Vision & Mission

SAP’s vision is to help the world run better and improve people’s lives. Our mission is to help every customer become a best-run business. We do this by delivering new technology innovations that we believe address today’s and tomorrow’s challenges without disrupting our customers’ business operations.

Strategy

The world is undergoing a technology-driven revolution in which knowledge is the currency of success. Technology is both a cause and the answer to this change. We believe that we have the right team of highly qualified and motivated employees, the right portfolio of innovative products and solutions, and the right strategy to turn this technology revolution into business evolution for our customers.

SAP seeks to secure the growth of the company primarily through organic innovation of our portfolio product and solutions.. We intend to increase SAP’s market leadership in the existing market categories of applications, analytics, and mobile, and to position SAP as a market leader in the new categories of cloud and database and technology. Our SAP HANA platform allows our customers to take advantage of real-time in-memory technology across all five market categories.

For more information about SAP’s vision, mission, and strategy visit www.sap.com/corporate-en/our-company.

SAP’s Broad Portfolio of Solutions

SAP’s products and services are packaged into end-to-end solutions that include innovations from five market categories; Applications, Analytics, Cloud, Mobile and Database and Technology. These solutions aim to help customers run better by addressing complex business problems or opportunities and helping customers gain a competitive advantage in an ever-changing world.

Applications:
SAP’s leadership in enterprise applications has been the core competence of our company, and continues to fuel our growth for the future.

Analytics:
Analytics solutions from SAP enable decision makers at all levels of the business to have a more profound impact on their organizations.

Mobile:
With SAP Mobile, our customers can deliver secure, real-time, business-critical information to their ecosystems of employees, partners, and customers – on mobile devices. Our mobile development platform creates many opportunities for our partners to develop their own applications for their employees and customers.

Cloud:
Our cloud applications and suites are delivered as software-as-a-service (SaaS), in which customers pay a subscription fee to use our software. Our cloud offerings are designed to optimize a company’s most critical assets:

Database and Technology:
Our database and technology portfolio provides a comprehensive approach to the orchestration of business applications, no matter how the applications are deployed. Furthermore, SAP harnesses the power of in-memory databases with SAP HANA, which is the data foundation for the next generation of high-performance in-memory computing solutions.

For more information about SAP’s portfolio of products, visit www.sap.com/solutions.

Markets & Competitors

Key IT Market Trends

Three major technology trends – in-memory computing, enterprise mobility and the cloud – have triggered change in the world of IT and SAP is playing a crucial role in accelerating that change.

Those trends are changing not only the way enterprise adopt and deploy business technology, but also fundamentally the way that work is done. The pervasiveness of the cloud and mobile devices, together with the power of in-memory computing, allow people to connect and collaborate whenever possible and whenever they choose.

These changes are simplifying and removing layers from the traditional technology stack and making it easier for customers to consume technology.

SAP is helping drive change as customers reduce the amount they spend on hardware and services in favor of investment in software-based innovation.

Competitive Position

SAP is the world market leader for applications, analytics and mobile solutions. We are also striving to become a leading provider of cloud solutions and databases. In the applications market our main competitors are IBM, Oracle and Microsoft. Compared with SAP, those companies derive a much higher portion of their revenue from other segments of the IT market, such as hardware (IBM, Oracle); operating system and desktop applications (Microsoft); and IT services (IBM).

Key competitors in the analytics market include IBM (Cognos), SAS Institute, and Oracle (Hyperion).

The mobile solutions market is still highly fragmented. Competitors with offerings that overlap with ours include Airwatch and Mobileiron.

In the cloud market, we face line-of-business players such as Salesforce.com, Workday and NetSuite. Oracle has also become a competitor in this market through the acquisitions of RightNow and Taleo.

Principal competitors in the database and technology business include IBM, Microsoft, and Oracle. Our offerings also compete with those of specialized vendors in various local markets and subsegments.

Business Model

Traditionally, our sales model has been to charge a one-time, upfront license fee for a perpetual license to our software (without any rights to future products), which is typically installed at the customer site. We now also offer our solutions in the cloud under a subscription-based licensing model that entitles the customer to receive unspecified future software products.

The price of software licenses forms the basis for the software maintenance costs. In addition to customer support, maintenance services also include software updates and enhancements. Maintenance services are usually calculated monthly, and are included in support revenue. Revenue from customers who chose to use our cloud solutions are incorporated into the revenue figures for cloud subscriptions and support. These services are also usually calculated monthly and cover the costs for user licenses, maintenance and the data center in which we operate the software. This revenue structure including one-time revenue and recurring revenue, supported predominantly by license revenues and follow-up business, forms the basis for strong growth while at the same time offsetting economic fluctuations thanks for the significant share of recurring revenue in total revenue.

Key Performance Metrics and Financing

Financial Data 2012 and outlook for 2013

SAP performed exceptionally well in 2012 with its best top-line performance in its 40 year history. This record performance was driven by double-digit software and cloud subscription revenue growth in all regions. The operating margin (non-IFRS) stood at 32.0% and total cash flow was €3.8 billion.

More information about SAP’s performance can be found at: http://www.sap.com/corporate-en/investors/newsandreports/index.epx

More information on SAP’s non-IFRS numbers is available at http://www.sap.com/corporate-en/investors/reports/pdf/SAP-Non-IFRS-Measures.pdf

Share Ownership Structure

The number of issued no-par common shares of SAP AG on December 31, 2012 was 1,228,504,232 (December 31, 2011: 1,228,083,382). Each share has an attributable value of €1.

Accepted on the Frankfurt Stock Exchange – which excludes treasury stock from the free float – by the end of February 2013, the free float stood at 74.4% (2012: 73.3%). As in previous years, Canadian and US investors (both institutions and private individuals) from the largest investment group.

Dividends and Share Buybacks

SAP has paid a dividend every year since the stock was floated in 1988.

Dividends are paid immediately following the decision on the appropriation of retained earnings, generally on the first working day after the general meeting of shareholders. All shareholders that own SAP shares at the time the decision on the appropriation of retained earnings is taken are entitled to receive dividends. In order to pass on additional surplus liquid funds back to its shareholders.

SAP has for several years been buying back shares. Accordingly, SAP repurchases shares primarily for purposes of redemption and – to a lesser extent – to meets its obligations arising from share-based compensation programs.

Debt

Depending on our future cash position and future market conditions, we might issue additional debt instruments to fund acquisitions, maintain financial flexibility, and limit repayment risk. Therefore, we continuously monitor funding options available in the capital market and trends in the availability of funds, as well as the cost of such funding.

Outlook for 2013 and 2015

Outlook for 2013

Outlook for 2015

• Over €20 billion revenues
• 35% operating margin (non-IFRS)
• To reach 1 billion people
• Build a €2 billion cloud business
• Remain the fastest-growing database company