Second Quarter 2011 Preliminary Results Release

Second Quarter 2011Results ReleaseWalldorf, GermanyWednesday, July 27, 2011

© 2011 SAP AG. All rights reserved. 2

Safe Harbor Statement

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP’s future financial results are discussed more fully in SAP’s filings with the U.S. Securities and Exchange Commission (“SEC”), including SAP’s most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.


Agenda

Income Statement

Balance Sheet and Cash Flow Analysis

Outlook

Appendix


6th Consecutive Quarter of Double-Digit Non-IFRS SSRS Revenue Growth

Operating Margin (%)IFRS Non-IFRS

Q2/11Q2/10 Q2/11 Q2/10

-0.7pp 1.3pp(1.5pp*)

Basic Earnings Per Share (€)IFRS Non-IFRS

Q2/11Q2/10 Q2/11 Q2/10

20% 26%

30.826.7 29.526.00.59

0.41 0.470.49

Software Revenue (€ bn)IFRS Non-IFRS

26%(35%*)

SW & SW-Related Service Revenue (€ bn)IFRS Non-IFRS

Q2/10 Q2/11

26%

Q2/10 Q2/11Q2/11Q2/10 Q2/11 Q2/10

* at constant currencies

14% 15%(20%*)

0.800.64

0.800.64

2.26 2.58 2.26 2.59


Strong Top-Line Performance in First Half 2011 Shows That SAP is on Track to Achieve Fiscal Year Targets

Operating Margin (%)IFRS Non-IFRS

H1/11H1/10 H1/11 H1/10

-1.6pp 1.1pp(1.2pp*)

Basic Earnings Per Share (€)IFRS Non-IFRS

H1/11H1/10 H1/11 H1/10

12% 24%

28.324.6 27.223.0 1.040.74 0.840.83

Software Revenue (€ bn)IFRS Non-IFRS

26%(31%*)

SW & SW-Related Service Revenue (€ bn)IFRS Non-IFRS

H1/10 H1/11

26%

H1/10 H1/11H1/11H1/10 H1/11 H1/10


17% 17%(19%*)

1.391.10 1.391.10 4.214.91

4.214.93


Successful Quarter with Double-Digit Top-Line Growth and Strong Non-IFRS Margin Expansion

€ millions, unless otherwise stated Q2/11 Q2/10 % Q2/11 Q2/10 % %at cc

Software revenue 802 637 26 802 637 26 35 Support revenue 1,681 1,526 10 1,689 1,526 11 15 Subscription & other SW-rel. serv. rev. 96 95 1 96 95 1 3SSRS revenue 2,579 2,258 14 2,587 2,258 15 20 Consulting revenue 579 528 10 579 528 10 15 Other service revenue 142 108 31 142 108 31 37Professional services & other serv. rev. 721 636 13 721 636 13 19Total revenue 3,300 2,894 14 3,308 2,894 14 20Total operating expenses -2,443 -2,120 15 -2,289 -2,040 12 17Operating profit 857 774 11 1,019 854 19 26Finance income, net -18 -12 50 -18 -12 50Profit before tax 804 676 19 966 767 26Income tax expense -216 -185 17 -263 -205 28Profit after tax 588 491 20 703 562 25Basic earnings per share, in € 0.49 0.41 20 0.59 0.47 26

IFRS Non-IFRS


Top-Line Growth in First Half 2011 Combined with Operational Excellence Results in Strong Profitability

€ millions, unless otherwise stated H1/11 H1/10 % H1/11 H1/10 % %at cc

Software revenue 1,385 1,101 26 1,385 1,101 26 31 Support revenue 3,336 2,920 14 3,361 2,920 15 16 Subscription & other SW-rel. serv. rev. 185 184 1 185 184 1 0SSRS revenue 4,906 4,205 17 4,931 4,205 17 19 Consulting revenue 1,148 1,007 14 1,148 1,007 14 15 Other service revenue 270 191 41 270 191 41 42Professional services & other serv. rev. 1,418 1,198 18 1,418 1,198 18 20Total revenue 6,324 5,403 17 6,349 5,403 18 19Total operating expenses -4,870 -4,072 20 -4,551 -3,933 16 17Operating profit 1,454 1,331 9 1,798 1,470 22 24Finance income, net -32 -12 >100 -32 -12 >100Profit before tax 1,388 1,197 16 1,732 1,354 28Income tax expense -397 -319 24 -501 -354 42Profit after tax 991 878 13 1,231 1,000 23Basic earnings per share, in € 0.83 0.74 12 1.04 0.84 24

IFRS Non-IFRS


SSRS Revenue Breakdown by Region**Second Quarter 2011

€ millions | yoy percent change

IFRS Non-IFRS

* At constant currencies ** Based on customer location

Total 2,579 | +14%

EMEA1,251 | +16% | +16%*

thereof Germany397 | +10% | +10%*

thereof rest of EMEA854 | +19% | +19%*

Americas909 | +11% | +24%*

thereof United States:679 | +10% | +26%*

thereof rest of Americas

231 | +12% | +17*

Asia Pacific Japan427 | +19% | +23%*

thereof Japan137 | +23% | +25%*

thereof rest of APJ289 | +17% | +21%*

Total 2,587 | +15% | +20%*

EMEA1,249 | +16%

thereof Germany397| +10%

thereof rest of EMEA852| +19%

Americas904| +10%

thereof United States:675 | +10%


230 | +11%

Asia Pacific Japan426| +19%

thereof Japan137 | +23%

thereof rest of APJ289 | +17%


SSRS Revenue Breakdown by Region**First Half 2011

€ millions | yoy percent change

IFRS Non-IFRS

* At constant currencies ** Based on customer location

EMEA2,375 | +14%

thereof Germany728 | +8%

thereof rest of EMEA1,647 | +17%

Americas1,746 | +18%

thereof United States:1,295 | +19%


451 | +13%

Asia Pacific Japan785 | +22%thereof Japan

261 | +25%thereof rest of APJ

525 | +22%

Total 4,906 | +17%

EMEA2,382| +15% | +14%*

thereof Germany728 |+ 8% | +8%*

thereof rest of EMEA1,654 | +17% | +16%*

Americas1,762 | +19% | +25%*

thereof United States:1,309 | +20% | +29%*


453 | +14% | +14%*

Asia Pacific Japan787 | +23% | +21%*

thereof Japan262 | +26% | +21%*

thereof rest of APJ526 | +22% | +21%*

Total 4,931 | +17% | +19%*


Non-IFRS Operating Margin Expanded 130 Basis Points in the Second Quarter 2011 Despite Currency Headwind

30.8% | 31.0%*+1.3pp | +1.5pp*

29.5%


Strong top-line growth paired with continued focus on operational excellence resulted in further margin expansion.

In Q2 2011, non-IFRS operating margin increased 1.3 percentage points to 30.8% yoy, which exceeded expectations.

Currency affected operating margin negatively by 0.2 pp.

Total Revenue€2.9bn

Total Operating Expenses€2.0bn



Q2/10 Q2/11


Non-IFRS Operating Margin Expanded 110 Basis Points in the First Half 2011

28.3% | 28.4%*+1.1pp | +1.2pp*

27.2%


Strong top-line growth paired with continued focus on operational excellence resulted in further margin expansion.

In H1 2011, non-IFRS operating margin increased 1.1 percentage points to 28.3% yoy.

Currency affected operating margin negatively by 0.1 pp.





H1/10 H1/11


Gross Margin Increased by 70 Basis Points

Gross Margin70.6% | +0.7pp

SSRS Margin 83.5% | +0.1pp

Professional Services* Margin

24.1% | +1.9pp

Q2/10 Q2/11

€0.4bn€0.4bn€0.5bn

€0.5bn

Q2/10 Q2/11Q2/10 Q2/11

€0.6bn€0.7bn

SSRS + Services*Expenses€0.9bn

SSRSRevenue€2.3bn

Services* Revenue

Services*Revenue

SSRS Expenses

SSRS Expenses

Services* Expenses

Services* Expenses




SSRSRevenue€2.6bn

* Professional services and other services

Non-IFRS, Second Quarter 2011


Gross Margin Expansion Supported by All Line Items

Gross Margin69.2% | +0.3pp

SSRS Margin 82.9% | +0.3pp

Professional Services* Margin

21.7% | +0.6pp

H1/10 H1/11

€0.8bn€0.7bn€0.9bn

€1.1bn

H1/10 H1/11H1/10 H1/11

€1.2bn€1.4bn


SSRSRevenue€4.2bn

Services* Revenue

Services*Revenue

SSRS Expenses

SSRS Expenses

Services* Expenses

Services* Expenses




SSRSRevenue€4.9bn

* Professional services and other services

Non-IFRS, First Half 2011


Cost Ratios

R&D as a % of Total Revenue

S&M as a % of Total Revenue

G&A as a % of Total Revenue

13.6%+0.2pp

13.4% 21.3%-0.8pp

22.1% 5.0%+/-0.0pp

5.0%

R&DExpenses€0.4bn

Total Revenue€3.3bnTotal

Revenue€2.9bn

R&DExpenses€0.5bn





S&MExpenses€0.6bn

S&MExpenses€0.7bn G&A

Expenses€0.1bn

G&AExpenses€0.2bn

Q2/10 Q2/11 Q2/10 Q2/11Q2/10 Q2/11

Non-IFRS, Second Quarter 2011


Cost Ratios

R&D as a % of Total Revenue

S&M as a % of Total Revenue

G&A as a % of Total Revenue

14.6%+0.2pp

14.4% 21.2%-0.7pp

21.9% 5.2%-0.2pp

5.4%

R&DExpenses€0.8bn

Total Revenue€6.3bnTotal

Revenue€5.4bn

R&DExpenses€0.9bn





S&MExpenses€1.2bn

S&MExpenses€1.3bn G&A

Expenses€0.3bn

G&AExpenses€0.3bn

H1/10 H1/11 H1/10 H1/11H1/10 H1/11

Non-IFRS, First Half 2011


Agenda

Income Statement


Outlook

Appendix


Balance Sheet June 30, 2011, IFRS

Assets€ millions

06/30/11 12/31/10

Cash, cash equivalents and other financial assets 4,563 3,676

Trade and other receivables 2,738 3,099

Other non-financial assets and tax assets 379 368

Total current assets 7,680 7,143

Goodwill 8,213 8,428

Intangible assets 2,107 2,376

Property, plant, and equipment 1,463 1,449

Other non-current assets 1,433 1,443

Total non-current assets 13,216 13,696

Total assets 20,896 20,839

Equity and liabilities€ millions 06/30/11 12/31/10

Financial liabilities 136 142

Deferred income 2,161 911

Provisions 1,287 1,287

Other liabilities 2,004 2,813

Current liabilities 5,588 5,153

Financial liabilities 3,945 4,449

Provisions 244 292

Other non-current liabilities 1,122 1,121

Non current liabilities 5,311 5,862

Total liabilities 10,899 11,015

Total equity 9,997 9,824

Equity and liabilities 20,896 20,839


Highest Operating Cash Flow for a First Half Year in SAP’s History

1) Defined as cash and cash equivalents + short-term investments less bank loans, private placements and bonds2) Defined as cash and cash equivalents + short-term investments

1) cash and cash equivalents + current investments – (bank loans, private placement transactions, and bonds)

€ millions, unless otherwise stated 06/30/11 06/30/10

Operating cash flow 2,270 1,282 77%

- Capital expenditure -248 -125 98%

Free cash flow 2,022 1,157 75%

Free cash flow as a percentage of total revenue 32% 21% 11pp

Cash conversion rate 2.29 1.46 57%

Days sales outstanding (DSO) 63 73 -10days


Other

+44

Net Group Liquidity Increased by €1.4bn Driven by Strong Revenues and Good Working Capital Management

* Defined as cash and cash equivalents + restricted cash + short-term investments

€ millions

1) Cash and cash equivalents + current investments2) Total Group Liquidity minus bank loans, private placement transactions, and bonds

Operating cash flow

Capitalexpenditure

Net repayments

of borrowings-248

Total GroupLiquidity1)

12/31/10

3,528

+2,270 -486

Total Group

Liquidity1)

06/30/11

4,395 -3,864

Financial Debt

Total NetLiquidity2)

06/30/11531

-850

Dividend

-713

Total NetLiquidity2)

12/31/10


Successful Second US Private PlacementWell-balanced financial debt maturity profile

* Defined as cash and cash equivalents + restricted cash + short-term investments

On June 1, 2011, we successfully completed a private placement with a volume of US$750 millionThis enhances Group's financial flexibility by broadening its investor base and extending its maturity profileProceeds of issue were used to repay existing Group financial debt incurred to finance Sybase acquisitionA group of 16 institutional investors participated in the two tranches• US$600 million tranche with a five-year term• US$150 million tranche with a seven-year term. • coupon was less than 3.5% on both tranches

1.023

600 774208

415

11%

638 104

3%

26%

16% 20%5%

17%

0

250

500

750

1,000

1,250

2012 2013 2014 2015 2016 2017 2018

EUR million (in % of total financial debt)

100 3%

% Variable interest rate% Fixed interest rate


Agenda

Income Statement


Outlook

Appendix


+0.5pp to +1.0pp

SSRS Revenue(Non-IFRS at cc)

SAP Refines Outlook for Non-IFRS SSRS Revenue at CC and Non-IFRS Operating Profit at CC

+ 10% to 14%

Operating Margin (Non-IFRS at cc)

SAP’s Outlook FY 2011

* Impacted by 4.7pp due to increased provisions for TomorrowNow Litigation

32.0%

€ 9.87bn

Basis for comparison FY 2010

27.0% to 28.0%Effective Tax Rate(IFRS)

22.5%*

€4.45bn to €4.65bnOperating Profit(Non-IFRS at cc)

€ 4.01bn

27.5% to 28.5%Effective Tax Rate(Non-IFRS)

27.3%

Company now expectsto reach the high end of the range.

Company now expectsto reach the high endof the range.


Agenda

Income Statement


Outlook

Appendix


Non-IFRS Definition

IFRS Profit Measure

Discontinued activities

Deferred maintenance write-down

Acquisition related charges

Previous Non-IFRS profit measure

Share-based compensation expenses

Restructuring charges

New Non-IFRS profit measure

+

=

+/-

+

+

+

=

€983m

€74m

€300m

€58m

€3m

Estimated amounts for 2011

Actual Amountsfrom 2010

< €20m

€20m to €30m

€430m to €460m

€140m to €160m

< €10m

€12m

€25m

€222m

€84m

€1m

Actual AmountsH1 2011


Explanations of Non-IFRS Measures

Adjustments in the revenue line items are for support revenue that entities acquired by SAP would have recognized had they remained stand-alone entities but that SAP is not permitted to recognize as revenue under IFRS as a result of business combination accounting rules. Adjustments in the operating expense line items are for acquisition-related charges, share-based compensation expenses, restructuring expenses and discontinued activities.

Constant currency revenue figures are calculated by translating revenue of the current period using the average exchange rates from the previous year's respective period instead of the current period. 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.

For a more detailed description of these adjustments and their limitations as well as our constant currency and free cash flow figures see Explanations of Non-IFRS Measures online (www.sap.com/corporate-en/investors/reports and web message non-IFRS an web message currency effects).


Explanations of Currency Impact

1) Defined as cash and cash equivalents + short-term investments less bank loans, private placements and bonds2) Defined as cash and cash equivalents + short-term investments

* These exchange rates are rates SAP used in its financial statements** Currency impacts on past performance are not a prediction of future performance resulting from currency impacts.For a more detailed description of these adjustments and their limitations as well as our constant currency and free cash flow figures see

‘Explanation of non-IFRS Measures’ which is available at http://www.sap.com/investor

Currency 2010 Q2*

USD per € 1.27

GBP per € 0.85

JPY per € 117.38

CHF per € 1.41

CAD per € 1.31

AUD per € 1.44

SAP’s guidance formatSAP provides a yearly outlook, which is based on non-IFRS at constant currencies

because these numbers are used as a basis for SAP’s internal management reportingsince we cannot influence currency movements, and it helps prevent frequent changes in guidance due to fluctuations in currency

The elimination of currency effects is achieved by translating foreign currencies using the average exchange rates from the previous year’s period (i.e. quarter) instead of the current yearCurrency impact on past performanceHistorically, every 1% impact on total revenue resulting from foreign currency movements has resulted in a 10-15 basis point movement in margin.

Overview on the major currencies for Q2 2010

Technology

Second Quarter 2011 Preliminary Results Release