Much better now. Good morning, my name is Herren. I would like to warmly welcome you to SAP's Annual General Meeting 2025. After the pandemic, we have held our Annual General Meetings in the past two-year period as in-person meetings at the SAP Arena in Mannheim. Today, we are holding the Annual General Meeting in a virtual format, thereby making use of the authorization that you granted us. Like many other DAX companies, we want to gain experience with this new format. We are confident that this virtual format allows us to provide you with a comprehensive overview of the state of your company, the successes and challenges of the past and the current financial years, and our plans for the future. It is our utmost duty to secure that your shareholder rights, particularly your right to ask questions and speak at this event, are fully upheld.
We are looking forward to the discussion with you. Dear shareholders, unfortunately, my German is not good enough to be able to lead this meeting in German. Therefore, I am speaking in English, and we are providing simultaneous translation into German. I have agreed with my fellow Supervisory Board member, Dr. Friederike Rotsch, that she will take over the chair of the Annual General Meeting, as permitted by our Articles of Incorporation. Therefore, after my opening remarks, she will discuss the further procedures for this meeting and lead the general debate. Thank you, Friederike, for this valuable support. The current global economic situation is challenging for all companies around the globe, including SAP. We see that our services and products, which are at the forefront of many converging technological trends, are important in these uncertain times. Companies are turning to our technology to help them navigate this environment.
Our CEO, Christian Klein, will cover this topic, as well as the very successful year 2024, and also share our strategy in 2025 and beyond in his address shortly. Before we begin with the formal proceedings, I would like to extend Supervisory Board's gratitude to our dedicated employees for their commitment and hard work. Equally, to the Executive Board under Christian's leadership for their relentless focus and excellent execution of our strategy. I will go into more detail on this and other topics in my report of the Supervisory Board later in this meeting, but first, I yield the floor to Friederike Rotsch.
Many thanks, Pekka. Ladies and gentlemen, dear shareholders. I too warmly welcome you to our virtual Annual General Meeting of shareholders, which I hereby formally open for the record. As Pekka Ala-Pietilä has already mentioned, I, as Chairperson of this meeting, will explain to you the relevant formalities and also lead the general debate today. I am delighted to be able to contribute to the success of today's Annual General Meeting. With that, I'll move directly to the necessary explanations. Ladies and gentlemen, as usual at this point, I first need to announce the formalities of this Annual General Meeting of shareholders. First up, the attendance of Executive Board and Supervisory Board members. The entire Executive Board is on the stage with me here on the SAP campus, and I would like to extend a warm welcome to all members.
The members of the Supervisory Board have likewise joined us on the SAP campus today. A warm welcome to them too. Here on stage, we have Pekka Ala-Pietilä and myself. The other members of the Supervisory Board are all gathered in a side room following the General Meeting of shareholders from there. Supervisory Board members Aicha Evans, Lars Lammerding, and Professor Dr. Alf Herbrich will attend the AGM via video conference. Miss Jennifer Lee is unable to attend due to other commitments and has therefore sent her apologies. I would also like to welcome Miss Anna Erik, Notary Public, who will be taking the minutes today, and I would like to welcome her. Today's meeting was called with due notice in accordance with the legal requirements and the provisions of the Articles of Incorporation.
The notice of the meeting was published in the Bundesanzeiger, the online Federal Gazette, on April 2, 2025, and a copy of the document will be attached to the minutes of this meeting. I can therefore assume that the agenda published in the calling notice, along with the management's proposals, are known to all of you. The company has not received any counter-motions or election proposals from shareholders. Shareholders also had the opportunity to submit statements on items on the agenda in advance of the Annual General Meeting. We have received such statements from Martin Rosa, Michael Kutzenberger, and Michael Rolf. These statements have been published on our shareholder portal, where they are available to all duly registered shareholders. We are, of course, keeping an electronic attendance register of today's meeting.
This register lists the names of the company's proxies present at the meeting venue, along with the shares they represent, as well as the names of the shareholders and shareholder representatives who have joined us electronically today through our shareholder portal. The attendance register is available for inspection here in the meeting room and online in the shareholder portal for those who follow this meeting online. It is updated regularly. I will provide you with an update on attendance later on in the meeting. Ladies and gentlemen, shareholders who registered on time and in the proper manner were able to exercise their voting rights in advance of the Annual General Meeting, either by means of electronic postal voting or by providing electronic instructions and authorizing the company's proxies. Both of these options remain available electronically through our shareholder portal during the virtual Annual General Meeting.
You can reach our proxies through the shareholder portal up until the start of voting. The shareholder portal will remain open for electronic postal voting for a few more moments after that, that is, until I, as Chair of the meeting, close the voting process. I will remind you of the relevant deadlines again when we come to the vote. Ladies and gentlemen, those of you wishing to speak today can use a button on the shareholder portal to request the floor. Allow me to explain the key formalities to keep in mind with respect to your statements and the formal process we will be following for today's discussion. First, regarding the contents. Please present your statement the same way you would for an in-person AGM. Kindly address only the agenda items and, if needed, the rules of procedure, and please avoid digressing to unrelated topics.
I would also like to ask you to keep your statements brief, so as to allow other shareholders the opportunity to speak. As a guideline, please try to keep your statement to under 10 minutes. Let me make it clear that this is not a formal limit on speaking time, merely a non-binding request. However, I would appreciate it if you could adhere to the suggested 10-minute timeframe in the interest of all participants. For guidance, a timer will be displayed showing how long someone has been speaking. We'll conduct today's discussion as a general debate. This means you will have the opportunity to speak to all the items on the agenda and do not need to sign up separately for each individual item. In my role as meeting chair, I also decide how you can pose your questions to us today.
As signaled in the convening documents, I hereby confirm that questions may only be asked by means of video feed. Therefore, if you wish to ask a question or several questions, please sign up for a speaking slot in our shareholder portal. You can then use your time as you wish, whether to speak, to ask questions, or to do both. Similarly, you must register to speak if you wish to make a motion during today's Annual General Meeting, whether it pertains to the subject matter at hand or to the rules of procedure, or if you wish to propose a nominee for election. When you register to speak in the shareholder portal, you have the option to indicate that you wish to make a motion. I kindly request that you make use of this option if so required.
That will allow me to determine whether your motion deserves or needs to be prioritized. Now, some notes on the technical process for submissions and managing the discussion. Our technical team will invite those participants who have registered to speak to perform a functional test on the shareholder portal. In this way, we ensure that their video and sound transmissions work properly, and we can all see and hear the speaker well when they give their statement. I will call on the registered speakers one at a time and give them the floor. Each speaker will then be connected live to the meeting via video stream to deliver their remarks. You will then be visible and audible to your fellow shareholders and anyone else watching the Annual General Meeting live stream on the shareholder portal or on the public internet.
We'll connect the questions from your contributions and prepare the responses. Once a few speakers have had their turn, we'll have a first round of answers. I will then call up the next speakers. We will repeat this procedure until all speakers have had their say, until all questions have been asked, and all answers have been given. Ladies and gentlemen, finally, until the end of it, you have the right to object to any of the resolutions to be passed at this meeting should you see any grounds for doing so. You'll find a button for this in our shareholder portal as well. The notary will record any objections sent through our system and add them in the minutes. That's it for the formalities. Ladies and gentlemen, we now come to the agenda. Let us first take item one.
I can report that the following documents were available on SAP's website from the time the General Meeting of shareholders was called. The 2024 SAP SE financial statements, the consolidated financial statements, the combined management report for the SAP group at SAP SE, including the Executive Board's explanatory notes relating to the information provided pursuant to sections 289A and 315A of the German Commercial Code, HGB, the Supervisory Board report, and the Executive Board's proposed resolution on the appropriation of retained earnings. These documents are also available on our website during today's Annual General Meeting of shareholders. The auditor, BDO AG, Wirtschaftsprüfungsgesellschaft, examined the financial statements, the consolidated financial statements, and combined group management report for the group and SAP SE for fiscal 2024 and has issued an unqualified audit opinion.
The Supervisory Board reviewed and approved the aforementioned documents in its meeting to discuss the financial statements on February 19, 2025. The SAP SE financial statements for 2024 were thus formally adopted. Ladies and gentlemen, we now turn to the Supervisory Board's report. For this, I hand over to the Chairperson of the Supervisory Board, Pekka Ala-Pietilä. As explained at the beginning of the meeting, he will present this report in English, and it will be translated simultaneously into German. Pekka, over to you.
Thank you, Frau Leike. Dear shareholders, thank you for your continued trust in and support for SAP. 2024 was a remarkable year for SAP. I would like to cover now some of the most relevant topics the Supervisory Board has been discussing and deciding on with the Executive Board. You can find our detailed report of the Supervisory Board in our integrated report.
The key responsibilities of the Supervisory Board are to challenge, support, and supervise the Executive Board. Under the task to supervise, the monitoring of the risks of the company forms a key part. Over the past few years, we have seen geopolitical risks come to the forefront again. To this, we have been putting a lot of thought into since it affects not just how we operate day to day, but also how we plan for the future. We think about risk in three buckets. First, there are risks we simply cannot control, things that no amount of planning will change. There are risks where we can do something about. We have been very focused on making sure that we are managing these risks smartly and proactively. Finally, there's a third basket.
Areas even in the middle of this uncertainty, we see opportunities, places where we can grow, innovate, or create value in ways we might not have seen or expected. What's clear is that the world is a more volatile place, and we are constantly balancing short-term pressures with long-term goals. We are doing everything we can to soften any impact now while setting ourselves up for success in the long run. For this, our dialogue with the Executive Board is crucial and enables the Supervisory Board to provide counsel on difficult matters and questions. The regular strategic consultation with the Executive Board is another very important responsibility the Supervisory Board has. A tough decision to accelerate the cloud transition in late 2020 is foundational to everything we do today.
The strategy and product portfolio need to continuously advance as technology evolves, and in doing so, we can deliver the highest value to our customers. In 2024, we worked hard on AI, data, and cloud-based technologies to enhance the benefits SAP software provides to our customers. Key to SAP's strategy is its people. With our new people agenda driven by Gina Vargiu-Breuer, our Chief People Officer, we are focusing on creating a workplace where everybody feels supported, included, and able to grow. This goes hand in hand with our growth culture, where learning, feedback, and personal development are part of everyday work. This is about making SAP a place where you can do your best work, grow continuously, and feel proud to be part of the team. The Supervisory Board has made people a standing topic in our plenum to ensure we have a focus on this key topic.
As Supervisory Board, we stand behind this new people agenda. As the Supervisory Board, one part of our responsibility is to ensure that the company has the right structure in place to effectively support its strategy. With this in mind, we made some important adjustments to the board structure last summer, integrating marketing into existing teams and reshaping the sales organization to better align with our goals. I want to take a moment to sincerely thank Julia White and Scott Russell for their outstanding contribution during this transformation. Last week, the Supervisory Board announced that we have further extended the contract of Christian Klein to five years through April 2030. Further, we have also extended the contract of Dominik Asam for another two years to March 2028. With this, we ensure continuity and stability within the Executive Board, facilitating the ongoing execution of SAP's long-term strategy.
Christian and Dominik have played an instrumental role in our ongoing success. They provide steady leadership throughout the company's transformation journey. On behalf of the Supervisory Board, I would like to thank you and the entire Executive Team for your contribution to strengthening SAP's position as a global leader in enterprise technology. We also have the pleasure of welcoming Sebastian Steinheuser to the Executive Board as our new Chief Operating Officer. We are excited about the perspective and energy he brings to the role. Sebastian will have the opportunity to introduce himself to you in a moment. In addition, we have introduced a new layer of leadership, the SAP Extended Board. This group, made up of senior leaders from across the company, acts as a strategic advisory body and plays a crucial role in driving the execution of our AI-first, suite-first strategy.
The Supervisory Board sees the benefits of this new setup and has thus supported its introduction. Next, I would like to discuss Executive Board compensation. We believe the Executive Compensation System should motivate the Executive Board to implement the strategy and reward performance. In 2024, the new compensation system, supported by over 90% of shareholders in 2023, came into effect. This new framework strengthens the link between performance and pay. By removing restricted share units and introducing a deferral to the short-term incentive, we have made sure that the rewards are tied more closely to long-term value creation. Our goal is clear: to recognize strong performance, stay aligned with our strategic priorities, and remain competitive in today's market. Importantly, the system reflects what is important to our stakeholders, especially to our shareholders.
Share price performance plays a significant role in determining final payouts, ensuring that our executives are rewarded when long-term value is created. The compensation paid in 2024 reflects that: a year of strong performance, rising share price, and the deep commitment of our executive team. The Supervisory Board is committed to a framework that rewards performance, aligns with our strategic objectives, and remains competitive with our competitors who are based in the U.S. We made two adjustments last year to the compensation to ensure fairness. The impact of WalkMe acquisition was neutralized, and further, as described in 2023, expenses related to compliance matters were excluded. In 2024, the compliance adjustment had only a minimal impact. For 2025, we have also made some adjustments within the boundaries of the compensation system.
We have replaced operating margin increase with free cash flow in the short-term incentive and align further with investors' feedback here. To simplify the long-term incentive, we have combined cloud revenue KPI and software and support revenue KPI into one total revenue KPI. Finally, in the long-term incentive, we have replaced the women in executive roles KPI with business health culture index. This ensures a focus on our employees while complying with the recent executive order in the U.S. Now, I want to turn to a topic that is very important to the company and to the Supervisory Board, including me: chairman succession. Long-term planning is an essential part of our work on the Supervisory Board, especially when it comes to ensuring continuity and stability in leadership.
As my current mandate runs until 2026, the Nomination Committee has been giving this important topic of share succession careful and thoughtful attention. We have taken time to reflect on what the role will require in the coming years, focusing on a candidate who combines technological know-how, a deep understanding of our customers and markets, and a proven track record of leadership. Additionally, having solid experience with the German corporate governance system would be beneficial. The chair of our Nomination Committee, Gunnar Wiedenfels, has played a crucial role in facilitating this process. With that in mind, we intend to nominate René Obermann for election to the Supervisory Board in 2026, with the prospect that he would take on the role of chair in 2027. René brings with him not only a distinguishing international career, but also a strategic perspective, leadership strength, and governance experience that this role demands.
I'm confident he would be an excellent fit for the future. As we have seen in the past, a change in the chair position is a sensitive process for the entire Supervisory Board. Therefore, while going through this process, we aim to ensure a high level of continuity in the composition of the Supervisory Board. This continuity includes the whole Supervisory Board, including the chairperson. Therefore, I want to assure you that I'm fully committed to supporting a smooth and seamless transition. To ensure this, in 2026, the Supervisory Board will propose an extension of my term by one year in order to support the handover and help set the stage for a successful next chapter. The Supervisory Board hopes that we can count on your support at next year's annual shareholder meeting on this plan. The work of the Supervisory Board sometimes is also about compliance.
One thing we are very clear for all of us: SAP is to be conducted in a compliant and ethical manner. A strong compliance-driven culture is the foundation of our integrity and long-term success. We expect Executive Board members to role model this culture and, by doing so, lead by personal example. In August 2024, we were informed that Jürgen Müller may have engaged in inappropriate behavior. After learning of the accusation, we engaged two external firms to support the investigation. With this background, the Supervisory Board and Jürgen Müller came to a mutual agreement that he resigned from the Executive Board. Jürgen Müller received no severance payment. Today, we are holding this meeting virtually. After hosting in-person shareholder meetings for the past two years, we have chosen the virtual format for this year's Annual General Meeting.
As Europe's leading software company, it feels only natural for us to explore digital formats that reflect who we are and how we work. Our goal is to make the AGM more accessible to a broader audience while fully safeguarding shareholder rights. This format gives more stakeholders the opportunity to engage no matter where they are. To continue offering this flexibility, we are asking for your support to extend the authorization to hold virtual meetings for another two years. Going forward, the Executive Board and Supervisory Board will carefully consider the format each year, always taking investors' feedback into account and choosing what best serves transparency, accessibility, and meaningful participation. In closing, I would like to thank my colleagues on the Supervisory Board for great teamwork, intellectually and emotionally honest dialogue, and the mutual trust.
We have faced many important and complicated decisions and focused on coming to the best solution for the company. Thank you, colleagues. SAP is in a strong position and has a bright future. Dear shareholders, thank you for your trust and investment in SAP.
Many thanks, Pekka, for your report. Ladies and gentlemen, Pekka Ala-Pietilä has also talked about the Executive Board and its composition. The Supervisory Board appointed Sebastian Steinheuser as a new member of the Executive Board effective February 1, 2025. He's SAP's Chief Operating Officer and heads the Board Area Strategy and Operations. I'd like to welcome Sebastian Steinheuser to the meeting, and I would like to ask him briefly to introduce himself to our shareholders.
Ladies and gentlemen, dear shareholders, dear customers, partners, and employees, I'm very pleased to be here at today's Annual General Meeting as SAP's Chief Operating Officer, and I would like to introduce myself briefly. My name is Sebastian Steinheuser. I have a degree in Business Administration. Before SAP, I worked at the strategy consulting Boston Consulting Group. There, I supported companies in the definition and implementation of corporate digitalization and simplification strategies, amongst others that included SAP. I'm passionate about adapting business models, processes, and strategies to new complex requirements using technology and artificial intelligence. Therefore, joining SAP in 2020 was a very deliberate and also very simple decision. I was aware of the upcoming change in strategy, and I was absolutely convinced that the path SAP was taking was the only right one. In 2021, I took on the function of Chief Strategy Officer.
In that function, I was primarily responsible for the further development and implementation of our corporate strategy. The growth areas of business transformation management, business network, and sustainability were also part of my remit. I then became Chief Strategy and Operating Officer in 2024. As a result, my area of responsibility expanded to include business operations, processes, and IT, as well as the partner network and commercial functions. The sheer width of tasks enabled my team and me to implement our strategy in all relevant areas of the company, with one overarching goal: to make SAP the world's number one in the field of enterprise applications and business AI. In recent years, we accelerated the transition into the cloud, tapped into new growth areas, strengthened our suite offering, and placed a strong focus on artificial intelligence. The result speaks for itself.
Our customer satisfaction is increasing, our cloud revenue has doubled since 2020, and our profit, as you have noticed, has risen significantly. Our strategy delivers results. That motivates us and shows us we have the right track. In February 2025, I was finally appointed to the Executive Board as Chief Operating Officer. Since then, I have been in charge of the Strategy and Operations Division. My focus remains on implementing our strategy and on simplifying our internal processes. I'm convinced at SAP we understand better than any other technology company in the world the challenges our customers are facing today. In order to consistently implement our strategy, we are should in the next era of technology-supported corporate management at the beginning of 2025.
The interplay of data with the newly launched Business Data Cloud, our suite of applications, and AI is the key to success for customers and for SAP. My second priority is to simplify our internal processes. What does that mean in more concrete terms? We want to further improve the day-to-day work of our teams through automated processes and utilize SAP products above all artificial intelligence. Let me give you a few examples. Thanks to Joule for Developers, our AI assistant for software developers, our teams have been able to make their work processes up to 20% more efficient. In HR too, Joule helped define over 100,000 employee targets, and that's just one example. In our quote-to-cash process, we recorded more than 1 million minutes saved thanks to the use of AI made by SAP. In short, we are utilizing the potential of AI within SAP too.
We are often the first customers of our own applications, as in the case with the SAP Business Data Cloud. This allows us to see immediately what works and what has to be improved in close cooperation with our development department. Ladies and gentlemen, as you can see, we want to become even more efficient and more innovative. I'm sure if we continue along this path together, we can implement our strategy even more effectively and create considerable added value for our customers, partners, and employees, and of course for you, our shareholders. Every morning, I get up with a firm conviction that as a team, we are getting closer to our goal of becoming the world's number one for enterprise applications and AI. Thank you for your attention and your trust. Thank you, Sebastian.
Dear shareholders, before we move on, just a quick update on the attendance count at today's virtual AGM. From the registered share capital of the company in the amount of EUR 1,228,504,232 divided into 1,228,504,232 no-par value shares, 685,417,915 shares with the same number of votes are present here by the proxies appointed by the company. That translates into 55.79% of the registered share capital. In addition, we've received postal votes for 2,695,949 no-par value shares, which translates to roughly 16.34% of the registered share capital. In addition, we have registered shareholders and their proxies with 6,787,287 no-par value shares locked in via the shareholders portal. Up until now, they have not cast their vote, neither postally nor have they appointed proxies. In sum, this equals 892,901,151 no-par value shares with the same amount of votes or 72.68% of the nominal share capital.
Ladies and gentlemen, I now call on SAP CEO Christian Klein to address you. His speech was published on the 6th of May on our annual general meeting website.
Dear shareholders, dear colleagues, dear friends of SAP, good morning. A very warm welcome to all of you from Walldorf, and thank you for taking the time to attend our virtual annual general meeting. Looking at the world today, the past 12 months were highly eventful for all of us. Billions of people around the world elected new governments. The geopolitical landscape changed. Competition between the major economies of the world increased and has intensified further in recent weeks. Especially in such turbulent times, you need to keep a cool head, filter the substance from the noise, follow a clear plan, spot new opportunities, and seize them for our company, our SAP, and that's exactly what we are doing.
Not just recently, but for a good five years now. Even if some difficult decisions are not always met with unanimous approval, this means taking responsibility because at the end of the day, what counts is the long-term success of our SAP. In a technology market that is becoming increasingly competitive and is characterized by many national interests, long before the developments started to pick up speed, we set out a clear long-term strategy. We focused on those things that are in our control. We systematically improved them, and we worked on shaping our future. Today, SAP's cloud revenue is approximately EUR 5 billion per quarter. Cloud revenue makes up more than half of total revenue and is our core business. The overall share of recurring revenue has reached an impressive 86%, and our order backlog has hit a record high.
In other words, SAP is healthier and more robust than ever. This strength will keep us successful as we navigate the challenging environment we find ourselves in. 2024 was another very good year for SAP. We are making business processes more digital, enterprises and the public sector more productive, supply chains more resilient, and national economies more competitive. We are providing exactly what is in demand today. New hardware alone cannot digitalize a business or a public administration, but software infused with artificial intelligence can. We deliver the intelligent logic that enables economies and enterprises to grow faster and become more productive. A well-positioned company like ours can seize the opportunities that lie in any transformation. In the 2024 fiscal year, we achieved our ambitious targets in the cloud business. Starting from an already very strong baseline, cloud revenue growth accelerated even further.
The same goes for another key metric. That is our backlog of cloud orders for the next 12 months, which also expanded. This is the current cloud backlog. Currently, none of our main competitors is growing its cloud business as fast as SAP is. For the first time since 2018, last year, our total revenue returned to double-digit growth again. At the end of 2024, the total amount of committed revenue from cloud contracts, the so-called total cloud backlog, was 40% up on the previous year at EUR 63 billion. That is a new record high. It means that we can plan and predict large parts of our future revenue streams with confidence. The first quarter of the new fiscal year showed once again just how robust our business is. In a volatile macroeconomic environment, we delivered strong results.
Our total revenue and our cloud backlog recorded double-digit growth once again. A key contributor to our strength has been the transformation program that we launched in 2024. It kept us on a path of continuous reinvention. For five years already, we have consistently geared SAP towards new technologies, and we have reoriented our business model to focus on integrated cloud software. With the 2024 transformation program, we have once again channeled additional resources into strategic areas, this time primarily into business AI, that is artificial intelligence for business applications. It also allowed us to boost efficiency within SAP. Part of the transformation program includes restructuring, directed specifically at areas that will be reshaped by artificial intelligence. Our aim was for the process to be as socially responsible as possible. In Germany, we met our restructuring targets solely through reskilling, early retirement, and voluntary leave programs.
This is something I really want to stress here. The decision to further transform SAP was both correct and necessary. Looking back, this is now clearer than ever. We've acquired new talents and expertise. We brought new impetus to the company. We created scope for investments in our future, and we put greater emphasis on performance management at SAP. Our aim is to give every single employee transparent feedback on their performance to help them with their professional growth. Because in the face of tough global competition, we need to keep adapting. It is on us to continuously self-reflect and reinvent ourselves and to challenge the status quo. If not, if we don't, we will rapidly fall behind. Let's now take a look at the non-financial key indicators in 2024. The customer net promoter score rose by three points year- on- year to 12 points.
This means our customer satisfaction with SAP solutions has increased. However, the employee engagement index fell in the first half of 2024 and then picked up again in the second half of the year. We expected the temporary decline, the reorganization of the company, the return to three office days per week. That brings change for many employees. We are convinced in the medium and long term, it is the only way to keep SAP at the top of the competition. Finally, our CO2 emissions remain stable at 6.9 million tons, and this despite the fact that SAP is growing significantly. We are becoming increasingly successful in decoupling our growth from CO2 emissions. Our achievements in 2024 are the product of an effective strategy and a lot of hard work every day, every quarter. One of the key pillars of our success is innovation.
With SAP Business Suite, we have created over the past few years a compelling and wide-ranging software offering in the cloud. Our SAP Business Suite is leading on our market. It covers our customers' mission-critical business processes end to end and for all corporate functions, for example, from order generation in sales through production and supply chain planning to revenue recognition and financial reporting, or also in supporting functions such as human resources, recruitment of staff, monthly payroll accounting, employee training and development, career planning, all the way to offboarding. Our business suite covers all these processes and many more, all as a seamless experience, all insights at a glance, fully connected, systematic, efficient, and always with the very latest innovations. That's why the most important, the world's most mission-critical data can be found in SAP systems, and that was the starting point for our next step.
We enhanced SAP Business Suite significantly over the past year and created SAP Business Data Cloud, in short, BDC. It is one of the biggest innovations in SAP's history. BDC is the answer to one of the greatest challenges companies face today. Not only to bring huge volumes of data, both SAP and non-SAP data together in one place, but also to harmonize that data. In other words, to make it uniform and consistent. This harmonized data layer is the key. It gives companies a 360-degree view of their business and enables them to manage it based on insights from external and internal data. It helps them better understand their customers and to tailor products and services to their specific needs. It also enables them to match demand and supply more closely in real time or to analyze their workforce's skills profile and develop it to meet future needs.
We've prepared a little video about this.
Data is the bedrock of all modern enterprises. It fuels AI's algorithms, and it's often the differentiator between a good decision and a bad one. IDC's analyst, Micky Noordser, says putting business data in context is badly needed in the digital economy. Unfortunately, our data is structured and unstructured. It's everywhere within and even external to our organizations, and it's often hard to access and bring together. Unifying an enormous amount of data while safeguarding its meaning and context is a huge challenge. SAP Business Data Cloud is one of the company's biggest innovations, with early adopters around the globe. Henkel, a longtime SAP customer, is a global leader in chemical and consumer products. We rely on our SAP data investments for industry-leading semantic modeling and enabling a more agile approach to delivering clean and governed data.
With SAP Business Data Cloud, we can take it to the next level. The solution empowers users with a holistic view of enterprise and external data from a wide range of sources. It builds a strong semantical layer with the context, connections, and meaning of data. It is also a key pillar for high-performing AI agents, autonomous applications that assist humans with concrete and comprehensive workflows. The most important data in the world is the SAP data that most organizations have. How do you get good quality out of that data so that you can go on and build those analytics use cases or those AI applications? We can really now unlock business value in a way that we could not do before
There is a new solution for this challenge, amplifying the value of AI in the world's leading enterprise software ecosystem, a new center of gravity for business data, SAP Business Data Cloud.
You saw it in the video and you heard it. SAP Business Data Cloud gives our customers a holistic view of their company like never before. It is also a vital foundation for powerful AI agents. You can think of AI agents as digital coworkers who help human colleagues with concrete workloads. Our AI assistant, Joule, can connect AI agents and orchestrate them. They can then carry out complex tasks autonomously and across departmental boundaries. For example, Joule can orchestrate AI agents to find overdue invoices, identify what the issue is, resolve it, and make sure payment targets are met. When it comes to AI agents, SAP has the edge over the competition today. Here's why.
Because we have what it takes. Three things. First of all, a harmonized data layer. That's SAP Business Data Cloud. Second, smart embedded AI for business applications. That's SAP Business AI. Third, fully integrated applications for end-to-end processes. That's SAP Business Suite. We are the only provider to have all three pillars in place, and this puts us in a great position to lead in the market for AI agents. This is how SAP Business Data Cloud cements our reputation as a leading AI company. More than 34,000 cloud customers are already running SAP Business AI today, and that makes us very proud. AI from SAP is relevant, reliable, and responsible. That makes it very valuable for our customers. SAP's commitment to responsible AI is far from being just a phrase. Back in 2018, long before AI went mainstream, we drew up an ethics policy for artificial intelligence.
In 2024, we updated it to align with the principles outlined by UNESCO. These principles include, for example, transparency and explainability, fairness and non-discrimination, data protection, safety, and security. Many important rankings now see SAP as the world leader in ethical AI. We are delighted to receive that recognition. I'm sure that this success stems in part from our European roots. Values such as data privacy, transparency, and data security are in our DNA. We cherish and value that European heritage. Yet we are concerned about the future of our business location here. We hope Europe and Germany will move quickly to set the right course to full digitalization, a unified single market in Europe, and to reduce excessive bureaucracy and regulation. These changes are particularly relevant for us as Europe's only major tech company, but they are also key to the ability of every other industry to compete.
We hope that Europe will remain an attractive base from which to operate, not just for SAP, but for many other global enterprises as well. Ladies and gentlemen, I've talked a lot about innovation, and I've mentioned the economic environment in Europe. Innovation is a central pillar of our success, but we need to bring that innovation to the market to create value for customers. We work every day to make that happen. We have defined the same goal for all our customers: to bring them to our business suite, our comprehensive offering of first-class applications, data solutions, and powerful AI capabilities. There are two journeys to SAP Business Suite. One is Rise with SAP, tailored to our installed base. The other is Grow with SAP, which targets new customers. Two journeys, one destination. We always go at a pace that suits the customer.
We help companies transform their businesses and their business processes step by step. We help them adopt efficient business models and worldwide best practices. We take care of the specific needs of the different functions in a company, for example, finance, supply chain, or human resources. With our SAP Business Technology Platform, we enable our customers to develop their own extensions to SAP software. With that, we make sure that customers can benefit from everything the cloud has to offer: modular, yet closely integrated applications, zero maintenance, no more complex upgrades. Instead, automatic software updates every quarter, updates that bring the latest innovations that give our customers a competitive advantage and enable their business to grow. With our strong offering, we once again won many customers last year. The list of deals we closed reads like a who's who of the world's leading companies.
Let's start with the technology industry. NVIDIA, one of the market leaders in AI. In 2024, they chose Rise with SAP. Going forward, NVIDIA plans to use smart SAP solutions to manage its highly complex supply chain. IBM, one of the world's longest-standing tech companies, began its transformation with Rise three years ago. In 2024, it went live with SAP SuccessFactors, our HR management solution for its over 275,000 strong workforce. Finally, Mistral AI and Databricks, both leaders in the fields of AI and data, chose Grow with SAP in 2024. Let's turn to the automotive industry. Robert Bosch and Schaeffler chose Rise in 2024. Both General Motors and the auto parts manufacturer Marlin International went live too. For auto companies, Rise is an important step they can take to remain agile and competitive. It is the gateway to more solutions from our SAP Business Suite.
Our business suite, sorry, solutions like those for digital manufacturing or advanced supply chain management. Let's take a look at the energy sector. EON, BP, Total Energies are among our top customers in 2024. For these companies too, Rise opens the door to more SAP solutions, like those for predictive plant maintenance and sustainability management. Last but not least, let's look at retail. Schwarz Group, home to the Lidl and Kaufland supermarket brands, chose Rise. Also, the drugstore chain DM, as well as Mercado Libre, South America's online marketplace like Amazon. Rise, Grow, and SAP Business Suite enable our customers to focus on what matters most in challenging times: more productive processes, business models for more growth, more resilient supply chains, no matter what new tariffs, regulations, and changes may come. SAP solutions cover all this and much more in over 130 countries around the world.
To ensure that our customers can start realizing all these benefits quickly, we equip them with a portfolio of digital tools, our solutions for business transformation management. In 2021 and 2023, we integrated Signavio and LeanIX in our portfolio, with SAP Signavio can visualize, simulate, and redesign processes. LeanIX is used to create and optimize architectures. In 2024, then, we acquired WalkMe. This is a solution that enables users to get up to speed quickly with our cloud solutions and innovations, for example, through interactive assistance and training. With that functionality, WalkMe closes a gap in our portfolio. Ladies and gentlemen, whether it's about bringing innovation to our market or engaging with customers, our achievements in 2024 have been impressive and clear. The global financial markets, too, have acknowledged this success. Our stock performed strongly throughout 2024. Its gains, almost 70%, significantly outperformed the DAX and the NASDAQ 100.
In recent weeks, the financial markets have been volatile. Nonetheless, SAP's stock price is about 50% higher now than at the time of last year's shareholder meeting and has more than doubled since the AGM in 2023. Besides the increase in the share price, you, the investors, also benefit from SAP's strong performance by receiving a dividend. Today, the Supervisory and Executive Boards propose a dividend of EUR 2.35 per share. This represents an increase by 6.8% or EUR 0.15 on that of last year. In addition, under our ongoing share buyback program, SAP intends to repurchase up to EUR 5 billion in stock. Under this program, we are returning capital to our shareholders and are helping offset the dilution resulting from employee stock purchase plans. You can find information on the amount of stock we repurchased in 2024 in our integrated report. The program continues in 2025.
With the current shareholder approval, since the beginning of this year, we have repurchased around 1.9 million of our own shares for about EUR 445 million. This amount represents approximately 0.16% of our stock capital. We will buy back more shares in the course of this year, and we will keep you informed about these transactions on our website. Our success in 2024 proves that our strategy is the right one. We had the courage to realign our business model in recent years and implement a comprehensive transformation at all levels of our company. Today, SAP is the leading provider of enterprise application software and business AI. C-Suite executives see us as the leading AI company in Europe and among the top five in the world, and surveys by the most respected market research companies confirm that we are the global number one in enterprise application software.
These achievements are the result of hard work, dedication, and a strong willingness to embrace change. On behalf of the whole Executive Board, I would like to thank our colleagues across the world and our customers and our partners for a very good year 2024. I would like to give you, our shareholders, my thanks for the confidence that you place in our SAP. We will do our very best to continue earning it and to write the next chapter of SAP's success story. We are looking to the future with confidence. Although in the current market environment, it's hard to make predictions, several key factors indicate that we remain on track to reach our 2025 guidance. These factors are our solid first quarter, the large share of recurring revenue in our total revenue, our high order backlog, and above all, our customers' undiminished interest in our products.
Now, more than ever, businesses around the world need digital solutions that make them more productive, more adaptable, and more agile. The current economic environment provides additional incentives to move to the cloud sooner and faster. When choosing a partner for this journey, our customers turn to us, to our SAP. In 2025, we will make SAP's foundation even stronger, not just for the short term, but with the long term in mind. We will build on the success of recent years and continue to invest in innovation, in our market strategy, in simplification and efficiency. As we say at SAP, the best is never done. That is, we will keep raising the bar time and time again, every day, every month, every year. Because to stay up there with the best, you have to set your sights higher. That is our aspiration and our promise.
I look forward to taking your questions. Thank you.
Thank you, Christian. I'm now calling, in addition to item one, all other agenda items, that is to say, items two to eight in the invitation to the meeting that is available at the Bundesanzeiger and on our website, and which also contains the management proposals. Propose that a dividend of EUR 2.35 per share be paid from SAP's earnings for 2024. Please note that the number of shares carrying dividend rights increased prior to today's date. As advised in the meeting invitation, the Executive Board and the Supervisory Board have therefore adjusted their proposal on the appropriation of retained earnings to reflect the new number of shares entitled to dividend. However, the proposed distribution of EUR 2.35 per share has not changed. The number of shares entitled to dividends on the day of today's Annual General Meeting is 1,167,394,519.
The Executive Board and Supervisory Board therefore propose the following amended resolution: the retained earnings from the 2024 fiscal year in the amount of EUR 10,080,526,084.40 in the annual financial statements be applied as follows: payment of dividend in the amount of EUR 2.35 per no-par value share carrying dividend rights. This corresponds to a total payout of EUR 2,743,377,119.65, transferred to other revenue reserves EUR 1.7 billion, carried forward of the remainder to new account. That's EUR 5,637,148,964.75. This amended proposed resolution was also published on SAP's website and can be accessed there in the Annual General Meeting of shareholders section. When we come to the votes later, the vote on agenda item two relates to the amended version of the proposed resolution that has just been read out.
Under the other items on the agenda, we propose the formal approval of the acts of the Executive Board and Supervisory Board in the preceding fiscal year, the election of the auditor, and the approval of the compensation report. In addition, under item seven, pardon, we request your approval to renew the two authorized capitals one and two. The current authorizations from the general meeting for issuing these two authorized capitals are set to expire on May 19, 2025, and therefore need to be renewed. The basic terms and conditions for the two new authorized capitals will essentially mirror those of the existing authorized capitals. Lastly, agenda item eight proposes renewing the authorization granted by the general meeting to continue holding virtual general meetings in the future. This authorization is limited to two years.
As stated earlier by Pekka Ala-Pietilä, this new authorization does not mean that we have already decided to hold future general meetings of shareholders in a virtual format. It simply gives us more flexibility in deciding the format of future general meetings and to have an option to decide. We therefore ask you for your approval of this proposal as well. Ladies and gentlemen, we now come to the discussion, the formalities of which I already explained earlier. Just to summarize, if you have not already done so, you can still register to speak on the shareholder portal. Our technical team will then ask you to do a quick technical functionality test. Once completed, please stand by for your turn to speak. I will call on you and connect you live to the meeting. We will take down your questions and compile them for response.
Questions relating to the Supervisory Board's responsibilities will be addressed by Pekka Ala-Pietilä and me after consultation with the Executive Board. If necessary, we will repeat this process until all your concerns have been raised and we have answered all your questions. As mentioned earlier, there is currently no set time limit for asking questions or speaking. However, I would greatly appreciate it if, for everyone's benefit, you could aim for around 10 minutes. Ladies and gentlemen, I already have the first request to speak. I now invite Ms. Christiane Hölzl for DSW the floor and ask her to be connected. After her, Markus Kienle for SDK will be called on. Please be prepared to speak.
Ms. Hölzl, please. Thank you very much, Madam Chairman. Ladies and gentlemen, my name is Christiane Hölzl. I'm the general manager of DSW, Deutsche Schutzvereinigung für Wertpapierbesitz.
Today, I speak on behalf of those shareholders who have transferred their voting rights to the DSW. I will try to stick to the 10 minutes, Madam Chair, but there is a lot to discuss, so I hope I will make it happen. Ladies and gentlemen, SAP not only supplies software, but also returns every year, every quarter. The share price is rising, the dividend as well. The payout ratio is, all in all, EUR 17.7 billion of dividends have been paid out in the last few years, and share buybacks have carried out. Nevertheless, today, we only meet in a virtual format today. That is a pity. I know you are the biggest European technology company, and therefore, probably you also want to try out this distanced format.
Let us be honest, now demonstrate that you can do it, but then let us meet face to face again next year in order to discuss in person, and then also, of course, to enjoy our applause. Or even better, why not try out a hybrid format, which also works well in other countries? Here, once again, you should also be a pioneer in establishing this format in Germany. With that, let me turn to the business. Mr. Klein, SAP increased its cloud revenue significantly, and that means the pipeline is well prepared for next year. The analyst expectations have been exceeded with your figures in 2024, and you are the most valuable company in Europe. Restructuring is taking effect, especially in the first quarter. The restructuring costs, however, were high, EUR 3.2 billion.
That's after €2.5 billion in the previous year, which is why the operating profit has decreased, and of course, also the EPS. On the whole, 10,000 jobs have been or are affected. Now, how high were the actual restructuring costs in 2024 compared to your initial estimates, and which long-term effects do you still expect from the restructuring program that has been implemented? In 2023 and 2024, you took over WalkMe and LeanIX at €1.1 billion and €1.2 billion, quite costly. Now, what do you expect from this in financial terms, also in terms of synergies, and why do you need WalkMe in the first place? Don't you have already an application, namely Joule, which could have been extended or upgraded, rather than spending a billion-dollar or euro amount for another takeover?
Ladies and gentlemen, the U.S. president is turning the world upside down, announcing tariffs and other trade barriers, causing uncertainty amongst consumers and companies, and which also causes certain hesitance in terms of investments, also when it comes to buying major software. Mr. Klein, the Spiegel reported that you met Mr. Klump and had a constructive dialogue with him, which is possible, you said. Now, in your view, what do you think are the risks related to geopolitical and macroeconomic uncertainties for SAP? Will you be directly affected or indirectly by possible tariffs due to the dampened economic outlook? Are we immune to the trade conflict? Are we even going to benefit from it? Because a European technology group will rather be trusted than U.S. competitors. Now, the operating margin development in the cloud segment in the fiscal year 2024, how do you view this compared to your own expectations?
At which specific actions are taken in order to further increase the profitability of a cloud business in a sustainable manner? How do you position yourselves compared to competitors such as Salesforce, Oracle, or Microsoft, especially in terms of profitability of the cloud transformation? Ladies and gentlemen, good corporate governance is a key to sustainable success of a company. According to a study just published, here, SAP still has some catching up to do. No, what's even worse, here we're falling by the wayside, and we're only in the lower third of DAX companies in this regard. This is not commensurate with SAP's standing. There's once again the staff turnover, which was once again too high in 2024, at least on the Executive Board level. Because on the level of the Supervisory Board, you really caused a calm surprise, Mr. Pietilä. Congrats on this. Winning Mr.
Obermann as your successor, that really was a good idea. Next year, he's to be elected to the Supervisory Board, and that as of 2027, he's to take over the chair. That is a good idea because at Telekom, at Airbus, he already demonstrated that he can lead major companies, and he will be given a sufficient transition time to familiarize himself with the topic. Will he then step down from the Supervisory Board of Airbus in 2027 to be fully available to SAP? Did you discuss that with him? On the Executive Board, however, we saw a major further turnover. We had leavers in the last two years, but now with the contract renewal of Mr. Klein and Mr.
Asam, you ensured continuity on the Executive Board, which is important, which is good, because the company and the Chairman of the Supervisory Board to come will thus have a solid basis, at least on paper. Changes on the Executive Board, however, will always affect the company, its employees, and they also will cause costs that I think are not insignificant ones at SAP in this case. Therefore, let me ask you, which amounts were paid out to how many Executive Board members which left the board in the last five years? Just looking at last year, the contracts with Mr. Russell and Mr. Russell, Ms. White had been terminated, which had been extended only one year ago, and there was not even no substitute available. EUR 9 million were paid for Ms. White and EUR 12.6 million to Mr. Russell. And why do we pay a severance for Mr. Russell?
Because he stepped down voluntarily. Why is he given a severance payment if it was a consensus decision to terminate? Why do we now add an executive board or extended board? Usually, more bodies and committees rather increase complexity but do not improve the efficiency. Which additional costs will SAP incur with this additional extended board? One more thing on your compensation report. Forty pages, ladies and gentlemen. That was not really a pleasure to read, ladies and gentlemen. I think you have one of the most complicated compensation systems in Germany. Now we can see how your compensation is set up and how much you earned, Mr. Klein, last year. Was it only EUR 10 million, or was it significantly more? A compensation report which nobody understands does not really cause trust. Therefore, Mr.
Pietele, reduce the system, make it easier and simpler, and make sure that it can not only be understood by compensation experts, but also by us, the owners of the company. In this context, one more remark. This weekend, you announced that you will give up central diversity targets because, as a company with a strong presence in the U.S., you have to respond to current changes, for example, the latest legislative changes or the decisions of the U.S. president, Mr. Trump. You eliminated your female ratio target and replaced it kind of by a different one. Now, thus, you will certainly eliminate short-term risks for the important business in the U.S. If you sacrifice diversity, you not only lose talents, but above all, you also lose your credibility.
Diversity is a competitive factor, and in the past, as part of your materiality analysis, it had been one of your central targets, and now, all of a sudden, you're pushing it into the background. Do you have an updated analysis on reputational and rating risks that you have undertaken before this decision? Because you're also part of various sustainability indexes. This pragmatic adjustment, how does this align with your statement so far, namely that you want to foster corporate culture, which is very much pillared on diversity and inclusion? How does it match your people's agenda? This brings me to the agenda. Under item number seven, you ask for authorization of two authorized capitals. You already have a conditional capital. All in all, we're talking about 50% of the current share capital. That's more than sufficient. Why do you need this for?
Did you already use such authorizations in the past for us, the DSW? The overall amount of this authorization is too high, and therefore, we will vote against these two proposals. Ladies and gentlemen, and with that, let me close on one matter, which I also started out with. The agenda, amongst others, also includes a resolution on the renewal of the authorization to hold virtual AGMs. As you know, DSW, and I personally have a critical view on a virtual format. It doesn't even get close to an in-person meeting and is highly distanced. The attendance, 72 or 73 last year- this- year, is very small. Now, what are you planning for the future? In 2026, we would love to meet Mr. Obermann in person in Mannheim on site. Are you going to have an in-person meeting again next year?
Which criteria are the relevant ones for you? For me, an in-person meeting is also a sign of appreciation of the administration towards its owners. Therefore, you should become an exemplary company next year again by holding an in-person meeting, or why not try out the hybrid format, or as you would call it, bring out your best? Thank you very much for your attention.
Thank you, Mrs. Hölzl. Next, I call Mr. Markus Kienle. After him, Henrik Schmidt from DWS. Please, can we connect Mr. Kienle? Mr. Kienle, do you have the floor? Dear members of the Executive Board of the Supervisory Board, I'm Mr. Kienle. I'm the board of the SDK. At the revenue level, you've been able to increase revenue considerably. Both applies also to profit. You also increased the payout for the shares. Profit after tax decreased by almost 50% to EUR 6.8%.
What is essential, essentially, that is due to the restructuring cost in the amount of EUR 3.2 billion. Without that, you would have achieved EUR 8 billion, which is considerably above the previous year. Here, we would like to say thank you to the employees for what they have done in the last year. Please pass this on to all the employees. If you look at the first quarter, you seem to be able to prove that you were successful. Please indicate where the restructuring costs truly applied. Would that also include cost savings, or would the restructuring and the allocation lead to higher revenues and higher profit? If the restructuring program also results in cost savings, please indicate them on a yearly basis.
If we don't stick to the operating profit, but if you compare it at the earnings before tax, you can see that even if you eliminate the restructuring costs, and if you look at the tax rate of 33%, we can see a profit after tax of roughly EUR 5.2 billion with a return on equity, which is considerable, which is still below the previous years, despite the fact that the revenues were up. What are the reasons for that? What is the return on equity that you deem appropriate for a company such as SAP? Cloud revenues was considerably increased in 2024. Which share of that is due to new customers? What is due to price increases, and what is due to the shift to cloud? What's the margin you achieve here compared to major competitors? The game changer seemed to be AI applications.
What's the share of customers who use AI tools? You acquired WalkMe. What does this company do, and what is its contribution? This led to a negative contribution. Almost half of the purchasing price accounts for the goodwill. Why does it make sense to acquire this? What is the return on equity you expect for this acquisition? What is the imagination linked to the goodwill here? You want to measure efficiency of this dual user. How do you measure it? The tariffs of the U.S. are a threat to the global economy. Are you affected by the tariffs policy of the U.S.? If so, what are the implications on revenues and profits? Do you expect immediate effects? Under the pressure of the U.S. administration, you eliminated women in executive roles by this health index. What are the actual content of this index?
Over the past years, against the trend and against good corporate governance, you hold the AGM in presence. This year, you've chosen a virtual format. We won't agree to your proposal here because we don't see a virtual format as a full AGM, because we can't properly interact. It's just not understandable why you don't enable a chat function so that the shareholders can interact amongst each other. That's essential because for some motion, this is essential. Sometimes a quorum is required to file a motion. A virtual AGM is just appropriate if there is a pandemic, for instance, or emergencies. That is why we want to make sure that this format is only used in case of emergency. Even if there is an emergency, we expect certain conditions. We think that a parallel way of launching questions should be enabled.
You could either table questions beforehand and at the same time table the questions during the meeting. We would like to ask you to modify these applications. The virtual AGM is sterile. You don't get the mood. You can't feel the pulse of the shareholders. Even an AGM should not be influenced by catcalls of the shareholders. We should still give the shareholders the opportunity to voice their opinions, to live up to different expectations. We propose a hybrid format. That is the ideal format in our view. We can see that the advisory board has used a consultant to assess the remuneration. Has this remuneration consultant been the same that has consulted you in the drawing up of the remuneration report? If so, does it make sense to use the same consultant here?
Because would such a person ever come to the conclusion that the remuneration system is not appropriate and criticize their own proposal? Mr. Russell and Ms. White have left the board. Why is that? Do not just answer with mutual agreement. Are the payments made to them part of the restructuring payments? If we understood it right, Mr. Müller has been accused of inappropriate behavior. What exactly are the claims, and have they been confirmed? We will agree with the appropriation of profits and also the approval of the act of the board and the supervisory board and executive boards. We approve of proposal number five, and we will reject 7.1 and approve 7.2. The reason being that both of the proposals together will account for more than 40% of the share capital.
The SDK contributes reserve capital totaling 25% of the share capital, of which a maximum of 10% is subject to the exclusion of subscription rights. We approve 7.2 because that enables more flexibility for the company. Finally, we wish the board all the best for 2025. Vielen Dank.
Thank you very much, Mr. Kienle. I will now call Henrik Schmidt of DWS. Please, Jörg Heidmann, be prepared. You will be the next speaker after that. Can we please switch on Mr. Schmidt? You have the floor, Mr. Schmidt. Thank you very much, Dr. Rotsch and Pekka Ala-Pietilä. Christian Klein, ladies and gentlemen, members of the executive and supervisory boards, I am Henrik Schmidt. I represent DWS and important funds that hold SAP shares. For us, as a long-term responsible investor, the exchange with you, the members of the boards, is important during an AGM.
I would like to join the thanks that have been given to your staff and to the members of the boards. I would like to convey that here. The last business year was marked by lower inflation rates, and the strategic conversion to the business model to the cloud business was driven. A higher share of recurring revenue is the result. Mr. Klein mentioned that. It's interesting for us to hear what are the important drivers of the cloud growth and what are the objectives that you had in recurring revenue and the growth of revenue accelerated and double-digit growth, and what influence could an increase of the macroeconomic uncertainties have? What are your prospects for transaction-dependent revenue in the current environment? The topic of AI is an important area of growth, which has also been subject to discussion about sustainability because of the high investments.
We would like to know what effect the newly appearing Chinese suppliers in AI have and how you are trying to monetize the risk in AI. The partnership with the US company plays a role here, and also companies from Europe or Asia. Migration to the cloud in the last fiscal year has resulted in restructuring in the company. That has been mentioned too. What effect does the restructuring have on employee satisfaction? I would like to have a little more detailed information about the change in the employee satisfaction. Where have there been the greatest cuts, and where are new jobs created? What financial implications result? Finally, the conversion of the business model to the cloud also has financial impacts, significant impacts. The operating margin, according to IFRS, has gone down, among other things, to only 13.6% last year.
How do you see the future development, and what are the most important drivers for the expected increase? Compared with some competitors, the spending on marketing and sales, as given in the annual report, is relatively high. Could you increase efficiency in this area, perhaps? As a result of the acquisitions in the past 10 years, the cross-selling potential of SAP has increased significantly. Does its development require a realignment of the sales? And what potential is unleashed also in terms of margin development in the future? The restructuring program in 2024 has had a negative impact on the free cash flow. How should the development continue in the next two years? I will now come to the financial targets for 2025 and the current uncertainties in the markets. In what areas is your conviction for further growth the highest, and where do you see the highest risks?
What guidance can you give us on the business year 2025 and beyond today? The success of SAP has catapulted SAP to the top of the European share price development. SAP is now the most valuable European company. In 2024 alone, the increase in the stock price was 69% at the end of the year, including dividend more than 73%. In your business report, you also write about the development importance of the SAP for the DAX development, and SAP contributed 40% to the increase of the DAX. In that context, you are addressing the increase from 15%- 10%. SAP has been the victim of the cap that was set. The question is what position we should take. However, we think that the capping of the weighting of individual companies in an index like the DAX makes sense, especially because this has no effect on the index-oriented funds.
As you write on page 12, you're in contact with important decision-makers. Who are they? Do you really consider moving to another stock exchange location? Let's come to the mechanisms and structures of good corporate governance. I would like to focus on three aspects: the changes on the board, remuneration, and the succession on the supervisory board. In the past fiscal year, three members of the board left for various reasons, but before their contracts expired. Scott Russell, Sales and Marketing, Julia White, ended in late August 2024. The press writes that this was a consequence of the success in the cloud. However, the contracts still give rise to questions. Under what assumptions did the supervisory board appoint Mr. Russell up to 2027, also Ms. White? How much longer will they receive payments from the service contracts, and what amounts are involved?
We also like to focus on something else. Jürgen Müller is leaving the end of the mandate in 2024. This was communicated early in September. Reports from the public prosecutor in Heidelberg because of suspicion of sexual harassment. Mr. Müller admitted that he may have overstepped a line and behaved inappropriately. Although the proceedings were terminated against payment of a sum of money, this contravenes the global ethics principles of SAP, which says that the priority of the work environment should be such that anyone, including partners and customers, can trust that their integrity, health, well-being, and rights will be respected at all times. We undertake to create a workspace that's free of any mobbing or inappropriate behavior. We all have to give an example. End of quotation. People with responsibility in leading positions, especially members of the executive board, have a special exemplary function.
Apparently, that was not the case. The consequences and the effects of this public misconduct give rise to the following questions. Why was the service contract terminated on the 30th of September 2024 and not immediately? What effect does the termination of the agreement have on the remuneration of Dr. Müller? Can you confirm that the end of the contract, since this was by mutual agreement, will mean that the portion of the vested shares will also lapse? Can you tell us what the performance sharing bonus, how that will be treated? Since the contract was extended to 2027 and pension, does this have an effect, or will there still be further payments? Will the Supervisory Board use its discretion and use its possibility to exercise a clawback or similar action?
We had expected that the shareholders would be told at this AGM, and that it would be possible to give feedback by approving or not approving the acts of the Supervisory Board and Executive Board. This is not possible here. The Supervisory Board is depriving itself of the possibility of taking a decision on the lapsing of entitlements to further payment. We are withholding our approval. Mr. Müller has admitted that he overstepped a line, and our decision was not an easy one. However, the Supervisory Board reacted speedily, and therefore we will give our approval to the acts of the Executive Board. We would have preferred to have individual approval for members. Given the changes on the Executive Board and a lower rate or a lower share of women below 30%, it is a problem.
We will also give approval to the acts of the Supervisory Board. The change of control clauses. I will finish by saying that Mr. Pekka Ala-Pietilä, we followed the recommendation to appoint you last year, hoping that this would be a permanent solution to the Supervisory Board head. Now, with the appointment of René Obermann, a 10-year search for an adequate successor to Professor Hasso Plattner has been found. As shareholders, we're relieved to know today that this Achilles' heel of corporate governance will heal and that the fact that he will take office in 2027 is also a result of the mandate of Mr. Obermann at Airbus, which will expire. We are looking forward to his introduction in one of the coming AGMs. We are relieved that there's finally a suitable candidate for Europe's most important technology company.
We wish you, ladies and gentlemen of the boards, the best of success with future decisions for 2025. We hope that we, as shareholders, will have a positive development of the share price in the sense of the best is never done. Thank you very much.
Thank you very much, Mr. Schmidt. Next, Jörg Heidmann will take the floor. I already asked Mr. Markus Duffner to get ready. Mr. Heidmann, you have got the floor. Thank you very much. Good morning, ladies and gentlemen. Now, we've heard a lot today about the significance of AI for SAP's business. In my contribution, however, I'm going to talk about the AI use at this AGM. The purpose of an AGM is, for us, the shareholders to give an authentic view of the view of the executive and supervisory board onto the business of SAP.
Therefore, I would like to request that the answers provided today are in the future given without the support of AI. Thank you very much, Mr. Heidmann. We'll look into that. Next, I'd like to ask Mr. Duffner to take the floor. After that, we are going to answer some of the questions. After that round of first answers, Mr. Hans Oswald will be the first one in the second round. Mr. Duffner, you've got the floor. Thank you very much, Dr. Rich. My name is Markus Duffner. I'm the general manager of the Association of Critical Shareholders. At today's AGM, our association represents the voting rights of foundations and a large number of retail shareholders. Our association also speaks on behalf of its 30 member organizations, and our particular focus is on ESG, that is environmental, social, and good governance. Mr. Klein, Dr.
Roach, and Dr. Pekka Ala-Pietilä. The ESG targets also include the G, which stands for good governance. It also includes the consideration and respect for diversity. Dear shareholders of SAP, central elements of the company's diversity policy have just been eliminated, and that's something which at least causes surprise or even an uproar. Of course, SAP earns money through its U.S. business. Can it be right to change programs for more gender diversity and promotion of women just due to the actions taken by the U.S. President Trump? If in four years the term of Mr. Trump ends and his deputy, J.D. Vance, hopefully does not get elected as his successor, then the situation in the U.S. could look entirely different again. Will then SAP once again turn around in its DEI targets? Mr. Klein, Dr. Roach, and Mr.
Pietilä, you don't want to specifically promote the share of women in the company anymore, and you want to surrender the 40% target of female employees. Is that also your conviction? How do you want to implement this specifically? SAP says that due to the latest legal developments, the own initiatives in DEI have to be adapted in order to be in line with applicable law. Now, what about the applicable law within the EU and in Germany? When it comes to the ratio of women in leadership positions, the U.S. are not to be taken into account anymore. Does this mean there will be two different SAP cultures in the future? Dr. Rotsch, Mr.
Alain Pieteli, at present, less than 28% of the Supervisory Board members are women, and less than 70% on the Executive Board are women, which is clearly below the average of the German publicly listed companies. Gender fairness and justice has not had such a good standing at SAP yet. Maybe you do not even have to work that hard to comply with Trump's executive orders. In the Supervisory Board of SAP of 18 members, we have 13 men and five women. Ms. Rotsch, I think sometimes you must almost feel lonely. What are you going to do to increase the share of women in the male-dominated executive bodies of SAP? The DEI department of SAP is going to be merged with the Corporate Social Responsibility department. Does this mean that diversity and inclusion will still play even a significant role within SAP's corporate culture? Mr.
Klein, Ms. Dr. Rotsch, Mr. Ala-Pietilä, do not you fear that the good image and reputation of SAP, which has been fairly good so far, could be harmed if you take such an opportunistic approach in terms of DEI? If you do not feel so, why not? There are good reasons to consider this as an important KPI. You may want to have second thoughts about how to deal with your diversity criteria. Dear shareholders, at this SAP AGM, we heard a lot about AI and AI applications. There is, however, the justified concern that AI will become a climate killer due to its high demand for energy. The energy demand of data centers will increase massively by 2030. At present, it seems that the energy demand cannot be covered by energy from renewable sources. Mr.
Klein, how high was the energy consumption at data centers of SAP in the years 2023 and 2024? How high will the demand be in 2025, 2027, and 2030? Mr. Klein, in your address, you also briefly mentioned the CO2 emissions of SAP. You said that they are stable, although SAP had grown. SAP is more and more able to decouple its CO2 emissions from its overall economic growth. Please let us know what the interim climate protection goals of the company are. This would be important. What will be your CO2 emissions in the year 2025, 2027, and 2030? Please also break it down into scopes one, two, and three. Now, how does SAP support other companies in achieving their net zero targets?
The three shareholders who have submitted their statements to the shareholders portal have voted against holding the AGM as a virtual one, and I fully subscribe to that. I rather recommend the introduction of the hybrid format, which would combine the benefits of an in-person and a virtual meeting. Mr. Klein, Dr. Rotsch, and Mr. Pekka Ala-Pietilä, please let us know what you think about the hybrid format. Thank you very much for your attention, and I'm looking forward to the answers. Thank you very much, Mr. Duffner. As already announced, we will now give you the first answers to these questions. After this round of answers, the next speaker will be Mr. Hans Oswald.
I will start with the questions by Ms. Hölzl. Ms. Hölzl, you asked about the contribution paid to how many of the board members who have left.
In the last five years, SAP separated with a mutual agreement with five members, and a total payment of EUR 53 million was paid. You also asked if Mr. Obermann will give up his mandate at Airbus by 2027 to be fully dedicated to SAP. Mr. Obermann is appointed until 2027 at the Airbus Supervisory Board, and he will maintain his position until then. After that, he will take over the chairmanship of the Supervisory Board, and before that, he will be an ordinary member of the Supervisory Board of SAP. His election is planned for the Annual General Meeting in 2026. You asked why we supplement the board by this extended board and what the costs are. I assume you're referring to the new extended board, what we call extended board, that is.
This body consists of SAP executives from different areas: sales, technology, finance, marketing, and communication, amongst others, and plays a key role in the implementation of SAP's strategy. The members support and coordinate decisions for the board and drive activities in their fields of responsibility. The final decision is still taken by the board. There are no additional costs incurred by this new body. Ms. Hölzl, in addition, you asked why we paid a severance payment to Mr. Russell despite the fact that he resigned from office. The Supervisory Board agreed with Scott Russell to sign a termination agreement, which ended the task by the 31st of December 2024. In this context, he stepped down on the 31st of August 2024. In the contracts clauses of the Executive Board members, it is stipulated that any early retirement, any cancellation or premature cancellation foresees a payment, which is firmly stipulated.
The payment to Scott Russell results from his contractual rights. Finally, you asked for Mr. Klein's remuneration. We can confirm that in 2024, Mr. Klein has received EUR 18.98 million. That is the remuneration paid in 2024. With that, I hand over to you, Christian. Thank you, Frederike. Next question by Ms. Hölzl. How do you assess the risk involved with geopolitical macroeconomic uncertainties? How will you be affected by tariffs immediately and indirectly? Are we protected against the trade conflict, or can we benefit from it because people will rely more on a European software expertise or software business? A similar question was also asked by Markus Kienle. Let me start with the geopolitical and macroeconomic uncertainties. Of course, we are aware of the risks linked to these uncertainties.
These comprise not only the U.S., but also conflicts such as in Ukraine or in the Middle East, trade conflicts amongst big economies that might impact supply chains and exert pressure to live up to these pressures. SAP has taken measures to compensate for the negative impacts. We are also protected by the better predictable revenues, which will lead to higher stability. Our global government affairs monitors global developments to take immediate action. With a view to tariffs and trade conflicts, tariffs and trade conflicts might cloud the overall economic situation and affect SAP directly or indirectly. So far, we are only impacted indirectly. However, we see a certain uncertainty in the market with our customers. Impacts on investment behaviors are not felt as yet.
For us, we can see positive effects because our solution portfolio helps companies to manage their tariff costs and also to manage their supply chains and make them more resilient. As a European company, we have a kind of advanced trust and benefit from that because certain customer groups would rather rely on European software and cloud solutions. A clear strategy helps towards business and cloud. However, let me underpin that at the end of the day, the customers want to have great and innovative software, and that's our main focus. Next question. As regards M&A, what do we expect from WalkMe and LeanIX in financial terms and also when it comes to synergies? Why do you need WalkMe? Then we have Joule, that is an application that could have been extended or upgraded instead of spending billions.
The acquisition of LeanIX and WalkMe are strategic steps to round up our portfolio in the field of business transformation. Another core element is Signavio, which was acquired in 2021. The solutions help our customers to digitize their business processes and modernize them and to optimize the landscape below this. WalkMe is implemented by supporting employees to understand new business processes and to use the appropriate applications adequately. We expect positive return from sales synergies. Here, scale effects are particularly relevant in the cooperation with Signavio and LeanIX. SAP will become the leading provider of business transformation applications, but there are other synergies in WalkMe, for instance, when it comes to user satisfaction and intensified use. Intensified use, so higher level of usage. The adoption of SAP solutions in total in the cloud context, these are essential factors to increase customer retention and to make cancellations less probable.
It is of strategic relevance for us to help our customers in their transition to the cloud. That is the RISE concept because that always includes a comprehensive modernization of the applications. Let me add one thing here. Why did we not develop such a solution ourselves? SAP could develop lots of different solutions, but we need partners too. Sometimes we need acquisitions because it is very important to envy of the competitive field we are active. It is essential to keep focused. Our developers, our product managers need to be focused on those areas where we are number one or two. To speed things up, we rely on partners, or in the case of WalkMe, we purchase a solution. That was it. Dominic? The question I have to answer is the restructuring costs and the specific setup. You find it in the report. The specific figures can be found there.
That's EUR 3.144 billion in 2024, slightly higher than expected. Why? On the one hand, these were voluntary lever programs, so the participation was not clearly foreseeable, and it was also linked to the share price development. So the share-based remuneration went up accordingly. There are different subpoints in which area and functionalities the restructuring programs were incurred. It was research and development, EUR 1.2 million, sales and marketing, a good EUR 1 billion. Further details can be read there. As regards the question of profitability in the cloud segment, the gross margin in our cloud activities increased greatly last year. In non-IFRS, operating margin for cloud, 73.3% for 2024 in total. I would like to point out that in the first quarter, we were 75%. Now, in the new first quarter, we are at 75%.
Now, the further development in 2024 beyond what we've given in our outlook, as regards margin development, all we can say is that total expenses of the company are to increase lower than revenues. So 80%-90% of the increases are to be covered by costs, so that we have an increase in margin. Where exactly that will be? We want to be flexible because we have to respond to certain topics, such as the turbulences in geopolitics. The next question referred to authorized capital, Ms. Hölzl. As you might know, these authorized capitals will end right immediately after this Annual General Meeting, so they are to be renewed. We want to get your approval to have this EUR 500 million as authorized capital. The reason is it grants flexibility. The flexibility SAP had, and we want to maintain this flexibility to follow marketing requirements for funding necessities.
The next question referred to the AGM 2026. You mentioned what other companies do. Let me point out that in the past years, different from others, we had face-to-face meetings, face-to-face AGMs, and we haven't decided yet what will happen. We want to assess this meeting, and we want to assess the agenda for next year's meeting before we take a decision. We'll inform you in due time as soon as the invitation has to be sent out. With that, I'd like to hand over. Yes, Ms. Hölzl, you asked about analysis for reputation and rating risks in the consequence of our diversity changes and how this fits in with the fact that diversity is part of our corporate culture.
We continue to support a diverse and inclusive labor, and we have commissioned a comprehensive team to assess our programs and business processes in context with our general HR policy. With us, we ensure that all legal requirements in all markets where we are active are fully complied with, while we basically stick to our values. Beyond that, we can see that equity and an inclusive culture are and remain central parts and aims of our SAP. We proudly rely on employees from 180 countries and over four generations. In future, we'll make sure that all SAP programs and activities are fully inclusive and guarantee full equity for everyone. Maybe a brief comment from me because D&I really was in the press, and we got a lot of feedback over the past couple of days.
What's important to understand are the legal requirements, which we comply with in more than 130 countries. It is part of our task that we support our customers all over the world. Yes, we have customers in the U.S., and yes, there are executive orders that we have to comply with. We do tend to ignore what the personal attitudes are, and you have to separate this here. The second topic is one of our legal requirements, and the other is what we do within SAP, what we do for more diversity in SAP. I can speak on behalf of the entire board and with Gina that the programs we have will remain. We will further develop them. We have ideas how we can ensure more diversity within SAP, but there are certain things that are stipulated by law or executive orders.
I think there were several examples in the past. I well remember one case, Ukraine and exit Russia. Back then, SAP was asked why we didn't exit Russia faster. If you look at the situation today where SAP is, and if you ask President Zelensky or Fedorov, who actively helps until this very day, then it's SAP with its software. I'd like to ask you to really separate or take a distinctive view of what the legal requirements are and what SAP does for our society at large. Not only today and here, and not only publicly via social media, but also by real action, by real activities and support. Our employees' knowledge base is one thing, but all the rest is what we do. We want to measure against this, what we push, and that is much more important than some legal requirements or quota.
At the end of the day, what counts is what we do for the topic of diversity. Thank you. That takes us to the questions of Mr. Kienle, and I'd like to hand over back to you, Christian. Oh, Frederik, you took me by surprise. Oh, first question. Mr. Kienle's first question. Here we are. Cloud revenues were considerably increased last year. What share of this increase? What share of this revenue increase is due to new customers, which is from changes to the cloud, and which is due to price increases? Cloud revenue was up from EUR 13.64 billion in 2023 to EUR 17.641 billion in 2024. In our report, we don't make a distinction between new customers, price increases, and so far, but still I can provide you with an overview on the most essential drivers.
One driver for the growth here are our programs Rise with SAP and Grow with SAP. That includes both the change from existing customer to the cloud as well as cross and upsellings. An essential role plays SAP Business AI within 2024, which was part of new contracts when it came to the migration of big customers to Rise with SAP support. Revenues are supported to transform to cloud business. There's a factor of 2-3x, so 2-3 times the maintenance costs are incurred. Our price structures are adapted to the market requirements, and as a rule, we have price adaptations in the cloud, but that's in line with the new innovations and new functionalities of the software. Next question. What's your market position in the cloud business against your essential competitors? Our market position is strong and keeps being improved.
Just a couple of weeks ago, for instance, IDC published a new report that shows our growth dynamic in the cloud, and it confirms that SAP in 2024 was the biggest growth amongst the top 10 providers. Gartner and IDC confirm the market leadership of SAP in the field of cloud, ERP. You acquired WalkMe. What is this company does? I have mentioned this. WalkMe is a leading provider for digital adoption platforms. These are solutions that help companies to adopt technological solutions to their processes and tackle those. WalkMe, in specific, means that in the cloud, quite often, every quarter, sometimes even monthly, we include new functionalities, new functions, and they are automatically included in the solutions of other customers. As you, as an end user, you log on to the system, WalkMe helps you to learn these new functionalities that were automatically added overnight.
We offer digital training over WalkMe so that the end users have it easier to understand our software and use it. At the end of the day, they are better satisfied with our products. The last question. The production tariffs of the U.S. is a danger for the global economy. Are you affected, and what are the implications for revenue and profit? Do you expect immediate effects? Ms. Hölzl made a similar question, so I'd like to refer to the answer I've given before. That was it. Dominic? Mr. Kienle also asked about the restructuring expenses. I've mentioned there's some total, but he also asked about the cost savings. We cut roughly 10,000 jobs. We don't have replaced the people, but if you want to know the costs incurred here or involved here last year in 2024, it was EUR 160,000 costs per average employee.
That's just a rough indicator here, a ballpark figure. We've also hired new resources. The restructuring costs, I've already mentioned the details here, and I've also referred to the table in the annual report. Mainly it's costs in sales and development that reflects the sheer size of the population of the numbers of employees. There was a lengthy comment or question. Because of the operating result, we've seen a reduction in 2024. Even if you eliminate the restructuring expenses, you have to bear in mind here that in 2024 we had revenue proceeds as well. You asked about the return on equity, which we deem appropriate. I'd like to point out that we control our business in operative terms based on non-FRS operating income and by the free cash flow. We are not so much focused on return on equity.
That's a parameter which is more essential for financial service providers. In view of the fact that our equity is very much away from the market value, that's the reason here. Goodwill in the context of the acquisition of WalkMe. EUR 800 million Goodwill. That's the book value. You also find the specific figures in the annual report. This Goodwill reflects the non-material performances. If you do such an assessment, if you assess an acquisition, you look at all the assets of the company and distribute across the different positions, tangible or non-tangible, material and immaterial assets. That reflects the sheer potential which we see in the company. You mustn't forget that with this company, we can improve all applications of SAP. We expect benefits for the whole portfolio of SAP.
The questions regarding the AGM, whether virtual or in person, I've answered that already in the context of the previous speaker. Mrs. Hölzl's answers apply here as well. The question regarding the fees for non-obligatory tasks for BDO. We paid EUR 20 million in 2024, and EUR 7 million are for non-audit performances. That's more about certificates, which we have to supply to customers where the auditor can provide much more efficient work than a new auditor. With that, I can hand over to Mohammed.
Yeah, I think I'll give it to Gina because I'm waiting for some translation still. Whether we are affected by the program in the U.S., as we communicated, there are individual activities in D&I, and we're adjusting our principle to ensure conformity with the laws and to protect our business and our staff.
However, we do this with a sense of proportion and without compromising what's important to us, namely an inclusive work environment and equal opportunities for all. You also asked how the Business Health Culture Index will replace the previous KPI. The Business Health Culture Index is a key indicator that we've used for some time, which indicates to what degree SAP provides working environment to its staff that promotes health of employees, ensures long-term employability, and motivates them to actively contribute to fulfilling the targets of the company. It is a central indicator focusing on sustainable development. The BHCI is filled with data from a survey of our staff that focuses on health, corporate culture, and it's conducted twice a year to have a pulse check of engagement and the atmosphere among staff members.
One of the questions asked is, you have introduced a dual user whose efficiency you want to measure. How do you measure the efficiency of such a dual user? Dual is SAP's AI assistant that connects and coordinates AI activities and AI agents to enhance productivity. Efficiency is measured by analyzing the time and cost savings achieved through dual usage. This includes reducing the processing time and improving decision-making through data-driven insights. The integration of dual across the entire SAP portfolio supports these goals, providing users with comprehensive assistance in their daily tasks. The efficiency improvement is achieved through the automation of the routine tasks and the enhancements of the interaction.
For example, one of the efficiencies we're aiming for in implementation of some of our products is 30% efficiency in how quickly can you get your questions answered and how quickly can you develop extensions and capabilities in SAP BTP. Similar to that, we have efficiency targets and ROI analysis, the return on investment for specific use cases for all of our AI scenarios. The second question is, the game changer for your business model seems to be AI use cases. Your products equally work with AI. What is the percentage of customers that use AI tools? We've had AI at SAP long before GenAI or the large language models came in over the last couple of years. The good news that we have to report is we have over 34,000 of our customers today that are using SAP Business AI in productive scenarios.
We currently have more than 200 AI scenarios that are built upon GenAI, and we aim to expand that to over 400 use cases by the end of the year. This should lead to further expansion of our usage from the current customers. We are also enabling the most used transactions in SAP as well from 80% to even higher, so a lot more of our customers can benefit from AI usage. Frederick. Thank you. Mr. Kienle, you also asked Russell and White, the Executive Board members, left prematurely. Why this was the case and what severance payments were made and what reimbursements were made. This is part of the restructuring cost. Last year, the Scott Russell and Julia White contracts were terminated in order to enable strategic transition into the Executive Board of our company.
This step was not necessary to bring about a new integrated focused go-to-market strategy, which would build on our previous successes and strengthens our position as a leading company in corporate business applications, focusing on suites and AI technology. The severance payments are not part of the restructuring cost. You asked further about the appropriateness of compensation and how it is assessed, or whether we had a separate assessment by compensation consultant. You asked if this was the same person as helps us establish the system. You said that there is an expert on the remuneration, although the remuneration system is already considered appropriate. You also asked whether that is the same person who assesses the appropriateness of the compensation system. It is true that the same person was involved in the assessing of the appropriateness of compensation as helped us establish the system.
Using the same person was done because for a number of reasons. First of all, that person has deep knowledge of our company and our compensation system, which enables him to have a detailed and appropriate estimation of compensation in our company. In the past, that person has been very unbiased and cooperative, which makes him a reliable source for such critical assessments. In addition to that, the consultant, as you correctly stated, inspects on a yearly base the compensation of SAP. That is, several aspects are investigated: the compensation system as such and the compensation. Finally, you addressed the case of Mr. Müller and his leaving, and you asked what he was accused of. The charges were that in a professional context, he showed a conduct that was not acceptable.
However, we ask for your understanding that we cannot give you the details because this is confidential information to protect the rights of all people involved here. With that, as far as I can see, we have taken all the questions of Mr. Kienle, and we move on to the questions raised by Mr. Schmidt. Mr. Schmidt, you asked how long the members of the board, Russell and White, receive payments from the compensation contracts and how long Julia White and Scott Russell, the Executive Board members, receive payments up until the year 2028. The payments are based on their service contracts in which a time prorating is stipulated for early leaving in August.
The last tranche of their remuneration for the year 2027 will be paid based on the planned conditions, and that is in 2028, since the final amount depends on the performance criteria and the development of the share price at the time of payment. At the moment, it isn't possible to give an exact amount that will be paid out to them. You further asked whether I can confirm that the leaving of Mr. Müller was done by mutual consent or by mutual agreement. I would like to explain the PSUs and how they're used in the compensation system to which you referred, the PSUs that exist there, the claims have lapsed, and this is on a prorator basis. You asked under what assumptions the supervisory board in 2023 decided to appoint Russell and White up to the year 2027.
In 2023, the Supervisory Board decided to extend the contracts of White and Russell up until the year 2027. This decision was based on the successful work they had done since they entered the Board in 2021. Both of them developed their Board areas and contributed significantly to the success of the company. The Supervisory Board assumed that they would continue to play key roles in implementing the corporate strategy and that they would successfully drive the transformation of SAP. Last year, their contracts were terminated prematurely in order to ensure a strategic transition in the leadership of the company. The objective was to have a new integrated and focused go-to-market strategy and to implement that strategy. You asked that the termination of Mr. Müller, what effect that had on his compensation. The Supervisory Board agreed with Mr.
Müller that his service contract would be terminated with effect of the 30th of September 2024. Based on that agreement, the compensation components vested up until his leaving will be paid out. SAP waived a non-compete clause and no additional payment was rendered to Mr. Müller. You asked why the termination of the contract with effect from the 30th of the 9th was not done earlier. We agreed with Mr. Müller to terminate the contract by mutual agreement. He was not terminated for a special reason. We wanted to handle the situation that had occurred in an appropriate way. That is, the overstepping of lines, but we wanted to make sure that orderly handover of his tasks would be possible. We agreed with him that a termination of the work relationship at the end of the month would be right. Mr.
Schmidt, you also asked what effect the premature termination had on the further compensation, for example, pension entitlements. The premature resolution of the contract has no effect on additional compensation based on the contract ended in 2024. That would have been effective from 2025. Since the contract was terminated on the 30th of September 2024, that did not come into effect. Further claims for pensions, for example, were cut on a prorator basis with a key date of the 30th of the 9th, 2024. You finally asked whether the Supervisory Board used any clawback or malice arrangements. The Supervisory Board can use these instruments based on the contractual agreements if the conditions for this are met.
As part of the severance agreement, it was agreed that even after the contract, these conditions would prevail, but the prerequisites for applying a clawback or a malice, that is, a negative bonus arrangement, have not materialized. Finally, Mr. Schmidt, you asked why we did not avail ourselves of the opportunity of giving approval to the acts of board members on an individual basis rather than collectively. Executive and Supervisory Board did not propose individual-based approval, not even with regard to Jürgen Müller, because this did not seem appropriate. The circumstances of the Müller case are treated with confidence to protect all persons involved. It seems not appropriate to vote for the shareholders to vote on the approval of the acts of Jürgen Müller without knowing the exact circumstances.
It would not be a proper basis for such a discharge decision if no sufficient material information on the background of this situation is given. Finally, you asked whether the Supervisory Board would investigate whether in the past there have been cases of a similar nature with Mr. Müller. SAP has effective anonymous whistleblower mechanisms which can give indications of such events to make sure that the company can act proactively and responsibly. We received no such notices investigated by the proper investigation team and then transposed into HR measures, specific HR measures. If we had had indications in the past that there were similar events in the past, we had had them investigated. However, at the moment, there are no indications that suggest that such an investigation should have taken place.
Finally, you asked what discretion we have with regard to Jürgen Müller or what discretion we're using with regard to Jürgen Müller. With regard to Jürgen Müller, the Supervisory Board came to an agreement on the condition of the termination of the service agreement before the final date. This agreement was drafted carefully and reflects the mutual interest. Using the SAP clawback policy, there is no more discretion that the Supervisory Board could have used. The matter has therefore been finally settled. As you could hear from the speech of the head of the Supervisory Board, two well-known firms supported us in this. With that, I hand over to you, Christian, for the further. Heinrich Schmidt, what are the most important drivers for the cloud growth? I mentioned this briefly.
The move into the cloud is something that we see not just by providing value, not having to do extensive upgrades, but always using the latest software version automatically, but with RISE and GROW. We also support with best practices. All companies have to make their business processes more digital. They want to automate their processes, and there are many tools around, many best practices. Every day we see with more than 400,000 customers that is based in our methodology, RISE and GROW. The suite, whether it's about resilient value chains or in times of tariff sourcing or selling in certain market segments, and all that topic integrated into the value chain or FI or bookkeeping, everything can be done with the SAP system end-to-end seamlessly. I think SAP is unique in integrating all business processes.
As I said in my talk, AI is going to change a lot of things. We're changing the way we talk to our software. We're changing the way we work with our software. We're making it easier, more productive, 30% more productive. Each user or every user that uses our software in the business data cloud, which is about data, is very important, no matter whether it's HR, FI, supply chain, or sales. It's always about customers, skills, staff, understanding them better, making better decisions. This is where we have a unique data platform, which enables us to harmonize data to really get the most from our data, non-SAP and SAP data. These are our growth drivers. What progress did we make last fiscal year to monetize the big AI potential? I see this in English here.
I don't know why it's not in German. It's for me, but maybe Mohammed can answer that. Coming to the next question, this development, how does it require a realignment of incentives in sales? What does this mean for the margin development? In the past years, our sales control has been developed further continuously, especially in the course of the cloud transformation of our customer base and our stronger focus on the positioning of our integrated business suite. At the moment, factors like contract renewal, productive use of our solution, and also the profit margin that can be achieved play an important role more than in the past, where incentivization was often based on sales alone.
The point is that in sales, people have to make sure that customers will use the software across the whole life cycle and also that the customers are satisfied, that they're happy with the software. This is what our incentive models in sales are based on. With tools like WalkMe, we can also monitor the use in the cloud. We can measure the use in the cloud, and we can help customers to use the software better to a larger degree and in an optimized way. By doing so, make sure that the customer will hopefully be convinced of SAP and over time use more software modules of SAP. How does this development? We've had that already. In what areas are you convinced that there will be the highest growth, and where do you see the highest risks?
First of all, the transformation of our business model in the cloud is progressing very well. Migration of our customers to S/4HANA Cloud is a central part. Here we're making very good progress with the migration, of course, not the migration alone, but also the transformation of business processes and the realignment of processes of our customers. In addition to that, in our midterm plans, we assume that in addition to the cross-sale potential, that is, customers start with FI and then use HR, then use an integrated procurement and supply chain solution. This is a cross-sale potential. Here we still have a lot of growth potential in this. Of course, we also have new customers with Grow with SAP. I have named some customers who have now joined the SAP family. Mid-market is a huge potential for us in the cloud.
SAP was not known for this in the past, but it is now possible to go live within two or three weeks to use the solution actively. This is the very agility which, of course, mid-market companies see and find attractive and will hopefully use, and we will hopefully be successful globally. Dominic already mentioned it that in our Q1 figures, of course, the geopolitical situation creates uncertainty. No company is immune to the geopolitical changes or things that are happening. At the moment, we are not seeing any effect on the investments of our customers. Of course, it is going to be important to see how quickly the trade conflicts will be resolved over the next weeks or not resolved, for that matter. With that, let me move on to the final question.
With what public authorities, stock exchanges, or political decision-makers are you discussing things, and what are you discussing with them? There are contacts with the German Share Institute and the Deutsche Börse. They are supporting our causes. In addition to that, we've been in exchange with the responsible authorities in Brussels, DG FISMA and EFMA, and the German Federal Ministry of Finance too.
That was my part. Dominic? Let me continue with the question by Mr. Schmidt on the share of recurring revenues. I assume you're referring to more predictable revenues. These are revenues such as subscriptions or maintenance revenues, which customers commit themselves to over several years for 2025. Our ambition had been to achieve an 86% for that KPI, and that has risen from 72%- 83%. We are well on track.
We believe that as the cloud revenues keep growing and the very volatile software license revenues decrease, we believe that this percentage will continue to grow. The next question was about the development of so-called transaction-based revenues. Those revenues have no contractual commitment in the beginning of the year already, but are based upon customers' volume. This is no surprise, namely that these are the revenues which are most affected by the cyclical development in the economy. They have been rather flat instead of growing. Nevertheless, even in the first quarter, we have generated a gratifying cloud revenue growth, which compensated then also the contractual obligations. You have seen the high backlog in the current account, which covers the revenues that have been committed to for the next 12 months. Next question. Development of the overall revenue growth, is that sustainable? Was the question.
What could be the impact of an increase of macroeconomic uncertainties? I think Christian already answered this. Yes, we do have a higher share of better or more predictable revenues, but of course, we are not entirely immune to overall events. If the global economy were to collapse, that of course, would also cause some headaches for us. Currently, we still see a fairly robust development. We do not think that we can revoke our statement, namely that the revenue growth of 2024, which we had predicted at 24%, we still believe that this will further accelerate in 2025 and 2026 due to the positive mix effect, which means it will be easier for us to accelerate that revenue growth in the future. There was also the question of where the biggest cuts occurred during restructuring and which financial impacts this had.
Now, we had already answered that question for the two previous speakers, namely the breakdown after restructuring costs. In this context, let me once again emphasize that on the whole, we increased the workforce during the year 2024 by 1,590 employees. A smaller number of that also was due to the WalkMe acquisition. The biggest cut actually occurred in sales and marketing, where on a net basis, the number of employees decreased by 745 in fiscal year 2024. There was a question about the transition to the cloud, namely what do you expect about the future margin development and what will be the key drivers of the increase? In the previous round of answers, I had already said that the gross margin in the first quarter in the cloud business increased to 25%.
We saw a massive increase over the last couple of years because we took many actions, which were also quite costly and also required major investments. Here, I suggest that we do not extrapolate and expect that increase to continue at the same speed. However, we still see the potential to increase the margin on an IFRS operating basis because the costs of the company are going to rise more slowly than the revenues. Here, we're aiming for a ratio of 80%-90%. Now, which forecast can you already give us today for the period beyond the year 2025? That is what I just said, namely that we expect revenue growth to accelerate in 2026 and 2027, and that on the other hand, the costs are to rise more slowly than the revenues. Of course, AI will play an essential role in this.
Change of stock exchange. That was answered. No, we do not have any plans to withdraw our listing in Frankfurt and go elsewhere. I think that's all. Thanks, Dominic. Mr. Schmidt asked which opportunities we have to increase efficiency in sales and marketing. In order to increase efficiency in sales and marketing in the year 2024, we already significantly simplified our sales model and adapted it to scalability and growth. Mr. Klein already gave you some examples. Let me add a few more. For example, the reduction of our sales regions from seven to four, and also the reduction of the number of customer-facing roles from 14 to about half of that. A major role in the simplification process, of course, also is the automation of our processes, especially using SAP technology.
Of course, here, foremost, AI is to be mentioned and Joule of SAP, which already produces significant savings in the quote-to-cash process. As Dominik just said, we want our costs to grow below the average of the revenue growth. Now, let me take over again, Mr. Schmidt. You also asked about the impact of restructuring of the cloud migration onto employee satisfaction at SAP. We are fully aware of the fact that a restructuring program of that extent is not something easy to digest for our employees. We also implemented massive communications and change management activities in the course of that project because, of course, we want to ensure high employee retention in the future as well. For that reason, the level, as Mr. Klein already indicated in his address, slightly decreased in the first employee survey.
However, in the second survey towards the end of the year, it rose again slightly. We have taken the first insights in the most recent survey that was completed. We can confirm that this positive trend will continue in 2025 as well.
I have three questions. The first one is, what impact do the recent success of Chinese providers in the AI sector have on SAP's strategy? At SAP, we expected innovation to come from all parts of the world, and our strategy is designed to accommodate that.
We focus, from an SAP perspective, in creating value at the application layer by leveraging the different AI models that exist, which means that the work we do is at the application layer, but the large language model that powers these AI use cases behind the applications, including models like DeepSeek, are fully interchangeable, like a battery or a hard drive. For us, the large language model is a layer that's going to get increasingly commoditized as well. Hence, we can sort of keep track with where the innovation is happening and where the new models are coming up with, which is why we also have strategic partnerships with all the major large language model providers and are always evaluating new models as well. This way, we're also ideally positioned to provide more value for our customers, especially in the era of AI and AI agents.
The second question is around what progress has been made in the past fiscal year to monetize the huge potential in the AI sector. In 2024, SAP made tremendous progress towards realizing the massive potential offered by business AI. To provide just two examples, integration of AI into business processes and applications. As of Q1 2025, we have integrated more than 200 AI scenarios across all areas of our application, which effectively is all areas of the value chain. We expect that number to go up to 400 before the end of the calendar year. At the same time, Joule, SAP's co-pilot, was integrated into SAP's entire cloud portfolio and now covers about 80% or more than 80% of the most commonly used transactions for our users. This year, we're taking next steps.
During the SAP Business Unleashed event, we also introduced SAP's agentic AI capabilities and SAP Business Data Cloud that Christian talked about, which also contributes all the required data management and data engineering and ML technologies for us to further more scenarios and bring this capability to our customers. The last question is, in addition to our AI partnerships with U.S. companies, what role do partnerships with European and Asian companies play? We closely collaborate with European and Asian companies and institutions to create a strong global ecosystem for our business AI offerings. An example for that is our partnership with Mistral AI, which is based in France. Among others, this partnership is aimed at strengthening the European economic competitiveness in the AI context. In Asia, for example, we're collaborating with the AI Verify Foundation in Singapore to create a responsible, trustworthy AI for business processes.
Back to you, Frederik. Vielen Dank. Thanks a lot, Mohammad. Before turning to the question of Mr. Heidmann and a comment of mine, this morning via the shareholder portal, we had the statements of Klaus Fallermann, Wolf Johann Rucinski, and Alfred Wittcher, which we received. However, unfortunately, we cannot reach the three gentlemen. I'd like to ask the three of you to come to the waiting room before the end of the general debate or to once again get in touch with our technical team if you want to take the floor. Otherwise, these requests to speak cannot be considered. Now, I've got an answer for a question by Mr. Heidmann, and after that, we will continue with the next round of questions. For that reason, at this point, I really would like to ask Mr. Hans Oswald to get ready. Mr.
Heitman, you had asked, or you rather had requested that at this and at future AGMs, we do not use AI anymore to provide answers. Now, as you can see, the members of the Executive Board and the Supervisory Board today provide the answers to you directly while we're seated on the stage. Rest assured that we are fully committed to the answers that we provide to you. We're using AI only for support, namely to prepare specific answers in order to make sure that we have gathered all facts in an effective manner. Please understand that today and also at the future AGMs, we want to maintain this approach because it simply ensures that we deliver the answers at a high-quality level, and at the same time, it also accelerates the overall process. With that, I would like to close this first round of answers.
I know, Mr. Duffner, that some of your questions are still open. We will come back to that in the second round, but at this point, I now would like to give the floor to Mr. Hans Oswald. Furthermore, I'd like to ask Sabine Mertens to get ready. Mr. Oswald, the floor is yours. Hello, Ms. Rotsch. Welcome. My name is Hans Oswald.
I'm in the board of the Verband Wohneigentum. I have a couple of questions. First of all, I welcome everyone who's listening. Above all, the owners of SAP, the actual owners, shareholders, I only can greet you virtually. My thanks go to all the employees of SAP for the work they've done in the past business year. I have a couple of questions. Please explain in great detail without back office support. Don't just read out the answers. Thank you for beginning today. Ms.
Rotsch and the executive boards, you can start a direct dialogue with me directly. That would be great. You can communicate directly with me if you so wish. We welcome that very much. We can communicate in a similar fashion during this virtual meeting as in a presence meeting. Ms. Rotsch, obviously, you learned a lot from Professor Winde Johan. So far, you chaired this meeting like a true professional. I was really surprised when I read last night that you are a member of the Supervisory Board. This morning, I was even more surprised to see that you will be the chairperson, which is rather unusual. I've never experienced this, that a chairperson or chairwoman in your case is so professional. Thank you, Mr. Kienle, and thank you, Mr. Schmidt, for your great contributions. An AGM is not just a friendly meeting.
It's an exchange of experience and questioning by the true owners of the company with the executive boards. Today, we are at the Julian Punch session of SAP. That is how a journalist wrote it a couple of times ago. There are executive boards and supervisory boards who are willing to use the shareholders as punch and choodies. Are you part of that as well? That's my question here. Shareholder democracy, shareholder rights have suffered greatly at SAP and also at other companies. Shareholder rights were cut down tremendously in past years. I expect a comprehensive statement in this context here. Once upon a time, that's how fairy tales begin. Only some of the restrictions that affect the shareholders, fighting questions until two days prior to the AGM, that is no longer possible.
Face-to-face AGMs with thousands of shareholders who applaud or object to any statements almost no longer exist. Local public transport tickets are no longer provided. The parking fees are no longer paid. Video feeds by shareholders to the AGM are no longer broadcasted. Do we all have to accept it as shareholders? That is our question here. One question. The attendance register as a PDF, that is something I could not detect. Why not? Other companies have a much better way of showing the attendance register that makes it easier to search it. Dr. Rotsch, at Deutsche Bank, you had a different approach, much more friendly for the shareholders. This would be possible for SAP as well. Many publicly listed companies keep increasing their remuneration system.
A negative example here is the remuneration Professor Nikolaus von Bormeyer, because he managed to increase his remuneration in one year by a factor of five per year. That was a pioneer for all the other companies to increase their remunerations. Is that the intention of SAP to achieve that as well? Is that coordinated with Dr. Nikolaus von Bormeyer despite data privacy? EUR 35.5 million maximum remuneration is just not acceptable. The ISS people keep complaining about exaggerated remuneration and pensions. The election or the votes only account for 60-65%, such as Bayer or Allianz. If you look at the results at the AGMs of these two companies, the ISS is fully in line with what we are saying. Please comment on that as well. ISS is a daughter of Deutsche Börse AG. I have great contacts there with ISS Munich and ISS Berlin.
They fully support what we are saying. They also support the counter-motions we tend to file. I have a counter-motion to top referring the approval of the action of the board due to the virtual AGM of SAP. Here, I propose an individual decision on an individual vote on all the actions. I would like to ask the chairwoman to read out the results on each agenda item. I'd like to call upon the other shareholders to support my motions and counter-motions. Now the agenda items eight. We want to stipulate in hybrid form of an AGM in the future. My motion is I stipulate to modify the articles of incorporation of SAP so that any future AGMs will be hybrid, a combination of face-to-face and virtual meetings.
This is to ensure that all shareholders, independent of their physical mobility, of their health and technical prerequisites, or their geographic positions, can make full use of their shareholders' rights. Reasoning? Equal representation of all shareholders. Currently, shareholders who for health reasons or financial reasons or for logistic reasons cannot attend a physical presence. I'm an example in case or case in point. I registered for the Deutsche Telekom AGM, but I fell ill and couldn't attend. As a result, my counter-motions and my election proposals lapsed. A hybrid AGM would have enabled me to file my motions digitally. Elder shareholders and non-internet supportive shareholders mustn't be included either. Hybrid formats enable or provide a true selection. Everyone can decide whether he or she wants to attend physically or digitally. Learn from the corona pandemic.
During the pandemic, virtual AGMs were successfully established, but many companies returned to physical AGM. That ignores the benefit of digital participation. That is an ideal supplement. Now, what about costs? The claim that hybrid AGMs are too expensive is not well-founded. The costs could be compensated or funded by cutting excessive remuneration of board members. Executive Board members get a remuneration that is 20-50 times higher than our federal chancellor or the federal president. That is just not acceptable at SAP. That is even much more the case. Here, we have a 120-times increase. What about legal requirements? The technical and legal implementation of hybrid AGMs is not a barrier. ING in the Netherlands, for instance, have proven that these formats work.
The legal requirement is acceptable, or the more so, because the companies have comprehensive legal departments that can provide the basis for that. Strengthening shareholder democracy, excluding non-present shareholders, that underpins the democracy. Hybrid AGMs allow for a wider participation since international and non-mobile shareholders can participate. Organizations at SDK or DSW have to focus much more on hybrid AGMs. The current standstill is perceived by many shareholders as ignoring their rights. I would like to appeal and ask the question to the board. We'd ask the board to comment this motion and to explain in detail why the hybrid AGMs cannot or will not be implemented, in particular against the backdrop that other countries and other industries have successfully practiced hybrid AGMs. Even at Lohr with 60,000 inhabitants, 16,000, the mayor offers hybrid meetings.
This should then be possible at our big SAP if you only want to do that. Dr. Rotsch, you are a strong woman. You can do this. Who else could do this? That's how I know you. Thank you for your commitment. Support by co-shareholders. I'd like to call on all shareholders to support this motion and to launch similar initiatives at other companies. With collective pressure alone, can we ensure that the interests of the owners, the shareholders, that is, will win over, will win against the interests of the executive boards? I would like to bid you farewell from Lohr. Thank you for your attention. Thank you, Mr. Oswald. We will check your motions and come back to that, and of course, answer all the questions you've had.
Next, before I grant the floor to Sabine Mertens, once again, we're still waiting, if I'm correctly informed, we wait for Klaus Faldermann, Rolf-Jan Jorczinski, and Alfred Witschenk. We haven't received any feedback from the three gentlemen. If you want to take the floor, you're required to contact the technical support team so that we can enable your contribution. Otherwise, unfortunately, we can't consider your request for the floor. That takes me to the last speaker so far on our list, Mrs. Mertens. The floor is yours. Thank you. Dear Mr. Ala-Pietilä, Mr. Klein, Frau Wagenbreuer, Frau Rotsch, ladies and gentlemen, I'm Sabine Mertens. Maybe you remember me from last year's AGM. I've already pointed out back then that the SAP language guideline is not only wrong, but above all, ignores 30 million of the most disadvantaged people of our society.
It discriminates against this because you talk about Mitarbeitende, the male people it is. Since you accept the gender column, and I also informed you about the rejection against the gender language, as well as the critical attitude of many of your own employees against your own policy here. I keep receiving complaints about the wrong use of the German language you apply. Why our platform stop gender? Because language belongs to everyone, as well as the association Deutsche Sprache, and I'm part of that chairmanship there, chairwomanship there. We have a whistleblower office for the complaints of citizens who are annoyed by gender policies or are forced to use gender solutions. Your gender policy hurts the German language, and it undermines the basic right for free speech, because if you don't follow the gender policy, you are eliminated or ostracized.
We've offered you to provide support here for revising this policy, but you didn't follow our offer, and you continue to ignore critical voices here. You couldn't silence them. There was a critical article on your language policy, but that was blocked initially. How ignorant. I mean, you have a diversity department, and only after the intervention by those who wrote it, this article was made generally available. It triggered a discussion on the discrimination and the racism of the language policy of SAP. Ignoring the will of your employees seems to be a method at SAP. With a headline of Showdown, Ampisoir was the headline of the magazine Spiegel. That was the behavior of Kavva Yunozi, and he tried to eliminate opinions he didn't like by deleting mails he didn't like.
Coming back to the article regarding your language policy, it complains about the term Mitarbeitende because that's grammatically wrong. The labor law status that is linked to the term Mitarbeiter is lost. In addition, the term Mitarbeitende ignores employees who are sick, on parental leave, or who are on holidays. You think that this way of speaking is inclusive? I am really surprised to hear this. This article also ignores the gender column. You deem that problematic as well because people who have difficulties in reading and writing are at a disadvantage. Your diversity department keeps this gender column, but what a joke, only as long as there are no representatives of these disadvantaged groups affected. With that, you prevent millions of people from having their proper social involvement. This article also refers to the decrease by Trump for DEI.
DEI stands for Diversity, Equity, and Inclusion. Diversity, Equity, and Inclusion. Such practical policies might be perceived as discriminating against the Constitution. Immediately, some large US companies reduced their DEI policies, Amazon, Meta, and others. Also, NATO adopted since SAP is listed at the New York Stock Exchange and has a lot of public sector clients in the US. SAP also is affected by these decreases. Sticking to the discriminatory language policy might lead to tremendous penalties and also failed contracts and also problems with the Trump administration. You seem to have detected this because currently you announce that you give up your diversity program. I have my doubts about that here.
Of course, you have a current mailing informing all your employees about this change in policy, but at the same time, you underpin that you stick to the diversity ideology, not least by excessively using the term Mitarbeitende in German, as we've heard also online today. The financial risk involved by sticking to this diversity and to your language policy remains. I just can't imagine that one single shareholder would be willing to pay for the gender column and to accept such a comprehensive risk. Ladies and gentlemen, your language policy has led to a tremendous loss in trust and motivation with your employees. Now, giving up, giving in to one of the most powerful autocrats will lead to more loss in confidence because it just lip service. Please focus on your core competence. That is software, not language.
Paradoxically enough, some simple rules could help you that are part and parcel of the German language. First rule: Come over. This rule means that, for instance, you should take a pragmatic approach, and diplomacy should not be ignored. Just approach the people. The second rule: Be clear. Be aware of the following. In surveys, a vast majority rejects gender language. If you would ever dare to ask your employees about that, you will see similar results. Third rule: Keep cool or get off your high horse and get back on the basis of facts. Fourth rule: Come along. Just approach the future. Since most people reject gender language, they will never use it anyway. Shaping language as SAP does is restricted to totalitarian systems.
It has nothing to do with democracy or free market society, and it's not appropriate for a global company in the 21st century. Thank you very much for your attention. Thank you, Mrs. Mertens. I have heard that Mr. Kienle has another question. Mr. Kienle.
Can we switch Mr. Kienle on again? Thank you very much, Dr. Rotsch. From my point of view, some of the questions have not been answered sufficiently. I would like to use the opportunity to ask a follow-up question. Mr. Asam, I realize I'm not sure whether you have an idea where the return on equity really should be, and I'm not sure I understood your answer correctly.
The negative special effects of your earnings in 2024 and the special effects, even if I adjust for those special effects, the earnings KPIs, the equity ratio is below that of the previous year, although sales have risen, revenues have risen. I simply don't understand your answer. Could you please give that answer again? In the question about the restructuring expenses, did you save any cost? Did you cut cost or create because you needed the resources elsewhere? Basically, from the restructuring, is there a net cost effect from the restructuring, or did you just reallocate resources, and is there just a revenue and earnings effect? The answer, how much revenue in the cloud business is due to new customers or price increases, that answer was simply cryptic. The way it was given doesn't really mean anything to me.
I asked the question, how many % of your customers use AI tools? I think that question hasn't been answered either. I just go through these. I'm sorry, I have to take a minute here. Dr. Rotsch, your statements, why the person that assesses the appropriateness of the yearly compensation should be the same as the person who established your compensation system as appropriate? I think such a check is not a check. It's inefficient and a waste of money. The question, why in the first place you need a consultant to assess the appropriateness of yearly compensation? That question has been unanswered too. Getting back to the Müller question and the DWS question, why you didn't think it would be? This is a point actually that I didn't notice before, but my colleague criticizes this correctly. I think the answer you gave, Ms.
Rotsch, is actually very inappropriate and disrespectful to shareholders. You cannot tell shareholders that we're not giving individual approval to members of the board because you don't have enough information to give approval or withdraw approval. Maybe you're afraid that we're going to withhold approval, but at the same time, you're saying we cannot go into details for some cryptic, unclear personality rights and reasons associated with such rights. This is not how you can have your shareholders give approval. This is not corporate governance at its best. You're basically taking the decision to give approval out of the hands of your shareholders. There may be reasons not to disclose all facts, and there may be interests to prevent that, but in the general way, you say there has been inappropriate behavior. That could be anything.
You didn't answer my sub-question whether that behavior, that inappropriate behavior, has been confirmed as part of your reassessment or your investigation. What does inappropriate behavior mean? Is this a legal term, or would it also cover someone who feels that they are not treated appropriately, which we had with the Green Party where no legal transgressions could be proven? Can you answer the question? The only thing that is not appropriate is the way in which you are seeking approval of the acts of the boards from your shareholders. Let me get back to question 23, compensation for audit-related services. Mr. Asam, you said that these are all non-audit services, but non-audit services can also be services rendered by the auditors. For example, the auditing of the compensation report.
My question is, how many of the EUR 7 million that you have stated there are due to non-obligatory tasks of the auditors of the annual financial statement? If this is a full EUR 7 million, this is 50% of the total fees paid to the auditors for non-audit activities. If this is true, Mr. Asam, then I can announce that here and now we'll change our voting behavior, and we will not approve the auditors. Thank you, Mr. Kienle. That is the last question or the last request for the floor for the time being. We will continue with the answers to Mr. Dufner's question, and that's over to you, Christian. Marcus Dufner and his questions. SAP says that the development of diversity and inclusion should be adjusted to be in line with the law. How about the applicable law in Germany and the EU?
Are there two different SAP cultures if the U.S. is excluded or will be excluded? I said at the beginning that in more than 130 countries, SAP has to conform with the applicable laws. This is a largest market too. We are doing exactly that in the U.S., which is, by the way, something that all our competitors are doing too in order to keep SAP competitive in the U.S. The other question about the EU and Germany and whether we are in line with the law, whether we are in conformity with the law, as we just heard from a quote of one of the speakers before, we all want the programs to continue. This is training where in Germany we are also investing larger amounts of money. At many academies or universities, we want to promote diversity, young talent that should also bring about diversity as SAP.
The second thing is that everything that Gina and we're all doing with regard to diversity, Gina and her team, quota or no quota, but in the end, it's important that all our staff members see and realize that we are becoming a diverse company and that we're working on that actively. That's important. Alone, if you look at the question that we have more than 157 nations at SAP and people from more than four generations working together. The programs are continuing. We are, in fact, in conformity with German and EU law. Let's move on to the next issue. What will you do to increase the share of women in male-dominated board areas? That is still being worked on. Let me move on to the next. Maybe I can just respond spontaneously. I said earlier that the programs will continue to go on.
Let me give you an example. We on the Executive Board, of course, have to be examples when it comes to diversity. All of us here on the Executive Board meet once every quarter. Gina invites them, and we all go through the succession plans of our top managers in the company. Of course, this is about performance. It is about diversity too. It is about geographical diversity, but also gender diversity. We are doing this very deliberately because we want to make sure that in the future, on Executive Board level and below, we have a high focus not just on diversity and looking nice in the media, but we are doing something actively to make progress there over the next number of years. With that, we move on to the next topic. Mr.
Klein, tell us the intermediate goals for climate protection SAP has. With the CO2 emissions in 2025 and 2027 and 2030, where will you be? Please break down according to scope one, scope two, and three emissions. The great thing is that we actually have software for this. In 2022, 2024, the emissions are described as scope one and 2.1 million tons. Scope three, this is upstream, 1.3 million tons, and scope three downstream, 5.5 million tons. Despite rising revenue, our CO2 emissions during the first quarter 2025 were lower by 11% year- on- year. SAP set as a target that by 2030, we want to reduce emissions by 90% compared with the baseline 2023. The remaining residual emissions of about 10% then should be offset by carbon sequestration. We expect continuous reduction up until the year 2027, year- on- year.
Going on to the next question. How do you feel about the hybrid format at the Executive and Supervisory Board? As has been said, and Frederic mentioned this, last year we had a face-to-face meeting, a personal meeting, a presence meeting, and some virtual elements were there too. You could cast your votes electronically, and there was also a full transmission of sound and vision. We are quite open to having a hybrid meeting with virtual elements. Based on our experience with the virtual format, we will continue to develop our decisions on future AGMs. We will, of course, after this meeting, hold a kind of inquest and then decide what format we will choose for 2026. So much from me. Right, I will continue with Markus Duffner's questions. Of course, we also have our own software that helps us to achieve the climate targets.
The question is, how does SAP support other companies in reaching their zero carbon targets? Of course, with health and safety, SAP was a forerunner. In 2020, we had a double down on the software portfolio so as to fulfill or cover all scope dimensions, one, two, and three. We wanted to reduce the CO2 footprint and reach our net targets. There are examples like the sustainability footprint management and also solutions for the circular economy where, of course, we can also avoid many emissions, but we can also fulfill the reporting requirements of the EU, for example, the CSRD. The last innovation that was delivered was the SAP Green Ledger, which records the actual CO2 dimensions in the transactional system as an accounting system exercise.
It then relates the actual footprint to the average, and this across our whole network, covering our whole footprint and thus making a positive contribution to reducing emissions and CO2 or carbon. Another thing that is also a very personal thing of ours, and this was a question of Mr. Duffner, how high was the energy consumption in our own data centers in 2023, 2024, and how high will it be in 2025, 2027, and 2030? There was a reference to artificial intelligence here. To give you an update here, the energy consumption in our own SAP-operated data centers in 2024 was 164.6 million kilowatt-hours. For 2025, we have a slight increase to 165.7 million kilowatt-hours. This shows you that despite the high revenue growth, despite the customer growth, we are becoming much more efficient.
Our models are also trained in a much more efficient way. Of course, the algorithms are trained and the consumption goes down. For 2027, we expect correspondingly 171.6 million kilowatt-hours; for the year 2030, 190 million kilowatt-hours. I think here you see the continuous progress we're making as a result of the technology to reduce energy consumption by data centers. Of course, we're working with a complete supply chain with our partners here to optimize this continuously. That was my contribution to the questions. Before we move on to further answering of questions asked by Mr. Duffner, I would like to refer to what Mr. Oswald said. Ladies and gentlemen, Mr. Oswald made several motions. He tabled the following motions, and I'd like to respond to that.
First of all, he moved that we should give or withdraw approval of the acts of the Supervisory Board and Executive Board individually. I do not see a compelling reason for this, but I do not want to burden this meeting with procedural issues. I rule that for items three and four, we will vote by person, not collectively. The entry mask for the electronic voting and the instructions to the proxies of our companies in our shareholder portal will be converted or switched accordingly. In the next minutes, you will see how that entry mask changes. Votes submitted so far on the collective approval will also be taken into consideration for the individual approval. After the discussion, we will vote together on the items three and four, together with all other items of the agenda.
The conversion to individual approval of the members of the Executive and Supervisory Boards only means that on items three and four, you can give your votes or withhold or give approval separately for the individuals. Secondly, Mr. Oswald moved that the Executive Board should not be given approval of its acts because of the decision for a virtual meeting. If you want to support that motion, you can do so by under item three, voting no on the proposal of the Executive Board. The Executive Board and the Supervisory Board stick to their proposal to give approval to the acts of the Executive Board. Thirdly, Mr. Oswald moved that the articles should be changed and to have a hybrid AGM set down in the articles of incorporation. This is outside our agenda today.
Please understand that I cannot put this motion to the vote at this AGM, and I will not put this to the vote. However, as usual, the question what format the next AGM will have is one that we shall address prior to the next annual general meeting of shareholders. With that, I will move on to some questions. The answers of which have been given, Mr. Oswald, these are answers to questions that you asked. You are expecting detailed statements on the rights of shareholders and the question whether the shareholder rights in recent years have been reduced in recent years. In your contribution, you generally criticized the format of the meeting of shareholders. This is an answer we already gave to the questions of Ms. Hölzl and Mr. Kienle. As I said, this is something that we'll address in time.
It is also something that we will consider. We will consider the feedback from shareholders in taking our decisions the next time or when we do. You ask why the list of participants is not provided as a PDF in line with the legal requirements. The list of participants is available to all shareholders who log on electronically or their proxies via the shareholder portal. Finally, you said EUR 34.5 million as a maximum remuneration is not acceptable. Regarding this, we also received criticism from ISS, and we should take a position on this. Mr. Oswald, the sum of EUR 34.5 million relates to, I suppose it relates to an old figure. Meanwhile, the maximum remuneration for the CEO is at EUR 20 million.
The statement of ISS is something we consider, and our investor relations group is available for contact to any shareholders who would like to get in touch. With that, hold on, I will hand over to Christian. There's a question from Hans Oswald. There are members of the boards who like to think of their shareholders as clowns. Are you one of them? I don't like the suggestive answer. Let me give you my answer, Mr. Oswald. No, certainly not. Especially if the shareholders place their trust in SAP and have done so for many, many years. This is our greatest asset, and they are just as important as our staff members and our customers. Our shareholders are part of us. Of course, whatever decisions we take, we think about what the point of view of the shareholders would be.
Really, no one thinks that shareholders are unimportant or clowns. Frederike. Dominik. The question came up from Mr. Oswald on the virtual meeting versus hybrid format or face-to-face meeting or personal presence meetings. We are gathering experience with this virtual format, and we're using the experience gathered with it for further decisions. Of course, we're exploring all options and considering all options. We're going to look at our experience, but also given the agenda and based on that, we take a decision. You raised the question about the car park or free local traffic tickets. If we hold a virtual meeting, that doesn't make sense, right? You don't need a ticket to park your car for that. At this point, I would like to interrupt the AGM for 20 minutes.
However, before I do, can I ask the shareholders, Klaus Valdemann, Rolf, Johan Rodzinski, and Alfred Witcheck, if you still wish to speak, could you please get in touch via the portal and go to the waiting area or get in touch with our technical team? Otherwise, we cannot give you the opportunity to speak here. Now, let's take a 20-minute break. Welcome back, ladies and gentlemen. We will continue answering the remaining open questions. At this point, let me repeat that currently we do not have anybody else on the speakers list.
If anybody still wants to take the floor, they are requested to report to us as quickly as possible. I now hand over to Christian for answering Mr. Dufner's question. Yes, there's one question.
Do you feel that the good image and reputation of SAP will get damaged if you take such an opportunistic approach in terms of DEI? If you feel so, why not? I briefly already touched upon this in a previous question regarding the US legal requirements and so on, and I already mentioned all the rest in terms of DEI within SAP, that we maintain the programs that we can keep, take these matters seriously. In the past, SAP has shown repeatedly that we not only consider these things important, but that we also act accordingly. Gina. Yes, I’d like to follow up on this. Mr. Duffner, you had asked a couple of questions on inclusion and diversity, and I’d like to answer them in a comprehensive manner, very specifically, specifically again, also telling you which adjustments we made at SAP.
On the one hand, the Supervisory Board decided to take the KPI, Women in Leadership Positions, and replace it in the long-term bonus system by a Business Health Culture Index, KPI. The BHCI, that is the acronym, deals with equality, strengthening health, and long-term capabilities of all employees. It has been measured and also reported since 2009, this index. Furthermore, we asked the Executive Board also made some amendments in order to prevent the impact from certain programs and executive orders in the U.S. Essentially, to summarize this once again, it was the global KPI on Women in Leadership Positions, which will in the future focus on two instead of three levels below the board. We measured that KPI without taking the workforce in the U.S. into account. The global target of 40% female employees will not be pursued any further.
Instead, we will have a more differentiated measurement of that numbers on a local level. Secondly, you also asked whether it really is good to eliminate such equality programs and whether social responsibility still plays an important role within SAP in the future. I do have a bit of a technical issue on my system here. I have to hand back to you, Frederik, for a moment. All right, for the moment, we will continue with Mr. Kienle's questions, and we will then come back to Mr. Dufner's question. I think I will go first with Mr. Kienle's questions. Now, you once again asked about the reasons for Mr. Müller leaving the Executive Board, and you asked whether the investigation into inappropriate behavior confirmed so.
I can well confirm to you that we obtained a clear picture of all of the facts of the matter by clearly investigating all of the facts. Furthermore, the Supervisory Board discussed the legal interpretation of that matter together with its legal advisor. That means we have, of course, applied clear criteria based on clear legal views. Mr. Müller himself admitted that at a company event, he had behaved in an appropriate manner, and he had also excused for that in a very honest manner. After having reviewed this matter, we agreed with Mr. Müller that we terminate his contract by mutual consent. As indicated before, this was in the vested interest of all parties involved. I already told you a minute ago that we are going to comply with Mr.
Oswald's most and have individual votes on the approval of the acts of the members of the Supervisory Board and in the Executive Board. There was also the question of why we need a compensation advisor or consultant in the first place to validate the appropriateness of the annual compensation. Now, the annual review of the adequacy of the Executive Board compensation makes sure that compensation is in line with the current market conditions and the corporate policies. In spite of an existing compensation system, external factors such as competition, economic situation, and regulatory requirements may change, and that has to be taken into account on a regular basis. For that purpose, we train external advice in order to ensure an objective and unbiased analysis, carry out a benchmarking study, and make sure that our compensation approach is always competitive and compliant. Once again, let me repeat.
The compensation system does not contain any specific numbers which can be directly translated into the absolute compensation numbers, but this is rather, once again, ensured separately through this review. I can continue with the answers on financial questions where Mr. Kienle had some follow-up questions. Now, your comment was that you once again wanted to know more closely what our view on return on equity is. Now, we're not using this kind of a KPI. I've looked it up. The difference between the market value of our equity and the book value of the equity is a factor of 6.6. So that's entirely different than with banks, where it is close to the book value.
Therefore, as return on equity is relevant for the market value of a company, if you invest at a stock exchange, for that reason, this is not really a relevant criterion for us. In terms of the market valuation, we know that the stock exchange returns are in the single-digit range. The overall return of DAX in the last 10 years was 7.5%. Fortunately, SAP was well above that, namely twice as high, and NASDAQ is also significantly higher. Of course, we're not satisfied with the return on equity in the upper single-digit range, but we rather aim for significantly higher return on equity, which is return on the value of the money that we invest. You also asked about the company value. Here I have got to correct myself. EUR 800 million was LeanIX. WalkMe was EUR 456 million.
Here we can see also a gap between the book value and the carrying value. Rest assured that whenever we look for potential acquisition, we also verify very closely that we can generate an appropriate return on the capital employed. Now, you asked why profit dropped from 2023 to 2024, although revenues and the gross margin have increased. This is simply due to the fact that on the one hand, in 2023, we had a lot of one-off effects, namely due to the EUR 2.4 billion after tax qualification gain on sale. In 2024, we had more than EUR 3.1 billion of restructuring expenses. We believe that these very high one-off items will not get repeated. Adjusted for these effects, we then see a very strong improvement of our operating return, which we can then see in the non-IFRS operating income.
The question about audit services, we took a closer look at the EUR 7 million again. It is, as I told you before, namely that the lion's share, namely 90% of the EUR 10 million, is accounted for by the SSOC certifications. We ask the auditor to draw up certificates on product safety for our customers, which they need in order to give their auditors sufficient confidence that their financial statements can be audited by their auditors, even if this includes a transfer of business into the cloud. For us, it makes sense to have these services carried out by our specific auditor, although these might also be non-audit services. Therefore, we believe that it is fully compliant with the law to have our regular auditor also carry out these non-audit services. As I told you before, we had restructuring expenses of about EUR 3.1 billion.
That means we cut about 10,000 jobs. I had told you that this resulted in a very high gross effect. Now, a ballpark figure is if you take the average salary cost per employee, and then you will see that we were rather in the range of EUR 2 billion of cost cuts, which have not fully ended up in our P&L because on the other hand, we also hired additional employees. I told you that we hired more employees than we cut jobs. We had a slightly higher workforce at the end of the year. We also have to bear in mind that our business has grown massively.
That's why on a net basis, our margins have improved significantly if you compare fiscal years 2023- 2024 and take the restructuring costs on the one hand and the gains on the sale of Qualtrics on the other hand. There was also the question of how revenues and cloud revenues can be broken down onto new customers and existing customers. We do not publish any specific accounting figures there, and therefore, I would like to refrain from disclosing any further details on this. Yet, I can tell you that a large part of our index is still based upon the conversion of the installed base. We have a relatively large number of new customers in absolute numbers, but that number is very often much smaller than customers who are currently software subscribers and have now switched to cloud.
The existing customers, they generate higher revenues than new customers. Although the number of customers in these two categories is on a similar level, the contribution of new customers in terms of revenues is lower than the revenues from existing customers. With that, I think I hope I have answered all of the questions which Mr. Kienle had directed to me.
Yep. There was a question from Mr. Kienle on how many customers are really using our AI tools. He mentioned the question was not answered to his satisfaction. The question was, what percentage of our customers are using the AI tools? In our earlier answer, we said roughly 34,000 customers today use SAP Business AI. In total, SAP has several hundred thousand customers. However, most of those are small businesses that use various parts of our portfolio.
If you just look at the number of our ERP customers that contribute both to material revenue as well as complex transactions, that is much more limited to a mid-double-digit thousands number. The percentage then, if you look at 34,000 customers using Business AI, the critical mass of customers that use our ERP applications as in the mid-double digits is relatively high. I hope this answers your question.
Thanks a lot. These have been Mr. Kienle's questions, and we will now continue with Mr. Dufner's questions. With that, I hand back to Gina again. Thank you very much. I apologize for the technical hiccup that we had. I'll try again. No, I ask whether it can be right to eliminate programs on gender equality and a higher share of female employees, and whether diversity still plays a role within the framework of SAP.
Let me comment on this also on a personal note. We are not only convinced, but we also experience every day that inclusion at SAP is not driven by policies. It is rather a daily practice of all of our employees. We've got more than 30,000 employees in the so-called employee network groups in more than 50 countries. In 13 different employee network groups. Sorry. No. We've got these 13 employee network groups, which are open to all employees, and they promote solidarity, networking, and innovation. They also are massively supported by our corporate boards. The increasing growth of our ENG also demonstrates our commitment to DI. It's also important to mention that our standing of inclusion and equality also is further developed on a continuous basis.
With the inclusion of the new people agenda last year, we also massively changed the way of how we want to further develop employees because we're now taking a comprehensive approach on personal and organizational development. This starts with the recruitment of diverse talents. It also includes SAP-wide rotation programs that are promotional mobility and goes beyond the skill development across generations and leadership development. Thus, we create real added value for the business by promoting inclusion and diverse teams. Inclusion and equality is part of all processes and is also supported by our state-of-the-art HR management systems. Now, the question about the reputational damage has already been answered by Mr. Klein, and thus my questions have been answered. I hand back to you, Frederike. Thank you. I've got another question asked by Mr. Oswald.
Namely, that compensation is growing above average in a tremendous manner at other companies and whether SAP is willing to join that race. Now, at SAP, we aim for a competitive Executive Board compensation system in order to attract and retain the best executives. Doing so, of course, we take global competition into account, especially in this dynamic and innovative industry where we're doing business. Our compensation advisors help us in the annual review to make sure that the compensation is appropriate and attractive compared to the market. We do not have any discussions with a so-called compensation guru, as you called him. Now, according to my list, we have thus answered all of Mr. Oswald's questions. Now, once again, back to Gina for Ms. Mertens' question. Ms.
Mertens, you asked why we stick to our gender-based language, although, as you said, we are withdrawing these activities in the US. Of course, our employees are absolutely open in choosing the language when they apply. Nevertheless, SAP takes all incoming complaints seriously and also reviews it seriously. Feedback on the language we're using, of course, is also important, is taken into consideration. As an employer, SAP tries to use so-called inclusive wording in our communication in order to send out a signal of equality and in order to make sure that everybody feels addressed in the same way. Of course, as a company, we also keep a close eye on the way society uses language. Of course, we try to be open to any new developments and provide guidance to our staff at the same time. Thank you very much.
Ladies and gentlemen, we have thus answered all of the questions that have been asked. I would like to thank the Executive Board for the comprehensive answers. I also would like to thank all of you, our shareholders, for your questions and for your interest in our company. For the record, no one else wishes to speak, and all questions have been answered. I'm now closing the discussion on all agenda items. Ladies and gentlemen, we will now proceed to the votes on the proposed resolutions for agenda items 2 through 8. For agenda item 2, we will vote on the management's proposed resolution adjusted to the current numbers of shares, which I read out verbatim earlier and which has also been published on SAP's AGM website.
For the remaining agenda items, we will vote on the management's proposed resolutions and election proposals as were announced in the Federal Gazette on April 2, 2025, when this meeting was convened. For resolutions on agenda items 2 to 6, a simple majority of the votes cast is sufficient, whereas a three-fourths majority of the valid votes cast is required for resolutions on items 7 and 8. Let me also point out that no one may vote on the formal approval of their own acts, neither personally on behalf of somebody else nor through any other person. This pertains to items 3 and 4 on today's agenda. Rest assured that the affected Executive Board and Supervisory Board members will abstain from voting on these two matters.
Ladies and gentlemen, as explained at the outset, you now have one last chance to use our shareholder portal to either cast your vote electronically or to appoint and instruct the company's proxies. I'm looking at the clock. It is now 2:30 P.M. In five minutes, which means at 2:35 P.M., I will close the proxy appointment and instruction functions in the shareholder portal. The company proxies will then vote your shares as instructed. Once the voting is over, I will also close the postal voting function in the shareholder portal. Voting will be based on the so-called addition method. That means that you must actively vote yes or no for your vote to count. The yes and no votes will be tallied electronically by our system, once again, by counting the yes and the no votes. Abstentions will not be taken into consideration.
I will now briefly interrupt our AGM for about five minutes. Meine Damen und.
Ladies and gentlemen, we continue our annual general meeting. I state that all shareholders and their proxies have had sufficient time to cast their votes. The functions in the shareholder portal for appointing and instructing the company's proxies is now closed. The mail ballot function will remain active for a few more moments until the voting has closed. The company's proxies will now submit your votes through the system according to your instructions. I hereby close the voting and also confirm that no more postal votes can be cast. We will now determine the voting results. The notary will monitor this process. I will announce the number of attendees present during the vote and the results of the vote as soon as these figures are available to me.
I would also like to point out that after the announcement of the voting results marks the end of our annual general meeting of shareholders today. I will be wrapping things up shortly after that. Please keep this in mind if you plan to raise an objection to any of the decisions because this is only possible until the meeting is officially closed by me as the meeting chair. We will now take another short break, probably for about 15 minutes, and then report back to you with the voting results. [Foreign language]
[Foreign language] Ladies and gentlemen, we now resume our annual general meeting with the attendance figures at the time of voting and the voting results. All numbers will be clearly displayed during the live stream for you and provided to the notary for the official record. After the general meeting, you can find the voting results with all the details on our AGM website.
From the registered share capital in the amount of EUR 1,228,504,232 divided into 1,228,504,232 no-par value shares today, 655,443,625 shares with the same number of votes are present by the proxies appointed by the company. This equals 55.79% of the registered share capital. In addition, we have received postal votes for 2,876,986 no-par value shares that equals roughly 16.35% of the registered share capital. In addition, we have registered shareholders logged on, or their proxies representing 62,877,522 no-par value shares. They are logged on via the shareholders' portal. Up to this point, they have neither handed in their postal vote nor authorized the proxies of the company. In sum total, this equals 948,449,133 no-par value shares with the same number of votes. That translates into 77.2% of the registered share capital. I state and declare that the AGM has approved all the proposals regarding 2- 8 with the required majority.
The majorities are as follows: Item 2, resolutions on the appropriation of retained earnings for fiscal 2024, adopted with 99.69%. Approval of the board for 2024, here Christian Klein approved 99.52%. Muhammad Alam, 3.2 votes in favor, 99.52%. 3.3 approval of the act of Dominik Asam, 99.52%. Item 3.4, Thomas Saueressig, 99.52% votes in favor. 3.5, Gina Vargiu-Breuer, votes in favor, 99.52%. Scott Russell, 99.52%. 3.7, Julia White, 99.52% votes in favor. 3.8, Dr. Juergen Mueller, votes in favor, 99.49%. Now, agenda item 4, the resolution on the approval of the act of the supervisory board for fiscal 2024. 4.1, discharging Dr. Pekka Ala-Pietilä, votes in favor, 99.33%. 4.2, Lars Lammerding, 99.33% votes in favor. 4.3, Jakub Czerny, votes in favor, 99.33%. 4.4, Pascal Demat, votes in favor, 99.33%. 4.5, Aicha Evans, votes in favor, 99.33%.
4.6, Andreas Hahn, and the approval of his acts, votes in favor, 99.33%. 4.7, Professor Dr. Alf Herbrich, votes in favor, 99.33%. 4.8, Margaret Klein-Marger, votes in favor, 99.33%. 4.9, Jennifer Lee, votes in favor, 99.33%. 4.10, Dr. G. Lu, votes in favor, 99.33%. Now, 4.11, César Martin, votes in favor, 99.33%. 4.12, Gerhard Oswald, votes in favor, 99.33%. 4.13, Dr. Friederike Rotsch, votes in favor, 99.33%. 4.14, Nicholas Sapatier, votes in favor, 99.33%. 4.15, Dr. Ebert Schick, likewise, 99.33%. 4.16, Nina Strassner, votes in favor, 99.33%. 4.17, Dr. Rouven Westphal, votes in favor, 99.27%. 4.18, Dr. Gunnar Wiedenfels, votes in favor, 99.33%. 4.19, Professor Dr. Hasso Plattner, votes in favor, 99.27%. 4.20, Manuela Asche Holstein, votes in favor, 99.33%. 4.21, Monika Kováčová Dimitrova, votes in favor, 99.33%. 4.22, Peter Lengler, votes in favor, 99.33%. 4.23, Christine Riggits, votes in favor, 99.33%. 4.24, Dr.
Bunny Drenden, votes in favor, 99.33%. 4.25, Heike Steck, votes in favor, 99.33%. 4.26, Helmut Stengele, votes in favor, 99.33%. Finally, 4.27, James Wright, 99.33% votes in favor. As regards item 5, 5.2, resolution on the auditor for financial statement and the auditor of sustainability reporting for 2025, approved with 99.79%, and 5.2, resolution on the auditor of sustainability reporting for fiscal 2024, votes in favor, 99.92%. Item 6, resolution on the approval of the compensation report for fiscal 2024, votes in favor, 88.05%. Item 7, resolution on the revocation of the authorized capital one and creation of a new authorized capital one for the issuance of shares against cash payment with the restriction of subscription rights and appropriate changes of section 4, section 5 of the articles of incorporation. This was approved with 92.87%.
Item 7.2, resolution on the revocation of the authorized capital two and creation of a new authorized capital two for the issuance of shares against cash or in kind with the possibility to exclude subscription rights and the changes in the articles of cooperation, approved with 92.14%. The last agenda item, the resolution on a new authorization to enable virtual general meetings of shareholders and the changes in section 28 of the articles of incorporation, approved with 89.24%. Ladies and gentlemen, we have now reached the end of the agenda. I've repeatedly emphasized the opportunity to raise objections and the imminent closure of the meeting. If anyone still wishes to object to a resolution from today's general meeting, you must do so right away. Thank you very much for your interest in our and your company.
I would also like to thank all employees who were involved in the preparation and holding of today's event. I hereby conclude our annual general meeting and hand over one last time to the chairperson of our Supervisory Board, Pekka Ala-Pietilä.
Dear Frederike, I would like to sincerely thank you for your professional leadership during this annual general meeting. Thank you for that. Dear shareholders, I would also like to express my heartfelt thanks to you on behalf of the Supervisory Board and the Executive Board for your questions, for your comments, for your dialogue, and for your participation today. My thanks also go to the Executive Board and the employees of SAP, especially those who worked so hard to ensure that this annual general meeting could be conducted so smoothly. We look forward to welcoming you again next year to our annual general meeting. Thank you.