Good morning, ladies and gentlemen. I'm pleased to declare the annual general meeting of shareholders of SAP SE open. As required by the company's articles, as chairperson of the Supervisory Board, I'll be presiding over today's meeting. I welcome the shareholder representatives. We are happy to see that so many of you have accepted our invitation. I also would like to welcome our guests, among them, especially the representatives of the press, whom we are grateful for their objective and unbiased reporting about our company last year. As usual, I must first of all cover the formal aspects of the organization of this meeting. The members of the Executive Board and the Supervisory Board are all here except for Dr. Erhard Schipporeit, who sends his apologies for his absence at today's meeting. Dr. Ulrich Hoffmann, Notary Public, is going to take the minutes.
He's a member of the Heidelberg Notary Office. Welcome. Today's meeting was called with due notice in accordance with legal requirements, the provisions of the articles of incorporation. Notice was published in the "Bundesanzeiger", the German Federal Gazette, on the 4th of April 2016. A copy of the notice is available for inspection, will be annexed to the minutes. All notices required for convening this meeting were properly issued. No motions or candidacies were submitted by shareholders of the company. 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 training hall opposite the entrance area, where you find the catering services, the stairs leading to the galleries, the spectator stairs, and the first floor, where there are more catering facilities.
This is the attendance area. The meeting will be broadcast throughout the official meeting zone via loudspeakers. There's also a big screen in the training hall on which you can follow the meeting. There's room enough in this hall. The attendance register is computerized and is constantly updated. There's a terminal of the speaker's table where you can inspect the register at any time. If you want to leave the shareholders meeting early, you can also appoint the employees of the company present for that purpose as your proxy. Please use the proxy and instruction card in your ballot card booklets. You are allowed to instruct the proxies provided by the company exclusively with respect to voting on the management proposals published in the invitation. You can have entrusted vote to some other participant.
To do so, detach the attendance card and proxy form from the back section of your ballot card, fill in your proxy's name and city of residence on the proxy form, and give your proxy your ballot card book without your attendance card and proxy form. To whom do we give the proxy form? The German grammar seems to have gotten mixed up. You give your book plus the proxy form without the attendance card. You give your proxy a ballot card book without your attendance card and proxy form. Thank you. On your way out, hand your completed proxy form to the staff at the door and keep your attendance card. If you wish to leave the meeting temporarily or early and do not wish to appoint a proxy, please hand in your attendance card and your voting cards at the exit.
As last year, online participation is also possible. Shareholders participating online can follow a live webcast of the entire meeting, cast their votes in real time, and inspect the attendance register. In addition, shareholders participating via the internet proxy appointment and instruction system have until the beginning of voting on management's announced proposals to send or amend their appointments and instructions regarding these proposals. All shareholders and proxies who wish to speak or ask questions are kindly asked to report to the speakers' table as soon as possible. Please complete a speaker's request form and indicate clearly and legibly your name and the number of your ballot card book on the request form. I must insist that every shareholder or proxy wishing to speak, without exception, first hand in a request form at the speakers' table and then wait until called to speak.
When it is your turn to speak, please go to one of the microphones in the main hall. Let me point out also that the entire annual general meeting of shareholders is being publicly broadcast on the internet. However, only what I'm saying now and the speech of CEO Bill McDermott will be recorded and posted on the internet after the meeting. As in the previous year, we assume with your approval, we are allowing some television companies to broadcast highlights from the speech of Mr. McDermott. We are allowing the TV companies to show sections of his speech only. The entire meeting is also being documented in sound and video for the record. If a shareholder proxy objects to the recording of his or her speech, we will not record that speech except for the temporary record needed for technical reasons in connection with transmission on the internet.
The Executive Board will be using the services of stenographers to help prepare and keep a record of answers to questions from the floor. Ladies and gentlemen, I would like to remind you that you are not permitted to make any sound or video recordings of the meeting yourselves. Please do not film, photograph, or record the meeting. The same applies to anyone following the meeting online. Now on to the agenda, ladies and gentlemen. Let's first take item one. For the record, I can report that the 2015 SAP SE financial statements and the consolidated financial statements, the combined management report for SAP Group and SAP SE, including the Executive Board's explanatory notes relating to the information provided pursuant to German Commercial Code Sections 289.4 and 315.4.
The Supervisory Report and the Executive Board's proposed resolution on the appropriation of retained earnings were available at the website www.sap.com/agm from the time the general meeting of shareholders was called. These documents are also available for inspection in the meeting room. You'll find the documents at the speakers' table in the main hall and at the booth in front of the entrance to the main hall. The auditor, KPMG, Wirtschaftsprüfungsgesellschaft, Berlin, Germany, examined the SAP SE financial statements, the consolidated financial statements, and combined SAP SE and SAP Group management report for fiscal 2015, and issued an unqualified audit opinion. At its March 24th, 2016 meeting, the Supervisory Board examined and approved the 2015 SAP SE financial statements, the consolidated financial statements, and the combined management report for SAP SE and the SAP Group submitted by the Executive Board.
The 2015 financial statements and management report were thus formally adopted. The supervisory board compiled a written report, which is published on pages 18 to 25 of the annual report. I wish to make the following comments on the report of the work of the supervisory board, which, as I said, you can find on pages 18 to 25 of the annual report. As in previous years, the supervisory board relied on a close and constructive dialogue with the executive board to effectively perform its duties. The supervisory board regularly received full and timely reports from the executive board, both in person and in writing, on fundamental corporate policy issues, the economic situation and performance of the SAP Group, and on significant transactions and business measures. Besides financial results, we also looked at company strategy and regularly discussed progress on its implementation with the executive board.
At a number of meetings, we discussed the activities of the SAP Business Network division, which comprises the acquired companies Ariba, Fieldglass, and Concur, and their integration into the SAP Group, and how the cloud business is developing. There were four ordinary meetings and four extraordinary meetings of the supervisory board in 2015. We also adopted two further resolutions by correspondence vote. The executive board kept me as the chairperson of the supervisory board fully informed between meetings of the supervisory board, notably through regular conversation with Bill McDermott, SAP CEO. In addition to dealing with matters in plenary sessions, the supervisory board delegates activities to its various committees, which discuss topics in depth with the executive board and prepare important supervisory board decisions that are within the committee's terms of reference.
The chairpersons of the various committees regularly report their committee's work to the full supervisory board meetings, allowing close cooperation and sufficient exchange of information. At this juncture, I'd like to mention the changes in membership of the executive and supervisory boards. The supervisory board appointed Michael Kleinemeier, member of the executive board, effective 1st of November 2015. With effect from April 1st, 2016, we appointed Stefan Ries and Steve Singh, members of the executive board. I'd like to welcome them and would now ask them to introduce themselves to our shareholders. Michael, would you like to briefly introduce yourself first, and then followed by Stefan and Steve? Well, thank you very much, Hasso, for the possibility to introduce myself briefly. Shareholders, ladies and gentlemen, I'm one of the newcomers to the executive board of SAP AG, but not that new.
My career began in 1989 with SAP, first in sales, consulting, and training. From 2001 on, I was manager of SAP Deutschland, and later on top of that, for Austria, Switzerland, Belgium, and the Netherlands as well. In 2007, I switched to development as head of the industrial solutions, and in 2010, I returned to the German-speaking market, so important to SAP, German, Austria, and Switzerland. After 2012, I took over the global service units, and in 2013, also CEE and CIS markets, the eastern countries. In 2015, I was appointed to the global management board, reporting to Gerd Oswald for the areas of global services and support. As of November 1st, as Hasso Plattner said, I was appointed executive board member. I am also a member of the Bitkom Group, which is an unpaid activity.
I make sure that Germany is promoted as an IT location. In the past 26 years, I had a possibility to acquire competencies in nearly all areas, and I always work closely with the customers of SAP. To me, the success of SAP customers is always the focus of my activity, so I feel well-equipped to continue in leading this Executive Board responsibility and advancing it. I can say, ladies and gentlemen, that I will work full steam for the success of our customers at SAP. Thank you for your confidence. Ladies and gentlemen, I am Stefan Ries. I am in charge of personnel, human resources in SAP. I have a background of 26 years in HR matters. Since 2002, my family and I have been living in this metropolitan region. It is my pleasure to work and to live here.
My career stages at the beginning led me straight into the IT area. In the late '80s, I had a possibility to start my career with Microsoft. I moved through Compaq Computers, Hewlett-Packard, and ended up with SAP. Over a period between 2002 to 2010, I had a few leading and executive HR functions. There was a brief period outside of SAP in an HR consultancy. In 2014, I returned to the company to assume responsibility for HR worldwide. At this stage, I would like to thank on behalf of my organization and personally, the Supervisory Board for the trust they are showing, which allows us to represent the important HR segment on the Supervisory Board. You know that staff enjoy a top-ranking position in this company, and it is part of my tradition to continue this in a positive light.
We are in close competition on a very intense market worldwide. We know that we have to seek external talent, but at the same time, also motivate our in-house talent through innovation and success and prepare them for the future. To me, this is much of my duty, which, of course, I cannot do alone with my organization, but only in close cooperation with my colleagues on the Executive Board and the extended leadership circle. I am looking forward to this job. I am very proud to represent this function on the Supervisory Board, and I am looking forward to many years of continuous personnel work in SAP. Thank you.
My name is Steve Singh. I run the business networks and applications group here at SAP. I have come to SAP through the acquisition of Concur. For the past 30 years, I have had the privilege to build three companies, the last of which was Concur. I am honored to be a part of this organization, an organization that has a rich history of innovation. I believe that across the business networks and applications group, as well as my colleague Bernd Leukert's organization, that we have an incredible opportunity to drive innovation and value for our customers. Thank you to our Chairman and also the Supervisory Board for allowing me to be on the Executive Board and serve our customers and our investors. Thank you.
Ladies and gentlemen, in the course of this meeting, we have three newcomers to the board. For Gerd Oswald, it's going to be the last shareholders' meeting which he attends as a member of the Executive Board. He will change to the consultant status end of the year. On behalf of the entire Supervisory Board, I'd like to thank Mr. Oswald most warmly for his many years of circumspect and sound work. Gerd joined SAP in 1981. He became head of quality assurance and played a major role in the development of the SAP R/2 network. He was responsible for the development and delivery of R/3. We cooperated closely. In 1993, Gerd was appointed to the SAP Executive Management Board, and for the past 20 years, he has been a member of the Executive Board of SAP.
I'd like to mention also that this makes Gerd Oswald not only one of, or the longest-serving member of our Executive Board, but also the longest-serving director of any DAX 30 company. Under Gerd Oswald's leadership, the SAP Active Global Support Division with its innovative support services, which it continues to improve, demonstrate clearly that SAP is an industry leader. Last year, the Supervisory Board put Gerd Oswald in charge of the new Product Quality Enablement Board Area to ensure quality standards in times of ever-shortening innovation and development cycles. In 35 years for SAP, Gerd Oswald has exemplified continuity, dependability, and vision. He not just witnessed change at SAP but was instrumental in shaping that change. Again, Gerd, thank you very much for your long, exemplary service to the company. We'll miss you. There were also changes in membership of the Supervisory Board last year.
On the shareholder side, Mr. Hartmut Mehdorn resigned his seat on the Supervisory Board in May 2015. His replacement, Professor Dr. Gesche Joost, was initially appointed member of the Supervisory Board by the Mannheim Municipal Court on May 28, 2015. The Supervisory Board proposes to today's Annual General Meeting of Shareholders that it elects Ms. Joost to the Supervisory Board for the remainder of Mr. Mehdorn's term of office. I'd like to welcome Professor Dr. Joost to the meeting and would now ask you to introduce yourself to our shareholders. Thank you very much, Hasso Plattner. Shareholders, I had the opportunity now for one year to work with the Supervisory Board. I'm happy to introduce myself to you personally. I represent design and usability, the user-friendliness, and good user experience in using network systems and software. I studied design, obtained my doctorate at Tübingen.
After some stays abroad, I ended up in Berlin with the Telekom Innovation Laboratories. I worked at a public-private partnership for researching new means of communication. In the area of user experience, I worked with the Technical University of Berlin. For the past six years, I built up a research area for design research. I work on the man-machine interface, electronics, variable electronics, an innovative area whose scientific aspects I'm leading. It also has a major impact on innovation culture, promoting talents, and designing interaction. I also work politically. Right now, I'm the internet messenger of the Federal Government. I work a lot in Brussels, consulting with the European Commission on Digital Agenda. I act as a translator about digitization politics and measures in that area between Brussels and Berlin, supporting the German Ministry of Economics.
Politically and also technically, I work on behalf of digital change, which is very close to my heart. The topics of the supervisory board I'd like to stand for are innovation culture, that is, how must you position yourself as a company to be attractive to new talents? What are the roles of gender diversity, multifaceted nature of teams in the company? What is the role of user experience, user-friendliness of software solutions in such a large area? What can we forecast as the future? Such a powerful engine, a wonderful machine like HANA is available to us. What can we do with data in the future? Something I'm very interested in, where I see a lot of potential also as a result of my research. Design interaction concepts are my topic, and the first year on the supervisory board so far has been wonderful.
I enjoyed working with my colleagues, and I'd be happy if you could support me and lend me your confidence for me to continue working on the supervisory board. Thank you. Thank you, Mrs. Joost. There were changes to the employee representative side last year. The end of the annual general meeting of shareholders on the 20th of May 2015 also marked the end of the term of office of the non-employee representatives, who, under the agreement on the involvement of employees, were appointed to the supervisory board on SAP's conversion to a European company. Accordingly, elections for new employee representatives were held in 2015, after which Catherine Bordelon, Christiane Kuntz-Mayr, Steffen Leskovar, Kurt Reiner, Maria Rosa Bian, and Stefan Schulz left the supervisory board. They were replaced by Martin Duffek, Andreas Hahn, Christine Regitz, Robert Schuschnig-Fowler, Sebastian Sick, and Pierre Thiollet.
I wish to take this opportunity to thank all members who stepped down last year for their service to the supervisory board. I'd now like to talk about changes to the executive board members' compensation package. The supervisory board has introduced a new long-term incentive element for the executive board, the SAP Long-Term Incentive Program 2016, because rights under the RSU Milestone Plan 2015 were granted for the last time in 2015. You can find the details of the new LTI plan and the compensation report on pages 26 to 41 of the 2015 annual report. The supervisory board has already granted executive board members rights for 2016 under the new LTI plan. The supervisory board has decided to set compensation separately for each individual under the LTI plan and to link the contractual targets of the long-term compensation element to the role and portfolio of each executive board member.
It has also decided that base salary and the STI plan will be in US dollars for the executive board members in the U.S. to neutralize the effects of exchange rate fluctuations. The supervisory board discussed executive board compensation in great depth at its meetings. When reviewing executive board compensation, it primarily considers whether it's commensurate with SAP's size and global reach, SAP's operational and financial performance, and directors' compensation at comparable international companies. In our opinion, the executive board compensation is appropriate. This applies to the 2015 compensation and to the new compensation package applying from 2016 alike, which we are putting before today's shareholders' meeting for approval. Ladies and gentlemen, I will now ask Bill McDermott to address you. Bill McDermott doesn't speak German, his speech will be interpreted into German so that everyone can follow.
Bill's answers to questions from shareholders will also be interpreted into German. Bill, the floor is yours now.
Welcome in the SAP arena. Thank you for joining us. To begin today, I'd like to acknowledge the chairman and co-founder of SAP, Hasso Plattner himself, one of the most respected innovators in the world. Thanks to Hasso, SAP HANA is providing the next generation of real-time. Today's businesses can finally become live businesses. I thought you might like to see how the breakthrough of SAP HANA continues to illuminate the brand of SAP. You, ladies and gentlemen, are the first to see our new TV commercial. Hasso, you are an inspiration to SAP and to all of us. I'd like to personally thank you for your dedication and leadership. Thank you so much, Hasso Plattner. The new television commercial shows the pressures facing businesses in today's economy. Consumers have more information at their fingertips than we could ever imagine just a few short years ago.
This is why so many people call this a consumer-driven economy, because everything is in the hands of consumers like you. How do you prefer to shop? Do you like to shop in a retail store or from your mobile device? Would you like to have the appliances in your kitchen repaired before they actually break down? Would you like to personalize a motorcycle before you actually buy one? Today's businesses are engaging directly with consumers throughout the entire relationship cycle, trying to answer questions just like these. In fact, just as you saw in the video, technology is the only way forward. In 2010, we anticipated how businesses would need to adapt. We established a bold vision to help the world run better and improve people's lives. Today, I'm proud to report that our results validate our strategy.
We are setting the tempo for the industry. We are growing more than two times faster than our largest competitor in our core business. We are the fastest-growing software company at scale in the world, now approaching 110 million users, more than any other company in the cloud. Not bad. We're making some progress, right? Since 2010, we have grown our revenues and profits more than 60%. We have more than tripled our customer base to 310,000 customers, and we're just getting started. Yeah, you can feel good about your SAP. You may notice that today I'm wearing some tinted glasses due to an injury I suffered last year, and I'm happy to report to you that not only am I fully recovered, but I never stopped doing my work. SAP got 100% out of me, and it always has.
I'd like to particularly thank Hasso, my board colleagues, and ladies and gentlemen, all of you, dear shareholders, for the very nice notes and heartfelt support that I got during that difficult time. Thank you all very much. Thank you. I'd also like to recognize the 78,000 women and men of SAP for their hard work and dedication. It is their commitment to this company that makes it special and that drives those great results that I talked about. Please join me in congratulating them. The digital economy is changing quickly. It is affecting every business in every industry. 90% of the world's data has been created in the last two years. There will be nine billion mobile device users by 2020. Over 21 billion things will be connected to the Internet, from industrial machines to household devices.
This is a major theme in our daily lives. Think of the way that you purchase books and music online. Today's tech giants, like Apple and Amazon, have completely disintermediated the music and book sale industry. Even farms are digitizing. They're now using sensors to collect data so they can better harvest crops. As cars connect to the Internet, auto companies are collaborating with their service providers to offer in-car payments, and manufacturers are using Internet-connected machinery to do predictive maintenance. In this environment, all companies are facing disruptive change, and they're also facing a clear choice: embrace digitization or go in decline. SAP is providing every customer access to a complete set of technology for their digital journey, from suppliers and networks to customer experience, to workforce engagement, to the Internet of Things and big data.
In a digital world, companies need access to their data in real time. SAP HANA is leading the way to simplify everything so you can do anything. Core business processes like finance, manufacturing, and supply chain can now be run on a totally modern set of business applications. SAP S/4HANA is the most advanced system ever created to help businesses run their core operations. Our customers also want fast time to value from their SAP software. This means solutions that are easy to use and easy to implement. That is why, ladies and gentlemen, we acquired the best cloud companies on the planet. SAP integrates every solution, whether it's on-premise or in the cloud. In fact, many customers have chosen to run a combination of applications, which we call a hybrid environment.
SAP remains the market standard for integration, and we honor this legacy regardless of how customers consume our software. SAP's completeness of vision across our product portfolio is unmatched. Beginning with SAP HANA, the foundation of digital business. As you may recall, last year at this meeting, we discussed the advantages of HANA in detail, including 10 times smaller footprint, 10 times faster data backup, seven times higher throughput, 70% faster operational reporting. Yes, the list goes on and on. Simply put, SAP HANA enables us to move beyond the limitations of the past into a period of limitless possibilities. Nearly 10,000 customers and startup companies have chosen to innovate on SAP HANA, confirming its resounding success in the marketplace. The in-memory revolution is real, and SAP is several years ahead of our competition. Early last year, we launched our next generation ERP, SAP S/4HANA.
S/4HANA applications are natively designed with SAP Fiori, a user interface that offers beautiful usability on any device. I'm really pleased that SAP Fiori won the Red Dot Design Award, one of the most prestigious awards recognizing great design. SAP Fiori brings the convenience of a consumer user experience together with the power of SAP enterprise software. With SAP HANA and S/4HANA, our customers can make data-driven decisions in real time, and companies can recreate their business processes on the fly. Companies can even rethink their entire business model, taking full advantage of these new capabilities. Earlier, I gave farming and manufacturing examples. It's important for you to know that SAP HANA and S/4HANA is at the center of reinventing 25 distinctly different industries. Since its launch last year, S/4HANA has already achieved more than 3,200 customers. Obviously, we are onto something really, really big here.
Just last week, SAP announced a new partnership with Apple, the world's most valuable company. Here is a direct quote from Apple CEO, Tim Cook, and I quote, "As the leader of enterprise software with 76% of business transactions touching an SAP system, SAP is the ideal partner to help us truly transform how businesses around the world are run on iPhone and iPad." By building a software development kit and enabling 2.5 million developers to build gorgeous applications for Apple devices, we also stimulate huge demand for S/4HANA. All SAP products will leverage the HANA platform. SAP is committed to clear roadmaps so our customers can take advantage of this modern architecture at their own speed. Therefore, we have also committed to providing support for their existing SAP Business Suite through 2025. How about this?
Let's show you an example of one of our HANA retail customers.
Our process strength is the DNA of Lidl, simplicity is our priority. For us, it is very important to have a future-proof and stable platform with SAP HANA in order to further optimize the end-to-end processes and develop innovative concepts on it.
I have been with Lidl, the company, for 19 years. When I started, we had almost 200,000 branches. Today, it is almost 10,000. If we can save one minute in a branch per day, we save that time 10,000 times. If we optimize a process, we have a system that we bring to 26 countries. We have set ourselves the goal of replacing our in-house developed inventory management with SAP Retail based on HANA. We replaced the entire inventory management for one part of our branches in a so-called Big Bang. In Austria, we went live with 100 branches and a regional company in one fell swoop. Where we used to have media breaks, we now have an estimated 20% fewer process steps to, for example, get an order through the system. Now we can do stock evaluations close to real-time.
We can also evaluate turnover figures close to real-time. We are able to do stock queries down to the branch level.
The employees are very proud to be helping build one of the most modern inventory management systems in the trading industry. We are looking for employees who will start with us directly and bring in new ideas, as well as experienced specialists who will support us in then rolling the systems out to the countries.
For the global rollout, we obviously need entrepreneurial employees who actively accompany this as we want to implement all our processes in the SAP world in the future based on HANA in order to optimally utilize the performance and speed gain for Lidl.
SAP helps Lidl run simple.
How about it for HANA? Is it a HANA world? It's a HANA world. We can be proud of the impact HANA is making for Lidl and many of us who actually shop at Lidl. I'd like to cover our cloud offerings. SAP cloud solutions, unlike our traditional software licenses, are rented in a subscription model and downloaded from the Internet. This gives customers access to the latest innovations while not having to worry about the on-site infrastructure to support them. Cloud solutions offer customers simplified delivery and fast innovation. Let's discuss our line of business cloud solutions, beginning with human capital management. SuccessFactors from SAP helps organizations manage their most important asset, their people. This means hiring, developing, and empowering people to be their best.
While our competitors focus only on English-speaking countries, our solutions are localized for 75 countries in more than 40 languages with more than 1,500 local regulatory updates performed annually. You see the difference? As companies manage these volatile economic conditions, many are now turning to temporary workers to increase workforce capacity. With SAP SuccessFactors and SAP Fieldglass, we are the only company that delivers total workforce management solutions across permanent and contingent labor. Let's talk about customer engagement. SAP's customer engagement and commerce solutions go far beyond traditional customer relationship management. Today, a successful business needs to offer seamless, personalized experience in any channel, on any device, and anywhere the work is being done. That's why SAP enables businesses to connect the front and back office in real-time. SAP customers are responding to this offering, which is driving triple-digit growth for SAP in 2015.
In this highly connected world, processes can no longer stop at the four walls of a company. Most businesses have a network of external collaborators who are critical to their success. Businesses need to stay in close contact with these networks to drive efficient partnerships. SAP has assembled business networks focused on the biggest enterprise spend categories, including suppliers, travel expenses, and workforce management. Our business network companies, SAP Ariba, Concur, and SAP Fieldglass, address exactly these areas. SAP Ariba focuses on suppliers. The Ariba Network is leading a marketplace used by approximately two million companies. These companies conduct more than EUR 800 billion in commerce every year. Ariba helps companies by making it easier for employees to process invoices, accounts payable, and other core procurement functions. With around 40 million users, Concur is the world's leading travel and expense management system.
The Concur system not only automates basic expense reports, it also supports better decision-making for employee travel, including air, hotel, and entertainment. Here is a real-life example of our network solutions working together.
[Foreign language] Baustellen im Straßenverkehr. Für viele von uns ein tägliches Unterfangen. Sie bedeuten nicht nur Ärger und Zeitverlust, sondern haben auch Auswirkungen auf Umwelt und Wirtschaft, wenn Waren im Verkehr stecken bleiben. Deshalb müssen Baustellen so schnell und effizient wie möglich fertiggestellt werden. SAP-Lösungen wie die SAP-Geschäftsnetzwerke und Lösungen für das Internet der Dinge helfen dabei, teure und komplexe Baustellenprojekte effizienter zu gestalten. Sehen wir uns solch ein komplexes Projekt in Deutschland genauer an. Manchmal ändern sich die Anforderungen. Bei einer Autobahnbaustelle zum Beispiel musste ganz am Ende der Projektlaufzeit noch ein Tunnel gebaut werden. SAP-Software hilft, solche Herausforderungen zu meistern und die Kosten im Rahmen zu halten. Zuerst muss festgestellt werden, was genau benötigt wird.
[Foreign language] Um den Boden zu untersuchen und festzustellen, welches Gerät benötigt wird, engagieren wir einen Ingenieur für Geologie.
[Foreign language] Wir können SAP Fieldglass einsetzen, um die benötigten flexiblen Arbeitskräfte ausfindig zu machen und den besten verfügbaren Experten zu finden. Müssen wir sicherstellen, dass dieser Experte rechtzeitig zur Baustelle kommt, wobei wir auch die Reisekosten im Auge behalten. Die Softwarelösung von Concur hilft dabei, die Reise nahtlos zu planen und abzurechnen. Welche Ausrüstung braucht der Spezialist nun auf der Baustelle?
Oft benötigt er spezielles Werkzeug oder auch Arbeitskleidung.
Wir nutzen SAP Ariba, ein Netzwerk von Zulieferern, um die Ausrüstung zum besten Preis zu bestellen. Gleichzeitig stellen wir nicht nur die Verfügbarkeit sicher, sondern auch, dass alles bei Eintreffen des Spezialisten bereits vor Ort ist. Sensordaten liefern Informationen über den Zustand der Bohrmaschine. SAP-Software für das Internet der Dinge analysiert die Daten, berechnet die Wahrscheinlichkeit eines Ausfalls oder empfiehlt gegebenenfalls eine Wartung. Falls Ersatzteile benötigt werden, können diese auch gleich über das Ariba-Netzwerk bestellt werden.
So stellen wir sicher, dass die Maschine wirklich funktioniert und wir nicht die Arbeiten unterbrechen müssen, weil Teile fehlen.
Die Lösungen für die SAP-Geschäftsnetzwerke und das Internet der Dinge sorgen dafür, dass alles zur richtigen Zeit am richtigen Ort ist und die Maschinen ohne Ausfälle funktionieren. Und das alles mit geringeren Kosten und weniger Staus. Das ist nur ein Beispiel, wie die visionären Lösungen von SAP nahtlos zusammenarbeiten können und einen reibungslosen Ablauf ermöglichen.
Now let's touch on the SAP HANA Enterprise Cloud and the SAP HANA Cloud Platform. SAP offers security and control with our SAP HANA Enterprise Cloud, a privately managed cloud environment run in SAP and partner data centers. Customers can realize SAP HANA's advantages immediately without investing in a large database infrastructure project. Companies simply pay subscription fees by volume for this service, it gives them a lot of flexibility to scale as their business grows. The SAP HANA Cloud Platform is a standards-based open platform that allows customers to add unique functionality into their SAP applications, whether cloud or on-premise. Many customers are using the SAP HANA Cloud Platform to empower their developers to build next-generation digital applications. Every SAP customer is accumulating massive amounts of valuable data. Our analytics solutions, such as SAP Cloud for Analytics, helps companies make use of this information.
With SAP's Digital Boardroom, leaders get full visibility into the operations of their business. You're actually working with live data that enables you to simulate options and even predict business outcomes. This is how we run SAP in all boardrooms around the world. Our ecosystem is expanding quickly. For example, SAP and Google are offering powerful visual analytics capabilities. Daimler Truck North America uses SAP Cloud Analytics to identify potential sales for dealers. The National Football League, National Basketball Association, the National Hockey League, all major sports leagues in the U.S., as well as our own beloved German national football team, also use SAP analytics to drive a smarter experience for millions of fans, and of course, athletes as well. How about that German national football team?
When all of this technology, from cloud to analytics to S/4, comes together on one platform, breakthrough outcomes are possible. In January, I met with business and political leaders at the 2016 World Economic Forum in Davos. The theme was The Fourth Industrial Revolution, also known as Industry 4.0. A major topic was the Internet of Things, which is one of the many names given to the connection of billions of devices to the Internet. We're actually seeing this trend unfold everywhere in the world. Growing economies with a rising middle class, like China and India, are investing heavily in digital to grow. Important customers such as Siemens and Hamburg Port Authority have selected the SAP Internet of Things platform as the basis for their efforts. SAP is committed to leading the Internet of Things revolution, and we really believe this has only just begun.
Now, as I shift back to our entire solution portfolio, we've also adopted our products for small and medium-sized enterprises. SAP Business One, SAP Business All-in-One, and SAP Anywhere are designed specifically for smaller companies to benefit from SAP innovation. Our more than 12,000 partners enhance our reach with large and small companies alike. They sell our software, develop complementary solutions, and support our customers across all geographies. Think about this. In addition to our SAP colleagues, we have more than 2 million partner colleagues globally who support SAP. That's pretty special. Think about the jobs we're creating all over the world. Wow. Now shifting to our 2015 performance, we manage our company holistically using social, environmental, and financial indicators to measure our results. In 2015, our performance was strong across all dimensions, both financial and non-financial. In fact, we had a tremendous year in 2015.
Our results were strong across all markets and industries, in our core business, as well as our rapidly expanding cloud business. Please note that all figures I share with you are non-IFRS. That will keep the investor relations team very happy. You can laugh, it's okay. We set ambitious targets, as you would expect from us, for the full year. Best of all, we over-delivered with cloud and software revenue growing by 12% at constant currencies, clearly beating our guidance. We continued our Thank you. Thank you. You love the results section. We continued our fast growth in the cloud and achieved our guidance with EUR 2 billion in cloud subscriptions and support revenue at constant currencies. Cloud subscriptions and support revenue continued its fast growth at 109% to EUR 2.3 billion.
Even without the contribution of Concur and Fieldglass, if you want to look at it in a purely organic sense, we grew 32%, outpacing most every competitor in the industry. Let's take a closer look at the cloud. Keep in mind that cloud contracts are valid over a period of time, and they're paid to SAP as a subscription. This means that the total contract value is not immediately recognized in our revenue, but rather over the course of the entire contracted period. Therefore, it is essential to look at the total value of our committed cloud business. You can do this by looking at two metrics, backlog and deferred cloud revenue. At the end of 2015, our cloud subscriptions and support backlog was EUR 3.7 billion. Our deferred cloud subscriptions was another EUR 1 billion.
This means that we have EUR 4.6 billion in contracted business that hasn't even entered our revenue, but will over the coming quarters. This committed business will continue to drive strong cloud growth in 2016 and beyond. That's really good for the company. Turning to a regional view, I'd like to highlight the excellent performance in Germany. In this advanced market, we saw exceptional growth, a double-digit increase in cloud and software revenue. Thank you, Germany. Thank you very much. We had strong growth across all regions. In the Americas, we grew cloud by 120% and cloud and software by 31%. In EMEA, our cloud growth was 83% and 12% for cloud and software. In APJ, we grew by 99% in the cloud and 20% for cloud and software. Yes, I did ask them where that extra 1% was in the cloud.
As you listen to the numbers, you'll notice that our core of software and support is rock solid. I just spoke about our portfolio and the strength of SAP S/4HANA. SAP S/4HANA is a major growth driver already for the company as our software licenses grew by 10% to EUR 4.8 billion in 2015. Now to our support revenue. Our support revenue has now reached EUR 10.1 billion and grew by 14%. The stability of our support revenue continues to be driven by a 96% renewal rate. Our share of more predictable revenue, which comprises our fast-growing cloud and steadily growing support revenue, increased by another three percentage points this year to over 60%. This transition to cloud subscription revenue has brought further predictability and stability to our revenue in the company.
These strong 2015 results led us to record cloud and software revenue that grew by 20% to EUR 17.2 billion, far outpacing the market. On the bottom line, we exceeded the guidance range for our operating profit with €5.904 billion in profit at constant currency. While speaking about operating profit, we are often asked, how will we drive efficiency in our cloud business? We actually have three cloud businesses. Our business networks, our public cloud, and our private cloud. In a mature state, we expect our business networks and public cloud businesses to reach an 80% gross margin. There is already good progress, with business networks around 75% gross margins and public cloud at around 70%. The SAP HANA Enterprise Cloud is a private cloud, and it's vital for new software sales and adoption. As you know, initially, this required startup investment on the part of SAP.
Over the past year, less investment was necessary. Revenues have increased significantly, and we're already increasing profitability. This year, we'll break even at least on our way to a 40% gross margin business in the midterm. In 2015, we returned to revenue growth in our services business, which is very good news. This is due to customer demand for fast time to business value. What we're seeing is an increase in smaller projects and lots of projects in our fast-growing cloud business. Therefore, there are fewer large on-premise implementation projects. We do not expect that the services business will return to the margin profile of prior innovation cycles. By operating our cloud and core businesses more effectively, we are driving the expansion of our overall operating profit. The surge in operating profit for the full year 2015 reflects the continued success of a well-planned strategy.
Here I'd like to discuss the company-wide transformation program that we also enacted in 2015. To successfully complete the business transition, we recognized that we needed to invest in high-growth areas like cloud. At the same time, we had to adjust capacity in areas that were no longer growing as fast. Therefore, the program was a success as it was highly accepted by our employees and social partners. This enabled us to realize a triple-digit million EUR positive impact, mainly in the on-premise business. This program helped lay the groundwork for improving operating profit and leverage in operating profit going forward. Finally, for the full year 2015, our earnings per share was €3.77, up 8% year-over-year. Following the strong finish to 2015, we reported another strong performance in Q1 of 2016 at constant currency. What did we see?
We saw continued fast growth in the cloud at 33%, tracking to the high end of our guidance. Our cloud and software revenue was up 6% within our guidance range, and our IFRS earnings per share was up 38%, with non-IFRS earnings per share up 9%. Please note that this result substantially exceeds our peer group benchmark. These are solid results in our seasonally smallest quarter. Traditional financial measures alone do not paint a full picture of a company's true performance. Leading companies integrate financial and non-financial value creation, both internally and externally. In March, for the fourth year in a row, we published our integrated report to role model this integration. For example, a one percentage point change in our business health culture index, which measures the overall health of our employees, has an impact on our operating profit of up to €85 million.
That is why I am so happy to report to you that in 2015, our most significant non-financial metrics also performed strongly. Employee engagement increased two full percentage points to 81%. That's the highest it's been in 10 years. The business health culture index continued its positive trend, increasing three percentage points to 75%. Customer loyalty is now measured by a new model, it also improved year-over-year. Leadership remains a focus for us and we continue numerous programs to develop our leaders. Our efforts are bearing fruit. Our Leadership Trust Index in the company rose to 52.3%, an increase of 5.5 percentage points year-on-year. Diversity is another important aspect of our leadership approach. We remain committed to achieving 25% of management positions held by women by 2017.
Here we also saw an increase of the number of women in management from 21.3% at the end of 2014 to 23.6% at the end of 2015. That is good. Yeah, let's give it up for the women. On a broader scale, SAP aspires to foster an inclusive culture throughout the company. We focus on diversity in all of its forms: gender, generational, ethnic, and differently abled. By focusing on the unique abilities of our employees, we will remain an innovative growth company. We also reduced our environmental impact in 2015, with CO2 decreasing to 455 kilotons from 550 kilotons a year earlier. We were able to do this despite strong growth. This is due in particular to our green cloud policy. Our data centers and facilities are powered by 100% renewable energy worldwide.
As a socially responsible leader, we enable our customers to do well, so they can do good. As we further realize our vision to help the world run better and improve people's lives, we have the most sustainable impact with our software. I would like to show you a local example of our software in action.
Los Angeles, Beijing, São Paulo. For the big metropolises of the world, traffic is increasingly a challenge, with traffic jams, dirty air and lack of parking spaces. Karlsruhe, with its 300,000 inhabitants, is not a world metropolis, but relies entirely on an innovative urban infrastructure. Together with SAP and the energy company EnBW, the city has launched a pilot project: SMIGHT, Smart City Light, the intelligent street lighting.
The street lighting is present in every street and in a uniform pattern, so that the street lighting is excellent for the distribution of further functions and further technologies in a city.
The new street lamps offer a lot: free WLAN, an emergency call system, charging stations for electric cars and an integrated environmental sensor. Radar sensors, for example, can detect passing cars and determine whether the charging stations at the lamp are free or occupied. With the help of the Internet of Things, this data is analyzed and made available in real time via the SAP HANA Cloud Platform.
Anyone who has ever been around with e-mobiles knows the anxious feeling that it might not be enough. Here to equip the city with SMIGHTs so that you can be sure, every few hundred meters you will find such an offer, would greatly increase the attractiveness of e-mobility.
More electric cars on the road also affects air quality. Environmental data is also recorded by the street lamps, for example air pollution. In major cities, smog is becoming more and more of a health risk. With the real-time data that SAP HANA provides, municipalities can react immediately. For example, diverting traffic or imposing a driving ban. This ensures better air and a higher quality of life.
We would like to give the cities something with SMIGHT that enables them to grow in a intelligent and needs-based way in the area of infrastructure.
We want to be a very modern, innovative city, we also want to show a little in the application what is researched and developed on site. The SMIGHT poles are a great opportunity for that, especially because the intersection between IT use, energy and mobility comes together.
Karlsruhe shows how technology can help build an infrastructure that meets the demands of the cities of tomorrow.
Thank you. Turning now to our stock performance. Since we began our journey together in 2010, our share price has increased by an impressive 110%. In 2015, the stock achieved new all-time highs and ended the year with a 26% increase year-over-year. SAP is the most valuable DAX-listed company, with a market capitalization of approximately EUR 85 billion. Therefore, I think the market is beginning to recognize our innovation strategy is in flight, and it's clear that SAP remains a strong growth company and a sound investment. We firmly believe our shareholders should benefit from SAP's success. That's why for 2015, the Executive Board and the Supervisory Board proposed to raise the dividend by 5% to EUR 1.15 per share. This represents a dividend payout of approximately EUR 1.4 billion and a payout ratio of 45%.
Ladies and gentlemen, please note the agenda items on the screen, which you will be asked to vote on in today's meeting. Ladies and gentlemen, as I close it out today, let me say clearly that SAP's completeness of vision is resonating everywhere. From the strong core to the Internet of Things, the SAP story is one of momentum and growth. We are very confident in our strategy and the goals we have set for 2016 and beyond. Our innovation portfolio, our geographic depth, and our domain expertise across 25 industries gives us strong confidence. Customers are looking to SAP as their trusted innovator. Even as the world economy is changing fast, SAP uniquely represents innovation, strength, and stability. On behalf of the entire SAP Executive Board, I'd like to thank you very, very much for your continued trust and confidence in us. [Foreign language]
Thank you, Bill. In addition to item 1, I'm now calling all other agenda items. That is to say items 2 to 8 in the invitation to the meeting, of which copies are available in the meeting room and which also contains the management's proposals. In relation to item 2 on the agenda concerning the appropriation of retained earnings, please note that the Executive Board and the Supervisory Board have adjusted their proposal as announced in the invitation to reflect a change in the number of shares entitled to dividend. However, the proposed dividend of EUR 1.15 per share that qualifies for dividend has not changed.
The Executive and Supervisory Boards therefore now ask that the meeting resolve that the retained earnings of EUR 9,256,034,334.33 from fiscal year 2015, reported in the annual financial statements and management report be applied as follows: A dividend of EUR 1.15 be paid for each qualifying no-par share, which results in, Bill? EUR 1,377,839,829.65. EUR 1 billion be transferred to other revenue reserves, and that the balance be carried forward to the new account, which equals to EUR 6,878,194,405.68. The text of this proposal is available on the speaker's table. I'd also like to point out that the Executive Board has provided a written report on agenda item 8. The report was reproduced in the invitation to this meeting and is available here now. I hereby open the discussion section of the meeting, which I will take as a general debate on all agenda items together.
We have five requests for the floor. I first invite Ms. Jella Benner-Heinacher from the Deutsche Schutzvereinigung für Wertpapierbesitz to the floor. Right. Now, the mic works. Ladies and gentlemen, Bill McDermott, good that you're fit and in good health. Quite frankly, we were quite worried about you, about our Chairman of the Executive Board. Now you're up on the stage as fit as if nothing ever happened.
This, ladies and gentlemen, is the best news we've ever heard for us. Well, actually, I wanted to say that the glasses look good on you, but I'm only allowed to do this as a woman. Jokes aside, I'm Jella Benner-Heinacher. I'm speaking here on behalf of the Deutsche Schutzvereinigung für Wertpapierbesitz, a member representing 1.8 million SAP shares. Ladies and gentlemen, you all know the discussions about the Industrial Revolution 4.0.
We are right in the middle of this. We talk about self-driving cars. We talk about the fridge that orders by itself or what's missing. SAP wants not only to be right in the middle of all this, but you want to take the lead. You want to be in the driver's seat and really show the direction. The Strategy 2020, you've explained this several times during the AGMs, and it is quite clear as follows: SAP wants to be the cloud company powered by HANA. For us as ordinary people, that means that we live in the cloud, and that the new business model, as we've seen on the picture right behind me now. We are not quite there yet. We have not made 2020 yet. We are still in a phase of transition, a phase of transformation.
We all know that the road is maybe slightly rocky. The margins are getting less positive. In the end, the economy of scales will pay out, and we'll have a great margin in the future. Superlatives, ladies and gentlemen, that was the topic for many years at SAP. For many years, we've heard about record figures. As shareholders, well, we expect a lot. This year, again, I have to offer some praise. 2015 was another record year, and the fourth quarter was the best quarter in the SAP history. These were not records, yes. The share price, too, developed very well in the last fiscal year. As of October, it went up like a rocket, really, and left the DAX 30 behind it. Today, the share stands at just under EUR 68. We're heading in the right direction.
When the dividend comes into play, well, we can't complain here. EUR 1.15, that's a payout ratio of 45% of the IFRS profit. That comes pretty close to our target. You might say, here again, you're on the right track. The transition or the change is something we feel not only within the company or in Walldorf and the surroundings, but also at the Executive Board. The Executive Board is getting younger and stronger. We've seen the new members. They introduced themselves. Currently, we have eight members of the Executive Board, and the so-called global managing board was dissolved at the end of March. Mr. Plattner, one question here. Up until now, this global managing board was a kind of talent pool for future Executive Board members.
Has it fulfilled its mission, and what is happening with those that were still in it and are not member of the Executive Board yet? Can we now assume that the successors Or that all the plans for the Executive Boards are completed now, and that we have enough successors in the mid to long run. We've all read that the contract of Bill McDermott and Luka Mucic were extended prematurely until 2021. I think that is a clear indication that we have the top executive team for the future. Mr. Plattner, with that, you have eliminated all speculations regarding the setup of the Executive Board. However, there will be one change in the Executive Board at the latest by the 13th of June 2017, because by then you have a plan to have one woman on the board.
Mr. Oswald's contract, we've heard this will end at the end of 2016. There will be room for a woman on the board. Mr. Plattner, we've discussed this topic, women at the board, several times. As yet, this wasn't a success story, but hopefully that will change. My question now, when will we see the new lady? When will we meet her? Have you already started or completed your search for her? In the Supervisory Board, you discussed not only the new Executive Board, but when we look at the agenda, you also have looked at their remuneration. You spend 3 meetings on that. Also, the Personnel Committee discussed this, and you looked at the adequacy of the remuneration of the Executive Board. You also had 2 expert opinions, one, a legal opinion by Allen & Overy.
I like to know what the actual scope of this was, and also the result, and the second expert opinion as regards to the adequacy of the remuneration. Here again, I'd like to know the criterion you used for this expert opinion, and also what the price of these expert opinions was. That, ladies and gentlemen, takes me directly to today's agenda. Agenda item 5, resolution on the approval of the system of the Executive Board remuneration, which has been explained here. I have a couple of questions in that context. I'd like to know what peer group you have selected for this new variable remuneration, as DSW take a critical view if the leeway or the discretionary scope of the Supervisory Board is so large when it comes to the value. It's between 80%-120% in your case of the amount agreed in the contract.
For us as shareholders, it's always difficult to understand because we don't know the precise target values of the boards. Mr. Plattner, you can shed some light on this matter and give us a practical calculation example so that we can actually understand how this works. If we are to approve of this new structure and link it or apply it to the previous year's figures, we'd like to know where we stand right now. The share scale, is it more than they have according to the old system, or is it less? It'd be helpful if you could give us a calculation based on the 2015 figures, and then we know whether we can approve this resolution or not. Agenda item 7, by-election of a Supervisory Board member. DSW does not object here. Quite to the contrary, we welcome the proposal of Professor Joost explicitly.
I think an internet ambassador, that is something we can really welcome to the Supervisory Board. Agenda item 8, the new authorization to issue convertible and/or warrant linked bonds, profit sharing rights and/or income bonds, or a combination of these instruments. When I read this, Mr. Mucic, I actually wonder, why do we need this? Why do we have to have this on the agenda? You have said several times there that in 2016 and 2017, we want to reduce debts. That's the main focus, and we don't plan any major acquisitions. Then I wonder, why do I have this resolution here? We don't need it, do we? Maybe you want to cancel it or take it off the agenda today. Back to the restructuring of SAP. When we look at the 2015 figures, we can see that it costs more than EUR 600 million last year.
That was cost for restructuring. Restructuring, that doesn't sound appropriate for SAP because SAP is not a case for modernization, because it should actually be called transformation costs. Of course, they are linked to the shedding of jobs. The question always is, what's the actual mood? Feeling like in the company, this transformation, has it affected people's minds and people's heads? Have the employees changed their attitude as well? As shareholders, quite frankly, we have to get used to the fact that we only have two fields of business. One, the applications, technologies, and services with EUR 19 billion in top line, that is. That's the big brother, as it were. Then we have a second area, the business networks, with EUR 1.6 billion. That's the little sister.
For us as shareholders, this new structure also means that there is less transparency, because today we don't know exactly which revenues and results occur in the individual segments. Obviously, we'd like to know in great detail about the results of the public cloud, the private cloud. How well does this management cloud business fare at all? We get indications, but actually it's a bit clouded, this transparency. When it comes to the business networks, I'd call it SAP Mini, because in terms of revenues, it's fairly small. You foresee a huge market potential. Here again, we don't quite understand how specific the development will be this year and 2017. When it comes to the key performance indicators, the transformation is obvious. The new KPI now is new cloud bookings. That's the success parameters for sales in the cloud business.
Here again, we have to get used to these KPIs and also what is actually meant by them, and we have to find out what they actually mean. Over the past years, and I'm sure you will remember that, we heard about acquisitions a lot, and we discussed these acquisitions. The last big one was the acquisition of Concur, and today we heard next to nothing about acquisitions because there wasn't any. We'd also like to know what happened with these old, fairly expensive acquisitions such as Concur. Let's look back, or let's take stock. Let's look at the acquisitions of the last three years, including Concur. How has this paid out? What about the integration? Has this run according to plan? Here I'd like to know more details.
At SAP, it's always worthwhile to look at the cost for research and development, because that's the investment into our future. In 2015, you've increased costs here. The ratio is 13.7% of total revenues of SAP. Well, it's difficult to assess it if you don't know what the competitors do. What do the competitors spend on F&E? What's the ratio at your classical competitors, IBM, Microsoft, and also the competitors at the cloud business, for instance, Salesforce? Salesforce. Well, the competitors are not asleep. Salesforce is now active in Germany too. They invest allegedly EUR 1 billion to gain a foothold in your home market. Salesforce, and that's nothing new either, is fairly aggressive. At the CeBIT, they hired two big halls and they are trying to catch customers. Questions now. Have you seen changes in your business due to the Salesforce activities?
Are there changes in terms of market position within Germany? How do the SAP mid-sized customer respond to this aggressive behavior of Salesforce? Talking about Salesforce, I'd also have to pick up on what we read in the newspapers. Salesforce in recent times stretched out their hands to start a cooperation, you rejected this hand. The question therefore, why did you reject this offer? Doesn't it make sense to cooperate or to start a partnership? If I look at what's happening within this industry, you've started cooperations and partnerships with Apple and IBM. You just announced them. In some areas, you're competitors, in other areas, you're partners. I'd like to know what you expect from these partnerships with IBM and Apple. Now, briefly, legal issues. Since the old topic TomorrowNow, we are quite sensitive in this field.
The explanations when it comes to the reserves, it doesn't say anything on what we read in Spiegel Online, because there was a claim that our successful daughter, HANA, allegedly wasn't developed by HANA or Hybris, it allegedly was developed by someone else. Teradata, Oracle, or IBM, it was alleged, were the mothers of HANA, and Spiegel wrote that the SAP acquired or used rights of databases from other companies, and a former employee of SAP in accounting allegedly announced that, and by now courts are supposed to be involved here. We would like to know more about that. Is that true? Is it just a news story? What's in it? What about this third-party development? Mr. Plattner, maybe you could expatiate on that and provide us with more details. Who's suing whom in which courts? Maybe we should provide some reserves here.
Ladies and gentlemen, the future of SAP, well, that is something, quite frankly, I'm not worried about, especially after the exciting presentation of Bill McDermott. Of course, there will be setbacks. The margin will here and there not be as we expected, the capitalization of SAP as such speaks for itself and is an excellent sign, really. SAP currently is the most valuable company in the German DAX 30, that is something we can truly be proud of as shareholders. SAP is also investing into the future, that is something we like a lot. You're very committed. You're building. You have EUR 50 million in Bangalore, EUR 60 million in Israel, more than EUR 30 million in New York City. Also the home market here in Germany, as we can read, is faring well. That, ladies and gentlemen, is a clear signal for the future at Walldorf.
EUR 71 million are to be invested for a new office building in Walldorf, another EUR 58 million for a new computer center. Just under EUR 130 million investment here at the location. I think this is a clear commitment to the location. Finally, let's look ahead, 2016 and beyond. You've hinted that the gross margin will be more or less like 2015. The effects from the restructuring costs will decrease. All in all, you expect EUR 40 million to EUR 60 million in 2016. In the first quarter, we've seen EUR 11 million. That suggests that we'll be rather at the bottom end, better than planned. The first quarter, we had a little drawback because of the software licenses. We were slightly below the plan. You're quite confident that across the complete fiscal year, you'll be able to offset this.
Ladies and gentlemen, once the targets 2016 will be completed and achieved, we can expect further increases of the share, and we can also expect an even better dividend. The short term perspective for us as shareholders is good. If I believe all you have told us as regards the 2020 objectives, then it seems as if we will achieve these objectives because SAP has the midterm target for 2017. They've even increased the targets for 2017. A lot of things seem to point out that the model 2020 for SAP will become reality. Ladies and gentlemen, we can safely say that this is a huge success. As we've heard from Bill McDermott, when we achieve this, we have truly made a major step. We've reached a milestone. Thank you.
It's my turn. The next request for the floor is from Markus Kienle, SdK. In the meantime, let me announce the next request after Mr. Kienle. Mr. Hans-Martin Buhlmann of VIP. Professor Plattner, Mr. McDermott,
ladies and gentlemen of the administration, co-shareholders, I'm Markus Kienle. I'm a member of the board of the Schutzgemeinschaft der Kapitalanleger. Mr. McDermott, that was a most impressive presentation. Indeed, you seem to have invested all your energy and your life into this company. That's indeed a model. The figures you presented showed the non-IFRS figures, which you reached the return on investment measured on the basis of the equity in 13.17%, measured on the 21st of 2015. You also earned your capital expenses. This company is an equity quota of more than 15%, which is not customary in this industry.
For us shareholders, you allow us to participate in the success of the company with a higher rate. Nevertheless, these figures are not reflected in the group surplus. The operating margins, irrespective of whether on IFRS or non-IFRS basis, have declined continuously compared to a five-year period. This is due, as you said, to the switch of business to cloud business, where the sheer increase in volume to achieve significant market share was in the foreground to reach a market position, which then made the optimum scaling of successful figures possible. We are still in the investment phase, but how do you ensure that this sales-driven quantitative growth is not going to detract from profit? What do you think is necessary in terms of revenue to make optimum use of the scaling effect? When do you want to collect the harvest of this quantity-driven growth process?
In connection with the value of your company worth, you assume that application technology and services will show on the average 4.5% of revenue growth, and the rest of the business will grow by 16%. While your forecast for the application and technology services forecast is almost on the dot, your planned assumption for business networks of 150.6% growth is far outside the planning corridor. Did you plan unrealistically for the business segment area? For the business segments, you assume different sales. For the business networks, you have a system more than 100 percentage points over the other one. For the two segments, please tell us the following parameters, risk of basic interest rates, market risk premium, and beta factor. The structure of your segment reporting is not found in the report about profit and loss. Especially revenue of this business segment are not shown separately. Why?
The income structure of the cloud structure, as you said, Mr. McDermott, differs basically from that of licensed business because income from cloud business is not a one-time payment, but in a pro rata scheme over the term of the contract. In the license business, replacement or expansion investments of the customer depend on the economic situation. Is the cloud business less cyclic, and does it carry lower risk than the license business? The question about margin development after the end of maturing or transformation process, here you said the old margins will not be reached again, but by what rate are we going to fall behind that margin after the maturing process has been completed? There's a sort of displacement process between cloud and the old license business. Do you assume that after the restructuring phase, the clearly reduced license process will still be profitable?
Will, for that, lose the critical amount which is necessary to reach the critical mass? You manage your company not in accordance with IFRS, but corrected non-IFRS figures. But it's customary in the industry, which doesn't make it any clearer. Most of these distortions you mentioned because of the IFRS figures are due to growth, especially treatment of purchase contracts on the revenue level. Don't understand this. Consolidation means that the revenue of the subsidiary are consolidated in the parent company. On the revenue level, there should not be any deviation. Of course, it's correct to say that the revenue also, purchasing price was paid for the contracts acquired, which would have to be taken into account on the capital level. When you have a proper purchasing price allocation, there shouldn't be any distortion because the organically generated sales should also be minus the operating cost.
In the revenue purchase, this should mean a difference in revenue. There should be a difference in revenue only if there are different accounting standards between the acquired company and the parent company, which will have to be leveled out in the consolidation. That would not be a problem of acquisition, but of different accounting standards. This revenue effect, would you represent this with respect to the revenue problem? Also, extraordinary effects which may be cleared is doubtful. In the IT business, things moving fast, a certain basic level of restructuring expenses seem to be quite regular. Even if you argue differently, you must know why the share-based remuneration should be cleared. Well, this is an integral part of the old and the new system, which means they will be recurrent annually. Which brings me to the item of the executive board pay system.
The SdK is not planning to approve it. We welcome that pay is variable and thus meeting the requirements of at least 66% of variable pay. We think the short-term part component of variable remuneration over one year is not agreeable with the German Stock Corporation Act. Well, you can see that this part of the pay is found in almost all pay systems. We support the abolition of transition funds. Irrespective of who is responsible for premature termination of a contract, and irrespective of who is responsible, we support your argument. We find that it is indeed magnanimous to release an executive board member prematurely. A bonus for that leaving should be granted only if there's an important reason which the company has to stand for.
The culminating points are the change of control clauses, which are anachronistic, which only because of changes in the shareholders group provide for a premature payment of board members leaving early. Even in Anglo-Saxon countries, this is no longer the case. Changes are irrelevant because this does not affect the shareholders. Pension is contribution-oriented. The SdK feels that the annual contributions should be limited to 20% of the fixed cost. The targets of the parameters must be defined, and what part is covered by the fixed amount. The relatively large amount of discretion of the allocation isn't really up to the facts. To respond to special situations, this bandwidth is not necessary.
As the parameters used for KRPs and are based on non-IFRS, the question is whether it would be better to have also dividend policy aligned by modified non-IFRS base, so that we would have equal movements on both sides. The general staff of the company, in addition to the executive board, merit our thanks for the successful year. I'd like to ask the executive board to convey our thanks to the staff. I wish a lot of success to management for the current business year. Thank you for your attention. Apologies from the interpreter. He didn't have the text, which was read out at top speed. Thank you, Mr. Kienle. Let me read out the updated list of attendance of the basic capital of EUR 1,228,504,232 into just as many shares.
Of these are represented at today's meeting, 863,188,220 shares with the same number of votes, which is 70.26% of the capital stock. On top 750,293 shares are covered by written votes. This will later be included in voting on items two to eight. 863,900,000. No. 863,938,513 shares are represented or represented by written vote, which is 70.32% of the capital stock. This is going to change a number of times. Now, for Mr. Buhlmann. Then next, I'd like to invite Mr. Rolf Nestlé. Thank you. Chairman, ladies and gentlemen, I'm Hans-Martin Buhlmann, chairman of the FP. I represent 6,038,019 shares. As long as you aren't watching me, but watching the cloud behind me, you see the important point of discussion today. We are looking at the cloud like we're waiting for the snake to bite.
When will there be the shower of good results and high dividends coming out of the cloud? What's about the cloud, which is shown behind me with the high rises? The margin has been reduced. Right now, we have participation and interest, but we don't really feel any joy about these acquisitions. As you're watching me, you see the highest tower behind me. If you don't see it. When is the result in place? When is the dividend where you keep forecasting? In 2020 or 2018 with the first steps? Please indicate a reliable, a binding bit of information because today we're being given five pfennigs more as a dividend. We say, "Thank you. We are happy. It's nice to have it," but it's not the end of the development.
In order to prevent you from being criticized later on, you add to the agenda, Mr. Chairman, a point about approval of the executive board pay system. We are still in the cloud. We don't really see too clearly, we should or are supposed to tell you what board members are supposed to be paid. Strange situation. I'll come back to this. We are supposed to elect Mrs. Joost member of the supervisory board. When I heard that she was doing design research, I thought, "Why do I invite somebody to join the supervisory board who does design in an IT company?" I thought she is a woman and we need a woman.
Nasty idea, I learned from your presentation, Mrs. Joost, that it's highly intelligent, obviously, to incite you to become a member of the supervisory board and to hear the advice you can give us, most of all, the board members. I have two questions. How will HANA be dressed, or what do you wear on the cloud? Once you have arrived on the cloud as an angel, what do you wear on the cloud? How do you build a computer and introduce it into my suit? Oh, here. You have the question, Mrs. Kirchepann. Mrs. Joost. Perhaps you could explain this just a wee bit. Ladies and gentlemen, we have a quarterly result to look at, which isn't arousing any enthusiasm in anybody. January was small. Cloud margins moved upward, but the figures were quite surprising to everybody.
How should you assess that differently, that when announcing the quarterly result, you mentioned the salient point as being a strong upward movement in the second quarter? Mr. Mucic, that's the absolute challenge. You should tell us now. The second quarter is 4 weeks older than this report was when you wrote it. Now tell us. You're just the managers. We are the owners. Tell us, how good is it? What do you have in your pocket, and what are you expecting on June 30? Did you reach the point where you wanted to be, or do we have to hope for golden October again? The gross margin in 2015 for SAP is lower. Return on equity is clearly lower, and the operating margin was reduced from 25 to 20 points. It dropped. When will this move upward again? Your speech was committed, Mr. McDermott, full of enthusiasm.
If I understood you correctly, you wanted to tell me and all the others, SAP is everywhere. SAP is not just where legal A cheap seller has its shops, but is also in Daimler Trucks, upper-class vehicles, and also in Karlsruhe, the city of law, and always operating on green current of EnBW, the utilities. The bridge between one flow and the other current will also be introduced by SAP as well. That should put wings on our feelings. Let me talk about the details of a difficult point. On 27 of the report, you say that the supervisory board has a discretion. It pays the executive board in its discretion. I can only say it was that way before. It's no longer as it should be. The supervisory board, in a long-term incentive, proportions shares to the executive board.
The better the company develops, the higher the speed at which the executive board makes money. Well, that can't be. An executive board must be diligent, must like work, must also be motivated, and occasionally has to tell their wives, "Now, it's impossible to work now. I have no time." You carry away EUR 10 million. That's all right. That somebody makes EUR 10 million in a year. I have difficulties to understand. I think this is where the supervisory board, if this discretion is as wide as we just heard, here, the supervisory board should be careful. Nothing works without a caregiver. You said that. Mr. Plattner, incidentally, I don't want to appear as your teacher, but make things simple with blogs. The attendance cards should be given to the internal revenue authorities. Your proxies are collected at the door.
All the men give their proxies to me, and all the women give it to Mrs. Jella Benner-Heinacher. That would be a sound solution. If, in fact, you pay EUR 10 million to one of the executive board members on a clearly reduced scale, just a few million to some others, I think it's too reduced. Think of the others who get clearly less. You must motivate those, too. It's 76,986 people. You must motivate them so that the result that's being elaborated also remains economically viable. Please bear this in mind. Incidentally, I was pleased to hear, Mr. Ries, that you have moved all around.
You saw Microsoft, you worked for HP, you worked as a consultant, now you have all this knowledge, and I hope you'll stay with us and transfer your knowledge collected elsewhere, leading the staff into a new future of SAP, which, among other things, means an award of Economic Dividends for Gender Equality. It's an award interesting to see. Could you tell me briefly what you changed in the female part of the population? We have had more and more sales, not yet to EMEA. That is revenue from the Middle East, North Africa, and Europe, also out of Karlsruhe. The increasingly faster growth of sales, thanks to the cloud, is in the U.S. Especially China or the Pacific area or Asia Pacific also contribute nicely. Does that change the culture of the company? Does it change the culture of the staff?
Does it change the values of SAP if the quality of sales revenue come from other parts of the world at this rate? The best thing about SAP, this is important, is its cash flow. A free cash flow, which has now exceeded the EUR 3 billion limit. Respect. That's the stability of our business. A company which has a balance sheet figure where the first time in this quarter, we enter less than half the amount for goodwill, half of the balance sheet, EUR 4 million cash, EUR 8 billion of debt. You are paid to run into debt, and you have to pay if somebody watches your money. Do we have to change our balance sheet policy?
Did you include item 8 into your agenda only because you want to rephrase your debt at a lower price level, and the EUR 4 billion on the account will then be invested right away because this is what you show on the balance sheet. The difficult thing about the cloud is that you want to understand how it works. Front of this door, but still in the attendance area. Chairman, we have an explanation. You are telling us in the first years, cloud will be expensive. After 4 years, it will become profitable. By year 7, I don't quite know what is going to happen. Do I have to be afraid in the period between 2018 and 2021, you want to harvest what you sowed.
Is that adding up the fixed costs which you're now spending in your computer center, or do we have to expect other negative surprises in that area? Well, when looking at the P&L statement, we must say that with EUR 3 billion more sales, only EUR 2 billion more profit. The operating result is almost all the way down. It's a negative development, clearly because we have high acquisition costs, EUR 738 million for restructuring, for 2,000 people laid off or changed. Well, on the one hand, you hire people. On the other hand, you lay off people, and you have to pay EUR 600 million more than some of us have. There's an extraordinary expense of EUR 2 billion in the current year. Revenues by segment. You introduced a new structure with cloud subscription and support prices. Even your interpreter had a problem pronouncing subscription the right way.
These figures from cloud subscription and support sales, can they be extrapolated? They rose from EUR 600 million to EUR 850 million, depending on non-IFRS or IFRS. Can they be extrapolated from what we saw in the first quarter, 33%+? Can they be extrapolated in the direction in which you planned them? Can we take this as a base, or do we have to regenerate this revenue every year? Does that increase automatically? Mr. McDermott, in your speech, I found a major problem. You told us that late in 2015, the volume of orders in hand for cloud subscription and support amounted to EUR 3.7 billion. When I have the order book of a truck manufacturer, simple. He starts today, keeps building trucks, and that takes care of the backlog of orders. Why do we have a backlog of orders, and why don't we deliver?
This delineated revenue of cloud subscription amounted to EUR 1 billion. Same question. Why don't you cash in that billion? Why do you separate it? I'm not going to talk about the impairment depreciation, but there's one question about the participations, the interest we bought. SAP America shown with EUR 102 million, but with a minus sign in front, a loss. Why does that have to be? Ariba, if it's reported correctly, with an end result of EUR -145 million, and your result, EUR -18 million. SuccessFactors with the same number, but on the positive side, is EUR 100 million positive. When will these figures turn black? When will they become pleasant figures? Did you benefit from this by cross-selling, and we can't understand the individual figures anymore? SAP, say of themselves, have understood their business model, which you tell us. SAP sees a solidly increasing benefit.
We shareholders only want to know, when does it arrive in our purses, and what will we see? SAP is, it wasn't really applauded. Ms. Jella Benner-Heinacher, I know her, mentioned it, and there was applause. SAP is the most valuable share of the market volume at the stock exchange she is in. They are constantly arguing with Bayer, you will have to work every day, that one price goes up and the other goes down, that of SAP. We must remain the most expensive or valuable company. When do we know whether S/4HANA, S4. S4 because it is based on Industry 4.0. S/4HANA, when will the cloud have the largest share in the success of the next few years?
Mr. Oswald, when somebody spends 35 years of his life in one company, and you ask yourself, "Does he really know any other part of the world?" If somebody spends 20 years and was executive board member listed on the DAX, it is valuable to the company, and it is also a sign of excellence to the holder of this chair.
The applause is to you. Thank you very much. That was a surprising finish. I was not prepared for that. I need to sort myself. I have got sorting problems here. The next speaker is Rolf Nestlé, then Dr. Anna Polzer of the German Women Lawyers Association. Mr. Nestlé. Mr. Plattner, Mr. McDermott, ladies and gentlemen of the executive board, ladies and gentlemen of the supervisory board, dear shareholders, ladies and gentlemen. In your report 2015, we read that you work for 300,000 customers. There is also the information elsewhere that there are 50,000 mid-size companies to which you are selling your products. What can you do to make even better business with this very interesting segment of small and medium-sized businesses? This is a very interesting customer group indeed. Are you providing the right kind of mental training to your staff so that your company will continue to perform?
When was the last company meeting, and what was it like? I also have some question on the operating margin, the 20.5% last year, the year before it was 24.6%. For the sake of completion, let me say that according to the annual report in 2011, it was 34.3%. When will we get back into the range of 35%? Because for years you have been saying this, or you led us to anticipate such an increase. In the press, we read that Apple, after IBM, is going to partner or has partnered with SAP to do better business with companies. This cooperation with these companies, how will that reflect on or what impact will that have on your revenue and earnings? Thank you very much for your attention. Thank you, Rolf Nestlé. Now Anna Polzer, then Dr. Klaus Wohlfahrt.
Professor Plattner, Mr. McDermott, ladies and gentlemen, dear shareholders. I'm Anna Polzer. I'm member of a German association of female lawyers, and I work as a lawyer. Our objective is to achieve equality of women in all areas of society. This means equal career opportunities for men and women. This is why we have a project, female shareholders are demanding equal rights. Since 2009, we've been visiting AGMs of stock companies. We are inquiring into the career possibilities for women. We're also active at the European level. With our partner organizations, we visit France, Spain, and other EU states, and AGMs in those countries. The results from the AGM visits were presented in February this year in Brussels. Here in Germany, in May 2015, the law for the equal participation of women and men in managerial positions in the public sector and the private sector was enacted.
This is a milestone law on the path towards more parity or more equality of genders in managerial positions. We are now looking at the implementation and consequences of the new legal framework. Against this background, I have the following questions. First of all, the supervisory board. The law stipulates that your kind of company should have a supervisory board of which at least 30% should be women. This minimum share of 30% on the supervisory board should be taken into consideration when new members are elected or new seats are created. Starting 1st of January 2016, your company has two women on the shareholder and labor bench. This is 22%. For the by-elections, Professor Gesche Joost is a female candidate. She was already part of the supervisory board and on a temporary basis. Nothing will change about the ratio of women and men in the supervisory board.
How will you make sure in your company that you will fulfill the quota of 30% in future? I have the following question to the executive board. The law I mentioned stipulates that there's a certain target value. There should be a public report on the achievement of the target quota with regard to women on the executive board. According to your annual report, the quota of women on the executive board will be one woman by the 1st of June 2017. What specific measures are you going to take to fill that vacancy, if you like? Is there a public profile? How can you make sure that there will always be female candidates suitable for the posts on the executive board? My next question concerns the overall percentage of women in your headcount. According to your annual report, that ratio is 31% of women.
Does this apply to Germany as well? According to the law I mentioned, the two management levels below the executive board should also have women's quota. I would be interested in the current figures in Germany. How many women work at the 1st level below the executive board, and on the 2nd level below the executive board? Please give me the absolute number of women and the percentages for the respective managerial levels. You have targets of 23% on the 1st and 17% on the 2nd level below the executive board level. It seems that this is just conserving the status quo. Could you not have been more ambitious in setting your targets? The percentages do not correspond to the number of women among your headcount. Are you planning to adjust your target figures in the not-too-distant future? How many women are active in mid-managerial positions?
Please give us the absolute figures and the percentages. My next question concerns the promotion of women. How many women and how many men were promoted last year to the first and second level below the Executive Board level? Please give me the absolute figures and the percentages. Finally, how do you identify future managers, women managers? How do you support their development at the management level? Please let us know what measures you're taking and what effect they are having. The people who are in charge of HR, do they have measurable goals to make sure that talented women can exploit their full potential in your company? If so, does the performance of managers flow into their evaluation and possible bonus payment? Who has responsibility for the achievement of these results? Is there a reporting chain through the Executive Board to the Supervisory Board?
My final question concerns corporate communication. We really wanted to ask, how do you communicate the change? There seems to be a trend to keep your status quo. Are you planning to change the status quo with regard to women, and how do you communicate this, and how do you address management and your employees with regard to the topic of having more women as managers? Thank you very much for your attention. Thank you very much, Dr. Anna Dorothea Polzer. Next, Klaus Wohlfahrt, and after that, Jens Starke-Wuschko will be the next speaker after him.
Mr. McDermott, Mr. Plattner, ladies and gentlemen of the Executive and Supervisory Boards, and dear shareholders. I'm Klaus Wohlfahrt. I come from Karlsruhe. I'm a self-employed engineer. I'm pensioned, and I represent my own shares.
Many of my listed questions have already been asked by the people who spoke before me, so I don't need to ask them, but some are still left. Mr. McDermott, in your presentation, with a video, you reported about innovations in Karlsruhe. I'm a citizen of Karlsruhe. Karlsruhe is the headquarters of the EnBW, with its AGM, and Walldorf is not far, but the innovation you presented is something which was hardly covered or not covered in the media. Is this because SAP is just working behind the scenes with a database and with the IT? Because it was only one position on the Turmberg hill where this nice innovation was demonstrated. I'm skeptical whether up there, a bit away from the city or center, there will be any electric vehicles to recharge their batteries at that charging station, because that's basically almost in the forest.
Are the two partners, SAP and EnBW, do they have an equal position in this partnership, or is there a leading company? I looked at the headcount in recent years, and I tried to extrapolate a bit. At the moment, we have about 80,000, or you have about 80,000 staff. If the development goes on for the next 3 or 4 years, in 2019, we will probably have a six-digit number that is more than 100,000 staff. If there are any acquisitions, this figure might be reached even quicker. What can we expect there? If we look at personnel expenditure, which is reported at per capita spending in the past 4 years, 2010 to 2014, that was almost always constant with slight fluctuations, about EUR 110,000 per staff member. Last year, there was a 15% increase to EUR 126,000 per staff member.
Your headcount in those four years rose by 3.5% per year, approximately. Last year, plus 10%. My question is, the higher expenses for HR, is this due to more spending in the area of finding qualified talent or winning new talent or enticing staff members away from other companies? Are there other reasons for this increase in spending? If so, what is that reason? Let me talk about R&D. If you compare the figures related to revenue, in the past four years or five years, we have seen 13.5% as a percentage of revenue. If you relate this to the operating expenditure, this went from 20% to 17% per year, a decrease. Where does this discrepancy come from? Item two of the agenda.
In the dividend payout and the distribution, there's a difference between profit provisions, EUR 1 billion exactly, and the carry forward to new account, EUR 6.8 billion carried forward to new account. Where does this difference come from? Does this have tax reasons or other reasons? Finally, the question of the shareholders. You wrote in your annual report that institutional investors, several of them, mainly in Europe, and the founding members hold between 14%-20% of the stock capital of SAP SE, 14%-20%. The private investors lie at about 18%, and private investors include unknown shareholders. You have shares with names on them. You know all your shareholders, why do you say unknown? Finally, a point not on the annual report, about the AGM. I have been shareholder for several years. I remember the first annual meetings in the Palatin Hotel in Wiesloch.
The number of staff of SAP had four-digit or several thousand, and the last members of the executive board and members of the supervisory board, well, two of them are left, and soon it will be only one. That was a completely different kind of AGM than we are seeing here. Of course, at that time, there weren't any security provisions. I must admit, I have a mustache, so I may look like a terrorist. Hence, I was searched not once, but several times on entering. I had to pass the security gate several times.
My nail clipper was taken away, and this little 3.5 centimeter large, you can't even see it, I suppose, this little metal clamp, because it could be a weapon with which I could maybe threaten the life of a member of the executive board or the supervisory board. Question: Is this really necessary? Thank you. Those were my comments. Thank you, Dr. Klaus Wohlfahrt. We then move on to Jens Starke-Wuschko. I just wanted to check whether there's any translation. If I were an English speaker, we would have to call the translator from his lunch. I'm an independent consultant, and I'm here because I wonder if SAP is an investment into which I should invest more money. My first personal contact with SAP was when I studied economics and IT. This is a long time ago, as you can see from my head.
I then went into a different industry, selling consumer goods. Actually, SAP wouldn't have been a bad choice, neither as an employer nor as a share. Those of you who have been there for such a long time, congratulations. I would like to talk about the topic of courage, and courage is something that the picture on your annual report inspires. Reimagine your business. For those who don't know very much in English, this means something like change your business completely. Mr. Buhlmann associated this with a cloud. I suppose this is, of course, a symbol of the cloud, although the Burj Al Arab in Dubai, which is the highest building in the world, is covered, which is a bit of a shame, really. Otherwise, I think it's a very nice photograph because it reflects where we are at the moment.
Most of us here, if they're not staff members of SAP or people associated, may, of course, have a bit of a hard time. The cloud, this is something that's intangible in a way. What does it mean for us? Courage. I was going to talk about courage. Of course, it takes courage and boldness to go through a transition. Dear ladies and gentlemen of the executive board and the supervisory board, a business model that has been successful for years is changed. That takes courage to change it. I have been in business, so I know what this means.
If you change a business model overnight, if you change your go-to-market as dramatically as SAP does from a license model where you get a lot of money when the contract is signed and later you get less, to a model where you get a little in the beginning and then the revenue is spread out over time. This takes courage because many things can go wrong. You have to invest heavily at the outset and you see the earnings later. We, as Germans, always accuse the Americans of being interested not only in short-term profits. We have an American CEO here, and he does just the opposite. He invests into long-term strategies, things that are supposed to be successful in the long run. I think that deserves a hand, at least from me.
This really does take courage because, of course, we could go on, or you could go on as you have done. We've talked about companies like Salesforce. They are very aggressive on the market. They have a big customer service, and they really focus on revenue and market share. I think SAP is a bit different, which is a very good thing. Secondly, courage. I have another question. In Q1, we see that the revenue changed by EUR 170 million increase in the cloud and overall the cloud and the normal business by EUR 190 million. The cloud grew hugely. The normal business, is it flattening out? Because there's hardly any growth. Basic business, EUR 20 million, that's nothing, almost. Can we expect this to start having effect? Does the cloud really have to step on the accelerator so that we can really grow?
What can we expect in two or three years' time? Will the core business continue to grow, or are we expecting a shrinking business here? If the cloud keeps on growing like it has and will also contribute a contribution margin, then of course, this is something we can live with. I wonder, how is this going to happen? Mr. Buhlmann addressed this, too. What will happen in 2020? When will we see this turning point? When will we really see the cloud taking off, becoming so profitable that the rest is maybe not negligible, but nothing we will have to worry about? Second topic, again, courage. Congratulations on your dramatically better design, your SAP Fiori approach, where you received the Red Dot Design Award. Now, it's great, of course, that also with Ms. Joost, you have someone on the Supervisory Board who looks into this usability.
When I studied, SAP was one thing above all, incredibly difficult to operate and extremely boring for users. This is something they did not want to change, and no one wanted to use an SAP system at the time. Making this user experience better is nice. Entering figures will never be as sexy and exciting as many other things in life, but you don't have to make lives difficult for users. Congratulations on your boldness to invest into that and to say, "Let's change that user interface." The third aspect of courage. Oops, I've got another one. One little example, by the way, why this works in design and also paying attention to applications. This is a Faber-Castell pencil. It is called Grip 2001. This is probably the leading pencil globally.
Everyone who uses a pencil or buys a pencil, when you've felt it has a very nice surface. You never want to use another pencil again. It's the best in the world. I hope the same goes for the SAP Fiori system. Once you've used it, you never want to go back to anything else after that, and you also worry too much about the cost. You can get a pencil for EUR 0.20. When you buy this pencil, it costs EUR 1. People who've used it will never want to go back to the old cheap pencils. The third aspect of courage, diversity, is something you talked about, and I think this is good.
It's a good thing that you mentioned that in the end of your speech, Mr. McDermott or Bill, and of course, I work for an American company, so I can call you Bill, can't I? It's good that at the end it wasn't the hard figures, but the soft factors. What do we do for the people and with the people? This is very important. Nearly 80,000 people work for SAP, and something I liked very much, getting the perspective, looking at the health index, for example, what this means for us as shareholders. We must have a vital interest in the health of your staff, that you work in great offices under great conditions, and you have great support personally, because this makes us richer. This link is something that many companies haven't realized. SAP is leading in this respect.
Of course, it helps us very much that we get these inspirations from America. One question about that. Nearly all figures rose. The number of people who want to stay with SAP, I think, went down by 2 percentage points, I believe. Why is this so if all other figures rise? Can you explain that? I said when I started talking that I feel a bit like Berkshire Hathaway. Why? I think we have a smaller audience, but it's also a stadium, and Berkshire Hathaway is also there, or one of the founders is up there on the podium, Mr. Plattner, as one of the Supervisory Board members or as the Chair of the Supervisory Board. We are here in the SAP Arena, so we can all be proud. All shareholders can be really proud of this. Stick to that.
Something else, unlike other AGMs, most people are sitting there with a broad grin. They know that this is a great company and their money is in good hands. Thank you very much. Thank you very much for all that praise. Another person has requested to speak. I would ask Gerd Verdion to take the floor, please. Ladies and gentlemen, members of the Executive Board and the Supervisory Board, dear shareholders, large and small. First of all, I want to thank you for inviting me and giving us the opportunity to be here. One of the previous speakers comes from Karlsruhe, like myself, and what he said is something I must say I subscribe to. That commitment of SAP in traffic is something that is not visible in Karlsruhe. The day before yesterday, I was at the AGM of EnBW, the energy company.
I heard nothing about SAP there. Quite honestly, if you think that Karlsruhe is worth mentioning as a city when it comes to traffic, now you really put your foot in it, because at the moment, Karlsruhe is the city with so many traffic problems and construction areas, you wouldn't believe it. Mr. Mentrup, as the Mayor, is not really responsible for it, because it was his predecessor who started this. This is something I don't really want to go into because this is irrelevant here. What is relevant here, your praising of SAP, your self-sufficient presentation of all the things that are running so well. As a small shareholder, I don't really agree with you. As a small shareholder, I really trust the share price more than your words.
The share price did go up, but your praising does not seem to be in line with the development of the share price. I've been a shareholder for 40 years, and for 40 years, I've been watching stock prices, and I know one thing. If the stock price isn't going up, then something's wrong. Maybe it will in a while, but at the moment, it is stuck to its position, and so much for that. To repeat myself here, what you talked about, what you said about Karlsruhe, I don't know. If you say things like that and praise yourself, then something is strange about SAP these days. I'm not only a small shareholder, I'm also a person with a job. I work for a company that uses SAP software. It was implemented a little while ago.
I must say, when I started working in 1983, I started working in the IT department. I've always worked with IT and I've always tried to present the applications to users in such a way that they could work with them. What we have from SAP, I'm sorry, I don't know how to do it. No one in our company understands this system. Of course, you may say that the service group is stupid. They're not able to understand it or to implement it. It's also possible, though, that your software is simply too complicated. Right. The person who spoke before me, he presented a pencil. A pencil. Come on. This is SAP. A pencil is hardware, and SAP is software. A pencil, to get back to that example and to talk about the user example, using a pencil.
If I stand here and if I look at the faces around me, all the shareholders, I would say about 60% of them are older than 60. We know that people who are older than 60 have problems with IT these days. There may be exceptions to that, and you may argue that this is not true, but let me just assume it for the sake of argument. A pencil, no matter whether it's from Faber-Castell or another company, no one has a problem using a pencil. With a software, I have a piece of advice. Make your software so that all users can use it without problems, rather than trying to create monuments which the users don't appreciate. As a final remark, the person who spoke before me from Karlsruhe, I need to confirm what he said. What you're doing here, your security checks.
This is really going too far. It's very strange when you come in, two little bottles were taken away. We couldn't take them in. My wife went out and got one of those bottles back because maybe she wanted to have a little sip of that medicine. When she came back in, her perfume bottle was taken away from her. I couldn't believe it. You're taking perfume bottles away from women. You should be ashamed. What would you do if I were going to carry a condom in? Will you take that away from me, too? Because I could pull that over my head and be a terrorist. This is ridiculous. Nevertheless, I wish SAP all the best, and I would like to thank all your staff members who I'm sure are doing great work for SAP.
Sorry if I say so, but you members of the executive board and the supervisory board, you make so much money, I don't really want to thank you. I think you've got gratitude enough as it is. Thank you.
What about me? Can I say thank you to you? Well, thank you. I express my thanks. There's another request for the floor. Thomas Kübler, please take the floor.
Ladies and gentlemen, good day. I have one item I'd like to address. It's about the long-term orientation of SAP. In the business model, SAP has specified that they are making less money, but will make much more money in the future. I like to focus on the environment right now, even today, during our AGM. We live with a focus on the very immediate future. Why do we use just throwaway cups and plates? Why don't we use porcelain cups that can be reused? Right. We can handle this together with the security check. We are not the owner of this hall. If there are no further requests for the floor, I think we start with the answering of the questions. We all agree? Right. Let's start with Ms. Jella Benner-Heinacher. She asked about the global management board. It's been canceled.
Well, we founded this at a phase when SAP was oriented or was restructured with a lot of strategic decision to be taken. During that phase, the extended management platform of the global management board was relevant. This was proven its worth because, as you learned today, many of the member of the former management board are now a member of the executive board. That's Michael Kleinemeier, Bernd Leukert, Luka Mucic, David Brees, and the others. We are well prepared for future tasks. We have eight members of the executive board, including Gerd Oswald, whose contract will end towards the end of this year. We are very happy that Helen Arnold will take over the responsibility for data as a service in the U.S., and she will report to Steve Singh. Quentin Clark is responsible for strategy portfolio M&A and the partner management.
Another question related to when the new lady will be presented that will join the executive board as of 2017. Well, it's correct that the supervisory board at its March 19, 2015 meeting, set itself a goal of having one woman on the executive board of SAP SE by June 30, 2017. Please bear with us that the supervisory board does not specify the recruitment process, both due to the interest of the company and also to protect future candidates. We treat this confidentially, and this also applies to information about where we are in the process and what our plan for the selection procedure is. Among other considerations, we want to avoid a situation in which it might be possible for potential candidates to ascertain whether we have already approached other candidates before.
Another question referred to the peer group we used for the new variable remuneration system. The peer group index included the following competitors, both from IT as from the cloud area, Microsoft, Oracle, IBM, Salesforce, Adobe, VMware, Symantec, Workday, NetSuite, and Tableau. The question as regard the adequacy of the remuneration. Ernst & Young was commissioned to decide on the LTI plan and decide on the adequacy, and also to assess the ambitious goals and to assess the adequacy of the individual and role-based remunerations. The adequacy was in line with the size of the SAP, and since there are no similar-sized companies, this survey also looked at global competitors, not at German competitors alone. To live up to the global orientation of the company and also the business situation.
The remuneration is such that with a view to our global competitors, it is internationally competitive and thus an incentive to work in an international environment. The benchmark analysis confirms that the three elements of the remuneration are in line with what's usual on the market. To consider the main competitors in the future, the future remuneration will be focused more on similar competitors at a global level. We increase the long-term incentive, and we will also pay the remuneration for international executive board members in their local currency. The structure that was introduced in 2012 is still valid, and the adequacy was confirmed by our experts from Ernst & Young. The following criteria were used to assess the adequacy. Total remuneration needs to be in an appropriate ratio to the task and performances of the executive board members and mustn't exceed usual remuneration without special reasons.
A horizontal comparison was done based on companies of similar size and complexity. There is a legal survey by Allen & Overy, and the LTI RSU Milestone Plan 2015 for the last time in 2015 leads to a regular allocation of so-called restricted share units and ends with the end of the current fiscal year. It will be replaced by a new LTI, the SAP Long-Term Incentive Program 2016. In this context, Allen & Overy was required from a legal point of view to assess whether the remuneration system is compatible with the rules and regulations laid down in the German Stock Corporation Act. The costs of the two regulations, the legal opinion cost EUR 12,000 and the survey regarding the adequacy cost EUR 30,000 net, both of them. We were also asked to provide a practical calculation using the 2016 remunerations on the figures of 2015.
Basically, I have to point out that the direct comparison of the previous RSU Milestone Plan 2015 with the new LTI 2016 is not feasible since both include long-term remuneration combination based on different performance criteria, which I'd like to expatiate now. The LTI 2016 is a remuneration component, which apart from the share price development of the SAP, is based on the outperformance compared to a peer group index. The supervisory board decided to take a peer group index as a basis for this plan. The peer group index consists of the main competitors, both from the field of IT as well as the cloud. Beyond that, we've weighed the companies within the index, which above all strengthens smaller and more volatile companies and qualifies the index as a very ambitious performance criterion.
The existing RSU Milestone Plan 2015 was focusing, apart from the share price, on the purely financial key performance indicators derived from the Strategy 2015. Revenues and operating profit based on non-IFRS. To answer your questions, we took the following assumptions. During the calculation, we did not consider the share price development. Target of achievement of the financial KPIs at RSU for 2015 is 112.96%. In addition, the individual adjustment factor for the calculation is not considered. This is a specialty of the RSU Milestone Plan 2015, which refers to the length of the plan. Assuming these assumptions, the LTI 2016 will lead to target achievement 108%, thus being below the target achievement of the RSU Milestone Plan 2015. These were the first questions I can tick off. Right. I can continue. My apologies, my voice is not quite up to standard. I've got a cold.
Still, I do my best for you. First of all, you asked about agenda item 8, since debt service is our focus. The reason simply is the following. We had a similar authorization, which will expire briefly after this AGM, and is to be replaced and is to be renewed for another five years. It's clear. It's a kind of shelf resolution to be prepared for all eventualities. As the Swabians say, "The devil is in the detail." We want to be prepared, and we want to be flexible. We have no specific plans right now. We have no specific plans. In the past, we've shown too, that we are rather prudent and careful in handling these authorizations. We've never used them, so we'd be very happy to get your trust and your approval.
The second question referred to the segments, because you said we didn't know which revenues are done where. What about private cloud and public cloud? First of all, after the introduction of our new segment reporting, we have more transparency in our view. Before 2015, we only had one business segment. Now we have two business segments. Per definition, for the Business Network, we have very high transparency. This segment, Business Networks, when it comes to cloud subscription revenues in the non-IFRS business, we have an increase of 159%. The gross margin was roughly 75%, as mentioned before. In public cloud and private cloud, they are indeed under cloud subscription. They're shown under application services here. This segment increased by 64%, and the gross margin for public cloud was roughly 70%.
The gross margin private cloud, negative in 2015 because we're building up this segment, but clearly better than 2014. We assume that by 2016, in the private cloud, we'll reach break even. In 2020, we'll have a gross margin of roughly 40%, similar to other segments. We expect a gross margin of 80%. The question, the Spiegel Online report and this HANA, who is suing whom, in which courts, and whether reserves have or provisions have to be made. Let me be specific here. Hasso Plattner has commented this report. He will comment on this once again. Quite clearly, the database technology, HANA, was developed independently by SAP. We carefully investigated the approaches. We have no proof that SAP violated IP rights, and neither in Germany nor in the U.S., any competitors have sued us for violation of IP rights. Hasso?
Well, let me add one thing here. The research as regards this column-based database was done at the Hasso Plattner Institute in Potsdam. All my students, all the persons involved in this research work, all the people doing a master study have signed an agreement that they've never worked with Teradata, IBM, or Oracle. This presentation at the large database conference in Providence, Rhode Island, which I gave all the database competitors, where they were present, back then, no one of them worked on a column-based in-memory database. The only such database which was successful in the market was from Sybase. We purchased Sybase, and thus it became part of SAP. This reproach that we nipped or nicked the column-based in-memory database, or that we copied something, is ridiculous, and it's frivolous. Thank you, Hasso.
Before I hand over to Bill, I would answer some questions of Mr. Kienle. First of all, the volume that is required to get an ideal scaling of the cloud business, when do we want to harvest the benefits here? From our midterm guidance, you can clearly see that by 2017, we expect the cloud subscription revenues to be between EUR 2.8 billion and EUR 4 billion. That brings us pretty close to the subscription or software license fees. By 2018, we expect that we will exceed the license for the first time. If you look at our midterm guidance for 2017 and 2020, that during that period, the increase of operating results increases considerably. In 2017, we assume an operating profit between EUR 6.7 billion and EUR 7 billion. For 2016, our guidance is EUR 6.4 billion and EUR 6.7 billion.
We assume that in 2020, we'll reach somewhere between EUR 8 billion and EUR 9 billion. As of 2018, we'll reach the point where cloud will contribute over proportionally to our increase in profits. The question referring to the discounting rates used for the different segments. The question, why the discount factor for the Business Network segment is 100 basis points higher than the ATS segment, despite the fact that the higher risk is in the business segment. Well, the Application and Technology Service segment, which is the classical SAP business, acts in a very mature market and is at a globally very differentiated market, where we're active in very different countries with strong growth.
Different to that, the Business Network is fairly young and dynamic, is active in a dynamic environment where there are lower access barriers, and there's also regional diversification which is not as explicit yet as in our classical segment. You look at the impairment test in the Business Network segment, and you ask the question whether this segment was not planned properly in our impairment test. Well, first of all, we have to say that in our impairment test, we assumed the 10-year period, or we looked at a 10-year period. That is why it doesn't make sense to look at just one year. We assume a growth across the entire period of this 10-year period of roughly 16%. That will make a major contribution to achieve the subscription revenues in 2020 between EUR 6.5 million and EUR 8 million.
That's a growth rate of 28% between 2015 and 2020. Here we expect a significant contribution of the Business Network, which in the first years of this period will develop more dynamically than in the average. Be that as it may, even in that period, we will reach the market saturation, and that is why we expect 16% overall. This impairment test, we also had to look at the current value below. Here we have to focus on externally available information. We can't rely on management planning alone. The analysis we have across four to five years assume growth of 20%, and accordingly, the 16% are appropriate. You also asked about this risk-free base interest and the beta factor for the two segments. Let me briefly refer to that.
In the ATS segment, the base interest rate 2.0%, market risk premium 6.7%, and the beta factor 1.0. In the SBN segment, risk-free base interest at 3%, market risk premium 6.1%, beta factor 1.1. Slightly different values, but as I've said, that's due to the different valuation parameters for the two segments. Even the riskless base interest varies because the Business Network segment is active more in the American area compared to the Application Technology and Services segment, which is stronger in Europe. Both segments have a different orientation, the ATS segment sells services, subscriptions, whereas the network covers the segment mentioned before, and that is why we have a different market risk premium and a different beta factor for the two segments. We have different interest level in the U.S. and in Europe. In the SBN segment, stronger focus on revenues in the U.S.
Accordingly, higher risk-free base interest rate. There's a lower market risk premium in the U.S. market. That is why we have this market risk premium that is 0.6% lower than the beta factor that is slightly higher in the SBN segment, results from the more dynamic environment which we have in this segment. We have two requests for the floor, and then maybe we can answer all the questions in one go. Dr. Barbara Grimberg and after her, Joseph Edelmann. Ladies and gentlemen, I'm Barbara Grimberg. I studied business economics, and I got my doctoral thesis in that. Dr. Plattner, you were quite surprised that one speaker finished so quickly, and now I'm quite surprised that I can take the floor so quickly. In your presentation, or in the presentation of Bill McDermott, I thought it was quite weak.
I attend other AGMs, whether it's AGMs in Germany, the traditional AGs or SEs. During these AGMs, we get more facts and figures than you have presented. We get facts and figures regarding the balance sheet, the financing. We have segment reporting, and that is what I've been missing here. You had no small balance sheet, as it were. You had no small P&L and no revenues, no matter what you call it. You had no liquidity calculation, no cash flow calculation. That's different in other AGMs. Why didn't you do that? Instead, we had, well, a U.S. business show. There was entertainment, movies. It was a nice presentation. Actually, I think that's entertainment, and that's nothing to do with a factual AGM. I mean, I traveled from Bochum this morning. I started with a train at 5:40 A.M. this morning.
When I arrived at 10:00, you can't arrive here sooner, I wanted to have a coffee at 10:00. I couldn't get it. There was no more coffee. There were no more rolls. I think, well, that's weak. In your presentations, you said SAP sets the course. I don't think so. When it comes to the ladies on the board, you didn't set the pace. There are other companies have more women on the board for a longer period of time who are setting the pace. Well, you talked in great detail about your software for predictive maintenance, preventive repair work. Yeah, well, I want to drive a Fiat. A simple Fiat. It's a Panda. It's available at EUR 10,000. Even for such a car, Fiat tells you, "Well, think about it during the next maintenance to replace whatever." That's preventive maintenance, too.
If you go to industrial fairs, that's been announced since 2000. They announced it, this preventive maintenance. It's been a matter of course. You announced this as something new. I think that's not new. It's not so future-oriented. Then you said the link between front office and back office. Well, this information isn't brilliant. I'm not up to scratch in every respect, but I think that in 1996 or 1997 I gave the first speeches on the links of information between front office and back office. That's roughly 20 years ago. You announced this as the latest news. Well, that's a bit embarrassing, and there are more embarrassing factors. Your references, the Hamburg Port Authority, HHLA, that's the brief word for that. That's not a good reference because the HHLA of all port authorities, as far as I know, has the worst results.
There's only one port worse than that. It's Wilhelmshaven, but that's Wilhelmshaven that's under development. Look at Bremer Lagerhaus or Rotterdam, Amsterdam, they're all fairing much better than Hamburg. What is more, I was surprised to hear that you gave some financial figures and then you announced increases in the cloud and the other are the increases in the cloud plus software. I didn't understand it. What exactly is that? Where's the difference? In other words, you buy an SAP solution once, I install it as an island solution on my company, in my corporate network, the other version is I hire the cloud as well. Sorry, I don't get it.
In the context with the detailed figures, I think it's rather poor that you don't make any differentiated comments on revenues and expenses regarding licenses, software, and to differentiate according to the different types here. Whether you use it yourselves, whether you use it, and also with a view to the products, the industries, and the corporate sectors, whether it's just for procurement, this was mentioned several times, or whether it's for the warehouse or for accounting, sales, or whatsoever. The only thing that really went down well with me is internationality. Yes, the executive board is international. If you look at the family names alone, they all sound international, not just purely German. Also when it comes to the many nationalities you have amongst your employees. Yes, you are more international than other companies who generates more than 70% abroad.
We had the ladies from the lawyers associations with their women's quota. You said 23% of management positions are in women's hands. What is that? I mean, how many are at which level? A management level, is that the main secretary to the undersecretary? Is that the first level of management or where does management start, the executive level? If you just have one or two people under you, is that executive level or is that a small department, a project group? I think I want to have more details here. You are looking for new fields of business. You also mentioned renewable energies. Have you developed software too for the transfer of currents in the grids? Because obviously there are a lot of problems here. There is no different metering available in the different grids. In this context, I'd like. You mentioned Lidl.
I mean, this SAP software, when did they introduce it? When did you establish contact with Lidl, when was it implemented, what is your revenue, and how long will the contract run? You also mentioned that you want to hire new staff. You want to have university leavers, interns, and you want to motivate them to file for a job with you, to apply for a job. I mean, 1995 to 2010, I applied several times at the Hasso Plattner Institute at Potsdam and also answered job ads at SAP. If I was lucky, I got an answer telling me, "No, I am not suitable." I expect that if I don't even get a negative answer, you think I'll get the message. You mentioned real-time. I think real-time is something that's been mentioned since 1999, 1990, 1995. Just-in-time information. I mean, everyone has it.
It's been available for many years. You have it on your mobile, on your laptop, or on your whatever you call the device. Real-time consumptions and whatever. I can only refer to Fiat. I had a Punto before. Now I try the Panda. This Punto had real-time. It cost EUR 12,000 back then. I had real-time information there. I pressed the button and got real-time consumption, say, over the last 10 kilometers, I consume that. On average, it consumes that, or what have you. Even if these small cars that are looked down on by many people, if they offer real-time figures, I think that's nothing special. Right. Next item. Today, we also talk about by-elections. What I'd like to know, Professor Joost, who will replace Mr. Mehdorn. I would like to know why Mr. Mehdorn stepped down.
I think it's nice that a lady will join the board. That's good. Also, with the academic degree, more than the gentleman has. That's good. What I'm surprised, I mean, in the CV, as you've published in the invitation, the main course of study, that's quite questionable. First, she studied at a university of applied science, then she added, shows a brief study of rhetoric. I mean, I studied in rhetoric. That's something you do one or two semesters, but to study rhetoric full-time, that is something, well, I've never heard of. One woman is nice, but more women would be better. Maybe you could have find someone else in the field of IT or mathematics. As regards Professor Joost, I'd like to know what their teaching obligations are, the number of SWS.
If you look at the invitation, she has 6 additional jobs, positioned amongst others, the Internet Ambassador for the EU, and she said that she travels to Brussels a lot. There are other 6 positions. She mentioned she has 1 main job and 7 ancillary jobs. She also works for a company that is a start-up company, and you know that that kind of companies are quite chaotic and require a lot of time, even more than ordinary, well-established companies. If we assume that there are 5 meetings for each of these ancillary jobs she's mentioned, and she's got 7, that's 35 meetings a year, and I wonder how much time she still has to fulfill all her jobs. I'd like to know how many shares Ms. Joost had before she was appointed to the board.
The previous speakers also mentioned that there are not enough women on the board. What about myself? Well, I couldn't get a job with the SAP Plattner, but maybe I could get a board position. I've been trying since 2000, but until now it didn't work. I'm not the one to blame for that. I'm fully motivated, but as I've said, I didn't get a job offer. What is more, I'd like to know, and that's been published everywhere, TTIP. What's your assessment regarding the TTIP? Would that enable you to sell more software due to the fact that the companies are required to do different type of accounting, but also because new markets would open up to you? We have a dividend of EUR 1.15 this year. Well, that's not really great. If you look at a share price of EUR 68, it's just 2%.
On the other hand, where do I have this profit of EUR 9.2 billion, which you indicate and then split into the dividend and also the other items? The SAP share price was mentioned, too. If you look at the SAP share price, we also have to bear in mind that there are not many alternatives. Interest rates are really down. What can you do? You buy shares. That is why many people say that the share price is inflated artificially because the other alternative would be to buy a small flat or to buy a house or land. It was also mentioned that the remuneration was addressed. In this context, I like to know the special bonus paid to your employees. How many staff do you have? How many of these employees are paid according to the wage negotiations, and how many get a bonus?
What was the maximum bonus and the minimum bonus in EUR, not in %? In the context with the invitation, this invitation booklet, I can only come up with nasty comments. The title is quite nice, "Reimagine your business." Re, is this kind of reinvention? I mean, the skyscrapers are getting through the cloud, so you're above the cloud. I think that's quite confusing. If you produce skyscrapers, yes, I could have understand this, but the clouds dilute the picture so much on that. The invitation, what I don't like here compared to other invitations to AGMs, on the second, third, fourth, or fifth page, you find a table indicating the most important figures of the balance sheet, a brief overview regarding financial figures or the balance sheet. You could have shown that as well because you're a group that wants to help others to be transparent.
Linked to the high remuneration, you should also consider that you are only the employees of the company. That is why I think it's just an excuse if you say we requested an expert opinion and they just confirmed that others do it likewise. Others did it likewise and are no longer around. I think that's a rather banal statement. What I'd like to know is what are the SAP costs for the listing at the stock exchange, expenses for stock losses, and other administrative costs connected to the listing at the stock exchange, the investors. Do you pay contributions to the Handelskammer, the Chambers of Commerce in Germany? How many FTEs at SAP work in the tax department? How many FTEs work in the legal department? How many FTEs work in the field of real research and development?
That's true innovation, which will result in licenses to be sold, which will affect the future of the company, too. The new remuneration of your executive board. You should bear in mind that you should learn from the mistakes and the examples of other companies. What about pension provisions for the new executive board members? I'm sure that has been indicated. Why? If I have an income of EUR 10 million, without any problem, I can spend EUR 1 million or EUR 1.5 million as my private old age provisions. As a small company, I'd like to mention PTN or HHLA, the Hamburg Port Authority. There are no pension provisions, no provisions for newly appointed board members. They get a base remuneration of EUR 300,000-EUR 400,000. On top, they get performance-related pay. They can finance their pensions themselves.
On the other hand, you say that your employees, as shown in the press, they should take care of their old age. They have an average annual income of EUR 65,000-EUR 80,000, and they have to save on that for the future? You could save if you make EUR 1 million or EUR 10 million or even more. I think it's just not acceptable. Coming back to your profit of EUR 9.26 billion, part of which is paid out as a dividend. The first question, where does this retained earning come from? Is that a pseudo earning like a balance sheet extensions? That's what other companies have done in Germany. If you have a true annual profit from your product sales. Product includes your services or others.
If that is a true profit from your core business, then this profit should be distributed in three parts. One new investment, one-third employees, that includes you as the executive board, one-third for the shareholders because they provide the capital or even more is split into four, to build provisions for hard times in the future. I think the comments that the board is remunerated appropriately, I think that sounds really arrogant. You should also bear in mind that the EUR 10 million that are paid out, just calculate them and break it down to the entire cost. This is a big cost factor also for Germany and Europe. I'd also like to know what the VATs that you pay.
The VAT which you pay on all you purchase, license, material, current or what have you, and what's the VAT which you earn for the services which you sell as your core business? What are the costs of the AGM as regards catering, the local public transport ticket? I couldn't benefit from that, but I think that's very generous. Security, invitation, and what have you. How many shareholders do you have in total? How many shareholders have you invited? How many have registered, and how many are here today, plus guests? I also like to know the number of improvements tabled by your employees, how many were tabled, how many were implemented, and what are the premium you paid to these employees? What are the benefits or savings resulting from these proposals? What's your age structures?
What was the age of the oldest person hired in 2015? What was the contract he or she got, and what does he or she do? Thank you very much for your attention, and thank you for not limiting my speaking time. I wish you all the best, and think about the fact that part of what you told here was a bit of a lie, really.
I think we'll continue to meet for some time, at least us up here, to answer all your questions. Let me take three questions. The figure for 1995, 1996, HPI, it's not the Plattner Institute, the Hasso Plattner Institute of Potsdam University. At that time, there was no possibility to apply for a job. Mr. Mehdorn stepped down from the supervisory board because I asked him to do so in order to meet the legal requirements and adopt a woman as a candidate for the supervisory board. Hence, I had to ask somebody to step down. Your remark about secretary and secretarial management plus undersecretaries, that was really not up to standard. We'll have to invite somebody else. We have another request for the floor, Mr. Joseph Edelmann. I'm Joseph Edelmann. I'm a minority shareholder, nor would I want to apply to SAP for a job. I'm a pensioner.
I have a question about cooperation with Apple or IBM. When two market leaders as strong as these companies cooperate, agree on cooperation, then most probably, something really strong will emerge from that cooperation. It means more market presence, use of synergies, et cetera. The question about cooperation is always which partner afterwards will have access to clients. Is it both? If it's both partners, how do you harmonize your approaches, or how do you agree on market allocation? Is it one only? Of course, the question arises, which of the two is it? Will the customer then, in the end, buy through the Apple store or the SAP store? This is linked to another question. How do we protect our SAP software? How does SAP protect against the knowledge drain to the partner? I'd appreciate your reply. Thank you. Thank you very much, Chairman.
I have two simple answers. Why we are using throwaway dishes? The SAP Arena, for security and safety reasons, will not make available any dishes made of porcelain, but the dishes and cutlery we are using can be composted and is good for the environment. The security aspect is handled by a security company, not by SAP. Another point, then it's for you again. How in your company do you ensure that you'll have a quota of 30% of women? I contributed to that point by asking other supervisory board members to step down and return the post to me. As these mandates can be used up to their regular end, the next election will be in 2019.
To meet the legal quota of 30% of women on the supervisory board, we are trying hard to find qualified, suitable candidates in order by 2019 at the latest, or should the supervisory board, they believe, earlier, propose suitable candidates. We take it that this will allow us to meet the legal quota. There was another question by Dr. Anna Polzer about the share of women in the executive board. She said, quite rightly, the supervisory board said that the executive board of SAP SE by June 30, 2017, should also include a woman. Different measures support our goal to increase the number of women in our executive positions, which applies to executive board positions, starting from recruiting. Clear criteria for shortlisted men and women. This is done by special management programs. There's also a clearly defined succession planning with at least one female candidate.
We will clearly see to it that women and their personal development will be raised to the next higher development stage. For instance, in so-called fast-track programs, where especially female candidates are trained specially and sponsored and prepared for the step to the next higher career level. Please bear with us. The supervisory board is not going to divulge the selection procedure for executive board members. This is confidential; hence, there's no public profile of criteria. We make sure that when appointing a new member, suitable female candidates are included, and in succession planning for the members of the executive board, internal and external candidate searches are to include suitable, qualified candidates, and they should be shortlisted as well. Mr. Mucic goes on. Let me continue and then pass on to Bill later on.
Cloud business, is it less cyclic and more stable and lower in risk than license business? Yes, it is. That's natural only because in the cloud business, customers have no advanced investments of a high level but make their investments over a level of time in the subscription contract, which he can give up when he has no sufficient satisfaction with the solution or no confidence in the solution. He has more flexibility, which in times of volatile economic environments, also has a certain element of charm and is attractive to clients. Next question. After completion of the implementation phase, will the cloud business yield as much profit as the permanent business? At a mature condition, the cloud business may be as profitable as classic license business or even more.
Taking into account different factors with various business models in the cloud, which have other optimum gross margin prospects. In the business cloud, they're a bit lower than in the public cloud. We have a phase where the cloud business must be scaled up. The higher the path of new business is, purely contract extensions, the less there will be an increase in profitability for structural reasons. When the share of the extension business increases relative to new business, the improvement in profitability in the cloud model will increase, which is quite normal. We take it that our profitability will be increased also in that respect. The question, is there a risk that after the end of the restructuring phase, clearly, smaller license business can be run profitably or is there no critical amount for profitability?
If you look at our midterm guidance, we said that also in our classic license and maintenance business, in total, the gross margin will be 2% higher by 2020. That's our plan. Our maintenance business rises stably and will continue to rise in a calculable way. Within the classic license business, the relative share of the highly profitable maintenance business compared to the less profitable new license business is likely to rise. We don't have to worry. The question about the structure of the P&L segmental reporting not shown in the P&L statement. Why so? As I said to Ms. Jella Benner-Heinacher, we are quite transparent. We have two business segments, Application Technologies and Services and SAP Business Network. The individual contributions made by these segments can be found transparently. Why don't we show this in the P&L statement by separate sales columns?
Because many of these revenues are comparable. In technologies, you have cloud revenue. Also in the business network column, you have these contributions. To make the P&L structure simpler, I think it's better to show the different contributions as shown transparently. If you look at subscription revenue, in segmental reported, you see EUR 961 million revenue for cloud, and Application Technologies and Services of EUR 1.137 billion for subscription in the SAP Business Network. The addition to EUR 2.3 billion, a bit less. I think we are indeed quite transparent. On non-IFRS figures, Mr. Kienle, why share-based remuneration? Two reasons. In order to make us comparable with our competitors, which, as a matter of principle, exclude share-based remuneration from its pay figures in order to make apples comparable with apples by the end of this. There's also operational control.
We manage the company also by our non-IFRS key figures. Why so? Because we would have had a hard time to influence the stock price. Of course, we can by having a positive operating activity, but there may be external factors causing high volatility. If the share-based remuneration were included, it would mix up the situation. Hence, we don't want to have these extrinsic factors affect the final figures. The dividend policy. Shouldn't that, too, be based on non-IFRS quantities? There's one problem. If non-IFRS results are used as a reference, cash flow effective effects would not be taken into account. Ultimately, the payout sum must be affordable in monetary terms. Only the amount effectively available can be considered. It's factual that the IFRS result of the taxes is taken as a reference base, which is customary. Now, Bill, on to you.
Frau Jella Benner-Heinacher, I just wanted to thank you for your kind remarks today. I greatly appreciated them. Thank you. To answer your questions, I have a couple of them. You entered into partnerships with IBM and Apple. What are your expectations for the partnerships? Basically, we're combining the new and powerful native apps for iPhone and iPad with the cutting-edge capabilities of SAP HANA, and putting this in a cloud platform with essentially the software development kit from SAP, where we can access 2.5 million developers to build new innovative applications on top of our software development kit. One of the developments in the enterprise is that people that come to work in the enterprise expect consumer-grade experiences on their enterprise technologies. Apple and SAP joined together, bring that to life on these devices. You look at beautiful applications on beautiful devices.
It entices you to buy more SAP software. For Apple, it's pretty simple. They have to grow their enterprise business. They have a EUR 25 billion enterprise business now. They'd like to take it to EUR 100 billion, SAP is the best idea for them. The combination of the two is quite powerful. It also should be duly noted that Apple is a very large and significant SAP customer with the largest single instance of SAP of any company with a terabyte system, and they love SAP, and we'd like to encourage them to run SAP as well, HANA. They'll be a nice reference for us as we are for them. Another question was, we didn't hear a lot about acquisitions today. What has happened to the former relatively expensive acquisitions such as Concur? What has been the contribution from these acquisitions so far?
Has the integration of the acquired companies gone according to plan? Very good questions. First of all, we're really satisfied with all of our major acquisitions because they fit beautifully into our product portfolio. If you think about the platform, the applications, the cloud, and the network, and SAP controlling all of that, these acquired companies were very important to our future vision. We have successfully integrated these companies. In the cases of the network, we capitalize on non-integration because they can attract so many more net new customers to SAP. Our reach goes much further and much wider. Our strong growth rates did not just happen in 2015, but over the past 12 quarters.
In fact, over the past 12 quarters, we have increased our cloud subscription revenue by much more than 30% on a run rate basis, and we have achieved the upper end or better than our guidance range consistently. Everything is going according to plan. Additional input might be, if you think new cloud bookings is an important measure of cloud performance, we have done pretty well. In 2015, new cloud bookings increased by 100% to EUR 874 million. When you see the revenue and then you see the bookings that are growing even faster than the revenue, it gives you a great deal of comfort on the future of our prospects in the cloud indeed. Thank you.
Looking at your 2015 numbers, you can see SAP had more than EUR 600 million restructuring expenses. Were these costs in connection to reduction of personnel? You have to ask, what is the mood in the company? Do the employees believe in the transformation of the company? Have the employees shifted their attitude? The results of our 2015 employee survey are the best indicator of the mood among our employees. It is measured by the employee engagement index, which had an extraordinary high rating in 2015. The index has a stable upward trend and increased two percentage points to 81%, its highest level since 2010. Employee satisfaction increased in almost all aspects and questionnaire items. With our vision of helping the world run better and improving people's lives, we won't stop here.
We have identified two priorities for 2016 from the results of the survey, simplifying our processes and our ability to innovate. Employee engagement remains one of our strategic goals, and we remain committed to achieving 82% in 2016. This is an ambitious goal, since in comparison to external norms, our current level of engagement is already in the top 10%. Employees are very open to the transformation and embrace communication initiatives like Tell It Like It Is. We are also investing in our growth markets internationally and in Germany, which builds trust. Thank you.
Serve the SMB customer segment. We agree that it is a very large market opportunity. One that we think that SAP has the right solutions and capacity to serve. Today, Concur very effectively serves the SMB customer segment. We think we have a very rich set of ERP solutions and e-commerce solutions, HR solutions, that can be delivered into the SMB customer base, and that's a high priority for us in the years ahead. It's one that will be an area of strong focus for myself. Thank you.
Well, let me go on then, handling Mrs. Jella Benner-Heinacher's question about the cost for R&D. As you were correctly mentioning, the quarter of 13.7%, in particular, is an investment into the future of SAP. As far as we are concerned, it's remarkable because we are in the middle of a transformation process. The question was, how do we fare compared to our competitors, both in classical business where Oracle, Microsoft, IBM, we mentioned as examples, and also vis-a-vis competitors in our cloud business, Salesforce, for instance. When considering the key figure, the share of R&D costs in the overall revenue, we must compare with our competitors and say first that these are indeed different levels of business and maturity of companies, but also companies which have different business models. Let me repeat, although Cloud subscription revenue is a topic mentioned repeatedly today.
In particular, upstarts invest clearly more into R&D and have to do so more than established old companies. In young, and especially young cloud companies, research and development costs, relatively speaking, are still clearly higher again because in subscription-based revenues, the business is building up gradually, and there won't immediately be a reflection in the balance sheet. Now, for instance, you asked about Workday, which have a research and development share of more than 33%. NetSuite and others, competitors in the cloud, have nearly 14%. Salesforce, only 12.4%. Those were some first data about competitors in the cloud. And you can see that the different shares, even in cloud-based companies, show the degree of maturity and status on the market. Workday, a relatively young company with relatively low sales but a high capitalization on the stock exchange, shows relatively high investment costs.
By contrast, Salesforce, available and active in the cloud business for a long time, has only a share of 12.4% compared to Workday. In the area of classical competitors, comparison with Oracle, the R&D costs of theirs are 13.2%, and they try also to take some first steps into the cloud. 13.7% in our case is roughly comparable with Oracle as far as the percentage share of R&D cost compared to sales is concerned. We invest continuously into research and development, and we benefit especially of the fact that these investments and also the know-how, both for software as a service for subscription-based approaches and for the upfront sales, can be used for both approaches.
It applies to applications because here we follow an approach to the effect that we first develop for the cloud and then take another step where these innovations are then made available to the on-premise solutions that are integrated and then delivered. I'd like to conclude by saying that we have a clearly more efficient approach than many of our competitors, which is also reflected in the performance figures presented by Bill. Thank you.
With Apple and IBM, how will this cooperation impact revenue and profit? Let's take Apple first. One of the interesting statistics since the announcement with Apple last week, we have 4.5 billion impressions on the Internet. It's pretty obvious that the world was interested in that announcement and two global juggernauts working together for customers. Again, this consumer-grade user experience in the enterprise differentiates us. Beautiful devices with beautiful applications that people love to use sells a lot of software. Apple obviously needs to capitalize in the enterprise because it's a major growth opportunity for their company. It's a win-win. Similarly, the SAP HANA Cloud Platform is huge to our future, and the software development kit that SAP supplies is engaging 2.5 million developers to build new innovation in our cloud platform.
Yes, of course, provisioning that to Apple devices is a win-win. On the subject of IBM, one interesting part of this partnership, because as you all know very well, it has been going on for a great number of years, is that the HANA Enterprise Cloud is a wonderful way to provide our customers solutions in a private cloud environment. IBM has openly embraced S/4HANA, and IBM is now channeling their sales force to support S/4HANA in the enterprise. That is good for our software sales, and it is also good for IBM because sometimes their hardware and their services will support SAP software platform. Everybody wins. Both of these partnerships are strategic, and I think we can really grow our company by supporting brands like IBM and Apple with huge channels and sales forces. Thank you.
I propose that we now let Mr. Ries answer. He has got all the numbers to answer Dr. Polzer's questions. Thank you, Luka. Dr. Polzer, you asked a few questions about the support and promotion of women. One question was how many men and women were moved to the first and second executive levels below the executive board level. For the first executive level, one woman and one man were promoted, so it's a 50/50 relation. Globally, last year, it was one woman, 16.7%, and five men, 83.3%. For the first management level below the executive board. For the second management level in the past year in Germany, six women, that is 25%, and 18 men, which is 75%, were promoted to the second executive level below the executive board.
Comparison for the past year was 10 women, 20.8%, and 38 men, which is 79.2%, second executive or management level below the executive board. Your second question was about whether the numbers of female executives at the first and second management level were maintained. Status quo isn't really the proper name. Let's comment that the law that was introduced only granted us a short period of time up until 2017. Indeed, we are assuring the status quo because we think it's unrealistic in that short period of time prescribed by law to achieve this increase in any other way. Certainly when defining future goals, we will have a close look at where we want to increase these numbers.
Which also leads to the next question you had, where again, you inquired whether we're planning to increase these target figures in a foreseeable time about female managerial staff, because it doesn't correspond to the female quota in the workforce. On the 30th of September 2015, the executive board stated that the status quo will be retained. At the present time, a higher quota is not adequate in our opinion. The reasons being that we are a technology-based company, and we still, especially in Germany, have very low numbers of graduates in this so-called mathematical, computer science, natural sciences, and technology disciplines. Target of 30% or more would mean that more than one out of two women would want to move up into an executive position, which we think is not realistic. Also, because there are women and men who prefer a technical career to any managerial position.
Next question that was about the identification that way. How do you identify future women who are to be advanced? How do you support them? Please tell us about measures and their implementation. Let me answer like this. The identification of future women in management is achieved in different ways. On a central basis, we issue clear criteria that men and women should be represented, must be represented on a short list so that at least one female candidate also appears when succession is planned. In fast-track and sponsoring programs, female candidates with a special potential for the next management level are not only identified but also qualified individually. Regular internal and external communication ensure that the targets for more women in managerial positions are not just lip service. No lip service at all, but are consistently implemented by clearly defined programs in SAP.
The development of female talent on a managerial and executive level cover various areas. Let me emphasize one, the Leadership Excellence Acceleration Program, LEAP, and offering 360-degree evaluation and role-based development plans for each managerial and executive level and programs to strengthen our trust and confidence culture. Your next question was about how many women are active at middle executive levels, absolute numbers and percentage. This globally, in the middle management of SAP, 365 women work, that is 19.3%. Next question, that was about Germany. Share of women in the company is 31%. Does that figure apply to Germany as well? Germany, the share of women in the workforce of the company is 5,474 in absolute numbers. The share is 29%. That is the status of March 31st, 2016.
Next question, that was about you wanting to know whether we put before our managers measurable goals so that talented female staff can make full use of their potential, and if so, is that also assessed by managers and by their bonuses? Who is responsible for the result is the reporting chain via the executive board up to the supervisory board. Let me answer like this. It's the duty of every manager to best develop his or her staff members. We need this for development and the change of the company into the cloud. To make this measurable, every executive, as Bill McDermott said today, is evaluated with the so-called Leadership Trust Index, so that every staff member and every manager are able to evaluate each other's performance. The staff can evaluate the performance of his superior.
Suitable programs about personal development, of course, are handled by my segment, HR, and are offered. In general terms, the performance of the respective managers is the basis for their assessment and also for calculating their bonuses, which applies also to the staff, not just to managers. Hence, your question must be answered in the affirmative. It is included. For identification and promotion of future women in the management positions, the SAP organization is responsible in total. Areas like our sales, which recognizes not just talents but also promotes them, and also cooperates with us in HR in developing promotion programs and offering them. On a supervisory board level, especially the committee on staff and organization matters, is involved in the subject, and the executive board reports to it regularly.
Next question, how many women work in your company at the first and second managerial level in Germany, immediately under the Executive Board and the second managerial level? Absolute figures at the first executive level below the Executive Board, we have three women, 27.3%. Second managerial level is 13, which is 14.6%. Are you planning to change the company in order to have more women in executive positions? How do you communicate this intention, and how do you communicate to your staff and to management this wish? The answer, the plan change to introduce more women into management position is a permanent part of our corporate philosophy.
We communicate this not just in information events on the spot, but use also technology by so-called virtual live sessions, staff meetings, and events such as the internal so-called Women Executive Leadership Forum, where staff members, male and female, are addressed directly and are incorporated in support programs. Through internal communication platforms such as SAP Jam, we have a regular exchange of information on top of that. Executives and managers, in addition, are informed not only in newsletters and teleconferences, but also separately about the subject of women in managerial positions and also informed about the offerings and the measures that are offered. I have three more responses addressed to other speakers. Mr. Rolf Nestlé asked, "Were your staff members trained for the last time in order to produce good results in the future?" I must say, there's no last time. It's a recurrent process.
Our staff simply are the most valuable capital we have, this is why SAP invests into a continuous advanced education program across all career levels. Our staff have the possibility at any time to participate in trainings. What's important, in particular, we learn not just in training courses, but we also learn very much in direct contact with our customers and also among each other in order to pass on experience and knowledge. SAP, just to give you an example, in 2015, had an annual global budget of more than EUR 100 million for these purposes. Second question by Mr. Rolf Nestlé, that was largely answered by Rob Enslin. When did you have the last staff survey? In 2015. Again, the results were outstanding. From 77% in 2013 to 79% in 2014, we've now reached 81% in 2015 of staff commitment.
An exceptional level, which also within the DAX-listed companies and in Germany, is unparalleled. The employee engagement index is within the top 10% compared to external worldwide and other references across industries. Last but not least, an answer to Mr. Jens Starke-Wuschko. Almost all numbers increased. Only the number of people who want to stay with SAP dropped by 2.5% points. Why, when all the other figures keep rising? Well, initially, we're extremely proud that more than 90% of our staff in 2015 wanted to stay with the company, which is quite all right. It is far above the average of the industry.
Of course, we also see the global competition and the fluctuations of this about 2% compared to 2014, which we attribute to the fact that on the one hand, we had restructuring programs. We have a very interesting target, or are an interesting target for other companies, which are fond to lure away the highly trained staff members of SAP. Back to you, Hasso. Yes, there was one contribution which maybe Gesche Joost could make. Yeah. Thank you very much. Two questions were addressed to me, one by Mr. Buhlmann. What you will have to wear in the cloud. Wear the computing, as I said in my introduction. It's a major trend. You know the fitness trackers you can wear on your arm. It's a trend.
I investigate microcontrollers integrated into clothes, and then, of course, they are connected with the cloud and communicate via the internet. This can be used for fitness tracking, for rehabilitation, health services, for monitoring, and this is why clothes in the future will become part of the Internet of Things more and more so. These are questions I investigate in my research activities and which I'd like to also propose in SAP. The other question, Dr. Barbara Grimberg, she worried about my variety of activities. No problem. The activities I represent on the executive board of the Studienstiftung des deutschen Volkes or the Goethe-Institut, these are societal commitments, unpaid, and no paid jobs. The Studienstiftung meet one or twice annually over the weekend, normally, and my work also as a digital ambassador is reduced to evenings and discussion events, much of it taking place in Berlin.
I can really do all this, and I'll be able to occupy my mandate with SAP. I have a research professorship, so I have four lectures per week, which is little compared to nine or 12 lessons per week. All right, we have another request for the floor. Mr. Yerdalian wants to step up to the mic again.
Thank you for giving me the opportunity to speak. It's been a few minutes, I would like to thank the lady who spoke a little while ago. What she said was very true. From my point of view, she could be an excellent candidate who could take a seat on the podium. Unfortunately, I remember last year or the year before, it was that she applied for a post, actually. Unfortunately, you have to be born as a member of the executive board or the supervisory board, don't you? Because it's not easy to get in. Once you're in, you can collect these posts like stamps. I hope you don't mind my saying so. It's a bit provocative.
Now, the thing about Mr. Mehdorn, I remember it was last year or the year before, when I stood here and said that Mr. Mehdorn should not be on the Supervisory Board of SAP. He only costs money. At that time, there was already a quota for women, which should have been fulfilled. Why didn't they choose Ms. Joost or maybe the other lady who spoke? Why weren't they invited in? That's a bit strange, isn't it? My specific question is, the resignation of Mr. Mehdorn to make room for women, you suggested to Mr. Mehdorn that he resign from his function so that you could get a woman in that you chanced upon. How was that transacted financially, that departure of Mr. Mehdorn? Or how was it remunerated, or what kind of severance payment was made?
What kind of cost was incurred by SAP to shed Mr. Mehdorn? Was it a severance payment or a pension guarantee or anything else? What kind of future cost will be incurred, caused by his departure? Finally, I would like to say that there are some speakers left, women or men at SAP, who still speak a little bit of German. Thank you very much.
Buhlmann. The question was a very interesting one. Second quarter results. Do you expect to deliver on your expectations by June 30th? Thank you for the question. We do not provide guidance for an individual quarter, as you know. We provide an outlook for the full year and our midterm guidance. You have a good feeling now for 2016 and our midterm guidance of 2017 and 2020. I can say that we have a strong pipeline and we're ever confident based on our strong product portfolio that we'll remain a leader, and we look forward to giving you more disclosure on our actual results in July as scheduled. Thank you very much.
Herr Jens Starke-Wuschko. In Q1, revenues in the cloud increased by EUR 170 million. The total cloud and normal business by EUR 190 million. Is the normal business drying up already? Does the cloud business need to run at full speed now in order to achieve true growth? What can we expect in 2-3 years? How will the cloud business grow through 2020? The answer is, you may have noticed that software was weaker than expected in Q1, our smallest quarter. This is reflected in your calculated absolute growth rates. There is no reason to be unduly concerned because we have experienced very strong growth in our on-premise and cloud business in the final quarter of 2015. The order volume we built up last year is now being incrementally realized as revenue.
What's more, we grew our cloud revenue by 33% at constant currencies in the first quarter and increased our gross margins in the cloud. You can see from our outlook that we expect strong cloud and software growth of 6%-8% at constant currency for 2016. Bernd.
Yeah. Sorry, Bernd.
Okay. Bernd. Next question I would like to answer, from Ms. Grimberg. She asked about new business fields. Whether the energy industry could be a possible field of business. Does SAP also develop software for the transmission of electricity into national or regional grids? The energy industry is undergoing massive change. Together with PricewaterhouseCoopers, but also from our discussions with customers, we saw that these changes are coming very quickly, and they are radical. One statement from the study proves that the leading energy companies in Germany and Europe, 35% of them report that the existing business models today don't work anymore. There is the buzzword of the prosumer. These are consumers of electricity who also generate electricity in their house. There is a change towards a much more final customer-oriented business. You have to understand consumers to be able to give individual offers to individual households.
Together with Hybris e-commerce, we have a perfect solution offering, which even today is being used by many customers in the energy industry, or they are in the process of being implemented. But also our industrial solution for power utilities and electric companies, also other public utilities, gas and water supply. That was also modernized. In the implementation of the legal deregulation requirements in Germany, we are taking a leading role in that process, but also in the change of business models. Again, let me remind you of the new prosumers. This involves different customer relationships, but also different billing solutions. With SAP IS-U on our HANA platform, we have the market leading solution ready, and this means a strong growth field for SAP.
Right. I have another batch of answers. First of all, to the questions by Mr. Buhlmann. When will we have an impact on the dividend from the takeovers, 2020 or 2018? I would say it is already having an impact, because for years, our dividend has risen continuously. It is in line with the continuous strong rise of top line and bottom line, although the transformation towards a top company is being developed. This means we are seeing increases in cloud subscription revenue. So the dividend already reflects the success of these takeovers. The operating margin IFRS 2015, four percentage points down. When will it rise again? It is already rising. In the first quarter we saw this, and the reason is that in 2015 the special effects impacts for restructuring, this was already addressed by Bill McDermott.
This is something that reduced the margin in IFRS results, EUR 600 million last year. For this year, we are not expecting any significant impacts. We have a guidance between EUR 40 million-EUR 60 million out, and you need to take into consideration that in the cloud, we're still in the investment phase. The absolute result of the cloud is already positive, especially in the public cloud and business networks. Of course, given the strong scaling, the profitability, the margin is not rising as much yet. As I said, from 2018, there will be an over proportional contribution by the cloud and hence our midterm guidance. You can expect that from 2018 onwards, we will see disproportionately high contributions from the cloud. There was a question about the culture of SAP. When revenue is generated in other regions of the world.
This is nothing new for SAP. SAP draws its strength from the fact that it is a global company. In Walldorf alone, we have people from about 80 countries. We're very proud of that diversity. We're a globally composed leadership, not just in the U.S. and Germany. We have very strong leaders and also women, I might add, in other regions of the world. Asia is a very good example. Fox-Martin does a very good job. This makes us strong to have strong leadership on the local markets. This is why we attach a lot of importance to the diversity of our staff. There was a question about the cloud and the fixed cost. Can we expect any negative surprises with regard to investments into the cloud? No.
Our big investments, of course, have been made, and we need to invest continually because if we generate such a large order volume as we did in 2015 with three-digit growth in some areas, we need to make sure that our data center infrastructure can absorb the capacity required to cater for those customers when they've gone live. This is something, however, which, because of a big scaling of a cloud business that we've done already, EUR 2.3 billion revenue by 2016. That is supposed to rise to EUR 3 billion. This is something we can digest, if you like. In the past one and a half years, our growth cloud margins have been positive. They have risen, and we are now able to finance our projects from our operating cash flow. No one need worry about any reductions in profits. EUR 4 million cash, EUR 8 billion debt.
Are we reorganizing our debt? No. The measure is there to add flexibility. These instruments have been used in the past. This is item eight of the agenda. The segment revenue, has that been restructured? No, not really, but the net sales are reported following our internal reporting, which is different from the profit and loss of the group according to IFRS. There was a question regarding the possibility to extrapolate the cloud revenue. When you have a growth of 33%, can we extrapolate this during the course of a year? Well, basically, the cloud business is a very predictable business. This is one of the advantages. When you look at the renewal of cloud contracts, and if you're able to do this, then you can, of course, extrapolate from the previous year what kind of situation you have financially at the end of the year.
Which is an advantage over the more volatile software business, the traditional software business. Otherwise, we couldn't give any cloud guidance for the year 2016 within such a small bandwidth of only EUR 100 million. We wouldn't be able to do this if the business weren't so predictable. The orders at hand for cloud subscription. Why aren't we delivering? Or how about the deferred income, the deferred revenue, why isn't that realized? Where there are certain accounting principles we have to follow. We're not sitting on our hands, it's just that we deliver a service over a certain period of time. Say, at the beginning of the year, the customer is billed for the yearly subscription, but we still need to defer, and over the whole year, we then spread out the revenue. As we have delivered our service over the year.
The same goes for our order backlog. We have contracts with a term of three years. We have an annual billing scheme agreed with the customer. At the beginning of the first year, we bill the customer for the first annual amount, which is then deferred profit or deferred revenue. The rest is, of course, counted as order backlog because the second and third year still has to come. There's a difference between that cloud business and the classic business. Last but not least, when will we know whether SAP S/4HANA or the cloud business will contribute more to the success? We believe that both elements will have a massive positive contribution, and SAP S/4HANA is also available in all deployment models. It can also be consumed in the cloud. It is increasingly consumed as a managed cloud solution. I don't think we need to separate the two.
I think across our cloud portfolio, including SAP S/4HANA, we can expect our business to be vastly successful. A question about our shareholdings. This is also an old favorite. Many companies like Ariba report losses, Concur as well. Do we need to worry about this, and when will they reach break even? It doesn't make sense to look at the results of our shareholdings and pick those figures out and conclude to the success or lack thereof of the individual business. The reason is that several companies which were sales or which had sales companies in the regional organizations were integrated in the national companies of SAP. A lot of sales are generated with the regional companies, whereas the cost, for example, for developing certain solutions which were still in the pipeline in the original company are booked for that company.
You cannot really conclude from these figures to the profitability of the underlying business. Mr. Yerdalian. Hartmut Mehdorn, he was member of the SAP Supervisory Board for quite some time. I've known him for a long time. As member of the Supervisory Board, he performed excellent work. I am a good judge of that. You cannot, because you're not member of the Supervisory Board of SAP. Thank you. The task or the question of having 30% of women on the Supervisory Board, it is my task to be on the lookout for potential female candidates. When a woman candidate was found in the person of Gesche Joost, I went to my colleagues of the Supervisory Board. I asked if anyone was willing to surrender, to give up their position so that we could appoint Gesche Joost as member of the Supervisory Board.
Hartmut Mehdorn went to me and said that he was ready to resign. Shortly thereafter, he fell seriously ill, which created the impression that his resignation had to do with his disease. He has recovered in the meantime. We wish him well. We never received any severance payment or similar payments. There's also no consulting contract with him. This is something we would have had to decide during the AGM, by the way. There is no need for concern at all. There was nothing like the thing that you suggested there. Ms. Barbara Grimberg asked, how about pension provisions for Executive Board members? In Germany, when there are pension commitments to be made, SAP enters into life assurance contract with a coverage insurance company. Quite a mouthful in German.
The money is reserved for the purpose of pensions. This is excluded from the capital of SAP. The financing situation is revised annually and adjusted where necessary. In the U.S. or the members who are U.S. residents, here the financing happens through Securities. For Stefan Ries, this year, we will make pension provisions for the first time. For Steve Singh, no pension commitment has been made. Another question, how high is the cost of the AGM for catering, public transport tickets, invitations, et cetera? The total cost of the AGM in 2015 were about EUR 2.3 million. The invoice for this year has not been received. We're still here. Depends on how much more we eat and drink. EUR 2.3 million and the cost for tickets for public transport are approximately EUR 1 per shareholder present. How many shareholders do you have in total?
How many did you invite? How many came? How many guests are there? We do not know how many shareholders we have because our shares do not allow any conclusion back to the shareholders. Our invitation was to all shareholders. About 8,000 shareholders said that they would come. The presence is about 3,000 shareholders. I'll take the next one. Further questions from Dr. Grimberg. How about the cost one? The cost for the listing on the stock exchange, administrative cost in that context. Investor events, expenditure for investor events like the Capital Markets Day in New York or also our analyst meeting at our SAP Sapphire in Orlando amount to about $250,000. The cost in the context of the stock exchange listing for Deutsche Börse is about EUR 10,000. For the stock exchange in New York, a similar amount.
There was a question, how many Chambers of Industry and Commerce receive contributions from SAP? The answer is 16 Chambers of Industry and Commerce. For 2015, we expect contributions to the tune of about EUR 6 million. How high is the VAT that we pay in the sense of tax deduction, and how high is the VAT on our own services and goods in 2015? The SAP SE and the national company in Germany paid about EUR 1.8 billion, and the amount of input value added tax was about EUR 1.5 billion. The question that you would like to hear more figures from our balance sheet or from our profit and loss account in Bill McDermott's speech. We want to focus on our strategic development and also the core financial parameters, we want to give you a picture of what SAP is actually doing for its customers.
This is why we gave practical examples. The financial figures are in the annual report in absolute transparency. Of course, you're invited to participate in our quarterly conference calls where we give all the information for investors, all the figures. There was a question about cloud and software increases. What does it mean? What's the difference? It's easy to explain. Our cloud and software revenue item is not a separate item class, but it is the sum of cloud subscription and support and software license and support together. This means revenue from our on-premise products and license expectations, also the revenue from our cloud solutions. It covers both. You had a question about a specific customer and their contractual relationship with us. I will have to ask you to understand that we cannot disclose any information about individual customers.
There was one question about the stock price, whether that is pushed up due to the fact that the interest rate is practically zero for savings accounts. Of course, shares are becoming more attractive because of the interest rate situation. There are very few alternatives that yield sufficient interests. The reason for our stock price is also our success as a business. We outperformed the DAX in 2015 and now is the strongest market capitalization company. Thank you. There was another question. Part of our retained earnings is disbursed as dividends. Where does it come from? Is that just pseudo profit in the sense of a balance sheet trick? We do accounting according to proper accounting principles, this is not pseudo profit. It is real profit, it is also externally audited. Nevertheless, this brings me to the question from Dr. Wohlfahrt.
I think that one reason can also be a misunderstanding. There's a difference between EUR 1 billion reserves and one item that was carried forward to new account. This is linked to the previous question. The retained earnings relate to the balance sheet profit, which is the annual surplus after tax of the previous business year, also profits already taxed that were not used, hence the high number we're talking about because of the use of profit already taxed. Tax considerations do not play a role in the question of the appropriation of retained earnings. Your second question related to the investor structure or the shareholder structure. Our investors, many in Europe and the founders hold 40%-20%, private investors 18%. When you have registered shares, why do you say that the shareholders are unknown? These are registered shares and not registered shares with name.
When we represent the shareholder structure, this is not completely clear. Private shareholders and institutional shareholders can be identified and also assigned or situated regionally if they cross the reporting threshold according to the Securities Act, which is 3%. R&D expenditure, the relative share of 20%-17% per year. In other words, why did the figure go down, or from where does this discrepancy come? Mr. Leukert said already that we are still doing a lot of R&D. The transition to the cloud, the investment into the new business model will result in a different cost structure. We need to invest more into the cloud infrastructure, and that is the reason why, relatively speaking, the R&D expenditure seems to be lower, which, however, has actually gone up in absolute figures. One final question from Mr. Nestlé, which I think I've almost answered already.
The operating margin 2015 at 20.5%, 2011 34.3%. When will we get back into the 35% region? As I said, the 20.5% is our IFRS margin in 2015. That was very negative because of reorganization expenditures. Also, during the first quarter, you may have seen if you followed our financial metrics since the phase is over, the second quarter figures have developed very positively. The margin has gone up, and we believe that this will continue over the course of the year. Our own targets relate to non-IFRS metrics, and there we assume that in the years from 2018, as a result of the disproportionately high contribution to profit from the cloud, there will be a positive development of the margin.
If you look at our targets for 2020, we want to have total top line between EUR 26 billion and EUR 28 billion and EUR 8 billion to EUR 9 billion in operating profit, which means the operating margin is between 31%-32%. I have no further questions to answer here. Back to Yerdalian . The women's quota came in force in 2016. Before that, it was a recommendation. Why couldn't we make the decision for the change of the Supervisory Board last year during the AGM? Because Ms. Gesche Joost and Hartmut Mehdorn, their preparedness to agree to that change, that agreement had not been given, at least not in the period that was necessary before the AGM, that is the notice period for publication. The remuneration or severance payment, I've said that already. There has been no severance payment, and that concludes my remarks.
I'll continue. Mr. Buhlmann, you mentioned that we won a prize for the topic Economic Dividends for Gender Equality called EDGE. That's right. That's an award which we received independent from the industry, which we got in North America regarding certificates and transparency regarding gender equality. That affects equal pay, personal procurement, promotion, trainings, mentoring, flexible working hours, and also the corporate culture in general, and we'll be certified. We're quite happy that we received this award for this region. Dr. Grimberg, Mr. Plattner has answered your question as regards who is management and who is not management. The definition is quite easy. Women in management are those who have HR responsibilities, so team managers as well as mid and top management. You also asked how many people work at the tax department, how many lawyers work, and how many FTEs work in our F&E.
As at the 31st of December, we had 101 FTEs in the tax department, 392 FTEs in the legal department, 20,938 FTEs in R&D. The next question referred to remuneration, the bonus at the employee level. First of all, as you can see from the annual report, we had just under 80,000 staff, and the bonus depends on the career level, and they vary according to that level. There are variable components. Almost all of them have variable components, as you might remember from previous years, we have no tariff-related pay. The top and minimum bonus is something that SAP does not report at the employee level, and I do hope that you understand why we don't do it. The next questions refer to the age structure, about more than 2015. It's the following information split up according to the different generations.
People hired last year older than 1946, born in 1946, 15 people. Then the baby boomer generation, 1946 to 1963 model year, so to speak, 8,573 people. Generation X, 1964 to 1978. That's 35,746 people. Generation Y, 1979 to 1994. 32,877 people in that age group. Last but not least, generation Z, after 1995, that's 65 people. Another question was, "What was the oldest person you hired? Where does he or she work, and what does she do?" The oldest person we hired in 2015 was 71 years old at the time, has a permanent contract, and works in North America as a senior audit specialist. Next question, Ideas Management of SAP. How many ideas were filed? How many were implemented? What have we done? In the last 12 months, 611 ideas were filed. 107 were accepted, and they are being implemented right now.
All in all, 52 were completely implemented with a huge benefit both for staff and for our customers. In 2016 too, we continued to work on the standardization, automation, and the user-friendliness of our internal processes. Now, three questions from Dr. Wohlfahrt. I answered some of them, but again, here, rush through them. First question refers to women in leadership. Recapping what I said before, the share of employees in company is 5,474. That's a ratio of 29% as of the 31st of March 2016. You also asked about the distribution within the different levels below the executive board. In Germany, we have the following figures. At the first level, we have three women, 27.3%. Second management level, 13. That equals 14.6%. Globally, I've mentioned that before, we have seven women at the first level, 23.3%, and at the second management level, 34, that equals 16.7%.
Again, that's as of 31st of December 2015 and includes the acquisition. Dr. Wohlfahrt then asked about the number of employees we have. We have 80,000 right now. Will it go up to more than 100,000? What's your forecast? We assume that we'll have an organic growth similar to the previous years, and therefore, we also expect to be successful in the market too. The last question also, Dr. Wohlfahrt, refers to personnel expenses. You found that from 2010 to 2014, we had constant figures per staff, around about EUR 110 per year and employee. This year, this figure is up by 15% to EUR 126,000. The reason this increased expense per HR is due to two topics. First of all, currency effects, secondly, the expenses linked to our restructuring measures. Thank you. No, attendance. I have to read that out immediately. Attendance has changed.
I'm going to read out the latest figures. Out of the stock capital of €1,228,504,232 divided into equal number of shares. Right now, 862,931,048 shares with an equal number of votes are present that equals 70.6% of the stock capital. As mentioned before, we have written votes of 80,593 votes. In total, we have 863,680,341 shares present or present by written votes that equal to share of 7.30% of the stock capital. Right.
I'm interested in your position on TTIP. Would it help you sell even more software? Would it help you in gaining new markets? While we cannot make an assessment on how TTIP will affect our business before the language of the agreement has been published, SAP is generally very welcome to the reduction of barriers to trade and open free markets.
There was a question from Mr. Edelmann regarding the partnership, SAP and Apple. How do we protect our SAP software? How do we protect us against a knowledge drain? We have a strategy to protect our IP, of course. We make sure that all innovations are secured by IPs. If we do co-engineering with partners like Apple, we have contracts that cover the access to IP. We have rules and regulations that cover all aspects here. We are greatly interested also in winning as many external partners and developers, and to develop applications on our mobile HANA platform and develop services and new services which we will provide. Because in the future, we foresee huge growth potential in that field.
We want not only to have applications via the classical subscription business, we also offer business economic services on this platform and make it available to the external developers community. Another question by Dr. Wohlfahrt, referring to the video in the innovation in Karlsruhe. Together with EnBW, we have this smart city light. It's an intelligent city light. We've shown the innovation plan there. Let me make some basic comments there. These streetlights, which we've developed together with our partner, are not just used as a hotspot and as a charging station for e-cars. They're also used as sensors to assess mobility and also emissions. From our point of view, it does make sense to have them up on the Turmberg. The question is whether SAP only provides the database and technology.
That would explain data coverage. EnBW at the Frankfurt Motor Show presented this concept. This year at the CeBIT, we introduced the project at one of our stalls. We introduced this intelligent streetlight. We generated huge media interest. The chancellor herself came to us to read this. All interested visitors at the CeBIT have come up to us. Ever since that event, since the CeBIT and since the Frankfurt Motor Show, we have seen a huge interest from the media, that we take your comment seriously and talk to our communication department so that we also have coverage at the local level.
Jella Benner-Heinacher . Salesforce is now very active in Germany. Have you already noticed changes in SAP's business? Has your market position in Germany changed? How are the SAP midsize companies reacting to this aggressive behavior of Salesforce? A second part to that question, recently, Salesforce reached out to SAP in interest of a cooperation that you did not accept.
Our home market, Germany, is not immune to the impact of globalization. Our U.S. competitors are stepping up their efforts to gain a foothold in Europe and Germany. We take every competitor seriously on principle. We are keeping a careful eye on the situation. Nevertheless, our innovative, extensive
Coherent product offering puts us in a very strong position. As regards Salesforce, we are convinced that we are pursuing a considerably broader approach than they are, particularly with SAP Hybris and our omni-channel strategy, focusing not only on the line of business sales. Therefore, we are going beyond what traditional customer relationship management has to offer. Our focus is very much on engaging with the consumer and on aligning with consumer behavior. Customer engagement and loyalty are taking on a very different significance in this context. The SME space has always been important to us. Our product offerings and our strong partner network mean we are very successful in it. Now that Steve Singh is responsible for SAP's small and mid-sized enterprise business, we will be devoting even more attention to its future, hoisted by a very strong product offering.
The impressive growth figures we have achieved over numerous past quarters in Germany are yet more proof of our strength in our home market. To return to your question about why we didn't address Salesforce's inquiry, we think that the future market for customer relationship management will be dominated by customer engagement and commerce beyond CRM. When it comes to making acquisitions, our focus is on companies that are complementary to our business. In the case of Salesforce, the company's valuation, and consequently its purchase price, would have been disproportionate to the benefits.
You used the shares you had prior.
There was a question by Ms. Grimberg, how many shares I owned when I was appointed to the Supervisory Board. I had no SAP shares at the time.
I'm having a look. I have no further request for the floor. I'd like to ask, is anyone else wishing to speak?
Kienle.
Mr. Kienle.
Yes, Chairman. The question is still open regarding revenues and acquisitions. That has not been answered yet.
Well, I'm going to answer this. I think I can do this. Let's do the IFRS rules. Debts and acquisition values have to be valuated at the net value. The debts to be valued also include deferred assets from service, for instance, that will be rendered later. When it comes to the price allocation, it is assessed first whether services have still to be rendered. If no, the service has already been supplied, but if there are extended terms of payment hasn't been rendered yet, then the deferred income will not be part of the balance sheet. In a second step, this deferred income to where there's still an obligation, the service will be reassessed. Typically, the actual value is lower than the actual book value that results in a so-called haircut.
That is linked to the fact that the current value will establish bottom-up, the remaining costs for the services to be rendered is assumed, costs that have already occurred are not considered. In the opening balance, these deferred income taxes are resolved and lead to revenues, but compared to the book value, they are lower. When you then translate it to the non-IFRS, this haircut will be corrected to get a better comparability from one period to the next, that results in the difference from IFRS to non-IFRS. That's what our accounting does? Well done. Yeah, that's what we do, Hasso. We are really good. I'm really happy that I don't have to talk about accounting any longer. Big hand to Luka and his team. There are no further requests for the floor? Is anyone requesting the floor? That's not the case.
I have now established that no one else wishes to speak. Am I right in assuming that all questions from the floor have therefore been answered? I have to wait, and you have the opportunity to raise your objection. Does anyone request the floor? You have a question? Do I have to wait? If no one raises objections, going, gone. Okay, that's the case. I state that for the record that all questions from the floor have been answered. I am now closing the discussion on all agenda items. I have announced the attendance. That takes us to the voting. Ladies and gentlemen, we now come to the votes. Oh, I need my other glasses now. Now we come to the votes of the management proposals in respect to items 2 to 8 on the agenda.
As last year, we will take all of the votes on the management proposals for items 2 to 8 on the agenda on one single go. I will now explain the voting procedure. The vote here in the meeting area will be done using multi-item voting card 1, which is to be found at the front of your ballot card block. Online participants use online multi-item voting card 1. Voting results are determined using the subtraction procedure, which only the no votes and abstentions are collected and counted. In other words, you only have to submit multi-item voting card 1 or the online multi-item voting card 1 if you vote no to one or more of management's proposals, or if you wish to abstain. The yes votes are then counted by subtracting the no votes and abstentions from the current attendance count.
Multi-item card 1 and the online multi-item voting card 1 show each item by number from item 2 through item 8. Next to each item requiring a resolution, there is a checkbox for no and a checkbox for abstain. Put a cross in or click the no or abstain box as appropriate beside any item on which you wish to vote against the management proposal or to abstain. To vote yes to a management proposal, do not put a cross or do not click on either box for that item. If you wish to vote yes for all agenda items, you do not need to hand in multi-item card 1 or send online multi-item voting card 1. Let me now advise all shareholders and proxies in the official meeting zone that voting cards will be collected 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, I would like to ask you to please come to the main hall now to vote. If you want to vote, please raise your hand when the vote is called and have multi-item voting card 1 ready to put in the ballot box. I would like to emphasize once again that with the chosen method of voting, any shareholder or proxy who is present in the official meeting zone and who does not submit a voting card or a multi-item voting card is voting in favor of all of the management proposals concerning items 2 to 8. It should read male and female shareholders.
If you're attending online, I would like to emphasize that with a chosen method of voting, any shareholder or proxy who is present online during the voting and who does not submit an online multi-item card one, is voting in favor of all of the management proposals concerning items two to eight. 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 thus reflected in the results. The same applies to the institutional investors and shareholders associations who have used the facility we offered to have noes or abstentions pre-entered in our computer systems. Shareholders once again have the opportunity to submit their votes prior to the meeting by mail ballot.
These votes have likewise been entered in the IT system. To help ensure that attendance counts are accurate, I would kindly ask shareholders and proxies not to leave the official meeting zone or not to end their online participation during voting. I am now calling for votes on the management's proposals in respect of item two to eight on the agenda. Item two on the agenda. As I explained earlier, the Executive Board and Supervisory Board have adjusted their proposal concerning the appropriation of retained earnings. They proposed the following. That the retained earnings of EUR 9,256,034,334.33 from fiscal year 2015 reported in the annual financial report be applied as follows. A dividend of EUR 1.15 be paid out for each no-par share that qualifies for dividend, which makes EUR 1,377,839,829.65. That EUR 1 billion be transferred to other revenue reserves, and that the balance be carried forward to the new account.
That's EUR 6,878,194,504.68. The wording of the management proposal for item three to eight is the same as was published in the announcement in the German Federal Gazette, the Bundesanzeiger, on April 4th, 2016. In the interest of avoiding repetitions, I refer you to this announcement. The wording is also provided in your invitation to this annual general meeting of shareholders. 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 is required for the resolutions in connection with agenda items two to seven. A three-quarters majority vote is required for the resolution in connection with agenda item eight. From this point, shareholders who have appointed proxies in our Internet system cannot give or change voting instructions on the items.
I now put the management's proposed resolutions on item two to eight to the vote. All shareholders and proxies who wish to vote against any or all of the proposals made by the management for items two to eight, or who wish to abstain on any of them, please come to the main hall, raise your hand, and put your completed multi-item voting card one in one of the ballot boxes. I would like to ask the staff to start collecting the voting cards now. Voting can now begin. Shareholders and proxies online who wish to vote against any or all of the proposals made by the management for items two to eight, or wish to abstain on any of them, please submit your completed online multi-item voting card one.
Gibt es noch erhobene Arme?
Are there any arms raised? Is anyone trying to vote? Please indicate this with your arms raised or please shout out. The professionals are still around collecting cards. Mr. Wuschko, I'm quite happy that I've learned that even I could get a job at SAP at my age. It was a good question you asked. I like that. Again, jokes aside. For the record. Has everyone had the opportunity to hand in their votes? I see that everyone has had the opportunity. Have all the shareholders and proxies present in the official meeting zone who wish to cast a no vote or an abstention been able to submit multi-item card votings number 1 yet? I've repeated the question. I've repeated it before. I see that everyone has had the opportunity, and I'm closing the voting now.
I will announce the results of the voting as soon as I have them. That takes a couple of seconds. It's done with a computer, mind you.
Before the results will be coming, I'd like to tell you that the detailed information about the voting results can be found at the meeting table by interested shareholders. If you agree, I'd like to restrict my comments on the vote by saying that the necessary majority was reached. Somebody disagrees with that summary treatment. Please let us know, I'm going to read out the full text.