Welcome to SAP Capital Markets Day 2019

Transcription

1 Welcome to SAP Capital Markets Day 2019 Luka Mucic Chief Financial Officer Executive Board Member Bill McDermott Chief Executive Officer Rob Enslin President, Cloud Business Group Executive Board Member Christian Klein Chief Operating Officer Executive Board Member Jennifer Morgan President, Global Customer Operations Americas & Asia Pacific Japan Executive Board Member Juergen Mueller Chief Technology Officer Executive Board Member Alex Atzberger President, SAP Customer Experience 1

2 Agenda 09:30 09:35 am Welcome Stefan Gruber, Head of Investor Relations 09:35 10:05 am Strategy and Vision: Opportunity in Time of Disruption Bill McDermott, CEO 10:05 10:30 am Delivering the Intelligent Enterprise Christian Klein and Juergen Mueller, Executive Board Members 10:30 10:45 am Break 10:45 11:15 am SAP C/4HANA Shaking up CRM Alex Atzberger, President SAP Customer Experience 11:15 11:45 am Customer Perspective Hosted by Jennifer Morgan, Executive Board Member 11:45 am 12:10 pm Charting the Course for 2023 Luka Mucic, CFO and Executive Board Member 12:10 12:55 pm Q&A 12:55 2:00 pm Buffet Lunch Reception 02:15 03:45 pm Breakout Sessions 03:45 04:30 pm Coffee and Networking 3

3 Safe Harbour Statement Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of Words such as anticipate, believe, estimate, expect, forecast, intend, may, plan, project, predict, should and will and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forwardlooking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP s future financial results are discussed more fully in SAP s filings with the U.S. Securities and Exchange Commission ( SEC ), including SAP s most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. 2

4 Opportunity in Time of Disruption Bill McDermott, CEO 3

5 SAP: Structural Incline Doubled Addressable Market Be the most innovative cloud company powered by SAP HANA Intelligent Enterprise SAP Business Suite powered by SAP HANA Public Cloud Sybase Launched 0.0bn 0.0bn 0.3bn 0.8bn 1.1bn SAP Analytics Cloud SAP HANA Enterprise Cloud 3.8bn 3.0bn 2.3bn 5.0bn Cloud Revenue Integrated Intelligent Suite Revolutionizing Customer Experience with C/4HANA Leading the Experience Management category Innovation with Intelligent Systems (Leonardo) UNTIL All figures based on non-ifrs. 4

6 The fastest growing cloud at scale in business software Cloud Peer Group Large Scale Peer Group 40% Cloud Fastest Growing Cloud 15% Top line Growth Growing faster than large scale peer group Highly profitable (~30% Op. Margin) Top line Growth 10% 0% $1 B $15 B 10% 50% Cloud Revenue Operating Margin Sources: Company filings, Factset, Morgan Stanley, Deutsche Bank, Credit Suisse estimates 5

7 Driving sustainable operating profit growth Hiring discipline Hyperscaler leverage Higher margin Services Ecosystem Increased Cloud Gross Margin Keeping the Meet or Exceed Promise 6

8 EXPERIENCE MANAGEMENT Winning the experience economy Xexperience DATA 1.8B CX Customer Experience EX Employee Experience PX Product Experience BX Brand Experience experience touchpoints run on Qualtrics DATA MANAGEMENT Cloud Platform Data Management AI Customer Experience Supply Chain Management Ooperational DATA ERP HCM Spend Management 77% Of the world s transactions across 25 industries touch SAP systems 7

9 The SAP Top Ten Winning Strategy 1. X+O: Experience Management (X) Meets Intelligent Enterprise (O) 2. Next Gen CRM: C/4+S/4 End-to-End 3. Industry 4.0: Next-Gen Manufacturing and Supply Chain 4. Automation and Augmented Humanity: SAP Leonardo Everywhere 5. New Skills, Flexible Workforce: SAP SuccessFactors + SAP Fieldglass 2023 Growth Ambition 6. #1 in Experience Management 7. Fastest Growing in Customer Experience 8. #1 in Cloud ERP 9. #1 in Cloud Workforce Management 10. Global Standard in Business Networks: Trillions in Commerce Based on financial analyst commentary following disclosure of SAP s Q results 8

10 DELIVER the Intelligent Enterprise Christian Klein (COO) and Juergen Mueller (CTO) Executive Board Members 9

11 The Intelligent Enterprise by SAP ONE Seamless Customer Experience SEAMLESS CUSTOMER EXPERIENCE Marketing Sales Services Design Plan Manufacture Deliver Operate Employee Engagement Finance Network & Spend Management 10

12 The Intelligent Enterprise by SAP ONE Seamless Customer Experience SEAMLESS CUSTOMER EXPERIENCE Customer Marketing Experience Sales Services Design Plan Manufacturing Manufacture & Supply Chain Deliver Operate Employee Engagement Digital Finance Core Network & Spend Management 11

13 Intelligent Business Processes With SAP Leonardo Customer Experience Manufacturing & Supply Chain Employee Engagement Digital Core Network & Spend Management Big Data Machine Learning SAP Leonardo Blockchain Internet of Things 12

14 We Empower Decision Makers with End-to-End Real Time Steering % % % % % % % % % Real time steering across the value chain Reporting Predictive Analytics Integrated Planning Customer Experience Manufacturing & Supply Chain Employee Engagement Digital Core Network & Spend Management SAP Cloud Platform powered by HANA 13

15 The Intelligent Enterprise Digital Core Employee Engagement Network & Spend Management Intelligent Suite Customer Experience Intelligent Technologies Manufacturing & Supply Chain SAP Leonardo Digital Platform Data Management Cloud Platform 14

16 Adoption of SAP S/4HANA is kicking in by offering unique potential across all Lines of Business. SAP S/4HANA Adoption # of licensed customers 10,500+ Licensed customers 10,500+ Ahead of R/3 Adoption 40% Net new customer share Accelerated Cloud Growth in Finance and Professional Services 15

17 The Intelligent Enterprise Digital Core Manufacturing & Supply Chain Employee Engagement Customer Experience Intelligent Suite Intelligent Technologies Network & Spend Management SAP Leonardo Digital Platform Data Management Cloud Platform 16

18 SAP C/4HANA Shaking up CRM Alex Atzberger, President SAP Customer #BeBold 17

19 We live in a Experience Economy 80 % $2.5T $ 100B of customers have chosen to switch brands due to a poor customer experience 1 Impact of yearly loss of trust due to abuse of data privacy and brand loyalty 2 Estimated market size for customer experience solutions, platform and integration to operational systems 3 1 Bain 2 Adweek 3 SAP CMI Model 18

20 CRM has evolved into Customer Experience management platforms Legacy CRM CX Suites Transactional data Siloed view and processes with focus on sales force automation Customer privacy not in scope Operational + Experience data Seamless end-to-end journeys designed around customer across all channels Privacy built-in Monolithic platforms Microservices-driven agile platform 19

21 Marketing Cloud SAP C/4HANA Service Cloud 2.8 Billion personalizations 5 Clouds and 7 Suite Attributes 61 million Service Tickets Commerce Cloud Sales Cloud 5-year Gartner MQ Leader 5+ million Sales Professionals Customer Data Cloud 1 Billion+ consent profiles Harmonized User Experience End-to-End Processes Business and Master Data Services Suite Intelligence and Analytics Platform Services Extensibility and Integration Open Ecosystem 20

22 Best-of-Breed: Recognized product leadership Gartner Front Runners for Field Services Forrester Wave for B2C Commerce Suites Forrester Wave for B2B Commerce Suites Forrester Wave for Customer Identity Mgmt Gartner Magic Quadrant for Multichannel Marketing IDC MarketScape AI in Enterprise Marketing Clouds Gartner Magic Quadrant for Configure, Price, Quote Forrester Wave for Configure, Price, Quote IDC MarketScape Leader Subscription Relationship Management Gartner Magic Quadrant for Sales Performance Management 21

23 Best-of-Suite: Most complete portfolio Sales Service Marketing Commerce Customer Data Collaboration Cloud Platform Integration Industries Open Data Initiative X Data & O Data 22

24 Market Leadership: SAP is LEADING Customer Experience Digital Commerce 1 #1 #3 #4 CRM 1 #2 #1 #3 Experience Management 2 #1 n/a n/a Source: (1) Gartner Enterprise Application Market Share Q12018, May 2018 (2) Qualtrics S1 filing 23

25 Momentum is gaining Q4 Q3 Q2 Opportunity is vast Cloud Growth 170% YoY 10,000+ customers use either one or multiple C/4HANA solutions 10M+ users from sales, service to marketing professions Close to 4,000 SAP CRM customers remain On-premise today Q1 Largest addressable enterprise app market, least penetrated market by SAP 24

26 The SAP Advantage Experience Trust Integration SAP C/4HANA + Qualtrics allow customers to put the customer at the center of their business and engage across all channels with the customer SAP C/4HANA provides a single view of the customer based on consent-driven customer data SAP C/4HANA + S/4HANA are an integrated suite resulting in lower integration costs and smarter end-toend processes that connect demand chain to the company s operational core 25

27 Lorenz Gan - CIO New Era

28 Customer Perspective Hosted by Jennifer Morgan President, Global Customer Operations Americas and Asia Pacific Japan Executive Board Member 27

29 Alex Chatkewitz Chief Accounting Officer and Controller Sara Baxter Orr CFO Verizon Wireline 28

30 Charting the Course for 2023 Luka Mucic, CFO and Executive Board Member 29

31 We ve Come a Long Way Doubled Addressable Market Be the most innovative cloud company powered by SAP HANA Intelligent Enterprise SAP Business Suite powered by SAP HANA Public Cloud SAP Analytics Cloud Integrated Intelligent Suite Sybase Launched 0.0bn 0.0bn 0.3bn 0.8bn 1.1bn SAP HANA Enterprise Cloud 3.0bn 2.3bn 3.8bn 5.0bn Cloud Revenue Revolutionizing Customer Experience with SAP C/4HANA Leading the Experience Management category Innovation with Intelligent Systems (SAP Leonardo) UNTIL Service Software bn Support 37% More Predictable Software Service 65% More Predictable bn Cloud Support Approaching 80% More Predictable Software & Service All figures based on non-ifrs. Amounts in doughnut charts represent total revenue figures based on SAP s 2023 ambition 2023 > 35bn 30

32 Staying our Course, Keeping our Promises Cloud Revenue bn 2.0bn bn 3.0bn bn 3.8bn bn 5.2bn Outlook ( bn) Actual ( bn) Cloud & Software Revenue (growth) +8% 10% +12% +6% 8% +8% +6% 8% +8% +6.5% 8.5% +10% Total Revenue bn 23.8bn bn 26.0bn Operating Profit bn bn bn bn 5.9bn 6.6bn 6.9bn 7.5bn All figures based on non-ifrs, at constant currencies. Outlooks as provided in January of corresponding year, except 2018 (outlook as of April to reflect Callidus acquisition) 31

33 Increasing Our Ambition 2020 Ambition as of January Ambition as of January 2019 Cloud Revenue in a range of bn + 1.1bn Cloud Revenue in a range of bn Total Revenue in a range of bn + 1.9bn Total Revenue in a range of bn Operating Profit in a range of bn + 0.3bn Operating Profit in a range of bn All figures based on Non-IFRS. Ambition increases based on intervals midpoints. 32

34 Cash Matters Restructuring Operating Cash Flow 4.6bn 5.0bn 4.3bn SBC payouts (Qualtrics) DSO upside potential Key incremental effects on cash flow: SBC payouts Tax Insurance Payments Currency Restructuring Tax Interest (Qualtrics) DSO upside potential IFRS 16 (re-classification) e 2020e Includes: Stock-based compensation payouts 0.6bn 0.8bn 1.0bn e 2020e 33 SBC = stock-based compensation

35 Flat Capital Expenditure, Adjusted Free Cash Flow Definition 2019 Adoption of IFRS 16 (Leases) Capital Expenditure and Free Cash Flow Balance Sheet Expansion bn Operating Cash Flow 4.6bn 5.0bn 4.3bn Operating Profit Increase Significantly Below 0.1bn Operating Cash Flow Increase bn Capital Expenditure e 1.5bn 1.5bn 1.3bn 1.0bn e Free Cash Flow Unaffected Adjusted SAP Definition Free Cash Flow 3.6bn 3.8bn 2.8bn previous definition adjusted definition e IFRS 16 balance sheet impact based on 2019 opening balance sheet. IFRS16 operating profit impact assumes 2019 leasing volumes comparable to Capital expenditure defined as cash flow from purchases of intangibles and property, plant and equipment. 34

36 Charting the Course for 2019 and 2020 Cloud Revenue ( bn) Total Revenue ( bn) Operating Profit ( bn) +8 to +9% CAGR bn +29% 24.7bn +11.5% +33 to +39% bn +7.5 to +11.5% bn bn bn 5.0bn 7.2bn All figures based on Non-IFRS. 2019/2018 growth rates at constant currencies. 2020/2019 growth rates based on midpoints of 2019 outlook and 2020 ambition. 35

37 Building the Cloud Suite Achieving Scale 2023 >3x vs bn bn 2011 ~ 20m Cloud Revenue bn Ramping Approaching Scale Fully Scaled SAP Analytics Cloud SAP Cloud Platform SAP Fieldglass Manufacturing & Supply Chain SAP S/4HANA Cloud SAP C/4HANA Qualtrics HANA Enterprise Cloud SAP SuccessFactors SAP Concur SAP Ariba All figures based on Non-IFRS based on midpoint of cloud revenue outlook based on SAP s 2023 ambition. 36

38 Expanding Gross Margins for Every Cloud Model 30-35% IaaS HANA Enterprise Cloud Gross Margin Gross Margin 78% (+1pp) Business Networks 13% (+6pp) IaaS bn 63% Gross Margin 60% (+3pp) SaaS/PaaS >80% Business Networks SAP Concur SAP Ariba SAP Fieldglass bn 71% 70% SaaS/PaaS SAP SuccessFactors Qualtrics SAP C/4HANA SAP S/4HANA Cloud SAP Cloud Platform Dig. Supply Chain SAP Analytics Cloud All figures based on non-ifrs. Amounts in doughnut charts represent cloud revenue, percentages represent overall cloud gross margins. Percentage points reflect year-over-year expansion figures based on SAP s 2020 ambition 37

39 Expanding Gross Margins, Decreasing Expense Ratios Gross Margins Expense Ratios Non-IFRS; in percent e Non-IFRS; expenses as a percentage of total revenue e Business Network Private Cloud (IaaS) Public Cloud (PaaS/SaaS) > Research and Development 13.8 Sales and Marketing 25.0 Cloud General and Administration 4.0 Software & Support Cloud & Software Services Total Gross Margin figures based on SAP s 2020 ambition 38

40 Charting the Course for 2023 Our Financial Ambition Cloud Revenue > 3x vs Total Revenue > 35bn More Predictable Revenue approaching80% Operating Profit % 5-year CAGR 39

41 Why SAP? What we think The integrated, intelligent suite always wins Only SAP enables companies to build a reliable, future-proof IT platform for their mission-critical operations SAP is end-to-end on premise, hybrid and cloud Together with Qualtrics, SAP will become the undisputed leader in the Experience Management category SAP has a resilient, predictable and sustainable business model SAP has a strong focus on sustainability What you think SAP grew cloud subscription at a rate faster than their main competitors in FY 18 SAP offers a good combination of defensive growth, given its exposure to digital transformation and its high share of recurring revenue SAP S/4HANA is SAP s most significant innovation in the core for 20 years With their broad innovative and competitive portfolio SAP delivers rapid growth quarter by quarter SAP Leonardo, which helps companies to orchestrate disruptive capabilities, could be the start of another powerful product cycle Based on financial analyst commentary following disclosure of SAP s Q results 40