Good morning. Good morning, ladies and gentlemen. I'm pleased to declare the Annual General Meeting of SAP PSE open. As Chairman of the Supervisory Board, I will be presiding over today's meeting as required by the company's articles. On behalf of the Supervisory Board and the Executive Board, I would like to bid you, our shareholders and shareholders' proxies, a warm welcome.
We're delighted that once again so many of you are able to attend. I also welcome our guests and especially the members of the press whom we would like to thank for their detailed objective and informed reports on our company over the last 12 months. Ladies and gentlemen, as usual, I first need to announce the formalities of this Annual General Meeting. For the record, all members of the Executive Board and the Supervisory Board We are here today with the exception of Hartmut Miron. Unfortunately, For health reasons, Mr.
Miron is unable to attend this AGM. I would also like to welcome Doctor. Ulrich Hoffman Remi, a notary public from the notary office in Heidelberg, Who will be taking the minutes? Doctor. Hoffman Remi Assisted by Mr.
Gerhard Sperke, also a notary public from the Heidelberg Notary Office, who is sitting Next to the speakers' table, Mr. Sperke is here to take down any observations and statements and To pass them to Doctor. Hoffmann Remi. Today's meeting was convened with due notice in accordance with legal requirements and the provisions of the articles of incorporation. Notice of the meeting was published in the Bundesanzeiger online German Federal Gazette on April 10, 2015.
A copy of the notice is available for your inspection at the speakers' table. It will be annexed to the minute. All notices that are required for convening this Annual General Meeting were properly issued. The company did not receive any motions or nominations by shareholders. The official meeting zone includes This main hall of the SAP Arena, plus all other rooms and areas of the SAP Arena that are accessible to shareholders after passing through security at the entrance.
These include a training hall opposite The entrance area where you'll find the catering services as well as the Spectator Stairs on the 1st floor with more catering Facilities. The meeting will be broadcast throughout the official meeting zone via loudspeakers. There is also a big screen in the catering area of the trading hall on which you can follow the meeting. The attendance register is computerized and is constantly being updated. There is a terminal at the speakers' table Card in your ballot card booklet.
Any instructions to the proxies provided by the company must be in relation to the management proposals published in the invitation. However, you may also entrust your vote to another participant. To do so, Detach the proxy form from the back section of your ballot card book. Fill in your proxy's name and city of residence And Your proxy, your ballot card book without the proxy form. On your way out, hand your completed proxy form to the staff at the exit.
If you wish to leave the meeting temporarily, please inform the staff at the exit and present your ballot card booklet. Upon your return, please present your ballot card book again at 1 of the counters. As was the case last year, our shareholders may also participate online by following a live webcast of the entire AGM, Casting their votes in real time and inspecting 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 resolution 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.
Here you can collect, fill out and return the speaker's request form. Please write your name and the number of your ballot card book on the request form clearly and legibly. 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 call to speak. I should like to point out that the entire Annual General Meeting is publicly broadcast via the Internet. However, only what I am saying now and the speech by CEO, Bill McDermott, will be recorded and posted on the Internet after the meeting.
Assuming your approval, we have allowed selected television stations to broadcast highlights from the speech of Mr. McDermott as was the case last year. These stations will only have the CEO's The entire meeting is also being documented in sound and video for the record. If a shareholder or proxy objects to the recording of his or her speech, we will not record that speech except for the Temporary record needed for technical reasons in connection with transmission on the Internet. The Executive Board will be using the services 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 shareholders who are following the meeting online. And now to the agenda. Item 1. I make it known for the record that the approved 2014 financial statements, the consolidated financial statements And the combined management report and group management report of SAP SE, including the Executive Board's explanatory notes Relating to the information provided pursuant to the German Commercial Code, Sections 289, paragraph 45 and 315, paragraph 4, the Supervisory Board report and the Executive Board's proposed resolution on the appropriation of retained earnings We're available on the website, www.sap.com/corporateen aboutinvestors.
Html. These documents are also available for inspection here at the AGM. Will find the documents at the speakers' table in the main hall and at the booth by the entrance to the main hall. The auditor, KPMG, AG, Wirtschaftbrufungsgesellschaft Berlin audited the SAP SE financial statements, The consolidated financial statements and the combined management report and group management report for fiscal year 2014 and issued An unqualified audit opinion. At its March 19, 2015 meeting, the Supervisory Board examined and approved the 2014 SAP SE financial statements, consolidated financial statements and the combined management report and group management report of the company as submitted by the Executive Board.
The 2014 financial statements are thus formally approved. The Supervisory Board compiled a written report, which is published on pages 20 to 29 of the annual report. I would like to highlight the following from the report by the Supervisory Board. 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 orally and in writing on fundamental corporate policy issues, the economic situation and performance of the SAP Group And on significant transactions and business measures, part of the Supervisory Board's work is to look beyond the financial results At the company's wider strategy, the Supervisory Board supports management's strategy of positioning SAP in the vanguard of the transition to cloud solutions I'm pleased to report that in 2014, the company forged ahead faster than expected with its transformation to the cloud company powered by SAP HANA. In 2014, the Supervisory Board held 4 ordinary and 10 extraordinary meetings, plus the inaugural meeting of the FA PSE Supervisory Board.
The Executive Board also kept me, as the Chairman of the Supervisory Board, fully informed between meetings of the Supervisory Board As part of an ongoing dialogue with SAP's CEO, in addition to dealing with matters in plenary sessions, The Supervisory Board delegates activities to its various committees where topics are discussed in-depth with the Executive Board and important Supervisory Board decisions are prepared. The chairpersons of the various committees regularly report their committees' work to the full Supervisory Board meetings, allowing close cooperation and sufficient exchange of information. To conclude my remarks about the Supervisory Board report, I'd like to mention the changes to the membership of our company's Executive Board, Global Management Board and Supervisory Board. On July 1, 2014, Luka Mutcic became the Chief Financial Officer and Chief Operating Officer of SAP SE. I'd like to welcome him to the meeting and ask him to briefly introduce Himself to our shareholders.
Jaap Pimdang.
Thank you very much, Mr. Chairman. Shareholders, ladies and gentlemen, Indeed, I'm the new kid on the block today, succeeding my long term predecessor and a brand who used to hold this function Last year, however, I'm not really the new kid with SAP actually because 77 quarterly reports ago, which means since March 1996, I joined the company. I started out as a legal expert in the legal department. Then, however, early on, I was offered various positions in the legal departments.
I headed the legal department of a subsidiary, Then I was in charge of our group risk management unit, and I also supported various merger activities. As of 2008, I then held the regional CFO responsibility for our Companies in Germany, Austria and Switzerland. And then 2012, I became the global CFO of our sales operations. In 2013 then, Werner Brandt asked me to take over responsibility for the entire finance area On a global basis and thus I also became member of the Global Managing Board of SAP. And then 1 July 2014, as Hassett just pointed out, I became a member of the Executive Board of SAP AG, which a few days later then became SAP SE.
And my current contract runs until mid May 2017. So you can see I've been with the company for quite a while. So I was able to prepare thoroughly for my current position And with Werner's support especially, which I'm very grateful for. In my various roles with SAP, but also before that, I also attended SAP's AGMs on a regular basis because since my days at university, I've been A shareholder of SAP as you are. And I'm not new to the region of Waldorf I was born here in the region in Heidelberg.
I also grew up here and also I have been living in Waldorf with my family for a very long time. And for that reason alone, You will from time to time, also notice about some of my activities, my social activities in the region. And I'm also involved in the National IT Summit of the German government regarding the significance of IT for Germany as an industrial location. Now feeling at home in this region and participating in this region on the one hand and in the German activities In combination with the global setup of SAP AG, that is exactly what made the What made working for SAP so attractive and unique to me? I'm in charge of various customers in various Regions also outside of Europe, for example, in the Middle East and Latin America.
As a CFO, you always have to focus very closely on customers and be close to What they really need because fully understanding our customers' needs is the basis for our business models that we have developed in the various areas for With respect to solutions and here, of course, finance also plays a key role. Talking to our customers is something I also consider very important because doing so, I can also Relate our experience that we have gathered with our innovative solutions in my Board area of responsibility, especially With our Simple Finance and SAP HANA products, HANA contributed significantly to the fact that our annual and quarterly Accounts can be closed 5 days earlier than in the past. And recently, at our Sapphire Fair, we Introduce an innovative solution for boardroom redefines and real time solutions. Now these are Projects which we developed jointly with our internal IT department and the respective technical departments, that's something I'm very proud of. And I'm also proud of the outstanding commitment of many colleagues in the finance department who have contributed significantly to this success.
Innovation, and this is my closing statement, innovation is important for survival in All areas and also in finance. And of course, here, the CFO also has got a key responsibility, namely to support the new products in becoming profitable. Do so especially in our cloud business, but we also do so with our internal processes. And that's why it was very important for me to Take over the Chief Operating Officer role as well in addition to CFO, which means I thus also assumed responsibility for our internal IT and internal Corporate processes, that's an important and interesting task, which I'm more than happy to fulfill every day. And against this I'm looking forward to many more years with my colleagues on the Executive Board.
And I'd like To thank all of you, your shareholders and dear colleagues on the Executive Board for the trust you have placed in me and enjoy you a good AGM today. Thank you very much.
Thank you, Luka. Ladies and gentlemen, aside from this change on the Executive Board, there were also changes in the composition of the SAP Global Managing Board. I'm delighted to announce that Michael Kleinemeyer and Steve Singh joined the company's Global Managing Board in January. They are both highly experienced. And in their respective roles, I expect them to Greatly expand SAP's potential.
Michael Kleinemeyer is Head of Service and Support. Together with Gerhard Ostwald, he is responsible for the Global Service and Support Board area. Steve Singh, CEO of Concur, is responsible for our business network strategy. Ladies and gentlemen, as I mentioned earlier, our Supervisory Board Member, Hartmut Medon, Mr. Midon spoke to me in the past week to advise me that due to health reasons, he will be unable to fully perform his duties As a member of the Supervisory Board in the coming months, he told me that he had, therefore, decided to step down from the Supervisory Board with immediate effect.
I would like to seize this opportunity to send him my best wishes for his recovery. Hartmut Meydon has been a member of the Supervisory Board for 17 years. He has been an important source of advice and ideas for the company and for me personally throughout this time. On behalf Of all my colleagues on the Supervisory Board, I would like to thank him for all his hard work on the Supervisory Board and on its Finance and Investment Committee and People and Organization Committee, Hartmut, you will be missed. Though his unexpected departure leaves a large gap in our Supervisory Board, I believe that we have already found For some time now, we have been talking to Professor Geshe Joost about her joining our Supervisory Board at some point in the future.
Ms. Joost is a Professor of Design Research At the University of the Arts in Berlin, where she is Head of the Design Research Lab. She chairs The German Society For Design for Urine Research and is a member of the Board of the Technologische Stiftung Berlin Foundation. In 2014, Germany's government appointed her the country's Internet Ambassador. I believe that she can bring valuable new to our company as well.
Professor Lewis cannot stand for election today since The deadlines foreseen by the German Stock Corporation Act unfortunately were not met. As the Act stipulates under such circumstances, we will propose to the competent court that Professor Joost be appointed to the Supervisory Board as Hartmutmeidhon's successor, we will ask shareholders to elect her at next year's Annual General Meeting, and I hope That you will then approve Professor Joost's appointment. Ladies and gentlemen, Apart from this side, on the capital side, there will also be changes to the employee representative side in the Supervisory Board after this meeting. In accordance with the participation Employees in Germany and in other European countries have meanwhile elected their representatives for the new term. I would like to take this opportunity To thank the outgoing Supervisory Board Members for the cooperation, they are Catherine Bordelon, Christiane Kunzmeyer, Stefan Lescovar, Kurt Reiner, Mario Rosa Bjorn and Stefan Schulz.
They will be replaced By Martin Dufek, Andreas Hahn, Kristine Rigitz, Robert Schussnick Fowler, Sebastian Zick and Pierre Thierle. Ladies and gentlemen, I will now ask Bill McDermott to address you. As Bill does not speak German, his remarks will be translated into German by a simultaneous interpreter so that everyone can follow. During the discussion, Bill's answers to questions from shareholders will also be interpreted into German. Bill, you have the floor.
Good morning, ladies and gentlemen. Welcome to the SAP Arena.
Thank you for joining us. I'd like to begin today by honoring Klaus Schierra, who passed away unexpectedly in March. As one of our SAP founders, he truly changed the world. Those who had the privilege of working with Klaus remember his relentless curiosity, optimism and humility. SAP would not be the company it is today without Klaus' many contributions.
Klaus will also be remembered as one of Germany's great philanthropists. His foundations opened the eyes of countless young people to the wonders of science. On behalf Of the entire Board and all SAP employees, I would like to express Our heartfelt condolences to his family and friends. I cannot think of a better way to honor our founders than to build on their legacy by making SAP An ever stronger company for our customers, shareholders and employees. In 2014, we accelerated our journey To help our customers navigate complexity and run simple, today, I'm pleased to share our results and our ambitious plans for 2015 and beyond.
Our success in 2014 would not have been possible without the support and dedication Of our 74,500 dedicated employees, dear shareholders, Please join me in thanking our SAP employees for their hard work and dedication. Dear Chairman, dear Supervisory Board members, thank you all so much for your confidence And this Global Managing Board, we appreciate your continued support. Allow me also to join Haso in welcoming Steve Singh and Michael Kleinemeyer to the Global Managing Board. They joined in 2014 And leads our business networks, which include Ariba, Concur and Fieldglass. Under Steve's management, Concur has become the leader Of the multibillion dollar travel and expense marketplace, his deep understanding of what it takes to build And run a business network will be a strong asset as we grow this exciting area of our portfolio in the future.
Michael Kleinemeyer joins the Board as the next step in a distinguished career at SAP. Most recently, he led our Middle and Eastern Europe region With great success and for years he has been a highly trusted advisor to our customers and partners. He now takes responsibility for SAP service and support worldwide, ensuring that our offerings meet the ever changing needs of our customers. Please join me in a warm welcome to both of them to the Global Managing Board. Ladies and gentlemen, today marks the 5 year milestone Since we set out to reinvent SAP, many of you will remember that time.
SAP was already a leading company in enterprise applications and analytics. We were a very solid organization, but we did not take this for granted. Rather, We laid a bold strategy for growth and innovation underpinned by a vision to help the world run better And improve people's lives. It is now clear we chose the right path. As we predicted, the world around us is changing faster than ever.
Today, we all recognize how technologies such as the Internet and mobile phones have transformed our lives. We can connect with family and friends around the world instantly. We can shop, Do our banking or book travel on any device. It is now estimated That by 2020, there will be over 60,000,000,000 devices in the world. So the scale of this change is enormous.
Technology has fundamentally changed what we expect as consumers, Whether applying for a mortgage, filing an insurance claim, checking a home energy bill Or buying a new car, we expect services to be easy, personalized and available anywhere. In other words, the consumer rules and this is changing everything. Our expectations at work have also changed. We expect the technology we use at work We'll be easy and beautiful as the technology we use at home is. We want instant access to data and we will no longer tolerate needless complexity in our tools And processes, so you ask yourself, what has the impact of all of this been on business?
I'd like to tell you businesses across all industries are racing fast To meet the changing expectations of their consumers and also of their employees, Those who don't move fast enough risk being disrupted by competitors. Because, ladies and gentlemen, in every industry, innovative businesses are using technology to reimagine their products And at the heart of this transformation is data. In today's digital economy, technologies such as cloud computing and mobility Our connecting businesses, people and things in entirely new ways. So to remain competitive, all businesses in all industries must transform to become data driven Enterprises and SAP could not possibly be in a better position to guide them through this change. We identified these trends early and took decisive action, Evolving our portfolio through both organic and inorganic innovation.
And today, I'm proud to tell you that we have all the key assets we need to help customers transform and grow their business. We have consistently focused on innovating in 3 areas: our platform, our applications And our business networks. Let me briefly describe each of these beginning with the platform. For a business to be data driven, it must be on a modern digital data platform. 5 years ago, almost nobody was talking about a digital data platform As a competitive differentiator for the 21st century, but I think you and I both know There was one man who had the wisdom to know and his name With Haso's vision and the talent of SAP's dedicated software engineers, SAP HANA has become more than just a breakthrough technology platform.
It has become a new way to run businesses from retail to sports To health care and beyond. So you say, what makes HANA so revolutionary? Let me explain using the simple analogy of an office desk. When we work at a desk, We keep all the information we need instant access to on the desktop and everything else is organized in on filing cabinets nearby. Conventional computer systems work much in the same way.
The information most critical to your applications is stored in memory or on top of the desk. And all All the other data is stored in databases on hard disks, just like those filing cabinets. Just as it takes you time to pull something out of a filing cabinet, it takes time to move data from the database On a hard disk to where it is needed by an application. In fact, a lot Of the programming in traditional SAP applications was written just to manage this. And to make Matters worse.
In the conventional system, when you want to report on the data, It first needs to be replicated to another system, almost as if you needed to copy all your files And put them in a second filing cabinet. So let's compare this to SAP HANA. With SAP HANA, all data is stored in memory right on the desktop. The filing cabinets are gone. All data is available instantly With 0 response time, analysis can be done on the live data in real time.
The data doesn't need to be replicated and stored multiple times. Furthermore, SAP HANA stores data far more efficiently, so it takes up far less space. Some customers have been able to reduce the size of their data by a factor of 10x, Greatly reducing complexity and cost. From this picture, It is easy to see how SAP's revolutionary technology, HANA, Is and why conventional systems can't keep up with it. It is the standard.
So why is speed so important? Think of a local supermarket that gives you discounts to reward your loyalty. Traditionally, they could only send them to you in the mail or give you coupons at the register to use during your next visit. But today, retailers want to analyze your entire shopping history and give you a personalized discount on your current purchases while you are still standing at the register. In a world where consumers have more choice and higher demands than ever, these are the kinds The experience is needed to retain their loyalty.
Perhaps that's why today We have over 6,400 SAP HANA customers and nearly 2,000 startups Building applications on SAP HANA. Our momentum continues to build as more and More customers recognize that SAP HANA is key to running a data driven business.
But we
Customers also need to digitize their operations and this requires a whole new class of applications. That is why in February this year, we launched S4HANA. We call this our biggest product announcement in the history of SAP. Let me explain why. With SAP HANA, we can completely rethink our core applications And create a new business suite built for the 21st century.
Simply put, We are now driving significant innovation in our core business once again. So what makes S4HANA so different? First, we have completely removed All the programming that was written to manage the limitations of the past that I talked about earlier. This makes the application far simpler to deploy and to maintain. 2nd, The applications have new and highly valuable capabilities that are only possible with SAP HANA.
When all the data is available in real time, we can do things like complex planning, Forecasting and simulation within the application itself, this makes the application Far more intelligent than ever before. Allow me to give you an example. It is estimated that retailers of Food products collectively lose €1,000,000,000 of euros each year just because They cannot redirect stock to the right stores in time to sell while it is fresh. We recently demonstrated how S4HANA can use real time financial And logistics data to automatically simulate the best solution to the expiring stock issue And initiate the process to move stock to the correct place quickly while it is still fresh. This used to be a really tough manual process that involved multiple people and it took days and days.
Today, the system is intelligent enough to take over this complex analysis And link it to the transactional system and for our customers, ladies and gentlemen, this is game changing. We have also built a completely new user experience for S4HANA With SAP Fiori. SAP Fiori is not only a beautiful new user interface, We also eliminated redundant steps in the interface, making it faster and easier for users To get their work done, empathy. Finally, and most importantly, We have made it easy for customers to move to S4HANA without a complex migration. The data structure of the key parts of the applications remains the same.
We have also created the HANA Cloud Platform that nicely allows customers to manage customizations And build new applications, all of this fully integrated into S4HANA. Furthermore, customers have the choice to run the system on their premise Or in the cloud, their own cloud, the SAP cloud or in a partner cloud, We give choice. To summarize, S4HANA is the reinvention of the AP Business Suite, designed, built and ready for the 21st century. We already see strong demand across all regions with over 370 customers Choosing S4HANA in Q1 after just 8 weeks in the marketplace. Ladies and gentlemen, please join me in thanking all the SAP customers and partners And members of the SAP Development team who worked tirelessly to bring this breakthrough innovation to the marketplace, Thank them very, very
much.
With SAP HANA and S4HANA, we have driven significant organic innovation in our core applications, And we are leading the way for businesses to transform themselves to data driven enterprises. But we recognize that being data driven alone is not enough. In today's digital economy, businesses must also be seamless. They must do really complex Things but make them all appear simple. They need to digitize their customer experience And digitize work for their employees in order to meet the rapidly changing expectations I outlined earlier, let's first look at digitizing the customer experience.
Consumers today expect simple and personalized service. Businesses need a 360 degree view Of the customer across all their sales and support channels, so they can deliver a seamless experience Wherever a customer is, this is why we acquired Hybris. With the combination of Hybris In SAP Cloud for Customer, we now offer a full customer engagement and commerce solution On SAP HANA, our competitors, on the other hand, are still focused On traditional customer relationship management in the cloud, which is fast becoming a commodity And our investment is clearly paying off big time with Hybris and Cloud for Customer growing in triple digits In 2014. So next, let's look at how we're digitizing work. With SuccessFactors, we are the leading human capital management company in the cloud.
We now have over 6 40 customers using our core HR cloud solution, Employee Central. This is nearly twice as many customers as we had just 1 year ago when I stood up here. And that's just one solution in our very strong cloud portfolio for HR. We further expanded this portfolio with the acquisition of Fieldglass. Fieldglass makes it simple for companies to manage their contingent or temporary workforce.
Here's an interesting stat. Today's contingent labor is the fastest growing labor force in the world, Growing by 40% a year. So by combining SuccessFactors and Fieldglass, We can uniquely offer customers a single view of their total workforce all in the cloud. Digitizing work also means making it easier for people to get their jobs done. Again, empathy.
In December 2014, SAP acquired Concur Technologies, The leader in the market for travel and expense management. As 84% of Concur's revenues are generated in the United States, we have an exciting opportunity to support their expansion globally. And Concur is already seeing the benefits of operating at a global scale with the support of the SAP brand and our sales force. Managing businesses travel and expense is a significant challenge For companies worldwide and a significant pain point for their employees. So let's take a closer look And how Concur is reimagining the experience of business travel, rethinking it altogether.
Hello. It's been Barry Padgett, Executive Hi, let me take you on a virtual trip because I'm going to show how easy it is Record your travel expenses using Concur. Our virtual journey takes only a few days. First, we're going to San Francisco. I don't know yet what Kind of flight I'm going to book, but I also need a hotel.
We booked 2 hotels, 1 for each night. And here we've got a couple of options I'd like to show you. I combined IHC with my CONCUR account. You can see IHC. A CONCUR profile is generated automatically and these profile data are then forwarded to IHC.
The rates will thus appear on the IHG page as agreed. The data are then forwarded to Concur and are In the overall travel planning concept, I've booked the first hotel for the first of the 29s. I replaced my iPad For the iPhone with the Concur mobile app, because now I want to book my air ticket, I use a combination of my travel Pattern and big data. As 10,000 companies and millions of users are stored in our cloud, it's not difficult to recommend something to them. I use my voice for finding a Concur based flight.
I traveled from LA to San Francisco, going there on 9th and going back on 11th June. After booking the flight, Concur sees that I've booked only one night and that there's one night still open. And I Get forwarded automatically to a site with hotel offers. I can check the rates and make a reservation and all of the booking is done. My screen now shows all of my travel data.
So let's start our virtual journey. The cab just picked me up just dropped me at the airport. I was given a handwritten receipt by the driver. I take a photograph and upload it to Concur. The handwritten data on the receipt are recorded and are booked automatically as traveling expenses.
Now it's time to Return. And this is a good example showing how partner platform and our ecosystem interact. I want to have a quick Snack. I go to Starbucks. So I start my Starbucks app.
I select Pay and can automatically See the credit card selected for traveling expenses. If I select Pay, then a barcode appears. And after my journey, The amount is automatically already booked under my traveling expenses. So our virtual journey is almost over. And the best thing about this is my Receipts report is already complete.
You can see all of my expenses on NetJourney are already listed on that screen. My air ticket, both hotels and also the cap receipt, everything was entered automatically. Now in order to complete my virtual journey, I just need to select Send. Using Concur, travel data collection Was done seamlessly, and it was really very easy to use.
We just saw how Concur is connecting businesses that cater to corporate travelers Such as airlines, hotels or car services, enabling them all to deliver a seamless experience To their users, this drives customer loyalty and ultimately higher revenues for all partners in the network. And that brings me to the final pillar of our innovation strategy, the business networks. In order to be seamless, businesses must also be connected. Ladies and gentlemen, we are the 1st Enterprise software company in the world to spot the unique opportunity of business networks and invest in it at scale. And by being the 1st mover, we stand to gain a significant competitive advantage.
So why do we believe in this opportunity so strongly? To compete in the digital economy, Businesses must look far beyond their own four walls. They cannot scale unless they can collaborate quickly And easily with their trading partners and businesses are increasingly collaborating in networks, Sharing data securely across all partners in their value chain, improving efficiency And allowing them to deliver services that simply weren't possible before. SAP It's at the heart of enabling this transformation. That is why we have invested in solutions For all the major spend categories that companies have to manage across a network of partners, Today, SAP owns 3 businesses that are network businesses that we manage as one group.
The Concur network for managing business travel, the Ariba network for materials And the Fieldglass network for managing temporary workers. We now have 1,800,000 connected companies on these networks, transacting more than US750 $1,000,000,000 and we're just getting started. Twice the size of Alibaba, Amazon and eBay combined. So to summarize, with the investments we have made in our platform, our applications and our networks, We have all the assets we need to guide our customers through their transformation in the digital economy. I'd like to share a short video that demonstrates how SAP is giving a local German customer, Careshare, a competitive advantage.
What's most important about CareShield, and without Sounding arrogant. When it comes to cleaning equipment, is there any other name that comes to your mind but Kercher? What's significant is that within 5 years, almost 90% of the products Became new products. Now we are in close contact with our customers and thus we know exactly which features they like to use, What are the specific cleaning needs? Do the devices break down?
How often are they take to maintenance? And based upon that, We collect more and more data which have to be processed properly. Well, we've got new project coming from IT every day and we try to implement them as quickly as possible. Well, of course, that is based upon a complex Reporting system, and we run this reporting system on the basis of the business warehouse. SAP keeps developing their products On an ongoing basis and almost every day various subsidiaries from all over the world Present new features to Archwitz they would like to have.
An easy to use user interface is required for the sales rep who wants to Get ready for a customer call. So we can send out our sales reps with their IPAP. And then on-site, when talking to the customer, They can present the latest data to the customer. And that sales rep doesn't even have to be an IT specialist. It doesn't have to be an Excel specialist.
And thus, of course, we can spend more time talking to the customer and the sales reps. They can also Better prepare for the next customer call. So the buzzword certainly is digitization. We also started setting New features with our high end products. And it's going to be interesting to see Future devices having their own Internet address because that is going to take us to the Internet of Things.
I can see the trend moving into that direction. And here, SAP is going to play a key role for us, and we can certainly get further incentives and ideas From such a big IT company, which will enable us to develop great solutions for the future, SAP helps Kirchner run simple.
Thank you, Karsha. Let me now turn to our performance in 2014. At SAP, we believe that social, environmental and economic performance All relevant dimensions for measuring a company's results. The integrated report that we published for you, our shareholders, Demonstrates our commitment to integrated thinking. In 2014, we achieved strong results across And solid results in our core business.
Note that all figures are non IFRS. Growth rates are non IFRS and at constant currency. Today, SAP is the fastest growing cloud company at scale in the world with close to 80,000,000 users. We set bold targets for cloud subscription and support revenue and increased them twice Throughout the year, we ultimately exceeded our guidance with €1,100,000,000 Which is 45% year on year growth. We were pleased to see a strong contribution from all of our regions.
Cloud subscription and support revenues grew 39% in the Americas, 57% in EMEA and 60% in APJ. All the lead indicators point to strong future cloud growth as well. Our backlog increased 82% from €1,200,000,000 to more than 2.3 €1,000,000,000 This is actually committed business that is not yet invoiced And therefore, is neither shown in deferred nor actual revenues yet. We also continue to have a stable growing core business consisting of software license revenue and related Support contracts. Our software revenue growth declined 3% last year, Mainly due to weaker emerging markets, sales in the Ukraine and Russia were impacted by the ongoing in the region, the macroeconomic slowdown in South America impacted sales in Brazil And China saw a slowdown in spending by state owned enterprises that was felt by the entire IT industry.
Our support business continues to be very stable with greater than 97% renewal rates In 2014, therefore, software and software related service revenue Grew at 7% in line with our guidance. We were proud to continue to deliver solid growth in our home market in Germany, where our total revenue once again increased By 2%, showing that our innovations have sparked interest among existing customers as well as new ones. We also expanded our operating profit with 5,640,000,000 euros and profit, which represents 3% growth. We achieved this despite the impact Of a higher share of subscription based cloud revenue, investments we made in cloud delivery And the impact of changing customer requirements for our services. Finally, We increased earnings per share by 4%.
And let me briefly mention currency effects. In the past, we have faced currency headwinds due to the strong euro. However, as exchange rates changed dramatically and the euro weakened significantly, we have faced a currency tailwind Since Q3 of 2014, this resulted in a positive Currency impact for the full year, and we expect to see a currency benefit throughout the remainder Of 2015 as well. In summary, 2014 was another strong year for SAP. We were able to grow our core business and expand our operating income while accelerating growth in the cloud.
This combination of achievements is unique in our industry, and it Shows that our strategy for innovation and growth is the right one. Ladies and gentlemen, We're very pleased with the growth of our cloud business in 2014. As our business in the cloud grows, it is also important We are clear on the cloud subscription revenue model and our 3 distinct cloud business models. And allow me briefly to address these important points with you today. Let me begin with cloud subscription revenue model versus our traditional software licensing model.
In this model, fees are paid annually as a subscription over the term of a contract. We received less revenue upfront versus the traditional software model where licenses are paid for in 1 lump sum. However, when we look at the results over time, the cloud model has advantages. The revenues are more predictable because we know in advance the amount customers will pay us annually. This helps us plan more accurately.
In addition, cloud deals can become more profitable over time. If you compare the deals in this example, you can see that we breakeven in revenue after 4 years And profit in 5 years. On the second topic of our cloud business models, SAP operates 3 distinct business models in the cloud, offering the customer choice. We have a traditional public cloud business, which runs on a classic subscription model, Comparable to traditional cloud vendors, when a customer decides on a solution, No implementation in their IT landscape is required. Instead of a license, The customer pays a ratable fee, which is fixed over the contract duration and is billed annually.
We see the potential to achieve at least 80% gross margins in this business in the long term. 2nd, we have the business networks model that is based on transaction revenues That are billed as the services are used. Once customers join the network, They typically expand their use over time with more frequent billing in a pay as you go model. And here, we see the potential for long term gross margins similar to the public cloud model. Finally, we have our private cloud business where we host mission critical applications As an infrastructure as a service offering, it typically takes 5 or 6 months for a customer to go live And for us to be able to start to recognize revenue, whereas in the public cloud model, it's often a matter of weeks.
Upfront investment is required to build data centers. However, As we expand our customer base and increase efficiencies, we see a potential to reach a long term gross margin It is also a means of accelerating adoption of SAP HANA and S4 HANA. We saw very strong cloud revenue growth in 2014, While we also made strong investments in our cloud business, which did have an impact on our cloud gross margin, We are now strongly focused on making each of these business models more efficient and effective To ensure they will contribute to a profitable cloud business. Now turning to our non financial indicators. I'm very happy to report that in 2014, our most important non financial metrics Also performed strongly.
Employee engagement increased 2 percentage points to 79%. Our employees clearly told us they're committed to our strategy and direction. And further, customer loyalty, As measured by the customer Net Promoter Score, increased to 19.1 from 12.1. In our integrated report, we described the impact non financial indicators Such as employee engagement and our carbon emissions have on our operating profit, proving the strong link Between these measures and our financial results, our integrated report, This whole approach, it supports our vision to help the world run better and improve people's lives. So therefore, we take sustainability and social responsibility very seriously.
And we delivered on our commitment to power all of our data centers and our facilities With 100 percent renewable energy, we also announced That by 2020, 20% of our car fleet will be electric cars. And most importantly, We continue to listen to our employees. While we have many programs focused on our employees, I'd like to comment on a few in particular. We placed increased focus on developing our leaders. We introduced the SAP Leadership Principles as a foundation that connects All leaders to SAP ensuring customer success, driving simplicity And developing amazing talent.
And you know what, we saw a really encouraging increase in our leadership index Around trust, with an 18.3 percentage point improvement to 46.8 percent. And we continue to strive to increase the number of women In leadership roles at SAP, we've already seen an increase from 18% In 2010 to 22.4% at the end of 2014, And we aim to have 25 plus percent of management positions held by women by 2017. And year over year, we added another 102 women to our management team. How about that? To further support progress, We offer executive sponsorships for women and require at least 1 female candidate To be included on the shortlist for leadership and key executive positions.
And last year, we launched our truly unique diversity program, autism at work, Recognizing the valuable abilities that people with autism bring to the workplace And we aim to have 1% of our global workforce represented Story of how the program has positively impacted the life of 1 young man.
Patrick Vieste is finally seen for his ability, not his disability.
Every morning, I wake up and I'm just happy to come in to work.
Thanks to SAP's Autism at Work program, Patrick, who has Asperger's, has been employed as an IT project management associate for a year. How were you feeling before you got this job in SAP?
Well, I was very uncertain about my future. I didn't know exactly where I was going.
And he's not alone. More than 80% He joined government officials in a call to action for more companies to hire people on the spectrum.
It is a tremendous honor to be here to share with you my
The reality is that autistic people represent a tremendous Untapped workforce and a tremendous untapped marketplace.
I'd imagine there's still lot of fear with big companies though. How do you get them to turn the ship and go there?
The best way of turning that ship is for companies to see When world class employers like SAP are making an investment, putting people to work and saying what kind of value These folks had in their companies. Other companies are going to say, it can work for my business as well.
It's worked so well for SAP,
We have people in the very different locations. We have people in Ireland, in Canada, United States, Germany In India, this year we're expanding into Brazil in the Czech Republic. We're expanding the footprint of
the program to include human resources in financial services. Innovation is based on diversity and inclusion. And diversity means we really value all different perspectives. And it means including perspectives from people with autism. And without having the second perspective, this additional one,
we could not create superior products. For Patrick, SAP's Autism at Work program meant a chance to pursue his dream like anyone else.
I feel happy. I feel productive. And overall, I'm just very grateful at the where I am and being able to accomplish something every single day.
Beautiful story.
We remain deeply committed To developing the unique talents of our people and believe that a variety of cultures, lifestyles, Opinions and interests creates an environment that fosters innovation and happiness. Turning now to our stock performance since 2010. Our share price has more than doubled. SAP is a growth company and a very strong investment opportunity. This Market clearly recognizes our success and supports our strategy.
In 2014, A year of business model transition and strong investment, our stock declined 6%. Since January of this year, however, our stock has already increased Almost 17% as the sentiment in the market recovered and we advanced the execution of our strategy. We believe strongly our shareholders should benefit from SAP's profitable revenue growth. And for 2014, the Executive Board and the Supervisory Board proposed to raise the dividend by 10% To €1.10 per share, this represents a dividend payout of Approximately €1,300,000,000 and a payout ratio of 40%. It should be noted that in 2014, we have also updated our dividend policy.
The former policy was to distribute more than 30% of profit after tax In dividend, in recent years, the payout has been greater than 35% of profit after tax. Therefore, we are amending our policy, increasing our minimum target payout by 5 percentage points Please note the following agenda items that you will be Ladies and gentlemen, in summary, our strategy is clear. We are helping our customers navigate the digital economy and we are helping them to run simple. We are confident in our business and we'll continue to focus on profitable revenue growth. You can see this in the ambitious goals we set for 2015 and beyond.
Let me finish by sharing a very special message from a close partner and friend who has had particular success With SAP in 2014.
Deepak Sudhirade. Dear SAP shareholders, exactly 1 year ago, I sent another video message to you. At that time, I'm hoping that we'd be world champions in summer 2014. You as a shareholders, you are 2 world champions as well. Thanks to the SAP technology, we actually did it.
We are the world champions. Therefore, thank you very much for your support and now enjoy the rest of your AGM euros, please for the Oliver Beerhoff.
In closing, On behalf of the entire Board, thank you for your continued trust. We are all looking forward to another successful year And a great future for SAP, Willendank. Thank you. Thank you, Bill.
Thank you, Bill. I now also call all other agenda items 2 to 7, which you may find In the invitation to the meeting as made available along with the management's resolution proposals In relation to Item 2 on the agenda concerning the appropriation of retained earnings, please note that The Executive Board and Supervisory Board have adjusted their proposal as advised in the meeting invitation To reflect a change in the number of shares entitled to dividend, however, the proposed dividend of €1.10 €0.10 per dividend carrying share has not changed. The Executive and Supervisory Boards, therefore, now propose that the meeting resolve as follows: The retained earnings
of
8,000,000,000 308,244,000 €819.52 from the 2014 fiscal year as in the annual financial statements be used as follows: payment of a dividend of €1.10 for each qualifying notepar share Amounting to 1,316,004,504,504 and €0.50 €400,000,000 to be transferred To other revenue reserves, the balance of 6,591,000,000,793,003 100 and euros to be carried forward to the new financial year. This text of the proposal is available for inspection at the speakers' table. In relation to Item 7 on the agenda, we propose that Supervisory Board members receive fixed compensation only. The variable element of Supervisory Board members' compensation to date had met a recommendation of the German corporate governance Meanwhile, the code also deems an exclusively fixed compensation model for Supervisory Board members good corporate governance. We therefore decided to do without the variable compensation component for Supervisory Board members in the future.
I meanwhile received the attendance count of the company's share capital amounting to 1,228,500,000,005
€45,232
divided into the same Number of no par value shares, a total of 813,429,465,465 are represented at today's AGM. This equals 66.21 percent of the voting share capital. An additional number of shares And votes are going to be accounted for when voting on agenda items 2 to 7. This means that 814,000,000 598,810 NPV shares are represented. This equals 66.31 percent of the share capital.
And before we continue, I would like to Firstly, thank those colleagues of the Supervisory Board who are going to leave the Supervisory Board after this meeting As we had elections to the Supervisory Board, and I would like to thank my colleague And Deputy Chairman or Chairperson on the Board, Ms. Kunzmeyer, Christiane Kunzmeyer. She has done a terrific job as the Deputy Chairperson and stepped in Quite often, whenever I was incapable of chairing the meeting for Various reasons, as I always took part in the meetings, of course. So thank you very much once again. I hereby open the discussion, which will take the form of a general debate on all agenda items.
And now I would like to first invite Mr. Lars Labriga of the Association For the Protection of Investors SDK to take the floor.
Mr. Chairman, Ladies and gentlemen, my name is Lars Labrieger. I speak on behalf of the Association For the Protection of Investors and those shareholders Who asked us to vote on their behalf. Now one preliminary remark to Mr. McDermott.
I've been doing this for 5 years And those times were I reserved the first five minutes of my address to criticize The address of the CEO, now those days are over because that was great all out. Well, that's something I really have to state very clearly. You really tried to explain difficult Business cases to us, so you were quite demanding. And if you had provided some more details to us on the 3 business cases in the cloud, if you can do so while The questions, well, I would be very grateful. But for Aladros, this is just great.
And what has also been great is That you try to explain the products to those people who may be only coming here once to attend the AGM And for whom all of these products sounds like a somewhat cloudy business, now to make them More tangible, well, that's great. Delivering fresh products to shops where they still need it, that's really something that is really tangible. And you also draw attention to aspects which other speakers would have skipped. For example, of course, the very pleasant currency effect of the dollar, you mentioned that as well. Thank you very much for that.
And maybe you might also have commented on the underlying economic aspects For why Conquer is a profitable acquisition, but maybe you were just polite and wanted to leave that question to me, And maybe then you will provide the explanations later on. So the first 1,000,000,000 of investment in the cloud were I remember that very well. The takeover was good. We will generate profits. Everything's fine.
Of course, You can do that even better today compared to last year. And against the backdrop of your address, I'm sure everything will be fine. So and I think your positioning here as somebody supporting the sales activities, now that's something that was like a eureka effect for me. Now many customers will think many companies will kill a company if they think of Cloud of the cloud business, but SAP is going the opposite direction, run simple. And of course, that's a promise you've got to live up to and that's what you try to With new user interfaces, and if that works, and it seems to be worked out well, if you look at the net promoter I think that's very surprising during these times of change.
And maybe you can explain that to us, 19.1, That doesn't sound very well. It's not 19% of customers being satisfied. That would be very low. I think that you should give us the explanation of what that score means. So run simple really is a great slogan.
I think that's good. And if you really live up to that promise, namely reducing The complexity of the data world for clients, then you will really generate value and that is a good thing to do. Now Whether that initial video clip was really necessary, SAP HANA is a great product, but whether a company really Turns alive and develops a soul after ordering SAP HANA and Whether the executives of a company will really want to hear that, now that's something I do not really understand. But that's definitely also a clear question To what extent will companies only turn alive after ordering SAP HANA? And to what extent will they really develop a soul after SAP, Hana.
That's a bit of marketing talk, isn't it? But let's maybe also matter of taste. But that's not meant to reduce the scope of my praise. 4 years ago, I think, that was when your co CEO was in office as well. I once said this was the worst address of a DAC CEO I ever heard.
Now with your address today and with your endeavor to explain things to us in an easy to understand manner And with your endeavor to become very customer centric, that really brings us to the upper third or upper fourth of the DACH's colleagues. Wanted to say that very clearly because I was also very sharp in my criticism in the past. Talking about the past, when I came here for the first time, you presented initial video clip to us you very proudly announced an iPad coming up. And there was a sports items manager who, In the newspaper realized that the Olympic Games are coming up and then she quickly increased the sales forecast with the click of a finger. I mean, that's really What you would expect in a normal regular household, how business is run, But that is something you also now presented in entirely different manners, and that's good.
And 5 years for me is a good time to take stock. Initially, You had to create a kind of startup feeling in terms of the cloud, and that was something that was entirely new for SAP. That was a bold And we were really very critical at that time asking whether you knew what you're doing. But now we've got to admit you did know what you're doing and the business is really running very Stable. Of course, one might criticize the slight decrease in returns, but still it works well.
I would have even accepted and tolerated a stronger decrease in returns. And for 5 years, this has been a positive story, which is something I really would like to praise. Of course, one could criticize The dividend return decreasing, maybe that's also due to the strong increase of the share price. And by bringing the share price back to the range of the year 2000, well, tomorrow, I'll go to the AGM of Deutsche Telekom. They have got Some a long way to go to reach that point as well.
But that you intend to reach it very soon, that's something I really would like to Applause very much. I've got a couple of questions. Now I said the €8,000,000,000 of Concur, why does it make sense? And on the other hand, the €50,000,000,000 for sales There was a rumor about this. Why would this not make sense?
Can you give us the Broad picture of the cloud, open up the cloud to us. It is decisive to have a strong In certain areas, at certain points within the cloud. And can you give us some more explanations about our competitors? What's our position versus Oracle? I know usually you would not address this in a CEO's Address, by answering questions, you can certainly do so.
And I think that's something many shareholders are very much interested in as well. Yes, thanks. In customer net profit, I already mentioned this. Then Please explain the customer Net Promoter Score to us because we really want to understand what this 19% means. Now HANA, 6,400 customers and S4, 370 customers.
Is that a lot? Because this is a hall which accommodates 10,000 people. So there's room for another 7,000 people. Now of course, that's unfair. But at first glance, these look like rather humble numbers.
So can you give us the broader picture Telling us whether this is a lot or not. And now very, very valuable. Explain to us to what extent the German national soccer team Do you have an exclusive contract with the German national soccer team or can other national soccer teams also get That's game changing support from SAP. Now one more comment to the agenda. 40%, We've got a range of dividend payout between 40% to 60%.
40% for us is okay. We do not approve the authorized capital because this means that this opens up the possibility of more than 10% of the Capital stock, but if you had Informed as if you had asked us before, we would have approved it. You didn't ask us beforehand. And therefore, we resort to our standard decision. I'm personally, I'm not worried about you spending the authorized capital in a nonsensical manner, certainly not Quite in contrast, I think in today's market situation, many shareholders would even expect reasonable acquisitions.
Supervisory Board compensation, that's something we also approve. We have always asked for fixed compensation only even when the German governance Code then to propose it. Now if I remember it well, you somehow tried to link it to the dividend. Now we believe that this doesn't make sense because it's a supervisory board who decides on the dividend. So that's really would be a poor indicator.
But We just think that the basic mechanism was a poor one. And I was delighted to see that Professor Plattner did not seize The opportunity to give the Chairman twice the compensation of a regular Supervisory Board member, although The Chairman certainly has twice as much work to be done as regular Supervisory Board members. Probably you wanted to give the regular supervisory board members a better compensation in order to find good candidates. Maybe that's also your view. I think it would have been a good idea.
Now personally, after 5 years, I will Become independent myself and in that position, I might theoretically Get an order from SAP and if that is theoretically possible, I cannot be And an active spokesman of SAP shareholders anymore, and that's why at this point, I'd like to bid farewell to you. Thank you very much. Thank you very much, Mr. Lars Labriege. And then I would like to ask Ms.
Jelle Bennett Heinegger to take the floor. She represents the German Association for the Private Investors. Thank you very much, Mr. Plattner. Ladies and gentlemen, my name is Jela Benner Heineken, and I speak here on behalf of the German Association for Private Investors, DSW from Dusseldorf.
Now Bill McDermott, You stated it quite rightly. 2014 was a strong year for SAP. But to be honest, I've got to tell you, it wasn't really as strong as we had expected, and it was not as strong As we all had expected and hoped for, so for that reason, I take a somewhat more sober view than The previous speaker. If you look at the development of the share price in 2014, then well, there has been A disappointing development. The share price of SAP did worse than DAX 30 And also worse than various industry indexes.
Now what is this due to this poor share price development? Certainly, it's also due to the fact that in October last year, SAP Modified its initial forecast for 2014 because that initial one was €5,800,000,000 to €6,000,000,000 of €1,000,000,000 of operating profit and it had to be reduced to €5,600,000,000 to €5,800,000,000 That's something you did not directly mention in your address, Bill. Nevertheless, I wanted to remind all of our shareholders of it. And then what you achieved at the end of the day was €5,630,000,000 And thus, This was at the lower end of the amended forecast. For that reason, ladies and gentlemen, I'm not that enthusiastic about last year's performance in this regard.
Nevertheless, I think what certainly Soothes our souls as shareholders is the dividend, 1.1 Euros, I think that that's quite good. And with the payout ratio of 40%, well, I've got to be honest, that really means that we are on the right track. Of course, On the other hand, we have to admit that we've been pampered here at SAP. We have not been accustomed To forecast being reduced, and we have not been accustomed to new targets being only barely reached. For us in the past, SAP always used to be an outperformer, and that's something which is not the case anymore to the full extent.
SAP is undergoing a revolution. The entire business model is being turned upside down. We are moving away from the traditional business model now towards the cloud model. And this transformation, of course, Has left its marks. Employees are reassigned.
Jobs are cut. And of course, In times of flourishing corporate profits and increasing dividends, this is hard to explain. Baldorf is undergoing change. That's why my specific question to you, Bill McDermott, is the following. How long will it take For this transformation to have been completed also with a view to the workforce and when will the entire workforce Be able to calm down again.
Ladies and gentlemen, old SAP has already changed massively since 2010. Since 2010, about €20,000,000,000 We're spent on company takeovers. And it's as Bill said, it's like Windhound race, you've got to be very quick in buying the right companies, the innovative ones In order not to fall by the wayside at the end of the day, success factors are Ariba, Hybris, Fieldglass and now Concur. To be honest, if it were not Bill McDermott, you could assume it's Bill the Conqueror. Now I'd like to know the following.
These takeovers, Have they also been worthwhile for us as shareholders? What is the additional profitability we thus Purchased or did we just purchase and take over a potential for the future? In that case, we will Payings, in some cases, skyrocketing figures without knowing whether it will all pay off at the end of the day. Concorde Technologies, ladies and gentlemen. Well, the takeover price of 7.7 $1,000,000,000 well, that makes it the biggest and the most expensive acquisition in the history of SAP so far.
There's one thing we should not forget in this context. In March 2012, you had already contacted Concur. How much would you have been willing or asked to pay for Concur at that time in 2012? I'm sure at that time, the price would have been much lower than what we now paid in 2014. And could you also please explain to us Why at that time in 2012, when the purchase price was lower, why the deal at that time failed?
Conquer is not Dairy Queen, the competitors say. And that's why we really would like to know What specifically did we buy with Conquer? I really like that video and it was also very impressive. And I think It also gave us at least a glimpse of the potential which Concur bears. However, If I look at the exact composition of the price we are paying, namely the $7,700,000,000 well then in euros €5,400,000,000 are paid just for the goodwill of Concur alone.
And of course, here as shareholders, We would like to get some more details on the economic figures. How is profitability at Concurrent, especially in sales, be increased in a sustainable manner? How long this is going to is this going to take? How much is accounted for by cross selling opportunities? How many customers did we take over?
And how Is the goodwill going to be allocated specifically? It seems to me, ladies and gentlemen, there's above all one thing That we purchased namely SAES. And of course, that means we also purchased A strong market position in certain segments and also in certain regions. Now of course, we read the newspaper every day and then we can read SAP is number 1 or sales force is number 1. 1 cannot really tell who the real number 1 is.
Maybe you can shed some light on that question. Is sales force now the biggest Software vendor in the cloud as sales force claims or are we number 1 After having taken over Concur. Well, and talking about the business in the cloud, then I also would like To know how this business really evolved in detail, Sometimes vision in the cloud is a bit blurred. Therefore, I really would like to know How much business do you create in the cloud with existing customers and how much with new customers? Because at some point, I have read that you've got only 10% of new customers, which What's terrifying me a bit if it were really that low.
Bill McDermott, you presented the model of the future to us, the model 2015. And in February this year, at the annual press conference, you also presented the SAP 2020 model of the future, and that is a really impressive one, ladies and gentlemen. New SAP 2020 is to generate sales revenues between €26,000,000,000 €28,000,000,000 And a net profit of €9,000,000,000 Just to put this into context, this for this year, The goal is between €5,600,000,000 to €5,900,000,000 of net income. And by the year 2020, the cloud business is to grow by a factor of 7. So with a Time horizon of 5 years for a publicly listed company, ladies and gentlemen.
Well, this to me sounds like socialist planned economy Or the construction of Pays in the sky or maybe these are real visions. So if you're really serious about that, then this would really be The big growth story of the future for SAP. According to your plans, We will see a big turnaround for SAP in 2018 because that is the 1st year where the cloud business to generate higher revenues than the traditional SAP business. And then profitability Should start shooting up into the skies as well. But it's going to be difficult time until then because You want to maintain the attractive results of the traditional business for as long as possible, whereas massively enhancing the cloud business at the same time.
Now that's not going to be an easy undertaking, ladies and gentlemen. But if you succeed, then you will certainly have conquered an impressive pole position to Earn money. And if that really works out well, ladies and gentlemen, then the prospects for us as shareholders are really unbelievable, But it's still a long way to go. And therefore, we will remain skeptical and keep a close eye on things until then. Apart from the cloud, however, there are also other products which have been become real big sellers.
S4HANA, not I'm a late digital Immigrant, as it is called, and S4HANA, that sounds like the latest model from a Stuttgart carmaker to me, yet S4HANA is a true success story, and that's something you explained to us in a very tangible and in an enthusiastic manner. I think it was so much enthusiasm that I wouldn't be surprised if at the end of this AGM, the sales numbers of S4HANA would go up dramatically because a lot of people will place their orders right after the AGM. S4HANA It's so successful, and that's very interesting, so successful that the intelligent agencies all over the world have developed an interest in that system and also The NSA. Now in that context, I'd like to know is that true? What's the revenues That we generate through business with these secret services or is it all top secret?
Now after talking about the products and segments, let's briefly comment on the regions, especially China. More than 600,000,000 Internet users in China represent a tremendous potential for SAP applications. And you've already invested quite a lot. By the end of 2015, SAP will have invested €2,000,000,000 in China. And here once again, I'd like to get some more details.
Have your investments in China So far paid off. What is your roadmap for the future in China? How is the joint venture with China Telecom doing? What are the revenues and the profits of that joint venture? And then Last but not least, I also would like to know about your plans for an IPO in Shanghai, Which you have touched upon here on this occasion a few years ago.
So much for the regions, ladies and gentlemen. Let's have a brief look at the Risks and opportunities at SAP as part of risk management. Now here operating risks and litigation risks, Legal risks and license litigation, all of that always plays an important role in this regard. You remember in the past, We often talked about that litigation with TomorrowNow. It has been ongoing for 7 years and finally has been closed.
And we can say After a lot of horror in between, What we paid was €1,000,000,000 less than what we had feared in between. The litigation with Versata has also come to an end. And looking back, I would like to know how much did we pay, All in all, for closing all of these litigation matters, lawyers and court expenses and so on. Now with all of the new companies we have taken over just recently, does this mean that we also purchased additional risks? Or is that something you also Reviewed thoroughly with Concur during the due diligence review.
Let me also briefly comment on the agenda. Our DSW doesn't have any issue with the new authorized capital Requested under Item 6 because you have presented corresponding statements and because the maximum Limits regarding the exclusion of shareholders' rights to purchase shares have been complied with. Item number 7, changing the supervisory board compensation to fixed compensation alone, well, that's something which I had asked for At many previous AGMs, you will certainly remember that very well, Mr. Plater. And I'm glad that you have now overcome that Old element of the past and that you are now switching to fixed compensation alone.
That's going to make things easier. And this also in full line with your corporate motto, RunSimple, which should also apply to supervisory board compensation, shouldn't it? Now looking ahead, ladies and gentlemen, 2015. Then the first thing for me to state is, I believe now It's enough of purchasing for the time being. We have spent enough money.
And now the first thing for us to do now is to digest these numerous takeovers. Now my question is how long do you think will that process of digestion take? How long is it going to take until All of these companies that we have purchased have been fully integrated into the SAP group and how long will it take until they reach The required level of profitability. And if you look at the Q1 results, ladies and gentlemen, well, then I can tell you that there is certain hope that the year 2015 will show some acceptable and good results, €5,600,000,000 to €5,900,000,000 in Net income, that is your objective. That's slightly more than the amended forecast That you presented to us for last year.
And we all hope that this time, you do not have to Lower that forecast this time. Maybe here we will get some boost from the meat euro because it's not only give wings to the company, it Has also boosted the SAP share price since the start of the year. Today, the share price is slightly above €69, and I think This means we are now on the proper home straight heading for about €80, let's say. And if we then also get an improved dividend next year, then we will be as enthusiastic as you have been today. Thank you very much.
Thank you very much. Ms. Jela Benner Heineacher, I now call Hans Martin Buhlmann of the Association of Institutional Private Investors, you have the floor. What is in the report is not simple at all. We find that there is a profit that is higher, a margin that is lower, costs that have gone up And Concur has a goodwill of which you wonder how it is ever going to be earned.
And worst is Cash flow. Now as a CFO, don't you worry about these things, €2,700,000,000 after €3,300,000,000 This is certainly not something that looks very pleasant. The quarterly result is even more complicated. Quarterly result, according to IFRS, that is The rules we apply according to the IFRS is 6.38% after 6.23 percent, the quarter before that, but non IFRS. In non IFRS terms, The quarterly results are 10.56% after 9.19% before that.
So In one scenario, it went up. In the other scenario, it went down. How can you understand these things? The only thing that is simple and there you actually remain simple is the Dividend, we had a euro before, but now it's €0.10 more than that. Now if you declare we're going to do that Now the agenda, ladies and gentlemen, is simple as well in principle.
Well, looking at the Executive Board, you keep wondering at SAP, is everybody here still? You may This time, we have one new person even. And for the supervisory board, we find, Well, but in the past, it increased the variable component and now it wants to End this process of increasing the variable component, going up to an even higher level at a fixed rate. So saying that they would have this process from now on. If they want that, well, they can have it because So far, they have been rather successful.
And then I thought, well, at some point, we'll actually get to meet Hannah. Hannah at the AGM, hands on. Today, Mr. McDermott, you said today, and it could be much more than this, we have over 6,400 SAP HANA customers and 1,000 start up companies using or developing applications based on HANA. Now what is that actually?
6 1400 and something customers more and an additional 2,000 start ups. So Companies that don't have any money really to pay us, do they? And they will be developing on our behalf. Did I Get you right or is it a total of 8,400 customers all in all that you gained through the process? Maybe you can explain These numbers to us again.
And then as has been said, there's S4. No, We don't know whether it's from Stuttgart or from Ingolstadt actually, but well, S4HANA is A completely new thing and since we don't have an S4HANA yet, you explained to us what it is and I didn't understand that explanation, I have to say. First of all, you said we eliminated the whole program code. So there's no program anymore and Hanna does everything without a program. Is that correct?
I can't believe that. And secondly, you went on to say that the applications have new and very useful functions. Well, I can agree with that, but I don't really understand what this would mean, many new useful functions. What does that mean? And by the way, you said 370 new S4HANA customers In Q1, well, every hour per day, we'll leave the night aside.
Every hour per day, US4HANA customer. Now if you were to work during nighttime as well, Well, we would be even more pleased. And by the way, the description you gave for S4HANA It was as follows. You say it's a kind of desktop. And now we get a lady on the Supervisory Board who Knows what design is all about, so she can design that desktop.
In 2014, €5,500,000,000 was the number, The big number we heard, it's going to be 5.6 percent to 5.9 percent in 2015. Do you think you could actually make the Top of the range here and not remain at the bottom of it. Ever since we've been celebrating the AGM In the SAP arena, change is part of the business model of SAP. In 2014, A margin of 35% was announced for 2017. In 2015, that is today, the announcement of a margin is 35% for 2020.
Now that's not exactly an increase, is it? So what about this old forecast? Was it simply swept away Buy some cash or device or what is the explanation you can give us for that? Well, you posted excellent revenue figures, adding that The bottom line numbers can now be better predicted since they're in the cloud. Now If profits are better to forecast in the cloud, then you should be able to tell us what they are.
And a part of the value of SAP as a company It should be calculated from that, but we would have to take the actual income that would be there for the next Quarters with a certain discount, and this is why I would like to ask you to actually go through The motions and give us that calculation. You also added there's a public cloud, there's a business cloud and there's a private cloud. Now to me, a cloud is very far away. What is the difference between the private, the business and the public cloud? Can you describe that according to business ratios?
Do we get the same money for all of Some are different types of money. Will you start with the public cloud and end with the business cloud and lead customers through the different clouds? And how is it that you want to actually design this migration from one cloud to another? Mr. Murchic, you are the new CFO.
Welcome to you. I found it exciting. You said you've been with us for 77 quarterly Statements, and I think it's even more important to say that you've been around for 'nineteen dividend payouts All ready. So I hope you are going to remain faithful to that as well in the future because this is what you are responsible for after all. I also read in an internal news magazine of SAP that there's a digital officer now.
Can you please tell us why that is? Because it was praised as a special innovation in This company magazine, if I may call it that. Now before I touch on the income statement, let me ask you two questions. Turnover in Asia is rather small. Why is it that there are no clouds in Asia?
Why doesn't Asia Need no SAP. Why are you not more successful in Asia? Or do you have to still organize these things and only started doing that? And the last question on the cloud. If it is true that people get connected up there, can machines be connected to one another In the clouds as well, so can there be something like a combination of man and machine?
Or are these things limited in some way that you're going to explain to us? Now if you look at the profits and loss statement, you On Page 161 of the annual report, you find 1,000,000,000 being posted there, currency Differences, what have you. Now you explained all of that definitely on 10 pages. Now I would be happy if you were able to say, well, we're not a financial company. We are A software company after all and finance is just an aside without risks.
If you were able to say Something like that in three sentences, I would be really grateful. Now for the balance sheet, that's of course, much more difficult, and everybody who spoke before me has said this much. Goodwill of over €20,000,000,000 And for that to not sound so much, you added a line that's Creative Accounting after all. Intangible assets is what you called it, another €5,000,000,000 So €25,000,000,000 all in all, of which we say It's all very good, but we can't actually see it and we can't actually touch it. At a balance sheet, Total of €25,000,000,000 or rather €39,000,000,000 So the rest seems to be, well, Rather small.
So that means our equity is smaller than goodwill. Don't you have to find a way and shouldn't you find a way to Take these intangible assets and take the goodwill and reduce it over time and eliminate it from this item As an expenditure. Now as for Concur, I had to smile. With this handwritten receipt Being scanned for accounting, I'm not so sure whether Accountants will be happy with something like that. Well, it would surprise me at least.
The company we bought, According to the numbers of Page 185 has a return of 17.4%. If I take a Look at the numbers of the SAP Group without Concur, our return is 18.7%. So this Purchase actually means that we're worse off than before. Maybe you can explain that a little bit. Looking at the combinations I just gave you, we gained headcount of 5,000 and Shareholders who get the €1.10 would like to thank all the people who worked so hard for that 74,400 and Tomorrow was yesterday, ladies and gentlemen.
Tomorrow is now over and We paid £273,000,000 last year again. So let's just put a lid on it. And the question really is, are there worse things to Follow? Or does this mean that everything's dead by tomorrow or yesterday or whatever With these financial statements for 2014, We just heard about the retail industry has said there that Foodstuffs wouldn't go bad if they all had S4HANA. Well, that would be nice.
Right now, retailers Food retailers face a different problem and that's logistics. And maybe you can help with logistics as well. Could you then please Use S4HANA to do the transport, like transport of people. It would be easier for us to cope with the railway strikes. Ladies and gentlemen, we bought a heap of different companies.
Let me pick out Ariba. Now is SAP an Ariba customer? By what amount have we lowered our costs By buying Ariba and maybe we could even gain new customers, We now have 3 members of the family. We have Concur for travel because SAP people travel so much. We thought it made sense to actually buy the company, then Ariba for the material, food stuffs and financing, food stuffs, what have you, To organize all of that, and we have field tasks for organizing HR and our people.
So 3 members of the family. And Item 6 on the agenda says that you need fresh money. Do you need the fresh money in order to be able Do you have a 4th member of the family see the light of day? Or will you need the money to actually produce something from it? And are these different networks going to be networked amongst one another In the future or with every new child, with every new network, do we have to expect New higher costs.
Well, answering your question of whether there is a company that has a soul, You might answer with a question, can a company have a 6th soul? Can SAP have a sexy dividend. Can a sexy dividend of SAP actually come about by the fact that The number goes up from 30% to 35%. Quite by accident, I have the chart on me here. This is Something that the shareholders gave you in advance, believing in the service of the company of people and products.
If you were able to give us a sexy dividend for that with a payout ratio going up from 30% to 35% With RunSimple helping it to increase by 10% year on year, then I am sure all shareholders would be happy in the long run and return every year in order to find that this was the case. Thank you. Thank you very much, Hans Martin Bullman. We have a request for the floor by Sabine Overcamping, German Women Lawyers Association. Professor, Doctor.
Plattner, Mr. McDermott, ladies and gentlemen, shareholders, My name is Sabine Ofer Kemping. I work at the Ministry Of Justice in Saxony Anhalt, I'm responsible for Labour Law and I am A member of the German Women Lawyers Association in an honorary capacity, we have been fighting for more women in management positions. We're asking For equal rights and gender equality, and we have visited Many different AGMs of stock corporations and ask about the career opportunities of women in this company. So you are quite familiar with us and speakers at AGMs.
The law for equal participation of men and women in management positions that Entered into force in May 2015 was also supported by us. We are welcoming this Act, although we ask for more, we want the introduction of a women's ratio of 40% in Supervisory Board and more transparency and diversity. The German Women Lawyers Association started the European Women Shareholders Demand Gender Equality Project in Europe. This project is being supported at a European and national level. And together with 7 European partners, we carried out, one of them being the Ministry For Justice and Gender Equality, which I work for.
As part of the project, we're here today. In the first half year of twenty fifteen, a total of 100 AGMs will be visited by us, amongst them All Eurostox 50 companies in Benelux, Germany, France, Ireland, Spain and Italy and other AGMs of big corporations of national indices in Bulgaria, Hungary and the U. K. Our questions are always the same. The answers will be evaluated and will be compiled in the documentation.
And this documentation will be presented at the 11th 12th February 2016 in Brussels. Looking at the Supervisory Board of SAP, we believe that SAP is well underway for women. 30% has already been reached by the employee representative side. Now we hear that things are going to happen on the capital side. Against this backdrop, we welcome the announcement of Professor Doctor.
Plattner, the Chairman of the Supervisory Board, stating that As a successor to Helmut Midon, Professor Geisha Jost is going to become a new member of the Supervisory Board. There is no woman on the Executive Board right now. In 2010, a first woman was appointed to the Executive Board. At the time, there were only 2 women as members of DAX Companies Board. 4 years ago, you were indeed a model for DAX Companies.
In 2014, you Nominated or appointed 3 new members of the Board, there wasn't a single woman amongst them. In your annual report, we can read that SAP is derived From surveys that female members on the Board will have a positive impact on the reputation of a company. This, it says, would improve the employer ranking and make it easier to win top talents for the company, Meaning that revenues could increase as a result. Looking at these insights, we would have expected that some Woman, at least one, would have been appointed on the Board. Can you imagine that no single woman Had a position on the German government bench.
Do you have women for that on your team? Mr. McDermott, You received some applause when you presented the fact that 122 women Became members of the management team last year. And I was kind of puzzled thinking, is this a good piece of news? Don't we look at this and put it into perspective?
21.3 percent of women in your management team altogether, the last number From Germany is lower than that 15% according to the 2013 status report. For 2014, you don't give any numbers anymore. I would like to know the reasons for that. 25% is what you're looking for at a global scale by 2017. Are you also remembering women in Germany?
Just by way of comparison, Volkswagen is looking at the share Our graduates of the study courses relevant to Volkswagen and the number is 30% here. We believe that this would be a manageable approach. Now to the questions that relate to your corporate policy and the Supervisory Board and Executive Board, this year, there is no Supervisory Board election. How have you made sure That you have suitable candidates for every phase. It's a publicly available job profile for members of the Supervisory Board.
As early as 2012, the European Commission proposed a directive to ensure That there is a 40% proportion for Supervisory Boards. Right now, there are 22.2% of women on your Supervisory Board. 30% is what the German law stipulates and the determination of binding numbers. How much is it going to be for SAP? Now on the Executive Board, we are happy to state there is 1 woman on the Global Managing Board of SAP.
And we read in your you'll report that it is your declared target that whenever a position is vacant on the Board, there's going to be an internal and external search where at least 50% should be on the shortlist. We believe that this is exemplary. Unfortunately, last year, no woman was appointed despite this. And despite the changes in 2014, There are still 5 men and no women on the Executive Board of SAP. What is your company's target with regard to increasing the percentage of women on the Executive Board in the next 3 to 5 years.
The German law stipulates the determination of a binding number and a public Report on the achievement of this target. What is your target? What are the concrete measures you envisage To achieve this target or even exceed it, is there a publicly available job profile for Executive Board members? How are Members selected for the Executive Board and how can you make sure that at every stage of the process, The relevant candidates are being considered. Let's now come to questions on other management positions and personnel development.
Now on the share of women in the overall workforce. According to the CSR Directive 20.1495 on social responsibility of companies. Now according to the CSR directive, starting in 2017, the management reports of companies have to make Explanations to this effect. In your annual report, you published the share of female Employees as 31%. I would be interested in the numbers for Germany.
What is the share As an absolute number and as a percentage number of women amongst the workforce in Germany. And now for the women's share at the 2 management levels below the Board. According to the new law, The share of women on these two management levels below the board, there must be specific targets set. In your annual report, there are numbers relating to the share of women all in all and at a global level. I would be interested in the current numbers for Germany.
What is the number of women working in your company at the two levels below Board level? Please tell me the absolute Numbers and the percentage for every management level. What are your targets? How many women Work and middle management, please give us numbers in absolute terms and in percentage numbers. Let me now come to the question on the promotion of women to the 1st and second management level below Board level and thus to the 102 women you mentioned as women being promoted, Ms.
McDermott. How many women and how many men were promoted to the 1st and second management level below Board level last year. Please state the share of men and women in absolute terms and As a percentage, respectively, both for the first and for the second level separately, Let's now come to Corporate Policy. In your integrated report 2014, Financial and Non Financial Services And women in management positions, you have specified certain things which we were very interested in. Now I have the following questions.
How do you identify future Executive female executives, how do you support and promote women? And please inform us about your measures and How they're being evaluated? Mr. McDermott, you mentioned the coaching program, but So quite possibly, there are also other activities in this area. What are the measurable targets you specify to make sure that talented women Can tap their full potential in your company?
Who is responsible for the result? Is there a reporting chain From the Executive Board to the Supervisory Board, I've also got questions on corporate communication. How do you communicate The envisaged change, how do you, in concrete terms, approach the workforce and management On the topic of more women in management positions. And my last question goes To the area of company or corporate interest, have you looked into whether higher share of women At all management levels, is in the interest of the company with a view to your customers, your market and competitors? I think you have.
What are the concrete measures you've taken? Thank you very much for your attention, and I am looking forward to your answers.
Thank you very much, Ms. Sabine Oberkampin from the German Women's Lawyers Association. And the next The speaker is Mr. Peter Schubert. Mr.
Schubert, the floor is yours. Mr. Chairman, ladies and gentlemen, I like coming to SAP's AGM. I remember the very first ones, which were held in Wiesloch. At that time, we talked about R2 and R3.
Now it's been a long way from those old days to today. And if I think back about the numbers of SAP shares I held at that time and what this has turned into today, then I'd like to thank you Very much for this. Well, the applause probably was From the very few ones who were there in Wiesloch many, many years ago. But on the other hand, it's also a sad day Because one of the cofounders of this success, Mr. Schira, whom I met personally from Heidelberg, that he has Left us.
And I'm glad, Mr. Pluttner, that you are still holding the Chair After Supervisory Board as one of the founders. By the way, I should mention that I speak on behalf of my own shares and shares of others, And I'm from Heidelberg. So I've always been in close touch with the company, yet so much for the past. And I do not have any questions on the Past fiscal year, I know this has been properly dealt with.
I know that from my own experience. I rather would like to turn Towards the future. And if you look at me, my personal horizon about that future is limited to a certain extent. And I want to make sure that I can spend the remaining years of my life in a good situation. Therefore, my question about the future for Mr.
McDermott. Mr. Dermot, in 2010, I'll tell you in English, you said 1,000,000,000 users. You said you want to reach 1,000,000,000 users by 2015, 1,000,000,000 users. And if you do your own figures, Saying, what is the revenues a single user can generate?
Well, I'm not going to go through the exercise yet. That translates into a tremendous increase. My first question is how much of that have you achieved? But that's rather a formal question. I rather want to turn to the future.
And if you look at the business use, Then there are 2 things that stick out, Apple and Google in the Automotive Industry. The automotive industry It's not perceived as a technical system anymore, which is based upon engineering solutions from the fields of Physics and Mechanical Engineering, no, it's now rather about traffic systems to be developed. Traffic and transport systems with problems only an IT company can resolve. And if you combine this one with that figure of €1,000,000,000 users, well, then that's quite a lot of data. Therefore, my question is, What are you doing in that regard?
Because it seems to me that SAP hasn't started focusing on that business yet, But what are you doing to generate revenues in that market as well on an international scale? So that's one thing I'd like to ask you to consider. And then my second Aspect is one of my hobby horses. And therefore, by the way, I'm glad that Mr. Mutsis from Heidelberg keeps up the tradition, so to speak.
I told you that in Wiesloch in those days, we talk about R2 and R3. And today, we know Big industry, if they're not using SAP, they're not really part of the game. Today now, we've got to ask about The small and medium sized enterprises because they have been mentioned time and time again and that something should be done for them as well. And coming from Heidelberg And seeing the numerous start up companies Who failed due to their lack of accounting systems, although they've got good business ideas, well, then it's just really, very sad. They failed.
We've got the wrong systems or the systems they've got are too big or they don't have any systems for Accounting at all. So I think this would also would be a good point of attack at the other end of These management systems. Mr. Plutner, I'm happy about HANA. That's really something that makes me very, very happy.
That's something new. And I think for this large number Of companies working in the small and medium sized markets, it should be possible to develop A proper system for them in terms of accounting and bookkeeping, which they can then also scale up once they turn into big players themselves. A few years ago, I attended a lecture by the German Chamber of Industry and Commerce. It was about design thinking. And I was impressed by that lecture because that was About an entirely new approach to software development.
And Mr. Plattner, that's why I'm addressing you because That's where innovation can be found. And this combined with your smart people in Potsdam, now that's something that would be worth considering, I think. And then you will certainly be on the right track to find 1,000,000,000 users. And For this, I wish you all the best and also for myself and for all of those others from the founding days from Wiesbloch Because then we will be able to enjoy the corresponding dividends and asset value increases.
So all the best to you and also to us. And I hope that we can all enjoy a continuously growing dividend and increasing share prices in the future. Thank you very much. Thank you very much, Mr. Peter Schubert.
Are there any further requests for the floor? We've got the new attendance regs, which I'd like to know. After stock capital of the company of €1,228,000,000 504,000 €232 with the same number of non par value shares currently 813,392,673,673,673,773, no par value shares with the same number of votes are represented here, which corresponds 66.21 percent of the stock capital, and as already indicated, voting by letters for 1,169,370 2,000 non par value shares have been sent in. That's 814,562 814,562,000 145 shares are present here today, which corresponds to a total of 66.31 percent of the stock capital. Now let me start by answering the questions that have Been put forward to me by Mr.
Schubert. Now there's a broad range Of solutions, SAP has got for small and medium sized companies. This starts with Business 1, which is a product With about almost 50,000 installations worldwide, then we've got this Business One, by the way, is also available from the crowd, so it can be run on premise and in the cloud. Business by design is a cloud product, S4HANA. And the public version of it is available In the cloud, and it offers almost the full range of the SAP Business Management Applications.
So there's a full range of products available in the cloud, Which SAP is making available to small and medium sized companies. The wish to enhance design thinking, that's something we have we're really living up to at SAP. Almost All development projects are taking place on the basis of design thinking. Customer project or so called co innovation projects are Being launched on the basis of design thinking and at various locations in the world, we've got so called application houses. And one of them, for example, has been established here in Heidelberg, which is fully booked out and the method of design Thinking is applied there and we're working on extensions and the implementation of new ideas together with our Now I've got one more answer For Ms.
Lars Labriga on Supervisory Board Compensation. He asked for more details. Now with the new proposal For Supervisory Board compensation, we, above all, wanted to switch to pure fixed compensation. And the compensation of the Chairman of the Supervisory Board of SAP, that is the fixed and variable compensation taken together is not twice The amount of that of a regular supervisory board member and we wanted to maintain that ratio with the new system as well. Well, I would like to continue with a couple of questions raised by Mr.
La Brega. On the one hand, there was the question about Why the takeover of Concur makes sense from an economic point of view? Well, that's fairly easy to answer. In 2011, we already found out that in order to make progress in that rapidly growing cloud business Through we would have to build upon a combination of organic and external growth. And we took over companies Allowing us to purchase strategic assets that would make would enable us to make progress in the future, Namely, success factors are Riva Fieldglass and most recently Concur with such a successful takeover.
And we've also been able to prove that after the takeover, We were able to generate synergistic effects, which were stronger than if the companies had remained independent. So more than 30% of organic growth has been generated in the last few years in the Cloud business. And this is also why the Concur Acquisition makes sense. We believe that through cross selling and by increasing the Concur revenues outside of the U. S.
And by Linking Concur up with our strengths also in emerging markets, now we believe that thus we will be able to increase Concur's Growth above average. And Mr. McDermott in his ad results pointed out that our intention for the Business networks is to achieve a gross margin of approximately 80%. And as of 2015, you will see very Clearly and transparently, how we're making progress because Ariba Fieldglass and Concur have been bundled And they now represent the SAP Business Network, which report on specifically in the SAP annual Reporting for the Q1, we have already achieved a gross margin of slightly more than 75%, and we will keep up that transparency in the future as well. And with this high potential for very high margins and the potential for growth through cross synergies in revenues, We believe that this takeover doesn't make sense economically.
Otherwise, we wouldn't have embarked on it at all. The second question was about the net promoter Score and what these 19.1% actually mean. The Net Promoter Score measures the willingness of our customers To recommend SAP to other customers, and that is derived from a customer survey which we conduct every year. This parameter uses a scale from minus 100 to plus 100 as to whether a customer is loyal to us And how high the probability is that this customer will recommend SAP to friends or colleagues. Now how do you obtain that Score, it's the difference of the percentages of those who are in favor of SAP or criticize SAP.
So those clients whose probability of recommendation is 9 or 10, which means they've got a very Positive sentiment for SAP. So these are the promoters. And from their percentage, we deduct the percentage of those customers, Which give us a rating between 0 to 6, which would be the critics. And that difference is the net promoter score, which has increased from 12.1% to 19 0.1% last year, which means the number of customers who have are willing to recommend us to others has increased. Then you asked Why the €8,000,000,000 for Concur do make sense now and why the €50,000,000,000 for sales force would not make sense?
Now SAP has always applied a strategy to purchase companies to round off our solution portfolio and which allow us to Make an even more comprehensive offer to our clients. And Concur is definitely a case The Travel and Expense Management, we are thus entering one key area of expense management for our customers, Which we are going to enhance within a business network model. So for us, this is A growth area for the future where we feel that very strong synergistic effects with SAP can be achieved. And by taking over sales force, we will just consolidate the past. We believe that the future in customer relation management is omnichannel management, for example, through hybrids because Here, through all customer contact channels, we are offering 1 uniform solution for Monitoring the customer behavior and customer relationship management.
And for that reason, Quite apart from the fact that the current sales force valuation is just crazy and would not Any takeover. But apart from that, we are not interested in sales force at all because we've got solutions available, which in our view are superior In the potential for the future. Then there was another question about HANA. We've got 6,000 400 customers and 370 S4 customers. And you want to you asked for putting this into a broader perspective, whether this is a lot or not.
Certainly, there's a potential for further growth, but we're growing quickly. The customer adoption rate of HANA is the most rapid one which I have ever seen for any SAP solution. With HANA, Every year, we are doubling our customer base. And with S4HANA, within just 2 months, we've been able To win more than 370 customers, so that means for many years to come, we will see a strong growth emerging. And of course, we've got to work hard to really tap that potential.
Then there was a question whether we've got an exclusive contract with the German national Soccer team or whether other national teams can also benefit from our support? No, we do not have a contract of exclusiveness with The German Soccer Association, the German Soccer Association, DFB, is so called co innovation partner. For example, FC Bayern Munchen is using corresponding software solutions as well, and we develop software solutions for the sports industry in general. And this was the last One of the questions that was addressed to me. And yes, we've got another request for the floor.
It is Mr. Gerhard Grass.
I'm Gerhard Haas. I'm speaking on my own behalf. And something I would like to direct to Mr. McDermott as a suggestion. Maybe next year, it would be nice if we could hear your presentation Not translated by an interpreter, but maybe in German from you.
Now last 1 year is means 365 days, so when you learn one word a day, maybe with 360 Five words of German, you might even be able to give your presentation. Wouldn't that be nice? And my second question, I heard a lot about HANA and things like that. Something I did not hear is something that the industry As it concerns the industry, Industry 4 0, which is one of the buzzwords in Germany, is SAP In this respect and what is SAP doing either in its own right or via other companies because This is a very future oriented area. It's going to be key for the future.
Thank you very much for your attention. Thank you very much. I'm sure we're going to get an answer on that one.
Could you please explain your competitive environment and how do you compare to Oracle? Let me start with our position in the cloud market. SAP's cloud business is growing twice as fast As the market, so therefore, SAP is gaining significant share. How can you validate that? Well, we reported a revenue increase of 40 5% in 2014.
If you look at what IDC and Gartner both report, they both report We continue to have the 2nd largest share in the enterprise cloud applications market after salesforce.com based on the latest quarter. We believe for your benefit, dear shareholders, it's also important to look at our market position per category. In the business network category, we're the clear market leader. Next to a rebur, there are only small providers. The same holds true in the case of Fieldglass and Concur.
When you think about the line of business, Management or personnel management cloud, we are still number 1 in this market. Competition is strong, particularly in the United States From Workday, but we are extremely well positioned outside of North America and continue to profit From our strong international presence. In Customer Relationship Management, Luca talked about This omnichannelecommerce, so let me just give you a little color on this. Salesforce.com makes most of its money on something called salesforce automation. And while it is an important thing to track pipelines and forecasts for the sales department, the CEO actually wants to connect with the consumer on the device In any channel and conduct an e commerce transaction and only HANA and the combination of SAP Cloud for HANA and Hybris can do this.
So we believe that we are the future and they are the past, and we intend to prove that with everything we have. On the database market, we are the fastest growing database company in the world And we are ranked 4 among the top 10 database vendors. But as Luca said, we believe we have the invention of this generation with HANA, We intend to exploit that on a global basis with everything we have.
Good. Danmarichmar Weiter. All right. So I could continue. We have now arrived at the questions of Ms.
Jelle Bennett Heinegger. You asked about the goodwill of the Concur Acquisition and how we distribute this on the company parts, the answer is easy. The result in goodwill of €5,500,000,000 As of December 31, 2014, was fully assigned to our new SAP Business Networks segment. And is then going to be monitored there. You also asked About the Concur acquisition and possible process risks or whether that was clarified during the due diligence.
Answer, of course, we carried out the normal due diligence process in the acquisition of Hanko and we did not find any legal risks. You asked about our plans to go public in Shanghai. This was addressed or mentioned a few years ago. We are in a constant exchange with the China Securities Regulatory Commission. Last year, I was there and I to find out basically what the planning regarding enabling Foreign companies to be listed on that stock exchange.
However, we do not yet see The possibility there as a result of a legal framework, we're going to monitor the situation certainly and follow it up. But At the moment, because of the unclear framework and going public there is not yet a current topic. The next point was restructuring the company means that you're also making demands on your headcount. And How long will it take until things have calmed down in HR? Answer, We are a growth company.
And at the end of this year, we are planning to have more headcount than we had at the beginning of the year. But it's also true that a company in our industry, which feels that it does not which feels that it does not need to change with the time does not stand a chance of survival. Our transformation to a cloud company has progressed well. In 2015, we still have a little ways to go until we achieve our goals. However, and you can see this also in the revenue planning by 2018, our cloud business is going to be larger than our Software business, which means as a consequence that then at the latest we also a little earlier probably, We need to be organized in terms of our organizational structure regarding organizational priorities and things like that To be able to handle and manage that growth.
So for this reason, we see very clearly that we have already That will have already covered the largest distance at the end of this year. But in 2016, there might be some more expenses Associated with the change. But after that, we'll be on track and ready and poised to achieve our goals In the cloud and for the year 2020. You then asked whether the acquisitions In recent years, were they worth it? How many profitability have we added?
Or did we just buy potential for the future? Answer, in fiscal 2014, our gross margin was 64.3% for the cloud. But again, these are very different business models, which make up this overall gross margin as Bill did explain The public cloud, the private cloud and business networks and our acquired companies are mostly in the area Partner of the public cloud and business networks where, of course, our long term gross margin potential is at least going to be 80% as we see it. And the gross margin even with Ariba Fieldglass and Concur is actually clearly higher than our Overall gross margin. So you can see already that these are fast scaling Operational companies which are operating efficiently already and we are especially When you look from 2018 onwards, when we overtake our software business, our recurring revenue It's going to be so high, not just in year 1, but actually the yearly revenues, which Come back every year will get us into a position that profitability will be more than proportionate.
This is the so called hockey stick Fact which some of the speakers referred to and we believe firmly that that is going to materialize. How about the profitability of Concur? Before the acquisition, Concur had an operating margin of about 10%. So it was it had The revenue growth of Concur, we believe we will be able to increase that because of the Cross selling potential and our greater geographical spread and coverage, we believe that we'll be able to Roll out into more countries with the cloud we have. And again, in the long run, we believe that the Gross margin will be at least 80%.
I mentioned synergy effects That we can expect how much is attributable to cross selling and how many customers did we acquire. Worldwide, Concur has more than 20,000 customers 25,000,000 users. They are moving in a market that is growing fast. Travel and travel cost management software market has volume of $22,000,000 And in that market, as Bill stated, Concur is clearly a market leader for the operation of such Market offer such travel accounting software. We believe that we have some synergy potential in revenue.
The business case is not as you have in other cases to trim down The acquired company, we will use synergy potentials and make additional capital expenditure to support growth and scaling. The cross selling potentials are, of course, on both sides. As I said, now we have a large customer base. And in the many countries where Concur wasn't active, We can open that up to Concur. On the other hand, companies can be reached As customers for our software, if they were Concur customers, so there is a cross selling potential in both directions.
Now those were the points that I've had. Bill, do you want to carry on?
I will continue with the question. Is salesforce.com The largest cloud company as the company pretends or perhaps it is even after the Concur acquisition. As I earlier mentioned, SAP's cloud business is growing twice as fast as the market, 45% growth versus the market growth of 22%. So we are gaining share. And we have the 2nd largest share in the enterprise cloud applications market after salesforce.com based on the latest quarter.
In March 2012, you already knocked on Concur's door. How much would you have had to pay in 2012 Concur, please explain why the acquisition did not take place in 2012 when the purchase price was lower. It was a difficult decision back then because we were also in discussions with Ariba at the same time, and we did not want to Acquire both companies at the same time, as we did not want to be overzealous and outdo ourselves. Remember, we also acquired SuccessFactors shortly before that. So acquiring Concur back then, we would have to integrate 3 large companies more or less at the same time.
However, I can tell you those discussions were very important in building the Trust and harmony with Steve Singh and his colleagues. So later on, we were able To perform the acquisition and do so at a spread that was no worse than it would have been back in 2012, I know because I Enjoyed those conversations with Steve, and we feel very blessed that he's on our team. And Concur has really added to our cloud portfolio. Next question. Is it true that the National Security Services are interested in S4HANA, including the NSA?
And how much revenue are you making from these national security services? Our SAP HANA customer base already includes several contracts with government authorities in many countries around the world. And this does include security organizations, which as we with every customer supply in accordance With applicable export laws and all necessary regulatory and other approvals. And please understand For legal reasons and in SAP shareholder best interests, we generally do not release any information about our customer relationships unless We're expressly approved to do so. We have commented on this topic in the past and there are no backdoors to SAP Technology Be happy to, Aso.
So the topic is the cloud business continuing on. I would like to know more precisely how this business is going. How much business do you do in the cloud with
installed base and with new customers?
I've heard that you only SAP today has over 292,000 enterprise customers. In our traditional software business, it is indeed correct 90% of our order entry comes from existing customers and 10% from new. This is a good indicator of high customer loyalty Our customers are continuing to expand their existing SAP product portfolios. In the cloud business, we're strengthening our synergies in Sales to sell our broad portfolio of cloud to all customers accordingly. And in addition, we aim to attract new With our hybrid product offering and we are getting many more than 10% in the cloud, it's much Closer to more than a third new.
Since 2000 and 7, let's see. We paid an overall amount of US139 million dollars in costs for Attorneys, damage experts and other consultants to settle the Tomorrow Now litigation. Further, SAP had agreed to pay Oracle an amount of USD120 1,000,000 for attorney fees, expenses and investigative costs. For the Versata litigation, SAP paid costs for lawyers, consultants and experts in the overall amount of 52,000,000 And I did not introduce that with your question, but the question was how much are you spending or did you spend on these matters? And now over to you, Luca.
Well, thank you. So I will carry on with 3 more questions. Ms. Benner Heinehorn. First of all, about the 20 20 targets.
Are you serious? Yes, we are serious, of course, because if you think how What the targets are, we have to grow by 2020. We have new growth potential as a result of HANA S4HANA and also, of course, the scaling of Concur, which was not part of the results Last year reported last year, but we are very optimistic and we are very serious about achieving our goals. And then you had a question about the digestion Process and how long that is going to take after the most recent takeover? And when we can Expect the acquired companies to be fully integrated in the company and when they'll be profitable.
Now this is something we have already made very clear statements about On the part of the Board and we believe that with the acquisitions, we have rounded off our portfolio And all important future oriented categories, which our customers require for end to end solution portfolios are part of our portfolio now. We Have an offering which is now larger in the public cloud. We have Established the business network and for the time being, we do not see any necessities for major investments. Thinking about niche Companies or minor investments, of course, that is not illegal, but we do not see any requirements or necessities For major acquisitions, we are now focusing on very simple things. First of all, the leverage Our SAP should be reduced.
We've always been a very conservative comment. And if maybe when you've seen our quarterly report, you can see that during the Q1, we have already made progress there. Our net liquidity was minus in excess of €7,000,000,000 at the end of 2014. Now we are already at minus €5,000,000,000 almost and we will continue that path. We will base our strategy on organic innovation.
And as an aside or an additional note, we will also Take care that we will, of course, have our shareholders participate in our business success because We want to achieve a positive continuous development of the dividend payments. Then you asked about the top line and bottom line in China and what our road map is for China. Yes, it is true that we have invested intensely in China Take interrupting the strategy Discontinuing investments also because of short term political or legal requirements. And in a culture Like China, it's important to be present and to win customers who win the trust of people, which is a more long term thing. I think our investment in China has already paid off According to the IDC Industry Analysis Service, we are leading for Business Solutions SAP China is already the 5th largest SAP national company despite the fact that in the past 2 years the political Situation, the corruption campaigns anti corruption campaigns of the government were not easy.
Please understand that we cannot give you any revenue figure for China or any other individual countries. However, it is important to say what the future potential is. We see a lot of potential Since China is globalizing, more and more companies are moving beyond the borders of China. And either by Acquisitions or other developments, they are opening up new markets. This is happening not only in Asia, it's also happening in America and Europe.
Companies would have to do this or want to do this Need a software which can handle this and which will enable them to run-in different country versions In conformity with the regulations that exist in the different countries, this is something Chinese software cannot do And this is a big opportunity for SAP when it's present in the market to help customers in their internationalization efforts. In addition to that, in China, The subject of Manufacturing Industries or the Internet of Things is an important subject as well. And we are doing quite well here at SAP because what do you need to achieve an Industry 4.0 solution? You need industry process know how. We've always had that at SAP.
This is how we became world market leader For business software, you need a big data solution with which you can retrieve information from sensors and production processes and Analyze that information. We have that with S4HANA and SAP HANA. And of course, you need the right solutions in place To support mobile scenarios, which is where we are also market leaders, so in that respect, especially given The orientation of China towards Industry 4.0, we're in an excellent position. In our SAP Labs in China, we've also done a lot of investing. And with that, SAP Labs, China is our 3rd largest R and D location in the world.
So we All right. Then I'll take the next one with questions by Sabine Oberkampfink.
Have you made sure for future selection processes that you have the right candidates in every phase? This relates to the Supervisory Board. The next ordinary election is due in 2019 for the Supervisory Board. By then, at the latest, the 30% ratio needs to be complied with. Right now, we only have one female member on the capital side, that is Ms.
Feldman. And we are already Trying our best to find qualified and suitable female candidates so that we can make The adequate proposals for the election in 2019 or even before that, if somebody chose To leave the Supervisory Board, as you just heard, we have managed to find a successor to Hartmut Midon for the Supervisory Board. Question, how the members selected for the Executive Board? How do you make That there are suitable candidates, female candidates in every phase. The members of the Executive Board are appointed by the Supervisory Board.
Accordingly, the selection process is in the hands of the Supervisory Board, in particular, the General Committee and HR Committee. We make sure that in appointing a new member of the Executive Board, we also Consider suitable female candidates in the selection process. In succession planning, we always make sure that there are Suitable and qualified female candidates in on our shortlist of candidates. What counts, however, is The skills and qualifications of the candidate in question. We could read in the Annual report that it is your target that there is going to be an internal and external candidate search When appointing somebody to the Executive Board with a share of 50% of women on the shortlist, Unfortunately, there is still no woman on the Executive Board.
What is the target of your company with a view to the share of women on the Executive Board in the next 3 to 5 years? Answer, it is correct that currently there is no woman on the Executive Board of SAP SE. With a view to the new law on the equal participation of women and men in management positions in the private economy And Public Service, the Supervisory Board decided to increase the share of women on the Executive Board and to appoint a woman the Executive Board by the 30th June 2017, is there a publicly available requirements profile For members of the Supervisory Board, the general job profile for members of the Supervisory Board can be found In the report, the corporate governance report and the composition stated there, And we are going to consider the new legally stipulated women's ratio of 30% for the next election. Right. I would continue with some more questions by Ms.
Uwe Kemping. First of all, how many women work in your company? 23,055 by the end of 2014, this equals a share of 31%. You stated a figure of 21.3 percent of management position. The latest figure I'm aware of from Germany is lower, only 15% according to the status Report 2030, what is the current value in Germany?
In Germany, the number is 15.9% For Women in Management positions, that's 30th March 2015. Then a woman a question About measurable goals being stipulated to make sure that talented female employees can tap their full potential in the company, Who is responsible for the result? Is there a reporting chain from the Executive Board to the Supervisory Board? Of course, The targets vary according to the different programs and the evaluation makes it possible to adjust targets As we go in order to make sure that the most talented female employees can tap their full potential in order to identify I promote future women in management positions. SAP organization as a whole is responsible.
And of course, also our HR department by developing suitable promotional programs. And of course, also the Executive Board because this responsibility cannot be delegated. The People and Organization Committee on the Supervisory Board is responsible, reporting or getting reports from the Executive Board at a regular basis. Then what do you do In order to increase the share of women in management position, well, we have information events and virtual events, Coffee corner sessions, live sessions and executive leadership for women executive leadership forum events In order to address employees directly and personally and in addition, there is a regular Change of information through internal communication platforms like SAP Jams. There is a number of managers who are active as mentors for female talents.
And I I'm active there as well. And we keep in contact with these talents and also try to establish models and report on them. Members of management are generally informed About offers on hand, according to the European CSR Directive, 201495 EU of 22nd October 2014, the management reports of companies of your size need to make statements about social and employee Matters, what is the current share percentage on absolute terms of women amongst the workforce of your company? The current Share of women in the company is at 28.8%, 5,334 As of the 30th April, have you looked into whether it is in your interest To have a higher share of women also with a view to customers, market and competitors, what concrete measures have you taken? Yes, we We have to rely on highly qualified management staff in order to stand the ground in competition.
And therefore, we look at all potential qualified people and use the potential of diversity. And we've heard more and more studies are showing that companies with higher share of women in management positions have better business results. For example, in the area of leadership coordination, innovation, performance, motivation, working environment and values. So it really pays off To have a high level of diversity, and that is true for SAP SE, our target is 25% of women in management positions by 2017, that's a clear signal. And as it has been mentioned, we have already taken a number of concrete measures order to achieve this target, for example, this year in the United States, as the first technology company, we're going to take part in what is called an Edge Certification, just a couple of words on that.
Edge is the currently valid Certification method for gender equality, it was Presented at the World Economic Forum 2011 in Davos, it stands for Economic Dividends for Gender Equality and is focused on business success. It looks at policies, activities and numbers across 5 different areas, equal pay for equal work, Personnel Acquisition and Promotion, Development and Mentoring of Executive Flexible Working Conditions and Corporate Culture. And there are other Activities that are addressed to women in particular, as I mentioned earlier, the Women Executive Leadership Forum, but also sponsoring and active involvement in staging the 1st conference for women, Women in Digital Business as part of CBIIT this year, just to give you two examples. In addition, We are active on career trade fairs like Women and Work. We participated in panel discussions and things like that.
It's
Martin Bullman. Question was, SAP has, for the first time, a digital officer. What is his background? First of all, he was our former Chief Marketing Officer of the company. He has a deep understanding of technology, the business acumen and an entrepreneurial That makes him the perfect fit to lead our crucial new business.
His name is Jonathan Becker, And he is now the 1st Digital Officer leading SAP Digital. And his charter is to lead a newly Discover, try, buy, implement, use and renew our solutions in a simple low touch For no touch online interaction, we believe SAP Digital is an enormous business It expands our addressable market into new areas such as content and data. Think about that in combination with HANA and S Hana, your imagination really starts to go. And Jonathan is not only responsible for building a new revenue stream for the company, He's also demonstrating that SAP is making RunSimple a reality for our customers and consumers That engage with us digitally, really an exciting move.
Well, then I've got a couple of more answers for Mr. Uhlmann, the first question was for me. Now being a CFO, are you not worried about a cash flow of €1,000,000,000 after €3,300,000,000 Well, you've got to bear in mind that in 2014, we had special effects, especially Evolving from litigation, which certainly are one off effects for Tomorrow Now in Versata, A total of €555,000,000 had to be paid, which of course impacted the free cash flow And which certainly is not going to be repeated in that manner. And if you deduct that, then we still have a very Strong cash flow, which allows us to certainly pay out the dividends and also pay back our financial Liabilities, I already mentioned this and told you that in the Q1 of 2015, we already made great progress in this respect. So I can still sleep very well at night if I look at our cash flow.
Is the Current increase of the dividend is going to be repeated in every year in the future. While we already commented on our dividend policy, Our dividend policy that is the minimum payout ratio was increased by 5 percentage points. So First, we believe that in the future, the shareholders will be involved in the corporate success in a sustainable manner with more than 35%. The actual result, of course, then still depends on the specific business performance. But you've seen that this year, Based upon the strong profit situation, we achieved a payout ratio of 40%, and we are definitely committed to a sustainable development dividend in the years to come as well.
Dividend payout, of course, is only one way of using the retained earnings. Of course, on the other hand, we have We continue to invest in the expansion of our business, which is then going to pay out in the long run. But I think We've been able to find a solid balance in the past and we'll also be able to do so in the future. Then what's the question about the 6,400 HANA customers and the 2,000 Startups. Now here the question is whether is that on a cumulative basis for HANA Or are the 2,000 start ups coming on top of that, which would make it 8,400 HANA customers?
The number of customers and start ups are to be viewed separately. The startups are companies which develop their own applications on the basis of HANA. And thus, of course, they support The market propagation of HANA because their end customers will then use technologies which are HANA enabled. And depending on the Performance and the success of the start ups, this can also have positive effects for SAP in the long run. Then there was a question about expected profits, €5,600,000,000 to €5,900,000,000 This is are we going to stick to the lower range?
Or do you believe we could see the profit ending up at the other end of the range? Well, we would not release a certain range If we did not believe that both the limits of that range could occur, Now you've got to bear in mind that we made some good progress in the further development of our cloud business. It now represents A relatively large share of our overall business and the development of our net income, of course, to a certain extent also depends on Our revenue development in the cloud business and the traditional business, which of course is Based upon our customer behavioral pattern, I mean, of course, there are some further imponderables, for example, the further development In the emerging markets, compared to the mature markets, both of which act at different profitabilities, of course, In the less mature markets, we still have to invest a bit more and that's why profitability is a bit lower in that region. And then of course, we also We need to see how much progress we're making with the internal reorganization in order to streamline the company internally for If at all, we rather want to exceed it rather than undercut it.
Now a margin was announced to us in 2014. Today, a margin of 35% for 2020 is announced to us. Why has the old forecast just been Swiped away and what is the justification for it? Now at SAP, we deliberately decided this year To focus on the operating margin, And we decided to move away from it actually and focus on the development of the absolute net income. Why is that so important?
Because otherwise, we would set False intent incentives to discriminate against certain businesses, although they've got a good potential for profitability. The more new business we generate in the cloud in the short term is relative ratio to the traditional business. Well, that would have A short term dampening effect on our margin, but on the other hand, in absolute terms, you're already making money in our cloud business. So It would not make sense to artificially slow down the Cloud business in order to optimize margins in the short run. In the past, that was a bit different because the proportions between the two business models were somewhat different.
But now we can say that the cloud business We'll probably reach the same level of revenues as that of the traditional ones in 2018 or even exceeded. And we see a tremendous Potential for further revenues to be generated in the cloud, and that's why we now establish profitability goals for each single business, But we deliberately do not add them up anymore, but we leave it up to the market to decide. The revenues In the cloud business, are they easier and better to predict? If so, then you should be able to give us the discounted cash value and we should be able To simply calculate the parcel value of the goodwill based upon the future revenues, Well, it's not only our cloud revenues which contribute a higher share to a higher predictable revenues. Today already we generate 53% of our total revenues from maintenance in the traditional license business, contracts with customers conclude in order to maintain The list licenses they have purchased and this share continues to increase with every new license sold in the on premise business.
In addition today, our cloud subscription and support revenues already account for 6% of our overall revenues. As in the cloud business, Contracts are usually concluded for a term of 3 years and these are then paid out on a pro rata share. We can also properly plan for these revenues. And in the fiscal year 14, already 59% of our total revenues were subject to precise planning. By expanding our cloud business into 3 business areas, public cloud, Business Network and Private Cloud, we will increase the share of the cloud subscription revenues, although each of these three areas is subject to different prices.
And by 2020, we that the share of planable sales will amount to 70% to 75%. For stock exchange valuation of Technology companies, the share of planable sales that is revenues, maintenance and cloud And therefore, this kind of approach is an important one which analysts are also focusing. Now revenues In Asia, why are revenues in Asia so low? Do they do not need SAP in Asia? Well, in 20 14%, we generated 15% of our total revenues in the APJ region.
So that is the emerging region for the future and offers potential for growth in traditional license business as well as in the cloud. Of course, here we're coming from a smaller base Then in the United States, but on the other hand here, we also are experiencing very high growth rates. That's why we've been investing in China for a couple of years Our joint venture, China Datacom, and we've already been very successful in this regard. Now you said that you're holding comprehensive Financing tools, and you wanted me to comment on this in 3 sentences. Now I've got to make sure and count whether it's really 3.
Well, we are not a financial institute, but a software company, which has got this financial aspect only as a side effect. Yes. The SAP Group uses derivatives only for hedging of operating risk, for example, against Change rate fluctuations. The basis for the use of a financial instrument must always be an operating base business and speculation is Excluded through our global treasury directive. So we are not a financial institute, but we only hedge The standard financial risks with the help of financial tools on the basis of defined hedging strategies.
Now you talked about the goodwill as well, Intangible assets. And while we call them intangibles of €25,000,000,000 Which means the equity is smaller than the goodwill. Shouldn't you try to find a way to have goodwill and non tangibles a bit smaller In order to remove this as expenses from this item, well, that would not be very nice because this would mean that we would have an Extraordinary goodwill write down, and this would not be ideal because According to the IFRS principles, a standard write down of the goodwill is not permitted, so we cannot implement it. Of course, However, we continuously identify our goodwill with regard To a requested write down, but currently, we have not seen any need for performing This impairment and of course, as long as there are no risks involved in that, we will continue along these lines. Our intangible assets are written down as planned over the expected Period of use of from 2 to 20 years and the intangible assets, of course, are also subject To a regular impairment test.
Now there was a further question on incur. I've got doubt that the financial administration would be pleased About a handwritten receipt being used in bookkeeping and accounting, what do you think about this? Well, indeed, The use of receipt for tax purposes is certain to certain tax regulations. For example, the principle of orderly bookkeeping or corresponding value added tax Requirements, of course, they differ in each country. However, rest assured that the requirements of the financial administration, of course, We'll also adapt to the latest technological opportunities.
For example, you can already file your tax return in electronic We are via the ELSA program in Germany, and that's why receipts are also accepted in an electronic version If the basic requirements are complied with by the taxpayer and we've seen in the video that this is certainly being done. Now the authorized capital, according to Item 6, you need new money. Now do you need this new money for further acquisitions? Well, the answer certainly is no. Item 6 is a normal contingency resolution, Which gives us as a company an important financial flexibility, resolutions of this kind have also been taken in the past without As having used them to fund our takeovers, from today's point of view, we do not have any specific plans to use this authorized capital To fund further takeovers.
And now the last question. Can the cloud also connect men and machines? So is this also the good basis for men machine Connections or is that limited? Well, now it's up to me as the finance guy to answer that question. I'll try.
Well, the Internet of Things is the basic Prerequisite for industry specific scenarios and innovations in the digital economy. It generates so called Pfizer Cyber Physical Systems, that is the connection of the digital and physical world, thus enabling new products and services and even new business models. Thus, the Internet of Things certainly has got the potential to significantly increase the response rate of companies to revolutionize The customer experience and to open up new business opportunities and models. SAP customers who have already implemented solutions for the Internet of Things have been able to increase the utilization ratio of their equipment, increase the efficiency of the business Process and lower their operating expenditures. Now one specific example, the motorbike manufacturer Harley Davidson, for example, By implement by using SAP has built a motorcycle factory from scratch with more flexible and intelligent production processes.
Thus, the manufacturing throughput time of a customer specific motorcycle has been reduced from 21 days to 6 hours. We're already offering numerous solutions for the Internet of Things. Some of them I've already mentioned before. They're all based upon the SAP HANA Cloud Platform, The central platform for application development and services. Using this platform, information from sensor data can be collected in real It also supports extended functions such as in memory computing, the evaluation of geo and cinematics data, predictive analysis as well as the processing of Complex events.
Furthermore, SAP HANA Cloud Platform also opens open interfaces for application programming APIs, Which third party providers can use in order to develop applications for the Internet of Things. However, I think we as humans, we will not Cease to exist that we will still be able to use the advantages of the Internet of Things without fully disappearing in that Internet of Things. Well, then there are a few questions by Ms. Sabine over Kemping. Do you have the women in your team which would be suitable for a position on the Executive Board and the Supervisory Board?
Well, we certainly do have female talents in our workforce, which basically could be candidates for positions on the Executive Board and the Supervisory Board. However, At the end of the day, the qualification and the experience of candidates will have more or higher weight than the specific gender. Then there's the second part of the question, which I did not understand. Typically speaking, Employees representing employees are not appointed to the Supervisory Board. According to the German law, a binding target And a public report will be mandatory about how this target has been achieved.
What is your specific target? And which What actions are you going to implement in order to achieve that goal? That applies to the Executive Board. As I've told you before, the Supervisory Board Has resolved to increase the share of women on the Executive Board. And by the 30th June 17, we want to appoint a woman to the Executive Board.
Various actions taken in this regard will support our general goal of increasing The share of women in management positions in our company and this also applies to the executive board. It starts with the recruiting process where we've got a clear requirement For men and women making the shortlist, then we've got specific management programs and a clearly defined success and planning concept with at least 1 female candidate. And with all of these programs, women are specifically supported in their personal development for the next management level. For that purpose, for example, we've got so called fast track programs, special trainings and also sponsorships. Bill already mentioned that.
Women are today already holding various high ranking positions within the group also in essential operating areas. For example, Helen Arnold as CIO and Chief Process Office and the Global Managing Board Maggie Shen Jones as the Chief Marketing Officer Adaire Fox Martin and Jen Morgan as the Regional Presidents For APJ and North America, to mention just a few of them. Externally speaking, SAP underlines It targets by participating in the C Works initiative, a partnership with the World Bank, and I told you We also support the Edge Certification in the United States. Then there was another question by Peter Schubert. Well, I've already answered that.
That was about design thinking. So that really contributed significantly to software development At SAP and especially within the co innovation projects together with our customers, and that is something which is now being applied all over the world. Well, and then I'm coming back again with a few more questions by Ms. Overkamping. On the one hand, how many women and how many men Well, last year promoted to the 1st and to the 2nd management level underneath the Executive Board.
Please give us the percentages and also the absolute numbers For the first and for the second level, last year, globally speaking, 1 woman and 4 men were promoted to 1st management level, which in percent Translates into 20% women and 80% men. For the 2nd management level, 10 women and 20 2 men were promoted to that level on a global scale, which translates into 31.3% of women and 68.8% of men. How many women are working in your company all in all or on the 2 management levels below the Executive Board? Please Give us the absolute and relative figures for both levels and how many women are working. In the middle management, also Again, absolute numbers and percentages.
On the first two management levels underneath the executive board situation is as By the end of fiscal year 2014, 1st, management level 3 women in Germany, that is 30% of the executives on this level. On a global scale, it's 7 women, that translates into 25.9 percent. On the 2nd management level in Germany, 10 women, which is equivalent 13.3 percent on a global scale, it's 34 women, which translates into 17.3% in middle management. The situation is as follows. Of women in Germany is 28 women, that is 7.9%.
Globally speaking, it's 252 women, which translates into 15.4%. How do you support future women in management positions? And how do you identify Future Women in Management positions. Well, I've told you before that men and women have to be on the shortlist. And for example, in succession planning, there must be at least 1 female candidate.
Fast Track and sponsoring programs are used to identify candidates We have got a special potential for the next management level. And apart from that, we also offer mentoring as and as supporting actions. Internal and external communications ensure that the objectives for more women in management positions is more than just paying lip service, But that is systematically implemented by defined programs and processes. Next and also last question. How do you support and promote the development of female talents in executive and management functions?
Do you have further activities going beyond coaching? Yes. Further development of executives plays a central role, and we've got more programs in addition to coaching, for example, the leadership Excellence acceleration program, 360 degrees evaluation and the lead of principal assessment, which is central role based Development plan for each management level as well as programs to strengthen a culture of trust. And this brings me to a Few questions by Mr. Schubert.
I have one question from Hans, Martin Bowman. Where is the difference between private and public cloud? Do we earn the same money? Or are the differences in the way we earn money? We have a traditional public cloud business mainly around success factors, Our own developed cloud assets by Cloud for Sales and the other solutions that we have organically developed.
This is a classical subscription based SaaS model. Basically, with typically a 3 year term and with annual billing, So you also generate pretty high deferred revenue balances, Very comparable with public cloud vendors like salesforce.com or Workday. We see the potential to go to at least around 80% growth margin in this business. The Private Cloud business, our Private Cloud business is known under Lahana Enterprise Cloud HEC term, if you take a look at it in isolation, you would just look at the Infrastructure as a Service, And for SAP to onboard and migrate these differentiated solutions to our cloud landscape. Typically, here, you take 5 to 6 months to get live With a customer and be able to recognize revenue, We're in the public cloud.
It's often a matter of only a few days. It also results in more Upfront investments that we have to build for data center coverage And for data security. But you cannot see this business in isolation since we are driving it To really support our large customers' transition to both HANA as well as Cloud Environments. It's a fast growing business. We have invested a lot, especially in 2014.
Now we scale this business also via partners, and we definitely will look for further standardization for in this model to not make it a 1 on 1 implementation paradigm, but really make it more efficient model
And there was a question from Peter Schubert and that was about IT Systems for the automotive industry, specifically what is FIP doing To generate revenue in this area internationally, that is.
The automotive industry is one of the most important industries for SAP, which have been supported by SAP for a long time. And there are a number of new projects based on The HANA platform with the different OEMs, let me just give you the example of Porsche, where We have newly defined a concept for lean manufacturing in a highly sophisticated new plant. Porsche Is using our automotive solution in order to increase efficiencies based on The Hanna platform, together with our automotive customers, we are pushing the vision of a networked vehicle. At recent Trade fairs like Seabed, Nova Fair, we presented a concept which we Initiated with Volkswagen and with BMW, we do research projects Enabling flexible infrastructure for comprehensive mobility services based on HANA as well and just in time direct Material being transported to the manufacturing plant is something that has clearly characterized the new manufacturing processes. And we're just Now looking into how to make this for more efficient and lean together with BMW.
A question
by Mr. Buhlmann, which I will take on because I feel responsible in a way Because S4HANA development was triggered 8 years ago, Just off the record that is the ID came first to redesign Enterprise Systems. And one implication from that was that we needed a new database system. So the idea of developing HANA was born Based on the requirement of a new enterprise system, so now we have this new enterprise system. As for Hane, Mr.
Bullman, A new generation based on a new database, which is much faster, But I would like to give you the major advantages. The data footprint, that is The data we finally have on our hard disks and have to store there can be reduced to oneten of the previous scope. 2nd advantage, transactional processing and data analysis Can be done in a single system OLTP and OLAP can thus be Coming together, which gives us extreme advantages in operation, so you don't have to wait for data to be Transmitted to another system in order to do data analysis. Data analysis can take place during the transaction. It can be part Of the transaction, which means that transactions can be run-in a much more intelligent way.
And that means Bill has given you an example of that. Looking at a special situation and processing And actions accordingly at the cash desk, for example, looking at the purchasing behavior of people, Considering the situation in a shop and the history of buying of a certain No matter where this person bought their products, we do this for Burberry, for example. And we make it possible to have much faster insight into the data of the company by having the boardroom of the future. It's not going to take days weeks of spreadsheet accounting and reporting To be presented to the Executive Board and then the Supervisory Board, instead, the Boardroom of the future Makes it possible to have live access to data because we have So extremely fast response times that we can have a P and L in SAP within just a matter of 3 seconds. Major new applications, your question was about that as well, Relate to planning, the use of planning in order to do predictive analytics that is while The business is ongoing while the reporting period is still ongoing, making forecasts, including the end of the Period.
And wherever we can use mathematics to much greater extent than in the past, the new system is particularly And this leads to an improvement of service functions, while at the same time, there is a simplification And lowering of overall costs. Then there was a misunderstanding on whose part, I don't know. The fact that the data can be aggregated so quickly made it possible to say goodbye to A construct that had an impact on our business for 40 years or was part of our business That is in transactional processing, we tried to have results, whatever I'm referring to here, be it Sales, be it P and L, be it the balance sheet, to be Process ongoing and that's no longer the case. There's no more redundancy, Only transactional data that's being recorded and all evaluations will be done By just going through all the transactional data as was the case 40 years ago with Hollrichart. Now all redundant data were eliminated.
It's a dramatic simplification of our data model, which on the other hand means Well, first of all, we can reduce our footprint. And on the other hand, we're able to have New applications develop at very high speed. Now I mentioned the fact that Hana Had eliminated all the program code. Well, the program code was eliminated and that only It refers to that program code that was necessary for maintaining the redundant data. And for 40 years, SAP lived with this process and procedure.
Most customers are still using The same process for SAP or S4HANA customers no longer do. They have a new system now. And maybe Mr. McDermott could speak German next year by learning one word every day. With one comment, well, he was praised for a very nice presentation, but 3 65 words, I'm afraid, will not be enough for Bill to give a presentation like that.
At 365 words, we would have to go back to a level that all other ladies and gentlemen here would not Appreciate. I would suggest we have interpretation next year as well.
And I
think we found the right Rhythm as well as far as speed was concerned so that translators could follow. So I think this was very positive indeed. But there are further questions to be answered. Yes, but we're coming closer to the end. Question by Mr.
Bulman on Tomorrow Now. We paid £273,000,000 Can we now close a lid Of concrete on that or will there be things to follow? Well, we can close it with a lid of concrete. Nothing will follow for tomorrow now, I can assure you. Question of whether there are going to be further possible legal actions.
While we can't preclude that from happening, Especially in the United States, the largest foreign market of ours, and there is a higher tendency Towards patent action there, currently, we do not see any major threat of risk We would have identified and of course, we're very happy that the chapter with tomorrow now has now been closed. There was a question on Ariba. Is SAP an Ariba customer? Yes. We're happy and proud that our purchasing Organization, after the acquisition of Ariba, went to on to use Ariba in catalog software and also in Auctioning Software and the business network as well to connect our strategic suppliers in an automated form.
By using the solution, we were able to gain efficiencies in operations like, for example, invoicing And order processing, and these are processes that are almost automated at 100% right now, which means for our shared service organization in the backbone of accounts payable, everybody Benefited from that and we're a clear reference case, of course, and customers look at us to learn about that to the point that our Chief Procurement Officer We decided to use Ariba on the operations side or rather wanted to support Ariba on the operations side. And You joined Ariba for that matter, so it's a very successful result at any rate. Then a question, Are the different networks going to be networks amongst themselves? This question has already been answered. In the speech by Bill McDermott, Yes, taken together in an area which Steve Singh is responsible for, but we want to take this one step further.
We want to tap potential And synergies at technical level as well by looking at master data, for example, so that one user or field class We'll have we'll not have to maintain the different data in the three systems in parallel. Of course, we're looking To tap Synergies here as well, but it's also important to see that in the future, this is more of a federation of networks really than A complete integration because every one of these networks has its particular benefit, which we need to expand. Then there was a question about the 1,000,000,000 users by 2015. How many of those have you won already? Well, we have to clearly state that this is 1st and foremost a vision.
It's not so much a concrete target. Because in the end, this is all about Massively distributing our software amongst different groups of users, end users as well. So if Our software is used in the sports industry, for example, to make it possible for fans of the NBA, NFL and other federations To make analytical data available to them that they can retrieve through their portals, then of course, it's difficult for us At any rate, I think we managed to get closer to the end users. We managed to move away from the professional area to a more consumer Oriented area, I think we've made headway there. Just look at our cloud solutions, for example, 80,000,000 users All of our cloud solutions, which makes us the company with the most users Amongst our competitors and of course, we're happy that we have made such good progress.
But again, the 1,000,000,000 users, that was a vision which was to Exemplify the fact that we wanted to become more relevant for wider target groups outside the classical company.
One more question here from Frau Jellebena Heinehagen. How is the joint venture With China Telecom coming along. A joint venture named China Datacom With China Telecom's, China Com Services is extremely important for SAP When it comes to entering the Chinese market, the joint venture enables us to use the telecom licenses for our joint venture partner so that we can offer cloud services to the Chinese market. We offer cloud applications for human resources, For instance, from China Telecom's data centers in China, for long term success, you first need to build up the quality, which we succeeded in doing with the parent company as the first customer. Based on our good local relationships, We now aim to acquire new customers gradually and are confident that these endeavors will lead to further success in the long term.
Do we have any other requests for the floor? I have no more requests to speak on my list. Well, thank you very much again for giving me the opportunity to ask my question A little better. I know that there is Business One and Business By Design for the well, I said a rhetorical question, 1,000,000,000 users In inverted commerce, but after I saw Concur, What is really a flexible approach, say, Accounting for little start ups or the cafe on the corner, a new And the second question, what is SAP doing in the area of traffic management? Because there you would have 1,000,000 users or 1,000,000,000 users globally, I know that SAP has been very active in the automotive industry.
And I can safely say that I've contributed to that. And I think Luca it was Luca who said that you want to get closer to the final user. Now this is where Google and Apple, they are interested in the end user and the end user applications. And this is We can generate revenue. And one more word about the very small companies, if they have something like an accounting app, Which they pay or for which service they pay in cent amounts.
Now I don't see SAP working on anything like that. Now this was the background of my question, and it was actually A bit
of a
rhetorical question. How far have you progressed with that 1,000,000,000 users? What I meant was how about the new piece of business and how Is SOP going to play there? So thank you very much. Well, thank you very much.
Business 1 starts with 1 user minimum And it's certainly usable in the application cases that you delineated. Now it is, of course, true that small companies very often We'll need more than a generic software. Often, special dedicated software solutions Are made for the requirements of a specific industry. But take a look at Business 1 and what it can offer you On the SAP Internet, we have almost 50,000 customers worldwide And they're not all Fortune 500 Companies. And again, Your remark regarding the Internet of Things and the That are going on in the automotive industry.
You made a remark to that effect. Now SAP is not driving an automated car, driverless car Around the world, but we are engaged in talks in Europe and in America what could be done With the Internet of Things, I state that there are no more requests to speak. Does anyone Still wish to speak. Is anyone else requesting the floor now? This is not the case.
I hereby declare that there are no more wishes to speak. Am I right in assuming that all questions from the floor have been answered? This means I says here I have to make a little pause. I have paused. And so this is not the case For the record, I declare that all questions from the floor have been answered.
I am now closing the discussion on all agenda items. I have already read the attendance count. I don't think that has changed. It had hardly changed the first time around. So with that, ladies and gentlemen, we come to the votes on the management proposals in respect of the items 2 to 7 of the agenda.
As last year, we will take all of the votes on the management proposals for the items 2 to 7 On the agenda at a single pass, I will first explain the voting procedure for the shareholders and proxies Who are present in the official meeting zone. And then I will explain the procedure for the people online. I will then provide some additional remarks. The vote here in the official meeting zone will use a multi item voting card, namely multi item voting card number 1, Which you will find near the front of your ballot card block. The voting results are determined using the subtraction Procedure in which only the no votes and abstentions are collected and counted.
In other words, you only have to submit The multi item voting card number 1, if you want to vote no to 1 or more of the management's proposals Or wish to abstain. The yes votes are then counted by subtracting the no votes And as tensions from the current attendance talent, multi item voting count 1 shows each item by number from item 2 through item Check the no or abstain box as appropriate By any item or sub item on which you wish to vote against or and against the management proposal Or to abstain. To vote yes To a management proposal, do not check either box for that item or sub item. If you wish to vote yes for all agenda items and sub items, you need not Hand in the multi item voting card number 1. So I think this is really a classic in German AGMs.
To check the boxes on your voting cards, please use the SAP pen that you were given in the foyer with your Block of voting cards. Should you use any other pen, the machine Voting cards Will only be collected here in the main room. All shareholders and proxies who are against 1 or more of proposals that are now before the meeting or who wish to abstain should come to the main hall To this auditorium, to vote, raise their hand when the vote is called and have multi item card 1 ready to put in a ballot box. I would like to expressly emphasize once again that with a chosen method of voting, any shareholder or proxy Who is present in the official meeting zone and who does not submit a voting card is voting in favor of all of the management proposals concerning items 2 to 7. The official meeting zone includes all rooms and areas in the SAP arena That are accessible after passing through security at the entrance.
The shareholders and proxies participating online will vote by means of an online form, namely This is transmitted to the company by pressing the Send Online Voting Card button. Voting results for the online voting are likewise determined using the subtraction procedure in which only the no votes And abstentions are collected. In other words, you have to submit online multi item voting card 1, which you do by pressing the Online multi item voting Card 1 shows each item by number from Item 2 through Item 7, Including the sub items in 6. By each item and sub item requiring a resolution, there are no and Checkboxes. Click the no or abstain box as appropriate by any item or Sub item on which you wish to vote against the management proposal or to abstain.
To vote yes to a management proposal, do not check either box for that item If you wish to vote yes for all agenda items and sub items, You do not need to send online multi item voting card number 1. So if you want to vote yes on everything, you need not send that. I would like to emphasize that with the 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 1 is voting in favor Of all of the management proposals concerning items 2 to 7, I would like To inform shareholders who appointed employees of the company as their proxies That all 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 will be reflected in the results. Some of the institutional investors and shareholders associations Have used the facility we offer to have nose or abstentions pre entered In our computer system, shareholders Once again had the opportunity to submit their votes prior to the meeting by mail ballot.
These votes have likewise been entered in 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 the voting. I'm now calling for votes on the management's proposals in respect of items 2 to 7 on the agenda. Item 2 on the agenda. As I explained earlier, the Executive Board and Supervisory Board have adjusted their proposal concerning the appropriation of retained earnings. They propose as following that the retained earnings of €8,308,244 €819.52 from the 2014 fiscal year reported in the annual financial statements and management report be applied as follows: That a dividend of €1.10 be paid for each qualifying NUPAR share, which makes 1,360,000,000 €154,504,504.50 That €400,000,000 be transferred to other revenue reserves and that the balance We carry forward to new account, which is €6,591,793,000 And €315.02 The wording of the management proposals for items 3 to 7 is the same as was published In the announcement in the German Federal Gazette, the Bundesanzeiger on April 10, 2015, In the interest of avoiding repetitions, I would 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 34, I expressly draw your attention to the voting exclusion in Section 136 of the German Stock Corporation Act. A simple majority vote is required for the resolutions on items 2 through 5. A threefour majority vote is required for the resolutions on items 6a, 6b and 7. From this point, shareholders who have appointed proxies in our Internet system cannot give or change voting instructions On these items, I now put the management's proposed resolutions on items 2 to 7 to the vote.
Shareholders and proxies who wish to vote against any or all of the proposals made by the management For items 2 to 7 or wish to abstain on any of them, please go to the main hall, raise your hands And put your completed multi item voting card 1 in 1 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 2 to 7 or who wish to abstain on any of them, This means you need to press For the record, the online participants have now had enough time to send their online multi item cards. 1, The time for submitting online multi item voting cardholder and one will end when I close the voting, which I will do as soon as I see that shareholders and proxies Have all shareholders and proxies present in the official meeting zone who wish to cast A no vote or an abstention on any of the management proposals been able to submit multi item card voting voting card won yet?
I see that everyone has handed over the voting cards. So anyone who wanted to submit their multi item voting card number 1 have done so. And I hereby Close the voting and I will announce the results of the voting as soon as I have them. Since I have been told where I need to continue, I will. Ladies and gentlemen, I now have the results of the votes.
The Annual General Meeting of Shareholders has accepted the management's proposal resolutions at items 2 to 7 of the agenda with a required majority. In detail, I will now announce the results of the voting on The Item 227, the management's proposed resolution and the AGM with a presence of 813,000,000, 1 127,520,000,000 With one vote each and the same number of low power value shares And 1,171,104 shares in the mail voting corresponding to 66 0.28 percent
and 1,000,000 €1,228,000,000,000,000,000,000,000,000,000,000,000,000,000
Stock capital, 31,730,157 treasury shares included in that and the decisions were On Agenda Item 2, the AGM with 99.66 percent of the votes cast, That is with the required simple majority, the use of the retained earnings From the fiscal year 2014 has resolved to be used as proposed According to the adjusted proposal of the management, which I read prior to the general debate and prior to the voting on number 2, 99.3
99.03
percent of the votes cast, that is with the required majority. The AGM has approved the members of the Executive Board in 2014 And given formal approval of their acts, I thank you for the expression of that trust. Should we have a round of applause here? Agenda item 4, the AGM result with 91.07 percent of the votes That is with a necessary simple majority of the acts of the members of the Supervisory Board 2014. So we're not as good as the Board.
On behalf of the Supervisory Board, I thank you for the expression of Trust. Agenda item 5, 96.73 percent of the votes cast, That is the necessary majority has been reached in favor of appointing KPMG AG, which are proofing Scherzerkschartschaft Berlin As the auditors and auditors of the consolidated financial statements for 2015, agenda item 6a, 95%, 0.5 5% of the votes cast, that is with the necessary threefour majority, has approved Of the cancellation of the existing authorized Capital 1 and the creation of a new authorized Capital 1 and 2 and the change of Section 4 of the articles as provided in the proposal by the management As stated in the invitation, under Agenda Item 6A, Agenda item 6b, 88%, 0.46% of the votes cast that is with the necessary majority of Three quarters, the cancellation of the authorized Capital 2 and the creation of a new authorized Capital 2 and the corresponding amendment of Section 4 of the articles of incorporation. And as in the resolution proposal, Unchanged in the invitation and published in the convocation of the AGM. At end Horizon 7, the AGM has resolved with 98.69% of the votes cast. That is with the necessary majority of 3 quarters has approved the change of the remuneration of the members of the Supervisory Board and the corresponding amendment of Section 16 of the articles of incorporation.
As in the resolution proposal published I'm in the invitation to this Annual General Meeting of Shareholders. Well, ladies and gentlemen, That's all of the agenda items of this meeting have been settled. I will now close the Annual General Meeting of Shareholders of SAP SE. On behalf of the Supervisory Board and the Executive Board, thank you very much for attending. I would like to add my own thanks and those of the shareholders to the Executive Board and staff.