Good afternoon, everyone, and welcome to our financial analyst conference. We are glad to be with you today, and we have a great agenda for you. Before we start, we hope you're enjoying Sapphire so far, that you're having a great experience with us here in Florida. It's always a special moment for us to share with the financial community, and it's also a great experience for our customers and partners to talk innovation and come together. Before we start, we have a special guest with us today. Punit Renjen has been newly elected as the chairman of the SAP board last week with great success and great voting. Punit, thanks for being with us. We're really honored to have your presence with us today, welcome. Welcome to those also watching online. We gave you last year clarity on our growth drivers and presented a refined view of the big opportunity lying ahead of us. We made clear that after some acceleration on the cloud journey, this year will be a year of inflection, staying on the right trajectory, on the right path to our midterm ambition. Today you will get a comprehensive update on that. We have a great agenda for you today, let's jump right in. First, we will welcome our CEO, Christian, to the stage to provide insights on our vision and strategy. Scott, Head of Customer Success, will provide some insights on our go-to-markets and some updates also on how our customers are, let's say, transforming their businesses. Following this update, our CFO, Dominik, will provide a deeper look into the financials, especially on today's revised ambition that we have communicated to the market. As you can see, we have an exciting lineup for you. After Dominik's part, we'll take a short break and our board members will come on stage for a Q&A session with you. Now let's do the safe harbor. During this presentation, we'll make forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations, forecasts, and assumptions that are subject to risks and uncertainties that could cause actual results and outcomes to materially differ. Additional information regarding these risks and uncertainties may be found in our filings with the Securities and Exchange Commission, including but not limited to the Risk Factors section of SAP's 2022 Annual Report on Form 20-F. Unless otherwise stated, all financial numbers mentioned here are non-IFRS. Growth rates and percentage point changes are non-IFRS, year-on-year at custom currencies. The non-IFRS financial measures we provide should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with IFRS. With that, I'd like to welcome Christian onto the stage. Christian, great keynote this morning. Very exciting to see the announcements around AI, sustainability. Take it away, please. Thanks a lot, Anthony. Yeah, welcome as well from my side to all of you here in Orlando and to everyone joining us virtually. I have to say, it's, even for U.S. standards, it's pretty cold in here, but will do my best that the numbers and the content will warm us up. Yeah, I hope you have seen all the keynotes and I mean, for me, Q4, Q1, now SAP Sapphire, for me, also personally an important reflection point. It was very important when we did the shift and the significant shift of our strategy and pivoted SAP to the cloud, is that we stay consistent and that we deliver what we committed to you. I have to say, I'm really proud about the team and what we have done the last 2 and a half years because we actually accelerated the shift to the cloud. We are this year back to double-digit profit. What we also have built a much more resilient and a much stronger foundation for SAP when it comes to tech and the talents, what we are having inside the company. Of course, as always in life, there's no time to rest. After phase one comes phase two. Our plan, which we would love to execute again, is to further accelerate it, to further accelerate our growth momentum. When I talk about growth, I wanna underscore to accelerate organic and profitable total revenue growth. With all the innovations you have seen in the morning around AI, around sustainability, and I come a bit later to what else is in our pipeline. Dominik, welcome on board, still pretty new to the family. Of course, we also have a huge focus on profit and even more so, cash flow. Today, SAP is more relevant than ever, when we crafted a new product strategy, it was of course a lot about getting, you know, some discipline back into SAP four years ago with all the acquisitions we did, because we are running the world's most mission-critical business processes. That's not enough, especially in these days when IT budgets are more tight, you have to have a strong business case. We thought a lot about how can we connect our technology to the needs of our customers. The needs of our customers, actually, I wanna pick one company, ENGIE. ENGIE, a French, U.S. company in the energy business. Why is SAP so relevant to them? ENGIE is in a big transformation from fossil fuels, divestitures into green energy. Everything around ERP supply chain needs to be designed completely from a greenfield perspective. They need the ERP, they need our supply chain to run this new business at scale. ENGIE and Catherine and team, they wanna have huge profit pressure because they need to fund the new world and get rid of the old world. It's a lot about process automation and what we can do for them to further drive productivity and of course, finally, profit. Last but not least, you have seen it this morning, it's a lot about the Green Ledger because they are getting pressure from investors, from their end customers, from their employees around how can we also build a more sustainable business? That's SAP. Now you can replicate that to almost every industry, to almost every customer we have. When we talk about the next phase of our transformation, I would love to touch base today on three points: focus, scalability, and innovation. Talking about focus, I would have said we have done our homework. We have built a very cohesive portfolio, an integrated best-of-suite portfolio, where customers can really bet on our end-to-end capabilities to do what I just have said. The Business Technology Platform is the foundation. It's the foundation for Datasphere to harmonize the data layer across the company. It's the foundation for the cloud ERP, where we land and then expand into the different lines of businesses. When I also talk about focus, we also have done our homework in divestitures. Qualtrics, Litmos, a few others, they are not core to SAP. We will of course still partner with Qualtrics, but we can do so also, you know, as them being an independent company. Still after all the work we have done, we have a total addressable market of EUR 760 billion. Trust me, we have plans for all of these categories to grow much faster than the average growth of the market, which is 11%. Our clear ambition is to grow our business by more than 20%. For all of these categories, we are set up to be either the number one or further expanding the market share going forward. To give you an example, take Ariba. Three years back. Now we have built the market's leading procurement platform, total spend. You can manage your raw materials, your indirect materials. You can manage your external workforce on one platform. You have the one view of the supplier. You have the integration back into the ERP. We are by far way more competitive than we have been three years ago against the Coupa or the Aureus. You have seen it in the keynote. The way how we work is not like a bunch of best-of-breed products. What SAP is about, and I guess the story is told best when you look into the transformation of the business model. In many, many markets, many, many customers I'm also involved in, a lot is going into sell everything as a service instead of products. This is where we are very, very relevant already with the CPQ into the order management, into the billing. The next piece is when you also then wanna launch new license models, suddenly you are in EC, in Employee Central. You need incentives, you need the payroll, you need the finance to work. If you actually say, "Hey, I wanna personalize my offerings, what about my manufacturing?" This is the moment when the Daimlers and the Apples and the others say, "Okay, now let's talk about manufacturing cloud or talk about IPP, because we really like what we see." That's about land and expand. It's not about selling materials and SKUs, it's about selling end-to-end capabilities. That's part of our transformation. AI. The good piece is what you have seen this morning with Microsoft, with Google, with IBM or Databricks, we don't necessarily need to come to them. What do all of these companies like so much about us? When it comes about the value of AI, you need to touch the business of the customer. Who is better served to do this than SAP with our applications? We did something five, six years back with SAP Leonardo. The front was good, the rest was not so good because we didn't embed our AI into our solution. To directly touch the supply chain planning, to directly touch, you know, the manual business processes in Record to Report, in Source to Pay, in the processes where customers really spend a lot of time and efforts to run these processes. This is time way more different. This is why all of these partners want to partner with us, also wanna have access to our data model. The access comes via the Business Technology Platform. There's no way around it. This is the place where you land in SAP's portfolio. Very important when it comes to the commercials and the way how we go to market, and of course the way how it then turns into revenue and upsell for SAP. AI, just to give you a glimpse, what you have seen this morning is the beginning. My dream scenario, and our researchers and our engineerings are working on that at one point, Dominik or others are sitting in front of our solution and asking the software a question. Why, "Hey, how can I reduce my carbon footprint by 5%, and what is the trade-off I have to do as a company in procurement for my car fleet, for my data centers?" And that the system itself gives back a very intelligent answer, and not only an answer, but also recommends actions how to get there in the best possible way. That's the future of enterprise software with embedded AI. When it comes to scalability, what we have started 2.5 years back with RISE with SAP is we landed with SAP S/4HANA Cloud, meaning oftentimes with finance. In the second step, you know, we are expanding, and the Business Technology Platform is the only way how you can integrate SAP to non-SAP, and it's for sure the best platform to extend and get rid of the customizations you have in the legacy. All the application logic sits on BTP. It's the epicenter. It's not a loosely coupled platform like five years ago. Nothing works without BTP, including for our ecosystem. When you start working with the customer on Quote to Cash and Procure to Pay, then you're gonna expand into the other areas of our portfolio. RISE gives me way less sleepless nights than three years before. It's a great success, and the potential is unbelievable. EUR 25 billion, yeah, which is sitting there, which needs to be not only lifted and shifted to the cloud, but really business which we need to transform together with our customers, with RISE with SAP. Of course, it's an ongoing journey. I come to that. First step is the private cloud for the large enterprises, but the journey doesn't stop. The journey continues until we have reached complete standardization with BTP as an extension platform, and then of course move the customers more and more into our public cloud. Of course, the volume business, the SME, we worked so hard on SAP S/4HANA Cloud, Public Edition, to make this really a extremely competitive ERP and now we are there. It's absolutely possible to go live in weeks. We have industry versions of S/4HANA Public Cloud, and we see huge demand in markets like the United States and India and Germany for this new offering. I already talked about that. BTP is the glue holds everything together. What is so important, especially when you think about the growth in the next years. I mentioned in the morning this customer example, spending 30 times more on customizations than for the standard ERP software. That cannot happen ever again. Now let's imagine this 30 times more ends up on BTP. We are not customizing in NetWeaver, the old legacy stack, and we are building value-adding capabilities for commodity management, which is so key for healthcare, for oil and gas, or we build trade promotion. Not only for 1 customer. Partners are realizing, "Hey, I can resell this IP to the whole industry. It's better for the customer, it's better for me because I'm making more money and more profit." Let's really make sure that we move to BTP and be part of the SAP Industry Cloud and be part of this community, which will create a massive flywheel effect. My bet is today we will see $1 of platform as a service and $5 of SaaS. We will for sure hit a ratio of 1 to 2. That's what I expect. When you compare it to a CRM market, I mean the ERP with all the complexity of the core business processes, there is a huge demand for building on the platform new extensions, be it for line of business or be it for the verticals in the industry. If we then move on and say we landed with ERP, we have the technology platform in place, you come into discussions with the business and say, "Hey, when I need to run now a new business model for," take General Motors, discussing what we are having right now. "I want to move to EV. I want to offer mobility services. I want to definitely digitize my whole go-to market and connect it to manufacturing." You are in these discussions. Immediately you need to connect the personalization which happens with the car in the front office to the manufacturing. I would not say in the back office, in the highly relevant and strategic supply chain area. You connect it to finance, to quote to cash. You add our partner solutions like Icertis. We use LeanIX for the enterprise architecture. We can come in with our partners and make this an end-to-end experience. Happens this in one day? No. Happens it over time? For sure. Our win rates are far higher than it was years ago, for sure, because it comes as one. It comes modular, but it comes as one, as an integrated best of suite with one data layer underneath. If you want it in Google, or if you run it in Azure, and for sure, at some point also in AWS, we can also then with Datasphere, connect the data layers, the data silos, and harmonize it, so that you know more about your consumers when they're clicking in the store or when they're clicking on a website. You have then the SAP, the order data, the supply chain data, combined with all the other data who are sitting in non-SAP data sources. That's not only our vision, this is what becomes more and more reality, and this is where our growth will be built on. In our conversations, I often hear about the cost profit and the private cloud and the public cloud. The private cloud, and RISE with SAP, is something which is very, very important for the future of SAP. I would rather say when we would not have done this turnaround three years back, the future of SAP would be more doubtful. What we are doing is, we are not only lifting and shifting the large enterprise customers to the private cloud. No, no. We are coming in with enterprise architects. We are coming in with data scientists. We are moving them and then start working with them on process standardization, on the data layer. We come in with our industry expertise. What we see is that we are not only turning $1 of maintenance into $3 of cloud revenue. What we are doing is actually, we are having much higher proximity, much closer proximity to this customer, and we can guide them, and we can do what I described before in cross-selling our portfolio. Of course, over time, also our large enterprise customers, there's absolutely a way that they cannot only replace finance with S/4HANA public cloud. There is a way into HXM, there is a way into Manufacturing Cloud, there is a way into Integrated Business Planning, all public cloud solution. The customer cannot do it in one step. When you run such large enterprises, it takes time to standardize business processes, but it's very important that we land with the private cloud and that we are not losing the connection to the customer. Innovation. Yes, we have increased our R&D spend over the last 2 years. For me, it was very important when I talked to Thomas and Jürgen and all of our product owners that, you know, that the innovation, what is coming out of R&D is highly relevant in the market, and that it really now helps us in the phase 2 to further accelerate our total revenue. I have to say, the teams really deliver. No matter if it's on the data layer, no matter if it's with Quo in the mid-market, no matter it's around the SAP Green Ledger, this is highly relevant tech for our customers. It makes the business case so much stronger. This is nothing, you know, what we just, you know, launched. I mean, take sustainability. We are developing on that since four years. The SAP Green Ledger is here. While there are not only actual data yet in, because this is also a journey, we will come more and more to this plan around feeding the SAP Green Ledger with more and more actual instead of average data. Then include Scope 3 with our business network. If we then talk about further innovation in the cloud, you have seen our partnership with Microsoft around generative AI, more to come. The business network, what I just mentioned, it's actually remarkable. Four years back, I guess we didn't even realize yet this crown jewel we got with the acquisition of Ariba. It was more like trading back and forth between the supplier and the buyer. We added so much more capability to the business network that we can connect the supply chains for the industries we launched today. That we can track and trace the material flows from the car down to the raw material. We have the carbon calculator to really make sure that you can also measure, in a standardized way, carbon footprint end-to-end, including Scope 3. The industry. The launch of the Industry Cloud 4 years back was actually also part of our clean core strategy because we saw that a lot of modifications around the ERP happened for good reasons. The customer is doing that because they see a high value in customizing something, and a lot of that has to do with industry extensions. In the meantime, we have over 200 industry apps on our marketplace. We are embedding these apps from the partners into our roadmaps, and we see there also a further leverage for our growth in the upcoming years. This leads into our updated ambition. For me, I have to say it's an important day where we can announce that we're gonna increase our total revenue ambition by EUR 3.8 billion, the cloud revenue by +EUR 1.5 billion, and the operating profit, the cost profit actually by a half a billion. When you look into the levers, I talked about the revenue. When I talk about profit, we have a price premium. First of all, the products are way more competitive. They are sticky. They are relevant. Trust me, when you have one done a migration RISE with SAP to the cloud with your core ERP, you don't wanna do this again in five years from now. It's extremely sticky. On cloud TCO, we did our homework on the infrastructure Cloud Harmonization, but of course, we have APIs which we now can continuously execute on. Our engineering teams know exactly about how to build a more elastic database. They know exactly how to build an even more elastic product. We will gonna launch in Q4 a more composable commerce solution targeted, you know, to attract more customers, but also designed in a way that we can further leverage TCO optimization. On the go-to-market side, I guess for me, the best thing is the indirect channel, the partner channel already today sees a higher growth than our direct sales, which is good, because we can never, ever sell software with such an addressable market into every corner in this world and into every single buying center. The ecosystem is so important in go to market. Of course, also our development partners, but especially also in the sales and the services area. Then Dominik will talk later on around how we can further optimize our cash flow. I have to say, kudos to Dominik. It's a refreshing new perspective on what we can do, not only on profit, but also on cash flow. Look, our ambition is to stay the number one enterprise application company powered by our leading platform. Whoever worked in tech before, one thing for sure, it's all about the people. When I look at the executive board today, and when I look at our next hierarchy in the company and the L2s, the talent we infused into SAP and the strengths of our management teams, the product owners we have, is way better than four years ago. We have great people on all of these lines of businesses. We know how to go to market. We have a lot of ideas, but at the end, it's all about the team, it's all about the people. There I even see now with the turnaround and the accelerating momentum that makes us as SAP even more attractive for a lot of more talents outside of SAP. This is why I'm looking very confident into the next years. I can definitely see that we can further accelerate our total revenue growth also in the years 2025 and beyond, looking at everything what we have in the pipeline. With that, back to you, Anthony. Thanks a lot. Oh, stop. Okay. Can you hear me okay? Good afternoon, everybody. Welcome. Great opening by Christian. I hope you enjoyed the this morning's session. For those who I have not had the opportunity to meet, and I think I've met most of you here, I have the esteemed privilege of leading what we call customer success, and we take those words literally. The role and responsibility of the part of SAP that is accountable for our customers' success. Now, as a part of their success, it also drives ours. I'm gonna talk a little bit in the upcoming 10, 12 minutes before also being joined by a very good friend, but also a customer of ours, about how our financial strategy and our business strategy equals our customer strategy. They need to be in link. They need to be in tandem. This isn't a disassociation between our financial aspirations versus our customers' aspirations. The beauty of our strategy is that our success can only be engendered and delivered when our customers are successful. For those of you who joined me 12 months ago when I was here and I was sharing, I was talking a little bit about the journey we were about to go on. I hope you remember about the fact that we were moving from a sales-obsessed organization that was really driven about deals and wins and gains. We still do that, be assured, but pivoting that to being an outcome-obsessed, a customer value-obsessed organization, putting the customer at the center of everything that we do. If you remember, I spoke a little bit about History of building great products, designing, creating, building these products, and then selling them and handing them off. After that, we didn't see too much. We only knew what was happening when we got a support ticket or a problem. Our strategy is intertwined that we get to, through our telemetry, through the great technology, we understand at all moments of their engagement how successful they are in delivering and gaining value out of SAP. The point that I wanna make to everyone here is, 12 months ago, I made a promise that we would deliver sustainable, tangible benefits for our customers, but also for SAP, and we have delivered on that promise. There are a few examples of that, and you can see here, I mentioned about the fact that we measure our cloud, our post-sales teams. We measure them not through utilization and how many hours clocked. We measure them by how many customers have gone live with SAP in the cloud. We had an 82% increase. It doesn't sound like much, but that is literally thousands of companies more going live on the cloud with SAP than what they were before. Tangible proof through our focus around their success. The second is, Christian mentioned this, go lives of ERP cloud both RISE as well as GROW in a matter of weeks. We've measured the improvements, so we're seeing faster time to value. Our customers, when they invest, the time it takes to get benefit from that investment continues to shrink. If you think about that from a revenue modeling, that means that our revenue ramp is faster, our profitability and return on investments are faster, We're able to then leverage that to do more on our go-to-market and to go to more and more customers because it's an automated mechanism rather than a manual. We also have expanded significantly our partnerships, particularly as it relates to software. Christian, again, mentioned this before. Our software our partners to extend end-to-end solutions and capabilities, and there were a few of those mentioned this morning. Our artificial relationship and in partnership with Microsoft, our Datasphere relationship with Google Cloud and with Databricks and other organizations, extending the power of SAP's capability across a broader ecosystem. The beauty is that means that there is more value we create for our customers, but also more opportunity for SAP to participate in categories or in areas that maybe we were excluded a little bit from. Datasphere is a good example. If you think about it, customers used to pick up data, ship it across, put it into some data lake somewhere else. Through a federated data platform and the data fabric, we can then not only monetize it, but we create value without moving data. It stays on the SAP cloud. Last but not least is our ecosystem of partners, being powerful, but we're also digitally becoming more efficient. More deals being done through pure digital channels. When it comes to the efficiency, and I'll talk about this a bit later, but our digital route to market, an increase, probably not as fast as I would like because customers like talking to SAP people, sometimes, but the ability to be able to procure, upsell, whatever you need through a digital channel versus before. To give you some context of why we are so confident and why I'm so confident. I get asked by some of you and others in the industry, in the market, "Hey, what's the confidence on pipeline?" "What's the pipeline like? Is pipeline good? Is it the size that it was before? Is it exceeding your expectations? Is it at the speed?" Yes, that's important. I look at it slightly differently when I think about the shape of our business. This chart is a pretty simple one. It's what we saw 10 years ago, 2015... sorry, 8 years ago in 2015. We've seen that when you've made a first investment in SAP and the ERP, we've been able to show we are able to then grow and expanded revenue with that same customer 10x. Once they're on the core, the ERP and our SAP Business Technology Platform, their willingness proven in our business, this is proven over time, that they will continue to expand and use more and more solutions of SAP. You can see the spike in 2021 as we pivoted the strategy into a reality. Our integration was easier, the data layer was easier, the process layer was easier, which means for customers, they weren't looking at Ariba, for example, and comparing it to their nearest competitor. They were looking at the extended ability to be able to do so on a ongoing basis. I can't tell you how important that is because when I think about pipeline, I'm not just looking at the numbers that's sitting in our current. I'm looking at our install-based customers, and I look at the amount of solutions that they have acquired with SAP versus what the potential is. I think about our journey with them and the customer journey with them to be able to achieve that. That is a very different view about our business model and the opportunity of revenue and growth and value creation. To further amplify this picture, when you look at Cloud ERP, because I was using the on-prem ERP in 2015. When you look at Cloud ERP, we are four times more likely to have those customers have more than four cloud solutions. Let me just say that again. Our Christian talked about our Cloud ERP, RISE and GROW. When we have been successful and they've adopted those solutions, we are 4 times more likely for those customers to have four or more of our cloud solutions. They see the journey with SAP, the value of the solutions and the decision-making that they have. Everyone has to do direct and indirect procurement. Everyone needs to manage their data. Everyone needs to manage all of their HR and retain and attract the best talent for their business. Everyone needs to be able to manage, or at least in industries where supply chain is relevant, to manage their supply chain, their logistics, their warehousing, their distribution. All of those are extended cloud capabilities of SAP. It starts with Cloud ERP and the Business Technology Platform. We have proven over the past two years where why you saw that spike, that the more that they come on to with RISE and with GROW, the more likely they will be. Now, that doesn't just happen. It happens because our engagement model shows an extended value that they can create, that they can do otherwise going somewhere else. It's more economically, commercially, but quite honestly, it's more simple within their environment. Companies are not interested in discretionary spend right now. They are interested in a simple platform that is able to scale and grow with their business, that's always got the latest innovation. The great part is it's matched to our revenue model because we don't earn the revenue and the growth unless they're gonna use and consume. The two go hand in hand. I often get asked, "Well, okay, if that's the case, what's the distribution around the world and what's the distinction between our existing customers and our new customers?" Well, I would say this in very simple terms. Our business is incredibly balanced. I'm not dependent on revenue growth on one particular geography. I'm not dependent on one particular category. We know the cornerstone of Cloud ERP, but I'm certainly not dependent on that. I'm certainly not dependent on only our install base customers, but it's also new cloud customers are coming on board. Across the Americas, I'm pleased the 19%, that is an enormous growth given the size of this market, given how competitive this market is, given the nature of competition we have here, the ability to be able to grow at that pace and sustain, and we have really bullish about our the North America going forward. You look at Europe, despite all of the geopolitical, humanitarian, and other challenges that we've seen in Europe, together with Asia-Pacific, they are growing at 26%, and the trend line is strong. You'd be obviously interested to know that our install base customers, which links to my presentation before about the revenue growth, the more that they are with us, and over time, it naturally expands, but new customers coming in. They start the journey, we have the expansion plan with them as well. I look at that and I say, "Okay, we have huge confidence in our business." I also have confidence in our business because our install base is a large market that we have not yet moved to the cloud. It's an exciting opportunity. I think I said this last year that whilst I love our technology and I love what we do and I love the market opportunity, you'll hear me often say the SAP story is actually the customer story. Companies who have invested in SAP, who have been running their businesses leveraging SAP to the position that they are today presents a huge opportunity for us and them tomorrow. We have got a 2x-3x. We're not limited by that. You can see the 2-3x opportunity of EUR 1 of maintenance revenue and then into the cloud revenue. You've heard me say this before, but the opportunity to be able to move and move quickly is clearly a future opportunity and growth driver for SAP. We don't just assume that will happen. How do we do it? Well, first of all, commercial strategies matter. It's got to be easy for our customers who are on an existing on-premise estate with certain commercial agreements to move across. We put a lot of effort, Christian, myself, Julia, and the team around the commercial strategy. RISE was a transformation offering, but it was also a commercial strategy to bring to life how to move and move easily. We've also got a further and further simplified conversion program. When we launched RISE two and a half years or two and a quarter years ago, we got a lot of questions of why. "Oh, do you really need to do this?" No one questions anymore, but they do ask how. "How do I do that?" In fact, Puneet when I were in a meeting with one of the large government agencies at lunchtime today, and the conversation was about how do we go through the journey, but they no one debated the destination. No one's worried about that destination. The conversion, the simplification of that, the method, the tools, we've invested heavily in that capability. You will hear a lot about the clean core. The clean core is about simplifying a further simplification of that to the environment so that the big, heavy customizations that maybe when you speak to companies, they might say that about SAP that has been built over time, being able to simplify that down. Last but not least is differentiating the innovations. The best example is the sustainability and the innovation, what we built in the Green Ledger. Only being available through the cloud. That's not just a commercial, it's because the innovation was built in the cloud on our technology platform, embedded and enshrined with our S/4HANA Cloud and our ERP cloud capability. It goes without saying that the best way our customers will be able to use and consume the best innovation that SAP brings is through our cloud capabilities. I sometimes get asked about the ecosystem. I noticed Christian presented this before as well. I mentioned earlier about we've got 3x the software partners that we had 12 months earlier. We continue to expand upon that. The reality is the multiplying effect and the importance of the ecosystem from my standpoint on a go-to-market cannot be understated. First of all, it's gotta be a viable revenue stream, profitable revenue stream for these companies. 30,000+ companies wake up every morning, literally hundreds of thousands of employees wake up and SAP is their career. The business model of SAP in the cloud has to match a revenue and a business opportunity for them, because if it's not, they won't invest in it. If they don't invest in it, we lose the power of scale of the ecosystem. The good news is that we have a 7-to-1 ratio, so it's an attractive financial proposition. It is not unique to one model. People think often about, oh, there's the systems integrators, but I'm talking about VARs, OEMs, software partners, you know, the resellers. We got future partnerships where we collaborate together, but we might not even put it into a commercial framework about monetizing first. It's just about opening the opportunity. What you'll see is a continued expansion of our growth where it didn't take a single human being from SAP. It took technology to integrate to allow them to do it, but that gives my business, part of the business, the ability to scale and grow with an efficient model, and I'll come to that in a moment. The other thing is we've seen growth. Christian mentioned it. We are growing faster through our channel and through our partnerships than we're doing ourselves. One of the reason why you've seen such significant revenue growth of SAP over the last two and a half years is frankly because our channel, our partners have stimulated that. They picked up the strategy, they said, "Well, let's use that as a platform to drive our next iteration of growth." We see so much more. When we unlock the power of the Business Technology Platform, look out, because that platform has the essential capability, the content that they need to create new business capability for their customers running on SAP. It's not always gonna be an SAP application, but it will always be powered by SAP's platform. That's the BTP. What can you expect going forward? Well, the first is the expectation of sustained growth. I'm obviously very optimistic about it. That's based on data. That's based on facts of what we've seen, how we measure ourselves, what our future pipeline looks like. We absolutely expect, which is what has led to, at least from a top-line point of view, a confidence not only of our financial ambition, but the strength of the strategy, the way it's manifesting in the market, the way our customers are responding to it, sustained strong growth. It is also growth, not at all costs. I am reminded, and we talk already with Dominik quite quickly as he joined, about efficient growth. That growth being something that for every dollar of revenue we incrementally earn, that we're able to do it in more and more efficient ways. Let me put it in very simplistic terms for you. I don't need more sellers to drive this growth. I might need more ecosystem partners, but they're not on my P&L. I need more software technology partners, but again, they're not on the books of SAP. What I need is to be able to take the existing customer base and the new customer base and be able to attract them or then be able to create more value in an incremental way. So as I showed that chart where I'm able to get 10x from the initial ERP investment, the cost of sale, the cost of acquisition, the lifetime value continues to get more and more efficient because they're leveraging the BTP. They're leveraging their ERP. They're leveraging the same capabilities, and then it's extending. Deal cycles get shorter. We've proven this. Once they're on our cloud ERP, the deal cycles for incremental solutions get shorter. Last but not least is we can scale it through non-human resource means. I've mentioned at the beginning, the digital hubs. We've increased the digital interaction with our customers. One of the things that I've built in the last 12 months is expanding our digital centers to allow customers to be able to expand. They might have a heavy engagement from SAP on the initial purchase, but once they're there, any of the top-ups, the expansions, extra room, extra capacity, do that digitally because honestly, they don't wanna have to deal with a highly interactive exercise. They simply wanna leverage their capability using a platform we call SAP for Me and then be able to expand upon that. I guess my commitment to both the executive board and to our shareholders has been, is that the growth is efficient growth in managing the bottom line as we expand and execute upon the strategy of SAP. The best way I can explain it is in customer terms. This is the customer that is about to come on stage. AMD, and I won't take Hasmukh's thunder, but an incredible company in their own right. A technology innovator in their own right. A long-term, proud SAP customer. A number of years ago, I think it was about 20 years ago, they started the journey with SAP, with their cloud ERP. There was a fair amount of time before that initial purchase on the ERP that they then looked at a standalone basis, SuccessFactors, Ariba and Concur, to solve their human resource, their indirect procurement, and their travel and expense. They then most recently went to RISE, and very successfully moved to RISE. Not only did they move to S/4HANA Cloud and the ERP in the cloud, but they then started to leverage our Business Technology Platform, setting the foundation going forward, already further expanding to IBP. The journey of AMD, and when you hear Hasmukh in a moment, is a journey that literally thousands of customers are either on or they're going on with SAP. To say the story better than I ever could, I'm gonna welcome on stage Hasmukh Ranjan from AMD. Hasmukh, please welcome. Thank you. Good to see you. Thanks for inviting me. Thank you for being here. Hasmukh, you've been with AMD, you've been in the technology industry for a long period of time. Yes, I have. Well, we don't ever declare our age up here. That's not what we need to do. Advanced Micro Devices, maybe for the audience, tell everyone a little bit about who AMD is and how business is going. All right. I think AMD is not... I mean you all hopefully know what we do, but at a industry level, right? This is the most exciting time to be in semi industry. That's how we look at what opportunities are there for AMD and for right reasons. There are three fundamental things going on in industry, is a continued digital transformation that enterprises are on with. You heard many stories here in this forum and many others in the forum downstairs. That continues, right? You add on top of cloud journey, there, that many enterprises are there, and then AI, right? If you combine all those three, there's a semiconductor behind that is powering all these transformations that are going on in every vertical. At AMD, we take pride because we have the broadest set of solutions and computer architectures that address solutions that has solutions right from client to server to graphics and to AI now, right? We feel very good for the opportunity that it brings and our ability to help the industry as they move into this transformation process. We're also a beneficiary of that as a partner of yours, Hasmukh. Of course. You made the decision, long-term customer of SAP, leveraging our technology for in historical purposes. You made the decision to move to RISE with SAP. Why did you do it? Oh, sure. Yeah, I think when we started making this decision, we were path for making decisions, we were also going through the integration of one of the largest semi in this semi industry, right? We acquired Xilinx and that integration was going on around the same time. When we said, "Okay, what are some of the key parameters that we would look at when we would choose a new platform?" I think the way we started... Just to inform this audience, right? We had Xilinx on Oracle and AMD on SAP. That, even that conversation was there that, "Hey, where should we go? Because we have now both platforms." We decided, no, we first have to look at some of the sins of the past, right? The sins of past, what I mean is 25 years of ERP implementation wherever you have, it becomes a very monolithic application to maintain and more importantly to change and scale, right? That was one of the things that we were suffering through because our previous implementation had gone through its own journey of patching and trying to address the needs of newer business. We said, "Okay, no. First is we are not going to be in the business of building the platform. Let's find a partner who can build a platform for us." RISE was a natural choice, and then we would put something there which is modular. Which is not only for a solution for today or next 3 years or 5 years, because we know that. That visibility we have. Line of sight is there. Beyond that, what if AMD gets into something brand-new business, are we structured? Is the platform there to scale? If you take all those things in mind, because this was our single most opportunity to invest. We said, "Okay, no, we'll go to RISE. We'll choose this architecture where ERP is a core foundation, and we'll build on top, hopefully on bottom too, through data lake, Datasphere solutions that you have. Then we'll go from there and see this is a platform for scale, this is a platform for future." That's a long way to answer your question, but I chose that path. I love it. You did way better than I ever could, Hasmukh. I can guarantee you that. You've obviously now leveraging RISE and we were together maybe four or five weeks ago. Yes. It was humbling to hear you talk about the success and, you know, because there was some anxiety moving. Of course. You're also leveraging multiple cloud solutions of SAP, RISE, but also the others that we presented before. Can you tell the audience a little bit about the business benefits? What's the value that is being created? Obviously that's the way we wanna measure our success. What's the tangible benefits that it's brought for you? I think, at different layers, right? At infrastructure layer where my group is, there's one part of work that we don't worry about, which is the maintenance of this platform. This is gone. This is somebody else is doing that for us. A shift we had to do in our workforce is about how do we harvest this platform that we have. That is from IT perspective. Also this agility part of it is there. This transformation, just so that we put that in right context. To this audience, it may not be the important number, but folks downstairs, they will appreciate that more. We did this transformation in about 16 months at this scale. It didn't happen that quickly. Unless we had this platform, I don't think if you had to do the same ERP on-prem to another ERP on-prem, I don't think it would happen in 16 months. A lot of things went right into this implementation. Right from... You start from the infrastructure layer, then you look top-down. That, okay, for my finance customers who are inside, "Hey, can the quarter close process be more optimized? Can we get more reports into our users and in that layer, and give them this entire structure that, 'No, you are there, and you are there from a perspective of self-service.'" That part is there. Then we are building on now, moving on to a supply chain alignment and streamlining. We feel very good that we have a base year where the supply chain alignment in whatever architecture we choose, we have the base to scale and align that as well onto this new platform. The one thing I know, Hasmukh, is that you and the team hold us accountable to those KPIs. Of course. those measures, those value drivers, whether it be the technology or the business. I know you're not done. What's next on your cloud journey? Does it include anything that Christian presented this morning? Yeah, of course. Yeah, it is good to hear and actually at least getting all those ideas reinforced that where we are. As I said right just now, We are in the process of dismantling our Xilinx ERP infrastructure. We'll transition that onto this new platform in next couple of months. The other fun work starts. Largely, we are looking at investments in three different areas. The first one is supply chain. Automation of supply chain and how do we build our stack. I think we, Thomas and his team, we are meeting tomorrow to get started on the, as we stabilize ERP, how do we harvest this investment for supply chain? Next one is AI. We absolutely want AI solutions to be built into our enterprise. We are already working with many other vendors that are working with us, and we want to accelerate our AI deployment, including LLMs and other things that we can integrate into this platform. The final, which is a big one from our perspective, because whenever people talk about AI, in my mind, from IT perspective, all AI applications are about harvesting of data. Unless your data layer is architected correctly, none of these AI applications and stories will materialize. How do I make sure that whatever data strategy we have, we standardize that? How do we look at it and make sure that we put that for future? Those three are our priorities for this year and probably next few years to come. Hasmukh, I could ask you questions for a long time, but I know I've got other presenters. Let me first of all say thank you. Thank you. to you and to Lisa and to the AMD team. I know how important you are as a customer to us, but we also recognize the trust that you place. Everything that you just described, if we could then package that and then replicate it for other companies around the world and learn from this relationship, then our company's gonna be very successful. Thank you so much, Hasmukh. No, I do want to thank you as well, because this journey that we have been through for the last 16, 17 months would not have been there without the involvement of you, Jürgen, and many other execs who have been partners in making sure that whatever hurdles came, we crossed them very, very successfully. Thank you. Very good. Ma'am, as well. Thank you, Hasmukh, everybody. Thank you. Thanks, Hasmukh. Okay. That's it for me. I hope you enjoyed the update, but more importantly, it was insightful around the go-to-market and how that actually manifests with our customers. I now have the privilege to welcome the next speaker. I think the last speaker before we get into Q&A. I would argue the most important speaker, our CFO, Dominik Asam. Welcome, Dominik. Thank you so much. Yeah, good afternoon, everyone. It's my great pleasure to be here, the first time at a financial analyst conference of SAP. It is really amazing to see the energy on site here. Yesterday, we've met a lot of partners, and we talked about the system integrators. This morning, I've been talking to customers. I think the potential of this company is really tremendous. What I wanna achieve today is, of course, walk you through the logic, how that potential is ultimately ending up in our numbers from the top line to the bottom line, all the way down to the cash flow statement. Before I do that, I cannot resist the temptation and add by a customer testimonial. I mean, all of you have been around this company for much longer than I've been here. I've only joined nine weeks ago. I dare say, I have a pretty long experience with the company as a customer. More than 20 years in companies such as Siemens, Infineon, most recently Airbus. Maybe these are not bad companies because they tended to have a large share of their revenue base in world-leading positions, and they have outgrown their competition. I can tell you, they all leveraged the technology of SAP in a very, very meaningful way. That brings me actually into one topic which I deem to be super important for our equity story, which is really the stickiness of the business. It has been mentioned before, but I wanna kind of build on that because I think it's so key here. There is one way you can already measure it, which is simply the way the kind of Buying center for SAP has migrated up the ranks in the hierarchy of these big companies. 20 years ago, it was kind of buried in the IT department. On the executive level, you didn't talk much about it, and it was just supposed to work. It has completely changed. If I think about the big transformation projects I've been involved in, they were dealt with directly with the steering committee, which was made up of executive board. Super important decisions because it's all about the strategy of the company, where we are going, because the entire management team was very much aware of the fact that digitalization is key and that the choices we make now are super important for the future, that these journeys are super difficult to go through. It can be a blessing, it can be a curse, depending on how you look at it, but I always jokingly describe these journeys as open-heart surgery on patients which are still running. This is why, really, the attention from the top management is extremely high. There is a trend basically in every large group over the last years from a situation where these kind of activities were dispersed. There was a buying center for, I don't know, travel expenses somewhere in procurement or Ariba, of course, and there was HR buying some stuff. Of course, the core ERP. They now all bundle this into centers of excellence where there's hundreds of people doing nothing but ERP. Actually, I've been in some of these discussions, how do we bundle all this? Then there's a discussion, do we actually name that SAP Center of Excellence or ERP Center of Excellence? It's really the brand name. By the way, the largest transformation project I've been personally involved in the steering committee up every other week, was called One SAP. I personally asked SAP whether I'm allowed to use that brand name in my internal project. I think it's just showing how much this company is entrenched in these transformation journeys. That's the stickiness. Now, you're all smart financial people, and you can measure stickiness in one measure, which is the ability to pass on inflation. That's a topic where frankly, we've been very, very shy in the past. We've been spoiling our customers by really for years absorbing all the cost increases on our side, and only very recently, we kind of came out beginning of 2023 with a very moderate 3.3% catch up, so to speak, on inflation. I can tell you, we have the possibility to do that, and you will see us doing more of that. It has been something where the company has been extremely reserved because there was always a strong commitment to the long-term commitment to the customer and a strong focus on that. Honestly, I can also cynically say no incentives to do that for the sales force. Second point I wanna kind of come to on that customer journey is the innovation piece. I mentioned these steering committees I've been sitting in, and what I told people is, "I wanna have the SAP standard. I don't wanna have this expensive customization stuff." For every customization that somebody wanted to do in the organization, the steering committee, which was composed of the COO and myself, had to sign off. Why? Because whenever you kind of upgrade the system, you have to bring all that legacy of customization with you. Of course, when you had a special kind of bells and whistles thing in your company, what you want to achieve as a SAP customer is that it becomes part of the standard. Even if you think it's a pretty smart thing and competitors might see it later, because it's so much burden to have this customization in the old world, you try to make it part of the standard. By virtue of that, we greatly benefited from... we, now SAP, I talk about SAP, benefited from the co-innovation with the customers, basically deeply entrenched in optimizing the cloud solution here now. That's the interesting part. I think on the one hand, the need for the customer to use the cloud is exponentially increasing, I think also the real capability, Scott and Christian have talked a lot about the integration capability, is strengthening. It's not a kind of lip service anymore. We can really do it now. Of course, the budgets in IT are always constrained. The pressure to push productivity on companies is higher than ever. You really have to show that value to the customer, and we can do that by bringing innovation and real use cases. There is a flip side, which is the complexity. It's quite complicated in enterprise applications. It's a very, very comprehensive mighty suit of tools, and you have a lot of legacy you deal with. I mean, sometimes people think you decide, you sit in a boardroom and you decide we go this way or that way. The truth is, you are confronted with a huge legacy. That's part of the stickiness. It also means it takes a time to kind of move the customer, and it depends very much on what type of business within the customer you have to move. It's a different story if you move central finance or if you move a kind of factory footprint, which has been grown organically over 20, 30 years with very old systems. This journey takes a time, and you will see that later in my discussion about the cloud gross margin and the move to the private cloud in the first steps. So far from the customer side. The last comment I wanna make on the customer side is a review back on the strategy to move that transformation forward. It was in October 2020, and we all know that it was extremely painful. Christian and team have reduced numbers and pushed it to the right, pushed the numbers to the right. Shock in the capital markets. I can tell you there was a big sigh of relief in the customer base because we needed SAP so much, and we wanted to see this company being future-proof, invest enough money to make the integration really happen. All the good things you've heard about BTP and so forth, they required really serious heavy lifting. Also, yeah, make it future-proof that we can believe in the capability of SAP to bringing the product to the cloud because it's so important to kind of gain velocity and innovation to really use the most recent releases to have a super IT security because we get the patches immediately. To have a flexibility, I mean, if you plan long-term, these are seven, eight-year journeys, you don't want to be boxed into a kind of rigid volume. You wanna be able to breathe in all ways. This is what the cloud brings us. While it's super difficult for large groups to bring it right to the public cloud because of all that kind of specialization, customization, it is the ultimate goal for everyone. Coming to the numbers, I want to start actually with some communication principles. What do we care about? What all of us in the management and investor relations want to care about going forward even more? It's to focus on what matters. For me, that is not only the numbers, but also give you the rationale behind the numbers. I think we have put ourselves a challenge, and let's try how that works today to tell you why it is what it is, not only what it is. Secondly, there's always a debate about what's a good ambition level in guidance. It's a dilemma because on the one hand, we always want to say what we do and do what we say. Whenever we don't hit our numbers, reaction is immediately capital markets merciless. We have to be very careful what we say. On the other hand, we don't want to low ball too much because that is, first of all, guiding you the wrong way. Secondly, it can actually create a very negative self-fulfilling prophecy that the ambition level in the company is not high enough, and that our teams. I mean, it's very useful to show to the teams what the market is expecting. It has to have a certain ambition level. We are fully committed to really find that right balance to give you numbers that we have a certain degree of confidence in, a good degree of confidence in, but we also have to keep a certain ambition level. Last point on the communication, Anthony and the team, I think, have made already great progress towards winning more attention from the U.S. investors. I mean, I've been socialized. My first job was for eight years in a bank called Goldman Sachs. I understand the importance of US capital markets. That doesn't mean that European investors are not important. They're super important. There's so much money here on this side of the pond with so many big, highly sophisticated teams, and there's huge competition for that capital. This is where the battle is won or lost, and we really wanna move up the attention with US investors even more. That's what we want to achieve in terms of investor relations communication. Coming to the numbers. The first point I want to make is that I personally find it quite remarkable and Christian, you still have to tell me how you did that. Kind of you are there October 2020, and you say, "We're going there, 2025." I mean, those of you who know me a little bit, I would not never have dared that. Maybe under these circumstances, there was no alternative. We are actually tracking pretty precisely, amazingly precisely on the key KPIs like the top line. You see the data here, what we said, muted growth, and you see a kind of mild 4% growth. Then the kind of slight flat to slight decline translating into, what is it here, -1% operating profit in 2022. There were some differences, but given what happened in the world with kind of COVID taking longer, Ukraine crisis, inflation, it was really big hits and still it was tracking. Now there are some differences. I mean, there was the discussion about free cash flow, and I will come to that later in detail. There were three major deviations otherwise. Software revenue was lower in the mix, which was because of the license revenue declining faster than anticipated. Support revenue more resilient. I think it's a nice KPI for the stickiness we were just talking about so much, all the three of us. There is a difference in revenue mix. Frankly, we underestimated how fast kind of customers can fully jump to the public cloud. The resistance and the change, the kind of gradient of the transformation process was simply too high and there's a lot of now private cloud deals. As I mentioned before, that doesn't mean they will not go to the public cloud. Actually, it's not black and white. Some large industrial companies put some stuff already on the public cloud where they can. They always want to go there and where it's possible they do. That means you have to really conform your own processes to that template. That's what has changed. I would say so far so good. I think what has also changed now when we give that ambition is that there is a different level of certainty on that. I mean, back in 2020, there were some very fundamental question marks over the strategy and the numbers in consequence. Well, will SAP be really able to kind of go on that journey to the cloud? Will the customers follow? Will the hyperscalers accept it? They will become suppliers, basically. Will they accept that? How about the systems integrator? It's a tricky topic. I mean, we talked about this kind of huge money spent on system integration and the little money on the software, and they make a lot of money. The worse the complexity for the customer, the better for them. Now we say we are going to simplify, standardize. It's not really great for them. I think the biggest change till today is that these major Damocles swords are actually gone. We're much clearer sight on the numbers here. Now, let's look at the numbers. You've seen them. That's the press release we have issued just a good hour ago. There are two topics basically to look at. One is the Qualtrics divestiture. What we've done is we've looked at what was embarked in the ambition back then, and that was still the plan for Qualtrics, and we've backed that out. We have looked at all the rest, which is then a kind of organic update. The inorganic is the divestiture, organic is what has happened inside. Yes, I understand the US dollar has been stronger. That's clear. I find it interesting that people in that context always talk about the US dollar. What they don't talk about is Ukraine, kind of low to mid triple-digit EUR million hit, just absorbed. Even more importantly, I mentioned the inflation topic. I mean, if you take the difference between revenues, EUR 37.5, and operating profit, EUR 11.5, well, there is EUR 26 billion of cost in between, which was strongly affected. Yes, we've been kind of taking some first measures in early 2023, but there was a full year of 2022, where basically we were hit by the higher cost and had to absorb that somehow. I think that just in the context is not only the US dollar, it's an update for all of that, and this is why we just lumped that together into that bridge here. With the numbers you see here for cloud revenue, we are actually upgrading on that continuing operations part with all the factors I mentioned by EUR 1.5 billion to say we can do at least EUR 21.5 billion. For total revenues, we actually go even higher, and that's simply a reflection of the stronger retention on the support maintenance, the lower kind of decay on that. Stickiness is very good. That is a very, I think, decent raise on the numbers. That comes with a certain challenge, of course, on the margin side, and I'll come to that later. Now, cloud gross profit. On the cloud gross profit, we see a challenge in the way that we have that different mix. I mentioned the higher share of private cloud deals. They come at a lower gross margin. I would argue that our private cloud business is generating best-in-class margins. The public cloud margins are higher. By the way, I give you some hints later on the different segments we have. But that's basically explaining why it's only half a billion EUR here. On operating profit, also half a billion EUR. You might say, "Well, but you got more revenues from the kind of maintenance, so where is that going?" Christian has mentioned it. We are investing heavily. We wanna really drive growth into the future, and we wanna make sure that the growth is not stopping in 25. I mean, somehow with this 25 discussion, we are kind of looking at this almost like an endpoint, but it's not the endpoint, it's the start of it. Mathematically, of course, it's much easier to accelerate when you have already the lion's share of the decline on the license revenues behind you, and you can then purely grow or predominantly grow on the cloud business. In the context of the cloud gross profit, what we wanna do is really say, what we wanna deliver is an absolute amount of cloud gross profit. That is what drives, in the end, profit and cash flow. The margin, as a consequence, is slightly lower than what was previously guided, but the absolute euros is what ultimately should drive the variation, and that's kind of half a billion EUR up. Free cash flow. That was, I know, a little bit of a kind of discussion on topics, how realistic is it? We had also some discussion around end of last year with, I think it was EUR 4.3 billion, if I remember correctly. Now we wanna go up to EUR 7.5 billion. Given that we had planned EUR 300 million out of Qualtrics, that would leave you with a EUR 200 million downgrade, so to speak. We thought very long and very hard about that back and forth. Of course, there's always a temptation to say, "Look, there's always a way to find some money." We really wanna have a robust view on what we can really achieve. I will go in great detail later on to show you how we have triangulated what's the right number and why that's the right number. For me, it's more a fundamental question about what's the cash conversion model of this company when you strip out all the noise of phasing topics with payments over the turn, like stock-based compensation volatility. You know, we still had a huge bunch of cash settled stock-based compensation. When the share price goes up and down, cash flow does funky things. It was difficult on the cash side. That topic we are also addressing because we've now discontinued in many areas, the cash settled stock-based compensations. You're not hit by this volatility anymore. The most important factor of that is we have to recognize that aggressive growth in the cloud is, it does actually absorb a little bit of cash. Not much, but given the magnitude of the growth we're going to show, it doesn't come for free. There needs to be some investment. Honestly, I mean, pick a number. I come to that later. If you take EUR 0.10 on a euro of growth on the cloud and you have the typical cloud gross margin, the payback is quite quick. I would be surprised if any one of you told me you should not do that. I don't want to be handcuffed on the growth. If we can generate that cloud growth, we should go for that. I want to also make one comment. We are not fans of a long-term guidance because the further you move out in the future, the more ambiguity is out there. There was a guidance 25, an ambition 25. We've updated this now. We will, of course, as usual in February, give you a look into 2024. Then you will have 2 years of a hard guidance more or less. That's pretty unique. In the long run, we are not going to go give long-term guidance anymore because there's too much ambiguity. There are a couple of very important reasons for that. Not only just statistically, the further you move out, the more opaque the view becomes. There's also 1 thing which is we don't want to be cornered for any event, including competitor reaction. I always bring that kind of trauma, was actually good for the company I worked for when I talk about the story between Airbus and Boeing, where basically Airbus launched an aircraft and Boeing didn't react the right way because they were kind of cornered from a capital markets point of view. They couldn't do. They were handcuffed. We should never, ever be in that position. That first has to be the right strategy, the right business policy, and it's very hard to anticipate what competitor is doing what M&A, and what does it mean for our product portfolio. This is why I think it's prudent to keep that flexibility. Of course, we are fully committed to kind of draw the line and extrapolate on the trajectory we're giving you. Now, a little bit deep dive on the cloud revenue first. you know, there is kind of 3 buckets of cloud revenues we have. There is the software as a service, there is the platform as a service, and the infrastructure as a service. The good news is that on the S/4HANA, that's clearly the workhorse. I mean, that's the thing that Christian explained is the basis of everything, and it's growing fastest. The thing that is kind of seeding future growth is growing fastest. That gets us so excited about it. On the SaaS, the other SaaS lines of business, as we call them, we want to achieve a double-digit growth. solid growth, but of course, not as dramatic on, as on S/4HANA, and that means we have a very solid contribution also on the margin side here. On the platform as a service, we have massive growth. We have a revenue base of EUR 1.5 billion in 2022. All of that is of course there to drive the integration and development as explained before. This will expand very, very fast. It will actually be the growth leader in our portfolio. The beauty is, and this is has the highest margin in the whole offering. We're going to de-emphasize infrastructure as a service. It's asset heavy. We talked about free cash flow. It's not one of the things we want to spend a lot of money on, and we will ramp down there. All of that taken together means that by 2025, with what we foresee, we should have about 60% of the revenues on the cloud side growing fast. Basically, the declining license revenues will matter less. This is how, just mathematically, if you keep that strong momentum on growth on the cloud, you will see an acceleration between the CAGR we now guide from 2022 through 2025. You can also take the guidance 2023 to 2025. That gives you what we are thinking in the coming years. We think that beyond 2025 will accelerate, and that will require a little bit of capital, and this is kind of explaining the couple hundred million EUR on the free cash flow side. With that growth, we think we can double the cloud gross profit because of the margin profiles of the different sub-segments, so to speak, of the cloud business, with a strong platform as a service business, really boosting profitability. With the cost side also improving, you know, the cloud, the next-gen cloud delivery project is not fully completed. We are currently about to complete it, we got some good benefits out of that. You will see that also gradually over the course of this year, being helpful for our gross margin. Doubling that pie, which is a 27% CAGR, over that three-year period. On operating profit, quite straightforward. Well, we take the EUR 8 billion we have now. We add that increment of cloud gross profit I've just described on the prior page. Then we have to say, how much do we lose on on-prem? Of course, a certain dip there. Then there's question about how will the profitability on the service portfolio evolve. You've seen us grow quite fast on services with a pretty healthy margin. It's not a strategy per se, but we really wanna make sure that the transition journey of our customers is well accompanied. We're kind of inserting black belt teams into the customer projects we have, and we need to lead by example, so to speak. We need a lot of support from our system integrators to kind of absorb these 25,000 customers still being there on not on the cloud yet, so being on-prem. That will be some heavy lifting, but we try to contain that because we are very, very much aware of the fact that it is not the business with the highest margins we have, and we really wanna emphasize on the IP creation on these more scalable businesses. Now, on the OpEx, thank you, Scott, for your strong commitment to delivering super high operating leverage out of selling and marketing expenses. That leaves a little bit more for R&D to really boost the product portfolio from an R&D side further. G&A, it's always tricky. I mean, I hated that flood of regulation hitting us and other companies. It was just a burden on the company. Now, actually, I'm a little bit more ambiguous at SAP because we can also make some nice money with it. If you think about big opportunities like Green Ledger and so forth, and also on the compliance side. I can tell you compliance is a big driver of some rollouts for SAP. I must say that when the budgets were tight for the SAP rollouts, and I could put a label on this, we need that for compliance, it was always very helpful. Regulatory burden normally it's pushing up GA, and you cannot get to full kind of operating leverage. On the other hand, we are also seeing some benefits on our growth drivers. 13% operating profit up. This is a super important slide. I mentioned the volatility in free cash flow and how notoriously difficult it is to forecast and predict and kind of get the arms around it. I think it will be better. With the new cloud model, we can, in the future, become more robust. We have more recurring revenues. We'll of course, focus much more on free cash flow. Frankly, also the kind of prior perception of the company was that investors don't care so much. Some things happened that were a wake-up call for us to say they do care. Honestly, I always cared about it. Since I had my kind of corporate finance one-on-one in business school, I do discounted cash flow models. Actually, I actually did a small test. I asked the team to say, "Let's get a very thorough analysis of our peer group. Let's look at their free cash flow in 2025 and the cash flow growth between 2023 and 2025." Actually, that correlation between growth of cash and the kind of free cash flow yield is better than any other multiple. I do sense you care about free cash flow, and this is what we're going to put our emphasis on all the way to also discussing incentives we need to put around it. Here, we want to achieve a 65% cash conversion as compared to non-IFRS operating profit. That would be imply a 20% increase, so a higher increase than on operating profit. We'll need to do some work on the cash side. I want to also say that is, in reality, an even higher growth of the real underlying free cash flow. You remember Luka Mucic told you in the EUR 4.3 billion last year, there was a significant increase in factoring volume, which of course, is not really underlying cash performance. The real underlying cash flow performance is actually improving more. We think this is what we can achieve and commit to. Because it's such a critical parameter and because it's the only one where we had a slight kind of downward adjustment, I really wanted to get a good degree of confidence. The way we did it is we said, "Well, it's not rocket science. You just do the bridges from the current performance into the future with all the puts and takes you know." They are quite obvious. It's the operating profit that is added. It's the planning, the tax planning. It is the payments for stock-based compensation. That's a little bit difficult to plan because it really does depend on the performance of the company on the share price, so that can change a little bit. Then there's a little bit of working capital requirement for the growth. Even if you improve on stuff like payment terms, we need some working capital to grow. The other thing you can do to plausi-check is you start from the non-IFRS operating profit and do a cash conversion logic. I mean, what is in between profit and cash? The good news is it's really pretty reasonably triangulating. That's how we kind of come up with this view on the free cash flow, come 2025. The most interesting question, what happens with the cash? My first statement is we have a single A rating, and we like that rating. I will personally try to defend that rating like my eyeball, because I think a company of the size of SAP with the importance to our customers, there can never, ever be any doubt on the creditworthiness. If you're expecting from me some fancy kind of leveraging up the company and boosting earnings per share by that won't happen. We think that our cash generation and profit generation capability is so strong that we have actually wiggling room, even if we want to keep some firepower for mergers and acquisitions. It's not something we need to do because our portfolio is great, as I hope we could show to you in the prior presentations. Of course, if there is a good strategic fit and if there is a reasonable financial rationale to accelerate our development by tuck-ins, well, that's something we should preserve some flexibility for. In this fast-moving market, you want to keep a certain firepower. We have divested Qualtrics. That was a pretty healthy, I think transaction. I always say, it was a really funny calculation. I took the liberty to say, "Okay, I look at kind of Qualtrics, and then I look at continuous operation SAP, and what would actually happen if you got the same valuation multiple on continued SAP than on Qualtrics?" Do the math. You'll be surprised how high the numbers are. It was a really good divestiture. Now we have the proceeds. Honestly, even if you want to preserve a reasonable cushion for strategic moves, there is no good use of all the proceeds. We said the lion's share of the proceeds will return over a reasonable period of time, which we said will be through end of 25 to the shareholders, because that's where they are in the pecking order of returns to our shareholders reasonably invested. Just putting them in a bank account doesn't give us much return. We don't need the money because we have so much flexibility anyhow. This was the decision we've taken. Thanks for the supervisory board for supporting us on that one. There's another effect. I mentioned this whole discussion about stock-based compensation. We clearly understand that issuing shares is not something that has no consequences for shareholders. It dilutes the profits. Of course, we are strongly committed to making sure that that dilution doesn't hit you. We think there's a big opportunity in growing cash flow, in growing profits, and we wanna and see you as the shareholders harvest as much of that as possible by kind of not allowing that dilution to happen. It's a very clear commitment to capital discipline and making sure that there are returns. Now, short wrap-up. I hope I could cover the relevant points from a shareholder perspective. I'm sure you have many more questions after we finish and after the pause. Yes, there are some risks, but there are also great opportunities. I think it's a pretty balanced view on the world. I really do believe that the trend is our friend, and come 2025 and beyond, the best is yet to come. We have gone through a deep J curve. I think that J curve has paid out already quite handsomely. We have still that huge base of recurring ratable support revenue that can be turned at higher factors that are kind of 2x-3x factors into cloud revenue. Yes, there is a little bit of a shift in the mix towards more private cloud, but the fundamental, I would always say, almost say law of gravity, that the ultimate goal is the public cloud is stronger than ever. For me, it's only a question of when and not of if, when that will happen. I see it also from my previous experience. Whenever we had an opportunity to have some smaller instances somewhere, today, every CIO would say, "Let's move that straight away to the public cloud." We also have great customers which have super heavy footprint, and that needs to be transitioned over time. The ecosystem is super strong. I mean, we've not talked about much on the financial model, but all these partners, it's not that we give these partners access to our platform and to our systems and they go to market for free. They pay serious money for that, and that's a thriving ecosystem, as Christian mentioned, growing faster than ourselves. We have a super portfolio to cross-sell and up-sell, and this is what is really underpinning the focus on the acceleration of the growth post 2025. These were my comments. With that, I think we are now going into a short break, a 5-minute bio break, and then we can come back and then enlarged group of executive board members will be available for your questions. Thank you so much. All right. We continue with the program, and we have most of the executive board of SAP with us. Welcome, Sabine. Welcome, Julia. Thanks for joining us. We'll have two microphones here in the room. We'll take questions in the room. I'm sure you reflected already on what you heard, and I see some hand raised already. The only ask from my side would be if you could stand up when you have a mic and state your name and your institution eventually. Maybe as an icebreaker before we take the first question in the room, there is a lot of chatter about demand in that environment. Maybe, Scott, I start with you, and then we'll take questions from the room. How do you see the demand environment and the pipeline right now, at least what you see and what you hear from customers here on the show floor? Yeah, sure. I'm happy to. Welcome, Julia and Sabine. It's great to join us. Hey, more questions to you. To answer the question, Anthony, we track pipeline and obviously we're not immune to what's happening around the world and the different macroeconomic changes and conditions. To give some, I guess, encouraging facts for us, our pipeline is stronger than what it was last year at this time of year and stronger than it's ever been, given the size of business and the growth aspirations we have. Probably even more importantly in terms of the strength of the pipeline is the speed. The velocity, we have seen no decline. In fact, quite the opposite. We've seen an acceleration of time to deals, time to, compared to what we often get questions. I think that comes back to the fact that the market are not doing much speculative buying. IT buyers are not saying, "Oh, I might try that out." They're making sure that their investments are ones that they can put quantifiable returns on that address the fundamental needs of their business. When they decide, they move. I guess the good news is, and it's consistent around the world, we don't see. We might have some ups and downs in particular countries, but around the world, very strong, very consistent, whether it be in Americas, Europe or in Asia Pacific and Japan. Very good. Thank you. maybe we'll take the first question. Mo, on the first row, if you can stand up. Thank you. Great. Thank you for the presentations. It's Mohammed Moawalla from Goldman Sachs. I had two. The first one was just maybe for Dominik. As you look at some of the margin levers and in particular, the costs, could you give us a sense of the sort of the R&D investments you're making, how much of this is around sort of new innovation, and how much are you perhaps stepping up on kind of the core S/4HANA side to get that sort of functionality of the product on the kind of native cloud side? Obviously some of the benefits you're getting on sales and marketing leverage are getting reinvested and what your kind of philosophy is around that in general, that if you sort of start to see revenue upside between reinvesting back in the business versus dropping it through. The second was a kinda more general high-level question. A few weeks ago, IBM talked about 30% of back office jobs potentially sort of going away from AI. I'm curious, Christian, from your perspective, given, you know, the perception historically has been of SAP as a back office company, obviously the product set is much broader, how do you sort of navigate, do you navigate that, and what are the opportunities you see? Thank you. Do you wanna start? You go first. I go first then. I mean, on the R&D side, I think I would be much better positioned to answer the question, having gone through one first planning cycle, bottom up. I can give you a couple of headlines. I would say, first of all, we have to make sure that where we wanna be present, we really are not falling behind because we are too constrained on R&D. I really think in the high-tech industry, you either do it full steam ahead or not at all. It's more about prioritization than trying to be penny smart and kind of in a lawnmower approach, cutting everything. I do see that should actually be the OpEx block where if I would accept less operating leverage, that would be there, because I think as we grow the company, we wanna accelerate further, spin the flywheel. Do we need to grow it as fast as revenues? Maybe not. There is maybe a little bit of room there. In general terms, it's kind of the OpEx blocks, the one I like most, so to speak. Yeah. Maybe just a word on the R&D. I guess one important information is, we waited for this moment since now 3.5 years, when we started the stack of S/4HANA. We just did the codeline split between the public cloud and the rest of the S/4HANA ERP deployment models because we reached feature parity for our S/4HANA on-prem versus ECC. When you look into the stack, I mean, there's a lot of business logic built in the ECC. In the S4 on-prem, you have a lot of modules with a lot of dependencies. When you are coding new stuff in such a stack, you always have to test, are still all the integration scenarios working, which is really time intensive. Thomas, Jan, and team, they can now move much, much faster. In the cloud native world, in coding new features, there's a much better test automation built in. The put it on the productivity, especially in the core, will significantly increase. Of course, when you look into the harmonization we did with the BTP, I mean, there's much less work you now need on the life cycle management, et cetera. Yes, while we of course wanna innovate and we wanna be in each category, we wanna be the clear market winner, I guess there is definitely a very good chance that we don't need to grow on the in line with total revenue. On the other question, you know, for me, it's, I guess, very important when you look at the leverage and the growth potential of the company, I mean, also for 2025 and beyond and AI, of course, this will have a tremendous impact. I mean, as I mentioned before, my scenario is that we will completely change the way how end users collaborate with our software, and that you don't need, you know, 20 analysts to get something out of the ERP and something in a meaningful recommendation for the executives in the company. Then inside the company, when you look already now what we are doing in building our own LLMs, large language models for support for the ticketing. We have each day over 200,000 tickets, which are just, you know, actually, you know, about usability, about certain content, where we definitely believe that AI can solve their tickets going forward, that we can come up with a much higher automation level for certain tickets. On the software side itself, of course, it will have a tremendous impact. The patching, the cyber, the tests we do today and, you know, and with human beings, they can be heavily automated. I was with Arvind in this interview, actually. I'm actually very confident that you're also gonna see in R&D and support, in G&A, AI will help us to, for sure, not grow, you know, in line with revenue, but much more under proportional. Now while we are heavily, you know, while we are see significant growth, now do we reduce the workforce? That's a different question. What you can definitely expect, that we don't have to grow, our headcount in line with our total revenue. Thank you. James, maybe you are the next question in front. Yeah. Thank you. That's great. Thanks very much. It's James Goodman from Barclays. Thank you. A couple from me. Firstly then on the cloud margins. Christian, I think you mentioned in your presentation that you often get asked about it, so let me ask you again on the cloud trajectory gross margin. I think that you've talked a lot over past quarters about the upside that the business has been seeing with RISE with SAP. You've been also talking as a management team about some of the margin implications of that. I think net, the idea was that on an underlying basis, we would see more absolute cloud gross profit. There is a little bit more gross profit today, but, you know, most of that's sort of in the roundings with FX. You know, the question is: Have you seen even more demand for the single tenant or the private cloud implementation? Is that what we're seeing here, a reflection of an even greater proportion of that? That's the first question. Second question is, just on stock-based compensation, if I can ask specifically there. As you said, Dominik, it's a real cost to the business. It's something that's not reflected in the adjusted EBIT guidance that we have for 2025. Previously, the business talked, I think, to a EUR 3 billion level for stock-based compensation for 2025. Qualtrics is now gone. Can you commit to a stock-based compensation level within that 2025 guidance or not at this stage? Thank you. I can start on the gross margin. I mean, when we do a like-for-like comparison of our RISE business case back then with what, you know, happened so far, you're gonna see that for sure we got positively surprised that more large enterprise customers really started their journey with RISE, as they with RISE with SAP. That changed the mix between the private and the public cloud. If you talk to the Siemens, the IBMs, the Microsofts, the Schneider Electrics. Schneider Electric is a good example. We moved them to the private cloud. They already have a very clear plan worked out with our architects, with our business process consultants, with Signavio on how to be 100% in the S/4HANA Public Cloud version in four years from now. Today they're coming in with a 61% margin. They will come in at a massive scale with an 80%+ margin in four or five years ago. To Dominik's point, every customer has the same goal. It's about the time until you get there. Then, I mean, then you also have to see when you won and Microsoft or a company like Samsung in the private cloud, is will they ever end up in a multi-tenant environment? I mean, the point is they will reach over time so much scale also in a single tenant environment. We are having a lot of ideas for further automation. Frankly spoken, when you would ask Peter Bauer, our head of private cloud, you know, what was his main task in the last three years? Coping with this incredible growth and getting all of these customers live. This is the first goal. Now it's the time around automation, around, you know, how can we automate the onboarding? How can we automate, you know, the one-ing, the one side of the deployment model. There is enough potential to even, you know, further automate our private cloud deployment model. Last but not least, on the public cloud itself, One Strike and Cloud Harmonization finished. 95% finished, but we're on a very good track. Again, there, I mean, when you look into what we are doing with the hyperscalers on elasticity of the database, there's incredible potential also for further TCO improvements there. Scale-out scenarios, which we have never dreamed of three years back, are now possible. I'm really amazed by our engineering team, because when I see this, you know, they actually have very good ideas, where even the hyperscalers say, "Hey, really, really good what you're doing with HANA Cloud." I see the excitement from the applications. You know, usually when they have to adapt new technology, it's not so easy to gain their attention always so to be the front runner. On HANA Cloud, everyone wants to be the front runner, which is a very good signal and actually one of the main TCO improvement levers we have also in the years to come. Stock-based compensation in terms of financial implications, you'll see EUR 2 billion roundabouts this year. This is what we currently plan, ±. Well, depending on the volatility of the share price, because we still have a significant part of that, which is cash settled. We only have the volatility from the share price on that cash settled portion, not on the equity settled. Over time, that cash settled part will go down significantly, so we have more stability. In terms of trending, I think we've seen the kind of lion share of the lift by now. The rest should be more incremental, if any increase. You'll not, certainly not see EUR 3 billion in 2025, but a much lower number than that. On the cash side, that's where we still have a non-significant volatility from the kind of mark-to-market, because we will need to pay out the cash settled part. While there is already a reduction in the kind of number of shares which are cash settled in 2025, we will benefit from that. You've seen it in my bridge on the cash flow statement. If you eyeball it, a kind of half a billion-ish type of tailwind from that, after Qualtrics being out, and it's all on continuing operations. We still might have some volatility, so it's a little bit more sensitive still on the cash side than on the P&L side. All right. Thank you. I see Adam Wood in the back. If you can reach it. Yeah. Thank you. Thank you. Yes. Adam Wood from Morgan Stanley. Thanks for taking the question. My two, first of all was around data and particularly around the SAP Datasphere announcement this morning. Could you help us a little bit with where you want to draw the line between helping customers being able to extract data from SAP systems, put them in other locations to extract value, but then protecting SAP's sort of own IP and value, that you don't want to become a kind of isolated system of record, and you want to be the place where data analytics, and innovation happens on your platform, and where you're willing to draw that line with the partners? Maybe secondly, just on the capital return situation. I think on our numbers, even with a EUR 5 billion buyback, you could be at EUR 10 billion of net cash in 2025. Is that ideally where you want the company to be, to be running a permanent net cash position rather than running some leverage? Should we read anything into the size of that cash position in terms of the ambitions for acquisitions that the company might have? Thank you. On the monetization of these partnerships, especially on the data side, I want to give you two examples. Scott, Julia, please feel free to comment. I mean, take Google. With Google has the clear commitment that on the analytics, SAP is set in stone. They actually incentivize now their sellers as well to push SAP Analytics Cloud, to push planning, to push reporting with SAP. We also, in a pure data lake perspective, we're actually monetizing the API. For example, when there's data leaving SAP into Databricks, there's a metering service where we can then monetize and get a certain revenue share from Databricks back. UiPath, to give you another example. The clear prerequisite was that when we are going to use your RPA chatbots, we actually want you to integrate via BTP. The landing point has to always BTP. Adam, this commercial system art, and it's very important how you construct that. We put a lot of efforts in that we can commercialize it in the right way and that we either push the platform, that we monetize the data, or actually we put actually also our analytics layer across our joint Google and SAP customer base. Julia. What I think, maybe less commercials, more from the product architecture, right? The business context is the really valuable part. That's what SAP DataSphere helps enable and maintains control over, right? You can have data sitting lots of places, but if you don't know what it means, then it's not very useful, right? So much time with data right now is just people trying to reconstruct context that they've sucked out of an SAP system. Now with SAP DataSphere, we have that context that we manage, we can keep that control, and then it can be set rendering across data in lots of places or centralized, but it keeps the context intact within our solution. Said beautifully. I couldn't add to it. You want M&A, and then I have something on the capital structure. Yeah. On the M&A, I mean, the good pieces, the good news is, looking at all of the innovations and I feel the product in a much stronger shape than four years back, there's no need to acquire revenue. What we are looking for is, here and there are maybe white spots in the portfolio and can we do some tuck-ins. Take for example, Signavio. It's a great acquisition, both from a product as well as cultural. I wanna underscore cultural perspective. This is definitely also a thing what we are having a much closer look on going forward. Whenever we're gonna acquire, what is the cultural fit of such a company? Of course then with the cross-sell and the cost synergies, there must be a much higher level, which then, for example, what we have seen with Qualtrics. Maybe on the capital structure, I think that kind of single A rating is where we need to be. Of course, when we execute that plan, our debt capacity will further increase because we are going to increase cash flow massively, as I've shown 20% CAGR. That's what basically determines how much liquidity we need to carry. I would argue that if we had a EUR 10 billion net cash position in 2025, we would have upward pressure on the rating. Do we need to be higher than our single A category? No. Let's not skin that bear before we've killed it. There is potential opportunities on the M&A side. Let's cross that bridge when we get there. Very good. Thank you. I see Mark raising his hand. Thank you very much. Mark Moerdler, Bernstein. Thank you very much. Appreciate, Dominik, all the work you obviously have done in a short period of time on the questions of the modeling and the margin, et cetera, et cetera. I wanna drill in first on that and then have a follow-up question. You're adding now into the model a lot more on-prem than you originally expected, and a lot more of the maintenance, the support, which is historically a higher margin business. It doesn't look like, and maybe I'm missing it, that that's flowing through. Or is it just simply being absorbed by the expectation of a lot more R&D within the margin estimates? Discussing specifically a little bit more on that mix of more on-premise, how does that position you, especially given the comment you made, in terms of your expectation of how much is still left to move post 2025? Would argue there's a lot of revenue there that's maintenance that you could continue to move either very fast or over an extended period of time. How should we think about that post? Thank you. I think on the margin side, you basically hit the nail on the head. Yes, we get more incremental support revenues, maintenance. There is also higher costs. Yes, there's a higher OpEx number embarked in these plans than, yeah. That is the bridge down to the 11.5 we've given. Mark, maybe just to add what also Dominik said early on, we were pretty conservative from the way how we responding to the higher inflation from a price perspective. You know, we definitely wanna leverage here and there our pricing power much more. Second, I guess it's also very important, don't forget when we put out this guidance two and a half years back, Russia was a highly profitable market and there were some other factors in which I would say hit us on the bottom line more than necessarily on the top line. Yeah, let's, it was the right decision, but from a bottom line perspective, of course it impacted, you know, the company in a pretty negative way. Scott, you want to make a comment? Yeah, I can comment on the demand profile and what we can see from the support revenues post 2025. A couple of comments. First of all, I think we've spoken about this before, a lot of the contracts that we have signed, particularly with RISE, but not exclusively, are multi-year, 3 years, but often 4, 5, 6 years in duration. Whilst your current cloud backlog that we report upon is a 12-month view, when you look at the actual TCV, the total contract value, it is much more significant in growth, but it's also in those out years. Which means whilst the support revenue is clearly very strong, and Dominik spoke about that, we've got a clear roadmap of how that transitions to cloud over a period of time, and that continues. The second is, I agree, and we agree, we see a significant number. There is still thousands of companies that are planning to move that hopefully we can accelerate the movement. Even, no matter what the timeline is, that they're, they've got a journey to move to the cloud with SAP. That gives both a potential not only of cloud ERP, but then as I explained before, them being able to surround it with the other capabilities and do so on an expansion on a higher margin basis as well. It certainly is a nice position to be in from when I'm responsible for the revenue line, that I've got such a large captive install base and a loyal customer base, that is wanting to move, but they need to map their journey rather than only acquiring new market, which we're doing as well. Michael? Yeah, thanks. Michael Briest at UBS. T-two from me. The first one is on cloud profitability. I think initially the plan was that with the sort of new infrastructure, you'd be exiting the year at a 75% gross margin. Looking at the targets today, it's gonna be 76% in 3 years. Is that 75% still in place, or with the mix shift, will it be less? Well, the answer is yes. Yes, if you do apples to apples, including Qualtrics. No, if you exclude Qualtrics, then you have to deduct the kind of dilutive effect of taking the higher gross margin of Qualtrics out, and then you're down to 1.5% less. If you actually look at the progression of the cloud gross margin, it's actually pretty linear. You see, even with the 76% you mentioned now in 2025, it's a pretty steady increase over the years. Christian, I think you mentioned a 61% gross margin. Was that specific? I doubt it was specific to Schneider. Was that a RISE proxy profitability we should be thinking about? I mean, the, when you look at the private cloud margin today, as of today, you're gonna see this is, slightly above the sixties. You know, looking at our plans and the levers we still have, there is still room, there's still further upside. Okay. My second question, Dominik, was to you, just I guess an external perspective on the cash culture at SAP. The executive board is not incentivized on it at the moment. Is that something that the new chairman might change? Well, well. Do you think within the go-to-market and other things, for instance, it'll be different? Well, in my prior company, I was incentivized on cash. If in a COVID crisis you burn $4.4 billion a quarter, you think about cash much harder than if you are steadily very positive. I do agree that if the feedback and the input from investors is what makes financially a lot of sense, that cash is king in terms of also valuation, it's clearly something we have to bring to the fore more strongly, very clearly. Okay. Thank you. Johannes, please go ahead. Yeah, thanks. Johannes Schaller from Deutsche Bank. Christian, you talked about the infrastructure harmonization and how that brought TCO down quite substantially. Can you maybe give us a little bit more detail, maybe even a few numbers, kind of where you are now after you've completed everything? Put that a little bit also in the context of how you compare your own solutions TCO versus what competitors have in the market. For Dominik, question on disclosure. I mean, we heard Scott talk about the cross-selling potential of all these solutions on top of ERP. When you speak to clients, you actually kind of hear to investors, you know, "Yeah, we believe that," but we actually don't really see it in the numbers. We don't really know how well a business like Ariba, for example, is doing. I mean, Luka's T-shirt slides are gone now. Dominik, I think in your last year at Infineon, you actually introduced a lot of granularity in the very detailed breakdown of revenues. Just how do you think about kind of disclosure from that perspective? Is there maybe more we can expect over time? Thank you. Yeah. When you look into the public cloud margin profiles of our portfolio, to give you a bit of insight, I mean, BTP is state-of-the-art. it's one that's an extremely high margin, which is good because we need to deploy the platform in almost every country. The hyperscalers want it, they are all investing into further automation. SAP S/4HANA Public Cloud, good, very good. native cloud solution. You see the scale. You see even that we have much higher economies of scale in the future already today. very healthy gross margins. The rest, SAP SuccessFactors finishing onestrike right now. SAP SuccessFactors, and I have a good view on that stack, was a bit fragmented and we've fixed and harmonized a lot. After that, you're gonna see that SAP SuccessFactors can absolute compete with the Workday and the Cornerstone OnDemand and the like. On the public cloud, actually, we are absolutely state-of-the-art. Let's also not forget with our, still our remaining infrastructure as a service business with the private cloud, if you compare us against Oracle, actually we are looking today already pretty good when you look at the overall cloud gross margin, Oracle against SAP. Again, there are very solid plans on how to further improve the cloud gross margin, both on the public as well as on the private cloud. On the granularity, on the revenue side, I mean, I think you cannot compare these industries because really if you sell a semiconductor, there is a price on that semiconductor. You have a very clear revenue for that. The beauty of our portfolio is that we can give that comprehensive portfolio. You actually have a different challenge right now. We really have to think about how can we leverage that cross-selling opportunity in a more bundled way. We actually see the boundaries between the lines of business blurring. I have to really disappoint you on giving you more transparency, because it's frankly not what is going to happen in terms of the business model. The business model is kind of almost like a lump sum at some... That's where customers want to go to, have more flexibility, and that's unique to SAP that we can offer some of that flexibility. It's not always there yet, but that's the trend we are seeing. We cannot give that type of granularity. Right now we actually do give a lot of granularity with SAP S/4HANA, with PaaS, SaaS, and so forth. It's getting more and more difficult to satisfy the accounting standards if we want to give more flexibility to the customers, which is a competitive edge we have. Maybe, taking advantage of having Sabine and Scott with us, maybe on SAP SuccessFactors, we get a lot of questions from investors, how we are doing on that front. Christian alluded to that. We got some great announcement today. What are you hearing from the CHROs, and what do you see also across the globe, maybe, Scott, across the landscape in terms of demand for our solutions in that space? You start. Sure. Very happy to start. Looking at SuccessFactors, and actually generative AI and the announcements we made today, I think there's lots of excitement. By the way, even before the announcements, it's just very clear when you look at the role of generative AI in the HR side of the house, I mean, you commented on it earlier. I mean, that's amazing productivity opportunity for many sort of day-to-day, sort of tedious tasks in a function that essentially needs to scale and really need to double down on the strategic issues of supporting the business, around, you know, the right talent, around sort of driving the right diversity inclusive behaviors, around really getting the right development journeys in place, getting the upskilling going, and the strategic workforce planning. You need to take all of those tedious tasks around job descriptions, around, you know, sorting through resumes, you know, calling, you know, potential candidates, trying, like, at scale, at mass, trying to get them interested in the company. Out of this, you gotta get better. You have to automate, and therefore, loads of excitement on the CHRO side. I think everybody is facing the same issues there. I think, you know, we're actually in a pretty unique position. By the way, one of the things we always hear, of course, is, you know, where customers have had, like, a long-standing SuccessFactors installation, they kinda like go like, "Well, sort of the interface, you know, user experience might not be that nice." I think this is a great opportunity when we go back in and we're kinda like, "Hey, let us show the work that's been done- Mm-hmm. -on SuccessFactors over the sort of past two years." This is a very different product as of today, and I think it's an amazing opportunity to really sort of take a lot of our customers, sort of into an actually very bright future. It is. Look, from a demand profile, it's one of our most consistent, strongly performed business areas. There's no doubt that it's a competitive landscape, and people think of it only of a couple of players. The reality in succession, in recruiting, in talent management, in all of these different categories, there are competitors and smaller players that are always trying to compete with what our proposition with this simplicity across the suite. The demand is strong. Remembering that localization is one of our biggest differentiators, and I do not see any of the competition getting close. If you're an organization and you're drawing and leveraging talents across multiple multiple countries, there is no doubt that SuccessFactors leads the market. The other thing that we've now seen is when you think about things like planning, I mean, you've spoken about artificial intelligence, Sabine, but just simple things like planning. The platform, you start with financial planning, you then do supply chain planning, but then very quickly workforce planning. If you think about how you manage talent both outside and inside your enterprise and being able to do that in an effective way, it becomes the differentiator 'cause it's the same data platform that cuts across. It's not so much just cross-sell, it's leveraging what you have and extending upon it in a seamless way. That's where the demand comes from. I mean, I love that topic, and it is a nice example of what you ask about segments and bundles. As a CFO, there's one thing you always struggle with, which is a cost center forecast, which is very personal expense heavy. When people have underspent in the first half of the year and they have a lot of budget left in the rest of the year, they tell you, "We have tons of people we are going to hire in the rest of the year, and we need them." Then you look into the HR system and you see, well, they've actually not even kind of approached these people. How should they ever come there? I brought that theme and told SAP after joining, that's something I, as a CFO, always wanted to have, that I have next to that kind of personal expense forecast, the number from HR, which is really bottom up, what's in the offer, who has resigned, and compare the two to have a good discussion with the cost center owner. Actually, I learned just a couple of days ago that we are now on the case and try to make that happen. That's a good example how having a strong ERP system together with human resources management can be very powerful and make your life much easier, more effective. Very good. Amit? Good afternoon, all. Amit Harchandani from Citi, thank you for sharing your thoughts. Two questions, if I may. My first question goes to the debate between moving customers to the cloud, those who want to stay on-premise versus those who want to move to the cloud. As we have seen today, you have increased your ambition. There's a significant support component in that. At the same time, we see you making investments. I'm trying to get a sense of how are you thinking about moving the customers to the cloud today, because some of your customers or in user groups have expressed reservations about the pace at which they are being asked to move from on-premise. Is this an acknowledgment that you're willing to support on-premise a bit more, therefore you see the support revenue stream lasting a bit longer? We'd like to get your perspectives on that, please. A second question, if I may, Dominik, sorry to come back to the cash flow statement, could you give us a sense in terms of the building blocks, particularly around factoring, how are you thinking about that today versus 2025? Also capitalization of sales commissions. Thank you. I mean, move from on-prem to the cloud, I mean, Scott, please feel free also to comment. I mean, my take. Look, first of all, with the code split I mentioned before and a lot of innovations, what you see today around our announcements on AI, sustainability, they will be only available in the cloud. First of all, because there's much better leverage of these innovations in the cloud. Second, we can just not simply afford it to downport all of these innovations, what we are doing to, you know, 15 versions of ECC. For the customer, it's still hard to adopt because all of these versions are again customized. That will further accelerate the move to the cloud. I would also, when I compare our RISE business case, as I mentioned earlier, from where are we today compared to what we have planned, you know, we definitely all of our expectations are, you know, actually met and even, you know, overfulfilled because, you know, we see that also the large customers are now making their move. The maintenance, what you see the uptick, has a bit more to do with the resiliency and with more and more geopolitical tensions and with more and more regulations, you're not going anymore to third-party maintenance providers. The maintenance at risk and the maintenance loss, what we have seen, the average has gone dramatically down. That has not to do with no days of assistance to move to the cloud. Absolutely not. It just has to do also something to do with geopolitical tensions and all the new regulations which SAP can fulfill the best. I'd probably add 2 additional comments to it. The first is, for the larger end, the largest enterprises who are already on the journey to the cloud, it's not a 1-time move. It's a progressive journey. You see that in the support revenues, that as the cloud revenue, it will gradually ultimately when they complete that's a multiyear journey. When you heard AMD, when he said 16 months for a company of their size and scale, that was remarkable. Whereas other companies that might take a more of a conservative route, to Christian's point, they need and want that support to be able to ensure that their existing operations. The second is 2 years ago, it's hard to remember that it was only 2 years ago when we launched RISE. You saw some companies that are trying to come up to speed and internalize and understand and see the value and how this all comes together. I don't see a lot of resistance now the move. I do have lots of conversations with customers about how they drive it within their business context and their journey. It's less about on-prem versus cloud. There'll be a, you know, some customers that will continue on on-prem. For the large majority, what they're navigating is how they drive their journey. Do they go straight to a green field, public cloud and go straight there? Do they do a transition? Do they do it way whole company, parts of company? It's probably more that where you see that in the financial model where the support revenues continue over a period of time. That gives us confidence because we can see the underlying customer base moving. The other question was about free cash flow, a couple of topics. There was the commission discussion. Yes, you're right, that's part of a real working capital-like requirement, which we need to manage because it's absorbing cash. We basically pay the commission upfront. We, of course, looking into fine-tuning that, making sure that the provisioning is done properly before we do it. Of course, as a CFO, I wouldn't mind being even more rigorous and making more consumption-based or something of that nature, but I've not talked with all of you about it yet. That's certainly a big lever. Now the other cash flow topics, or remind me, that was the... Factoring. How could I have forgotten? Factoring. When I think about free cash flow, the guidance of EUR 7.5 billion has the idea behind it's a kind of clean operational free cash flow number. There are certain other factors like factoring, or you have the EUR 170 million we've now booked for compliance charges. These type of things are one of more debt-like nature topics. I think they will lead to some cash out at some point in time. Now the question is when will be affected? Another thing is restructuring expenses. They will come at some point in time. For restructuring expenses, it's easy. It's probably it's embarked in the 2023 guidance. On factoring, we said that we are going to not change the assumption on the factoring that Luka has given you for 23. It's not included as some kind of put or take in 25, it means that it has to be solved in the meanwhile somehow, if you wanna get out of it. Of course, if we kept it at the level, it would make a difference. From my perspective, there is a kind of good cholesterol in factoring if you have long-dated receivables, with customers with a certain credit risk. I think it's a good idea not to use our kind of expensive cost of capital, to have that weighing on our balance sheet, but try to sell that to banks. If it's more an opportunistic over the term factoring, we have to really look at what is the value added for SAP on that one. That might come. Let's make sure we always distinguish between what's the kind of fundamental operational cash conversion and the recurring cash generation, which is growing, and what is the kind of the puts and takes on some payments from the past that might reoccur and might not be due in the future anymore because I've prepaid in the past. I try to really distinguish the two, and the factoring clearly belongs to that one-off mortgage on the future that's there. The question is, are we going to pay it back at some point in time or not? Yeah. I don't wanna go into more details. I think we're going to discuss that end of the year, when we decide what we do on the factoring, and we give you full transparency, and you have also seen the transparency from Luka end of last year. Thank you. Before we close, maybe Julia can't miss the opportunity to ask for a pulse check. You have been with customers the whole day. You were on stage today for the keynote. Great announcement, and we see the energy and all the kind of the great opportunity with customers and what's lying ahead. We have provided clarity on that today and a refined view. I'd like your perspective, maybe on the pulse check of what you see of the great opportunity lying ahead for SAP and what you're hearing from customers today. Yeah. I mean, I think that hopefully you're feeling the energy and seeing the opportunity. I think we're trying to be, you know, smart to underscore what Scott said of where are customers buying today? You know, not speculative buy, but the results. I was thinking about the things we see people responding to in our marketing is around agility, flexibility, like, the things they need to solve now. I think that plays to our strengths and the offerings we have. I continue to be very bullish about our push with GROW with SAP into mid-market. A lot of upside for SAP and a very large market in that area, which we're not as penetrated, but we have a great offering now. I think we have, you know, a strength in our, kind of our traditional space, but also, you know, new energy in new areas that are just open fields for us at this point. Awesome. Thank you. On this positive note, thanks again for the executive board to stay with us, and thanks all for joining us. We have still a great program to go today and tomorrow. We'll see you again at Q2 Earnings. Meanwhile, have a great day here in Florida. Thank you.