SAP

The role of the administrative, management and supervisory bodies

SAP Executive Board

Christian Klein - Chief Executive Officer (CEO)

• Joined SAP: 1999
• Appointed to the Executive Board: 2018
• Current Executive Board term expires: 2028
• Nationality: German
• Year of Birth: 1980
• Other board memberships: Supervisory Board, adidas AG, Herzogenaurach, Germany (publicly listed)

Dominik Asam - Chief Financial Officer

• Joined SAP: 2023
• Appointed to the Executive Board: 2023
• Current Executive Board term expires: 2026
• Nationality: German
• Year of Birth: 1969
• Other board memberships: Supervisory Board, Bertelsmann Management SE and Bertelsmann SE & Co. KGaA, Gütersloh, Germany (not publicly listed)

Muhammad Alam - SAP Product Engineering

• Joined SAP: 2022
• Appointed to the Executive Board: 2024
• Current Executive Board term expires: 2027
• Nationality: U.S. Citizen
• Year of Birth: 1977

Thomas Saueressig - Customer Services & Delivery

• Joined SAP: 2004
• Appointed to the Executive Board: 2019
• Current Executive Board term expires: 2028
• Nationality: German
• Year of Birth: 1985
• Other board memberships: Board of Directors, Nokia Corporation, Espoo, Finland (publicly listed)

Sebastian Steinhaeuser - Chief Operating Officer

• Joined SAP: 2020
• Appointed to the Executive Board: 2025
• Current Executive Board term expires: 2028
• Nationality: German
• Year of Birth: 1985

Gina Vargiu-Breuer - Chief People Officer, Labor Relations Director

• Joined SAP: 2024
• Appointed to the Executive Board: 2024
• Current Executive Board term expires: 2027
• Nationality: German
• Year of Birth: 1975

Supervisory Board

The Supervisory Board of SAP SE discharged the duties imposed on it by the law and by the Company's Articles of Incorporation. It advised the Executive Board on an ongoing basis with regard to the running of the Company, and it scrutinized and monitored the work of management.

The Supervisory Board received regular, full, and timely reports from the Executive Board, both from members in person and in written documents. The Supervisory Board and its various committees were also in regular exchange with senior internal officers.

Dr. h.c. mult. Pekka Ala-Pietilä - Chairperson (since 5/15/2024) Lars Lamadé - Deputy Chairperson Dr. Friederike Rotsch - Lead Independent Director

The Supervisory Board held four regular meetings and seven extraordinary meetings in 2024. The following committees were active:

• Personnel and Governance Committee
• Audit and Compliance Committee
• Finance and Investment Committee
• Product and Technology Committee (since May 15, 2024)
• Nomination Committee
• Government Security Committee (since January 1, 2024)

The Supervisory Board addressed key topics including:

Strategy and Transformation

The Executive and Supervisory Boards discussed SAP's corporate strategy and cloud transformation on numerous occasions in 2024. The Supervisory Board was updated on the restructuring program and discussed its implementation with the Executive Board.

Sustainability

At SAP, sustainability has two main dimensions: providing solutions that help customers do business in a sustainable way, and aligning our business activities with sustainability targets to lead by example. Throughout the year, sustainability topics were discussed at meetings of the full Supervisory Board and various committees. The Audit and Compliance Committee looked closely at the new European Corporate Sustainability Reporting Directive (CSRD) and at how SAP technologies for sustainability reporting can be used to track ESG data.

Information provided to and sustainability matters addressed by the undertaking's administrative, management and supervisory bodies

The Supervisory Board received regular, full, and timely reports from the Executive Board, both from members in person and in written documents. The Supervisory Board and its various committees were also in regular exchange with senior internal officers. This ensured that they were always up to date, also between meetings, on the Company's strategy, planning, business performance, risks, risk management, compliance, and on transactions of special significance for SAP.

In its reports, the Executive Board advised the Supervisory Board about any deviations in business performance from the budgets or targets set, and explained the reasons for them. The Supervisory Board questioned and probed the Executive Board on its reports to satisfy themselves that they were plausible.

The Supervisory Board chairperson and the CEO were in regular contact, such that the Supervisory Board chairperson was always informed without delay about all material events. Moreover, the chairperson of the Supervisory Board and the CEO regularly discussed SAP's strategy, business performance, risk position, risk management, and compliance.

Sustainability Matters

Throughout the year, sustainability topics were discussed at the meetings of the full Supervisory Board and at those of the various committees. The Audit and Compliance Committee looked closely at the new European Corporate Sustainability Reporting Directive (CSRD), which obliges companies to meet new, more detailed, sustainability reporting standards.

The Committee and the Supervisory Board were informed about the process used to identify, assess, and manage the impacts, risks, and opportunities (IROs) related to sustainability. At the meeting on April 11, 2024, the Chief Sustainability Officer advised about new statutory reporting requirements, the stipulations of the German Supply Chain Due Diligence Act, the action SAP is taking to ensure responsible AI practices, and its plans to reduce its emissions.

The Supervisory Board was given the opportunity to build on its sustainability expertise by attending a training course the Company held in October 2024 on sustainability at SAP. SAP's sustainability solutions are crucial to its business, and because the topic of sustainability is relevant in many key aspects of SAP's operations, these aspects are also central to SAP's strategy.

Integration of sustainability-related performance in incentive schemes

As part of the Executive Board compensation system, the Supervisory Board set performance targets for the short-term incentive (STI) 2024 and grant amount for the 2024 tranche of the long-term incentive (LTI) 2024. The Personnel and Governance Committee extensively prepared the Supervisory Board's deliberations and resolutions on Executive Board compensation.

At the November 2024 meeting, the Supervisory Board adopted the adjustment to the targets and achievement levels in the Executive Board's STI and LTI plans. The Committee also prepared the resolution on replacing the operating margin increase with free cash flow as one of financial key performance indicators (KPIs) in the STI 2025, as investors are now placing much greater importance on free cash flow than on the increase in operating margin.

From the 2025 tranche of the LTI 2024, total revenue will replace software license, support, and service revenue, and cloud revenue, as the revenue KPI. The Supervisory Board has given greater weight to cloud revenue to reflect its relevance to the Company's cloud transformation.

The Supervisory Board ascertained that, in terms of amount, structure, and objective criteria, the Executive Board members' compensation for 2024 was reasonable and appropriate, and proportionate to the Company's financial situation, profit, and outlook. An independent opinion obtained from an outside compensation consultant informed this decision.

Statement on due diligence

SAP conducts due diligence processes as part of its governance and risk management framework. The Executive Board advised the Supervisory Board about the terms of the settlement agreement that SAP reached with the U.S. Department of Justice regarding ongoing compliance matters. The Supervisory Board and Executive Board agreed that the Company must have a zero-tolerance policy on compliance breaches.

The Supervisory Board discussed with the Executive Board the stipulations of the German Supply Chain Due Diligence Act and the action SAP is taking to ensure responsible AI practices. SAP's Chief Sustainability Officer reported on new statutory reporting requirements and due diligence processes.

The Audit and Compliance Committee regularly discussed ongoing compliance matters, the status of SAP's internal investigations, and its cooperation with authorities on respective cases. The Committee also dealt with the monitoring of SAP's risk management system, internal control system, sustainability reporting, and compliance system.

SAP has established processes to identify, assess, and manage impacts, risks, and opportunities (IROs) related to sustainability as part of its due diligence framework. This process was reported to and discussed by the Supervisory Board and relevant committees throughout 2024.

Risk management and internal controls over sustainability reporting

The Audit and Compliance Committee comprehensively monitored SAP's risk management system, internal control system, sustainability reporting, and compliance system. The Committee regularly discussed these systems as recurring agenda items.

The Committee confirmed that, as part of its supervisory work, it had addressed the SAP Group's internal control, risk management, and internal auditing systems, and found the systems to be effective.

The auditor reported that it had not identified any material weaknesses in SAP's internal control and risk-management systems for financial reporting. Both the Audit and Compliance Committee and the Supervisory Board asked detailed questions about the form, scope, and results of the audit.

SAP has established processes to identify, assess, and manage the impacts, risks, and opportunities (IROs) related to sustainability. The Committee and the Supervisory Board were informed about this process throughout 2024.

The Audit and Compliance Committee looked closely at the new European Corporate Sustainability Reporting Directive (CSRD) and at how SAP technologies for sustainability reporting, such as the SAP Sustainability Control Tower solution, can be used to track ESG data so that companies can meet sustainability targets.

BDO AG Wirtschaftsprüfungsgesellschaft provided limited assurance on the group sustainability statement included in the combined management report, and reasonable assurance on selected sustainability information in accordance with International Standard on Assurance Engagements (ISAE) 3000 (Revised).

Strategy, business model and value chain

Our Purpose

At SAP, we remain steadfast in our purpose to "help the world run better and improve people's lives." Together with our customers, we not only rise to meet today's challenges, but we are also shaping the future by empowering each other to continuously improve and deliver better outcomes.

Our Vision

Our vision of bringing out the best in every business reflects our commitment to transform organizations globally. We aim to build a future where businesses adapt rapidly to changes and opportunities, embed sustainability in their operations, and drive efficiency throughout the value chain. Our commitment to this vision is based on three pillars:

Agile Business Transformation at Scale

To stay competitive in a rapidly changing landscape, businesses need to transform at scale with agility. Our cloud solutions and real-time data insights, supported by our platform, enable organizations to achieve greater flexibility and efficiency and to adapt rapidly to evolving demands.

Achieve More Across the Value Chain

We assist organizations in utilizing collective intelligence to help achieve efficiency, resilience, and agility across the whole value chain. By embedding AI and connecting end-to-end business processes – from finance to supply chains, and human resources to customer relations – we fuel efficient growth throughout businesses.

Sustainability at Your Core

We have evolved beyond mere sustainability aspirations to actionable, sustainable outcomes. Our SAP Green Ledger solution aims to ensure robust, auditable sustainability practices are a natural extension of business operations.

Our Business Model

We create value by first identifying the business needs of our customers and then developing and delivering a portfolio of cloud solutions, services, and support that address these needs. We strive to continuously improve our solutions, identify further business needs, and deliver enhanced value to our customers.

We derive revenue from fees charged to our customers for subscriptions to use our cloud solutions. Software licenses, on-premise support, consulting, development, training, and other services also contribute significant revenue.

Our Product Strategy

The recently launched SAP Business Suite leverages the powerful combination of applications, data, and AI. It offers a comprehensive set of integrated solutions, combining our core cloud ERP and line-of-business (LoB) applications to seamlessly connect functions across the business end to end.

We have adopted an AI-First, Suite-First strategy:

AI-First means we are fundamentally rethinking our approach to product development, offering our generative AI copilot, Joule, available in many of our most frequently used process steps.

Suite-First describes our objective of delivering a consistent, or suite-like, experience across our portfolio, aiming to ensure faster time to value for customers.

Geographic Presence and Value Chain

SAP is a global company headquartered in Walldorf, Germany, with a global presence employing more than 109,000 people as at December 31, 2024. The SAP Group has operations across multiple regions and serves customers worldwide through our cloud solutions, software licenses, support services, and consulting offerings.

Interests and views of stakeholders

SAP maintains active dialogue with various stakeholder groups to understand their interests and incorporate their views into our strategy and business model development.

Investors and Financial Community

SAP maintained strong engagement with the investment community in 2024. Throughout the year, members of the Executive Board and the Investor Relations team engaged with institutional investors, analysts, and private investors worldwide to discuss the company's strategy, execution, business developments, and how SAP is helping customers meet organizational challenges.

The IR team, together with senior management, conducted more than 500 meetings in 2024 to maintain active dialogue with investors and analysts. These included one-on-one phone calls, video conferences, and roadshows. Members of the Executive Board and IR team attended more than 20 conferences across an expanded geographical mix.

We continued our dialogue with investors, focusing on environmental, social, and governance (ESG) topics, and provided them with insights into our sustainability policies and products.

Customers

We create value by first identifying the business needs of our customers and then developing and delivering a portfolio of cloud solutions, services, and support that address these needs. Our interests and views of stakeholders in relation to strategy and business model are continuously incorporated into our product development and service delivery.

2024 was another year of strong customer wins, including companies from the "who is who" of the tech, energy, retail, automotive, and manufacturing sectors. By the end of 2024, more than 34,000 cloud customers worldwide use SAP Business AI.

Employees

Employee engagement and feedback are integral to our strategy development. Employee surveys are conducted regularly to gather insights on engagement, management feedback, and other aspects of the work experience. The results of employee surveys are discussed in detail at the People and Culture Committee and inform actions and improvements in our people strategy.

Shareholders

SAP representatives engaged with retail shareholders at virtual and in-person events. We provide a wide range of information online about SAP and its stock, and maintain regular communication through various channels including LinkedIn, telephone hotline, and email.

Given the company's success in 2024, the Supervisory Board and Executive Board propose a dividend of €2.35 per share for approval at the Annual General Meeting in May, marking an increase of 6.8% compared to the previous year.