are forward-
home country, Germany. Certain amounts that appear in this report looking statements as defined in the U.S. Private Securities Litigation
may not add up because of differences due to rounding. Reform Act of 1995. We have based these forward-looking
Unless otherwise specified herein, euro financial data have been statements on our current expectations, assumptions, and
converted into dollars at the noon buying rate in New York City for projections about future conditions and events. As a result, our
cable transfers in foreign currencies as certified for customs forward-looking statements and information are subject to
purposes by the Federal Reserve Bank of New York (the “Noon uncertainties and risks. A broad range of uncertainties and risks,
Buying Rate”) on December 31, 2019, which was US$1.1227 per many of which are beyond our control, could cause our actual results
€1.00. No representation is made that such euro amounts actually and performance to differ materially from any projections expressed
represent such dollar amounts or that such euro amounts could in or implied by our forward-looking statements. The uncertainties
have been or can be converted into dollars at that or any other and risks include, but are not limited to:
exchange rate on such date or on any other date. On February 7, – Uncertainty in the global economy, financial markets, social and
2020, the Noon Buying Rate for converting euro to dollars was political instability caused by state-based conflicts, terrorist
US$1.0950 per €1.00. attacks, civil unrest, war, or international hostilities could lead to
Unless the context otherwise requires, references in this report to disruptions of our business operations or have a negative impact
ordinary shares are to SAP SE’s ordinary shares, without nominal on our business, financial position, profit, and cash flows.
value. References in this report to “ADRs” are to SAP SE’s American – Laws, regulatory requirements and standards in Germany, the
Depositary Receipts, each representing one SAP ordinary share. United States, and elsewhere continue to be very stringent. Our
References in this report to “ADSs” are to SAP SE’s American international business activities and processes expose us to
Depositary Shares, which are the deposited securities evidenced by numerous and often conflicting laws and regulations, policies,
the ADRs. standards, or other requirements and sometimes even conflicting
SAP, ABAP, Adaptive Server, Advantage Database Server, regulatory requirements, and to risks that could harm our
Afaria, Business ByDesign, BusinessObjects, ByDesign, Crystal business, financial position, profit, and cash flows.
Reports, ExpenseIt, PartnerEdge, PowerBuilder, PowerDesigner, – Claims and lawsuits against us, such as for IP infringements, or
Quadrem, Qualtrics, R/3, Replication Server, SAP Ariba, SAP our inability to obtain or maintain adequate licenses for third-
BusinessObjects Explorer, SAP Business Workflow, SAP BW.4HANA, party technology, could have an adverse effect on our business,
SAP C/4HANA, SAP Concur, SAP EarlyWatch, SAP Fieldglass, SAP financial position, profit, cash flows, and reputation. Moreover,
Fiori, SAP HANA, SAP Jam, SAP Leonardo, SAP Lumira, SAP similar adverse effects could result if we are unable to adequately
NetWeaver, SAP S/4HANA, SAP SuccessFactors, SAP Vora, protect or enforce our own intellectual property.
SAPPHIRE, SAPPHIRE NOW, SQL Anywhere, The Best Run SAP, – Non-compliance with increasingly complex and stringent,
TripIt, TripLink, TwoGo, Web Intelligence and other SAP products and sometimes even conflicting, applicable data protection and
services mentioned herein as well as their respective logos are privacy laws or failure to adequately meet the contractual
trademarks or registered trademarks of SAP SE (or an SAP affiliate requirements of SAP’s customers with respect to our products
company) in Germany and other countries. and services could lead to civil liabilities and fines, as well as loss
Throughout this report, whenever a reference is made to our of customers and damage to SAP’s reputation, and could have a
website, such reference does not incorporate by reference into this material adverse effect on our financial performance and our
report the information contained on our website. business in general.
We intend to make this report and other periodic reports publicly – Unethical behavior and non-compliance with our integrity
available on our web site (www.sap.com) without charge standards by employees, other individuals, partners or entities
immediately following our filing with the U.S. Securities and associated with SAP could seriously harm our business, financial
Exchange Commission (SEC). Such reports are also available on the position, profit, and reputation.
website maintained by the SEC (www.sec.gov). We assume no – A cybersecurity attack or breach, or cybersecurity vulnerabilities
obligation to update or revise any part of this report, whether as a in our products, infrastructure, or services, or economic
result of new information, future events or otherwise, unless we are espionage could result in significant legal and financial exposure
required to do so by law. and have a material adverse effect on our customers, partners,
financial position, performance, profit, cash flows, operations,
brand, reputation, competitive position, the perception of our
products and services by current and prospective customers, and
our business in general.
We describe these and other risks and uncertainties in the Risk
Factors section.
If one or more of these uncertainties or risks materializes, or if
management’s underlying assumptions prove incorrect, our actual
4
results could differ materially from those described in or inferred This report includes statistical data about the IT industry and
from our forward-looking statements and information. global economic trends that comes from information published by
The words “aim,” “anticipate,” “assume,” “believe,” “continue,” sources including International Data Corporation (IDC), Gartner, the
“could,” “counting on,” “is confident,” “development,” “estimate,” European Central Bank (ECB), and the International Monetary Fund
“expect,” “forecast,” “future trends,” “guidance,” “intend,” “may,” (IMF). This type of data represents only the estimates of IDC,
“might,” “outlook,” “plan,” “predict,” “project,” “seek,” “should,” Gartner, the ECB, the IMF, and other sources of industry data. SAP
“strategy,” “want,” “will,” “would,” and similar expressions as they does not adopt or endorse any of the statistical information provided
relate to us are intended to identify such forward-looking by sources such as IDC, Gartner, the ECB, the IMF, or other similar
statements. Such statements include, for example, those made in sources that is contained in this report. The data from these sources
the Operating Results section, our quantitative and qualitative is subject to risks and uncertainties, and subject to change based on
disclosures about market risk pursuant to the International Financial various factors, including those described above, in the Risk Factor
Reporting Standards (IFRS), namely IFRS 7 and related statements section, and elsewhere in this report. These and other factors could
in our Notes to the Consolidated Financial Statements; Expected cause our results to differ materially from those expressed in the
Developments section; Risk Factors section; and other forward- estimates made by third parties and SAP. We caution readers not to
looking information appearing in other parts of this report. To fully place undue reliance on this data.
consider the factors that could affect our future financial results,
both this report and our Integrated Report should be considered, as
well as all of our other filings with the U.S. Securities and Exchange
Commission (SEC). Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date specified or the date of this report. We undertake no
obligation to publicly update or revise any forward-looking
statements as a result of new information that we receive about
conditions that existed upon issuance of this report, future events, or
otherwise unless we are required to do so by law.
5
Performance Management System
We use various performance measures to manage our way, it is an indicator of cloud-related sales success in a given
performance with regard to our primary financial objectives, which period and of secured future cloud revenue. We focus primarily on
are growth and profitability, and our primary non-financial the average contract value variant of the new cloud bookings
objectives, which are customer loyalty and employee engagement. measure that generally takes into account annualized amounts for
We view growth and profitability as indicators of our current contracts. There are no comparable IFRS measures for these
performance, while we see customer loyalty and employee bookings metrics.
engagement as indicators of our future performance. Cloud backlog: In addition to new cloud bookings, we use the
measure “cloud backlog” to evaluate our sales success in the cloud
Measures to Manage Our Financial business. We define cloud backlog as a measure that represents
Performance expected future cloud revenue that, as of period end, is contracted
but not yet billed.
Measures to Manage Our Operating Financial Operating profit (non-IFRS): We use operating profit (non-IFRS)
Performance expressed in both actual currencies and constant currencies to
In 2019, we used the following key measures to manage our measure our overall operational process efficiency and overall
business performance.
operating financial performance:
Cloud gross margin (non-IFRS): We use our cloud gross margin
Cloud revenue (non-IFRS): This revenue driver comprises the
(non-IFRS) to measure our process efficiency in our cloud business.
main revenues of our fast-growing cloud business. Revenue from
Cloud gross margin (non-IFRS) is the ratio of our cloud gross profit
cloud is derived from fees earned from providing customers with
(non-IFRS) to cloud revenue (non-IFRS), expressed as a
any of the following:
percentage.
– Software as a service (SaaS)
Operating margin (non-IFRS): We use operating margin to
– Platform as a service (PaaS)
measure our overall operational efficiency. Operating margin (non-
– Infrastructure as a service (IaaS)
IFRS) is the ratio of our operating profit (non-IFRS) to total revenue
– Premium cloud support beyond regular support embedded in
cloud offerings. (non-IFRS), expressed as a percentage.
For more information regarding cloud revenue and a description of Starting in 2020, new cloud bookings will be replaced by current
these services, see the Notes to the Consolidated Financial cloud backlog (CCB), both in actual and at constant currencies, to
Statements, Note (A.1). manage our operating financial performance. We intend to use that
We use the cloud revenue (non-IFRS) measure at both actual measure to evaluate our overall go-to-market success in the
currencies and constant currencies. committed cloud business. CCB is the contractually committed
Cloud and software revenue (non-IFRS): We use cloud and cloud revenue we expect to recognize over the upcoming 12 months
as of a specific key date. Thus, it is a subcomponent of our overall
software revenue (non-IFRS) expressed in both actual currencies
remaining performance obligations following IFRS 15.120. For CCB,
and constant currencies to measure our revenue growth. Our cloud
we take into consideration committed deals only. CCB can be
and software revenue includes cloud revenue plus software licenses
regarded as a lower boundary for cloud revenue to be recognized
and support revenue. Cloud revenue and software revenue are our
key revenue drivers because they tend to affect our other revenue over the next 12 months, as it excludes utilization-based models
streams. Generally, customers that buy software licenses also enter without pre-commitments and committed deals closed after the
key date. For our committed cloud business, we believe the
into related support contracts, and these generate recurring
expansion of CCB over a period is a valuable indicator of go-to-
support revenue after the software sale. Support contracts cover
market success, as it reflects both new contracts closed as well as
standardized support services and unspecified future software
existing contracts renewed.
updates and enhancements. Cloud and software revenue also tends
to stimulate services revenue, which is earned by providing
Measures to Manage Our Non-Operating
customers with professional services, premium engagement
services, training services, messaging services, and payment
Financial Performance
services. We use the following measures to manage our non-operating
Total revenue (non-IFRS): We use total revenue (non-IFRS) to financial performance:
measure our growth at both actual currencies and constant Financial income, net: This measure provides insight into the
currencies. The total of cloud revenue and support revenue divided return on liquid assets and capital investments and the cost of
by total revenue is the share of more predictable revenue. This borrowed funds. To manage our financial income, net, we focus on
measure provides additional insight into our sustained business cash flow, the composition of our liquid assets and capital
success. investment portfolio, and the average rate of interest at which
New cloud bookings: For our cloud activities, we also look at assets are invested. We also monitor average outstanding
new cloud bookings (both in actual currencies and constant borrowings and associated finance costs.
currencies). This measure reflects the committed order entry from Days Sales Outstanding (DSO): We manage working capital by
new customers and from incremental purchases by existing controlling the DSO of trade receivables. DSO measures the average
customers for offerings that generate cloud revenue. For new cloud number of days from the raised invoice to cash receipt from the
bookings we take into consideration committed deals only, meaning customer. We calculate DSO by dividing the average invoiced trade
utilization-based payments are not included in this measure. In this
6
receivables balance of the last 12 months by the average monthly Leadership Trust Score: We use this score to further enhance
cash receipt of the last 12 months. accountability and to measure our collective effort to foster a work
environment based on trust. It is derived from a question in our
Measures to Manage Overall Financial annual global employee survey that gauges employees’ trust in our
Performance leaders. We measure leadership trust by using the same NPS
We use the following measures to manage our overall financial methodology that we use to compute the Customer NPS.
performance: Starting in 2020, we will also use carbon emissions to manage
Earnings per share (EPS) (IFRS and non-IFRS): EPS measures our non-financial performance. It is used as a metric to strengthen
our overall performance because it captures all operating and non- our ambitious short-term and long-term carbon reduction targets.
operating elements of profit as well as income tax expense. It We measure our net carbon emissions according to the Greenhouse
represents the portion of profit after tax allocable to each SAP share Gas (GHG) Protocol. The net carbon emissions are calculated by
outstanding. EPS is influenced not only by our operating and non- deducting emission savings such as renewable energy and carbon
operating business and income taxes but also by the number of offsets from our gross carbon emissions.
shares outstanding.
Effective tax rate (IFRS and non-IFRS): We define our effective Value-Based Management
tax rate as the ratio of income tax expense to profit before tax, Our holistic view of the performance measures described above,
expressed as a percentage. together with our associated analyses, comprises the information
Operating, investing, and financing cash flows and free cash we use for value-based management. We use planning and control
flow: Our consolidated statement of cash flows provides insight into processes to manage the compilation of these key measures and
how we generate and use cash and cash equivalents. When applied their availability to our decision-makers across various
in conjunction with the other primary financial statements, it management levels.
provides information that helps us evaluate the changes in our net SAP’s long-term strategic plans are the point of reference for our
assets, our financial structure (including our liquidity and solvency), short-term and mid-term planning and controlling processes. We
and our ability to affect the amounts and timing of cash flows to initially identify future growth and profitability drivers at a highly
adapt to changing circumstances and opportunities. We use our aggregated level. In a first step, the resulting financial plan is broken
free cash flow measure to determine the cash flow remaining after down into (i) our deployment models “On Premise”, “Software as a
all expenditures required to maintain or expand our organic Service/Platform as a Service”, “Infrastructure as a Service”, and
business have been paid off. This measure provides management “Intelligent Spend Management”; and (ii) functions such as
with supplemental information to assess our liquidity needs. We development, sales, and administration. In a second step, the
calculate free cash flow as net cash from operating activities minus planned total revenues and total expenses are generally allocated to
purchases (other than purchases made in connection with business the areas of functional responsibility of the individual members of
combinations) of intangible assets and property, plant, and the Executive Board (the Board areas). If a Board area represents
equipment, as well as payments for lease liabilities. not only a functional department but also has a responsibility for
operating segments within this Board area (for example, Intelligent
Measures to Manage Our Non-Financial Spend Group segment and Qualtrics segment), the allocation is
Performance done at the lower segment level. Budget adjustments may be
In 2019, we used the following key measures to manage our non- applied during the year to reflect changes in priorities, to achieve
financial performance in the areas of customer loyalty, employee efficiency targets, and to reflect endogenous and exogenous
factors. Such budget adjustments, as well as the assessment of the
engagement, and leadership trust:
Executive Board’s performance, are handled at the Board area level
Customer Net Promoter Score (Customer NPS): This score
if the Board area is part of a segment, or at the segment level if the
measures the willingness of our customers to recommend or
Board area comprises several segments. It is then the individual
promote SAP to others. It is derived from ongoing customer surveys
and identifies, on a scale of 0–10, whether a customer is likely to Board member’s responsibility to break down the allocated budget
adjustments within the segment budget boundary. Based on an
recommend SAP to friends or colleagues, is neutral, or is unwilling
integrated portfolio process running in parallel to the budgeting
to recommend. We introduced this measure in 2012, as we are
convinced that we can achieve our financial goals only when our process, we ensure aligned investment behavior across Board areas
with regards to specific solutions or solution areas. In a final step,
customers are loyal to, and satisfied with, SAP and our solutions. To
customer-facing revenue targets and cost-of-sales and marketing
derive the Customer NPS, we start with the percentage of
“promoters” of SAP, that is, those giving us a score of 9 or 10 on a targets are broken down into sales regions.
Based on our detailed annual plans, we determine the budget for
scale of 0–10. We then subtract the percentage of “detractors,” that
the respective year. We also have processes in place to forecast
is, those giving us a score of 0 to 6. The method ignores “passives,”
revenue and profit on a quarterly basis, to quantify whether we
that is, those giving us a score of 7 or 8. Consequently, the range of
expect to realize our financial goals, and to identify any deviations
achievable scores is –100 to +100, with the latter being the best
achievable score for customer loyalty as measured by the Customer from plan. We continuously monitor the affected units in the Group
to analyze these developments and define any appropriate actions.
NPS methodology.
Our entire network of planning, control, and reporting processes is
Employee Engagement Index: We use this index to measure the
implemented in integrated planning and information systems,
motivation and loyalty of our employees, how proud they are of our
based on SAP software, across all organizational units so that we
company, and how strongly they identify with SAP. The index is
can conduct the evaluations and analyses needed to make informed
derived from an annual survey of our employees. Applying this
decisions.
measure is recognition that our growth strategy depends on
engaged employees.
7
Non-IFRS Financial Measures Cited in Operating Expense (Non-IFRS)
This Report Operating expense numbers that are identified as operating
expenses (non-IFRS) have been adjusted by excluding the following
Explanation of Non-IFRS Measures expenses:
– Acquisition-related charges
We disclose certain financial measures such as revenue (non-
IFRS), expense (non-IFRS), and profit measures (non-IFRS) that are ▪ Amortization expense/impairment charges for intangibles
acquired in business combinations and certain stand-alone
not prepared in accordance with IFRS and are therefore considered
acquisitions of intellectual property (including purchased in-
non-IFRS financial measures. Our non-IFRS financial measures may
process research and development)
not correspond to non-IFRS financial measures that other
▪ Settlements of preexisting business relationships in
companies report. The non-IFRS financial measures that we report
connection with a business combination
should only be considered in addition to, and not as substitutes for,
▪ Acquisition-related third-party expenses
or superior to, our IFRS financial measures.
We believe that the disclosed supplemental historical and – Share-based payment expenses
– Restructuring expenses, that is, expenses resulting from
prospective non-IFRS financial information provides useful
measures which comply with the definition of restructuring
information to investors because management uses this
according to IFRS.
information, in addition to financial data prepared in accordance
We exclude certain acquisition-related expenses for the purpose
with IFRS, to attain a more transparent understanding of our past
performance and our anticipated future results. We use non-IFRS of calculating operating profit (non-IFRS), operating margin (non-
revenue and profit measures consistently in our internal planning IFRS), and earnings per share (non-IFRS) when evaluating SAP’s
continuing operational performance because these expenses
and forecasting, reporting, and compensation, as well as in our
generally cannot be changed or influenced by management after
external communications, as follows:
– Our management primarily uses these non-IFRS measures the relevant acquisition other than by disposing of the acquired
assets. Since management at levels below the Executive Board does
rather than IFRS measures as the basis for making financial,
strategic, and operating decisions. not influence these expenses, we generally do not consider these
– The variable components of our Executive Board members’ and expenses for the purpose of evaluating the performance of
employees’ remuneration are based on revenue (non-IFRS), management units. For similar reasons, we eliminate share-based
operating profit (non-IFRS), operating margin (non-IFRS), as payment expenses as these costs are impacted by share price
well as new cloud bookings measures rather than the respective developments and other factors outside our control. We also
eliminate restructuring expenses because they are volatile and
IFRS measures.
mostly cannot be influenced by management at levels below the
– The annual budgeting process for all management units is based
Executive Board.
on revenue (non-IFRS) and operating profit (non-IFRS) numbers
rather than the respective IFRS financial measures. Operating Profit (Non-IFRS), Cloud Gross Margin
– All forecast and performance reviews with all senior managers (Non-IFRS), Operating Margin (Non-IFRS),
globally are based on these non-IFRS measures, rather than the Effective Tax Rate (Non-IFRS), and Earnings per
respective IFRS financial measures. Share (Non-IFRS)
– Both our internal performance targets and the guidance we Operating profit, cloud gross margin, operating margin, effective
provide to the capital markets are based on non-IFRS revenue
tax rate, and earnings per share identified as operating profit (non-
and profit measures rather than the respective IFRS financial
IFRS), cloud gross margin (non-IFRS), operating margin (non-IFRS),
measures.
effective tax rate (non-IFRS), and earnings per share (non-IFRS)
Our non-IFRS financial measures reflect adjustments based on
have been adjusted from the respective IFRS measures by adjusting
the items below, as well as adjustments for the related income tax
for the aforementioned revenue (non-IFRS) and operating expenses
effects.
(non-IFRS) and the income tax effects thereon.
Revenue (Non-IFRS) Constant Currencies Information
Non-IFRS revenue measures have been adjusted from the
We believe it is important for investors to have information that
respective IFRS financial measures by including the full amount of
provides insight into our sales. Revenue measures determined
software support revenue, cloud revenue, and other similarly under IFRS provide information that is useful in this regard.
recurring revenue that we are not permitted to record as revenue
However, both sales volume and currency effects impact period-
under IFRS due to fair value accounting for the contracts in effect at
over-period changes in sales revenue. We do not sell standardized
the time of the respective acquisitions.
units of products and services, so we cannot provide relevant
Under IFRS, we record at fair value the contracts in effect at the
information on sales volume by providing data on the changes in
time entities were acquired. Consequently, our IFRS software
product and service units sold. To provide additional information
support revenue, IFRS cloud revenue, IFRS cloud and software
that may be useful to investors in breaking down and evaluating
revenue, and IFRS total revenue for periods subsequent to
changes in sales volume, we present information about our revenue
acquisitions do not reflect the full amount of revenue that would and various values and components relating to operating profit that
have been recorded by entities acquired by SAP had they remained
are adjusted for foreign currency effects.
stand-alone entities. Adjusting revenue numbers for this revenue
We calculate constant currencies measures by translating
impact provides additional insight into the comparability of our
foreign currencies using the average exchange rates from the
ongoing performance across periods.
comparative period instead of the current period. Constant
currency measures on revenue backlog use the closing exchange
8
rate from the previous year’s corresponding keydate instead of the ▪ The acquisition-related amortization expense that we
average exchange rate. eliminate in deriving our profit (non-IFRS) numbers is a
recurring expense that will impact our financial performance
Free Cash Flow in future years.
Among other measures, we use free cash flow to manage our ▪ The remaining acquisition-related charges that we eliminate
overall financial performance. We have modified the free cash flow in deriving our profit (non-IFRS) numbers are likely to recur
metric by subtracting payments of leasing liabilities in order to should SAP enter into material business combinations in the
eliminate the impact of increasing net cash flows from operating future. Similarly, the restructuring expenses that we eliminate
activities, following the adoption of IFRS 16. in deriving our profit (non-IFRS) numbers are likely to recur
should SAP perform restructurings in the future.
€ millions 2019 2018 ∆ in % ▪ The revenue adjustment for the fair value accounting of the
Net cash flows from operating 3,496 4,303 –19 acquired entities’ contracts and the expense adjustment for
activities acquisition-related charges do not arise from a common
Purchase of intangible assets and –817 –1,458 –44 conceptual basis. This is because the revenue adjustment
property, plant, and equipment aims to improve the comparability of the initial post-
(without acquisitions)
acquisition period with future post-acquisition periods, while
Payments of lease liabilities –403 0 NA the expense adjustment aims to improve the comparability
between post-acquisition periods and pre-acquisition
Free cash flow 2,276 2,844 –20
periods. This should particularly be considered when
evaluating our operating profit (non-IFRS) and operating
Usefulness of Non-IFRS Measures margin (non-IFRS) numbers as these combine our revenue
We believe that our non-IFRS measures are useful to investors (non-IFRS) and expenses (non-IFRS) despite the absence of
for the following reasons: a common conceptual basis.
– Our revenue (non-IFRS), expense (non-IFRS), and profit (non- ▪ Our restructuring charges resulted in significant cash
IFRS) measures, along with the “new cloud bookings” and “cloud outflows in the past and could do so in the future. The same
backlog” measures (see above) provide investors with insight applies to our share-based payment expense because most
into management’s decision-making because management uses of our share-based payments are settled in cash rather than
these measures to run our business and make financial, shares.
strategic, and operating decisions. We include the revenue ▪ The valuation of our cash-settled share-based payments
adjustments outlined above and exclude the expense could vary significantly from period to period due to the
adjustments outlined above when making decisions to allocate fluctuation of our share price and other parameters used in
resources. In addition, we use these non-IFRS measures to the valuation of these plans.
facilitate comparisons of SAP’s operating performance from ▪ In the past, we have issued share-based payment awards to
period to period. our employees every year and we intend to continue doing so
– The non-IFRS measures provide investors with additional in the future. Thus, our share-based payment expenses are
information that enables a comparison of year-over-year recurring, although the amounts usually change from period
operating performance by eliminating certain direct effects of to period.
acquisitions, share-based compensation plans, and We believe that constant currencies measures have limitations,
restructuring plans. particularly as the currency effects that are eliminated constitute a
– Non-IFRS and non-GAAP measures are widely used in the significant element of our revenue and expenses and could
software industry. In many cases, inclusion of our non-IFRS materially impact our performance. Therefore, we limit our use of
measures may facilitate comparison with our competitors’ constant currencies measures to the analysis of changes in volume
corresponding non-IFRS and non-GAAP measures. as one element of the full change in a financial measure. We do not
evaluate our results and performance without considering both
Limitations of Non-IFRS Measures constant currencies and nominal measures of revenue (non-IFRS)
We believe that our non-IFRS financial measures described and operating profit (non-IFRS) measures on the one hand, and
above have limitations including, but not limited to, the following: changes in revenue, operating expenses, operating profit, or other
– Without being analyzed in conjunction with the corresponding measures of financial performance prepared in accordance with
IFRS measures, the non-IFRS measures are not indicative of our IFRS on the other. We caution the readers of our financial reports to
present and future performance, foremost for the following follow a similar approach by considering nominal and constant
reasons: currencies non-IFRS measures only in addition to, and not as a
▪ While our profit (non-IFRS) numbers reflect the elimination of substitute for or superior to, changes in revenue, operating
certain acquisition-related expenses, no eliminations are expenses, operating profit, or other measures of financial
made for the additional revenue or other income that results performance prepared in accordance with IFRS.
from the acquisitions. Despite these limitations, we believe that the presentation of our
▪ While we adjust for the fair value accounting of the acquired non-IFRS measures and the corresponding IFRS measures,
entities’ recurring revenue contracts, we do not adjust for the together with the relevant reconciliations, provide useful
fair value accounting of deferred compensation items that information to management and investors regarding present and
result from commissions paid to the acquired company’s future business trends relating to our financial condition and results
sales force and third parties for closing the respective of operations.
customer contracts.
9
Reconciliations of IFRS to Non-IFRS Financial Measures for the Years 2019 and 2018
€ millions, unless otherwise stated 2019 2018
IFRS Adj. Non-IFRS Currency Non-IFRS IFRS Adj. Non-IFRS

Impact Constant
Currency
Revenue measures
Cloud 6,933 81 7,013 –240 6,773 4,993 33 5,027
Software licenses 4,533 0 4,533 –101 4,431 4,647 0 4,647
Software support 11,547 0 11,548 –263 11,285 10,981 0 10,982
Software licenses and support 16,080 0 16,080 –364 15,716 15,628 0 15,629
Cloud and software 23,012 81 23,093 –604 22,489 20,622 33 20,655
Services 4,541 0 4,541 –124 4,417 4,086 0 4,086
Total revenue 27,553 81 27,634 –728 26,906 24,708 33 24,741
Operating expense measures
Cost of cloud –2,534 305 –2,228 –2,068 213 –1,855
Cost of software licenses and support –2,159 141 –2,018 –2,092 130 –1,962
Cost of cloud and software –4,692 446 –4,247 –4,160 343 –3,817
Cost of services –3,662 254 –3,408 –3,302 151 –3,151
Total cost of revenue –8,355 700 –7,655 –7,462 494 –6,969
Gross profit 19,199 781 19,979 17,246 527 17,773
Research and development –4,292 438 –3,854 –3,624 219 –3,406
Sales and marketing –7,693 909 –6,784 –6,781 589 –6,192
General and administration –1,629 477 –1,152 –1,098 106 –992
Restructuring –1,130 1,130 0 –19 19 0
Other operating income/expense, net 18 0 18 –20 0 –20
Total operating expenses –23,081 3,654 –19,426 474 –18,953 –19,005 1,426 –17,579
Profit numbers
Operating profit 4,473 3,735 8,208 –255 7,953 5,703 1,459 7,163
Other non-operating income/expense, net –74 0 –74 –56 0 –56
Finance income 787 0 787 371 0 371
Finance costs –589 0 –589 –418 0 –418
Financial income, net 198 0 198 –47 0 –47
Profit before tax 4,596 3,735 8,331 5,600 1,459 7,059
Income tax expense –1,226 –954 –2,180 –1,511 –349 –1,860
Profit after tax 3,370 2,781 6,152 4,088 1,111 5,199
Attributable to owners of parent 3,321 2,781 6,102 4,083 1,111 5,193
Attributable to non-controlling interests 50 0 50 6 0 6
Key ratios
Operating margin (in %) 16.2 29.7 29.6 23.1 29.0
Effective tax rate (in %) 26.7 26.2 27.0 26.3
Earnings per share, basic (in €) 2.78 5.11 3.42 4.35
Note: Due to rounding, the sum of the numbers presented in the table above might not precisely equal the totals we provide.
10
Non-IFRS Adjustments by Functional Areas
€ millions 2019 2018
IFRS Acqui- SBP1) Restruc- Non-IFRS IFRS Acqui- SBP1) Restruc- Non-IFRS
sition- turing sition- turing
Related Related
Cost of cloud and software –4,692 308 138 0 –4,247 –4,160 264 78 0 –3,817
Cost of services –3,662 9 246 0 –3,408 –3,302 9 142 0 –3,151
Research and development –4,292 9 429 0 –3,854 –3,624 9 210 0 –3,406
Sales and marketing –7,693 348 562 0 –6,784 –6,781 277 312 0 –6,192
General and administration –1,629 16 461 0 –1,152 –1,098 18 88 0 –992
Restructuring –1,130 0 0 1,130 0 –19 0 0 19 0
Other operating 18 0 0 0 18 –20 0 0 0 –20

income/expense, net
Total operating expenses –23,081 689 1,835 1,130 –19,426 –19,005 577 830 19 –17,579
1)
Share-based payments
11
PART I ITEM 3. KEY INFORMATION
Selected Financial Data
ITEM 1. IDENTITY OF The following table sets forth our selected consolidated financial
DIRECTORS, SENIOR data as of and for each of the years in the five-year period ended
December 31, 2019. The consolidated financial data has been
MANAGEMENT AND derived from, and should be read in conjunction with, our
Consolidated Financial Statements prepared in accordance with
ADVISERS International Financial Reporting Standards as issued by the
International Accounting Standards Board (IFRS), presented in
“Item 18. Financial Statements” of this report.
Not applicable. Our selected financial data and our Consolidated Financial
Statements are presented in euros, unless otherwise stated.
ITEM 2. OFFER STATISTICS

AND EXPECTED
TIMETABLE
Not applicable.
SELECTED FINANCIAL DATA: IFRS

€ millions, unless otherwise stated 2019 2018 2017 2016 2015
Income Statement Data: Years ended December 31,
Cloud revenue 6,933 4,993 3,769 2,993 2,286
Software licenses and support revenue 16,080 15,628 15,780 15,431 14,928
Cloud and software revenue 23,012 20,622 19,549 18,424 17,214
Total revenue 27,553 24,708 23,461 22,062 20,793
Operating profit 4,473 5,703 4,877 5,135 4,252
Profit after tax 3,370 4,088 4,046 3,629 3,056
Profit attributable to owners of parent 3,321 4,083 4,008 3,642 3,064

(1)
Earnings per share
Basic in € 2.78 3.42 3.35 3.04 2.56
Diluted in € 2.78 3.42 3.35 3.04 2.56
Other Data:
Weighted-average number of shares outstanding
Basic 1,194 1,194 1,197 1,198 1,197
Diluted 1,194 1,194 1,198 1,199 1,198
Statement of Financial Position Data: At December 31,
Cash and cash equivalents 5,314 8,627 4,011 3,702 3,411
Total assets 60,215 51,502 42,484 44,262 41,390
Current financial liabilities (2) 3,273 1,125 1,561 1,813 841

(2)
Non-current financial liabilities 12,923 10,553 5,034 6,481 8,681
Issued capital 1,229 1,229 1,229 1,229 1,229
Total equity 30,822 28,877 25,515 26,382 23,295
(1) See Note (C.6) to our Consolidated Financial Statements for more information on earnings per share.
(2) The balances include primarily bonds, private placements and bank loans. See Note (E.3) to our Consolidated Financial Statements for more information on our financial liabilities.
12
Exchange Rates receive dividend payments. If you own our ordinary shares or
ADRs and if you are a U.S. resident, refer to “Item 10. Additional
The sales prices for our ordinary shares traded on German Information — Taxation,” for further information.
stock exchanges are denominated in euro. Fluctuations in the
exchange rate between the euro and the U.S. dollar affect the Dividend Paid per Ordinary Share
dollar equivalent of the euro price of the ordinary shares traded
Year Ended December 31, € US$
on the German stock exchanges and, as a result, may affect the
price of the ADRs traded on the NYSE in the United States. See 2015 1.15 1.30 (1)
“Item 9. The Offer and Listing” for a description of the ADRs. In
addition, SAP SE pays cash dividends, if any, in euro. As a result, 2016 1.25 1.37 (1)
any exchange rate fluctuations will also affect the dollar amounts 2017 1.40 1.65 (1)
received by the holders of ADRs on the conversion into dollars of
cash dividends paid in euro on the ordinary shares represented by 2018 1.50 1.68 (1)
the ADRs. Deutsche Bank Trust Company Americas is the
2019 (proposed) 1.58 (2) 1.73 (2), (3)
depositary (the Depositary) for SAP SE’s ADR program. The
deposit agreement with respect to the ADRs requires the
(1)
Translated for the convenience of the reader from euro into U.S. dollars at the Noon
Depositary to convert any dividend payments from euro into Buying Rate for converting euro into U.S. dollars on the dividend payment date. The
dollars as promptly as practicable upon receipt. For additional Depositary is required to convert any dividend payments received from SAP as promptly
as practicable upon receipt.
information on the Depositary and the fees associated with SAP’s (2)
Subject to approval at the Annual General Meeting of Shareholders of SAP SE currently
ADR program see “Item 12. Description of Securities Other Than scheduled to be held on May 15, 2020.
Equity Securities — American Depositary Shares.” (3)
Translated for the convenience of the reader from euro into U.S. dollars at the Noon
For details on the impact of exchange rate fluctuations see Buying Rate for converting euro into U.S. dollars on February 7, 2020 of US$1.0950 per
€1.00. The dividend paid may differ due to changes in the exchange rate.
“Item 5. Operating and Financial Review and Prospects — Foreign
Currency Exchange Rate Exposure”. The amount of dividends paid on the ordinary shares depends
on the amount of profits to be distributed by SAP SE, which
Dividends depends in part upon our financial performance. In addition, the

amount of dividends received by holders of ADRs may be affected
by fluctuations in exchange rates (see “Item 3. Key Information —
Dividend Distribution Policy Exchange Rates”). The timing, declaration, amount and payment
Dividends are jointly proposed by SAP SE’s Supervisory Board of any future dividend will depend upon our future earnings,
(Aufsichtsrat) and Executive Board (Vorstand) based on SAP SE’s capital needs and other relevant factors, in each case as
year-end stand-alone statutory financial statements, subject to proposed by the Executive Board and the Supervisory Board of
approval by the Annual General Meeting of Shareholders. SAP SE and approved by the Annual General Meeting of
Dividends are officially declared for the prior year at SAP SE’s Shareholders.
Annual General Meeting of Shareholders. SAP SE’s Annual
General Meeting of Shareholders usually convenes during the In light of SAP’s strong financial performance and healthy
second quarter of each year. Beginning with the dividends balance sheet, the Supervisory Board of SAP SE approved, on
payable for the 2017 fiscal year and in accordance with a change November 4, 2019, the Executive Board’s plan for enhanced
of the German Stock Corporation Act that aims to implement capital return in 2020. Under this new program, the Company
joint market standards in Europe for corporate actions intends to repurchase shares and/or issue a special dividend with
processing, dividends are remitted to the custodian bank on a combined volume of €1.5 billion by December 31, 2020.
behalf of the shareholders on the third business day following the
Annual General Meeting of Shareholders. Record holders of the
ADRs on the dividend record date will be entitled to receive
payment of the dividend declared in respect of the year for which
it is declared. Cash dividends payable to such holders will be paid
to the Depositary in euro and, subject to certain exceptions, will
be converted by the Depositary into U.S. dollars.
Dividends paid to holders of the ADRs may be subject to
German withholding tax. See “Item 8. Financial Information —
Other Financial Information — Dividend Policy” and “Item 10.
Additional Information — Taxation,” for further information.
Annual Dividends Paid and Proposed

The following table sets forth in euro the annual dividends paid
or proposed to be paid per ordinary share in respect of each of
the years indicated. One SAP ADR currently represents one SAP
SE ordinary share. Accordingly, the final dividend per ADR is equal
to the dividend for one SAP SE ordinary share and is dependent
on the euro/U.S. dollar exchange rate. The table does not reflect
tax credits that may be available to German taxpayers who
13
Risk Factors – Possible tax constraints impeding business operations in certain
countries
– Changes in external reporting standards and tax laws including,
but not limited to, conflict and overlap among tax regimes as well
Economic, Political, Social, and Regulatory Risks as the introduction of new tax concepts that harm digitized
business models
Global Economic and Political Environment: Uncertainty in the
– Discriminatory, protectionist, or conflicting fiscal policies and tax
global economy, financial markets, social and political instability
laws, such as certain protectionist measures included in the U.S.
caused by state-based conflicts, terrorist attacks, civil unrest,
Tax Reform which was enacted at the end of 2017, with some
war, or international hostilities could lead to disruptions of our
provisions still awaiting final regulations to provide guidance on
business operations or have a negative impact on our business,
compliance
financial position, profit, and cash flows.
– Workforce restrictions resulting from changing laws and
As a global company, we are influenced by multiple external
regulations, from political decisions (such as Brexit, government
factors that are difficult to predict and beyond our influence and
elections), or through required works council involvements, labor
control. Any of these factors could have a significant adverse effect on
union approvals, and immigration laws in different countries
the overall economy as well as on our business.
– Protectionist trade policies, import and export regulations, and
The following potential events, among others, could bring risks to
trade sanctions (such as in Russia or China), counter or even
SAP’s business:
conflicting sanctions (such as in the United States and Russia),
– General economic, political, social, environmental, market
and embargoes (such as in Iran) including, but not limited to,
conditions, and unrest (for example, United States–China supply
country-specific software certification requirements
chain restrictions, United States–North Korea conflicts, western
– Violations of country-specific sanctions (such as the UN sanction
pressure on Iran, UK/Brexit, unrest in Hong Kong, and so on)
against North Korea or the United States’ sanction requirements
– Continued deterioration in global economic conditions (impact
against Iran and certain other countries)
on accurate forecast) or budgetary constraints of national
– Compliance with and stringent enforcement of laws, as for
governments
example the EU General Data Protection Regulation (GDPR) or
– Confrontations, frictions, trade or tariff conflicts such as that
China’s Cyber Security Law, and regulations (including
between the United States and China, with potential global
interpretations), implications of government elections, lack of
implications as indicated by signs of a widespread economic
reforms, data protection and privacy rules, regulatory
slowdown, maybe even leading to a recession
requirements and standards (such as the Payment Card Industry
– Financial market volatility episodes, global economic crises and
Data Security Standard (PCI DSS)) or other compliance
chronic fiscal imbalances, slowing economic conditions, or
requirements (such as Service Organization Controls (SOC))
disruptions in emerging markets
– Expenses associated with the localization of our products and
– Higher credit barriers for customers, reducing their ability to
compliance with local regulatory requirements
finance software purchases
– Difficulties enforcing intellectual property and contractual rights
– Increased number of bankruptcies among customers, business
in certain jurisdictions
partners, and key suppliers
– Terrorist attacks or other acts of violence, civil unrest, natural
In 2017, an investigation was initiated and is ongoing with regards
disasters, or pandemic diseases impacting our business
to potential sanctions violations. For more information relating to the
– Regional conflicts, which may affect data centers as critical
potential sanctions’ violations noted above, see the Notes to the
infrastructure assets
Consolidated Financial Statements, Note (G.3).
Any of these events could limit our ability to reach our targets as
As we expand into new countries and markets and/or extend our
they could have a negative effect on our business operations,
business activities in these markets, including emerging and high-
risk markets, these risks could intensify. The application of the
respective local laws and regulations to our business is sometimes
International Laws and Regulations: Laws, regulatory
unclear, subject to change over time, and often conflicting among
requirements and standards in Germany, the United States, and
jurisdictions. Additionally, these laws and government approaches to
elsewhere continue to be very stringent. Our international
enforcement are continuing to change and evolve, just as our
business activities and processes expose us to numerous and
products and services continually evolve. Compliance with these
often conflicting laws and regulations, policies, standards, or
varying laws and regulations could involve significant costs or
other requirements and sometimes even conflicting regulatory
require changes in products or business practices. Non-compliance
requirements, and to risks that could harm our business,
could result in the imposition of penalties or cessation of orders due
to alleged non-compliant activity. Governmental authorities could
We are a global company and currently market our products and use considerable discretion in applying these statutes and any
services in more than 180 countries and territories. As a European imposition of sanctions against us could be material. One or more of
company domiciled in Germany with securities listed in Germany these factors could have an adverse effect on our operations globally
and the United States, we are subject to European, German, U.S., or in one or more countries or regions, which could have an adverse
and other governance-related regulatory requirements. effect on our business, financial position, profit, and cash flows.
Our business in these more than 180 countries is subject to
numerous risks inherent to international business operations.
Among others, these risks include:
14
Legal and IP: Claims and lawsuits against us, such as for IP source terms one of our products or third-party (non-SAP) software
infringements, or our inability to obtain or maintain adequate upon which we depend.
licenses for third-party technology, could have an adverse effect Any legal action we bring to enforce our proprietary rights could
on our business, financial position, profit, cash flows, and also involve enforcement against a partner or other third party,
reputation. Moreover, similar adverse effects could result if we which might have an adverse effect on our ability, and our
are unable to adequately protect or enforce our own intellectual customers’ ability, to use that partner’s or other third parties’
property. products.
We believe that we will continuously be subject to claims and The outcome of litigation and other claims or lawsuits is
lawsuits, including intellectual property infringement claims, as our intrinsically uncertain. Management’s view of the litigation might
solution portfolio grows; as we acquire companies with increased also change in the future. Actual outcomes of litigation and other
use of third-party code including open source code; as we expand claims or lawsuits could differ from the assessments made by
into new industries with our offerings, resulting in greater overlap in management in prior periods, which are the basis for our accounting
the functional scope of offerings; and as non-practicing entities that for these litigations and claims under IFRS.
do not design, manufacture, or distribute products assert Data Protection and Privacy: Non-compliance with increasingly
intellectual property infringement claims. Moreover, protecting and
complex and stringent, sometimes even conflicting, applicable
defending our intellectual property is crucial to our success.
data protection and privacy laws or failure to adequately meet
The outcome of litigation and other claims or lawsuits is
the contractual requirements of SAP’s customers with respect to
intrinsically uncertain and could lead, for example, to the following our products and services could lead to civil liabilities and fines,
risks: as well as loss of customers and damage to SAP’s reputation,
– Claims and lawsuits might be brought against us, including
and could have a material adverse effect on our financial
claims and lawsuits involving customers or businesses we have
performance and our business in general.
acquired.
As a global software and service provider, SAP is required to
– We might be dependent in the aggregate on third-party
comply with local laws wherever SAP does business. One of the
technology, including cloud and Web services, that we embed in
latest major harmonizations of European data protection laws has
our products or that we resell to our customers.
been the General Data Protection Regulation (GDPR).
– Third parties have claimed, and might claim in the future, that we
Furthermore, evolving regulations and new laws globally (such as
infringe their intellectual property rights or that we are overusing
the California Consumer Privacy Act and the EU’s proposed e-
or misusing licenses to these technologies.
Privacy Regulation) regarding data protection and privacy or other
– We integrate certain open source software components from
standards increasingly aimed at the use of personal information,
third parties into our software. Open source licenses might
such as for marketing purposes and the tracking of individuals’
require that the software code in those components or the
online activities, may impose additional burdens for SAP due to
software into which they are integrated be freely accessible under
increasing compliance standards that could restrict the use and
open source terms.
adoption of SAP’s products and services (in particular cloud
– Despite our efforts, we might not be able to prevent third parties
services) and make it more challenging and complex to meet
from obtaining, using, or selling without authorization what we
customer expectations.
regard as our proprietary technology and information. In addition,
This could lead to increased risks for SAP, which could harm
proprietary rights could be challenged, invalidated, held
SAP’s business and limit SAP’s growth.
unenforceable, or otherwise affected. Moreover, the laws and
courts of certain countries might not offer effective means to
Non-compliance with applicable data protection and privacy laws
enforce our legal or intellectual property rights. Finally, SAP may
by SAP and/or any of the sub-processors engaged by SAP within the
not be able to collect all judgments awarded to it in legal
processing of personal data could lead, for example, to risks in the
proceedings.
following areas:
– Some intellectual property might be vulnerable to disclosure or
– Mandatory disclosures of breaches to affected individuals,
misappropriation by employees, partners, or other third parties.
customers, and data protection supervisory authorities
– Investigations and administrative measures by data protection
Third parties might reverse-engineer or otherwise obtain and use
supervisory authorities, such as the instruction to alter or stop
technology and information that we regard as proprietary.
non-compliant data processing activities, including the
Accordingly, we might not be able to protect our proprietary rights
instruction to stop using non-compliant subcontractors
against unauthorized third-party copying or utilization. Adverse
– Fines of up to 4% of SAP’s annual Group turnover, or unlimited
outcomes to some or all of the claims and lawsuits pending against
fines
us might result in the award of significant damages or injunctive
– Damage claims by customers
relief against us or brought against us in the future that could hinder
– Harm to SAP’s reputation
our ability to conduct our business and could have an adverse effect
– Increased complexity in times of digitalization with regards to
on our reputation, business, financial position, profit, and cash flows.
legal requirements in the context of cross-border data transfer
Third parties could require us to enter into royalty and licensing
– Lack of digital frameworks such as in the context of machine
arrangements on terms that are not favorable to us, cause product
learning or artificial intelligence could lead to distortion of
shipment delays, subject our products to injunctions, require a
individual data or information.
complete or partial redesign of products, result in delays to our
customers’ investment decisions, and damage our reputation. Third-
In addition, the German Federal Office for the Protection of the
party claims might require us to make freely accessible under open
Constitution and security industry experts have warned of risks
15
related to a globally growing number of cybersecurity attacks aimed – Fraud and corruption, especially in countries with a low
at obtaining or violating company data including personal data. We Corruption Perceptions Index score and particularly in emerging
anticipate cyberattack techniques to continue to evolve and increase markets
in sophistication, which could make it difficult to anticipate, prevent, – Increased scrutiny of public sector transactions in territories
detect, and mitigate attacks and intrusions, thus leading, for exposed to a high risk of corruption
example, to risks described in the Security, Data Protection, and – Increased exposure and impact on business activities in highly
Privacy section, including risks in the following areas, among others: regulated industries such as public sector, healthcare, banking, or
– A globally increasing number of threat actor attacks aimed at insurance
obtaining or violating Company data including personal data as
observed in recent prominent cases of cyberattacks where the Any one or more of these events could have an adverse effect on
use of ransomware was the preferred method of threat actors our business, reputation, financial position, share price, profit, and
cash flows.
Any one or more of these events could have a material adverse SAP has encountered situations that required clear messaging
effect on our business, financial position, profit, and cash flows. and strong action on non-compliance in the context of corrupt
behavior that has the potential to harm our business and reputation.
Corporate Governance and Compliance Risks In South Africa, SAP is continuing to investigate its dealings with the
public sector. For more information relating to the alleged anti-
Unauthorized Disclosure of Information: Our controls and efforts
bribery law violations noted above, see the Notes to the
to prevent the unauthorized disclosure of confidential
Consolidated Financial Statements, Note (G.3).
information might not be effective.
Confidential information and internal information related to Environment and Sustainability: Failure to meet customer,
topics such as our strategy, new technologies, mergers and partner, or other stakeholder expectations or generally accepted
acquisitions, unpublished financial results, customer data, or standards on climate change, energy constraints, and our social
personal data, could be disclosed prematurely or inadvertently and investment strategy could negatively impact SAP’s business,
subsequently lead to market misperception and volatility. results of operations, and reputation.
Such disclosure could lead to risks in the following areas, among Energy and emissions management are an integral component of
others: our holistic management of social, environmental, and economic
– Disclosure of confidential information and intellectual property, risks and opportunities.
defective products, production downtimes, supply shortages, and We have identified risks in this context, including, but not limited
compromised data (including personal data) through, for to, the following:
example, inappropriate usage of social media by employees – Failure to meet customer, partner, or other stakeholder
– Requirement to notify multiple regulatory agencies and comply expectations or generally accepted standards on climate change,
with applicable regulatory requirements and, where appropriate, energy constraints, and our social investment strategy
the data owner – Failure to achieve communicated targets for greenhouse gas
emissions
Any one or more of these events could have an adverse effect on – Failure to maintain our rating in sustainable investment indexes
our market position and lead to fines and penalties. In addition, this
could have an adverse effect on our business, reputation, financial If we do not meet stakeholder expectations in the areas
position, profit, and cash flows. identified, our rating in sustainable investment indexes might
decrease, which could have an adverse effect on our reputation,
Ethical Behavior: Unethical behavior and non-compliance with
profit, and share price.
our integrity standards by employees, other individuals,
U.S. Judgments: U.S. judgments may be difficult or impossible to
partners, or entities associated with SAP could seriously harm
enforce against us or our Board members.
our business, financial position, profit, and reputation.
SAP’s leadership position in the global market is founded on the Currently, except for Jennifer Morgan all members of SAP SE’s
long-term and sustainable trust of our stakeholders worldwide. Our Executive Board, and except for Diane Greene, Aicha Evans and Dr.
overarching approach is one of corporate transparency, open Gunnar Wiedenfels, all members of the Supervisory Board, are non-
communication with financial markets, and adherence to recognized residents of the United States. A substantial portion of the assets of
standards of business integrity. This commitment is formalized in SAP and our Board members are located outside the United States.
SAP’s CoBC and supporting guidelines. As a result, it may not be possible to effect service of process within
However, we might for instance encounter the following risks: the United States upon non-U.S. resident persons or SAP or to
– Non-compliance with our integrity standards and violation of enforce against non-U.S. resident persons judgments obtained in
compliance related rules, regulations, and legal requirements U.S. courts predicated upon the civil liability provisions of the
including, but not limited to, anticorruption and bribery legislation securities laws of the United States. In addition, awards of punitive
in Germany, the U.S. Foreign Corrupt Practices Act, the UK damages in actions brought in the United States or elsewhere might
Bribery Act, and other local laws prohibiting corrupt conduct be unenforceable in Germany.
– Unethical and fraudulent behavior by individual employees, other
individuals, partners, or entities associated with SAP leading to
criminal charges, fines, and claims by affected parties
– Collusion with external third parties, for example by aiding in
securing business
16
Financial Risks Any one or more of these events could have an impact on the
value of our financial assets, which could have an adverse effect on
Sales and Revenue Conditions: Our sales and revenue conditions our business, financial position, profit, and cash flows.
are subject to market fluctuations and our forecasts might not
be accurate. Use of Accounting Policies and Judgment: In our accounting,
management uses policies and applies estimates. This could
Our revenue and operating results can vary and have varied in the
negatively affect our business, financial position, profit, and cash
past, sometimes substantially, from quarter to quarter. Our revenue
flows.
in general, and our software revenue in particular, is difficult to
forecast for a number of reasons, and could lead to risks related to To comply with IFRS, management is required to establish and
the following, among others: apply accounting policies as well as to apply judgment, including but
– Challenges in pipeline development and realization not limited to making and using estimates and assumptions. The
– Long sales cycles for many of our products policies and judgment affect our reported financial figures.
– Timing issues with respect to the introduction of new products This use of policies and judgment could lead to risks in the
and services or product and service enhancements by SAP or our following areas, among others:
competitors – New pronouncements by standard setters and regulators as well
– Large size, complexity, and extended settlement of individual as changes in common practice or common interpretations of
customer transactions existing standards might force us to change existing policies.
– Introduction/adaptation of licensing and deployment models Where such changes trigger significant changes to our processes,
such as cloud subscription models we might struggle to implement the changes in a timely manner.
– Adoption of, and conversion to, new business models, leading – The facts and circumstances, as well as the assumptions on
from upfront payment models to an increase in pay-per-use or which our management bases its judgment might change over
subscription-based payment models, thus the respective service time, requiring us to change the judgment previously applied.
period typically ranges from one to three years, and goes up to
five years Both of the above risks could result in significant changes to our
– Changes in customer budgets or seasonality of technology reported financials, and could have an adverse effect on our
purchases by customers, or customer solvency challenges due business, financial position, profit, and cash flows.
for example to political instability Currency, Interest Rate, and Share Price Fluctuation: As a
– Decreased software sales that could have an adverse effect on globally operating company, SAP is subject to various financial
related maintenance and services revenue growth risks related to currencies, interest rates, and share price
– Shortfall in anticipated revenue or delay in revenue recognition or fluctuations, which could negatively impact our business,
deployment models that require revenue to be recognized over financial position, profit, and cash flows.
an extended period of time
Because we operate throughout the world, a significant portion of
– Inability of acquired companies to accurately predict their sales
our business is conducted in foreign currencies. In 2019,
pipelines
approximately 72.6% of our revenue was attributable to operations
in foreign currencies. This foreign currency business therefore gets
In recent years, the trend has been towards an increased number
translated into our reporting currency, the euro.
of sales transactions, with the average deal size remaining more or
This could lead to the following risks, among others:
less constant. However, the loss or delay of one or a few large
– Period-over-period fluctuations
opportunities could have an adverse effect on our business, financial
– Exchange rate risks with currency appreciation or depreciation,
position, profit, and cash flows.
or risks related to currency devaluation (legal and/or
Liquidity: External factors could impact our liquidity and increase administrative changes to currency regimes)
the default risk associated with, and the valuation of, our – Interest rate fluctuation
financial assets. – Share price fluctuation impacting cash outflows for share-based
Macroeconomic factors such as an economic downturn could compensation payments
have an adverse effect on our future liquidity. We use a globally
centralized financial management approach to control financial risk, Any one or more of these events could have an adverse effect on
such as liquidity, exchange rate, interest rate, counterparty, and our business, financial position, profit, and cash flows.
equity price risks. The primary aim is to maintain liquidity in the Insurance: Our insurance coverage might not be sufficient and
SAP Group at a level that is adequate to meet our obligations at any uninsured losses may occur.
time.
We maintain insurance coverage to protect us against a broad
However, adverse macroeconomic factors could increase the
range of risks, at levels we believe are appropriate and consistent
default risk associated with the investment of our total Group
with current industry practice. Our objective is to exclude or
liquidity, and could lead to the following risks, among others:
minimize risk of financial loss at reasonable cost.
– Group liquidity shortages
Nevertheless, we could still be subject to risks in the following
– Inability to repay financial debt
areas, among others:
– Increased default risk of financial investments, which might lead
– Losses that might be beyond the limits, or outside the scope of
to significant impairment charges in the future
coverage of our insurance and that may limit or prevent
– Limitation of operating and/or strategic financial flexibility
indemnification under our insurance policies
– Inability to maintain adequate insurance coverage on
commercially reasonable terms in the future
17
– Certain categories of risks that are currently not insurable at of management’s attention and resources, resulting in a decline in
reasonable cost our results of operations and our stock price.
– No assurance of the financial ability of the insurance
companies to meet their claim payment obligations Human Capital Risks
Human Workforce: If we are unable to attract, develop, retain,
Any one or more of these events could have an adverse effect on
and effectively manage our geographically dispersed workforce,
our business, financial position, profit, and cash flows.
we might not be able to run our business and operations
Venture Capital: We could incur significant losses in connection efficiently and successfully, or develop successful new solutions
with venture capital investments. and services.
Through Sapphire Ventures, our consolidated venture investment Our success is dependent on appropriate alignment of our
funds, we plan to continue investing in new and promising planning processes for our highly skilled and specialized workforce
technology businesses. and leaders, both male and female, adequate resource allocation,
This could lead to risks in the following areas, among others: and our location strategy with our general strategy. In certain
– Investments could generate net losses and/or require additional regions and specific technology and solution areas, we continue to
expenditures from their investors. set very high growth targets, depending on short-term and long-
– Changes to planned business operations might affect the term skill requirements, taking infrastructure needs as well as local
performance of companies in which Sapphire Ventures holds legal or tax regulations in consideration. Successful retention and
investments. expansion of our highly skilled and specialized workforce in
– Tax deductibility of capital losses and impairment in connection identified strategic areas, are key success factors for our transition
with equity securities are often restricted and could therefore to become the Experience Company powered by the Intelligent
have an adverse effect on our effective tax rate. Enterprise. The availability of such personnel as well as business
experts is limited and, as a result, competition in our industry is
Any one or more of these events could have an adverse effect on intense.
our business, financial position, profit, and cash flows. We could face risks in the following areas, among others:
Market Price Volatility: The market price for our ADRs and – Failure to apply workforce planning processes, adequate resource
ordinary shares may be volatile. allocation, and location strategy in alignment with our general
strategy
The market prices of our ADRs and ordinary shares have
– Failure to identify, attract, develop, motivate, adequately
experienced and may continue to experience significant volatility in
compensate, and retain well-qualified and engaged personnel to
response to various factors including, but not limited to:
scale to targeted markets
– unauthorized or inadvertent premature disclosure of confidential
– Failure to successfully maintain, upskill, and expand our highly
information, including information concerning pending
skilled and specialized workforce
acquisition negotiations or acquisition rumors;
– Poor succession management or failure to find adequate
– fines, penalties or civil liabilities as a result of potential
replacements
compliance violations in the context of alleged facts in ongoing or
– Loss of key personnel of acquired business
future investigations;
– Failure to meet short-term and long-term workforce and skill
– proposed and completed acquisitions or other significant
requirements including achievement of internal gender diversity
transactions by us or our competitors;
objectives
– the announcement of new products or product enhancements by
– Lack of appropriate or inadequately executed benefit and
us or our competitors;
compensation programs
– technological innovation by us or our competitors;
– Lack of availability and scalability of business experts and
– quarterly variations in our results or our competitors’ results of
consultants
operations or results that fail to meet market expectations;
– Mismatch of expenses and revenue due to changes in headcount
– changes in revenue and revenue growth rates on a consolidated
and infrastructure needs, as well as local legal or tax regulations
basis or for specific geographic areas, business units, products or
– Challenges with effectively managing a large distribution network
product categories;
of third-party companies
– changes in our externally communicated outlook and our
midterm ambitions;
Any one or more of these events could reduce our ability to
– changes in our capital structure, for example due to the potential
attract, develop, retain, and effectively manage our geographically
future issuance of additional debt instruments;
dispersed workforce, which in turn could have an adverse effect on
– general market conditions specific to particular industries;
– litigation to which we are a party;
– cybersecurity attacks and breaches;
Operational Business Risks
– general and country specific economic or political conditions
(particularly wars, terrorist attacks, etc.); and general market Sales and Services: Sales and implementation of SAP software
conditions. and services, including cloud, are subject to a number of
Many of these factors are beyond our control. In the past, significant risks sometimes beyond our direct control.
companies that have experienced volatility in the market price of A core element of our business is the successful implementation
their stock have been subject to shareholder lawsuits, including of software and service solutions. The implementation of SAP
securities class action litigation. Any such lawsuits against us, with software and cloud-based service deliveries is led by SAP, by
or without merit, could result in substantial costs and the diversion partners, by customers, or by a combination thereof.
18
However, we might encounter risks in the following areas, among – Partners might not renew agreements with us, or not enter into
others: new agreements on terms acceptable to us or at all or start
– Implementation risks, if, for example, implementations take competing with SAP
longer than planned, or fail to generate the profit originally – Failure to enable or train sufficient partner resources to promote,
expected, scope deviations, solution complexity, individual sell, and support to scale to targeted markets
integration and migration needs or functional requirement – Partners might not develop a sufficient number of new solutions
changes, or insufficient milestone management and tracking and content on our platforms or might not provide high-quality
leading to delays in timeline, maybe even exceeding maintenance products or services to meet customer expectations.
cycles of solutions in scope – Partners might not embed our solutions sufficiently enough to
– Insufficient or incorrect information provided by the customer, profitably drive product adoption, especially with innovations
subsequently leading to requirement or technology mismatches such as SAP S/4HANA, SAP C/4HANA, and SAP Cloud Platform.
– Insufficient customer expectation management, including scope, – Partners might not adhere to applicable legal and compliance
integration capabilities and aspects, as well as lack in purposeful regulations.
selection, implementation, and utilization of SAP solutions – Partners and their products might not meet quality requirements
– Lack of customer commitments and respective engagements, expected by our customers or SAP.
including lack of commitment of resources, leading to delays or – Partners might not transform their business model in accordance
deviations from recommended best practices with the transformation of SAP’s business model in a timely
– Challenges to effectively implement acquired technologies manner.
– Challenges to achieve a seamlessly integrated and aligned – Partners might not be able or might not have capacity to meet
service delivery in complex deliveries or implementations, for customer expectations in terms of service provisioning.
example due to lack of insights especially in the event of limited – Partners might fail to comply with contract terms in embargoed
project involvement of SAP or high-risk countries.
– Protracted installation or significant third-party consulting costs
– Improper calculations or estimates leading to costs exceeding If one or more of these risks materialize, this might have an
the fees agreed in fixed-price contracts adverse effect on the demand for our products and services as well
– Unrenderable services committed during the sales stage as the partner’s loyalty and ability to deliver. As a result, we might not
– Delayed customer payments due to differing perception on be able to scale our business to compete successfully with other
project outcome/results or customer solvency challenges vendors, which could have an adverse effect on our reputation,
– Inadequate contracting and consumption models based on business, financial position, profit, and cash flows.
subscription models for services, support, and application
Cloud Operations: We may not be able to properly protect and
management
safeguard our critical information and assets, business
– Deviations from standard terms and conditions, which may lead
operations, cloud offerings and portfolio presentation, and
to an increased risk exposure
related infrastructure against disruption or poor performance.
– Statements on solution developments might be misperceived by
customers as commitments on future software functionalities SAP is highly dependent on the availability of our infrastructure,
and the software used in our cloud portfolio is inherently complex.
Any one or more of these events could have an adverse effect on This could lead to risks impacting successful cloud operations,
our business, financial position, profit, and cash flows. such as:
– Capacity shortage and SAP’s inability to deliver and operate
Partner Ecosystem: If we are unable to scale, maintain, and cloud services in a timely and efficient manner as expected by or
enhance an effective partner ecosystem, revenue might not committed to our customers
increase as expected. – Customer concerns about the ability to scale operations for large
An open and vibrant partner ecosystem is a fundamental pillar of enterprise customers
our success and growth strategy. We have entered into partnership – Incomplete cloud portfolio representation or strategic directions
agreements that drive co-innovation on our platforms, profitably of cloud operations that may not fully meet customer demands
expand all our routes to market to optimize market coverage, and potentially lead to a disconnected customer orientation
optimize cloud delivery, and provide high-quality services capacity in – Lack of hyperscaler availability and/or infrastructure stability,
all market segments. Partners play a key role in driving market which may lead to challenges in meeting Service Level
adoption of our entire solutions portfolio, by co-innovating on our Agreement (SLA) commitments
platforms, embedding our technology, and reselling and/or – Lack of sufficient ‘future skills’ for delivering and operating hybrid
implementing our software. environments
These partnerships could lead to risks in the following areas, – Lack of tools to manage and optimize operations while providing
among others: a seamless end-to-end experience to customers
– Failure to establish and enable a network of qualified partners – Local legal requirements or changes to data sovereignty may lead
supporting our scalability needs to customers considering a reallocation of their primary or
– Failure to get the full commitment of our partners, which might disaster recovery landscapes to a different data center
reduce speed and impact in market reach – Defects or disruption to data center operations or system
– Products or services model being less strategic and/or attractive stability and availability
compared to our competition – The certification provisioning may not always be exhaustively
published in the SAP Trust Center and subsequently lead to
incorrect customer perceptions
19
– Interruptions in the availability of SAP’s cloud applications increased investments, coordination, and resources are required to
portfolio could potentially impact customer service level achieve our objective of ensuring over time that our cybersecurity
agreements infrastructure meets or exceeds evolving industry standards.
– System outages or downtimes, failure of the SAP network due to Achieving this objective will require continued effort and vigilance,
human or other errors, security breaches, or variability in user including sustained investment of money and management
traffic for cloud applications resources in order to support the ongoing development and
– Hardware failures or system errors resulting in data loss, maintenance of systems that meet these standards. As a result, we
corruption, or incompletion of the collected information are subject to risks and associated consequences in the following
– Loss of the right to use hardware purchased or leased from third areas, among others:
parties could result in delays in our ability to provide our cloud – Identified or undetected cybersecurity defects and vulnerabilities
applications – Increased complexity and risk of exploitation due to utilization of
– Scalability demands on infrastructure and operation could lead to open-source software components
cost increase and margin impacts – Exposure of our business operations and service delivery due to a
– Non-adherence to our quality standards in the context of partner number of threats, including virtual attack, disruption, damage,
co-location of data centers and/or unauthorized access, theft, destruction, industrial and/or
– Increased Total Cost of Ownership (TCO) for SAP economic espionage, serious or organized crime, and other illegal
– Customers’ cloud service demands might not match our data activities, as well as violent extremism and terrorism
center capacity investments – Abuse of data, social engineering, misuse, or trespassers in our
– Non-compliance with applicable certification requirements, such facilities, or systems being rendered unusable
as Payment Card Industry Data Security Standard (PCI DSS) – State-driven economic espionage or competitor-driven industrial
espionage, and criminal activities including, but not limited to,
Any one or more of these events could have a material adverse cyberattacks and breaches against cloud services and hosted on-
effect on our business, financial position, profit, and cash flows. premise software, whether managed by us or our customers,
partners, or other third parties
Cybersecurity and Security: A cybersecurity attack or breach, or
– Disruptions to back-up, disaster recovery, or business continuity
cybersecurity vulnerabilities in our products, infrastructure, or
management processes
services, or economic espionage could result in significant legal
– Disruptions due to exposure of our network systems to
and financial exposure and have a material adverse effect on our
cybersecurity attacks via defects and vulnerabilities in the IT
customers, partners, financial performance, profit, cash flows,
systems of our customers, or in the systems of third parties that
operations, brand, reputation, competitive position, the
facilitate our business activities such as cloud service providers,
perception of our products and services by current and
including those that are beyond SAP’s cybersecurity
prospective customers, and our business in general.
infrastructure and protocols
As we continue to grow organically and through acquisitions, – Failure to securely and successfully deliver cloud services by any
deliver a full portfolio of solutions via the cloud, host or manage cloud service provider could have a negative impact on customer
elements of our customers’ businesses in the cloud, process large trust in cloud solutions
amounts of data and offer more mobile solutions to users, in each – Cybersecurity threats for SAP and customers due to delayed or
case either directly or through partners and other third parties, we insufficient responses to identified cybersecurity issues
face a progressively more complex and threatening cybersecurity attributable to complexity, interdependencies or other factors
environment. The severity of the challenges posed by this – Challenges in effectively synchronizing cybersecurity processes
cybersecurity environment is amplified due to the increasingly across our various lines of business in a heterogeneous
sophisticated and malicious global cybersecurity threat landscape in environment
which we operate, including third-party data, products, and services – Insufficient or ineffective asset management potentially
that we incorporate into SAP products and services, and the endangering secure operations
continually evolving and increasingly advanced techniques – Customer systems or systems operated by SAP being
employed by threat actors targeting IT products and businesses in compromised by vulnerabilities due to threat actor exploitation
general. Such threat actors include, but are not limited to, highly – Operational disruptions due to an increasing number of
sophisticated parties such as nation-states and organized criminal destructive malware, ransomware, or other cybersecurity attacks
syndicates. As a leading cloud company and service provider to – Breach of cybersecurity measures due to, for example but not
some of the largest and best-known customers in the world, we are limited to, employee error or wrongdoing, system vulnerabilities,
naturally a prominent target for cybersecurity attacks. We have malfunctions, or attempts of third parties to fraudulently induce
observed increased threat activity to our products and systems, and employees, users, partners, or customers to gain access to our
we experience cybersecurity attacks of varying types and degrees systems, data, or customers’ data
on a regular basis. When we become aware of unauthorized access – Failure to maintain a sufficient complement of personnel with
to our systems, we take steps intended to identify and remediate the sufficient levels of knowledge, experience, and training in
source and impact of the incursions, and steps to comply with cybersecurity matters necessary to support SAP’s evolving
related necessary notification and disclosure obligations. To date, cybersecurity needs and commensurate with the increasingly
none of the incursions we have identified has had a material adverse complex and sophisticated threat landscape
effect on our business. However, we do not have visibility into all – Increased challenges due to an expanding and morphing cyber-
unauthorized incursions, and our systems may be experiencing attack surface attributable to interconnected technologies such
ongoing incursions of which we are not aware. In addition, while we as Internet of Things (IoT) accompanied by an elevation of entry
are continually taking steps to enhance our cybersecurity defenses, and endpoints
20
– Expansion of cybersecurity attack surface due to increased portfolio, harmonizing our user interface design and technology,
connectivity of operational data integrating acquired technologies and products, or bringing
– Material recovery costs as well as significant contractual and packages, services, or new solutions based on the SAP HANA
legal claims by customers, partners, authorities (including state, platform as well as SAP Cloud Platform to the market.
federal, and non-U.S.), and third-party service providers which – New products, services, and cloud offerings, including third-party
could expose us to significant expense and liability and/or result technologies, might not comply with local standards and
in the issuance of orders, judgments, or consent decrees that requirements or might contain defects or might not be mature
could require us to modify our business practices enough from the customer’s point of view for business-critical
– Material costs to attempt to detect, prevent, and mitigate any solutions after shipment despite all the due diligence SAP puts
successful attacks, including but not limited to the costs of third- into quality.
party legal and cybersecurity experts and consultants, insurance – Inability to define and provide adequate solution packages and
costs, additional personnel and technologies, organizational scope for all customer segments
changes, and incentives to customers and partners to – Inability of algorithms to correctly adapt to evolving
compensate for any losses and/or retain their business circumstances may lead to adverse decision-making processes in
– Increasing sophistication, proliferation, and escalation in the context of artificial intelligence related technologies
frequency, severity, and impact of cybersecurity attacks – Inability to fulfil expectations of customers regarding time and
– Inability to discover a cybersecurity breach or a loss of quality in the defect resolution process
information either fully, in a timely manner, for a significant – Lack of customer references for new products and solutions
amount of time after the breach, or at all
– Inability to anticipate attacks or implement sufficient mitigating Any one or more of these events could have an adverse effect on our
measures business, financial position, profit, and cash flows.
– Insufficient investment, coordination, or resources to achieve our
objective of ensuring over time that our cybersecurity Strategic Risks
infrastructure meets or exceeds evolving industry standards, and
Market Share and Profit: Our market share and profit could
defending against the ever-evolving and emerging threat
decline due to increased competition, market consolidation,
landscape
technological innovation, and new business models in the
– Material costs and time associated with enhancing our
software industry.
cybersecurity infrastructure, which may impact the ongoing pace
of development and delivery of our products and services, and The market for cloud computing is increasing and shows strong
our financial performance growth relative to the market for on-premise solutions. To maintain
– Failure to integrate SAP’s cybersecurity infrastructure and or improve our operating results in the cloud business, it is
protocols with other network systems obtained through important that our customers renew their agreements with us when
acquisition, including addressing cybersecurity defects and the initial contract term expires and purchase additional modules or
vulnerabilities in acquired systems additional capacity, as well as for us to attract new customers.
– Failure to maintain SAP’s cybersecurity infrastructure and Additionally, we need to bring new solutions based on the SAP HANA
protocols in connection with the divestiture of businesses and business data platform, new technologies, as well as SAP Cloud
network systems from SAP Platform to the market in line with demands and ahead of our
– Inaccurate or incomplete third-party or SAP audit results, competitors. In particular, innovative applications supporting the
certifications, or representations concerning the adequacy of our Intelligent Enterprise such as SAP S/4HANA, SAP C/4HANA, or
cybersecurity infrastructure and protocols newer technologies such as Internet of Things, machine learning,
– Customer concerns and loss of confidence in the current or robotic process automation (RPA), which automates rule-based,
future security and reliability of our products and services, repetitive tasks, digital assistants (including voice recognition and
including cloud solutions, and the resulting termination of key interaction), and blockchain.
contracts by customers and partners Factoring in the aforementioned, this could lead to risks in the
following areas, among others:
Any one or more of these events could have a material adverse – Inability to successfully engage with on-premise customers on
effect on our business, financial position, profit, and cash flows. their cloud transformation journey with fully suitable solutions
and transformation services
Technology and Products: Our technology and/or products may – Inability to successfully execute our strategy for integrating
experience undetected defects, coding or configuration errors, hyperscalers
may not integrate as expected, or may not meet customer – Adverse revenue effects due to increasing cloud business and
expectations. conversions from on-premise licenses to cloud subscriptions
Our product strategy and development investment, including new from existing SAP customers, which could have an adverse effect
product launches and enhancements, are subject to risks in the on related maintenance and services revenue
following areas, among others: – Insufficient solution and service adoption together with increased
– Software products and services might not fully meet market complexity, as well as failures during the execution of our
needs or customer expectations intelligent enterprise strategy in the context of our portfolio for
– Software products and services from acquired companies might solutions and services could lead to a loss of SAP’s position as a
not fully comply with SAP quality standards leading cloud company and subsequently to reduced customer
– We might not be as fast as expected in integrating our platforms adoption.
and solutions, enabling the complete product and cloud service
21
– Customers and partners might be reluctant or unwilling to – Impairment of goodwill and other intangible assets acquired in
migrate and adapt to the cloud, or they might consider cloud business combinations
offerings from our competitors. – Non-compliance of the acquired company with regulatory
– Existing customers might cancel or not renew their contracts requirements, for example accounting standards, export control
(such as maintenance or cloud subscriptions) or decide not to laws, and trade sanctions, for which SAP with and by the
buy additional products and services. acquisition assumes responsibility and liability, including
– The market for cloud business might not develop further, or it potential fines and the obligation to remedy the non-compliance
might develop more slowly than anticipated.
– Strategic alliances among competitors and/or their growth- Any one or more of these events could have an adverse effect on
related efficiency gains in the cloud area could lead to our business, financial position, profit, and cash flows.
significantly increased competition in the market with regards to
Innovation: We might not be able to compete effectively if we
pricing and ability to integrate solutions.
strategize our solution portfolio ineffectively or if we are unable
– Price pressure, cost increases, and loss of market share through
to keep up with rapid technological and product innovations,
traditional, new, and especially cooperating competitors and
enhancements, new business models, and changing market
hyperscalers
expectations.
– Inability to achieve the planned margin increase in time as
Our future success depends on our ability to keep pace with
planned
technological and process innovations and new business models, as
well as on our ability to develop new products and services, enhance
and expand our existing products and services portfolio, and
integrate products and services we obtain through acquisitions. To
Mergers and Acquisitions: We might not acquire and integrate be successful, we are required to adapt our products and our go-to-
companies effectively or successfully. market approach to a cloud-based delivery and consumption model
To expand our business, we acquire businesses, products, and to satisfy increasing customer demand and to ensure an appropriate
technologies, and we expect to continue doing so in the future. Over level of adoption, customer satisfaction, and retention.
time, certain of these acquisitions have increased in size and in Considering preceding dependencies, this could lead to risks in
strategic importance for SAP. Management negotiation of potential the following areas, among others:
acquisitions and the integration of acquired businesses, products, or – Inability to bring new business models, solutions, solution
technologies demands time, focus, and resources of both enhancements, intelligent technologies, integrations and
management and workforce, and exposes us to unpredictable interfaces, and/or services to market before our competitors or
operational difficulties. at equally favorable terms
Acquiring businesses, products, and technologies may present – Inability to develop and sell new cloud products spanning various
risks to SAP, including risks related to the following areas, among organizations on time and in line with market demands due to
others: complexity in heterogeneous technical environments
– Incorrect information or assumptions during the due diligence – Inability to anticipate and develop technological improvements or
process for the acquisition (including information or assumptions succeed in adapting SAP products, services, processes, and
related to the business environment and/or business and business models to technological change, changing regulatory
licensing models) requirements, emerging industry standards, and changing
– Failure to integrate acquired technologies or solutions requirements of our customers and partners (especially with
successfully and profitably into SAP’s solution portfolio and innovations such as SAP S/4HANA, SAP C/4HANA, and
strategy SAP Cloud Platform) to support the intelligent enterprise
– Failure to successfully integrate acquired entities, operations, strategy
cultures, or languages, all within the constraints of applicable – Uncertainties regarding new SAP solutions, technologies, and
local laws business models as well as delivery and consumption models
– Unfulfilled needs of the acquired company’s customers or might lead customers to wait for proofs of concept or holistic
partners integration scenarios through reference customers or more
– Material unidentified liabilities of acquired companies (including mature versions
legal, tax, IP) – Lower level of adoption of our new solutions, technologies,
– Failure in implementing, restoring, or maintaining internal business models, and flexible consumption models, or no
controls, disclosure controls and procedures, and policies within adoption at all
acquired companies – Our product and technology strategy might not be successful, or
– Incompatible practices or policies (compliance requirements) our customers and partners might not adopt our technology
– Insufficient integration of the acquired company’s accounting, platforms, applications, or cloud services quickly enough or they
HR, and other administrative systems might consider other competing solutions in the market, or our
– Failure to coordinate or successfully integrate the acquired strategy might not match customers’ expectations, specifically in
company’s research and development (R&D), sales, marketing the context of expanding the product portfolio into additional
activities, and security and cybersecurity protocols markets.
– Debt incurrence or significant unexpected cash expenditures – Increasing competition from open source software initiatives, or
– Non-compliance with existing SAP standards including applicable comparable models in which competitors might provide software
product standards such as our open source product standards and intellectual property free and/or at terms and conditions
unfavorable for SAP.
22
– Inability to drive growth of references through customer use
cases and demo systems

23
ITEM 4. INFORMATION The following table sets forth our most significant subsidiaries based
on total revenues of SAP group in 2019. All of these subsidiaries are
ABOUT SAP wholly owned by SAP SE.
Country of
Name of Subsidiary Incorporation
Our legal corporate name is SAP SE. SAP SE is translated in
Germany
English to SAP European Company (Societas Europaea, or “SE”).
SAP SE is organized in the Federal Republic of Germany under SAP Deutschland SE & Co. KG, Walldorf Germany
German and European law, see “Item 10. Additional Information.” Rest of EMEA
Where the context requires in the discussion below, SAP SE also
LLC SAP CIS, Moscow Russia
refers to our predecessor or previous legal forms and names, as the
case may be, i.e. Systemanalyse und Programmentwicklung GbR SAP (Schweiz) AG, Biel Switzerland
(1972-1976), SAP Systeme, Anwendungen, Produkte in der SAP (UK) Limited, Feltham United Kingdom
Datenverarbeitung GmbH (1976-1988), “SAP Aktiengesellschaft SAP España – Sistemas, Aplicaciones y Productos en Spain
Systeme, Anwendungen, Produkte in der Datenverarbeitung” (1988 la Informática, S.A., Madrid
– 2005) and “SAP AG” (2005 – 2014). Our principal executive
SAP France, Levallois Perret France
offices, headquarters and registered office are located at Dietmar-
Hopp-Allee 16, 69190 Walldorf, Germany. Our telephone number is SAP Italia Sistemi Applicazioni Prodotti in Data Italy
Processing S.p.A., Vimercate
+49-6227-7-47474.
For (i) a description of our principal capital expenditures and SAP Nederland B.V., 's-Hertogenbosch The Netherlands
divestitures and the amount invested (including interests in other United States
companies) since January 1, 2019 until the date of this report and (ii) Ariba, Inc., Palo Alto USA
information concerning our principal capital expenditures and
Concur Technologies, Inc., Bellevue USA
divestitures currently in progress, including the distribution of these
investments geographically and the method of financing, see “Item SAP America, Inc., Newtown Square USA
4. Information About SAP – Description of Property – Capital SAP Industries, Inc., Newtown Square USA
Expenditures.”
SAP National Security Services, Inc., Newtown USA
Square
SuccessFactors, Inc., South San Francisco USA
Qualtrics, LLC, Wilmington USA
Rest of Americas
SAP Brasil Ltda., São Paulo Brazil
SAP Canada, Inc., Toronto Canada
Japan
SAP Japan Co., Ltd., Tokyo Japan
Rest of APJ
SAP Australia Pty Ltd., Sydney Australia
SAP China Co., Ltd., Shanghai China
SAP India Private Limited, Bangalore India
24
Strategy and Business Model
Overview of SAP – Create a new end-to-end customer experience through a
platform for Experience Management that allows businesses to
Founded in 1972, SAP is a global company headquartered in
collect, understand, and act on feedback across their customers,
Walldorf, Germany. Our legal corporate name is SAP SE. SAP is the
employees, products, and brands in real time. In particular, we
market leader in enterprise application software 1 and also the
enable companies to enhance feedback with analytics, so they
leading experience management, analytics, and business
not only can understand what is being said, but also why.
intelligence company. The SAP Group has a global presence and
– Achieve a step change in productivity through the next level of
employs more than 100,000 people.
automation in business processes powered by artificial
Our ordinary shares are listed on the Frankfurt Stock Exchange.
intelligence/machine learning (AI/ML) embedded in every part
American Depositary Receipts (ADRs) representing SAP SE
of the business process (across financials, supply chain,
ordinary shares are listed on the New York Stock Exchange (NYSE).
manufacturing, procurement, travel, and human resources). AI is
SAP is a member of Germany’s DAX and TecDAX as well as the Dow
defined as algorithms that learn from data without being
Jones EURO STOXX 50, the Dow Jones Sustainability Index World,
explicitly programmed, thus empowering enterprises to scale by
and the Dow Jones Sustainability Index Europe. As at
automating business processes. The key to doing so is improving
December 31, 2019, SAP was the most valuable company in the
the cycle time of business processes and injecting speed and
DAX and the 49th most valuable company globally based on market
increasing quality wherever possible.
capitalization. SAP was ranked as the most sustainable software
– Help companies engage their workforces by delivering total
company in the Dow Jones Sustainability Indices for the thirteenth
workforce engagement across full-time and contingent labor.
consecutive year.
At SAP, our commitment to our customers is to help them meet
SAP SE is the parent company of the SAP Group. As at
today’s challenges and prepare for anticipated challenges of the
December 31, 2019, the SAP Group comprised 264 companies that
future. SAP aims to deliver on these objectives by leveraging the
develop, distribute, and provide our products, solutions, and
power of data in SAP software with technologies such as AI/ML to
services. For a list of our subsidiaries, associates, and other equity
build powerful intelligent applications.
investments, see the Notes to the Consolidated Financial
Statements, Note (G.9).
Becoming the “Experience Company powered
Our Purpose by the Intelligent Enterprise”
Our software, technologies, and services address the three core
At SAP, our purpose is to “help the world run better and improve
elements of the intelligent enterprise for the 25 industries and the
people’s lives” by empowering our customers to create a better
12 lines of business (LoBs) we serve:
economy, society, and environment for the world.
– An intelligent suite of LoB applications that includes enterprise
In line with our purpose, we are committed to supporting the
resource planning (ERP) and digital supply chain management,
United Nations Sustainable Development Goals (UN SDGs).
as well as solutions for customer experience, intelligent spend
Technology-driven innovation underpins how SAP, together with our
management, and human experience management. The
customers and our partner ecosystem, can execute initiatives
intelligent suite is integrated and differentiated through industry-
across all 17 of the UN SDGs. Our goal is to lead the evolution of
specific business processes for end-to-end scenarios.
technology while also helping ensure that the focus remains on
– A business technology platform to help customers manage
taking responsibility for its outcomes and societal effects. Examples
data orchestration across their entire application footprint. This
of how we are doing this include the focus of social investments on
includes real-time visibility into distributed data silos using data
building digital skills and our guiding principles for artificial
management solutions and an open cloud platform as a
intelligence and governance.
business platform for integration and business process
innovation.
Our Strategy – An Experience Management (XM) platform, bringing together
SAP’s strategy is to be the Experience Company powered by experience data (X-data) and operational data (O-data) to help
the Intelligent Enterprise. 2 We believe every digital interaction is an organizations manage four core experiences – customer,
opportunity for a company to positively influence a customer. employee, product, and brand. This includes using API-based
Through these interactions, companies can measure “experiences” integration between XM and the intelligent suite to connect X-
– such as customer satisfaction, employee engagement, partner data with relevant O-data.
collaboration, and brand impact. These interactions are also For more information about the products and solutions offered
opportunities for companies to understand how end users and as part of our strategy framework, see the Products, Research &
customers perceive a vendor or a product. We want to help every Development, and Services section.
SAP customer thrive in today’s “experience economy” by equipping Our people are critical to delivering our strategy, as they are key
them with the technologies to become intelligent enterprises. in delivering innovations to help our customers transform. For more
Our vision for the intelligent enterprise, an event-driven, real- information, see the Employees section.
time business, focuses on three key objectives:
1
Enterprise application software is computer software specifically developed to support and automate business processes.
2
An “intelligent enterprise” is an event-driven, real-time business powered by technology that includes machine learning, blockchain, the Internet of Things, and analytics
capabilities to help scale innovation.
25
Acquisitions Sapphire Ventures
We will continue to focus on organic investments in technology In addition to our investments in organic growth and
and innovations that ensure sustainable growth of our solution acquisitions, SAP also supports entrepreneurs that aspire to build
portfolio to drive our short-term, mid-term, and long-term industry-leading businesses, through venture capital funds
ambitions. Additionally, we may make targeted acquisitions to managed by Sapphire Ventures. Sapphire Ventures manages over
complement our solution offerings and improve coverage in key US$3.5 billion and has invested in more than 160 companies. These
strategic markets. include growth-stage technology companies and early-stage
In January 2019, we acquired Qualtrics International, Inc., a venture capital funds. Sapphire Ventures pursues opportunities in
leader in the Experience Management (XM) software category that which it can help fuel enterprise growth by adding expertise,
enables organizations to thrive in today’s economy. The acquisition relationships, geographic reach, and capital. It places a particular
closed on January 23, 2019. Together, SAP and Qualtrics are focus on companies in Europe, Israel, and the United States. In
working to accelerate the new XM category by combining addition to our venture investments through Sapphire Ventures,
experience data and operational data to power the experience SAP also has the SAP.iO Fund, managed by Sapphire Ventures, that
economy. For more information about the Qualtrics segment, see focuses on strategic early-stage investments in enterprise software
the Notes to the Consolidated Financial Statements, Note (C.1). startups. As a part of the SAP.iO Fund, SAP has also committed to
For more information about the acquisition of Qualtrics invest up to 40% of the investable capital in underrepresented
International Inc., see the Notes to the Consolidated Financial groups in enterprise software to foster diversity and inclusion, such
Statements, Note (D.1). as startups founded or led by female entrepreneurs.
26
SAP’s Impact
We innovate software and technology solutions that help expertise, and intellectual property, products and services from our
empower our customers to become intelligent enterprises. For us, partner ecosystem, as well as the IT infrastructure we rely on.
delivering an intelligent enterprise and helping our customers thrive
in the experience economy are essential for a better, more Impact
productive world. By helping unlock the potential of innovation, we Our solutions enable impact at our customers and – through
support businesses and governments with having a positive impact them – in the world. The following are some examples of our impact
on the economies, societies, and environments in which they exist. in various areas.
In this way, we aim to fulfill our purpose of helping the world run
Economy
better and improving people’s lives.
SAP software supports the UN SDGs 8 (Decent Work and
Our Business Model Economic Growth); 9 (Industry, Innovation, and Infrastructure);
We create value by identifying the business needs of our 10 (Reduced Inequalities); and 12 (Responsible Consumption and
customers, then developing and delivering software, services, and Production) by helping companies provide jobs and strengthening
support that address these business needs. Through close industries and infrastructure. For example, SAP software helps:
collaboration with our customers and partners, we aim to ensure – Companies work better to bring economic prosperity and fairly
that our software creates value for our customers. By obtaining paid jobs to people around the world.
customer feedback, we strive to continuously improve our – Organizations optimize resource utilization, aspiring for a world
solutions, identify further business needs, and deliver enhanced with zero waste.
value to our customers. Society
SAP software supports the UN SDGs 1 (No Poverty); 2 (Zero
Results
Hunger); 3 (Good Health and Well-Being); 4 (Quality Education);
By developing software, providing our software and services to
5 (Gender Equality); 7 (Affordable and Clean Energy);
our customers, and engaging them in feedback, we generate results
11 (Sustainable Cities and Communities); and 16 (Peace, Justice,
for SAP such as growth, profitability, employee engagement, and
and Strong Institutions) by helping create a peaceful and just
customer loyalty.
society through better healthcare, education, and access to
Inputs technology. For example:
This process does not happen in a vacuum. It is enabled by
internal and external inputs, most importantly customer insights
and broader stakeholder dialogue, financial capital, employees’
27
– We are also deeply committed to empowering the world’s youth, waste and support sustainable management of water and
working adults, differently-abled people, and the unemployed sanitation for all.
with the right skills to thrive in the digital economy. Furthermore, we know there is power in collaboration and we
– Cities are facing growing populations and aging infrastructures. engage in a wide range of partnerships to address
SAP solutions for the Internet of Things can help manage and SDG 17 (Partnerships for the Goals).
monitor resources so that cities can run more sustainably and
help citizens enjoy more enjoyable, safer lives. Trade-Offs
At the same time, we are aware of potential negative impacts of our
Environment
business activities and strive to mitigate these. For example:
SAP software supports the UN SDGs 6 (Clean Water and – An acceleration of the digital divide could decouple societal
Sanitation); 13 (Climate Action); 14 (Life Below Water); and 15 (Life groups from entire segments of the economy, impacting
on Land) and helps protect the environment by addressing the need employment potential. SAP focuses our social investment
for water, clean energy, and responsible development. For example: activities on providing digital skills to underprivileged people.
– We are all affected by climate change. SAP technology is helping – We expect increasing energy consumption due to our own
our customers increase their overall resource productivity and growth and increasing digitization globally. We offer a green
transform their businesses to reduce carbon outputs. cloud to help reduce CO2 footprint. For more information, see the
– With the world population growing steadily, humanity will need to Energy and Emissions section.
provide water, food, and shelter to billions of people in the
coming years. SAP solutions help our customers reduce water
Measuring Our Success

We use the following financial and non-financial objectives to steer our company:
– Growth
– Profitability
– Customer loyalty
– Employee engagement
The table below provides an overview of the specific key performance indicators (KPIs) used to measure performance within these
objectives and compares this performance with our goals. In addition, we are committed to become carbon neutral in 2025 and therefore
regularly report and analyze the reduction in our carbon footprint. 3
Outlook and Results for 2019

2019 Outlook* 2019 Results
Strategic Objective KPI (non-IFRS, at constant currencies) (non-IFRS, at constant currencies)
Cloud revenue €6.7 billion to €7.0 billion €6.77 billion
Cloud and software revenue €22.4 billion to €22.7 billion €22.49 billion
Growth
Total revenue Strong increase, at a rate lower than €26.91 billion
operating profit
Profitability Operating profit €7.85 billion to €8.05 billion €7.95 billion
Customer Loyalty Customer Net Promoter Score +1 –6
Employee Engagement Employee Engagement Index 84% to 86% 83%
Carbon Impact Net greenhouse gas emissions 285 kt 300 kt
* The outlook was communicated in January 2019 and financial targets were raised in April. The 2019 outlook numbers above reflect the raised outlook from April 2019.
Note: A reconciliation of non-IFRS results to IFRS equivalent is available in the Performance Management System section.
3
Carbon emissions are part of the short-term incentive in Executive Board compensation as of fiscal year 2020.
28
Outlook for 2020
2019 Results 2020 Outlook
Strategic Objective KPI (non-IFRS) (non-IFRS, at constant currencies)
Cloud revenue €7.01 billion €8.7 billion to €9.0 billion
Growth Cloud and software revenue €23.09 billion €24.7 billion to €25.1 billion
Total revenue €27.63 billion €29.2 billion to €29.7 billion
Profitability Operating profit €8.21 billion €8.9 billion to €9.3 billion
Customer Loyalty Customer Net Promoter Score –6.0 Increase by three to five points
Employee Engagement Employee Engagement Index 83% 84% to 86%
Carbon Impact Net greenhouse gas emissions 300 kt 238 kt
Ambitions for 2023

2023 Ambition
Strategic Objective KPI (non-IFRS)
Cloud revenue More than triple compared to 2018

Growth
Total revenue More than €35 billion
Profitability Operating margin Increase the non-IFRS operating margin by one percentage point per year on average,
representing a total expansion of approximately 500 basis points compared to 2018
Customer Loyalty Customer Net Promoter Score Steadily increase
Employee Engagement Employee Engagement Index 84% to 86%
Carbon Impact Net greenhouse gas emissions 95 kt, with the goal of becoming carbon neutral by 2025
Seasonality
Our business has historically experienced the highest revenue in
the fourth quarter of each year, due primarily to year-end capital
purchases by customers. Such factors have resulted in 2019, 2018,
and 2017 first quarter revenue being lower than revenue in the prior
year’s fourth quarter. We believe that this trend will continue in the
near future and that our total revenue will continue to peak in the
fourth quarter of each year and decline from that level in the first
quarter of the following year. Unlike our on-premise software
revenues, our on-premise support revenues and cloud revenues are
less subject to seasonality.
29
Products, Research & Development, and Services
The Intelligent Enterprise Framework
The Intelligent Enterprise Framework illustrates a high-level view of our product portfolio.
intelligent technologies (Internet of Things, machine learning, and

Bringing Experience Management to the blockchain) on an open cloud platform, running in SAP data centers
Intelligent Enterprise and on selected hyperscalers. The platform’s business-centric
technologies are designed to enable integration and innovation
Product Innovation Strategy across the entire intelligent suite.
SAP invests in the following three types of innovation: Database and Data Management
– Continuous innovation involves incremental improvements to
existing offerings. SAP HANA
– Adjacent innovation describes enhancements to the existing The innovative architecture in SAP HANA allows both
portfolio using new technologies or applying existing knowledge transactional processing for data capture and retrieval, and
to new markets to gain new customers. analytical processing for business intelligence and reporting. It
– Transformative innovation occurs as a result of new trends, enables businesses to process and analyze live data and make
technologies, and business models. business decisions based on the most up-to-date information.
SAP HANA is available both on premise and as a service in the cloud
Experience with SAP Cloud Platform across multiple cloud environments. In
Experience Management (XM) refers both to the discipline of 2019, we released the latest SAP HANA innovations including
seeking out and closing the gaps found in the four core experiences enhanced capabilities in our data anonymization functionality and
of business – customer, product, employee, and brand – as well as hyperconverged infrastructure (HCI) certification. SAP HANA is also
technology. Qualtrics XM Platform represents the technology that the first major database optimized for Intel Optane DC persistent
came to SAP with the acquisition of Qualtrics International, Inc., in memory. As part of SAP’s own digital transformation, SAP
2019. completed the move of SAP SuccessFactors solutions to SAP HANA
Qualtrics XM Platform includes the following: in 2019.
– Qualtrics CoreXM provides a foundation for XM and aims to help
Enterprise Information Management
analyze experience data (X-data).
– Qualtrics CustomerXM brings new capabilities to support SAP solutions for enterprise information management (EIM)
specific use cases and help process customer feedback. provide capabilities to understand, integrate, cleanse, manage,
– Qualtrics EmployeeXM delivers new capabilities to gather associate, and archive data. This includes the on-premise solution
employee feedback and propose actions for human resources SAP Data Hub and the cloud service SAP Data Intelligence, which
(HR) to help improve the employee experience. have been designed to help businesses connect their siloed data
– Qualtrics ProductXM identifies consumers’ favorite products assets and manage the discovery, refinement, governance, and
based on feedback from users. orchestration of all data across a distributed data landscape. The
– Qualtrics BrandXM aims to make visible consumer sentiment data landscape can include SAP software systems (such as
towards a brand. SAP S/4HANA, SAP C/4HANA, and SAP BW/4HANA) as well as
third-party systems. SAP Data Intelligence also includes machine
Intelligence learning (ML) services and tooling.
The Business Technology Platform was introduced in 2019. It Analytics
provides solutions across four key technology areas: database and
Business analytics tools from SAP help customers get insights to
data management (SAP HANA); analytics (SAP Analytics Cloud);
enable them to adapt their businesses in real time.
application development and integration (SAP Cloud Platform); and
30
SAP Analytics Cloud decentralized networks. These blockchain technologies are
SAP Analytics Cloud is a cloud analytics solution running on integrated into SAP Cloud Platform.
SAP HANA that brings together the domains of business
intelligence, predictive capabilities, and enterprise planning.
Operations
Customers can discover, analyze, plan, and predict in one solution Integrated with SAP S/4HANA and built on an open cloud
and make decisions. It provides a single user experience across all platform to enable integration across heterogeneous environments,
devices to help customers make end-to-end business decisions. our operations offerings can connect to third-party applications and
data. Following the acquisition of Qualtrics in 2019, we added
SAP BusinessObjects Business Intelligence Experience Management (XM) capabilities to our operations
SAP BusinessObjects Business Intelligence (BI) suite is a set of solutions.
flexible and scalable self-service BI tools, designed to give customers
discovery and insights in real time. Customer
SAP Data Warehouse Cloud SAP C/4HANA

SAP C/4HANA is our customer experience suite. All five cloud
Released in 2019, SAP Data Warehouse Cloud is a cloud data
areas – commerce, marketing, service, sales, and customer data –
warehouse solution designed for business and IT users with
have been recognized by industry analysts as leaders in their
capabilities for data integration, database, data warehousing, and
analytics. It is an open solution built on SAP HANA. respective categories.
XM capabilities from Qualtrics have been integrated across the
SAP BW/4HANA suite, specifically within our commerce, marketing, sales, and service
SAP BW/4HANA is our on-premise data warehouse solution built offerings.
entirely on SAP HANA. It includes an analytics layer that processes
SAP S/4HANA
data directly in-memory on the database, instead of at the
application layer, as is the case with traditional analytical engines. SAP S/4HANA is our next-generation Intelligent ERP suite.
Running on SAP HANA, SAP S/4HANA includes intelligent
Application Development and Integration technologies and integrated business processes with real-time
Our open Business Technology Platform helps customers extend analytics to support rapid decision-making. Approximately 13,800
and integrate SAP applications with third-party solutions and build customers across 25 industries have chosen SAP S/4HANA. This
new business applications with intelligent capabilities at scale. represents a 24% increase year over year, up from 8,500 in 2017 and
11,100 in 2018. The suite provides software capabilities for human
SAP Cloud Platform resources, sales, service, procurement, manufacturing, asset
SAP Cloud Platform provides an integration and extension management, as well as research and development. In Q4/2019,
platform that allows customers to build solutions as cloud services, SAP updated the definition of SAP S/4HANA to more closely reflect
with intuitive tools and support to address industry and line-of- categories commonly covered by ERP. These categories include
business (LoB) processes. elements of digital supply chain management, finance/controlling,
and risk management. SAP S/4HANA is built with an open
Intelligent Technologies
architecture to connect to the entire SAP portfolio and beyond.
SAP uses the term intelligent technologies to describe tools and
technology designed to turn intelligence into business outcomes Flexible Deployment Options
such as ML, AI, Internet of Things (IoT), and blockchain. Intelligent
SAP offers a choice of SAP S/4HANA deployments – software as
technologies are embedded within our operations suite of
a service (SaaS), on premise, in a private cloud, or as a hybrid
applications and applied to processes that integrate both SAP and
deployment. SAP S/4HANA Cloud offers the advantages of SaaS,
third-party data and applications.
such as scalability and quarterly innovation updates, whereas
SAP Leonardo Internet of Things SAP S/4HANA on premise delivers updates on an annual cycle.
The SAP Leonardo IoT solution provides industry-specific In 2019, we also announced a go-to-market partnership with
business services and capabilities, designed to embed device and Microsoft called “Embrace” to accelerate customer adoption of
telemetry data into SAP applications. It also offers prepackaged SAP S/4HANA and SAP Cloud Platform on Microsoft Azure.
scenarios in the SAP Field Service Management solution in the Supply Chain
SAP C/4HANA suite, business scenario content templates, and
The SAP Digital Supply Chain portfolio offers an integrated suite
interoperability with hyperscalers, such as Amazon Web Services IoT
of solutions to help plan, design, manufacture, deliver, and operate
Core and Microsoft Azure IoT Hub.
products.
SAP Leonardo Artificial Intelligence
Integrated Business Planning
The SAP Leonardo Artificial Intelligence (AI) functionality has
SAP Integrated Business Planning for Supply Chain is a cloud-
already been integrated in the SAP portfolio, providing intelligent
based solution powered by SAP HANA and designed to deliver real-
capabilities in SAP S/4HANA, SAP C/4HANA, SAP Concur,
time supply chain planning capabilities for sales and operations,
SAP Fieldglass, and SAP SuccessFactors solutions, among others.
demand, response and supply planning, and inventory optimization.
SAP Leonardo Blockchain
Manufacturing
SAP Leonardo Blockchain capabilities are designed to enable
SAP Intelligent Asset Management solutions aim to help define,
open business collaboration across company boundaries in
plan, and monitor a service and maintenance strategy for physical
products and assets along the manufacturing lifecycle.
31
Human Resources (HR) technologies and the implementation of or transition to
SAP S/4HANA.
SAP SuccessFactors
SAP SuccessFactors solutions aim to increase the value of a Continuous Success
workforce by developing, managing, engaging, and empowering Our continuous success services support our cloud solutions and
people. In 2019, SAP changed the name of SAP SuccessFactors HCM on-premise software. We offer services to provide proactive,
Suite to SAP SuccessFactors Human Experience Management predictive, and preventive support across hybrid landscapes to help
(HXM) Suite, as XM functionality from Qualtrics has been integrated customers move to the cloud and make SAP S/4HANA their
into the software. Further, HXM solutions from SAP provide offerings Intelligent ERP of choice as well as bundled customer success
for core HR and payroll, talent management, employee experience, activities to accelerate cloud adoption.
people analytics, and workforce planning.
Intelligent Tools
Procurement We also provide intelligent tools to help guide and deliver
Our Intelligent Spend Management program brings together application management and administrative support for our service
SAP Ariba, SAP Concur, and SAP Fieldglass solutions. In 2019, we offerings.
strengthened integration between these solutions and
SAP S/4HANA to help customers manage the three primary Ecosystem
categories of supplier spending: procurement of indirect and direct
goods; travel and expense; and external workforce management.
Extending Our Reach Through a Broad Ecosystem
SAP’s ecosystem consists of more than 20,000 partners
SAP Ariba worldwide that build, sell, service, and run SAP solutions and
SAP Ariba solutions offer an online business-to-business technology.
marketplace. In 2019, we announced partnerships with Barclaycard Our partner ecosystem drives the bulk of SAP’s presence among
Commercial Payments, American Express, and Standard Chartered small and midsize enterprise (SME) customers. In 2019, SAP
Bank, establishing new payment and financial supply chain solutions announced a new initiative, Next-Generation Partnering, aimed to
on Ariba Network. make partnerships simpler and more profitable for the ecosystem.
Next-Generation Partnering emphasizes partner innovation and
SAP Fieldglass
monetization through SAP App Center, where customers can
SAP Fieldglass solutions are cloud-based applications for discover, try, buy, manage, and deploy trusted partner applications
contingent workforce management and services procurement. that extend their existing SAP technology and solutions.
SAP Concur
Investment in R&D
SAP Concur solutions aim to deliver a connected spend
SAP’s strong commitment to R&D is reflected in our expenditures
management system that encompasses travel, expense, invoice,
(see figure below).
compliance, and risk.
SAP Digital Business Services € millions | change since previous year

In addition to software and technology, SAP provides an entire
4,292
portfolio of services and support offerings designed to help
customers maximize the value of their SAP solutions in on-premise, 3,624
3,352
cloud, and hybrid environments. In 2019, we continued a process 3,044
that began in 2017 to simplify the SAP services and support portfolio 2,845
18%
and expand our range of intelligent tools to underpin services and
support offerings for the intelligent enterprise, including XM 10%
7% 8%
services. This simplification established three portfolio categories to 5%
address customers’ needs for as long as they use SAP software –
premium success, project success, and continuous success.
Premium Success
Our premium success services support large-scale 2015 2016 2017 2018 2019
transformation initiatives through a single, strategic, and customized
on-site engagement. Our team of SAP experts help customers In 2019, our IFRS R&D ratio, reflecting R&D expenses as a portion
design, deploy, adopt, and operate SAP solutions on premise, hybrid, of total operating expenses, decreased by 0.5 percentage points
or in the cloud. The offerings differ based on size of customer and (pp) to 18.6% (2018: 19.1%). Our non-IFRS R&D ratio increased by
intensity of engagement. 0.4pp to 19.8% year over year (2018: 19.4%). At the end of 2019, our
total full-time equivalent (FTE) headcount in development work was
Project Success
27,634 (2018: 27,060). Measured in FTEs, our R&D headcount was
Our project success services support the adoption of SAP
28% of total headcount (2018: 28%).
products and technologies. These include services to help deliver a
Total R&D expense not only includes our own personnel costs but
digital business strategy, preconfigured content for multiple
also the external costs of work and services from the providers and
industries or lines of business, best practices, methodologies, and
cooperation partners we work with to deliver and enhance our
tools. Further, these offerings also support the use of emerging
products. We also incur external costs for the following:
– Translating, localizing, and testing products
32
– Obtaining certification for products in different markets
– Patent attorney services and fees
– Consulting related to our product strategy
– Professional development of our R&D workforce
Patents
SAP actively seeks intellectual property protection for
innovations and proprietary information. Our software innovations
continue to strengthen our market position as a leader in business
solutions and services. Our investment in R&D has resulted in
numerous patents. As at December 31, 2019, SAP held a total of
more than 10,270 validated patents worldwide. Of these, 924 were
granted and validated in 2019.
While our intellectual property is important to our success, we
believe our business as a whole is not dependent on any particular
patent or a combination of patents.
33
Security, Data Protection, and Privacy
Meeting Today’s Data Protection applications approach focuses on security processes and controls
intended to ensure the secure design and architecture of our
Challenges applications. These processes are vital to avoid or detect and
Every day, organizations around the world trust SAP with their mitigate vulnerabilities at the earliest possible time and minimize the
data – either on their own premises, in the cloud, or when using risk of a security breach.
mobile devices while on the move. Our customers need to know that Our secure software development lifecycle is at the heart of this
we will keep that data safe, process it in a manner that complies with strategy. It provides a comprehensive methodological approach for
local legislation, and protect it from malicious use. incorporating security properties and capabilities into our
For this reason, data protection and IT security are of paramount applications, following a risk-based approach. We strive to align our
importance to us. We have implemented safeguards to help protect secure software development lifecycle to the recommendations of
the fundamental rights of everyone whose data is processed by SAP, the ISO/IEC 27034-1 standard for application security. Furthermore,
whether they are our customers, prospects, employees, or partners. for all solutions included in SAP’s innovation cycle, our process
In addition, we work towards compliance with all relevant legal framework for developing standard software as well as our controls
requirements for data protection. Our chief security officer and our for developing secure software are certified to comply with the
data protection officer (DPO) monitor the compliance of all activities ISO 27001:2013 and ISO 9001 standards.
in these areas. In 2019, the chief security officer and the DPO both
reported to SAP’s chief financial officer (CFO). Starting in 2020, the Secure Operations Strategy: Running Secure
chief security officer will report directly to our Co-CEO Christian Operations
Klein. Our secure operations strategy focuses on the security principles
To meet and ensure consistent data protection compliance and of “confidentiality, integrity, and availability” to support the overall
security, SAP has implemented a formal governance model in both protection of our business and our customers’ businesses. To help
areas that assigns clear responsibilities across the SAP Group. us achieve our mission to become the Experience Company
Relevant security topics are discussed during steering committee powered by the Intelligent Enterprise, we seek to mitigate
meetings attended by individual or multiple board members cybersecurity challenges through a comprehensive IT operations
numerous times each year. Our chief security officer also reports security framework. This includes system and data access, system
regularly to the Audit Committee of the Supervisory Board of SAP. security configuration, and security patch management, as well as
proactive security event management, threat hunting, and incident
Facing Increasing Risks in IT Security handling.
Safeguarding data is an increasingly challenging task today. Our secure operations strategy involves the implementation of
Companies are collecting and storing more data than ever before key security measures across all layers, including physical access
from more varied sources. Data now proliferates outside the four and process-integrated controls. Furthermore, our secure
walls of businesses with multiple exposed endpoints vulnerable to operations approach concentrates on the early identification of
attack. Moreover, the sheer number and sophistication of attacks deviations from the standards defined in our security framework.
facing businesses are at an all-time high and are increasing. We are Deviations are identified through a combination of automated and
seeing the “commercialization of hacking,” while at the same time, manual reviews that are performed by third parties as well as SAP
new advanced persistent threats can bypass many traditional employees.
security protection techniques. SAP’s security compliance strategy is also focused on integrating
the increasingly complex cybersecurity and data privacy-related
Establishing a Comprehensive Security laws and regulations around the world. SAP has established an
Vision internal control framework for DevOps and is undergoing many
external certification audits, such as System and Organization
For SAP and for our customers, security means more than just
Control (SOC) and International Organization for Standardization
addressing compliance demands. Companies need to be proactive
audits (ISO 9001, 27001, 27017, 27018, and 22301). This is important
when securing business-critical data and core information assets.
for us to build the necessary trust level for SAP’s customers and
Several of our security measures extend across the entire
regularly increase the security and compliance level through the
company and thus to all of our products and services. These
organization.
measures include, among other things, the regular training of our
employees on IT security, data protection, and privacy, including the Secure Company: Taking a Holistic Approach to
handling of confidential information and ensuring controlled and the Security of Our Business
restrictive access to customer information. In addition, we operate
At SAP, we take a holistic approach to the security of our
on a security strategy that is based on three cornerstones
company, encompassing processes, technology, and employees. At
concentrating on the security of our applications, operations, and
the heart of our secure company strategy are an information
organization:
security management system and a security governance model that
Secure Applications: Championing Application bring together different aspects of security. These include the
Security following three main areas:
– Security culture: Training, assessments, and reporting on these
Businesses use SAP applications to process mission-critical data,
efforts foster awareness and compliance with our security policy
which can be highly attractive to cyberattackers. Our secure
and standards.
34
– Secure environments: Industry-standard physical security Complying with Data Protection and
measures are in place to ensure the security of our data centers
and development sites so that we can protect buildings and
Privacy Legislation
facilities effectively. SAP respects and protects the fundamental right to data
– Business continuity: We maintain a corporate continuity protection and privacy when processing the personal data of
framework aimed at having robust governance in place at all employees, applicants, customers, suppliers, and partners. SAP
times and we review this framework on an annual basis to adapt must comply with relevant laws when processing personal data.
to new or changed business needs. While implementing appropriate security measures, we develop and
In addition to these important measures, our security pursue our data protection and privacy strategy in accordance with
mechanisms, such as authentication, authorization, and encryption, our business strategy. This strategy consists of four pillars that have
serve as a first line of defense. To secure the SAP software been implemented to help meet compliance with applicable data
landscape, we offer a portfolio of security products, services, and protection laws.
secure support as well as security consulting. These offerings help Our global data protection and privacy policy, mandatory global
our customers build security, data protection, and privacy data protection and privacy training for employees, global data
capabilities into their businesses. protection and privacy coordinator network, and the global data
Our solution portfolio, also available for customers, includes protection management system (DPMS) are designed to ensure that
identity and access management tools, a tool for detecting potential we comply with applicable data protection laws.
threats, an ABAP code vulnerability scanner, and solutions for Our policy outlines a group-wide minimum standard for data-
governance, risk, and compliance. protection-compliant processing of personal data. It defines
Furthermore, our SAP Trust Center site provides transparency for requirements for business processes that involve personal data and
our customers about how SAP helps to improve security, privacy, assigns clear responsibilities. The principles established by this
and compliance in cloud and on-premise landscapes. The site also policy take into account the requirements of the EU General Data
provides secure feedback mechanisms, for example to report a Protection Regulation (GDPR). They apply generally and globally to
potential security issue and invoke our incident or vulnerability all SAP Group affiliates. Additional data protection and privacy
management processes. requirements, if applicable, are adopted on a local level as necessary.
We actively monitor changes to applicable laws and regulations so
Shifting Customer and Regulatory that we can update our standards on an ongoing basis.
With our mandatory global data protection and privacy training
Requirements Demand an Integrated and established across SAP, covering all lines of businesses, we aim to
Sophisticated Approach drive data protection and privacy awareness of our employees.
The progressing transition from on premise to cloud-based Furthermore, we have renewed our global data protection and
business transfers additional responsibility to SAP and forms a privacy coordinator network (“DPPC network”) across all SAP
higher sensitivity for security in our customer base, especially in entities that process personal data. This DPPC network is designed
light of shifting national and international regulatory requirements. to ensure data protection and privacy compliance on local level.
As a result, we are evolving our strategy to focus even more on the Additional regional data protection and privacy coordinators support
following strategic commitments going forward, and we have begun the DPPC network in the assigned region to help drive compliance
taking steps to implement them. These commitments include (but with local data protection and privacy laws while monitoring changes
are not limited to): to applicable laws.
– Fundamentals secured: We will enhance incident, crisis, and Our DPMS conforms to the targets of the globally-recognized
disaster resiliency capabilities. standard for data protection management systems, BS 10012:2017.
– Customer focused: Among other enhancements, we will further Initially implemented at our global support organization, the DPMS
define and build a standard set of security features across has been successively rolled out and is now in place in all areas
products. critical to data protection. It covers almost all areas and countries in
– Services driven: We enable security through a simple but which SAP has operations and will be introduced in all acquired
thorough service catalog based on agile practices and increased companies. It is audited and certified on a yearly basis by the British
automation. Standards Institute and this audit last took place in 2019.
– Cloud readiness: We will focus on cloud-centricity, both internally We have implemented a wide range of measures intended to
and externally, through secure by design agile product protect data controlled by SAP and SAP customers from
development across all SAP areas. unauthorized access and processing, as well as from accidental loss
– Transparent and risk-based approach: We strive to manage and or destruction. Also, we are developing our products to support our
communicate SAP’s current and future cyberstates based on a customers in applying data protection requirements, including
risk-based approach. This includes the creation of an end-to-end GDPR.
supplier security assessment framework mitigating third party In 2019, SAP experienced three significant incidents in
risks. processing personal data – on our own behalf and on behalf of our
– Talent and execution excellence: We build new skill sets and customers – that were subject to GDPR or other applicable data
awareness among security experts, non-security experts, and protection laws and were reported to the competent authorities.
non-technical professionals.
35
Customers
Approaching Our Customers with Building Programs to Facilitate Customer
Empathy Feedback
We want our customers to see SAP as a company that listens and The Build Customers for Life program helps harmonize the
responds to their needs. We want to design and develop with their customer experience in postsales with ongoing implementation
needs in mind. We want them to experience a constantly improving projects, including customer success management, customer
SAP. service management, outage management, and one customer
To achieve this, we have implemented extensive programs to portal.
deepen our relationship with our customers to ensure we With our global cross-Board initiative Customer First, efforts
understand what works well and what can be improved in their have been made to improve the way we work and care for our
partnership with SAP. customers by supporting the organization in providing a consistent,
Measuring customer loyalty is a part of this program, and we use positive, end-to-end experience.
the Customer Net Promoter Score (Customer NPS) as one feedback Integrating XM across the organization, we significantly increased
mechanism to do so. This allows us to directly understand what our our capabilities to take actions from customer insights to deliver
customers are thinking and identify key pain points for action. business change. We launched the Insights to Action program, a
Reflecting the importance of customers to SAP, it is only logical that comprehensive collaboration that identified over 20 initiatives to
Customer NPS is one of our main KPIs. address systemic customer feedback.
In 2019, 68% of customers gave us a score of 7 or higher. This
means that a large majority of customers are satisfied or highly
satisfied with SAP. Because the percentage of customers that rated
us 9 or 10 is slightly smaller than the percentage of customers who
rated us 6 or below, our Customer NPS for 2019 is –6 (2018: –5). We
did not reach our target of +1 in 2019. While we have reported
Customer Net Promoter Score since 2012, we revamped our
program in 2018 with 2019 as the first full year of results. For 2019,
SAP set a very aggressive target against a stringent metric. As we
gather more insight on how the number reacts to the improvements
we are making, we will continue to get better in forecasting the
results. With our Experience Management (XM) innovations from
Qualtrics, we have more information from our customers than ever
and can react to it faster, helping us make changes that customers
can see and feel in their interactions with SAP and our software.
As we continue to receive open and direct feedback from our
customers, we are also incorporating XM across the company. In
particular, programs such as Customer First, Build Customers for
Life, and Insights to Action will continue to drive improvements. We
expect this continuous feedback to help us achieve our goal of
improving customer loyalty. Therefore, we aim to increase Customer
NPS by three to five points in 2020 and to steadily increase the score
through 2023 and beyond.
Starting in 2020, Customer NPS is included as a KPI in Executive
Board remuneration as part of the short-term incentive component.
For more information about executive compensation, see the
Compensation Report section.
For more information about the Customer NPS, see the
Performance Management System section.
36
Energy and Emissions
Being a Front-Runner for a Greener Way Total Net Carbon Emissions
of Working
SAP takes its environmental responsibilities seriously and strives kilotons CO2
to be a role model for sustainable business operations by running 455
our own operations cleaner and greener. In addition, we aim to
enable our customers to reduce their overall carbon emissions 380
through our software. 325

310 300
Our global environmental policy promotes a more productive use
of resources by providing transparency in environmental issues, -3%
-5%
driving efficiency, and leveraging transformational strategies. It also
outlines our environmental goals. -9%
The SAP Executive Board sponsor for sustainability, including -14%

climate change, is our chief financial officer (CFO). Our chief -16%
sustainability officer and our dedicated sustainability organization

coordinate our response to climate change, which includes
2015 2016 2017 2018 2019
assessing and managing climate-related risks and opportunities.
Facilities management staff design and operate our facilities based
on robust environmental standards. In addition, our IT operations In addition to our commitment to carbon neutrality, we have
personnel is committed to optimizing energy consumption in our derived annual targets for our internal operational steering.
data centers. We assess our environmental performance and risks in Compared to 2018, our carbon emissions slightly decreased,
quarterly management reviews. although our number of employees increased by 5.5%. While we
To be able to innovate and embed sustainability further, we continued our strategy to avoid and reduce our emissions wherever
regularly engage with various stakeholder groups such as non- possible, we did see a significant increase in business flights, due to
governmental organizations (NGOs), non-profit organizations business growth, which we only partially compensated for with
(NPOs), and academia. This notably includes an external carbon offsets. In 2019, our carbon emissions target of 285 kilotons
sustainability advisory panel comprised of expert representatives (kt) was exceeded by 15 kt.
from our customers, investors, partners, NGOs, and academia. Our focus on carbon emissions has contributed to a cumulative
To enable continuous improvement and to protect the cost avoidance of €298.6 million in the past three years, compared
environment, we are gradually introducing an ISO 14001-certified to a business-as-usual scenario based on 2007. We achieved 34% of
environmental management system (EMS) at SAP sites worldwide. this cost avoidance in 2019. In 2020, we plan to re-evaluate the
In 2019, our global EMS covered 55 sites in 30 countries. In 2025, calculation approach.
SAP aims to run an ISO 14001-certified EMS at 100% of its
Total Energy Consumption
company-owned sites. An energy management system certified by
the ISO 50001 standard is integrated with the existing
environmental management system at SAP’s headquarters in GWh
Germany.
965 950 955
Cutting Carbon Emissions 920 919
We are committed to making our operations carbon neutral by

2025. This target includes all direct emissions from running our
business as well as a selected subset of indirect emissions from
supply chains and services. 5%
4%
Furthermore, in 2017, SAP joined the Science Based Targets
initiative (SBTi) as the first German company to do so. We comply 0%
-2%
with the initiative’s ambitious requirements and are committed to -3%
reducing emissions by 85% by 2050 compared to the base-year
level 2016, including energy consumption of our products in use at
our customers. This target reflects the level of decarbonization 2015 2016 2017 2018 2019
required to keep the global temperature increase below 1.5°C
compared to pre-industrial temperatures. Strengthening Our “Green Cloud”
A number of initiatives harness innovative technologies to help us
At SAP, we have tied our business strategy to our environmental
run our operations in a way that reduces our impact on the
strategy by creating a “green cloud” powered by 100% renewable
environment. In addition, our investment in renewable electricity
electricity. As more business moves to the cloud, data centers are a
certificates and carbon credits enables us to support sustainability
key part of how SAP provides solutions to our customers. By using
projects across the globe.
our green cloud services, customers can significantly reduce their
carbon emissions. Given the increasing data center capacity and an
37
increasing energy consumption, our data centers have become a help to simplify system landscapes, increase their efficiency, and
primary focus of our carbon reduction efforts. The term data center create leaner operations.
refers to both SAP-owned and external data centers (co-location and With the new SAP Profitability and Performance Management
hypercale data centers). application powered by SAP HANA, we have integrated value chain
We have introduced initiatives to drive efficiency and innovation sustainability management and carbon footprint management to
with respect to our buildings, data center operations, and support our customers on their path to increased transparency and
infrastructure. This allowed us to maintain an efficient power usage help them combine non-financial and financial data into their
effectiveness (PUE) of 1.36 in our data centers in St. Leon-Rot, reporting and steering. For example, customers can improve their
Germany. The PUE is a ratio that describes the efficiency of a data real-time energy demand response for power demand management.
center, with 1.0 being the ideal. Furthermore, in 2019, SAP opened its SAP also works with customers to optimize their on-premise
new state-of-the-art data center in Walldorf, Germany. landscapes so that they consume less energy. We achieve this by
helping them decommission legacy systems, archive unused data,
Committing to 100% Renewable consolidate business applications, and virtualize their system
Electricity landscape.
Our commitment to 100% renewable electricity is crucial to
making our operations more sustainable. While SAP produces a
Driving Environmental Initiatives
small amount of renewable electricity through solar panels in some Throughout SAP
locations, we rely primarily on the purchase of renewable energy We continuously pursue strategies to help us achieve our goal of
certificates (RECs) to achieve our target of 100% renewable reducing emissions at a time of ongoing growth in our business. Key
electricity. We only invest in RECs with very high quality standards, initiatives for 2019 included the following:
which support renewable energy projects that meet robust criteria in
terms of environmental integrity, stakeholder inclusivity, and EKOenergy Certification
reporting and verification. Most of our renewable electricity is purchased on the electricity
market and is not produced by SAP. As recommended by the
Total Data Center Electricity
Greenhouse Gas Protocol and CDP, we actively look for the best
available quality. Therefore, all of our purchased renewable
GWh electricity is EKOenergy-certified. EKOenergy is a high-quality,
internationally recognized not-for-profit ecolabel for energy. It
Internal External
certifies electricity from renewable energy installations that fulfill
338 additional sustainability criteria. Through the purchase of
318 EKOenergy-certified electricity, we also contribute to EKOenergy's
249
265 Climate Fund, which finances solar projects tackling energy poverty.
243
138 161
60 65 86 Electric Vehicles
As a result of our business expansion, the number of SAP
employees eligible for a company car has increased annually. We
189 178 179 180 177 want to ensure that the resulting growth in our car fleet does not
undo our successes in cutting carbon emissions. To help address
this, SAP aims to increase the number of electric vehicles (battery
2015 2016 2017 2018 2019 electric vehicles and plug-in hybrid electric vehicles) in our company
car fleet from 9.6% at the end of 2019 (2018: 7%) to 20% by the end
Helping Our Customers Run Greener of 2020. Our aim is that by 2025, one-third of all company cars will
be more eco-friendly vehicles, such as electric or fuel cell cars.
Operations All electric company cars charged at SAP are powered with 100%
The vast majority of our overall carbon emissions result from the renewable electricity. In addition, in Germany we provide employees
use of our software. When our customers run SAP software on their with an incentive to switch to electric alternatives by offering a
hardware and on their premises, the resulting carbon emissions are battery subsidy that partially offsets the higher costs of an electric
about 40 times the size of our own net carbon emissions. To address vehicle. Furthermore, we continously expand and enhance the
this, we have developed a downstream emissions strategy to help charging infrastructure for our employees (2019: 750 charging
our customers, hardware providers, and others run greener stations; 2018: 550 charging stations).
operations. One of the most important ways we help our customers
reduce their energy usage and emissions is by managing their SAP Internal Carbon Pricing for Business Flights
systems through cloud services provided by our carbon-neutral In addition to avoiding business flights by investing in virtual
green cloud offerings. In addition, the solutions in our portfolio, such collaboration and communication technologies, we invest in carbon
as SAP Environment, Health, and Safety Management, enable our emission offsets for air travel in the majority of countries we travel
customers to manage their resources, such as electricity, more from by charging an internal carbon price.
efficiently. We only invest in carbon offset projects with Gold Standard or
The SAP HANA platform contributes to helping our customers other high-quality standards. In 2019, our offset effort resulted in a
cut their energy consumption. By combining the worlds of analytic compensation of 240 kt of emissions.
and transactional data into one real-time, in-memory platform, it can
38
Investment in Carbon Credits
In 2019, we continued to realize the benefits of our investment in
Description of Property
the Livelihoods Fund. Several years ago, we made a commitment to
invest €3 million covering a 20-year participation in a fund that Our principal office is located in Walldorf, Germany, where we own
supports social causes as well as the sustainability of agricultural and occupy approximately 460,000 square meters of office and
and rural communities worldwide. The returns from this unique datacenter space including our facilities in neighboring St. Leon-Rot.
investment in the Livelihoods Fund consist of high-quality carbon We also own and lease office space in various other locations in
credits. Following the success of this scheme, we now also invest in a Germany, totaling approximately 165,000 square meters. In
second Livelihoods Fund, committing another €3 million over the approximately 75 countries worldwide, we occupy roughly 1,850,000
next 30 years and thus increasing our commitment to sustainable square meters. The space in most locations other than our principal
initiatives. In 2019, the carbon credits we received from these funds office in Germany is leased. We also own certain real properties in
helped us to offset our carbon emissions by 30 kt. Newtown Square, Palo Alto and Colorado Springs (United States);
At the beginning of 2018, SAP pledged to plant five million trees Bangalore (India); Sao Leopoldo (Brazil); London (UK); Ra’anana
by 2025 in collaboration with various non-governmental (Israel) and a few other locations in and outside of Germany.
organizations. In 2019, we invested in 500,000 trees as part of our The office and datacenter space we occupy includes approxi-
carbon offsetting initiatives. mately 380,000 square meters in the EMEA region, excluding Ger-
many, approximately 425,000 square meters in the region North
Intellectual Property, and Latin America, and approximately 420,000 square meters in the
APJ Region.
Proprietary Rights and The space is being utilized for various corporate functions
including research and development, our data centers, customer
Licenses support, sales and marketing, consulting, training, administration
and messaging. Substantially all our facilities are being fully used or
sublet. For a discussion on our non-current assets by geographic
We rely on a combination of the protections provided by region see Note (D.6) to our Consolidated Financial Statements. Also
applicable statutory and common law rights, including trade secret, see, “Item 6. Directors, Senior Management and Employees —
copyright, patent, and trademark laws, license and non-disclosure Employees,” which discusses the numbers of our employees, in
agreements, and technical measures to establish and protect our FTE’s, by business area and by geographic region, which may be
proprietary rights in our products. For further details on risks related used to approximate the productive capacity of our workspace in
to SAP’s intellectual property rights, see “Item 3. Key Information — each region.
Risk Factors — Operational Risks.” We believe that our facilities are in good operating condition and
We may be dependent in the aggregate on technology that we adequate for our present usage. We do not have any significant
license from third parties that is embedded into our products or that encumbrances on our properties. We do not believe we are subject
we resell to our customers. We have licensed and will continue to to any environmental issues that may affect our utilization of any of
license numerous third-party software products that we incorporate our material assets. We are currently undertaking construction
into and/or distribute with our existing products. We endeavor to activities in various locations to increase our capacity for future
protect ourselves in the respective agreements by obtaining certain expansion of our business. Our significant construction activities are
rights in case such agreements are terminated. described below, under the heading “Principal Investments and
We are a party to patent cross-license agreements with several Divestitures Currently in Progress.”
third parties.
We are named as a defendant or plaintiff in various legal
proceedings for alleged intellectual property infringements. See Investments
Note (G.3) to our Consolidated Financial Statements for a more
detailed discussion relating to certain of these legal proceedings.
Principal Investments and Divestitures Currently
in Progress
In 2019, we finalized various construction projects and continued
and started new construction activities in several locations. We plan
to finance all of these projects from operating cash flow. Our most
important projects are listed below.
39
Construction Projects
€ millions
Country Location of Facility Short Description Estimated Costs Incurred as at Estimated

Total Cost 12/31/2019 Completion Date
Germany Berlin New office building for approx. 40 2 October 2022

1,000 employees
Germany Munich New office building for approx. 90 0 March 2023

600 employees
Brazil São Leopoldo New office building for approx. 33 2 March 2021
700 employees
Bulgaria Sofia New office building for approx. 46 1 October 2022

1,200 employees
India Bangalore New office building for approx. 84 0 December 2022

4,000 employees
US Seattle New office building for approx. 28 1 July 2020

1,850 employees
For more information about planned investment expenditures, Our investments for intangible assets such as acquired
see the Investment Goals section. There were no material technologies and customer relationships amounted to €1,954
divestitures within the reporting period. million in 2019 compared to €791 million in 2018 (2017: €227
million). Our investments allocated to goodwill increased to €5,017
Principal Investments and Divestitures for the million in 2019 from €1,620 million in 2018 (2017: €205 million). The
Last Three Years
increase in 2019 mainly results from the Qualtrics acquisition (see
Our principal investments for property, plant, and equipment Note (D.1) for additional information). The respective increase in
(other than from business combinations) amounted to €1,067 2018 was mainly due to the Callidus acquisition. For further details
million in 2019 (2018: €1,302 million; 2017: €1,196 million). Principal on investments related to acquisitions, see Notes (D.2) and (D.3) to
investments in 2019 for property, plant, and equipment decreased our Consolidated Financial Statements.
compared to 2018. The investments relate primarily to replacement For further information regarding the principal markets in which
and purchase of information technology equipment and the SAP conducts business, including a breakdown of total revenues by
construction and leasing of buildings and data centers. The increase category of activity and geographic market for each of the last three
from 2017 to 2018 was mainly due to replacement and purchase of years, see “Item 5. Operating and Financial Review and Prospects —
IT infrastructure (data centers, etc.) and the construction of new Operating Results (IFRS)” of this report.
buildings.
40
ITEM 4A. UNRESOLVED negotiations between the United States and China in the last quarter
of 2019 brought about a first trade deal and hopes of de-escalation,
STAFF COMMENTS but trade tensions between the United States on the one side and
the EU and Latin America on the other side remained unsolved. In
Brazil, despite some improvements in early 2019 and against
expectations, growth remained fragile throughout the year.
Not applicable.
In the Asia Pacific Japan (APJ) region, the Japanese economy
expanded on a steady but muted level all year, reports the ECB. Solid
ITEM 5. OPERATING AND domestic demand especially ahead of the value-added tax increase
effective October 1, 2019, posed as the main stabilizer of growth. In
FINANCIAL REVIEW AND China, economic activity slowed gradually over the year, caused by
lower-than-expected investment and the trade conflict with the
PROSPECTS United States.
The IT Market
Overview At the end of 2019, technology required for digital transformation
was no longer expensive and restricted to those businesses that
For information on our principal sources of revenue and how the
could afford it. Instead, enterprise applications had become
different types of revenue are classified in our income statement
fundamental, says International Data Corporation (IDC), a U.S.-
refer to Note (A.1) to our Consolidated Financial Statements.
based market research firm, in recent publications. 2) Enterprises
See “Item 4. Information about SAP — Products, Research &
were now required to continuously adapt to or drive disruptive
Development, and Services” for a more detailed description of the
changes in their operations, customers, and markets. They had to
products and services we offer.
balance digital and physical competencies and master them at scale,
The following discussion is provided to enable a better
creating new business models and digitally enabled products and
understanding of our operating results for the periods covered,
services.3)
including:
Furthermore, IDC describes a “platform economy” fueled by
– the factors that we believe impacted our performance in 2019;
tools, capabilities, and frameworks based upon the power of
– our outlook for 2019 compared to our 2019 actual performance
information, cognitive computing, and ubiquitous access. In 2019,
(non-IFRS);
leading organisations shifted to platform thinking in order to evolve
– a discussion of our operating results for 2019 compared to 2018
their business models and manage their technology architecture. At
and for 2018 compared to 2017;
the same time, several “megaplatforms” competed to own
– the factors that we believe will impact our performance in 2020;
infrastructure and developmental environments for providing
and
infrastructure as a service (IaaS).4)
– our financial targets and prospects.
The driving factors of these developments in 2019, according to
The preceding overview should be read in conjunction with the
IDC, were data, analytics, and machine learning. They revolutionized
more detailed discussion and analysis of our financial condition and
operations, providing major increases in productivity and efficiency
results of operations in this Item 5, “Item 3. Key Information — Risk
and thus value. Real-time data from mobile devices, the Internet of
Factors” and “Item 18. Financial Statements.”
Things (IoT), and other devices at the edge, combined with historical
data, global information, artificial intelligence (AI), and machine
Economy and the Market learning, continually enabled organizations to spread intelligence
from the core to the edge and maximize their business outcomes.3)
Global Economic Trends
Sources:
According to the European Central Bank (ECB), global economic
1)
European Central Bank, Economic Bulletin, Issue 8/2019, Publication Date:
growth decreased during the first half of 2019, marking the weakest December 27, 2019
period since the global financial crisis, but signs of stabilization (https://www.ecb.europa.eu/pub/pdf/ecbu/eb201908.en.pdf)
2)
IDC FutureScape: Worldwide IT Industry 2020 Predictions, Doc #US45599219,
started to emerge towards the end of the year.1) In our 2019 half-year
October 2019
report, we mentioned that the ECB had expected a longer phase 3)
IDC FutureScape: Worldwide Digital Transformation 2020 Predictions, Doc
until recovery. Escalating trade tensions and Brexit-related #US45569118, October 2019
4)
IDC FutureScape: Worldwide Intelligent ERP 2020 Predictions, Doc US44646019,
uncertainties, however, continued to impair economic growth during October 2019
the second half of the year.
For the Europe, Middle East, and Africa (EMEA) region, the ECB Impact on SAP
reports that growth in the euro area remained weak throughout the
Despite macroeconomic uncertainties, SAP again demonstrated
year at 1.2%. Some initial signs of stabilization – in line with previous
resilience, enjoying sustained growth and continued market
expectations – materialized only toward the end of the year. In
adoption. Benefitting from the ongoing digital transformation of its
central and eastern Europe, economic activity continued to be
customers, the rich portfolio of solutions, innovative and advanced
supported by solid consumer spending despite tight labor markets.
technologies as well as the freedom of choice for customers to run
The Russian economy performed better than expected in the third
their business in the cloud, on-premise or in a hybrid model, resulted
quarter of 2019.
in a remarkable full-year performance.
In the Americas region, the ECB saw economic activity expand
steadily in the United States due to a strong labor market and
supportive financial conditions. The resumption of trade
41
Performance Against Our Outlook for Outlook for 2019 (Non-IFRS)
2019 (Non-IFRS) At the beginning of 2019, we projected that our 2019 non-IFRS
cloud revenue would be between €6.70 billion and €7.00 billion at
As in previous years, our 2019 operating profit-related goals and
constant currencies (2018: €5.03 billion). This range represents a
published outlook were based on our non-IFRS financial measures at
growth rate of 33% to 39% at constant currencies. The Company
constant currencies. For this reason, in the following section we
expected full-year 2019 non-IFRS cloud and software revenue to be
discuss performance against our outlook only in terms of non-IFRS
in a range of €22.40 billion to €22.70 billion at constant currencies
numbers at constant currencies derived from IFRS measures. The
(2018: €20.66 billion). This range represents a growth rate of 8.5%
subsequent section about IFRS operating results discusses numbers
to 10% at constant currencies. We also projected our full-year non-
only in terms of the International Financial Reporting Standards
IFRS operating profit for 2019 would end between €7.70 billion and
(IFRSs), so the numbers in that section are not expressly identified
€8.00 billion (2018: €7.16 billion) at constant currencies. This range
as IFRS numbers.
represents a growth rate of 7.5% to 11.5% at constant currencies.
We expected a full-year 2019 effective tax rate (IFRS) of 26.5% to
27.5% (2018: 27.0%) and an effective tax rate (non-IFRS) of 26.0%
to 27.0% (2018: 26.3%).
In light of our first-quarter 2019 results and SAP’s new initiatives
to accelerate its operational excellence and value creation, we
adjusted, in April 2019, our outlook for full-year non-IFRS operating
profit for 2019 upward to range between €7.85 billion and
€8.05 billion at constant currencies. This range represents a growth
rate of 9.5% to 12.5% at constant currencies. In addition, SAP
expected total revenues to increase strongly, albeit at a rate lower
than operating profit (previously: slightly lower). Our projections for
cloud revenue (non-IFRS, at constant currencies) and for cloud and
software revenue (non-IFRS, at constant currencies) remained
unchanged.
42
2019 Actual Revenue and Profit Performance Compared to Outlook (Non-IFRS)
We hit the raised outlook for revenue and operating profit that we published in April.
Comparison of Outlook and Results for 2019

Outlook for 2019 Revised Outlook
(as Reported in for 2019 Results
Integrated Report 2018) (Q1 Quarterly Statement) for 2019
Cloud revenue €6.70 billion €6.70 billion

€6.77 billion
(non-IFRS, at constant currencies) to €7.00 billion to €7.00 billion
Cloud and software revenue €22.40 billion €22.40 billion

€22.49 billion
Total revenue strong increase, at slightly lower strong increase, albeit at lower
€26.91 billion
(non-IFRS, at constant currencies) rate than operating profit rate than operating profit
Operating profit €7.70 billion €7.85 billion

€7.95 billion
Effective tax rate (IFRS) 26.5% to 27.5% 26.7%
Effective tax rate (non-IFRS) 26.0% to 27.0% 26.2%
Despite economic and diplomatic tensions, arising particularly The cloud gross margin (non-IFRS) on our Intelligent Spend
from the trade conflict between China and the United States, and Group segment improved slightly by 0.2pp (on a constant currency
uncertainties regarding the possible outcome and effects of the basis), resulting in 78% for 2019.
Brexit negotiations, our new and existing customers in 2019 The cloud gross margin (non-IFRS) on our infrastructure as a
continued to show a strong willingness to invest in our solutions and service (IaaS) cloud offering continued to develop well in 2019. The
services. corresponding gross margin improved by 16.4pp on a constant
At constant currencies, non-IFRS cloud revenue grew from currency basis in 2019 to achieve a cloud gross margin (non-IFRS) of
€5.03 billion in 2018 to €6.77 billion in 2019 and therefore ended in 29%.
our guidance range of €6.70 billion to €7.00 billion. That represents Profitability in our software as a service/platform as a service
an increase of 35% at constant currencies. (SaaS/PaaS) cloud offering was 68% at constant currencies (non-
Our new cloud bookings, which are one of our measures for IFRS) for 2019. Despite ongoing investments in the further
cloud-related sales success and for future cloud revenue, increased development and harmonization of our various software as a
in 2019 to €2.27 billion (2018: €1.81 billion). This is an increase of service/platform as a service offerings on a single platform, we were
25% (21% on a constant currency basis). In addition to this strong able to increase the margin by 8.5pp.
growth, our cloud backlog (unbilled future revenue based on existing We saw efficiency improvements in both our cloud and traditional
cloud contracts) reached €12.4 billion (2018: €10.1 billion). This is an on-premise business, which drove continued operating profit
increase of 23% (20% on a constant currency basis). expansion. Non-IFRS operating profit in 2019 was €7.95 billion on a
Cloud and software revenue (non-IFRS) grew 9% at constant constant currency basis (2018: €7.16 billion), reflecting an increase
currencies to €22.49 billion (2018: €20.66 billion), and thus ended of 11%. As a result, we were able to surpass our excellent results
within our guidance range for 2019. This increase was mainly driven from 2018, despite our continued investment in our business
by strong cloud revenue growth as mentioned before. Software transformation during the reporting year. The positive development
licenses revenue decreased by 5% at constant currencies. of our operating profit was largely influenced by investment
Our total revenue (non-IFRS) on a constant currency basis rose decisions focused on customers and products which, among other
9% in 2019 to €26.91 billion (2018: €24.74 billion). Total revenue things, resulted in an increase in our overall headcount by 3,832 full-
(non-IFRS) therefore grew at a rate lower than operating profit (non- time equivalents (thereof 1,719 organic), primarily in research and
IFRS) as forecasted, which increased 11% at constant currencies in development, services, cloud, and sales. With these additional
2019. resources, we continued to make targeted investments in our
Operating expenses (non-IFRS) in 2019 on a constant currency innovation areas and growth markets. Thus, constant currency non-
basis were €18.95 billion (2018: €17.58 billion), an increase of 8%. IFRS operating profit amounting to €7.95 billion was within our
Our expense base in 2019 continued to be impacted by our outlook range raised in April (€7.85 billion to €8.05 billion).
transformation to a fast-growing cloud business. In our outlook for We achieved an effective tax rate (IFRS) of 26.7% and an effective
2019, we continued to expect to see the benefits from efficiency- tax rate (non-IFRS) of 26.2%, which is at the lower end of the range
based investments, and thus an increasing cloud gross margin. The of 26.5% to 27.5% (IFRS) and 26.0% to 27.0% (non-IFRS).
cloud gross margin for 2019 was 68%, an increase of 5.0pp on a
constant currency basis year over year. Despite continued
investment in our business transformation, the margin improvement
was primarily driven by increasing efficiency of our cloud offerings.
All cloud gross margins on our various cloud offerings developed
positively in 2019:
43
Operating Results (IFRS) from providing customers with technical support services and
unspecified software upgrades, updates, and enhancements. For
more information about our revenue types, see the Notes to the
Consolidated Financial Statements, Note (A.1).
This section on operating results (IFRS) discusses results only in
Cloud and software revenue grew from €20,622 million in 2018 to
terms of IFRS measures.
€23,012 million in 2019, an increase of 12%.
Our 2019 Results Compared to Our 2018 Cloud and Software

Results (IFRS)
€ millions | change since previous
Revenue 23,012
Total Revenue 20,622

19,549
18,424
Total revenue increased from €24,708 million in 2018 to 17,214
€27,553 million in 2019, representing an increase of €2,845 million,
or 12%.
20%
€ millions | change since previous 12%

27,553 7% 6% 5%
24,708
23,461
22,062
20,793
2015 2016 2017 2018 2019
18%
12%
Cloud revenue increased from €4,993 million in 2018 to
6% 6% 5% €6,933 million in 2019.
Cloud Revenue
2015 2016 2017 2018 2019 € millions | change since previous
6,933
The growth in revenue resulted primarily from a €1,939 million 110%
increase in cloud revenue to €6,933 million. Cloud and software
4,993
revenue represented 84% of total revenue in 2019 (2018: 83%).
Service revenue increased 11% from €4,086 million in 2018 to 3,769
€4,541 million in 2019, which was 16% of total revenue (2018: 17%). 2,993
2,286
Revenue by Revenue Type
39%
31% 32%
26%
€ millions
Cloud 6,933 2015 2016 2017 2018 2019
Software Licenses 4,533 Our software licenses revenue declined by €114 million from
€4,647 million in 2018 to €4,533 million in 2019. Our customer base
continued to expand in 2019. Based on the number of contracts
Software Support 11,547
concluded, 13% of the orders we received for software licenses in
2019 were from new customers (2018: 15%). The total value of
Services 4,541 software licenses orders received decreased 5% year over year. The
total number of contracts signed for new software licenses
decreased 10% to 52,584 (2018: 58,530), with an average order
For more information about our regional performance, see the value of €87 thousand in 2019 (2018: €82 thousand). Of all our
Revenue by Region section below. software licenses orders received in 2019, 32% were attributable to
deals worth more than €5 million (2018: 29%), while 35% were
Cloud and Software Revenue attributable to deals worth less than €1 million (2018: 39%).
Cloud revenue refers to the income earned from contracts that Our stable customer base, the continued demand for our
permit the customer to access specific software solutions hosted by software throughout 2019 and the previous years, and the continued
SAP during the term of its contract with SAP. Software licenses interest in our support offerings resulted in an increase in support
revenue results from the fees earned from selling or licensing revenue from €10,981 million in 2018 to €11,547 million in 2019. The
software to customers. Support revenue represents fees earned SAP Enterprise Support offering was the largest contributor to our
44
software support revenue. The €566 million, or 5%, growth in Revenue by Region
software support revenue is primarily attributable to our SAP (based on customer location)
Product Support for Large Enterprises services and our SAP
Enterprise Support services.
Software licenses and software support revenue rose € millions
€452 million, or 3%, from €15,628 million in 2018 to €16,080 million
in 2019. APJ
4,254
We define more predictable revenue as the sum of our cloud
15%
revenue and our software support revenue. Compared to the
previous year, our more predictable revenue increased from
€15,975 million in 2018 to €18,480 million in 2019. This reflects a rise
of 16%. More predictable revenue accounted for 67% of our total
EMEA
revenue in 2019 (2018: 65%). Americas 12,105
11,194 44%
More Predictable Revenue 41%
€ millions
Software Support Cloud
18,480
14,677 15,975 EMEA Region
13,564 6,933
12,379 In 2019, the EMEA region generated €12,105 million in revenue
4,993
3,769 (2018: €11,104 million), which was 44% of total revenue (2018:
2,993
2,286
45%). This represents a year-over-year increase of 9%. Revenue in
Germany increased 8% to €3,948 million (2018: €3,658 million).
Germany contributed 33% (2018: 33%) of all EMEA region revenue.
10,571 10,908 10,981 11,547
10,093 The remaining revenue in the EMEA region was primarily generated
in the United Kingdom, France, Switzerland, the Netherlands, and
Italy. Cloud and software revenue generated in the EMEA region
totaled €10,211 million (2018: €9,339 million). That was 84% of all
2015 2016 2017 2018 2019 revenue from the region (2018: 84%).
EMEA: Cloud and Software Revenue

Services Revenue
Services revenue combines revenue from consulting services,
premium support services, and other services such as training € millions
services and messaging services. Consulting services primarily Software & Support Cloud
relate to the implementation of our cloud subscriptions and on- 10,211
9,339
premise software products. Our premium support offering consists 8,759
8,193 2,115
of high-end support services tailored to customer requirements. 7,622 1,441
1,029
Messaging services are primarily the transmission of electronic text 703
507
messages from one mobile phone provider to another.
Services revenue increased €455 million, or 11%, from
€4,086 million in 2018 to €4,541 million in 2019. 7,730 7,898 8,096
7,115 7,489
A solid market demand led to a 10% increase of €340 million in
consulting revenue and premium support revenue from
€3,356 million in 2018 to €3,696 million in 2019. In 2019, consulting
and premium support revenue contributed 81% of the total services
revenue (2018: 82%) and 13% of total revenue (2018: 14%). 2015 2016 2017 2018 2019
Revenue from other services increased €114 million, or 16%, to
€845 million in 2019 (2018: €731 million). Cloud revenue in the EMEA region rose 47% to €2,115 million in
2019 (2018: €1,441 million). Software licenses and software support
revenue rose 3% to €8,096 million in 2019 (2018: €7,898 million).
Americas Region
In 2019, 41% of our total revenue was generated in the Americas
region (2018: 39%). Total revenue in the Americas region increased
15% to €11,194 million; revenue generated in the United States
increased 15% to €9,085 million. The United States contributed 81%
(2018: 81%) of all revenue generated in the Americas region. In the
remaining countries of the Americas region, revenue increased 15%
to €2,109 million. Revenue in the remaining countries of the
Americas region was generated primarily in Canada, Brazil, and
45
Mexico. Cloud and software revenue generated in the Americas Operating Profit and Operating Margin
region totaled €9,172 million (2018: €7,973 million). That was 82% of SAP posted record revenues in 2019, particularly in Cloud and
all revenue from the region (2018: 82%). Services. Total revenue grew 12% to €27,553 million (2018:
Americas: Cloud and Software Revenue €24,708 million), representing an increase of €2,845 million.
On the other hand, our operating expenses increased
€4,076 million, or 21%, to €23,081 million (2018: €19,005 million).
€ millions The main contributors to that increase were the costs of the SAP
Software & Support Cloud 9,172 restructuring program, totaling €1,130 million (2018: €19 million),
our continued investment in research and development, and our
7,973
7,366 7,666 revenue-related cloud subscriptions and support activities. We also
6,929
3,945 continued our investments in the Services area in line with the
2,000 2,321 2,941 increased revenue. Acquisition-related charges of €689 million
1,579
(2018: €577 million) and share-based compensation of
€1,835 million (2018: €830 million), arising chiefly from the
acquisition of Qualtrics, also had a negative impact on operating
5,350 5,366 5,345 5,032 5,227 profit. Our employee headcount (measured in full-time equivalents,
or FTEs) grew by 3,832 FTEs year over year to 100,330.
We see the increased operating expenses largely as investments
in the future that will help secure our operating profit in the long
2015 2016 2017 2018 2019
term.
As a result of these effects, our operating profit decreased by
Cloud revenue in the Americas region rose 34% to €3,945 million 22% to €4,473 million (2018: €5,703 million) and our operating
in 2019 (2018: €2,941 million). Software licenses and software margin decreased by 6.9pp to 16.2% (2018: 23.1%).
support revenue was €5,227 million in 2019 (2018: €5,032 million).
Operating Profit
APJ Region
In 2019, 15% (2018: 16%) of our total revenue was generated in
€ millions | change since previous
the APJ region. Total revenue in the APJ region increased 9% to
€4,254 million. In Japan, revenue increased 23% to €1,180 million.
5,703
Revenue from Japan was 28% (2018: 25%) of all revenue generated
in the APJ region. In the remaining countries of the APJ region,
5,135
revenue increased 5%. Revenue in the remaining countries of the 4,877
APJ region was generated primarily in Australia, China, and India.
4,473
Cloud and software revenue in the APJ region totaled €3,629 million 4,252
(2018: €3,310 million). That was 85% of all revenue from the region
21% 17%
(2018: 85%).
-2%
APJ: Cloud and Software Revenue -5%
-22%
€ millions 2015 2016 2017 2018 2019

Software & Support Cloud
3,629
3,124
3,310 Operating Margin
2,865 872
2,663 419 611
290
200 Percent | change since previous year
23.3 23.1
2,575 2,705 2,699 2,757
2,463 20.5 20.8
2.8pp 2.3pp 16.2
2015 2016 2017 2018 2019 -2.5pp

-4.2pp
-6.9pp
Cloud revenue in the APJ region rose 43% to €872 million in 2019
(2018: €611 million). Software licenses and software support
revenue increased from €2,699 million in 2018 to €2,757 million in
2019. This reflects a rise of 2%. 2015 2016 2017 2018 2019
Changes to the individual elements in our cost of revenue were as

follows:
46
Cost of Cloud and Software independent contractors we retain to assist in our R&D activities,
Cost of cloud and software consists primarily of costs for and amortization of the computer hardware and software we use for
deploying and operating cloud solutions, the cost of developing our R&D activities.
custom solutions that address customers’ specific business Due to growing personnel costs driven by a 4% increase on
requirements and customer support costs. average for the year in our R&D headcount, and due to a higher
In 2019, the cost of cloud and software increased 13% to proportion of employees in more cost-intensive countries as a result
€4,692 million (2018: €4,160 million). of the acquisition of Qualtrics, our R&D expense rose by 18% to
Significant costs arose through the expansion of the cloud €4,292 million in 2019 from €3,624 million in 2018. R&D expense as
business in response to strong customer demand, leading to the a percentage of total revenue thus increased to 15.6% in 2019 (2018:
cost of delivering and operating our cloud applications increasing by 14.7%). For more information, see the Products, Research &
an additional €466 million year over year. These investments Development, and Services section.
contributed to revenue growth. Our cloud margin widened by 4.9pp
Sales and Marketing Expense
from 58.6% in 2018 to 63.5% in 2019. This improvement in margin is
Sales and marketing expense consists mainly of personnel costs,
attributable to strong growth in cloud revenue of 39% to
direct sales costs, and the cost of marketing our products and
€6,933 million (2018: €4,993 million) with a lower increase in cost of
services.
cloud of 22% to €2,534 million (2018: €2,068 million). Additional
Our sales and marketing expense rose 13% from €6,781 million in
positive impacts on the cloud margin resulted from our Qualtrics
2018 to €7,693 million in 2019. This increase is mainly attributable to
acquisition and completion of the SuccessFactors migration to
the expansion of the global sales force, partly as a result of acquiring
SAP S4/HANA.
Qualtrics, and to greater expenditure on bonus payments prompted
A 3% increase in software licenses and software support revenue
by strong revenue growth.
to €16,080 million (2018: €15,628 million) and a corresponding
Accordingly, the ratio of sales and marketing expense to total
increase of 3% in the software licenses and software support costs
revenue, expressed as a percentage, rose to 27.9% in 2019 (2018:
to €2,159 million (2018: €2,092 million) saw our software licenses
27.4%), an increase of 0.5pp.
and software support margin remain constant at 86.6% (2018:
86.6%) The gross margin on cloud and software, defined as cloud General and Administration Expense
and software profit as a percentage of cloud and software revenue, Our general and administration expense consists mainly of
narrowed by 0.2pp in 2019 to 79.6% (2018: 79.8%). This decline was personnel costs to support our finance and administration functions.
mainly driven by the change in the revenue mix, which now has a General and administration expense rose 48% from
higher proportion of cloud revenues. Due to infrastructure costs, €1,098 million in 2018 to €1,629 million in 2019, despite careful cost
these revenues currently deliver a lower margin simultaneously with management. This increase is primarily the result of higher
a declining proportion of higher-margin software and support personnel costs related to job creation in administrative areas, based
revenues. on the increased business volume related to our growth. The ratio of
Cost of Services general and administration expense to total revenue rose by 1.5pp
year over year to 5.9% (2018: 4.4%).
Cost of services consists primarily of the cost of consulting,
premium services and training courses and the cost of bought-in Segment Information
consulting and training resources.
At the end of 2019, SAP had three reportable segments:
We were able to increase our services revenue by 11% year over
Applications, Technology & Services segment; Intelligent Spend
year to €4,541 million in 2019 (2018: €4,086 million). As our service
Group segment; and Qualtrics segment. Since we acquired Qualtrics
business trends away from traditional software licensing and
on January 23, 2019, financial data for the Qualtrics segment is only
consulting revenue toward more subscription revenue from cloud
presented from this acquisition date onwards. For more information
solutions, we continue to invest by expanding capacities to meet the
about our segment reporting and the changes in the composition of
higher demand. As a result, cost of services rose 11% to
our reportable segments in 2019, see the Notes to the Consolidated
€3,662 million (2018: €3,302 million). Our gross margin on services,
Financial Statements, Notes (C.1) and (C.2), and the Performance
defined as services profit as a percentage of services revenue,
Management System section.
increased slightly to 19.4% (2018: 19.2%).
Research and Development

Our research and development (R&D) expense consists primarily
of the personnel cost of our R&D employees, costs incurred for
47
Applications, Technology & Services Segment
€ millions, unless otherwise stated 2019 2018 ∆ in % ∆ in %
(Non-IFRS)
Actual Constant Actual Actual Constant
Currency Currency Currency Currency Currency
Cloud revenue – SaaS/PaaS1) 3,243 3,152 2,347 38 34

1)
Cloud gross margin – SaaS/PaaS (in %) 65.3 65.4 59.6 5.7pp 5.8pp
Cloud revenue – IaaS2) 695 673 488 43 38

2)
Cloud gross margin – IaaS (in %) 29.1 28.5 12.2 16.9pp 16.4pp
Cloud revenue 3,938 3,825 2,835 39 35
Cloud gross margin (in %) 58.9 58.9 51.4 7.4pp 7.4pp
Segment revenue 23,544 22,980 21,753 8 6
Segment gross margin (in %) 73.5 73.5 73.2 0.3pp 0.3pp
Segment profit 9,868 9,597 8,922 11 8
Segment margin (in %) 41.9 41.8 41.0 0.9pp 0.7pp

1)
Software as a service/platform as a service
2)
Infrastructure as a service
The Applications, Technology & Services segment recorded a The segment's cost of revenue during the same period increased
strong increase in cloud revenue in 2019. SaaS/PaaS revenue within 7% (5% at constant currencies) to €6,228 million (2018:
the segment increased 38% (34% at constant currencies), primarily €5,823 million). This increase in expenses was primarily the result
as a result of high demand in our Intelligent ERP solutions. of greater investment in expanding our cloud infrastructure and in
Our software support revenue improved slightly in 2019. It rose providing and operating our cloud applications. This applied to both
5% (3% at constant currencies) to €11,532 million. Including the SaaS/PaaS and the IaaS business, whose cloud gross margins
software licenses revenue, which remained 3% (5% at constant nevertheless increased owing to the growth in revenue. Whereas the
currencies) below the prior-year level due to the shift toward cloud SaaS/PaaS cloud gross margin within the Applications, Technology
revenue, we achieved a total software licenses and support revenue & Services segment grew 5.7pp (5.8pp at constant currencies), our
of €16,054 million in 2019. IaaS business ended the fiscal year with a cloud gross margin
Overall, the revenue share of more predictable revenue streams in growth of 16.9pp (16.4pp at constant currencies).
this segment increased 2.3pp from 63.5% in 2018 to 65.7% in 2019.
Intelligent Spend Group Segment

(Non-IFRS)

1)
Cloud revenue 2,693 2,585 2,178 24 19
Segment revenue 3,184 3,057 2,629 21 16
Segment profit 696 661 531 31 25

1)
The Intelligent Spend Group segment, which comprises cloud 21% (16% at constant currencies) to €3,184 million. As a result, the
solutions from SAP Ariba, SAP Concur, and SAP Fieldglass, was able Intelligent Spend Group segment achieved a segment gross margin
to improve its cloud gross margin by 0.2pp to 78.1%. The segment's of 70.1% (69.9% at constant currencies) in 2019, reflecting an
cost of revenue increased 17% in 2019 (13% at constant currencies) increase of 1.0pp (0.9pp at constant currencies).
to €953 million (2018: €813 million). Segment revenue increased by
48
Qualtrics Segment
€ millions, unless otherwise stated 2019 20182) ∆ in % ∆ in %
(Non-IFRS)
Cloud revenue – SaaS/PaaS1) 371 353 NA NA NA

1)
Cloud gross margin – SaaS/PaaS (in %) 91.1 91.1 NA NA NA
Cloud revenue 371 353 NA NA NA
Cloud gross margin (in %) 91.1 91.1 NA NA NA
Segment revenue 508 483 NA NA NA
Segment gross margin (in %) 78.3 78.1 NA NA NA
Segment profit 8 9 NA NA NA
Segment margin (in %) 1.6 2.0 NA NA NA

1)
2)
There are no prior-period numbers for the Qualtrics segment presented, since we acquired Qualtrics in 2019.
We acquired Qualtrics on January 23, 2019, as the leading In 2019, the Qualtrics segment realized cloud revenue of
provider of Experience Management (XM) solutions. The product €371 million (€353 million at constant currencies) with a cloud gross
portfolio comprises the Qualtrics XM Platform, which is designed to margin of 91.1% (91.1% at constant currencies). Including the
help organizations measure, prioritize, and optimize the four core services revenue, total segment revenue was €508 million
experiences of business – customer, product, employee, and brand (€483 million at constant currencies), whereas the segment’s cost
– on one platform. The Qualtrics segment, however, does not of revenue was €110 million (€106 million at constant currencies). As
comprise the full impact of the acquisition since some functions of a result, the Qualtrics segment achieved a segment gross margin of
Qualtrics have already been integrated into SAP’s corporate 78.3% (78.1% at constant currencies) in 2019.
functions.
Reconciliation of Cloud Revenues and Margins

(Non-IFRS)
Intelligent Spend Group segment 2,693 2,585 2,178 24 19

1) 3)
Cloud revenue – SaaS/PaaS Other 3,625 3,515 2,361 54 49
Total 6,318 6,100 4,539 39 34

2)
Cloud revenue – IaaS 695 673 488 43 38
Cloud revenue 7,013 6,773 5,027 40 35
Intelligent Spend Group segment 78.1 78.0 77.8 0.2pp 0.2pp
Cloud gross margin – SaaS/PaaS1 ) (in %) Other 3) 68.4 68.5 60.0 8.4pp 8.5pp
Total 72.5 72.5 68.6 4.0pp 3.9pp

2)
1)
2)
3)
Other includes Applications, Technology & Services segment, Qualtrics segment, and miscellaneous. The individual revenue and margin numbers for the
Applications, Technology & Services segment and the Qualtrics segment are disclosed on the previous pages.
49
Our stable customer base, the continued demand for our
Financial Income, Net software throughout 2018 and the previous years, and the continued
Financial income, net, changed to €198 million (2018: interest in our support offerings resulted in an increase in support
–€47 million). Our finance income was €787 million (2018: revenue from €10,908 million in 2017 to €10,981 million in 2018. The
€371 million) and our finance costs were €589 million (2018:
SAP Enterprise Support offering was the largest contributor to our
€418 million).
support revenue. The €73 million, or 1%, growth in support revenue
Finance income mainly consists of gains from disposal of equity
is primarily attributable to our SAP Product Support for Large
securities and IFRS 9-related fair value adjustments, mainly of Enterprises services and our SAP Enterprise Support services. The
Sapphire Ventures investments, totaling €596 million (2018: acceptance rate for SAP Enterprise Support among new customers
€227 million), interest income from loans and receivables, and other
remained very high in 2018 at 98% (2017: 99%).
financial assets (cash, cash equivalents, and current investments) Software and support revenue decreased €152 million, or 1%,
totaling €75 million (2018: €62 million), and income from derivatives
from €15,780 million in 2017 to €15,628 million in 2018.
totaling €77 million (2018: €77 million).
We define more predictable revenue as the sum of our cloud
Finance costs mainly consist of interest expense on financial
revenue and our software support revenue. Compared to the
liabilities amounting to €207 million (2018: €106 million), negative
previous year, our more predictable revenue increased from €14,677
effects from derivatives amounting to €155 million (2018:
million in 2017 to €15,975 million in 2018. This reflects a rise of 9%.
€206 million), and losses from disposal or IFRS 9-related fair value
More predictable revenue accounted for 65% of our total revenue in
adjustments of Sapphire Ventures investments totaling €152 million
2018 (2017: 63%).
(2018: €45 million). For more information about financing
instruments, see the Notes to the Consolidated Financial Services Revenue
Statements, Note (E.3). Services revenue increased €175 million, or 4%, from €3,912
million in 2017 to €4,086 million in 2018.
Income Taxes A solid market demand led to a 4% increase of €141 million in
The effective tax rate in 2019 was 26.7% (2018: 27.0%). For more consulting revenue and premium support revenue from €3,215
information about income taxes, see the Notes to the Consolidated million in 2017 to €3,356 million in 2018. In 2018, consulting and
Financial Statements, Note (C.5). premium support revenue contributed 82% of the total service
revenue (2017: 82%) and 14% of total revenue (2017: 14%).
Our 2018 Results Compared to Our 2017 Revenue from other services increased €34 million, or 5%, to
Results (IFRS) €731 million in 2018 (2017: €697 million).
Total Revenue Revenue by Region

Total revenue increased from €23,461 million in 2017 to €24,708 EMEA Region
million in 2018, representing an increase of €1,247 million, or 5%.
In 2018, the EMEA region generated €11,104 million in revenue
The growth in revenue resulted primarily from a €1,224 million
(2017: €10,415 million), which was 45% of total revenue (2017:
increase in cloud revenue to €4,993 million. Cloud and software
44%). This represents a year-over-year increase of 7%. Revenue in
revenue represented 83% of total revenue in 2018 (2017: 83%).
Germany increased 9% to €3,658 million (2017: €3,352 million).
Service revenue increased 4% from €3,912 million in 2017 to €4,086
Germany contributed 33% (2017: 32%) of all EMEA region revenue.
million in 2018, which was 17% of total revenue (2017: 17%).
The remaining revenue in the EMEA region was primarily generated
For more information about our regional performance, see the
in the United Kingdom, France, Switzerland, the Netherlands, and
Revenue by Region section below.
Italy. Cloud and software revenue generated in the EMEA region
Cloud and Software Revenue totaled €9,339 million (2017: €8,759 million). That was 84% of all
Cloud and software revenue grew from €19,549 million in 2017 to revenue from the region (2017: 84%).
€20,622 million in 2018, an increase of 5%. Cloud revenue in the EMEA region rose 40% to €1,441 million in
2018 (2017: €1,029 million). Software licenses and software support
Cloud revenue rose 2% to €7,898 million in 2018 (2017: €7,730 million).
Cloud revenue increased from €3,769 million in 2017 to €4,993
Americas Region
million in 2018.
In 2018, 39% of our total revenue was generated in the Americas
Cloud and Software region (2017: 40%). Total revenue in the Americas region increased
Impacted by currency headwinds, our software revenue declined 4% to €9,713 million; revenue generated in the United States
by €225 million from €4,872 million in 2017 to €4,647 million in increased 6% to €7,880 million. The United States contributed 81%
2018. Our customer base continued to expand in 2018. Based on the (2017: 80%) of all revenue generated in the Americas region. In the
number of contracts concluded, 15% of the orders we received for remaining countries of the Americas region, revenue decreased 4%
software in 2018 were from new customers (2017: 15%). The total to €1,832 million, induced by a challenging macroeconomic situation
value of software orders received decreased 9% year over year. The in Latin America. Revenue in the remaining countries of the
total number of contracts signed for new software decreased 1% to Americas region was generated primarily in Canada, Brazil, and
58,530 (2017: 59,147), with an average order value of €82 thousand Mexico. Cloud and software revenue generated in the Americas
in 2018 (2017: €89 thousand). Of all our software orders received in region totaled €7,973 million (2017: €7,666 million). That was 82% of
2018, 29% were attributable to deals worth more than €5 million all revenue from the region (2017: 82%).
(2017: 30%), while 39% were attributable to deals worth less than Cloud revenue in the Americas region rose 27% to €2,941 million
€1 million (2017: 40%). in 2018 (2017: €2,321 million). Software licenses and software
50
support revenue decreased to €5,032 million in 2018 (2017: €5,345 more information about currency conversion and hyperinflation,
million). see the Notes to the 2018 Consolidated Financial Statements,
Note (IN.1).
APJ Region
Changes to the individual elements in our cost of revenue were as
In 2018, 16% (2017: 16%) of our total revenue was generated in follows:
the APJ region. Total revenue in the APJ region increased 5% to
€3,891 million. In Japan, revenue increased 9% to €963 million. Cost of Cloud and Software
Revenue from Japan was 25% (2017: 24%) of all revenue generated In 2018, the cost of cloud and software increased 7% to
in the APJ region. In the remaining countries of the APJ region, €4,160 million (2017: €3,893 million).
revenue increased 4%. Revenue in the remaining countries of the The main impact on costs was an additional €408 million year
APJ region was generated primarily in Australia, India, and China. over year for delivering and operating cloud applications in response
Cloud and software revenue in the APJ region totaled €3,310 million to the strength of customer demand. These investments contributed
in 2018 (2017: €3,124 million). That was 85% of all revenue from the to revenue growth. Our margin on cloud widened by 2.6pp from
region (2017: 84%). 56.0% in 2017 to 58.6% in 2018. This improvement in margin is
Cloud revenue in the APJ region rose 46% to €611 million in 2018 attributable to strong growth in cloud revenue of 32% to
(2017: €419 million). Software licenses and software support €4,993 million (2017: €3,769 million) with a lower increase in
revenue slightly decreased from €2,705 million in 2017 to €2,699 corresponding costs for cloud of 25% to €2,068 million (2017:
million in 2018, reflecting a year-over-year growth of 0%. €1,660 million).
In 2018, a 1% decrease in software license and support revenue to
Operating Profit and Operating Margin €15,628 million (2017: €15,780 million) and a corresponding
SAP posted record revenues in 2018, particularly in Cloud and decrease of 6% in the software license and support costs to
Services. Total revenue grew 5% to €24,708 million (2017: €23,461 €2,092 million (2017: €2,234 million) enabled us to widen our
million), representing an increase of €1,247 million. software license and support margin by 0.8pp to 86.6% (2017:
On the other hand, our operating expenses increased €421 85.8%).The gross margin on cloud and software, defined as cloud
million or 2% to €19,005 million (2017: €18,584 million). The main and software profit as a percentage of cloud and software revenue,
contributors to that increase were our continued investment in narrowed by 0.3pp in 2018 to 79.8% (2017: 80.1%). This decline was
research and development as well as our revenue-related cloud mainly driven by the change in the cloud and software revenue mix,
activities. We also continued our investments in the Services area in which now has a higher proportion of cloud revenues. Due to
line with the increased revenue. Concurrently, the decreased share infrastructure costs, these revenues currently deliver a lower margin
price in 2018 lead to declining costs of share-based compensation of simultaneously with a declining proportion of higher-margin
€830 million (2017: €1,120 million). Restructuring expenses software and support revenues.
decreased further to €19 million (2017: €182 million). Our employee
headcount (measured in full-time equivalents, or FTEs) increased by
Cost of Services
7,955 FTEs year over year to 96,498. We were able to increase our service revenue by 4% year over
Overall, our growth in revenue exceeded the increase in expenses, year to €4,086 million in 2018 (2017: €3,912 million). As our service
leading to a 17% increase in operating profit to €5,703 million (2017: business trends away from traditional software licensing and
€4,877 million). consulting revenue toward more subscription revenue from cloud
As an overall result of these effects on operating profit, our solutions, we continue to invest by expanding capacities to meet the
operating margin widened 2.3pp to 23.1% in 2018 (2017: 20.8%). increased demand. As a result, cost of services rose 5% to
Our revenues and results in 2018 were influenced by positive €3,302 million (2017: €3,158 million). Our gross margin on services,
business developments as well as the following special effects (for defined as services profit as a percentage of services revenue,
the impacts on our non-IFRS results at constant currencies, see the remained for the most part stable at 19.2% (2017: 19.3%).
Performance Against Our Outlook for 2018 section in our 2018 Research and Development Expense
Annual Report on Form 20-F):
Due to growing personnel costs driven by a 9% increase on
– In 2018, the adoption of IFRS 15 had a positive effect on software
average for the year in our R&D headcount, our R&D expense in-
license and support revenue of €170 million. Combined with
creased by 8% to €3,624 million in 2018 from €3,352 million in 2017.
other counter-effects, this resulted in a total effect on our
R&D expense as a percentage of total revenue thus increased to
revenues of €158 million. Our operating expenses benefited by
14.7% in 2018 (2017: 14.3%). For more information, see the
€239 million and our operating profit was positively impacted by
Products, Research & Development, and Services section.
€399 million. For more information about the adoption of IFRS
15, see the Notes to the 2018 Consolidated Financial Statements, Sales and Marketing Expense
Note (A.5). Our sales and marketing expense decreased 2% from
– The acquisition of Callidus Software Inc. (CallidusCloud) had a €6,924 million in 2017 to €6,781 million in 2018. This decrease is
positive impact since the closing date of €126 million on our mainly attributable to the adoption of the new IFRS 15 accounting
cloud revenue, and a negative impact on our operating profit of standard and the resulting capitalization of sales commissions. For
€70 million. For more information about our acquisitions in 2018, more information, see the Notes to the 2018 Consolidated Financial
see the Notes to the 2018 Consolidated Financial Statement, Statements, Note (A.5). Accordingly, the ratio of sales and marketing
Note (D.1). expense to total revenue, expressed as a percentage, fell to 27.4% in
– The financial recognition of hyperinflation in Argentina and 2018 (2017: 29.5%), a decrease of 2.1pp.
Venezuela resulted in a decrease in our total revenue of €19
million and in a decrease in our operating profit of €12 million. For
51
General and Administration Expense Segment Information
General and administration expense increased 2% from The segment information below for 2018 and 2017 is presented
€1,075 million in 2017 to €1,098 million in 2018. This increase is based on the reportable segments Applications, Technology &
primarily the result of higher personnel costs related to job creation Services and Intelligent Spend Group. Since we acquired Qualtrics
in administrative areas, based on the increased business volume on January 23, 2019, there is no financial data for the Qualtrics
related to our growth. Thanks to strong operating results, the ratio of segment presented for the years 2018 and 2017.
general and administration expense to total revenue improved by For more information about our segment reporting, see the Notes
0.1pp year over year to 4.4% (2017: 4.6%). to the Consolidated Financial Statements, Notes (C.1) and (C.2), and
the Performance Management System section.
Applications, Technology & Services Segment

(Non-IFRS)
Cloud gross margin – SaaS/PaaS1 ) (in %) 59.6 59.1 57.6 2.0pp 1.5pp
Cloud revenue – IaaS2) 488 506 328 49 54

2)
Cloud revenue 2,835 2,929 1,922 48 52
Segment revenue 21,753 22,859 20,857 4 10
Segment gross margin (in %) 73.2 73.0 74.1 –0.8pp –1.1pp
Segment profit 8,922 9,359 8,587 4 9
Segment margin (in %) 41.0 40.9 41.2 –0.2pp –0.2pp

1)
2)
The Applications, Technology & Services segment recorded a more predictable revenue streams in this segment increased 2.0pp
strong increase in cloud revenue in 2018. Because of high demand in from 61.4% in 2017 to 63.5% in 2018.
our digital core offering, Customer Experience, and database and The segment's cost of revenue during the same period increased
data management solutions as well as the growing success of our 8% (14% at constant currencies) to €5,823 million (2017:
SAP Cloud Platform in the market, SaaS/PaaS revenue within the €5,412 million). This increase in expenses was primarily the result of
segment increased 47% (52% at constant currencies). We also saw higher investment in expanding our cloud infrastructure and in
SAP S/4HANA Cloud and SAP Leonardo, our strategic offerings for providing and operating our cloud applications. This applied both to
the future, develop very positively and achieve strong growth rates. the SaaS/PaaS business and to the IaaS business. Yet, cloud gross
Our software support revenue improved slightly in 2018. It rose margin was improved for both businesses. The SaaS/PaaS business
1% (5% at constant currencies) to €10,969 million. Including within the Applications, Technology & Services segment increased
software licenses revenue, which remained slightly below the prior- its cloud gross margin by 2.0pp (1.5pp at constant currencies)
year level due to the shift toward cloud revenue (0% at constant whereas the IaaS business ended the fiscal year with a cloud gross
currencies), we achieved a total software licenses and support margin growth of 5.0pp (5.7pp at constant currencies).
revenue of €15,614 million in 2018. Overall, the revenue share of
52
Intelligent Spend Group Segment
(Non-IFRS)

1)
Cloud revenue 2,178 2,265 1,840 18 23
Segment revenue 2,629 2,733 2,261 16 21
Segment profit 531 545 388 37 40

1)
The Intelligent Spend Group segment increased its cloud gross by 16% (21% at constant currencies) to €2,629 million. As a result,
margin in 2018 by 1.1pp again, to 77.8%. The segment's cost of the Intelligent Spend Group segment improved in 2018 and achieved
revenue increased 12% in 2018 (17% at constant currencies) to a segment gross margin of 69.1% (2017: 67.9%).
€813 million (2017: €725 million). The segment revenue increased
Reconciliation of Cloud Revenues and Margins

(Non-IFRS)
Intelligent Spend Group segment 2,178 2,265 1,840 18 23
Cloud revenue – SaaS/PaaS1) Other 3) 2,361 2,434 1,604 47 52
Total 4,539 4,700 3,443 32 36

2)
Cloud revenue – IaaS 488 506 328 49 54
Cloud revenue 5,027 5,205 3,771 33 38
Intelligent Spend Group segment 77.8 77.8 76.7 1.1pp 1.1pp

1) 3)
Cloud gross margin – SaaS/PaaS (in %) Other 60.0 59.3 56.7 3.3pp 2.5pp
Total 68.6 68.2 67.4 1.2pp 0.8pp
Cloud gross margin – IaaS2) (in %) 12.2 12.9 7.2 5.0pp 5.7pp

1)
2)
3)
Other includes Application, Technology & Services segment and miscellaneous. The individual revenue and margin numbers for th e Application, Technology & Services segment are
disclosed on the previous pages.
53
Financial Income, Net Our revenue analysis, included within the “Operating Results”
Financial income, net, changed in 2018 to –€47 million (2017: section of Item 5, discusses at times the effect of currency
€188 million). Our finance income was €371 million (2017: €476 movements which are calculated in the same manner.
million) and our finance costs were €418 million (2017: €288
million). Liquidity and Capital
Finance income mainly consists of gains from disposal of equity
securities and IFRS 9-related fair value adjustments mainly of Resources
Sapphire Venture Investments totaling €227 million (2017: €382
million), interest income from loans and receivables, and other
financial assets (cash, cash equivalents, and current investments) Finances (IFRS)
totaling €62 million (2017: €49 million), and income from derivatives
totaling €77 million (2017: €44 million). Overview
Finance costs mainly consist of interest expense on financial
liabilities amounting to €106 million (2017: €89 million), negative Global Financial Management
effects from derivatives amounting to €206 million (2017: We use global centralized financial management to control liquid
€116 million), and losses from disposal or IFRS 9-related fair value assets and monitor exposure to interest rates and currencies. The
adjustments of Sapphire Ventures investments totaling €45 million primary aim of our financial management is to maintain liquidity in
(2017: €27 thousands). For more information about financing the Group at a level that is adequate to meet our financial obligations
instruments, see the 2018 Annual Report on Form 20-F, Part III, at all times. Most SAP entities have their liquidity managed centrally
Notes to the Consolidated Financial Statement, Note (E.3). by the Group, so that liquid assets across the Group can be
consolidated, monitored, and invested in accordance with Group
Income Taxes policy. High levels of liquid assets help keep SAP flexible, sound, and
The effective tax rate in 2018 was 27.0% (2017: 19.5%). The year- independent. In addition, various credit facilities are currently
over-year increase in the effective tax rate mainly resulted from the available for additional liquidity, if required. For more information
absence of one-time tax benefits realized in 2017 relating to an intra- about these facilities, see the Credit Facilities section.
group transfer of intellectual property rights to SAP SE and the U.S. We manage credit, liquidity, interest rate, equity price, and foreign
tax reform, and tax effects relating to intercompany financing, which exchange rate risks on a Group-wide basis. We use selected
were partly compensated by valuation allowances on deferred tax derivatives exclusively for this purpose and not for speculation,
assets, and changes in the regional allocation of income. For more which is defined as entering into a derivative instrument for which
information about income taxes, see the 2018 Annual Report on we do not have corresponding underlying transactions. The rules for
Form 20-F, Part III, Notes to the Consolidated Financial Statement, the use of derivatives and other rules and processes concerning the
Note (C.5). management of financial risks are documented in our treasury
guideline, which applies globally to all companies in the Group. For
Foreign Currency Exchange more information about the management of each financial risk and
about our risk exposure, see the Notes to the Consolidated Financial
Rate Exposure Statements, Notes (F.1) and (F.2).
Liquidity Management
Our primary source of cash, cash equivalents, and current
Although our reporting currency is the euro, a significant portion
investments is funds generated from our business operations. Over
of our business is conducted in currencies other than the euro. Since
the past several years, our principal use of cash has been to support
the Group’s entities usually conduct their business in their
operations and our capital expenditure requirements resulting from
respective functional currencies, our risk of exchange rate
our growth, to quickly repay financial debt, to acquire businesses, to
fluctuations from ongoing ordinary operations is not considered
pay dividends on our shares, and to buy back SAP shares on the
significant. However, occasionally we generate foreign-currency-
open market. On December 31, 2019, our cash, cash equivalents,
denominated receivables, payables, and other monetary items by
and current investments were primarily held in euros and U.S.
transacting in a currency other than the functional currency; to
dollars. We generally invest only in the financial assets of issuers or
mitigate the extent of the associated foreign currency exchange rate
funds with a minimum credit rating of BBB, and pursue a policy of
risk, the majority of these transactions are hedged as described in
cautious investment characterized by wide portfolio diversification
Note (F.1) to our Consolidated Financial Statements. Also see Note
with a variety of counterparties, predominantly short-term
(F.1) for additional information on foreign currencies.
investments, and standard investment instruments. Our investments
Approximately 73% of our total revenue in 2019 (2018: 72%) was
in financial assets of issuers with a credit rating lower than BBB were
attributable to operations in non-euro participating countries. We
not material in 2019.
translated that revenue into euros for financial reporting purposes.
We believe that our liquid assets combined with our undrawn
Fluctuations in the exchange value of the euro had a favorable
credit facilities are sufficient to meet our operating financing needs
impact of €724million on our total revenue for 2019, an unfavorable
in 2020 and, together with expected cash flows from operations, will
impact of €1,219 million on our total revenue for 2018 and an
support debt repayments, currently planned capital expenditure
unfavorable impact of €301 million on our total revenue for 2017.
requirements, and capital returns to our shareholders over the near
The impact of foreign currency exchange rate fluctuations
term and medium term. It may also be necessary to enter into
discussed in the preceding paragraph is calculated by translating
financing transactions when additional funds are required that
current period figures in local currency to euros at the monthly
average exchange rate for the corresponding month in the prior year.
54
cannot be wholly sourced from free cash flow, to maintain flexibility, For more information about the capital structure and its analysis,
and/or limit repayment risk. see the Notes to the Consolidated Financial Statements, Note (E.1).
Therefore, we continuously monitor funding options available in The long-term credit rating for SAP SE is “A2” by Moody’s and “A”
the capital markets and trends in the availability of funds, as well as by Standard & Poor’s, both with a stable outlook.
the cost of such funding. In recent years, we were able to repay The Company intends to repurchase shares with a volume of
additional debt within a short period of time due to our persistently €1.5 billion by December 31, 2020. The timing and the instruments
strong free cash flow. For more information about the financial debt, of capital returns will be determined by SAP based on its evaluation
see the Cash Flows and Liquidity section. of market conditions, company performance, and other factors. The
enhanced capital return will be in addition to SAP’s regular dividend
policy. Further capital returns in subsequent years will be decided
Capital Structure Management
on an annual basis in line with SAP’s capital allocation
The primary objective of our capital structure management is to priorities.Financial Debts
maintain a strong financial profile for investor, creditor, and Financial debt is defined as the nominal volume of bank loans,
customer confidence, and to support the growth of our business. We commercial papers, private placements, and bonds.
seek to maintain a capital structure that will allow us to cover our
funding requirements through the capital markets at reasonable
conditions, and in so doing, ensure a high level of independence,
confidence, and financial flexibility.
Maturity Profile of Financial Debts
3,296
€ millions
2,529
Variable Fixed
1,121
3,098
1,250
1,138 1,089
1,000 1,000
867 89
1,408 500 500 500

1,049 600 1,250
1,000 1,000 1,000
500 500 500
198 267
89
2020 2021 2022 2023 2024 2025 2026 2027 2028 2030 2031
Nominal volume of financial debt on December 31, 2019, included Financial Debt by Instrument
amounts in euros (€12,362 million) and U.S. dollars (€1,297 million).
On December 31, 2019, approximately 54% of the financial debt was
held at variable interest rates, partially swapped from fixed into € millions
variable using interest rate swaps.
For information about the intended repayments, see the goals for
Bonds 9,517
liquidity and finance in the Financial Targets and Prospects section.
Private Placement 1,030
Commercial Paper 1,100
Bank Loan 2,021
For more information about our financial debt, see the Notes to
the Consolidated Financial Statements, Note (E.3).
55
Cash Flows and Liquidity
2019 Actual Cash Flow and Liquidity Performance Compared to Outlook
We met or exceeded the revised outlook for capital expenditure, share-based payment payouts, and income tax payouts that we published
in November 2019. Due to higher payouts, we did not meet our outlook for restructuring payouts, operating cash flow, and free cash flow.
€ billions Results 2018 Outlook (as reported in Revised Outlook (Q2 Revised Results
the Integrated Report) Quarterly Statement) Outlook 2019
(November)
Operating cash flows 4.3 broadly in line slightly lower 3.5
Capital expenditure –1.5 unchanged level –1.2 –1.0 –0.8
Free cash flow 2.8 decrease moderately decrease moderately 2.3
Share-based payment payouts –1.0 additional 0.3 additional 0.4 –1.4 –1.3
Restructuring payouts –0.1 additional 0.55 to 0.75 additional 0.55 to 0.75 –0.6 to –0.8 –0.9
Income taxes payouts –1.7 additional 0.3 additional 0.6 –2.2 to –2.4 –2.3
Net debt (–) –2.5 –8 –8.3

Ratio of net debt divided by operating profit 0.4 >1.2 1.3
plus depreciation and amortization
with original maturity of three months or less) and current

Group Liquidity and Net Debt investments (for example, time deposits and debt securities with
€ millions 2019 2018 ∆ original maturities of greater than three months and remaining
Cash and cash equivalents 5,314 8,627 –3,313
maturities of less than one year included in other financial assets) as
reported in our Consolidated Financial Statements. Group liquidity
Current time deposits and 67 211 –144
debt securities on December 31, 2019, primarily comprised amounts in euros and
U.S. dollars.
Group liquidity 5,382 8,838 –3,456 The decrease in group liquidity compared to 2018 was mainly due
Current financial debt –2,529 –759 –1,770 to the cash outflows for the Qualtrics acquisition, while the cash
inflow from borrowings for the Qualtrics acquisition already took
Non-current financial debt –11,139 –10,572 –567
place in 2018. They were partly offset by cash inflows from our
Financial debt –13,668 –11,331 –2,337 operations.
Net debt (–) –8,286 –2,493 –5,793 Net debt is financial debt less group liquidity. For more
information about our liquidity, see the Notes to the Consolidated
Lease liability –2,203 NA
Financial Statements, Note (E.3).
Net debt including lease liability –10,489 NA For information about the impact of cash, cash equivalents,
current investments, and our financial liabilities on our income
Group liquidity consists of cash and cash equivalents (for statements, see the analysis of our financial income, net, in the
example, cash at banks, money market funds, and time deposits Operating Results (IFRS) section.
Development of Net Debt
€ millions
+3,496
–817 –403
–2,493
Free Cash Flow +2,276
–6,215
–1,790 –64 –8,286
Net Operating Capital Lease Business Dividends Other Net

Debt Cash Expen- Payments Combi- Debt
12/31/2018 Flow diture nations 12/31/2019
PY: –1,479 +4,303 –1,458 +0 –2,146 –1,671 –40 –2,493
56
Analysis of Consolidated Statements of Cash Flows
€ millions
Years ended December 31,
∆ in % ∆ in %
2019 2018 2017 2019 vs. 2018 2018 vs. 2017
Net cash flows from operating activities 3,496 4,303 5,045 –19 –15
Net cash flows from investing activities –7,021 –3,066 –1,112 >100 >100
Net cash flows from financing activities 102 3,283 –3,406 –97 <-100
Analysis of Consolidated Statements of Cash Analysis of Consolidated Statements of Cash

Flows: 2019 compared to 2018 Flows: 2018 Compared to 2017
In 2019, cash inflows from operating activities decreased by In 2018, cash inflows from operating activities decreased by
€807 million to €3,496 million (2018: €4,303 million). This is €743 million to €4,303 million (2017: €5,045 million). This is
particularly due to an increase in income tax payments (€2.3 billion particularly due to an increase in income tax payments, higher
in 2019 and €1.7 billion in 2018), higher payments related to insurance payments related to employees’ time credits compared to
restructuring (€0.9 billion in 2019 and €0.1 billion in 2018), and the prior year, and higher share-based payments (€1.0 billion in 2018
higher share-based payments (€1.3 billion in 2019 and €1.0 billion in and €0.8 billion in 2017). Our days sales outstanding (DSO) for
2018). Our days sales outstanding (DSO) for receivables, defined as receivables, defined as the average number of days from the raised
the average number of days from the raised invoice to cash receipt invoice to cash receipt from the customer, remained stable in 2018
from the customer, remained flat in 2019 at 71 days (2018: 70 days). at 70 days (2017: 70 days).
Following the new lease accounting rules (IFRS 16), we had a Cash outflows from investing activities were €3,066 million in
positive impact on operating cash flow from the reclass of leasing 2018 (2017: €1,112 million). We paid a total of €2,140 million for
payments into cash flows from financing of €0.4 billion. acquisitions, mainly Callidus, in 2018, compared to €291 million in
Cash outflows from investing activities were €7,021 million in 2017. Capital expenditures on purchases of intangible assets and
2019 (2018: €3,066 million). We paid, net of cash received, a total of property, plant, and equipment increased by €183 million to
€6.1 billion for the Qualtrics acquisition in 2019, compared to €1,458 million in 2018. For more information about current and
€2.1 billion in 2018, mainly for Callidus. Instead of investing in the planned capital expenditures, see the Investment Goals section.
expansion of our data centers, there was a strong focus on Net cash inflows from financing activities were €3,283 million in
improving capacity utilization, resulting in a decrease in capital 2018, compared to cash outflows of €3,406 million in 2017. In 2018,
expenditures on purchases of intangible assets and property, plant, we issued €6,000 million in Eurobonds financing the acquisition of
and equipment by €642 million to €817 million. For more Callidus and Qualtrics, and a US$300 million USD bond. The cash
information about current and planned capital expenditures, see the outflows resulted from repayments of €1,150 million in Eurobonds
Investment Goals section. and US$150 million in U.S. private placements when they matured.
Net cash inflows from financing activities were €102 million in Cash outflows in 2017 resulted from repayments of €1,000 million in
2019, compared to €3,283 million in 2018. In 2019, we drew Eurobonds and US$442.5 million in U.S. private placements when
€2.5 billion of an acquisition term loan for Qualtrics. We refinanced they matured.
€0.5 billion of the acquisition term loan through the issuance of the The dividend payment of €1,671 million made in 2018 exceeded
same amount under a commercial paper program (Commercial the amount of €1,499 million from the prior year, as a result of the
Paper) we launched in September 2019. This program enables increased dividend paid per share from €1.25 to €1.40. In 2017, we
SAP SE to issue short-term notes up to €2.5 billion. The cash repurchased shares in the amount of €500 million (2018: €0).
outflows resulted from repayments of €0.75 billion in Eurobonds
when they matured, whereof we refinanced €0.6 billion through
Commercial Paper. In 2018, we issued €6.0 billion in Eurobonds
financing the acquisition of Callidus and Qualtrics, and a
US$0.3 billion USD bond. Cash outflows in 2018 resulted from
repayments of €1.15 billion in Eurobonds and US$0.15 billion in U.S.
private placements when they matured.
The dividend payment of €1,790 million made in 2019 exceeded
the respective amount of €1,671 million paid in the prior year, the
dividend paid per share increased from €1.40 to €1.50.
57
Credit Facilities Resulting from the acquisition of Qualtrics, a term loan of
Other sources of capital are available to us through various credit €2.0 billion was still outstanding on December 31, 2019. The amount
facilities, if required. can be flexibly repaid until maturity of the loan on January 23, 2022.
To retain high financial flexibility, we have available a €2.5 billion
syndicated revolving credit facility with an end date in
November 2024. A possible future utilization is not subject to any
Off-Balance Sheet
financial covenants. Borrowings under the facility bear interest of
EURIBOR or LIBOR for the respective currency plus a margin of
Arrangements
0.17%. We are also required to pay a commitment fee of 0.0595%
per annum on the unused available credit. So far, we have not used,
We do not believe we have forms of material off-balance sheet
and do not currently foresee any need to use, this credit facility. arrangements that would require disclosure other than those
As at December 31, 2019, SAP SE had additional available credit
already disclosed.
facilities totaling €424 million. Several other SAP entities have credit
facilities available that allow them to borrow funds at prevailing
interest rates. As at December 31, 2019, approximately €7 million
was available through such arrangements. There were immaterial
Contractual Obligations
borrowings outstanding under these credit facilities from our foreign
subsidiaries as at December 31, 2019. The table below presents our on- and off-balance sheet contractual
obligations as of December 31, 2019:
Contractual Obligations Payments due by period
€ millions Less than More than

Total 1 year 1-3 years 3-5 years 5 years
Lease liabilities 1) 2,511 431 647 414 1,019
Other financial liabilities 1) 14,725 2,888 4,044 2,326 5,467
Derivative financial liabilities 1) 115 55 1 1 58

2)
Purchase obligations 2,592 1,251 897 401 43
Capital contribution commitments 2) 206 206 0 0 0

3)
Other non-current non-financial liabilities 814 0 646 26 142
Total 20,963 4,830 6,235 3,168 6,729
1)
Excludes certain low-value and short-term leases as mentioned in Note (D.8). For more information on lease liabilities, other financial liabilities and derivative financial liabilities see Notes
(E.3) and (F.1) to our Consolidated Financial Statements.
2)
See Notes (D.5) and (D.7) to our Consolidated Financial Statements for additional information about capital contribution commitments and purchase obligations. Our expected
contributions to our pension and other post-employment benefit plans are not included in the table above. For more information on these contributions see Note (B.4) to our Consolidated
Financial Statements.
3)
For more information on other non-current non-financial liabilities see Notes (B.3), (B.5), and (G.2) to our Consolidated Financial Statements.
58
We expect to meet these contractual obligations with our existing December 2019 Economic Bulletin.1) The main influences will be a
cash, our cash flows from operations and our financing activities. deceleration of growth in advanced economies and China, and a
The timing of payments for the above contractual obligations is moderate recovery in some emerging economies (even if less
based on payment schedules for those obligations where set dynamic than previously expected).
payments exist. For other obligations with no set payment In the Europe, Middle East, and Africa (EMEA) region, the ECB
schedules, estimates for the most likely timing of cash payments predicts that the ongoing weakness of international trade will weigh
have been made. The ultimate timing of these future cash flows may on the euro area economy in 2020 due to persistent global
differ from these estimates. uncertainties. However, the ECB’s economic data, while remaining
weak overall, points to a stabilization in the slowdown of economic
Obligations under Indemnifications and growth in the euro area. The ECB expects the euro area economy to
Guarantees grow by 1.1% in 2020 and by 1.4% in both 2021 and 2022. At the
same time, economic growth is projected to remain buoyant in
Our software license agreements and our cloud subscription
central and eastern European countries over the projection horizon.
agreements generally include certain provisions for indemnifying
In Russia, the medium-term outlook will be shaped primarily by
customers against liabilities if our software products infringe a third
fiscal and structural policy implementation, global oil market
party’s intellectual property rights. In addition, we occasionally
developments, and the scope of the international sanctions regime.
provide function or performance guarantees in routine consulting
Looking at the Americas region, the ECB expects economic
contracts and development arrangements. We also generally provide
activity in the United States to remain resilient in the near term, but
a six to twelve-month warranty on our software and a subscription-
to decelerate in the medium term to growth rates of just below 2%.
length warranty on cloud services with a 90 day claim cut off. Our
This will, however, depend on the outcome of continuing trade talks
warranty liability is included in other provisions. For more
with China and many other countries. In Brazil, medium-to-long
information on other provisions see Notes (A.4), (B.5), and (B.6) to
term growth will be significantly influenced by the degree to which
our Consolidated Financial Statements. For more information on
necessary fiscal reforms are going to be implemented.
obligations and contingent liabilities refer to Notes (A.4), (D.5), (D.7)
For the Asia Pacific Japan (APJ) region, the ECB projects that
and (G.3) in our Consolidated Financial Statements.
economic activity in Japan will grow moderately over the medium
term, but weaken temporarily following the value-added tax hike in
Research and Development October 2019. A recently announced fiscal stimulus package could
provide some support to economic growth further ahead. The
gradual transition of China to a lower growth path will weigh on the
For information on our R&D activities see “Item 4. Information global economy as a whole in the coming years. However, the
about SAP — Products, Research & Development, and Services.” For Chinese economy might pick up marginally in 2021 and 2022,
information on our R&D costs see “Item 5. Operating and Financial supported by policy actions and the implementation of structural
Review and Prospects — Operating Results (IFRS)” and for reforms.
information related to our R&D employees see “Item 6. Directors, With regard to growth rates, the International Monetary Fund
Senior Management and Employees — Employees.” (IMF) projects the following economic trends for the mid-term
horizon until the end of 2020:
Critical Accounting
Estimates
See Note (IN.1) to our Consolidated Financial Statements for the
discussion on our critical accounting estimates and critical
accounting policies.
New Accounting Standards

not yet Adopted
See Note (IN.1) to our Consolidated Financial Statements for our
discussion on new accounting standards not yet adopted.
Expected Developments
Future Trends in the Global Economy
The recovery in global economic activity is expected to be mild in
2020, according to the European Central Bank (ECB) in its
59
Economic Trends By 2025, at least 90% of new enterprise apps will embed AI, and
GDP Growth Year Over Year over half of all user interface transactions will use technologies such
% 2018 2019e 2020p as computer vision, natural language processing, and gesture
control, says IDC.2) Already by 2022, over 75% of enterprise
World 3.6 2.9 3.3
application suppliers might have connected their business apps to
Advanced economies 2.2 1.7 1.6 create a digital core that enable them to analyze different types of
Developing and emerging economies 4.5 3.7 4.4 data from numerous sources.4) What’s more, by 2025, 50% of
business applications could have functionality that does not yet
Regions (according to new IMF taxonomy)
exist, making them far more efficient than today’s offerings and
Euro area 1.9 1.2 1.3 requiring significantly less human intervention.4
Germany 1.5 0.5 1.1
Emerging and Developing Europe 3.1 1.8 2.6 Sources:

1)
European Central Bank, Economic Bulletin, Issue 8/2019, Publication Date:
Middle East and Central Asia 1.9 0.8 2.8 December 27, 2019
Sub-Saharan Africa 3.2 3.3 3.5 (https://www.ecb.europa.eu/pub/pdf/ecbu/eb201908.en.pdf)
2)
IDC FutureScape: Worldwide IT Industry 2020 Predictions, Doc
United States 2.9 2.3 2.0 #US45599219, October 2019
3)
IDC FutureScape: Worldwide Digital Transformation 2020 Predictions, Doc
Canada 1.9 1.5 1.8 #US45569118, October 2019
4)
IDC FutureScape: Worldwide Intelligent ERP 2020 Predictions, Doc
Latin America and the Caribbean 1.1 0.1 1.6
US44646019, October 2019
Japan 0.3 1.0 0.7
Emerging and Developing Asia 6.4 5.6 5.8

Impact on SAP
The digital transformation of the global economy is in full swing,
China 6.6 6.1 6.0
and SAP’s broad solution portfolio and innovation strategy are
e = estimate, p = projection playing a key role in this evolution. Though current macroeconomic
Source: International Monetary Fund (IMF), World Economic Outlook uncertainties are holding back individual countries and sectors, the
Update January 2020, Tentative Stabilization, Sluggish Recovery? majority of enterprises is taking advantage of the latest
(https://www.imf.org/~/media/Files/Publications/WEO/2020/January/E
nglish/text.ashx?la=en), p. 9. technological developments to restructure their business models,
The IMF changed the taxonomy and grouping of countries and regions in win market share, and increase efficiency.
October 2019. SAP’s innovative applications and our offerings for next-
generation technologies such as machine learning, AI, blockchain,
The IT Market: and the IoT are convincing more customers of the power and
Outlook for 2020 and Beyond efficiency of our portfolio and our technology platform. We also offer
International Data Corporation (IDC), a U.S.-based market our customers unparalleled flexibility options for using our software
research firm, predicts that within the next four years, the global – on premise, in the cloud, or hybrid.
economy will reach “digital supremacy”2): More than half of all global We continue to expect solid growth going forward, particularly
GDP will then be driven by products and services from digitally with respect to our cloud solutions, which remain in high demand.
transformed enterprises. Digital apps and services will be created
and enhanced many times faster than today, in much greater
numbers, and based on massively expanded digital supply chains. In
addition, by 2024 more than 50% of all IT spending will be directed
toward digital transformation and innovation, which means an
annual growth rate of 17% compared to 2% for the rest of IT (for
example, maintenance of existing systems). The largest growth,
however, will be in data intelligence and analytics, 48% of this
represented by the Internet of Things (IoT) alone.3)
Along with this development, IDC expects a strong market
concentration over the coming years: By 2023, the top five public
cloud platforms will make up at least 75% of infrastructure- and
platform-as-a-service (IaaS/PaaS) market share (62% in 2018). At
the same time, the top ten pure-play software-as-a-service (SaaS)
vendors will generate an average of nearly 20% of revenue from
expanding their PaaS solutions coming along with their apps (4% in
2018).2)
In recent publications, IDC puts particular emphasis on the
importance of artificial intelligence (AI), which it believes will become
“inescapable” over the coming years. It expects investments in Big
Data analytics and cognitive AI to reach over $265 billion in 2023
($124 billion in 2019).3) Investments in AI solutions alone might grow
by 38% annually until 2022, by which time revenue could reach
$79.2 billion.4)
60
Financial Targets and Prospects The following table shows the estimates of the items that
represent the differences between our non-IFRS financial measures
Revenue and Operating Profit Targets and and our IFRS financial measures.
Prospects (Non-IFRS)
Non-IFRS Measures
Outlook 2020
The Company is providing the following 2020 outlook: € millions Estimated Actual
Amounts for Amounts
– Non-IFRS cloud revenue is expected to be in a range of 2020 for 2019
€8.7 billion to €9.0 billion at constant currencies (2019: Revenue adjustments 0–30 81
€7.01 billion), up 24% to28% at constant currencies.
– Non-IFRS cloud and software revenue is expected to be in a range Share-based payment expenses 1,200–1,600 1,835
of €24.7 billion to €25.1 billion at constant currencies (2019: Acquisition-related charges 580–690 689
€23.09 billion), up 7% to 9% at constant currencies.
Restructuring 10–20 1,130
– Non-IFRS total revenue is expected to be in a range of
€29.2 billion to €29.7 billion at constant currencies (2019:
€27.63 billion), up 6% to 8% at constant currencies. The Company expects a full-year 2020 effective tax rate (IFRS) of
– Non-IFRS operating profit is expected to be in a range of 27.0% to 28.0% (2019: 26.7%) and an effective tax rate (non-IFRS)
€8.9 billion to €9.3 billion at constant currencies (2019: of 26.5% to 27.5% (2019: 26.2%).
€8.21 billion), up 8% to13% at constant currencies. Proposed Dividend
– The share of more predictable revenue (defined as the total of
In line with our dividend policy of distributing at least a dividend
cloud revenue and software support revenue) is expected to be
totaling 40% or more of the prior year’s profit after tax, we intend to
approximately 70%.
pay a dividend of €1.58 per share (subject to shareholder approval at
We expect that, in 2020, the gross margin from our Intelligent
the Annual General Shareholders meeting in May 2020). Besides
Spend Group segment will be higher than 80% (2019: 78%).
this, the Company intends to repurchase shares with a volume of
We expect that, in 2020, the gross margin from our public cloud
€1.5 billion by December 31, 2020. For more information, see ” Item
offerings will reach approximately 70% (2019: 68%), and expand to
3. Key Information – Dividends.”
about 80% over the course of the two years thereafter.
We expect the gross margin from our private cloud offerings to be Organizational Changes
in a range of approximately 30% to 35% by 2020 (2019: 29%). At the beginning of 2020, SAP modified its organizational
We continue to expect the cloud gross margin to be structure to strengthen the focus on customer success and
approximately 71% by 2020. employee engagement while driving innovation and simplicity. The
We expect the 2020 gross margin for our software licenses and set-up moving forward aims at raising synergies, reducing
support to remain at a similar level to 2019 (2019: 87%). complexity while initiating key steps towards further integration. The
In addition, we expect our 2020 gross margin for services to organizational changes will also affect SAP’s segment reporting. SAP
remain at a similar level to 2019 (2019: 25%). has already started the process of redefining its management
As we look to increase our profitability through 2020, our cost reporting under the new organizational structure, which the segment
ratios (cost as a percentage of total revenue) are expected to reporting will follow.
develop as follows through 2020: Research and development is
expected to remain at the current level; sales and marketing as well
as general and administration are expected to decline slightly.
Further, we expect the segment profit to increase in all our
reportable segments.
While SAP’s full-year 2020 business outlook is at constant
currencies, actual currency reported figures are expected to be
impacted by currency exchange rate fluctuations throughout the
year. See the table below for the full-year 2020 expected currency
impacts. These currency expectations for the full-year 2020 are
based on the December 2019 level.
In percentage points 2020
Cloud subscriptions and support –1pp to +1pp

Cloud and software –1pp to +1pp
Operating profit 0pp to +2pp
61
Medium-Term Prospects to 2023, we expect to reduce net debt due to scheduled debt
In this section, all numbers are based exclusively on non-IFRS repayments of around €6.2 billion.
measures.
SAP expects to grow our more predictable revenue while steadily Non-Financial Goals 2020 and Ambitions
increasing operating profit. Our strategic objectives are focused for 2023
primarily on our main financial and non-financial objectives: growth, In addition to our financial goals, we also focus on three non-
profitability, customer loyalty, and employee engagement. financial targets: customer loyalty, employee engagement, and
At the beginning of 2019, we introduced a 2023 ambition. Over carbon emissions.
the period from 2018 through 2023, SAP continues to expect to: For 2020 throughout to 2023, we aim to lift employee
– More than triple our non-IFRS cloud revenue (2018: €5.03 billion) engagement, as measured by the Employee Engagement Index, and
– Grow our non-IFRS total revenue to more than €35 billion (2018: keep it between 84% and 86%. (2019: 83%).
€24.74 billion) We measure customer loyalty using the Customer Net Promoter
– Approach a share of more predictable revenue of 80%. Score (NPS). We are targeting to increase the Customer NPS by
– Reach a non-IFRS cloud gross margin of 75% 3 points to 5 points in 2020 and to steadily increase the Customer
– Increase the non-IFRS operating margin by one percentage point NPS in 2021 and beyond. (2019: –6).
(pp) per year on average, representing a total expansion of We aim to decrease carbon emissions to 238 kt in 2020 (2019:
approximately 500 basis points. We expect to achieve this result 300 kt) with a steady decrease further on, reaching 95kt by 2023.
based on the following effects: Our overarching ambition is to achieve a net-zero carbon footprint of
▪ An adverse revenue mix effect of approximately minus 4pp. SAP's operations by 2025.
▪ Our cloud gross margin expansion will add approximately 5pp.
▪ Our services margin expansion will add approximately 0.5pp. Premises on Which Our Outlook and
▪ Reduction of our sales and marketing expense ratio will add
between 2.5pp and 3pp (2018: 25%).
Prospects Are Based
▪ Reduction of our general and administration expense ratio will In preparing our outlook and prospects, we have taken into
add between 0.5pp and 1pp(2018: 4%). account all events known to us at the time we prepared this report
The gross margin for our software licenses and support (2018: that could influence SAP’s business going forward.
87%) as well as our research and development cost ratio (2018:
14%) is expected to remain at a similar level to 2018.
Investment Goals
Our planned investment expenditures for 2020 and 2021, other
than for business combinations, consist primarily of the purchase of
IT infrastructure and the construction activities described in ” Item 4.
Information About SAP – Description of Property – Capital
Expenditures.” We expect investments in IT infrastructure of
approximately €591 million and in construction activities of
approximately €235 million in 2020. In 2020, we expect total capital
expenditures of approximately €1.1 billion. In 2021, capital
expenditures are expected to stay at a similar level as in 2020.
Goals for Liquidity and Finance

As at December 31, 2019, we had a net debt of €8,286 million. We
believe that our liquid assets, combined with our undrawn credit
facilities, are sufficient to meet our operating financing needs in
2020 as well, and, together with expected cash flows from
operations, will support debt repayments and our currently planned
capital expenditure requirements over the near and medium term.
In 2020, compared to 2019, we expect lower cash outflows for
restructuring and extraordinary taxes. Together with a positive
impact from our operating activity, we expect about €6 billion in
operating cash flow for 2020. Free cash flow (as redefined in
response to IFRS 16) is expected to increase to a level of €4.5 billion.
For 2023, we expect around €8 billion in free cash flow.
We intend to repay €1,150 million in Eurobonds and
US$290 million in U.S. Private Placements in 2020. In addition, we
might refinance the full or portions of the currently outstanding
€2.0 billion Qualtrics acquisition term loan with additional capital
market transactions. The ratio of net debt as at December 31, 2020,
of around €7 billion divided by the total of operating profit (IFRS)
plus depreciation and amortization should be below 0.9. From 2020
62
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND
EMPLOYEES
Supervisory Board
The current members of the Supervisory Board of SAP SE, each member’s principal occupation, the year in which each was first elected
and the year in which the term of each expires, respectively, are as follows:
Year First Year Term

Name Age Principal Occupation Elected Expires
Prof. Dr. h.c. mult. Hasso Plattner, 76 Chairman of the Supervisory Board 2003 2022
Chairman(1)(3)(6)(7)
Margret Klein-Magar, Vice 55 Employee, Vice President, Head of SAP Alumni Relations 2012 2024
Chairperson(2)(3)(4)
Pekka Ala-Pietilä(1)(3)(7)(8) 63 Chairman of the Board of Directors, Huhtamäki Oyj 2002 2022
Panagiotis Bissiritsas(2)(3)(4)(5) 51 Employee, Member of SAP SE Works Council and Member of SAP SE Works 2007 2024
Council (Europe)
Aicha Evans(1)(3)(6)(8) 50 Chief Executive Officer and Member of the Board of Directors, Zoox, Inc. 2017 2024
Diane Greene(1)(6)(7) 64 Member of the Board of Directors Stripe, Inc. 2018 2023
Prof. Dr. Gesche Joost(1)(6)(8) 45 Professor for Design Research and Head of the Design Research Lab, 2015 2023
University of Arts Berlin
Monika Kovachka-Dimitrova(2)(6)(8) 44 Employee, Chief Project Expert Development, Member of SAP SE Works 2019 2024
Council (Europe)
Lars Lamadé(2)(3)(6) 48 Employee, Head of Sponsorships Europe and Asia 2002 2024
Bernard Liautaud(1)(3)(6)(7) 57 Managing Partner Balderton Capital 2008 2023
Gerhard Oswald(1)(4)(5)(6) 66 Managing Director of Oswald Consulting GmbH 2019 2024
Christine Regitz(2)(3)(5)(6) 53 Employee, Vice President User Experience, Chief Product Expert 2015 2024
Dr. Friederike Rotsch(1)(3)(4)(5) 47 Group General Counsel and Head of Group Legal & Compliance, Merck 2018 2024
KGaA
Heike Steck(2)(6)(8) 58 Employee, Senior Operations Manager, Member of SAP SE Works Council 2019 2024
and Member of SAP SE Works Council (Europe)
Christa Vergien-Knopf(2)(6)(8) 58 Employee, Member of SAP SE Works Council and Member of SAP SE Works 2019 2024
Council (Europe)
Dr. Gunnar Wiedenfels(1)(4)(5)(9) 42 Chief Financial Officer, Discovery Communications, Inc. 2019 2022
James Wright(2)(4)(5)(6) 57 Employee, Chairman of the SE Works Council (Europe) 2019 2024
Ralf Zeiger(2)(3)(8) 51 Employee, Chairman of SAP SE Works Council and Member of SAP SE 2019 2024
Works Council (Europe)
(1) Elected by SAP SE’s shareholders on May 15, 2019.

(2) Appointed by the SAP SE Works Council Europe on April 3, 2019.
(3) Member of the General and Compensation Committee.
(4) Member of the Audit Committee.
(5) Member of the Finance and Investment Committee.
(6) Member of the Technology and Strategy Committee.
(7) Member of the Nomination Committee.
(8) Member of the People and Organization Committee.
(9) Audit Committee financial expert.
For detailed information on the Supervisory Board committees the shareholders and nine representatives of the European
and their tasks, including the Audit Committee and the General and employees. The current nine employees’ representatives were
Compensation Committee, please refer to “Item 10 Additional appointed by the SAP SE Works Council Europe on April 3, 2019.
Information — Corporate Governance.” Certain current members of the Supervisory Board of SAP SE
Pursuant to the Articles of Incorporation of SAP SE and the were members of supervisory boards and comparable governing
Agreement on the Involvement of Employees in SAP SE, members of bodies of enterprises other than SAP SE in Germany and other
the Supervisory Board of SAP SE consist of nine representatives of countries as of December 31, 2019 See Note (G.4) to our
63
Consolidated Financial Statements for more detail. Apart from organization including global services delivery and regional field
pension obligations for employees, SAP SE has not entered into services.
contracts with any member of the Supervisory Board that provide Luka Mucic, 48 years old, holds a degree in law from the
for benefits upon a termination of the employment or service of the University of Heidelberg, Germany, and a joint executive MBA from
member. ESSEC, France, and Mannheim Business School, Germany. He joined
SAP in 1996 and became Chief Financial Officer (CFO), and a
Executive Board member of the Executive Board in July 2014. He is responsible for
The current members of the Executive Board, the year in which finance and administration including investor relations, internal
each member was first appointed and the year in which the term of audit, data protection and privacy.
each expires, respectively, are as follows: Jürgen Müller, 37 years old, holds a PhD in IT systems
engineering from the Hasso Plattner Institute (HPI) for Software
Year Engineering, University of Potsdam, Germany. He joined SAP in 2013
Current and became a member of the Executive Board in 2019. Jürgen is
Year First Term
Name(1) Appointed Expires
Chief Technology Officer (CTO) of SAP and leads the board area
Technology and Innovation. He is responsible for the technology and
Christian Klein, co-CEO 2018 2025
innovation strategy, SAP HANA, SAP Cloud Platform, SAP Leonardo,
Jennifer Morgan, co-CEO 2017 2025 and SAP Analytics. Before joining SAP, Jürgen was co-representative
Adaire Fox-Martin 2017 2025 of Hasso Plattner’s research chair at the HPI.
Stefan Ries, 53 years old, holds a master’s degree in economics
Michael Kleinemeier 2015 2020
from the University of Constance, Germany. He first joined SAP in
Luka Mucic 2014 2021 2002 and became a member of the Executive Board in April 2016.
Jürgen Müller 2019 2022 He is Chief Human Resources Officer with global responsibility for
Human Resources including HR strategy, business transformation,
Stefan Ries 2016 2024
leadership development, and talent development. He also serves as
Thomas Saueressig 2019 2022
Labor Relations Director.
(1)
On February 19, 2020, Michael Kleinemeier and the Supervisory Board mutually
Thomas Saueressig, 34 years old, holds a degree in Business
agreed that he will depart SAP as of April 30, 2020 and that his membership on the
Executive Board will end effective as of that day. Further, Stefan Ries and the Information Technology from the University of Cooperative
Supervisory Board mutually agreed that Stefan will depart SAP as of May 31, 2020 Education in Mannheim, Germany, and a joint executive MBA from
and that his memberhip on the Executive Board will end effective as of that day.
ESSEC, France, and Mannheim Business School, Germany. He joined
A description of the management responsibilities and SAP in 2004 and became a member of the Executive Board in 2019.
Thomas leads the Board area SAP Product Engineering and has
backgrounds of the current members of the Executive Board are as
follows: global responsibility for all SAP applications, product development
and delivery as well as product management for SAP S/4HANA,
Christian Klein, co-CEO (Co-Vorstandssprecher), 39 years old, supply chain, SME and industry solutions.
holds a diploma in international business administration from the The members of the Executive Board of SAP SE as of December
31, 2019 that are members on other supervisory boards and
University of Cooperative Education in Mannheim, Germany. He
joined SAP in 1999 and became a member of the Executive Board in comparable governing bodies of enterprises, other than SAP, in
2018. On October 10, he became co-CEO alongside Jennifer Morgan. Germany and other countries, are set forth in Note (G.4) to our
Christian is Chief Operating Officer (COO) of SAP and leads the Consolidated Financial Statements. SAP SE has not entered into
board area Intelligent Enterprise Group focusing on global business contracts with any member of the Executive Board that provide for
benefits upon a termination of the employment of service of the
operations and IT services.
Jennifer Morgan, co-CEO (Co-Vorstandssprecher), 48 years old, member, apart from pensions, benefits payable in the event of an
early termination of service, and abstention compensation for the
is a graduate of James Madison University in Harrisonburg, Virginia,
United States. She joined SAP in 2004 and became a member of the postcontractual noncompete period.
To our knowledge, there are no family relationships among any of
Executive Board in 2017. On October 10, she became co-CEO
alongside Christian Klein. She leads SAP’s Cloud Business Group the Supervisory Board and Executive Board members.
including Intelligent Spend Group, Qualtrics as well as CX product
engineering and product management. Prior to SAP, Jennifer
Morgan served in various management roles at Siebel Systems and
Accenture.
Adaire Fox-Martin, 55 years old, is a graduate of Trinity College in
Ireland. She joined SAP in 2008 and became a member of the
Executive Board in 2017. She leads Global Customer Operations,
SAP’s global commercial, partner and customer success
organization. Prior to SAP, Adaire Fox-Martin served as the head of
Public Sector for Asia Pacific Japan at Oracle Corporation.
Michael Kleinemeier, 62 years old, holds a degree in commercial
management from the University of Paderborn, Germany. He first
joined SAP in 1989 and became a member of the Executive Board in
November 2015. He leads the SAP Digital Business Services
64
Compensation Report
fixed compensation element and the two performance-based
Compensation for Executive and elements. This target compensation is benchmarked based on SAP’s
Supervisory Board Members global strategy, market position, business performance and future
prospects of economy, and the compensation paid at comparable
This compensation report describes the compensation system,
national and international companies. The Supervisory Board also
outlines the criteria that apply to the compensation for Executive
considers the compensation systems applicable for the rest of the
Board and Supervisory Board members for the year 2019, and
Company, comparing Executive Board pay with the pay of SAP
discloses the amount of compensation. In addition, it discloses an
executives and non-executive SAP employees. The performance-
outlook of the changes to the compensation system for the year
based elements each correspond to a target achievement of 100%
2020.
of all KPIs. The Supervisory Board reviews, assesses, and sets these
compensation targets, in its first meeting of each fiscal year
Compensation for Executive Board
(February 20, 2019, for 2019). The Supervisory Board is of the
Members opinion that this approach ensures that the compensation is
appropriate.
Compensation System for 2019 The compensation system is designed to support the growth in
The compensation for Executive Board members is intended to value for the Company over the long term. The long-term incentive
reflect the demanding role of Executive Board members leading a element therefore has significant weighting, making up about two-
global company in a rapidly evolving sector. The compensation level thirds of the Co-CEOs’ compensation target, and more than 50% of
is aimed to be competitive to support SAP in the global market for each Executive Board member’s compensation target.
highly skilled executives, especially in the context of the software In the case of any extraordinary, unforeseeable events, the
industry. It is our goal that our Executive Board compensation Supervisory Board is entitled, at its reasonable discretion, to adjust
provides sustainable incentive for committed, successful work in a the performance-based compensation before payout upwards or
dynamic business environment. downwards in the interest of SAP. No corrections to the payout
The Supervisory Board – supported by its General and amounts paid in May 2019 were made.
Compensation Committee – determines the compensation for each The individual elements of SAP’s Executive Board compensation
Executive Board member based on their individual role and are described in more detail below.
performance in its first regular meeting of each fiscal year As
pictured below, the compensation contains performance-based Non-Performance-Based Compensation
elements and non-performance-based elements: Fixed Compensation
The fixed compensation is paid monthly in 12 equal installments
Compensation in the Executive Board member’s home currency 1).
Non-performance-based compensation Fringe Benefits

The contractually guaranteed fringe benefits mainly comprise
Fixed compensation additional benefits such as insurance contributions, benefits in kind,
expenses for maintenance of two households, use of aircraft, and tax
gross-ups according to local conditions.
Fringe benefits
Performance-based compensation
STI
Short-term incentive
LTI
Long-term incentive
The amount of performance-based compensation depends

primarily on SAP’s performance against predefined financial target
values (Key Performance Indicators, KPIs) and on the SAP share
price, and is subject to hurdles and caps. These KPIs and their target
values as well as their weighting are set by the Supervisory Board
each plan year and are aligned to the SAP budget for that year.
The Supervisory Board sets the individual total target
1)
compensation for each Executive Board member, comprised of the Home currency is the currency of the Executive Board member’s primary place of
residence.
65
Performance-Based Compensation Long-Term Incentive
Short-Term Incentive The purpose of the long-term, multi-year performance-based

compensation (Long-Term Incentive, LTI) is to reward the annual
achievement of the non-IFRS constant currency operating profit, to
ensure long-term retention of our Executive Board members
Financial KPIs 2019
(Retention), and to reward them for a long-term SAP share price
100% performance (Performance) as compared to its main peer group

(Peer Group).
The LTI 2016 plan came into effect on January 1, 2016. It is a
40% New cloud bookings
(at constant currency) virtual share program with a term of four years per tranche.
Under the plan, a new LTI tranche is granted annually. Each grant
35% Cloud and software revenue growth
starts with determining a grant amount in euros. This grant amount
(non-IFRS, at constant currency)
is based on the Executive Board members’ contractual LTI target
25% Operating margin increase amount and the operating profit target achievement (non-IFRS, at
(non-IFRS, at constant currency)
constant currency) for the previous year. Taking this target
achievement into account, the grant amount can be adjusted
upwards or downwards in the range of 80% to 120% of the
Target achievement contractual LTI target amount. The 2018 operating profit target
0% if weighted achievement is below a 75% hurdle achievement was 101.9%. Considering this, the Supervisory Board
set the grant amount of the 2019 tranche at 101.9% of the
0% 75% to 140% contractual LTI target amount.
This grant amount is converted into virtual shares (Share Units),
so that Executive Board members participate in further share price
STI compensation developments. The grant price is the arithmetic mean of the XETRA
closing prices of SAP stock on the 20 trading days following
STI target achievement (%) x STI target amount (€)
publication of SAP’s fourth-quarter results. The grant date of the
2019 tranche was February 20, 2019.
All Share Units granted in this way, comprising 60% Performance
The short-term, one-year performance-based compensation Share Units (PSUs) and 40% Retention Share Units (RSUs), have a
(Short-Term Incentive, STI) is determined based on a set of financial vesting period of approximately four years, during which the
targets (KPIs). Executive Board member must actively contribute to the Company’s
For the STI 2019, the financial KPIs are: Constant currency new operations. The value of the Share Units varies positively and
cloud bookings in 2019, year-over-year growth in non-IFRS constant negatively with the performance of SAP’s share price. At the end of
currency cloud and software revenue in 2019, and non-IFRS the vesting period, the corresponding Share Units are non-
constant currency operating margin in 2019. The KPIs and their forfeitable.
respective target values are derived from SAP’s budget for that year.
For more information about financial KPIs, see the Performance
Management System section.
If the weighted target achievement for the financial KPIs is below
75%, there is no STI payout. In this case, the target achievement for
these KPIs is set to zero.
On February 19, 2020, the Supervisory Board assessed SAP’s
performance against the agreed targets and determined the amount
of the STI 2019 for the entire Executive Board. This resulted in a
target achievement of 82.4% (cloud and software revenue growth of
106.4%, operating margin increase of 130.8%, and new cloud
bookings of 31.2%).
The STI compensation for 2019 will be paid out after the Annual
General Meeting of Shareholders in May 2020. It is paid in the
Executive Board member’s home currency 1). All Executive Board
members are obliged to purchase SAP shares worth at least 5% of
the actual payout amount in accordance with appropriate trading
period regulations. These shares are subject to a three-year holding
period.
1)
Home currency is the currency of the Executive Board member’s primary place of
residence.
66
LTI Grant Process PSU Calculation
Supervisory Board determines grant amount for current

financial year, based on operating profit target achievement 60% PSUs
(non-IFRS, at constant currency) set for the previous year,
Originally granted
80% to 120%
of the target amount set in the Executive Board member’s SAP share price performance relative
contract to Peer Group Index performance
100% = same performance of SAP share price and Peer Group
Index
Grant amount is converted
into PSUs and RSUs
Peer Group Index SAP share price
resulting in
performs better performs better
than SAP share than Peer Group
price Index
60% PSUs 40% decreased by percentage increased by percentage
points of outperformance of points of outperformance.
Performance Share
Units
RSUs Peer Group Index If payout price is higher than
grant price, percentage
Retention points are doubled
Share Units
hurdle at 50% decrease cap at 50% increase
PSU calculation
resulting in a
Performance factor
Payout after four years
0% 50% to 150% max. 150%
Final number of PSUs and RSUs x payout price (€)
Cap of payout price = 300% of grant price
Final number of PSUs

The payout price used for the settlement is the simple arithmetic Originally granted number x performance factor (%)
mean of the XETRA closing prices of SAP stock on the 20 trading
days following the publication of SAP’s fourth-quarter results
subsequent to the end of the vesting period. The payout price is
SAP’s share price performance is measured by comparing the
capped at 300% of the grant price. The LTI tranche is paid in euros
grant price against the payout price. We calculate the difference
after the Annual General Shareholders’ Meeting of the
between SAP’s share price performance and the Peer Group Index
corresponding year. Any potential foreign currency exchange rate
performance. In case of an increased SAP share price and an
risk is borne by the Executive Board members themselves.
outperformance against the Peer Group Index, the calculated
The number of Share Units that will finally result in payments to
difference is doubled to reward positive performance.
the Executive Board members can and will likely differ from the
number originally granted. The number of PSUs ultimately paid out
changes depending on the performance of the SAP share relative to
the Peer Group Index at the end of the vesting period. This places
more weight on SAP's performance within the industry. In contrast,
the final number of RSUs is fixed. However, both types of Share Units
may expire during the entire term of a tranche under certain
conditions (see the "LTI Forfeiture Rules” graphic below).
67
The following examples of the PSU calculation illustrate possible (formerly Symantec). The Supervisory Board has defined this group
outcomes assuming 1,000 PSUs granted: based on internal and external recommendations and, if necessary,
adjusts the group. In 2019, Tableau was delisted and therefore
SAP share price performs better than Peer Group Index removed without replacement from the group. The Peer Group Index
SAP share price performance is calculated as a price index based on weighted market
+18%
capitalization. The weighting is adjusted quarterly, applying a cap of
Peer Group Index performance +10% 15%. Consequently, the weight of smaller, more volatile competitors
Difference +18% – (+10%) +8% is increased in relation to their size, resulting in a highly ambitious
Performance factor with doubled difference
index. The index is calculated daily by Deutsche Börse Group and
(+8% x 2) + 100% 116%
can be tracked under ISIN DE000A2BLEB9.
Final number of PSUs 116% x 1,000 1,160
Composition and Weighting of Peer Group Index
SAP share price performs much higher than Peer Group Index;
cap is triggered
Adobe 16%
SAP share price performance +30%
Peer Group Index performance –5% Microsoft 15%
Difference +30% – (–5%) +35% IBM 15%

Performance factor with doubled difference (+35% x 2) + 100% 170% Salesforce 15%
Capped at 150%
Oracle 14%
Final number of PSUs 150% x 1,000 1,500
VMWare 9%
Peer Group Index performs better than SAP share price ServiceNow 8%
SAP share price performance +5% Workday 6%

Peer Group Index performance +10% NortonLifeLock 2%
as at December 31, 2019
Difference +5% – (+10%) –5%
Performance factor –5% + 100% 95%
Final number of PSUs 95% x 1,000 950 LTI Forfeiture Rules

If an Executive Board member’s service contract is terminated
before the end of the third year following the year in which the Share
Peer Group Index performs better than SAP share price;
low hurdle triggered Units were granted, both the PSUs and RSUs are forfeited in whole
or in part, depending on the circumstances of the relevant
SAP share price performance –10%
resignation from office or termination of the service contract. In case
Peer Group Index performance +50% PSUs and RSUs are forfeited in part, the percentage of the forfeiture
Difference –10% – (+50%) –60% is proportional to the four-year vesting period of each grant. This
means that 25% of the grant is earned each year of the vesting
Performance factor –60% + 100% 40%
period. Unearned grants are forfeited.
Hurdle is 50% 0%
Final number of PSUs 0% x 1,000 0
The Peer Group Index currently includes the following major

international competitors of SAP: Adobe, Microsoft, IBM, Salesforce,
Oracle, VMWare, ServiceNow, Workday, and NortonLifeLock
68
LTI Forfeiture Rules
Example Calculation1)
forfeited grants
Executive Board Executive Board member PSUs and RSUs forfeit
Member resigns starts working for an SAP in their entirety
from office competitor 2) before the
without cause end of the vesting period 100% 100% 100% 100%
2016 2017 2018 2019
Supervisory Board terminates the Executive Board member's

service contract for cause Total four-year: 100% forfeiture
Executive Board Executive Board member PSUs and RSUs forfeit earned grants forfeited grants
Member resigns does not start working for on a pro rata temporis
from office an SAP competitor 2) basis 0%
25%
without cause before the end of the 50%
75%
vesting period
2016 2017 2018 2019

Executive Board member’s service contract expires due to
mutual consent, resignation, retirement, or death Total four-year: 37.5% forfeiture
earned grants plus 50% forfeited grants

Change of PSUs and RSUs are paid
control3) out immediately
0.0% 12.5%
on a pro rata temporis 25.0% 37.5%
basis plus 50% which
otherwise would be
forfeited
2016 2017 2018 2019
Total four-year: 18.75% forfeiture
1)
Example calculation with four tranches (grant allocation of 100%, stable share price from grant to vest, and no consideration of performance condition);
Executive Board member’s contract terminates after year four (December 31, 2019).
2)
As defined in the individual Executive Board members’ contracts; this is not equal to the companies listed in the Peer Group Index.
3)
For the definition, see the Early End-of-Service Undertakings section.
earned grants equalization amount forfeited grants

The change from the previous RSU Milestone Plan to the LTI 2016
Plan required a transition rule in order to avoid unjustified 1,500
disadvantages for Executive Board members. In the event an 250
1,000 1,125 625
Executive Board member leaves the company, the disadvantage 750
arises from the difference in the one-year vesting period in the RSU 375
Milestone Plan in comparison to the four-year vesting period in the
2015 2016 2017 2018 2019
LTI 2016 Plan. In order to compensate for this disadvantage related
to the vesting periods, an individual equalization amount was RSU Milestone Plan LTI 2016 Plan
determined for Executive Board members who participated in the
RSU Milestone Plan.
The equalization amount has been subject to:
– A target achievement of at least 60% of the non-IFRS constant
currency operating profit target, and
– An ongoing employment relationship in 2016, 2017, and, in one
case, in 2018.
In the event an Executive Board member leaves the company and
PSUs would otherwise be forfeited on a pro rata basis, the Executive
Board member is entitled to PSUs equal to the equalization amount.
The following graphic gives an example of how the equalization
amount was derived, assuming a grant of €1,000 for the RSU
Milestone Plan, a grant of €1,500 for the LTI 2016 Plan, and a
forfeiture of the grants on a pro rata temporis basis on
December 31, 2019:
69
Clawback Provisions The following graphic illustrates the relation of the fixed and
SAP has the contractual right to request that the Executive Board performance-based compensation elements in the Executive Board
member returns any payments made from STI or LTI if it members’ target compensation for 2019 based on € amounts, as
subsequently emerges that the payment was not justified in whole well as the minimum and maximum possible compensation. The
or in part because targets were not achieved at all or not achieved in height of the bars is not indicative of the absolute compensation
the scope assumed when calculating the payment amount due on amount.
account of false information having been provided. In such case, the
Compensation Scheme 2019
Executive Board member is obliged to repay to SAP the amount by
which the payment actually made exceeds the payment amount due
on the basis of the targets actually achieved. Such contractually
agreed claim to repayment supplements the claim for restitution of 347%
unjustified enrichment pursuant to section 812 of the German Civil 317%
Code (BGB).
Minimum and Maximum Compensation LTI (long-term

incentive)
The minimum compensation amount reflects the fixed
STI (short-term
compensation amount and an LTI and STI payout of zero.
incentive)
The maximum compensation amount is capped at 347% (Co-
Fixed
CEO) and 317% (Executive Board member other than Co-CEO) of
compensation
the total target compensation of the Executive Board members who
were employed at year end. Due to the change during the year, we
have annualized the compensation for our calculation. This would be
100% 100%
achieved in the event of the maximum possible payout amount of
the STI and the LTI, as follows:
– The maximum possible payout amount of the STI is reached
when the target achievement of all financial KPIs is 140%.
13% 17%
– The maximum possible payout amount for the LTI tranche is
468% of the contractual target amount.
Min Target Max Min Target Max
The maximum possible payout amount of the LTI is reached if all Executive Board
Co-CEO
of the following conditions are cumulatively met: (other than Co-CEO)
– The grant amount for the LTI tranche has been set at its capped
maximum of 120% of the contractual target amount.
– SAP’s share price outperforms the Peer Group Index by at least Overview of the Relations Between Target and Payout for
25 percentage points (reaching the capped maximum 150% of Performance-Based Compensation
the initial PSU allocation for that year). The total target achievements of STI reflect the relation between
– The SAP share price has at least tripled (corresponding to an the target amount and the payout amount. The STIs for the years
average annual increase of approximately 32%) compared to the 2015 to 2018 were already paid out.
grant price (cap on share price development).
STI Total Target Achievement
Percentage 2019 2018 2017 2016 2015
In the event of the maximum LTI payout for the entire Executive
Board of €117 million in 2023, the shareholders would also benefit 82.4 93.0 88.2 104.4 147.5
through the strong increase in market capitalization, which would be
at least €200 billion from 2019 to 2023. The relation between the LTI target amounts for the 2016 to 2019
tranches and the theoretical payout amounts are based on SAP’s
share price at year end. The 2015 tranche discloses the relation
between the respective target amount and the actual payout amount
in May 2019.
Relation Between Target Amount and Payout Amount of the LTI

Percentage LTI 2016 Plan RSU
Milestone
Plan 2015
2019 2018 2017 2016 2015
Tranche1) Tranche1) Tranche1) Tranche1) Tranche2)
12/31/2019 156.6 126.4 110.5 76.8 233.8
12/31/2018 NA 90.9 82.6 55.5 233.8

1)
Consideration of theoretical payout amounts based on SAP’s share price at
year end
2)
Consideration of individual adjustment factor in addition to target
achievement 2015 ranging between 31.62% and 37.38%
70
Changes to Compensation System for 2020 that the hurdle for the individual KPIs is missed and results in the
weighted target achievement also falling below the overall hurdle of
General 75%, the individual hurdle for the respective KPI will be ignored.
For 2020 and beyond, the Supervisory Board established
changes to the STI and LTI to align compensation to support SAP’s Long-Term Incentive
strategy, including business transformation and medium-term The Supervisory Board introduced a new long-term multi-year
prospects. The changes were based on analysis of market best performance-based compensation plan effective from 2020 and
practice and feedback from investors. onwards: the SAP Long Term Incentive Program 2020 (LTI 2020).
The LTI 2020 reflects SAP’s strategy, rewards the development of
Short-Term Incentive SAP’s total shareholder return (TSR) in comparison to the market,
The major differences in the STI 2020 compared to the previous and has a retention element. It is a financially rewarding instrument
STI are as follows: for attracting and retaining SAP’s Executive Board members, who
– Introduction of sustainability targets (sustainability KPIs) with a play a key role in increasing the earnings power and in enhancing the
total weighting of 20% in addition to the financial targets value of SAP over the long term.
(financial KPIs). The sustainability KPIs are: Customer Net The major differences in the LTI 2020 compared to the previous
Promoter Score, which measures SAP’s customer loyalty; LTI plan are as follows:
Employee Engagement Index, which measures SAP’s employee – The discretion element in determining the grant amount has
commitment, pride, and loyalty; and Carbon Impact, which been eliminated. Therefore, the grant amount is the contractually
measures SAP’s greenhouse gas emissions. agreed target amount.
– Replacement of the financial KPI new cloud bookings by current – SAP’s performance of the Market Performance Share Units
cloud backlog, which includes new contracts as well as renewals (MSUs) is now measured based on total shareholder return
of existing contracts and thus reflects cloud growth more (previous plan: share price) and compared against the NASDAQ-
holistically than the cloud bookings metric. 100 Index (previous plan: SAP Peer Group Index) over three years
– Limitation of the Supervisory Board’s discretion to adjust the (previous plan: four years).
performance-based compensation for the STI before payout – The achievement of financial targets is rewarded with Financial
upwards or downwards in the interest of SAP for cases of Performance Share Units (FSUs) with a performance period of
extraordinary, unforeseeable events, to a range of +/–20%. three years. The financial targets are set in line with SAP’s
communicated mid-term ambition for 2023. (previous plan: no
FSUs).
Financial Sustainability – The RSU component has been reduced to 33.3% (previous plan:
KPIs 2020 KPIs 2020 40%).
– The payout will include the share price as well as dividends
80% 20% (previous plan: only share price).
30% Current cloud 6.67% Customer Net – The payout is capped at 200% of the grant price (previous plan:
backlog Promoter Score 300%).
(non-IFRS1), at (NPS) – In case of death or disability, the unearned grant will vest in full
constant currency) according to the payout schedule (previous plan: forfeits on a pro
6.67% Employee
25% Cloud and Engagement Index rata temporis basis).
software revenue (EEI in %) – The Supervisory Board limited the extent of the discretion to
growth 6.67% Carbon Impact adjust the performance-based compensation for the LTI before
(non-IFRS1), at (greenhouse gas payout upwards or downwards in the interest of SAP for cases of
constant currency) emissions in kt CO2) extraordinary, unforeseeable events, to a range of +/–10%
25% Operating margin (previous plan: no limitation).
increase
(non-IFRS1), at
constant currency)
Target achievement
0% if weighted achievement is below a 75% hurdle
0% 75% to 140%
STI compensation
STI target achievement (%) x STI target amount (€)
1)
Based on SAP’s non-IFRS metrics as defined for use in SAP’s 2019 full year
external financial reporting
Each underlying KPI includes a hurdle and a cap in addition to the

overall hurdle of 75% and the overall cap of 140%. %. In the event
71
LTI Grant Process MSU Calculation
Grant amount is converted

into Share Units
⅓ MSUs
Originally granted
= grant amount (€) ÷ grant price (€)
TSR performance: SAP relative to

⅓ MSUs ⅓ FSUs ⅓ RSUs Index
Market Financial Retention
100% = SAP is ranked to the median of the index companies
Performance Performance Share Units
Share Units Share Units
Index TSR SAP TSR
performs better performs better
MSU FSU
than SAP TSR than Index TSR
calculation calculation
SAP is ranked less than the SAP is ranked better than
median of the index the median of the index
companies companies.
Payout after four years Performance factor is only
higher than 100% when
Final number of all Share Units SAP TSR performance is
x (payout price (€) + dividend amount per share (€)) positive.
Cap of payout per share = 200% of grant price
resulting in a
The vesting period of four years remains unchanged. In Market performance factor
connection with Michael Kleinemeier’s contract extension, a vesting
period of one year has been agreed for his 2020 tranche.
Final number of MSUs after three years

Originally granted number x market performance factor (%)
SAP’s total shareholder return (TSR) performance is measured

over the three-year measurement period and ranked in relation to
the TSR performance of the companies of the NASDAQ-100 Index.
TSR means the performance of the share combining share price
development and granted and reinvested dividends. The market
performance factor has a cap at 150% at the 75th percentile (P-75)
and a hurdle of 50% at 25th percentile (P-25), below the hurdle no
MSUs are considered.
72
The following examples of the MSU calculation illustrate possible FSU Calculation
outcomes assuming 1,000 MSUs granted:
SAP TSR performs better than TSR of NASDAQ-100 companies; cap is
triggered
SAP TSR performance +18%

⅓ FSUs
Originally granted
Performance factor 80th percentile 160%
Cap 75th percentile 150% SAP’s financial target achievement

Final number of MSUs 150% x 1,000 1,500 100% = SAP achieves 100% of the three equally-weighted
financial targets
SAP TSR performs better than TSR of NASDAQ-100 companies; in a
downwards market trend
SAP TSR performance –5% ⅓ ⅓ ⅓

Cloud Total Operating
Performance factor 55th percentile 110% revenue revenue income
(non-IFRS1), at (non-IFRS1), at (non-IFRS1), at
Cap positive performance 100% constant currency) constant currency constant currency)
Final number of MSUs 100% x 1,000 1,000
resulting in a
TSR of NASDAQ-100 companies perform better than SAP TSR; low
hurdle is triggered Financial performance factor
SAP TSR performance –5%
Performance factor 20th percentile 40%
Hurdle 25th percentile 0%
Final number of MSUs 0% x 1,000 0
Final number of FSUs after three years

Originally granted number x financial performance factor (%)
1)
Based on SAP’s non-IFRS metrics as defined for use in SAP’s 2019 full-year
external financial reporting
The final number of FSUs changes depending on SAP’s

performance against the financial KPI targets over the entire three-
year performance period. The financial KPIs are derived from SAP’s
communicated mid-term ambition for 2023. Cloud revenue and total
revenue have a cap of 120% and a hurdle of 80% target
achievement, while operating income has a cap of 110% and a hurdle
of 90% target achievement.
73
Compensation Scheme 2020 Amount of Compensation for 2019
We present the Executive Board compensation disclosures in
accordance with the recommendations of the German Corporate
217% Governance Code (“GCGC”). Furthermore, the tables below provide
LTI (long-term 206% a reconciliation statement following the requirements of
incentive)
sections 314 and 315 of the German Commercial Code
STI (short-term
(Handelsgesetzbuch, or “HGB”) as specified in the German
incentive)
Accounting Standards (“GAS 17”). Pursuant to the
Fixed
recommendations of the GCGC, the value of benefits granted for the
compensation
year under review as well as the benefits received, that is, the
amounts disbursed for the year under review, are disclosed below
100%
based on the reference tables recommended in the GCGC. In
100%
contrast to the disclosure rules stipulated in the German HGB and
GAS 17, the GCGC includes the pension expense, that is, the service
cost according to IAS 19, in the Executive Board compensation and
requires the additional disclosure of the target value for the one-year
variable compensation and the maximum and minimum
compensation amounts achievable for the variable compensation
13% 16% elements.
Min Target Max Min Target Max

Executive Board
Co-CEO
(other than Co-CEO)
Executive Board Members’ Compensation

German Corporate Governance Code
€ thousands Christian Klein Jennifer Morgan
(Co-CEO from 10/10/2019) (Co-CEO from 10/10/2019)
Benefits Granted Benefits Received Benefits Granted Benefits Received

2019 2019 2019 2018 2019 2018 20191) 2019 2019 2018 1) 20191) 2018 1)
(Min) (Max) (Min) (Max)
Fixed compensation 789.9 789.9 789.9 700.0 789.9 700.0 762.1 762.1 762.1 634.3 762.1 634.3
2)
Fringe benefits 14.8 14.8 14.8 13.1 14.8 13.1 125.8 125.8 125.8 128.4 125.8 128.4
Total 804.7 804.7 804.7 713.1 804.7 713.1 887.9 887.9 887.9 762.7 887.9 762.7
One-year variable 1,301.8 0 1,822.5 1,125.8 1,046.9 1,251.5 0 1,752.1 1,052.0 978.4 594.6
compensation
Multi-year variable
compensation
LTI 2016 Plan 3,407.9 0 12,260.1 1,793.2 3,731.2 0 13,424.8 2,128.8
RSU Milestone
Plan 2015
Total 5,514.4 804.7 14,887.3 3,632.1 1,851.6 713.1 5,870.5 887.9 16,064.8 3,943.5 1,866.2 1,357.3
Service cost 104.6 104.6 104.6 51.4 104.6 51.4
Total according to 5,514.4 804.7 14,887.3 3,632.1 1,851.6 713.1 5,975.1 992.5 16,169.4 3,994.9 1,970.8 1,408.7
GCGC
74
€ thousands Robert Enslin Adaire Fox-Martin
Member of the Executive Board (until 4/5/2019) Member of the Executive Board
20191) 2019 2019 20181) 20191) 20181) 2019 2019 2019 2018 2019 2018
2)
Fringe benefits 202.1 202.1 202.1 105.1 202.1 105.1 31.0 31.0 31.0 54.6 31.0 54.6
Total 421.8 421.8 421.8 905.3 421.8 905.3 731.0 731.0 731.0 754.6 731.0 754.6
One-year variable 1,352.8 0 1,893.9 1,327.3 1,234.4 1,117.7 1,125.8 0 1,576.1 1,125.8 1,046.9 666.5
compensation
Multi-year variable
compensation
LTI 2016 Plan 2,545.6 0 10,062.8 2,270.3 2,823.1 0 10,873.8 2,128.8

RSU Milestone 1,248.8
Plan 2015 3,628.6
Total 4,320.2 421.8 12,378.5 4,502.9 5,284.8 3,271.8 4,679.9 731.0 13,180.9 4,009.2 1,777.9 1,421.1
Service cost 177.5 177.5 177.5 235.8 177.5 235.8

Total according to 4,497.7 599.3 12,556.0 4,738.7 5,462.3 3,507.6 4,679.9 731.0 13,180.9 4,009.2 1,777.9 1,421.1
GCGC
€ thousands Michael Kleinemeier Bernd Leukert

Member of the Executive Board Member of the Executive Board (until 3/31/2019)

2019 2019 2019 2018 2019 2018 2019 2019 2019 2018 2019 2018
2)
Fringe benefits 29.0 29.0 29.0 29.1 29.0 29.1 2.3 2.3 2.3 10.3 2.3 10.3
Total 729.0 729.0 729.0 729.1 729.0 729.1 177.3 177.3 177.3 710.3 177.3 710.3
One-year variable 1,125.8 0 1,576.1 1,125.8 1,046.9 992.9 1,125.8 0 1,576.1 1,125.8 1,046.9 992.9
compensation
Multi-year variable
compensation
LTI 2016 Plan 2,387.0 0 9,435.6 2,128.8 2,688.6 0 10,627.9 2,397.7
RSU Milestone 473.8 3,773.2 1,248.8

Plan 2015
Total 4,241.7 729.0 11,740.6 3,983.7 2,249.7 1,722.0 3,991.6 177.3 12,381.3 4,233.8 4,997.4 2,952.0
Service cost
Total according to 4,241.7 729.0 11,740.6 3,983.7 2,249.7 1,722.0 3,991.6 177.3 12,381.3 4,233.8 4,997.4 2,952.0
GCGC
75
€ thousands Bill McDermott Luka Mucic
(CEO until 10/10/2019, Member of the Executive Board
member of the Executive Board until 11/15/2019)
20191) 2019 2019 20181) 20191) 20181) 2019 2019 2019 2018 2019 2018
Fixed compensation 1,212.0 1,212.0 1,212.0 1,314.7 1,212.0 1,314.7 700.0 700.0 700.0 700.0 700.0 700.0
2)
Fringe benefits 1,123.6 1,123.6 1,123.6 794.7 1,123.6 794.7 12.0 12.0 12.0 11.8 12.0 11.8
Total 2,335.6 2,335.6 2,335.6 2,109.4 2,335.6 2,109.4 712.0 712.0 712.0 711.8 712.0 711.8
One-year variable 2,235.2 0 3,129.3 2,193.0 2,039.5 1,846.7 1,125.8 0 1,576.1 1,125.8 1,046.9 992.9
compensation
Multi-year variable
compensation
LTI 2016 Plan 7,710.6 0 30,479.5 6,876.6 2,387.0 0 9,435.6 2,128.8
RSU Milestone
10,315.3 5,251.0 3,732.5 949.5
Plan 2015
Total 12,281.3 2,335.6 35,944.4 11,179.0 14,690.4 9,207.1 4,224.7 712.0 11,723.6 3,966.4 5,491.4 2,654.2
Service cost 486.5 486.5 486.5 568.3 486.5 568.3
Total according to 12,767.8 2,822.1 36,430.9 11,747.3 15,176.9 9,775.4 4,224.7 712.0 11,723.6 3,966.4 5,491.4 2,654.2
GCGC
€ thousands Jürgen Müller Stefan Ries

Member of the Executive Board (from 1/1/2019) Member of the Executive Board

2019 2019 2019 2018 2019 2018 2019 2019 2019 2018 2019 2018
Fixed compensation 700.0 700.0 700.0 700.0 700.0 700.0 700.0 700.0 700.0 700.0
2)
Fringe benefits 13.5 13.5 13.5 13.5 21.8 21.8 21.8 21.9 21.8 21.9
Total 713.5 713.5 713.5 0 713.5 0 721.8 721.8 721.8 721.9 721.8 721.9
One-year variable 1,125.8 0 1,576.1 1,125.8 0 1,576.1 1,125.8 1,046.9 992.9

compensation
Multi-year variable
compensation
LTI 2016 Plan 2,185.8 0 8,640.5 2,010.7 0 7,948.3 1,793.2
RSU Milestone
Plan 2015
Total 4,025.1 713.5 10,930.1 0 713.5 0 3,858.3 721.8 10,246.2 3,640.9 1,768.7 1,714.8
Service cost
Total according to 4,025.1 713.5 10,930.1 0 713.5 0 3,858.3 721.8 10,246.2 3,640.9 1,768.7 1,714.8
GCGC
76
€ thousands Thomas Saueressig Total Executive Board
Member of the Executive Board (from 11/1/2019)

2019 2019 2019 2018 2019 2018 2019 2018 2019 2018
(Min) (Max)
Fixed compensation 116.7 116.7 116.7 116.7 6,775.3 6,949.2 6,775.3 6,949.2
Fringe benefits 2) 2.1 2.1 2.1 2.1 1,578.0 1,169.0 1,578.0 1,169.0
Total 118.8 118.8 118.8 0 118.8 0 8,353.2 8,118.2 8,353.3 8,118.2
One-year variable 188.1 0 263.4 13,083.9 11,327.1 10,534.0 8,197.1

compensation
Multi-year variable
compensation
LTI 2016 Plan 515.2 0 1,444.0 32,392.7 23,646.2
RSU Milestone 21,923.4 8,698.1

Plan 2015
Total 822.1 118.8 1,826.2 0 118.8 0 53,829.8 43,091.5 40,810.6 25,013.4
Service cost 768.6 855.5 768.6 855.5
Total according to 822.1 118.8 1,826.2 0 118.8 0 54,598.4 43,947.0 41,579.2 25,868.9
GCGC
1)
The value of the fixed and one-year variable compensation is granted in U.S. dollars. For conversion purposes from U.S. dollars into euro, for fixed compensation
the average exchange rate and for the one-year variable compensation the year-end exchange rate of the respective period applies.
2)
Insurance contributions, the private use of company cars and aircraft, benefits in kind, compensation for unused vacation, expenses for maintenance of two
households, reimbursement of fees for lawyers, the preparation of tax returns, and tax gross-ups according to local conditions. The fringe benefits of Bill
McDermott mainly consist of expenses for maintenance of two households, the preparation of tax returns, and tax gross-ups according to local conditions.
Reconciliation Reporting of Total Compensation Pursuant to Section 314(1)(6a) HGB in Connection with GAS 17
€ thousands Christian Klein Jennifer Morgan Robert Enslin Adaire Fox-Martin
2019 2018 2019 2018 2019 2018 2019 2018
Total according to GCGC 5,514.4 3,632.1 5,975.1 3,994.9 4,497.7 4,738.7 4,679.9 4,009.2
Less granted annual variable –1,301.8 –1,125.8 –1,251.5 –1,052.0 –1,352.8 –1,327.3 –1,125.8 –1,125.8
compensation
Plus allocated actual annual 1,072.7 1,046.9 1,031.2 978.4 290.1 1,234.4 927.6 1,046.9
variable compensation
Less service cost –104.6 –51.4 –177.5 –235.8
Total compensation 5,285.3 3,553.2 5,650.2 3,869.9 3,257.5 4,410.0 4,481.7 3,930.3
€ thousands Michael Kleinemeier Bernd Leukert Bill McDermott Luka Mucic
2019 2018 2019 2018 2019 2018 2019 2018
Total according to GCGC 4,241.7 3,983.7 3,991.6 4,233.8 12,767.8 11,747.3 4,224.7 3,966.4
Less granted annual variable –1,125.8 –1,125.8 –1,125.8 –1,125.8 –2,235.2 –2,193.0 –1,125.8 –1,125.8
compensation
Plus allocated actual annual 927.6 1,046.9 228.7 1,046.9 1,609.7 2,039.5 927.6 1,046.9
Less service cost –486.5 –568.3
Total compensation 4,043.6 3,904.8 3,094.6 4,154.9 11,655.9 11,025.5 4,026.6 3,887.5
77
Reconciliation Reporting of Total Compensation Pursuant to Section 314(1)(6a) HGB in Connection with GAS 17
€ thousands Jürgen Müller Stefan Ries Thomas Saueressig Total Executive Board
2019 2018 2019 2018 2019 2018 2019 2018
Total according to GCGC 4,025.1 0 3,858.3 3,640.9 822.1 0 54,598.4 43,947.0
Less granted annual variable –1,125.8 –1,125.8 –1,125.8 –188.1 –13,083.9 –11,327.1
compensation
Plus allocated actual annual 927.6 927.6 1,046.9 155.0 9,025.4 10,534.0
Less service cost –768.6 –855.5
Total compensation 3,826.9 0 3,660.1 3,562.0 788.9 0 49,771.3 42,298.4
Vertical Pay Ratio 2018

The vertical pay ratio compares the total target compensation Ratio CEO Executive Board
granted to the Co-CEOs and the Executive Board members other (Other Than
than Co-CEO with the total target compensation granted to the CEO)
Average Annual 10,384.3 3,942.3
Executives and all employees collectively who were employed at year
Compensation
end. Due to the changes on the Executive Board during the year, we (in € thousands)
have annualized the compensation for our calculation. In order to
Executives 906 11 4
ensure comparability, only fixed compensation, one-year and multi-
Employees 99 105 40
year variable compensation are considered. The Executives
including
comprise the first and second management levels below the Executives
Executive Board, that is, the Global Executive Team (GET) and the
Senior Executive Team (SET). 2017
Ratio CEO Executive Board

2019 (Other Than
CEO)
Ratio Co-CEO Executive Board
(Other Than Co- Average Annual 11,209.2 3,880.0
CEO) Compensation
(in € thousands)
Compensation Executives 923 12 4
(in € thousands)
Employees 101 111 39
Executives 915 9 5 including
Executives
Employees 103 84 41
including
Executives
2016
Ratio CEO Executive Board

(Other Than
CEO)
Compensation
(in € thousands)
Executives 823 14 5
Employees 99 119 41
including
Executives
78
Share-Based Payment Information Relating to Long-Term Incentives
Members of the Executive Board received, hold, or held share information about the terms and details of these programs, see the
units issued to them under the LTI 2016 Plan and hold or held RSUs Notes to the Consolidated Financial Statements, Note (B.3).
issued to them under the RSU Milestone Plan 2015. For more
Grants Under the LTI 2016 Plan

Year Total RSUs PSUs Fair Value at Time of Grant
Granted Share Units (40%) (60%)
Quantity Quantity Quantity € per RSUs € per PSUs € thousands
Christian Klein 2019 1)

7,797 3,119 4,678 117.39 139.97 1,021
(Co-CEO from 10/10/2019)
2019 26,047 10,419 15,628 88.54 93.71 2,387
2018 22,385 8,954 13,431 79.01 80.84 1,793

Jennifer Morgan 2019 1)
6,378 2,552 3,826 117.39 139.97 835
(Co-CEO from 10/10/2019)
2)
2019 4,634 1,853 2,781 101.98 115.10 509
2019 26,047 10,419 15,628 88.54 93.71 2,387
2018 26,574 10,630 15,944 79.01 80.84 2,129

Robert Enslin 2019 27,778 11,111 16,667 88.54 93.71 2,546
(until 4/5/2019)
2018 28,340 11,336 17,004 79.01 80.84 2,270
Adaire Fox-Martin 2019 2)
3,970 1,588 2,382 101.98 115.10 436
2019 26,047 10,419 15,628 88.54 93.71 2,387
2018 26,574 10,630 15,944 79.01 80.84 2,129

Michael Kleinemeier 2019 26,047 10,419 15,628 88.54 93.71 2,387
2018 26,574 10,630 15,944 79.01 80.84 2,129

Bernd Leukert 2019 29,338 11,735 17,603 88.54 93.71 2,689
(until 3/31/2019)
2018 29,931 11,972 17,959 79.01 80.84 2,398
Bill McDermott 2019 84,138 33,655 50,483 88.54 93.71 7,711
(CEO until 10/10/2019, Executive
Board member until 11/15/2019) 2018 85,841 34,336 51,505 79.01 80.84 6,877
Luka Mucic 2019 26,047 10,419 15,628 88.54 93.71 2,387
2018 26,574 10,630 15,944 79.01 80.84 2,129

Jürgen Müller (from 1/1/2019) 2019 23,852 9,541 14,311 88.54 93.71 2,186
Stefan Ries 2019 21,941 8,776 13,165 88.54 93.71 2,011
2018 22,385 8,954 13,431 79.01 80.84 1,793

Thomas Saueressig (from 11/1/2019) 2019 3,986 1,594 2,392 114.67 138.96 515
Total 2019 344,047 137,619 206,428 32,393
2018 295,178 118,072 177,106 23,646
1)
Additional grant due to appointment as Co-CEO
2)
Additional grant due to extension of responsibilities
79
Executive Board Members’ Holdings
LTI 2016 Plan
Quantity of Share Units Year Holding on Granted Forfeited1) Balanced PSUs 2) Holding on
Granted 1/1/2019 12/31/2019
RSUs (40%) PSUs (60%)
Christian Klein (Co-CEO from 2019 0 13,538 20,306 0 0 33,844

10/10/2019)
2018 22,385 0 0 0 0 22,385
Jennifer Morgan (Co-CEO from 2019 0 14,824 22,235 0 0 37,059
10/10/2019)
2018 26,574 0 0 0 0 26,574
2017 18,539 0 0 0 0 18,539

Robert Enslin (until 4/5/2019) 2019 0 11,111 16,667 25,972 14,809 16,615
2018 28,340 0 0 19,417 0 8,923
2017 29,454 0 0 12,822 0 16,632
2016 40,417 0 0 7,470 0 32,947

Adaire Fox-Martin 2019 0 12,007 18,010 0 0 30,017
2018 26,574 0 0 0 0 26,574
2017 18,539 0 0 0 0 18,539

Michael Kleinemeier 2019 0 10,419 15,628 0 0 26,047
2018 26,574 0 0 0 0 26,574
2017 27,619 0 0 0 0 27,619
2016 37,898 0 0 0 0 37,898

Bernd Leukert (until 2019 0 11,735 17,603 12,852 10,443 26,929
3/31/2019) 3)
2018 29,931 0 0 5,634 3,381 27,678
2017 31,109 0 0 0 0 31,109
2016 42,687 0 0 0 0 42,687

Bill McDermott (CEO until 2019 0 33,655 50,483 65,767 35,857 54,228
10/10/2019, Executive Board
member until 11/15/2019) 2018 85,841 0 0 45,653 0 40,188
2017 89,217 0 0 25,159 0 64,058
2016 122,423 0 0 3,855 0 118,568

Luka Mucic 2019 0 10,419 15,628 0 0 26,047
2018 26,574 0 0 0 0 26,574
2017 27,619 0 0 0 0 27,619
2016 37,898 0 0 0 0 37,898

Jürgen Müller (from 1/1/2019) 2019 0 9,541 14,311 0 0 23,852
Stefan Ries 2019 0 8,776 13,165 0 0 21,941
2018 22,385 0 0 0 0 22,385
2017 23,265 0 0 0 0 23,265
2016 23,987 0 0 0 0 23,987

Thomas Saueressig (from
11/1/2019) 2019 0 1,594 2,392 0 0 3,986
Total 865,849 137,619 206,428 224,601 64,490 1,049,785

1)
Forfeiture according to leaver rules
2)
To balance disadvantages from leaver rules under the LTI 2016 Plan
3)
Forfeiture under the leaver rules assuming termination as at 3/31/2021
The Share Units granted in 2019 have a remaining term of 1.1 years, and the share units granted in 2016 have a remaining term
3.1 years, the share units granted in 2018 have a remaining term of of 0.1 years.
2.1 years, the share units granted in 2017 have a remaining term of
80
RSU Milestone Plan 2015
Quantity of RSUs Year Granted Holding on Exercised Holding on
1/1/2019 12/31/2019
Robert Enslin (until 4/5/2019) 2015 39,985 39,985 0
Michael Kleinemeier 2015 5,221 5,221 0
Bernd Leukert (until 3/31/2019) 2015 41,578 41,578 0
Bill McDermott (CEO until 10/10/2019, Executive Board 2015 113,667 113,667 0
member until 11/15/2019)
Luka Mucic 2015 41,130 41,130 0
Total 241,581 241,581 0
The table above shows the Executive Board members’ holdings Saueressig are entitled to receive a retirement pension when they
issued to them under the RSU Milestone Plan 2015. The plan was a reach the retirement age of 62 and retire from their Executive
cash-settled long-term incentive scheme with a payout subsequent Board seat; or a disability pension depending on a health
to a performance period of one year (after which the RSUs become examination if, before reaching the regular retirement age, they
non-forfeitable) and an additional holding period of three years. The become subject to occupational disability or permanent
plan consisted of four plan tranches which were issued with respect incapacity. A surviving dependent’s pension is paid on the death
to the calendar years 2012 through 2015. of a former member of the Executive Board. The disability
pension is 100% of the vested retirement pension entitlement
Total Expense for Share-Based Payment and is payable until the beneficiary’s 62nd birthday, after which it
€ thousands 2019 2018 is replaced by a retirement pension. The surviving dependent’s
pension is 60% of the retirement pension or vested disability
Christian Klein (Co-CEO from 10/10/2019) 1,925 442.2
pension entitlement at death. Entitlements are enforceable
Jennifer Morgan (Co-CEO from 10/10/2019) 2,894 796.1 against SAP SE. Current pension payments are reviewed annually
Robert Enslin (until 4/5/2019) 3,480 727.0 for adjustments and, if applicable, increased according to the
surplus in the pension liability insurance. If service is ended
Adaire Fox-Martin 2,667 796.1
before the retirement age of 62, pension entitlement is reduced in
Michael Kleinemeier 3,253 914.2 proportion as the actual length of service stands in relation to the
Bernd Leukert (until 3/31/2019) 8,606 775.2
maximum possible length of service. The applied retirement
pension plan is contributory. The contribution is 4% of applicable
Bill McDermott (CEO until 10/10/2019, 14,689 2,155.8
compensation up to the applicable income threshold plus 14% of
Executive Board member until 11/15/2019)
applicable compensation above the applicable income threshold.
Luka Mucic 3,391 675.8 For this purpose, applicable compensation is 180% of annual
Jürgen Müller (from 1/1/2019) 768 - base salary. The applicable income threshold is the statutory
annual income threshold for the state pension plan in Germany
Stefan Ries 2,646 772.0
(West), as amended from time to time.
Thomas Saueressig (from 11/1/2019) 128 - – Bill McDermott has rights to future benefits under the portion of
Total 44,446.5 8,054.4 the pension plan for SAP America classified as “Non-Qualified
Retirement Plan” according to the U.S. Employee Retirement
Income Security Act (ERISA). This “Non-Qualified” pension plan
Total expense for the share-based payment plans of Executive
is a cash balance plan that provides either monthly pension
Board members was determined in accordance with IFRS 2 (Share-
payments or a lump sum on retirement. The pension becomes
Based Payments) and consists exclusively of obligations arising
available from the beneficiary’s 65th birthday. Subject to certain
from Executive Board activities.
conditions, the plan also provides earlier payment or invalidity
benefits. The “Non-Qualified” pension plan closed with effect
End-of-Service Benefits
from January 1, 2009. Interest continues to be accrued on the
Regular End-of-Service Undertakings earned rights to benefits within this plan. The rights were partially
earned before Bill McDermott became a member of the SAP
Retirement Pension Plan Executive Board.
The following retirement pension agreements apply to the – SAP made contributions to a third-party pension plan for Bill
individual members of the Executive Board: McDermott, Robert Enslin, and Jennifer Morgan, as disclosed in
– Adaire Fox-Martin, Christian Klein, Michael Kleinemeier, Bernd the tables ‘German Corporate Governance Code’. SAP’s matching
Leukert, Luka Mucic, Jürgen Müller, Stefan Ries, and Thomas contributions are based on payments by Bill McDermott, Robert
Enslin, and Jennifer Morgan into this pension plan.
81
Total Defined Benefit Obligations (DBO) and Net Defined Benefit Liability (Asset) to Executive Board
Members
€ thousands Christian Adaire Michael Bernd Bill Luka Jürgen Stefan Thomas Total
Klein Fox- Kleinemeier1) Leukert McDermott Mucic1) Müller Ries 1) Saueressig
(Co-CEO from Martin 1) (until (CEO until (from (from
1) 1) 1) 1)
10/10/2019) 3/31/2019) 10/10/2019, 1/1/2019) 11/1/2019)
Executive Board
Member until
11/15/2019)
DBO 1/1/2018 – 93.5 271.9 584.5 1,310.5 585.9 – 344.6 – 3,190.9
Less plan assets – 100.7 345.9 540.9 – 490.7 – 275.8 – 1,754.0

market value 1/1/2018
Net defined benefit – –7.2 –74.0 43.6 1,310.5 95.2 – 68.8 – 1,436.9
liability (asset) 1/1/2018
DBO change in 2018 112.8 89.9 66.7 –16.1 106.2 –42.1 – –67.2 – 250.2
Plan assets change in 141.3 156.3 161.7 153.9 – 145.0 – 143.5 – 901.7
2018
DBO 12/31/2018 112.8 183.4 338.6 568.4 1,416.7 543.8 – 277.4 – 3,441.1
Less plan assets 141.3 257.0 507.6 694.8 – 635.7 – 419.3 – 2,655.7
market value
12/31/2018
Net defined benefit –28.5 –73.6 –169.0 –126.4 1,416.7 –91.9 – –141.9 – 785.4
liability (asset)
12/31/2018
DBO change in 2019 244.7 207.6 205.9 416.5 63.3 475.0 149.7 251.4 41.9 2,056.0
Plan assets change in 145.9 160.6 171.2 363.0 – 147.2 – 144.9 – 1,132.8
2019
DBO 12/31/2019 357.5 391.0 544.5 984.9 1,480.0 1,018.8 149.7 528.8 41.9 5,497.1
Less plan assets 287.2 417.6 678.8 1,057.8 – 782.9 – 564.2 – 3,788.5
market value
12/31/2019
Net defined benefit 70.3 –26.6 –134.3 –72.9 1,480.0 235.9 149.7 –35.4 41.9 1,708.6
liability (asset)
12/31/2019
1)
The values shown here only reflect the pension entitlements that Christian Klein, Adaire Fox-Martin, Michael Kleinemeier, Bernd Leukert, Luka Mucic, Jürgen
Müller, Stefan Ries and Thomas Saueressig will receive from the retirement pension plan for Executive Board members.
The table below shows the annual pension entitlement earned These are vested entitlements. To the extent that members
during the Executive Board membership of each member of the continue to serve on the Executive Board and that therefore more
Executive Board on reaching the scheduled retirement age of 62, contributions are made for them in the future, pensions actually
based on entitlements from SAP under performance-based and payable at the scheduled retirement age will be higher than the
salary-linked plans. amounts shown in the table.
Annual Pension Entitlement

€ thousands Vested on Vested on
12/31/2019 12/31/2018
Christian Klein (Co-CEO from 8.2 4.1

10/11/2019)
Adaire Fox-Martin 11.8 7.3
Michael Kleinemeier 20.0 14.8
Bernd Leukert (until 3/31/2019) 34.7 24.6
Bill McDermott (CEO until 10/10/2019, 90.8 105.1

Executive Board Member until
11/15/2019) 1)
Luka Mucic 27.6 23.2
Jürgen Müller (from 1/1/2019) 4.8 -
Stefan Ries 16.8 12.6
Thomas Saueressig (from 11/1/2019) 0.2 -

1)
The rights shown here for Bill McDermott refer solely to rights under the
pension plan for SAP America.
82
Postcontractual Non-Compete Provisions which they are responsible. Upon the appointment of Jürgen Müller
Each Executive Board member’s contract includes a 12-month and Thomas Saueressig to the Executive Board, the Supervisory
postcontractual non-compete agreement. During this non-compete Board abstained from the waiting period of one year in consideration
period, Executive Board members receive abstention payments of their long-term successful tenures with SAP.
corresponding to 50% of their average contractual compensation as If an Executive Board member’s appointment to the Executive
members. This average is calculated on the basis of the preceding Board expires or ceases to exist because of, or as a consequence of,
three years. Any other occupational income generated by the change or restructuring, or due to a change of control, SAP SE and
Executive Board member is deducted from their compensation. each Executive Board member has the right to terminate the
The following table presents the theoretical amounts for the net employment contract within eight weeks of the occurrence by giving
present values of the postcontractual non-compete abstention six months’ notice. A change of control is deemed to occur when:
payments. The calculation assumes the following: – A third party is required to make a mandatory takeover offer to
– The Executive Board member leaves SAP at the end of their the shareholders of SAP SE under the German Securities
respective current contract term. Acquisition and Takeover Act;
– Their final average contractual compensation prior to their – SAP SE merges with another company and becomes the
departure equals their compensation in 2019. subsumed entity;
Actual postcontractual non-compete payments will likely differ – A control or profit transfer agreement is concluded with SAP SE
from these amounts depending on the time of departure and the as the dependent company.
compensation levels and target achievements at the time of An Executive Board member’s contract can also be terminated
departure. before full term if their appointment as an Executive Board member
of SAP SE is revoked in connection with a change of control.
Net Present Values of the Postcontractual Non-
Compete Abstention Payments Postcontractual Non-Compete Provisions
€ thousands Contract Net Present Abstention compensation for the postcontractual non-compete
Term Expires Value of period as described above is also payable on early contract
Postcontractual
Non-Compete termination.
Abstention
Payment1) Payments to Executive Board Members Resigning
Christian Klein (Co-CEO from 4/30/2025 2,607 in 2019
10/10/2019)
Robert Enslin resigned from his position as Executive Board
Jennifer Morgan (Co-CEO from 4/30/2025 2,787 member on his own accord with effect from April 5, 2019, therefore
10/10/2019) no severance payment was made. The STI 2019 and the granted
Adaire Fox-Martin 4/30/2025 2,211 rights under the LTI 2016 Plan were handled according to plan
terms. The postcontractual non-compete provision was canceled
Michael Kleinemeier 12/31/2020 2,024
without compensation.
Luka Mucic 3/31/2021 2,016 Bernd Leukert reached a mutual agreement with the Supervisory
Jürgen Müller (from 1/1/2019) 12/31/2021 1,915 Board to end his employment at SAP with immediate effect on
March 31, 2019. He received the following payments in connection
Stefan Ries 3/31/2024 1,817
with his retirement for the remainder of the term of appointment
Thomas Saueressig (from 11/1/2019) 10/31/2022 394 until March 31, 2021:
Total 15,771 – Discounted severance payment equaling the appropriately
1)
discounted target salary (base salary plus target STI) totaling
For the purpose of this calculation, the following discount rates have been
applied: Christian Klein 0.26%; Jennifer Morgan 0.26%; Adaire Fox.Martin €3,646,393.
0.26%; Michael Kleinemeier –0.13%; Luka Mucic –0.12%; Jürgen Müller – – Granted rights under the LTI 2016 Plan were handled according
0.05%; Stefan Ries 0.17%; Thomas Saueressig 0.03%. to plan terms with respect to the performance criteria and the
payout schedule.
Early End-of-Service Undertakings – As compensation for the LTI tranches 2020 and 2021 which are
Severance Payments not granted due to early termination, a one-time gross payment
of €999,412.
The standard contract for all Executive Board members provides
– For a period of 24 months, monthly abstention compensation for
that on termination before full term (for example, by the Company
the postcontractual non-compete period totaling €4,723,398.
without cause where the member’s appointment is revoked, where
– One-time payment to his retirement account in the amount of
the member becomes occupationally disabled, or in connection with
€336,720.
a change of control), SAP SE will pay to the member the outstanding
Bill McDermott resigned from his position as Executive Board
part of the compensation target for the entire remainder of the term,
member on his own accord with effect from November 15, 2019,
appropriately discounted for early payment. Starting 2018, in
therefore no severance payment was made. The STI 2019 and the
accordance with the German Corporate Governance Code (GCGC),
granted rights under the LTI 2016 Plan were handled according to
section 4.2.3, payments made to an Executive Board member due to
plan terms. Negotiations regarding abstention compensation for
early termination must not exceed twice the annual total
post-contractual non-compete obligations are still ongoing.
compensation, or 150% of the severance payment cap in case of
change of control. Members are not entitled to that severance Permanent Disability
payment if they have not served SAP as a member of the Executive In case of permanent disability, an Executive Board member’s
Board for at least one year or if they leave SAP SE for reasons for contract will end at the end of the quarter in which the permanent
83
inability to work was determined. The Executive Board member Compensation for Supervisory Board
receives, in addition to a potential disability pension under the
retirement plan described above, the monthly basic salary (fixed
Members
compensation) for a further 12 months starting from the date the
Compensation System
permanent disability is determined.
Supervisory Board members’ compensation is governed by our
Payments to Former Executive Board Members Articles of Incorporation, section 16.
Each member of the Supervisory Board receives, in addition to
In 2019, we paid pension benefits of €2,081,100 to Executive
the reimbursement of their expenses, an annual basic compensation
Board members who had retired before January 1, 2019 (2018:
of €165,000. The chairperson receives €275,000 and the deputy
€2,054,300). At the end of 2019, the DBO for former Executive
chairperson €220,000 annually. In addition, we reimburse members
Board members who had retired or left SAP before January 1, 2019
of the Supervisory Board for the value-added tax payable on their
was €44,306,334 (2018: €38,373,500). Plan assets of €31,074,600
compensation.
are available to meet these obligations (2018: €31,615,100).
For membership of the Audit Committee, Supervisory Board
Executive Board: Other Information members receive an additional fixed annual compensation of
€16,500, and for membership of any other Supervisory Board
We did not grant any compensation advance or credit to, or enter
committee €11,000, provided that the committee concerned has
into any commitment for the benefit of, any member of our
met in the year. The chairperson of the Audit Committee receives
Executive Board in 2019 or the previous year.
€27,500, and the chairpersons of the other committees receive
As far as the law permits, SAP SE and its affiliated companies in
€22,000. The fixed remuneration is payable after the end of the year.
Germany and elsewhere indemnify and hold harmless their
Any members of the Supervisory Board who have served for less
respective directors and officers against and from the claims of third
than the entire year receive one-twelfth of the annual remuneration
parties. To this end, we maintain directors’ and officers’ (D&O) group
for each month of service commenced. This also applies to the
liability insurance. The policy is annual and is renewed from year to
increased compensation of the chairperson and the deputy
year. The insurance covers the personal liability of the insured group
chairperson(s) and to the remuneration for the chairperson and the
for financial loss caused by its managerial acts and omissions. The
members of a committee.
current D&O policy includes an individual deductible for Executive
Board members of SAP SE as required by section 93 (2) of the
German Stock Corporation Act.
84
Supervisory Board Members' Compensation in 2019
€ thousands 2019 2018
Fixed Compensation Total Fixed Compensation Total

Compensation for Commit- Compensation for Commit-
tee Work tee Work
Prof. Dr. h.c. mult. Hasso Plattner (chairperson) 275.0 53.2 328.2 275.0 88.0 363.0
Margret Klein-Magar (deputy chairperson) 220.0 26.6 246.6 220.0 22.0 242.0
Pekka Ala-Pietilä 165.0 18.3 183.3 165.0 40,3 205.3
Panagiotis Bissiritsas 165.0 39.4 204.4 165.0 38.5 203.5
Martin Duffek (until 5/15/2019) 68.8 16.0 84.8 165.0 38.5 203.5
Aicha Evans 165.0 33.0 198.0 165.0 29.3 194.3
Anja Feldmann (until 12/31/2018) NA NA NA 165.0 19.3 184.3
Diane Greene (from 5/17/2018) 165.0 11.0 176.0 110.0 2.8 112.8
Prof. Dr. Wilhelm Haarmann (until 5/17/2018) NA NA NA 68.5 13.8 82.3
Andreas Hahn (until 5/15/2019) 68.8 9.2 77.9 165.0 22.0 187.0
Prof. Dr. Gesche Joost 165.0 22.0 187.0 165.0 22.0 187.0
Monika Kovacka-Dimitrova (from 5/15/2019) 110.0 14.7 124.7 NA NA NA
Lars Lamadé 165.0 22.9 187.9 165.0 22.0 187.0
Bernard Liautaud 165.0 22.0 187.0 165.0 33.0 198.0
Gerhard Oswald (from 1/1/2019) 165.0 52.3 217.3 NA NA NA
Christine Regitz 165.0 30.3 195.3 165.0 22.0 187.0
Dr. Friederike Rotsch (from 5/17/2018) 165.0 43.1 208.1 110.0 18.3 128.3
Dr. Erhard Schipporeit (until 5/15/2019) 68.8 20.6 89.4 165.0 46.8 211.8
Robert Schuschnig-Fowler (until 5/15/2019) 68.8 9.2 77.9 165.0 22.0 187.0
Dr. Sebastian Sick (until 5/15/2019) 68.8 9.2 77.9 165.0 22.0 187.0
Heike Steck (from 5/15/2019) 110.0 14.7 124.7 NA NA NA
Pierre Thiollet (until 5/15/2019) 68.8 4.6 73.3 165.0 11.0 176.0
Christa Vergien-Knopf (from 5/15/2019) 110.0 14.7 124.7 NA NA NA
Dr. Gunnar Wiedenfels (from 5/15/2019) 110.0 25.7 135.7 NA NA NA
James Wright (from 5/15/2019) 110.0 25.7 135.7 NA NA NA
Prof. Dr.-Ing. Dr.-Ing. E.h. Klaus Wucherer (until NA NA NA 68.5 6.9 75.4
5/17/2018)
Ralf Zeiger (from 5/15/2019) 110.0 14.7 124.7 NA NA NA
Total 3,217.5 552.7 3,770.2 3,162.0 540.4 3,702.4
In 2019, we received services from members of the Supervisory Hasso Plattner, the chairperson of the Supervisory Board,
Board (including services from employee representatives on the entered into a consulting contract with SAP after joining the
Supervisory Board in their capacity as employees of SAP) in the Supervisory Board in May 2003. The contract does not provide for
amount of €1,976,000 (2018: €1,206,500). any compensation. The only cost we incurred under the contract
was the reimbursement of expenses.
Long-Term Incentives for the Supervisory Board As far as the law permits, we indemnify Supervisory Board
We do not offer members of the Supervisory Board share-based members against, and hold them harmless from, claims brought by
payment for their Supervisory Board work. Any share-based third parties. To this end, we maintain directors’ and officers’ (D&O)
payment awards received by employee-elected members relate to group liability insurance. In accordance with section 3.8 of the
their position as SAP employees and not to their work on the GCGC, each member of the Supervisory Board will bear a deductible
Supervisory Board. of at least 10% of any loss. The deductible is capped at 1.5 times a
member’s fixed annual compensation.
Supervisory Board: Other Information
We did not grant any compensation advance or credit to, or enter
into any commitment for the benefit of, any member of our
Supervisory Board in 2019 or the previous year.
85
Employee As at December 31, 2019, we had 100,330 full-time equivalent (FTE)
employees worldwide (2018: 96,498). This represents an increase in
headcount of 3,832 FTEs (thereof 2,113 from acquisitions) in
comparison to 2018. The average number of employees in 2019 was
Headcount and Personnel Expense 99,157 (2018: 93,709).
SAP is constantly adapting to new market conditions and We define headcount in FTE as the number of people on
changing customer requirements. As part of this ongoing permanent employment contracts considering their staffing
transformation, we launched a company-wide restructuring program percentage. Students, individuals employed by SAP currently not
in 2019. Our aim was to further simplify our structures and working for reasons such as maternity leave, and temporary
processes and invest in key strategic growth areas. With that, we employees on limited contracts of less than six months are excluded
endeavor to ensure that our organizational setup, skillsets, and from our figures. The number of temporary employees is not
resource allocation continue to meet customer demand. For more material.
information about the numbers of employees who left SAP as part of Our average personnel expense for each employee increased to
the restructuring program and its financial impact, see the Notes to approximately €150,000 in 2019 (2018: approximately €124,000).
the Consolidated Financial Statements, Note (B.6). This increase is primarily attributable to an increase of share-based
Like similar restructuring programs in the past, this program was payment and restructuring expenses. The personnel expense for
not about reducing the size of SAP. We are growing and continuing to each employee is defined as the overall personnel expense divided
focus on delivering the intelligent enterprise. As part of the by the average number of employees.
restructuring program we offered our voluntary program in certain For more information about employee compensation and a
countries. It was built on “double voluntariness,” meaning SAP has breakdown of the components of personnel expense, see the Notes
reserved the right to reject the participation of individual employees, to the Consolidated Financial Statements, Note (B.2).
if their knowledge was considered business critical. In addition, we
were monitoring our hiring patterns through 2019 to realize the
structural effects of our restructuring efforts.
Employee Headcount by Region and Function

Full-time 12/31/2019 12/31/2018 12/31/2017
equivalents (FTEs)
EMEA Ame- APJ Total EMEA Ame- APJ Total EMEA Ame- APJ Total
ricas ricas ricas
Cloud and software 6,501 4,426 5,361 16,288 6,341 4,268 5,374 15,983 5,869 3,895 4,719 14,482
Services 8,250 6,018 5,971 20,239 8,120 5,736 5,620 19,476 7,536 4,878 4,965 17,379
Research and 12,710 5,793 9,131 27,634 12,478 5,651 8,930 27,060 11,349 5,250 8,273 24,872
development
Sales and 10,205 10,368 5,209 25,781 9,843 9,452 4,918 24,213 9,196 9,169 4,854 23,219
marketing
General and 3,161 2,123 1,246 6,530 2,906 1,970 1,147 6,024 2,676 1,781 1,047 5,504
administration
Infrastructure 2,220 984 654 3,859 2,160 951 631 3,742 1,732 855 501 3,087
SAP Group (12/31) 43,048 29,712 27,571 100,330 41,848 28,029 26,620 96,498 38,357 25,827 24,359 88,543
Thereof 338 1,638 137 2,113 657 952 434 2,043 149 133 7 289
acquisitions
SAP Group 42,697 29,368 27,092 99,157 40,496 27,454 25,759 93,709 37,512 25,459 24,029 86,999
(months' end
average)
Employee and Labor Relations representatives of severely disabled persons in all entities and on a
On a worldwide basis, we believe that our employee and labor group level (Germany) and the spokespersons committee as the
relations are excellent. representation of the executives.
On a corporate level, employees of SAP in the European Employees of each of SAP France, SAP France Holding and SAP
Economic Area are represented by the SAP SE Works Council (WoC) Labs France SAS are subject to a same collective agreement
(Europe). By law and agreement with SAP the SAP SE WoC (Europe) “SYNTEC”. In France, from December 31, 2019 the Workers Council,
is entitled to receive information on transnational matters and to the Health and Safety Committee and the employee representative
consult with the Executive Board or a representative thereof. were replaced by a single instance named “Economic and Social
On the legal entity level, the SAP SE works council (Germany) Committee”. All companies were required to organize professional
represents the employees of SAP SE. The employees of SAP elections before this date. Today, SAP Labs France SAS and Concur
Deutschland SE & Co. KG (SAP Germany) and Concur (Germany) (France) SAS are represented by an Economic and Social
GmbH are represented by a separate works council. Other employee Committee. SAP France and SAP France Holding were represented
representatives include the group works council (composed of by a works council until December 3, 2019. The represented unions
members of the works councils of SAP SE and SAP Germany), the
86
negotiate agreements with each of SAP France and SAP Labs France
SAS. ITEM 7. MAJOR
For Concur (France) SAS the agreements are negotiated with the
Economic and Social Committee.In addition, the employees of SHAREHOLDERS AND
various other SAP entities, including SAP España – Sistemas,
Aplicaciones y Productos en la Informática, S.A., SAP Belgium
RELATED-PARTY
NV/SA., SAP Israel, SAP Nederland B.V., SAP Italia Sistemi
Applicazioni Prodotti in Data Processing S.p.A., SAP China Beijing, all
TRANSACTIONS
entities in the Czech (Republic (SAP ČR, spol. s r.o., SAP Services
s.r.o., Ariba Czech s.r.o. and Concur Czech (s.r.o.)),SAP Brasil Ltda,
SAP Korea Ltd. (Korea), SAP Slovensko s.r.o. (Slovakia), SAP sistemi, Major Shareholders
aplikacije in produkti za obdelavo podatkov d.o.o.(Slovenia), SAP The share capital of SAP SE consists of ordinary shares, which
Romania SRL, SAP Argentina S.A., SAP Svenska Aktiebolag are issued only in bearer form. Accordingly, SAP SE generally cannot
(Sweden), SAP UK Ltd. and SAP Ireland Ltd. are represented by determine the identity of its shareholders or how many shares a
works councils, worker representatives, employee consultation particular shareholder owns. SAP’s ordinary shares are traded in the
forums and/or unions. In addition, some of these employees are United States by means of ADRs. Each ADR currently represents one
subject to a collective bargaining agreement. SAP SE ordinary share. On February 7, 2020, based on information
provided by the Depositary there were 60,139,010 ADRs held of
Share Ownership record by 783 registered holders. The ordinary shares underlying
such ADRs represented 4.90% of the then-outstanding ordinary
shares (including treasury stock). Because SAP’s ordinary shares
are issued in bearer form only, we are unable to determine the
Beneficial Ownership of Shares
number of ordinary shares directly held by persons with U.S.
The ordinary shares beneficially owned by the persons listed in
addresses.
“Item 6. Directors, Senior Management and Employees — The following table sets forth certain information regarding the
Compensation Report” are disclosed in “Item 7. Major Shareholders beneficial ownership of the ordinary shares to the extent known to
and Related-Party Transactions — Major Shareholders.” SAP as of February 7, 2020 of: (i) each person or group known by
SAP SE to own beneficially 5% or more of the outstanding ordinary
Share-Based Compensation shares; and (ii) the beneficial ownership of all individuals who are
currently members of the Supervisory Board and all members of the
Plans Executive Board, individually and as a group, in each case as
reported to SAP SE by such persons. There was, as far as we are able
to tell given the nature of our shares, no significant change in the
Share-Based Compensation percentage ownership held by any major shareholder during the
We maintain certain share-based compensation plans. The share- past three years. None of the major shareholders have special voting
based compensation from these plans result from cash-settled and rights.
equity-settled awards issued to employees. For more information on
our share-based compensation plans refer to “Item 6. Directors,
Senior Management and Employees — Compensation Report” and
Note (B.3) to our Consolidated Financial Statements.
Major Shareholders Ordinary Shares

Beneficially Owned
Number % of Outstanding
Dietmar Hopp, collectively(1) 61,864,345 5.04

(2)
Hasso Plattner, Chairperson Supervisory Board, collectively 72,369,813 5.891
Executive Board Members as a group (8 persons) 26,998 0.002
Supervisory Board Members as a group (18 persons) 72,388,510 5.892
Executive Board Members and Supervisory Board Members as a group (26 persons)(3) 72,415,508 5.894
(4 )
BlackRock, Inc. 69,306,896 5.6
(1)
The foregoing information is based on a Schedule 13G filed by Dietmar Hopp and other affiliated persons and companies on February 20, 2020.
(2)
Includes HP Endowment GmbH & Co. KG and Hasso Plattner Single Asset KG in which Hasso Plattner exercises sole voting and dispositive power.
(3)
We believe that, other than Hasso Plattner, each of the members of the Supervisory Board and the Executive Board beneficially owns less than 1% of SAP SE’s ordinary s hares as of
February 7, 2020.
(4)
As required under German law, BlackRock, Inc. informed SAP that they own more than 5% of SAP's outstanding ordinary shares. BlackRock, Inc. is not required to provide SAP with the
number of shares owned as of February 7, 2020, and has not provided such information. The foregoing information is based on a Schedule 13G filed by BlackRock, Inc. on Febru ary 6, 2020.
87
Currently we are not aware of any arrangements, the operation of ADRs representing SAP SE ordinary shares are listed on the New
which may, at a subsequent date, result in a change in control of the York Stock Exchange (NYSE) under the symbol “SAP,” and currently
company. each ADR represents one ordinary share.
Related-Party Transactions ITEM 10. ADDITIONAL

For information on related-party transactions see Note (G.6) to
our Consolidated Financial Statements. INFORMATION
ITEM 8. FINANCIAL Articles of Incorporation
INFORMATION Organization and Register
SAP SE is a European Company (Societas Europaea, or “SE”)
organized in the Federal Republic of Germany under German and
Consolidated Financial Statements and European law, including Council Regulation (EC) No. 2157/2001 on
Financial Statement Schedule the Statute for a European Company (the “SE Regulation”), the
See “Item 18. Financial Statements” and pages F-1 through F-81. German Act on the Implementation of Council Regulation No.
2157/2001 of October 8, 2001 on the Statute for a European
Other Financial Information Company (Gesetz zur Ausführung der Verordnung (EG) Nr.
2157/2001 des Rates vom 8. Oktober 2001 über das Statut der
Legal Proceedings Europäischen Gesellschaft (SE) – SE-Ausführungsgesetz; “SE-AG”)
We are subject to a variety of legal proceedings and claims, either of December 22, 2004, and the German Stock Corporation Act
asserted and unasserted, which arise in the ordinary course of (Aktiengesetz). SAP SE is registered in the Commercial Register
business, including claims and lawsuits involving businesses we have (Handelsregister) at the Lower Court of Mannheim, Germany, under
acquired. the entry number “HRB 719915.” SAP SE publishes its official notices
Refer to Note (G.3) to our Consolidated Financial Statements for in the Federal Gazette (www.bundesanzeiger.de).
a detailed discussion of our material legal proceedings.
Objects and Purposes
Dividend Policy SAP’s Articles of Incorporation state that our objects involve,
For more information on dividend policy see the disclosure in directly or indirectly, the development, production and marketing of
“Item 3. Key Information — Dividends”. products and the provision of services in the field of information
technology, including:
Significant Changes – developing and marketing integrated product and service
solutions for e-commerce;
At the beginning of 2020, SAP modified its organizational
– developing software for information technology and the licensing
structure to strengthen the focus on customer success and
of its use to others;
employee engagement while driving innovation and simplicity. The
– organization and deployment consulting, as well as user training,
set-up moving forward aims at raising synergies, reducing
for e-commerce and other software solutions;
complexity while initiating key steps towards further integration. The
– selling, leasing, renting and arranging the procurement and
organizational changes will also affect SAP’s segment reporting. SAP
provision of all other forms of use of information technology
has already started the process of redefining its management
systems and related equipment; and
reporting under the new organizational structure, which the segment
– making capital investments in enterprises active in the field of
reporting will follow. See Note (G.8) to our Consolidated Financial
information technology to promote the opening and
Statements for further information.
advancement of international markets in the field of information
On February 19, 2020, Michael Kleinemeier and the Supervisory technology.
Board mutually agreed that he will depart SAP as of April 30, 2020 SAP is authorized to act in all the business areas listed above and
and that his membership on the Executive Board will end effective as to delegate such activities to affiliated entities within the meaning of
of that day. Further, Stefan Ries and the Supervisory Board mutually the German Stock Corporation Act; in particular SAP is authorized to
agreed that Stefan will depart SAP as of May 31, 2020 and that his delegate its business in whole or in part to such entities. SAP SE is
memberhip on the Executive Board will end effective as of that day. authorized to establish branch offices in Germany and other
countries, as well as to form, acquire or invest in other companies of
the same or related kind and to enter into collaboration and joint
ITEM 9. THE OFFER AND venture agreements. SAP is further authorized to invest in
enterprises of all kinds principally for investment purposes. SAP is
LISTING authorized to dispose of investments, to consolidate the
management of enterprises in which it participates, to enter into
affiliation agreements with such entities, or to limit its activities to
Our ordinary shares are officially listed on the Frankfurt Stock manage its shareholdings.
Exchange, the Berlin Stock Exchange and the Stuttgart Stock
Exchange. The principal trading market for the ordinary shares is
Xetra, the electronic dealing platform of Deutsche Boerse AG.
88
Corporate Governance Board and two women on the employee representatives’ side from
the beginning of 2019 until May 15, 2019, and four women on the
Introduction shareholder representatives’ side and five women on the employee
SAP SE, as a European Company with a two-tier board system, is representatives’ side from May 15, 2019, until December 31, 2019.
governed by three separate bodies: the Supervisory Board, the Thus the percentage of women on the Supervisory Board reached,
Executive Board and the Annual General Meeting of Shareholders. and even exceeded, the minimum quota of 30% throughout 2019.
Their rules are defined by European and German law, by the The procedure for the appointment of the employee
Agreement on the Involvement of Employees in SAP SE (“Employee representatives on the Supervisory Board of SAP SE is governed by
Involvement Agreement”), by the German Corporate Governance the EIA. In accordance with the EIA, the nine seats on the first
Code and by SAP’s Articles of Incorporation (Satzung) and are Supervisory Board reserved for employees’ representatives were
summarized below. See “Item 16G. Differences in Corporate allocated as follows: the first six seats were allocated to Germany,
Governance Practices” for additional information on our corporate the seventh seat was allocated to France, the eighth seat was also
governance practices. allocated to Germany, and the ninth seat was allocated to a
European country not represented by the first eight seats, as
The Supervisory Board determined by the SAP SE Works Council Europe. The employees’
The Supervisory Board appoints and removes the members of representatives for the first six seats allocated to Germany were
the Executive Board and oversees and advises the management of determined by direct vote by all SAP employees with their principal
the corporation. At regular intervals it meets to discuss current place of employment in Germany. According to the EIA, the
business as well as business development and planning. The SAP employees’ representative for the seventh seat allocated to France is
Executive Board must consult with the Supervisory Board generally determined according to the applicable provisions of
concerning the corporate strategy, which is developed by the French law on the election or appointment of employees’
Executive Board. Types of transactions for which the Executive representatives on a supervisory board. With regard to the eighth
Board requires the Supervisory Board’s consent are listed in the and ninth seat, members of the SAP SE Works Council Europe from
Articles of Incorporation; in addition, the Supervisory Board has Germany and Slovakia were appointed by the SE Works Council as
specified further types of transactions that require its consent. employees’ representatives.
Accordingly, the Supervisory Board must also approve the annual Any Supervisory Board member elected by the shareholders at
budget of SAP upon submission by the Executive Board and certain the Annual General Meeting of Shareholders may be removed by
subsequent deviations from the approved budget. The Supervisory three-quarters of the votes cast at the Annual General Meeting of
Board is also responsible for representing SAP SE in transactions Shareholders. Any Supervisory Board member appointed in
between SAP SE and Executive Board members. accordance with the EIA may be removed by the SAP SE Works
The Supervisory Board, based on a recommendation by its Audit Council Europe upon application by the body that nominated the
Committee, provides its proposal for the election of the external respective employees’ representative for appointment by the SE
independent auditor to the Annual General Meeting of Shareholders. Works Council or, in case the employees’ representative was directly
The Supervisory Board is responsible for auditing the SAP SE elected, the majority of the employees entitled to vote.
financial statements, the consolidated financial statements, the The Supervisory Board elects a chairperson and one or two
combined management report, as well as the combined non-
deputy chairperson(s) among its members by a majority of the votes
financial report. The Supervisory Board is also responsible for
monitoring the auditor’s independence and the audit quality, a task cast. Only a shareholders’ representative may be elected as
it has delegated to its audit committee. chairperson of the Supervisory Board. When electing the
Pursuant to Article 40 (3) sentence 1 of the SE Regulation, the chairperson of the Supervisory Board, the oldest member in terms
number of members of the supervisory board and the rules for of age of the shareholders’ representatives on the Supervisory Board
determining this number are to be laid down in the articles of will chair the meeting and, in the event of a tied vote, will have the
incorporation. Furthermore, pursuant to Section 17 (1) SE-AG, the casting vote.
size of supervisory boards of companies which, like SAP SE, have a Unless otherwise mandatorily prescribed by law or the Articles of
capital stock exceeding € 10,000,000, is limited to 21 members. In Incorporation, resolutions of the Supervisory Board are adopted by
line with these provisions as well as the EIA, the Articles of simple majority of the votes cast. In the event of a tie, the vote of the
Incorporation of SAP SE provide that the Supervisory Board shall be chairperson and, in the event that the chairperson does not
composed of 18 members. Furthermore, it is provided in the EIA that participate in passing the resolution, the vote of the deputy
the shareholders of SAP SE have the possibility to reduce the size of chairperson, provided that he or she is a shareholders’
the Supervisory Board in the future (i.e. at the earliest in the Annual representative, will be decisive (casting vote).
General Meeting of Shareholders in 2019, with effect from the The members of the Supervisory Board cannot be elected or
Annual General Meeting of Shareholders in 2020) to 12 members. appointed, as the case may be, for a term longer than six years.
The current Supervisory Board of SAP SE consists of eighteen Other than for the employees’ representatives on the first
members, nine of whom are elected by the Annual General Meeting Supervisory Board of SAP SE, the term expires at the close of the
of Shareholders as shareholders’ representatives and the remaining Annual General Meeting of Shareholders giving its formal approval of
nine are appointed as employees’ representatives by the SAP SE the acts of the Supervisory Board for the fourth fiscal year following
Works Council Europe in accordance with the EIA (see below for the year in which the term of office of the Supervisory Board
details). Pursuant to Section 17(2) SE-AG, the Supervisory Board of members commenced. Re-election is possible. Our Supervisory
SAP SE must have a minimum of 30% men and 30% women. This Board normally meets four times a year. The compensation of the
quota for the Supervisory Board must be observed for any new members of the Supervisory Board is set in the Articles of
appointment to the Supervisory Board. In 2019, there were four Incorporation.
women on the shareholder representatives’ side of the Supervisory
89
As stipulated in the German Corporate Governance Code dividend proposal. Furthermore, the Audit Committee and the
(GCGC), an adequate number of our Supervisory Board members Finance and Investment Committee jointly prepare the full
are independent. To be considered for appointment to the Supervisory Board’s resolution to approve the group annual plan.
Supervisory Board and for as long as they serve, members must The Supervisory Board has determined Dr. Gunnar Wiedenfels,
comply with certain criteria concerning independence, conflicts of the Audit Committee’s chairperson, to be an audit committee
interest and multiple memberships of management, supervisory and financial expert as defined by the regulations of the SEC issued
other governing bodies. They must be loyal to SAP in their conduct under Section 407 of the Sarbanes-Oxley Act as well as an
and must not accept any position in companies that are in independent financial expert as defined by the German Stock
competition with SAP. Members are subject to insider trading Corporation Act. See “Item 16A. Audit Committee Financial Expert”
prohibitions and the respective directors’ dealing rules of the for details.
European Regulation (EU) No 596/2014 of the European Parliament
and the Council of 16 April 2014 on market abuse and the German The General and Compensation Committee
Securities Trading Act. A member of the Supervisory Board may not The General and Compensation Committee (Präsidial- und
vote on matters relating to certain contractual agreements between Personalausschuss) coordinates the work of the Supervisory Board,
such member and SAP SE. Further, as the compensation of the prepares its meetings and deals with corporate governance issues.
Supervisory Board members is set in the Articles of Incorporation, In addition, it carries out the preparatory work necessary for the
Supervisory Board members are unable to vote on their own personnel decisions made by the Supervisory Board, notably those
compensation, with the exception that they are able to exercise concerning compensation for the Executive Board members and the
voting rights in a General Meeting of Shareholders in connection conclusion, amendment and termination of the Executive Board
with a resolution amending the Articles of Incorporation. members’ contracts of appointment.
The Supervisory Board may appoint committees from among its The German Stock Corporation Act prohibits the Compensation
members and may, to the extent permitted by law, entrust such Committee from deciding on the compensation of the Executive
committees with the authority to make decisions on behalf of the Board members on behalf of the Supervisory Board and requires
Supervisory Board. Currently the Supervisory Board maintains the that such decision is made by the entire Supervisory Board. This Act
following committees: also provides the General Meeting of Shareholders with the right to
vote on the system for the compensation of Executive Board
The Audit Committee members, such vote, however, not being legally binding for the
The focus of the Audit Committee (Prüfungsausschuss) is the Supervisory Board.
oversight of SAP’s external financial reporting as well as SAP’s risk
management, internal controls (including internal controls over the The Finance and Investment Committee
effectiveness of the financial reporting process), corporate audit, The Finance and Investment Committee (Finanz- und
cybersecurity matters and compliance matters. According to Investitionsausschuss) addresses general financing issues.
German Law SAP’s Audit Committee includes at least one Furthermore, it regularly discusses acquisitions of intellectual
independent member with expertise in the fields of financial property and companies, venture capital investments and other
reporting or auditing. Among the tasks of the Audit Committee are investments with the Executive Board and reports to the Supervisory
the discussion of SAP’s quarterly and year-end financial reporting Board on such investments. It is also responsible for the approval of
prepared under German and U.S. regulations, including this report. such investments if the individual investment amount exceeds
The Audit Committee recommends to the Supervisory Board the certain specified limits, as well as – together with the Audit
appointment of the external independent auditor, determines focus Committee – for the preparation of the full Supervisory Board’s
audit areas, discusses critical accounting policies and estimates with resolution to approve the group annual plan.
and reviews the audit reports issued and audit issues identified by
the auditor. The audit committee also negotiates the audit fees with The Technology and Strategy Committee
the auditor and monitors the auditor’s independence and quality. The Technology and Strategy Committee (Technologie-und
SAP’s Corporate Audit Office, SAP’s Office of Ethics and Compliance Strategieausschuss) monitors technology transactions and provides
(formerly the Legal Compliance and Integrity Office), SAP’s Global the Supervisory Board with in-depth technical advice.
Security Office and SAP’s Risk Management Office report regularly
to the Audit Committee, as well as upon request or the occurrence of The Nomination Committee
certain findings, but in any case at least (i) quarterly (the Office of The Nomination Committee (Nominierungsausschuss) is
Ethics and Compliance and the Risk Management Office), (ii) twice a exclusively composed of shareholder representatives and is
year (Corporate Audit), and (iii) once a year (the Global Security responsible for identifying suitable candidates for membership of
Office). In addition to making regular reports to the CFO and the the Supervisory Board for recommendation to the Annual General
Audit Committee, the Office of Ethics and Compliance reports to the Meeting of Shareholders.
Executive Board annually.
The Audit Committee has established procedures regarding the The Special Committee
prior approval of all audit and non-audit services provided by our The Special Committee (Sonderausschuss) deliberates on
external independent auditor. See “Item 16C. Principal Accountant matters arising out of substantial exceptional risks, such as major
Fees and Services” for details. litigations. The Special Committee was in place until May 15, 2019
The Audit Committee also does preparatory work for the full and will no longer be continued.
Supervisory Board’s deliberations and resolutions on the adoption of
the annual financial statements, the approval of the consolidated
annual financial statements and the Integrated Report, and on the
90
The People and Organization Committee their actions are contested. Both bodies must consider the interest
The People and Organization Committee (Ausschuss für of SAP SE shareholders and our employees and, to some extent, the
Mitarbeiter- und Organisationsangelegenheiten) deliberates and common good. Those who violate their duties may be held jointly
advises the Executive and Supervisory Board on key personnel and severally liable for any resulting damages, unless they acted
matters and major organizational changes at the management level pursuant to a lawful resolution of the Annual General Meeting of
below the Executive Board. It also advises on equal opportunities for Shareholders.
women at SAP. SAP has implemented a Code of Business Conduct for
The duties and procedures of the Supervisory Board and its employees (see “Item 16B. Code of Ethics” for details). The employee
committees are specified in their respective rules of procedure, if code is equally applicable to managers and members of the
any, which reflect the requirements of European and German law, Executive Board. Its rules are observed as well by members of the
including the SE Regulation and the German Stock Corporation Act, Supervisory board as applicable.
the Articles of Incorporation and the recommendations of the GCGC. Under German law the Executive Board of SAP SE has to assess
According to the provisions of the Sarbanes-Oxley Act, SAP does all major risks for the SAP Group. In addition, all measures taken by
not grant loans to the members of the Executive Board or the management to reduce and handle the risks have to be
Supervisory Board. documented. Therefore, SAP’s management has adopted suitable
measures such as implementing an enterprise-wide risk monitoring
The Executive Board system to ensure that adverse developments endangering the
The Executive Board manages the Company’s business, is corporate standing are recognized at a reasonably early point in
responsible for preparing its strategy and represents it in dealings time.
with third parties. The Executive Board reports regularly to the The Office of Ethics and Compliance (formerly the Office of Legal
Supervisory Board about SAP operations and business strategies Compliance and Integrity) was created by the SAP Executive Board
and prepares special reports upon request. A person may not serve in 2006 to oversee and coordinate legal and regulatory policy
on the Executive Board and on the Supervisory Board at the same compliance at SAP. The Chief Global Compliance Officer heading the
time. Office of Ethics and Compliance directly reports to co-CEO Jennifer
The Executive Board and the Supervisory Board cooperate Morgan and also has direct communication channels and reporting
closely for the benefit of the Company. The Executive Board is obligations to the Audit Committee of the Supervisory Board. The
required to provide the Supervisory Board regular, prompt and Office of Office of Ethics and Compliance manages a network of
comprehensive information about all of the essential issues affecting more than 100 local subsidiary Compliance Officers who act as the
the SAP Group’s business progress and its potential business risks. point of contact for local questions or issues under the SAP Code of
Furthermore, the Executive Board must maintain regular contact Business Conduct for employees. The Office of Ethics and
with the chairperson of the Supervisory Board and vice versa. The Compliance provides training and communication to SAP employees
Executive Board must inform the chairperson of the Supervisory to raise awareness and understanding of legal and regulatory
Board promptly about exceptional events that are of significance to compliance policies. Employee help lines are also supported in each
SAP’s business. The Supervisory Board chairperson must inform the region where questions can be raised or questionable conduct can
Supervisory Board accordingly and shall, if required, convene an be reported without fear of retaliation.
extraordinary meeting of the Supervisory Board.
Pursuant to the Articles of Incorporation, the Executive Board
The Annual General Meeting of Shareholders
must consist of at least two members. SAP SE’s Executive Board is Shareholders of the Company exercise their voting rights at
currently comprised of eight members. Any two members of the shareholders’ meetings. The Executive Board calls the Annual
Executive Board jointly or one member of the Executive Board and General Meeting of Shareholders, which must take place within the
the holder of a special power of attorney (Prokurist) jointly may first six months of each fiscal year. The Supervisory Board or the
legally represent SAP SE. The Supervisory Board appoints each Executive Board may call an extraordinary meeting of the
member of the Executive Board for a maximum term of five years, shareholders if the interests of the stock corporation so require.
with the possibility of re-appointment. Under certain circumstances, Additionally, shareholders of SAP SE holding in the aggregate a
a member of the Executive Board may be removed by the minimum of 5% of SAP SE’s issued share capital may call an
Supervisory Board prior to the expiration of that member’s term. A extraordinary meeting of the shareholders. Shareholders as of the
member of the Executive Board may not vote on matters relating to record date are entitled to attend and participate in shareholders’
certain contractual agreements between such member and SAP SE, meetings if they have provided timely notice of their intention to
and may be liable to SAP SE if such member has a material interest attend the meeting.
in any contractual agreement between SAP and a third party which At the Annual General Meeting of Shareholders, the shareholders
was not previously disclosed to and approved by the Supervisory are asked, among other things, to formally approve the actions taken
Board. Further, as the compensation of the Executive Board by the Executive Board and the Supervisory Board in the preceding
members is set by the Supervisory Board, Executive Board fiscal year, to approve the appropriation of the corporation’s
members are unable to vote on their own compensation, with the distributable profits and to appoint an external independent auditor.
exception that they are able to exercise voting rights in a General Shareholder representatives of the Supervisory Board are generally
Meeting of Shareholders resolving a non-binding vote on the system elected at the Annual General Meeting of Shareholders for a term of
for the compensation of Executive Board members. approximately five years. Shareholders may also be asked to grant
Under German law SAP SE’s Supervisory Board members and authorization to repurchase treasury shares, to resolve on measures
Executive Board members have a duty of loyalty and care towards to raise or reduce the capital of the Company or to ratify
SAP SE. They must exercise the standard of care of a prudent and amendments of our Articles of Incorporation. The Annual General
diligent businessman and bear the burden of proving they did so if
91
Meeting of Shareholders can make management decisions only if upon conversion of convertible bonds and exercise of stock options.
requested to do so by the Executive Board. By law, the Executive Board may only issue new shares with regard
to the contingent capital for the specified purposes. Capital
Change in Control increases require an approval by at least 75% of the valid votes cast
There are no provisions in the Articles of Incorporation of SAP SE at the General Meeting of Shareholders in which the increase is
that would have the effect of delaying, deferring or preventing a proposed, and requires an amendment to the Articles of
change in control of SAP SE and that would only operate with Incorporation.
respect to a merger, acquisition or corporate restructuring involving The share capital may be reduced by an amendment to the
it or any of its subsidiaries. Articles of Incorporation approved by at least 75% of the valid votes
According to the German Securities Acquisition and Takeover Act cast at the General Meeting of Shareholders. In addition, the
(Wertpapiererwerbs- und Übernahmegesetz) a bidder seeking Executive Board of SAP SE is allowed to authorize a reduction of the
control of a company with its corporate seat in Germany or another company’s capital stock by canceling a defined number of
state of the European Economic Area (EEA) and its shares being repurchased treasury shares if this repurchasing and the
traded on an EEA stock exchange must publish an advance notice of subsequent reduction have already been approved by the General
its decision to make a tender offer, submit an offer statement to the Meeting of Shareholders.
Federal Financial Supervisory Authority (Bundesanstalt für The Articles of Incorporation do not contain conditions regarding
Finanzdienstleistungsaufsicht) for review, and obtain certification changes in the share capital that are more stringent than those
from a qualified financial institution that adequate financing is in provided by applicable European and German law.
place to complete the offer. The offer statement must be published
upon approval by the Federal Financial Supervisory Authority or Rights Accompanying our Shares
expiry of a certain time period without such publication being There are no limitations imposed by German law or the Articles of
prohibited by the Federal Financial Supervisory Authority. Once a Incorporation of SAP SE on the rights to own securities, including
shareholder has acquired shares representing at least 30% of the the rights of non-residents or foreign holders to hold the ADRs or
voting rights in an EEA-listed company, it must make an offer for all ordinary shares, to exercise voting rights or to receive dividends or
remaining shares. The Securities Acquisition and Takeover Act other payments on such shares.
requires the executive board of the target company to refrain from According to the German stock corporation law, the rights of
taking any measures that may frustrate the success of the takeover shareholders cannot be amended without shareholders’ consent.
offer. However, the target executive board is permitted to take any The Articles of Incorporation do not provide more stringent
action that a prudent and diligent management of a company that is conditions regarding changes of the rights of shareholders than
not the target of a takeover bid would also take. Moreover, the target those provided by applicable European and German law.
executive board may search for other bidders and, with the prior
approval of the supervisory board, may take other defensive Voting Rights
measures, provided that both boards act within the parameters of Each ordinary SAP SE share represents one vote. Cumulative
their general authority under the German Stock Corporation Act. An voting is not permitted under applicable European and German law.
executive board may also adopt specific defensive measures if such A corporation’s articles of incorporation may stipulate a majority
measures have been approved by the supervisory board and were necessary to pass a shareholders’ resolution differing from the
specifically authorized by the general shareholders’ meeting no majority provided by law, unless the law mandatorily requires a
earlier than 18 months in advance of such measures by a resolution certain majority. Section 21 (1) of SAP SE’s Articles of Incorporation
of at least 75% of the shares represented. provides that resolutions may be passed at the General Meeting of
Under the European Takeover Directive of 2004 member states Shareholders with a majority of valid votes cast, unless a larger
had to choose whether EU restrictions on defensive measures apply majority is prescribed by law or the Articles of Incorporation. SAP
to companies that are registered in their territory. Germany decided SE’s Articles of Incorporation as well as applicable European and
to opt out and to retain its current restrictions on a board German law require that the following matters, among others, be
implementing defensive measures (as described above). As required approved by at least 75% of the valid votes cast at the General
by the Directive if a country decides to opt out the German Meeting of Shareholders in which the matter is proposed:
Securities Acquisition and Takeover Act grants companies the option – changing the corporate purpose of the company set out in the
of voluntarily applying the European standard by a change of the Articles of Incorporation;
Articles of Incorporation (opt-in). SAP SE has not made use of this – capital increases and capital decreases;
option. – excluding preemptive rights of shareholders to subscribe for new
shares or for treasury shares;
Change in Share Capital – dissolution;
Under German law, the capital stock may be increased in – a merger into, or a consolidation with, another company;
consideration of contributions in cash or in kind, or by establishing – a transfer of all or virtually all of the assets;
authorized capital or contingent capital or by an increase of the – a change of corporate form, including re-conversion into a
company’s capital reserves. Authorized capital provides the German stock corporation;
Executive Board with the flexibility to issue new shares for a period of – a transfer of the registered seat to another EU member state; and
up to five years. The Executive Board must obtain the approval of the – any other amendment to the Articles of Incorporation (pursuant
Supervisory Board before issuing new shares with regard to the to section 21 (2) sentence 1 of the Articles of Incorporation). For
authorized capital. Contingent capital allows the issuance of new any amendments of the Articles of Incorporation which require a
shares for specified purposes, including stock option plans for simple majority for stock corporations established under German
Executive Board members or employees and the issuance of shares law, however, section 21 (2) sentence 2 of SAP SE’s Articles of
92
Incorporation provides that the simple majority of the valid votes individuals and certain financial institutions) must report any
cast is sufficient if at least half of the subscribed capital is accounts payable to or receivable from Non-Residents if such
represented or, in the absence of such quorum, the majority payables or receivables, in the aggregate, exceed €5 million (or the
prescribed by law (i.e. two thirds of the votes cast, pursuant to equivalent in a foreign currency) at the end of any calendar month.
sec. 59 of the SE Regulation) is sufficient. Furthermore, companies resident in Germany with accounts payable
to or receivable from Non-Residents in excess of €500 million have
Dividend Rights to report any payables or receivables to/from Non-Residents arising
See “Item 3. Key Information — Dividends.” from derivative instruments at the end of each calendar quarter.
Residents are also required to report annually to the German Central
Preemptive Rights Bank any shares or voting rights of 10% or more which they hold
Shareholders have preemptive rights to subscribe (Bezugsrecht) directly or indirectly in non-resident corporations with total assets of
for any issue of additional shares in proportion to their more than €3 million. Corporations residing in Germany with assets
shareholdings in the issued capital. The preemptive rights may be in excess of €3 million must report annually to the German Central
excluded under certain circumstances by a shareholders’ resolution Bank any shares or voting rights of 10% or more held directly or
(approved by at least 75% of the valid votes cast at the General indirectly by a Non-Resident.
Meeting of Shareholders) or by the Executive Board authorized by
such shareholders’ resolutions and subject to the consent of the Taxation
Supervisory Board.
General
Liquidation The following discussion is a summary of certain material
If SAP SE were to be liquidated, any liquidation proceeds German tax and U.S. federal income tax consequences of the
remaining after all of our liabilities were paid would be distributed to acquisition, ownership and disposition of our ADRs or ordinary
our shareholders in proportion to their shareholdings. shares to a U.S. Holder. In general, a U.S. Holder (as hereinafter
defined) is any beneficial owner of our ADRs or ordinary shares that
Disclosure of Shareholdings (i) is a citizen or resident of the U.S. or a corporation organized under
SAP SE’s Articles of Incorporation do not require shareholders to the laws of the U.S. or any political subdivision thereof, an estate
disclose their shareholdings. The German Securities Trading Act whose income is subject to U.S. federal income tax regardless of its
(Wertpapierhandelsgesetz), however, requires holders of voting source or a trust, if a U.S. court can exercise primary supervision
securities of SAP SE to notify SAP SE and the Federal Financial over its administration and one or more U.S. persons are authorized
Supervisory Authority of the number of shares they hold if that to control all substantial decisions of the trust; (ii) is not a resident of
number reaches, exceeds or falls below specified thresholds. These Germany for purposes of the income tax treaty between the U.S. and
thresholds are 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75% Germany (Convention between the Federal Republic of Germany and
of the corporation’s outstanding voting rights. In respect of the United States of America for the Avoidance of Double Taxation
certificates representing shares, the notification requirement shall and the Prevention of Fiscal Evasion with respect to Taxes on Income
apply exclusively to the holder of the certificates. In addition, the and Capital and to certain other Taxes, as amended by the Protocol
German Securities Trading Act also obliges anyone who holds, of June 1, 2006 and as published in the German Federal Law Gazette
directly or indirectly, financial instruments that convey an 2008 vol. II pp. 611/851; the “Treaty”); (iii) owns the ADRs or ordinary
unconditional entitlement to acquire under a legally binding shares as capital assets; (iv) does not hold the ADRs or ordinary
agreement, shares in SAP SE, to notify SAP SE and the Federal shares as part of the business property of a permanent
Financial Supervisory Authority if the thresholds mentioned above establishment or a fixed base in Germany; and (v) is fully entitled to
have been reached, exceeded or fallen below, with the exception of the benefits under the Treaty with respect to income and gain
the 3% threshold. This notification obligation also exists for the derived in connection with the ADRs or ordinary shares. Special
holder of a financial instrument which merely de facto enables its rules which are not discussed in the following summary apply to
holder or a third party to acquire shares in SAP SE, subject to the pension funds and certain other tax‑exempt investors.
thresholds mentioned in the preceding sentence. In connection with THE FOLLOWING IS NOT A COMPREHENSIVE DISCUSSION OF
this notification, obligation positions in voting rights and other ALL GERMAN TAX AND U.S. FEDERAL INCOME TAX
financial instruments have to be aggregated. CONSEQUENCES THAT MAY BE RELEVANT FOR U.S. HOLDERS OF
OUR ADRs OR ORDINARY SHARES. THEREFORE, U.S. HOLDERS
Exchange Controls and Other Limitations ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS
Affecting Security Holders REGARDING THE OVERALL GERMAN TAX AND U.S. FEDERAL
The euro is a fully convertible currency. At the present time, INCOME TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP
Germany does not restrict the export or import of capital, except for AND DISPOSITION OF OUR ADRs OR ORDINARY SHARES IN LIGHT
investments in certain areas in accordance with applicable OF THEIR PARTICULAR CIRCUMSTANCES, INCLUDING THE EFFECT
resolutions adopted by the United Nations and the European Union. OF ANY STATE, LOCAL OR OTHER FOREIGN OR DOMESTIC LAWS.
However, for statistical purposes only, every individual or
corporation residing in Germany (“Resident”) must report to the German Taxation
German Central Bank (Deutsche Bundesbank), subject only to The summary set out below is based on German tax laws,
certain immaterial exceptions, any payment received from or made interpretations thereof and applicable tax treaties to which Germany
to an individual or a corporation residing outside of Germany (“Non- is a party and that are in force at the date of this report; it is subject
Resident”) if such payment exceeds €12,500 (or the equivalent in a to any changes in such authority occurring after that date,
foreign currency). In addition, German Residents (except for potentially with retroactive effect, that could result in German tax
93
consequences different from those discussed below. This discussion the paying entity documenting the tax withheld, within four years
is also based, in part, on representations of the Depositary and from the end of the calendar year in which the dividend is received.
assumes that each obligation of the Deposit Agreement and any Claims for refund are made on a special German claim for refund
related agreements will be performed in accordance with its terms. form (Form E-USA), which must be filed with the German Federal Tax
For additional information on the Depository and the fees associated Office (Bundeszentralamt für Steuern, D-53221 Bonn, Germany).
with SAP’s ADR program see “Item 12. Description of Securities The German claim for refund form may be obtained from the
Other Than Equity Securities — American Depository Shares.” German tax authorities at the same address where applications are
For purposes of applying German tax law and the applicable tax filed or can be downloaded from the homepage of the German
treaties to which Germany is a party, a holder of ADRs will generally Federal Tax Office (http://www.bzst.de).
be treated as owning the ordinary shares represented thereby. U.S. Holders must also submit to the German tax authorities a
certification of their U.S. residency status (IRS Form 6166). This
German Taxation of Dividends certification can be obtained from the Internal Revenue Service by
Under German income tax law, the full amount of dividends filing a request for certification (generally on an IRS Form 8802,
distributed by an incorporated company is generally subject to which will not be processed unless a user fee is paid) with the
German withholding tax at a domestic rate of 25% plus a solidarity Internal Revenue Service, P.O. Box 71052, Philadelphia, PA 19176-
surtax of 5.5% thereon (effectively 1.375% of dividends before 6052. U.S. Holders should consult their own tax advisors regarding
withholding tax), resulting in an aggregate withholding tax rate from how to obtain an IRS Form 6166.
dividends of 26.375%. From January 1, 2017 onwards, taxes are An IT-supported quick-refund procedure is available for dividends
incurred on the third bank working day after the annual general received (the “Data Medium Procedure — DMP”). If the U.S. Holder’s
meeting, or at a later date as may be stipulated by SAP’s articles of bank or broker elects to participate in the DMP, it will perform
incorporation or by the annual general meeting’s decision on administrative functions necessary to claim the Treaty refund for the
dividends. Non-resident corporate shareholders will generally be beneficiaries. The refund beneficiaries must confirm to the DMP
entitled to a refund in the amount of two-fifths of the withholding tax participant that they meet the conditions of the Treaty provisions
(including solidarity surtax thereon). This does not preclude a and that they authorize the DMP participant to file applications and
further reduction or refund of withholding tax, if any, available under receive notices and payments on their behalf. Further each refund
a relevant tax treaty. beneficiary must confirm that (i) it is the beneficial owner of the
Generally, for many non-resident shareholders the withholding dividends received; (ii) it is resident in the U.S. in the meaning of the
tax rate is currently reduced under applicable income tax treaties. Treaty; (iii) it does not have its domicile, residence or place of
Rates and refund procedures may vary according to the applicable management in Germany; (iv) the dividends received do not form
treaty. To reduce the withholding tax to the applicable treaty tax rate part of a permanent establishment or fixed base in Germany; and (v)
a non-resident shareholder must apply for a refund of withholding it commits, due to its participation in the DMP, not to claim
taxes paid. Claims for refund, if any, are made on a special German separately for refund.
claim for refund form, which must be filed with the German Federal The beneficiaries also must provide an IRS Form 6166
Tax Office (Bundeszentralamt für Steuern, D-53221 Bonn, Germany; certification with the DMP participant. The DMP participant is
http://www.bzst.de). The relevant forms can be obtained from the required to keep these documents in its files and prepare and file a
German Federal Tax Office. For details, such non-resident combined claim for refund with the German tax authorities by
shareholders are urged to consult their own tax advisors. Special electronic media. The combined claim provides evidence of a U.S.
rules apply for the refund to U.S. Holders (we refer to the below Holder’s personal data including its U.S. Tax Identification Number.
section “Refund Procedures for U.S. Holders”). The German tax authorities reserve the right to audit the
Refund Procedures for U.S. Holders entitlement to tax refunds for several years following their payment
pursuant to the Treaty in individual cases. The DMP participant must
Under the Treaty, a partial refund of the 25% withholding tax
assist with the audit by providing the necessary details or by
equal to 10% of the gross amount of the dividend and a full refund of
forwarding the queries to the respective refund beneficiaries.
the solidarity surtax can be obtained by a U.S. Holder. Thus, for each
The German tax authorities will issue refunds denominated in
US$100 of gross dividends paid by SAP SE to a U.S. Holder, the
euros. In the case of shares held through banks or brokers
dividends (which are dependent on the euro/U.S. dollar exchange
participating in the Depository, the refunds will be issued to the
rate at the time of payment) will be initially subject to a German
Depository, which will convert the refunds to U.S. dollar. The
withholding tax of US$26.375, of which US$11.375 may be refunded
resulting amounts will be paid to banks or brokers for the account of
under the Treaty. As a result, a U.S. Holder effectively would receive a
the U.S. Holders.
total dividend of US$85 (provided the euro/U.S. dollar exchange rate
at the time of payment of the dividend is the same as at the time of German Taxation of Capital Gains
refund, otherwise the effective dividend may be higher or lower). Under German income tax law, a capital gain derived from the
Further relief of German withholding tax under the Treaty may be sale or other disposition of ADRs or ordinary shares by a non-
available for corporate U.S. Holders owning at least 10% of the resident shareholder is subject to income tax in Germany only if
voting stock of SAP or U.S. Holders qualifying as pension fund within such non-resident shareholder has held, directly or indirectly, ADRs
the meaning of the Treaty, subject to further requirements being or ordinary shares representing 1% or more of the registered share
met. capital of a company at any time during the five-year period
To claim the refund of amounts withheld in excess of the Treaty immediately preceding the sale or other disposition.
rate, a U.S. Holder must submit (either directly or, as described However, a U.S. Holder of ADRs or ordinary shares that qualifies
below, through the Data Medium Procedure participant) a claim for for benefits under the Treaty is not subject to German income or
refund to the German tax authorities, with, in the case of a direct
claim, the original bank voucher (or certified copy thereof) issued by
94
corporate income tax on the capital gain derived from the sale or or U.S. Holders whose “functional currency” is not the U.S. dollar and
other disposition of ADRs or ordinary shares. U.S. Holders that hold ADRs or ordinary shares through partnerships
or other pass-through entities.
German Gift and Inheritance Tax The summary set out below is based upon the U.S. Internal
Generally, a transfer of ADRs or ordinary shares by a shareholder Revenue Code of 1986, as amended (the “Code”), the Treaty and
at death or by way of gift will be subject to German gift or inheritance regulations, rulings and judicial decisions thereunder at the date of
tax, respectively, if (i) the decedent or donor, or the heir, donee or this report. Any such authority may be repealed, revoked or
other transferee is resident in Germany at the time of the transfer, or modified, potentially with retroactive effect, so as to result in U.S.
with respect to German citizens who are not resident in Germany, if federal income tax consequences different from those discussed
the decedent or donor, or the heir, donee or other transferee has not below. No assurance can be given that the conclusions set out below
been continuously outside of Germany for a period of more than five would be sustained by a court if challenged by the IRS. The
years; (ii) the ADRs or ordinary shares are part of the business discussion below is based, in part, on representations of the
property of a permanent establishment or a fixed base in Germany; Depositary, and assumes that each obligation in the Deposit
or (iii) the ADRs or ordinary shares subject to such transfer form Agreement and any related agreements will be performed in
part of a portfolio that represents 10% or more of the registered accordance with its terms.
share capital of the Company and has been held, directly or For U.S. federal income tax purposes, a U.S. Holder of ADRs will
indirectly, by the decedent or donor, respectively, at the time of the be considered to own the ordinary shares represented thereby.
transfer, actually or constructively together with related parties. Accordingly, unless the context otherwise requires, all references in
However, the right of the German government to impose gift or this section to ordinary shares are deemed to refer likewise to ADRs
inheritance tax on a non-resident shareholder may be limited by an representing an ownership interest in ordinary shares.
applicable estate tax treaty. In the case of a U.S. Holder, a transfer of
ADRs or ordinary shares by a U.S. Holder at death or by way of gift U.S. Taxation of Dividends
generally will not be subject to German gift or inheritance tax by Subject to the discussion below under “Passive Foreign
reason of the estate tax treaty between the U.S. and Germany Investment Company Considerations”, distributions made by SAP
(Convention between the Federal Republic of Germany and the SE with respect to ordinary shares (other than distributions in
United States of America for the Avoidance of Double Taxation with liquidation and certain distributions in redemption of stock),
respect to Estate, Gift and Inheritance Taxes, German Federal Law including the amount of German tax deemed to have been withheld
Gazette 1982 vol. II page 846, as amended by the Protocol of in respect of such distributions, will generally be taxed to U.S.
December 14, 1998 and as published on December 21, 2000, Holders as ordinary dividend income.
German Federal Law Gazette 2001 vol. II, page 65; the “Estate Tax As discussed above, a U.S. Holder may obtain a refund of German
Treaty”) so long as (i) the decedent or donor, and (ii) the heir, donee withholding tax under the Treaty to the extent that the German
or other transferee was not domiciled in Germany for purposes of withholding tax exceeds 15% of the dividend distributed. Thus, for
the Estate Tax Treaty at the time the gift was made, or at the time of each US$100 of gross dividends paid by SAP SE to a U.S. Holder, the
the decedent’s death, and the ADRs or ordinary shares were not held dividends (which are dependent on the euro/U.S. dollar exchange
in connection with a permanent establishment or a fixed base in rate at the time of payment) will be initially subject to German
Germany. In general, the Estate Tax Treaty provides a credit against withholding tax of US$25 plus US$1.375 solidarity surtax, and the
the U.S. federal gift or estate tax liability for the amount of gift or U.S. Holder will receive US$73.625. A U.S. Holder who obtains the
inheritance tax paid in Germany, subject to certain limitations, in a Treaty refund will receive from the German tax authorities an
case where the ADRs or ordinary shares are subject to German gift additional amount in euro that would be equal to US$11.375. For U.S.
or inheritance tax and U.S. federal gift or estate tax. tax purposes, such U.S. Holder will be considered to have received a
total distribution of US$100, which will be deemed to have been
Other German Taxes
subject to German withholding tax of US$15 (15% of US$100)
There are currently no German net worth, transfer, stamp or resulting in the net receipt of US$85 (provided the euro/U.S. dollar
other similar taxes that would apply to a U.S. Holder on the exchange rate at the time of payment of the dividend is the same as
acquisition, ownership, sale or other disposition of our ADRs or at the time of refund, otherwise the effective dividend may be higher
ordinary shares. or lower).
In the case of a distribution in euro, the amount of the distribution
U.S. Taxation generally will equal the U.S. dollar value of the euro distributed
The following discussion applies to U.S. Holders only if the ADRs (determined by reference to the spot currency exchange rate on the
and ordinary shares are held as capital assets for tax purposes. It date of receipt of the distribution, or receipt by the Depositary in the
does not address tax considerations applicable to U.S. Holders that case of a distribution on ADRs), regardless of whether the holder in
may be subject to special tax rules, such as dealers or traders in fact converts the euro into U.S. dollar, and the U.S. Holder will not
securities, financial institutions, insurance companies, tax-exempt realize any separate foreign currency gain or loss (except to the
entities, regulated investment companies, U.S. Holders that hold extent that such gain or loss arises on the actual disposition of
ordinary shares or ADRs as a part of a straddle, conversion foreign currency received). However, a U.S. Holder may be required
transaction or other arrangement involving more than one position, to recognize foreign currency gain or loss on the receipt of a refund
U.S. Holders that own (or are deemed for U.S. tax purposes to own) in respect of German withholding tax to the extent the U.S. dollar
10% or more (by vote or value) of the stock of SAP SE, U.S. Holders value of the refund differs from the U.S. dollar equivalent of that
subject to special tax accounting rules as a result of any item of amount on the date of receipt of the underlying dividend.
gross income with respect to the ADRs or shares being taken into Dividends paid by SAP SE generally will constitute “portfolio
account in the applicable financial statement, U.S. Holders that have income” for purposes of the limitations on the use of passive activity
a principal place of business or “tax home” outside the United States
95
losses (and, therefore, generally may not be offset by passive activity Shareholders may be subject to other U.S. information reporting
losses) and as “investment income” for purposes of the limitation on requirements and should consult their own tax advisors for
the deduction of investment interest expense. Dividends paid by SAP application of these reporting requirements to their own facts and
SE will not be eligible for the dividends received deduction generally circumstances.
allowed to U.S. corporations under Section 243 of the Code.
U.S. Foreign Tax Credit
Dividends paid by SAP SE to an individual are treated as “qualified
dividends” subject to capital gains rates, i.e. at a maximum rate of In general, in computing its U.S. federal income tax liability, a U.S.
20%, if SAP SE was not in the prior year and, is not in the year in Holder may elect for each taxable year to claim a deduction or,
which the dividend is paid, a passive foreign investment company subject to the limitations on foreign tax credits generally, a credit for
(“PFIC”). Based on our audited financial statements and relevant foreign income taxes paid or accrued by it. For U.S. foreign tax credit
market and shareholder data, we believe that we were not treated as purposes, subject to the applicable limitations under the foreign tax
a PFIC for U.S. federal income taxes with respect to our 2019 tax credit rules, German tax withheld from dividends paid to a U.S.
year. In addition, based on our audited financial statements and our Holder, up to the 15% provided under the Treaty will be eligible for
current expectations regarding the value and nature of our assets, credit against the U.S. Holder’s federal income tax liability or, if the
the sources and nature of our income, and relevant market and U.S. Holder has elected to deduct such taxes, may be deducted in
shareholder data, we do not anticipate becoming a PFIC for the computing taxable income. U.S. Holders should consult their tax
2020 tax year. Certain US holders who are individuals, trusts, or advisors about potential U.S. tax consequences of German tax
estates, must pay a Medicare tax at a rate of 3.8% on the lesser of (i) withheld and/or refunded, including with respect to fluctuation of
net investment income such as dividends and (ii) the excess of the euro/U.S. dollar exchange rate.
modified adjusted gross income over the statutory thresholds. For U.S. foreign tax credit purposes, dividends paid by SAP SE
generally will be treated as foreign-source income and as “passive
U.S. Taxation of Capital Gains category income”. Gains or losses realized by a U.S. Holder on the
In general, assuming that SAP SE at no time is a PFIC, upon a sale sale or exchange of ordinary shares generally will be treated as U.S.-
or exchange of ordinary shares to a person other than SAP SE, a U.S. source gain or loss.
Holder will recognize gain or loss in an amount equal to the
difference between the amount realized on the sale or exchange and
Passive Foreign Investment Company
Considerations
the U.S. Holder’s adjusted tax basis in the ordinary shares. Such gain
or loss will be a capital gain or loss and will be considered a long- Special and adverse U.S. tax rules apply to a U.S. Holder that
term capital gain (taxable at a reduced rate for individuals) if the holds an interest in a passive foreign investment company (PFIC).
ordinary shares were held for more than one year. Capital gains may Based on current projections concerning the composition of SAP
also be subject to the Medicare tax at a rate of 3.8%. The SE’s income and assets, SAP SE does not believe that it will be
deductibility of capital losses is subject to significant limitations. treated as a PFIC for its current or future taxable years. However,
Upon a sale of ordinary shares to SAP SE, a U.S. Holder may because this conclusion is based on our current projections and
recognize a capital gain or loss or, alternatively, may be considered expectations as to its future business activity, SAP SE can provide no
to have received a distribution with respect to the ordinary shares, in assurance that it will not be treated as a PFIC in respect of its
each case depending upon the application to such sale of the rules current or any future taxable years.
of Section 302 of the Code.
Deposit and withdrawal of ordinary shares in exchange for ADRs Material Contracts
by a U.S. Holder will not result in its realization of gain or loss for U.S. See “Item 5. Operating and Financial Review and Prospects—
federal income tax purposes. Liquidity and Capital Disclosures”, for information on our credit
facilities.
U.S. Information Reporting and Backup
Withholding Compliance With Regulations
Dividend payments made to holders and proceeds paid from the Pursuant to Section 219 of the U.S. Iran Threat Reduction and
sale of shares or ADRs are subject to information reporting to the
Syria Human Rights Act of 2012 and Section 13(r) of the U.S.
Internal Revenue Service and will be subject to backup withholding
Securities Exchange Act of 1934, SAP has filed the required Iran
taxes (currently imposed at a 24% rate for 2019-2025) unless the
Notice with the SEC. See Note (G.3) to our Consolidated Financial
holder (i) is a corporation or other exempt recipient or (ii) provides a
Statements for more information.
taxpayer identification number on a properly completed IRS Form W-
9 and certifies that no loss of exemption from backup withholding Documents on Display
has occurred. Holders that are not U.S. persons are not subject to
We are subject to the informational requirements of the
information reporting or backup withholding. However, such a holder
Securities Exchange Act of 1934, as amended. In accordance with
may be required to provide a certification of its non-U.S. status in
these requirements, we file reports and furnish other information as
connection with payments received within the United States or
a foreign private issuer with the SEC. These materials, including this
through a U.S.-related financial intermediary.
report and the exhibits thereto, may be inspected and copied at the
Backup withholding is not an additional tax and any amounts
SEC’s Public Reference Room at 100 F Street, N.E., Room 1580,
withheld as backup withholding may be credited against a holder’s
Washington, D.C. 20549. The SEC also maintains a Web site at
U.S. federal income tax liability. A holder may obtain a refund of any
www.sec.gov that contains reports and other information regarding
excess amounts withheld under the backup withholding rules by
registrants that file electronically with the SEC. This report as well as
timely filing the appropriate claim for refund with the Internal
some of the other information submitted by us to the SEC may be
Revenue Service and furnishing any required information.
96
accessed through this Web site. In addition, information about us is described more fully in Section 5.9 of the Amended and Restated
available at our Web site: www.sap.com. Deposit Agreement dated as of November 25, 2009, as amended by
Amendment No. 1 dated as of March 18, 2016 and as may be further
ITEM 11. QUANTITATIVE amended from time to time, incorporated by reference as Exhibits
4.1.1 and 4.1.2 to this report.
AND QUALITATIVE Applicable service fees are either deducted from any cash
dividends or other cash distributions or charged separately to
DISCLOSURES ABOUT holders in a manner determined by the Depositary, depending on

whether ADSs are registered in the name of investors (whether
MARKET RISK certificated or in book-entry form) or held in brokerage and

custodian accounts (via DTC). In the case of distributions of
securities, the Depositary charges the applicable ADS record date
holder concurrent with the distribution. In the case of ADSs
We are exposed to various financial risks, such as market risks,
registered in the name of the investor, whether certificated or in
including changes in foreign currency exchange rates, interest rates
book entry form, the Depositary sends invoices to the applicable
and equity prices, as well as credit risk and liquidity risk. We manage
record date ADS holders. For ADSs held in brokerage and custodian
these risks on a Group-wide basis. Selected derivatives are
accounts via DTC, the Depositary may, if permitted by the
exclusively used for this purpose and not for speculation, which is
settlement systems provided by DTC, collect the fees through those
defined as entering into derivative instruments without a
settlement systems from the brokers and custodians holding ADSs
corresponding underlying transaction. Financial risk management is
in their DTC accounts. The brokers and custodians who hold their
done centrally. See Note (F.1) to our Consolidated Financial
clients’ ADSs in DTC accounts in such case may in turn charge their
Statements for our quantitative and qualitative disclosures about
clients’ accounts the amount of the service fees paid to the
market risk.
Depositary.
In the event of a refusal to pay applicable fees, the Depositary
ITEM 12. DESCRIPTION OF may refuse the requested services until payment is received or may
set off the amount of the fees from any distribution to be made to
SECURITIES OTHER THAN the ADR holder, all in accordance with the Deposit Agreement.
If any taxes or other governmental charges are payable by the
EQUITY SECURITIES holders and/or beneficial owners of ADSs to the Depositary, the
Depositary, the custodian or SAP may withhold or deduct from any
distributions made in respect of the deposited SAP ordinary share
American Depositary Shares and may sell for the account of the holder and/or beneficial owner
any or all of the deposited ordinary shares and apply such
Fees and Charges Payable by ADR Holders distributions and sale proceeds in payment of such taxes (including
applicable interest and penalties) or charges, with the holder and the
Deutsche Bank Trust Company Americas is the Depositary for
beneficial owner thereof remaining fully liable for any deficiency.
SAP SE’s ADR program. ADR holders may be required to pay the
following charges:
Fees and Other Payments Payable by the
– taxes and other governmental charges;
– registration fees as may be in effect from time to time for the
Depositary to SAP
registration of transfers of SAP ordinary shares on any applicable In connection with the ADR program, the Depositary has agreed
register to the Depositary or its nominee or the custodian or its to make certain payments to SAP and waive certain costs of
nominee in connection with deposits or withdrawals under the providing ADR administrative and reporting services, including
Deposit Agreement; reporting of ADR program activity, distribution of information to
– applicable air courier, cable, telex and facsimile expenses of the investors and managing the ADR program. For the period beginning
Depositary; November 25, 2018 and ending November 24, 2019, the Depositary
– expenses incurred by the Depositary in the conversion of foreign made direct and indirect payments to SAP in an aggregate amount
currency; of US$2,430,573.19 related to the ADR program.
– US $5.00 or less per 100 ADSs (or portion thereof) to the
Depositary for the execution and delivery of ADRs (including in
connection with the depositing of SAP ordinary shares or the
exercising of rights) and the surrender of ADRs;
– a maximum aggregate service fee of US $3.00 per 100 ADSs (or
portion thereof) per calendar year to the Depositary for the
services performed by the Depositary in administering the ADR
program, including for processing any cash dividends and other
cash distributions; and
– US $5.00 or less per 100 ADSs (or portion thereof) to the
Depositary for distribution of securities other than SAP ordinary
shares or rights.
These fees may at any time and from time to time be changed by
agreement between SAP SE and the Depositary. These charges are
97
PART II
Management’s Annual Report on Internal
Control Over Financial Reporting
The management of SAP is responsible for establishing and
maintaining adequate internal control over financial reporting as
such term is defined in Rules 13a-15(f) and 15d-15(f) under the
ITEM 13. DEFAULTS, Securities Exchange Act of 1934. SAP’s internal control over financial
reporting is a process designed under the supervision of SAP’s Co-
DIVIDEND ARREARAGES CEOs and CFO to provide reasonable assurance regarding the
AND DELINQUENCIES
reliability of financial reporting and the preparation of financial
statements for external reporting purposes in accordance with
International Financial Reporting Standards as issued by the
International Accounting Standards Board.
None. SAP’s management assessed the effectiveness of the Company’s
internal control over financial reporting as of December 31, 2019. In
ITEM 14. MATERIAL making this assessment, it used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway
MODIFICATIONS TO THE Commission in “Internal Control — Integrated Framework (2013)”.

Based on the assessment under these criteria, SAP management
RIGHTS OF SECURITY has concluded that, as of December 31, 2019, the Company’s
internal control over financial reporting was effective.
HOLDERS AND USE OF KPMG AG Wirtschaftsprüfungsgesellschaft, our independent
registered public accounting firm, has issued its audit report on the
PROCEEDS effectiveness of SAP’s internal control over financial reporting, which
is included in Item 18. Financial Statements, “Report of Independent
Registered Public Accounting Firm.”
None.
Changes in Internal Control Over
Financial Reporting
ITEM 15. CONTROLS AND There has been no change in our internal control over financial
PROCEDURES reporting framework during the period covered by this report that
has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
Evaluation of Disclosure Controls and

Procedures
Disclosure controls and procedures are controls and other
procedures of SAP that are designed to ensure that information
required to be disclosed by SAP in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Commission’s rules
and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that
information required to be disclosed by SAP in the reports that it
files or submits under the Exchange Act is accumulated and
communicated to SAP management, including SAP’s principal
executive and financial officers (i.e. SAP’s Co-chief executive officers
(Co-CEOs) and chief financial officer (CFO)), or persons performing
similar functions, as appropriate to allow timely decisions regarding
required disclosure. SAP’s management evaluated, with the
participation of SAP’s Co-CEOs and CFO the effectiveness of SAP’s
disclosure controls and procedures as of December 31, 2019. The
evaluation was led by SAP’s Global Governance Risk & Compliance
function, including dedicated “SOX Champions” in all of SAP’s major
entities and business units with the participation of process owners,
SAP’s key corporate senior management, senior management of
each business group, and as indicated above under the supervision
of SAP’s Co-CEOs and CFO. Based on the foregoing, SAP’s
management, including SAP’s Co-CEOs and CFO, concluded that as
of December 31, 2019, SAP’s disclosure controls and procedures
were effective.
98
ITEM 16. [RESERVED] accounting firm, KPMG, for audit services and other professional
services.
Audit Committee’s Pre-Approval Policies

ITEM 16A. AUDIT and Procedures
COMMITTEE FINANCIAL
As required under German law, our shareholders appoint our
external independent auditors to audit our financial statements,
EXPERT based on a proposal that is legally required to be submitted by the

Supervisory Board. The Supervisory Board’s proposal is based on a
recommendation by the Audit Committee. See also the description
in “Item 10. Additional Information — Corporate Governance.”
Our Supervisory Board has determined that Dr. Gunnar In 2002 our Audit Committee adopted a policy with regard to the
Wiedenfels is an “audit committee financial expert”, as defined by the pre-approval of audit and non-audit services to be provided by our
regulations of the Commission issued pursuant to Section 407 of the external independent auditors. This policy, which is designed to
Sarbanes-Oxley Act of 2002 and meeting the requirements of Item assure that such engagements do not impair the independence of
16A. He is “independent”, as such term is defined in Rule 10A-3 under our auditors, was amended several times since 2002 with the latest
the Exchange Act. changes made to reflect the provisions on audit and non-audit
services introduced by European Union in 2014. The policy requires
ITEM 16B. CODE OF ETHICS prior approval of the Audit Committee for all services to be provided
by our external independent auditors for any entity of the SAP
Group. With regard to non-audit services the policy distinguishes
In 2003, SAP adopted a Code of Business Conduct that applies to among three categories of services:
all employees (including all personnel in the accounting and – “Prohibited services:” This category includes services that our
external independent auditors must not be engaged to perform.
controlling departments), managers and the members of SAP’s
Executive Board (including our Co-CEOs and CFO). Our Code of These are services that are not permitted by applicable law or
Business Conduct constitutes a “code of ethics” as defined in Item that would be inconsistent with maintaining the auditors’
16.B of Form 20-F. Our Code of Business Conduct sets standards for independence.
– “Services requiring universal approval:” Services of this category
all dealings with customers, partners, competitors and suppliers and
includes, among others, regulations with regard to confidentiality, may be provided by our external independent auditors up to a
loyalty, preventing conflicts of interest, preventing bribery, data certain aggregate amount in fees per year that is determined by
protection and privacy and avoiding anti-competitive practices. the Audit Committee.
International differences in culture, language, and legal and social – “Services requiring individual approval:” Services of this category
may only be provided by our external independent auditors if
systems make the adoption of uniform Codes of Business Conduct
across an entire global company challenging. As a result, SAP has they have been individually (specifically) pre-approved by the
set forth a master code containing minimum standards. In turn, each Audit Committee or an Audit Committee member who is
company within the SAP Group has been required to adopt a similar authorized by the Audit Committee to make such approvals.
code that meets at least these minimum standards, but may also Our Chief Accounting Officer or individuals empowered by him
include additional or more stringent rules of conduct. Newly review all individual requests to engage our external independent
auditors as a service provider in accordance with this policy and
acquired companies also are required to meet the minimum
standards set forth in the Code of Business Conduct. SAP amends determines the category to which the requested service belongs. All
requests for engagements with expected fees over a specified limit
its Code of Business Conduct as necessary, including in February
are additionally reviewed by our CFO. Based on the determination of
2012 and December 2016, and most recently in March 2018. We have
made our amended Code of Business Conduct publicly available by the category the request is (i) declined if it is a “prohibited service,”
(ii) approved if it is a “service requiring universal approval” and the
posting the full text on our Web site under
maximum aggregate amount fixed by the Audit Committee has not
http://www.sap.com/corporate-en/investors/governance/policies-
been reached or (iii) forwarded to the Audit Committee for individual
statutes.epx.
approval if the “service requires individual approval” or is a “service
requiring universal approval” and the maximum aggregate amount
ITEM 16C. PRINCIPAL fixed by the Audit Committee has been exceeded.
Our Audit Committee’s pre-approval policies also include
ACCOUNTANT FEES AND information requirements to ensure the Audit Committee is kept
aware of the volume of engagements involving our external
SERVICES independent auditors that were not individually pre-approved by the
Audit Committee itself.
Substantially all of the work performed to audit our Consolidated
Audit Fees, Audit Related Fees, Tax Fees Financial Statements was performed by our principal independent
public accounting firms’s full-time, permanent employees.
and All Other Fees
Refer to Note (G.7) to our Consolidated Financial Statements for
information on fees charged by our independent registered public
99
ITEM 16D. EXEMPTIONS ITEM 16F. CHANGES IN
FROM THE LISTING REGISTRANT’S
STANDARDS FOR AUDIT CERTIFYING ACCOUNTANT
COMMITTEES Not applicable.
Rule 10A-3 of the Exchange Act requires that all members of our
audit committee be independent, subject to certain exceptions. In ITEM 16G. DIFFERENCES IN
accordance with German law, the Audit Committee consists of both
employee and shareholder elected members. Rule 10A-3 provides an CORPORATE GOVERNANCE
exception for an employee of a foreign private issuer such as SAP
who is not an executive officer of that issuer and who is elected to PRACTICES
the supervisory board or audit committee of that issuer pursuant to
the issuer’s governing law. In this case, the employee is exempt from
the independence requirements of Rule 10A-3 and is permitted to sit The following summarizes the principal ways in which our
on the audit committee. corporate governance practices differ from the NYSE corporate
We rely on this exemption. Our Audit Committee includes three governance rules applicable to U.S. domestic issuers (the NYSE
employee representatives, Panagiotis Bissiritsas, Margret Klein- Rules).
Magar and James Wright, who were appointed to our Supervisory
Board pursuant to the Agreement on the Involvement of Employees Introduction
in SAP SE (see “Item 6. Directors, Senior Management and SAP is incorporated under the laws of the European Union and
Employees.” for details). We believe that our reliance on this Germany, with securities publicly traded on markets in Germany,
exemption does not materially adversely affect the ability of our including the Frankfurt Exchange and in the United States on the
Audit Committee to act independently and to satisfy the other NYSE.
requirements of Rule 10A-3. The NYSE Rules permit foreign private issuers to follow
applicable home country corporate governance practices in lieu of
ITEM 16E. PURCHASES OF

the NYSE corporate governance standards, subject to certain
exceptions. Foreign private issuers electing to follow home country
EQUITY SECURITIES BY corporate governance rules are required to disclose the principal
differences in their corporate governance practices from those
THE ISSUER AND required under the NYSE Rules. This Item 16G summarizes the
principal ways in which SAP’s corporate governance practices differ
AFFILIATED PURCHASERS from the NYSE Rules applicable to domestic issuers.
Legal Framework
The primary sources of law relating to the corporate governance
At the Annual General Meeting of Shareholders on May 17, 2018,
of a European Company are the Council Regulation (EC) No.
the Executive Board was authorized to acquire, on or before May 16,
2157/2001 on the Statute for a European Company (the “SE
2023, up to 120 million shares of SAP. The authorization from May 17,
Regulation”), the German Act on the Implementation of Council
2018 replaced the authorization from June 4, 2013.
Regulation No. 2157/2001 of October 8, 2001 on the Statute for a
The authorization is subject to the provision that the shares to be
European Company (Gesetz zur Ausführung der Verordnung (EG) Nr.
purchased, together with any other shares already acquired and held
2157/2001 des Rates vom 8. Oktober 2001 über das Statut der
by SAP or which are attributable to SAP pursuant to Section 71d and
Europäischen Gesellschaft (SE) – SE-Ausführungsgesetz; “SE-AG”)
Section 71e AktG (German Stock Corporation Act), do not account
of December 22, 2004, and the German Stock Corporation Act
for more than 10% of SAP’s capital stock.
(Aktiengesetz). Additionally, the European Regulation (EU) No
In 2019 there were no purchases made by us or on our behalf or
596/2014 of the European Parliament and the Council on market
on behalf of SAP of SAP shares or SAP ADRs. The maximum number
abuse (the “MAR”), the German Securities Trading Act
of SAP shares that SAP could purchase under existing repurchase
(Wertpapierhandelsgesetz), the German Securities Purchase and
programs was 87,996,069 as of December 31, 2019.
Take Over Act (Wertpapiererwerbs- und Übernahmegesetz), the
Furthermore, in 2019 SAP announced its intention to repurchase
Stock Exchange Admission Regulations, the German Commercial
shares and/or issue a special dividend in 2020 with a combined
Code (Handelsgesetzbuch) and certain other German statutes
volume of €1.5 billion.
contain corporate governance rules applicable to SAP. In addition to
these mandatory rules, the German Corporate Governance Code
(“GCGC”) summarizes the mandatory statutory corporate
governance principles found in the German Stock Corporation Act
and other provisions of German law. Further, the GCGC contains
supplemental recommendations and suggestions for standards on
100
responsible corporate governance intended to reflect generally By contrast, the German Stock Corporation Act and the GCGC
accepted best practices. require that the Supervisory Board ensure that its members
The German Stock Corporation Act requires the executive and collectively have the knowledge, competencies and professional
the supervisory board of publicly listed companies like SAP to experience required to properly perform their duties. Additionally,
declare annually that the recommendations set forth in the GCGC the GCGC recommends that the Supervisory Board should
have been and are being complied with or which of the implement and adhere to concrete director independence criteria,
recommendations have not been or are not being complied with and specify what it considers to be appropriate numbers of
why not. SAP disclosed and reasoned deviations from a few of the shareholders’ representatives and Supervisory Board members
GCGC recommendations in its Declaration of Implementation on a generally which are independent within the meaning of Section 5.4.2
yearly basis from 2003 onwards. In its most recent Declaration of of the Code, and determine annually whether such numbers have
Implementation issued in October 2019, SAP declared that it has been met. According to this definition, a Supervisory Board member
complied with all recommendations set out in the GCGC since the is not to be considered independent in particular if s/he has
last declaration and will continue to comply with them also in the personal or business relations with the company, its executive
future. Declarations from 2012 forward are available on the SAP bodies, a controlling shareholder or an enterprise associated with
website. any of the preceding persons and entities which could cause a
substantial and sustained conflict of interest. The members of the
Significant Differences Supervisory Board must ensure that they have enough time to
We believe the following to be the significant differences between perform their board duties and must carry out their duties carefully
applicable European and German corporate governance practices, and in the company’s best interests. They must be loyal to SAP in
as SAP has implemented them, and those applicable to domestic their conduct, and the GCGC recommends that they should not
companies under the NYSE Rules. accept appointment to governing bodies of, or exercise advisory
functions at, companies that are in significant competition with SAP.
SAP SE is a European Company With a The GCGC further recommends that each member of the
Supervisory Board should inform the Supervisory Board of any
Two-Tier Board System
conflicts of interest, and that material and sustained conflicts of
SAP is governed by three separate bodies: (i) the Supervisory
interest involving a member of the Supervisory Board should result
Board, which counsels, supervises and controls the Executive Board; in the termination of that member’s Supervisory Board mandate.
(ii) the Executive Board, which is responsible for the management of
Supervisory Board members must disclose any planned conclusion
SAP; and (iii) the General Meeting of Shareholders. The rules of advisory or other service agreements or contracts for work with
applicable to these governing bodies are defined by European and SAP, or loan agreements between them or persons closely related to
German law and by SAP’s Articles of Incorporation. This corporate them and SAP to the Supervisory Board promptly. Such agreements
structure differs from the unitary board of directors established by require the consent of the Supervisory Board. The Supervisory
the relevant laws of all U.S. states and the NYSE Rules. Under the SE
Board may grant its permission for any such transaction only if it is
Regulation and the German Stock Corporation Act, the Supervisory based on terms and conditions that are standard for the type of
Board and Executive Board are separate and no individual may be a transaction in question and if the transaction is not contrary to
member of both boards. See “Item 10. Additional Information — SAP’s interest.
Corporate Governance” for additional information on the corporate SAP complies with the director independence requirements and
structure. recommendations described above. In particular, the Supervisory
Board of SAP SE determined in fiscal year 2019 that all nine
Director Independence Rules shareholders’ representatives on the Supervisory Board are
The NYSE Rules require that a majority of the members of the independent within the meaning of Section 5.4.2 of the GCGC, and
board of directors of a listed issuer and each member of its that also considering the employee representatives the Supervisory
nominating, corporate governance, compensation and audit Board has what it considers to be an adequate number of
committee be “independent.” As a foreign private issuer, SAP is not independent members.
subject to the NYSE board, compensation committee and corporate Section 5.3.2 of the GCGC recommends that the chairperson of
governance committee independence requirements but instead can the Audit Committee of the Supervisory Board should have specific
elect to follow its home country rules. With respect to the audit knowledge and experience in applying accounting principles and
committee, SAP is required to satisfy Rule 10A-3 of the Exchange internal control procedures, and should be independent, and not be
Act, which provides certain exemptions from the audit committee a former member of the Executive Board whose term of office ended
independence requirements in the case of employee board less than two years ago. Furthermore, the chairperson of the Audit
representatives. The NYSE Rules stipulate that no director qualifies Committee should not simultaneously chair the Supervisory Board
as “independent” unless the board of directors has made an as a whole. Dr. Erhard Schipporeit who was the Chairman of SAP’s
affirmative determination that the director has no material direct or Audit Committee until May 15, 2019 as well as Dr. Gunnar Wiedenfels
indirect relationship with the listed company. However, under the who is the current Chairman of the Audit Committee meet these
NYSE Rules a director may still be deemed independent even if the recommendations. However, applicable European and German
director or a member of a director’s immediate family has received corporate law does not require the Supervisory Board to make an
during a 12 month period within the prior three years up to $120,000 affirmative determination for each individual member that it is
in direct compensation. In addition, a director may also be deemed independent or that a majority of Supervisory Board members or
independent even if a member of the director’s immediate family the members of a specific committee are independent. As described
works for the company’s auditor in a non-partner capacity and not above, the GCGC only recommends that the Supervisory Board
on the company’s audit. determines the independence of its members.
101
The NYSE independence requirements are closely linked with addition, each committee’s performance must be reviewed annually.
risks specific to unitary boards of directors that are customary for Applicable European and German corporate law does not mandate
U.S. companies. In contrast, the two-tier board structure requires a the creation of specific supervisory board committees. The GCGC
strict separation of the executive board and supervisory board. In recommends that the Supervisory Board establish an Audit
addition, the supervisory board of a European Company formed by Committee and a Nomination Committee. SAP has the following
conversion from a large German stock corporation which was committees, which are in compliance with the GCGC: General and
subject to the principle of employee codetermination as outlined in Compensation Committee, Audit Committee, Technology and
the German Co-Determination Act of 1976 (Mitbestimmungsgesetz) Strategy Committee, Finance and Investment Committee,
is subject to at least the same level of employee participation which Nomination Committee, Special Committee (until May 15, 2019) and
formerly existed in the German stock corporation that was People and Organization Committee (See “Item 10. Additional
converted to an SE. The terms of employee participation with regard Information — Corporate Governance” for more information).
to the Supervisory Board of SAP SE are, among others, set out in the
Agreement on the Involvement of Employees in SAP SE. As a result, Rules on Shareholders’ Compulsory
the Supervisory Board of SAP SE consists of 18 members, of which Approval are Different
nine are representatives of SAP SE’s shareholders elected at the
Section 312 of the NYSE Rules requires U.S. companies to seek
Annual General Meeting and nine members are representatives of
shareholder approval of all equity-compensation plans, including
the European employees. Only a shareholders’ representative may
certain material revisions thereto (subject to certain exemptions as
be elected as chairperson of the Supervisory Board. In case of a tied
described in the rules), issuances of common stock, including
vote, the vote of the chairperson and, in the event that the
convertible stock, if the common stock has, or will have upon
chairperson does not participate in passing the resolution, the vote
issuance, voting power of or in excess of 20% of the then
of the deputy chairperson, provided that he or she is a shareholders’
outstanding common stock, and issuances of common stock if they
representative, will be decisive (casting vote). This board structure
trigger a change of control.
creates a different system of checks and balances, including
According to applicable European law, the German Stock
employee participation, and cannot be directly compared with a
Corporation Act and other applicable German laws, shareholder
unitary board system.
approval is required for a broad range of matters, such as
amendments to the articles of association, certain significant
Audit Committee Independence corporate transactions (including inter-company agreements and
As a foreign private issuer, the NYSE Rules require SAP to material restructurings), the offering of stock options and similar
establish an Audit Committee that satisfies the requirements of Rule equity compensation to its Executive Board members or its
10A-3 of the Exchange Act with respect to audit committee employees by a way of a conditional capital increase or by using
independence. SAP is in compliance with these requirements. The treasury shares (including significant aspects of such an equity
Chairman of SAP’s Audit Committee, Gerhard Oswald and Dr. compensation plan as well as the exercise thresholds), the issuance
Friederike Rotsch meet the independence requirements of Rule 10A- of new shares, the authorization to purchase the corporation’s own
3 of the Exchange Act. The other three Audit Committee members, shares, and other essential issues, such as transfers of all, or
Panagiotis Bissiritsas, Margret Klein-Magar and James Wright, are substantially all, of the assets of the stock corporation, including
employee representatives who are eligible for the exemption shareholdings in subsidiaries.
provided by Rule 10 A-3 (b) (1) (iv) (C) (see “Item 16D Exemptions
from the listing standards for audit committees” for details). Specific Principles of Corporate
The Audit Committee independence requirements are similar to
the Board independence recommendations of the GCGC. See the
Governance
section above under “Director Independence Rules.” Nonetheless, Under the NYSE Rules Section 303A.09 listed companies must
SAP meets the NYSE Rules on audit committee independence adopt and disclose corporate guidelines. Since October 2007, SAP
applicable to foreign private issuers. has applied, with few exceptions, and since February 2018 without
any exceptions, the recommended corporate governance standards
Rules on Non-Management Board of the GCGC rather than company-specific principles of corporate
governance. The GCGC recommendations differ from the NYSE
Meetings are Different Standards primarily as outlined in this Item 16G.
Section 303 A.03 of the NYSE Rules stipulates that the non-
management board of each listed issuer must meet at regularly Specific Code of Business Conduct
scheduled executive sessions without the management. Under
NYSE Rules Section 303 A.10 requires listed companies to adopt
applicable European and German corporate law and the GCGC the
and disclose a code of business conduct and ethics for directors,
Supervisory Board is entitled but not required to exclude Executive
officers and employees, and to disclose promptly any waivers of the
Board members from its meetings. The Supervisory Board exercises
code for directors or executive officers. Although not required under
this right generally during its meetings.
applicable European and German law, SAP has adopted a Code of
Business Conduct, which is equally applicable to employees,
Rules on Establishing Committees Differ managers and members of the Executive Board. SAP complies with
Pursuant to Section 303 A.04 and 303 A.05 of the NYSE Rules the requirement to disclose the Code of Business Conduct and any
listed companies are required to set up a Nominating/Corporate waivers of the code with respect to directors and executive officers.
Governance Committee and a Compensation Committee, each See “Item 16B. Code of Ethics” for details.
composed entirely of independent directors and having a written
charter specifying the committee’s purpose and responsibilities. In
102
PART III
ITEM 17. FINANCIAL STATEMENTS
Not applicable.
ITEM 18. FINANCIAL STATEMENTS

The Consolidated Financial Statements are included herein on pages F-1 through F-81.
The following are filed as part of this report:
– Report of Independent Registered Public Accounting Firm.
– Consolidated Financial Statements
▪ Consolidated Income Statements for the years ended December 31, 2019, 2018, and 2017.
▪ Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018, and 2017.
▪ Consolidated Statements of Financial Position as of December 31, 2019 and 2018.
▪ Consolidated Statements of Changes in Equity for the years ended December 31, 2019, 2018, and 2017.
▪ Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018, and 2017.
▪ Notes to the Consolidated Financial Statements.
ITEM 19. EXHIBITS

The following documents are filed as exhibits to this report:
1 Articles of Incorporation (Satzung) of SAP SE, effective as of June 4, 2018 (English translation). (1)
2.1 Form of global share certificate for ordinary shares (English translation). (2)
Certain instruments which define rights of holders of long-term debt of SAP SE and its subsidiaries are not being filed because the
total amount of securities authorized under each such instrument does not exceed 10% of the total consolidated assets of SAP SE
and its subsidiaries. SAP SE and its subsidiaries hereby agree to furnish a copy of each such instrument to the Securities and
Exchange Commission upon request.
4.1.1 Amended and Restated Deposit Agreement dated as of November 25, 2009, by and among SAP SE, Deutsche Bank Trust Company
Americas as Depositary, and all owners and holders from time to time of American Depositary Receipts issued thereunder. (3)
4.1.2 Amendment No. 1 dated March 18, 2016 to the Amended and Restated Deposit Agreement, by and among SAP SE, Deutsche Bank
Trust Company Americas as Depositary, and all owners and holders from time to time of American Depositary Receipts issued
thereunder, including the form of American Depositary Receipt. (4)
8 For a list of our subsidiaries see Note (G.9) to our Consolidated Financial Statements in “Item 18. Financial Statements”.
12.1 Certification of Christian Klein, Co-Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a).
12.2 Certification of Jennifer Morgan, Co-Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a).
12.3 Certification of Luka Mucic, Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a).
13.1 Certification of Christian Klein, Co-Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
13.2 Certification of Jennifer Morgan, Co-Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
13.3 Certification of Luka Mucic, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
15 Consent of Independent Registered Public Accounting Firm.
101.INS iXBRL Instance Document
101.SCH iXBRL Taxonomy Schema Linkbase Document
101.CAL iXBRL Taxonomy Calculation Linkbase Document
101.DEF iXBRL Taxonomy Definition Linkbase Document
101.LAB iXBRL Taxonomy Labels Linkbase Document
101.PRE iXBRL Taxonomy Presentation Linkbase Document
104.Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101
103
(1) Incorporated by reference to SAP SE’s Annual Report on Form 20-F filed with the SEC on February 28, 2019.
(2) Incorporated by reference to Exhibit 2.1 to SAP SE’s 2014 Annual Report on Form 20-F filed with the SEC on March 20, 2015.
(3) Incorporated by reference to Exhibit 99.(a)(2) of Post Effective Amendment #1 to SAP SE’s Registration Statement on Form F-6 filed on November 25, 2009.
(4) Incorporated by reference to Exhibit 99.(a)(2) of Post Effective Amendment #2 to SAP SE’s Registration Statement on Form F-6 filed on March 18, 2016.
104
Signatures
The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this report on its behalf.
SAP SE
(Registrant)
By: /s/ CHRISTIAN KLEIN
_____________________________________________
Name: Christian Klein
Title: Co-Chief Executive Officer
Dated: February 27, 2020
SAP SE
(Registrant)
By: /s/ JENNIFER MORGAN
_____________________________________________
Name: Jennifer Morgan
Title: Co-Chief Executive Officer
By: /s/ LUKA MUCIC

_____________________________________________
Name: Luka Mucic
Title: Chief Financial Officer
105
SAP SE AND SUBSIDIARIES
Index to the consolidated Financial Statements

Page
Report of Independent Registered Public Accounting Firm F-2
Consolidated Financial Statements IFRS:
Consolidated Income Statements for the years ended December 31, 2019, 2018 and 2017 F-5
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017 F-6
Consolidated Statements of Financial Position as of December 31, 2019 and 2018 F-7
Consolidated Statements of Changes in Equity for the years ended December 31, 2019, 2018 and 2017 F-8
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017 F-9
Notes to the Consolidated Financial Statements IFRS F-10 to F-81
F-1
Report of Independent Registered Public Accounting Firm
To the Shareholders and Supervisory Board of SAP SE:
Opinions on the Consolidated Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial position of SAP SE and subsidiaries (the Company) as of December
31, 2019 and 2018, the related consolidated income statements, and the related consolidated statements of comprehensive income, changes
in equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes (collectively, the
consolidated financial statements). We also have audited the Co mpany’s internal control over financial reporting as of December 31, 2019,
based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the
Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period
ended December 31, 2019, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards
Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December
31, 2019 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission.
Change in Accounting Principles
As discussed in Note D.8 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January
1, 2019 due to the adoption of International Financial Reporting Standard 16, Leases.
As discussed in Note IN.1 to the consolidated financial statements, the Company has changed its method of accounting for revenue from
contracts with customers as of January 1, 2018 due to the adoption of International Financial Reporting Standard 15, Revenue from Contracts
with Customers.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial
reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial
statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm
registered with Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or
fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding
of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the rel iability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A
company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that,
F-2
in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorization s of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to
the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of
critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to
which they relate.
Software license revenue recognition
As discussed in note A.1 to the consolidated financial statements, SAP generated revenue in 2019 of EUR 27.6 billion, of which EUR 16.1 billion
relate to revenues from sales of software licenses.
We identified the evaluation of software license revenue recognition as a critical audit matter due to the complex nature of SAP’s customer
contracts. A high degree of auditor judgment was involved, in particular, evaluating SAP’s assessment of the following:
(i) whether various contracts are interrelated,

(ii) whether product and services qualify as separate performance obligations,
(iii) the standalone selling price used to allocate the transaction price of a customer contract to the performance obligations in the contract.
The primary procedures we performed to address this critical audit matter included the following.
We tested certain internal controls within the revenue process to identify interrelated contracts and separate performance obligations, to
develop estimates of stand-alone selling prices to allocate the transaction price.
For a sample of customer contracts, which were selected using a statistical approach, we also:
– inspected the underlying contractual agreements and other related documents as well as inquiries with SAP’s accounting and/or
sales representatives to evaluate SAP’s assessment of whether contracts were interrelated as well as identified performance
obligations and allocation of transaction price;
– obtained and inspected external confirmations of the key terms and conditions from the respective customers to test the contract
identification as well as the performance obligations and the transaction price.
We evaluated the stand-alone selling prices for each of the deliverables that qualified as a separate performance obligation by assessing the
methodology applied, testing mathematical accuracy of the underlying calculations, and testing a sample of customer contracts to evaluate
the underlying transaction data.
Assessment of the Group’s tax uncertainties
As discussed in note C.5 to the consolidated financial statements, SAP operates in multiple tax jurisdictions with complexities and
uncertainties due to different interpretations of tax laws, such as those involving revenue sharing and cost reimbursement arrangements
between SAP Group entities, changing tax laws, and intercompany financing transactions. The nature of these activities can result in
uncertainties in the estimation of the related tax exposures. As at 31 December 2019 SAP disclosed contingent liabilities relating to tax
uncertainties of EUR 2,013 million.
We identified the assessment of the Group’s tax uncertainties as a critical audit matter because complex auditor judgment and specialized
skills were required in evaluating the Group’s interpretations of tax law and estimate of related exposures.
F-3
The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over
the tax process including controls over the Group’s assessment of tax law and the process to estimate the related exposures. We assessed
the competency, skill and objectivity of the external experts as well as the opinions they prepared. We inquired of the Group’s tax department
and inspected correspondence with the responsible tax authorities. We involved our tax professionals with specialized skills and knowledge,
who assisted in evaluating SAP´s conclusion´s over the estimate of tax uncertainties based on knowledge and experience regarding the
application of relevant legislation by tax authorities and the courts.
Recognition and initial measurement of intangible assets from the acquisition of Qualtrics International Inc., Provo/USA
As discussed in note D.1 to the consolidated financial statements, on January 23, 2019, SAP acquired Qualtrics International Inc., Provo, USA
(“Qualtrics”). The purchase price amounted to EUR 6,449 million. In allocating the purchase price, SAP recognised intangible assets in the
amount of EUR 1,803 million, and goodwill in the amount of EUR 5,015 million.
We identified the evaluation of the recognition and initial measurement of intangible assets acquired in the Qualtrics acquisition as a critical
audit matter. It required especially subjective auditor judgement to assess the projections of the acquired business’s revenues and margins,
asset-specific revenue and margin adjustments, estimated useful lives, royalty and attrition rates, as well as the cost of capital used to
calculate the acquisition-date fair values of the identifiable intangible assets acquired. In addition, specialized skills and knowledge were
needed to test significant assumptions used in the discounted cash flow model including the assumptions listed above.
The primary procedures we performed to address this critical audit matter are as follows:
We tested certain internal controls over the Company´s acquisition-date valuation process including controls to develop the relevant
assumptions mentioned above.
We involved our valuation professionals with specialized skills and knowledge, who assisted in testing the assumptions as listed above by
comparing them to our own expectations based on our knowledge of the acquired business, our experience in the software industry, and
taking into account recent comparable transactions. The assumptions and parameters underlying the cost of capital were compared with
our own assumptions and publicly available data.
Recoverability of the carrying amount of goodwill for Qualtrics Segment
As discussed in note D.2 to the consolidated financial statements, SAP performs its annual goodwill impairment test at the level of its
operating segments as there are no lower levels within SAP at which goodwill is monitored. Goodwill allocated to the Qualtrics Segment is
EUR 2,882 million as of December 31, 2019 (4.8 % of the consolidated statement of financial position total).
We identified the recoverability of the carrying amount of goodwill for the Qualtrics Segment as a critical audit matter. The estimated
recoverable amount of the Qualtrics Segment approximated its carrying value, indicating a higher risk that the goodwill may be impaired as
of December 2019. The assessment of the recoverable amount requires complex and significant auditor judgement to test. The key
assumptions relate to the budgeted revenue growth, budgeted operating margin, and discount rate, whereas minor changes to those
assumptions have a significant effect on the estimated recoverable amount.
The primary procedures we performed to address this critical audit matter included the following.
We tested certain internal controls over the impairment process including budgeted revenue growth, budgeted operating margin and
discount rate assumptions for the Qualtrics Segment. We involved our valuation professionals with specialized skills and knowledge, who
assisted in assessing the discount rate used in measuring the recoverable amount. We evaluated SAP’s assumptions listed above by
comparing the fair value less cost of disposal to our own expectations. We performed an independent sensitivity analysis for each
assumption listed above using our own assumptions that we have developed based on external sources.
/s/ KPMG AG Wirtschaftsprüfungsgesellschaft
We have served as the Company’s auditor since 2002.
Mannheim, Germany
February 19, 2020
F-4
SAP SE AND SUBSIDIARIES
Consolidated Financial Statements IFRS

Consolidated Income Statements of SAP Group for the Years Ended December 31
€ millions, unless otherwise stated Notes 2019 2018 2017
Cloud 6,933 4,993 3,769
Software licenses 4,533 4,647 4,872
Software support 11,547 10,981 10,908
Software licenses and support 16,080 15,628 15,780
Cloud and software 23,012 20,622 19,549
Services 4,541 4,086 3,912
Total revenue (A.1), (C.2) 27,553 24,708 23,461
Cost of cloud –2,534 –2,068 –1,660
Cost of software licenses and support –2,159 –2,092 –2,234
Cost of cloud and software –4,692 –4,160 –3,893
Cost of services –3,662 –3,302 –3,158
Total cost of revenue –8,355 –7,462 –7,051
Gross profit 19,199 17,246 16,410
Research and development –4,292 –3,624 –3,352
Sales and marketing –7,693 –6,781 –6,924
General and administration –1,629 –1,098 –1,075
Restructuring (B.6) –1,130 –19 –182
Other operating income/expense, net 18 –20 1
Total operating expenses –23,081 –19,005 –18,584
Operating profit 4,473 5,703 4,877
Other non-operating income/expense, net (C.3) –74 –56 –36
Finance income 787 371 476
Finance costs –589 –418 –288
Financial income, net (C.4) 198 –47 188
Profit before tax (C.2) 4,596 5,600 5,029
Income tax expense (C.5) –1,226 –1,511 –983
Profit after tax 3,370 4,088 4,046
Attributable to owners of parent 3,321 4,083 4,008
Attributable to non-controlling interests 50 6 38
Earnings per share, basic (in €) (C.6) 2.78 3.42 3.35
Earnings per share, diluted (in €) (C.6) 2.78 3.42 3.35
The accompanying Notes are an integral part of these Consolidated Financial Statements.
Under the adoption methods we chose for IFRS 9, 15, and 16, prior-year numbers are not restated to conform to the new accounting policies. For more information, see Note (IN.1).
F-5
Consolidated Statements of Comprehensive Income of SAP Group for the Years Ended December 31
€ millions Notes 2019 2018 2017
Items that will not be reclassified to profit or loss
Remeasurements on defined benefit pension plans, before tax –57 12 29
Income taxes relating to remeasurements on defined benefit pension plans 5 –1 –7
Remeasurements on defined benefit pension plans, net of tax –52 11 22
Other comprehensive income for items that will not be reclassified to profit or loss, net of tax –52 11 22
Items that will be reclassified subsequently to profit or loss
Gains (losses) on exchange differences on translation, before tax 537 910 –2,730
Reclassification adjustments on exchange differences on translation, before tax 0 0 0
Exchange differences, before tax 537 910 –2,730
Income taxes relating to exchange differences on translation 0 0 –2
Exchange differences, net of tax (E.2) 537 910 –2,732
Gains (losses) on remeasuring available-for-sale financial assets, before tax 0 0 114
Reclassification adjustments on available-for-sale financial assets, before tax 0 0 –250
Available-for-sale financial assets, before tax 0 0 –136
Income taxes relating to available-for-sale financial assets 0 0 1
Available-for-sale financial assets, net of tax 0 0 –135
Gains (losses) on cash flow hedges/cost of hedging, before tax –24 –10 81
Reclassification adjustments on cash flow hedges/cost of hedging, before tax 22 –22 –41
Cash flow hedges/cost of hedging, before tax (F.1) –2 –32 39
Income taxes relating to cash flow hedges/cost of hedging 0 9 –10
Cash flow hedges/cost of hedging, net of tax (E.2) –1 –23 29
Other comprehensive income for items that will be reclassified to profit or loss, net of tax 536 887 –2,838
Other comprehensive income, net of tax 483 898 –2,816
Total comprehensive income 3,854 4,986 1,229
Attributable to owners of parent 3,804 4,980 1,191
Attributable to non-controlling interests 50 6 38
F-6
Consolidated Statements of Financial Position of SAP Group as at December 31
€ millions Notes 2019 2018
Cash and cash equivalents (E.3) 5,314 8,627
Other financial assets (D.5), (E.3) 297 448
Trade and other receivables (A.2) 7,908 6,362
Other non-financial assets (A.3), (G.1) 1,188 889
Tax assets 506 293
Total current assets 15,213 16,620
Goodwill (D.2) 29,162 23,736
Intangible assets (D.3) 4,491 3,227
Property, plant, and equipment (D.4), (D.8) 5,496 3,553
Other financial assets (D.5), (E.3) 2,336 1,536
Trade and other receivables (A.2) 129 118
Other non-financial assets (A.3), (G.1) 1,701 1,301
Tax assets 435 397
Deferred tax assets (C.5) 1,251 1,014
Total non-current assets 45,002 34,881
Total assets 60,215 51,502
Trade and other payables 1,581 1,491
Tax liabilities 255 611
Financial liabilities (E.3), (D.8) 3,273 1,125
Other non-financial liabilities (B.3), (B.5), (G.2) 4,818 4,120
Provisions (A.4), (B.4), (B.5), (B.6) 268 110
Contract liabilities (A.1) 4,266 3,028
Total current liabilities 14,462 10,486
Trade and other payables 8 129
Tax liabilities 538 495
Financial liabilities (E.3), (D.8) 12,923 10,553
Other non-financial liabilities (B.3), (B.5), (G.2) 814 501
Provisions (A.4), (B.4), (B.5), (B.6) 478 270
Deferred tax liabilities (C.5) 82 102
Contract liabilities (A.1) 89 88
Total non-current liabilities 14,931 12,138
Total liabilities 29,393 22,624
Issued capital 1,229 1,229
Share premium 545 543
Retained earnings 28,783 27,407
Other components of equity 1,770 1,234
Treasury shares –1,580 –1,580
Equity attributable to owners of parent 30,746 28,832
Non-controlling interests 76 45
Total equity (E.2) 30,822 28,877
Total equity and liabilities 60,215 51,502
Under the adoption method we chose for IFRS 16, prior-year numbers are not restated to conform to the new accounting policies. For more information, see Note (IN.1).
F-7
Consolidated Statements of Changes in Equity of SAP Group for the Years Ended December 31
€ millions Equity Attributable to Owners of Parent Non- Total Equity
Controlling
Issued Share Retained Other Treasury Total Interests
Capital Premium Earnings Components Shares
of Equity
Notes (E.2) (E.2) (E.2) (E.2)
1/1/2017 1,229 599 22,287 3,346 –1,099 26,361 21 26,383
Profit after tax 4,008 4,008 38 4,046
Other comprehensive income 22 –2,838 –2,816 –2,816
Comprehensive income 4,029 –2,838 1,191 38 1,229
Share-based payments –43 –43 –43
Dividends –1,499 –1,499 –66 –1,565
Purchase of treasury shares –500 –500 –500
Reissuance of treasury shares 13 8 22 22

under share-based payments
Hyperinflation –17 –17 –17
Additions from business –33 –33 35 2

combinations
Other changes 2 2 2 4
12/31/2017 1,229 570 24,769 508 –1,591 25,484 31 25,515
Adoption of IFRS 15 83 83 83
Adoption of IFRS 9 135 –160 –25 –25
1/1/2018 1,229 570 24,987 347 –1,591 25,542 31 25,573
Profit after tax 4,083 4,083 6 4,088
Other comprehensive income 11 887 898 898
Comprehensive income 4,093 887 4,980 6 4,986
Share-based payments –40 –40 –40
Dividends –1,671 –1,671 –13 –1,684
Reissuance of treasury shares 13 11 24 24

under share-based payments
Shares to be issued 7 7 7
Changes in non-controlling 0 19 19
interests
Other changes –2 –2 3 1
12/31/2018 1,229 543 27,407 1,234 –1,580 28,832 45 28,877
Adoption of IFRS 16 –71 –71 –71
1/1/2019 1,229 543 27,336 1,234 –1,580 28,761 45 28,807
Profit after tax 3,321 3,321 50 3,370
Other comprehensive income –52 536 483 483
Comprehensive income 3,268 536 3,804 50 3,854
Share-based payments 2 2 2
Dividends –1,790 –1,790 –19 –1,810
Other changes –2 –2 0 –2
12/31/2019 1,229 545 28,783 1,770 –1,580 30,746 76 30,822
The accompanying Notes are an integral part of these Consolidated Financial Statements. Under the adoption methods we chose for IFRS 9, 15, and 16, prior -year numbers are not restated
to conform to the new accounting policies. For more information, see Note (IN.1).
F-8
Consolidated Statements of Cash Flows of SAP Group for the Years Ended December 31
€ millions Notes 2019 2018 2017
Adjustments to reconcile profit after tax to net cash flow from operating activities:
Depreciation and amortization (D.2)–(D.4) 1,872 1,362 1,272
Share-based payment expense (B.3) 1,835 830 1,120
Income tax expense (C.5) 1,226 1,511 983
Financial income, net (C.4) –198 47 –188
Decrease/increase in allowances on trade receivables 14 –67 –32
Other adjustments for non-cash items –54 3 –9
Decrease/increase in trade and other receivables –1,469 136 –309
Decrease/increase in other assets –583 –477 –325
Increase/decrease in trade payables, provisions, and other liabilities 328 240 63
Increase/decrease in contract liabilities 984 –561 718
Share-based payments –1,257 –971 –849
Interest paid –341 –251 –200
Interest received 97 99 88
Income taxes paid, net of refunds –2,329 –1,687 –1,332
Net cash flows from operating activities 3,496 4,303 5,045
Cash flows for business combinations, net of cash and cash equivalents acquired (D.1) –6,215 –2,140 –291
Proceeds from sale of subsidiaries or businesses 61 0 0
Purchase of intangible assets and property, plant, and equipment –817 –1,458 –1,275
Proceeds from sales of intangible assets or property, plant, and equipment 71 57 97
Purchase of equity or debt instruments of other entities –900 –1,013 –2,914
Proceeds from sales of equity or debt instruments of other entities 778 1,488 3,272
Net cash flows from investing activities –7,021 –3,066 –1,112
Dividends paid (E.2) –1,790 –1,671 –1,499
Dividends paid on non-controlling interests –17 –7 –45
Purchase of treasury shares (E.2) 0 0 –500
Proceeds from borrowings (E.3) 3,622 6,368 27
Repayments of borrowings (E.3) –1,309 –1,407 –1,391
Payments of lease liabilities –403 0 0
Transactions with non-controlling interests 0 0 2
Net cash flows from financing activities 102 3,283 –3,406
Effect of foreign currency rates on cash and cash equivalents 110 97 –218
Net decrease/increase in cash and cash equivalents –3,313 4,617 309
Cash and cash equivalents at the beginning of the period (E.3) 8,627 4,011 3,702
Cash and cash equivalents at the end of the period (E.3) 5,314 8,627 4,011
F-9
SAP SE and Subsidiaries
Notes to the Consolidated Financial Statements IFRS
(IN.1) Basis for Preparation adjustment to the opening balance of retained earnings on the date
of initial application while the prior-year figures for the financial
General Information years 2018 and 2017 were not adjusted. For more information about
the application of IFRS 16, see Note (D.8).
The registered seat of SAP SE is in Walldorf, Germany
(Commercial Register of the Lower Court of Mannheim
HRB 719915). The Consolidated Financial Statements for 2019 of Accounting Policies, Management Judgments,
SAP SE and its subsidiaries (collectively, “we,” “us,” “our,” “SAP,” and Sources of Estimation Uncertainty
“Group,” and “Company”) have been prepared in accordance with
International Financial Reporting Standards (IFRS).
How We Present Our Accounting Policies,
We have applied all IFRS standards and interpretations that were
Judgments, and Estimates
effective on and endorsed by the European Union (EU) as at To ease the understanding of our financial statements, we
December 31, 2019. There were no standards or interpretations as at present the accounting policies, management judgments, and
December 31, 2019, impacting our Consolidated Financial sources of estimation uncertainty (hereafter: accounting policies,
Statements for the years ended December 31, 2019, 2018, and 2017, judgments, and estimates) on a given subject together with other
that were effective but not yet endorsed. Therefore, our disclosures related to the same subject in the Note that deals with
Consolidated Financial Statements comply with both, IFRS as issued this subject. Accounting policies, judgments, and estimates that do
by the International Accounting Standards Board (IASB) and IFRS as not relate to a specific subject are presented in the following section.
endorsed by the EU. For easier identification of our accounting policies, judgments,
Our Executive Board approved the Consolidated Financial and estimates, the respective disclosures are marked with the
Statements on February 18, 2020, for submission to our Supervisory symbol and highlighted with a light gray box. They focus on the
Board which approved the Consolidated Financial Statements on accounting choices made within the framework of the prevailing
February 19, 2020. IFRS and refrain from repeating the underlying promulgated IFRS
All amounts included in the Consolidated Financial Statements guidance, unless we consider it particularly important to the
are reported in millions of euros (€ millions) except where otherwise understanding of a Note’s content.
stated. As figures are rounded, numbers presented throughout this
document may not add up precisely to the totals we provide and
percentages may not precisely reflect the absolute figures.
Amounts disclosed in the Notes that are taken directly from our
Consolidated Income Statements or our Consolidated
Statements of Financial Position are marked with the symbols
and , respectively.
Comparative Figures
Effective January 1, 2018, we started to apply IFRS 15 ‘Revenue
from Contracts with Customers’ retrospectively, using the
cumulative catch-up approach and the practical expedient to apply
the new standard only to contracts that were not completed as at
January 1, 2018. On adopting IFRS 15, SAP changed several of its
accounting policies. Under the cumulative catch-up approach, the
amounts for the financial year 2017 presented in the financial
statements were not restated to conform to these policies.
Also effective January 1, 2018, we started to apply IFRS 9
‘Financial Instruments’ using the exception from full retrospective
application. The impact from a different classification of financial
assets, the new impairment rules, and the different treatment of cost
of hedging were recognized in retained earnings of the opening
balance sheet on January 1, 2018. Comparative figures for the
financial year 2017 presented in the financial statements were not
restated.
Effective January 1, 2019 we apply IFRS 16 ‘Leases’ using the
modified retrospective transition approach. We recognized the
cumulative effect of the initial application of the standard as an
F-10
The following table provides an overview of where our accounting General Accounting Policies
policies, management judgments, and estimates are disclosed:
Bases of Measurement
Note Accounting Policies, Judgments, and Estimates The Consolidated Financial Statements have been prepared on the
(IN.1) Basis for Preparation historical cost basis except for the following:
(A.1) Revenue – Derivative financial instruments, liabilities for cash-settled share-
based payments, and financial assets with cash flows that are not
(A.2) Trade and Other Receivables
solely payments of principal or interest are measured at fair
(A.3) Capitalized Cost from Contracts with Customers value.
(A.4) Customer-Related Provisions – Post-employment benefits are measured at the present value of
(B.3) the defined benefit obligations less the fair value of the plan
Share-Based Payments
assets.
(B.4) Pension Plans and Similar Obligations
– Monetary assets and liabilities denominated in foreign currencies
(B.5) Other Employee-Related Obligations are translated at period-end exchange rates.
(B.6) Restructuring – The financial statements of our subsidiaries to which
(C.1) Results of Segments hyperinflation accounting applies.
(C.5) Income Taxes
(D.1) Business Combinations Foreign Currencies and Hyperinflation

(D.2) Goodwill
Income and expenses and operating cash flows of our foreign
subsidiaries that use a functional currency other than the Euro are
(D.3) Intangible Assets
translated at average rates of foreign exchange (FX) computed on a
(D.4) Property, Plant, and Equipment monthly basis. Exchange differences resulting from foreign currency
(D.5) transactions are recognized in other non-operating income/expense,
Equity Investments
net.
(D.8) Adoption of IFRS 16 We apply hyperinflation accounting for our subsidiaries in
(E.3) Liquidity Argentina and Venezuela by restating the financial statements of
these subsidiaries for the current period to account for changes in
(F.1) Financial Risk Factors and Risk Management
the general purchasing power of the local currency based on
(F.2) Fair Value Disclosures on Financial Instruments relevant price indexes at the reporting date. The restated financial
(G.1) Prepaid Expenses and Other Tax Assets statements of our subsidiaries in Argentina and Venezuela are
translated at closing rates.
(G.3) Other Litigation, Claims, and Legal Contingencies
The exchange rates of key currencies affecting the Company
(G.5) Executive and Supervisory Board Compensation were as follows:
Exchange Rates
Equivalent to €1 Middle Rate Annual Average Exchange Rate
as at 12/31
2019 2018 2019 2018 2017
U.S. dollar USD 1.1234 1.1450 1.1196 1.1815 1.1315
Japanese yen JPY 121.94 125.85 122.06 130.41 126.85
Pound sterling GBP 0.8508 0.8945 0.8773 0.8847 0.8770
Swiss franc CHF 1.0854 1.1269 1.1127 1.1549 1.1159
Canadian dollar CAD 1.4598 1.5605 1.4857 1.5302 1.4644
Australian dollar AUD 1.5995 1.6220 1.6106 1.5799 1.4794
Cost Classification which we host our cloud solutions), and costs for third-party hosting
services.
Cost of Cloud and Software

Cost of cloud and software includes the costs incurred in producing Cost of Services
the goods and providing the services that generate cloud and Cost of services includes the costs incurred in providing the services
software revenue. Consequently, this line item primarily includes that generate service revenue. Consequently, this line item primarily
employee expenses relating to these services, amortization of includes employee expenses and related training, system, and
acquired intangibles, fees for third-party licenses, depreciation of our system administration costs, costs for third-party resources, and
property, plant, and equipment (for example, of our data centers in
F-11
costs for enabling mobile information and mobile commerce we have made reasonable estimates about the ultimate resolution of
services. the underlying uncertainties, no assurance can be given that the
final outcome of these matters will be consistent with what is
reflected in our recognized assets, liabilities, revenues, and expenses
Research and Development
and disclosed contingent liabilities. Actual results could differ from
Research and development includes the costs incurred by activities original estimates.
related to the development of software solutions (new products,
updates, and enhancements) including resource and hardware costs
for the development systems. For more information about the The accounting policies that most frequently or significantly require
recognition of internally generated intangible assets from us to make judgments, estimates, and assumptions, and therefore
development, see Note (D.3). are critical to understanding our results of operations, include the
following:
Sales and Marketing Note Significant Accounting Policies
Sales and marketing includes the costs incurred for the selling (A.1) Revenue recognition
activities (such as sales commissions and amortization of (A.2) Valuation of trade receivables
capitalized sales commissions) and marketing activities related to
(A.4), (G.3) Accounting for legal contingencies
our software and cloud solutions and our service portfolio.
(B.3) Accounting for share-based payments
(C.5) Accounting for income taxes

General and Administration
General and administration includes the costs related to finance and (D.1) Accounting for business combinations
administrative functions, human resources, and general (D.2) Accounting for goodwill
management as long as they are not directly attributable to one of
(D.3) Accounting for intangible assets (including recognition of
the other operating expense line items. internally generated intangible assets from development)
Our management periodically discusses these significant

Management Judgments and Sources of
accounting policies with the Audit Committee of our Supervisory
Estimation Uncertainty Board.
The preparation of the Consolidated Financial Statements requires
our management to make judgments, estimates, and assumptions
that affect the application of accounting policies and the reported New Accounting Standards Not Yet Adopted
amounts of assets, liabilities, revenues, and expenses, as well as The IASB has – on top of a new conceptual framework – issued
disclosure of contingent liabilities. various amendments to IFRS standards (such as IFRS 3 (definition
We base our judgments, estimates, and assumptions on historical of a business), and IFRS 9 (benchmark reform)) that are relevant for
and forecast information, and on regional and industry economic SAP but not yet effective. We are currently in the process of
conditions in which we or our customers operate. Changes to these assessing the impact on SAP, but do not expect material effects on
conditions could adversely affect our estimates. Although we believe our financial position or results of operations.
F-12
Section A – Customers
This section discusses disclosures related to contracts with our Services revenue primarily represents fees earned from professional
customers. These include but are not limited to explanations of how consulting services, premium support services, training services,
we recognize revenue, revenue disaggregation, and information and messaging services.
about our trade receivables and customer-related obligations.
Identification of Contract
(A.1) Revenue We frequently enter into multiple contracts with the same customer.
For accounting purposes, we treat these contracts as a single
Accounting for Revenue from Contracts with Customers contract if they are entered into at or near the same time and are
Classes of Revenue economically interrelated. We do not combine contracts with closing
We derive our revenue from fees charged to our customers for the days more than three months apart because we do not consider
use of our hosted cloud offerings, for licenses to our on-premise them being entered into near the same time. Judgment is required in
software products, and for standardized and premium support evaluating whether various contracts are interrelated, which
services, consulting, customer-specific software developments, includes considerations as to whether they were negotiated as a
training, and other services. package with a single commercial objective, whether the amount of
consideration on one contract is dependent on the performance of
Cloud and software revenue, as presented in our Consolidated
the other contract, or if some or all goods in the contracts are a
Income Statements, is the sum of our cloud revenue, our software
single performance obligation.
license revenue, and our software support revenue.
New arrangements with existing customers can be either a new
– Cloud revenue represents fees earned from providing customers
contract or the modification of prior contracts with the customer.
with any of the following:
Our respective judgment in making this determination considers
▪ Software as a service (SaaS), that is, a right to use software whether there is a connection between the new arrangement and
functionality (including standard functionalities and custom the pre-existing contracts, whether the goods and services under
cloud applications and extensions) in a cloud-based the new arrangement are highly interrelated with the goods and
infrastructure hosted by SAP or third parties engaged by SAP, services sold under prior contracts, and how the goods and services
where the customer does not have the right to terminate the under the new arrangement are priced. In determining whether a
hosting contract and take possession of the software to either change in transaction price represents a contract modification or a
run it on its own IT infrastructure or to engage a third-party change in variable consideration, we examine whether the change in
provider unrelated to SAP to host and manage the software; price results from changing the contract or from applying
SaaS also includes transaction and agent fees for transactions unchanged existing contract provisions.
that customers of our network business execute on our cloud-
based transaction platforms.
Identification of Performance Obligations
▪ Platform as a service (PaaS), that is, access to a cloud-based
Our customer contracts often include various products and services.
infrastructure to develop, run, and manage applications
Typically, the products and services outlined in the Classes of
▪ Infrastructure as a service (IaaS), that is, hosting and related Revenue section qualify as separate performance obligations and
application management services for software hosted by SAP the portion of the contractual fee allocated to them is recognized
or third parties engaged by SAP separately. Judgment is required, however, in determining whether a
▪ Premium cloud support beyond the regular support that is good or service is considered a separate performance obligation. In
embedded in the basic cloud subscription fees particular for our professional services and implementation
– Software license revenue represents fees earned from the sale or activities, judgment is required to evaluate whether such services
license of software to customers for use on the customer’s significantly integrate, customize, or modify the on-premise software
premises, in other words, where the customer has the right to or cloud service to which they relate. In this context, we consider the
take possession of the software for installation on the customer’s nature of the services and their volume relative to the volume of the
premises or on hardware of third-party hosting providers on-premise software or cloud service to which they relate. In general,
unrelated to SAP (on-premise software). Software license the implementation services for our cloud services go beyond pure
revenue includes revenue from both the sale of our standard setup activities and qualify as separate performance obligations.
software products and customer-specific on-premise-software Similarly, our on-premise implementation services and our custom
development agreements. development services typically qualify as separate performance
obligations. Non-distinct goods and services are combined into one
– Software support revenue represents fees earned from providing
distinct bundle of goods and services (combined performance
customers with standardized support services that comprise
obligation).
unspecified future software updates, upgrades, and
enhancements as well as technical product support services for When selling goods or services, we frequently grant customers
on-premise software products. options to acquire additional goods or services (for example,
renewals of renewable offerings, or additional volumes of purchased
software). We apply judgment in determining whether such options
F-13
provide a material right to the customer that the customer would not exercise. In estimating these probabilities, we apply judgment
receive without entering into that contract (material right options). considering historical exercise patterns.
In this judgment, we consider, for example, whether the options We review the SSPs periodically or whenever facts and
entitle the customer to a discount that exceeds the discount granted circumstances change to ensure the most objective input
for the respective goods or services sold together with the option. parameters available are used.
Determination of Transaction Price Recognition of Revenue

We apply judgment in determining the amount to which we expect to Cloud revenue is recognized over time as the services are performed.
be entitled in exchange for transferring promised goods or services Where our performance obligation is the grant of a right to
to a customer. This includes estimates as to whether and to what continuously access and use a cloud offering for a certain term,
extent subsequent concessions or payments may be granted to revenue is recognized based on time elapsed and thus ratably over
customers and whether the customer is expected to pay the this term.
contractual fees. In this judgment, we consider our history both with
the respective customer and more broadly.
Software revenue is recognized at a point in time or over time
Our typical cloud services do not provide the customer with a
depending on whether we deliver standard software, customer-
software license because the customer does not have the right to
specific software, or software subscription contracts that combine
terminate the hosting contract and take possession of the software.
the delivery of software and the obligation to deliver, in the future,
Consequently, cloud fees that are based on transaction volumes are
unspecified software products:
considered in the transaction price based on estimates rather than
being accounted for as sales-based license royalties. – Licenses for our standard on-premise software products are
typically delivered by providing the customer with access to
Only very rarely do our contracts include significant financing
download the software. The license period starts when such
components. We do not account for financing components if the
access is granted. We recognize revenue for these on-premise
period between when SAP transfers the promised goods or services
licenses at the point in time when the customer has access to
to the customer and when the customer pays for those goods or
and thus control over the software. In judging whether our on-
services is one year or less.
premise software offerings grant customers a right to use, rather
than a right to access, our intellectual property, we have
Allocation of Transaction Price considered the usefulness of our software without subsequent
We have established a hierarchy to identify the standalone selling updates to it.
prices (SSPs) that we use to allocate the transaction price of a – Typically, our customer-specific on-premise software
customer contract to the performance obligations in the contract. development agreements:
– Where standalone selling prices for an offering are observable ▪ Are for software developed for specific needs of individual
and reasonably consistent across customers (that is, not highly customers and therefore it does not have any alternative use
variable), our SSP estimates are derived from our respective for us
pricing history. Typically, our standardized support offerings and
▪ Provide us with an enforceable right to payment for
our professional service offerings follow this approach.
performance completed to date
– Where sales prices for an offering are not directly observable or
For such development agreements, we recognize revenue over
highly variable across customers, we use estimation techniques.
time as the software development progresses. Judgment is
For renewable offerings with highly variable pricing, these
required in identifying an appropriate method to measure the
techniques consider the individual contract’s expected renewal
progress toward complete satisfaction of such performance
price as far as this price is substantive. Typically, our cloud
obligations. We typically measure progress of our development
offerings follow this approach. For non-renewable offerings, these
agreements based on the direct costs incurred to date in
estimations follow a cost-plus-margin approach.
developing the software as a percentage of the total reasonably
– For offerings that lack renewals, have highly variable pricing, and estimated direct costs to fully complete the development work
lack substantial direct costs to estimate based on a cost-plus- (percentage-of-completion method). This method of measuring
margin approach, we allocate the transaction price by applying a progress faithfully depicts the transfer of the development
residual approach. We use this technique in particular for our services to the customer, as substantially all of these costs are
standard on-premise software offerings. cost of the staff or third parties performing the development
Judgment is required when estimating SSPs. To judge whether the work. In estimating the total cost to fully complete the
historical pricing of our goods and services is highly variable, we development work, we consider our history with similar projects.
have established thresholds of pricing variability. For judging – For agreements that combine the delivery of software and the
whether contractual renewal prices are substantive, we have obligation to deliver, in the future, unspecific software products,
established floor prices that we use as SSPs whenever the we recognize revenue at a point in time for licenses that are made
contractual renewal prices are below these floor prices. In judging immediately accessible to the customer. We recognize revenue
whether contracts are expected to renew at their contractual ratably over the term of the software subscription contract for
renewal prices, we rely on our respective renewal history. The SSPs the unspecified software products, as our performance obligation
of material right options depend on the probability of option
F-14
is to stand ready to deliver such products on a when-and-if-
available basis. Contract Balances
We recognize trade receivables for performance obligations satisfied
Software support revenue is typically recognized based on time over time gradually as the performance obligation is satisfied and in
elapsed and thus ratably over the term of the support arrangement. full once the invoice is due. Judgment is required in determining
Under our standardized support services, our performance whether a right to consideration is unconditional and thus qualifies
obligation is to stand ready to provide technical product support and as a receivable.
unspecified updates, upgrades, and enhancements on a when-and- Contract liabilities primarily reflect invoices due or payments
if-available basis. Our customers simultaneously receive and received in advance of revenue recognition.
consume the benefits of these support services as we perform.
Typically, we invoice fees for on-premise standard software on
contract closure and software delivery. Periodic fixed fees for cloud
Service revenue is typically recognized over time. Where we stand subscription services, software support services, and other multi-
ready to provide the service (such as access to learning content), we period agreements are typically invoiced yearly or quarterly in
recognize revenue based on time elapsed and thus ratably over the advance. Such fee prepayments account for the majority of our
service period. Consumption-based services (such as separately contract liability balance. Fees based on actual transaction volumes
identifiable consulting services and premium support services, for cloud subscriptions and fees charged for non-periodical services
messaging services, and classroom training services) are recognized are invoiced as the services are delivered. While payment terms and
over time as the services are utilized, typically following the conditions vary by contract type and region, our terms typically
percentage-of-completion method or ratably. When using the require payment within 30 to 60 days.
percentage-of-completion method, we typically measure the
progress toward complete satisfaction of the performance obligation Geographic Information
in the same way and with the same reasoning and judgment as we The amounts for revenue by region in the following tables are
do for customer-specific on-premise software development based on the location of customers. The regions in the following
agreements. We apply judgment in determining whether a service table are EMEA (Europe, Middle East, and Africa), Americas (North
qualifies as a stand-ready service or as a consumption-based America and Latin America), and APJ (Asia Pacific Japan).
service.
Total Revenue by Region
Revenue for combined performance obligations is recognized over € millions 2019 2018 2017
the longest period of all promises in the combined performance Germany 3,948 3,658 3,352
obligation.
Rest of EMEA 8,158 7,446 7,063
EMEA 12,105 11,104 10,415

Judgment is also required to determine whether revenue is to be
United States 9,085 7,880 7,436
recognized at a point in time or over time. For performance
obligations satisfied over time, we need to measure progress using Rest of Americas 2,109 1,832 1,911
the method that best reflects SAP’s performance. When using cost Americas 11,194 9,713 9,347
incurred as a measure of progress for recognizing revenue over time,
Japan 1,180 963 885
we apply judgment in estimating the total cost to satisfy the
Rest of APJ 3,074 2,928 2,814
performance obligation.
All of the judgments and estimates mentioned above can APJ 4,254 3,891 3,699
significantly impact the timing and amount of revenue to be SAP Group 27,553 24,708 23,461
recognized.
Major Revenue Classes by Region

€ millions Cloud Revenue Cloud and Software Revenue
2019 2018 2017 2019 2018 2017
EMEA 2,115 1,441 1,029 10,211 9,339 8,759
Americas 3,945 2,941 2,321 9,172 7,973 7,666
APJ 872 611 419 3,629 3,310 3,124
SAP Group 6,933 4,993 3,769 23,012 20,622 19,549
For information about the breakdown of revenue by segment and segment revenue by region, see Note (C.1).
F-15
Remaining Performance Obligations (A.2) Trade and Other Receivables
Amounts of a customer contract’s transaction price that are
Accounting for Trade and Other Receivables
allocated to the remaining performance obligations represent
contracted revenue that has not yet been recognized. They include We measure trade receivables and contract assets from contracts
amounts recognized as contract liabilities and amounts that are with customers at amortized cost less expected credit losses. We
contracted but not yet due. account for expected credit losses by recording an allowance on a
The transaction price allocated to performance obligations that portfolio basis. We apply the simplified impairment approach in that,
are unsatisfied or partially unsatisfied as at December 31, 2019, is on initial measurement of the receivables, we consider all credit
€35.5 billion (December 31, 2018: €31.3 billion). This amount mostly losses that are expected to occur during the lifetime of the
comprises obligations to provide software support or cloud receivables. We use a provision matrix to estimate these losses.
subscriptions services, as the respective contracts typically have Additionally, we recognize allowances for individual receivables if
durations of one or multiple years. there is objective evidence of credit impairment.
The majority of this amount is expected to be recognized as Account balances are written off either partially or in full if we judge
revenue over the next 12 months following the respective balance that the likelihood of recovery is remote.
sheet date. This estimate is based on our best judgment, as it needs
For information about how the default risk for trade receivables is
to consider estimates of possible future contract modifications. The
analyzed and managed, how the loss rates for the provision matrix
amount of transaction price allocated to the remaining performance
are determined, how credit impairment is determined and what our
obligations, and changes in this amount over time, are impacted by,
criteria for write-offs are, see the section on credit risk in Note (F.1).
among others:
– Currency fluctuations In our Consolidated Income Statements, net gains/losses include
– The contract period of our cloud and software support contracts income/expenses from expected credit loss allowances from
remaining at the balance sheet date and thus by the timing of applying the provision matrix, from credit-impaired customer
contract renewals balances, and from write-offs and related reversals which are
included in other operating income/expense, net. Gains/losses from
Performance Obligations Satisfied in Previous foreign currency exchange rate fluctuations are included in Other
Years non-operating income/expense, net.
Revenue recognized in the reporting period for performance Determining our expected credit loss allowance involves significant
obligations satisfied in earlier periods was €77 million judgment. In this judgment, we primarily consider our historical
(December 31, 2018: €132 million), mainly resulting from changes in experience with credit losses in the respective provision matrix risk
estimates related to percentage-of-completion-based contracts and class and current data on overdue receivables. We expect that our
changes in estimates of variable considerations. historical default rates represent a reasonable approximation for
future expected customer defaults. Besides historical data, our
Contract Balances judgment used in developing the provision matrix considers
Contract liabilities as at December 31, 2019, were €4.4 billion reasonable and supportable forward-looking information (for
(December 31, 2018: €3.1 billion). example, changes in country risk ratings, and fluctuations in credit
Increases in contract liabilities mainly result from billing and default swaps of the countries in which our customers are located).
invoices becoming due (€9.0 billion). Decreases in contract liabilities The assessment of whether a receivable is collectible involves the
mainly result from satisfying performance obligations (€8.0 billion). use of judgment and requires us to make assumptions about
The Qualtrics acquisition contributed to the increase in the contract customer defaults that could change significantly.
liabilities balance (for more information, see Note (D.1)).
In applying this judgment, we evaluate available information about a
The amount of revenue recognized in the reporting period that
particular customer’s financial situation to determine whether it is
was included in the contract liability balance at the beginning of the
probable that a credit loss had occurred and, if so, whether the
reporting period was €2.6 billion (December 31, 2018: €3.2 billion).
amount of the loss is reasonably estimable. If it is, an allowance for
that specific account is then necessary. Basing the expected credit
loss allowance for the remaining receivables primarily on our
historical loss experience likewise requires judgment, as history may
not be indicative of future development. Also, including reasonable
and supportable forward-looking information in the loss rates of the
expected credit loss allowance requires judgment, as they may not
provide a reliable prognosis for future development.
F-16
Trade and Other Receivables
Current Non-Current Total Current Non-Current Total
Trade receivables, net 7,561 21 7,582 6,182 6 6,188
Other receivables 346 108 454 180 112 293
Total 7,908 129 8,037 6,362 118 6,480
Contract assets as at December 31, 2019, were €234 million Costs to Fulfill Customer Contracts
(December 31, 2018: €116 million). Capitalized costs incurred to fulfill customer contracts mainly
For more information about financial risk, how we manage credit consist of direct costs for custom cloud development contracts as
risk, and details of our trade receivables and contract assets far as these costs are not in scope of other standards than IFRS 15.
allowances, see Note (F.1). These costs are amortized after completion of the development on a
straight-line basis over the expected life of the cloud subscription
contract and including expected renewals. Judgment is required in
(A.3) Capitalized Cost from Contracts evaluating whether costs are direct or indirect and in estimating
with Customers contract lives. Derived from our respective history, the amortization
period is typically six years.
Costs of Obtaining Customer Contracts
Amortization of capitalized costs to fulfill contracts for custom cloud
Capitalized costs from customer contracts are classified as Other
applications and extensions is included in the cost of cloud.
non-financial assets in our statement of financial position.
The capitalized assets for the incremental costs of obtaining a
customer contract primarily consist of sales commissions earned by Capitalized Cost from Contracts with Customers
our sales force. Judgment is required in determining the amounts to
be capitalized, particularly where the commissions are based on
Current Non- Total Current Non- Total
cumulative targets and where commissions relate to multiple
Current Current
performance obligations in one customer contract. We capitalize
such cumulative target commissions for all customer contracts that Capitalized cost 414 1,318 1,732 326 1,006 1,332
of obtaining
count towards the cumulative target but only if nothing other than customer
obtaining customer contracts can contribute to achieving the contracts
cumulative target. Commissions for contracts with multiple Capitalized cost 66 117 183 35 66 101
performance obligations or for probable renewals thereof are to fulfill customer
contracts
allocated to these performance obligations and probable renewals
relative to the respective standalone selling price. Capitalized 480 1,435 1,915 361 1,072 1,433
contract cost
Typically, we either do not pay sales commissions for customer
Other non- 1,188 1,701 2,889 889 1,301 2,191
contract renewals or such commissions are not commensurate with
financial assets
the commissions paid for new contracts. Thus, the commissions
Capitalized 40 84 66 41 82 65
paid for renewable new contracts also relate to expected renewals of
contract cost
these contracts. Consequently, we amortize sales commissions paid as % of other
for new customer contracts on a straight-line basis over the non-financial
assets
expected contract life including probable contract renewals.
Judgment is required in estimating these contract lives. In exercising
this judgment, we consider our respective renewal history adjusted
Amortization Expense
for indications that the renewal history is not fully indicative of future
renewals. The amortization periods range from 18 months to 12
years depending on the type of offering. In 2019, the amortization Capitalized cost of obtaining customer contracts 367 231
period for commissions granted for on premise support contracts Capitalized cost to fulfill customer contracts 81 50
was adjusted from eight years to 12 years based on changes in our
renewal history. Amortization of the capitalized costs of obtaining
customer contracts is classified as sales and marketing expense.
We expense incremental costs of obtaining a customer contract as
incurred if we expect an amortization period of one year or less.
F-17
(A.4) Customer-Related Provisions – Determining whether the amount of an obligation is reliably
estimable
Expected Contract Losses
– Estimating the amount of the expenditure required to settle the
Customer-related provisions mainly include expected contract present obligation
losses. We adjust these provisions as further information becomes
At the end of each reporting period, we reassess the potential
available and as circumstances change. Non-current provisions are
obligations related to our pending claims and litigation and adjust
measured at the present value of their expected settlement amounts
our respective provisions to reflect the current best estimate. In
as at the reporting date.
addition, we monitor and evaluate new information that we receive
Customer-Related Litigation and Claims after the end of the respective reporting period, but before the
Furthermore, these provisions also include obligations resulting from Consolidated Financial Statements are authorized for issue, to
customer-related litigation and claims. We are currently confronted determine whether this provides additional information regarding
with various claims and legal proceedings, including claims that conditions that existed at the end of the reporting period. Changes
relate to customers demanding indemnification for proceedings to the estimates and assumptions underlying our accounting for
initiated against them based on their use of SAP software, and legal contingencies, and outcomes that differ from these estimates
occasionally claims that relate to customers being dissatisfied with and assumptions, could require material adjustments to the carrying
the products and services that we have delivered to them. The amounts of the respective provisions recorded and additional
obligations arising from customer-related litigation and claims provisions. The expected timing or amounts of any outflows of
comprise cases in which we indemnify our customers against economic benefits resulting from these lawsuits and claims is
liabilities arising from a claim that our products infringe a third uncertain and not estimable, as they generally depend on the
party’s patent, copyright, trade secret, or other proprietary rights. duration of the legal proceedings and settlement negotiations
Due to uncertainties relating to these matters, provisions are based required to resolve the litigation and claims and the unpredictability
on the best information available. Significant judgment is required in of the outcomes of legal disputes in several jurisdictions.
the determination of whether a provision is to be recorded and what Contingent liabilities exist in respect of customer-related
the appropriate amount for such provision should be. Notably, litigation and claims for which no provision has been recognized. It is
judgment is required in the following: not practicable to estimate the financial impact of these contingent
– Determining whether an obligation exists liabilities due to the uncertainties around these lawsuits and claims
as outlined above.
– Determining the probability of outflow of economic benefits
F-18
Section B – Employees
This section provides financial insights into our employee benefit (B.1) Employee Headcount
arrangements. It should be read in conjunction with the
compensation disclosures for key management personnel in The following table provides an overview of employee headcount,
Note (G.5) as well as SAP’s Compensation Report. broken down by function and by the regions EMEA (Europe, Middle
East, and Africa), Americas (North America and Latin America), and
APJ (Asia Pacific Japan).
Employee Headcount by Region and Function

Full-time 12/31/2019 12/31/2018 12/31/2017
equivalents
EMEA Ame- APJ Total EMEA Ame- APJ Total EMEA Ame- APJ Total
ricas ricas ricas
Cloud and software 6,501 4,426 5,361 16,288 6,341 4,268 5,374 15,983 5,869 3,895 4,719 14,482
Services 8,250 6,018 5,971 20,239 8,120 5,736 5,620 19,476 7,536 4,878 4,965 17,379
Research and 12,710 5,793 9,131 27,634 12,478 5,651 8,930 27,060 11,349 5,250 8,273 24,872
development
Sales and 10,205 10,368 5,209 25,781 9,843 9,452 4,918 24,213 9,196 9,169 4,854 23,219
marketing
General and 3,161 2,123 1,246 6,530 2,906 1,970 1,147 6,024 2,676 1,781 1,047 5,504
administration
Infrastructure 2,220 984 654 3,859 2,160 951 631 3,742 1,732 855 501 3,087
SAP Group 43,048 29,712 27,571 100,330 41,848 28,029 26,620 96,498 38,357 25,827 24,359 88,543
(12/31)
Thereof 338 1,638 137 2,113 657 952 434 2,043 149 133 7 289
acquisitions
SAP Group 42,697 29,368 27,092 99,157 40,496 27,454 25,759 93,709 37,512 25,459 24,029 86,999
(months' end
average)
(B.2) Employee Benefits Expenses (B.3) Share-Based Payments

Accounting for Share-Based Payments
Components of Employee Benefits Expenses
Classification in the Income Statement
€ millions 2019 2018 2017 Share-based payments cover cash-settled and equity-settled
Salaries 10,031 9,025 8,693 awards issued to our employees. The respective expenses are
recognized as employee benefits and classified in our Consolidated
Social security expenses 1,477 1,339 1,281
Income Statements according to the activities that the employees
Share-based payment expenses 1,835 830 1,120 perform. Where we economically hedge our exposure to cash-settled
Pension expenses 369 330 312 awards, changes in the fair value of the respective hedging
instruments are also recognized as employee benefits expenses in
Employee-related restructuring expenses 1,111 19 180
profit or loss. The fair values of hedging instruments are based on
Termination benefits outside of restructuring 47 52 57 market data reflecting current market expectations. For more
plans
information about the equity price risk, see Note (F.1).
Employee benefits expenses 14,870 11,595 11,643 Valuation, Judgment, and Sources of Estimation Uncertainty
We use certain assumptions in estimating the fair values for our
share-based payments, including expected share price volatility and
expected award life (which represents our estimate of the average
remaining life until the awards are exercised or expire unexercised).
In addition, the final payout for plans also depends on the
achievement of performance indicators and on our share price on
the respective exercise dates. Changes to these assumptions and
outcomes that differ from these assumptions could require material
adjustments to the carrying amount of the liabilities we have
F-19
recognized for these share-based payments. The fair value of the a) Cash-Settled Share-Based Payments
share units granted under the LTI 2016 Plan are dependent on our
performance against a group of peer companies (Peer Group Index), Our major share-based payment plans are described below.
the volatility, and the expected correlation between the price of the Long-Term Incentive 2016 Plan (LTI 2016 Plan)
index and our share price.
The purpose of the LTI 2016 Plan is to reward our Executive
We believe that the expected volatility is the most sensitive Board members for the annual achievement of SAP’s operating
assumption we use in estimating the fair values of our share options. profit (non-IFRS, at constant currency) targets, to ensure long-term
Regarding future payout under our cash-settled plans, the SAP share retention of our Executive Board members, and to reward them for
price is the most relevant factor. With respect to our LTI 2016 Plan, the long-term SAP share price performance as compared to its main
we believe that future payout will be significantly impacted not only peer group (Peer Group).
by our share price but also by the relative performance against the The virtual share program came into effect on January 1, 2016. An
Peer Group Index. Changes in these factors could significantly affect LTI tranche is granted annually and has a term of four years (2016–
the estimated fair values as calculated by the valuation model, and 2019 tranches). Each grant starts with determining a grant amount
the future payout. in euros. The grant amount is based on the Executive Board
Under certain programs, we grant our employees discounts on members’ contractual LTI target amount and the operating profit
purchases of SAP shares. Since those discounts are not dependent target achievement for the previous year. The Supervisory Board
on future services to be provided by our employees, the discount is sets the grant amount at a level between 80% and 120% of the
recognized as an expense when the discounts are granted. contractual LTI target amount, taking into account the operating
Presentation in the Statements of Cash Flows profit target achievement. This grant amount is converted into
virtual shares, referred to as share units, by dividing the grant
Unlike in previous years, we present the payments of our share-
amount by the grant price. The grant price is the arithmetic mean of
based payment plans separately in our Statements of Cash Flows
the XETRA closing prices of the SAP share on the 20 trading days
under cash flows from operating activities. As a result, the changes
following the publication of SAP’s fourth-quarter results.
in other assets and in other liabilities presented in the reconciliation
All share units granted in this way, comprising 60% Performance
of operating cash flow no longer consider share-based payment-
Share Units (PSUs) and 40% Retention Share Units (RSUs), have a
related assets or liabilities. Prior-period numbers were adjusted to
vesting period of approximately four years. At the end of the vesting
conform to the new presentation.
period, the corresponding share units are non-forfeitable. The
payout price used for the settlement is the arithmetic mean of the
The operating expense line items in our income statement XETRA closing prices of the SAP share on the 20 trading days
include the following share-based payment expenses: following the publication of SAP’s fourth-quarter results subsequent
to the end of the vesting period. The payout price is capped at 300%
Share-Based Payment Expenses by Functional
of the grant price. The LTI tranche is cash-settled and paid in euros
Area
after the Annual General Shareholders’ Meeting of the
€ millions 2019 2018 2017 corresponding year.
Cost of cloud and software 138 78 115 The number of PSUs ultimately paid out depends on the
performance of the SAP share – absolute and relative to the Peer
Cost of services 246 142 158
Group Index. In contrast, the final number of RSUs is fixed. SAP’s
Research and development 429 210 269 absolute share price performance is measured by comparing the
Sales and marketing 562 312 442 grant price against the payout price. If the SAP share price
performance equals the Peer Group Index performance over the
General and administration 461 88 135
same period, the performance factor is set at 100%. If the SAP share
Share-based payment expenses 1,835 830 1,120 price performs better than the Peer Group Index (measured as
difference between SAP share price performance and Peer Group
Thereof cash-settled share- 1,664 674 963
based payments Index performance), the performance factor is increased by the
percentage point of the outperformance of the SAP share price. The
Thereof equity-settled share- 171 156 157
based payments percentage point is doubled if, additionally, the payout price is higher
than the grant price. The performance factor is capped at 150%. If
the Peer Group Index performs better than the SAP share price, the
In 2019, we paid €79 million in share-based payments that
performance factor is decreased by the percentage point of the
became fully vested because of terminations due to operational
outperformance of the Peer Group Index. All PSUs lapse if the
reasons in connection with our restructuring plan. These payments
performance factor is below 50%.
as well as the expense portion initially allocated to future services
If an Executive Board member’s service contract is terminated
were classified as share-based payments and not as restructuring
before the end of the third year following the year in which the share
expenses.
units were granted, both the RSUs and PSUs are forfeited in whole or
in part, depending on the circumstances of the relevant resignation
from office or termination of the service contract.
F-20
SAP Stock Option Plan 2010 (SOP 2010) Qualtrics Cash-Settled Awards Replacing Pre-
Under the SOP 2010, we granted virtual stock options to Acquisition Qualtrics Awards (Qualtrics Rights)
members of the Senior Leadership Team, Global Executives, In conjunction with the acquisition of Qualtrics in 2019, under the
employees with an exceptional rating, and high potentials between terms of the acquisition agreement, SAP exchanged unvested
2010 and 2015, and only in 2010 and 2011 to members of the Restricted Share Awards (RSAs), Restricted Share Units (RSUs), and
Executive Board. Performance Share Units (PSUs), and options held by employees of
The grant base value was based on the average closing price of Qualtrics into cash-settled share-based payment awards of SAP
the SAP share over the five trading days prior to the Executive Board (Qualtrics Rights).
resolution date. The replacement awards closely mirror the terms of the replaced
The options granted under the SOP 2010 give the employees the awards except that:
right to receive a certain amount of cash by exercising the options. – –The replaced awards were planned to be settled by issuing
After a three-year vesting period (four years for members of the equity instruments, whereas the replacement awards are settled
Executive Board), the plan provides for 11 predetermined exercise in cash.
dates every calendar year (one date per month except for April) until – –RSAs, RSUs, PSUs, and options granted before 2018 and
the rights lapse six years after the grant date (seven years for unvested as at the closing date of the Qualtrics acquisition were
members of the Executive Board). Employees can exercise their converted into the right to receive, at the originally agreed vesting
options only if they are employed by SAP; if they leave the Company, dates, an amount in cash equal to the number of RSAs and RSUs
the options forfeit. Executive Board members’ options are non- held as at the vesting date multiplied by US$35.00 per share. The
forfeitable once granted – if the service agreement ends in the grant respective amount of options equals the number of options held
year, the number of options is reduced pro rata temporis. Any as at the vesting date multiplied by US$35.00 per share less the
options not exercised up to the end of their term expire. originally-agreed exercise price.
The exercise price is 110% of the grant base value, which is – –RSUs, PSUs, and options granted in 2018 and thereafter and
€59.85 for the 2013 tranche, €60.96 for the 2014 tranche, and unvested as at the closing date of the Qualtrics acquisition were
€72.18 for the 2015 tranche. The weighted average exercise price of converted into awards that are indexed to SAP’s share price as
exercised options in 2019 was €66.42 (2018: €67.59) and of follows: SAP’s consideration per share (US$35.00) was divided
outstanding options at year end 2019 was €69.15 (2018: €67.62). by the average closing price of the SAP share over the five trading
Monetary benefits will be capped at 100% of the exercise price. days on the closing date (€91.28), translated into US$
(US$103.75), and the result (Equity Award Exchange Ratio of
Restricted Stock Unit Plan Including Move SAP
0.3373) was multiplied by the average closing price of the SAP
Plan (RSU Plan)
share over the five trading days prior to the exercise or vesting
To retain and motivate executives and certain employees, we date.
grant virtual shares representing a contingent right to receive a cash There were 24.7 million unvested RSAs, RSUs, PSUs, and options
payment determined by the SAP share price and the number of as at the closing date of the Qualtrics acquisition, representing a fair
share units that ultimately vest. value of €793 million after considering expected forfeitures
Granted share units will vest in different tranches, either: dependent on grant dates and remaining vesting periods. Of the
– Over a one-to-three-year service period only, or total fair value, €237 million was allocated to consideration
– Over a three-year service period and upon achieving certain key transferred, while €556 million was allocated to future services to be
performance indicators (KPIs) provided. Post-acquisition compensation expense will be recognized
The number of performance-based share units (PSUs) that will as the awards vest over the remainder of the original vesting terms.
vest under the different tranches were contingent upon achievement The remaining vesting periods for such Qualtrics Rights are in a
of the operating profit (non-IFRS, at constant currency) KPI target in range of up to five years from closing date.
the year of grant. Depending on performance, the number of PSUs The unvested RSUs include grants as at the closing date of
vesting ranges between 0% and 200% of the number initially 6.1 million replacement RSUs. These RSUs have a two-year service
granted. Performance against the KPI target was 118.7% in 2019 period.
(2018: 106.7%; 2017: 78.2%). All share units are paid out in cash From January 23, 2019, through December 31, 2019, 7.8 million
upon vesting. Qualtrics Rights vested. The unrecognized expense related to
Qualtrics Rights was €225 million as at December 31, 2019, and will
be recognized over a remaining vesting period of up to four years.
F-21
The valuation of our outstanding cash-settled plans was based on the following parameters and assumptions:
Fair Value and Parameters Used at Year End 2019 for Cash-Settled Plans
€, unless otherwise stated LTI 2016 Plan SOP 2010 RSU Plan Qualtrics
(2016–2019 (2014–2015 (2016–2019 Rights
Tranches) Tranches) Tranches)
Weighted average fair value as at 12/31/2019 94.06 49.51 118.72 37.55
Information how fair value was measured at measurement date
Option pricing model used Monte Carlo Monte Carlo Other1) Other 1)
Share price 120.32 120.32 120.32 120.32
Risk-free interest rate, depending on maturity (in %) –0.68 to –0.57 –0.25 to –0.08 –0.68 to –0.31 –0.55 to –0.35
Expected volatility (in %) 20.4 to 24.8 27.4 to 35.8 NA NA
Expected dividend yield (in %) 1.26 1.26 1.26 1.26
Weighted average remaining life of awards outstanding as at 12/31/2019 1.9 0.3 1.0 1.7
(in years)
1)
For these awards, the fair value is calculated by subtracting the net present value of expected future dividend payments, if any, unt il maturity of the respective award from
the prevailing share price as at the valuation date.
Fair Value and Parameters Used at Year End 2018 for Cash-Settled Plans
€, unless otherwise stated LTI 2016 Plan SOP 2010 RSU Plan LTI 2015 Plan
(2016–2018 (2013–2015 (2015–2018 (2015
Tranches) Tranches) Tranches) Tranche)
Weighted average fair value as at 12/31/2018 65.89 20.67 85.24 86.93
Information how fair value was measured at measurement date
Option pricing model used Monte Carlo Monte Carlo Other1) Other 1)
Share price 86.93 86.93 86.93 86.93
Risk-free interest rate, depending on maturity (in %) –0.70 to –0.55 –0.67 to –0.25 –0.69 to –0.31 NA
Expected volatility (in %) 17.9 to 21.4 22.8 to 38.5 NA NA
Expected dividend yield (in %) 1.63 1.63 1.63 NA
Weighted average remaining life of awards outstanding as at 12/31/2018 2.4 1.2 1.0 0.1
(in years)
1)
For these awards, the fair value is calculated by subtracting the net present value of expected future dividend payments, if any, until maturity of the respective award
from the prevailing share price as at the valuation date.
For the SOP 2010, expected volatility of the SAP share price is and the expected correlation of the SAP share price and the index
based on a blend of implied volatility from traded options with price of 38% to 40% (2018: 36% to 42%) are based on historical
corresponding remaining lives and exercise prices as well as data for the SAP share price and index price.
historical volatility with the same expected life as the options The expected remaining life of the options reflects both the
granted. contractual term and the expected, or historical, exercise behavior.
For the LTI 2016 Plan valuation, the Peer Group Index price on The risk-free interest rate is derived from German government
December 31, 2019, was US$363.63 (2018: US$277.92); the bonds with a similar duration. The SAP dividend yield is based on
expected dividend yield of the index of 1.17% (2018: 1.30%), the expected future dividends.
expected volatility of the index of 18% to 22% (2018: 19% to 24%),
F-22
Changes in Outstanding Awards Under Our Cash-Settled Plans
Thousands, unless otherwise stated LTI 2016 Plan LTI 2015 Plan SOP 2010 RSU Plan Qualtrics
(2016–2019 (2014–2015 (2012–2015 (2015–2019 Rights
Tranches) Tranches) Tranches) Tranches)
12/31/2017 631 531 14,472 13,520 NA
Granted 295 0 0 8,512 NA
Adjustment based upon KPI target achievement NA 0 NA 49 NA
Exercised 0 –146 –6,913 –5,840 NA
Forfeited 0 0 –473 –977 NA
12/31/2018 926 385 7,086 15,264 NA

1)
Granted 344 0 0 9,339 24,666
Adjustment based upon KPI target achievement NA 0 NA 122 NA
Exercised 0 –385 –3,904 –7,540 –7,776
Forfeited –160 0 –144 –1,057 –883
12/31/2019 1,110 0 3,039 16,128 16,007

1)
Granted includes additions from business combinations
Outstanding awards exercisable as at
12/31/2018 0 0 7,086 0 NA
12/31/2019 0 0 3,039 0 0
Total carrying amount (in € millions) of liabilities as at
12/31/2018 30 35 146 774 NA
12/31/2019 73 0 150 1,100 377
Total intrinsic value of vested awards (in € millions) as at
12/31/2018 3 34 137 0 NA
12/31/2019 51 0 155 0 0
Weighted average share price (in €) for awards exercised in
2018 NA 88.27 100.61 88.67 NA
2019 NA 90.75 111.58 98.11 106.15
Total expense (in € millions) recognized in
2017 14 9 221 712 NA
2018 8 –3 43 611 NA
2019 44 –1 66 1,087 461
F-23
Share-Based Payment Balances
Share-based payment liabilities 1,130 605 1,735 714 316 1,030
Other non-financial liabilities 4,818 814 5,632 4,120 501 4,622
Share-based payment liabilities as % of 23 74 31 17 63 22

other non-financial liabilities
Derivatives – Call options for share- 95 0 95 68 0 68

based payments
Other financial assets 297 2,336 2,633 448 1,536 1,984
Derivatives – Call options for share- 32 0 4 15 0 3

based payments as % of other
financial assets
For more information about the derivatives, see Note (F.1). (B.4) Pension Plans and Similar
Obligations
b) Equity-Settled Share-Based Payments Defined Contribution Plans
Own SAP Plan (Own) Amounts for domestic and foreign defined contribution plans are
Under Own, employees have the opportunity to purchase, on a based on a percentage of the employees’ salaries or on the amount
monthly basis, SAP shares without any required holding period. The of contributions made by employees. In Germany and some other
investment per each eligible employee is limited to a percentage of countries, we make contributions to public pension schemes that
the respective employee's monthly base salary. SAP matches the are operated by national or local government or similar institutions.
employee investment by 40% and adds a subsidy of €20 per month Expenses for such local state pension plans are recognized as short-
for non-executives. This plan is not open to members of the term employee benefits, that is, social security expenses.
Executive Board. Defined Benefit Pension Plans
The discount rates used in measuring our post-employment benefit
Number of Shares Purchased assets and liabilities are derived from rates available on high-quality
corporate bonds and government bonds for which the timing and
Millions 2019 2018 2017
amounts of payments match the timing and the amounts of our
Own 5.2 5.3 5.0 projected pension payments. Net interest expense and other
expenses related to defined benefit plans are recognized as
As a result of our equity-settled share-based payments employee benefits expenses and classified in our Consolidated
transactions, we have commitments to grant SAP shares to Income Statements according to the activities that the employees
employees. We intend to meet these commitments by reissuing owning the awards perform. Since our domestic defined benefit
treasury shares or through an agent who administers the equity- pension plans primarily consist of an employee-financed post-
settled programs and purchases shares on the open market. We retirement plan that is fully financed with qualifying insurance
have fulfilled the obligations of Own through an agent. policies, current service cost may become a credit as a result of
adjusting the defined benefit liability’s carrying amount to the fair
value of the qualifying plan assets. Such adjustments are recorded in
Recognized Expense for Equity-Settled Plans service cost. Total expenses on defined benefit pension plans
€ millions 2019 2018 2017 comprise related current and past service costs as well as interest
Own 171 149 140
income and expense.
Total Expense of Pension Plans

€ millions 2019 2018 2017
Defined contribution plans 314 280 260
Defined benefit pension plans 55 50 52
Pension expenses 369 330 312
F-24
Defined Benefit Plans
Present Value of the Defined Benefit Obligations (DBO) and the Fair Value of the Plan Assets
€ millions Domestic Plans Foreign Plans Other Foreign Post- Total
Employment Plans
2019 2018 2019 2018 2019 2018 2019 2018
Present value of the DBO 1,026 886 533 418 156 132 1,715 1,436
Fair value of the plan assets 1,009 878 411 355 65 59 1,485 1,292
Net defined benefit liability (asset) 17 8 122 63 91 73 230 144
Net defined benefit liability (asset) as % of:
Non-current other financial assets 0 0 0 0 0 0 0 0
Non-current provisions 4 3 26 24 19 27 49 54
Of the present value of the DBO of our domestic plans, The following significant weighted average assumptions were
€951 million (2018: €824 million) relate to plans that provide for used for the actuarial valuation of our domestic and foreign pension
lump-sum payments not based on final salary; of the present value liabilities as well as other post-employment benefit obligations as at
of the DBO of our foreign plans, €459 million (2018: €356 million) the respective measurement date:
relate to plans that provide for annuity payments not based on final
salary.
Significant Actuarial Assumptions

Percent Domestic Plans Foreign Plans Other Foreign Post-Employment Plans
2019 2018 2017 2019 2018 2017 2019 2018 2017
Discount rate 0.8 2.3 2.3 0.3 1.0 0.8 3.7 4.2 3.9
The sensitivity analysis table below shows how the present value of all defined benefit obligations would have been influenced by
reasonably possible changes to significant actuarial assumptions. The sensitivity analysis considers change in discount rate assumptions,
holding all other actuarial assumptions constant.
Sensitivity Analysis
€ millions Domestic Plans Foreign Plans Other Foreign Post- Total
Employment Plans
2019 2018 2017 2019 2018 2017 2019 2018 2017 2019 2018 2017
Present value of all defined

benefit obligations if:
Discount rate was 50 basis 968 836 806 495 391 357 154 126 114 1,617 1,353 1,277
points higher
Discount rate was 50 basis 1,090 940 912 576 450 411 159 141 123 1,825 1,531 1,446
points lower
Investments in Plan Assets major foreign benefit plans. Although our policy is to invest in a risk-
Our investment strategy on domestic benefit plans is to invest all diversified portfolio consisting of a mix of assets, both the defined
contributions in stable insurance policies. benefit obligation and plan assets can fluctuate over time, which
Our investment strategies for foreign benefit plans vary according exposes the Group to actuarial and market (investment) risks.
to the conditions in the country in which the respective benefit plans Depending on the statutory requirements in each country, it might
are situated. We have adopted a long-term investment horizon for all be necessary to reduce any underfunding by addition of liquid
assets.
F-25
Plan Asset Allocation
Quoted in an Not Quoted in an Quoted in an Not Quoted in an

Active Market Active Market Active Market Active Market
Total plan assets 445 1,040 387 905
Thereof: Asset category
Equity investments 137 0 116 0
Corporate bonds 156 0 142 0
Insurance policies 6 1,040 5 905
Our expected contribution in 2020 to our domestic and foreign (B.5) Other Employee-Related
defined benefit pension plans is immaterial. The weighted duration
of our defined benefit plans amounted to 13 years as at
Obligations
December 31, 2019, and 12 years as at December 31, 2018. Accounting Policy
Total future benefit payments from our defined benefit plans as at As far as the provision for long-term employee benefits is secured by
December 31, 2019, are expected to be €1,831 million (2018: pledged reinsurance coverage, it is offset with the relating plan asset.
€1,783 million). Of this amount, 77% (2018: 80%) has maturities of
over five years, and 61% (2018: 66%) relates to domestic plans.
Other Employee-Related Liabilities

Other employee-related liabilities 3,038 209 3,247 2,866 185 3,051
Other employee-related liabilities 63 26 58 70 37 66

as % of other non-financial liabilities
Other employee-related liabilities mainly relate to bonus and (B.6) Restructuring

sales commission obligations, vacation obligations, and employee-
related social security obligations. Recognition of Restructuring Provisions
We only recognize provisions for restructuring if and when the
Other Employee-Related Provisions following occurs:
€ millions 2019 – SAP has designed a program that materially changes the scope
of one of our businesses or the manner in which the business is
Current Non- Total
Current conducted, and
Other employee-related provisions as 25 52 77 – A detailed and documented restructuring plan has been
at 1/1/2019 approved by our Executive Board, a member thereof, or a direct
Addition 53 137 190
report of an Executive Board member, and
Utilization –52 –43 –95

– The program established is planned to start shortly after the
program plan is approved and is expected to be capable of being
Release –5 –3 –8
completed within 12 months, and
Other employee-related provisions as 21 143 164
– The program has been announced to the parties affected or has
at 12/31/2019
commenced.
Provisions 268 478 746
We consider whether a change in business is material based on the
Other employee-related provisions 8 30 22 business affected rather than for SAP as a whole. In judging whether
as % of provisions
a unit qualifies as a business for restructuring purposes, we consider
Employee-related provisions primarily comprise obligations for if the unit has its own management team, has access to all inputs
time credits accumulated in the working time account, severance and processes necessary to provide outputs, and generates or could
payments outside restructuring programs, and jubilee expenses. generate revenues. The materiality of a change to a business is
While most of these employee-related provisions could be claimed assessed based on both the size and the nature of the change and
within the next 12 months, we do not expect the related cash therefore does not necessarily involve a material quantitative impact
outflows within this time period. on our financial statements.
F-26
In early 2019, we launched a Company-wide restructuring Restructuring Provisions
program to further increase our focus on our key strategic growth
€ millions Restructuring Provisions
areas. The program is aimed at further simplifying Company
structures and processes and to ensure that SAP’s organizational 1/1/2019 24
setup, skillsets, and resource allocation continue to meet evolving Addition 1,125
customer demand. The main features of the restructuring plan were
Utilization –938
announced on January 29, 2019. Substantially all restructuring
expenses recognized in 2019 result from this program. Cash Release –4
outflows related to restructuring were €0.9 billion in 2019 (2018: Currency impact 1
€0.1 billion).
12/31/2019 208
In total, approximately 4,000 employees will leave or have already
left the Company under the plan. Restructuring expenses primarily Total provisions 746
include the following components: Restructuring provisions 28
as % of total provisions
Restructuring Expenses
€ millions 2019 2018 2017 If not presented separately in our income statement,
Employee-related restructuring –1,111 –19 –180 restructuring expenses would have been classified in the different
expenses expense items in our income statement as follows:
Onerous contract-related –19 0 –2
restructuring expenses and Restructuring Expenses by Functional Area
restructuring-related impairment
losses € millions 2019 2018 2017
Cost of cloud and software –138 –3 –55

Restructuring expenses –1,130 –19 –182
Cost of services –154 –3 –118
Restructuring provisions are predominantly short-term in nature. Research and development –467 –3 –9
They primarily include employee termination benefits. For more Sales and marketing –299 –11 –2
information about the accounting treatment of share-based
General and administration –71 0 2
compensation in connection with the restructuring program, see
Note (B.3). Restructuring expenses –1,130 –19 –182
F-27
Section C – Financial Results
This section provides insight into the financial results of SAP's chat, and routing offerings, which formerly were included in the
reportable segments and of SAP overall as far as not already covered Applications, Technology & Services segment and former Customer
by previous sections. This includes but is not limited to segment Experience segment. Due to its size, however, Digital Interconnect
results, income taxes, and earnings per share. continues to not qualify as a reportable segment.
The segment information for 2019 and the comparative prior
periods were both restated to conform with the new segment
(C.1) Results of Segments composition of the Applications, Technology & Services segment,
the Qualtrics segment, and the Digital Interconnect segment.
General Information
At year end 2019, SAP had four operating segments that are Segment Reporting Policies
regularly reviewed by the Executive Board, which is responsible for
Our management reporting system, and hence our segment
assessing the performance of the Company and for making resource
reporting system, reports our intersegment services as cost
allocation decisions as our chief operating decision maker (CODM).
reductions and does not track them as internal revenue.
The operating segments are largely organized and managed
Intersegment services mainly represent utilization of human
separately according to their product and service offerings, notably
resources of one segment by another segment on a project basis.
whether the products and services relate to our business network
Intersegment services are charged based on internal cost rates
activities, experience management activities, or communication
including certain indirect overhead costs but excluding a profit
offerings, or cover other activities of our business.
margin.
The Applications, Technology & Services segment derives its
revenues primarily from the sale of software licenses and cloud Most of our depreciation and amortization expense affecting
subscriptions (as far as not included in one of the other segments), segment profits is allocated to the segments as part of broader
and from the sale of related services (mainly support services, infrastructure allocations and is thus not tracked separately on the
various professional services, premium support services, operating segment level. Depreciation and amortization expense
implementation services for our software products, and education that is directly allocated to the operating segments is immaterial in
services on the use of our products). all segments presented.
The former SAP Business Network segment was renamed during Our management reporting system produces a variety of reports
2019 without any changes in the composition of this segment. The that differ by the currency exchange rates used in the accounting for
new name is Intelligent Spend Group. The Intelligent Spend Group foreign-currency transactions and operations, where both actual and
segment derives its revenues mainly from transaction fees charged constant currency numbers are reported to and used by our CODM.
for the use of SAP’s cloud-based collaborative business networks Reports based on actual currencies use the same currency rates as
and from the sale of subscriptions to the Intelligent Spend Group’s are used in our financial statements. Reports based on constant
cloud offerings (mainly SAP Ariba, SAP Concur, and SAP Fieldglass currencies report revenues and expenses using the average
offerings) and of related professional and educational services. exchange rates from the previous year’s corresponding period.
The Qualtrics segment derives its revenues mainly from the sale
We use an operating profit indicator to measure the performance of
of experience management cloud solutions (offerings of Qualtrics) our operating segments. However, the accounting policies applied in
that run front-office functions across the experience data and from
the measurement of operating segment revenue and profit differ as
the sale of related services. Before we acquired Qualtrics on follows from the IFRS accounting principles used to determine the
January 23, 2019, this segment was called Customer Experience and
operating profit measure in our income statement:
included our customer experience offerings. Following the Qualtrics
– The measurements of segment revenue and results include the
acquisition, we combined our existing customer experience
recurring revenues that would have been recorded by acquired
solutions with the Qualtrics business and renamed the Customer
entities had they remained stand-alone entities but which are not
Experience segment to Customer and Experience Management. The
recorded as revenue under IFRS due to fair value accounting for
customer experience offerings continued to belong to this segment
customer contracts in effect at the time of an acquisition.
until they became part of the Applications, Technology & Services
segment in October 2019 through splitting and partial integration – The expense measures exclude:
into other company functions. The segment was thereafter renamed ▪ Acquisition-related charges such as amortization expense and
to Qualtrics. The expenses reflected in the Qualtrics segment, impairment charges for intangibles acquired in business
however, do not comprise the full impact of the acquisition due to combinations and certain stand-alone acquisitions of
the fact that some functions of Qualtrics mostly affecting general intellectual property (including purchased in-process research
and administration expense have already been integrated into SAP’s and development), settlements of pre-existing business
corporate functions. There are no prior-period numbers for the relationships in connection with a business combination, and
Qualtrics segment presented, since we acquired Qualtrics on acquisition-related third-party expenses
January 23, 2019.
▪ Share-based payment expenses
Further, we changed the composition of our non-reportable
Digital Interconnect segment through integration of telephony, video ▪ Restructuring expenses
F-28
– Certain activities are exclusively managed on corporate level, outlined above, are presented under the Other revenue and Other
including finance, accounting, legal, human resources, global expenses items in the reconciliation in Note (C.2).
business operations, and global marketing. They are not included Information about assets and liabilities and additions to non-current
in the results of our reportable segments. assets by segment are not regularly provided to our Executive Board.
Revenues and expenses of our operating but non-reportable Goodwill by segment is disclosed in Note (D.2).
segment, and the certain activities managed on corporate level, as
Applications, Technology & Services

€ millions 2019 2018 2017
Actual Constant Actual Constant Actual

Currency Currency3) Currency Currency3) Currency
Cloud – SaaS/PaaS1) 3,243 3,152 2,347 2,424 1,593
Cloud – IaaS2) 695 673 488 506 328
Cloud 3,938 3,825 2,835 2,929 1,922
Software licenses 4,523 4,422 4,645 4,875 4,869
Software support 11,532 11,269 10,969 11,478 10,890
Software licenses and support 16,054 15,691 15,614 16,353 15,760
Cloud and software 19,993 19,516 18,449 19,283 17,681
Services 3,551 3,464 3,305 3,577 3,176
Total segment revenue 23,544 22,980 21,753 22,859 20,857
Cost of cloud – SaaS/PaaS1) –1,126 –1,092 –948 –992 –676
Cost of cloud – IaaS2) –493 –481 –428 –441 –305
Cost of cloud –1,620 –1,573 –1,377 –1,433 –981
Cost of software licenses and support –1,972 –1,933 –1,924 –2,056 –1,998
Cost of cloud and software –3,592 –3,505 –3,300 –3,489 –2,978
Cost of services –2,636 –2,583 –2,523 –2,694 –2,434
Total cost of revenue –6,228 –6,089 –5,823 –6,183 –5,412
Segment gross profit 17,316 16,892 15,931 16,677 15,445
Other segment expenses –7,448 –7,294 –7,008 –7,318 –6,858
Segment profit 9,868 9,597 8,922 9,359 8,587

1)
2)
3)
The 2019 constant currency amounts are only comparable to 2018 actual currency amounts; 2018 constant currency amounts are only comparable to 2017 actual currency amounts.
F-29
Intelligent Spend Group
€ millions 2019 2018 2017

Cloud – SaaS/PaaS1) 2,693 2,585 2,178 2,265 1,840
Cloud 2,693 2,585 2,178 2,265 1,840
Software licenses 0 0 0 0 –1
Software support 15 14 16 16 18
Software licenses and support 15 14 16 17 17
Cloud and software 2,708 2,599 2,193 2,282 1,857
Services 476 458 436 451 404
Total segment revenue 3,184 3,057 2,629 2,733 2,261
Cost of cloud – SaaS/PaaS1) –591 –569 –483 –503 –428
Cost of cloud –591 –569 –483 –503 –428
Cost of software licenses and support –11 –10 –6 –7 –5
Cost of cloud and software –601 –579 –489 –510 –433
Cost of services –352 –340 –324 –338 –292
Total cost of revenue –953 –919 –813 –847 –725
Segment gross profit 2,231 2,138 1,816 1,886 1,536
Other segment expenses –1,534 –1,477 –1,285 –1,341 –1,148
Segment profit 696 661 531 545 388

1)
2)
The 2019 constant currency amounts are only comparable to 2018 actual currency amounts; 2018 constant currency amounts are only comparable to 2 017 actual currency amounts.
F-30
Qualtrics
€ millions 2019 20182) 20172)

Cloud – SaaS/PaaS1) 371 353 NA NA NA
Cloud 371 353 NA NA NA
Software licenses 0 0 NA NA NA
Software support 0 0 NA NA NA
Software licenses and support 0 0 NA NA NA
Cloud and software 371 353 NA NA NA
Services 137 130 NA NA NA
Total segment revenue 508 483 NA NA NA
Cost of cloud – SaaS/PaaS1) –33 –31 NA NA NA
Cost of cloud –33 –31 NA NA NA
Cost of software licenses and support 0 0 NA NA NA
Cost of cloud and software –33 –31 NA NA NA
Cost of services –78 –74 NA NA NA
Total cost of revenue –110 –106 NA NA NA
Segment gross profit 398 377 NA NA NA
Other segment expenses –389 –368 NA NA NA
Segment profit 8 9 NA NA NA
1)
2)
There are no prior-period numbers for the Qualtrics segment presented, since we acquired Qualtrics in 2019.
Segment Revenue by Region

€ millions Applications, Technology Intelligent Spend Group Qualtrics Total Reportable Segments
& Services
2019 2018 2019 2018 2019 2018 2019 2018
Actual Constant Actual Actual Constant Actual Actual Constant Actual Actual Constant Actual
Currency Currency Currency Currency Currency Currency Currency Currency Currency Currency Currency Currency
EMEA 11,279 11,152 10,610 612 594 443 68 65 NA 11,959 11,811 11,053
Americas 8,463 8,158 7,604 2,216 2,115 1,915 403 383 NA 11,081 10,655 9,519
APJ 3,802 3,669 3,539 356 348 271 37 36 NA 4,196 4,053 3,810
Total 23,544 22,980 21,753 3,184 3,057 2,629 508 483 NA 27,236 26,520 24,383
segment
revenue
For a breakdown of revenue by region for the SAP Group, see Note (A.1).
F-31
(C.2) Reconciliation of Segment Measures to the Consolidated Income Statements
€ millions 2019 2018 2017

Applications, Technology & Services 23,544 22,980 21,753 22,859 20,857
Intelligent Spend Group 3,184 3,057 2,629 2,733 2,261
Qualtrics 508 483 NA NA NA
Total segment revenue for reportable segments 27,236 26,520 24,383 25,593 23,118
Other revenue 398 385 359 368 345
Adjustment for currency impact 0 728 0 –1,219 0
Adjustment of revenue under fair value accounting –81 –81 –33 –33 –3
Total revenue 27,553 27,553 24,708 24,708 23,461
Applications, Technology & Services 9,868 9,597 8,922 9,359 8,587
Intelligent Spend Group 696 661 531 545 388
Qualtrics 8 9 NA NA NA
Total segment profit for reportable segments 10,573 10,268 9,453 9,904 8,975
Other revenue 398 385 359 368 345
Other expenses –2,763 –2,700 –2,649 –2,791 –2,551
Adjustment for currency impact 0 255 0 –317 0
Adjustment for
Revenue under fair value accounting –81 –81 –33 –33 –3
Acquisition-related charges –689 –689 –577 –577 –587
Share-based payment expenses –1,835 –1,835 –830 –830 –1,120
Restructuring –1,130 –1,130 –19 –19 –182
Operating profit 4,473 4,473 5,703 5,703 4,877
Other non-operating income/expense, net –74 –74 –56 –56 –36
Financial income, net 198 198 –47 –47 188
Profit before tax 4,596 4,596 5,600 5,600 5,029

1)
The 2019 constant currency amounts are only comparable to 2018 actual currency amounts; 2018 constant currency amounts are on ly comparable to 2017 actual currency amounts.
F-32
(C.3) Other Non-Operating (C.5) Income Taxes
Income/Expense, Net Judgments and Estimates
€ millions 2019 2018 2017 We are subject to changing tax laws in multiple jurisdictions within
the countries in which we operate. Our ordinary business activities
Foreign currency exchange –51 –31 –12
gain/loss, net also include transactions where the ultimate tax outcome is
uncertain due to different interpretations of tax laws, such as those
Thereof from financial assets 358 444 615
at fair value through profit or involving revenue sharing and cost reimbursement arrangements
loss between SAP Group entities. In addition, the amount of income taxes
Thereof from financial assets 194 148 96 we pay is generally subject to ongoing audits by domestic and
at amortized cost (2017: loans foreign tax authorities. In determining our worldwide income tax
and receivables) provisions, judgment is involved in assessing whether to consider
Thereof from financial –396 –415 –435 each uncertain tax treatment separately or together with one or
liabilities at fair value through more other uncertain tax treatments and whether to reflect the
profit or loss
respective effect of uncertainty based on the most likely amount or
Thereof from financial –176 –202 –317 the expected value. In applying these judgments, we consider the
liabilities at amortized cost
nature and the individual facts and circumstances of each uncertain
Miscellaneous income/expense, –23 –25 –24 tax treatment as well as the specifics of the respective jurisdiction,
net including applicable tax laws and our interpretation thereof.
Other non-operating –74 –56 –36 The assessment whether a deferred tax asset is impaired requires
income/expense, net
judgment, as we need to estimate future taxable profits to determine
whether the utilization of the deferred tax asset is probable. In
evaluating our ability to utilize our deferred tax assets, we consider
(C.4) Financial Income, Net all available positive and negative evidence, including the level of
historical taxable income and projections for future taxable income
€ millions 2019 2018 2017
over the periods in which the deferred tax assets are recoverable.
Finance income 787 371 476
Our judgment regarding future taxable income is based on
Thereof gains from financial assets at fair 596 227 382 assumptions about future market conditions and future profits of
value through profit or loss (2017: from
SAP.
available-for-sale financial assets)
Judgment is also required in evaluating whether interest or penalties
Finance costs –589 –418 –288
related to income taxes meet the definition of income taxes, and, if
Thereof interest expense from financial –207 –106 –89 not, whether it is of financial nature. In this judgment, we particularly
liabilities at amortized cost
consider applicable local tax laws and interpretations on IFRS by
Thereof interest expense from financial –155 –206 –116 national standard setters in the area of group financial reporting.
liabilities at fair value through profit or loss
(2017: from available-for-sale financial
liabilities) Tax Expense by Geographic Location
Financial income, net 198 –47 188 € millions 2019 2018 2017
Current tax expense
Germany 625 733 935
Foreign 1,153 1,019 716
Total current tax expense 1,778 1,752 1,651
Deferred tax expense/income
Germany –3 57 –584
Foreign –549 –298 –84
Total deferred tax income –552 –241 –668
Total income tax expense 1,226 1,511 983
F-33
Major Components of Tax Expense Components of Recognized Deferred Tax Assets
and Liabilities
€ millions 2019 2018 2017
Current tax expense/income
Tax expense for current year 1,818 1,665 1,623 Deferred tax assets
Taxes for prior years –40 87 28 Intangible assets 504 668
Total current tax expense 1,778 1,752 1,651 Property, plant, and equipment 19 28
Deferred tax expense/income Other financial assets 11 11
Origination and reversal of temporary –710 –501 –891 Trade and other receivables 61 55
differences
Pension provisions 135 116
Unused tax losses, research and development 158 260 223
tax credits, and foreign tax credits Share-based payments 268 140
Total deferred tax income –552 –241 –668 Other provisions and obligations 1,330 424
Total income tax expense 1,226 1,511 983 Contract liabilities 553 229
Carryforwards of unused tax losses 131 150

Profit Before Tax by Geographic Location
Research and development and foreign tax credits 56 21
€ millions 2019 2018 2017
Other 152 181
Germany 2,012 3,106 2,788
Total deferred tax assets 3,220 2,023
Foreign 2,584 2,494 2,241
Deferred tax liabilities
Total 4,596 5,600 5,029
Intangible assets 1,006 628
The following table reconciles the expected income tax expense, Property, plant, and equipment 544 95
computed by applying our combined German tax rate of 26.4%
Other financial assets 224 139
(2018: 26.4%; 2017: 26.4%), to the actual income tax expense. Our
2019 combined German tax rate includes a corporate income tax Trade and other receivables 148 153
rate of 15.0% (2018: 15.0%; 2017: 15.0%), plus a solidarity surcharge
Pension provisions 13 12
of 5.5% (2018: 5.5%; 2017: 5.5%) thereon, and trade taxes of 10.6%
(2018: 10.6%; 2017: 10.6%). Share-based payments 1 0
Other provisions and obligations 50 18

Relationship Between Tax Expense and Profit
Before Tax Contract liabilities 6 23
Other 59 43
€ millions, unless otherwise 2019 2018 2017
stated Total deferred tax liabilities 2,051 1,111
Profit before tax 4,596 5,600 5,029 Total deferred tax assets, net 1,169 912
Tax expense at applicable tax 1,212 1,478 1,327
rate of 26.4%
(2018: 26.4%; 2017: 26.4%) The increase in deferred tax assets for other provisions and
obligations mainly results from deferred intercompany income and
Tax effect of:
the adoption of IFRS 16 ‘Leases’, the latter leading also to a
Foreign tax rates –209 –147 –403
corresponding increase in deferred tax liabilities for property, plant,
Changes in tax laws and tax 10 0 –212 and equipment. Furthermore, the deferred tax assets for contract
rates
liabilities increased mainly because of deferred revenue, and the
Non-deductible expenses 116 106 82 deferred tax liabilities for intangible assets increased mainly due to
Tax-exempt income –93 –38 –95 our business combination in 2019.
Withholding taxes 138 91 131
Research and development –89 –33 –26

and foreign tax credits
Prior-year taxes 80 –17 –26
Reassessment of deferred tax 48 58 185

assets, research and
development tax credits, and
foreign tax credits
Other 13 13 20
Total income tax expense 1,226 1,511 983
Effective tax rate (in %) 26.7 27.0 19.5
F-34
Items Not Resulting in a Deferred Tax Asset (C.6) Earnings per Share
€ millions 2019 2018 2017
€ millions, unless otherwise 2019 2018 2017
Unused tax losses stated
Not expiring 688 575 375 Profit attributable to equity 3,321 4,083 4,008
holders of SAP SE
Expiring in the following year 63 7 9
Issued ordinary shares 1) 1,229 1,229 1,229
Expiring after the following year 373 476 535
Effect of treasury shares1) –35 –35 –31
Total unused tax losses 1,124 1,058 919
Weighted average shares 1,194 1,194 1,197
Deductible temporary differences 538 509 524 outstanding, basic1)
Unused research and development and Dilutive effect of share-based 0 0 1
foreign tax credits payments1)
Not expiring 28 54 38
Weighted average shares 1,194 1,194 1,198
Expiring in the following year 0 0 2 outstanding, diluted1)
Expiring after the following year 17 18 34 Earnings per share, basic, 2.78 3.42 3.35
attributable to equity holders of
Total unused tax credits 45 72 74 SAP SE (in €)
Earnings per share, diluted, 2.78 3.42 3.35

attributable to equity holders of
Of the unused tax losses, €187 million (2018: €213 million; 2017:
SAP SE (in €)
€263 million) relate to U.S. state tax loss carryforwards.
1)
We have not recognized a deferred tax liability on approximately Number of shares in millions
€17.41 billion (2018: €14.04 billion) for undistributed profits of our
subsidiaries, because we are in a position to control the timing of the
reversal of the temporary difference and it is probable that such
differences will not reverse in the foreseeable future.
Income Tax-Related Litigation

We are subject to ongoing tax audits by domestic and foreign tax
authorities. Currently, we are in dispute mainly with the German and
only a few foreign tax authorities. The German dispute is in respect
of intercompany financing matters and certain secured capital
investments, while the few foreign disputes are in respect of the
deductibility of intercompany royalty payments and intercompany
services. In all cases, we expect that a favorable outcome can only be
achieved through litigation. For all of these matters, we have not
recorded a provision as we believe that the tax authorities’ claims
have no merit and that no adjustment is warranted. If, contrary to
our view, the tax authorities were to prevail in their arguments before
the court, we would expect to have an additional expense of
approximately €2,013 million (2018: €1,746 million) in total
(including related interest expenses and penalties of €982 million
(2018: €842 million)).
F-35
Section D – Invested Capital
This section highlights our non-current assets including 2019 Acquisitions
investments that form the basis of our operating activities. Additions On January 23, 2019, we concluded the acquisition of Qualtrics,
to invested capital include separate asset acquisitions or business following satisfaction of applicable regulatory and other approvals
combinations. Further, we disclose information about purchase (also see Note (G.9) of our 2018 Consolidated Financial
obligations and capital contributions. Statements).
For more information about the effects resulting from the Qualtrics is a leading provider of experience management
application of IFRS 16 ‘Leases’, see Note (D.8). solutions. By combining Qualtrics products and SAP products, we
aim to deliver an end-to-end experience and operational
management system to our customers.
(D.1) Business Combinations We acquired 100% of the Qualtrics shares for approx. US$35 per
Measuring Non-Controlling Interests and Allocation of share, representing consideration transferred in cash of
Consideration Transferred approximately US$7.1 billion. In addition to the cash payments, SAP
We decide for each business combination whether to measure the also incurs liabilities and post-closing expenses relating to assumed
non-controlling interest in the acquiree at fair value or at the share-based payment awards amounting to approximately
proportionate share of the acquiree’s identifiable net assets. US$0.9 billion.
The operating results and assets and liabilities of Qualtrics are
We classify costs related to executing business combinations as
reflected in our consolidated financial statements from
general and administration expense.
January 23, 2019, onward.
In our accounting for business combinations, judgment is required in
determining whether an intangible asset is identifiable, and should Qualtrics Acquisition: Consideration Transferred
be recorded separately from goodwill. Additionally, estimating the € millions
acquisition-date fair values of the identifiable assets acquired and
Cash paid 6,212
liabilities assumed involves considerable judgment. The necessary
measurements are based on information available on the acquisition Liabilities incurred 237
date and are based on expectations and assumptions that have Total consideration transferred 6,449
been deemed reasonable by management. These judgments,
estimates, and assumptions can materially affect our financial
The liabilities incurred relate to the earned portion of unvested
position and profit for several reasons, including the following:
share-based payment awards. These liabilities were incurred by
– Fair values assigned to assets subject to depreciation and replacing, upon acquisition, equity-settled share-based payment
amortization affect the amounts of depreciation and awards held by employees of Qualtrics with cash-settled share-
amortization to be recorded in operating profit in the periods based payment awards, which are subject to forfeiture. The
following the acquisition. respective liabilities represent the portion of the replacement awards
– Subsequent negative changes in the estimated fair values of that relates to pre-acquisition services provided by the acquiree’s
assets may result in additional expense from impairment employees and were measured at the fair value determined under
charges. IFRS 2 (also see Note (B.3)).
Measurement period adjustments recorded in 2019 (which were
– Subsequent changes in the estimated fair values of liabilities and
not material) mostly relate to intangible assets (finalization of the
provisions may result in additional expense (if increasing the
fair value calculation) and tax-related assets and liabilities.
estimated fair value) or additional income (if decreasing the
estimated fair value). The following table summarizes the values of identifiable assets
acquired and liabilities assumed in connection with the acquisition of
Qualtrics, as at the acquisition date.
We acquire businesses in specific areas of strategic interest to us,
particularly to broaden our product and service portfolio.
F-36
Qualtrics Acquisition: Recognized Assets and Impact of the Business Combination on Our
Liabilities Financial Statements
€ millions The amounts of revenue and profit or loss of the Qualtrics
business acquired in 2019 since the acquisition date are included in
Cash and cash equivalents 138
our consolidated income statements for the reporting period as
Other financial assets 1 follows:
Trade and other receivables 37
Qualtrics Acquisition: Impact on SAP’s Financials
Other non-financial assets 20
€ millions 2019 Contribution
Property, plant, and equipment 75 as Reported of Qualtrics
Intangible assets 1,803 Revenue 27,553 429
Thereof acquired technology 575 Profit after tax 3,370 –526
Thereof customer relationship and other intangibles 1,226

Had Qualtrics been consolidated as at January 1, 2019, our
Thereof software and database licenses 2
revenue and profit after tax for the reporting period would not have
Total identifiable assets 2,074 been materially different.
Trade and other payables 97
Financial liabilities 53 2018 Acquisitions

Current and deferred tax liabilities 320 On April 5, 2018, following satisfaction of applicable regulatory
Provisions and other non-financial liabilities 41 and other approvals, we acquired 100% of the shares of Callidus
(NDSQ: CALD), a leading provider of customer relationship
Contract liabilities 129
management (CRM) solutions. SAP paid US$36 per share,
Total identifiable liabilities 640 representing consideration transferred in cash of approximately
Total identifiable net assets 1,434 US$2.4 billion. The acquisition aimed to accelerate and strengthen
SAP’s position and solution offerings in the sales performance
Goodwill 5,015
management (SPM) and configure-price-quote (CPQ) spaces.
Total consideration transferred 6,449
Callidus Acquisition: Consideration Transferred
In general, the goodwill arising from our acquisitions consists € millions
largely of the synergies and the know-how and technical skills of the Cash paid 1,957
acquired businesses’ workforces.
Liabilities incurred 47
Qualtrics goodwill is attributed to expected synergies from the
acquisition, particularly in the following areas: Total consideration transferred 2,004
– Cross-selling opportunities to existing SAP customers across all

regions, using SAP’s sales organization The liabilities incurred related to the earned portion of unvested
– Creation of new offerings by combining Qualtrics products and share-based payment awards. These liabilities were incurred by
SAP products to deliver an end-to-end experience and replacing, upon acquisition, equity-settled share-based payment
operational management system to the customers awards held by employees of Callidus with cash-settled share-based
– Improved profitability in Qualtrics sales and operations payment awards, which are subject to forfeiture. The respective
liabilities represented the portion of the replacement awards that
The allocation of the goodwill resulting from the Qualtrics relates to pre-acquisition services provided by the acquiree’s
acquisition to our operating segments depends on how our employees and were measured at the fair value determined under
operating segments actually benefit from the synergies of the IFRS 2.
Qualtrics business combination. For more information, see Measurement period adjustments recorded in both 2018 and
Note (D.2). 2019 were not material.
For more information about our segments and about the changes
in our segment structure, see Note (C.1).
F-37
The following table summarizes the values of identifiable assets Impact of the Business Combination on Our
acquired and liabilities assumed in connection with the acquisition of Financial Statements
Callidus, as at the acquisition date: The amounts of revenue and profit or loss of the Callidus
business acquired in 2018 since the acquisition date are included in
Callidus Acquisition: Recognized Assets and
the consolidated income statements for the reporting period as
Liabilities follows:
€ millions
Cash and cash equivalents 63

Callidus Acquisition: Impact on SAP’s Financials
Other financial assets 64
€ millions 2018 Contribution
Trade and other receivables 32 as Reported of Callidus
Other non-financial assets 11 Revenue 24,708 180
Property, plant, and equipment 26 Profit after tax 4,088 –60
Intangible assets 515

Had Callidus been consolidated as at January 1, 2018, our
Thereof acquired technology 121
estimated pro forma revenue for the reporting period would have
Thereof customer relationship and other 390 been €24,766 million, and pro forma profit after tax would have been
intangibles
€4,071 million.
Thereof software and database licenses 4 These amounts were calculated after applying SAP’s accounting
Total identifiable assets 711 policies and after adjusting the results for Callidus to reflect
significant effects from, for example:
Trade and other payables 59
– Additional depreciation and amortization that would have been
Current and deferred tax liabilities 71 charged assuming the fair value adjustment to property, plant,
Provisions and other non-financial liabilities 15
and equipment, and to intangible assets had been applied from
January 1, 2018
Contract liabilities/deferred income 55 – The impact of fair value adjustments on contract
Total identifiable liabilities 200 liabilities/deferred income on a cumulative basis
– The borrowing costs on the funding levels and debt/equity
Total identifiable net assets 511
position of SAP after the business combination
Goodwill 1,493 – Employee benefits, such as share-based compensation
Total consideration transferred 2,004 – Transaction expenses incurred as part of the acquisition
– Related income taxes
The goodwill arising from our acquisitions consists largely of
These pro forma numbers have been prepared for comparative
synergies and the know-how and technical skills of the acquired
purposes only. The pro forma revenue and profit numbers are not
businesses’ workforces.
necessarily indicative either of the results of operations that would
For the Callidus acquisition, synergies particularly relate to the
have actually occurred had the acquisition been in effect at the
following areas:
beginning of the respective period, or of future results.
– Cross-selling opportunities of Callidus products to existing SAP
customers across all regions, using SAP’s sales organization
– Integrating Callidus products into SAP C/4HANA to strengthen
SAP’s customer experience suite of solutions
– Improved profitability in Callidus sales and operations
After the acquisition, we had allocated the Callidus goodwill and

intangibles to the newly established Customer Experience segment.
For more information about our segments and about the changes in
our segment structure after the allocation, see Note (C.1).
F-38
(D.2) Goodwill Goodwill
€ millions
Goodwill and Intangible Asset Impairment Testing
The annual goodwill impairment test is performed at the level of our Historical cost
operating segments, since there are no lower levels in SAP at which 1/1/2018 21,371
goodwill is monitored for internal management purposes.
Foreign currency exchange differences 847
In general, the test is performed at the same time (at the beginning
Additions from business combinations 1,620
of the fourth quarter) for all operating segments.
In making impairment assessments for our goodwill and intangible 12/31/2018 23,838
assets, the outcome of these tests is highly dependent on Foreign currency exchange differences 417
management’s assumptions regarding future cash flow projections
Additions from business combinations 5,017
and economic risks, which require significant judgment and
assumptions about future developments. They can be affected by a Retirements/disposals –9
variety of factors, including: 12/31/2019 29,263
– Changes in business strategy
– Internal forecasts Accumulated amortization
– Estimation of weighted-average cost of capital 1/1/2018 100
Changes to the assumptions underlying our goodwill and intangible Foreign currency exchange differences 2
assets impairment assessments could require material adjustments 12/31/2018 102
to the carrying amount of our recognized goodwill and intangible
Foreign currency exchange differences –1
assets as well as the amounts of impairment charges recognized in
profit or loss. 12/31/2019 101
The outcome of goodwill impairment tests may also depend on the

allocation of goodwill to our operating segments. This allocation Carrying amount
involves judgment as it is based on our estimates regarding which 12/31/2018 23,736
operating segments are expected to benefit from the synergies of
12/31/2019 29,162
business combinations.
Changes in our segment structure result in the reallocation of For more information about our segments and the changes in
goodwill with the reallocated goodwill being calculated based on
2019, see Note (C.1).
relative values (if a direct allocation is not possible). For impairment testing purposes, the carrying amount of goodwill
is allocated to the operating segments expected to benefit from
goodwill as follows:
Goodwill by Operating Segment

€ millions Applications, Intelligent Qualtrics Other Total
Technology & Spend Group (Formerly
Services (Formerly Customer and
SAP Business Experience
Network) Management) 1)
12/31/2018 13,498 6,925 3,304 9 23,736
12/31/2019 18,509 7,762 2,882 9 29,162
1)
The Customer Experience segment existing at the end of 2018 was renamed to Customer and Experience Management following the addition of Qualtrics at the beginning
of 2019.
Based on the expected synergies, the goodwill added through Due to the changes in our segments in 2019, the former
the Qualtrics acquisition (see Note (D.1) for more information) Customer Experience segment goodwill of €3,438 million was
was partially allocated to the Applications, Technology & Services moved to the Applications, Technology & Services segment.
(€1,509 million) and the Intelligent Spend Group (€734 million)
segments, with the residual amount being allocated to the
Qualtrics segment.
F-39
Goodwill Impairment Test
The key assumptions on which management based its cash flow projections for the period covered by the underlying business plans are as
follows:
Key Assumption Basis for Determining Values Assigned to Key Assumption
Budgeted revenue growth Revenue growth rate achieved in the current year, adjusted for an expected increase in SAP’s addressable
cloud and database markets; expected growth in the established software applications and analytics
markets. Values assigned reflect our past experience and our expectations regarding an increase in the
addressable markets.
Budgeted operating margin Operating margin budgeted for a given budget period equals the operating margin achieved in the current
year, increased by expected efficiency gains. Values assigned reflect past experience, except for efficiency
gains.
Discount rates Our estimated cash flow projections are discounted to present value using discount rates (after-tax rates).
Discount rates are based on the weighted average cost of capital (WACC) approach.
Terminal growth rate Our estimated cash flow projections for periods beyond the business plan were extrapolated using
segment-specific terminal growth rates. These growth rates do not exceed the long-term average growth
rates for the markets in which our segments operate.
Key Assumptions and Detailed Planning Period

Percent, unless otherwise stated Applications, Technology & Intelligent Spend Group2) Qualtrics3)
Services2) (Formerly SAP Business Network) (Formerly Customer and
Experience Management) 1)
2019 2018 2019 2018 2019 2018 4)
Budgeted revenue growth (average of 3.0 4.8 13.3 13.8 22.6 NA

the budgeted period)
Pre-tax discount rate NA 11.0 NA 11.5 NA NA
After-tax discount rate 9.1 8.6 10.4 9.0 11.1 NA
Terminal growth rate 3.0 3.0 3.0 3.0 3.0 NA
Detailed planning period (in years) 5 5 9 9 13 NA

1)
The Customer Experience segment existing at the end of 2018 was renamed to Customer and Experience Management following the addition of Qualtrics at the beginning
of 2019.
2)
Testing date: October 1
3)
Testing date: December 1
4)
See below for information about the assumptions used for the former Customer Experience segment – given the segment changes, comparability to the previous year is
limited.
On October 1, 2019, we performed a goodwill impairment test for categorized as a Level 3 fair value based on the inputs used in the
the Applications, Technology & Services and Intelligent Spend Group valuation. The cash flow projections were based on actual operating
(formerly SAP Business Network) reportable segments as well as for results and specific estimates covering a detailed planning period
the part of the Customer and Experience Management segment that and the terminal growth rate thereafter. The projected results were
was moved to the Applications, Technology & Services segment in determined based on management’s estimates and are consistent
October (given the proximity of the move to the testing date, the with the assumptions a market participant would make (target
tests coincided). At the beginning of October, we had not yet operating margins of 35.9% (Applications, Technology & Services)
completed the synergy identification/valuation and thus tested and 30.6% (Intelligent Spend Group) were used in the valuation).
Qualtrics at the beginning of December (after completion of the We believe that no reasonably possible change in any of the
synergy identification/valuation). above key assumptions would cause the carrying amount of our
Applications, Technology & Services segment and Intelligent Spend
Goodwill Impairment Test Performed on October 1
Group segment to exceed the recoverable amount.
Applications, Technology & Services Segment and Intelligent Spend
Group Segment
Customer and Experience Management Segment
The recoverable amount of these segments was determined
The Customer Experience offerings that continued to belong to
based on fair value less costs of disposal calculation (in 2018, a
the Customer and Experience Management segment during the first
value-in-use calculation was performed for the Applications,
three quarters of 2019 became part of the Applications, Technology
Technology & Services segment). The fair value measurement was
F-40
& Services segment in October 2019 through splitting and partial Qualtrics
integration into other company functions (for more information, see For more information about the Qualtrics segment, see
Note (C.1)). The impairment test at the time of the transfer Note (C.1).
coincided with the impairment test on October 1. The impairment test for the Qualtrics segment was performed on
When performing the impairment test, the recoverable amount December 1 because at that time, we had finalized the initial
was determined based on fair value less costs of disposal calculation allocation of the Qualtrics goodwill to our segments. The test already
(in 2018, a value-in-use calculation was performed). The fair value reflects the allocation of parts of the Qualtrics goodwill to the
measurement was categorized as a Level 3 fair value based on the Applications, Technology & Services segment and Intelligent Spend
inputs used in the valuation. The cash flow projections were based Group segment.
on actual operating results and specific estimates covering a The recoverable amount was determined based on fair value less
detailed planning period and the terminal growth rate thereafter. The costs of disposal calculation. The fair value measurement was
projected results were determined based on management’s categorized as a Level 3 fair value based on the inputs used in the
estimates and are consistent with the assumptions a market valuation. The cash flow projections were based on actual operating
participant would make (a target operating margin of 22.6% was results and specific estimates covering a detailed planning period
used in the valuation). and the terminal growth rate thereafter. The projected results were
The following key assumptions were factored into the calculation determined based on management’s estimates and are consistent
of the recoverable amount (percent, unless otherwise stated): with the assumptions a market participant would make (a target
– Budgeted revenue growth: 18.6 (2018: 32.9) operating margin of 21.5% was used in the valuation).
– Pre-tax discount rate: NA (2018: 11.7) Given the fact that the Qualtrics segment is expected to show
– After-tax discount rate: 9.0 (2018: 9.4) disproportionate growth in the coming years and has not yet
– Terminal growth rate: 3.0 (2018: 3.0) reached a steady state, we have used a longer and more detailed
– Detailed planning period in years: 9 (2018: 5) planning period than one would apply in a more mature segment.
The recoverable amount exceeded the carrying amount by
Given the fact that the Customer Experience part of the former €4,071 million.
Customer and Experience Management segment has still not The following table shows the amounts by which the key
reached a steady state, we have used a longer and more detailed assumptions would need to change individually (that is, without
planning period than one would apply in a more mature segment. changing the other key assumptions) for the recoverable amount to
Based on these key assumptions, at the time of the transfer, the be equal to the carrying amount. For budgeted revenue growth
recoverable amount exceeded the carrying amount by sensitivity, the cost structure was not adjusted, hence leading to a
€4,574 million (2018: €8,476 million). modified terminal operating margin:
The following table shows the amounts by which the key
assumptions could – at the time of the impairment test – have Sensitivity to Change in Assumptions
changed individually (that is, without changing the other key Qualtrics
assumptions) for the recoverable amount to be at least equal to the
2019 2018 5)
carrying amount. For budgeted revenue growth sensitivity, the cost
structure was not adjusted, hence leading to a modified terminal Budgeted revenue growth (change in pp) –1.6 NA
operating margin: After-tax discount rate (change in pp) 6.3 NA
Sensitivity to Change in Assumptions Target operating margin at the end of the –15 NA
budgeted period (change in pp)
Customer Experience Part of
5)
the Customer and Experience See above for more information about the sensitivity analysis performed for the
Management Segment former Customer Experience segment – given the segment changes,
comparability to the previous year is limited.
2019 2018
Budgeted revenue growth (change in pp) –1.9 –8.3
After-tax discount rate (change in pp) 4.9 8.7
Pre-tax discount rate (change in pp) NA 10.2
Target operating margin at the end of the –13 –28

budgeted period (change in pp)
Goodwill Impairment Test Performed on December 1
Applications, Technology & Services Segment and Intelligent Spend

Group Segment
The goodwill impairment test on October 1 resulted in a
headroom that is significantly higher than the portion of the goodwill
that – at the beginning of December – was allocated to the
segments respectively. Thus, there is no impairment risk resulting
from the partial allocation of the Qualtrics goodwill.
F-41
(D.3) Intangible Assets Measurement of Intangibles
All our purchased intangible assets other than goodwill have finite
Recognition of Intangibles
useful lives. They are initially measured at acquisition cost and
Whereas in general, expenses for internally generated intangibles are subsequently amortized based on the expected consumption of
expensed as incurred, development expenses incurred on standard- economic benefits over their estimated useful lives ranging from two
related customer development projects (for which the IAS 38 to 20 years.
criteria are met cumulatively) are capitalized on a limited scale with
Acquired in-process research and development project assets are
those amounts being amortized over the estimated useful life of up
typically amortized over five to seven years (starting upon
to 12 years.
completion / marketing of the respective projects).
Determining whether internally generated intangible assets from
development qualify for recognition requires significant judgment,
particularly in the following areas: Judgment is required in determining the following:
– Determining whether activities should be considered research – The useful life of an intangible asset, as this is based on our
activities or development activities estimates regarding the period over which the intangible asset is
expected to produce economic benefits to us
– Determining whether the conditions for recognizing an intangible
asset are met requires assumptions about future market – The amortization method, as IFRS requires the straight-line
conditions, customer demand, and other developments. method to be used unless we can reliably determine the pattern
in which the asset’s future economic benefits are expected to be
– The term “technical feasibility” is not defined in IFRS, and
consumed by us
therefore determining whether the completion of an asset is
technically feasible requires judgment and a company-specific
approach. Both the amortization period and the amortization method have an
– Determining the future ability to use or sell the intangible asset impact on the amortization expense that is recorded in each period.
arising from the development and the determination of the
probability of future benefits from sale or use
Classification of Intangibles
– Determining whether a cost is directly or indirectly attributable to
We classify intangible assets according to their nature and use in our
an intangible asset and whether a cost is necessary for
operations. Software and database licenses consist primarily of
completing a development
technology for internal use, whereas acquired technology consists
These judgments impact the total amount of intangible assets that primarily of purchased software to be incorporated into our product
we present in our balance sheet as well as the timing of recognizing offerings and in-process research and development (IPRD).
development expenses in profit or loss. Customer relationship and other intangibles consist primarily of
customer relationships and acquired trademark licenses.
Amortization expenses of intangible assets are classified as cost of
cloud, cost of services, research and development, sales and
marketing, and general and administration, depending on the use of
the respective intangible assets.
F-42
Intangible Assets
€ millions Software and Acquired Customer Total
Database Licenses Technology/IPRD Relationship and
Other Intangibles
Historical cost
1/1/2018 809 1,992 4,631 7,432
Foreign currency exchange differences 8 100 204 312
Additions from business combinations 4 148 410 562
Other additions 193 0 36 229
Retirements/disposals –43 –62 –41 –146
Transfers 25 0 –28 –3
12/31/2018 996 2,178 5,212 8,386
Additions from business combinations 2 574 1,226 1,802
Other additions 84 0 68 152
Transfers 25 0 –25 0
12/31/2019 929 2,752 6,415 10,096
Accumulated amortization
1/1/2018 601 1,544 2,306 4,451
Additions amortization 95 216 337 648
12/31/2018 679 1,775 2,705 5,159
Additions amortization 94 271 395 760
12/31/2019 598 2,031 2,976 5,605
Carrying amount
12/31/2018 317 403 2,507 3,227
12/31/2019 331 721 3,439 4,491
Significant Intangible Assets

€ millions, unless otherwise stated Carrying Amount Remaining Useful
Life
2019 2018 (in years)
Sybase – Customer relationships 131 179 2 to 4
SuccessFactors – Customer relationships 184 225 6
Ariba – Customer relationships 273 323 6 to 8
Concur – Customer relationships 955 1,033 11 to 15
Callidus – Customer relationships 336 384 9 to 13
Qualtrics – Acquired technologies 495 0 6
Qualtrics – Customer relationships 1,152 0 13 to 18
Total significant intangible assets 3,526 2,144
F-43
(D.4) Property, Plant, and Equipment Useful Lives of Property, Plant, and Equipment
Depreciation of Property, Plant and Equipment Buildings Predominantly
25 to 50 years
Property, plant, and equipment are typically depreciated using the
straight-line method. Judgment is required in estimating the useful Leased assets and leasehold improvements Based on the term of the
lease contract
life of the assets. In this assessment we consider, among others, our
history with similar assets and current and future changes in Information technology equipment 2 to 6 years
technology. Office furniture 4 to 20 years
Changed Estimates of Useful Lives Automobiles 4 to 5 years
At the beginning of 2019, we changed our estimate of the expected
useful lives of certain information technology equipment. This
change from four to five years is still within the range of two to six
years. This change reduces our depreciation expense by €93 million
in the year 2019 (thereof €65 million in cost of cloud).
Property, Plant, and Equipment

€ millions Land and Buildings Land and Buildings Other Property, Other Property, Advance Payments Total
Leased Plant, and Plant, and and Construction in
Equipment Equipment Leased Progress
12/31/2018 1,344 - 1,985 - 224 3,553
12/31/2019 1,537 1,929 1,956 38 36 5,496
Additions
2018 199 - 1,026 - 77 1,302
2019 85 360 586 19 17 1,067
The additions (other than from business combinations) relate loss (FVTPL), depending on the contractual cash flows of and our
primarily to the replacement and purchase of information business model for holding the respective asset.
technology equipment and the construction and leasing of buildings For equity securities, as the cash flow characteristics are typically
and data centers. For more information about the effect of the other than solely principal and interest, we take an investment-by-
adoption of IFRS 16, see Note (D.8). investment decision whether to classify as FVTPL or FVOCI.
Judgment is required particularly in estimating the fair values of
(D.5) Equity Investments equity securities that are not listed publicly.
Accounting Policies, Judgments, and Estimates Gains/losses on equity securities at FVTPL include gains/losses
from fair value fluctuations, from disposals as well as dividends,
As we do not designate financial assets as “at fair value through
while gains/losses on equity securities at FVOCI only include
profit or loss,” we generally classify financial assets into the following
dividends, all of which are shown in Financial Income, net. Regular
categories: at amortized cost (AC), at fair value through other
way purchases and sales are recorded as at the trade date.
comprehensive income (FVOCI), and at fair value through profit or
Equity Investments
Equity securities 0 1,996 1,996 0 1,248 1,248
Investments in associates 0 16 16 0 26 26
Equity investments 0 2,012 2,012 0 1,274 1,274
Equity investments as % of other financial assets 0 86 76 0 83 64
For a list of the names of other equity investments, see Note (G.9).
F-44
Financial Commitments in Venture Capital Funds (D.7) Purchase Obligations
Investments in venture capital funds 206 187
Contractual obligations for acquisition of 342 123
property, plant, and equipment and intangible
SAP invests and holds interests in unrelated parties that manage assets
investments in venture capital. On December 31, 2019, total Other purchase obligations 2,251 2,010
commitments to make such investments amounted to €517 million
Purchase obligations 2,592 2,133
(2018: €418 million), of which €312 million had been drawn (2018:
€232 million). By investing in such venture capital funds, we are
exposed to the risks inherent in the business areas in which the The contractual obligations for acquisition of property, plant, and
entities operate. Our maximum exposure to loss is the amount equipment and intangible assets relate primarily to the construction
invested plus contractually committed future capital contributions. of new and existing facilities and to the purchase of hardware,
software, patents, office equipment, and vehicles. The remaining
Maturities obligations relate mainly to marketing, consulting, maintenance,
license agreements, cloud services, and other third-party
€ millions 12/31/2019
agreements. The increase is mainly due to new purchase obligations
Investments related to cloud services and obligations to purchase hardware.
in Venture
Capital Funds Historically, the majority of such purchase obligations have been
realized.
Due 2020 206
Of the other purchase obligations reported in 2018, €205 million
Total 206 contain lease components which are now in the scope of IFRS 16.
Those purchase obligations can be seen in the reconciliation table in
Note (D.8).
(D.6) Non-Current Assets by Region Maturities
The table below shows non-current assets excluding financial € millions 12/31/2019
instruments, deferred tax assets, post-employment benefit assets,
Purchase Obligations
and rights arising under insurance contracts.
Due 2020 1,251
Non-Current Assets by Region
Due 2021 to 2024 1,298
Due thereafter 43
Germany 4,486 4,184
Total 2,592
Rest of EMEA 5,386 4,742
EMEA 9,872 8,926
United States 29,744 22,133
Rest of Americas 411 258
Americas 30,154 22,391
APJ 1,276 922
SAP Group 41,302 32,239
For a breakdown of our employee headcount by region, see

Note (B.1), and for a breakdown of revenue by region, see Note (A.1).
F-45
(D.8) Adoption of IFRS 16 Leases are shown as follows in the balance sheet as at
December 31, 2019, and in the income statement for the year:
Accounting Policies, Judgments, and Estimates
On January 1, 2019, we adopted IFRS 16 ‘Leases’ using the modified
Leases in the Balance Sheet
retrospective transition approach. This approach requires that the € millions 12/31/2019
cumulative effect of initially applying the standard be recognized as Right-of-use assets
an adjustment to the opening balance of retained earnings on the
Right-of-use assets – land and buildings 1,929
date of initial application while the prior-year figures are not
adjusted. The new standard impacts our lease accounting as, in Right-of-use assets – other property, plant, and 38
equipment
general, all leases need to be recognized on the lessee’s balance
sheet. A lessee recognizes a right-of-use asset representing its right Total right-of-use assets 1,967
to use the underlying asset and a lease liability representing its
Non-current assets 45,002
obligation to make lease payments. The nature of expenses related
to those leases has now changed because we recognize depreciation Right-of-use assets as % of non-current assets 4
expense for right-of-use assets and interest expense on lease

liabilities. These changes apply to leases that had previously been Lease liabilities
classified as operating leases under IAS 17. We have used practical Current lease liabilities 389
expedients offered by the standard (such as non-capitalization of
Current financial liabilities 3,273
short-term leases and low-value leases, and the use of hindsight
when determining the lease term if the contract contains options to Current lease liabilities as % of current financial 12
extend or terminate the lease). For measuring our right-of-use assets liabilities
for pre-existing leases, we have applied the retrospective approach

for our most significant leases (primarily facility and data center Non-current lease liabilities 1,814
leases), while smaller leases were measured at an amount equal to
Non-current financial liabilities 12,923
the lease liability and adjusted by the amount of any prepaid or
Non-current lease liabilities as % of non-current 14
accrued lease payments existing immediately prior to the date of
financial liabilities
initial application.
Upon IFRS 16 adoption, lease liabilities from pre-existing leases Leases in the Income Statement
were discounted at the incremental borrowing rates as at € millions 2019
January 1, 2019. The weighted average discount rate applied to the
Lease expenses within operating profit
lease liabilities on January 1, 2019, was 2.5%. The following
reconciliation to the opening balance for the lease liabilities as at Depreciation of right-of-use assets 396
January 1, 2019, is based upon the operating lease obligations
disclosed as at December 31, 2018: Lease expenses within finance income, net
Interest expense on lease liabilities 55

€ millions
Purchase obligations relevant to IFRS 16 as at 205 IFRS 16 also affects SAP’s cash flow statement for the year ended
12/31/2018
2019: operating cash flow increased by €319 million and cash flow
Financial commitments as at 12/31/2018 1,442 from financing activities decreased by €319 million.
Lease related commitments as at 12/31/2018 1,647 The adjustments to the opening balances resulting from the initial
application of IFRS 16 as at January 1, 2019, were as follows:
(Less): commitments starting in 2019 (51)
– Property, plant, and equipment – increased by €1.9 billion
(Less): non-lease components (238) – Trade and other payables – decreased by €0.1 billion
Add: data updates 108 – Financial liabilities – increased by €2.1 billion
The net impact on retained earnings on January 1, 2019, was a
Adjusted commitments 1,466
decrease of €0.1 billion.
Add: adjustments as a result of different treatment of 953
extension and termination options
For more information about right-of-use asset additions, see
Discounting using the Company’s incremental (279) Note (D.4), and for a maturity analysis of lease liabilities, see
borrowing rate Note (F.1). For more information about the cash flow related to lease
Lease liabilities recognized as at 1/1/2019 2,140 liabilities, see the “Reconciliation of Liabilities Arising from Financing
Activities” table within Note (E.3).
F-46
Section E – Capital Structure, Financing, and Liquidity
This section describes how SAP manages its capital structure. customer confidence, and to support the growth of our business. We
Our capital management is based on a high equity ratio, modest seek to maintain a capital structure that will allow us to cover our
financial leverage, a well-balanced maturity profile, and deep debt funding requirements through the capital markets on reasonable
capacity. terms and, in so doing, ensure a high level of independence,
confidence, and financial flexibility.
(E.1) Capital Structure Management SAP SE’s long-term credit rating is “A2” by Moody’s and “A” by
Standard & Poor’s, both with stable outlook.
The primary objective of our capital structure management is to
maintain a strong financial profile for investor, creditor, and
12/31/2019 12/31/2018
€ millions % of € millions % of ∆ in %
Total Equity and Total Equity and
Liabilities Liabilities
Equity 30,822 51 28,877 56 7
Current liabilities 14,462 24 10,486 20 38
Non-current liabilities 14,931 25 12,138 24 23
Liabilities 29,393 49 22,624 44 30
Thereof financial debt 13,668 23 11,331 22 21
Thereof lease liabilities 2,203 4 0 0
Total equity and liabilities 60,215 100 51,502 100 17
Upon IFRS 16 adoption, liabilities and assets increased by (E.2) Total Equity
€2,203 million, representing 4pp of the increase in total equity and
liabilities. Issued Capital
In 2019, we drew €2,500 million of an acquisition term loan for
Qualtrics, whereof we repaid €500 million. At maturity, we repaid SAP SE has issued no-par value bearer shares with a calculated
€750 million in Eurobonds. We refinanced €1,100 million through the nominal value of €1 per share. All of the shares issued are fully paid.
issuance of commercial papers. Thus, the ratio of total nominal
volume of financial debt to total equity and liabilities increased Number of Shares
by 1pp. Millions Issued Treasury
Capital Shares
1/1/2017 1,228.5 –29.9
Purchase of treasury shares 0 –5.4
Reissuance of treasury shares under share- 0 0.2

based payments
12/31/2017 1,228.5 –35.1
Reissuance of treasury shares under share- 0 0.2

based payments
12/31/2018 1,228.5 –34.9
12/31/2019 1,228.5 –34.9
Authorized Shares
The Articles of Incorporation authorize the Executive Board to
increase the issued capital as follows:
– By up to a total amount of €250 million by issuing new no-par
value bearer shares against contributions in cash until
May 19, 2020 (Authorized Capital I). The issuance is subject to
the statutory subscription rights of existing shareholders.
F-47
– By up to a total amount of €250 million by issuing new no-par creditors of convertible bonds or stock options issued or guaranteed
value bearer shares against contributions in cash or in kind until by SAP SE or any of its directly or indirectly controlled subsidiaries
May 19, 2020 (Authorized Capital II). Subject to the consent of under certain share-based payments exercise their conversion or
the Supervisory Board, the Executive Board is authorized to subscription rights, and no other methods for servicing these rights
exclude the shareholders’ statutory subscription rights in certain are used. As at December 31, 2019, €100 million, representing
cases. 100 million shares, was still available for issuance (2018:
€100 million).
Contingent Shares
SAP SE’s share capital is subject to a contingent capital increase,
which may be effected only to the extent that the holders or
Other Components of Equity

€ millions Exchange Differences Available-for-Sale Cash Flow Hedges/Cost Total
Financial Assets of Hedging
1/1/2017 3,062 292 –8 3,345
Other comprehensive income for items that will be –2,732 –135 29 –2,838
reclassified to profit or loss, net of tax
12/31/2017 330 157 21 508
Adoption of IFRS 9 0 –158 –3 –160
1/1/2018 330 0 18 347
Other comprehensive income for items that will be 910 0 –23 887
12/31/2018 1,239 0 –5 1,234
Other comprehensive income for items that will be 537 0 –1 536

12/31/2019 1,776 0 –6 1,770
Treasury Shares Distribution Policy and Dividends

By resolution of SAP SE’s General Meeting of Shareholders held Our general intention is to remain in a position to return liquidity
on May 17, 2018, the authorization granted by the General Meeting of to our shareholders by distributing annual dividends totaling 40% or
Shareholders on June 4, 2013, regarding the acquisition of treasury more of our profit after tax and by potentially repurchasing treasury
shares was revoked to the extent it had not been exercised at that shares in future. We intend to repurchase shares with a volume of
time, and replaced by a new authorization of the Executive Board of €1.5 billion in 2020.
SAP SE to acquire, on or before May 16, 2023, shares of SAP SE In 2019, we distributed €1,790 million (€1.50 per share) in
representing a pro rata amount of capital stock of up to €120 million dividends for 2018 compared to €1,671 million (€1.40 per share)
in aggregate, provided that the shares purchased under the paid in 2018 for 2017 and €1,499 million (€1.25 per share) paid in
authorization, together with any other shares in the Company 2017 for 2016. Aside from the distributed dividend, in 2017, we also
previously acquired and held by, or attributable to, SAP SE do not returned €500 million to our shareholders by repurchasing treasury
account for more than 10% of SAP SE’s issued share capital. shares.
Although treasury shares are legally considered outstanding, there The total dividend available for distribution to SAP SE
are no dividend or voting rights associated with them. We may shareholders is based on the profits of SAP SE as reported in its
redeem or resell shares held in treasury, or we may use treasury statutory financial statements prepared under the accounting rules
shares for the purpose of servicing option or conversion rights under in the German Commercial Code (Handelsgesetzbuch). For the year
the Company’s share-based payment plans. Also, we may use shares ended December 31, 2019, the Executive Board intends to propose
held in treasury as consideration in connection with mergers with, or that a dividend of €1.58 per share (that is, an estimated total
acquisitions of, other companies. dividend of €1,886 million), be paid from the profits of SAP SE.
F-48
(E.3) Liquidity development of credit default swap spreads as a measure of
market participants’ assessments of the creditworthiness of a
Accounting for Non-Derivative Financial Instruments debtor to evaluate probable significant increases in credit risk to
Classification and Measurement of Non-Derivative Financial Debt timely react to changes should these manifest. Among others, we
Investments consider cash at banks, time deposits, and debt securities to be
Our non-derivative financial debt investments comprise cash at in default when the counterparty is unlikely to pay its obligations
banks and cash equivalents (highly liquid investments with original in full, when there is information about a counterparty’s financial
maturities of three months or less, such as time deposits and difficulties or if there is a drastic increase in a counterparty’s
money-market funds), loans and other financial receivables, and credit default swap spread for a prolonged time period while the
acquired debt securities. overall market environment remains generally stable. Such
financial assets are written off either partially or in full if the
As we do not designate financial assets as “at fair value through
profit or loss,” we generally classify financial assets as: at amortized likelihood of recovery is considered remote, which might be
cost (AC), at fair value through other comprehensive income evidenced, for example, by the bankruptcy of a counterparty of
(FVOCI), or at fair value through profit or loss (FVTPL), depending on such financial assets.
the contractual cash flows of, and our business model for, holding – Loans and other financial receivables are monitored based on
the respective asset. Financial assets having cash flow borrower-specific internal and external information to determine
characteristics other than solely principal and interest such as whether there has been a significant increase in credit risk since
money market and similar funds are generally classified as FVTPL. initial recognition. We consider such assets to be in default if they
Generally, all other financial assets with cash flows consisting solely are significantly beyond their due date or if the borrower is
of principal and interest are classified as AC because we follow a unlikely to pay its obligation. A write-off occurs when the
conservative investment approach, safeguarding our liquidity by likelihood of recovery is considered remote, for example when
ensuring the safety of principal investment amounts. bankruptcy proceedings have been finalized or when all
Gains/losses on non-derivative financial debt investments at FVTPL enforcement efforts have been exhausted.
are reported in Financial income, net and show interest
income/expenses separately from other gains/losses which include Non-Derivative Financial Liabilities
gains/losses from fair value fluctuations and disposals. Gains/losses Non-derivative financial liabilities include bank loans, issued bonds,
on non-derivative financial debt investments at AC are reported in private placements, and other financial liabilities. Included in other
Financial income, net and show interest income/expenses financial liabilities are customer funding liabilities which are funds
separately from other gains/losses which include gains/losses we draw from and make payments on behalf of our customers for
disposals and changes in expected and incurred credit losses. customers’ employee expense reimbursements, related credit card
Gains/losses from foreign currency exchange rate fluctuations are payments, and vendor payments. We present these funds in cash
included in Other non-operating income/expense, net. Regular way
and cash equivalents and record our obligation to make these
purchases and sales are recorded as at the trade date. expense reimbursements and payments on behalf of our customers
as customer funding liabilities.
Impairment of Non-Derivative Financial Debt Investments As we do not designate financial liabilities as FVTPL, we generally
For these financial assets, we apply considerable judgment by classify non-derivative financial liabilities as AC.
employing the general impairment approach as follows: Expenses and gains or losses on financial liabilities at AC mainly
– For cash at banks, time deposits, and debt securities such as consist of interest expense which is shown in Financial income, net.
acquired bonds and commercial paper, we apply the low credit Gains/losses from foreign currency exchange rate fluctuations are
risk exception, as it is our policy to invest only in high-quality included in Other non-operating income/expense, net.
assets of issuers with a minimum rating of at least investment
grade to minimize the risk of credit losses. Thus, these assets are
Group Liquidity, Financial Debt, and Net Debt
always allocated to stage 1 of the three-stage credit loss model,
Group liquidity consists of cash at banks, money market and other
and we record a loss allowance at an amount equal to 12-month
funds, time deposits, and debt securities (both with remaining
expected credit losses. This loss allowance is calculated based on
maturities of less than one year). Financial debt is defined as the
our exposure at the respective reporting date, the loss given
nominal volume of bank loans, commercial papers, private
default for this exposure, and the credit default swap spread as a
placements, and bonds. Net debt is group liquidity less financial
measure for the probability of default. Even though we invest only
in assets of at least investment-grade, we also closely observe the debt.
F-49
Group Liquidity and Net Debt While we continuously monitor the ratios presented in the capital
structure table, we actively manage our liquidity and structure of our
€ millions 2019 2018 ∆
financial indebtedness based on the ratios group liquidity and net
Cash and cash equivalents 5,314 8,627 –3,313 debt.
Current time deposits and debt 67 211 –144
securities
Group liquidity 5,382 8,838 –3,456
Current financial debt –2,529 –759 –1,770
Non-current financial debt –11,139 –10,572 –567
Financial debt –13,668 –11,331 –2,337
Net debt (–) –8,286 –2,493 –5,793
Cash and Cash Equivalents

Cash at banks 2,877 0 2,877 2,918 0 2,918
Time deposits 1,093 0 1,093 4,117 0 4,117
Money market and other funds 1,347 0 1,347 1,195 0 1,195
Debt securities 0 0 0 400 0 400
Expected credit loss allowance –3 0 –3 –3 0 –3
Cash and cash equivalents 5,314 0 5,314 8,627 0 8,627
Non-Derivative Financial Debt Investments

Time deposits 44 0 44 137 0 137
Debt securities 27 0 27 77 0 77
Financial instruments related to employee benefit plans 0 183 183 0 165 165
Loans and other financial receivables 100 117 217 57 91 147
Expected credit loss allowance –3 0 –3 –3 0 –3
Non-derivative financial debt investments 167 300 467 268 256 524
Non-derivative financial debt investments 56 13 18 60 17 26

as % of other financial assets
Time deposits and debt securities with original maturity of three acquired bonds of mainly financial and non-financial corporations
months or less are presented as cash and cash equivalents, and and municipalities.
those with original maturities of greater than three months For more information about financial risk and the nature of risk,
(investments considered in group liquidity) are presented as other see Note (F.1).
financial assets. Debt securities consist of commercial papers and
F-50
Financial Debt
Nominal Volume Carrying Amount Nominal Volume Carrying Amount
Current Non- Current Non-Current Total Current Non- Current Non- Total
Current Current Current
Bonds 1,150 8,367 1,150 8,283 9,433 750 9,512 759 9,445 10,204
Private 258 772 259 808 1,067 0 1,011 0 1,041 1,041

placement
transactions
Commercial 1,100 0 1,100 0 1,100 NA NA NA NA NA

Papers
Bank loans 21 2,000 22 1,995 2,017 9 49 9 49 58
Financial debt 2,529 11,139 2,531 11,086 13,617 759 10,572 768 10,535 11,303
Financial 3,273 12,923 16,196 1,125 10,553 11,678

liabilities
Financial debt as % 77 86 84 68 100 97

of financial
liabilities
Financial liabilities are unsecured, except for the retention of title For information about the risk associated with our financial
and similar rights customary in our industry. Effective interest rates liabilities, see Note (F.1). For information about fair values, see
on our financial debt (including the effects from interest rate swaps) Note (F.2).
were 1.09% in 2019, 1.33% in 2018, and in 1.29% 2017.
Bonds
2019 2018
Maturity Issue Price Coupon Rate Effective Nominal Volume Carrying Carrying
Interest Rate (in respective Amount Amount
currency in (in € millions) (in € millions)
millions)
Eurobond 6 – 2012 2019 99.307% 2.125% (fix) 2.29% €750 0 759
Eurobond 8 – 2014 2023 99.478% 1.125% (fix) 1.24% €1,000 997 996
Eurobond 9 – 2014 2027 99.284% 1.750% (fix) 1.87% €1,000 985 992
Eurobond 11 – 2015 2020 100.000% 0.000% (var.) 0.07% €650 650 649
Eurobond 12 – 2015 2025 99.264% 1.000% (fix) 1.13% €600 596 595
Eurobond 14 – 2018 2021 100.519% 0.000% (var.) –0.15% €500 501 502
Eurobond 15 – 2018 2026 99.576% 1.000% (fix) 1.06% €500 498 498
Eurobond 16 – 2018 2030 98.687% 1.375% (fix) 1.50% €500 491 494
Eurobond 17 – 2018 2020 100.024% 0.000% (var.) –0.01% €500 500 500
Eurobond 18 – 2018 2022 99.654% 0.250% (fix) 0.36% €900 898 897
Eurobond 19 – 2018 2024 99.227% 0.750% (fix) 0.89% €850 844 843
Eurobond 20 – 2018 2028 98.871% 1.250% (fix) 1.38% €1,000 982 988
Eurobond 21 – 2018 2031 98.382% 1.625% (fix) 1.78% €1,250 1,224 1,229
Eurobonds 9,166 9,942
USD bond – 2018 2025 100.000% 2.607% (var.) 2.46% US$300 267 262
Bonds 9,433 10,204
All of our Eurobonds are listed for trading on the Luxembourg Stock Exchange.
F-51
Private Placements
2019 2018
Maturity Coupon Rate Effective Nominal Volume Carrying Carrying Amount

Interest Rate (in respective Amount (in € millions)
currency in (in € millions)
millions)
U.S. private placements
Tranche 6 – 2012 2020 2.82% (fix) 2.86% US$290 259 251
Tranche 7 – 2012 2022 3.18% (fix) 3.22% US$444.5 406 395
Tranche 8 – 2012 2024 3.33% (fix) 3.37% US$323 305 299
Tranche 9 – 2012 2027 3.53% (fix) 3.57% US$100 97 96
Private placements 1,067 1,041
The U.S. private placement notes were issued by one of our

subsidiaries that has the U.S. dollar as its functional currency.
Commercial Paper
The net proceeds from our commercial paper program
(“Commercial Paper”) are being used for general corporate
purposes, including dividends and share repurchases. As at
December 31, 2019, we had €1,099.5 million of Commercial Paper
outstanding with maturities generally less than six months and the
carrying amount amounted to €1,100.5 million (December 31, 2018:
NA). The weighted average interest rate of our Commercial Paper
was –0.38% as at December 31, 2019 (December 31, 2018: NA).
F-52
Reconciliation of Liabilities Arising from Financing Activities
The changes in our financial debts are reconciled to the cash flows from borrowings included in the cash flow from financing activities.
€ millions 1/1/2019 Cash Flows Business Foreign Fair Value Other 12/31/2019
Combinations Currency Changes
Current financial debt 759 –188 0 –6 0 1,963 2,529
Non-current financial debt 10,572 2,500 0 30 0 –1,963 11,139
Financial debt (nominal volume) 11,331 2,312 0 25 0 0 13,668
Basis adjustment 42 0 0 1 –30 0 13
Transaction costs –70 0 0 0 0 5 –64
Financial debt (carrying amount) 11,303 2,312 0 25 –30 5 13,616
Accrued interest 47 0 0 1 0 19 67
Interest rate swaps –7 0 0 0 14 0 7

1)
Lease 2,168 –403 52 38 0 348 2,204
Total liabilities from financing activities 13,512 1,910 52 64 –16 373 15,895
1)
Other includes new lease liabilities
€ millions 1/1/2018 Cash Flows Business Foreign Fair Value Other 12/31/2018
Combinations Currency Changes
Current financial debt 1,299 –1,300 7 3 0 750 759
Non-current financial debt 4,965 6,308 0 49 0 –750 10,572
Financial debt (nominal volume) 6,264 5,008 7 51 0 0 11,331
Basis adjustment 62 0 0 –1 –19 0 42
Transaction costs –26 –48 0 0 0 3 –70
Financial debt (carrying amount) 6,301 4,961 7 50 –19 3 11,303
Accrued interest 34 0 0 –1 0 14 47
Interest rate swaps –24 0 0 –1 17 0 –7
Total liabilities from financing activities 6,311 4,961 7 48 –1 18 11,343
F-53
Section F – Management of Financial Risk Factors
This section discusses financial risk factors and risk management net and Financial income, net in the same period when the hedged
regarding foreign currency exchange rate risk, interest rate risk, item affects profit or loss.
equity price risk, credit risk, and liquidity risk. Further, it contains b) Fair Value Hedge
information about financial instruments.
We apply fair value hedge accounting for certain of our fixed-rate
financial liabilities and show the fair value fluctuations in Financial
income, net.
(F.1) Financial Risk Factors and Risk
c) Valuation and Testing of Effectiveness
Management
At inception of a designated hedging relationship, we document our
Accounting for Derivative Financial Instruments risk management strategy and the economic relationship between
We use derivatives to hedge foreign currency risk or interest rate risk hedged item and hedging instrument. The existence of an economic
and designate them as cash flow or fair value hedges if they qualify relationship is demonstrated as well as the effectiveness of the
for hedge accounting under IFRS 9, which involves judgment. hedging relationship tested prospectively by applying the critical
terms match for our foreign currency hedges, since currencies,
maturities, and the amounts are closely aligned for the forecasted
Derivatives Not Designated as Hedging transactions and for the spot element of the forward exchange rate
Instruments contract or intrinsic value of the currency options, respectively. For
Many transactions constitute economic hedges, and therefore interest rate swaps, effectiveness is tested prospectively using
contribute effectively to the securing of financial risks but do not statistical methods in the form of a regression analysis, by which the
qualify for hedge accounting under IFRS 9. To hedge currency risks validity and extent of the relationship between the change in value of
inherent in foreign-currency denominated and recognized monetary the hedged items as the independent variable and the fair value
assets and liabilities, we do not designate our held-for-trading change of the derivatives as the dependent variable is determined.
derivative financial instruments as accounting hedges, because the The main sources of ineffectiveness are:
profits and losses from the underlying transactions are recognized in – The effect of the counterparty and our own credit risk on the fair
profit or loss in the same periods as the profits or losses from the value of the forward exchange contracts and interest rate swaps,
derivatives. which is not reflected in the respective hedged item, and
In addition, we occasionally have contracts that contain foreign – Differences in the timing of hedged item and hedged transaction
currency embedded derivatives that are required to be accounted in our cash flow hedges.
for separately.
Fair value fluctuations in the spot component of such derivatives at We are exposed to various financial risks, such as market risks
FVTPL are included in Other non-operating income/expense, net (that is, foreign currency exchange rate risk, interest rate risk, and
while the forward element is shown in Financial income, net. equity price risk), credit risk, and liquidity risk.
We manage market risks, credit risk, and liquidity risk on a Group-
wide basis through our global treasury department, global risk
Derivatives Designated as Hedging Instruments management, and global credit management. Risk management
a) Cash Flow Hedge policies are established to identify risks, to set appropriate risk
In general, we apply cash flow hedge accounting to the foreign limits, and to monitor risks. Risk management policies and hedging
currency risk of highly probable forecasted transactions. With regard strategies are laid out in our internal guidelines (for example,
to foreign currency risk, hedge accounting relates to the spot price treasury guideline and other internal guidelines), and are subject to
and the intrinsic values of the derivatives designated and qualifying continuous internal review and analysis to reflect changes in market
as cash flow hedges. Accordingly, the effective portion of these conditions and our business.
components determined on a present value basis is recorded in We only purchase derivative financial instruments to reduce risks
other comprehensive income. The forward element and time and not for speculation, which is defined as entering into derivative
element as well as foreign currency basis spreads excluded from the instruments without a corresponding underlying transaction.
hedging relationship are recorded as cost of hedging in a separate
position in other comprehensive income. As the amounts are not Foreign Currency Exchange Rate Risk
material, they are presented together with the effective portion of Foreign Currency Exchange Rate Risk Factors
the cash flow hedges in our consolidated statements of
As we are active worldwide, our ordinary operations are subject
comprehensive income and consolidated statements of changes in
to risks associated with fluctuations in foreign currencies. Since the
equity. All other components including counterparty credit risk
Group’s entities mainly conduct their operating business in their own
adjustments of the derivative and the ineffective portion are
functional currencies, our risk of exchange rate fluctuations from
immediately recognized in Financial Income, net in profit or loss.
ongoing ordinary operations is not considered significant. However,
Amounts accumulated in other comprehensive income are
SAP occasionally generates foreign-currency-denominated
reclassified to profit or loss to Other non-operating income/expense,
receivables, payables, and other monetary items by transacting in a
F-54
currency other than the functional currency. To mitigate the extent Designated Hedged Items in Foreign Currency
of the associated foreign currency exchange rate risk, the majority of Exchange Rate Hedges
these transactions are hedged as described below.
Forecasted License Payments
In rare circumstances, transacting in a currency other than the
functional currency also leads to embedded foreign currency € millions 2019
derivatives being separated and measured at fair value through Change in value used for calculating hedge –7
profit or loss. ineffectiveness
In addition, the intellectual property (IP) holders in the Cash flow hedge –7
SAP Group are exposed to risks associated with forecasted
Cost of hedging –2
intercompany cash flows in foreign currencies. These cash flows
arise out of royalty payments from subsidiaries to the respective IP Balances remaining in cash flow hedge 0
reserve for which hedge accounting is no
holder. The royalties are linked to the subsidiaries’ external revenue. longer applied
This arrangement leads to a concentration of the foreign currency
exchange rate risk with the IP holders, as the royalties are mostly
The amounts as at December 31, 2019, designated as hedging
denominated in the subsidiaries’ local currencies, while the
instruments were as follows:
functional currency of the IP holders with the highest royalty volume
is the euro. The highest foreign currency exchange rate exposure of Designated Hedging Instruments in Foreign
this kind relates to the currencies of subsidiaries with significant Currency Exchange Rate Hedges
operations, for example the U.S. dollar, the pound sterling, the
Forecasted License Payments
Japanese yen, the Swiss franc, and the Australian dollar.
Generally, we are not exposed to any significant foreign currency € millions 2019
exchange rate risk with regard to our investing and financing Nominal amount 518
activities, as such activities are normally conducted in the functional
Carrying amount
currency of the investing or borrowing entity.
Other financial assets 3
Foreign Currency Exchange Rate Risk Other financial liabilities –11
Management Change in value recognized in OCI 7
We continuously monitor our exposure to currency fluctuation
Hedge ineffectiveness recognized in 0
risks based on monetary items and forecasted transactions and finance income, net
pursue a Group-wide strategy to manage foreign currency exchange
Cost of hedging recognized in OCI 2
rate risk, using derivative financial instruments, primarily foreign
exchange forward contracts, as appropriate, with the primary aim of Amount reclassified from cash flow –22
hedge in OCI to other non-operating
reducing profit or loss volatility. Most of the hedging instruments are income, net
not designated as being in a hedge accounting relationship.
Amount reclassified from cost of –6
Currency Hedges Designated as Hedging Instruments (Cash Flow hedging in OCI to finance income, net
Hedges)
We enter into derivative financial instruments, primarily foreign On December 31, 2019, we held the following instruments to
exchange forward contracts, to hedge significant forecasted cash hedge exposures to changes in foreign currency:
flows (royalties) from foreign subsidiaries denominated in foreign
currencies with a hedge ratio of 1:1 and a hedge horizon of up to 12 Details on Hedging Instruments in Foreign
months, which is also the maximum maturity of the foreign Currency Exchange Rate Hedges
exchange derivatives we use. Maturity
For all years presented, no previously highly-probable transaction
2019
designated as a hedged item in a foreign currency cash flow hedge
relationship ceased to be probable. Therefore, we did not 1 to 6 months 7 to 12 months
discontinue any of our cash flow hedge relationships. Also, Forward exchange
contracts
ineffectiveness was either not material or non-existent in all years
reported. Generally, the cash flows of the hedged forecasted Net exposure in € 324 193
millions
transactions are expected to occur and to be recognized in profit or
loss monthly within a time frame of 12 months from the date of the Average EUR:GBP 88.77 89.84
statement of financial position. forward rate
The amounts as at December 31, 2019, relating to items Average EUR:JPY 121.97 119.32
designated as hedged items were as follows: forward rate
Average EUR:CHF 1.11 1.09

forward rate
Average EUR:AUD 1.63 1.65

forward rate
F-55
Foreign Currency Exchange Rate Exposure Thus, our foreign currency exposure (and our average/high/low
Our risk exposure is based on the following assumptions: exposure) as at December 31, 2019, was as follows:
– The SAP Group’s entities generally operate in their functional
currencies. In exceptional cases and limited economic
Foreign Currency Exposure
environments, operating transactions are denominated in
currencies other than the functional currency, leading to a foreign € billions 2019 2018
currency exchange rate risk for the related monetary Year-end exposure toward all our major currencies 1.0 6.3
instruments. Where material, this foreign currency exchange rate
Average exposure 0.7 2.1
risk is hedged. Therefore, fluctuations in foreign currency
exchange rates do not have a significant impact on either profit or Highest exposure 1.0 6.3
other comprehensive income with regard to our non-derivative Lowest exposure 0.6 0.7
monetary financial instruments and related income or expenses.
– Our free-standing derivatives designed for hedging foreign
currency exchange rate risks almost completely balance the Foreign Currency Exchange Rate Sensitivity
changes in the fair values of the hedged item attributable to We calculate our sensitivity on an upward/downward shift of +/–
exchange rate movements in the Consolidated Income 10% of the foreign currency exchange rate between the euro and all
Statements in the same period. As a consequence, the hedged major currencies (2018: +/–10% of the foreign currency exchange
items and the hedging instruments are not exposed to foreign rate between the euro and all other major currencies; 2017: +/–10%
currency exchange rate risks, and thereby have no effect on of the foreign currency exchange rate between the euro and all other
profit. major currencies). If, on December 31, 2019, 2018, and 2017, the
Consequently, we are only exposed to significant foreign currency foreign currency exchange rates had been higher/lower as described
exchange rate fluctuations with regard to the following: above, this would have had the following effects on other non-
– The spot component of derivatives held within a designated cash operating expense, net and other comprehensive income:
flow hedge relationship affecting other comprehensive income
– Foreign currency embedded derivatives affecting other non-
operating expense, net
Foreign Currency Sensitivity

€ millions Effects on Other Non-Operating Expense, Effects on Other Comprehensive Income
Net
2019 2018 2017 2019 2018 2017
Derivatives held within a designated cash flow hedge relationship
All major currencies –10% (2018: all major currencies –10%; 53 62 71

2017: all major currencies –10%)
All major currencies +10% (2018: all major currencies +10%; –53 –62 –71
2017: all major currencies +10%)
Embedded derivatives
All currencies –10% 53 11 15
All currencies +10% –53 –11 –15
FX option held in connection with the acquisition of Qualtrics
USD –10% 0 –29 0
USD +10% 0 559 0
Interest Rate Risk Interest Rate Risk Management

Interest Rate Risk Factors The aim of our interest rate risk management is to reduce profit
We are exposed to interest rate risk as a result of our investing or loss volatility and optimize our interest result by creating a
and financing activities mainly in euros and U.S. dollars, since a large balanced structure of fixed and variable cash flows. We therefore
part of our investments are based on variable rates and/or short manage interest rate risks by adding interest-rate-related derivative
maturities (2019: 80%; 2018: 48%) and most of our financing instruments to a given portfolio of investments and debt financing.
transactions are based on fixed rates and long maturities (2019: The desired fixed-floating mix of our net debt is set by the Treasury
69%; 2018: 83%). Committee.
F-56
Derivatives Designated as Hedging Instruments (Fair Value The amounts as at December 31, 2019, designated as hedging
Hedges) instruments were as follows:
To match the interest rate risk from our financing transactions to
our investments, we use receiver interest rate swaps to convert
Designated Hedging Instruments in Interest Rate
Hedges
certain fixed-rate financial liabilities to floating, and by this means
secure the fair value of the swapped financing transactions on a 1:1 2019
ratio. Including interest rate swaps, 35% (2018: 71%) of our total € millions Interest Rate Swaps for Interest Rate Swaps for
interest-bearing financial liabilities outstanding as at EUR Borrowing USD Borrowing
December 31, 2019, had a fixed interest rate.
Notional amount 3,750 545
The amounts as at December 31, 2019, relating to items
designated as hedged items were as follows: Carrying amount
Other financial 0 9
Designated Hedged Items in Interest Rate Hedges assets
2019 Other financial –16 0

liabilities
€ millions Fixed-Rate Borrowing Fixed-Rate Borrowing
in EUR in USD Change in fair value –16 9
used for measuring
Notional amount 3,750 545 ineffectiveness
Carrying amount 3,707 545
Accumulated fair value 25 –38

adjustments in Other
financial liabilities
Change in fair value used 25 –11

for measuring
ineffectiveness
Accumulated amount of 0 –28

fair value hedge
adjustments for hedged
items ceased to be
adjusted for hedging
gains/losses
As at December 31, 2019, we held the following instruments to hedge exposures to changes in interest rates:
Details on Hedging Instruments in Interest Rate Hedges

2019
Maturity
€ millions 2020 2022 2024 2027 2028 2030 2031
EUR interest rate swaps
Nominal amounts 1,000 1,000 500 1,250
Average variable interest rate 1.528% 0.952% 0.927% 1.090%
USD interest rate swaps
Nominal amounts 258 198 89
Average variable interest rate 2.516% 2.491% 2.370%
None of the fair value adjustment from the receiver swaps, the Interest Rate Exposure
basis adjustment on the underlying hedged items held in fair value Our interest rate exposure (and our average/high/low exposure)
hedge relationships, and the difference between the two recognized as at December 31 was as follows:
in financial income, net, is material in any of the years presented.
F-57
Interest Rate Risk Exposure
€ billions 2019 2018
Year-End Average High Low Year-End Average High Low
Fair value interest rate risk
From investments 0.03 0.05 0.07 0.03 0.08 0.09 0.10 0.08
Cash flow interest rate risk
From investments (including cash) 4.32 4.32 5.04 3.89 4.24 4.16 5.65 3.50
From financing 3.92 4.25 4.43 3.92 1.96 2.08 2.32 1.45
From interest rate swaps 4.29 3.05 5.06 1.28 1.28 1.31 1.36 1.27
Interest Rate Sensitivity interest rate swaps are not reflected in the sensitivity calculation,
A sensitivity analysis is provided to show the impact of our as they offset the fixed interest rate payments for the bonds and
interest rate risk exposure on profit or loss and equity in accordance private placements as hedged items. However, changes in market
with IFRS 7, considering the following: interest rates affect the amount of interest payments from the
– Changes in interest rates only affect the accounting for non- interest rate swap. As a consequence, we include those effects of
derivative fixed-rate financial instruments if they are recognized market interest rates on interest payments in the profit-related
at fair value. Therefore, such interest rate changes do not change sensitivity calculation.
the carrying amounts of our non-derivative fixed-rate financial Due to the different interest rate expectations for the U.S. dollar
liabilities, as we account for them at amortized cost. Investments and the euro area, we base our sensitivity analyses on a yield curve
in fixed-rate financial assets classified as fair value through profit upward shift of +50/+10 basis points (bps) for the U.S. dollar/euro
or loss were not material at each year end reported. Thus, we do area (2018: +100/+30bps for the U.S. dollar/euro area; 2017:
not consider any fixed-rate instruments in the equity-related +100/+25bps for the U.S. dollar/euro area), and a yield curve
sensitivity calculation. downward shift of –50/–20bps for the U.S. dollar/euro area (2018: –
– Income or expenses recorded in connection with non-derivative 25/–10bps for the U.S. dollar/euro area; 2017: –25bps).
financial instruments with variable interest rates are subject to If, on December 31, 2019, 2018, and 2017, interest rates had been
interest rate risk if they are not hedged items in an effective higher/lower as described above, this would not have had a material
hedge relationship. Thus, we take into consideration interest rate effect on financial income, net, for our variable interest rate
changes relating to our variable-rate financing and our investments and would have had the following effects on financial
investments in money market instruments in the profit-related income, net.
sensitivity calculation.
– The designation of interest rate receiver swaps in a fair value
hedge relationship leads to interest rate changes affecting
financial income, net. The fair value movements related to the
Interest Rate Sensitivity

€ millions Effects on Financial Income, Net
2019 2018 2017
Derivatives held within a designated fair value hedge relationship
Interest rates +50bps for U.S. dollar area/+10bps for euro area (2018: +100/+30bps for U.S. –41 –20 –26
dollar/euro area; 2017: +100/+25bps for U.S. dollar/euro area)
Interest rates –50bps for U.S. dollar/–20bps for euro area (2018: –25 /–10bps for U.S. 76 5 9
dollar/euro area; 2017: –25bps for U.S. dollar/euro area)
Variable-rate financing
Interest rates +50bps for U.S. dollar area/+10bps for euro area (2018: +100/+30bps for U.S. –8 –24 –5
dollar/euro area; 2017: +25bps for euro area)
Interest rates –50bps for U.S. dollar/–20bps for for euro area (2018: –25/–10bps for U.S. 8 4 0
dollar/euro area; 2017: –25bps for euro area)
F-58
Equity Price Risk Credit Risk
Equity Price Risk Factors Credit Risk Factors
We are exposed to equity price risk with regard to our To reduce the credit risk in investments, we arrange to receive
investments in equity securities and our share-based payments rights to collateral for certain investing activities in the full amount of
plans. the investment volume, which we would be allowed to make use of
Equity Price Risk Management only in the case of default of the counterparty to the investment. In
Our listed equity investments are monitored based on the current the absence of other significant agreements to reduce our credit risk
market value that is affected by the fluctuations in the volatile stock exposure, the total amounts recognized as cash and cash
markets worldwide. Unlisted equity investments are monitored equivalents, current investments, loans, and other financial
based on detailed financial information provided by the investees. receivables, trade receivables, and derivative financial assets
The fair value of our listed equity investments depends on the equity represent our maximum exposure to credit risks, except for the
prices, while the fair value of the unlisted equity investments is agreements mentioned above.
influenced by various unobservable input factors. Credit Risk Management
We also monitor the exposure with regard to our share-based
payment plans. To reduce resulting profit or loss volatility, we hedge Cash at Banks, Time Deposits, and Debt Securities
certain cash flow exposures associated with these plans by To mitigate the credit risk from our investing activities and
purchasing derivative instruments, but we do not establish a derivative financial assets, we conduct all our activities only with
designated hedge relationship. approved major financial institutions and issuers that carry high
external ratings, as required by our internal treasury guideline.
Equity Price Exposure Among its stipulations, the guideline requires that we invest only in
On December 31, 2019, our exposure from our investments in assets from issuers with a minimum rating of at least “BBB flat.” We
equity securities was €1,996 million (2018: €1,248 million; 2017: only invest in issuers with a lower rating in exceptional cases. Such
€827 million). investments were not material in 2019 and 2018. The weighted
For information about the exposure from our share-based average rating of our financial assets is in the range A to A–. We
payments plans, see Note (B.3). pursue a policy of cautious investments characterized by
Equity Price Sensitivity predominantly current investments, standard investment
instruments, as well as a wide portfolio diversification by doing
In our sensitivity analysis for our share-based payments plans, we
business with a variety of counterparties.
include the hedging instruments and the underlying share-based
To further reduce our credit risk, we require collateral for certain
payments even though the latter are scoped out of IFRS 7, as we
investments in the full amount of the investment volume, which we
believe that taking only the derivative instrument into account would
would be allowed to make use of in the case of default of the
not properly reflect our equity price risk exposure.
counterparty to the investment. As such collateral, we only accept
Our sensitivity towards a fluctuation in equity prices is as follows:
bonds with at least investment-grade rating level.
Equity Price Sensitivity In addition, the concentration of credit risk that exists when
counterparties are involved in similar activities by instrument, sector,
€ millions 2019 2018 2017 or geographic area is further mitigated by diversification of
Investments in equity securities counterparties throughout the world and adherence to an internal
Increase in equity prices and respective 156 65 56
limit system for each counterparty. This internal limit system
unobservable inputs of 10% - increase of stipulates that the business volume with individual counterparties is
financial income, net by restricted to a defined limit that depends on the lowest official long-
Decrease in equity prices and respective –156 –65 –56 term credit rating available by at least one of the major rating
unobservable inputs of 10% - decrease of agencies, the Tier 1 capital of the respective financial institution, or
financial income, net by
participation in the German Depositors’ Guarantee Fund or similar
Share-based payments protection schemes. We continuously monitor strict compliance with
Increase in equity prices of 20% these counterparty limits. As the premium for credit default swaps
mainly depends on market participants’ assessments of the
Increase of share-based payment –298 –279 –371
expenses by creditworthiness of a debtor, we also closely observe the
development of credit default swap spreads in the market to
Increase of offsetting gains from 48 57 65
evaluate probable risk developments and react in a timely manner to
hedging instruments by
changes should these manifest.
Decrease in equity prices of 20% For cash at banks, time deposits, and debt securities such as
Decrease of share-based payment 307 262 337 acquired bonds or commercial paper, we apply the general
expenses by impairment approach. As it is our policy to only invest in high-quality
Decrease of offsetting gains from –46 –44 –46 assets of issuers with a minimum rating of at least investment grade
hedging instruments by so as to minimize the risk of credit losses, we use the low credit risk
exception. Thus, these assets are always allocated to stage 1 of the
three-stage credit loss model and we record a loss allowance for an
amount equal to 12-month expected credit losses. This loss
F-59
allowance is calculated based on our exposure as at the respective on our actual credit loss experience over the past years. These loss
reporting date, the loss given default for this exposure, and the credit rates are enhanced by forward-looking information to reflect
default swap spread as a measure for the probability of default. To differences between economic conditions during the period over
ensure that during their lifetime our investments always fulfill the which the historical data has been collected, current conditions, and
requirement of being investment-grade, we monitor changes in the expected changes in the economic conditions over the expected
credit risk by tracking published external credit ratings. Among other life of the receivables. Forward-looking information is based on
things, we consider cash at banks, time deposits, and debt securities changes in country risk ratings, or fluctuations in credit default
to be in default when the counterparty is unlikely to pay its swaps of countries of the customers we do business with. We
obligations in full, when there is information about a counterparty’s continuously monitor outstanding receivables locally to assess
financial difficulties, or in case of a drastic increase in the credit whether there is objective evidence that our trade receivables and
default swap spread of a counterparty for a prolonged time period contract assets are credit-impaired. Evidence that trade receivables
while the overall market environment remains rather stable. Such and contract assets are credit-impaired include, among the trade
financial assets are written off either partially or in full if the receivables being past due, information about significant financial
likelihood of recovery is considered remote, which might be difficulty of the customer or non-adherence to a payment plan. We
evidenced, for example, by the bankruptcy of a counterparty of such consider receivables to be in default when the counterparty is
financial assets. unlikely to pay its obligations in full, However, a delay of payments
(for example, more than 90 days past due) in the normal course of
Trade Receivables
business alone does not necessarily indicate a customer default. We
The default risk of our trade receivables is managed separately,
write off account balances either partially or in full if we judge that
mainly based on assessing the creditworthiness of customers
the likelihood of recovery is remote, which might be evidenced, for
through external ratings and on our past experience with the
example, when bankruptcy proceedings for a customer are finalized
customers concerned. Based on this assessment, individual credit
or when all enforcement efforts have been exhausted.
limits are established for each customer and deviations from such
The impact of default on our trade receivables from individual
credit limits need to be approved by management.
customers is mitigated by our large customer base and its
We apply the simplified impairment approach using a provision
distribution across many different industries, company sizes, and
matrix for all trade receivables and contract assets to take into
countries worldwide. For more information about our trade
account any lifetime expected credit losses already at initial
receivables, see Note (A.2.).
recognition. For the purpose of the provision matrix, customers are
clustered into different risk classes, mainly based on market
information such as the country risk assessment of their country of Credit Risk Exposure
origin. Loss rates used to reflect lifetime expected credit losses are
Cash, Time Deposits, and Debt Securities
determined using a roll-rate method based on the probability of a
As at December 31, 2019, our exposure to credit risk from cash,
receivable progressing through different stages of being overdue and
time deposits, and debt securities was as follows:
Credit Risk Exposure from Cash, Time Deposits, and Debt Securities
€ millions, unless 2019
otherwise stated
Equivalent to External Weighted Average Loss Gross Carrying Amount Gross Carrying Amount ECL Allowance
Rating Rate Not Credit-Impaired Credit-Impaired
Risk class 1 - low risk AAA to BBB– –0.1% 3,838 0 –3
Risk class 2 - high risk BB to D 0.0% 23 0 0
Risk class 3 - unrated NA –5.0% 52 0 –3
Total –0.2% 3,913 0 –6
€ millions, unless 2018

otherwise stated
Equivalent to External Weighted Average Loss Gross Carrying Amount Gross Carrying Amount ECL Allowance
Rating Rate Not Credit-Impaired Credit-Impaired
Risk class 1 - low risk AAA to BBB– –0.1% 7,406 0 –5
Risk class 2 - high risk BB to D 0.0% 34 0 0
Risk class 3 - unrated NA –3.3% 30 0 –1
Total –0.1% 7,470 0 –6
F-60
As at December 31, 2019, the major part of our time deposits, Trade Receivables and Contract Assets
other loans, and other financial receivables was concentrated in As at December 31, 2019, our exposure to credit risk from trade
Germany. There were no time deposits, loans, or other financial receivables was as follows:
receivables past due but not impaired and we had no indications of
impairments of such assets that were not past due and not impaired
as at that date.
Credit Risk Exposure from Trade Receivables and Contract Assets

€ millions, unless otherwise 2019
stated
Weighted Average Loss Rate Gross Carrying Amount Gross Carrying Amount ECL Allowance
Not Credit-Impaired Credit-Impaired
AR not due and due –0.2% 5,226 0 –9
AR overdue 1 to 30 days –0.5% 733 36 –4
AR overdue more than 90 days –11.1% 869 158 –114
TOTAL –1.7% 7,496 217 –131
€ millions, unless otherwise 2018

stated
Weighted Average Loss Rate Gross Carrying Amount Gross Carrying Amount ECL Allowance
Not Credit-Impaired Credit-Impaired
AR not due and due –0.3% 4,288 0 –13
AR overdue more than 90 days –13.0% 558 125 –89
TOTAL –1.7% 6,146 148 –107
For 2019, the movement in the ECL allowance for trade

receivables and contract assets is as follows:
Movement in ECL Allowance for Trade Receivables

and Contract Assets
2019 2018
€ millions ECL Allowance ECL Allowance
Balance as at 1/1 under IFRS 9 –107 –99
Net credit losses recognized –38 –18
Amounts written off 13 10
Balance as at 12/31 –131 –107
F-61
Liquidity Risk until 2024. The use of the facility is not restricted by any financial
covenants. Borrowings under the facility bear interest of EURIBOR or
Liquidity Risk Factors LIBOR for the respective currency plus a margin of 17bps. We are
We are exposed to liquidity risk from our obligations towards also required to pay a commitment fee of 5.95bps per annum on the
suppliers, employees, and financial institutions. unused available credit. We have not drawn on the facility.
In September 2019, we initiated a commercial paper program
Liquidity Risk Management (“Commercial Paper”). As at December 31, 2019, we had
€1,099.5 million of Commercial Paper outstanding with maturities
Our liquidity is managed by our global treasury department with
generally less than six months.
the primary aim of maintaining liquidity at a level that is adequate to
Additionally, as at December 31, 2019, and 2018, we had available
meet our financial obligations.
lines of credit totaling €430 million and €445 million, respectively.
Generally, our primary source of liquidity is funds generated from
There were immaterial borrowings outstanding under these lines of
our business operations. Our global treasury department manages
credit in all years presented.
liquidity centrally for all subsidiaries. Where possible, we pool their
cash surplus so that we can use liquidity centrally for our business Liquidity Risk Exposure
operations, for subsidiaries’ funding requirements, or to invest any The table below is an analysis of the remaining contractual
net surplus in the market. With this strategy, we seek to optimize maturities of all our financial liabilities held as at December 31, 2019.
yields, while ensuring liquidity, by investing only with counterparties Financial liabilities for which repayment can be requested by the
and issuers of high credit quality, as explained before. Hence, high contract partner at any time are assigned to the earliest possible
levels of liquid assets and marketable securities provide a strategic period. Variable interest payments were calculated using the latest
reserve, helping keep SAP flexible, sound, and independent. relevant interest rate fixed as at December 31, 2019. As we generally
Apart from effective working capital and cash management, we settle our derivative contracts gross, we show the pay and receive
have reduced the liquidity risk inherent in managing our day-to-day legs separately for all our currency and interest rate derivatives,
operations and meeting our financing responsibilities by arranging whether or not the fair value of the derivative is negative. The cash
an adequate volume of available credit facilities with various outflows for the currency derivatives are translated using the
financial institutions on which we can draw if necessary. applicable spot rate.
In order to retain high financial flexibility, in 2017, SAP SE entered
into a €2.5 billion syndicated credit facility agreement with a term
Contractual Maturities of Non-Derivative Financial Liabilities

€ millions Carrying Contractual Cash Flows
Amount
12/31/2019 2020 2021 2022 2023 2024 Thereafter
Non-derivative financial liabilities
Trade payables –1,283 –1,283 0 0 0 0 0
Lease liabilities –2,203 –431 –363 –284 –224 –190 –1,019
Other financial liabilities –13,912 –2,888 –630 –3,414 –1,095 –1,231 –5,467
Total of non-derivative financial liabilities –17,398 –4,602 –993 –3,698 –1,319 –1,421 –6,486
€ millions Carrying Contractual Cash Flows

Amount
12/31/2018 2019 2020 2021 2022 2023 Thereafter
Trade payables –1,265 –1,265 0 0 0 0 0
Financial liabilities –11,602 –1,149 –1,585 –622 –1,410 –1,097 –6,689
Total of non-derivative financial liabilities –12,866 –2,414 –1,585 –622 –1,410 –1,097 –6,689
F-62
Contractual Maturities of Derivative Financial Liabilities and Financial Assets
€ millions Carrying Contractual Cash Flows Carrying Contractual Cash Flows
Amount Amount
12/31/2019 2020 Thereafter 12/31/2018 2019 Thereafter
Derivative financial liabilities and assets
Derivative financial liabilities
Currency derivatives not designated as hedging –55 –64

instruments
Cash outflows –2,865 –3 –2,111 –11
Cash inflows 2,816 0 2,062 0
Currency derivatives designated as hedging instruments –11 –9
Cash outflows –415 0 –340 0
Cash inflows 401 0 330 0
Interest rate derivatives designated as hedging instruments –16 –3
Cash outflows –28 –536 –15 –27
Total of derivative financial liabilities –82 –55 –24 –76 –61 –12
Derivative financial assets
Currency derivatives not designated as hedging 33 100

instruments
Cash outflows –3,442 0 –4,025 0
Cash inflows 3,468 0 4,076 0
Currency derivatives designated as hedging instruments 3 2
Cash outflows –114 0 –203 0
Interest rate derivatives designated as hedging instruments 9 11
Cash outflows –14 –18 –8 –14
Total of derivative financial assets 44 32 6 113 61 1
Total of derivative financial liabilities and assets –37 –23 –18 37 0 –11
(F.2) Fair Value Disclosures on Financial Fair Value of Financial Instruments

Instruments We use various types of financial instruments in the ordinary
Level Transfers course of business, which are classified as either amortized cost
It is our policy that transfers between the different levels of the fair (AC) or fair value through profit or loss (FVTPL). For those financial
value hierarchy are deemed to have occurred at the beginning of the instruments measured at fair value or for which fair value must be
period of the event or change in circumstances that caused the disclosed, we have categorized the financial instruments into a
transfer. three-level fair value hierarchy depending on the inputs used to
determine fair value and their significance for the valuation
techniques.
F-63
Fair Values of Financial Instruments and Classification Within the Fair Value Hierarchy
€ millions Category 12/31/2019
Carrying Measurement Categories Fair Value

Amount
At At Fair Level 1 Level 2 Level 3 Total
Amortized Value
Cost
Assets
Cash and cash equivalents 5,314
Cash at banks1) AC 2,877 2,877

1)
Time deposits AC 1,090 1,090
Money market and similar funds FVTPL 1,347 1,347 1,347 1,347
Trade and other receivables 8,037
Trade receivables 1) AC 7,582 7,582

Other receivables 2) － 454
Other financial assets 2,633

Debt securities AC 27 27 27 27
Equity securities FVTPL 1,996 1,996 25 89 1,882 1,996

Investments in associates 2) － 16
Time deposits AC 41 41 41 41
Financial instruments related to employee benefit － 183

plans2)
Loans and other financial receivables AC 217 217 217 217

Derivative assets
Designated as hedging instrument

FX forward contracts － 3 3 3 3
Interest rate swaps － 9 9 9 9

Not designated as hedging instrument
FX forward contracts FVTPL 33 33 33 33

Call options for share-based payments FVTPL 95 95 95 95
Call option on equity shares FVTPL 15 15 15 15
Liabilities
Trade and other payables –1,589

1)
Trade payables AC –1,283 –1,283
Other payables 2) － –306
Financial liabilities –16,196
Loans AC –3,116 –3,116 –3,116 –3,116
Bonds AC –9,433 –9,433 –10,003 –10,003

Private placements AC –1,067 –1,067 –1,078 –1,078
Other non-derivative financial liabilities 3) AC –2,498 –2,498 –296 –296
Derivatives

FX forward contracts － –11 –11 –11 –11
Interest rate swaps － –16 –16 –16 –16
FX forward contracts FVTPL –55 –55 –55 –55
Total financial instruments, net –1,801 –5,564 3,416 –8,604 –4,086 1,896 –10,793
F-64
Fair Values of Financial Instruments and Classification Within the Fair Value Hierarchy
Carrying Measurement Categories Fair Value

Amount
At At Fair Level 1 Level 2 Level 3 Total
Amortized Value
Cost
Assets
Cash and cash equivalents 8,627
Cash at banks1) AC 2,918 2,918
Time deposits 1) AC 4,514 4,514
Money market and similar funds FVTPL 1,195 1,195 1,195 1,195
Trade and other receivables 6,480
Trade receivables 1) AC 6,188 6,188
Other receivables2) － 293
Other financial assets 1,984
Debt securities AC 77 77 77 77
Equity securities FVTPL 1,248 1,248 52 1,196 1,248
Investments in associates 2) － 26
Time deposits AC 134 134 134 134
Financial instruments related to employee benefit － 165
plans2)
Loans and other financial receivables AC 147 147 147 147
Derivative assets
FX forward contracts － 2 2 2 2
Interest rate swaps － 11 11 11 11
FX forward contracts FVTPL 100 100 100 100
Call options for share-based payments FVTPL 68 68 68 68
Call option on equity shares FVTPL 5 5 5 5
Liabilities
Trade and other payables –1,614
1)
Trade payables AC –1,265 –1,265
Other payables 2) － –350
Financial liabilities –11,678
Loans AC –58 –58 –58 –58
Bonds AC –10,204 –10,204 –10,365 –10,365
Private placements AC –1,041 –1,041 –1,035 –1,035
Other non-derivative financial liabilities AC –298 –298 –298 –298
Derivatives
FX forward contracts － –9 –9 –9 –9
Interest rate swaps － –3 –3 –3 –3
FX forward contracts FVTPL –65 –65 –65 –65
Total financial instruments, net 3,798 1,112 2,553 –9,041 –1,006 1,201 –8,845
1)
We do not separately disclose the fair value for cash and cash equivalents, trade receivables, and accounts payable as their carrying amounts are a reasonable
approximation of their fair values.
2)
Since the line items trade receivables, trade payables, and other financial assets contain both financial a nd non-financial assets or liabilities (such as other
taxes or advance payments), the carrying amounts of non-financial assets or liabilities are shown to allow a reconciliation to the corresponding line items in the
Consolidated Statements of Financial Position.
3)
For lease liabilities, included in the line item other non-derivative financial liabilities, separate disclosure of fair value is not required.
F-65
Fair Values of Financial Instruments by Instrument Classification
Carrying Amount At Amortized Cost At Fair Value
Financial assets
At fair value through profit or loss FVTPL 3,486 3,486
At amortized cost AC 11,834 11,834
Financial liabilities
At fair value through profit or loss FVTPL –55 –55
At amortized cost AC –17,398 –17,398
Fair Values of Financial Instruments by Instrument Classification

Carrying Amount At Amortized Cost At Fair Value
Financial assets
At fair value through profit or loss FVTPL 2,617 2,617
At amortized cost AC 13,978 13,978
At fair value through profit or loss FVTPL –65 –65
At amortized cost AC –12,866 –12,866
F-66
Determination of Fair Values
A description of the valuation techniques and the inputs used in the fair value measurement is given below:
Financial Instruments Measured at Fair Value on a Recurring Basis

Type Fair Value Determination of Fair Value/ Significant Unobservable Interrelationship Between
Hierarchy Valuation Technique Inputs Significant Unobservable
Inputs and Fair Value
Measurement
Other financial assets
Money-market and Level 1 Quoted prices in an active market NA NA

similar funds
Debt securities Level 1 Quoted prices in an active market NA NA
Listed equity Level 1 Quoted prices in an active market NA NA

securities
Level 2 Quoted prices in an active market deducting NA NA
a discount for the disposal restriction
derived from the premium for a respective
put option.
Unlisted equity Level 3 Market approach. Comparable company Peer companies used The estimated fair value would
securities valuation using revenue multiples derived (revenue multiples range from increase (decrease) if:
from companies comparable to the investee. 3.0 to 9.1) - The revenue multiples were
Revenues of investees higher (lower)
Discounts for lack of - The investees’ revenues were
marketability (10% to 30%) higher (lower)
- The liquidity discounts were
lower (higher)
Market approach. Venture capital method NA NA

evaluating a variety of quantitative and
qualitative factors such as actual and
forecasted results, cash position, recent or
planned transactions, and market
comparable companies.
Last financing round valuations NA NA
Liquidation preferences NA NA
Net asset value/fair market value as NA NA

reported by the respective funds
Call options for share- Level 2 Monte Carlo model. Calculated considering NA NA
based payment plans risk-free interest rates, the remaining term
of the derivatives, the dividend yields, the
share price, and the volatility of our share.
Call option on equity Level 3 2018: Market approach. Company valuation 2018: Revenue multiples used 2018: The estimated fair value
shares using revenue multiples based on actual revenue of the investee would increase (decrease) if:
results derived from the investee. - The revenue multiples were
higher (lower)
- The investees’ revenue were
higher (lower)
2019: Market approach. Venture capital NA NA

method evaluating a variety of quantitative
and qualitative factors such as actual and
forecasted results, cash position, recent or
planned transactions, and market
comparable companies.
Other financial assets/ Financial liabilities
FX forward contracts Level 2 Discounted cash flow using par method. NA NA

Expected future cash flows based on
forward exchange rates are discounted over
the respective remaining term of the
contracts using the respective deposit
interest rates and spot rates.
Interest rate swaps Level 2 Discounted cash flow. Expected future cash NA NA
flows are estimated based on forward
interest rates from observable yield curves
and contract interest rates, discounted at a
rate that reflects the credit risk of the
counterparty.
F-67
Financial Instruments Not Measured at Fair Value
Type Fair Value Hierarchy Determination of Fair Value/Valuation Technique
Fixed-rate bonds (financial liabilities) Level 1 Quoted prices in an active market
Fixed-rate private placements/ Level 2 Discounted cash flows

loans (financial liabilities) Future cash outflows for fixed interest and principal are
discounted over the term of the respective contracts
using the market interest rates as at the reporting date.
For other non-derivative financial assets/liabilities and €5 million in 2019 (2018: €46 million), while transfers from
variable rate financial debt, it is assumed that their carrying value Level 1 to Level 2 did not occur at all.
reasonably approximates their fair values.
Level 3 Fair Value Disclosures
Transfers Between Levels 1 and 2
The following table shows the reconciliation of fair values from
Transfers of equity securities from Level 2 to Level 1, which the opening to the closing balances for our unlisted equity
occurred because disposal restrictions lapsed and deducting a securities and call options on equity shares classified as Level 3
discount for such restriction was no longer necessary, were fair values:
Reconciliation of Level 3 Fair Values

1/1 1,202 742
Transfers
Into Level 3 0 0
Out of Level 3 –39 –12
Purchases 487 409
Sales –183 –143
Gains/losses
Included in financial income, net in profit or loss 411 168
Included in exchange differences in other comprehensive income 18 38
12/31 1,896 1,202
Change in unrealized gains/losses in profit or loss for equity investments held at the 318 117
end of the reporting period
Transfers out of Level 3 are due to initial public offerings of the

respective investee. Changing the unobservable inputs to reflect
reasonably possible alternative assumptions would not have a
material impact on the fair values of our unlisted equity securities
held as FVTPL as at the reporting date.
F-68
Section G – Other Disclosures
This section provides additional disclosures on miscellaneous topics, including information pertaining to the Executive Board, Supervisory
Board, related party transactions, and other corporate governance topics.
(G.1) Prepaid Expenses and Other Tax Assets

Prepaid expenses 427 179 606 305 131 436
Other tax assets 225 87 312 170 98 268
Total 652 266 918 475 229 704
Other non-financial assets 1,188 1,701 2,889 889 1,301 2,191
Prepaid expenses and other tax assets 55 16 32 53 18 32

as % of other non-financial assets
Prepaid expenses primarily consist of prepayments for operating leases, support services, and software royalties. Other tax assets
primarily consist of VAT.
(G.2) Other Tax Liabilities

Other tax liabilities 650 0 650 541 0 541
Other tax liabilities 13 0 12 13 0 12

as % of other non-financial liabilities
Other tax liabilities primarily consist of VAT, payroll tax, sales tax, quantified are, based on historical evidence, not expected to be a
and withholding tax. good proxy for the expenditure that would be required to resolve the
case concerned. The specifics of the jurisdictions where most of the
claims are located further impair the predictability of the outcome of
(G.3) Other Litigation, Claims, and Legal the cases. Therefore, it is typically not practicable to reliably estimate
Contingencies the financial effect that these lawsuits and claims would have if SAP
were to incur expenditure for these cases.
This Note discloses information about intellectual property-
related litigation and claims, tax-related litigation other than income Further, the expected timing of any resulting outflows of economic
tax-related litigation (see Note (C.5)), and anti-bribery and export benefits from these lawsuits and claims is typically uncertain and not
control matters. estimable, as it depends generally on the duration of the legal
proceedings and settlement negotiations required to resolve them.
Uncertainty in Context of Legal Matters

We are subject to a variety of claims and lawsuits that arise from
The policies outlined in Note (A.4) for customer-related provisions,
time to time in the ordinary course of our business, including
which include provisions for customer-related litigation cases and
proceedings and claims that relate to companies we have acquired.
claims, equally apply to our other litigation, claims, and legal
We will continue to vigorously defend against all claims and lawsuits
contingencies disclosed in this Note.
against us. The provisions recorded for these claims and lawsuits as
The outcome of litigation and claims is intrinsically subject to at December 31, 2019, are neither individually nor in the aggregate
considerable uncertainty. Management’s view of these matters may material to SAP.
also change in the future. Actual outcomes of litigation and claims Among the claims and lawsuits disclosed in this Note are the
may differ from the assessments made by management in prior following classes:
periods, which could result in a material impact on our business,
financial position, profit, cash flows, or reputation. Most of the
lawsuits and claims are of a very individual nature and claims are
either not quantified by the claimants or the claim amounts
F-69
Intellectual Property-Related Litigation and conducting investigations with the assistance of an external law firm
Claims and voluntarily advised the U.S. Securities and Exchange
Commission (U.S. SEC) and the U.S. Department of Justice
Intellectual property-related litigation and claims are cases in
(U.S. DOJ), as well as local authorities where potential violations are
which third parties have threatened or initiated litigation claiming
being investigated. The investigations and dialogue between SAP and
that SAP violates one or more intellectual property rights that they
possess. Such intellectual property rights may include patents, the local authorities and the U.S. SEC and U.S. DOJ are ongoing.
copyrights, and other similar rights. The alleged conduct may result in monetary penalties or other
sanctions under the FCPA and/or other anti-bribery laws. In addition,
Contingent liabilities exist from intellectual property-related
litigation and claims for which no provision has been recognized. SAP’s ability to conduct business in certain jurisdictions could be
negatively impacted. The comprehensive and exhaustive
Generally, it is not practicable to estimate the financial impact of
investigations and the corresponding remediation activities are still
these contingent liabilities due to the uncertainties around the
litigation and claims, as outlined above. The total amounts claimed ongoing. Considering the complexity of individual factors and the
large number of open questions, it is impossible at this point in time
by plaintiffs in those intellectual property-related lawsuits or claims
in which a claim has been quantified were not material to us as at to assess the risk of a financial impact.
Furthermore, we continue to investigate separate allegations
December 31, 2019 and 2018. Based on our past experience, most of
regarding conduct that certain SAP partners violated SAP
the intellectual property-related litigation and claims tend to be
either dismissed in court or settled out of court for amounts contractual terms and sold SAP products and services in embargoed
significantly below the originally claimed amounts. We currently countries. These SAP partners presumably did not adhere to SAP’s
strict procedures for indirect business activities. To the extent any
believe that resolving the intellectual property-related claims and
company independent from SAP chooses not to follow SAP’s
lawsuits pending as at December 31, 2019, will neither individually
nor in the aggregate have a material adverse effect on our business, licensing procedures, SAP is ultimately limited in its ability to stop
their activities. SAP devotes considerable resources to prevent and
financial position, profit, or cash flows.
mitigate such activities should they occur. We are also investigating
Individual cases of intellectual property-related litigation and
allegations regarding direct sales from SAP to certain customers,
claims include the following:
who may have engaged in unauthorized activities in embargoed
In June 2018, Teradata Corporation, Teradata US, Inc. and
countries. The investigations are being conducted by SAP’s OEC and
Teradata Operations, Inc. (collectively “Teradata”) filed a civil lawsuit
SAP’s Export Control team, with the assistance of an external law
against SAP SE, SAP America, Inc. and SAP Labs, LLC in U.S. federal
court in California. Teradata alleges that SAP misappropriated trade firm and forensic advisors.
In this context, SAP voluntarily self-disclosed potential export
secrets of Teradata, infringed Teradata’s copyrights, and violated U.S.
controls and economic sanctions violations to the U.S. DOJ and the
antitrust laws. Teradata seeks unspecified monetary damages and
injunctive relief. Trial is scheduled for late 2021. U.S. Department of Treasury’s Office of Foreign Assets Control
In February 2010, United States-based TecSec, Inc. (TecSec) (OFAC) in September 2017. At the same time, SAP provided
instituted legal proceedings in the United States against SAP notification to the U.S. SEC and responded to an SEC comment letter
on export restriction matters in October 2017. SAP has also provided
(including its subsidiary Sybase) and many other defendants. TecSec
disclosure to the U.S. Department of Commerce’s Bureau of Industry
alleged that SAP’s and Sybase’s products infringe one or more of the
and Security (BIS) based on the same alleged facts. Finally, pursuant
claims in five patents held by TecSec. In its complaint, TecSec seeks
to Section 219 of the U.S. Iran Threat Reduction and Syria Human
unspecified monetary damages and permanent injunctive relief. The
Rights Act of 2012 and Section 13(r) of the U.S. Securities Exchange
trial for SAP (including its subsidiary Sybase) has not yet been
Act of 1934, SAP has filed the required Iran Notice with the U.S. SEC.
scheduled, but is anticipated for 2020.
The alleged conduct may result in monetary penalties or other
Tax-Related Litigation sanctions under U.S. sanctions and export control laws.
We are subject to ongoing audits by domestic and foreign tax The comprehensive and exhaustive investigations and the
corresponding remediation activities are ongoing, and considering
authorities. In respect of non-income taxes, we are involved in
the complexity of individual factors and the large number of open
various proceedings with only a few foreign tax authorities regarding
assessments and litigation matters on intercompany royalty questions, it is impossible at this point in time to assess the risks.
payments and intercompany services. The total potential amount in For the reasons outlined above, it is impossible at this point in
time to determine whether the potential anti-bribery law violations
dispute related to these matters for all applicable years is
and the potential export restriction violations represent present
approximately €189 million (2018: €95 million). We have not
obligations of SAP and, if so, to reliably estimate the amount of these
recorded a provision for these matters, as we believe that we will
obligations. As a consequence, no provisions have been recognized
prevail.
for these potential violations in our consolidated financial
For information about income tax-related litigation, see
statements 2019. It is also not practicable to estimate the financial
Note (C.5).
effect of any contingent liabilities that may result from these
Anti-Bribery and Export Control Matters potential violations.
SAP has received communications and whistleblower information
alleging conduct that may violate anti-bribery laws in the United
States (including the U.S. Foreign Corrupt Practices Act (FCPA)), and
other countries. The Office of Ethics and Compliance (OEC),
formerly the Legal Compliance and Integrity Office, of SAP is
F-70
(G.4) Board of Directors Stefan Ries
Chief Human Resources Officer, Labor Relations Director
Executive Board HR Strategy, Business Transformation, Leadership Development,
Talent Development
Memberships on supervisory boards and other comparable
governing bodies of enterprises, other than subsidiaries of SAP, on Supervisory Board, Rhein-Neckar Loewen GmbH, Kronau, Germany
December 31, 2019
Thomas Saueressig (from November 1, 2019)

Christian Klein
SAP Product Engineering
Co-Chief Executive Officer Global Responsibility for all SAP Applications, Product Development
Intelligent Enterprise Group and Delivery as well as Product Management for SAP S/4HANA,
Global Business Operations, IT Services Supply Chain, SME, and Industry Solutions
Jennifer Morgan Executive Board Members Who Left During 2019

Co-Chief Executive Officer Robert Enslin (until April 5, 2019)
Cloud Business Group Bernd Leukert (until March 31, 2019)
Intelligent Spend Group, Qualtrics, CX Product Engineering and Bill McDermott (until November 15, 2019)
Product Management
Board of Directors, Bank of New York Mellon, New York, NY, United
States Supervisory Board
Memberships on supervisory boards and other comparable
Adaire Fox-Martin governing bodies of enterprises, other than subsidiaries of SAP, on
Global Customer Operations December 31, 2019
Global Sales, Regional Field Organizations, Line of Business
Solutions Sales
Prof. Dr. h.c. mult. Hasso Plattner 2), 4), 6)
Chairman
Board of Directors, Equinix, Inc., Redwood City, CA, United States
(from January 1, 2020)
Margret Klein-Magar 1), 2), 3)
Michael Kleinemeier Deputy Chairperson

Vice President, Head of SAP Alumni Relations
SAP Digital Business Services
Chairperson of the Spokespersons’ Committee of Senior Managers
Global Services Delivery, Regional Field Services
of SAP SE
Supervisory Board, innogy SE, Essen, Germany (until

October 4, 2019) Pekka Ala-Pietilä 2), 6), 7)
Board of Partners, E. Merck KG, Darmstadt, Germany (from Chairman of the Board of Directors, Huhtamäki Oyj,
January 27, 2019) Espoo, Finland
Supervisory Board, Merck KGaA, Darmstadt, Germany (from
April 26, 2019) Chairman of the Board of Directors, Sanoma Corporation, Helsinki,
Finland
Luka Mucic Chairman of the Board of Directors, Netcompany A/S, Copenhagen,
Denmark (until August 20, 2019)
Chief Financial Officer
Global Finance and Administration including Investor Relations,
Internal Audit, and Data Protection & Privacy Panagiotis Bissiritsas 1), 2), 3), 5)
Member of SAP SE Works Council and Member of SAP SE Works
Supervisory Board, HeidelbergCement AG (from May 9, 2019) Council (Europe)
Jürgen Müller (from January 1, 2019) Aicha Evans 2), 4), 7)
Chief Technology Officer Chief Executive Officer and Member of the Board of Directors, Zoox,
Technology & Innovation Inc., Foster City, CA, United States
Technology and Innovation Strategy, SAP HANA,
SAP Cloud Platform, SAP Leonardo, SAP Analytics
F-71
Diane Greene 4), 6) Dr. Friederike Rotsch 2), 3), 5)
Board of Directors, Stripe Inc., San Francisco, CA, United States Group General Counsel and Head of Group Legal & Compliance,
Board of Directors, Alphabet, Inc., Mountain View, CA, United States Merck KGaA, Darmstadt, Germany
(until June 19, 2019)
Heike Steck (from May 15, 2019) 1), 4), 7)

Prof. Dr. Gesche Joost 4), 7) Senior Operations Manager
Professor for Design Research and Head of the Design Research Lab, Member of SAP SE Works Council and Member of SAP SE Works
University of Arts Berlin Council (Europe)
Supervisory Board, Ottobock SE & Co. KGaA, Duderstadt, Germany

Christa Vergien-Knopf (from May 15, 2019) 1), 4, 7)
Supervisory Board, ING-DiBa AG, Frankfurt, Germany
Member of SAP SE Works Council and Member of SAP SE Works
Council (Europe)
Monika Kovachka-Dimitrova (from May 15, 2019) 1), 4), 7)
Chief Project Expert Development
Dr. Gunnar Wiedenfels (from May 15, 2019) 3), 5)
Member of SAP SE Works Council (Europe)
Chief Financial Officer, Discovery Communications, Inc., New York,
NY, United States
Lars Lamadé 1), 2), 4)
Head of Sponsorships Europe and Asia Board of Directors, Motor Trend Group, LLC, El Segundo, CA, United
States
Supervisory Board, Rhein-Neckar Loewen GmbH, Kronau, Germany Board of Directors, OWN LLC, West Hollywood, CA, United States
Board of Directors, Scripps Networks Interactive (Asia) Pte. Ltd.,
Singapore (until April 1, 2019)
Bernard Liautaud 2), 4), 6)
Managing Partner Balderton Capital, London, United Kingdom
James Wright (from May 15, 2019) 1), 3), 4), 5)
Board of Directors, nlyte Software Ltd., London, United Kingdom Chairman of SAP SE Works Council (Europe)
Board of Directors, Vestiaire Collective SA, Levallois-Perret, France
Board of Directors, Dashlane, Inc., New York, NY, United States
Ralf Zeiger (from May 15, 2019) 1), 2), 7)
Board of Directors, Recorded Future, Inc., Cambridge, MA, United
States (until July 3, 2019) Chairman of SAP SE Works Council and Member of SAP SE Works
Board of Directors, eWise Group, Inc., Redwood City, Council (Europe)
CA, United States
Board of Directors, Qubit Digital Ltd., London, United Kingdom Supervisory Board Members Who Left During 2019
Board of Directors, Aircall.io, New York City, NY, United States
Martin Duffek (until May 15, 2019)
Board of Directors, Virtuo Technologies, Paris, France
Andreas Hahn (until May 15, 2019)
Board of Directors, The Hut Group, Manchester, United Kingdom
Dr. Erhard Schipporeit (until May 15, 2019)
Board of Directors, Peakon Aps, Copenhagen, Denmark
Robert Schuschnig-Fowler (until May 15, 2019)
Board of Directors, Tim Talent SAS, Paris, France
Dr. Sebastian Sick (until May 15, 2019)
Board of Directors, Citymapper Ltd., London, United Kingdom
Pierre Thiollet (until May 15, 2019)
Board of Directors, Toucan Toco SAS, Paris, France (from
November 14, 2019)
1)
Board of Directors, Containous SAS, Lyon, France (from Appointed by the SAP SE Works Council (Europe)
2)
December 16, 2019) Member of the Company’s General and Compensation Committee
3)
Member of the Company’s Audit Committee
4)
Member of the Company’s Technology and Strategy Committee
Gerhard Oswald (from January 1, 2019) 3), 4), 5), 7) 5)
Member of the Company’s Finance and Investment Committee
Managing Director of Oswald Consulting GmbH, Walldorf, Germany 6)
Member of the Company’s Nomination Committee
7)
Member of the Company’s People and Organization Committee
Advisory Board, TSG 1899 Hoffenheim Fußball-Spielbetriebs GmbH,
Sinsheim, Germany
Christine Regitz 1), 2), 4), 5)

Vice President User Experience
Chief Product Expert
F-72
(G.5) Executive and Supervisory Board The total annual compensation of the Supervisory Board
members is as follows:
Compensation
Accounting Policy Supervisory Board Compensation
The share-based payment amounts disclosed below in the table € thousands 2019 2018 2017
“Executive Board Compensation” are based on the grant date fair
Total compensation 3,770 3,702 3,663
value of the restricted share units (RSUs) and performance share
Thereof fixed compensation 3,218 3,162 3,135
units (PSUs), respectively, issued to Executive Board members
during the reporting period under the LTI 2016 Plan. Thereof committee 553 540 528
remuneration
In the table “Share-Based Payment for Executive Board Members,”
the share-based payment expense is the amount recorded in profit
or loss under IFRS 2 (Share-Based Payment) in the respective The Supervisory Board members do not receive any share-based
period. payment for their services. As far as members who are employee
representatives on the Supervisory Board receive share-based
The total compensation of the Executive Board members for each
payment, such compensation is for their services as employees only
of the years 2019, 2018, and 2017 was as follows:
and is unrelated to their status as members of the Supervisory
Executive Board Compensation Board.
€ thousands 2019 2018 2017 Payments to/DBO for Former Executive Board
Short-term employee benefits 17,378 18,652 16,634
Members
Share-based payment1 ) 32,393 23,646 25,723 € thousands 2019 2018 2017
Subtotal1) 49,771 42,298 42,357 Payments 2,081 2,054 1,997
DBO 12/31 44,586 38,374 39,993

Post-employment benefits 2,825 1,106 1,312
Thereof defined-benefit 2,056 250 423

SAP did not grant any compensation advance or credit to, or
Thereof defined-contribution 769 856 889 enter into any commitment for the benefit of, any member of the
Total1) 52,596 43,404 43,669 Executive Board or Supervisory Board in 2019, 2018, or 2017.
1)
Portion of total executive compensation allocated to the respective year
(G.6) Related Party Transactions Other
Than Board Compensation
Share-Based Payment for Executive Board
Members Certain Supervisory Board members of SAP SE currently hold, or
held within the last year, positions of significant responsibility with
2019 2018 2017
other entities. We have relationships with certain of these entities in
Number of RSUs granted 137,619 118,072 117,929 the ordinary course of business, whereby we buy and sell products,
Number of PSUs granted 206,428 177,106 176,886 assets, and services at prices believed to be consistent with those
negotiated at arm’s length between unrelated parties.
Total expense in € thousands 44,447 8,054 19,068
Companies controlled by Hasso Plattner, Chairman of the
Supervisory Board of SAP SE and Chief Software Advisor of SAP,
The defined benefit obligation (DBO) for pensions to Executive engaged in the following transactions with SAP: providing consulting
Board members and the annual pension entitlement of the members services to SAP, receiving sport sponsoring from SAP, making
of the Executive Board on reaching age 62 based on entitlements purchases of SAP products and services, and purchasing a house
from performance-based and salary-linked plans were as follows: from SAP.
Occasionally, members of the Executive Board of SAP SE obtain
Retirement Pension Plan for Executive Board
services from SAP for which they pay a consideration consistent with
Members
those negotiated at arm’s length between unrelated parties.
€ thousands 2019 2018 2017 All amounts related to the abovementioned transactions were
DBO 12/31 5,497 3,441 3,191 immaterial to SAP in all periods presented.
In total, we sold products and services to companies controlled by
Annual pension entitlement 215 192 148
members of the Supervisory Board in the amount of €9 million
(2018: €37 million), we bought products and services from such
companies in the amount of €2 million (2018: €3 million), and we
provided sponsoring and other financial support to such companies
in the amount of €4 million (2018: €4 million). Outstanding balances
at year end from transactions with such companies were €0 million
(2018: €3 million) for amounts owed to such companies and
€0 million (2018: €28 million) for amounts owed by such companies.
F-73
All of these balances are unsecured and interest-free and settlement For information about the compensation of our Executive Board
is expected to occur in cash. Commitments (the longest of which is and Supervisory Board members, see Note (G.5).
for four years) made by us to purchase further goods or services
from these companies and to provide further sponsoring and other
financial support amount to €14 million as at December 31, 2019 (G.7) Principal Accountant Fees and
(2018: €191 million). Services
In total, we sold services to members of the Executive Board and
the Supervisory Board in the amount of €0 million (2018: At the Annual General Meeting of Shareholders held on
€0 million), and we received services from members of the May 15, 2019, our shareholders elected KPMG AG
Supervisory Board (including services from employee Wirtschaftsprüfungsgesellschaft (KPMG) as SAP’s independent
representatives on the Supervisory Board in their capacity as auditor for 2019. KPMG has been the Company’s principal auditor
employees of SAP) in the amount of €2 million (2018: €1 million). since the fiscal year 2002. KPMG and other firms in the global KPMG
Amounts owed, but not yet paid, to Supervisory Board members network charged the following fees to SAP for audit and other
from these transactions were €0 million as at December 31, 2019 professional services related to 2019 and the previous years:
(2018: €0 million). All of these balances are unsecured and interest-
free and settlement is expected to occur in cash.
€ millions 2019 2018 2017
KPMG AG Foreign Total KPMG AG Foreign Total KPMG AG Foreign Total

(Germany) KPMG Firms (Germany) KPMG Firms (Germany) KPMG Firms
Audit fees 3 7 10 3 6 9 3 7 10
Audit-related fees 0 1 1 0 0 0 0 0 0
Tax fees 0 0 0 0 0 0 0 0 0
All other fees 0 0 0 0 0 0 0 0 0
Total 3 8 10 3 6 9 3 7 10
Audit fees are the aggregate fees charged by KPMG for auditing (G.9) Scope of Consolidation,
our consolidated financial statements and the statutory financial
statements of SAP SE and its subsidiaries. Audit-related fees are
Subsidiaries and Other Equity
fees charged by KPMG for assurance and related services that are Investments
reasonably related to the performance of the audit as well as fees
Entities Consolidated in the Financial Statements
charged by KPMG for service organization attestation procedures.
Total
12/31/2017 227
(G.8) Events After the Reporting Period 59
Additions
At the beginning of 2020, SAP modified its organizational Disposals –21
structure to strengthen the focus on customer success and
12/31/2018 265
employee engagement while driving innovation and simplicity. The
set-up moving forward aims at raising synergies, reducing Additions 20
complexity while initiating key steps towards further integration. The Disposals –21
organizational changes will also affect SAP’s segment reporting. SAP
12/31/2019 264
has already started the process of redefining its management
reporting under the new organizational structure, which the segment
The additions relate to legal entities added in connection with
reporting will follow.
Other than that, no events have occurred since acquisitions and foundations. The disposals are mainly due to
mergers and liquidations of legal entities.
December 31, 2019, that have a material impact on the Company’s
Consolidated Financial Statements.
F-74
Subsidiaries
Major Subsidiaries
Name and Location of Company Owner Total Revenue Profit/Loss (–) Total Equity as Number of Foot-
-ship in 20191) After Tax at 12/31/2019 1) Employees as at note
for 20191) 12/31/20192)
% € thousands € thousands € thousands
Ariba, Inc., Palo Alto, CA, United States 100.0 1,304,139 332,200 4,376,579 1,928
Concur Technologies, Inc., Bellevue, WA, United States 100.0 1,804,158 258,770 7,680,075 3,788
LLC SAP CIS, Moscow, Russia 100.0 482,524 –21,171 47,192 822
Qualtrics, LLC, Wilmington, DE, United States 100.0 418,420 –535,867 6,124,414 2,112 4)
SAP (Schweiz) AG, Biel, Switzerland 100.0 924,676 99,481 145,085 769
SAP (UK) Limited, Feltham, United Kingdom 100.0 1,246,454 41,886 10,166 1,762 10)
SAP America, Inc., Newtown Square, PA, United States 100.0 6,152,418 –781,584 19,587,457 8,162
SAP Argentina S.A., Buenos Aires, Argentina 100.0 158,007 –34,937 16,846 918 16)
SAP Asia Pte Ltd, Singapore, Singapore 100.0 515,034 –32,511 –14,925 1,178 16)
SAP Australia Pty Ltd, Sydney, Australia 100.0 738,223 –11,496 28,411 1,274
SAP Brasil Ltda, São Paulo, Brazil 100.0 556,269 –35,373 –216 2,029
SAP Canada Inc., Toronto, Canada 100.0 965,891 38,905 507,722 2,946
SAP China Co., Ltd., Shanghai, China 100.0 1,019,778 –4,633 –196,735 5,619 16)
SAP Deutschland SE & Co. KG, Walldorf, Germany 100.0 4,538,364 750,926 1,614,340 4,763 7), 9)
SAP España – Sistemas, Aplicaciones y Productos en la Informática, 100.0 542,651 34,834 271,147 724
S.A., Madrid, Spain
SAP France, Levallois Perret, France 100.0 1,151,489 124,438 1,588,563 1,503
SAP Hungary Rendszerek, Alkalmazások és Termékek az 100.0 124,890 –572 19,270 952
Adatfeldolgozásban Informatikai Kft., Budapest, Hungary
SAP India Private Limited, Bangalore, India 100.0 637,052 71,940 382,053 2,045
SAP Industries, Inc., Newtown Square, PA, United States 100.0 679,636 174,268 879,257 323
SAP Italia Sistemi Applicazioni Prodotti in Data Processing S.p.A., 100.0 582,698 29,934 336,995 720
Vimercate, Italy
SAP Japan Co., Ltd., Tokyo, Japan 100.0 1,167,363 108,649 290,021 1,291
SAP Labs India Private Limited, Bangalore, India 100.0 577,030 43,225 173,224 8,466
SAP Labs, LLC, Palo Alto, CA, United States 100.0 649,577 –61,161 426,810 1,803
SAP México S.A. de C.V., Mexico City, Mexico 100.0 427,159 19,211 37,109 886
SAP National Security Services, Inc., Newtown Square, PA, United 100.0 699,688 169,664 496,277 475
States
SAP Nederland B.V., 's-Hertogenbosch, the Netherlands 100.0 670,660 356,717 195,122 589 11)
SAP Service and Support Centre (Ireland) Limited, Dublin, Ireland 100.0 201,427 16,186 81,315 1,615
SuccessFactors, Inc., South San Francisco, CA, United States 100.0 881,532 510,682 4,182,900 941
F-75
Other Subsidiaries3) Name and Location of Company Owner- Foot-
ship note
Name and Location of Company Owner- Foot-
ship note %
% Cleartrip Packages and Tours Private Limited, Mumbai,

100.0
India
“SAP Kazakhstan“ LLP, Almaty, Kazakhstan 100.0
ClearTrip Private Limited, Mumbai, India 100.0
110405, Inc., Newtown Square, PA, United States 100.0
Cleartrip Travel & Holidays LLC, Dubai, United Arab 4), 5)
49.0
Abakus Ukraine Limited Liability Company, Kiev, Ukraine 100.0 Emirates
Clicktools Limited, Dorset, United Kingdom 100.0 10)

Ambin Properties Proprietary Limited, Johannesburg,
100.0
South Africa
CNQR Operations Mexico S. de. R.L. de. C.V., San Pedro
100.0
Apex Expert Solutions LLC, Arlington, VA, United States 100.0 Garza Garcia, Mexico
Concur (Canada), Inc., Toronto, Canada 100.0

Ariba Czech s.r.o., Prague, Czech Republic 100.0
Concur (France) SAS, Paris, France 100.0

Ariba India Private Limited, Gurgaon, India 100.0
Concur (Germany) GmbH, Frankfurt am Main, Germany 100.0 8), 9)

Ariba International Holdings, Inc., Wilmington, DE, United
100.0
States
Concur (Japan) Ltd., Tokyo, Japan 73.6
Ariba International Singapore Pte Ltd, Singapore,
100.0
Singapore Concur (New Zealand) Limited, Wellington, New Zealand 100.0 14)
Ariba International, Inc., Wilmington, DE, United States 100.0 Concur (Philippines) Inc., Makati City, Philippines 100.0
Ariba Slovak Republic, s.r.o., Košice, Slovakia 100.0 Concur (Switzerland) GmbH, Zurich, Switzerland 100.0 13)
Ariba Software Technology Services (Shanghai) Co., Ltd.,

100.0 Concur Czech (s.r.o.), Prague, Czech Republic 100.0
Shanghai, China
Ariba Technologies India Private Limited, Bangalore, India 100.0 Concur Holdings (France) SAS, Paris, France 100.0
Ariba Technologies Netherlands B.V., 's-Hertogenbosch, Concur Holdings (Netherlands) B.V., Amsterdam, the 11)
100.0 11) 100.0
the Netherlands Netherlands
Beijing Zhang Zhong Hu Dong Information Technology Concur Technologies (Australia) Pty. Limited, Sydney,
0 5) 100.0
Co., Ltd., Beijing, China Australia
Business Objects Holding B.V., 's-Hertogenbosch, the Concur Technologies (Hong Kong) Limited, Hong Kong,
100.0 11) 100.0
Netherlands China
Business Objects Option LLC, Wilmington, DE, United Concur Technologies (India) Private Limited, Bangalore,
100.0 100.0
States India
Concur Technologies (Singapore) Pte Ltd, Singapore, 16)

Business Objects Software Limited, Dublin, Ireland 100.0 100.0
Singapore
Callidus Software Inc., Dublin, CA, United States 100.0 Concur Technologies (UK) Limited, London, United 10)
100.0
Kingdom
Callidus Software Ltd., London, United Kingdom 100.0 10)
10)
ConTgo Consulting Limited, London, United Kingdom 100.0
Callidus Software Pty. Ltd., Sydney, Australia 100.0
ConTgo Limited, London, United Kingdom 100.0 10)
CallidusCloud (India) Pvt. Ltd., Hyderabad, India 100.0

ConTgo Pty. Ltd., Sydney, Australia 100.0
CallidusCloud (Malaysia) Sdn. Bhd., Kuala Lumpur,
100.0
Malaysia Crystal Decisions (Ireland) Limited, Dublin, Ireland 100.0 12)
CallidusCloud Holdings Pty. Ltd., Sydney, Australia 100.0 Crystal Decisions Holdings Limited, Dublin, Ireland 100.0 12)
CallidusCloud Pty. Ltd., Sydney, Australia 100.0 Crystal Decisions UK Limited, London, United Kingdom 100.0 10)
Christie Partners Holding C.V., 's-Hertogenbosch, the

100.0 Datahug Limited, Dublin, Ireland 100.0
Netherlands
Delighted, LLC, Wilmington, DE, United States 100.0 4)
C-Learning Pty. Ltd., Sydney, Australia 100.0
Dorset Acquisition Corp., Dublin, CA, United States 100.0
ClearTrip Inc. (Mauritius), Ebene, Mauritius 100.0
ClearTrip Inc., George Town, Cayman Islands 57.0
Cleartrip MEA FZ LLC, Dubai, United Arab Emirates 100.0
F-76
Name and Location of Company Owner- Foot- Name and Location of Company Owner- Foot-
ship note ship note
% %
Ebreez Egypt LLC, Cairo, Egypt 100.0 PT SAP Indonesia, Jakarta, Indonesia 99.0
EssCubed Procurement Pty. Ltd., Johannesburg, South Q (AGF2) Inc., Wilmington, DE, United States 100.0 4)
100.0
Africa
QAL Technologies Pty Ltd, Sydney, Australia 100.0 4)
Extended Systems, Inc., San Ramon, CA, United States 100.0
QCL Techonologies Ltd., Toronto, Canada 100.0 4)
Fieldglass Europe Limited, London, United Kingdom 100.0 10)
4)
QDL Technologies GmbH, Munich, Germany 100.0
Financial Fusion, Inc., San Ramon, CA, United States 100.0
QFL Technologies Sarl, Paris, France 100.0 4)
Flyin Holding Limited, Dubai, United Arab Emirates 100.0
QIL Technologies Limited, Dublin, Ireland 100.0 4)
Flyin Travel and Tourism Private Limited, Hyderabad,
100.0
India 4)
QPL Technologies sp. z o.o., Kraków, Poland 100.0
Flyin Travel Limited, Limassol, Cyprus 100.0
QSL Technologies Pte. Ltd., Singapore, Singapore 100.0 4)
Flyin Travel S.A.E, Cairo, Egypt 100.0

Quadrem Africa Pty. Ltd., Johannesburg, South Africa 100.0
FreeMarkets Ltda., São Paulo, Brazil 100.0
Quadrem Brazil Ltda., Rio de Janeiro, Brazil 100.0
Gigya UK Ltd, London, United Kingdom 100.0 10), 16)
Quadrem Chile Ltda., Santiago de Chile, Chile 100.0
GlobalExpense Limited, London, United Kingdom 100.0 10)
Quadrem International Ltd., Hamilton, Bermuda 100.0
Hipmunk, Inc., San Francisco, CA, United States 100.0
Quadrem Netherlands B.V., Amsterdam, the Netherlands 100.0 11)
hybris (US) Corp., Wilmington, DE, United States 100.0

Quadrem Overseas Cooperatief U.A., Amsterdam, the 11)
100.0
8), 9) Netherlands
hybris GmbH, Munich, Germany 100.0
Quadrem Peru S.A.C., Lima, Peru 100.0
Inxight Federal Systems Group, Inc., Wilmington, DE,
100.0
United States 4)
Qualtrics International Inc., Wilmington, DE, United States 100.0
4)
IP Asset Holdings, LLC, Provo, UT, United States 100.0
Qualtrics Japan LLC, Tokyo, Japan 100.0 4)
LeadFormix, Inc., Dublin, CA, United States 100.0

4)
Qualtrics Sweden AB, Stockholm, Sweden 100.0
10)
Learning Heroes Ltd., Cheshire, United Kingdom 100.0
Qualtrics Technologies Spain, S.L.U., Madrid, Spain 100.0 4)
Learning Seat Borrowings Pty. Ltd., Sydney, Australia 100.0

QUL Technologies Limited, London, United Kingdom 100.0 4), 10)
Learning Seat Group Pty. Ltd., Sydney, Australia 100.0

SAP (Beijing) Software System Co., Ltd., Beijing, China 100.0
Learning Seat Holdings Pty. Ltd., Sydney, Australia 100.0
SAP Andina y del Caribe C.A., Caracas, Venezuela 100.0 16)
Learning Seat Pty. Ltd., Sydney, Australia 100.0

SAP AZ LLC, Baku, Azerbaijan 100.0
LLC “SAP Labs“, Moscow, Russia 100.0
SAP Belgium – Systems, Applications and Products SA,
100.0
16) Brussels, Belgium
LLC “SAP Ukraine”, Kiev, Ukraine 100.0
SAP Beteiligungs GmbH, Walldorf, Germany 100.0
Merlin Systems Oy, Espoo, Finland 100.0
SAP Bulgaria EOOD, Sofia, Bulgaria 100.0
Nihon Ariba K.K., Tokyo, Japan 100.0
SAP Business Services Center Nederland B.V., 's- 11)
Noteshark, LLC, Chantilly, VA, United States 51.0 100.0
Hertogenbosch, the Netherlands
OrientDB Limited, London, United Kingdom 100.0 10) SAP Chile Limitada, Santiago, Chile 100.0 16)
Outerjoin, Inc., Dublin, CA, United States 100.0 SAP China Holding Co., Ltd., Beijing, China 100.0
OutlookSoft Deutschland GmbH, Walldorf, Germany 100.0 8), 9) SAP Colombia S.A.S., Bogotá, Colombia 100.0 16)
Plat.One Inc., Palo Alto, CA, United States 100.0 SAP Commercial Services Ltd., Valletta, Malta 100.0
Plat.One Lab Srl, Bogliasco, Italy 100.0 SAP Costa Rica, S.A., San José, Costa Rica 100.0 16)
F-77
ship note ship note
% %
SAP ČR, spol. s r.o., Prague, Czech Republic 100.0 SAP Malta Investments Ltd., Valletta, Malta 100.0
SAP Cyprus Limited, Nicosia, Cyprus 100.0 SAP MENA FZ L.L.C., Dubai, United Arab Emirates 100.0
SAP d.o.o., Zagreb, Croatia 100.0 SAP Middle East and North Africa L.L.C., Dubai, United 5), 16)
49.0
Arab Emirates
SAP Danmark A/S, Copenhagen, Denmark 100.0
SAP Nederland Holding B.V., 's-Hertogenbosch, the 11)
100.0
Netherlands
SAP Dritte Beteiligungs- und Vermögensverwaltungs
100.0
GmbH, Walldorf, Germany
SAP New Zealand Limited, Auckland, New Zealand 100.0
16)
SAP East Africa Limited, Nairobi, Kenya 100.0
SAP Norge AS, Lysaker, Norway 100.0
SAP Egypt LLC, Cairo, Egypt 100.0 16)
SAP North West Africa Ltd, Casablanca, Morocco 100.0 16)
SAP EMEA Inside Sales S.L., Madrid, Spain 100.0

SAP Österreich GmbH, Vienna, Austria 100.0
SAP Erste Beteiligungs- und Vermögensverwaltungs 8), 9)
100.0 SAP Perú S.A.C., Lima, Peru 100.0 16)
SAP Estonia OÜ, Tallinn, Estonia 100.0 SAP Philippines, Inc., Makati, Philippines 100.0 16)
SAP Financial, Inc., Toronto, Canada 100.0 SAP Polska Sp. z o.o., Warsaw, Poland 100.0
SAP Finland Oy, Espoo, Finland 100.0 SAP Portals Europe GmbH, Walldorf, Germany 100.0
SAP Foreign Holdings GmbH, Walldorf, Germany 100.0 SAP Portals Holding Beteiligungs GmbH, Walldorf,
100.0
Germany
SAP France Holding, Levallois Perret, France 100.0
SAP Portals Israel Ltd., Ra'anana, Israel 100.0
SAP Global Marketing, Inc., New York, NY, United States 100.0
SAP Portugal – Sistemas, Aplicações e Produtos
Informáticos, Sociedade Unipessoal, Lda., Porto Salvo, 100.0
SAP Hellas S.A., Athens, Greece 100.0 Portugal
SAP Hong Kong Co., Ltd., Hong Kong, China 100.0 16)
SAP Projektverwaltungs- und Beteiligungs GmbH,
100.0
Walldorf, Germany
SAP Hosting Beteiligungs GmbH, St. Leon-Rot, Germany 100.0 8), 9)
SAP Public Services, Inc., Washington, DC, United States 100.0

SAP India (Holding) Pte Ltd, Singapore, Singapore 100.0
8), 9), 16)
SAP Puerto Rico GmbH, Walldorf, Germany 100.0
SAP International Panama, S.A., Panama City, Panama 100.0
SAP Retail Solutions Beteiligungsgesellschaft mbH,
100.0
SAP International, Inc., Miami, FL, United States 100.0 Walldorf, Germany
SAP Romania SRL, Bucharest, Romania 100.0

SAP Investments, Inc., Wilmington, DE, United States 100.0
SAP Saudi Arabia Software Services Ltd, Riyadh,
SAP Ireland Limited, Dublin, Ireland 100.0 12) 100.0
Kingdom of Saudi Arabia
SAP Ireland US - Financial Services Designated Activity SAP Saudi Arabia Software Trading Ltd, Riyadh, Kingdom
100.0 75.0
Company, Dublin, Ireland of Saudi Arabia
16)
SAP Israel Ltd., Ra'anana, Israel 100.0 SAP Sechste Beteiligungs- und Vermögensverwaltungs 8), 9)
100.0
SAP Korea Ltd., Seoul, South Korea 100.0
SAP Services s.r.o., Prague, Czech Republic 100.0
SAP Labs Bulgaria EOOD, Sofia, Bulgaria 100.0
SAP Siebte Beteiligungs- und Vermögensverwaltungs 8), 9)
100.0
SAP Labs Finland Oy, Espoo, Finland 100.0
SAP sistemi, aplikacije in produkti za obdelavo podatkov
SAP Labs France SAS, Mougins, France 100.0 100.0
d.o.o., Ljubljana, Slovenia
SAP Labs Israel Ltd., Ra'anana, Israel 100.0 SAP Slovensko s.r.o., Bratislava, Slovakia 100.0
SAP Labs Korea, Inc., Seoul, South Korea 100.0 SAP Software and Services LLC, Doha, Qatar 49.0 5), 16)
SAP Latvia SIA, Riga, Latvia 100.0 SAP Svenska Aktiebolag, Stockholm, Sweden 100.0
SAP Malaysia Sdn. Bhd., Kuala Lumpur, Malaysia 100.0 SAP System Application and Products Asia Myanmar
100.0
Limited, Yangon, Myanmar
F-78
ship note ship note
% %
SAP Systems, Applications and Products in Data Sybase India Ltd., Mumbai, India 100.0
100.0
Processing (Thailand) Ltd., Bangkok, Thailand
Sybase International Holdings Corporation, LLC, San
SAP Taiwan Co., Ltd., Taipei, Taiwan 100.0 100.0
Ramon, CA, United States
SAP Technologies Inc., Palo Alto, CA, United States 100.0 Sybase Philippines, Inc., Makati City, Philippines 100.0
SAP Training and Development Institute FZCO, Dubai, Sybase Software (India) Private Ltd., Mumbai, India 100.0
100.0
United Arab Emirates
Sybase, Inc., San Ramon, CA, United States 100.0
SAP Türkiye Yazilim Üretim ve Ticaret A.Ş., Istanbul,
100.0
Turkey
Systems Applications Products (Africa Region)
100.0
Proprietary Limited, Johannesburg, South Africa
SAP UAB, Vilnius, Lithuania 100.0
Systems Applications Products (Africa) Proprietary
SAP Ventures Investment GmbH, Walldorf, Germany 100.0 8), 9) 100.0
Limited, Johannesburg, South Africa
SAP Vierte Beteiligungs- und Vermögensverwaltungs Systems Applications Products (South Africa) 16)
100.0 70.0
GmbH, Walldorf, Germany Proprietary Limited, Johannesburg, South Africa
SAP Vietnam Company Limited, Ho Chi Minh City, Systems Applications Products Nigeria Limited, Victoria 16)
100.0 100.0
Vietnam Island, Nigeria
SAP West Balkans d.o.o., Belgrade, Serbia 100.0 Technology Management Associates Inc., Herndon, VA,
100.0
United States
SAP Zweite Beteiligungs- und Vermögensverwaltungs 8), 9)
100.0 Temkin Group, LLC, Wilmington, DE, United States 100.0 4)
SAP.io Fund, L.P., San Francisco, CA, United States 0 6) TM Property Holdings, LLC, Wilmington, DE, United 4)
100.0
States
Sapphire Fund Investments II Holdings, LLC, Palo Alto, 6)
100.0 TomorrowNow, Inc., Bryan, TX, United States 100.0
CA, United States
Sapphire Fund Investments II, L.P., Palo Alto, CA, United 6) TRX Europe Limited, London, United Kingdom 100.0 10)
0
States
TRX Technologies India Private Limited, Raman Nagar,
Sapphire Fund Investments III, L.P., Palo Alto, CA, United 100.0
0 6) India
States
10)
TRX UK Limited, London, United Kingdom 100.0
Sapphire SAP HANA Fund of Funds, L.P., Palo Alto, CA, 6)
0
United States
TRX, Inc., Bellevue, WA, United States 100.0
Sapphire Ventures Fund I, L.P., Palo Alto, CA, United 6)
0
States Volume Integration, Inc., VA, United States 100.0
Sapphire Ventures Fund II, L.P., Palo Alto, CA, United 6) Webcom, Inc., Dublin, CA, United States 100.0
0
States
Sapphire Ventures Fund III, L.P., Palo Alto, CA, United 6)

1)
These figures are based on our local IFRS financial statements prior to
0
States eliminations resulting from consolidation and therefore do not reflect the
contribution of these companies included in the Consolidated Financial
Sapphire Ventures Fund IV, L.P., Palo Alto, CA, United 6) Statements. The translation of the equity into Group currency is based on period-
0
States end closing exchange rates, and on average exchange rates for revenue and net
income/loss.
SAPV (Mauritius), Ebene, Mauritius 100.0 6) 2)
As at December 31, 2019, including managing directors, in FTE.
3)
Saudi Ebreez Company for Electronic Services LLC, Figures for profit/loss after tax and total equity pursuant to HGB, section 285
100.0 and section 313 are not disclosed if they are of minor significance for a fair
Riyadh, Kingdom of Saudi Arabia
presentation of the profitability, liquidity, capital resources, and financial position
4) of SAP SE, pursuant to HGB, section 313 (2) sentence 3 no. 4 and section 286 (3)
Statwing, LLC, Wilmington, DE, United States 100.0 sentence 1 no. 1.
4)
16) Consolidated for the first time in 2019.
SuccessFactors (Philippines), Inc., Pasig City, Philippines 100.0
5)
Agreements with the other shareholders provide that SAP SE fully controls the
SuccessFactors Cayman, Ltd., Grand Cayman, Cayman entity.
100.0
Islands 6)
SAP SE has the following structured entities: SAP.io Fund, L.P., Sapphire Fund
Investments II Holdings, LLC, Sapphire Fund Investments II, L.P., Sapphire Fund
Sybase 365 Ltd., Tortola, British Virgin Islands 100.0 Investments III, L.P., Sapphire SAP HANA Fund of Funds, L.P., Sapphire Ventures
Fund I, L.P., Sapphire Ventures Fund II, L.P., Sapphire Ventures Fund III, L.P,
Sybase 365, LLC, San Ramon, CA, United States 100.0 Sapphire Ventures Fund IV, L.P., SAPV (Mauritius). The results of operations of
these entities are included in SAP’s consolidated financial statements in
15), 16) accordance with IFRS 10 (Consolidated Financial Statements).
Sybase Angola, LDA, Luanda, Angola 100.0
7)
Entity whose personally liable partner is SAP SE.
Sybase Iberia S.L., Madrid, Spain 100.0 8)
Entity with (profit and) loss transfer agreement.
F-79
9) 12)
Pursuant to HGB, section 264 (3) or section 264b, the subsidiary is exempt from Pursuant to Irish Companies Act 2014, chapter 16 of Part 6, section 365, the
applying certain legal requirements to their statutory stand-alone financial entity is exempt from having its financial statements audited on the grounds that
statements including the requirement to prepare notes to the financial the entity is entitled to the benefits from a dormant entity exemption in respect
statements and a review of operations, the requirement of independent audit, of its financial year ended December 31, 2019.
and the requirement of public disclosure. 13)
Pursuant to article 727a, paragraph 2 of the Swiss Code of Obligations, the entity
10)
Pursuant to sections 479A to 479C of the UK Companies Act 2006, the entity is is exempt from having its financial statements audited in respect of its financial
exempt from having its financial statements audited on the basis that SAP SE has year ended December 31, 2019, or in respect of its financial year ended
provided a guarantee of the entity's liabilities in respect of its financial year ended September 30, 2019, respectively.
December 31, 2019, or in respect of its financial year ended September 30, 2019, 14)
Pursuant to section 211 (3) of the New Zealand Companies Act 1993 and section
respectively.
45 (2) of the Financial Reporting Act 2013, the entity had approved exclusions
11)
Pursuant to article 2:403 of the Dutch Civil Code, the entity is exempt from and is not required to lodge audited financial statements in respect of its financial
applying certain legal requirements to their statutory stand-alone financial year ended September 30, 2019.
statements including the requirement to prepare the financial statements, the 15)
Pursuant to Angola Tax Law and Presidential Decree no. 147/13 of
requirement of independent audit, and the requirement of public disclosure, on
October 1, 2013, the entity does not qualify as being a Large Taxpayer and
the basis that SAP SE has provided a guarantee of the entity's liabilities in therefore is exempt from having its financial statements audited in respect of its
respect of its financial year ended December 31, 2019, or in respect of its financial year ended December 31, 2019.
financial year ended September 30, 2019, respectively.
16)
Entity with support letter issued by SAP SE.
Name and Location of Company
Other Equity Investments Data Collective II L.P., San Francisco, CA, United States
Data Collective III L.P., San Francisco, CA, United States

Name and Location of Company Owner-
ship Data Collective IV, L.P., San Francisco, CA, United States
%
DataRobot, Inc., Boston, MA, United States
Joint Arrangements and Investments in Associates
Dharma Platform, Inc., Washington DC, United States
China DataCom Corporation Limited, Guangzhou, China 28.30
Digital Hub Rhein-Neckar GmbH, Ludwigshafen, Germany
Convercent, Inc., Denver, CO, United States 37.12
EIT ICT Labs Germany GmbH, Berlin, Germany
Procurement Negócios Eletrônicos S/A, Rio de Janeiro, Brazil 17.00
FeedZai S.A., Lisbon, Portugal
Visage Mobile, Inc., Milwaukee, WI, United States 4.50
Felix Capital Fund III, L.P., London, United Kingdom
Follow Analytics, Inc., San Francisco, CA, United States
Name and Location of Company Greater Pacific Capital (Cayman) L.P., Grand Cayman, Cayman Islands
Haystack Ventures V, L.P., Mill Valley, CA, United States

Equity Investments with Ownership of at Least 5%
IDG Ventures USA III, L.P., San Francisco, CA, United States
83North IV, L.P., Hertzalia, Israel
IEX Group, Inc., New York, NY, United States
Alation, Inc., Redwood City, CA, United States
InfluxData, Inc., San Francisco, CA, United States
Alchemist Accelerator Fund I LLC, San Francisco, CA, United States
InnovationLab GmbH, Heidelberg, Germany
All Tax Platform - Solucoes Tributarias S.A., São Paulo, Brazil
innoWerft Technologie- und Gründerzentrum Walldorf Stiftung GmbH,
Amplify Partners II L.P., Menlo Park, CA, United States Walldorf, Germany
Amplify Partners III, L.P., Menlo Park, CA, United States JFrog, Ltd., Netanya, Israel
Amplify Partners, L.P., Menlo Park, CA, United States Kaltura, Inc., New York, NY, United States
AP Opportunity Fund, LLC, Menlo Park, CA, United States Kavacha TopCo LLC, New York, NY, United States
Auth0, Inc., Bellevue, WA, United States Landlog Limited, Tokyo, Japan
Blue Yard Capital I GmbH & Co. KG, Berlin, Germany LeanData, Inc., Sunnyvale, CA, United States
Brightfield Holdings, Inc., New York, NY, United States Local Globe VII, L.P., St. Peter Port, Guernsey, Channel Islands
BY Capital 2 GmbH & Co. KG, Berlin, Germany Local Globe VIII, L.P., St. Peter Port, Guernsey, Channel Islands
Catchpoint Systems, Inc., New York, NY, United States Localglobe X Limited, Guernsey, Channel Islands
Char Software, Inc., Boston, MA, United States Mango Capital 2018, L.P., Los Altos, CA, United States
Clari, Inc., Sunnyvale, CA, United States Matillion Ltd., Altrincham, United Kingdom
Contentful GmbH, Berlin, Germany Mosaic Ventures I, L.P., London, United Kingdom
Costanoa Venture Capital II L.P., Palo Alto, CA, United States MVP Strategic Partnership Fund GmbH & Co. KG, Munich, Germany
Costanoa Venture Capital III L.P., Palo Alto, CA, United States Narrative Science, Inc., Chicago, IL, United States
Costanoa Venture Capital QZ, LLC, Palo Alto, CA, United States Nor1, Inc., Santa Clara, CA, United States
Culture Amp, Inc., San Francisco, CA, United States Notation Capital II, L.P., Brooklyn, NY, United States
F-80
Name and Location of Company
Notation Capital, L.P., Brooklyn, NY, United States
OpenX Software Limited, Pasadena, CA, United States
OpsRamp, Inc., San Jose, CA, United States
Outreach Corporation, Seattle, WA, United States
Pendo.io, Inc., Raleigh, NC, United States
Pheonix Labs Canada, ULC, Burnaby, BC, Canada
PivotNorth Early Fund I, L.P., Atherton, CA, United States
Point Nine Annex GmbH & Co. KG, Berlin, Germany
Point Nine Capital Fund II GmbH & Co. KG, Berlin, Germany
Point Nine Capital Fund III GmbH & Co. KG, Berlin, Germany
Point Nine Capital Fund IV GmbH & Co. KG, Berlin, Germany
Portworx Inc., Los Altos, CA, United States
Project 44, Inc., Chicago, IL, United States
PubNub, Inc., San Francisco, CA, United States
Punchh, Inc., San Mateo, CA, United States
Realize Corporation, Tokyo, Japan
Reltio, Inc., Redwood Shores, CA, United States
Ridge Ventures IV, L.P., San Francisco, CA, United States
SASS Labs, Inc., Palo Alto, CA, United States
Scryer, Inc., New York, NY, United States
Side, Inc., San Francisco, CA, United States
Smart City Planning, Inc., Tokyo, Japan
SportsTech Fund, L.P., Palo Alto, CA, United States
SportsTech Parallel Fund, L.P., Palo Alto, CA, United States
Spring Mobile Solutions, Inc., Reston, VA, United States
Storm Ventures V, L.P., Menlo Park, CA, United States
SumoLogic, Inc., Redwood City, CA, United States
Sun Basket, Inc., San Francisco, CA, United States
SV Angel IV, L.P., San Francisco, CA, United States
T3C Inc., San Jose, CA, United States
The Currency Cloud Group Limited, London, United Kingdom
The SaaStr Fund, L.P., Palo Alto, CA, United States
Third Kind Venture Capital II, L.P., New York, NY, United States
UJET, Inc., San Francisco, CA, United States
Upfront V, L.P., Santa Monica, CA, United States
Wandera, Inc., San Francisco, CA, United States
F-81

Nyse Sap 2019

Uploaded by

Copyright:

Available Formats

Nyse Sap 2019

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Nyse Sap 2019

Uploaded by

Copyright:

Available Formats

SAP

Ordinary Shares, without nominal value New York Stock Exchange*

[THIS PAGE INTENTIONALLY LEFT BLANK]

PART III 103

IFRS Adj. Non-IFRS Currency Non-IFRS IFRS Adj. Non-IFRS

Cloud 6,933 81 7,013 –240 6,773 4,993 33 5,027

Software licenses 4,533 0 4,533 –101 4,431 4,647 0 4,647

Software support 11,547 0 11,548 –263 11,285 10,981 0 10,982

Cloud and software 23,012 81 23,093 –604 22,489 20,622 33 20,655

Services 4,541 0 4,541 –124 4,417 4,086 0 4,086

Total revenue 27,553 81 27,634 –728 26,906 24,708 33 24,741

Operating expense measures

Cost of cloud –2,534 305 –2,228 –2,068 213 –1,855

Cost of services –3,662 254 –3,408 –3,302 151 –3,151

Total cost of revenue –8,355 700 –7,655 –7,462 494 –6,969

Gross profit 19,199 781 19,979 17,246 527 17,773

Research and development –4,292 438 –3,854 –3,624 219 –3,406

Sales and marketing –7,693 909 –6,784 –6,781 589 –6,192

General and administration –1,629 477 –1,152 –1,098 106 –992

Restructuring –1,130 1,130 0 –19 19 0

Other operating income/expense, net 18 0 18 –20 0 –20

Other non-operating income/expense, net –74 0 –74 –56 0 –56

Finance income 787 0 787 371 0 371

Finance costs –589 0 –589 –418 0 –418

Financial income, net 198 0 198 –47 0 –47

Profit before tax 4,596 3,735 8,331 5,600 1,459 7,059

Income tax expense –1,226 –954 –2,180 –1,511 –349 –1,860

Profit after tax 3,370 2,781 6,152 4,088 1,111 5,199

Attributable to owners of parent 3,321 2,781 6,102 4,083 1,111 5,193

Attributable to non-controlling interests 50 0 50 6 0 6

Operating margin (in %) 16.2 29.7 29.6 23.1 29.0

Effective tax rate (in %) 26.7 26.2 27.0 26.3

Earnings per share, basic (in €) 2.78 5.11 3.42 4.35

Cost of services –3,662 9 246 0 –3,408 –3,302 9 142 0 –3,151

Research and development –4,292 9 429 0 –3,854 –3,624 9 210 0 –3,406

General and administration –1,629 16 461 0 –1,152 –1,098 18 88 0 –992

Restructuring –1,130 0 0 1,130 0 –19 0 0 19 0

Other operating 18 0 0 0 18 –20 0 0 0 –20

ITEM 2. OFFER STATISTICS

SELECTED FINANCIAL DATA: IFRS

Income Statement Data: Years ended December 31,

Cloud revenue 6,933 4,993 3,769 2,993 2,286

Cloud and software revenue 23,012 20,622 19,549 18,424 17,214

Total revenue 27,553 24,708 23,461 22,062 20,793

Operating profit 4,473 5,703 4,877 5,135 4,252

Profit after tax 3,370 4,088 4,046 3,629 3,056

Profit attributable to owners of parent 3,321 4,083 4,008 3,642 3,064

Basic in € 2.78 3.42 3.35 3.04 2.56

Diluted in € 2.78 3.42 3.35 3.04 2.56

Weighted-average number of shares outstanding

Basic 1,194 1,194 1,197 1,198 1,197

Diluted 1,194 1,194 1,198 1,199 1,198

Statement of Financial Position Data: At December 31,

Cash and cash equivalents 5,314 8,627 4,011 3,702 3,411

Total assets 60,215 51,502 42,484 44,262 41,390

Current financial liabilities (2) 3,273 1,125 1,561 1,813 841

Issued capital 1,229 1,229 1,229 1,229 1,229

Total equity 30,822 28,877 25,515 26,382 23,295

Dividends depends in part upon our financial performance. In addition, the

Annual Dividends Paid and Proposed