Performance

Foreword


Dear investor,

Information technology can help us lead healthier lives. The Internet of Things has already sparked a revolution in personal fitness and preventive care. In health care, innovative data analytics and network technology lead to greater efficiencies in preventive care, research, diagnosis, prognoses, and treatment. For example, digitization can help us combat disease. SAP and a number of renowned partners have recently developed an SAP HANA-based system that tracks and analyzes disease outbreaks to detect epidemics early, offer effective treatment, and contain them from the outset. Another example is the SAP HANA platform. It enables major advances toward personalized medicine and in cancer treatment because it can be used to analyze genetic information across a large group of patients very quickly. In this edition of SAP Investor, we look at how digitization is leading the way to a healthier future.

SAP itself is in the best of health. Our third-quarter results clearly show the results of the strategy we have followed over the past years. Not only is our cloud business growing in triple digits, it is profitable as well, unlike that of many of our competitors. We aim to make it more profitable by further scaling our cloud business. Our gross margins in the cloud have increased for four consecutive quarters, and, in the third quarter of 2015, by almost nine percentage points year over year. SAP HANA has been very well received by the market, as demand for SAP S/4HANA, our new digital core, shows. In less than three quarters, SAP S/4HANA has really picked up momentum, and now has over 1,300 customers across all industries and geographies. Our business networks are set to grow too. About 1.9 million connected companies conduct over US$730 billion in commerce on the Ariba network; each year some 30 million business travelers use Concur to arrange trips and submit expense reports; and customers use Fieldglass to manage 1.7 million temporary workers per year. I am especially pleased that our operating profit grew faster than our revenue in the reporting period. This shows that we are seeing the benefits of the transition to our new business models and our continued focus on efficiency.

Wishing you an enjoyable and informative read,

Luka Mucic
Chief Financial Officer, SAP SE