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Corporate Strategy

At SAP, our purpose is to “help the world run better and improve people’s lives” by empowering our customers to create a better economy, society, and environment for the world. 

SAP’s strategy is to be the Experience Company powered by the Intelligent Enterprise. We believe every digital interaction is an opportunity for a company to positively influence a customer. Through these interactions, companies can measure “experiences” – such as customer satisfaction, employee engagement, partner collaboration, and brand impact. These interactions are also opportunities for companies to understand how end users and customers perceive a vendor or a product. We want to help every SAP customer thrive in today’s “experience economy” by equipping them with the technologies to become intelligent enterprises.

At SAP, our commitment to our customers is to help them meet today’s challenges and prepare for anticipated challenges of the future. SAP aims to deliver on these objectives by leveraging the power of data in SAP software with technologies such as AI/ML to build powerful intelligent applications.

Our Purpose and Promise

In line with our purpose, we are committed to supporting the United Nations Sustainable Development Goals (UN SDGs). Technology-driven innovation underpins how SAP, together with our customers and our partner ecosystem, can execute initiatives across all 17 of the UN SDGs. Our goal is to lead the evolution of technology while also helping ensure that the focus remains on taking responsibility for its outcomes and societal effects.

Portfolio

Our software, technologies, and services serve more than 440,000 customers globally and address three core elements of the intelligent enterprise for 25 industries and 12 lines of business:

An intelligent suite of LoB applications that includes enterprise resource planning (ERP) and digital supply chain management, as well as solutions for customer experience, intelligent spend management, and human experience management. The intelligent suite is integrated and differentiated through industry-specific business processes for end-to-end scenarios. 

A business technology platform to help customers manage data orchestration across their entire application footprint. This includes real-time visibility into distributed data silos using data management solutions and an open cloud platform as a business platform for integration and business process innovation.

An Experience Management (XM) platform, bringing together experience data (X-data) and operational data (O-data) to help organizations manage four core experiences – customer, employee, product, and brand. This includes using API-based integration between XM and the intelligent suite to connect X-data with relevant O-data.

Value Creation

The digital transformation of the global economy is in full swing, and SAP’s broad solution portfolio and innovation strategy are playing a key role in this evolution. Though current macroeconomic uncertainties are holding back individual countries and sectors, the majority of enterprises is taking advantage of the latest technological developments to restructure their business models, win market share, and increase efficiency.

SAP’s innovative applications and our offerings for next-generation technologies such as machine learning, AI, blockchain, and the IoT are convincing more customers of the power and efficiency of our portfolio and our technology platform. We also offer our customers unparalleled flexibility options for using our software – on premise, in the cloud, or hybrid. 

The COVID-19 crisis is an accelerator for transformation. Customers are looking to move to the cloud even faster for greater resiliency and agility. SAP is responding to these market demands by accelerating the modernization of its cloud delivery, arriving at a harmonized delivery infrastructure earlier than planned. Furthermore, SAP will increase R&D investments to help its customers’ transformation accelerate and generate growth in non-IFRS cloud revenue to more than €22 billion in 2025 and expand the share of more predictable revenue to approximately 85%.

For details on our 2020 outlook and the mid-term ambition until 2025 please visit the Outlook & Ambition page.

Our transformation to a fast-growing cloud business demands significant investments. We see operating expenses largely as investments in the future that will help secure our operating profit in the long term. Nevertheless, we continue to see the benefits from increasing efficiency of our cloud offerings, demonstrated by the increasing cloud gross margin. 

The increasing customer demand for SAP Cloud solutions will require additional investments that will have an impact on our operating margin in 2021 and 2022. Our expedited move to the cloud will ensure we continue our path as a cloud growth company while we remain focused on cost efficiency. These actions and our resilient business model position us well to meet our new ambition targets as uncertainty recedes.

For details on our 2020 outlook and the mid-term ambition until 2025 please visit the Outlook & Ambition page.

Our primary source of cash, cash equivalents, and current investments is funds generated from our business operations. Over the past several years, our principal use of cash has been to support operations and our capital expenditure requirements resulting from our growth, to quickly repay financial debt, to acquire businesses, to pay dividends on our shares, and to buy back SAP shares on the open market. In recent years, we were able to repay additional debt within a short period of time due to our persistently strong free cash flow.

We believe that our liquid assets combined with our undrawn credit facilities are sufficient to meet our operating financing needs in 2020 and, together with expected cash flows from operations, will support debt repayments, currently planned capital expenditure requirements, and capital returns to our shareholders over the near term and medium term.

The primary objective of our capital structure management is to maintain a strong financial profile for investor, creditor, and customer confidence, and to support the growth of our business. We 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.

The long-term credit rating for SAP SE is “A2” by Moody’s and “A” by Standard & Poor’s, both with a stable outlook. 

Our sustainability program is at the core of our purpose and is embedded throughout our strategy. We strive to create positive economic, environmental, and social impact within planetary boundaries. There are two ways we can achieve this with our business activities – as an enabler and as an exemplar.

As an Enabler – With more than 77% of business transactions worldwide touching an SAP system, even a small change in customers’ core processes can have a meaningful positive impact. For example, with our Climate 21 initiative, we are helping customers account for their carbon emissions, which is the first step in reducing emissions. Further, our Human Experience Management software helps companies engage their employees and can even help remove bias in the hiring process, for example. You can see more examples of how technology from SAP has a positive impact on our UN Sustainable Development Goals Web site.  

As an Exemplar – The integration of economic, environmental and social performance to drive better business decisions has been a guiding principle for us for many years. We are a thought leader in integrated reporting. As part of our holistic management approach, we have established clear goals for material non-financial indicators. Further, selected targets are included in the Executive Board’s compensation scheme. 

Specifically:

  • We employ and safeguard responsible business practices based on the UN Global Compact.
  • We care for the health and well-being of our people and foster a diverse and inclusive workplace. 
  • We are committed to doing our part in reducing our negative environmental impact, achieving carbon neutrality by 2025 and eliminating single-use plastics by the end of 2020.

SAP has earned shareholder trust through an attractive Total Shareholder Return on the short, medium, and long term. In addition, with our dividend policy of at least 40% of profit after tax and continued payout since IPO in 1988, we show our commitment to our shareholders.

  • SAP is perfectly positioned to benefit from the massive growth drivers in the market
  • SAP shows high resilience through global diversification and broad industry coverage
  • SAP is highly successful with a stable, predictable and sustainable business model
  • SAP is a leader in sustainability and supports the 17 UN Sustainable Development Goals
  • SAP stands for an attractive and dependable dividend policy, and strives for excellent shareholder return
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