Amounts of a customer contract’s transaction price that are allocated to the remaining performance obligations represent contracted revenue that has not yet been recognized. They include amounts recognized as contract liabilities and amounts that are contracted but not yet due.
The transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied as at December 31, 2021,2022, was €39.9€48.9 billion (December 31, 2020: €33.42021: €39.9 billion). ThisThe transaction price thereof allocated to cloud performance obligations that were unsatisfied or partially unsatisfied as at December 31, 2022, was €34.2 billion (December 31, 2021: €25.3 billion). The remaining amount mostly comprises obligations to provide software support orservices. The vast majority of software support contracts are contracts in the renewal phase that typically have a one-year contract term, while cloud subscriptions services, as the respectivesubscription contracts typically have durations of one or multiple years.are multiple-year contracts. The portion of remaining performance obligations related to services consists of non-cancelable revenue from contracts for projects with a predefined output.
(A.4) | | | | € billions
|
| 2021
| 1/1/20211
| | 4.0
| Increases resulting from billing and invoices becoming due
| | 8.8
| Decreases resulting from satisfaction of performance obligations
| | -9.0
| Other2
| | 0.6
| 12/31/2021
| | 4.4
| Customer-Related Provisions | (B.3) | | Share-Based Payments | (B.4) | | Pension Plans and Similar Obligations | (B.5) | | Other Employee-Related Obligations | (B.6) | | Restructuring | (C.1) | | Results of Segments | (C.5) | | Income Taxes | (D.1) | | Business Combinations and Divestitures | (D.2) | | Goodwill | (D.3) | | Intangible Assets | (D.4) | | Property, Plant, and Equipment | (D.5) | | Leases | (D.6) | | Equity Investments | (E.2) | | Total Equity | (E.3) | | Liquidity | (F.1) | | Financial Risk Factors and Risk Management | (F.2) | | Fair Value Disclosures on Financial Instruments | (G.3) | | Other Litigation, Claims, and Legal Contingencies | (G.5) | | Executive and Supervisory Board Compensation |
| 1y General Accounting Policies
| Bases of Measurement | The prior year number was reduced by €0.2 billionConsolidated Financial Statements have been prepared on the historical cost basis except for the following: | - Derivative financial instruments, liabilities for cash-settled share-based payments, and financial assets with cash flows that are not solely payments of principal or interest are measured at fair value. | - Post-employment benefits are measured at the present value of the defined benefit obligations less the fair value of the plan assets. | - Monetary assets and liabilities denominated in foreign currencies are translated at period-end exchange rates. | - The financial statements of our subsidiaries to conform to the presentation requirement regarding payments received in advance for cancelable contracts. The corresponding balance is presented in the line “Trade and other payables.”which hyperinflation accounting applies are restated. 2 Other includes, for example, the impact of foreign currency translation and business acquisition.
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Foreign Currencies Income and expenses and operating cash flows of our foreign subsidiaries that use a functional currency other than the Euro are translated at average rates of foreign exchange (FX) computed on a monthly basis. Exchange differences resulting from foreign currency transactions are recognized in other non-operating income/expense, net. The exchange rates of key currencies affecting the Company were as follows: Exchange Rates | | | | | | | | | | | | | Equivalent to €1 | | | | Middle Rate | | Annual Average Exchange Rate | | | | | as at 12/31 | | | | | | | 2022 | | 2021 | | 2022 | | 2021 | | 2020 | Australian dollar | | AUD | | 1.5693 | | 1.5615 | | 1.5174 | | 1.5747 | | 1.6554 | Canadian dollar | | CAD | | 1.4440 | | 1.4393 | | 1.3703 | | 1.4835 | | 1.5294 | Swiss franc | | CHF | | 0.9847 | | 1.0331 | | 1.0052 | | 1.0814 | | 1.0703 | Pound sterling | | GBP | | 0.8869 | | 0.8403 | | 0.8526 | | 0.8600 | | 0.8892 | Japanese yen | | JPY | | 140.66 | | 130.38 | | 138.01 | | 129.86 | | 121.78 | U.S. dollar | | USD | | 1.0666 | | 1.1326 | | 1.0539 | | 1.1835 | | 1.1413 |
Cost Classification Cost of Cloud and Software Cost of cloud and software includes the costs incurred in providing the services and producing the goods that generate cloud and software revenue. Consequently, this line item primarily includes employee expenses relating to these services, amortization of acquired intangibles, fees for third-party licenses, depreciation of our property, plant, and equipment (for example, of our data centers in which we host our cloud solutions), and costs for third-party hosting services. For more information about the capitalization of costs from contracts with customers, see Note (A.3). Cost of Services Cost of services includes the costs incurred in providing the services that generate service revenue. Consequently, this line item primarily includes employee expenses and related training, system and system administration costs, and costs for third-party resources. Research and Development Research and development includes the costs incurred by activities related to the development of cloud and software solutions including resource and hardware costs for the development systems. For more information about the recognition of internally generated intangible assets from development, see Note (D.3). Sales and Marketing Sales and marketing includes the costs incurred for the selling activities (such as sales commissions and amortization of capitalized sales commissions) and marketing activities related to our software and cloud solutions and our service portfolio. For more information about the capitalization of costs from contracts with customers, see Note (A.3). General and Administration General and administration includes the costs related to finance and administrative functions, human resources, and general management as long as they are not directly attributable to one of the other operating expense line items. yManagement Judgments and Sources of Estimation Uncertainty The preparation of the Consolidated Financial Statements requires our management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues, and expenses, as well as disclosure of contingent liabilities. We base our judgments, estimates, and assumptions on historical and forecast information, and on regional and industry economic conditions in which we or our customers operate. Changes to these conditions could adversely affect our estimates. Although we believe we have made reasonable estimates about the ultimate resolution of the underlying uncertainties, no assurance can be given that the final outcome of these matters will be consistent with what is reflected in our recognized assets, liabilities, revenues, and expenses and disclosed contingent liabilities. Actual results could differ significantly from original estimates. The accounting policies that most frequently or significantly require us to make judgments, estimates, and assumptions, and therefore are critical to understanding our results of operations, include the following: Note |
| y Significant Accounting Policies | (A.1) | | Revenue recognition | (A.2) | | Valuation of trade receivables | (A.4), (G.3) | | Accounting for legal contingencies | (B.3) | | Accounting for share-based payments | (C.5) | | Accounting for income taxes | (D.1) | | Accounting for business combinations | (D.2) | | Accounting for goodwill | (D.3) | | Accounting for intangible assets (including recognition of internally generated intangible assets from development) | (D.6) | | Accounting for equity investments |
| Our management periodically discusses these significant accounting policies with the Audit and Compliance Committee of our Supervisory Board. |
| yNew Accounting Standards Not Yet Adopted | | The IASB has issued various amendments to IFRS standards (such as IAS 1 (Presentation of Financial Statements)) that are relevant for SAP but not yet effective. We are currently assessing the impact on SAP, but do not expect material effects on our financial position or results of operations. |
(IN.2)Impact of the War in Ukraine y Management Judgments and Estimates Due to the Impact of the War in Ukraine Management judgments and estimates can affect the amounts and reporting of assets and liabilities as at the reporting date, and the amounts of income and expense reported for the period. Due to the global consequences of the ongoing war in Ukraine, these management judgments and estimates continue to be subject to uncertainty. Actual amounts may differ from the management judgments and estimates; changes could have a material impact on the Consolidated Financial Statements. All available information on the expected economic developments was included when updating the management judgments and estimates. This information was also included in the analysis of the recoverability and collectability of assets and receivables. We will continue to analyze possible future effects of the war in Ukraine on the measurement of individual assets and liabilities. In 2022, SAP's business was impacted by the war in Ukraine and SAP's decision to wind down its business operations in Russia and Belarus. We evaluated the resulting impact on the Consolidated Financial Statements. In the course of our analysis, which was based on quantitative and qualitative aspects, we considered, for example, the impact on individual bad debt provisions on our trade receivables and restructuring expenses including severance payments to employees, and impairments of our current and non-current assets (sales commissions and property, plant, and equipment). Furthermore, we assessed the impact on goodwill and the need to record further liabilities resulting from the wind-down. For more information about the impacts of the war in Ukraine and SAP's exit from Russia and Belarus, see Note (A.1) concerning our revenues, Note (A.2)concerning trade and other receivables, Note (B.6) concerning restructuring, Note (D.2) concerning goodwill, and Note (D.4) concerning property, plant, and equipment. Other future impacts due to this rapidly evolving situation are currently unknown and could potentially subject our business to materially adverse consequences should the situation escalate beyond its current scope. Section A — Customers This section discusses disclosures related to contracts with our customers. These include but are not limited to explanations of how we recognize revenue, revenue disaggregation, and information about our trade receivables and customer-related obligations. (A.1) Revenue y Accounting for Revenue from Contracts with Customers | | Classes of Revenue | | We derive our revenue from fees charged to our customers for the use of our cloud offerings, for licenses to our on-premise software products, and for standardized and premium support services, consulting, customer-specific software developments, training, and other services. | | Cloud and software revenue, as presented in our Consolidated Income Statements, is the sum of our cloud revenue, our software license revenue, and our software support revenue. | | Cloud revenue represents fees earned from providing customers with any of the following: | | Software as a service (SaaS), that is, a right to use software functionality (including standard functionalities and custom cloud applications and extensions) in a cloud-based infrastructure hosted by SAP or third parties engaged by SAP, where the customer does not have the right to terminate the hosting contract and take possession of the software to either run it on its own IT infrastructure or to engage a third-party provider unrelated to SAP to host and manage the software; SaaS also includes transaction and agent fees for transactions that customers of our network business execute on our cloud-based transaction platforms. Platform as a service (PaaS), that is, access to a cloud-based platform to develop, deploy, integrate, and manage applications. Infrastructure as a service (IaaS), that is, hosting and related application management services for software hosted by SAP or third parties engaged by SAP. Premium cloud support, that is, support beyond the regular support embedded in the underlying cloud subscription services. | Software license revenue represents fees earned from the sale or license of software to customers for use on the premises owned or fully controlled by the customer, in other words, where the customer has the right to take possession of the software for installation on the customer’s premises or on hardware of third-party hosting providers unrelated to SAP (on-premise software). Software license revenue includes revenue from both the sale of our standard software products and customer-specific on-premise-software development agreements. | | Software support revenue represents fees earned from providing customers with standardized support services that comprise unspecified future software updates, upgrades, and enhancements as well as technical product support services for on-premise software products. | | Services revenue primarily represents fees earned from professional consulting services, premium support services, and training services. | | Identification of Contract | | We frequently enter into multiple contracts with the same customer. For accounting purposes,we treat these contracts as a single contract if they are entered into at or near the same time and are economically interrelated. We do not combine contracts with closing days more than three months apart because we do not consider them being entered into near the same time. Judgment is required in evaluating whether various contracts are interrelated, which includes considerations as to whether they were negotiated as a package with a single commercial objective, whether the amount of revenue recognizedconsideration on one contract is dependent on the performance of the other contract, or if some or all goods in the reporting period that was includedcontracts are a single performance obligation. | | New arrangements with existing customers can be either a new contract or the modification of prior contracts with the customer. Our judgment in making this determination considers whether there is a connection between the new arrangement and the pre-existing contracts, whether the goods and services under the new arrangement are highly interrelated with the goods and services sold under prior contracts, and how the goods and services under the new arrangement are priced. In determining whether a change in transaction price represents a contract modification or a change in variable consideration, we examine whether the change in price results from changing the contract liability balance at the beginning of the reporting period was €3.6 billion (December 31, 2020: €3.5 billion).or from applying unchanged existing contract provisions. |
F-18Identification of Performance Obligations
| | Our customer contracts often include various products and services. Typically, the products and services outlined in the Classes of Revenue section qualify as separate performance obligations and the portion of the contractual fee allocated to them is recognized separately. Judgment is required, however, in determining whether a good or service is considered a separate performance obligation. In particular for our professional services and implementation activities, judgment is required to evaluate whether such services significantly integrate, customize, or modify the on-premise software or cloud service to which they relate. In this context, we consider the nature of the services and their volume relative to the volume of the on-premise software or cloud service to which they relate. In general, the implementation services for our cloud services go beyond pure setup activities and qualify as separate performance obligations. Similarly, our on-premise implementation services and our custom development services typically qualify as separate performance obligations. Non-distinct goods and services are combined into one distinct bundle of goods and services (combined performance obligation). | | When selling goods or services, we frequently grant customers options to acquire additional goods or services (for example, renewals of cloud or support arrangements, or additional volumes of purchased cloud solutions or software). We apply judgment in determining whether such options provide a material right to the customer that the customer would not receive without entering into that contract. In this judgment, we consider, for example, whether the options entitle the customer to a discount that exceeds the discount granted for the respective goods or services sold together with the option. | | Determination of Transaction Price | | We apply judgment in determining the amount to which we expect to be entitled in exchange for transferring promised goods or services to a customer. Generally, variable consideration is estimated based on the most likely amount and is included in the transaction price to the extent that the constraint does not apply. This includes estimates as to whether and to what extent subsequent concessions may be granted to customers and whether the customer is expected to pay the contractual fees. In this judgment, we consider our history with the respective customer or on a portfolio basis. | | The recognition constraint is applied to on-premise software transactions that include usage-based or sales-based contingent fees. In contrast, our typical cloud services do not provide the customer with a software license because the customer does not have the right to terminate the hosting contract and take possession of the software. Consequently, variable cloud fees are considered in the transaction price based on estimates, rather than being accounted for as usage-based or sales-based license royalties. | | Only very rarely do our contracts include significant financing components. We do not account for financing components if the period between when SAP transfers the promised goods or services to the customer and when the customer pays for those goods or services is one year or less. | | Allocation of Transaction Price | | We have established a hierarchy to identify the standalone selling prices (SSPs) that we use to allocate the transaction price of a customer contract to the performance obligations in the contract. | | - Where standalone selling prices for an offering are observable and reasonably consistent across customers (that is, not highly variable), our SSP estimates are derived from our respective pricing history. Typically, our standardized support offerings and our professional service offerings follow this approach. - Where sales prices for an offering are not directly observable or highly variable across customers, we use estimation techniques. For renewable offerings with highly variable pricing across customers, these techniques consider the individual contract’s expected renewal price as far as this price is substantive. Typically, our cloud offerings follow this approach. For non-renewable offerings, these estimations follow a cost-plus-margin approach. - For offerings that lack renewals, have highly variable pricing, and lack substantial direct costs to estimate based on a cost-plus-margin approach, we allocate the transaction price by applying a residual approach. We use this technique in particular for our standard on-premise software offerings. | | Judgment is required when estimating SSPs. To judge whether the historical pricing of our goods and services is highly variable, we have established thresholds of pricing variability. For judging whether contractual renewal prices are substantive, we have established floor prices which include a minimum margin that we use as SSPs whenever the contractual renewal prices are below these floor prices. In judging whether contracts are expected to renew at their contractual renewal prices, we rely on our respective renewal history. The SSPs of material right options depend on the probability of option exercise. In estimating these probabilities, we apply judgment considering historical exercise patterns. | | We review the SSPs periodically or whenever facts and circumstances change to ensure the most objective input parameters available are used. |
Recognition of Revenue | | Cloud revenue is recognized over time as the services are performed. For cloud business models where we grant rights to continuously access and use one or more cloud offerings for a certain term, revenue is recognized based on time elapsed and thus ratably over this term. For cloud business models provisioned on a consumption basis where a customer commits to a fixed value of spend on cloud services throughout the contract term, but with the discretion to call off cloud services during the contract term, we recognize revenue based on consumption as it best reflects our measure towards satisfaction of that performance obligation. In limited scenarios where the transaction price is entirely variable and determined by the customer’s consumption, we recognize revenue based on usage in the period in which it was earned. | | Software license revenue is recognized at a point in time or over time depending on whether we deliver standard software, customer-specific software, or software subscription contracts that combine the delivery of software and the obligation to deliver, in the future, unspecified software products: | - Licenses for our standard on-premise software products are typically delivered by providing the customer with access to download the software. We recognize revenue for these on-premise licenses at the point in time when we grant the license rights to the customer and the customer has access to and thus control over the software. In judging whether our on-premise software offerings grant customers a right to use, rather than a right to access, our intellectual property, we have considered the usefulness of our software without subsequent updates to it. - Typically, our customer-specific on-premise software development agreements: ◾ Represent software developed for specific needs of individual customers and therefore do not have any use for us ◾ Provide us with an enforceable right to payment for performance completed to date | | For such development agreements, we recognize revenue over time as the software development progresses. Judgment is required in identifying an appropriate method to measure the progress toward complete satisfaction of such performance obligations. We typically measure progress of our development agreements based on the direct costs incurred to date in developing the software as a percentage of the total reasonably estimated direct costs to fully complete the development work (percentage-of-completion method). This method of measuring progress faithfully depicts the transfer of the development services to the customer, as substantially all of these costs are cost of the staff or third parties performing the development work. In estimating the total cost to fully complete the development work, we consider our history with similar projects. | | - For agreements that combine the delivery of software and the obligation to deliver, in the future, unspecific software products, we recognize revenue at a point in time for licenses that are made immediately accessible to the customer. We recognize revenue ratably over the term of the software subscription contract for the unspecified software products, as our performance obligation is to stand ready to deliver such products on a when-and-if-available basis. | | Software support revenue is typically recognized based on time elapsed and thus ratably over the term of the support arrangement. Under our standardized support services, our performance obligation is to stand ready to provide technical product support and unspecified updates, upgrades, and enhancements on a when-and-if-available basis. Our customers simultaneously receive and consume the benefits of these support services as we perform. | | Service revenue is typically recognized over time. Where we stand ready to provide the service (such as access to learning content), we recognize revenue based on time elapsed and thus ratably over the service period. Consumption-based services (such as separately identifiable consulting services and premium support services and classroom training services) are recognized over time as the services are utilized, typically following the percentage-of-completion method or ratably. When using the percentage-of-completion method, we typically measure the progress toward complete satisfaction of the performance obligation in the same way and with the same reasoning and judgment as we do for customer-specific on-premise software development agreements. We apply judgment in determining whether a service qualifies as a stand-ready service or as a consumption-based service. | | Revenue for combined performance obligations is recognized over the longest period of all promises in the combined performance obligation. | | Judgment is also required to determine whether revenue is to be recognized at a point in time or over time. For performance obligations satisfied over time, we need to measure progress using the method that best reflects SAP’s performance. When using cost incurred as a measure of progress for recognizing revenue over time, we apply judgment in estimating the total cost to satisfy the performance obligation. | | All of the judgments and estimates mentioned above can significantly impact the timing and amount of revenue to be recognized. | |
(A.2) Trade and Other Receivables
y Accounting for Trade and Other Receivables
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| We measure trade receivables and contract assets from contracts with customers at amortized cost less expected credit losses. We account for expected credit losses by recording an allowance on a portfolio basis. We apply the simplified impairment approach. On initial measurement of the receivables, we consider all credit losses that are expected to occur during the lifetime of the receivables. We use a provision matrix to estimate these losses.
Additionally, we recognize allowances for individual receivables if there is objective evidence of credit impairment.
Account balances are written off either partially or in full if we judge that the likelihood of recovery is remote.
For information about how the default risk for trade receivables is analyzed and managed, how the loss rates for the provision matrix are determined, how credit impairment is determined and what our criteria for write-offs are, see the section on credit risk in Note (F.1).
In our Consolidated Income Statements, net gains/losses from expected credit loss allowances are included in Other operating income/expense, net. Gains/losses from foreign currency exchange rate fluctuations are included in Other non-operating income/expense, net.
Determining our expected credit loss allowance involves significant judgment. In this judgment, we primarily consider our historical experience with credit losses in the respective provision matrix risk class and current data on overdue receivables. We expect that our historical default rates represent a reasonable approximation for future expected customer defaults. Besides historical data, our judgment used in developing the provision matrix considers reasonable and supportable forward-looking information (for example, changes in country risk ratings, and fluctuations in credit default swaps of the countries in which our customers are located).
The assessment of whether a receivable is collectible involves the use of judgment and requires us to make assumptions about customer defaults that could change significantly.
By applying this judgment, we record an allowance for a specific customer when it is probable that a credit loss has occurred and the amount of the loss is reasonably estimable. Basing the expected credit loss allowance for the remaining receivables primarily on our historical loss experience likewise requires judgment, as history may not be indicative of future development. Also, including reasonable and supportable forward-looking information in the loss rates of the expected credit loss allowance requires judgment, as they may not provide a reliable prediction for future development.
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Trade and Other Receivables
| | | | | | | | | | | | | € millions | | 2021 | | 2020 | | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | Trade receivables, net | | 5,887 | | 1 | | 5,888 | | 6,199 | | 33 | | 6,232 | Other receivables | | 465 | | 146 | | 611 | | 395 | | 103 | | 498 | / Total | | 6,352 | | 147 | | 6,499 | | 6,593 | | 137 | | 6,730 |
Contract assets as at December 31, 2021, were €360 million (December 31, 2020: €295 million).
For more information about financial risk, how we manage credit risk, and details of our trade receivables and contract assets allowances, see Note (F.1).
(A.3) Capitalized Cost from Contracts with CustomersContract Balances
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| We recognize trade receivables for performance obligations satisfied over time gradually as the performance obligation is satisfied and in full once the invoice is due. Judgment is required in determining whether a right to consideration is unconditional and thus qualifies as a receivable. | y Costs of Obtaining Customer Contracts
Capitalized costs from customer contracts are classified as Other non-financial assets in our statement of financial position.
The capitalized assets for the incremental costs of obtaining a customer contract primarily consist of sales commissions earned by our sales force and partners. Judgment is required in determining the amounts to be capitalized, particularly where the commissions are based on cumulative targets and where commissions relate to multiple performance obligations in one customer contract. We capitalize such cumulative target commissions for all customer contracts that count towards the cumulative target but only if nothing other than obtaining customer contracts can contribute to achieving the cumulative target. Commissions for contracts with multiple performance obligations or for probable renewals thereof are allocated to these performance obligations and probable renewals relative to the respective standalone selling price.
Our sales commission payments for customer contract renewals are typically not commensurate with the commissions paid for new contracts. Thus, the commissions paid for renewable new contracts also relate to expected renewals of these contracts. Consequently, we amortize sales commissions paid for new customer contracts on a straight-line basis over the expected contract life including probable contract renewals. Judgment is required in estimating these contract lives. In exercising this judgment, we consider our expectation about future contract renewals which we evaluate periodically to confirm that the resulting amortization period properly reflects the expected contract life. Commensurate payments are amortized over the contract term to which they relate. The amortization periods range from 18 months to eight years depending on the type of offering. Amortization of the capitalized costs of obtaining customer contracts is classified mainly as sales and marketing expense.
We expense incremental costs of obtaining a customer contract as incurred if we expect an amortization period of one year or less.
y Costs to Fulfill Customer Contracts
Capitalized costs incurred to fulfill customer contracts mainly consist of direct costs for set-up and implementation of cloud products and custom cloud development contracts as far as these costs are not in scope of other accounting standards than IFRS 15. These costs are amortized after completion of the setup and implementation or the development, respectively, on a straight-line basis over the expected life of the cloud subscription contract including expected renewals. For the life of the contract, we consider our expectation about future contract renewals which we evaluate periodically to confirm that the resulting amortization period properly reflects the expected contract life. The amortization periods range from six to eight years depending on the type of offering. In addition, the capitalized costs include third-party license fees which are amortized over the term of the third-party license contract. Judgment is required in evaluating whether costs are directly related to customer contracts and in estimating contract lives.
Amortization of capitalized costs to fulfill contracts for custom cloud applications and extensions is included in the cost of cloud.
| Contract liabilities primarily reflect invoices due or payments received in advance of revenue recognition. | | Typically, we invoice fees for on-premise standard software on contract closure and software delivery. Periodic fixed fees for cloud subscription services, software support services, and other multi-period agreements are typically invoiced yearly or quarterly in advance. Such fee prepayments account for the majority of our contract liability balance. Fees based on actual transaction volumes for cloud subscriptions and fees charged for non-periodical services are invoiced as the services are delivered. While payment terms and conditions vary by contract type and region, our terms typically require payment within 30 to 60 days. |
Geographic Information The amounts for revenue by region in the following tables are based on the location of customers. The regions in the following table are EMEA (Europe, Middle East, and Africa), Americas (North America and Latin America), and APJ (Asia Pacific Japan). Total Revenue by Region | | | | | | | € millions | | 2022 | | 2021 | | 2020 | Germany | | 4,504 | | 4,343 | | 4,015 | Rest of EMEA | | 8,577 | | 8,246 | | 8,052 | EMEA | | 13,081 | | 12,589 | | 12,067 | United States | | 10,811 | | 8,870 | | 9,110 | Rest of Americas | | 2,484 | | 2,099 | | 1,996 | Americas | | 13,295 | | 10,969 | | 11,106 | Japan | | 1,242 | | 1,301 | | 1,305 | Rest of APJ | | 3,253 | | 2,984 | | 2,859 | APJ | | 4,495 | | 4,285 | | 4,165 | SAP Group | | 30,871 | | 27,842 | | 27,338 |
Major Revenue Classes by Region | | | | | | | | | | | | | € millions | | Cloud Revenue | | Cloud and Software Revenue | | | | | | | | 2022 | | 2021 | | 2020 | | 2022 | | 2021 | | 2020 | EMEA | | 4,293 | | 3,308 | | 2,608 | | 11,236 | | 10,931 | | 10,364 | Americas | | 6,687 | | 4,894 | | 4,439 | | 11,333 | | 9,348 | | 9,239 | APJ | | 1,575 | | 1,217 | | 1,033 | | 3,952 | | 3,798 | | 3,625 | SAP Group | | 12,555 | | 9,418 | | 8,080 | | 26,521 | | 24,078 | | 23,228 |
For information about the breakdown of revenue by segment and segment revenue by region, see Note (C.1). In 2022, SAP’s business was impacted by the war in Ukraine and SAP’s decision to wind down its business operations in Russia and Belarus. Compared to the previous year, revenue was approximately €220 million lower. Remaining Performance Obligations Amounts of a customer contract’s transaction price that are allocated to the remaining performance obligations represent contracted revenue that has not yet been recognized. They include amounts recognized as contract liabilities and amounts that are contracted but not yet due. The transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied as at December 31, 2022, was €48.9 billion (December 31, 2021: €39.9 billion). The transaction price thereof allocated to cloud performance obligations that were unsatisfied or partially unsatisfied as at December 31, 2022, was €34.2 billion (December 31, 2021: €25.3 billion). The remaining amount mostly comprises obligations to provide software support services. The vast majority of software support contracts are contracts in the renewal phase that typically have a one-year contract term, while cloud subscription contracts typically are multiple-year contracts. The portion of remaining performance obligations related to services consists of non-cancelable revenue from contracts for projects with a predefined output. Overall, about half of the remaining performance obligations is expected to be recognized over the next 12 months following the respective balance sheet date. This estimate is based on our best judgment, as it, for example, needs to consider estimates of possible future contract modifications or customers’ deployment of the solutions. The amount of transaction price allocated to the remaining performance obligations, and changes in this amount over time, are impacted by, among others: - Currency fluctuations - The contract period of our cloud and software support contracts remaining at the balance sheet date and thus by the timing of contract renewals Contract Balances The following table presents the activities impacting contract liabilities balances during the year ended December 31, 2022: Capitalized Cost from Contracts with Customers | (A.4) | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | Capitalized cost of obtaining customer contracts | | 667 | | 2,158 | | 2,826 | | 491 | | 1,536 | | 2,028 | Capitalized cost to fulfill customer contracts | | 126 | | 175 | | 301 | | 91 | | 151 | | 242 | Capitalized contract cost | | 793 | | 2,333 | | 3,127 | | 583 | | 1,687 | | 2,270 | / Other non-financial assets | | 1,633 | | 2,628 | | 4,261 | | 1,321 | | 1,926 | | 3,247 | Capitalized contract cost as % of / Other non-financial assets | | 49 | | 89 | | 73 | | 44 | | 88 | | 70 |
| Customer-Related Provisions | (B.3) | | Share-Based Payments | (B.4) | | Pension Plans and Similar Obligations | (B.5) | | Other Employee-Related Obligations | (B.6) | | Restructuring | (C.1) | | Results of Segments | (C.5) | | Income Taxes | (D.1) | | Business Combinations and Divestitures | (D.2) | | Goodwill | (D.3) | | Intangible Assets | (D.4) | | Property, Plant, and Equipment | (D.5) | | Leases | (D.6) | | Equity Investments | (E.2) | | Total Equity | (E.3) | | Liquidity | (F.1) | | Financial Risk Factors and Risk Management | (F.2) | | Fair Value Disclosures on Financial Instruments | (G.3) | | Other Litigation, Claims, and Legal Contingencies | (G.5) | | Executive and Supervisory Board Compensation |
| y General Accounting Policies | Amortization ExpenseBases of Measurement
| The Consolidated Financial Statements have been prepared on the historical cost basis except for the following: | - Derivative financial instruments, liabilities for cash-settled share-based payments, and financial assets with cash flows that are not solely payments of principal or interest are measured at fair value. | - Post-employment benefits are measured at the present value of the defined benefit obligations less the fair value of the plan assets. | - Monetary assets and liabilities denominated in foreign currencies are translated at period-end exchange rates. | - The financial statements of our subsidiaries to which hyperinflation accounting applies are restated. |
Foreign Currencies Income and expenses and operating cash flows of our foreign subsidiaries that use a functional currency other than the Euro are translated at average rates of foreign exchange (FX) computed on a monthly basis. Exchange differences resulting from foreign currency transactions are recognized in other non-operating income/expense, net. The exchange rates of key currencies affecting the Company were as follows: Exchange Rates | | | | | | | | | | | | | Equivalent to €1 | | | | Middle Rate | | Annual Average Exchange Rate | | | | | as at 12/31 | | | | | | | 2022 | | 2021 | | 2022 | | 2021 | | 2020 | Australian dollar | | AUD | | 1.5693 | | 1.5615 | | 1.5174 | | 1.5747 | | 1.6554 | Canadian dollar | | CAD | | 1.4440 | | 1.4393 | | 1.3703 | | 1.4835 | | 1.5294 | Swiss franc | | CHF | | 0.9847 | | 1.0331 | | 1.0052 | | 1.0814 | | 1.0703 | Pound sterling | | GBP | | 0.8869 | | 0.8403 | | 0.8526 | | 0.8600 | | 0.8892 | Japanese yen | | JPY | | 140.66 | | 130.38 | | 138.01 | | 129.86 | | 121.78 | U.S. dollar | | USD | | 1.0666 | | 1.1326 | | 1.0539 | | 1.1835 | | 1.1413 |
Cost Classification Cost of Cloud and Software Cost of cloud and software includes the costs incurred in providing the services and producing the goods that generate cloud and software revenue. Consequently, this line item primarily includes employee expenses relating to these services, amortization of acquired intangibles, fees for third-party licenses, depreciation of our property, plant, and equipment (for example, of our data centers in which we host our cloud solutions), and costs for third-party hosting services. For more information about the capitalization of costs from contracts with customers, see Note (A.3). Cost of Services Cost of services includes the costs incurred in providing the services that generate service revenue. Consequently, this line item primarily includes employee expenses and related training, system and system administration costs, and costs for third-party resources. Research and Development Research and development includes the costs incurred by activities related to the development of cloud and software solutions including resource and hardware costs for the development systems. For more information about the recognition of internally generated intangible assets from development, see Note (D.3). Sales and Marketing Sales and marketing includes the costs incurred for the selling activities (such as sales commissions and amortization of capitalized sales commissions) and marketing activities related to our software and cloud solutions and our service portfolio. For more information about the capitalization of costs from contracts with customers, see Note (A.3). General and Administration General and administration includes the costs related to finance and administrative functions, human resources, and general management as long as they are not directly attributable to one of the other operating expense line items. yManagement Judgments and Sources of Estimation Uncertainty The preparation of the Consolidated Financial Statements requires our management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues, and expenses, as well as disclosure of contingent liabilities. We base our judgments, estimates, and assumptions on historical and forecast information, and on regional and industry economic conditions in which we or our customers operate. Changes to these conditions could adversely affect our estimates. Although we believe we have made reasonable estimates about the ultimate resolution of the underlying uncertainties, no assurance can be given that the final outcome of these matters will be consistent with what is reflected in our recognized assets, liabilities, revenues, and expenses and disclosed contingent liabilities. Actual results could differ significantly from original estimates. The accounting policies that most frequently or significantly require us to make judgments, estimates, and assumptions, and therefore are critical to understanding our results of operations, include the following: | | | | | € millions | | 2021 | | 2020 | Capitalized cost of obtaining customer contracts | | 523 | | 450 | Capitalized cost to fulfill customer contracts | | 171 | | 129 |
Note |
| y Significant Accounting Policies | (A.1) | | Revenue recognition | (A.2) | | Valuation of trade receivables | (A.4), (G.3) | | Accounting for legal contingencies | (B.3) | | Accounting for share-based payments | (C.5) | | Accounting for income taxes | (D.1) | | Accounting for business combinations | (D.2) | | Accounting for goodwill | (D.3) | | Accounting for intangible assets (including recognition of internally generated intangible assets from development) | (D.6) | | Accounting for equity investments |
| Our management periodically discusses these significant accounting policies with the Audit and Compliance Committee of our Supervisory Board. |
| yNew Accounting Standards Not Yet Adopted | | The IASB has issued various amendments to IFRS standards (such as IAS 1 (Presentation of Financial Statements)) that are relevant for SAP but not yet effective. We are currently assessing the impact on SAP, but do not expect material effects on our financial position or results of operations. |
(IN.2)Impact of the War in Ukraine y Management Judgments and Estimates Due to the Impact of the War in Ukraine Management judgments and estimates can affect the amounts and reporting of assets and liabilities as at the reporting date, and the amounts of income and expense reported for the period. Due to the global consequences of the ongoing war in Ukraine, these management judgments and estimates continue to be subject to uncertainty. Actual amounts may differ from the management judgments and estimates; changes could have a material impact on the Consolidated Financial Statements. All available information on the expected economic developments was included when updating the management judgments and estimates. This information was also included in the analysis of the recoverability and collectability of assets and receivables. We will continue to analyze possible future effects of the war in Ukraine on the measurement of individual assets and liabilities. In 2022, SAP's business was impacted by the war in Ukraine and SAP's decision to wind down its business operations in Russia and Belarus. We evaluated the resulting impact on the Consolidated Financial Statements. In the course of our analysis, which was based on quantitative and qualitative aspects, we considered, for example, the impact on individual bad debt provisions on our trade receivables and restructuring expenses including severance payments to employees, and impairments of our current and non-current assets (sales commissions and property, plant, and equipment). Furthermore, we assessed the impact on goodwill and the need to record further liabilities resulting from the wind-down. For more information about the impacts of the war in Ukraine and SAP's exit from Russia and Belarus, see Note (A.1) concerning our revenues, Note (A.2)concerning trade and other receivables, Note (B.6) concerning restructuring, Note (D.2) concerning goodwill, and Note (D.4) concerning property, plant, and equipment. Other future impacts due to this rapidly evolving situation are currently unknown and could potentially subject our business to materially adverse consequences should the situation escalate beyond its current scope. Section A — Customers This section discusses disclosures related to contracts with our customers. These include but are not limited to explanations of how we recognize revenue, revenue disaggregation, and information about our trade receivables and customer-related obligations. (A.1) Revenue y Accounting for Revenue from Contracts with Customers | | Classes of Revenue | | We derive our revenue from fees charged to our customers for the use of our cloud offerings, for licenses to our on-premise software products, and for standardized and premium support services, consulting, customer-specific software developments, training, and other services. | | Cloud and software revenue, as presented in our Consolidated Income Statements, is the sum of our cloud revenue, our software license revenue, and our software support revenue. | | Cloud revenue represents fees earned from providing customers with any of the following: | | Software as a service (SaaS), that is, a right to use software functionality (including standard functionalities and custom cloud applications and extensions) in a cloud-based infrastructure hosted by SAP or third parties engaged by SAP, where the customer does not have the right to terminate the hosting contract and take possession of the software to either run it on its own IT infrastructure or to engage a third-party provider unrelated to SAP to host and manage the software; SaaS also includes transaction and agent fees for transactions that customers of our network business execute on our cloud-based transaction platforms. Platform as a service (PaaS), that is, access to a cloud-based platform to develop, deploy, integrate, and manage applications. Infrastructure as a service (IaaS), that is, hosting and related application management services for software hosted by SAP or third parties engaged by SAP. Premium cloud support, that is, support beyond the regular support embedded in the underlying cloud subscription services. | Software license revenue represents fees earned from the sale or license of software to customers for use on the premises owned or fully controlled by the customer, in other words, where the customer has the right to take possession of the software for installation on the customer’s premises or on hardware of third-party hosting providers unrelated to SAP (on-premise software). Software license revenue includes revenue from both the sale of our standard software products and customer-specific on-premise-software development agreements. | | Software support revenue represents fees earned from providing customers with standardized support services that comprise unspecified future software updates, upgrades, and enhancements as well as technical product support services for on-premise software products. | | Services revenue primarily represents fees earned from professional consulting services, premium support services, and training services. | | Identification of Contract | | We frequently enter into multiple contracts with the same customer. For accounting purposes,we treat these contracts as a single contract if they are entered into at or near the same time and are economically interrelated. We do not combine contracts with closing days more than three months apart because we do not consider them being entered into near the same time. Judgment is required in evaluating whether various contracts are interrelated, which includes considerations as to whether they were negotiated as a package with a single commercial objective, whether the amount of consideration on one contract is dependent on the performance of the other contract, or if some or all goods in the contracts are a single performance obligation. | | New arrangements with existing customers can be either a new contract or the modification of prior contracts with the customer. Our judgment in making this determination considers whether there is a connection between the new arrangement and the pre-existing contracts, whether the goods and services under the new arrangement are highly interrelated with the goods and services sold under prior contracts, and how the goods and services under the new arrangement are priced. In determining whether a change in transaction price represents a contract modification or a change in variable consideration, we examine whether the change in price results from changing the contract or from applying unchanged existing contract provisions. |
F-20Identification of Performance Obligations
| | Our customer contracts often include various products and services. Typically, the products and services outlined in the Classes of Revenue section qualify as separate performance obligations and the portion of the contractual fee allocated to them is recognized separately. Judgment is required, however, in determining whether a good or service is considered a separate performance obligation. In particular for our professional services and implementation activities, judgment is required to evaluate whether such services significantly integrate, customize, or modify the on-premise software or cloud service to which they relate. In this context, we consider the nature of the services and their volume relative to the volume of the on-premise software or cloud service to which they relate. In general, the implementation services for our cloud services go beyond pure setup activities and qualify as separate performance obligations. Similarly, our on-premise implementation services and our custom development services typically qualify as separate performance obligations. Non-distinct goods and services are combined into one distinct bundle of goods and services (combined performance obligation). | | When selling goods or services, we frequently grant customers options to acquire additional goods or services (for example, renewals of cloud or support arrangements, or additional volumes of purchased cloud solutions or software). We apply judgment in determining whether such options provide a material right to the customer that the customer would not receive without entering into that contract. In this judgment, we consider, for example, whether the options entitle the customer to a discount that exceeds the discount granted for the respective goods or services sold together with the option. | | Determination of Transaction Price | | We apply judgment in determining the amount to which we expect to be entitled in exchange for transferring promised goods or services to a customer. Generally, variable consideration is estimated based on the most likely amount and is included in the transaction price to the extent that the constraint does not apply. This includes estimates as to whether and to what extent subsequent concessions may be granted to customers and whether the customer is expected to pay the contractual fees. In this judgment, we consider our history with the respective customer or on a portfolio basis. | | The recognition constraint is applied to on-premise software transactions that include usage-based or sales-based contingent fees. In contrast, our typical cloud services do not provide the customer with a software license because the customer does not have the right to terminate the hosting contract and take possession of the software. Consequently, variable cloud fees are considered in the transaction price based on estimates, rather than being accounted for as usage-based or sales-based license royalties. | | Only very rarely do our contracts include significant financing components. We do not account for financing components if the period between when SAP transfers the promised goods or services to the customer and when the customer pays for those goods or services is one year or less. | | Allocation of Transaction Price | | We have established a hierarchy to identify the standalone selling prices (SSPs) that we use to allocate the transaction price of a customer contract to the performance obligations in the contract. | | - Where standalone selling prices for an offering are observable and reasonably consistent across customers (that is, not highly variable), our SSP estimates are derived from our respective pricing history. Typically, our standardized support offerings and our professional service offerings follow this approach. - Where sales prices for an offering are not directly observable or highly variable across customers, we use estimation techniques. For renewable offerings with highly variable pricing across customers, these techniques consider the individual contract’s expected renewal price as far as this price is substantive. Typically, our cloud offerings follow this approach. For non-renewable offerings, these estimations follow a cost-plus-margin approach. - For offerings that lack renewals, have highly variable pricing, and lack substantial direct costs to estimate based on a cost-plus-margin approach, we allocate the transaction price by applying a residual approach. We use this technique in particular for our standard on-premise software offerings. | | Judgment is required when estimating SSPs. To judge whether the historical pricing of our goods and services is highly variable, we have established thresholds of pricing variability. For judging whether contractual renewal prices are substantive, we have established floor prices which include a minimum margin that we use as SSPs whenever the contractual renewal prices are below these floor prices. In judging whether contracts are expected to renew at their contractual renewal prices, we rely on our respective renewal history. The SSPs of material right options depend on the probability of option exercise. In estimating these probabilities, we apply judgment considering historical exercise patterns. | | We review the SSPs periodically or whenever facts and circumstances change to ensure the most objective input parameters available are used. |
Recognition of Revenue | | Cloud revenue is recognized over time as the services are performed. For cloud business models where we grant rights to continuously access and use one or more cloud offerings for a certain term, revenue is recognized based on time elapsed and thus ratably over this term. For cloud business models provisioned on a consumption basis where a customer commits to a fixed value of spend on cloud services throughout the contract term, but with the discretion to call off cloud services during the contract term, we recognize revenue based on consumption as it best reflects our measure towards satisfaction of that performance obligation. In limited scenarios where the transaction price is entirely variable and determined by the customer’s consumption, we recognize revenue based on usage in the period in which it was earned. | | Software license revenue is recognized at a point in time or over time depending on whether we deliver standard software, customer-specific software, or software subscription contracts that combine the delivery of software and the obligation to deliver, in the future, unspecified software products: | - Licenses for our standard on-premise software products are typically delivered by providing the customer with access to download the software. We recognize revenue for these on-premise licenses at the point in time when we grant the license rights to the customer and the customer has access to and thus control over the software. In judging whether our on-premise software offerings grant customers a right to use, rather than a right to access, our intellectual property, we have considered the usefulness of our software without subsequent updates to it. - Typically, our customer-specific on-premise software development agreements: ◾ Represent software developed for specific needs of individual customers and therefore do not have any use for us ◾ Provide us with an enforceable right to payment for performance completed to date | | For such development agreements, we recognize revenue over time as the software development progresses. Judgment is required in identifying an appropriate method to measure the progress toward complete satisfaction of such performance obligations. We typically measure progress of our development agreements based on the direct costs incurred to date in developing the software as a percentage of the total reasonably estimated direct costs to fully complete the development work (percentage-of-completion method). This method of measuring progress faithfully depicts the transfer of the development services to the customer, as substantially all of these costs are cost of the staff or third parties performing the development work. In estimating the total cost to fully complete the development work, we consider our history with similar projects. | | - For agreements that combine the delivery of software and the obligation to deliver, in the future, unspecific software products, we recognize revenue at a point in time for licenses that are made immediately accessible to the customer. We recognize revenue ratably over the term of the software subscription contract for the unspecified software products, as our performance obligation is to stand ready to deliver such products on a when-and-if-available basis. | | Software support revenue is typically recognized based on time elapsed and thus ratably over the term of the support arrangement. Under our standardized support services, our performance obligation is to stand ready to provide technical product support and unspecified updates, upgrades, and enhancements on a when-and-if-available basis. Our customers simultaneously receive and consume the benefits of these support services as we perform. | | Service revenue is typically recognized over time. Where we stand ready to provide the service (such as access to learning content), we recognize revenue based on time elapsed and thus ratably over the service period. Consumption-based services (such as separately identifiable consulting services and premium support services and classroom training services) are recognized over time as the services are utilized, typically following the percentage-of-completion method or ratably. When using the percentage-of-completion method, we typically measure the progress toward complete satisfaction of the performance obligation in the same way and with the same reasoning and judgment as we do for customer-specific on-premise software development agreements. We apply judgment in determining whether a service qualifies as a stand-ready service or as a consumption-based service. | | Revenue for combined performance obligations is recognized over the longest period of all promises in the combined performance obligation. | | Judgment is also required to determine whether revenue is to be recognized at a point in time or over time. For performance obligations satisfied over time, we need to measure progress using the method that best reflects SAP’s performance. When using cost incurred as a measure of progress for recognizing revenue over time, we apply judgment in estimating the total cost to satisfy the performance obligation. | | All of the judgments and estimates mentioned above can significantly impact the timing and amount of revenue to be recognized. | |
(A.4) Customer-Related Provisions
y Expected Contract Losses
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| Customer-related provisions mainly include expected contract losses. We adjust these provisions as further information becomes available and as circumstances change. Non-current provisions are measured at the present value of their expected settlement amounts as at the reporting date.
The unit of account for the identification of potential onerous customer contracts is based on the contract definition of IFRS 15 including the contract combination guidance. The economic benefits considered in the assessment comprise the future benefits we are directly entitled to under the contract as well as the anticipated future benefits that are the economic consequence of the contract if these benefits can be reliably determined.
y Customer-Related Litigation and Claims
Customer-related provisions also include obligations resulting from customer-related litigation and claims. We are currently confronted with various claims and legal proceedings, including claims that relate to customers demanding indemnification for proceedings initiated against them based on their use of SAP software, and occasionally claims that relate to customers being dissatisfied with the products and services that we have delivered to them. The obligations arising from customer-related litigation and claims comprise cases in which we indemnify our customers against liabilities arising from a claim that our products infringe a third party’s patent, copyright, trade secret, or other proprietary rights.
Due to uncertainties relating to these matters, provisions are based on the best information available. Significant judgment is required in the determination of whether and when a provision is to be recorded and what the appropriate amount for such provision should be. Notably, judgment is required in the following areas:
- Determining whether an obligation exists
- Determining the probability of outflow of economic benefits
- Determining whether the amount of an obligation is reliably estimable
- Estimating the amount of the expenditure required to settle the present obligation
At the end of each reporting period, we reassess the potential obligations related to our pending claims and litigation and adjust our respective provisions to reflect the current best estimate. In addition, we monitor and evaluate new information that we receive after the end of the respective reporting period, but before the Consolidated Financial Statements are authorized for issue, to determine whether this provides additional information regarding conditions that existed at the end of the reporting period. Changes to the estimates and assumptions underlying our accounting for legal contingencies, and outcomes that differ from these estimates and assumptions, could require material adjustments to the carrying amounts of the respective provisions recorded and additional provisions. The expected timing or amounts of any outflows of economic benefits resulting from these lawsuits and claims are uncertain and not estimable, as they generally depend on the duration of the legal proceedings and settlement negotiations required to resolve the litigation and claims and the unpredictability of the outcomes of legal disputes in several jurisdictions.
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Contingent liabilities exist in respect of customer-related litigation and claims for which no provision has been recognized. It is not practicable to estimate the financial impact of these contingent liabilities due to the uncertainties around these lawsuits and claims as outlined above.
Contract Balances | Section B — Employees
| We recognize trade receivables for performance obligations satisfied over time gradually as the performance obligation is satisfied and in full once the invoice is due. Judgment is required in determining whether a right to consideration is unconditional and thus qualifies as a receivable. | | Contract liabilities primarily reflect invoices due or payments received in advance of revenue recognition. | | Typically, we invoice fees for on-premise standard software on contract closure and software delivery. Periodic fixed fees for cloud subscription services, software support services, and other multi-period agreements are typically invoiced yearly or quarterly in advance. Such fee prepayments account for the majority of our contract liability balance. Fees based on actual transaction volumes for cloud subscriptions and fees charged for non-periodical services are invoiced as the services are delivered. While payment terms and conditions vary by contract type and region, our terms typically require payment within 30 to 60 days. |
Geographic Information The amounts for revenue by region in the following tables are based on the location of customers. The regions in the following table are EMEA (Europe, Middle East, and Africa), Americas (North America and Latin America), and APJ (Asia Pacific Japan). Total Revenue by Region | | | | | | | € millions | | 2022 | | 2021 | | 2020 | Germany | | 4,504 | | 4,343 | | 4,015 | Rest of EMEA | | 8,577 | | 8,246 | | 8,052 | EMEA | | 13,081 | | 12,589 | | 12,067 | United States | | 10,811 | | 8,870 | | 9,110 | Rest of Americas | | 2,484 | | 2,099 | | 1,996 | Americas | | 13,295 | | 10,969 | | 11,106 | Japan | | 1,242 | | 1,301 | | 1,305 | Rest of APJ | | 3,253 | | 2,984 | | 2,859 | APJ | | 4,495 | | 4,285 | | 4,165 | SAP Group | | 30,871 | | 27,842 | | 27,338 |
Major Revenue Classes by Region | | | | | | | | | | | | | € millions | | Cloud Revenue | | Cloud and Software Revenue | | | | | | | | 2022 | | 2021 | | 2020 | | 2022 | | 2021 | | 2020 | EMEA | | 4,293 | | 3,308 | | 2,608 | | 11,236 | | 10,931 | | 10,364 | Americas | | 6,687 | | 4,894 | | 4,439 | | 11,333 | | 9,348 | | 9,239 | APJ | | 1,575 | | 1,217 | | 1,033 | | 3,952 | | 3,798 | | 3,625 | SAP Group | | 12,555 | | 9,418 | | 8,080 | | 26,521 | | 24,078 | | 23,228 |
For information about the breakdown of revenue by segment and segment revenue by region, see Note (C.1). In 2022, SAP’s business was impacted by the war in Ukraine and SAP’s decision to wind down its business operations in Russia and Belarus. Compared to the previous year, revenue was approximately €220 million lower. Remaining Performance Obligations Amounts of a customer contract’s transaction price that are allocated to the remaining performance obligations represent contracted revenue that has not yet been recognized. They include amounts recognized as contract liabilities and amounts that are contracted but not yet due. The transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied as at December 31, 2022, was €48.9 billion (December 31, 2021: €39.9 billion). The transaction price thereof allocated to cloud performance obligations that were unsatisfied or partially unsatisfied as at December 31, 2022, was €34.2 billion (December 31, 2021: €25.3 billion). The remaining amount mostly comprises obligations to provide software support services. The vast majority of software support contracts are contracts in the renewal phase that typically have a one-year contract term, while cloud subscription contracts typically are multiple-year contracts. The portion of remaining performance obligations related to services consists of non-cancelable revenue from contracts for projects with a predefined output. Overall, about half of the remaining performance obligations is expected to be recognized over the next 12 months following the respective balance sheet date. This estimate is based on our best judgment, as it, for example, needs to consider estimates of possible future contract modifications or customers’ deployment of the solutions. The amount of transaction price allocated to the remaining performance obligations, and changes in this amount over time, are impacted by, among others: - Currency fluctuations - The contract period of our cloud and software support contracts remaining at the balance sheet date and thus by the timing of contract renewals Contract Balances The following table presents the activities impacting contract liabilities balances during the year ended December 31, 2022: Contract Liabilities | | | € billions |
| 2022 | 1/1/2022 | | 4.4 | Increases resulting from billing and invoices becoming due | | 10.9 | Decreases resulting from satisfaction of performance obligations | | -10.1 | Other1 | | 0.1 | 12/31/2022 | | 5.3 |
1 Other includes, for example, the impact of foreign currency translation and business combinations. The amount of revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the reporting period was €4.1 billion (December 31, 2021: €3.6 billion). (A.2) Trade and Other Receivables y Accounting for Trade and Other Receivables | | We measure trade receivables and contract assets from contracts with customers at amortized cost less expected credit losses. We account for expected credit losses by recording an allowance on a portfolio basis. We apply the simplified impairment approach. On initial measurement of the receivables, we consider all credit losses that are expected to occur during the lifetime of the receivables. We use a provision matrix to estimate these losses. Additionally, we recognize allowances for individual receivables if there is objective evidence of credit impairment. Account balances are written off either partially or in full if we judge that the likelihood of recovery is remote. For information about how the default risk for trade receivables is analyzed and managed, how the loss rates for the provision matrix are determined, how credit impairment is determined and what our criteria for write-offs are, see the section provideson credit risk in Note (F.1). In our Consolidated Income Statements, net gains/losses from expected credit loss allowances are included in Other operating income/expense, net. Gains/losses from foreign currency exchange rate fluctuations are included in Other non-operating income/expense, net. Determining our expected credit loss allowance involves significant judgment. In this judgment, we primarily consider our historical experience with credit losses in the respective provision matrix risk class and current data on overdue receivables. We expect that our historical default rates represent a reasonable approximation for future expected customer defaults. Besides historical data, our judgment used in developing the provision matrix considers reasonable and supportable forward-looking information (for example, changes in country risk ratings, and fluctuations in credit default swaps of the countries in which our customers are located). The assessment of whether a receivable is collectible involves the use of judgment and requires us to make assumptions about customer defaults that could change significantly. By applying this judgment, we record an allowance for a specific customer when it is probable that a credit loss has occurred and the amount of the loss is reasonably estimable. Basing the expected credit loss allowance for the remaining receivables primarily on our historical loss experience likewise requires judgment, as history may not be indicative of future development. Also, including reasonable and supportable forward-looking information in the loss rates of the expected credit loss allowance requires judgment, as they may not provide a reliable prediction for future development. |
Trade and Other Receivables | | | | | | | | | | | | | € millions | | 2022 | | 2021 | | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | Trade receivables, net | | 5,782 | | 0 | | 5,782 | | 5,887 | | 1 | | 5,888 | Other receivables | | 454 | | 169 | | 623 | | 465 | | 146 | | 611 | / Total | | 6,236 | | 169 | | 6,405 | | 6,352 | | 147 | | 6,499 |
The impact of the war in Ukraine has significantly increased the credit risk on our trade receivables in Russia and Belarus. The expected credit loss in Russia and Belarus in 2022 was €62 million (2021: €5 million). Contract assets as at December 31, 2022, were €343 million (December 31, 2021: €360 million). For more information about financial risk, how we manage credit risk, and details of our trade receivables and contract assets allowances, see Note (F.1). (A.3) Capitalized Cost from Contracts with Customers | y Costs of Obtaining Customer Contracts Capitalized costs from customer contracts are classified as Other non-financial assets in our statement of financial insights intoposition. The capitalized assets for the incremental costs of obtaining a customer contract consist of sales commissions earned by our employee benefit arrangements. It shouldsales force and partners as well as amounts paid to employees with non-sales roles when the payments meet the definition of being an incremental cost to obtain a contract with a customer. Judgment is required in determining the amounts to be readcapitalized, particularly where the commissions are based on cumulative targets and where commissions relate to multiple performance obligations in conjunctionone customer contract. We capitalize such cumulative target commissions for all customer contracts that count towards the cumulative target but only if nothing other than obtaining customer contracts can contribute to achieving the cumulative target. Commissions for contracts with multiple performance obligations or for probable renewals thereof are allocated to these performance obligations and probable renewals relative to the respective standalone selling price. Our sales commission payments for customer contract renewals are typically not commensurate with the commissions paid for new contracts. Thus, the commissions paid for renewable new contracts also relate to expected renewals of these contracts. Consequently, we amortize sales commissions paid for new customer contracts on a straight-line basis over the expected contract life including probable contract renewals. Judgment is required in estimating these contract lives. In exercising this judgment, we consider our expectation about future contract renewals which we evaluate periodically to confirm that the resulting amortization period properly reflects the expected contract life or if there are potential indicators of impairment. Commensurate payments are amortized over the contract term to which they relate. The amortization periods range from 18 months to nine years depending on the type of offering. Amortization of the capitalized costs of obtaining customer contracts is classified mainly as sales and marketing expense. We expense incremental costs of obtaining a customer contract as incurred if we expect an amortization period of one year or less. y Costs to Fulfill Customer Contracts Capitalized costs incurred to fulfill customer contracts mainly consist of direct costs for set-up and implementation of cloud products and custom cloud development contracts as far as these costs are not in scope of other accounting standards than IFRS 15. These costs are amortized after completion of the setup and implementation or the development, respectively, on a straight-line basis over the expected life of the cloud subscription contract including expected renewals. For the life of the contract, we consider our expectation about future contract renewals which we evaluate periodically to confirm that the resulting amortization period properly reflects the expected contract life. The amortization periods range from six to eight years depending on the type of offering. In addition, the capitalized costs include third-party license fees which are amortized over the term of the third-party license contract. Judgment is required in evaluating whether costs are directly related to customer contracts and in estimating contract lives. Amortization of capitalized costs to fulfill contracts for custom cloud applications and extensions is included in the cost of cloud. |
Capitalized Cost from Contracts with Customers | | | | | | | | | | | | | € millions | | 2022 | | 2021 | | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | Capitalized cost of obtaining customer contracts | | 871 | | 2,812 | | 3,684 | | 667 | | 2,158 | | 2,826 | Capitalized cost to fulfill customer contracts | | 164 | | 206 | | 370 | | 126 | | 175 | | 301 | Capitalized contract cost | | 1,036 | | 3,019 | | 4,054 | | 793 | | 2,333 | | 3,127 | / Other non-financial assets | | 2,139 | | 3,580 | | 5,719 | | 1,633 | | 2,628 | | 4,261 | Capitalized contract cost as % of / Other non-financial assets | | 48 | | 84 | | 71 | | 49 | | 89 | | 73 |
Amortization Expense | | | | | € millions | | 2022 | | 2021 | Capitalized cost of obtaining customer contracts | | 762 | | 523 | Capitalized cost to fulfill customer contracts | | 243 | | 171 |
(A.4) Customer-Related Provisions y Expected Contract Losses | | Customer-related provisions mainly include expected contract losses. We adjust these provisions as further information becomes available and as circumstances change. Non-current provisions are measured at the present value of their expected settlement amounts as at the reporting date. The unit of account for the identification of potential onerous customer contracts is based on the contract definition of IFRS 15 including the contract combination guidance. The economic benefits considered in the assessment comprise the future benefits we are directly entitled to under the contract as well as the anticipated future benefits that are the economic consequence of the contract if these benefits can be reliably determined. y Customer-Related Litigation and Claims Customer-related provisions also include obligations resulting from customer-related litigation and claims. We are currently confronted with various claims and legal proceedings, including claims that relate to customers demanding indemnification for proceedings initiated against them based on their use of SAP software, and occasionally claims that relate to customers being dissatisfied with the products and services that we have delivered to them. The obligations arising from customer-related litigation and claims comprise cases in which we indemnify our customers against liabilities arising from a claim that our products infringe a third party’s patent, copyright, trade secret, or other proprietary rights. Due to uncertainties relating to these matters, provisions are based on the best information available. Significant judgment is required in the determination of whether and when a provision is to be recorded and what the appropriate amount for such provision should be. Notably, judgment is required in the following areas: - Determining whether an obligation exists - Determining the probability of outflow of economic benefits - Determining whether the amount of an obligation is reliably estimable - Estimating the amount of the expenditure required to settle the present obligation At the end of each reporting period, we reassess the potential obligations related to our pending claims and litigation and adjust our respective provisions to reflect the current best estimate. In addition, we monitor and evaluate new information that we receive after the end of the respective reporting period, but before the Consolidated Financial Statements are authorized for issue, to determine whether this provides additional information regarding conditions that existed at the end of the reporting period. Changes to the estimates and assumptions underlying our accounting for legal contingencies, and outcomes that differ from these estimates and assumptions, could require material adjustments to the carrying amounts of the respective provisions recorded and additional provisions. The expected timing or amounts of any outflows of economic benefits resulting from these lawsuits and claims are uncertain and not estimable, as they generally depend on the duration of the legal proceedings and settlement negotiations required to resolve the litigation and claims and the unpredictability of the outcomes of legal disputes in several jurisdictions. |
Contingent liabilities exist in respect of customer-related litigation and claims for which no provision has been recognized. It is not practicable to estimate the financial impact of these contingent liabilities due to the uncertainties around these lawsuits and claims as outlined above. Section B — Employees This section provides financial insights into our employee benefit arrangements. It should be read in conjunction with the compensation disclosures for key management personnel in Note (G.5). (B.1) Employee Headcount The following table provides an overview of employee headcount, broken down by function and by the regions EMEA (Europe, Middle East, and Africa), Americas (North America and Latin America), and APJ (Asia Pacific Japan). Employee Headcount by Region and Function | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Full-time equivalents | | 12/31/2021 | | 12/31/2020 | | 12/31/2019 | | 12/31/2022 | | 12/31/2021 | | 12/31/2020 | | | EMEA | | Americas | | APJ | | Total | | EMEA | | Americas | | APJ | | Total | | EMEA | | Americas | | APJ | | Total | | EMEA | | Americas | | APJ | | Total | | EMEA | | Americas | | APJ | | Total | | EMEA | | Americas | | APJ | | Total | Cloud and software | | 5,947 | | 4,586 | | 5,113 | | 15,646 | | 6,278 | | 4,589 | | 5,525 | | 16,392 | | 6,501 | | 4,426 | | 5,361 | | 16,288 | | 5,672 | | 4,617 | | 5,247 | | 15,536 | | 5,947 | | 4,586 | | 5,113 | | 15,646 | | 6,278 | | 4,589 | | 5,525 | | 16,392 | Services | | 8,229 | | 5,491 | | 5,924 | | 19,644 | | 8,175 | | 5,934 | | 5,733 | | 19,842 | | 8,250 | | 6,018 | | 5,971 | | 20,239 | | 8,247 | | 5,580 | | 5,841 | | 19,669 | | 8,229 | | 5,491 | | 5,924 | | 19,644 | | 8,175 | | 5,934 | | 5,733 | | 19,842 | Research and development | | 15,347 | | 6,326 | | 10,571 | | 32,244 | | 13,705 | | 6,094 | | 9,781 | | 29,580 | | 12,710 | | 5,793 | | 9,131 | | 27,634 | | 16,606 | | 6,416 | | 11,100 | | 34,122 | | 15,347 | | 6,326 | | 10,571 | | 32,244 | | 13,705 | | 6,094 | | 9,781 | | 29,580 | Sales and marketing | | 11,136 | | 11,598 | | 5,481 | | 28,215 | | 10,348 | | 10,485 | | 5,000 | | 25,834 | | 10,205 | | 10,368 | | 5,209 | | 25,781 | | 12,207 | | 12,511 | | 5,831 | | 30,548 | | 11,136 | | 11,598 | | 5,481 | | 28,215 | | 10,348 | | 10,485 | | 5,000 | | 25,834 | General and administration | | 3,374 | | 2,306 | | 1,199 | | 6,879 | | 3,285 | | 2,161 | | 1,243 | | 6,689 | | 3,161 | | 2,123 | | 1,246 | | 6,530 | | 3,466 | | 2,186 | | 1,280 | | 6,932 | | 3,374 | | 2,306 | | 1,199 | | 6,879 | | 3,285 | | 2,161 | | 1,243 | | 6,689 | Infrastructure | | 2,609 | | 1,353 | | 824 | | 4,786 | | 2,291 | | 1,107 | | 696 | | 4,094 | | 2,220 | | 984 | | 654 | | 3,859 | | 2,800 | | 1,440 | | 914 | | 5,154 | | 2,609 | | 1,353 | | 824 | | 4,786 | | 2,291 | | 1,107 | | 696 | | 4,094 | SAP Group (December 31) | | 46,641 | | 31,660 | | 29,113 | | 107,415 | | 44,082 | | 30,369 | | 27,979 | | 102,430 | | 43,048 | | 29,712 | | 27,571 | | 100,330 | | 48,999 | | 32,749 | | 30,213 | | 111,961 | | 46,641 | | 31,660 | | 29,113 | | 107,415 | | 44,082 | | 30,369 | | 27,979 | | 102,430 | Thereof acquisitions | | 462 | | 407 | | 45 | | 914 | | 609 | | 97 | | 75 | | 781 | | 338 | | 1,638 | | 137 | | 2,113 | | 188 | | 214 | | 8 | | 410 | | 462 | | 407 | | 45 | | 914 | | 609 | | 97 | | 75 | | 781 | SAP Group (months' end average) | | 45,359 | | 30,651 | | 28,354 | | 104,364 | | 43,340 | | 30,306 | | 27,830 | | 101,476 | | 42,697 | | 29,368 | | 27,092 | | 99,157 | | 48,408 | | 32,668 | | 29,939 | | 111,015 | | 45,359 | | 30,651 | | 28,354 | | 104,364 | | 43,340 | | 30,306 | | 27,830 | | 101,476 |
(B.2) Employee Benefits Expenses | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Salaries | | 10,635 | | 10,413 | | 10,031 | | 12,140 | | 10,635 | | 10,413 | Social security expenses | | 1,589 | | 1,439 | | 1,477 | | 1,894 | | 1,589 | | 1,439 | Share-based payment expenses | | 2,794 | | 1,084 | | 1,835 | | 2,614 | | 2,794 | | 1,084 | Pension expenses | | 408 | | 419 | | 369 | | 479 | | 408 | | 419 | Employee-related restructuring expenses | | 25 | | -7 | | 1,111 | | 85 | | 25 | | -7 | Termination benefits outside of restructuring plans | | 101 | | 72 | | 47 | | 44 | | 101 | | 72 | Employee benefits expenses | | 15,552 | | 13,420 | | 14,870 | | 17,256 | | 15,552 | | 13,420 |
(B.3) Share-Based Payments y Accounting for Share-Based Payments | | Classification in the Income Statement | | Share-based payments cover cash-settled and equity-settled awards issued to our employees. The respective expenses are recognized as employee benefits and classified in our Consolidated Income Statements according to the activities that the receiving employees perform. Valuation, Judgment, and Sources of Estimation Uncertainty We use certain assumptions in estimating the fair values for our share-based payments, including expected share price volatility and expected award life (which represents our estimate of the average remaining life until the awards are exercised or expire unexercised).dividend yields. In addition, the final payout for plansnumber of Performance Share Units (PSUs) vesting also depends on the achievement of performance indicators andindicators. Furthermore, the payout for cash-settled share units depends on our share price on the respective exercisevesting dates. Changes to these assumptions and outcomes that differ from these assumptions could require material adjustments to the carrying amount of the liabilities we have recognized for these share-based payments. The fair value of the share units granted under the LTI 2016 Plan areis dependent on our performance against a group of peer companies (Peer Group Index), the volatility, and the expected correlation between the price of the index and our share price. The fair value of the share units granted under the LTI 2020 are dependent on our performance against the total shareholder return (TSR) for NASDAQ-100 companies, the volatility, and the expected correlation between the TSR of the NASDAQ-100 companies and our TSR. We believe that the expected volatility is the most sensitive assumption we use in estimating the fair values of our share options. Regarding future payout under our cash-settled plans, the SAP share price is the most relevant factor. With respect to our LTI 2016 Plan, we believe that future payout will be significantly impacted not only by our share price but also by the relative performance against the Peer Group Index. With respect to our LTI 2020, we believe that future payout will be significantly impacted not only by our share price but also by the relative TSR performance against the NASDAQ-100 companies. Future payouts under our LTI 2020 will also be dependent on meeting non-market-based performance conditions based on SAP's long-term strategy. The latter, however, is not incorporated into our fair value calculation but leads to adjustments of the quantity of awards granted. Changes in these factors could significantly affect the estimated fair values as calculated by the valuation model, and the future payout.
The fair values of our equity-settled Qualtrics Plan equal the Qualtrics share price at grant date, as the expected dividend yield is 0%. The future settlement of Performance Share Units (PSUs) under this plan will also be dependent on meeting non-market-based Qualtrics performance conditions.
Under certain programs, we grant our employees discounts on purchases of SAP shares. Sinceshare purchases. If those discounts are not dependent on future services to be provided by our employees, the discount is recognized as an expense when the discounts are granted. Presentation in the Statements of Cash Flows We present the payments of our cash-settled share-based payment plans separately in our Statements of Cash Flows under cashCash flows from operating activities. As a result, the changes in other assets and in other liabilities presented in the reconciliation of operating cash flow do not consider share-based payment-related assets or liabilities. Payments for taxes related to the net share settlement for our equity-settled share-based payment plans are presented separately in our Statement of Cash Flows under Cash flows from financing activities. |
The operating expense line items in our income statement include the following share-based payment expenses: Share-Based Payment Expenses by Functional Area | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Cost of cloud | | 59 | | 40 | | 56 | | 68 | | 59 | | 40 | Cost of software | | 70 | | 55 | | 82 | | Cost of software licenses and support | | | 70 | | 70 | | 55 | Cost of services | | 266 | | 175 | | 246 | | 281 | | 266 | | 175 | Research and development | | 513 | | 296 | | 429 | | 625 | | 513 | | 296 | Sales and marketing | | 655 | | 360 | | 562 | | 773 | | 655 | | 360 | General and administration | | 1,230 | | 157 | | 461 | | 798 | | 1,230 | | 157 | Share-based payment expenses | | 2,794 | | 1,084 | | 1,835 | | 2,614 | | 2,794 | | 1,084 | Thereof cash-settled share-based payments | | 1,147 | | 893 | | 1,664 | | 355 | | 1,147 | | 893 | Thereof equity-settled share-based payments | | 1,647 | | 191 | | 171 | | 2,258 | | 1,647 | | 191 |
Our major share-based payment plans are described below.
Our major share-based payment plans are described below. a)Cash-Settled Share-Based Payments SAP Long-Term Incentive Program 2020 (LTI 2020) The LTI 2020 is a long-term, multi-yearmultiyear performance-based element of Executive Board compensation element that is granted in annual tranches. The LTI 2020 reflects SAP'sSAP’s long-term strategy and thus sets uniform incentives for the Executive Board members to achieve key targets from the long-term strategic plans. The LTI 2020 also serves to reward the Executive Board members for long-term SAP share price performance as compared to the market, thus ensuring that shareholders’ interests are also honored. In addition, the LTI 2020 includes a component to ensure long-term retention of our Executive Board members. The LTI 2020 is a virtual share program under which annual tranches with a term of approximately four years each are granted. When the individual tranches are granted, a certain grant amount specified in the Executive Board member'smember’s service contract is converted into virtual shares (Share(share units). For this purpose, the grant amount is divided by the price of the SAP share which corresponds to the arithmetic mean of the SAP share price on the 20 trading days after scheduled publication of the preliminary results for the fourth quarter and the year as a whole (grant price). The share units allocated are composed of 1/3 Financial Performance Share Units (FSUs), 1/3 Market Performance Share Units (MSUs), and 1/3 Retention Share Units (RSUs).Units. All 3three types of share units have a vesting period of approximately four years. In contrast to RSUs,Retention Share Units, FSUs and MSUs are subject to changes in quantity. In this context, the following applies: The number of FSUs initially awarded is multiplied by a performance factor. The performance factor consists of 3three equally weighted individual performance indicators relating to the 3three non-IFRS KPIs at constant currencies,derived from SAP’s long-term strategy: total revenue, cloud revenue, and operating income. The performance period throughout which the target achievement for these 3three KPIs is measured starts at the beginning of the financial year in which the FSUs are awarded and concludes upon the end of the second year following the year in which the share units were awarded. A numerical target value equaling 100% target achievement is set for each KPI. This constitutes, in each case, a cumulative value for the three years of the performance period.  
The number of MSUs initially awarded is likewise multiplied by a performance factor. The performance factor depends on the amount of the TSR on the SAP share, measured for an entire performance period of approximately three years, compared to the TSR for NASDAQ-100 companies. If the TSR on the SAP share equals the median, the performance factor will be 100%. If the TSR on the SAP share over the performance period is negative, the maximum performance factor will, however, in deviation from the summary above, be 100%.  
The performance of the share units is linked to the performance of the SAP share price, including dividend payments. Accordingly, an amount is paid out for each share unit which equals the SAP share price plus those dividends disbursed in respect of an SAP share in the period from the beginning of the year in which the share units were awarded until the end of the third year following the year in which the share units were awarded. The arithmetic mean of the SAP share price on the 20 trading days after scheduled publication of the preliminary results for the fourth quarter and the year as a whole will be used as the SAP share price. The payout amount per share unit, including the dividend amounts due on the share units, is capped at 200% of the grant price. The tranche is cash-settled and paid in euros after the Annual General Meeting of Shareholders of the corresponding year. If an Executive Board member’s service contract is terminated before the end of the third year following the year in which the share units were granted, the RSUsRetention Share Units and PSUs are forfeited in whole or in part, depending on the circumstances of the relevant resignation from office or termination of the service contract. Long-Term Incentive 2016 Plan (LTI 2016 Plan) The purpose of the LTI 2016 Plan was to reward our Executive Board members for the annual achievement of SAP’s operating profit (non-IFRS at constant currencies) targets, to ensure long-term retention of our Executive Board members, and to reward them for the long-term SAP share price performance as compared to its main peer group (Peer Group). An LTI tranche was granted annually and has a term of four years (2016–2019 tranches). Each grant started with determining a grant amount in euros. The grant amount was based on the Executive Board members’ contractual LTI target amount and the operating profit target achievement for the previous year. The Supervisory Board set the grant amount at a level between 80% and 120% of the contractual LTI target amount, taking into account the operating profit target achievement. This grant amount was converted into virtual shares, referred to as share units, by dividing the grant amount by the grant price. The grant price was the arithmetic mean of the XETRA closing prices of the SAP share on the 20 trading days following the publication of SAP’s fourth-quarter results. All share units granted in this way, comprising 60% PSUs and 40% RSUs,Retention Share Units, have a vesting period of approximately four years. At the end of the vesting period, the corresponding share units are non-forfeitable. The payout price used for the settlement is the arithmetic mean of the XETRA closing prices of the SAP share on the 20 trading days following the publication of SAP’s fourth-quarter results subsequent to the end of the vesting period. The payout price is capped at 300% of the grant price. The LTI tranche is cash-settled and paid in euros after the Annual General Shareholders’ Meeting of the corresponding year. The number of PSUs ultimately paid out depends on the performance of the SAP share – absolute and relative to the Peer Group Index. In contrast, the final number of RSUsRetention Share Units is fixed. SAP’s absolute share price performance is measured by comparing the grant price against the payout price. If the SAP share price performance equals the Peer Group Index performance over the same period, the performance factor is set at 100%. If the SAP share price performs better than the Peer Group Index (measured as difference between SAP share price performance and Peer Group Index performance), the performance factor is increased by the percentage point of the outperformance of the SAP share price. The percentage point is doubled if, additionally, the payout price is higher than the grant price. The performance factor is capped at 150%. If the Peer Group Index performs better than the SAP share price, the performance factor is decreased by the percentage point of the outperformance of the Peer Group Index. All PSUs lapse if the performance factor is below 50%. If an Executive Board member’s service contract is terminated before the endF-25
Cash-Settled Move SAP Plan (Move) Including Grow SAP Plan and COVID-19 Recognition Plan (RSU Plan) To retain and engage executives and certain employees, we grantgranted virtual shares under Move representing a contingent right to receive a cash payment determined by the SAP share price and the number of share units that ultimately vest. Under our previous policy, we serviced obligations arising from the plan with cash payments, but starting in 2022, we intend to settle share units granted from then on predominantly in shares. For more information about the terms and conditions of the equity-settled Move SAP Plan, see section b) Equity-Settled Share-Based Payments in this Note (B.3). Obligations from outstanding share units granted before 2022 will continue to be settled in cash. In June 2020, 2021, and 2021,2022 respectively, we granted share units under the new Grow SAP Plan.Plan that we intend to settle in cash. This fixed term plan has broadly the same terms and conditions as the Move SAP Plan, recognizes all employees’ commitment to SAP’s success, and deepens their participation in our future company performance. In March 2021, we granted share unitsprevious years, grants under the COVID-19 Recognition Plan and the Restricted Stock Unit Plan were also included. Different vesting schedules apply to thank all employees for their commitment, dedication, and resilience. Except for a six-month vesting period, this non-recurring plan has broadly the same terms and conditions as the Move SAP Plan. specific share units. Granted share units under the respective plans will vest in different tranches, either:as follows: — | Restricted Stock Units (RSUs) with service condition only |
| - | -Over a half-year service period only
- Over a one-to-three-year service period only, or
- Over a three-year service period,
|
| - | Over a three-year period on annual basis, |
| - | Over a three-year period on a quarterly basis after a waiting period of six months, or |
— | Performance Share Units (PSUs) with service condition and upon achieving certain key performance indicators (KPIs) |
| - | Over a three-year period, or |
| - | Over a three-year period on a quarterly basis after a waiting period of 12 months. |
From 2021 onwards, the number of PSUs that will vest under the different tranches is mainly contingent upon achievement of two equally weighted KPIs in the year of grant: operating profit (non-IFRS at constant currencies) and cloud revenue (non-IFRS at(at constant currencies). Until 2021, operating profit (non-IFRS at constant currencies) was the only KPI. Depending on the weighted average performance, the number of PSUs vesting ranges between 0% and 200% of the number initially granted. Performance against the KPI target was 130.9%84.3% in 2021 (2020:2022 (2021: 130.9%, 2020: 100.4%, 2019: 118.7%). AllThe share units granted as cash-settled PSUs are paid out in cash upon vesting. Qualtrics Cash-Settled Awards Replacing Pre-Acquisition Qualtrics Awards (Qualtrics Rights)The valuation of our outstanding cash-settled plans was based on the following parameters and assumptions:
In conjunction withFair Value and Parameters Used at Year End 2022
| | | | | | | €, unless otherwise stated | | LTI 2016 Plan | | LTI 2020 | | Move | | | (2019 Tranche) | | (2020-2022 | | (2019–2022 | | | | | Tranches) | | Tranches) | Weighted average fair value as at 12/31/2022 | | 67.81 | | 94.83 | | 94.78 | Information how fair value was measured at measurement date | | | | | | | Valuation model used | | Monte Carlo | | Monte Carlo | | Other1 | Share price | | 96.39 | | 96.39 | | 96.39 | Risk-free interest rate, depending on maturity (in %) | | 0.37 | | NA | | NA | Expected volatility (in %) | | 27 | | 24 to 31 | | NA | Expected dividend yield (in %) | | 2.03 | | NA | | 2.03 | Weighted average remaining life of awards outstanding as at 12/31/2022 (in years) | | 0.2 | | 2.3 | | 0.8 |
1 For these awards, the acquisition of Qualtrics in 2019, under the termsfair value is calculated by subtracting expected future dividends, if any, until maturity of the acquisition agreement, SAP exchanged unvested Restricted Share Awards (RSAs), Restricted Share Units (RSUs), and Performance Share Units (PSUs), and options held by employees of Qualtrics into cash-settled share-based payment awards of SAP (Qualtrics Rights). After completion of a voluntary exchange offer in conjunction withrespective award from the Qualtrics IPO in 2021, most ofprevailing share price as at the Qualtrics Rights were exchanged into equity-settled Qualtrics RSU awards. For more information about this voluntary exchange offer, see the section Qualtrics Equity Awards – Exchange Offer in this Note (B.3)measurement date. .
Fair Value and Parameters Used at Year End 2021 | | | | | | | €, unless otherwise stated | | LTI 2016 Plan | | LTI 2020 | | Move | | | (2018-2019 | | (2020 -2021 | | (2018-2021 | | | Tranches) | | Tranches) | | Tranches) | Weighted average fair value as at 12/31/2021 | | 64.16 | | 118.73 | | 122.88 | Information how fair value was measured at measurement date | | | | | | | Valuation model used | | Monte Carlo | | Monte Carlo | | Other1 | Share price | | 124.90 | | 124.90 | | 124.90 | Risk-free interest rate, depending on maturity (in %) | | -0.72 to -0.12 | | NA | | -0.72 to -0.32 | Expected volatility (in %) | | 21 | | 30 to 32 | | NA | Expected dividend yield (in %) | | 1.52 | | NA | | 1.52 | Weighted average remaining life of awards outstanding as at 12/31/2021 (in years) | | 0.7 | | 2.8 | | 1.1 |
1 For these awards, the fair value is calculated by subtracting expected future dividends, if any, until maturity of the respective award from the prevailing share price as at the measurement date. For the LTI 2016 Plan valuation, the Peer Group Index price on December 31, 2022, was US$432.27 (2021: US$593.37); the expected dividend yield of the index of 1.16% (2021: 1.00%), the expected volatility of the index of 32% (2021:17% to 18%), and the expected correlation of the SAP share price and the index price of 39% (2021: 35% to 36%) are based on historical data for the SAP share price and index price. For the LTI 2020 valuation, the NASDAQ-100 Total Return Index on December 31, 2022, was US$12,994.57 (2021: US$19,217.94). The expected volatility of the NASDAQ-100 companies of 36% to 41% (2021: 36% to 38%), and the expected correlation of SAP and the NASDAQ-100 companies of 26% to 32% (2021: 31% to 34%) are based on historical TSR data for SAP and the NASDAQ-100 companies. The risk-free interest rate is derived from German government bonds with a similar duration. The SAP dividend yield is based on expected future dividends. The valuation of our outstanding cash-settled plans was based on the following parameters and assumptions:
Fair Value and Parameters Used at Year End 2021 for Cash-Settled PlansChanges in Outstanding Awards
| | | | | | | €, unless otherwise stated | | LTI 2016 Plan | | LTI 2020 | | RSU Plan | | | (2018-2019 | | (2020-2021 | | (2018–2021 | | | Tranches) | | Tranches) | | Tranches) | Weighted average fair value as at 12/31/2021 | | 64.16 | | 118.73 | | 122.88 | Information how fair value was measured at measurement date | | | | | | | Option pricing model used | | Monte Carlo | | Monte Carlo | | Other1 | Share price | | 124.90 | | 124.90 | | 124.90 | Risk-free interest rate, depending on maturity (in %) | | -0.72 to -0.12 | | NA | | -0.72 to -0.32 | Expected volatility (in %) | | 21 | | 30 to 32 | | NA | Expected dividend yield (in %) | | 1.52 | | NA | | 1.52 | Weighted average remaining life of awards outstanding as at 12/31/2021 (in years) | | 0.7 | | 2.8 | | 1.1 |
| | | | | | | Thousands, unless otherwise stated | | LTI 2016 Plan | | LTI 2020 | | Move | | | (2018–2019 | | (2020–2022 | | (2018–2022 | | | Tranches) | | Tranches) | | Tranches) | 12/31/2020 | | 767 | | 172 | | 16,993 | Granted | | 0 | | 238 | | 12,204 | Adjustment based upon KPI target achievement | | -150 | | NA | | 153 | Exercised | | -92 | | 0 | | -8,092 | Exchanged | | NA | | NA | | -1,309 | Forfeited | | -57 | | -70 | | -1,165 | 12/31/2021 | | 469 | | 340 | | 18,783 | Granted2 | | 0 | | 206 | | 2,997 | Adjustment based upon KPI target achievement | | -122 | | NA | | -36 | Exercised | | -77 | | 0 | | -8,869 | Forfeited | | 0 | | 0 | | -1,016 | 12/31/2022 | | 270 | | 546 | | 11,859 | | | | | | | | Total carrying amount (in € millions) of liabilities as at | | | | | | | 12/31/2021 | | 28 | | 15 | | 1,260 | 12/31/2022 | | 18 | | 23 | | 752 | | | | | | | | Total intrinsic value of vested awards (in € millions) as at | | | | | | | 12/31/2021 | | 38 | | 4 | | 0 | 12/31/2022 | | 22 | | 3 | | 0 | | | | | | | | Weighted average share price (in €) for awards exercised in | | | | | | | 2021 | | 106.68 | | NA | | 107.69 | 2022 | | 106.59 | | NA | | 97.35 | | | | | | | | Total expense (in € millions) recognized in | | | | | | | 2020 | | -9 | | 6 | | 760 | 2021 | | -11 | | 9 | | 1,139 | 2022 | | -2 | | 8 | | 346 |
12 For these awards,We have changed the fair value is calculated by subtractingclassification of some share units granted under the net present valueMove plan with the initial intention to settle in shares from equity-settled to cash-settled because a cash outflow became probable. Share units with switched classification are considered in the number of expected future dividend payments, if any, until maturity of the respective award from the prevailinggranted share price as at the valuation date.
Fair Value and Parameters Used at Year End 2020 for Cash-Settled Plansunits.
| | | | | | | | | | €, unless otherwise stated | | LTI 2016 Plan | | LTI 2020 | | RSU Plan | | | Qualtrics | | | (2017-2019 | | (2020 Tranche) | | (2017–2020 | | | Rights | | | Tranches) | | | | Tranches) | | | | Weighted average fair value as at 12/31/2020 | | 72.94 | | 94.75 | | 105.52 | | | 33.66 | Information how fair value was measured at measurement date | | | | | | | | | | Option pricing model used | | Monte Carlo | | Monte Carlo | | Other1 | | | Other1 | Share price | | 107.22 | | 107.22 | | 107.22 | | | 107.22 | Risk-free interest rate, depending on maturity (in %) | | -0.75 to -0.11 | | NA | | -0.77 to -0.32 | | | -0.77 to -0.37 | Expected volatility (in %) | | 34 to 42 | | 30 | | NA | | | NA | Expected dividend yield (in %) | | 1.54 | | NA | | 1.54 | | | 1.54 | Weighted average remaining life of awards outstanding as at 12/31/2020 (in years) | | 1.2 | | 3.2 | | 1.0 | | | 1.5 |
1 For these awards, the fair value is calculated by subtracting the net present value of expected future dividend payments, if any, until maturity of the respective award from the prevailing share price as at the valuation date.
For the LTI 2016 Plan valuation, the Peer Group Index price on December 31, 2021, was US$593.37 (2020: US$481.65); the expected dividend yield of the index of 1.00% (2020: 1.14)%, the expected volatility of the index of 17% to 18% (2020: 26% to 31)%, and the expected correlation of the SAP share price and the index price of 35% to 36% (2020: 27% to 30)% are based on historical data for the SAP share price and index price.
For the LTI 2020 valuation, the NASDAQ-100 Total Return Index on December 31, 2021, was US$19,217.94 (2020: US$15,072.29). The expected volatility of the NASDAQ-100 companies of 36% to 38% (2020: 36%), and the expected correlation of SAP and the NASDAQ-100 companies of 31% to 34% (2020: 31%) are based on historical TSR data for SAP and the NASDAQ-100 companies.
The risk-free interest rate is derived from German government bonds with a similar duration. The SAP dividend yield is based on expected future dividends.
Changes in Outstanding Awards Under Our Cash-Settled Plans
| | | | | | | | | Thousands, unless otherwise stated | | LTI 2016 Plan | | LTI 2020 | | RSU Plan | | Qualtrics | | | (2017–2019 | | (2020–2021 | | (2017–2021 | | Rights | | | Tranches) | | Tranches) | | Tranches) | | | 12/31/2019 | | 1,110 | | 0 | | 16,128 | | 16,007 | Granted | | 0 | | 202 | | 9,238 | | 0 | Adjustment based upon KPI target achievement | | -211 | | NA | | -5 | | NA | Exercised | | -129 | | 0 | | -7,204 | | -7,791 | Forfeited | | -3 | | -30 | | -1,164 | | -699 | 12/31/2020 | | 767 | | 172 | | 16,993 | | 7,518 | Granted | | 0 | | 238 | | 12,204 | | 0 | Adjustment based upon KPI target achievement | | -150 | | NA | | 153 | | NA | Exercised | | -92 | | 0 | | -8,092 | | -1,780 | Exchanged | | NA | | NA | | -1,309 | | -5,451 | Forfeited | | -57 | | -70 | | -1,165 | | -243 | 12/31/2021 | | 469 | | 340 | | 18,783 | | 44 | | | | | | | | | | Total carrying amount (in € millions) of liabilities as at | | | | | | | | | 12/31/2020 | | 49 | | 6 | | 1,027 | | 193 | 12/31/2021 | | 28 | | 15 | | 1,260 | | 1 | | | | | | | | | | Total intrinsic value of vested awards (in € millions) as at | | | | | | | | | 12/31/2020 | | 32 | | 3 | | 0 | | 0 | 12/31/2021 | | 38 | | 4 | | 0 | | 0 | | | | | | | | | | Weighted average share price (in €) for awards exercised in | | | | | | | | | 2020 | | 124.03 | | NA | | 109.75 | | 113.34 | 2021 | | 106.68 | | NA | | 107.69 | | 105.10 | | | | | | | | | | Total expense (in € millions) recognized in | | | | | | | | | 2019 | | 44 | | NA | | 1,087 | | 461 | 2020 | | -9 | | 6 | | 760 | | 132 | 2021 | | -11 | | 9 | | 1,139 | | 11 |
Share-Based Payment Balances | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | Share-based payment liabilities | | 839 | | 462 | | 1,302 | | 863 | | 454 | | 1,317 | | 524 | | 279 | | 803 | | 839 | | 462 | | 1,302 | / Other non-financial liabilities | | 5,203 | | 860 | | 6,063 | | 4,643 | | 770 | | 5,413 | | 4,818 | | 705 | | 5,523 | | 5,203 | | 860 | | 6,063 | Share-based payment liabilities as % of / Other non-financial liabilities | | 16 | | 54 | | 21 | | 19 | | 59 | | 24 | | 11 | | 40 | | 15 | | 16 | | 54 | | 21 |
b) Equity-Settled Share-Based Payments Recognized Expense for Equity-Settled PlansMove SAP Plan (Move)
| | | | | | | € millions | | 2021 | | 2020 | | 2019 | Own | | 200 | | 191 | | 171 | Qualtrics Plan | | 1,426 | | 0 | | 0 | Others | | 21 | | 0 | | 0 | Total | | 1,647 | | 191 | | 171 |
— | RSUs with service condition only |
| - | Over a half-year period, |
| - | Over a three-year period on a quarterly basis after a waiting period of six months, or |
— | PSUs with service condition and upon achieving certain key performance indicators (KPIs) |
| - | Over a three-year period on a quarterly basis after a waiting period of 12 months. |
We intend to settle the share units classified as equity-settled by reissuing treasury shares upon vesting (for more information, see Note (E.2)). Own SAP Plan (Own) Under Own, employees have the opportunity to purchase, on a monthly basis, SAP shares without any required holding period. The investment per each eligible employee is limited to a percentage of the respective employee's monthly base salary. SAP matches the employee investment by 40% and adds a subsidy of €20 per month for non-executives. As part of SAP's 50th anniversary celebration, SAP’s contribution was temporarily doubled from 40% to 80% from January to March 2022, contributing to the peak in 2022. This plan is not open to members of the Executive Board. Numbers of Shares Purchased | | | | | | | | | | | | | Millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Own | | 5.7 | | 5.5 | | 5.2 | | 9.2 | | 5.7 | | 5.5 |
As a result of our Own SAP Plan, we have commitments to grant SAP shares to employees. We have fulfilled and intend to continue to meet these commitments by reissuing treasury shares or through an agent who administers the equity-settled programs and purchases shares on the open market. We have fulfilled the obligations of Own through an agent. Qualtrics Equity Awards Qualtrics Omnibus Plan (Qualtrics Plan) Qualtrics grants equity awards settled with Qualtrics shares to eligible employees and the executive officers of Qualtrics. Qualtrics intends to meet these commitments by issuing shares. Granted units are either RSU awards subject to a time-based vesting, or PSUs subject to the achievement of certain performance conditions, as established by Qualtrics’ board of directors and measured annually (Qualtrics RSUs). Additionally, there are Qualtrics equity-settled options resulting from acquisitions as described below. The RSUs mainly vest with 25% one year after grant and ratably thereafter for 12 quarters. The PSUs Granted share units will vest in 4 equal annual installmentsdifferent tranches as follows: — | RSUs with service condition only |
| - | Over a four-year period on a quarterly basis, |
| - | Over a four-year period on a quarterly basis after a waiting period of six or 12 months, or |
— | PSUs with service condition and upon achieving certain non-market-based Qualtrics performance conditions |
| - | Over a four-year period on an annual basis. |
Pre-Acquisition Qualtrics Awards and are measured annually,Exchange Offer In conjunction with vestingthe acquisition of 100%Qualtrics in 2019, under the terms of each installment in the event that the performance targets are achieved,acquisition agreement, SAP exchanged unvested Restricted Share Awards (RSAs), Restricted Share Units (RSUs), Performance Share Units (PSUs), and ratable downward adjustments in the event that the performance targets are partially achieved. Exchange Offer
options held by employees of Qualtrics into cash-settled share-based payment awards of SAP (Qualtrics Rights). After completion of a voluntary exchange offer for eligible Qualtrics employees in conjunction with the IPO on January 28, 2021, 5.4 million cash-settled Qualtrics Rights and 1.3 million SAP RSU awards were exchanged into 12.8 million equity-settled Qualtrics RSU awards. The terms and conditions of the voluntary exchange offer, including the exchange ratio, were designed to preserve the intrinsic value of the Qualtrics Rights and SAP RSUs that were tendered. The modification date fair value of the Qualtrics RSU awards was US$30.00, which is equivalent to the Qualtrics IPO price. Furthermore, a subsequent exchange offer for certain Qualtrics employees in Australia took place in September 2021. Qualtrics Equity-Settled Options Replacing Clarabridge OptionsRecognized Expense
In conjunction with
| | | | | | | € millions | | 2022 | | 2021 | | 2020 | Own | | 307 | | 200 | | 191 | Qualtrics Plan | | 1,164 | | 1,426 | | NA | Move (2022 Tranches) | | 768 | | NA | | NA | Others | | 19 | | 21 | | 0 | Total | | 2,258 | | 1,647 | | 191 |
The valuation of our outstanding equity-settled plans at grant date was based on the acquisition of Clarabridgefollowing parameters and assumptions: Fair Value and Parameters Used at Grant Date in 2021, Qualtrics assumed outstanding Clarabridge stock options, which were converted into Qualtrics options. The conversion factor was set to preserve2022 | | | | | €, unless otherwise stated | | Move | | Qualtrics Plan | | | (2022 Tranches) | | | Weighted average fair value as at grant date | | 93.80 | | US$ 20.69 | Information how fair value was measured at grant date | | | | | Valuation model used | | Other3 | | Other3 | Weighted average share price | | 97.61 | | US$ 20.69 | Weighted average expected dividend yield (in %) | | 2.43 | | 0 | Weighted average initial life at grant date (in years) | | 1.6 | | 2.1 | Weighted average remaining life of awards outstanding as at 12/31/2022 (in years) | | 1.2 | | 2.4 |
3 For these awards, the intrinsicfair value is calculated by subtracting expected future dividends, if any, until maturity of the outstanding Clarabridge options. The replacement awards mirrorrespective award from the terms of the replaced awards except that the awards are settled by issuing Qualtrics shares while retaining their initial vesting schedules. For some Qualtrics options, additional vesting terms were agreed. The majority of the assumed options were either fully vested or partially vestedprevailing share price as at the acquisition date and had a strike price well below the fair value of the awards at the conversionmeasurement date. The modification date fair value of the stock options was determined to approximate the intrinsic value of the options with an underlying Qualtrics share price of US$43.88. Changes in Outstanding Awards Under Our Equity-Settled Plans
| | | | |
|
|
|
| Qualtrics Plan1
|
| |
| | Weighted Average Grant
|
|
| Awards
|
| Date Fair Value
| Thousands, unless otherwise stated
|
|
|
|
| 12/31/2020
|
| 0
|
| NA
| Exchanged
| | 12,872
| | US$30.04
| Granted
| | 80,856
| | US$44.27
| Exercised
| | -7,467
| | US$33.43
| Forfeited
| | -2,241
| | US$41.29
| 12/31/2021
| | 84,018
|
| US$43.13
|
1 The number of awards and their weighted average grant date fair values in this table include Qualtrics RSUs and Qualtrics equity-settled options replacing Clarabridge options.
The weighted average remaining life of Qualtrics Plan awards outstanding as at December 31, 2021 (in years) was 3.0 years. years and the weighted average grant date fair value was US$44.27. The fair value of the equity-settled share unit rights at grant date was estimated by taking the share price of the underlying shares on that date less expected dividends. The fair values of our equity-settled Qualtrics Plan equal the Qualtrics share price at grant date, as the expected dividend yield is 0%. Table of Contents Under Qualtrics’ equity-settled plans, we expect to transfer US$300 million to
Changes in Outstanding Awards | | | | | | | | | | | | Move | | Qualtrics Plan | Thousands, unless otherwise stated | | (2022 Tranches) | | | 12/31/2020 | | NA | | 0 | Exchanged | | NA | | 12,872 | Granted | | NA | | 80,856 | Exercised | | NA | | -7,467 | Forfeited | | NA | | -2,241 | 12/31/2021 | | NA | | 84,018 | Granted4 | | 15,371 | | 35,490 | Adjustment based upon KPI target achievement | | -139 | | 0 | Exercised | | -3,258 | | -34,320 | Forfeited | | -470 | | -7,048 | 12/31/2022 | | 11,504 | | 78,140 |
4 We have changed the tax authorityclassification of some share units granted under the Move plan with the initial intention to settle in shares from equity-settled to cash-settled because a cash outflow became probable. Share units with switched classification are considered in the employees’ tax obligation in 2022.number of granted share units. (B.4) Pension Plans and Similar Obligations y Defined Contribution Plans | | Amounts for domestic and foreign defined contribution plans are based on a percentage of the employees’ salaries or on the amount of contributions made by employees. In Germany and some other countries, we make contributions to public pension schemes that are operated by national or local government or similar institutions. Expenses for such local state pension plans are recognized as short-term employee benefits, that is, social security expenses. y Defined Benefit Pension Plans The discount rates used in measuring our post-employment benefit assets and liabilities are derived from rates available on high-quality corporate bonds and government bonds for which the timing and amounts of payments match the timing and the amounts of our projected pension payments. Net interest expense and other expenses related to defined benefit plans are recognized as employee benefits expenses and classified in our Consolidated Income Statements according to the activities that the employees owning the awards perform. Since our domestic defined benefit pension plans primarily consist of an employee-financed post-retirement plan that is fully financed with qualifying insurance policies, current service cost may become a credit as a result of adjusting the defined benefit liability’s carrying amount to the fair value of the qualifying plan assets. Such adjustments are recorded in service cost. Total expenses on defined benefit pension plans comprise related current and past service costs as well as interest income and expense. |
Total Expense of Pension Plans | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Defined contribution plans | | 346 | | 326 | | 314 | | 457 | | 346 | | 326 | Defined benefit pension plans | | 62 | | 93 | | 55 | | 22 | | 62 | | 93 | Pension expenses | | 408 | | 419 | | 369 | | 479 | | 408 | | 419 |
Defined Benefit Plans Present Value of the Defined Benefit Obligations (DBO) and the Fair Value of the Plan Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Domestic Plans | | Foreign Plans | | Other Foreign Post-Employment | | Total | | Domestic Plans | | Foreign Plans | | Other Foreign Post- | | Total | € millions | | | | | | Plans | | | | | | | | Employment Plans | | | | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | Present value of the DBO | | 1,194 | | 1,127 | | 667 | | 616 | | 216 | | 189 | | 2,077 | | 1,932 | | 949 | | 1,194 | | 577 | | 667 | | 211 | | 217 | | 1,737 | | 2,078 | Fair value of the plan assets | | 1,183 | | 1,112 | | 578 | | 506 | | 91 | | 73 | | 1,852 | | 1,691 | | 953 | | 1,183 | | 579 | | 578 | | 91 | | 91 | | 1,623 | | 1,852 | Net defined benefit liability (asset) | | 11 | | 15 | | 89 | | 110 | | 125 | | 116 | | 225 | | 241 | | Net defined benefit liability (asset)1 | | | 0 | | 11 | | 57 | | 89 | | 120 | | 126 | | 177 | | 226 | | | | | | | | | | | | | | | | | | | Net defined benefit liability (asset) as % of: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | / Non-current other financial assets | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | / Non-current provisions | | 3 | | 4 | | 27 | | 31 | | 35 | | 32 | | 65 | | 66 | | 0 | | 3 | | 20 | | 27 | | 33 | | 35 | | 54 | | 65 |
¹ After the effects of the asset ceiling Of the present value of the DBO of our domestic plans, €1,125€899 million (2020: €1,054(2021: €1,125 million) relate to plans that provide for lump-sum payments not based on final salary; of the present value of the DBO of our foreign plans, €524€448 million (2020: €479(2021: €524 million) relate to plans that provide for annuity payments not based on final salary. The following significant weighted average assumptions were used for the actuarial valuation of our domestic and foreign pension liabilities as well as other post-employment benefit obligations as at the respective measurement date: Significant Actuarial Assumptions | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Percent | | Domestic Plans | | Foreign Plans | | Other Foreign Post-Employment Plans | | Domestic Plans | | Foreign Plans | | Other Foreign Post-Employment Plans | | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | | 2022 | | 2021 | | 2020 | | 2022 | | 2021 | | 2020 | Discount rate | | 1.2 | | 0.9 | | 0.8 | | 0.5 | | 0.4 | | 0.3 | | 3.1 | | 3.0 | | 3.7 | | 4.2 | | 1.2 | | 0.9 | | 2.6 | | 0.5 | | 0.4 | | 5.5 | | 3.1 | | 3.0 |
The sensitivity analysis table below shows how the present value of all defined benefit obligations would have been influenced by reasonably possible changes to significant actuarial assumptions. The sensitivity analysis considers change in discount rate assumptions, holding all other actuarial assumptions constant. Sensitivity Analysis | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | Domestic Plans | | Foreign Plans | | Other Foreign Post-Employment Plans | | Total | | Domestic Plans | | Foreign Plans | | Other Foreign Post-Employment Plans | | Total | | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | | 2022 | | 2021 | | 2020 | | 2022 | | 2021 | | 2020 | | 2022 | | 2021 | | 2020 | Present value of all defined benefit obligations if: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discount rate was 50 basis points higher | | 1,134 | | 1,066 | | 968 | | 626 | | 573 | | 495 | | 203 | | 185 | | 154 | | 1,964 | | 1,824 | | 1,617 | | 908 | | 1,134 | | 1,066 | | 505 | | 626 | | 573 | | 203 | | 203 | | 185 | | 1,616 | | 1,964 | | 1,824 | Discount rate was 50 basis points lower | | 1,260 | | 1,195 | | 1,090 | | 714 | | 663 | | 576 | | 223 | | 204 | | 159 | | 2,196 | | 2,062 | | 1,825 | | 993 | | 1,260 | | 1,195 | | 562 | | 714 | | 663 | | 219 | | 223 | | 204 | | 1,774 | | 2,196 | | 2,062 |
Investments in Plan Assets Our investment strategy on domestic benefit plans is to invest all contributions in stable insurance policies. Our investment strategies for foreign benefit plans vary according to the conditions in the country in which the respective benefit plans are situated. We have adopted a long-term investment horizon for all major foreign benefit plans. Although our policy is to invest in a risk-diversified portfolio consisting of a mix of assets, both the defined benefit obligation and plan assets can fluctuate over time, which exposes the Group to actuarial and market (investment) risks. Depending on the statutory requirements in each country, it might be necessary to reduce any underfunding by addition of liquid assets. Plan Asset Allocation | | | | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | | | Quoted in an | | Not Quoted in an | | Quoted in an | | Not Quoted in an | | Quoted in an | | Not Quoted in an | | Quoted in an | | Not Quoted in an | | | Active Market | | Active Market | | Active Market | | Active Market | | Active Market | | Active Market | | Active Market | | Active Market | Total plan assets | | 597 | | 1,254 | | 485 | | 1,207 | | 611 | | 1,012 | | 597 | | 1,254 | Thereof: Asset category | | | | | | | | | | | | | | | | | Equity investments | | 182 | | 0 | | 149 | | 0 | | 170 | | 0 | | 182 | | 0 | Corporate bonds | | 202 | | 0 | | 151 | | 0 | | 190 | | 0 | | 202 | | 0 | Insurance policies | | 39 | | 1,254 | | 7 | | 1,207 | | 41 | | 1,012 | | 39 | | 1,254 |
Our expected contribution in 20222023 to our domestic and foreign defined benefit pension plans is immaterial. The weighted duration of our defined benefit plans amounted to 10 years as at December 31, 2022, and 11 years as at December 31, 2021, and 12 years as at December 31, 2020.2021. Total future benefit payments from our defined benefit plans as at December 31, 2021,2022, are expected to be €2,289€2,404 million (2020: €1,969(2021: €2,289 million). Of this amount, 77% (2020:76% (2021: 77%) hashave maturities of over five years, and 61% (2021: 62% (2020: 64%) relatesrelate to domestic plans. (B.5) Other Employee-Related Obligations (B.5) Other Employee-Related Obligations
y Accounting Policy | As far as the obligation for long-term employee benefits is secured by pledged reinsurance coverage, it is offset with the relating plan asset. |
Other Employee-Related Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | Other employee-related liabilities | | 3,717 | | 398 | | 4,115 | | 3,147 | | 316 | | 3,464 | | 3,632 | | 426 | | 4,058 | | 3,717 | | 398 | | 4,115 | / Other non-financial liabilities | | 5,203 | | 860 | | 6,063 | | 4,643 | | 770 | | 5,413 | | 4,818 | | 705 | | 5,523 | | 5,203 | | 860 | | 6,063 | Other employee-related liabilities as % of / Other non-financial liabilities | | 71 | | 46 | | 68 | | 68 | | 41 | | 64 | | 75 | | 60 | | 73 | | 71 | | 46 | | 68 |
Other employee-related liabilities mainly relate to obligations from bonuses and sales commissions, outstanding vacation, time credits accumulated in the working time account, employee-related social security expenses, severance payments outside restructuring programs, and jubilee expenses.
(B.6) Restructuring y Recognition of Restructuring Provisions | | We only recognize provisions for restructuring if and when the following occurs: - SAP has designed a program that materially changes the scope of one of our businesses or the manner in which the business is conducted, and - A detailed and documented restructuring plan has been approved by our Executive Board, a member thereof, or a direct report of an Executive Board member, and - The program established is planned to start shortly after the program plan is approved and is expected to be completed in a timeframe that makes significant changes to the plan unlikely, and - The program has been announced to the parties affected or has commenced. We consider whether a change in business is material based on the business affected rather than for SAP as a whole. In judging whether a unit qualifies as a business for restructuring purposes, we consider if the unit has its own management team, has access to all inputs and processes necessary to provide outputs, and generates or could generate revenues. The materiality of a change to a business is assessed based on both the size and the nature of the change and therefore does not necessarily involve a material quantitative impact on our financial statements.
|
To accelerate the modernization of our cloud infrastructure and to harmonize our platform structure, we initiated a restructuring program in the Global Cloud Services area. The implementation started in the first quarter of 2021 and is expected to conclude in the first half of 2023. The majority of the expenses recognized as a result of this program are impairments of data centers and related assets.
Restructuring expenses presented in SAP’s income statement primarily include the following components:
Restructuring Expenses | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Employee-related restructuring expenses | | -25 | | 7 | | -1,111 | | -85 | | -25 | | 7 | Onerous contract-related restructuring expenses and restructuring-related impairment losses | | -132 | | -4 | | -19 | | -52 | | -132 | | -4 | Restructuring expenses | | -157 | | 3 | | -1,130 | | -138 | | -157 | | 3 |
Most of the restructuring expenses presented in 2022 relate to the wind-down of business in Russia and Belarus. Restructuring costs are mainly comprised of severance payments to employees, impairments of right-of-use assets for office buildings, impairments of data center equipment, and write-offs of capitalized sales commissions. The restructuring costs presented in 2021 mainly include expenses related to the accelerated harmonization of SAP’s cloud infrastructure and platforms. If not presented separately in our income statement, restructuring expenses would have been classified in the different expense items in our income statement as follows: Restructuring Expenses by Functional Area | | | | | | | € millions | | 2021 | | 2020 | | 2019 | Cost of cloud | | -127 | | 0 | | -20 | Cost of software licenses and support | | -5 | | 1 | | -118 | Cost of services | | -13 | | -3 | | -154 | Research and development | | -12 | | 1 | | -467 | Sales and marketing | | 3 | | 3 | | -299 | General and administration | | -2 | | 2 | | -71 | Restructuring expenses | | -157 | | 3 | | -1,130 |
| | | | | | | € millions | | 2022 | | 2021 | | 2020 | Cost of cloud | | 20 | | -127 | | 0 | Cost of software licenses and support | | -9 | | -5 | | 1 | Cost of services | | -70 | | -13 | | -3 | Research and development | | -16 | | -12 | | 1 | Sales and marketing | | -58 | | 3 | | 3 | General and administration | | -4 | | -2 | | 2 | Restructuring expenses | | -138 | | -157 | | 3 |
Section C — Financial Results This section provides insight into the financial results of SAP's reportable segments and of SAP overall as far as not already covered by previous sections. This includes but is not limited to segment results, income taxes, and earnings per share. (C.1) Results of Segments General Information At year end 2021,2022, SAP had 5seven operating segments that are regularly reviewed by the Executive Board, which is responsible for assessing the performance of the Company and for making resource allocation decisions as our chief operating decision-maker (CODM). The operating segments are largely organized and managed separately according to their product and service offerings, notably whetherofferings. The Applications, Technology & Services segment and the productsQualtrics segment are reportable segments. The Services segment was dissolved and services relate to our services activities, experience management solutions, business process transformation offerings, or our customer experience portfolio of Emarsys, or cover other activities of our business. Following organizational changes, and to further strengthen our cloud offerings and support the new cloud strategy, functions related to SAP’s travel management solutions in the Concur segment were mainly integrated into the former Applications, Technology & Support segment and the Services segment. Hence, the Concur segmentwhich was dissolved.
therefore re-named to Applications, Technology & Services. The Applications, Technology & SupportServices segment derives its revenues primarily from the sale of software licenses, support offerings, and cloud subscriptions (as far as notsubscriptions. Marketing costs that we primarily incur for product and solution-specific activities in the Applications, Technology & Services segment were included in onethe results of the other segments).this segment and are no longer allocated to SAP’s corporate functions. The Services segment covers most of SAP’s services activities. Revenues are mainly generated from the sale of various professional services, premium support services, implementation services for our software products, and education services on the use of our products. However, the services segment does not reflect the full services business, as other segments provide services as well.
In 2021, the finance and legal functions of Qualtrics were reintegrated into the Qualtrics segment. Additionally, the Clarabridge business, acquired by Qualtrics International Inc. in October 2021, was added to the Qualtrics segment accordingly (for more information, see Note (D.1)). The Qualtrics segment derives its revenues mainly from the sale of experience management cloud solutions that run front-office functions across experience data, and from the sale of related services. The figures of the Qualtrics segment of SAP and the financial results of Qualtrics International Inc. cannot be compared, notably due to different accounting standards.
Due to their size, the following segments are non-reportable: -The financeBusiness Process Intelligence segment was renamed to SAP Signavio without changing the composition of this segment. The segment derives its revenues from the sale of business process transformation offerings from SAP and information technology functions of theSignavio, a company acquired by SAP in 2021. - The Emarsys segment have already been integrated into SAP’s corporate functions and therefore their expenses are not included in the Emarsys segment anymore. All other functions are still included in the Emarsys segment, which derives its revenues mainly from the sale of cloud-based customer experience offerings and from the sale of related services. Due to its size, Emarsys is not a reportable segment. The- In the first quarter of 2022, the acquisition of Signavio GmbH, combined with our business process intelligence unit,Taulia, a leading provider of working capital management solutions, led to a new operating segment called Business Process Intelligence. The segment derives its revenues from the sale of business process transformation offerings from SAP and Signavio. Due to its size, Business Process Intelligence is not a reportable segment. For more information about thethis acquisition, of Signavio GmbH, see Note (D.1).
.- Following organizational changes, we established two new operating segments, the Business Network segment and the Sustainability segment, in the third quarter of 2022:
- The Business Network segment combines SAP’s network offerings, covering procurement, logistics, asset management, and industry-specific solutions spanning end-to-end value chains. The segment generates revenues from cloud application subscriptions, transactional fees, and services. - The Sustainability segment bundles a portfolio of sustainability-related solutions that enables SAP’s customers to record and report financial and non-financial metrics and act on improving their sustainability footprint across all ESG (Environmental, Social, and Governance) dimensions. The segment information for 20212022 and the comparative prior periods were restated to conform with the new segment composition. y Segment Reporting Policies | | Our management reporting system, and hence our segment reporting system, reports our intersegment services as cost reductions and does not track them as internal revenue. Intersegment services mainly represent utilization of human resources of one segment by another segment on a project basis. Intersegment services are charged based on internal cost rates including certain indirect overhead costs but excluding a profit margin. Most of our depreciation and amortization expense affecting segment profits is allocated to the segments as part of broader infrastructure allocations and is thus not tracked separately on the operating segment level. Depreciation and amortization expense that is directly allocated to the operating segments is immaterial in all segments presented. Our management reporting system produces a variety of reports that differ by the currency exchange rates used in the accounting for foreign-currency transactions and operations, where both actual and constant currency numbers are reported to and used by our CODM. Reports based on actual currencies use the same currency rates as are used in our financial statements. Reports based on constant currencies report revenues and expenses using the average exchange rates from the previous year’s corresponding period. We use an operating profit indicator to measure the performance of our operating segments. The measurement of operating segment revenues and results includes recurring revenue that is not recognized under IFRS due to fair value accounting for the contracts in effect at the time of the respective acquisitions. Starting in 2021, we no longer adjust our IFRS revenues. Due to immateriality, prior year revenue numbers continue to be based on our previous accounting policies. The accounting policies applied in the measurement of operating segment expenses and profit continue to differ as follows from the IFRS accounting principles used to determine the operating profit measure in our income statement: -The expense measures exclude:
◾-
Acquisition-related charges such as amortization expense and impairment charges for intangibles acquired in business combinations and certain stand-alone acquisitions of intellectual property (including purchased in-process research and development) as well as sale/disposal gains and losses for these intangibles, settlements of pre-existing business relationships in connection with a business combination, and acquisition-related third-party expenses ◾-
Share-based payment expenses -SAP headquarter functions which are exclusively managed on corporate level, such as finance, accounting, legal, human resources, global business operations, and corporate marketing, are not included in the results of our reportable segments.
Revenues and expenses of our operating but non-reportable segments, and the certain activities managed on corporate level, as outlined above, are presented under the Other revenue and Other expenses items in the reconciliation in Note (C.2). Information about assets and liabilities and additions to non-current assets by segment are not regularly provided to our Executive Board. Goodwill by segment is disclosed in Note (D.2). |
Applications, Technology & SupportServices | | | | | | | | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | | | Actual | | Constant | | Actual | | Constant | | Actual | | Actual | | Constant | | Actual | | Constant | | Actual | | | Currency | | Currency1 | | Currency | | Currency1 | | Currency | | Currency | | Currency1 | | Currency | | Currency1 | | Currency | Cloud | | 8,509 | | 8,661 | | 7,541 | | 7,685 | | 6,632 | | 10,239 | | 9,573 | | 7,835 | | 7,970 | | 6,940 | Software licenses | | 3,244 | | 3,236 | | 3,637 | | 3,765 | | 4,523 | | 2,053 | | 1,969 | | 3,244 | | 3,236 | | 3,637 | Software support | | 11,410 | | 11,576 | | 11,502 | | 11,707 | | 11,542 | | 11,906 | | 11,361 | | 11,410 | | 11,575 | | 11,506 | Software licenses and support | | 14,654 | | 14,812 | | 15,139 | | 15,473 | | 16,065 | | 13,959 | | 13,330 | | 14,654 | | 14,812 | | 15,143 | Cloud and software | | 23,163 | | 23,473 | | 22,680 | | 23,157 | | 22,696 | | 24,198 | | 22,904 | | 22,488 | | 22,782 | | 22,083 | Services | | 339 | | 343 | | 285 | | 289 | | 355 | | 4,100 | | 3,868 | | 3,565 | | 3,618 | | 3,659 | Total segment revenue | | 23,502 | | 23,816 | | 22,965 | | 23,446 | | 23,051 | | 28,298 | | 26,772 | | 26,054 | | 26,400 | | 25,742 | Cost of cloud | | -2,685 | | -2,737 | | -2,315 | | -2,371 | | -2,147 | | -3,434 | | -3,153 | | -2,754 | | -2,807 | | -2,367 | Cost of software licenses and support | | -1,716 | | -1,733 | | -1,757 | | -1,790 | | -1,910 | | -1,623 | | -1,540 | | -1,736 | | -1,754 | | -1,795 | Cost of cloud and software | | -4,401 | | -4,470 | | -4,071 | | -4,161 | | -4,057 | | -5,057 | | -4,693 | | -4,490 | | -4,561 | | -4,162 | Cost of services | | -406 | | -412 | | -393 | | -399 | | -421 | | -2,849 | | -2,702 | | -2,449 | | -2,482 | | -2,616 | Total cost of revenue | | -4,808 | | -4,882 | | -4,464 | | -4,560 | | -4,478 | | -7,906 | | -7,395 | | -6,939 | | -7,043 | | -6,778 | Segment gross profit | | 18,694 | | 18,934 | | 18,500 | | 18,887 | | 18,573 | | 20,391 | | 19,376 | | 19,114 | | 19,357 | | 18,963 | Other segment expenses | | -9,127 | | -9,216 | | -8,779 | | -8,953 | | -8,800 | | -11,585 | | -10,921 | | -9,830 | | -9,924 | | -9,551 | Segment profit | | 9,567 | | 9,718 | | 9,722 | | 9,934 | | 9,773 | | 8,806 | | 8,456 | | 9,284 | | 9,434 | | 9,412 |
1 The 2022 constant currency amounts are only comparable to 2021 actual currency amounts; 2021 constant currency amounts are only comparable to 2020 actual currency amounts; 2020 constant currency amounts are only comparable to 2019 actual currency amounts. Qualtrics
| | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | | Actual | | Constant | | Actual | | Constant | | Actual | | | Currency | | Currency1 | | Currency | | Currency1 | | Currency | Cloud | | 757 | | 780 | | 518 | | 529 | | 371 | Cloud and software | | 757 | | 780 | | 518 | | 529 | | 371 | Services | | 172 | | 177 | | 162 | | 166 | | 137 | Total segment revenue | | 929 | | 957 | | 681 | | 696 | | 508 | Cost of cloud | | -65 | | -66 | | -43 | | -43 | | -33 | Cost of software licenses and support | | 0 | | 0 | | 0 | | 0 | | 0 | Cost of cloud and software | | -65 | | -66 | | -43 | | -43 | | -33 | Cost of services | | -125 | | -128 | | -110 | | -112 | | -78 | Total cost of revenue | | -190 | | -194 | | -152 | | -155 | | -110 | Segment gross profit | | 739 | | 763 | | 528 | | 541 | | 398 | Other segment expenses | | -696 | | -719 | | -533 | | -545 | | -407 | Segment profit | | 44 | | 44 | | -4 | | -5 | | -9 |
1 The 2021 constant currency amounts are only comparable to 2020 actual currency amounts; 2020 constant currency amounts are only comparable to 2019 actual currency amounts.
Services
| | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | | Actual | | Constant | | Actual | | Constant | | Actual | | | Currency | | Currency1 | | Currency | | Currency1 | | Currency | Cloud | | 0 | | 0 | | 0 | | 1 | | 0 | Software licenses | | 0 | | 0 | | 0 | | 0 | | 0 | Software support | | 0 | | 0 | | 4 | | 4 | | 5 | Software licenses and support | | 0 | | 0 | | 4 | | 4 | | 5 | Cloud and software | | 0 | | 0 | | 5 | | 5 | | 5 | Services | | 3,234 | | 3,282 | | 3,374 | | 3,428 | | 3,674 | Total segment revenue | | 3,234 | | 3,283 | | 3,379 | | 3,432 | | 3,679 | Cost of cloud | | -78 | | -80 | | -74 | | -76 | | -62 | Cost of software licenses and support | | -18 | | -19 | | -32 | | -33 | | -54 | Cost of cloud and software | | -97 | | -99 | | -106 | | -109 | | -116 | Cost of services | | -2,035 | | -2,062 | | -2,209 | | -2,254 | | -2,579 | Total cost of revenue | | -2,131 | | -2,161 | | -2,315 | | -2,363 | | -2,695 | Segment gross profit | | 1,102 | | 1,122 | | 1,063 | | 1,070 | | 983 | Other segment expenses | | -375 | | -379 | | -418 | | -427 | | -466 | Segment profit | | 728 | | 743 | | 645 | | 642 | | 517 |
1 The 2021 constant currency amounts are only comparable to 2020 actual currency amounts; 2020 constant currency amounts are only comparable to 2019 actual currency amounts.
Qualtrics | | | | | | | | | | | € millions | | 2022 | | 2021 | | 2020 | | | Actual | | Constant | | Actual | | Constant | | Actual | | | Currency | | Currency1 | | Currency | | Currency1 | | Currency | Cloud | | 1,198 | | 1,071 | | 757 | | 780 | | 518 | Cloud and software | | 1,198 | | 1,071 | | 757 | | 780 | | 518 | Services | | 225 | | 200 | | 173 | | 178 | | 162 | Total segment revenue | | 1,423 | | 1,271 | | 930 | | 957 | | 681 | Cost of cloud | | -133 | | -120 | | -65 | | -66 | | -43 | Cost of software licenses and support | | 0 | | 0 | | 0 | | 0 | | 0 | Cost of cloud and software | | -133 | | -120 | | -65 | | -66 | | -43 | Cost of services | | -182 | | -164 | | -125 | | -128 | | -110 | Total cost of revenue | | -315 | | -284 | | -190 | | -194 | | -152 | Segment gross profit | | 1,108 | | 986 | | 740 | | 764 | | 528 | Other segment expenses | | -1,013 | | -882 | | -696 | | -719 | | -533 | Segment profit | | 95 | | 104 | | 44 | | 44 | | -4 |
1 The 2022 constant currency amounts are only comparable to 2021 actual currency amounts; 2021 constant currency amounts are only comparable to 2020 actual currency amounts. Segment Revenue by Region | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | EMEA | | Americas | | APJ | | Total Segment Revenue | | EMEA | | Americas | | APJ | | Total Segment Revenue | | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | | | Actual | | Constant | | Actual | | Actual | | Constant | | Actual | | Actual | | Constant | | Actual | | Actual | | Constant | | Actual | | Actual | | Constant | | Actual | | Actual | | Constant | | Actual | | Actual | | Constant | | Actual | | Actual | | Constant | | Actual | | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | | Currency | Applications, Technology & Support | | 10,902 | | 10,900 | | 10,437 | | 8,862 | | 9,116 | | 8,907 | | 3,737 | | 3,799 | | 3,621 | | 23,502 | | 23,816 | | 22,965 | | Applications, Technology & Services | | | 12,507 | | 12,280 | | 12,209 | | 11,531 | | 10,319 | | 9,780 | | 4,259 | | 4,173 | | 4,064 | | 28,298 | | 26,772 | | 26,054 | Qualtrics | | 153 | | 157 | | 97 | | 690 | | 711 | | 528 | | 86 | | 89 | | 55 | | 929 | | 957 | | 681 | | 218 | | 198 | | 153 | | 1,087 | | 967 | | 690 | | 117 | | 105 | | 87 | | 1,423 | | 1,271 | | 930 | Services | | 1,458 | | 1,455 | | 1,479 | | 1,370 | | 1,414 | | 1,491 | | 406 | | 414 | | 408 | | 3,234 | | 3,283 | | 3,379 | | Total reportable segments | | 12,513 | | 12,512 | | 12,013 | | 10,922 | | 11,242 | | 10,927 | | 4,230 | | 4,302 | | 4,084 | | 27,665 | | 28,055 | | 27,024 | | 12,725 | | 12,478 | | 12,362 | | 12,619 | | 11,286 | | 10,471 | | 4,376 | | 4,278 | | 4,151 | | 29,720 | | 28,042 | | 26,984 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | EMEA | | Americas | | APJ | | Total Segment Revenue | | EMEA | | Americas | | APJ | | Total Segment Revenue | | | | | 2020 | | 2019 | | | | 2020 | | 2019 | | | | 2020 | | 2019 | | | | 2020 | | 2019 | | | | 2021 | | 2020 | | | | 2021 | | 2020 | | | | 2021 | | 2020 | | | | 2021 | | 2020 | | | Actual
Currency | | Constant
Currency | | Actual
Currency | | Actual
Currency | | Constant
Currency | | Actual
Currency | | Actual
Currency | | Constant
Currency | | Actual
Currency | | Actual
Currency | | Constant
Currency | | Actual
Currency | | Actual
Currency | | Constant
Currency | | Actual
Currency | | Actual
Currency | | Constant
Currency | | Actual
Currency | | Actual
Currency | | Constant
Currency | | Actual
Currency | | Actual
Currency | | Constant
Currency | | Actual
Currency | Applications, Technology & Support | | 10,437 | | 10,549 | | 10,306 | | 8,907 | | 9,200 | | 9,066 | | 3,621 | | 3,698 | | 3,679 | | 22,965 | | 23,446 | | 23,051 | | Applications, Technology & Services | | | 12,209 | | 12,206 | | 11,800 | | 9,780 | | 10,062 | | 9,986 | | 4,064 | | 4,132 | | 3,956 | | 26,054 | | 26,400 | | 25,742 | Qualtrics | | 97 | | 99 | | 68 | | 528 | | 540 | | 403 | | 55 | | 56 | | 37 | | 681 | | 696 | | 508 | | 153 | | 157 | | 97 | | 690 | | 711 | | 528 | | 87 | | 89 | | 55 | | 930 | | 957 | | 681 | Services | | 1,479 | | 1,491 | | 1,568 | | 1,491 | | 1,527 | | 1,621 | | 408 | | 415 | | 490 | | 3,379 | | 3,432 | | 3,679 | | Total reportable segments | | 12,013 | | 12,139 | | 11,942 | | 10,927 | | 11,267 | | 11,089 | | 4,084 | | 4,169 | | 4,207 | | 27,024 | | 27,574 | | 27,238 | | 12,362 | | 12,363 | | 11,898 | | 10,471 | | 10,773 | | 10,514 | | 4,151 | | 4,221 | | 4,011 | | 26,984 | | 27,357 | | 26,422 |
For a breakdown of revenue by region for the SAP Group, see Note (A.1). (C.2) Reconciliation of Segment Measures to the Consolidated Income Statements | | | | | | | | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | | | Actual | | Constant | | Actual | | Constant | | Actual | | Actual | | Constant | | Actual | | Constant | | Actual | | | Currency | | Currency1 | | Currency | | Currency1 | | Currency | | Currency | | Currency1 | | Currency | | Currency1 | | Currency | Applications, Technology & Support | | 23,502 | | 23,816 | | 22,965 | | 23,446 | | 23,051 | | Services | | 3,234 | | 3,283 | | 3,379 | | 3,432 | | 3,679 | | Applications, Technology & Services | | | 28,298 | | 26,772 | | 26,054 | | 26,400 | | 25,742 | Qualtrics | | 929 | | 957 | | 681 | | 696 | | 508 | | 1,423 | | 1,271 | | 930 | | 957 | | 681 | Total segment revenue for reportable segments | | 27,665 | | 28,055 | | 27,024 | | 27,574 | | 27,238 | | 29,720 | | 28,042 | | 26,984 | | 27,357 | | 26,422 | Other revenue | | 177 | | 177 | | 319 | | 322 | | 396 | | 1,150 | | 1,067 | | 859 | | 875 | | 921 | Adjustment for currency impact | | 0 | | -390 | | 0 | | -554 | | 0 | | 0 | | 1,762 | | 0 | | -390 | | 0 | Adjustment of revenue under fair value accounting | | 0 | | 0 | | -5 | | -5 | | -81 | | 0 | | 0 | | 0 | | 0 | | -5 | Total revenue | | 27,842 | | 27,842 | | 27,338 | | 27,338 | | 27,553 | | 30,871 | | 30,871 | | 27,842 | | 27,842 | | 27,338 | | | | | | | | | | | | | Applications, Technology & Support | | 9,567 | | 9,718 | | 9,722 | | 9,934 | | 9,773 | | Services | | 728 | | 743 | | 645 | | 642 | | 517 | | Applications, Technology & Services | | | 8,806 | | 8,456 | | 9,284 | | 9,434 | | 9,412 | Qualtrics | | 44 | | 44 | | -4 | | -5 | | -9 | | 95 | | 104 | | 44 | | 44 | | -4 | Total segment profit for reportable segments | | 10,339 | | 10,505 | | 10,363 | | 10,571 | | 10,281 | | 8,902 | | 8,560 | | 9,329 | | 9,478 | | 9,408 | Other revenue | | 177 | | 177 | | 319 | | 322 | | 396 | | 1,150 | | 1,067 | | 859 | | 875 | | 921 | Other expenses | | -2,286 | | -2,274 | | -2,395 | | -2,390 | | -2,469 | | -2,020 | | -1,944 | | -1,958 | | -1,945 | | -2,041 | Adjustment for currency impact | | 0 | | -178 | | 0 | | -216 | | 0 | | 0 | | 350 | | 0 | | -178 | | 0 | Adjustment for | | | | | | | | | | | | | | | | | | | | | Revenue under fair value accounting | | 0 | | 0 | | -5 | | -5 | | -81 | | 0 | | 0 | | 0 | | 0 | | -5 | Acquisition-related charges | | -623 | | -623 | | -577 | | -577 | | -689 | | -610 | | -610 | | -622 | | -622 | | -577 | Share-based payment expenses | | -2,794 | | -2,794 | | -1,084 | | -1,084 | | -1,835 | | -2,614 | | -2,614 | | -2,794 | | -2,794 | | -1,084 | Restructuring | | -157 | | -157 | | 3 | | 3 | | -1,130 | | -138 | | -138 | | -157 | | -157 | | 3 | Operating profit | | 4,656 | | 4,656 | | 6,623 | | 6,623 | | 4,473 | | 4,670 | | 4,670 | | 4,656 | | 4,656 | | 6,623 | Other non-operating income/expense, net | | 17 | | 17 | | -179 | | -179 | | -74 | | -195 | | -195 | | 17 | | 17 | | -179 | Financial income, net | | 2,174 | | 2,174 | | 776 | | 776 | | 198 | | -1,385 | | -1,385 | | 2,174 | | 2,174 | | 776 | Profit before tax | | 6,847 | | 6,847 | | 7,220 | | 7,220 | | 4,596 | | 3,090 | | 3,090 | | 6,847 | | 6,847 | | 7,220 |
1 The 2022 constant currency amounts are only comparable to 2021 actual currency amounts; 2021 constant currency amounts are only comparable to 2020 actual currency amounts; 2020 constant currency amounts are only comparable to 2019 actual currency amounts. (C.3) Other Non-Operating Income/Expense, Net | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Foreign currency exchange gain/loss, net | | 49 | | -154 | | -51 | | -151 | | 49 | | -154 | Thereof from financial assets at fair value through profit or loss | | 316 | | 601 | | 358 | | 515 | | 316 | | 601 | Thereof from financial assets at amortized cost | | 111 | | -134 | | 194 | | 218 | | 111 | | -134 | Thereof from financial liabilities at fair value through profit or loss | | -382 | | -487 | | -396 | | -766 | | -382 | | -487 | Thereof from financial liabilities at amortized cost | | -70 | | -34 | | -176 | | -95 | | -70 | | -34 | Miscellaneous income/expense, net | | -33 | | -25 | | -23 | | -44 | | -33 | | -25 | Other non-operating income/expense, net | | 17 | | -179 | | -74 | | -195 | | 17 | | -179 |
(C.4) Financial Income, Net | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Finance income | | 3,123 | | 1,473 | | 787 | | 820 | | 3,123 | | 1,473 | Thereof gains from financial assets at fair value through profit or loss | | 3,067 | | 1,360 | | 596 | | 608 | | 3,067 | | 1,360 | Finance costs | | -949 | | -697 | | -589 | | -2,205 | | -949 | | -697 | Thereof losses from financial assets at fair value through profit or loss | | -654 | | -342 | | -151 | | -1,802 | | -654 | | -342 | Thereof interest expense from financial liabilities at amortized cost | | -160 | | -179 | | -207 | | -208 | | -160 | | -179 | Thereof interest expense from financial liabilities at fair value through profit or loss | | -50 | | -76 | | -155 | | -69 | | -50 | | -76 | Financial income, net | | 2,174 | | 776 | | 198 | | -1,385 | | 2,174 | | 776 |
(C.5) Income Taxes | y Judgments and Estimates | | We are subject to changing tax laws in multiple jurisdictions within the countries in which we operate. Our ordinary business activities also include transactions where the ultimate tax outcome is uncertain due to different interpretations of tax laws, such as those involving transfer pricing and intercompany transactions between SAP Group entities. In addition, the amount of income taxes we pay is generally subject to ongoing audits by domestic and foreign tax authorities. In determining our worldwide income tax provisions, judgment is involved in assessing whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments and whether to reflect the respective effect of uncertainty based on the most likely amount or the expected value. In applying these judgments, we consider the nature and the individual facts and circumstances of each uncertain tax treatment as well as the specifics of the respective jurisdiction, including applicable tax laws and our interpretation thereof. The assessment whether a deferred tax asset is impaired requires judgment, as we need to estimate future taxable profits to determine whether the utilization of the deferred tax asset is probable. In evaluating our ability to utilize our deferred tax assets, we consider all available positive and negative evidence, including the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable. Our judgment regarding future taxable income is based on assumptions about future market conditions and future profits of SAP. Judgment is also required in evaluating whether interest or penalties related to income taxes meet the definition of income taxes, and, if not, whether it is of financial nature. In this judgment, we particularly consider applicable local tax laws and interpretations on IFRS by national standard setters in the area of group financial reporting. |
Tax Expense by Geographic Location | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Current tax expense | | | | | | | | | | | | | Germany | | 608 | | 895 | | 625 | | 539 | | 608 | | 895 | Foreign | | 1,360 | | 1,001 | | 1,153 | | 1,195 | | 1,360 | | 1,001 | Total current tax expense | | 1,968 | | 1,896 | | 1,778 | | 1,734 | | 1,968 | | 1,896 | Deferred tax expense/income | | | | | | | | | | | | | Germany | | 109 | | -38 | | -3 | | 89 | | 109 | | -38 | Foreign | | -606 | | 80 | | -549 | | -441 | | -606 | | 80 | Total deferred tax expense/income | | -497 | | 42 | | -552 | | -352 | | -497 | | 42 | Total income tax expense | | 1,471 | | 1,938 | | 1,226 | | 1,382 | | 1,471 | | 1,938 |
Major Components of Tax Expense | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Current tax expense/income | | | | | | | | | | | | | Tax expense for current year | | 1,707 | | 1,653 | | 1,818 | | 1,746 | | 1,707 | | 1,653 | Taxes for prior years | | 261 | | 243 | | -40 | | -12 | | 261 | | 243 | Total current tax expense | | 1,968 | | 1,896 | | 1,778 | | 1,734 | | 1,968 | | 1,896 | Deferred tax expense/income | | | | | | | | | | | | | Origination and reversal of temporary differences | | -526 | | 47 | | -710 | | -313 | | -526 | | 47 | Unused tax losses, research and development tax credits, and foreign tax credits | | 29 | | -5 | | 158 | | -39 | | 29 | | -5 | Total deferred tax expense/income | | -497 | | 42 | | -552 | | -352 | | -497 | | 42 | Total income tax expense | | 1,471 | | 1,938 | | 1,226 | | 1,382 | | 1,471 | | 1,938 |
Total deferred tax expense/income includes a benefit of €124 million (2021: €15 million; 2020: €4 million) arising from previously unrecognized tax losses and temporary differences. Profit Before Tax by Geographic Location | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Germany | | 2,040 | | 2,481 | | 2,012 | | 1,785 | | 2,040 | | 2,481 | Foreign | | 4,807 | | 4,739 | | 2,584 | | 1,305 | | 4,807 | | 4,739 | Total | | 6,847 | | 7,220 | | 4,596 | | 3,090 | | 6,847 | | 7,220 |
The following table reconciles the expected income tax expense, computed by applying our combined German tax rate of 26.4% (2020:(2021: 26.4%; 2020: 26.3%; 2019: 26.4%), to the actual income tax expense. Our 20212022 combined German tax rate includes a corporate income tax rate of 15.0% (2020:(2021: 15.0%; 2019:2020: 15.0%), plus a solidarity surcharge of 5.5% (2020:(2021: 5.5%; 2019:2020: 5.5%) thereon, and trade taxes of 10.6% (2020:(2021: 10.6%; 2020: 10.5%; 2019: 10.6%). Relationship Between Tax Expense and Profit Before Tax | | | | | | | € millions, unless otherwise stated | | 2021 | | 2020 | | 2019 | Profit before tax | | 6,847 | | 7,220 | | 4,596 | Tax expense at applicable tax rate of 26.4%
(2020: 26.3%; 2019: 26.4%) | | 1,808 | | 1,901 | | 1,212 | Tax effect of: | | | | | | | Foreign tax rates | | -126 | | -166 | | -171 | Non-deductible expenses | | 420 | | 254 | | 116 | Tax-exempt income | | -630 | | -282 | | -131 | Withholding taxes | | 204 | | 105 | | 138 | Research and development and foreign tax credits | | -75 | | -100 | | -89 | Prior-year taxes | | 9 | | 128 | | 80 | Reassessment of deferred tax assets, research and development tax credits, and foreign tax credits | | -34 | | 41 | | 48 | Other | | -105 | | 57 | | 23 | Total income tax expense | | 1,471 | | 1,938 | | 1,226 | Effective tax rate (in %) | | 21.5 | | 26.8 | | 26.7 |
| | | | | | | € millions, unless otherwise stated | | 2022 | | 2021 | | 2020 | Profit before tax | | 3,090 | | 6,847 | | 7,220 | Tax expense at applicable tax rate of 26.4%
(2021: 26.4%; 2020: 26.3%) | | 817 | | 1,808 | | 1,901 | Tax effect of: | | | | | | | Foreign tax rates | | -117 | | -126 | | -166 | Non-deductible expenses | | 431 | | 420 | | 254 | Tax-exempt income | | 297 | | -630 | | -282 | Withholding taxes | | 179 | | 204 | | 105 | Research and development and foreign tax credits | | -95 | | -75 | | -100 | Prior-year taxes | | 4 | | 9 | | 128 | Reassessment of deferred tax assets, research and development tax credits, and foreign tax credits | | -124 | | -34 | | 41 | Other | | -10 | | -105 | | 57 | Total income tax expense | | 1,382 | | 1,471 | | 1,938 | Effective tax rate (in %) | | 44.7 | | 21.5 | | 26.8 |
Components of Recognized Deferred Tax Assets and Liabilities | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | Deferred tax assets | | | | | | | | | Intangible assets | | 759 | | 455 | | 1,069 | | 759 | Property, plant, and equipment | | 19 | | 19 | | 27 | | 19 | Leases | | | 503 | | 472 | Other financial assets | | 14 | | 11 | | 23 | | 14 | Trade and other receivables | | 58 | | 115 | | 81 | | 58 | Pension provisions | | 196 | | 194 | | 203 | | 196 | Share-based payments | | 278 | | 197 | | 226 | | 278 | Other provisions and obligations | | 1,097 | | 1,155 | | 753 | | 625 | Contract liabilities | | 781 | | 631 | | 994 | | 781 | Carryforwards of unused tax losses | | 146 | | 123 | | 150 | | 148 | Research and development and foreign tax credits | | 77 | | 57 | | 110 | | 77 | Other | | 134 | | 108 | | 134 | | 139 | Total deferred tax assets | | 3,559 | | 3,065 | | Total deferred tax assets (gross) | | | 4,273 | | 3,566 | Netting | | | -2,208 | | -1,780 | Total deferred tax assets (net) | | | 2,065 | | 1,786 | Deferred tax liabilities | | | | | | | | | Intangible assets | | 903 | | 854 | | 835 | | 903 | Property, plant, and equipment | | 525 | | 529 | | 108 | | 120 | Leases | | | 437 | | 405 | Other financial assets | | 169 | | 239 | | 170 | | 169 | Trade and other receivables | | 206 | | 178 | | 269 | | 206 | Pension provisions | | 29 | | 21 | | 35 | | 29 | Share-based payments | | 1 | | 0 | | Other provisions and obligations | | 50 | | 87 | | 269 | | 50 | Contract liabilities | | 7 | | 4 | | 5 | | 7 | Other | | 181 | | 123 | | 321 | | 187 | Total deferred tax liabilities | | 2,071 | | 2,035 | | Total deferred tax assets, net | | 1,488 | | 1,030 | | Total deferred tax liabilities (gross) | | | 2,449 | | 2,076 | Netting | | | -2,208 | | -1,780 | Total deferred tax liabilities (net) | | | 241 | | 296 |
The increase in deferred tax assets for intangible assets mainly results from the capitalization of research and development expenses for tax purposes. Furthermore, the deferred tax assets for contract liabilities increased mainly because of deferred revenue. DeferredThe increase in deferred tax assetsliabilities for other provisions and obligations in the amountmainly results from financial debt.
Items Not Resulting in a Deferred Tax Asset | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Unused tax losses | | | | | | | | | | | | | Not expiring | | 430 | | 570 | | 688 | | 345 | | 430 | | 570 | Expiring in the following year | | 26 | | 25 | | 63 | | 14 | | 26 | | 25 | Expiring after the following year | | 309 | | 338 | | 373 | | 453 | | 309 | | 338 | Total unused tax losses | | 765 | | 933 | | 1,124 | | 812 | | 765 | | 933 | Deductible temporary differences | | 602 | | 587 | | 538 | | 378 | | 602 | | 587 | Unused research and development and foreign tax credits | | | | | | | | | | | | | Not expiring | | 28 | | 26 | | 28 | | 9 | | 28 | | 26 | Expiring after the following year | | 20 | | 17 | | 17 | | 20 | | 20 | | 17 | Total unused tax credits | | 48 | | 43 | | 45 | | 29 | | 48 | | 43 |
Of the unused tax losses, €294 million (2021: €183 million (2020:million; 2020: €179 million; 2019: €187 million)million) relate to U.S. state tax loss carryforwards. We have not recognized a deferred tax liability on approximately €24.04€28.91 billion (2020: €18.37(2021: €24.04 billion) for undistributed profits of our subsidiaries, because we are in a position to control the timing of the reversal of the temporary difference and it is probable that such differences will not reverse in the foreseeable future. Income Tax-Related Litigation We are subject to ongoing tax audits by domestic and foreign tax authorities. Currently, we are in dispute mainly with the German and only a few foreign tax authorities. The German dispute is in respect of certain secured capital investments, while the few foreign disputes are in respect of the deductibility of intercompany royalty payments and intercompany services. In all cases, we expect that a favorable outcome can only be achieved through litigation. For all of these matters, we have not recorded a provision as we believe that the tax authorities’ claims have no merit and that no adjustment is warranted. If, contrary to our view, the tax authorities were to prevail in their arguments before the court, we would expect to have an additional expense of approximately €1,283€1,571 million (2020: €1,221(2021: €1,283 million) in total (including related interest expenses and penalties of €677€857 million (2020: €648(2021: €677 million)). Reform of International Taxation Rules In October 2021, over 135 jurisdictions agreed on a new framework for the international tax system covering the re-allocation of taxing rights and the introduction of a global minimum corporate tax rate. OnIn December 20, 2021, the Organization for Economic Co-operation and Development (OECD) released model rules, which shall ensure that multinational enterprises with revenue above €750 million will be subject to a 15% minimum corporate tax rate. Based on this release, onIn December 22, 2021,2022, the Member States of the European Commission (EC) proposedUnion (EU) adopted a directive on a global minimum level of taxation for implementation withinmultinational enterprise groups and large-scale domestic groups in the EU. WeBy the end of 2023, this directive needs to be transposed into national law by the EU member states to be applicable for fiscal years beginning from December 31, 2023. Therefore, we cannot yet assess possible impacts for SAP, though we expect to be subject to such rules. However, since they still need to be implemented into national law and are expected to only apply starting 2023, we cannot yet assess possible impacts for SAP. (C.6) Earnings per Share | | | | | | | | | | | | | € millions, unless otherwise stated | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Profit attributable to equity holders of SAP SE | | 5,256 | | 5,145 | | 3,321 | | 2,284 | | 5,256 | | 5,145 | Issued ordinary shares1 | | 1,229 | | 1,229 | | 1,229 | | 1,229 | | 1,229 | | 1,229 | Effect of treasury shares1 | | -49 | | -46 | | -35 | | -58 | | -49 | | -46 | Weighted average shares outstanding, basic1 | | 1,180 | | 1,182 | | 1,194 | | 1,170 | | 1,180 | | 1,182 | Dilutive effect of share-based payments1 | | | 5 | | 0 | | 0 | Weighted average shares outstanding, diluted1 | | 1,180 | | 1,182 | | 1,194 | | 1,175 | | 1,180 | | 1,182 | Earnings per share, basic, attributable to equity holders of SAP SE (in €) | | 4.46 | | 4.35 | | 2.78 | | 1.95 | | 4.46 | | 4.35 | Earnings per share, diluted, attributable to equity holders of SAP SE (in €) | | 4.46 | | 4.35 | | 2.78 | | 1.94 | | 4.46 | | 4.35 |
1 Number of shares in millions Section D — Invested Capital This section highlights our non-current assets including investments that form the basis of our operating activities. Additions to invested capital include separate asset acquisitions or business combinations. Further, we disclose information about purchase obligations and capital contributions. (D.1) Business Combinations and Divestitures y Measuring Non-Controlling Interests and Allocation of Consideration Transferred | | We decide for each business combination whether to measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. We classify costs related to executing business combinations as general and administration expense. In our accounting for business combinations, judgment is required in determining whether an intangible asset is identifiable and whether it should be recorded separately from goodwill. Additionally, estimating the acquisition-date fair values of the identifiable assets acquired and liabilities assumed involves considerable judgment. The necessary measurements are based on information available on the acquisition date and are based on expectations and assumptions that have been deemed reasonable by management. These judgments, estimates, and assumptions can materially affect our financial position and profit for several reasons, including the following: – Fair values assigned to assets subject to depreciation and amortization affect the amounts of depreciation and amortization to be recorded in operating profit in the periods following the acquisition. – Subsequent negative changes in the estimated fair values of assets may result in additional expense from impairment charges. – Subsequent changes in the estimated fair values of liabilities and provisions may result in additional expense (if increasing the estimated fair value) or additional income (if decreasing the estimated fair value). |
We acquire businesses in specific areas of strategic interest to us, particularly to broaden our product and service portfolio. 2022 Acquisitions In 2022, we closed the acquisition of Taulia Inc., San Francisco, California (USA) (“Taulia”) and of INNAAS srl, Rome (Italy). Taulia Acquisition On January 27, 2022, SAP announced its intent to acquire a majority stake of Taulia (see Note (G.9)for SAP’s current shareholding percentage), a leading provider of cloud-based working capital management solutions. The acquisition closed on March 9, 2022, following satisfaction of customary closing conditions and regulatory approvals; the operating results and the assets and liabilities are reflected in our consolidated financial statements starting on that date. The acquisition is expected to further expand SAP’s business network capabilities and strengthen SAP’s solutions for the CFO office. Consideration transferred amounted to €705 million. The following table summarizes the values of identifiable assets acquired and liabilities assumed in connection with the acquisition of Taulia, as at the acquisition date: Taulia Acquisition: Recognized Assets and Liabilities | | | € millions | | | Intangible assets | | 157 | Other identifiable assets | | 59 | Total identifiable assets |
| 216 | Other identifiable liabilities | | 88 | Total identifiable liabilities |
| 88 | Total identifiable net assets |
| 128 | Goodwill |
| 577 | Total consideration transferred |
| 705 |
Prior to December 31, 2022, we completed our accounting assessment relating to the supply chain financing (SCF) transactions offered by Taulia. Based on the setup of the compartments and series in which the SCF receivables and liabilities are siloed and based on the related contractual and founding agreements, we concluded we do not control the receivables and liabilities resulting from the SCF activities under IFRS 10.Thus, we do not include the respective items in our balance sheet and do not show cash flows linked to the SCF transactions in investing/financing cash flow. As we are still obtaining the information necessary to identify and measure mainly tax-related assets and liabilities, the initial accounting for the Taulia business combination is still incomplete in that regard. In general, the goodwill arising from our acquisitions consists largely of the synergies and the know-how and skills of the acquired businesses’ workforces. Taulia goodwill was attributed to expected synergies from the acquisition, particularly in the following areas: –Cross-selling to existing SAP customers across all regions, using SAP’s sales organization –Further expanding SAP’s business network capabilities and strengthening SAP’s solutions for the CFO office –Creating new offerings by combining Taulia products and SAP products –Improving profitability in Taulia sales and operations The allocation of the goodwill resulting from the Taulia acquisition to our operating segments depends on how our operating segments actually benefit from the synergies of the Taulia business combination. For more information, see Note (D.2). Impact of the Business Combination on Our Financial Statements The amounts of revenue and profit or loss of the Taulia business acquired in 2022 since the acquisition date were included in our Consolidated Income Statement for 2022 as follows: Taulia Acquisition: Impact on SAP’s Financials | | | | | € millions | | 2022 | | Contribution of | | | as Reported | | Taulia | Revenue | | 30,871 | | 59 | Profit after tax | | 1,708 | | -38 |
Had Taulia been consolidated as at January 1, 2022, our revenue and profit after tax for 2022 would not have been materially different. 2022 Divestitures On August 17, 2022, SAP and Francisco Partners (FP) announced that FP had signed a definitive agreement with SAP America, Inc. under which FP would acquire SAP Litmos from SAP. The transaction closed on December 1, 2022, following satisfaction of applicable regulatory and other approvals. The disposal gain of €175 million is included in Other operating income/expense, net. 2021 Acquisitions In 2021, we closed the acquisition of Signavio GmbH, Berlin Germany,(Germany) (“Signavio”) and of Clarabridge, Inc., Reston, Virginia United States,(USA) (“Clarabridge”). Measurement period adjustments relating to our 2021 acquisitions have resulted in changes to our 2021 figures (mainly goodwill and tax assets/liabilities). Signavio Acquisition In January 2021, SAP announced it had entered into an agreement to acquire Signavio, a leader in the enterprise business process intelligence and process management space that enables companies to understand, improve, transform, and manage all their business processes quickly and at scale. The purchase price was €949 million. The transaction closed on March 5, 2021, following satisfaction of regulatory and other approvals. The Signavio operating results and assets and liabilities are reflected in our consolidated financial statements starting on that date. The following table summarizes the values of identifiable assets acquired and liabilities assumed in connection with the acquisition of Signavio, as at the acquisition date: Signavio Acquisition: Recognized Assets and Liabilities | | | € millions | | | Intangible assets | | 255 | Other identifiable assets | | 73 | Total identifiable assets | | 328 | Other identifiable liabilities | | 108 | Total identifiable liabilities | | 108 | Total identifiable net assets | | 220 | Goodwill | | 729 | Total consideration transferred | | 949 |
The initial accounting for the Signavio business combination is incomplete because we are still obtaining the information necessary to identify and measure items such as tax-related assets and liabilities of Signavio. Accordingly, the amounts recognized in our financial statements for these items are regarded provisional as at December 31, 2021.
In general, the goodwill arising from our acquisitions consists largely of the synergies and the know-how and skills of the acquired businesses’ workforces. Signavio goodwill was attributed to expected synergies from the acquisition, particularly in the following areas: – | Cross-selling opportunities to existing SAP customers across all regions, using SAP’s sales organization |
– | The acquisition of Signavio complements SAP's business process intelligence offerings and will help create new offerings by combining Signavio products and SAP products, but is also expected to result, for example, in increased SAP S/4HANA and RISE with SAP sales. |
– | Improved profitability in Signavio sales and operations |
The allocation of the goodwill resulting from the Signavio acquisition to our operating segments depends on how our operating segments actually benefit from the synergies of the Signavio business combination. For more information, see Note (D.2). Clarabridge Acquisition On October 1, 2021 (after receipt of required regulatory approvals and satisfaction or waiver of other customary closing conditions), Qualtrics completed its previously announced acquisition of Clarabridge, a customer experience management software company headquartered in Reston, Virginia, United States,USA, pursuant to an Agreement and Plan of Reorganization and Merger. The number of Qualtrics class A common stock issued to the sellers was fixed based on a valuation of US$1,125 million (subject to certain adjustments) – the assumed Qualtrics share price was US$37.33. The actual consideration transferred (mainly in shares valued at the acquisition date fair value of the common stock) amounted to US$1,298 million (€1,116 million). This includes €910 million of issued shares, €115 million of assumed awards, as well asand €91 million of cash paid. Qualtrics has (1) assumed, amended, and restated Clarabridge stock plans, and (2) converted the assumed options to purchase shares of Clarabridge stock outstanding into corresponding Qualtrics options. Qualtrics has granted equity incentive awards to certain continuing employees of Clarabridge and its subsidiaries under theirits own Qualtrics equity plan at Qualtrics’ sole discretion. For more information see Note (B.3). The following table summarizes the values of identifiable assets acquired and liabilities assumed in connection with the acquisition of Clarabridge, as at the acquisition date: Clarabridge Acquisition: Recognized Assets and Liabilities | | | € millions | | | Intangible assets | | 218 | Other identifiable assets | | 7984
| Total identifiable assets | | 297302
| Other identifiable liabilities | | 103107
| Total identifiable liabilities | | 103107
| Total identifiable net assets | | 194195
| Goodwill | | 922921
| Total consideration transferred | | 1,116 |
The initial accounting for the business combination is preliminary as at December 31, 2021 (as we are still in the process of collecting the information necessary to determine the fair value of, for example, intangible assets as well as tax assets and liabilities).
In general, the goodwill arising from our acquisitions consists largely of the synergies and the know-how and skills of the acquired businesses’ workforces. The Clarabridge goodwill consists largely of the synergies that SAP expects to achieve from combining the acquired assets and operations with its existing operations, especially in its Qualtrics subsidiary. For more information about the allocation of goodwill to our segments (benefitting from the acquisition), see Note (D.2).
Impact of Business Combinations on Our Financial Statements The amounts of revenue and profit or loss of the Signavio and Clarabridge businesses acquired in 2021 since the acquisition date are included in the 2021 consolidated income statements as follows: 2021 Acquisitions: Impact on SAP’s Financials (Signavio and Clarabridge) | | | | | € millions | | 2021 | | Contribution of 2021 Acquisitions | | | as Reported | | | Revenue | | 27,842 | | 70 | Profit after tax | | 5,376 | | -89 |
Had the acquired entities been consolidated as at January 1, 2021, our 2021 revenue and profit after tax would not have been materially different. 2021 Divestitures On April 13, 2021, SAP and investment company Dediq GmbH, Munich Germany,(Germany) (“Dediq”) announced that they had agreed to enter into a partnership in the area of financial services. Following the close of the transaction in September 2021 (after satisfaction of all closing conditions including regulatory approvals), SAP and Dediq jointly own the new “SAP Fioneer”SAP Fioneer entity (with SAP owning a minority share). SAP and SAP Fioneer have executed transition service and go-to-market agreements, among others. The disposal gain relating to the transfer of the business (predominantly IP and employees) iswas included in Other operating income/expense, net (€77 million for both IFRS and non-IFRS)million). 2020 Acquisitions On November 4, 2020, we concluded the acquisition of 100% of the shares of Emarsys eMarketing Systems AG, Vienna Austria,(Austria) (“Emarsys”), following satisfaction of applicable regulatory and other approvals. The operating results and assets and liabilities of Emarsys are reflected in our consolidated financial statements from November 4, 2020, onwards. Measurement period adjustments recorded in both 2021 and 2020 were not material (the measurement period adjustments have resulted in an adjustment of our 2020 numbers – reducing goodwill along with non-current provisions by €6 million ; a further reduction of goodwill by €16 million was caused by adjustments of tax items).
In general, the goodwill arising from our acquisitions consists largely of the synergies and the know-how and skills of the acquired businesses’ workforces. Emarsys goodwill is attributed to expected synergies from the acquisition, particularly in the following areas: –Cross-selling opportunities to existing SAP customers across all regions, using SAP’s sales organization –Emarsys offerings complementing the existing SAP Customer Experience solutions –Improved profitability in Emarsys sales and operations 2020 Divestitures On May 5, 2020, SAP and Sinch AB, Stockholm Sweden, ( “Sinch”(Sweden) (“Sinch”) announced that they had entered into a definitive agreement for Sinch to acquire the SAP Digital Interconnect group.business. The business sold (which was a non-reportable segment to SAP) consistsconsisted of several SAP subsidiaries as well as assets transferred from certain SAP entities. The initial cash purchase price was €225 million (on a cash-free, debt-free basis). The disposal gain of €194 million (IFRS) and €128 million (non-IFRS) iswas included in Other operating income/expense, net. The transaction closed on November 1, 2020, following satisfaction of applicable regulatory and other approvals. Due to immateriality, we have not separately presented the business as a discontinued operation.
2019 Acquisitions
On January 23, 2019, we concluded the acquisition of Qualtrics International Inc. (“Qualtrics”), following satisfaction of applicable regulatory and other approvals.
Qualtrics is a leading provider of experience management solutions. By combining Qualtrics products and SAP products, we aim to deliver an end-to-end experience and operational management system to our customers.
We acquired 100% of the Qualtrics shares for approx. US$35 per share, representing consideration transferred in cash of approximately US$7.1 billion. In addition to the cash payments, SAP also incurred liabilities and post-closing expenses relating to assumed share-based payment awards amounting to approximately US$0.9 billion.
The operating results and assets and liabilities of Qualtrics are reflected in our consolidated financial statements from January 23, 2019, onward.
Qualtrics Acquisition: Consideration Transferred
| | | € millions
| |
| Cash paid
| | 6,212
| Liabilities incurred
| | 237
| Total consideration transferred
|
| 6,449
|
The liabilities incurred related to the earned portion of unvested share-based payment awards. These liabilities were incurred by replacing, upon acquisition, equity-settled share-based payment awards held by employees of Qualtrics with cash-settled share-based payment awards, which are subject to forfeiture. The respective liabilities represent the portion of the replacement awards that relates to pre-acquisition services provided by the acquiree’s employees and were measured at the fair value determined under IFRS 2.
Measurement period adjustments recorded in both 2020 and 2019 were not material.
The following table summarizes the values of identifiable assets acquired and liabilities assumed in connection with the acquisition of Qualtrics, as at the acquisition date.
Qualtrics Acquisition: Recognized Assets and Liabilities
| | | € millions
|
|
| Cash and cash equivalents
| | 138
| Other financial assets
| | 1
| Trade and other receivables
| | 37
| Other non-financial assets
| | 20
| Property, plant, and equipment
| | 75
| Intangible assets
| | 1,803
| Thereof acquired technology
| | 575
| Thereof customer relationship and other intangibles
| | 1,226
| Thereof software and database licenses
| | 2
| Total identifiable assets
|
| 2,074
| Trade and other payables
| | 97
| Financial liabilities
|
| 53
| Current and deferred tax liabilities
| | 317
| Provisions and other non-financial liabilities
| | 41
| Contract liabilities
| | 129
| Total identifiable liabilities
|
| 637
| Total identifiable net assets
|
| 1,437
| Goodwill
| | 5,012
| Total consideration transferred
|
| 6,449
|
In general, the goodwill arising from our acquisitions consists largely of the synergies and the know-how and skills of the acquired businesses’ workforces.
Qualtrics goodwill was attributed to expected synergies from the acquisition, particularly in the following areas:
–Cross-selling opportunities to existing SAP customers across all regions, using SAP’s sales organization
- Creation of new offerings by combining Qualtrics products and SAP products to deliver an end-to-end experience and operational management system to the customers
- Improved profitability in Qualtrics sales and operations
The allocation of the goodwill resulting from the Qualtrics acquisition to our operating segments was depending on how our operating segments actually benefit from the synergies of the Qualtrics business combination.
Impact of the Business Combination on Our Financial Statements
The amounts of revenue and profit or loss of the Qualtrics business acquired in 2019 since the acquisition date were included in our 2019 consolidated income statements as follows:
Qualtrics Acquisition: Impact on SAP’s Financials
| | | | | € millions | | 2019 | | Contribution of | | | as Reported | | Qualtrics | Revenue | | 27,553 | | 429 | Profit after tax | | 3,370 | | -526 |
Had Qualtrics been consolidated as at January 1, 2019, our 2019 revenue and profit after tax would not have been materially different.
(D.2) Goodwill y Goodwill and Intangible Asset Impairment Testing | | The annual goodwill impairment test is performed at the level of our operating segments, since there are no lower levels in SAP at which goodwill is monitored for internal management purposes. In general, the test is performed at the same time (at the beginning of the fourth quarter) for all operating segments. In making impairment assessments for our goodwill and intangible assets, the outcome of these tests is highly dependent on management’s assumptions regarding future cash flow projections and economic risks, which require significant judgment and assumptions about future developments. They can be affected by a variety of factors, including: - Changes in business strategy - Internal forecasts - Estimation of weighted averageweighted-average cost of capital Changes to the assumptions underlying our goodwill and intangible assets impairment assessments could require material adjustments to the carrying amount of our recognized goodwill and intangible assets as well as the amounts of impairment charges recognized in profit or loss. The outcome of goodwill impairment tests may also depend on the allocation of goodwill to our operating segments. This allocation involves judgment as it is based on our estimates regarding which operating segments are expected to benefit from the synergies of business combinations. Changes in our segment structure result in the reallocation of goodwill with the reallocated goodwill being calculated based on relative values (if a direct allocation is not possible). |
Goodwill | | | € millions | | | Historical cost | | | 1/1/20202021 | | 29,260
| Foreign currency exchange differences
| | -2,010
| Additions from business combinations
| | 395
| Retirements/disposals
| | -9
| 12/31/2020
|
| 27,636 | Foreign currency exchange differences | | 1,838 | Additions from business combinations |
| 1,7371,736
| Retirements/disposals | | -20 | 12/31/2021 |
| 31,190 | Foreign currency exchange differences | | 1,526 | Additions from business combinations | | 589 | Retirements/disposals | | -95 | 12/31/2022 | | 31,19133,210
| | | | Accumulated amortization | | | 1/1/20202021 | | 101
| Foreign currency exchange differences
| | -3
| 12/31/2020
|
| 9899
| Foreign currency exchange differences | | 3 | 12/31/2021 | | 101102
| Foreign currency exchange differences | | 2 | 12/31/2022 |
| 104 | | | | Carrying amount | | | 12/31/2020 |
| 27,538
| 12/31/2021
| | 31,09031,088
| 12/31/2022 |
| 33,106 |
For more information about our segments and the changes in 2021,2022, see Note (C.1). Throughout 2021 (particularly in light of the COVID-19 pandemic and its development),2022, we have - through a qualitative and quantitative analysis - been continuously monitoring whether triggering events exist. BasedThe negative revenue impact and additional expenses due to the exit of operations in Russia and Belarus mainly affects our Applications, Technology & Services segment. We believe that no reasonably possible effect of the exit of operations in Russia and Belarus on revenue and expenses would cause the carrying amount of our analysis, whichApplications, Technology & Services segment to exceed the recoverable amount. Throughout 2022, the stock price of Qualtrics International Inc. declined compared to 2021. We closely monitor the impairment risks and potential triggering events for the Qualtrics segment. While we updatednote the decline of the stock price as one aspect in our holistic assessment, we did not evaluate it to be the fourth quarter and which served as the basis for our regular goodwill impairment test, we assumesole indicator that the COVID-19 situation will continue to improve as vaccine programs continue to take effect globally, leading tocould imply a growing demand environment in 2022. For more information, see Note (IN.2).triggering event.
For impairment testing purposes, the carrying amount of goodwill is allocated to the operating segments expected to benefit from goodwill as follows: Goodwill by Operating Segment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | Applications, | | Services | | Concur | | Qualtrics | | Emarsys | | Business | | Total | | Applications, | | Qualtrics | | Emarsys | | SAP Signavio1 | | Taulia | | Business Network | | Sustainability | | Total | | | Technology & | | | | | | | | | | Process | | | | Technology & Services | | | | | | | | | | | | | | | | | Support | | | | | | | | | | Intelligence | | | | 12/31/2020 | | 20,844 | | 355 | | 3,307 | | 2,637 | | 395 | | NA | | 27,538 | | 12/31/2021 | | 26,074 | | 367 | | NA | | 3,846 | | 395 | | 408 | | 31,090 | | 26,441 | | 3,844 | | 395 | | 408 | | NA | | NA | | NA | | 31,088 | 12/31/2022 | | | 26,812 | | 4,083 | | 395 | | 410 | | 322 | | 1,052 | | 32 | | 33,106 |
A portion (€43 million) of the goodwill in the Applications, Technology & Support segment was moved to the newly formed Business1 Previously known as “Business Process Intelligence segment. Based on the expected synergies, the goodwill added through the acquisition of Signavio (€766 million) was provisionally allocated to the Applications, Technology & Support segment (€383 million) and the Business Process Intelligence segment (€383 million). As the initial accounting for the Signavio business combination is incomplete (for more information, see Note (D.1)), the allocation of goodwill is provisional. The allocation of the goodwill resulting from the Clarabridge acquisition (by Qualtrics) to our operating segments depends on how our operating segments actually benefit from the synergies of the Clarabridge business combination. As we have not yet completed the identification of those benefits and the initial accounting for the business combination is preliminary (for more information, see Note (D.1)), the entire goodwill (€924 million) was provisionally allocated to the Qualtrics segment.
Due to the dissolution of the Concur segment in 2021 (for more information, see Note (C.1)), the Concur goodwill (€3,307 million) was moved to the Applications, Technology & Support segment. Given the close proximity to the 2020 annual goodwill impairment test and the significant headroom, no formal impairment test was performed on the reallocation date of the Concur segment.
In conjunction with the creation of the SAP Fioneer joint venture (for more information, see Note (D.1)), we disposed €20 million of goodwill (thereof €9 million from the Applications, Technology & Support segment and €11 million from the Services segment).Intelligence”
Based on the expected synergies, the goodwill added through the acquisition of Taulia (€577 million) was provisionally allocated to the Applications, Technology & Services segment (€246 million), the Taulia segment (€307 million), and the newly formed Business Network segment (€24 million). As the initial accounting for the Taulia business combination is incomplete (for more information, see Note (D.1)), the allocation of goodwill is provisional. Portions of the goodwill in the Applications, Technology & Services segment were moved to the newly formed Business Network segment (€1,135 million) and Sustainability segment (€34 million). Due to the dissolution of the Services segment at the beginning of 2022 (for more information, see Note (C.1)), the Services goodwill (€367 million) was moved to the Applications, Technology & Services segment. Given the close proximity to the 2021 annual goodwill impairment test and the significant headroom, no formal impairment test was performed on the reallocation date of the Services segment. Goodwill Impairment Test The key assumptions on which management based its cash flow projections for the period covered by the underlying business plans are as follows: Key Assumption | | Basis for Determining Values Assigned to Key Assumption | Budgeted revenue growth | | Revenue growth rate achieved in the current year, adjusted for an expected increase in SAP’s addressable cloud and database markets; expected growth in the established software applications and analytics markets. Values assigned reflect our past experience and our expectations regarding an increase in the addressable markets. | Budgeted operating margin | | Operating margin budgeted for a given budget period equals the operating margin achieved in the current year, increased by expected efficiency gains. Values assigned reflect past experience, except for efficiency gains. | Discount rates | | Our estimated cash flow projections are discounted to present value using discount rates (after-tax rates). Discount rates are based on the weighted average cost of capital (WACC) approach. | Terminal growth rate | | Our estimated cash flow projections for periods beyond the business plan were extrapolated using segment-specific terminal growth rates. These growth rates do not exceed the long-term average growth rates for the markets in which our segments operate. |
Key Assumptions and Detailed Planning Period1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Percent, unless otherwise stated | | Applications, Technology & | | Services | | Qualtrics | | Emarsys | | Business Process | | | | Support | | | | | | | | Intelligence | | Percent, unless | | | Applications, | | Emarsys | | SAP Signavio2 | | Taulia | | Business Network | | Sustainability | otherwise stated | | | Technology & Services | | | | | | | | | | | | | | | 2021 | | 2020 | | 2021 | | 2020 | | 20211 | | 2020 | | 2021 | | 20202 | | 2021 | | 2020 | | 2022 | | 20213 | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | Budgeted revenue growth (average of the budgeted period) | | 8.4 | | 5.4 | | 0.4 | | 3.4 | | NA | | 20.6 | | 15.3 | | NA | | 31.7 | | NA | | 11.4 | | 8.4 | | 13.9 | | 15.3 | | 20.7 | | 31.7 | | 24.8 | | NA | | 14.0 | | NA | | 34.6 | | NA | After-tax discount rate | | 8.8 | | 8.8 | | 7.9 | | 7.2 | | NA | | 9.7 | | 10.0 | | NA | | 11.5 | | NA | | 11.1 | | 8.8 | | 11.7 | | 10.0 | | 11.7 | | 11.5 | | 11.3 | | NA | | 11.9 | | NA | | 10.9 | | NA | Terminal growth rate | | 3.0 | | 3.0 | | 0.0 | | 3.0 | | NA | | 3.0 | | 3.0 | | NA | | 3.0 | | NA | | 3.0 | | 3.0 | | 3.0 | | 3.0 | | 3.0 | | 3.0 | | 3.0 | | NA | | 3.0 | | NA | | 3.0 | | NA | Detailed planning period (in years) | | 5 | | 5 | | 5 | | 5 | | NA | | 13 | | 12 | | NA | | 14 | | NA | | 5 | | 5 | | 12 | | 12 | | 14 | | 14 | | 13 | | NA | | 10 | | NA | | 12 | | NA |
1 As we are using Level 1 inputs for Qualtrics in 2021,2022 (similar to 2021), no information on assumptions and the detailed planning period is presented. 2 No formal test was performed in 2020Previously known as “Business Process Intelligence” 3 The 2021 figures relate to the acquisition was afterApplications, Technology & Support segment without the annual testing date. However, we performed a quantitative and qualitative analysis to monitor whether triggering events exist.reallocation of the Services segment. On October 1, 2021,2022, we performed a goodwill impairment test for the segments mentioned above.operating segments. Applications, Technology & Support Segment and Services Segment For more information about our 20212022 segment changes, see Note (C.1). The recoverable amount of these segments was determined based on a fair value less costs of disposal calculation. The fair value measurement was categorized as a Level 3 fair value based on the inputs used in the valuation. The cash flow projections were based on actual operating results and specific estimates covering a detailed planning period and the terminal growth rate thereafter. The projected results were determined based on management’s estimates and are consistent with the assumptions a market participant would make (a target operating marginsmargin of 27.8% (2021: 33.1% (Applications, Technology & Support) (2020: 32.4)% and 5.1% (Services) (2020: 2.4)% were) was used in the valuation). We believe that no reasonably possible change in any of the above key assumptions would cause the carrying amount of our Applications, Technology & SupportServices segment to exceed the recoverable amount. For our Services segment, the recoverable amount exceeded the carrying amount by€1,377 million (2020: €1,416 million).
The following table shows the amounts by which the key assumptions would need to change individually (that is, without changing the other key assumptions) for the recoverable amount to be equal to the carrying amount. For budgeted revenue growth sensitivity, the cost structure was not adjusted, hence leading to a modified terminal operating margin:
Sensitivity to Change in Assumptions
| | | | | | | | | Services | | | 2021 | | 2020 | Budgeted revenue growth (change in pp) | | -0.8 | | -0.6 | Target operating margin at the end of the budgeted period (change in pp) | | -4 | | -2 |
Qualtrics Segment Qualtrics International Inc. completed its initial public offering (“IPO”) on January 28, 2021. The recoverable amount was determined based on a fair value less costs of disposal calculation. The fair value measurement was categorized as a Level 1 fair value based on the market capitalization derived from publicly listed shares of Qualtrics. We believe that no reasonably foreseeable change inutilized the share price as at October 3, 2022, as October 1, 2022, was not a trading day. The share price was €10.90 as at October 3, 2022 (€37.85 as at October 1, 2021). Utilizing the share price as at September 30, 2022, would not have changed our conclusion.
The recoverable amount exceeded the carrying amount by €957 million (2021: €15,396 million). The following table shows the amounts by which the share price of Qualtrics would causeneed to change individually (that is, without changing the other inputs) for the recoverable amount to be equal to the carrying amount of our Qualtrics segmentamount: Sensitivity to exceed its recoverable amount.Change in Assumptions | | | | | | | Qualtrics | | | 2022 | | 2021 | Share price (change in %) | | -15 | | -76 |
Emarsys Segment The recoverable amount was determined based on a fair value less costs of disposal calculation. The fair value measurement was categorized as a Level 3 fair value based on the inputs used in the valuation. The cash flow projections were based on actual operating results and specific estimates covering a detailed planning period and the terminal growth rate thereafter. The projected results were determined based on management’s estimates and are consistent with the assumptions a market participant would make (a target operating margin of 24.6%29.4% (2021: 24.6)% was used in the valuation). Given the fact that the Emarsys segment is expected to show disproportionate growth in the coming years and has not yet reached a steady state, we have used a longer and more detailed planning period than one would apply in a more mature segment. The recoverable amount exceeded the carrying amount by €513 million (2021: €547 million.million). The following table shows the amounts by which the key assumptions would need to change individually (that is, without changing the other key assumptions) for the recoverable amount to be equal to the carrying amount. For budgeted revenue growth sensitivity, the cost structure was not adjusted, hence leading to a modified terminal operating margin: Sensitivity to Change in Assumptions | | | | | | | | | | | | | Emarsys | | | | Emarsys | | | 2021 | | 20201 | | 2022 | | 2021 | Budgeted revenue growth (change in pp) | | -1.7 | | NA | | -2.0 | | -1.7 | Target operating margin at the end of the budgeted period (change in pp) | | -14 | | NA | | -16 | | -14 |
1 No formal test was performed in 2020 as the acquisition was after the annual testing date. However, we performed a quantitative and qualitative analysis to monitor whether triggering events exist.
Business Process IntelligenceSAP Signavio Segment
The recoverable amount was determined based on a fair value less costs of disposal calculation. The fair value measurement was categorized as a Level 3 fair value based on the inputs used in the valuation. The cash flow projections were based on actual operating results and specific estimates covering a detailed planning period and the terminal growth rate thereafter. The projected results were determined based on management’s estimates and are consistent with the assumptions a market participant would make (a target operating margin of 22.5% (2021: 24.8%) was used in the valuation). Given the fact that the Business Process IntelligenceSAP Signavio segment is expected to show disproportionate growth in the coming years and has not yet reached a steady state, we have used a longer and more detailed planning period than one would apply in a more mature segment. The recoverable amount exceeded the carrying amount by €845 million (2021: €1,225 million). The following table shows the amounts by which the key assumptions would need to change individually (that is, without changing the other key assumptions) for the recoverable amount to be equal to the carrying amount. For budgeted revenue growth sensitivity, the cost structure was not adjusted, hence leading to a modified terminal operating margin: Sensitivity to Change in Assumptions | | | | | | | SAP Signavio | | | 2022 | | 2021 | Budgeted revenue growth (change in pp) | | -1.9 | | -2.5 | Target operating margin at the end of the budgeted period (change in pp) | | -18 | | -20 |
Taulia Segment The recoverable amount was determined based on a fair value less costs of disposal calculation. The fair value measurement was categorized as a Level 3 fair value based on the inputs used in the valuation. The cash flow projections were based on actual operating results and specific estimates covering a detailed planning period and the terminal growth rate thereafter. The projected results were determined based on management’s estimates and are consistent with the assumptions a market participant would make (a target operating margin of 24.9% was used in the valuation). Given the fact that the Taulia segment is expected to show disproportionate growth in the coming years and has not yet reached a steady state, we have used a longer detailed planning period than one would apply in a more mature segment. The recoverable amount exceeded the carrying amount by €366 million. The following table shows the amounts by which the key assumptions would need to change individually (that is, without changing the other key assumptions) for the recoverable amount to be equal to the carrying amount. For budgeted revenue growth sensitivity, the cost structure was not adjusted, hence leading to a modified terminal operating margin: Sensitivity to Change in Assumptions | | | | | Taulia | | | 2022 | Budgeted revenue growth (change in pp) | | -1.1 | Target operating margin at the end of the budgeted period (change in pp) | | -11 | After-tax discount rate | | 3.4 |
Business Network Segment The recoverable amount was determined based on a fair value less costs of disposal calculation. The fair value measurement was categorized as a Level 3 fair value based on the inputs used in the valuation. The cash flow projections were based on actual operating results and specific estimates covering a detailed planning period and the terminal growth rate thereafter. The projected results were determined based on management’s estimates and are consistent with the assumptions a market participant would make (a target operating margin of 24.2% was used in the valuation). Given the fact that the Business Network segment is expected to show disproportionate growth in the coming years and has not yet reached a steady state, we have used a longer detailed planning period than one would apply in a more mature segment. The recoverable amount exceeded the carrying amount by €2,821 million. The following table shows the amounts by which the key assumptions would need to change individually (that is, without changing the other key assumptions) for the recoverable amount to be equal to the carrying amount. For budgeted revenue growth sensitivity, the cost structure was not adjusted, hence leading to a modified terminal operating margin: Sensitivity to Change in Assumptions | | | | | Business Process IntelligenceNetwork | | | 20212022
| Budgeted revenue growth (change in pp) | | -2.5-2.8
| Target operating margin at the end of the budgeted period (change in pp) | | -20-19
|
Sustainability Segment The recoverable amount was determined based on a fair value less costs of disposal calculation. The fair value measurement was categorized as a Level 3 fair value based on the inputs used in the valuation. The cash flow projections were based on actual operating results and specific estimates covering a detailed planning period and the terminal growth rate thereafter. The projected results were determined based on management’s estimates and are consistent with the assumptions a market participant would make (a target operating margin of 26.2% was used in the valuation). Given the fact that the Sustainability segment is expected to show disproportionate growth in the coming years and has not yet reached a steady state, we have used a longer detailed planning period than one would apply in a more mature segment. The recoverable amount exceeded the carrying amount by €112 million. The following table shows the amounts by which the key assumptions would need to change individually (that is, without changing the other key assumptions) for the recoverable amount to be equal to the carrying amount. For budgeted revenue growth sensitivity, the cost structure was not adjusted, hence leading to a modified terminal operating margin: Sensitivity to Change in Assumptions | | | | | Sustainability | | | 2022 | Budgeted revenue growth (change in pp) | | -1.4 | Target operating margin at the end of the budgeted period (change in pp) | | -13 | After-tax discount rate | | 3.9 |
(D.3) Intangible Assets y Recognition of Intangibles | | Whereas in general, expenses for internally generated intangibles are expensed as incurred, development expenses incurred on standard-related customer development projects (for which the IAS 38 criteria are met cumulatively) are capitalized on a limited scale with those amounts being amortized over the estimated useful life for the majority of the projects of eight years. Determining whether internally generated intangible assets from development qualify for recognition requires significant judgment, particularly in the following areas: - Determining whether activities should be considered research activities or development activities - Determining whether the conditions for recognizing an intangible asset are met requires assumptions about future market conditions, customer demand, and other developments. - The term “technical feasibility” is not defined in IFRS, and therefore determining whether the completion of an asset is technically feasible requires judgment and a company-specific approach. - Determining the future ability to use or sell the intangible asset arising from the development and the determination of the probability of future benefits from sale or use - Determining whether a cost is directly or indirectly attributable to an intangible asset and whether a cost is necessary for completing a development These judgments impact the total amount of intangible assets that we present in our balance sheet as well as the timing of recognizing development expenses in profit or loss. y Measurement of Intangibles All our purchased intangible assets other than goodwill have finite useful lives. They are initially measured at acquisition cost and subsequently amortized based on the expected consumption of economic benefits over their estimated useful lives ranging from two to 20 years. Judgment is required in determining the following: - The useful life of an intangible asset, as this is based on our estimates regarding the period over which the intangible asset is expected to generate economic benefits to us - The amortization method, as IFRS requires the straight-line method to be used unless we can reliably determine the pattern in which the asset’s future economic benefits are expected to be consumed by us Both the amortization period and the amortization method have an impact on the amortization expense that is recorded in each period. y Classification of Intangibles We classify intangible assets according to their nature and use in our operations. Software and database licenses consist primarily of technology for internal use, whereas acquired technology consists primarily of purchased software to be incorporated into our product offerings. Customer relationshiprelationships and other intangibles consist primarily of customer relationships and acquired trademark licenses. Amortization expenses of intangible assets are classified as cost of cloud, cost of services, research and development, sales and marketing, and general and administration, depending on the use of the respective intangible assets. |
Intangible Assets | | | | | | | | | € millions | | Software and | | Acquired | | Customer | | Total | | | Database Licenses | | Technology | | Relationships and | | | | | | | | | Other Intangibles | | | Historical cost | | | | | | | | | 1/1/2021 | | 793 | | 2,565 | | 6,038 | | 9,396 | Foreign currency exchange differences | | 12 | | 205 | | 427 | | 644 | Additions from business combinations | | 0 | | 233 | | 303 | | 536 | Other additions | | 19 | | 0 | | 66 | | 85 | Retirements/disposals | | -84 | | -7 | | -11 | | -102 | Transfers | | 93 | | 0 | | -89 | | 4 | 12/31/2021 | | 833 | | 2,996 | | 6,734 | | 10,563 | Foreign currency exchange differences | | 8 | | 170 | | 337 | | 515 | Additions from business combinations | | 0 | | 65 | | 98 | | 163 | Other additions | | 244 | | 0 | | 65 | | 309 | Retirements/disposals | | -115 | | -703 | | -92 | | -910 | Transfers | | 87 | | -1 | | -85 | | 1 | 12/31/2022 | | 1,057 | | 2,527 | | 7,057 | | 10,641 | | | | | | | | | | Accumulated amortization | | | | | | | | | 1/1/2021 | | 523 | | 2,043 | | 3,046 | | 5,612 | Foreign currency exchange differences | | 11 | | 171 | | 211 | | 393 | Additions amortization | | 77 | | 195 | | 406 | | 678 | Retirements/disposals | | -64 | | -11 | | -10 | | -85 | 12/31/2021 | | 547 | | 2,398 | | 3,653 | | 6,598 | Foreign currency exchange differences | | 7 | | 137 | | 171 | | 315 | Additions amortization | | 99 | | 209 | | 458 | | 766 | Retirements/disposals | | -109 | | -703 | | -61 | | -873 | 12/31/2022 | | 544 | | 2,041 | | 4,221 | | 6,806 | | | | | | | | | | Carrying amount | | | | | | | | | 12/31/2021 | | 286 | | 598 | | 3,081 | | 3,965 | 12/31/2022 | | 513 | | 486 | | 2,836 | | 3,835 |
Intangible Assets
| | | | | | | | | € millions | | Software and | | Acquired | | Customer | | Total | | | Database Licenses | | Technology | | Relationships and | | | | | | | | | Other Intangibles | | | Historical cost | | | | | | | | | 1/1/2020 | | 929 | | 2,752 | | 6,415 | | 10,096 | Foreign currency exchange differences | | -14 | | -224 | | -467 | | -705 | Additions from business combinations | | 1 | | 59 | | 184 | | 244 | Other additions | | 10 | | 0 | | 60 | | 70 | Retirements/disposals | | -148 | | -22 | | -142 | | -312 | Transfers | | 15 | | 0 | | -12 | | 3 | 12/31/2020 | | 793 | | 2,565 | | 6,038 | | 9,396 | Foreign currency exchange differences | | 12 | | 205 | | 427 | | 644 | Additions from business combinations | | 0 | | 233 | | 304 | | 537 | Other additions | | 19 | | 0 | | 66 | | 85 | Retirements/disposals | | -84 | | -7 | | -11 | | -102 | Transfers | | 93 | | 0 | | -89 | | 4 | 12/31/2021 | | 833 | | 2,996 | | 6,735 | | 10,564 | | | | | | | | | | Accumulated amortization | | | | | | | | | 1/1/2020 | | 598 | | 2,031 | | 2,976 | | 5,605 | Foreign currency exchange differences | | -13 | | -180 | | -219 | | -412 | Additions amortization | | 85 | | 214 | | 420 | | 719 | Retirements/disposals | | -147 | | -22 | | -131 | | -300 | 12/31/2020 | | 523 | | 2,043 | | 3,046 | | 5,612 | Foreign currency exchange differences | | 11 | | 171 | | 211 | | 393 | Additions amortization | | 77 | | 189 | | 412 | | 678 | Retirements/disposals | | -64 | | -11 | | -10 | | -85 | 12/31/2021 | | 547 | | 2,392 | | 3,659 | | 6,598 | | | | | | | | | | Carrying amount | | | | | | | | | 12/31/2020 | | 270 | | 522 | | 2,992 | | 3,784 | 12/31/2021 | | 286 | | 604 | | 3,076 | | 3,966 |
Significant Intangible Assets | | | | | | | | | | | | | | | | | € millions, unless otherwise stated | | | | Remaining | | | | Remaining | | | Carrying Amount | | Useful Life | | Carrying Amount | | Useful Life | | | 2021 | | 2020 | | (in years) | | 2022 | | 2021 | | (in years) | Ariba – Customer relationships | | 174 | | 203 | | 4 | to | 6 | | 140 | | 174 | | 3 | to | 5 | Concur – Customer relationships | | 755 | | 786 | | 9 | to | 13 | | 704 | | 755 | | 8 | to | 12 | Callidus – Customer relationships | | 241 | | 262 | | 7 | to | 11 | | 181 | | 241 | | 6 | to | 10 | Qualtrics - Acquired technologies | | 286 | | 360 | | | | 4 | | 195 | | 286 | | | | 3 | Qualtrics - Customer relationships | | 983 | | 991 | | 11 | to | 16 | | 937 | | 983 | | 10 | to | 15 | Emarsys – Customer relationships | | 163 | | 174 | | 6 | to | 13 | | 145 | | 163 | | 5 | to | 12 | Signavio – Customer relationships | | 184 | | NA | | | | 15 | | 183 | | 184 | | | | 14 | Total significant intangible assets | | 2,786 | | 2,776 | | | | | | 2,485 | | 2,786 | | | | |
(D.4) Property, Plant, and Equipment | y Depreciation of Property, Plant and Equipment | | Property, plant, and equipment are typically depreciated using the straight-line method. Judgment is required in estimating the useful life of the assets. In this assessment we consider, among others, our history with similar assets and current and future changes in technology. |
Useful Lives of Property, Plant, and Equipment | | | Buildings | | Predominantly 25 to 50 years | Leased assets and leasehold improvements | | Based on the term of the lease contract | Information technology equipment | | 2 to 6 years | Office furniture | | 4 to 20 years | Automobiles | | 2 to 5 years |
Property, Plant, and Equipment | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | Land and Buildings | | Land and | | Other Property, | | Other Property, | | Advance | | Total | | Land and Buildings | | Land and | | Other Property, | | Other Property, | | Advance | | Total | | | | | Buildings Leased | | Plant, and | | Plant, and | | Payments and | | | | | | Buildings Leased | | Plant, and | | Plant, and | | Payments and | | | | | | | | | Equipment | | Equipment | | Construction | | | | | | | | Equipment | | Equipment | | Construction | | | | | | | | | | | Leased | | in Progress | | | | | | | | | | Leased | | in Progress | | | 12/31/2020 | | 1,457 | | 1,816 | | 1,628 | | 41 | | 99 | | 5,041 | | 12/31/2021 | | 1,609 | | 1,801 | | 1,450 | | 40 | | 77 | | 4,977 | | 1,609 | | 1,801 | | 1,450 | | 40 | | 77 | | 4,977 | 12/31/2022 | | | 1,585 | | 1,758 | | 1,406 | | 43 | | 142 | | 4,934 | | | | | | | | | | | | | | | | | | | | | | | | | | Additions | | | | | | | | | | | | | | | | | | | | | | | | | 2020 | | 66 | | 404 | | 424 | | 25 | | 87 | | 1,006 | | 2021 | | 144 | | 313 | | 518 | | 23 | | 69 | | 1,067 | | 144 | | 313 | | 518 | | 23 | | 69 | | 1,067 | 2022 | | | 46 | | 399 | | 567 | | 30 | | 87 | | 1,129 |
The additions (other than from business combinations) relate primarily to the replacement and purchase of information technology equipment and the construction and leasing of buildings and data centers. For more information about the impairment of leased buildings and data centers,center equipment in Russia, see Note (B.6). For more information about leases, see Note (D.5). (D.5) Leases yAccounting Policies, Judgments, and Estimates | | Under IFRS 16, a contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. As a lessee, SAP recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. The right-of-use assets are depreciated on a straight-line basis and interest expense is recognized on the lease liabilities. The vast majority of our leases consist of facility and data center leases. Payments for short-term and low-value leases are expensed over the lease term. Extension options are included in the lease term if their exercise is reasonably certain. |
Leases in the Balance Sheet | | | | | | | | | € millions | | 12/31/2021 | | 12/31/2020 | | 12/31/2022 | | 12/31/2021 | Right-of-use assets | | | | | | | | | Right-of-use assets – land and buildings | | 1,800 | | 1,816 | | 1,758 | | 1,800 | Right-of-use assets – other property, plant, and equipment | | 40 | | 41 | | 43 | | 40 | Total right-of-use assets | | 1,840 | | 1,857 | | 1,801 | | 1,840 | / Property, plant, and equipment | | 4,977 | | 5,041 | | 4,934 | | 4,977 | Right-of-use assets as % of / Property, plant, and equipment | | 37 | | 37 | | 37 | | 37 | | | | | | | | | | Lease liabilities | | | | | | | | | Current lease liabilities | | 407 | | 380 | | 349 | | 407 | / Current financial liabilities | | 4,528 | | 2,348 | | 4,808 | | 4,528 | Current lease liabilities as % of / Current financial liabilities | | 9 | | 16 | | 7 | | 9 | | | | | | | | | | Non-current lease liabilities | | 1,736 | | 1,740 | | 1,791 | | 1,736 | / Non-current financial liabilities | | 11,042 | | 13,605 | | 9,547 | | 11,042 | Non-current lease liabilities as % of / Non-current financial liabilities | | 16 | | 13 | | 19 | | 16 |
SAP is committed to future minimum lease payments in the amount of €49 million (2021: €172 millionmillion) for facility leases that had not yet commenced as at December 31, 2021.2022. For data centers, we have future commitments to spend €5 million (2021: €226 millionmillion) on services and IFRS 16-related assets. Because this agreement does not specify the required split, the entire amount has been included in the purchase obligations reported in Note (D.8). Leases in the Income Statement | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | Lease expenses within operating profit | | | | | | | | | Depreciation of right-of-use assets | | 398 | | 396 | | 419 | | 398 |
For more information about right-of-use asset additions, see Note (D.4), and for a maturity analysis of lease liabilities, see Note (F.1). For more information about the cash flow related to lease liabilities, see the “Reconciliation of Liabilities Arising from Financing Activities” table within Note (E.3). (D.6) Equity Investments y Accounting Policies, Judgments, and Estimates | | As we do not designate financial assets as “at fair value through profit or loss,” we generally classify financial assets into the following categories: at amortized cost (AC), at fair value through other comprehensive income (FVOCI), and at fair value through profit or loss (FVTPL), depending on the contractual cash flows of and our business model for holding the respective asset. For equity securities, as the cash flow characteristics are typically other than solely principal and interest, we take an investment-by-investment decision whether to classify as FVTPL or FVOCI. The valuation of equity securities of private companies requires judgment sincebecause it is typically based on significant unobservable inputs, as no market prices are available and there is an inherent lack of liquidity. We take the most recent qualitative and quantitative information aspects into consideration to determine the fair value estimates of these equity securities. Considerable judgment and assumptions are involved with regard to the selection of appropriate comparable company data, the assessment of cash requirements of the business, the acceptance of the technology or products in the addressable markets, the actual and forecasted performance, the milestone achievements, the adequacy of price points from financing rounds, the transaction of similar securities of the same company, the rights and preferences of the underlying securities, the selection of adequate equity allocation parameters, and the possible exit scenarios and associated weightings. Because all of these assumptions could change significantly, and because of the inherent uncertainty of valuation is inherently uncertain, our estimated fair values may differ significantly from the values that would have been used had market prices for the investments existed and that will ultimately be realized, and those differences could be material. Gains/losses on equity securities at FVTPL include gains/losses from fair value fluctuations, from disposals as well as dividends, while gains/losses on equity securities at FVOCI only include dividends, all of which are shown in Financial income, net. Regular way purchases and sales are recorded as at the trade date. |
Equity Investments | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | Equity securities | | 0 | | 5,799 | | 5,799 | | 0 | | 3,113 | | 3,113 | | 0 | | 5,138 | | 5,138 | | 0 | | 5,799 | | 5,799 | Investments in associates | | 0 | | 155 | | 155 | | 0 | | 14 | | 14 | | 0 | | 151 | | 151 | | 0 | | 155 | | 155 | Equity investments | | 0 | | 5,954 | | 5,954 | | 0 | | 3,127 | | 3,127 | | 0 | | 5,289 | | 5,289 | | 0 | | 5,954 | | 5,954 | / Other financial assets | | 2,758 | | 6,275 | | 9,033 | | 1,635 | | 3,512 | | 5,147 | | 853 | | 5,626 | | 6,479 | | 2,758 | | 6,275 | | 9,033 | Equity investments as % of / Other financial assets | | 0 | | 95 | | 66 | | 0 | | 89 | | 61 | | 0 | | 94 | | 82 | | 0 | | 95 | | 66 |
Investments in Associates SAP also has interests in a number of individually immaterial associates. We own more than 20% of the equity interests or have at least 20% of the voting rights. Based on these facts and the nature of the relationships, SAP has determined that it has significant influence. The following table shows, in aggregate, the carrying amount and share of profit of these associates. | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | Carrying amount of interest in associates | | 155 | | 14 | | 151 | | 155 | Share of profit and losses from continuing operations | | -9 | | -1 | | -4 | | -9 |
SAP contributed certain software solutions specific toThe vast majority of the financial services industrycarrying amount of interest in associates relates to SAP Fioneer (with SAP employees also transferring over onGmbH, which results out of a voluntary basis)divestiture in exchangereturn for a minority sharestake in the new entity. The transaction closed on September 1, 2021. The associated accounting for this transaction is preliminary and the accounting alignment is ongoing. As such, the proportionate share of earnings is provisional.
The proportionate share of earnings of SAP Fioneer is included in SAP’s Consolidated Financial Statements with a time lag of one month. The figures for the equity result relate to the period from September 1, 2021, to November 30, 2021. For a list of the names of other equity investments, see Note (G.9). Financial Commitments in Venture Capital Funds | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | Investments in venture capital funds | | 255 | | 237 | | Committed investments in venture capital funds | | | 303 | | 255 |
SAP invests and holds interests in unrelated parties that manage investments in venture capital. On December 31, 2021,2022, total commitments to make such investments amounted to €757€957 million (2020: €607(2021: €757 million), of which €502€654 million had been drawn (2020: €370(2021: €502 million). By investing in such venture capital funds, we are exposed to the risks inherent in the business areas in which the entities operate. Our maximum exposure to loss is the amount invested plus contractually committed future capital contributions. Maturities | | | € millions | | 12/31/20212022 | | | Investments in Venture | | | Capital Funds | Due 20222023 | | 255303
| Total | | 255303
|
(D.7) Non-Current Assets by Region The table below shows non-current assets excluding financial instruments, deferred tax assets, post-employment benefit assets, and rights arising under insurance contracts. Non-Current Assets by Region | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | Germany | | 5,305 | | 4,350 | | 5,897 | | 5,305 | Rest of EMEA | | 5,927 | | 5,798 | | 5,897 | | 5,927 | EMEA | | 11,232 | | 10,149 | | 11,794 | | 11,232 | United States | | 30,143 | | 26,829 | | 32,414 | | 30,141 | Rest of Americas | | 441 | | 379 | | 510 | | 441 | Americas | | 30,584 | | 27,208 | | 32,923 | | 30,582 | India | | | 333 | | 279 | APJ | | 1,263 | | 1,216 | | 1,210 | | 1,263 | SAP Group | | 43,079 | | 38,572 | | 45,928 | | 43,077 |
For a breakdown of our employee headcount by region, see Note (B.1), and for a breakdown of revenue by region, see Note (A.1). (D.8) Purchase Obligations | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | Contractual obligations for acquisition of property, plant, and equipment and intangible assets | | 99 | | 106 | | 144 | | 99 | Other purchase obligations | | 4,680 | | 3,685 | | 7,491 | | 4,680 | Purchase obligations | | 4,779 | | 3,791 | | 7,635 | | 4,779 |
The contractual obligations for acquisition of property, plant, and equipment and intangible assets relate primarily to the purchase of hardware, software, patents, office equipment, and vehicles. The remaining obligations relate mainly to cloud services, marketing, consulting, maintenance, license agreements, cloud services, and other third-party agreements. The increase is mainly due to new purchase obligations related to cloud infrastructure services. Historically, the majority of such purchase obligations have been realized. Maturities | | | € millions | | 12/31/20212022 | | | Purchase Obligations | Due 20222023 | | 1,1991,682
| Due 20232024 to 20262027 | | 2,9464,441
| Due thereafter | | 6341,512
| Total | | 4,7797,635
|
Section E — Capital Structure, Financing, and Liquidity This section describes how SAP manages its capital structure. Our capital management is based on a high equity ratio, modest financial leverage, a well-balanced maturity profile, and deep debt capacity. (E.1) Capital Structure Management The primary objective of our capital structure management is to maintain a strong financial profile for investor, creditor, and customer confidence, and to support the growth of our business. We seek to maintain a capital structure that will allow us to continuously cover our funding requirements through the capital markets on reasonable terms and, in so doing, ensure a high level of independence, confidence, and financial flexibility. SAP SE’s long-term credit rating is “A2” by Moody’s (positive outlook) and “A” by Standard & Poor’s both with stable outlook.(stable outlook). | | | | | | | | | | | | | | | | | | | | | | | 12/31/2021 | | 12/31/2020 | | | | 12/31/2022 | | 12/31/2021 | | | | | € millions | | % of | | € millions | | % of | | ∆ in % | | € millions | | % of | | € millions | | % of | | ∆ in % | | | | | Total Equity and | | | | Total Equity and | | | | | | Total Equity and | | | | Total Equity and | | | | | | | Liabilities | | | | Liabilities | | | | | | Liabilities | | | | Liabilities | | | / Equity | | 41,523 | | 58 | | 29,927 | | 51 | | 39 | | 42,848 | | 59 | | 41,523 | | 58 | | 3 | / Current liabilities | | 16,136 | | 23 | | 12,842 | | 22 | | 26 | | 17,453 | | 24 | | 16,136 | | 23 | | 8 | / Non-current liabilities | | 13,510 | | 19 | | 15,696 | | 27 | | -14 | | 11,858 | | 16 | | 13,515 | | 19 | | -12 | / Liabilities | | 29,646 | | 42 | | 28,537 | | 49 | | 4 | | 29,311 | | 41 | | 29,651 | | 42 | | -1 | Thereof financial debt | | 13,094 | | 18 | | 13,283 | | 23 | | -1 | | 11,764 | | 16 | | 13,094 | | 18 | | -10 | Thereof lease liabilities | | 2,143 | | 3 | | 2,120 | | 4 | | 1 | | 2,140 | | 3 | | 2,143 | | 3 | | 0 | / Total equity and liabilities | | 71,169 | | 100 | | 58,464 | | 100 | | 22 | | 72,159 | | 100 | | 71,174 | | 100 | | 1 |
In 2021, we drew 2 short-term loans of €950 million and €500 million with the tenor of one year and a flexible repayment schedule, as well as €150 million in issued commercial paper (CP). At maturity, we repaid €500€900 million in Eurobonds as well as €150and US$445 million in CP. Making use of the flexible structure, we further repaid €1,250 million in acquisition loan for Qualtrics prior to its final maturity dateprivate placements in 2022. The ratio of total nominal volume of financial debt to total equity and liabilities decreased 42 pp.
(E.2) Total Equity y Accounting for Interests in Subsidiaries Changes in SAP's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. When SAP loses control over the subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests (NCI) and other components of equity. Any resulting gain or loss is recognized in profit or loss. Issued Capital SAP SE has issued no-par value bearer shares with a calculated nominal value of €1 per share. All of the shares issued are fully paid. Number of Shares | | | | | | | Issued | | Treasury | Millions | | Capital | | Shares | 1/1/2019 | | 1,228.5 | | -34.9 | 12/31/2019 | | 1,228.5 | | -34.9 | Purchase of treasury shares | | 0 | | -14.1 | 12/31/2020 | | 1,228.5 | | -48.9 | 12/31/2021 | | 1,228.5 | | -48.9 |
On January 13, 2022, SAP announced a new share repurchase program to service future share-based compensation awards. The program, with a volume of up to €1 billion, is planned to be executed in the period between February 1, 2022, and December 31, 2022.
| | | | | | | Issued | | Treasury | Millions | | Capital | | Shares | 1/1/2020 | | 1,228.5 | | -34.9 | Purchase of treasury shares | | 0 | | -14.1 | 12/31/2020 | | 1,228.5 | | -48.9 | 12/31/2021 | | 1,228.5 | | -48.9 | Purchase of treasury shares | | 0 | | -15.7 | Reissuance of treasury shares under share-based payments | | 0 | | 3.3 | 12/31/2022 | | 1,228.5 | | -61.4 |
In 2022, SAP completed two new share repurchase programs. The repurchased shares will primarily be used to service future share-based compensation awards. The programs with a total volume of €1,500 million were executed in the period between February 1, 2022, and September 6, 2022. In September and December 2022, we reissued 3.3 million treasury shares to service share-based payment awards under our Move SAP Plan. Authorized Shares
The Articles of Incorporation authorize the Executive Board to increase the issued capital as follows: - By up to a total amount of €250 million by issuing new no-par value bearer shares against contributions in cash until May 19, 2025 (Authorized Capital I). The issuance is subject to the statutory subscription rights of existing shareholders. - By up to a total amount of €250 million by issuing new no-par value bearer shares against contributions in cash or in kind until May 19, 2025 (Authorized Capital II). Subject to the consent of the Supervisory Board, the Executive Board is authorized to exclude the shareholders’ statutory subscription rights in certain cases. Contingent Shares
SAP SE’s share capital is subject to a contingent capital increase, which may be effected only to the extent that the holders or creditors of convertible bonds or stock options issued or guaranteed by SAP SE or any of its directly or indirectly controlled subsidiaries under certain share-based payments exercise their conversion or subscription rights, and no other methods for servicing these rights are used. As at December 31, 2021,2022, €100 million, representing 100 million shares, was still available for issuance (2020:(2021: €100 million). Other Components of Equity | | | | | | | | | | | | | € millions | | Exchange | | Cash Flow | | Total | | Exchange | | Cash Flow | | Total | | | Differences | | Hedges/Cost of | | | | Differences | | Hedges/Cost of | | | | | | | Hedging | | | | | | Hedging | | | 1/1/2019 | | 1,239 | | -5 | | 1,234 | | Other comprehensive income for items that will be reclassified to profit or loss, net of tax | | 537 | | -1 | | 536 | | 12/31/2019 | | 1,776 | | -6 | | 1,770 | | 1/1/2020 | | | 1,776 | | -6 | | 1,770 | Other comprehensive income for items that will be reclassified to profit or loss, net of tax | | -2,792 | | 10 | | -2,782 | | -2,792 | | 10 | | -2,782 | 12/31/2020 | | -1,016 | | 4 | | -1,012 | | -1,016 | | 4 | | -1,012 | Other comprehensive income for items that will be reclassified to profit or loss, net of tax | | 2,846 | | -26 | | 2,819 | | 2,846 | | -26 | | 2,819 | 12/31/2021 | | 1,830 | | -22 | | 1,808 | | 1,830 | | -22 | | 1,808 | Other comprehensive income for items that will be reclassified to profit or loss, net of tax | | | 2,186 | | 39 | | 2,224 | 12/31/2022 | | | 4,015 | | 16 | | 4,031 |
Treasury Shares By resolution of SAP SE’s Annual General Meeting of Shareholders held on May 17, 2018, the authorization granted by the Annual General Meeting of Shareholders on June 4, 2013, regarding the acquisition of treasury shares was revoked to the extent it had not been exercised at that time, and replaced by a new authorization of the Executive Board of SAP SE to acquire, on or before May 16, 2023, shares of SAP SE representing a pro rata amount of capital stock of up to €120 million in aggregate, provided that the shares purchased under the authorization, together with any other shares in the Company previously acquired and held by, or attributable to, SAP SE do not account for more than 10% of SAP SE’s issued share capital. Although treasury shares are legally considered outstanding, there are no dividend or voting rights associated with them. We may redeem or resell shares held in treasury, or we may use treasury shares for the purpose of servicing option or conversion rights under the Company’s share-based payment plans. Also, we may use shares held in treasury as consideration in connection with mergers with, or acquisitions of, other companies. Distribution Policy and Dividends Our general intention is to remain in a position to return liquidity to our shareholders by distributing annual dividends totaling 40% or more of our profit after tax and by potentially repurchasing treasury shares in future. In 2021,2022, we distributed €2,865 million (€2.45 per share, including a special dividend of €0.50 to celebrate SAP's 50th anniversary) in dividends for 2021 compared to €2,182 million (€1.85 per share) paid in dividends2021 for 2020 compared toand €1,864 million (€1.58 per share) paid in 2020 for 2019 and €1,790 million (€1.50 per share) paid in 2019 for 2018.2019. The total dividend available for distribution to SAP SE shareholders is based on the profits of SAP SE as reported in its statutory financial statements prepared under the accounting rules in the German Commercial Code (Handelsgesetzbuch). For the year ended December 31, 2021,2022, the Executive Board intends to propose that a dividend of €2.45€2.05 per share (that is, an estimated total dividend of €2,890€2,393 million), be paid from the profits of SAP SE, which includes an extraordinary dividend component of €0.50 per share to celebrate SAP’s 50th anniversary in 2022.SE. Non-Controlling Interests On January 28, 2021,In 2022, Qualtrics successfully issued 12% of itsnew shares onto serve share-based payment awards under the Nasdaq Stock Market (NASDAQ). The IPO-related cash inflow amounted to €1,847 million and the initial value of non-controlling interests in net assets was €909 million.
On October 1, 2021, Qualtrics completed its acquisition of Clarabridge in the form of Qualtrics shares and cash. Following the issuance of new Qualtrics shares, SAP’s ownershipOmnibus plan, which further decreased to 78%, resulting in an additional value of non-controlling interests of €261 million in net assets to be recognized.
On November 11, 2021, Qualtrics announced the closing of its public offering and issued an additional 4% of its shares, which reduced SAP’s ownership in Qualtrics to 71% (2021: 74%). The offering-relatedIn 2021, offerings-related cash inflow amounted to €981€2,828 million and the corresponding value of non-controlling interests in net assets was €250€1,159 million. In 2022, a loss of €366 million (2021: €274 million) was attributed to non-controlling interests.
(E.3) Liquidity y Accounting for Non-Derivative Financial Instruments | | Classification and Measurement of Non-Derivative Financial Debt Investments | | Our non-derivative financial debt investments comprise cash at banks and cash equivalents (highly liquid investments with original maturities of three months or less, such as time deposits and money-market funds), loans and other financial receivables, and acquired debt securities. As we do not designate financial assets as “at fair value through profit or loss,” we generally classify financial assets as: at amortized cost (AC), at fair value through other comprehensive income (FVOCI), or at fair value through profit or loss (FVTPL), depending on the contractual cash flows of, and our business model for, holding the respective asset. Financial assets having cash flow characteristics other than solely principal and interest such as money market and similar funds are generally classified as FVTPL. Generally, all other financial assets with cash flows consisting solely of principal and interest are classified as AC because we follow a conservative investment approach, safeguarding our liquidity by ensuring the safety of principal investment amounts. Gains/losses on non-derivative financial debt investments at FVTPL are reported in Financial income, net and show interest income/expenses separately from other gains/losses which include gains/losses from fair value fluctuations and disposals. Gains/losses on non-derivative financial debt investments at AC are reported in Financial income, net and show interest income/expenses separately from other gains/losses which include gains/losses on disposals and changes in expected and incurred credit losses. Gains/losses from foreign currency exchange rate fluctuations are included in Other non-operating income/expense, net. Regular way purchases and sales are recorded as at the trade date. |
Impairment of Non-Derivative Financial Debt Investments For these financial assets, we apply considerable judgment by employing the general impairment approach as follows: - For cash at banks, time deposits, and debt securities such as acquired bonds and acquired commercial paper,papers, we apply the low credit risk exception, as it is our policy to invest only in high-quality assets of issuers with a minimum rating of at least investment grade to minimize the risk of credit losses. Thus, these assets are always allocated to stage 1 of the three-stage credit loss model, and we record a loss allowance at an amount equal to 12-month expected credit losses. This loss allowance is calculated based on our exposure at the respective reporting date, the loss given default for this exposure, and the credit default swap spread as a measure for the probability of default. Even though we invest only in assets of at least investment-grade, we also closely observe the development of credit default swap spreads as a measure of market participants’ assessments of the creditworthiness of a debtor to evaluate probable significant increases in credit risk to timely react to changes should these manifest. Among others, we consider cash at banks, time deposits, and debt securities to be in default when the counterparty is unlikely to pay its obligations in full, when there is information about a counterparty’s financial difficulties or if there is a drastic increase in a counterparty’s credit default swap spread for a prolonged time period while the overall market environment remains generally stable. Such financial assets are written off either partially or in full if the likelihood of recovery is considered remote, which might be evidenced, for example, by the bankruptcy of a counterparty of such financial assets. - Loans and other financial receivables are monitored based on borrower-specific internal and external information to determine whether there has been a significant increase in credit risk since initial recognition. We consider such assets to be in default if they are significantly beyond their due date or if the borrower is unlikely to pay its obligation. A write-off occurs when the likelihood of recovery is considered remote, for example when bankruptcy proceedings have been finalized or when all enforcement efforts have been exhausted. | Non-Derivative Financial Liabilities | Non-derivative financial liabilities include bank loans, issued bonds, private placements, and other financial liabilities. Included in otherOther financial liabilities arealso include customer funding liabilities which are funds we draw from and make payments on behalf of our customers for customers’ employee expense reimbursements, related credit card payments, and vendor payments. We present these funds in cash and cash equivalents and record our obligation to make these expense reimbursements and payments on behalf of our customers as customer funding liabilities. As we do not designate financial liabilities as FVTPL, we generally classify non-derivative financial liabilities as AC. Expenses and gains or losses on financial liabilities at AC mainly consist of interest expense which is shown in Financial income, net. Gains/losses from foreign currency exchange rate fluctuations are included in Other non-operating income/expense, net. Group Liquidity, Financial Debt, and Net Debt Group liquidity consists of cash at banks, money market and other funds, as well as time deposits and debt securities (both with remaining maturities of less than one year). Financial debt is defined as the nominal volume of bank loans, issued commercial paper,papers, private placements, and bonds. Net debt is group liquidity less financial debt. |
Group Liquidity and Net Debt | | | | | | | € millions | | 2022 | | 2021 | | ∆ | / Cash and cash equivalents | | 9,008 | | 8,898 | | 109 | Current time deposits and debt securities | | 686 | | 2,632 | | -1,946 | Group liquidity | | 9,694 | | 11,530 | | -1,837 | Current financial debt | | -3,986 | | -3,755 | | -230 | Non-current financial debt | | -7,778 | | -9,338 | | 1,560 | Financial debt | | -11,764 | | -13,094 | | 1,330 | Net debt (–) | | -2,070 | | -1,563 | | -507 |
While we continuously monitor the ratios presented in the capital structure table, we actively manage our liquidity and structure of our financial indebtedness based on the ratios group liquidity and net debt. Group Liquidity and Net Debt
| | | | | | | € millions | | 2021 | | 2020 | | ∆ | / Cash and cash equivalents | | 8,898 | | 5,311 | | 3,587 | Current time deposits and debt securities | | 2,632 | | 1,470 | | 1,162 | Group liquidity | | 11,530 | | 6,781 | | 4,750 | Current financial debt | | -3,755 | | -1,482 | | -2,273 | Non-current financial debt | | -9,338 | | -11,801 | | 2,463 | Financial debt | | -13,094 | | -13,283 | | 189 | Net debt (–) | | -1,563 | | -6,503 | | 4,939 |
While we continuously monitor the ratios presented in the capital structure table, we actively manage our liquidity and structure of our financial indebtedness based on the ratios group liquidity and net debt.
Cash and Cash Equivalents | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | Cash at banks | | 3,149 | | 0 | | 3,149 | | 2,732 | | 0 | | 2,732 | | 3,176 | | 0 | | 3,176 | | 3,149 | | 0 | | 3,149 | Time deposits | | 1,420 | | 0 | | 1,420 | | 927 | | 0 | | 927 | | 2,932 | | 0 | | 2,932 | | 1,420 | | 0 | | 1,420 | Money market and other funds | | 4,281 | | 0 | | 4,281 | | 1,655 | | 0 | | 1,655 | | 2,855 | | 0 | | 2,855 | | 4,281 | | 0 | | 4,281 | Debt securities | | 50 | | 0 | | 50 | | 0 | | 0 | | 0 | | 47 | | 0 | | 47 | | 50 | | 0 | | 50 | Expected credit loss allowance | | -3 | | 0 | | -3 | | -3 | | 0 | | -3 | | -3 | | 0 | | -3 | | -3 | | 0 | | -3 | / Cash and cash equivalents | | 8,898 | | 0 | | 8,898 | | 5,311 | | 0 | | 5,311 | | 9,008 | | 0 | | 9,008 | | 8,898 | | 0 | | 8,898 |
Non-Derivative Financial Debt Investments | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | Time deposits | | 2,605 | | 0 | | 2,605 | | 1,448 | | 0 | | 1,448 | | 657 | | 0 | | 657 | | 2,605 | | 0 | | 2,605 | Debt securities | | 30 | | 0 | | 30 | | 24 | | 0 | | 24 | | 32 | | 0 | | 32 | | 30 | | 0 | | 30 | Financial instruments related to employee benefit plans | | 0 | | 201 | | 201 | | 0 | | 162 | | 162 | | 0 | | 203 | | 203 | | 0 | | 201 | | 201 | Loans and other financial receivables | | 79 | | 107 | | 186 | | 83 | | 107 | | 190 | | 104 | | 129 | | 233 | | 79 | | 107 | | 186 | Expected credit loss allowance | | -3 | | 0 | | -3 | | -3 | | 0 | | -3 | | -3 | | 0 | | -3 | | -3 | | 0 | | -3 | Non-derivative financial debt investments | | 2,711 | | 308 | | 3,019 | | 1,552 | | 269 | | 1,822 | | 790 | | 332 | | 1,122 | | 2,711 | | 308 | | 3,019 | / Other financial assets | | 2,758 | | 6,275 | | 9,033 | | 1,635 | | 3,512 | | 5,147 | | 853 | | 5,626 | | 6,479 | | 2,758 | | 6,275 | | 9,033 | Non-derivative financial debt investments as % of / Other financial assets | | 98 | | 5 | | 33 | | 95 | | 8 | | 35 | | 93 | | 6 | | 17 | | 98 | | 5 | | 33 |
Time deposits with original maturity of three months or less are presented as cash and cash equivalents, and those with original maturities of greater than three months (investments considered in group liquidity) are presented as other financial assets. Debt securities consist of acquired CPcommercial papers and acquired bonds of mainly financial and non-financial corporations and municipalities. For more information about financial risk and the nature of risk, see Note (F.1). Financial Debt | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | | | Nominal Volume | | Carrying Amount | | Nominal Volume | | Carrying Amount | | Nominal Volume | | Carrying Amount | | Nominal Volume | | Carrying Amount | | | Current | | Non-Current | | Current | | Non-Current | | Total | | Current | | Non-Current | | Current | | Non-Current | | Total | | Current | | Non-Current | | Current | | Non-Current | | Total | | Current | | Non-Current | | Current | | Non-Current | | Total | Bonds | | 900 | | 8,965 | | 900 | | 8,851 | | 9,751 | | 500 | | 9,844 | | 500 | | 9,868 | | 10,369 | | 1,600 | | 7,381 | | 1,600 | | 6,556 | | 8,155 | | 900 | | 8,965 | | 900 | | 8,851 | | 9,751 | Private placement transactions | | 393 | | 373 | | 396 | | 393 | | 790 | | 0 | | 707 | | 0 | | 742 | | 742 | | 0 | | 397 | | 0 | | 405 | | 405 | | 393 | | 373 | | 396 | | 393 | | 790 | Commercial paper | | 930 | | 0 | | 931 | | 0 | | 931 | | 930 | | 0 | | 931 | | 0 | | 931 | | 930 | | 0 | | 928 | | 0 | | 928 | | 930 | | 0 | | 931 | | 0 | | 931 | Bank loans | | 1,533 | | 0 | | 1,533 | | 0 | | 1,533 | | 52 | | 1,250 | | 52 | | 1,250 | | 1,302 | | 1,456 | | 0 | | 1,456 | | 0 | | 1,456 | | 1,533 | | 0 | | 1,533 | | 0 | | 1,533 | Financial debt | | 3,756 | | 9,338 | | 3,760 | | 9,245 | | 13,005 | | 1,482 | | 11,801 | | 1,484 | | 11,860 | | 13,344 | | 3,986 | | 7,778 | | 3,983 | | 6,960 | | 10,943 | | 3,756 | | 9,338 | | 3,760 | | 9,245 | | 13,005 | / Financial liabilities | | | | | | 4,528 | | 11,042 | | 15,570 | | | | | | 2,348 | | 13,605 | | 15,953 | | | | | | 4,808 | | 9,547 | | 14,354 | | | | | | 4,528 | | 11,042 | | 15,570 | Financial debt as % of / Financial liabilities | | | | | | 83 | | 84 | | 84 | | | | | | 63 | | 87 | | 84 | | | | | | 83 | | 73 | | 76 | | | | | | 83 | | 84 | | 84 |
Financial liabilities are unsecured, except for the retention of title and similar rights customary in our industry. Effective interest rates on our financial debt (including the effects from interest rate swaps) were 1.23% in 2022, 0.83% in 2021, and 0.87% in 2020, and 1.09% in 2019.2020. For more information about the risk associated with our financial liabilities, see Note (F.1). For more information about fair values, see Note (F.2). Bonds | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2021 | | 2020 | | 2022 | | 2021 | | | Maturity | | Issue Price | | Coupon Rate | | Effective Interest | | Nominal Volume | | Carrying | | Carrying | | Maturity | | Issue Price | | Coupon Rate | | Effective Interest | | Nominal Volume | | Carrying | | Carrying | | | | | | | | | Rate | | (in respective | | Amount | | Amount | | | | | | | | Rate | | (in respective | | Amount | | Amount | | | | | | | | | | | currency | | (in € millions) | | (in € millions) | | | | | | | | | | currency | | (in € millions) | | (in € millions) | | | | | | | | | | | in millions) | | | | | | | | | | | | | | in millions) | | | | | Eurobond 8 – 2014 | | 2023 | | 99.478 | % | 1.125% (fix) | | 1.24 | % | € | 1,000 | | 999 | | 998 | | 2023 | | 99.478 | % | 1.125% (fix) | | 1.24 | % | € | 1,000 | | 1,000 | | 999 | Eurobond 9 – 2014 | | 2027 | | 99.284 | % | 1.750% (fix) | | 1.87 | % | € | 1,000 | | 985 | | 1,006 | | 2027 | | 99.284 | % | 1.750% (fix) | | 1.87 | % | € | 1,000 | | 869 | | 985 | Eurobond 12 – 2015 | | 2025 | | 99.264 | % | 1.000% (fix) | | 1.13 | % | € | 600 | | 597 | | 597 | | 2025 | | 99.264 | % | 1.000% (fix) | | 1.13 | % | € | 600 | | 598 | | 597 | Eurobond 14 – 2018 | | 2021 | | 100.519 | % | 0.000% (var.) | | -0.15 | % | € | 500 | | 0 | | 500 | | Eurobond 15 – 2018 | | 2026 | | 99.576 | % | 1.000% (fix) | | 1.06 | % | € | 500 | | 499 | | 498 | | 2026 | | 99.576 | % | 1.000% (fix) | | 1.06 | % | € | 500 | | 499 | | 499 | Eurobond 16 – 2018 | | 2030 | | 98.687 | % | 1.375% (fix) | | 1.50 | % | € | 500 | | 491 | | 510 | | 2030 | | 98.687 | % | 1.375% (fix) | | 1.50 | % | € | 500 | | 401 | | 491 | Eurobond 18 – 2018 | | 2022 | | 99.654 | % | 0.250% (fix) | | 0.36 | % | € | 900 | | 900 | | 899 | | 2022 | | 99.654 | % | 0.250% (fix) | | 0.36 | % | € | 900 | | 0 | | 900 | Eurobond 19 – 2018 | | 2024 | | 99.227 | % | 0.750% (fix) | | 0.89 | % | € | 850 | | 847 | | 845 | | 2024 | | 99.227 | % | 0.750% (fix) | | 0.89 | % | € | 850 | | 848 | | 847 | Eurobond 20 – 2018 | | 2028 | | 98.871 | % | 1.250% (fix) | | 1.38 | % | € | 1,000 | | 982 | | 1,009 | | 2028 | | 98.871 | % | 1.250% (fix) | | 1.38 | % | € | 1,000 | | 843 | | 982 | Eurobond 21 – 2018 | | 2031 | | 98.382 | % | 1.625% (fix) | | 1.78 | % | € | 1,250 | | 1,223 | | 1,279 | | 2031 | | 98.382 | % | 1.625% (fix) | | 1.78 | % | € | 1,250 | | 976 | | 1,223 | Eurobond 22 – 2020 | | 2023 | | 99.794 | % | 0.000% (fix) | | 0.07 | % | € | 600 | | 599 | | 599 | | 2023 | | 99.794 | % | 0.000% (fix) | | 0.07 | % | € | 600 | | 600 | | 599 | Eurobond 23 – 2020 | | 2026 | | 99.200 | % | 0.125% (fix) | | 0.26 | % | € | 600 | | 596 | | 596 | | 2026 | | 99.200 | % | 0.125% (fix) | | 0.26 | % | € | 600 | | 597 | | 596 | Eurobond 24 – 2020 | | 2029 | | 98.787 | % | 0.375% (fix) | | 0.51 | % | € | 800 | | 769 | | 789 | | 2029 | | 98.787 | % | 0.375% (fix) | | 0.51 | % | € | 800 | | 643 | | 769 | Eurobonds | | | | | | | | | | | | | 9,487 | | 10,125 | | | | | | | | | | | | | 7,874 | | 9,487 | USD bond - 2018 | | 2025 | | 100.000 | % | 0.721% (var.) | | 0.80 | % | US$ | 300 | | 264 | | 243 | | 2025 | | 100.000 | % | 4.69% (fix) | | 4.74 | % | US$ | 300 | | 281 | | 264 | Bonds | | | | | | | | | | | | | 9,751 | | 10,369 | | | | | | | | | | | | | 8,155 | | 9,751 |
All of our Eurobonds are listed for trading on the Luxembourg Stock Exchange. Private Placements | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2021 | | 2020 | | 2022 | | 2021 | | | Maturity | | Coupon Rate | | Effective Interest | | Nominal Volume | | Carrying Amount | | Carrying Amount | | Maturity | | Coupon Rate | | Effective Interest | | Nominal Volume | | Carrying Amount | | Carrying Amount | | | | | | | Rate | | (in respective | | (in € millions) | | (in € millions) | | | | | | Rate | | (in respective | | (in € millions) | | (in € millions) | | | | | | | | | currency in | | | | | | | | | | | | currency in | | | | | | | | | | | | | millions) | | | | | | | | | | | | millions) | | | | | U.S. private placements | | | | | | | | | | | | | | | | | | | | | | | | | | | Tranche 7 – 2012 | | 2022 | | 3.18% (fix) | | 3.22 | % | US$ | 444.5 | | 396 | | 373 | | 2022 | | 3.18% (fix) | | 3.22 | % | US$ | 444.5 | | 0 | | 396 | Tranche 8 – 2012 | | 2024 | | 3.33% (fix) | | 3.37 | % | US$ | 323 | | 300 | | 281 | | 2024 | | 3.33% (fix) | | 3.37 | % | US$ | 323 | | 306 | | 300 | Tranche 9 – 2012 | | 2027 | | 3.53% (fix) | | 3.57 | % | US$ | 100 | | 94 | | 88 | | 2027 | | 3.53% (fix) | | 3.57 | % | US$ | 100 | | 99 | | 94 | Private placements | | | | | | | | | | | 790 | | 742 | | | | | | | | | | | 405 | | 790 |
The U.S. private placement notes were issued by one of our subsidiaries that has the U.S. dollar as its functional currency. Commercial Paper Program The net proceeds from our commercial paper program (Commercial Paper, or CP) program are being used for general corporate purposes, including dividends and share repurchases. As at December 31, 2021,2022, we had €930 million of issued commercial paperpapers outstanding with maturities generally less than six months and the carrying amount was €931€928 million (December 31, 2020:2021: €931 million). The weighted average interest rate of our CP was -0.48%1.96% as at December 31, 20212022 (December 31, 2020: -0.40%2021: -0.48%). Loans In 2021, prior to its original maturity date, SAP repaid the remaining €1,250 million from the term loan drawn in 2019 for the acquisition of Qualtrics.
In March 2021, SAP drew two short-term bank loans of €950 million and €500 million with original tenors of one year. In November 2021, the tenors were extended toyear that can be flexibly repaid until September 30, 2022. The loans can be repaid flexibly over time,2023, and currently bear interest at 0.55%3.25% and 0.52%3.22%, respectively. Reconciliation of Liabilities Arising from Financing Activities The changes in our financial debts are reconciled to the cash flows from borrowings included in the cash flow from financing activities. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | 1/1/2021 | | Cash Flows | | Business | | Foreign | | Fair Value | | Other | | 12/31/2021 | | 1/1/2022 | | Cash Flows | | Business | | Foreign | | Fair Value | | Other | | 12/31/2022 | | | | | | | Combinations | | Currency | | Changes | | | | | | | | | | Combinations | | Currency | | Changes | | | | | Current financial debt | | 1,482 | | 980 | | 1 | | 1 | | 0 | | 1,291 | | 3,755 | | 3,755 | | -1,406 | | 0 | | 36 | | 0 | | 1,600 | | 3,986 | Non-current financial debt | | 11,801 | | -1,252 | | 2 | | 78 | | 0 | | -1,291 | | 9,338 | | 9,338 | | 0 | | 0 | | 40 | | 0 | | -1,600 | | 7,778 | Financial debt (nominal volume) | | 13,283 | | -272 | | 3 | | 79 | | 0 | | 0 | | 13,094 | | 13,094 | | -1,406 | | 0 | | 76 | | 0 | | 0 | | 11,764 | Basis adjustment | | 126 | | 0 | | 0 | | 3 | | -163 | | 0 | | -34 | | -34 | | 0 | | 0 | | 2 | | -741 | | 0 | | -773 | Transaction costs | | -66 | | 0 | | 0 | | 0 | | 0 | | 11 | | -55 | | -55 | | 0 | | 0 | | 0 | | 0 | | 8 | | -47 | Financial debt (carrying amount) | | 13,344 | | -272 | | 3 | | 82 | | -163 | | 11 | | 13,005 | | 13,005 | | -1,406 | | 0 | | 77 | | -741 | | 8 | | 10,943 | Accrued interest | | 61 | | 0 | | 0 | | 0 | | 0 | | -1 | | 60 | | Accrued interest and payment to banks | | | 60 | | 119 | | 0 | | 0 | | 0 | | 24 | | 203 | Interest rate swaps | | -114 | | 0 | | 0 | | -1 | | 157 | | 0 | | 42 | | 42 | | 0 | | 0 | | -1 | | 711 | | 0 | | 753 | Lease1 | | 2,120 | | -374 | | 4 | | 106 | | 0 | | 287 | | 2,143 | | 2,143 | | -424 | | 0 | | 55 | | 0 | | 366 | | 2,140 | Total liabilities from financing activities | | 15,411 | | -646 | | 7 | | 187 | | -6 | | 297 | | 15,250 | | 15,250 | | -1,711 | | 0 | | 131 | | -29 | | 398 | | 14,039 |
1 Other includes new lease liabilities. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | 1/1/2020 | | Cash Flows | | Business | | Foreign | | Fair Value | | Other | | 12/31/2020 | | 1/1/2021 | | Cash Flows | | Business | | Foreign | | Fair Value | | Other | | 12/31/2021 | | | | | | | Combinations | | Currency | | Changes | | | | | | | | | | Combinations | | Currency | | Changes | | | | | Current financial debt | | 2,529 | | -2,282 | | 2 | | -17 | | 0 | | 1,251 | | 1,482 | | 1,482 | | 980 | | 1 | | 1 | | 0 | | 1,291 | | 3,755 | Non-current financial debt | | 11,139 | | 2,000 | | 1 | | -88 | | 0 | | -1,251 | | 11,801 | | 11,801 | | -1,252 | | 2 | | 78 | | 0 | | -1,291 | | 9,338 | Financial debt (nominal volume) | | 13,668 | | -282 | | 2 | | -105 | | 0 | | 0 | | 13,283 | | 13,283 | | -272 | | 3 | | 79 | | 0 | | 0 | | 13,094 | Basis adjustment | | 13 | | 0 | | 0 | | -4 | | 117 | | 0 | | 126 | | 126 | | 0 | | 0 | | 3 | | -163 | | 0 | | -34 | Transaction costs | | -64 | | -16 | | 0 | | 0 | | 0 | | 14 | | -66 | | -66 | | 0 | | 0 | | 0 | | 0 | | 11 | | -55 | Financial debt (carrying amount) | | 13,616 | | -298 | | 2 | | -109 | | 117 | | 14 | | 13,344 | | 13,344 | | -272 | | 3 | | 82 | | -163 | | 11 | | 13,005 | Accrued interest | | 67 | | 0 | | 0 | | 0 | | 0 | | -6 | | 61 | | 61 | | 0 | | 0 | | 0 | | 0 | | -1 | | 60 | Interest rate swaps | | 7 | | 0 | | 0 | | 2 | | -123 | | 0 | | -114 | | -114 | | 0 | | 0 | | -1 | | 157 | | 0 | | 42 | Lease1 | | 2,204 | | -378 | | 15 | | -125 | | 0 | | 404 | | 2,120 | | 2,120 | | -374 | | 4 | | 106 | | 0 | | 287 | | 2,143 | Total liabilities from financing activities | | 15,895 | | -675 | | 17 | | -233 | | -5 | | 413 | | 15,411 | | 15,411 | | -646 | | 7 | | 187 | | -6 | | 297 | | 15,250 |
1 Other includes new lease liabilities.
Section F — Management of Financial Risk Factors This section discusses financial risk factors and risk management regarding foreign currency exchange rate risk, interest rate risk, equity price risk, credit risk, and liquidity risk. Further, it contains information about financial instruments. (F.1) Financial Risk Factors and Risk Management y Accounting for Derivative Financial Instruments | We use derivatives to hedge foreign currency risk or interest rate risk and designate them as cash flow or fair value hedges if they qualify for hedge accounting under IFRS 9, which involves judgment. Derivatives Not Designated as Hedging Instruments Many transactions constitute economic hedges, and therefore contribute effectively to the securing of financial risks but do not qualify for hedge accounting under IFRS 9. To hedge currency risks inherent in foreign-currency denominated and recognized monetary assets and liabilities, we do not designate our held-for-trading derivative financial instruments as accounting hedges, because the profits and losses from the underlying transactions are recognized in profit or loss in the same periods as the profits or losses from the derivatives. In addition, we occasionally have contracts that contain foreign currency embedded derivatives that are required to be accounted for separately. Fair value fluctuations in the spot component of such derivatives at FVTPL are included in Other non-operating income/expense, net while the forward element is shown in Financial income, net. |
Derivatives Designated as Hedging Instruments a) Cash Flow Hedge In general, we apply cash flow hedge accounting to the foreign currency risk of highly probable forecasted transactions. With regard to foreign currency risk, hedge accounting relates to the spot price and the intrinsic values of the derivatives designated and qualifying as cash flow hedges. Accordingly, the effective portion of these components determined on a present value basis is recorded in other comprehensive income. The forward element and time value as well as foreign currency basis spreads excluded from the hedging relationship are recorded as cost of hedging in a separate position in other comprehensive income. As the amounts are not material, they are presented together with the effective portion of the cash flow hedges in our consolidated statements of comprehensive income and consolidated statements of changes in equity. All other components including counterparty credit risk adjustments of the derivative and the ineffective portion are immediately recognized in Financial Income, net in profit or loss. Amounts accumulated in other comprehensive income are reclassified to profit or loss to Other non-operating income/expense, net and Financial income, net in the same period when the hedged item affects profit or loss.
b) Fair Value Hedge We apply fair value hedge accounting for certain of our fixed-rate financial liabilities and show the fair value fluctuations in Financial income, net.
c) Valuation and Testing of Effectiveness At inception of a designated hedging relationship, we document our risk management strategy and the economic relationship between hedged item and hedging instrument. The existence of an economic relationship is demonstrated as well as the effectiveness of the hedging relationship tested prospectively by applying the critical terms match for our foreign currency hedges, since currencies, maturities, and the amounts are closely aligned for the forecasted transactions and for the spot element of the forward exchange rate contract or intrinsic value of the currency options, respectively. For interest rate swaps, effectiveness is tested prospectively using statistical methods in the form of a regression analysis, by which the validity and extent of the relationship between the change in value of the hedged items as the independent variable and the fair value change of the derivatives as the dependent variable is determined. The main sources of ineffectiveness are: - The effect of the counterparty and our own credit risk on the fair value of the forward exchange contracts and interest rate swaps, which is not reflected in the respective hedged item, and - Differences in the timing of hedged item and hedged transaction in our cash flow hedges. |
| Amendments to IFRS 9, IAS 39, IFRS 16, IFRS 4, and IFRS 7 – Interest Rate Benchmark Reform | The IASB issued amendments to IFRS 9, IAS 39, IFRS 16, IFRS 4, and IFRS 7 on August 26,27, 2020, completing Phase 2 of the Interest Rate Benchmark Reform (IBOR reform) project. This was necessary because major interest rate benchmarks were reformed or even replaced.
We are exposed to interest rate benchmarks due to our investing, financing, and hedging activities. The impact of the interest rate benchmark reform, however, is very limited either because the interest rate benchmarks we are mainly using will stay in place (that is, Euribor, USD Fed Funds Rate), the instruments will mature well before the respective benchmark rate is discontinued, or because the instruments have fixed interest rates.
We are impacted by the IBOR reform with regard to:
- Derivatives held in a hedging relationship: We have already replaced the old interest rate benchmark with the new risk-free rate for our EUR interest rate swaps designated in hedging relationships for which we transitioned from EONIA to Euro Short-Term Rate (€STR) +8.5bps in the first quarter of 2021, or
- Non-derivative financial instruments: We have already replaced the old interest rate benchmark for our USD bond of US$300 million during the course of 2022, for which we transitioned from the three-month USD LIBOR to a fixed rate in the last quarter of 2022. We are in the process of reviewing andour €2.5 billion syndicated credit facility agreement, which allows us to borrow in U.S. dollars with interest payments based on LIBOR, with the aim of amending the respective contracts wellcontract before the respective IBOR willis no longer be quoted, which is the case for our USD bond of US$300 million referencing to three-month USD LIBOR. quoted.
We continue to monitor the IBOR reform project, assess any impact, manage our transition to alternative benchmark rates, and provide respective disclosures. Apart from that, the IBOR reform had no impact on our risk management strategy. |
We are exposed to various financial risks, such as market risks (that is, foreign currency exchange rate risk, interest rate risk, and equity price risk), credit risk, and liquidity risk. We manage market risks, credit risk, and liquidity risk on a Group-wide basis through our global treasury department, global risk management, and global credit management. Risk management policies are established to identify risks, to set appropriate risk limits, and to monitor risks. Risk management policies and hedging strategies are laid out in our internal guidelines (for example, treasury guideline and other internal guidelines), and are subject to continuous internal review, analysis, and update to reflect changes in market conditions and our business. We only purchase derivative financial instruments to reduce risks and not for speculation, which is defined as entering into derivative instruments without a corresponding underlying transaction. Foreign Currency Exchange Rate Risk Foreign Currency Exchange Rate Risk Factors As we are active worldwide, our ordinary operations are subject to risks associated with fluctuations in foreign currencies. Since the Group’s entities mainly conduct their operating business in their own functional currencies, our risk of exchange rate fluctuations from ongoing ordinary operations is not considered significant. However, SAP occasionally generates foreign currency-denominated receivables, payables, and other monetary items by transacting in a currency other than the functional currency. To mitigate the extent of the associated foreign currency exchange rate risk, the majority of these transactions are hedged as described below. In rare circumstances, transacting in a currency other than the functional currency also leads to embedded foreign currency derivatives being separated and measured at fair value through profit or loss. In addition, the intellectual property (IP) holders in the SAP Group are exposed to risks associated with forecasted intercompany cash flows in foreign currencies. These cash flows arise out of royalty payments from subsidiaries to the respective IP holder. The royalties are linked to the subsidiaries’ external revenue. This arrangement leads to a concentration of the foreign currency exchange rate risk with the IP holders, as the royalties are mostly denominated in the subsidiaries’ local currencies, while the functional currency of the IP holders with the highest royalty volume is the euro. The highest foreign currency exchange rate exposure of this kind relates to the currencies of subsidiaries with significant operations, for example the U.S. dollar, the pound sterling, the Japanese yen, the Swiss franc, and the Australian dollar. Generally, we are not exposed to any significant foreign currency exchange rate risk with regard to our investing and financing activities, as such activities are normally conducted in the functional currency of the investing or borrowing entity. Foreign Currency Exchange Rate Risk Management We continuously monitor our exposure to currency fluctuation risks based on monetary items and forecasted transactions and pursue a Group-wide strategy to manage foreign currency exchange rate risk, using derivative financial instruments, primarily foreign exchange forward contracts, as appropriate, with the primary aim of reducing profit or loss volatility. Most of the hedging instruments are not designated as being in a hedge accounting relationship. Currency Hedges Designated as Hedging Instruments (Cash Flow Hedges) We enter into derivative financial instruments, primarily foreign exchange forward contracts, to hedge significant forecasted cash flows (royalties) from foreign subsidiaries denominated in foreign currencies with a hedge ratio of 1:1 and a hedge horizon of up to 12 months, which is also the maximum maturity of the foreign exchange derivatives we use. For all years presented, no previously highly probable transaction designated as a hedged item in a foreign currency cash flow hedge relationship ceased to be probable. Therefore, we did not discontinue any of our cash flow hedge relationships. Also, ineffectiveness was either not material or non-existent in all years reported. Generally, the cash flows of the hedged forecasted transactions are expected to occur and to be recognized in profit or loss monthly within a time frame of 12 months from the date of the statement of financial position. The amounts as at December 31, 2021,2022, relating to items designated as hedged items were as follows: Designated Hedged Items in Foreign Currency Exchange Rate Hedges | | | | € millions | | Forecasted License Payments | | | 20212022
| Change in value used for calculating hedge ineffectiveness | | | -2832
| Cash flow hedge | | | -2832
| Cost of hedging | | | -2-9
| Balances remaining in cash flow hedge reserve for which hedge accounting is no longer applied | | | 0 |
The amounts as at December 31, 2021,2022, designated as hedging instruments were as follows: Designated Hedging Instruments in Foreign Currency Exchange Rate Hedges | | | € millions | | Forecasted License Payments | | | 20212022
| Nominal amount | | 1,0231,371
| Carrying amount | | | Other financial assets | | 133
| Other financial liabilities | | -31-9
| Change in value recognized in OCI | | -2832
| Hedge ineffectiveness recognized in Finance income, net | | 0 | Cost of hedging recognized in OCI | | 2-9
| Amount reclassified from cash flow hedge in OCI to Other non-operating income, net | | -4-42
| Amount reclassified from cost of hedging in OCI to Finance income, net | | -3-7
|
On December 31, 2021,2022, we held the following instruments to hedge exposures to changes in foreign currency: Details on Hedging Instruments in Foreign Currency Exchange Rate Hedges | | | | | | | | | | | Maturity | | Maturity | | | 2021 | | 2022 | | | 1–6 Months | | 7–12 Months | | 1–6 Months | | 7–12 Months | Forward exchange contracts | | | | | | | | | Net exposure in € millions | | 770 | | 253 | | 822 | | 550 | Average EUR:GBP forward rate | | 0.87 | | 0.86 | | 0.86 | | 0.88 | Average EUR:JPY forward rate | | 130.52 | | 130.32 | | 136.83 | | 138.23 | Average EUR:CHF forward rate | | 1.08 | | 1.07 | | 1.00 | | 0.97 | Average EUR:AUD forward rate | | 1.58 | | 1.61 | | 1.53 | | 1.54 | Average EUR:USD forward rate | | 1.19 | | 1.16 | | 1.05 | | 1.03 |
Foreign Currency Exchange Rate Exposure Our risk exposure is based on the following assumptions: – The SAP Group’s entities generally operate in their functional currencies. In exceptional cases and limited economic environments, operating transactions are denominated in currencies other than the functional currency, leading to a foreign currency exchange rate risk for the related monetary instruments. Where material, this foreign currency exchange rate risk is hedged. Therefore, fluctuations in foreign currency exchange rates do not have a significant impact on either profit or other comprehensive income with regard to our non-derivative monetary financial instruments and related income or expenses. – Our free-standing derivatives designed for hedging foreign currency exchange rate risks almost completely balance the changes in the fair values of the hedged item attributable to exchange rate movements in the Consolidated Income Statements in the same period. As a consequence, the hedged items and the hedging instruments are not exposed to foreign currency exchange rate risks, and thereby have no effect on profit. Consequently, we are only exposed to significant foreign currency exchange rate fluctuations with regard to the following: – The spot component of derivatives held within a designated cash flow hedge relationship affecting other comprehensive income – Foreign currency embedded derivatives affecting other non-operating expense, net Thus, our foreign currency exposure (and our average/high/low exposure) as at December 31 2021, was as follows: Foreign Currency Exposure | | | | | | | | | € billions | | 2021 | | 2020 | | 2022 | | 2021 | Year-end exposure toward all our major currencies | | 1.4 | | 0.9 | | 1.7 | | 1.4 | Average exposure | | 1.3 | | 0.9 | | 1.6 | | 1.3 | Highest exposure | | 1.6 | | 1.0 | | 1.7 | | 1.6 | Lowest exposure | | 1.0 | | 0.9 | | 1.3 | | 1.0 |
Foreign Currency Exchange Rate Sensitivity We calculate our sensitivity on an upward/downward shift of +/–10% of the foreign currency exchange rate between the euro and all major currencies (2020:(2021: +/-10% of the foreign currency exchange rate between the euro and all other major currencies; 2019:2020: +/–10% of the foreign currency exchange rate between the euro and all other major currencies). If, on December 31, 2022, 2021, 2020, and 2019,2020, the foreign currency exchange rates had been higher/lower as described above, this would have had the following effects on other non-operating expense, net and other comprehensive income: Foreign Currency Sensitivity | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | Effects on Other Non-Operating Expense, Net | | Effects on Other Comprehensive Income | | Effects on Other Non-Operating Expense, Net | | Effects on Other Comprehensive Income | | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | | 2022 | | 2021 | | 2020 | Derivatives held within a designated cash flow hedge relationship | | | | | | | | | | | | | | | | | | | | | | | | | All major currencies –10% (2020: all major currencies –10%; 2019: all major currencies –10%) | | | | | | | | 106 | | 43 | | 53 | | All major currencies +10% (2020: all major currencies +10%; 2019: all major currencies +10%) | | | | | | | | -106 | | -43 | | -53 | | All major currencies –10% (2021: all major currencies –10%; 2020: all major currencies –10%) | | | | | | | | | 135 | | 106 | | 43 | All major currencies +10% (2021: all major currencies +10%; 2020: all major currencies +10%) | | | | | | | | | -135 | | -106 | | -43 | Embedded derivatives | | | | | | | | | | | | | | | | | | | | | | | | | All currencies –10% | | 40 | | 40 | | 53 | | | | | | | | 31 | | 40 | | 40 | | | | | | | All currencies +10% | | -49 | | -49 | | -53 | | | | | | | | -38 | | -49 | | -49 | | | | | | |
Interest Rate Risk Interest Rate Risk Factors We are exposed to interest rate risk as a result of our investing and financing activities mainly in euros and U.S. dollars, since a large part of our investments are based on variable rates and/or short maturities (2021: 67%(2022: 64%; 2020:2021: 67%) and most of our financing transactions are based on fixed rates and long maturities (2021:(2022: 87%; 2020: 85%2021: 87%). Interest Rate Risk Management The aim of our interest rate risk management is to reduce profit or loss volatility and optimize our interest result by creating a balanced structure of fixed and variable cash flows. We therefore manage interest rate risks by adding interest-rate-related derivative instruments to a given portfolio of investments and debt financing. The desired fixed-floating mix of our net debt is set by the Treasury Committee. Derivatives Designated as Hedging Instruments (Fair Value Hedges) To match the interest rate risk from our financing transactions to our investments, we use receiver interest rate swaps to convert certain fixed-rate financial liabilities to floating, and by this means secure the fair value of the swapped financing transactions on a 1:1 ratio. Including interest rate swaps, 52% (2021: 50% (2020: 48%) of our total interest-bearing financial liabilities outstanding as at December 31, 2021,2022, had a fixed interest rate. The amounts as at December 31, 2021,2022, relating to items designated as hedged items were as follows: Designated Hedged Items in Interest Rate Hedges | | | | | | | | | € millions | | 2021 | | 2022 | | | Fixed-Rate | | Fixed-Rate | | Fixed-Rate | | Fixed-Rate | | | Borrowing in EUR | | Borrowing in USD | | Borrowing in EUR | | Borrowing in USD | Notional amount | | 4,550 | | 285 | | 4,550 | | 94 | Carrying amount | | 4,508 | | 284 | | 3,732 | | 95 | Accumulated fair value adjustments in Other financial liabilities | | 59 | | -24 | | 782 | | -9 | Change in fair value used for measuring ineffectiveness | | 59 | | -9 | | 782 | | 2 | Accumulated amount of fair value hedge adjustments for hedged items ceased to be adjusted for hedging gains/losses | | 0 | | -16 | | 0 | | -11 |
The amounts as at December 31, 2021,2022, designated as hedging instruments were as follows: Designated Hedging Instruments in Interest Rate Hedges | | | | | | | | | € millions | | 2021 | | 2022 | | | Interest Rate | | Interest Rate | | Interest Rate | | Interest Rate | | | Swaps for | | Swaps for | | Swaps for | | Swaps for | | | EUR Borrowing | | USD Borrowing | | EUR Borrowing | | USD Borrowing | Notional amount | | 4,550 | | 285 | | 4,550 | | 94 | Carrying amount | | | | | | | | | Other financial assets | | 0 | | 7 | | 0 | | 0 | Other financial liabilities | | -49 | | 0 | | -749 | | -3 | Change in fair value used for measuring ineffectiveness | | -49 | | 7 | | -749 | | -3 |
As at December 31, 2021,2022, we held the following instruments to hedge exposures to changes in interest rates: Details on Hedging Instruments in Interest Rate Hedges | | | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | | | | | | | | | | | | | 2021 | | | | | | | | | | | | | 2022 | | | | | | | | | | | | | | | | Maturity | | | | | | | | | | | | | Maturity | | | | 2022 | | 2024 | | 2027 | | 2028 | | 2029 | | 2030 | | 2031 | | | 2024 | | 2027 | | 2028 | | 2029 | | 2030 | | 2031 | | EUR interest rate swaps | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nominal amounts | | | | | | 1,000 | | 1,000 | | 800 | | 500 | | 1,250 | | | | | 1,000 | | 1,000 | | 800 | | 500 | | 1,250 | | Average variable interest rate | | | | | | 1.469 | % | 0.893 | % | 0.233 | % | 0.868 | % | 1.031 | % | | | | 3.949 | % | 3.373 | % | 2.713 | % | 3.348 | % | 3.511 | % | USD interest rate swaps | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nominal amounts | | 196 | | 88 | | | | | | | | | | | | | 94 | | | | | | | | | | | | Average variable interest rate | | 1.011 | % | 0.890 | % | | | | | | | | | | | | 5.150 | % | | | | | | | | | | |
None of the fair value adjustment from the receiver swaps, the basis adjustment on the underlying hedged items held in fair value hedge relationships, and the difference between the two recognized in Financial income, net, is material in any of the years presented. Interest Rate Exposure Our interest rate exposure (and our average/high/low exposure) as at December 31 was as follows: Interest Rate Risk Exposure | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | € billions | | 2021 | | 2020 | | 2022 | | 2021 | | | Year-End | | Average | | High | | Low | | Year-End | | Average | | High | | Low | | Year-End | | Average | | High | | Low | | Year-End | | Average | | High | | Low | Fair value interest rate risk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | From investments | | 0.03 | | 0.03 | | 0.03 | | 0.02 | | 0.02 | | 0.02 | | 0.02 | | 0.02 | | 0.03 | | 0.04 | | 0.04 | | 0.03 | | 0.03 | | 0.03 | | 0.03 | | 0.02 | Cash flow interest rate risk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | From investments (including cash) | | 7.72 | | 6.25 | | 7.72 | | 4.67 | | 4.58 | | 5.14 | | 5.77 | | 4.58 | | 6.19 | | 5.83 | | 7.21 | | 4.87 | | 7.72 | | 6.25 | | 7.72 | | 4.67 | From financing | | 1.71 | | 2.07 | | 2.95 | | 1.70 | | 1.99 | | 3.18 | | 3.93 | | 1.99 | | 1.45 | | 1.71 | | 1.76 | | 1.45 | | 1.71 | | 2.07 | | 2.95 | | 1.70 | From interest rate swaps | | 4.83 | | 4.82 | | 4.83 | | 4.81 | | 4.81 | | 4.78 | | 5.10 | | 4.30 | | 4.64 | | 4.84 | | 4.88 | | 4.64 | | 4.83 | | 4.82 | | 4.83 | | 4.81 |
Interest Rate Sensitivity A sensitivity analysis is provided to show the impact of our interest rate risk exposure on profit or loss and equity in accordance with IFRS 7, considering the following: – Changes in interest rates only affect the accounting for non-derivative fixed-rate financial instruments if they are recognized at fair value. Therefore, such interest rate changes do not change the carrying amounts of our non-derivative fixed-rate financial liabilities, as we account for them at amortized cost. Investments in fixed-rate financial assets classified as fair value through profit or loss were not material at each year end reported. Thus, we do not consider any fixed-rate instruments in the equity-related sensitivity calculation. – Income or expenses recorded in connection with non-derivative financial instruments with variable interest rates are subject to interest rate risk if they are not hedged items in an effective hedge relationship. Thus, we take into consideration interest rate changes relating to our variable-rate financing and our investments in money market instruments in the profit-related sensitivity calculation. – The designation of interest rate receiver swaps in a fair value hedge relationship leads to interest rate changes affecting Financial income, net. The fair value movements related to the interest rate swaps are not reflected in the sensitivity calculation, as they offset the fixed interest rate payments for the bonds and private placements as hedged items. However, changes in market interest rates affect the amount of interest payments from the interest rate swap. As a consequence, we include those effects of market interest rates on interest payments in the profit-related sensitivity calculation. Due to the different interest rate expectations for the U.S. dollar and the euro area, we base our sensitivity analyses on a yield curve upward shift of +75/+20125 basis points (bps) for the U.S. dollar/euro area (2020: +50/(2021: +75/+1020bps for the U.S. dollar/euro area; 2019:2020: +50/+10bps for the U.S. dollar/euro area), and a yield curve downward shift of –25/–20bps10bps for the U.S. dollar/euro area (2020: –50/(2021: –25/–20bps for the U.S. dollar/euro area; 2019:2020: –50/– 20bps for the U.S. dollar/euro area). If, on December 31, 2022, 2021, 2020, and 2019,2020, interest rates had been higher/lower than as described above, this would not have had a material effect on Financial income, net, for our variable interest rate investments and would have had the following effects on Financial income, net. Interest Rate Sensitivity | | | | | | | | | | | | | € millions | | Effects on Financial Income, Net | | Effects on Financial Income, Net | | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Derivatives held within a designated fair value hedge relationship | | | | | | | | | | | | | Interest rates +75 bpsfor U.S. dollar area/+20 bps for euro area (2020: + 50 / +10 bps for U.S. dollar/euro area; 2019: +50/+10bps for U.S. dollar/euro area) | | -70 | | -41 | | -41 | | Interest rates –25 bps for U.S. dollar area/–20 bps for euro area (2020: –50 /–20 bps for U.S. dollar/euro area; 2019: –50 /–20 bps for U.S. dollar/euro area) | | 68 | | 79 | | 76 | | Interest rates +75bps for U.S. dollar area/+125bps for euro area (2021: +75/+20bps for U.S. dollar/euro area; 2020: +50/+10bps for U.S. dollar/euro area) | | | -58 | | -11 | | -6 | Interest rates –25bps for U.S. dollar area/–10bps for euro area (2021: –25/–20bps for U.S. dollar/euro area; 2020: –50/–20bps for U.S. dollar/euro area) | | | 5 | | 10 | | 10 | Variable-rate financing | | | | | | | | | | | | | Interest rates + 75 bps for U.S. dollar area/+ 20 bps for euro area (2020: + 50 /+10 bps for U.S. dollar/euro area; 2019: +50/+10bps for U.S. dollar/euro area) | | -10 | | -6 | | -8 | | Interest rates –25 bps for U.S. dollar area/–20 bps for euro area (2020: –50–20 bps for U.S. dollar/euro area; 2019: –50–20 bps for U.S. dollar/euro area) | | 5 | | 6 | | 8 | | Interest rates +75bps for U.S. dollar area/+125bps for euro area (2021: +75/+20bps for U.S. dollar/euro area; 2020: +50/+10bps for U.S. dollar/euro area) | | | -14 | | -4 | | -1 | Interest rates –25bps for U.S. dollar area/–10bps for euro area (2021: –25/–20bps for U.S. dollar/euro area; 2020: –50/–20bps for U.S. dollar/euro area) | | | 1 | | 3 | | 1 |
Equity Price Risk Equity Price Risk Factors We are exposed to equity price risk with regard to our investments in equity securities and our share-based payments plans.securities. Equity Price Risk Management Our listed equity investments are monitored based on the current market value that is affected by the fluctuations in the volatile stock markets worldwide. Unlisted equity investments are monitored based on detailed financial information provided by the investees. The fair value of our listed equity investments depends on the equity prices, while the fair value of the unlisted equity investments is influenced by various unobservable input factors. We also monitor the exposure with regard to our share-based payment plans. To reduce resulting profit or loss volatility, we historically hedged certain cash flow exposures associated with these plans by purchasing derivative instruments, but we did not apply hedge accounting. This practice ceased in June 2021.
Equity Price Exposure On December 31, 2021,2022, our exposure from our investments in equity securities was €5,137 million (2021: €5,799 million (2020:million; 2020: €3,113 million; 2019: €1,996 million). For information about the exposure from our share-based payments plans, see Note (B.3).
Equity Price Sensitivity Our sensitivity towards a fluctuation in equity prices is as follows: Equity Price Sensitivity | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Investments in equity securities | | | | | | | | | | | | | Increase in equity prices and respective unobservable inputs of 10% - increase of financial income, net | | 515 | | 259 | | 156 | | 503 | | 515 | | 259 | Decrease in equity prices and respective unobservable inputs of 10% - decrease of financial income, net | | -515 | | -259 | | -156 | | -503 | | -515 | | -259 |
Credit Risk Credit Risk Factors To reduce the credit risk in investments, we arrange to receive rights to collateral for certain investing activities in the full amount of the investment volume, which we would be allowed to make use of only in the case of default of the counterparty to the investment. In the absence of other significant agreements to reduce our credit risk exposure, the total amounts recognized as cash and cash equivalents, current investments, loans, and other financial receivables, trade receivables, and derivative financial assets represent our maximum exposure to credit risks, except for the agreements mentioned above. Credit Risk Management Cash at Banks, Time Deposits, and Debt Securities To mitigate the credit risk from our investing activities and derivative financial assets, we conduct all our activities only with approved major financial institutions and issuers that carry high external ratings, as required by our internal treasury guideline. Among its stipulations, the guideline requires that we invest only in assets from issuers with a minimum rating of at least “BBB flat.” We only invest in issuers with a lower rating in exceptional cases. Such investments were not material in 20212022 and 2020.2021. The weighted average rating of our financial assets is A. We pursue a policy of cautious investments characterized by predominantly current investments, standard investment instruments, as well as a wide portfolio diversification by doing business with a variety of counterparties. To further reduce our credit risk, we require collateral for certain investments in the full amount of the investment volume, which we would be allowed to make use of in the case of default of the counterparty to the investment. As such collateral, we only accept bonds with at least investment-grade rating level. In addition, the concentration of credit risk that exists when counterparties are involved in similar activities by instrument, sector, or geographic area is further mitigated by diversification of counterparties throughout the world and adherence to an internal limit system for each counterparty. This internal limit system stipulates that the business volume with individual counterparties is restricted to a defined limit that depends on the lowest official long-term credit rating available by at least one of the major rating agencies, the Tier 1 capital of the respective financial institution, or participation in the German Depositors’ Guarantee Fund or similar protection schemes. We continuously monitor strict compliance with these counterparty limits. As the premium for credit default swaps mainly depends on market participants’ assessments of the creditworthiness of a debtor, we also closely observe the development of credit default swap spreads in the market to evaluate probable risk developments and react in a timely manner to changes should these manifest. For cash at banks, time deposits, and debt securities such as acquired bonds or commercial paper,papers, we apply the general impairment approach. As it is our policy to only invest in high-quality assets of issuers with a minimum rating of at least investment grade so as to minimize the risk of credit losses, we use the low credit risk exception. Thus, these assets are always allocated to stage 1 of the three-stage credit loss model and we record a loss allowance for an amount equal to 12-month expected credit losses. This loss allowance is calculated based on our exposure as at the respective reporting date, the loss given default for this exposure, and the credit default swap spread as a measure for the probability of default. To ensure that during their lifetime our investments always fulfill the requirement of being investment-grade, we monitor changes in credit risk by tracking published external credit ratings. Among other things, we consider cash at banks, time deposits, and debt securities to be in default when the counterparty is unlikely to pay its obligations in full, when there is information about a counterparty’s financial difficulties, or in case of a drastic increase in the credit default swap spread of a counterparty for a prolonged time period while the overall market environment remains rather stable. Such financial assets are written off either partially or in full if the likelihood of recovery is considered remote, which might be evidenced, for example, by the bankruptcy of a counterparty of such financial assets. Trade Receivables The default risk of our trade receivables is managed separately, mainly based on assessing the creditworthiness of customers through external ratings and on our past experience with the customers concerned. Based on this assessment, individual credit limits are established for each customer and deviations from such credit limits need to be approved by management. We apply the simplified impairment approach using a provision matrix for all trade receivables and contract assets to take into account any lifetime expected credit losses already at initial recognition. For the purpose of the provision matrix, customers are clustered into different risk classes, mainly based on market information such as the country risk assessment of their country of origin. Loss rates used to reflect lifetime expected credit losses are determined using a roll-rate method based on the probability of a receivable progressing through different stages of being overdue and on our actual credit loss experience over the past years. These loss rates are enhanced by forward-looking information to reflect differences between economic conditions during the period over which the historical data has been collected, current conditions, and the expected changes in the economic conditions over the expected life of the receivables. Forward-looking information is based on changes in country risk ratings, or fluctuations in credit default swaps of countries of the customers we do business with. We continuously monitor outstanding receivables locally to assess whether there is objective evidence that our trade receivables and contract assets are credit-impaired. Evidence that trade receivables and contract assets are credit-impaired include, among the trade receivables being past due, information about significant financial difficulty of the customer or non-adherence to a payment plan. Under extreme situations such as the current war situation in Ukraine, related account receivables and contract assets are critically assessed to determine whether they are credit-impaired. We consider receivables to be in default when the counterparty is unlikely to pay its obligations in full, However, a delay of payments (for example, more than 90 days past due) in the normal course of business alone does not necessarily indicate a customer default. We write off account balances either partially or in full if we judge that the likelihood of recovery is remote, which might be evidenced, for example, when bankruptcy proceedings for a customer are finalized or when all enforcement efforts have been exhausted. The impact of default on our trade receivables from individual customers is mitigated by our large customer base and its distribution across many different industries, company sizes, and countries worldwide. For more information about our trade receivables and the impact of SAP’s decision to wind down activities in Russia and Belarus on trade receivables, see Note (A.2). Credit Risk Exposure Cash, Time Deposits, and Debt Securities As at December 31, 2021,2022, our exposure to credit risk from cash, time deposits, and debt securities was as follows: Credit Risk Exposure from Cash, Time Deposits, and Debt Securities
| | | | | | | | | | | € millions, unless otherwise stated | | 2021 | | | Equivalent to External | | Weighted Average Loss | | Gross Carrying Amount | | Gross Carrying Amount | | ECL Allowance | | | Rating | | Rate | | Not Credit-Impaired | | Credit-Impaired | | | Risk class 1 - low risk | | AAA to BBB- | | -0.0 | % | 6,864 | | 0 | | -3 | Risk class 2 - high risk | | BB to D | | 0.0 | % | 37 | | 0 | | 0 | Risk class 3 - unrated | | NA | | -10.3 | % | 29 | | 0 | | -3 | Total | | | | -0.1 | % | 6,930 | | 0 | | -6 |
| | | | | | | | | | | € millions, unless otherwise stated | | 2020 | | | Equivalent to External | | Weighted Average Loss | | Gross Carrying Amount | | Gross Carrying Amount | | ECL Allowance | | | Rating | | Rate | | Not Credit-Impaired | | Credit-Impaired | | | Risk class 1 - low risk | | AAA to BBB– | | -0.1 | % | 4,846 | | 0 | | -3 | Risk class 2 - high risk | | BB to D | | 0.0 | % | 29 | | 0 | | 0 | Risk class 3 - unrated | | NA | | -11.3 | % | 23 | | 0 | | -3 | Total | | | | -0.1 | % | 4,898 | | 0 | | -6 |
As at December 31, 2021, the major part of our other loans and other financial receivables was concentrated in Germany. There were no loans, or other financial receivables past due but not impaired and we had no indications of impairments of such assets that were not past due and not impaired as at that date.
Credit Risk Exposure from Cash, Time Deposits, and Debt Securities | | | | | | | | | | | € millions, unless otherwise stated | | 2022 | | | Equivalent to External | | Weighted Average Loss | | Gross Carrying Amount | | Gross Carrying Amount | | ECL Allowance | | | Rating | | Rate | | Not Credit-Impaired | | Credit-Impaired | | | Risk class 1 - low risk | | AAA to BBB- | | -0.0 | % | 6,554 | | 0 | | -3 | Risk class 2 - high risk | | BB+ to D | | 0.0 | % | 33 | | 0 | | 0 | Risk class 3 - unrated | | NA | | -6.5 | % | 46 | | 0 | | -3 | Total | | | | -0.1 | % | 6,633 | | 0 | | -6 |
| | | | | | | | | | | € millions, unless otherwise stated | | 2021 | | | Equivalent to External | | Weighted Average Loss | | Gross Carrying Amount | | Gross Carrying Amount | | ECL Allowance | | | Rating | | Rate | | Not Credit-Impaired | | Credit-Impaired | | | Risk class 1 - low risk | | AAA to BBB– | | -0.0 | % | 6,864 | | 0 | | -3 | Risk class 2 - high risk | | BB to D | | 0.0 | % | 37 | | 0 | | 0 | Risk class 3 - unrated | | NA | | -10.3 | % | 29 | | 0 | | -3 | Total | | | | -0.1 | % | 6,930 | | 0 | | -6 |
As at December 31, 2022, the major part of our other loans and other financial receivables was concentrated in Germany. There were no loans, or other financial receivables past due but not impaired and we had no indications of impairments of such assets that were not past due and not impaired as at that date. Trade Receivables and Contract Assets As at December 31, 2021,2022, our exposure to credit risk from trade receivables was as follows: Credit Risk Exposure from Trade Receivables and Contract Assets | | | | | | | | | | | | | | | | | € millions, unless otherwise stated | | 2021 | | 2022 | | | Weighted Average Loss Rate | | Gross Carrying Amount Not | | Gross Carrying Amount Credit- | | ECL Allowance | | Weighted Average Loss Rate | | Gross Carrying Amount Not | | Gross Carrying Amount Credit- | | ECL Allowance | | | | | Credit-Impaired | | Impaired | | | | | | Credit-Impaired | | Impaired | | | AR not due and due | | -0.5 | % | 4,106 | | 6 | | -19 | | -1.0 | % | 3,146 | | 10 | | -31 | AR overdue 1 to 30 days | | -1.0 | % | 611 | | 57 | | -7 | | -1.0 | % | 1,420 | | 80 | | -15 | AR overdue 30 to 90 days | | -1.8 | % | 514 | | 48 | | -10 | | -2.3 | % | 582 | | 64 | | -15 | AR overdue more than 90 days | | -19.3 | % | 482 | | 240 | | -139 | | -27.2 | % | 499 | | 236 | | -200 | TOTAL | | -2.9 | % | 5,713 | | 351 | | -175 | | -4.3 | % | 5,647 | | 390 | | -261 |
| | | | | | | | | | | | | | | | | € millions, unless otherwise stated | | 2020 | | 2021 | | | Weighted Average Loss Rate | | Gross Carrying Amount Not | | Gross Carrying Amount Credit- | | ECL Allowance | | Weighted Average Loss Rate | | Gross Carrying Amount Not | | Gross Carrying Amount Credit- | | ECL Allowance | | | | | Credit-Impaired | | Impaired | | | | | | Credit-Impaired | | Impaired | | | AR not due and due | | -0.2 | % | 4,426 | | 0 | | -10 | | -0.5 | % | 4,106 | | 6 | | -19 | AR overdue 1 to 30 days | | -0.9 | % | 511 | | 71 | | -5 | | -1.0 | % | 611 | | 57 | | -7 | AR overdue 30 to 90 days | | -1.8 | % | 380 | | 61 | | -8 | | -1.8 | % | 514 | | 48 | | -10 | AR overdue more than 90 days | | -16.8 | % | 695 | | 273 | | -163 | | -19.3 | % | 482 | | 240 | | -139 | TOTAL | | -2.9 | % | 6,012 | | 405 | | -186 | | -2.9 | % | 5,713 | | 351 | | -175 |
For 2021,2022, the movement in the ECL allowance for trade receivables and contract assets is as follows: Movement in ECL Allowance for Trade Receivables and Contract Assets | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | | | ECL Allowance | | ECL Allowance | | ECL Allowance | | ECL Allowance | Balance as at 1/1 | | -186 | | -131 | | -175 | | -186 | Net credit losses recognized | | -87 | | -97 | | -187 | | -87 | Amounts written off | | 98 | | 42 | | 101 | | 98 | Balance as at 12/31 | | -175 | | -186 | | -261 | | -175 |
For more information about the impact of SAP’s decision to wind down activities in Russia and Belarus on trade receivables, see Note (A.2). Liquidity Risk Liquidity Risk Factors We are exposed to liquidity risk from our obligations towards suppliers, employees, and financial institutions. Liquidity Risk Management Our liquidity is managed by our global treasury department with the primary aim of maintaining liquidity at a level that is adequate to meet our financial obligations. Generally, our primary source of liquidity is funds generated from our business operations. Our global treasury department manages liquidity centrally for all subsidiaries. Where possible, we pool their cash surplus so that we can use liquidity centrally for our business operations, for subsidiaries’ funding requirements, or to invest any net surplus in the market. With this strategy, we seek to optimize yields, while ensuring liquidity, by investing only with counterparties and issuers of high credit quality, as explained before. Hence, high levels of liquid assets and marketable securities provide a strategic reserve, helping keep SAP flexible, sound, and independent. Apart from effective working capital and cash management, we have reduced the liquidity risk inherent in managing our day-to-day operations and meeting our financing responsibilities by arranging an adequate volume of available credit facilities with various financial institutions on which we can draw if necessary. In order to retain high financial flexibility, in 2017, SAP SE entered into a €2.5 billion syndicated credit facility agreement with a term until 2024. The use of the facility is not restricted by any financial covenants. Borrowings under the facility bear interest of EURIBOR or LIBOR for the respective currency plus a margin of 17bps. We are also required to pay a commitment fee of 5.95bps per annum on the unused available credit. We have not drawn on the facility. In September 2019, we initiated a commercial paper program (Commercial Paper, or CP). program. As at December 31, 2021,2022, we had €930€930 million of CP outstanding with maturities generally less than six months (2020:(2021: €930 million). Additionally, as at December 31, 20212022 and 2020,2021, the Group had available lines of credit totaling €346€555 million and €372€346 million, respectively. There were immaterial borrowings outstanding under these lines of credit in all years presented. Liquidity Risk Exposure The table below is an analysis of the remaining contractual maturities of all our financial liabilities held as at December 31, 2021.2022. Financial liabilities for which repayment can be requested by the contract partner at any time are assigned to the earliest possible period. Variable interest payments were calculated using the latest relevant interest rate fixed as at December 31, 2021.2022. As we generally settle our derivative contracts gross, we show the pay and receive legs separately for all our currency and interest rate derivatives, whether or not the fair value of the derivative is negative. The cash outflows for the currency derivatives are translated using the applicable spot rate. Contractual Maturities of Non-Derivative Financial Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | Carrying | | Contractual Cash Flows | | Carrying | | Contractual Cash Flows | | | Amount | | | | Amount | | | | | 12/31/2021 | | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Thereafter | | 12/31/2022 | | 2023 | | 2024 | | 2025 | | 2026 | | 2027 | | Thereafter | Non-derivative financial liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Trade payables | | -1,089 | | -1,089 | | 0 | | 0 | | 0 | | 0 | | 0 | | -1,496 | | -1,496 | | 0 | | 0 | | 0 | | 0 | | 0 | Lease liabilities | | -2,143 | | -448 | | -338 | | -263 | | -208 | | -184 | | -934 | | -2,140 | | -398 | | -317 | | -257 | | -228 | | -188 | | -1,071 | Other financial liabilities | | -13,285 | | -4,084 | | -1,695 | | -1,228 | | -936 | | -1,165 | | -4,773 | | -11,365 | | -4,422 | | -1,288 | | -965 | | -1,165 | | -1,142 | | -3,636 | Total of non-derivative financial liabilities | | -16,517 | | -5,621 | | -2,033 | | -1,491 | | -1,144 | | -1,349 | | -5,707 | | -15,002 | | -6,316 | | -1,605 | | -1,222 | | -1,393 | | -1,330 | | -4,707 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | Carrying | | Contractual Cash Flows | | Carrying | | Contractual Cash Flows | | | Amount | | | | Amount | | | | | 12/31/2020 | | 2021 | | 2022 | | 2023 | | 2024 | | 2025 | | Thereafter | | 12/31/2021 | | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Thereafter | Non-derivative financial liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Trade payables | | -1,014 | | -1,014 | | 0 | | 0 | | 0 | | 0 | | 0 | | -1,089 | | -1,089 | | 0 | | 0 | | 0 | | 0 | | 0 | Lease liabilities | | -2,120 | | -426 | | -359 | | -262 | | -218 | | -165 | | -931 | | -2,143 | | -448 | | -338 | | -263 | | -208 | | -184 | | -934 | Other financial liabilities | | -13,770 | | -1,982 | | -2,640 | | -1,700 | | -1,211 | | -918 | | -5,933 | | -13,285 | | -4,084 | | -1,695 | | -1,228 | | -936 | | -1,165 | | -4,773 | Total of non-derivative financial liabilities | | -16,904 | | -3,422 | | -2,999 | | -1,962 | | -1,429 | | -1,083 | | -6,864 | | -16,517 | | -5,621 | | -2,033 | | -1,491 | | -1,144 | | -1,349 | | -5,707 |
Contractual Maturities of Derivative Financial Liabilities and Financial Assets | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | Carrying | | Contractual Cash Flows | | Carrying | | Contractual Cash Flows | | Carrying | | Contractual Cash Flows | | Carrying | | Contractual Cash Flows | | | Amount | | | | Amount | | | | Amount | | | | Amount | | | | | 12/31/2021 | | 2022 | | Thereafter | | 12/31/2020 | | 2021 | | Thereafter | | 12/31/2022 | | 2023 | | Thereafter | | 12/31/2021 | | 2022 | | Thereafter | Derivative financial liabilities and assets | | | | | | | | | | | | | | | | | | | | | | | | | Derivative financial liabilities | | | | | | | | | | | | | | | | | | | | | | | | | Currency derivatives not designated as hedging instruments | | -62 | | | | | | -61 | | | | | | -88 | | | | | | -62 | | | | | Cash outflows | | | | -2,381 | | -12 | | | | -2,902 | | -7 | | | | -3,185 | | -13 | | | | -2,381 | | -12 | Cash inflows | | | | 2,327 | | 0 | | | | 2,842 | | 0 | | | | 3,113 | | 0 | | | | 2,327 | | 0 | Currency derivatives designated as hedging instruments | | -31 | | | | | | -1 | | | | | | -9 | | | | | | -31 | | | | | Cash outflows | | | | -919 | | | | | | -141 | | | | | | -309 | | | | | | -919 | | | Cash inflows | | | | 885 | | | | | | 139 | | | | | | 302 | | | | | | 885 | | | Interest rate derivatives designated as hedging instruments | | -49 | | | | | | 0 | | | | | | -753 | | | | | | -49 | | | | | Cash outflows | | | | -48 | | -476 | | | | | | | | | | -102 | | -1,201 | | | | -48 | | -476 | Cash inflows | | | | 60 | | 421 | | | | | | | | | | 63 | | 364 | | | | 60 | | 421 | Total of derivative financial liabilities | | -142 | | -76 | | -67 | | -63 | | -62 | | -7 | | -849 | | -118 | | -850 | | -142 | | -76 | | -67 | Derivative financial assets | | | | | | | | | | | | | | | | | | | | | | | | | Currency derivatives not designated as hedging instruments | | 45 | | | | | | 38 | | | | | | 30 | | | | | | 41 | | | | | Cash outflows | | | | -2,878 | | | | | | -2,452 | | | | | | -1,713 | | | | | | -2,878 | | | Cash inflows | | | | 2,923 | | | | | | 2,493 | | | | | | 1,740 | | | | | | 2,923 | | | Currency derivatives designated as hedging instruments | | 1 | | | | | | 7 | | | | | | 33 | | | | | | 1 | | | | | Cash outflows | | | | -136 | | | | | | -291 | | | | | | -1,039 | | | | | | -136 | | | Cash inflows | | | | 137 | | | | | | 297 | | | | | | 1,069 | | | | | | 137 | | | Interest rate derivatives designated as hedging instruments | | 7 | | | | | | 114 | | | | | | 0 | | | | | | 7 | | | | | Cash outflows | | | | -4 | | -4 | | | | -48 | | -398 | | | | 0 | | 0 | | | | -4 | | -4 | Cash inflows | | | | 9 | | 6 | | | | 69 | | 495 | | | | 0 | | 0 | | | | 9 | | 6 | Total of derivative financial assets | | 53 | | 51 | | 2 | | 158 | | 68 | | 97 | | 63 | | 57 | | 0 | | 50 | | 51 | | 2 | Total of derivative financial liabilities and assets | | -89 | | -25 | | -65 | | 95 | | 6 | | 90 | | -787 | | -61 | | -850 | | -92 | | -25 | | -65 |
(F.2) Fair Value Disclosures on Financial Instruments y Level Transfers | It is our policy that transfers between the different levels of the fair value hierarchy are deemed to have occurred at the beginning of the period of the event or change in circumstances that caused the transfer. |
Fair Value of Financial Instruments We use various types of financial instruments in the ordinary course of business, which are classified as either amortized cost (AC) or fair value through profit or loss (FVTPL). For those financial instruments measured at fair value or for which fair value must be disclosed, we have categorized the financial instruments into a three-level fair value hierarchy depending on the inputs used to determine fair value and their significance for the valuation techniques. Fair Values of Financial Instruments and Classification Within the Fair Value Hierarchy | | | | | | | | | | | | | | | | | € millions | | Category | | 12/31/2022 | | | | | Carrying Amount | | Measurement Categories | | Fair Value | | | | | | | | | | | | | | | | | | | | | | At Amortized | | At Fair Value | | Level 1 | | Level 2 | | Level 3 | | Total | | | | | | | Cost | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets | | | | | | | | | | | | | | | | | Cash and cash equivalents | | | | 9,008 | | | | | | | | | | | | | Cash at banks1 | | AC | | 3,176 | | 3,176 | | | | | | | | | | | Time deposits1 | | AC | | 2,976 | | 2,976 | | | | | | | | | | | Money market and similar funds | | FVTPL | | 2,855 | | | | 2,855 | | 2,855 | | | | | | 2,855 | Trade and other receivables | | | | 6,405 | | | | | | | | | | | | | Trade receivables1 | | AC | | 5,776 | | 5,776 | | | | | | | | | | | Other receivables2 | | — | | 629 | | | | | | | | | | | | | Other financial assets | | | | 6,479 | | | | | | | | | | | | | Debt securities | | AC | | 32 | | 32 | | | | 32 | | | | | | 32 | Equity securities | | FVTPL | | 5,138 | | | | 5,138 | | 258 | | 0 | | 4,880 | | 5,138 | Investments in associates2 | | — | | 151 | | | | | | | | | | | | | Time deposits | | AC | | 654 | | 654 | | | | | | 654 | | | | 654 | Financial instruments related to employee benefit plans2 | | — | | 203 | | | | | | | | | | | | | Loans and other financial receivables | | AC | | 233 | | 233 | | | | | | 233 | | | | 233 | Derivative assets | | | | | | | | | | | | | | | | | Designated as hedging instrument | | | | | | | | | | | | | | | | | FX forward contracts | | — | | 33 | | | | 33 | | | | 33 | | | | 33 | Interest rate swaps | | — | | 0 | | | | 0 | | | | 0 | | | | 0 | Not designated as hedging instrument | | | | | | | | | | | | | | | | | FX forward contracts | | FVTPL | | 30 | | | | 30 | | | | 30 | | | | 30 | Call options for share-based payments | | FVTPL | | 0 | | | | 0 | | | | 0 | | | | 0 | Call option on equity shares | | FVTPL | | 5 | | | | 5 | | | | | | 5 | | 5 | Liabilities | | | | | | | | | | | | | | | | | Trade and other payables | | | | -2,226 | | | | | | | | | | | | | Trade payables1 | | AC | | -1,496 | | -1,496 | | | | | | | | | | | Other payables2 | | — | | -730 | | | | | | | | | | | | | Financial liabilities | | | | -14,355 | | | | | | | | | | | | | Non-derivative financial liabilities | | | | | | | | | | | | | | | | | Loans | | AC | | -1,456 | | -1,456 | | | | | | -1,456 | | | | -1,456 | Bonds | | AC | | -9,083 | | -9,083 | | | | -8,301 | | -928 | | | | -9,229 | Private placements | | AC | | -405 | | -405 | | | | | | -383 | | | | -383 | Other non-derivative financial liabilities3 | | AC | | -2,562 | | -2,562 | | | | | | -422 | | | | -422 | Derivatives | | | | | | | | | | | | | | | | | Designated as hedging instrument | | | | | | | | | | | | | | | | | FX forward contracts | | — | | -9 | | | | -9 | | | | -9 | | | | -9 | Interest rate swaps | | — | | -753 | | | | -753 | | | | -753 | | | | -753 | Not designated as hedging instrument | | | | | | | | | | | | | | | | | FX forward contracts | | FVTPL | | -88 | | | | -88 | | | | -88 | | | | -88 | Total financial instruments, net | | | | 5,311 | | -2,154 | | 7,212 | | -5,156 | | -3,087 | | 4,886 | | -3,357 |
Fair Values of Financial Instruments and Classification Within the Fair Value Hierarchy | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | Category | | 12/31/2021 | | Category | | 12/31/2021 | | | | | Carrying Amount | | Measurement Categories | | Fair Value | | | | Carrying Amount | | Measurement Categories | | Fair Value | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | At Amortized | | At Fair Value | | Level 1 | | Level 2 | | Level 3 | | Total | | | | | | At Amortized | | At Fair Value | | Level 1 | | Level 2 | | Level 3 | | Total | | | | | | | Cost | | | | | | | | | | | | | | | | Cost | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash and cash equivalents | | | | 8,898 | | | | | | | | | | | | | | | | 8,898 | | | | | | | | | | | | | Cash at banks1 | | AC | | 3,149 | | 3,149 | | | | | | | | | | | | AC | | 3,149 | | 3,149 | | | | | | | | | | | Time deposits1 | | AC | | 1,467 | | 1,467 | | | | | | | | | | | | AC | | 1,467 | | 1,467 | | | | | | | | | | | Money market and similar funds | | FVTPL | | 4,281 | | | | 4,281 | | 4,281 | | | | | | 4,281 | | FVTPL | | 4,281 | | | | 4,281 | | 4,281 | | | | | | 4,281 | Trade and other receivables | | | | 6,499 | | | | | | | | | | | | | | | | 6,499 | | | | | | | | | | | | | Trade receivables1 | | AC | | 5,888 | | 5,888 | | | | | | | | | | | | AC | | 5,888 | | 5,888 | | | | | | | | | | | Other receivables2 | | — | | 611 | | | | | | | | | | | | | | — | | 611 | | | | | | | | | | | | | Other financial assets | | | | 9,033 | | | | | | | | | | | | | | | | 9,033 | | | | | | | | | | | | | Debt securities | | AC | | 30 | | 30 | | | | 30 | | | | | | 30 | | AC | | 30 | | 30 | | | | 30 | | | | | | 30 | Equity securities | | FVTPL | | 5,799 | | | | 5,799 | | 772 | | 155 | | 4,871 | | 5,799 | | FVTPL | | 5,799 | | | | 5,799 | | 772 | | 155 | | 4,871 | | 5,799 | Investments in associates2 | | — | | 155 | | | | | | | | | | | | | | — | | 155 | | | | | | | | | | | | | Time deposits | | AC | | 2,602 | | 2,602 | | | | | | 2,602 | | | | 2,602 | | AC | | 2,602 | | 2,602 | | | | | | 2,602 | | | | 2,602 | Financial instruments related to employee benefit plans2 | | — | | 201 | | | | | | | | | | | | | | — | | 201 | | | | | | | | | | | | | Loans and other financial receivables | | AC | | 186 | | 186 | | | | | | 186 | | | | 186 | | AC | | 186 | | 186 | | | | | | 186 | | | | 186 | Derivative assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Designated as hedging instrument | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FX forward contracts | | — | | 1 | | | | 1 | | | | 1 | | | | 1 | | — | | 1 | | | | 1 | | | | 1 | | | | 1 | Interest rate swaps | | — | | 7 | | | | 7 | | | | 7 | | | | 7 | | — | | 7 | | | | 7 | | | | 7 | | | | 7 | Not designated as hedging instrument | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FX forward contracts | | FVTPL | | 41 | | | | 41 | | | | 41 | | | | 41 | | FVTPL | | 41 | | | | 41 | | | | 41 | | | | 41 | Call options for share-based payments | | FVTPL | | 0 | | | | 0 | | | | 0 | | | | 0 | | FVTPL | | 0 | | | | 0 | | | | 0 | | | | 0 | Call option on equity shares | | FVTPL | | 10 | | | | 10 | | | | | | 10 | | 10 | | FVTPL | | 10 | | | | 10 | | | | | | 10 | | 10 | Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Trade and other payables | | | | -1,702 | | | | | | | | | | | | | | | | -1,702 | | | | | | | | | | | | | Trade payables1 | | AC | | -1,089 | | -1,089 | | | | | | | | | | | | AC | | -1,089 | | -1,089 | | | | | | | | | | | Other payables2 | | — | | -613 | | | | | | | | | | | | | | — | | -613 | | | | | | | | | | | | | Financial liabilities | | | | -15,571 | | | | | | | | | | | | | | | | -15,571 | | | | | | | | | | | | | Non-derivative financial liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Loans | | AC | | -1,533 | | -1,533 | | | | | | -1,533 | | | | -1,533 | | AC | | -1,533 | | -1,533 | | | | | | -1,533 | | | | -1,533 | Bonds | | AC | | -10,682 | | -10,682 | | | | -10,248 | | -931 | | | | -11,179 | | AC | | -10,682 | | -10,682 | | | | -10,248 | | -931 | | | | -11,179 | Private placements | | AC | | -790 | | -790 | | | | | | -801 | | | | -801 | | AC | | -790 | | -790 | | | | | | -801 | | | | -801 | Other non-derivative financial liabilities3 | | AC | | -2,424 | | -2,424 | | | | | | -281 | | | | -281 | | AC | | -2,424 | | -2,424 | | | | | | -281 | | | | -281 | Derivatives | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Designated as hedging instrument | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FX forward contracts | | — | | -31 | | | | -31 | | | | -31 | | | | -31 | | — | | -31 | | | | -31 | | | | -31 | | | | -31 | Interest rate swaps | | — | | -49 | | | | -49 | | | | -49 | | | | -49 | | — | | -49 | | | | -49 | | | | -49 | | | | -49 | Not designated as hedging instrument | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FX forward contracts | | FVTPL | | -62 | | | | -62 | | | | -62 | | | | -62 | | FVTPL | | -62 | | | | -62 | | | | -62 | | | | -62 | Total financial instruments, net | | | | 7,158 | | -3,194 | | 9,997 | | -5,164 | | -695 | | 4,881 | | -978 | | | | 7,158 | | -3,194 | | 9,997 | | -5,164 | | -695 | | 4,881 | | -978 |
Fair Values of Financial Instruments and Classification Within the Fair Value Hierarchy
| | | | | | | | | | | | | | | | | € millions | | Category | | 12/31/2020 | | | | | Carrying Amount | | Measurement Categories | | Fair Value | | | | | | | | | | | | | | | | | | | | | | At Amortized | | At Fair Value | | Level 1 | | Level 2 | | Level 3 | | Total | | | | | | | Cost | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets | | | | | | | | | | | | | | | | | Cash and cash equivalents | | | | 5,311 | | | | | | | | | | | | | Cash at banks1 | | AC | | 2,732 | | 2,732 | | | | | | | | | | | Time deposits1 | | AC | | 924 | | 924 | | | | | | | | | | | Money market and similar funds | | FVTPL | | 1,655 | | | | 1,655 | | 1,655 | | | | | | 1,655 | Trade and other receivables | | | | 6,730 | | | | | | | | | | | | | Trade receivables1 | | AC | | 6,232 | | 6,232 | | | | | | | | | | | Other receivables2 | | — | | 498 | | | | | | | | | | | | | Other financial assets | | | | 5,147 | | | | | | | | | | | | | Debt securities | | AC | | 24 | | 24 | | | | 24 | | | | | | 24 | Equity securities | | FVTPL | | 3,113 | | | | 3,113 | | 72 | | 536 | | 2,505 | | 3,113 | Investments in associates2 | | — | | 14 | | | | | | | | | | | | | Time deposits | | AC | | 1,445 | | 1,445 | | | | | | 1,445 | | | | 1,445 | Financial instruments related to employee benefit plans2 | | — | | 162 | | | | | | | | | | | | | Loans and other financial receivables | | AC | | 190 | | 190 | | | | | | 190 | | | | 190 | Derivative assets | | | | | | | | | | | | | | | | | Designated as hedging instrument | | | | | | | | | | | | | | | | | FX forward contracts | | — | | 7 | | | | 7 | | | | 7 | | | | 7 | Interest rate swaps | | — | | 114 | | | | 114 | | | | 114 | | | | 114 | Not designated as hedging instrument | | | | | | | | | | | | | | | | | FX forward contracts | | FVTPL | | 38 | | | | 38 | | | | 38 | | | | 38 | Call options for share-based payments | | FVTPL | | 36 | | | | 36 | | | | 36 | | | | 36 | Call option on equity shares | | FVTPL | | 4 | | | | 4 | | | | | | 4 | | 4 | Liabilities | | | | | | | | | | | | | | | | | Trade and other payables | | | | -1,312 | | | | | | | | | | | | | Trade payables1 | | AC | | -1,014 | | -1,014 | | | | | | | | | | | Other payables2 | | — | | -298 | | | | | | | | | | | | | Financial liabilities | | | | -15,953 | | | | | | | | | | | | | Non-derivative financial liabilities | | | | | | | | | | | | | | | | | Loans | | AC | | -1,301 | | -1,301 | | | | | | -1,301 | | | | -1,301 | Bonds | | AC | | -11,300 | | -11,300 | | | | -10,966 | | -931 | | | | -11,897 | Private placements | | AC | | -742 | | -742 | | | | | | -771 | | | | -771 | Other non-derivative financial liabilities3 | | AC | | -2,547 | | -2,547 | | | | | | -427 | | | | -427 | Derivatives | | | | | | | | | | | | | | �� | | | Designated as hedging instrument | | | | | | | | | | | | | | | | | FX forward contracts | | — | | -1 | | | | -1 | | | | -1 | | | | -1 | Interest rate swaps | | — | | 0 | | | | 0 | | | | 0 | | | | 0 | Not designated as hedging instrument | | | | | | | | | | | | | | | | | FX forward contracts | | FVTPL | | -61 | | | | -61 | | | | -61 | | | | -61 | Total financial instruments, net | | | | -77 | | -5,357 | | 4,904 | | -9,214 | | -1,128 | | 2,509 | | -7,833 |
1 We do not separately disclose the fair value for cash and cash equivalents, trade receivables, and accounts payable as their carrying amounts are a reasonable approximation of their fair values. 2 Since the line items Trade receivables, Trade payables, and Other financial assets contain both financial and non-financial assets or liabilities (such as other taxes or advance payments), the carryingcsarrying amounts of non-financial assets or liabilities are shown to allow a reconciliation to the corresponding line items in the Consolidated Statements of Financial Position. 3 For lease liabilities, included in the line item Other non-derivative financial liabilities, separate disclosure of fair value is not required. | | | | | | | | | € millions | | Category | | 12/31/2022 | | | | | Carrying Amount | | At Amortized Cost | | At Fair Value | Financial assets | | | | | | | | | At fair value through profit or loss | | FVTPL | | 8,028 | | | | 8,028 | At amortized cost | | AC | | 12,847 | | 12,847 | | | Financial liabilities | | | | | | | | | At fair value through profit or loss | | FVTPL | | -88 | | | | -88 | At amortized cost | | AC | | -15,002 | | -15,002 | | |
Fair Values of Financial Instruments by Instrument Classification | | | | | | | | | € millions | | Category | | 12/31/2021 | | | | | Carrying Amount | | At Amortized Cost | | At Fair Value | Financial assets | | | | | | | | | At fair value through profit or loss | | FVTPL | | 10,131 | | | | 10,131 | At amortized cost | | AC | | 13,323 | | 13,323 | | | Financial liabilities | | | | | | | | | At fair value through profit or loss | | FVTPL | | -62 | | | | -62 | At amortized cost | | AC | | -16,517 | | -16,517 | | |
Fair Values of Financial Instruments by Instrument Classification
| | | | | | | | | € millions | | Category | | 12/31/2020 | | | | | Carrying Amount | | At Amortized Cost | | At Fair Value | Financial assets | | | | | | | | | At fair value through profit or loss | | FVTPL | | 4,846 | | | | 4,846 | At amortized cost | | AC | | 11,547 | | 11,547 | | | Financial liabilities | | | | | | | | | At fair value through profit or loss | | FVTPL | | -61 | | | | -61 | At amortized cost | | AC | | -16,904 | | -16,904 | | |
Determination of Fair Values A description of the valuation techniques and the inputs used in the fair value measurement is given below: Financial Instruments Measured at Fair Value on a Recurring Basis | | | | | | | | |
|---|
Type | | Fair Value
Hierarchy | | Determination of Fair
Value/Valuation Technique | | Significant
Unobservable
Inputs | | Interrelationship
Between Significant
Unobservable Inputs
and Fair Value
Measurement |
|---|
Other financial assets | | | | | | | | | Money-market and similar funds | | Level 1 | | Quoted prices in an active market | | NA | | NA | Debt securities | | Level 1 | | Quoted prices in an active market | | NA | | NA | Listed equity securities | | Level 1 | | Quoted prices in an active market | | NA | | NA | | | Level 2 | | Quoted prices in an active market deducting a discount for the disposal restriction derived from the premium for a respective put option. | | NA | | NA | Unlisted equity securities | | Level 3 | | Market approach. Comparable company valuation using revenue multiples derived from companies comparable to the investee. | | -Peer companies used (revenue multiples range from 3.50.75 to 11.5)24.0) -Revenues of investees -Discounts for lack of marketability (10%(7.3% to 32.3%28.3%) | | The estimated fair value would increase (decrease) if: -The revenue multiples were higher (lower) -The investees’ revenues were higher (lower) -The liquidity discounts were lower (higher) |
| | | | | | | | |
|---|
Type | | Fair Value
Hierarchy | | Determination of Fair
Value/Valuation Technique | | Significant
Unobservable
Inputs | | Interrelationship
Between Significant
Unobservable Inputs
and Fair Value
Measurement |
|---|
| | | | Market approach. Venture capital method evaluating a variety of quantitative and qualitative factors such as actual and forecasted results, cash position, recent or planned transactions, and market comparable companies. | | - Nature and selection of financing rounds - Weighting of financingfinancings rounds - Discounts for lack of marketability - Weighting of equity allocation method such as option pricing model and common stock equivalent model - Volatility assumptions - Estimated time to exit - Imminent exit value | | The estimated fair value would increase (decrease) if: - Different financing rounds are selected - Weighting of financing rounds changes -Weighting of the applied equity allocation methods changes - Volatility assumptions were higher(lower)higher (lower) - Estimated time to exit increases (decreases) - The imminent exit value increases (decreases) | | | | | Last financing round valuations | | Nature and pricing indication of latest financing round | | The estimated fair value would increase (decrease) if: -Price of latest financing round increases (decreases)would increase (decrease) - The overall company value werewould be higher (lower) - The respective analyzed share class would be affected by this change due to its rights and preferences | | | | | Net asset value/fair market value as reported by the respective funds | | Net asset value calculations of the respective funds | | The estimated fair value would increase (decrease) if: -ReportedReported net asset value of respective fund werewould be higher (lower)
| Call option on equity shares | | Level 3 | | Market approach. Venture capital method evaluating a variety of quantitative and qualitative factors such as actual and forecasted results, cash position, recent or planned transactions, and market comparable companies. | | NA | | NA | Other financial assets/ Financial liabilities | | | | | FX forward contracts | | Level 2 | | Discounted cash flow using par method. Expected future cash flows based on forward exchange rates are discounted over the respective remaining term of the contracts using the respective deposit interest rates and spot rates. | | NA | | NA | Interest rate swaps | | Level 2 | | Discounted cash flow. Expected future cash flows are estimated based on forward interest rates from observable yield curves and contract interest rates, discounted at a rate that reflects the credit risk of the counterparty. | | NA | | NA |
Financial Instruments Not Measured at Fair Value | | | | | Type | | Fair Value Hierarchy | | Determination of Fair Value/Valuation Technique | Financial liabilities | | | | | Fixed-rate bonds (financial liabilities) | | Level 1 | | Quoted prices in an active market | Fixed-rate private placements/ loans (financial liabilities) | | Level 2 | | Discounted cash flows Future cash outflows for fixed interest and principal are discounted over the term of the respective contracts using the market interest rates as at the reporting date. |
For other non-derivative financial assets/liabilities and variable rate financial debt, it is assumed that their carrying value reasonably approximates their fair values. Transfers Between Levels 1 and 2 Transfers of equity securities from Level 2 to Level 1, which occurred because disposal restrictions lapsed and deducting a discount for such restriction was no longer necessary, were €1,030€93 million in 2021 (2020: €912022 (2021: €1.030 million), while transfers from Level 1 to Level 2 did not occur at all. Level 3 Fair Value Disclosures The following table shows the reconciliation of fair values from the opening to the closing balances for our unlisted equity securities and call options on equity shares classified as Level 3 fair values: Reconciliation of Level 3 Fair Values | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | 1/1 | | 2,508 | | 1,896 | | 4,881 | | 2,508 | Transfers | | | | | | | | | Into Level 3 | | 0 | | 0 | | 0 | | 0 | Out of Level 3 | | -455 | | -201 | | -25 | | -455 | Purchases | | 1,076 | | 728 | | 522 | | 1,076 | Sales | | -852 | | -233 | | -43 | | -852 | Gains/losses | | | | | | | | | Included in financial income, net | | 2,348 | | 501 | | -789 | | 2,348 | Included in exchange differences in other comprehensive income | | 256 | | -183 | | 337 | | 256 | 12/31 | | 4,881 | | 2,508 | | 4,883 | | 4,881 | Change in unrealized gains/losses in profit or loss for equity investments held at the end of the reporting period | | 1,789 | | 376 | | -788 | | 1,789 |
Transfers out of Level 3 are due to initial public offerings of the respective investees or distributions in kind in the form of listed investees. Changing the unobservable inputs to reflect reasonably possible alternative assumptions would not have a material impact on the fair values of our unlisted equity securities held as FVTPL as at the reporting date. Section G — Other Disclosures This section provides additional disclosures on miscellaneous topics, including information pertaining to the Executive Board, the Supervisory Board, related party transactions, and other corporate governance topics. (G.1) Prepaid Expenses and Other Tax Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | | 2022 | | 2021 | | | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Prepaid expenses | | 588 | | 242 | | 830 | | 495 | | 187 | | 682 | | | 828 | | 512 | | 1,340 | | 588 | | 242 | | 830 | | Other tax assets | | 219 | | 53 | | 272 | | 209 | | 52 | | 261 | | | 244 | | 49 | | 293 | | 219 | | 53 | | 272 | | Total | | 807 | | 295 | | 1,102 | | 704 | | 239 | | 943 | | | 1,072 | | 561 | | 1,633 | | 807 | | 295 | | 1,102 | | / Other non-financial assets | | 1,633 | | 2,628 | | 4,261 | | 1,321 | | 1,926 | | 3,247 | | | 2,139 | | 3,580 | | 5,719 | | 1,633 | | 2,628 | | 4,261 | | Prepaid expenses and other tax assets as % of / Other non-financial assets | | 49 | | 11 | | 26 | | 53 | | 12 | | 29 | | | 50 | | 16 | | 29 | | 49 | | 11 | | 26 | |
Prepaid expenses primarily consist of prepayments for hyperscalers, support services, and software royalties. Other tax assets primarily consist of value-added tax (VAT). (G.2) Other Tax Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2022 | | 2021 | | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | | Current | | Non-Current | | Total | Other tax liabilities | | 646 | | 0 | | 646 | | 632 | | 0 | | 632 | | 662 | | 0 | | 662 | | 646 | | 0 | | 646 | / Other non-financial liabilities | | 5,203 | | 860 | | 6,063 | | 4,643 | | 770 | | 5,413 | | 4,818 | | 705 | | 5,523 | | 5,203 | | 860 | | 6,063 | Other tax liabilities as % of / Other non-financial liabilities | | 12 | | 0 | | 11 | | 14 | | 0 | | 12 | | 14 | | 0 | | 12 | | 12 | | 0 | | 11 |
Other tax liabilities primarily consist of VAT, payroll tax, sales tax, and withholding tax. (G.3) Other Litigation, Claims, and Legal Contingencies This Note discloses information about intellectual property-related litigation and claims, tax-related litigation other than income tax-related litigation (see Note (C.5)), and anti-bribery and export control matters. | y Uncertainty in Context of Legal Matters | The policies outlined in Note (A.4) for customer-related provisions, which include provisions for customer-related litigation cases and claims, equally apply to our other litigation, claims, and legal contingencies disclosed in this Note. The outcome of litigation and claims is intrinsically subject to considerable uncertainty. Management’s view of these matters may also change in the future. Actual outcomes of litigation and claims may differ from the assessments made by management in prior periods, which could result in a material impact on our business, financial position, profit, cash flows, or reputation. Most of the lawsuits and claims are of a very individual nature and claims are either not quantified by the claimants or the claim amounts quantified are, based on historical evidence, not expected to be a good proxy for the expenditure that would be required to resolve the case concerned. The specifics of the jurisdictions where most of the claims are located further impair the predictability of the outcome of the cases. Therefore, it is typically not practicable to reliably estimate the financial effect that these lawsuits and claims would have if SAP were to incur expenditure for these cases. Further, the expected timing of any resulting outflows of economic benefits from these lawsuits and claims is typically uncertain and not estimable, as it depends generally on the duration of the legal proceedings and settlement negotiations required to resolve them. |
We are subject to a variety of claims and lawsuits that arise from time to time in the ordinary course of our business, including proceedings and claims that relate to companies we have acquired. We will continue to vigorously defend against all claims and lawsuits against us.The provisions recorded for these claims and lawsuits as at December 31, 2021,2022, are neither individually nor in the aggregate material to SAP. Among the claims and lawsuits disclosed in this Note are the following classes: Intellectual Property-Related Litigation and Claims Intellectual property-related litigation and claims are cases in which third parties have threatened or initiated litigation claiming that SAP violates one or more intellectual property rights that they possess. Such intellectual property rights may include patents, copyrights, and other similar rights. Contingent liabilities exist from intellectual property-related litigation and claims for which no provision has been recognized. Generally, it is not practicable to estimate the financial impact of these contingent liabilities due to the uncertainties around the litigation and claims, as outlined above. The total amounts claimed by plaintiffs in those intellectual property-related lawsuits or claims in which a claim has been quantified were not material to us as at December 31, 20212022 and 2020.2021. Based on our past experience, most of the intellectual property-related litigation and claims tend to be either dismissed in court or settled out of court for amounts significantly below the originally claimed amounts. We currently believe that resolving the intellectual property-related claims and lawsuits pending as at December 31, 2021,2022, will neither individually nor in the aggregate have a material adverse effect on our business, financial position, profit, or cash flows. Individual cases of intellectual property-related litigation and claims include the following: In June 2018, Teradata Corporation, Teradata US, Inc. and Teradata Operations, Inc. (collectively “Teradata”) filed a civil lawsuit against SAP SE, SAP America, Inc., and SAP Labs, LLC in U.S. federal court in California. Teradata alleged that SAP misappropriated trade secrets of Teradata, infringed Teradata’s copyrights (this claim was subsequently withdrawn by Teradata), and violated U.S. antitrust laws. Teradata sought unspecified monetary damages and injunctive relief. In 2019, SAP asserted patent infringement counterclaims against Teradata seeking monetary damages and injunctive relief. In 2020, Teradata initiated a second civil lawsuit against SAP asserting patent infringement, seeking monetary damages and injunctive relief; in February 2021, SAP filed patent infringement counterclaims against Teradata in this second U.S. lawsuit as well as a civil lawsuit against Teradata in Germany asserting patent infringement, seeking monetary damages and injunctive relief. Currently, all claims between the parties have been dismissed. Teradata has appealed the dismissal of its trade secret and antitrust claims; this appeal is expected to be completed by late 2023. Tax-Related Litigation We are subject to ongoing audits by domestic and foreign tax authorities. In respect of non-income taxes, we are involved in various proceedings with only a few foreign tax authorities regarding assessments and litigation matters on intercompany royalty payments and intercompany services. The total potential amount in dispute related to these matters for all applicable years is approximately €195€344 million (2020: €154(2021: €195 million). We have not recorded a provision for these matters, as we believe that we will prevail. For more information about our income tax-related litigation, see Note (C.5). Anti-Bribery and Export Control Matters SAP has received communications and whistleblower information alleging conduct that may violate anti-bribery laws in the United States (including the U.S. Foreign Corrupt Practices Act (FCPA)), and other countries. The Office of Ethics and Compliance (OEC) of SAP is conducting investigations with the assistance of an external law firm and voluntarily advised the U.S. Securities and Exchange Commission (U.S. SEC) and the U.S. Department of Justice (U.S. DOJ), as well as local authorities where potential violations are being investigated. The investigations and dialogue between SAP and the local authorities and the U.S. SEC and U.S. DOJ are ongoing.ongoing and neither the outcome of the investigations nor the date when substantiated findings will be available is predictable at this point in time. The alleged conduct may result in monetary penalties or other sanctions under the FCPA and/or other anti-bribery laws. In addition, SAP’s ability to conduct business in certain jurisdictions could be negatively impacted. The comprehensive and exhaustive investigations and the corresponding remediation activities are still ongoing. In South Africa, SAP is seeking resolution of pending civil claims relating to ongoing investigations. ConsideringAlthough there could be an unfavorable outcome in one or more of the complexity of individual factors and the large number of open questions, it is not entirely possible at this point in time to assess the risk of a financial impact. For the reasons outlined above,ongoing investigations, it is impossible at this point in time to determine whether themake an informed judgment about any possible financial impact.
As a consequence, as at December 31, 2022, no provisions have been recognized for potential anti-bribery law violations represent present obligations of SAP and, if so, to reliably estimate the amount of these obligations. We recognized no material provisions for these potential violations in our consolidated financial statements 2021.statements. It is currently also not practicable to estimate the financial effect of any contingent liabilities that may result from these potential violations. Furthermore, SAP voluntarily self-disclosed potential export control and economic sanctions violations to the U.S. DOJ and the U.S. DepartmentF-93
(G.4) Board of Directors Executive Board Memberships on supervisory boards and other comparable governing bodies of enterprises, other than subsidiaries of SAP, on December 31, 20212022 Christian Klein Chief Executive Officer Corporate Development and Strategy, Security and Secrecy, Compliance, Sustainability and Business Networks Supervisory Board, adidas AG, Herzogenaurach, Germany Sabine Bendiek (from January 1, 2021) Chief People & Operating Officer, Labor Relations Director HR Strategy, Business Transformation, Leadership Development, Talent Development Supervisory Board, Schaeffler AG, Herzogenaurach, Germany Luka Mucic Chief Financial Officer Global Finance and Administration including Investor Relations, Internal Audit, Data Protection & Privacy, Business Process Intelligence, SustainabilityWorking Capital Management Solutions Supervisory Board, HeidelbergCement AG, Heidelberg, Germany Juergen Mueller Chief Technology Officer Technology & Innovation Technology and Innovation Strategy, SAP HANA Database, SAP Business Technology Platform including Data Management, Analytics Cloud Infrastructureand Planning, Integration, and Application Development Capabilities Supervisory Board, DFKI GmbH, Kaiserslautern, Germany (until February 15, 2022) Scott Russell (from February 1, 2021) Customer Success Global Field Organization including Sales, Services, Partner Ecosystem, and Customer Engagement Thomas Saueressig SAP Product Engineering Global Responsibility for all SAP Business Software Applications, Cloud Operations and Support, Cross-Development Functions, SAP Enterprise Adoption Organization Board of Directors, Nokia Corporation, Espoo, Finland (from April 5, 2022) Julia White (from March 1, 2021) Chief Marketing and Solutions Officer Global Marketing, Corporate Communications, Government Affairs Executive Board Members Who Left During 2021
Adaire Fox-Martin (until June 30, 2021, member of the Executive Board until January 31, 2021)
Supervisory Board Memberships on supervisory boards and other comparable governing bodies of enterprises, other than subsidiaries of SAP, on December 31, 20212022 Prof. Dr. h.c. mult. Hasso Plattner2, 4, 6,86, 8 Chairperson Lars Lamadé1, 2, 4,84, 8 Deputy Chairperson (from January 1, 2022) Head of Global Sponsorships Supervisory Board, Rhein-Neckar Loewen GmbH, Kronau, Germany
Manuela Asche-Holstein (from JulyAsche-Holstein3, 7, 8 2021)7 Industry Advisor Expert Member of the SAP Germany SE & Co. KG Works Council Aicha Evans2, 4, 6, 7 Chief Executive Officer and Member of the Board of Directors, Zoox, Inc., Foster City, CA, United States Board of Directors, Joby Aviation LLC, Santa Cruz, CA, United States Prof. Dr. Gesche Joost4, 7 Professor for Design Research and Head of the Design Research Lab, Berlin University of the Arts, Berlin, Germany Supervisory Board, Ottobock SE & Co. KGaA, Duderstadt, Germany
Supervisory Board, ING-DiBa AG, Frankfurt, Germany Margret Klein-Magar1, 2, 3, 84 Deputy Chairperson (until December 31, 2021)
Vice President, Head of SAP Alumni Relations Chairperson of the Spokespersons’ Committee of Senior Managers of SAP SE Monika Kovachka-Dimitrova1, 2, 4, 7 Chief Operations Expert Member of the SAP SE Works Council (Europe) Peter Lengler (from August 10, 2021)1, 3, 7, 8 Value Advisor Expert Member of the SAP Germany SE & Co. KG Works Council and Member of the SAP SE Works Council (Europe) (until November 21, 2022) Bernard LiautaudJennifer Xin-Zhe Li (from May 18, 2022)2, 43, 5
ManagingGeneral Partner Balderton Capital, London, United Kingdom
of Changcheng Investment Partners, Beijing, China
Board of Directors, nlyte SoftwareFlex Ltd., London,Singapore and San José, CA, United KingdomStates (until October 5, 2021)August 25, 2022) Board of Directors, Vestiaire Collective SA, Levallois-Perret, France (until April 2, 2021)ABB Ltd., Zurich, Switzerland Board of Directors, Dashlane, Inc., New York, NY, United StatesKone Oy, Espoo, Finland Board of Directors, Qubit DigitalFull Truck Alliance Co. Ltd., London, United Kingdom (until October 10, 2021) Board of Directors, Aircall.io, New York City, NY, United States
Board of Directors, Virtuo Technologies, Paris, France
Board of Directors, Peakon Aps, Copenhagen, Denmark (until March 9, 2021)
Board of Directors, Tim Talent SAS, Paris, France
Board of Directors, Citymapper Ltd., London, United Kingdom
Board of Directors, Toucan Toco SAS, Paris, France
Board of Directors, Traefik Labs SAS, Lyon, France
Board of Directors, Kili Technology SAS, Paris, France (from July 26, 2021)
Board of Directors, 2121 Atelier, Inc., Brooklyn, NY, United States (from November 18, 2021)
Board of Directors, Sweep SAS, Paris, France (from December 14, 2021)Nanjing, Jiangsue, China, and Cayman Islands
Dr. Qi Lu4,7,84, 7, 8 CEO, MiraclePlus Ltd., Beijing, China Board of Directors, Pinduoduo Inc., Shanghai, China Chairperson of the Board of Directors, Pine Field Holding Limited, Cayman Islands Chairperson of the Board of Directors, Pine Field Holding Limited, Hong Kong, China Chairperson of the Board of Directors, Pine Field Ltd., Beijing, China Gerhard Oswald5,2, 4, 8 Managing Director of Oswald Consulting GmbH, Walldorf, Germany Advisory Board, TSG 1899 Hoffenheim Fußball-Spielbetriebs GmbH, Sinsheim, Germany Christine Regitz1, 2, 4, 5 8 Vice President, User Experience Vice President, Head of Women in Tech@SAP Supervisory Board, Schloss Dagstuhl – Leibniz Center for Informatics, Wadern, Germany (from May 20, 2022) Supervisory Board, HV Capital Manager GmbH, Munich, Germany (from May 1, 2022) Dr. Friederike Rotsch2, 3, 6,7,86, 7 Group General Counsel and Head of Group Legal & Compliance, Merck KGaA, Darmstadt, Germany Heike Steck1, 4,5,, 5, 78 Senior Operations Manager Member of the SAP SE Works Council and Member of the SAP SE Works Council (Europe) Helmut Stengele (from October 29, 2021) On Early Retirement Dr. Rouven Westphal (from May 12, 2021)3, 5, 6, 8 Member of the Executive Board of the Hasso Plattner Foundation, Potsdam, Germany, and Managing Director of the General Partner of HPC Germany GmbH & Co. KG, Potsdam, Germany Advisory Board, Sharks Sports & Entertainment LLC, San José, CA, United States Dr. Gunnar Wiedenfels3, 5, 6 Chief Financial Officer, Warner Bros. Discovery, Inc., New York, NY, United States Board of Directors, Motor Trend Group, LLC, El Segundo, CA, United States (until July 1, 2021) Board of Directors, OWN LLC, West Hollywood, CA, United States
Board of Directors, Speechagain, Inc., New York, NY, United States James Wright1, 3, 4, 5, 8 Chairperson of the SAP SE Works Council (Europe) (until November 21, 2022) Member of the SAP SE Works Council (Europe) (from November 22, 2022) Supervisory Board Members Who Left During 20212022 Pekka Ala-PietiläBernard Liautaud (until May 12, 2021)
Panagiotis Bissiritsas (until July 7, 2021)
Christa Vergien-Knopf (until August 9, 2021)
Ralf Zeiger (until October 28, 2021)18, 2022)
1 Appointed by the SAP SE Works Council (Europe) 2 Member of the Company’s Personnel and Governance Committee 3 Member of the Company’s Audit and Compliance Committee 4 Member of the Company’s Technology and Strategy Committee 5 Member of the Company’s Finance and Investment Committee 6 Member of the Company’s Nomination Committee 7 Member of the Company’s People and Culture Committee 8 Member of the Company’s China StrategyGo-To-Market and Operations Committee (G.5) Executive and Supervisory Board Compensation y Accounting Policy | The share-based payment amounts disclosed below in the table “Executive Board Compensation” are based on the grant date fair value of the share units in the respective year. In 2022, 2021 and 2020, share units were issued to the Executive Board members under the LTI 20202020. For more information about the terms and in 2019 under the LTI 2016 Plan.details of this plan, see Note (B.3). In the table “Share-Based Payment for Executive Board Members,” the share-based payment expense is the amount recorded in profit or loss under IFRS 2 (Share-Based Payment) in the respective period. |
The total compensation of the Executive Board members for each of the years 2022, 2021, 2020, and 20192020 was as follows: Executive Board Compensation | | | | | | | | | | | | | € thousands | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Short-term employee benefits | | 25,015 | | 5,094 | | 17,378 | | 12,556 | | 25,015 | | 5,094 | Share-based payment | | 25,095 | | 23,095 | | 32,393 | | 20,726 | | 25,095 | | 23,095 | Subtotal | | 50,110 | | 28,189 | | 49,771 | | 33,282 | | 50,110 | | 28,189 | Post-employment benefits | | 464 | | 488 | | 2,825 | | -1,429 | | 464 | | 488 | Thereof defined-benefit | | 461 | | 487 | | 2,056 | | -1,433 | | 461 | | 487 | Thereof defined-contribution | | 3 | | 1 | | 769 | | 4 | | 3 | | 1 | Termination Benefits | | | 9,600 | | NA | | NA | Total | | 50,574 | | 28,677 | | 52,596 | | 41,453 | | 50,574 | | 28,677 |
Share-Based Payment for Executive Board Members | | | | | | | | | | | | | | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Number of share units granted | | 238,428 | | 201,690 | | 344,047 | | 205,965 | | 238,428 | | 201,690 | Total expense in € thousands | | 6,356 | | 11,173 | | 44,447 | | 9,986 | | 6,356 | | 11,173 |
The defined benefit obligation (DBO) for pensions to Executive Board members and the annual pension entitlement of the members of the Executive Board on reaching age 62 based on entitlements from performance-based and salary-linked plans were as follows: Retirement Pension Plan for Executive Board Members | | | | | | | | | | | | | € thousands | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | DBO 12/31 | | 3,435 | | 3,520 | | 5,497 | | 1,462 | | 3,435 | | 3,520 | Annual pension entitlement | | 108 | | 98 | | 215 | | 114 | | 108 | | 98 |
The total annual compensation of the Supervisory Board members is as follows: Supervisory Board Compensation | | | | | | | | | | | | | € thousands | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Total compensation | | 3,856 | | 3,755 | | 3,770 | | 5,206 | | 3,856 | | 3,755 | Thereof fixed compensation | | 3,176 | | 3,149 | | 3,218 | | 3,149 | | 3,176 | | 3,149 | Thereof committee remuneration | | 680 | | 606 | | 553 | | 2,058 | | 680 | | 606 |
The Supervisory Board members do not receive any share-based payment for their services. As far as members who are employee representatives on the Supervisory Board receive share-based payment, such compensation is for their services as employees only and is unrelated to their status as members of the Supervisory Board. Payments to/DBO for Former Executive Board Members | | | | | | | | | | | | | € thousands | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | Payments | | 2,159 | | 3,010 | | 2,081 | | 2,217 | | 2,159 | | 3,010 | DBO 12/31 | | 42,313 | | 44,043 | | 44,306 | | 31,217 | | 42,313 | | 44,043 |
SAP did not grant any compensation advance or credit to, or enter into any commitment for the benefit of, any member of the Executive Board or Supervisory Board in 2022, 2021, 2020, or 2019.2020. Detailed information about the different elements of the compensation is disclosed in the Compensation Report, which is available on SAP’s Web site. (G.6) Related Party Transactions Other Than Board Compensation Certain Supervisory Board members of SAP SE currently hold, or held within the last year, positions of significant responsibility with other entities. We have relationships with certain of these entities in the ordinary course of business, whereby we buy and sell products, assets, and services at prices believed to be consistent with those negotiated at arm’s length between unrelated parties. Companies controlled by Hasso Plattner, Chairperson of the Supervisory Board of SAP SE and Chief Software Advisor of SAP, engaged in the following transactions with SAP: providing consulting services to SAP, receiving sport sponsoring from SAP, and making purchases of SAP products and services. Occasionally, members of the Executive Board of SAP SE obtain services from SAP for which they pay a consideration consistent with those negotiated at arm’s length between unrelated parties. All amounts related to the abovementioned transactions were immaterial to SAP in all periods presented. In total, we sold products and services to companies controlled by members of the Supervisory Board in the amount of €2 million (2020: €3 million), we bought products and services from such companies in the amount of €4 million (2020: €2 million), and we provided sponsoring and other financial support to such companies in the amount of €3 million (2020: €4 million). Outstanding balances at year end from transactions with such companies were €0 million (2020: €0 million) for amounts owed to such companies and €0 million (2020: €0 million) for amounts owed by such companies. All of these balances are unsecured and interest-free and settlement is expected to occur in cash. Commitments (the longest of which is for 2 years) made by us to purchase further goods or services from these companies and to provide further sponsoring and other financial support amount to €6 million as at December 31, 2021 (2020: €10 million).
In total, we sold services to members of the Executive Board and the Supervisory Board in the amount of €0 million (2020: €0 million), and we received services from members of the Supervisory Board (includingRelated Party Transactions
| | | | | | | | | | | | | | | | | | | | | | | | | | | Companies controlled by | | | | | | | Executive Board Members | | Supervisory Board Members | | Supervisory Board Members | | Associated Entities | € millions | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | Products and services provided | | NA | | NA | | 0 | | 0 | | 1 | | 2 | | 11 | | 6 | Products and services received | | NA | | NA | | 21 | | 21 | | 4 | | 4 | | 93 | | 37 | Sponsoring and other financial support provided | | NA | | NA | | NA | | NA | | 5 | | 3 | | NA | | NA | Outstanding balances at year end (Vendors) | | NA | | NA | | 0 | | 0 | | 0 | | 0 | | -18 | | -15 | Outstanding balances at year end (Customers) | | NA | | NA | | 0 | | 0 | | 0 | | 0 | | 4 | | 4 | Commitments at year end | | NA | | NA | | 0 | | 0 | | 512 | | 6 | | NA | | NA |
1 Including services from employee representatives on the Supervisory Board in their capacity as employees of SAP) in the amountSAP 2 The longest of €2 million (2020: €2 million). Amounts owed, but not yet paid, to Supervisory Board members from these transactions were €0 million as at December 31, 2021 (2020: €0 million). commitments is six years. All of these balances are unsecured and interest-free and settlement is expected to occur in cash. For information about the compensation of our Executive Board and Supervisory Board members, see Note (G.5).
Further, we have relationships to associated entities. In total, we sold products and services to these entities in the amount of €6 million (2020: €2 million), we bought products and services from such companies in the amount of €37 million (2020: €0 million). Outstanding balances at year end from transactions with such companies were €15 million (2020: €0 million) for amounts owed to such companies and €4 million (2020: €0 million) for amounts owed by such companies. All of these balances are unsecured and interest-free, and settlement is expected to occur in cash.
For more information about the SAP Fioneer divestment (SAP Fioneer is an associated entity of SAP and thus treated as a related party), see Note (D.1) and Note (D.6).
(G.7) Principal Accountant Fees and Services At the Annual General Meeting of Shareholders held on May 12, 2021,18, 2022, our shareholders elected KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) as SAP’s independent auditor for 2021.2022. KPMG has been the Company’s principal auditor since the fiscal year 2002. KPMG and other firms in the global KPMG network charged the following fees to SAP for audit and other professional services related to 20212022 and the previous years: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | € millions | | 2021 | | 2020 | | 2019 | | 2022 | | 2021 | | 2020 | | | KPMG AG | | Foreign | | Total | | KPMG AG | | Foreign | | Total | | KPMG AG | | Foreign | | Total | | KPMG AG | | Foreign | | Total | | KPMG AG | | Foreign | | Total | | KPMG AG | | Foreign | | Total | | | (Germany) | | KPMG Firms | | | | (Germany) | | KPMG Firms | | | | (Germany) | | KPMG Firms | | | | (Germany) | | KPMG Firms | | | | (Germany) | | KPMG Firms | | | | (Germany) | | KPMG Firms | | | Audit fees | | 3 | | 8 | | 12 | | 3 | | 9 | | 12 | | 3 | | 7 | | 10 | | 4 | | 10 | | 14 | | 3 | | 8 | | 12 | | 3 | | 9 | | 12 | Audit-related fees | | 2 | | 5 | | 7 | | 0 | | 1 | | 2 | | 0 | | 1 | | 1 | | 3 | | 7 | | 10 | | 2 | | 5 | | 7 | | 0 | | 1 | | 2 | Tax fees | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | All other fees | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | Total | | 6 | | 13 | | 19 | | 3 | | 10 | | 14 | | 3 | | 8 | | 10 | | 7 | | 17 | | 24 | | 6 | | 13 | | 19 | | 3 | | 10 | | 14 |
Audit fees are the aggregate fees charged by KPMG for auditing our consolidated financial statements and the statutory financial statements of SAP SE and its subsidiaries. Audit-related fees are fees charged by KPMG for assurance and related services that are reasonably related to the performance of the audit and for service organization attestation procedures, and fees charged by KPMG for services regarding the initial public offering of Qualtrics.procedures. (G.8) Events After the Reporting Period On January 27, 2022,Increased Focus on Strategic Growth Areas and Accelerated Cloud Transformation
In 2023, SAP announcedwill conduct a targeted restructuring program in selected areas of the Company. The purpose is to further focus on strategic growth areas by aligning our operating models and go-to-market approach with our accelerated cloud transformation. Furthermore, SAP intends to strengthen its intent to acquire a majority stake of Taulia, a leading provider of working capital management solutions.core business and improve overall process efficiency. The acquisitionprogram is expected to further expandaffect approximately 2.5% of SAP’s Business Network capabilities and strengthen SAP’s solutions foremployees. The vast majority of the CFO office. The acquisition€250 million to €300 million in restructuring costs associated with the program is expected to closebe recognized in March 2022, following completionthe first quarter of customary closing2023, impacting IFRS operating profit. SAP to Explore a Sale of Its Stake in Qualtrics In line with SAP’s strategic initiative to streamline its portfolio, SAP has decided to explore a sale of its stake in Qualtrics. In the event of a successful transaction, SAP intends to remain a go-to-market and technology partner, servicing its joint customers and contributing to its growth and category leadership. SAP is currently evaluating the accounting treatment and a potential recognition as discontinued operation according to IFRS 5. A final decision on any transaction, its conditions, and timing is subject to market conditions, agreement on acceptable terms, regulatory approvals.approvals, and the approval of the SAP SE Supervisory Board. Other than that, no events have occurred since December 31, 2021, that have a material impact onOrganizational Changes
At the Company’s Consolidated Financial Statements.beginning of 2023, SAP modified its organizational structure to further drive simplification and integration. The organizational changes might also affect SAP’s segment reporting. (G.9) Scope of Consolidation,Consolidation; Subsidiaries and Other Equity Investments Entities Consolidated in the Financial Statements | | | | | Total | 12/31/20192020 | | 264
| Additions
| | 17
| Disposals
| | -12
| 12/31/2020
|
| 269 | Additions |
| 39 | Disposals |
| -18 | 12/31/2021 | | 290 | Additions | | 26 | Disposals | | -28 | 12/31/2022 | | 290288
|
The additions relate to legal entities added in connection with acquisitions and foundations. The disposals are mainly due to mergers, and liquidations of legal entities. Subsidiaries1 Major Subsidiaries | | | | | | | | | | | | | Name and Location of Company | | Owner-ship | | Total Revenue | | Profit/Loss (–) | | Total Equity as | | Number of | | Foot-note | | | | | in 20211 | | After Tax for | | at 12/31/20211 | | Employees as | | | | | | | | | 20211 | | | | at 12/31/20212 | | | | | % | | € thousands | | € thousands | | € thousands | | | | | Ariba Technologies India Private Limited, Bangalore, India | | 100 | | 80,790 | | 9,481 | | 34,185 | | 1,281 | | | Ariba, Inc., Palo Alto, CA, United States | | 100 | | 1,318,872 | | 499,785 | | 5,276,448 | | 1,772 | | | Concur Technologies, Inc., Bellevue, WA, United States | | 100 | | 1,621,912 | | 188,665 | | 7,878,818 | | 3,485 | | | Qualtrics, LLC, Wilmington, DE, United States | | 100 | | 898,901 | | -1,440,737 | | 8,228,091 | | 3,380 | | | SAP (China) Co., Ltd., Shanghai, China | | 100 | | 1,106,711 | | -1,577 | | -213,060 | | 6,147 | | 16 | SAP (Schweiz) AG, Biel, Switzerland | | 100 | | 1,092,657 | | 127,116 | | 264,263 | | 810 | | | SAP (UK) Limited, Feltham, United Kingdom | | 100 | | 1,235,416 | | 60,404 | | 45,239 | | 1,697 | | | SAP America, Inc., Newtown Square, PA, United States | | 100 | | 6,215,786 | | -309,232 | | 19,337,747 | | 8,731 | | | SAP Argentina S.A., Buenos Aires, Argentina | | 100 | | 162,335 | | 3,129 | | 67,259 | | 1,132 | | 16 | SAP Asia Pte. Ltd., Singapore, Singapore | | 100 | | 550,036 | | 7,457 | | -6,721 | | 1,110 | | 16 | SAP Australia Pty Ltd, Sydney, Australia | | 100 | | 740,871 | | 44,741 | | 67,725 | | 1,205 | | | SAP Brasil Ltda, São Paulo, Brazil | | 100 | | 467,512 | | -22,415 | | 44,060 | | 2,379 | | 16 | SAP Canada Inc., Toronto, Canada | | 100 | | 1,036,257 | | 139,927 | | 700,086 | | 3,012 | | | SAP Deutschland SE & Co. KG, Walldorf, Germany | | 100 | | 4,921,867 | | 946,574 | | 1,912,583 | | 4,463 | | 7,9 | SAP España - Sistemas, Aplicaciones y Productos en la Informática, S.A., Madrid, Spain | | 100 | | 510,602 | | 29,557 | | 341,508 | | 791 | | | SAP France S.A., Levallois-Perret, France | | 100 | | 1,099,071 | | 198,617 | | 1,794,013 | | 1,506 | | | SAP Hungary Rendszerek, Alkalmazások és Termékek az Adatfeldolgozásban Informatikai Kft., Budapest, Hungary | | 100 | | 133,643 | | 4,563 | | 23,817 | | 1,163 | | | SAP India Private Limited, Bangalore, India | | 100 | | 633,680 | | 103,453 | | 359,149 | | 2,125 | | | SAP Industries, Inc., Newtown Square, PA, United States | | 100 | | 588,508 | | 105,770 | | 1,122,929 | | 276 | | | SAP Italia Sistemi Applicazioni Prodotti in Data Processing S.p.A., Vimercate, Italy | | 100 | | 615,004 | | 37,154 | | 265,312 | | 750 | | | SAP Japan Co., Ltd., Tokyo, Japan | | 100 | | 1,251,106 | | 138,785 | | 458,761 | | 1,318 | | | SAP Labs Bulgaria EOOD, Sofia, Bulgaria | | 100 | | 78,971 | | 3,321 | | 21,544 | | 1,125 | | | SAP Labs India Private Limited, Bangalore, India | | 100 | | 628,073 | | 60,855 | | 205,586 | | 9,882 | | | SAP Labs, LLC, Palo Alto, CA, United States | | 100 | | 575,665 | | 159,933 | | 608,787 | | 1,893 | | | SAP México S.A. de C.V., Mexico City, Mexico | | 100 | | 415,025 | | 26,097 | | 111,265 | | 964 | | 16 | SAP National Security Services, Inc., Newtown Square, PA, United States | | 100 | | 858,772 | | 127,178 | | 651,935 | | 636 | | | SAP Nederland B.V., 's-Hertogenbosch, the Netherlands | | 100 | | 708,927 | | 208,699 | | 443,701 | | 610 | | 11 | SAP Service and Support Centre (Ireland) Limited, Dublin, Ireland | | 100 | | 209,533 | | 14,186 | | 50,793 | | 1,705 | | | SAP Services s.r.o., Prague, Czech Republic | | 100 | | 83,428 | | 2,074 | | 15,285 | | 1,191 | | |
| | | | | | | | | | | | | Name and Location of Company | | Owner-ship | | Total Revenue | | Profit/Loss (–) | | Total Equity as | | Number of | | Foot-note | | | | | in 20222 | | After Tax for | | at 12/31/20222 | | Employees as | | | | | | | | | 20222 | | | | at 12/31/20223 | | | | | % | | € thousands | | € thousands | | € thousands | | | | | Ariba Technologies India Private Limited, Bengaluru, India | | 100 | | 104,281 | | 18,076 | | 41,087 | | 1,308 | | | Ariba, Inc., Palo Alto, CA, United States | | 100 | | 1,457,046 | | 543,678 | | 6,147,376 | | 1,647 | | | Concur Technologies, Inc., Bellevue, WA, United States | | 100 | | 2,036,964 | | 329,150 | | 8,702,490 | | 3,368 | | | Qualtrics, LLC, Wilmington, DE, United States | | 100 | | 1,389,345 | | -1,279,289 | | 8,276,577 | | 3,920 | | | SAP (China) Co., Ltd., Shanghai, China | | 100 | | 1,315,556 | | 78,398 | | -115,740 | | 6,485 | | 18 | SAP (Schweiz) AG, Biel, Switzerland | | 100 | | 1,220,424 | | 121,350 | | 240,769 | | 860 | | | SAP (UK) Limited, Feltham, United Kingdom | | 100 | | 1,326,666 | | 109,566 | | 174,850 | | 1,721 | | | SAP America, Inc., Newtown Square, PA, United States | | 100 | | 7,679,678 | | -49,123 | | 20,620,854 | | 9,275 | | | SAP Argentina S.A., Buenos Aires, Argentina | | 100 | | 211,896 | | 20,369 | | 54,086 | | 1,115 | | 18 | SAP Asia Pte. Ltd., Singapore, Singapore | | 100 | | 658,218 | | 18,237 | | 16,758 | | 1,109 | | 18 | SAP Australia Pty Ltd, Sydney, Australia | | 100 | | 854,197 | | 64,877 | | 114,663 | | 1,317 | | | SAP Brasil Ltda., São Paulo, Brazil | | 100 | | 680,482 | | 10,379 | | 67,004 | | 2,532 | | 18 | SAP Canada Inc., Toronto, Canada | | 100 | | 1,143,722 | | 61,871 | | 701,953 | | 3,106 | | | SAP Deutschland SE & Co. KG, Walldorf, Germany | | 100 | | 5,213,029 | | 792,021 | | 1,724,802 | | 4,915 | | 9 | SAP España - Sistemas, Aplicaciones y Productos en la Informática, S.A., Madrid, Spain | | 100 | | 555,000 | | 16,247 | | 207,794 | | 912 | | | SAP France S.A., Levallois-Perret, France | | 100 | | 1,095,975 | | 271,450 | | 1,982,374 | | 1,562 | | | SAP Hungary Rendszerek, Alkalmazások és Termékek az Adatfeldolgozásban Informatikai Kft., Budapest, Hungary | | 100 | | 149,269 | | 3,350 | | 26,803 | | 1,317 | | | SAP India Private Limited, Bengaluru, India | | 100 | | 752,754 | | 105,449 | | 439,985 | | 2,279 | | | SAP Industries, Inc., Newtown Square, PA, United States | | 100 | | 589,487 | | 122,241 | | 1,316,745 | | 256 | | | SAP Italia Sistemi Applicazioni Prodotti in Data Processing S.p.A., Vimercate, Italy | | 100 | | 643,856 | | 30,780 | | 147,910 | | 792 | | | SAP Japan Co., Ltd., Tokyo, Japan | | 100 | | 1,186,733 | | 103,861 | | 407,789 | | 1,424 | | | SAP Labs Bulgaria EOOD, Sofia, Bulgaria | | 100 | | 97,599 | | 4,192 | | 25,753 | | 1,249 | | | SAP Labs India Private Limited, Bengaluru, India | | 100 | | 807,222 | | 77,473 | | 285,829 | | 10,406 | | | SAP Labs, LLC, Palo Alto, CA, United States | | 100 | | 628,751 | | 86,076 | | 758,813 | | 1,871 | | | SAP México S.A. de C.V., Mexico City, Mexico | | 100 | | 517,905 | | -7,337 | | 119,388 | | 1,060 | | | SAP National Security Services, Inc., Newtown Square, PA, United States | | 100 | | 1,148,035 | | 225,370 | | 554,346 | | 592 | | | SAP Nederland B.V., 's-Hertogenbosch, the Netherlands | | 100 | | 749,366 | | 384,264 | | 827,982 | | 693 | | 13 | SAP Service and Support Centre (Ireland) Limited, Dublin, Ireland | | 100 | | 273,401 | | 43,567 | | 68,008 | | 1,706 | | | SAP Services s.r.o., Prague, Czech Republic | | 100 | | 100,727 | | 1,264 | | 17,933 | | 1,280 | | | SuccessFactors, Inc., Newtown Square, PA, United States | | 100 | | 817,875 | | 322,698 | | 5,416,686 | | 767 | | |
Other Subsidiaries34 | | | | | Name and Location of Company
| | Ownership
| | Footnote
|
|
| %
|
|
|
| | |
| | "SAP Kazakhstan" LLP, Almaty, Kazakhstan
| | 100
|
|
| 110405, Inc., Newtown Square, PA, United States
| | 100
|
|
| Abakus Ukraine Limited Liability Company, Kiev, Ukraine
|
| 100
|
|
| Ambin Properties Proprietary Limited, Johannesburg, South Africa
| | 100
|
| 16
| Apex Expert Solutions LLC, Chantilly, VA, United States
|
| 100
|
|
| AppGyver Inc., Indianapolis, IN, United States
|
| 100
|
| 4
| AppGyver Oy., Helsinky, Finland
|
| 100
|
| 4
| Ariba Czech s.r.o., Prague, Czech Republic
| | 100
|
| 16
| Ariba India Private Limited, Gurugram, India
| | 100
|
|
| Ariba International Holdings, Inc., Wilmington, DE, United States
| | 100
|
|
| Ariba International Singapore Pte. Ltd., Singapore, Singapore
| | 100
|
|
| Ariba International, Inc., Wilmington, DE, United States
| | 100
|
|
| Ariba Slovak Republic, s.r.o., Košice, Slovakia
| | 100
|
|
| Ariba Software Technology Services (Shanghai) Co., Ltd., Shanghai, China
| | 100
|
|
| Ariba Technologies Netherlands B.V., 's-Hertogenbosch, the Netherlands
| | 100
|
| 11
| Business Objects Holding B.V., 's-Hertogenbosch, the Netherlands
| | 100
|
| 11
| Business Objects Option, LLC, Wilmington, DE, United States
| | 100
|
|
| Business Objects Software Limited (Trading as SAP Solutions), Dublin, Ireland
| | 100
|
|
| Callidus Software Inc., San Ramon, CA, United States
|
| 100
|
|
| Callidus Software Ltd., Feltham, United Kingdom
|
| 100
|
| 10
| Callidus Software Pty. Ltd., Sydney, Australia
|
| 100
|
|
| CallidusCloud (India) Private Limited, Hyderabad, India
|
| 100
|
|
| CallidusCloud (Malaysia) Sdn. Bhd., Kuala Lumpur, Malaysia
|
| 100
|
|
| CallidusCloud Holdings Pty. Ltd., Sydney, Australia
|
| 100
|
|
| CallidusCloud Pty. Ltd., Sydney, Australia
|
| 100
|
|
| Christie Partners Holding C.V., 's-Hertogenbosch, the Netherlands
| | 100
|
|
| Clarabridge Netherlands B.V., Amsterdam, the Netherlands
|
| 100
|
| 4
| Clarabridge UK Ltd, London, United Kingdom
|
| 100
|
| 4
| Clarabridge, Inc., Reston, VA, United States
|
| 100
|
| 4
| C-Learning Pty. Ltd., Sydney, Australia
|
| 100
|
|
| ClearTrip Inc. (Mauritius), Ebene, Mauritius
| | 100
|
|
| ClearTrip Inc., George Town, Cayman Islands
| | 57
|
|
|
| | | | | Name and Location of Company | | Ownership | | Footnote | | | % | | | "SAP Kazakhstan" LLP, Almaty, Kazakhstan | | 100 | | | 110405, Inc., Newtown Square, PA, United States | | 100 | | | Abakus Ukraine Limited Liability Company, Kyiv, Ukraine | | 100 | | | Ambin Properties Proprietary Limited, Johannesburg, South Africa | | 100 | | 18 | Apex Expert Solutions LLC, Chantilly, VA, United States | | 100 | | | AppGyver Inc., Indianapolis, IN, United States | | 100 | | | AppGyver Oy., Espoo, Finland | | 100 | | | Ariba Czech s.r.o., Prague, Czech Republic | | 100 | | | Ariba India Private Limited, Gurugram, India | | 100 | | | Ariba International Holdings, Inc., Wilmington, DE, United States | | 100 | | | Ariba International Singapore Pte. Ltd., Singapore, Singapore | | 100 | | | Ariba International, Inc., Wilmington, DE, United States | | 100 | | | Ariba Slovak Republic, s.r.o., Košice, Slovakia | | 100 | | | Ariba Software Technology Services (Shanghai) Co., Ltd., Shanghai, China | | 100 | | | Ariba Technologies Netherlands B.V., 's-Hertogenbosch, the Netherlands | | 100 | | 13 | Baiza Capital LLC, Newark, NJ, United States | | 0 | | 5, 8 | Baiza Capital S.A., Luxembourg, Luxembourg | | 0 | | 5, 8 | Business Objects Holding B.V., 's-Hertogenbosch, the Netherlands | | 100 | | 13 | Business Objects Option, LLC, Wilmington, DE, United States | | 100 | | | Business Objects Software Limited (Trading as SAP Solutions), Dublin, Ireland | | 100 | | | Callidus Software Inc., San Ramon, CA, United States | | 100 | | | Callidus Software Pty. Ltd., Sydney, Australia | | 100 | | | CallidusCloud (India) Private Limited, Hyderabad, India | | 100 | | | Christie Partners Holding C.V., 's-Hertogenbosch, the Netherlands | | 100 | | | Clarabridge Netherlands B.V., Amsterdam, the Netherlands | | 100 | | | Clarabridge UK Ltd, London, United Kingdom | | 100 | | | Clarabridge, Inc., Reston, VA, United States | | 100 | | | ClearTrip Inc. (Mauritius), Ebene, Mauritius | | 100 | | | ClearTrip Inc., George Town, Cayman Islands | | 57 | | |
| | | | | Name and Location of Company
|
| Ownership
|
| Footnote
|
|
| %
|
|
| Clicktools Limited, Feltham, United Kingdom
|
| 100
|
| 10
| CNQR Operations Mexico S. de. R.L. de. C.V., Mexico City, Mexico
| | 100
|
|
| Concur (Canada), Inc., Toronto, Canada
| | 100
|
|
| Concur (Czech) s.r.o., Prague, Czech Republic
|
| 100
|
|
| Concur (France) S.A.S., Levallois-Perret, France
| | 100
|
|
| Concur (Germany) GmbH, Frankfurt am Main, Germany
| | 100
|
| 8,9
| Concur (Japan) Ltd., Tokyo, Japan
| | 97
|
|
| Concur (New Zealand) Limited, Wellington, New Zealand
| | 100
|
| 14
| Concur (Philippines) Inc., Makati City, Philippines
| | 100
|
|
| Concur (Switzerland) GmbH, Zurich, Switzerland
| | 100
|
| 13
| Concur Holdings (France) S.A.S., Levallois-Perret, France
| | 100
|
|
| Concur Holdings (Netherlands) B.V., 's-Hertogenbosch, the Netherlands
| | 100
|
| 11
| Concur Technologies (Australia) Pty. Limited, Sydney, Australia
| | 100
|
|
| Concur Technologies (Hong Kong) Limited, Hong Kong, China
| | 100
|
|
| Concur Technologies (India) Private Limited, Bangalore, India
| | 100
|
|
| Concur Technologies (Singapore) Pte. Ltd., Singapore, Singapore
| | 100
|
| 16
| Concur Technologies (UK) Limited, Feltham, United Kingdom
| | 100
|
|
| ConTgo Consulting Limited, Feltham, United Kingdom
| | 100
|
|
| ConTgo Limited, Feltham, United Kingdom
| | 100
|
| 10
| Crystal Decisions (UK) Limited, Feltham, United Kingdom
| | 100
|
| 10
| Datahug Limited, Dublin, Ireland
|
| 100
|
| 12
| Delighted, LLC, Wilmington, DE, United States
|
| 100
|
|
| Emarsys Beijing Limited, Beijing, China
|
| 100
|
|
| Emarsys eMarketing Systems GmbH, Vienna, Austria
|
| 100
|
|
| Emarsys İletişim Sistemleri Tic. Ltd Şti., Istanbul, Turkey
|
| 100
|
|
| Emarsys Interactive Services GmbH, Berlin, Germany
|
| 100
|
|
| Emarsys Limited, Hong Kong, China
|
| 100
|
|
| Emarsys North America, Inc., Indianapolis, IN, United States
|
| 100
|
|
| Emarsys Pte. Ltd., Singapore, Singapore
|
| 100
|
|
| Emarsys Pty Ltd, Sydney, Australia
|
| 100
|
|
| Emarsys S.A.S., Levallois-Perret, France
|
| 100
|
|
| Emarsys Schweiz GmbH, Zurich, Switzerland
|
| 100
|
|
| Emarsys UK Ltd, London, United Kingdom
|
| 100
|
|
| EMARSYS-Technologies Informatikai Szolgáltató Kft., Budapest, Hungary
|
| 100
|
|
| Engagor N.V., Ghent, Belgium
|
| 100
|
| 4
| Engagor, Inc., Wilmington, DE, United States
|
| 100
|
| 4
| ESS Cubed Procurement Proprietary Limited, Johannesburg, South Africa
| | 100
|
|
| Extended Systems, Inc., San Ramon, CA, United States
| | 100
|
|
|
| | | | | Name and Location of Company | | Ownership | | Footnote | | | % | | | CNQR Operations Mexico S. de. R.L. de. C.V., Mexico City, Mexico | | 100 | | | Concur (Canada), Inc., Toronto, Canada | | 100 | | | Concur (Czech) s.r.o., Prague, Czech Republic | | 100 | | | Concur (France) S.A.S., Levallois-Perret, France | | 100 | | | Concur (Germany) GmbH, Frankfurt am Main, Germany | | 100 | | 10, 11 | Concur (Japan) Ltd., Tokyo, Japan | | 97 | | | Concur (New Zealand) Limited, Wellington, New Zealand | | 100 | | 16 | Concur (Philippines) Inc., Makati City, Philippines | | 100 | | | Concur (Switzerland) GmbH, Zurich, Switzerland | | 100 | | 15 | Concur Holdings (France) S.A.S., Levallois-Perret, France | | 100 | | | Concur Holdings (Netherlands) B.V., 's-Hertogenbosch, the Netherlands | | 100 | | 13 | Concur Technologies (Australia) Pty. Limited, Sydney, Australia | | 100 | | | Concur Technologies (Hong Kong) Limited, Hong Kong, China | | 100 | | | Concur Technologies (India) Private Limited, Bengaluru, India | | 100 | | | Concur Technologies (Singapore) Pte. Ltd., Singapore, Singapore | | 100 | | 18 | Concur Technologies (UK) Limited, Feltham, United Kingdom | | 100 | | | ConTgo Consulting Limited, Feltham, United Kingdom | | 100 | | 18 | ConTgo Limited, Feltham, United Kingdom | | 100 | | 12 | Crystal Decisions (UK) Limited, Feltham, United Kingdom | | 100 | | 12 | Delighted, LLC, Wilmington, DE, United States | | 100 | | | Delos Cloud GmbH, Schönefeld, Germany | | 100 | | 5 | Emarsys Beijing Limited, Beijing, China | | 100 | | | Emarsys eMarketing Systems GmbH, Vienna, Austria | | 100 | | | Emarsys İletişim Sistemleri Tic. Ltd Şti., Istanbul, Turkey | | 100 | | | Emarsys Interactive Services GmbH, Berlin, Germany | | 100 | | | Emarsys Limited, Hong Kong, China | | 100 | | | Emarsys North America, Inc., Indianapolis, IN, United States | | 100 | | | Emarsys Pte. Ltd., Singapore, Singapore | | 100 | | | Emarsys Pty Ltd, Sydney, Australia | | 100 | | | Emarsys S.A.S., Levallois-Perret, France | | 100 | | | Emarsys Schweiz GmbH, Zurich, Switzerland | | 100 | | | Emarsys UK Ltd, London, United Kingdom | | 100 | | | EMARSYS-Technologies Informatikai Szolgáltató Kft., Budapest, Hungary | | 100 | | | Engagor N.V., Ghent, Belgium | | 100 | | | Engagor, Inc., Wilmington, DE, United States | | 100 | | | ESS Cubed Procurement Proprietary Limited, Johannesburg, South Africa | | 100 | | | Extended Systems, Inc., San Ramon, CA, United States | | 100 | | |
| | | | | Name and Location of Company
|
| Ownership
|
| Footnote
|
|
| %
|
|
| Financial Fusion, Inc., San Ramon, CA, United States
| | 100
|
| | FreeMarkets Ltda., São Paulo, Brazil
| | 100
|
| | Hipmunk, Inc., San Francisco, CA, United States
| | 100
|
|
| hybris (U.S.) Corporation, Wilmington, DE, United States
| | 100
|
| | hybris GmbH, Munich, Germany
| | 100
|
| 8,9
| Inxight Federal Systems Group, Inc., Wilmington, DE, United States
| | 100
|
| | IP Asset Holdings, LLC, Provo, UT, United States
|
| 100
|
|
| LeadFormix, Inc., Dublin, CA, United States
|
| 100
|
|
| Learning Heroes Ltd., Feltham, United Kingdom
|
| 100
|
| 10
| Learning Seat Borrowings Pty. Ltd., Sydney, Australia
|
| 100
|
|
| Learning Seat Group Pty. Ltd., Sydney, Australia
|
| 100
|
|
| Learning Seat Holdings Pty. Ltd., Sydney, Australia
|
| 100
|
|
| Learning Seat Pty. Ltd., Sydney, Australia
|
| 100
|
|
| LLC "Emarsys", Moscow, Russia
|
| 100
|
|
| LLC “SAP Labs“, Moscow, Russia
| | 100
|
| | LLC “SAP Ukraine”, Kiev, Ukraine
| | 100
|
| 16
| Loyalsys GmbH, Vienna, Austria
|
| 100
|
|
| Loyalsys Technologies Israel Ltd., Tel Aviv, Israel
| | 100
|
|
| Market Metrix Iberia S.L., Barcelona, Spain
|
| 100
|
| 4
| Market Metrix Singapore Pte. Ltd., Singapore, Singapore
|
| 100
|
| 4
| Market Metrix, A Clarabridge Company, LLC, Wilmington, DE, United States
|
| 100
|
| 4
| New Debden Merger Sub II LLC, Wilmington, DE, United States
|
| 100
|
|
| Nihon Ariba K.K., Tokyo, Japan
| | 100
|
| | OrientDB Limited, Feltham, United Kingdom
|
| 100
|
| 10
| Outerjoin, Inc., San Ramon, CA, United States
|
| 100
|
|
| OutlookSoft Deutschland GmbH, Walldorf, Germany
| | 100
|
| 8,9
| Plat.One Inc., Newtown Square, PA, United States
| | 100
|
|
| Plat.One Lab S.r.l., Genoa, Italy
| | 100
|
|
| PT SAP Indonesia, Jakarta, Indonesia
| | 99
|
| | Q (AGF2) Inc., Wilmington, DE, United States
|
| 100
|
|
| QAL Technologies Pty Ltd, Sydney, Australia
|
| 100
|
|
| QCL Techonologies Ltd., Toronto, Canada
|
| 100
|
|
| QDL Technologies GmbH, Munich, Germany
|
| 100
|
|
| QFL Technologies S.A.R.L., Paris, France
|
| 100
|
|
| QIL Technologies Limited, Dublin, Ireland
|
| 100
|
|
| QPL Technologies sp. z o.o., Kraków, Poland
|
| 100
|
|
| QSL Technologies Pte. Ltd., Singapore, Singapore
|
| 100
|
|
| Quadrem Africa Pty. Ltd., Johannesburg, South Africa
| | 100
|
| | Quadrem Brazil Ltda., Rio de Janeiro, Brazil
| | 100
|
| | Quadrem Chile Ltda., Santiago de Chile, Chile
| | 100
|
| | Quadrem International Ltd., Hamilton, Bermuda
| | 100
|
| |
| | | | | Name and Location of Company | | Ownership | | Footnote | | | % | | | Financial Fusion, Inc., San Ramon, CA, United States | | 100 | | | Flyin Travel and Tourism Private Limited, Hyderabad, India | | 100 | | | FreeMarkets Ltda., São Paulo, Brazil | | 100 | | | Hipmunk, Inc., San Francisco, CA, United States | | 100 | | | hybris (U.S.) Corporation, Wilmington, DE, United States | | 100 | | | hybris GmbH, Munich, Germany | | 100 | | 10, 11 | INNAAS s.r.l., Rome, Italy | | 100 | | 5 | Inxight Federal Systems Group, Inc., Wilmington, DE, United States | | 100 | | | IP Asset Holdings, LLC, Provo, UT, United States | | 100 | | | LeadFormix, Inc., San Ramon, CA, United States | | 100 | | | LLC "Emarsys", Moscow, Russia | | 100 | | | LLC “SAP Labs“, Moscow, Russia | | 100 | | | LLC “SAP Ukraine”, Kyiv, Ukraine | | 100 | | 18 | Loyalsys GmbH, Vienna, Austria | | 100 | | | Loyalsys Technologies Israel Ltd., Tel Aviv, Israel | | 100 | | | Market Metrix Iberia S.L., Barcelona, Spain | | 100 | | | Market Metrix Singapore Pte. Ltd., Singapore, Singapore | | 100 | | | Market Metrix, A Clarabridge Company, LLC, Wilmington, DE, United States | | 100 | | | New Debden Merger Sub II LLC, Wilmington, DE, United States | | 100 | | | Nihon Ariba K.K., Tokyo, Japan | | 100 | | | Outerjoin, Inc., San Ramon, CA, United States | | 100 | | | OutlookSoft Deutschland GmbH, Walldorf, Germany | | 100 | | 10, 11 | Plat.One Lab S.r.l., Genoa, Italy | | 100 | | | PT SAP Indonesia, Jakarta, Indonesia | | 99 | | | QAL Technologies Pty Ltd, Sydney, Australia | | 100 | | | QCL Technologies Holdings, LLC, Wilmington, DE, United States | | 100 | | 5 | QCL Technologies ULC, Toronto, Canada | | 100 | | | QDL Technologies GmbH, Munich, Germany | | 100 | | | QFL Technologies S.A.R.L., Paris, France | | 100 | | | QIL Technologies Limited, Dublin, Ireland | | 100 | | | QPL Technologies sp. z o.o., Kraków, Poland | | 100 | | | QSL Technologies Pte. Ltd., Singapore, Singapore | | 100 | | | Quadrem Africa Pty. Ltd., Johannesburg, South Africa | | 100 | | | Quadrem Brazil Ltda., Rio de Janeiro, Brazil | | 100 | | | Quadrem Chile Ltda., Santiago de Chile, Chile | | 100 | | | Quadrem International Ltd., Hamilton, Bermuda | | 100 | | |
| | | | | Name and Location of Company
|
| Ownership
|
| Footnote
|
|
| %
|
|
| Quadrem Netherlands B.V., 's-Hertogenbosch, the Netherlands
|
| 100
|
| 11
| Quadrem Overseas Cooperatief U.A., 's-Hertogenbosch, the Netherlands
|
| 100
|
|
| Quadrem Peru S.A.C., Lima, Peru
|
| 100
|
|
| Qualtrics Holdings Inc., Wilmington, DE, United States
|
| 100
|
|
| Qualtrics Hong Kong Limited, Hong Kong, China
|
| 100
|
| 4
| Qualtrics India Private Limited, Mumbai, India
|
| 100
|
| 4
| Qualtrics International Inc., Wilmington, DE, United States
|
| 74
|
|
| Qualtrics Ireland Limited, Dublin, Ireland
|
| 100
|
| 4
| Qualtrics Japan LLC, Tokyo, Japan
|
| 100
|
|
| Qualtrics Korea, LLC, Seoul, South Korea
|
| 100
|
| 4
| Qualtrics Mexico, S. DE R.L. DE C.V., Mexico City, Mexico
|
| 100
|
| 4
| Qualtrics Netherlands B.V., Amsterdam, the Netherlands
| | 100
|
| 4
| Qualtrics Provo HQ, LLC, Wilmington, DE, United States
|
| 100
|
| 4
| Qualtrics Sweden AB, Stockholm, Sweden
|
| 100
|
|
| Qualtrics Switzerland AG, Zurich, Switzerland
|
| 100
|
| 4
| Qualtrics Technologies Brasil Ltda., São Paulo, Brazil
|
| 100
|
| 4
| Qualtrics Technologies Spain, S.L.U., Madrid, Spain
| | 100
|
|
| QUL Technologies Limited, London, United Kingdom
|
| 100
|
|
| SAP (Beijing) Software System Co., Ltd., Beijing, China
| | 100
|
|
| SAP (China) Holding Co., Ltd., Beijing, China
|
| 100
|
|
| SAP Andina y del Caribe C.A., Caracas, Venezuela
| | 100
|
| 16
| SAP AZ LLC, Baku, Azerbaijan
| | 100
|
|
| SAP Belgium – Systems, Applications and Products S.A., Brussels, Belgium
| | 100
|
| | SAP Beteiligungs GmbH, Walldorf, Germany
| | 100
|
| | SAP Bulgaria EOOD, Sofia, Bulgaria
| | 100
|
| | SAP Business Services Center Nederland B.V., ‘s-Hertogenbosch, the Netherlands
| | 100
|
| 11
| SAP Chile Limitada, Santiago de Chile, Chile
| | 100
|
|
| SAP CIS, LLC, Moscow, Russia
| | 100
|
| | SAP Colombia S.A.S., Bogotá, Colombia
| | 100
|
| 16
| SAP Costa Rica, S.A., San José, Costa Rica
| | 100
|
| 16
| SAP ČR, spol. s r.o., Prague, Czech Republic
| | 100
|
| | SAP Cyprus Limited, Nicosia, Cyprus
| | 100
|
| | SAP d.o.o., Zagreb, Croatia
| | 100
|
| 16
| SAP Danmark A/S, Copenhagen, Denmark
| | 100
|
| | SAP Dritte Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany
| | 100
|
| | SAP East Africa Limited, Nairobi, Kenya
| | 100
|
| 16
| SAP Egypt LLC, Cairo, Egypt
| | 100
|
| 16
| SAP EMEA Inside Sales S.L., Madrid, Spain
| | 100
|
| |
| | | | | Name and Location of Company | | Ownership | | Footnote | | | % | | | Quadrem Netherlands B.V., 's-Hertogenbosch, the Netherlands | | 100 | | 13 | Quadrem Overseas Cooperatief U.A., 's-Hertogenbosch, the Netherlands | | 100 | | | Quadrem Peru S.A.C., Lima, Peru | | 100 | | | Qualtrics Colombia S.A.S., Bogotá, D.C., Colombia | | 100 | | 5 | Qualtrics de Argentina S.R.L., Buenos Aires, Argentina | | 100 | | 5 | Qualtrics Holdings I, LLC, Wilmington, DE, United States | | 100 | | 5 | Qualtrics Holdings II, LLC, Wilmington, DE, United States | | 100 | | 5 | Qualtrics Holdings Inc., Wilmington, DE, United States | | 100 | | | Qualtrics Hong Kong Limited, Hong Kong, China | | 100 | | | Qualtrics India Private Limited, Mumbai, India | | 100 | | | Qualtrics International Inc., Wilmington, DE, United States | | 71 | | 19 | Qualtrics Ireland Limited, Dublin, Ireland | | 100 | | | Qualtrics Japan LLC, Tokyo, Japan | | 100 | | | Qualtrics Korea, LLC, Seoul, South Korea | | 100 | | | Qualtrics Mexico, S. DE R.L. DE C.V., Mexico City, Mexico | | 100 | | | Qualtrics Middle East FZ-LLC, Dubai, United Arab Emirates | | 100 | | 5 | Qualtrics Netherlands B.V., Amsterdam, the Netherlands | | 100 | | | Qualtrics Provo HQ, LLC, Wilmington, DE, United States | | 100 | | | Qualtrics Sweden AB, Stockholm, Sweden | | 100 | | | Qualtrics Switzerland AG, Zurich, Switzerland | | 100 | | | Qualtrics Technologies Brasil Ltda., São Paulo, Brazil | | 100 | | | Qualtrics Technologies Spain, S.L.U., Madrid, Spain | | 100 | | | QUL Technologies Limited, London, United Kingdom | | 100 | | | SAP (Beijing) Software System Co., Ltd., Beijing, China | | 100 | | | SAP (China) Holding Co., Ltd., Beijing, China | | 100 | | | SAP Andina y del Caribe C.A., Caracas, Venezuela | | 100 | | 18 | SAP AZ LLC, Baku, Azerbaijan | | 100 | | | SAP Belgium – Systems, Applications and Products S.A., Brussels, Belgium | | 100 | | | SAP Beteiligungs GmbH, Walldorf, Germany | | 100 | | | SAP Bulgaria EOOD, Sofia, Bulgaria | | 100 | | | SAP Business Services Center Nederland B.V., ‘s-Hertogenbosch, the Netherlands | | 100 | | 13 | SAP Chile Limitada, Santiago de Chile, Chile | | 100 | | 18 | SAP CIS, LLC, Moscow, Russia | | 100 | | | SAP Colombia S.A.S., Bogotá, D.C., Colombia | | 100 | | 18 | SAP Costa Rica, S.A., San José, Costa Rica | | 100 | | 18 | SAP ČR, spol. s r.o., Prague, Czech Republic | | 100 | | | SAP Cyprus Limited, Nicosia, Cyprus | | 100 | | | SAP d.o.o., Zagreb, Croatia | | 100 | | 18 | SAP Danmark A/S, Copenhagen, Denmark | | 100 | | | SAP Dritte Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany | | 100 | | | SAP East Africa Limited, Nairobi, Kenya | | 100 | | 18 | SAP Egypt LLC, Cairo, Egypt | | 100 | | 18 | SAP EMEA Inside Sales S.L., Madrid, Spain | | 100 | | |
| | | | | Name and Location of Company
|
| Ownership
|
| Footnote
|
|
| %
|
|
| SAP Erste Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany
| | 100
|
| 8,9
| SAP Estonia OÜ, Tallinn, Estonia
| | 100
|
| | SAP Financial, Inc., Toronto, Canada
| | 100
|
| | SAP Finland Oy, Espoo, Finland
| | 100
|
| | SAP Foreign Holdings GmbH, Walldorf, Germany
| | 100
|
| | SAP France Holding S.A., Levallois-Perret, France
| | 100
|
| | SAP Global Marketing, Inc., New York, NY, United States
| | 100
|
| | SAP Hellas Single Member S.A., Athens, Greece
| | 100
|
| | SAP Hong Kong Co., Ltd., Hong Kong, China
| | 100
|
| 16
| SAP Hosting Beteiligungs GmbH, St. Leon-Rot, Germany
| | 100
|
| 8,9
| SAP India (Holding) Pte. Ltd., Singapore, Singapore
| | 100
|
| | SAP International Panama, S.A., Panama City, Panama
| | 100
|
| | SAP International, Inc., Miami, FL, United States
| | 100
|
| | SAP Investments, Inc., Wilmington, DE, United States
| | 100
|
| | SAP Ireland Limited, Dublin, Ireland
| | 100
|
| 12
| SAP Ireland US - Financial Services Designated Activity Company, Dublin, Ireland
| | 100
|
| | SAP Israel Ltd., Ra’anana, Israel
| | 100
|
| 16
| SAP Korea Ltd., Seoul, South Korea
| | 100
|
| | SAP Labs France S.A.S., Mougins, France
| | 100
|
| | SAP Labs Israel Ltd., Ra’anana, Israel
| | 100
|
| | SAP Labs Korea, Inc., Seoul, South Korea
| | 100
|
| | SAP Latvia SIA, Riga, Latvia
| | 100
|
| | SAP Malaysia Sdn. Bhd., Kuala Lumpur, Malaysia
| | 100
|
| |
| | | | | Name and Location of Company | | Ownership | | Footnote | | | % | | | SAP Erste Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany | | 100 | | 10, 11 | SAP Estonia OÜ, Tallinn, Estonia | | 100 | | | SAP Financial, Inc., Toronto, Canada | | 100 | | | SAP Finland Oy, Espoo, Finland | | 100 | | | SAP Foreign Holdings GmbH, Walldorf, Germany | | 100 | | | SAP France Holding S.A., Levallois-Perret, France | | 100 | | | SAP Global Marketing, Inc., New York, NY, United States | | 100 | | | SAP Hellas Single Member S.A., Athens, Greece | | 100 | | | SAP Hong Kong Co., Ltd., Hong Kong, China | | 100 | | 18 | SAP Hosting Beteiligungs GmbH, St. Leon-Rot, Germany | | 100 | | 10, 11 | SAP India (Holding) Pte. Ltd., Singapore, Singapore | | 100 | | | SAP International Panama, S.A., Panama City, Panama | | 100 | | | SAP International, Inc., Miami, FL, United States | | 100 | | | SAP Investments, Inc., Wilmington, DE, United States | | 100 | | | SAP Ireland Limited, Dublin, Ireland | | 100 | | 14 | SAP Ireland US - Financial Services Designated Activity Company, Dublin, Ireland | | 100 | | | SAP Israel Ltd., Ra’anana, Israel | | 100 | | 18 | SAP Korea Ltd., Seoul, South Korea | | 100 | | | SAP Labs France S.A.S., Mougins, France | | 100 | | | SAP Labs Israel Ltd., Ra’anana, Israel | | 100 | | | SAP Labs Korea, Inc., Seoul, South Korea | | 100 | | | SAP Latvia SIA, Riga, Latvia | | 100 | | | SAP Malaysia Sdn. Bhd., Kuala Lumpur, Malaysia | | 100 | | |
| | | | | Name and Location of Company
|
| Ownership
|
| Footnote
|
|
| %
|
|
| SAP MENA FZ L.L.C., Dubai, United Arab Emirates
| | 100
|
| 16
| SAP Middle East and North Africa L.L.C., Dubai, United Arab Emirates
| | 49
|
| 5,16
| SAP Nederland Holding B.V.,‘s-Hertogenbosch, the Netherlands
| | 100
|
| 11
| SAP New Zealand Limited, Auckland, New Zealand
| | 100
|
| | SAP Norge AS, Oslo, Norway
| | 100
|
| | SAP North West Africa Ltd, Casablanca, Morocco
| | 100
|
| 16
| SAP Österreich GmbH, Vienna, Austria
| | 100
|
| | SAP Perú S.A.C., Lima, Peru
| | 100
|
| 16
| SAP Philippines, Inc., Taguig City, Philippines
| | 100
|
| 16
| SAP Polska Sp. z o.o., Warsaw, Poland
| | 100
|
| | SAP Portals Europe GmbH, Walldorf, Germany
| | 100
|
| | SAP Portals Holding Beteiligungs GmbH, Walldorf, Germany
| | 100
|
| | SAP Portals Israel Ltd., Ra’anana, Israel
| | 100
|
| | SAP Portugal – Sistemas, Aplicações e Produtos Informáticos, Sociedade Unipessoal, Lda., Porto Salvo, Portugal
| | 100
|
| | SAP Projektverwaltungs- und Beteiligungs GmbH, Walldorf, Germany
| | 100
|
|
| SAP Public Services, Inc., Washington, DC, United States
| | 100
|
| | SAP Puerto Rico GmbH, Walldorf, Germany
| | 100
|
| 8,9,16
| SAP Retail Solutions Beteiligungsgesellschaft GmbH, Walldorf, Germany
| | 100
|
| | SAP Romania SRL, Bucharest, Romania
| | 100
|
| | SAP Saudi Arabia Software Services Ltd, Riyadh, Kingdom of Saudi Arabia
| | 100
|
| | SAP Saudi Arabia Software Trading Ltd, Riyadh, Kingdom of Saudi Arabia
| | 75
|
| 16
|
| | | | | Name and Location of Company | | Ownership | | Footnote | | | % | | | SAP Middle East and North Africa L.L.C., Dubai, United Arab Emirates | | 49 | | 6, 18 | SAP Middle East FZ-LLC, Dubai, United Arab Emirates | | 100 | | 18 | SAP Nederland Holding B.V.,‘s-Hertogenbosch, the Netherlands | | 100 | | 13 | SAP New Zealand Limited, Auckland, New Zealand | | 100 | | | SAP Norge AS, Oslo, Norway | | 100 | | | SAP North West Africa Ltd, Casablanca, Morocco | | 100 | | | SAP Österreich GmbH, Vienna, Austria | | 100 | | | SAP Perú S.A.C., Lima, Peru | | 100 | | 18 | SAP Philippines, Inc., Taguig City, Philippines | | 100 | | 18 | SAP Polska Sp. z o.o., Warsaw, Poland | | 100 | | | SAP Portals Europe GmbH, Walldorf, Germany | | 100 | | | SAP Portals Holding Beteiligungs GmbH, Walldorf, Germany | | 100 | | | SAP Portals Israel Ltd., Ra’anana, Israel | | 100 | | | SAP Portugal – Sistemas, Aplicações e Produtos Informáticos, Sociedade Unipessoal, Lda., Porto Salvo, Portugal | | 100 | | | SAP Projektverwaltungs- und Beteiligungs GmbH, Walldorf, Germany | | 100 | | | SAP Public Services, Inc., Washington, DC, United States | | 100 | | | SAP Puerto Rico GmbH, Walldorf, Germany | | 100 | | 10, 11, 18 | SAP Retail Solutions Beteiligungsgesellschaft GmbH, Walldorf, Germany | | 100 | | | SAP Romania SRL, Bucharest, Romania | | 100 | | | SAP Saudi Arabia Software Services Ltd, Riyadh, Kingdom of Saudi Arabia | | 100 | | | SAP Saudi Arabia Software Trading Ltd, Riyadh, Kingdom of Saudi Arabia | | 75 | | 18 |
| | | | | Name and Location of Company
|
| Ownership
|
| Footnote
|
|
| %
|
|
| SAP Sechste Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany
|
| 100
|
| 8,9
| SAP Siebte Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany
| | 100
|
| 8,9
| SAP sistemi, aplikacije in produkti za obdelavo podatkov d.o.o., Ljubljana, Slovenia
| | 100
|
| | SAP Slovensko s.r.o., Bratislava, Slovakia
| | 100
|
| | SAP Software and Services LLC, Doha, Qatar
| | 49
|
| 5,16
| SAP Svenska Aktiebolag, Stockholm, Sweden
| | 100
|
|
| SAP System Application and Products Asia Myanmar Limited, Yangon, Myanmar
|
| 100
|
|
| SAP Systems, Applications and Products in Data Processing (Thailand) Ltd., Bangkok, Thailand
| | 100
|
| | SAP Taiwan Co., Ltd., Taipei, Taiwan
| | 100
|
|
| SAP Technologies Inc., Palo Alto, CA, United States
| | 100
|
| | SAP Training and Development Institute FZCO, Dubai, United Arab Emirates
| | 100
|
|
| SAP Türkiye Yazilim Üretim ve Ticaret A.Ş., Istanbul, Turkey
| | 100
|
| | SAP UAB, Vilnius, Lithuania
| | 100
|
| | SAP Ventures Investment GmbH, Walldorf, Germany
| | 100
|
| 8,9
| SAP Vierte Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany
| | 100
|
| | SAP Vietnam Company Limited, Ho Chi Minh City, Vietnam
|
| 100
|
|
| SAP West Balkans d.o.o., Belgrade, Serbia
| | 100
|
| | SAP Zweite Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany
| | 100
|
| 8,9
| SAP.io Fund, L.P., Austin, TX, United States
|
| 0
|
| 6
| Sapphire Fund Investments II Holdings, LLC, Austin, TX, United States
|
| 100
|
| 6
| Sapphire Fund Investments II, L.P., Austin, TX, United States
|
| 0
|
| 6
| Sapphire Fund Investments III, L.P., Austin, TX, United States
|
| 0
|
| 6
| Sapphire SAP HANA Fund of Funds, L.P., Austin, TX, United States
| | 0
|
| 6
| Sapphire Ventures Fund I, L.P., Austin, TX, United States
| | 0
|
| 6
| Sapphire Ventures Fund II, L.P., Austin, TX, United States
| | 0
|
| 6
| Sapphire Ventures Fund III, L.P., Austin, TX, United States
|
| 0
|
| 6
| Sapphire Ventures Fund IV, L.P., Austin, TX, United States
|
| 0
|
| 6
| Sapphire Ventures Fund V L.P., Austin, TX, United States
|
| 0
|
| 6
| Sapphire Ventures Fund VI, L.P., Austin, TX, United States
|
| 0
|
| 4,6
| SAPV (Mauritius), Ebene, Mauritius
| | 100
|
| 6
| Signavio ANZ Pty Ltd, Melbourne, Australia
|
| 100
|
| 4
| Signavio Benelux B.V., Amsterdam, the Netherlands
|
| 100
|
| 4
| Signavio France S.A.S., Paris, France
|
| 100
|
| 4
| Signavio GmbH, Berlin, Germany
|
| 100
|
| 4, 17
| Signavio India Private Limited, Gurugram, India
|
| 100
|
| 4
| Signavio Italia S.r.l., Milan, Italy
|
| 100
|
| 4
| Signavio Japan KK, Tokyo, Japan
|
| 100
|
| 4
| Signavio Pte. Ltd., Singapore, Singapore
|
| 100
|
| 4
| Signavio Schweiz GmbH, Zug, Switzerland
|
| 100
|
| 4
| Signavio Sweden AB, Stockholm, Sweden
|
| 100
|
| 4
| Signavio UK Ltd, Birmingham, United Kingdom
|
| 100
|
| 4
| Signavio, Inc., Burlington, VT, United States
|
| 100
|
| 4
| Statwing, LLC, Wilmington, DE,United States
|
| 100
|
|
| SuccessFactors (Philippines), Inc., Pasig City, Philippines
| | 100
|
| 16
|
| | | | | Name and Location of Company | | Ownership | | Footnote | | | % | | | SAP Sechste Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany | | 100 | | 10, 11 | SAP Siebte Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany | | 100 | | 10, 11 | SAP sistemi, aplikacije in produkti za obdelavo podatkov d.o.o., Ljubljana, Slovenia | | 100 | | | SAP Slovensko s.r.o., Bratislava, Slovakia | | 100 | | | SAP Software and Services LLC, Doha, Qatar | | 49 | | 6, 18 | SAP Svenska Aktiebolag, Stockholm, Sweden | | 100 | | | SAP System Application and Products Asia Myanmar Limited, Yangon, Myanmar | | 100 | | | SAP Systems, Applications and Products in Data Processing (Thailand) Ltd., Bangkok, Thailand | | 100 | | | SAP Taiwan Co., Ltd., Taipei, Taiwan | | 100 | | | SAP Technologies Inc., Palo Alto, CA, United States | | 100 | | | SAP Training and Development Institute FZCO, Dubai, United Arab Emirates | | 100 | | 18 | SAP Türkiye Yazilim Üretim ve Ticaret A.Ş., Istanbul, Turkey | | 100 | | | SAP UAB, Vilnius, Lithuania | | 100 | | | SAP Ventures Investment GmbH, Walldorf, Germany | | 100 | | 10, 11 | SAP Vierte Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany | | 100 | | | SAP Vietnam Company Limited, Ho Chi Minh City, Vietnam | | 100 | | | SAP West Balkans d.o.o., Belgrade, Serbia | | 100 | | | SAP Zweite Beteiligungs- und Vermögensverwaltungs GmbH, Walldorf, Germany | | 100 | | 10, 11 | SAP.io Fund, L.P., Austin, TX, United States | | 0 | | 7 | Sapphire Fund Investments II Holdings, LLC, Austin, TX, United States | | 100 | | 7 | Sapphire Fund Investments II, L.P., Austin, TX, United States | | 0 | | 7 | Sapphire Fund Investments III Holdings, LLC, Austin, TX, United States | | 100 | | 5, 7 | Sapphire Fund Investments III, L.P., Austin, TX, United States | | 0 | | 7 | Sapphire SAP HANA Fund of Funds, L.P., Austin, TX, United States | | 0 | | 7 | Sapphire Ventures Fund I, L.P., Austin, TX, United States | | 0 | | 7 | Sapphire Ventures Fund II, L.P., Austin, TX, United States | | 0 | | 7 | Sapphire Ventures Fund III, L.P., Austin, TX, United States | | 0 | | 7 | Sapphire Ventures Fund IV, L.P., Austin, TX, United States | | 0 | | 7 | Sapphire Ventures Fund V, L.P., Austin, TX, United States | | 0 | | 7 | Sapphire Ventures Fund VI, L.P., Austin, TX, United States | | 0 | | 7 | Sapphire Ventures Fund VII-A, L.P., Austin, TX, United States | | 0 | | 5, 7 | SAPV (Mauritius), Ebene, Mauritius | | 100 | | 7 | Shanghai SAP Cloud Technology Company, Ltd., Shanghai, China | | 70 | | 5 | Signavio ANZ Pty Ltd, Melbourne, Australia | | 100 | | | Signavio Pte. Ltd., Singapore, Singapore | | 100 | | | Signavio UK Ltd, Birmingham, United Kingdom | | 100 | | 12 | Signavio, Inc., Newtown Square, PA, United States | | 100 | | | Statwing, LLC, Wilmington, DE,United States | | 100 | | | SuccessFactors (Philippines), Inc., Pasig City, Philippines | | 100 | | 18 |
| | | | | Name and Location of Company
|
| Ownership
|
| Footnote
|
|
| %
|
|
| SuccessFactors Cayman, Ltd., Grand Cayman, Cayman Islands
| | 100
|
| | SuccessFactors, Inc., Newtown Square, PA, United States
|
| 100
|
|
| SurveyVitals A Qualtrics Company, LLC, Wilmington, DE, United States
|
| 100
|
| 4
| Sybase Angola, LDA, Luanda, Angola
| | 100
|
| 15
| Sybase Iberia, S.L., Madrid, Spain
| | 100
|
| | Sybase International Holdings Corporation, LLC, San Ramon, CA, United States
| | 100
|
| | Sybase, Inc., San Ramon, CA, United States
| | 100
|
| | Systems Applications Products (Africa Region) Proprietary Limited, Johannesburg, South Africa
| | 100
|
| | Systems Applications Products (Africa) Proprietary Limited, Johannesburg, South Africa
| | 100
|
| | Systems Applications Products (South Africa) Proprietary Limited, Johannesburg, South Africa
| | 70
|
| 16
| Systems Applications Products Nigeria Limited, Victoria Island, Nigeria
| | 100
|
| 16
| Technology Management Associates Inc., Chantilly, VA, United States
|
| 100
|
|
| Temkin Group, LLC, Wilmington, DE, United States
|
| 100
|
|
| TM Property Holdings, LLC, Wilmington, DE, United States
|
| 100
|
|
| TomorrowNow, Inc., Bryan, TX, United States
| | 100
|
| | TRX Europe Limited, Feltham, United Kingdom
| | 100
|
|
| TRX Technologies India Private Limited, Bangalore, India
| | 100
| | | TRX UK Limited, Feltham, United Kingdom
| | 100
| | 10
| TRX, Inc., Bellevue, WA, United States
| | 100
| | | Usermind d.o.o Beograd, Belgrade, Serbia
|
| 100
|
| 4
| Usermind International, Inc., Seattle, WA, United States
|
| 100
|
| 4
| Usermind International, LTD, Bristol, United Kingdom
|
| 100
|
| 4
| Usermind, Inc., Seattle, WA, United States
|
| 100
|
| 4
| Volume Integration, Inc., Reston, VA, United States
|
| 100
|
|
|
| | | | | Name and Location of Company | | Ownership | | Footnote | | | % | | | SuccessFactors Cayman, Ltd., Grand Cayman, Cayman Islands | | 100 | | | SurveyVitals A Qualtrics Company, LLC, Wilmington, DE, United States | | 100 | | | Sybase Angola, LDA, Luanda, Angola | | 100 | | 17 | Sybase Iberia, S.L., Madrid, Spain | | 100 | | | Sybase International Holdings Corporation, LLC, San Ramon, CA, United States | | 100 | | | Sybase, Inc., San Ramon, CA, United States | | 100 | | | Systems Applications Products (Africa Region) Proprietary Limited, Johannesburg, South Africa | | 100 | | | Systems Applications Products (Africa) Proprietary Limited, Johannesburg, South Africa | | 100 | | | Systems Applications Products (South Africa) Proprietary Limited, Johannesburg, South Africa | | 81 | | 18 | Systems Applications Products Nigeria Limited, Victoria Island, Nigeria | | 100 | | 18 | Taulia (Shanghai) Smart Technology Co. Ltd., Shanghai, China | | 100 | | 5 | Taulia Australia Pty. Ltd., Sydney, Australia | | 100 | | 5 | Taulia Bulgaria EOOD, Sofia, Bulgaria | | 100 | | 5 | Taulia GmbH, Düsseldorf, Germany | | 100 | | 5 | Taulia LLC, San Francisco, CA, United States | | 96 | | 5 | Taulia Singapore Pte. Ltd., Singapore, Singapore | | 100 | | 5 | Taulia Trade Technology GmbH, Düsseldorf, Germany | | 100 | | 5 | Taulia UK Ltd., London, United Kingdom | | 100 | | 5 | Technology Management Associates Inc., Chantilly, VA, United States | | 100 | | | Temkin Group, LLC, Wilmington, DE, United States | | 100 | | | TM Property Holdings, LLC, Wilmington, DE, United States | | 100 | | | TomorrowNow, Inc., Bryan, TX, United States | | 100 | | | TRX Europe Limited, Feltham, United Kingdom | | 100 | | | TRX Technologies India Private Limited, Bengaluru, India | | 100 | | | TRX UK Limited, Feltham, United Kingdom | | 100 | | 12 | TRX, Inc., Bellevue, WA, United States | | 100 | | | Usermind d.o.o Beograd, Belgrade, Serbia | | 100 | | | Usermind International, LLC, Provo, UT, United States | | 100 | | | Usermind, LLC, Provo, UT, United States | | 100 | | | Volume Integration, Inc., Reston, VA, United States | | 100 | | |
1 For the classification of the subsidiaries, the following figures are considered: revenues, profit/loss after tax, total equity and number of employees. 2 These figures are based on our local IFRS financial statements prior to eliminations resulting from consolidation and therefore do not reflect the contribution of these companies included in the Consolidated Financial Statements. The translation of the equity into Group currency is based on period-end closing exchange rates, and on average exchange rates for revenue and net income/loss. 23 As at December 31, 2021,2022, including managing directors, in FTE.
34 Figures for profit/loss after tax and total equity pursuant to HGB, section 285 and section 313 are not disclosed if they are of minor significance for a fair presentation of the profitability, liquidity, capital resources, and financial position of SAP SE, pursuant to HGB, section 313 (2) sentence 3 no. 4 and section 286 (3) sentence 1 no. 1.
45 Consolidated for the first time in 2021.2022.
56 Agreements with the other shareholders provide that SAP SE fully controls the entity.
67 Structured entity belonging to SAP SE has the following structured entities: SAP.io Fund, L.P., Sapphire Fund Investments II Holdings, LLC, Sapphire Fund Investments II, L.P., Sapphire Fund Investments III, L.P., Sapphire SAP HANA Fund of Funds, L.P., Sapphire Ventures Fund I, L.P., Sapphire Ventures Fund II, L.P., Sapphire Ventures Fund III, L.P., Sapphire Ventures Fund IV, L.P., Sapphire Ventures Fund V, L.P., Sapphire Ventures Fund VI, L.P., SAPV (Mauritius).SE. The results of operations of these entities are included in SAP’s consolidated financial statements in accordance with IFRS 10 (Consolidated Financial Statements).
78 In accordance with IFRS 10, the structured entity does not include the receivables and liabilities resulting from the supply chain financing (SCF) activities.
9 Entity whose personally liable partner is SAP SE. 810 Entity with (profit and) loss transfer agreement.
911 Pursuant to HGB, section 264 (3) or section 264b, the subsidiary is exempt from applying certain legal requirements to their statutory stand-alone financial statements including the requirement to prepare notes to the financial statements and a review of operations, the requirement of independent audit, and the requirement of public disclosure.
1012 Pursuant to section 480 of the UK Companies Act 2006, the entity is exempt from having its financial statements audited on the grounds that the entity is entitled to the benefits from a dormant entity exemption in respect of its financial year ended December 31, 2021.2022.
1113 Pursuant to article 2:403 of the Dutch Civil Code, the entity is exempt from applying certain legal requirements to their statutory stand-alone financial statements including the requirement to prepare the financial statements, the requirement of independent audit, and the requirement of public disclosure, on the basis that SAP SE has provided a guarantee of the entity's liabilities in respect of its financial year ended December 31, 2021,2022, or in respect of its financial year ended September 30, 2021,2022, respectively.
1214 Pursuant to Irish Companies Act 2014, chapter 16 of Part 6, section 365, the entity is exempt from having its financial statements audited on the grounds that the entity is entitled to the benefits from a dormant entity exemption in respect of its financial year ended December 31, 2021.2022.
1315 Pursuant to article 727a, paragraph 2 of the Swiss Code of Obligations, the entity is exempt from having its financial statements audited in respect of its financial year ended December 31, 2021,2022, or in respect of its financial year ended September 30, 2021,2022, respectively.
1416 Pursuant to section 211 (3) of the New Zealand Companies Act 1993 and section 45 (2) of the Financial Reporting Act 2013, the entity had approved exclusions and is not required to lodge audited financial statements in respect of its financial year ended September 30, 2021.2022.
1517 Pursuant to Angola Tax Law and Presidential Decree no. 147/13 of October 1, 2013, the entity does not qualify as being a Large Taxpayer and therefore is exempt from having its financial statements audited in respect of its financial year ended December 31, 2021.2022.
1618 Entity with support letter issued by SAP SE.
1719 Dissolved on January 7, 2022, by merger into SAP SE.Share of voting rights is 96%.
Other Equity Investments | | | Name and Location of Company | | Ownership | | | % | Joint Arrangements and Investments in Associates | | | China DataCom Corporation Limited, Guangzhou, China | | 28 | Procurement Negócios Eletrônicos S/A, Rio de Janeiro, Brazil | | 17 | SAP Fioneer GmbH, Walldorf, Germany | | 20 |
| | Name and Location of Company | | Equity Investments with Ownership of at Least 5% | | 47th Street Partners I, L.P., Menlo Park, CA, United States | | 83North IV, L.P., Hertzalia, Israel | | Adverity GmbH, Vienna, Austria | | Alation, Inc., Redwood City, CA, United States | | Alchemist Accelerator Fund I LLC, San Francisco, CA, United States | | Aleph-Bigg SPV, L.P., Grand Cayman, Cayman Islands | | All Tax Platform - Solucoes Tributarias S.A., São Paulo, Brazil | | Amplify Partners, L.P., Menlo Park, CA, United States | | Amplify Partners II L.P., Menlo Park, CA, United States | | Amplify Partners III, L.P., Menlo Park, CA, United States | | Amplify Partners IV, L.P., Menlo Park, CA, United States | | Amplify Partners Select Fund IV, L.P., Menlo Park, CA, United States | | Amplify Partners, L.P., Menlo Park, CA, United States
|
| BGS Holdings, Inc., Austin, TX, United States | | Bitonic Technology Labs, Inc., Karnataka, India | | Blue Yard Capital 1 Alternative GmbH & Co. KG, Berlin, Germany | |
Blue Yard Capital I GmbH & Co. KG, Berlin, Germany | | Blue Yard Crytpo 1, L.P., Hot Springs Village, AR, United States | | Boldstart Ventures V, L.P., New York, NY, United States | | Boldstart Ventures VI, L.P., New York, NY, United States | | Brightfield Holdings, Inc., New York, NY, United States | | BY Capital 2 GmbH & Co. KG, Berlin, Germany | | Canvas Ventures 3, L.P., Portola Valley, CA, United States | | Catchpoint Systems, Inc., New York, NY, United States | | CDQ AG, St. Gallen, Switzerland | | Chalfen Ventures Fund I L.P., St Heiler, Jersey, Channel Islands | | Chalfen Ventures Fund II L.P., St Helier, Jersey, Channel Islands | | Chalfen Ventures Fund III L.P., St Helier, Jersey, Channel Islands | | CircleCI, Inc., San Francisco, CA, United States | | Clari, Inc., Sunnyvale, CA, United States | | ComponentLab, Inc., Seattle, WA, United States | | Contentful GmbH,Global, Inc., Berlin, Germany | | Costanoa Venture Capital II L.P., Palo Alto, CA, United States | | Costanoa Venture Capital III L.P., Palo Alto, CA, United States | | Costanoa Venture Capital QZ, LLC, Palo Alto, CA, United States | | Creandum SPV TR (D) AB, Stockholm, Sweden | | Culture Amp, Inc., San Francisco, CA, United States | | Cypress.io, Inc., Atlanta, GA, United States | | Data Collective II L.P., Palo Alto, CA, United States | | Data Collective III L.P., Palo Alto, CA, United States | | Data Collective IV, L.P., Palo Alto , CA, United States |
| DataRobot, Inc., Boston, MA, United States
| | Digital Hub Rhein-Neckar GmbH, Ludwigshafen, Germany | | Dremio Corporation, Santa Clara, CA, United States | | FeedZai S.A., Lisbon, Portugal | | Felix Capital Fund III, London, United Kingdom | | Felix Ventures II, L.P., London, United Kingdom | | Finco Services, Inc. (dba Current), New York, NY, United States | | Follow Analytics, Inc., San Francisco, CA, United States | |
GitGuardian SAS, Paris, France | | Greater Pacific Capital (Cayman) L.P.Gorgias, Inc., Grand Cayman, Cayman IslandsSan Francisco, CA, United States
| | Haystack Ventures V, L.P., Mill Valley, CA, United States | | Haystack Ventures VI, L.P., Mill Valley, CA, United States | | IDG Ventures USA III, L.P., San Francisco, CA, United States | | IEX Group, Inc., New York, NY, United States | | InfluxData, Inc., San Francisco, CA, United States | | Initialized CBH SPV LLC, Walnut, CA, United States | | InnovationLab GmbH, Heidelberg, Germany | | innoWerft Technologie- und Gründerzentrum Walldorf Stiftung GmbH, Walldorf, Germany | | Integral Ad Science Holiding Corp., New York, NY, United States
|
| Involve.ai, Inc., Santa Monica, CA, United States |
| JFrog, Ltd., Netanya, Israel
| | JupiterOne, Inc., Morrisville, NC, United States | | Kaltura, Inc., New York, NY, United States | | LeanData, Inc., Sunnyvale, CA, United States | | LGVP F I LLC, Dover, DE, United States | | Local Globe Opportunity Fund, L.P., St. Peter Port, Guernsey, Channel Islands
|
|
Local Globe VII, L.P., St. Peter Port, Guernsey, Channel Islands | | Local Globe VIII, L.P., St. Peter Port, Guernsey, Channel Islands | | Local Globe X, L.P., St. Peter Port, Guernsey, Channel Islands | | Local Globe XI, L.P., St. Peter Port, Guernsey, Channel Islands | | Local Globe XII, L.P., St. Peter Port, Guernsey, Channel Islands | | Local Globe Opportunity Fund, L.P., St. Peter Port, Guernsey, Channel Islands | | Mango Capital 2018, L.P., Los Altos, CA, United States | | Mango Capital 2020, L.P., Los Altos, CA, United States | | Mango Capital 2022, L.P., Los Altos, CA, United States | | Matillion Ltd., Altrincham, United Kingdom | | Medable Inc., Palo Alto, CA, United States | | Mosaic Partners II, L.P., London, United KingdomMVP Strategic Partnership Fund GmbH & Co. KG, Munich, Germany
| | Notation Capital II CIRC, LLC, Brooklyn, NY, United States | | Notation Capital, L.P., Brooklyn, NY, United States | | Notation Capital II, L.P., Brooklyn, NY, United States | | Notation Capital III, L.P., Brooklyn, NY, United States |
| Notation Capital, L.P., Brooklyn, NY, United States
| | NOTATION I SPV SV OCT 2020, LLC, Brooklyn, NY, United States | | OpenX Software Limited, Pasadena, CA, United States | | OpsRamp, Inc., San Jose, CA, United States | | Paper Education Company, Inc., Montreal, Canada | | Pendo.io, Inc., Raleigh, NC, United States | | PivotNorth Early Fund I, L.P., Atherton, CA, United States | | Point Nine Annex GmbH & Co. KG, Berlin, Germany | | Point Nine Capital Fund II GmbH & Co. KG, Berlin, Germany | | Point Nine Capital Fund III GmbH & Co. KG, Berlin, Germany | | Point Nine Capital Fund IV GmbH & Co. KG, Berlin, Germany | | Point Nine Capital Fund V GmbH & Co. KG, Berlin, Germany | | Project 44, Inc., Chicago, IL, United States | | PubNub, Inc., San Francisco, CA, United States | | Qualified.com, Inc., San Francisco, CA, United States | | Reltio, Inc., Redwood Shores, CA, United States | | Restream, Inc., Austin, TX, United States | | Ridge Software Investments I, LLC,Ventures IV, L.P., San Francisco, CA, United States | | Ridge Ventures IV,V, L.P., San Francisco, CA, United States | | SafeGraph, Inc., Denver, CO, United States | | Sapphire Sport, L.P., Austin, TX, United States | | Sapphire Sport Parallel Fund, L.P., Austin, TX, United States | | Sapphire Sport Parallel Fund II, L.P., Austin, TX, United States | | Side, Inc., San Francisco, CA, United States | | Smart City Planning, Inc., Tokyo, Japan | | Splashtop, Inc., San Jose, CA, United States |
| SportsTech Fund, L.P., Palo Alto, CA, United States
|
| SportsTech Parallel Fund, L.P., Palo Alto, CA, United States
| | Spring Mobile Solutions, Inc., Salt Lake City, UT, United States | | StackHawk, Inc., Denver, CO, United States | | Storm Ventures V, L.P., Menlo Park, CA, United States | | SumoLogic, Inc., Redwood City, CA, United States
|
| Sun Basket, Inc., San Francisco, CA, United States | |
SV Angel IV, L.P., San Francisco, CA, United States | | Tetrate.io, Inc., Milpitas, CA, United States | |
The SaaStr Fund, II, L.P., Palo Alto, CA, United States | | The SaaStr Fund II, L.P., Palo Alto, CA, United States | | Third Kind Venture Capital II, L.P., New York, NY, United States | | Third Kind Venture Capital III, L.P., New York, NY, United States | | Tribe Capital LLC Series 3, Redwood City, CA, United States | | Tribe Capital LLC Series 3,8, Redwood City, CA, United States | | UJET, Inc., San Francisco, CA, United States | | Unmind Ltd., London, United Kingdom | | Upfront V, L.P., Santa Monica, CA, United States | | Uptycs, Inc., Waltham, MA, United States | | VerbIT, Inc., New York, NY, United States | | Vistex, Inc., Hoffman Estates, IL, United States | | Walkabout Ventures Fund II L.P., Los Angeles, CA, United States | | Yapily Ltd., London, United Kingdom | | Zesty Tech Ltd., Ramat Gan, Israel | |
|
