diff --git "a/Germany/1.SAP_$240.94 B_Information Tech/2021/results.txt" "b/Germany/1.SAP_$240.94 B_Information Tech/2021/results.txt"
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+++ "b/Germany/1.SAP_$240.94 B_Information Tech/2021/results.txt"
@@ -0,0 +1,25543 @@
+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:
+361
+429
+7
+879
+941
+-19
+135
+110
+>100
+4
+10
+4 In CO2 equivalents.
+3 Full-time equivalents.
+2 Numbers are based on the proposed dividend and on level of treasury stock at year-end.
+1 Numbers based on year end.
+Total data center electricity consumption (in GWh)
+Total energy consumption 5 (in GWh)
+Net carbon emissions (in kilotons)
+Environment
+Customer Net Promoter Score
+Customer
+Employee retention (in %)
+Leadership Trust Index (LTI, as NPS)
+-3
+95.3
+92.8
+8
+62
+67
+19
+5 Before 2021, our total energy consumption covered direct energy consumption (Scope 1) and selected indirect energy consumption (Scope 2). In 2021, we added indirect
+energy consumption of our value chain (Scope 3) to all years shown.
+4/338
+SAP
+50
+49
+Products, Research & Development, and Services..
+Performance Management System.
+Strategy
+General Information About This Management Report
+Combined Group Management Report
+46
+Assurance Report of the Independent Auditor regarding Sustainability Information...
+.43
+33
+32
+18
+13
+1
+11
+8
+2
+combined non-financial statement
+Limited Assurance Report of the Independent Auditor regarding the
+Independent Auditor's Report.
+Responsibility Statement...
+Report by the Supervisory Board
+Investor Relations...
+SAP Executive Board
+Letter from the CEO.
+To Our Stakeholders
+About This Report.
+Contents
+SAP Integrated Report 2021
+00
+52
+80
+Business Health Culture Index (in %)
+Dividend per share² (in €)
+32
+7,155
+9,447
+-24
+26.5
+20.0
+-20
+26.8
+21.5
+14
+51
+58
+-76
+-6,503
+-1,563
+A in %
+2020
+2021
+Earnings per share, basic (non-IFRS, in €)
+Earnings per share, basic (in €)
+Key SAP Stock Facts
+Current cloud backlog
+Current cloud backlog
+Effective tax rate (non-IFRS, in %)
+Effective tax rate (IFRS, in %)
+Equity ratio (total equity in % of total assets)
+Net liquidity (net debt)
+€ millions, unless otherwise stated
+Market capitalization¹ (in € billions)
+4.46
+4.35
+2
+-3
+86
+83
+Employee Engagement Index (in %)
+3
+27.5
+28.3
+Women in management¹ (total, in % of total number of employees)
+0
+33.6
+34.3
+Women working at SAP (in %)
+1
+122
+81
+122
+5
+102,430
+107,415
+Number of employees 1, 3
+Employees and Personnel Expenses
+16
+131.7
+153.4
+32
+1.85
+2.45
+24
+5.41
+6.73
+Personnel expenses per employee - excluding share-based payments (in € thousands)
+59
+68
+Financial Performance: Review and Analysis
+Stakeholders
+To Our
+SAP Integrated Report 2021
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+SAP
+337
+335
+334
+330
+329
+Publication Details
+Financial and Sustainability Publications.......
+Financial Calendar and Addresses.
+Five-Year Summary.
+Additional Information
+328
+Task Force on Climate-Related Financial Disclosure (TCFD)....
+327
+SASB Index..
+325
+Stakeholder Capitalism Metrics..
+313
+GRI Content Index and UN Global Compact Communication on Progress.......
+304
+Non-Financial Notes: Environmental Performance.
+302
+Non-Financial Notes: Social Performance.
+Further Information on
+Sustainability
+To Our Stakeholders
+About This Report
+To Our Stakeholders
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+8/338
+7/338
+Sustainability Information
+Assurance Report of the Independent Auditor regarding
+43
+the combined non-financial statement
+Limited Assurance Report of the Independent Auditor regarding
+.300
+446
+2003 3
+33
+18
+13
+11
+7
+2
+Additional
+Information
+Independent Auditor's Report
+Responsibility Statement
+Report by the Supervisory Board
+Investor Relations
+SAP Executive Board
+Letter from the CEO
+46
+Memberships, Partnerships, and Commitments.
+.299
+Public Policy
+Section C - Financial Results..
+184
+Section B Employees.
+175
+170
+163
+155
+131
+129
+126
+Section A Customers....
+Notes
+Consolidated Financial Statements IFRS
+Expected Developments and Opportunities.
+198
+Risk Management and Risks
+Business Conduct
+123
+116
+108
+.107
+103
+Corporate Governance Fundamentals.
+Energy and Emissions
+Employees and Social Investments..
+Customers.
+Security, Data Protection, and Privacy
+99
+74
+Non-Financial Statement Including Information on Sustainable Activities
+Human Rights and Labor Standards.
+SAP Integrated Report 2021
+Section D Invested Capital.
+Section E Capital Structure, Financing, and Liquidity
+.296
+Waste and Water
+293
+Sustainable Procurement
+289
+Our Contribution to the UN Sustainable Development Goals.
+288
+Sustainability Management...
+286
+Stakeholder Engagement.
+282
+Materiality.
+.278
+Connectivity of Financial and Non-Financial Indicators
+209
+277
+276
+and Social Performance
+Further Information about Economic, Environmental,
+.275
+Management's Annual Report on Internal Control over Financial Reporting in the
+Consolidated Financial Statements..
+252
+Section GOther Disclosures.......
+234
+Section F - Management of Financial Risk Factors
+SAP Integrated Report 2021
+SAP
+6/338
+5/338
+226
+About This Further Information on Economic, Environmental, and Social Performance
+3/338
+SAP
+24,078
+2021
+Cloud and software (non-IFRS)
+Cloud and software (IFRS)
+Software support (non-IFRS)
+Software support (IFRS)
+Software licenses (non-IFRS)
+Software licenses (IFRS)
+Cloud (non-IFRS)
+Cloud (IFRS)
+Revenues
+€ millions, unless otherwise stated
+Key Facts
+2020
+SAP Integrated Report 2021
+This report was designed by SAP and created with SAP S/4HANA software and the SAP Disclosure
+Management application.
+Concept and Realization
+KPMG AG Wirtschaftsprüfungsgesellschaft has audited our consolidated financial statements and our
+combined management report. Information relating to the non-financial statement included in SAP's
+management report has been audited with limited assurance by KPMG. Additionally, KPMG has
+provided assurance on selected sustainability information in accordance with the International
+Standard on Assurance Engagements (ISAE) 3000, a pertinent standard for the assurance of
+sustainability reporting. The Independent Auditor's Report and the Assurance Reports of KPMG for the
+non-financial statement and selected sustainability information are available in the Independent
+Auditor's Report section, the Limited Assurance Report of the Independent Auditor regarding the
+Combined Non-Financial Statement section and the Assurance Report of the Independent Auditor
+regarding Sustainability Information section.
+Independent Audit and Assurance
+The reporting period is fiscal year 2021. The report encompasses SAP SE and all subsidiaries of the
+SAP Group. To make this report as current as possible, we have included relevant information
+available up to the auditor's opinion dated February 23, 2022. The report is available in English and
+German.
+All financial and non-financial data and information for the reporting period is reported utilizing SAP
+software solutions and sourced from the responsible business units.
+Data
+Greenhouse gas data is prepared based on the Greenhouse Gas Protocol.
+The social and environmental data and information included in the SAP Integrated Report is prepared
+in accordance with the GRI Standards: Core option. This GRI option indicates that a report contains
+the minimum information needed to understand the nature of the organization, its material topics and
+related impacts, and how these are managed. We apply the GRI principles (sustainability context,
+stakeholder inclusiveness, materiality, and completeness) for defining report content. We also report
+on SDGs identified as material to our strategy.
+Our consolidated financial statements are prepared in accordance with IFRS. Our executive
+management has confirmed the effectiveness of our internal controls over financial reporting.
+Our combined management report is prepared in accordance with the German Commercial Code
+and the relevant German Accounting Standards. The combined management report is also a
+management commentary complying with the International Financial Reporting Standards (IFRS)
+Practice Statement Management Commentary.
+Basis of Presentation
+SAP
+A in %
+9,418
+8,080
+Total revenue (non-IFRS)
+2
+27,338
+27,842
+Total revenue (IFRS)
+4
+23,233
+24,078
+4
+23,228
+-16
+-1
+11,506
+11,412
+-1
+11,506
+11,412
+-11
+3,642
+3,248
+-11
+3,642
+3,248
+16
+8,085
+9,418
+17
+The SAP Integrated Report also serves as our United Nations (UN) Global Compact progress report.
+We also report on our contribution to the UN Sustainable Development Goals (SDGs) and embedded
+the recommended disclosures of the Task Force on Climate-Related Financial Disclosures (TCFD), of
+the SASB standards, and of the World Economic Forum (WEF) stakeholder capitalism metrics.
+www.sapintegratedreport.com.
+The SAP Integrated Report 2021 presents our full-year financial, social, and environmental
+performance in one integrated report ("SAP Integrated Report") available at
+Content
+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.
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+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.
+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.
+-
+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.
+27,842
+Dear Fellow Shareholders,
+Additional
+Information
+About This Report
+SAP Integrated Report 2021
+SAP
+2/338
+SAP
+2021
+SAP Integrated Report
+CEO, SAP SE
+Christian Klein
+Sincerely,
+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.
+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.
+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.
+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.
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+10/338
+9/338
+3 Pending approval of Annual General Meeting of Shareholders
+2 Non-IFRS
+Further Information on
+Sustainability
+Letter from the CEO
+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.
+27,343
+Applications, Technology & Support Segment revenue
+1
+73.1
+73.7
+Gross margin (in % of total revenue, non-IFRS)
+0
+71.2
+71.5
+Gross margin (in % of total revenue, IFRS)
+-1
+81.2
+80.5
+Cloud and software gross margin (in % of corresponding revenue, non-IFRS)
+-1
+79.7
+79.1
+Cloud and software gross margin (in % of corresponding revenue, IFRS)
+0
+87.4
+87.6
+0
+86.7
+86.9
+0
+69.7
+69.5
+1
+66.6
+Applications, Technology & Services Segment gross margin (in % of corresponding revenue)
+2
+79.5
+-1
+6,000
+5,049
+-2
+30.3
+29.6
+-31
+24.2
+16.7
+-1
+8,287
+8,230
+-30
+6,623
+4,656
+Free cash flow
+Operating margin (in % of total revenue, non-IFRS)
+Operating margin (in % of total revenue, IFRS)
+Operating profit (non-IFRS)
+Operating profit (IFRS)
+8
+31.5
+34.1
+Services Segment gross margin (in % of corresponding revenue)
+2
+77.6
+79.6
+Qualtrics Segment gross margin (in % of corresponding revenue)
+80.6
+17
+67.0
+-5,190
+Total cost of revenue (non-IFRS)
+Total cost of revenue (IFRS)
+Cost of cloud and software (non-IFRS)
+Cost of cloud and software (IFRS)
+Cost of software licenses and support (non-IFRS)
+Cost of software licenses and support (IFRS)
+Cost of cloud (non-IFRS)
+Cost of cloud (IFRS)
+Operating Expenses
+4
+72
+75
+Share of more predictable revenue (non-IFRS, in %)
+Research and development (IFRS)
+4
+75
+Share of more predictable revenue (IFRS, in %)
+-4
+3,379
+3,234
+Services Segment revenue
+36
+681
+929
+Qualtrics Segment revenue
+2
+22,965
+23,502
+72
+-4,454
+Profits and Margins
+Cloud gross margin (in % of corresponding revenue, non-IFRS)
+0
+-7,362
+-7,328
+1
+-7,886
+-7,946
+8
+-4,362
+-4,698
+7
+-4,707
+Cloud gross margin (in % of corresponding revenue, IFRS)
+-5
+-5,030
+-1,822
+-4
+-2,008
+-1,925
+17
+-2,451
+-2,876
+15
+-2,699
+-3,105
+Software and support gross margin (non-IFRS, in %)
+Software and support gross margin (IFRS, in %)
+-1,911
+1 At constant currencies
+Group liquidity
+11,530
+6,781
+6.0
+1,162
+1,470
+2,632
+Current time deposits and debt securities
+3,587
+5,311
+8,898
+Cash and cash equivalents
+Δ
+2020
+2021
+€ millions
+Group Liquidity and Net Debt
+1 The 2021 outlook was communicated in January 2021 and was updated in April 2021. The 2021 outlook numbers above reflect the
+updated outlook from April 2021.
+-2.1
+Higher
+-1.2
+5.0
+Above 4.5
+-0.8
+4,750
+Net debt is group liquidity less financial debt. For more information about our liquidity, see the Notes
+to the Consolidated Financial Statements, Note (E.3).
+-3,755
+Accounts receivable and other assets
+1
+1
+37,672
+39,192
+34,857
+36,050
+1,417
+1,350
+1,398
+1,792
+2020
+5,244
+2021
+-
+Inventories
+Fixed assets
+Financial assets
+Property, plant, and equipment
+Intangible assets
+Assets
+€ millions
+SAP SE Balance Sheet as at December 31
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+German Commercial Code (Short Version)
+4,544
+Marketable securities and liquid assets
+1,391
+29,372
+2,046
+2,233
+15,122
+15,693
+Total shareholders' equity and liabilities
+Deferred income
+Liabilities
+Provisions
+Shareholders' equity
+Equity and liabilities
+44,922
+47,320
+Total assets
+1
+1
+Surplus arising from offsetting
+514
+512
+Deferred taxes
+1,487
+979
+Prepaid expenses and deferred charges
+5,248
+6,635
+Short-term assets
+703
+Combined Group
+Management Report
+27,740
+Stakeholders
+SAP Integrated Report 2021
+-9,859
+1,385
+1,026
+14,669
+15,370
+2020
+2021
+German Commercial Code (Short Version)
+-
+Net income
+Other taxes
+Income after taxes
+-9,112
+Income taxes
+Finance income
+Operating profit
+Other operating expenses
+Depreciation and amortization
+Personnel expenses
+Cost of services and materials
+Other operating income
+Total revenue
+€ millions
+SAP SE Income Statement
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Income before taxes
+-2,765
+-2,362
+-719
+SAP
+In 2021, SAP SE total assets closed at €47,320 million (2020: €44,922 million).
+SAP SE income before taxes increased €161 million to €3,286 million (2020: €3,125 million). Income
+taxes decreased €43 million to €583 million (2020: €626 million). After deducting taxes, the resulting
+net income was €2,692 million (2020: €2,485 million), an increase of €207 million year over year.
+Assets and Financial Position
+Finance income was €2,530 million (2020: €1,724 million), representing a year-over-year increase of
+€806 million. This increase is primarily due to a €120 million increase in income from investments, a
+€770 million increase in results from profit and loss transfer agreements, and an offsetting effect of
+€78 million increase in write-downs on financial assets.
+Other operating expenses decreased €275 million to €2,298 million (2020: €2,573 million). This
+decrease is mainly attributable to a €495 million decrease in currency exchange losses and a
+€47 million decrease in impairment of receivables. The decrease in other operating expenses was
+partly offset by a €122 million increase in services purchased and a €63 million increase in other
+services expense.
+SAP SE personnel expenses, mainly the labor cost of software developers, service and support
+employees, and administration staff employed by SAP SE, increased by 17% to €2,765 million
+(2020: €2,362 million), primarily due to an increase in shared-based compensation expenses and
+headcount increase over the year.
+SAP SE cost of services and materials increased 8% to €9,859 million (2020: €9,112 million). Services
+received increased €724 million to €7,715 million (2020: €6,991 million), mainly due to increased
+services received in the context of intra-Group cost allocations. The costs for licenses and
+commissions increased €17 million to €2,111 million (2020: €2,094 million).
+SAP SE operating profit decreased 46% to €756 million (2020: €1,401 million). Other operating
+income decreased €358 million to €1,026 million (2020: €1,385 million). The year-over-year decrease
+is primarily due to a €494 million decrease in gains from currency effects, partly offset by the disposal
+gain relating to the transfer of the business to SAP Fioneer of €117 million.
+Service revenue increased 86% to €845 million in 2021 (2020: €453 million), other revenue increased
+2% to €2,314 million (2020: €2,273 million).
+The total revenue of SAP SE in 2021 was €15,370 million (2020: €14,669 million), an increase of 5%.
+Product revenue increased 2% to €12,211 million (2020: €11,943 million). As in previous years,
+product revenue was primarily generated from license fees paid by subsidiaries of SAP SE.
+2,485
+2,692
+-15
+-12
+2,500
+2,703
+-625
+-583
+3,125
+3,286
+1,724
+2,530
+1,401
+756
+-2,573
+-2,298
+-606
+To Our
+Management Report
+22
+47,320
+Strategy: Measuring Our Success
+How We Measure and Manage Our
+Performance
+Customers:
+Main KPI: Customer Net Promoter Score,
+Revenues
+Security, Data Protection, and Privacy:
+Vision and Strategy; Due Diligence for
+Security Topics; Due Diligence for
+Data Protection Topics
+Vision and Strategy; Due Diligence
+Customers:
+Notes to the Consolidated Financial
+Statements, Note (G.3)
+Notes to the Consolidated Financial
+Statements, Section B - Employees
+References to Financial Statements and
+Notes
+How We Measure and Manage Our
+Performance
+Business Conduct:
+Financial Performance: Review and Analysis
+Expected Developments and Opportunities
+How We Measure and Manage Our
+Performance
+Energy and Emissions:
+Main KPI: Net carbon emissions
+Expected Developments and Opportunities
+Strategy: Measuring Our Success
+Main KPI: Employee Engagement Index
+Employees and Social Investments:
+How We Measure and Manage Our
+Performance
+Measures and Results, Including Main
+KPIs
+Vision and Strategy; Due Diligence
+Business Conduct:
+Vision and Strategy; Due Diligence
+Energy and Emissions:
+Opportunities from Our Employees
+Strategy: Measuring Our Success
+Expected Developments and Opportunities
+Security, Data Protection, and Privacy:
+How We Measure and Manage Our
+Performance
+Notes to the Consolidated Financial
+Statements, Section A - Customers
+In 2021, we identified the activity “8.1 Data processing, hosting, and related activities" as our only
+relevant Taxonomy-eligible economic activity contributing to climate change mitigation. SAP has
+Eligibility Assessment
+Accounting Policy and Contextual Information
+15%
+14%
+33%
+Proportion of eligible activities (in %)
+-1,733
+-6,400
+27,842
+Total
+-1,472
+-5,502
+18,625
+Non-eligible activities
+-261
+-898
+9,217
+(contributing to climate change
+mitigation)
+8.1 Data Processing and Hosting
+Capital Expenditures
+Operational
+Expenditures
+Revenue
+2021
+€ millions, unless otherwise stated
+Sustainable Finance: EU Taxonomy Disclosures
+Consolidated Income Statements - Total
+Revenue
+Expected Developments and
+Opportunities:
+13
+Employees and Social Investments:
+Vision and Strategy; Due Diligence
+Information
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+Opportunities section.
+SAP SE is subject to essentially the same opportunities and risks as the SAP Group. For more
+information, see the Risk Management and Risks section and the Expected Developments and
+Opportunities and Risks
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Stakeholders
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+98/338
+97/338
+Liabilities increased €1,632 million to €29,372 million (2020: €27,740 million). This increase mainly
+resulted from a €1,787 million increase in liabilities to affiliated companies, primarily due to higher
+cash contributions by subsidiaries through SAP SE's centralized management of finance and liquidity.
+Provisions increased €187 million to €2,233 million (2020: €2,046 million). Other provisions increased
+€235 million to €1,529 million (2020: €1,294 million), primarily as a result of an increase in other
+obligations toward employees. In contrast, provisions for tax decreased €50 million to €689 million
+(2020: €739 million).
+Marketable securities and liquid assets increased €687 million to €1,391 million (2020: €703 million).
+SAP SE shareholders' equity increased 4% to €15,693 million (2020: €15,122 million). Against outflows
+of €2,182 million associated with the payment of the dividend, there was a €2,692 million increase
+due to net income for 2021. The equity ratio (that is, the ratio of shareholders' equity to total assets) is
+33% (2020: 34%).
+The increase of €700 million in accounts receivable and other assets was primarily the result of a
+€479 million increase in receivables from affiliated companies and a €198 million increase in
+tax assets.
+Financial assets increased €1,193 million year over year to €36,050 million (2020: €34,857 million),
+mainly due to capital contributions to subsidiaries and the acquisition of AppGyver Inc.
+Intangible assets increased €395 million year over year to €1,792 million (2020: €1,398 million). This
+increase was mainly caused by the addition of €632 million in goodwill and additions of €71 million in
+intellectual property and other similar rights in connection with the Signavio merger.
+44,922
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+100/338
+Security, Data
+Protection, and
+Privacy
+Customer Matters
+Anti-Corruption and
+Bribery Matters
+Matters
+Environmental
+Employee Matters
+99/338
+SAP determines which non-financial information has to be disclosed based on a materiality analysis
+we perform using internal and external input. The individual non-financial aspects to be covered by
+the non-financial statement are addressed in the following sections of our combined management
+report if material. The aspects human rights and social matters have not been identified as material
+topics according to section 289c (3) HGB. Nevertheless, these topics are important for SAP and
+discussed in the Human Rights and Labor Standards and Social Investments sections in our
+combined management report. No material risks according to section 289c (3) sentence nos. 3
+and 4 HGB have been identified.
+Non-Financial Disclosures in SAP's Combined Management Report
+SAP's business model is described in the Strategy section of the combined management report. Good
+governance is a prerequisite for continued success and is described throughout the combined
+management report. Therefore, we do not explicitly list this material topic in our non-financial
+statement.
+Business Model
+The social and environmental data and information included in the SAP Integrated Report has been
+prepared in accordance with the Global Reporting Initiative (GRI) Standards: Core Option.
+Reporting Framework
+For more information, see the Sustainable Finance: EU Taxonomy Disclosures subsection.
+Additionally, following Article 8 of Regulation 2020/852 of the European Parliament and of the Council
+of the European Union (EU Taxonomy), we have included information on how and to what extent
+SAP's activities are associated with economic activities that qualify as environmentally sustainable
+under this regulation.
+With this section and the information referenced to in this section, SAP SE fulfills its duty to produce a
+non-financial statement (NFS) for the holding company, pursuant to section 289b–e of the German
+Commercial Code (HGB), and a non-financial group statement, pursuant to section 315b-c in
+conjunction with section 289c-e of the German Commercial Code (HGB), in the form of a combined
+non-financial statement. The relevant non-financial matters are referenced in the table below and can
+be found in the relevant sections of our combined management report.
+Non-Financial Statement
+Including Information on
+Sustainable Activities
+Additional
+Information
+Due Diligence; Policies and
+Guidelines (Concepts)
+Current financial debt
+Combined Group
+To Our
+SAP
+The dividend payment of €2,182 million made in 2021 exceeded the amount paid the preceding year
+(€1,864 million), while the dividend paid per share increased from €1.58 to €1.85.
+Net cash outflows from financing activities were €56 million in 2021, compared to €3,997 million in
+2020. In 2021. we received €2.8 billion in proceeds from the public offerings of Qualtrics shares and
+repaid €1.25 billion of the acquisition term loan for Qualtrics, prior to its final maturity date in 2022.
+Further, we repaid €0.5 billion in Eurobonds, and €0.15 billion of a commercial paper program
+(Commercial Paper). In 2021, we drew two short-term loans of €0.95 billion and €0.5 billion
+respectively, as well as €0.15 billion in Commercial Paper. The cash outflows in 2020 resulted from the
+buyback of treasury shares with a volume of €1.5 billion, repayments of €1.15 billion in Eurobonds
+when they matured, the repayment of €0.75 billion in the acquisition term loan for Qualtrics, the
+repayment of US$0.29 billion in U.S. private placements when they matured, and the repayment of
+€0.17 billion in Commercial Paper.
+In 2021, free cash flow decreased to €5,049 million (2020: €6,000 million). The free cash flow
+conversion rate, defined as free cash flow as a percentage of profit after tax, decreased to 94%
+compared to 114% in 2020.
+Cash outflows from investing activities were €3,063 million in 2021 (2020: €2,986 million). We paid, net
+of cash received, a total of €1.1 billion mainly for the Signavio and Clarabridge acquisitions in 2021,
+compared to €0.6 billion mainly for the Emarsys acquisition in 2020. Capital expenditure on intangible
+assets and property, plant, and equipment remained at a comparable level. For more information
+about current and planned capital expenditures, see the Assets section and the Investment Goals
+section.
+In 2021, cash inflows from operating activities decreased €971 million to €6,223 million
+(2020: €7,194 million). This is particularly due to higher income tax payments (€2.1 billion in 2021
+compared to €1.2 billion in 2020) and lower payments related to restructuring (€0.0 billion in 2021
+compared to €0.2 billion in 2020). Cash collected from customer contracts was at a similar level as in
+2020.
+-99
+-3,997
+-56
+3
+-2,986
+-3,063
+SAP Integrated Report 2021
+Net cash flows from financing activities
+-13
+7,194
+6,223
+Net cash flows from operating activities
+A in %
+2020
+2021
+€ millions
+Analysis of Consolidated Statements of Cash Flow
+92/338
+-6,503
+-1,784
+Net cash flows from investing activities
+To Our
+Stakeholders
+Combined Group
+118%
+8,090
+2018
+2017
+1,630
+3,715
+42%
+128%
+€ millions | change since previous year
+(Incl. Additions from Business Combinations)
+Investment in Goodwill, Intangible Assets, and Property, Plant,
+and Equipment
+Total current assets increased 33% in 2021 from €15,069 million to €20,044 million, mainly driven by
+an increase in cash and cash equivalents.
+26
+28
+74
+72
+Current
+■Non-current
+Assets
+Percent
+2020
+2021
+Total assets increased 22% year over year to €71,169 million.
+Analysis of Consolidated Statements of Financial Position
+Assets (IFRS)
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
++95
+2019
+-1,864
+Other
+For information about the impact of cash, cash equivalents, current investments, and our financial
+liabilities on our income statements, see the analysis of our financial income, net, in the Operating
+Results (IFRS) section.
+Modest increase
+The increase in group liquidity compared to 2020 was mainly due to the cash inflows from our
+operations and the proceeds from the public offerings of Qualtrics shares.
+Group liquidity consists of cash and cash equivalents (for example, cash at banks, money market
+funds, and time deposits with original maturity of three months or less) and current investments (for
+example, time deposits and debt securities with original maturities of greater than three months, and
+remaining maturities of less than one year included in current other financial assets). Group liquidity
+on December 31, 2021, primarily comprised amounts in euros and U.S. dollars.
+4,916
+-8,623
+-3,706
+-23
+-2,120
+-2,143
+Net debt including lease liability
+Lease liability
+91/338
+4,939
+-1,563
+189
+-13,283
+-13,094
+Net debt (-)
+Financial debt
+2,463
+-11,801
+-9,338
+Non-current financial debt
+-2,273
+-1,482
+-6,503
+SAP
+SAP Integrated Report 2021
+To Our
+Proceeds from
+IPO
+Dividends
+Business
+Combi-
+nations
+-664
+-378
+-816
+Lease
+Payments
+Capital
+Expen-
+diture
+Operating
+Cash
+Flow
++7,194
+PY: -8,286
+Net
+Debt
+12/31/2020
+-1,563
++390
++2,828
+Free Cash Flow +5,049
+-2,182
+-1,145
+-374
+-800
+€ millions
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
++6,223
+-6,503
+Development of Net Debt
+Stakeholders
+Net
+Debt
+12/31/2021
+Stakeholders
+98%
+1,780
+-78%
+Tokyo
+Japan
+December 2025
+0
+86
+New office building for approx. 3,500
+employees
+Bangalore
+India
+March 2023
+46
+54
+54
+New office building for approx. 1,500
+employees
+New office building for approx. 1,200
+employees¹
+Bulgaria
+September 2026
+4
+219
+General renovation of headquarters
+building for approx. 1,500 employees
+Walldorf
+Germany
+September 2023
+15
+94
+New office building for approx. 600
+employees
+Munich
+Sofia
+29
+1
+August 2022
+SAP Integrated Report 2021
+SAP
+96/338
+95/338
+SAP SE's income statement is classified following the nature of expense method and presents
+amounts in millions of euros.
+Income
+The SAP SE annual financial statements are prepared in accordance with the reporting standards in
+the German Commercial Code and the German Stock Corporation Act. The full SAP SE annual
+financial report and unqualified audit report are submitted to the operator of the Elektronischer
+Bundesanzeiger (Online German Federal Gazette) for publication and inclusion in the
+Unternehmensregister (German Business Register). It is available from SAP SE on request.
+On April 13, 2021, SAP SE and investment company Dediq GmbH, Munich, Germany, ("Dediq")
+announced that they had agreed to enter into a partnership in the area of financial services. Following
+the close of the transaction in September 2021, SAP SE and Dediq jointly own the new "SAP Fioneer"
+entity (with SAP owning a minority share). The disposal gain relating to the transfer of the business
+(predominantly IP and employees) is included in Other operating income.
+On March 5, 2021, SAP SE completed the acquisition of Signavio GmbH, Berlin, Germany ("Signavio"),
+a leader in the enterprise business process intelligence and process management space.
+Subsequently, based on the merger agreement concluded on October 25, 2021, SAP SE took over all
+assets and liabilities of Signavio with effect from January 1, 2021. The difference between the
+acquisition cost of the Signavio shares and the assets and liabilities carried at fair value has been
+recognized as goodwill on the balance sheet.
+As the owner of the intellectual property in most SAP software, SAP SE derives its revenue mainly
+from software license fees and bears the Group-wide research and development expenses for the
+most part.
+SAP SE is headquartered in Walldorf, Germany, and is the parent company of the SAP Group, which
+comprises 290 companies. SAP SE is the Group holding company and employs most of the Group's
+Germany-based development and service and support personnel.
+Report on the Economic Position of SAP SE
+In 2021, SAP's brand value increased compared to 2020. According to the Interbrand “Best Global
+Brands" annual survey, SAP ranked as the 20th most valued brand in the world (2020: 18th). Against
+other German brands, the SAP brand ranks third behind Mercedes-Benz and BMW, and third globally
+against other brands in the business services sector. Interbrand determined our brand value to be
+US$30 billion, an increase of 7% compared to the previous year (2020: US$28 billion). Kantar BrandZ
+recognized SAP as the world's 26th most valuable brand in the Kantar BrandZ 2021 Most Valuable
+Global Brands ranking (2020: 17th). The ranking estimates SAP's brand value at US$69 billion
+(2020: US$58 billion), an increase of 20% compared to the previous year.
+On December 31, 2021, SAP was the second most valuable company in the German DAX 40 in terms
+of market capitalization based on all issued shares.
+The majority of (intangible) resources that are the basis for our current as well as future success does
+not appear in the Consolidated Financial Statements. This is apparent from a comparison of the
+market capitalization of SAP SE (based on all issued shares), which was €153.4 billion at the end of
+2021 (2020: €131.7 billion), with the book value of our equity in the Consolidated Financial
+Statements, which was €41.5 billion (2020: €29.9 billion). This means that the market capitalization of
+our equity is more than three times higher than the book value. The difference is mainly due to certain
+internally generated intangible resources that the applicable accounting standards do not allow to be
+recorded (at all or at fair value) in the Consolidated Financial Statements. These resources include
+customer capital (our customer base and customer relations); employees and their knowledge and
+skills; our ecosystem of partners; the majority of internally developed software; our ability to innovate;
+the brands we have built up, in particular, the SAP brand itself; and our organization.
+Competitive Intangibles
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+For more information about planned investment expenditures, see the Investment Goals section.
+There were no material divestitures of facilities within the reporting period.
+94/338
+1 In Sofia we bought a building under construction and plan to complete it.
+Germany
+3,522
+November 2023
+50
+The equity ratio (that is, the ratio of shareholders' equity to total assets) grew 7pp to 58% (2020: 51%).
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+Management Report
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+93/338
+Total non-current liabilities decreased 14% to €13,510 million in 2021 compared to the previous year's
+figure of €15,696 million. This was mainly due to a decrease in non-current financial liabilities. For
+more information about our financing activities in 2021, see the Finances (IFRS) section.
+Current liabilities grew 26% to €16,136 million in 2021 (2020: €12,842 million). This was mainly due to
+an increase in current financial liabilities. For more information about our financing activities in 2021,
+see the Finances (IFRS) section.
+22
+23
+Equity Ratio
+Current
+27
+58
+51
+■Non-current
+■Shareholder's equity
+Percent
+Liabilities
+2020
+2021
+Total non-current assets grew 18% to €51,125 million (2020: €43,395 million). Among other effects,
+this change was mainly due to an increase in goodwill resulting from foreign-exchange-related
+revaluations as well as the Clarabridge and Signavio acquisitions and an increase in listed and
+unlisted equity investments resulting from fair value increases and purchases.
+2021
+2020
+19
+Percent change since previous year
+60
+56
+Estimated
+Completion Date
+Costs Incurred as at
+12/31/2021
+Cost
+Estimated Total
+New office building for approx. 1,250
+employees
+Berlin
+Germany
+Short Description
+Location of Facility
+Country
+In 2021, 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.
+Principal Investments and Divestitures Currently in Progress
+€ millions
+Construction Projects
+2021
+2020
+Opp
+7pp
+51
+58
+2019
+2018
+2017
+-5pp
+-4pp
+Opp
+51
+3
+-0.8
+Additional
+Information
+Around 6.0
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+6.2
+Cash Flows and Liquidity
+2021 Actual Cash Flow and Liquidity Performance Compared to Outlook
+Stakeholders
+€ billions
+Operating cash flows
+Capital expenditure
+Free cash flow
+Income taxes payouts
+2020 Results
+2021 Outlook¹
+2021 Results
+7.2
+We met or exceeded the outlook for 2021.
+83
+85
+86
+percent
+Employee Engagement Index
+Our Key People-Related KPIs at a Glance
+Information
+We measure the progress of individual employee and organizational health through the Business
+Health Culture Index 14 (BHCI). In 2021, the BHCI was 81% (2020: 80%) and exceeded the upper
+end of our target range. For 2022 through 2025, our ambition remains to keep the BHCI between 78%
+and 80%. We continuously monitor our innovation culture and simplification of processes. We
+adjusted the composition of both indices to better reflect the dimensions we would like to improve,
+even though we consider the scores comparable. In 2021, we achieved a very strong Innovation
+Culture Index 15 of 89% (last measured in 2019 based on different survey questions and reported as
+an Innovation Score of 79%). After a slight dip in 2020 (58%), the Simplification of Processes
+Index 16 rebounded to 66% in 2021, indicating that our investments in this area took effect.
+The Employee Engagement Index 13 decreased to 83% (-3 pp compared to 2020) and is slightly
+below our target range. For 2022 through 2025, our ambition remains to keep the Employee
+Engagement Index score between 84% and 86%. Our Leadership Trust NPS reached an all-time
+high of 67 in 2021 (2020: 62) since its introduction in 2013. For more information about the
+measurement of leadership trust, see the Performance Management System section.
+and leadership trust, twice over the year. The average scores from both data collections were used as
+the full-year Employee Engagement Index and Leadership Trust Net Promoter Score (NPS).
+Additional
+83
+In addition, we measured a Retention Rate of 92.8% (2020: 95.3%). We define retention as the ratio
+of the average number of employees, minus employees who voluntarily departed (excluding
+restructuring-related terminations), to the average number of employees (in full-time equivalents or
+FTES). The rate of Women in Management 17 increased to 28.3% compared to 27.5% in 2020.
+Through 2022, our ambition remains to increase the rate of women in management to 30%.
+Leadership Trust
+Net Promoter Score
+Simplification of
+Processes
+percent
+2017
+2018
+2019
+2020
+2021
+83
+\-3pp
+Innovation Index
+percent
+Further Information on
+Sustainability
+67 7+5pp
+Employee
+Retention
+percent
+81 7+1pp
+Women in
+Business Health
+Culture Index
+percent
+Consolidated Financial
+Statements IFRS
+SAP is committed to ensuring a fair and equal treatment of all employees in a sustainable manner.
+For that reason, we established comprehensive policies that guide us in our daily business. Examples
+are our Global Anti-Discrimination Policy and Global Health & Safety Policy.
+Combined Group
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Employees and Social
+Investments
+Vision and Strategy
+People are at the heart of our organization. Aiming for a highly engaged, diverse, future-fit workforce
+equipped with the right skills helps SAP attract the best talent.
+Interwoven with our product and go-to-market strategies, our People Strategy is centered around the
+employee journey and their experience. Just as we help our customers digitalize and simplify their
+processes, we strive to do the same for our employees by empowering them to bring value to our
+customers. We continue to evolve and execute along seven strategic pillars from 2020 that contribute
+to our business strategy and value generation. We summarize this value generation across three
+themes, powered by operational excellence to showcase Human Experience Management:
+Building the Skills for the Future by attracting the best and most diverse talent and continuously
+up-/reskilling our people
+Driving SAP's Winning Culture by fostering a culture enabling and rewarding impact and
+business outcomes
+Changing the Way We Lead by driving for accountability and empowerment, in a healthy,
+inclusive, and diverse environment
+Due Diligence
+Governance
+Since January 1, 2021, Sabine Bendiek has served as Chief People Officer and Labor Relations
+Director and led our HR organization. On July 1, 2021, she also became Chief Operating Officer and
+has since been responsible for the Executive Board area People & Operations as Chief People &
+Operating Officer.
+To best support our People Strategy, we reshaped our HR organization in 2021 and it now includes
+the following functional areas: a newly introduced Future of Work team (including Global Health &
+Well-Being); Global Diversity & Inclusion; SAP Learning; Talent Attraction; and Total Rewards. In
+addition, Global People Success Services combines the HR Business Partner organization with Global
+HR Service Delivery.
+Guidelines and Policies
+Management
+percent
+How We Measure and Manage Our Performance
+The impact of our people strategy is measured by seven KPIs. 12 Five out of the seven KPIs are based
+on the results of our engagement survey program “#Unfiltered."
+With #Unfiltered, we strengthen our commitment to listen regularly to our employees and act together
+on their feedback. In 2021, we defined strategy, health and well-being, and equality as areas where
+we increased our focus. We gauged the sentiment on these topics, as well as employee engagement
+12 In the Employees and Social Investments section, the metrics Employee Retention, External Hires, Female External Hires, Headcount,
+Women in Management, and Women in Workforce include Qualtrics data. All other metrics are reported excluding Qualtrics.
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Management Report
+897+10pp
+17 This includes manager managing teams, manager managing managers, Executive Board members.
+92.8-2.5pp
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+evaluated the description of the activity 8.1 provided in the Annex 1 to the EU Taxonomy Climate
+Delegated Act of June 4, 2021, and concluded that the operation of SAP's cloud infrastructure
+comprising both SAP's own data centers and third parties engaged by SAP match the description of
+the activity "8.1 Data processing, hosting, and related activities" and is therefore considered as
+Taxonomy-eligible.
+We also evaluated the relevance of the economic activity "8.2 Data-driven solutions for GHG
+emissions reductions." In light of our strategic commitment to sustainability management solutions
+that, for example, help our customers minimize carbon footprints and reduce waste through
+responsible supply chain management, we expect the share of associated revenues, operational
+expenditures, and capital expenditures to increase over the next years. In 2021, however, SAP has not
+recognized material revenues, operational expenditures, and capital expenditures associated to this
+activity that could be classified as Taxonomy-eligible. For more information about our sustainability
+management portfolio, see the Environment and Emissions section.
+In addition, we performed an eligibility assessment of the activity "8.2 Computer programming,
+consultancy and related activities" relating to climate change adaptation. According to the EU
+Taxonomy regulation, only activities that are classified as "enabling,” that is, activities that help other
+activities substantially contribute to climate change adaptation, can be included in the turnover KPI.
+Activity 8.2 is not categorized as an “enabling" activity and therefore we cannot attribute any turnover
+to this activity. Based on our current understanding of the FAQ document published by the European
+Commission on February 2, 2022, regarding the interpretation of certain legal provisions of the
+Delegated Act under Article 8 of the EU Taxonomy Regulation of July 6, 2021, we also concluded that
+operating and capital expenditures relating to activity 8.2 (climate change adaptation) are not
+Taxonomy-eligible.
+Revenue
+As outlined above, we have identified only one activity as a relevant Taxonomy-eligible economic
+activity to which revenues can be attributed. We considered materiality aspects in this process. While
+SAP may conduct more activities that could be designated as Taxonomy-eligible, currently only "8.1
+Data processing, hosting, and related activities" was identified as material in terms of associated
+revenues. This may change in the future as SAP is aiming to extend our sustainability management
+product portfolio and increase the corresponding revenue share.
+As described in the Notes to the Consolidated Financial Statements, Note A.1, in detail, SAP's cloud
+revenue consists mainly of fees earned from providing the following services:
+Software as a service (SaaS)
+Platform as a service (PaaS)
+Infrastructure as a service (laaS)
+These services conform with the description of activity 8.1. Therefore, we have designated the revenue
+resulting from these services as eligible for the EU Taxonomy. Other revenues that qualify as cloud
+revenue but cannot be classified as Taxonomy-eligible have been excluded.
+Total revenue was determined according to IFRS, specifically IFRS 15, and matches total revenue
+presented in SAP's Consolidated Income Statements. For more information about how we recognize
+revenue and the components of revenue, see the Notes to the Consolidated Financial Statements,
+Note A.1.
+For a detailed description of the development and key drivers of SAP's revenue, see the Performance
+Against Our Outlook for 2021 (Non-IFRS) and Operating Results (IFRS) sections in the combined
+management report.
+Operational Expenditures
+We have designated those costs as Taxonomy-eligible that relate to assets and processes associated
+with the Taxonomy-eligible activity "8.1 Data processing, hosting, and related activities." We considered
+materiality aspects in the identification process of relevant costs and activities. The costs connected to
+101/338
+102/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Combined Group
+18 In 2021, we adjusted the definition of Early Talents In the past, the term referred to external hires of graduates with up to two years'
+professional experience post graduation.
+It is critical that our employees see the link between their individual contribution and SAP's future
+success. Early in 2021, SAP's top leadership set goals for their organization and made them visible to
+With our next-generation performance management approach, we aim to establish a high-
+performance culture, by linking business goals to the impact of individuals and teams with
+development opportunities and meaningful reward packages. Smart and transparent goal-setting
+approaches and continuous review processes, as well as equitable, competitive, and differentiated
+compensation structures, are a necessary foundation to drive high performance.
+28.37+0.8pp
+Below is an overview of how we put the three themes of our people strategy and overall KPIs into
+practice.
+Building the Skills for the Future
+Attracting, hiring, and onboarding the best and most diverse talent is key for the future success of SAP.
+After a unique 2020 shaped by the global pandemic, in 2021, we saw a significantly increased
+competition for talent all over the globe. Our refreshed employer value proposition - including a
+13 We define employee engagement as an index score of five items measuring the satisfaction and commitment of our employees, how
+proud they are of our company, and how strongly they identify with SAP.
+14 The index covers questions concerning how employees rate their personal well-being and the working conditions at SAP, including our
+leadership culture.
+15 The index consists of four items showing to what extent employees feel encouraged and supported to innovate.
+16 The index consists of seven items showing ease of understanding and use of our processes at SAP.
+SAP
+109/338
+110/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+667+8pp
+Combined Group
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+stronger focus on “Early Talents” (defined as hires with 0-3 years of experience in a professional
+setting hired into professional roles 18) and innovation is key to us attracting people with the right fit.
+-
+Despite ongoing challenges due to the pandemic, we were still able to make advancements in
+building a highly inclusive workforce across various demographic aspects (among others, e.g.
+generations, gender, nationalities). Overall, we externally hired 13,854 (2020: 8,486) employees, of
+whom 33.1% (2020: 29.4%) were Early Talents and 38.1% (2020: 35.5%) women.
+We strive to position SAP as a talent magnet. SAP has earned 160 (2020: 125) employer recognitions,
+most notably the World's Best Workplaces by Great Place to Work, World's Most Attractive
+Employer by Universum and LinkedIn Talent Award – Best Employer Brand by LinkedIn.
+Additionally, we worked closely with more than 2,700 academic institutions on events, executive
+lectures, office visits, competitions, student club sponsorships, and workshops to attract students and
+graduates. Our universal SAP Internship Experience Program has continued to expand and now
+exists in 22 countries with a total of 1,461 (2020: 597) participants around the world. In 2021, more
+than 1,200 students were enrolled in SAP's vocational training program (in Australia, Brazil, China,
+Germany, Hungary, India, Ireland, Japan, New Zealand, Singapore, South Korea, Switzerland, and the
+United States). The conversion rate (number of students who stayed with SAP after completing their
+dual studies) for vocational training students was 75% in 2021 (2020: 67%).
+The average tenure remained at the same high level (2021: 8.0 years; 2020: 7.6 years).
+Even when employees leave SAP, it is important that we stay connected. Our SAP Alumni Network
+offers a program to keep our former colleagues connected and foster a trusted network for the benefit
+of SAP and our ecosystem. In 2021, our alumni community included 14,909 former (2020: 9,096) and
+4,379 current (2020: 4,082) SAP employees.
+As part of our strategic pillar "building the skills for the future," we focus on our skill transformation.
+SAP expects a shift in current skills that will cease to exist and new capabilities that will be needed in
+the future. In some cases, this shift is predictable, while in others it will require an adaptive workforce
+management approach focusing on continuous skill transformation to ensure our people are
+equipped to support future work requirements.
+At SAP, learning mainly happens on the job, through interactions with colleagues and formal learning
+activities. Self-paced online programs and live interactive training, including courses for technical,
+functional, and professional skills, are open to all employees. Our peer-to-peer learning portfolio
+encompasses coaching, mentoring, job shadowing, and facilitation opportunities. In 2021, 97% of our
+employees participated in learning and logged more than three million hours of trackable learning.
+Additionally, 22,574 of our employees went through targeted upskilling programs tied to SAP's cloud
+journey.
+The successful delivery of our strategy also requires a robust succession management process.
+Therefore, in 2021, we launched a systematic approach focusing on our most critical and highest
+value-generating roles. It incorporates a clearly defined succession pipeline and targeted
+development and exposure for incumbents and successors to these roles.
+Driving SAP's Winning Culture
+Management Report
+108/338
+84
+11 As part of a multi-year harmonization process, the survey question used to measure NPS was adjusted in 2021. Therefore, the results
+may not be fully comparable. For more information, see the Performance Management System section.
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Due Diligence for Security Topics
+Governance
+SGS is led by a chief security officer who reports directly to the SAP CEO. SGS divisions are
+responsible for areas such as product and application security, cyberdefense, operational security risk
+management, security compliance, executive protection, physical security, and a Trust Office that
+supports customers and partners with security-related issues.
+The SAP Security Governance Model is designed to ensure executive engagement and facilitates
+shared responsibility in semiannual SAP Security Advisory Board and monthly Security Council
+meetings, as well as in biweekly updates to the Executive Board.
+104/338
+Our commitment to customers is to be open and transparent about security vulnerabilities. To ensure
+this, we work with several external stakeholder groups including SAP user groups for the Americas
+and for German-speaking countries.
+The purpose of the SAP Global Security Policy is to provide governance and structure for an
+appropriate and effective level of information security within SAP and our affiliated businesses.
+Aligned with the overall SAP corporate strategy and vision, it details the management intent,
+expectations, and strategic goals and objectives for SAP security.
+This policy provides high-level requirements for numerous security domains. These include, but are
+not limited to, access control, physical security, network security management, incident response, and
+acceptable use. These requirements apply to all SAP employees, our contractors, consultants, as well
+as external parties that are granted access to SAP information and information assets. SAP reviews
+the SAP Global Security Policy annually and enacts modifications as deemed appropriate and
+necessary to protect SAP and our own and our customers' data and assets where new threats or
+vulnerabilities are identified.
+All SAP employees are required to read and adhere to this internal policy. The SAP Security Policy
+Framework consists of several levels of security documents that support the requirements described
+in the policy. In addition, the different LoBs at SAP may have supporting policies, standards,
+procedures, and practices.
+Due Diligence for Data Protection Topics
+Governance
+Within the scope of their responsibilities, our global data protection officer (DPO) monitors the
+compliance of activities involving the processing of personal data. The DPO reports to the SAP CFO.
+Within the Executive Board, the SAP CFO is responsible for compliance and enforcement of data
+protection and privacy. The DPO owns the SAP Global Data Protection and Privacy Policy that
+addresses SAP's data protection governance, and regularly informs the CFO about the status of data
+protection compliance in the SAP Group.
+To meet and ensure consistent security and data protection compliance, SAP has implemented a
+formal governance model that assigns clear responsibilities across the SAP Group. Upon request, the
+DPO attends steering committee meetings and reports on matters relevant to data protection to the
+Audit and Compliance Committee of the SAP Supervisory Board.
+SAP has established a global network of data protection and privacy coordinators (DPPCs) across all
+SAP Group entities that process personal data. This DPPC network is aimed to ensure data
+protection and privacy compliance on a local level. Local DPPCs increase awareness by conducting
+local training. Where new data protection laws evolve, they also help the Data Protection and
+Privacy (DPP) team acting on behalf of the DPO identify and analyze them. If this requires
+compliance activities, they align with the affected LoBs and help drive the relevant implementation.
+Additional regional DPPCs further support and monitor changes to applicable laws. The DPPC
+network regularly engages with SAP's government relations team to represent SAP's interests in the
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Guidelines and Policies
+Further Information on
+Sustainability
+103/338
+We develop and pursue our global data protection and privacy strategy in accordance with our
+business strategy. Our global data protection and privacy strategy is to constantly monitor the global
+regulatory data protection compliance landscape, identify relevant stakeholders, and enable them to
+take necessary measures for their adoption. It is also designed to safeguard the processing of
+personal data. The strategy consists of four pillars to help meet compliance with applicable data
+protection laws and regulations. These pillars comprise the global data protection and privacy policy;
+mandatory global data protection and privacy training for employees; our global data protection and
+privacy coordinator network; and the global data protection management system – and are all aiming
+to ensure that we comply with applicable data protection laws.
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+this activity mainly include expenses for maintenance and repair relating to SAP's own cloud
+infrastructure as well as leasing expenses for hosting services provided by third parties.
+Total operating expenses according to the EU Taxonomy mainly include the following non-capitalized
+cost elements: research and development, short-term lease, and maintenance and repair relating to
+property, plant, and equipment. Other major expense components in SAP's Consolidated Income
+Statement, such as, for instance, depreciation, utilities (for example, costs for heating and electricity
+consumption), as well as most general and administrative cost, restructuring, and sales and marketing
+cost do not fall in scope of the definition of operating expenses according to the EU Taxonomy and
+are therefore excluded.
+For a detailed description of the development and key drivers of all operating expenses, see the
+Performance Against Our Outlook for 2021 (Non-IFRS) and Operating Profit and Operating Margin
+sections in our combined management report.
+Capital Expenditures
+In line with the EU Taxonomy regulation, total capital expenditures presented in this section include
+additions to tangible and intangible assets accounted for based on IAS 16, IAS 38, and IFRS 16, as
+well as additions to tangible and intangible assets (excluding additions to goodwill) resulting from
+business combinations.
+Taxonomy-eligible capital expenditures relate to assets and processes that are associated with the
+economic activity "8.1 Data processing, hosting, and related activities." We also considered materiality
+aspects in the identification process of relevant costs and activities. These expenses comprise mostly
+investments in SAP's cloud infrastructure.
+QAudit Scope
+107/338
+SAP
+SAP Integrated Report 2021
+To Our
+-
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Security, Data Protection, and
+Privacy
+Vision and Strategy
+Every day, organizations around the world trust SAP with their data – either on premise at their
+physical locations, in the cloud, or when using mobile devices while on the move. Our customers
+need to know that our goal is to keep their data safe, process it in a manner that complies with local
+legislation, and protect it from malicious use. For this reason, cybersecurity and security, as well as
+data protection and privacy, are of paramount importance to us.
+SAP Global Security
+Cloud solutions and services are increasingly important to many companies' daily operations. The
+COVID-19 pandemic has shown that digital solutions are critical to business resilience. As a result,
+digital transformation is accelerating and cybersecurity is now even more crucial to IT security
+professionals and business leaders, particularly in those enterprises that have moved their core
+processes to the cloud.
+The SAP strategy is focused on helping customers transform into intelligent and sustainable
+enterprises. Our SAP Global Security (SGS) organization supports this journey with its goal of
+reducing risk and promoting regulatory compliance, and by aligning people, procedures, and
+technology to protect business processes and data. The organization embraces and encourages a
+security-minded culture that embeds security in our development and deployment processes and
+helps secure digital transformation.
+SGS supports key stakeholders in our lines of business (LoBs), IT, and the presales organization in
+securing solutions, and drives operational excellence for security across the enterprise. To protect the
+organization's data and assets and support high-quality risk management and reporting, SGS regularly
+reviews and adapts our security policies, standards, and frameworks.
+Data Protection
+With our global product and services portfolio, SAP aims to protect the rights of individuals involved
+and meet relevant local requirements when processing personal data. In addition, we strive to
+strengthen SAP's reputation in the long term as a sustainable and trustworthy partner in the market.
+We have implemented safeguards to help protect the fundamental rights of everyone whose data is
+processed by SAP, whether they are customers, suppliers, partners, prospects, employees, or
+applicants.
+Stakeholders
+Additional
+The content of the non-financial statement was not subject to the statutory audit of the combined
+group management report. However, our external auditor carried out an independent limited
+assurance engagement on the non-financial statement including the EU Taxonomy disclosures. In
+addition, all non-financial aspects referenced to in the table Non-Financial Disclosures in SAP's
+Combined Management Report are assured by our external auditor, however, on different audit
+assurance levels (reasonable or limited). The Audit Scope box at the end of the respective
+chapters in the management report explains the audit scope of the disclosures in the respective
+chapter.
+legislative process. In this regard, SAP is participating in external working groups to help align industry-
+specific interests with respective governments.
+For related risks, see the Risk Management and Risks section, specifically the Cybersecurity and
+Security and Data Protection and Privacy subsections.
+QAudit Scope
+The content of the section Security, Data Protection, and Privacy was not subject to the statutory audit
+of our combined group management report. However, our external auditor performed an independent
+limited assurance engagement for the content of this section.
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Customers
+Vision and Strategy
+Focusing on Customer Success
+Related Risks for SAP
+We aim to maximize the value our customers derive from their investment in and relationship with
+SAP at every touchpoint in their experience with us over the engagement lifecycle. Our focus on value
+and experience drives our customers' success. Our customer-facing teams - across solutions, sales,
+services, customer engagement, ecosystem, and others – work together along an operating model
+that aims to harmonize internal processes with the goal of delivering improved outcomes for our
+Company-Wide Experience (XM) Program
+To further address and improve on customer feedback through research conducted using Qualtrics
+solutions, we developed the Company-Wide Experience (XM) program. This is an example of a
+program we have implemented aiming to achieve a consistent end-to-end experience for our
+customers. This program includes standardizing experience initiatives and methodologies to help
+identify and improve experience gaps across SAP.
+Due Diligence
+Governance
+The head of Customer Success leads customer-facing engagements across SAP's business. The Chief
+Marketing & Solutions Officer leads the development of our solution value propositions to provide
+clarity on SAP's core differentiators. The People & Operations Board area is responsible for
+conducting the Company-Wide XM program, including conducting the Customer Net Promoter
+Score (NPS) survey.
+Guidelines and Policies
+Numerous policies govern our relationships with our customers, including the Employee Code of
+Conduct, SAP Human Rights Commitment statement, and applicable General Terms and
+Conditions for our products.
+How We Measure and Manage Our Performance
+In 2021, our Customer NPS 11 increased 6 points year over year to 10 (2020: 4), achieving the upper
+end of our target range of 5 to 10.
+We aim to continue to increase our Customer NPS to a range of 11 to 15 points in 2022. Further, we
+want to see continuous improvements and increase the score steadily in the medium term.
+Customer NPS is a KPI in Executive Board remuneration as part of the short-term incentive
+component.
+For more information about the Customer NPS, see the Performance Management System section.
+Related Risks for SAP
+For related risks, see Sales and Services in the Risk Management and Risks section.
+Information
+customers.
+In 2021, SAP experienced two significant incidents in processing personal data - on our own behalf –
+that were subject to GDPR only and were reported to the supervisory authorities.
+We use the Customer Net Promoter Score (NPS) as a feedback mechanism to measure customer
+loyalty. This and other results from the customer survey allow us to directly understand what our
+customers are thinking and identify key pain points for action. Because of the importance of
+customers to SAP, Customer NPS is one of our main KPIs.
+SAP's own quality standards and international regulations require careful selection and monitoring of
+subprocessors processing personal data on behalf of SAP and SAP customers. With the goal that all
+subprocessors meet protection and security requirements for the processing of personal data, SAP
+has implemented a subprocessor verification process. All of SAP's subprocessors (for example,
+suppliers, vendors, and partners) are subject to this process. The process comprises three main
+compliance criteria for data protection-relevant subprocessors: (i) contractual compliance; (ii) self-
+assessments based on a questionnaire including transfer impact assessments on international data
+transfers to third countries; and (iii) remote and/or on-site audits.
+Global data protection and privacy training is conducted globally every two years and mandatory for
+SAP employees. This training helps our workforce handle personal data with due care and in
+accordance with the law and to maintain compliance with data protection requirements in their work.
+SAP has implemented a data protection management system (DPMS) for our organization. The
+DPMS is set according to the generally recognized standard for data protection management systems
+as defined in the British Standard BS 10012, which comprises the data protection requirements of the
+European Union (EU) General Data Protection Regulation (GDPR) since version 10012:2017. The
+DPMS covers almost all LoBs (excluding Qualtrics) and is planned to be implemented in all acquired
+companies as well. It is designed as a framework covering all aspects of data protection compliance
+of SAP organizations and employees. The DPMS is used as SAP standard methodology to ensure
+compliance with data protection legislation. The maintenance of the framework is subject to
+certification from the British Standards Institution that confirms data protection compliance annually.
+Guidelines and Policies
+SAP respects the rights of the data subjects to obtain information as to whether or not personal data
+concerning them is being processed. All necessary information is made available to the data subjects
+within the framework of the privacy statements on the respective SAP Web sites.
+How We Measure and Manage Our Performance
+Security
+Compliance processes at SAP adhere to trust-service criteria established by the American Institute of
+Certified Public Accountants (AICPA). Our security, availability, privacy, confidentiality, and processing
+integrity controls are designed to achieve the appropriate control objectives. In addition, independent,
+external auditing partners regularly conduct security compliance audits.
+SAP discloses vulnerabilities on the second Tuesday of every month ("Patch Day"). This disclosure
+mechanism provides customers with authoritative, public information about SAP software
+vulnerabilities from SAP that can be integrated with their existing risk management processes and
+tools.
+SAP strives to reduce risk by continuously improving our processes for detecting and remediating
+attacks and vulnerabilities. To that end, we:
+- Engage in approximately 130 internal and external audits across SAP globally
+Monitor and support our cloud and IT units with 1,700 controls that are audited and tested for
+design and operating effectiveness
+-
+Offer service organization control (SOC) reports – such as SOC 1 Type II/ISAE 3402 and SOC 2
+Type II/ISAE 3000 - to provide insights into the design and operating effectiveness of internal
+control systems implemented within cloud delivery units
+Let external, internationally accredited auditors assess and certify our cloud services according to
+various reporting standards and ISO certifications, such as ISO 9001, ISO 27001, ISO 27017,
+ISO 27018, and ISO 22301, in addition to BS 10012
+105/338
+106/338
+The SAP Global Data Protection and Privacy Policy outlines a group-wide minimum standard for data
+protection-compliant processing of personal data. It defines requirements for business processes that
+involve personal data, and assigns clear responsibilities. The principles established by this policy take
+into account the requirements of the EU GDPR. They apply generally and globally to SAP Group
+affiliates. Additional data protection and privacy requirements, if applicable, are adopted on a local
+level as necessary. We actively monitor changes to applicable laws and regulations so that we can
+update our standards on an ongoing basis as necessary to meet data protection compliance. The
+policy was last updated in 2019.
+SAP Integrated Report 2021
+SAP
+To help ensure necessary knowledge about data protection, global data protection and privacy
+training is mandatory for SAP employees. The latest training was rolled out in 2021 as per the two-
+year renewable cycle.
+Information
+Additional
+Further Information on
+Sustainability
+Data Protection
+Management Report
+Consolidated Financial
+Statements IFRS
+To Our
+We also track the quality of our data protection compliance level based on the annual recertification
+of our DPMS by the British Standards Institution (BSI). SAP has been audited by the BSI annually and
+awarded certifications according to BS 10012 since 2011. The most recent certification is valid until
+2022.
+We monitor compliance of data protection-relevant procedures across SAP. We maintain a record of
+processing activities ("procedure enrollment tool"), in which procedures that process personal data
+must be documented. The record entries contain general information about the procedure according
+to defined criteria necessary to meet proper documentation. The record entries are reportable and
+regularly reviewed.
+Stakeholders
+Combined Group
+2021
+2020
+1,055
+1,005
+Total Energy Consumption
+Gigawatt hours (GWh)
+1,115
+5%
+6%
+Due to the COVID-19 pandemic and SAP's pledge to flexible, trust-based working styles, electricity
+consumption in our offices continued to be low as the majority of employees remained in a remote
+working model. Our total energy consumption 23 remains lower than before the COVID-19 pandemic.
+However, in light of an increasing external data center electricity consumption (including hyperscale
+services), the total amount of energy consumption has slightly increased year over year.
+879
+2017
+2018
+2019
+941
+-55%
+7%
+-21%
+2020
+2021
+Our focus on climate action has contributed to a cumulative cost avoidance of €743.5 million in the
+past three years. We achieved 55% of this cost avoidance in 2021. Cost avoidance is a financial key
+figure that indicates the financial benefits of SAP's engagement in sustainability measures compared
+to a business-as-usual scenario where no sustainability measures have been implemented (base
+year: 2016).
+To become carbon neutral even in times of ongoing growth in our business, we continue to drive our
+three-pillar strategy of "avoid - reduce - compensate." In 2021, key initiatives following this approach
+included:
+23 Before 2021, our total energy consumption graph covered direct energy consumption (Scope 1) and selected indirect energy
+consumption (Scope 2). In 2021, we added indirect energy consumption of our value chain (Scope 3) to all years shown.
+SAP Integrated Report 2021
+-1%
+-19%
+-14%
+2018
+20 Scope 1 includes: Stationary Combustion and Refrigerants in Facilities, Mobile Combustion and Refrigerants in Corporate Cars, Mobile
+Combustion in Corporate Jets. Scope 2 includes: Electricity in Offices, Electricity in Data Centers, Purchases of Chilled and Hot Water,
+Steam.
+SAP
+21 Scope 3 includes: Rental Cars, Business Flights, Train Travel, Business Trips with Private Cars, Employee Commuting, Electricity
+External Data Centers, Electricity Used by Hyperscale Services, and Logistics.
+22 We report all our carbon emissions in CO2 equivalents (CO₂e).
+117/338
+118/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+325
+310
+Total Net Carbon Emissions
+Kilotons CO2e
+300
+-5%
+-3%
+135
+110
+2017
+2019
+To Our
+Stakeholders
+2018
+Management Report
+2017
+2019
+2020
+2021
+24 We also run all our SAP office facilities with 100% renewable electricity.
+25 We formerly used the term „,Renewable Energy Certificates" (RECs) to refer to Energy Attribute Certificates.
+119/338
+120/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Further Information on
+Sustainability
+Additional
+Information
+Sustainable Solutions and Products in Use
+The vast majority of our overall carbon emissions result from the use of our software. To address this,
+we have developed a downstream emissions strategy to help our customers, hardware providers, and
+others run greener operations. One of the most important ways we help our customers reduce their
+energy usage and emissions is by managing their SAP systems through cloud services provided by
+our carbon-neutral green cloud offerings. In addition, our SAP Cloud for Sustainable Enterprises
+offering bundles a broad portfolio of sustainability-related solutions, such as SAP Sustainability
+Control Tower, SAP Environment, Health, and Safety Management, and SAP Product
+Footprint Management, which enable our customers to collect, organize, and report financial and
+non-financial metrics or to manage their greenhouse gas footprint and resources, such as electricity,
+more efficiently.
+SAP also works with customers to optimize their on-premise landscapes so that they consume less
+energy. We achieve this by helping them decommission legacy systems, archive unused data,
+consolidate business applications, and virtualize their system landscape. In 2021, we started to
+develop a carbon footprint sizing approach with the aim of enabling our customers to gain
+transparency on the carbon impact of their SAP applications that run in SAP's internal and external
+data centers, answering the question of how much our customers can reduce their environmental
+footprint by running SAP solutions on SAP's green cloud compared to a cloud that is not powered by
+100% renewable electricity.
+Corporate Cars and Commuting
+Consumption of fuel for our company cars remains the single greatest contributor to our direct
+emissions (Scope 1). To counteract this emission source, SAP released a new commitment in
+Q4/2021. We aim to enhance our climate protection measures by transitioning our global car fleet to
+electric or zero-emission 26 vehicles. From 2025 onwards, employees will no longer be able to order
+vehicles with internal combustion engines (ICEV) or plug-in hybrid electric vehicles (PHEV) as
+company cars. To ensure a carbon-neutral car fleet reflecting this new commitment, we continue to
+power all charging stations at SAP locations with 100% renewable electricity. We also continue and
+strengthen our incentive offers for our employees, for example:
+In selected locations, we offer employees a subsidy to install a charging point at home which
+deploys the new SAP E-Mobility solution to ease billing of the consumed electricity for both car
+fleet managers and employees.
+In Germany, we offer employees a battery subsidy that partially offsets the higher costs of an
+electric vehicle, and introduced "Charge at Home," a program to reimburse the employee's
+electricity costs for charging at home.
+We continuously expand SAP's global charging infrastructure (2021: >970 charging stations;
+2020: >900 charging stations).
+To generate a shift in alternative commuting habits, we continue to offer a company bike program in
+Germany, where employees can lease bicycles with the option of purchasing them after three years.
+In 2021, we expanded the mobility budget pilot to the whole of Germany to foster inter-/multimodal
+mobility. A pilot group of employees receives a monthly fixed mobility budget at their free disposal to
+use any mode of transport to commute to work or in their leisure time (bike, e-scooter, rental car, train,
+bus, and so on).
+26 Zero emission vehicles refer to a vehicle that does not emit exhaust gas or other pollutants from the onboard source of power.
+As a result of the ongoing COVID-19 pandemic, as well as the introduction of a more flexible working
+model at SAP, carbon-intensive business activities, in particular business travel-related activities,
+increased moderately during the year, but remained at a low level overall. As a result, our carbon
+emissions have continued to decrease. Even though our employee headcount increased by 4.9%, our
+net carbon emissions dropped to 110 kilotons 22 (kt), representing a year-over-year decrease of 18.5%
+(2020: 135 kt). In July 2021, we had already reduced our carbon emissions outlook for 2021 from
+145 kt to a range of 90 kt to 110 kt to reflect the expected impact of the COVID-19 pandemic on SAP's
+business results.
+157
+Combined Group
+176
+180
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Facilities, Data Centers, and Renewable Electricity
+To lead by example and continually improve the environmental footprint of its own operations, SAP
+has thus far implemented an environmental management system (EMS) at more than 50 sites in
+around 30 countries worldwide. The EMS is certified by the renowned ISO 14001:2015 standard and
+successfully maintained its certification in 2021. Its scope will be gradually increased from currently
+77% to 100% of SAP's major company-owned sites by 2025. To further increase our energy efficiency,
+selected sites such as SAP's headquarters in Germany also operate an ISO 50001:2018-certified
+energy management system.
+As more business moves to the cloud, data centers play an increasing key role in SAP providing
+solutions to our customers. Running solutions on SAP data centers and completing thousands of
+cloud solution transactions per day requires central processing units (CPUs), memory, storage, and
+cooling, and therefore electricity - which ultimately results in carbon emissions. This is why our
+internal data centers have become a primary focus of our carbon reduction efforts.
+We have introduced initiatives to drive efficiency and innovation with respect to our buildings, data
+center operations, and infrastructure (such as the installment of new co-generation units and the
+replacement of old back-up batteries with more efficient lithium-ion batteries in the data centers in
+St. Leon-Rot, Germany). At our SAP headquarters in Germany and North America, we operate our
+own data centers with an efficient power usage effectiveness (PUE) of 1.38. The PUE is a ratio that
+describes the efficiency of a data center, with 1.0 being the ideal.
+In 2014, SAP strengthened the integration of our environmental strategy into our business strategy by
+creating a "green cloud" - running all data centers with 100% renewable electricity. 24 This is one
+major step towards achieving carbon neutrality and upholding our commitment towards the RE100
+initiative. The term “data center" refers to both SAP-owned and external data centers (co-location data
+centers and hyperscalers).
+We realize our green cloud by using two strategic levers: On the one hand, by investing in very high-
+quality, EKOenergy-certified energy attribute certificates (EACs) 25 to foster renewable energy
+generation; and on the other hand, by producing renewable electricity in selective SAP locations
+worldwide through solar panels (such as Palo Alto, CA, in the United States, and Bangalore, India).
+Operating all our facilities and data centers with 100% renewable electricity allows us to compensate
+our entire electricity consumption-related emissions (2021: 219.5 kt). This is why customers can
+reduce their carbon emissions (Scope 3) by using our green cloud solutions and services.
+Total Data Center Electricity
+Gigawatt hours (GWh)
+Internal
+■ External
+338
+429
+361
+318
+265
+272
+138
+161
+185
+86
+179
+177
+Performance and Measures to Progress
+Consolidated Financial
+Statements IFRS
+To achieve our carbon neutral target and to track its progress, we have derived annual targets for our
+internal operational steering. Since the beginning of 2020, these annual targets have been integrated
+in the Executive Board's short-term performance-based compensation.
+Accessibility: SAP is designing a work experience where all employees feel that they belong and can
+contribute to a culture of equality and inclusion. A major component of this effort is creating
+accessibility in the workplace that removes barriers for differently abled persons. New technologies,
+such as eye-tracking are in our focus and will be continuously evaluated and implemented.
+In addition, SAP supports numerous global Employee Network Groups that offer activities and
+events from which SAP can help attract and retain people from diverse backgrounds.
+inclusion efforts. The employee-driven Pride@SAP LGBTQ+ network also celebrated its 20th
+anniversary in 2021.
+Information
+Additional
+Further Information on
+Sustainability
+Pushing Operational Excellence and Showcasing Human Experience
+Management to Customers
+Consolidated Financial
+Statements IFRS
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+LGBTQ+ inclusion: SAP was among the first supporters of the United Nations Global LGBTI
+Standards of Conduct for Business and has been named again the Top #1 employer in Germany's
+Pride Index. SAP has also been recognized by organizations including the Human Rights Campaign in
+the United States, the Pride Business Forum in the Czech Republic, and the Swiss LGBTI Label for our
+Race and ethnicity: Back in 2016, SAP identified challenges with underrepresentation of Black,
+African American, Latinx, and Native American employees in the workforce. We created reporting to
+track our progress toward a better representation in accordance with required regulations in different
+countries and in line with our diversity and inclusion objectives. Among many efforts across the globe,
+this included the establishment of a new goal kicked off in 2020 to double the share of Black and
+African American employees in the workforce in the United States within the next three years. Built on
+the "Equality for All" initiative by the Human Rights Campaign, SAP supported the Spotlight Black
+Businesses program to showcase and promote small Black-owned businesses and introduce them
+to new audiences.
+Management Report
+Autism inclusion: The Autism at Work program supports a workforce that includes 217 colleagues
+on the autism spectrum in 16 countries. The Autism Inclusion Network is an employee-led network
+group focused on spreading autism acceptance. The SAP Autism Inclusion Pledge extends SAP's
+autism inclusion endeavors by sharing what we have learned with our customer and partner
+ecosystem.
+Delivering engaging experiences for SAP's customers starts with our own workforce. A continued
+emphasis on operational excellence and experience management is key to delivering our human
+experience management (HXM) solutions and services efficiently, with both empathy and compliance.
+SAP runs SAP SuccessFactors-branded solutions as our global software to manage people data.
+Additionally, the adoption of Qualtrics solutions integrated with SAP SuccessFactors solutions enables
+us to determine ways to improve the experience of our candidates and employees along the
+employee journey. Such data insights are the fuel to leverage intelligent technologies such as
+SAP Conversational Al services on our SAP Careers site along with Brilliant Hire by SAP as a
+skills and interest-based matching engine for candidates to receive job recommendations from SAP.
+Our internal HR chatbot provides instant responses to HR-related questions to all SAP employees
+around the world, 24x7. Machine learning capabilities are leveraged to analyze the skills needed for
+the future, based on external and internal data sources to provide a decision framework for hiring and
+learning programs.
+No material risks were identified through our framework which is detailed in the Risk Management
+Methodology and Reporting section.
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+Stakeholders
+To Our
+Related Risks for SAP
+SAP Integrated Report 2021
+114/338
+113/338
+For more information about employee compensation and a breakdown of the components of
+personnel expense, see the Notes to the Consolidated Financial Statements, Note (B.1) and
+Note (B.2).
+We define headcount in FTE as the number of people on permanent employment contracts, taking
+into account their staffing percentage. Numbers disclosed in the Employees and Social Investment
+section are based on FTE or headcount. Students, individuals employed by SAP but currently not
+working for reasons such as maternity leave, and temporary employees on limited contracts of less
+than six months, are excluded from our figures. The number of temporary employees is not material.
+Our average personnel expense for each employee grew to approximately €149,000 in 2021 (2020:
+approximately €132,000). This increase is primarily due to an increase of share-based payment
+expenses. The personnel expense for each employee is defined as the overall personnel expense
+divided by the average number of employees. In 2021, we had 128 restructuring-related terminations
+(0.1%) compared to 1,037 in 2020 (1%).
+As at December 31, 2021, we employed 107,415 full-time equivalent (FTE) employees worldwide
+(2020: 102,430). This represents an increase in the workforce of 4,985 FTEs (914 thereof from
+acquisitions) in comparison to 2020. The average number of employees in 2021 was 104,364
+(2020: 101,476).
+Headcount and Personnel Expense
+SAP
+Gender inclusion, advancement, and equality: Currently, SAP's representation of women in the
+overall workforce is 34.3% (2020: 33.6%), with the representation of women in management roles at
+28.3% (2020: 27.5%). We continue to advance workplace equity through promoting inclusive policies
+on flexible work arrangements, enhanced parental leave benefits, and a focus on fair pay. We are
+present in the Bloomberg Gender-Equality Index in 2019, 2020, and again in 2021, confirming our
+commitment to gender equity.
+At SAP, we are always striving for inclusion and reflecting the diversity of society. As a global
+organization with 161 nationalities in our workforce, our aspiration is that SAP's employees mirror the
+diversity in society that includes the gender parity and demographics of all of the regions where we
+have employees. With our Diversity and Inclusion Strategy, we set our long-term focus to ensure
+we cover critical areas such as providing inclusive career journeys, creating a culture of inclusive
+collaboration, and improving our diverse ecosystem through supplier diversity efforts, an inclusive
+language campaign, and accessibility efforts.
+Another initiative to foster innovation is the prestigious Hasso Plattner Founders' Award. It provides
+the highest internal employee recognition at SAP, based on the three categories: Go-To-Market,
+Operational Excellence, and Products and Technology. For 2021, the awards went to "Support
+Assistant: Delighting Customers by Solving Issues Faster" (Go-To-Market); “Cloud Health Score Based
+on Machine Learning" (Operational Excellence); and "SAP Information Collaboration Hub for Life
+Sciences" (Products and Technology). Winners were chosen from 192 nominations, with a total of
+1,260 employees participating from 42 countries.
+Changing the Way We Lead
+Furthermore, in 2021, we also launched an equity-based COVID-19 Recognition Plan for all non-
+executive employees to recognize their resilience and commitment to business continuity during this
+difficult period.
+For more information, see the Notes to the Consolidated Financial Statements, Note (B.3).
+To strengthen the link between employees' compensation and SAP's corporate success, we also
+increased our investment in Move SAP, our long-term share-based incentive plan that rewards
+employees who provide a significant impact to SAP's business success. Another model component of
+our equity offering is Own SAP, a global share purchase plan, where 78% of our employees overall
+participated with an investment of 5,655,937 shares.
+all employees. During a newly established “People Day," all employees at SAP were given time to
+reflect on SAP's strategy and connect their goals and development to our direction. During "SAP Talk"
+dialogues, goals are set and viewed by the employees together with their managers.
+Additional
+Strong, future-oriented leadership is key for successfully executing our strategy and becoming more
+agile, ethical, inclusive, and accountable. To guide our leaders, support their development, and move
+our organization forward in our journey to the cloud, we began the rollout in 2021 of a refreshed
+leadership culture and credo: “Do what's right. Make SAP better for generations to come." This
+empowers our leaders to make decisions and holds them accountable while focusing on the future of
+SAP. Our leadership culture is reinforced by traditional, peer, and experiential learning journeys. These
+journeys focus on building management, leadership, and cloud skills to promote a shared
+understanding and reinforce leadership behavior and accountability.
+Further Information on
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+Since 2017, we have complied with the requirements of the Science Based Targets initiative (SBTI)
+and are committed to reducing emissions by 85% by 2050 compared to the base-year level 2016,
+including our entire Scope 3 value chain emissions such as our products-in-use emissions at our
+customers. Confirmed by the SBTI in a 2019 reassessment, this target reflects the level of
+decarbonization required to keep the global temperature increase below 1.5 degrees Celsius
+compared to preindustrial temperatures. However, to meet a net-zero future, in 2022 we aim to further
+accelerate our climate ambitions by committing to achieve net zero across our entire value chain
+by 2030 in alignment with the SBTi Net-Zero Standard - 20 years earlier than originally planned.
+Consolidated Financial
+Statements IFRS
+In 2021, we focused on a more consistent enablement of our people managers. We scaled the
+delivery of our flagship leadership programs, and focused on training on psychological safety across
+our organization. We report that 29.4% of SAP's people managers have completed these leadership
+development training sessions.
+In addition to our new leadership culture, one further strategic pillar is to pursue an agile,
+entrepreneurial, healthy, and innovative organization. With the COVID-19 pandemic already into a
+second year, our environment is changing at an increasing pace and the needs of our customers are
+shifting quickly. To deliver our business ambitions in this environment, SAP will continue to evolve our
+organization toward greater agility and innovation. It is our ambition to foster a culture that enables
+people to run at their best, by providing innovative health and well-being programs and solutions.
+Future of Work: In June, the Executive Board announced “Pledge to Flex," an SAP-wide
+commitment that empowers our employees to choose when and where to work best as their roles
+and tasks allow. Flexibility at work is considered a critical factor to attract and retain talent in the tech
+industry; Pledge to Flex also strengthens SAP's employer brand. The local implementation of flex work
+along aligned guidelines and country-specific legal regulations is essential to providing an engaging
+and collaborative working environment. These activities are complemented by efforts to leverage
+advanced technologies and new facility concepts in frontrunner locations such as Dublin/Galway,
+London, Montréal, and Zurich.
+Health and Well-Being: When people are healthy, respected, and cared for, it results in greater
+productivity, engagement, innovation, and customer satisfaction. The global pandemic has enforced
+changes to societal living that are resulting in increasing trends of mental health challenges and
+sedentary lifestyles. Listening to employees' feedback in the #Unfiltered survey, we have enhanced
+health offerings that support a healthy workplace and work culture.
+Innovation: In support of our entrepreneurial journey, SAP.IO accelerates, incubates, and scales
+startup innovation and explores new business models for SAP. In 2021, the SAP.IO intrapreneurship
+program continued to help identify high-potential entrepreneurial employees at SAP and was able to
+jump-start 275 venture ideas, seeking investment by the SAP.IO Venture Studio.
+In addition, SAP participates in the Healthy Workplaces Lighten the Load campaign by the
+European Agency for Safety and Health at Work, which enables leaders and employees to discover
+new ways to lighten the load of life's stressors by fostering healthy working and lifestyle habits for
+good physical and mental health.
+Seeing the need for employees to unplug, April 27, 2021, was dedicated as Mental Health Day, a
+company-sponsored global vacation day for all employees. SAP provided the opportunity for all
+employees to take the time off for themselves and their families.
+Vaccination Programs in many SAP locations, where we offered vaccinations free of charge to SAP
+employees, their dependents, and, in some instances, to the general public.
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+112/338
+111/338
+In 2021, SAP's Global Pandemic Taskforce continued to coordinate and adjust countermeasures
+against the pandemic around the globe, utilizing employee feedback based on regular remote pulse
+checks on how employees experience their individual situation. Another focus was on COVID-19
+Information
+Social Investments
+Information
+The pace of innovation and technology progress impacts people, organizations, and communities
+globally. As a result, the competencies and skills needed for people and businesses to succeed in
+today's digital world are rapidly changing. Our corporate social responsibility (CSR) strategy puts
+SAP's purpose to help the world run better and improve people's lives into action. As such, SAP CSR
+considers issues including the access, adoption, and application of 21st century skills for under-
+resourced people, communities, and nations, and the acceleration of social enterprises through
+innovation, adoption of organizational best practices, and market development. SAP CSR has three
+focus areas that create equitable access to economic opportunity, quality education, and
+employment:
+Due Diligence
+Our strategy to create positive impact and to address climate action is implemented through a dual
+approach: (1) SAP as enabler: We aim to provide products and services to our customers to reduce
+their carbon emissions and pave the way towards a low-carbon future together; and (2) SAP as
+exemplar: To live up to our corporate responsibility and to build climate resilience, we strive towards
+leading by example in SAP's business operations and practices by running our own operations more
+sustainably.
+To bring SAP's purpose of "helping the world run better and improving people's lives" to life, our
+sustainability activities and programs are aimed at creating positive economic, environmental, and
+social impact within planetary boundaries. In light of the aggravating climate change impacts and
+other intensifying global challenges, such as biodiversity loss and population growth, climate action
+has been put at the top of SAP's corporate sustainability agenda – which was also reconfirmed by the
+latest conducted materiality analysis.
+Vision and Strategy
+Energy and Emissions
+Additional
+Information
+Governance
+Further Information on
+Sustainability
+Management Report
+Stakeholders
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+Consolidated Financial
+Statements IFRS
+116/338
+The Executive Board sponsor for sustainability, including climate action, is the SAP CFO. The
+responsibility for driving SAP's holistic, cross-company sustainability agenda is shared between the
+core sustainability team and the Sustainability Council, which are both chaired and led by the chief
+sustainability officer (CSO). The CSO's team coordinates SAP's response to climate change (including
+assessing and managing climate-related risks through a quarterly risk review, setting reduction targets,
+measuring and monitoring carbon emissions on a quarterly basis, and embedding sustainability-
+related initiatives across SAP), while it is the Council members' responsibility to integrate sustainability
+into the core business of their particular Board area, measure and report on their Board areas'
+progress, act as an ethical advisory board for the Company, and communicate with internal and
+external audiences on the business relevance of the topic. This happens in close cooperation with
+various other departments such as the global procurement organization, which aims to ensure that
+the Company purchases energy-efficient, sustainable products and services. The global facilities
+management team designs and operates our facilities based on robust environmental standards such
+as ISO 14001. Our global cloud services organization considers the optimization of the energy
+consumption in our data centers, while SAP's IT operations personnel is encouraged to use IT
+equipment and business software responsibly.
+Guidelines and Policies
+Vision and Strategy
+This target refers to our total net carbon emissions, which are calculated by deducting purchased
+renewable energy certificates, self-generated renewable energy, and carbon offsets from our gross
+carbon emissions in the respective reporting period. Our carbon neutral target includes all direct and
+indirect emissions from running our business (Scope 1 and Scope 2) 20 as well as a selected subset of
+indirect emissions from our value chain (Scope 3). 21 This objective is key to reducing SAP's own
+environmental footprint and to combatting climate change – one important step towards contributing
+to SAP's overarching purpose.
+In 2017, we set our leading environmental target of making our operations carbon neutral by 2025.
+However, to consider the impact of the COVID-19 pandemic on our carbon emissions, to strive toward
+a role model position in sustainability, and to maintain our ambition level, we decided to revise and
+accelerate our carbon neutral target: We now aim to become carbon neutral in our own
+operations by 2023 – two years earlier than what we had aimed for thus far.
+Our Targets
+How We Measure and Manage Our Performance
+Information
+To be able to innovate and embed sustainability further, we regularly engage externally with various
+stakeholder groups such as non-governmental organizations (NGOs), non-profit organizations (NPOs),
+and academia. This notably includes an external sustainability advisory panel comprised of expert
+representatives from our customers, investors, partners, NGOs, and academia, which provide us with
+valuable outside-in feedback and advice.
+Further Information on
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+Our global environmental policy provides the core framework for how we manage our environmental
+impact in our own operations and with our customers. Updated regularly and approved by the CFO,
+this policy guides our efforts to reduce our ecological footprint, provide environmental performance
+transparency, and demonstrate sustainable leadership through transformational strategies. In addition,
+it helps us to comply with internationally recognized sustainability standards as well as stakeholder
+expectations, primarily those of customers, investors, and employees.
+Consolidated Financial
+Statements IFRS
+115/338
+Additional
+QAudit Scope
+SAP set out to bring our pro bono consulting to the next level, scaling virtual models that were tested
+in 2020. For example, SAP and PYXERA Global launched a new program called Pro Bono for
+Economic Equity to support social and racial justice. Through the program, SAP provides expertise
+via pro bono consulting to help Black-owned businesses and social enterprises address systemic and
+business challenges. Further, SAP and MovingWorlds launched the Acceleration Collective, a
+support network to help social enterprises grow their organizations and impact, while helping SAP
+SAP provides skills, expertise, products, and financial support to social businesses that, in turn,
+accelerate their ability to drive sustainable social impact. In 2021, SAP built capacity for over 2,000
+innovative non-profit organizations and social enterprises through in-kind contributions of
+US$1.8 million (€1.58 million) 19.
+Accelerate Social Business
+-
+Focus Area
+We measure the performance and impact of our CSR engagements and investments regularly and
+report the following output indicators for all initiatives and regions: number of employees engaged,
+volunteering projects delivered, lives impacted, engagements with customers and partners, non-profit
+organizations and social enterprises enabled, and employees on our SAP Together employee
+engagement and donation platform. In addition, every signature initiative follows a dedicated impact
+measurement framework and logic model. In 2021, SAP donated €25.5 million.
+19 Exchange rate date: December 31, 2021.
+How We Measure and Manage Our Performance
+Our Global Head of CSR leads the global SAP CSR team, which is part of the Marketing & Solutions
+Board area. SAP has established a Global CSR Governance Committee consisting of executive-
+level representatives from different Board areas at SAP to advise, supervise, and approve the direction
+of our overall CSR strategy. In addition, Regional CSR Governance Committees advise and approve
+all major CSR partnerships and efforts with the respective regional SAP CSR lead.
+Accelerate social business
+SAP's CSR strategy is linked to our core business, meaning that we integrate social innovations into
+our own value chain through, for example, dedicated social procurement initiatives. In addition, we are
+offering a broad portfolio of corporate volunteering opportunities and pro bono consulting programs to
+deploy the professional skills of our employees for a good cause..
+Connect employees with purpose
+The majority of the information in the Employees and Social Investments section was not part of the
+statuatory audit of our combined group management report by our external auditor. Only the
+quantitative indicators Business Health Culture Index, Employee Engagement Index, Employee
+Retention, Women in Management, as well as Headcount and Personnel Expense are audited at a
+reasonable assurance level. For the remaining content of the Employees and Social Investments
+section, our auditor performed a limited assurance engagement.
+Build future skills
+The guidelines in our internal CSR policy aim to ensure lawful, compliant donations and good
+stewardship of SAP's social investment budget to create a positive, sustainable impact. They articulate
+our strategic focus areas, set the standards and policies under which we operate, and explain the
+different roles and responsibilities between global CSR, regional CSR, and line of business activities.
+SAP
+Governance, Guidelines, and Policies
+To Our
+Stakeholders
+SAP Integrated Report 2021
+In 2021, globally, SAP employees dedicated more than 100,000 volunteer hours, of which 76% were
+skills-based. SAP Together has 37,741 employees registered and offers 548 virtual volunteering
+projects. SAP CSR's employee engagement campaign, Month of Service, evolved to become
+Moments of Service. The campaign has a renewed focus on learning by offering employees virtual
+and on-site volunteering opportunities and speaker sessions with inspiring leaders inside and outside
+SAP. With a focus on year-round volunteering, employees can take action and deepen their
+understanding of social and environmental issues, what SAP is doing about them, and their capacity
+to impact as an individual.
+Focus Area
+In 2021, digital skill-building and coding programs trained 119,000 teachers and engaged 3.5 million
+underserved youth, of which 50% were girls. As part of the multi-stakeholder initiative Generation
+Unlimited (GenU), SAP and UNICEF have addressed several strategic areas within education since
+2019. The partnership continued to equip and empower young people with the 21st century digital
+and life skills they need to find suitable work. In 2021, SAP became a Founding Member of GenU,
+with SAP CEO Christian Klein joining the GenU Board. In India, under the umbrella of Code Unnati,
+SAP announced a partnership with Microsoft called TechSaksham. The program aims to provide
+62,000 young graduating women and 1,500 teachers with Industry 4.0 skills for careers in emerging
+technology by the end of 2022.
+No material risks were identified through our framework which is detailed in the Risk Management
+Methodology and Reporting section.
+Focus Area - Build Future Skills
+The pandemic accelerated the importance of collaboration and partnerships on a macro level in
+creating opportunities to build sustainable, resilient value chains. In support of SAP's 5 & 5 by '25
+social procurement initiative, SAP continued efforts to build capacity for social enterprises seeking to
+enter corporate supply chains through MovingWorlds' S-GRID program and engagement with the
+COVID-19 Response Alliance for Social Entrepreneurs.
+Connect Employees with Purpose
+Related Risks for SAP
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+employees develop their leadership and social innovation skills by solving organizational challenges
+and offering business coaching.
+Combined Group
+Communication
+The COBC is communicated to employees globally and contains a fundamental set of rules that
+define how we conduct our business. It sets SAP's standard for our dealings with each other and with
+customers, partners, competitors, and vendors. All of our employees are bound by it. In 2021, the
+policy was reviewed and revised. It is now called the Code of Ethics and Business Conduct and was
+rolled out globally in January 2022.
+Enforcing Policies and Guidelines
+How We Measure and Manage Our Performance
+We also expect our partners and suppliers to commit to meeting our high standards of integrity and
+sustainability. For this reason, we have the SAP Partner Code of Conduct and the SAP Supplier Code
+of Conduct in place so that partners and suppliers understand what is expected of them.
+Consolidated Financial
+Statements IFRS
+Guidelines and Policies
+Information
+Additional
+Further Information on
+Sustainability
+The OEC's dedicated communications team promotes a consistent distribution of integrity-related
+communications, at all levels of the Company - including senior leaders, managers, and front-line
+employees. Executive Board members and senior leaders regularly host all-hands meetings as well as
+leadership team meetings and smaller gatherings, which include integrity-focused topics,
+demonstrating their dedication to ethical business.
+Our Code of Business Conduct (COBC) provides the primary ethical and legal framework within
+which we conduct business and remain on course for success. It is adapted locally and translated into
+over 20 languages.
+DAX Chief Compliance Officer Round Table. SAP is also a Corporate Member of the Association of
+Certified Fraud Examiners (ACFE).
+-
+Quarterly OEC newsletters provide all employees with information on a range of compliance-related
+topics. We also include at least one business ethics and compliance-related question in our annual
+employee engagement survey and in company-wide polls throughout the year. Employees can use
+the SAP One employee portal at any time to access all global policies, guidelines, and additional
+information. The SAP Compliance mobile app also provides convenient, ongoing access to
+compliance-related information.
+Training Offerings
+Our training programs cover topics such as anticorruption and antibribery, competition law,
+governance for customer commitments, intellectual property, and information security.
+Our "Five Pillars of Compliance” online training is mandatory for all employees wherever legally
+permissible.
+Monitoring employee certification of the CoBC for employees worldwide continued. During the 2021
+monitoring cycle, a 99.9% certification rate was recorded for permanent SAP employees (excluding
+newly acquired companies).
+Despite restrictions caused by the COVID-19 pandemic, field compliance officers continued to hold
+training sessions – albeit virtually – for employees across the organization, from customer-facing staff
+to individuals in supporting roles, such as corporate affairs and marketing.
+127/338
+128/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+All Board areas have re-committed their support for OEC's Compliance Ambassador Program and
+have nominated employees to participate in it. In 2021, a fourth cohort was introduced, bringing the
+number of participants from 177 in 2020 to over 500 in 2021. The program is designed to give
+employees a further point of contact in the business when compliance matters arise. Ambassadors
+participate in an extensive curriculum of monthly on-boarding sessions over a two-year period and are
+expected to cascade and transfer information on the importance of compliance and ethics throughout
+their teams and lines of business.
+Management Report
+126/338
+To Our
+Stakeholders
+To finance the acquisition of Signavio GmbH and create additional financial flexibility during the
+COVID-19 pandemic, SAP took out two bilateral bank loans amounting to €0.95 billion and €0.5 billion
+at the beginning of 2021, both of which were fully outstanding as at December 31, 2021. Both loan
+agreements contain a change-of-control clause which obliges SAP SE to notify the bank in case of a
+change of control. On receiving the notification, the bank has the right to cancel the loan agreement
+and demand complete repayment of the outstanding debt. If no continuation agreement is reached,
+the loan agreement would end and the obligation to repay would become effective at an
+ascertainable time.
+Consolidated Financial
+Statements IFRS
+We have entered into relationships with other companies to jointly develop and market new software
+products. These relationships are governed by development and marketing agreements with the
+respective companies. Some of the agreements include provisions that, in the event of a change of
+control over one of the parties, give the other party a right to consent to the assignment of the
+agreement or to terminate it.
+Change-of-control provisions in Executive Board compensation agreements: Agreements have
+been concluded with the members of the Executive Board of SAP SE concerning compensation in the
+event of a change of control. These agreements, which are customary internationally, are described in
+the Compensation Report. We have no analogous compensation agreements with our other
+employees.
+125/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Combined Group
+Additional
+Information
+Vision and Strategy
+In an increasingly complex business environment, making the right decisions and abiding by ethical
+choices has never been more important. As a company operating in numerous countries across the
+globe, SAP is required to adhere to strict international legislation that defines acceptable business
+conduct and practices.
+At SAP, we also expect our business practices to not only meet international rules and legal
+requirements, but to adhere to our internal high standards of ethics and integrity. We understand that
+our customers expect this as well. SAP's reputation for doing business the right way is one of our most
+important assets. By striving to make ethical choices and to stay within high bounds of compliance,
+we aim to continue to grow SAP in a way that encourages and is conducive to compliant and ethical
+behavior.
+Due Diligence
+Governance
+The Office of Ethics and Compliance (OEC) contributes to SAP's success by providing trusted
+advice to SAP managers, leaders, and employees across the entire business. The OEC strives to
+advance SAP's business goals by promoting a strong culture of integrity and helping SAP to "Win the
+Right Way" by providing guidance and training that enables employees to make ethical and compliant
+choices.
+In 2021, our aim to maintain a robust compliance program, based on our corporate values and
+voluntary commitments, as well as international standards, continued. The OEC team grew for the
+fourth consecutive year, from 123 employees in 2020 to 142 employees in 2021. The group chief
+compliance officer (GCCO) continues to report directly to the group CEO.
+At SAP, ethical behavior is an integral part of our cultural values that influence our daily decision-
+making at every level of the business. To help nurture this environment, the OEC's various teams
+continually address compliance challenges and improve policies, guidelines, systems, and measures
+related to their implementation.
+The OEC has field compliance officers based all around the world, in high-risk and low-risk
+jurisdictions, and in markets where there are local language needs. Field compliance officers are often
+the first point of contact for the business regarding compliance matters. In those high-risk countries in
+which the OEC is not physically represented, the OEC operates a network of compliance stewards
+drawn largely from either our legal, finance, or human resources (HR) departments. They are
+equipped to offer advice on specific and straightforward compliance questions, and they work
+alongside our global network of compliance ambassadors (drawn from all areas of the Company) to
+amplify compliance messages and provide a further link for local employees to the relevant field
+compliance officer.
+Compliance matters are discussed with senior leadership at quarterly Audit and Compliance
+Committee meetings as well as during regular touchpoints with Executive Board and Supervisory
+Board members. Compliance matters are also discussed by the GCCO in quarterly Global
+Compliance Governance Committee meetings.
+Where appropriate, and in response to identified compliance concerns, the OEC engages external
+counsel and forensic consulting resources to perform corruption risk assessments of high-risk market
+units. This process also includes a comprehensive root cause analysis for identified risks.
+Outside SAP, the OEC regularly exchanges ideas and best practices for compliance processes with
+relevant peers in the software industry and beyond. In Germany, the OEC participates in the annual
+SAP Integrated Report 2021
+Business Conduct
+Further Information on
+Sustainability
+Assessing Human Rights Measures
+Compliance Processes
+At the end of 2021, we started a labor audit at SAP China, whereby we reviewed labor conditions,
+wages and hours, health and safety, environmental management system, and business practices. The
+audit has been subject to finalization in the first quarter of 2022. We plan to adapt our global internal
+audit program based on recent legal requirements.
+129/338
+130/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Employees
+Our employees receive training on human rights issues most relevant to SAP. For example, they are
+trained on our policies on discrimination, health and safety management, and data protection and
+privacy.
+To assess our human rights measures, we consider legal requirements, performance ratings, audit
+results, and stakeholder feedback. For example, since 2012, we have conducted regular internal
+audits to help us verify that subsidiaries adhere to human rights standards, and check whether
+employees feel empowered to raise concerns.
+We encourage all employees, including groups at heightened risk of becoming disadvantaged or
+marginalized (also called “vulnerable groups") such as temporary external staff, to report conduct that
+violates our policies. Employees can reach out to their managers, HR officers, compliance officers, or
+colleagues who are trained to be part of our internal mediation pool. Our global ombudsperson also
+receives employee complaints and mediates fair settlements as well as helps our Executive Board
+analyze HR-related complaints and issues. Our complaints mechanisms (for example, our Speak Out
+at SAP tool) are also accessible to external groups.
+We expect suppliers and partners to respect human rights, and our codes of conduct require them to
+uphold labor rights and provide a safe and healthy work environment for all employees.
+For more information, see the Sustainable Procurement section.
+Product Development
+We seek to respect human rights throughout the product lifecycle – from design through development
+to use. Protection of personal information and accessibility are key areas of focus.
+For more information, see the Security, Data Protection, and Privacy section.
+Our innovative solutions help customers embed human rights standards into their own business. For
+example, they can use the SAP Ariba Supplier Risk solution to gain the intelligence and
+transparency to understand human rights risks within their supply chains.
+Al Ethics
+To steer the ethical development, deployment, and sale of our Al solutions, we created SAP's Guiding
+Principles for Artificial Intelligence that we continue to evaluate and update in conjunction with an
+external advisory panel. Our guiding principles are an evolving reflection on the challenges of Al in an
+everchanging technological landscape. In January 2022, we rolled out a Global Al Ethics Policy to
+help ensure that our Al systems are developed, deployed, and sold in line with the ethical standards
+laid out in our guiding principles.
+Related Risks
+No material risks were identified through our framework which is detailed in the Risk Management
+Methodology and Reporting section.
+QAudit Scope
+The content of the section Human Rights and Labor Standards was not subject to the statutory audit
+of the combined group management report. However, our external auditor performed an independent
+limited assurance engagement for the content of this section.
+Under the terms of our U.S. private placements totaling approximately US$0.87 billion as at
+December 31, 2021, we are required to offer lenders repayment of outstanding debt if there is a
+change of control and SAP is consequently assigned a lower credit rating within a defined period. For
+more information about these private placements, see the Notes to the Consolidated Financial
+Statements, Note (E.3). Lenders would have up to 30 days to accept the offer.
+Suppliers and Partners
+How We Measure and Manage Our Performance
+We support the Universal Declaration of Human Rights; the Organization for Economic Co-operation
+and Development (OECD) Guidelines for Multinational Enterprises; and the International Labor
+Organization Declaration on Fundamental Principles and Rights at Work. The SAP Global Human
+Rights Commitment Statement is our public commitment to respecting and promoting human rights
+across our value chain. Overseen by our chief sustainability officer and approved by our Executive
+Board, the current version of the Human Rights Commitment Statement is available at
+www.sap.com/corporate-sustainability.
+Guidelines
+The OEC also evaluates SAP's third-party service providers to check that SAP's compliance standards
+are met. New suppliers and third parties seeking a partnership with SAP are scrutinized according to a
+risk-based compliance due diligence process, which is repeated every two years thereafter. Supplier
+and partner relationships are formally defined in contracts that outline their obligation to abide by
+SAP's compliance requirements and a "right to audit" clause. The OEC also has a team dedicated to
+conducting compliance audits of partners and suppliers to assess adherence to SAP's requirements
+and to identify and address compliance risks.
+The OEC's Compliance Monitoring & Analysis (CMA) team monitors the effectiveness of SAP's
+compliance processes and controls through regular testing of high-risk transactions, identified using a
+recently introduced data analytics tool developed with PricewaterhouseCoopers GmbH (PwC) and
+through manual sampling. The CMA team also analyzes findings from investigations and partner audit
+reports to identify potential enterprise-wide process deficiencies and patterns of misconduct that
+indicate a compliance risk. The team then conducts root cause analyses on the highest-risk topics
+and recommends remediation actions to mitigate the risks.
+Whistleblower Reporting Tool
+In 2021, SAP replaced its existing whistleblower reporting tool with one that is independently
+managed, so that any matters or concerns can continue to be reported easily and anonymously. The
+new tool - Speak Out at SAP – is available both internally to SAP employees and externally to
+concerned parties.
+Reports may be submitted either directly by the reporter through the tool, or through the multilingual
+call center by an agent acting on the reporter's behalf. In all cases, SAP continues to operate a strict
+non-retaliation policy.
+Investigating Misconduct
+Where appropriate, the OEC engages the assistance of an external law firm when investigating
+conduct that may violate antibribery and anticorruption laws.
+For more information about the material allegations currently being investigated by the OEC, see the
+Notes to the Consolidated Financial Statements, Note (G.3).
+Related Risks for SAP
+The actions and processes to address risks in business conduct are described above. For related
+risks, see also Ethical Behavior in the Risk Management and Risks section.
+QAudit Scope
+The content of the Business Conduct section was not subject to the statutory audit of the combined
+group management report. However, our external auditor performed an independent limited
+assurance engagement for the content of this section.
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Human Rights and Labor
+Standards
+Vision and Strategy
+SAP is committed to respecting and promoting human rights across our operations, extended supply
+chain, and product lifecycle, and we are guided by the United Nations (UN) Guiding Principles on
+Business and Human Rights in doing so. We also expect all of our business partners to respect
+human rights and avoid complicity in any abuse.
+Due Diligence
+Governance
+Our cross-company agenda on human rights is driven by SAP's Sustainability team. In 2021, we
+established a new project organization to respond to increasing legal requirements such as the
+German Supply Chain Due Diligence Act. The project organization comprises executives and
+employees from various Executive Board areas who embed human rights due diligence in their areas
+of responsibility. We regularly consult experts from academia, civil society, and industry in our external
+Sustainability Panel on how SAP can generate the greatest positive social impact.
+The Artificial Intelligence (AI) Ethics Steering Committee guides our internal efforts to implement
+and enforce Al ethics in our operations and policies. It comprises SAP executives from all Executive
+Board areas with supervision of topics relevant to guiding and implementing Al ethics. Also made up
+of experts from academia, industry, and public policy, our external Al Ethics Advisory Panel advises
+us on how to further develop and operationalize our guiding principles for Al.
+Additional
+Information
+SAP had bonds totaling €9.6 billion and US$0.3 billion outstanding as at December 31, 2021. For
+more information about SAP's bonds, see the Notes to the Consolidated Financial Statements,
+Note (E.3). Under the terms agreed with the buyers, we are required to notify the buyers, without
+delay, of any change of control. If there is a change of control and SAP is consequently assigned a
+lower credit rating within a defined period, buyers are entitled to demand repayment.
+SAP
+Information
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Related Risks for SAP
+We have analyzed climate change risks and their potential impact on our largest office buildings,
+major data centers, and SAP's workforce. Risk drivers were chosen based on the Intergovernmental
+Panel on Climate Change (IPCC) reports AR5 and SR15 (that is, rising sea levels, temperature
+extremes, and tropical storms). The risk assessment was performed in accordance with the SAP
+Global Risk Management Policy as outlined in the Risk Management and Risks section. As part of our
+last analysis in 2019, no material risks have been identified potentially impacting our business
+operations, revenue, or expenditure.
+QAudit Scope
+The content of the Energy and Emissions section was not subject to the statutory audit of our
+combined group management report. However, our auditor has performed an independent assurance
+engagement on the contents of this section. Under this engagement, the quantitative indicators
+Carbon Emissions (Scope 1 and 2 as well as selected Scope 3 emissions including business flights
+and employee commuting), Renewable Electricity, and Total Energy Consumed were audited at a
+reasonable assurance level. For the remaining content of this section, our auditor performed a limited
+assurance engagement.
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+122/338
+The terms of SAP's syndicated €2.5 billion revolving credit facility include a change-of-control clause.
+For more information about this syndicated credit facility, see the Notes to the Consolidated Financial
+Statements, Note (F.1). This clause obliges SAP SE to notify the banks in case of a change of control.
+If, on receiving the notification, banks that represent at least two-thirds of the credit volume so require,
+the banks have the right to cancel the credit facility and demand complete repayment of the
+outstanding debt. If no continuation agreement is reached, the credit facility would end and the
+obligation to repay would become effective at an ascertainable time.
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Management Report
+Further Information on
+Sustainability
+To offset a share of our Scope 1 and Scope 3 emissions that cannot yet be avoided, we invest in
+different offset schemes with a strategic focus on nature-based solutions to compensate for these
+emissions (2021: 17.5 kt):
+A key part of SAP's carbon offsetting strategy is the long-term investment in the Livelihoods Carbon
+Funds (LCF). The funds finance much-needed climate action and sustainable development in
+developing countries through ecosystem restoration, agroforestry, biodiversity preservation, and
+clean energy projects. This has generated high-quality carbon offsets certified by internationally
+recognized and demanding standards (such as the Gold Standard) and improved people's lives. In
+2020, SAP committed to invest €3 million in the third LCF and an additional €0.6 million in the first
+LCF. Due to the strong impact of the COVID-19 pandemic on our carbon emissions, we did not
+require our financial contribution to the LCF to offset our emissions in 2021. Instead, we used an
+investment in a nature-based forest project to compensate our emissions, the majority of which
+was were caused by business flights.
+In 2021, SAP made a US$2 million (€1.76 million) 27 commitment to the LEAF (Lowering Emissions
+by Accelerating Forest finance) Coalition, a public-private initiative seeking to mobilize US$1 billion
+to protect tropical forests in joint effort with national and subnational governments and local
+communities. LEAF issues emission reduction credits (ERCs) to its corporate partners that are
+verified and validated under the ART's (Architecture for REDD+ Transactions) TREES standard (The
+REDD+ Environmental Excellence Standard) to ensure high-quality offsets. Due to the ongoing
+funding process, LEAF does not yet offer carbon offsets.
+In addition to avoiding business flights by investing in virtual collaboration and communication
+technologies, we charge an internal carbon price for business flights in the majority of countries we
+travel from, to counterbalance the carbon emissions caused. Since 2016, we invest the collected
+internal air travel fees in high-quality carbon offsets (such as the Gold Standard) to support climate
+projects worldwide and compensate the adverse impact of necessary business flights. As a result,
+this measure has tangibly impacted our progress towards achieving our emission goals.
+Investments in sustainable projects and the corresponding carbon offsets represent a unit of reduced,
+avoided, or removed greenhouse gas emissions.
+Furthermore, SAP joined the 1t.org Corporate Alliance in 2021, which mobilizes business leaders to
+responsibly conserve, restore, and grow trees worldwide while pursuing 1.5 degrees Celsius science-
+based target. Restored and protected in the right places, trees and forests are invaluable in
+maintaining planetary stability, slowing climate change, safeguarding biodiversity, and providing critical
+ecosystem services to people around the world. Thus, SAP added the goal of planting 21 million
+trees by the end of 2025 to its comprehensive portfolio of climate measures and carbon-reducing
+innovations. This will help foster the much-needed transition to a nature-positive and net-zero future.
+Since 2012, SAP has helped to plant more than 12.2 million trees and is on track to reach its 2025
+goal.
+27 Exchange rate date: December 31, 2021.
+121/338
+Carbon Offsets
+Consolidated Financial
+Statements IFRS
+Additional
+Information
+Additional
+Information
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Requirements concerning appointments and dismissals of members of the Executive Board
+and amendments to the Articles of Incorporation: Conditions for the appointment and dismissal
+of members of the Executive Board and amendments to the Articles of Incorporation reflect the
+relevant provisions of applicable European and German law, including Council Regulation (EC)
+No. 2157/2001 on the Statute for a European Company ("SE Regulation") and the German Stock
+Corporation Act. Under the Articles of Incorporation, the Executive Board consists of at least two
+members, who are appointed for a period of not more than five years by the Supervisory Board in
+accordance with the SE Regulation, articles 39 and 46. The number of members of the Executive
+Board is decided by the Supervisory Board. Executive Board members may be reappointed for, or
+their term of office extended by, a maximum of five years. A simple majority of the Supervisory Board
+members is required for Executive Board appointments. In the event of a tie, the chairperson of the
+Supervisory Board has the deciding vote. The Supervisory Board can appoint a chairperson of the
+Executive Board and one or more deputy chairpersons from among the members of the Executive
+Board. The Supervisory Board can revoke appointments to the Executive Board in accordance with
+the SE Regulation, article 9, and the German Stock Corporation Act, section 84, if compelling reasons
+exist, such as gross negligence on the part of the Executive Board member. If the Executive Board is
+short of a required member, one may be appointed in urgent cases by a court in accordance with the
+SE Regulation, article 9, and the German Stock Corporation Act, section 85. In accordance with the
+SE Regulation, article 59, and the German Stock Corporation Act, section 179, an amendment of the
+Articles of Incorporation requires a resolution of the General Meeting of Shareholders with a majority
+of at least three-quarters of the valid votes cast. For any amendments of the Articles of Incorporation
+that require a simple majority for stock corporations established under German law, however, the
+simple majority of the valid votes cast is sufficient if at least half of the subscribed capital is
+represented or, in the absence of such quorum, the majority prescribed by law (that is, two-thirds of
+the votes cast, pursuant to article 59 of the SE Regulation) is sufficient. Section 11 (2) of the Articles of
+Incorporation authorizes the Supervisory Board to amend the Articles of Incorporation where such
+amendments only concern the wording.
+Power to issue and repurchase shares: The Annual General Meeting of Shareholders on
+May 12, 2021, granted powers to the Executive Board, subject to the consent of the Supervisory
+Board, to issue convertible and/or warrant-linked bonds, profit-sharing rights and/or income bonds (or
+combinations of these instruments), and to grant conversion or option rights in respect of SAP SE
+shares representing a total attributable portion of the share capital of not more than €100 million
+secured by a corresponding amount of contingent capital. These powers will expire on May 11, 2026.
+The Executive Board is also authorized until May 19, 2025, to increase the share capital by not more
+than €250 million by issuing new shares against contributions in cash and to increase the share
+capital by not more than €250 million by issuing new shares against contributions in cash or in kind.
+For more information about the different tranches of authorized capital and the aforementioned
+contingent capital, see the Articles of Incorporation, section 4.
+The Annual General Meeting of Shareholders on May 17, 2018, granted a power to the Executive
+Board in accordance with the German Stock Corporation Act, section 71 (1)(8), to buy back for
+treasury on or before May 16, 2023, SAP SE shares attributable in total to not more than €120 million
+of the share capital. This power is subject to the proviso that the shares repurchased, together with
+any shares that were previously acquired and are still held by SAP in treasury and any other shares
+controlled by SAP, must not in total exceed 10% of SAP's share capital. Executive Board powers, such
+as those described to issue and repurchase stock and to grant rights of conversion and subscription to
+shares of SAP, are widely followed common practice among German companies such as SAP. These
+powers give the Executive Board the flexibility it needs, in particular, the option to use SAP shares as
+consideration in equity investments, raise funds on the financial markets at short notice on favorable
+terms, or return value to shareholders during the course of the year.
+Management Report
+Material agreements with change-of control-provisions: SAP SE has concluded the following
+material agreements with provisions that take effect in the event of a change of control, whether
+following a takeover bid or otherwise:
+SAP
+To Our
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Further Information on
+Sustainability
+Additional
+SAP Integrated Report 2021
+Combined Group
+Combined Group
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Corporate Governance
+Fundamentals
+The German Commercial Code, section 315d in connection with section 289f, requires that, as a listed
+company, SAP SE publishes a corporate governance statement either as part of our management
+report or on our Web site. The Executive Board and the Supervisory Board of SAP SE issued the
+Corporate Governance Statement on February 22, 2022, and published it on our Web site at
+www.sap.com/corporate-en/investors/governance.
+Corporate Governance Statement
+Since January 1, 2021, Sabine Bendiek has served as chief people officer and labor relations director
+and has led the Human Resources organization. In mid-2021, she assumed additional responsibility
+and became SAP's chief people and operating officer.
+In January 2021, SAP announced that Julia White and Scott Russell had been appointed to the
+Executive Board. On February 1, 2021, Scott Russell took over the Customer Success organization
+from Adaire Fox-Martin, who departed the Executive Board at the end of January 2021 and left the
+Company at the end of June 2021. Julia White joined the Executive Board effective March 1, 2021,
+and took up the newly created Board role of chief marketing and solutions officer.
+Information Concerning Takeovers
+Information required under the German Commercial Code, sections 289a (1) and 315a (1), with an
+explanatory report:
+Changes in Management
+Composition of share capital: For information about the composition of SAP SE's share capital as
+at December 31, 2021, see the Notes to the Consolidated Financial Statements, Note (E.2). Each
+share entitles the bearer to one vote. American depositary receipts (ADRs) representing our shares are
+listed on the New York Stock Exchange (NYSE) in the United States. ADRs are certificates
+representing non-U.S. shares and are traded on U.S. stock exchanges instead of the underlying
+shares. One SAP ADR corresponds to one SAP share.
+Restrictions applying to share voting rights or transfers: SAP shares are not subject to transfer
+restrictions. SAP held [48,924,892] treasury shares as at December 31, 2021 (see the Notes to the
+Consolidated Financial Statements, Note (E.2)). Treasury shares do not carry voting rights or dividend
+rights or other rights. We are not aware of any other restrictions applying to share voting rights or to
+share transfers.
+Shareholdings that exceed 10% of the voting rights: We are not aware of any direct or indirect
+SAP SE shareholdings that exceed 10% of the voting rights.
+Shares with special rights conferring powers of control: No SAP shareholder has special rights
+conferring powers of control.
+Type of control over voting rights applying to employee shareholders who do not directly
+exercise their control rights: As with other shareholders, employee holders of SAP shares exercise
+their control rights in accordance with the law and the Articles of Incorporation. In votes on the formal
+approval of their acts at the Annual General Meeting of Shareholders, employee representatives on
+the Supervisory Board, as all other members of the Supervisory Board, are prohibited from exercising
+the voting rights associated with their shares.
+123/338
+124/338
+SAP
+measures.
+Our Corporate Financial Reporting (CFR) department codifies all accounting policies in our Group
+accounting and global revenue recognition guidelines. These policies and the corporate closing
+schedule, together with our process descriptions, define the closing process. Under this closing
+process, we prepare, predominately through centralized or external services, the financial statements
+of all SAP entities for consolidation by CFR. CFR and other corporate departments are responsible for
+ensuring compliance with Group accounting policies and monitor the accounting work. CFR also
+conducts reviews of our accounting processes and books. The employees who work on SAP's
+financial reporting receive training in the respective policies and processes.
+We have outsourced some tasks, such as valuing projected benefit obligations and share-based
+payouts, quarterly tax calculations for most entities, and purchase price allocations in the context of
+asset acquisitions and business combinations, and the local statutory financial statements for a few of
+our subsidiaries. These outsourced tasks are subject to the same stringent requirements that are
+mandated for all of our internally generated financially relevant information.
+Based on an analysis of the design and operating effectiveness of our respective internal controls over
+financial reporting, a committee presents the results of the assessment on the ICRMSFR effectiveness
+with respect to our IFRS consolidated financial statements as at December 31 each year to our Group
+135/338
+SAP Integrated Report 2021
+SAP
+Further Information on
+Sustainability
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+136/338
+Our ICRMSFR also includes policies, procedures, and measures designed to ensure compliance of
+SAP's financial reports with applicable laws and standards. We analyze new statutes, standards, and
+other pronouncements concerning IFRS accounting and its impact on our financial statements and
+the ICRMSFR. Failure to adhere to these would present a substantial risk to the compliance of our
+financial reporting. Finally, the ICRMSFR has both preventive and detective controls, including, for
+example, automated and non-automated reconciliations, segregated duties with two-person
+responsibility, authorization concepts in our software systems, and corresponding monitoring
+mitigation. In addition, the Executive Board is informed regularly about individual risks based on
+clearly defined qualitative reporting criteria. Newly identified or existing risks that are above a defined
+threshold, meet a qualitative criterion, or have a potential significant impact are also reported to the
+Audit and Compliance Committee and the chairperson of the Supervisory Board on a quarterly basis.
+This includes risks along our strategic portfolio for services and solutions as well as any risks to our
+ability to continue as a going concern, the latter supported by a process that analyzes those risks with
+respect to potential effects on liquidity, excessive indebtedness, and insolvency.
+Our internal control system consists of the internal control and risk management system for financial
+reporting (ICRMSFR), which also covers the broader business environment and is part of the overall
+risk management system of SAP. Using the current COSO Internal Control - Integrated Framework of
+2013, we have defined and implemented internal controls along the value chain on a process and
+subprocess level to ensure that sound business objectives are set in line with the organization's
+strategic, operational, financial, and compliance goals.
+The purpose of our system of internal control over financial reporting is to provide reasonable
+assurance that our financial reporting is reliable and compliant with generally accepted accounting
+principles. Because of the inherent limitations of internal control over financial reporting, it might not
+prevent or bring to light all potential misstatements in our financial statements.
+Internal Control and Risk Management System for Financial Reporting
+Risks are closed once a reassessment concludes that a risk is no longer existent or does not require
+continued monitoring. Risk closure criteria include the risk event occurring, the risk no longer being
+considered a risk, or the risk having been successfully mitigated.
+Risk Closure
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Additional
+Information
+To Our
+Stakeholders
+SAP'S ICRMSFR is based on our Group-wide risk management methodology. It includes
+organizational, control, and monitoring structures designed to ensure that data and information
+concerning our business is collected, compiled, and analyzed in accordance with applicable laws and
+properly reflected in our IFRS Consolidated Financial Statements.
+CFO. The committee meets regularly to set the annual scope for the test of effectiveness, to assess
+and evaluate any weaknesses in the controls, and to determine measures to address them timely and
+adequately. The Audit and Compliance Committee of the Supervisory Board regularly scrutinizes the
+resulting assessments of the effectiveness of the internal controls over financial reporting with respect
+to the IFRS consolidated financial statements.
+Probability
+Additionally, and in compliance with German commercial law requirements, SAP maintains an internal
+control system beyond financial reporting. This is supported through automated controls (continuous
+control monitoring) as part of our business processes.
+SAP Integrated Report 2021
+Legal and IP
+Medium
+Business-Critical
+Unlikely
+International Laws and Regulations
+Medium
+Major
+Likely
+Global Economic and Political Environment
+Economic, Political, Social, and Regulatory Risks
+Risk Level
+Impact
+The assessment, conducted by SAP and external audit, of the effectiveness of the ICRMSFR related to
+our IFRS consolidated financial statements concluded that, on December 31, 2021, the Group had an
+effective internal control system over financial reporting in place.
+Overview of Risk Factors (Aggregated Statement for 2021)
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+implementation of mitigations) according to our framework that is detailed in the Risk Management
+Methodology and Reporting section.
+The table below provides an overview of major and business critical risk categories (together with the
+respective risk factors). Therein, risk factors are categorized with their net value (after the
+Despite the ongoing COVID-19 pandemic, SAP has been able to take effective measures to mitigate
+the risks arising from it. There has been no significant disruption to business operations or adverse
+effects on revenues, with some savings in operating expenses. While monitoring continues, we expect
+the remaining impact of the pandemic to be insignificant, and estimate the probability of occurrence
+of material risks of this risk factor to be remote.
+The following sections outline our risk categories and risk factors that we have identified and
+continuously track. To further streamline our integrated report, we disclose material and relevant risks
+and focus on "major" and "business-critical" risk factors as per our assessment. Thus, the following risk
+factors are not included in the Integrated Report 2021 as they do not currently fall into either the
+"major" or "business-critical” category: Corporate Governance; Sustainability; Taxation; Sales and
+Revenue Conditions; Liquidity; Use of Accounting Policies and Judgment; Currency, Interest Rate, and
+Share Price Fluctuation; Insurance and Venture Capital; Unauthorized Disclosure of Information;
+Investor Relations; Corporate Affairs; Marketing; Corporate Development; Portfolio; SAP Strategy;
+Cloud Operations; Human Workforce; and Government Security & Secrecy.
+Risk Factors
+We use our own risk management software, namely SAP Governance, Risk, and Compliance (GRC)
+solutions powered by SAP HANA, to support the governance process. GR&AS risk managers record
+and track identified risks using our risk management software online and in real time to help create
+transparency across all known risks that exist in the Group, as well as to facilitate risk management
+and the associated risk reporting. This GRC solution also supports the risk-based approach of the
+ICRMSFR. Our continuous control monitoring activities are performed utilizing our GRC software as
+well. This information is available to managers through direct access to our SAP Fiori application for
+enterprise risk reporting, and in regularly issued reports, and is consolidated and aggregated for the
+quarterly risk report to the Executive Board.
+Supporting Software Solution
+Additional
+Information
+SAP
+80% to 99%
+Risk Reporting
+H
+M
+L
+Likely
+Business-Critical
+(From
+€500 million)
+(€ 100 million to
+€500 million)
+Major
+Moderate
+(€50 million to
+€100 million)
+Minor
+(€25 million to
+€50 million)
+(€0 to €25 million)
+Insignificant
+Probability
+The combination of the likelihood that a risk will occur and its impact on SAP's reputation, business,
+financial position, profit, and/or cash flows leads to a subsequent classification of the risk as either
+"high," "medium," or "low."
+H
+From €500 million
+From €50 million to
+€100 million
+From €25 million to
+€50 million
+From €0 to €25 million
+Impact
+Detrimental negative impact on business, financial position, profit, and/or
+cash flows
+Considerable negative impact on business, financial position, profit,
+and/or cash flows
+Some potential negative impact on business, financial position, profit,
+and/or cash flows
+Limited negative impact on business, financial position, profit, and/or
+cash flows
+Negligible negative impact on business, financial position, profit, and/or
+cash flows
+Business-Critical
+Major
+Moderate
+Minor
+From €100 million to
+€500 million
+All identified and relevant risks are reported at local, regional, and global levels in accordance with our
+risk management policy and the global risk reporting standard. At these levels, we have established
+executive risk councils that regularly discuss risks and responses and that monitor the success of risk
+60% to 79%
+M
+Risk assessment is followed by risk validation and risk monitoring. The risk exposure and the risk
+description, as well as the appropriateness of agreed responses, are validated by the accountable
+management. Our GR&AS risk managers work in close cooperation with the relevant business
+owners, ensuring that strategies are implemented to address identified risks. Business owners are
+responsible for continuously monitoring the risks and associated mitigation strategies, with support
+from the respective GR&AS risk managers. To ensure greater risk transparency and enable
+appropriate decision-making for business owners, we have established a risk delegation of authority
+(RDOA) for relevant parts of the organization as deemed appropriate. RDOA is a risk management
+decision-making hierarchy that helps business owners gain timely insight into business transactions
+that pose the greatest risk, so that they are better able to review the relevant information, understand
+the risk profile and associated mitigation strategies, and determine whether their approval is
+warranted. Depending on the exposure, approval is required at various levels of the Company, up to
+and including the Executive Board.
+Risk Validation and Monitoring
+In the final stage of the risk assessment, after identifying and analyzing the risk, we determine a
+response for each identified risk. We have different response categories such as mitigating, retaining
+for research, transferring, delegating, accepting, or avoiding, for example, by deciding not to start or
+not to continue the activity that may lead to a risk.
+H = High Risk
+M = Medium Risk
+L = Low Risk
+Impact
+M
+L
+L
+L
+L
+1% to 19%
+L
+M
+L
+L
+L
+20% to 39%
+H
+M
+M
+L
+L
+40% to 59%
+H
+H
+M
+M
+Major
+Major
+Data Protection and Privacy
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+OEC coordinates and provides guidance on implementation, training; and enforcement efforts with
+respect to compliance-related policies throughout SAP, including but not limited to the Third-Party
+Sales Commission Policy and accompanying training.
+We cannot exclude the possibility that if risks of this risk factor were to occur, the impact could be
+business-critical. We estimate the probability of occurrence to be unlikely. We classify this risk factor
+as medium.
+Legal and IP: Claims and lawsuits against us, such as for IP infringements, or our inability to
+obtain or maintain adequate licenses for third-party technology, or if we are unable to protect
+or enforce our own intellectual property, may result in adverse outcomes.
+We have in the past and believe that we will continue to be subject to claims and lawsuits, including
+intellectual property infringement claims, as our solution portfolio grows; as we acquire companies
+with increased use of third-party code including open source code; as we expand into new industries
+with our offerings, resulting in greater overlap in the functional scope of offerings; and as non-
+practicing entities that do not design, manufacture, or distribute products assert intellectual property
+infringement claims.
+Moreover, protecting and defending our intellectual property is crucial to our success. The outcome of
+litigation and other claims or lawsuits is intrinsically uncertain.
+We are subject to risks and associated consequences in the following areas, among others:
+Claims and lawsuits might be brought against us.
+We might become dependent in the aggregate on third-party technology, including cloud and Web
+services, that we embed in our products or that we resell to our customers.
+Third parties have claimed, and might claim in the future, that we infringe their intellectual property
+rights or that we are overusing or misusing licenses to these technologies.
+To Our
+Stakeholders
+We integrate open source software components from third parties into our software. Open source
+licenses might require that the software code in those components or the software into which they
+are integrated be freely accessible under open source terms.
+Third parties might reverse-engineer or otherwise obtain and use technology and information that we
+regard as proprietary. Accordingly, we might not be able to protect our proprietary rights against
+unauthorized third-party copying or utilization. Adverse outcomes to some or all of the claims and
+lawsuits pending against us might result in the award of significant damages or injunctive relief against
+us or brought against us in the future that could hinder our ability to conduct our business and could
+have a material adverse effect on our reputation, brand, business, competitive or financial position,
+financial performance, profit, and cash flows. Third parties could require us to enter into royalty and
+licensing arrangements on terms that are not favorable to us, cause product shipment delays, subject
+our products to injunctions, require a complete or partial redesign of products, result in delays to our
+customers' investment decisions, and damage our reputation. Third-party claims might require us to
+make freely accessible under open source terms one of our products or third-party (non-SAP)
+software upon which we depend.
+Insignificant
+Any legal action we bring to enforce our proprietary rights could also involve enforcement against a
+partner or other third party, which might have an adverse effect on our ability, and our customers'
+ability, to use that partner's or other third party's products.
+The outcome of litigation and other claims or lawsuits is intrinsically uncertain. Management's view of
+the litigation might also change in the future. Actual outcomes of litigation and other claims or lawsuits
+Workforce restrictions and travel bans resulting from changing laws and regulations, from political
+decisions, or through required works council involvements, labor union approvals, and immigration
+laws in different countries
+Discriminatory, protectionist, or conflicting fiscal policies and tax laws
+Changes in external reporting standards and tax laws including, but not limited to, conflict and
+overlap among tax regimes as well as the introduction of new tax concepts that harm digitalized
+business models
+Changes in tax laws and changes in the interpretation of the complex tax rules in certain countries,
+impacting our business situation, financial condition, and results of operations
+Our business is subject to numerous risks inherent to international business operations. We are
+subject to risks and associated consequences in the following areas, among others:
+The SAP Group has a global presence and operates in most countries of the world. As a European
+company domiciled in Germany with securities listed in Germany and the United States, we are
+subject to European, German, U.S., and other governance-related regulatory requirements of
+countries we operate in.
+International Laws and Regulations: Laws, regulatory requirements and standards in
+Germany, the United States, and elsewhere continue to be very stringent. Our international
+business activities and processes expose us to numerous and often conflicting laws and
+regulations, policies, standards, or other requirements and sometimes even conflicting
+regulatory requirements.
+We cannot exclude the possibility that if risks of this risk factor were to occur, the impact could be
+major. We estimate the probability of occurrence to be likely. Such occurrence could exacerbate the
+other risks we describe in this report or cause a negative deviation from our revenue and operating
+profit target. We classify this risk factor as medium.
+Monitoring and evaluation of global and political developments, supported by our global
+government affairs unit, to share insights and provide guidance to allow for proactive preparation
+and timely mitigation
+Despite our efforts, we might not be able to prevent third parties from obtaining, using, or selling
+without authorization what we regard as our proprietary technology and information. In addition,
+proprietary rights could be challenged, invalidated, held unenforceable, or otherwise affected.
+Moreover, the laws and courts of certain countries might not offer effective means to enforce our
+legal or intellectual property rights. Finally, SAP may not be able to collect all judgments awarded
+to it in legal proceedings.
+Reshaping of our organizational structure and processes to increase flexibility and efficiency
+SAP Integrated Report 2021
+140/338
+Protectionist trade policies, import and export regulations, and trade sanctions, counter or even
+conflicting sanctions, and embargoes including, but not limited to, country-specific software
+certification requirements
+Violations of country-specific sanctions
+Compliance with and stringent enforcement of laws and regulations (including interpretations),
+implications of government elections, lack of reforms, data protection and privacy rules, regulatory
+requirements and standards (such as the Payment Card Industry Data Security Standard [PCI
+DSS]), other compliance requirements (such as Service Organization Controls [SOC]), or
+sometimes even country-specific certifications or requirements in particular for cloud service
+provider or data center operations
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Expenses associated with the localization of our products and compliance with varying and
+potentially conflicting local regulatory requirements
+SAP
+As we expand into new countries and markets or extend our 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 unclear, subject to change over time, and
+often conflicting among jurisdictions. Additionally, these laws and government approaches to
+enforcement continue to change and evolve, just as our products and services continually evolve.
+Compliance with these varying laws and regulations could involve significant costs or require changes
+in products or business practices. Non-compliance could result in the imposition of penalties or
+cessation of orders due to alleged non-compliant activity. Governmental authorities could use
+considerable discretion in applying these statutes and any imposition of sanctions against us could be
+material.
+SAP has established measures intended to address and mitigate the described risks and adverse
+effects, such as:
+-
+We continuously monitor new and increased regulatory requirements, updated or new enforcement
+trends, and publicly available information on compliance issues in the computer software industry,
+in the emerging markets where we invest our resources, and in the business environment in
+general to cope with an increase in regulation enforcement efforts of certain countries or state-
+driven protectionism.
+We continuously invest and strive to improve, harmonize, and standardize our global processes,
+procedures, and solutions to increase our efficiency and effectivity in meeting the various legal
+requirements to ensure compliance, while also utilizing scenario impact analyses.
+We have established a dedicated unit within our Global Legal organization that proactively
+assesses newly emerging regulatory initiatives, advises internal departments on these initiatives,
+and supports their swift adherence thereto.
+We receive guidance from external economic consultants, law firms, tax advisors, and authorities in
+the concerned countries, and take legal actions when necessary.
+We engage with authorities on public policy issues, including the creation of reasonable framework
+conditions for new technologies such as cloud computing, Big Data, artificial intelligence, the
+Internet of Things (IoT), and for international trade.
+We conduct audits based on various audit standards on a regular basis to identify and remediate
+issues early on.
+We have a legal and compliance office presence in various countries, with compliance safeguards
+supported and monitored by our Office of Ethics & Compliance (OEC), a team of dedicated
+resources who are tasked with managing our policy-related compliance measures.
+We maintain a data protection and privacy office and associated policy.
+We continue efforts to strengthen the Export Control team and continue with our cross-Board
+project to overhaul SAP's export control and trade sanctions policies, operations, and controls, to
+safeguard compliance with applicable EU and U.S. laws in all delivery channels both on premise
+and in the cloud.
+We regularly update and enhance our compliance programs to improve our effectiveness and to
+ensure that our employees understand and comply with the SAP Code of Business Conduct
+(COBC). This process is coordinated by the OEC.
+139/338
+Any of these events could have a material adverse effect on our operations globally or in one or more
+countries or regions, which could have a material adverse effect on our business, financial position,
+profit, and cash flows.
+Medium
+- Internal cost discipline and a conservative financial planning
+SAP has established measures intended to address and mitigate the described risks and adverse
+effects, such as:
+Unlikely
+Market Share and Profit
+Strategic Risks
+Medium
+Major
+Likely
+Technology and Products
+High
+Business-Critical
+Likely
+Cybersecurity and Security
+Medium
+Major
+Business-Critical
+Likely
+Medium
+Major
+Unlikely
+Sales and Services
+Operational Business Risks
+Medium
+Major
+Likely
+Ethical Behavior
+Corporate Governance and Compliance Risks
+Medium
+Major
+Likely
+Partner Ecosystem
+Ongoing shift to a higher share of cloud subscriptions and software support revenue streams,
+which will lead to more predictable revenue streams over time, providing increased stability against
+financial volatility
+Medium
+Unlikely
+Any of these events could limit our ability to reach our targets, as they could have a material adverse
+effect on our business operations, our business in general, our financial position, profit, and cash
+flows.
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+138/338
+137/338
+Regional conflicts, which may affect data centers as critical infrastructure assets
+Terrorist attacks or other acts of violence, civil unrest, pandemics, or natural disasters, impacting
+our business
+Mergers and Acquisitions
+Increased number of foreclosures and bankruptcies among customers, business partners, and key
+suppliers
+Financial market volatility episodes, global economic crises, chronic fiscal imbalances, slowing
+economic conditions, or disruptions in emerging markets
+Diplomatic confrontations, frictions, trade or tariff conflicts with potential global implications as
+indicated by a prolonged and widespread economic slowdown
+Prolonged deterioration of global economic conditions (impact on accurate forecast) or budgetary
+constraints of national governments
+General economic, political, social, environmental, public health, and market developments, and
+general unrest
+We are subject to risks and associated consequences in the following areas, among others:
+As a global company, we are influenced by multiple external factors that are difficult to predict and
+beyond our influence and control. Any of these factors could have a significant adverse effect on the
+global economy as well as on our business.
+Global Economic and Political Environment: Uncertainty in the global economy, financial
+markets, and social and political instability caused by state-based conflicts, terrorist attacks,
+civil unrest, war, or international hostilities could lead to disruptions in our business.
+Economic, Political, Social, and Regulatory Risks
+Medium
+Unlikely
+Innovation
+Medium
+Major
+Higher credit barriers for customers, reducing their ability to finance software purchases
+Impact Definition
+H
+Additional
+Information
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+continuously foster SAP's risk culture, we conduct risk activities for the entire SAP organization such
+as mandatory training in ethical behavior, code of conduct, and risk management.
+Our Executive Board is responsible for ensuring the effectiveness of the internal control system and
+the risk management system. The effectiveness of both systems and their implementation in the
+different Board areas is monitored by each Executive Board member. The Audit and Compliance
+Committee of the Supervisory Board regularly monitors the effectiveness of SAP's internal control and
+risk management systems. Our Global Risk & Assurance Services (GR&AS) organization regularly
+provides a status update on the internal control and the risk management systems to the Audit and
+Compliance Committee of the Supervisory Board. Every year, SAP's external auditors assess as to
+whether the SAP Group early-warning system for risk detection is adequate to identify risks that might
+endanger our ability to continue as a going concern. Additional assurance is obtained through the
+external audit of the effectiveness of our system of internal controls over financial reporting.
+Our Global Risk Management Policy
+The risk management policy, updated in June 2021, stipulates responsibilities for conducting risk
+management activities and defines reporting and monitoring structures. Our global SAP risk
+management policy clearly states that each employee is responsible for active engagement in the risk
+management process as well as for the continuous identification of risks, based upon clear rules of
+engagement in adherence to the policy. The risk management system primarily analyzes risks.
+Opportunities are assessed or analyzed where it is deemed appropriate.
+Our Global Risk Management Organization
+Our global risk management organization is responsible for the implementation of a Group-wide
+effective risk management system. Furthermore, GR&AS is responsible for the regular maintenance
+and implementation of our risk management policy, as well as the standardized internal and external
+risk reporting.
+All GR&AS risk managers, working with assigned risk contacts in the relevant business units, identify
+and assess risks associated with material business operations using a uniform approach and monitor
+the implementation and effectiveness of the measures chosen to mitigate risks.
+Further financial risk management activities are performed for example by our Global Treasury and
+Global Tax departments. General legal risks are managed by the Global Legal department. Sanction
+and embargo-related risks are managed by the Export Control department, harassment and other HR-
+related issues by our Global Labor & Employee Relations Office, security-related risks by our SAP
+Global Security Office, and IP risks by our Global IP Office. All risks are tracked, maintained, and
+reported within SAP's risk management system.
+During the merger and acquisition and post-merger integration phase, newly acquired companies are
+subject to risk management performed by our Corporate Development M&A function. Furthermore, for
+as long as the newly acquired companies are not integrated, existing risk management structures are
+maintained or enhanced within the acquired companies for the purposes of compliance with legal
+requirements.
+The exposure of SAP business units to potential compliance risks is reviewed on a regular basis.
+Quantitative and qualitative internal data as well as external information, such as the Transparency
+International Corruption Perceptions Index, are considered in our wider compliance risk analysis.
+Based on this information, we performed a detailed assessment for all SAP-relevant high-risk
+countries and derived local as well as global mitigations.
+The GR&AS unit, led by the Chief Risk Officer, also acting as chief audit executive, combines internal
+audit, SOX, internal controls and global governance, risk, and compliance. The Chief Risk Officer
+reports to our Group CFO and is responsible for SAP's internal control and risk management
+programs.
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+SAP Integrated Report 2021
+SAP
+132/338
+131/338
+Impact Level
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Risk Management and Risks
+Consolidated Financial
+Statements IFRS
+Our Risk Management
+As a global company, SAP is exposed to a broad range of risks across our business operations.
+Consequently, our Executive Board has established comprehensive internal control and risk
+management structures that enable us to identify and analyze risks early and take appropriate action.
+Our internal control and risk management systems are designed to identify potential events that could
+negatively impact the Company and to provide reasonable assurance regarding the operating
+effectiveness of our internal controls over our financial reporting.
+These systems comprise numerous control mechanisms and are an essential element of our
+corporate decision-making process; they are therefore implemented across the entire Group as an
+integral part of SAP's business processes. We have adopted an integrated internal control and risk
+management approach to help maintain effective global risk management while also enabling us to
+aggregate risks and report on them transparently.
+In addition, we have a governance model in place across the internal control and risk management
+systems to ensure both are effective, as well as a central software solution to store, maintain, and
+report all risk-relevant information.
+Legal and Regulatory Requirements
+Due to our public listings in both Germany and the United States, we are subject to both German and
+U.S. regulatory requirements that relate to internal controls and risk management over financial
+reporting, such as provisions in the German Stock Corporation Act, section 91 (2), and the U.S.
+Sarbanes-Oxley Act (SOX) of 2002, specifically sections 302 and 404. Hence, our Executive Board has
+established an early warning system (risk management system) to enable compliance with applicable
+regulations.
+The risk management policy issued by our Executive Board governs how we manage risk in line with
+the Company's risk appetite and defines a methodology that is applied uniformly across all parts of
+the Group.
+Risk Management Pillars
+Our risk management system is based on the framework published by the Committee of Sponsoring
+Organizations of the Treadway Commission (COSO) entitled “Enterprise Risk Management -
+Integrating with Strategy and Performance." Updated in 2017, this framework is built on four pillars,
+which include a global risk management governance framework, a dedicated risk management policy,
+a global risk management organization, and a standardized risk management methodology.
+In accordance with the COSO framework, SAP's enterprise risk management covers risks in the areas
+of strategy, operations, finance, and compliance which also covers ethical behavior, corporate
+governance, and sustainability.
+Our Global Risk Management Governance Framework
+The risk management governance framework at SAP represents a comprehensive system of
+approaches and processes to ensure control through a clearly structured risk management system
+and a supporting risk culture. The risk culture is considered the basis of SAP's risk management
+system. Risk culture at SAP comprises a system of values, beliefs, knowledge, attitudes, and
+understanding concerning risks and risk management as part of our corporate culture. To support and
+Internal Control and Risk Management Systems
+Further Information on
+Sustainability
+Risk Management Policy and Framework
+Probability/Likelihood of Occurrence
+Analysis
+Response
+Validation
+and Monitoring
+Reporting
+Closing
+KO
+Risk Planning
+Based on SAP's risk management policy and framework, the risk planning phase serves to align on
+the definition and assignment of roles and responsibilities, the definition of risk-relevant business
+activities (such as processes, projects or other aspects affecting Company assets), the determination
+of objectives and value drivers, the planning of risk assessments, and the determination of adequate
+information flow.
+Combined Group
+Management Report
+Risk planning and risk identification for internal and external risks are conducted jointly by GR&AS risk
+managers and the relevant business units or SAP entities.
+Risk Assessment
+A risk assessment covers the identification and analysis of a risk, as well as the determination of a
+response to that risk. We use various approaches to identify risks. For example, we have identified risk
+indicators and have developed a comprehensive risk catalog that includes risk mitigation strategies.
+Risk identification takes place at various levels of our organization to ensure that common risk trends
+are identified and end-to-end risk management across organizational borders is enabled. We apply
+both qualitative and quantitative risk analyses and other risk analysis methods such as sensitivity
+analyses and simulation techniques.
+To determine which risks pose the greatest threat to the viability of the SAP Group, we classify them
+as high, medium, or low based on the likelihood that a risk will occur within the assessment horizon
+and the impact the risk would have on SAP's business objectives if it were to occur.
+Stakeholders
+Identification
+The scales for measuring these two indicators are given in the following tables.
+1% to 19%
+20% to 39%
+40% to 59%
+SAP Integrated Report 2021
+60% to 79%
+80% to 99%
+Description
+Remote
+Unlikely
+Likely
+Highly Likely
+Near Certainty
+The period for analyzing our risks correlates with that of the respective associated business activities,
+considering a relevant forecast horizon. The period for analyzing risks that could be possible threats to
+the Group's ability to continue as a going concern is eight rolling quarters.
+133/338
+To Our
+Planning
+Risk Assessment
+The illustration below describes the key elements of the risk management process under SAP's risk
+management policy.
+134/338
+Further Information on
+Sustainability
+SAP
+Additional
+Information
+Risk Management Methodology and Reporting
+Consolidated Financial
+Statements IFRS
+This could lead to increased risks for SAP, which could harm SAP's business and limit SAP's growth.
+Non-compliance with applicable data protection and privacy laws by SAP or any of the subprocessors
+engaged by SAP within the processing of personal data could lead to risks. We are subject to risks
+and associated consequences in the following areas, among others:
+We cannot exclude the possibility that if risks of this risk factor were to occur, the impact could be
+major. We estimate the probability of occurrence to be likely. We classify this risk factor as medium.
+We strive to provide clear governance and guidance on data handling, processing standards, and
+external communication as part of our data management framework, specifically incorporating
+aspects of new technologies such as those represented in embedded intelligence applications.
+We increase the automation of security processes and secure product development to reduce
+human error and ensure consistency and dependability of security outcomes.
+We actively monitor legal developments and engage with political stakeholders and government
+authorities, directly or through industry associations, to clarify questions relevant to SAP and SAP's
+business.
+We have a data protection management system in place in all our Board areas. Furthermore, this
+data protection management system will be continuously enhanced and extended to apply to
+newly acquired companies within the SAP Group. SAP has been awarded the British Standards
+Institution (BSI) certification for the implementation and operation of SAP's data protection
+management system, which underlines SAP's compliance with data protection laws, including
+GDPR.
+We continuously enhance our data center operations worldwide, also considering local and sector-
+specific market and legal requirements. For compliance with local legal requirements, we have
+established a network of local and regional data protection and privacy coordinators.
+We continuously review SAP's existing standards and policies to address changes to applicable
+laws and regulations.
+We have anchored data protection requirements in the mandatory product standards of SAP's
+product development lifecycle.
+We have implemented internal processes and measures to enable SAP to comply successfully and
+sufficiently with applicable data protection requirements.
+SAP has established measures intended to address and mitigate the described risks and adverse
+effects, such as:
+Any of these events could have a material adverse effect on our reputation, business, financial
+performance, competitive or financial position, profit, and cash flows.
+In addition, the German Federal Office for the Protection of the Constitution and security industry
+experts continue to warn of risks related to a globally growing number of cybersecurity attacks aimed
+at obtaining or violating company data including personal data. We anticipate cyberattack techniques
+to continue to evolve and increase in sophistication, which could make it difficult to anticipate,
+prevent, detect, and mitigate attacks and intrusions, thus leading to, for example, risks described in
+the Cybersecurity and Security section.
+Increased complexity in times of digitalization with regard to legal requirements in the context of
+cross-border data transfer and data localization requirements
+Damage claims by customers and individuals or contract terminations and potential fines
+Investigations and administrative measures by data protection supervisory authorities, such as the
+instruction to alter or stop non-compliant data processing activities, including the instruction to stop
+using non-compliant subprocessors
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+142/338
+141/338
+Mandatory disclosures of breaches to affected individuals, customers, and data protection
+supervisory authorities
+Harm to SAP's reputation
+Information
+We are subject to risks and associated consequences in the following areas, among others:
+Implementation risks, if, for example, implementations take longer than planned, or fail to generate
+the profit originally expected, scope deviations, solution complexity, high pace of engineering
+innovation, individual integration and migration needs or functional requirement changes, or
+insufficient milestone management and tracking leading to delays in timeline, maybe even
+exceeding maintenance cycles of solutions in scope
+SAP
+If any of these risks materialize, this might have an adverse effect on the demand for our products and
+services as well as the partner's loyalty and ability to deliver. As a result, we might not be able to scale
+our business to compete successfully with other vendors, which could have an adverse effect on our
+reputation, business, financial position, profit, and cash flows.
+Failure of partners to comply with contract terms in embargoed or high-risk countries
+Failure of partners to transform their business model in accordance with the transformation of
+SAP's business model in a timely manner
+us
+Failure of partners and their products to meet quality requirements expected by our customers or
+Failure of partners to adhere to applicable legal and compliance regulations
+Failure of partners to embed our solutions sufficiently enough to profitably drive product adoption,
+especially with innovations in SAP S/4HANA, the SAP Customer Experience portfolio, business
+process intelligence from SAP, and SAP Business Technology Platform (SAP BTP)
+-
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Combined Group
+We cannot exclude the possibility that if risks of this risk factor were to occur, the impact could be
+major. We estimate the probability of occurrence to be likely. We classify this risk factor as medium.
+We are named as a defendant in various legal proceedings for alleged intellectual property
+infringements. For more information and a more detailed report relating to certain of these legal
+proceedings, see the Notes to the Consolidated Financial Statements, Notes (A.4), (C.5), and (G.3).
+Data Protection and Privacy: Non-compliance with increasingly complex and stringent,
+sometimes even conflicting, applicable data protection and privacy laws or failure to meet
+the contractual requirements of SAP's customers with respect to our products and services
+could lead to civil liabilities and fines, as well as loss of customers.
+We rely on a combination of the protections provided by applicable statutory and common law
+rights, including trade secret, copyright, patent, and trademark laws, license and non-disclosure
+agreements, and technical measures to establish and protect our proprietary rights in our products
+and customer projects.
+We are party to certain patent cross-license agreements with third parties, which removes the risk
+of litigation with respect to the involved patents.
+- We endeavor to protect ourselves in the respective third-party software agreements by obtaining
+certain rights in case such agreements are terminated.
+We have established various internal programs, such as internal policies, processes, and
+monitoring, to assess and manage the risks associated with open source, and third-party
+intellectual property.
+Our GR&AS organization works closely with the OEC and Global Legal and is jointly responsible for
+the management and reporting of potential risks associated with third-party intellectual property.
+As a global software and service provider, SAP is required to comply with local laws wherever it does
+business. One of the relevant European data protection laws is GDPR. International data transfers to
+third countries that do not provide for an adequate level of data protection require additional
+safeguards to justify a transfer from the EU to a third country based on the standard contractual
+clauses. In 2021, SAP experienced two significant incidents in processing personal data - on our own
+behalf - that were subject to GDPR only and were reported to the supervisory authorities.
+Furthermore, evolving regulations and laws globally (such as the California Consumer Privacy Act, the
+Brazilian General Data Protection Law, and the EU's proposed e-Privacy Regulation including data
+localization requirements) regarding data protection and privacy or other standards increasingly aimed
+at the use of personal data, such as for marketing purposes and the tracking of individuals' online
+activities, may impose additional burdens for SAP due to increasing compliance standards that could
+restrict the use and adoption of SAP's products and services (in particular cloud services) and make it
+more challenging and complex to meet customer expectations. This refers to a compliant use of new
+technology, such as machine learning (ML) and Al for product development and deployment of
+intelligent applications.
+Our OEC sets and manages internal policies related to our CoBC.
+could differ from the assessments made by management in prior periods, which are the basis for our
+accounting for these litigations and claims under IFRS.
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+SAP has established measures intended to address and mitigate the described risks and adverse
+effects, such as:
+SAP Integrated Report 2021
+Continuous development of our comprehensive compliance program based on the three
+pillars of prevention, detection, and response
+Stakeholders
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+Inadequate contracting and consumption models based on subscription models for services,
+support, and application management
+Unrenderable services committed during the sales stage
+Improper calculations or estimates leading to costs exceeding the fees agreed in fixed-price
+contracts
+Protracted installation or significant third-party consulting costs
+Challenges to achieve a seamlessly integrated, sufficiently automated and aligned service delivery
+in complex deliveries or implementations, for example due to lack of insights especially in the
+event of limited project involvement of SAP
+Challenges to effectively implement acquired technologies
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Management Report
+Combined Group
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Annual reconfirmation of commitment to the CoBC by SAP's workforce (except where
+disallowed by local legal regulations)
+Implementation of compliance policies and processes aimed at managing third parties and
+preventing misuse of third-party payments for illegal purposes, including the performance of
+compliance due diligence activities prior to the engagement of third parties
+Guidance in our travel, entertainment, gift, and expense policies
+Termination of partners that do not pass our partner compliance audit process, or remediation
+of their deficiencies
+Establishment of a Partner Integrity Initiative aiming to examine the compliance programs of
+partners in SAP's ecosystem and to review the SAP-related deals closed by them
+Despite our comprehensive and continuously evolving compliance program and established internal
+controls, intentional efforts of individuals to circumvent controls or engage in corruption, especially by
+way of collusion with other involved parties, cannot always be prevented.
+We cannot exclude the possibility that if risks of this risk factor were to occur, the impact could be
+major. We estimate the probability of occurrence to be likely. We classify this risk factor as medium.
+Operational Business Risks
+Sales and Services: Sales and implementation of SAP software and services, including cloud,
+are subject to several significant risks sometimes beyond our direct control.
+A core element of our business is the successful implementation of software and service solutions.
+The implementation of SAP software and cloud-based service deliveries is led by SAP, by partners, by
+customers, or by a combination thereof.
+Management Report
+To Our
+Consolidated Financial
+Statements IFRS
+SAP has established measures intended to address and mitigate the described risks and adverse
+effects, such as:
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Corporate Governance and Compliance
+Ethical Behavior: Our global business exposes us to risks related to unethical behavior and
+non-compliance with policies by employees, other individuals, partners, or entities
+associated with SAP.
+SAP's leadership position in the global market is founded on the long-term and sustainable trust of
+our stakeholders worldwide. Our overarching approach is one of corporate transparency, open
+communication with financial markets, regulators, and authorities, and adherence to recognized
+standards of business integrity. This commitment to recognized standards of business integrity is
+formalized in SAP's CoBC and supporting guidelines.
+We are subject to risks and associated consequences in the following areas, among others:
+Non-compliance with our policies and violation of compliance related rules, regulations, and
+legal requirements including, but not limited to, anti-corruption and anti-bribery legislation in
+Germany, the U.S. Foreign Corrupt Practices Act, the UK Bribery Act, and other local laws
+prohibiting corrupt conduct
+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
+Fraud and corruption, especially in countries with a low Transparency International Corruption
+Perceptions Index score and particularly in emerging markets
+144/338
+Public sector transactions in territories exposed to a high risk of corruption
+Any of these events could have a material adverse effect on our business, reputation, brand,
+competitive or financial position, share price, profit, and cash flows.
+SAP has encountered situations that required clear messaging and strong action on non-compliance
+in the context of corrupt behavior that has the potential to harm our business and reputation. SAP is
+continuing to investigate its dealings with the public sector. For more information about the alleged
+violations, see the Notes to the Consolidated Financial Statements, Note (G.3).
+SAP has established measures intended to address and mitigate the described risks and adverse
+effects, such as:
+Insufficient or incorrect information provided by customers, subsequently leading to mismatches in
+contractual commitments, requirements, solution definition, architectures, or technologies
+Insufficient customer expectation management, including scope, integration capabilities and
+aspects, as well as lack of purposeful selection, implementation, and utilization of SAP solutions
+Lack of customer commitments and respective engagements, including insufficient commitment of
+resources or lack of solution migrations to latest offerings, leading to delays or deviations from
+recommended best practices
+- Expansion of the OEC's bandwidth through additional staffing
+Root cause analysis related to corrupt or fraudulent behavior, to improve associated business
+processes and prevent further and future violations
+Refraining from engaging sales agents and paying third-party sales commissions on public
+sector deals in high-risk countries
+Review of partner business models, to mitigate risks of corruption while meeting agility
+requirements
+Internal audit of our compliance program as it relates to bribery, corruption, and substantial
+fraud
+Several educational, counseling, control, and investigative measures
+-
+Requirement for mandatory CoBC training applicable to every SAP employee, providing
+practical guidance on how to avoid corrupt behavior and approach dilemma situations
+143/338
+Increased exposure and impact on business activities in highly regulated industries such as
+public sector, healthcare, banking, or insurance
+- We invest in long-term, mutually beneficial relationships and agreements with partners.
+Expansion of cybersecurity attack surface due to increased connectivity of operational data
+We continue to develop and enhance a wide range of partner programs to retain existing and
+attract new partners of all types.
+· Integrated enhanced security capabilities in our hosting environment, cloud platforms, and cloud
+deployment tools
+Engagement of experts to advise on appropriate cybersecurity protocols and to further increase
+attention and awareness of cybersecurity protocols and protection options
+Local and regional crisis management teams to respond and minimize losses in case of crisis
+situations
+Increased employee, contractor, third-party, and partner awareness through campaigns and
+cybersecurity awareness training courses and projects, including execution of security reviews, as
+required
+Focus on increased training, development, and retention of skilled personnel in SAP's cybersecurity
+and product security workforce
+Physical security measures such as access control systems and employee identification
+Focus on increased coordination across our various lines of business with respect to our ability to
+detect, identify, and respond to unauthorized incursions in our systems in a timely manner
+Investment in data and asset governance of SAP's global asset repository
+Measures such as technical IT security measures, identity and access management, and
+mandatory security and compliance training
+Monitoring of cybersecurity posture to gain visibility on exposed vulnerabilities of third-party
+vendors
+Focus on development and implementation of heightened cybersecurity measures designed to
+further safeguard SAP's most strategic assets
+Continuous vigilance, adaptation, standardization, and modification of our security procedures,
+such as security risk identification, threat modeling, advanced threat defense, a comprehensive
+security testing strategy, container security enhancements, mandatory security training for all
+developers, and security validation of our critical components, products, patches, and services
+before shipment
+Improved roll-out procedures for security-relevant notes, patches, and service packs to ensure easy
+and fast consumption on the customer side
+Improved monitoring with respect to implementing enhancements to our cybersecurity
+infrastructure
+A comprehensive certification program designed to ensure that relevant third-party solutions are of
+consistently high quality
+Increased investments, coordination, and resources, including various internal initiatives, to achieve
+SAP's objective of ensuring over time that our cybersecurity infrastructure meets or exceeds
+evolving industry standards
+Certification of relevant IT-related organizations to the internationally recognized Business
+Continuity Management standard
+-
+-
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+Disaster recovery and business continuity plans to protect our key IT infrastructure (especially our
+data centers), including implementation of data redundancies and daily data backup strategies
+A responsible disclosure process to detect vulnerabilities, as well as security patch days to rapidly
+respond to customer security needs and provide fixes
+Product standard requirements such as mandatory non-erroneous modeling that takes software
+dependencies into account
+Enablement of our current product portfolio for SAP HANA, development of innovative solutions
+based on SAP HANA, and offering of comprehensive cloud-based services, supported by SAP BTP
+and intelligent technologies
+· Ongoing maintenance of the high quality-level of our products, which is made transparent in the
+defined KPIs for quality transparency and confirmed by our satisfaction ratings as measured by our
+customer survey
+150/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Technology and Products: Our technology and products may experience undetected defects,
+coding, or configuration errors, may not integrate as expected, or may not meet customer
+expectations.
+We are subject to risks and associated consequences in the following areas, among others:
+-
+-
+Integration and convergence of our offerings such as SAP S/4HANA, the SAP Customer Experience
+portfolio, SAP BTP, and acquired technologies
+Failure of software products and services to fully meet market needs or customer expectations
+Failure of software products and services from acquired companies to fully comply with SAP
+quality standards
+New products, services, and cloud offerings, including third-party technologies, might not comply
+with local standards and requirements or might contain defects or might not be mature enough
+from the customer's point of view for business-critical solutions after shipment despite all the due
+diligence SAP puts into quality.
+Inability to define and provide adequate solution packages and scope for all customer segments
+Inability of algorithms to correctly adapt to evolving circumstances, which may lead to adverse
+decision-making processes in the context of Al-related technologies
+Inability to fulfil expectations of customers regarding time and quality in the defect resolution
+process
+Lack of customer references for new products and solutions
+Any of these events could have a material adverse effect on our business, brand, competitive or
+financial position, profit, and cash flows.
+SAP has established measures to address and mitigate the described risks and adverse effects, such
+as:
+-
+Increased focus on localization needs to further meet customer demands
+A broad range of techniques, including project management, project monitoring, product standards
+and governance, and rigid and regular quality assurance measures certified to ISO 9001:2015,
+applicable to SAP's reportable segments
+Threat modelling at the beginning of every development project to identify potential risks including,
+but not limited to using centrally provided tools, also as part of information security measures
+certified to ISO 27001:2013
+A holistic testing strategy to validate the state of quality and security for every product before
+market introduction
+· Regular, direct customer feedback is considered in the market release decision process
+We might not be as fast as expected in integrating our platforms and solutions, enabling the
+complete product and cloud service portfolio, harmonizing our user interface design and
+technology, integrating acquired technologies and products, or bringing packages, services, or new
+solutions based on SAP BTP to the market.
+-
+An SAP Global Security Policy that is mandatory for all employees and supported by documented
+security standards, procedures, and good practices including specific security training curricula for
+our developers
+Alignment of our software security development lifecycle to the recommendations of
+ISO/IEC 27034, applying methods to develop secure software
+Failure of any cloud service provider to deliver cloud services securely and successfully, which
+could have a negative impact on customer trust in cloud solutions
+cybersecurity infrastructure and protocols
+Exposure of our business operations and service delivery due to threats, including virtual attack,
+disruption, damage, unauthorized access, theft, destruction, industrial or economic espionage,
+serious or organized crime, and other illegal activities, as well as violent extremism and terrorism
+State-driven economic espionage or competitor-driven industrial espionage, and criminal activities
+including, but not limited to, cyberattacks and breaches against cloud services and hosted on-
+premise software, whether managed by us or our customers, partners, or other third parties
+Disruptions to back-up, disaster recovery or business continuity management processes
+Disruptions due to exposure of our network systems to cybersecurity attacks via defects and
+vulnerabilities in the IT systems of our customers, or in the systems of third parties that facilitate our
+business activities such as cloud service providers, including those that are beyond SAP's
+-
+open
+source software components, such as Log4j vulnerabilities
+Increased complexity, risk of exploitation, and potential vulnerabilities due to utilization of
+Identified or undetected cybersecurity defects and vulnerabilities
+A globally increasing number of threat actor attacks aimed at obtaining or violating Company data
+including personal data, as observed in recent prominent cases of cyberattacks where the use of
+ransomware was the preferred method of threat actors
+In addition, while we are continually taking steps to enhance our cybersecurity defenses, increased
+investments, coordination, and resources are required to achieve our objective of ensuring over time
+that our cybersecurity infrastructure meets or exceeds evolving industry standards. Achieving this
+objective will require continued effort and vigilance, including sustained investment of money and
+management resources to support the ongoing development and maintenance of systems that meet
+these standards. As a result, we are subject to risks and associated consequences in the following
+areas, among others:
+As a leading cloud company and service provider to some of the largest and best-known customers in
+the world, we are naturally a prominent target for cybersecurity attacks. We have observed increased
+threat activity to our products and systems, and we experience cybersecurity attacks of varying types
+and degrees on a regular basis. Should we become aware of unauthorized access to our systems, we
+have action plans in place intended to identify and remediate the source and impact of the incursions,
+and steps to comply with related necessary notification and disclosure obligations. To date, we have
+not experienced any incursions resulting in a material adverse effect on our business. However, we
+may be subject to incursions which we are not aware.
+Information
+Additional
+- Cybersecurity threats for SAP and customers due to delayed or insufficient responses to identified
+cybersecurity issues attributable to complexity, interdependencies, or other factors
+Further Information on
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+SAP continues to grow organically and through acquisitions, delivers a full portfolio of solutions via the
+cloud, hosts or manages elements of our customers' businesses in the cloud, processes large
+amounts of data, and offers more mobile solutions to users. While SAP executes each of these areas
+either directly or through partners and other third parties, we face a progressively more complex and
+threatening cybersecurity environment. The severity of the challenges posed by this cybersecurity
+environment is amplified due to the increasingly sophisticated and malicious global cybersecurity
+threat landscape in which we operate. This includes third-party data, products, and services that we
+incorporate into SAP products and services, and the continually evolving and increasingly advanced
+techniques employed by threat actors targeting IT products and businesses in general. Such threat
+actors include, but are not limited to, highly sophisticated parties such as nation-states and organized
+criminal syndicates.
+Cybersecurity and Security: A cybersecurity attack or breach, or cybersecurity vulnerabilities
+in our products, infrastructure, or services, or economic espionage could result in significant
+legal and financial exposure.
+We cannot exclude the possibility that if risks of this risk factor were to occur, the impact could be
+major. We estimate the probability of occurrence to be likely. We classify this risk factor as medium.
+We provide customer guidance and support as required during partner dissolutions.
+We maintain a certification process for third-party solutions to ensure consistent high-quality and
+seamless integration.
+We included selected services in the free tier model as part of our Pay-as-You-Go for SAP BTP
+agreement.
+We introduced a partner delivery quality framework to monitor and safeguard the success of
+partner-led projects while ensuring that SAP quality criteria are met.
+We enable and encourage partners to leverage SAP technology, by providing guidance about
+business opportunities, architecture, and technology, such as through demo solutions, to enable
+partners to lead business value discussions on cloud and on-premise solutions with customers.
+We offer training opportunities on a wide range of resources for our partners and provide
+safeguarding services to customers and partners.
+Consolidated Financial
+Statements IFRS
+Provision of security certifications (such as ISO/IEC 27001), security white papers, product
+documentation, and reports from independent auditors and certification bodies to our customers
+Review/audit of our certifications and representations to customers concerning our cybersecurity
+infrastructure and protocols in alignment with contractual agreements
+-
+Insufficient or ineffective asset management potentially endangering secure operations
+-
+-
+-
+SAP has established measures intended to address the described risks and adverse effects, such as:
+Software security development lifecycle as a mandatory, integral part of our software development
+process, including checks on open source component coverage and enhanced development tools
+with integrated security features and functionalities
+-
+In response to the increasing number of cybersecurity attacks, and because we anticipate threat actor
+techniques to continue to evolve in our cybersecurity landscape, SAP has expended significant
+resources to enhance its cybersecurity program, has increased the Executive Board and Supervisory
+Board's governance of and involvement in cybersecurity matters, and continues to investigate and
+remediate vulnerabilities.
+Any of these events could have a material adverse effect on our customers, partners, financial
+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.
+Inaccurate or incomplete third-party or SAP audit results, certifications, or representations
+concerning the adequacy of our cybersecurity infrastructure and protocols
+Failure to maintain SAP's cybersecurity infrastructure and protocols in connection with the
+divestiture of businesses and network systems from SAP, or failure to achieve a holistic level of
+required transparency reflecting current states
+Failure to integrate SAP's cybersecurity infrastructure and protocols with other network systems
+obtained through acquisition, including addressing, identifying, and remediating cybersecurity
+defects and vulnerabilities and related breaches in acquired systems
+Material costs and time associated with enhancing our cybersecurity infrastructure, which may
+impact the ongoing pace of development and delivery of our products and services and our
+financial performance
+Insufficient investment, coordination, or resources to achieve our objective of ensuring over time
+that our cybersecurity infrastructure meets or exceeds evolving industry standards, and defending
+against the ever-evolving and emerging threat landscape
+• Inability to anticipate attacks or implement sufficient mitigating measures
+Challenges in effectively synchronizing cybersecurity processes across our various lines of business
+in a heterogeneous environment
+Material costs to attempt to detect, prevent, and mitigate any successful attacks, including, but not
+limited to the costs of third-party legal and cybersecurity experts and consultants, insurance costs,
+additional personnel and technologies, organizational changes, and incentives to customers and
+partners to compensate for any losses or retain their business
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+148/338
+147/338
+Breach of cybersecurity measures due to, for example, but not limited to, error or wrongdoing by
+employees or affiliated persons, system vulnerabilities, code defects, malfunctions, or attempts of
+third parties to fraudulently induce employees, users, partners, or customers to gain access to our
+systems, data, or customers' data
+Operational disruptions due to an increasing number of destructive malwares, ransomware, or
+other cybersecurity attacks
+Customer systems or systems operated by SAP being compromised by vulnerabilities due to threat
+actor exploitation
+149/338
+Additional
+Further Information on
+Sustainability
+Deviations from standard terms and conditions, which may lead to an increased risk exposure
+Information
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+146/338
+145/338
+Failure of partners to develop sufficient innovative solutions and content on our platforms or to
+provide high-quality products or services to meet customer expectations
+Products or services model being less strategic or attractive compared to our competition
+Failure to establish and enable a network of qualified and fully committed partners supporting our
+scalability needs and speed and impact in market reach
+We are subject to risks and associated consequences in the following areas, among others:
+An open and vibrant partner ecosystem is a fundamental pillar of our success and growth strategy. We
+have entered into partnership agreements that drive co-innovation on our platforms, profitably expand
+our routes to market to optimize market coverage, optimize cloud delivery, and provide high-quality
+services capacity in all market segments. Partners play a key role in driving market adoption of our
+entire solutions portfolio, by co-innovating on our platforms, embedding our technology, and reselling
+or implementing our software.
+We cannot exclude the possibility that if risks of this risk factor were to occur, the impact could be
+major. We estimate the probability of occurrence to be unlikely. We classify this risk factor as medium.
+Partner Ecosystem: If we are unable to scale, maintain, and enhance an effective partner
+ecosystem, revenue might not increase as expected.
+Exposure approval through an RDOA
+Early warning through executive risk committees on regional and global level
+Ongoing development of new commercial models to address customer flexibility needs
+Simplification, review, alignment, approval, and enforcement of contractual standard terms and
+conditions while conducting legal and operational assessments in case deviations are required
+A policy that clearly outlines communication rules on future functionalities as well as legal
+requirements for commitments to customers
+We cannot exclude the possibility that if risks of this risk factor were to occur, the impact could be
+business-critical. We estimate the probability of occurrence to be likely. We classify this risk factor as
+high. For more information, see the Security, Data Protection, and Privacy section.
+An escalation management process
+Adjustment of delivery models to support customers
+Joint innovations with partners or customers
+Any of these events could have an adverse effect on our business, financial position, profit, and cash
+flows.
+SAP has established measures intended to address and mitigate the described risks and adverse
+effects, such as:
+-
+-
+―
+Statements on solution developments might be misperceived by customers as commitments on
+future software functionalities
+-
+Risk management processes that are integrated into SAP's project management methods intended
+to safeguard implementations through coordinated risk and quality management programs
+Scope reviews and monitoring that are adapted as required as part of a clearly defined change
+request process to support successful implementations together with respective project
+governance and steering
+Recommended project approaches, guidance, and best practices for customers to optimize their IT
+solutions in a non-disruptive manner
+Adequate financial planning provisions for the remaining risks
+-
+Continuous project monitoring and controlling activities
+157/338
+Despite ongoing uncertainties in the global economy and supply chain disruptions as well as the
+ongoing pandemic situation, the resurgence of the global demand is noticeable. SAP expects more
+companies will choose SAP to help them transform their businesses, build resilient supply chains, and
+become sustainable enterprises. For SAP, moving to the cloud is not an option anymore but a
+required step in business transformation for our customers. We saw this momentum reflected in the
+success of our RISE with SAP offering and are confident about further growth and even greater
+potential going forward across our complete portfolio. This is manifested in our accelerated cloud
+guidance for 2022. SAP is confident that its positive momentum will continue throughout 2022.
+Impact on SAP
+(H) IDC FutureScape: Worldwide Future of Digital Innovation 2022 Predictions, Doc #US47148621, Oct. 2021
+(G) IDC FutureScape: Worldwide IT Industry 2022 Predictions, Doc #US48312921, Oct. 2021
+(F) IDC FutureScape: Worldwide Cloud 2022 Predictions, Doc #US47241821, Oct. 2021
+(E) IDC FutureScape: Worldwide Digital Transformation 2022 Predictions, Doc #US47115521, Oct. 2021
+digital. By 2023, 90% of worldwide organizations will be prioritizing investments in digital tools to
+augment physical spaces and assets, and by 2024, 55% of all ICT investment will be linked to digital
+transformation," predicts IDC. (F) The software sector in particular will be impacted as "by 2024, the
+majority of legacy applications will receive some modernization investment, with cloud services used
+by 65% of the applications to extend functionality or replace inefficient code." IDC's rationale for the
+investments is "modernizing applications brings value to the business by increased competitiveness
+and the ability to outflank competitors.” As a result, IDC guides companies to “move proactively to
+modernize more critical applications where you can. Your competitors will be doing the same, and
+failure to invest can leave an organization in a disadvantaged competitive position."(H)
+Sources:
+Economic conditions clearly influence our business, financial position, profit, and cash flows. Should
+the global economy recover faster than is reflected in our plans today, our revenue and profit may
+exceed our current outlook and medium-term prospects. Our medium-term planning considers
+changes in market conditions as a result of the ongoing COVID-19 pandemic. Although we continue
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+(D) European Central Bank, Economic Bulletin, Issue 8/2021, Publication Date: January 13, 2022
+(https://www.ecb.europa.eu/pub/pdf/ecbu/eb202108.en.pdf)
+Opportunities from Economic Conditions
+To Our
+SAP
+€25.0 billion to €25.5 billion cloud and software revenue at constant currencies
+€11.55 billion to €11.85 billion cloud revenue at constant currencies (2021: €9.42 billion), up 23% to
+26% at constant currencies.
+For the full year 2022, SAP expects:
+For 2022, SAP expects its cloud growth to continue to accelerate. The pace and scale of SAP's cloud
+momentum places the Company well on track towards its mid-term ambition.
+Outlook 2022
+Revenue and Operating Profit Targets and Prospects (Non-IFRS)
+Financial Targets and Prospects
+158/338
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+Stakeholders
+Combined Group
+SAP Integrated Report 2021
+Additional
+To Our
+Stakeholders
+Source: International Monetary Fund (IMF), World Economic Outlook Update January 2022, Rising Caseloads, a Disrupted Recovery,
+and Higher Inflation (https://www.imf.org/-/media/Files/Publications/WEO/2022/Update/January/English/text.ashx), p. 6.
+SAP Integrated Report 2021
+4.1
+4.7
+-5.2
+4.0
+5.6
+-3.4
+3.7
+-6.9
+4.0
+4.3
+4.2
+-2.8
+3.5
+6.5
+-1.8
+3.8
+-1.7
+SAP
+6.8
+-4.5
+With regard to macroeconomic factors, IDC states that “organizations continue to navigate the
+disruptions, accelerations, and crosscurrents spurred by the COVID-19 pandemic and the changing
+economic conditions. By 2022, more than half the global economy will be based on or influenced by
+Sustainability has become a top priority for corporations, and IDC highlights that "decarbonization
+initiatives will be a key goal of digital transformations; fewer than 10% of organizations say they are
+not applicable or not implementing objectives to reduce carbon by the end of 2023." Therefore,
+"carbon accounting systems will rise up the priority list for systems implementation. The adage 'you
+can't manage what you can't measure' applies to carbon emissions as well," says IDC. (E) As a
+guidance, IDC proposes: “Establish the IT organization as the provider of the data management
+foundation that collects all sustainability data company-wide with the purpose of measuring progress
+against IT and general business sustainability contribution and efficacy across each factor."(G)
+Additionally, IDC observes a shift in vendor to customer relationships and predicts that "by 2023,
+traditional distribution models will crumble as 20% of businesses in some sectors use technology to
+go direct to customers, seeking to improve customer satisfaction and product development."(H)
+Furthermore, IDC predicts that "by 2022, organizations that allocate 50%+ of their software
+development projects to customer-facing initiatives will see revenue grow 15% faster compared with
+those that focus more on internal projects.” In addition, company sales portfolios will be impacted as
+"by 2026, 30% of software development teams will be focused on turning traditional products into
+outcomes as a service," states IDC. (G)
+"2022 might be the year the global economy becomes more digital than physical," says International
+Data Corporation (IDC), a U.S.-based market research firm. (E) “Cloud in all its permutations will
+continue to play ever greater, and even dominant, roles across the IT industry as enterprises pivot to a
+digital-first economy. Entire industries want to intelligently leverage data to their advantage and can do
+so because they have faster access to digital technologies built on a cloud foundation. Cloud is now
+firmly established as an essential element of a digital-first strategy, as organizations look to automate
+operations, deliver rich customer experiences, and launch new products and services, cloud has
+become the primary accelerator of innovation," says IDC. (F)
+Outlook for 2022 and Beyond
+The IT Market:
+(2021: €24.08 billion), up 4% to 6% at constant currencies.
+p = projection
+2.4
+China
+8.1
+2.3
+5.9
+7.2
+-0.9
+3.3
+1.6
+4.8
+€7.8 billion to €8.25 billion non-IFRS operating profit at constant currencies (2021: €8.23 billion), flat
+to down 5% at constant currencies.
+FY 2022
+Free cash flow above €4.5 billion (2021: €5.01 billion).
+160/338
+159/338
+We measure customer loyalty using the Customer Net Promoter Score (Customer NPS). We are
+targeting to increase the Customer NPS to a score of 11 to 15 in 2022 and to steadily increase the
+Customer NPS through 2025 (2021: 10).
+For 2022 through 2025, we aim to maintain employee engagement, measured by the Employee
+Engagement Index, at a high level between 84% and 86% (2021: 83%).
+In addition to our financial goals, we also focus on three non-financial targets: customer loyalty,
+employee engagement, and carbon impact.
+Non-Financial Goals 2022 and Ambitions for 2025
+In 2022, we intend to repay €900 million in Eurobonds, US$445 million in U.S. Private Placements,
+and €1.45 billion in bank loans. At the date of this report, debt repayments of around €4.3 billion until
+the end of 2023 are scheduled. The ratio of net debt as at December 31, 2021, divided by the total of
+operating profit (IFRS) plus depreciation and amortization was 0.24x, therefore, already below our
+2023 target of 0.5x.
+SAP
+In 2022, we expect a free cash flow of above €4.5 billion (compared to €5.0 billion in 2021),
+predominantly due to our expectation of flat to slightly declining operating profit. Since payouts for
+capital expenditures and leasing are expected on a level similar to the last three years, a separate
+outlook on operating cash flow is not provided. For 2025, we continue to expect around €8.0 billion in
+free cash flow.
+Goals for Liquidity and Finance
+Our planned investment expenditures for 2022 and 2023, other than for business combinations,
+consist primarily of the purchase of IT infrastructure and the construction activities described in the
+Assets (IFRS) section. We expect investments in IT infrastructure of approximately €500 million and in
+construction activities of approximately €300 million in 2022. In 2022, we expect total capital
+expenditures of approximately €850 million. In 2023, capital expenditures are expected to stay at a
+similar level as in 2022.
+Investment Goals
+Free cash flow of approximately €8 billion
+A significant expansion of the Company's more predictable revenue share to approximately 85%,
+reaching more than €30 billion
+A non-IFRS cloud gross margin of approximately 80%
+More than €11.5 billion non-IFRS operating profit
+As at December 31, 2021, we had net debt of €1.6 billion. We believe that our liquid assets combined
+with our undrawn credit facilities are sufficient to meet our operating financing needs in 2022 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.
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+SAP SE is the parent company of the SAP Group and earns most of its revenue from subscription
+fees, software license fees, and dividends paid by affiliates. Consequently, the opportunities described
+below also apply - directly or indirectly - to SAP SE.
+As far as opportunities are likely to occur, we have incorporated them into our business plans, our
+outlook for 2022, and our medium-term prospects outlined in this report. Therefore, the following
+section focuses on future trends or events that might result in an uplift of our outlook and medium-
+term prospects should they develop more positively than anticipated in our forecasts.
+Our customers choose SAP as a trusted partner for their digital business transformation. We have
+established a framework for opportunity management by evaluating and analyzing key areas such as
+current markets, external scenarios, economic conditions, and technological trends. We have also
+researched customer and product segmentation, growth drivers, and industry-specific factors for
+success. These combined insights play a key role for the Executive Board in the development of our
+market strategies. Our shareholder value relies heavily upon a fine balance of risk mitigation and
+value-driven opportunities. Therefore, our governance model helps ensure that decisions are based
+on return, investment required, and risk mitigation.
+Opportunities
+Among the assumptions underlying this outlook are those presented above concerning the economy
+and our expectations for the performance of the SAP Group.
+The outlook for the SAP Group in respect to liquidity, finance, investment, and dividend are equally
+applicable to SAP SE.
+We expect that SAP SE will continue to receive investment income in the form of profit transfers and
+dividends from its subsidiaries. The growth we expect for the SAP Group should have a positive effect
+on this investment income.
+Based on the outlook for cloud and software revenue for the SAP Group at constant currency in non-
+IFRS in 2022, we expect product revenue for SAP SE in 2022 to increase slightly compared to 2021.
+Assuming there are no significant effects from acquisitions or other unforeseeable occurrences in
+2022, we also expect the operating profit of SAP SE to decrease moderately compared to 2021.
+The financial ambitions of the SAP Group for the years 2023 to 2025 provide for future growth of
+revenue and profit. We expect that such growth will also result in revenue and profit growth for
+SAP SE to the same degree.
+The primary source of revenue for SAP SE is the license fees it charges subsidiaries for the right to
+market and maintain SAP software solutions. Consequently, the performance of SAP SE in operating
+terms is closely tied to the cloud and the software revenue of the SAP Group.
+Outlook for SAP SE
+In preparing our outlook and prospects, we have taken into account all events known to us at the time
+we prepared this report that could influence SAP's business going forward.
+Premises on Which Our Outlook and Prospects Are Based
+We aim to reach net greenhouse gas emissions in our operations of 70 kilotons (kt) in 2022
+(2021: 110 kt) with a steady decrease further on, reaching 0 kt by 2023 and maintaining net carbon
+emissions in our own operations of 0 kt from that point onward. Further, SAP has also committed to
+achieve net-zero along our value chain in line with a 1.5 degrees Celsius future in 2030.
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+More than €36 billion total revenue
+The share of more predictable revenue (defined as the total of cloud revenue and software support
+revenue) is expected to reach approximately 78% (2021: 75%).
+More than €22 billion cloud revenue
+SAP expects to steadily grow its more predictable revenue while increasing operating profit. We
+expect to achieve double-digit growth of non-IFRS operating profit from 2023 onwards followed by
+double-digit growth of total revenue as we approach 2025. Our strategic objectives are focused
+primarily on our main financial and non-financial objectives: growth, profitability, customer loyalty, and
+employee engagement.
+Restructuring
+Share-based payment expenses
+Acquisition-related charges
+€ millions
+The following table shows the estimates of the items that represent the differences between our non-
+IFRS financial measures and our IFRS financial measures.
++1pp to +3pp
+Operating profit growth (non-IFRS)
+Proposed Dividend
++1pp to +3pp
++2pp to +4pp
+Cloud revenue growth
+2.7
+In percentage points (pp)
+While SAP's full year 2022 business outlook is at constant currencies, actual currency reported figures
+are expected to be impacted by currency exchange rate fluctuations as the Company progresses
+through the year. See the table below for the full year 2022 expected currency impacts. These
+currency expectations for the full year 2022 are based on the December 2021 level.
+To achieve a year-end current cloud backlog growth rate similar to 2021.
+A full-year effective tax rate (IFRS) of 25.0% to 28.0% (2021: 21.5%) and an effective tax rate (non-
+IFRS) of 22.0% to 25.0% (2021: 20.0%), strongly depending on the development of Sapphire
+Ventures' investments.
+Cloud and software revenue growth
+Estimated Amounts for Actual Amounts for
+2022
+2021
+570-670
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+In this section, all numbers (except cloud revenue and total revenue) are based exclusively on non-
+IFRS measures.
+Medium-Term Prospects
+In 2022, we intend to pay a dividend of €2.45 per share (subject to shareholder approval at the
+Annual General Shareholders Meeting in May 2022). This dividend includes a special payment of
+€0.50 to celebrate SAP's 50th anniversary. For more information, see the Financial Performance:
+Review and Analysis section.
+157
+20-40
+2,794
+3,000-3,300
+623
+SAP confidently reiterates its mid-term ambition published on October 25, 2020. By 2025, SAP
+continues to expect:
+-4.6
+3.9
+5.2
+Explore future trends as well as the latest technologies, for example through our network of
+innovation centers as part of the Technology & Innovation Board area, and adapt these to the
+market if there is a clear business opportunity for SAP and value to our customers
+Develop innovative technologies and solutions, such as industry cloud solutions, SAP Business
+Network, and business process intelligence offerings supported by SAP BTP
+Focus all investment decisions related to innovative technologies and solutions on portfolio
+compatibility and readiness as well as high customer value
+Continuously benchmark, match, and challenge the entire portfolio at a corporate, portfolio
+category, and individual business case level
+Align our organization, processes, products, delivery, commercial and consumption models, and
+services to changing markets and customer and partner demands
+SAP has established measures intended to address and mitigate the described risks and adverse
+effects, such as:
+Any of these events could have a material adverse effect on our business, financial position, profit,
+and cash flows.
+Conduct wide-ranging market and technology analyses and research or co-innovation projects,
+also in close cooperation with our customers and partners, to remain competitive
+- Inability to drive growth of references through customer use cases and demo systems
+Our product and technology strategy might not be successful, or our customers and partners might
+not adopt our technology platforms, applications, or cloud services quickly enough or they might
+consider other competing solutions in the market, or our strategy might not match customers'
+expectations and needs, specifically in the context of expanding the product portfolio into
+additional markets.
+Lower level of adoption of our new solutions, technologies, business models, and flexible
+consumption models, or no adoption at all
+Uncertainties regarding new SAP solutions, technologies, and business models as well as delivery
+and consumption models, which might lead customers to wait for proofs of concepts or holistic
+integration scenarios through reference customers or more mature versions
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Increasing competition from open source software initiatives or comparable models in which
+competitors might provide software and intellectual property free of charge or at terms and
+conditions unfavorable for SAP
+Combined Group
+Make strategic acquisitions in white spots of our portfolio
+Consolidated Risk Profile
+As for the APJ region, the ECB expects economic activity in Japan to rebound solidly in early 2022. In
+China, the government introduced policy actions in 2021 that should manage the slowdown and
+avoid a sharper contraction in 2022, ensuring energy security and supporting the property sector. A
+stronger slowdown in the Chinese real estate sector than currently expected by the ECB would
+dampen the economic outlook not only for China, but also worldwide.
+In the Americas region, the subdued economic growth seen in the United States in the latter half of
+the previous year might extend into the first quarter of 2022. The ECB suggests that once the current
+supply bottlenecks dissipate, the United States should return to growth, supported by a fiscal
+package. However, inflationary pressures will probably remain high at the beginning of 2022. In Brazil,
+double-digit inflation is likely to continue, but decline in the course of 2022 and 2023.
+Concerning the EMEA region, economic activity in the euro area could exceed its pre-pandemic level
+already in the first quarter of 2022 and pick up further in the course of the year, driven by a robust
+domestic demand, an improving labor market, and ongoing policy support. Thereafter, the ECB
+expects an increasingly self-sustaining growth, as it believes the basis for an ongoing recovery in the
+euro area is intact. In central and eastern Europe, rising energy prices might put additional pressure on
+inflation over the coming months, peaking in the course of 2022 and declining gradually afterwards.
+Correspondingly, global demand for oil and gas and the associated positive terms of trade should
+support economic activity in Russia, but at the cost of high inflation.
+Supply bottlenecks, which caused disruption in 2021, will start easing from the second quarter of
+2022 and unwind fully by 2023, predicts the European Central Bank (ECB) in its current Economic
+Bulletin. (D) The ECB therefore maintains its previous optimistic projections for the full year 2022 and
+has even raised them for 2023. Persisting shortages, high commodity prices, and the emergence of
+the Omicron variant of the coronavirus might initially weigh on near-term growth prospects, though.
+According to the ECB, the future course of the pandemic remains the key uncertainty when it comes
+to projections for the global economy.
+Future Trends in the Global Economy
+Expected Developments and
+Opportunities
+Additional
+Information
+We cannot exclude the possibility that if risks of this risk factor were to occur, the impact could be
+major. We estimate the probability of occurrence to be unlikely. We classify this risk factor as medium.
+Further Information on
+Sustainability
+Management Report
+Stakeholders
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+In our view, considering their impact level and likelihood of occurrence, the risks described in our
+aggregated risk report do not individually or cumulatively threaten our ability to continue as a going
+concern. While individual risks and assessments may have changed during fiscal 2021, the overall
+situation did not change materially compared to the prior year. Management remains confident that
+the Group's earnings strength forms a solid basis for our future business development and provides
+the necessary resources to pursue the opportunities available to the Group. Based on our structured
+processes for early risk identification, we are confident that we can continue to counter the challenges
+arising from the risks in our current risk profile in 2022.
+Consolidated Financial
+Statements IFRS
+155/338
+To Our
+Stakeholders
+SAP
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+Unfulfilled needs of the acquired company's customers or partners
+Failure to successfully integrate acquired entities, operations, cultures, or languages, all within the
+constraints of applicable local laws
+Consolidated Financial
+Statements IFRS
+Failure to integrate acquired technologies or solutions successfully and profitably into SAP's
+solution portfolio and strategy
+To expand our business, we acquire businesses, products, and technologies, and we expect to
+continue doing so in the future. Over time, some of these acquisitions have increased in size and in
+strategic importance for SAP. Management negotiation of potential acquisitions and the integration of
+acquired businesses, products, or technologies demands time, focus, and resources of both
+management and the workforce, and exposes us to unpredictable operational difficulties.
+We are subject to risks and associated consequences in the following areas, among others:
+Mergers and Acquisitions: We might not acquire and integrate companies effectively or
+successfully.
+We cannot exclude the possibility that if risks of this risk factor were to occur, the impact could be
+business-critical. We estimate the probability of occurrence to be unlikely. We classify this risk factor
+as medium.
+Continue to move SAP HANA Enterprise Cloud towards a full-stack offering and increase the share
+of high-value cloud application services to further improve the margin
+Enable and encourage partners to leverage SAP technology by providing guidance about business
+opportunities, architecture, and technology, as well as a comprehensive certification program
+designed to ensure that relevant third-party solutions are of consistent high quality
+Deliver standard software and product packages that are fast, easy to install, and highly
+automated, as well as financially attractive financing and subscription models
+Enable our portfolio for hyperscalers to extend customer reach and further meet customer
+expectations
+Incorrect information or assumptions during the due diligence process for the acquisition, including
+information or assumptions related to the business environment or business and licensing models
+SAP Integrated Report 2021
+Further Information on
+Sustainability
+Information
+154/338
+153/338
+Inability to anticipate and develop technological improvements or succeed in adapting SAP
+products, services, processes, and business models to technological change, changing regulatory
+requirements, emerging industry standards, and changing requirements of our customers and
+partners (especially with innovations such as industry cloud, SAP Business Network, and business
+process intelligence offerings supported by SAP BTP) to strengthen the Intelligent Enterprise
+strategy
+Inability to develop and sell new cloud products spanning various organizations on time and in line
+with market demands due to complexity in heterogeneous technical environments
+Inability to bring new business models, solutions, solution enhancements, intelligent technologies,
+integrations and interfaces or services to market before our competitors or at equally favorable
+terms
+We cannot exclude the possibility that if risks of this risk factor were to occur, the impact could be
+major. We estimate the probability of occurrence to be unlikely. We classify this risk factor as medium.
+Innovation: We might not be able to compete effectively if we strategize our solution
+portfolio ineffectively or if we are unable to keep up with rapid technological and product
+innovations, enhancements, new business models, and changing market expectations.
+Our future success depends on our ability to keep pace with 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 be successful, we are required to adapt our products and our go-to-
+market approach to a cloud-based delivery and consumption model to satisfy increasing customer
+demand and to ensure an appropriate level of adoption, customer satisfaction, and retention.
+We are subject to risks and associated consequences in the following areas, among others:
+Process, risk, and control analyses accompanied by subsequent integration into SAP's processes
+and control framework, and supported by mitigations as required by any specific circumstances to
+subsequently increase adherence to SAP's standards and policies
+Additional
+A standardized methodology for detailed integration planning, which is conducted by a dedicated
+integration team
+SAP has established measures intended to address and mitigate risks and adverse effects, such as:
+Technical, operational, financial, and legal due diligence on the company or assets to be acquired
+A holistic evaluation of material transaction and integration risks
+Any of these events could have a material adverse effect on our business, brand, competitive or
+financial position, profit, and cash flows.
+Non-compliance of the acquired company with regulatory requirements, for example, accounting
+standards, export control laws, data privacy, and trade sanctions, for which SAP, through the
+acquisition, assumes responsibility and liability, including potential fines and the obligation to
+remedy the non-compliance
+Impairment of goodwill and other intangible assets acquired in business combinations
+Debt incurrence or significant unexpected cash expenditures
+Incompatible practices or policies regarding compliance requirements
+Failure in implementing, restoring, or maintaining internal controls, disclosure controls and
+procedures, and policies within acquired companies
+Identification, implementation, and tracking of risk mitigation measures for material transactions or
+integration risks
+3.9
+156/338
+SAP Integrated Report 2021
+Euro Area
+Regions (according to IMF taxonomy)
+Emerging Markets and Developing Economies
+Advanced Economies
+World
+%
+Economic Trends - GDP Growth Year Over Year
+Germany
+Additional
+Information
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Combined Group
+Management Report
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Emerging and Developing Europe
+Sub-Saharan Africa
+-6.4
+4.8
+6.5
+-2.0
+5.0
+-4.5
+4.4
+Middle East and Central Asia
+5.9
+2022p
+2021p
+Emerging and Developing Asia
+Japan
+Latin America and the Caribbean
+Canada
+United States
+-3.1
+SAP
+Further Information on
+Sustainability
+Information
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+SAP Integrated Report 2021
+-
+Enable and support our customers in their transition path from on-premise to cloud, for example
+through the cloud extension policy, our SAP S/4HANA Movement program (a cross-departmental
+initiative to promote the migration of our existing ERP customers to an intelligent enterprise), our
+scalable SAP S/4HANA Cloud, private edition, or the SAP HANA Enterprise Cloud advanced
+edition offerings
+Balance the allocation of our strategic investments by evolving and protecting our core businesses
+and simultaneously developing new solutions, technologies, and business models for markets,
+such as those in analytics, applications, and database and technology
+Engage with our customers and offer a broader range of services to support and drive the digital
+transformation for our customers, for example with our RISE with SAP package and our premium
+service offerings
+Place strong focus on providing our cloud services efficiently and to customer expectations,
+including service provisioning, quality, security, and data protection and privacy
+Continue to drive the solution integration and harmonization of data models to support integrated
+business processes, applications, and technology while focusing on resilience, profitability, and
+sustainability
+Stakeholders
+To Our
+Demonstrate the benefits of our solution and services portfolio through end-to-end integration
+scenarios, consistent and compelling user interfaces, intelligent technologies, customer references,
+and success stories
+Additional
+SAP
+151/338
+We cannot exclude the possibility that if risks of this risk factor were to occur, the impact could be
+major. We estimate the probability of occurrence to be likely. We classify this risk factor as medium.
+Strategic Risks
+Market Share and Profit: Our market share and profit could decline due to increased
+competition, market consolidation, technological innovation, and new business models in
+the software industry.
+The market for cloud computing is increasingly competitive and is exhibiting strong growth relative to
+the market for on-premise solutions. To maintain or improve our operating results in the cloud
+business, it is important that we not only attract new customers but also that our existing customers
+renew their agreements with us when the initial contract term expires and purchase additional
+modules or additional capacity. Additionally, we need to bring innovations to the market in line with
+demands of our ecosystem and ahead of our competitors, such as solutions to support new data-
+driven applications and the extension of the intelligent suite based on SAP BTP. Innovative
+applications supporting the Intelligent Enterprise strategy include, among others, SAP Customer
+Experience solutions, SAP S/4HANA, and SAP BTP, as well as technologies such as IoT, ML, intelligent
+robotic process automation (which automates rule-based, repetitive tasks), digital assistants including
+voice recognition and interaction, and blockchain.
+We are subject to risks and associated consequences in the following areas, among others:
+Inability to deliver fully suitable solution and transformation services to our customers on the cloud
+transformation journey, both in cloud-only and hybrid scenarios
+· Inability to successfully execute on our hyperscaler strategy
+152/338
+Adverse, near-term revenue effects due to increasing cloud business and conversions from on-
+premise licenses to cloud subscriptions from existing SAP customers, which could have an adverse
+effect on related maintenance and services revenue
+Customers and partners reluctant or unwilling to migrate and adapt to the cloud, or customers
+considering cloud offerings from our competitors
+Existing customers deciding to cancel or not renew their contracts (such as maintenance or cloud
+subscriptions) or not buy additional products and services
+Strategic alliances among competitors or their growth-related efficiency gains in the cloud
+business, which could lead to significantly increased competition in the market with regard to
+pricing and the ability to integrate solutions
+Price pressure, cost increases, and loss of market share through traditional, new, and especially
+cooperating competitors and hyperscalers
+- Inability to achieve the planned margin increase in time as planned
+Any of these events could have a material adverse effect on our business, brand, competitive or
+financial position, profit, and cash flows.
+SAP has established measures intended to address and mitigate the described risks and adverse
+effects, such as:
+Share our overall long-term cloud strategy and our integration road map with our customers, and
+continuously implement improvements to enhance our cloud solutions through our Intelligent
+Enterprise strategy, also covering the integration of experiential and operational data
+Insufficient solution and service adoption together with increased complexity, as well as failures
+during the execution of our Intelligent Enterprise strategy in the context of our portfolio for solutions
+and services, which could lead to a loss of SAP's position as a leading cloud company and
+subsequently to reduced customer adoption
+2020
+1,757
+-1,012
+Combined Group
+Management Report
+(E.2)
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+Management Report
+Stakeholders
+To Our
+SAP
+SAP Integrated Report 2021
+166/338
+The accompanying Notes are an integral part of these Consolidated Financial Statements.
+50
+138
+172
+Attributable to non-controlling interests
+3,804
+2,393
+8,058
+Attributable to owners of parent
+3,854
+2,531
+8,230
+Total comprehensive income
+483
+-2,752
+2,853
+Additional
+Information
+Other comprehensive income, net of tax
+Consolidated Statements of Financial Position of SAP Group as at December 31
+Notes
+210
+403
+1,321
+1,633
+(A.3), (G.1)
+6,593
+6,352
+(A.2)
+Goodwill
+Total current assets
+Tax assets
+Other non-financial assets
+Trade and other receivables
+1,635
+2,758
+(D.6), (E.3)
+Other financial assets
+5,311
+8,898
+(E.3)
+Cash and cash equivalents
+2020
+2021
+€ millions
+20,044
+536
+2,819
+Exchange differences, net of tax
+0
+1
+-9
+Income taxes relating to exchange differences on translation
+537
+-2,793
+2,855
+0
+0
+30
+537
+-2,793
+2,825
+Exchange differences, before tax
+Reclassification adjustments on exchange differences on translation, before tax
+Gains (losses) on exchange differences on translation, before tax
+-52
+30
+34
+Other comprehensive income for items that will not be reclassified to profit or loss, net of tax
+Items that will be reclassified subsequently to profit or loss
+-52
+30
+(E.2)
+-2,782
+2,846
+537
+Other comprehensive income for items that will be reclassified to profit or loss, net of tax
+-1
+10
+-26
+(E.2)
+Cash flow hedges/cost of hedging, net of tax
+0
+-4
+9
+Income taxes relating to cash flow hedges/cost of hedging
+-2
+14
+-35
+(F.1)
+Cash flow hedges/cost of hedging, before tax
+22
+-6
+4
+Reclassification adjustments on cash flow hedges/cost of hedging, before tax
+-24
+20
+-39
+Gains (losses) on cash flow hedges/cost of hedging, before tax
+-2,792
+34
+15,069
+31,090
+12,842
+16,136
+3,996
+4,431
+73
+89
+(A.4), (B.4), (B.5), (B.6)
+(A.1)
+4,643
+5,203
+(B.3), (B.5), (G.2)
+2,348
+4,528
+(E.3), (D.5)
+414
+304
+1,367
+1,580
+The accompanying Notes are an integral part of these Consolidated Financial Statements.
+Total equity and liabilities
+Total equity
+Non-controlling interests
+Equity attributable to owners of parent
+Treasury shares
+122
+Other components of equity
+98
+667
+545
+1,918
+1,229
+1,229
+28,537
+29,646
+15,696
+13,510
+36
+13
+(A.1)
+158
+291
+(C.5)
+362
+355
+(A.4), (B.4), (B.5), (B.6)
+770
+860
+(B.3), (B.5), (G.2)
+13,605
+11,042
+(E.3), (D.5)
+827
+(D.2)
+Retained earnings
+Issued capital
+(A.3), (G.1)
+137
+147
+(A.2)
+Total assets
+Total non-current assets
+Deferred tax assets
+Tax assets
+Other non-financial assets
+Trade and other receivables
+3,512
+6,275
+(D.6), (E.3)
+Other financial assets
+5,041
+4,977
+(D.4), (D.8)
+Property, plant, and equipment
+3,784
+3,966
+(D.3)
+Intangible assets
+27,538
+2,628
+Share premium
+1,926
+271
+Total liabilities
+Total non-current liabilities
+Contract liabilities
+Deferred tax liabilities
+Provisions
+Other non-financial liabilities
+Financial liabilities
+Tax liabilities
+Trade and other payables
+Total current liabilities
+Contract liabilities
+Provisions
+Other non-financial liabilities
+Financial liabilities
+Tax liabilities
+Trade and other payables
+58,464
+71,169
+43,395
+51,125
+1,188
+1,779
+(C.5)
+263
+226
+Remeasurements on defined benefit pension plans, net of tax
+-9
+23,012
+23,228
+24,078
+16,080
+15,148
+14,660
+11,547
+11,506
+11,412
+Total revenue
+Services
+Cloud and software
+Software licenses and support
+Software support
+4,533
+3,642
+3,248
+Software licenses
+6,933
+8,080
+9,418
+Cloud
+2019
+3,764
+2020
+4,110
+(A.1), (C.2)
+Income tax expense
+Profit before tax
+Financial income, net
+Finance costs
+Finance income
+Other non-operating income/expense, net
+Operating profit
+Total operating expenses
+(B.6)
+Other operating income/expense, net
+Restructuring
+General and administration
+Sales and marketing
+Research and development
+Gross profit
+Total cost of revenue
+Cost of services
+Cost of cloud and software
+Cost of software licenses and support
+Cost of cloud
+27,553
+27,338
+27,842
+4,541
+Profit after tax
+2021
+€ millions, unless otherwise stated
+(G.4)
+252
+Other Litigation, Claims, and Legal Contingencies...
+(G.3)
+252
+Other Tax Liabilities
+(G.2)
+252
+Prepaid Expenses and Other Tax Assets
+(G.1)
+252
+Section G - Other Disclosures
+246
+.234
+(F.2) Fair Value Disclosures on Financial Instruments
+Financial Risk Factors and Risk Management.
+(F.1)
+234
+Section F - Management of Financial Risk Factors
+228
+(E.3) Liquidity
+226
+Total Equity..
+Board of Directors......
+Notes
+.255
+Executive and Supervisory Board Compensation........
+■lil Consolidated Income Statements of SAP Group for the Years Ended December 31
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+-3,072
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+275
+Management's Annual Report on Internal Control over Financial Reporting
+in the Consolidated Financial Statements
+273
+(G.10) German Code of Corporate Governance
+262
+(G.9) Scope of Consolidation, Subsidiaries and Other Equity Investments
+261
+Events After the Reporting Period..
+(G.8)
+261
+(G.7) Principal Accountant Fees and Services
+260
+Related Party Transactions Other Than Board Compensation.
+(G.6)
+.259
+(G.5)
+5
+Attributable to owners of parent
+-3,105
+4.35
+4.46
+(C.6)
+Earnings per share, diluted (in €)
+2.78
+4.35
+4.46
+(C.6)
+Earnings per share, basic (in €)
+50
+138
+121
+3,321
+5,145
+5,256
+3,370
+5,283
+5,376
+-1,226
+-1,938
+-1,471
+(C.5)
+4,596
+2.78
+7,220
+The accompanying Notes are an integral part of these Consolidated Financial Statements.
+SAP
+-9
+Income taxes relating to remeasurements on defined benefit pension plans
+-57
+39
+43
+Remeasurements on defined benefit pension plans, before tax
+Items that will not be reclassified to profit or loss
+3,370
+5,283
+5,376
+2019
+2020
+2021
+Notes
+Il Profit after tax
+€ millions
+Consolidated Statements of Comprehensive Income of SAP Group for the Years Ended December 31
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+Management Report
+Stakeholders
+To Our
+SAP Integrated Report 2021
+165/338
+Attributable to non-controlling interests
+6,847
+198
+-7,693
+-7,106
+-7,505
+-4,292
+-4,454
+-5,190
+19,199
+19,453
+19,897
+-8,355
+-7,886
+-7,946
+-3,662
+-3,178
+-2,916
+-4,692
+-4,707
+-5,030
+-2,159
+-2,008
+-1,925
+-2,534
+-2,699
+-2,431
+(C.2)
+-1,356
+-157
+776
+2,174
+(C.4)
+-589
+-697
+-949
+787
+1,473
+3,123
+-74
+-179
+17
+(C.3)
+4,473
+6,623
+-23,081
+-20,715
+-23,186
+4,656
+18
+84
+43
+-1,130
+3
+-1,629
+-3,072
+-29
+29,716
+(IN.1) Basis for Preparation
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Notes
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+170/338
+169/338
+The accompanying Notes are an integral part of these Consolidated Financial Statements.
+5,314
+5,311
+8,898
+(E.3)
+Cash and cash equivalents at the end of the period
+8,627
+5,314
+5,311
+(E.3)
+Cash and cash equivalents at the beginning of the period
+-3,313
+-4
+3,587
+Net decrease/increase in cash and cash equivalents
+110
+-214
+General Information
+The registered domicile of SAP SE is in Walldorf, Germany (Commercial Register of the Lower Court of
+Mannheim HRB 719915). The Consolidated Financial Statements for 2021 of SAP SE and its
+subsidiaries (collectively, “we,” “us,” “our,” “SAP,” “Group," and "Company") have been prepared in
+accordance with International Financial Reporting Standards (IFRS).
+We have applied all IFRS standards and interpretations that were effective on and endorsed by the
+European Union (EU) as at December 31, 2021. There were no standards or interpretations as at
+December 31, 2021, impacting our Consolidated Financial Statements for the years ended
+December 31, 2021, 2020, and 2019, that were effective but not yet endorsed. Therefore, our
+Consolidated Financial Statements comply with both, IFRS as issued by the International Accounting
+Standards Board (IASB) and IFRS as endorsed by the EU.
+Our Executive Board approved the Consolidated Financial Statements on February 23, 2022, for
+submission to our Supervisory Board which approved the Consolidated Financial Statements on the
+same day.
+Information
+(D.3) Intangible Assets...
+(D.4) Property, Plant, and Equipment.....
+219
+221
+(D.5)
+Leases
+.222
+(D.6)
+Equity Investments
+.223
+(D.7)
+Non-Current Assets by Region........
+225
+484
+(D.8)
+225
+Section E- Capital Structure, Financing, and Liquidity
+226
+(E.1)
+Capital Structure Management.
+For easier identification of our accounting policies, judgments, and estimates, the respective
+disclosures are marked with the symbol and highlighted with a light gray box. They focus on the
+accounting choices made within the framework of the prevailing IFRS and refrain from repeating the
+underlying promulgated IFRS guidance, unless we consider it particularly important to the
+understanding of a Note's content.
+To ease the understanding of our financial statements, we present the accounting policies,
+management judgments, and sources of estimation uncertainty (hereafter: accounting policies,
+judgments, and estimates) on a given subject together with other disclosures related to the same
+subject in the Note that deals with this subject. Accounting policies, judgments, and estimates that do
+not relate to a specific subject are presented in the following section.
+How We Present Our Accounting Policies, Judgments, and Estimates
+Accounting Policies, Management Judgments, and Sources of Estimation
+Uncertainty
+Consolidated Income Statements
+or our Consolidated Statements of Financial Position are marked with the symbols
+respectively.
+and 44,
+Amounts disclosed in the Notes that are taken directly from our
+(€ millions) except where otherwise 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.
+All amounts included in the Consolidated Financial Statements are reported in millions of euros
+Purchase Obligations...
+Additional
+Effect of foreign currency rates on cash and cash equivalents
+-3,997
+-1,790
+-1,864
+-2,182
+(E.2)
+Dividends paid
+-7,021
+-2,986
+778
+735
+3,229
+-3,063
+Net cash flows from investing activities
+Proceeds from sales of equity or debt instruments of other entities
+-900
+-2,535
+-4,368
+Purchase of equity or debt instruments of other entities
+71
+88
+91
+Proceeds from sales of intangible assets or property, plant, and equipment
+-817
+-816
+-800
+Purchase of intangible assets and property, plant, and equipment
+61
+203
+-72
+Cash flows from sale of subsidiaries or businesses
+-6,215
+Dividends paid on non-controlling interests
+-54
+-2
+-17
+-56
+Net cash flows from financing activities
+0
+-59
+-2
+(E.2)
+Transactions with non-controlling interests
+-403
+-378
+-374
+Payments of lease liabilities
+-1,309
+-2,430
+-1,952
+102
+(E.3)
+3,622
+2,132
+1,680
+(E.3)
+Proceeds from borrowings
+0
+95
+2,828
+Proceeds from changes in ownership interests in subsidiaries that do not result in the loss of control
+0
+-1,492
+0
+(E.2)
+Purchase of treasury shares
+Repayments of borrowings
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+SAP's partner ecosystem is defined by the interdependent relationships of our customers, our
+employees, our suppliers, our partners, and our competition. Our ecosystem, which includes more
+than 22,500 partners with different areas of expertise, carries the SAP brand into global markets and
+expands our portfolio with their expertise, services, and products. Our ecosystem includes partners in
+four different tracks: partners in the “Build” track develop solutions on top of, or integrate with, SAP
+technology and platforms; partners in the “Sell” track resell, implement, and support customers in the
+cloud and on premise; partners in the “Service” track (systems integrators) provide strategic business
+consulting, system design, solution integration, and project implementation of SAP solutions; partners
+in the "Run" track are outsourcing or hosting companies that offer SAP solutions to customers through
+a private or public cloud.
+SAP and our partner ecosystem offer solutions to help customers grow their businesses and
+accelerate their move to the cloud. SAP partners build innovative extensions for SAP applications
+based on SAP BTP, and in doing so, enhance the customer value with SAP. By providing innovations
+that extend SAP applications, partners can influence the adoption of SAP technologies to support
+customers' unique business needs. Thus, customers maximize their SAP investment through partner
+offerings such as solution extensions, industry-specific solutions, line-of-business (LOB) solutions, and
+mobile solutions.
+Partners constantly respond to the market needs while raising awareness around strategic offerings,
+such as RISE with SAP, SAP BTP, and our industry cloud solutions, which drive the cloud
+transformation of our customers. Partners offer customers a vast array of SAP technologies and
+services specific to their LoB or industry, making it easy for customers to purchase the right
+combination of products and services (such as consulting, implementation, and development) to meet
+their business needs.
+Partners contribute to SAP's growth by expanding our market reach in sales and services, specifically
+by retaining and increasing sales to existing customers, attracting new customers, and satisfying our
+joint customers' requirements through (co-)innovation. Together with all of the aforementioned
+measures, this may positively impact our revenue, profit, and cash flows, and enable SAP to exceed
+our stated medium-term prospects.
+Opportunities from Our Employees
+Our employees drive innovation, provide value to our customers, and consistently enable our growth
+and profitability. We continuously invest in our people with the aim of retaining their high level of
+engagement, further strengthening their skills, fostering an agile and innovative organization, and
+ensuring a healthy, diverse, and inclusive workforce. By doing so, we anticipate improvements in our
+employee productivity and innovation capabilities.
+Our outlook and medium-term prospects are based on certain assumptions regarding employee
+retention and our Business Health Culture Index. Should these develop at a rate that is better than
+expected, employee productivity and engagement may increase. A stronger-than-expected increase in
+the Employee Engagement Index can therefore be an opportunity that could positively impact our
+revenue, profit, and cash flows, enabling SAP to exceed our stated medium-term prospects.
+For more information about future opportunities relating to our employees, see the Employees and
+Social Investments section.
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Consolidated Financial
+Statements IFRS
+Consolidated Financial Statements IFRS
+Consolidated Income Statements of SAP Group
+Consolidated Statements of Comprehensive Income of SAP Group
+Consolidated Statements of Financial Position of SAP Group..
+Consolidated Statements of Changes in Equity of SAP Group
+Consolidated Statements of Cash Flows of SAP Group...
+Additional
+Information
+163
+165
+166
+167
+168
+169
+Notes
+38,853
+(IN.2) Implications of the COVID-19 Pandemic...
+Opportunities from Our Partner Ecosystem
+The stronger focus on customer success enabled through our shift to a new operating model that
+aligns sales, services, and customer engagement activities may positively impact our revenue, profit,
+and cash flows. This potential may result in our stated medium-term prospects being exceeded.
+Our extensive experience in applications and analytics, as well as database and technology, continue
+to offer solid multiyear growth opportunities as we bring innovative technologies with simplified
+consumption to our installed base and continue to acquire new customers.
+Additional
+Information
+37,022
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+to be mindful of the negative aspects of this global situation, we do see a trend developing to
+prioritize investments in digital transformation. This could result in an acceleration of the digitalization
+of business processes that exceeds what we had originally planned.
+For more information about future trends in the global economy and the IT market outlook, as well as
+their potential influence on SAP, see the beginning of the Expected Developments and Opportunities
+section.
+Opportunities Through Innovation
+Our continued growth through innovation is based on our ability to leverage research and
+development (R&D) resources effectively. We continue to improve our products through design
+thinking and lean methodologies. We are accelerating innovation cycles, especially in our cloud
+solutions, and engaging even more closely with our customers to enable success.
+170
+In addition, we continue to expand innovation initiatives to support long-term projects in strategic
+opportunity areas, supporting talented entrepreneurs within SAP, as well as, for example, external
+startups.
+In particular, we see three innovation areas that have the potential to grow beyond our
+expectations.
+First, with its open APIs and value services, SAP Business Technology Platform (SAP BTP) may be
+adopted faster than internally planned. Second, business process intelligence (BPI) may see
+increased demand for intelligent automation realized through services such as application lifecycle
+management (ALM) and robotic process automation (RPA), for example. Third, we see high growth
+potential in the area of sustainability management. Our vision to enable customers to transform into
+intelligent, sustainable enterprises is based on our commitment to "chasing zero" - - zero emissions,
+zero waste, zero inequality. If this conviction is shared by increasing numbers of customers, this may
+lead to an increased demand for our business process logics.
+For more information about future opportunities in research and development for SAP, see the
+Products, Research & Development, and Services section.
+Opportunities from Our Strategy for Profitable Growth
+SAP strives to generate profitable growth across our portfolio of products, solutions, and services to
+keep or improve our market position. Our aim is to continue to expand our addressable market
+through the adjustment of our portfolio and our new technologies and innovations. The COVID-19
+pandemic has strengthened the readiness in the market to consume software in the cloud, including
+core business process platforms. This could result in an even faster adoption of our core ERP offering
+in the cloud than anticipated, translating into higher cloud and total revenue growth from 2023
+onwards than currently provided for in our midterm ambition. Greater efficiency in our cloud
+operations may also positively affect the profitability of our cloud business.
+SAP seeks to establish new business models and leverage our expanding ecosystem of partners to
+achieve scale and maximize opportunities. We see additional opportunities in potential future strategic
+partnerships, such as those for the migration of critical business systems to the cloud linked to the
+RISE with SAP offering. In addition, a promising joint venture in the financial services industry called
+SAP Fioneer was founded in 2021, enabling a better coverage of the rapidly changing banking and
+insurance industry.
+161/338
+162/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Based on our innovation capability, we see opportunities in growing product and market areas, such
+as in the further enhancement of business processes with intelligent technologies. In addition to the
+increased focus on innovation, we also focus on ease of adoption and consumption, so our customers
+can receive the benefits from our software applications, technologies, and platforms at reduced time
+to value. For example, the accelerated adoption of technology that helps companies transform into
+more sustainable businesses could result in additional upsell opportunities for customers migrating to
+SAP S/4HANA Cloud.
+170
+174
+Section A
+Section C - Financial Results
+198
+(C.1)
+Results of Segments.
+198
+(C.2)
+Reconciliation of Segment Measures to the Consolidated Income Statements.
+202
+(C.3)
+Other Non-Operating Income/Expense, Net
+.202
+(C.4)
+Financial Income, Net.
+203
+196
+(C.5) Income Taxes
+(C.6) Earnings per Share
+208
+Section D Invested Capital
+209
+(D.1) Business Combinations and Divestitures
+209
+(D.2) Goodwill
+214
+163/338
+164/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+.203
+-662
+Restructuring
+196
+-
+Customers
+175
+(A.1)
+Revenue
+175
+(A.2)
+Trade and Other Receivables
+180
+(A.3)
+Capitalized Cost from Contracts with Customers.....
+181
+(A.4)
+Customer-Related Provisions........
+(B.6)
+182
+184
+(B.1)
+Employee Headcount......
+184
+(B.2) Employee Benefits Expenses.
+184
+(B.3)
+Share-Based Payments.
+185
+(B.4)
+Pension Plans and Similar Obligations..........
+193
+(B.5)
+Other Employee-Related Obligations..
+Section B - Employees
+-1,142
+(IN.1) Basis for Preparation
+Cash flows for business combinations, net of cash and cash equivalents acquired
+-2
+-2
+-29
+-29
+-1,810
+-19
+-1,790
+-1,790
+2
+2
+2
+3,854
+50
+3,804
+536
+3,268
+483
+483
+536
+-52
+3,370
+50
+3,321
+3,321
+28,807
+45
+28,761
+-1,580
+1,234
+0
+-2
+1,229
+545
+-64
+-1,492
+-1,492
+-1,492
+-1,866
+-2
+-1,864
+-1,864
+1
+1
+1
+2,531
+138
+2,393
+27,336
+-2,782
+-2,752
+-2,752
+-2,782
+30
+5,283
+138
+5,145
+5,145
+30,822
+76
+30,746
+-1,580
+1,770
+28,783
+5,175
+543
+1,229
+(E.2)
+Il Profit after tax
+12/31/2019
+Other changes
+Hyperinflation
+Dividends
+Share-based payments
+Comprehensive income
+Other comprehensive income
+Il Profit after tax
+1/1/2019
+Notes
+€ millions
+Equity Attributable to Owners of Parent
+Consolidated Statements of Changes in Equity of SAP Group for the Years Ended December 31
+Other comprehensive income
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+167/338
+58,464
+71,169
+29,927
+41,523
+(E.2)
+211
+2,670
+(D.1)
+(E.2)
+Combined Group
+Management Report
+-64
+Comprehensive income
+Dividends
+(E.2)
+(E.2)
+(E.2)
+Shares
+Total Equity
+Non-
+Controlling
+Interests
+Total
+Treasury
+Other
+Components
+of Equity
+Earnings
+Premium
+Capital
+Retained
+Share
+Share-based payments
+Issued
+12/31/2021
+Other changes
+interests
+Transactions with non-controlling
+Dividends
+Share-based payments
+Comprehensive income
+Other comprehensive income
+Il Profit after tax
+12/31/2020
+Other changes
+interests
+Changes in non-controlling
+Purchase of treasury shares
+Additional
+Information
+-64
+32,026
+-4
+Decrease/increase in other assets
+Decrease/increase in trade and other receivables
+-54
+-198
+39
+14
+68
+-11
+-198
+-776
+-2,174
+(C.4)
+1,226
+1,938
+Increase/decrease in trade payables, provisions, and other liabilities
+1,471
+1,835
+1,084
+2,794
+(B.3)
+1,872
+1,831
+1,775
+(D.2)-(D.4)
+Other adjustments for non-cash items
+Decrease/increase in allowances on trade receivables
+Il Financial income, net
+Il Income tax expense
+Share-based payment expenses
+Depreciation and amortization
+(C.5)
+Adjustments to reconcile profit after tax to net cash flow from operating activities:
+Increase/decrease in contract liabilities
+821
+7,194
+-4
+3,496
+6,223
+Net cash flows from operating activities
+-2,329
+-1,194
+-2,063
+Income taxes paid, net of refunds
+97
+122
+56
+-341
+-244
+414
+-202
+-1,310
+Interest received
+Interest paid
+Share-based payments
+984
+128
+100
+328
+293
+475
+-583
+-651
+-706
+-1,469
+-1,257
+3,370
+-1,120
+5,376
+-2,182
+-2,182
+1,684
+311
+1,373
+1,373
+8,230
+172
+8,058
+2,768
+5,290
+2,853
+51
+2,802
+-88
+2,768
+5,376
+121
+5,256
+5,256
+211
+29,716
+-3,072
+-1,012
+32,026
+545
+1,229
+5,283
+0
+-5
+34
+-2,271
+29,927
+1,933
+2019
+2020
+Il Profit after tax
+1,933
+2021
+Notes
+€ millions
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+Management Report
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+168/338
+Consolidated Statements of Cash Flows of SAP Group for the Years Ended December 31
+41,523
+The accompanying Notes are an integral part of these Consolidated Financial Statements.
+3,983
+14
+-44
+1,229
+1,918
+-30
+1,757
+-3,072
+38,853
+2,670
+2,050
+37,022
+-44
+Cost Classification
+1.6106
+Cost of Cloud and Software
+Cost of cloud and software includes the costs incurred in producing the goods and providing the
+services that generate cloud and software revenue. Consequently, this line item primarily includes
+employee expenses relating to these services, amortization of acquired intangibles, fees for third-party
+licenses, depreciation of our property, plant, and equipment (for example, of our data centers in which
+we host our cloud solutions), and costs for third-party hosting services. For more information about
+the capitalization of costs from contracts with customers, see Note (A.3).
+Cost of Services
+Cost of services includes the costs incurred in providing the services that generate service revenue.
+Consequently, this line item primarily includes employee expenses and related training, system and
+system administration costs, and costs for third-party resources.
+Research and Development
+Research and development includes the costs incurred by activities 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 recognition of internally generated
+intangible assets from development, see Note (D.3).
+Sales and Marketing
+Management Judgments and Sources of Estimation Uncertainty
+General and Administration
+General and administration includes the costs related to finance and administrative functions, human
+resources, and general management as long as they are not directly attributable to one of the other
+operating expense line items.
+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 amounts of assets, liabilities, revenues, and expenses, as well as disclosure of contingent
+liabilities.
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Combined Group
+1.6554
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Sales and marketing includes the costs incurred for the selling activities (such as sales commissions
+and amortization of capitalized sales commissions) and marketing activities related to our software
+and cloud solutions and our service portfolio. For more information about the capitalization of costs
+from contracts with customers, see Note (A.3).
+1.5747
+1.0814
+1.5615
+GBP
+Additional
+0.8403
+0.8990
+0.8600
+0.8892
+0.8773
+Swiss franc
+CHF
+1.0331
+1.5896
+1.0802
+1.1127
+Canadian dollar
+CAD
+1.4393
+1.5633
+1.4835
+1.5294
+1.4857
+Australian dollar
+AUD
+1.0703
+Information
+Management Report
+The accounting policies that most frequently or significantly require us to make judgments, estimates,
+and assumptions, and therefore are critical to understanding our results of operations, include the
+following:
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+(IN.2) Implications of the COVID-19 Pandemic
+Management Judgments and Estimates Due to the COVID-19 Pandemic
+Management judgments and estimates can affect the amounts and reporting of assets and liabilities
+as at the reporting date, and the amounts of income and expense reported for the period. Due to the
+global consequences of the ongoing COVID-19 pandemic, these management judgments and
+estimates continue to be subject to uncertainty. Actual amounts may differ from the management
+judgments and estimates; changes could have a material impact on the Consolidated Financial
+Statements. All available information on the expected economic developments and country-specific
+governmental mitigation measures was included when updating the management judgments and
+estimates. This information was also included in the analysis of the recoverability and collectability of
+assets and receivables.
+As the pandemic continues, it remains difficult to predict its duration and the magnitude of its impact
+on assets, liabilities, results of operations, and cash flows. We based our financial-statement-related
+estimates and assumptions on existing knowledge and best information available at the time, and
+applied a scenario that assumes the COVID-19 situation will continue to improve as vaccine programs
+continue to take effect globally, leading to a growing demand environment in 2022.
+SAP
+We will continue to analyze possible future effects of the COVID-19 pandemic on the measurement of
+individual assets and liabilities.
+The overall impact of the COVID-19 pandemic on SAP's consolidated financial statements has not
+been significant.
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Pound sterling
+The impact of global travel restrictions on SAP's Concur business continues, leading to an overall
+further decline in pay-as-you-go transactional revenues as part of software as a service revenue
+(defined in Note (A.1)) compared to 2020. Over the course of the second half of 2021, such revenues
+I have started to increase again.
+We base our judgments, estimates, and assumptions on historical and forecast information, and on
+regional and industry economic conditions in which we or our customers operate. Changes to these
+conditions could adversely affect our estimates. Although we believe we have made reasonable
+estimates about the ultimate resolution of 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 and disclosed contingent liabilities. Actual results could
+differ significantly from original estimates.
+174/338
+The IASB has issued various amendments to IFRS standards (such as IAS 1 (Classification of
+Liabilities as Current or Non-current), IAS 37 (Provisions, Contingent Liabilities and Contingent
+Assets)) that are relevant for SAP but not yet effective. We are currently in the process of finalizing the
+assessment of the impact on SAP, but do not expect material effects on our financial position or
+results of operations.
+Note
+(A.1)
+> Significant Accounting Policies
+Revenue recognition
+Valuation of trade receivables
+(A.2)
+(A.4), (G.3)
+Accounting for legal contingencies
+(B.3)
+Accounting for share-based payments
+173/338
+(C.5)
+(D.1)
+Accounting for business combinations
+(D.2)
+Accounting for goodwill
+(D.3)
+Accounting for intangible assets (including recognition of internally generated intangible assets from
+development)
+(D.6)
+Accounting for equity investments
+Our management periodically discusses these significant accounting policies with the Audit and
+Compliance Committee of our Supervisory Board.
+New Accounting Standards Not Yet Adopted
+Accounting for income taxes
+122.06
+Business Combinations and Divestitures
+129.86
+Pension Plans and Similar Obligations
+(B.5)
+Other Employee-Related Obligations
+(B.6)
+Restructuring
+(C.1)
+Results of Segments
+(C.5)
+Income Taxes
+(D.1)
+(B.4)
+Section A - Customers
+Goodwill
+(D.3)
+Intangible Assets
+(D.4)
+Property, Plant, and Equipment
+(D.5)
+Leases
+(D.6)
+Equity Investments
+(E.2)
+(D.2)
+Total Equity
+Share-Based Payments
+Capitalized Cost from Contracts with Customers
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+The following table provides an overview of where our accounting policies, management judgments,
+and estimates are disclosed:
+Note
+Customer-Related Provisions
+Accounting Policies, Judgments, and Estimates
+Basis for Preparation
+(IN.2)
+Implications of the COVID-19 Pandemic
+(A.1)
+Revenue
+(A.2)
+(A.3)
+(A.4)
+(B.3)
+Trade and Other Receivables
+(IN.1)
+121.78
+(E.3)
+(F.1)
+The exchange rates of key currencies affecting the Company were as follows:
+Exchange Rates
+Middle Rate
+Annual Average Exchange Rate
+Equivalent to €1
+as at 12/31
+2021
+2020
+2021
+2020
+monthly basis. Exchange differences resulting from foreign currency transactions are recognized in
+other non-operating income/expense, net.
+2019
+USD
+1.1326
+1.2271
+1.1835
+1.1413
+1.1196
+Japanese yen
+JPY
+130.38
+126.49
+U.S. dollar
+Liquidity
+Additional
+Information
+Management Report
+Financial Risk Factors and Risk Management
+(F.2)
+Fair Value Disclosures on Financial Instruments
+(G.3)
+Other Litigation, Claims, and Legal Contingencies
+(G.5)
+Executive and Supervisory Board Compensation
+General Accounting Policies
+Bases of Measurement
+The Consolidated Financial Statements have been prepared on the historical cost basis except for the
+following:
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Derivative financial instruments, liabilities for cash-settled share-based payments, and financial
+assets with cash flows that are not solely payments of principal or interest are measured at fair
+value.
+Monetary assets and liabilities denominated in foreign currencies are translated at period-end
+exchange rates.
+The financial statements of our subsidiaries to which hyperinflation accounting applies are restated.
+Foreign Currencies
+Income and expenses and operating cash flows of our foreign subsidiaries that use a functional
+currency other than the Euro are translated at average rates of foreign exchange (FX) computed on a
+171/338
+172/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Post-employment benefits are measured at the present value of the defined benefit obligations
+less the fair value of the plan assets.
+This section discusses disclosures related to contracts with our customers. These include but are not
+limited to explanations of how we recognize revenue, revenue disaggregation, and information about
+our trade receivables and customer-related obligations.
+Revenue for combined performance obligations is recognized over the longest period of all promises
+in the combined performance obligation.
+Accounting for Revenue from Contracts with Customers
+Cloud and Software Revenue
+2021
+2020
+2019
+2021
+2020
+2019
+3,308
+2,608
+2,115
+Jil SAP Group
+10,931 10,364
+4,894
+4,439
+3,945
+9,348
+9,239
+9,172
+1,217
+1,033
+872
+3,798
+10,211
+3,625
+APJ
+EMEA
+Americas
+10,969
+11,106
+11,194
+Japan
+1,301
+1,305
+1,180
+Rest of APJ
+2,984
+Americas
+2,859
+APJ
+4,285
+4,165
+4,254
+lil SAP Group
+27,842
+27,338
+27,553
+Major Revenue Classes by Region
+€ millions
+3,074
+2,109
+3,629
+8,080
+Other²
+44 12/31/2021
+2021
+4.0
+8.8
+-9.0
+0.6
+4.4
+1 The prior year number was reduced by €0.2 billion to conform to the presentation requirement regarding payments received in
+advance for cancelable contracts. The corresponding balance is presented in the line "Trade and other payables."
+2 Other includes, for example, the impact of foreign currency translation and business acquisition.
+Decreases resulting from satisfaction of performance obligations
+The amount of revenue recognized in the reporting period that was included in the contract liability
+balance at the beginning of the reporting period was €3.6 billion (December 31, 2020: €3.5 billion).
+Trade and Other Receivables
+Accounting for Trade and Other Receivables
+We measure trade receivables and contract assets from contracts with customers at amortized cost
+less expected credit losses. We account for expected credit losses by recording an allowance on a
+portfolio basis. We apply the simplified impairment approach. On initial measurement of the
+receivables, we consider all credit losses that are expected to occur during the lifetime of the
+receivables. We use a provision matrix to estimate these losses.
+Additionally, we recognize allowances for individual receivables if there is objective evidence of credit
+impairment.
+Account balances are written off either partially or in full if we judge that the likelihood of recovery is
+remote.
+For information about how the default risk for trade receivables is analyzed and managed, how the
+loss rates for the provision matrix are determined, how credit impairment is determined and what our
+criteria for write-offs are, see the section on credit risk in Note (F.1).
+In our Consolidated Income Statements, net gains/losses from expected credit loss allowances are
+included in Other operating income/expense, net. Gains/losses from foreign currency exchange rate
+fluctuations are included in Other non-operating income/expense, net.
+Determining our expected credit loss allowance involves significant judgment. In this judgment, we
+primarily consider our historical experience with credit losses in the respective provision matrix risk
+class and current data on overdue receivables. We expect that our historical default rates represent a
+reasonable approximation for future expected customer defaults. Besides historical data, our
+judgment used in developing the provision matrix considers reasonable and supportable forward-
+looking information (for example, changes in country risk ratings, and fluctuations in credit default
+swaps of the countries in which our customers are located).
+The assessment of whether a receivable is collectible involves the use of judgment and requires us to
+make assumptions about customer defaults that could change significantly.
+By applying this judgment, we record an allowance for a specific customer when it is probable that a
+credit loss has occurred and the amount of the loss is reasonably estimable. 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 prediction for future development.
+(A.2)
+9,418
+Increases resulting from billing and invoices becoming due
+€ billions
+6,933 24,078 23,228 23,012
+For information about the breakdown of revenue by segment and segment revenue by region, see
+Note (C.1).
+Remaining Performance Obligations
+Amounts of a customer contract's transaction price that are allocated to the remaining performance
+obligations represent contracted revenue that has not yet been recognized. They include amounts
+recognized as contract liabilities and amounts that are contracted but not yet due.
+The transaction price allocated to performance obligations that were unsatisfied or partially
+unsatisfied as at December 31, 2021, was €39.9 billion (December 31, 2020: €33.4 billion). This
+amount mostly comprises obligations to provide software support or cloud subscriptions services, as
+the respective contracts typically have durations of one or multiple years. The portion of remaining
+performance obligations related to services consists of non-cancelable revenue from contracts for
+projects with a predefined output.
+The majority of this amount is expected to be recognized as revenue over the next 12 months
+following the respective balance sheet date. This estimate is based on our best judgment, as it needs
+to consider estimates of possible future contract modifications. The amount of transaction price
+allocated to the remaining performance obligations, and changes in this amount over time, are
+impacted by, among others:
+Currency fluctuations
+The contract period of our cloud and software support contracts remaining at the balance sheet
+date and thus by the timing of contract renewals
+Contract Balances
+The following table presents the activities impacting contract liabilities balances during the year ended
+December 31, 2021:
+1/1/20211
+179/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Contract Liabilities
+180/338
+(A.1) Revenue
+1,996
+Rest of Americas
+Our typical cloud services do not provide the customer with a software license because the customer
+does not have the right to terminate the hosting contract and take possession of the software.
+Consequently, cloud fees that are based on transaction volumes are considered in the transaction
+price based on estimates rather than being accounted for as sales-based license royalties.
+Only very rarely do our contracts include significant financing components. We do not account for
+financing components if the period between when SAP transfers the promised goods or services to
+the customer and when the customer pays for those goods or services is one year or less.
+Allocation of Transaction Price
+We have established a hierarchy to identify the standalone selling prices (SSPs) that we use to
+allocate the transaction price of a customer contract to the performance obligations in the contract.
+Where standalone selling prices for an offering are observable and reasonably consistent across
+customers (that is, not highly variable), our SSP estimates are derived from our respective pricing
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+We apply judgment in determining the amount to which we expect to be entitled in exchange for
+transferring promised goods or services to a customer. This includes estimates as to whether and to
+what extent subsequent concessions may be granted to customers and whether the customer is
+expected to pay the contractual fees. In this judgment, we consider our history with the respective
+customer or on a portfolio basis.
+Information
+Where sales prices for an offering are not directly observable or highly variable across customers,
+we use estimation techniques. For renewable offerings with highly variable pricing across
+customers, these techniques consider the individual contract's expected renewal price as far as this
+price is substantive. Typically, our cloud offerings follow this approach. For non-renewable
+offerings, these estimations follow a cost-plus-margin approach.
+For offerings that lack renewals, have highly variable pricing, and lack substantial direct costs to
+estimate based on a cost-plus-margin approach, we allocate the transaction price by applying a
+residual approach. We use this technique in particular for our standard on-premise software
+offerings.
+Judgment is required when estimating SSPs. To judge whether the historical pricing of our goods and
+services is highly variable, we have established thresholds of pricing variability. For judging whether
+contractual renewal prices are substantive, we have established floor prices that we use as SSPS
+whenever the contractual renewal prices are below these floor prices. In judging whether contracts
+are expected to renew at their contractual renewal prices, we rely on our respective renewal history.
+The SSPS of material right options depend on the probability of option exercise. In estimating these
+probabilities, we apply judgment considering historical exercise patterns.
+We review the SSPs periodically or whenever facts and circumstances change to ensure the most
+objective input parameters available are used.
+Recognition of Revenue
+Cloud revenue is recognized over time as the services are performed. Where our performance
+obligation is the grant of a right to continuously access and use a cloud offering for a certain term,
+revenue is recognized based on time elapsed and thus ratably over this term. In limited scenarios
+where the transaction price is entirely variable and determined by the customer's usage, we recognize
+revenue based on usage in the period in which it was earned.
+Software revenue is recognized at a point in time or over time depending on whether we deliver
+standard software, customer-specific software, or software subscription contracts that combine the
+delivery of software and the obligation to deliver, in the future, unspecified software products:
+Licenses for our standard on-premise software products are typically delivered by providing the
+customer with access to download the software. We recognize revenue for these on-premise
+licenses at the point in time when we grant the license rights to the customer and the customer has
+access to and thus control over the software. In judging whether our on-premise software offerings
+grant customers a right to use, rather than a right to access, our intellectual property, we have
+considered the usefulness of our software without subsequent updates to it.
+· Typically, our customer-specific on-premise software development agreements:
+"
+history. Typically, our standardized support offerings and our professional service offerings follow
+this approach.
+Are for software developed for specific needs of individual customers and therefore it does not
+I have any alternative use for us
+When selling goods or services, we frequently grant customers 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 provide a material right to the customer that
+the customer would not receive without entering into that contract (material right options). In this
+judgment, we consider, for example, whether the options entitle the customer to a discount that
+exceeds the discount granted for the respective goods or services sold together with the option.
+Determination of Transaction Price
+Identification of Performance Obligations
+Classes of Revenue
+We derive our revenue from fees charged to our customers for the use of our cloud offerings, for
+licenses to our on-premise software products, and for standardized and premium support services,
+consulting, customer-specific software developments, training, and other services.
+Cloud and software revenue, as presented in our Consolidated Income Statements, is the sum of
+our cloud revenue, our software license revenue, and our software support revenue.
+Cloud revenue represents fees earned from providing customers with any of the following:
+Software as a service (SaaS), that is, a right to use software functionality (including standard
+functionalities and custom cloud applications and extensions) in a cloud-based infrastructure hosted
+by SAP or third parties engaged by SAP, where the customer does not have the right to terminate the
+hosting contract and take possession of the software to either run it on its own IT infrastructure or to
+engage a third-party provider unrelated to SAP to host and manage the software; SaaS also includes
+transaction and agent fees for transactions that customers of our network business execute on our
+cloud-based transaction platforms.
+Platform as a service (PaaS), that is, access to a cloud-based platform to develop, deploy, integrate,
+and manage applications.
+Infrastructure as a service (laaS), that is, hosting and related application management services for
+software hosted by SAP or third parties engaged by SAP.
+Premium cloud support, that is, support beyond the regular support embedded in the underlying
+cloud subscription services.
+Software license revenue represents fees earned from the sale or license of software to customers
+for use on the customer's premises, in other words, where the customer has the right to take
+possession of the software for installation on the customer's premises or on hardware of third-party
+hosting providers unrelated to SAP (on-premise software). Software license revenue includes revenue
+from both the sale of our standard software products and customer-specific on-premise-software
+development agreements.
+Software support revenue represents fees earned from providing customers with standardized
+support services that comprise unspecified future software updates, upgrades, and enhancements as
+well as technical product support services for on-premise software products.
+Services revenue primarily represents fees earned from professional consulting services, premium
+support services, and training services.
+Identification of Contract
+Our customer contracts often include various products and services. Typically, the products and
+services outlined in the Classes of Revenue section qualify as separate performance obligations and
+the portion of the contractual fee allocated to them is recognized separately. Judgment is required,
+however, in determining whether a good or service is considered a separate performance obligation.
+In particular for our professional services and implementation activities, judgment is required to
+evaluate whether such services significantly integrate, customize, or modify the on-premise software
+or cloud service to which they relate. In this context, we consider the nature of the services and their
+volume relative to the volume of the on-premise software or cloud service to which they relate. In
+general, the implementation services for our cloud services go beyond pure setup activities and
+qualify as separate performance obligations. Similarly, our on-premise implementation services and
+our custom development services typically qualify as separate performance obligations. Non-distinct
+goods and services are combined into one distinct bundle of goods and services (combined
+performance obligation).
+We frequently enter into multiple contracts with the same customer. For accounting purposes, we
+treat these contracts as a single contract if they are entered into at or near the same time and are
+economically interrelated. We do not combine contracts with closing days more than three months
+apart because we do not consider them being entered into near the same time. Judgment is required
+176/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+in evaluating whether various contracts are interrelated, which includes considerations as to whether
+they were negotiated as a package with a single commercial objective, whether the amount of
+consideration on one contract is dependent on the performance of the other contract, or if some or all
+goods in the contracts are a single performance obligation.
+New arrangements with existing customers can be either a new contract or the modification of prior
+contracts with the customer. Our judgment in making this determination considers whether there is a
+connection between the new arrangement and the pre-existing contracts, whether the goods and
+services under the new arrangement are highly interrelated with the goods and services sold under
+prior contracts, and how the goods and services under the new arrangement are priced. In
+determining whether a change in transaction price represents a contract modification or a change in
+variable consideration, we examine whether the change in price results from changing the contract or
+from applying unchanged existing contract provisions.
+175/338
+2,099
+■
+For such development agreements, we recognize revenue over time as the software development
+progresses. Judgment is required in identifying an appropriate method to measure the progress
+toward complete satisfaction of such performance obligations. We typically measure progress of
+our development agreements based on the direct costs incurred to date in developing the software
+as a percentage of the total reasonably estimated direct costs to fully complete the development
+work (percentage-of-completion method). This method of measuring progress faithfully depicts the
+transfer of the development services to the customer, as substantially all of these costs are cost of
+the staff or third parties performing the development work. In estimating the total cost to fully
+complete the development work, we consider our history with similar projects.
+Sustainability
+Additional
+Information
+Total Revenue by Region
+€ millions
+Germany
+Rest of EMEA
+2021
+2020
+4,343
+4,015
+Consolidated Financial Further Information on
+Statements IFRS
+3,948
+8,052
+8,158
+EMEA
+12,589
+12,067
+12,105
+United States
+8,870
+9,110
+9,085
+8,246
+Provide us with an enforceable right to payment for performance completed to date
+Management Report
+Stakeholders
+177/338
+178/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+For agreements that combine the delivery of software and the obligation to deliver, in the future,
+unspecific software products, we recognize revenue at a point in time for licenses that are made
+immediately accessible to the customer. We recognize revenue ratably over the term of the
+software subscription contract for the unspecified software products, as our performance obligation
+is to stand ready to deliver such products on a when-and-if-available basis.
+Combined Group
+Software support revenue is typically recognized based on time elapsed and thus ratably over the
+term of the support arrangement. Under our standardized support services, our performance
+obligation is to stand ready to provide technical product support and unspecified updates, upgrades,
+and enhancements on a when-and-if-available basis. Our customers simultaneously receive and
+consume the benefits of these support services as we perform.
+Judgment is also required to determine whether revenue is to be recognized at a point in time or over
+time. For performance obligations satisfied over time, we need to measure progress using the method
+that best reflects SAP's performance. When using cost incurred as a measure of progress for
+recognizing revenue over time, we apply judgment in estimating the total cost to satisfy the
+performance obligation.
+All of the judgments and estimates mentioned above can significantly impact the timing and amount
+of revenue to be recognized.
+Contract Balances
+We recognize trade receivables for performance obligations satisfied over time gradually as the
+performance obligation is satisfied and in full once the invoice is due. Judgment is required in
+determining whether a right to consideration is unconditional and thus qualifies as a receivable.
+Contract liabilities primarily reflect invoices due or payments received in advance of revenue
+recognition.
+Typically, we invoice fees for on-premise standard software on contract closure and software delivery.
+Periodic fixed fees for cloud subscription services, software support services, and other multi-period
+agreements are typically invoiced yearly or quarterly in advance. Such fee prepayments account for
+the majority of our contract liability balance. Fees based on actual transaction volumes for cloud
+subscriptions and fees charged for non-periodical services are invoiced as the services are delivered.
+While payment terms and conditions vary by contract type and region, our terms typically require
+payment within 30 to 60 days.
+Geographic Information
+The amounts for revenue by region in the following tables are based on the location of customers.
+The regions in the following table are EMEA (Europe, Middle East, and Africa), Americas (North
+America and Latin America), and APJ (Asia Pacific Japan).
+SAP
+SAP Integrated Report 2021
+To Our
+Service revenue is typically recognized over time. Where we stand ready to provide the service (such
+as access to learning content), we recognize revenue based on time elapsed and thus ratably over the
+service period. Consumption-based services (such as separately identifiable consulting services and
+premium support services and classroom training services) are recognized over time as the services
+are utilized, typically following the percentage-of-completion method or ratably. When using the
+percentage-of-completion method, we typically measure the progress toward complete satisfaction of
+the performance obligation in the same way and with the same reasoning and judgment as we do for
+customer-specific on-premise software development agreements. We apply judgment in determining
+whether a service qualifies as a stand-ready service or as a consumption-based service.
+Cloud Revenue
+2019
+5,733
+10,485
+10,348
+28,215
+5,481
+11,598
+11,136
+5,000
+Sales and marketing
+27,634
+9,131
+5,793
+29,580 12,710
+9,781
+6,094
+development
+25,834 10,205
+10,368
+5,209 25,781
+Infrastructure
+administration
+6,530
+1,246
+2,123
+3,161
+6,689
+1,243
+2,161
+3,285
+6,879
+1,199
+2,306
+3,374
+General and
+13,705
+32,244
+6,326 10,571
+15,347
+6,278
+15,646
+5,113
+4,586
+5,947
+Cloud and software
+Total
+APJ
+EMEA Americas
+Total
+APJ
+EMEA Americas
+Total
+APJ
+EMEA Americas
+4,589
+2,609
+5,525
+6,501
+Research and
+20,239
+5,971
+6,018
+8,250
+19,842
+> Costs to Fulfill Customer Contracts
+5,934
+8,175
+5,924 19,644
+5,491
+8,229
+Services
+5,361 16,288
+4,426
+16,392
+Full-time equivalents
+1,353
+4,786
+1,589
+Social security expenses
+10,031
+10,413
+10,635
+Salaries
+1,439
+2019
+2021
+€ millions
+(B.2) Employee Benefits Expenses
+184/338
+end average)
+29,368 27,092 99,157
+2020
+1,477
+Share-based payment expenses
+2,794
+Employee benefits expenses
+47
+72
+101
+Termination benefits outside of restructuring plans
+1,111
+-7
+25
+Employee-related restructuring expenses
+369
+419
+408
+Pension expenses
+1,835
+1,084
+42,697
+101,476
+30,306 27,830
+28,354 104,364 43,340
+29,712 27,571
+27,979 102,430 43,048
+30,369
+44,082
+31,660 29,113 107,415
+46,641
+SAP Group
+3,859
+654
+984
+2,220
+4,094
+696
+1,107
+2,291
+100,330
+824
+(December 31)
+462
+30,651
+45,359
+SAP Group (months'
+acquisitions
+2,113
+137
+1,638
+338
+781
+75
+97
+609
+914
+45
+407
+Thereof
+12/31/2019
+12/31/2020
+12/31/2021
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+182/338
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+181/338
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+SAP
+Additional
+Information
+Amortization of capitalized costs to fulfill contracts for custom cloud applications and extensions is
+included in the cost of cloud.
+Capitalized Cost from Contracts with Customers
+2,028
+1,536
+491
+2,826
+2,158
+667
+Capitalized cost of obtaining
+Non-Current
+Current
+Total
+Current Non-Current
+Total
+2020
+2021
+€ millions
+Additional
+Information
+Trade and Other Receivables
+2021
+2020
+498
+AA Total
+6,352
+147
+6,499
+6,593
+137
+6,730
+Contract assets as at December 31, 2021, were €360 million (December 31, 2020: €295 million).
+For more information about financial risk, how we manage credit risk, and details of our trade
+receivables and contract assets allowances, see Note (F.1).
+(A.3)
+Capitalized Cost from Contracts with Customers
+> Costs of Obtaining Customer Contracts
+Capitalized costs from customer contracts are classified as Other 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 our sales force and partners. Judgment is required in determining the
+amounts to be capitalized, particularly where the commissions are based on cumulative targets and
+where commissions relate to multiple performance obligations in one customer contract. We
+capitalize such cumulative target commissions for all customer contracts that count towards the
+cumulative target but only if nothing other than obtaining customer contracts can contribute to
+achieving the cumulative target. Commissions for contracts with multiple performance obligations or
+for probable renewals thereof are allocated to these performance obligations and probable renewals
+relative to the respective standalone selling price.
+Our sales commission payments for customer contract renewals are typically not commensurate with
+the commissions paid for new contracts. Thus, the commissions paid for renewable new contracts
+also relate to expected renewals of these contracts. Consequently, we amortize sales commissions
+paid for new customer contracts on a straight-line basis over the expected contract life including
+probable contract renewals. Judgment is required in estimating these contract lives. In exercising this
+judgment, we consider our expectation about future contract renewals which we evaluate periodically
+to confirm that the resulting amortization period properly reflects the expected contract life.
+Commensurate payments are amortized over the contract term to which they relate. The amortization
+periods range from 18 months to eight years depending on the type of offering. Amortization of the
+capitalized costs of obtaining customer contracts is classified mainly 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.
+103
+customer contracts
+395
+146
+€ millions
+Current
+Non-Current
+Total
+Current Non-Current
+Total
+Trade receivables, net
+5,887
+1
+5,888
+6,199
+33
+6,232
+Other receivables
+465
+611
+Capitalized cost to fulfill
+126
+175
+- Determining whether the amount of an obligation is reliably estimable
+Determining the probability of outflow of economic benefits
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+Determining whether an obligation exists
+Due to uncertainties relating to these matters, provisions are based on the best information available.
+Significant judgment is required in the determination of whether and when a provision is to be
+recorded and what the appropriate amount for such provision should be. Notably, judgment is
+required in the following areas:
+Customer-related provisions also include obligations resulting from customer-related litigation and
+claims. We are currently confronted with various claims and legal proceedings, including claims that
+relate to customers demanding indemnification for proceedings initiated against them based on their
+use of SAP software, and occasionally claims that relate to customers being dissatisfied with the
+products and services that we have delivered to them. The obligations arising from customer-related
+litigation and claims comprise cases in which we indemnify our customers against liabilities arising
+from a claim that our products infringe a third party's patent, copyright, trade secret, or other
+proprietary rights.
+Customer-Related Litigation and Claims
+Customer-related provisions mainly include expected contract losses. We adjust these provisions as
+further information becomes available and as circumstances change. Non-current provisions are
+measured at the present value of their expected settlement amounts as at the reporting date.
+The unit of account for the identification of potential onerous customer contracts is based on the
+contract definition of IFRS 15 including the contract combination guidance. The economic benefits
+considered in the assessment comprise the future benefits we are directly entitled to under the
+contract as well as the anticipated future benefits that are the economic consequence of the contract
+if these benefits can be reliably determined.
+129
+- Estimating the amount of the expenditure required to settle the present obligation
+171
+At the end of each reporting period, we reassess the potential obligations related to our pending
+claims and litigation and adjust our respective provisions to reflect the current best estimate. In
+addition, we monitor and evaluate new information that we receive after the end of the respective
+reporting period, but before the Consolidated Financial Statements are authorized for issue, to
+determine whether this provides additional information regarding conditions that existed at the end of
+the reporting period. Changes to the estimates and assumptions underlying our accounting for legal
+contingencies, and outcomes that differ from these estimates and assumptions, could require material
+adjustments to the carrying amounts of the respective provisions recorded and additional provisions.
+The expected timing or amounts of any outflows of economic benefits resulting from these lawsuits
+and claims are uncertain and not estimable, as they generally depend on the duration of the legal
+proceedings and settlement negotiations required to resolve the litigation and claims and the
+unpredictability of the outcomes of legal disputes in several jurisdictions.
+183/338
+Employee Headcount by Region and Function
+The following table provides an overview of employee headcount, 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
+(B.1)
+This section provides financial insights into our employee benefit arrangements. It should be read in
+conjunction with the compensation disclosures for key management personnel in Note (G.5).
+Section B - Employees
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Stakeholders
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+Contingent liabilities exist in respect of customer-related litigation and claims for which no provision
+has been recognized. It is not practicable to estimate the financial impact of these contingent liabilities
+due to the uncertainties around these lawsuits and claims as outlined above.
+15,552
+450
+2020
+2,628
+1,633
+Other non-financial assets
+2,270
+1,687
+583
+3,127
+2,333
+793
+Capitalized contract cost
+customer contracts
+242
+151
+91
+301
+4,261
+523
+1,321
+3,247
+2021
+Expected Contract Losses
+(A.4) Customer-Related Provisions
+Capitalized cost to fulfill customer contracts
+Capitalized cost of obtaining customer contracts
+€ millions
+Amortization Expense
+70
+88
+44
+73
+89
+49
+as % of Other non-financial
+assets
+Capitalized contract cost
+1,926
+13,420
+Capitalized costs incurred to fulfill customer contracts mainly consist of direct costs for set-up and
+implementation of cloud products and custom cloud development contracts as far as these costs are
+not in scope of other accounting standards than IFRS 15. These costs are amortized after completion
+of the setup and implementation or the development, respectively, on a straight-line basis over the
+expected life of the cloud subscription contract including expected renewals. For the life of the
+contract, we consider our expectation about future contract renewals which we evaluate periodically
+to confirm that the resulting amortization period properly reflects the expected contract life. The
+amortization periods range from six to eight years depending on the type of offering. In addition, the
+capitalized costs include third-party license fees which are amortized over the term of the third-party
+license contract. Judgment is required in evaluating whether costs are directly related to customer
+contracts and in estimating contract lives.
+SAP
+RSU Plan
+118.73
+LTI 2020
+(2020-2021
+Tranches)
+64.16
+LTI 2016 Plan
+(2018-2019
+Tranches)
+Fair Value and Parameters Used at Year End 2021 for Cash-Settled Plans
+The valuation of our outstanding cash-settled plans was based on the following parameters and
+assumptions:
+In conjunction with the acquisition of Qualtrics in 2019, under the terms of the acquisition agreement,
+SAP exchanged unvested Restricted Share Awards (RSAs), Restricted Share Units (RSUs), and
+Performance Share Units (PSUs), and options held by employees of Qualtrics into cash-settled share-
+based payment awards of SAP (Qualtrics Rights). After completion of a voluntary exchange offer in
+conjunction with the Qualtrics IPO in 2021, most of the Qualtrics Rights were exchanged into equity-
+settled Qualtrics RSU awards. For more information about this voluntary exchange offer, see the
+section Qualtrics Equity Awards - Exchange Offer in this Note (B.3).
+Qualtrics Cash-Settled Awards Replacing Pre-Acquisition Qualtrics Awards
+(Qualtrics Rights)
+IFRS at constant currencies) and cloud revenue (non-IFRS at constant currencies). Until 2021,
+operating profit (non-IFRS at constant currencies) was the only KPI. Depending on the weighted
+average performance, the number of PSUs vesting ranges between 0% and 200% of the number
+initially granted. Performance against the KPI target was 130.9% in 2021 (2020: 100.4%,
+2019: 118.7%). All share units are paid out in cash upon vesting.
+Information
+Additional
+(2018-2021
+Tranches)
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+€, unless otherwise stated
+Over a three-year service period and upon achieving certain key performance indicators (KPIs)
+From 2021 onwards, the number of PSUs that will vest under the different tranches is mainly
+contingent upon achievement of two equally weighted KPIs in the year of grant: operating profit (non-
+Over a one-to-three-year service period only, or
+Over a half-year service period only
+Granted share units will vest in different tranches, either:
+To retain and engage executives and certain employees, we grant virtual shares representing a
+contingent right to receive a cash payment determined by the SAP share price and the number of
+share units that ultimately vest. In June 2020 and 2021, we granted share units under the new
+Grow SAP Plan. This fixed term plan has broadly the same terms and conditions as the
+Move SAP Plan, recognizes all employees' commitment to SAP's success, and deepens their
+participation in our future company performance. In March 2021, we granted share units under the
+COVID-19 Recognition Plan to thank all employees for their commitment, dedication, and resilience.
+Except for a six-month vesting period, this non-recurring plan has broadly the same terms and
+conditions as the Move SAP Plan.
+Restricted Stock Unit Plan Including Move SAP Plan, Grow SAP Plan, and COVID-
+19 Recognition Plan (RSU Plan)
+If an Executive Board member's service contract is terminated before the end of the third year
+following the year in which the share 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.
+Management Report
+122.88
+Weighted average fair value as at 12/31/2021
+Information how fair value was measured at measurement date
+SAP Integrated Report 2021
+SAP
+189/338
+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.
+1.1
+2.8
+0.7
+Weighted average remaining life of awards outstanding as at 12/31/2021 (in years)
+1.52
+NA
+1.52
+Expected dividend yield (in %)
+ΝΑ
+30 to 32
+21
+Expected volatility (in %)
+-0.72 to -0.32
+ΝΑ
+-0.72 to -0.12
+Risk-free interest rate, depending on maturity (in %)
+124.90
+Other¹
+Monte Carlo
+124.90
+124.90
+Share price
+Monte Carlo
+Option pricing model used
+The number of PSUs ultimately paid out depends on the performance of the SAP share - absolute
+and relative to the Peer Group Index. In contrast, the final number of RSUs is fixed. SAP's absolute
+share price performance is measured by comparing the grant price against the payout price. If the
+SAP share price performance equals the Peer Group Index performance over the same period, the
+performance factor is set at 100%. If the SAP share price performs better than the Peer Group Index
+(measured as difference between SAP share price performance and Peer Group Index performance),
+the performance factor is increased by the percentage point of the outperformance of the SAP share
+price. The 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 performance factor is decreased by the percentage point of the outperformance of
+the Peer Group Index. All PSUs lapse if the performance factor is below 50%.
+To Our
+Stakeholders
+All share units granted in this way, comprising 60% PSUs and 40% RSUs, have a vesting period of
+approximately four years. At the end of the vesting period, the corresponding share units are non-
+forfeitable. The payout price used for the settlement is the arithmetic mean of the XETRA closing
+prices of the SAP share 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 capped at 300% of the grant price.
+The LTI tranche is cash-settled and paid in euros after the Annual General Shareholders' Meeting of
+the corresponding year.
+retention of our Executive Board members, and to reward them for the long-term SAP share price
+performance as compared to its main peer group (Peer Group).
+0%
+70%
+Operating income
+50%
+Total revenue
+150%
+Cloud revenue
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+80%
+200%
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+The number of FSUs initially awarded is multiplied by a performance factor. The performance factor
+consists of three equally weighted individual performance indicators relating to the three non-IFRS
+KPIs at constant currencies, derived from SAP's long-term strategy: total revenue, cloud revenue, and
+operating income. The performance period throughout which the target achievement for these three
+KPIs is measured starts at the beginning of the financial year in which the FSUs are awarded and
+concludes upon the end of the second year following the year in which the share units were awarded.
+A numerical target value equaling 100% target achievement is set for each KPI. This constitutes, in
+each case, a cumulative value for the three years of the performance period.
+The LTI 2020 is a long-term, multi-year performance-based compensation element that is granted in
+annual tranches. The LTI 2020 reflects SAP's long-term strategy and thus sets uniform incentives for
+the Executive Board members to achieve key targets from the long-term strategic plans. The LTI 2020
+also serves to reward the Executive Board members for long-term SAP share price performance as
+compared to the market, thus ensuring that shareholders' interests are also honored. In addition, the
+LTI 2020 includes a component to ensure long-term retention of our Executive Board members.
+The LTI 2020 is a virtual share program under which annual tranches with a term of approximately four
+years each are granted. When the individual tranches are granted, a certain grant amount specified in
+the Executive Board member's service contract is converted into virtual shares (Share units). For this
+purpose, the grant amount is divided by the price of the SAP share which corresponds to the
+arithmetic mean of the SAP share price on the 20 trading days after scheduled publication of the
+preliminary results for the fourth quarter and the year as a whole (grant price). The share units
+allocated are composed of 1/3 Financial Performance Share Units (FSUS), 1/3 Market Performance
+Share Units (MSUs), and 1/3 Retention Share Units (RSUs). All three types of share units have a
+vesting period of approximately four years. In contrast to RSUs, FSUS and MSUS are subject to
+changes in quantity. In this context, the following applies:
+SAP Long-Term Incentive Program 2020 (LTI 2020)
+a) Cash-Settled Share-Based Payments
+Our major share-based payment plans are described below.
+171
+191
+1,647
+Performance factor
+90%
+100%
+110%
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+188/338
+187/338
+The purpose of the LTI 2016 Plan was to reward our Executive Board members for the annual
+achievement of SAP's operating profit (non-IFRS at constant currencies) targets, to ensure long-term
+Long-Term Incentive 2016 Plan (LTI 2016 Plan)
+The performance of the share units is linked to the performance of the SAP share price, including
+dividend payments. Accordingly, an amount is paid out for each share unit which equals the SAP
+share price plus those dividends disbursed in respect of an SAP share in the period from the
+beginning of the year in which the share units were awarded until the end of the third year following
+the year in which the share units were awarded. The arithmetic mean of the SAP share price on the
+20 trading days after scheduled publication of the preliminary results for the fourth quarter and the
+year as a whole will be used as the SAP share price. The payout amount per share unit, including the
+dividend amounts due on the share units, is capped at 200% of the grant price. The tranche is cash-
+settled and paid in euros after the Annual General Meeting of Shareholders of the corresponding year.
+If an Executive Board member's service contract is terminated before the end of the third year
+following the year in which the share units were granted, 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.
+Ranking
+75th percentile
+Median
+25th percentile
+0%
+50%
+100%
+150%
+200%
+Performance factor
+The number of MSUS initially awarded is likewise multiplied by a performance factor. The
+performance factor depends on the amount of the TSR on the SAP share, measured for an entire
+performance period of approximately three years, compared to the TSR for NASDAQ-100 companies.
+If the TSR on the SAP share equals the median, the performance factor will be 100%. If the TSR on
+the SAP share over the performance period is negative, the maximum performance factor will,
+however, in deviation from the summary above, be 100%.
+Target achievement
+130%
+120%
+An LTI tranche was granted annually and has a term of four years (2016-2019 tranches). Each grant
+started with determining a grant amount in euros. The grant amount was based on the Executive
+Board members' contractual LTI target amount and the operating profit target achievement for the
+previous year. The Supervisory Board set the grant amount at a level between 80% and 120% of the
+contractual LTI target amount, taking into account the operating profit target achievement. This grant
+amount was converted into virtual shares, referred to as share units, by dividing the grant amount by
+the grant price. The grant price was the arithmetic mean of the XETRA closing prices of the SAP share
+on the 20 trading days following the publication of SAP's fourth-quarter results.
+Combined Group
+Management Report
+100%
+Sustainability
+€ millions
+Cost of cloud
+Cost of software
+Cost of services
+Research and development
+Sales and marketing
+2021
+2020
+2019
+59
+40
+56
+Share-Based Payment Expenses by Functional Area
+70
+82
+266
+175
+246
+513
+296
+429
+655
+360
+562
+General and administration
+1,230
+55
+The operating expense line items in our income statement include the following share-based payment
+expenses:
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Consolidated Financial Further Information on
+Statements IFRS
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+(B.3)
+Share-Based Payments
+Accounting for Share-Based Payments
+Classification in the Income Statement
+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
+recognized for these share-based payments. The fair value of the share units granted under the
+LTI 2016 Plan are dependent on our performance against a group of peer companies (Peer Group
+Index), the volatility, and the expected correlation between the price of the index and our share price.
+The fair value of the share units granted under the LTI 2020 are dependent on our performance
+against the total shareholder return (TSR) for NASDAQ-100 companies, the volatility, and the
+expected correlation between the TSR of the NASDAQ-100 companies and our TSR.
+We believe that the expected volatility is the most sensitive assumption we use in estimating the fair
+values of our share options. Regarding future payout under our cash-settled plans, the SAP share
+price is the most relevant factor. With respect to our LTI 2016 Plan, we believe that future payout will
+be significantly impacted not only by our share price but also by the relative performance against the
+Peer Group Index. With respect to our LTI 2020, we believe that future payout will be significantly
+impacted not only by our share price but also by the relative performance against the NASDAQ-100
+companies. Future payouts under our LTI 2020 will also be dependent on meeting non-market-based
+performance conditions based on SAP's long-term strategy. The latter, however, is not incorporated
+into our fair value calculation but leads to adjustments of the quantity of awards granted. Changes in
+these factors could significantly affect the estimated fair values as calculated by the valuation model,
+and the future payout.
+The fair values of our equity-settled Qualtrics Plan equal the Qualtrics share price at grant date, as the
+expected dividend yield is 0%. The future settlement of Performance Share Units (PSUs) under this
+plan will also be dependent on meeting non-market-based Qualtrics performance conditions.
+Under certain programs, we grant our employees discounts on purchases of SAP shares. Since those
+discounts are not dependent on future services to be provided by our employees, the discount is
+recognized as an expense when the discounts are granted.
+Presentation in the Statements of Cash Flows
+We present the payments of our share-based payment plans separately in our Statements of Cash
+Flows under cash flows from operating activities. As a result, the changes in other assets and in other
+liabilities presented in the reconciliation of operating cash flow do not consider share-based payment-
+related assets or liabilities.
+185/338
+186/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+157
+461
+Share-based payments cover cash-settled and equity-settled awards issued to our employees. The
+respective expenses are recognized as employee benefits and classified in our Consolidated Income
+Statements according to the activities that the receiving employees perform.
+2,794
+-0.75 to -0.11
+Risk-free interest rate, depending on maturity (in %)
+107.22
+107.22
+107.22
+107.22
+Share price
+Other¹
+Other¹
+Monte Carlo
+Monte Carlo
+Option pricing model used
+ΝΑ
+Information how fair value was measured at measurement date
+33.66
+105.52
+94.75
+72.94
+RSU Plan
+(2017-2020
+Tranches)
+Tranches)
+LTI 2020
+(2020 Tranche)
+Additional
+Information
+LTI 2016 Plan
+(2017-2019
+€, unless otherwise stated
+Share-based payment expenses
+Fair Value and Parameters Used at Year End 2020 for Cash-Settled Plans
+Weighted average fair value as at 12/31/2020
+-0.77 to -0.32
+Qualtrics
+Rights
+Expected volatility (in %)
+1,835
+-0.77 to -0.37
+1,084
+Thereof cash-settled share-based payments
+1,147
+893
+Thereof equity-settled share-based payments
+14,870
+The risk-free interest rate is derived from German government bonds with a similar duration. The SAP
+dividend yield is based on expected future dividends.
+For the LTI 2020 valuation, the NASDAQ-100 Total Return Index on December 31, 2021, was
+US$19,217.94 (2020: US$15,072.29). The expected volatility of the NASDAQ-100 companies of 36%
+to 38% (2020: 36%), and the expected correlation of SAP and the NASDAQ-100 companies of 31% to
+34% (2020: 31%) are based on historical TSR data for SAP and the NASDAQ-100 companies.
+For the LTI 2016 Plan valuation, the Peer Group Index price on December 31, 2021, was US$593.37
+(2020: US$481.65); the expected dividend yield of the index of 1.00% (2020: 1.14%), the expected
+volatility of the index of 17% to 18% (2020: 26% to 31%), and the expected correlation of the SAP
+share price and the index price of 35% to 36% (2020: 27% to 30%) are based on historical data for
+the SAP share price and index price.
+1.5
+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.
+1.0
+1,664
+30
+3.2
+NA
+Expected dividend yield (in %)
+1.54
+ΝΑ
+NA
+1.54
+1.54
+Weighted average remaining life of awards outstanding as at 12/31/2020
+(in years)
+190/338
+1.2
+34 to 42
+Dec.
+May
+June
+July
+Aug.
+Sept.
+Oct.
+Nov.
+Apr.
+8.
+6.
+May 13, 2021 Ex dividend, €1.85 per share
+2.
+January 14, 2021 Preliminary results Q4 2020
+7.
+July 21, 2021 Financial results Q2 2021
+3.
+October 12, 2021 Preliminary results Q3 2021
+Mar.
+January 29, 2021 Final results Q4/ Full year 2020
+1. December 30, 2020 Closing Price €107.22
+Feb.
+120
+95
+Further Information on
+Sustainability
+Additional
+Information
+4.
+SAP Stock Versus Major Indices (December 30, 2020 to December 30, 2021)
+percent
+130
+SAP Stock (Xetra)
+DAX 40 Performanceindex (Xetra)
+NASDAQ 100 Index
+125
+5
+115
+110
+1
+3
+68
+105
+100
+4
+6
+11
+Jan.
+April 13, 2021 Preliminary results Q1 2021
+WKN/ISIN
+October 21, 2021 Final results Q3 2021
+NYSE (ADRs)
+Reuters
+Bloomberg
+Weight (%) in indexes as at 12/31/2021¹
+DAX 40
+Prime All Share
+CDAX
+HDAX
+Dow Jones STOXX 50
+IDS and symbols
+Dow Jones EURO STOXX 50
+Return on SAP Common Stock -
+-
+Percent, unless otherwise stated
+Initial investment €10,000
+WKN 716460/ISIN DE007164600
+Date of investment
+Period of investment
+Consolidated Financial
+Statements IFRS
+Value as at 12/31/2021¹ (in €)
+1 Source: Qontigo
+United States (ADRs)
+Germany
+Listings
+5.
+April 22, 2021 Final results Q1 2021
+10.
+December 30, 2021 Closing price €124.90
+Continuous Engagement with the Investment Community
+SAP continuously engaged with the investment community in 2021. Throughout the year, members of
+the Executive Board of SAP SE and the Investor Relations (IR) team discussed our latest strategy, its
+execution and business development, and how SAP was helping customers in the new virtual world,
+with institutional investors, analysts, and private investors worldwide. Given the ongoing pandemic,
+most events were held virtually.
+The IR team, together with senior management, held more than 100 meetings in 2021 to maintain the
+dialogue with investors and analysts, including one-on-one phone calls, video conferences, and virtual
+road shows as well as a limited number of in-person meetings under strict hygiene standards.
+Members of the Executive Board and the IR team participated in more than 20 conferences
+worldwide. In June, we hosted the virtual Financial Analyst Conference as a part of our SAPPHIRE
+NOW event for investors and financial analysts. Once again, SAP held the 2021 Annual General
+Meeting of Shareholders (AGM) virtually without physical presence.
+We continued our dialogue with socially responsible investors (SRI), providing them with insights into
+our environmental, social, and corporate governance policies. SAP's leadership in this area is being
+recognized by leading organizations. SAP was one of only three enterprise software companies to
+make the Carbon Disclosure Project's (CDP) A List 2021. And SAP remains the software industry
+leader in the Dow Jones Sustainability Indices for the 15th year in a row.
+SAP representatives engaged with retail shareholders at virtual events. The IR team and the Treasury
+team also maintained regular communication with the debt investor community.
+We provide a wide range of information online about SAP and its shares. Our communications
+channels include our Twitter feed @sapinvestor and the quarterly SAP INVESTOR magazine.
+Shareholders can reach the IR team directly by telephone hotline and by e-mail at investor@sap.com.
+We also publish an overview of the latest analyst consensus in collaboration with Vara Research.
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+In addition, we provide a Webcast for all key investor events at which members of our Executive
+Board speak, and we post all relevant presentations on the Investor Relations Web site.
+Key Facts About SAP Stock/SAP ADRS
+9.
+Combined Group
+Management Report
+12/338
+SAP Integrated Report 2021
+Nationality: German
+Year of Birth: 1966
+Germany; Supervisory Board, Schaeffler AG, Herzogenaurach, Germany
+Luka Mucic
+Chief Financial Officer
+Joined SAP: 1996
+Appointed to the Executive Board: 2014
+Current Executive Board term expires: 2026
+Nationality: German
+Current Executive Board term expires: 2023
+Year of Birth: 1971
+Supervisory Board, HeidelbergCement AG, Heidelberg, Germany
+11/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Other board memberships:
+Appointed to the Executive Board: 2021
+Joined SAP: 2021
+Chief People & Operating Officer, Labor Relations Director
+Average annual return
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+SAP Executive Board
+Christian Klein
+Chief Executive Officer (CEO)
+Joined SAP: 1999
+Appointed to the Executive Board: 2018
+Current Executive Board term expires: 2025
+Nationality: German
+Year of Birth: 1980
+Other board memberships:
+Supervisory Board, adidas AG, Herzogenaurach, Germany
+Sabine Bendiek
+Further Information on
+Sustainability
+Additional
+Information
+Juergen Mueller
+Chief Technology Officer
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Investor Relations
+New Highs Despite Challenging Environment
+Investment appetite remained high during 2021, enabling the markets to develop favorably overall
+and even break new records in the final months of the year. Macroeconomic issues were the main
+driver of market movements, including the ongoing COVID-19 pandemic and its effects on global
+supply chains. Further, persistent supply bottlenecks for key products, such as semiconductors, and a
+jump in energy, and commodity prices slowed down economic growth significantly. Rising inflation,
+and interest rate concerns also contributed to volatility in the marketplace. SAP stock largely followed
+general market trends in this environment, gaining 16.5% on the year to finish higher than the DAX
+(+15.8%) but below the NASDAQ-100 (+26.6%). With a market capitalization of €153.4 billion at year
+end, SAP was the second most valuable company on the DAX.
+Cloud Strategy Resonates -SAP Stock Gains Ground
+SAP stock started the year at €107.22 (1, see graphic below), the Xetra closing price on
+December 31, 2020. Though buoyed temporarily at the end of January by the Qualtrics IPO, the share
+price reached its lowest level for the year of €101.78 just a few weeks later.
+Thanks also to good results in the first quarter of 2021 (4), (5), SAP stock was able to rally back in
+April, rising to an interim high of €120.70 before broad market rotation out of technology stocks and
+into value names triggered by interest rate concerns pushed it back down again. By contrast, the ex-
+dividend markdown of €1.85 (6) in May had no appreciable effect on the share price. SAP stock
+ultimately recovered in June and, continuing its upward trajectory, reached a new interim high of
+€125.78 in July following a clear buy recommendation from a major financial institution.
+SAP's strategic focus on cloud business resonated with the market: analysts particularly praised the
+benefits of cloud migration, the switch to a long-term, more profitable subscription model, and the
+'RISE with SAP' offering. Despite strong first-half results (7) attesting to the successful implementation
+of the cloud strategy, SAP shares declined 2.5% to €118.46 amidst a positive overall market. Market
+analysts pointed out that even more optimistic expectations had emerged prior to the earnings
+announcement.
+Increasing demand for technology shares in August, however, ultimately lifted SAP stock slightly
+above its previous high for the year, before mounting concerns about interest rates and the Chinese
+economy melted away gains in September.
+October then saw SAP stock benefit from stronger than expected preliminary results for the third
+quarter and a renewed guidance increase for the full year (8). Analysts were impressed above all with
+the strength of SAP's cloud business, and the share price jumped 3.9% to €121.50, but subsequent
+publication of our final third-quarter results (9), together with a reiteration of expected margin
+development in fiscal 2022, had a dampening impact on the share price. The share price nevertheless
+climbed to its high for the year of €128.98 by early November. The subsequent market downturn,
+triggered by new COVID-19 concerns, was almost made up for by the end of the year, with the share
+benefitting in December from positive industry news as well as a buy recommendation from another
+major financial institution, which had forecast accelerated cloud growth in 2022. SAP stock ultimately
+ended the fourth quarter at €124.90, or 16.5% above its opening price for the year.
+13/338
+14/338
+SAP
+SAP
+To Our
+Stakeholders
+Year of Birth: 1973
+Current Executive Board term expires: 2024
+Joined SAP: 2013
+Appointed to the Executive Board: 2019
+Current Executive Board term expires: 2024
+Nationality: German
+Year of Birth: 1982
+Scott Russell
+Customer Success
+Joined SAP: 2010
+Appointed to the Executive Board: 2021
+Current Executive Board term expires: 2024
+Nationality: Australian
+Year of Birth: 1973
+Thomas Saueressig
+SAP Product Engineering
+Joined SAP: 2004
+Appointed to the Executive Board: 2019
+Current Executive Board term expires: 2025
+Nationality: German
+Year of Birth: 1985
+Julia White
+Chief Marketing & Solutions Officer
+Joined SAP: 2021
+Appointed to the Executive Board: 2021
+Nationality: U.S. citizen
+Performance comparators
+Other board memberships: Executive Board, Bitkom e.V., Berlin,
+total return index
+18
+13
+13
+5
+5
+Lars Lamadé
+100%
+15
+15
+10
+10
+5
+5
+Monika Kovachka-Dimitrova
+100%
+25
+25
+20
+20
+18
+20
+100%
+1
+5
+5
+Dr. Qi Lu
+100%
+16
+16
+16
+11
+11
+तु
+5
+5
+Bernard Liautaud
+100%
+6
+6
+5
+5
+1
+Peter Lengler (since 10.08.2021)
+5
+5
+Margret Klein-Magar
+Panagiotis Bissiritsas
+(since 08.07.2021)
+67%
+2
+3
+1
+1
+1
+2
+Manuela Asche-Holstein
+100%
+9
+9
+6
+6
+3
+3
+Pekka Ala-Pietilä (until 12.05.2021)
+90%
+3
+3
+13
+13
+100%
+13
+13
+8
+8
+5
+5
+Prof. Dr. Gesche Joost
+95%
+8
+19
+14
+15
+5
+5
+Aicha Evans
+(until 07.07.2021)
+100%
+16
+16
+20
+18
+7
+12
+27
+22
+22
+5
+5
+Gunnar Wiedenfels
+100%
+15
+15
+13
+13
+2
+2
+Dr. Rouven Westphal (ab 12.05.2021)
+(until 09.08.2021)
+100%
+14
+14
+9
+27
+9
+100%
+5
+In the past fiscal year, the Supervisory Board took the key results from a Spring 2021 questionnaire
+reviewing the efficiency of the Supervisory Board's work as an opportunity to change the structure,
+size, and duties of its committees so as to further optimize their work and decision-making processes
+in the interest of good corporate governance. At its meeting on April 15, 2021, for example, it
+deliberated on proposals for reorganizing the Supervisory Board committees, as drawn up by the
+Personnel and Governance Committee based on the aforementioned efficiency review of the plenary
+and committee work. The Supervisory Board subsequently resolved on the new composition and
+structure of the committees by circular correspondence vote in May 2021. Some of the tasks of the
+committees were rearranged and some of the committees were renamed to better reflect their roles.
+In addition, the number of committees was partially reduced, or their memberships filled anew, as
+described in the section on the work of the committees below. Notably, the General and
+Compensation Committee was renamed to Personnel and Governance Committee, the Audit
+Committee was renamed to Audit and Compliance Committee, and the People and Organization
+Committee was renamed to People and Culture Committee. The Personnel and Governance
+Committee was downsized from 10 to eight members, and the number of seats on the Technology
+DAX 40 Performance
+Reorganization of Supervisory Board Responsibilities in Committees
+1 Helmut Stengele joined the Supervisory Board as an employee representative on October 29, 2021. As at December 31, 2021, he has
+not served on any committee, nor have there been any Supervisory Board meetings since his appointment. However, he did participate in
+four circular resolutions during this period.
+20/338
+100%
+10
+10
+7
+7
+3
+3
+Ralf Zeiger (until 28.10.2021)
+100%
+31
+31
+26
+26
+5
+James Wright
+5
+5
+Christa Vergien-Knopf
+5
+5
+Dr. Friederike Rotsch
+100%
+17
+17
+12
+12
+5
+5
+Christine Regitz
+100%
+28
+28
+23
+5
+5
+Gerhard Oswald
+92%
+29
+29
++4
+34
+NA
+NA
+100%
+21
+100%
+34
+$ ཟླ -
+ΝΑ
+NA
+13
+NA
+ΝΑ
+Helmut Stengele (since 29.10.2021)¹
+21
+21
+16
+16
+5
+5
+Heike Steck
+ΝΑ
+20
+23
+15
+5 years
+12/31/2016
+10.2
+26,461
+Average annual return
+Value at 12/31/2021¹ (in US$)
+10 years
+Period of investment
+12/31/2011
+Date of investment
+Percent, unless otherwise stated
+Initial investment US$10,000
+- 803054204 (CUSIP)
+-
+Return on SAP ADRs
+Additional
+Information
+Sustainability
+Consolidated Financial Further Information on
+Statements IFRS
+Combined Group
+Management Report
+To Our
+Stakeholders
+16,211
+SAP Integrated Report 2021
+10.1
+1 year
+1.50
+1.58
+32%
+1.85
+2.45
+€ | change since previous year
+Dividend per Share
+At the Annual General Meeting of Shareholders, the Executive Board and the Supervisory Board of
+SAP SE will recommend increasing the total dividend for fiscal year 2021 by approximately 32% to
+€2.45 per share (2020: €1.85). This includes a special dividend of €0.50 to celebrate SAP's 50th
+anniversary. The payout ratio would be 54% (2020: 41%). Excluding the special dividend, the ratio
+would be 43%.
+It is our policy to pay a dividend totaling 40% or more of IFRS profit after tax.
+Dividend Increased to €2.45
+1 Assuming all dividends were reinvested. Source: Bloomberg
+total return index
+26.9
+16.3
+14.3
+S&P 500 Composite —
+Performance comparators
+7.5
+10,745
+12/31/2020
+SAP
+16/338
+15/338
+7.54
+9.29
+8.6
+15,083
+5 years
+12/31/2016
+SAP GR
+SAPG.F or .DE
+803054204 (CUSIP)
+716460/DE0007164600
+New York Stock Exchange
+Berlin, Frankfurt, Stuttgart
+11.8
+30,575
+10 years
+12/31/2011
+13
+total return index
+REX General Bond -
+8.75
+8.06
+2.87
+4.21
+Technology Software Index
+35.0
+26.8
+23.8
+S&P North American
+total return index
+36.3
+14.5
+15.8
+1.40
+S&P 500 Composite ―
+0.2
+0.9
+15.8
+6.7
+10.4
+16.5
+11,649
+1 year
+12/31/2020
+-1.3
+17%
+1 Assuming all dividends were reinvested.
+5%
+In October 2020, SAP announced a revised corporate strategy in the form of an accelerated transition
+to the cloud, which resulted in a series of measures and investments in line with customer
+requirements. We continued to monitor and discuss with the Executive Board the implementation of
+this revised company strategy in 2021. We satisfied ourselves that the activities introduced by the
+Executive Board created room for organic innovation, expedited the harmonization of SAP's cloud
+business, and, last but not least, contributed to the good results for fiscal 2021. In this regard, the
+Executive Board reported, inter alia, on the progress made with respect to SAP Business Technology
+Platform (which companies can use to run own developments or existing SAP or third-party services),
+and on its measures to implement SAP's People Strategy. A further significant step was the acquisition
+of Signavio, a provider of cloud solutions for business process management. We approved this
+acquisition during our extraordinary meeting on January 25, 2021, on recommendation of the Finance
+and Investment Committee because we, like the Executive Board, consider investment in business
+process intelligence (BPI, or applications and tools for capturing and analyzing process data) to be
+strategically worthwhile. BPI enables SAP to leverage the experiences of its customers to identify and
+eliminate inefficiencies and vulnerabilities of their business operations. Prior to this, in its meetings on
+January 15 and 25, 2021, the Finance and Investment Committee had thoroughly discussed the
+opportunities and risks associated with this acquisition as well as the two fairness opinions (external
+assessments of the purchase price determination and company valuation of the planned acquisition).
+At our meeting on February 24, 2021, the Executive Board presented the RISE with SAP offering to us.
+Introduced at the end of January 2021, this flexible cloud service package provides customers with a
+holistic approach for accelerating their transition to the cloud and transforming into an intelligent
+enterprise. As part of its ongoing reports to the full Supervisory Board, the Executive Board kept us
+apprised of the package's success among SAP customers. When we met in April and July 2021, we
+deliberated with the Executive Board on the Company's China strategy, the future direction of the
+marketing strategy, and HR measures to attract new cloud development talent.
+Strategy and RISE with SAP
+The Supervisory Board and its committees also convened wholly or partly without the Executive
+Board as necessary in the reporting year to deliberate on items that pertained to the Executive Board
+or required internal discussion among Supervisory Board members alone. This was the case in three
+of the plenary sessions, and in five committee meetings. In addition, the shareholder representatives
+and the employee representatives independently discussed individual agenda items as required prior
+to the adoption of resolutions in plenary sessions. The Supervisory Board addressed the following key
+topics during the year:
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+In the past fiscal year, the Supervisory Board of SAP SE held four ordinary meetings and one
+extraordinary meeting at which we deliberated and resolved on all matters of relevance to the
+Company. Due to the ongoing travel and contact restrictions imposed on us as a result of the COVID-
+19 pandemic, we also conducted the majority of our plenary meetings and Committee meetings,
+which are normally held as physical meetings, in 2021 as video conferences or as hybrid sessions,
+where some members attended physically and the remainder online. We also adopted eleven
+resolutions by correspondence vote. The following table provides an overview of the individual
+members' attendance at the Supervisory Board's plenary sessions and committee meetings in the
+year under review.
+Supervisory Board Meetings and Resolutions
+The Supervisory Board chairperson and the CEO were in continuous contact, which meant the
+Supervisory Board chairperson was always informed without delay of all important events that were
+significant for assessing SAP's situation and progress or for the management and governance of the
+Company. Moreover, the chairperson of the Supervisory Board discussed SAP's strategy, business
+performance, risks, risk management, compliance, and other key topics and decisions regularly with
+the CEO. This enabled the Supervisory Board chairperson to update the members of the Supervisory
+Board between meetings.
+The content and scope of the Executive Board's reports to us fully met our requirements for them: The
+Executive Board came to Supervisory Board meetings for discussion of the agenda items. We
+questioned and probed the Executive Board to satisfy ourselves that the information it gave us was
+plausible. All transactions requiring approval by the Supervisory Board whether by law, the Articles of
+Incorporation, or the Supervisory Board's list of transactions requiring its consent were carefully
+examined and discussed with the Executive Board prior to approval.
+The Supervisory Board received regular, full, and timely reports from the Executive Board, both from
+members in person and in written documents. The Supervisory Board was also in regular exchange
+with senior internal officers through its various committees. This ensured that we were always up to
+date, even between meetings, on the Company's strategy, planning, business performance, risks, risk
+management, compliance (in other words, adherence to laws, to the Company's Articles of
+Incorporation, and to internal policies), and on transactions of special significance for SAP. In its
+reports, the Executive Board also informed us in particular where business deviated from plan or
+target, and why. In addition, the Supervisory Board members can turn to SAP Digital Boardroom at
+any time to call up comprehensive metrics for all business areas in real time and generate evaluations
+and analyses as required. The solution affords us an up-to-date view of SAP's business performance
+whenever we need it - with maximum transparency.
+In the past fiscal year, the Supervisory Board of SAP SE advised the Executive Board on an ongoing
+basis with regard to the management of the Company and kept the Executive Board's management of
+the Company under observation for legal compliance, adherence to proper accounting principles,
+business focus, and expediency. We were involved whenever decisions of fundamental importance to
+SAP were made.
+Collaboration Between the Supervisory Board and the Executive Board
+19/338
+In the following, we would like to inform you about the work of the Supervisory Board in the fiscal year
+2021.
+SAP Integrated Report 2021
+Combined Group
+Management Report
+5
+5
+Prof. Dr. h.c. Hasso Plattner
+7%
+Participation
+in %
+Participation
+Meetings
+Participation
+Meetings
+Participation
+Meetings
+Supervisory Board Members
+All Meetings
+Committees
+Plenum
+Meeting Participation of SAP SE Supervisory Board Members During Fiscal Year 2021
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+To Our
+Stakeholders
+Dear Shareholders,
+SAP
+Additional
+Information
+Shareholder Structure
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+SAP's capital stock as at December 31, 2021, was €1,228,504,232 (2020: €1,228,504,232). It is issued
+as 1,228,504,232 no-par shares, each with an attribute value of €1 in relation to capital stock.
+Capital Stock Unchanged
+2021
+2020
+Report by the Supervisory
+Board
+2019
+2018
+12%
+2017
+Applying the definition accepted on the Frankfurt Stock Exchange, which excludes treasury stock from
+the free float, as at December 31, 2021, the free float stood at 85% (December 31, 2020: 86%).
+Institutional
+Investors
+Stakeholders
+SAP
+Management Report
+Combined Group
+Europe (ex Germany)
+16%
+Stakeholders
+To Our
+SAP Integrated Report 2021
+18/338
+17/338
+*40% of institutional investors are classified as ESG investors.
+4%
+Consolidated Financial
+Statements IFRS
+Rest of World
+Founders 11 %
+4 %
+Germany 7%
+North America 21 %
+Treasury
+Further Information on
+Sustainability
+United Kingdom/
+Ireland
+14%
+Retail / Not identified 24 %
+55
+408
+419
+€ millions
+369
+Defined Benefit Plans
+Present Value of the Defined Benefit Obligations (DBO) and the Fair Value of the Plan Assets
+93
+Additional
+Information
+Total Expense of Pension Plans
+Pension expenses
+314
+326
+346
+2019
+2020
+2021
+Defined benefit pension plans
+Defined contribution plans
+Present value of the DBO
+€ millions
+62
+Fair value of the plan assets
+2020
+Net defined benefit liability (asset) as % of:
+216
+Sustainability
+616
+189
+667
+1,127
+1,194
+2021
+2020
+2021
+Net defined benefit liability (asset)
+2020
+2020
+2021
+Total
+Other Foreign Post-
+Employment Plans
+Foreign Plans
+Domestic Plans
+Present value of all defined
+€ millions
+Sensitivity Analysis
+Non-current other financial assets
+Non-current provisions
+2021
+Consolidated Financial Further Information on
+Statements IFRS
+Information
+Combined Group
+Weighted Average Grant
+Date Fair Value
+Awards
+12/31/2021
+Forfeited
+Exercised
+Granted
+Exchanged
+12/31/2020
+Thousands, unless otherwise stated
+Qualtrics Plan¹
+Changes in Outstanding Awards Under Our Equity-Settled Plans
+In conjunction with the acquisition of Clarabridge in 2021, Qualtrics assumed outstanding Clarabridge
+stock options, which were converted into Qualtrics options. The conversion factor was set to preserve
+the intrinsic value of the outstanding Clarabridge options. The replacement awards mirror the terms of
+the replaced awards except that the awards are settled by issuing Qualtrics shares while retaining
+their initial vesting schedules. For some Qualtrics options, additional vesting terms were agreed. The
+majority of the assumed options were either fully vested or partially vested as at the acquisition date
+and had a strike price well below the fair value of the awards at the conversion date. The modification
+date fair value of the stock options was determined to approximate the intrinsic value of the options
+with an underlying Qualtrics share price of US$43.88.
+Qualtrics Equity-Settled Options Replacing Clarabridge Options
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+2,077
+SAP
+0
+NA
+12,872
+US$30.04
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+193/338
+The discount rates used in measuring our post-employment benefit assets and liabilities are derived
+from rates available on high-quality corporate bonds and government bonds for which the timing and
+amounts of payments match the timing and the amounts of our projected pension payments. Net
+interest expense and other expenses related to defined benefit plans are recognized as employee
+benefits expenses and classified in our Consolidated Income Statements according to the activities
+that the employees owning the awards perform. Since our domestic defined benefit pension plans
+primarily consist of an employee-financed post-retirement plan that is fully financed with qualifying
+insurance 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 service cost. Total expenses on defined benefit pension plans comprise related current
+and past service costs as well as interest income and expense.
+Defined Benefit Pension Plans
+Amounts for domestic and foreign defined contribution plans are based on a percentage of the
+employees' salaries or on the amount of contributions made by employees. In Germany and some
+other countries, we make contributions to public pension schemes that are operated by national or
+local government or similar institutions. Expenses for such local state pension plans are recognized as
+short-term employee benefits, that is, social security expenses.
+Defined Contribution Plans
+Pension Plans and Similar Obligations
+Management Report
+(B.4)
+The weighted average remaining life of Qualtrics Plan awards outstanding as at December 31, 2021
+(in years) was 3.0 years.
+1 The number of awards and their weighted average grant date fair values in this table include Qualtrics RSUs and Qualtrics equity-settled
+options replacing Clarabridge options.
+US$43.13
+84,018
+US$41.29
+-2,241
+US$33.43
+-7,467
+US$44.27
+80,856
+Under Qualtrics' equity-settled plans, we expect to transfer US$300 million to the tax authority to
+settle the employees' tax obligation in 2022.
+1,932
+1,617
+1,112
+2020
+2021
+2019
+2020
+2021
+2019
+2020
+2021
+2019
+2020
+2021
+Total
+Other Foreign Post-
+Employment Plans
+Foreign Plans
+Domestic Plans
+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.
+rate
+3.7
+3.0
+3.1
+0.3
+2019
+benefit obligations if:
+Discount rate was 50 basis
+1,134
+159
+After completion of a voluntary exchange offer for eligible Qualtrics employees in conjunction with the
+IPO on January 28, 2021, 5.4 million cash-settled Qualtrics Rights and 1.3 million SAP RSU awards
+were exchanged into 12.8 million equity-settled Qualtrics RSU awards. The terms and conditions of
+the voluntary exchange offer, including the exchange ratio, were designed to preserve the intrinsic
+value of the Qualtrics Rights and SAP RSUs that were tendered. The modification date fair value of
+the Qualtrics RSU awards was US$30.00, which is equivalent to the Qualtrics IPO price.
+Furthermore, a subsequent exchange offer for certain Qualtrics employees in Australia took place in
+September 2021.
+204
+223
+576
+663
+714
+1,090
+1,195
+1,260
+0.4
+Discount rate was 50 basis
+points lower
+1,824
+1,964
+154
+185
+203
+495
+573
+626
+968
+1,066
+points higher
+0.5
+0.8
+0.9
+3
+0
+0
+0
+0
+0
+0
+0
+0
+225
+4
+116
+110
+89
+15
+11
+1,691
+1,852
+73
+91
+506
+578
+125
+1,183
+27
+35
+1.2
+Discount
+2019
+2020
+2021
+2019
+2020
+2021
+2019
+2020
+31
+2021
+Plans
+Other Foreign Post-Employment
+Foreign Plans
+Domestic Plans
+Significant Actuarial Assumptions
+The following significant weighted average assumptions were used for the actuarial valuation of our
+domestic and foreign pension liabilities as well as other post-employment benefit obligations as at the
+respective measurement date:
+Of the present value of the DBO of our domestic plans, €1,125 million (2020: €1,054 million) relate to
+plans that provide for lump-sum payments not based on final salary; of the present value of the DBO
+of our foreign plans, €524 million (2020: €479 million) relate to plans that provide for annuity
+payments not based on final salary.
+66
+65
+32
+Percent
+Exchange Offer
+0
+Qualtrics Omnibus Plan (Qualtrics Plan)
+340
+469
+12/31/2021
+-243
+-1,165
+-70
+-57
+Forfeited
+-5,451
+-1,309
+NA
+ΝΑ
+Exchanged
+-1,780
+-8,092
+0
+-92
+Exercised
+ΝΑ
+153
+ΝΑ
+18,783
+44
+Total carrying amount (in € millions) of liabilities as at
+12/31/2020
+2020
+Weighted average share price (in €) for awards exercised in
+0
+0
+4
+38
+12/31/2021
+0
+0
+3
+-150
+32
+Total intrinsic value of vested awards (in € millions) as at
+1
+1,260
+15
+28
+193
+1,027
+6
+49
+12/31/2021
+12/31/2020
+2021
+Adjustment based upon KPI target achievement
+12,204
+Granted
+16,007
+16,128
+0
+1,110
+12/31/2019
+Qualtrics
+Rights
+RSU Plan
+(2017-2021
+Tranches)
+LTI 2020
+(2020-2021
+Tranches)
+Tranches)
+(2017-2019
+Thousands, unless otherwise stated
+LTI 2016 Plan
+Changes in Outstanding Awards Under Our Cash-Settled Plans
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+Management Report
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+2,196
+202
+9,238
+0
+Adjustment based upon KPI target achievement
+238
+0
+Granted
+7,518
+16,993
+172
+767
+12/31/2020
+-699
+-1,164
+0
+-30
+Forfeited
+-7,791
+-7,204
+0
+-129
+Exercised
+ΝΑ
+-5
+ΝΑ
+-211
+-3
+124.03
+ΝΑ
+109.75
+2020
+2021
+Total
+Others
+Qualtrics Plan
+Own
+€ millions
+Recognized Expense for Equity-Settled Plans
+b) Equity-Settled Share-Based Payments
+Additional
+Information
+Sustainability
+Consolidated Financial Further Information on
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+192/338
+191/338
+24
+2019
+200
+191
+171
+Qualtrics Equity Awards
+As a result of our Own SAP Plan, we have commitments to grant SAP shares to employees. We intend
+to meet these commitments by reissuing treasury shares or through an agent who administers the
+equity-settled programs and purchases shares on the open market. We have fulfilled the obligations
+of Own through an agent.
+5.2
+5.5
+5.7
+2019
+2020
+2021
+Own
+Millions
+59
+Numbers of Shares Purchased
+Own SAP Plan (Own)
+171
+191
+1,647
+0
+0
+21
+0
+0
+1,426
+Under Own, employees have the opportunity to purchase, on a monthly basis, SAP shares without
+any required holding period. The investment per each eligible employee is limited to a percentage of
+the respective employee's monthly base salary. SAP matches the employee investment by 40% and
+adds a subsidy of €20 per month for non-executives. This plan is not open to members of the
+Executive Board.
+19
+21
+54
+Share-Based Payment Balances
+11
+1,139
+9
+-11
+2021
+132
+760
+6
+-9
+€ millions
+2020
+1,087
+NA
+44
+2019
+Total expense (in € millions) recognized in
+105.10
+107.69
+NA
+106.68
+113.34
+461
+Qualtrics grants equity awards settled with Qualtrics shares to eligible employees and the executive
+officers of Qualtrics. Qualtrics intends to meet these commitments by issuing shares. Granted units
+are either RSU awards subject to a time-based vesting, or PSUs subject to the achievement of certain
+performance conditions, as established by Qualtrics' board of directors and measured annually
+(Qualtrics RSUs). Additionally, there are Qualtrics equity-settled options resulting from acquisitions as
+described below. The RSUs mainly vest with 25% one year after grant and ratably thereafter for 12
+quarters. The PSUs vest in four equal annual installments and are measured annually, with vesting of
+100% of each installment in the event that the performance targets are achieved, and ratable
+downward adjustments in the event that the performance targets are partially achieved.
+Share-based payment liabilities
+Share-based payment liabilities as % of
+16
+4,643
+6,063
+860
+5,203
+863
+1,302
+462
+839
+Non-Current
+Other non-financial liabilities
+Current
+Non-Current
+Current
+2021
+5,413
+770
+1,317
+454
+Total
+2020
+Other non-financial liabilities
+Total
+2,062
+Segment gross profit
+194/338
+Cost of software licenses and support
+-2,147
+-2,371
+-2,315
+-2,737
+-2,685
+Cost of cloud
+23,051
+23,446
+22,965
+23,816
+23,502
+Total segment revenue
+355
+289
+285
+343
+339
+Services
+22,696
+23,157
+-1,716
+22,680
+-1,733
+-1,790
+Other segment expenses
+Segment gross profit
+-4,478
+-4,560
+-4,464
+-4,882
+-4,808
+Total cost of revenue
+-421
+-399
+-393
+-412
+-406
+Cost of services
+-4,057
+-4,161
+-4,071
+-4,470
+-4,401
+Cost of cloud and software
+-1,910
+-1,757
+Segment profit
+23,473
+Cloud and software
+Constant
+Currency¹
+Actual
+Currency
+Constant
+Currency¹
+Actual
+Currency
+€ millions
+2019
+2020
+2021
+Additional
+Information
+Sustainability
+Consolidated Financial Further Information on
+Statements IFRS
+Combined Group
+Management Report
+Applications, Technology & Support
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+199/338
+Information about assets and liabilities and additions to non-current assets by segment are not
+regularly provided to our Executive Board. Goodwill by segment is disclosed in Note (D.2).
+Revenues and expenses of our operating but non-reportable segments, and the certain activities
+managed on corporate level, as outlined above, are presented under the Other revenue and Other
+expenses items in the reconciliation in Note (C.2).
+SAP headquarter functions which are exclusively managed on corporate level, such as finance,
+accounting, legal, human resources, global business operations, and corporate marketing, are not
+included in the results of our reportable segments.
+Actual
+Currency
+23,163
+Cloud
+8,661
+16,065
+15,473
+15,139
+14,812
+14,654
+Software licenses and support
+11,542
+11,707
+11,502
+11,576
+11,410
+Software support
+4,523
+3,765
+3,637
+3,236
+3,244
+Software licenses
+6,632
+1,825
+7,541
+8,509
+■ Restructuring expenses
+18,694
+18,500
+-78
+-112
+-110
+-128
+-125
+Cost of services
+-33
+-43
+-43
+-66
+-65
+Cost of cloud and software
+0
+0
+0
+0
+0
+Cost of software licenses and support
+-33
+-43
+-43
+Total cost of revenue
+-66
+-190
+-152
+200/338
+1 The 2021 constant currency amounts are only comparable to 2020 actual currency amounts; 2020 constant currency amounts are only comparable to 2019 actual currency
+amounts.
+_9
+-5
+-4
+44
+44
+Segment profit
+-407
+-545
+-533
+-719
+-696
+Other segment expenses
+398
+541
+528
+763
+739
+-110
+-155
+-194
+18,934
+-65
+508
+Actual
+Currency
+Constant
+Currency¹
+Actual
+Currency
+€ millions
+2019
+2020
+2021
+Qualtrics
+1 The 2021 constant currency amounts are only comparable to 2020 actual currency amounts; 2020 constant currency amounts are only comparable to 2019 actual currency
+amounts.
+9,773
+9,934
+9,722
+9,718
+9,567
+-8,800
+-8,953
+-8,779
+-9,216
+-9,127
+18,573
+18,887
+Constant
+Currency¹
+Cost of cloud
+Actual
+Currency
+Cloud and software
+696
+681
+957
+929
+Total segment revenue
+137
+166
+162
+177
+172
+Services
+371
+529
+518
+780
+757
+371
+529
+518
+780
+757
+Cloud
+■ Share-based payment expenses
+7,685
+■
+Acquisition-related charges such as amortization expense and impairment charges for
+intangibles acquired in business combinations and certain stand-alone acquisitions of
+intellectual property (including purchased in-process research and development) as well as
+sale/disposal gains and losses for these intangibles, settlements of pre-existing business
+relationships in connection with a business combination, and acquisition-related third-party
+expenses
+3,147
+4,115
+398
+3,717
+Other employee-related
+Total
+Current Non-Current
+Total
+2020
+2021
+Current Non-Current
+€ millions
+Other Employee-Related Liabilities
+As far as the obligation for long-term employee benefits is secured by pledged reinsurance coverage,
+it is offset with the relating plan asset.
+Accounting Policy
+Other Employee-Related Obligations
+(B.5)
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+3,464
+Combined Group
+liabilities
+5,203
+The program established is planned to start shortly after the program plan is approved and is
+expected to be completed in a timeframe that makes significant changes to the plan unlikely, and
+The program has been announced to the parties affected or has commenced.
+A detailed and documented restructuring plan has been approved by our Executive Board, a
+member thereof, or a direct report of an Executive Board member, and
+SAP has designed a program that materially changes the scope of one of our businesses or the
+manner in which the business is conducted, and
+We only recognize provisions for restructuring if and when the following occurs:
+Recognition of Restructuring Provisions
+(B.6) Restructuring
+Other employee-related liabilities mainly relate to obligations from bonuses and sales commissions,
+outstanding vacation, time credits accumulated in the working time account, employee-related social
+security expenses, severance payments outside restructuring programs, and jubilee expenses.
+Other non-financial liabilities
+64
+41
+68
+68
+46
+71
+liabilities as % of
+Other employee-related
+5,413
+770
+4,643
+6,063
+860
+Other non-financial liabilities
+We consider whether a change in business is material based on the business affected rather than for
+SAP as a whole. In judging whether a unit qualifies as a business for restructuring purposes, we
+consider if the unit has its own management team, has access to all inputs and processes necessary
+to provide outputs, and generates or could generate revenues. The materiality of a change to a
+business is assessed based on both the size and the nature of the change and therefore does not
+necessarily involve a material quantitative impact on our financial statements.
+Stakeholders
+SAP Integrated Report 2021
+Quoted in an
+2020
+2021
+Insurance policies
+Corporate bonds
+Equity investments
+Thereof: Asset category
+Total plan assets
+€ millions
+Plan Asset Allocation
+Our investment strategies for foreign benefit plans vary according to the conditions in the country in
+which the respective benefit plans are situated. We have adopted a long-term investment horizon for
+all major foreign benefit plans. Although our policy is to invest in a risk-diversified portfolio consisting
+of a mix of assets, both the defined benefit obligation and plan assets can fluctuate over time, which
+exposes the Group to actuarial and market (investment) risks. Depending on the statutory
+requirements in each country, it might be necessary to reduce any underfunding by addition of liquid
+assets.
+Our investment strategy on domestic benefit plans is to invest all contributions in stable insurance
+policies.
+Investments in Plan Assets
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+Management Report
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+Active Market
+To Our
+Not Quoted in an
+Active Market
+Not Quoted in an
+Active Market
+SAP
+196/338
+195/338
+Total future benefit payments from our defined benefit plans as at December 31, 2021, are expected
+to be €2,289 million (2020: €1,969 million). Of this amount, 77% (2020: 77%) has maturities of over
+five years, and 62% (2020: 64%) relates to domestic plans.
+Our expected contribution in 2022 to our domestic and foreign defined benefit pension plans is
+immaterial. The weighted duration of our defined benefit plans amounted to 11 years as at
+December 31, 2021, and 12 years as at December 31, 2020.
+1,207
+7
+1,254
+39
+0
+151
+0
+202
+0
+149
+0
+182
+1,207
+485
+1,254
+597
+Quoted in an
+Active Market
+To accelerate the modernization of our cloud infrastructure and to harmonize our platform structure,
+we initiated a restructuring program in the Global Cloud Services area. The implementation started in
+the first quarter of 2021 and is expected to conclude in the first half of 2023. The majority of the
+expenses recognized as a result of this program are impairments of data centers and related assets.
+Restructuring expenses presented in SAP's income statement primarily include the following
+components:
+316
+SAP Integrated Report 2021
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Stakeholders
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+198/338
+197/338
+-1,130
+3
+-157
+lil Restructuring expenses
+-71
+2
+-2
+General and administration
+-299
+3
+Section C - Financial Results
+This section provides insight into the financial results of SAP's reportable segments and of SAP overall
+as far as not already covered by previous sections. This includes but is not limited to segment results,
+income taxes, and earnings per share.
+(C.1) Results of Segments
+General Information
+The expense measures exclude:
+We use an operating profit indicator to measure the performance of our operating segments. The
+measurement of operating segment revenues and results includes recurring revenue that is not
+recognized under IFRS due to fair value accounting for the contracts in effect at the time of the
+respective acquisitions. Starting in 2021, we no longer adjust our IFRS revenues. Due to immateriality,
+prior year revenue numbers continue to be based on our previous accounting policies. The accounting
+policies applied in the measurement of operating segment expenses and profit continue to differ as
+follows from the IFRS accounting principles used to determine the operating profit measure in our
+income statement:
+Our management reporting system produces a variety of reports that differ by the currency exchange
+rates used in the accounting for foreign-currency transactions and operations, where both actual and
+constant currency numbers are reported to and used by our CODM. Reports based on actual
+currencies use the same currency rates as are used in our financial statements. Reports based on
+constant currencies report revenues and expenses using the average exchange rates from the
+previous year's corresponding period.
+Most of our depreciation and amortization expense affecting segment profits is allocated to the
+segments as part of broader infrastructure allocations and is thus not tracked separately on the
+operating segment level. Depreciation and amortization expense that is directly allocated to the
+operating segments is immaterial in all segments presented.
+Our management reporting system, and hence our segment reporting system, reports our
+intersegment services as cost reductions and does not track them as internal revenue. Intersegment
+services mainly represent utilization of human resources of one segment by another segment on a
+project basis. Intersegment services are charged based on internal cost rates including certain indirect
+overhead costs but excluding a profit margin.
+Segment Reporting Policies
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Stakeholders
+3
+Combined Group
+SAP Integrated Report 2021
+SAP
+The segment information for 2021 and the comparative prior periods were restated to conform with
+the new segment composition.
+The acquisition of Signavio GmbH, combined with our business process intelligence unit, led to a new
+operating segment called Business Process Intelligence. The segment derives its revenues from the
+sale of business process transformation offerings from SAP and Signavio. Due to its size, Business
+Process Intelligence is not a reportable segment. For more information about the acquisition of
+Signavio GmbH, see Note (D.1).
+The finance and information technology functions of the Emarsys segment have already been
+integrated into SAP's corporate functions and therefore their expenses are not included in the Emarsys
+segment anymore. All other functions are still included in the Emarsys segment, which derives its
+revenues mainly from the sale of cloud-based customer experience offerings and from the sale of
+related services. Due to its size, Emarsys is not a reportable segment.
+In 2021, the finance and legal functions of Qualtrics were reintegrated into the Qualtrics segment.
+Additionally, the Clarabridge business, acquired by Qualtrics International Inc. in October 2021, was
+added to the Qualtrics segment accordingly (for more information, see Note (D.1)). The Qualtrics
+segment derives its revenues mainly from the sale of experience management cloud solutions that
+run front-office functions across experience data, and from the sale of related services. The figures of
+the Qualtrics segment of SAP and the financial results of Qualtrics International Inc. cannot be
+compared, notably due to different accounting standards.
+The Services segment covers most of SAP's services activities. Revenues are mainly generated from
+the sale of various professional services, premium support services, implementation services for our
+software products, and education services on the use of our products. However, the services segment
+does not reflect the full services business, as other segments provide services as well.
+The Applications, Technology & Support segment derives its revenues primarily from the sale of
+software licenses, support offerings, and cloud subscriptions (as far as not included in one of the
+other segments).
+SAP
+At year end 2021, SAP had five operating segments that are regularly reviewed by the Executive
+Board, which is responsible for assessing the performance of the Company and for making resource
+allocation decisions as our chief operating decision-maker (CODM). The operating segments are
+largely organized and managed separately according to their product and service offerings, notably
+whether the products and services relate to our services activities, experience management solutions,
+business process transformation offerings, or our customer experience portfolio of Emarsys, or cover
+other activities of our business.
+To Our
+Sales and marketing
+Following organizational changes, and to further strengthen our cloud offerings and support the new
+cloud strategy, functions related to SAP's travel management solutions in the Concur segment were
+mainly integrated into the Applications, Technology & Support segment and the Services segment.
+Hence, the Concur segment was dissolved.
+1
+-19
+-4
+-132
+Onerous contract-related restructuring expenses and
+-1,111
+7
+-25
+Employee-related restructuring expenses
+2019
+2020
+2021
+€ millions
+Restructuring Expenses
+Additional
+Information
+Sustainability
+Consolidated Financial Further Information on
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+-467
+restructuring-related impairment losses
+lil Restructuring expenses
+241
+3
+-157
+-12
+-154
+-3
+-13
+Research and development
+-118
+1
+-5
+Cost of software licenses and support
+Cost of services
+0
+-127
+2019
+2020
+2021
+Cost of cloud
+€ millions
+Restructuring Expenses by Functional Area
+-20
+-1,130
+If not presented separately in our income statement, restructuring expenses would have been
+classified in the different expense items in our income statement as follows:
+2021
+Cost of software licenses and support
+Cost of cloud and software.
+Cost of services
+Total cost of revenue
+Further Information on
+Sustainability
+Other segment expenses
+Segment profit
+Additional
+Information
+Cost of cloud
+Segment gross profit
+Total segment revenue
+To Our
+Cloud and software
+Software licenses and support
+Software support
+Software licenses
+Cloud
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+Stakeholders
+2020
+SAP
+SAP Integrated Report 2021
+€ millions
+Services
+Services
+2019
+0
+Currency
+4
+0
+4
+5
+0
+0
+4
+5
+0
+0
+5
+5
+Actual
+0
+0
+0
+0
+0
+1
+0
+0
+0
+Actual
+Currency
+Constant
+Currency¹
+Actual
+Currency
+Constant
+Currency¹
+0
+4
+2021
+2020
+-80
+-74
+-76
+-62
+-18
+-19
+-32
+-33
+-54
+-97
+-99
+-106
+-109
+-116
+-2,035
+-2,062
+-2,209
+-379
+-375
+983
+1,070
+1,063
+1,122
+-78
+1,102
+-2,363
+-2,315
+-2,161
+-2,131
+-2,579
+-2,254
+-2,695
+-418
+3,679
+3,379
+Jil Financial income, net
+-155
+-76
+-50
+-207
+-179
+-160
+Thereof interest expense from financial liabilities at amortized cost
+Thereof interest expense from financial liabilities at fair value through
+profit or loss
+-151
+-342
+-654
+Thereof losses from financial assets at fair value through profit or loss
+-589
+-697
+-949
+596
+1,360
+3,283
+3,234
+3,674
+3,428
+3,374
+3,282
+3,432
+3,234
+Finance income
+3,123
+1,473
+787
+Thereof gains from financial assets at fair value through profit or loss
+Finance costs
+3,067
+2019
+2,174
+-427
+728
+23,502 23,816 22,965
+& Support
+Qualtrics
+153
+157
+97
+690
+711
+528
+86
+89
+55
+Services
+1,458
+1,455
+1,479
+1,370
+11,242
+10,922
+12,512 12,013
+12,513
+Total
+reportable
+segments
+681
+3,379
+3,621
+3,283
+929
+3,234
+408
+414
+406
+1,491
+1,414
+957
+-466
+3,799
+8,907
+743
+645
+642
+517
+1 The 2021 constant currency amounts are only comparable to 2020 actual currency amounts; 2020 constant currency amounts are only comparable to 2019 actual currency
+amounts.
+Segment Revenue by Region
+EMEA
+Americas
+APJ
+Total Segment Revenue
+2021
+2020
+2021
+2020
+2021
+2020
+2021
+9,116
+8,862
+10,900 10,437
+10,902
+Applications,
+Technology
+Actual Constant Actual
+Currency Currency Currency
+3,737
+Actual
+Currency Currency
+Constant Actual
+Currency Currency
+Actual
+Currency
+Constant Actual
+Currency Currency
+Actual
+Currency
+€ millions
+2020
+Actual Constant
+Currency
+10,927
+776
+(C.5)
+4,596
+7,220
+6,847
+.lil Total
+2,584
+4,739
+4,807
+Foreign
+2,012
+2,481
+2,040
+Germany
+2019
+2020
+2021
+€ millions
+Profit Before Tax by Geographic Location
+47
+-710
+Unused tax losses, research and development tax credits, and
+foreign tax credits
+29
+-5
+158
+The following table reconciles the expected income tax expense, computed by applying our
+combined German tax rate of 26.4% (2020: 26.3%; 2019: 26.4%), to the actual income tax expense.
+Our 2021 combined German tax rate includes a corporate income tax rate of 15.0% (2020: 15.0%;
+2019: 15.0%), plus a solidarity surcharge of 5.5% (2020: 5.5%; 2019: 5.5%) thereon, and trade taxes of
+10.6% (2020: 10.5%; 2019: 10.6%).
+Total deferred tax expense/income
+-497
+42
+5
+1,471
+1,938
+1,226
+Total income tax expense
+-526
+SAP
+To Our
+-282
+-630
+116
+254
+420
+-171
+-166
+-126
+Tax-exempt income
+Non-deductible expenses
+Foreign tax rates
+Tax effect of:
+(2020: 26.3%; 2019: 26.4%)
+1,212
+1,901
+1,808
+4,596
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Relationship Between Tax Expense and Profit Before Tax
+SAP Integrated Report 2021
+€ millions, unless otherwise stated
+Tax expense at applicable tax rate of 26.4%
+2021
+2020
+2019
+6,847
+7,220
+Il Profit before tax
+198
+Origination and reversal of temporary differences
+Total current tax expense
+2021
+Taxes for prior years
+Tax expense for current year
+Current tax expense/income
+€ millions
+Major Components of Tax Expense
+Total income tax expense
+Total deferred tax expense/income
+Foreign
+Germany
+Deferred tax expense/income
+Total current tax expense
+Foreign
+Germany
+Current tax expense
+€ millions
+Tax Expense by Geographic Location
+Income Taxes
+Judgments and Estimates
+We are subject to changing tax laws in multiple jurisdictions within the countries in which we operate.
+Our ordinary business activities also include transactions where the ultimate tax outcome is uncertain
+due to different interpretations of tax laws, such as those involving transfer pricing and intercompany
+transactions between SAP Group entities. In addition, the amount of income taxes we pay is generally
+subject to ongoing audits by domestic and foreign tax authorities. In determining our worldwide
+income tax provisions, judgment is involved in assessing whether to consider each uncertain tax
+treatment separately or together with one or more other uncertain tax treatments and whether to
+reflect the respective effect of uncertainty based on the most likely amount or the expected value. In
+applying these judgments, we consider the nature and the individual facts and circumstances of each
+uncertain tax treatment as well as the specifics of the respective jurisdiction, including applicable tax
+laws and our interpretation thereof.
+The assessment whether a deferred tax asset is impaired requires 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 all available positive and negative
+evidence, including the level of historical taxable income and projections for future taxable income
+over the periods in which the deferred tax assets are recoverable. Our judgment regarding future
+taxable income is based on assumptions about future market conditions and future profits of SAP.
+Judgment is also required in evaluating whether interest or penalties related to income taxes meet the
+definition of income taxes, and, if not, whether it is of financial nature. In this judgment, we particularly
+consider applicable local tax laws and interpretations on IFRS by national standard setters in the area
+of group financial reporting.
+203/338
+204/338
+2020
+SAP
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+SAP Integrated Report 2021
+Deferred tax expense/income
+2019
+895
+1,778
+1,896
+1,968
+-40
+243
+261
+1,818
+1,653
+1,707
+2019
+2020
+2021
+1,226
+1,938
+1,471
+-552
+42
+625
+1,360
+1,001
+1,153
+1,968
+1,896
+608
+1,778
+-38
+-3
+-606
+80
+-549
+-497
+109
+-131
+4,230
+4,084
+0
+-178
+0
+-216
+0
+Adjustment for
+Revenue under fair value accounting
+Acquisition-related charges
+Share-based payment expenses
+Il Restructuring
+Il Operating profit
+■ Other non-operating income/expense, net
+Il Financial income, net
+Il Profit before tax
+0
+0
+-5
+-157
+-157
+-1,835
+-1,084
+-1,084
+-2,794
+Adjustment for currency impact
+-2,794
+-577
+-577
+-623
+-623
+-81
+-5
+-689
+3
+-2,469
+-2,395
+9,718
+9,722
+9,934
+9,773
+Services
+728
+743
+645
+642
+517
+Qualtrics
+44
+44
+-4
+-5
+-9
+Total segment profit for reportable segments
+-2,274
+-2,286
+Other expenses
+396
+322
+319
+-2,390
+177
+Other revenue
+10,281
+10,571
+10,363
+10,505
+10,339
+177
+9,567
+3
+4,656
+Thereof from financial assets at amortized cost
+111
+-134
+194
+Thereof from financial liabilities at fair value through profit or loss
+-382
+-487
+-396
+Thereof from financial liabilities at amortized cost
+-70
+-34
+-176
+Miscellaneous income/expense, net
+-33
+-25
+-23
+Other non-operating income/expense, net
+€ millions
+(C.4) Financial Income, Net
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+358
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+-74
+-179
+17
+Stakeholders
+-1,130
+601
+Thereof from financial assets at fair value through profit or loss
+4,656
+6,623
+6,623
+4,473
+17
+17
+-179
+-179
+-74
+2,174
+2,174
+776
+776
+198
+6,847
+6,847
+7,220
+-51
+-154
+49
+Foreign currency exchange gain/loss, net
+2019
+2020
+316
+2021
+Other Non-Operating Income/Expense, Net
+(C.3)
+202/338
+1 The 2021 constant currency amounts are only comparable to 2020 actual currency amounts; 2020 constant currency amounts are only comparable to 2019 actual currency
+amounts.
+4,596
+7,220
+€ millions
+4,302
+Applications, Technology & Support
+27,338
+528
+540
+403
+55
+56
+37
+681
+Services
+1,479
+1,491
+1,568
+1,491
+1,527
+1,621
+408
+415
+490
+4,169
+4,084
+11,089
+11,267
+10,927
+11,942
+68
+12,139
+reportable
+Total
+3,679
+508
+696
+3,432
+3,379
+12,013
+4,207
+99
+Qualtrics
+27,665
+28,055 27,024
+€ millions
+EMEA
+2020
+2019
+Actual
+Americas
+APJ
+2020
+2019
+2020
+2019
+Total Segment Revenue
+2020
+2019
+Actual Constant
+Actual Constant
+Currency Currency Currency Currency Currency
+Actual Actual
+Currency Currency
+& Support
+3,679 22,965 23,446 23,051
+3,698
+3,621
+9,066
+9,200
+97
+8,907
+10,549
+10,437
+Technology
+Applications,
+Actual Actual Constant Actual
+Currency Currency Currency Currency
+Constant
+Currency
+10,306
+27,553
+27,024
+27,238
+681
+696
+508
+Total segment revenue for reportable segments
+27,665
+28,055
+27,024
+27,574
+27,238
+Other revenue
+177
+177
+319
+322
+396
+Adjustment for currency impact
+0
+27,338
+27,842
+27,842
+Total revenue
+-81
+-5
+957
+-5
+0
+Adjustment of revenue under fair value accounting
+0
+-554
+0
+-390
+0
+27,574
+929
+3,679
+segments
+For a breakdown of revenue by region for the SAP Group, see Note (A.1).
+201/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+(C.2) Reconciliation of Segment Measures to the Consolidated Income Statements
+2020
+2021
+2019
+€ millions
+Actual
+Currency
+Constant
+Currency¹
+3,432
+3,379
+3,283
+3,234
+Services
+23,051
+Qualtrics
+23,446
+23,816
+23,502
+Applications, Technology & Support
+Actual
+Currency
+Constant
+Currency¹
+Actual
+Currency
+22,965
+Withholding taxes
+-552
+105
+Additional
+Information
+(C.6)
+Earnings per Share
+€ millions, unless otherwise stated
+2021
+2020
+2019
+Profit attributable to equity holders of SAP SE
+5,256
+5,145
+3,321
+Issued ordinary shares¹
+1,229
+1,229
+1,229
+Effect of treasury shares¹
+-49
+2.78
+4.35
+4.46
+Earnings per share, basic, attributable to equity
+1,194
+1,182
+Sustainability
+1,180
+1,194
+1,182
+1,180
+Weighted average shares outstanding, basic¹
+-35
+-46
+Weighted average shares outstanding, diluted¹
+Consolidated Financial Further Information on
+Statements IFRS
+Management Report
+Combined Group
+20
+Expiring after the following year
+28
+26
+28
+Not expiring
+17
+Unused research and development and foreign tax credits
+587
+602
+Deductible temporary differences
+1,124
+933
+765
+538
+holders of SAP SE (in €)
+17
+48
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+208/338
+207/338
+Total unused tax credits
+In October 2021, over 135 jurisdictions agreed on a new framework for the international tax system
+covering the re-allocation of taxing rights and the introduction of a global minimum corporate tax rate.
+On December 20, 2021, the Organization for Economic Co-operation and Development (OECD)
+released model rules, which shall ensure that multinational enterprises with revenue above
+€750 million will be subject to a 15% minimum corporate tax rate. Based on this release, on
+December 22, 2021, the European Commission (EC) proposed a directive for implementation within
+the EU. We expect to be subject to such rules. However, since they still need to be implemented into
+national law and are expected to only apply starting 2023, we cannot yet assess possible impacts for
+SAP.
+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 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 €1,283 million
+(2020: €1,221 million) in total (including related interest expenses and penalties of €677 million
+(2020: €648 million)).
+Income Tax-Related Litigation
+We have not recognized a deferred tax liability on approximately €24.04 billion (2020: €18.37 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.
+Of the unused tax losses, €183 million (2020: €179 million; 2019: €187 million) relate to U.S. state tax
+loss carryforwards.
+45
+43
+Reform of International Taxation Rules
+Total unused tax losses
+Earnings per share, diluted, attributable to equity
+4.35
+€ millions
+Intangible assets
+Other identifiable assets
+Total identifiable assets
+Other identifiable liabilities
+Total identifiable liabilities
+Total identifiable net assets
+Goodwill
+Total consideration transferred
+255
+73
+328
+108
+108
+220
+729
+949
+204
+The following table summarizes the values of identifiable assets acquired and liabilities assumed in
+connection with the acquisition of Clarabridge, as at the acquisition date:
+Qualtrics has (1) assumed, amended, and restated Clarabridge stock plans, and (2) converted the
+assumed options to purchase shares of Clarabridge stock outstanding into corresponding Qualtrics
+options. Qualtrics has granted equity incentive awards to certain continuing employees of Clarabridge
+and its subsidiaries under their own Qualtrics equity plan at Qualtrics' sole discretion. For more
+information see Note (B.3).
+-
+On October 1, 2021 (after receipt of required regulatory approvals and satisfaction or waiver of other
+customary closing conditions), Qualtrics completed its previously announced acquisition of
+Clarabridge, a customer experience management software company headquartered in Reston,
+Virginia, United States, pursuant to an Agreement and Plan of Reorganization and Merger. The
+number of Qualtrics class A common stock issued to the sellers was fixed based on a valuation of
+US$1,125 million (subject to certain adjustments) – the assumed Qualtrics share price was US$37.33.
+The actual consideration transferred (mainly in shares valued at the acquisition date fair value of the
+common stock) amounted to US$1,298 million (€1,116 million). This includes €910 million of issued
+shares, €115 million of assumed awards as well as €91 million of cash paid.
+Clarabridge Acquisition
+Signavio Acquisition: Recognized Assets and Liabilities
+The allocation of the goodwill resulting from the Signavio acquisition to our operating segments
+depends on how our operating segments actually benefit from the synergies of the Signavio business
+combination. For more information, see Note (D.2).
+The acquisition of Signavio complements SAP's business process intelligence offerings and will
+help create new offerings by combining Signavio products and SAP products, but is also expected
+to result, for example, in increased SAP S/4HANA and RISE with SAP sales.
+Cross-selling opportunities to existing SAP customers across all regions, using SAP's sales
+organization
+-
+Signavio goodwill was attributed to expected synergies from the acquisition, particularly in the
+following areas:
+In general, the goodwill arising from our acquisitions consists largely of the synergies and the know-
+how and skills of the acquired businesses' workforces.
+The initial accounting for the Signavio business combination is incomplete because we are still
+obtaining the information necessary to identify and measure items such as tax-related assets and
+liabilities of Signavio. Accordingly, the amounts recognized in our financial statements for these items
+are regarded provisional as at December 31, 2021.
+Improved profitability in Signavio sales and operations
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+This section highlights our non-current assets including investments that form the basis of our
+operating activities. Additions to invested capital include separate asset acquisitions or business
+combinations. Further, we disclose information about purchase obligations and capital contributions.
+(D.1) Business Combinations and Divestitures
+Section D - Invested Capital
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Measuring Non-Controlling Interests and Allocation of Consideration Transferred
+We decide for each business combination whether to measure the non-controlling interest in the
+acquiree at fair value or at the proportionate share of the acquiree's identifiable net assets.
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+1 Number of shares in millions
+holders of SAP SE (in €)
+2.78
+Combined Group
+4.46
+We classify costs related to executing business combinations as general and administration expense.
+In our accounting for business combinations, judgment is required in determining whether an
+intangible asset is identifiable, and should be recorded separately from goodwill. Additionally,
+estimating the acquisition-date fair values of the identifiable assets acquired and liabilities assumed
+involves considerable judgment. The necessary measurements are based on information available on
+the acquisition date and are based on expectations and assumptions that have been deemed
+reasonable by management. These judgments, estimates, and assumptions can materially affect our
+financial position and profit for several reasons, including the following:
+Subsequent negative changes in the estimated fair values of assets may result in additional
+expense from impairment charges.
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+210/338
+Fair values assigned to assets subject to depreciation and amortization affect the amounts of
+depreciation and amortization to be recorded in operating profit in the periods following the
+acquisition.
+209/338
+In January 2021, SAP announced it had entered into an agreement to acquire Signavio, a leader in
+the enterprise business process intelligence and process management space that enables companies
+to understand, improve, transform, and manage all their business processes quickly and at scale.
+Signavio Acquisition
+In 2021, we closed the acquisition of Signavio GmbH, Berlin, Germany, ("Signavio") and of
+Clarabridge, Inc., Reston, Virginia, United States, ("Clarabridge”).
+2021 Acquisitions
+We acquire businesses in specific areas of strategic interest to us, particularly to broaden our product
+and service portfolio.
+Subsequent changes in the estimated fair values of liabilities and provisions may result in
+additional expense (if increasing the 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 Signavio, as at the acquisition date:
+373
+The purchase price was €949 million. The transaction closed on March 5, 2021, following satisfaction
+of regulatory and other approvals. The Signavio operating results and assets and liabilities are
+reflected in our consolidated financial statements starting on that date.
+309
+Components of Recognized Deferred Tax Assets and Liabilities
+€ millions
+Deferred tax assets
+Intangible assets
+2021
+2020
+759
+455
+Property, plant, and equipment
+19
+19
+Other financial assets
+14
+11
+Trade and other receivables
+Pension provisions
+Share-based payments
+146
+Carryforwards of unused tax losses
+631
+781
+Contract liabilities
+1,155
+Additional
+Information
+1,097
+197
+278
+194
+196
+115
+58
+Other provisions and obligations
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+48
+41
+-34
+Reassessment of deferred tax assets, research and
+80
+128
+development tax credits, and foreign tax credits
+9
+-89
+-100
+-75
+Research and development and foreign tax credits
+338
+138
+Prior-year taxes
+123
+48
+il Total income tax expense
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+206/338
+205/338
+26.7
+Other
+26.8
+1,226
+1,938
+23
+57
+-105
+Effective tax rate (in %)
+21.5
+Research and development and foreign tax credits
+1,471
+57
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+Consolidated Financial
+Statements IFRS
+(2020: €452 million) and deferred tax liabilities for property, plant, and equipment in the amount of
+€405 million (2020: €400 million) result from the accounting of liabilities and right-of-use assets from
+leases.
+The increase in deferred tax assets for intangible assets mainly results from the capitalization of
+research and development expenses for tax purposes. Furthermore, the deferred tax assets for
+contract liabilities increased mainly because of deferred revenue.
+1,030
+1,488
+2,035
+2,071
+123
+Deferred tax assets for other provisions and obligations in the amount of €472 million
+181
+Further Information on
+Sustainability
+Items Not Resulting in a Deferred Tax Asset
+Expiring after the following year
+63
+77
+25
+26
+688
+Additional
+Information
+570
+2019
+2020
+2021
+Expiring in the following year
+Not expiring
+Unused tax losses
+430
+4
+€ millions
+87
+Contract liabilities
+Other provisions and obligations
+Share-based payments
+Pension provisions
+Trade and other receivables
+Property, plant, and equipment
+Intangible assets
+Deferred tax liabilities
+3,065
+3,559
+Total deferred tax assets
+Other
+7
+108
+134
+Other
+Total deferred tax liabilities
+Other financial assets
+903
+854
+525
+529
+Total deferred tax assets, net
+50
+169
+239
+1
+206
+178
+29
+0
+21
+goodwill resulting from the Clarabridge acquisition (by Qualtrics) to our operating segments depends
+on how our operating segments actually benefit from the synergies of the Clarabridge business
+combination. As we have not yet completed the identification of those benefits and the initial
+accounting for the business combination is preliminary (for more information, see Note (D.1)), the
+entire goodwill (€924 million) was provisionally allocated to the Qualtrics segment.
+Due to the dissolution of the Concur segment in 2021 (for more information, see Note (C.1)), the
+Concur goodwill (€3,307 million) was moved to the Applications, Technology & Support segment.
+Given the close proximity to the 2020 annual goodwill impairment test and the significant headroom,
+no formal impairment test was performed on the reallocation date of the Concur segment.
+Note (D.1)), we disposed €20 million of goodwill (thereof €9 million from the Applications, Technology
+& Support segment and €11 million from the Services segment).
+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:
+Basis for Determining Values Assigned to Key Assumption
+In conjunction with the creation of the SAP Fioneer joint venture (for more information, see
+Terminal growth rate
+Additional
+Information
+Budgeted operating margin
+Budgeted revenue growth
+Key Assumption
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+SAP
+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.
+SAP Integrated Report 2021
+Combined Group
+To Our
+Stakeholders
+Discount rates
+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.
+2020
+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.
+3.4
+0.4
+5.4
+215/338
+8.4
+growth (average of the
+Budgeted revenue
+2021
+20202
+2021
+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.
+2021¹
+2021
+2020
+2021
+Emarsys
+& Support
+2020
+Business Process
+Intelligence
+otherwise stated
+Percent, unless
+Key Assumptions and Detailed Planning Period
+2020
+A portion (€43 million) of the goodwill in the Applications, Technology & Support segment was moved
+to the newly formed Business Process Intelligence segment. Based on the expected synergies, the
+goodwill added through the acquisition of Signavio (€766 million) was provisionally allocated to the
+Applications, Technology & Support segment (€383 million) and the Business Process Intelligence
+segment (€383 million). As the initial accounting for the Signavio business combination is incomplete
+(for more information, see Note (D.1)), the allocation of goodwill is provisional. The allocation of the
+-20
+408
+3
+98
+-3
+101
+31,191
+1,737
+1,838
+27,636
+-9
+395
+-2,010
+29,260
+Additional
+Information
+12/31/2021
+12/31/2020
+Carrying amount
+12/31/2021
+Foreign currency exchange differences
+12/31/2020
+NA
+Foreign currency exchange differences
+101
+31,090
+27,538
+For more information about our segments and the changes in 2021, see Note (C.1).
+Throughout 2021 (particularly in light of the COVID-19 pandemic and its development), we have -
+through a qualitative and quantitative analysis - been continuously monitoring whether triggering
+events exist.
+27,538
+NA
+395
+395
+2,637
+3,846
+3,307
+ΝΑ
+355
+367
+26,074
+20,844
+12/31/2020
+12/31/2021
+Total
+Business
+Process
+Intelligence
+Support
+Emarsys
+Qualtrics
+Concur
+Services
+Applications,
+Technology &
+€ millions
+Goodwill by Operating Segment
+For impairment testing purposes, the carrying amount of goodwill is allocated to the operating
+segments expected to benefit from goodwill as follows:
+Based on our analysis, which we updated in the fourth quarter and which served as the basis for our
+regular goodwill impairment test, we assume that the COVID-19 situation will continue to improve as
+vaccine programs continue to take effect globally, leading to a growing demand environment in 2022.
+For more information, see Note (IN.2).
+31,090
+20.6
+Qualtrics International Inc. completed its initial public offering ("IPO”) on January 28, 2021. The
+recoverable amount was determined based on fair value less costs of disposal calculation. The fair
+value measurement was categorized as a Level 1 fair value based on the market capitalization
+derived from publicly listed shares of Qualtrics. We believe that no reasonably foreseeable change in
+the share price of Qualtrics would cause the carrying amount of our Qualtrics segment to exceed its
+recoverable amount.
+ΝΑ
+The recoverable amount exceeded the carrying amount by €547 million.
+Given the fact that the Emarsys segment is expected to show disproportionate growth in the coming
+years and has not yet reached a steady state, we have used a longer and more detailed planning
+period than one would apply in a more mature segment.
+The recoverable amount was determined based on fair value less costs of disposal calculation. The
+fair value measurement was categorized as a Level 3 fair value based on the inputs used in the
+valuation. The cash flow projections were based on actual operating results and specific estimates
+covering a detailed planning period and the terminal growth rate thereafter. The projected results were
+determined based on management's estimates and are consistent with the assumptions a market
+participant would make (a target operating margin of 24.6% was used in the valuation).
+Emarsys Segment
+Qualtrics Segment
+-2
+-4
+Target operating margin at the end of the budgeted period
+(change in pp)
+(change in pp)
+The following table shows the amounts by which the key assumptions would need to change
+individually (that is, without changing the other key assumptions) for the recoverable amount to be
+equal to the carrying amount. For budgeted revenue growth sensitivity, the cost structure was not
+adjusted, hence leading to a modified terminal operating margin:
+-0.6
+Budgeted revenue growth
+2020
+2021
+Services
+Sensitivity to Change in Assumptions
+The following table shows the amounts by which the key assumptions would need to change
+individually (that is, without changing the other key assumptions) for the recoverable amount to be
+equal to the carrying amount. For budgeted revenue growth sensitivity, the cost structure was not
+adjusted, hence leading to a modified terminal operating margin:
+For our Services segment, the recoverable amount exceeded the carrying amount by €1,377 million
+(2020: €1,416 million).
+We believe that no reasonably possible change in any of the above key assumptions would cause the
+carrying amount of our Applications, Technology & Support segment to exceed the recoverable
+amount.
+used in the valuation. The cash flow projections were based on actual operating results and specific
+estimates covering a detailed planning period and the terminal growth rate thereafter. The projected
+results were determined based on management's estimates and are consistent with the assumptions
+a market participant would make (target operating margins of 33.1% (Applications, Technology &
+Support) (2020: 32.4%) and 5.1% (Services) (2020: 2.4%) were used in the valuation).
+-0.8
+217/338
+218/338
+SAP
+1/1/2020
+ΝΑ
+1 No formal test was performed in 2020 as the acquisition was after the annual testing date.
+However, we performed a quantitative and qualitative analysis to monitor whether triggering
+events exist.
+-14
+NA
+-1.7
+2020¹
+2021
+Emarsys
+Target operating margin at the end of the budgeted period
+(change in pp)
+(change in pp)
+Budgeted revenue growth
+Sensitivity to Change in Assumptions
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+3.0
+NA
+3.0
+0.0
+3.0
+3.0
+Terminal growth rate
+NA
+11.5
+ΝΑ
+10.0
+9.7
+ΝΑ
+7.2
+7.9
+8.8
+8.8
+After-tax discount rate
+budgeted period)
+NA
+31.7
+3.0
+15.3
+NA
+ΝΑ
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+The recoverable amount of these segments was determined based on fair value less costs of disposal
+calculation. The fair value measurement was categorized as a Level 3 fair value based on the inputs
+For more information about our 2021 segment changes, see Note (C.1).
+On October 1, 2021, we performed a goodwill impairment test for the segments mentioned above.
+Applications, Technology & Support Segment and Services Segment
+1 As we are using Level 1 inputs for Qualtrics in 2021, no information on assumptions and the detailed planning period is presented.
+2 No formal test was performed in 2020 as the acquisition was after the annual testing date. However, we performed a quantitative and
+qualitative analysis to monitor whether triggering events exist.
+216/338
+period (in years)
+NA
+14
+ΝΑ
+12
+13
+NA
+5
+5
+5
+5
+Detailed planning
+3.0
+Accumulated amortization
+Additional
+Information
+Retirements/disposals
+Due to immateriality, we have not separately presented the business as a discontinued operation.
+2019 Acquisitions
+The transaction closed on November 1, 2020, following satisfaction of applicable regulatory and other
+approvals.
+On May 5, 2020, SAP and Sinch AB, Stockholm, Sweden, ("Sinch”) announced that they had entered
+into a definitive agreement for Sinch to acquire the SAP Digital Interconnect group. The business sold
+(which was a non-reportable segment to SAP) consists of several SAP subsidiaries as well as assets
+transferred from certain SAP entities. The initial cash purchase price was €225 million (on a cash-free,
+debt-free basis). The disposal gain of €194 million (IFRS) and €128 million (non-IFRS) is included in
+Other operating income/expense, net.
+2020 Divestitures
+- Improved profitability in Emarsys sales and operations
+Emarsys offerings complementing the existing SAP Customer Experience solutions
+Cross-selling opportunities to existing SAP customers across all regions, using SAP's sales
+organization
+areas:
+Emarsys goodwill is attributed to expected synergies from the acquisition, particularly in the following
+On January 23, 2019, we concluded the acquisition of Qualtrics International Inc. ("Qualtrics"),
+following satisfaction of applicable regulatory and other approvals.
+In general, the goodwill arising from our acquisitions consists largely of the synergies and the know-
+how and skills of the acquired businesses' workforces.
+The operating results and assets and liabilities of Emarsys are reflected in our consolidated financial
+statements from November 4, 2020, onwards.
+On November 4, 2020, we concluded the acquisition of 100% of the shares of Emarsys eMarketing
+Systems AG, Vienna, Austria, (“Emarsys") following satisfaction of applicable regulatory and other
+approvals.
+2020 Acquisitions
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+Measurement period adjustments recorded in both 2021 and 2020 were not material (the
+measurement period adjustments have resulted in an adjustment of our 2020 numbers - reducing
+goodwill along with non-current provisions by €6 million; a further reduction of goodwill by €16 million
+was caused by adjustments of tax items).
+Qualtrics is a leading provider of experience management solutions. By combining Qualtrics products
+and SAP products, we aim to deliver an end-to-end experience and operational management system
+to our customers.
+We acquired 100% of the Qualtrics shares for approx. US$35 per share, representing consideration
+transferred in cash of approximately US$7.1 billion. In addition to the cash payments, SAP also
+incurred liabilities and post-closing expenses relating to assumed share-based payment awards
+amounting to approximately US$0.9 billion.
+The operating results and assets and liabilities of Qualtrics are reflected in our consolidated financial
+statements from January 23, 2019, onward.
+€ millions
+Qualtrics Acquisition: Recognized Assets and Liabilities
+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.
+Measurement period adjustments recorded in both 2020 and 2019 were not material.
+The liabilities incurred related to the earned portion of unvested share-based payment awards. These
+liabilities were incurred by replacing, upon acquisition, equity-settled share-based payment awards
+held by employees of Qualtrics with cash-settled share-based payment awards, which are subject to
+forfeiture. The respective liabilities represent the portion of the replacement awards that relates to pre-
+acquisition services provided by the acquiree's employees and were measured at the fair value
+determined under IFRS 2.
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+6,449
+237
+6,212
+Total consideration transferred
+Liabilities incurred
+Cash paid
+€ millions
+Qualtrics Acquisition: Consideration Transferred
+SAP
+212/338
+211/338
+SAP and SAP Fioneer have executed transition service and go-to-market agreements, among others.
+The disposal gain relating to the transfer of the business (predominantly IP and employees) is
+included in Other operating income/expense, net (€77 million for both IFRS and non-IFRS).
+Total consideration transferred
+Goodwill
+Total identifiable net assets
+Total identifiable liabilities
+Other identifiable liabilities
+Total identifiable assets
+Other identifiable assets
+Intangible assets
+€ millions
+Clarabridge Acquisition: Recognized Assets and Liabilities
+Additional
+Information
+Sustainability
+Consolidated Financial Further Information on
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+Qualtrics
+Business Process Intelligence Segment
+218
+Cash and cash equivalents
+79
+103
+On April 13, 2021, SAP and investment company Dediq GmbH, Munich, Germany, ("Dediq”)
+announced that they had agreed to enter into a partnership in the area of financial services. Following
+the close of the transaction in September 2021 (after satisfaction of all closing conditions including
+regulatory approvals), SAP and Dediq jointly own the new “SAP Fioneer” entity (with SAP owning a
+minority share).
+2021 Divestitures
+Had the acquired entities been consolidated as at January 1, 2021, our 2021 revenue and profit after
+tax would not have been materially different.
+70
+-89
+Contribution of 2021 Acquisitions
+27,842
+5,376
+as Reported
+2021
+Il Profit after tax
+lil Revenue
+€ millions
+The amounts of revenue and profit or loss of the Signavio and Clarabridge businesses acquired in
+2021 since the acquisition date are included in the 2021 consolidated income statements as follows:
+2021 Acquisitions: Impact on SAP's Financials (Signavio and Clarabridge)
+Impact of Business Combinations on Our Financial Statements
+For more information about the allocation of goodwill to our segments (benefitting from the
+acquisition), see Note (D.2).
+The Clarabridge goodwill consists largely of the synergies that SAP expects to achieve from
+combining the acquired assets and operations with its existing operations, especially in its Qualtrics
+subsidiary.
+In general, the goodwill arising from our acquisitions consists largely of the synergies and the know-
+how and skills of the acquired businesses' workforces.
+The initial accounting for the business combination is preliminary as at December 31, 2021 (as we are
+still in the process of collecting the information necessary to determine the fair value of, for example,
+intangible assets as well as tax assets and liabilities).
+1,116
+922
+194
+103
+297
+12/31/2021
+Other financial assets
+Other non-financial assets
+In making impairment assessments for our goodwill and intangible assets, the outcome of these tests
+is highly dependent on management's assumptions regarding future cash flow projections and
+economic risks, which require significant judgment and assumptions about future developments. They
+can be affected by a variety of factors, including:
+In general, the test is performed at the same time (at the beginning of the fourth quarter) for all
+operating segments.
+are no lower levels in SAP at which goodwill is monitored for internal management purposes.
+The annual goodwill impairment test is performed at the level of our operating segments, since there
+Goodwill and Intangible Asset Impairment Testing
+(D.2) Goodwill
+Had Qualtrics been consolidated as at January 1, 2019, our 2019 revenue and profit after tax would
+not have been materially different.
+-526
+3,370
+Changes in business strategy
+429
+Contribution of
+Qualtrics
+as Reported
+2019
+Il Profit after tax
+lil Revenue
+€ millions
+Qualtrics Acquisition: Impact on SAP's Financials
+The amounts of revenue and profit or loss of the Qualtrics business acquired in 2019 since the
+acquisition date were included in our 2019 consolidated income statements as follows:
+Impact of the Business Combination on Our Financial Statements
+27,553
+Internal forecasts
+Estimation of weighted average cost of capital
+Changes to the assumptions underlying our goodwill and intangible assets impairment assessments
+could require material adjustments to the carrying amount of our recognized goodwill and intangible
+assets as well as the amounts of impairment charges recognized in profit or loss.
+Additions from business combinations
+Foreign currency exchange differences
+12/31/2020
+Retirements/disposals
+Additions from business combinations
+Foreign currency exchange differences
+1/1/2020
+Historical cost
+€ millions
+Goodwill
+Statements IFRS
+Management Report
+Further Information on
+Sustainability
+Consolidated Financial
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+Changes in our segment structure result in the reallocation of goodwill with the reallocated goodwill
+being calculated based on relative values (if a direct allocation is not possible).
+The outcome of goodwill impairment tests may also depend on the allocation of goodwill to our
+operating segments. This allocation involves judgment as it is based on our estimates regarding which
+operating segments are expected to benefit from the synergies of business combinations.
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Contract liabilities
+Provisions and other non-financial liabilities
+Current and deferred tax liabilities
+Financial liabilities
+Trade and other payables
+2,074
+Total identifiable assets
+2
+Thereof software and database licenses
+1,226
+Thereof customer relationship and other intangibles
+575
+Thereof acquired technology
+1,803
+75
+20
+37
+1
+138
+Intangible assets
+Property, plant, and equipment
+Total identifiable liabilities
+Trade and other receivables
+Total identifiable net assets
+53
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+214/338
+213/338
+The allocation of the goodwill resulting from the Qualtrics acquisition to our operating segments was
+depending on how our operating segments actually benefit from the synergies of the Qualtrics
+business combination.
+- Improved profitability in Qualtrics sales and operations
+Creation of new offerings by combining Qualtrics products and SAP products to deliver an end-to-
+end experience and operational management system to the customers
+Cross-selling opportunities to existing SAP customers across all regions, using SAP's sales
+organization
+Qualtrics goodwill was attributed to expected synergies from the acquisition, particularly in the
+following areas:
+In general, the goodwill arising from our acquisitions consists largely of the synergies and the know-
+how and skills of the acquired businesses' workforces.
+6,449
+5,012
+Total consideration transferred
+Goodwill
+1,437
+637
+129
+41
+317
+97
+The recoverable amount was determined based on fair value less costs of disposal calculation. The
+fair value measurement was categorized as a Level 3 fair value based on the inputs used in the
+valuation. The cash flow projections were based on actual operating results and specific estimates
+covering a detailed planning period and the terminal growth rate thereafter. The projected results were
+determined based on management's estimates and are consistent with the assumptions a market
+participant would make (a target operating margin of 24.8% was used in the valuation).
+Services
+The recoverable amount exceeded the carrying amount by €1,225 million.
+833
+2,996
+6,735
+10,564
+Accumulated amortization
+1/1/2020
+598
+2,031
+4
+2,976
+Foreign currency exchange differences
+-13
+-180
+-219
+-412
+Additions amortization
+85
+214
+5,605
+-89
+0
+93
+427
+644
+Additions from business combinations
+0
+233
+304
+537
+Other additions
+19
+0
+66
+85
+Retirements/disposals
+Transfers
+12/31/2021
+-84
+-7
+-11
+-102
+420
+205
+719
+-147
+12/31/2021
+547
+2,392
+3,659
+6,598
+Carrying amount
+12/31/2020
+12/31/2021
+-85
+220/338
+522
+2,992
+3,784
+286
+604
+3,966
+Applications, Technology
+Given the fact that the Business Process Intelligence segment is expected to show disproportionate
+growth in the coming years and has not yet reached a steady state, we have used a longer and more
+detailed planning period than one would apply in a more mature segment.
+270
+-10
+-11
+-64
+-22
+-131
+-300
+12/31/2020
+523
+2,043
+3,046
+5,612
+Foreign currency exchange differences
+11
+171
+211
+393
+Additions amortization
+77
+189
+412
+678
+Retirements/disposals
+Retirements/disposals
+12
+3,076
+9,396
+The term "technical feasibility" is not defined in IFRS, and therefore determining whether the
+completion of an asset is technically feasible requires judgment and a company-specific approach.
+Determining the future ability to use or sell the intangible asset arising from the development and
+the determination of the probability of future benefits from sale or use
+· Determining whether a cost is directly or indirectly attributable to an intangible asset and whether a
+cost is necessary for completing a development
+These judgments impact the total amount of intangible assets that we present in our balance sheet as
+well as the timing of recognizing development expenses in profit or loss.
+Measurement of Intangibles
+All our purchased intangible assets other than goodwill have finite useful lives. They are initially
+measured at acquisition cost and subsequently amortized based on the expected consumption of
+economic benefits over their estimated useful lives ranging from two to 20 years.
+Judgment is required in determining the following:
+The useful life of an intangible asset, as this is based on our estimates regarding the period over
+which the intangible asset is expected to generate economic benefits to us
+The amortization method, as IFRS requires the straight-line method to be used unless we can
+reliably determine the pattern in which the asset's future economic benefits are expected to be
+consumed by us
+Determining whether activities should be considered research activities or development activities
+Determining whether the conditions for recognizing an intangible asset are met requires
+assumptions about future market conditions, customer demand, and other developments.
+Both the amortization period and the amortization method have an impact on the amortization
+expense that is recorded in each period.
+We classify intangible assets according to their nature and use in our operations. Software and
+database licenses consist primarily of technology for internal use, whereas acquired technology
+consists primarily of purchased software to be incorporated into our product offerings. 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.
+219/338
+SAP
+Intangible Assets
+€ millions
+Historical cost
+SAP Integrated Report 2021
+Classification of Intangibles
+Determining whether internally generated intangible assets from development qualify for recognition
+requires significant judgment, particularly in the following areas:
+Whereas in general, expenses for internally generated intangibles are expensed as incurred,
+development expenses incurred on standard-related customer development projects (for which the
+IAS 38 criteria are met cumulatively) are capitalized on a limited scale with those amounts being
+amortized over the estimated useful life for the majority of the projects of eight years.
+Recognition of Intangibles
+Foreign currency exchange differences
+The following table shows the amounts by which the key assumptions would need to change
+individually (that is, without changing the other key assumptions) for the recoverable amount to be
+equal to the carrying amount. For budgeted revenue growth sensitivity, the cost structure was not
+adjusted, hence leading to a modified terminal operating margin:
+Sensitivity to Change in Assumptions
+(change in pp)
+Target operating margin at the end of the budgeted period
+(change in pp)
+Business Process Intelligence
+2021
+-2.5
+-20
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+(D.3) Intangible Assets
+To Our
+Stakeholders
+Budgeted revenue growth
+Consolidated Financial Further Information on
+Statements IFRS
+Other additions
+Retirements/disposals
+Transfers
+10
+0
+60
+70
+-148
+244
+-22
+-312
+15
+0
+-12
+3
+12/31/2020
+2,565
+Combined Group
+Management Report
+-142
+184
+793
+1
+Sustainability
+59
+Additional
+Information
+Software and
+Database Licenses
+Acquired
+Technology
+Customer
+Relationships and
+Other Intangibles
+Total
+1/1/2020
+6,038
+2,752
+6,415
+10,096
+Foreign currency exchange differences
+-14
+-224
+-705
+929
+Additions from business combinations
+-467
+1,776
+537
+-1
+-6
+1,234
+536
+1,770
+-2,782
+-2,792
+10
+12/31/2020
+-1,016
+4
+-1,012
+Other comprehensive income for items that will be reclassified to profit or loss, net of tax
+2,846
+Other comprehensive income for items that will be reclassified to profit or loss, net of tax
+-5
+Total
+12/31/2019
+1,228.5
+-48.9
+-26
+1,228.5
+-48.9
+On January 13, 2022, SAP announced a new share repurchase program to service future share-based
+compensation awards. The program, with a volume of up to €1 billion, is planned to be executed in
+the period between February 1, 2022, and December 31, 2022.
+Authorized Shares
+The Articles of Incorporation authorize the Executive Board to increase the issued capital as follows:
+1,239
+-
+By up to a total amount of €250 million by issuing new no-par value bearer shares against
+contributions in cash or in kind until May 19, 2025 (Authorized Capital II). Subject to the consent of
+the Supervisory Board, the Executive Board is authorized to exclude the shareholders' statutory
+subscription rights in certain cases.
+Contingent Shares
+Other Components of Equity
+€ millions
+Exchange
+Differences
+Cash Flow
+Hedges/Cost of
+Hedging
+1/1/2019
+Other comprehensive income for items that will be reclassified to profit or loss, net of tax
+By up to a total amount of €250 million by issuing new no-par value bearer shares against
+contributions in cash until May 19, 2025 (Authorized Capital I). The issuance is subject to the
+statutory subscription rights of existing shareholders.
+SAP SE's share capital is subject to a contingent capital increase, which may be effected only to the
+extent that the holders or creditors of convertible bonds or stock options issued or guaranteed by
+SAP SE or any of its directly or indirectly controlled subsidiaries under certain share-based payments
+exercise their conversion or subscription rights, and no other methods for servicing these rights are
+used. As at December 31, 2021, €100 million, representing 100 million shares, was still available for
+issuance (2020: €100 million).
+In 2021, we distributed €2,182 million (€1.85 per share) in dividends for 2020 compared to
+€1,864 million (€1.58 per share) paid in 2020 for 2019 and €1,790 million (€1.50 per share) paid in
+2019 for 2018.
+12/31/2021
+On November 11, 2021, Qualtrics announced the closing of its public offering and issued an
+additional 4% of its shares, which reduced SAP's ownership in Qualtrics to 74%. The offering-related
+cash inflow amounted to €981 million and the corresponding value of non-controlling interests in net
+assets was €250 million.
+(E.3) Liquidity
+Accounting for Non-Derivative Financial Instruments
+Classification and Measurement of Non-Derivative Financial Debt Investments
+Our non-derivative financial debt investments comprise cash at banks and cash equivalents (highly
+liquid investments with original maturities of three months or less, such as time deposits and money-
+market funds), loans and other financial receivables, and acquired debt securities.
+As we do not designate financial assets as “at fair value through profit or loss," we generally classify
+financial assets as: at amortized cost (AC), at fair value through other comprehensive income (FVOCI),
+or at fair value through profit or loss (FVTPL), depending on the contractual cash flows of, and our
+business model for, holding the respective asset. Financial assets having cash flow characteristics
+other than solely principal and interest such as money market and similar funds are generally
+classified as FVTPL. Generally, all other financial assets with cash flows consisting solely of principal
+and interest are classified as AC because we follow a conservative investment approach, safeguarding
+our liquidity by ensuring the safety of principal investment amounts.
+Gains/losses on non-derivative financial debt investments at FVTPL are reported in Financial income,
+net and show interest income/expenses separately from other gains/losses which include gains/losses
+from fair value fluctuations and disposals. Gains/losses on non-derivative financial debt investments
+SAP Integrated Report 2021
+On October 1, 2021, Qualtrics completed its acquisition of Clarabridge in the form of Qualtrics shares
+and cash. Following the issuance of new Qualtrics shares, SAP's ownership further decreased to 78%,
+resulting in an additional value of non-controlling interests of €261 million in net assets to be
+recognized.
+SAP
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+-14.1
+at AC are reported in Financial income, net and show interest income/expenses separately from other
+gains/losses which include gains/losses disposals and changes in expected and incurred credit
+losses. Gains/losses from foreign currency exchange rate fluctuations are included in Other non-
+operating income/expense, net. Regular way purchases and sales are recorded as at the trade date.
+Impairment of Non-Derivative Financial Debt Investments
+To Our
+Stakeholders
+2,819
+On January 28, 2021, Qualtrics successfully issued 12% of its shares on the Nasdaq Stock Market
+(NASDAQ). The IPO-related cash inflow amounted to €1,847 million and the initial value of non-
+controlling interests in net assets was €909 million.
+The total dividend available for distribution to SAP SE shareholders is based on the profits of SAP SE
+as reported in its statutory financial statements prepared under the accounting rules in the German
+Commercial Code (Handelsgesetzbuch). For the year ended December 31, 2021, the Executive
+Board intends to propose that a dividend of €2.45 per share (that is, an estimated total dividend of
+€2,890 million), be paid from the profits of SAP SE, which includes an extraordinary dividend
+component of €0.50 per share to celebrate SAP's 50th anniversary in 2022.
+1,830
+-22
+1,808
+Treasury Shares
+By resolution of SAP SE's Annual General Meeting of Shareholders held on May 17, 2018, the
+authorization granted by the Annual General Meeting of Shareholders on June 4, 2013, regarding the
+acquisition of treasury shares was revoked to the extent it had not been exercised at that time, and
+replaced by a new authorization of the Executive Board of SAP SE to acquire, on or before
+May 16, 2023, shares of SAP SE representing a pro rata amount of capital stock of up to €120 million
+in aggregate, provided that the shares purchased under the authorization, together with any other
+shares in the Company previously acquired and held by, or attributable to, SAP SE do not account for
+227/338
+228/338
+SAP
+Non-Controlling Interests
+SAP Integrated Report 2021
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+more than 10% of SAP SE's issued share capital. Although treasury shares are legally considered
+outstanding, there are no dividend or voting rights associated with them. We may redeem or resell
+shares held in treasury, or we may use treasury shares for the purpose of servicing option or
+conversion rights under the Company's share-based payment plans. Also, we may use shares held in
+treasury as consideration in connection with mergers with, or acquisitions of, other companies.
+Distribution Policy and Dividends
+Our general intention is to remain in a position to return liquidity to our shareholders by distributing
+annual dividends totaling 40% or more of our profit after tax and by potentially repurchasing treasury
+shares in future.
+To Our
+Stakeholders
+0
+13,094
+1,228.5
+39
+Current liabilities
+16,136
+23
+12,842
+22
+26
+Non-current liabilities
+13,510
+19
+15,696
+27
+-14
+Liabilities
+29,646
+42
+28,537
+51
+29,927
+58
+41,523
+For these financial assets, we apply considerable judgment by employing the general impairment
+approach as follows:
+Additional
+Information
+-
+Section E – Capital Structure,
+Financing, and Liquidity
+This section describes how SAP manages its capital structure. Our capital management is based on a
+high equity ratio, modest financial leverage, a well-balanced maturity profile, and deep debt capacity.
+(E.1)
+Capital Structure Management
+49
+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 continuously cover our funding requirements through
+the capital markets on reasonable terms and, in so doing, ensure a high level of independence,
+confidence, and financial flexibility.
+12/31/2021
+12/31/2020
+€ millions
+% of
+Total Equity
+and Liabilities
+€ millions
+% of
+Total Equity
+and Liabilities
+A in %
+Equity
+SAP SE's long-term credit rating is "A2" by Moody's and "A" by Standard & Poor's, both with stable
+outlook.
+4
+Thereof financial debt
+18
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Number of Shares
+Millions
+SAP
+1/1/2019
+Purchase of treasury shares
+12/31/2020
+12/31/2021
+Additional
+Information
+Issued Capital
+Treasury Shares
+1,228.5
+-34.9
+12/31/2019
+-34.9
+SAP SE has issued no-par value bearer shares with a calculated nominal value of €1 per share. All of
+the shares issued are fully paid.
+Changes in SAP's interest in a subsidiary that do not result in a loss of control are accounted for as
+equity transactions. When SAP loses control over the subsidiary, it derecognizes the assets and
+liabilities of the subsidiary and any related non-controlling interests (NCI) and other components of
+equity. Any resulting gain or loss is recognized in profit or loss.
+13,283
+23
+-1
+Thereof lease liabilities
+2,143
+3
+2,120
+4
+Issued Capital
+1
+71,169
+100
+58,464
+100
+22
+In 2021, we drew two short-term loans of €950 million and €500 million with the tenor of one year and
+a flexible repayment schedule, as well as €150 million in issued commercial paper (CP). At maturity,
+we repaid €500 million in Eurobonds, as well as €150 million in CP. Making use of the flexible
+structure, we further repaid €1,250 million in acquisition loan for Qualtrics prior to its final maturity
+date in 2022. The ratio of total nominal volume of financial debt to total equity and liabilities
+decreased 4 pp.
+(E.2) Total Equity
+Accounting for Interests in Subsidiaries
+Total equity and liabilities
+For cash at banks, time deposits, and debt securities such as acquired bonds and acquired
+commercial paper, we apply the low credit risk exception, as it is our policy to invest only in high-
+quality assets of issuers with a minimum rating of at least investment grade to minimize the risk of
+credit losses. Thus, these assets are always allocated to stage 1 of the three-stage credit loss
+model, and we record a loss allowance at an amount equal to 12-month expected credit losses.
+This loss allowance is calculated based on our exposure at the respective reporting date, the loss
+given default for this exposure, and the credit default swap spread as a measure for the probability
+of default. Even though we invest only in assets of at least investment-grade, we also closely
+observe the development of credit default swap spreads as a measure of market participants'
+assessments of the creditworthiness of a debtor to evaluate probable significant increases in credit
+risk to timely react to changes should these manifest. Among others, we consider cash at banks,
+time deposits, and debt securities to be in default when the counterparty is unlikely to pay its
+obligations in full, when there is information about a counterparty's financial difficulties or if there is
+a drastic increase in a counterparty's credit default swap spread for a prolonged time period while
+the overall market environment remains generally stable. Such financial assets are written off either
+partially or in full if the likelihood of recovery is considered remote, which might be evidenced, for
+example, by the bankruptcy of a counterparty of such financial assets.
+Expected credit loss allowance
+Non-Derivative Financial Liabilities
+Total
+Time deposits
+2,605
+0
+2,605
+1,448
+0
+1,448
+Debt securities
+30
+0
+30
+24
+0
+24
+Financial instruments related to employee benefit plans
+0
+Non-Current
+Current
+Total
+Non-Current
+-3
+0
+-3
+-3
+0
+-3
+44 Cash and cash equivalents
+8,898
+201
+0
+5,311
+0
+5,311
+Non-Derivative Financial Debt Investments
+2021
+2020
+€ millions
+Current
+8,898
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+201
+162
+Other financial assets
+2,758
+6,275
+9,033
+1,635
+3,512
+5,147
+Non-derivative financial debt investments
+as % of Other financial assets
+98
+5
+33
+95
+8
+35
+230/338
+Time deposits with original maturity of three months or less are presented as cash and cash
+equivalents, and those with original maturities of greater than three months (investments considered
+in group liquidity) are presented as other financial assets. Debt securities consist of acquired CP and
+acquired bonds of mainly financial and non-financial corporations and municipalities.
+For more information about financial risk and the nature of risk, see Note (F.1).
+1,822
+269
+1,552
+3,019
+162
+Loans and other financial receivables
+79
+107
+186
+83
+107
+190
+0
+Expected credit loss allowance
+0
+-3
+-3
+0
+-3
+Non-derivative financial debt investments
+2,711
+308
+-3
+0
+0
+0
+5,311
+3,587
+Current time deposits and debt securities
+2,632
+1,470
+1,162
+Group liquidity
+11,530
+6,781
+4,750
+Current financial debt
+-3,755
+-1,482
+-2,273
+Non-current financial debt
+-9,338
+-11,801
+8,898
+Cash and cash equivalents
+Δ
+2020
+Non-derivative financial liabilities include bank loans, issued bonds, private placements, and other
+financial liabilities. Included in other financial liabilities are customer funding liabilities which are funds
+we draw from and make payments on behalf of our customers for customers' employee expense
+reimbursements, related credit card payments, and vendor payments. We present these funds in cash
+and cash equivalents and record our obligation to make these expense reimbursements and
+payments on behalf of our customers as customer funding liabilities.
+As we do not designate financial liabilities as FVTPL, we generally classify non-derivative financial
+liabilities as AC.
+Expenses and gains or losses on financial liabilities at AC mainly consist of interest expense, which is
+shown in Financial income, net. Gains/losses from foreign currency exchange rate fluctuations are
+included in Other non-operating income/expense, net.
+Group Liquidity, Financial Debt, and Net Debt
+Group liquidity consists of cash at banks, money market and other funds, as well as time deposits and
+debt securities (both with remaining maturities of less than one year). Financial debt is defined as the
+nominal volume of bank loans, issued commercial paper, private placements, and bonds. Net debt is
+group liquidity less financial debt.
+229/338
+SAP
+SAP Integrated Report 2021
+2,463
+To Our
+Combined Group
+Management Report
+Group Liquidity and Net Debt
+€ millions
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+2021
+Stakeholders
+Financial debt
+-13,094
+-13,283
+2,732
+Time deposits
+1,420
+0
+1,420
+927
+0
+927
+0
+Money market and other funds
+0
+4,281
+1,655
+1,655
+Debt securities
+50
+0
+50
+4,281
+Loans and other financial receivables are monitored based on borrower-specific internal and
+external information to determine whether there has been a significant increase in credit risk since
+initial recognition. We consider such assets to be in default if they are significantly beyond their due
+date or if the borrower is unlikely to pay its obligation. A write-off occurs when the likelihood of
+recovery is considered remote, for example when bankruptcy proceedings have been finalized or
+when all enforcement efforts have been exhausted.
+2,732
+0
+189
+Net debt (-)
+-1,563
+-6,503
+4,939
+While we continuously monitor the ratios presented in the capital structure table, we actively manage
+our liquidity and structure of our financial indebtedness based on the ratios group liquidity and net
+debt.
+Cash and Cash Equivalents
+2021
+3,149
+2020
+Current
+Non-Current
+Total
+Current
+Non-Current
+Total
+Cash at banks
+3,149
+€ millions
+Management Report
+United States
+Combined Group
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+(D.5)
+Leases
+Accounting Policies, Judgments, and Estimates
+Under IFRS 16, a contract is or contains a lease if the contract conveys the right to control the use of
+an identified asset for a period of time in exchange for consideration. As a lessee, SAP recognizes a
+right-of-use asset representing its right to use the underlying asset and a lease liability representing its
+obligation to make lease payments. The right-of-use assets are depreciated on a straight-line basis
+and interest expense is recognized on the lease liabilities. The vast majority of our leases consist of
+facility and data center leases. Payments for short-term and low-value leases are expensed over the
+lease term. Extension options are included in the lease term if their exercise is reasonably certain.
+Leases in the Balance Sheet
+€ millions
+Right-of-use assets
+12/31/2021
+12/31/2020
+Right-of-use assets - land and buildings
+1,800
+1,816
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+Additions
+2020
+66
+404
+424
+25
+87
+1,006
+Right-of-use assets - other property, plant, and equipment
+2021
+313
+518
+23
+69
+1,067
+The additions (other than from business combinations) relate primarily to the replacement and
+purchase of information technology equipment and the construction and leasing of buildings and data
+centers. For more information about the impairment of data centers, see Note (B.6). For more
+information about leases, see Note (D.5).
+221/338
+222/338
+144
+4,977
+40
+Total right-of-use assets
+1,740
+11,042
+13,605
+16
+13
+SAP is committed to future minimum lease payments in the amount of €172 million for facility leases
+that had not yet commenced as at December 31, 2021. For data centers, we have future
+commitments to spend €226 million on services and IFRS 16-related assets. Because this agreement
+does not specify the required split, the entire amount has been included in the purchase obligations
+reported in Note (D.8).
+Leases in the Income Statement
+€ millions
+Lease expenses within operating profit
+Depreciation of right-of-use assets
+2021
+2020
+398
+396
+For more information about right-of-use asset additions, see Note (D.4), and for a maturity analysis of
+lease liabilities, see Note (F.1). For more information about the cash flow related to lease liabilities,
+see the "Reconciliation of Liabilities Arising from Financing Activities" table within Note (E.3).
+SAP
+SAP Integrated Report 2021
+1,736
+Non-current lease liabilities as % of Non-current financial liabilities
+Non-current financial liabilities
+Non-current lease liabilities
+1,840
+1,857
+Property, plant, and equipment
+4,977
+5,041
+Right-of-use assets as % of Property, plant, and equipment
+37
+37
+41
+Stakeholders
+407
+380
+Current financial liabilities
+4,528
+2,348
+Current lease liabilities as % of Current financial liabilities
+9
+16
+Current lease liabilities
+77
+40
+1,450
+9 to 13
+Callidus Customer relationships
+241
+262
+7 to 11
+Qualtrics Acquired technologies
+286
+360
+4
+Qualtrics
+Customer relationships
+983
+991
+11 to 16
+Emarsys - Customer relationships
+163
+174
+786
+755
+Concur Customer relationships
+4 to 6
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+6 to 13
+Additional
+Information
+Carrying Amount
+€ millions, unless otherwise stated
+2021
+2020
+Remaining
+Useful Life
+(in years)
+Ariba - Customer relationships
+174
+203
+Significant Intangible Assets
+Signavio Customer relationships
+184
+ΝΑ
+Other Property,
+Other Property,
+Advance Payments
+Land and Buildings
+Leased
+Plant, and
+Equipment
+Plant, and
+Equipment Leased
+and Construction in
+Land and Buildings
+Total
+1,457
+1,816
+1,628
+41
+99
+5,041
+1,609
+1,801
+Progress
+To Our
+2 to 5 years
+Based on the term of the lease contract
+2 to 6 years
+15
+Total significant intangible assets
+2,786
+2,776
+(D.4) Property, Plant, and Equipment
+Depreciation of Property, Plant and Equipment
+Property, plant, and equipment are typically depreciated using the straight-line method. Judgment is
+required in estimating the useful life of the assets. In this assessment we consider, among others, our
+history with similar assets and current and future changes in technology.
+Useful Lives of Property, Plant, and Equipment
+4 to 20 years
+Buildings
+Information technology equipment
+Office furniture
+Automobiles
+Property, Plant, and Equipment
+€ millions
+12/31/2020
+12/31/2021
+Predominantly 25 to 50 years
+Leased assets and leasehold improvements
+Stakeholders
+Lease liabilities
+Management Report
+The table below shows non-current assets excluding financial instruments, deferred tax assets, post-
+employment benefit assets, and rights arising under insurance contracts.
+Non-Current Assets by Region
+€ millions
+Germany
+Rest of EMEA
+EMEA
+Rest of Americas
+Combined Group
+APJ
+SAP Group
+2021
+2020
+5,305
+4,350
+5,927
+5,798
+11,232
+Non-Current Assets by Region
+(D.7)
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+2020
+255
+237
+SAP invests and holds interests in unrelated parties that manage investments in venture capital. On
+December 31, 2021, total commitments to make such investments amounted to €757 million
+(2020: €607 million), of which €502 million had been drawn (2020: €370 million). By investing in such
+venture capital funds, we are exposed to the risks inherent in the business areas in which the entities
+operate. Our maximum exposure to loss is the amount invested plus contractually committed future
+capital contributions.
+Maturities
+€ millions
+Due 2022
+Total
+10,149
+12/31/2021
+Venture Capital Funds
+255
+255
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Combined Group
+Management Report
+Investments in
+2021
+30,143
+441
+The contractual obligations for acquisition of property, plant, and equipment and intangible assets
+relate primarily to the purchase of hardware, software, patents, office equipment, and vehicles. The
+remaining obligations relate mainly to marketing, consulting, maintenance, license agreements, cloud
+services, and other third-party agreements. The increase is mainly due to new purchase obligations
+related to cloud services. Historically, the majority of such purchase obligations have been realized.
+Maturities
+€ millions
+Due 2022
+Due 2023 to 2026
+Due thereafter
+Total
+12/31/2021
+Purchase Obligations
+1,199
+2,946
+634
+4,779
+225/338
+226/338
+SAP
+SAP Integrated Report 2021
+To Our
+3,791
+4,779
+3,685
+4,680
+379
+30,584
+27,208
+1,263
+1,216
+43,079
+38,572
+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).
+26,829
+(D.8)
+2021
+2020
+€ millions
+Contractual obligations for acquisition of property, plant, and equipment and
+intangible assets
+Other purchase obligations
+Purchase obligations
+99
+106
+Purchase Obligations
+Investments in venture capital funds
+Americas
+Financial Commitments in Venture Capital Funds
+Equity securities
+0
+5,799
+5,799
+0
+3,113
+3,113
+Investments in associates
+Total
+0
+155
+0
+14
+14
+Equity investments
+0
+5,954
+5,954
+155
+0
+Non-
+Current
+Total
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+(D.6)
+Equity Investments
+Accounting Policies, Judgments, and Estimates
+As we do not designate financial assets as “at fair value through profit or loss," we generally classify
+financial assets into the following categories: at amortized cost (AC), at fair value through other
+comprehensive income (FVOCI), and at fair value through profit or loss (FVTPL), depending on the
+contractual cash flows of and our business model for holding the respective asset.
+For equity securities, as the cash flow characteristics are typically other than solely principal and
+interest, we take an investment-by-investment decision whether to classify as FVTPL or FVOCI.
+Current
+The valuation of equity securities of private companies requires judgment, since it is typically based
+on significant unobservable inputs as no market prices are available and there is an inherent lack of
+liquidity.
+Considerable judgment and assumptions are involved with regard to the selection of appropriate
+comparable company data, the assessment of cash requirements of the business, the acceptance of
+the technology or products in the addressable markets, the actual and forecasted performance, the
+milestone achievements, the adequacy of price points from financing rounds, the transaction of similar
+securities of the same company, the rights and preferences of the underlying securities, the selection
+of adequate equity allocation parameters, and the possible exit scenarios and associated weightings.
+Because all of these assumptions could change significantly and because of the inherent uncertainty
+of valuation, our estimated fair values may differ significantly from the values that would have been
+used had market prices for the investments existed and that will ultimately be realized, and those
+differences could be material.
+Gains/losses on equity securities at FVTPL include gains/losses from fair value fluctuations, from
+disposals as well as dividends, while gains/losses on equity securities at FVOCI only include
+dividends, all of which are shown in Financial income, net. Regular way purchases and sales are
+recorded as at the trade date.
+Equity Investments
+2021
+2020
+€ millions
+Current
+Non-
+Current
+€ millions
+3,127
+We take the most recent qualitative and quantitative information aspects into consideration to
+determine the fair value estimates of these equity securities.
+Other financial assets
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Investments in Associates
+SAP also has interests in a number of individually immaterial associates. We own more than 20% of
+the equity interests or have at least 20% of the voting rights. Based on these facts and the nature of
+the relationships, SAP has determined that it has significant influence.
+The following table shows, in aggregate, the carrying amount and share of profit of these associates.
+€ millions
+Carrying amount of interest in associates
+Stakeholders
+Share of profit and losses from continuing operations
+2020
+155
+14
+-1
+SAP contributed certain software solutions specific to the financial services industry to SAP Fioneer
+(with SAP employees also transferring over on a voluntary basis) in exchange for a minority share in
+the new entity. The transaction closed on September 1, 2021. The associated accounting for this
+transaction is preliminary and the accounting alignment is ongoing. As such, the proportionate share
+of earnings is provisional.
+The proportionate share of earnings of SAP Fioneer is included in SAP's Consolidated Financial
+Statements with a time lag of one month. The figures for the equity result relate to the period from
+September 1, 2021, to November 30, 2021.
+For a list of the names of other equity investments, see Note (G.9).
+3,127
+2021
+Combined Group
+-9
+SAP Integrated Report 2021
+2,758
+To Our
+6,275
+9,033
+3,512
+5,147
+Equity investments as % of
+0
+95
+1,635
+0
+89
+SAP
+61
+Other financial assets
+223/338
+66
+224/338
+9,868
+742
+742
+0
+707
+0
+396
+393
+373
+393
+Private placement
+transactions
+10,369
+790
+Commercial paper
+931
+0
+931
+0
+931
+930
+0
+0
+931
+Bank loans
+1,533
+0
+1,533
+500
+0
+930
+9,844
+Nominal Volume
+9,751
+1,533
+Financial Debt
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+2021
+2020
+€ millions
+Carrying Amount
+Nominal Volume
+Carrying Amount
+8,851
+900
+8,965
+900
+Bonds
+Total
+500
+Non-
+Current
+Non-
+Current
+Current
+Total
+Current Non-Current
+Non-
+Current
+Current
+Current
+52
+2,348
+52
+Other financial liabilities
+Change in value recognized in OCI
+Hedge ineffectiveness recognized in Finance income, net
+Cost of hedging recognized in OCI
+Amount reclassified from cash flow hedge in OCI to Other non-operating income, net
+Amount reclassified from cost of hedging in OCI to Finance income, net
+Forecasted License Payments
+2021
+1,023
+1
+-31
+-28
+0
+2
+-4
+-3
+On December 31, 2021, we held the following instruments to hedge exposures to changes in foreign
+currency:
+Details on Hedging Instruments in Foreign Currency Exchange Rate Hedges
+Maturity
+Other financial assets
+Carrying amount
+Nominal amount
+€ millions
+€ millions
+Change in value used for calculating hedge ineffectiveness
+Cash flow hedge
+2021
+-28
+-28
+Cost of hedging
+-2
+Balances remaining in cash flow hedge reserve for which hedge accounting is no longer
+applied
+2021
+0
+SAP
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+The amounts as at December 31, 2021, designated as hedging instruments were as follows:
+Designated Hedging Instruments in Foreign Currency Exchange Rate Hedges
+SAP Integrated Report 2021
+1-6 Months
+7-12 Months
+Forward exchange contracts
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+The spot component of derivatives held within a designated cash flow hedge relationship affecting
+other comprehensive income
+237/338
+Foreign currency embedded derivatives affecting other non-operating expense, net
+Foreign Currency Exposure
+€ billions
+Year-end exposure toward all our major currencies
+Average exposure
+Highest exposure
+Lowest exposure
+2021
+2020
+1.4
+Thus, our foreign currency exposure (and our average/high/low exposure) as at December 31, 2021,
+was as follows:
+Forecasted License Payments
+Consequently, we are only exposed to significant foreign currency exchange rate fluctuations with
+regard to the following:
+The SAP Group's entities generally operate in their functional currencies. In exceptional cases and
+limited economic environments, operating transactions are denominated in currencies other than
+the functional currency, leading to a foreign currency exchange rate risk for the related monetary
+instruments. Where material, this foreign currency exchange rate risk is hedged. Therefore,
+fluctuations in foreign currency exchange rates do not have a significant impact on either profit or
+other comprehensive income with regard to our non-derivative monetary financial instruments and
+related income or expenses.
+Net exposure in € millions
+Average EUR:GBP forward rate
+Average EUR:JPY forward rate
+Average EUR:CHF forward rate
+Average EUR:AUD forward rate
+Average EUR:USD forward rate
+770
+253
+0.87
+Our free-standing derivatives designed for hedging foreign currency exchange rate risks almost
+completely balance the changes in the fair values of the hedged item attributable to exchange rate
+movements in the Consolidated Income Statements in the same period. As a consequence, the
+hedged items and the hedging instruments are not exposed to foreign currency exchange rate
+risks, and thereby have no effect on profit.
+0.86
+130.32
+1.08
+1.07
+1.58
+1.61
+1.19
+1.16
+Foreign Currency Exchange Rate Exposure
+Our risk exposure is based on the following assumptions:
+130.52
+0.9
+The amounts as at December 31, 2021, relating to items designated as hedged items were as follows:
+Designated Hedged Items in Foreign Currency Exchange Rate Hedges
+We enter into derivative financial instruments, primarily foreign exchange forward contracts, to hedge
+significant forecasted cash flows (royalties) from foreign subsidiaries denominated in foreign
+currencies with a hedge ratio of 1:1 and a hedge horizon of up to 12 months, which is also the
+maximum maturity of the foreign exchange derivatives we use.
+1 Other includes new lease liabilities.
+233/338
+234/338
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Section F - Management of
+Financial Risk Factors
+This section discusses financial risk factors and risk management regarding foreign currency exchange
+rate risk, interest rate risk, equity price risk, credit risk, and liquidity risk. Further, it contains information
+about financial instruments.
+(F.1)
+Financial Risk Factors and Risk Management
+Accounting for Derivative Financial Instruments
+We use derivatives to hedge foreign currency risk or interest rate risk and designate them as cash flow
+or fair value hedges if they qualify for hedge accounting under IFRS 9, which involves judgment.
+Derivatives Not Designated as Hedging Instruments
+Many transactions constitute economic hedges, and therefore contribute effectively to the securing of
+financial risks but do not qualify for hedge accounting under IFRS 9. To hedge currency risks inherent
+in foreign-currency denominated and recognized monetary assets and liabilities, we do not designate
+our held-for-trading derivative financial instruments as accounting hedges, because the profits and
+losses from the underlying transactions are recognized in profit or loss in the same periods as the
+profits or losses from the derivatives.
+15,411
+413
+-5
+-233
+61
+Interest rate swaps
+7
+0
+0
+2
+-123
+-114
+Lease¹
+In addition, we occasionally have contracts that contain foreign currency embedded derivatives that
+are required to be accounted for separately.
+2,204
+15
+-125
+0
+404
+2,120
+Total liabilities from financing activities
+15,895
+-675
+17
+-378
+Fair value fluctuations in the spot component of such derivatives at FVTPL are included in Other non-
+operating income/expense, net while the forward element is shown in Financial income, net.
+Derivatives Designated as Hedging Instruments
+a) Cash Flow Hedge
+We only purchase derivative financial instruments to reduce risks and not for speculation, which is
+defined as entering into derivative instruments without a corresponding underlying transaction.
+Foreign Currency Exchange Rate Risk
+Foreign Currency Exchange Rate Risk Factors
+As we are active worldwide, our ordinary operations are subject to risks associated with fluctuations in
+foreign currencies. Since the Group's entities mainly conduct their operating business in their own
+235/338
+236/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+We manage market risks, credit risk, and liquidity risk on a Group-wide basis through our global
+treasury department, global risk management, and global credit management. Risk management
+policies are established to identify risks, to set appropriate risk limits, and to monitor risks. Risk
+management policies and hedging strategies are laid out in our internal guidelines (for example,
+treasury guideline and other internal guidelines), and are subject to continuous internal review,
+analysis, and update to reflect changes in market conditions and our business.
+Combined Group
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+functional currencies, our risk of exchange rate fluctuations from ongoing ordinary operations is not
+considered significant. However, SAP occasionally generates foreign currency-denominated
+receivables, payables, and other monetary items by transacting in a currency other than the functional
+currency. To mitigate the extent of the associated foreign currency exchange rate risk, the majority of
+these transactions are hedged as described below.
+In rare circumstances, transacting in a currency other than the functional currency also leads to
+embedded foreign currency derivatives being separated and measured at fair value through profit or
+loss.
+In addition, the intellectual property (IP) holders in the SAP Group are exposed to risks associated
+with forecasted intercompany cash flows in foreign currencies. These cash flows arise out of royalty
+payments from subsidiaries to the respective IP holder. The royalties are linked to the subsidiaries'
+external revenue. This arrangement leads to a concentration of the foreign currency exchange rate risk
+with the IP holders, as the royalties are mostly denominated in the subsidiaries' local currencies, while
+the functional currency of the IP holders with the highest royalty volume is the euro. The highest
+foreign currency exchange rate exposure of this kind relates to the currencies of subsidiaries with
+significant operations, for example the U.S. dollar, the pound sterling, the Japanese yen, the Swiss
+franc, and the Australian dollar.
+Generally, we are not exposed to any significant foreign currency exchange rate risk with regard to our
+investing and financing activities, as such activities are normally conducted in the functional currency
+of the investing or borrowing entity.
+Foreign Currency Exchange Rate Risk Management
+We continuously monitor our exposure to currency fluctuation risks based on monetary items and
+forecasted transactions and pursue a Group-wide strategy to manage foreign currency exchange rate
+risk, using derivative financial instruments, primarily foreign exchange forward contracts, as
+appropriate, with the primary aim of reducing profit or loss volatility. Most of the hedging instruments
+are not designated as being in a hedge accounting relationship.
+Currency Hedges Designated as Hedging Instruments (Cash Flow Hedges)
+Management Report
+For all years presented, no previously highly probable transaction designated as a hedged item in a
+foreign currency cash flow hedge relationship ceased to be probable. Therefore, we did not
+discontinue any of our cash flow hedge relationships. Also, ineffectiveness was either not material or
+non-existent in all years reported. Generally, the cash flows of the hedged forecasted 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 statement of financial position.
+We are exposed to various financial risks, such as market risks (that is, foreign currency exchange rate
+risk, interest rate risk, and equity price risk), credit risk, and liquidity risk.
+Non-derivative financial instruments: We are in the process of reviewing and amending the
+respective contracts well before the respective IBOR will no longer be quoted, which is the case for
+our USD bond of US$300 million referencing to three-month USD LIBOR.
+In general, we apply cash flow hedge accounting to the foreign currency risk of highly probable
+forecasted transactions. With regard to foreign currency risk, hedge accounting relates to the spot
+price and the intrinsic values of the derivatives designated and qualifying as cash flow hedges.
+Accordingly, the effective portion of these components determined on a present value basis is
+recorded in other comprehensive income. The forward element and time value as well as foreign
+currency basis spreads excluded from the hedging relationship are recorded as cost of hedging in a
+separate position in other comprehensive income. As the amounts are not material, they are
+presented together with the effective portion of the cash flow hedges in our consolidated statements
+of comprehensive income and consolidated statements of changes in equity. All other components
+including counterparty credit risk adjustments of the derivative and the ineffective portion are
+immediately recognized in Financial Income, net profit or loss. Amounts accumulated in other
+comprehensive income are reclassified to profit or loss to Other non-operating income/expense, net
+and Financial income, net in the same period when the hedged item affects profit or loss.
+b) Fair Value Hedge
+We apply fair value hedge accounting for certain of our fixed-rate financial liabilities and show the fair
+value fluctuations in Financial income, net.
+c) Valuation and Testing of Effectiveness
+At inception of a designated hedging relationship, we document our risk management strategy and
+the economic relationship between hedged item and hedging instrument. The existence of an
+economic relationship is demonstrated as well as the effectiveness of the hedging relationship tested
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+1,250
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Information
+prospectively by applying the critical terms match for our foreign currency hedges, since currencies,
+maturities, and the amounts are closely aligned for the forecasted transactions and for the spot
+element of the forward exchange rate contract or intrinsic value of the currency options, respectively.
+For interest rate swaps, effectiveness is tested prospectively using statistical methods in the form of a
+regression analysis, by which the validity and extent of the relationship between the change in value
+of the hedged items as the independent variable and the fair value change of the derivatives as the
+dependent variable is determined. The main sources of ineffectiveness are:
+The effect of the counterparty and our own credit risk on the fair value of the forward exchange
+contracts and interest rate swaps, which is not reflected in the respective hedged item, and
+- Differences in the timing of hedged item and hedged transaction in our cash flow hedges.
+Amendments to IFRS 9, IAS 39, IFRS 16, IFRS 4, and IFRS 7 - Interest Rate Benchmark
+Reform
+The IASB issued amendments to IFRS 9, IAS 39, IFRS 16, IFRS 4, and IFRS 7 on August 26, 2020,
+completing Phase 2 of the Interest Rate Benchmark Reform (IBOR reform) project. This was
+necessary because major interest rate benchmarks were reformed or even replaced.
+We are exposed to interest rate benchmarks due to our investing, financing, and hedging activities.
+The impact of the interest rate benchmark reform, however, is very limited either because the interest
+rate benchmarks we are mainly using will stay in place (that is, Euribor, USD Fed Funds Rate), the
+instruments will mature well before the respective benchmark rate is discontinued, or because the
+instruments have fixed interest rates.
+We are impacted by the IBOR reform with regard to:
+Derivatives held in a hedging relationship: We have already replaced the old interest rate
+benchmark with the new risk-free rate for our EUR interest rate swaps designated in hedging
+relationships for which we transitioned from EONIA to Euro Short-Term Rate (€STR) + 8.5bps in the
+first quarter of 2021, or
+Additional
+-6
+1.3
+1.6
+239/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Interest Rate Exposure
+Our interest rate exposure (and our average/high/low exposure) as at December 31 was as follows:
+Interest Rate Risk Exposure
+€ billions
+Fair value interest rate risk
+2021
+2020
+Year-End
+Average
+High
+Low
+None of the fair value adjustment from the receiver swaps, the basis adjustment on the underlying
+hedged items held in fair value hedge relationships, and the difference between the two recognized in
+Financial income, net, is material in any of the years presented.
+1.031%
+0.868%
+0.233%
+2021
+Maturity
+2022
+2024
+2027
+2028
+2029
+2030
+2031
+Nominal amounts
+Year-End
+196
+Average variable interest rate
+1.011%
+0.890%
+1,000
+1.469%
+1,000
+800
+500
+1,250
+0.893%
+88
+Average
+High
+Low
+3.18
+3.93
+1.99
+From interest rate swaps
+4.83
+4.82
+4.83
+4.81
+4.81
+1.99
+4.78
+4.30
+240/338
+Interest Rate Sensitivity
+A sensitivity analysis is provided to show the impact of our interest rate risk exposure on profit or loss
+and equity in accordance with IFRS 7, considering the following:
+Changes in interest rates only affect the accounting for non-derivative fixed-rate financial
+instruments if they are recognized at fair value. Therefore, such interest rate changes do not
+change the carrying amounts of our non-derivative fixed-rate financial liabilities, as we account for
+them at amortized cost. Investments in fixed-rate financial assets classified as fair value through
+profit or loss were not material at each year end reported. Thus, we do not consider any fixed-rate
+instruments in the equity-related sensitivity calculation.
+Income or expenses recorded in connection with non-derivative financial instruments with variable
+interest rates are subject to interest rate risk if they are not hedged items in an effective hedge
+relationship. Thus, we take into consideration interest rate changes relating to our variable-rate
+financing and our investments in money market instruments in the profit-related 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
+swaps are not reflected in the sensitivity calculation, as they offset the fixed interest rate payments
+for the bonds and private placements as hedged items. However, changes in market interest rates
+affect the amount of interest payments from the interest rate swap. As a consequence, we include
+those effects of market interest rates on interest payments in the profit-related sensitivity
+calculation.
+Due to the different interest rate expectations for the U.S. dollar and the euro area, we base our
+sensitivity analyses on a yield curve upward shift of +75/+20 basis points (bps) for the U.S. dollar/euro
+area (2020: +50/+10bps for the U.S. dollar/euro area; 2019: +50/+10bps for the U.S. dollar/euro area),
+and a yield curve downward shift of -25/-20bps for the U.S. dollar/euro area (2020: -50/-20bps for
+the U.S. dollar/euro area; 2019: -50/- 20bps for the U.S. dollar/euro area).
+If, on December 31, 2021, 2020, and 2019, interest rates had been higher/lower than as described
+above, this would not have had a material effect on Financial income, net, for our variable interest rate
+investments and would have had the following effects on Financial income, net.
+5.10
+7
+1.70
+2.07
+From investments
+0.03
+0.03
+0.03
+0.02
+0.02
+0.02
+0.02
+0.02
+2.95
+Cash flow interest rate risk
+7.72
+6.25
+7.72
+4.67
+4.58
+5.14
+5.77
+4.58
+1.71
+From investments (including cash)
+From financing
+0.9
+0
+USD interest rate swaps
+40
+53
+-49
+-49
+-53
+106
+43
+53
+-106
+-43
+-53
+Interest Rate Risk Factors
+We are exposed to interest rate risk as a result of our investing and financing activities mainly in euros
+and U.S. dollars, since a large part of our investments are based on variable rates and/or short
+maturities (2021: 67%; 2020: 67%) and most of our financing transactions are based on fixed rates
+and long maturities (2021: 87%; 2020: 85%).
+Interest Rate Risk Management
+The aim of our interest rate risk management is to reduce profit or loss volatility and optimize our
+interest result by creating a balanced structure of fixed and variable cash flows. We therefore manage
+interest rate risks by adding interest-rate-related derivative instruments to a given portfolio of
+investments and debt financing. The desired fixed-floating mix of our net debt is set by the Treasury
+Committee.
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Combined Group
+40
+Interest Rate Risk
+238/338
+All currencies +10%
+1.0
+1.0
+0.9
+Foreign Currency Exchange Rate Sensitivity
+We calculate our sensitivity on an upward/downward shift of +/-10% of the foreign currency exchange
+rate between the euro and all major currencies (2020: +/-10% of the foreign currency exchange rate
+between the euro and all other major currencies; 2019: +/-10% of the foreign currency exchange rate
+between the euro and all other major currencies). If, on December 31, 2021, 2020, and 2019, the
+foreign currency exchange rates had been higher/lower as described above, this would have had the
+following effects on other non-operating expense, net and other comprehensive income:
+Foreign Currency Sensitivity
+€ millions
+Effects on Other Non-Operating Expense, Net
+Effects on Other Comprehensive Income
+Management Report
+2021
+2019
+2021
+2020
+2019
+Derivatives held within a designated cash flow hedge relationship
+All major currencies -10% (2020: all major currencies -10%;
+2019: all major currencies -10%)
+All major currencies +10% (2020: all major currencies +10%;
+2019: all major currencies +10%)
+Embedded derivatives
+All currencies -10%
+2020
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Notional amount
+Carrying amount
+Other financial assets
+Other financial liabilities
+Change in fair value used for measuring ineffectiveness
+-16
+2021
+Interest Rate Swaps for
+EUR Borrowing
+Interest Rate Swaps for
+USD Borrowing
+€ millions
+4,550
+0
+-49
+-49
+As at December 31, 2021, we held the following instruments to hedge exposures to changes in
+interest rates:
+Details on Hedging Instruments in Interest Rate Hedges
+€ millions
+EUR interest rate swaps
+Nominal amounts
+Average variable interest rate
+285
+7
+The amounts as at December 31, 2021, designated as hedging instruments were as follows:
+Designated Hedging Instruments in Interest Rate Hedges
+-9
+Derivatives Designated as Hedging Instruments (Fair Value Hedges)
+To match the interest rate risk from our financing transactions to our investments, we use receiver
+interest rate swaps to convert certain fixed-rate financial liabilities to floating, and by this means
+secure the fair value of the swapped financing transactions on a 1:1 ratio. Including interest rate
+swaps, 50% (2020: 48%) of our total interest-bearing financial liabilities outstanding as at
+December 31, 2021, had a fixed interest rate.
+The amounts as at December 31, 2021, relating to items designated as hedged items were as follows:
+Designated Hedged Items in Interest Rate Hedges
+€ millions
+Notional amount
+Carrying amount
+Accumulated fair value adjustments in Other financial liabilities
+Change in fair value used for measuring ineffectiveness
+Accumulated amount of fair value hedge adjustments for
+hedged items ceased to be adjusted for hedging gains/losses
+0
+2021
+Fixed-Rate Borrowing
+in USD
+4,550
+285
+4,508
+284
+59
+-24
+59
+Fixed-Rate Borrowing
+in EUR
+0
+We continue to monitor the IBOR reform project, assess any impact, manage our transition to
+alternative benchmark rates, and provide respective disclosures. Apart from that, the IBOR reform had
+no impact on our risk management strategy.
+0
+Eurobond 22 - 2020
+2023
+99.794%
+0.000% (fix)
+0.07%
+€600
+599
+599
+Eurobond 23 - 2020
+2026
+99.200%
+0.125% (fix)
+0.26%
+€600
+596
+596
+Eurobond 24 - 2020
+2029
+98.787%
+1,279
+1,223
+0
+1.78%
+Eurobond 19 - 2018
+2024
+99.227%
+0.750% (fix)
+0.89%
+€850
+847
+845
+Eurobond 20 - 2018
+0.375% (fix)
+2028
+1.250% (fix)
+1.38%
+€1,000
+982
+1,009
+Eurobond 21 - 2018
+2031
+98.382%
+1.625% (fix)
+98.871%
+899
+0.51%
+769
+Private placements
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Nominal Volume
+Maturity
+Coupon Rate
+Effective Interest
+Rate
+(in respective
+currency in
+millions)
+2021
+2020
+Carrying
+Amount
+Carrying Amount
+(in € millions)
+Tranche 9 2012
+Tranche 8-2012
+Tranche 7-2012
+U.S. private placements
+789
+Eurobonds
+9,487
+10,125
+USD bond 2018
+2025
+100.000%
+0.721% (var.)
+0.80%
+€800
+US$300
+243
+Bonds
+9,751
+10,369
+All of our Eurobonds are listed for trading on the Luxembourg Stock Exchange.
+231/338
+SAP
+SAP Integrated Report 2021
+Private Placements
+264
+900
+€900
+0.36%
+84
+Bonds
+Financial liabilities are unsecured, except for the retention of title and similar rights customary in our
+industry. Effective interest rates on our financial debt (including the effects from interest rate swaps)
+were 0.83% in 2021, 0.87% in 2020, and 1.09% in 2019.
+For more information about the risk associated with our financial liabilities, see Note (F.1). For more
+information about fair values, see Note (F.2).
+2021
+2020
+Nominal
+Volume (in
+Maturity
+Issue Price
+Coupon Rate
+Effective
+Interest Rate
+respective
+currency in
+Carrying
+Amount
+Carrying Amount
+(in € millions)
+(in € millions)
+millions)
+Eurobond 8 - 2014
+2023
+87
+63
+84
+84
+1,250
+1,302
+Financial debt
+3,756
+9,338
+3,760
+9,245
+Financial liabilities
+4,528
+Eurobond 9 - 2014
+11,042
+1,482
+11,801
+1,484
+11,860
+13,344
+13,605
+15,953
+Financial debt as % of
+Financial liabilities
+83
+13,005
+15,570
+2027
+99.478%
+99.284%
+1.125% (fix)
+1.750% (fix)
+Eurobond 15 - 2018
+2026
+99.576%
+1.000% (fix)
+1.06%
+€500
+499
+498
+Eurobond 16 - 2018
+500
+2030
+1.375% (fix)
+1.50%
+€500
+491
+510
+Eurobond 18 - 2018
+2022
+99.654%
+0.250% (fix)
+98.687%
+(in € millions)
+0
+-0.15%
+1.24%
+€1,000
+999
+998
+1.87%
+€1,000
+985
+1,006
+Eurobond 12 - 2015
+€500
+2025
+1.000% (fix)
+1.13%
+€600
+597
+597
+Eurobond 14 - 2018
+2021
+100.519%
+0.000% (var.)
+99.264%
+2022
+€1,250
+3.22%
+Combined Group
+Management Report
+Statements IFRS
+Sustainability
+Additional
+Information
+Business
+Foreign
+Fair Value
+€ millions
+1/1/2020
+Cash Flows
+Other
+12/31/2020
+Combinations
+Currency
+Changes
+Current financial debt
+2,529
+-2,282
+Consolidated Financial Further Information on
+Stakeholders
+To Our
+SAP
+42
+Lease¹
+2,120
+-374
+4
+106
+0
+287
+2,143
+2
+Total liabilities from financing activities
+-646
+7
+187
+-6
+297
+15,250
+1 Other includes new lease liabilities.
+232/338
+SAP Integrated Report 2021
+15,411
+-17
+0
+1,251
+126
+Transaction costs
+-64
+-16
+0
+0
+0
+14
+-66
+0
+Financial debt (carrying amount)
+-298
+2
+-109
+117
+14
+13,344
+Accrued interest
+67
+0
+13,616
+0
+117
+0
+1,482
+Non-current financial debt
+11,139
+2,000
+1
+-88
+0
+-1,251
+11,801
+3.18% (fix)
+Financial debt (nominal volume)
+-282
+2
+-105
+0
+0
+13,283
+Basis adjustment
+13
+0
+13,668
+157
+-4
+0
+€ millions
+1/1/2021
+Cash Flows
+Business
+Combinations
+Foreign
+Currency
+Fair Value
+Changes
+Other
+12/31/2021
+Current financial debt
+1,482
+980
+1
+1
+0
+1,291
+3,755
+Non-current financial debt
+11,801
+-1,252
+The changes in our financial debts are reconciled to the cash flows from borrowings included in the cash flow from financing
+activities.
+Reconciliation of Liabilities Arising from Financing Activities
+In March 2021, SAP drew two short-term bank loans of €950 million and €500 million with tenors of
+one year. In November 2021, the tenors were extended to September 30, 2022. The loans can be
+repaid flexibly over time, and currently bear interest at 0.55% and 0.52%, respectively.
+In 2021, prior to its original maturity date, SAP repaid the remaining €1,250 million from the term loan
+drawn in 2019 for the acquisition of Qualtrics.
+-1
+US$444.5
+396
+373
+2024
+3.33% (fix)
+3.37%
+US$323
+300
+2
+281
+3.53% (fix)
+US$100
+94
+88
+790
+742
+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, or CP) are being used for
+general corporate purposes, including dividends and share repurchases. As at December 31, 2021, we
+had €930 million of issued commercial paper outstanding with maturities generally less than six
+months and the carrying amount was €931 million (December 31, 2020: €931 million). The weighted
+average interest rate of our CP was -0.48% as at December 31, 2021 (December 31, 2020: -0.40%).
+Loans
+2027
+78
+3.57%
+-1,291
+-55
+Financial debt (carrying amount)
+13,344
+-272
+3
+82
+-163
+11
+13,005
+11
+Accrued interest
+0
+0
+0
+-1
+60
+Interest rate swaps
+-114
+0
+0
+61
+0
+0
+0
+Financial debt (nominal volume)
+0
+9,338
+13,283
+-272
+3
+0
+0
+13,094
+Basis adjustment
+126
+79
+0
+3
+-163
+0
+0
+-34
+0
+Transaction costs
+-66
+At fair value through profit or loss
+11,547
+11,547
+4,846
+AC
+FVTPL
+Carrying Amount
+At Amortized Cost
+Category
+12/31/2020
+Financial liabilities
+4,846
+At amortized cost
+At Fair Value
+FVTPL
+SAP Integrated Report 2021
+-61
+Other financial assets
+Туре
+At amortized cost
+Financial Instruments Measured at Fair Value on a Recurring Basis
+Sustainability
+Consolidated Financial Further Information on
+Statements IFRS
+Combined Group
+Management Report
+To Our
+Stakeholders
+SAP
+249/338
+A description of the valuation techniques and the inputs used in the fair value measurement is given
+below:
+Determination of Fair Values
+-16,904
+-16,904
+AC
+-61
+At fair value through profit or loss
+At fair value through profit or loss
+€ millions
+At amortized cost
+Financial liabilities
+At amortized cost
+At fair value through profit or loss
+Financial assets
+€ millions
+Additional
+Information
+Fair Values of Financial Instruments by Instrument Classification
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+Stakeholders
+To Our
+Fair Value
+Hierarchy
+SAP Integrated Report 2021
+Further Information on
+Sustainability
+Financial assets
+12/31/2021
+Carrying Amount
+Fair Values of Financial Instruments by Instrument Classification
+-16,517
+-16,517
+AC
+-62
+-62
+Category
+FVTPL
+10,131
+10,131
+13,323
+AC
+FVTPL
+At Fair Value
+At Amortized Cost
+13,323
+Determination of Fair Value/Valuation
+Technique
+The estimated fair value would
+increase (decrease) if:
+Additional
+The estimated fair value would
+increase (decrease) if:
+- The imminent exit value
+increases (decreases)
+- Estimated time to exit increases
+(decreases)
+- Volatility assumptions were
+higher (lower)
+-Weighting of the applied equity
+allocation methods changes
+- Weighting of financing rounds
+changes
+- Price of latest financing round
+increases (decreases)
+- Different financing rounds are
+selected
+- The investees' revenues were
+higher (lower)
+- The revenue multiples were
+higher (lower)
+The estimated fair value would
+increase (decrease) if:
+Net asset value
+calculations of the
+respective funds
+Nature and pricing
+indication of latest
+financing round
+- Imminent exit value
+- The liquidity discounts were
+lower (higher)
+- Estimated time to exit
+- The overall company value were
+higher (lower)
+The estimated fair value would
+increase (decrease) if:
+SAP
+250/338
+ΝΑ
+NA
+Discounted cash flow using par
+method. 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.
+Level 2
+-The respective analyzed share
+class would be affected by this
+change due to its rights and
+preferences
+FX forward contracts
+ΝΑ
+NA
+Market approach. Venture capital
+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.
+Level 3
+Call option on equity
+shares
+- Reported net asset value of
+respective fund were higher
+(lower)
+Other financial assets/ Financial liabilities
+Significant Unobservable
+Inputs
+- Volatility assumptions
+- Discounts for lack of
+marketability
+Level 1
+Listed equity
+ΝΑ
+ΝΑ
+Quoted prices in an active market
+Level 1
+Quoted prices in an active market
+Debt securities
+ΝΑ
+Quoted prices in an active market
+Level 1
+Money-market and
+similar funds
+Interrelationship Between
+Significant Unobservable Inputs
+and Fair Value Measurement
+Information
+ΝΑ
+- Weighting of equity
+allocation method such
+as option pricing model
+and common stock
+equivalent model
+ΝΑ
+securities
+- Weighting of financing
+rounds
+- Nature and selection of
+financing rounds
+- Revenues of investees
+- Discounts for lack of
+marketability (10% to
+32.3%)
+- Peer companies used
+(revenue multiples range
+from 3.5 to 11.5)
+Net asset value/fair market value as
+reported by the respective funds
+Last financing round valuations
+ΝΑ
+Market approach. Venture capital
+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.
+Level 3
+Unlisted equity
+securities
+ΝΑ
+ΝΑ
+Quoted prices in an active market
+deducting a discount for the disposal
+restriction derived from the premium
+for a respective put option.
+Level 2
+Market approach. Comparable
+company valuation using revenue
+multiples derived from companies
+comparable to the investee.
+248/338
+245/338
+2 Since the line items Trade receivables, Trade payables, and Other financial assets contain both financial and 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.
+Interest rate derivatives designated as hedging instruments
+-49
+0
+Cash outflows
+-48
+-476
+Cash inflows
+60
+421
+Total of derivative financial liabilities
+-142
+-76
+-67
+-63
+-62
+-7
+Derivative financial assets
+Currency derivatives not designated as hedging instruments
+45
+38
+Cash outflows
+139
+885
+Cash inflows
+-141
+12/31/2020
+2021 Thereafter
+Derivative financial liabilities and assets
+Derivative financial liabilities
+Currency derivatives not designated as hedging instruments
+-62
+-61
+Cash outflows
+-2,381
+-12
+-2,878
+-2,902
+Cash inflows
+2,327
+0
+2,842
+0
+Currency derivatives designated as hedging instruments
+-31
+-1
+Cash outflows
+-919
+-7
+Thereafter
+-2,452
+2,923
+2
+158
+68
+97
+Total of derivative financial liabilities and assets
+-89
+-25
+-65
+95
+6
+90
+246/338
+(F.2)
+Fair Value Disclosures on Financial Instruments
+Level Transfers
+It is our policy that transfers between the different levels of the fair value hierarchy are deemed to
+have occurred at the beginning of the period of the event or change in circumstances that caused the
+transfer.
+Fair Value of Financial Instruments
+We use various types of financial instruments in the ordinary course of business, which are classified
+as either amortized cost (AC) or fair value through profit or loss (FVTPL). For those financial
+instruments measured at fair value or for which fair value must be disclosed, we have categorized the
+financial instruments into a three-level fair value hierarchy depending on the inputs used to determine
+fair value and their significance for the valuation techniques.
+SAP
+SAP Integrated Report 2021
+To Our
+51
+53
+Total of derivative financial assets
+495
+2,493
+Currency derivatives designated as hedging instruments
+1
+7
+Cash outflows
+-136
+-291
+Cash inflows
+137
+297
+Cash inflows
+Interest rate derivatives designated as hedging instruments
+114
+Cash outflows
+-4
+-4
+-48
+-398
+Cash inflows
+9
+6
+69
+7
+Stakeholders
+2022
+Contractual Cash Flows
+-184
+-934
+Other financial liabilities
+-13,285
+-4,084
+-1,695
+-1,228
+-936
+Total of non-derivative financial liabilities
+-16,517
+-5,621
+-2,033
+-1,491
+-1,144
+-1,165
+-1,349
+-4,773
+-5,707
+Carrying
+Contractual Cash Flows
+Amount
+€ millions
+12/31/2020
+-208
+-263
+-338
+-448
+Contractual Maturities of Non-Derivative Financial Liabilities
+€ millions
+Carrying
+Amount
+Contractual Cash Flows
+12/31/2021
+2022
+2023
+2024
+2025
+2026
+2021
+Thereafter
+Trade payables
+-1,089
+-1,089
+0
+0
+0
+0
+0
+Lease liabilities
+-2,143
+Non-derivative financial liabilities
+12/31/2021
+2022
+2024
+Total of non-derivative financial liabilities
+-16,904
+-3,422
+-2,999
+-1,962
+-1,429
+-1,083
+-5,933
+-6,864
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Contractual Maturities of Derivative Financial Liabilities and Financial Assets
+€ millions
+Carrying
+Amount
+Contractual Cash Flows
+Carrying
+Amount
+-918
+-1,211
+-1,700
+-2,640
+2025
+Thereafter
+Non-derivative financial liabilities
+Trade payables
+-1,014
+-1,014
+0
+0
+0
+0
+2023
+0
+-2,120
+-426
+-359
+-262
+-218
+-165
+-931
+Other financial liabilities
+-13,770
+-1,982
+Lease liabilities
+The table below is an analysis of the remaining contractual maturities of all our financial liabilities held
+as at December 31, 2021. Financial liabilities for which repayment can be requested by the contract
+partner at any time are assigned to the earliest possible period. Variable interest payments were
+calculated using the latest relevant interest rate fixed as at December 31, 2021. As we generally settle
+our derivative contracts gross, we show the pay and receive legs separately for all our currency and
+interest rate derivatives, whether or not the fair value of the derivative is negative. The cash outflows
+for the currency derivatives are translated using the applicable spot rate.
+Combined Group
+Management Report
+Additional
+Information
+-931
+-11,179
+Private placements
+AC
+-790
+-790
+-801
+-801
+Other non-derivative financial liabilities³
+AC
+-2,424
+-2,424
+-281
+-281
+Derivatives
+Designated as hedging instrument
+FX forward contracts
+Interest rate swaps
+Not designated as hedging instrument
+-31
+-31
+-10,248
+-1,533
+-1,533
+-1,533
+-10,682
+10
+Liabilities
+Trade and other payables
+41
+0
+10
+Trade payables¹
+Other payables²
+Financial liabilities
+-1,702
+-31
+AC
+-1,089
+-613
+-15,571
+Non-derivative financial liabilities
+Loans
+AC
+-1,533
+Bonds
+AC
+-10,682
+-1,089
+10
+-31
+-49
+Additional
+Information
+12/31/2020
+Measurement Categories
+Fair Value
+Category
+Carrying
+At
+Amount
+Amortized
+Cost
+At Fair
+Value
+Level 1
+Level 2
+Level 3
+Total
+Cash and cash equivalents
+5,311
+Cash at banks¹
+AC
+2,732
+2,732
+Time deposits¹
+Assets
+€ millions
+Fair Values of Financial Instruments and Classification Within the Fair Value Hierarchy
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+-49
+-49
+FX forward contracts
+Total financial instruments, net
+FVTPL
+-62
+-62
+-62
+-62
+7,158
+-49
+-3,194
+-5,164
+-695
+4,881
+-978
+247/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+9,997
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+10
+FVTPL
+1,467
+Money market and similar funds
+FVTPL
+4,281
+4,281
+4,281
+4,281
+Trade and other receivables
+6,499
+Trade receivables¹
+AC
+5,888
+5,888
+Other receivables²
+Other financial assets
+Debt securities
+611
+9,033
+AC
+30
+30
+1,467
+AC
+Time deposits¹
+3,149
+Fair Values of Financial Instruments and Classification Within the Fair Value Hierarchy
+€ millions
+Assets
+12/31/2021
+Measurement Categories
+Fair Value
+Category
+Carrying
+At
+Amount
+30
+Amortized
+Level 1
+Level 2
+Level 3
+Total
+Cost
+Cash and cash equivalents
+8,898
+Cash at banks¹
+AC
+3,149
+At Fair
+Value
+10
+30
+FVTPL
+1
+1
+1
+1
+7
+7
+7
+7
+Interest rate swaps
+Not designated as hedging instrument
+FX forward contracts
+FVTPL
+41
+41
+41
+Call options for share-based payments
+FVTPL
+0
+0
+0
+Call option on equity shares
+FX forward contracts
+Designated as hedging instrument
+Derivative assets
+186
+5,799
+5,799
+772
+155
+4,871
+5,799
+Investments in associates²
+155
+Time deposits
+AC
+Equity securities
+2,602
+2,602
+2,602
+Financial instruments related to employee benefit plans²
+-
+201
+Loans and other financial receivables
+AC
+186
+186
+186
+2,602
+AC
+Liquidity Risk Exposure
+In September 2019, we initiated a commercial paper program (Commercial Paper, or CP). As at
+December 31, 2021, we had €930 million of CP outstanding with maturities generally less than six
+months (2020: €930 million).
+6,232
+6,232
+AC
+Trade receivables¹
+6,730
+Trade and other receivables
+1,655
+1,655
+1,655
+1,655
+FVTPL
+Money market and similar funds
+924
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Interest Rate Sensitivity
+€ millions
+Consolidated Financial Further Information on
+Statements IFRS
+Other receivables²
+Other financial assets
+Debt securities
+498
+1,445
+1,445
+1,445
+1,445
+AC
+Time deposits
+14
+Investments in associates²
+3,113
+2,505
+Sustainability
+536
+3,113
+3,113
+FVTPL
+Equity securities
+24
+24
+24
+24
+AC
+5,147
+72
+Financial instruments related to employee benefit
+plans²
+Additional
+Information
+2021
+On December 31, 2021, our exposure from our investments in equity securities was €5,799 million
+(2020: €3,113 million; 2019: €1,996 million).
+For information about the exposure from our share-based payments plans, see Note (B.3).
+Equity Price Sensitivity
+Our sensitivity towards a fluctuation in equity prices is as follows:
+Equity Price Sensitivity
+€ millions
+2021
+2020
+2019
+Investments in equity securities
+Increase in equity prices and respective
+unobservable inputs of 10% - increase of
+515
+259
+156
+financial income, net
+Decrease in equity prices and respective
+unobservable inputs of 10% decrease of
+financial income, net
+-515
+-259
+-156
+241/338
+Equity Price Exposure
+We also monitor the exposure with regard to our share-based payment plans. To reduce resulting
+profit or loss volatility, we historically hedged certain cash flow exposures associated with these plans
+by purchasing derivative instruments, but we did not apply hedge accounting. This practice ceased in
+June 2021.
+Our listed equity investments are monitored based on the current market value that is affected by the
+fluctuations in the volatile stock markets worldwide. Unlisted equity investments are monitored based
+on detailed financial information provided by the investees. The fair value of our listed equity
+investments depends on the equity prices, while the fair value of the unlisted equity investments is
+influenced by various unobservable input factors.
+Equity Price Risk Management
+2020
+2019
+Derivatives held within a designated fair value hedge relationship
+Interest rates +75bps for U.S. dollar area/+20bps for euro area (2020: +50/+10bps for
+U.S. dollar/euro area; 2019: +50/+10bps for U.S. dollar/euro area)
+-70
+-41
+-41
+Interest rates -25bps for U.S. dollar area/-20bps for euro area (2020: -50/-20bps for
+U.S. dollar/euro area; 2019: -50 /-20bps for U.S. dollar/euro area)
+Variable-rate financing
+68
+79
+Effects on Financial Income, Net
+76
+-10
+-6
+-8
+Interest rates-25bps for U.S. dollar area/-20bps for euro area (2020: -50/-20bps for
+U.S. dollar/euro area; 2019: -50/-20bps for U.S. dollar/euro area)
+5
+6
+8
+Equity Price Risk
+Equity Price Risk Factors
+We are exposed to equity price risk with regard to our investments in equity securities and our share-
+based payments plans.
+Interest rates +75bps for U.S. dollar area/+20bps for euro area (2020: +50/+10bps for
+U.S. dollar/euro area; 2019: +50/+10bps for U.S. dollar/euro area)
+242/338
+-
+Loans and other financial receivables
+Designated as hedging instrument
+Derivatives
+-427
+-427
+-771
+-771
+-742
+-2,547
+-742
+-2,547
+AC
+Other non-derivative financial liabilities³
+AC
+Private placements
+-11,897
+-931
+-10,966
+-1,301
+-1,301
+-1,301
+-11,300
+-11,300
+AC
+Bonds
+FX forward contracts
+Interest rate swaps
+-1
+-1
+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.
+-7,833
+-61
+2,509
+-1,128
+-61
+-9,214
+4,904
+-61
+-5,357
+-1,301
+-77
+FVTPL
+Total financial instruments, net
+FX forward contracts
+Not designated as hedging instrument
+0
+0
+0
+0
+-1
+-1
+-61
+162
+AC
+Non-derivative financial liabilities
+38
+FVTPL
+FX forward contracts
+Not designated as hedging instrument
+Interest rate swaps
+114
+114
+114
+114
+7
+7
+7
+7
+FX forward contracts
+Designated as hedging instrument
+Derivative assets
+190
+190
+190
+190
+AC
+38
+38
+38
+Call options for share-based payments
+-15,953
+-298
+-1,014
+-1,014
+AC
+-1,312
+Financial liabilities
+Other payables²
+Trade payables¹
+Trade and other payables
+Loans
+Liabilities
+4
+4
+4
+FVTPL
+Call option on equity shares
+36
+36
+36
+36
+FVTPL
+4
+Additionally, as at December 31, 2021 and 2020, the Group had available lines of credit totaling
+€346 million and €372 million, respectively. There were immaterial borrowings outstanding under
+these lines of credit in all years presented.
+SAP
+To Our
+-139
+TOTAL
+-2.9%
+5,713
+351
+-175
+2020
+€ millions, unless otherwise stated
+Weighted Average Loss Rate
+Gross Carrying Amount
+Not Credit-Impaired
+Gross Carrying Amount
+Credit-Impaired
+ECL Allowance
+AR not due and due
+AR overdue 1 to 30 days
+AR overdue 30 to 90 days
+AR overdue more than 90 days
+TOTAL
+-0.2%
+4,426
+0
+-10
+240
+482
+-19.3%
+AR overdue more than 90 days
+€ millions, unless otherwise stated
+Weighted Average Loss
+Rate
+Gross Carrying Amount
+Not Credit-Impaired
+Gross Carrying Amount
+Credit-Impaired
+2021
+ECL Allowance
+AR not due and due
+-0.5%
+4,106
+-0.9%
+6
+AR overdue 1 to 30 days
+-1.0%
+611
+57
+-7
+AR overdue 30 to 90 days
+-1.8%
+514
+48
+-10
+-19
+Credit Risk Exposure from Trade Receivables and Contract Assets
+511
+-5
+-97
+98
+42
+-175
+-186
+Liquidity Risk Factors
+We are exposed to liquidity risk from our obligations towards suppliers, employees, and financial
+institutions.
+Liquidity Risk Management
+Our liquidity is managed by our global treasury department with the primary aim of maintaining
+liquidity at a level that is adequate to meet our financial obligations.
+924
+Generally, our primary source of liquidity is funds generated from our business operations. Our global
+treasury department manages liquidity centrally for all subsidiaries. Where possible, we pool their
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+cash surplus so that we can use liquidity centrally for our business operations, for subsidiaries' funding
+requirements, or to invest any net surplus in the market. With this strategy, we seek to optimize yields,
+while ensuring liquidity, by investing only with counterparties and issuers of high credit quality, as
+explained before. Hence, high levels of liquid assets and marketable securities provide a strategic
+reserve, helping keep SAP flexible, sound, and independent.
+Apart from effective working capital and cash management, we have reduced the liquidity risk
+inherent in managing our day-to-day operations and meeting our financing responsibilities by
+arranging an adequate volume of available credit facilities with various financial institutions on which
+we can draw if necessary.
+In order to retain high financial flexibility, in 2017, SAP SE entered into a €2.5 billion syndicated credit
+facility agreement with a term until 2024. The use of the facility is not restricted by any financial
+covenants. Borrowings under the facility bear interest of EURIBOR or LIBOR for the respective
+currency plus a margin of 17bps. We are also required to pay a commitment fee of 5.95bps per
+annum on the unused available credit. We have not drawn on the facility.
+-87
+-131
+-186
+2020
+-1.8%
+380
+61
+-8
+-16.8%
+695
+273
+-163
+-2.9%
+6,012
+71
+405
+244/338
+For 2021, 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
+€ millions
+Balance as at 1/1
+Net credit losses recognized
+Amounts written off
+Balance as at 12/31
+Liquidity Risk
+2021
+-186
+SAP Integrated Report 2021
+As at December 31, 2021, our exposure to credit risk from trade receivables was as follows:
+As at December 31, 2021, the major part of our other loans and other financial receivables was
+concentrated in Germany. There were no loans, or other financial 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.
+Cash, Time Deposits, and Debt Securities
+As at December 31, 2021, our exposure to credit risk from cash, time deposits, and debt securities
+I was as follows:
+Credit Risk Exposure from Cash, Time Deposits, and Debt Securities
+2021
+€ millions, unless otherwise stated
+Equivalent to External
+Weighted Average
+Rating
+Loss Rate
+Gross Carrying
+Amount Not Credit-
+Impaired
+Gross Carrying
+Amount Credit-
+Impaired
+ECL Allowance
+Risk class 1 - low risk
+Risk class 2 high risk
+Risk class 3 - unrated
+Total
+AAA to BBB-
+-0.0%
+6,864
+0
+-3
+Credit Risk Exposure
+The impact of default on our trade receivables from individual customers is mitigated by our large
+customer base and its distribution across many different industries, company sizes, and countries
+worldwide. For more information about our trade receivables, see Note (A.2).
+We apply the simplified impairment approach using a provision matrix for all trade receivables and
+contract assets to take into account any lifetime expected credit losses already at initial 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 origin. Loss rates
+used to reflect lifetime expected credit losses are determined using a roll-rate method based on the
+probability of a receivable progressing through different stages of being overdue and on our actual
+credit loss experience over the past years. These loss rates are enhanced by forward-looking
+information to reflect differences between economic conditions during the period over which the
+historical data has been collected, current conditions, and the expected changes in the economic
+conditions over the expected life of the receivables. Forward-looking information is based on changes
+in country risk ratings, or fluctuations in credit default swaps of countries of the customers we do
+business with. We continuously monitor outstanding receivables locally to assess whether there is
+objective evidence that our trade receivables and contract assets are credit-impaired. Evidence that
+trade receivables and contract assets are credit-impaired include, among the trade receivables being
+past due, information about significant financial difficulty of the customer or non-adherence to a
+payment plan. We consider receivables to be in default when the counterparty is 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 business alone does not necessarily indicate a customer default. We write off
+account balances either partially or in full if we judge that the likelihood of recovery is remote, which
+might be evidenced, for example, when bankruptcy proceedings for a customer are finalized or when
+all enforcement efforts have been exhausted.
+The default risk of our trade receivables is managed separately, mainly based on assessing the
+creditworthiness of customers through external ratings and on our past experience with the customers
+concerned. Based on this assessment, individual credit limits are established for each customer and
+deviations from such credit limits need to be approved by management.
+Stakeholders
+Combined Group
+Credit Risk
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Credit Risk Factors
+To reduce the credit risk in investments, we arrange to receive rights to collateral for certain investing
+activities in the full amount of the investment volume, which we would be allowed to make use of only
+in the case of default of the counterparty to the investment. In the absence of other significant
+agreements to reduce our credit risk exposure, the total amounts recognized as cash and cash
+equivalents, current investments, loans, and other financial receivables, trade receivables, and
+derivative financial assets represent our maximum exposure to credit risks, except for the agreements
+mentioned above.
+Credit Risk Management
+Cash at Banks, Time Deposits, and Debt Securities
+BB to D
+To mitigate the credit risk from our investing activities and derivative financial assets, we conduct all
+our activities only with approved major financial institutions and issuers that carry high external
+ratings, as required by our internal treasury guideline. Among its stipulations, the guideline requires
+that we invest only in assets from issuers with a minimum rating of at least “BBB flat." We only invest
+in issuers with a lower rating in exceptional cases. Such investments were not material in 2021 and
+2020. The weighted average rating of our financial assets is A. We pursue a policy of cautious
+investments characterized by predominantly current investments, standard investment instruments, as
+well as a wide portfolio diversification by doing business with a variety of counterparties.
+In addition, the concentration of credit risk that exists when counterparties are involved in similar
+activities by instrument, sector, or geographic area is further mitigated by diversification of
+counterparties throughout the world and adherence to an internal limit system for each counterparty.
+This internal limit system stipulates that the business volume with individual counterparties is
+restricted to a defined limit that depends on the lowest official long-term credit rating available by at
+least one of the major rating agencies, the Tier 1 capital of the respective financial institution, or
+participation in the German Depositors' Guarantee Fund or similar protection schemes. We
+continuously monitor strict compliance with these counterparty limits. As the premium for credit
+default swaps mainly depends on market participants' assessments of the creditworthiness of a
+debtor, we also closely observe the development of credit default swap spreads in the market to
+evaluate probable risk developments and react in a timely manner to changes should these manifest.
+For cash at banks, time deposits, and debt securities such as acquired bonds or commercial paper,
+we apply the general impairment approach. As it is our policy to only invest in high-quality assets of
+issuers with a minimum rating of at least investment grade 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 allowance is calculated based on our exposure as at the respective reporting
+date, the loss given default for this exposure, and the credit default swap spread as a measure for the
+probability of default. To ensure that during their lifetime our investments always fulfill the requirement
+of being investment-grade, we monitor changes in credit risk by tracking published external credit
+ratings. Among other things, we consider cash at banks, time deposits, and debt securities to be in
+default when the counterparty is unlikely to pay its obligations in full, when there is information about
+a counterparty's financial difficulties, or in case of a drastic increase in the credit default swap spread
+of a counterparty for a prolonged time period while the overall market environment remains rather
+stable. Such financial assets are written off either partially or in full if the likelihood of recovery is
+considered remote, which might be evidenced, for example, by the bankruptcy of a counterparty of
+such financial assets.
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Trade Receivables
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+To further reduce our credit risk, we require collateral for certain investments in the full amount of the
+investment volume, which we would be allowed to make use of in the case of default of the
+counterparty to the investment. As such collateral, we only accept bonds with at least investment-
+grade rating level.
+Trade Receivables and Contract Assets
+0.0%
+0
+0
+0
+Risk class 3 - unrated
+NA
+-11.3%
+23
+0
+-3
+Total
+-0.1%
+4,898
+0
+-6
+243/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+29
+0.0%
+BB to D
+-3
+0
+NA
+-10.3%
+29
+0
+-3
+-0.1%
+6,930
+0
+-6
+37
+2020
+Equivalent to External Weighted Average Loss
+Rating
+Rate
+Gross Carrying Amount Gross Carrying Amount
+Not Credit-Impaired
+Credit-Impaired
+ECL Allowance
+Risk class 1 - low risk
+Risk class 2 high risk
+AAA to BBB-
+-0.1%
+4,846
+0
+€ millions, unless otherwise stated
+3 For lease liabilities, included in the line item Other non-derivative financial liabilities, separate disclosure of fair value is not required.
+To Our
+Stakeholders
+Short-term employee benefits
+Management Report
+Heike Steck¹, 4, 5, 7, 8
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+258/338
+257/338
+Group General Counsel and Head of Group Legal & Compliance, Merck KGaA, Darmstadt, Germany
+Dr. Friederike Rotsch 2, 3, 6, 7, 8
+Vice President, Head of Women in Tech@SAP
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Vice President, User Experience
+Advisory Board, TSG 1899 Hoffenheim Fußball-Spielbetriebs GmbH, Sinsheim, Germany
+Managing Director of Oswald Consulting GmbH, Walldorf, Germany
+Gerhard Oswald 5,8
+Chairperson of the Board of Directors, Pine Field Holding Limited, Hong Kong, China
+Chairperson of the Board of Directors, Pine Field Ltd., Beijing, China
+Chairperson of the Board of Directors, Pine Field Holding Limited, Cayman Islands
+Board of Directors, Pinduoduo Inc., Shanghai, China
+CEO, MiraclePlus Ltd., Beijing, China
+Dr. Qi Lu4, 7, 8
+Board of Directors, Kili Technology SAS, Paris, France (from July 26, 2021)
+Board of Directors, Traefik Labs SAS, Lyon, France
+Board of Directors, Toucan Toco SAS, Paris, France
+Board of Directors, Citymapper Ltd., London, United Kingdom
+Christine Regitz 1, 2, 4, 5, 8
+Board of Directors, Tim Talent SAS, Paris, France
+Additional
+Senior Operations Manager
+8 Member of the Company's China Strategy Committee
+7 Member of the Company's People and Culture Committee
+6 Member of the Company's Nomination Committee
+5 Member of the Company's Finance and Investment Committee
+4 Member of the Company's Technology and Strategy Committee
+3 Member of the Company's Audit and Compliance Committee
+2 Member of the Company's Personnel and Governance Committee
+Appointed by the SAP SE Works Council (Europe)
+Ralf Zeiger (until October 28, 2021)
+Christa Vergien-Knopf (until August 9, 2021)
+Panagiotis Bissiritsas (until July 7, 2021)
+Pekka Ala-Pietilä (until May 12, 2021)
+Information
+Supervisory Board Members Who Left During 2021
+James Wright¹, 3, 4, 5
+Board of Directors, OWN LLC, West Hollywood, CA, United States
+Board of Directors, Motor Trend Group, LLC, El Segundo, CA, United States (until July 1, 2021)
+Chief Financial Officer, Discovery, Inc., New York, NY, United States
+Dr. Gunnar Wiedenfels³,5
+Advisory Board, Sharks Sports & Entertainment LLC, San José, CA, United States
+Member of the Executive Board of the Hasso Plattner Foundation, Potsdam, Germany, and Managing
+Director of the General Partner of HPC Germany GmbH & Co. KG, Potsdam, Germany
+5,6
+Dr. Rouven Westphal (from May 12, 2021)³, 5,
+On Early Retirement
+Helmut Stengele (from October 29, 2021)
+Member of the SAP SE Works Council and Member of the SAP SE Works Council (Europe)
+Chairperson of the SAP SE Works Council (Europe)
+Board of Directors, Peakon Aps, Copenhagen, Denmark (until March 9, 2021)
+Board of Directors, Virtuo Technologies, Paris, France
+Board of Directors, Qubit Digital Ltd., London, United Kingdom (until October 10, 2021)
+Board of Directors, Aircall.io, New York City, NY, United States
+Member of the SAP Germany SE & Co. KG Works Council
+Industry Advisor Expert
+Manuela Asche-Holstein (from July 8, 2021)
+Supervisory Board, Rhein-Neckar Loewen GmbH, Kronau, Germany
+Head of Global Sponsorships
+Deputy Chairperson (from January 1, 2022)
+Lars Lamadé1, 2, 4, 8
+Chairperson
+Prof. Dr. h.c. mult. Hasso Plattner 2, 4, 6, 8
+Memberships on supervisory boards and other comparable governing bodies of enterprises, other
+than subsidiaries of SAP, on December 31, 2021
+Supervisory Board
+Adaire Fox-Martin (until June 30, 2021, member of the Executive Board until January 31, 2021)
+Aicha Evans², 4, 6, 7
+Executive Board Members Who Left During 2021
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+SAP Integrated Report 2021
+SAP
+256/338
+255/338
+Global Marketing, Corporate Communications, Government Affairs
+Chief Marketing and Solutions Officer
+Julia White (from March 1, 2021)
+Global Responsibility for all SAP Business Software Applications, Cloud Operations and Support,
+Cross-Development Functions, SAP Enterprise Adoption Organization
+Information
+Chief Executive Officer and Member of the Board of Directors, Zoox, Inc., Foster City, CA, United
+States
+Board of Directors, Joby Aviation LLC, Santa Cruz, CA, United States
+Prof. Dr. Gesche Joost4, 7
+Board of Directors, Dashlane, Inc., New York, NY, United States
+Board of Directors, Vestiaire Collective SA, Levallois-Perret, France (until April 2, 2021)
+Board of Directors, nlyte Software Ltd., London, United Kingdom (until October 5, 2021)
+Managing Partner Balderton Capital, London, United Kingdom
+Bernard Liautaud², 4
+Member of the SAP Germany SE & Co. KG Works Council and Member of the SAP SE Works
+Council (Europe)
+Value Advisor Expert
+3,7
+Peter Lengler (from August 10, 2021)¹, ³,
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+Management Report
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+Member of the SAP SE Works Council (Europe)
+Chief Operations Expert
+Monika Kovachka-Dimitrova 1, 2, 4, 7
+Chairperson of the Spokespersons' Committee of Senior Managers of SAP SE
+Vice President, Head of SAP Alumni Relations
+Deputy Chairperson (until December 31, 2021)
+Margret Klein-Magar 1, 2, 3, 8
+Supervisory Board, ING-DiBa AG, Frankfurt, Germany
+Supervisory Board, Ottobock SE & Co. KGaA, Duderstadt, Germany
+Professor for Design Research and Head of the Design Research Lab, Berlin University of the Arts,
+Berlin, Germany
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+259/338
+The Supervisory Board members do not receive any share-based payment for their services. As far as
+members who are employee representatives on the Supervisory Board receive share-based payment,
+553
+606
+680
+3,218
+3,149
+3,176
+3,770
+3,755
+3,856
+2019
+260/338
+2020
+Thereof committee remuneration
+Thereof fixed compensation
+Total compensation
+€ thousands
+Supervisory Board Compensation
+The total annual compensation of the Supervisory Board members is as follows:
+215
+98
+108
+5,497
+3,520
+3,435
+2021
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Further, we have relationships to associated entities. In total, we sold products and services to these
+entities in the amount of €6 million (2020: €2 million), we bought products and services from such
+For information about the compensation of our Executive Board and Supervisory Board members, see
+Note (G.5).
+In total, we sold services to members of the Executive Board and the Supervisory Board in the
+amount of €0 million (2020: €0 million), and we received services from members of the Supervisory
+Board (including services from employee representatives on the Supervisory Board in their capacity
+as employees of SAP) in the amount of €2 million (2020: €2 million). Amounts owed, but not yet paid,
+to Supervisory Board members from these transactions were €0 million as at December 31, 2021
+(2020: €0 million). All of these balances are unsecured and interest-free and settlement is expected to
+occur in cash.
+In total, we sold products and services to companies controlled by members of the Supervisory Board
+in the amount of €2 million (2020: €3 million), we bought products and services from such companies
+in the amount of €4 million (2020: €2 million), and we provided sponsoring and other financial support
+to such companies in the amount of €3 million (2020: €4 million). Outstanding balances at year end
+from transactions with such companies were €0 million (2020: €0 million) for amounts owed to such
+companies and €0 million (2020: €0 million) for amounts owed by such companies. All of these
+balances are unsecured and interest-free and settlement is expected to occur in cash. Commitments
+(the longest of which is for 2 years) made by us to purchase further goods or services from these
+companies and to provide further sponsoring and other financial support amount to €6 million as at
+December 31, 2021 (2020: €10 million).
+Certain Supervisory Board members of SAP SE currently hold, or held within the last year, positions of
+significant responsibility with other entities. We have relationships with certain of these entities in the
+ordinary course of business, whereby we buy and sell products, assets, and services at prices
+believed to be consistent with those negotiated at arm's length between unrelated parties.
+Companies controlled by Hasso Plattner, Chairperson of the Supervisory Board of SAP SE and Chief
+Software Advisor of SAP, engaged in the following transactions with SAP: providing consulting services
+to SAP, receiving sport sponsoring from SAP, and making purchases of SAP products and services.
+Occasionally, members of the Executive Board of SAP SE obtain services from SAP for which they pay
+a consideration consistent with those negotiated at arm's length between unrelated parties.
+All amounts related to the abovementioned transactions were immaterial to SAP in all periods
+presented.
+Related Party Transactions Other Than Board
+Compensation
+(G.6)
+SAP did not grant any compensation advance or credit to, or enter into any commitment for the
+benefit of, any member of the Executive Board or Supervisory Board in 2021, 2020, or 2019.
+Detailed information about the different elements of the compensation is disclosed in the
+Compensation Report and in the Annual Report on Form 20-F, both of which are available on SAP's
+Web site.
+44,306
+44,043
+42,313
+DBO 12/31
+2,081
+3,010
+2,159
+Payments
+2019
+2020
+2021
+€ thousands
+Payments to/DBO for Former Executive Board Members
+such compensation is for their services as employees only and is unrelated to their status as
+members of the Supervisory Board.
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+2019
+SAP Product Engineering
+2020
+Annual pension entitlement
+32,393
+23,095
+25,095
+17,378
+5,094
+25,015
+2019
+2020
+2021
+Total
+Thereof defined-contribution
+Thereof defined-benefit
+50,110
+Post-employment benefits
+Share-based payment
+€ thousands
+Executive Board Compensation
+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 period.
+The total compensation of the Executive Board members for each of the years 2021, 2020, and 2019
+was as follows:
+The share-based payment amounts disclosed below in the table “Executive Board Compensation" are
+based on the grant date fair value of the share units in the respective year. In 2021 and 2020, share
+units were issued to the Executive Board members under the LTI 2020 and in 2019 under the
+LTI 2016 Plan.
+Accounting Policy
+(G.5) Executive and Supervisory Board Compensation
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Stakeholders
+Subtotal
+28,189
+49,771
+464
+DBO 12/31
+€ thousands
+Retirement Pension Plan for Executive Board Members
+The defined benefit obligation (DBO) for pensions to Executive Board members and the annual
+pension entitlement of the members of the Executive Board on reaching age 62 based on
+entitlements from performance-based and salary-linked plans were as follows:
+44,447
+11,173
+6,356
+344,047
+201,690
+238,428
+2019
+2020
+2021
+Total expense in € thousands
+Number of share units granted
+Share-Based Payment for Executive Board Members
+52,596
+28,677
+50,574
+769
+1
+3
+2,056
+487
+461
+2,825
+488
+2021
+Thomas Saueressig
+Board of Directors, 2121 Atelier, Inc., Brooklyn, NY, United States (from November 18, 2021)
+Board of Directors, Sweep SAS, Paris, France (from December 14, 2021)
+Customer Success
+SAP Integrated Report 2021
+252/338
+non-financial liabilities
+Other tax liabilities as % of 4 Other
+Other non-financial liabilities
+Other tax liabilities
+€ millions
+assets as % of 44 Other non-
+financial assets
+Prepaid expenses and other tax
+Other non-financial assets
+SAP
+Total
+To Our
+Other tax assets
+€ millions
+251/338
+Transfers out of Level 3 are due to initial public offerings of the respective investees. 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.
+376
+1,789
+Change in unrealized gains/losses in profit or loss for equity investments held at the
+end of the reporting period
+2,508
+4,881
+12/31
+-183
+256
+Included in exchange differences in other comprehensive income
+Prepaid expenses
+Combined Group
+Stakeholders
+Management Report
+807
+261
+52
+209
+272
+53
+219
+682
+187
+495
+830
+242
+588
+Total
+Non-Current
+Current
+Total
+Non-Current
+Current
+2020
+2021
+(G.1) Prepaid Expenses and Other Tax Assets
+This section provides additional disclosures on miscellaneous topics, including information pertaining
+to the Executive Board, the Supervisory Board, related party transactions, and other corporate
+governance topics.
+Section G - Other Disclosures
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+501
+295
+2,348
+-852
+Fixed-rate bonds (financial liabilities)
+Financial liabilities
+Determination of Fair Value/Valuation Technique
+Fair Value Hierarchy
+Туре
+Financial Instruments Not Measured at Fair Value
+ΝΑ
+ΝΑ
+Discounted cash flow. Expected future
+cash 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.
+Level 2
+Interest rate swaps
+Significant Unobservable
+Inputs
+Level 1
+Determination of Fair Value/Valuation
+Technique
+Туре
+Interrelationship Between
+Significant Unobservable Inputs
+and Fair Value Measurement
+Information
+Additional
+Sustainability
+Consolidated Financial Further Information on
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+Fair Value
+Hierarchy
+Quoted prices in an active market
+Discounted cash flows
+Fixed-rate private placements/ loans (financial
+liabilities)
+728
+1,076
+Global Field Organization including Sales, Services, Partner Ecosystem, and Customer Engagement
+-455
+0
+0
+1,896
+2,508
+2020
+2021
+Included in financial income, net
+Gains/losses
+Sales
+Purchases
+Out of Level 3
+Into Level 3
+Transfers
+1/1
+€ millions
+Reconciliation of Level 3 Fair Values
+The following table shows the reconciliation of fair values from the opening to the closing balances for
+our unlisted equity securities and call options on equity shares classified as Level 3 fair values:
+Level 3 Fair Value Disclosures
+Transfers of equity securities from Level 2 to Level 1, which occurred because disposal restrictions
+lapsed and deducting a discount for such restriction was no longer necessary, were €1,030 million in
+2021 (2020: €91 million), while transfers from Level 1 to Level 2 did not occur at all.
+Transfers Between Levels 1 and 2
+For other non-derivative financial assets/liabilities and variable rate financial debt, it is assumed that
+their carrying value reasonably approximates their fair values.
+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.
+Level 2
+-233
+1,102
+-201
+239
+Following comprehensive investigations, SAP entered into a non-prosecution agreement with the
+U.S. DOJ and mutual settlement agreements with the BIS and OFAC in April 2021. Among other
+things, the settlement agreements require SAP to conduct internal audits of its compliance with
+U.S. export control laws and regulations and produce audit reports for a period of three years. In
+addition, SAP paid non-material monetary penalties in May 2021.
+Furthermore, SAP voluntarily self-disclosed potential export control and economic sanctions violations
+to the U.S. DOJ and the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) in
+September 2017. At the same time, SAP provided notification to the U.S. SEC and responded to a
+U.S. SEC comment letter on export restriction matters in October 2017. SAP also provided disclosure
+to the U.S. Department of Commerce's Bureau of Industry and Security (BIS) based on the same
+alleged facts.
+For the reasons outlined above, it is impossible at this point in time to determine whether the potential
+anti-bribery law violations represent present obligations of SAP and, if so, to reliably estimate the
+amount of these obligations. We recognized no material provisions for these potential violations in our
+consolidated financial statements 2021. It is also not practicable to estimate the financial effect of any
+contingent liabilities that may result from these potential violations.
+The alleged conduct may result in monetary penalties or other sanctions under the FCPA and/or other
+anti-bribery laws. In addition, SAP's ability to conduct business in certain jurisdictions could be
+negatively impacted. The comprehensive and exhaustive investigations and the corresponding
+remediation activities are still ongoing. In South Africa, SAP is seeking resolution of pending civil
+claims relating to ongoing investigations. Considering the complexity of individual factors and the large
+number of open questions, it is not entirely possible at this point in time to assess the risk of a
+financial impact.
+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) of SAP is conducting investigations with
+the assistance of an external law firm and voluntarily advised the U.S. Securities and Exchange
+Commission (U.S. SEC) and the U.S. Department of Justice (U.S. DOJ), as well as local authorities
+where potential violations are being investigated. The investigations and dialogue between SAP and
+the local authorities and the U.S. SEC and U.S. DOJ are ongoing.
+Anti-Bribery and Export Control Matters
+For more information about our income tax-related litigation, see Note (C.5).
+€195 million (2020: €154 million). We have not recorded a provision for these matters, as we believe
+that we will prevail.
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+SAP
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+254/338
+253/338
+We are subject to ongoing audits by domestic and foreign tax authorities. In respect of non-income
+taxes, we are involved in various proceedings with only a few foreign tax authorities regarding
+assessments and litigation matters on intercompany royalty payments and intercompany services. The
+total potential amount in dispute related to these matters for all applicable years is approximately
+Tax-Related Litigation
+In June 2018, Teradata Corporation, Teradata US, Inc. and Teradata Operations, Inc. (collectively
+“Teradata”) filed a civil lawsuit against SAP SE, SAP America, Inc., and SAP Labs, LLC in U.S. federal
+court in California. Teradata alleged that SAP misappropriated trade secrets of Teradata, infringed
+Teradata's copyrights (this claim was subsequently withdrawn by Teradata), and violated U.S. antitrust
+laws. Teradata sought unspecified monetary damages and injunctive relief. In 2019, SAP asserted
+patent infringement counterclaims against Teradata seeking monetary damages and injunctive relief.
+In 2020, Teradata initiated a second civil lawsuit against SAP asserting patent infringement, seeking
+monetary damages and injunctive relief; in February 2021, SAP filed patent infringement
+counterclaims against Teradata in this second U.S. lawsuit as well as a civil lawsuit against Teradata in
+Germany asserting patent infringement, seeking monetary damages and injunctive relief. Currently, all
+claims between the parties have been dismissed. Teradata has appealed the dismissal of its trade
+secret and antitrust claims; this appeal is expected to be completed by late 2023.
+Individual cases of intellectual property-related litigation and claims include the following:
+Intellectual property-related litigation and claims are cases in which third parties have threatened or
+initiated litigation claiming that SAP violates one or more intellectual property rights that they possess.
+Such intellectual property rights may include patents, copyrights, and other similar rights.
+Contingent liabilities exist from intellectual property-related litigation and claims for which no provision
+has been recognized. Generally, it is not practicable to estimate the financial impact of these
+contingent liabilities due to the uncertainties around the litigation and claims, as outlined above. The
+total amounts claimed by plaintiffs in those intellectual property-related lawsuits or claims in which a
+claim has been quantified were not material to us as at December 31, 2021 and 2020. Based on our
+past experience, most of the intellectual property-related litigation and claims tend to be either
+dismissed in court or settled out of court for amounts significantly below the originally claimed
+amounts. We currently believe that resolving the intellectual property-related claims and lawsuits
+pending as at December 31, 2021, will neither individually nor in the aggregate have a material
+adverse effect on our business, financial position, profit, or cash flows.
+Intellectual Property-Related Litigation and Claims
+Among the claims and lawsuits disclosed in this Note are the following classes:
+Combined Group
+SAP Integrated Report 2021
+To Our
+Stakeholders
+704
+Scott Russell (from February 1, 2021)
+Supervisory Board, DFKI GmbH, Kaiserslautern, Germany
+Technology and Innovation Strategy, SAP HANA Database, SAP Business Technology Platform,
+Analytics, Cloud Infrastructure
+Technology & Innovation
+Chief Technology Officer
+Juergen Mueller
+Supervisory Board, HeidelbergCement AG, Heidelberg, Germany
+Global Finance and Administration including Investor Relations, Internal Audit, Data Protection &
+Privacy, Business Process Intelligence, Sustainability
+Chief Financial Officer
+Luka Mucic
+Supervisory Board, Schaeffler AG, Herzogenaurach, Germany
+HR Strategy, Business Transformation, Leadership Development, Talent Development
+Chief People & Operating Officer, Labor Relations Director
+Sabine Bendiek (from January 1, 2021)
+Supervisory Board, adidas AG, Herzogenaurach, Germany
+Corporate Development and Strategy, Security and Secrecy, Compliance
+Chief Executive Officer
+Christian Klein
+than subsidiaries of SAP, on December 31, 2021
+Memberships on supervisory boards and other comparable governing bodies of enterprises, other
+Executive Board
+(G.4) Board of Directors
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+We are subject to a variety of claims and lawsuits that arise from time to time in the ordinary course of
+our business, including proceedings and claims that relate to companies we have acquired. We will
+continue to vigorously defend against all claims and lawsuits against us. The provisions recorded for
+these claims and lawsuits as at December 31, 2021, are neither individually nor in the aggregate
+material to SAP.
+Further, the expected timing of any resulting outflows of economic benefits from these lawsuits and
+claims is typically uncertain and not estimable, as it depends generally on the duration of the legal
+proceedings and settlement negotiations required to resolve them.
+Combined Group
+Information
+646
+0
+646
+Total
+Non-Current
+Current
+Total
+Non-Current
+Current
+2020
+2021
+Prepaid expenses primarily consist of prepayments for hyperscalers, support services, and software
+royalties. Other tax assets primarily consist of value-added tax (VAT).
+632
+29
+53
+26
+11
+49
+3,247
+1,926
+1,321
+4,261
+2,628
+1,633
+claims are of a very individual nature and claims are either not quantified by the claimants or the
+claim amounts quantified are, based on historical evidence, not expected to be a 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 the cases.
+Therefore, it is typically not practicable to reliably estimate the financial effect that these lawsuits and
+claims would have if SAP were to incur expenditure for these cases.
+943
+12
+0
+(G.2) Other Tax Liabilities
+5,203
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+632
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+The outcome of litigation and claims is intrinsically subject to considerable uncertainty. Management's
+view of these matters may also change in the future. Actual outcomes of litigation and claims may
+differ from the assessments made by management in prior periods, which could result in a material
+impact on our business, financial position, profit, cash flows, or reputation. Most of the lawsuits and
+Uncertainty in Context of Legal Matters
+matters.
+This Note discloses information about intellectual property-related litigation and claims, tax-related
+litigation other than income tax-related litigation (see Note (C.5)), and anti-bribery and export control
+Other Litigation, Claims, and Legal Contingencies
+(G.3)
+The policies outlined in Note (A.4) for customer-related provisions, which include provisions for
+customer-related litigation cases and claims, equally apply to our other litigation, claims, and legal
+contingencies disclosed in this Note.
+Other tax liabilities primarily consist of VAT, payroll tax, sales tax, and withholding tax.
+860
+4,643
+770
+5,413
+12
+0
+6,063
+14
+0
+12
+11
+6,215,786
+100
+SAP America, Inc., Newtown Square, PA, United States
+1,697
+45,239
+60,404
+100
+100
+SAP (UK) Limited, Feltham, United Kingdom
+810
+1,092,657
+127,116
+264,263
+1,235,416
+-309,232
+Bitonic Technology Labs, Inc., Karnataka, India
+8,731
+20
+17
+28
+%
+Ownership
+Boldstart Ventures V, L.P., New York, NY, United States
+Boldstart Ventures VI, L.P., New York, NY, United States
+Brightfield Holdings, Inc., New York, NY, United States
+Blue Yard Crytpo 1, L.P., Hot Springs Village, AR, United States
+Blue Yard Capital | GmbH & Co. KG, Berlin, Germany
+Blue Yard Capital 1 Alternative GmbH & Co. KG, Berlin, Germany
+Amplify Partners Select Fund IV, L.P., Menlo Park, CA, United States
+BGS Holdings, Inc., Austin, TX, United States
+SAP (Schweiz) AG, Biel, Switzerland
+Amplify Partners, L.P., Menlo Park, CA, United States
+19,337,747
+16
+80,790
+-213,060
+€ thousands
+Amplify Partners IV, L.P., Menlo Park, CA, United States
+€ thousands
+Ariba Technologies India Private Limited, Bangalore, India
+100
+9,481
+34,185
+1,281
+Ariba, Inc., Palo Alto, CA, United States
+100
+1,318,872
+499,785
+5,276,448
+1,772
+6,147
+Concur Technologies, Inc., Bellevue, WA, United States
+1,621,912
+188,665
+7,878,818
+3,485
+Qualtrics, LLC, Wilmington, DE, United States
+100
+898,901
+-1,440,737
+8,228,091
+3,380
+SAP (China) Co., Ltd., Shanghai, China
+100
+1,106,711
+-1,577
+100
+Amplify Partners III, L.P., Menlo Park, CA, United States
+TRX Europe Limited, Feltham, United Kingdom
+All Tax Platform Solucoes Tributarias S.A., São Paulo, Brazil
+3 Figures for profit/loss after tax and total equity pursuant to HGB, section 285 and section 313 are not disclosed if they are of minor
+significance for a fair presentation of the profitability, liquidity, capital resources, and financial position of SAP SE, pursuant to HGB,
+section 313 (2) sentence 3 no. 4 and section 286 (3) sentence 1 no. 1.
+1 These figures are based on our local IFRS financial statements prior to eliminations resulting from consolidation and therefore do not
+reflect the contribution of these companies included in the Consolidated Financial Statements. The translation of the equity into Group
+currency is based on period-end closing exchange rates, and on average exchange rates for revenue and net income/loss.
+2 As at December 31, 2021, including managing directors, in FTE.
+100
+4
+100
+4
+100
+Volume Integration, Inc., Reston, VA, United States
+Usermind International, LTD, Bristol, United Kingdom
+Usermind, Inc., Seattle, WA, United States
+4
+100
+4
+100
+100
+4 Consolidated for the first time in 2021.
+10
+Usermind International, Inc., Seattle, WA, United States
+TRX, Inc., Bellevue, WA, United States
+Usermind d.o.o Beograd, Belgrade, Serbia
+TRX UK Limited, Feltham, United Kingdom
+100
+TRX Technologies India Private Limited, Bangalore, India
+100
+100
+100
+100
+TomorrowNow, Inc., Bryan, TX, United States
+TM Property Holdings, LLC, Wilmington, DE, United States
+Temkin Group, LLC, Wilmington, DE, United States
+€ thousands
+100
+100
+5 Agreements with the other shareholders provide that SAP SE fully controls the entity.
+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 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., Sapphire Ventures Fund IV, L.P., Sapphire Ventures Fund V, L.P., Sapphire Ventures Fund
+269/338
+Aleph-Bigg SPV, L.P., Grand Cayman, Cayman Islands
+Alchemist Accelerator Fund I LLC, San Francisco, CA, United States
+Alation, Inc., Redwood City, CA, United States
+Adverity GmbH, Vienna, Austria
+83North IV, L.P., Hertzalia, Israel
+Equity Investments with Ownership of at Least 5%
+Name and Location of Company
+China DataCom Corporation Limited, Guangzhou, China
+Procurement Negócios Eletrônicos S/A, Rio de Janeiro, Brazil
+SAP Fioneer GmbH, Walldorf, Germany
+Joint Arrangements and Investments in Associates
+Name and Location of Company
+Other Equity Investments
+17 Dissolved on January 7, 2022, by merger into SAP SE.
+15 Pursuant to Angola Tax Law and Presidential Decree no. 147/13 of October 1, 2013, the entity does not qualify as being a Large
+Taxpayer and therefore is exempt from having its financial statements audited in respect of its financial year ended December 31, 2021.
+16 Entity with support letter issued by SAP SE.
+14 Pursuant to section 211 (3) of the New Zealand Companies Act 1993 and section 45 (2) of the Financial Reporting Act 2013, the entity
+had approved exclusions and is not required to lodge audited financial statements in respect of its financial year ended
+September 30, 2021.
+13 Pursuant to article 727a, paragraph 2 of the Swiss Code of Obligations, the entity is exempt from having its financial statements audited
+in respect of its financial year ended December 31, 2021, or in respect of its financial year ended September 30, 2021, respectively.
+12 Pursuant to Irish Companies Act 2014, chapter 16 of Part 6, section 365, the entity is exempt from having its financial statements
+audited on the grounds that the entity is entitled to the benefits from a dormant entity exemption in respect of its financial year ended
+December 31, 2021.
+10 Pursuant to section 480 of the UK Companies Act 2006, the entity is exempt from having its financial statements audited on the grounds
+that the entity is entitled to the benefits from a dormant entity exemption in respect of its financial year ended December 31, 2021.
+11 Pursuant to article 2:403 of the Dutch Civil Code, the entity is exempt from applying certain legal requirements to their statutory stand-
+alone financial statements including the requirement to prepare the financial statements, the requirement of independent audit, and the
+requirement of public disclosure, on the basis that SAP SE has provided a guarantee of the entity's liabilities in respect of its financial year
+ended December 31, 2021, or in respect of its financial year ended September 30, 2021, respectively.
+270/338
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Amplify Partners II L.P., Menlo Park, CA, United States
+Management Report
+Additional
+Information
+VI, L.P., SAPV (Mauritius). The results of operations of these entities are included in SAP's consolidated financial statements in accordance
+with IFRS 10 (Consolidated Financial Statements).
+7 Entity whose personally liable partner is SAP SE.
+8 Entity with (profit and) loss transfer agreement.
+9 Pursuant to HGB, section 264 (3) or section 264b, the subsidiary is exempt from applying certain legal requirements to their statutory
+stand-alone financial statements including the requirement to prepare notes to the financial statements and a review of operations, the
+requirement of independent audit, and the requirement of public disclosure.
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+%
+162,335
+Number of
+Employees as at
+12/31/20212
+3
+8
+12
+3
+9
+12
+3
+7
+10
+2
+5
+7
+0
+1
+KPMG Firms
+2
+1
+1
+0
+0
+0
+0
+0
+0
+0
+0
+0
+0
+0
+0
+0
+0
+Total
+KPMG AG
+(Germany)
+16
+€ millions
+Audit fees
+Audit-related fees
+Tax fees
+All other fees
+Total
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Foreign
+Information
+For more information about the SAP Fioneer divestment (SAP Fioneer is an associated entity of SAP
+and thus treated as a related party), see Note (D.1) and Note (D.6).
+(G.7)
+Principal Accountant Fees and Services
+At the Annual General Meeting of Shareholders held on May 12, 2021, our shareholders elected
+KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) as SAP's independent auditor for 2021. KPMG has
+been the Company's principal auditor since the fiscal year 2002. Bodo Rackwitz has signed as auditor
+responsible for audit of the financial reporting and the group reporting of SAP SE since the fiscal year
+2018. KPMG and other firms in the global KPMG network charged the following fees to SAP for audit
+and other professional services related to 2021 and the previous years:
+2021
+2020
+2019
+KPMG AG
+Foreign
+Total
+(Germany) KPMG Firms
+KPMG AG
+(Germany)
+Foreign
+KPMG Firms
+Total
+companies in the amount of €37 million (2020: €0 million). Outstanding balances at year end from
+transactions with such companies were €15 million (2020: €0 million) for amounts owed to such
+companies and €4 million (2020: €0 million) for amounts owed by such companies. All of these
+balances are unsecured and interest-free, and settlement is expected to occur in cash.
+0
+0
+0
+Disposals
+12/31/2021
+The additions relate to legal entities added in connection with acquisitions and foundations. The
+disposals are mainly due to mergers, and liquidations of legal entities.
+Total
+264
+17
+-12
+269
+39
+-18
+290
+SAP Integrated Report 2021
+SAP
+To Our
+Additions
+Stakeholders
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Subsidiaries
+Major Subsidiaries
+100
+Owner-
+ship
+Total Revenue
+in 2021¹
+Profit/Loss
+(-) After Tax
+Total Equity
+for 2021¹
+as at
+12/31/20211
+Combined Group
+12/31/2020
+Disposals
+Additions
+0
+0
+6
+13
+19
+3
+10
+14
+3
+8
+10
+Audit fees are the aggregate fees charged by KPMG for auditing our consolidated financial statements
+and the statutory financial statements of SAP SE and its subsidiaries. Audit-related fees are fees
+charged by KPMG for assurance and related services that are reasonably related to the performance
+of the audit, for service organization attestation procedures, and fees charged by KPMG for services
+regarding the initial public offering of Qualtrics.
+(G.8)
+Events After the Reporting Period
+On January 27, 2022, SAP announced its intent to acquire a majority stake of Taulia, a leading
+provider of working capital management solutions. The acquisition is expected to further expand
+SAP's Business Network capabilities and strengthen SAP's solutions for the CFO office. The
+acquisition is expected to close in March 2022, following completion of customary closing conditions
+and regulatory approvals.
+Other than that, no events have occurred since December 31, 2021, that have a material impact on
+the Company's Consolidated Financial Statements.
+261/338
+12/31/2019
+Entities Consolidated in the Financial Statements
+Investments
+Scope of Consolidation, Subsidiaries and Other Equity
+(G.9)
+Additional
+Information
+Foot-
+note
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Stakeholders
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+262/338
+Management Report
+100
+Name and Location of Company
+70
+100
+Footnote
+Ownership
+Concur Holdings (Netherlands) B.V., 's-Hertogenbosch, the Netherlands
+Name and Location of Company
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+100
+13
+100
+100
+11
+Concur Technologies (Australia) Pty. Limited, Sydney, Australia
+100
+Concur Technologies (Hong Kong) Limited, Hong Kong, China
+Concur Technologies (India) Private Limited, Bangalore, India
+Concur Technologies (Singapore) Pte. Ltd., Singapore, Singapore
+Concur Technologies (UK) Limited, Feltham, United Kingdom
+ConTgo Consulting Limited, Feltham, United Kingdom
+100
+12
+100
+10
+100
+10
+100
+Emarsys İletişim Sistemleri Tic. Ltd Şti., Istanbul, Turkey
+Emarsys eMarketing Systems GmbH, Vienna, Austria
+Concur (Philippines) Inc., Makati City, Philippines
+Concur (Switzerland) GmbH, Zurich, Switzerland
+Concur Holdings (France) S.A.S., Levallois-Perret, France
+Emarsys Beijing Limited, Beijing, China
+Datahug Limited, Dublin, Ireland
+Crystal Decisions (UK) Limited, Feltham, United Kingdom
+ConTgo Limited, Feltham, United Kingdom
+100
+100
+16
+100
+100
+100
+Delighted, LLC, Wilmington, DE, United States
+100
+14
+Concur (New Zealand) Limited, Wellington, New Zealand
+Clarabridge, Inc., Reston, VA, United States
+4
+100
+Clarabridge UK Ltd, London, United Kingdom
+4
+100
+Clarabridge Netherlands B.V., Amsterdam, the Netherlands
+100
+Christie Partners Holding C.V., 's-Hertogenbosch, the Netherlands
+100
+CallidusCloud Pty. Ltd., Sydney, Australia
+100
+CallidusCloud Holdings Pty. Ltd., Sydney, Australia
+100
+CallidusCloud (Malaysia) Sdn. Bhd., Kuala Lumpur, Malaysia
+100
+CallidusCloud (India) Private Limited, Hyderabad, India
+100
+Callidus Software Pty. Ltd., Sydney, Australia
+100
+4
+C-Learning Pty. Ltd., Sydney, Australia
+100
+97
+16
+8,9
+100
+Concur (Germany) GmbH, Frankfurt am Main, Germany
+100
+Concur (France) S.A.S., Levallois-Perret, France
+100
+Concur (Czech) s.r.o., Prague, Czech Republic
+100
+100
+100
+CNQR Operations Mexico S. de. R.L. de. C.V., Mexico City, Mexico
+10
+100
+Clicktools Limited, Feltham, United Kingdom
+57
+ClearTrip Inc., George Town, Cayman Islands
+100
+ClearTrip Inc. (Mauritius), Ebene, Mauritius
+Concur (Canada), Inc., Toronto, Canada
+100
+100
+Emarsys Interactive Services GmbH, Berlin, Germany
+265/338
+100
+Loyalsys Technologies Israel Ltd., Tel Aviv, Israel
+100
+Loyalsys GmbH, Vienna, Austria
+16
+100
+100
+100
+100
+100
+100
+100
+LLC "SAP Ukraine", Kiev, Ukraine
+LLC "SAP Labs", Moscow, Russia
+LLC "Emarsys", Moscow, Russia
+Learning Seat Pty. Ltd., Sydney, Australia
+Learning Seat Holdings Pty. Ltd., Sydney, Australia
+Learning Seat Group Pty. Ltd., Sydney, Australia
+266/338
+SAP
+SAP Integrated Report 2021
+To Our
+QAL Technologies Pty Ltd, Sydney, Australia
+QCL Techonologies Ltd., Toronto, Canada
+QDL Technologies GmbH, Munich, Germany
+QFL Technologies S.A.R.L., Paris, France
+Q (AGF2) Inc., Wilmington, DE, United States
+PT SAP Indonesia, Jakarta, Indonesia
+Plat.One Lab S.r.l., Genoa, Italy
+Plat.One Inc., Newtown Square, PA, United States
+OutlookSoft Deutschland GmbH, Walldorf, Germany
+Outerjoin, Inc., San Ramon, CA, United States
+OrientDB Limited, Feltham, United Kingdom
+Nihon Ariba K.K., Tokyo, Japan
+Learning Seat Borrowings Pty. Ltd., Sydney, Australia
+New Debden Merger Sub II LLC, Wilmington, DE, United States
+Market Metrix Singapore Pte. Ltd., Singapore, Singapore
+Market Metrix Iberia S.L., Barcelona, Spain
+Name and Location of Company
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+Market Metrix, A Clarabridge Company, LLC, Wilmington, DE, United States
+10
+100
+Learning Heroes Ltd., Feltham, United Kingdom
+100
+Engagor, Inc., Wilmington, DE, United States
+Engagor N.V., Ghent, Belgium
+100
+EMARSYS-Technologies Informatikai Szolgáltató Kft., Budapest, Hungary
+100
+Emarsys UK Ltd, London, United Kingdom
+100
+Emarsys Schweiz GmbH, Zurich, Switzerland
+4
+100
+100
+Emarsys Pty Ltd, Sydney, Australia
+100
+Emarsys Pte. Ltd., Singapore, Singapore
+100
+Emarsys North America, Inc., Indianapolis, IN, United States
+100
+Emarsys Limited, Hong Kong, China
+100
+Emarsys S.A.S., Levallois-Perret, France
+10
+100
+ESS Cubed Procurement Proprietary Limited, Johannesburg, South Africa
+100
+Lead Formix, Inc., Dublin, CA, United States
+100
+IP Asset Holdings, LLC, Provo, UT, United States
+100
+Inxight Federal Systems Group, Inc., Wilmington, DE, United States
+8,9
+100
+hybris GmbH, Munich, Germany
+4
+100
+100
+Hipmunk, Inc., San Francisco, CA, United States
+100
+FreeMarkets Ltda., São Paulo, Brazil
+100
+Financial Fusion, Inc., San Ramon, CA, United States
+100
+Extended Systems, Inc., San Ramon, CA, United States
+100
+hybris (U.S.) Corporation, Wilmington, DE, United States
+100
+Callidus Software Ltd., Feltham, United Kingdom
+100
+100
+SAP Italia Sistemi Applicazioni Prodotti in Data Processing S.p.A.,
+Vimercate, Italy
+276
+1,122,929
+2,125
+359,149
+103,453
+105,770
+588,508
+100
+SAP Industries, Inc., Newtown Square, PA, United States
+633,680
+100
+SAP India Private Limited, Bangalore, India
+1,163
+23,817
+4,563
+133,643
+100
+SAP Hungary Rendszerek, Alkalmazások és Termékek az
+Adatfeldolgozásban Informatikai Kft., Budapest, Hungary
+615,004
+37,154
+265,312
+750
+100
+SAP Labs, LLC, Palo Alto, CA, United States
+9,882
+205,586
+60,855
+628,073
+100
+SAP Labs India Private Limited, Bangalore, India
+1,125
+1,506
+21,544
+78,971
+100
+SAP Labs Bulgaria EOOD, Sofia, Bulgaria
+1,318
+458,761
+138,785
+1,251,106
+100
+SAP Japan Co., Ltd., Tokyo, Japan
+3,321
+1,794,013
+198,617
+1,099,071
+467,512
+100
+1,205
+67,725
+44,741
+740,871
+100
+SAP Brasil Ltda, São Paulo, Brazil
+SAP Australia Pty Ltd, Sydney, Australia
+-22,415
+16
+-6,721
+7,457
+550,036
+100
+SAP Asia Pte. Ltd., Singapore, Singapore
+16
+1,132
+67,259
+3,129
+1,110
+575,665
+44,060
+SAP Canada Inc., Toronto, Canada
+100
+SAP France S.A., Levallois-Perret, France
+791
+341,508
+29,557
+510,602
+100
+SAP España - Sistemas, Aplicaciones y Productos en la Informática,
+S.A., Madrid, Spain
+7,9
+2,379 16
+4,463
+946,574
+4,921,867
+100
+SAP Deutschland SE & Co. KG, Walldorf, Germany
+3,012
+700,086
+139,927
+1,036,257
+100
+1,912,583
+QIL Technologies Limited, Dublin, Ireland
+159,933
+1,893
+Ariba Czech s.r.o., Prague, Czech Republic
+4
+100
+AppGyver Oy., Helsinky, Finland
+4
+100
+100
+AppGyver Inc., Indianapolis, IN, United States
+Apex Expert Solutions LLC, Chantilly, VA, United States
+16
+100
+100
+Ambin Properties Proprietary Limited, Johannesburg, South Africa
+Abakus Ukraine Limited Liability Company, Kiev, Ukraine
+100
+110405, Inc., Newtown Square, PA, United States
+100
+"SAP Kazakhstan" LLP, Almaty, Kazakhstan
+%
+100
+16
+Ariba India Private Limited, Gurugram, India
+100
+Callidus Software Inc., San Ramon, CA, United States
+100
+Business Objects Software Limited (Trading as SAP Solutions), Dublin, Ireland
+100
+Business Objects Option, LLC, Wilmington, DE, United States
+11
+100
+11
+100
+Footnote
+Ariba Technologies Netherlands B.V., 's-Hertogenbosch, the Netherlands
+Business Objects Holding B.V., 's-Hertogenbosch, the Netherlands
+Ariba Software Technology Services (Shanghai) Co., Ltd., Shanghai, China
+100
+Ariba Slovak Republic, s.r.o., Košice, Slovakia
+100
+Ariba International, Inc., Wilmington, DE, United States
+100
+Ariba International Singapore Pte. Ltd., Singapore, Singapore
+100
+Ariba International Holdings, Inc., Wilmington, DE, United States
+100
+Ownership
+Name and Location of Company
+Other Subsidiaries³
+=1
+610
+443,701
+208,699
+708,927
+100
+SAP Nederland B.V., 's-Hertogenbosch, the Netherlands
+636
+651,935
+11
+127,178
+100
+SAP National Security Services, Inc., Newtown Square, PA, United
+States
+16
+964
+111,265
+26,097
+415,025
+100
+SAP México S.A. de C.V., Mexico City, Mexico
+858,772
+608,787
+SAP Service and Support Centre (Ireland) Limited, Dublin, Ireland
+209,533
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+100
+264/338
+1,191
+15,285
+2,074
+83,428
+100
+SAP Services s.r.o., Prague, Czech Republic
+1,705
+50,793
+14,186
+263/338
+QPL Technologies sp. z o.o., Kraków, Poland
+Concur (Japan) Ltd., Tokyo, Japan
+Quadrem Africa Pty. Ltd., Johannesburg, South Africa
+100
+SAP Taiwan Co., Ltd., Taipei, Taiwan
+100
+SAP Systems, Applications and Products in Data Processing (Thailand) Ltd., Bangkok, Thailand
+100
+SAP System Application and Products Asia Myanmar Limited, Yangon, Myanmar
+100
+SAP Svenska Aktiebolag, Stockholm, Sweden
+5,16
+49
+SAP Software and Services LLC, Doha, Qatar
+100
+100
+8,9
+100
+8,9
+100
+16
+75
+SAP Technologies Inc., Palo Alto, CA, United States
+100
+SAP Training and Development Institute FZCO, Dubai, United Arab Emirates
+100
+100
+Sapphire Fund Investments II Holdings, LLC, Austin, TX, United States
+6
+0
+8,9
+100
+SAP Zweite Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany
+SAP.io Fund, L.P., Austin, TX, United States
+100
+SAP West Balkans d.o.o., Belgrade, Serbia
+100
+100
+100
+SAP Vierte Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany
+8,9
+100
+SAP Ventures Investment GmbH, Walldorf, Germany
+100
+SAP UAB, Vilnius, Lithuania
+100
+SAP Türkiye Yazilim Üretim ve Ticaret A.Ş., Istanbul, Turkey
+SAP Vietnam Company Limited, Ho Chi Minh City, Vietnam
+100
+100
+8,9,16
+SAP Polska Sp. z o.o., Warsaw, Poland
+SAP Philippines, Inc., Taguig City, Philippines
+SAP Perú S.A.C., Lima, Peru
+SAP Österreich GmbH, Vienna, Austria
+Name and Location of Company
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Ownership
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+268/338
+267/338
+16
+100
+100
+SAP North West Africa Ltd, Casablanca, Morocco
+Stakeholders
+6
+Footnote
+100
+100
+100
+SAP Saudi Arabia Software Services Ltd, Riyadh, Kingdom of Saudi Arabia
+SAP Saudi Arabia Software Trading Ltd, Riyadh, Kingdom of Saudi Arabia
+SAP Sechste Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany
+SAP Siebte Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany
+SAP sistemi, aplikacije in produkti za obdelavo podatkov d.o.o., Ljubljana, Slovenia
+SAP Slovensko s.r.o., Bratislava, Slovakia
+SAP Retail Solutions Beteiligungsgesellschaft GmbH, Walldorf, Germany
+SAP Romania SRL, Bucharest, Romania
+SAP Puerto Rico GmbH, Walldorf, Germany
+SAP Public Services, Inc., Washington, DC, United States
+100
+SAP Projektverwaltungs- und Beteiligungs GmbH, Walldorf, Germany
+100
+100
+SAP Portugal - Sistemas, Aplicações e Produtos Informáticos, Sociedade Unipessoal, Lda.,
+Porto Salvo, Portugal
+SAP Portals Israel Ltd., Ra'anana, Israel
+100
+SAP Portals Holding Beteiligungs GmbH, Walldorf, Germany
+100
+SAP Portals Europe GmbH, Walldorf, Germany
+100
+16
+100
+16
+100
+SAP Norge AS, Oslo, Norway
+Sapphire Fund Investments II, L.P., Austin, TX, United States
+Sapphire Fund Investments III, L.P., Austin, TX, United States
+Sapphire SAP HANA Fund of Funds, L.P., Austin, TX, United States
+Sapphire Ventures Fund I, L.P., Austin, TX, United States
+Sapphire Ventures Fund II, L.P., Austin, TX, United States
+Sapphire Ventures Fund III, L.P., Austin, TX, United States
+Sapphire Ventures Fund IV, L.P., Austin, TX, United States
+Sapphire Ventures Fund V L.P., Austin, TX, United States
+Sapphire Ventures Fund VI, L.P., Austin, TX, United States
+SAPV (Mauritius), Ebene, Mauritius
+6
+100
+4
+100
+4
+100
+Sybase Angola, LDA, Luanda, Angola
+SurveyVitals A Qualtrics Company, LLC, Wilmington, DE, United States
+SuccessFactors, Inc., Newtown Square, PA, United States
+SuccessFactors Cayman, Ltd., Grand Cayman, Cayman Islands
+Success Factors (Philippines), Inc., Pasig City, Philippines
+Statwing, LLC, Wilmington, DE, United States
+Signavio, Inc., Burlington, VT, United States
+Signavio UK Ltd, Birmingham, United Kingdom
+Signavio Sweden AB, Stockholm, Sweden
+Signavio Schweiz GmbH, Zug, Switzerland
+Signavio Pte. Ltd., Singapore, Singapore
+4
+QSL Technologies Pte. Ltd., Singapore, Singapore
+Signavio Japan KK, Tokyo, Japan
+4
+100
+4
+100
+100
+100
+Systems Applications Products (Africa Region) Proprietary Limited, Johannesburg, South Africa
+Systems Applications Products (Africa) Proprietary Limited, Johannesburg, South Africa
+Systems Applications Products (South Africa) Proprietary Limited, Johannesburg, South Africa
+Systems Applications Products Nigeria Limited, Victoria Island, Nigeria
+Technology Management Associates Inc., Chantilly, VA, United States
+100
+Sybase, Inc., San Ramon, CA, United States
+100
+Sybase International Holdings Corporation, LLC, San Ramon, CA, United States
+100
+Sybase Iberia, S.L., Madrid, Spain
+4
+15
+100
+4
+100
+100
+100
+16
+100
+100
+4
+45
+100
+Signavio Italia S.r.l., Milan, Italy
+4
+SAP Integrated Report 2021
+SAP
+6
+100
+4,6
+0
+6
+0
+6
+To Our
+0
+0
+6
+0
+6
+0
+6
+0
+6
+0
+6
+0
+Stakeholders
+Management Report
+100
+Signavio India Private Limited, Gurugram, India
+4, 17
+100
+Signavio GmbH, Berlin, Germany
+4
+100
+Signavio France S.A.S., Paris, France
+4
+Combined Group
+100
+100
+Footnote
+Ownership
+Signavio Benelux B.V., Amsterdam, the Netherlands
+Signavio ANZ Pty Ltd, Melbourne, Australia
+Name and Location of Company
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+4
+100
+100
+11
+4
+100
+4
+100
+Qualtrics Netherlands B.V., Amsterdam, the Netherlands
+Qualtrics Provo HQ, LLC, Wilmington, DE, United States
+Qualtrics Sweden AB, Stockholm, Sweden
+Qualtrics Switzerland AG, Zurich, Switzerland
+Qualtrics Technologies Brasil Ltda., São Paulo, Brazil
+Qualtrics Technologies Spain, S.L.U., Madrid, Spain
+QUL Technologies Limited, London, United Kingdom
+SAP (Beijing) Software System Co., Ltd., Beijing, China
+SAP (China) Holding Co., Ltd., Beijing, China
+4
+100
+Qualtrics Mexico, S. DE R.L. DE C.V., Mexico City, Mexico
+4
+100
+Qualtrics Korea, LLC, Seoul, South Korea
+100
+Qualtrics Japan LLC, Tokyo, Japan
+4
+100
+Qualtrics Ireland Limited, Dublin, Ireland
+74
+Qualtrics International Inc., Wilmington, DE, United States
+4
+100
+100
+4
+100
+SAP Belgium – Systems, Applications and Products S.A., Brussels, Belgium
+Name and Location of Company
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+100
+SAP Integrated Report 2021
+100
+16
+100
+SAP Andina y del Caribe C.A., Caracas, Venezuela
+SAP AZ LLC, Baku, Azerbaijan
+100
+100
+100
+100
+4
+SAP
+Qualtrics India Private Limited, Mumbai, India
+4
+100
+99
+100
+100
+8,9
+100
+100
+10
+100
+100
+100
+100
+100
+4
+100
+4
+100
+Footnote
+Ownership
+Quadrem Brazil Ltda., Rio de Janeiro, Brazil
+SAP New Zealand Limited, Auckland, New Zealand
+4
+SAP Beteiligungs GmbH, Walldorf, Germany
+100
+100
+Qualtrics Hong Kong Limited, Hong Kong, China
+100
+Qualtrics Holdings Inc., Wilmington, DE, United States
+100
+Quadrem Peru S.A.C., Lima, Peru
+100
+Quadrem Overseas Cooperatief U.A., 's-Hertogenbosch, the Netherlands
+11
+100
+100
+Quadrem Netherlands B.V., 's-Hertogenbosch, the Netherlands
+Quadrem International Ltd., Hamilton, Bermuda
+100
+Quadrem Chile Ltda., Santiago de Chile, Chile
+100
+100
+100
+100
+100
+100
+100
+Ownership
+100
+100
+SAP Ireland US - Financial Services Designated Activity Company, Dublin, Ireland
+12
+100
+SAP Ireland Limited, Dublin, Ireland
+100
+SAP Investments, Inc., Wilmington, DE, United States
+100
+100
+100
+8,9
+100
+16
+100
+100
+SAP India (Holding) Pte. Ltd., Singapore, Singapore
+SAP International Panama, S.A., Panama City, Panama
+SAP International, Inc., Miami, FL, United States
+SAP Hosting Beteiligungs GmbH, St. Leon-Rot, Germany
+SAP Hellas Single Member S.A., Athens, Greece
+SAP Hong Kong Co., Ltd., Hong Kong, China
+100
+SAP Global Marketing, Inc., New York, NY, United States
+100
+SAP Israel Ltd., Ra'anana, Israel
+100
+16
+100
+Footnote
+SAP Nederland Holding B.V., 's-Hertogenbosch, the Netherlands
+5, 16
+49
+SAP Middle East and North Africa L.L.C., Dubai, United Arab Emirates
+16
+100
+SAP MENA FZ L.L.C., Dubai, United Arab Emirates
+100
+100
+100
+100
+SAP Labs Korea, Inc., Seoul, South Korea
+100
+SAP Labs Israel Ltd., Ra'anana, Israel
+100
+SAP Labs France S.A.S., Mougins, France
+100
+SAP Korea Ltd., Seoul, South Korea
+SAP Malaysia Sdn. Bhd., Kuala Lumpur, Malaysia
+SAP France Holding S.A., Levallois-Perret, France
+SAP Latvia SIA, Riga, Latvia
+SAP Foreign Holdings GmbH, Walldorf, Germany
+100
+16
+100
+16
+100
+SAP d.o.o., Zagreb, Croatia
+SAP Cyprus Limited, Nicosia, Cyprus
+SAP ČR, spol. s r.o., Prague, Czech Republic
+SAP Costa Rica, S.A., San José, Costa Rica
+100
+SAP Colombia S.A.S., Bogotá, Colombia
+100
+SAP Chile Limitada, Santiago de Chile, Chile
+11
+100
+SAP Business Services Center Nederland B.V., 's-Hertogenbosch, the Netherlands
+100
+100
+100
+SAP Bulgaria EOOD, Sofia, Bulgaria
+100
+SAP Argentina S.A., Buenos Aires, Argentina
+SAP CIS, LLC, Moscow, Russia
+SAP Danmark A/S, Copenhagen, Denmark
+100
+16
+100
+SAP Financial, Inc., Toronto, Canada
+100
+8,9
+100
+SAP Erste Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany
+100
+SAP EMEA Inside Sales S.L., Madrid, Spain
+SAP Estonia OÜ, Tallinn, Estonia
+SAP Finland Oy, Espoo, Finland
+100
+SAP Egypt LLC, Cairo, Egypt
+100
+16
+100
+SAP East Africa Limited, Nairobi, Kenya
+100
+SAP Dritte Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany
+16
+Stakeholder Capitalism Metrics
+313
+GRI Content Index and UN Global Compact Communication on Progress
+304
+Non-Financial Notes: Environmental Performance
+302
+Waste and Water
+Non-Financial Notes: Social Performance
+300
+299
+Public Policy
+325
+296
+293
+Memberships, Partnerships, and Commitments
+Stakeholders
+327
+The social and environmental data and information included in the SAP Integrated Report has been
+prepared in accordance with the GRI Standards: Core option. This option indicates that a report
+contains the minimum information needed to understand the nature of the organization, its material
+topics and related impacts, and how these are managed.
+Information on Economic,
+Environmental, and Social
+Performance
+Sustainable Procurement
+About This Further
+Information
+Additional
+SASB Index
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+328
+Task Force on Climate-Related Financial Disclosure (TCFD)
+Management Report
+289
+276/338
+288
+275/338
+Based on the assessment under these criteria, SAP management has concluded that, as at
+December 31, 2021, the Company's internal control over financial reporting was effective.
+SAP's management assessed the effectiveness of the Company's internal control over financial
+reporting as at December 31, 2021. In making this assessment, it used the criteria set forth by the
+Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated
+Framework (2013).
+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
+U.S. Securities Exchange Act of 1934. SAP's internal control over financial reporting is a process
+designed under the supervision of SAP's CEO and CFO to provide reasonable assurance regarding
+the 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.
+U.S. law requires that management submit a report on the effectiveness of internal control over
+financial reporting in the consolidated financial statements. For 2021, that report is as follows:
+Financial Statements
+Consolidated
+on Internal Control over
+Financial Reporting in the
+Management's Annual Report
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+The Further Information on Economic, Environmental, and Social Performance includes information
+that is required to comply with the GRI Standards. In addition, we present our Connectivity model that
+shows the interrelations between social, environmental, and financial performance. We also report on
+our contribution towards the United Nations Sustainable Development Goals (SDGs) and respond to
+the recommendations of the Task Force on Climate-Related Financial Disclosure (TCFD).
+Starting in 2021, we map our reporting to two additional frameworks:
+Stakeholders
+SAP
+Our Contribution to the UN Sustainable Development Goals
+SAP Integrated Report 2021
+Combined Group
+Sustainability Management
+286
+Stakeholder Engagement
+282
+Materiality
+278
+Connectivity of Financial and Non-Financial Indicators
+277
+About This Further Information on Economic, Environmental,
+and Social Performance
+Further Information about
+Economic, Environmental,
+and Social Performance
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Stakeholders
+To Our
+-
+Using the connectivity model as outlined above, we have been able to embed non-financial KPIs into
+our software solutions. This integrated approach to financial and non-financial performance is
+reflected in the solutions developed for climate action, circular economy, social responsibility and
+holistic steering and reporting.
+The core "Stakeholder Capitalism Metrics" as proposed by the World Economic Forum's
+International Business Council (WEF IBC).
+SAP Integrated Report 2021
+SAP
+280/338
+279/338
+The VBA was founded by eight companies: BASF SE, Robert Bosch GmbH, Deutsche Bank AG,
+LafargeHolcim Ltd, Novartis International AG, Philip Morris International Inc, SAP SE, and SK Group.
+The organization is supported by the world's four largest accounting companies: Deloitte Touche
+Tohmatsu Limited, Ernst and Young Global Ltd, KPMG International Ltd, and PricewaterhouseCoopers
+International Limited. It is also supported by leading universities such as Harvard Business School,
+together with stakeholders from governments, civil societies, and standard-setting organizations. As at
+the end of 2021, the alliance consisted of 19 companies. By participating in the VBA's methodology
+Building on our many years of experience in connecting financial and non-financial measures, we
+cofounded the Value Balancing Alliance (VBA) in 2019. This alliance looks at ways in which
+businesses can better understand their societal and environmental impacts and formulate corporate
+strategies to address these areas.
+To Our
+Stakeholders
+In line with our purpose to help the world run better and improve people's lives, we have moved
+beyond financial measures to evaluate the consequences of our actions on society and the
+environment as well as the wider economy. As well as exploring cause-and-effect chains within SAP's
+own operations, we also measure positive and negative societal impacts across our complete value
+chain.
+Combined Group
+We will continue to share our approach and methodology with our customers to help them win in the
+marketplace. We believe that companies achieve higher profits – resulting from both greater cost
+efficiency as well as revenue growth - by addressing economic, social, and environmental
+considerations in a holistic and integrated manner. More importantly, these companies are better
+equipped to lead in the future, as they navigate the world's most pressing challenges and help bring
+about long-term sustainable change.
+By embedding this approach into our decision-making and quarterly business reviews, our
+sustainability performance steers our business alongside factors such as revenue and profit. Our goal
+is for all senior managers and experts at SAP to recognize - and be held accountable for – the fact
+that improving such measures as employee engagement also boosts financial performance.
+Embedding Non-Financial Performance Indicators into Our Solutions
+Our findings have helped us shift the conversation for managers, investors, employees, and other key
+stakeholders, and firmly establish non-financial indicators as playing a crucial role in our financial
+success. As a result, engaging employees or reducing our emissions is no longer seen as a nice-to-
+have, but rather as essential to carrying out a successful business strategy.
+Documenting the financial impact of non-financial indicators has helped us move closer to achieving
+our sustainability goals. Rather than simply stating the business case for social or environmental
+change, we also have the numbers to back it up.
+Promoting Sustainability Measures to Boost Financial
+Performance
+A New and Broader Focus
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Training: Money spent on offering training to employees positively impacts their employability,
+earnings, skills, and knowledge. However, it also results in “softer” impacts such as enhanced
+GHG: Our analysis enabled us to identify the GHG impact of each subsidiary and location, and we
+now have insights into which SAP locations have the highest CO2 footprints and which locations
+have the lowest. Negative impacts of GHG were monetized at €136 million and this has helped
+inform decision-making regarding our CO2-reduction strategy. It has also helped us quantify the
+investment required for offsetting emissions by funding alternative energy resources to achieve
+carbon neutrality in our operations by 2023.
+Analysis took place across multiple impact categories, and resulted, for example, in the following
+findings from the GHG and training categories:
+Wherever possible, we used primary data for the calculations. Where primary data was not available,
+we used proxies, modeling techniques, and assumptions that were well-defined and documented in
+the VBA method papers. Key stakeholders across all relevant lines of business were engaged in the
+pilot, which was sponsored by our CFO.
+Ending in November 2021, our second VBA pilot analyzed categories including GDP contribution,
+health and safety, training, consumptive water use, water pollution, greenhouse gas (GHG), air
+emissions, land use and biodiversity, and waste. We used data from our Integrated Report 2020, from
+our internal controlling and HR systems, and from our environmental management system. The
+analysis focused on our complete operations and our supply chain. An analysis of the "downstream"
+impacts resulting from customers' use of our software solutions and services will be piloted in the next
+phase.
+Piloting the Measurement of Non-Financial Impacts
+To help the European Union (EU) achieve its commitment to making Europe the first climate-neutral
+continent by 2050 as part of the European Green Deal, the VBA is acting as an advisor on EU
+regulatory activities. Furthermore, the VBA is working to help drive the establishment of a globally
+accepted system of standards for non-financial disclosure.
+We co-founded the VBA to support the development of a standardized methodology that helps
+companies, investors, and other stakeholders compare non-financial performance. These insights
+enable companies to create business value beyond revenue or profit growth while taking into
+consideration the long-term impacts of their business operations on the environment and society as a
+whole.
+Increasing regulatory pressure has also resulted in an urgent requirement for a reporting standard for
+environmental, social, and governance criteria. In response, organizations such as the Sustainability
+Accounting Standards Board (now part of the Value Reporting Foundation) and the Global Reporting
+Initiative are adapting and aligning their efforts to develop reporting systems that help investors make
+more sustainable decisions.
+Accounting systems often ignore the value of environmental and societal impacts, leading to
+misallocation of resources. However, as is increasingly recognized by institutions such as Harvard
+Business School, monetary evaluation of these impacts has the potential to change accounting
+systems and transform capital markets. The development of impact-weighted accounting metrics is a
+necessary precondition for this.
+Meeting the Challenges of Non-Financial Value Measurement
+Environmental degradation, rising societal inequalities, and the COVID-19 pandemic have highlighted
+the need for corporate accountability and value creation beyond financial markets. However, most
+corporations are failing to tackle climate change, biodiversity loss, and inequality, because - as one of
+multiple reasons - decisions are based on insufficient information.
+development and piloting phases, SAP is playing an active part in shaping the future of impact
+measurement and valuation.
+Information
+Additional
+Further Information on
+Sustainability
+Having illustrated this impact with concrete numbers, we are now turning our focus to a broader
+perspective of impact (for example, see Our Contribution to the UN Sustainable Development Goals
+and A New and Broader Focus). We still strongly believe in the fundamental conclusions of the
+analysis, but do not see a need to continuously update specific monetary values on the well-
+established connections. This is because the values have not been subject to any large fluctuations
+over the years. Instead, they have increased steadily, as expected.
+The Software & IT Services Sustainability Accounting Standards prepared by the Sustainability
+Accounting Standards Board (SASB), now part of the Value Reporting Foundation.
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+At SAP, we have put a monetary value on how selected non-financial indicators impact our operating
+profit. For example, how well we engage with our employees and inspire them to commit to our
+purpose and strategy, support a healthy business culture, and succeed in reducing our carbon
+emissions.
+Where We Come From: Putting a Value on Non-Financial
+Performance Indicators
+Connectivity of Financial and
+Non-Financial Indicators
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+BHCI
+Management Report
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+278/338
+277/338
+Stakeholders
+Employee
+Engagement
+Employee
+Retention
+Women in
+Management
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+From 2014 to 2018, SAP used techniques such as linear regression analysis to document the financial
+impact of four non-financial indicators: the Business Health Culture Index, the Employee Engagement
+Index, employee retention, and carbon emissions. In the past, we assessed each indicator to see what
+a change of one percentage point (pp) (or 1% for carbon emissions) would mean for our operating
+profit. The results for 2018, for example, showed that a 1pp change in the Business Health Culture
+Index affected our operating profit by €90 million to €100 million (non-IFRS).
+To achieve this, we created cause-and-effect chains that show how specific actions we take at SAP
+lead to shifts in behavior. This behavior impacts our business and has a financial consequence.
+By doing so, we established more than just a correlation between non-financial and financial
+indicators. The cause-and-effect chains also reveal why and how something such as employee
+engagement ultimately leads to gains or losses in business performance. We believe that such
+insights are a prerequisite for fully modeling the financial impact of non-financial performance.
+Magnitude of Financial Impact
+Figure 1: Connectivity Between Social, Environmental, and Economic Performance. SAP's main KPIs
+are marked in orange.
+Total Energy
+Consumed
+Carbon
+Emissions
+Capability
+Building
+Customer
+Loyalty
+Profitability
+Social
+Investment
+Growth
+Additional
+To Our
+SAP Integrated Report 2021
+SAP
+Local Globe VIII, L.P., St. Peter Port, Guernsey, Channel Islands
+Local Globe VII, L.P., St. Peter Port, Guernsey, Channel Islands
+Local Globe Opportunity Fund, L.P., St. Peter Port, Guernsey, Channel Islands
+LGVP F I LLC, Dover, DE, United States
+LeanData, Inc., Sunnyvale, CA, United States
+Kaltura, Inc., New York, NY, United States
+Additional
+Information
+JupiterOne, Inc., Morrisville, NC, United States
+Involve.ai, Inc., Santa Monica, CA, United States
+Integral Ad Science Holiding Corp., New York, NY, United States
+innoWerft Technologie- und Gründerzentrum Walldorf Stiftung GmbH, Walldorf, Germany
+Innovation Lab GmbH, Heidelberg, Germany
+Initialized CBH SPV LLC, Walnut, CA, United States
+InfluxData, Inc., San Francisco, CA, United States
+JFrog, Ltd., Netanya, Israel
+271/338
+272/338
+SAP Integrated Report 2021
+Medable Inc., Palo Alto, CA, United States
+Matillion Ltd., Altrincham, United Kingdom
+Mango Capital 2020, L.P., Los Altos, CA, United States
+Mango Capital 2018, L.P., Los Altos, CA, United States
+Local Globe XI, L.P., St. Peter Port, Guernsey, Channel Islands
+Local Globe X, L.P., St. Peter Port, Guernsey, Channel Islands
+Name and Location of Company
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+IEX Group, Inc., New York, NY, United States
+Mosaic Partners II, L.P., London, United Kingdom
+IDG Ventures USA III, L.P., San Francisco, CA, United States
+Greater Pacific Capital (Cayman) L.P., Grand Cayman, Cayman Islands
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Name and Location of Company
+BY Capital 2 GmbH & Co. KG, Berlin, Germany
+Stakeholders
+Canvas Ventures 3, L.P., Portola Valley, CA, United States
+CDQ AG, St. Gallen, Switzerland
+Chalfen Ventures Fund IL.P., St Heiler, Jersey, Channel Islands
+Chalfen Ventures Fund II L.P., St Helier, Jersey, Channel Islands
+CircleCI, Inc., San Francisco, CA, United States
+Clari, Inc., Sunnyvale, CA, United States
+ComponentLab Inc., Seattle, WA, United States
+Catchpoint Systems, Inc., New York, NY, United States
+To Our
+SAP Integrated Report 2021
+SAP
+GitGuardian SAS, Paris, France
+Follow Analytics, Inc., San Francisco, CA, United States
+Finco Services, Inc. (dba Current), New York, NY, United States
+Felix Ventures II, L.P., London, United Kingdom
+Felix Capital Fund III, London, United Kingdom
+FeedZai S.A., Lisbon, Portugal
+Dremio Corporation, Santa Clara, CA, United States
+Digital Hub Rhein-Neckar GmbH, Ludwigshafen, Germany
+Data Collective IV, L.P., Palo Alto, CA, United States
+DataRobot, Inc., Boston, MA, United States
+Data Collective III L.P., Palo Alto, CA, United States
+Data Collective II L.P., Palo Alto, CA, United States
+Culture Amp, Inc., San Francisco, CA, United States
+Costanoa Venture Capital III L.P., Palo Alto, CA, United States
+Costanoa Venture Capital QZ, LLC, Palo Alto, CA, United States
+Creandum SPV TR (D) AB, Stockholm, Sweden
+Costanoa Venture Capital II L.P., Palo Alto, CA, United States
+Contentful GmbH, Berlin, Germany
+Haystack Ventures V, L.P., Mill Valley, CA, United States
+SAP Integrated Report 2021
+Notation Capital II CIRC, LLC, Brooklyn, NY, United States
+Notation Capital III, L.P., Brooklyn, NY, United States
+274/338
+273/338
+www.sap.com/investors/en/governance.
+In 2021 and 2020, the Executive Board and Supervisory Board of SAP SE issued the required
+declarations of implementation. The declaration for 2021 was issued at the end of October 2021.
+These statements are available on our Web site:
+The German federal government published the German Corporate Governance Code (the "Code") in
+February 2002 and introduced a commission that amends the Code from time to time. The Code
+contains statutory requirements and a number of recommendations and suggestions. Only the legal
+requirements are binding for German companies. With regard to the recommendations, the German
+Stock Corporation Act, section 161, requires that every year, listed companies publicly state the extent
+to which they have implemented them. Companies can deviate from the suggestions without having
+to make any public statements.
+(G.10) German Code of Corporate Governance
+SAP
+Zesty Tech Ltd., Ramat Gan, Israel
+Walkabout Ventures Fund II L.P., Los Angeles, CA, United States
+Vistex, Inc., Hoffman Estates, IL, United States
+VerbIT, Inc., New York, NY, United States
+Uptycs, Inc., Waltham, MA, United States
+Upfront V, L.P., Santa Monica, CA, United States
+Unmind Ltd., London, United Kingdom
+Yapily Ltd., London, United Kingdom
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Thomas Saueressig
+Juergen Mueller
+Julia White
+Scott Russell
+Luka Mucic
+Sabine Bendiek
+Christian Klein
+The Executive Board
+Walldorf, Baden
+SAP SE
+Walldorf, February 23, 2022
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+Management Report
+UJET, Inc., San Francisco, CA, United States
+Notation Capital II, L.P., Brooklyn, NY, United States
+Tribe Capital LLC Series 3, Redwood City, CA, United States
+Additional
+Information
+Smart City Planning, Inc., Tokyo, Japan
+Side, Inc., San Francisco, CA, United States
+SafeGraph, Inc., Denver, CO, United States
+Ridge Ventures IV, L.P., San Francisco, CA, United States
+Ridge Software Investments I, LLC, San Francisco, CA, United States
+Restream, Inc., Austin, TX, United States
+Splashtop, Inc., San Jose, CA, United States
+Reltio, Inc., Redwood Shores, CA, United States
+Pivot North 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
+Point Nine Capital Fund V GmbH & Co. KG, Berlin, Germany
+Project 44, Inc., Chicago, IL, United States
+Pendo.io, Inc., Raleigh, NC, United States
+OpsRamp, Inc., San Jose, CA, United States.
+OpenX Software Limited, Pasadena, CA, United States
+NOTATION I SPV SV OCT 2020, LLC, Brooklyn, NY, United States
+Notation Capital, L.P., Brooklyn, NY, United States
+PubNub, Inc., San Francisco, CA, United States
+SportsTech Fund, L.P., Palo Alto, CA, United States
+SportsTech Parallel Fund, L.P., Palo Alto, CA, United States
+Spring Mobile Solutions, Inc., Salt Lake City, UT, United States
+Sustainability
+Further Information on
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP
+Third Kind Venture Capital II, L.P., New York, NY, United States
+Third Kind Venture Capital III, L.P., New York, NY, United States
+Tribe Capital LLC Series 3, Redwood City, CA, United States
+The SaaStr Fund II, L.P., Palo Alto, CA, United States
+The SaaStr Fund, L.P., Palo Alto, CA, United States
+SV Angel IV, L.P., San Francisco, CA, United States
+Tetrate.io, Inc., Milpitas, CA, United States
+Sun Basket, Inc., San Francisco, CA, United States
+SumoLogic, Inc., Redwood City, CA, United States
+Storm Ventures V, L.P., Menlo Park, CA, United States
+StackHawk, Inc., Denver, CO, United States
+Name and Location of Company
+SAP
+SAP
+282/338
+6*
+Well-being, health, and safety
+7*
+Climate change and air quality
+8**
+Governance
+Active integration, equal opportunity, as well as fair
+treatment and remuneration of all employees
+Labor rights, including unionization, as well as
+compensation and benefits offered to employees by their
+employer
+Employee matters
+Employee matters
+Respect for human
+rights
+Employee matters
+Fundamental rights of all individuals to live in dignity
+Social, economic, psychological, and physical conditions
+of employees in their workplace, as well as employees'
+occupational health and safety
+(Non-)greenhouse gas emissions from operations and
+products, as well as present or potential disruptive
+impacts of climate change
+Human rights
+5*
+Fair and inclusive workplace
+4*
+Further Information on
+Sustainability
+Additional
+Information
+Sustainability challenges* and management practices** included in our materiality assessment are as
+follows:
+Index Topics
+1*
+Security, privacy, and data
+protection
+Procedures and rules concerning a company's control
+and decision-making system, as well as relationship
+management with investors and stakeholders
+2*
+Definitions
+Related Non-
+Financial Matters
+Protection of private, confidential, or sensitive information
+and data, as well as the vulnerability of critical
+information systems
+Responsible business conduct, including anti-corruption,
+anti-bribery, fair competition, respect for intellectual
+property, and responsible tax principles
+Anti-corruption and
+bribery matters
+3*
+Employee rights
+Ethics and compliance
+Consolidated Financial
+Statements IFRS
+Environmental
+9*
+Water
+16*
+Geopolitical events
+17**
+Responsible supply chain
+18**
+Local community support
+19**
+Solutions for an inclusive and
+circular economy
+20*
+Product responsibility
+21*
+Biodiversity
+Transparency through non-financial reporting on public
+policy practices and executive compensation
+(Non-)hazardous waste as well as resource usage,
+reduction, reuse, or recycling
+Use, management, conservation, reduction, and
+contamination of water
+15*
+Resource efficiency and waste
+14*
+Transparency
+Talent and development
+Talent attraction, retention, and development
+10*
+Energy
+11*
+Customer responsibility
+Energy consumption by operations and products, and the
+transition to renewable energy
+matters
+Responsibility to help ensure customer satisfaction and
+customer rights, including responsible marketing and
+selling practices
+Environmental
+matters
+Customer matters
+12*
+Employee engagement
+Corporate culture, employee engagement and
+motivation, and strategic decisions involving workforce
+changes
+Employee matters
+13**
+Employee matters
+Political conditions, demographic changes, and
+catastrophic or other events with an influence on
+business
+Management Report
+To Our
+Stakeholders
+Validation
+In 2020, the results of the materiality analysis were reviewed and confirmed by our steering committee
+for integrated reporting, our sustainability council, and our sustainability advisory panel. Our chief
+financial officer, who is also our Board sponsor for sustainability and integrated reporting, was also
+informed about the results. In 2021, our materiality assessment was reviewed, updated, and
+confirmed by our Integrated Report Steering Committee.
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+The changes in 2021 compared to 2020 include:
+To achieve greater consistency with definitions in reporting standards, we deleted the topics
+"Business resilience" and "Innovation and digitalization" from the matrix. “Business resilience" is
+redundant to the y-axis of our matrix; “Innovation and digitalization” is at the heart of our business
+model and described as such.
+We have extended the thresholds for defining topics as material, to better align our reporting with
+our strategic priorities.
+We have applied the definition of materiality according to the GRI Standards more strictly. We now
+identify material topics by considering their importance for stakeholders or SAP's impact on the
+topic. Previously, we combined both dimensions.
+Review
+Finally, based on survey responses gathered from SAP sustainability experts, we considered the
+potential impacts on society, the environment, and the economy, ranking topics as either low,
+medium, or high. We have estimated our impact on today's society, environment, and economy and
+we expect the impact level to change as we continue to design solutions to manage areas such as
+climate change.
+Next, we evaluated the financial, operational, and strategic relevance of each topic to SAP's business
+success and resilience, drawing on an analysis by SAP sustainability experts from various units and
+regions.
+We ranked topics by their importance to stakeholders by analyzing six external sources. These
+sources included corporate peer reports; mandatory and voluntary regulations for the software sector;
+online news related to the technology equipment and services industry; tweets; and questionnaires
+gathering non-financial information from socially responsible investors and clients.
+Prioritization
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Feedback on and analysis of our integrated report will be taken into account during future materiality
+assessments.
+Information
+Defining Key Priorities for Our Non-Financial Reporting
+To select the topics to be included in our integrated reporting, we conducted a comprehensive
+materiality assessment in 2020 using an artificial intelligence (AI) and Big Data solution from
+Datamaran Limited that helped us build an evidence-based materiality matrix. We assessed
+economic, social, and environmental topics according to three criteria:
+1) Importance of topic for stakeholders (Y-axis)
+2) Relevance to SAP's business success (X-axis: Impact of topic on SAP)
+3) Magnitude of SAP's impact on the topic (differently colored circles)
+Below, we have detailed the key stages of the process.
+Identification
+We compiled a list of approximately 100 potentially relevant topics based on guidance from standards
+of the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), as
+well as our existing materiality topics. We also considered a materiality assessment for the information
+and communications technology industry by the Global Enabling Sustainability Initiative (GeSI) as well
+as the United Nations' Sustainable Development Goals (SDGs). When identifying key topics and their
+boundaries, we looked at areas related to our operations and supply chain as well as at topics related
+to our solutions. Since we oriented ourselves on the topics provided in the Datamaran matrix, the
+selected topics are more detailed than in our last materiality assessment.
+Materiality
+Combined Group
+Results
+Importance of topic for stakeholders
+19
+16
+20
+< Low
+Impact of topic on SAP
+High >
+SAP's impact on topic:
+Low
+Medium
+High
+Materiality Matrix for Prioritizing Our Reporting Topics (numbers in the matrix are explained in the
+table below)
+283/338
+284/338
+SAP
+SAP Integrated Report 2021
+18
+17
+12
+11
+High >
+< Low
+2
+21
+15
+14
+3
+Our materiality matrix for prioritizing our reporting topics is shown in the following graphic. We have
+categorized topics according to whether they are sustainability challenges or sustainability
+management practices. The former affect SAP and are also impacted by us, whereas the latter offer
+guidance on how to deal with these challenges.
+7
+10
+6
+8
+1
+2
+9
+13
+5
+Procurement practices to help ensure respect of the
+environment and human rights throughout the entire
+supply chain
+Programs and projects to help ensure the well-being and
+positive development of communities with which a
+company interacts, including employee volunteering
+Products and services that create positive environmental
+and social impact during their whole lifecycle
+Non-Profit Organizations (NPOs) and Academia
+Our dialog with NPOs and academic institutions helps us understand how we can address today's
+most pressing issues with our solutions and what is expected from us as a corporation. For example,
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+SAP University Alliances introduces students and faculty to SAP software by providing networking and
+educational activities and partnering to build technology skills. For more information about how we
+engage with NPOs, see the Employees and Social Investments and Our Contribution to the UN SDGS
+sections.
+Sustainability Advisory Panel
+Our sustainability advisory panel consists of expert representatives from our customers, investors,
+partners, NPOs, and academia. In 2021, the panel discussed key initiatives related to corporate social
+responsibility, environmental performance, and our sustainability management solutions.
+Al Ethics Advisory Panel
+Our Al ethics advisory panel consists of academic, policy, and industry experts who advise us on the
+development and operationalization of the guiding principles for artificial intelligence. In 2021, the
+panel discussed, for example, the importance of harmonizing Al ethics with SAP's overall human
+rights agenda and operationalizing these topics.
+287/338
+With more than 22,500 partners around the world, the SAP ecosystem is vital to our success. We take
+a multifaceted approach to engagement that begins with the dedicated, interactive SAP Partner
+Portal. Partners receive regular communications including customized newsletters, training offers, and
+Web seminars, with the latest announcements and thought leadership relevant to their specific
+partnership type. Additionally, virtual events are held throughout the year, around the globe, to further
+gauge partners' feedback on how SAP can continuously improve. For more information about our
+ecosystem, see the section Products, Research & Development, and Services.
+Partners
+Our Analyst Relations team, the Executive Board, and executives have strong relations with IT analysts
+and engage with them on strategic SAP solutions and services on a frequent basis.
+Industry Analysts
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Stakeholder Engagement
+For SAP, stakeholder engagement and collaboration are deeply embedded into our process of
+innovation and the development of our products and services. Before we can design a new solution,
+we must first understand the issue we are addressing. This is why we regularly liaise with the
+stakeholder groups described below, including our sustainability and Al ethics advisory panels.
+Customers
+288/338
+For more information about our customer engagement programs, see the Customers section.
+We survey our employees regularly throughout the year. For the results of our latest employee survey
+and action items resulting from it, see the Employees and Social Investments section.
+We strive for constructive labor relations across the world, working within each country's requirements.
+We currently have social partners in 37 countries in Europe, Asia, and the Americas. These employee
+representative bodies consist of elected union members and/or non-union members, and are
+consulted by SAP management mainly on topics that define the work environment and work
+processes. Collective bargaining agreements with unions are only made in countries where legally
+required. Overall, about 49% of our employees are represented by works councils or an independent
+trade union, or are covered by collective bargaining agreements.
+In addition, the Executive Board answers employees' questions in quarterly all-hands meetings. In
+regular coffee corner sessions, senior executives explain our strategy to employees and answer their
+questions directly.
+Financial Analysts and Investors
+For more information about our dialog with the financial community (that is, financial analysts,
+institutional investors, and retail shareholders), see the Investor Relations section.
+Governments
+For more information about our dialog with governments, see the Public Policy section.
+Employees
+Stakeholders
+SAP
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Our Contribution to the UN
+Sustainable Development
+Goals
+The 17 United Nations Sustainable Development Goals (SDGs) provide a globally accepted
+framework anchored in human rights, which we use for communicating our purpose to "help the world
+run better and improve people's lives." We strive to execute on this purpose by being a role model for
+sustainable, purpose-led operations and by enabling our customers to operate in a sustainable way.
+Following the adoption of the SDGs by world leaders in September 2015, we identified and aligned
+existing initiatives with all 17 SDGs. For example, we looked at the environmental and social impacts
+of customers using SAP technology and applications, linking these impacts to the SDGs. The resulting
+Web book (www.sap.com/unglobalgoals) was published in early 2016 and has been updated
+regularly.
+In discussions with our Sustainability Council and external sustainability advisory panel, we defined
+the SDGs for which there is a tangible and material link between our own operational activities or the
+use of our software by customers.
+The following table describes the potential positive (+) and negative (-) direct or indirect impacts of
+our company and of our products and services related to the selected SDGs. We use "direct" when we
+refer to impacts through our own operations; "indirect" describes impacts through the use of our
+solutions and technology or in our ecosystem.
+QAudit Scope
+The content of this section was not subject to the independent limited assurance engagement of our
+external auditor.
+Our Potential Direct and
+Indirect Impact
+SDG 3 Good Health and Well-Being
+Direct:
+To Our
+SAP Integrated Report 2021
+SAP
+We measure the success of our initiatives through our employee engagement surveys. The latest
+results from 2021 showed that 79% of our employees stated “I actively contribute to SAP's
+sustainability goals.” This is down from 87% in 2019 but up from 47% in 2009 when we introduced the
+question.
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Sustainability Management
+SAP Integrated Report 2021
+Putting Sustainability at the Heart of Our Strategy
+We aim to create positive economic, environmental, and social impact within the planetary
+boundaries using two key levers:
+1) Providing products and services that meet the sustainability challenges and opportunities of our
+customers (enabler)
+2) Leading by example in our own sustainable business operations and practices (exemplar)
+Our chief sustainability officer (CSO) reports directly to the chief financial officer (CFO), who is the
+sponsor for sustainability on the Executive Board. The CSO chairs the Sustainability Council which
+consists of dedicated senior executives in charge of sustainability in each Board area. Together with
+the CSO's team, the Council is accountable for driving SAP's holistic, cross-company sustainability
+agenda and setting annual objectives and priorities.
+In addition to the Sustainability Council, we have governance and project structures in place to
+address specific topics such as solution development, environmental management, and human rights.
+Changing Our Behavior and Culture
+Employee engagement is essential for driving change throughout SAP. We set up a number of
+programs to help employees understand how sustainability is engrained in our purpose and strategy,
+and how they can contribute. For example, SAP continues to include sustainability in its onboarding
+training for new hires and various line-of-business-specific learning offerings. Furthermore, employees
+can take open SAP online courses on sustainability, which are also available to the general public for
+free. Due to the COVID-19 pandemic, onsite offerings have been on hold, but in many cases have
+shifted to new virtual alternatives.
+To help drive progress in our sustainability initiatives, we need the support of employees in every part
+of SAP. We have a global internal network of more than 300 sustainability champions who represent
+different regions and areas of the business at SAP. Not only do they act as role models and
+multipliers, these champions also tailor sustainability engagement activities to local and lines-of-
+business needs and interests and share best practices.
+With SAP's purpose to help the world run better and improve people's lives, sustainability is firmly
+anchored in our business strategy, governance, and executive compensation system. For more
+information about our renewed corporate strategy, see the Strategy section.
+Combined Group
+To Our
+SAP Integrated Report 2021
+1*
+Security, privacy, and data protection
+2*
+Ethics and compliance
+3*
+Employee rights
+4*
+Fair and inclusive workplace
+5*
+Human rights
+6*
+Well-being, health, and safety
+7*
+Climate change and air quality
+8**
+Index Topic
+According to the GRI Standards, the following topics are material:
+In our reporting, we seek to meet the materiality requirements of both the GRI Standards and
+section 289c (3) of the German Commercial Code (Handelsgesetzbuch, HGB). Because of the
+diverging definitions of materiality, we see the following difference in material topics:
+Sustainability management practices offer guidance on how to deal with these challenges.
+Product and service quality, as well as the information
+shared with customers so that they can make informed
+decisions
+Variety of flora and fauna on earth, and the foundation
+for ecosystem services that are essential for nature and
+human well-being
+Environmental
+matters
+Environmental
+matters
+Customer matters
+Environmental
+Governance
+matters
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on Additional
+Statements IFRS
+Sustainability
+Information
+* Sustainability challenges affect SAP and are also impacted by us.
+**
+SAP
+9*
+Talent and development
+10*
+Ethics and compliance
+4*
+Fair and inclusive workplace
+7*
+Climate change and air quality
+8**
+Governance
+2*
+9*
+11*
+Customer responsibility
+12*
+Employee engagement
+285/338
+286/338
+SAP
+Talent and development
+SAP Integrated Report 2021
+Security, privacy, and data protection
+Index Topic
+Energy
+11*
+Customer responsibility
+12*
+Employee engagement
+13**
+Transparency
+1*
+14*
+17**
+Responsible supply chain
+19**
+Solutions for an inclusive and circular economy
+20*
+Product responsibility
+According to the HGB, the following topics are material:
+Resource efficiency and waste
+SAP
+Our KPIs and Targets
+281/338
+Our Policies and Selected
+Activities and Programs to
+Enhance Positive Impacts
+and Mitigate Negative
+Impacts
+Our KPIs and Targets
+digitalization and automation; potentially increase
+precarious jobs
+Fuel negative effects on employment through
+Combat forced and child labor throughout supply chains
++
+Respect human rights across value chains
++
+Enable an inclusive economy
++
+Number of employees
+Create three million jobs in our ecosystem (based on a
+2017 study by SAP and PwC)
++ Create decent jobs at SAP through our growth plans,
+specifically in developing markets
+Indirect:
+Direct:
+Our Potential Direct and
+Indirect Impact
+SDG 8 Decent Work and Economic Growth
+SAP and SDG 4, SAP Learning for Life, Powering Opportunity Through Digital Inclusion, SAP Digital Learning Initiative
+Employees and Social Investments
+Where You Can Find More
+Information in the SAP
+Integrated Report and Other
+Sources
+openSAP; CSR digital literacy programs;
+SAP digital learning initiative
+Cloud-based learning management system for employees
++
+Indirect:
+Direct:
+Indirect:
++ Provide access to a healthy lifestyle and a safe and
+healthy working environment for our employees
+290/338
+SAP support for startups through various programs
+Indirect:
+SAP Labs Network; One Billion Lives initiative fostering
+purpose-driven innovation
+Direct:
+ΝΑ
+Our Policies and Selected
+Activities and Programs to
+Enhance Positive Impacts and
+Mitigate Negative Impacts
+Our KPIs and Targets
++ Integrate small and medium-sized enterprises into
+global value chains and markets
+SAP recruiting programs
++ Provide “Best Practice” business processes through
+standard software solutions
+Indirect:
+Direct:
+SDG 9 Industry, Innovation, and Infrastructure
+Our Potential Direct and
+Indirect Impact
+SAP and SDG 8, Skilled and Inclusive Workforce, Pledge to Flex, Supporting Social Entrepreneurship, Powering Opportunity
+Through Digital Inclusion, SAP Solutions for Social Responsibility, SAP Rural Sourcing Management
+Employees and Social Investments
+Where You Can Find More
+Information in the SAP
+Integrated Report and Other
+Sources
+Partnership with Social Enterprise UK
+SAP Ariba Supplier Risk;
+SAP Rural Sourcing Management;
++ Support providers of infrastructure, financial services
+and clean technologies
+Direct:
++ Increase inclusive and sustainable industrialization
+through SAP's investments in research and
+development (including in developing countries)
+customers
+healthcare, and personalized medicine on a global scale
+Enhance safe and healthy working conditions,
+-
++
+Indirect:
+Business Health Culture Index
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Increase transparency of physical, medical, and health
+conditions of individuals, which might be abused
+Consolidated Financial
+Statements IFRS
+Additional
+Information
+We aim to add further indicators and share best practices and lessons learned with external
+stakeholders and other VBA member companies to help improve the methodology and input process.
+In addition, we will make results available to the public.
+Shaping the Environment of Impact Measurement
+Since the outbreak of COVID-19, impact measurement and valuation as a science is evolving globally.
+The connection between economic, social, and environmental impacts will become a guiding
+principle for the way businesses are evaluated and steered.
+We are using insights gained during our impact valuation journey in the development of our
+sustainability management initiative. We strive to embed impact measurement into our corporate and
+relevant business unit decision-making and target-setting. Holistic steering and reporting are being
+developed across the value chain, incorporating our response to legal requirements and using
+capabilities embedded in our software solutions.
+Our impact measurement experiences form a foundation for software innovations in the fields of
+climate action, circular economy, social responsibility, and holistic steering and reporting, helping
+customers on their environmental, social, and governance journey. We see the monetary evaluation of
+environmental and societal impacts as crucial in achieving a sustainable economy, and by simplifying,
+aligning, and optimizing enterprise sustainability reporting, we help customers address global
+sustainability challenges.
+QAudit Scope
+Engaging two million children, youth, and young adults in digital skills and coding programs by 2022
+The content of this section was not subject to the independent limited assurance engagement of our
+external auditor.
+Further Information on
+Sustainability
+Our Policies and Selected
+Activities and Programs to
+Enhance Positive Impacts
+and Mitigate Negative
+Impacts
+confidence, self-awareness, and active listening. This can result in improved mental well-being,
+with benefits for our employees' immediate social environment, as well as social and civic
+engagement. The analysis identified that our global employee training programs have a material
+positive impact and thus valuation of training is being prioritized in our future journey in shaping
+impact measurement and valuation.
+Direct:
+Build capability in our ecosystem and among our
++
+Where You Can Find More
+Information in the SAP
+Integrated Report and Other
+Sources
+Indirect:
+Our Policies and Selected
+Activities and Programs to
+Enhance Positive Impacts
+and Mitigate Negative
+Impacts
+Our KPIs and Targets
+Direct:
+SDG 4 Quality Education
+Our Potential Direct and
+Indirect Impact
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
++ Train and educate SAP employees
+SAP and SDG 3, Healthcare, SAP Environment, Health, and Safety Management, SAP Mental Health Initiative, SAP'S COVID-
+19 Response, Corona-Warn-App, SAP Vaccine Collaboration Hub
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+Global Health and Safety Management Policy; Employee
+Assistance Program; Corporate Oncology Program for
+Employees; Mental Health Initiative
+289/338
+Indirect:
+SAP solutions for healthcare; SAP Environment, Health, and
+Safety Management; SAP Success Factors Well-Being
+Management by Virgin Pulse; Corona-Warn-App
+Employees and Social Investments
+Combined Group
+Management Report
+SAP Integrated Report 2021
+To Our
+consolidated financial statements for 2020, the audits conducted by KPMG AG
+Wirtschaftsprüfungsgesellschaft (KPMG), and the Executive Board's proposed resolution on the
+appropriation of retained earnings for 2020. The auditor attended the meeting and reported in detail
+on the audit and its findings for each of the focus areas that had been agreed between the auditor
+and the Audit and Compliance Committee. The auditor also related the discussions on those matters
+at the preceding meetings of the Audit and Compliance Committee. The auditor then discussed the
+results of the audit with the Supervisory Board and answered our questions. The Audit and
+Compliance Committee had comprehensively prepared all topics in connection with the financial
+statements and the consolidated financial statements for 2020, and in particular reported on the form
+and scope of its examination of the documents relating to the financial statements, which it
+recommended we approve. The Supervisory Board approved the audit. There were no findings from
+our own examination, so we gave our consent to the SAP SE and consolidated financial statements
+for 2020. We endorsed the Executive Board's proposal concerning the appropriation of retained
+earnings for 2020, in accordance with the Audit and Compliance Committee's recommendation to us,
+and subsequently passed the proposed resolutions for the SAP SE Annual General Meeting of
+Shareholders on May 12, 2021. In particular, this included our proposal to the Annual General Meeting
+concerning the election of an auditor for fiscal 2021. Next, we extended the appointment of Juergen
+Mueller as member of the Executive Board for a further three years. In compliance with auditor
+rotation legislation, we resolved, on recommendation of the Audit and Compliance Committee, to
+propose to the 2022 Annual General Meeting that BDO AG Wirtschaftsprüfungsgesellschaft be
+appointed as SAP SE's auditor for fiscal 2023, so as to facilitate optimal familiarization with and
+preparation for the new auditor. Prior to this, the Audit and Compliance Committee had conducted a
+tender and selection process to identify a suitable new auditor and, following its own in-depth analysis
+of the candidates, proposed two of them to the Supervisory Board while citing a clear preference. In
+addition, the Executive Board gave us an overview of the Company's equity investments in 2020 and
+SAP's donation activities.
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Stakeholders
+SAP
+Resolutions Adopted by Correspondence in May
+23/338
+In May 2021, we adopted, besides the above resolution, two further resolutions by correspondence,
+namely: one resolution appointing a SAP regional president for the Greater China region (China,
+Taiwan, Hong Kong), and one resolution approving an additional venture capital fund (Sapphire
+Ventures Fund VI).
+On April 15, 2021, the Supervisory Board reviewed the first quarter results for 2021 and SAP's
+competitive situation. A senior analyst from global asset management company AllianceBerstein
+joined this session to share an outside view of SAP from the investors' standpoint. With this expert, we
+also examined the most important metrics in SAP's financial reports and the capital markets'
+expectations of SAP. We also assessed the effectiveness of the work of the full Supervisory Board and
+its committees (the so-called the efficiency review), as is regularly required pursuant to the
+recommendations of the German Corporate Governance Code (GCGC, herein: Code). For more
+information relating to this assessment, see the Corporate Governance Statement for 2022. In this
+regard, an electronic survey was sent to all the Supervisory Board members ahead of the meeting,
+with questions addressing all aspects of the Supervisory Board's work. We evaluated the
+questionnaire and discussed the consolidated survey responses and comments in the plenum. In
+closing, we dealt with the question of waiving a former Executive Board member's contractually
+agreed non-compete provisions.
+Meeting in April
+In February 2021, the Supervisory Board approved by way of correspondence vote the corporate
+governance statement for 2021 as well as the appointment of new regional presidents for the APJ
+(Asia Pacific Japan) and EMEA North (Europe, Middle East, and North Africa) regions.
+Further Information on
+Sustainability
+Resolutions Adopted by Correspondence in February
+24/338
+Additional
+Information
+SAP
+-
+Resolution Adopted by Correspondence in December
+Information
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+Meeting in July
+To Our
+Stakeholders
+We adopted two resolutions by correspondence in November 2021. In the first correspondence vote,
+the Supervisory Board extended Thomas Saueressig's Executive Board contract by a further three
+years to October 2025, and in that regard defined a new total compensation for this Executive Board
+member effective November 1, 2022. We had deliberated on this resolution in advance in our October
+session. In the second correspondence vote, we consented, on recommendation of the Finance and
+Investment Committee, to the execution of a share repurchase program in the amount of €1 billion.
+The program is to be executed between February 2022 and December 2022, and is intended to
+enable SAP to service future awards under the global share-based employee compensation program
+predominantly through SAP shares. This resolution was based on the authorization granted by the
+Annual General Meeting of Shareholders on May 17, 2018, under agenda item 8.
+Resolution Adopted by Correspondence in November
+At our meeting on October 28, 2021, the Executive Board first reported on business performance in
+the third quarter. As is regularly the case, we also dealt with the topic of independence. Based on the
+findings from our own examination, we determined that all shareholder representatives were
+independent in the meaning of the Code and were therefore to be named as such in the Corporate
+Governance Statement. We also resolved on what we believe to be the appropriate number of
+independent shareholder representative members, and determined that the Supervisory Board has an
+appropriate number of independent members in the meaning of the Code, also when the shareholder
+structure is taken into account. In agreement with the Executive Board, we also adopted, for regular
+publication in October 2021, the annual Declaration of Implementation of the Code, and approved an
+amendment to the objectives for the composition of the Supervisory Board. On recommendation of
+the Finance and Investment Committee, we consented to a follow-on share offering by Qualtrics,
+under which the subsidiary offered additional Qualtrics shares through the stock market in
+November 2021. Prior to this decision, the Executive Board explained to the meeting members the
+planned use of the funds collected in this way and how the move would affect SAP SE's stake in
+Qualtrics. The Executive Board also reported on the efficiency review we had requested in the
+Research & Development area.
+Meeting in October
+In August 2021, the Supervisory Board resolved by way of correspondence the appointment of a new
+chief strategy officer for SAP.
+Resolutions Adopted by Correspondence in August
+When we met on July 29, 2021, we resolved to file a petition to the court for the removal of an
+employee representative from the Supervisory Board. The Supervisory Board was advised in this
+regard by a law firm it had commissioned to examine the underlying facts. The Supervisory Board
+member in question was first given the opportunity to comment on matter, and then left the meeting
+to allow the other members of the Supervisory Board to discuss and vote on the agenda item. The
+member rejoined the meeting once the item had been dealt with. After that, we discussed the effects
+of an adjustment in the non-IFRS definition – which from a Group point of view was not material - on
+the Group budget. In addition, we updated the list of transactions that go beyond the scope of the
+Company's articles of incorporation and for which the Executive Board must obtain the Supervisory
+Board's prior consent. On recommendation of the Finance and Investment Committee, we also
+agreed to the planned acquisition of the U.S.-based company Clarabridge by Qualtrics, a listed SAP
+subsidiary in which SAP holds a majority interest, based on the details of the acquisition contract
+explained to us previously. Fairness opinions of two independent consulting firms confirmed that the
+purchase price was fair. With the combination of both companies' products, now made possible by
+the acquisition, SAP aims to reinforce Qualtrics' leading position in the Experience Management (XM)
+space.
+SAP Integrated Report 2021
+Additional
+The Audit and Compliance Committee continued to seek assistance from its own external consultants
+to help address the complex technical and legal nature of the compliance and cybersecurity matters
+being investigated, and reported on their opinions to the Supervisory Board, which – where required -
+resolved on the next steps. In particular, representatives of the external legal consultant referred to
+above attended the Supervisory Board's July 2021 meeting as experts and explained to the plenum
+the results of their legal audits and the status of the internal investigations. At present, SAP is still in
+discussions with the U.S. DOJ and the U.S. Securities and Exchange Commission (U.S. SEC) with a
+view to reaching a global resolution with regard to the compliance matters. The Supervisory Board
+and notably the Audit and Compliance Committee are regularly updated on these matters. The
+negotiations are expected to close in 2022.
+Consolidated Financial
+Statements IFRS
+Further, the Supervisory Board was informed that, following comprehensive investigations into
+potential export controls and economic sanctions violations, SAP had entered into a non-prosecution
+agreement with the U.S. DOJ and mutual settlement agreements with the U.S. Bureau of Industry and
+As already announced publicly in a May 4, 2020, mandatory disclosure, the Company has also
+stepped up its cybersecurity efforts in the wake of internal investigations. The Audit and Compliance
+Committee monitored, from the outset and continuously in the year under review, the progress of
+cybersecurity measures introduced by the Executive Board in relation to SAP cloud products, as well
+as the other steps taken to continuously improve security standards.
+SAP's Office of Ethics & Compliance (OEC) kept the Audit and Compliance Committee continually
+informed about the ongoing investigations being conducted with the assistance of external counsel
+into potential violations of anticorruption laws (including the U.S. Foreign Corrupt Practices Act
+(FCPA)). Said updates included reports on the implementation of further significant improvements to
+compliance processes and controls at the Company, which had been introduced in response to the
+relevant investigations and as part of the general evolution of the compliance management program.
+The Audit and Compliance Committee reported in turn on the status of these compliance matters and
+on the discussions with the U.S. Department of Justice (U.S. DOJ), which intensified significantly in
+the third quarter, to the full Supervisory Board at our extraordinary meeting held on January 25, 2021,
+and at our ordinary plenary meetings held in February, April, July, and October 2021.
+The Supervisory Board and the Audit and Compliance Committee dealt at length with the ongoing
+compliance and cybersecurity matters and immediately addressed all governance issues that arose
+during the reporting year.
+Compliance, Cybersecurity, and Governance Matters
+and Strategy Committee was reduced from 12 to 10 members. We subsequently adopted the rules of
+procedure of the committees – except for the China Strategy Committee and the Nomination
+Committee - in updated form at our meeting on July 29, 2021. As part of a circular correspondence
+vote at the beginning of October 2021, a new employee representative was appointed to each of the
+Personnel and Governance Committee and the People and Culture Committee as successor to an
+employee representative who had left both committees. When we convened on October 28, 2021, we
+updated the rules of procedure of the full Supervisory Board and of the Audit and Compliance
+Committee, primarily to take account of the new regulations, insofar as they pertained to the work of
+the Supervisory Board, in the German Act to Strengthen Financial Market Integrity, which for the most
+part entered into force on July 1, 2021. The rules of procedure were also updated to reflect the
+increased requirements of investors regarding the handling of ESG (environmental, social and
+governance) issues in the supervisory bodies. For more information about the Supervisory Board
+committees, particularly their respective tasks and responsibilities, see Corporate Governance
+Statement for 2022 and the Corporate Governance section of SAP's Web site. We also resolved, by
+way of correspondence vote in December 2021, on the creation of an eight-member Go-to-Market
+and Operations Committee effective January 1, 2022, comprising an equal number of employer and
+employee representatives. Our objective with this new Committee is to provide more space for
+deliberating the sales and marketing strategy and discussing same with the relevant Executive Board
+members, and thereby ease the burden on the Strategy and Technology Committee. We believe that
+the work in the committees is now structured even better than before.
+Information
+21/338
+Additional
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+In December 2021, we gave our approval, as recommended by the Personnel and Governance
+Committee, for compensation-related changes to be made to the Executive Board contracts of Scott
+Russell effective January 1, 2022, and Thomas Saueressig effective November 1, 2022.
+Further Information on
+Sustainability
+Further Information on
+Sustainability
+22/338
+SAP Integrated Report 2021
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+In the plenary session on February 24, 2021, we approved a change to the Executive Board's
+schedule of portfolios. This was followed by a report on business in 2020, and the adoption of the
+budget for 2021 after discussing same extensively with the Executive Board. Next, we turned to the
+matter of Executive Board compensation. We first determined the total target achievement under the
+Short-Term Incentive (STI) 2020 Plan, which, due to the COVID-19 pandemic, had not resulted in any
+payouts. After that, we deliberated on Executive Board compensation for 2021. We set the specific
+target numbers for, and relative weighting of, each key performance indicator (KPI) of the STI 2021. In
+addition, we set the specific target numbers for each KPI of the Long-Term Incentive Program 2020
+(LTI 2020), tranche 2021. The Supervisory Board, as required, evaluated the appropriateness of the
+individual Executive Board members' total compensation for fiscal 2021, and in each case found it to
+be appropriate in terms of amount, structure, objective criteria, and for each member's responsibilities
+and tasks. We referred in this regard to an appropriateness certificate obtained beforehand from an
+external consulting firm for compensation matters. In addition, the Supervisory Board approved, on
+recommendation of the Personnel and Governance Committee, the payment of supplementary
+compensation to the Executive Board members as permitted by the compensation system in the
+event of extraordinary situations. In doing so, the Supervisory Board honored the fact that, despite
+unprecedented challenges posed by the COVID-19 pandemic, the related restrictions, and the
+ensuing economic crisis, the Executive Board members exhibited extraordinary performance, ensuring
+the company remained profitable and positioned for long-term, sustainable success. In accordance
+with the agreement, the Executive Board members invested the net payout amount of this
+supplementary compensation in the purchase of SAP shares with a holding period of three years. The
+Supervisory Board referred prior to this decision to a corresponding analysis from an independent
+consulting firm for compensation matters as well as a legal opinion from an external law firm. For
+more information about the STI 2021, the LTI 2020, tranche 2021, the supplementary compensation,
+and the other compensation elements for Executive Board members, see the Compensation Report.
+In addition, the Supervisory Board turned its attention to the SAP SE financial statements and the
+Other key topics addressed at our meetings in 2021 notably included the following:
+Meeting in February (Meeting to Discuss the Financial Statements)
+SAP
+Another topic of interest, initially dealt with at length by the responsible Finance and Investment
+Committee at a March 2021 meeting, was SAP Fioneer, SAP's joint venture with Dediq. At said
+meeting, the Committee and the Executive Board examined all the details of the joint venture
+agreement, the ownership structure, and the underlying strategic and economic considerations. After
+comprehensive analysis, the Committee members approved the joint venture by correspondence
+vote. When later media reports criticized the shareholder structure of the joint venture, the Audit and
+Compliance Committee probed the governance aspects of the transaction to follow up on the
+concerns expressed. To this end, the Committee commissioned two independent external opinions to
+assess the valuation of SAP's and participating partners' stake in SAP Fioneer and to report on
+whether the decision process regarding the joint venture complied with applicable law. The opinions
+confirmed that the valuation was in line with the market and the decision process compliant.
+In an extraordinary meeting in December 2021, the Audit and Compliance Committee dealt with
+allegations in media reports about inadequate corporate governance measures in connection with a
+past legal dispute that SAP had already settled many years earlier in 2014. A representative of the law
+firm commissioned by the Supervisory Board at the time informed the Committee about the checks
+and deliberations actually carried out by the Supervisory Board during the period in question. The
+external counsel and the Committee jointly concluded that the modus operandi chosen by the
+Supervisory Board at the time was appropriate and that the Supervisory Board had no reason to
+question it after the fact.
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+Security (BIS) and U.S. Department of Treasury's Office of Foreign Assets Control (OFAC) in
+April 2021. SAP had voluntarily self-disclosed potential violations to the U.S. DOJ and OFAC in
+September 2017 and had notified the U.S. SEC at the same time. Since then, the Audit and
+Compliance Committee and the full Supervisory Board have been kept continually apprised of the
+status of the investigations.
+The Work of the Supervisory Board Committees
+The Audit and Compliance Committee held ten regular meetings – two of which jointly with the
+Finance and Investment Committee - and three extraordinary meetings in 2021. It also adopted
+one resolution by way of correspondence. The Committee comprehensively prepared the
+resolutions of the Supervisory Board for all topics assigned to it, as described above, and dealt at
+its meetings with the course of business in the respective quarter, the accounting processes, the
+preparation of end-of-quarter closings, and the quarterly reports due for publication. In addition, the
+Committee chairperson was in regular contact with the auditor. Other recurring meeting topics
+included SAP's risk management system, its internal control system, its compliance system
+(including specific compliance issues, the status of corresponding SAP-internal investigations, and
+case-related collaboration with authorities), and cybersecurity. During its meeting in February 2021,
+the Committee focused on the financial accounts of SAP SE and the SAP Group for 2020 and
+prepared the Supervisory Board's proposed resolutions to the Annual General Meeting of
+Shareholders concerning the election of an auditor and the appropriation of retained earnings. The
+decision on the recommendation regarding the election of the auditor was preceded by a review of
+the auditor's independence, qualifications, and quality of work. To monitor the latter, the Audit and
+Compliance Committee obtained regular reports from the auditor on its internal quality assurance
+standards and on any material findings from internal quality audits, from external quality controls
+via peer review, and from any inspections conducted by the government or regulators into the
+auditor's audits. Other material topics deliberated on by the Committee beyond the regular meeting
+topics in its ordinary and extraordinary meetings included quarter-specific matters and the
+compensation system for SAP's Sales organization. Further, the Committee discussed the progress
+of selected lawsuits involving SAP. The Audit and Compliance Committee also received regular
+updates on the activities relating to the change in auditor for SAP's financial statements and
+consolidated financial statements. The Committee discussed the audit focus with the auditor at its
+meeting in July. At its meeting in April, and again at its meeting in July, the Committee resolved to
+commission non-audit services from the auditor in relation to the compensation report (April
+meeting) and in relation to the non-financial report (July meeting). Specifically, this included a
+limited assurance review of the documents and a report to the Committee on the results of the
+review. As reported in more detail below, the Committee also held two joint meetings with the
+Finance and Investment Committee in February and December 2021 to discuss the Group annual
+plan for 2021 and the preliminary Group annual plan for 2022. The auditor attended all Audit and
+Compliance Committee meetings except for the extraordinary meetings in June, July, and
+December, as well as the joint meetings with the Finance and Investment Committee, and reported
+in depth on its audit work and on its quarterly reviews of selected software agreements.
+The Finance and Investment Committee held six regular meetings and six extraordinary meetings
+in 2021, and outside these meetings it passed two resolutions by correspondence. Two of its
+meetings, one in February and one in December 2021, were joint meetings with the Audit and
+Compliance Committee. In two extraordinary meetings in January 2021, the Committee was given
+detailed status reports on the Qualtrics IPO and the planned acquisition of Signavio. In
+-
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+Additional
+Information
+SAP's corporate governance and insider trading compliance officer monitored our compliance with
+those recommendations in the Code with which we claim to comply in SAP SE's declaration, and
+reported in full to the Personnel and Governance Committee in this regard at the latter's meeting on
+February 10, 2021. Detailed information about compliance with the Code is available in the Executive
+and Supervisory Boards' Corporate Governance Statement. Members of the Supervisory Board and of
+the Executive Board had no conflicts of interest that recommendations E.1 and E.2 of the Code
+require to be disclosed to the Supervisory Board. Insofar as Supervisory Board members hold
+executive positions in companies or have material equity in companies that currently have business
+dealings with SAP, we do not see any impairment of their independence. The scope of these
+transactions is relatively small and, moreover, takes place at arm's length. During the year under
+review, the Personnel and Governance Committee approved transactions involving a member of the
+Executive Board in 2020 which were all consistent with industry standards and immaterial. Other than
+those contracts mentioned in this report, the Company made no other contracts with members of the
+Executive Board or Supervisory Board that would have required a resolution of the Supervisory Board.
+The work of the committees and their regular reports to the full Supervisory Board ensured that we
+were kept fully informed of all matters covered by the committees and were able to discuss them
+thoroughly.
+The Nomination Committee met twice in the reporting year. In January 2021, the Committee
+resolved the nomination of Qi Lu and Rouven Westphal as candidates for election to the
+Supervisory Board by the Annual General Meeting on May 12, 2021. The Committee met again on
+December 10, 2021, to deliberate on the candidates for election to the Supervisory Board at the
+Annual General Meeting in May 2022. It resolved to nominate Hasso Plattner, Rouven Westphal,
+and Gunnar Wiedenfels as candidates for reelection at the Annual General Meeting on
+May 18, 2022. Further, the Committee discussed the subject of succession planning for the
+Supervisory Board. It decided to solicit the help of an international personnel consulting firm, so as
+to obtain an overview of available top managers who might be potential candidates to succeed
+departing shareholder representatives in future.
+The People and Culture Committee held four meetings in fiscal year 2021. The focus of the
+meeting in February 2021 was SAP's People Strategy. In this connection, the Committee was given
+an overview of the implementation status, the future concept for performance management, and
+the attraction, hiring, and onboarding of top talents. Also at this meeting, and again in August and
+October 2021, the Committee was updated on the impact of the coronavirus pandemic and the
+global measures introduced both within and outside the Company as a result. At its April meeting,
+the Committee turned its attention to the early talent process and looked back at the SAP People
+Day, reviewing both the successes and insights for potential improvement. In addition, the
+Executive Board updated the Committee on the measures taken in the various Board areas to
+harness and integrate the diverse socio-cultural backgrounds of the workforce into SAP's corporate
+culture, and explained the key metrics in that regard. The August meeting focused on the new
+Future of Work organization at SAP, which deals with the changing world of work and its impact on
+society, the process of attracting leaders, the leadership culture at SAP, and the new onboarding
+experience, that is, the process of familiarizing new leaders with their roles. In October 2021, after
+receiving an update on the diversity strategy focused on the topics "women in management" and
+"promoting ethnic diversity at SAP," the Committee discussed SAP's revised employee
+compensation strategy planned for the next two years, the management culture, and the talent
+development process.
+China. In December 2021, the Committee received a written final report from the Executive Board
+summarizing their jointly-developed China strategy and the planned measures for implementing it.
+The task of the Committee was thus fulfilled, and it concluded its activities at the end of the fiscal
+year 2021.
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Corporate Governance
+Management Report
+Training and Professional Development
+SAP SE and Consolidated Financial Reports for 2021
+The Audit and Compliance Committee and the Supervisory Board satisfied themselves that KPMG
+had conducted the audit properly. In particular, they concluded that both the audit reports and the
+audit itself fulfilled the legal requirements. On the basis of the report and the Audit and Compliance
+Committee's recommendation, the Supervisory Board approved the results of the audit and, since
+there were no findings from our own examination, we gave our consent to the SAP SE financial
+statements, the consolidated financial statements, the combined Group management report, and
+adopted the compensation report pursuant to the German Stock Corporation Act, section 162. The
+financial statements and combined management report were thus formally adopted upon approval by
+the Supervisory Board. The Supervisory Board's opinion of the Company and the Group coincided
+with that of the Executive Board as set out in the combined management report. The Supervisory
+Board considered the proposal presented by the Executive Board concerning the appropriation of
+retained earnings. We had regard to the requirements of dividends policy, the effects on the liquidity of
+SAP SE and the SAP Group, and the interests of the shareholders. We also discussed these matters
+with the auditor. We then endorsed the Executive Board's proposal concerning the appropriation of
+retained earnings, in accordance with the Audit and Compliance Committee's recommendation. The
+corporate governance statement pursuant to the German Commercial Code, sections 315d and 289f
+was approved for publication by the Supervisory Board by way of correspondence vote prior to the
+meeting to discuss the financial statements on February 22, 2022. Finally, we adopted this present
+Report.
+The Committee also reported that KPMG had told it that no circumstances had arisen that might give
+cause for concern about KPMG's impartiality, and informed us about the services KPMG had provided
+that were not part of the audit. The Committee reported that it had examined the auditor's
+independence, taking the non-audit services it had rendered into consideration, and stated that, in the
+Committee's opinion, the auditor possessed the required degree of independence and professional
+qualification.
+After the Executive Board had explained them, the Audit and Compliance Committee and the
+Supervisory Board reviewed the financial statement documents (based on drafts identical to the final
+documents), taking KPMG's audit reports (or the drafts identical to the final documents) into account.
+The Audit and Compliance Committee then passed the compensation report on to the Supervisory
+Board for release. The representative of the auditor who attended presented full reports on the audit
+and the results of the audit to the Audit and Compliance Committee and Supervisory Board meetings
+and explained its audit reports (or final drafts thereof). The auditor also reported that it had not
+identified any material weaknesses in SAP's internal control and risk-management systems for
+financial reporting. Both the Audit and Compliance Committee and the Supervisory Board asked
+detailed questions about the form, scope, and results of the audit. The Audit and Compliance
+Committee reported to the Supervisory Board on its own review of the financial statements of SAP SE
+and the SAP Group, its discussions with the Executive Board and with the auditor, and its supervision
+of the financial reporting process. It confirmed that as part of its supervisory work, it had addressed
+the SAP Group's internal control, risk management, and internal auditing systems, and found the
+systems to be effective.
+The Executive Board explained the financial statements of SAP SE and the SAP Group and its
+proposal concerning the appropriation of retained earnings at the meeting of the Audit and
+Compliance Committee on February 22, 2022 (based on the drafts identical to the final documents)
+and at the meeting of the Supervisory Board on February 23, 2022. Members of the Executive Board
+answered questions from the Committee and Supervisory Board members. At the Audit and
+Compliance Committee meeting, they also explained the compensation report and the Annual Report
+on Form 20-F prepared in accordance with the applicable U.S. standards.
+audit reports prepared by KPMG, and the Executive Board's proposal concerning the appropriation of
+retained earnings in good time. On February 23, 2022, the Executive Board prepared the financial
+accounts of SAP SE and the Group for 2021, comprising the SAP SE financial statements, the
+consolidated financial statements, and the combined management report, and submitted them
+without delay to the Supervisory Board.
+Information
+Additional
+The members of the Supervisory Board once again took advantage of various training and
+professional development opportunities throughout the year, with appropriate support from the
+Company. At the start of their term of office, new Supervisory Board members were made familiar
+with their tasks and responsibilities through on-boarding sessions and leaflets. In addition, the
+members of the Audit and Compliance Committee were invited to a presentation in April 2021 on
+"New regulatory reporting requirements," and a short seminar in July 2021 on the impact of the
+"OECD/G20 New World Tax Order for Digital Business" (a new basic approach adopted by OECD/G20
+to reform international business taxation) on SAP. In January 2021, the Supervisory Board members
+were invited to the professional development events “Resilient and Sustainable Supply Chain with
+SAP Digital Supply Chain," and "RISE with SAP." In March 2021, the Supervisory Board members were
+invited to a seminar on "Professional Negotiation Management" and a training course focusing on
+pending business models in Retail Solutions (digital solutions for the retail industry). Where it made
+sense, the training offerings were recorded and placed on a specially configured training platform to
+enable the remaining Supervisory Board members to take part in them as well.
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+To Our
+Stakeholders
+The committees made a key contribution to the work of the Supervisory Board in 2020, and reported
+on their work to us, including their preparatory work for and decisions made on the relevant agenda
+items of the subsequent Supervisory Board meetings. The following committees were in place in the
+year under review:
+SAP
+30/338
+29/338
+KPMG audited the SAP SE and consolidated financial reports for 2021. The Annual General Meeting
+of Shareholders elected KPMG as the SAP SE and SAP Group auditor on May 12, 2021. The
+Supervisory Board proposed the appointment of KPMG on the recommendation of the Audit and
+Compliance Committee. Prior to the proposed resolution being put to the Annual General Meeting of
+Shareholders, KPMG had confirmed to the chairperson of the Supervisory Board and the Audit and
+Compliance Committee that circumstances did not exist that might prejudice or raise any doubt
+concerning its independence as the Company's auditor. In that connection, KPMG also informed us of
+the volume of the services that were not part of the audit which it had either provided to the Group in
+the past year or was engaged to provide in the year to come. The Supervisory Board has agreed with
+KPMG that the auditor should report to the Supervisory Board and record in the auditor's report any
+fact found during the audit that is inconsistent with the declaration given by the Executive Board and
+the Supervisory Board concerning implementation of the German Corporate Governance Code.
+KPMG examined the SAP SE financial statements prepared in accordance with the German
+Commercial Code, the consolidated financial statements prepared in accordance with International
+Financial Reporting Standards (IFRSS) as required by the German Commercial Code, section 315e,
+and the combined SAP Group and SAP SE management report prepared in accordance with the
+German Commercial Code, and certified them without qualification. The auditor thus confirmed that,
+in its opinion and based on its audit in accordance with the applicable accounting principles, the
+SAP SE and consolidated financial statements give a true and fair view of the net assets, financial
+position, and results of operations of SAP SE and the SAP Group. The auditor also confirmed that the
+combined SAP SE and SAP Group management report is consistent with the corresponding financial
+statements and as a whole gives a suitable view of the position of SAP SE and the SAP Group and of
+foreseeable opportunities and risks. In accordance with section 317 (3a) of the German Commercial
+Code, the auditor also examined and confirmed that the renderings of the financial statements, the
+management report, the consolidated financial statements, and the combined management report
+contained in the files submitted on an electronic data carrier, which can be accessed by the issuer on
+the secure client portal, and prepared for the purposes of disclosure comply in all material respects
+with the requirements of section 328 (1) of the German Commercial Code regarding the electronic
+reporting format (“ESEF format”). KPMG had completed its audit of SAP's internal control over
+financial reporting and certified without qualification that it complies with the applicable U.S.
+standards. The auditor stated in its opinion that it considers SAP's internal controls with respect to the
+consolidated financial statements to be effective in all material respects. Additionally, it provided
+assurance on the non-financial declaration in the combined management report, and on the separate
+review of the compensation report and selected qualitative and quantitative sustainability disclosures
+outside of the financial statements and management report. All Audit and Compliance Committee
+members and Supervisory Board members received - initially in the form of drafts that were identical
+to the final documents – the documents concerning the financial statements mentioned above, the
+Management Report
+Combined Group
+SAP Integrated Report 2021
+SAP Integrated Report 2021
+SAP Integrated Report 2021
+SAP
+26/338
+25/338
+The Personnel and Governance Committee held four regular meetings in the reporting year. In
+particular, the Committee, in fulfillment of the tasks assigned to it, extensively prepared and
+discussed in advance the deliberations of the Supervisory Board and its resolutions on the self-
+assessment and reorganization of the Supervisory Board committees, on a termination agreement
+for a departing Executive Board member, and on Executive Board compensation, or it adopted its
+-
+Besides the matters described above, the committees focused primarily on the following topics in
+2021:
+To Our
+Stakeholders
+site.
+China Strategy Committee: Gerhard Oswald (chairperson), Margret Klein-Magar, Lars Lamadé,
+Qi Lu (since February 24, 2021), Hasso Plattner, Christine Regitz (since February 24, 2021),
+Friederike Rotsch, Heike Steck
+People and Culture Committee (formerly People and Organization Committee): Aicha Evans
+(chairperson since June 1, 2021), Pekka Ala-Pietilä (until May 12, 2021), Manuela Asche-Holstein
+(since October 8, 2021), Gesche Joost, Monika Kovachka-Dimitrova, Peter Lengler (since
+August 10, 2021), Gerhard Oswald (until May 31, 2021, as chairperson and member), Friederike
+Rotsch (since June 1, 2021), Heike Steck, Christa Vergien-Knopf (until August 9, 2021), Ralf Zeiger
+(until October 7, 2021)
+· Technology and Strategy Committee: Hasso Plattner (chairperson), Christine Regitz (deputy
+chairperson), Aicha Evans, Gesche Joost, Monika Kovachka-Dimitrova, Lars Lamadé, Bernard
+Liautaud, Qi Lu (since February 24, 2021), Gerhard Oswald (until May 31, 2021), Heike Steck,
+Christa Vergien-Knopf (until May 31, 2021), James Wright
+Finance and Investment Committee: Rouven Westphal (since June 1, 2021, as chairperson and
+member), Panagiotis Bissiritsas (until May 31, 2021), Christine Regitz, Friederike Rotsch (until
+May 31, 2021, as chairperson and member), Heike Steck (since June 1, 2021), Gunnar Wiedenfels,
+James Wright
+Audit and Compliance Committee (formerly Audit Committee): Gunnar Wiedenfels
+(chairperson), Panagiotis Bissiritsas (until May 31, 2021), Margret Klein-Magar, Peter Lengler (since
+August 10, 2021), Gerhard Oswald (until May 31, 2021), Friederike Rotsch, Christa Vergien-Knopf
+(June 1 until August 9, 2021), Rouven Westphal (since June 1, 2021), James Wright
+Personnel and Governance Committee (formerly General and Compensation Committee):
+Friederike Rotsch (chairperson since June 1, 2021), Pekka Ala-Pietilä (until May 12, 2021),
+Panagiotis Bissiritsas (until May 31, 2021), Aicha Evans, Margret Klein-Magar, Monika Kovachka-
+Dimitrova (since October 8, 2021), Lars Lamadé, Bernard Liautaud, Hasso Plattner (chairperson
+until May 31, 2021), Christine Regitz, Ralf Zeiger (until October 7, 2021)
+To Our
+Stakeholders
+Nomination Committee: Hasso Plattner (chairperson), Pekka Ala-Pietilä (until May 12, 2021),
+Aicha Evans (since June 1, 2021), Bernard Liautaud (until May 31, 2021), Gerhard Oswald (until
+May 31, 2021), Friederike Rotsch (since June 1, 2021), Rouven Westphal (since June 1, 2021)
+Each of the aforementioned committees was active in 2021. For more information about the
+Supervisory Board committees and their duties, see the Corporate Governance section of SAP's Web
+Combined Group
+The Technology and Strategy Committee met four times in 2021. It discussed key technology
+trends in the software industry in the years to come and SAP's corporate and product strategies.
+The Executive Board explained SAP's technology strategy to the Committee members at its
+February meeting, where the two bodies also discussed the improved competitive situation in
+marketing as a result of the 2020 acquisition of Emarsys. At the meeting in April, the Committee
+turned its attention to how SAP's partner network and SAP itself used SAP technologies to develop
+cloud applications for organizations. In July 2021, the Executive Board updated the Committee on
+the strategy plans for small and medium-sized enterprises. The Executive Board also reported on
+how SAP planned to leverage machine learning and direct integration in business processes to set
+itself above the competition in the workflow management domain, that is, in the collaborative
+processes or business processes used by companies and authorities. When it met in
+October 2021, the Committee examined SAP's long-term innovation strategy and the changes in
+company culture that had been triggered to support this. To this end, the Executive Board
+explained that the lever for these changes was the REINVENT strategy, which, through the
+integration of SAP's product portfolio, the use of artificial intelligence, and a wide range of new
+functions and applications, was intended to support customers on their journey to an intelligent
+enterprise and greater sustainability.
+Consolidated Financial
+Statements IFRS
+SAP
+Management Report
+28/338
+27/338
+February 2021, the Executive Board updated the Committee on the status of both projects as well
+as on the closing of the sale of SAP Digital Interconnect (SDI). The Executive Board also reported
+on the acquisition of Finnish company AppGyver, provider of a no-code platform enabling app
+development without prior coding experience. Further, the Committee received its regular written
+update on SAP's equity investments during the preceding fiscal year. In the joint meeting with the
+Audit and Compliance Committee that followed, the members of both Committees discussed the
+annual budget for 2021 and voted in favor of recommending its approval to the Supervisory Board.
+On March 15, 2021, the Committee convened to deliberate on a small acquisition by an SAP
+subsidiary. At the meeting in April, the Executive Board reported to the Committee on selected
+Investor Relations activities. In addition, representatives from Sapphire Ventures gave the
+Committee an overview of the European and U.S. market for venture capital in technology and a
+status report on the active SAP venture capital funds, and presented the details of the planned
+additional venture capital fund, Sapphire Venture Fund VI. A resolution to recommend the
+Supervisory Board's approval of this new fund was subsequently adopted by the Committee by
+correspondence in May 2021. At our extraordinary meeting on July 23, 2021, we deliberated on
+Qualtrics' planned acquisition of Clarabridge. At our ordinary meeting on July 29, 2021, the
+Executive Board presented an analysis of the acquisitions and shareholding transactions of the
+past three years, updated us on the SAP's liquidity situation, and compared the current business
+performance with the budget presented for fiscal 2021. At the Committee's regular meeting in
+October, the Executive Board took the Committee through SAP's current product portfolio. In
+addition, the Committee deliberated on the Executive Board's proposed restructuring of current
+financing activities and recommended the Supervisory Board approve it as well. The Committee
+was also given a funding and strategy update on the Sapphire Ventures funds manager, and
+provided with a written report on SAP's business performance up to the third quarter. In
+December 2021, the Committee held a second joint meeting with the Audit and Compliance
+Committee, at which the Executive Board presented the preliminary Group annual plan for 2022.
+This meeting was held in preparation for the Supervisory Board meeting in February 2022, at which
+the full Supervisory Board resolved to approve the Group annual plan for 2022.
+Information
+Additional
+Further Information on
+Sustainability
+The China Strategy Committee met three times in the reporting year. At its meeting in February, the
+Committee discussed SAP's business performance in China in the past years, the current situation
+in China, and the software market there. It also analyzed SAP's future strategy, particularly the
+areas in which SAP sought to make adjustments to cater to the growing importance of the Chinese
+market. When it met in April, the Committee examined SAP's product, sales, and partner strategies
+and the associated risks. To this end, it received reports in particular on the temporary tensions
+between the United States and China. The July meeting focused on the current geopolitical
+situation and SAP's half-year 2021 results. In addition, the Committee discussed the appointment
+of a new SAP regional president for Greater China and plans to increase SAP's market share in
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+own resolutions in these matters. At its first meeting in February 2021, the Committee reviewed the
+annual report from SAP's corporate governance and insider trading compliance officer, as
+presented to it. In its second meeting in February, the Committee dealt with the extension of
+Juergen Mueller's appointment to the Executive Board. When it met in July 2021, the Committee
+approved the acceptance of an outside supervisory board seat by an Executive Board member and
+the conclusion of a consulting contract with a former Executive Board member. It also discussed
+the lessons learned from the voting results at the Annual General Meeting in May 2021 and the
+feedback from institutional investors. In October 2021, the Committee prepared the Supervisory
+Board's resolutions regarding an update to the objectives for the composition of the Supervisory
+Board, submission of the implementation declaration, and determination of the independence of
+Supervisory Board members. The Committee also discussed the succession planning process for
+the Executive Board and the development of top talent as potential successors for departing
+members. At its ordinary meeting on December 16, 2021, the Committee approved its resolution
+proposal to the Supervisory Board regarding the Executive Board compensation for Scott Russell
+effective January 1, 2022, and for Thomas Saueressig effective November 1, 2022.
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Additional
+Information
+Direct
+Ensure equal opportunity and inclusion of all
+employees, irrespective of age, sex, disability, race,
+ethnicity, origin, religion, or economic or other status
+Indirect
+"
+Decouple societal groups from entire areas of
+employment through an accelerated digital divide and
+lack of digital skills
+Our KPIs and Targets
+30% women in management by year end 2022
+Our Policies and Selected
+Activities and Programs to
+Enhance Positive Impacts and
+Mitigate Negative Impacts
+SDG 10 Reduced Inequalities
++ Enable an inclusive economy by providing tools and
+systems to foster inclusion of all in workforce and
+supply chains
++
+Management Report
+SAP and SDG 9, SAP Innovation, One Billion Lives Initiative, SAP.io
+Products, Research & Development, and Services, Employees and Social Investments
+Integrated Report and Other
+Sources
+Where You Can Find More
+Information in the SAP
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+•
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+Our Potential Direct and
+Indirect Impact
+Double the representation of African-American talent in the U.S. over the next three years
+Our Policies and Selected
+Activities and Programs to
+Enhance Positive Impacts and
+Mitigate Negative Impacts
+Direct:
+To Our
+SAP Integrated Report 2021
+SAP
+291/338
+Environmental Policy, SAP and SDG 12, Circular Economy, SAP Solutions for Circular Economy, Circular Design Project, SAP
+and Topolytics Launch COP26 Waste Insights Project, Phase out single-use plastics, Buy social: 5 & 5 by '25, SHIFT: Digital
+tools to fight ocean plastics, Material traceability, Green Token by SAP
+Energy and Emissions, Waste and Water, Sustainable Procurement
+SAP Responsible Design and Production; 5 & 5 by '25
+initiative; SAP Ariba Supplier Risk Management; SAP Digital
+Supply Chain; SAP Rural Sourcing Management;
+SAP Logistics Business Network and Material Traceability
+Indirect:
+Direct:
+We drive resource productivity with an aspiration to a world with zero waste.
++ Decouple economic prosperity from resource
+consumption by enabling transparency and optimizing
+resource productivity in linear or circular economies
+Increase absolute resource and energy consumption
+because efficiency gains through automation may be
+counteracted (rebound effect)
+Reach 5% of annual addressable procurement spend with social enterprises and with diverse businesses by 2025
+Indirect:
++ Drive sustainable business practices and integrated
+reporting
+Direct:
+SDG 12 Responsible Consumption and Production
+Where You Can Find More
+Information in the SAP
+Integrated Report and Other
+Sources
+Our KPIs and Targets
+Our Potential Direct and
+Indirect Impact
+SAP and SDG 10, Human Rights Commitment Statement, Equality for All, Diversity and Inclusion, Social Justice, Spotlight
+Black Businesses, Equal Pay for Equal Work, Fostering Corporate Spend with Diverse Suppliers, Powering Opportunity
+Through Digital Inclusion, SAP Product Accessibility, SAP Solutions for Social Responsibility, SAP Rural Sourcing
+Management
+Where You Can Find More
+Information in the SAP
+Integrated Report and Other
+Sources
+SAP solutions for social responsibility; SAP Ariba Supplier
+Risk Management
+Indirect:
+Human Rights Commitment Statement; Diversity & Inclusion
+programs including EDGE certification; SAP Global Anti-
+Discrimination Policy; 5 & 5 by '25 initiative
+Use energy, water, and resources; produce waste
+Beyond Single-Use Plastics initiative; Supplier Code of
+Conduct; Sustainable Procurement; e-waste recycling
+Thrive Global
+Combined Group
+SAP Integrated Report 2021
+SAP
+Eliminate: Manage packaging and regulatory risks including extended producer responsibility
+obligations and plastic taxes holistically across global markets, and embed circularity principles into
+In 2020, we made a commitment with our customers to strive for a significantly cleaner ocean by 2030
+at the World Economic Forum in Davos, alongside the Ellen MacArthur Foundation, World Wildlife
+Fund, and the Global Plastic Action Partnership. To make the circular economy the de facto approach
+to material use and waste management, we are working with our customers and partners on solutions
+that address full-circle transparency across all material flows to enable three priorities: eliminate,
+circulate, and regenerate.
+Building Regenerative Business in a Circular Economy
+151
+■Disposal
+3 117
+13
+■Thermal Recycling
+To Our
+Stakeholders
+Tons
+■Mechanical Recycling
+WEEE
+Remarketing
+End-of-Life Treatment of Electrical and Electronic Equipment
+In multiple SAP locations, we cooperate with international and/or local IT asset lifecycle partners to
+refurbish, recycle, and dispose our EEE. In late 2020, we started to transform our e-waste reporting.
+Instead of reporting only scrapped e-waste, we began collaborating with our major IT asset lifecycle
+partners to establish a more distinguished (W)EEE reporting that enables us to see more precisely
+what type of end-of-life treatment was applied to our disposed IT assets and devices.
+Waste of electrical and electronic equipment (WEEE, or e-waste) is one of the world's fastest-growing
+waste streams. As a global cloud company running data centers and office buildings across the world
+with a large amount of IT devices in place for our more than 100,000 employees, the ecological
+footprint of our electrical and electronic equipment (EEE) and their end-of-life treatment is a growing
+area of focus for SAP. Thus, the ultimate goal is to give our discarded electronic devices and assets a
+second life through refurbishment and remarketing. If the device is non-repairable or unmarketable,
+the subsequent priority is to recover valuable materials through mechanical recycling.
+Managing Our Discarded Electrical and Electronic Devices
+We believe in SAP's capabilities to help transform the economy into a low-carbon, circular system to
+reach a restorative and regenerative world of zero waste and significantly cleaner oceans by 2030. In
+alignment with SAP's Global Environmental Policy, our waste and water strategy and corresponding
+Company-wide initiatives aim to continuously reduce SAP's impact on the environment by generating
+less waste, reducing water consumption, and enabling our customer to do the same.
+Aspiring to a World of Zero Waste
+Waste and Water
+101
+Additional
+Information
+Combined Group
+Management Report
+Further Information on
+Sustainability
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+298/338
+297/338
+Consolidated Financial
+Statements IFRS
+In 2021, our continuous effort to improve waste segregation and evolve our processes at offices
+across the globe failed to pick up its original speed due to the persisting COVID-19 pandemic, as
+many sites remained closed or opened with major restrictions. Nonetheless, as part of our ISO 14001
+program, SAP introduced the 'Too Good to Go' app in Germany. For a small fee, employees can pick
+up leftover lunches from the cafeterias to fight food waste. At SAP Mexico, the amount of waste
+segregation stations was further expanded, while SAP Philippines implemented systematic
+hazardous-waste management practices.
+We also continue to exclude single-use plastics in our internal procurement processes (such as for
+office supply packaging) as outlined in the Sustainable Procurement section. The established "Choose
+to Reuse" campaign aims to increase visibility and usage of reusable products by encouraging
+employees to take photos of reusable items of their everyday work and share them on social media.
+Thanks to the continuous efforts of our global network of sustainability champions, our Environmental
+Management System (EMS) colleagues, and other internal stakeholders, and their persistent
+engagement of and communication with external suppliers and partners, we overcame our setbacks
+from 2020 caused by the COVID-19 pandemic and, by midyear 2021, had successfully phased out
+nearly all single-use plastics at the Company. The project was operationalized at the end of the
+second quarter 2021 and handed over to the three core lines-of-business in the area of facilities,
+procurement, and events to ensure SAP remains free of single-use plastics going forward.
+Worldwide, SAP locations continued to collaborate with their suppliers and service providers to
+eliminate single-use plastic products such as bottles, cups, stirrers, straws, cutlery, and food
+packaging. For example, we rolled-out a digital reusable food packaging system for takeout, delivery,
+and convenience in all SAP locations with a canteen in Germany, and piloted the first two single-use
+plastic-free cafeteria kiosks at SAP's headquarters in Walldorf. At SAP locations in the United States
+and Canada, meanwhile, "Sustainability on the Go" kits with reusable utensils were distributed among
+the employees. The lessons learned and experiences of such practices will be used to refine the
+concepts and make them suitable for a global rollout.
+To lead by example, SAP continued to execute on its original commitment to phase out single-use
+plastics by the end of 2020 as part of its global environmental policy's goals. The interdisciplinary
+'Beyond Single-Use Plastics' initiative is based on identifying and eliminating single-use plastics and
+introducing more sustainable alternatives based on three principles: reduce waste, reuse items, and
+recycle materials.
+Finding Alternatives to Single-Use Plastics
+SAP also advocates global systems change at scale to accelerate the transition to a circular economy:
+in addition to endorsing meaningful proposals such as calling for the implementation of extended
+producer responsibility schemes for packaging, it enables citizens to find their role and best-fit
+solutions to help solve ocean plastic pollution, through the SHIFT platform developed in close
+collaboration with Emily Penn, ocean advocate and co-founder of the non-profit organization
+eXxpedition.
+Regenerate: Leverage new regenerative business models to accelerate the shift from consumption
+to re-use models, by way of industry cloud innovations from SAP.
+Circulate: Establish responsible sourcing and secondary marketplaces to stimulate an increase in
+value of materials for re-use as well as gain transparency into material flows across global supply
+networks. For instance, the SAP Rural Sourcing Management solution was used to engage waste
+collector communities ethically and responsibly in the first-mile acquisition of waste materials,
+while the GreenToken by SAP solution provides full multitier transparency of raw material flows,
+including co-mingled commodities.
+core busines processes to eliminate waste through the SAP Responsible Design and Production
+solution
+Information
+Additional
+Cutting Down on Further Residual Waste
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+Management Report
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+To support these programs, the GPO established the Procurement with Purpose Ambassador
+Network. This network consists of volunteers within the GPO across the various procurement spend
+categories and regions; its functions include identifying new opportunities to engage with certified
+Driven by our GPO, SAP's supplier diversity and social enterprise programs are an integral part of our
+transformation into a purpose-driven organization. These programs aim to build the capacity of
+diverse and social businesses to provide a fair chance at competing for contracts and are treated
+equally with other SAP suppliers. Utilizing the procurement skills and expertise within the organization,
+our GPO engages in skills-based volunteering to build the capacity of social enterprises in the
+Sustainable Growth of Revenues for International Development (S-GRID) program by the social
+purpose organization MovingWorlds.
+We believe that diverse and sustainable businesses bring significant added value to SAP.
+Establishing an inclusive supplier network – that is, minority enterprises defined by gender, ethnicity,
+disability, sexual orientation, and other characteristics, as well as certified social enterprises that focus
+their company's mission on making social impact - have become a key priority for SAP. We believe
+that our commitment to an inclusive, bias-free culture in our workplace must be mirrored in our
+approach to our supplier base.
+Social Procurement
+diverse suppliers and social enterprises, engaging with their regional procurement teams on current
+and upcoming activities, supporting Environmental Management System (EMS) audits for ISO 14001
+certification, and acting as a multiplier for passing on Procurement with Purpose knowledge, learning,
+and training opportunities to the GPO.
+54%
+27%
+26%
+26%
+20%
+Percent of total spend
+Percent of Suppliers per Region
+11%
+EMEA
+Americas
+APJ
+32%
+As part of its Procurement with Purpose program, SAP was a corporate member of the following
+supplier and social enterprise certification organizations in 2021:
+Supplier Diversity:
+National Minority Supplier Development Council (NMSDC)
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+296/338
+295/338
+As outlined in the Waste and Water section, the GPO is one of the focus areas of the interdisciplinary
+Beyond Single-Use Plastics initiative. From addressing plastic packaging materials, to the items in our
+SAP Ariba catalog, our GPO is engaging with all relevant suppliers to remove single-use plastics from
+their packaging material and their offered product portfolio.
+As part of our Third Party Risk Management (TPRM) program, we have created a Responsible
+Sourcing questionnaire to identify, manage, mitigate, and avoid sustainability risks within our supply
+chain. The risk domains evaluated include: Environmental, Human Rights, Diversity, Equity & Inclusion,
+Social Enterprise, and Health & Safety.
+Improving Sustainability Through Practice
+To ensure that all diverse and social spend is captured, our GPO evaluates its supplier network to
+identify and register all existing certified diverse suppliers and social enterprises. Activities such as this
+and expanding our efforts with the Buy Social Corporate Challenge aim to enable SAP to fulfill our
+pledge and shift our addressable spend to diverse suppliers and social enterprises. With Ariba
+Network, we invite existing suppliers, as well as potential suppliers, to engage more in the area of
+diversity and social enterprises.
+These organizations enable the GPO to identify opportunities to engage with diverse suppliers and
+social enterprises, to support the 5 & 5 by '25 social procurement spend targets. This target is defined
+as 5% addressable spend with diverse suppliers and 5% addressable spend with Social Enterprises
+by year end 2025. As at the end of 2021, we had achieved €200.9 million (3.9%) diverse spend with
+958 diverse suppliers in the United States.
+Social Entrepreneurship Network Germany
+Akina Foundation
+-
+Social Enterprise NL
+Social Traders (Australia)
+Buy Social Canada
+Social Enterprise UK
+-
+Social Enterprise:
+Disability:IN
+WEConnect International
+Information
+Furthermore, we reduced our paper usage by 88% (over 73 million pages) since 2009, despite a
+125.7% increase in employee full-time equivalents over the same period. Initiatives such as the
+continuous global rollout of a secure pull-printing system (about 82,000 registered employees) or the
+implementation of double-sided, black-and-white printouts by default supported this decrease. In
+2021, we also continued our approach of paperless contracting. By using the SAP Signature
+Management application by DocuSign, which enables electronic signatures, we were able to further
+cut down on the printing of paper-based contracts by about 185,600 pages in 2021 (2020: over
+224,000 pages) - considering the same procurement contract types as in 2020. As most employees
+continued to work from home in 2021 due to the pandemic, the printing volume further decreased
+42% (6.9 million pages) compared to 2020.
+Using Water Efficiently
+Climate change affects – and is affected by - global water resources and management. This is why
+we continue to use water as efficiently as possible in our data centers and offices even though our
+operations are not water-intensive. For example, in the data centers of our headquarters, we use
+adiabatic cooling (evaporative cooling) as well as a closed water circuit to minimize water
+consumption for cooling our server racks. In 2021, we set the target to reduce water consumption for
+cooling purposes in our headquarters data centers by at least 1,200 m³ per year (achievement rate
+2021: 100%). At our headquarters and other office locations, we use rain and run-off water for
+irrigation and toilets.
+Business for Social Responsibility
+Breakthrough Energy Ventures
+Advancing Women Executives
+Alliance for Integrity
+Metropolregion Rhein-Neckar
+LEAF Coalition
+Klimabündnis Baden-Württemberg
+JA Worldwide (JA Americas and INJAZ Al-Arab)
+Information Technology Industry Council
+Impact 2030 (founding member)
+Gucci CEO Carbon Neutral Challenge
+Climate Neutral Now
+GlobalGiving
+Federation of German Industries
+European Roundtable for Industry (ERT)
+European Climate Pact Pledge
+EU Green Deal CEO Pledge
+EMF ERP Pledge
+econsense e.V.
+DIGITALEUROPE
+Deloitte Digital
+CEO letter on EU 2030 emissions targets
+Business Call to Action
+Global Alliance for YOUth
+Deutschland sicher im Netz e.V.
+Ellen MacArthur Foundation (EMF)
+ESMIG
+The Female Quotient
+The Climate Pledge
+Society of Corporate Compliance & Ethics
+Social Enterprise World Forum
+Science Based Targets initiative
+RE100
+The Green Web Foundation
+The Conference Board, Inc.
+Terra Carta of the Sustainable Markets Initiative by Prince
+Charles
+Sustainable Markets Initiative
+Social Traders
+Stakeholders
+Schmalenbach-Gesellschaft für Betriebswirtschaft e.V.
+Race to Zero
+Ocean Plastics Leadership Network
+Network for Teaching Entrepreneurship (NFTE)
+National Chambers of Commerce
+Livelihood Funds
+Industrial Internet Consortium
+Global Partnership for Sustainable Development Data
+Global Business Alliance
+European Green Digital Coalition (EGDC)
+European CEO Alliance
+Bitkom e.V.
+Workplace Infrastructure
+ASEAN Foundation
+Accounting Standards Committee of Germany (ASCG)
+To Our
+SAP Integrated Report 2021
+SAP
+2021
+2020
+2019
+2018
+2017
+-26%
+-23%
+Stakeholders
+765
+-3%
+13%
+16%
+1,185
+1,376
+1,332
+Thousand cubic meters
+Global Water Usage
+In 2021, our global water usage further decreased due to the prevailing COVID-19 pandemic and the
+strong reduction in the usage of our offices coupled with our implemented water-reduction measures.
+Based on the Aqueduct Water Risk Atlas of the World Resource Institute, we conducted a water risk
+assessment for our ISO 14001-certified sites. Twenty percent of these sites are located in high to
+extremely high water-risk regions. We address this issue with dedicated water management efforts.
+For instance, in Bangalore, India, we will install a rainwater harvesting system at the beginning of 2022
+to improve water conservation. In Johannesburg, South Africa, smart water meters and a water
+catchment solution were installed to decrease municipal water consumption. In Ra'anana, Israel, we
+implemented a building management system (BMS) to monitor and track consumption, and various
+detectors were installed to limit irrigation on rainy days and to detect water leakages early on.
+988
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Organization
+To better understand and evolve sustainable performance, dialogue, and exchange of knowledge and
+different perspectives on a national, regional, and global level, is vital for SAP, both for our company
+and customers. Hence, SAP subscribes to, commits to, and routinely engages in a range of third-party
+organizations, including:
+and Commitments
+Memberships, Partnerships,
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Stakeholders
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+300/338
+299/338
+In accordance with the SAP Code of Business Conduct (CoBC), SAP does not support any political
+parties. By the laws of the United States, SAP employees exercise their right to operate a political
+action committee (PAC). The SAP America PAC is an independent, registered, and strictly regulated
+organization that allows eligible SAP employees to voluntarily contribute to the SAP America PAC in
+the United States to financially support candidates seeking public office at the state and federal levels.
+Consistent with U.S. laws, SAP exercises no control over or influence on the SAP America PAC.
+SAP America PAC expenditure figures are transparent and accessible through the U.S. Federal
+Election Commission Web site.
+Political Contributions
+SAP believes in transparency in the political process. Accordingly, we are registered in the European
+Transparency Register for interest representatives. In the United States, SAP is registered, and reports
+in compliance with, the federal Lobbying Disclosure Act. We are also registered in other countries,
+where this is required by local law.
+SAP engages with governments around the globe on various policy issues as well as on creating
+reasonable framework conditions for the adoption of new beneficial technologies or business models
+such as cloud computing, the Internet of Things, and Big Data.
+SAP has developed trusting and transparent relationships with governments worldwide by
+cooperatively exploring the potential for information and communications technologies to spur
+economic growth, create jobs, and address societal challenges. This includes consideration of the role
+governments play as consumers as well as policy makers, and by supporting the digital
+transformation of the public sector to become more efficient, effective, and citizen oriented.
+Public Policy
+Additional
+Information
+Further Information on
+Sustainability
+Alliance for Development and Climate
+Professional Services
+Social Enterprise UK
+Further Information on
+Sustainability
+angles: Workplace Infrastructure (example: reduce single-use plastics packaging and packaging
+material), Professional Services (example: CO2-reduced mobility concepts, electronic contracts),
+Marketing & Travel (example: sustainable merchandise and events), IT Infrastructure (example:
+sustainable cooling of data centers), and Car Fleet (example: sustainable mobility concepts).
+Suppliers by Category (Tier 1)
+Percent of total spend
+Car Fleet
+4%
+IT Infrastructure
+Marketing & Travel
+Sustainable Procurement
+Additional
+Information
+Consolidated Financial
+Statements IFRS
+Management Report
+Stakeholders
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+292/338
+Information
+SAP and SDG 17, SAP and UNICEF, SAP Founding Member of Value Balancing Alliance, SDG Ambition, SAP joins the Ellen
+MacArthur Foundation, WEF Global Plastic Action Partnership, SAP Is Innovation Partner in WBSCD's Value Chain Carbon
+Transparency Pathfinder, SAP joins the Global Alliance for YOUth
+Additional
+Management Report
+Governance
+SAP's GPO is led by our chief procurement officer (CPO). Reporting to our CPO are the heads of our
+procurement categories (1) Car Fleet, (2) IT Infrastructure, (3) Marketing & Travel, (4) Professional
+Services, and (5) Workplace Infrastructure and their teams. 28
+Also reporting to the CPO, the chief operating officer (COO) is responsible for enabling processes and
+governance within the GPO.
+Our CPO and chief sustainability officer meet each quarter to discuss the progress and challenges
+related to embedding sustainability in our procurement practices.
+Upholding High Standards Across Our Supply Chain
+SAP's supplier code of conduct (SCOC) is included in our standard supplier contracts and is an
+essential part of our supplier registration. This supplier registration ensures that potential suppliers of
+SAP are aware of SAP's SCoC. We review and update our SCoC regularly to maintain high standards
+within our supplier network. This strengthens the code's enforceability and sends a clear message
+about its importance for SAP.
+In addition to requirements for sustainable packaging (such as plastic-free, appropriately sized boxes),
+our SCoC contains provisions on the Modern Slavery Act and diversity and inclusion, as well as a
+labor standards chapter that expressly refers to human rights. Furthermore, we recommend to SAP
+suppliers that they deliver goods and services that are accessible to everyone, including people with
+disabilities.
+In early 2022, the GPO will implement the Procurement with Purpose supplier qualification process.
+This process will capture information pertaining to the performance of our suppliers in three focus
+areas: Social & Inclusive Supply Chain, Environmental Supply Chain, and Human Rights in Value
+Chain. This data will enable the GPO to make an informed supplier selection based on environmental
+and social performance.
+What We Buy and Where We Buy It From
+We consider our suppliers to be key partners in our business success. In 2021, we spent
+approximately €5.3 billion in purchases from more than 15,000 suppliers worldwide
+(2020: approximately €5.1 billion from more than 14,700 suppliers worldwide). Within our five
+categories and our Sourcing Excellence Champions unit, we approach sustainability from different
+28 Car Fleet includes procurement relating to the global Company car fleet. IT Infrastructure procures products and services for SAP's
+cloud business such as network services and data center and co-location goods and services. Marketing & Travel supports topics related
+to SAP's marketing, events, merchandise, and business travel areas. Professional Services includes application and development services
+as well as financial and legal services. Workplace Infrastructure includes procurement for areas such as facility services, client services,
+and equipment, communication, and collaboration services. Sourcing Excellence Champions are responsible for the seamless execution of
+procurement and sourcing activities and are drivers for customer satisfaction and end user success.
+293/338
+294/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+A significant part of our social and environmental impact is delivered through our supply chain.
+Eliminating single-use plastics, decreasing carbon emissions, reducing oversized packages, and close
+collaboration with our supplier network are factors that contribute to a sustainable supply chain.
+Our Global Procurement Organization (GPO) aims to transform into an even more purpose-driven
+organization consistent with diversity and social enterprises. That is why we established the
+overarching Procurement with Purpose strategy, which promotes purpose-driven programs such as
+diversity and social inclusion and responsible resource usage.
+Employees and Social Investment, Memberships, Partnerships, and Commitments
+For more information, see the section
+Our Policies and Selected
+Activities and Programs to
+Enhance Positive Impacts and
+Mitigate Negative Impacts
+Our KPIs and Targets
+Increase customers' energy consumption through use of
+software
+climate-change relevant parameters and help
+understand and minimize the climate footprint of a
+company's products, operations, and services
+-
++ Enable holistic operational steering by integrating
++ Contribute to climate change mitigation and strengthen
+resilience and adaptive capacity to climate-related
+hazards and natural disasters of our customers
+Indirect:
+Where You Can Find More
+Information in the SAP
+Integrated Report and Other
+Sources
+Emit greenhouse gases
++
+Direct:
+SDG 13 Climate Action
+Our Potential Direct and
+Indirect Impact
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Assume responsibility for products in use-related
+emissions by running customer applications in the SAP
+green cloud
+Memberships, Partnerships, and Commitments
+Become carbon neutral by 2023
+Global Environmental Policy; Report and reduce CO2
+emissions and energy consumption; Procure 100%
+renewable electricity; Carbon impact relevance for
+Executive Board compensation
+Where You Can Find More
+Information in the SAP
+Integrated Report and Other
+Sources
+Enhance Positive Impacts and
+Mitigate Negative Impacts
+Activities and Programs to
+NA
+Build capacity throughout our broader ecosystem
++
+Direct:
+SDG 17 Partnerships for the Goals
+Direct:
+Our Policies and Selected
+Indirect Impact
+Our Potential Direct and
+Environmental Policy, SAP and SDG 13, Climate Action, Climate Change: What SAP Is Doing, SAP sets 1.5°C science-based
+emissions reduction targets aligned with a net-zero future, SAP's investment in Livelihoods Carbon Funds, SAP joins 1t.org
+with a pledge to plant 21 million trees, Climate 21, SAP Product Carbon Footprint Management, SAP Concur Sustainable
+Travel
+Green Cloud; Business ambition for 1.5°C; Climate 21
+program; SAP Product Carbon Footprint Management;
+SAP Landscape Management Cloud; SAP Transportation
+Management; Concur Travel, and TripIT
+Indirect:
+Energy and Emissions, Compensation Report
+Our KPIs and Targets
+Making Our Supply Chain More Sustainable
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+2021 by multiplying the four key contributors to our previous year's upstream emissions with the year-
+over-year change of operating expenses between 2020 and 2021.
+Scope 3
+Combined Group
+Refrigerants in Corporate Cars: HFC emissions caused by air conditioning devices in company
+cars. Refrigerant emissions are based on an estimate of HFC1234yf emissions per car (in Europe)
+and HFC134a emissions per car (for the rest of the world) and are extrapolated based on the
+number of corporate cars reported (100% data coverage).
+Mobile Combustion in Corporate Jets: Emissions caused by business trips with SAP-owned or
+chartered jets. Emission calculation for SAP's own jets is based on actual fuel consumption (100%
+data coverage).
+Scope 2
+Refers to indirect carbon emissions and is defined as emissions from the consumption of purchased
+electricity, steam, or other sources of energy generated upstream from the organization. To determine
+SAP's global net emissions, we use the location-based method to calculate the Scope 2 emissions.
+Additionally, we disclose our market-based Scope 2 emissions in the interactive chart generator. At
+SAP, the following emission categories are covered by Scope 2:
+Electricity in Office Buildings: Emissions caused by the consumption of purchased electricity in
+office buildings. Calculation of emissions is based on building electricity consumption. Country-
+specific emission factors are updated annually. Where no measured data is available, stable values
+(kWh/m²) based on the previous year's energy consumption data are used for extrapolation (75%
+data coverage).
+Electricity in Data Centers: Emissions caused by the consumption of purchased electricity in
+SAP-owned and operated data centers. The calculation of emissions is based on data center
+electricity consumption (100% data coverage). CO2e conversion factors are updated annually
+based on country-specific grid factors.
+Purchased Chilled and Hot Water and Steam: Emissions caused by the consumption of
+purchased heat or steam in office buildings (district heating). Calculation of emissions is based on
+consumption of district heating. Emission factors are updated annually. Where no measured data is
+available, stable values (kWh/m²) based on the previous year's energy consumption data are used
+for extrapolation (38% data coverage).
+Downstream
+Refers to other indirect carbon emissions and is defined as emissions that are a consequence of
+operations of an organization, but are not directly owned or controlled by the organization. Scope 3
+emissions are divided into upstream and downstream emissions.
+Upstream
+Only selected upstream emissions are measured directly and hence included in our corporate carbon
+target. The following upstream Scope 3 carbon emissions are included in our target:
+Business Flights: Emissions caused by business trips by airplane. Calculation of emissions is
+based on actual distance travelled and actual costs spent (79% data coverage). This data is used
+307/338
+308/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Stakeholders
+To Our
+SAP
+SAP Integrated Report 2021
+- Logistics: Newly established category which consists of the following three emission sources: 1)
+Emissions caused by mail and parcel, 2) Emissions caused by the consumption of paper, and 3)
+Emissions caused by our customers downloading software data from our servers (originally a
+downstream emissions category). Due to their insignificant emissions impact, calculation is done
+based on an average factor 'carbon emissions per FTE.' This factor has been determined based on
+the emissions data of each category of the previous three years (0% data coverage).
+Each year, we measure the following additional upstream Scope 3 carbon emissions based on the
+GHG Protocol's Corporate Value Chain (Scope 3) Accounting and Reporting Standard: Purchased
+Goods and Services, Capital Goods, Waste Generated and Water Consumed in Operations, Other
+Fuel- and Energy-Related Activities. These emission categories are not included in our carbon neutral
+target but our science-based target. The emissions calculation is based on an estimate. Due to the
+link of our upstream emissions to operating expenses, we extrapolated these upstream figures for
+Electricity Consumed by Hyperscale Services: Emissions caused by the consumption of
+purchased electricity resulting from the usage of hyperscale services in providers' hyperscale data
+centers. Hyperscale data centers enable massive, efficient, and robust scalability of computing,
+system, and server architecture in order to respond to the increasing demand for cloud computing
+and Big Data solutions. Electricity consumption is calculated based on the total allocated server
+memory size (RAM) of all hyperscale services. A power conversion factor is used to convert the
+allocated RAM value into a server power value, and an average PUE factor is used to extrapolate
+the total hyperscale service electricity (100% data coverage).
+Management Report
+Electricity in External Data Centers: Emissions caused by the consumption of purchased
+electricity in data centers not operated by SAP. An external data center (co-location) is a local
+computing center with server units running SAP software that is operated by an external partner.
+CO2e conversion factors are updated annually based on country-specific grid factors. Electricity
+consumption for external data centers is extrapolated based on the consumed data center
+capacity and a power usage effectiveness (PUE) factor. Where no data is available, average factors
+are applied (78% data coverage).
+to determine an average emission factor per euro spent based on short, medium, and long-haul
+flight emission factors. For CO2 calculation, this factor is applied to actual controlling costs for
+business flights. Emission factors for business flights do not consider the radiative forcing factors.
+Rental Cars: Emissions caused by business trips by rental car. An average emission factor from
+rental cars is calculated based on actual distance traveled and actual costs spent (90% data
+coverage). This average emission factor is used for extrapolation based on the controlling costs.
+Train Travel: Emissions from business trips by train. An average emission factor from train travel is
+calculated based on actual distance traveled and actual costs spent (24% data coverage). This
+average factor is used for extrapolation based on the controlling costs. In Germany, business trips
+by train are considered carbon neutral as they are compensated with 100% green electricity by
+Deutsche Bahn.
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Business Trips with Private Cars: Emissions from business trips with employee-owned cars and
+company cars without fuel card. Carbon calculation is based on distance traveled with car (100%
+data coverage). Company car trips with fuel cards are excluded from this activity type.
+Employee Commuting: Emissions caused by commuting between home and work at an SAP
+office location. Considered are all modes of transport, excluding commuters with corporate cars.
+An SAP-global, system-integrated commuting survey about the distance to work and the mode of
+transport is conducted to collect relevant data. However, due to the COVID-19 pandemic, no new
+commuting survey has been conducted since 2018. Approximately 28,000 employees responded
+to the 2018 survey. These responses are the basis for carbon calculation of employee commuting
+in 2021. Commuting data for non-responding employees and quarterly updates are extrapolated
+based on the number of FTEs excluding those employees who own a company car (24% data
+coverage).
+In previous years, the only downstream emission category included in SAP's carbon neutral target was
+"Data Download.” In 2021, this KPI was incorporated into the newly created upstream Scope 3
+category "Logistics" as described above.
+Mobile combustion in corporate jets
+The annual energy need per year is determined using a landscape simulation. It is extrapolated
+globally based on the number of productive installations and PUE. We use a PUE factor of 1.55, which
+is the average PUE of our external data centers. Emissions are calculated using a global electricity
+emission factor. Due to the special characteristics of software products, we chose an assessment of
+resource need per year. This deviates from the minimum boundaries as defined by the GHG Protocol's
+Corporate Value Chain (Scope 3) Accounting and Reporting Standard, which requires assessment
+and disclosure of "direct use-phase emissions of sold products over their expected lifetime." The
+calculation covers all of our major solutions, including on-premise software. Cloud solutions are not
+included, as they are part of internal, external, and hyperscale data center electricity emissions.
+Mobile solutions (for example, SAP apps running on customer IT equipment) are also not included.
+Calculation parameters will be adapted when significant technology changes occur.
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Scope 3
+Upstream Emission Categories
+Business travel (train, plane, rental car, private car)
+Employee commuting
+Electricity in external data centers and hyperscalers
+Logistics
+Purchased Goods and Services 30
+Capital Goods 30
+Waste Generated and Water Consumed in Operations 30
+Other Fuel- and Energy-Related Activities²
+Downstream Emission Categories
+Use of sold products 30
+Error Correction
+31 In 2021, we achieved an EAC market boundary alignment of 87% based on the criteria of RE100 and GHG Protocol Scope 2 Guidance.
+30 Not included in SAP's carbon neutral target but in SAP's science-based target.
+In addition, all of our purchased renewable electricity is EKO energy-certified, a high-quality,
+internationally recognized not-for-profit ecolabel for renewable energy installations that fulfill
+additional sustainability criteria. Through the purchase of EKOenergy-certified electricity, we also
+contribute to EKOenergy's Climate Fund, which finances solar projects tackling energy poverty.
+To calculate the carbon reductions of the EACS, the amount of purchased electricity is multiplied by
+the country-specific carbon factor derived from the location where the renewable electricity was
+Accounting: SAP uses the country-specific emissions factor to calculate the carbon reduction
+achieved by the EACs. EACS are considered independently to the electricity achieved through their
+procurement. SAP aims to consider the latest guidelines on EAC market boundaries.31
+Vintage: The renewable electricity must be produced in the same year or the year preceding the
+reporting period to which it will be applied.
+Combined Group
+Installation: The power plant producing the renewable electricity shall not be older than 10 years.
+In case of a renovation of an old power plant, the 10-year rule applies only to the additional
+electricity output due to efficiency increase. Furthermore, SAP does not consider EACs from
+government supported power plants.
+As recommended by the Greenhouse Gas Protocol and CDP, we actively look for the best available
+quality and standards, which support renewable electricity projects that meet robust criteria in terms
+of environmental integrity, stakeholder inclusivity, and reporting and verification. We have developed a
+quality standard that defines key criteria for the procurement of EACs to drive change in the electricity
+market and to avoid the risk caused by low-quality products. The key characteristics of our renewable
+electricity purchasing guidelines are as follows:
+We define renewable electricity as electricity coming from renewable electricity sources such as wind,
+solar, hydro, and geothermal. The amount of renewable electricity used by SAP is calculated by
+adding the amounts of renewable electricity produced onsite by our own solar cells and covered by
+EACs.
+Renewable Electricity
+SAP uses external reductions, such as purchases of EACS and certified voluntary "offsets," to achieve
+its carbon neutral target. Emission reductions are subtracted from gross Scope 1 to Scope 3 emissions
+to achieve a net carbon inventory.
+External Reductions
+(Data Download - incorporated in "Logistics")
+Type of Renewable Electricity: SAP only considers solar and wind for renewable electricity
+sourcing.
+Stakeholders
+To Our
+SAP Integrated Report 2021
+Downstream
+Scope 3
+1%
+1%
+L
+1,475 kt CO₂e
+84%
+14%
+Scope 2
+Scope 1
+Scope 3
+SAP's 2021 Gross Carbon Emissions Along the Value Chain
+The following Scope 3 emissions sources are not applicable to SAP's business operations: Upstream
+Leased Assets, Processing of Sold Products, End-of-Life Treatment of Sold Products, Downstream
+Leased Assets, Franchises, and Investments.
+Excluded Scope 3 Emissions
+Upstream
+Use of Sold Products: The vast majority of our overall emissions stem from the use of our software
+(customers running SAP solutions on their hardware and premises). Due to our lack of control over
+our customers' IT landscapes, these emissions are not included in our carbon neutral target.
+Nonetheless, we have been calculating the emissions for indicative purposes for many years and take
+them into account for our science-based target.
+96 kt CO₂e 112 kt CO₂e
+Relevant for SAP's Carbon Neutral Target
+SAP
+310/338
+309/338
+Indirect energy in buildings (chilled / hot water, steam)
+Electricity in own buildings and data centers
+Emission Categories
+345 kt CO₂e
+Scope 2
+Mobile combustion and refrigerants in corporate cars
+Stationary combustion and refrigerants in buildings
+Emission Categories
+Scope 1
+10,269 kilotons (kt) CO₂e
+Relevant for SAP's Science-Based Target
+8,586 kt CO₂e
+Mobile Combustion in Corporate Cars: Emissions from fuel combustion of company cars. In the
+context of carbon reporting, the term company car refers to all cars for which SAP permanently
+covers the fuel costs. Emission calculation is based on fuel consumption. In 2021, 29 countries
+reported actual fuel data (93% data coverage); for other countries, stable values (liters/car) are
+used for extrapolation based on the number of corporate cars reported. The stable values for
+extrapolation are based on the previous year's carbon emissions data.
+Refrigerants in Facilities: HFC emissions caused by the use of refrigeration and air conditioning
+equipment. The emissions are extrapolated based on the number of server units in data centers
+and office space with an air conditioning (A/C) system (100% data coverage). All refrigerants are
+assumed to be HFC134a.
+We aim to continuously refine SAP's emissions calculation methodology and to increase the usage of
+measured instead of extrapolated input data. Methodology changes include changes in the source of
+activity data, additional new activity types, changes in emission factors, and changes in the
+methodology used to calculate carbon emissions. As we implemented our methodology approaches
+to the best of our current knowledge and ability, and consider such changes to be continuous desired
+progress, methodology changes will not lead to retrospective data adjustments. Hence, changes will
+be applied from the current year onward. The current year's methodology changes are made
+transparent in this chapter, particularly under Methodology and Further Details.
+Information
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+SAP
+Information
+Business Health Culture Index
+The Business Health Culture Index (BHCI) is an indicator of the extent to which SAP successfully
+offers employees a working environment that promotes health supporting their long-term
+employability and their active engagement in reaching our corporate goals. The index covers
+questions concerning how employees rate their personal well-being and the working conditions at
+SAP, including our leadership culture.
+The BHCI is calculated based on the results of our "#Unfiltered" program (April 2021 survey).
+29 Eligible are all headcount-relevant employees (permanent contracts) and employees from acquired companies if their acquisition status
+allows for it. In Germany, additional non-headcount-relevant employees are eligible (temporary staff with tenure of more than six months,
+employees on long-term leave or parental leave, PhD students, and vocational trainees).
+303/338
+304/338
+SAP
+October, 70,386 participated (response rate: 68%). All employees were invited to take part in the 2021
+#Unfiltered survey cycle.29
+SAP Integrated Report 2021
+SAP Integrated Report 2021
+We define employee engagement as an index score of five items measuring the satisfaction and
+commitment of our employees, how proud they are of our company, and how strongly they identify
+with SAP.
+Information
+Non-Financial Notes:
+Social Performance
+General Information About Social Indicators
+Boundaries
+Our reporting takes two different perspectives into account: SAP as a company, which includes all our
+legal entities and operations and supply chain, and SAP as a solution provider enabling our
+customers. These boundaries are listed in detail in the GRI Standard Content Index.
+Social Indicators
+It is calculated based on the average of the scores retrieved in each of the surveys we run for our
+engagement survey program “#Unfiltered.” Adopting the Experience Management (XM) philosophy of
+Qualtrics, we changed our engagement survey concept to a continuous listening approach that
+includes multiple data collections throughout the year. The overall program focuses on measuring the
+key people outcome indices Employee Engagement and Leadership Trust, as well as the
+organizational and team factors derived from the strategy that impact engagement. In the #Unfiltered
+survey in April, 73,598 employees participated (response rate: 72%), and in the #Unfiltered survey in
+Data for our social indicators is collected and reported on a quarterly or annual basis and is audited at
+a reasonable assurance level.
+We define employee retention as the ratio of the average number of employees minus the employees
+who voluntarily departed, to the average number of employees, taking into account the past 12
+months (in full-time equivalents, or FTEs). This ratio puts emphasis on employee-initiated turnover - in
+other words, we seek to measure how many employees choose to stay with SAP. As opposed to
+keeping a low turnover rate, we aim to keep our retention rate high. The number of voluntarily
+departed employees excludes the voluntary part of restructuring-related departures for more
+transparency and precise headcount management purposes.
+Women in Management
+We define "women in management" as the share of women in management positions as compared to
+the total number of managers, expressed by the number of individuals and not FTEs.
+Managers managing teams: Refers to managing teams of at least one employee or vacant
+positions.
+Managers managing managers: Refers to managing managers who manage teams.
+Board members
+Employee Engagement
+Employee Retention
+To Our
+Combined Group
+Stakeholders
+Additional
+Information
+Carbon Emissions
+Definition
+We define the gross carbon emissions as the sum of all greenhouse gas emissions, measured and
+reported as CO₂e, while net carbon emissions include the compensation with renewable electricity
+and carbon offsets (see External Reductions).
+Reporting Principles
+SAP's preparation of the carbon emissions is based on the Corporate Accounting and Reporting
+Standard, the GHG (Greenhouse Gas) Protocol Scope 2 Guidance, and the Corporate Value Chain
+(Scope 3) Accounting and Reporting Standard of the World Resources Institute/World Business
+Council for Sustainable Development. This approach conforms to the requirements of GRI Standard
+indicators 305-1, 305-2, and 305-3.
+Further Information on
+Sustainability
+In alignment with the GHG Protocol Scope 2 Guidance, we report our net carbon emissions based on
+the two different calculation approaches: the classic location-based method and the market-based
+method.
+SAP defines its organizational boundaries by applying the operational control approach as set out in
+the GHG Protocol.
+Operational control is established when SAP has the full authority to introduce and implement its
+operating policies. The emissions of all operations over which the company has operational control
+and all owned, leased facilities, co-location data centers, and vehicles that the company occupies or
+operates are accounted for in the carbon emissions. They are based either on measurements or,
+where no measured data is available, on estimations and extrapolations.
+A portion of SAP's leased facilities operates under full-service or multitenant leases, where SAP does
+not have access to actual energy consumption information. SAP includes these facilities in our
+definition of operational control and accounts for them by estimating related energy consumption.
+To support the growing demand for SAP's cloud offerings, we subcontract computation power in local
+third-party data centers. Carbon emissions are approximated and included based on the consumed or
+extrapolated computation power.
+In most instances, however, SAP has 100% ownership of its subsidiaries. Accordingly, the difference
+between applying the control versus the equity approach is about 0.8% based on SAP revenue. If
+investments in associates were included, the difference would be even smaller, about 0.6%.
+Data Consistency
+impact of burning wood pellets as 'outside of scopes' carbon emissions. In 2021, these emissions
+accounted for 0.375 kilotons of carbon emissions.
+Methodology Change
+Organizational Boundaries
+Consolidated Financial
+Statements IFRS
+Management Report
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Non-Financial Notes:
+Environmental Performance
+We understand environmental performance as the measurable outcome of SAP's ability to meet
+environmental objectives and targets set forth in our environmental policy. In this context, we
+determine SAP's greenhouse gas footprint (in the following called carbon emissions), total energy
+consumed, and data center electricity as the three key environmental performance indicators.
+Furthermore, we realize external reductions through self-generated renewable electricity and by
+purchasing offsets and Energy Attribute Certificates (EACs). Plus, we identify water consumption and
+the end-of-life treatment of SAP's electrical and electronic equipment as additional environmental
+aspects.
+By looking at the energy usage and emissions throughout our entire value chain, we gain insights to
+help us manage our environmental performance and, in turn, help our customers to do the same.
+Our gross carbon emissions for 2021 were 345 kilotons of CO2 equivalents (CO2e) (2020: 410 kilotons
+CO2e), including all carbon emission categories of Scope 1 and 2, as well as selected categories of
+Scope 3 relevant for our carbon neutral target as described in Methodology and Further Details
+below. Our net carbon emissions (110 kilotons in 2021) are calculated by deducting purchased EACS,
+self-generated renewable electricity, and carbon offsets from our gross carbon emissions in the
+respective reporting period.
+General Information
+We consider the principle of Sustainability Context (the performance of the organization in the context
+of the limits and demands placed on environmental or social resources at the sectoral, local, regional,
+or global level) in a number of ways, such as by looking at global issues or trends including climate
+change and demographic shifts. For example, we assess our carbon emissions in the context of the
+emissions of the entire information and communications technology landscape, with particular focus
+on the abatement potential of the industry. When it comes to completeness, we recognize that while
+we comply with this principle in reporting on our own operations, we are still developing
+methodologies to reliably quantify our impact through our solutions.
+Our reporting takes two different perspectives into account: SAP as a company, which includes all our
+legal entities and operations and supply chain, and SAP as a solution provider enabling our
+customers. These boundaries are listed in the Content Index of the Global Reporting Initiative (GRI).
+Reporting Approach
+Data for our environmental indicators is collected and reported on a quarterly basis and is subject to
+external assurance for annual reporting.
+Reporting on total energy consumed and data center electricity is based on the data collected for the
+calculation of our carbon emissions. All numbers are based on the metric system. Whenever we state
+"tons," we mean metric tons.
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Additional
+Further Information on
+Sustainability
+Boundaries
+Management Report
+Stakeholders
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+306/338
+305/338
+If a significant error is found in the current year that has an impact on the preceding year's emissions,
+it will be corrected not only in the current year but also retrospectively. An error is significant if it
+affects SAP's gross carbon footprint by more than 5%. No restatement due to an error correction of
+historical data was necessary in 2021.
+SAP
+Consolidated Financial
+Statements IFRS
+SAP Integrated Report 2021
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Organization
+Together with Nature Principles for Nature-Based Solutions
+TRACE International
+To Our
+Further Information on
+Sustainability
+Additional
+Information
+Structural Changes
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Additional
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+Stationary Combustion in Facilities: Emissions caused by oil or gas combustion of heating
+systems and generators in SAP office buildings and data centers. Emission calculation is based on
+gas and oil consumption in kWh. Where no measured data is available, stable values (kWh/m²)
+based on the previous year's stationary combustion consumption data are used for extrapolation
+(78% data coverage). In cases where no specific information is available, natural gas reported by
+local sites is assumed to be reported in Lower Heating Value. Besides gas and oil, we also began
+using wood pellets to produce thermal heat for our buildings. The Scope 1 emissions of wood
+pellets can be set to net '0', since the wood itself absorbs an equivalent amount of carbon
+emissions during the growth phase as the amount of emissions released through combustion. Still,
+to ensure complete accounting for all emissions caused, we document the direct carbon dioxide
+Refers to direct carbon emissions and is defined as emissions from sources that are owned or
+controlled by the organization. At SAP, the following areas are covered by Scope 1:
+Scope 1
+Below you will find the different parameters contributing to our carbon emissions. We use "carbon
+emissions" as the common term for greenhouse gas emissions or CO2e. Data coverage refers to the
+share of measured data (compared to extrapolated data) that is the basis for emissions calculation,
+such as kWh for electricity emissions or liters of fuel for corporate car emissions.
+Methodology and Further Details
+Due to office closures and travel restrictions during the COVID-19 pandemic, the 2021 extrapolation
+factors for the following emission categories were reduced by a factor considering the ratio between
+limited and business-as-usual operations: stationary combustion in facilities, refrigerants in facilities
+and corporate cars, mobile combustion in corporate cars, electricity in office buildings, purchased
+chilled and hot water, steam, and employee commuting.
+Where relevant, our conversion factors consider CO2e for greenhouse gases. Global Warming
+Potential factors are based on the Fifth Assessment Report of the Intergovernmental Panel on Climate
+Change (IPCC). We report all our carbon emissions in CO2 equivalents including the impact from CH4
+and N2O in our target-relevant Scope 1, Scope 2, and Scope 3. The emission impact of refrigerants
+includes hydrofluorocarbons (HFCs) only. As SF6 and PFCs mainly occur in chemical processes, they
+are not relevant for us. Since 2016, we annually review all our emissions and extrapolation factors and
+update them if required.
+The calculation of the carbon emissions is based on factors for conversion and extrapolation,
+provided by IEA, US EPA, UK DEFRA, Environment Canada, and GHG Protocol. SAP also uses
+extrapolation factors based on own reported data (of previous quarters) to determine an average
+consumption value per base unit (such as corporate cars: liters of fuel per car; facility: electricity
+consumption per m²).
+We annually measure the cumulative cost avoidance of our carbon emissions, compared to a
+business-as-usual scenario. Since 2015, our calculation approach uses a triennial rolling method.
+Conversion Factors
+Financial Impact of Sustainability Measures
+For other types of structural or organizational changes, we use a significance threshold of 5% of total
+current-year emissions. A structural or organizational change that increases or decreases the total
+carbon inventory by 5% or more will trigger an adjustment of past years. A structural or organizational
+change that increases or decreases the total inventory by less than 5% will be considered insignificant
+and thus no adjustment will be made.
+A structural change due to company acquisitions will be considered in our emission calculations by
+extrapolating the company's emissions based on FTEs for relevant emission categories.
+United Nations Global Compact (since 2000)
+UNICEF
+Management Report
+We Are Family Foundation
+World Bank: "Put a Price on Carbon" statement
+World Economic Forum (WEF)
+Topolytics
+Transparency International Germany
+Combined Group
+Unternehmen für ein leistungsfähiges Klimapaket
+Verband Deutscher Maschinen- und Anlagenbau e. V.
+(VDMA)
+WEConnect International
+WEF Commitment to Stakeholder Capitalism Metrics
+WEF Global Plastic Action Partnership
+Wirtschaft macht Klimaschutz
+WEF Stakeholder Capitalism Coalition
+World Business Council for Sustainable Development
+(WBCSD)
+WWF OneSource Coalition
+QAudit Scope
+The content of this section was not subject to the independent limited assurance engagement of our
+external auditor.
+301/338
+302/338
+SAP
+SAP Integrated Report 2021
+Value Balancing Alliance e.V. (founding member)
+To Our
+"We Mean Business" Letter to G20 Leaders
+Women in Data Science (WDS)
+"We Mean Business" coalition
+UN Global Compact SDG Ambition
+WEF 1t.org
+Stakeholders
+WEF CEO Climate Leaders
+WEF Global Battery Alliance
+Financial Calendar and Addresses
+102-53
+UN SDGS
+Annual Reporting Cycle
+102-52
+102-51
+About This Report
+102-50
+Materiality
+Non-Financial Notes
+102-49
+Consolidated Financial
+Statements IFRS
+March 4, 2021
+External
+Assurance
+About This Report
+Boundaries
+102-55
+GRI Content Index
+102-56
+About This Report
+Independent Assurance Report
+Topic-Specific Disclosures
+Ethics and Compliance
+Further Information on
+Sustainability
+Additional
+Information
+External
+Assurance
+UN GC
+Principles
+✓
+✓
+✓
+Links, Content, and Omissions
+102-54
+Combined Group
+Management Report
+10
+To Our
+Customers
+Products, Research & Development, and Services
+Report by the Supervisory Board
+Note (G.9) Scope of Consolidation, Subsidiaries and Other Equity Investments
+All entities are covered by the report.
+102-46
+About This Report
+102-45
+102-47
+Materiality
+Non-Financial Notes
+Materiality
+External
+Assurance
+6
+UN GC
+Principles
+314/338
+Stakeholders
+Employees and Social Investments
+Stakeholder Engagement
+SAP Integrated Report 2021
+Non-Financial Notes
+Materiality
+Links and Content
+SAP
+102-48
+1
+✓
+✓
+✓
+7
+UN GC
+Principles
+Human Rights and Labor Standards
+102-44
+✓
+Business Conduct
+Stakeholders
+GRI Content Index
+UN GC
+Principles
+Business Conduct
+UN SDGS
+External
+Assurance
+Boundaries
+Energy
+SAP
+Environmental Matters
+419-1
+As a German company, we report our tax expense separately for
+Germany and the rest of the world. We are confident that this
+information meets our stakeholders' demands.
+Links, Content, and Omissions
+Additional
+Information
+Sustainability
+Statements IFRS
+Note (G.3) Other Litigation, Claims, and Legal Contingencies
+Combined Group
+Management Report
+✓
+Links, Content, and Omissions
+Energy and Emissions
+302-1
+Energy and Emissions
+Sustainability Management
+103-3
+Sustainability Management
+Energy and Emissions
+16, 17
+103-2
+Energy and Emissions
+103-1
+UN GC
+Principles
+UN SDGS
+External
+Assurance
+Boundaries
+GRI Content Index
+Consolidated Financial Further Information on
+To Our
+SAP Integrated Report 2021
+SAP's Global Tax Principles
+207-1
+Note (G.3) Other Litigation, Claims, and Legal Contingencies
+206-1
+In alignment with the different legal requirements in various countries,
+and as per SAP Global Risk Management Policy and supporting
+processes, SAP, together with legal advisory services as deemed
+appropriate, perform risk assessments globally. These include cross-
+business topics and the evaluation of risks related to compliance,
+bribery, and corruption. Overall, our corporate risk assessments focus
+on compliance topics. In addition, 45% of all audits concluded in
+2021 under the risk-based audit plan are compliance-relevant audits.
+As part of this process, a regular and dedicated focus is also placed
+on identifying high-risk countries to identify deep dive reviews and
+necessary mitigations accompanied by regular monitoring.
+Furthermore, ad hoc audits are performed if there are grounds of
+suspicion. This regular auditing is a vital component of ensuring
+compliance worldwide in our business processes and identifying
+weaknesses or non-compliance to derive adequate measures.
+Given the holistic approach of our compliance risk assessment, SAP
+does not report on the number of audits solely related to corruption.
+Risk Management and Risks
+207-2
+Business Conduct
+SAP's Global Tax Principles
+Business Conduct
+SAP's Global Tax Principles
+Business Conduct
+103-3
+103-2
+205-1
+SAP's Global Tax Principles
+207-3
+SAP's Global Tax Principles
+SAP
+207-4
+315/338
+9, 11, 16
+SAP
+9, 11, 16
+SAP
+9, 11, 16
+SAP
+16, 17
+SAP
+10
+16
+SAP
+10
+103-1
+Stakeholder Engagement
+102-1
+Human Rights and Labor Standards
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+Some of our SAP locations collaborate with local providers in addition to our large IT remarketing and
+recycling partners – or even exclusively. To supplement our EEE / WEEE reporting in the Waste and
+Water section, we collect local providers' e-waste data from all locations that are in scope of our
+environmental management system. The remaining data of locations not covered is extrapolated
+based on full-time equivalents. Consequently, 16 tons of WEEE was collected in 2021 on top of our
+WEEE reported in the Waste and Water section. In total, 133 tons of WEEE was collected in 2021
+(98% data coverage).
+Data is based on the weight of the devices. As remarketed EEE is reported in items (and not in
+weight), the IT asset lifecycle partners use average item weights to determine the remarketing weight.
+To determine the share of end-of-life treatment practices (remarketing vs. mechanical vs. thermal
+recycling vs. landfill), our key IT asset lifecycle partners aim to use the specific quotas of the recycling
+sites. If this data is not available, regional quotas or other available country quotas are used for
+approximation.
+Stakeholders
+Landfill: Disposing waste on a landfill site; this treatment option has to be avoided under all
+circumstances.
+Mechanical recycling (secondary priority): Extracting raw materials to preserve and reuse them
+(such as plastics, metals, and rare earths)
+Within the WEEE stream, we distinguish between the following processing treatments:
+2. Waste: By waste of electrical and electronic equipment (WEEE) or e-waste, we mean any electric
+devices and assets discarded in our offices and data centers that cannot be refurbished or
+remarketed due to outdatedness or unrepairable dysfunctions.
+1. Remarketing (top priority): Refurbishing and reselling functioning EEE to give it a second life
+The discarded electrical and electronic equipment (EEE) ranges from laptops, peripherals, and mobile
+devices to servers. Our international and local IT asset lifecycle partners test the collected EEE to
+determine its end-of-life treatment. In doing so, EEE is channeled either into the remarketing or waste
+stream. We define these streams as follows:
+End-of-Life Treatment of SAP's Electrical and Electronic Equipment
+Thermal recycling: Generating energy through the incineration of waste
+Information
+Management Report
+Further Information on
+Sustainability
+102-3
+Strategy
+102-2
+Strategy
+Links and Content
+General Standard Disclosures
+Consolidated Financial
+Statements IFRS
+The content of the column UN SDGs was not subject to the independent limited assurance
+engagement of our external auditor.
+To meet our commitment to the UN Global Compact (UN GC) initiative, this chapter serves as an
+annual Communication on Progress (COP) outlining how SAP supports and upholds the Ten
+Principles of the UN GC. We also present the interconnection between the GRI topic-specific
+disclosures that are material to SAP and the 17 United Nations Sustainable Development Goals
+(UN SDGs).
+The 15 material topics in this GRI Content Index were selected based on the comprehensive
+materiality assessment conducted in 2020 and reviewed in 2021, and reflect topics that have been
+identified as sustainability challenges and material topics by the GRI Standards. We have clustered
+these topics according to the relevant non-financial matters set out in the German Commercial Code
+(Handelsgesetzbuch, HGB) (exception: the material topic “ethics and compliance" is not clustered
+under "Anti-corruption and bribery matters" as the corresponding GRI standards are defined more
+broadly). The two material management practices 'Governance' and 'Transparency' are not listed as
+individual disclosures below as they have already been fulfilled through the universal GRI
+standards 102: General Disclosures and/or GRI 103: Management Approach.
+The social and environmental data and information included in the SAP Integrated Report 2021 has
+been prepared in accordance with the GRI Standards: Core option.
+GRI Content Index and
+UN Global Compact
+Communication on Progress
+Information
+Additional
+QAudit Scope
+Strategy
+Additional
+Management Report
+Real: The carbon reductions represent actual emission reductions that have already occurred.
+Additional: The carbon reductions are surplus to regulation and would not have happened without
+the offset.
+A requirement for carbon offsets is the application of the Verified Carbon Standard (VCS) and equally-
+high quality standards. SAP ensures that the quantified carbon emission reductions from offsets are
+credible and that they meet four key principles:
+By charging an internal carbon price for business flights and investing in the forest project, we were
+able to offset 85% (10.7 kt) of our business flights emissions in 2021.
+In 2021, we did not require our financial contribution to the LCF to offset our emissions. Instead, we
+used an investment in a nature-based forest project to compensate for a portion of our business
+flights as well as 100% of the following emissions categories: corporate cars using Novofleet's
+climate fuel cards, corporate jets, business trips with private cars, and logistics.
+Carbon offsets represent a unit of CO2e that is reduced, avoided, and removed to compensate for
+emissions occurring elsewhere. We continuously refine our internal carbon emissions calculation
+methodology and uphold high requirements for dealing with carbon offsets:
+Carbon Offsets
+Permanent: The carbon reductions are permanent or have guarantees to ensure that any losses
+are replaced in the future.
+In the net carbon emissions, the purchased as well as the produced renewable electricity is already
+deducted from our Scope 2 and Scope 3 electricity emissions.
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+produced. The renewable electricity is only considered if confirmed by an official certificate or written
+confirmation of our respective EAC suppliers (100% data coverage).
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Verifiable: The performance of the carbon reduction projects can be readily and accurately
+quantified, monitored, and verified.
+SAP
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+312/338
+311/338
+In the net carbon emissions, purchased offsets are already deducted from our gross emissions.
+By water, we mean the total amount of freshwater withdrawn for our office buildings and data centers.
+Data is based on measurements and estimations from sites. Data was provided for 65% of the total
+water consumption; remaining data is extrapolated based on square meter footage.
+Additional Environmental Aspects
+We define data center electricity as the sum of electricity consumed to provide internal and external
+computation power in SAP data centers, contracted third-party data centers, and hyperscale data
+centers. A data center is any global, regional, or local computing center (location with any number of
+server units) that is part of our global IT infrastructure strategy.
+Data Center Electricity
+We define total energy consumed as the sum of all energy consumed in SAP's own operations and
+value chain (Scope 1, 2, and 3), including energy from renewable sources. It is calculated based on
+the consumption data obtained through our measurements for the carbon emissions and is the sum
+of energy consumption from stationary combustion in facilities, mobile combustion in corporate cars,
+mobile combustion in corporate jets, electricity in offices, electricity in data centers, purchased chilled
+water, purchased hot water, and purchased steam, and electricity in external data centers (co-
+locations and hyperscalers).
+Total Energy Consumed
+To Our
+Stakeholders
+Water
+102-43
+102-4
+Note (G.9) Scope of Consolidation, Subsidiaries and Other Equity Investments
+102-12
+Sustainability Management
+Products, Research & Development, and Services
+Strategy
+Sustainability Management
+We support a precautionary approach towards environmental management, which is why we have
+implemented an environmental management system across various SAP locations worldwide according to
+ISO 14001. While we see little apparent risk for our own operations, we do see an opportunity to help our
+customers anticipate and manage this risk in a more agile and responsive fashion through effective product
+lifecycle management and sustainable design.
+Memberships
+Sustainable Procurement
+Financial Performance: Review and Analysis
+Note (IN.2) Implications of the COVID-19 Pandemic
+Sustainable Procurement
+Strategy
+At SAP, we consider the portion of contingent workers as not significant.
+About This Report
+Strategy
+Employees and Social Investments
+102-13
+102-14
+Business Conduct
+Stakeholder Engagement
+102-42
+Stakeholder Engagement
+102-41
+Stakeholder Engagement
+Memberships
+102-40
+Corporate Governance Report
+102-18
+Employees and Social Investments
+Business Conduct
+102-16
+Letter from the CEO
+Sustainability Management
+Strategy
+Chart Generator
+Links and Content
+UN GC
+Principles
+External
+Assurance
+Note (B.1) Employee Headcount
+Note (G.9) Scope of Consolidation, Subsidiaries and Other Equity Investments
+Financial Performance: Review and Analysis
+Consolidated Financial Statements IFRS
+✓
+http://www.sap.com/industries.html
+Note (C.1) Results of Segments
+Financial Performance: Review and Analysis
+102-7
+102-6
+Strategy
+102-5
+Strategy
+Note (B.1) Employee Headcount
+✓
+✓
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+✓
+To Our
+SAP
+102-11
+102-10
+102-9
+102-8
+313/338
+SAP Integrated Report 2021
+7, 8, 12, 13
+404-1
+Non-Financial Notes
+6
+5,8,10
+SAP
+6
+4, 5, 8, 9, 10
+SAP
+SAP
+Chart Generator
+https://www.sap.com/investors/en/governance/supervisory-board.html
+Corporate Governance Statement
+405-1
+With our performance appraisal approach called SAP Talk, our
+employees receive regular performance and development reviews -
+independent of gender and employee category.
+Employees and Social Investments
+404-3
+318/338
+SAP has dedicated as well as volunteer staff that supports
+generational intelligence on matters of continued employability,
+managing career endings, and cross-generational integration and
+collaboration. These experts work to continuously improve processes
+and design programs that sustain employability for as long as
+possible. They provide training for cross-generation collaboration,
+facilitate flexible career endings for employees (such as part-time
+options), and keep employees connected with the Company after
+retirement (the “HR Lounge - Mature Talents" consultation session,
+for example, provides a platform for our experienced, long-term
+employees in Germany to gain insight on sharing experiences across
+generations, career development, transitioning to retirement, and so
+on).
+5,8,10
+407-1
+External
+Assurance
+Boundaries
+Sustainable Procurement
+We are not aware of any operations or suppliers in which the right to
+exercise freedom of association and collective bargaining may be at
+significant risk.
+Human Rights and Labor Standards
+Links, Content, and Omissions
+1,2,6
+Stakeholders
+SAP Integrated Report 2021
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+SAP
+To Our
+UN SDGS
+Employees and Social Investments
+SAP offers a wide portfolio of learning and development offerings to
+help all of our employees to upskill and accelerate their career. Every
+individual employee is encouraged to learn and expand their skills –
+independent of employee level/category or gender. We align training
+activities according to the needs of each employee and they can
+freely choose what makes sense for them.
+1,2,6
+Principles
+UN SDGS
+UN GC
+External
+Assurance
+Boundaries
+Employees and Social Investments
+Sustainability Management
+Sustainability Management
+GRI Content Index
+Employees and Social Investments
+Nothing has a greater impact on our long-term success than the
+creativity, talent, commitment, health, and well-being of our people.
+Their ability to innovate and understand the needs of our customers
+has the potential to deliver sustainable value to our Company and
+our society.
+Links, Content, and Omissions
+103-3
+Employees and Social Investments
+404-2
+Women in
+Management
+SAP
+4, 5, 8, 9, 10
+SAP
+Employees and Social Investments
+Note (B.1) Employee Headcount
+Chart Generator
+8
+SAP
+Employees and Social Investments
+Chart Generator
+Employees and Social Investments
+6
+SAP
+Employees and Social Investments
+Employee
+Engagement
+6
+5
+401-1
+103-2
+UN GC
+Principles
+8
+3
+SAP + external
+Employees and Social Investments: How We Measure and Manage
+Our Performance
+parties
+3
+SAP + external
+1,2
+UN GC
+Principles
+External
+Assurance
+Boundaries
+Additional
+Information
+Safety Instructions for Contractors
+SAP Supplier Code of Conduct
+SAP has developed an internal health management system called
+"RUN HEALTHY" which is built on International Labour Organization
+Occupational Health and Safety (ILO-OSH) standards. "RUN
+HEALTHY" enables SAP organizations to assess their maturity state
+on health, well-being, and safety, to develop and drive targeted
+initiatives across their organizations, and to boost their local Business
+Health Culture Index, employee engagement, and employer
+attractivity. The implementation is voluntary and driven by the
+managing director according to country/line-of-business needs. We
+give all workers access to global offerings which are complemented
+according to local business needs. Local RUN HEALTHY councils are
+key in the process to self-assess maturity levels in the light of
+covering local requirements and global standards. RUN HEALTHY is
+expanded on a continuous basis. In addition, SAP engages with its
+suppliers, partners, and customers to promote the topics of people
+health and occupational safety beyond the boundaries of our
+company.
+UN SDGS
+Links, Content, and Omissions
+parties
+Employees and Social Investments: Health and Well-Being
+Non-Financial Notes: Social Performance
+SAP Integrated Report 2021
+3
+SAP
+320/338
+SAP's Health and Well-Being team provides global frameworks and a
+comprehensive health and well-being portfolio to enable SAP's
+business with its organizations at all levels to run healthy.
+Please also refer to GRI 403-6.
+By regularly conducting surveys, we continuously receive insights
+which enable SAP and particularly its Health and Well-Being
+organization, together with its strong partners in Human Resources,
+Real Estate and Facilities, Occupational Safety and Personal Security
+to enforce and adjust its initiatives and counteract adverse
+developments in time.
+403-3
+Employees and Social Investments: Health and Well-Being
+Our workers can use various tools to report concerns as outlined in
+the Human Rights Commitment Statement, and are protected against
+retaliation. This document is core to our people-related policies, such
+as the Global Health and Safety Policy. SAP's Pledge to Flex
+empowers employees to choose when and where to work best while
+balancing business requirements and personal needs. This approach
+enables employees to avoid and circumvent hazardous workplace
+situations.
+SAP relies on the enablement of internal multiplier networks such as
+the Health Ambassador Network, and external trainings and
+certifications to ensure health & safety competence across the
+organization.
+SAP regularly conducts health risk assessments on global level with
+reporting on all manager levels. Mental health is key to SAP's ability
+to provide innovative solutions for our customers. SAP has a long
+tradition in taking action against stigmatization and in taking care of
+prevention and case management. With the Stress-Satisfaction Score
+SAP is monitoring an early-watch KPI to measure resilience on
+people level and to detect fields of action on individual and
+organizational level. In 2020, we established a COVID-19-related risk
+assessment to identify stress factors while working remote. An
+SAP Analytics Cloud-based "Country Health Dashboard" supports the
+identification of health risks on country level.
+Pledge to Flex
+Human Rights Commitment Statement
+Sustainable Procurement: Improving Sustainability Through Practice
+Global Health and Safety Policy
+Employees and Social Investments: How We Measure and Manage
+Our Performance
+SAP + external
+parties
+403-2
+Further Information on
+Sustainability
+Sustainability Management
+GRI Content Index
+Employees and Social Investments
+As an enterprise software company, SAP does not have the
+occupational health and safety issues associated with manufacturing
+or heavy-industry jobs. Most of our people have sedentary,
+intellectually demanding jobs in a constantly changing business
+environment that requires considerable flexibility and agility.
+Therefore, typical health and safety management issues at SAP
+include ergonomic and safe workplaces, stress management, self-
+management, work-life balance, travel medicine, and general medical
+prevention.
+Nothing has a greater impact on our long-term success than the
+creativity, talent, commitment, health, safety, and well-being of our
+people. Their ability to collaborate, innovate, and understand the
+needs of our customers has the potential to deliver sustainable value
+to our company, customers, and society.
+Links, Content, and Omissions
+Employees and Social Investments
+103-3
+103-1
+Well-Being, Health, and Safety
+UN SDGS
+External
+Assurance
+Boundaries
+1, 2, 3
+103-2
+403-1
+Global Health and Safety Policy
+Sustainability Management
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+Conditions in which people live up to their full potential - now and in
+the future of work - are mainly defined by the organization's
+leadership style and working culture. We believe that there can be no
+organizational health without "individual health." SAP and its leaders
+take ownership for workplaces and a caring culture that foster
+physical health, safety, and mental well-being, while every employee
+is enabled and encouraged to take care of their individual health.
+SAP Health and Well-Being team (led by SAP's chief medical officer),
+together with their partners in Human Resources, Real Estate and
+Facilities, Occupational Safety and Personal Security, provide the
+information, education, and support to foster a healthy working
+culture and a supporting environment for all people. In doing so, we
+enable the organization to be a role model in safe, healthy, and
+sustainable people management.
+SAP
+UN GC
+Principles
+1,3,6
+> > > >
+SAP provides manifold feedback opportunities and encourages its
+people to get involved and shape SAP's caring culture and working
+conditions to "tell it like it is," and in so doing, help us improve where
+needed. Our success is tracked through the Business Health Culture
+Index (BHCI) and the Stress-Satisfaction Score (measured by regular
+employee surveys, which revealed that job satisfaction was equal or
+higher than the perceived stress for about 70% of SAP participants in
+2021).
+Non-Financial Notes: Social Performance
+Employees and Social Investments
+319/338
+103-1
+The management approaches for the material topics 'employee rights,' 'fair and inclusive workplace,' 'talent development,' and
+'employee engagement' strongly overlap. This is why we decided to combine them in one joint table, including their corresponding
+topic-specific disclosures:
+Employee Matters
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+Chart Generator
+316/338
+Links, Content, and Omissions
+Non-Financial Notes
+3, 12, 13, 14, 15
+SAP
+Energy and Emissions
+Sustainability Management
+Energy and Emissions
+103-3
+7,8
+Sustainability Management
+305-2
+Non-Financial Notes
+305-7
+305-6
+Chart Generator
+Non-Financial Notes
+Energy and Emissions
+305-5
+Energy and Emissions
+Non-Financial Notes
+305-4
+Chart Generator
+Non-Financial Notes
+Energy and Emissions
+305-3
+Chart Generator
+Chart Generator
+Combined Group
+Management Report
+Energy and Emissions
+GRI Content Index
+The ratio uses only energy consumption within the organization.
+Five-Year Summary
+Chart Generator
+Non-Financial Notes
+Energy and Emissions
+302-3
+302-4
+✓
+7, 8, 12, 13
+SAP + external
+parties
+Non-Financial Notes
+Energy and Emissions
+302-2
+Chart Generator
+7,8
+103-2
+Energy and Emissions
+Allocation of energy consumption reductions to conservation and
+efficiency initiatives cannot be presented precisely due to overlapping
+effects (such as reductions caused by the COVID-19 pandemic).
+103-1
+UN GC
+Principles
+UN SDGS
+External
+Assurance
+Boundaries
+8
+Non-Financial Notes
+7,8,13
+8
+7, 8, 12, 13
+SAP
+Energy and Emissions
+Links, Content, and Omissions
+Climate Change and Air Quality
+SAP
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Allocation of carbon emission reductions to avoidance and efficiency
+initiatives cannot be connected precisely due to overlapping effects
+(such as reductions caused by the COVID-19 pandemic).
+SAP + external
+parties
+UN GC
+Principles
+UN SDGS
+External
+Assurance
+Boundaries
+7,8
+12, 13, 14
+3, 12, 13, 15
+7,8
+3, 12, 13, 14, 15
+8,9
+13, 14, 15
+SAP + external
+parties
+8
+✓
+13, 14, 15
+7,8
+12, 13, 14
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+Stakeholders
+SAP + external
+parties
+To Our
+SAP
+317/338
+7,8
+12, 13, 14
+SAP + external
+parties
+7,8
+SAP Integrated Report 2021
+SAP + external
+parties
+7,8
+3, 12, 13, 14, 15
+Waste and Water
+103-3
+Sustainability Management
+Waste and Water
+Energy and Emissions
+103-2
+Sustainability Management
+GRI Content Index
+Energy and Emissions
+Links, Content, and Omissions
+103-1
+Ressource Efficiency and Waste
+We report all our carbon emissions in CO2 equivalents (CO₂e)
+including the impact from CH4, N₂O, and HFCS in our Scope 1 and 2
+emissions. We do not provide a breakdown. As a software company
+with no production sites, sulfur oxides (SOX) and other significant air
+emissions are not material to SAP.
+As a software company with no production sites, emissions of ozone-
+depleting substances (ODS) are not material to SAP.
+Waste and Water
+306-1
+Waste and Water
+306-2
+External parties
+7,8
+3, 12, 13, 14, 15
+SAP
+UN GC
+Principles
+UN SDGS
+External
+Assurance
+Boundaries
+Additional
+Information
+Non-Financial Notes
+As a software company with no production sites, the generated total
+weight of waste is considered non-material. Considering our business
+model, we only perceive electrical and electronic waste as relevant.
+Waste and Water
+Suppliers must acknowledge and adhere to the SAP Supplier Code of
+Conduct, which expects compliance with legal obligations. In
+addition, our ISO 14001-certified locations monitor regulatory
+requirements through a legal register. We also work on integrating
+specific waste-related legal demands into supplier contracts of our IT
+asset lifecycle partners.
+306-3
+Non-Financial Notes
+Waste and Water
+7,8
+SAP
+305-1
+330/338
+SAP Trust Center: Data Protection and Privacy
+Security, Data Protection, and Privacy
+We have not received any substantiated complaints concerning
+breaches of customer privacy, neither from outside parties nor
+regulatory bodies. As a result, we have no identified leaks, thefts, or
+losses of customer data.
+Customer Matters
+Customer Responsibility
+Links, Content, and Omissions
+103-1
+103-2
+Security, Data Protection, and Privacy
+103-3
+Strategy
+GRI Content Index
+Sustainability Management
+Customers
+Performance Management System
+Sustainability Management
+Customers
+Performance Management System
+At SAP, we are committed to our purpose of helping the world run
+better and improving people's lives. To this end, we aim to create
+innovations that help accelerate economic prosperity, drive positive
+social impact, and safeguard the planet.
+Links, Content, and Omissions
+418-1
+103-3
+Human Rights and Labor Standards
+GRI Content Index
+Additional
+Information
+Security, Data Protection, and Privacy
+SAP Trust Center: Data Protection and Privacy
+SAP Privacy Statement
+322/338
+Boundaries
+External
+Assurance
+UN SDGS
+UN GC
+Principles
+✓
+32 Employees of recently acquired companies and SAP Israel as well as workers who are not SAP employees are excluded.
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Boundaries
+External
+Assurance
+UN SDGS
+SAP + external
+parties
+103-3
+At SAP, we are committed to our purpose of helping the world run
+better and improving people's lives. To this end, we aim to create
+innovations that help accelerate economic prosperity, drive positive
+social impact, and safeguard the planet.
+Strategy
+GRI Content Index
+Sustainability Management
+Strategy
+Products, Research & Development, and Services
+Sustainability Management
+Strategy
+Products, Research & Development, and Services
+Boundaries
+External
+Assurance
+UN SDGS
+> > >
+UN GC
+Principles
+323/338
+SAP
+SAP Integrated Report 2021
+To Our
+103-2
+Links, Content, and Omissions
+103-1
+Product Responsibility
+Additional
+Information
+UN GC
+Principles
+12, 16
+1
+Boundaries
+External
+Assurance
+UN SDGS
+UN GC
+Principles
+416-1
+Human Rights and Labor Standards
+As a software company without any physical products or production
+sites, customer health and safety is mainly related to the responsible
+usage of technology, especially artificial intelligence.
+SAP + external
+parties
+3
+Guiding Principles for Artificial Intelligence
+Customer
+Loyalty
+Customers
+SAP
+4,5,8,10
+Performance Management System
+Links, Content, and Omissions
+Stakeholders
+103-1
+For non-employee workers, we require our suppliers and sub-
+suppliers to uphold health and safety standards via our Global
+Supplier Code of Conduct. In addition, in Germany we have safety
+Instructions for contractors in place.
+Sustainable Procurement
+8
+1, 2, 3
+✓
+3,8
+1,2,5
+409-1
+Human Rights and Labor Standards
+SAP + external
+parties
+SAP + external
+parties
+1,2,4
+We are not aware of any operations or suppliers being at significant
+risk for incidents of forced or compulsory labor.
+Sustainable Procurement
+✓
+Security, Privacy, and Data Protection
+103-1
+103-2
+Links, Content, and Omissions
+Security, Data Protection, and Privacy
+GRI Content Index
+3,8,10
+We are not aware of any operations or suppliers being at significant
+risk for incidents of child labor.
+408-1
+Human Rights and Labor Standards
+Boundaries
+External
+Assurance
+UN SDGS
+UN GC
+Principles
+SAP
+3
+Boundaries
+External
+Assurance
+UN SDGS
+UN GC
+Principles
+103-2
+Human Rights and Labor Standards
+103-3
+Human Rights and Labor Standards
+407-1
+Human Rights and Labor Standards
+We are not aware of any operations or suppliers in which the right to
+exercise freedom of association and collective bargaining may be at
+significant risk.
+SAP + external
+parties
+Sustainable Procurement
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+SAP + external
+parties
+SAP + external
+parties
+3
+3
+321/338
+403-10
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Links, Content, and Omissions
+Fatalities and injuries are not a material issue for SAP, as employees
+work in an office environment. Please refer to GRI 103-1 for the main
+types of work-related ill health.
+The identification of work-related hazards that pose a risk of ill health
+(such as via the BHCI or the RUN HEALTHY program), as well the
+actions taken to eliminate/ minimize these hazards and risks, are
+outlined in GRI 403-1 to GRI 403-7.
+Internally, we track and monitor an SAP illness rate (in %) which is
+defined as the total number of days absent (including absences
+shorter than 3 days) / scheduled workdays per year (250 days) x 100.
+In 2021, SAP had a global illness rate of 1.7%. 32
+In 2021, our Stress Satisfaction Score evaluation (see GRI 403-2)
+confirmed lower stress levels on average compared to satisfaction.
+Furthermore, we leverage the company reports from our external
+Employee Assistance Program (EAP) providers to recognize health
+trends and to derivate appropriate actions.
+SAP + external
+parties
+Respect for Human Rights
+As outlined in GRI 403-2, we have various approaches to identify
+negative occupational health and safety impacts such as the BHCI
+and Country Health Dashboard as well as various channels to report
+concerns and incidents. In addition, to ensure the health, safety, and
+well-being of our employees worldwide, SAP runs dedicated crises
+management and business continuity frameworks. To safeguard our
+people on business travels, SAP ensures medical and security
+assistance through a Travel Emergency Assistance Program.
+Sustainable Procurement: Improving Sustainability Through Practice
+Employees and Social Investments: Health and Well-Being
+SAP Health and Well-Being: Fostering a Healthy Culture
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Boundaries
+External
+Assurance
+UN SDGS
+UN GC
+Principles
+SAP
+3
+403-4
+403-5
+403-6
+403-7
+Links, Content, and Omissions
+SAP'S RUN HEALTHY management system includes a self-
+assessment conducted by a cross-functional staffed council in order
+to drive tailor-made and effective local programs and initiatives.
+Digital solutions are leveraged to guide SAP's people to their relevant
+health content by considering individual needs and location, and to
+gather their feedback to drive highest standards of quality, as we do
+with the permanent Qualtrics-based Health Feedback Survey across
+all health and well-being offerings.
+A RUN HEALTHY council is the execution entity for the RUN
+HEALTHY program (see GRI 403-1 for its purpose and target). It
+meets regularly (usually quarterly) and contains the RUN HEALTHY
+lead, different line-of-business representatives, such as from the
+Human Resources, Facility, and Health departments, as well as an
+employee representative. The program is being expanded step by
+step; not all SAP employees are represented by the RUN HEALTHY
+program.
+At SAP, we offer a flexible training and enablement portfolio (such as
+SAP's learning platform Success Map) to enable our people to thrive
+in the future of work, foster healthy working habits, and become
+multipliers. In addition to flagship sessions on how to manage stress
+and foster a healthy work lifestyle, new classes and Web seminars
+were introduced with special focus on the pandemic situation to help
+our people adapt to the sudden change in working conditions.
+Specific offerings for leaders support caring for people's health,
+safety, and well-being.
+At SAP, we offer a wide range of health and well-being services to
+our employees, ranging from general guidance on how to be more
+active and to deal with stress and challenging situations in- and
+outside SAP, conducting health and people days, consultation on
+ergonomic workplace set-up to prevent back pain, to local
+vaccination initiatives. Employees have access to these services and
+are informed about them in SAP's internal employee portal, monthly
+newsletters, live sessions, and campaigns, or by contacting the
+SAP Health team directly. In addition, we have Web-based tools such
+as the Qualtrics-based SAP Health Navigator which guides SAP
+people toward health offerings and tips according to their individual
+needs. The Run Your Way program on our Fit@SAP activity
+challenge platform encourages people to integrate more physical
+activity into their daily life.
+Consolidated Financial Further Information on
+Combined Group
+Management Report
+Statements IFRS
+To Our
+SAP Integrated Report 2021
+SAP
+The content of this section was not subject to the independent limited assurance engagement of our
+external auditor.
+QAudit Scope
+326/338
+Analysis of Consolidated Statements of
+Cash Flow
+Total tax paid
+Stakeholders
+Community and Social Vitality
+Links
+Core Metrics and Disclosures
+Theme
+Prosperity
+Training hours split by gender and
+employee category are not a material
+issue for SAP, as we align our training
+activities according to the needs of each
+employee and do not tolerate
+discrimination.
+In our Compensation Report, we
+disclose the vertical pay ratio. This ratio
+compares the total compensation
+granted to the CEO with that of all
+employees who were employed at year
+end.
+Creating an inclusive workplace that
+benefits employees, customers, and
+partners is a strategic commitment for
+SAP. We are the first EDGE-certified
+global technology company and have
+received numerous recognitions for our
+advances in creating an inclusive and
+more equal workplace, such as
+Bloomberg Equality Index, Best Place to
+Work, Forbes' America's Best Employers
+For Women ranking, and many others.
+No disclosure of other indicators of
+diversity due to legal requirements in
+Germany.
+Comments
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Anti-corruption
+Strategy
+Corporate Governance Statement
+https://www.sap.com/investors/en/gover
+nance/supervisory-board.html
+Form 20-F Item 6
+Note (G.4)
+Materiality
+Stakeholder Engagement
+Business Conduct
+Note (G.3) Other Litigation, Claims, and
+Legal Contingencies
+TC-SI-130a.1
+Environmental Footprint of
+Code
+Topic
+Starting in 2021, SAP maps existing sustainability disclosures to the standards of the Sustainability
+Accounting Standards Board (SASB). The table below presents a set of sustainable indicators based
+on the SASB standards for Software and IT Services (Version 2018-10).
+SASB Index
+Information
+Additional
+Further Information on
+Sustainability
+Comments
+Employees and Social Investment
+Training provided (#, $)
+Skills for the Future
+Energy and Emissions
+Task Force on Climate-Related Financial
+Disclosure
+Chart Generator
+Energy and Emissions
+TCFD implementation
+Greenhouse gas (GHG) emissions
+Climate Change
+Links
+Core Metrics and Disclosures
+Theme
+Planet
+Expected Developments and
+Opportunities
+Risk Management and Risks
+SAP Speak Out
+Business Conduct
+Integrating risk and opportunity into
+business process
+Protected ethics advice and reporting
+mechanisms
+Risk and Opportunity Oversight
+Partners are also requested to complete
+any compliance training available based
+on their partner type. For more
+information, see SAP's Partner Code of
+Conduct.
+Comments
+Material issues impacting stakeholders
+325/338
+SAP Integrated Report 2021
+Compensation Report
+Wage level (%)
+SAP among Forbes' America's Best
+Employers For Women 2021
+SAP Recertifies with EDGE
+Bloomberg Gender-Equality Index 2021
+SAP Named Among Best Companies to
+Work for in 2021
+Employees and Social Investment
+Chart Generator
+Pay equality (%)
+Diversity and inclusion (%)
+Dignity and Equality
+Links
+Core Metrics and Disclosures
+Theme
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+People
+Combined Group
+Stakeholders
+To Our
+SAP
+Governance body composition
+Setting purpose
+Comments
+Sustainable Procurement
+103-3
+Sustainable Procurement
+308-1
+Sustainable Procurement
+Percentage of
+addressable
+spend with
+diverse
+suppliers and
+social
+enterprises
+All our suppliers have to acknowledge the SAP Supplier Code of
+Conduct, containing environmental expectations of them and their
+sub-suppliers. In addition, we are in the process of setting up a
+holistic third-party risk assessment for SAP suppliers, including
+screening for environmental criteria. Once the process has been
+rolled out, we can report a percentage.
+Sustainable Procurement
+SAP set a social procurement spend target aiming for 5%
+addressable spend with diverse suppliers and 5% addressable spend
+with social enterprises by year end 2025.
+Solutions for an Inclusive and Circular Economy
+Links, Content, and Omissions
+103-1
+Waste and Water
+GRI Content Index
+103-2
+103-2
+GRI Content Index
+103-1
+Sustainability
+Additional
+Information
+Customer
+Loyalty
+Links, Content, and Omissions
+Customers express their satisfaction with the quality of our products
+and services via the regularly conducted customer net promoter
+score.
+Customers
+Performance Management System
+Responsible Supply Chain
+Boundaries
+External
+Assurance
+UN SDGS
+SAP
+UN GC
+Principles
+Links, Content, and Omissions
+Boundaries
+External
+Assurance
+UN SDGS
+UN GC
+Principles
+Sustainable Procurement
+-1,272
+Waste and Water
+Waste and Water
+Quality of Governing Body
+Stakeholder Engagement
+Ethical Behavior
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Stakeholder Capitalism
+Metrics
+To support long-term value creation, SAP has committed to applying the World Economic Forum
+(WEF) Stakeholder Capitalism Metrics and encourages further global standardization and
+convergence in the ESG reporting landscape. We include the standards in our own reporting and also
+offer the framework in our core sustainability software solutions.
+The following table provides information about the core metrics proposed by the WEF White Paper
+titled "Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of
+Sustainable Value Creation", published in September 2020.
+The table refers to the chapters of our Management Report, Notes, Form 20-F, and other sources that
+contain the respective disclosures. Core metrics that have not been identified as material for SAP
+during our latest materiality analysis have been omitted.
+Principles of Governance
+Core Metrics and Disclosures
+Links
+Governing Purpose
+103-3
+Theme
+14, 15
+324/338
+For this material topic, we could not identify a topic-specific GRI
+standard. In addition, we are still working on meaningful key
+performance indicators for measuring the impact of our solutions for
+an inclusive and circular economy, for example through our
+membership in the Value Balancing Alliance. For more information,
+see the Connectivity section.
+SAP + external
+parties
+✓
+10, 12, 13, 17
+1, 2, 7, 8
+✓
+12, 13
+7,8
+SAP + external
+parties
+10, 12
+1
+Boundaries
+External
+Assurance
+UN SDGS
+✓
+UN GC
+Principles
+3, 6, 9, 12, 13,
+7,8,9
+SAP
+Provisions for material corruption cases
+would be reported together with further
+details in Note (G.3).
+SAP Partner Code of Conduct
+5,027
+Non-IFRS adjustments
+4,872
+4,647
+4,533
+3,642
+3,248
+Software licenses (IFRS)
+0
+3,771
+7,013
+8,085
+9,418
+Cloud (non-IFRS)
+2
+33
+81
+-2,092
+5
+0
+0
+0
+0
+Non-IFRS adjustments
+10,908
+10,981
+11,547
+11,506
+0
+11,412
+4,872
+4,647
+4,533
+3,642
+3,248
+Software licenses (non-IFRS)
+0
+Software support (IFRS)
+0
+3,769
+4,993
+329/338
+337
+Publication Details
+335
+Financial and Sustainability Publications
+334
+330
+SAP
+Financial Calendar and Addresses
+Additional Information
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+Five-Year Summary
+SAP Integrated Report 2021
+To Our
+Stakeholders
+6,933
+8,080
+9,418
+2017
+2018
+2019
+2020
+2021
+Non-IFRS adjustments
+Cloud (IFRS)
+Revenues
+€ millions, unless otherwise stated
+Additional
+Information
+Sustainability
+Consolidated Financial Further Information on
+Statements IFRS
+Five-Year Summary¹
+Combined Group
+Management Report
+0
+To Our
+0
+Software support (non-IFRS)
+Operating Expenses
+Share of more predictable revenue (non-IFRS, in %)
+Share of more predictable revenue (IFRS, in %)
+Total revenue (non-IFRS)
+Non-IFRS adjustments
+63
+65
+Cost of cloud (IFRS)
+67
+75
+63
+65
+67
+72
+75
+23,464
+72
+24,741
+-3,105
+-2,534
+-1,925
+Cost of software licenses and support (IFRS)
+-1,427
+-1,855
+-2,228
+-2,451
+-2,876
+-2,699
+Cost of cloud (non-IFRS)
+213
+305
+248
+229
+Non-IFRS adjustments
+-1,660
+-2,068
+233
+27,634
+27,343
+27,842
+33
+81
+5
+0
+Non-IFRS adjustments
+19,549
+20,622
+3
+23,012
+24,078
+Cloud and software (IFRS)
+10,908
+10,982
+11,548
+11,506
+11,412
+23,228
+Cloud and software (non-IFRS)
+Services (IFRS = non-IFRS)
+Total revenue (IFRS)
+3
+33
+81
+5
+0
+23,461
+3,912
+4,086
+24,708
+27,553
+4,541
+4,110
+27,338
+27,842
+19,552
+20,655
+23,093
+23,233
+24,078
+3,764
+0
+SAP Integrated Report 2021
+SAP
+The content of this section was not subject to the independent limited assurance engagement of our
+external auditor.
+151
+166
+-2,630
+-3,000
+-3,408
+-3,151
+-7,946
+254
+-7,886
+-7,462
+-2,991
+-7,051
+617
+523
+700
+494
+589
+-8,355
+Total cost of revenue (non-IFRS)
+178
+-3,158
+343
+423
+Cost of cloud and software (non-IFRS)
+-4,698
+-4,362
+-4,247
+Cost of services (IFRS)
+286
+Non-IFRS adjustments
+Total cost of revenue (IFRS)
+Non-IFRS adjustments
+-2,916
+-3,178
+-3,662
+-3,817
+-3,302
+-3,471
+Cost of services (non-IFRS)
+-7,328
+-7,362
+-7,655
+-7,505
+-7,106
+-7,693
+-6,781
+-6,924
+General and administration (IFRS)
+-2,431
+Sales and marketing (IFRS)
+-1,356
+-1,098
+-1,075
+Depreciation and amortization (IFRS)
+-1,775
+-1,831
+-1,872
+-1,362
+-1,629
+18.0
+19.1
+18.6
+-6,969
+-6,462
+Research and development (IFRS)
+-5,190
+-4,454
+-4,292
+-3,624
+-3,352
+Research and development (in % of total revenue, IFRS)
+18.6
+16.3
+15.6
+14.7
+14.3
+Research and development (in % of total operating expenses, IFRS)
+22.4
+21.5
+446
+345
+332
+Non-IFRS adjustments
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Stakeholders
+Combined Group
+To Our
+SAP Integrated Report 2021
+Additional
+Information
+SAP
+327/338
+The content of this section was not subject to the independent limited assurance engagement of our
+external auditor.
+QAudit Scope
+Technology Disruptions
+Risk Management and Risks
+TC-SI-550a.2
+Managing Systemic Risks from
+328/338
+Task Force on Climate-Related
+Financial Disclosure (TCFD)
+The TCFD recommends companies to disclose their climate-related financial risks to investors,
+lenders, insurers, and other stakeholders. SAP started to report in alignment with the TCFD
+recommendations in 2018. For more information, see the table below.
+Area
+QAudit Scope
+Chart Generator
+Risk Management and Risks
+Non-Financial Notes:
+Environmental Performance
+Energy and Emissions
+Energy and Emissions
+Energy and Emissions
+Risk Management and Risks
+Strategy
+Energy and Emissions
+Chapter
+Metrics and targets that SAP uses to assess and manage relevant
+climate-related risks and opportunities where such information is
+material.
+How does SAP identify, assess, and manage climate-related risks?
+Actual and potential impacts of climate-related risks and opportunities
+on SAP's businesses, strategy, and financial planning where such
+information is material.
+SAP's governance of climate-related risks and opportunities.
+Content
+Metrics and Targets
+Risk Management
+Strategy
+Governance
+As a global organization with employees
+from over 150 nationalities, our aspiration
+is that SAP's workforce mirrors the
+diversity in society that includes gender
+parity and demographics of all of the
+regions where we have employees.
+-2,008
+Employees and Social Investments
+Key Facts
+Non-IFRS adjustments
+103
+97
+141
+130
+190
+Cost of software licenses and support (non-IFRS)
+-2,234
+-1,822
+-2,018
+Cost of cloud and software (IFRS)
+-5,030
+-4,707
+-4,692
+-1,962
+-4,160
+-2,044
+-3,893
+-1,911
+Links
+Energy and Emissions
+Hardware Infrastructure
+SAP is a multinational company with
+locations all over the world. At each
+location, we hire people based on their
+qualifications and our business needs.
+For an overview of our headcount per
+geographical area, see Note (B.1).
+For more information about data protection
+and privacy, see the SAP Trust Center
+Security, Data Protection, and Privacy
+Risk Management and Risks
+Employees and Social Investments
+Note (B.1) Employee Headcount
+Energy and Emissions
+Security, Data Protection, and Privacy
+Comments
+TC-SI-330a.3
+TC-SI-330a.2
+Diverse and Skilled Workforce
+TC-SI-330a.1
+Recruiting & Managing a Global,
+TC-SI-230a.2
+Data Security
+TC-SI-220a.1
+Data Privacy & Freedom of
+Expression
+TC-SI-130a.3
+Waste and Water
+TC-SI-130a.2
+Employees and Social Investments
+Non-Financial Notes: Social Performance
+Key Facts
+-2,159
+58,464
+3.35
+Total non-current assets
+21,271
+23,736
+51,502
+27,538
+31,090
+11,930
+16,620
+15,213
+15,069
+20,044
+Goodwill
+Total current assets
+6,017
+6,480
+8,037
+6,730
+42,484
+6,499
+Trade and other receivables
+Assets, Equity and Liabilities
+51,125
+-1,479
+43,395
+34,881
+71,169
+Total assets
+25,515
+28,877
+30,822
+29,927
+41,523
+Total equity (including contract liabilities/deferred income)
+6,759
+12,138
+14,929
+15,696
+13,510
+Total non-current liabilities (including contract liabilities/deferred income)
+10,210
+10,486
+14,462
+12,842
+16,136
+Total current liabilities (including contract liabilities/deferred income)
+30,554
+44,999
+-2,493
+-8,286
+-6,503
+49
+44
+40
+Investments in goodwill, intangible assets, or property, plant, and equipment (including
+capitalizations due to acquisitions)
+3,522
+1,780
+8,090
+3,715
+1,630
+Key SAP Stock Facts
+Issued shares (in millions)
+1,229
+1,229
+1,229
+1,229
+1,229
+Earnings per share, basic (in €)
+4.46
+4.35
+2.78
+3.42
+49
+42
+Debt ratio (total liabilities² in % of total assets)
+60
+-1,563
+Net liquidity (net debt)
+-6,264
+-11,331
+-13,668
+-13,283
+-13,094
+Financial debts
+(cash and cash equivalents/short-term investments/restricted cash)
+4,785
+60,215
+8,838
+4,431
+3,996
+4,266
+3,028
+2,771
+Equity ratio (total equity in % of total assets)
+58
+51
+51
+56
+Contract liabilities/Deferred income - current (IFRS)
+29,159
+Applications, Technology & Support
+6,781
+81.6
+81.2
+80.5
+Cloud and software gross margin (in % of corresponding revenue, non-IFRS)
+80.1
+79.8
+79.6
+79.7
+79.1
+Cloud and software gross margin (in % of corresponding revenue, IFRS)
+62.2
+63.1
+68.2
+69.7
+69.5
+Cloud gross margin (in % of corresponding revenue, non-IFRS)
+56.0
+81.5
+58.6
+82.2
+20.0
+-1,938
+-1,226
+-1,511
+-983
+Profit after tax
+5,376
+5,283
+3,370
+4,088
+4,046
+Effective tax rate (IFRS, in %)
+21.5
+26.8
+26.7
+27.0
+19.5
+Effective tax rate (non-IFRS, in %)
+26.5
+-1,471
+63.5
+67.0
+15
+17
+11
+15
+16
+Current cloud backlog
+Current cloud backlog
+9,447
+7,155
+6,681
+NA
+NA
+Non-IFRS Adjustments
+Revenue adjustments
+0
+5
+81
+Return on equity (profit after tax in percentage of average equity)
+66.6
+22.8
+26.2
+2017
+2018
+2019
+2020
+2021
+Additional
+Information
+Sustainability
+Consolidated Financial Further Information on
+Statements IFRS
+Management Report
+Combined Group
+Cloud gross margin (in % of corresponding revenue, IFRS)
+Profits and Margins
+€ millions, unless otherwise stated
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+26.3
+33
+Income tax expense
+22.7
+87.4
+87.0
+71.5
+71.2
+69.7
+69.8
+69.9
+Gross margin (in % of total revenue, non-IFRS)
+73.7
+73.1
+72.3
+71.8
+72.5
+Operating profit (IFRS)
+4,656
+6,623
+4,473
+87.4
+5,703
+87.4
+85.8
+22.7
+19.4
+19.2
+19.3
+Services gross margin (in % of corresponding revenue, non-IFRS)
+30.1
+27.0
+25.0
+22.9
+23.5
+Software and support gross margin (IFRS, in %)
+Software and support gross margin (non-IFRS, in %)
+Gross margin (in % of total revenue, IFRS)
+86.9
+86.7
+86.6
+86.6
+87.6
+21.4
+4,877
+3,573
+28.9
+Financial income, net
+2,174
+776
+198
+-47
+188
+Profit before tax (PBT)
+6,847
+7,220
+4,596
+5,600
+5,029
+PBT margin (in % of revenues)
+24.6
+26.4
+16.7
+29.0
+Non-IFRS adjustments
+29.7
+29.6
+1,664
+3,735
+1,459
+1,892
+Operating profit (non-IFRS)
+8,230
+8,287
+8,208
+7,163
+6,769
+Operating margin (in % of total revenue, IFRS)
+16.7
+24.2
+16.2
+23.1
+20.8
+Operating margin (in % of total revenue, non-IFRS)
+30.3
+5,382
+3
+623
+9.7
+Liquidity and Cash Flow
+Net cash flows from operating activities
+Net cash flows from investing activities
+Net cash flows from financing activities
+6,223
+7,194
+3,496
+4,303
+5,045
+-3,063
+-2,986
+-7,021
+-3,066
+-1,112
+-56
+-3,997
+11.9
+102
+14.1
+22.5
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+€ millions, unless otherwise stated
+2021
+2020
+2019
+2018
+2017
+Segment profit
+728
+645
+517
+403
+315
+Segment margin (Segment profit in % of Segment revenue)
+19.1
+To Our
+Stakeholders
+3,283
+Capital expenditure
+105
+125
+(net cash flows from operating activities in % of profit after tax)
+Cash and cash equivalents
+8,898
+5,311
+5,314
+8,627
+4,011
+Short-term investments
+2,632
+1,470
+67
+211
+774
+Group liquidity
+11,530
+104
+-3,406
+136
+Cash conversion rate
+Free cash flow 10
+-800
+-816
+-817
+-1,458
+-1,275
+5,049
+6,000
+2,276
+2,844
+3,770
+Free cash flow in % of total revenue
+18
+22
+8
+12
+16
+116
+Adjustment for acquisition-related charges
+SAP Integrated Report 2021
+331/338
+23,051
+20,997
+19,881
+Segment gross margin (in % of corresponding revenue)
+79.5
+80.6
+80.6
+80.8
+81.7
+Segment profit
+9,567
+9,722
+9,773
+8,764
+8,375
+Segment margin (Segment profit in % of Segment revenue)
+40.7
+22,965
+42.3
+23,502
+Earnings per share, basic (non-IFRS, in €)
+577
+689
+577
+587
+Adjustment for share-based payment expenses
+2,794
+1,084
+1,835
+830
+1,120
+Adjustment for restructuring
+157
+-3
+1,130
+19
+182
+Segment Results
+Segment revenue
+SAP
+42.4
+42.1
+-0.6
+-1.7
+ΝΑ
+ΝΑ
+Services
+Segment revenue
+Segment gross margin (in % of corresponding revenue)
+3,234
+3,379
+3,678
+3,390
+3,240
+34.1
+31.5
+26.7
+23.9
+23.7
+4.7
+41.7
+Segment margin (Segment profit in % of Segment revenue)
+NA
+Qualtrics
+Segment revenue
+929
+681
+508
+ΝΑ
+NA
+Segment gross margin (in % of corresponding revenue)
+79.6
+77.6
+78.3
+ΝΑ
+ΝΑ
+Segment profit
+44
+-4
+-9
+ΝΑ
+22.5
+Services gross margin (in % of corresponding revenue, IFRS)
+108.02
+11.0
+11.8
+Return on SAP shares4, 10-year investment period (in %)
+9.0
+6.9
+15.6
+7.9
+8.6
+Return on SAP shares, 5-year investment period (in %)
+12.8
+-7.0
+38.4
+13.9
+-10.9
+Return on SAP shares4, 1-year investment period (in %)
+114.8
+106.8
+147.8
+131.7
+153.4
+Market capitalization' (in € billions)
+82.43
+82.47
+84.31
+87.63
+101.78
+16.5
+SAP share price - low (in €)
+13.2
+332/338
+29,580
+32,244
+7
+Number of employees in research and development5,
+86,999
+93,709
+99,157
+101,476
+104,364
+Number of employees, annual average5
+88,543
+96,498
+10.2
+100,330
+107,415
+Number of employees'
+Employees and Personnel Expenses
+Additional
+Information
+Sustainability
+Consolidated Financial Further Information on
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+102,430
+100.35
+8,980
+124.72
+4.46
+Earnings per share, diluted (in €)
+4.43
+4.35
+5.11
+5.41
+6.73
+8,650
+11,230
+10,630
+11,510
+429
+4.35
+361
+318
+265
+15
+13
+12
+12
+11
+100
+100
+100
+100
+100
+338
+2.78
+3.42
+3.35
+142.26
+128.98
+SAP share price - peak (in €)
+93.45
+86.93
+120.32
+107.22
+129.40
+SAP share price? (in €)
+41
+44
+56
+41
+54
+Total dividend distributed³ (in % of profit after tax)
+1,671
+1,790
+1,886
+2,182
+2,890
+Total dividend distributed³
+1.40
+1.50
+1.58
+1.85
+2.45
+Dividend per share³ (in €)
+27,634
+7 Numbers at year end.
+27,060
+Personnel expenses
+110
+Net carbon emissions ¹¹ (in kilotons)
+Environment
+17.8
+-5.0
+-6.0
+4.0
+10.0
+Customer Net Promoter Score⁹
+Customer
+7.9
+7.6
+135
+10.7
+9.0
+94.6
+93.9
+93.3
+95.3
+92.8
+61
+60
+59
+62
+67
+79
+7.0
+78
+300
+325
+3 Numbers are based on the proposed dividend and on level of treasury stock at year end.
+4 Average annual return assuming all dividends are reinvested.
+2 As sum of current and non-current liability
+1 SAP Group. Amounts according to IFRS, unless otherwise stated.
+Renewable energy sourced (in %)
+Data center electricity consumption per € revenue³ (in Wh)
+Total data center electricity consumption (in GWh)
+Energy consumed per employee (in kWh)
+1,005
+1,055
+1,115
+879
+310
+941
+13.9
+12.6
+10.9
+4.9
+3.9
+Net carbon emissions ¹¹ per € revenue (in grams)
+3.7
+3.3
+3.0
+1.3
+1.0
+Net carbon emissions ¹¹ per employee5 (in tons)
+Total energy consumption ¹² (in GWh)
+80
+80
+81
+33.6
+34.3
+Women working at SAP (in %)
+56
+61
+45
+65
+45
+Operating profit per employee (in € thousands)
+121
+115
+131
+33.5
+122
+Personnel expenses per employee - excluding share-based payments (in € thousands)
+10,523
+10,765
+13,035
+12,336
+12,758
+Personnel expenses - excluding share-based payments
+11,643
+11,595
+14,870
+13,420
+15,552
+122
+33.0
+32.8
+Women in management (total, in % of total number of employees)
+85
+84
+83
+86
+83
+Total turnover rate (in %)
+Employee retention (in %)
+Leadership Trust Index (LTI, as NPS)
+Business Health Culture Index (BHCI, in %)
+Employee Engagement Index (in %)
+26.8
+27.5
+27.8
+29.0
+29.7
+Women managing teams 6.7 (in %)
+21.7
+21.1
+22.5
+23.5
+24.1
+Women managing managers6. 7 (in %)
+25.4
+25.7
+26.4
+27.5
+28.3
+24,872
+5 Full-time equivalents
+8 Data center electricity consumption normalized against € revenue represents the required energy to develop and operate solutions in internal and external data centers.
+9 Due to changes in sampling in 2018, Customer NPS is not fully comparable to the prior years' scores.
+2023
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Financial and Sustainability
+Publications
+We present our financial, social, and environmental performance in the SAP Integrated Report 2021,
+which is available at www.sapintegrated report.com. This SAP Integrated Report 2021 comprises all of
+the information required by accounting and disclosure standards applicable to us.
+The following publications are available in English at www.sap.com/investor, or in German at
+www.sap.de/investor.
+-
+-
+Annual Report on Form 20-F (IFRS, available in English only)
+SAP Integrated Report (PDF)
+SAP SE Statutory Financial Statements and Review of Operations (HGB, available in German only)
+Half-Year Reports
+SAP Compensation Report
+Management Report
+SAP Quarterly Statements
+Complete information on the governance of SAP SE is available at www.sap.com/corpgovernance.
+Materials include:
+Information about the management of SAP SE, including the current members of the Executive
+Board and the Supervisory Board, their CVs and memberships in boards of other companies
+Information about the Supervisory Boards' committees, including their tasks and current
+composition
+Details of managers' (the Executive and Supervisory Board members') transactions in SAP
+securities
+Documents relating to SAP SE's Annual General Meetings of Shareholder, including voting results
+SAP SE's Articles of Incorporation
+-
+Agreement on the Involvement of Employees in SAP SE
+German Code of Corporate Governance
+―
+Declaration of Implementation pursuant to the German Stock Corporation Act, Section 161
+Global Code of Ethics and Business Conduct for Employees Corporate Governance Statement
+pursuant to the German Commercial Code, Sections 315d and 289f
+Rules of Procedure for the SAP SE Supervisory Board
+SAP INVESTOR, SAP's quarterly shareholder magazine
+(in German)
+Rules of Procedure for the SAP SE Executive Board
+Stakeholders
+To Our
+Additional
+Information
+Addresses
+Group Headquarters
+SAP SE
+Dietmar-Hopp-Allee 16
+69190 Walldorf
+Germany
+Tel. +49 6227 74 74 74
+Fax +49 6227 75 75 75
+E-mail info@sap.com
+Web site www.sap.com
+Combined Group
+The addresses of all our international subsidiaries and sales partners are available on our public Web
+For more information about the matters discussed in the report, contact:
+Investor Relations
+Tel. +49 6227 76 73 36
+Fax +49 6227 74 08 05
+E-mail investor@sap.com
+Web site www.sap.com/investor
+Press
+Tel. +49 6227 74 63 15
+E-mail press@sap.com
+Web site www.sap.com/press
+SAP
+SAP Integrated Report 2021
+site at www.sap.com/directory/main.html.
+Results for the fourth quarter and full year 2022
+Profile of Skills and Expertise for the SAP SE Supervisory Board
+335/338
+Publication Details
+Publisher
+SAP SE
+Investor Relations
+Concept and Realization
+SAP Integrated Report project team
+with the support of SAP solutions
+Printing
+SAP has decided to publish the SAP Integrated Report solely as an electronic document. A hard copy
+of the audited consolidated financial statements can also be requested free of charge by sending an
+email to investor@sap.com or via phone +49 6227 7-67336.
+Copyright
+SAP SE
+Additional
+Information
+Dietmar-Hopp-Allee 16
+Germany
+© 2022 SAP SE or an SAP affiliate company. All rights reserved. No part of this publication may be
+reproduced or transmitted in any form or for any purpose without the express permission of SAP SE
+or an SAP affiliate company.
+SAP and other SAP products and services mentioned herein as well as their respective logos are
+trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other
+countries. All other product and service names mentioned are the trademarks of their respective
+companies. Please see www.sap.com/about/legal/copyright.html for additional trademark information
+and notices.
+337/338
+Group Headquarters
+SAP SE
+Dietmar-Hopp-Allee 16
+69190 Walldorf
+Germany
+www.sap.com
+www.sap.com/investor
+SAP
+69190 Walldorf
+Overview of the participation of Supervisory Board members in meetings of the Supervisory Board
+and its committees
+Further Information on
+Sustainability
+Management Report
+336/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Additional SAP policies are made public at www.sap.com/sustainability.
+Consolidated Financial
+Statements IFRS
+―
+SAP Global Health and Safety Management Policy
+SAP Environmental Policy
+SAP Global Anti-Discrimination Statement
+SAP's Guiding Principles for Artificial Intelligence and SAP Global Artificial Intelligence Ethics Policy
+SAP Supplier Code of Conduct
+SAP Partner Code of Conduct
+SAP's Global Tax Principles
+Further, the SAP Glossary is available at www.sap.com/glossary
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+SAP Human Rights Commitment Statement
+January 26
+6 Relates to different levels of management position.
+10 As at January 1, 2019, we changed our free cash flow definition to avoid effects resulting from the adoption of IFRS 16.
+11 In CO2 equivalents
+12 Before 2021, our total energy consumption covered direct energy consumption (Scope 1) and selected indirect energy consumption (Scope 2). In 2021, we added indirect
+energy consumption of our value chain (Scope 3) to all years shown.
+333/338
+334/338
+SAP
+SAP Integrated Report 2021
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+To Our
+Addresses
+Financial Calendar and
+Results for the first quarter 2022
+October 25
+July 21
+May 23
+Annual General Meeting of Shareholders, virtual event
+Dividend payment
+April 22
+2022
+Financial Calendar
+May 18
+Results for the second quarter and half-year 2022
+Results for the third quarter 2022
+Scott Russell
+To the best of our knowledge, and in accordance with the applicable reporting principles, the
+Consolidated Financial Statements give a true and fair view of the assets, finances, and operating
+results of the SAP Group, and the management report of the Group and SAP SE includes a fair review
+of the development and performance of the business and the position of the Group and SAP SE,
+together with a description of the principal opportunities and risks associated with the expected
+development of the Group and SAP SE.
+Walldorf, February 23, 2022
+SAP SE
+Walldorf, Germany
+Executive Board of SAP SE
+Christian Klein
+Sabine Bendiek
+Luka Mucic
+Jürgen Müller
+SAP
+Julia White
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Thomas Saueressig
+Responsibility Statement
+Professor Hasso Plattner
+Consolidated Financial
+Statements IFRS
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Changes on the Executive Board and Supervisory Board in 2021
+After 13 years at SAP, most recently as Executive Board member responsible for Customer Success,
+Adaire Fox-Martin retired from the Executive Board on January 31, 2021. We thank Adaire Fox-Martin
+for her valuable contribution to the success of the Company over these many years. Her successor,
+Scott Russell, took over said Board area as a new member of the Executive Board effective
+February 1, 2021. In addition, Julia White joined the Executive Board on March 1, 2021, becoming
+SAP's chief marketing officer.
+Pekka Ala-Pietilä stepped down from the Supervisory Board at the end of the Annual General Meeting
+of Shareholders on May 12, 2021. The Supervisory Board would like to sincerely thank him for his
+invaluable contribution for the benefit of the Company. On May 12, 2021, the Annual General Meeting
+of Shareholders elected Rouven Westphal to the Supervisory Board as a successor for Pekka Ala-
+Pietilä. Qi Lu, who was initially appointed by the court as member of the Supervisory Board on
+December 21, 2021, was likewise elected to the Supervisory Board by the Annual General Meeting of
+Shareholders. Christa Vergien-Knopf left the Supervisory Board as employee representative on
+August 10, 2021, and was succeeded by Peter Lengler effective the same day. The Supervisory Board
+also thanks Christa Vergien-Knopf for her work on the Supervisory Board. With effect from
+July 8, 2021, Panagiotis Bissiritsas resigned from his seat as employee representative on the
+Supervisory Board. He was succeeded by Manuela Asche-Holstein. Lastly, Ralf Zeiger was removed
+from the SAP SE Supervisory Board by order of the Mannheim Municipal Court dated
+October 20, 2021, which came into effect on October 28, 2021. Helmut Stengele replaced Ralf Zeiger
+as employee representative on October 29, 2021.
+The ongoing COVID-19 pandemic continued to challenge us all in 2021. The Supervisory Board
+thanks the current members of the Executive Board and all SAP employees for their tireless
+commitment to SAP under these extraordinary circumstances.
+For the Supervisory Board
+Additional
+Information
+(Chairperson)
+31/338
+32/338
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Further Information on
+Sustainability
+Independent Auditor's Report
+We conducted our audit of the consolidated financial statements and of the Group Management
+Report in accordance with Section 317 HGB and the EU Audit Regulation No. 537/2014 (referred to
+subsequently as “EU Audit Regulation") and in compliance with German Generally Accepted
+Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of
+Public Auditors in Germany] (IDW) as well as in supplementary compliance with the International
+Standards on Auditing (ISAs) and guidelines of the Public Company Accounting Oversight Board
+(United States).
+TO SAP SE, Walldorf
+In the financial year 2021 SAP generated revenue of EUR 27,842 million, of which EUR 14,660 million
+relate to revenues from sales of software licenses and support.
+The evaluation of software licenses revenue recognition bears an inherent risk of errors as SAP's
+software customer contracts are complex. SAP defined detailed policies, procedures and processes to
+manage the accounting for its customer contracts, which are also described in the notes. Applying
+them often requires significant judgments, in particular in the assessment of the following:
+1. whether various contracts are economically interrelated,
+2. whether products and services qualify as separate performance obligations, and
+3. the allocation of the transaction price of a customer contract to the performance obligations in the
+contract based on standalone-selling prices.
+There is the financial statement risk that the recognition cut-off of software license revenue as at the
+balance sheet date is incorrect and that revenues are allocated incorrectly.
+OUR AUDIT APPROACH
+On software revenue recognition, we evaluated the compliance of SAP's accounting policies with the
+IFRS Framework and IFRS 15.
+We evaluated the design and tested the operating effectiveness of certain internal controls related to
+the revenue process including controls related to the identification of economically interrelated
+contracts, separate performance obligations and allocation of the transaction price to the performance
+obligations in the contract.
+Refer to note (A.1) - Revenue and Group Management Report, section Risk Management and Risks.
+THE FINANCIAL STATEMENT RISK
+For a sample of customer contracts, which were selected using a statistical approach, we:
+inspected the underlying contractual agreements and other related documents as well as inquired
+with SAP's accounting and/or sales representatives to evaluate SAP's assessment of whether
+contracts were economically interrelated as well as to evaluate the identified performance
+obligations and allocation of transaction price,
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+obtained and inspected external confirmations of the key terms and conditions from the respective
+customers to test whether contracts were economically interrelated, as well as to evaluate the
+identified performance obligations,
+Software license revenue recognition
+Key audit matters are those matters that, in our professional judgment, were of most significance in
+our audit of the consolidated financial statements for the financial year from January 1 to December
+31, 2021. These matters were addressed in the context of our audit of the consolidated financial
+statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on
+these matters.
+Key Audit Matters in the Audit of Consolidated Financial Statements
+Report on the Audit of the Consolidated Financial Statements and
+of the Group Management Report
+Opinions
+We have audited the consolidated financial statements of SAP SE, Walldorf, and its subsidiaries (the
+Group), which comprise the consolidated statements of financial position as at December 31, 2021,
+consolidated income statements, consolidated statements of comprehensive income, consolidated
+statements of changes in equity and consolidated statements of cash flows for the financial year from
+January 1 to December 31, 2021 and notes to the consolidated financial statements, including a
+summary of significant accounting policies.
+In addition, we have audited the combined Group Management Report by the SAP Group and the
+Management Report of SAP SE, Walldorf ("Group Management Report") for the financial year from
+January 1 to December 31, 2021. In accordance with German legal requirements, we have not
+audited the content of those components of the Group Management Report specified in the "Other
+Information" section of our auditor's report.
+In our opinion, on the basis of the knowledge obtained in the audit,
+the accompanying consolidated financial statements comply, in all material respects, with the
+IFRSS as adopted by the EU and the additional requirements of German commercial law pursuant
+to Section 315e (1) HGB [Handelsgesetzbuch: German Commercial Code], as well as the IFRSS as
+adopted by the International Accounting Standards Board and, in compliance with these
+requirements, give a true and fair view of the assets, liabilities and financial position of the Group
+as at December 31, 2021, and of its financial performance for the financial year from January 1 to
+December 31, 2021 and
+the accompanying Group Management Report as a whole provides an appropriate view of the
+Group's position. In all material respects, this Group Management Report is consistent with the
+consolidated financial statements, complies with German legal requirements and appropriately
+presents the opportunities and risks of future development. Our opinion on the Group
+Management Report does not cover the content of those components of the Group Management
+Report specified in the "Other Information" section of the auditor's report.
+Pursuant to Section 322 (3) sentence 1 HGB, we declare that our audit has not led to any reservations
+relating to the legal compliance of the consolidated financial statements and of the Group
+Management Report.
+Basis for the Opinions
+33/338
+34/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+SAP has developed an adequate framework for determining the accounting treatment for its revenue.
+For the vast majority of the software arrangements entered into during 2021, it was clear which of
+SAP's revenue recognition policies should be applied. Where there was room for interpretation, SAP's
+judgment was balanced and appropriate.
+Additional
+Information
+Our responsibilities under those requirements, principles and standards are further described in the
+"Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and of the Group
+Management Report" section of our auditor's report. We are independent of the group entities in
+accordance with the requirements of European law and German commercial and professional law,
+and we have fulfilled our other German professional responsibilities in accordance with these
+requirements. In addition, in accordance with Article 10 (2) point (f) of the EU Audit Regulation, we
+declare that we have not provided non-audit services prohibited under Article 5 (1) of the EU Audit
+Regulation. We believe that the evidence we have obtained is sufficient and appropriate to provide a
+basis for our opinions on the consolidated financial statements and on the Group Management
+Report.
+For the consolidated financial statements and Group Management Report we have issued an unqualified auditor's report. The English
+language text below is a translation of the independent auditor's report.
+SAP Integrated Report 2021
+Further Information on
+Sustainability
+Assessment of the Group's uncertain tax treatments
+We also provide the Supervisory Board with a statement that we have complied with relevant
+independence requirements and communicate with them all relationships and other matters that may
+reasonably be thought to bear on our independence, and where applicable the related safeguards.
+From the matters communicated with the Supervisory Board, we determine those matters that were of
+most significance in the audit of the consolidated financial statements of the current period and are
+therefore the key audit matters. We describe these matters in our auditor's report, unless law or
+regulation precludes public disclosure about the matter.
+We communicate with the Supervisory Board regarding, among other matters, the planned scope and
+timing of the audit and significant audit findings, including any significant deficiencies in internal
+control that we identify during our audit.
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP
+SAP Integrated Report 2021
+Other Legal and Regulatory Requirements
+Evaluate the consistency of the Group Management Report with the consolidated financial
+statements, its conformity with German law, and the view of the Group's position it provides.
+Perform audit procedures on the prospective information presented by the Executive Board in the
+Group Management Report. On the basis of sufficient appropriate audit evidence we evaluate, in
+particular, the significant assumptions used by the Executive Board as a basis for the prospective
+information, and evaluate the proper derivation of the prospective information from these
+assumptions. We do not express a separate opinion on the prospective information and on the
+assumptions used as a basis. There is a substantial unavoidable risk that future events will differ
+materially from the prospective information.
+Evaluate the overall presentation, structure and content of the consolidated financial statements,
+including the disclosures, and whether the consolidated financial statements present the
+underlying transactions and events in a manner that the consolidated financial statements give a
+true and fair view of the assets, liabilities, financial position and financial performance of the Group
+in compliance with IFRSS as adopted by the EU as well as with IFRSS as adopted by the
+International Accounting Standards Board and the additional requirements of German commercial
+law pursuant to Section 315e (1) HGB.
+Obtain an understanding of internal control relevant to the audit of the consolidated financial
+statements and of arrangements and measures (systems) relevant to the audit of the Group
+Management Report in order to design audit procedures that are appropriate in the circumstances.
+Evaluate the appropriateness of accounting policies used by the Executive Board and the
+reasonableness of accounting estimates made by the Executive Board and related disclosures.
+Conclude on the appropriateness of the Executive Board's use of the going concern basis of
+accounting and, based on the audit evidence obtained, whether a material uncertainty exists
+related to events or conditions that may cast significant doubt on the Group's ability to continue as
+a going concern. If we conclude that a material uncertainty exists, we are required to draw
+attention in the auditor's report to the related disclosures in the consolidated financial statements
+and in the Group Management Report or, if such disclosures are inadequate, to modify our
+respective opinions. Our conclusions are based on the audit evidence obtained up to the date of
+our auditor's report. However, future events or conditions may cause the Group to cease to be able
+to continue as a going concern.
+Identify and assess the risks of material misstatement of the consolidated financial statements and
+of the Group Management Report, whether due to fraud or error, design and perform audit
+procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
+provide a basis for our opinions. The risk of not detecting a material misstatement resulting from
+fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
+omissions, misrepresentations, or the override of internal control.
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
+accordance with Section 317 HGB and the EU Audit Regulation and in compliance with German
+Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der
+Wirtschaftsprüfer (IDW) as well as in supplementary compliance with ISAs and guidelines of the
+Public Company Accounting Oversight Board (United States) will always detect a material
+misstatement. Misstatements can arise from fraud or error and are considered material if, individually
+or in the aggregate, they could reasonably be expected to influence the economic decisions of users
+taken on the basis of these consolidated financial statements and this Group Management Report.
+We exercise professional judgment and maintain professional scepticism throughout the audit. We
+also:
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
+business activities within the Group to express opinions on the consolidated financial statements
+and on the Group Management Report. We are responsible for the direction, supervision and
+performance of the group audit. We remain solely responsible for our opinions.
+SAP
+Report on Internal Control over Financial Reporting in the Consolidated Financial
+Statements pursuant to PCAOB
+We have audited the internal control over financial reporting in the consolidated financial statements
+of SAP SE, Walldorf, and its subsidiaries in place as at December 31, 2021. This control system is
+based on criteria set out in the Internal Control - Integrated Framework (2013) issued by the
+Committee of Sponsoring Organizations of the Treadway Commission (COSO).
+In addition, the company's management is responsible for such internal control that they have
+considered necessary to enable the preparation of ESEF documents that are free from material
+The company's management is responsible for the preparation of the ESEF documents including the
+electronic rendering of the consolidated financial statements and the group management report in
+accordance with Section 328 (1) sentence 4 item 1 HGB and for the tagging of the consolidated
+financial statements in accordance with Section 328 (1) sentence 4 item 2 HGB.
+We conducted our assurance work on the rendering of the consolidated financial statements and the
+group management report contained in the file made available and identified above in accordance
+with Section 317 (3a) HGB and the IDW Assurance Standard: Assurance Work on the Electronic
+Rendering of Financial Statements and Management Reports Prepared for Publication Purposes in
+Accordance with Section 317 (3a) HGB (IDW ASS 410 (10.2021)). Our responsibility in accordance
+therewith is further described below. Our audit firm applies the IDW Standard on Quality
+Management 1: Requirements for Quality Management in Audit Firms (IDW QS 1).
+In our opinion, the rendering of the consolidated financial statements and the group management
+report contained in the electronic file made available, identified above and prepared for publication
+purposes complies in all material respects with the requirements of Section 328 (1) HGB for the
+electronic reporting format. Beyond this assurance opinion and our audit opinion on the
+accompanying consolidated financial statements and the accompanying group management report
+for the financial year from January 1, 2021 to December 31, 2021 contained in the "Report on the
+Audit of the Consolidated Financial Statements and the Group Management Report” above, we do not
+express any assurance opinion on the information contained within these renderings or on the other
+information contained in the file identified above.
+19f70e106b19b514fedebc79853c98601bd2) made available and prepared for publication purposes
+complies in all material respects with the requirements of Section 328 (1) HGB for the electronic
+reporting format ("ESEF format"). In accordance with German legal requirements, this assurance work
+extends only to the conversion of the information contained in the consolidated financial statements
+and the group management report into the ESEF format and therefore relates neither to the
+information contained in these renderings nor to any other information contained in the file identified
+above.
+We have performed assurance work in accordance with Section 317 (3a) HGB to obtain reasonable
+assurance about whether the rendering of the consolidated financial statements and the group
+management report (hereinafter the “ESEF documents") contained in the electronic file „sap-2021-12-
+31AR.zip" (SHA256 hash value: 3121b1e38e2abffbffc947b3749e
+Report on the Assurance on the Electronic Rendering of the Consolidated Financial
+Statements and the Group Management Report Prepared for Publication Purposes
+in Accordance with Section 317 (3a) HGB
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
+for our opinion.
+Our responsibility is to express an opinion on the internal control over financial reporting in the
+consolidated financial statements based on our audit. We conducted our audit in accordance with the
+standards of the Public Company Accounting Oversight Board (United States). Those standards
+require that we plan and perform the audits to obtain reasonable assurance about whether effective
+internal control over financial reporting in the consolidated financial statements was maintained in all
+material respects. Our audit of internal control over financial reporting in the consolidated financial
+statements included obtaining an understanding of internal control over financial reporting, assessing
+the risk of material deficiencies in internal control, testing and evaluating the design and operating
+effectiveness of internal control based on this assessment, and performing such other procedures as
+we considered necessary in the circumstances.
+Auditor's Responsibility for the Internal Control over Financial Reporting in the
+Consolidated Financial Statements
+Information
+Additional
+Opinion on Internal Control over Financial Reporting in the Consolidated Financial
+Statements
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+40/338
+39/338
+The Supervisory Board is responsible for overseeing the Group's internal control over financial
+reporting in the consolidated financial statements.
+Because of its inherent limitations, internal control over financial reporting may not prevent or detect
+material 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.
+A company's internal control over financial reporting in the consolidated financial statements is a
+process designed to provide reasonable assurance regarding the reliability of financial reporting in the
+consolidated financial statements and the preparation of financial statements for external purposes in
+accordance with generally accepted accounting principles. A company's internal control over financial
+reporting in the consolidated financial statements includes policies and procedures to (1) ensure an
+accounting system that in reasonable detail accurately and fairly reflects the transactions and
+dispositions of the company's assets, (2) provide reasonable assurance that transactions are recorded
+as necessary to permit preparation of financial statements in accordance with generally accepted
+accounting principles, 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.
+SAP SE's Executive Board is responsible for maintaining effective internal control over financial
+reporting in the consolidated financial statements and assessing its effectiveness, which is included in
+the Executive Board's report on the internal control over consolidated financial reporting.
+Executive Board's and Supervisory Board's Responsibility for the Internal Control
+over Financial Reporting in the Consolidated Financial Statements
+In our opinion, SAP maintained, in all material respects, effective internal control over financial
+reporting in the consolidated financial statements as at December 31, 2021 based on the criteria set
+out in the Internal Control - Integrated Framework (2013) issued by the COSO.
+Management Report
+38/338
+37/338
+Our objectives are to obtain reasonable assurance about whether the consolidated financial
+statements as a whole are free from material misstatement, whether due to fraud or error, and
+whether the Group Management Report as a whole provides an appropriate view of the Group's
+position and, in all material respects, is consistent with the consolidated financial statements and the
+knowledge obtained in the audit, complies with the German legal requirements and appropriately
+presents the opportunities and risks of future development, as well as to issue an auditor's report that
+includes our opinions on the consolidated financial statements and on the Group Management
+Report.
+OUR AUDIT APPROACH
+There is the risk for the consolidated financial statements that the valuations are not appropriate.
+There is also the risk that the related disclosures in the notes are not appropriate.
+The measurement of fair value of such investments is complex and, with regard to the assumptions
+made, highly dependent on management's estimates and judgments. This applies particularly to
+selection of the appropriate valuation method and the determination of the significant unobservable
+inputs.
+As of December 31, 2021, the Company holds unlisted equity securities with a carrying amount of
+EUR 4,871 million. These financial instruments are classified as equity securities at fair value through
+profit and loss and their valuations are based on significant unobservable inputs (Level 3 of the fair
+value hierarchy).
+THE FINANCIAL STATEMENT RISK
+Refer to note (D.6) - Equity Investments and note (F.2) - Fair Value Disclosures on Financial
+Instruments
+Valuation of unlisted equity securities
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Stakeholders
+We evaluated the design and implementation and tested the operating effectiveness of certain
+internal controls over the Company's investments process. This included controls related to selection
+of the valuation model and the relevance and reliability of the significant unobservable inputs. We also
+involved financial instrument valuation professionals with specialized skills and knowledge, who
+assisted in testing management's ability to produce a fair value estimate compliant with IFRS 13 Fair
+Value Measurements for a selection of investments by (1) testing the appropriateness of the valuation
+method selected by comparing it to our expectation based on industry experience and knowledge of
+the investment, and (2) assessing the reliability and relevance of the significant unobservable inputs
+by comparing them to historical and market information.
+Combined Group
+SAP Integrated Report 2021
+SAP
+36/338
+35/338
+SAP's judgments as to the amounts recognized as tax provisions for tax uncertainties as of December
+31, 2021 are appropriate. The disclosures in the notes to the consolidated financial statements are
+complete and appropriate.
+OUR OBSERVATIONS
+Finally, we assessed whether the disclosures in the notes with respect to uncertain tax treatments are
+complete and appropriate.
+We evaluated the design and tested the operating effectiveness of 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, skills and objectivity of the external experts and
+evaluated the related expert opinions. We inquired of the Group's tax department and inspected
+correspondence with the relevant tax authorities. We involved tax professionals with specialized skills
+and knowledge, who assisted in evaluating SAP's conclusions over the estimate of tax uncertainties
+based on their knowledge and experience regarding the application of relevant legislation by tax
+authorities and courts.
+OUR AUDIT APPROACH
+SAP operates in multiple tax jurisdictions with complexities and uncertainties due to different
+interpretations of tax laws, such as those involving transfer pricing and intercompany transactions
+between SAP Group entities. The determination of provisions for tax uncertainties requires SAP to
+make judgments on tax issues and develop estimates regarding SAP's exposure to tax risks. SAP
+regularly engages external experts to provide tax opinions to support their own risk assessment. The
+risk for the consolidated financial statements relates to the completeness, measurement and
+disclosure of the provision for uncertain tax treatments. As of December 31, 2021 SAP disclosed
+contingent liabilities relating to tax uncertainties of EUR 1,283 million.
+THE FINANCIAL STATEMENT RISK
+Refer to note (C.5) - Income Taxes, and Group Management Report section Risk Management and
+Risks.
+To Our
+Finally, we assessed whether the related disclosures in the notes regarding the determination of fair
+value are appropriate.
+OUR OBSERVATIONS
+The valuation method used for the valuation of unlisted equity securities is appropriate and in line
+with the accounting policies. The Company's underlying assumptions and data are appropriate. The
+related disclosures in the notes are appropriate.
+The Supervisory Board is responsible for overseeing the Group's financial reporting process for the
+preparation of the consolidated financial statements and of the Group Management Report.
+Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
+and of the Group Management Report
+In preparing the consolidated financial statements, the Executive Board is responsible for assessing
+the Group's ability to continue as a going concern. The Executive Board also has the responsibility for
+disclosing, as applicable, matters related to going concern. In addition, the Executive Board is
+responsible for financial reporting based on the going concern basis of accounting unless there is an
+intention to liquidate the Group or to cease operations, or there is no realistic alternative but to do so.
+Furthermore, the Executive Board is responsible for the preparation of the Group Management Report
+that, as a whole, provides an appropriate view of the Group's position and is, in all material respects,
+consistent with the consolidated financial statements, complies with the German legal requirements
+and appropriately presents the opportunities and risks of future development. In addition, the
+Executive Board is responsible for such arrangements and measures (systems) as the Executive
+Board has considered necessary to enable the preparation of the Group Management Report that is
+in accordance with the applicable German legal requirements, the German Accounting Standards
+number 17 and 20 (GAS 17, GAS 20) and the IFRS Practice Statement Management Commentary
+and to be able to provide sufficient appropriate evidence for the assertions in the Group Management
+Report.
+The Executive Board of SAP SE is responsible for the preparation of the consolidated financial
+statements that comply, in all material respects, with IFRSS as adopted by the EU and the additional
+requirements of German commercial law pursuant to Section 315e (1) HGB as well as IFRSS as
+adopted by the International Accounting Standards Board and that the consolidated financial
+statements, in compliance with these requirements, give a true and fair view of the assets, liabilities,
+financial position, and financial performance of the Group. In addition, the Executive Board is
+responsible for such internal control as the Executive Board has determined necessary to enable the
+preparation of consolidated financial statements that are free from material misstatement, whether
+due to fraud or error.
+Responsibilities of the Executive Board and the Supervisory Board for the
+Consolidated Financial Statements and the Group Management Report
+In addition, we were engaged to perform an independent assurance engagement on selected
+qualitative and quantitative sustainability disclosures of the integrated report 2021. In regard to the
+nature, extent and conclusions of this independent assurance engagement we refer to our
+Independence Assurance Report dated on February 23, 2022.
+If, based on the work we have performed, we conclude that there is a material misstatement of this
+other information, we are required to report that fact. We have nothing to report in this regard.
+otherwise appears to be materially misstated.
+is materially inconsistent with the consolidated financial statements, with the Group Management
+Report information audited for content or our knowledge obtained in the audit, or
+In connection with our audit, our responsibility is to read the other information and, in so doing, to
+consider whether the other information
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+Our opinions on the consolidated financial statements and on the Group Management Report do not
+cover the other information and consequently we do not express an opinion or any other form of
+assurance conclusion thereon.
+The other information does not include the consolidated financial statements, group management
+report information and our auditor's report thereon.
+The other information also includes the annual report on Form 20-F and remaining parts of the annual
+report.
+Information extraneous to the Group Management Report and marked as unaudited.
+the corporate governance statement, included in section “Corporate Governance Fundamentals" of
+the Group Management Report, and
+the combined non-financial statement, included in section "Non-Financial Statement Including
+Information on Sustainable Activities" of the Group Management Report,
+-
+The Executive Board and the Supervisory Board, respectively, of SAP SE is responsible for the other
+information. The other information comprises the following components of the Management Report,
+whose content was not audited:
+Other Information
+evaluated the allocation of the transaction price for each of the deliverables that qualified as a
+separate performance obligation by assessing the methodology applied and testing mathematical
+accuracy of the underlying calculations.
+For the majority of software support revenue, we compared the actual support revenue with the
+support revenue that is expected based on last year's support revenue, the loss rate of last year's
+support contracts and the current year software sales that trigger additional support revenue.
+OUR OBSERVATIONS
+Wirtschaftsprüfungsgesellschaft
+SAP
+General Information About This Management Report
+Strategy
+50
+Performance Management System
+59
+Products, Research & Development, and Services
+Combined Group
+Management Report
+68
+28
+Financial Performance: Review and Analysis
+74
+Non-Financial Statement Including Information on Sustainable Activities
+99
+Security, Data Protection, and Privacy
+52
+103
+Additional
+Information
+Consolidated Financial
+Statements IFRS
+Mannheim, February 23, 2022
+KPMG AG
+Wirtschaftsprüfungsgesellschaft
+Beyer
+Wirtschaftsprüfer
+[German Public Auditor]
+Further Information on
+Sustainability
+Wiegand
+Wirtschaftsprüfer
+SAP
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+[German Public Auditor]
+(https://www.kpmg.de/bescheinigungen/lib/aab_english.pdf). By reading and using the information
+contained in this assurance report, each recipient confirms notice of the provisions contained therein
+(including the limitation of our liability as stipulated in No. 9) and accepts the validity of the General
+Engagement Terms with respect to us.
+Customers
+Employees and Social Investments
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+To Our
+Information
+Basis of Presentation
+This combined group management report by the SAP Group (collectively, “we,” “us,” “our," "SAP,"
+"Group," or "Company") and the management report of SAP SE have been prepared in accordance
+with sections 289, 289a, 289b, 289f, 315, 315a, 315b, and 315d of the German Commercial Code and
+German Accounting Standards (GAS) No. 17 and 20. The combined group management report is also
+a management commentary complying with the International Financial Reporting Standards (IFRS)
+Practice Statement "Management Commentary."
+Our auditor, KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG), audited SAP's combined group
+management report, except for some information that relates to the Non-Financial Statement
+Including Information on Sustainable Activities that was not subject to the statutory audit of our
+combined group management report, but on which a limited assurance engagement was performed.
+The Security, Data Protection, and Privacy; Employees and Social Investments; Energy and Emissions;
+Business Conduct; and Human Rights and Labor Standards sections include such information that
+was not subject to the statutory audit of our combined group management report, but on which a
+limited assurance engagement was performed. These sections contain further explanations about the
+audit scope in an info box at the end of the respective section marked by the symbol .
+For more information about the scope of the assurance and the underlying reporting criteria, see
+KPMG's Independent Auditor's Report, the Limited Assurance Report of the Independent Auditor
+Regarding the Combined Non-Financial Statement, and the Assurance Report of the Independent
+Auditor Regarding Sustainability Information.
+All of the information in this report relates to the situation as at December 31, 2021, or the fiscal year
+ended on that date, unless otherwise 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.
+Forward-Looking Statements
+General Information About
+This Management Report
+107
+SAP Integrated Report 2021
+50/338
+108
+Energy and Emissions
+Corporate Governance Fundamentals
+Business Conduct
+Human Rights and Labor Standards
+Risk Management and Risks
+SAP
+Expected Developments and Opportunities
+123
+126
+129
+131
+155
+49/338
+116
+Our assignment for the Executive Board of SAP SE, Walldorf, and professional liability as described
+above was governed by the General Engagement Terms for Wirtschaftsprüfer and
+Wirtschaftsprüfungsgesellschaften (Allgemeine Auftragsbedingungen für Wirtschaftsprüfer und
+Wirtschaftsprüfungsgesellschaften) in the version dated January 1, 2017
+This assurance report is issued for purposes of the Executive Board of SAP SE, Walldorf, only. We
+assume no responsibility with regard to any third parties.
+Restriction of Use/Clause on General Engagement Terms
+We have performed an independent assurance engagement on selected qualitative and quantitative
+sustainability disclosures as well as on selected quantitative sustainability indicators included in the
+Integrated Report 2021 (further “Report”) for the business year from January 1 to December 31, 2021
+of SAP SE, Walldorf (further "Company" or "SAP").
+For the selected quantitative sustainability indicators Business Health Culture Index; Employee
+Engagement Index; Employee Retention Rate; Ratio of Women in Management; Total Gross and Net
+Greenhouse Gas Emissions (Scope 1, Scope 2 and selected Scope 3 emissions including, for
+instance, business flights and employee commuting); Renewable Energy Certificates (Energy Attribute
+Certificates); Total Energy Consumption; and Customer Net Promoter Score, including the explanatory
+notes supplementing these indicators (further "sustainability indicators"), a reasonable assurance
+engagement was performed.
+For selected qualitative and quantitative sustainability disclosures included in the "Combined Group
+Management Report" (sections: General Information About This Management Report; Human Rights
+and Labor Standards; Social Investments), as well as included in "Further Information on Economic,
+Environmental, and Social Performance" (sections: Materiality; Stakeholder Engagement;
+Sustainability Management; Sustainable Procurement; Waste and Water; Public Policy; Non-Financial
+Notes: Social Performance, and Non-Financial Notes: Environmental Performance; GRI Content Index
+and UN Global Compact Communication on Progress) (further "sustainability disclosures") a limited
+assurance engagement was performed.
+Selected sustainability disclosures included in the scope of our assurance engagement are marked in
+the GRI Content Index with the following symbol: „✔“.
+Management's Responsibility
+The legal representatives of SAP are responsible for the preparation of the Report in accordance with
+the Reporting Criteria. SAP's Report applies the principles and standard disclosures of the Global
+Reporting Initiative (GRI) Sustainability Reporting Standards, the Corporate Accounting and Reporting
+Standard, the Greenhouse Gas Protocol Scope 2 Guidance, and the Corporate Value Chain (Scope 3)
+Accounting and Reporting Standard of the Greenhouse Gas Protocol Initiative by the World Resources
+Institute and the World Business Council for Sustainable Development, in combination with internal
+guidelines, as described in the "Non-Financial Notes: Social Performance" and the "Non-Financial
+Notes: Environmental Performance" as Reporting Criteria (further: “Reporting Criteria”).
+To the Executive Board of SAP SE, Walldorf
+The responsibility includes the selection and application of appropriate methods to prepare the
+Report and the use of assumptions and estimates for individual qualitative and quantitative
+sustainability disclosures, which are reasonable under the circumstances. Furthermore, this
+responsibility includes designing, implementing and maintaining systems and processes relevant for
+the preparation of the Report in a way that is free of - intended or unintended – material
+misstatements.
+SAP Integrated Report 2021
+To Our
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+SAP
+Further Information on
+Sustainability
+Assurance Report of the
+Independent Auditor
+regarding Sustainability
+Information
+Further Information on
+Sustainability
+Beyer
+Wirtschaftsprüfer
+[German Public Auditor]
+Wiegand
+Wirtschaftsprüfer
+[German Public Auditor]
+45/338
+Additional
+Information
+46/338
+SAP Integrated Report 2021
+Mannheim, February 23, 2022
+Combined Group
+Stakeholders
+Management Report
+Consolidated Financial
+Statements IFRS
+SAP
+Additional
+Information
+Independence and Quality Assurance on the Part of the Auditing
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+SAP
+Additional
+Information
+Auditing the 2021 data using internal and external documentation in order to determine in detail
+whether the data correspond to the information in the relevant underlying sources, and whether all
+the relevant information contained in such underlying sources has been included in SAP's
+Integrated Report.
+- Conducting (remote) site visits to Walldorf, St. Leon Rot (both Germany), Newtown Square (USA)
+und Vancouver (Canada) to assess the quality of information, management systems and the
+reliability of the data as reported to corporate level.
+In our opinion, we obtained sufficient and appropriate evidence for reaching a conclusion for the
+assurance engagement.
+Conclusions
+In our opinion the above-mentioned sustainability indicators in the Report, including the Non-Financial
+Notes supplementing these indicators, of SAP SE for the business year from January 1 to December
+31, 2021 are presented, in all material respects, in accordance with the Reporting Criteria.
+Based on the procedures performed and the evidence obtained for the limited assurance, nothing has
+come to our attention that causes us to believe that the above-mentioned sustainability disclosures of
+SAP SE for the business year from January 1 to December 31, 2021, published in the Report, are not
+prepared, in all material respects, in accordance with the Reporting Criteria.
+An evaluation of the design, existence, and testing of the operation of the systems and methods
+used to collect and process data reported for Business Health Culture Index; Employee
+Engagement Index; Employee Retention Rate; Ratio of Women in Management; Total Gross and
+Net Greenhouse Gas Emissions (Scope 1, Scope 2 and selected Scope 3 emissions including, for
+instance, business flights and employee commuting); Renewable Energy Certificates (Energy
+Attribute Certificates); Total Energy Consumption; and Customer Net Promoter Score, including the
+aggregation of the data into the information as presented in the Integrated Report.
+48/338
+47/338
+In addition, we conducted the following procedures to obtain reasonable assurance:
+Firm
+In performing this engagement, we applied the legal provisions and professional pronouncements
+regarding independence and quality assurance, in particular the Professional Code for German Public
+Auditors and Chartered Accountants (in Germany) and the quality assurance standard of the German
+Institute of Public Auditors (Institut der Wirtschaftsprüfer, IDW) regarding quality assurance
+requirements in audit practice (IDW QS 1).
+Practitioner's Responsibility
+Our responsibility is to express a conclusion based on our work performed within the assurance
+engagement on the sustainability indicators and the sustainability disclosures described above.
+We conducted our work in accordance with the International Standard on Assurance Engagements
+(ISAE) 3000 (Revised): "Assurance Engagements other than Audits or Reviews of Historical Financial
+Information", published by IAASB.
+Accordingly, we have to comply with our professional duties and to plan and perform the assurance
+engagement in such a way that we, respecting the principle of materiality, reach our conclusion with a
+reasonable level of assurance on the above-mentioned sustainability indicators. The assurance of the
+sustainability indicators encompasses the performance of assurance procedures to obtain evidence
+for the information included in the Report. The choice of assurance procedures is subject to the
+auditor's own judgement.
+This standard requires that we plan and perform the assurance engagement to obtain limited
+assurance whether any matters have come to our attention that cause us to believe that the above-
+mentioned sustainability disclosures of the entity for the business year January 1 to December 31,
+2021 have not been prepared, in all material respects, in accordance with the Reporting Criteria. We
+do not, however, issue a separate conclusion for each disclosure. As the assurance procedures
+performed in a limited assurance engagement are less comprehensive than in a reasonable
+assurance engagement, the level of assurance obtained is substantially lower. The choice of
+assurance procedures is subject to the auditor's own judgement.
+Within the scope of our engagement, we performed amongst others the following procedures when
+conducting the limited assurance:
+-
+Evaluation of the process for determining material aspects and respective boundaries, including
+results of SAP's stakeholder engagement.
+Risk analysis, including a media search, to identify relevant sustainability aspects for SAP in the
+reporting period.
+- Interviewing management at corporate level responsible for sustainability performance goal setting
+and monitoring process.
+Reviewing the suitability of the internally developed reporting criteria.
+Evaluation of the design and implementation of the systems and processes for the collection,
+processing and control of the data on sustainability performance indicators, including the
+consolidation of the data.
+Interviews with relevant staff at corporate level responsible for providing the data, carrying out
+internal control procedures and consolidating the data, including the “Non-Financial Notes".
+Evaluating internal and external documentation to determine whether selected qualitative claims
+and quantitative indicators on sustainability performance are supported by sufficient evidence.
+Reviewing the consistency of GRI Standards in accordance with “Core Option” as declared by SAP
+with sustainability performance information presented in the Integrated Report.
+This management report contains forward-looking statements and information based on the beliefs of,
+and assumptions made by, SAP management using information currently available to them. Any
+statements contained in this report that are not historical facts are forward-looking statements as
+defined in the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-
+looking statements on our current expectations, assumptions, and projections about future conditions
+and events. As a result, our forward-looking statements and information are subject to uncertainties
+and risks, many of which are beyond our control. If one or more of these uncertainties or risks
+materializes, or if management's underlying assumptions prove incorrect, our actual results could
+differ materially from those described in or inferred from our forward-looking statements and
+information. We describe these risks and uncertainties in the Risk Management and Risks section.
+The words "aim,” “anticipate,” “assume,” “believe,” “continue,” “could,” “counting on," "is confident,”
+"development," "estimate,” “expect,” “forecast,” “future trends," "guidance,” “intend,” “may,” “might,"
+"outlook,” “plan,” “predict,” “project,” “seek,” “should,” “strategy,” “want,” “will,” “would,” and similar
+expressions as they relate to us are intended to identify such forward-looking statements. Such
+statements include, for example, those made in the Operating Results section, our quantitative and
+qualitative disclosures about market risk pursuant to the International Financial Reporting Standards
+(IFRS), namely IFRS 7 and related statements in our Notes to the Consolidated Financial Statements;
+KPMG AG
+To Our
+This assurance report is issued for purposes of the Supervisory Board of SAP SE, Walldorf only. We
+assume no responsibility with regard to any third parties.
+- Assessing the design and implementation of systems and processes for identifying, handling and
+monitoring information on environmental, employee and social matters, respect for human rights
+and combatting corruption and bribery, including the consolidation of data.
+Carry out a risk assessment, including media analysis, to identify relevant information on SAP's
+sustainability performance in the reporting period.
+-
+Within the scope of our engagement we performed, amongst others, the following procedures:
+Interviewing employees responsible for the materiality analysis at group level in order to obtain an
+understanding on the approach for identifying key issues and related reporting limits of SAP.
+conjunction with 289b to 289e HGB and with the EU Taxonomy Regulation and the supplementing
+Delegated Acts as well as the interpretation of the wordings and terms contained in the EU Taxonomy
+Regulation and in the supplementing Delegated Acts by the legal representatives as disclosed in
+Section "Sustainable Finance: EU Taxonomy Disclosures" of the combined non-financial statement.
+We do not, however, issue a separate conclusion for each disclosure. As the assurance procedures
+performed in a limited assurance engagement are less comprehensive than in a reasonable
+assurance engagement, the level of assurance obtained is substantially lower. The choice of
+assurance procedures is subject to the auditor's own judgement.
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+44/338
+43/338
+We conducted our work in the form of a limited assurance engagement in accordance with the
+International Standard on Assurance Engagements (ISAE) 3000 (Revised): "Assurance Engagements
+other than Audits or Reviews of Historical Financial Information", published by IAASB.
+Accordingly, we have to plan and perform the assurance engagement in such a way that we obtain
+limited assurance as to whether any matters have come to our attention that cause us to believe that
+the combined non-financial statement of the Company for the period from January 1 to December 31,
+2021 has not been prepared, in all material respects, in accordance with §§ 315b and 315c in
+It is our responsibility to express a conclusion on the combined non-financial statement based on our
+work performed within a limited assurance engagement.
+Practitioner's Responsibility
+The EU Taxonomy Regulation and the supplementing Delegated Acts contain wordings and terms that
+are still subject to substantial uncertainties regarding their interpretation and for which not all
+clarifications have been published yet. Therefore, the legal representatives have included a
+description of their interpretation in Section “Sustainable Finance: EU Taxonomy Disclosures" of the
+combined non-financial statement. They are responsible for its tenability. Due to the innate risk of
+diverging interpretations of vague legal concepts, the legal conformity of these interpretations is
+subject to uncertainty.
+This responsibility of the legal representatives includes the selection and application of appropriate
+methods to prepare the combined non-financial statement and the use of assumptions and estimates
+for individual disclosures which are reasonable under the given circumstances. Furthermore, the legal
+representatives are responsible for the internal controls they deem necessary for the preparation of
+the combined non-financial statement that is free of - intended or unintended - material
+misstatements.
+Inspecting selected internal and external documents.
+Analytical procedures for the evaluation of data and of the trends of quantitative information as
+reported at group level by all sites.
+Evaluation of local data collection, validation and reporting processes as well as the reliability of
+reported data based on a sample of three sites.
+Assessment of the overall presentation of the disclosures.
+(https://www.kpmg.de/bescheinigungen/lib/aab_english.pdf). By reading and using the information
+contained in this assurance report, each recipient confirms notice of the provisions contained therein
+including the limitation of our liability as stipulated in No. 9 and accepts the validity of the General
+Engagement Terms with respect to us.
+Our assignment for the Supervisory Board of SAP SE, Walldorf, and professional liability as described
+above was governed by the General Engagement Terms for Wirtschaftsprüfer and
+Wirtschaftsprüfungsgesellschaften (Allgemeine Auftragsbedingungen für Wirtschaftsprüfer und
+Wirtschaftsprüfungsgesellschaften) in the version dated January 1, 2017
+Restriction of Use/General Engagement Terms
+Based on the procedures performed and the evidence obtained, nothing has come to our attention
+that causes us to believe that the combined non-financial statement of SAP SE for the period from
+January 1 to December 31, 2021 has not been prepared, in all material respects, in accordance with
+§§ 315b and 315c in conjunction with 289b to 289e HGB and with the EU Taxonomy Regulation and
+the supplementing Delegated Acts as well as the interpretation disclosed in Section "Sustainable
+Finance: EU Taxonomy Disclosures" of the combined separate non-financial statement.
+Conclusion
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+Stakeholders
+The legal representatives of the Company are responsible for the preparation of the combined non-
+financial statement in accordance with §§ 315b, 315c in conjunction with 289b to 289e HGB and with
+Article 8 of REGULATION (EU) 2020/852 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
+of June 18, 2020 on the establishment of a framework to facilitate sustainable investment, and
+amending Regulation (EU) 2019/2088 (further „EU Taxonomy Regulation “) and the supplementing
+Delegated Acts as well as the interpretation of the wordings and terms contained in the EU Taxonomy
+Regulation and in the supplementing Delegated Acts by the Company as disclosed in Section
+"Sustainable Finance: EU Taxonomy Disclosures” of the combined non-financial statement.
+To Our
+SAP
+In performing this engagement, we applied the legal provisions and professional pronouncements
+regarding independence and quality assurance, in particular the Professional Code for German Public
+Auditors and Chartered Accountants (in Germany) and the quality assurance standard of the German
+Institute of Public Auditors (Institut der Wirtschaftsprüfer, IDW) regarding quality assurance
+requirements in audit practice (IDW QS 1).
+Firm
+Independence and Quality Assurance on the Part of the Auditing
+In our opinion, we obtained sufficient and appropriate evidence for reaching a conclusion for the
+assurance engagement.
+The legal representatives have to interpret vague legal concepts in order to be able to compile the
+relevant disclosures according to Article 8 of the EU Taxonomy Regulation. Due to the innate risk of
+diverging interpretations of vague legal concepts, the legal conformity of these interpretations and,
+correspondingly, our assurance thereof are subject to uncertainty.
+Assessment of the overall presentation of the information.
+Assessing the design and implementation of systems and procedures for identifying, processing
+and monitoring information of revenue, capital expenditures and operating expenditures for the
+taxonomy-relevant economic activities.
+▪ Inquiries of responsible employees at Group level to obtain an understanding of the approach to
+identify relevant economic activities in accordance with EU taxonomy.
+Evaluation of the process for the identification of taxonomy-eligible economic activities and the
+corresponding disclosures in the combined non-financial statement by
+SAP Integrated Report 2021
+Management's Responsibility
+Inquiries of group level personnel, who are responsible for the disclosures on concepts, due
+diligence processes, results and risks, the performance of internal control activities and the
+consolidation of the disclosures.
+To the Supervisory Board of SAP SE, Walldorf
+SAP
+42/338
+41/338
+Our auditor's report must always be read together with the audited consolidated financial statements
+and the audited group management report as well as the examined ESEF documents. The
+consolidated financial statements and group management report converted to the ESEF format –
+including the versions to be published in the German Federal Gazette [Bundesanzeiger] – are merely
+electronic renderings of the audited consolidated financial statements and the audited group
+management report and do not take their place. In particular, the ESEF report and our assurance
+opinion contained therein are to be used solely together with the examined ESEF documents made
+available in electronic form.
+Other matter - Use of the Auditor's Report
+In addition to the financial statement audit, we have provided to group entities the following services
+that are not disclosed in the consolidated financial statements or in the Group Management Report:
+We audited the financial statements of SAP SE and performed various financial statement audits at
+subsidiaries. Furthermore, other assurance services required by law or on a contractual basis were
+performed, including an assurance engagement on selected qualitative and quantitative sustainability
+disclosures of the Integrated Report 2021 and an EMIR assurance service pursuant to section 20 of
+German Securities Trading Act [WpHG] and service organization attestation procedures.
+We declare that the opinions expressed in this auditor's report are consistent with the additional report
+to the audit committee pursuant to Article 11 of the EU Audit Regulation (long-form audit report).
+We were elected as group auditor at the annual general meeting on May 12, 2021. We were engaged
+by the Chairman of the Audit and Compliance Committee of the Supervisory Board of SAP SE on May
+20, 2021, and this engagement was confirmed on October 6, 2021. We have been the group auditor
+of SAP SE without interruption since the financial year 2002.
+Obtain an understanding of internal control relevant to the assurance on the ESEF documents in
+order to design assurance procedures that are appropriate in the circumstances, but not for the
+purpose of expressing an assurance opinion on the effectiveness of these controls.
+Evaluate the technical validity of the ESEF documents, i.e. whether the file made available
+containing the ESEF documents meets the requirements of the Delegated Regulation (EU)
+2019/815, as amended as at the reporting date, on the technical specification for this electronic file.
+Evaluate whether the ESEF documents provide an XHTML rendering with content equivalent to the
+audited consolidated financial statements and the audited group management report.
+Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) in
+accordance with the requirements of Articles 4 and 6 of the Delegated Regulation (EU) 2019/815,
+as amended as at the reporting date, enables an appropriate and complete machine-readable
+XBRL copy of the XHTML rendering.
+Identify and assess the risks of material intentional or unintentional non-compliance with the
+requirements of Section 328 (1) HGB, design and perform assurance procedures responsive to
+those risks, and obtain assurance evidence that is sufficient and appropriate to provide a basis for
+our assurance opinion.
+SAP Integrated Report 2021
+Our objective is to obtain reasonable assurance about whether the ESEF documents are free from
+material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB.
+We exercise professional judgement and maintain professional scepticism throughout the assurance
+work. We also:
+intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB for the
+electronic reporting format.
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+We have performed an independent limited assurance engagement on the non-financial statement of
+SAP SE (further "Company" or "SAP") and on the non-financial statement of the parent company that
+is combined with it, which are published in the Management Report, (further "combined non-financial
+statement") for the period from January 1 to December 31, 2021.
+To Our
+Stakeholders
+SAP Integrated Report 2021
+The Supervisory Board is responsible for overseeing the process of preparing the ESEF documents as
+part of the financial reporting process.
+To Our
+Stakeholders
+Further Information pursuant to Article 10 of the EU Audit Regulation
+Management Report
+Limited Assurance Report of
+the Independent Auditor
+regarding the combined non-
+financial statement
+Combined Group
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Stakeholders
+Combined Group
+To Our
+SAP Integrated Report 2021
+SAP
+[German Public Auditor]
+[signature] Conrad
+Wirtschaftsprüfer
+Additional
+Information
+[signature] Rackwitz
+Wirtschaftsprüfer
+[German Public Auditor]
+Further Information on
+Sustainability
+Additional
+Information
+German Public Auditor Responsible for the Engagement
+Consolidated Financial
+Statements IFRS
+Mannheim, February 23, 2022
+KPMG AG
+Wirtschaftsprüfungsgesellschaft
+The German Public Auditor responsible for the engagement is Bodo Rackwitz.
+In 2021, we used the following key measures to manage our operating financial performance:
+Cloud revenue: This revenue driver comprises the main revenues of our fast-growing cloud business.
+Revenue from cloud is derived from fees earned from providing customers with any of the following:
+Further Information on
+Sustainability
+Additional
+Information
+Performance Management
+System
+We use various performance measures to manage our performance with regard to our primary
+financial objectives, which are growth and profitability, and our primary non-financial objectives, which
+are customer loyalty, employee engagement, and carbon impact. We view growth and profitability as
+indicators of our current performance, while we see customer loyalty, employee engagement, and
+carbon impact as indicators of our future performance.
+Measures to Manage Our Financial Performance
+Consolidated Financial
+Statements IFRS
+Measures to Manage Our Operating Financial Performance
+-
+For more information regarding the composition of cloud revenue and a description of these services,
+Platform as a service (PaaS)
+Infrastructure as a service (laaS)
+Premium cloud support beyond regular support embedded in cloud offerings
+see the Notes to the Consolidated Financial Statements, Note (A.1).
+We use the cloud revenue measure at both actual currencies and constant currencies.
+Cloud and software revenue: We use cloud and software revenue expressed in both actual
+currencies and constant currencies to measure our revenue growth. Our cloud and software revenue
+includes cloud revenue plus software licenses and support revenue. Cloud revenue and software
+revenue are our key revenue drivers because they tend to affect our other revenue streams. Generally,
+customers that buy software licenses also enter into related support contracts, and these generate
+recurring support revenue after the software sale. Support contracts cover standardized support
+services and unspecified future software updates and enhancements. Cloud and software revenue
+also tends to stimulate services revenue, which is earned by providing customers with professional
+services, premium engagement services, training services, and payment services.
+Total revenue: We use total revenue to measure our growth at both actual currencies and constant
+currencies. The total of cloud revenue and support revenue divided by total revenue is the share of
+more predictable revenue. This measure provides additional insight into our sustained business
+success.
+Current cloud backlog (CCB): We use CCB both in actual and at constant currencies, to manage
+our operating financial performance. The CCB measures our overall go-to-market success in
+committed cloud business. The CCB is the contractually committed 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 remaining performance obligations following IFRS 15.120. For our committed cloud business,
+we believe the CCB is a valuable indicator of our go-to-market success, as it reflects both new
+contracts closed as well as existing contracts renewed.
+Management Report
+Software as a service (SaaS)
+Stakeholders
+Carbon Impact
+To Our
+Operating profit (non-IFRS): We use operating profit (non-IFRS) expressed in both actual currencies
+and constant currencies to measure our overall operational process efficiency and overall business
+performance.
+Net carbon emissions
+More than €36 billion
+More than €11.5 billion
+Approximately €8 billion
+Steady increase
+84% to 86%
+O kt (from 2023 onward; net
+zero along our value chain
+by 2030)
+¹Non-IFRS
+57/338
+58/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+Note: A reconciliation of non-IFRS results to IFRS equivalents is available in the Performance Management System section.
+SAP
+SAP Integrated Report 2021
+Combined Group
+59/338
+Our purpose at SAP is to "help the world run better and improve people's lives." We strive to achieve
+this as both an enabler and an exemplar of sustainable business. Our products and services aim to
+help our customers both meet the challenges and take advantage of the opportunities presented by
+today's rapidly changing world.
+SAP Integrated Report 2021
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+In 2021, we used the following key measures to manage our non-financial performance in the areas of
+customer loyalty, employee engagement, leadership trust, and carbon emissions:
+Measures to Manage Our Non-Financial Performance
+Operating, investing, and financing cash flows and free cash flow: Our consolidated statement
+of cash flows provides insight into how we generate and use cash and cash equivalents. When
+applied in conjunction with the other primary financial statements, it provides information that helps
+us evaluate the changes in our net assets, our financial structure (including our liquidity and solvency),
+and our ability to affect the amounts and timing of cash flows to adapt to changing circumstances and
+opportunities. We use our free cash flow measure to determine the cash flow remaining after all
+expenditures required to maintain or expand our organic business have been paid off. This measure
+provides management with supplemental information to assess our liquidity needs. We calculate free
+cash flow as net cash from operating activities minus purchases (other than purchases made in
+connection with business combinations) of intangible assets and property, plant, and equipment, as
+well as payments for lease liabilities.
+Effective tax rate (IFRS and non-IFRS): We define our effective tax rate as the ratio of income tax
+expense to profit before tax, expressed as a percentage.
+Earnings per share (EPS) (IFRS and non-IFRS): EPS (basic and diluted) measures our overall
+performance because it captures all operating and non-operating elements of profit as well as income
+tax expense. It represents the portion of profit after tax attributable to equity holders of SAP SE
+allocable to each SAP share outstanding. EPS is influenced not only by our operating and non-
+operating business and income taxes but also by the number of shares outstanding.
+We use the following measures to manage our overall financial performance:
+Measures to Manage Overall Financial Performance
+Financial income, net: This measure provides insight into the return on liquid assets and capital
+investments and the cost of borrowed funds. To manage our financial income, net, we focus on cash
+flow, the composition of our liquid assets and capital investment portfolio, and the average rate of
+interest at which assets are invested. We also monitor average outstanding borrowings and associated
+finance costs.
+We use the following measures to manage our non-operating financial performance:
+Measures to Manage Our Non-Operating Financial Performance
+Operating margin (non-IFRS): We use operating margin to measure our overall operational
+efficiency. Operating margin (non-IFRS) is the ratio of our operating profit (non-IFRS) to total revenue
+(non-IFRS), expressed as a percentage.
+Cloud gross margin (non-IFRS): We use our cloud gross margin (non-IFRS) to measure our process
+efficiency in our cloud business. Cloud gross margin (non-IFRS) is the ratio of our cloud gross profit
+(non-IFRS) to cloud revenue (non-IFRS), expressed as a percentage.
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Employee Engagement Index
+Management Report
+60/338
+Consolidated Financial
+Statements IFRS
+Additional
+SAP
+To Our
+Stakeholders
+Combined Group
+Customer Net Promoter Score (Customer NPS): In 2021, we continued to harmonize the
+Customer Loyalty Survey program where Customer NPS is measured. Specifically, to enable better
+standardization and comparability, we now ask about SAP across all entities and product lines. The
+annual assessment of customer loyalty is based on a survey that includes the Net Promoter Score
+(NPS) metric. The Customer NPS score is calculated based on the NPS Likelihood to Recommend
+question with its proprietary scoring, identified on a scale of 0–10. We introduced this measure in
+2012 as we are convinced that we can achieve our financial goals only when our customers are loyal
+to, and satisfied with, SAP and our solutions. To 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 scale of 0-10. We
+then subtract the percentage of “detractors,” that is, those giving us a score of 0-6. The method
+ignores "passives," that is, those giving us a score of 7 or 8. Consequently, the range of achievable
+Founded in 1972, SAP is a global company headquartered in Walldorf, Germany. Our legal corporate
+name is SAP SE. SAP has been named a market share leader in the following areas worldwide:
+enterprise applications software, 4 enterprise resource management applications, 5 supply chain
+management applications, 6 procurement applications software, travel and expense management
+software, and enterprise resource planning software, 9 among others. The SAP Group has a global
+presence and employs more than 100,000 people.
+Overview of SAP
+Strategy
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+52/338
+51/338
+This report includes statistical data about the IT industry and global economic trends that comes from
+information published by sources including International Data Corporation (IDC), Gartner, the
+European Central Bank (ECB), and the International Monetary Fund (IMF). This type of data
+represents only the estimates of IDC, Gartner, the ECB, the IMF, and other sources of industry data.
+SAP does not adopt or endorse any of the statistical information provided by sources such as IDC,
+Gartner, the ECB, the IMF, or other similar sources that is contained in this report. The data from these
+sources is subject to risks and uncertainties, and subject to change based on various factors, including
+those described above, in the Risk Management and Risks section, and elsewhere in this report.
+These and other factors could cause our results to differ materially from those expressed in the
+estimates made by third parties and SAP. We caution readers not to place undue reliance on this data.
+To fully consider the factors that could affect our future financial results, both this report and our
+Annual Report on Form 20-F 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.
+Expected Developments and Opportunities and Risk Management and Risks sections; and other
+forward-looking information appearing in other parts of this report.
+Information
+Further Information on
+Sustainability
+Our Purpose
+Customer Net Promoter Score
+Operating profit¹
+Subsidiaries, Acquisitions, and Joint Ventures
+For an overview of our product portfolio, see the Products, Research and Development, and Solutions
+section.
+We derive revenue from fees charged to our customers for use of our cloud subscription solutions as
+well as licensing software. Support, consulting, development, training, and other services also
+contribute significant revenue.
+We create value by identifying the business needs of our customers, then developing and delivering
+cloud solutions, services, and support addressing these needs. By proactively obtaining customer
+feedback on a quarterly basis, we strive to continuously improve our solutions, identify further
+business needs, and deliver enhanced value to our customers across the whole lifecycle thus
+increasing customer loyalty.
+Our business model, through which we implement our vision and strategy, can be summarized as
+follows:
+Our Business Model
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+For more information, see the Employees and Social Investments section.
+We are working to ensure our people have the skills and resources they need to deliver on our
+strategy and overall ambitions. SAP's global workforce of over 100,000 employees is key to the
+successful execution of our strategy.
+Our People
+Customer Centricity: Achieving our growth ambitions requires us to put an unwavering focus on our
+customers. Therefore, we aim to provide the maximum Customer Lifetime Value, that is, the
+cumulative value that SAP provides to customers over the course of our relationship. To do so, SAP
+aims to deliver differentiated value across the customer relationship, from the first interaction to
+deployment and beyond.
+Business Transformation: To achieve our strategy and deliver the best value to our stakeholders, we
+must execute against our goals with strong alignment across the company. To that end, we have
+established a Corporate Transformation Office to drive the end-to-end execution of our REINVENT
+strategy. This office unites experts with strong program management skills, deep content knowledge
+around major areas of SAP's transformation, as well as change and communications management.
+Value Proposition: As we implement our strategy, we have introduced new initiatives and offerings
+including, for example, RISE with SAP. Launched in early 2021, RISE with SAP is our business
+transformation-as-a-service offering. We have also redesigned our ecosystem engagement model to
+create an attractive proposition for our partners in the cloud. A dedicated operating model
+demonstrates the integrated value of our solution areas across development, marketing and solution
+management, and go-to-market functions.
+Subsidiaries
+Compelling Value Propositions and Customer Centricity
+SAP SE is the parent company of the SAP Group. As at December 31, 2021, the SAP Group
+comprised 290 companies.
+Qualtrics IPO
+Joint Ventures
+On January 27, 2022, SAP announced its intent to acquire a majority stake of Taulia, a leading
+provider of working capital management solutions. The acquisition is expected to close in
+March 2022, following completion of customary closing conditions and regulatory approvals.
+For more information about Taulia, see Note (G.8), Events After the Reporting Period.
+Information
+Additional
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+56/338
+55/338
+For more information about Clarabridge, see Note (D.1), Business Combinations and Divestitures.
+On October 1, 2021 (after receipt of required regulatory approvals and satisfaction or waiver of other
+customary closing conditions), Qualtrics completed its previously announced acquisition of
+Clarabridge, Inc., a customer experience management software company headquartered in Reston,
+Virginia, in the United States.
+For more information about Signavio, see Note (D.1), Business Combinations and Divestitures.
+The acquisition of Signavio GmbH ("Signavio"), closed on March 5, 2021, and deepens SAP's
+business process intelligence capabilities, which represent the process layer within the SAP portfolio.
+Solutions from Signavio augment the spectrum of business process management solutions offered by
+SAP by adding process modeling, process mining, and process management capabilities.
+We continue to focus on organic investments in technology and innovations that ensure sustainable
+growth of our solution portfolio to drive our short-term, mid-term, and long-term ambitions.
+Additionally, we may make targeted acquisitions to complement our solution offerings and improve
+coverage in key strategic markets.
+Acquisitions
+For more information about the Qualtrics acquisition and Qualtrics IPO, see Note (D.1), Business
+Combinations and Divestitures and Note (E.2) Total Equity.
+On November 11, 2021, Qualtrics announced the closing of its public offering and issued an
+additional 4% of its shares, which reduced SAP's ownership in Qualtrics to 74%. The offering-related
+cash inflow amounted to €1.0 billion and the corresponding value of non-controlling interests in net
+assets was €0.3 billion.
+On January 28, 2021, Qualtrics International Inc. issued 12% of its shares on the Nasdaq Stock
+Market (NASDAQ). The IPO-related cash inflow amounted to €1,847 million and the initial value of
+non-controlling interests in net assets was €909 million.
+For a list of our subsidiaries, associates, and other equity investments, see the Notes to the
+Consolidated Financial Statements, Note (G.9), Scope of Consolidation, Subsidiaries and Other Equity
+Investments.
+To better support our customers in the financial services industry (FSI), SAP created a joint venture
+called SAP Fioneer, with German investment company Dediq GmbH. The aim of this joint venture is
+to build agile solutions for FSI using SAP technologies as a basis. SAP has contributed certain FSI-
+centric software solutions to SAP Fioneer in exchange for a minority share in the new entity. Some
+SAP employees transferred to the new entity. The transaction closed in September 2021.
+For more information about the products and solutions offered as part of our strategy framework, see
+the Products, Research & Development, and Services section.
+Our business process intelligence (BPI) application portfolio, which has been significantly
+expanded with the integration of Signavio solutions, helps our customers enable their business
+transformations. We support analysis of current processes, benchmarking against best practices, and
+reconfiguring current processes towards future processes.
+Creating a Network of Intelligent, Sustainable Enterprises
+Intelligent enterprises use data with embedded artificial intelligence (AI) and experience management
+to remove friction across business processes and drive innovation, enabling people to work more
+flexibly.
+Helping Our Customers Become Intelligent and Sustainable Enterprises
+In 2020, SAP introduced our REINVENT strategy. The underlying vision of this strategy was extended
+in 2021 to "REINVENT how the world runs as a network of intelligent, 10 sustainable enterprises." In our
+pursuit of this vision, we focus on three areas:
+Our Vision
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+9 IDC, Worldwide Enterprise Resource Planning Software Market Shares, 2020: The Advance of Modular and Intelligent ERP Systems, Doc
+#US46441121, June 2021
+8 IDC, Worldwide Travel and Expense Management Software Market Shares, 2020: Travel Down But New Opportunities Emerge, Doc
+#US47980421, July 2021
+7 IDC, Worldwide Procurement Applications Software Market Shares, 2020: Digital Became New Normal, Doc #US47984421, Aug. 2021
+6 IDC, Worldwide Supply Chain Management Applications Market Shares, 2020: Disruption Managed, Doc #US46435921, Dec. 2021
+5 IDC, Worldwide Enterprise Resource Management Applications Market Shares, 2020: Digital Makes Strides, Doc #US47984121, Sept.
+2021
+4 IDC, Worldwide Enterprise Applications Market Shares, 2020: Next-Generation Applications Shaping the Market, Doc #US47983821,
+Sept. 2021
+In addition, we want our own business operations and practices to be intelligent, sustainable, and
+inclusive. SAP is committed to the goal set by the Paris Agreement of limiting global warming to
+1.5 degrees Celsius in comparison to pre-industrial levels. In March 2021, SAP announced the
+intention to become carbon neutral in our own operations by the end of 2023 – two years earlier than
+previously stated. Further, in January 2022, SAP announced its commitment to achieve net-zero along
+their value chain in 2030; 20 years earlier than originally targeted. SAP also supports the United
+Nations Sustainable Development Goals (UN SDGs). Together with our customers and partners, we
+are engaged in initiatives across the UN SDGs.
+We believe that businesses are playing an even greater role in their communities - forming a network
+that expands far beyond the walls of any one company. We deliver innovation and intelligent
+technologies across procurement, logistics, asset management, and industry-specific offerings to
+enable a global business network spanning entire industries and value chains. As companies face
+supply chain disruptions, this becomes even more important, as our software aims to enable
+stakeholders in the network to react to disruption in real time.
+Our sustainability management solutions empower customers to integrate sustainability into their
+business processes. ― from ethical sourcing and inclusive hiring to visibility into and management of a
+company's overall ecological footprint. The solutions aim to help our customers minimize carbon
+emissions, reduce waste through responsible supply chain management, and enable diversity across
+all business practices.
+Enabling a Sustainable World
+Our Product Strategy
+SAP Business Network is a network of enterprises. The interactive community helps enable
+companies to extend their ecosystem, react to supply chain disruptions, discover new trading
+partners, and find new opportunities, all through a unified, role-based experience.
+SAP's Industry Cloud provides the opportunity for SAP and our partners to extend our core with
+modular solutions addressing industry-specific functions, built on SAP BTP.
+SAP Business Technology Platform (SAP BTP) is a business-centric and open platform that
+enables customers and partners to extend and customize SAP applications in a cloud-native way. It
+allows shared data and insights, Al-powered experiences, as well as partner solutions and customer-
+led customizations. Specifically, it provides capabilities in four key areas: database and data
+management; analytics and planning; application development and integration; and intelligent
+technologies such as Al, all bundled into one platform offering.
+Our SAP Customer Experience solutions deliver a personalized view across customers and
+business partners, connecting the front- and back office with solutions spanning from the point of
+sale, to manufacturing, to logistics, customer experience, and returns management.
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+54/338
+53/338
+10 An "intelligent enterprise" is an event-driven, real-time business powered by technology that includes machine learning, robotic process
+automation, Internet of Things, and analytics capabilities to help scale innovation.
+Our intelligent spend management applications aim to provide a more unified view of a customer's
+spending to reduce costs, mitigate risks, improve collaboration, and make sure every spend decision
+is aligned with the business strategy.
+SAP SuccessFactors Human Experience Management (HXM) Suite provides cloud-based
+solutions, such as a human resources management system (HRMS) for core HR and payroll, talent
+management, employee experience management, and people analytics, by aiming to create
+differentiated employee experiences across the employee lifecycle.
+SAP S/4HANA Cloud provides modular cloud ERP in the areas of finance, supply chain, and
+sustainability among others - and can enable customers to adjust and adopt business process and
+business models.
+The most prominent building blocks of our product portfolio are:
+While each of our line-of-business (LoB) solutions must be competitive in its own right, we believe the
+true value comes through the strength of our collective offerings, with SAP S/4HANA Cloud at the
+core. SAP has the technologies, products, footprint, and experience to combine four essential end-to-
+end business processes to create not just one intelligent enterprise, but a global ecosystem of
+intelligent enterprises. Those processes - Recruit to Retire, Source to Pay, Design to Operate, and
+Lead to Cash are supported by our products.
+The traditional focus of businesses on productivity and profitability is expanding to include a new
+measurement for business success - how operations impact the environment, or the "green line." With
+the overview and transparency of business processes and ability to connect value chains end to end
+provided by SAP software, we help companies to measure and improve sustainability across entire
+networks, allowing them to effectively "chase zero" - zero emissions, zero waste, and zero inequality.
+Our REINVENT strategy is firmly rooted in our goal to be an innovative and trusted partner for our
+ecosystem, supporting them on their journey to reinvent how their businesses run. To achieve our
+overarching objectives of creating resilient, profitable, and sustainable business outcomes for our
+customers, we have honed our strategic priorities mentioned above, in which our product strategy
+plays a central role.
+Free cash flow
+For more information, see Note (D.1), Business Combinations and Divestitures.
+Sapphire Ventures
+Measuring Our Success
+Customer Net Promoter Score
+Customer Loyalty
+More than €4.5 billion
+€5.05 billion
+Free cash flow
+€7.8 billion to €8.25 billion 1,2
+€8.23 billion¹
+Operating profit
+Profitability
+€25.0 billion to €25.5 billion²
+€24.08 billion
+Cloud and software revenue
+Growth
+€11.55 billion to €11.85
+billion²
+€9.42 billion
+Cloud revenue
+2022 Outlook
+2021 Results
+ΚΡΙ
+Strategic Objective
+Outlook for 2022
+10
+Note: A reconciliation of non-IFRS results to IFRS equivalents is available in the Performance Management System section.
+11 to 15
+Engagement
+Total revenue
+Employee
+Engagement
+Customer Loyalty
+Profitability
+More than €22 billion
+2025 Ambition
+Cloud revenue
+Growth
+KPI
+Strategic Objective
+Ambitions for 2025
+Note: A reconciliation of non-IFRS results to IFRS equivalent is available in the Performance Management System section.
+2 at constant currencies
+1 Non-IFRS
+70 kt
+84% to 86%
+110 kt
+Net carbon emissions
+Carbon Impact
+83%
+Employee Engagement Index
+Employee
+In addition to our investments in organic growth and acquisitions, SAP also supports entrepreneurs
+that aspire to build industry-leading businesses through venture capital funds managed by Sapphire
+Ventures. Sapphire Ventures manages over US$8.8 billion (€7.8 billion) and has invested in more
+than 200 companies. Sapphire Ventures pursues opportunities in which it can help fuel enterprise
+growth by adding expertise, relationships, geographic reach, and capital. It places a particular focus
+on companies in Europe, Israel, and the United States. In the second quarter of 2021, the Executive
+Board proposed, and the Supervisory Board consented to, the financing of a new Sapphire Ventures
+fund ("SAPPHIRE Ventures Fund VI"). SAP's total volume committed for SAPPHIRE Ventures Fund VI
+is US$1.75 billion (€1.5 billion).
+** Non-IFRS, at constant currencies
+110 kt
+ΚΡΙ
+Strategic Objective
+Outlook and Results for 2021
+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.
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+Carbon impact
+Customer loyalty
+Employee engagement
+-
+-
+- Profitability
+Growth
+-
+We use the following financial and non-financial objectives to steer our company:
+2021 Outlook*
+* The 2021 outlook was communicated in January 2021 and was updated in April, July, and October 2021. The 2021 outlook numbers
+above reflect the updated outlook from October 2021.
+2021 Results
+€9.4 billion to €9.6 billion
+90 kt to 110 kt
+83%
+Net carbon emissions
+84% to 86%
+Employee Engagement Index
+Carbon Impact
+Engagement
+Employee
+10
+5 to 10
+Customer Net Promoter Score
+Customer Loyalty
+€8.41 billion
+€8.1 billion to €8.3 billion
+€24.41 billion
+€23.8 billion to €24.2 billion
+Operating profit**
+Cloud and software revenue**
+Profitability
+Growth
+Our ordinary shares are listed on the Frankfurt Stock Exchange. American Depositary Receipts (ADRs)
+representing SAP SE ordinary shares are listed on the New York Stock Exchange (NYSE). SAP is a
+member of Germany's DAX and TecDAX as well as the Dow Jones EURO STOXX 50, the Dow Jones
+Sustainability Index World, and the Dow Jones Sustainability Index Europe. As at December 31, 2021,
+SAP was the second most valuable company in the DAX based on market capitalization. SAP was
+ranked as the most sustainable software company in the Dow Jones Sustainability Indices for the
+fifteenth consecutive year.
+Cloud revenue**
+€9.59 billion
+8,884
+SAP's industry cloud is an open innovation space for SAP and our partners to build solutions that
+make a difference to the core business of our customers. Industry cloud solutions extend the end-to-
+end processes of SAP S/4HANA, LoB cloud solutions, and SAP Business Network to enable our
+customers optimize and transform their core business.
+58
+3,764
+0
+3,764
+Services
+23,233
+3,823
+5
+24,410
+332
+24,078
+0
+24,078
+Cloud and software
+23,228
+4,110
+0
+4,110
+-2,699
+-2,876
+229
+-3,105
+Cost of cloud
+Operating expense measures
+27,343
+5
+27,338
+28,232
+390
+27,842
+0
+27,842
+Total revenue
+15,148
+248
+0
+14,818
+3,248
+0
+3,248
+Software licenses
+8,085
+5
+-8
+8,080
+174
+9,418
+0
+9,418
+Cloud
+Industry cloud solutions are built by SAP and partners in the cloud, giving our customers access to the
+innovation power of an entire ecosystem. The solutions are built on SAP BTP and can use its full
+spectrum of intelligent technologies and business services. We have an expanding portfolio and a
+growing ecosystem across all industries.
+9,592
+3,240
+3,642
+0
+158
+14,660
+0
+14,660
+Software licenses and support
+11,506
+0
+11,506
+11,577
+166
+11,412
+0
+11,412
+Software support
+3,642
+15,148
+Adj.
+-2,451
+-1,925
+-1,181
+1,250
+-2,431
+General and administration
+-6,371
+735
+-1,356
+-7,106
+1,025
+-7,505
+Sales and marketing
+-4,151
+303
+-4,454
+-6,479
+166
+-1,190
+Restructuring
+-23,186
+Total operating expenses
+18
+-66
+84
+43
+0
+43
+Other operating income/expense, net
+0
+-3
+3
+0
+157
+-157
+-4,667
+Cost of software licenses and support
+524
+Research and development
+-2,916
+Cost of services
+-4,362
+345
+-4,707
+-4,698
+286
+332
+Cost of cloud and software
+-1,911
+97
+-2,008
+-1,822
+103
+-5,030
+-2,630
+-3,178
+178
+19,981
+528
+19,453
+20,514
+617
+19,897
+Gross profit
+-7,362
+523
+-7,886
+-7,328
+617
+-7,946
+Total cost of revenue
+-3,000
+-5,190
+3,573
+IFRS
+Impact
+SAP Integrated Report 2021
+SAP
+Amortization expense/impairment charges for intangibles acquired in business combinations
+and certain stand-alone acquisitions of intellectual property (including purchased in-process
+research and development) as well as sale/disposal gains and losses for these intangibles
+■
+Acquisition-related charges
+Operating expense numbers that are identified as operating expenses (non-IFRS) have been adjusted
+by excluding the following expenses:
+To Our
+Stakeholders
+Operating Expense (Non-IFRS)
+Starting in 2021, we no longer adjust our IFRS revenue measures by including the full amount of
+recurring revenue that is not recognized under IFRS due to fair value accounting for the contracts in
+effect at the time of the respective acquisitions.
+Revenue (Non-IFRS)
+Our non-IFRS financial measures reflect adjustments based on the items below, as well as
+adjustments for the related income tax effects.
+measures.
+Both our internal performance targets and the guidance we provide to the capital markets are
+based on revenue and profit (non-IFRS) measures rather than the respective IFRS financial
+All forecast and performance reviews with all senior managers globally are based on these non-
+IFRS measures, rather than the respective IFRS financial measures.
+Thus, SAP's IFRS revenue equals the non-IFRS revenue at actual currencies starting with the annual
+reporting period 2021. Due to immateriality, prior-year numbers are further based on our previous
+non-IFRS definition as described in our SAP Integrated Report 2020.
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+€ millions
+Among other measures, we use free cash flow to manage our overall financial performance.
+Free Cash Flow
+We believe it is important for investors to have information that provides insight into the development
+of our sales. Revenue measures determined under IFRS provide information that is useful in this
+regard. However, both sales volume and currency effects impact period-over-period changes in sales
+revenue. We do not sell standardized units of products and services, so we cannot provide relevant
+information on sales volume by providing data on the changes in product and service units sold. To
+provide additional information that may be useful to investors in breaking down and evaluating
+changes in sales volume, we present information about our revenue and various values and
+components relating to operating profit that are adjusted for foreign currency effects. We calculate
+constant currencies measures by translating foreign currencies using the average exchange rates from
+the comparative period instead of the current period. Constant currency measures on current cloud
+backlog use the closing exchange rate from the previous year's corresponding key date instead of the
+average exchange rate.
+Constant Currencies Information
+Operating Profit (Non-IFRS), Cloud Gross Margin (Non-IFRS), Operating Margin
+(Non-IFRS), Effective Tax Rate (Non-IFRS), and Earnings per Share (Non-IFRS)
+Operating profit, cloud gross margin, operating margin, effective tax rate, and earnings per share
+denominated as operating profit (non-IFRS), cloud gross margin (non-IFRS), operating margin (non-
+IFRS), effective tax rate (non-IFRS), and earnings per share (non-IFRS) have been adjusted from the
+respective IFRS measures by adjusting for the aforementioned operating expenses (non-IFRS) and
+the income tax effects thereon.
+We exclude certain acquisition-related expenses for the purpose of calculating operating profit (non-
+IFRS), operating margin (non-IFRS), and earnings per share (non-IFRS) when evaluating SAP's
+continuing operational performance because these expenses generally cannot be changed or
+influenced by management after the relevant acquisition other than by disposing of the acquired
+assets. Since management at levels below the Executive Board does not influence these expenses,
+we generally do not consider these expenses for the purpose of evaluating the performance of
+management units. For similar reasons, we eliminate share-based payment expenses as these costs
+are impacted by share price developments and other factors outside our control. We also eliminate
+restructuring expenses because they are volatile and mostly cannot be influenced by management at
+levels below the Executive Board.
+· Restructuring expenses, that is, expenses resulting from measures which comply with the definition
+of restructuring according to IFRS
+Share-based payment expenses
+Acquisition-related third-party expenses
+■
+■ Settlements of preexisting business relationships in connection with a business combination
+Information
+Additional
+Further Information on
+Sustainability
+The annual budgeting process for all management units is based on operating profit (non-IFRS)
+numbers rather than the respective IFRS financial measures.
+2021
+The variable components of our Executive Board members' and employees' remuneration are
+based on non-IFRS numbers such as operating profit (non-IFRS), operating margin (non-IFRS), as
+well as current cloud backlog (CCB) measures rather than the respective IFRS measures.
+-
+Carbon emissions: We use carbon emissions to manage our non-financial performance. It is used as
+a metric to strengthen our ambitious short-term and long-term carbon reduction targets. We measure
+our net carbon emissions according to the Greenhouse Gas (GHG) Protocol. The net carbon
+emissions are calculated by deducting emission savings such as self-produced renewable energy,
+renewable energy certificates, and carbon offsets from our gross carbon emissions.
+Employee Engagement Index: We use this index to measure the satisfaction and commitment of
+our employees, how proud they are of our company, and how strongly they identify with SAP.
+Applying this measure is recognition that our growth strategy depends on engaged employees.
+Leadership Trust Score: We use this score to further enhance accountability and to measure our
+collective effort to foster a work environment based on trust. It is derived from a question in our
+surveys that gauges employees' trust in our leaders. We measure leadership trust by using the
+same NPS methodology that we use to compute the Customer NPS.
+We measure both the Employee Engagement Index as well as Leadership Trust Score to get insights
+on the following:
+Since this year, we determine the Employee Engagement Index and the Leadership Trust Score
+as the average of the scores retrieved in each of the surveys we run within a fiscal year. Adopting the
+Experience Management (XM) philosophy of Qualtrics, we changed our engagement survey concept
+to a continuous listening approach that includes multiple data collections throughout the year. This
+new average score provides a more valid evaluation of the full-year engagement and trust level of our
+employees.
+scores is -100 to +100, with the latter being the best achievable score for customer loyalty as
+measured by the Customer NPS methodology.
+Information
+Value-Based Management
+Additional
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+Further Information on
+Sustainability
+Our holistic view of the performance measures described above, together with our associated
+analyses, comprises the information we use for value-based management. We use planning and
+control processes to manage the compilation of these key measures and their availability to our
+decision-makers across various management levels.
+SAP's long-term strategic plans are the point of reference for our short-term and mid-term planning
+and controlling processes. We initially identify future growth and profitability drivers at a highly
+aggregated level for the entire SAP Group. In a first step, the resulting financial plan is broken down
+into (i) product portfolio grouped into solution areas and deployment models “On Premise," "Software
+as a Service/Platform as a Service," "Infrastructure as a Service," and "Intelligent Spend Management";
+and (ii) functions such as development, delivery, sales, and administration. In a second step, the
+planned total revenues and total expenses are generally allocated to the operating segments and the
+areas of functional responsibility of the individual members of the Executive Board ("Board area”). If a
+Board area represents not only a functional department but also has a responsibility for operating
+segments within this Board area, the allocation is done at the lower segment level. Budget
+adjustments may be applied during the year to reflect changes in priorities, to achieve efficiency
+targets, and to reflect endogenous and exogenous factors. Such budget adjustments, as well as the
+assessment of the performance, are handled at the Board area level if the Board area is part of a
+segment, or at the segment level if the Board area comprises several segments. It is then the
+individual Executive Board member's responsibility to break down the allocated budget adjustments
+within the segment budget boundary. Based on an integrated portfolio process running in parallel to
+the budgeting process, we ensure aligned investment behavior across Board areas with regards to
+specific solution and/or subsolution areas. In a final step, customer-facing revenue targets and cost-
+of-sales and marketing targets are broken down into sales regions and market units.
+Based on our detailed annual plans, we determine the budget for the respective fiscal year. We also
+have processes in place to forecast revenue and profit on a quarterly basis, to quantify whether we
+expect to realize our financial goals, and to identify any deviations from plan. We continuously monitor
+the affected operating segments and Board areas in the SAP Group to analyze their developments
+We use these non-IFRS measures consistently in our internal planning and forecasting, reporting, and
+compensation, as well as in our external communications, as follows:
+We believe that the disclosed supplemental historical and prospective non-IFRS financial information
+provides useful information to investors because management uses this information, in addition to
+financial data prepared in accordance with IFRS, to attain a more transparent understanding of our
+past performance and our anticipated future results.
+We disclose certain financial measures that are not prepared in accordance with IFRS and are
+therefore considered non-IFRS financial measures. Our non-IFRS financial measures may not
+correspond to non-IFRS financial measures that other companies report. The non-IFRS financial
+measures that we report should only be considered in addition to, and not as substitutes for, or
+superior to, our IFRS financial measures.
+Explanation of Non-IFRS Measures
+Non-IFRS Financial Measures Cited in This Report
+and define any appropriate actions. Our entire network of planning, control, and reporting processes is
+implemented in integrated planning and information systems, based on SAP software, across all
+organizational units so that we can conduct the evaluations and analyses needed to make informed
+decisions.
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+62/338
+61/338
+Our management primarily uses these non-IFRS measures rather than IFRS measures as the basis
+for making financial, strategic, and operating decisions.
+Constant
+Currency
+2020
+Net cash flows from operating activities
+revenue, operating expenses, operating profit, or other measures of financial performance prepared in
+accordance with IFRS on the other. We caution the readers of our financial reports to follow a similar
+approach by considering nominal and constant currencies non-IFRS measures only in addition to, and
+not as a substitute for or superior to, changes in revenue, operating expenses, operating profit, or
+other measures of financial performance prepared in accordance with IFRS.
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Despite these limitations, we believe that the presentation of our non-IFRS measures and the
+corresponding IFRS measures, together with the relevant reconciliations, provide useful information to
+management and investors regarding present and future business trends relating to our financial
+condition and results of operations.
+Combined Group
+SAP Integrated Report 2021
+SAP
+We believe that constant currencies measures have limitations, particularly as the currency effects that
+are eliminated constitute a significant element of our revenue and expenses and could materially
+impact our performance. Therefore, we limit our use of constant currencies measures to the analysis
+of changes in volume as one element of the full change in a financial measure. We do not evaluate
+our results and performance without considering both constant currencies and nominal measures of
+revenue (non-IFRS) and operating profit (non-IFRS) measures on the one hand, and changes in
+In the past, we have issued share-based payment awards to our employees every year and we
+intend to continue doing so in the future. Thus, our share-based payment expenses are recurring,
+although the amounts usually change from period to period.
+The valuation of our cash-settled share-based payments could vary significantly from period to
+period due to the fluctuation of our share price and other parameters used in the valuation of these
+plans. In the future, we plan to move more of our awards to equity settlement.
+Our restructuring charges resulted in significant cash outflows in the past and could do so in the
+future. The same applies to our share-based payment expense because most of our share-based
+payments are settled in cash rather than shares.
+To Our
+Stakeholders
+65/338
+SAP
+SAP Integrated Report 2021
+Adj. Non-IFRS
+IFRS
+Currency
+Non-IFRS
+2020
+2021
+Revenue measures
+€ millions, unless otherwise stated
+Reconciliations of IFRS to Non-IFRS Financial Measures for the Years 2021 and 2020
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+Stakeholders
+To Our
+The expense adjustment for acquisition-related charges does not arise from a common conceptual
+basis. This is because the expense adjustment aims to improve the comparability between post-
+acquisition periods and pre-acquisition periods. This should particularly be considered when
+evaluating our operating profit (non-IFRS) and operating margin (non-IFRS) numbers, as these
+combine our revenue and expenses (non-IFRS) despite the absence of a common conceptual
+basis.
+A in %
+The acquisition-related amortization expense that we eliminate in deriving our profit (non-IFRS)
+numbers is a recurring expense that will impact our financial performance in future years.
+The remaining acquisition-related charges that we eliminate in deriving our profit (non-IFRS)
+numbers are likely to recur should SAP enter into material business combinations in the future.
+Similarly, the restructuring expenses that we eliminate in deriving our profit (non-IFRS) numbers are
+likely to recur should SAP perform restructurings in the future.
+-
+5,049
+Free cash flow
+-1
+-378
+-374
+Payments of lease liabilities
+6,000
+equipment (without acquisitions)
+-816
+-800
+Purchase of intangible assets and property, plant, and
+-13
+7,194
+6,223
+-2
+-16
+63/338
+64/338
+Without being analyzed in conjunction with the corresponding IFRS measures, the non-IFRS
+measures are not indicative of our present and future performance, foremost, but not limited, for the
+following reasons:
+Limitations of Non-IFRS Measures
+Non-IFRS and non-GAAP (Generally Accepted Accounting Principles) measures are widely used in
+the software industry. In many cases, inclusion of our non-IFRS measures may facilitate
+comparison with our competitors' corresponding non-IFRS and non-GAAP measures.
+The non-IFRS measures provide investors with additional information that enables a comparison of
+year-over-year operating performance by eliminating certain direct effects of acquisitions, share-
+based compensation plans, and restructuring plans.
+We believe that our non-IFRS measures are useful to investors for the following reasons:
+Our expense (non-IFRS), and profit (non-IFRS) measures, along with the current cloud backlog
+(CCB) measure (see above), provide investors with insight into management's decision-making
+because management uses these measures to run our business and make financial, strategic, and
+operating decisions. We exclude the expense adjustments outlined above when making decisions
+to allocate resources. In addition, we use these non-IFRS measures to facilitate comparisons of
+SAP's operating performance from period to period.
+-
+Usefulness of Non-IFRS Measures
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+While our profit (non-IFRS) numbers reflect the elimination of certain acquisition-related expenses,
+no eliminations are made for the additional revenue or other income that results from the
+acquisitions.
+-19,613
+Non-IFRS
+-19,824
+Related
+Related
+Non-IFRS
+Restruc-
+turing
+SBP1
+sition-
+IFRS
+Non-IFRS
+Restruc-
+turing
+SBP1
+sition-
+IFRS
+Acqui-
+Acqui-
+€ millions
+2020
+Information
+Additional
+2021
+Non-IFRS Adjustments by Functional Areas
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+5.41
+Cost of cloud
+-3,105
+169
+59
+-3,000
+0
+175
+3
+-3,178
+-2,630
+0
+266
+20
+-2,916
+Cost of services
+support
+-1,911
+0
+4.35
+55
+-2,008
+-1,822
+0
+70
+33
+-1,925
+Cost of software licenses and
+-2,451
+0
+40
+208
+-2,699
+-2,876
+0
+42
+26.5
+26.8
+30.3
+Profit after tax
+-2,350
+-413
+-1,938
+-2,084
+-613
+-1,471
+Income tax expense
+1,664
+7,220
+10,421
+3,573
+6,847
+Profit before tax
+5,376
+776
+776
+2,174
+0
+2,174
+Financial income, net
+-697
+0
+-697
+-949
+0
+-949
+Finance costs
+1,473
+0
+0
+Research and development
+2,960
+5,283
+24.2
+29.8
+66/338
+Due to rounding, the sum of the numbers presented in the table above might not precisely equal the totals we provide.
+6.73
+20.0
+29.6
+4.46
+21.5
+16.7
+Earnings per share, basic (in €)
+Effective tax rate (in %)
+Operating margin (in %)
+Key ratios
+8,337
+138
+138
+394
+273
+121
+Attributable to non-controlling interests
+6,396
+1,251
+5,145
+7,943
+2,687
+5,256
+Attributable to owners of parent
+6,534
+1,251
+0
+-5,190
+10
+513
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+SAP solutions for human experience management (HXM) under the SAP SuccessFactors brand aim
+to increase the value of a workforce by developing, managing, engaging, and empowering people.
+SAP SuccessFactors HXM Suite was designed to provide decision-makers with tools to identify and
+reduce unconscious bias from key people decisions such as hiring, calibration, and compensation.
+With embedded analytics throughout the suite, SAP SuccessFactors HXM solutions aim to enable
+organizations to visualize and forecast diversity trends, as well as track and measure progress against
+diversity, equity, and inclusion goals through custom reports, dashboards, and scorecards.
+Human Experience Management
+At SAPPHIRE NOW in 2021, we announced the availability of RISE with SAP transformation
+packages for specific industries that provide business transformation-as-a-service with five
+industry-tailored cloud solutions for retail, consumer products, automotive, utilities, and industrial
+machinery and components. RISE with SAP for Modular Cloud ERP, which includes ERP
+capabilities in different domains and lines of business (LoBs), namely procurement, human
+experience management (HXM), analytics, and governance, was also announced at our annual event.
+Around 2,800 SAP S/4HANA customers were added in 2021, bringing the number of customers to
+approximately 18,800, up 18% year over year.
+SAP offers a choice of SAP S/4HANA deployments - in the public cloud via software as a service
+(SaaS), in a private cloud or on premise as well as a combination in a hybrid deployment.
+Launched in January 2021, RISE with SAP is our business-transformation-as-a-service offering that
+aims to support and accelerate customers in their transformation to an intelligent enterprise. It is a
+package of products and tools and includes SAP S/4HANA Cloud - either public or private
+deployment options; business process intelligence (BPI) solutions; migration tools and services
+including the SAP Readiness Check tool and the Custom Code Migration app; infrastructure
+provided by any hyperscaler or SAP data center; SAP Business Technology Platform (SAP BTP);
+and an SAP Business Network Starter Pack.
+SAP S/4HANA is our ERP suite with intelligent technologies such as artificial intelligence (AI),
+machine learning, and advanced analytics. Running on SAP HANA, the suite combines automation
+and integrated business processes analytics and a role-based user experience. The suite provides
+software capabilities for finance, sales, service, procurement, manufacturing, and asset management,
+as well as research and development (R&D).
+In 2021, we maintained a leadership position in the Gartner Magic Quadrant for Cloud HCM Suites for
+1,000+ Employee Enterprises that we have been awarded for six consecutive years; the 2021 IDC
+MarketScape Reports for Talent Management for nine consecutive years; and the inaugural The
+Forrester Wave: Learning Management Systems and Experience Platforms report.
+SAP S/4HANA Cloud
+The goal of our product and services portfolio is to deliver on this expanded vision.
+Enabling a sustainable world
+Creating a network of intelligent, sustainable enterprises
+Helping customers become intelligent and sustainable enterprises
+of intelligent, sustainable enterprises." Our strategy was built on the following focus areas:
+In 2021, we expanded on 2020's REINVENT strategy to “REINVENT how the world runs as a network
+Products, Research &
+Development, and Services
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Stakeholders
+Combined Group
+To Our
+For an overview of our strategy, see the Strategy section.
+SAP Integrated Report 2021
+Intelligent Spend Management
+At SAPPHIRE NOW, we introduced Verify, a new SAP Concur service that uses Al and machine
+learning to evaluate companies' expense reports and identify anomalies.
+-212
+Experience Management (XM) refers to both Qualtrics technology as well as the discipline of seeking
+out and closing the experience gaps across the four core areas of businesses - customer, product,
+employee, and brand. In 2021, Qualtrics acquired Clarabridge, adding omnichannel conversational
+analytics to Qualtrics XM Platform. The combination of SAP and Qualtrics' respective offerings, as
+well as integration into our suite solutions aim to help organizations and governments bring real-time
+customer and employee sentiment to their travel and expense programs, vaccination efforts, and
+business and office reopening.
+Experience Management
+For more information, see Sustainable Solutions and Products in Use in the Energy and Emissions
+section.
+As a key strategic pillar, sustainability is a topic that is covered across the various SAP product areas
+along emerging and maturing environmental, social, and governance (ESG) standards from
+organizations such as the World Economic Forum (WEF), the International Sustainability Standards
+Board (ISSB), the European Union (EU), and others. The goal of our sustainability management
+solutions is to enable customers to include sustainability as a new dimension into their business
+processes and operations. SAP offers solutions focusing on ESG reporting, climate change, circular
+economy, and social responsibility.
+Sustainable Business Solutions, Services, and Partnerships
+With the SAP-wide initiative One Process Acceleration Layer (OPAL), we aim to create a primary
+resource for process repository, process simulation, process mining and analytics, process
+collaboration, and enterprise-wide dissemination.
+Released in September 2021, SAP Process Insights aims to help companies foster continuous
+improvements with performance views and process drilldowns, as well as recommendations and
+improvement actions.
+Our goal is to offer one integrated BPI portfolio, the SAP Signavio Business Process Management
+(BPM) Suite. The suite consists of branded SAP Signavio solutions and the SAP Process Insights
+solution with integration into application lifecycle management solutions SAP Solution Manager and
+SAP Cloud ALM. The suite aims to deliver business transformation capabilities for our customers and
+partners with quick time to insights and time to deploy. This portfolio is powered by SAP BTP
+capabilities such as workflow management, citizen automation, low-code/no-code, and intelligent
+robotic process automation. Acquisitions such as Signavio and the no-code platform SAP AppGyver
+contributed to this comprehensive business process transformation solution.
+Business process intelligence (BPI) solutions aim to help our customers analyze their operations,
+understand their process bottlenecks, and improve their business process landscape.
+Business Process Intelligence
+Information
+Additional
+Further Information on
+Sustainability
+SAP provides a comprehensive set of solutions for customers to better navigate spend management
+decisions aligned with corporate strategies. It brings together SAP's intelligent spend management
+solutions including products branded under SAP Ariba, SAP Concur, and SAP Fieldglass as well
+as SAP Business Network. Our intelligent spend management solutions aim to address our
+customers' end-to-end procurement, travel and expense, and external workforce needs with visibility
+across the entire supply chain.
+Consolidated Financial
+Statements IFRS
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+70/338
+69/338
+As part of our strategy to make SAP Business Network more open, SAP announced a partnership with
+Amazon Business in Q3/2021. This partnership aims to enable users to tap into millions of items listed
+on Amazon Business directly from within SAP Ariba solutions, as well as assist with compliance with
+corporate purchasing policies. With this partnership and technology integration, Amazon Business
+becomes a source of supply for Spot Buy, a capability within SAP Ariba solutions for users to
+purchase items from trusted suppliers.
+SAP officially launched SAP Business Network in June 2021, bringing together Ariba Network,
+SAP Logistics Network, and SAP Asset Intelligence Network with the aim to unify the points of
+interaction and integration across trading partners – from supplier collaboration to logistics
+coordination and traceability, to equipment usage and maintenance. The trading partner directory in
+SAP Business Network aims to provide trading partners with a view of their customer relationships
+and transactions on the network.
+-
+This platform aims to help our customers, partners, and internal development teams to store and
+manage data, derive insights, build, extend, and integrate applications, as well as optimize and
+automate business processes in and beyond SAP landscapes. Across technologies, SAP provides
+customers actionable use cases with prebuilt support and executable code that is ready to deploy.
+As part of our multi-cloud strategy, we increased our global footprint of SAP BTP by adding to our
+regional presence in APJ and Europe. New points of presence include Microsoft Azure in Sydney as
+well as Amazon Web Services (EU Access) and Google Cloud Platform (GCP) in Frankfurt.
+SAP Business Network
+SAP Business Technology Platform (SAP BTP) spans a comprehensive set of on-premise and
+cloud-native technologies and services that support SAP applications across four areas: database and
+data management; analytics; application development and integration; and Al and robotic process
+automation.
+SAP Business Technology Platform
+Our SAP Customer Experience solutions bring together customer data, machine learning
+technology, and microservices to support customer engagements across end-to-end processes in the
+areas of marketing, commerce, sales, and service. The focus for 2021 was maintaining leadership
+positions in various "magic quadrants" such as Gartner's Magic Quadrant for Sales Force Automation
+with SAP Sales Cloud; Forrester Wave for Customer Identity and Access Management (CIAM) with
+SAP Customer Data Cloud (formerly Gigya); and Gartner Magic Quadrant for Personalization Engines
+for SAP Emarsys Customer Data platform.
+Customer Experience
+Combined Group
+Management Report
+1,473
+SAP
+67/338
+Restructuring
+-1,190
+0
+157
+9
+-1,356
+-1,181
+0
+1,230
+20
+-2,431
+General and administration
+-6,371
+0
+-157
+360
+-7,106
+-6,479
+0
+655
+370
+-7,505
+Sales and marketing
+-4,151
+0
+296
+7
+-4,454
+-4,667
+0
+375
+68/338
+0
+157
+1 Share-based payments
+-19,056
+-3
+1,084
+577
+-20,715
+-19,613
+157
+2,794
+623
+-23,186
+Total operating expenses
+net
+18
+0
+0
+-66
+84
+43
+0
+0
+0
+43
+Other operating income/expense,
+0
+-3
+0
+0
+3
+0
+0
+3,123
+Industry Cloud
+0
+0
+3,123
+Finance income
+-179
+-179
+17
+0
+17
+8,287
+1,664
+6,623
+Other non-operating income/expense, net
+178
+-20,715
+1,659
+8,408
+Profit numbers
+-19,056
+4,656
+3,573
+8,230
+Operating profit
+Total revenue increased from €27,338 million in 2020 to €27,842 million in 2021, representing an
+increase of €504 million, or 2%.
+27,842
+Cloud and software revenue represented 86% of total revenue in 2021 (2020: 85%). Service revenue
+decreased 8% from €4,110 million in 2020 to €3,764 million in 2021, which was 14% of total revenue
+(2020: 15%).
+2021
+2020
+-1%
+2%
+27,338
+Economy and the Market
+2018
+2017
+12%
+5%
+6%
+27,553
+SAP
+€ millions | change since previous year
+2019
+SAP Integrated Report 2021
+3,248
+Stakeholders
+For more information about our regional performance, see the Revenue by Region section.
+Cloud revenue refers to the income earned from contracts that permit the customer to access specific
+software solutions hosted by SAP or third parties engaged by SAP during the term of its contract with
+SAP. Software licenses revenue results from the fees earned from selling or licensing software to
+customers. Support revenue represents fees earned 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).
+11,412
+9,418
+3,764
+Services
+Software Support
+Total Revenue
+To Our
+Software Licenses
+Revenue by Revenue Type
+Cloud
+Additional
+Information
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+€ millions
+23,461
+To Our
+Stakeholders
+Revenue
+At constant currencies, the resulting non-IFRS cloud revenue grew from €8.09 billion in 2020 to
+€9.59 billion in 2021, hitting the high end of our guidance range of €9.4 billion to €9.6 billion. That
+represented an increase of 19% at constant currencies.
+Our current cloud backlog (contractually committed cloud revenue that we expect to recognize over
+the upcoming 12 months) reached €9.01 billion at constant currencies (€9.45 billion at actual
+currencies; 2020: €7.15 billion). This was an increase of 26% (2020: 14%) on a constant currency
+basis.
+In a global economic situation that keeps being shaken by the COVID-19 pandemic, the demand for
+our solutions and services was higher than assumed in 2021, reflecting the strong business
+performance which is expected to continue to accelerate cloud revenue growth.
+20.0%
+21.5%
+21.0% to 22.0%
+20.0% to 21.0%
+20.0% to 21.5%
+Cloud and software revenue (non-IFRS) grew 5% at constant currencies to €24.41 billion
+(2020: €23.23 billion), and thus ended above our range forecasted for 2021 of €23.8 billion to
+€24.2 billion.
+22.5% to 23.5%
+26.5%
+21.5% to 23.0%
+26.0% to 27.0%
+27.5% to 28.5%
+26.8%
+Effective tax rate (non-IFRS)
+Effective tax rate (IFRS)
+24.5% to 25.5%
+Thanks to the strong increase in cloud business described above, we were able to increase the share
+of more predictable revenue 3.3pp to 75% (2020: 72%). As such, our total revenue (non-IFRS)
+increased slightly despite a decline in the software license business, which is in line with our cloud
+transformation.
+Total revenue (non-IFRS) on a constant currency basis grew 3% in 2021 to €28.23 billion
+(2020: €27.34 billion).
+Operating expenses (non-IFRS) in 2021 on a constant currency basis increased 4% to €19.82 billion
+(2020: €19.06 billion).
+We break our operations down into three regions: the Europe, Middle East, and Africa (EMEA) region,
+the Americas region, and the Asia Pacific Japan (APJ) region. We allocate revenue amounts to each
+region based on where the customer is located. For more information about revenue by geographic
+region, see the Notes to the Consolidated Financial Statements, Note (A.1).
+This section on operating results (IFRS) discusses results only in terms of IFRS measures, so the IFRS
+numbers are not expressly identified as such.
+Operating Results (IFRS)
+We achieved an effective tax rate (IFRS) of 21.5% and an effective tax rate (non-IFRS) of 20.0%, which
+is in the middle of the adjusted outlook of 21.0% to 22.0% (IFRS) and at the lower end of the range of
+20.0% to 21.0% (non-IFRS) we announced in October 2021.
+Non-IFRS operating profit in 2021 was €8.41 billion on a constant currency basis (2020: €8.29 billion),
+reflecting an increase of 1%. As a result, we were able to surpass our excellent results from 2019 and
+2020, despite our continued investment in our business transformation during the reporting year. The
+development of our operating profit was largely influenced by investment decisions in our innovation
+areas and growth markets. This, among other things, resulted in an increase of our overall headcount
+by 4,984 full-time equivalents or FTEs (4,071 thereof organically), primarily in research and
+development as well as in sales and marketing. Thus, non-IFRS operating profit on a constant
+currency basis amounting to €8.41 billion exceeded the top end of the target range (€8.1 billion to
+€8.3 billion).
+Profitability in our software as a service/platform as a service (SaaS/PaaS) excluding intelligent spend
+cloud offerings was 70% at constant currencies (non-IFRS) for 2021. Due to ongoing investments in
+the further development and harmonization in the operation of our various SaaS/PaaS offerings on a
+single platform, the gross margin declined 0.5pp.
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Combined Group
+Management Report
+Cloud and Software Revenue
+SAP Integrated Report 2021
+SAP
+78/338
+77/338
+The cloud gross margin (non-IFRS) on our infrastructure as a service (laaS) cloud offerings saw a
+decline of 0.8pp for 2021 on a constant currency basis to achieve a cloud gross margin (non-IFRS) of
+34% for the full year.
+The cloud gross margin (non-IFRS) on our intelligent spend management offerings improved 0.6pp on
+a constant currency basis, resulting in 80% for 2021 (2020: 79%).
+Our expense base in 2021 was impacted by our transformation to a fast-growing cloud business. The
+cloud gross margin (non-IFRS) for 2021 was 69%, declining slightly in comparison with the previous
+year, despite the increase in cloud revenue. This decline was predominantly due to investments into
+our cloud delivery program.
+24,708
+€ millions | change since previous year
+4%
+19,549
+9,418
+8,080
+6,933
+14,677
+15,975
+19,586
+20,829
+3,769
+18,480
+€ millions
+More Predictable Revenue
+Software licenses and software support revenue decreased €488 million, or 3%, from €15,148 million
+in 2020 to €14,660 million in 2021.
+(2020: €11,506 million), the slight decline being driven by an accelerated transition to the cloud and
+unfavorable currency exchange rates. SAP Enterprise Support was the largest contributor to our
+software support revenue.
+The continued demand for SAP software helped us maintain a stable maintenance customer base for
+software support, resulting in software support revenue of €11,412 million in 2021
+Our software licenses revenue declined €393 million from €3,642 million in 2020 to €3,248 million in
+2021.
+Cloud revenue increased €1,337 million, or 17%, from €8,080 million in 2020 to €9,418 million in 2021.
+With continued lower transactional revenue, SAP Concur and SAP Fieldglass supplier business grew
+moderately, having an unfavorable impact on the cloud revenue growth. The current cloud backlog
+increased 32% to €9,447 million in 2021 (2020: €7,155 million).
+Software Support Cloud
+Additional
+Information
+4,993
+10,981
+According to the European Central Bank (ECB), (A) the global economy was on the road to recovery in
+2021, with some advanced economies even returning to their pre-pandemic trajectories by year end.
+Overall, however, the recovery turned out to be less smooth than expected. Toward the end of the
+year, the ECB even revised its previous projections downward when the emergence of the Omicron
+variant of the coronavirus threatened to intensify the pandemic on a global scale.
+For more information about the development of our Services segment, see the Segment Information
+section.
+(2020: €702 million), which was mainly caused by the divestiture of the SAP Digital Interconnect
+business.
+of the total services revenue (2020: 83%) and 12% of total revenue (2020: 12%).
+Consulting revenue and premium support revenue decreased €114 million, or 3%, from €3,408 million
+in 2020 to €3,294 million in 2021. In 2021, consulting and premium support revenue contributed 87%
+Services revenue decreased €345 million, or 8%, from €4,110 million in 2020 to €3,764 million in 2021.
+The services revenue decline was predominantly caused by the divestiture of the SAP Digital
+Interconnect business in 2020. For more information, see Note (D.1). At the same time, the year-over-
+year revenue development continued to be negatively impacted by the lower consulting order entry
+generated in 2020 in the wake of COVID-19 pandemic uncertainties.
+Services revenue combines revenue from consulting services, premium support services, and other
+services such as training services. Consulting services primarily relate to the implementation of our
+cloud and on-premise software products. Our premium support offering consists of high-end support
+services tailored to customer requirements.
+10,908
+We define more predictable revenue as the sum of our cloud revenue and our software support
+revenue. Our more predictable revenue increased from €19,586 million in 2020 to €20,829 million in
+2021. This reflects a rise of 6%. More predictable revenue accounted for 75% of our total revenue in
+2021 (2020: 72%), following the upward trend from prior years.
+2020
+2019
+2018
+2017
+11,412
+11,506
+11,547
+2021
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+€ millions | change since previous year
+Cloud Revenue
+Cloud and software revenue grew from €23,228 million in 2020 to €24,078 million in 2021, an increase
+of 4%.
+2021
+2020
+1%
+75%
+6,933
+24,078
+2019
+12%
+23,012
+2018
+2017
+5%
+6%
+23,228
+4,993
+3,769
+39%
+Combined Group
+To Our
+Stakeholders
+SAP Integrated Report 2021
+SAP
+80/338
+79/338
+2021
+2020
+2019
+2018
+2017
+17%
+17%
+8,080
+9,418
+26%
+32%
+20,622
+€8.41 billion
+Revenue from other services decreased €231 million, or 33%, to €471 million in 2021
+75%
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Additional
+Information
+processes with pre-defined templates and accelerators. These industry cloud-based services also
+include quick-start services to speed functional implementation and technical readiness.
+Expanding Our Support Offerings
+SAP continued to expand and scale the capabilities of our customers' support experience, including
+the following ways:
+A new version of Built-In Support, a product-embedded digital support assistant, was released.
+SAP Cloud ALM has provided implementation and operation capabilities for cloud solutions
+which now includes solution monitoring, partner delivery content, and APIs, for a number of SAP
+solutions.
+An engagement model was established where customers, through their Customer Success team at
+SAP, now have access to domain experts through newly formed Success Centers.
+SAP Preferred Success now covers SAP S/4HANA Cloud, private edition and is available through
+the RISE with SAP offering.
+SAP Learning System Access (previously called SAP Live Access) is now available as an
+integrated platform within SAP Learning Hub, edition for Preferred Success, providing access to
+live, preconfigured instances of SAP software to carry out class exercises, cross-train, and gain
+hands-on experience.
+Simplifying Business Journeys
+To accelerate the implementation of specific business scenarios, premium engagement services
+have been bundled into out-of-the box service plans, providing a prescribed implementation approach
+and road map broken down into phases with individual steps and timelines. Over 25 business
+scenarios are available.
+Enhancing the SAP MaxAttention Program
+The SAP MaxAttention program was expanded to enhance collaboration with customers. This
+includes continuing the launch of the Intelligent Enterprise institute to help customers explore the
+full potential of SAP products and solutions through thought leadership, think tanks, and unique
+events. Chapters have now been established in Berlin, London, and New York.
+Investment in R&D
+SAP's strong commitment to R&D is reflected in our expenditures (see graphic below).
+Research & Development (IFRS)
+€ millions | change since previous year
+4,292
+3,624
+Management Report
+3,352
+Combined Group
+SAP Integrated Report 2021
+Ecosystem
+SAP's ecosystem consists of more than 22,500 partners worldwide in over 140 countries that build,
+sell, service, and run SAP solutions and technology. The introduction of SAP PartnerEdge Cloud
+Choice, flex model in 2021 offers greater flexibility for customers, partners, and SAP to support cloud
+adoption. Through emphasis on landing customers as well as fostering engagement, SAP and our
+partners have new opportunities in the midmarket and large enterprise segments. Our 2025 ambition
+is to develop a radically partner-centric approach in line with the wider SAP strategy.
+Simplifying Partner and Customer Engagement Through RISE with SAP
+From a services perspective, the RISE with SAP offering simplifies the engagement between SAP,
+ecosystem partners, and our customers. Aiming to support small and midsize business (SMB)
+partners, partner services for RISE with SAP are available for the enablement of their teams and
+offered in partner-led customer engagements. In line with this, SAP Learning Hub aims to support
+enabling and certificating SMB partners.
+Services and Support
+Complementing our software and technology offerings, SAP provides services and support to help
+customers continually realize business value from their SAP investment. Throughout the customer
+lifetime partnership, we aim to help customers as they implement and adopt new solutions in the
+cloud, move legacy solutions to the cloud, or transform their business.
+Speeding Up the Adoption of SAP Solutions
+The standardization and automation of our remote service delivery on the Intelligent Service
+Delivery Hub aims to assist customers with their adoption and improve delivery efficiency and
+quality. This is a new cloud-based service delivery and collaboration platform for customers, partners,
+and SAP to use throughout the customer engagement lifecycle. Embedded automation capabilities
+aim to enable automated quality checks, performance issue detection, and customer notification to
+mitigate potential issues that may arise.
+Scaling RISE with SAP
+To scale the RISE with SAP offering, the SAP Services and Support organization focused on the
+development of a comprehensive, full-lifecycle adoption methodology. The methodology goal is to
+drive successful customer adoption and provide clearly outlined deliverables throughout the
+engagement of each RISE journey in 30/60/90/120-day sprints. The activities during these sprints are
+closely aligned with the SAP Integrated Delivery Framework, which allows for seamless partner
+collaboration.
+Supporting Business Transformation
+To support our customers in getting started quickly and realizing their desired business transformation,
+a series of low-touch, fixed scope services were introduced to help customers detail, model, and
+design the business transformation based on our BPI portfolio.
+Enabling Use of SAP BTP
+To scale the delivery of the value of SAP BTP to our customers, all relevant service offerings and
+methods were adjusted to ensure the ability to use the platform in all service-related projects. To
+ensure easy integration across different solutions, a program was initiated to make integration-related
+content available to all customers and the developer community on SAP API Business Hub, the
+central catalog for integrations and extensions.
+Starting Fast with Industry Cloud Solutions
+Industry cloud-based services are now available. These services include industry-specific advisory
+services that aim to help discover and prioritize innovation opportunities and reimagine business
+71/338
+72/338
+SAP
+To Our
+Stakeholders
+Additional
+Information
+18%
+8%
+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, 2021, SAP
+held a total of more than 11,605 (2020: 10,931) validated patents worldwide. Of these, 793
+(2020: 897) were granted and validated in 2021.
+73/338
+74/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+€8.1 billion
+to €8.3 billion
+75%
+Financial Performance:
+Review and Analysis
+Obtaining certification for products in different markets
+10%
+Translating, localizing, and testing products
+by 2.0pp to 23.8% year over year (2020: 21.8%). At the end of 2021, our total full-time equivalent
+(FTE) headcount in development work was 32,244 (2020: 29,580). Measured in FTEs, our R&D
+headcount was 30% of total headcount (2020: 29%).
+2017
+2018
+2019
+5,190
+4,454
+4%
+2020
+17%
+2021
+In 2021, our IFRS R&D ratio, reflecting R&D expenses as a portion of total operating expenses,
+increased by 0.9 percentage points (pp) to 22.4% (2020: 21.5%). Our non-IFRS R&D ratio increased
+SAP Integrated Report 2021
+SAP
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Total R&D expense not only includes our own personnel costs but also the external costs of work and
+services from the providers and cooperation partners we work with to deliver and enhance our
+products. We also incur external costs for the following:
+Further Information on
+Sustainability
+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.
+Combined Group
+Management Report
+€9.3 billion
+to €9.5 billion
+Results
+for 2021
+Outlook for 2021
+(Integrated Report
+2020)
+Results
+for 2020
+Comparison of Outlook and Results for 2021
+2021 Actual Revenue and Profit Performance Compared to Outlook (Non-IFRS)
+On the cloud revenue side, we reached the upper end of the guidance, while our cloud and software
+revenue and our operating profit both exceeded the outlook adjusted in October 2021.
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+We adjusted our projection for cloud revenue upward to range between €9.4 billion and €9.6 billion,
+which represented a growth rate of 16% to 19% at constant currencies. In addition, the Company then
+anticipated cloud and software revenue of between €23.8 billion and €24.2 billion. This range
+represented a growth rate of 2% to 4% at constant currencies. Furthermore, we projected the share of
+more predictable revenue to reach approximately 75%. We also set a target range of €8.1 billion to
+€8.3 billion for our operating profit, which represented a decrease of 2% to flat at constant currencies.
+We expected a full-year 2021 effective tax rate (IFRS) of 21.0% to 22.0% and an effective tax rate
+(non-IFRS) of 20.0% to 21.0%. The decrease in comparison to the previous outlook mainly resulted
+from changes in tax-exempt income.
+In our quarterly statement published on October 21, 2021, we raised our outlook again to further
+reflect the strong business performance. This outlook likewise continued to assume that the COVID-19
+pandemic would continue to recede as vaccine programs rolled out globally.
+In July 2021, we adjusted our outlook for cloud revenue at constant currencies to range between
+€9.3 billion and €9.5 billion and for cloud and software revenue to range between €23.6 billion and
+€24.0 billion, resulting in a new projected non-IFRS operating profit of between €7.95 billion and
+€8.25 billion. We adjusted our outlook for the effective tax rate (IFRS) to between 21.5% and 23.0%
+and for the effective tax rate (non-IFRS) to between 20.0% and 21.5%. The decrease in comparison to
+the previous outlook mainly resulted from changes in tax-exempt income.
+The initial outlook for 2021, updated on April 13, 2021 (for more information, see the table
+"Comparison of Outlook and Results for 2021"), reflected the strong new cloud business performance,
+which was expected to reaccelerate cloud revenue growth, while software licenses revenue was
+expected to decline for the full year as more customers turned to the RISE with SAP subscription
+offering. This outlook also continued to assume that the COVID-19 pandemic would begin to recede
+as vaccine programs rolled out globally, leading to a gradually improving global demand environment
+in the second half of 2021. In this context, we predicted cloud revenue to range between €9.2 billion
+and €9.5 billion, and cloud and software revenue to range between €23.4 billion and €23.8 billion, with
+more predictable revenue anticipated to make up 75% of this result. Furthermore, we expected
+operating profit (non-IFRS) to range between €7.8 billion and €8.2 billion. We expected a full-year
+2021 effective tax rate (IFRS) of 27.5% to 28.5% (2020: 26.8%) and an effective tax rate (non-IFRS) of
+24.5% to 25.5% (2020: 26.5%). In April 2021, we adjusted our outlook for the effective tax rate (IFRS)
+to between 26.0% and 27.0% and for the effective tax rate (non-IFRS) to between 22.5% and 23.5%.
+The decrease in comparison to the previous outlook mainly resulted from changes in taxes for prior
+years and tax-exempt income. Under IFRS, these positive tax effects were partly compensated by
+changes in non-deductible expenses.
+Revised Outlook
+Outlook for 2021 (Non-IFRS)
+for 2021
+(Q3 Quarterly
+Statement)
+€23.8 billion
+to €24.2 billion
+Revised Outlook
+for 2021
+(Half-Year Report)
+Consolidated Financial
+Statements IFRS
+€23.6 billion
+to €24.0 billion
+€7.95 billion
+to €8.25 billion
+for 2021
+(Q1 Quarterly
+Statement)
+€9.2 billion
+to €9.5 billion
+€23.4 billion
+to €23.8 billion
+€7.8 billion
+to €8.2 billion
+75%
+75%
+72%
+Share of predictable revenue
+€7.8 billion
+to €8.2 billion
+(non-IFRS, at constant currencies)
+Operating profit
+€9.1 billion
+to €9.5 billion
+€23.3 billion
+to €23.8 billion
+€23.23 billion
+Cloud and software revenue
+(non-IFRS, at constant currencies)
+€8.09 billion
+(non-IFRS, at constant currencies)
+Cloud revenue
+Revised Outlook
+€24.41 billion
+€9.59 billion
+€9.4 billion
+to €9.6 billion
+As in previous years, our 2021 operating profit-related goals and published outlook were based on our
+non-IFRS financial measures at constant currencies. For this reason, in the following section we
+discuss performance against our outlook only in terms of non-IFRS numbers (at constant currencies)
+derived from IFRS measures. The subsequent section about IFRS operating results discusses
+numbers only in terms of the International Financial Reporting Standards (IFRS), so the numbers in
+that section are not expressly identified as IFRS numbers.
+€8.29 billion
+commitment to sustainability is also reflected in our target to reach CO2-neutrality in our own
+operations by 2023 and our announcement to achieve net-zero along our value chain in 2030.
+We are confident that we will continue our growth path in 2022 and will deliver on both our financial
+and non-financial outlook for 2022 and on our 2025 mid-term ambition.
+IDC observed in addition that “companies that traditionally weren't technology centric are now digitally
+transforming and adopting technology to run and support their businesses. As part of that
+transformation, many are rethinking their business models so they can offer differentiated and
+recurring services, which are harder to commoditize. Where companies once sold physical items, they
+are now reimaging their businesses to provide outcome-based recurring services."(C)
+counter supply chain disruptions. Organizations are preparing for the return to office, the return to
+travel, new consumer spending patterns, the challenges of finding (higher-cost) talent, and the
+possible return of inflation in an environment of continued economic uncertainty. Innovation and
+digital resiliency become key to navigating ongoing disruption. During the pandemic, changes in
+behavior, consumption, and supply forced companies to adopt digital-led business and operating
+models that endure lockdowns, movement restrictions, social distancing, and more. Work from
+anywhere, connectivity, scalability, security, throughput, resiliency, and redefining internal processes
+for remote access will define the next normal."(C)
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Management Report
+Combined Group
+To Our
+Stakeholders
+Monitoring decarbonization initiatives turned out to be a key component of digital transformation in
+the reporting year. "Beyond just cost take out, organizations will increasingly be disrupting themselves
+by using lower carbon power sources and creating more sustainable operations to adhere to the
+numerous sustainability standards that fall under the environmental, social, and governance (ESG)
+umbrella. More than 40% of organizations surveyed by IDC worldwide have declared an intent to
+reduce CO2 in their products/services, while about 30% have implemented a CO2 monitoring solution
+and another 20% are currently developing a CO2 monitoring solution," observed IDC. (B)
+SAP
+According to IDC, “adaptations and lessons learned from the COVID-19 pandemic are becoming
+permanent, requiring revised global business and operating models. Digital resilience approaches
+"2021 represented times of uncertainty due to the global health crisis and the upending of traditional
+business practices, but it also fueled further growth in digital technology pivots and digital
+transformation." This is how International Data Corporation (IDC), a U.S.-based market research firm,
+summarizes the reporting year. (B) "One notable impact of the COVID-19 pandemic is that many
+enterprises now recognize that their ability to build innovative digital products and services will
+determine whether they succeed or fail in the market. The imperative to develop innovative digital
+offerings is influencing an array of strategic decision making in the enterprise, including significant
+changes to business models, organizational models, distribution models, and revenue streams, says
+IDC. (C)
+In the EMEA region, after a technical recession at the start of the year, the euro area economy
+recovered moderately in 2021 thanks to robust domestic demand, and nearly reached its pre-
+pandemic level of output in the third quarter. However, economic activity in the euro area waned
+again over the final quarter of the year as some countries reintroduced tighter containment measures
+to cope with new pandemic waves. In central and eastern Europe, economic activity stabilized until
+the third quarter but slackened in the fourth, reflecting a significant deterioration of the
+epidemiological situation, persistent supply bottlenecks, and high energy prices. In Russia, rising
+global demand for oil and gas supported economic activity throughout 2021, while sharply increasing
+numbers of pandemic infections led to tighter containment measures toward the end of the year.
+As for the Americas region, economic activity recovered in the United States, with subdued growth in
+the third quarter caused by a resurgence of pandemic infections. Over the year, consumer demand in
+the United States rotated toward services, which were not subject to supply bottlenecks. In Brazil, a
+tighter policy stance and limited fiscal space constrained economic activity in 2021, reports the ECB.
+Concerning the APJ region, the ECB finds that the Japanese economy slowed until the third quarter in
+the face of supply bottlenecks and the pandemic resurgence. However, it rebounded in the fourth
+quarter when containment measures were eased, vaccinations progressed, and policy support
+continued. In China, on the other hand, economic activity decelerated in the second half of the year
+because of energy shortages, turmoil in the residential property sector, and renewed pandemic
+outbreaks.
+Throughout 2021, rising commodity prices led to a buildup of inflationary pressures across the globe,
+reports the ECB. While the services sector benefitted from large economies reopening, supply
+bottlenecks interfered with the manufacturing sector in particular. In addition to pandemic
+uncertainties, these factors weighed on global economic activity, with the recovery lagging behind
+especially in emerging market economies.
+SAP
+Stakeholders
+Performance Against Our Outlook for 2021 (Non-IFRS)
+SAP Integrated Report 2021
+To Our
+SAP Integrated Report 2021
+Sources:
+The IT Market
+(B) IDC FutureScape: Worldwide Digital Transformation 2022 Predictions, Doc #US47115521, October 2021
+(A) European Central Bank, Economic Bulletin, Issue 8/2021, Publication Date: January 13, 2022
+(https://www.ecb.europa.eu/pub/pdf/ecbu/eb202108.en.pdf)
+Management Report
+Combined Group
+To Our
+Stakeholders
+Additional
+SAP
+76/338
+75/338
+SAP's non-financial performance developed as follows: the Customer Net Promoter Score was 10,
+hitting the upper end of our 2021 guidance (5 to 10). Employee Engagement decreased slightly to
+83% (-3pp compared to 2020 and remaining below our outlook for 2021 (84% to 86%)). Our net
+carbon emissions continued to decrease by 18.5% to 110 kt (outlook for 2021: 90 kt to 110 kt). SAP's
+SAP Integrated Report 2021
+Looking at most of our financial and non-financial KPIs, the course of business was favorable for SAP
+in 2021:
+(c) IDC FutureScape: Worldwide Future of Digital Innovation 2022 Predictions, Doc #US47148621, October 2021
+Full-year cloud revenue was up 17% to €9.42 billion and up 19% to €9.59 billion at constant
+currencies, hitting the high end of the revised full year outlook (€9.4 billion to €9.6 billion at constant
+currencies). Cloud and software revenue was up 4% year over year to €24.08 billion and up 5% to
+€24.41 billion at constant currencies, exceeding the high end of the revised full-year outlook
+(€23.8 billion to €24.2 billion at constant currencies). IFRS operating profit decreased 30% year over
+year to €4.66 billion. Non-IFRS operating profit was down 1% to €8.23 billion and up 1% to
+€8.41 billion at constant currencies, exceeding the high end of the revised full-year outlook
+(€8.1 billion to €8.3 billion non-IFRS at constant currencies).
+Businesses around the world increasingly used digital technologies and the cloud to transform the
+way they do business. Companies expressed the need for flexibility and adaptability as a response to
+supply chain disruptions and new regulatory restrictions. The strength and the execution of our
+strategy showed up on multiple fronts, for instance with strong growth in current cloud backlog and
+cloud revenues in particular that exceeded our expectations. High customer adoption was
+underpinned by strong demand for our cloud offerings. Furthermore, Customer NPS continued to
+increase, echoing our efforts toward stronger customer focus.
+Overall Financial Position
+Impact on SAP
+Information
+Executive Board's Assessment
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+In 2021, our operating expenses increased €2,471 million, or 12%, to €23,186 million
+SAP continued to increase its cloud revenue in 2021. Total revenue increased significantly by 2% to
+€27,842 million (2020: €27,338 million), representing an increase of €504 million.
+Operating Profit and Operating Margin
+As a result of these effects, our operating profit decreased 30% to €4,656 million
+Information
+Additional
+(2020: €20,715 million). The main contributor to the increase were share-based payments, mainly
+caused by newly granted equity-settled Qualtrics RSUs. Our employee headcount (measured in full-
+time equivalents, or FTEs) grew 4,984 FTEs year over year to 107,415.
+Consolidated Financial
+Statements IFRS
+(2020: €6,623 million) and our operating margin decreased 7.5pp to 16.7% (2020: 24.2%).
+Management Report
+Combined Group
+To Our
+Stakeholders
+SAP
+SAP Integrated Report 2021
+Operating Profit
+Further Information on
+Sustainability
+2,582
+Cloud and software revenue in the APJ region totaled €3,798 million (2020: €3,625 million). That was
+89% of all revenue from the region (2020: 87%). Cloud revenue in the APJ region rose 18% to
+3,310
+3,625
+3,124
+419
+872
+€ millions | change since previous year
+611
+1,033
+1,217
+2,705
+2,699
+2,757
+2,592
+2017
+2018
+2019
+2020
+2021
+€1,217 million in 2021 (2020: €1,033 million). Software licenses and software support revenue
+decreased from €2,592 million in 2020 to €2,582 million in 2021.
+4,877
+2.3pp
+17%
+8.pp
+16.7
+16.2
+-6.9pp
+2019
+-7.5pp
+2020
+24.2
+2021
+Cost of Cloud and Software
+Cost of cloud and software consists primarily of costs for deploying and operating cloud solutions, the
+cost of developing custom solutions that address customers' specific business requirements, and
+customer support costs.
+In 2021, the cost of cloud and software increased to €5,030 million (2020: €4,707 million) and our
+cloud margin widened 0.4pp from 66.6% in 2020 to 67.0% in 2021.
+3,629
+Our software licenses and software support margin was 86.9%, slightly above the prior year level
+(2020: 86.7%). Software licenses and software support revenue decreased 3% to €14,660 million
+(2020: €15,148 million), primarily arising from an 11% decline in software revenue. Software licenses
+and software support costs decreased correspondingly by 4% to €1,925 million (2020: €2,008 million).
+83/338
+84/338
+Changes to the individual elements in our cost of revenue were as follows:
+5,703
+Percent | change since previous year
+2018
+-5%
+6,623
+4,656
+4,473
+48%
+-30%
+-22%
+Operating Margin
+2017
+2019
+2020
+2021
+23.1
+20.8
+-2.5pp
+2017
+2018
+3,798
+Cloud and software revenue generated in the EMEA region totaled €10,931 million
+€ millions
+1,441
+1,029
+10,931
+10,364
+2,608
+3,308
+7,730
+2,115
+7,898
+7,756
+7,624
+2017
+2018
+2019
+2020
+2021
+8,096
+(2020: €10,364 million). That was 87% of all revenue from the region (2020: 86%). Cloud revenue in
+the EMEA region rose 27% to €3,308 million in 2021 (2020: €2,608 million). Software licenses and
+software support revenue decreased 2% to €7,624 million in 2021 (2020: €7,756 million).
+8,759
+10,211
+Revenue by Region
+Revenue by Region (Based on Customer Location)
+SAP
+€ millions
+APJ
+Americas
+EMEA
+9,339
+4,285
+12,589
+EMEA Region
+In 2021, the EMEA region generated €12,589 million in revenue (2020: €12,067 million), which was
+45% of total revenue (2020: 44%). Revenue in Germany increased 8% to €4,343 million
+(2020: €4,015 million). Germany contributed 34% (2020: 33%) of all EMEA region revenue. The
+remaining revenue in the EMEA region was primarily generated in France, Italy, the Netherlands,
+Switzerland, and the United Kingdom.
+Cloud and Software Revenue (EMEA)
+€ millions
+Software & Support ■ Cloud
+10,969
+Software & Support ■Cloud
+Americas Region
+81/338
+4,894
+2,941
+5,345
+5,032
+5,227
+4,800
+4,455
+2,321
+2017
+2019
+2020
+2021
+Cloud and software revenue generated in the Americas region totaled €9,348 million
+(2020: €9,239 million). That was 85% of all revenue from the region (2020: 83%). Cloud revenue in the
+Americas region rose 10% to €4,894 million in 2021 (2020: €4,439 million). The United States, SAP's
+largest market, contributed 83% of cloud revenue generated in the Americas region. Software licenses
+and software support revenue amounted to €4,455 million in 2021 (2020: €4,800 million).
+APJ Region
+In 2021, 15% of our total revenue was generated in the APJ region (2020: 15%). Total revenue in the
+APJ region increased 3% to €4,285 million (2020: €4,165 million). Despite the unfavorable currency
+development in Japan, revenue reached €1,301 million, nearly matching the previous year's level of
+€1,305 million. Revenue from Japan accounted for 30% of all revenue generated in the APJ region
+(2020: 31%). In the remaining countries of the APJ region, revenue increased 4%. Revenue in the
+remaining countries of the APJ region was generated primarily in Australia, China, and India.
+Cloud and Software Revenue (APJ)
+2018
+In 2021, 39% of our total revenue was generated in the Americas region (2020: 41%). Total revenue in
+the Americas region decreased 1% to €10,969 million (2020: €11,106 million). Revenue in the United
+States decreased to €8,870 million (2020: €9,110 million), primarily driven by unfavorable changes in
+currency exchange rates. The United States contributed 81% (2020: 82%) of all revenue generated in
+the Americas region. In the remaining countries of the Americas region, revenue increased 5% to
+€2,099 million. Revenue in the remaining countries of the Americas region was generated primarily in
+Brazil, Canada, and Mexico.
+4,439
+7,973
+82/338
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+3,945
+Further Information on
+Sustainability
+Cloud and Software Revene (Americas)
+€ millions
+Software & Support Cloud
+9,172
+9,239
+9,348
+7,666
+Additional
+Information
+SAP Integrated Report 2021
+12
+Stakeholders
+0.3pp 0.6pp
+0.6pp
+Cloud gross margin-
+SaaS/PaaS¹ (in %)
+Cloud gross margin -
+laas² (in %)
+Cloud gross margin (in %)
+78.9
+Other
+70.2
+65.5
+70.7
+1.2pp -0.4pp
+-0.5pp
+Total
+70.8
+66.7 70.3
+73.3
+79.5 78.6
+78.9
+918
+21
+939 841
+0
+841
+9
+9
+79.5
+9,418 9,418
+9,592 8,080
+5
+8,085
+17
+16
+19
+Intelligent Spend
+174
+918
+73.3 70.4
+0.3pp -0.5pp
+2021
+2020
+A in %
+A in %
+€ millions, unless otherwise stated
+(non-IFRS)
+Actual
+Currency
+Constant
+Currency
+Applications, Technology & Support
+Cloud revenue
+8,661
+Cloud gross margin (in %)
+68.4
+68.4
+Actual
+Currency
+7,541
+69.3
+Information
+Actual
+Currency
+8,509
+73.8
+At the end of 2021, SAP had three reportable segments: Applications, Technology & Support;
+Qualtrics; and Services. For more information about our segment reporting and the changes in the
+composition of our reportable segments in 2021, see the Notes to the Consolidated Financial
+Statements, Notes (C.1) and (C.2), and the Performance Management System section.
+3 Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS numbers of the previous
+year's respective period.
+-0.5pp
+32.5
+33.6
+33.5 33.6
+34.3
+-1.1pp -0.7pp
+-0.8pp
+Segment Information
+67.0
+69.4
+66.6
+69.7
+0.4pp -0.2pp
+-0.3pp
+1 Software as a service/platform as a service
+2 Infrastructure as a service
+69.5
+To Our
+Cloud revenue
+19
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+General and administration expense increased 79% from €1,356 million in 2020 to €2,431 million in
+2021. This increase is primarily due to expenses from share-based payments, with a major effect
+coming from Qualtrics equity-settled plans. The ratio of general and administration expense to total
+revenue grew 3.8pp year over year to 8.7% (2020: 5.0%).
+Further Information on
+Sustainability
+Reconciliation of Cloud Revenues and Margins
+Q1-Q4 2021
+Q1-Q4 2020
+A in %
+Non-IFRS
+Non-IFRS
+€ millions, unless otherwise stated
+Additional
+Information
+Non-
+Our general and administration expense consists mainly of personnel costs to support our finance
+and administration, human resource, and corporate functions.
+Accordingly, the ratio of sales and marketing expense to total revenue, expressed as a percentage,
+increased 1.0pp in 2021 to 27.0% (2020: 26.0%).
+Combined Group
+Management Report
+Consolidated Financial
+Statements IFRS
+Further Information on
+Sustainability
+Additional
+Information
+Cost of Services
+General and Administration Expense
+Cost of services consists primarily of the cost of consulting, premium services and training courses,
+and the cost of bought-in consulting and training resources.
+(2020: €4,110 million). The cost of services declined 8% to €2,916 million (2020: €3,178 million). Our
+gross margin on services, defined as services profit as a percentage of services revenue, decreased
+slightly to 22.5% (2020: 22.7%). As our services business trends away from traditional software
+licensing and consulting revenue toward more subscription revenue from cloud solutions, we adjusted
+our service delivery resources correspondingly. The expenses are impacted by COVID-19-related
+limitations in personal customer contacts and a correspondingly high remote delivery share of the
+consulting services.
+Research and Development
+Our research and development (R&D) expense consists primarily of the personnel cost of our R&D
+employees, costs incurred for independent contractors whom we retain to assist in our R&D activities,
+and amortization of the computer hardware and software we use for our R&D activities.
+Due to growing personnel costs driven by a 9% year-over-year increase in our R&D headcount, and
+due to continued strategic investments, our R&D expense rose 17% to €5,190 million in 2021 from
+€4,454 million in 2020. R&D expense as a percentage of total revenue thus increased to 18.6% in
+2021 (2020: 16.3%). For more information, see the Products, Research & Development, and Services
+section.
+Sales and Marketing Expense
+Sales and marketing expense consists mainly of personnel costs, direct sales costs, and the cost of
+marketing our products and services.
+Our sales and marketing expense grew 6% from €7,106 million in 2020 to €7,505 million in 2021. This
+increase is mainly attributable to the expansion of the global sales force and to greater expenditure
+on bonus payments prompted by strong revenue growth and share-based payments.
+The services revenue decreased by 8% year over year to €3,764 million in 2021
+Cloud revenue - laaS²
+Currency
+Non-
+5,669 5,669
+86
+5,755 4,517
+5
+4,522
+25
+25
+6
+27
+8,500 8,500
+154
+8,653 7,239
+5
+7,244
+17
+17
+Total
+Non-
+4
+0 2,722
+IFRS
+IFRS
+Impact
+Constant IFRS
+Currency
+Adj.
+IFRS
+Constant
+4
+IFRS
+Currency³
+Cloud revenue - SaaS/PaaS¹
+Intelligent Spend
+Other
+2,831
+2,831
+67
+2,899 2,722
+IFRS
+Additional
+2.78
+Consolidated Financial
+Statements IFRS
+17%
+1.40
+1.50
+1.58
+1.85
+€ | change since previous year
+Dividend per Share
+7%
+If the shareholders approve this recommendation, and based on the number of treasury shares as at
+December 31, 2021, the total amount distributed in dividends will be €2,890 million. The actual
+amount distributed can be different from this total amount, because the number of shares held as
+treasury stock will change before the Annual General Meeting of Shareholders due to the share
+buyback SAP will execute in 2022. In 2021, we distributed €2,182 million in dividends.
+We believe our shareholders should benefit appropriately from the profit the Company made in 2021.
+Our dividend policy is to pay a dividend totaling 40% or more of profit after tax.
+Dividend
+Information
+Additional
+Further Information on
+Sustainability
+Consolidated Financial
+Statements IFRS
+Combined Group
+Management Report
+The Executive Board and the Supervisory Board of SAP SE will recommend to the Annual General
+Meeting of Shareholders in May 2022 that the total dividend for 2021 be increased 32% to €2.45 per
+share (2020: €1.85). This payment includes a special dividend of €0.50 to celebrate SAP's 50th
+anniversary. Based on this recommendation, the overall dividend payout ratio (which means the total
+distributed dividend as a percentage of profit after tax) would be 54% (2020: 41%). Excluding the
+special dividend, the ratio would be 43%.
+Stakeholders
+12%
+2017
+Combined Group
+Management Report
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+We manage credit, liquidity, interest rate, equity price, and foreign exchange rate risks on a Group-
+wide basis. We use selected derivatives exclusively for this purpose and not for speculation, which is
+defined as entering into a derivative instrument for which we do not have corresponding underlying
+transactions. The rules for the use of derivatives and other rules and processes concerning the
+management of financial risks are documented in our Treasury Guideline, which applies globally to all
+companies in the Group. For more information about the management of each financial risk and
+about our risk exposure, see the Notes to the Consolidated Financial Statements, Notes (F.1)
+and (F.2).
+We use global centralized financial management to control liquid assets and monitor exposure to
+interest rates and currencies. The primary aim of our financial management is to maintain liquidity in
+the Group at a level that is adequate to meet our financial obligations at all times. Most SAP entities
+have their liquidity managed centrally by the Group, so that liquid assets across the Group can be
+consolidated, monitored, and invested in accordance with Group policy. High levels of liquid assets
+help keep SAP flexible, sound, and independent. In addition, various credit facilities are currently
+available for additional liquidity, if required. For more information about these facilities, see the Credit
+Facilities section.
+5%
+Global Financial Management
+2020
+2019
+2018
+2.45
+32%
+Overview
+Finances (IFRS)
+2021
+Consolidated Financial
+Statements IFRS
+To Our
+SAP
+2021
+2%
+2020
+57%
+5,376
+5,283
+2019
+Basic earnings per share increased to €4.46 (2020: to €4.35). The number of shares outstanding
+decreased slightly to 1,180 million in 2021 (2020: 1,182 million).
+2018
+-18%
+1%
+12%
+3,370
+4,088
+4,046
+€ millions | change since previous year
+2017
+SAP Integrated Report 2021
+Earnings per Share
+3.35
+88/338
+87/338
+2021
+2020
+2019
+2018
+2017
+€ | change since previous year
+2%
+4.35
+4.46
+-19%
+26
+2%
+10%
+3.42
+56%
+Profit After Tax
+Further Information on
+Sustainability
+Capital Structure Management
+2025
+2024
+2023
+2022
+265
+88
+500
+2026
+800
+1,000
+1,100
+600
+1,250
+500
+1,047
+1,600
+1,000
+1,730
+2027
+2029
+13
+For more information about our financial debt, see the Notes to the Consolidated Financial
+Statements, Note (E.3).
+9,865
+€ millions
+Financial Debt
+1,533
+Bank Loan
+2028
+930
+766
+Private Placement
+Bonds
+Financial Debt by Instrument
+Nominal volume of financial debt on December 31, 2021, included amounts in euros (€12,058 million)
+and U.S. dollars (€1,036 million). On December 31, 2021, approximately 50% of the financial debt was
+held at variable interest rates, partially swapped from fixed into variable using interest rate swaps.
+For information about the intended repayments, see the goals for liquidity and finance in the Financial
+Targets and Prospects section.
+2031
+2030
+Commercial Paper
+Additional
+Information
+800
+865
+To Our
+SAP Integrated Report 2021
+SAP
+90/338
+89/338
+As at December 31, 2021, SAP SE had additional available credit facilities totaling €335 million.
+Several other SAP entities have credit facilities available that allow them to borrow funds at prevailing
+interest rates.
+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 financial
+covenants. Borrowings under the facility bear interest of EURIBOR or LIBOR for the respective
+currency plus a margin of 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, and do not currently foresee any
+need to use this credit facility.
+Stakeholders
+Other sources of liquidity are available to us through various credit facilities, if required.
+Therefore, we continuously monitor funding options available in the capital markets and trends in the
+availability of funds, as well as the cost of such funding. In recent years, we were able to repay
+additional debt within a short period of time due to our persistently strong free cash flow. For more
+information about the financial debt, see the Cash Flows and Liquidity section.
+We believe that our liquid assets combined with our undrawn credit facilities are sufficient to meet our
+operating financing needs in 2022 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. It may also be necessary to enter into
+financing transactions when additional funds are required that cannot be wholly sourced from free
+cash flow, to maintain flexibility, and/or limit repayment risk.
+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. On December 31, 2021, our cash, cash equivalents, and current investments were
+primarily held in euros and U.S. dollars. We generally invest only in the financial assets of issuers or
+funds with a minimum credit rating of BBB, and pursue a policy of cautious investment characterized
+by wide portfolio diversification with a variety of counterparties, predominantly short-term investments,
+and standard investment instruments. Our investments in financial assets of issuers with a credit
+rating lower than BBB were not material in 2021.
+Liquidity Management
+The Company plans to repurchase shares with a volume of up to €1.0 billion in the period between
+February 1, 2022, and December 31, 2022. Repurchased shares will primarily be used to service
+future awards granted under the 'Move SAP' share-based compensation plan which will start to be
+predominantly equity-settled in 2022. The share buyback will be in addition to SAP's regular dividend
+policy. Further capital returns in subsequent years will be decided on an annual basis in line with
+SAP's capital allocation priorities.
+The long-term credit rating for SAP SE is "A2" by Moody's and "A" by Standard & Poor's, both with a
+stable outlook.
+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. For more information about the capital structure and its analysis, see the
+Analysis of Consolidated Statement of Financial Position section and the Notes to the Consolidated
+Financial Statements, Note (E.1).
+Credit Facilities
+88
+Combined Group
+Consolidated Financial
+Statements IFRS
+1,000
+1,088
+1,100
+1,135
+1,250
+1,600
+■ Variable Fixed
+Management Report
+€ millions
+2,026
+3,756
+Financial debt is defined as the nominal volume of bank loans, commercial papers, private
+placements, and bonds.
+Financial Debts
+On December 31, 2021, two bilateral term loans with a total amount of €1.45 billion were outstanding.
+The amount can be flexibly repaid until maturity of the loan on September 30, 2022.
+Additional
+Information
+Further Information on
+Sustainability
+Maturity Profile of Financial Debts
+Further Information on
+Sustainability
+Profit after tax increased to €5,376 million in 2021 (2020: €5,283 million).
+The effective tax rate in 2021 was 21.5% (2020: 26.8%). The year-over-year decrease mainly resulted
+from changes in tax-exempt income and a one-time change of taxable temporary differences
+associated with investments in subsidiaries, which were partly compensated by changes in non-
+deductible expenses. For more information about income taxes, see the Notes to the Consolidated
+Financial Statements, Note (C.5).
+Actual
+Currency
+Actual
+Currency
+Currency
+Currency
+Constant
+Actual
+€ millions, unless otherwise stated
+(non-IFRS)
+Constant
+Currency
+A in %
+2020
+2021
+Qualtrics
+Segment profit remained at prior year level and ended 2021 at €9,567 million. This is mainly explained
+by an increase of total segment cost of 6.5% at constant currencies. Consequently, both the segment
+gross margin and the segment margin decreased slightly by 1.1pp and 1.5pp at constant currencies.
+Additional
+Information
+Consolidated Financial Further Information on
+Statements IFRS
+Sustainability
+Management Report
+A in %
+Combined Group
+Cloud revenue
+780
+Segment gross margin (in %)
+41
+37
+681
+957
+929
+Segment revenue
+757
+-0.2pp
+91.8
+91.5
+91.5
+Cloud gross margin (in %)
+50
+46
+518
+-0.3pp
+79.6
+To Our
+Stakeholders
+SAP
+79.5
+Segment gross margin (in %)
+4
+2
+22,965
+23,816
+23,502
+79.5
+Segment revenue
+-0.9pp
+15
+SAP
+SAP Integrated Report 2021
+To Our
+Stakeholders
+Combined Group
+Management Report
+-0.9pp
+SAP Integrated Report 2021
+80.6
+-1.1pp
+86/338
+85/338
+Overall, the share of more predictable revenue increased 1.8pp from 82.9% in 2020 to 84.8% in 2021.
+Cost of revenue increased 7.7% (9.3% at constant currencies) compared to the prior year, ending
+2021 at €4,808 million. This development was mainly driven by a strong increase in cost of cloud.
+The Applications, Technology & Support segment recorded a strong increase in cloud revenue of
+12.8% in 2021 (14.8% at constant currencies). At the same time, cost of cloud increased 16.0%
+(18.3% at constant currencies), which led to a reduction in the cloud gross margin of 0.9pp (0.9pp at
+constant currencies) to 68.4%. Software support revenue remained flat compared to the prior year
+and ended 2021 at €11,410 million, which indicated a growth of 0.6% at constant currencies. Together
+with software licenses revenue, which decreased 10.8% (11.0% at constant currencies) mainly due to
+the shift toward cloud revenue, the segment achieved a total software licenses and support revenue
+of €14,654 million. However, total segment revenue rose slightly, by 2.3% (3.7% at constant
+currencies), and ended 2021 at €23,502 million.
+-1.5pp
+-1.6pp
+42.3
+-1.0pp
+40.8
+Segment margin (in %)
+0
+-2
+9,722
+9,718
+9,567
+Segment profit
+40.7
+Profit After Tax and Earnings per Share
+79.7
+1.9pp
+Segment margin (in %)
+15
+13
+645
+743
+728
+Segment profit
+22.5
+2.7pp
+31.5
+34.2
+34.1
+Segment gross margin (in %)
+-3
+-4
+3,379
+2.6pp
+3,283
+22.6
+3.4pp
+Income Taxes
+Finance costs mainly consist of interest expense on financial liabilities amounting to €160 million
+(2020: €179 million), and IFRS 9-related fair value adjustments or losses from disposal of Sapphire
+Ventures investments totaling €654 million (2020: €345 million). For more information about financing
+instruments, see the Notes to the Consolidated Financial Statements, Note (E.3).
+Financial income, net, changed to €2,174 million (2020: €776 million). Our finance income was
+€3,123 million (2020: €1,473 million) and our finance costs were €949 million (2020: €697 million).
+Finance income mainly consists of gains from IFRS 9-related fair value adjustments, mainly of
+Sapphire Ventures investments, and the disposal of equity securities totaling €3,067 million
+(2020: €1,360 million).
+Financial Income, Net
+Information
+Additional
+Further Information on
+Sustainability
+19.1
+Consolidated Financial
+Statements IFRS
+Stakeholders
+To Our
+SAP Integrated Report 2021
+SAP
+Overall, the segment profit and the segment margin benefitted from this development and ended the
+year with a segment profit of €728 million and a segment margin of 22.5%, which indicates a growth
+of 3.4pp (3.5pp at constant currencies).
+The Services segment, comprising major parts of SAP's services business, recorded revenue of
+€3,234 million, which represents a decline of 4.2% (2.7% at constant currencies). Cost of services
+decreased 7.9% (6.7% at constant currencies) to €2,035 million. As a result, the services gross margin
+increased 2.6pp (2.7pp at constant currencies) to 34.1% in 2021. This gross margin improvement was
+primarily attributable to the positive development of SAP's consulting and premium engagement
+business, and a higher remote delivery share of the consulting services.
+3.5pp
+Combined Group
+Management Report
+77.6
+3,234
+2.7pp
+2021
+Services
+The Qualtrics segment, which comprises SAP's experience management solutions, closed 2021 with a
+strong cloud revenue growth of 46.2% (50.4% at constant currencies). The associated cost of cloud
+rose 54.5% at constant currencies, which led to a slight drop in the segment's cloud gross margin of
+0.3pp (0.2pp at constant currencies). Including services revenue, the total segment revenue increased
+36.6% (40.6% at constant currencies) to €929 million. Overall, the Qualtrics segment profit increased
+to €44 million in 2021. The corresponding segment margin rose 5.4pp (5.2pp at constant currencies)
+to 4.7%.
+5.2pp
+5.4pp
+-0.6
+4.6
+2020
+4.7
+<-100
+<-100
+-4
+44
+44
+Segment profit
+2.1pp
+Segment margin (in %)
+Segment revenue
+A in %
+€ millions, unless otherwise stated
+(non-IFRS)
+2.6pp
+34.5
+37.2
+37.1
+Services gross margin (in %)
+-3
+-4
+A in %
+Constant
+Currency
+Actual
+Currency
+3,374
+3,282
+3,234
+Services revenue
+Constant
+Currency
+Currency
+Actual
+Actual
+Currency
+Constant
+Currency