Letter from the CEO

2021 was another extraordinary year. For all of us, it was a time of challenges, but also of hope. In the face of the ongoing pandemic, disrupted global supply chains, and extreme weather events, we also witnessed the best of humanity. We have seen solidarity in times of crisis, with individuals, organizations, and nations coming together and stepping up to provide social, financial, and material support when it has mattered most.

SAP is no exception. We have supported companies and organizations around the globe that are at the forefront of the fight against the pandemic. We have helped businesses not only keep running but also truly transform, enabling them to become intelligent, networked, and sustainable enterprises. We have moved the world closer to zero emissions, zero waste, and zero inequality. These are just a few examples. There are many more.

2021 also marked the first anniversary of our revised strategy, and we can confidently say that the bold strategic moves we have taken are paying off. Despite the ongoing headwinds of the pandemic and economic uncertainties, our customers recognize the way SAP can help them drive their business transformation. We delivered an exceptional year, with record cloud growth, exceeding our outlook for cloud and software revenue and operating profit.

Our exceptional 2021 results at a glance:

• Cloud revenue continued to be our main growth driver, increasing 19%.¹
• Current cloud backlog increased by 26%.¹
• Total revenue grew 3%.¹
• Operating profit increased by 1%,^1,2
• Operating cash flow of €6.22 billion, while free cash flow was €5.05 billion.

Our share price gained over the course of 2021, growing 16.5%, ahead of the DAX which grew 15.8%. With a market capitalization of €153.4 billion, SAP ended the year as the second most valuable company in the DAX40. We want our shareholders to participate in our success. Therefore, we have proposed an annual dividend of €2.45 per share,³ an increase of approximately 32%. This includes a special dividend of €0.50 per share to celebrate our 50th anniversary.

Our non-financial performance also remained strong. Our constant focus on customers led to a six-point increase in the Customer Net Promoter Score to a score of 10, the second subsequent year of significant improvement. The Employee Engagement Index remained exceptionally strong at 83%, one percentage point below our ambitious target range. We decreased our net greenhouse gas emissions by 25 kt to 110 kt. And just in January this year, we announced that we will accelerate our goal to achieve net-zero emissions across our value chain by 2030, rather than 2050 – achieving our net-zero target 20 years earlier than we originally planned.

We take our social and environmental responsibilities and the opportunity we have to make a difference seriously.

• We significantly contributed to the fight against COVID-19 by helping 17 of the 20 largest vaccine producers ensure production and logistics for the vaccine supply at an unprecedented speed.
• The Corona-Warn-App for contact tracing has been downloaded 42 million times and is key to breaking infection chains.
• Fostering diversity is key: The share of women in management increased to 28.3%, and we want to reach 30% by the end of 2022. We remain committed to advancing the share of underrepresented minorities at SAP. And last year, we celebrated 20 years of Pride@SAP, our global employee network for LGBTQ+ colleagues and allies.
• We have joined Generation Unlimited as a founding member to provide over 500 million young people with access to opportunities and training for employment, entrepreneurship, and social impact by 2025.

For 50 years, SAP has revolutionized the way business is done. Building on this heritage, we will now take our purpose to help the world run better and improve people’s lives to the next level. Based on the biggest issues our customers face worldwide, our vision has three goals:

• First, we enable every enterprise to become an intelligent, sustainable enterprise. The RISE with SAP offering is designed to support our customers as they transform their businesses while at the same time moving to the cloud. We help them benchmark their processes against best practices we gathered from working with hundreds of thousands of customers across 25 industries, move to a modular, agile ERP, and connect them to latest innovations such as our industry cloud, SAP Business Network, and SAP Cloud for Sustainable Enterprises solutions.
• Second, we bring enterprises together in a global business network. With our SAP Business Network – the largest B2B network in the cloud – we are truly scaling the power of our companies, connecting intelligent enterprises across supply chains so everyone can respond to any disruptions in real-time.
• Third, we create a sustainable world together. Our customers trust us with their most mission-critical and energy-intense processes. We have the end-to-end transparency and solution portfolio to turn our customers into sustainable enterprises. SAP Cloud for Sustainable Enterprises allows companies to integrate sustainability metrics seamlessly into how they manage their business.

Net-net: At SAP, we help our customers manage their green line together with their top and bottom lines. We are helping them to become intelligent, networked, and sustainable enterprises, and we accompany them along this journey, based on a half-century of experience, innovation, and trusted collaboration to create a sustainable world together.

2022 is a particularly special year for us at SAP. First, we celebrate our 50th anniversary – a milestone in the history of German technology development. Second, 2022 will be crucial in our own transformation as we intensify our focus on our cloud goals across the company. The strong performance that has followed since we announced our revised strategy to accelerate our growth in the cloud shows that we are right on track. For us, it is now all about continuing to execute on our strategy and keeping our promise of delivering innovation to our customers that allows them to tackle any challenge – today and in the future.

We’ve had a record year at SAP, and this is just the beginning. We are strongly positioned to deliver on our targets, and our strategy will continue to create opportunities for unceasing and accelerated growth both for our customers and SAP.

Thank you for your ongoing trust in SAP. You have my word that we will continue to deliver outstanding customer and shareholder value. At the end of the day, it’s the more than 100,000 people behind the name SAP who drive us forward and are key to our success. It is a privilege to head this company, and I can’t wait for the amazing things we will achieve in 2022 and beyond.

Sincerely,

Christian Klein
CEO, SAP SE

 ¹ At constant currencies

 ² Non-IFRS

 ³ Pending approval of Annual General Meeting of Shareholders