We've always been asking ourselves one question, How can we help companies achieve more? Today, we are asking the same question in a new way. The car of the future, how can we inspire it? A business idea for a start up company. How can we make it real?
Another goal scoring opportunity in football, better therapeutic out comes for diseases, how can we contribute to them? Time and time again, we're excited to see what happens when the things we invented and designed are being implemented when our ideas placed in the hands of our customers become the tool to create new ideas When our solutions lead to solutions in other areas, when people get going, feel curious and get into contact with others, There's no such thing as too many questions or a thought too bold. With SAP Cloud powered by SAP HANA, We are taking the crucial step to be a trailblazer for everything our customers need today, simplicity, Independence, fun, anytime and any place, here and now, SAP is ready. Let us simplify everything so that we can do everything together. Good morning, ladies and gentlemen.
I'm pleased to declare the 27th Annual General Meeting of Shareholders of SAP AG open. As required by the company's articles, as Chairman of the Supervisory Board, I will be presiding over today's meeting. On behalf of the Supervisory Board and the Executive Board, I would like to bid you, our shareholders and shareholders' proxies, a warm welcome. We'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 with few exceptions, we would like to thank for their detailed objectives and informed reporting 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 of Shareholders. For the record, All members of the Executive Board and the Supervisory Board are here today. I would also Like to welcome Mr. Ulrich Hoffman Remi, notary public from the notary office in Heidelberg, Mr. Hoffman Remi is assisted by Mr.
Gerhard Sperke, Allstream, also a notary public from the Heidelberg Notary Office, who is sitting next to the speakers' table. Mr. Schberg is here to take down any observations and statements and to pass them To Mr. Hoffmann Remi, who is taking the minutes. Today's meeting was called with due notice in accordance with legal requirements and the provisions of the articles of incorporation.
Notice of the meeting was published in the BundesenZeiger on Monday, April 14, 2014. A copy of the notice is available for your inspection at the speakers' table. It will be annexed to the minutes. All notices required for convening the Annual General Meeting were properly issued. Prior to the meeting, the company received 2 shareholder counter motions for agenda items 28B and the company posted them on the Internet as required by the German Stock Corporation Act, Sections 126 and 27.
The counter motions are available for your inspection at the speakers' table. The official meeting zone includes This main hall of the SAP Arena plus all other rooms and areas in the SAP Arena that are accessible to shareholders after passing through security at the entrance. These include the training hall Opposite the entrance area where you will find the catering services as well as the spectator stairs on the 1st floor where there are more catering services and the information booth. The official meeting zone will be considered the attendance area. The meeting will be broadcast on the PA system throughout the official meeting zone.
There's also a big screen in the catering area in the training 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 here in the main hall at which you can inspect the register anytime during the meeting. If you wish to leave the shareholders meeting early, you can also appoint the employees of the company who are present for that purpose As your proxy, they will exercise your vote in accordance with your instructions. Please use the proxy and instruction card in your ballot card booklet.
You're allowed to instruct the proxies provided by the company exclusively with respect to voting on the management proposals published in the invitation. You can however entrust your vote to another participant. To do so, detach the attendance card and proxy form from the back section of your ballot card book, fill in your proxy's name, city of residence and ticket number on the proxy form and give your proxy your ballot card book without your attendance card and proxy form. On your way out, If you wish to leave the meeting temporarily or early and do not wish to appoint a proxy to vote on your behalf, Please hand in your attendance card and your voting cards at the exit. As in the previous year, Online participation is also possible.
Shareholders participating online can follow a live webcast of the entire meeting, cast their votes in real time and inspect the attendance register. In addition, shareholders participating Via the Internet proxy appointment and instruction system have until the beginning of voting on management's announced proposals to send or amend their appointments and instructions regarding these proposals. All shareholders and proxies who wish to speak or ask questions I kindly ask to report to the speakers' table as soon as possible. Here you can collect, fill out and return the speakers' request form. Please clearly and legibly write your name and meeting ticket number on the request form.
I must insist that every shareholder or proxy wishing to speak without exception firsthand in a request form at the When it is your turn to speak, Please approach one of the microphones in the main hall. The entire Annual General Meeting of Shareholders is being publicly broadcast on the Internet. However, only what I am saying now and the speech of CEO, Bill McDermott, will be recorded and posted on the Internet after the meeting. As in the previous year, we assume with your approval, we are allowing some television stations to broadcast highlights from the speech of Mr. McDermott.
These stations will only have the CEO's speech available for their recordings. 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 of sonographers to help prepare and keep a record of answers to questions from the floor. Ladies and gentlemen, I would like to remind you That you are not permitted to make any sound or video recordings of the meeting yourselves.
Please do not film, photograph or record the meeting. The same applies to shareholders who are following the meeting online. Ladies and gentlemen, let us now move on to the agenda. Let us first take item 1. For the record, I can report that the 2013 SAP AG financial statements and the consolidated financial statements, the combined management report SAP Group and SAP AG, 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 were available at the website www.sap.com/corporateeninvestorsgovernancemeetingsindex.
Epx. These documents are also available for inspection in the meeting room. You will find the documents at the speaker's table in the main hall and at the booth on the 1st floor. The auditor KPMG AG, Wirtschaft Prufungske Weschassefbelli in Germany examined the SAP AG financial statements, financial statements and the combined SAP AG and SAP Group Management report for fiscal year 2013 and issued an unqualified audit opinion. At its March 20, 2014 meeting, the Supervisory Board examined and approved the 2013 SAP AG Financial Statements, the consolidated financial statements and the combined management report for SAP AG and the SAP Group submitted by the Executive Board.
The 2013 financial statements and management report were thus formally adopted. The Supervisory Board compiled a written report, which is published on pages 21 to 31 of the annual report. I would like to highlight the following from the report from 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 receive 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. In the dynamic cloud business, SAP HANA, the most Successful product SAP has ever had provides the springboard for lasting profitable growth and can help the company gain an even stronger market position. There were 4 ordinary meetings and 2 extraordinary meetings of the Supervisory Board in 2013. The Executive Board also kept the Chairman of the Supervisory Board fully and continuously informed in between meetings of the Supervisory Board, notably in the context of an ongoing dialogue with SAP's Co CEOs. 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. In all other respects, I refer you to pages 21 to 31 of the annual report. To conclude my remarks about the Supervisory Board's report, I'd like to mention the changes in the membership of the Executive Board and the Global Managing Board. First, I'd like to put on record my thanks to Jim Hagemann Snabe for his outstanding work on the Executive Board. Together with Bill McDermott, he boldly launched a radical change in strategy.
That was 4 years ago. Together, they have steered the company towards success. Bill McDermott and Jim Snaba have worked brilliantly together. If they hadn't, SAP wouldn't be what it is today. The undisputed cloud market and cloud innovation leader with more than 35,000,000 users worldwide, SAP HANA is the most advanced business platform for real time applications anywhere in IT.
For that, I thank Bill and Jim most sincerely on behalf of everyone on the Supervisory Board. Together, they have impressively demonstrated that as a team you can work better, innovate better and be more agile. I have every confidence that the new team of managers under Bill Dermot will continue in the same spirit. They will develop SAP into a cloud company powered by SAP HANA. When Jim Snabe told us in July 2013 that he was going to leave the Executive Board, I said Jim is a proven expert.
A lot of companies would put a high value on his knowledge. SAP certainly values his expertise very highly indeed. We don't want to lose him. So we think it is important that he joins our Supervisory Board as soon as possible. To wait 2 years would be to run a risk.
He could be committed to other responsibilities by then. His recent appointment to the advisory boards at Siemens and Allianz speak for themselves. And SAP cannot afford to miss out on Jim's experience. There is no one else in Europe who can match Jim's expertise as a manager in IT. Getting Jim on the company's Supervisory Board is of strategic importance not just for SAP, but for the IT industry in Europe as a whole.
The German Stock Corporation Act spells out that when someone ends their time on the Executive Board, they can be voted straight onto the Supervisory Board provided 25% or more of the voting stock support the nomination. That provides has been met. It remains for the general shareholder meeting to vote on the appointment. And I really hope you will vote Jim onto the Supervisory Board with a good majority. I also want to say a big thank you to Werner Brandt on behalf of everyone on the Supervisory Board.
For 13 years, Werner has been this company's highly dependable and prudent Chief Financial Officer. He has kept a firm guiding hand on the company's finances all that time. But just as importantly, in recent years, he played a key role in setting the new course towards becoming a cloud company with sound financing for all and vision at SAP. These are not just invaluable traits of Werner Prandt, the man. They are factors that materially contributed towards a significant rise in SAP's shareholder value in recent years.
The fact that SAP is today one of the most highly valued companies in the DACHs is On top of all that, Wernherbrand stepped in 3 times at crucial junctures to show the responsibility on the Executive Board for Labor Relations and Human Resources. And that's No simple job at SAP as the recent comings and goings of Chief Human Resources Officers show. And well managed human resources is and will remain a critical factor in the increasingly tough competition for the best people. For this too, Wernherbrand deserves our appreciation and gratitude. By the way, as I speak, Werner Brandt is the longest serving Chief Financial Officer at any DAX 30 company.
I didn't know that myself. That in itself is no small achievement, especially considering that IT is easily one of the most dynamic industries in the world. Thank you again, Werner, for your long exemplary service to the company. We will miss you. Another good example of Werner's set and proof of his forward looking vision is that he took care to identify and develop his own successor.
As we announced when we met here last year, SAP has found an outstanding replacement from within the company, Luka Muchic, who will take up the CFO reigns on July 1 when Wernherbrand lets them go. Luka Mutic joined SAP in 1996. Like Wernherbrand, he stands for continuity, dependability and vision. He knows the company and is very familiar with the business model. He set up SAP's risk management.
He managed the finances of the sales subsidiary in Germany. And most recently, he was Head of Global Finance. In all of those roles, he showed what a good manager he is. I warmly welcome him and look forward to working with him. Where is he?
And now I'd like to thank Vishal Sikka for his huge support and passionate commitment to SAP. To Vishal Sikka, we owe SAP's position as leading innovator in IT with the SAP HANA platform and in the cloud. He was the trailblazer who brought about and nurtured SAP's intellectual renaissance. He deserves our respect, gratitude and appreciation. I have worked very closely and very openly with Vishal Sikka and we became friends over the years.
He has enormous dedication, visionary, Innovative mindset and great passion for his work. He set himself very high standards for his work as a manager at SAP. But his family is just as important to him and his commitment to them is just as strong. He never found it easy to do right by both at once all of the time. In the end, Michel Sika decided to leave the company to have more time to devote his family.
We regret that, But we respect his decision. For my own part, I can well understand his reasons for making that decision. Vishal Sikka will still be a friend of mine. As you know, at an extraordinary meeting on May 4, The Supervisory Board appointed Bernd Leukert and Rob Enslin to the Executive Board with immediate effect. These appointments are part of the drive to transform SAP into a cloud company.
Rob Enslin heads the company's Global Customer Operations. Bernd Leuchard leads the Global Development Organization. They both know SAP and the IT industry very well indeed. Both have many years of Both are authorities in their field and both enjoy enormous prestige among the people who work at SAP, the people who partner SAP and the people who run SAP software. I have every confidence that their input will be decisive in penetrating the global market and speeding the company to success in this new era with the SAP HANA Cloud Platform.
I'd now like to ask Rob to introduce himself to you the shareholders.
Thank you, Hudson shareholders. It's an honor and privilege to be here today. My name is Robert Anson, and I've been a proud employee of SAP for 22 years. It's my great appreciation to the Supervisory Board for the honor Partner to serve on the SAP Executive Board. I currently lead the company's go to market efforts As it relates to license sales and consulting revenues across all geographies and for the full portfolio of SAP solutions.
Throughout my career, I've remained fully committed to supporting our customers in all geographies with SAP solutions And it's an honor to serve on the SAP Executive Board. Thank you.
Thank you, Rob. And now perhaps Bernd would like to say a few words. Bernd Loeckert?
Auch, den Meineuseit. Thank you very much, Hasso. I'd also like to welcome you most warmly here at Mannheim. It's my special honor to head the best development team in the IT Industry Worldwide. Thank you, Hasso, CEO and I'd like to thank all members of the Supervisory Board for the trust and confidence you are showing in me.
My colleagues on the Executive Board and myself are driven by the same emotion. We've We've long associated firmly associated with SAP with one goal to make SAP successful in the cloud. SAP HANA is our innovation platform for all products. About my person, I was born in Ravensbruck, Germany. I studied at the Karlsruhe University and then Trinity College at Dublin.
And right afterwards, I very soon joined SAP. SAP in the meantime has turned 42 And almost exactly half of that time, I was privileged to be part of this fantastic team. And I wouldn't want to miss any of those nearly 21 years. I began my career in SAP as a software developer and later on as a project leader in R3 responsible for international customer projects. In the late 90s already, I was privileged to introduce innovative technologies in memory, live cash, APO, SCM and HANA.
In 2011, I assumed global responsibility in development for our entire core business, The SAP Business Suite. And in 2013, I was appointed member of the Global Managing Board of SAP. What remains decisive to me is that we succeed as a team. And as I said, I can rely on a world class development team. Software is in the center of digitization, which right now is changing entire industries.
HANA as an innovation platform is an immense technological breakthrough. More than 3,000 clients are using it now. Cloud is no longer the future. Right now, we are reinventing ourselves. We raise all products still they have a platform make it fit for make them fit for the cloud and develop modern user interfaces.
An interesting challenge was the best development team And each of these 20,000 people of this team bear a decisive part of this responsibility. Quite certainly we'll not forget our present clients, whom we'll support in any way they need also in the future in order to provide a successful path into the future for them. HANA enables us to be ahead of our competitors by one step again and the cloud offers us much more flexibility and very new business models for our customers. SAP success was based and will be based on innovation. This is particularly close to my heart And a topic such as Industry 4.0, which you can see at this general annual meeting is only one example showing How HANA Cloud Predictive Mobile and other technologies combined with other scenarios will be used to create added value for customers.
We enjoy an excellent position for our future. Thank you and have a nice day in Mannheim.
Thank you, Bernd. Ladies and gentlemen, aside from the changes on the Executive Board, I also have changes to tell you about on the Global Managing Board. Rob and Bernd used to be members Global Management Board before. Now I'm delighted to announce 2 new members of the company's Global Managing Board, Helen Arnold, who is the Chief Information Officer and Stefan Rees, who heads SAP's Global Human Resource Management. They are both highly experienced.
And in their respective fields, I expect them both to greatly expand SAP's potential. The best of success to both of them. Ladies and gentlemen, now it is time to hear from the CEO. I I would like to ask Bill McDermott to address you. Because Bill does not speak German, his speech will be interpreted into German so that everyone can follow.
Bill's answers to questions from shareholders will also be interpreted into German. Bill?
Thank you, Hasso. Guten Morgen.
Good morning, ladies and gentlemen. Welcome to the SAP Arena.
Okay. I know my German isn't getting much better, but it's been a busy year running SAP. I'd like to thank you for your 2013 was a strong year of profitable growth for SAP. Today, I'm pleased to share the details of our business results and our ambitious plans for 2014 and beyond. Makes the big difference for this company each and every day.
I would also like to thank Our Chairman, Hasso Plattner. SAP was built on his passion for innovation And courage to challenge the status quo. This is in fact the foundation of the SAP Dear Supervisory Board members, thank you also for your continued confidence in the Executive Board. We rely heavily on your trust. As Hassel Plata mentioned, we have a number of changes to our board, which I would also like To recognize today, so please allow me to also welcome Vern Leukert and Rob Enslin to the SAP Executive Board.
We're looking forward to a great showing from them both. I also welcome Helen Arnold and Stephan Ries to our Global Managing Board. It's just great seeing you out there this morning. And may I please also recognize former SAP Executive Board Member, Vishal Sikka, for his role in evolving SAP HANA into a leading technology platform. The Board has full trust in Bernd Leukert and the global development team who built SAP HANA to continue to drive our leadership.
Next, let me also recognize our distinguished colleague, Werner Brandt for his service to SAP. As Haso said, for over a decade, he has played a key role In a very solid financial position, Werner, it has been an honor for me and for the entire board to serve side by side with you. I also wanted to thank you, Verna. Thank you. And excellent leaders always pick great successes.
With Luka Muchic, we have found an outstanding successor, and we are very pleased to And finally, let me also recognize my co CEO, Jim Hagemann Snaba. His vision and leadership have been instrumental in reinventing SAP and making it the company it is today. He has earned an extremely high level of respect Not only from our global customers, but also our employees for his personal integrity, openness, and always down to earth leadership style. On a personal note, without a doubt, It has been the highlight of my professional career to work alongside Jim as Co CEO. Please join me in recognizing his tremendous service to SAP.
Jim? You will be invited to vote on Jim's election To the supervisory board later in today's meeting, and as Hasso said, it would be highly valuable for SAP to keep him team colleagues and ladies and gentlemen to have your trust and support in leading SAP Forward as the sole CEO. Leadership changes naturally come And they bring uncertainties, and these uncertainties can only be faced by looking forward. Just as our market is evolving, we must also evolve. I assure you that the board is as united and committed to the success of your company as ever before.
In 2010, We set out to reinvent SAP. We began with our vision that SAP's We bet on innovation and growth as our lead strategy. We predicted the world would change and therefore invested in mobility which is rapidly transforming the way we work. We also recognize that with data in the world doubling every 18 months, in memory computing would be a driving force. So we invented SAP HANA to redefine the database market And we invested in the cloud where we did not have the assets we needed for the customer, we bought the best ones in the market.
Over the past 4 years, we've grown software and cloud subscription revenue by 90 3%, software and software related services revenue by 71%, and we increased our operating profit by 88% and at the same time nearly doubled our market cap for SAP. In the process, employee engagement has increased by 8 percentage points to 77%. This is one of the highest scores in our industry. And finally, We've strengthened our customer relationships and increased customer loyalty. So it is Clear that our strategy was the right one for our customers and for SAP.
Looking at our Cloud business today, our annual cloud revenue run rate exceeds €1,000,000,000 The acquisitions Trade over a half a $1,000,000,000,000 of goods and services through our Ariba network. Expand the network even further. In August of 2013, SAP acquired Hybris, A leader in Commerce Software, technologies such as the Internet, Mobile phones and social media have radically changed how we behave as consumers. We all expect to get the same information and the same experience whether we're in a retail shop We're shopping on a mobile phone. This creates both an opportunity and a technology challenge for our So they are turning to SAP by combining the Hybris e commerce offering With SAP CRM and SAP HANA, we can offer the customer a next generation solution from managing their customer relationships.
Our investment of roughly €1,000,000,000 is already paying off. In the Q1 of this year, we delivered triple digit revenue growth in the Hybris platform in combination with SAP Cloud for Sales. With the recent and managing contingent labor services. Once we combine the Fieldglass assets With SuccessFactors and the Ariba network, customers will be able to manage their business needs for permanent employees, flexible workforce and goods and services and this will all happen in the SAP Cloud. SAP HANA is also now a key growth driver.
In the 3 years Making HANA one of the fastest growing products in the history of enterprise software. In 2013 alone, SAP HANA generated €664,000,000 in revenue Wow. Come on. At the beginning of 2012, we put our entire business suite on SAP HANA. Since its general availability just 1 year ago, approximately 1,000 customers have chosen the solution, and this has far exceeded our initial predictions.
Mobile and end user With an intuitive, beautiful user experience for both mobile and desktop, today we have over 200 applications with SAP Fiori. We also have a healthy core business With software revenue growth at 2% at constant currency in 2013, and this is a very important metric, which proves we can expand into the cloud and still deliver growth in our core software business. So while we recognize that there have been concerns that our move into the cloud would be at the cost of our traditional business, and attractive growth opportunities for our core business. We strengthened our focus on industries such as public services, financial services and retail. And we continued our investments in emerging markets, including the BRIC countries, the Middle East, and Africa.
In Established Markets, We are creating new growth opportunities by offering customers the choice of consuming our applications and analytics on premise,
Whenever I said that I need an ERP system in 3 months, All the others said, you're mad. SAP was the only one to say, yes, we can do that and let's do it together. When it was established, Site Innovations was a purely production site without its own infrastructure. Which includes an ERP system. Without that, you've got no change of survival.
We looked at the benchmarks and 85% of the companies in the industry use the solution. So why should we have a different set up to 85% of other phones. It's a fundamental importance because you're implementing a system developed from the automotive industry. So you're immediately talking your customers' language in the process. By deciding on SAP HANA, We obtained a flexibility we can also supply to other industries.
HANA means that we have a competitive edge. We are very much fast in all the processes the industry now requires. We managed to do all this within the 3 months We said ourselves that was 3 months because of the RDS solution. And with the cloud solution, ERP HANA gives us the option of keeping the cost variable over the term of the contract so that we don't have to make a big investment at the start. It made a great sense from a business point of view because it meant that we could concentrate on our own business and could leave the operation I have 24 hour direct support from SFP, giving me a whole new meaning to performance.
We have the possibility of using further cloud modules because we have an integrated solution and can add to that at any time. The SAP decision was clearly the right decision. I would definitely make it again.
With the market position and innovation portfolio we have today, We are a stronger partner to our customers than ever before. The reinvention of SAP Could not have been possible without the support of our shareholders. And I know on behalf of the Supervisory and Executive Board, we'd like to thank you for standing behind us and believing in this amazing opportunity. Thank you, dear shareholders. Turning to 2013 specifically, SAP had a very successful year of profitable growth.
Note that all figures are non IFRS at constant currencies unless otherwise indicated. We achieved our guidance on cloud subscription and support revenue with €786,000,000 or approximately 130% growth. We exceeded our guidance on software and software related service revenue with 11% growth. And we delivered on our operating profit in the mid range of our guidance with €5,900,000,000 or 13% growth. These are solid results that we can all be proud of.
Our effective tax rates, both IFRS and non IFRS, were in range or better than guided. I would also like to add a comment on currency effects. We faced strong currency headwinds effects of exchange rates on our cash flow and hedge these when necessary. Finally, I would like to mention our growing network of over 11,500 partners, which contributed more than onethree of our total revenues in 2013. Now turning to 20 thirteen's regional performance, We again demonstrated our strength as one of the most global companies in our industry.
The Americas region delivered a 16% increase in software and cloud subscription revenue, which was largely driven by a triple digit increase in cloud subscription revenue in North America and very strong core business in Latin America. The EMEA region had a very strong year with 8% software growth And this also includes cloud subscription revenue. We were especially proud to deliver strong growth in our home market right here in Germany. In the APJ region, the economic environment proved challenging, but we closed the year with a strong 4th quarter, And this helped us return to modest 4% growth in software and cloud subscription for the full year. And think about this, In competitors in comparison to competitors, most of their growth was either flat or actually declined.
The emerging economies continue to be important growth markets for SAP. Key markets including China, Russia and Brazil all achieved strong results and we remain firmly committed to our growth plan for China. Our investments in the world's 2nd largest economy are paying off. China is now one of our top 7 global markets. In 2013, we placed a strong focus on building local partnerships.
For example, by partnering with China Telecom, we are the 1st company to offer a full human capital management system in the cloud in China. And with this strategy, we are increasingly gaining the close trust of companies in China, our second home. Let me also comment on the situation in Eastern Europe. Our primary concern has been securing the safety of our employees in the region. Overall, we did not experience a significant economic impact on SAP's business in the Q1.
Although we see that customers are still investing in software, recent EU sanctions on In summary, 2013 was another strong year for SAP. We were able to grow our core software business and expand our operating margin while transitioning the company to a cloud business model. This combination of achievements is unique in our industry and shows that our strategy for innovation and growth is the right one. We believe our shareholders should benefit from Board proposed to raise the dividend by 18% to €1 per share. This represents a dividend payout of approximately €1,200,000,000 and a payout ratio of 36%.
You will be asked to vote on this later in the meeting. Now turning to our stock performance, The market has clearly validated our innovation strategy over the past 4 years. Since 2010, our share price has increased approximately 85%. SAP is a growth company and a strong investment opportunity. We realize that as shareholders, you experienced some fluctuations over the past year.
After significantly outperforming the major indices In 2012, SAP stock increased 2.7% in 2013, while the DAX increased 25.5%. SAP stock declined slightly compared to the benchmark indices in the Q1 of 2014. The DAX 30 was virtually unchanged while SAP stock declined 5.7%. In 2013, we accelerated our move to the cloud, and the market is now digesting The cloud because this is what our customers want and expect SAP to do. And with the cloud, We are building a strong recurring revenue stream and aggressively taking market share in a valuable expanding our leadership in emerging markets and leveraging our deep expertise in business processes to design solutions for strategic industries.
In Established Markets, we bring our core solutions into the And finally, we are becoming a simpler and more productive company. Our employees and our customers have told us we are complex, and we are listening. We are simplifying our own business processes and focusing our people on the front line close to our solutions and our customers, and we are confident this will continue to drive solid business results for your company, both in the short term and in the long term. From this position of strength, The time is right for us to take our strategy now to the next level. Ladies and gentlemen, standing here today in Mannheim, I'm reminded of the famous quote by legendary Mannheimer and football The facts are clear.
While we have been very successful over the Past 4 years, and we remain committed to our vision. Our market and the expectations for our customers have clearly evolved. The game is changing and we have a clear strategy to stay ahead. The most significant change by far is that our customers no longer accept complexity. They clearly tell us that complexity is the greatest challenge to running and growing their companies.
And too much of their IT budget goes to hardware and services to manage all of that complexity. Their business processes, their IT landscapes have gotten out of hand. So they're asking SAP to help them run simpler. They need solutions that are easy to consume, that make their employees immediately more productive, and that make it easy for them to grow their business. Since 2010, we have successfully added many new innovations to our portfolio.
Now we must dramatically simplify by reducing the time and effort it takes to consume those wonderful innovations. Solving this challenge is also our greatest opportunity. So let me be very clear, dear shareholders, that by Simplify, I do not mean SAP should do simple things. For over 40 years, We have managed highly sophisticated mission critical business processes that drive the value chains of entire industries. This is our foundation.
It is what makes us SAP. By simplify, I mean we must make it dramatically faster and easier for our customers to adopt and use our solutions. Our traditional on premise model provides ongoing value and growth, but it does not always and they're looking for a trusted partner in the cloud. Let me give you an analogy to better explain the opportunity. Imagine a utility like electricity.
Today, we all take electricity for granted. But once businesses such as industrial factories had to generate their own power, it was complex, It required costly equipment and special skills and as their businesses grew they couldn't meet the demand any longer. Power plants. It simplified everything. Now factories no longer had to deal with cost complexity of generating power.
They could simply consume what they needed when they needed it. In simple terms, This is what is happening today with cloud computing. In the traditional IT model, every business has to implement and manage its own business applications. At times, it can be too costly and too complex. Cloud Computing changes this for our customers.
SAP can now manage this complexity for them. Much like electricity, customers can get instant consumption, instant value and radical simplicity. This is why more and more customers are moving to the cloud and this is why we have clearly set the direction that SAP must be the cloud company powered by SAP HANA. I would like to briefly address 2 important points regarding cloud security and the transition of our business model. One of the key reasons customers choose SAP Cloud is because they trust operations meet the highest standards in our industry.
We continue to expand our global network of data centers to give customers a clear choice about where their data resides. In 2013, we saw some of our most As a trusted innovator in the cloud, we take their trust very seriously. On the business model, as shareholders, you recognize that our traditional on premise business model is very profitable. Customers buy licenses, they implement the solution in their IT landscape, and usually invest in services and support. In the Cloud, the revenue pattern is different.
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. Initially, SAP receives less revenue compared to the traditional model. However, over time, when scaling the business, we have a more predictable revenue stream and a higher net present value. If you compare the deals in this example, Looking at our total revenue, we anticipate that in the future, our fast growing Cloud business, along with growth in support revenue, will drive a higher proportion of more predictable recurring revenue for the company.
Therefore, we have moved our 35% operating margin target from 2015 to 2017 We are managing this transition gradually as we have the advantage of our solid and growing core business. We have talked about simplification and the cloud. How will SAP become the cloud company powered by SAP HANA and make businesses run simpler. We will simplify our solutions by moving all of our applications and analytics to the SAP HANA platform. SAP HANA simplifies IT Landscapes by reducing the amount of data in applications, which reduces the need for hardware.
Further, we simplify how customers consume our solutions by bringing them into the SAP Cloud. We offer applications for line of business such as HR, Sales, finance or procurement in the public cloud, where all users connect to the same solution, like in the electricity example. We also offer our solutions in the private cloud, where customers have their own version of the applications and can run their highly customized business processes. We then provide deep integration between all our cloud solutions and also with our customers' on premise applications. And we are confident that this strategy We'll in fact make businesses all over the world run simpler and drive the next Our vision is to make the world run better and improve people's lives.
And we take sustainability and social responsibility very seriously. While we have many examples of how our solutions are positively impacting the world, I believe this example
I think one has got to maintain a positive attitude. That's most important. The NCT is the 1st comprehensive cancer center in Germany. We aim to identify therapies which are tailored exactly to a specific molecular profile of a patient and to treat exactly those molecular defects that have caused the tumor. Matters of cancer research can thus be combined with aspects of patient treatment.
This means we've got 2 highly different data worlds which are characterized by highly comprehensive data complexes. I guess that we have got up to 1200 different types of data fields per patient. And the new system Based upon SAP HANA allows us to analyze these different data fields in a combined manner. On the one hand, we've got unstructured data obtained from medical reports or medical findings created through imaging. On the other hand, we've got large volumes of data that are based upon genetic analysis of tumor material cancer registry data.
In the final analysis, a tool like HANA helps us very much in our daily work, for example, to recruit groups of patients for certain clinical studies or to assess the effectiveness of a new therapy. This applies above all in situations where we have exhausted the standard therapies and are looking for new possibilities. With the means currently available, we can do this only for about 5% to 10% of the patients. In many cases, this is an issue of staffing and capacity. And by optimizing this process, we can significantly increase The share of patients for which new treatments can be made accessible.
Using SAP HANA, We can scan our data pool much faster. We can see things we didn't see before. And those things we had to work hard for can now be handled much faster. For the patients, this means that we can apply More effective therapies together with the patient. I feel like finally getting the right medication for my needs
In 2013, we were ranked The number one software company in the Dow Jones Sustainability Index. In 2014, we continue our efforts with a commitment to power all of our data centers with 100% renewable energy. Most importantly, we continue to listen closely to our employees. Our employees have told us that they are ready for the next phase of our innovation strategy, and they are eager to work with the Board to make SAP a simpler company for our customers. And that's why I'm particularly pleased that Stephan Ries has rejoined SAP as our Global Head of Human Resources, reporting directly to me.
While we had many programs focused on our employees in 2013, I would like to comment on 2 in particular. First, we will continue to increase the number of women in leadership roles at SAP. We've already seen an increase from 18.7 percent in 2010 to 21.2% Secondly yes, you can congratulate Helen and Stephan. That's good. That's good.
2nd, we launched a truly unique diversity program in 2013, autism at work. Recognizing the valuable abilities that people with autism bring to the workplace, we aim to have 1% of our global workforce represented by people on the autism spectrum by 2020. 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. Let me now turn to the specific agenda items 67. More details on these items can be found in the joint reports by the SAP AG Executive Board and the management of the respective subsidiaries and are also summarized in the invitation for today's meeting.
Regarding agenda between SAP AG and 2 subsidiaries. These agreements have been in place since 2006. The primary rationale of the agreement was to establish a fiscal unity between SAP AG and the 2 subsidiaries for both corporate income and trade tax purposes in order to optimize the SAP Group's tax burden and group tax cash flow. Furthermore, The agreement also aimed to ensure uniform control of the subsidiaries' managements and their integration into the SAP Group. Due to a recent change in German tax law, which took effect in 2013, these agreements need to be amended.
The amendments are intended to clarify that the references to the statutory loss transfer provisions pursuant to Section 302 of the German Stock Corporation Act already contained in the agreements always relate to the latest version of the provision. German law requires that in order for the amendments to become They must be approved by the respective shareholders, meetings of the subsidiaries, as well as of SAP AG as the controlling entity with a majority of at least 75% of the votes cast. The amendments will only become effective upon registration in the commercial register of the respective subsidiary. Agreement between SAP AG and one of its subsidiaries, which was concluded in March 2014. The conclusion of this agreement also primarily serves to establish a fiscal unity between SAP AG and the subsidiary for both corporate income and trade tax purposes.
And it is also aimed to ensure uniform control of the subsidiary's management and its integration into the SAP Group. The agreement will only become effective upon approval by the General Shareholders Meeting of both SAP AG and the subsidiary, subsequent registration in the commercial register of the subsidiary. The agreement is concluded for a minimum term of full 5 years, which is required for the establishment of a fiscal unity. The subsidiary is a wholly owned direct Its activities are limited to holding partnership interest in 2 U. S.
Investment funds. The first is SAP Venture's Fund II LP, which has a volume of 6 $51,000,000 investing in innovative and rapidly expanding IT companies that have already established their success of their business model. The second is SAP HANA Real Time Fund, which has a volume of $406,000,000 mainly investing in international venture capital funds at the beginning of their respective terms, as well as in newly founded companies that focus on the development of IT, cloud solutions and real time technology in order to make use of the economic potential of controlling large amounts of data. The funds have a remaining term of around 9 years for the SAP Ventures Fund II and 15 years for the SAP HANA Real Time Fund. Having said this, I would like to ask you to approve these agenda items.
And let me also briefly address agenda item 8, the intended conversion of SAP AG to an SE. The complete documentation can be found on our website. We are proposing the change of the legal form of SAP AG from a German stock corporation into a European company or SE. This requires the consent of the Annual General Meeting of Shareholders. And ladies and gentlemen, you are therefore requested to vote on this under Agenda Item 8A and B.
The conversion has several advantages for SAP AG. First, this change emphasizes that SAP is truly an international company with European roots, reflecting the importance of our European and international operations. Even more importantly, this allows us to develop a model for The involvement of the European employees that is tailored to our unique needs. The framework of this model is defined in the employee involvement agreement, which we negotiated with the representatives of our European workforce. According to this agreement, we would limit the size of the supervisory board to 18 members with the opportunity to further reduce its size to only 12 members from 2018 onwards.
This allows us to optimize both the corporate governance structure of SAP and the work of its corporate bodies. Without the change of legal form to the SE, a larger supervisory board of 20 members would be inevitable due to the development of the number of German employees affecting the efficiency I am confident we have found a very balanced solution that assures the contribution of all employees The SE conversion will have no implications on our shareholders, our shares or our stock exchange listings. You will simply become shareholders of SAP SE Upon the conversion, you will retain the same number of shares that you held in SAP AG immediately prior to the effective date of conversion and the shares will carry the same rights. The trading of SAP shares will not be affected by the conversion either. Only the quotation will have to be adjusted to SE due to the change of name.
For these reasons, I ask for your approval for this significant step forward in SAP's history. Ladies and gentlemen, in summary, our strategy has never been clearer. We are transitioning SAP to the cloud, to be the cloud company powered by SAP HANA, helping our customers to simplify and grow their businesses. We are confident in our core business and will continue to And for 2017, we have spoken a lot about success today. I'm confident in the success of SAP, and I'm also confident that in a few weeks, the German national football team And I wish them all the best in playing Team USA in the first stage.
I do. And I'd like to share a short video From a good friend of SAP who knows the importance of finding a competitive edge.
Dear shareholders, as an SAP Brand Ambassador, it's a true honor to talk to you today on the day of the Annual Shareholder Meeting. Would have liked to be there with you as I am a shareholder myself. Today, everywhere, large amounts of data is captured and analyzed also in sports. We gather a lot of important information about our own players as well as our opponents. We use that data to gain more detailed knowledge and pass this information on to the coaching teams to make even smarter decisions.
SAP supports the German national team with its products and employees, but also with its innovative technology so we can better prepare our players in a simpler and faster way. We will actually use this technology on-site in Brazil. And I'm certain that this partnership will have a significant impact on sports, specifically for soccer. And hopefully, that we will thus also gain a competitive edge over other nations. Now I wish everyone a successful shareholder event.
Good luck for the future and the new projects. Dibl, in our personal meeting, I was able to discover your enthusiasm and excitement for SAP. Let me wish you and the entire leadership team and also all employees of SAP success, strength and luck to realize the SAP's dreams. Finally, I hope to be involved soon, hopefully holding the World Cup trophy in my hands.
In conclusion, on behalf of the entire board, I'd like to thank you very much
Thank you, Bill. Well, he now understands German, right? So ladies and gentlemen, Let me briefly comment on the SAP AG Executive Board compensation. On pages 32 to 45 in the annual report, you will find a detailed account of the executive board compensation package. There were no changes to the package last fiscal year.
The current German Corporate Governance Code only recommends a detailed review of the package at the Annual General Meeting of Shareholders when the compensation arrangements change. So I can be brief this year, unlike in years past. If you have any questions, I will, of course, be happy to answer them when we come to the discussion I am now calling for speakers to item 1 and all other agenda items that is to say items 2 to 8 in the invitation to the meeting, of which copies are available in the meeting rooms and which also contains the management's proposals. In relation to item 2 on the agenda concerning the appropriation of retained earnings, please note that the Executive Board and 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 per share that qualifies for dividend has not changed.
The executive and supervisory boards therefore now ask that the meeting resolve that the retained earnings of 7,595,000,000,000 €363,764 from the 2013 fiscal year reported in the annual financial statement and management report be applied as follows: that a dividend of €1 be paid for each qualifying no par share, which makes €1,194,000,084,000,000 That €400,000,000 be transferred to other revenue reserves and that the remaining amount of €6,000,000,000,000,000,000,000,306 €1,680.58 be carried forward to the new financial year. The text of this proposal is available on the speakers' table. In connection with item 8b concerning the election of SAP SE Supervisory Board members To represent the shareholders, I'd like to draw your attention to the following. As noted on Page 43 in the invitation to today's meeting, shareholders with more than 25% of the voting rights have written to the Supervisory Board in support of the nomination of Jim Hagemann Snabe. So his nomination meets in the second part of the sentence in the German Stock Corporation Act, Section 100, paragraph 2, sentence 1, Subsection 4, in connection with SE Regulation, Article 9, Paragraph 1, Letter C.
Jim Hargam and Snabe's election would therefore not contravene the 2 year statutory extension period otherwise required before an Executive Board member can join the Supervisory Board. Supporters of his nomination include the founders of the company with their Trusts Companies and Families and also Allianz Global Investors Europe, DMBH and Deutsche Asset and Wealth Management Investment GmbH. In their letters to the Supervisory Board, each of the supporters states that they will vote in favor of electing Mr. Snabe to the Supervisory Board as proposed at this Annual General Meeting of shareholders. I can therefore establish that the legal requirements for electing Jim Hargam and Snabe onto the Supervisory Board of SAP SE today have been met.
I hereby open the debate, which I would like to hold as a general debate on all agenda items. We will then give you our answers having collected a number of comments and questions. I will now invite Ms. Jelle Benner Heinecke of the German Association of Retail Investors, DSW.
Ladies and gentlemen, I'm Jelle Benner Heinehagen. I represent those SAP shareholders who were charged by DSW to exercise their voting rights. SAP, ladies and gentlemen, is the fastest growing mega cap company in the industry. So I've read I didn't quite understand what I read, but it sounds great. It sounds impressive.
And what we've seen and heard about The 2013 business year well except for the share price of the SAP share, it's really excellent. €2.79 was the output per share according to IFRS. All forecasts by the Executive Board all the guidances have been met and we get €1 as a dividend. The payout quarter was increased slightly as you told us. We can only say congratulations Bill and Jim.
That was good work. The speed at SAP seems to put us on the right way. And you remember ladies and gentlemen For many years, we've been looking for a business model that pays well. And as we've heard today, We can say that HANA and the cloud that is the data cloud not only have potential for the future, but also are now beginning to make money. We should not forget.
After all, we come from the classical business, the licensing business where we still make good margins. And as Bill McDermott just showed in the new business there are different of revenue and different margins as well. So SAP right now is in the middle of a transformation a metamorphosis. But I'm Safe to say prospects seem to be rosy. And to a judge by the videos we've seen and the Must confess to a certain amount of euphoria.
So we shouldn't forget ladies and gentlemen. When we look at Silicon Valley in California, we see in our tea world in which milk and honey are abundant. A country in which we as shareholders of SAP can benefit in the future. Bill, you explained how the cloud contract differs from a traditional on premise contract especially as far as revenue structures go. That was a very important explanation because Now we understand that of the data cloud we need a scale effect.
We need bulk business to make money as well as in the classical business. A question for you Bill very briefly. This transformation we are seeing in SAP, how does that affect our guidance for the current fiscal year? What are the consequences with respect to the medium term goals of revenue for 2017? You slightly reduced the margin guidance.
Perhaps you could tell us more about this and more specifically. The cloud business, ladies and gentlemen, developed well in 2013. We ran up losses admittedly. But in 2014, we are Fully on the profit line. It looks like a real success story.
The objectives for the Cloud business were just underlined by you. I should like to know what is the distance between us and competitors like Sales force. Have we really overtaken them for good? Or is it still possible that sales force will take up and catch up with us in the near future. IT Security and Data Privacy, You addressed that point too.
Since the NSA affair, Germany is talking and has been talking about data privacy and security. Many European countries want to have a national European cloud where the Americans will not be able to see everything. I should like to know to what extent SAP in actual fact has benefited off that debate? Have you generated any additional revenue in that field? And what about a Schengen agreement on IT and data The most beautiful daughter of SAP Ladies and gentlemen, it's called Hannah.
And it doesn't come from Palo Alto not from California, but From Waldorf, HANA is was grown in house, the fastest Growing and the most successful product launch in SAP. Ladies and gentlemen, I'm sure we can be proud of that. In 2013, HANA made revenue of €1,200,000,000 And in the future HANA is going to be the platform for any software of SAP. Right now 3,200 companies are already joining Hanna. My question, how many customers do you want to have with HANA by late 2014?
And please Be so kind as to explain to us the market position of the market shares in that area. Where are we number 1 And where do we have to catch up? SAP as we heard It's growing not only on an in house basis like Hanna, but also as a result of purchases we Bought Hybris last year. Question, did Hybris come true to its promise? How does it match the complete portfolio?
And this year, it's about Fieldglass not a name as nice as hybrids, but it's a company which is going to be interesting as well. So perhaps you could give us some more explanations and tell us to what extent Fieldglass matches your concept. And given all these acquisitions you have made over the years, What about the management? Do you take over the management? And how do you integrate it into the group?
Looking at the current fiscal year, I'm interested especially when looking at the overall investment volume to know how much you want to invest into internal growth and how much you want to spend on purchases. Ladies and gentlemen, investments of course, this means talking about growth markets and automatically Looking at China, the growth market of the future also for SAP. Up until by 2015 SAP at least wants to invest US2 $1,000,000,000 in China. And in 2015 also generate €1,000,000,000 revenue in China. That are the plans.
Now there's already a joint venture with China Telecom. Here I'd like to know a bit more and more precisely what you expect of this partnership with a Chinese telecommunication company. What are your specific concepts in this regard? And is this joint venture perhaps only the beginning a blueprint for more strategic partnerships in China? Mr.
Brandt, last year, we briefly heard about a potential public listing of SAP at the Shanghai Stock Exchange. We've heard nothing about that point today. So my question what's the current state of affairs? Or let me rather ask the other way around. What's the reason for not being quoted at the Stock Exchange of Shanghai with our SAP stock.
In addition to opportunities, we'll also have to look at the risks associated with SAP. For those who have been attending this meeting for a long time, we've often talked about process risks About the litigation with Tomorrow Now, this is the risk inherent in doing business in North America. Tomorrow now, a chapter which hasn't yet been closed. So let me ask what's the current status and when can we expect an end to this story. There's also a new Litigation in the U.
S. VESATA this time. It's supposed to be about patents and an order of magnitude of US400 $1,000,000 I should like to know your assessment of that of the outcome of that litigation. With respect to all these lawsuits going on in the U. S, I'd like to know What your track record is?
What's the success rate? How many court cases Have you won in the U. S. Over the past couple of years? How many have you lost?
And should losses outweigh The success I might suggest changing your lawyers. Ladies and gentlemen, talking about legal risks means that we also have to Talk about the risks and opportunities of personnel. We all know that a company like SAP lives on its good personnel the most important asset of this company and it is also its future. It's all the more important ladies and gentlemen to see a person on the Executive Board taking care solely of this aspect. We had a few ladies Responsible for personnel at Executive Board level they all left and then Mr.
Brandt took that on in addition to his usual business. Now we have no member of the Executive Board in charge of personnel, but You gave us hope. You said there was somebody on the Global Managing Board. So a question for you Mr. Plutner.
Will that person also be appointed Executive Board Member in charge of personnel? Or how do you want to handle the important subject of personnel at SAP. Of course, one might also feel Mr. Plutner that you have taken this on board Because we read in the supervisory report that you set up a committee on staff matters. It looks as if the Supervisory Board now had taken over the duties of the Executive Board member in charge of personnel.
Ladies and gentlemen, you recall last year we had the twin heads of the company a Dane and an American. It worked for 3 years. Now we have only 1 CEO, Bill McDermott. And we must also find that the so called crown princes as they were called Shay Agassi And Vishal Zeker also resigned somewhere on the way. Probably SAP in the meantime has become too big and too cumbersome for these innovative people.
Maybe it's a dinosaur in the industry which is less versatile than a Californian smaller animal. So Mr. Plutner, what about the top personnel at SAP? Why doesn't it work the way we would wish it to work? Or is it perhaps simply true to say that this is quite ordinary and normal in the IT industry and that you have to cope only with the usual problems.
Jim Hargamansnaber is leaving the Executive Board of SAP Switching to the Supervisory Board right away. This is unusual because the Legal cooling phase, the cooling off phase of 2 years in this case is bypassed as it were because We have a minority vote. That is the motion by a minority to have this Switch to the Supervisory Board permitted. This is very rare ladies and gentlemen. Only very few German joint stock corporations have acted in this way so far.
To be frank, we don't have a problem. We would consider it a problem only if the Chairman of the Supervisory no of the Executive Board would directly switch to the Supervisory Board as Chairman. That would cause us problems because here and there we have had bad experience But we have no problem when Jim Hagerman Snabe becomes a regular member of the Supervisory Board Because we must also see in those 2 years of calling off a lot of know how will be lost. So DSW, my organization will support this switch, especially also because as far as remuneration is concerned, Clear separations have been made. Ladies and gentlemen, item 8 of the agenda The new Supervisory Board for the SE.
In addition to Jim Snabe, there are only familiar faces on the Supervisory Board. We've known all of them for a long time. I'd only want to see you wrote Mr. Plutner That all members of the Supervisory Board, whom you prepare us for a reelection also correspond to the definition of independence. I'd like to know how do you define independence precisely For these individual candidates, ladies and gentlemen, despite all the fluctuation On the Executive Board, which I just criticized, we should also look at the positive side.
There are still some rocks amidst the wave of the SAP Executive Board, Mrs. Oswald and Brandt. For many years, they've been members of the Executive Board and they stand for continuity in SAP. I can only say, Mr. Brand hats off.
Respect from our side You have succeeded To buy up one company after the other and integrate the last ones were SuccessFactors Ariba, Hybris And now Stonefield Plus and this without a lot of promotion. Not every CFO can handle it in this way let alone with that high rate of success. And another very positive thing, you ever stepped into the breach when A Board member in charge of personnel was lost. Mr. Brandt, we wish you all the best in your so called retirement And we'll have to see whether your successor will be just as good.
SAP ladies and gentlemen has meanwhile become a global company. We think and do research in California and at Waldorf. We grow in Asia and We control the finances out of Valladolff. All this works well. I read that Bill McDermott has moved to Heidelberg with his family.
Welcome to Germany, Well, we are happy to hear about that because that's a very important sign for SAP and the SAP staff. Last year you announced that move to date on the agenda. Item 8 A SAP It's going to become a European company. To the shareholders, to us, I'm sure This is not going to change very much. The whole thing will cost us €4,000,000 and we'll have to see whether it's really benefit to SAP.
I was surprised to see that the Supervisory Board wasn't reduced right away to 12 members. First of all, we'll have to go on for one term of office with the 18 members. But you announced that in 2018, 2019, The next election will only have 12 Supervisory Board members. I was really surprised Mr. Plutner to see that the SE thing was not fitted out with a one level board because that would have matched You were very active role as the Supervisory Board Chairman.
Ladies and gentlemen, When the term of office of the new Board is over it's to 2018, 2019, we'll then have only 12 members. And Mr. Plutner, If I did my sums correctly, you'll be 74. I know you're very fit. You're very dynamic, A highly active Supervisory Board member, no doubt about that.
And I wish all of us that you remain in that position for a long time still. Yet sometimes we'll have to look forward. So let me ask you, have you Made sure that there will be a successor. Did you Prepare for a successor on the Supervisory Board of 2018 2019. Could it be that Jim Hargam and Snabe will then succeed you On the Supervisory Board of the new SAP SA, I think it would fit even though We would miss you very much Mr.
Neplaza at least I would. Ladies and gentlemen, at the end, let's look forward into the current fiscal year. What Are we expecting? I think the outlook is bright. From what we heard and saw SAP, Once again, we'll grow more than the IT industry as a whole.
And even If you slightly moved the margin goal for 2017, I think that's all right. We want to continue living in the fantastic IT country. And ladies and gentlemen, I think it's like this. There's still a lot of room at the top for the dividend €1.20 €1.30 And For the share price, I also see a lot of potential. Today, it's about €55 but I think €70 as the goal of the stock price that would indeed be milk and honey to us the shareholders of SAP for next year.
Thank you very much. Thank you very much. I can only agree your wish about the share price €70 Well, we'd all be happy including myself. But we cannot simply determine this. You can only create the preconditions for this to happen and we are working for it as hard as possible.
Let me read out the list of attendants. The capital stock amounting to 1,228,504,000 €232 broken down into the same number of shares. Of this 805,000,000 624,391 shares of the same number of votes are represented here. That corresponds to 65.74 percent of the capital stock. Top of that written results for 921,000 857 shares have been received.
In determining the outcome of the vote will They will later be added to the votes about the decisions By 806,000,000 for the of 146,248 stock shares are represented or represented by written votes that's 65.6 percent of the capital stock. The written votes will be included in the counting of votes. Mr. Lars LaBriga of SCS, the Schulzverdant Klein Auctioniere now has the floor. Chairman, ladies and gentlemen, I'm Lance Labrager.
My association is the Schulzke Mantra of Capitanarbreger. We represent those investors who are not small or minority shareholders. That's why the name was changed. For decades, we had a different name. I'm so enthusiastic that I can hardly understand how you added to the standard of your presentation.
This indeed is positive stresses that can have been the only prime mover. Incredible you see. I had to listen to the statements by the Chairman which had no contents whatsoever. I criticize them. Now let me start with you Professor Plutner.
Now You are in such an amiable mood today as you normally are only 2 hours after the meeting. You also explained how Mr. Hagermann Snave had to be won over. I understand your explanation why Mr. Apotheca had resigned.
You can do it in much less time and you did sell this time. Great. Ms. McDermott, there was real content in your presentation. I hate the marketing content admittedly, but I'll bear with them if you're trying to explain the business model.
This is what I want to hear. You'll recall my Statements in the past, which were devoid of any respect. Your speech had had been the worst of all DAC's listed company Chairman and I had listened to Mr. Ron Sommer. Mr.
McDermott, Formerly, we had pains listening to your presentation. But now welcome to the VACS figures, numbers, hard facts, Really great for anybody who loves SAP. Thank you. And the other item should go unnoticed that you Present the members of the Executive Board is an amount of rest given the fast rotation on the Board you have. You explained this great that you transmit this meeting is great.
Anyway, had you also added The fact that the Chairman of the Supervisory Board should move to the rostrum to present his report as I saw with Deutsche Telekom that would have been great and I would have shouted with enthusiasm while you continued speaking probably with the whole meeting. Now very good. You are under pressure and you Serve it. Customers of course want to know the way. You are in a change in a situation of change.
Customers Like certainty, you perhaps too staff may be unsure of what's going to happen. I represent shareholders but 4 years ago you showed a film where staff members said, I can feel it. And now they will say, I can feel it. A loss of confidence, Especially against the backdrop of the implementation the change you want to have more people on board after this change. Perhaps you could explain the press reports in the past.
What is going to be aligned? And what areas will you hire new people? And that Mr. Plattner in the interest of the company that and the backdrop also plays Hans Beckenbauer Criticizing the inertia of the team also adds to the unsure feeling. And then the investors, It's not just Oracle.
We have other companies as big mouth sales force said in 10 years We are far ahead of SAP also and company software. Well, that's what they say. And investors feel that You started fighting for the cloud, but you might lose that fight because your competitors are very big and very fast. So the whole thing is becoming serious. And at the General Annual Meeting, this Tends to inject more facts.
Great. Let's not wait until the end. You're fighting and this something I greatly appreciate. You are fighting and you are taking brave steps. Fantastic.
A Pay model which is about to expire, a model which pays and it's to be replaced by a new model That takes courage and it hurts. You take a risky step. I'm only a representative of the shareholder. I'm only responsible for corporate governance, but my impression is that you are moving in the right direction and that it might work. And now a few words about the agenda.
I have a difficult point, but let's first address the agenda in order to get it off my chest. The dividend is a bit lower than we as STK would ask for. But that's all right by the exception. It's the start up argument. You're now moving into an area where you haven't been working for decades past and you may need investment funds.
I think the shareholders we represent share that deal. SE, well that's not a bad idea, but of course This means that old corporate governance problems will be injected into the articles of corporation. Capital stock is too high. All the rights of the Chairman of the Supervisory Board limiting the time spent on each item on the agenda that's against the system. But we find the dividends The remuneration of Supervisory Board members is a criterion which wouldn't be used to express the variable remuneration.
We're against the variable share anyway, but the Supervisory Board can design its own remuneration. So we wouldn't agree with that, but We can only refuse. It's all right in general. Elections to the Supervisory Board, he will refuse to reelect 5 out of 9. It's different with Mr.
Snabe. But this accumulation of offices is the reason why we've just An active member still active operatively should not have more than 3 supervisory board positions. The top number of Well, retired members of the Supervisory Board who do this as their main job, it shouldn't be more than 5. The front runner Now works actively and holds 10 mandates. That's a bit too much.
Of course, these are the good ones. Let me address the row in the back. If you listen to these arguments, you are a good member of the Supervisory Board. You are wanted and you're a member of many of these sports, but still there should be a limit somewhere and this is the limit we'd like to see. Now why do we reject Mr.
Snabe? Not because he has too many offices. We find that the cooling off period was Not preserved. That's the formal reason. If you want to protect his know how, you could also agree To have him as a consultant, the typical method.
He may be paid well and adequately if you want to attract into your company. But the second reason is in the position of the Chairman of the Supervisory Board. Let me explain. The output of former Executive Board members carriers of hope has been very high, Although they remain friends of Professor Plutner, too many have left. Seen from the outside in abstract terms that might is reason to worry in a company.
The reliability is a source of trust The insider knowledge, I don't know how things go on. You can look at it from the outside and consider whether the Chairman of the Supervisory Board It's a sort of bulldozer moving in the right direction, but moving in that direction, Cutting things off right and left, I don't know. Maybe it's just bad HR policy. In both cases, the question comes to mind in abstract terms mind you, who will stop Hassel Plutnick should he Miss his goal. It's not going to happen.
I don't say it's going to happen, but we'll have to think along systematic lines. Anyway, nobody can do it who is obliged To be grateful to Professor Klapner for professional reasons as in the case of Mr. Snabe. We need people who are independent And who's out what standing seen outwardly Mr. Snabe may show that interiorly must enjoy half the reputation of Professor Plutner so that 2 of these candidates can join forces against him.
Well, these are abstract external observations. But if in this situation you ignore a cooling off period, I think It's really bad in this situation and we reject it. That I agree in terms of contents per fissile, that you are brave. Running the company in the right direction is what I said before just in case it should have been forgotten. Things don't become any easy because Doctor.
Brand's Doctor Brandt seen from the outside. Well, I experienced him more frequently also with a German audit inspection company When SAP SI was removed back into SAP, We spent hours and hours at an Annual General Meeting. Doctor. Brand always was very competent in what he did and said. And A last word, whenever I was about to despair about the answers which didn't convey any meaning by other Supervisory Board members.
Then Doctor. Brandt intervened that was at the last meeting and the one before. For this and also for his activities, which I can't judge personally, we owe him thanks as to all shareholders I'm sure. I didn't know how things going today. Normally when asked and asked and asked you invested 1,000,000,000 Those who listened to me for the first time went there that you invested 1,000,000,000 into the cloud.
And then I said, Explain please why this makes sense. And then the Executive Board said, companies are developing well the decision was all right For 1,000,000,000 mind you, this is almost like entertainment Cabaret. It can't be the shareholders who come here learn less about their company at this meeting than they could read in the local Economics section of any daily paper impossible. There was another ritual namely that Professor Plutner on the average 4 hours after the beginning of the meeting, took the floor and then answered in points of fact. Let's keep that.
This was great. Right. Professor Plutner, Mr. McDermott, dear Mr. McDermott, I think you walk and operate in the right direction.
I think the shareholders I'm representing want to believe that we are moving in the right direction. And one thing is certain, if you improve your products in the same way as you did your present today, we are right. Thank you very much.
Thank you very much, Lars Labrieger. Well, I'm sure we'll hear more From each other later on. Well, I've got a lot of time to get prepared for this and I will prepare mind you. Now may I ask the next speaker? It's going to be Hans Martin Buhlmann of Universal Investment, Gesellschaft Ladies and gentlemen, my name is Hans Martin Bulman.
So much is uncontested. I'm the Chairman of the VIP and I represent amongst others your company, but also others. And I represent around 500,000,000 shares today. Now you said you're going to prepare to answer the questions, which was deemed a good thing, then you actually tick off what I'm going to say about the SE. The SE is a good thing.
The European company Legal form is ex ante the right way to be for a company, which is active across borders. Now we heard about €1 of dividend. Now we have one Chairman of the Board, are we now going to get €2 dividend as the next proposal? That would be only logical. So please write it down.
And please, Mr. McDermott, don't forget that 2 to 1 will mean 1 to 2. Now why is it that last year the cash flow actually did go down A little bit. So maybe you could tell us about that because Hana actually learned To walk? No, actually Hannah can fly now.
Hannah is to be found on Cloud 7. And since Hane is exactly there and since that is so instrumental and in a company where Employees play an even greater part than in most other companies. I would already like to say thank you to The staff of 66,000 people, because the results you achieved last year and that's going to The subject for today notwithstanding the way it was presented. So we would like to say thank you to everybody Be it in Germany or in China, they are responsible for this performance. Goodwill is only half of the balance sheet total.
It's people who count. Well, we are supposed to elect members of the Supervisory Board. And these members are independent. This is what we can read somewhere. But the fact that they're not is in the heads and minds of everybody who thinks about corporate governance.
Everybody is clear about that. And it cannot be that everybody is independent by definition. We have to actually discuss these things on an individual basis. And we can't Just say, we want everybody to be independent and now they are because we want them to be. This is not enough.
And Whether industrious people are a good thing or a bad thing for a supervisory board, well opinions differ. Whether 3 mandates All the right thing are 30 opinions differ. We have Joseph Apps for example and opinions differ from him as well. We're going to elect the members of the Supervisory Board. But Mr.
Medan, is it really necessary for you to leave the airport for such It is certainly a question of friendship. And I'm only saying this by way of an example and not at personam. It's certainly a question of friendship. It is. But we also have to be rational about the evaluation.
So who is going to be the Chairman tomorrow? Mr. Plattner, of course, you are the father of the child. And we are not going to release you from The duties of fatherhood and even if your actions are ratified, you're still the father of the child, be it an independent or a dependent one, but at some point, even you must be given the opportunity of listening to a Chairman whenever that may be. And at that point, well, let me mention this issue of the cooling off period.
It's a good thing that Chairman of the Executive Board cannot Just like that changeover to the Supervisory Board for too long. It's been German practice for people to do so. And this is why we now have this law, which says it's generally not possible anymore. And that's a good thing, but it's also good to have this exception. And whether You are the 1st or the 2nd best exception to this rule.
I don't know Mr. Snabe, but I am sure that we are going to have A good example of an Executive Board member changing over to the Supervisory Board without being a Chairman of the Supervisory Board And that's certainly a good thing and we will support him in doing so. Now let me ask yet another question about the SE. In such a system of the European company. Of course, one single board may be set up where everybody sits and some people are actually working and others are making sure they do.
And the other option is to have a board of people working and another board monitoring the other board. And these 2 have interfaces between them. But When it comes to Harmony, you have to make sure that these interfaces are taken into account. Mr. Leukert, maybe I misunderstood you, but I heard you say That you said thank you to the Executive Board, but it's not true.
It wasn't the Executive Board who appointed you. It was the Supervisory Board. And we have to make sure that these interfaces and the boundaries between the organs also exist in the future. SAP is very much focused on Plattner's SAP. My dear Hasso Plattner, Ariba becomes an Alibaba of expectations.
The cloud replaces licenses And we'll now get revenues that are growing through Payments by many people around the world and they will only accumulate after some time. They imply less risk, but they will come at a later stage. So when are we going to hit the breakeven point? When is the sales revenue going to match that of revenues Through licenses, it's a hypothetical question, but it's an important one from a financial point of view. When are we going to achieve the license revenues quality and for how long are we going to be the number 1 in the Global Cloud Business.
Is it correct that revenues from maintenance will go down once we generate cloud revenues. And does that mean that 2017 is going to be the endpoint in growth of return? What is your target in the cloud business? Or is this just Being an Oracle in the cloud business, maybe you can tell us about your strategy in more detail. And one final question on HANA and the cloud business.
Is it actually simple selling a cloud? Because everybody who has HANA will basically get the cloud on top. And you would have to know exactly in that case how quickly your sales revenues would grow and how you would get there. And by the way, Mr. McDermott, 35% of revenue growth 35% margin.
And if that's not the case by 2017, how much of your compensation are you going to repay? Does Birov, by the way, do marketing in Brazil as well? I don't know him very well. So does he actually do marketing on behalf of SAP in Brazil as well? Mr.
Chairman, now If we do not sell licenses, but if we have the small scale revenue Instead, does the organization and our processes have to change as well? And if so, Is this process ongoing? Or is it only being prepared at this stage? Was this maybe the reason for the Supervisory Board to set up a new committee For personnel matters and organizational matters, you were trying to do that maybe Because you were going to earn more, but certainly not the case I'm sure. Or were you trying to discuss the share of women in your company as part of this committee or make sure that members of the executive board actually stay for a longer period of time than in the past.
And when members of the executive board finally leave and when they leave prematurely, They actually have to take something along leaving. And when they take something along, they usually find that money isn't too heavy to carry. So that's what they take. Now in the annual report, You can read that €6,000,000 in compensation were paid for Jim Hogermann Snabe. So the person leaving at among miscellaneous amounts.
And we also paid a fixed amount as a severance pay and these are minor amounts like €4,000,000 as we can read 2 pages afterwards, maybe you can elaborate on that. Is this probably a new compensation model that you forgot to put on the agenda. Speaking of compensation models, Now we're capital investors. So you're not just taking our capital from us the shareholders, but we also pass on capital and this is why we see there's item 7 on the agenda. Now venture capital.
So money we pay and maybe run a high risk With that and hopefully also high returns, is that your hobby? Or is that a strategy which you follow? And what is the track record that you've seen in the past Whenever we conclude such a company agreement, we should have asked that question beforehand. And speaking of questions, Skills of Africa. Well, you might see this as a preparation of Africa getting ready as a market for or are we supposed to understand this as charity activities?
What is the real reason? This is something you'll find on page 77 of the annual report. But unfortunately, we haven't got an answer to the question yet. Energy consumption is to go down. We need a lot of Energy because we're running servers.
Now when we're running servers and employ people, we need boxes to put this into. I'm speaking of houses and buildings. Now you're going to shift locations. The local press tells us today that locations are going to be closed down or relocated. And if you do that, you have to think about where it makes the most sense from an energy point of view And where it makes most sense to invest the energy and I'm told that there are big server farms in The eternal ice regions because they don't have to get cooled there anymore.
What about the CapEx? So the investment, some distributed across the various categories like people and on the other hand, server farms. So maybe you could give us some details about what you do with our money in this respect. And by the way, such a server is after all a risk, because if somebody drills into it, They can take everything out of it. So data security is an issue for us.
And now that we are discussing Individual persons on the Supervisory Board critically, wouldn't Edward Snowden be the best possible member on the Supervisory Board of a company like SAP. I've asked a similar question at a similar event recently and the Chairman said at the moment we don't have a vacancy. So you have to think about how you increase data security and not just speak about it, but actually reflect this in your supervisory Board of the company. In the U. S, of course, Edward Snowden would be something of a sales problem.
I can understand as much. In the United States, fear of data security is so great that we as SAP might have an advantage in not being American, But instead of being able of running servers elsewhere and not just in the U. S, so what is the actual effect we see. The world doesn't only consist of Waldorf and the U. S.
Of course. But as we heard, there's also China. Now if we invest €2,000,000,000 in order to get €1,000,000,000 in revenues, it might be easier to just keep the €2,000,000,000 so we don't have to have any revenues at all. So why don't you take a look at the time line and look into the future more, can you tell us how much you're actually going to sell in China? Because on page 95, You can read that Asia shows the greatest growth rates.
And The question could be about the supervisory board members. Can everybody speak Mandarin? Well, somebody can speak Mandarin. I heard that. Now the balance sheet of this company is very sound and stable.
So Mr. Brandt, we know as much. We redeemed €600,000,000 in the current year, how did you do that? Did you do refinancing? Did you maintain the balance sheet numbers at the same level as before by refinancing them.
And there's Goodwill as well. This is the value of the company is hardly tangible. It's worth 50 percent of the balance sheet or of the overall equity of shareholders. And that's quite a lot. And then The CEO tells me today, the acquisition of success will pay out.
Well, I asked myself is that really the case? Looking at the list, it says success factors in Corporation San Mateo, California that seems to be success. Loss 174,000,000 Now if that means that an investment pays off, then please Tell me why the loss of a company just acquired is supposed to be an advantage to me? Where Are you going to invest in the future? Now that brings us to Hybris.
Hybris is a relatively small company. And maybe it's wrong, but I heard it's 83% Growth rate in revenues. Now if you have as much on a continuing basis, you grow quickly. What is it we bought? There are these sales jewels or are these technical solutions that we've bought?
And again, euros 780,000,000 not everybody in this room has €780,000,000 at their disposal. But €780,000,000 in goodwill is what we have to Report on our balance sheet. That's what page 192 reads. On page 206, you say that this is Technology and €140,000,000 is customers and one thing is lacking here. So what is this number of €480,000,000 And then there's another very important topic.
It's not just money, but something that's particularly important in a company like this one. It's also The people that are being managed by you, Mr. Brand, You were looking after them. And in doing so, you looked after the most important parts of this company, capital and people or people and capital. The sequence doesn't matter.
But at any rate, you supervised The most important 2 most important factors of this company for a total of 13 years in the stock listed company, you always have to take a look at the stock price. I don't know if you can read this, but I think you can read it. Well, this line is marked. That's where Mr. Brandt came.
And if it wasn't for Lehman, it would have been A very clear trend. Mr. Brandt, this is your time. You are the financial conscience of this company. You are the rock of reliability for the capital market.
And now you are free to look after your family. Now it would be my wish that you have a share of company and that you're going to keep it because that means we're going to see each other again in years to come. So I also hope that you will see good health that you can have plenty of time to devote to your family and that you will enjoy working with SAP in the future. And I would only like to say thank you at this point. Thank you, Mr.
Brandt. Yes.
Schoen Danke, Hans Martin. Well, thank you very much, Mr. Hans Martin Buhlmann for your contribution, which has been full of commitment as usual. I now would like to ask Mr. Bernhard Kohler, who represents the Association of Mr.
Chairman, ladies and gentlemen, Unfortunately, probably I will not be as good an entertainer as the 2 previous speakers. My name is Bernhard Kohler and I represent those employees holding shares of the company. And of course, you can imagine that the financial aspects are not that relevant to us, I rather would like to talk about those matters that are related more to the employees. Nevertheless, of course, the things are connected, the product and the staff. And I'd like to start with the product strategy and the product.
Now we have heard a lot of new aspects about the cloud today and it has been said several times that with our move towards the cloud and towards the new product world of SAP, Many questions arise that relates to the staff and relates to the potential sales to be generated. Let me first of all once again repeat what you can find on page 258 of the annual report. Now here it says that the sales of the cloud portfolio are based upon the provision of cloud software, which is software customers use in the cloud and services related to this software including support, consulting and training, Because everybody will have a different view of what the cloud is. If you are a Deutsche Telekom customer, probably you have received their offer for your private cloud, but this is not what we at SAP are talking about. Now What's missing in that definition is one element which highlights what the SAP offer is.
Now with these sales, what is included there is also the provision and the operation of the infrastructure. And This is what our customers require on top of the software which they receive through the cloud. Now One thing which has not become very clear so far is who are our key competitors in this market. In the past, on this occasion, we always received some indications about The market share SAP is holding in its various activities and who our key competitors are. And therefore, it really would be interesting to know who our main competitors are, What the market shares are that we are holding in this segment and then we're providing cloud based software?
And what are the margins of our competitors? And what's our own margin? And how do we expect those margins to evolve. Now that model which has been presented to us According to which within 4 or 5 years 4 years, I think it was, the cloud based sales will reach the regular sales that we achieved from our traditional business. Now that's something which I think should be a bit more substantiated.
In order to achieve our goals, this has also been said before, it is, of course, also required to invest In Saint Leon Road, you can also experience this optically because this is where we are currently building a major computer center. So what are the required infrastructural investment of SAP in the next couple of years? And this includes the infrastructure, machine and equipment, but also potential takeovers for that purpose. Now that transformation towards the cloud not only entails a change of our license model, but also it means that the staff has to meet new requirements. I'm sure that you've read the press coverage during the last couple of days.
There have been various articles in some cases based upon On assumptions, SAP so far has been rather hesitant to confirm these numbers. Now there's a rumor about 1500 to 2 1500 employees who will be affected by this transformation of our business more towards the cloud business. Now we do not exactly know yet how that is to be handled. And I think this would be the right opportunity to give the employees at least a bit of an indication of what is supposed to happen in the months to come. So what does this change in our business need for our staff?
Will there be special training and further training offers For that specific change, will employees be moved from their traditional jobs towards new ones and how many people will be affected in general by job changes emanating from that transformation towards the cloud business. We have seen the expected cloud sales for the years to come. €2,000,000,000 is roughly the expected sales for the year 2015 generated by the cloud business. And what's the breakdown of the remaining €18,000,000,000 if the SAP sales in 2015 will amount to €20,000,000,000 Well, usually that is mainly generated by our standard business. However, this would also mean that this traditional business also would have to grow by about 10% If we are really to reach the total of €20,000,000,000 Bill McDermott said There will be growth.
But if you take a closer look at the annual report, then the growth rather Approximates rather 0 that is in the traditional business. So my question rather is, Which new products will allow us to achieve this 10% growth in our traditional business actually? And I'd like to repeat a question which I already raised at the same point on the same occasion last year. The USP of SAP, An important competitive edge has always been the integration of the business processes, which means the SAP processes cover all of the processes a company has to run. So my question once again is whether this office already available On the in the cloud, do we have any clients in this regard yet?
If not or if you do not have this integrated offer yet, Is there a plan to develop it? And when will it be available at the end of the day? Now Business by Design has been one of our hobby horses of the past. It has not even been mentioned today at all. It's hardly mentioned in the business report and the annual report either.
So once again my question, How many customers do we have for Business by Design? Did we attract any additional ones in 2,030? Will the product be further developed and maintained in the 1st place? What are the sales generated so far? And one important question for us, are there any risks based upon existing contracts we decide not to further develop that product.
If you look at the press coverage, you see that there are many partners who have programmed their own extensions. And of course, they very much rely on SAP's further development of the product. The question is, do we run any risks based upon existing contracts if we decide not to further develop that product? Now back to the key subject of staff. I already told you that we need some clarification regarding the cloud business.
And last year's statement made at the AGM, namely that no dedicated HR Director on the Executive Board level is to be appointed and that's something which we are not really happy with. We believe SAP would be well advised to actually designated a board member in charge of HR, because the employees represent the only production asset of the company. Of course, our customers are very important on top of that as well. And we have already said that Due to this dramatic development and dramatic rate of the development, the employees will also have to face key challenges in terms of further training and their specific commitment to new jobs. Now in spring, we heard from the media that there's going to be a global HR manager who is to be recruited.
At that time, we were a bit shocked initially because no further explanation was given about the final position of that person to be held within the company. Now fortunately, he was then nominated as a member of the Global Managing Board some time ago, we believe that this is the right step. And Stefan Ries who took over that position. We wish him all the best and good luck for the next couple of months to come. Considering the questions and issues he has to face in terms of transformation of the staff as well in the wake of the cloud transformation.
Now Bill McDermott briefly told us how employee engagement changed from 2012 to 2013. However, he didn't tell us how it had deteriorated from 2012 to 2013. Now during the last employee satisfaction survey, the employee engagement was on a was rather shrinking. And I remember very well when the board members promised that they would keep a close eye on this in order to make sure that the employee commitment comes back to the levels that we had been accustomed to in the past. And our question now is, Why do you think did the employee engagement decrease during the last employee survey?
And which actions do you intend to take to bring this employee engagement back to formal levels? And therefore, at this point, we also would like to ask the Supervisory Board whether it wouldn't make sense to take the subject of employee satisfaction and customer satisfaction and make it one of the targets for the of the short term variable compensation of the Board members. This would just Put a bit more emphasis on this target signaling that customer and employee is important not only shareholder satisfaction. Now this brings me to an aspect which has also been briefly touched upon before. On one hand, if you look at our annual report and articles in the media that the go to market and the rate of development have significantly accelerated during the last 3 to 4 years, which means you're faster in making new products available to customers and We're also faster in developing these new products.
That's why it's always getting more and more annoying to read Press articles about the cumbersome structure of SAP. So who benefits from these kind of comments? And because sometimes these are statements coming from our own and who benefits from that? And one might also ask what the reasons for this kind of cumbersome and sluggish attitude R, is it due to the employees? Because they of course they feel that the fingers are being pointed at them.
And the question is, which actions will the Board take in order to further accelerate the overall business and development rates of SAP? Me also comment on the votes to be taken. We will endorse the proposal For an SE conversion, although not all of the advantages that we have been given seem really relevant to us. However, it seems that the employees, representative bodies have already accepted and approved this kind of conversion, we will also endorse it. Now it's been said that the entire conversion will bear costs of about €4,000,000 And my question now is, is that all or are there any additional costs?
So what are the total costs of this conversion into an SE? Or Does this €4,000,000 really include everything already? Of course, From a corporate governance point of view, it's a bit of a problem to have Jim Hagenmans now be moving from the Executive Board into the Supervisory Board straight away. Nevertheless, we support that move and will fully endorse it because we feel that on the supervisory board, it's important also in the medium and long run to have SAP products and systems being represented by somebody who's got the internal know how. And that's why we believe that Mr.
Hagemann Snabe is the ideal person to fulfill that task. And we also would like to thank Werner Brandt for his hard work. Now the CFO is not always the employee's darling. Sometimes this looks like a natural contradiction. Nevertheless, and I can speak on my own personal experience, it is absolutely to say that Werner Brandt has always been a fair partner who has also always been willing to enter into a compromise.
And with his Absolutely friendly manner and his objective attitude. He's always been a good person to talk to. So Werner, thank you very much for also for supporting our staff and all the best for the future. And of course, we also would like to congratulate Luca Mucic on his appointment. And we hope that in the future, he will always be able to present Such excellent figures too as his predecessor did.
Thank you very much. Thank you very much, Mr. Bernhard Kohler. And we now continue with Mr. Karl Heinz Gunther.
Ladies and gentlemen, I apologize because this is the first time that I'm taking the floor at an AGM. I'd like to comment on this conversion of SAP into an SE. And It's a bit of a personal story I'd like to relate to you, which does not seem to be connected to SE. However, our tax authorities, they're really hard to understand. I own Vodafone shares.
Now that company outsourced or spun off part of its activities into new company, which is called Verizon. Now the share price of the Vodafone share decreased, but as a compensation, I received Verizon shares. Now adding it all up, still I suffered a loss. However, the German tax agency didn't think so. They say I have become richer due to the additional Verizon shares.
Therefore, I've got to add the you have to pay the additional taxes, church tax and so on and so forth. And my objection to that was rejected by the German finance and the tax authorities, but my objection was heavily rejected as well. And now I'd like to quote from the SAP Investor Brochure 2014. Now here it says, what are the tax implications of the conversion? And I like the first sentence.
Now we expect it says that the conversion of the company into an SE will not lead to any other further revenues, which means that neither German corporate tax have to be paid. Furthermore, SAP expects that the conversion does not lead to any Loss or gain for the shareholders, which would be subject to taxation. A PASE will be treated like a German joint stock company and is subject to the respective taxation. Now here's the point. If shareholders sell SAP SE shares, they will be treated in the same way as The sale of SAP AG shares.
Now I'd like to know the following. Do we have the guarantee that the date I purchased my old SAP AG shares also is the one which is considered my purchase date of the SAP SE. According to the old law, this conversion would not bear any tax obligations for me. But I know my guys had a tax authority. They will rather probably say that the date of purchase is the new date when my AG shares were converted into SE ones and then they will say that I would have to pay taxes on that.
So I hope that you are right and I hope that the German tax authorities will fully agree with you on that. Thank you. Thank you very much, Mr. Gunther. And this brings us to the last speaker in this round of questions.
And then we will start giving you the first couple of answers. And the next speaker is Mr. Verdi Ladies and gentlemen, on the Executive Board, the Supervisory Board, dear shareholders, I also apologize For my not so eloquent wording, Mr. Burding, well, it's his job. However, I'm only a shareholder holding a couple of shares.
And I try to explain things to other shareholders like I'm which various shareholder representatives may have forgotten to mention. For this reason, I'd like to thank Mr. Buhlmann, who really is doing an excellent job in this regard. However, I would especially like to thank the employees of SAP AG who've done an excellent job in 2013, which really has been the basis for the successful event we are currently holding. I also would like to thank all those employees who are working here at the AGM who are providing beverages and foods and who are organizing everything.
Thank you very much for that. Personally, I believe that there's not so much reason for us to thank the Executive Board and the Supervisory Board. A lot of gratitude has already been voiced. But I think the Board members, they earn so much money that this is enough of gratitude for them. Now as I told you before, I'm a small employee.
And for me, earning money is really still a very hard job. Now this brings me to the main aspect I'd like to discuss. And Mr. Bultmann already touched upon it. I'm surprised that others didn't follow along the same lines As well and I'm referring to Mr.
May Doran and that's why I'd like to add the one or the other aspect. Now I don't remember exactly the name of the speaker before Mr. Buhlmann, but I've got to admit I'm shocked. Well, He was absolutely happy he said. But on the other hand, I am shocked.
If I see the proposal to elect Mr. Maiden to the Supervisory Board, for me, this is a horror scenario. Well, and then I wonder Who was the one who thought that SAP would be well off with that gentleman? No. I've got nothing personal against Mr.
Maiden. However, he is really a tough turnaround guy in the industry. And now do we need somebody who's an expert in company turnarounds? Does SAP need that? Now my personal impression is Professor Plattner, you are the godfather of SAP.
And well, we've got that guy at Oracle. And similar to that, you are the one who is in charge. You are the one who's got the biggest influence. And therefore, it seems to me that it must have been you who had that great idea of proposing Mr. Miron.
Now let me give you my reasons. I'm sorry. I'm a bit nervous. Now please remember the time when Mr. Miron was the CEO of Deutsche Bahn, the German railway system.
Now he left behind a sheer disaster. Now what he's currently doing now in his new office as the boss for the new Berlin airport, well, that doesn't really look like a triumphant story to me either. And actually there's a lot of important criticism you can read about in the media. And If you've got a regular employee who wants to apply for a job with SAP, well, He's going to be really scrutinized. Maybe he even has to pass a suitability test.
And here we're talking about salaries of €10,000,000 €20,000 or maybe €50,000 And that employee doesn't even give him the chance to prove his or her worth. And by the way, it's a joke. He's already a member of the Supervisory Board. He's already there, Because it's almost for sure that he's going to be elected. And I think that's a shame.
And that's also the big disadvantage in the German Stock Corporation Act. That this opens the door to cronyism. One guy proposes his body to be elected and we the shareholders we cannot change that at all. Now then there's one more thing I'd like to add. Now this is a saying which we heard quite often at my own company.
In politics and in supervisory boards or in executive boards of a public listed company, Even failures cannot prevent the continuation of a career. And being a critical citizen, I feel that this is a disadvantage in politics because it goes to the detriment of democracy. And when we're talking about a publicly listed company, this goes to the detriment to the rights of the shareholders and goes to the detriment of capitalism in general. I would like to same I'd like to see the same strict selection procedure applied, which is also applied with a regular simple employee or trainee. And well, I'm still waiting for the representatives of the German Lawyers Association, Who at every AGM have asked for more women represented on the Executive Board and the Supervisory Board.
Mr. Maiden, you've heard the applause. The retail shareholders, they don't want to have you on the Supervisory Board. So maybe you withdraw your application. And thus, you would make room For a lady representing the German Female Lawyers Association because then you would have to met the expectations of that group as well.
Thank you very much for your attention.
Do we want to start answering? Well, yes. The first question is about the cloud, the product, competition, investments, etcetera. This is for Bill McDermott.
Yes. So the question is SAP is going through a period of transformation. Please would you explain to us how the changes in the revenue model will affect in the future, both for the current fiscal year as well as midterm 2017. Our medium term targets for 2017 already assume a gradual transition of our revenue model from onetime software license payments to the more subscription based revenues. For 2017, we expect an annual total revenue of at least €22,000,000,000 with total cloud revenue between €3,000,000,000 €3,500,000,000 and an operating margin of 35%.
Our cloud target depends on a compounded annual growth rate in our cloud business of about 35%. So let's compare the cloud growth rates 2013 and in the Q1 of 2014. In 2013, our cloud subscription revenue, Adjusted for acquisition effects grew roughly 32%. In quarter 1, 2014, we reported We believe this will increase growth in cloud subscription revenue in the next 4 years. We expect effects to be incremental and they will be minor in 2014.
We are committed to scaling our cloud business, that's for sure. We also expect that our highly profitable traditional on premise Business will keep growing. And as you've heard today, we are really moving the company to become the cloud company powered by HANA and enabling our customers to simplify everything so they can do anything. We believe that this strategy will enable us to further increase our profitability by 35% in 20 And 17. I got another one.
Yes. The next question is please tell us about your market share and position where you are not number 1, how are we doing The relevant market is defined as technology platform market, which is growing at a healthy rate driven by in memory database, mobile and cloud adoption. The technology platform market, excluding the relational database market, is expected to be an Approximately $78,000,000,000 market in 2018 based on data from IDC. SAP is currently number 4 in technology platform in the market, but we had the highest share gains among the top vendors year over year. In the technology platform market, Oracle is currently the largest share, about 1 third followed by IBM with 20%, Microsoft with 12% followed by SAP with 7%.
The overall market was fit from the strong momentum of HANA. What's interesting about SAP, We are the fastest growing database company out there. With regards to your question on expectations, Vahana, Customers in 2014, let me emphasize the SAP HANA technology has evolved from a real time database to a true in memory platform. SAP HANA now allows companies to radically simplify their IT infrastructure. In 2013, very interesting, we put our entire SAP business suite on SAP HANA.
And going forward, our solutions portfolio and innovations and that of our ecosystem will all be built upon HANA as the foundation. This is an excellent starting point for SAP HANA being the technology basis for all SAP applications. And on this basis, we expect a strong increase of HANA customer numbers in 2014, further building on our strong momentum from 2013. I also have the next question. Let me just make sure I got the right one for you here.
Okay. Security and data protection, the question is European or national cloud and to what extent has SAP benefited from this and data protection, which may be encouraged by Brussels. We fully support the goal of the European Union Commission to initiate and European Cloud Partnership and a fully functional EU market for cloud computing. However, we do not think this should limit the exchange of data with countries outside the EU provided that the requirements of EU data protection and security laws are complied with. Customers decide for SAP and SAP Cloud offerings because they know that their data is safe with us.
We are the trusted innovator. Next question. Which are the business areas where you already are number 1 and where do you need to catch up? We are clearly number 1 in we are number 4. We gave our view on both of these markets in the respective answers regarding cloud and database technology.
Question number 5. Nextiva. Okay. Can you please talk about your position versus your competitors There are 2 types of vendors in the cloud market, the pure play cloud players who provide subscription based cloud solutions only and companies that are expanding their offerings and moving their products to the cloud. Recently, we have seen more and more vendors enter the market who sell software in the cloud only.
Their revenue is growing rapidly and they're starting from a small base. Most of them focus on line of business applications such as salesforce.com's CRM solutions. The trend at the moment is for these companies to develop solutions for more lines of business and to partner with traditional software vendors. Traditional vendors are responding to market demands by offering based solutions. As we said earlier, we believe that SAP is leading this transition and will become the cloud company powered by SAP HANA.
The cloud market is estimated to be worth $24,500,000,000 And we have the 2nd largest share in that market, 4.5% after salesforce.com, which has 16.8%. Oracle has 4.3%. Having acquired SuccessFactors, We are now the market leader in cloud based human resource software and ahead of Oracle. And we are by far the market leader in Cloud based business commerce networks that includes SRM and procurement after our acquisition of Ariba. I do have the next question as well.
SAP does not only grow through its organic innovations such as HANA, but also through acquisitions. You acquired Hybris last year. Did Hybris meet your expectations? How does this fit to the whole product portfolio? The acquisition position SAP and Hybris, Now we're positioned to deliver the next generation e commerce platform on premise and in the cloud as enterprises around the world seek to optimize the customer experience for businesses and consumers across an ever growing number of delivery channels, devices and touch points.
The addition of Hybris' e Commerce platform together with SAP HANA and the social collaboration platform SAP Jam will give SAP a significant edge in delivering customer insight and seamless engagement across multiple channels. It will provide SAP with immediate leadership in the e commerce space, an increasingly important market that is redefining the customer experience across the growing number of channels. The e commerce industry is worth an estimated $37,000,000,000 today and is growing at a rate twice the rate of retail industry. Hybris in combination with SAP Cloud for Sales saw triple digit growth in software and cloud subscriptions and support revenue in the Q1 of 2014 as companies redefine customer engagement and retention and unlock new cross sell and up sell opportunities and They're doing this in real time. Next question.
How much does SAP plan to invest into organic growth and how much into acquisitions. Our strategy is centered on innovation as the main driver of growth. We will continue to invest in product development and technical innovations to enable us to innovate faster and increase the number of development projects and new products. The question is always, which innovation should we build ourselves And when would it be better to buy innovation? We don't believe that buying market share makes companies successful.
That's why we have a different acquisition than our competitors. Acquisition should complement our existing business and extend our product portfolio. They should enable us to better serve strategic markets and best meet our customers' needs. We want to achieve our growth targets by organically growing and by making select acquisitions. Next question.
This year, your acquisition strategy is about Fieldglass. Can you please give us some more background on Fieldglass? And how does this fit into your overall approach? Fieldglass is the leading provider of cloud solutions for procuring and managing Contingent labor and services. Contingent workforce is a large and fast growing market that represents 1 of the biggest and most poorly managed spend categories at most companies.
The acquisition is a great fit with both our HCM and business network. Companies can now collaboratively manage all their business needs, permanent employees, flexible workforce and goods and services all in the SAP cloud, major competitive differentiator. Contingent labor and statement of work services is a US3.3 trillion dollars high growth market. Companies are rapidly moving to more variable operating models that enable them to quickly dial up and down infrastructure, talent and expertise to accommodate changes in market dynamics, business needs and special projects. Contingent workforces are expected to grow nearly 30% over the next 3 years according to research.
Fieldglass is headquartered in Chicago with approximately 350 employees. Fieldglass is used in more than 100 countries in 16 different languages and is the current market leader in their space. Fieldglass also earned the highest vendor rating in Forrester's 2014 published report And their customers include great brands like GlaxoSmithKline, Johnson and Johnson, Monsanto and Rio Tinto. Next question. Please explain what you expect from the joint venture with China Telecom And what are your concrete expectations?
Is this joint venture just beginning? Is it a blueprint for further strategic partnerships in China? As mentioned earlier, we want to grow our business in China. To enter the Chinese market and quickly gain access to Chinese companies, we have to set up joint ventures with local enterprises. Of Chinese law mean that it is vital to establish joint ventures in the cloud business and in the telecom industry there.
Foreign companies operating in China are not permitted to offer Internet services from within that country. The licenses required are issued to Chinese companies only. That is why our joint venture called China Datacom With China Telecom's China Com Services in which SAP has a 28.3% holding is so important. The joint venture enables us to use the telecom licenses of our joint venture partner so that we can offer cloud services to the Chinese market. We offer cloud applications for HR, for instance, from China Telecoms Data Centers in China.
This is what we have to do to tap into the Chinese market. The joint venture is already profitable and growing in the double digit range. We expect that revenue from this joint venture will continue to grow, especially as the cloud business expands. We're open to new joint ventures, and we are watching this very exciting market with great interest. I'm finished with my segment.
Well, you haven't finished by long. Next question is for Ms. Biller Heineken. One question referred to acquisitions. In all the acquisitions you did over the past couple of years, I'd like to know What about the management of the companies acquired?
Do you handle this as well? And how you get it integrated into the group? As SAP in line with its acquisition strategy is interested in excellent technologies, which supplement our solutions, it's important to SAP to keep the staff inclusive of the management acquired and to further tap their know how for SAP. Within the integration phase, the respective top management of the acquired companies plays a decisive role in successful integration. A few executives later on accepted important functions in the SAP Group.
Others as customary in an integration decided for a career outside the company. Next question. What about the current status of going public? Why haven't we been listed with the SOP share in Hong Hai? We are still interested in listing in China because the Chinese capital market is one of the fastest growing capital markets worldwide which makes it very attractive to the SAP for that very reason.
We are engaged in a dialogue with the Chinese Stock Exchange Supervision and informed ourselves on the process required for listing in Shanghai. We haven't yet clarified the boundary conditions for listing of an international company such as SAP. So that Before such a listing can be considered specifically, we first have to define these framework conditions. Thus it's important for us For instance that an IFRS statement is accepted in English. The Chinese The exchange supervision isn't yet ready to give the green light for the international board and we will continue observing and then have to take a decision as to what's going to happen to this listing.
And the litigation with Versata, what's your assessment of the outcome of that court case. I'm sure you'll understand that at the present stage we cannot comment on the chances of success, Especially as this is handled by U. S. Courts, it's difficult to predict. But we have a lot of information in our annual report.
Then there was a fundamental question about litigation in the U. S. What's your track record? What's the success rate? How many Court cases have you won how many lost in the U.
S. In the past few years? Well, court cases cannot be judged like Soccer matches. And unfortunately the outcome of court case especially in the U. S.
Cannot be predicted reliably. But you can be sure that we will represent SAP's position to an optimum extent at any time. A detailed rundown of our ongoing court cases can be found in the annual report. A footnote, the Stanford University once had a Locker patent litigation in the U. S.
Between 2000 2014, 17.50 cases all told. SAP was involved in 14 t. Apple was 377 was at the top followed Microsoft with 279. You can see that against this backdrop as SAP, we aren't too badly off. Then you asked a question Relating to SE, SAP is going to become a European company.
I'm surprised that the Supervisory Board cannot be reduced to 12 members at the same time that will contain it with 18 members. And that the SE won't have a single tier board. I have a reply here, but this is a reply where the Chairman of the Supervisory Board must deliver, so I'll pass it on. Then I think I've answered your questions Ms. Bella Heinegger.
Mr. Plattner, you'll go on. Okay. Next question. You don't have an Executive Board member in charge of HR, but you said There was somebody on the management Merckham.
Let me include, do you want that person make responsible in Matters of HR, how do you want to handle that important subject? So far, Werner Brandt has been the Labor Director Responsible for HR in the Executive Board. Personnel and social matters will be an important problem on the Supervisory Board also for the future. So A member of the Executive Board will continue to be responsible for labor and social relations and be referred to as labor director. In the conversion of the SE, we'll stick to the scheme although it's not required.
This was defined in the agreement discussing what the special negotiation group. The appointment to the post is Subject to the approval by the Supervisory Board of the SAP SE. However, there is no intention in the near future to appoint an Executive Board member Exclusively acting for HR matters. The Executive Board with the approval of the Supervisory Board in May 2014 has appointed to the Global Managing Board Mr. Stefan Reiss, Head of Global HR.
He'll continue to run the HR organization and be a member of the Global Management Board and consult with the Executive Board. It's to be assumed that Stephan Reiss will report to the future Labour Director. The Committee for Personnel and Social Matters. What's the precise name? Personnel and Organization, that's it.
Well, we felt that in the Supervisory Board that in addition to Finance Technology and there's also the subject of HR enjoys the same importance. And this is why we set up a committee not in order to allow me to exert even more influence on the contrary. No, it was supposed to leave us enough time in the committee to discuss the important points of HR at organization and then make proposals Next question by Mr. You have only one executive board spokesman, the so called crown princess Well, left on the way. What about the top personnel at SAP?
Why doesn't it work the way we imagine? Or is it true? This is normal in the IT industry and you just fight the usual problems. Well, the most recent change in the Executive Board were due to personal decisions which we have to respect. We don't think it's a particular characteristic of SAP the IT industry.
We're convinced that the new colleagues on the SAP Executive Board and our Global Managing Board, whom we introduced today will Afford us an excellent position. Shai Ingasser not long ago was that 7 or 8 years ago he left because He found a better place and he has a high capital budget, which invested into the launch of the electric car he wanted to organize worldwide. It was obviously a more interesting matter than spending time at SAP on accounting and other software. Vishal here the situation is entirely different. SAP is in a process of transformation.
Christensen describes it in his publications about innovator's dilemma and disruptive innovation and sustainable innovation. He clearly exactly describes the situation. Read it up if you feel like it. Then you know about the situation of SAP. After 40 years, we must change skills and processes and attune to different values.
You heard it today. Different revenue stream in the cloud. We need different staff in the cloud. So we need the appropriate HR measures in SAP and we have to change processes. And one final sentence in the paper by Mr.
Christensen is, Companies have a hard time doing this and it causes stress. And there's no doubt that it's causing stress to SAP and that it is also causing stress to people on the Managing Board who have to design the development. And when family problems are added to this which I'm not going to dwell on but with which familiar stress can loom too large and then you have to take a decision. Is it worth having stress in a company like SAP And having stress in one's own area was one's own area more important as Vishal rightly felt. Nevertheless, I think we will be good friends also in the future.
I greatly regret his leaving us, but I can assure you and assure the shareholders that we are not in a good position, but a particularly good position. 3 top level staff members, managers of SAP, staff for many years and young people go to the U. S. 1 lady and 2 gentlemen and they will fill the appropriate positions there. Then the next question by Mr.
Rigeler Benedicher. It says that all members of the Supervisory Board proposed for reelection meet the independence definition. How do you define independence for these candidates? The answer. The Supervisory Board regularly checks on the efficiency of its activity.
And in this connection also whether a sufficient number of independent members in the sense of the German Corporate Governance Code So on board, according to the Clotis Supervisory Board member is not independent when it enjoys personal or business relations to the company its organs a controlling shareholder or an associated company which could give rise to a major and not temporary, but permanent conflict of interest. So the Vazalore Board members would not have their own function or consulting functions with major competitors of the company. This is why we especially examine which members of the supervisory board themselves or the companies in which they have high level position or in which they hold major interests have business relations with SAP. Our outcome was that there are such business relations that this business of SAP with these persons is organized At arm's length, we feel that these business transactions because of the limited scope and economic weight do not affect the independence of these members of the Supervisory Board and they do not imply a major More than temporary conflict of interest in the sense of corporate governance. Haven't we become Supervisory Board of the Year twice or for the second time this year?
Only once. So we were elected Supervisory Board of the only ones last year. Well, maybe we'll be elected again this year. Why didn't you mention that? Question of Mike.
Now he just whispered in my ear because I didn't know whether it's for the 2nd time. I thought it had been for the 2nd time, but alas it's not. We don't see any indication that there are conditions for individual Supervisory Board members which impair the independence of efficiency of activity. With respect to the availability and time of individual members of the Supervisory Board, This is documented by the practically complete attendance of Supervisory Board members in meetings of the body. I think only one member has not participated in one of the 6 meetings.
Well, I'll take the next two ones and then you go. SAP is now becoming a European company. I'm surprised that the supervisory board company reduced 12 in this you read it out. And I'm surprised that there wasn't a single Tier 1. The 18 members with the possibility of reducing the Board to 12 At the 2018 shareholders meeting effective as of 2019 was laid down an agreement of the participation of European staff and the NSA PSE.
This is a tailor made model tailored to the needs of the company which was created after detailed negotiations with in company management of the European staff and was approved by the Supervisory Board. SAP decided in favor of keeping the 2 tier organization because the model Prove to work in SAP AG already. Last one as of 20 eighteen-nineteen and the supervisor has only 12 members. You are in 24 no, no, I'm sorry. 74 years.
Mr. Plattner, Have you made sure that their successor in the 2018 2019 Supervisory Board, could it be that Jim Snabe will be your successor Chairman of the Supervisory Board in the advisory board in the new SAP SCE? Well, the question of planning for success in the Supervisory Board is very important And this Supervisory Board knows it. Right now for the term beginning in 2019 we have no plans. But we'll deal with the question in time and not now start a discussion about persons.
I've got the last question by Ms. Jelle Benner Heineken. This is the topic of Tomorrow Now. What is the current state of affairs? And when can we hope for an end?
The Tomorrow Now proceedings have been under appeal since September 2012. On 13th May 2014, we had the hearing before the appeal court when we hope to have a decision in the next few months. Then we come to Mr. Labrega. And I don't know whether first comment was just a comment or remark or a question.
But let me say that, of course, Mr. Labrega, I can go to the rostrum to give my report on behalf of the Supervisory Board. If you want that, please, I'd ask you for a round of applause, so I know that I'm going to do it from the Rostrum next year. Yes, well, that wasn't a real majority, was it? Now at least I'm not to do it here from the throne.
I'm going to do it over there next year and you'll just have to wait and see whether that's better for you or not. Okay. One question about who will stop Hasselbladner? Should he be Wrong at some point. Okay.
I am now deviating from the script that I was given. Well, the truth is not the real truth if there is such a thing philosophically speaking. It's not the one you can read in the press. I can assure you here and I may add that this is also A confirmation from a legal point of view that I all that I only intervene in SAP's business to a very limited extent. In addition to my function as A Chairman of the Supervisory Board.
I'm a Chief Software Advisor though and I fulfill this function and to the best of my knowledge and abilities and there are there cannot be too many of them since I'm so old already. I'll try to give advice to the company in that function. And it has worked well because for 10 years now, I've been a professor at an institute of an ordinary German university, namely Potsdam University. And with the number of PhD students I have, namely 15, I have a rich pool of people giving ideas to me, making me think and also of course Help me try to pass on those things that I deem important for the SAP. The Executive Board and Supervisory Board have given me a mandate to look after the topic of HANA in particular for 4 years now and the use of HANA and the standard products of SAP.
It was even the case that the development of HANA was my responsibility for years now. I was a project manager, but I don't have to do it anymore. The child can walk, but I am still a consultant when it comes to questions like the conversion of SAP products to HANA. We're witnessing a revolution. This is not a topic for an AGM, but SAP business for our customers.
If you're interested in more details, please feel free to visit us in Orlando Or visit the SAP Sapphire on the Internet, you will hear various presentations by Bill, by Bernd and by myself together with Clayton Christensen on that very subject namely disruptive and non disruptive innovation. I do not meddle into sales. I do not interfere with legal matters and such things, except when This is a responsibility of the Chairman of the Supervisory Board. And everybody who says otherwise is not telling the truth. And Mr.
LaBriga no that was Mr. Bullman, but never mind, I can summarize this at this point. And it may look differently sometimes. And this is due to the fact But I do feel I owe it to SAP to talk to the people there. Of course, you can't do that when You're not in the business anymore.
You do that at larger meetings or occasions like town hall meeting which we hold regularly and this is what I did. And I told SAP what I believe where we stand, what the risks are, what needs to be changed. For example, I only recently talked about what it means to do Innovations and the fact that most companies didn't manage to do it right. And I think SAP sends a good chance to do it right. Now So of course, we need to develop new skills because of the cloud, because of HANA processes must be changed as well.
You cannot deliver new software services every 1.5 years. It's not possible anymore. You have to be much quicker than that. And in the cloud, user friendliness is much more important than functionality. User friendliness comes first and only then comes functionality.
So over 40 years now, the paradigm was different at SAP. We need to change that. It's a shift of values. And when you talk to SAP employees like that and by the way I've got dozens of very positive confirming e mails after that and no negative e mail at all. There could have been some negative ones.
But the fact that there are employees at SAP, who obviously have time to just pass on the recording they did on their iPhone to the press directly and pick out things selectively. For example, relating to the very difficult aspect that Vishal Sikka is leaving the company. And this is definitely a roller coaster of the press. Now I said, It was a personal roller coaster with Vishal. It's not simple to take a decision After 13 years 8 years of project work revolving around the topic of Hana to say, well, I can't do this anymore.
I have other priorities. And then, Well, maybe not. How can we do things differently? That is a roller coaster. And to just quote me saying Platner produces rollercoasters at SAP or Platner coming up with new ideas all the time driving the company mad.
Well, I can only tell you that Plattner didn't do anything but Harnel for 7 years now outside SAP with the Plattner Institute at the University of Potsdam and within SAP when looking after the project of Hanlan conversion to Hanlan. This is the truth. Now it may not be So interesting to report on. It's maybe too normal. Yes well, but Plutner is not so extraordinary as you may think not an eccentric certainly running around the company, influencing the company wherever he doesn't have to do it and is not allowed to do it because the company is managed by the co CEOs and now just one of them, Bill McDermott.
And I assist them. I provide advice, but I have nothing to do in the things that the Executive Board is responsible for. And that's the truth and everything else Now who stops me? Well, I can only point out that on the Supervisory Board there is a critical and open atmosphere of discussion, you can rely on my colleagues to stop me if they believe that I'm about to make a mistake. Now if I didn't make any mistakes, no, certainly not.
I made a lot of mistakes, especially when I was a CEO or co CEO, I utterly regret those mistakes, but I can't change them now. Thank you. Mr. Labriga, you also asked a question About the press reports of the past, what about development of employees? In which areas do you plan to hire new employees?
Now for companies, we need to become simpler, more agile and quicker, Bill said it, So that working with SAP every day becomes easier to them. At the same time, we need to strengthen our innovation leadership in this quickly changing IT market. Our change into the cloud requires that we Win over additional external talent for SAP. This includes employees with a track record in innovation technologies like in memory technology and cloud computing. By the end of the year, we hope to have more SAP staff.
And at the beginning of the year, we're going to create new jobs around the world Now I think questions by Hans Martin Buhlmann, which were related to me. I hope that I already answered them in answering the previous questions. If that is not the case, please let me know, Mr. Borman? Maybe we'll get more answers, right?
Okay. So we don't want to sit around waiting. And this is why I would suggest we continue with the next speaker. It's Mr. Guido Bruni.
Guido Brunner.
Mr. Guido Brunner, please.
Okay. Done.
Right. I would then like To ask Mr. Rolf Nestle to the microphone. My name is Ralph Nestle. As it has been said, Ladies and gentlemen of the Executive Board and Supervisory Board, dear shareholders, Mr.
Plattner, I wanted to also speak about the tax issue of Well, the potential tax issue with the conversion of a stock corporation into an SE. Another gentleman earlier, Mr. Karl Heinz Guenter asked you this question. And I believe this might be a problem indeed. And I would like to ask you To answer this question because I believe it's a very important topic.
Next, people. Well, I wanted to speak about that in greater length. You said that You're not dictating things into the company, but of course it would be a good thing for SAP AG if Such losses like the loss of 4 people in just a Short period of time could be avoided. So much for my remarks about people. Then when was the last employee survey in your company?
Because this year, we're going to have a new employee survey. My question is the following. What are the changes? What is the consensus you gathered from the last employee survey. Now on the topic of margins, in 2011, You had a margin of 34.3 percent already.
And according to the annual report of 2013, The margin went down to 26%, but and this was a margin target of 35% 5 years ago already. This is what you said, Mr. Plattner. And now 2017, You said you believe you'll have a margin beyond 35%. And now that Oracle has a much better margin, this seems a necessity.
Now on the stock price, I can't just gloss over that Because the stock price development in April May was very poor indeed and the stock price dropped a lot. It would be a good thing if we if the future were rosier for the rest of the year. Now on the payout of 1% or rather €1 and this is something the previous speaker already mentioned. Well, the longer shares are in a portfolio, the more important dividends become. And this means that higher dividends should be a target for you.
Could you also give us more information on the topic of market shares, Oracle, IBM, Microsoft? Next item, what are the reserves you made for potential litigation? Then next topic Mr. Meydan. I also believe that the airport to give Mr.
Meydan enough to do and there's no success that he can show for himself yet. Now I also believe that he has enough on his plate in Berlin. And Berlin urgently needs success to make sure that the airport doesn't become more expensive still and costs are getting higher every year. Thank you very much for your attention. Right.
I want To state very clearly that the personal attacks to the member of the Supervisory Board Mr. Madon are not A good thing. They're not the right thing to do. I've known Hartmut Midon. For many years now since the early 70s when he was still with Norddeutsche Flukewerke in Bremen as an engineer.
And for many years now, we have worked together or known each other when he was with Heidelberger Druck or Sinen or with Deutsche Wann with the Berlin Airline as well and then with the airport. Now I am not an expert when it comes to the Berlin airport, but I go to Berlin very often by plane. And the disaster of the Berlin airport is not the works and the responsibility of Hartmut Medan. And everybody was laughing about the jug and the milk. He said it at some point And you blamed him for that because it's related to Mannheim.
But now starting a chase for such a supervisory board member is definitely not the right thing to do. And just imagine we had a member of the supervisory board like Deutsche Bank is going to have the future or other major German corporations where stocks are held by organizations or people abroad. And If we were to attack a member of the supervisory board in just the same way, it would be a total disaster. Now your opinion may be What it is relating to the person, but I can only tell you that Mr. Miron did an outstanding job and an impeccable job as a member of the Supervisory Board of SAP.
Thank you. Now let's come back to Mr. Guido Brunner, who Well, hello. First of all, I wanted to congratulate you on 42 years of successful entrepreneurship. What?
Why? Now wanted to say something about the business strategy. But before I do that, I wanted to raise a few critical points. Now Mr. Plattner, You may be very good when it comes to operations.
And still in some fields, you have very poor people in management and that At the very top, you know the presentation by Bill McDermott that I heard today didn't give us anything but Figures, what good is that? He should tell us where we're headed with SAP. This is what we want to hear. Now about your acquisitions. You bought business objects.
At the time, this was about buying customers. Now to this very day and that was Approximately 8 years ago, up until this very day, you didn't replace the web application designer in the BW. Then Sybase, it's an unwired platform and your engineers are just now trying to do this right. Now 2 years ago at the Annual General Meeting I asked a question about Ariba. And I would like to hear an answer to that question yet, because I don't think highly of that either.
Success factors. Well, you may argue about that, but we also heard a presentation today saying that success factors Didn't meet the expectations. So you need to reposition yourselves. When it comes to investors, I still believe that SAP is a good company, but you have a massive problem When it comes to explaining your business model to investors, how can it be that this doesn't work? In April, May, The stock price went down.
How can that be? Sales. Well, I believe SAP is selling itself. They don't need sales staff. Just recently, I wanted to buy an SAP license.
You know when I got called back? No, they're just saturated and they're lazy bots. They're just couch potatoes. Nobody is working. Now about the products.
With Business by Design, I don't know how many man years were invested in this project. May I interrupt at this point so that you know our sales also understands German. He's South African. Well, the new one is hopefully better than the old one. Well, the old one, but he understands German.
No. Be careful with the terms you use. Well, you have to find clear words about that. About the products, with Business by Design, you have a great product. Every technician you talk to at SAP will tell you that Business by Design is a great product.
You invested so many man years, maybe thousands of man years in that product, but it doesn't work in the market. You've got a cloud solution here That's going to replace R3. And the question I have to ask myself is, why does it get lost in some drawer? Why don't people discuss it? And then I wanted to say something on the company landscape right now.
I think Unity become the sample of the 21st century. Let me explain what I mean by this.
If you
take a look at the Fratzenburg and Google's office work, well, they have a massive data protection issue. The European Court of Justice now ruled that Entries need to be deleted, but they're not able to do that. And you have to see this as an opportunity. And of course, I agree with the previous speaker who said that Edward Snowden must Be a member of our Supervisory Board. You have to master the knowledge processes of the 21st century.
And when you think about acquisitions, Then you need to think about saying Twitter, these companies, but not these strange solutions that you're coming up with. And that was it basically. And now I Hope that you'll enjoy the rest of the AGM. Good luck. Can you give this to me?
The other spudrop Malmeda
Well, that was refreshing. And I really have to go to Google and Wikipedia and look up a couple of terms that were used right now. I'm not quite familiar with them, I have to say. Are we supposed to respond to this? Well, let me tell you one thing.
Otherwise, they won't let me. I don't think very highly of Ariba. Well, it's probably the most the cleverest thing we have at SAP, a network namely That handles a huge business volume, professional business volume. And the figures will show in due course that rebar together with Fieldglass on hand are in the cloud. It's always been on the cloud, but nevertheless.
So we'll show that it is a very important strategic course in our stables of SAP. And this is the view of the Supervisory Board. Now the next speaker is Mr. Patrick Nickel. Mr.
Chairman, ladies and gentlemen, Now we can be proud of the technological and financial successes of SAP AG despite The difficult surroundings. But let me mention a topic today, which is a different one. This is about health protection of SAP employees, the most important resource of the company. Mr. McDermott, in the last video you showed, you gave me a cue As to what I was going to say, you spoke about the successful use of SAP Solutions At Cancer Research Institute.
My name is Rainer Nickl, by the way, not Patrick. He is my son. And I'm Chairman of Pro Raufrai, the greatest nonsmokers association in Germany. And I've got four questions about the smoking rooms at SAP. Mr.
McDermott, you're from America and you may be familiar with other regulations pertaining to non smoking or smokers rather non smokers protection. But in Germany, we have something like smokers' rooms unfortunately. So my first question to Mr. McDermott And to Mr. Brandt as well is the following.
The SAP CEO also speaks about cost cutting measures in order to achieve the margin target. Now How does that fit in with what we could read in the press recently, namely that there are rumors about staff reductions and that there are also Smoker's rooms in many German and Swiss buildings of SAP, they have flat Some of them have this is a picture of one of them. This is what they look like. So my concrete question would be the following. Can you please tell me how many square meters All the smokers' facilities of SAP in the 3 countries, Germany, Switzerland and Austria, account for?
What are the annual costs for all smokers' rooms, including rent, operating costs, maintenance costs, replacement and repair, cleaning and personnel costs. And then I've got a second question. Also a question to Mr. McDermott. Now by invitation of SAP, the Head of Tobacco Control of the German Cancer Research Center, Ms.
Birgge Lange at the beginning of 2014 gave a presentation on smokers' rooms In front of the relevant people at SAP, this publicly accessible presentation and I've got it with me here. This is what it looks like. Gives scientific proof that smoking rooms a source of toxic fumes to all employees, especially those who need to be close to the smokers' rooms. Now this source of toxic fumes cannot be eliminated by remodeling the rooms, but only by shutting them. Now what are the implications that SAP derives from that in relation to the smoking rooms?
3rd question, also a question to Mr. McDermott. The cleaning ladies at SAP are required to clean all the smokers' rooms at SAP. Section 5 of the pertinent law in Germany said says that All employees must be protected against smoke. So maybe I assume you have regulations and agreements with the cleaning company, but there are complaints by cleaning ladies claiming that this article or this section is not being complied with.
So What is it that SAP wants to do in order to make sure that this section of the law is adhered to? Now after the financial disaster of tomorrow now, SAP will probably not run easily into a difficult financial situation or risky situation that may come to higher amounts of damage claims. 4th question to Mr. McDermott as well. We have a preliminary version of a press article entitled A lot of cold smoke at SAP Non smokers Protection.
This is a yet unpublished article which is supposed to be published. I've got this preliminary version with me. Now in this article, we can read that the smokers' rooms exist at SAP. And the disadvantages of the smokers' rooms are also being described in the article and that's certainly not a good image we get here Question to Mr. McDermott.
What about these highly toxic smokers' rooms? And how do they fit in With your statements visavispress saying that SAP is a modern company with green efforts and with environmental sustainability and employee health as their motto. And Let me end by giving the following recommendation to the Executive Board of SAP. Please close down all the smokers' rooms so that the highly toxic danger to the health of employees and cleaning staff are eliminated and to restore the image of SAP. And last Mr.
McDermott, As the Chairman of the Association, Pour Aufre, I would like to share with you our long standing experience in Non smokers protection, I would offer you to help you become a non smoking company, a smoke free company. If you're interested, I'm happy to give you my business card And here best practices on how to become a smoke free company. Thank you very much.
Well, I can only fully subscribe to what you have said. For many years, I have felt that within the regular buildings of companies, smoking should not be allowed. In the U. S, you are not even allowed to smoke in public space anymore, for example, in and Soccer Arenas. And I also think that the SAP Executive Board shares this view.
However, we've got co determination in Germany. And well, we also have got a Works Council in Germany. And We need the Works Council consent in that case. I think it was discussed already on the same occasion last year, but so far We haven't received the Works Council's approval. Now speaking on behalf of the Supervisory Board, I'll follow-up on your proposal and I recommend to the Executive Board to team up with you if you can help the Executive Board to persuade the Works Council.
Now all we've got here, you're absolutely right, is absolutely unacceptable. However, we've got employees in the company We've got their representative bodies who do not share this view. And therefore, we are happy about getting your advice. I think if you agree, we don't need to give you all of the details about the floor space of the smoking rooms and the costs and so on. Please accept my promise that as a supervisor of what we will try to remedy that and We will also report back to you before the next AGM in order to tell you whether we can bring this matter to a successful end.
You agree to that? Mr. Nickel, do you agree to that? The answer was yes, I agree. Thank you, says Hasso.
This brings us to Ms. Eva Schubel, Representing the German Female Lawyers Association. Thank you very much Mr. Chairman for being correct about the name of our association, the Deutsche Eurostinen Bund, Female Lawyers Association. My name is Eva Schubert And I work as a lawyer in Karlsruhe and I also hold an honorary office as the Vice President of the German Female Association.
We are well respected association with GAP 2,700 members. We all work on an honorary basis in order to achieve the goals ensured in our German constitution, namely giving the same rights to women. Women in executive positions In public service or in the private sector is something we've been focusing for many years. In our project, female shareholders ask for equal rights. Now Since 2010, we've when we launched that program, we've been attending AGMs regarding this matter.
In the last 4 years, we have attended thus more than 300 AGMs of 75 public listed companies including the 30 DAX Companies. On the 28th November 2013, We took stock of what we achieved so far in Berlin and we held a discussion with representatives, mainly female, from Private Industry and the Public Service. Now our analysis has shown that companies still do not feel that women should be better promoted to executive parties and especially supervisory boards have set themselves only minimum goals. The appropriate procedures to select suitable candidates are absolutely unsuitable. Our analysis has shown that in the last 3 years, Women on executive levels below the executive board and in all executive levels.
Now that number has been more or less stagnating. The annual increase is less than 1%. Now this is a shame considering the large number of excellently trained companies and that is also confirmed by the status report of the German DAX Companies and by a study published by the German Business Magazine. Now looking at your annual report, I have seen that within the technology industry, SAP considers itself a pioneer and equal rights for men and women. Now we will keep a close eye on your progress that you're making and we really hope that things will change on the Supervisory Board and Board because this time there are new three positions that had been vacant.
And once again, 3 gentlemen have been proposed for election. Now we will continue to attend AGMs in the years to come, but not only in Germany, but also in 12 member countries of the European Union. Because the European Commission promotes The project women's shareholders demand gender equality, which is a project of several European organizations, including the German Female Lawyers Association. We want to attend the AGMs of the Eurostox 50 Companies in the near future. Now with our campaign for equal riots of our association, we have significantly contributed to the German government Establishing an act in the future requiring a stronger share for women in corporate bodies.
Against this backdrop, I've got the following questions. The German coalition agreement requires for Publicly listed companies with full co determination that as of that a women's share of 30% is to be achieved on the boards of German companies. Otherwise, the positions have to remain vacant. Public tendering Certainly, we'll facilitate the selection process and will also ensure transparency for the criteria. Now how do you find the candidates for vacant positions on the Supervisory Board and Executive Board.
Secondly, publicly listed companies or companies with a clear coded determination will be required as of 2015 to establish binding targets for the increasing of the female share in the executive and supervisory boards and on other executive bodies and to present annual reports on this progress. How do you intend to implement this requirement? Thirdly, apart that the German coalition agreement also stipulates that companies have to take actions to improve the equality of women in the entire hierarchy of a company. How many female employees do you have in Germany on the 4 executive levels below the Board level? Please give us the absolute numbers and also the respective percentage for every executive level.
4th, Women do not promote do not benefit from promotions to top level positions. Last year, how many women in your company have been promoted the first and the second executive level below the executive board. Please give me the absolute number for both levels separately. And at the same time, I also would like to know How many men were promoted to such positions in the same period? 50.
What are the specific actions you do to identify female talents and to Promote them as well. And gee, I'm not referring to general promotion programs, for example, about kindergartens. Now are these sustainable actions, which means Will they be implemented and monitored continuously on the basis of a quality management system in order to apply corresponding adjustments if necessary? 6th question. Your personnel development programs, have you analyzed them as to whether they meet the modern requirements of a work life balance?
Please ensure that the persons taking personnel decisions do not apply unconscious prejudices Regarding male and female candidates for that purpose, for example, awareness trainings could be applied. Last question. It's mainly women working part time due to family reasons. How do you involve these women's working part time Into your personnel development campaigns, are there offers for men and women for a temporary reduction of their working time or to have it applied more flexibly, is there a promise to return to a full time employment if they once have switched part time employment? And if so, to what extent has been accepted by men and women in your company?
Thank you very much for listening and I'm looking forward to your answers. Thank you very much, Ms. Schuvel. The next speaker is Mr. Horst Schmitz.
Once again, Mr. Horst Schmitz, you've got the floor. If Mr. Switz is not present right now, let me continue with Mr. Michael Ruoff.
Mr. Chairman, ladies and gentlemen, I've got only a few questions and they apply to the agenda. Now in order to prepare for the contents of the agenda, I didn't receive anything in comparison in contrast to the good old times. Well, I then I found a copy of the annual report when I came here. However, what I didn't find was the annual report no, to be more precise, The approved annual financial statements of SAP AG.
Well and we have been asked to vote on these annual financial statements today. And I guess that most shareholders who have convened you today haven't seen that document either. I had the chance to look at your inspection copy here at the speakers' desk, But if all shareholders wanted to do so, then we would have a massive migration here to the speakers' desks. So please next year make sure that Copies of these annual financial statements are available at the entrance. Now if your answer is that this is something we can read on the Internet then this is not Acceptable for the shareholders.
I don't read anything on the Internet. Certainly not any reports maybe just an e mail here and there. So much for this. And this brings me to the litigation that has already been mentioned, especially in the U. S.
Now you say that it's difficult to put numbers behind that. I agree. Nevertheless, certainly you do have numbers which we the shareholders are interested in. That's why I'm inquiring about these numbers. The legal risks and damaged claims in the United States, but also worldwide.
Now what was the amount the total amount at the end of fiscal year 2013. And for better comparability, give us the same number for the previous year. However, those numbers which you can give us very specifically are the following ones. In 2013 and also for the sake of comparison in 2012, what were the lawyers and consulting costs, which SAP and the SAP group spent on dealing with these matters of litigation. That was my first question.
The first What I said before was just a wish actually. Then there's another question. Now what are the total costs of this Annual General Meeting and also The cost of last year's AGM. Now 2 weeks ago, I attended the AGM of Commerzbanken. Mr.
Blessing told us The cost of the AGM of Commerzbanken that came as a real shock to me. Thank you very much. And the next speaker is Ms. Barbara Grimberg. She says she's having lunch, quick lunch.
Ladies and gentlemen, Mr. Chairman, I think it's funny that they really told you, Myrbeton, that I had told the ladies at the speakers' desk that I will definitely come here, but that I'm having lunch first. It's funny that they told you exactly this way. Well, my name is Barbara Grinberg. I studied Business Management.
I also got my doctoral degree on that subject. Now your breakfast, the way you received this year was very generous and also diverse and was also top quality. That was really nice. Your lunch, which I have now enjoyed as well, was also very nice. It tasted good and was also quite rich.
Your free ticket for public transportation here in the Manheim area, well, that is really Very nice because it covers the entire region here, which is not really the case in my region where I'm coming from in North Australia. But There's also a couple of negative aspects I'd like to mention. Now several gentlemen left the Board. 1 of the previous speakers also already commented on this, but it seems there's only one new lady coming in and that's really sad. Now you've got a couple of ladies on board, But having more ladies up there would really make it nicer.
We've got women who are well qualified academically And they cannot want to take up such positions. Women with an academic background and with professional experience, However, can only take such positions successfully if they are giving the chance and are being nominated for such a position. I've been trying this for years myself, but I never succeeded. The gentlemen on the board already have got other additional jobs on the sides. The women don't.
So academically trained and skilled women really have to be given the chance because you have underlined repeatedly that your employee represent Your most important assets and your most important contributor to added value. Maybe your success would even be greater if you had more women on the board. One thing which is not really very positive is the new CEO, Mr. McDermott. Now he might be A very qualified IT and communications person, however, SAP is a German company.
And looking around at your counters, I have found out that you're offering also training programs for the German language. And therefore, Because actually it is really unacceptable To put it bluntly, you're a German company and Your AGMs in Germany are held in German. And then the CEO cannot really Address us in Germany and cannot properly understand everything we're saying in Germany. And this also means he will need an interpreter for every single matter and for every legal detail he wants to inquire about. For example, if he wants to find out what The German wording in the German commercial code on the Stock Corporation Act is or in other kinds of German acts, even for such simple matters interpreters will be required.
So mildly speaking, this is really unacceptable. Now there's one more thing I didn't like so much about the new Mr. CEO, namely the few facts which he presented. At other AGMs, more details on the balance sheet on the annual financial statements are presented, especially the equity capital ratio and the borrowed Capital ratio and then also the business activities and divisions are described and their shares of the revenues and profits and contribution margins. Now in the presentation of Mr.
CEO, we saw only 2 slides containing data and I Really didn't believe the data very much. On the one hand, there were data from the year 2010. Now that's ridiculous because this is a rapidly changing business and actually these are data which are 4 years old. And then a forecast for 2017 is also presented to us. That is not really highly remarkable and respectable.
Now all of the data should have been presented with at greater detail. Maybe you look at the presentations given by other CEOs of German or other international companies. Now on all of these matters I have discussed so far, you're certainly not the leader in innovation. Then you talked about your cloud. And well, during lunchtime, I also noticed that you are in the position of number 4, 5 or 6 in terms of the world market share.
Yes, that's something I can understand, because your cloud Well, I've heard about it under a different name. At that time it was called APS Applied Program System and that was already in the year 1999 or 2000. At that time, it was said that in the future, companies would not have to purchase the software anymore themselves And they would not have to run databases on their own service anymore, but that rather instead they could lease such services on a monthly basis. And in exchange, they would always get the latest updates and they would have international access to their data and that was already in the year 2000. So I think this is also maybe the point why you're only number 4, 5 or 6 on the world markets.
But there's a couple of more positive and negative aspects. Now there's one thing which I like about your company, which is of course strong in the IT or ITC business. So I like that I can still find you in the traditional telephone register with the old numbers of your sites and also with some of your service providers such as SAP consulting, finance, job offers or digital modules. Because many companies including Deutsche Telekom, well surprise, surprise you find You can't even find their entry anymore in their own telephone register, although they are the ones compiling the data. So You can find the telephone number of their headquarters.
However, if you want to enter into contact with a company, Then in some old outdated world, people will tend to Look up the telephone register or you've got it on a CD ROM and then you look for the company, you click on it and then you will have the entire postal address including the telephone number. Now the postal address can then also be simply copied into a sticker which you put onto your package. If on the other hand, you're looking for the details of other companies, you've got to click through the websites and maybe then on the 6th or 7th page at the bottom, you can find some data. Now I'd like to know how many shareholders actually registered for the Internet dialogue with you regarding the AGM in the years 2012, 20 13 in 2014. Now there's one more thing I really find regrettable and you should think about it and maybe also adjust your policy and also your compensation agreements, because these compensation agreements should also contain certain provisions saying that if there is no success for the company that no Success based compensation will be paid out either, which means the executives will then only receive their fixed compensation, Because the other 5 land ranked employees, they've got a work an employment contract based upon collective negotiations.
And of course, this is all just fixed compensation and they do not have any variable one. And just for the fixed compensation, they've got to work hard, work extra hours and so on and so forth. And executives, somehow they receive also There are very real compensation, although there's no success which can be proven at all. Now regarding the Supervisory Board, is there any Supervisory function supervising the efficiency of the Supervisory Board. So who keeps an eye on the Supervisory Board according on the basis of which criteria and how is the final assessment reached at the end of the day?
Now one thing I'd like to praise once again is Your decision to pay a dividend of €1 that's quite nice to have. And If all of the calculations have been done properly, then you have also generated significant profits namely €7,500,000,000 And €1,200,000,000 of this is paid out to the shareholders and the remaining €6,400,000,000 will be retained. Well, that's quite commendable to retain SEK 6,400,000,000 for future R and D. Well, maybe it's not that Praiseworthy because we also heard about some litigations and then other problems. So are these just provisions?
So if a dividend is paid, then this dividend should be 1 third or one fourth of the profits. Well, that's actually good. €7,500,000,000 €1,200,000,000 of that. Now Very roughly speaking, you could call it 1 third, which is paid out to the dividends. So therefore, my proposal is, if you really generated real profits, then you divide it by 3 or by 4, You reserve 1 third for new investment, which means 1 third should stay in the company for repairs, modernization, further development.
Then the second, third should be paid out to the shareholders, which you are roughly doing Because these shareholders now even they act in a somewhat arrogant way from time to time, Well, these shareholders are the ones one could call your employers. And then one more third should go to the employees for compensation for further training and so on and so forth. But this last 3rd should also include the Board compensation because they're also part of the staff. Or you could also divide it into 4 equal parts and you could say We break it down separately and we then also form provisions for any crisis or major capital investments. Because Please bear in mind, you're already sitting in the same boat, in the same corporate boat.
Now and how do you really act as a role model for the regular rank and file employees who receive a fixed compensation and have to deliver a good motivated performance without receiving any success based compensation, whereas the Board members receive performance based compensation sometimes only for being present. On the other hand, well, coming back to that Sitting in the same boat, well, the CEO as the captain, the Supervisory Board as the navigator and the team being the sailors setting the sales. Well, and if there's one setting the false course or heading for the False Harbor. Then the others well, no matter how much they work hard to set their sales, you will not be able to make any progress. So please bear in mind, in the true sense of the word, you're sitting in the same boat.
A disciplined board and an appropriate compensation strategy also is an important contribution to maintain Germany as a useful production site for a company because this is also part of Germany as a production side because the board compensation, which is often granted, although no real success has been achieved. Now this compensation also is one a cost item. And on the other hand, this also makes it a problem. And this is also regarding the shareholder value. Maybe all your consolidated results would look a bit better if you had more women on the board and not the men because the men as I said before, the men have got the numerous jobs on the sidelines.
And then sometimes, well people say, well, these additional jobs also produce synergistic effects, but you can also view it differently. On the one hand, it's time confusing. You cannot really be properly focused. And secondly, you might end up in conflicts of interest and That would then once again be the source of distraction. Please bear in mind, the true President of a group is The customer and the shareholder and the customer customers they are the employers of The Board members.
Now how many employees did you have in 2013, 2014? Now employees includes the blue collar and white collar workers, if you still have that outdated distinction. Now how many of them did you have in terms of temporary workers, in terms of workers under collective agreement, outside of the collective agreement? And this once again broken down into their numbers and their minimum and maximum gross salaries. Now in connection with the transformation of the bank code as part of the CPAP procedure, which had initially been scheduled for the beginning of the year, which then had been postponed.
Now what were your additional costs to integrate this into your own business processes? And on the other hand, What were the revenues you generated by introducing this with your company? How high was the value added taxes, Which you received on sales? And what is the value added tax that you paid on your purchases and please give us the absolute numbers and not only the percentage. Now this is something that one of the previous speakers also asked about.
What are the costs of this year's AGM and last year's AGM broken down into catering, public transportation tickets, security, rent, invitations and decoration. Now what is your total number of shareholders? Do you know that? How many of the shareholders have been invited? How many actually registered to come, how many have actually come here and how many guests do we have here today?
Apart from the committees, are there any advisory councils according to individual clusters, projects or technical subjects? What's the total number of these advisory councils? What's the number of their members? And what are the fees Paid out to the individual persons, what are your expenditures on research and development? What in general is the structure of R and D expenditures such as laboratories, staff, equipment, devices and so on and so forth.
How many purchase orders did you receive last year as software development orders? And how many of them did you reject? What is the number of improvement proposals presented by your employees? What is the number of improvement proposals submitted and implemented and what's the number of projects resulting from them and what's the total of savings generated or license revenues generated. How old was the oldest person which you recruited in 2013, 2014, what kind of employment contract did that person receive, A full time employment contract or a temporary employment contract, what position was that person Selected for.
Thank you very much for your attention. All the best for the future, but pleased with more women on the executive and supervisory board. Thank you. Thank you very much.
It's very simple. We have no advisory boards. Then Madam, balance sheet profit is not identical with annual surplus. The 7 point €5,000,000,000 is the profit carried forward according to the balance sheet. And the dividend is paid out of annual surplus which is listed in a different place of the annual report is clearly lower €2,500,000,000 And then you even have the number of paid out.
It's not too difficult with the Supervisory Board members and the AG. We still are and we were 4 out of 6 In VSE, if it were to be determined today after all questions have been answered, It will be 5 out of 18, 5 women out of 18 members. And everybody knows that when appointing new Supervisory Board members, I urgently look for women, but it's not that easy as I keep saying Every year when at my institute HPI we're looking for somebody with knowledge in computer science When out of 100 only 14% or 15% are female students and there won't be any more once They have been in the profession for a couple of years. And it's not that easy if you pick somebody goes out of the profession. And Supervisory Board members well they have to show their qualifications improve them in a different place.
Really it's not our fault. And I think it's superfluous for you To hop on the subject, we're in a very good position as far as this is concerned. And after 2016, Well, we shouldn't have invited another woman because only 1 third of the newcomers have to be women. 50% of the newcomers in our case are women. So well, that's all.
No, sorry. Let's now answer the questions And then we'll get the new answers right away by wire. Will you start? Well, I'll start with the questions you raised Mr. Buhlmann.
You said we had 2 CEOs and got €1 as a dividend. Now with 1 CEO, will we then get €2 as a dividend? That would be logical. Well, it's a strange thing about logic. I think even as a shareholder you can Julie, back to you as you know the key figures of the current year.
We simply took your suggestion on board balance sheet. Why did the cash flow drop a bit last year? The answer, out of current business in 2013, €3,820,000,000 were added to the finance unchanged. The increased burn from €193,000,000 to €2,300,000,000 that is the tax burden, The cash flow out of operations and then the receivables average days between the date of invoice and income of the payment 62 days, 3 days longer than in 2012. Your next question was when was the sales or what would the revenue be with cloud offerings as it were if the license income would be rated.
How do we get the license sales quality and have the earnings quality with the new structure? In today's speech by Mr. McDermott, a typical case was presented cloud versus on premise. The cloud model after 4 years will reach the same revenue and after 5 years also generate the same profit, which means we have additional profit potential from the 6th year on. As a result of our sound high margin core business, we decided to take the steps to the cloud Step by step.
When will you be number 1 in cloud worldwide? Well, as I explained, we are just now number 2 in cloud with 36,000,000 users. We have the largest user base in the cloud market. SAP positions itself on a clearly broader basis in this market With a dedicated offering of all solutions in the public or private clouds, we add to our product range by in house developments or other acquisitions such as Fieldglass referred to above. With our strategy To become the cloud company based on SAP and HANA, we are confident to win further market share.
Again on cloud, is it true that maintenance proceeds have to be reduced If we generate revenue through cloud is 2017 then the end of the line as far as return is concerned. What is the actual goal with respect to cloud? Well, customers acquire a used ride for loading down the subway from the Internet and using it. Contracts are signed for that which may combine the use of the license and maintenance. So this is shown in the P and L statement in the line of cloud sales subscription and support revenue.
Our maintenance revenue arises from the fact that customers in the on premise business have to acquire a maintenance contract in addition to the license they acquire. This is shown in the P and L statement Because of the high renewal rate of existing maintenance contracts, we assume that in the future further growth rates can be shown. As Bill said, we benefit of the fact that we continue to grow further both in the profitable core business and have high growth rates in the cloud business. Another question about cloud business. Is it simple to Sell the cloud.
Everybody who has HANA will be given 1 cloud on top. This would mean you would have to know exactly how fast revenue will rise and how you achieve that. The use model of clouds indeed facilitates the sets of software solutions because also all users can use them directly We are the cloud. SAP HANA is a real time database. We simplifies all the IT landscape.
It offers new possibilities to handle business processes. SAP HANA in the future will be part of every SAP solution, which means We will not share any separate expectations of revenue. Our expectations for 2014 2017 with regard to our cloud business are as follows. 2014, €950,000,000 to €1,000,000,000 in cloud subscription and support Revenue corrected for currency effects and non IFRS 2017 €3,000,000,000 to €3,500,000,000 revenue in business. You also talked about the remuneration model.
SAP is also And then the store company contract is to be authorized today under Item 7. So you are a risk or a venture capital donor is that a hobby or is it the strategy? What's been the success rate in the past? Venture capital activities are very important to us. SAP is pursuing a 2 track strategy.
On the one hand, investments help us To acquire extensive knowledge about new technologies, trends and companies and early on discover Market developments of strategic importance. Many innovations come from start up companies and can be tracked best by Investing into venture capital. On the other hand, our investments are made to expect to generate an attractive financial income. Spring Ventures so far with its investments had generated attractive financial earnings at comparable loan losses and has a very attractive portfolio of start up companies. The portfolio is highly diversified and thus ensures a considerable Confinement of Financial Risk.
The next topic is move of locations investments in energy savings, where is energy invested most meaningfully? After all, you hear of large silver farms in the region of eternal ice because they don't have to be cooled any longer. In the expansion of our clouds business, we also expand the number of locations of computer centers by the end of the year. This includes China, Australia, Russia, Canada, Mexico, India and Brazil. These locations follow the rising demand by our clients.
Indeed they do require special construction requirements in cooling systems. We use co locations and expand the equipment including cooling systems. We'll make sure that Computer Systems are supplied 100% renewable energies as we are firmly bound to sustainability principles. Next question, CapEx and Cloud Investments. How does it break down total investments into staff members IT and then in server farms and brickwork.
The SAP Computer Centers are the mainstays of cloud business of SAP inclusive of West Penn Enterprise Cloud and Cloud Solutions and solutions like including customers and SAP Cloud for HR. This year SAP has opened up 3 new computer centers in Sydney, Australia, Tokyo and Osaka, Japan. As part of the Open Ecosystem strategy, investments were made into existing Computer Centers by partners in Moscow where cloud solutions are to be hosted by SAP. Also the opening of further Computer centers in Brazil and Canada is planned for 2014. Data Security ranks at the top for SAP, which is while computer centers must meet all high data protection and safety standards.
SAP Worldwide runs its cloud solutions in 16 computer centers in the regions of EMEA, Europe, Middle East and Africa Middle and Eastern Europe, North America, China and Australia into which investments are being made continuously. Besides investments into computer centers, SAP invests into the further development and new development of our cloud and worldwide distribution. The integration of our on premise solutions plays an outstanding role in this regard to offer the customers integrated and comprehensive software solutions. The expansion of data centers as I said will be continued at a high rate and We'll hire more staff members in the cloud environment in order to expand our existing know how continuously. Then the question about the balance sheet which you considered very stable.
Euros 600,000,000 debt was repaid in this year. Was it repaid and the money is gone? Or did you extend The amount of credit by refinancing did you keep the balance sheet total at the same level by refinancing? In April 2014, the dual loan of €500,000,000 and a promissory note about €86,000,000 inclusive of interest was paid back according to plan. Payback was based on existing liquidity, so that this payback must cause the balance sheet total to be reduced.
This follows our practice of many years to reduce gross indebtedness Success Factors. Please explain why the loss of a company you just bought is to be a benefit. Well the loss you saw in the list of companies in which we had an interest is due to the sales in the cloud model. The sales come in on a pro rata basis per month, but the cost for developments must be paid in full immediately. More and more contracts are signed by SAP Worldwide so that the sales revenue is not any more achieved in SuccessFactors but for other company elsewhere.
That's one reason. We have a company in California, which bears all the development expense, But this is accounted for in other SAP or SuccessFactors companies which is borne out or not borne out rather by the annual accounts you saw. When do you invest into the future? Or will you invest into further holdings? Well, when buying other companies SAP, Once these solutions be complementary matching in corporate culture and showing an adequate price that applies to any acquisition irrespective of size.
Acquisitions upstream always take the questions for the right points in time, a suitable candidate and the fact whether the acquisition can generate innovation and added value for customers, shareholders and staff. Our strategy is based on innovation in all business areas as a key basis for our growth. In each case, it needs to be decided whether in house development or acquisition would be the most meaningful choice. Then you raised a question about Hybris. The goodwill of Hybris according to page 192 €780,000,000 on page 206, we explain €160,000,000 of this being technology €140,000,000 being customers.
Something's missing. What's the other €480,000,000 The goodwill of hybrids was set at €780,000,000 addition to the goodwill amounting to 700,000,000 €80,000,000 €167,000,000 were set for Technologies acquired £144,000,000 for Customer Relations. So this is not separate, but is added up and Results and the purchasing price were paid. The goodwill of €780,000,000 resulting from the acquisition of Hybris especially due to the expected synergies based on the changed customer requirements. I then have a last question of yours.
When we generate small sales, do we have to change our organization? The structure of the organization or the management if so is that underway or is it being prepared? Well, we explained this in our answers to similar questions. We speed up the transformation process of SAP In order to strengthen SAP's competitive position and become a cloud company, for this purpose we not only have to strengthen our cloud distribution model, But for instance also ensure that a customer has a permanent contract in the sales region in our global customer organization. For customers, we have to become more agile and faster served as the daily contacts with SAP become clearly easier.
That applies to us internally as well. Our leadership in innovation must be strengthened by further reinforcing our position in the quickly changing IT market. This means that duplication of work has to be reduced. The number of clients very small teams need to be reduced By merging teams and tightening up and streamlining hierarchies, our worldwide network has to be optimized by combining locations and closing down small locations. Those were the questions for me, Mr.
Chairman. Then let's go on Mr. Miron. Does it is it really possible for you to leave your airport for so long a time and staying with us? Answer to that Mr.
Middon because of his many years of management activity in various industries is a very important member of our Supervisory Board. We're happy that he takes the time to continue to work for us despite his commitment to the Berlin airport. Did you hear it? Once again, okay. Henceforth, who is going to be the Supervisory Board Chairman?
I'd like to know that also. It's me as long as I am Chairman of this Advisory Board and with respect to the Rights of the Advisory Board with respect to its internal organization. There are no specific plans for my successor. It's too early. In time before 2019, we'll deal with an important question.
Should I be unable to do so mentally, I'll speed up things of course. Mr. Hans Martin Bullman, next question. The Committee of Staff and Organization, Will you discuss quotas for men and women or even discuss the permanence of contracts of Executive Board members? Well that committee has nothing to do with the Presidential Committee which discusses the contracts of the Executive Board members.
The Presidential Committee and the Distribution by Gender. The Committee for HR and Organizational Question deals with fundamental changes of organization key personnel decisions at levels below management levels. Of course, diversity agenda from place of role the committee enables us to discuss the subject on the Supervisory Board level including especially the workers' bench together with other important topics before that committee. Is the change to plot the reason for the civil rights to set up a new committee for HR and organization? The Committee of Force HR and Organization deals with central personnel decisions fundamental organizational changes management double below the Executive Board.
Same thing I read about a minute ago. Of course, the comprehensive changes resulting from the disruptive innovation coming from the cloud and which we'll have to face have an impact also on processes on personnel and skills and need to be dealt with accordingly. Page 34, the annual report you can read that €6,000,000 of other remuneration was paid So Jim is now leaving. So you paid €6,000,000 for such trifles. The next page it says in the footnote But a fixed amount was paid as a severance pay.
2 pages on, it's another €4,000,000 you explain or is it a new remuneration model which you happen to forget in putting on the agenda? No, it's not. For Jim Hagemann Snabe, This amount under miscellaneous on page 34 of the annual report is an anticipated gross payment of his claim already earned to the share based remuneration of the ARICIO milestones plan tranches 20122013 within the existing pay model. That's what has been presented. This advance payment was agreed upon in the Supervisory Board in order to prevent conflicts with an activity in the Supervisory Board.
The amount other miscellaneous includes a gross payment of €2,200,000 for our shareholders of 2012 and a gross payment of €3,800,000 for our CEOs from 2013. Total amount of the 2012 tranche and the RCU milestone plan is €6,500,000 of which the amount of €4,300,000 was already shown in the annual report for 2012. This amount was also listed on page 35 of the 2013 Annual Report for Completeness' sake. And the last but one question by Mr. Boolman addressed to me.
Wouldn't Edward Snowden be The best born supervisory board member of SAP, yes. If we were to give up 1 third of our revenue in the VES, it would be a brilliant idea. So before seriously considering Mr. Snowden first the status of this person would have to be clarified. We don't know exactly where we can reach Mr.
Snowden or whether he would be able to leave Russia. Excellent answer, but mine wasn't bad either. Okay. Let's leave Mr. Snowden out of the picture.
Page 95 annual report. You can see that in Asia we have the highest growth rates. Hence the question can Does every supervisory board on we are supposed to elect Mandarin? Well, that's different. The gender quota and then knowing Mandarin and then you must be boss of an airport.
That's too much. Really? Is he? Yes. He's here.
It's really not that easy, Mr. Bullman. Mr. Bullman assumed that And the Supervisory Board will be able to do our business in Asia and the market there and assess it quite well without knowing Mandarin. And the Chinese are very diligent in learning English, which is how we can communicate.
And then
With questions from Mr. Bullman. Question is how big is your business in China? We do not report revenue for China separately in the revenue by region section of the annual report. China is in fact included in the Asia Pacific Japan region.
And both software and cloud subscription revenue increased by 20% in 2013. And interestingly, in the Q4, it impacted us greatly because it increased 40% as the economy improved there. So we are built for scale in China. And as we talked earlier, we aren't just focusing on our own involvement in China, but we're also building local partnerships to strengthen our presence and our leadership position. Next question, Skills of Africa, Page 70 In the annual report, should this be seen as preparing Africa as a growth market for SAP or is it a charity project?
What is the reason for this? Africa is a very high growth market for SAP. We are enjoying tremendous success there. So this pilot program was officially launched in May 2012 in Kenya, and it was officially kicked off in 2013 to support our growth ambitions. So it is not a charity project, it's based on growth.
And as part of the growth plan, other chapters will be opening up across the continent this year, including South Africa, Angola, Nigeria, to name a few. Next question. Will Mr. Beuthaf support you with regards to marketing in Brazil? I had such a great time meeting Oliver in New York City on a personal level.
He's just a truly class act, and I'm exceptionally proud that he's a brand ambassador for SAP. He really is helping us build the next generation innovation technology for the sports industry. And clearly, we do have an agreement with him as a brand ambassador. In addition, he will take public appearances on That will help the German national team's preparation for the 2014 World Cup in Brazil. We wish him the greatest of luck.
The next question is based upon the 35% margin. If the company doesn't hit the 35% margin, what happens to my personal compensation? Of course, my personal compensation correlates with the financial success of SAP and it's a major part of my compensation And of course, margin is part of the financial targets derived from the SAP strategy. So therefore, if we don't hit targets, it does directly impact my Today, I'll have a further target based upon learning more German. I'm working on it.
Got to have some fun together, right? Is the return on cloud investments actually at 35%? We have set the following goals for 2017, just to repeat them. We intend to achieve at least €22,000,000,000 in revenue as a company, €3,000,000,000 to €3,500,000,000 of those euros would come from the cloud, And we offered a blended operating margin rate at the 2017 target to date of 35%. It is true that the cloud comes in at a lower margin initially, but over time, we expect it to perform at margins commensurate with our core business.
Next question, on I have read that Hybris has an 80 had an 83% growth rate in revenue. What did we buy? Did we buy sales ideas or a technical solution? I'll tell you what we did buy. We bought the next generation omnichannelecommerce.
That's what we bought. So the addition of e commerce from Hybris together with HANA and the social collaboration platform called SAP Jam, We give a significant edge in delivering customer insights and a seamless engagement across multiple channels to our customers. I know firsthand In global boardrooms, the CEOs are very focused on the data of their consumer and the behaviors of those consumers and offering them real time propositions and also being able to fulfill in a supply chain like SAP's gives us a competitive differentiator that no other software company in the world has. So this is a next generation CRM platform and it really has given SAP not just growth, but real competitive advantage.
I have to apologize. I was a bit premature in answering your question I thought I could do it as a Supervisory Board Chairman namely the changes in my Supervisory Board were incomplete. The labor member Inge Ville has left SAP. And the change between AG and the planned situation of SE is no longer a member of the SE Supervisory Board. So it's only 4 women out of 18.
So the 50% thing didn't wasn't right either. Sorry. I should have followed the advice by my colleagues and wait for the answer to be presented in writing. That would have been right. Sorry, the numbers were wrong.
Now before going on answering, 2 other Gentlemen ask for the floor. Mr. Horst Schmitz, could you please step up to the microphone?
No activities here. Oh, he's coming. Is he? Well, somebody else there, another one. No, it's a different story.
Anyway, Manfred Guttinger is next. May I ask you to come forward, Manfred Gutzinger, please. My name is Manfred Goetzinger. I would like to say hello to Mr. Plattner and the other members of the Executive Board and Supervisory Board and all of you as our Shareholders.
Mr. Plattner, I owe you a great deal of respect. I know What you do for SAP, I know it's from personal experience when you started to develop ABAP first. But just now you made a mistake and I was a bit disappointed. And it related to the distinction between the annual surplus and the balance sheet numbers.
You're correct, of course, there is a difference here and I would like to elaborate on it. But your wrong statement was that the dividend is not paid from the balance sheet profit and not from the annual surplus. The annual surplus reflects the Actual performance of the company with operating results, for example, financial result used to be called a neutral result, Then taxes are shown as well. And what remains is an annual profit or loss. And this annual profit is now being changed.
For example, there is a profit carried forward to the Next year €5,000,000 then the annual surplus of the AG €2,500,000 So for 2013, more concretely put, we have a balance sheet profit of around €7,500,000,000 And I was referring to 1,000,000,000 as well. Well, you make mistakes as well said Mr. Plattner. Anyway, I'm talking about 1,000,000,000 Not million figures here. Excuse me.
I think we can be brief here. My statement related to the fact that we had a payout ratio. The question was about the payout ratio of 25% or 30%. But you agree that the dividend is based on the balance sheet profit? Yes, of course, but the payout ratio is related to the annual surplus.
Well, you were wrong here. I wanted to correct you. Okay. Well, delete it from the minutes. That's Mr.
Klotber. My question is the following. The annual profit of the AG amounts to around €2,500,000,000 Now when you take a look at the consolidated financial statements, you'll see that there is A bottom line result of €2,800,000,000 roughly. So my question is the following. What about the difference?
Is it because of the different valuation criteria, namely that you report according to the German regulations or The others, so according to international financial reporting standards or international accounting standards Rather, you have to apply the fair value principle. So my question is, Where does it come from? Is it because the valuation principles differ? So The writing off the lower of cost of market, namely the German regulations or on the other hand, the international regulations applying the fair value principles. 3rd question, if SAP AG is to be converted into an SE.
I assume that as usual the financial statements According to German law, as we see here in this very brief booklet, we should be accessible to everybody. That is true. Is this going to be eliminated? Or are we going to see it optionally as well? Is this going to be something that will be published as well?
Or are we only going to get accounting according to the fair value principles or according to the international accounting standards. And the fair value by the way from a scientific point of view cannot be proven, but the Acquisition accounting is a value that can be traced back. So I believe as do many other experts that But that who is active in the United States and in Germany should know both reporting principles. And everybody knows that the fair value principle is suitable to use manipulations. So these were my remarks and I would like to ask you to answer the questions that I put forward.
Thank you very much, Mr. Gertzinger. Of course, your questions are going to be answered.
Is Mr.
Schmitz here now? No. Right. And then we've got Gerd Virgen again. You would like to take the floor again.
Thank you very much for giving me the opportunity to speak again. Mr. Plutner, well, I think the accuracy of my statements were confirmed by you in your response, Mr. Plattner that was one thing. Now many people have left, so it doesn't really make sense to say anything about this because you don't get any applause anymore.
But I'm not here for the applause. I'm just here in order to show the small shareholders what is actually going on here. Now, I wanted to say the following. Maybe you know that Albert Einstein once said that the universe and the stupidity of people is limitless, But I'm not so sure about the former. Now let me just adapt this a little bit saying the universe and the arrogance of the members of The boards and the stupidity of shareholders is limitless, right?
Well, That's just joking of course. Well, Mr. Plattner, so please don't get me wrong if I criticize you a little bit, but I really compare you, but this is not criticism, mind you, to the former head of the Apple Corporation, but the difference is, of course, that she's still alive. Now, I'm referring to the general attitude and charm you have and the course you steer at SAP, I think many people will Concur with me here. Now one final item that I'd wanted to raise again about one of the previous speakers, I think who said that he was a member of SAP as a company and also representative of the shareholders at SAP.
He said, I believe that The SAP staff get the feeling that they're not being listened to. Now I get the feeling that this is because within the group there's no such thing as open communication. Maybe you could look into that. And as far as the group is concerned, I believe people are money and you should actually step up your efforts here. Thank you very much.
Thank you very much, Mr. Virgen, but I still didn't get your question. You said something and said, I don't like it, But it's not positive or something like that, but I didn't hear a question. And I don't think I interrupted you, did I? No.
I just said that the statement by various shareholders were just put aside by you and your statement is correct. And what I was trying to say is that your response basically proved that my statement was right. Do you understand? Not quite. Was that something positive now or Yes, yes.
Of course, you're right at any rate. Well, we don't have to argue about that. Now I think I have understood. And you said something about jobs and Plattner. No, Mr.
Plattner, to put it bluntly, You are not so much interested in the fact that the shareholders and there were a number of speakers here who are shareholders, who do not like Mr. Meydon as a member of the Board. Now if we would just to summarize this, as I said, I've got nothing against Mr. Medon myself, but stock prices of former companies in which Mr. Maidon worked show a very clear tendency.
And I would imagine that The SAP stock price could go towards €50 would be a shame, but I've only got 4 shares anyway. So I could live with it. Well, I can assure you that Mr. Meydan is not on the Executive Board of SAP. So the operating business is being managed by the Executive Board.
There's not so much disagreement between the 2 of us anyway. So first question, We're going to answer the first question. No. All right.
So the first question is to what extent does SAP need to invest in infrastructure in the cloud area in order to be successful? How high are those costs expected in the coming years, both with regards to infrastructure inventory, but also personnel and acquisitions? Since 2010, we've increased our focus on innovation and our strong growth shows this is the right approach. We will continue pursuing this strategy to be the cloud company powered by HANA. And as we've mentioned, we'll continue to invest in data centers and hire more people so that we gain even greater global expertise.
This is important if we're to remain competitive in a rapidly changing market. So we plan to increase our workforce this year and our 2014 2017 targets reflect the investments that we need to make. Next question. I'm just looking for the English version of it. Okay.
Cloud and transition into a new product world, who are the main competitors in this market? What's your market share in that cloud and what are the margins of the competitors? And your own margins, what will be the margin development in the future? There are 2 types of vendors in the cloud market and they are the pure cloud players who provide subscription based pricing for cloud solutions only and companies that are expanding their offering by moving their core products into the cloud. Recent years have been more and more vendors entering the market who sell software in the cloud only And their revenues are growing fast because they started from a very small base and most of them focus on line of business applications such as Salesforce for CRM.
The trend at the moment is for these companies to develop solutions for more lines of business and to partner with traditional software vendors. The traditional vendors are responding to the market demands by offering cloud based solutions. As we said earlier, we believe that SAP will win this transition by becoming the cloud company powered by HANA. The cloud market is a $24,500,000,000 market And we have the 2nd largest share with 4.5 percent of that market after salesforce.com with 16.8. Oracle has 4.3.
Most of the cloud competitors are not profitable. Having acquired SuccessFactors, we're now the market leader in cloud based Human Resource Software and we are ahead of Oracle. And we're far ahead of most and by Most measures the market leader in lots of categories, including definitely the market leader for cloud based business commerce networks in the area of SRM and procurement after the acquisition of Ariba. Our cloud business has the potential to become as profitable or even more so than our on premise business as we scale the cloud over the next years. Next question.
What will happen in the coming months? What does the transition mean for your employees? Are there Are there corresponding offers and how many employees will be affected? We are accelerating the transformation at SAP to strengthen our competitive position and become the cloud company. To do this, not only do we have to strengthen cloud business model, but we must have one face to the customer in our global customer organization.
So therefore, we have become simpler and faster and more agile, and we're making it easy for our customers to do business with us, We, as for an example, had 150 separate development locations, many of them without any critical mass, and that's too much. So we have to strengthen our global network and stop redundancies in our company. That's all part of our simplicity Messaging. We will help affected employees to find career opportunities inside of SAP or externally If they apply for new opportunities with skills and experiences required for these positions, we are being extraordinarily fair with our employees. That was a top priority in thinking through the redesign of SAP.
Our transition to the cloud requires that we also attract the top talent in the world and we will as a true global market leader. And therefore, you should expect us to have more jobs, not less as we move the company forward. Next question. With regards to your move to the cloud, we heard that this affects 15,000 to 2000 employees. We don't know yet which locations are affected and how you'll handle this.
Today, you have an opportunity to give your employees an idea which plans you have in mind. We commented on this topic already in an earlier answer In question number 53 and I also touched on it just a moment ago. You mentioned that your $1,000,000,000 if you assume that the total revenue will hit around $20,000,000,000 in 2015. The rest will come from our classic on premise business. This still remains the biggest slice.
And from recurring support revenue, that is the biggest of all slices, followed by software and a smaller piece in professional services. All of them add up to €20,000,000,000 thereabouts. Next question. It seems that the growth in your on premise business, I. E, your normal license business is trending towards 0.
With which new products do you expect to reach the expected $2,000,000,000 in the cloud? Let me clearly state that we continue to expect growth in our core business on premise. Our cloud business also will however grow much faster. And today, SAP offers one of the most comprehensive cloud portfolios on the market, very exciting, And we're evolving our entire product category to offer the deployment option of cloud for our customers, we can simplify the consumption for them. Offering span areas such as cloud applications, business networks, thanks to Ariba and Fieldglass, Cloud Platforms.
In addition, we offer our customers a choice of different cloud deployments to fit their business needs, such as public or private cloud models. The SAP cloud powered by SAP HANA, particularly the SAP HANA Enterprise Cloud will be very fast to grow and the HANA Cloud Platform is also a development being offered as a service. They call that in the industry platform as a service. SAP supports a hybrid model, allowing customers to integrate new cloud services with their on premise applications. Customers really like knowing that they have choice with SAP.
We deliver these solutions through the cloud as a service. We call this software as a service and some of the names that you'll be familiar with include Success and of course, our Cloud Suite. The next question, At last year's AGM, I asked about SAP's unique selling proposition. SAP's advantage is the so called integration of business processes of a company. When do you expect this offering to be available in the cloud?
Do you already have customers? If not available yet, is it plan to develop such an integrated offering and when will it be available? Customers absolutely want The richness of the SAP Business Suite, combine this with flexibility, user experience and a rapid pace of innovation In the cloud, you then have a robust HANA Enterprise Cloud Service and this offers all the richness of the SAP Business Suite, the SAP Business Warehouse and the SAP HANA platform and you can get all of this also on a subscription model. Customers like McLaren and Levi Strauss as an example are example of our hybrid customers And they're innovating with us in a highly non disruptive way, which is truly exciting. We have more than 15 1,000 professionals in several delivery centers across the globe, SAP Services will help migrate customers to SAP HANA Enterprise Cloud, offering more simplicity for the customer to run their business and more speed of execution so they can win in the market.
That's why we're here. Next question. On business by design, how many customers do you have? How many new customers How much revenue did you achieve? Are you continuing to sell, develop and maintain the product?
And how big are the risks from existing contracts if the product is not developed further? A key success factor for all SAP solutions will be a uniform innovation platform. So we're concentrating 1st and foremost on our SAP HANA Cloud Platform, which we aim to make the platform for all enterprise applications in the cloud. We have an opportunity to use SAP Business by Design innovations on it and intend to do so giving customers the full benefit of the only true in memory cloud platform in the world. We and our partners will continue selling SAP Business by Design in the future And our partners will continue developing functions for our applications, which SAP will be supporting.
Money our partners and customers have invested is not wasted and no current contracts are at risk. In light of our much expanded cloud offering, we do not disclose solution by solution revenue. SAP by And that just shows how our offering covers customers of all sizes. Our next question. Even, let's see here.
What do you think is the reason that the employee engagement has been declined According to the last people survey and what do you intend to do to increase it again and keep it stable long term? Even if we saw a slight decline in the employee engagement index year over year from 2012 to 2013, the 2013 score of 77% is still in the target corridor that we outlined in our 2010 to 2015 journey. We still stick to our ambitions to reach level engagement of 82% by 2015. The decline in engagement had 2 strong observations associated with it. In September 2013, We conducted a survey with our employees.
Some said they were uncertain about our strategy. The second was despite huge efforts to create efficient processes in SAP and efficient structures, The employees perceived back then that we're not where we want to be, which is yet another reason why we keep reinforcing How we have to simplify this company. The Board revised the results thoroughly. We looked at everything and we took these results as a mandate for change. We have a well elaborated upon plan that's been communicated to the employees, including A refresh of our strategy, which we've highlighted here today for you.
Up to now, we are continuously monitoring the adoption of that refresh strategy. We see in the latest results of this monitoring, which we use SAP Jam, which is our social networking platform to get real time feedback that our employees overwhelmingly understand the refresh strategy and more importantly are totally committed to contributing to it. This quarter we're heavily focusing on translating what that means to the employees in their day to day work life. Again, I reiterate my own personal excitement and that of Werner's, of course, to have Stephane Rees leading the Human Resource department going forward. So in order to address these process topics, We are focused on simplification as a Board and we are also focused on simplifying everything for our customers.
So the market message should really help our employees get it. With these two measures, we're very confident to increase the level of engagement in 2014 and beyond.
Well, dear. Michel Noche Anew Frager from Bernard Koller.
A question by Bernard Koller. It was said that the SE conversion would cost a certain amount of money. Is that Everything what will the conversion cost as a whole. So what is the total cost of conversion? We believe that it's going to €4,000,000 all in all.
This includes all the costs that are incurred in connection with the conversion. We do not expect other costs to be incurred by the conversion. Right. One more question About the development speed and go to market, so the innovation speed going up in the past 3 years. So this is why it seems strange that you have to read in the press that the organization of the SAP is very sluggish.
What sense does it make to publish this in the press also from an SAP point of view? What good does it do? And why don't we ask ourselves the question? What the reason for this sluggishness is? Is it because of our staff?
And what measures are planned right now by the Executive Board? There are various answers to this question. First of all, any statements relating to my person within the SAP being made in meetings are passed on to the press directly. And if that's the case, any connection between the Supervisory Board and the staff is no longer possible. And you can't just sit there and say nothing.
Doesn't make any sense. And if you're not allowed as a Chairman of the Supervisory Board to say that There might be risks for the company and the staff should actually use Google in order to inform themselves to see what NetSuite is doing versus Business by Design or Workday versus SAP. Workday just said that they're having weekly deliveries of software. Now there's a difference in magnitude here. Now let me come back to disruptive innovation.
What does it mean? It means that in part we need different skill sets and you notice that every day within SAP and we have to work on these skill sets developing them. And there's only a certain amount of time that we can do it and it takes a special commitment by our staff. Otherwise, we would have to replace many more people. So we believe that we have to train them.
Now the processes are changing. It's very hard to change processes within the company processes that everybody got used to. If you ever worked in a big company like ours will know that and that hurts. And these changes of processes are something you have to go through. You have to discuss them.
And it's It's a bad idea if you can read about them in the press such internal things purely internal things. I don't know why there are people within SAP who find it such great fun to relate those things toward the outside. I don't know. Is it because of the staff? I've said it skill set.
But I think the change of values is probably the most important And they hit the whole company, especially the Executive Board, namely getting from license fees to having people join the cloud at a relatively small fee and grow them over time. So it's a pay as you go model and that gives you different cash flow of course, and that is something that the company has to struggle with. So there are fundamental changes that we need to Implement, not everybody is happy about them. Some people think it was so nice during the 1990s. Why can't it be that way now?
Well, it can't because the world keeps turning And our competitors in other countries like the U. S. Or China follow a different timescale and have a different speed to go by. Okay. Another question to the supervisory board about employee engagement.
Wouldn't it make sense to look at employee engagement and have them as a short term variable compensation component for the Executive Board. Now it has already been implemented is the answer. The Supervisory Board came up with financial targets as a priority, but there is also Discretionary component where employee engagement and customer satisfaction play an important part. The discretionary component that the Supervisory Board can decide on ex post will also look at the Future viability of SAP with a view to market position innovation, customer satisfaction, employer attractiveness and employee satisfaction. This answers all questions by Mr.
Kohler. And I would now like to call Ms. Barbara Grimberg again. We'll hear again. And 5 minutes from now, I'll close the list of speakers.
If you want to Take the floor please from here. Now attendance of the share capital of 1,228,000,000 €504,232 divided into as many NPV shares, €805,692,000,000 692,000,000 3.22 Shares amounting to just as many votes are present, which amounts to 65.68 percent of the share Capital and mail votes also came in, which up to a total of 806,614 1181 votes are represented, which amounts to 65.66 percent of the share capital. Ms. Grimberg, please. Hello for the second time.
I just said that I had applied various times to get such a position on the Supervisory Board of SAP now the response by the board was that the appointment to the supervisory board show must have a qualification such a member to show for itself. Now my question is what is the real qualification to become a member of the advisory board, what quality criteria apply ideally for this function? Quality management, training management and audit, what are you referring to here? Or as you said, in connection with your staff, Skill sets. I would like to know what kinds of criteria these are in detail?
That's one question. And another question, something Does he also have his own SAP shares? And if so, since when? And if so, how many? And I would also like to know the following.
Well, you've been talking about SAP, the cloud and in connection with the cloud, you've been talking about HANA. What does HANA really stand for? What is It's an acronym for. And then another question for Mr. McDermott.
Now for today, for the whole of today, we've got an interpreter, maybe 2 interpreters here to do the translation. How much Does the interpreter cost a simultaneous translation? How costly is it? And what additional costs are incurred by text, legal texts and such things to be translated from German since they were published in German. So maybe comment by the German government, what have you, what legal text to be translated so that Mr.
McDermott can follow? Thank
you.
Right. Thank you. Let's continue answering the questions. Mr. Gideon, I think or Verdean, sorry, Mr.
Verdean. Mr. Guenter? Mr. Gunther first.
Your question was about the SE. Is it the acquisition date that counts for tax purposes when it comes to the purchasing of the old SAP shares. When there's a legal conversion From an AG into an SE, the identity of the company will be maintained and the identity of the shareholding will be maintained as well. This is why The shares in SAP SE are subject to the same Acquisition date as for the old SAP shares, you gave us an example that was a little different. We had a number of conversions in Germany already going from an AG to an SE so far.
So we have some experience here. Next question by Mr. Virgen. Who was it who actually came up with the idea of suggesting Mr. Maidon as SAP Supervisory Board member?
He's a turnaround person after all. Has SAP does SAP actually need that? Well, this question is directed against Mr. Meydon and the Supervisory Board stands behind Mr. Midon.
What counts for us is what Mr. Midon does as a a member of the Supervisory Board and he's been doing an excellent job for many years in our company. And as I said in an earlier response to the question, Mr. Midon is applying his long standing experience from various management positions in different industries as part of the Supervisory Board work. So my colleague Dietmar Hoppe when he was the Chairman of the Supervisory Board, He proposed Mr.
Midon as a member of the Supervisory Board. Right. We'll continue then with Mr. Nestel. Okay.
Let me start by answering the question by Mr. Nestel, the first one, namely when was the last employee survey in your company. The last employee survey took place in the autumn of last year. Then a question. This year there's going to be yet another employee survey in your company.
What changes Are they going to be based on the earlier employee survey? Mr. McDermott answered that question earlier on. Let me summarize this briefly. We have triggered a very comprehensive follow-up process, which includes all units at all levels of the organization.
And the activities that were defined at Executive Board level and that were implemented in recent months or being implemented as we speak still apply to the new strategy And simplification. And Mr. McDermott gave you more details about that in his earlier response. Next question From Mr. Nestle, to me, what about the provisions you've made for litigations?
We form provisions when the criteria are fulfilled according to IFRS. In total, by the 31st December 2013, provisions amounting to €235,000,000 were formed. And this amount includes all obligations from the TOMORONOW litigation in particular.
Question is, can you please provide more information on the topic of market share of Oracle, IBM and Microsoft? With Oracle, IBM and Microsoft, you've named the most important large U. S. Technology companies and all of these companies have different business roots and models and therefore different core businesses. When analyzing the market share, you need to take a very are difficult.
As a consequence, it is important to analyze market share data for the different categories. We have already provided information on our market share data for the new categories such as cloud as well as database and technology in a previous answer.
Well, now that the 5 minutes is over, I'd like to close the speakers' list. There's one further request for the Well, as It's late. I'd like not to repeat the thanks expressed by various other speakers. But I keep reading in the press That often criticism of the cloud is being expressed because of data Security that data stored in the cloud and then called back can be retrieved by others without any encryption so that companies don't like to put data in the cloud because they are afraid that these data could be used by authorized other unauthorized other parties As we just stolen from the cloud. And that's a major danger which keeps many people From using this implementation?
That's my question. Thank you. Thank you very much, says the Chairman. Mr. Brunner, you said at the Meeting 2 years ago, I asked a question about Ariba.
Could I have an answer? Because I don't think much of it. Hasso Plattner mentioned it in a spontaneous reaction. Well, the Ariba, we've acquired the leading vendor of commercial networks in the cloud. On the Ariba network, 1,400,000 trade goods and services worth more than $500,000,000 The Ariba portfolio combines this worldwide biggest cloud based commercial network with cloud based applications for sourcing and selling and liquidity management.
Companies around the globe use their network cooperation with commercial partners. The success of this acquisition is borne out by the revenue figures. In the segment Ariba in 2013, we generated a total revenue of €461,000,000 And now Schubert? Then the question raised by Eva Schubert. Under the coalition agreement, there's a provision that starting in 2016, The new the Supervisory Board members to be appointed must have a 30 percent quota of e mails.
Indeed, this quarter of 30% for the Supervisory Boards of DAX listed companies a specific wording of the draft legislation is not in place. So There are no specific plans available at SAP for implementing these regulations. As soon as such law will be enacted which affects SAP as well. Of course, we will stick by the binding quota. And then the next elections use all the sources available to find the suitable candidates.
I had said in addition that we endeavor right now to look for suitable candidates. Next question by Mrs. Schubert. Public tendering procedures make it possible to select the best candidates add to the pool of candidates. How do you staff how do you staff Supervisory Boards and Executive Boards?
The general requirement profile now that's Requirement profile for Supervisory Board members can be taken from the objective listed in the Corporate Governance Reports. Well, the Supervisory Board has to Distinguish between 2 persons eligible for elections to the Supervisory Board. It's not gender, but The quality which counts. After all, the Supervisory Board is to the best job. And the supervisory was to make available to shareholders the candidates at the Annual General Meeting irrespective of the agenda.
With respect to the future staffing of Executive Board positions, the Supervisory Board Lay down and quote recommendations that there should always be a search for candidates in which 50% women are on the shortlist For the decision about appointment qualification and experience should have greater weight And the agenda. Then there's the plan of the Executive Board to promote right here in staffing leadership positions executive positions which comprises several elements in order to add to the show female executives and in the long run Build up candidates male and female under diversity aspects also fell Executive Board positions. Mr. Brunt? Then I'll handle the Schubert's other questions.
The first two are almost identical, but applied to different organs of the company. According to the coalition driven listed Companies or companies under Code in the Elimination are to be obliged after 2015 to define binding target numbers for the increase of quota of women in the Supervisory Board, Executive Board and top management publish them and report transparently. How do we want to do it? Indeed, the coalition agreement foresees a legal duty to introduce a target for the Supervisory and Executive Board and the 2 lower management levels. About the target and the achievement or non achievement of targets a transparent report is to be compiled, but there is no specific wording of this legislation as yet so that We haven't yet any specific ideas about the implementation of that legislative endeavor.
The coalition agreement also foresees that companies must take measures to promote women in the entire plant hierarchy. How many companies in a company in Germany work at the 4 executive levels below the executive boards? Please mention absolute numbers and the percentage share for each individual level. At the 4 executive levels below the Executive Board, the following picture about the share of women in the executive positions is this. The numbers I'm going to give you includes the members of the Global Managing Board who are not at the same time members of the Executive Board.
1st, executive level below the executive before 25%. 2nd level 16% that is 16.8 percent 3rd executive level below the executive 45 13.8%. The 4th level, 73%. There's 14.6%. The information Relates to Germany only.
Next question, Ms. Schubert. Women do not benefit of promotions to stop positions. How many women last year in Germany in your company rose to the 1st and second executive levels below the executive board. Please give me absolute numbers for both levels separately.
Women in 2013. Well, the information at your additional question was what about the men? Women promotion to the 1st executive level below the executive board in 2013, 2 promotion to the 2nd leadership level below the Executive Board 10. Then promotion to the first success in level below the Executive Board 7 and the 2nd level 57. Next question, what are you doing specifically to detect female talents?
And what do you do to promote women? I'm not talking about general promotion programs and nursery places. Are these measures sustainable? That is they evaluated and maybe readjusted continuously as is usual in quality management. The programs in place will be continued in 2014 2015 such as Mentoring programs specifically for women among the members of Top Management and SAP, they act as mentors for female top executives.
Leadership Excellence Acceleration Program LEAP, piloted successfully in the U. S. And now globally rolled out. Compulsory global management trainings create the basis for changes For instance, women and men leading together. Local trainings programs of female and male executives such as encouraging female talent.
And as before, the individual executive Board areas are responsible for defining and implementing specific promotion measures for women. There's an active businesswomen's network 12 locations worldwide with more than 6,000 members of whom 1700 roundabout are in Germany. At any rate, the corresponding evaluations are done for these measures, which when necessary are used also for readjustment. This way it's ensured that the existing programs meet their objectives and act sustainably on the staff and the company. Your next question, Mr.
Schubert. Have you checked your personnel programs to find out whether they meet modern ideas of work life balance. And so in SAP regularly Match the personnel development programs to the most recent scientific findings. There are also thoughts Spend on work life balance. We support the aspect of work life balance in Australia by the following measures: workshops not run consecutively packed on several days, but broken down in various models and virtual and recorded training courses which can be used as a function of the individual working models.
Next question It's mainly women who for family reasons work part time. How do you incorporate these women's In their personnel development measures, are there any offerings for women and men about a terminated reduction Flexibilization of working time, is there any claim in the company to enjoy full time activity after work Part time. And it's how is it used by men and women? Fundamentally, the answer all Full time and part time employees can use personnel development measures. But for a couple of years some measures have been taken to life easier for part time forces.
Whole day training programs are shared to 2.5 days. All of the subjects make it possible they are switched to e learnings, so that staff can participate in line with the individual working times. In the light of Life Family agreement, SAP is offering its staff members, men and women an attractive additional range of offerings flexible working times work and part time Kindergarten places, parent plus child offices, eternally external Consulting and mediation of rings. These staff members have no unrestricted claim to return to full time employment. But in line with the current legislation part time staff members who want to extend their working time will be preferred when a respective free position is to be filled.
Last question. To ensure that persons taking personnel decisions get rid of Subconscious patterns of behavior in assessing and promoting women. And so let me recall the awareness training buzzword. Managers and Staff in Sourcing and Recruiting Awareness Trainings are being carried out in order to be sensitized to various aspects with respect to selecting women and men and looking for specific jobs. In this way, criteria of evaluation and choice are criticized and reviewed and the entire process put on a less biased and more neutral basis.
This answers Schubert's question. Mr. Hoof, Mr. Blanche is on. Questions by Mr.
Vohr. First of all, you asked please make sure next year that the annual statement of his as written is available. I think it's indeed not acceptable to have it available on the Internet only. The annual accounts of SAP AG is available as a printed report available here and can also be Obtained from Investor Relations of SAP online or through the investor telephone, we can make sure that you get a copy after this meeting. 2nd question that refers to litigation especially in the U.
S. You said that there are It's difficult to put numbers to all this I agree, but there are numbers of interest to shareholders. So let me ask for them. What are the legal risks and claims for damages in the U. S, but also worldwide at the end of fiscal 2013 and the year before?
The answer. I think I said so when answering to a different question at least I tried to. In cold cases, claims for damages especially in the U. S. Are put into more concrete terms only in the course of the So a reliable total amount cannot be established against this backdrop.
But in our fiscal report, out in 2023, We've mentioned the amount of damages claimed where the opposite side provided such information. So where we have numbers, they are contained in the annual report. Next question, give us precise figures. What has SAP and the SAP Group spent on legal counsel and advises in 2013 2012. Those who had to deal with proceedings and claims for damages in the U.
S. And worldwide. The cost of defending against IP litigation in 2013 were €4,000,000 and 2012 €7,000,000 And your last question Mr. Horv, What's the expense of this Annual General Meeting? What was it last year for instance?
Direct costs for organizing the Annual General Meeting last year amounted to €2,200,000 That was €200,000 less than the year before. These costs in Trailia include renting the SAP Arena and catering expenses. Opportunity costs for instance for the attendance by Executive Board members on SAP staff are not included in these costs of course. Then there's a question for me by Mr. Gutzinger.
No. Mrs. Gremberg first. But we don't have the answers yet. Well, if you agree, I'll first handle Mr.
Grazinga's questions. The annual statement of the AG is about €2,500,000,000 and the group statement there's an overall result of about €2,800,000,000 The difference is that due to the different rules in HGB German Commercial Code and IFRS? The difference the answer primarily results from the fact that the statement on the SAP AG reflects only the results of the SAB AGS, the parent company of the group. The group statement includes the result of all group companies after elimination of transactions within the group. The different accounting rules also result in deviations with respect to the listing assessment and showing of And balance sheet items.
Next question. After conversion into an SAE will then the annual statement According to German loan, no longer exist. We'll only use the fair value principle and according with international accounting standards. The conversion into NSE does not result in NSE changing in the accounting rules for BSAP. And consequently, the single statement will continue to be based on regulations in the German Commercial Code.
We've covered Mr. Verdian. Now we are waiting for the answers to the question raised by I've tried to answer it a little bit. I've been forbidden to do that. Having Third in the number of women on the Supervisory Board in the not existing SE.
May I perhaps take one? Yes. Well, yes. That's one. Control of the Supervisory Board.
Well, this is you. And the auditors, they look to see whether the Supervisory Boards have truly discharged their supervisory functions. The Supervisory Board is supervised again. Well, let me state that this is a new record performance, I think, says the Chairman. Somebody is saying we're still on time.
I hope there's something to eat after the meeting. Otherwise, we'll have to order a pizza. Okay. I'll start. Mr.
Goldberg, you asked how many shareholders in 2012, 2013 2014 decided in favor of the Internet dialogue for the General Annual Meeting. The Internet dialogue That is the online participation and online authorization of voting was used by the shareholders SAP AG in 2012 to 2014 as follows. 2012, 312 shareholders or representatives Shareholders use the Internet dialogue. The shareholders or the representatives in part represented a considerable number of shares. In 2013, it was 286 shareholders 2014, 447 shareholders.
Next question that was about the introduction of CEPA. What were the additional costs? In introducing this into your business transactions or the income resulting from this launch in customers. SAP had completed its internal sale rep on the treasury side before the end of the deadline. Our Seeba project was used to observe the new rules and on the other hand With the implementation of the SAP Software Bank Communications Management, we also achieved Gains in efficiency in payments.
The additional benefit by these efficiency gains and the avoidance of fees for returns Exceeds the project cost in the amount of €120,000 On the product side, the software components were delivered to our customers Under the heading of product maintenance that is under existing contracts within our maintenance strategy we regularly deliver these regulatory changes in the framework of maintenance in order to support our customers and clients management. The additional customer benefit arising Informant harmonization allowed us to position additional sales products such as products in liquidity management, software, about bank communication and so called payment factories. On the sales side, our SEPA balance is positive. Next question. What's the value added tax you collected on purchases?
And what is The pretax you paid for purchases and absolute amounts. Well, for SAP AG and the German sales subsidiary, We'd like to answer your question on the basis of the pre registrations of sales tax for 2013. Sales tax in 2013 for the SAP AG amounted to about €280,000,000 pretax €200,000,000 For the German sales subsidiary, the sales tax amounts to about €510,000,000 and pretax to some €300,000,000 Next question by Ms. Development and how many of those did you refuse? In addition to standard development, we run special projects or developments For clients these customized projects are of course called Custom Development Projects CDPs for short.
In 2013, we recorded 814 CDPs as incoming. This number includes Change requests for ongoing projects. First for the general Indian meeting what are the costs of this meeting? And for this of last meeting differentiated with respect to catering tickets for public transit security rental Invitations declaration. As I said, direct costs for the Annual General Meeting last year amounted to €2,200,000 In 2012, it was €2,200,000 We have a lump sum contract 12, the arena covering several years, which covers the organization of this meeting, which includes rent catering security and decoration.
No differentiation is possible. For the invitations, we spent about €60,000 last year. Cost of public transit tickets about to €4,028, €0.64 Please bear with me that we can't tell you anything about the actual cost of today's meeting. Next question, Of the profit, euros 6,400,000 to be used for Research and Development that's praiseworthy or not because we heard something about complaints and Negative conditions. So is these only provisions to correct those mistakes?
Well, The balance sheet profit of €7,500,000,000 is available for payout. Our dividend policy provides for paying out more than 30% of the group profit after taxes. The quota paid out ratio between the sum paid out and the group performance given the dividend payments of we proposed of €1,900,000,000 36 percent of the group result and after deducting the dividend payment thus leave CHF 6,400,000,000 in the company to finance corporate activities and especially Next question. I'd refer to proposed improvements in the company. What's the number of proposals for improvement made by your staff members, what's the number of proposals filed and those implemented and of the projects realized and the savings or license income resulting therefrom.
In our idea management 2013, 13 72 ideas were handled. Of those 214 were implemented, these ideas have a quantified benefit of €21,000,000 We refer to internal ideas about improvement not product ideas. The quantified benefit referred to is comprised of many effects across all corporate divisions. Next question, well, Ms. Glendberg, What was the age of the oldest person you recruited in 2013 2014 that is the maximum age of somebody recruited?
What kind of employment contracts did this person get? An employee contract or a fixed time contract? And what was the position to which that person was appointed. The oldest person permanently recruited in 2013 at that point was 65 years old. She was recruited as Solution Sales Senior Executive.
In 2014, Salesforce has been a person 68 years old and the function of a senior account executive. Next question. How many of the shareholders were invited to this meeting? How many registered? How many appeared?
And how many guests? Well, of course, as provided by law, the publication of the invitation till the General Annual Meeting and the Federal Gazette invited all shareholders to this meeting. A total of 9,000 shareholders registered for the meeting 3,300 appeared in the flesh and about 200 guests came. Next question R and D. What is your expense on R and D?
What is the structure for R and D expenses such as lab, personnel, devices, equipment, etcetera. The importance we attach to R and D is expressed in numbers. In 2013, our R and D costs According to IFRS amounted to €2,300,000,000 This is the previous year's level. R and D quota that is the share of R and D costs of total sales or revenue in 2013 was 13.6%. The major share of development costs is 73% namely our in house personnel costs.
Then total expenses include also costs of external service providers and partner companies with which SAP cooperates in new development and advanced development of products. Next question. What's the headcount? Employees and manual workers in 2013. In 2014 differentiated by short term workers, employees working under tariff contracts, employees paid outside these regular contracts.
Well SAP doesn't employ any manual workers and there's no distinction that we personnel employed under a collective agreement and those not. Well, number of employees end of April, 66,900 and 6 average pay end of April, 85,493 number of leased workers about 2,000. Payment of these companies providing stuff to us. Here we have no figures. But What applies are the collective agreements used by those companies.
Let me go on with the next Two questions. Well, you've handled them already. Well, let's go on again with Ms. Barbara Glembach. The audit of the Supervisory Board was cast into a more precise framework.
Is there Supervision of the Supervisory Board also with respect its own efficient activity who checks on the Supervisory Board What are the criteria used and how is this assessed? Finally, the Supervisory Board regularly checks the efficiency of its activity. In August 2013 for the last time the questionnaires were sent to the Supervisory Board and members of the Global Managing Board. The results of the question as evaluated by the Chairman of the Supervisory Board were then submitted in writing to the Supervisory Board members prior to the meeting on the 10th October 2013 and discussed at the meeting. Well then the most recent poll about the efficiency of the Supervisory Board activity proposals were submitted on the composition of the Supervisory Board.
Since information is applied to the supervisor by the Executive Board, time and type of reporting and focus of discussions in Supervisory Board including detailed reporting about meetings of the committees Until the whole plan of this proposal, no decisions to be to implement improvements were taken. What is the total number of your shareholders? Well, we've only earned its shares. We do not know the names of the shareholders nor their total number. From the point of view of our Investor Relations work and the reports about voting rights we saw and read.
We know a number of shareholders by name, but this allows no conclusion to be drawn to the total number. What is the model function for lower level employees? When they do successful highly motivated work at a fixed salary, but Do not get a bonus in case of success while the Board gets bonuses for success in part only for being present. The Board. What Board?
Is it the Supervisory Board or the Executive Board? Well, I'm not sure. Our staff too in addition to their fixed salaries always receive a variable component. With this variable pay component, they participate in the success and the performance of the company. In addition, our staff have a performance based pay In the format of 1 of performance bonuses, our Executive Board members in addition to the fixed pay get a performance oriented variable Fees for just being present are not paid.
I thought it referred to me. I wasn't sure. Well, it wasn't. What is the real qualification for a Supervisory Board member? What Quality criteria are required quality management, training management and audit or skill sets To be able to duly the structured duties of control and the consultancy of the Executive Board, the members of the Supervisory Board must have the necessary abilities and knowledge.
There are no general qualifications which all members of the Supervisory Board have to have. It's decisive that the Supervisory School of Business Summit can adequately Advise and monitor the Executive Board in all questions of corporate management. A Supervisory Board Agreement with the German Corporate Governance Code has laid down its objectives for the composition. This is published in our corporate governance report available on our homepage and also in the annual report on display here. Next question.
Does Mr. MacDiarmid Holt SAP shares? If so, how many? As shown on page 43 of the annual report, our Executive Board members as December 31, 2013 held 30,201 SAP shares. Also Mr.
Bill McDermott has shares of SAP. But we don't want to give any further information about the precise number of shares held by the different executive board members. The transactions with SAP shares are published within the framework of Direct Dealings Reports. Next question. What's the expense today incurred for simultaneous interpretation?
The answer because of simultaneous impressions today are really insignificant and not essential for the order of magnitude of SAP. Thanks from the interpreter. I'd like to thank the interpreters for their stamina and endurance. What are the additional expenses for texts, writings, legal transactions to be translated German to English so that this McDermott can follow. We are an international company which has to be in mind not only German laws but Laws of all countries in which we work.
Our Global Legal Department reports to the Executive Board about important legal developments in the different countries In the internal corporate language, which is English? A verbatim translation of legal text from the national language can be provided in exceptional cases. It's internal and does not incur any additional external costs.
The name HANA originally comes from high performance analytic appliance. SAP HANA is a flexible data agnostic in memory platform that helps organizations analyze their business operations using huge volumes of detailed transactional and analytic information from virtually any data source. There is much more on Page 299 in our German annual report in the glossary section. Thank you.
Well, and another footnote about Hana. We made a mistake when we called it out because HANA is not just an electric appliance, but also An in memory database, which stores data in columns and and other formats. It's more than a database. It's still called HANA. This is why we don't explain what Hana means.
Hana is a name. I think we don't have any answers. Let me ask Mrs. Grunberg. In answering your questions, have we handled them all?
Ms. Grimberg? All right. All right. This is Gunberg.
It seems that no questions have been left open. The list of requests for the floor has been closed. Where's Mrs. Dunneberg? Did you listen?
Is everything fine? Good. Thank you.
Well, then I guess it's over to me again. Now be prepared for something. Mr. Wernher Brand promised me that he did his utmost together with his team. But nevertheless, we have to get into the nitty gritty right now.
Right. I have no more requests to speak on my list. And the list is closed. So I ask on behalf of the Executive Board, have all questions been answered? Right.
Then I would ask you please. Mr. Brandt, I had asked about the difference in the amount of 0.3 €1,000,000,000 so €300,000,000 approximately. So the difference between the annual surplus of the AG and the result of the consolidated financial statements. So the answer you gave was one that I was familiar with.
There may be different valuation principles that are applied, but I wanted to know exactly how much of that relates to the inclusion of companies on the one hand. And on the other hand and that's My main part of the question is based on different valuation principles. So out of the €300,000,000 So let me give you an example. €100,000,000 may come from a different consolidation area other companies and €200,000,000 may be accounted for by other valuation principles. So please give me an answer like the one I gave you in this example.
Well, I don't know if we've got this down to this very level of detail because the Consolidation is automatic and we don't make any distinction here between what drives the difference whether it's consolidation area different valuation. So if you agree, we would analyze this and send you the information. I'm
The topic is data security in the cloud. I have read in various press reports that there are concerns about the cloud regarding data security, meaning companies are What are your thoughts on this? SAP is one of the world's leading providers of cloud services. Companies purchase these services to run their software or to save and process data in the cloud via the provider's server. By the EU Data Protection Directive of 1995 and the privacy laws that were adopted in response to the various member states.
We have implemented a variety of technical and organizational measures over the years in order to meet these requirements. In particular, These include measures to protect data controlled by SAP and SAP customers from unauthorized access and processing as well as from accidental loss or destruction. SAP regularly conducts external audits of these measures to ensure that all technical and organizational controls are effective and meet the latest technical standards. Further, We have implemented a certified data protection management system in areas that are particularly data protection critical, including support, HR, Global Services, Marketing, Application Innovation and Custom Development, Furthermore, customers are provided with security certifications such as ISO 27,001, security white papers and reports from our independent auditors and certification bodies. We are also monitoring the current debate on reforms
Right. So I'd like to ask you once again on behalf of the Executive Board and the Supervisory Board whether all questions have been answered. This is not the case. So for the record all questions from the floor have been answered. I'm now closing the discussion on all 8 agenda items.
I've already read out the attendance list and changes to the attendance. We'll now come to the remarks For the vote, ladies and gentlemen, now we come to the vote on the management proposals in respect of items 2 to 8 on the agenda. As last year, we will take all of the votes on the management proposals for items 2 to 8 on the agenda 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 participants online. Finally, I shall provide some additional details.
The vote here in the official meeting zone We'll use a multi item voting card namely multi item voting card 1 near the front of the ballot card block. Voting results are determined using the subtraction procedure in which only the no votes and abstentions are recorded and counted. In other words, you only have to submit multi item voting card 1, if you vote no to 1 or more of management's proposals or wish to abstain. The yes votes are then counted by subtracting the no votes and abstentions from the current attendance count. Multi item voting card 1 shows each item by number from item 2 through item 8 including the sub items in 6 and By each item and sub item requiring a resolution, there are no and abstain checkboxes.
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 do not Need to hand in multi item voting card 1. To check the boxes on the voting cards, Please use the SAP pen that you were given In the foyer with your booklet of voting cards. If you use any other pen, The machine may not be able to read your vote. Voting cards will only be collected here in the main hall.
All shareholders and proxies who are against 1 or more of the proposals that are now before the meeting or who wish to abstain should come to the main hall to vote, raise their hand when the vote is called and have multi item voting card 1 ready to put in the ballot box. I would like to emphasize once again that with the chosen method of voting any shareholder or proxy who is present in the official meeting zone and who does not submit a voting card is voting in favor of all the management proposals concerning items 2 to 8. 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 multi item online voting card 1. 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 recorded. In other words, you only have to submit multi item online voting card 1, which you do by pressing the send online voting card button. Multi item online voting card 1 shows each item by number from item 2 through item 8 including the sub items in 6 and 8. By each item and sub item requiring a resolution, there are no and abstain checkboxes. To Well, you don't have to send it, do you?
Well, anyway, If you wish to vote yes for all agenda items and sub items, you do not need to send multi item online voting card 1. Here it is. I would like to emphasize that with the chosen method of voting, any shareholder or proxy who who is present online during the voting and who does not submit multi item online voting card 1 is voting in favor of all the management proposals concerning items 2 to 8. I would like to inform shareholders to appointed employees of the company as their proxies that the proxies present will cast your votes by releasing your voting instructions as they have been entered in the IT system. On release, the instructions flow into the vote counting system and are reflected in the results.
Some of the institutional investors and shareholders associations have used the facility we offer to have no's or absentions pre entered in our computer system. Shareholders once again had the opportunity to submit their votes prior to the meeting. By postal vote. These votes have likewise been entered in the IT system. To help ensure that attendance counts are accurate, I would kindly ask shareholders and proxies not to leave the official meeting zone and not to end I'm now calling for votes on the management's proposals in respect of items 2 to 8 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 the following: The retained earnings of €7,595,000,000 from the 2013 fiscal year reported in the annual financial statements and management report be applied as follows: that a dividend of €1 be paid for each qualifying NOPAR share, which makes €1,194,084. That €400,000,000 be transferred to other revenue reserves and that the balance of €6,106,680.58 be carried forward to the new financial The wording of the management proposals for items 3 to 8 is the same as was published in the announcement in the German Federal Gazette on Monday, April 14, 2014. In the interest of avoiding repetitions, I refer you to this announcement.
The wording is also provided in your Invitation to this Annual General Meeting of Shareholders. With regard to items 34, I expressly draw your attention to the voting in Section 136 of the German Stock Corporation Act. A simple majority of all valid votes cast is required for the resolutions on items 2 through 5 and on item 8B, a 3 fourth majority of all valid words cast is required for the resolutions on Item 6, 7 and 8A. 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 8 to the vote.
Shareholders and proxies in the in the official meeting zone who wish to vote against any or all of the proposals made by the management for items 2 to 8 Or who wish to abstain on any of them, please go to the main hall, raise your hand and put your completed multi item voting card 1 Shareholders and proxies online Who wish to vote against any or all of the proposals made by the management for items 2 to 8 For the record, the online participants have now had enough time to send their multi item online voting cards 1. The time for submitting multi item online voting card 1 will end When I close the voting, which I will do as soon as I see that shareholders and proxies present here in the official meeting zone Have all shareholders and proxies present in the official meeting zone who wish to cast a no vote or an abstention on any of Could you please call out? Okay. I repeat, Because it says here to repeat the question if necessary. Have all shareholders or 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 voting card 1 yet?
I see they have and I am closing the voting now. Now the computer is working. I will announce the results of the voting as soon as I have them.
Ladies and gentlemen, I now have got the results of the votes. The Annual General Shareholders Meeting has accepted all of the management's proposed resolutions at items 2 to 8 of the agenda with the Full details of the voting results can be obtained at the speaker's desk or the speaker's table. So if you all agree, I would like to spare all of us a lengthy determination and instead as permitted by law, limit the following determination of resolutions to those resolutions that they obtained the required majority. The gentlemen have not fully agreed yet. So do you all Agree that we apply the procedure as proposed.
Is anybody against it? I have now established that this is the case, which means that nobody objects to this abbreviated procedure and this brings me to the individual results. Let me now disclose the results of the votes on the proposed resolutions of the management on items 2 to 8 and I hereby declare a resolution that's taken by the AGM. Now with an attendance of 806,000,000 70,575 each with a share carrying 1 mode which corresponds to 65.61 percent, which corresponds to the 1 1,228,500 1,228,500, 4,232 shares with a prorated share of €1 of the stock capital, which also includes 34,447,148 own shares has passed the following resolution on item number 2 of the agenda, the AGM with 99.95 of the votes cast, which means with the required simple majority has approved the appropriation of the net income of the year from fiscal year 2013 in the manner as it has been proposed in the adjusted proposal of the Executive Board and Supervisory Board on Item number 2 of the agenda, which I have read out to you once again before we entered the general debate before we started the voting procedure. On item number 3, 98.84 of all of the votes cast of the AGM, which means With the required simple majority, the AEGM ratified the acts of the members of the Executive Board for fiscal year 2013 for this period.
On behalf of the Executive Board, I'd like to thank you for your trust. On item number 4, with 98.24 percent of all of the valid votes cast, which means with the required simple majority, the AGM has ratified the acts of the members of the Supervisory Board Holding Office During fiscal year 2013 and on behalf of the Supervisory Board, I'd like to thank you for your trust. On item number 5, With 99.63% of all of the valid votes cast, that is with the required simple majority of the votes. The AGM has appointed KPMG AG, Wirtschaftgruvings Gesellschaft Berlin as auditors and consolidated auditors for fiscal year 2014. On item number 68, 99.99 percent of the votes valid votes cast and including the stock capital present at the vote, which means with the required simple majority of votes and 3 quarter majority of capital has the AGM has approved the amended the amendment modification on the existing control and profit and loss transfer agreement with SAP, Esterbitarlingsk and Vermundske Waltungsgemberha in a manner Board and the Supervisory Board in the announcement of the agenda under Item 6A 6B, 99.9 9% of the votes valid votes cast, the AGM has approved the With the required majority of the stock capital present and also with the required simple majority and 3 quarters of the capital majority, in a manner as presented in the proposed resolution by the executive and Supervisory Board in the announcement of the agenda.
On item number 7, 99.99% of the valid boats costs of the AGM have approved with the required majority of the stock capital present and also with the required similar majority of votes and 3 quarters majority of capital has approved The conclusion of the control and profit and loss transfer agreement between SAP AG and the subsidiary in the manner as Presented for the vote and as presented by the Executive and Supervisory Boards in the announcement of this AGM under item number 9. On item number 8A, 99.5%, 7% of the voters vote present and the stock present during the vote, which means with the required similar majority of votes and 3 quarter majority of capital, the AGM has approved the Conversion with the change of legal form of the company into a European company SE and has also approved the articles of incorporation of SAP SE and AMENO as presented in the proposal to put up for the vote And as presented by the Executive and Supervisory Board in announcements of this agenda on item number 8. Item number 8b, Option number 1, 73.72 percent of the valid votes cast And the stock capital present during the vote, which means with the quite simple majority, the AGM has elected Professor Doctor.
Hasso Plattner as a member of the 1st Supervisory Board SAP SE. Item 8B2 of the agenda, 76 point 71% of the valid votes passed and the stock capital present during the vote, which means With the required simple majority, the AGM has elected Mr. Pekka Alla Pietila, a member of the 1st Supervisory Board of SAP SE. Item number 8b3 of the agenda, 98.20 percent of the valid votes cast and the Stock of the capital present during the vote that is with the required simple majority. The AGM has selected Professor Anja Feldman, member of the 1st Supervisory Board of SAP SE.
Item number 8b4. With the 66.88 percent of the valid votes cast and the stock capital present during the vote that is With the required simple majority, the AGM has elected Professor Doctor. Wilhelm Harman, member of the 1st Supervisory Board of SAP SE. Item number 8b5, With 94.1% of the valid votes cast and the stock capital present during the vote, which means with the required Simple majority of votes, the AGM has elected Mr. Bernard Liu to a member of the 1st Supervisory Board of SAP SE.
Item 8b6. With 76.77 percent of the valid votes cast and the stock capital present during the vote, which means with the required simple majority of votes, the AGM has elected Doctor. Hartmut Moder, member of the 1st Supervisory Board of SAP SE. Item number 8b7. With 76.67 percent of the valid votes cast and the stock capital present during the vote, which means with the required simple majority of votes, the AGM has elected Doctor.
Erhard Schipper Wright, the member of the 1st Supervisory Board of SAP SE. Item 8b8. With 71% of the valid votes cast and the stock capital present during the vote, which means with the required simple majority of votes, the AGM has elected Jim Hagenman Snabe, Member of the 1st Supervisory Board of SAP SE. Item 8b9 with 91.59 percent of the valid votes cast and the stock capital present during the vote, which means with the required simple majority of votes, the AGM has elected Professor Doctor. Klaus Wucherer, member of the 1st Supervisory Board of FSAP SE.
The term of the share of the capital representatives elected under Item 8B in the 1st Supervisory Board of SAP SE is in accordance with the proposed resolution of the Supervisory Board limited for the time up to the end of the ordinary AGM, which votes on the ratification of the Act of the Supervisory Board for 4th fiscal year after the start of their term with the fiscal year in which their term begins is not included, but for 6 years by Ladies and gentlemen, I'd like to thank all of you most cordially For having borne this company until the very end, all of the agenda items Of the meeting have been settled. I hope there's still something some drinks available. I know we'll close SAP AG's 27th Annual General Meeting. It's not the AC yet? No, it's still the AG?
All right. Thank you. Well, I cannot deviate. Behalf of the Supervisory Board and Executive Board, I'd like to thank all of you very much for attending. I would like to add my own thanks Also on behalf of the shareholders,