Exhibit 99.1

SAP Announces Q2 2023 Results

in € millions, unless otherwise stated; based on SAP group results from continuing operations

	Christian Klein, CEO:			Dominik Asam, CFO:
"This has been another strong quarter. We see significant opportunities ahead, in particular through the transformative power of AI. We are focused on delivering SAP Business AI that's relevant, reliable, and responsible and we see significant possibilities for market expansion through these technologies and new premium offerings."			"We are very pleased with our first half results. The revenue growth and increased profitability, combined with sustained growth of our cloud backlog, demonstrate the strength of our business model. Q2 performance puts us on the right trajectory and allows us to raise our cloud and software revenue, as well as the operating profit outlook for the year."

Walldorf, Germany – July 20, 2023.
SAP SE (NYSE: SAP) today announced its financial results for the second quarter ended June 30, 2023.

In Q1 2023, the Qualtrics consolidated group ("Qualtrics") was classified as discontinued operations under IFRS 5. Consequently, the contribution from Qualtrics is not included in the reporting of SAP's continuing operations. See section (M) Discontinued Operations. All figures in this statement are based on SAP group results from continuing operations unless otherwise noted.

Financial Performance

1 For a breakdown of the individual adjustments see table “Non-IFRS Adjustments by Functional Areas” in this Quarterly Statement.

2 From continuing and discontinued operations.

Due to rounding, numbers may not add up precisely.

1 For a breakdown of the individual adjustments see table “Non-IFRS Adjustments by Functional Areas” in this Quarterly Statement.

2 From continuing and discontinued operations.

Due to rounding, numbers may not add up precisely.

Financial Highlights1

Second Quarter 2023

Current cloud backlog grew by 21% to €11.54 billion and was up 25% at constant currencies. SAP S/4HANA current cloud backlog was up 65% to €3.72 billion and up 70% at constant currencies.

In the second quarter, cloud revenue was up 19% to €3.32 billion and up 22% at constant currencies. SAP S/4HANA cloud revenue was up 74% to €823 million and up 79% at constant currencies.

Software licenses revenue decreased by 26% to €316 million and was down 24% at constant currencies. Cloud and software revenue was up 5% to €6.50 billion and up 8% at constant currencies. Services revenue was up 4% to €1.05 billion and up 7% at constant currencies. Total revenue was up 5% to €7.55 billion and up 8% at constant currencies.

The share of more predictable revenue increased by 2 percentage points to 82% in the second quarter.

Supported by the successful completion of the next-generation cloud delivery program, cloud gross profit was up 20% (IFRS) to €2.36 billion, up 20% to €2.40 billion (non-IFRS), and up 24% (non-IFRS at constant currencies).

IFRS operating profit increased 28% to €1.36 billion. Non-IFRS operating profit was up 23% to €2.06 billion and up 28% at constant currencies. The increase was mainly driven by cloud revenue growth, finalization of the next generation cloud delivery program, as well as efficiency gains. In addition, operating profit in the second quarter of last year was negatively impacted by SAP’s decision to wind down its business operations in Russia and Belarus. Beyond that, Q2 IFRS operating profit growth benefitted from the restructuring expenses we reported in Q2 last year. On the other hand, it was negatively affected by higher share-based compensation expenses primarily due to the share-price development over the second quarter of this year.

IFRS earnings per share (basic) increased 15% to €0.62. Non-IFRS earnings per share (basic) increased 12% to €1.07. The effective tax rate was 33.8% (IFRS) and 30.4% (non-IFRS).

Free cash flow in the second quarter increased significantly to €604 million, driven by the strong expansion of operating profit and a reduction of payments for, amongst others, share-based compensation, capex and leasing. For the first six months, free cash flow was up 19% to €2.56 billion.

Completion of Qualtrics divestiture

On June 28, SAP announced the completion of the sale of its stake in Qualtrics at a price of US$18.15 in cash per share. The closing of the transaction contributed an after-tax gain on sale of approximately €3.2 billion (IFRS) and approximately €2.6 billion (Non-IFRS) to SAP’s results. The cash inflow resulting from the purchase price was €7.1 billion (€6.4 billion net of

1 The Q2 2023 results were also impacted by other effects. For details, please refer to the disclosures on page 29 of this document.

cash and cash equivalents held by Qualtrics). All contributions from the Qualtrics divestiture are reflected in results from discontinued operations. For details, please refer to section M in other disclosures on page 30 of this document.

Completion of next-generation cloud delivery program

Early in the second quarter, SAP successfully completed the migration of its cloud customer base to its state-of-the-art, harmonized cloud infrastructure. More than 20,000 customers and half a million tenants were migrated as part of the program, which was initiated at the beginning of 2021.

Business Highlights

SAP’s reportable segment showed the following performance:

1 Segment information for comparative prior periods were restated to conform with the new segment composition.

2 Software as a service

3 Platform as a service

4 Infrastructure as a service

In the second quarter, segment revenue in AT&S was up 5% to €7.27 billion and up 7% at constant currencies, primarily due to rapid cloud revenue growth, which was supported by SAP S/4HANA as well as Business Technology Platform. Operating Expenses of the segment decreased by 2% and remained flat at constant currencies, resulting in a segment margin of 32.3% and 32.6% at constant currencies. This implies a growth of 4.6 percentage points and 4.9 percentage points at constant currencies compared to the second quarter of the prior year.

1 Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS.

2 Platform as a service: PaaS primarily includes SAP Business Technology Platform and SAP Signavio.

3 Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud.

Due to rounding, numbers may not add up precisely.

Business Outlook

Financial Outlook 2023

For 2023, SAP is updating its revenue and operating profit outlook and now expects:

SAP continues to expect:

While SAP’s 2023 financial outlook is at constant currencies, actual currency reported figures are expected to be impacted by currency exchange rate fluctuations as the Company progresses through the year. See the table below.

Currency Impact Assuming June 2023 Rates Apply for 2023

Non-Financial Outlook 2023

SAP continues to focus on three non-financial indicators: customer loyalty, employee engagement, and carbon emissions.

In 2023, SAP continues to expect:

Ambition 2025

Demonstrating its strong business momentum and reflecting the divestiture of Qualtrics, SAP updated its mid-term ambition on May 16, 2023, and expects:

The 2025 ambition is based on an exchange rate of 1.10 USD per EUR.

2 The guidance is based on an adjusted methodology for 2023 to better reflect the business priorities of the company.

Additional Information

This press release and all information therein is preliminary and unaudited.

SAP Performance Measures

For more information about our key growth metrics and performance measures, their calculation, their usefulness, and their limitation, please refer to the following document on our Investor Relations website: https://www.sap.com/investors/performance-measures

Webcast

SAP senior management will host a financial analyst conference call on Thursday, June 20th at 7:00 PM (CEST) / 6:00 PM (BST) / 1:00 PM (Eastern) / 10:00 AM (Pacific). The conference will be webcast on the Company’s website at https://www.sap.com/investor and will be available for replay. Supplementary financial information pertaining to the second quarter results can be found at https://www.sap.com/investor.

About SAP

SAP’s strategy is to help every business run as an intelligent enterprise. As a market leader in enterprise application software, we help companies of all sizes and in all industries run at their best: SAP customers generate 87% of total global commerce. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. SAP helps give people and organizations deep business insight and fosters collaboration that helps them stay ahead of their competition. We simplify technology for companies so they can consume our software the way they want – without disruption. Our end-to-end suite of applications and services enables business and public customers across 25 industries globally to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, SAP helps the world run better and improve people’s lives. For more information, visit www.sap.com.

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This document contains forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations, forecasts, and assumptions that are subject to risks and uncertainties that could cause actual results and outcomes to materially differ. Additional information regarding these risks and uncertainties may be found in our filings with the Securities and Exchange Commission, including but not limited to the risk factors section of SAP’s 2022 Annual Report on Form 20-F.

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Contents

Financial and Non-Financial Key Facts
(IFRS and Non-IFRS)

1 In full-time equivalents

2 In CO2 equivalents. SAP’s carbon emission numbers are rounded to the nearest 5 kt. Therefore, the rounded full-year totals may not precisely equal the sum of the rounded quarterly numbers.

³ To conform to refined calculation logic, prior quarters have been adjusted.

4 From continuing and discontinued operations.

5 According to IFRS 5, comparison quarters 2022 for our continuing operations is unchanged from what previously has been reported.

Due to rounding, numbers may not add up precisely.

Primary Financial Statements of SAP Group (IFRS)

(A)    Consolidated Income Statements

(A.1)   Consolidated Income Statements – Quarter

1 For the three months ended June 30, 2023 and 2022, the weighted average number of shares was 1,169 million (diluted 1,180 million) and 1,171 million (diluted: 1,174 million), respectively (treasury stock excluded).

2 From continuing and discontinued operations.

Due to rounding, numbers may not add up precisely.

(A.2)    Consolidated Income Statements – Year-to-Date

1 For the six months ended June 30, 2023 and 2023, the weighted average number of shares was 1,168 million (diluted: 1,176 million) and 1,174 million (diluted: 1,174 million), respectively (treasury stock excluded).

2 From continuing and discontinued operations (B) Consolidated Statements of Financial Position

Due to rounding, numbers may not add up precisely.

1 According to IFRS 5, Consolidated Statements of Financial Position as of 12/31/2022 for our continuing operations is unchanged from what previously has been reported.

Due to rounding, numbers may not add up precisely.

(C)       Consolidated Statements of Cash Flows

1 We do no longer show cash flows linked to the supply chain financing (SCF) transactions from Taulia in investing/financing cash flow separately and therefore adjusted the comparative figures accordingly.

Due to rounding, numbers may not add up precisely.

Non-IFRS Numbers

SAP disclose certain financial measures such as expense (non-IFRS) and profit measures (non-IFRS) that are not prepared in accordance with IFRS and are therefore considered non-IFRS financial measures.

For a more detailed description of all of SAP’s non-IFRS measures and their limitations as well as SAP’s constant currency and free cash flow figures, see Explanation of Non-IFRS Measures online.

1 Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the IFRS numbers of the previous year's respective period.

Due to rounding, numbers may not add up precisely.

1 Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS numbers of the previous year's respective period.

Due to rounding, numbers may not add up precisely.

1 Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS numbers of the previous year's respective period.

2 The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q2 2023 mainly resulted from tax effects of share-based payment expenses and acquisition-related charges. The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in Q2 2022 mainly resulted from tax effects of share-based payment expenses, restructuring expenses and acquisition-related charges.

3 From continuing and discontinued operations

Due to rounding, numbers may not add up precisely.

1 Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the IFRS numbers of the previous year's respective period.

Due to rounding, numbers may not add up precisely.

1 Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS numbers of the previous year's respective period.

Due to rounding, numbers may not add up precisely.

1 Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS numbers of the previous year's respective period.

2 The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in the first half of 2023 mainly resulted from tax effects of share-based payment expenses and restructuring expenses. The difference between our effective tax rate (IFRS) and effective tax rate (non-IFRS) in the first half of 2022 mainly resulted from tax effects of share-based payment expenses and acquisition-related charges.

3 From continuing and discontinued operations

Due to rounding, numbers may not add up precisely.

Due to rounding, numbers may not add up precisely.

1 Share-based Payments

2 Regulatory Compliance Matters

Due to rounding, numbers may not add up precisely.

1 Share-based Payments

2 Regulatory Compliance Matters

Due to rounding, numbers may not add up precisely.

If not presented in a separate line item in our income statement, the restructuring expenses would break down as follows:

Due to rounding, numbers may not add up precisely.

Disaggregations

SAP has one reportable segment: the Applications, Technology & Services segment.

At the end of the second quarter 2023, we sold Qualtrics, formerly a reportable segment which derived its revenues mainly from the sale of experience management cloud solutions. For more information related to the sale of Qualtrics, see Note (M) in this quarterly statement.

For a more detailed description of SAP’s segment reporting, see Note (C.1) “Results of Segments” of our Consolidated Half-Year Financial Statements 2023.

Applications, Technology & Services1

1 Segment information for comparative prior periods were restated to conform with the new segment composition.

2 Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS.

3 Platform as a service: PaaS primarily includes SAP Business Technology Platform and SAP Signavio.

4 Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud.

5 Mainly derived from Applications, Technology & Services segment.

Due to rounding, numbers may not add up precisely.

Reconciliation of Cloud Revenues – Quarter

1 Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS.

2 Platform as a service PaaS primarily includes SAP Business Technology Platform and SAP Signavio.

3 Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud.

4 Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS numbers of the previous year's respective period.

Due to rounding, numbers may not add up precisely.

Applications, Technology & Services1

Due to rounding, numbers may not add up precisely.

1 Segment information for comparative prior periods were restated to conform with the new segment composition.

2 Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS.

3 Platform as a service: PaaS primarily includes SAP Business Technology Platform and SAP Signavio.

4 Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud.

5 Mainly derived from Applications, Technology & Services segment.

Reconciliation of Cloud Revenues and Gross Profit – Year-to-Date

1 Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS.

2 Platform as a service: PaaS primarily includes SAP Business Technology Platform and SAP Signavio.

3 Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud.

4 Constant currency period-over-period changes are calculated by comparing the current year's non-IFRS constant currency numbers with the non-IFRS numbers of the previous year's respective period.

Due to rounding, numbers may not add up precisely.

1 Constant currency period-over-period changes are calculated by comparing the current year's constant currency numbers with the actual currency numbers of the previous year's respective period.

Due to rounding, numbers may not add up precisely.

1 Constant-currency period-over-period changes are calculated by comparing the current year's non-IFRS constant-currency numbers with the non-IFRS number of the previous year's respective period.

Due to rounding, numbers may not add up precisely.

1 Acquisitions closed between January 1 and June 30 of the respective year

Other Disclosures

Due to rounding numbers may not add up precisely In the second quarter of 2023, finance income mainly consisted of gains from disposals and fair value adjustments of equity securities totaling €82 million (Q2/2022: €146 million) and €186 million in the first half of 2023 (HY1/2022: €463 million), and interest income from loans and receivables, other financial assets (cash, cash equivalents, and current investments) as well as from derivatives amounting to €103 million in the second quarter of 2023 (Q2/2022: €39 million) and €190 million in the first half of 2023 (HY1/2022: €65 million).

In the second quarter of 2023, finance costs were primarily impacted by losses from disposals and fair value adjustments of equity securities amounting to €93 million (Q2/2022: €225 million) and €226 million in the first half of 2023 (HY1/2022: €543 million) and interest expense on financial liabilities including lease liabilities and negative effects from derivatives amounting to €238 million in the second quarter of 2023 (Q2/2022: €50 million) and €370 million in the first half of 2023 (HY1/2022: €97 million).

Starting January 1, 2023, all activities related to changes in the code of SAP’s cloud and on-premise solutions are treated as development-related activities. Some of those activities, specifically code corrections, were previously considered as support-related activities. SAP believes this update aligns SAP’s accounting policy with market standards and increases comparability to its peers.

In the second quarter 2023, this update of our cost allocation policy resulted in an increase of the cloud gross profit by approximately €25 million, an increase of the software license and support gross profit by approximately €60 million, and an increase of our R&D expenses by approximately €85 million.

In the first half of 2023, the update of our cost allocation policy led to an increase of the cloud gross profit by approximately €50 million, an increase of the software license and support gross profit by approximately €130 million, and an increase of our R&D expenses by approximately €180 million.

For the full year 2023, the updated cost allocation policy is expected to result in decreased cost of cloud by approximately €100 million and cost of support by approximately €300 million, while in consequence increased R&D expenses by approximately €400 million.

Had SAP applied this accounting policy in 2022, its cost of cloud, cost of software licenses and support and R&D expense would have been as follows:

Due to rounding, numbers may not add up precisely.

On March 13, resulting from a process that was initiated on January 26, SAP announced it had agreed to sell all of its 423 million shares of Qualtrics International Inc. as part of the acquisition of Qualtrics by funds affiliated with Silver Lake as well as the Canada Pension Plan Investment Board. The sale closed on June 28, 2023, following satisfaction of customary closing conditions and regulatory approvals. At a purchase price of US$18.15 in cash per share, SAP’s stake was acquired for approximately US$7.7 billion. At the time Qualtrics was classified as a discontinued operation (following IFRS 5), there was no indication of an impairment (as the fair value less cost of disposal (calculated based on share prices) significantly exceeded the carrying amount).

SAP will remain a close go-to-market and technology partner for Qualtrics.

SAP’s financial results present Qualtrics as a discontinued operation (given the qualitative and quantitative significance for SAP), in accordance with IFRS 5 (the comparative figures have been adjusted accordingly). The Qualtrics disposal group was previously included in the Qualtrics reportable segment.

The pre-tax disposal gain included into discontinued operations (€3.7 billion) was calculated by adjusting the purchase price less cost of disposal (€7.0 billion) for net assets leaving the SAP Group (-€5.8 billion, mostly goodwill (-€4.0 billion) and other intangible assets (-€1.3 billion)) and the corresponding non-controlling interests (€2.4 billion) and amounts of other comprehensive income (€0.1 billion). SAP incurred taxes amounting to €0.5 billion in connection with the transaction.

The cash inflow resulting from the purchase price (€7.1 billion) was offset by cash and cash equivalents of €0.7 billion leaving the SAP group.

SAP continues to provide rental guarantees for certain offices used by Qualtrics. Qualtrics is obligated to indemnify SAP with respect to the guarantees.

Additional financial information relating to Qualtrics is presented in the following tables (revenues and expenses are presented after consolidation of transactions between Qualtrics and SAP’s continuing operations):

1 For 2023, € 0.5 billion is relating to the gain on sale of discontinued operations.

2 For the three months ended June 30, 2023 and 2022, the weighted average number of shares was 1,169 million (diluted 1,180 million) and 1,171 million (diluted: 1,174 million), respectively (treasury stock excluded).

For the six months ended June 30, 2023 and 2022, the weighted average number of shares was 1,168 million (diluted 1,176 million) and 1,174 million (diluted: 1,174 million), respectively (treasury stock excluded).

Due to rounding, numbers may not add up precisely.

Due to rounding, numbers may not add up precisely.

Exhibit 99.2

SAP Half-Year Report 2023

Table of Contents

Introductory Notes

This Half-Year Group Report meets the requirements of German Accounting Standard No. 16 “Half-yearly Financial Reporting” (GAS 16). We prepared the financial data in the Half-Year Report section for SAP SE and its subsidiaries in accordance with International Financial Reporting Standards (IFRS). In doing so, we observed the IFRS both as issued by the International Accounting Standards Board (IASB) and as endorsed by the European Union (EU). This does not apply to numbers expressly identified as non-IFRS. For additional IFRS and non-IFRS information, see the Supplementary Financial Information section.

This Half-Year Group Report complies with the legal requirements in accordance with the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG) for a Half-Year Financial Report, and comprises the consolidated Half-Year Management Report, condensed consolidated Half-Year Financial Statements, and the responsibility statement in accordance with the German Securities Trading Act, section 115 (2).

This Half-Year Group Report updates our consolidated Financial Statements 2022, presents significant events and transactions of the first half of 2023, and updates the forward-looking information as well as significant non-financial key figures contained in our Management Report 2022. This Half-Year Financial Report only includes half-year numbers. Our quarterly numbers are available in the Quarterly Statements for the first and second quarter 2023. Both the 2022 consolidated Financial Statements and the 2022 Management Report are part of our Integrated Report 2022, which is available at www.sapintegratedreport.com.

All of the information in this Half-Year Group Report is unaudited. This means that the information has been subject neither to any audit nor to any review by an independent auditor.

Unless otherwise stated, all figures in this Half-Year Report are based on SAP Group results from continuing operations. For the results from discontinued operations, see the Notes to the Consolidated Half-Year Financial Statements, Note (D.1).

Consolidated Half-Year Management Report

Strategy and Business Model

SAP continues to execute on the strategy and business model as described in the SAP Integrated Report 2022 to “enable every organization and every industry to become a network of intelligent, sustainable enterprises.”

Our Product Strategy

SAP’s suite of applications allows enterprises to manage their resources, spend, employees, and customer relationships. SAP cloud ERP and SAP Business Technology Platform (SAP BTP) are keystones of SAP’s product portfolio. SAP BTP is the platform for SAP, our customers, and our ecosystem. Moreover, with our SAP Business AI portfolio, we are expanding our existing business artificial intelligence (AI) to include generative AI.

The strategic pillars of SAP’s product strategy and their corresponding updates for the first half of 2023 are as follows:

Cloud ERP

SAP S/4HANA provides software capabilities mainly for finance, risk management, project management, procurement, manufacturing, supply chain management, asset management, and research and development. It also includes platform capabilities such as database (SAP HANA), data management, and lifecycle/solution management, as well as cloud ERP solutions.

On February 8, 2023, SAP announced a partnership with Merck KGaA, Germany, to jointly drive sustainable business-practice innovation. The partnership is expected to further accelerate the migration of Merck KGaA’s operations to the cloud with RISE with SAP, a core element of which is SAP S/4HANA Cloud.

In March 2023, we announced GROW with SAP, a new offering designed to help midmarket customers adopt cloud ERP for more speed, predictability, and continuous innovation. This comprehensive offering is built on SAP S/4HANA Cloud, public edition and SAP BTP.

On April 26, 2023, SAP and HP Inc. announced an expansion of its strategic relationship as HP invested in the RISE with SAP solution to support its focus on driving digital transformation, portfolio optimization and operational efficiency. The software will provide a platform for combining hardware, software, and services to deliver flexible workforce solutions.

SAP Business Technology Platform

SAP BTP is a unified, business-centric, and open platform that enables customers and partners to build, integrate, and extend applications while gaining insights from business data in a cloud-native way. SAP BTP aims to bring together capabilities across application development, automation, data and analytics (including planning), integration, and AI into one platform.

At the SAP Data Unleashed event held on March 8, 2023, SAP launched SAP Datasphere – an evolution of our SAP Data Warehouse Cloud solution that integrates key capabilities from SAP Data Intelligence Cloud. SAP Datasphere aims to provide a unified experience for data integration, data cataloging, semantic modeling, data warehousing, data federation, and data visualization.

SAP also announced strategic partnerships with data and AI companies – Databricks, Collibra, Confluent, and DataRobot – to enrich SAP Datasphere and allow organizations to create a unified data architecture that securely combines SAP software data and non-SAP data.

In May 2023, SAP and Google Cloud announced an extensive expansion of their partnership through a comprehensive open-data offering. The offering aims to enable customers to build an end-to-end data cloud that brings data from across the enterprise landscape using the SAP Datasphere solution together with Google’s data cloud. SAP has also published reference architectures on how to use Generative AI in combination with SAP BTP.

SAP Business AI

SAP Business AI solutions are built into systems that power the most critical business processes, trained using extensive industry-specific data and deep process knowledge, and created using responsible and ethical AI practices (see also the Business Conduct section). In addition, SAP provides a generative AI layer to SAP BTP to best facilitate the integration of generative AI functionalities across the portfolio. SAP also aims to enable its partner ecosystem to build generative AI-infused innovations based on SAP BTP as well.

At SAP Sapphire 2023, we announced a lineup of AI and generative AI capabilities that span across our solution portfolio. These are examples of what has been released: intelligent collections in SAP S/4HANA, intelligent slotting in SAP Extended Warehouse Management, line item matching in SAP Central Invoice Management, and SAP Intelligent Product Recommendation.

On May 2, 2023, SAP and IBM announced that IBM Watson technology will be embedded into SAP solutions to provide new AI-driven insights and automation to help accelerate innovation and create more efficient and effective user experiences across the SAP application portfolio.

On May 15, 2023, SAP announced the next step to its partnership with Microsoft – integrating SAP SuccessFactors solutions with Microsoft 365 Copilot and Copilot in Viva Learning as well as with Microsoft’s Azure OpenAI Service to access language models that analyze and generate natural language.

Sustainable Management Solutions

SAP offers sustainability solutions and services that aim to help customers drive sustainable practices not only inside their organization, but across the entire value chain. At SAP Sapphire 2023, we introduced solutions to enable transactional carbon accounting including the green ledger – a capability that connects carbon accounting data with financial data to better track and measure climate action initiatives. The green ledger will be embedded into SAP S/4HANA Cloud, with additional capabilities planned in new releases and will be available with RISE with SAP and GROW with SAP.

Additional capabilities for transactional carbon accounting include a June 2023 update to SAP Sustainability Footprint Management. This solution calculates and manages the full range of corporate, value chain, and product-level greenhouse gas emissions in a single environment.

Industry Solutions

SAP’s industry cloud solutions provide the opportunity for SAP and our partners to extend SAP’s core with modular solutions addressing industry-specific functions built on SAP BTP.

Human Capital Management

SAP SuccessFactors solutions for human resources aim to empower organizations to create an agile and future-ready workforce in a rapidly changing workplace. The portfolio includes core HR and payroll, talent management, employee experience management, and people and workforce analytics.

Spend Management

Intelligent spend management solutions from SAP aim to provide a more unified view of a customer’s spending to reduce costs, mitigate risks, improve collaboration, and make sure every spend decision is aligned with the business strategy. They cover direct and indirect spend, travel and expense, and external workforce management. SAP Ariba offerings combine industry-leading cloud-based applications to help companies discover and collaborate with a global network of partners.

Business Network

SAP Business Network is a cloud-based collaboration offering designed to enable companies to collaborate with trading partners for greater supply chain visibility.

In May 2023, we introduced SAP Business Network for Industry to address the unique needs of various industries. SAP Business Network for Industry will have an initial focus on consumer products, life sciences, high tech, and industrial manufacturing industries.

Business Process Management

Our business process transformation solutions are designed to help our customers scan their operations to understand and improve their business process landscape. The portfolio includes SAP Signavio solutions and SAP Build Process Automation.

In February 2023, we announced SAP Signavio Process Explorer, a solution designed to accelerate transformation projects by providing customers with access to best practice templates and industry standard processes derived from SAP’s five decades of experience. At SAP Sapphire 2023, we announced the availability of the new ‘plug and gain’ approach which aims to shorten SAP S/4HANA migration project preparation times from months to hours, reduce time to deploy, and simplify ongoing process optimization. We also announced new integrations for SAP Signavio Process Transformation Suite with SAP Ariba solutions, the SAP Cloud ALM tool, and SAP Build Process Automation.

Customer Relationship Management and Customer Experience

The SAP Customer Experience (SAP CX) portfolio aims to deliver a personalized view across customers and business partners, connecting the front and back office with solutions spanning from point-of-sale to manufacturing, logistics, customer experience, and returns management. SAP Business AI functionality in our SAP CX portfolio aims to help increase conversion rates and overall operational efficiency for sales, commerce, marketing, and services teams.

Partners and Ecosystem

SAP’s ecosystem consists of more than 20,000 partners worldwide in more than 140 countries. Partners can choose from a variety of SAP solutions to create their own unique SAP-qualified partner-packaged solution to provide small and midsize enterprises with fixed-scope packaged solutions. SAP expects the share of ecosystem-assisted cloud revenue to exceed 50% in the future.

In May 2023, new partner software certification scenarios through SAP Integration and Certification Center (SAP ICC) to support the clean core initiative were announced at SAP Sapphire 2023. A clean core means the core system is not modified or customized and can easily be upgraded in the cloud.

Services and Support

At SAP Sapphire 2023, we announced new editions of our SAP Preferred Success plan. These editions are designed to deliver expanded capabilities for specific groups of SAP solutions and provide a personalized partnership for the lifetime of a customer's cloud solution. The new editions include SAP Preferred Success for SAP Commerce Cloud, expanded edition; SAP Preferred Success for HXM solutions from SAP, expanded edition; and SAP Preferred Success for SAP Business Technology Platform, expanded edition.

Business Conduct

In accordance with our Global AI Ethics Policy, we continue to integrate AI into our solutions and evolve our software development process. We put this policy into place to help ensure that our AI systems and solutions are developed, deployed, and sold in line with the ethical standards laid out in our guiding principles. The policy also complements existing guiding principles regarding AI and will ensure that the use of AI at SAP is governed by clearly defined rules of ethics.

Our Investments in Innovation

Investment in R&D

SAP’s strong commitment to R&D is reflected in our expenditures (see the graphic below).

Research & Development (IFRS)

€ millions | change since previous half year

Due to the updated cost allocation policy described in Note (G.5), R&D figures for 2019 and 2020 have not been adjusted.

Figures for 2019 and 2020 are based on continuing and discontinued operations.
Therefore, they are only comparable to a limited extent.

In the first half of 2023, our IFRS R&D ratio, reflecting R&D expenses as a portion of total revenue, remained constant at 21% year over year. Our non-IFRS R&D ratio decreased two percentage points (pp) to 18% (first half of 2022: 20%). At the end of the first half of 2023, our total full-time equivalent (FTE) headcount in development was 36,100 (first half of 2022: 34,185). Measured in FTEs, our R&D headcount was 34% of total headcount (first half of 2022: 33%).

Competitive Intangibles

Some of the resources that are the basis for our current as well as future success, such as our ability to innovate, software we developed ourselves, customer capital, our employees and their knowledge and skills, our ecosystem of partners, and the brands we have built up, do not appear in the Consolidated Statements of Financial Position. This is apparent from a comparison of the market capitalization of SAP SE with the carrying amount of our equity. With a market capitalization of €153.7 billion at the end of the first half of 2023, the market value of our equity (based on all issued shares) is more than three times higher than its carrying amount.

Acquisitions and Divestitures

On June 28, 2023, SAP announced that Silver Lake Management and its co-investors along with the Canada Pension Plan Investment Board (CPPIB) had completed the acquisition of all the issued and outstanding shares of Qualtrics International Inc. (“Qualtrics”), including all shares owned by SAP, at a purchase price of US$18.15 in cash per share. The process was initiated on January 26 followed by an announcement on March 13 that SAP had agreed to sell all of its shares of Qualtrics. For more information, see the Notes to the Consolidated Half-Year Financial Statements, Note (D.1).

On July 11, Sapphire Ventures announced that it is deepening its commitment to AI by investing more than US$1 billion in AI-powered enterprise technology startups, including those specializing in generative AI. The commitment builds on Sapphire Ventures’ history of investing in and scaling enterprise AI startups, and will focus on all areas of the emerging AI tech stack including foundation models, enablers and middleware, and next-gen AI applications.

On July 18, SAP announced the next step in its commitment to deliver Business AI that is relevant, reliable, and responsible with strategic direct investments in three leading generative AI companies. The investments in Aleph Alpha, Anthropic and Cohere reinforce SAP’s open ecosystem approach to AI, leveraging the best technology to embed AI across SAP’s portfolio. They build on a series of AI partnerships and enterprise use cases announced in May and complement the above-mentioned commitment from Sapphire Ventures.

Performance Management System

Change in Calculation of Customer Net Promoter Score (NPS)

In the first quarter of 2023, SAP adjusted the methodology used to calculate its Customer NPS. Designed to improve data and better align the sample with SAP’s business priorities, the adjusted methodology provides for the following exclusions of answered survey questionnaires: partially completed responses, respondents who self-report that they have no influence in purchasing decisions, and a restriction in the number of eligible responses from Concur customers to ensure a proportional and reasonable reflection based on revenue share.

For more information about the calculation of the Customer NPS, see the Performance Management System section in our Management Report 2022.

Change in Non-IFRS Expense Measures

In the first quarter of 2023, we changed our non-IFRS expense measures. Going forward, we adjust our IFRS expense measures by excluding expenses for regulatory compliance matters associated with the provision for (potential) penalties and legal costs arising from certain ongoing governmental investigations into our business operations, which are described in our Notes to the Consolidated Financial Statements 2022, Note (G.3) under “Anti-Bribery Matters” and are limited to the scope of IAS 37.

The adjustment of our non-IFRS definition for our expense measures also impacts our operating profit (non-IFRS), profit before tax (non-IFRS), profit after tax (non-IFRS), and our non-IFRS key ratios such as operating margin, effective tax rate, and earnings per share, basic.

SAP believes that the changed non-IFRS definition for our expense measures is useful for investors, as the non-IFRS measures provide additional information that enables a comparison of year-over-year operating performance by eliminating the effects of regulatory compliance matters. Without being analyzed in conjunction with the corresponding IFRS measures, the non-IFRS measures based on the changed non-IFRS definition, besides other reasons, are not indicative of our present and future performance, as expenses ascribed to the regulatory compliance matters may include penalties and legal costs, all of which would impact the operating cash flows of the business. The exclusion of expenses associated with regulatory compliance matters does not affect Executive Board members’ compensation, i.e., those expenses measures are fully considered.

For more information, such as the explanation, the usefulness, and the limitations of non-IFRS measures, see the Performance Management System section in our Management Report 2022.

Financial Performance: Review and Analysis

Economy and the Market

Global Economic Trends

The global economy started stronger this year than in the fourth quarter of 2022, mainly driven by the services sector, states the European Central Bank (ECB) in its most recent Economic Bulletin1. This vigor was due to the reopening of the Chinese economy and the resilience of labor markets in the United States. Nevertheless, high inflation, tightening financial conditions, and geopolitical tensions were headwinds to global growth.

In the EMEA region, according to the ECB, the euro area economy stagnated in the first half of 2023 due to a drop in private and public consumption despite lower energy prices, the easing of supply bottlenecks, a strong labor market, and a supportive fiscal policy. However, conditions in different sectors of the economy were uneven: manufacturing weakened, yet services proved resilient.

The Americas region showed tighter financial and credit conditions, but labor markets were resilient particularly in the United States. Overall, real GDP decelerated in the first half of this year, finds the ECB.

As for the APJ region, the consumption-led recovery in demand in China turned out stronger in the first quarter than the ECB had previously expected, as pandemic-related disruptions proved short-lived. However, the recovery faded in the second quarter and did not spill over from services to manufacturing. In Japan, real GDP grew in the first quarter of 2023, reflecting reopening dynamics.

The IT Market

“The digital world is here and with it comes a new wave of enterprise application spending poised to create differentiating value for organizations of all sizes globally,”2 says International Data Corporation (IDC), a U.S.-based market research firm. “Organizations […] need enterprise applications as they invest in their future,” but at the same time, “inflation, recession, and staffing/labor shortages [remain] concerns for customers’ technology strategies and budgets.”2

According to IDC, while “digital transformation continues for 49% of organizations, 51% of organizations consider themselves a digital business. For digital businesses, the investment continues; the emphasis is on using technology to compete and as a competitive advantage; continuously innovating with AI/ML, generative AI, IoT, and so forth; and relying more on an ecosystem of partners.”2 In this context, “organizations are still shifting from on-premises systems to hybrid, private, and public cloud.”2

Particularly, “improvements in overall efficiency are closely linked with IT as the means to facilitate improved energy and enterprise efficiency.”3 IDC states that such “technological innovations […] will be essential to lower costs and reduce carbon footprints.”3 Currently, “approximately 17% of European businesses are in the more advanced stages of implementing technology solutions to track sustainability-related KPIs. However, even these businesses are not fully ready to comply with the requirements of the forthcoming Scope 3 disclosures” based on the European Commission’s Corporate Sustainability Reporting Directive (CSRD).3

1 European Central Bank, Economic Bulletin, Issue 4/2023, Publication Date: June 29, 2023. 

2 IDC Market Perspective: June 2023: Enterprise Application Spending Continues for the Foreseeable Future, Doc #US50665223, May 2023. 

3 IDC Vendor Profile: Sustainability Index for Software Providers: SAP, Doc #EUR147190121, May 2023.

Impact on SAP

SAP had a strong first half of 2023. Despite ongoing macroeconomic uncertainties and elevated inflation rates, SAP continued to execute on its strategy and showed strong cloud and total revenue performance across all regions. At Sapphire in May, SAP announced an update of its 2025 financial mid-term ambition. The update mainly reflects the divestiture of Qualtrics, the anticipation of continuing rapid cloud revenue growth, and a great degree of resilience in SAP’s support business.

The advances in business AI represent a significant opportunity for SAP. Our SAP Business AI portfolio is expected to provide stronger economic growth, mainly through productivity increases. In addition, at SAP Sapphire in May, the Company showcased multiple AI use cases and partnerships. With that, SAP continues to broaden its ecosystem, increase customer value, and strive for leadership in this important market trend.

Performance Against Our Outlook for 2023

In this section, all discussion of the contributions to target achievement is based either on IFRS or non-IFRS measures. Whether IFRS or non-IFRS measures are discussed is either explicitly stated in the header of the respective subsection, or the numbers are individually identified as either IFRS or non-IFRS measures.

We present, discuss, and explain the reconciliation of IFRS measures to non-IFRS measures in the Supplementary Financial Information section.

Outlook for 2023 (Non-IFRS)

For our outlook based on non-IFRS numbers, see the Financial Targets and Prospects section in this consolidated Half-Year Management Report.

Key Figures – SAP Group in the First Half of 2023 (IFRS and Non-IFRS)

Operating Performance (IFRS and Non-IFRS)

Cloud and software revenue (IFRS) was €12,863 million (first half of 2022: €12,005 million), an increase of 7%. On a constant currency basis (non-IFRS), the increase was 8%. This increase was mainly driven by cloud revenue growth of 21%. Software licenses revenue (IFRS) decreased 20% (19% at constant currencies, non-IFRS) as more customers selected SAP’s cloud offerings such as RISE with SAP. Software support revenue (IFRS) was €5,778 million (first half of 2022: €5,900 million), a decrease of 2% (1% at constant currencies, non-IFRS).

Our operating expenses (IFRS) increased 12% to €12,834 million (first half of 2022: €11,449 million), primarily from share-based payment expenses and restructuring expenses. Operating expenses (non-IFRS) increased 4% to €11,062 million (first half of 2022: €10,626 million) in line with revenue growth.

Share-based payment expenses increased to €1,167 million (first half of 2022: €513 million), mainly due to an increase in the SAP share price of around €30 in the first half of 2023 (first half of 2022: drop Most of the restructuring expenses, which increased to €257 million (first half of 2022: €119 million), relate to the targeted restructuring program in selected areas of the company that SAP announced and launched in the first quarter to further focus on its strategic growth areas and accelerated cloud transformation.

in the SAP share price of around €40). For more information about share-based payment expenses, see the Notes to the Consolidated Half-Year Financial Statements, Note (B.3).

The vast majority of projected expenses has already been recognized in the first half of 2023. For more information about restructuring, see the Notes to the Consolidated Half-Year Financial Statements, Note (B.4).

Compared with the same period in the previous year, our operating profit (IFRS) decreased €370 million to €2,161 million (first half of 2022: €2,531 million), a decrease of 15%.

The described effects also apply to our non-IFRS operating profit and non-IFRS operating margin, except for the restructuring expenses and share-based payments.

Profit After Tax and Earnings per Share (IFRS)

Profit after tax from continuing operations (IFRS) was €1,128 million (first half of 2022: €1,629 million), a decrease of over 31% compared to the same period in 2022. Basic earnings per share (IFRS) was €0.97 (first half of 2022: €1.41), a decrease of 31%. The change in profit after tax from continuing operations (IFRS) and basic earnings per share from continuing operations (IFRS) is mainly due to the above-mentioned increase in shared based compensation expenses and restructuring expenses. Profit after tax from discontinued operations (IFRS) was €2,763 million (first half of 2022: -€794 million). The change is due to the divesture of Qualtrics and the corresponding disposal gain (IFRS) amounting to €3.2 billion in the first half of 2023.

The effective tax rate (IFRS) was 36.3% (first half of 2022: 29.0%). The year-over-year increase mainly resulted from changes in non-deductible expenses and valuation allowances on deferred tax assets.

Profit After Tax and Earnings per Share (Non-IFRS)

Profit after tax from continuing operations (non-IFRS) was €2,502 million (first half of 2022: €2,269 million), an increase of 10%. Basic earnings per share (non-IFRS) was €2.15 (first half of 2022: €1.96), an increase of 10%. The change in profit after tax from continuing operations (non-IFRS) and basic earnings per share from continuing operations (non-IFRS) is mainly due to the above-mentioned increase of cloud revenue and improvements in cloud margin. Profit after tax from discontinued operations (non-IFRS) was €2,544 million (first half of 2022: -€10 million). The change is due to the divesture of Qualtrics and the corresponding disposal gain) amounting to €2.6 billion in the first half of 2023. The effective tax rate (non-IFRS) was 29.4% (first half of 2022: 27.2%). The year-over-year increase mainly resulted from changes in valuation allowances on deferred tax assets.

Segment Information

At the end of the first half of 2023, SAP had five operating segments: the Applications, Technology & Services segment, the Business Network segment, the Emarsys segment, the Sustainability segment, and the Taulia segment. Due to its size, the Applications, Technology & Services segment is a reportable segment whereas the other operating segments are non-reportable.

At the end of the second quarter of 2023, we sold Qualtrics, formerly a reportable segment which derived its revenues mainly from the sale of experience management cloud solutions.

For more information about our segment reporting and the changes in the composition of our segments in the first half of 2023, see the Notes to the Consolidated Half-Year Financial Statements, Notes (C.1) and (C.2).

Applications, Technology & Services

1 Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS. 

2 Platform as a service: PaaS primarily includes SAP Business Technology Platform and SAP Signavio. 

3 Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud.

The Applications, Technology & Services segment recorded an increase in cloud revenue of 22% in the first half of 2023 (22% at constant currencies), supported by SAP Business Technology Platform as well as SAP S/4HANA, whose cloud revenue mainly occurred in the Applications, Technology & Services segment, and increased 76% to €1,539 million. At the same time, SAP S/4HANA current cloud backlog grew 65% and ended the first half of 2023 at €3,717 million. Cost of cloud for the Applications, Technology & Services segment increased 14% (13% at constant currencies), which overall caused the cloud gross margin to widen 2.1 pp (2.4 pp at constant currencies) to 69.6%. Thereof, PaaS grew 3.1pp (3.3pp at constant currencies), which resulted in a PaaS cloud gross margin of 84.1%. The SaaS cloud gross margin grew 0.3pp (0.5pp at constant currencies) and ended the first half of the year at 69.2%. Software support revenue decreased 2% (1% at constant currencies) compared to the prior year, ending the first half of the year 2023 at €5,777 million. Software licenses revenue decreased 20% (19% at constant currencies) to €591 million. As such, the segment achieved a total software licenses and support revenue of €6,369 million. Total segment revenue nevertheless rose by 7% (8% at constant currencies) and ended the first half of 2023 at €14,429 million.

Overall, the share of more predictable revenue within the Applications, Technology & Services segment increased 1.3pp from 79.9% in the first half of 2022 to 81.2% in 2023.

Cost of revenue increased 8% (8% at constant currencies) compared to the prior year, ending the first half of 2023 at €3,922 million. This development was mainly driven by an increase in cost of cloud.

Segment profit increased 17% (19% at constant currencies) and ended the first half of 2023 at €4,465 million. The segment margin improved 2.7pp (3.0pp at constant currencies) to 30.9%.

Reconciliation of Cloud Revenues and Gross Profit

1 Software as a service: SaaS comprises all other offerings which are not shown as PaaS and IaaS. 

2 Platform as a service: PaaS primarily includes SAP Business Technology Platform and SAP Signavio.

3 Infrastructure as a service: A major portion of IaaS comes from SAP HANA Enterprise Cloud. 

4 Constant currency period-over-period changes are calculated by comparing the current year’s non-IFRS constant currency numbers with the non-IFRS numbers of the previous year’s respective period. 

Due to rounding, numbers may not add up precisely.

Finances and Assets (IFRS)

Cash Flow

The higher operating cash flow was mainly attributable to lower share-based payments (€229 million decrease year over year), lower payments for income taxes (€54 million decrease year over year), as well as lower net interest payments (€47 million decrease year over year).

Group Liquidity

* Net debt as at 12/31/2022 includes continuing and discontinued operations, net debt as at 6/30/2023 only includes continuing operations.

Liquidity and Financial Position

In the first half of 2023, we repaid €1,600 million in Eurobonds. As at June 30, 2023, we had issued €930 million under our Commercial Paper (CP) program with short-term maturities. The increase in cash and cash equivalents includes a net inflow of 6,265 million from the sale of SAP’s stake in Qualtrics.

Employees

People are the heart of our organization. SAP works to attract and keep the best talent by aiming for a highly engaged, diverse, and future-fit workforce equipped with the right skills, all while adapting to new market trends. For a detailed description of our People Strategy, see the Employees section in our Integrated Report 2022.

With our Pledge to Flex working model, we have successfully laid the foundation for hybrid work at SAP. We have established a new market standard, offering flexibility for our workforce in accordance with business requirements and local legislation. Looking forward, we will focus on ensuring a mix between working in the office and working remotely. We have launched our global “I’m In” campaign. It promotes the value of being in the office on a regular basis as a standard element of effective and productive hybrid work – based on individual role, team set-up, and business requirements. In taking a holistic approach to hybrid work, we offer managers and employees a variety of comprehensive enablement assets complemented by further engagement formats on a local level. This approach allows our employees to thrive, while strengthening our employer attractiveness, productivity, and innovation.

To compete in our dynamic industry, SAP needs to continuously adapt our skills. We do this by managing skill-based development for our workforce and ecosystem. SAP is establishing the scalable data foundation necessary for skill-based learning recommendations. This foundation helps us anticipate and react to market changes, by providing a unified, industry-standard skills taxonomy. Uniformity across internal and external scenarios that utilize skills taxonomies allows SAP to harness immense benefits from a shared language. This adds value for partners and customers and enables SAP to become a more adaptive enterprise. We have made great strides in this regard recently in our Sales, Presales, and Development areas. For example, with the help of an internally developed tool, our Sales organization identified over 60 key skills, relevant for 75% of quota carriers. They have demonstrated that quota carriers proficient in key skills related to selling generally have quota attainments 15% higher than those who are not proficient. SAP also offers a vast library of digital learning content across the SAP solution portfolio via the SAP Learning Web site, SAP Learning Hub, openSAP, and instructor-led training, so people can build and maintain their SAP software skills. We reached over 1 million external active learners in 2022 and 700,000 in the first half of 2023.

Diversity in the workplace means celebrating our differences and acknowledging the unique contributions and perspectives we all bring to the Company. We aim to increase diversity in our workforce at all levels of SAP to reflect the spectrum of diversity in society, including visible diversity such as race, ethnicity, gender, and age, as well as invisible diversity such as neurodiversity, gender identity, and socio-economic background. At SAP, we are committed to fostering equality by achieving our ultimate goal of gender parity at all levels of the organization. We are making progress with our goals to increase women in the workforce1 and women in management2. In the first half of 2023, women comprised 35% of our workforce (first half of 2022: 34.7%; end of 2022: 35%) and hold 29.5% of all management positions at the Company (first half of 2022: 28.9%; end of 2022: 29.4%). We aim to increase the share of women in management to 30% by the end of 2023. To reach our ultimate goal of gender parity, we are building a leadership pipeline through our Women to Watch program piloted in the first half of 2023 with 262 participants. We are also encouraging an inclusive leadership mindset, recognizing and overcoming biases through our intentional inclusion workshops for leaders. Furthermore, women in management was integrated as one of the ESG (environment, social, governance) KPIs in a new sustainability-linked revolving credit facility and the long-term incentive compensation of the SAP Executive Board (effective 2024). For further ESG-related information, see the Energy and Emissions section.

Looking at our people-related KPIs, the Employee Engagement Index comes in at 80%, a slight increase of 1pp compared to the score of 79% in October 2022, and no change compared to the full-year score published in our Integrated Report 2022. Just like at the end of 2022, our Leadership Trust Net Promoter Score remains at its all-time high of 72. And at 81%, the Business Health Culture Index remains as strong as at the end of 2022. At the end of the first half of 2023, SAP’s Employee Retention Rate was still high at 96.2% (compared to 95.3% at the end of the first half of 2022 and 91.4% at the end of 2022).

We define retention as the ratio of the average number of employees minus the number of employees who voluntarily departed, to the average number of employees (in full time equivalents, FTEs). On June 30, 2023, we had 105,328 FTEs worldwide (June 30, 2022: 104,988; December 31, 2022: 106,312). For a breakdown of headcount by function and geography, see the Notes to the Consolidated Half Year Financial Statements, Note (B.1).

1 We define “women in the workforce” as the share of women in the total workforce. 

2 We define “women in management” as the share of women in management positions as compared to the total number of managers, expressed by the number of individuals and not FTEs. It includes three categories: 1) Managers managing teams: Refers to managing teams of at least one employee or vacant positions; 2) Managers managing managers: Refers to managing managers who manage teams; 3) Executive Board members.

Energy and Emissions

In the first half of 2023, we maintained our commitment to help rebuild a more resilient, restorative, and inclusive economy within the planetary boundaries – both as an enabler and exemplar. We strive towards achieving a world of zero waste, zero emissions, and zero inequality.

To help our customers on this journey, we offer an expanded portfolio of sustainable business solutions. For more information, see the Our Product Strategy section in this consolidated Half-Year Management Report.

In Q1 2023, we achieved SAP’s carbon neutrality target, meaning that our net carbon emissions reached 0 kilotons (kt) of CO2equivalents (CO2e) after decreasing to 85 kt at year end 2022. In Q2 2023, the emissions remained at 0 kt. This downward trend reflects our strategic three-fold approach of “avoid-reduce-compensate” where we aim to compensate only for those emissions which cannot yet be avoided. SAP’s amount of compensated emissions per FTE dropped from about 2 tons of CO2e (2018) to less than 1 ton of CO2e (2022).

Having reached our carbon neutrality target, we are now focused on our next goal: becoming net zero along our entire value chain by 2030 in line with a 1.5°C future. In this regard, we aim to apply the demanding Corporate Net-Zero Standard set by the Science-Based Targets initiative (SBTi).

In March 2023, we incorporated environmental, social, and governance (ESG) components into a new revolving credit facility for the first time. In line with our sustainable corporate strategy, we integrated ‘net zero’ alongside ‘women in management’ as components of our new sustainability-linked revolving credit facility of €3 billion. At the Annual General Meeting of Shareholders in May 2023, the shareholders approved the inclusion of the same two new ESG KPIs alongside financial metrics in the long-term incentive compensation of the SAP Executive Board starting 2024.

SAP’s ESG efforts – along with its measures, initiatives, and targets – have been recognized by renowned sustainability ratings and ranking organizations:

Organization and Changes in Management

On March 31, 2023, SAP announced that the Supervisory Board had extended the contracts of Executive Board members Julia White, Chief Marketing & Solutions Officer, and Scott Russell, who leads SAP’s Customer Success organization, for three years until 2027.

Furthermore, Sabine Bendiek, Chief People & Operating Officer and Labor Relations Director, informed the Supervisory Board that she will not renew her contract which expires on December 31, 2023.

Risk Management and Risks

We have comprehensive risk-management structures in place that are intended to enable us to recognize and analyze risks early on, take the appropriate action, and mitigate any risks that materialize as presented in the Risk Management and Risks chapter in our Integrated Report 2022 and our Annual Report on Form 20-F for 2022.

For changes in our Litigation, Claims, and Legal Contingencies since our last Integrated Report, see the Notes to the Consolidated Half-Year Financial Statements, Note (G.1).

Based on our aggregation approach and taking into consideration the mitigations implemented for all our risk factors and risks, as at June 30, 2023, we see no material change relative to our 2022 risk assessment or 2022 risk-bearing capacity. We do not believe that any of the risks we identified in our Integrated Report 2022 and Annual Report on Form 20-F for 2022, and as outlined herein, jeopardize our ability to continue as a going concern.

Expected Developments and Opportunities

Future Trends in the Global Economy

The global growth and inflation outlook in the European Central Bank’s (ECB) current projections1 remains broadly unchanged, but with a small upward revision due to a recovery in demand in China. However, this outlook remains highly uncertain, with broader geopolitical tensions and renewed financial market tensions as downside risks and the strong labor market and increasing confidence as upside risks.

The ECB expects inflation to remain high in the EMEA region at 5.4% in 2023 but to decrease thereafter because of lower commodity prices. The ECB has also lowered its economic growth projections for the euro area until 2025. However, it still expects economic growth to strengthen in the coming quarters as energy prices moderate, foreign demand strengthens, supply bottlenecks are resolved, and uncertainty continues to recede.

As for the Americas region, the resilience of labor markets in the United States is underpinning consumer demand. The ECB projects U.S. economic activity to be driven mainly by the services sector, whereas manufacturing output could remain relatively subdued. In summary, the ECB expects real GDP in the United States to recover tepidly in the second half of 2023.

In the APJ region, projects the ECB, recovery in China will presumably continue but could lose momentum if the rapid recovery of consumer spending after the reopening of the economy does not expand to manufacturing. In Japan, economic activity is likely to expand at a moderate pace, supported by pent-up demand and ongoing policy support.

Economic Trends
GDP Growth Year Over Year