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Good morning, ladies and gentlemen.
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And please do declare the annual general meeting of shareholders of SAP SE open, and as Chairman of the Supervisory Board, I will be presiding over today's meeting. On behalf of the Supervisory Board and the Executive Board, I would like to bid you, our shareholders and shareholders' proxies, a warm welcome. We are especially delighted to be able to welcome you back to the SAP Arena today. After three years of virtual events due to the pandemic-related restrictions, it is very nice to see you all in person again. But of course, I also warmly welcome all the shareholders who are following this annual general meeting today on the internet. I also welcome our guests, and especially the Members of the press who are attending today's event. Ladies and gentlemen, as usual, I first need to announce the formalities of this AGM of shareholders.
First up, the attendance of Executive Board and Supervisory Board Members. For the record, all Members of the Executive Board and the Supervisory Board are here today. I would also like to welcome Dr. Stefan Fellmeth, Notary Public, who will be taking the minutes of this meeting. Today's meeting was called with due notice in accordance with the legal requirements and the provisions of the articles of incorporation. Notice of the meeting was published in the Bundesanzeiger on March 31st, 2023, and a copy of the notice is available for your inspection at the speaker's table, and it will be annexed to the minutes. All notices that are required for convening of the annual general meeting of shareholders were properly issued. The company has not received any counter-motions or election proposals from shareholders.
The official meeting zone includes this main hall of the SAP Arena, plus all other rooms and areas in the SAP Arena that are accessible to shareholders after passing through security at the entrance. These include the side hall opposite the entrance area, where you will find the catering services, as well as the spectator stairs and the first floor, where there are more catering services. The meeting will be broadcast throughout the official meeting zone via loudspeakers. There's also a big screen in the side hall on which you can follow the meeting. The attendance register is computerized and constantly updated. There's a terminal at the speaker's table at which you can inspect the register anytime during the meeting. If you wish to leave the shareholders' meeting early, you can exercise your votes by appointing the employees of the company present for that purpose as your proxy.
To do so, please use the relevant section of your voting document. Alternatively, you can entrust your vote to another participant. To do so, please complete the relevant section of your voting document and hand it to the staff at the door on your way out. Give your proxy your remaining voting documents. If you wish to leave the meeting temporarily or early and do not wish to appoint a proxy to vote on your behalf, please hand in your voting documents at the exit. Shareholders following our Annual General Meeting on the shareholder portal, who wish to participate in the internet proxy appointment and instruction system, or who still want to vote electronically, have until the beginning of voting on management's announced proposals to submit or amend their votes, appointments, or instructions regarding these proposals. I will remind you of this accordingly when the time comes.
All shareholders and proxies who wish to speak or ask questions are kindly asked to report to the speaker's table as soon as possible. Please complete a speaker's request form. In particular, write your name and the number of your voting document clearly and legibly on the form. I must insist that every shareholder or proxy wishing to speak, without exception, first hand in a request form at the speaker's table and then wait until called to speak by me as chairperson of the meeting. When it is your turn to speak, please come to the microphone next to the speaker's table.
Similar to the virtual meeting format in recent years, we gave duly registered shareholders the option to submit voluntary statements in video or text form in the run-up to this year's annual general meeting, which were then made available on the shareholder portal to all other duly registered shareholders. The objective here is to improve the involvement of shareholders in the annual general meeting and the exchange of opinions among them. We've received a statement in text from Oliver Ellrodt, which we subsequently published on the shareholder portal. I would like to point out that the entire annual general meeting of shareholders is being publicly broadcast on the internet. As in our previous in-person annual general meetings, we are also allowing some television companies to broadcast highlights from Christian Klein's speech. However, these TV companies will only have access to a recording of the CEO's speech.
The entire meeting is also being documented in sound and video for the record. If a shareholder or proxy objects to the recording of his or her speech, we will not record that speech. However, only what I'm saying now and the speech given by our CEO, Christian Klein, will be recorded and posted on the internet after the meeting. I would like to remind all of you here and those shareholders participating online that you are not permitted to make any sound or video recordings of the meeting yourself. Ladies and gentlemen, now to the agenda. Let us first take item one.
I can report that the following documents were available on SAP's website from the time the general meeting of shareholders was called: the 2022 SAP SE financial statements, the consolidated financial statements, the combined management report for the SAP group and SAP SE, including the Executive Board's explanatory notes relating to the information provided pursuant to German Commercial Code sections 289A and 315A, the supervisory Board report, and the Executive Board's proposed resolution on the appropriation of retained earnings. You can also inspect these documents electronically in the meeting room. Terminals have been set up for this purpose here in the main hall, at the booth in the side hall, and on the first floor between the info counter and the coat check.
The auditor, KPMG AG Wirtschaftsprüfungsgesellschaft, examined the SAP SE financial statements, the consolidated financial statements, and combined SAP SE and SAP group management report for fiscal year 2022, and issued a non-qualified audit opinion. The Supervisory Board reviewed and approved the aforementioned documents in its meeting to discuss the financial statements on February 22, 2023. The SAP SE financial statements for 2022 were thus formally adopted. Ladies and gentlemen, I'd like to take the opportunity now to talk about some of the topics for the Supervisory Board and I, as its chairperson, focused on in the past year. You can find the Supervisory Board's detailed report in the SAP Integrated Report. I would like to begin with Russia's horrific attack on Ukraine, which we also addressed at last year's annual general meeting.
The images of the war that we have seen for over a year now are still unbearable, and unfortunately, there is still no end in sight. Shutting down our operations in Russia last year was therefore the only correct answer from the supervisory Board's point of view, even if this led to revenue and profit losses for us. The exit process initiated by the Executive Board had to be adjusted several times in the past fiscal year to tightening sanctions and corresponding countermeasures taken by Russia, so this topic remained an ongoing focus of the supervisory Board. In addition, the supervisory Board continued to pay particular attention to SAP's transformation to a cloud company. SAP has taken further key steps in this regard through targeted investments and innovations, and we continue to see SAP on a good path that will also pay off for our shareholders.
Looking at major economic trends such as digitalization and decarbonization, which no company in the world can afford to ignore anymore, SAP is very well positioned, both in terms of our own company and in terms of our product portfolio for our customers. Our innovative solutions help us and our customers meet these challenges, putting SAP more in demand than ever as an advisory partner at the side of our customers. And because sustainability is an increasingly important topic for SAP and our customers, the supervisory Board has also looked very closely in recent months at the growing regulatory requirements, as well as the products and solutions we offer and continue to evolve in this area. For we are convinced that important new business opportunities will arise for us in this field going forward. Executive Board compensation was the further focus area for the supervisory Board.
We've revised the compensation system for the Executive Board, and on today's agenda, we are proposing a new, substantially modified compensation system for resolution. This revision reflects a lot of investor feedback that Friederike Rotsch, in her role as Lead Independent Director, and I received in our discussions with shareholders and shareholder representatives. The new compensation system being proposed today also addresses a number of the criticisms and new suggestions that were made with regard to the current system. Details can be found in the invitation to our annual general meeting of shareholders, which I refer to here. I would therefore like to ask you for your approval of this revised compensation system. I would like to turn now to a change in the Membership of the Executive Board that was resolved by the supervisory Board last year following an intense search by the general compensation committee.
The supervisory Board appointed Dominik Asam as the new CFO with effect from March 7, 2023. He succeeds Luka Mucic, who, after 27 years with the company, retired from the Executive Board at the end of March 2023 by mutual agreement with the supervisory Board. I would like to thank Luka Mucic once again for remaining fully involved in his role as CFO for a whole year after announcing his departure. We wish him all the best for the future. I'd like to welcome Dominik Asam to the meeting and ask him to briefly introduce himself to our shareholders.
Dear shareholders, of course, I'm looking forward to meeting you and talking to you today and would like to thank Hasso Plattner, the chairman of the supervisory Board, for the opportunity to briefly introduce myself to you.
My name is Dominik Asam, and I've been the Chief Financial Officer of SAP SE since March 7 of this year. Previously, I held the same position at Infineon for more than eight years and most recently at Airbus SE for four years. I studied engineering and graduated with a diploma at Munich Technical University and the École Centrale Paris. Following that, I got a master's degree in business administration from INSEAD in Fontainebleau, and then I took up my first job at the American Goldman Sachs, and I worked for them as an investment banker in Frankfurt, New York, and London, and in this context, I specialized in particular on clients in the high-tech industry. During my almost eight years at Goldman Sachs, various projects for Siemens and Infineon paved the way for me to move to Infineon, and I worked there also for a couple of years.
Later, I took over responsibility at Siemens for corporate treasury and then also became the CFO of their financial services division. After transferring to Siemens as head of corporate controlling, the opportunity arose to return to Infineon as CFO. But that's how I got there. During my career, I also held seats on various supervisory Boards, for example, as chairman of the audit committee of Zalando SE, and I'm also still a Member of the supervisory Board of Bertelsmann Management SE and Bertelsmann SE and Co. KGaA. The central three themes throughout my career have been my interest in high technology and in finance in all its facets. Now, for the reasons already mentioned by Hasso Plattner, I've always been following SAP's story also as a customer, and I can only confirm that the potential of digital transformation can be exploited by customers with the help of SAP.
And by the way, my very first DEM 200, I earned as a programmer, and after graduating from high school, I served in the military close to this place with the German Air Force. So, so to speak, I'm going full circle now with my continuation here at SAP, and I'm looking forward to further develop the company together with all of the colleagues here, and I would like to thank the supervisory Board and you all for the trust you placed in me. Thanks for your attention.
Thank you, Dominik. Ladies and gentlemen, allow me to turn now to the matter of today's supervisory Board elections and the supervisory Board's elections proposals, and more specifically, our plans for my succession. Further, there will also be some changes in the Membership of the supervisory Board.
As you will have read in the invitation to today's meeting, the mandates of three Supervisory Board Members are expiring, which means that new elections have to be held. Gesche Joost, who has been a Supervisory Board member since 2015, is not standing for re-election. I would like to thank Gesche Joost on behalf of the entire Supervisory Board for her many years of service on the Supervisory Board. And I would also like to thank you personally, dear Gesche, for the close and very trusting partnership and for valuable contribution to the work of the Supervisory Board. You already know the two candidates standing for re-election to the Supervisory Board, Jennifer Li and Qi Lu, who already introduced themselves to our shareholders in the virtual general meetings in 2022 and 2020. Both make important contributions to our Supervisory Board work with their expertise.
Jennifer Li as a financial expert and chairperson of the audit committee, and Qi Lu as a proven technology expert. I ask for your support for their re-election. In addition, we propose Punit Renjen for election to the supervisory Board. We had already announced our nomination of Punit Renjen in February, as well as our decision to designate him as successor to the supervisory Board chairperson. We believe that he is an excellent candidate who, with his outstanding expertise, his many years of experience in a global company, and his valuable knowledge of many industries represents a gain for SAP and our supervisory Board. And we will find him to be an extremely suitable and capable candidate to take over my role as chairperson of the supervisory Board in the future.
And I'm personally delighted that Punit Renjen, who has known SAP for a long time, was immediately keen to the idea of joining us and bringing all his strength and passion to the company. His collegial personality and impressive career convinced not only me, but all the supervisory Board Members alike, that he is the right candidate for the task. I look forward to working together with him in the transition period following his election until I leave the supervisory Board in May 2024. So I ask you to give him your confidence and to support him in his election as well. As Punit Renjen is standing for election by the shareholders for the first time today, I would like to ask him to briefly introduce himself. Punit?
Guten Morgen. Hello. It's truly my honor to be here today.
The opportunity to serve on the supervisory Board of SAP, an iconic company with such an incredible legacy, would be a privilege. Thank you for the invitation to share a bit of my story and to offer perspective on what I believe I can bring to the role of the supervisory Board Member and eventually chair. My story begins in Rohtak, a small town in northwestern India. A town so small, in fact, that we didn't even have streetlights when I was growing up. As you can imagine, opportunities for young people in Rohtak were limited. So my parents sent me to Boarding school at an early age, hoping to give me the education they knew our small town could not afford me. It was an inflection point in my life, one of many that would lead me to this moment standing here with you.
A moment I can assure you that a boy from Rohtak would never, never have believed possible. In 1983, I earned a Rotary Foundation scholarship to attend university in the United States. The struggle to learn U.S. customs and assimilate was truly humbling, but those were formative years, and the lessons learned about perseverance, resilience, and integrity have never left me. Soon after graduating, I received an offer to join a growing and innovative organization, Deloitte, and the rest, as they say, is history. From my early days as an M&A and transformation consultant to CEO of the Deloitte Consulting Practice, to U.S. Chairman, and on to Global CEO, 36 years went by in a flash. While I'm no longer connected to Deloitte, I retired in December.
I bear the honorary title of Global CEO emeritus, a reminder of those 36 years of experience that have prepared me, I believe, to serve as SAP Board Member and chair. As Global CEO of Deloitte for the last seven plus years, I led a complex global organization of 415,000 professionals working in 150 locations around the world. I know firsthand what it takes to build a global community. I believe my own experience as an immigrant helped me to be able to bring people together across vastly different cultures and leadership styles to work towards a common goal, and to do so with great success. When I began my tenure as Global CEO, Deloitte had revenues of $35 billion globally. Today, it is a thriving, over $60 billion global organization, having undergone a transformation resulting in nearly doubling in size over just seven years.
Today, it is the leading quality organization and one of the most valuable commercial services brands. That is what a strong, connected, and engaged community of professionals can achieve. I take great pride in that. I've also spent many of my years at Deloitte in the field, working directly with clients from a variety of industries, helping them address their most complex business challenges, from integration to strategy, from culture to sustainability. I bring this experience with me to SAP. Further, I have been the lead partner on client engagements, helping implement SAP software. I understand the power of what SAP brings to the table to help clients transform, grow, and mitigate risk. I also understand some of the pain points where customers feel SAP could do more.
I know well the ecosystem that is such a critical distinguishing part of SAP, and I have the insight and experience to help navigate the complexities. Whether it's implementation partners like Accenture, Deloitte, or PwC, or with hyperscalers like Google, Amazon, and Microsoft, what I believe I can bring to the Board table begins with the ability to effectively draw out and build on the deep technology expertise that already exists within SAP and on the supervisory Board. But it's more than that. It's about a shared passion and vision for what SAP is and what I believe it can continue to be. It's about sharing in the belief that the founders of SAP had all those years ago in the power of integrating people, process, and technology. A belief that I have built my entire career on, that I've invested in and lived for the last 36 years.
It would be the honor of my lifetime to bring that passion and experience to SAP. I understand fully the responsibility that comes with a role like this, particularly as a non-founder. Hasso Plattner is one of a kind, an icon, a legend, and he couldn't be leaving behind bigger shoes to fill. So I want to be clear from the outset. I am not, nor would I try to be, Hasso Plattner. That said, I believe that as Punit Renjen, I have the perspective, experience, and passion to help SAP into the future. I'm inspired and excited about the potential that has yet to be unleashed for SAP. The last few years have been challenging for all businesses, but those challenges have opened the door to tremendous, tremendous opportunity.
SAP has the potential to be at the center of it all, to transform the way organizations of tomorrow operate. I would like nothing more than to help SAP in leading that transformation, to ensure your investment in SAP sees long-term success over the next generation. Thank you very much for your consideration.
Thank you, Punit. Ladies and gentlemen, I now call on SAP's CEO, Christian Klein, to address you. His speech was published on May 4th on our annual general meeting website. Thank you, Christian. The floor is yours.
Thank you, Hasso. Dear fellow shareholders, dear colleagues, I'm very excited to welcome you all back here in person today. Of course, a warm welcome to all viewers in the live broadcast. It is a very special pleasure for me to be on stage with our new Chief Financial Officer, Dominik Asam. Dear Dominik, welcome.
I would also like to take this opportunity to thank Luka Mucic. Luka left SAP this March after 27 years. We wish him only the best for his future endeavors. 2022 was a very special year for SAP. It marked our 50th anniversary, five decades of innovation, partnership, and social responsibility. A milestone that we celebrated together with our colleagues, customers, shareholders, and partners across the world. On April 1st, 1972, our founders, Dietmar Hopp, Hasso Plattner, Claus Wellenreuther, Klaus Tschira, and Hans-Werner Hector, founded the company SAP. They set out to redefine business software. And together, they forever changed the way the world and the worldwide economy runs. Their innovative thinking and pioneering spirit, together with their courage and drive, laid the foundation for SAP's success. And these qualities are still the basis for our success today.
Personally, I'm especially grateful for the opportunity to carry our founders' legacy forward, for the trust placed in me to set this company up for the next 50 years and beyond, and to lead SAP through its biggest transformation in history towards becoming a cloud company. Over the course of my 24 years at SAP, I've had the chance to get to know this company, our community, our customers and partners, and our investors very well. It's exciting to get up every morning and work together with our more than 100,000 colleagues worldwide from over 160 countries to drive positive change for our planet and its people. This has never been more relevant or important than today. Because 2022 was not just our anniversary year. It was also a year marked by many challenges, conflicts and geopolitical tensions, climate change, the energy crisis, inflation, and volatile markets.
We stand in solidarity with the people impacted by the horrendous war in Ukraine, and we hope for the swift restoration of peace. In early 2022, SAP stopped all sales in Russia and Belarus. The wind down of our business operations in these markets is almost complete, and we will make sure to continue to help those affected by this war. I'm very proud when I see how SAP is helping our customers and our communities navigate the challenges of the time we live in. Today, dear shareholders, I'd like to show you how we are doing this and why SAP is more relevant than ever for every company, regardless of its size. Our vision is to enable each and every one of these companies and every industry to become a network of intelligent, sustainable enterprises.
We offer our customers the agility, flexibility, and transparency needed to survive and thrive in today's challenging environment. Over the next few minutes, I will explain to you what exactly I mean by that. Let's start by looking back at the year 2022 to see how SAP made a difference, and then look ahead to what the future will bring. 2022 was one of the most pivotal years in SAP's history. It's been two and a half years since we announced our new strategy. We decided to fundamentally transform the company and to accelerate our transition to the cloud. We took this step to continuously bring the latest innovations to our customers so that they can transform their enterprises. And in this way, we want to provide business competence to support them.
Our new strategy was the right step forward to ensure the long-term success of SAP and value for our customers and for our shareholders, not least them. It has significantly changed the way we work, how we attract new customers and deepen our partnerships with existing ones, how we develop our solutions and operate them securely and stably in the cloud in over 120 countries, and how we ensure that our people and our ecosystem have the skills and expertise they need to do this. At every stage, we have a clear focus on our customers' success. Our new strategy was a big decision that surprised the market, and we have kept our promise. We've delivered. As you can see from our numbers, the decision we made was the right one. Our cloud transformation is in full swing. The fourth quarter 2022 was a clear tipping point in our journey.
We have now reached the next phase of our transformation, just as we had planned. We have created a highly resilient business. We have a more predictable revenue of 79% in 2022. Looking at our financial numbers, we met all of our outlook metrics in 2022. The following figures are all at constant currencies. Cloud revenue continued to be our main growth driver, up 24%. Current cloud backlog at constant currencies, up 24%. Total revenue grew by 5%. IFRS operating profit was flat, while the non-IFRS operating profit decreased by 7%. All figures at constant currencies. Free cash flow was at EUR 4.35 billion. With a market cap of over EUR 142 billion, we are number one in the DAX and number one software company in the EURO STOXXS. We achieved all this despite our exit from Russia and the macroeconomic volatility across the world.
Now, let's take a look at how share price has developed recently. I already mentioned our significant decision to turn SAP into a cloud company and consequently to change our business and license models. Our results from 2022 show that we have accelerated our growth. However, due to the macroeconomic situation, technology stocks on the market generally performed at a lower rate, and our share was not immune from this overall trend. At the same time, financial analysts have become increasingly positive about our strategy. A large majority of analysts who cover SAP currently have a buy recommendation, and some institutions name SAP as a top pick in the sector. So this shows that our change in the strategy was the right decision to establish SAP's position as the number one enterprise application company for the long term.
Thanks to our very robust and sustainable business model, SAP is more resilient than ever before. In the cloud, we can deliver innovations to the customers more quickly to drive new growth. Our transformation has now passed the tipping point, meaning that we are now able to report double-digit operating profit growth again. That is all reflected in our share price, which has grown more than 27% year to date, far ahead of the DAX and the NASDAQ, and also at a stronger rate than many of our competitors. I know that this change was not easy for you, dear shareholders, but there was no alternative. Today, I would also like to thank you once again for your patience and for your trust. Of course, we want our shareholders to participate in our success. Therefore, we've proposed an annual dividend of EUR 2.05 per share.
This is an increase of about 5% over last year's regular dividend. Once again, this shows how we've consistently increased our dividend payments in the last few years. At SAP, we also believe it is important to look beyond just the financials. That's why we also measure and report on non-financial indicators. Our close relationship with our customers allows us to gain open and invaluable feedback. The NPS, the Net Promoter Score for short, is an indicator which expresses how satisfied our customers are with the company. We use it to measure customer loyalty. In 2022, the score decreased by 70 points over last year to a value of 3, hitting the lower end of the revised outlook range. This means we continue to get feedback about our improvement, and we learn from this feedback and use it to continually improve our customer satisfaction.
We also value the feedback from our colleagues. The Employee Engagement Index is a good measure of the motivation of our staff to produce good results and drive their company forward. SAP's Employee Engagement Index decreased 3 percentage points to 80%. This is a continued high level of engagement, albeit at the lower end of the revised outlook range. These values declined during the pandemic in the industry, and we launched a number of projects to respond to that. The feedback from our employee survey also highlights many positives. Our Leadership Trust Index score reached an all-time high of 72 in 2022 on a scale of minus 100 to plus 100, and our Business Health Culture Index and diversity is another important metric. The proportion of women in management increased to 29.4% in 2022. This is an important step in the right direction.
By the end of the year, we want to be at 30%. That deserves an applause, doesn't it? We've also reached a proportion of 35% of women in the workforce, and we look forward to building on this progress in 2023. Dear shareholders, at the end of April, we released our numbers for the first quarter of 2023. The numbers show that SAP is stronger than ever. The following figures are also at constant currencies. Current cloud backlog was up 25% this quarter. Cloud revenue grew by 22%. That strong performance has led to a total revenue growth of 9% in the first quarter. An important indicator of our resilience is our share of more predictable revenue, which rose further to 82%. Beyond that, in Q1, we delivered double-digit non-IFRS operating profit growth, which demonstrates the significance of the fourth quarter 2022 as a tipping point of our transformation.
This is why we confirmed our 2023 guidance for continuing operations, only taking out Qualtrics. Even under difficult circumstances, our revenue and profitability have continued to grow. Our ongoing cloud momentum reflects strong demand as our customers recognize our relevance. Going forward, we are on track to show accelerating profitability, and now we're starting with the next part of our transformation. In that phase, we will drive growth through innovation and a sharper focus. At the core of our portfolio are our offerings, SAP S/4HANA, and the SAP Business Technology Platform. SAP S/4HANA is our core solution for managing all business processes. SAP Business Technology Platform is our central platform, the foundation that makes it possible to integrate and expand the customer's entire IT landscape and automate processes, but also to simplify data landscapes, and with our SAP S/4HANA, we can provide unparalleled performance.
This is complemented by our solutions for specific lines of business and industries, and in addition, we have over 2,000 integrated partner solutions. We focus on our core strengths. In March, we announced that we came to an agreement to sell our stake in Qualtrics. We are convinced that this step will unlock significant value for both companies and for their shareholders. SAP can focus more on our cloud business, our cloud growth and profitability, and Qualtrics can extend its leadership in the Experience Management category. Of course, Qualtrics will also remain a strong partner of SAP. Investing in innovation to drive sustained growth is a major part of our mission. In 2022, we invested about nearly 6 billion EUR into R&D. Over the last few years, we have introduced many powerful new offerings and innovations.
Earlier this year, we launched SAP Datasphere for the business data of our customer and to bring them together, regardless of whether these are SAP or non-SAP sources. And customers can see in real time what is happening in their business and share this information easily and make faster decisions. Artificial intelligence, AI, is another very exciting area. At SAP, we are focused on bringing the power of this new technology to our applications. We have already integrated over 50 live AI use cases in our SAP solutions. This enables our customers to better forecast supply and demand, for example, to optimize warehousing or to automate processes. At our upcoming Sapphire event next week, we plan to make even more exciting announcements in AI. So you see, we have a bold and promising vision for the future.
Dear shareholders, for more than 50 years, SAP has helped customers solve their most pressing needs. Today, we are helping organizations of all sizes and industries to become faster and more agile, to build transparent and resilient supply chains, to make sustainability measurable, and to take action. Our solutions offer exactly what our customers need. That is why our strategy is focused on three main objectives. First, we enable our customers to respond rapidly to change, to adapt their business models, to automate processes, and to foster growth and increase growth and productivity. Second, we bring suppliers and buyers together to strengthen their supply chains. Thirdly, we enable our customers to operate sustainably so that sustainability indicators can be measured based on actual values instead of average data. Let's take a closer look at our strategy. SAP enables business to run at their best.
99 of the 100 largest companies in the world are SAP customers. Our offering, RISE with SAP, is at the heart of our strategy, and it is one of our most successful offerings ever. RISE with SAP helps our existing customers to migrate into the cloud not only technically, but also use the potential and the advantages of the cloud. In this, the complexity in the On-premise and IT landscape is reduced, and business processes can be standardized, for example, ERP data. And this means that we enable our customers to have constant access to innovation and to automate, instead, as with our On-premise software, having to migrate to a new release. Let me give you an example. BMW, a quality brand that we all know. BMW and SAP look back on a long-standing strategic partnership. We have been working together for over three decades with RISE with SAP.
BMW Group will now move its entire SAP software landscape to the cloud. This will help BMW Group to digitalize faster, more comprehensively, and more efficiently in the future, and in production, in logistics, in purchasing, and in financials, they will be faster and more effective in their digitalization transformation. Together, we will shape the future of the automotive industry driven by innovative business processes. Building on the success of RISE with SAP for our existing customers, we announced GROW with SAP in March for mid-market companies. Mid-market companies are very important to SAP, winning new customers and supporting them in their growth and in their scalability and increasing that potential significantly. Our modular cloud ERP is tailored to the requirements of the respective industries, and with GROW with SAP, this can be implemented quickly. RISE and GROW are based on our leading platform, SAP Business Technology Platform.
This platform enables our customers to extend and personalize their SAP applications and integrate and connect entire landscapes. In 2022, we expanded the capabilities of the platform with SAP Build. With SAP Build, the people closest to the business problems, finance managers, supply chain specialists, and manufacturing experts can create apps to automate processes or design advertising spaces without having to write code. SAP Build lessens the burden on professional developers, but it cannot replace them. That's why SAP is committed to upskilling two million developers worldwide by 2025 to help people launch careers within our ecosystem. Let's now turn to the second objective of our strategy. Many have been confronted with a problem that the local DIY store or pharmacy doesn't stock what is in demand. The problem are disruptions in the supply chains.
More parts of the supply chains are outsourced, and they are becoming more complex and more fragile and very vulnerable to unforeseen events, changes in demand, or geopolitical tensions. Basically, what supply chains are missing is end-to-end transparency from A to Z, and as a result, there is a lack of stability and flexibility. Disrupted supply chains put the operation of businesses at risk. To address this, we have built the SAP Business Network, through which we connect millions of companies worldwide, allowing organizations to benefit from a social network for enterprises. Let's have a look at how Cirque du Soleil does this.
With residencies running on five continents, Cirque du Soleil is the leading brand in live entertainment, but procurement and sourcing are highly complex.
With our residentials, we manage a huge volume of purchases and procure a wide range of goods, going from niche makeup, specific theatrical equipment, to pyrotechnics. Ordering used to be on credit cards and POs with vendors all over the map. Processes needed to be optimized. Cirque du Soleil found that SAP Ariba and SAP Business Network have the digital muscle to perform at the highest level. For the residentials, Cirque du Soleil creates catalogs that bring control back to end users. Orders flow right to approved suppliers with pre-negotiated prices. Guided buying makes it easy. End users select the preferred supplier, order what they need, and receive it on time. It's up to five times faster than the previous system, and it has a positive financial impact. For the touring shows, which have approximately 470 containers and trailers in circulation, SAP Ariba's strategic sourcing streamlines the big RFPs.
As an example, equipment transportation by sea, air, or ground. We count more than 1,900 vendors worldwide for different types of commodities. With an integrated business network, every process, cost, and scenario is tracked, and the decision complies with policy. Ariba helps us in keeping our processes aligned globally and focused on what we do best. Invoke the imagination, provoke the senses, and move the hearts of millions of people around the world.
As you can see, or you could see in the video, our solutions make processing international business operations easy. But flexibility and agility are never more important when it comes to helping people in need. That is why I'm especially proud of how SAP Business Network has helped people in Ukraine and also in Turkey and Syria after the recent earthquakes, making it easier for relief organizations to find the supplies they need quickly and efficiently.
Greater transparency across a supply chain allows businesses to identify the most responsible and sustainable suppliers and to take immediate action to improve their ESG performance, which leads me to the third part of our strategy. SAP is committed to enable organizations to truly operate sustainably because climate change is upon us. The time to act is now. At SAP, we lead by example. By the end of 2023, we will become carbon neutral in our own operations. We moved this date up from our original plan of 2025, but we decided that we should achieve this earlier. Our aim is to achieve net zero along the entire value chain by 2030. Our customers generate 87% of total global commerce. By helping our customers run their businesses in a more sustainable way, we can make a real difference. Let's have a look at another SAP customer.
With the current way of producing steel, we are contributing to the CO2 footprint of Germany with roughly 1%, which is about 8 billion tons. That for sure is an issue we have to tackle. Salzgitter is one of the largest European steel makers. We have a long history in producing steel. I'm truly passionate about sustainability and redefining the way we do our business from a lI k ind of approach towards a circular approach. And we have a clear path to decarbonize our way of producing steel. In order to make that a success, you need strong partners. You need partners like SAP to support us in getting there. It's cool to say by now that, yes, we're going to make it. Our SAP S/4HANA transformation program has major goals.
We can build on this with SAP Product Footprint Management, SAP Environmental Health and Safety Management, and SAP Sustainability Control Tower, leveraging SAP S/4HANA and b usiness logic to gain insight into our environmental data. This gives us the ability to drive more innovations with SAP S/4HANA. I think that partnership that we have here enables sustainable change towards a sustainable future. Ultimately, it's about the two companies having the shared goals of a sustainable world that we are going to create together.
Salzgitter, a pioneer on the road to green steel. Together, we're driving the digital transformation of the German steel producer. The goal: setting the course for climate-friendly steel production. Steel that is ultimately sold on to create more climate-friendly products built by other companies. With SAP solutions, Salzgitter will measure their overall carbon footprint, allowing for smarter business choices across the entire product lifecycle.
Carbon reporting is becoming mandatory for many companies. Going forward, companies need to treat carbon like financial data. That's why we at SAP are investing in our vision of a G reen Le dger. This will allow us to do exactly that. SAP can offer that transparency to enable organizations to take action. With sustainability, we're talking about more than this. It is about protecting human rights. It is about humane working conditions. Today's companies are concerned about more than just maximizing their profit. Dear shareholders, at SAP, we take our broader social responsibility very seriously. In 2022, SAP colleagues performed no less than 117,000 hours of volunteer work. In total, more than 20,000 SAP colleagues impacted 5 million lives with their commitment. Our corporate social responsibility teams focus on three pillars: accelerating social business, building future skills, and collaborating for sustainability.
For example, through our partnership with UNICEF and Generation Unlimited, we enabled more than 7.6 million young people in India, Turkey, and Vietnam to access training in IT and business skills. In summary, we firmly believe that together with our customers, colleagues, and partners around the world, we can turn the world's greatest challenges into opportunities to create a better and more sustainable future. 2022 was not only a milestone anniversary for SAP; it was also one of the most pivotal years in our history. In 2023, we remain committed to further increasing our speed of innovation. We are deepening our focus on delivering lifetime value to current and new customers in the cloud. Another focus is our business fields with high growth opportunities where SAP can lead.
So, as you can see, we have everything we need to realize our bold ambitions: the right strategy, an unmatched portfolio, innovation power, the right focus, a strong customer base, an extensive ecosystem of partners, and, of course, last but definitely not least, our people who give their best for SAP day in, day out, expanding our position as the number one enterprise application company on the planet. Finally, dear shareholders, I want to express my thanks for your trust in SAP. I'm looking forward to making 2023 another successful year and achieving our goals together with our employees and partners. With dedication and passion, we will pursue our vision. We will create the groundwork to enable every organization and every industry to become a network of intelligent, sustainable enterprises. Thank you.
Thank you, Christian.
Ladies and gentlemen, I'm now calling for speakers to item one and all other agenda items. That is to say, items two to eleven in the invitation to the meeting that is available in the Bundesanzeiger, the Federal Gazette, and our website, and which also contains the management's proposals. We propose today that a dividend of EUR 2.05 per share be paid from SAP's earnings for 2022. Please note that the number of shares carrying dividend rights increased prior to today's date. As advised in the meeting invitation, the Executive Board and the Supervisory Board have therefore adjusted their proposal on the appropriation of retained earnings to reflect the new number of shares entitled to dividend. However, the proposed distribution of EUR 2.05 per share has not changed. At the time of today's annual general meeting of shareholders, there are 1,168,465,620 shares that qualify for dividend.
The Executive Board and the Supervisory Board therefore propose the following amended resolution: the retained earnings of 10,007,892,411.01 EUR from the 2022 fiscal year reported in the annual financial statements and management report be applied as follows: payment of a dividend in the amount of 2.05 EUR per no-par-value share carrying dividend rights. This corresponds to a total distribution of 2,395,354,521 EUR. Transfer to other revenue reserves 0 EUR and carry forward of the remainder to new account, namely 7,612,537,920.01 EUR. This amended proposed resolution was also published on SAP's website and can be accessed there in the annual general meeting of shareholders section. When we come to the votes later, the vote on agenda item two relates to the adjusted version of the proposed resolution that I have just read out.
Under the other agenda items, we propose the formal approval of the exercise of the Executive Board and the Supervisory Board in the preceding fiscal year, the approval of the compensation report, the renewal of the authorization to buy back and use the company's shares for treasury, and the authorization to use derivatives in connection with the share buyback. Under item nine of the agenda, we ask you, as already mentioned, to approve the revised compensation system for our Executive Board Members, which is described in detail in the invitation to this meeting. Similarly, an amendment to Supervisory Board compensation is being proposed under agenda item ten. Following Friederike's appointment as Lead Independent Director in May last year, it has become apparent that this role involves considerable additional time and effort that is currently not adequately remunerated.
We therefore propose that the Lead Independent Director be granted an additional compensation of EUR 50,000 and that the provisions for supervisory Board compensation be amended accordingly. Finally, agenda item 11 concerns two additions to the articles of incorporation. The first addition would enable us to hold future general meetings in virtual format in accordance with the new provisions of the German Stock Corporation Act if the Executive Board considers to be sensible and appropriate. The proposed authorization should give us the necessary flexibility in this regard and would be limited to two years. However, within the scope of this authorization, the Executive Board will always check carefully and on a case-by-case basis whether the respective annual general meeting of shareholders is to take place in the virtual format or in the physical presence of shareholders.
In doing so, the Executive Board will consider both the interests of the company and the interests of the shareholders. The appropriate safeguarding of shareholders' rights will be a central aspect in this decision. The second addition would permit the Supervisory Board Members to attend the general meeting of shareholders by way of video and audio transmission if that general meeting of shareholders is held virtually. This permission reflects the fact that Serupervisory Board Members traditionally have more of a passive role in the general meeting of shareholders. The necessary flexibility provided by the proposed amendment would allow Members to avoid the time and expense of traveling to a virtual annual general meeting if the company chooses a virtual format. I ask for your agreement on these two proposals as well.
Ladies and gentlemen, before we come to the request to speak, I would like to draw your attention to the fact that this year's voting here in the hall will take place for the first time with the aid of tablets. If you want to participate in the vote, please use the corresponding voting document that you were given in the entrance area. As in the past, we will vote here in the hall using the so-called subtraction procedure. Only the no votes and abstentions are entered and counted in the tablet. The yes votes are then calculated by subtracting the no votes and abstentions from the current attendance count. Therefore, you do not need to submit a vote if you agree to the management's proposals. I will give you more detailed information on the voting procedure following the general debate.
I hereby open the discussion section of the meeting, which I will take as a general debate on all agenda items. And I will now give Jella Benner-Heinacher the floor.
Guten Morgen, meine Damen und Herren. Good morning, ladies and gentlemen. My name is Jella Benner-Heinacher, and I represent the Deutsche Schutzvereinigung für Wertpapierbesitz, which is the DSW from Düsseldorf, a shareholders' association. It's really great to be here again and to talk to the Executive Board and the Supervisory Board face to face. We welcome the possibility of having a direct exchange with you because still every day we are having a lot of virtual AGMs. And Professor Plattner, Mr. Klein, of course, this also saves you a lot of trouble. Let's be honest, because we saw it at the TUI AGM, hours of problems, of technical issues.
It didn't work well with Mercedes, nor with COVID, and Bayer also had technical disruptions over several hours for the reason of which the AGM ended only in the evening, late in the evening, and we are very glad, ladies and gentlemen, that we don't have to deal with this nuisance of an AGM technology today, but let's talk about SAP. Now, everybody in this world is waiting for the transformation of SAP into a cloud company. Finally, it is making progress and yields the expected results. For a long time, we, the investors, didn't have any confidence that you will get this job done, Mr. Klein. We've got to admit this openly, and of course, this also manifested itself in the share price of the SAP share. However, the good news is finally, it seems that all of the issues have been overcome.
SAP has delivered, and this also then is reflected in the share price of SAP, which is finally on the rise again this morning, EUR 123 per share. But I'm quite certain that this upward trend will continue. And above all, ladies and gentlemen, next week at the Sapphire at 16th of May, you, Mr. Asam, by the way, welcome as the new CFO. If on that occasion you announce to us that the medium-term targets of SAP are raised further, then, ladies and gentlemen, we expect a true share price fireworks heading for EUR 150 per share because that's where the share price actually belongs. When it comes to the dividend, we've got nothing to complain about this year. You're paying EUR 10 more than last year if we disregard the jubilee bonus. And that's also a positive signal.
Yes, the year 2022 was full of challenges, not only for SAP, but also for many other companies. And of course, at the center of everything was the war against Ukraine. You at SAP decided to exit your business in Russia and Belarus. And of course, the operating income also suffered from that. All in all, we suffered a minus of EUR 410 million in the P&L and additional restructuring costs of EUR 138 million. Mr. Klein, you've touched upon it yourself. That exit has been almost completed, as you said. That's why I'd like to ask you, when will it have been fully completed? And what is this going to still cost us this year? 2022 was a difficult year, and that's why the forecasts for the full year, well, making such a forecast was extremely difficult.
If I look at SAP's guidance for last year, well, then in every quarter, the guidance was adjusted. That's something we, the investors, are not too happy about because this always leads to doubts about the quality of the forecasts. Now, this became most apparent in the forecast on the effective tax rate. Now, here, you were quite off the mark. According to IFRS, 25%-28% had been forecast, and in the end, it turned out to be 44.7%. Well, maybe you can tell us why there was such a strong deviation from your forecast, and please confirm to us what the tax rate for this year will be according to your forecast you are aiming for between 25%-32%.
Ladies and gentlemen, you will certainly reMember the virtual format where we had lengthy discussions about Qualtrics, and now finally, the company is going to be sold. The remaining 71% of an interest that you're holding. Well, you want to sell it at a good price, but by the way, you also paid a good price for it when you purchased it in 2018. All in all, it seems, but I'd like to ask you to confirm this to us, that this was a fairly good deal, so maybe you can tell us all in all how much you invested in Qualtrics on the whole. What was the contribution to the revenues? What is the sales revenues after taxes that we get? Well, there's a rumor about $2 billion, and maybe you can also elaborate on the regulatory approvals.
And for us, ladies and gentlemen, of course, the most important question is now, what are we going to do with the revenues? Well, I've got a good idea. As a representative of the DSW Shareholders Association, I'd plead for a special dividend to be paid out in 2023. Mr. Asam, that would also be a nice welcoming message on your part to us, the shareholders. Apart from the questions on how to use the Qualtrics sales revenues, there's another question I'm interested in, namely the fact that we bid farewell to the so-called experience management. Mr. Klein, my question to you, do you want to get rid of a legacy of Bill McDermott? And what does this mean for our CRM business, which admittedly is one of the biggest issues at SAP? What is our current market position actually?
Because we claim to be number two, second only to Salesforce. What are the market shares and the revenues in this business? Now you said you want to restructure the business and merge two business units, namely software for marketing and sales on the one hand, and customer service CRM on the other hand. Maybe you can explain to us what this actually means specifically in your day-to-day work. Ladies and gentlemen, the Sapphire Ventures, well, that's an essential lever at SAP, and it's also very important for the financial result. If we once again look at the year 2022, then we see, well, there were some issues there. Here again, I would like to ask you to explain the development of the returns of that fund to us and how you expect the business to develop in the current fiscal year.
Ladies and gentlemen, we've all read the headlines, and there's also massive discussion ongoing. The German federal government has launched a major project for the so-called digital infrastructure. EUR 750 million have been made available, and SAP is to assume a key, a leading role within this project. Finally, we've also been given the approval of the Federal Ministry of Justice. So my question to you, Mr. Klein, is when do you expect the first results stemming from that project? What is the significance of this project for SAP? Is it a kind of door opener for further business? And for us, the shareholders, once again, the most important question is, are we also going to earn money with that project, or is this just a kind of prestige project?
Ladies and gentlemen, now, at every annual general meeting, we also, of course, discuss the Inflation Reduction Act, which is the U.S. Act to promote sustainability, and for that reason, of course, we also would like to ask SAP, how do you respond to the IRA? Because within that IRA, massive public funding is offered. Will you now invest to an increasing extent in the U.S., or does this program not really tally with your needs and expectations, which means that you will not be able to benefit from it in the end of the day? Ladies and gentlemen, the net debt, and that's another good piece of news, is developing in a very gratifying manner, and in 2024, by the latest, it will give us a lot of room to breathe, also, for example, for acquisitions of companies.
We've already sold Qualtrics, but we're also thinking about the next one. That's what we always do. Investors also have a lot of imagination about the future. Here, once again, I'm also turning to the CFO again. We all know that we still have some catching up to be done when it comes to AI, artificial intelligence. This is something which we cannot handle internally only, and that is why we will have to take over the one or the other company in this business. And maybe, Mr. Asam, you can tell us what are the missing links, and where would we like to take on some additional companies on Board in this regard? And AI, Mr. Klein, you also touched upon it in your statement.
Of course, you are already using AI in your applications today, but I think it's going to play a much wider role for SAP going forward. And maybe you can also tell us what else we can achieve in the future with the help of AI. This brings me to the numbers for the first quarter 2023. Of course, what strikes your eye are the high costs, the costs, especially for the restructuring program. And on top of that, we've got EUR 170 million for a compliance matter, but unfortunately, no further details are disclosed in this regard. So my question is, what is this exactly about? Please give us the background details on that compliance case and also let us know what else we might have to face in this regard in the future. Ladies and gentlemen, this brings me to the supervisory Board.
Now, of course, that is a matter which we have been thinking about for many years, and therefore, the news from February of this year has also caused great relief. Professor Plattner, your successor has now been designated. That's good news. Well, don't get me wrong, Professor Plattner, please. We don't want to get rid of you, not at all. That's not our intention. However, we always have to be prepared for every and each situation, and above all, we need to have a good succession plan. Now, the uncertainty is over, and that's very important. In your letter to the shareholders, Mr. Plattner, you wrote that you were not able to find candidates for the initial profile that had been drawn up. Initially, you had been looking for a candidate who is familiar with German and also speaks German.
Now, why were you not able to find anybody meeting that profile? Or was there nobody who wanted to have that job at SAP today, and I really liked it very much. You proposed Punit Renjen to us, and he also introduced himself to us. There's no doubt he's an international leader with a lot of experience that he gathered at Deloitte Consulting, as we've heard. But of course, he is not experienced with the German system of an Executive Board and a supervisory Board, and he does not speak German either, so he would be the first external chairman of the supervisory Board of SAP in 26 years, so that's really something special. For that reason, Professor Plattner, let me ask more specifically how this process went. Now, there are some rumors according to which Mr. Renjen was taken onto the shortlist following a recommendation by Christian Klein.
Now, that's something I don't like that much because, let's be honest, so-called friends and family programs for the supervisory Board, that's something we are not in favor of at all. For that reason, I ask you to explain the specific process to us. And furthermore, I also would like to know, having such a person as the chair of the supervisory Board, what does this mean for the Lead Independent Director, Friederike Rotsch? Isn't she going to play an even more important role in the future because she's very familiar with the German corporate governance system? Maybe you can also explain to us how the two roles will tally. Ladies and gentlemen, well, a permanent discussion at SAP is always the question also about changes in the Executive Board. Now, SAP keeps coming up with new surprises with people entering and leaving the Executive Board.
Luka Mucic, the former CFO, left last year after 27 years at SAP, and he is now succeeded by Dominik Asam. Then there was news that Sabine Bendiek, our HR director, at the end of the year will also leave SAP again. To be honest, if you look at the position of the HR director at SAP, then we've got to clearly state that this seems to be a bit of the hot chair because people are coming and leaving, taking over that position. Here, we really would like to know what's the issue there. Why can the HR directors not stay for five or 10 years at SAP? Is it due to the double hat because that person has to take over other operational responsibilities as well? Or where's the deficit?
In general, ladies and gentlemen, it is one of the prime tasks of the Supervisory Board to appoint Executive Board Members, and here we've got to ask very much in general how good is SAP prepared for these permanent changes on the Executive Board. Here, once again, I kindly would like to ask you to explain the process behind it to us in detail. Now, let me also briefly comment on the compensation system for the Executive Board. Now, based upon the compensation paid for 2022, we see that it's not always just going upward, but sometimes also there's a certain reduction. For example, you have not reached your short-term objectives with the current cloud backlog, or also when it comes to the revenue, the cloud and software revenue growth; well, the numbers were decreasing.
Now, I think that that's good because this shows that the pay-for-performance principle really has proven its worth here. Now, this brings me to the Executive Board compensation for the current year, 2023, which is also part of our agenda. Now, there are these two KPIs which you already mentioned, Mr. Klein, the Customer Net Promoter Score and the Employee Engagement Index. In 2022, the Customer Net Promoter Score dropped from 7 to 3, which is not good. So here, the question is, what happened there? And now, all of a sudden, there's a new method coming up. And according to the new method, we're not at 3 anymore, but at 7, and the objective is 8 to 12. And when it comes to the Employee Engagement Index, the objectives have also been adjusted. Now, here, of course, one wonders, why do you come up with such new calculations?
Have the objectives so far been overambitious and impossible to reach? So please explain to us why and how these adjustments were applied. Ladies and gentlemen, before closing, let me state that it seems that SAP has got a lot of power under the hood again. Transformation is on its way. We see the first positive results. We're looking forward to next week's adjustment of the medium-term targets of SAP because for us, this means that's going to be the starting point for a first increase of the share price heading for EUR 130 in the first phase. But of course, we would not criticize any further increase. And then there's also the justified hope, ladies and gentlemen, that we can benefit from the sale of Qualtrics, and that we might get a nice special dividend for 2023. Thanks for listening.
Thank you. Now I'd like to ask Markus Kienle from SdK to take the floor.
Mr. Plattner, Mr. Klein, ladies and gentlemen, shareholders, I'm Markus Kienle. I'm a Member of the Board of the SdK. The operative business might convince us, if you bear in mind that our company is still in the transformation phase of 2022, so revenue and margin in cloud business rose, but this growth was offset by the increases of the R&D and marketing costs. If you look at the figures of the past fiscal year, we can not only look at the operative side, we also have to look at the profit side. The revenue growth did not lead to profit growth. The finance result, with a deviation of more than EUR 3 billion, leads to a profit that is almost EUR 1.6 billion below the operative result.
Equity ratio is 5.8% after 13.5% in the previous year. With that, you have not achieved the capital costs, so it's only to some extent relieving that the deterioration of profit is not driven by the operative side because the profit side cannot be neglected. The tax ratio, with more than 40% against the previous year, has more than doubled, so we might say profit before tax halved and tax rate doubled. We have to bear in mind that the operative business of SAP SE is robust, and even with view of the special effects with the exit from Russia that accounts for EUR 400 million, still sees operative growth, even if it's moderate. Now, this growth has to reach the profit side as well. Admittedly, when you look at the first quarter 2023, the volume growth is achieved in the cloud business.
You say that the turnaround has been achieved, and you are operating from a position of strength. The adaptation of the business model was the right strategic decision at the right point in time. That includes the speed of the transformation too. For the performance in the past year, we would like to express our thanks to the employees, and we'd like to ask you to pass on our thanks to your staff. What are the essential reasons for this clear increase in R&D and marketing costs? What about the R&D costs and marketing costs? Will they continue to rise so that they eat up the increases in the revenues? What are your strategies with a view to these types of costs? What are the burdens to be expected due to wage increases? Can you pass on different price increases to your customers?
The burdens from the exit in Russia, can you compensate them in the ongoing business year, and if so, how? What are the criteria used to claim that you've achieved the turnaround in the adaptation of the business model? Financial result is not part of the operative business, but still, this has a share that impacts profit before and after tax. What are the essential reasons for this deterioration of the financial results? Are there any tools to limit the volatility of the financial results? What's the average financial results you expect for the next three years? I know, ladies and gentlemen, that the equity ratio is something you like to leave aside, but that is something you have to bear in mind because at the end, you can only pay out the equity ratio, the return on equity. What is your expected return on equity?
I've mentioned capital costs and the tax rate already. What levels do the capital costs have, and what are the essential reasons for the deviation of the tax rate against the previous year? And the cloud gross margin, depending on the product, varies greatly. The Infrastructure as a Service, with 27.8%, is clearly behind the other two products and has the lowest gross margin. If you look at the three cloud product ranges, what do they have to be like to achieve the envisaged average margin? What are the current shares of the different types of products? Mr. Klein, in your letter to the shareholders, you write that all the key figures have been achieved. Was there also a target for profit before and after tax? And if no, why not? And if yes, where was it?
Of course, the current level of format of the AGM needs to be discussed. First of all, our praise to the management that you have switched back to a meeting in person to have an exchange of opinion where you don't rely on the options provided by legislation. A virtual AGM, ladies and gentlemen. That is no longer offering proper interaction of a shareholder. That's a proper digital AGM. Does not fulfill the essential function of an AGM and prevents the feedback to the Executive Board and supervisory Board. The shareholder is the sole main actor or can be switched on and off, and the AGM degenerates. We'd like to say thank you for this corporate governance and shareholder democracy, and we honor the respect you pay to us as shareholders. We prefer the hybrid AGM, which would have been possible according to the articles of incorporation.
We'd like to refrain from discussing the benefits and move on to item 11 that covers the resolution on the introduction of a virtual meeting. We see that such a virtual meeting might be relevant in times of emergencies, but we reject this because we have no definition of emergencies in the existing proposal. We had certain restrictions as in the past, but that's no longer applicable. Apart from other requirements, we want to make sure that any problems caused by technical problems will be assessed, and we also ask the company to refrain from limitations of liability when you use a professional AGM provider. Ladies and gentlemen, even if this proposal is approved, stick to the real in-person AGM because that's the only proper AGM. Why don't you use the legal provisos?
Because that is one of the leeways provided by the act that you neglect these provisos, at least in the proposal we have on the agenda. To obtain the compensation of an additional compensation of the Lead I ndependent Director is something we reject because of the functionalities provided. Because the Lead Independent Director is meant to communicate with the shareholders, we welcome direct communication with the shareholder, but we have to admit that such a competence is not established in the German Act. The communication function with the shareholders is currently not covered by the corporate act, and the legislator has not adapted accordingly, and you have to stick to that, like it or not. Luka Mucic left the company at the end of March 2023. Luka Mucic admittedly would have liked to work until 2024. That was the rumors.
Who started the initiative to resolve the contract, and where are the specific reasons? And Professor Plattner, don't stick to the usual wording mutual agreement. Mutual agreement, that's just basically a lie because there is no separation based on mutual agreement. This wording just is to gloss over. What is the original term of the contract, and when was the contract prolonged for the long term? What is it SAP has to pay due to this premature cancellation, both when it comes to the labor contract as such as well as severance payment? Now, the remuneration system. Despite good regulations that are in line with the requirements, we will not approve. The main reason is that the ratio between long-term and short-term incentives is 40%-60%. The SdK favors a share of the short-term of 30%. Otherwise, the long-term perspective of the variable remuneration is not fulfilled.
The compensation model includes a change of control clause, but also a severance payment independent of whether the Board will—the allocation of responsibilities will change. Why do you stick to change of control clauses and still pay a severance payment, no matter whether the Board is affected or not? The usual change of control clauses you find in other compensation systems of other companies foresee that the change of control will see an implication on the sector of the Board. This change of control clause is a hard clause. It is not required to protect the Board since the Board is not active for a specific set of shareholders. He's working for the company, and the company doesn't change. If the change of the setup of the shareholders would impact the setup of the Board, the Board Members could cancel. Then the TSR component is also causing concern.
It has a certain factor, and we wonder why a positive factor should occur if the development of TSR is negative. The only proper PSU factor with a negative TSR is zero. The potential argumentation that the negative development of TSR is less negative than that of other companies, of course, needs to be rejected. Ladies and gentlemen, I wish the Board all the best for the further transformation of our company and also a little luck without which you won't be successful. Thank you very much for your attention.
Thank you very much, Markus Kienle. Next, I would ask Ingo Speich of the Deka. [Foreign language]
Ladies and gentlemen, I'm Ingo Speich.
I represent the Deka Investment and subsidiary of the Deka, which is part of the Association of German Savings Banks. First of all, I would like to praise you for having an in-person AGM with people, which is something we appreciate very much. Please stick to your high standards in the future too. Ladies and gentlemen, it seems that SAP has come out of the weakness phase and is looking at a robust business development after a chaotic 2021. Last year was marked by focusing on core topics and a rebuilding of a business. Christian Klein led SAP and focused it more on customer requirements, integration of several divisions, and investments. We're also focusing on SAP's growth, has got better, and is more successful in the cloud business. Mr. Klein, the Vision 2025, you filled it with life.
The capital market is trusting you again, and you and your colleagues on the Executive Board must show now that real innovation is being developed and can be scaled up. Use the tailwind. Customers are investing more into your software, and the cloud has become commonplace. The cloud business, in the last business, grew by 24%, and order backlog for the 12 months is at EUR 11.4 billion. Now, that sounds like a very good base. However, we would like to look ahead. What's your pipeline for large flagship accounts which are moving into the cloud, and what thrust do you expect from the program GROW for mid-market companies? And all the growth messages are, of course, good, but the price-performance ratio is less than Salesforce, although Salesforce wasn't really convincing with its sales figures recently. Why is this so?
It's probably a lack of trust in management and also an old SAP disease, weak profitability in new business at high growth rates. SAP has for a long term a challenge in balancing margin and growth. SAP has invested, underestimated investments into the cloud business, and this has created pressure. Individual customer requirements cannot simply be transformed from a classic SAP product into the cloud. In the course of this year, the investments are going to return to a normal standard. Gross margin improvements were visible in the first quarter, but this is not enough. You need ambitious targets, which you can achieve. Growth and revenue must improve further, or also earnings must improve so that SAP can remain in the cloud, in the top league. Cash generation must improve in order to be at the same level as your competitors.
The transformation of the business model to a subscription model alone cannot be the reason because it seems that customers are paying earlier to your competitors, and in earnings and free cash flow, SAP must get better. We would like to know from you what revenue and margin targets have you set for yourselves for the next years, and how do you balance margin and growth. How do you increase the price of the SAP share and the cash collection in the US? How will you improve it, and how will management also be incentivized with LTIs, and where do you see necessities of acquisitions and the debt ratio? Is this a responsible level? The change from Luka Mucic to Dominik Asam, the financial side of SAP is doing all right, but we would like to appeal to you that SAP should move closer to the investors.
Capital market communication should improve by transparent reporting, more transparent reporting. There must not be an adjustment in the figures, and we want to have more openness when errors occur. Sustainability is very important to SAP, and we appreciate the climate strategy of SAP up to the year 2030 for our planet. However, it would be better if this would be done without any compensation payments involved. How are you doing in terms of net zero targets, and how high will be the share of your suppliers, which you include in your climate targets 2030? And other companies are making funds available to reduce or to improve their climate performance, and this would also be a good way for SAP. And are you planning a fixed investment amount which you're going to spend on other companies to reduce climate change or something like the Climate Innovation Fund of Microsoft?
Let's move on to the agenda. Number eight, Mr. Renjen and Ms. Li, we think it's very positive that there's more international orientation of the supervisory Board. SAP has fulfilled one of our requirements of having more internationality in the supervisory Board. This is important because the US is the main market of the United States, and the growth in Asia is promising. We also hope that the Members will keep an eye on their mandates and also reduce some of their mandates. We welcome the decision to have Punit Renjen as a successor to Hasso Plattner. Mr. Renjen, next year you will, of course, follow in the big footsteps of Hasso Plattner, and one year is, of course, very ambitious. An external person at the top of the SAP supervisory Board is like a revolution, but however, this is maybe what SAP needs.
At any rate, you need to spend a lot of time. Mr. Plattner and Mr. Renjen, please reMember us, the investors. Have an open ear to the capital market and be open, especially now in the transition phase, to build up trust. We will vote against the virtual AGM 11-1 and 11-2 decisions because the virtual format was too long, and SAP, as a software company, could set aside. If you want to have a digital AGM, then maybe a suggestion, something that is done in other countries already, the hybrid AGM, this should be favored for the benefit of the investors and the shareholders. People should be able to decide whether they want to be there in person, in presence, or virtually. You're proving today that such a decision is not even necessary. Please stick to your policy of having presence AGMs.
It's not just any stakeholders or groups. Your shareholders are very important to you, and in all other items of the agenda, we will vote, we will approve, and we wish SAP and the supervisory Board the best of success. We're looking forward to the next AGM next year, which will be in presence or hybrid, hopefully. Thank you very much. I would next ask Hendrik Schmidt of the DWS.
Thank you very much, Professor Plattner. Mr. Klein, ladies and gentlemen of the supervisory Board and Executive Board and shareholders, I'm Hendrik Schmidt. I represent the DWS, one of the largest fund companies and our customers, for whom we are proud SAP shareholders. As the other speakers said, after three years of virtual format, we'd be happy to be here again in the SAP Arena in Mannheim.
For us as investors acting on behalf of our customers in a trustee position, what you're doing here with the AGM in presence, this is a good example of good practice. All of you, the Boards, but also the staff of SAP, I would like to thank you all for your commitment and your performance during the past business year, which was not easy. I think that also deserves a little applause, perhaps, and I would especially ask the Executive Board to forward that thanks. The last business year, with regard to its effects and the war in Ukraine and the macroeconomic environment and the inflation rates, which were rising, was difficult. SAP last year had to adjust its guidance for the operational earnings, and one reason was that the license revenue went down more than expected.
I would like to hear an explanation of how the license business developed. What implications does this have in the medium term on the maintenance revenue, which is, of course, linked to that figure? The transformation of the business model in the cloud has already been mentioned, but here again, the question arises how the current economic environment has an impact. Will there be a procrastination in investments on the part of customers of SAP? What's the current status of customer migration to SAP S/4HANA? In addition to good news on the revenue side, the cloud is impacting the earnings, but also restructuring expenses and investments into the harmonization of the cloud infrastructure is having an impact. What role does the fact play that customers are still very much relying on private cloud solutions as opposed to public cloud solutions?
When do you expect this to change, and when do you expect a change in the margin development? In the recent past, there has been little progress with the development of the free cash flow. What are the most important reasons for this, and how should that development continue in the next years? Remuneration has been mentioned, and I will come back to that in a little more detail, but the share-based compensation, what we see here at a very high level is a certain deterioration. The question is, what kind of development we can expect there in the next years? What can we expect in this respect? Let's talk about the midterm financial targets 2024-2025. In which areas is the Executive Board most convinced, and where do you see the most risks, and how are you going to meet those risks?
On the part of DWS, we would like to welcome you, Mr. Asam, and especially wish you the very best for the tasks ahead of you. You've heard some aspects already, but we'd like to know which tasks do you see for yourself, or which will be at the top of your list of priorities in the short term? And of course, we're interested to hear about your dividend strategy. Will SAP stick to its previous dividend strategy, or will there be a development? And if so, to what extent?
We see that corporate governance is something that SAP attaches a lot of importance to, and we welcome the changes on the part of the supervisory Board, especially the post of the Lead Independent Director, which is still very rare in Germany in public companies, which is a role that is supposed to establish an exchange between the independent Members of the supervisory Board and the external exchange with investors, and it should facilitate that exchange, whereas the head of the supervisory Board is considered not to be independent. Ms. Rotsch, I would, looking at the further development of the remuneration system, like to mention that we find our exchange with you as very good, and I would like to thank you very much for that good contact. Today, the mandates of Professor Gesche Joost, Jennifer Li, and Dr. Qi Lu end, and Professor Joost is not standing for re-election.
You, Ms. Joost, I think that's about the right direction. I want to thank you very much for your work on the supervisory Board and all your commitment you've shown for SAP and for everything that will come now. All the best from us. For the mandate that is to start, and yes, of course, that deserves a hand as well. For the mandate, Punit Renjen, former CEO of Deloitte, it has been suggested. He has already presented himself. Thank you very much for letting us get to know you a little bit. Indeed, the assumption of the leadership as a successor to Professor Plattner is something that would probably fill anyone here in the arena with awe. I would like to reflect very briefly on why the succession at the top of the supervisory Board has been postponed several times.
We were told that candidates existed, had been identified, but either did not stand for election or had canceled at short notice, and it was not possible to have an orderly transition for want of familiarization time or onBoarding time. Now, this time this seems to have worked, and you have explained to us how this is going to happen. But concerning the selection, I would be interested in hearing what were the criteria according to which you were looking for candidates and identified candidates, and how many candidates were shortlisted, and what were the decisive reasons which led to the selection of Mr. Renjen?
Of course, we would have liked the transition to be a little earlier and maybe less bumpy, but we hope that the supervisory Board will use the next 12 months to design the transition as smooth as possible, and we wish you, Dr. Renjen, the very best for this task. Let me talk about Ms. Li and Mr. Lu briefly and their re-election. We are happy that Ms. Li has accepted the criticism that came from us and reduced the number of mandates she has. But as we said last year during the AGM, we cannot vote for your re-election because we still feel that you hold too many mandates as founder and general partner of Changcheng Investments. We think that Ms. Li is an Executive, and someone with an Executive job as a candidate should be limited to three mandates. But Ms. Li is already involved in ABB and Full Truck Alliance supervisory Board and also heads the audit committee at SAP, which are five mandates, so she is overBoarded.
The head of the audit committee, Gunnar Wiedenfels, there is no remark on this in the general report, so I would like to hear an explanation why that change is coming, and can you also explain what special expertise Ms. Li has in terms of audit and rendering of accounts with regard to the special requirements of SAP SE, which also has to be done according to the German commercial code HGB? With Dr. Lu, we also have reservations because of the mandates he holds, and as founder and CEO of MiraclePlus, we consider him too as an Executive who should have no more than three mandates.
And because of the mandates in the audit committee and the other committees, Dr. L u, and on the Board of directors of Pinefield Holdings and other companies and Membership on Pinefield on Pinduoduo, the total of these mandates is five, and with SAP, this would be six. Ms. Li, nor Dr. Lu, we believe, has the necessary expertise to play an important role on the supervisory Board of SAP in this crucial phase of the company, but we consider the large number of offices as being too high. The remuneration system for the Executive Board, we welcome the fact that the supervisory Board has accepted the criticism in the remuneration system, and the system has been improved by several elements, and we will agree with it. Especially, we welcome the Retention Sare Units, which are not performance-related, replaced by new performance-related units, and also the non-financial figures, and also raising of the higher shareholding requirements are an improvement, and with the ESG performance share units introduction.
Now, sustainability targets are included in the long-term incentive component, and the target dimensions reaching the Net Zero by 2030. More women in managerial positions is something we welcome too, in addition to the short-term component, which now has customer and employee satisfaction, and two separate non-financial targets are systematically included here, which from our point of view are important for the future successful orientation of SAP because this is what this is all about. We also consider, with some concern, the development or the deterioration of employee satisfaction over the past years because with only 80%, this is only just in the defined target corridor between 80% and 84%, and we are even more concerned about the fact that that target corridor for 2023 is going to adjust it to 76% to 80%.
Because of the importance of satisfaction of staff and good heads at SAP, the ambition of the Executive Board should really be very different than just adjusting the target scale. What future-specific measures are you going to take to improve the value of 80% in the future and not to set that as a target level? Now, I would like to come back to the compensation report and the share buyback program. Now, the compensation report, we will not be able to support this year because it is still based on the previous system where the long-term component has only financial targets, and the Retention Share Units are still in it. Sustainability targets will not come in until the new system is approved today, and the report also discloses payments to Members of the Executive Board who have left.
So, EUR 11 million are still paid to people who are no longer working for SAP, and this does not even include the pretty comfortable sum that Luka Mucic is receiving. The changes in the Executive Board in recent years are not surprising, but the actual amounts are surprisingly high. Sabine Bendiek, another Member of the Executive Board, is going to leave on page 27. It says in the report that she will get one-year payments because of non-compete clause. Now, maybe you could also give a little explanation on that, why this is happening or what this is about. The development of the share price of our company has also been a topic of discussion, and we were not very happy with it.
Looking at the past business year, from more than EUR 124, the share price fell by 20% to less than EUR 89, and again was below that magic 100 threshold, although the company last year had a total of more than 15.7 million shares, bought back these shares for a price of more than EUR 1.5 billion. The share price has returned to the original level of EUR 120 per share, but neither we as shareholders nor you as the Executive Board or supervisory Board can be satisfied with that, so we will assume that the funds you have available will, first of all, be used for a future-oriented development of the business in order to facilitate and actually implement the transition into the cloud, and only in that way will SAP be able to compete in the future and increase its value in the field of competition on a global scale.
Under item 11, we welcome the transparency and the authorization that is limited to only two years for hybrid AGMs or for virtual AGMs. We will agree to this, but we hope that this will only be used as a last resort by the Executive Board and the supervisory Board. And we hope that next year we can rely on having an AGM, and we will hope that we'll have the opportunity to say goodbye to you, Mr. Plattner, in person and not virtually. I would also like to make a remark on the way that supervisory Board Members should participate in future virtual format. Now, there's one final remark I have to make. Mr. Klein, the fact that you are here in Mannheim today is clear. You're the CEO of the company, but you have a second appointment today, and that is the Adidas supervisory Board meeting in Fürth.
I hope that you will inform yourself what points will be discussed there in Fürth because that is also important, I think. Ladies and gentlemen of the supervisory Board and the Executive Boards, I wish you the best of success, and I wish us shareholders a positive development of the share price. Thank you very much, ladies and gentlemen, for your attention, and I'm also thanking you for answering my questions. Thank you.
We will take one more statement from a shareholder, and then we will start providing the first couple of answers. Markus Golinski from Union Investment is asked to take the floor.
Yes, here I am. Thank you very much, Mr. Plattner. Ladies and gentlemen, my name is Markus Golinski. I'm fund manager at Union Investment.
We are a fund company of the Volksbanken Raiffeisenbanken , which is one of the big shareholders of SAP, and we represent the interests of our 5.8 million investors. Mr. Plattner, Mr. Klein, first of all, I am also happy about the fact that today's SAP AGM again takes place as an in-person meeting because this is the only way to have a lively general discussion and an intense discussion on site. Now, we, the shareholders, I think we can be very happy about the development of the last 12 months. Total shareholder return for the share was more than 40%, which is significantly better than DAX and better than the MSCI Software Index. For a long time, the capital market had its doubts about the transformation into a cloud company, which was very slow in the beginning. But now it's really picking up steam.
It turns into the growth engine of SAP. The necessary investment has been made to a great extent, and finally, they also pay off for the shareholders in an above-average profit growth. Furthermore, the share of recurring revenues has further increased, which means that the new business model turned out to be rather resilient versus potential economic downward developments. But there's no reason to rest on our laurels because the next challenge is already waiting. Many experts believe that artificial intelligence is going to be another fundamental game changer, and that's the next step in the industrial revolution. And when it comes to adapting new technologies, well, in the past, SAP, unfortunately, doesn't have a very positive track record. Or in other words, SAP failed to adopt the key trends initially. Now, that was in the year 2000, and following it was also the case in cloud computing as well.
For too long, SAP rested on the sidelines, and then with major efforts and under the pressure of the market environment, the company then managed to catch up with its competitors. Therefore, when it comes to AI, SAP now finally has to take a proactive and forward-looking approach. Mr. Asam, now, first of all, we would like to welcome you as the new CFO. In an interview with the Börsen- Zeitung three weeks ago, you said that further developing the portfolio with the help of artificial intelligence is one of the focus areas of SAP, but at the same time, you also emphasized that you rather will focus on alliances than on takeovers. The own investment is primarily to go into those areas of the core business where SAP sees its fundamental strengths, that is, ERP and supply chain.
Artificial intelligence, however, you said, only makes sense in the context of good knowledge about the customer data and their business models. Mr. Asam, we definitely want to ask you to rethink what you said there. AI can become the game changer, and which will certainly also be the determining factor in the success of a business model. Now, thanks to the sale of Qualtrics, SAP has got strong financial flexibility. Of course, the shareholders would be happy about an adequate special dividend. However, the Qualtrics revenues, or at least part of them, should be reinvested in technologies for the future. This will allow us to remain top of the league in the future as well. Mr. Klein, how can you make sure that when it comes to AI, SAP positions itself properly and that cloud heavyweights such as Microsoft, Alphabet will not move away and create a bigger gap?
Will you already be able to make some announcements in this way at Sapphire next week? Now, if entering into alliances with partners is not sufficient, will you then also consider taking over young, promising AI companies? Do you have some of them already on your screen? Or in other words, what are your specific M&A ambitions? And the breakdown of the revenues from the Qualtrics sales could be possible in terms of capital returns and filling up the war chest for future acquisitions. Mr. Asam, we have already met you in your times as a CFO at Infineon and Airbus, and we have appreciated your work there. And in your work here as CFO at SAP, we hope for transparency and understandability in your forecasts of the financials.
Now, with a better market communication in the past, a lot of volatility could have been avoided regarding the SAP share price. Now, admittedly, you've only spent a few weeks in your new office, but is there anything that has come to your mind which you would like to change specifically? Ladies and gentlemen, we at Union Investment, we primarily represent the interests of our shareholders, but we also want to involve the other stakeholders. Let's first talk about the employees. The employees are the most important, maybe even the only relevant production asset of SAP. Unfortunately, our impression is that due to the lack of continuity in the companies and in the HR policy, combined with poor communication, SAP has lost a lot of trust of its workforce.
The Employee Engagement Index, which is a measure of the loyalty and involvement of the workforce, has dropped from 86 to about 80% within two years. The chairman of your Works Council, Klaus Merx, called this a warning signal on the internet, as we've read in the media. Therefore, let me ask you quite frankly, why has that index dropped so heavily? Now, whether the leave of Ms. Bendiek as a Chief People Officer after three years in office is the root cause, the result, or a symptom of this change in general employee confidence, that's something we cannot tell. The hope that the turnover on the highest management level after the numerous changes of the last few years, now, the hope that this turnover rate is going to decrease, well, that has not come true.
Now, when it comes to customer relationships, that everything is running smoothly as well. The Net Promoter score in 2022 dropped by seven in 2022 according to your annual report, which was only at three, which is far away from your target of eight to 10 points. It seems that in spite of the RISE with SAP initiative, customers are still full of uncertainty about your journey into the cloud. And instead of presenting your new products as the only option, it seems that your sales staff still hasn't got a lot of persuasion to do. Now, one step into the right direction, at least, is that the employee and customer satisfaction in the future will also play a role in the long-term variable compensation of the Executive Board Members by way of an ESG component.
Ladies and gentlemen, now, I've been observing the events at SAP as a fund manager for more than 20 years. And there's one quote of Hasso Plattner I will always reMember, which is from the year 2010, when SAP was in a deep crisis. The atmosphere in the satisfaction index amongst employees and customers was very poor. The mid-market product ByD esign was not really successful, and Léo Apotheker, the CEO at that time, had to leave in the end of the day. At that time, Hasso Plattner said that SAP is a publicly listed company, which means it aims to generate profits, but in order to generate profits, a company also needs to be happy. And he said also that he wanted to do everything to achieve that. Now, Mr. Klein, well, I think you should also adopt that principle because only a happy SAP with satisfied employees and satisfied customers, only such a company will have long-term success at a stock exchange.
So let me ask you, which specific actions do you wish to take to increase the employee and customer satisfaction? Will SAP continue to offer the on-premise solutions to customers if they wish to have that at fair terms and conditions and also actively support them in that? Now, let me turn to the agenda finally, ladies and gentlemen. We approve the acts of management of the Executive and the supervisory Boards, but we vote against the proposals of items 6 and 7, namely the authorization to buy back shares because for that, we feel that there's a maximum term of two years acceptable, which is exceeded here.
Now, under item number eight, we vote against the re-election of Ms. Li and Mr. Lu into the Supervisory Board due to their large number of mandates, whereas we support the election of Mr. Renjen. We also vote against the change of the articles of incorporation on virtual AGMs proposed under item nine of the agenda because no additional explanations are provided as to the conditions under which the Executive Board wants to decide in favor of a virtual AGM. And we do not see a written explanation as to how future virtual AGMs are to be organized. Furthermore, we believe that the physical presence of the Supervisory Board Members is essential in order to enter into a dialogue with the shareholders on the day of the Annual General Meeting. We will endorse all of the other agenda items.
With that, I'd like to thank you for your kind attention, ladies and gentlemen.
Ladies and gentlemen, let me start with a first round of answers. We haven't got too much yet, but let's start nevertheless. There was a question by Ms. Jella Benner-Heinacher regarding my successor. Now, you asked about the specifics of that process, and you said there were rumors that Mr. Renjen became shortlisted following a recommendation by Mr. Klein. Now, we asked an external headhunter to help us design the selection process, which means search for, identify, and evaluate candidates on the basis of a profile, which I will come back to in a minute. From various sources, several candidates were proposed beyond those which had been identified by the headhunter. I personally proposed two candidates, however, who did not make it onto the shortlist.
So it was quite normal for the CEO if he's got the opportunity to propose a candidate as well. So we retained a headhunter. We had our own and evaluated our internal candidates. Former SAP Board Members were also evaluated. And furthermore, other candidates were also included. Now, some more details on the selection process. Now, it's important for me to stress that there is no doubt about this process, and therefore, I want to reject the doubts which were voiced in the media. Our nomination committee, headed by Gunnar Wiedenfels, performed a comprehensive search for candidates. And as I said, also going beyond the proposals put forward by the headhunter. And everybody from the supervisory Board or the Executive Board was invited to propose candidates. Now, all of this started with the definition of a clear search profile, defining the skills a candidate should have.
The search was very broad-based and also an international one. Let me state at this point, Ms. Jella Benner-Heinacher, it is true that my first priority had been to find an internal successor. I also communicated this, but that was not possible, and after that, I approved the search to be extended to external candidates, and then it also turned out that this was the right step, so the search was a broad-based international one, and it was done internally and externally. The nomination committee was supported by an external headhunter firm, which also presented proposals to the committee on the basis of our search profile. The initial proposal for Mr. Renjen as a candidate, now, that initial proposal was indeed Mr. Klein's, but as I said, my and other proposals, well, made it onto the so-called long list of candidates, but they did not make it onto the shortlist.
The nomination committee considered Mr. Renjen an excellent candidate and then therefore included him into the selection process. All of the Members of the nomination committee then had meetings with the favored candidates, and the nomination committee concluded that Mr. Punit Renjen is the best candidate. I think we had three candidates on the shortlist and also met them and interviewed them personally, and there was also one foreigner who speaks German fluently, and by no means did the other candidates refuse to accept the role, but actually, from the point of view of the nomination committee and in accordance with our requirements profile, Mr. Renjen certainly exceeded the other candidates with his know-how, then there were also meetings with all 18 Members of the supervisory Board to make sure that each supervisory Board member got a first-hand impression of the candidate before we then proceeded with the vote.
Some Members, such as Gunnar Wiedenfels and I myself, also talked to Punit several times. The comprehensive picture, which all Supervisory Board Members then obtained, then resulted in our decision at the end of the day, and it's important here to emphasize that, of course, the Members of the Supervisory Board who are SAP internal employees, now, of course, they also were involved in the overall process, that's for sure, so it is absolutely not true that this selection process was not run properly. Now, I'm going to remain silent on this, and when it comes to Ms. Rotsch's role as Lead Independent Director, let me first of all, once again, emphasize that Ms. Rotsch is assuming an important role for the Supervisory Board. She met shareholders and investors in important meetings and thus supports me in my role as the Chairman of the Supervisory Board.
The independence had been a major request of our shareholders. Now, as I'm going to remain chair of the supervisory Board in a transition period, Ms. Rotsch will continue to assume her role as Lead Independent Director. And what happens thereafter is something we're going to decide and announce at a later point. Why is that going so slowly? All right. Let me take the next couple of questions, which dealt with the financial results, Sapphire Ventures. And there was also the question about the effective tax ratio. I'd like to answer them all together in order to develop a better understanding. Sapphire Ventures is our venture capital business, as the name already indicates. And of course, then it's subject to fluctuations in the valuation. The interest held by that fund is valued every quarter at the mark-to-market price.
And you will certainly see that in 2021, we had an increase of 21%. And then we suffered a major slump in 2022, namely 33%, which means on the whole, NASDAQ dropped by 19%. And Sapphire Ventures, if you look at the financial results of the annual report, you saw that we generated profits of EUR 2.4 billion all in all in 2021. And then we lost EUR 1.2 billion again. So it's still net positive. So it was a positive development all in all. But it's also quite interesting if you look at our own share price of SAP. Now, effective tax ratio. In early 2022, of course, it was impossible to predict that NASDAQ and the entire technology industry would suffer such a major slump. And due to the major losses, at least in accounting terms, but not on profits, we had a negative impact on the effective tax ratio.
If you look at the two years together, the up and down, then the tax ratio is at 28.7%. So that's very close to what we had expected, and which we also, and for the future, we also expect a range between 28%-32% according to IFRS. So I think with that, I have covered the whole couple of questions asked by several speakers in terms of the tax ratio. Now, there were some questions also on the effect of the Ukraine crisis. Of course, we've got full sympathy for all the peoples who were affected by the war. We exited the business, and they suffered major losses, triple-digit millions, of course. And that business is not going to return in Russia. However, we also had various one-off impacts that we had to take financially, which will not recur.
Then, of course, in accordance with the sanctions, the last package was the eighth EU sanctions package. We further draw down our business. And I think we're almost down to zero. I think we've got a small number of employees left there, certainly less than 100, rather in the lower double-digit range. And they're dealing with kind of collateral damage still left there. Now, Qualtrics sale. As of today, well, as the closing has not happened yet, we do not have the final profit which we can disclose yet. But according to IFRS and according to cash flow, we will have a net profit from that deal. Therefore, I can confirm what has already been said, that all in all, we will generate a net profit from that overall Qualtrics transaction.
And of course, that leads to the question of what happens to the revenues from that sale, how do we invest the money? The speakers clearly emphasized that primarily we're going to invest organically. That's for sure. That's where the biggest opportunities are, where you can generate the biggest, best excess returns. But as soon as these revenues from the sale are available, we will have an extremely strong balance sheet, which gives us a lot of leeway also beyond organic opportunities, being in terms of M&A or also being in terms of shareholder interests. But we first have to look at the details, and then we'll get back to you in due time. Now, there were also several questions regarding our ambitions for 2025. And well, we still need some more time.
We said that after the first quarter, we would comment on this at our customer conference, Sapphire. By then, all of the studies and analysis will have been finalized. Of course, there were massive impacts. We had to digest the war on Ukraine. Then we talked about the sale of Qualtrics. We had FX changes. We had a change in the stock-based compensation. Now, all of this will be integrated into the final statement that we'll make. Well, I do not want to make any provisional comments at this point. Compliance was another question. The question was the EUR 170 million which we had provided for. Now, where does this come from? Well, in our annual report on page 282 of the German version, there is an explanation. We did have compliance issues.
Here it reads that we were talking to various regulators, including the SEC and the DOJ in the US. By the end of last year, and I can really confirm this to you of what I found when I took over, we were not able to specify exactly how high the costs for the company might be. Fortunately, in the first quarter, we got a somewhat clearer picture. For those elements, which we can estimate properly, now for them, we have come up with respective estimates. The background to this is these are no new issues, but these are the issues which we have listed under contingent liabilities in our annual report for several years. Now, the question was whether marketing and sales costs are increasing faster and thus eat up our gross results.
Now, without preempting the ambitions for 2025, it's clear that this is not going to be the case. We want to see a strong increase in gross profits, and we want to make sure that the sales costs are kept under control. And if you just look back at the old still existing ambition, then it's easy to tell that the growth in the operating income that we are planning for is significantly higher than growth in revenues. And that gives us a gross margin as well. Now, equity return, why is that so weak? Well, that's due to the one-off effects, which I already mentioned. Now, there was the financial result of Sapphire, also related to the meltdown in the US, if I may call it this way. Then there was also the question about the cost of capital.
There is also comprehensive information available in our annual report. You know that every year we apply a so-called impairment test to our goodwill. In the footnotes in the annual report, you find comprehensive information as to in which division, in which period we allocated which cost of capital, which are somewhere between eight and plus 11%, depending on the specific business and business unit. Now, let me see which other questions I can answer at this point. Oh, I hand over to you, Christian, at this point now.
Yes, there were screen questions as regards the farewell with the two experience management. Do you want to restructure and combine two fields of activity, software for marketing and sales and CRM? Please explain what that means in specific terms for your day-to-day work.
Let me underpin that Qualtrics, as I said in my presentation, remains a very strong partner of SAP, both in terms of technology as well as on the go-to-market side. We will actively integrate Qualtrics into our solutions, and our sales will focus on these solutions as well. As regards to CRM, let me be explicit. CRM is a strategic area and continues to be so for SAP. We think we have a strong position in the field of commerce, sales, service, and we have prominent examples close by. If you want to configure a car online, this is mainly done with SAP software. SAP can do this compared to our CRM competitors by offering seamless integration into production, manufacturing, and supply. That's what characterizes SAP in the past. We didn't do the best job to bring all this together.
But now I'd like to praise Thomas and Jürgen for the great job the development teams have done. And we can offer this perfectly end-to-end. Yesterday at Hamburg, there was the OMR Festival that was about digital marketing and digital sales. And SAP was strongly present there, also for mid-sized companies. If you're on the internet, you often see personalized marketing. So you see products and services where you checked something in the past, maybe. Quite often, that's SAP behind this. But you can also decide that your data will no longer be stored in the data of a company. That's SAP too. And we are leading in this sector. And last but not least, we combined the industries with our CRM area because quite often we found Coop, for instance, is a very prominent example here.
They've replaced Salesforce and switched to SAP because they appreciate very much how we understand trade, how we build up a loyalty app so that they have better customer retention, not just through technology, but also due to the lot of knowledge and know-how we have at SAP, knowledge linked to trade and customer relationship management in their industry. That is why we combined the sectors. And in sum total, the two segments are stronger now in terms of headcount than in the past. The next question referred to the federal government digital infrastructure. SAP is to be involved in the major infrastructure projects by the federal government. Mr. Klein, when do you expect first results from this project? What is the relevance of this project for SAP? Is that a kind of door opener for future business?
Will we make money in the end with it, or is it more a matter of prestige? In the press release of the Federal Ministry for Economy and Climate Protection of 21st of March this year, we could read that the early start of the project Industrial Cloud is an important project of common European interest with SAP, and that has been approved. With that, SAP can decide prior to the final approval of the European Commission. There are 12 Member states involved here. The project of SAP is the first of 22 German projects. In the context of the IPCEI, the Industrial Cloud, throughout Europe, 150 companies and research institutions cooperate. Total investment of all European partners is EUR 5 billion. The IPCEI Industrial Cloud is to combine different facilities on one basic cloud. With that, we have an independent processing of data across borders.
This enables industry with new opportunities for digital business models. Targets are modern cloud solutions with a high-performance offer for the storage, use, and processing of corporate data in Europe. SAP, together with other project partners, develops with other partners different reference architectures and software components, including interfaces for an open and highly interoperable cloud infrastructure. The project is a central component of the IPCEI Industrial Cloud. Large projects of this use usually can only start after a decision by the European Commission on funds have been agreed on. Due to the decision of the federal ministry, SAP can now start to invest in the project without the expected formal approval by the European Commission. The final EU decision is to be expected in the back end of the year. So we have to wait for this approval to discuss further details.
And finally, a project of this size is of strategic relevance for SAP. And it's also a matter of course that our activities in this sector aim to generate an appropriate return on investment. Next question, Inflation Reduction Act in the U.S. How do you respond to that? Are you going to invest further in the U.S., or is that program not suited to you? Well, we look at the geographic distribution of our investment. Based on our future growth, we will continue to invest in the United States. The Inflation Reduction Act impacts our decisions, but we also consider other factors such as the market potential, the availability of talents, the competition, and cost situation. So we don't make additional investment purely based on the Inflation Reduction Act. And I'd like to add one thing, that SAP benefits from the fact that the U.S. is our biggest market.
Many of our customers, General Motors, Verizon, and others start transforming towards electromobility, say, or green supply chains. And here again, our software is strongly and widely used. Now, AI. We have some catching up to do. We will have to purchase certain aspects. Mr. Asam, what is missing, and where would we like to add some things? Dominik, I'd like to answer that question. Well, I've mentioned it before. AI is used in our solution even today. And let me tell you that there's a high level of interest by our U.S. partners with SAP to have partnerships in the field of AI because SAP not only has a bunch of data, SAP understands the processes of many companies, and we run those processes. And AI can generate tremendous added value. So we as SAP invest in this field very strongly.
We will announce new partnerships next week during the Sapphire. Please bear with me that I don't want to jump ahead here. Rest assured that we focus strongly on this segment, and this will be the case for years to come. That was it from my side. Mrs. Jella Benner-Heinacher, you asked, why did I send a letter to the shareholders saying that the candidates for my succession couldn't be found complying with the original profile? What was the reason? Did no one want this job? I've mentioned my original idea was to find a successor in the supervisory Board, and the second idea was to find a German candidate, former SAP Board Members, or other potential candidates in Germany. One big problem is that after SAP, there's a big gap in Europe as regards IT. There are not so many candidates.
And someone who's done a great job in the automotive industry is maybe not the proper candidate for a software company. And in that respect, I changed my course and said, okay, let's look at globally, no matter what the mother tongue of the candidate is. As long as the candidate complies and fulfills all the requests, we'll have the person on the long list and later on on the short list of candidates.
Mrs. Jella Benner-Heinacher, you asked about the changes in the Executive Board coming and going at the Board level. Above all, when it comes to the HR sector, yes, you're right. Several times, unfortunately, we took a wrong decision when we selected the person. And as a result, there was a kind of controlled turnover or fluctuation.
Maybe we expect wonders from an HR director, and our ideas as regards the task of the HR director is something we are revising now to prevent future disappointments. We are very unhappy that Sabine is not willing to extend her contract. She joined SAP in January 2021, and on the 31st of 2023, she will have completed her three years' terms of office. But she leaves us not because it's a hot chair or because there's a challenge linked to the twin role. No. Sabine Bendiek played a key role on our way during the transformation. We had HR issues combined with technology, and Sabine was dealing with that. So she was our first Chief People and Operating Officer, and she successfully deduced new ways of working that helped us during our innovation processes.
We are grateful to Sabine that she fully fulfilled her contract until the end of the year to further push these initiatives. We know that Sabine didn't take the decision easily not to prolong her contract, but it is a personal decision she took to further develop and to take up other challenges. We respect this decision, and we thank her from the bottom of our heart for all she has achieved. Another question by Jella Benner-Heinacher. How is SAP prepared for the constant changes here? Please explain the processes behind us. Well, I'm not happy with that, quite frankly. But if for whatever reasons it isn't a perfect fit, then we have to sit down. You can modify the situation. You can look at the long-term solution or else think about a change.
We look at the talent base within SAP, and if a change becomes imminent, hopefully with a certain time period, then the supervisory Board and the Executive Board look at the potential set of talents at the global level, and we are confident that in future too, we will find leading managers for any Board positions that will become available, then Markus Kienle asked about the contract of Luka Mucic. Who initiated this? What were the exact reasons? Well, I can't tell you all the internal affairs here. The nomination committee addressed the questions and came to the conclusion to propose to the supervisory Board that we agreed to let Luka Mucic leave. That was unanimously approved by the supervisory Board, and then we talked to Luka Mucic and reached a mutual agreement. If you don't like the wording, we still have reached a decision with mutual agreement.
We're very grateful to Luka that he stayed another year without any reservations, without any negative implications, and I'm very, very grateful to Luka Mucic. Oh, I expected applause here. The contract with Luka Mucic ran until the end of March 2026. It was prolonged for the last time. Luka Mucic received a severance payment of EUR 9.6 million as listed in our remuneration report. A dditional payments were not made. Okay. My turn again. A question by Ingo Speich. What do you expect from your program, GROW? Well, in Germany in particular, we often rightly say that the mid-sized companies are the backbone of our economy, and it's essential for SAP as well because hopefully we can develop the next big players locally and globally. That is why, in terms of development, we focus very strongly on this market to have the right product as well.
Now we have a scaling product, S/4HANA Public Cloud, that enables the customers in very few weeks to introduce the software, a platform to digitize business, to grow faster, and to scale up. What's great with SAP here, we cover the business model of all industries, and we can support the companies all the way to becoming a big player because we have the right software for that as well. The beginning is made, and I think I'm speaking on behalf of Scott and Julia as well that we're very happy with the pipeline, with the contract signed, and we are very confident as regards to this field of business for the next years. Yes, a couple of topics. Earnings per share. That was a topic. Why didn't we communicate any guidance here?
We mentioned the high volatility from the valuation of the venture capital share at Sapphire Ventures. That's one component. And in addition, we have share-based compensation that is paid out cash. And if you have a cash payout, you have to book the share price development on a quarterly basis, which results in major volatility. And that means it's just not possible unless you do some crystal gazing. That is a good introduction to the topic of communication with the capital market. We want to do what we say and say what we do. And that is why it's best to focus on those things that you can control. You asked about certain things that might be done differently in 2020. Due to the volatility, we had to course-correct due to the cloud transformation where the mid-term planning until 2025.
Everyone knows that that's a long period of time. Lots of things might have happened. We had the corona pandemic, Ukraine war, a lot of things that heavily impacted the business development. Personally, as a new player, I thought it was quite surprising how well SAP sailed along the curve that's been announced. I'm not courageous enough to do some crystal gazing for years to come. There are too many vagaries. In future, well, apart from the updates for 2025, we'll have just annual forecasts and guidances. We don't want to go somewhere where decisions by the competitors will impact us. We want to be agile, and that is why we want to focus on the following year. You mentioned transparency of figures. I think SAP provides a lot of transparency. This transparency is complex. We have competitors. Salesforce was mentioned. They have U.S. GAAP.
We follow IFRS. We talked about stock-based compensation. Personally, I think it's surprising that in certain companies, it becomes a practice that stock-based compensation is hidden behind operating profit. I'm going to look at that. Other companies such as Microsoft don't do that, and we all know that the shares we pay out will affect U.S. shareholders and cash flow. That's been addressed too. Mr. Speich then addressed it. That needs to be at the focus of attention. If you look at the competitors and analyze the valuations of the competitors, it's surprising how strong the correlation between the valuation and the free cash flow per share is and its growth. If you look at forecasts, it's quite evident, and there are clear laws that apply here, and that is why we're going to focus on that topic as well. Cash collection was mentioned. Yes, you're right.
Cash collection needs to be focused on when we talk about free cash flow. Now, my turn because there were some questions regarding the customer promoter score, customer NPS. What were the reasons for the decline, and why did we change the method? Well, I'd like to answer these questions in one go. First of all, obviously, no one is happy if the customer promoter score decreases, and we look at this closely, and we analyze specifically the reasons and the actions to be taken. But still, it's important for me to say that a customer promoter score is a fairly volatile figure because what you do, you look at the figures of those who are neutral, those who are critical, and those who are in favor, and then those in favor, you detect the number of critics.
What's happening there is even if there are small fluctuations. Well, we had a small shift with less those in favor and slightly more critical. Even with these small deviations, the Net Promoter Score changes dramatically. If you look at the average value on a scale, the actual change is rather moderate. So that is why the Net Promoter Score has a stronger lever, so to speak. There are two other important aspects. First, it's interesting. If you look at the total figures, Qualtrics determines industrial benchmarks to look at the development over times, and they are influenced by the general sentiment, by what's happening in the world. We've seen that throughout the industry, in the Software as a Service sector, for instance, across the years of polycrisis, the Net Promoter Score decreased. There are external implications that are outside of our field of influence.
But clearly, for us, we're always observing closely what is it we can do to achieve improvements. What have we changed in calculations? In the past, we had a Net Promoter Score based on a wide-ranging invitation to all customers to provide answers, and with the return ratios, that's a natural effect. Quite often, from smaller areas in Concur, for instance, and the mid-market, the return rate is much higher than with the big players. And what's happening is that at the end of the day, we had over-representations of customers that do not reflect the actual distribution of our business. And that is one of the reasons we've changed the model. We want to make sure that our business distribution is reflected in the Customer Net Promoter Score. And we've explained this in detail in our reporting system.
The new calculation of this value, and the result was three, and we've adapted it following the new calculation. It's seven now. We compared it with our ambition, which we had over the past years. And as a result, we've defined the value for the next year. One comment on gross margin. This was asked as well, how the mix between private and public cloud impacts. Indeed, in the software as a service business and the Platform as a Service business, we have higher gross margin than in Infrastructure as a Service. So it's logic only that we want to grow faster in software as a service and Platform as a service. But you have to concede that in the private cloud, the margins are lower for the simple reason that the customer-specific expenses are higher. These are single-tenant solutions that are more expensive.
But you mustn't forget that for many complex companies, and I'm a former customer here, the step from an on-premise solution to the public cloud is just too far because there are so many specific needs that need to be covered. So private cloud is a kind of interim solution. But this doesn't mean that at the end of the day, you won't migrate to the public cloud. And we make major progress in these topics with RISE and GROW. We've heard the two. And in terms of margins, we see pressure on the percentage margin. But as regards the euros we generate, we achieve our targets q uite well.
And about artificial intelligence, Ms. Benner-Heinacher asked what SAP can achieve with it. And of course, as SAP, we see an extremely high potential in artificial intelligence. And we also see this as a game changer.
For one thing, as an internal factor, of course, we want to improve our development potential, but also help our customers for new business processes, new business models, enabling them. And now the thing is, we've been working with artificial intelligence continuously for a long time. We have more than 130 use cases embedded in our applications. And you can be sure that we will, of course, place a focus now on generative AI, the LLM model. And for instance, Concur Invoice Management, for example, has that. Last year, 40 million of invoices were processed with AI, which is an extremely high potential for our customers. Or if you look at the Smart Press Shop customer, there are two staff Members in IT.
They implemented the S/4HANA Public Cloud, HANA Public Cloud, and they use the continuous innovation, for example, in the digital factory through SAP, also to carry out a visual inspection using artificial intelligence. So these are nice examples of what we can do at SAP with artificial intelligence. Of course, looking forward, generative artificial intelligence is important. And we're working together with strategic partners. And to give you a feeling, we have more than 80 use cases that we have put together in our portfolio, and we are developing those. In addition to that, which is also important, I think, as SAP, we have a very high ambition in terms of reliability and trust. So we want to differentiate ourselves as a German company also in the area of AI. So it's important that we have the large European AI models. We want to embed this in European values.
And of course, we're looking forward to show the scenarios at the upcoming Sapphire. So you can certainly look forward to some surprising things with AI there. Two more answers on the compensation system. Ms. Kelly, you said the change of control clause, why are we sticking to it? And even pay a severance payment, even if no Executive Board mandate is touched. Usually, with a change of control, there's a strategy change involved. And this means that Executive Board compensation changes. Change of control clauses in contracts with Members of the Board will only have an impact when there's a termination for the rest of the term. And it is also limited to a period of two years. And on compensation, in this case, compensation report,
Mr. Kienle asked, a reader of the report wonders why there should be a positive factor when the development of the TSR is negative. In our long-term LTI 2021, we compare the Total Shareholder Return of the SAP share with the Total Shareholder Return of NASDAQ 100 companies. In case SAP outperforms that benchmark, there's a positive performance factor, meaning that comparing, or even if we compare to negatively, SAP as a whole may outperform the market in its development. In this case, however, the positive performance factor was limited to a maximum of 1.0. I have Mr. Kienle's rather technical question here. It was about technical disturbances when you exercise shareholder rights electronically and the liability threshold. The accusation was that this was gross negligence. Could you not apply a stricter responsibility standard? Now, there are always certain uncertainties concerning technology.
You just mentioned the negative experience with other companies at AGMs, so it seems prudent to stick to the legal requirements or the legislation, now there was a question about software licenses and maintenance. Indeed, our revenue in 2022 was going down 37%, which was intended because of the change of the business model, now with maintenance, it's important to understand that this will not disappear overnight, but rather will also be negotiated into the new cloud deals with customers, and the thing is, when we do this, for every EUR 1 of maintenance revenue, we can get 1 or 2 EUR of subscription fees, so this is really about potentials more than a downside for revenue development. There was one question. Are you planning a fixed investment into companies which will contribute to reducing climate change, like the Climate Innovation Fund of Microsoft?
Since 2013, we've had long-standing strategic partnerships with the Livelihoods Carbon Fund. And through this fund, we fund important climate measures and promote sustainable developments in developing countries. And overall, we have committed to invest EUR 10 million into the Livelihoods Carbon Fund. And on sustainability, how are you doing in terms of net CO2? In spring 2022, we announced that by 2030, we would be a net zero emission company. That net zero target includes the whole supply chain of SAP. Currently, we are already in the phase of achieving that. We are regularly monitoring the progress and the greenhouse gas categories and the necessary reduction paths and implementation measures. I would like to make an announcement. Hendrik Schmidt, thank you very much for your appeal. The AGM 2024, my last one, will be taking place here as a presence AGM. I have two more questions here.
One had been asked by Mr. Kienle what average financial results we expect over the next three years. I said that these financial results would depend on the Sapphire Ventures valuations and in the venture capital business. This is very difficult to forecast, so we cannot give reliable guidance. What we can say is that historically, we've been doing very well, and we've had pretty high revenue from this or high yield rates. Now, there was a question about inflation from Mr. Kienle. Can we increase prices? And what about our staff and payment to our staffs? Now, there has been more pressure than in recent years because of inflation. And there's also a EUR 1,500 amount that was paid as an inflation compensation amount. We paid that to our staff Members. And yes, in most cases, we have the option of increasing prices to our customers.
Historically, SAP has done this in a very moderate way. But given the extremely high rate of inflation, of course, we are compelled to charge those increases to our customers too. And otherwise, we cannot mitigate the cost increases that occur. How does the pipeline look for our large flagship customers that are moving to the cloud? While we don't foreca st our pipeline publicly, we do see very strong interest in the cloud from our large customers. From a regional perspective, there is a strong pipeline coverage across the globe. Specifically for large enterprises, our year-on-year cloud ERP pipeline is stronger as compared to 2022 or at the same time last year. The year-on-year pipeline growth is driven both in volume but also on average deal size.
For example, you've seen recent large customers that have announced they're moving to the cloud with SAP, including Lockheed Martin, HP, BMW, and Henkel, amongst many others. In addition to cloud ERP, it's great to see our business platform and technology, our business network, Signavio, are all showing very strong year-on-year pipeline growth for large enterprise customers. And finally, as Christian mentioned, the mid-market offering of GROW with SAP has already shown significant pipeline growth and significant expectations for higher growth in the second half of 2023.
Yep. One question I would like to answer. Part of it has been answered. It is about the contract with Luka Mucic and the termination. How high were the payments from the contract, but also the severance payment for giving up the mandate? Mr.
Until the end of the term on the 31st of March this year, Luka Mucic got his contractual money comprised of the short-term and the long-term compensation component. For the premature termination, he received EUR 9.6 million for the residual term of his original appointment as Member of the Executive Board up until the 31st of March 2026, as is printed in the remuneration report. Professor Plattner has just explained further payments are not planned. Ladies and gentlemen, if there are no further answers waiting, maybe we can continue with the request to speak. T he next contribution will come from Heinz Dieter.
Hello. Hello to everyone present here and people following over the internet. I'm a small shareholder. I live in this region here in the conurbation of Mannheim, and I'm not representing any other persons or institutions. So I'm speaking on behalf of myself.
Thank you very much for holding this AGM in person. This makes for better contact between the company, its customers, and its shareholders, and of course there are SAP staff Members, and there are a lot of people working backstage and in the back office, for example, to process the answers. I'm taking the liberty of making my remarks for a particular reason. At the last AGM that was held in presence in 2019, I asked questions, and somehow they got lost somewhere in the system. I would like to quote one from back then. CRM is described as a focus. Why is this so? Because it's always been important in the industry. Have there been deficits that were noticed on the part of SAP?
That encouraged me to stand here and to say, "Maybe now I will get an answer to the question," and hopefully, they will not get lost in the system again. The following questions I'm asking because the sales figures of the company and other successes presented outwardly, but also the internal figures. I would like to understand them all. Can you please give me an answer to my questions broken down by regions for 2021 and 2022, and also the old cases that still play a role? The location of Walldorf, St. Leon-Rot, as an SAP base, and then B, broken down by SAP SE Europe and SAP SE Global, respectively. How high is the expenditure for personnel and funds to deal with legal requirements at the local, federal, state, federal, or EU level?
How many pages do the rules and regulations include, particularly with regard to the EU, that apply to the company? Secondly, number of lawsuits against SAP SE or countersuits and the related lawyers' costs and number of pending lawsuits against competitors? Fourthly, number of admonitions or admonitory letters against staff Members and complaints against managers, each broken down by gender, and also lawsuits because of torts, espionage, or other crimes, and also terminations for good reason, and patent litigations and internal and external compensation paid to inventors and their financial amount and premiums for inventors and staff Members? Tenthly, number of events of internal SAP audits and what were the focuses of the audits and anonymous cases of whistleblowing incidents? Since this is rather complex and it has taken a long time, I'm offering the option that these questions be answered in written form within three months.
One remark on point number one. Because of overregulation on the part of the authorities, there is a trend of companies to go abroad: Romania, Bulgaria, Portugal, the US. SAP, with its size, can handle the regulations, but there is a large number of mid-sized companies where maybe five lawyers and tax consultants have to be paid to handle that tangle of regulations. And those mid-market companies are also SAP customers. There is a trend that companies are moving abroad. In Germany, there is a mentality of fear because of changes. So things are moving slowly, but they are moving constantly in the direction where Germany, as an industrial base and as a basis for business, will no longer remain attractive individuals. I'm sorry. An individual cannot do anything about that.
Hence, my proposal in the form of an urgent appeal signed by SAP staff and shareholders to be put onto the desks at Strasbourg, Berlin, Brussels. I would wish SAP the best of success for doing business in such a difficult environment. Thank you very much for your attention. Thank you very much for giving us the opportunity to answer your questions in the next three months. I will personally make sure that this time you will get answers.
The next speaker is Volker Fleck. Can I ask you to come forward? And after that, we will hear Fre derik Bresser and Julian Hendricks.
Ladies and gentlemen, I'm Volker Fleck. I'm also representing myself, that is, my own shares. I'm sorry I haven't got this on a piece of paper, but I've made a few notes. Two points I want to make here.
One is virtualization of the AGM, which has been discussed a couple of times today, and secondly, machine learning. Today, we're all seeing that a quantum leap is being taken in machine learning, and we have an idea of all the things that might be missing then. Computer systems will require more administrative or will take more administrative and planning tasks in companies. They will assume those tasks, and I would like the Executive Board to give an estimate what influence that machine learning will have. Will that have on the internal processes at SAP? For example, the area of development and particularly HR, because the staff situation is obviously immediately affected. That development of AI processes will be more revolutionary than the Industrial Revolution, and also, the discussion about CO2 and other things will probably receive a lower priority at some point as a result of that development.
So I think that in the history of a culture of humanity, we are going to face a transformation, a change greater than anything politicians have seen so far. The philosophical question of what it is to be a human being in relation to a machine with artificial intelligence. And this is a question that IT people should think about before they go to the market. They must be pioneers in philosophical thinking. What does it mean for society? What does it mean for companies if we compete with thinking machines? SAP should address this, and I would like to have an answer to that question. So in the broader sense, this is also a question of social responsibility. Companies have a task to fulfill as part of society. And if they do not take that responsibility, society will be undermined and break down.
So we need to think about what this means for products and for applications. Now, about the virtual AGM format, we have seen two years of intensive video conferencing, and we all know that there is something missing. It is never a full replacement for meeting people face to face, for meeting people in person. So this annual general meeting of shareholders is the most important thing of a publicly listed company. We need decisions to be taken by people, by humans. And humans take decisions after exchanging experience, after having discussions, maybe over a cup of coffee or maybe with a pretzel. But it is important that people talk to each other. And in order to arrive at sound decisions, we need to have the personal exchange, like at this AGM. That personal contact does not happen at virtual AGMs.
A virtual AGM is worth less than a real AGM, maybe even a hybrid AGM, but one where you can be present physically. Also, with regard to society, the development of ChatGPT and other systems is an assignment to society, namely to promote human contact, because what will remain after machines will take over making decisions? Especially in bodies, the personal presence, the personal contact must still remain possible. I recommend on the items to vote no on 11A and B. That is not to make it possible to hold virtual AGMs in the future, but rather stick to the format of this year and, as we heard, next year. I feel that the audience here in the room is also very much in favor of that, of having AGMs with a physical presence.
I have another short question about the subtraction method when we vote. If I understood the remarks of Mr. Plattner correctly, if people do not vote, this will automatically be counted in favor of the recommendations of the Executive Board. I would like your legal expert to check whether this is legally valid or legally possible, because it's possible that some people who lose their voting card or who are not present by accident will always be interpreted as having voted in favor of a proposal from the Boards. I do not think that this is legally quite correct. Thank you very much.
Thank you very much. Well, I've got a new attendance counter. Let me report the current status of the share capital of the company amounting to EUR 1,228,504,232, coming in the same number of non-par value shares.
The attendance at today's AGM is 806,613,515 non-par value shares, carrying the same number of voting rights, which is equivalent to 65.66% of the share capital. Beyond that, for 93,526,596 votes, written ballots have been submitted, which will be later on added to the voting taking place here on item 2.1 and the respective management proposals. Thus, 899,639,111 non-par value shares are present or are represented by written voting, which is equivalent to 78.23% of the share capital, and we now continue with Mr. Frederick Bresser.
Good afternoon. I speak on behalf of my own shares, and I've got a follow-up question to two questions also already asked by Mr. Kienle from SdK. Especially when I looked at the balance sheet, I noted very much that the good operating income is massively diminished by the fairly negative net results of what the impact was.
You've already stated that this is also due to the valuation of venture capital and that there was a massive meltdown, whereas due to NASDAQ and other indexes, it had increased massively. Nevertheless, I've got the following question. Now, in the future, can you be a bit more specific in explaining this in your balance sheet and the annual report? Because this is an amount which has fallen by EUR 3.5 billion compared to the previous year. And for the sake of investor relations, I think it would be worthwhile to elaborate more on the reasons of this dramatic meltdown. So just for the purpose of investor relations, could you please be more specific in your explanations of what this impact has and which risks and forecasts you can make on this?
I know that this is not all we see and that you cannot be fully spot on with your forecast for next year. I fully understand this, but I think for the shareholders, it would be nice to be able to understand what exactly has happened here and which risks you see going forward. And one more thing, which I also noticed, is the following: employee satisfaction. And here, traditionally, SAP has been fairly good. I looked at the data myself. Historically speaking, they're quite good. But over the last couple of years, this EEI dropped massively from 86 in the year 2019, I think, down to 80 points last year. That is a significant slump. And I looked it up again in the compensation of the Executive Board Members. It's part of their bonus system. And now, I try to fully understand it.
There's a certain target range for a certain criterion, and in that case, the Executive Board compensation will include a payment for that criterion. Now, what is the minimum EEI for next year? In other words, what's the target range for the EEI next year, below which it should not fall regarding the Executive Board's compensation? Now, that would be nice for me to know. Apart from that, I also would like to thank you for holding this in-person AGM, and basically, I also would like to emphasize that investors do have confidence in SAP and the share price, and that the share price of the last few months has been quite positive, and yes, I hope that we'll meet again in person next year. Thank you very much.
The next speaker is Mr. Julian Hendricks. The floor is yours.
Hello and good afternoon.
Now, first of all, I would like to thank the Executive Board and the employees for their good work last year. Now, my question: we have heard the term cloud very often, which is very much due to Amazon Web Services. And how much did you pay as a company for Amazon Web Services in the last fiscal year? Thank you.
All right. We've got some more answers regarding succession planning of Supervisory Board. Question by Mr. Hendrik Schmidt: which are the criteria that were applied to search for and identify candidates? How many candidates were shortlisted at the end of the day? All right. What were the main reasons speaking in favor of selecting Mr. Renjen? As usual, when we search for new Supervisory Board Members, we look at the potential criteria.
The starting point here always is our competency profile for the supervisory Board and other considerations as to which specific skills, know-how, and expertise are required on the supervisory Board. Now, during our last search, we added also the criterion of finding a candidate which does also have the perspective of taking over the chair position of the supervisory Board. Therefore, other criteria were added that we consider important for the chair of the supervisory Board, for example, that that person has already previously headed a larger company and is also familiar with the software industry. All in all, there were many candidates which the nomination committee looked at and also had meetings with. Now, that resulted in a final shortlist of three candidates. Amongst them, the nomination committee then opted for Punit Renjen. The supervisory Board unanimously adopted the recommendation of the nomination committee.
In my address, and also by answering the previous questions, I already provided details on the final decision. It was basically the personal profile of Mr. Renjen and also his experience and strategic know-how in his previous roles, which convinced us that he is the right person. Please explain to us how that change in the chair of the audit committee occurred last year. Jennifer Li took over the chair from Gunnar Wiedenfels in the audit and compliance committee. The background to this was that Gunnar Wiedenfels had asked for leaving the position of a chair of that committee, which was very requiring a lot of effort because he wanted to intensify his efforts on WarnerMedia, which was carried out in 2022.
For that reason, the supervisory Board appointed Jennifer Li as the chair of the audit and compliance committee, and Gunnar Wiedenfels has remained there on that committee as a regular Member. Mr. Hendrik Schmidt asked which specific expertise does Ms. Li have in the areas of accounting and year-end auditing regarding the specific requirements of SAP to be drawn up under German commercial code? Jennifer Li is chair of the audit and compliance committee of SAP supervisory Board, and she has got comprehensive know-how in the area of accounting and year-end closing and auditing of global companies. Her expertise, on the one hand, is based upon her long-term previous activity as the CFO of Baidu Incorporated and her numerous previous positions she held in the global financial organizations of the US companies, General Motors, amongst others, as the CFO, General Motors, China.
On top of that, she also gathered long-term experience as a member of the Boards of directors of numerous publicly listed companies. And thus, she is excellently qualified for the task of the chair of the audit and compliance committee of SAP as a global company. In addition, Jennifer Li will be supported by the other Members of the audit and compliance committee, especially Gunnar Wiedenfels and Rouven Westphal, who also have excellent know-how in the accounting areas. Hendrik Schmidt asked, please elaborate on supervisory Board Members are to participate in virtual annual general meetings in the future if they are held. Now, if a virtual annual general meeting is held, then our supervisory Board Members will fundamentally be available in person.
Beyond that, in the future, they will also be given the possibility to participate in an AGM via video and audio in order to avoid any disproportionate traveling costs. But that does not apply for next year anyway. Then there was a question: how high is the share of suppliers which you incorporate in your climate targets 2030? Now, we intend to include 100% of our supply chain by 2030. Purchasing products and services is a large share of our carbon footprint and our net zero target. For that reason, purchasing is a key element of our net zero program. Initially, we intend to focus on those suppliers with the largest CO2 footprint. Now, as part of a comprehensive supply chain engagement program, we will look at the entire supply chain, and we will also focus our purchasing activities and organizations in this way.
Please also bear in mind that significant business potential will arise from this for SAP because we will thus help our customers keep their own emissions under control and report on them within the auditing requirements. Thus, our influence goes far beyond our own carbon footprint. Next question: which are the areas where you see the need for acquisitions? Well, as already stated in my question to Ms. Jella Benner-Heinacher's question of future acquisitions, we see a major organic growth potential for SAP. Our existing solution portfolio and our new developments are very strong. Nevertheless, acquisitions can be a tool to implement our strategy. And we continuously evaluate the market in order to be able to further strengthen the core portfolio of SAP if necessary. Due to the outstanding organic growth prospects, we can do so in a selective and very calm manner.
What is the current status of customer migration regarding SAP S/4HANA? At the end of the first quarter 2023, about 22,500 clients had opted for SAP S/4HANA. Migrating our clients, thus, is taking place speedily and in line with our expectations. Well, I've got another question from Mr. Speich, where I can provide more details on. It was a question about the acceptable degree of debt. Now, we do have a single A rating from both key rating agencies, S&P and Moody's. And these rating categories are also the right ones, the appropriate ones for us in our view. And within this rating category, we have significant financial leeway and could also use that leeway for acquisitions if necessary. As of 31st of March 2023, the net debt was EUR 1 billion. And we also tend to return EUR 3.1 billion of debt by serving respective bonds.
And the equity ratio is 59%. Now, the various questions by Mr. Schmidt. Now, that was about the question of share-based compensation, which is on a very high level. He said in fiscal year 2022, total share-based compensation for continuing business, which means without Qualtrics, was EUR 1.4 billion. And all in all, if you also include Qualtrics, then it was EUR 2.6 billion. That means that EUR 800 million of share-based compensation is accounted for by Qualtrics. And of course, that's also one of the benefits of the sale of Qualtrics, that that cost will be avoided. And even if it had decreased, it would have been quite significant. For 2023, for share-based compensation, we expect a range between EUR 1.85 billion and EUR 2.25 billion, depending on the share price development. And the share price has developed very strongly in the first quarter.
That's one of the key drivers for this fairly high number, as I have explained before. As typical for our industry, we plan to stay in the range of 8%-10% of total revenues to be paid out as share-based compensation. We will gradually then reduce cash compensation in order to remove volatility from the share price. Now, there was a question about the cash flow, namely which cash flow was generated. It is indeed true that after high cash flow levels of EUR 26 million and then next year EUR 5.9 million, that has decreased slightly in 2021. Here, of course, the exit from Russia played an important role. There was a lot of down payments we made to so-called hyperscalers. There was also the question of what revenues we generated with AWS.
In the upcoming years, we expect a further and continuous improvement of the free cash flow, primarily driven by the improvement of the operating profit. There was once again the question about ambitions for 2025. Here, I kindly ask for your understanding that we cannot comment on this today. We already announced that next Tuesday, on May 16th, as part of our conference for financial analysts, we will comment on this again. Then our future Chair of the Supervisory Board will also have been elected, hopefully. Then there was a question about dividend strategy, which we do not intend to change. Then may I comment on the question of employee satisfaction and the development of that index? Now, Mr. Schmidt had asked about the employee satisfaction and which specific actions we want to take to reach that rating of 80% in the future.
By the way, I also liked the fact that many speakers also appreciate the contribution of our employees to the success of our company. And that is true. We all know how important our employees are in achieving that great success of the company. And that's why employee satisfaction is very important to us. Now, we have seen a development in the employee satisfaction index via our unfiltered survey. However, 80%, which was this year's result, or actually last year, is still a very good percentage on the industrial level and as a benchmark. Nevertheless, we look at the feedback from all of these surveys in order to draw our lessons from this, learn from this, how we can improve things and how we have to reposition ourselves in order to ensure employee satisfaction and further ensure their full commitment. Now, one more thing on this.
As with customer satisfaction, when it comes to employee satisfaction, we also do have a certain external influence, so if you look at the development in the industry, so if you look at the benchmark results, because many companies perform employee satisfaction surveys, then we can see that during the pandemic, the employee satisfaction rose very strongly, and now, during these periods of poly crisis, coming out of the pandemic, and then we see a new crisis and the rate of inflation, and so there's an external factor having an influence, but of course, there are many things that we've got under our own control, and of course, the transformation of SAP also requires us, especially us, the Executive Board Members, to make sure that in line with our strategy, we intensely discuss our strategies in a close dialogue with our employees.
And this means we have to communicate very closely, even more closely than before, to make sure that we see a further increase of empowerment of managers and also employees. And these are also the main actions that we have identified. And there's a range of further actions for which we have designated teams to implement respective actions. And that means we are working intensely on this, and we will keep working on improving the employee satisfaction index. Now, there's one answer I can provide, Mr. Speich. You asked, when will the long-term compensation component also motivate the management to achieve improvements, which the capital markets have been long asking for? Now, today, the new compensation system will also be put up for a vote. And we believe that new compensation system will meet these needs and requirements.
That new compensation system also includes changes to the long-term compensation component, the so-called LTI. These changes also are a reflection of our meetings with investors. They also aim to meet requests and demands of the capital market. For example, the integration of ESG targets into the long-term incentives and the elimination of the so-called Retention Share Units. Once again, I believe that thus the LTI will be linked even stronger to the success of the company, which, of course, is also in the interest of the shareholders and investors. Now, I've got one more question on AI. If partnering up with other companies is not sufficient, will you then also consider taking over young, promising AI companies? Do you have any of them on your screen? Or in other words, what is the general direction of your M&A ambitions?
The question about our M&A ambitions and the possibility of taking over companies in the AI segment has already been answered when we answered the questions of Ms. Jella Benner-Heinacher.
Question for Mr. Schmidt regarding the cloud business model transformation. It's progressing. What is the impact in the current economic environment? Are SAP customers increasingly postponing their investment decisions? Firstly, we're going through a very pleasing progress of our cloud business model transformation. In what is very difficult geopolitical macroeconomic environment, we did successfully complete the fiscal year in 2022, increasing our revenues by 5% at constant currency to almost EUR 31 billion. This positive trend continued in the first quarter, and we were able to increase our revenue from continuing operations by as much as 9% at constant currency to approximately EUR 7.5 billion.
As I mentioned earlier, well-known customers such as the BMW Group, Henkel, also companies such as Dolce & Gabbana opted for RISE with SAP solution in the first quarter to transform their business processes completely to the cloud. You can see from this that our solutions are in demand. They're in demand even in times of difficult economic environments. We currently see no increase in the postponement of investment decisions as our solutions do help our customers to become more agile, particularly in times of crisis. Wir warten noch auf weitere Antworten. We wait for more answers from the back office. Above all, when it comes to the sheer size of our back office. We have Asia , Thailand's back office.
Well, I used to be part of the back office in the past. But I guess 50 people, that's my ballpark figure. Ja, als Überbrückung stelle ich mich. Well, I'd like to ask other further requests for the floor while we wait for the answers. Do you have the time now? If that's not the case, we wait for the remaining answers. Ich werde jetzt gerade noch gebeten. I've been asked to make a comment because not only Mr. Schmidt asked about employees' satisfaction, but also Mr. Kulinski. I hope Mr. Kulinski that answers your question too because I have no further comments. Oh, there's another request for the floor. Dr. Juergen Weider.
Hello, I'm Juergen Weider. My question will speak or will be interesting for many shareholders. It's about health. The situation of SAP after three years of the pandemic, to understand that sector, I'd like to have specific figures. Average number of sick days per employee and year for Germany and for the entire company as of 2015.
That was it. If you can't calculate this quickly, you can send the answer later on under the condition, however, that any shareholder who is interested in the answer can get this answer. Well, we publish it on our homepage. Well, we have one answer. We've counted. We have 40 people in the back office. Es gab eine Frage. There was one question regarding CRM, possible deficits in the past and the future of CRM. Well, I can answer that question personally. I think the strength of SAP is our wide portfolio. And as I've said at the beginning, many customers use our commerce solutions, their digital online shop, but also with a possible link to our supply chain solutions.
If you purchase something online, you expect that ideally you get the delivery the next day. And this consistency is something SAP can provide.
And we can safely say that it took a year or two to ensure the integration, to make sure that these data flows run consistently, and that we have this one view to the consumer. And we have made major progress here. We've done our homework. And in combination with AI and other innovation, we are well positioned now. We are well prepared for the future. And we have great expectations regarding our CX portfolio. And we also invest in that field very strongly, so. A comment on Mr. Dieter's question regarding the overregulation we're being faced with because that affects the finance sector in particular. As a result, we see the need of many customers to digitize and digitalize a lot of activities. And we try to help that. And it became clear that there are more and more requests from this area.
But from your detailed questions, we've learned how many years back we have to report our figures. That is a topic where we at SAP, well, benefit from that because we can help customers to address this overregulation and to live up to all the regulatory requirements. Okay. We also have the question regarding machine learning and the implications on internal processes as well. First of all, great approval here. This technology will intensely change all aspects of all our lives. And it will also impact the way we work at SAP. I guess that was the direction of the question. We can look at the development and talk about that. As Chief Technology Officer, I can comment on that. Of course, we intensely work on how we can improve the lives of our developers, how we can better support them.
We always have to look at the customer's perspective. How can we be faster and better to fulfill all the many wishes they have? You also mentioned the societal responsibility. It's always a combination between human beings and machines. As societies, we've tackled many challenges quite well. In other areas, we still have to do some work. Let's look at the pocket calculator. I mean, people were worried that people can no longer calculate. But we still teach that in schools. But still, pocket calculators are being used and computers to do your math homework, for instance. And like in many other innovations, this will apply to AI as well. Internally, we are running prototypes to support our developers when it comes to expand SAP systems. That happens in my department and in Mr. Saueressig's department.
The question was whether we are going to introduce some of the AI innovations in Orlando. Yes, we'll do that. Coming back to the development, in our joint keynote, which we will have, we will show how the development, I mean, even if you're fast, you can reduce it from two hours to a couple of minutes. That makes customers happy. Many customers are on their way to S/4HANA. But for their specific requirements they still have, they want to expand their system. That can be done much faster and much easier. It's always a combination of man and machine. We have to learn. I mean, you've addressed risks, and you asked what's missing. There are a lot of risks involved, for sure. We work with experts, internal experts.
We can be proud of the fact that we had established AI ethics Boards with internal and external experts to look at the risks. Thomas, maybe you would like to add a word while we wait for other answers. Yeah, as Juergen just said, social responsibility is really essential. As SAP, we want to stand out due to the reliability and trustworthiness. That's one of the reasons why we work with the Fraunhofer Institute, very close to research, so that the models we used ensure this transparency and responsibility. We are pioneering this here. We'll showcase this at the SAP Sapphire. As Juergen said, it's not a question whether it's a duel between man and machine, but it's a duo. We have scale matters further by using AI. We have to be proactive here because at the end of the day, innovation makes progress.
We want to leave an impact here with the European and German values. That is why it's all the more important to be at the spearhead. We can make a contribution here. When it comes to this breaking point in cultural history, I think as a society, we have to be prepared for that. We have to include education and training and cover that. We're working on that together with politics. We try and provide support here. Social responsibility is essential for us. We provide the best possible support. Let me add one sentence here because the question was whether we are courageous or rather hesitant when it comes to AI. We want to be courageous. We want to boldly go, but to assess the risks and mitigate them.
And that's the best possible way, in my view, which we see for SAP, for our customers, for you all. So remain excited via the social media and our website. You're here and read more about SAP and AI. There was a question by Mr. Schmidt regarding the non-compete clause of Sabine Bendiek, who gets compensation payment for one year after leaving the company. And the question is, what is it all about? Well, this post-contract non-compete clause ensures that for 12 months after leaving a company, no one takes up a position that competes against SAP, with that we protect SAP against potential damage. And for that period of time, the Board Member will get a remuneration, which is 50% of the contractual payment of the past three years. And should the Board Member find a different job during this 12-month period, the payment will be offset accordingly. Right.
The next question: bidding farewell to experience management. Did you want to bid farewell to something Bill McDermott introduced? What does that mean for CRM? What's the current market situation of SAP? What about the market share and revenues? What's important to understand here is that divesting Qualtrics doesn't mean that we give up the close partnership. SAP and Qualtrics remain connected due to a strong partnership. In future, experience management market can be serviced with the leading solutions. As a result, we don't expect any negative impact on the CRM business because that is a central element of our customer experience solution portfolio, which in turn is an integral part of the SAP strategy. We have a clear best-of-suite approach with a focus on integration and innovation. Our solutions here contribute $1 billion every year to our profit with that.
SAP is one of the leading providers in this segment. Will we announce some of the planned partnerships at the SAP Sapphire next year? I think that refers to AI, I think, the answer, as we've just heard. Artificial intelligence will be one of the key focuses during the SAP Sapphire next week. In the context of this event, we will also talk about planned partnerships. And the last question, what are the specific measures you plan to improve customer and employee satisfaction? Will SAP also offer on-premise solutions at fair conditions and actively support it? Answer. Maintenance for SAP S/4HANA is guaranteed until 2040. That's another 17 years. That's an unheard-of period of time in the market. For customer, that is a sure basis and security that they can expect security patches, localization, and support, and that they can make the most of that.
As the sole provider in the market, we offer the choice between on-premise and cloud. Over the past years, however, we see in the S/4HANA customers a clear trend towards the cloud since the benefit in terms of security, scalability, speed of innovation, resilience, and total cost of ownership are clearly perceived by our customers. As long as there's still a sufficient demand for the on-premise product, we will maintain this offer. And briefly on that here, but often the question arises as regards the extension of maintenance of legacy systems. This vision for SAP HANA of on-prem, and we agree this until 2027, but not longer because you have to understand that this is a tremendous maintenance and localization work for SAP. And with this offer here, we stand out clearly against the competitors.
But we also have to make sure that our R&D invest is focused on the future. And the future rests in the cloud. Right. So there are no outstanding answers. That is why I'd like to ask if all questions have been answered. Sorry. I've just heard there are more answers coming. More answers are being brought here. Ja, wir warten vielleicht einen Kommentar, weil die Frage gestellt nach dem genauen Umsatz. We just wait. I mean, the, the turnover with Amazon Web Services. I have to ask for your understanding for confidentiality reasons. We can't communicate this. But since we're moving to the cloud, it's considerable some. The development of finance result was addressed again by Mr. Bresser. Can I repeat what I've said before? That due to the nature of the Sapphire Ventures, we can't provide a forecast here that is truly reliable.
[Foreign language] Now, briefly, coming back to the question, Mr. Fleck, you said you like to hear what machine learning, what inference machine learning will have on development and HR. Well, first of all, more strongly than for others. This is for us a tremendous opportunity, but also something that requires a lot of awareness of potential risks. Smaller large language models are being used already. And in our product, we offer more than 130 AI functionalities across the entire value chain in our portfolio. And they are used by a whole number of customers quite successfully. So, some example, Concur Invoice Management, with the help of AI functionalities, invoices are automatically processed. In 2022, more than 40 million invoices were automatically processed.
And with that, customers and also internally, because we use our own software as well, we can do without a lot of manual work. In HR, we see a lot of potential applications for AI, ranging from support of transactional activities in the HR, for instance, the processing of tickets or query in the field of HR and our shared service centers, all the way to ensuring that this subconscious bias can be eliminated when we talk about recruiting processes. There are many options also to help applicants to better understand what kind of potential jobs are best suited to their qualification profiles. There are tremendous opportunities here. So, in the sum total, we see there's something that will help us to scale up. So, if you ask the question, do we talk about the removal or do we need less people?
No, we think that it will support productivity in the daily business for many employees, and it will support decisions. Generally speaking, we at SAP believe strongly in the potential of this topic. And at our Sapphire event next week, we have a lot of interesting insights in the current development scenarios. For us, it's an exciting topic, and for our customers too.
Question on the subtraction procedure from Volker Fleck. Ihr Verständnis ist grundsätzlich richtig. Basically, your understanding is correct. In the subtraction method, only the number of abstentions and votes are counted and subtracted from the total number of votes. This is a usual method, and it's also legally valid. There was a question from Mr. Hasser. Target corridor for the Employee Engagement Index. What is the target corridor, and how low can it drop? And what is the minimum value under which the index should not fall?
In 2022, the bottom value of the corridor with the Employee Engagement Index was at 78%. Our performance indicators and the target values are based on internal budget planning and external guidance for the respective fiscal year, and the target curves for 2023 will be published after the publication report looking back, but please understand, we cannot do this during the running fiscal year. Also, [Foreign language] .
We have answered some more questions now, and I hereby ask, have you all received your answers? Have all answers been given? It looks like that. With that, we can move on to the voting. There is no new attendance count. Need to sort my papers. I have no more requests to speak on my list. Does anyone else wish to speak? Good day.
I did not request to speak beca use this is a personal thing between me and Professor Plattner in the context of his foundation. If he will give me seven minutes later on one-on-one, I will be satisfied. If you wonder what this is about, it's the context of irrational numbers and a question concerning that topic. Irrationale Zahlen, stimmt das? Irrational numbers? Mathematisch, also ja, mathematisch auf Englisch auch? Ja, danke. Okay, I have no more requests to speak. So this is final. I declare that there are no more requests to speak. Am I right in assuming that all questions from the floor have been answered? I need to ask this a couple of times. This is on purpose. That is the case. So, for the record, all questions from the floor have been answered. I'm now closing the discussion on all agenda items.
Now, the attendance report is still the same. Ladies and gentlemen, in just a few minutes, we will come to the votes on the management proposals in respect of agenda items two to eleven, including sub-items A to C in item eight and sub-items A and B in item eleven. We will take all of the votes on the management proposals for items two to eleven on the agenda at a single pass. I will now explain the voting procedure here in the hall again. The vote here in the meeting area will take place with the help of tablet computers and the voting document that you were handed in the entrance area. The voting results will be determined using the subtraction procedure in which only the no votes and abstentions are collected and counted.
In other words, you only have to participate if you wish to vote no on one or more management proposals or you wish to abstain. The yes votes are neither collected nor counted. Rather, they are calculated by subtracting the no votes and abstentions from the current attendance count. Our employees will now bring the tablet computers around to your seats. By scanning the code on your voting document, the voting procedure will be activated. The agenda items requiring a vote will then appear on the tablet's display. You can then enter your no votes or abstentions yourself on the tablet computer. Alternatively, you can communicate your vote decision to one of our employees, and they will enter your vote in the tablet computer for you. The employee will then show you the vote entered on the tablet computer for confirmation.
Please check your vote carefully and then confirm your vote on the tablet computer screen. The tablet will then display a message confirming that your vote was cast successfully. Please note that once a vote has been confirmed, it cannot be changed. I now advise all shareholders and proxies in the official meeting zone that votes are cast here in the main hall only. Therefore, if you are against one or more of the proposals that are now before the meeting, or if you wish to abstain, please come to the main hall now to vote. Once the voting begins, raise your hands to summon one of our employees and have your voting document ready.
I would like to emphasize once again that with a chosen method of voting, any shareholders or proxy, any shareholder or proxy who is present in the official meeting zone and who does not participate in the vote is voting in favor of all of the management proposals concerning items two to 11. At this point, I would also like to advise those shareholders following the AGM on the internet-based shareholder portal that they must now complete their voting either by appointing and instructing the companies' proxies electronically or by casting their vote electronically by means of the shareholder portal. The voting options provided in the shareholder portal are only available until the beginning of voting here in the main hall. Please also note that the subtraction procedure is only used here in the hall.
Therefore, shareholders following the AGM on our shareholder portal who wish to cast their votes electronically or appoint and instruct companies' proxies there must please click the yes box in the shareholder portal to vote in favor of a proposed resolution. I would like to inform shareholders who appointed employees of the company as their proxies that the proxies present will cast your votes by releasing your voting instructions as they have been entered in the IT system. On release, the instructions flow into the vote counting system and are reflected in the results. Some of the institutional investors and shareholders' associations have used the facility we offer to have no votes or abstentions pre-entered in our computer system. Votes submitted by written or electronic postal vote are likewise entered into our computer system and reflected in the results.
To help ensure that attendance counts are accurate, I would kindly ask shareholders and proxies not to leave the official meeting zone during voting. I'm now calling for votes on the management proposals in respect of items two to eleven on the agenda. The wording of the management proposals for items three to eleven is the same as was published in the announcement in the German Federal Gazette, the Bundesanzeiger, on March the 31st, 2023. In the interest of avoiding repetitions, I refer you to this announcement. The wording is also provided in the invitation to this AGM published on our website. I have already referred you to the amended proposed resolution for item two earlier. With regard to agenda items three and four, I expressly draw your attention to the voting exclusion in section 136 of the German Stock Corporation Act.
A simple majority vote is required for the resolutions in connection with agenda items two to five and eight and nine. A three-fourths majority vote is required for the resolutions on items six, seven, ten, and eleven. Ladies and gentlemen, we will now start voting. From this point, shareholders who have appointed and instructed proxies in our shareholder portal cannot give or change voting instructions. The option to submit votes electronically via the shareholder portal also ends now. I now put the management's proposed resolutions on items two to eleven to the vote. All shareholders and proxies present today who wish to vote against any or all of the proposals made by the management for items two to eleven, or who wish to abstain on any of them, please go to the main hall.
Once there, please raise your hands to summon one of our employees who will bring you a tablet computer to cast your votes. This is really redundant. I would ask our employees to start collecting the votes now. I declare that the entering of votes is slower than making a cross on a piece of paper. So we'll use artificial intelligence at least in the counting. First of all, I apologize for this improvement with the iPads, which is not an improvement. We'll see what we do next time. I didn't know, so I will take responsibility for not having been informed properly. Ladies and gentlemen, has everybody present in the meeting area had the opportunity to vote, particularly all those shareholders and proxies present who wish to cast a no vote or an abstention, had the opportunity to do so?
I see that this is the case, and I'm closing the voting now. I will announce the results of the voting as soon as I have them announced. This should be fast, shouldn't it? If you let me, I will just give the percentages of the majorities of the voting. The details of the voting results you can find at the speaker's table, and they will also be published as soon as we can on our webpage. And the notary public, please quiet. I will also give the notary public a printout of the detailed voting results for his minutes. [Foreign language]
I have been asked to say again, ladies and gentlemen. I now have the results of the voting because I do, so with your permission, I will just announce the percentages of the majorities of the respective votes, and the details of the voting results are available either at the speaker's table, and they will be published on our website as soon as possible. Also, I will hand the details of the voting results to the notary public for the record. Ladies and gentlemen, the attendance count has changed. The latest capital, EUR 1,228,504,232, divided in the same number of no-par value shares, 806,422,077 no-par value shares are represented with the same number of votes corresponding to 65.65% of the capital stock, and as already said, 93,048,101 televoting shares, 899,470,178 no-par value shares are present, all represented by postal voting. 73.22% of the capital stock are represented by votes.
The AGM has voted. I'm sorry, who's talking there? It's distracting. All proposals by the Boards on agenda items 2 to 11 have received the necessary majority. The majorities are item 2, resolution on the appropriation of retained earnings from fiscal 2020 to 99.61%. Good result. Item 3, decision on the formal approval of the acts of the Executive Board in fiscal 2022, 99.78%. Congratulations. Item 4, resolution on the formal approval of the acts of the supervisory Board for fiscal 2022, 99.75%. Thank you. Item 5, resolution on the approval of the compensation report for fiscal 2022, 85.25%. Item 6, resolution on the authorization to acquire and use treasury shares pursuant to Section 71(1) number 8 of the German Stock Corporation Act, with possible exclusion of the shareholder subscription rights and potential rights to offer shares, and the possibility to redeem treasury shares, 93.86%.
Number 7, resolution on the authorization to use derivatives to acquire treasury shares in accordance with Section 71(1) number 8 of the German Stock Corporation Act, with possible exclusion of the shareholder subscription rights and potential rights to offer shares, 95.36%. Item 8, election of supervisory Board Members, Jennifer Li, 91.65%. Dr. Qi Lu, 91.60%. And Dr. Punit Renjen, 99.21%. So that applause applies to all three of them, I'm sure. Number 9, resolution on the approval of the compensation system for the Executive Board Members, 92.80%. So clear progress. Number 10, resolution on the compensation of the supervisory Board Members concerning the granting of additional compensation for the Lead Independent Director under amendment of Article 16 of the articles, 98.36%. Congratulations. Thank you. 11A, addition of a new Article 28 to the articles of incorporation to enable virtual general meetings of shareholders, 85.30%.
And 11B, a new paragraph, new Article 28 to enable virtual general meetings of shareholders, 96.35%. Ladies and gentlemen, this takes care of today's agenda. I hereby close the meeting, and on behalf of the Supervisory Board and the Executive Board, thank you very much for your participation. I'd also like to thank the Executive Board and SAP's employees, especially those who helped ensure that this meeting ran so smoothly. The meeting is now closed, and I wish you all a safe journey home.