Great. Good morning, everyone. Thank you for joining us. We are delighted to have the CEO of SAP, Christian Klein, join us today at the conference. Christian, thank you for joining us. Yeah, thanks for having me, Mou. That's great. Before we start, I just need to read a safe harbor statement, so if you could bear with us. SAP will 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 SAP's filings with the Securities and Exchange Commission, including, but not limited to, the risk factors in section of SAP's 2020 file annual report or Form 20-F. With those sort of niceties out of the way, Christian, maybe to start with, can you give us a sense of the conversations you're having with your customers? You've come off the back of what were very strong Q2 results, at least certainly given where fears were in the marketplace. What are the kind of key priorities in the context of both the geopolitical uncertainty, but all the structural disruption around AI that you're seeing and maybe your sort of perspective on kind of the discussions over AI deployment in the boardroom, and particularly, how do they think about before they commit to the spend those returns? Yeah. That's a lot in this question. Let's start with the geopolitical situation. I mean, throughout the whole year, we were always mentioning the geopolitical conflict, especially in the Middle East. I mean, now we are so much into the year that I can say, at least for SAP, we don't see now an impact at a global scale. Obviously, the Middle East is not a small business for us, so it's a very well-run business for SAP, but definitely it will not have an impact now on the cloud revenue anymore. Now on CCB for Q4, obviously, it's still a sizable business, but that's why it could have a certain swing, but it's not something what we are heavily concerned about anymore. Now, the board level, the C-level conversations, and I can also shed some light on the conversations we're having with our ecosystem and partners, where you also hear a lot about what they are hearing from the market and the customers. I mean, when we are going to send our customers to the cloud, I mean, 12 months ago to 24 months ago, it was more about, "Okay, Christian, let's get it done. Automate my business processes. Let's get rid of the custom code and show me the outcome of the RISE journey. So how are you going to make it work together with us?" Now, the C-level conversation is, "Christian, I can't wait another 12 months for these business processes to be automated or infused with intelligence via AI." So AI is now in every conversation. Yeah. Even if the customers in the C-level doesn't have really a concrete idea, they just want to see AI connected to it. And that's why when we are now doing this, it's very important for us to really look into, first of all, what business use cases have the best ROI. Customers also are asking more and more for, okay, the TCO token because they see the token spend running away. And then the last piece, which I feel is a very good sign for all the announcements we did at Sapphire, is that customers who even did build some agents with open-weight models on third-party platforms, they are coming saying, "Christian, I'm honestly completely overwhelmed my IT organization by making sure that these agents deliver the right outcome." Accuracy is a big problem oftentimes. And the governance of these agents. I mean, we have so many compliance requirements, audibility of a financial close. Payroll needs to run 100% perfect. So a lot of customers are saying, "Hey, SAP, can you not do this for us before my IT teams are dying a lot of complexity on running and managing those agents? Mm-hmm. We are going to delve into AI because there is a lot to talk about, with kind of upcoming releases. Maybe to just touch on the RISE journey and the S/4HANA migration. Can you tell us where you are in that? Because I think, CCB is still growing quite healthily. How much of that journey is there? There was some fears, I think, earlier in the year around potential slowing of that migration. Q2 told us that perhaps that is in decent shape. Would love to get your perspective on that. Yeah. Being here in San Francisco, memories are coming back at the time when I was the CFO of SuccessFactors, and right after the acquisition, we did not have so many good times, also with some other acquisitions, not integrated, sitting on a stack which was not really scalable, not performing. I mean, that has changed a lot. Looking at the CCB quotes of 26% in Q2, it is not only S/4. All LOBs are winning market share, and I am so happy that when we did this cloud move, a lot of customers were really quite concerned, "Oh, how do we do this? Are the products competitive," etc. In the meantime, we are winning market share in all LOBs, which was definitely not the case in two or three years. Also the channel is performing even better than our direct sales, which I always find a good indicator that we are not only converting install base to the cloud, but that also we are winning a lot of new family members with SAP. Also here in the Valley, a lot of startups who want to scale their business say, "Okay, SAP has localization for over 100 countries. The platform works." Public cloud end-to-end, why not SAP? Also some private investors are saying, "Okay, let us really close a framework contract for our SAP because our startups should just use the best platform to scale their business." That is good. Going forward, we talk a lot about AI, but in my financial plan for the next years, still there is 60% of our installed base is not yet in the cloud. There is stuff to come, work to be done. Just this morning, I talked to Julie Sweet from Accenture, and she asked me, "Christian, I have so many SAP consultants. How long will this party continue?" I said, "This party will continue, but in a different way and form." Also for the customers who are now moving to the cloud because they want to be moved to the cloud with AI tooling, with the AI use cases, which are then showing them the value and not just do a technical migration. There is enough potential also on the cloud side. The maintenance is coming to an end, standard maintenance. 2030 is then the end of the extended maintenance, and again, three years sometimes for such a ERP modernization is not a long time. But again, it is not even the dominating factor for the next years why to move to the cloud. Even some customers who moved before my tenure as a CEO to S/4 on-prem, they see now the value with AI and to make the move to the cloud. Yes, there is enough business left to be converted. Yes, I am not seeing that our subscription business will decline. It is just the opposite. I still see very healthy growth. Maybe one last piece, which is maybe also important for the audience to understand. When now Lockheed Martin, BMW, and others are coming say, "Christian, we need more features in our S/4 system." I said, "Features? I would love to talk about agents." So how can we convert that? Even there, we are now seeing that we see a lot of growth also in the subscription business by adding features. But we are not only adding features for spare parts management, we are telling the customer, "Okay, we can add a feature, but only if there is some data missing to the system of record." Then we want to build an agentic AI layer right away on top. You see both the subscription business and as well as, of course, the consumption related AI business will see growth in the future, I am sure about that. Got it. Maybe let us turn to AI. You laid the roadmap out at SAP Sapphire earlier this year in May. Obviously you have got the Autonomous Suite, the SAP Business AI Platform. Maybe for the benefit of the audience, can you help us understand that vision, what you see in terms of the role SAP plays, particularly as we move the LOBs solutions to more agentic workflows? Yeah, happy to do so. I saw also some comments about, is SAP maybe a little bit late on shipping all of these assets now. I do not believe that we are late. We want to get it right. As I mentioned also before at earnings, there was a learning curve. It is not like that we understood everything in perfect right away from the beginning when we started to build the first AI use cases two years ago. Now, what is different with the announcements we did this year? First, I told my product managers, which are all gathered together in our All-in on AI workshop here in Palo Alto, I told them, "Hey, when you believe we are developing an agent for document scanning and we are going to win with this agent, you are completely wrong." Our ERP runs the most complex business processes in the world, and we need to solve the most complex challenges of our customers with our agents. So all the agents we are shipping, 400, 200 now in September, will solve complex business challenges, not the low-hanging fruit, which you can easily do with any LLM you pick from the market. First. Second lessons learned was accuracy. Data, ontology, BDC, super important. I just saw Sridhar here on the floor, Snowflake, Ali, Databricks. We don't want to give away our ground tools, our semantics, but we want to make sure that our agents also understand non-SAP data. That the ontology layer, the semantic layer, you can build it with Palantir, but with SAP, you get a lot of that out of the box. We have 7 million triples in the ERP system, and these 7 million triples need to be understand. The data correlations need to be understand via knowledge graph, via the semantic layer, which sits on our new AI platform. So that is the first element. And then the second element, what we really saw in our learning curve is what I mentioned before. A lot of customers came to us and said, "Christian, even for the simple AI use case, identity management, authorization. Has the agent now read access, change access, or write back access? Compliance requirements, FedRAMP here in the U.S." In Germany, we are not short of bureaucracy as well. So there are a lot of requirements as well, which is understood by our ERP, but not yet understood if a customer tries to run those agents on their own. So with the new platform, we are going to manage every agent which is built on this platform. Either it's built by SAP, built by our partners, or built by a customer, which is a huge differentiator next to the context layer because we are saying no matter where this agent needs to operate, in which industry, in which country, we ensure that it's governed and compliant 100%. Last but not least, some of our peers announced great partnerships with one LLM provider. We believe that with Tool S tudio on the new platform, we want to be model agnostic. We don't see that one model always delivers the best price outcome. So we are checking our agents with at least six, seven different models before we go GA, and we don't see that only one model is winning. So this being agnostic, switching the models, delivering the best price outcome is also very key for our customers. So it's the context, it's the governance, which comes via SAP. It's the extensibility. You can build your own agents, partner can build agents, but it's all provided the context of SAP, and it's governed by SAP. Got it. I think you said you've got a kind of important launch coming up in the fall this year with Joule Work. Yeah. I think there's a wave of additional use cases coming. Maybe talk us about the early feedback you received from some of the pilot customers around these products and your expectation of product rollout. Yeah. First, just on the commentary on why is SAP maybe a little bit late with the new platform, we could have shipped the platform already at the beginning of the year, no problem, b ut then, again, every SAP customer would need to manage the agents by their own, which is a lot of feedback, again, coming where, say, "We are dying in this complexity. We can't do it. Please do it." Now, no matter if it's a Concur, an S/4, Logistics, supply chain, CX, sales, all A2A scenarios are managed by SAP. I told my product managers, "We are not going GA as long as we cannot prove that we can manage the whole life cycle." Now, what is coming in fall is the new platform. With that comes Joule Work. Others announced their own engagement layer. I don't want to be headless as SAP, so we have Joule Work. You look at Joule Work as you are used to Fiori or the good old SAP GUI. First of all, Joule Work is beautiful. We have 150 customers. They love the auditability, the traceability. They love the context Joule Work has. They are even saying, "Why should I use even for the non-SAP users?" I really want to emphasize that. Aldi, a German retailer, is saying, "Why would I not use Joule Work for all of my people at Aldi?" Because you can automate a PowerPoint, you can create a PowerPoint, you can automate an Excel report, but you are always getting the SAP context, the SAP data. Wait a second, you are checking authorizations, data access, you are managing these A2A scenarios underneath Joule Work. Why is Joule Work not becoming my one engagement layer for the company? In SAP, we have 100,000 people, a bit more. 80,000 are using Joule Work. Feedback is great. We are confident what is coming in fall. It is the platform, it is Joule Work, it is 400 agents. Again, t his morning, I said to Julie, "Move all your SAP consultants a bit away from typical ERP migrations. Use the tooling for migration, AI tooling, but also let them build agents on top of the new platform because extensibility will be key in such complex scenarios what we are going to deliver." We have seen it in the ERP. We have a lot of customizations and also the agents. They need partners who are going to extend it, and we need partners building also their own agents on top of our platform. Yeah. Okay, that is great. I wanted to come back to this sort of discussion on the moat. Obviously, one of the kind of underappreciated aspects is the contextual layer, the knowledge graph, and hence the decision to sort of use a third-party LLM system versus we are going with SAP. Can you expand upon that kind of richness of that sort of data moat? Because you also cross multiple domains, the ability to bring in now non-SAP data. Ultimately in that conversation with the customer of why kind of Joule works over building your own DIY chat solution. Obviously, when the concerns were coming up, also visible in our share price, now we are doing better and confident that this will continue. Obviously, I asked my portfolio and my strategy team immediately. I said, "Okay, which app is really up for disruption? Which app can be easily replaced by any LLM?" The answer was we have two solutions in our portfolio where I would say the moat is not really great. Concur bookings, which is, God thanks, a very tiny business of our overall Concur business. Concur is really used often for travel expense- Yeah. ...recording expenses, so a lot of regulations, et cetera, not easily replaceable and not easy to disrupt. But the bookings part, yes, this is where we now build a partnership with American Express and others. The learning business in the SuccessFactors, because to create a personalized learning, LLM can do that. Now, even for those two apps, which is only a minor part of our portfolio, for learning, I said, "Hey, dear SuccessFactors team, we need to provide an A2A scenario where we connect learning to the total workforce management AI scenario we are building." What skills do you have today? What skills do you want to need to have tomorrow? How is the recruiting agent connecting to that, the learning agent, and so on, to safeguard this business? Because standalone, no chance. Obviously the moat for all the other solutions, when we build the integration between S/4 and all of our acquired entities, I learned myself how deep the data model is, how deep also the process complexity is between a logistical solution, a finance solution. So that is, for us, we need to. The teams who are building that, this ontology layer on our new platform, are very experienced domain experts who once built our payroll solution, logistical solution, coupled with data architects, data engineers, who really build this together. For us, this is doable. But I don't believe that this is something what you can do with people who are checking today LLMs and is an LLM accurate yes or no? For me, these are two different people, type of people, type of profiles, type of skills. So I can sleep well enough. Again, we need to get now our acts together with the new platform. We need to prove that our agents can work more accurate, that Joule Work is way more accurate. We need to prove that the governance is managed by SAP, and if we can prove that, we will use all of these LLMs, not one. So they will be partners. But I see not a scenario now where I would now say, "Oh my God, this could disrupt my ERP business or the overall portfolio of SAP." It's 1 + 1 is 3 on our platform and not 1 + 1 is 2. Hmm. I just want to touch one other product area. Business Data Cloud has been out for 18 months. It's somewhat been sort of forgotten a little bit. As we now roll out the agentic workflows and the data consumption drives, where are we in terms of the adoption, the customer feedback? You obviously signed up now a very comprehensive list of partners as well. Yeah. I can answer this question also giving a little bit of context to the acquisitions we did in the data space. BDC obviously is fundamental for our new AI platform. Why? We see even that for our billing assistant, sometimes you need to check a ticket in a ServiceNow system to see, okay, why is the customer not paying? Ah, there is an escalation, etc.. So extensibility to non-SAP data sources is key. If a customer now has Databricks or Snowflake, etc., they love that they have zero copy. They don't need to change now the data layer. They can just use BDC, and we build a semantic layer as part of the BDC data platform. With [inaudible] then we can also govern the data, now also non-SAP data, because data quality is keyed so that the agents really understand, okay, the whole context of the business and the task they need to fulfill. So these partnerships are great. Now with Dremio, we did it because, take for example, H&M. We built a shopping assistant. They want to have social media data to not only do the same non-intelligent recommendations on certain products they have on the stock. They want to check the sentiment on social media. They want to check the sentiment coming from other stores, etc. So they said, "No, SAP, I have this data nowhere now. I want to store it, but please give me this AI scenario, end-to-end SAP." So we infused Dremio. If a customer really says, "Okay, I want to be agnostic. I don't want to use one of the other data lake providers." So we can do that. Again, with [inaudible], I already explained the data governance part. So yes, BDC is actually a core part of the new platform of the context layer. In every AI scenario we are now going to launch and which we are already implementing, we see, of course, there is a great pull-through now also to the data platform because you need sometimes more data product, sometimes you need a better governance of the data. Sometimes you're missing certain parts of non-SAP data. Okay, give me Dremio. It has great TCO. Yeah. It's built on Apache, so it's all good. That's why BDC is for us connected to our AI platform, and we'll see, of course, a huge upside potential now just by building more and more agents on the new platform. Got it. You're obviously on track now on the product rollout. You've got this target of 30% consumption revenue by the end of the decade. Can you maybe give us a sense of now as we are clearly going to be in an execution phase. What gives you that confidence around hitting that target, and do you need to do anything in your go-to market in terms of getting there? Yes, we are on track. I don't want to downplay this. After the cloud transformation, this is a transformation which is equally big for our workforce. In product management, I told the people, I said, "Look at these standard AI use cases, what we shipped at the very beginning. Everyone can do it. Go out, find the domain experts on the customer side, and design agents in a week, prototype them with AI, and come back and build real AI agents who are solving real problems." Sometimes you are the victim of your own success. When you have a backlog on features, which is enough for the next three years, why would you talk any more to the domain expert? Some of our product managers needed to learn how to go back to the customer and really design now agents which are really solving complex business problems. Again, the 400 we are going to ship will make a big difference in that. Accuracy, ontology building. Accuracy, not shipping age of features anymore, but really making sure that the agents we are going to ship have the right accuracy. Big change. Data scientists play suddenly a much bigger role than in the past, an even bigger role than in the past. Now on the go-to-market side, think about all of the customers who already moved to the cloud. These account teams, these sellers will wake up next year and going to see, "Oh my god", the bookings, the app bookings are gone. I see a huge quota now on data and AI consumption- Yeah. ...consumed ACV. We are moving them to an even more consumption related business model. For them, it will be also a change where we are now obviously preparing them also already to do it. The product, the platform is there. We see now it's working, and now we are going to do the shift on the go-to-market side as well. When you have seen our service revenue may be a slight decline, the reason why is I don't want to sell our consultants anymore to do ERP migrations. Let's give this to our partners. I want to use our consultants to, first of all, making sure we're extending our agents, to really solve even bigger problems first. Second, to use our data architects, our data engineers, to drive the adoption on the platform much better than to support any ERP migration project out there, because again, this is something what the partners can do. Also the consultants, next to our customer success managers, they will be pulled in much more into these AI projects to really make sure that the adoption is there, the value is there, and that we can monetize, obviously, all the stuff what we are going to sell in our AI portfolio. Yeah. I wanted to touch briefly on gross margins. There's sort of the fear out there that even if consumption revenues grow, this will be negative for gross margin. But it's interesting that you're taking this very agnostic approach, particularly with regards to some of the LLM providers. But you also emphasized the point about the more complex business cases. Yeah. So give us a sense of how you think that gross margin evolves, both short and medium term. Yeah. Sometimes it's good to have an own opinion, an own vision, an own strategy, and not just follow what everyone tells you. There were people in my supervisory board who told me three years ago, "Let's bet the whole company on OpenAI." Then everyone told me, "Let's bet the whole company on Anthropic." And now we are so happy that we have a model switching where we can switch the model within a day, and we have agents who have seen, in the meantime, five different models because we see that not one model always delivers the best outcome. It can change. With the next generation of models, maybe not the one model is leading, the other model is leading. Switching models is very important. Also for the cost margin. Because we have seen, of course, at the beginning when we delivered the first agents, the cost margin didn't really look good. But then, of course, we have proven the value now on the new platform. The customers are really excited about what they see. The billing system works super smart. Cash flow. We have the first supply chain agents now for the demand and the supply chain optimization, the inventory optimization. That works. Now what we are seeing is that over time, we can heavily improve the TCO to also shift some of these agents to some open-weight modules. Because again, they deliver sometimes as good outcomes as some of the frontier modules. Last but not least, if we come to our new engagement layer Joule Work. Sometimes customers are also telling us from a sovereignty perspective, "Let's use Mistral in Europe." Again, the accuracy is good enough to also do an HR report, create an HR report with SuccessFactors data with Mistral. Absolutely, let's shift to Mistral. We can cut the cost by five compared to some other frontier modules, and we deliver still a good enough outcome for the customer. Yes. That's why all of these concerns will have this shift, a negative impact on the cost margin, I don't see it. Obviously, when you land an agent, you should now not be overly aggressive on price. You should first prove the value. With the model switching we have in place and that we see the new platform is really providing the value, providing strong context. We manage the agents for the customers. Definitely, I have no concerns that the cost margin will see not a healthy development in the future. And maybe just touching upon how you are using AI efficiencies internally. You've outlined the EUR 2 billion of efficiencies over the medium term. Maybe talk us through how you've been managing internally, not just cost of entrance, but- Yeah. ...how much potential and runway there is in the company to kind of extract more efficiencies. Maybe we have done a little bit of different approach than some of our peers in the industry. You have not seen a big restructuring from SAP in the last 12 months. Because I told the team, first of all, we are not running out of development asks from our customers, co-innovation asks. Yeah. Despite we have seen a huge increase in development productivity, of course, there is a lot of stuff to deliver, first and foremost, all the agents, what we promised. Still, we also needed to make sure that we could accelerate the delivery of code a lot, 30%, 35% increase. Still, you need to check the code. You need to check is all data privacy requirements fulfilled, cyber, etc. And we need to make sure that we can not only generate much more code, but that we can also ship it to the customer way more faster. And that is a good example where I said, "Let's get first the homework done," and we are on a very good track to really get the productivity not only on coding, but really getting the code out to the customer faster, which we are now doing. Then also roll out Joule Work inside SAP. We are seeing now productivity gains in finance, in HR, and other functions of up to 20%, which is great. And now we are also, of course, having the discussion on, "Okay, what do we do with this higher productivity?" We need to transform our workforce. And with that, you can also expect that by the end of next year, you are not going to see the same kind of SAP workforce like what we have today, just based on the productivity gains, what we are seeing. Got it. So maybe in closing, with every technology cycle, there may be a commoditization of certain processes, but it opens up new frontiers in terms of From sitting in your seat where your software kind of powers a lot of the enterprises of the world, what are some of those use cases or workflows that you see that kind of excite you and when you speak to your customers that drive that leg of growth? I mean, just look at myself. When I prepared for this conference here, I asked Joule Work, "Okay, what are the analyst estimates? What are the concerns? What is the sentiment in our investor base?" And connect it to my forecast for half year two. And I, by myself, created all of this stuff in the past. And now I have, in one minute, a rock-solid analysis about what my forecast says, what my pipeline says, what the expectations are, and how confident, how bullish can I be for this conference. And that is, of course, something where you needed an amount of people in Alexandra's organization, in controlling, in FP&A to do that. And that excites me. I mean, the hours I spend in my life to pull this stuff out of SAP is enormous. Or when an Infineon CEO says to me, "Christian, this order management agent is so great because it has so much intelligence on, I have not a demand problem as Infineon, I have more a supply problem." This agent makes sure that in thousands of orders coming in every day, how to route it to which customer who gives me the best margin. It is unbelievable the kind of intelligence what we are going to see. Then the last example, even if the German user group, imagining that they are so critical, I mean, Germans tend to be more critical, but the user group, they are testing now Joule Work, and they are saying, "Christian, this is unbelievable." The user experience, the results, what we are getting out of that. They even did one user group member did a post on LinkedIn, and they say the results are incredible. You see the potential, and now with the platform, with the agents we are going to ship, we are at the beginning. But I see there is a lot of potential for our customers. Obviously, when you then multiply that with the installed base what we are having, it is of course also for us an exciting time now. Yeah. That is great. I think we are up on time. Christian, thank you so much. Thanks for having me.