SAP Q2 2024 Earnings Report

SAP EPS Results

• Actual EPS: $1.10
• Consensus EPS: $1.01
• Beat/Miss: Beat by +$0.09
• One Year Ago EPS: $0.71

SAP Revenue Results

• Actual Revenue: $8.29 billion
• Expected Revenue: $8.25 billion
• Beat/Miss: Beat by +$35.00 million
• YoY Revenue Growth: +9.70%

SAP Announcement Details

• Quarter: Q2 2024
• Date: 7/22/2024
• Time: After Market Closes
• Conference Call Date: Monday, July 22, 2024
• Conference Call Time: 5:00PM ET

SAP (NYSE:SAP) is a global enterprise software company headquartered in Walldorf, Germany. Founded in 1972 by five former IBM engineers, the company’s name is an acronym for Systeme, Anwendungen und Produkte in der Datenverarbeitung (Systems, Applications & Products in Data Processing). SAP develops and sells software and services that help organizations manage business processes across finance, human resources, procurement, manufacturing, supply chain and customer relationships.

SAP’s product portfolio spans on‑premises and cloud offerings, anchored by its enterprise resource planning (ERP) solutions such as SAP S/4HANA and the SAP HANA in‑memory database and platform. The company also provides cloud-based human capital management, procurement and travel/expense solutions, analytics and business‑intelligence tools, and customer experience and industry-specific applications. In addition to software licensing, SAP’s revenue streams include cloud subscriptions, maintenance and support, consulting and implementation services delivered directly and through a global partner ecosystem.

SAP serves customers across industries and geographies, operating worldwide with a significant presence in Europe, the Americas and Asia‑Pacific. The company works with large enterprises as well as mid‑market customers, supporting digital transformation initiatives, intelligent enterprise projects and the move from traditional on‑premises deployments to cloud architectures. As a publicly traded company listed on major exchanges (including the NYSE under the ticker SAP), SAP is led by its executive management team, with Christian Klein serving as chief executive officer (as of mid‑2024), and remains notable for its large partner network and extensive industry solution footprint.

SAP Q2 2024 Earnings Call Transcript

Key Takeaways

• Despite industry volatility, SAP delivered strong cloud momentum in Q2 with backlog up 28%, cloud revenue up 25%, and Cloud ERP Suite growth of 33%, driving total revenue to 10% year-on-year growth.
• Business AI was a key driver in nearly 20% of Q2 deals, with over 60 GenAI use cases published (100+ by year-end) and tools like JUUL, AI co-pilot, and CX AI boosting end-user productivity by up to 50%.
• The transformation program boosted profitability, with non-IFRS operating profit up 35% and margin +4.4 percentage points, leading SAP to raise its 2025 operating profit ambition by €200 million while targeting €3 billion in run-rate savings.
• Notable customer wins and the “Wise” transformation journeys—such as long-term partnerships with ExxonMobil and Campari Group—underscore SAP’s end-to-end cloud ERP and modular suite approach, supported by dedicated enterprise architects and a growing partner ecosystem.
• SAP generated €1.3 billion in free cash flow (+114%), maintained its 2024 outlook, and expressed confidence in accelerating top-line growth through 2027, while emphasizing prudent execution during the critical Q4 period.

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the SAP Q2 2024 earnings conference call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star, followed by one on your touchtone telephone. I would now like to turn the conference over to Alexandra Steiger, Global Head of Investor Relations. Please go ahead.

[Alexandra Steiger, Head of Investor Relations at SAP]

Good evening, everyone, and welcome. Thank you for joining us. With me today are CEO Christian Klein and CFO Dominik Asam. On this call, we will discuss SAP's second quarter 2024 results. You can find the deck supplementing this call, as well as our quarterly statement on our investor relations website. During this call, we will make forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results and outcome to differ materially. Additional information regarding these risks and uncertainties may be found in our filings with the SEC, including, but not limited to, the Risk Factors section of our annual report on Form 20-F for 2023.

[Alexandra Steiger, Head of Investor Relations at SAP]

Unless otherwise stated, all numbers on this call are non-IFRS, and growth rates and percentage point changes are non-IFRS, year-over-year at constant 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. Christian, now over to you.

[Christian Klein, CEO at SAP]

Yeah. Thank you, Alexandra, and welcome to the SAP family as our new Global Head of Investor Relations. It's great to have you on board. A warm welcome also to everyone on the line. My main message to you in this call, we continue to deliver. Despite the volatile environment in the software industry, our growth momentum remains strong in Q2. More and more customers are moving to the cloud, and our portfolio is becoming ever more attractive, thanks to SAP's business AI capabilities. In Q2, we also significantly increased our profitability. We continued to execute on our transformation program with great discipline. We're rehiring only for the skill sets we need. As you have seen, we are increasing the volume of the program. That's why we are able to announce an upgrade of roughly EUR 200 million on the bottom line of our Ambition 2025.

[Christian Klein, CEO at SAP]

SAP's strong momentum was already evident a few weeks ago at Sapphire. Our customers and partners have never before shared so much positive feedback about SAP's innovative best-of-suite portfolio and position in the market. Business AI was, of course, at the center, and there is no doubt that everyone perceives SAP as a major AI player, given how well we are positioned to embed AI in the operating systems of our customers. This perception manifested itself now also in our Q2 numbers. In every ERP and LOB deal we closed, our AI strategy played a key role, and AI had a direct impact on our bookings. In the second quarter, almost 20% of all deals included premium AI use cases, and this is just the beginning. Customers have clear plans to expand their AI consumption on their RISE and GROW transformation journeys.

[Christian Klein, CEO at SAP]

Let me give you some quick updates on our key items in business AI. Joule is quickly becoming our new user experience, our one front end. We are making our AI copilot an incredible productivity engine for the 300 million people worldwide using our cloud software. Q2 examples include the Indian automotive leader, Mahindra & Mahindra, and the Belgian manufacturing company, Bekaert. Besides the Joule innovations, we continue to release embedded AI use cases across our portfolio. In Q2, customers selected our CX AI toolkit to boost the productivity of sales teams by up to 10% and e-commerce teams by up to 50%. Our GenAI features in Concur were very popular, too. 150,000 users every week now use these features, processing nearly 1 million hotel bills per month.

[Christian Klein, CEO at SAP]

Overall, we have published over 60 GenAI use cases to date and are on track to deliver more than 100 scenarios by the end of this year. Last but not least, our GenAI Hub on BTP is buzzing with activity. Since SAP Sapphire, we have seen a lot of additional interest from big customers. Over 90 partner use cases are now in co-innovation, including use cases with big systems integrators. One example is Smart Dispute Management, developed by Ernst & Young. The use case streamlines the returns management process, reducing manual effort and minimizing errors. SAP Sapphire also helped to significantly boost our RISE pipeline. RISE is not just a lift and shift to the cloud. It's a holistic offering to increase competitiveness through a deep business transformation, to replace the legacy ERP with our modular cloud ERP, and to increase agility and infuse innovation every quarter.

[Christian Klein, CEO at SAP]

The evolution of RISE with SAP will include one dedicated enterprise architect for each customer, and it will rely on an integrated business transformation suite. With SAP Signavio, we cover the process layer. With SAP LeanIX, we cover enterprise architecture. And once the WalkMe acquisition is closed, we will also cover the end user and guide and enable them to get the best out of our solutions. Together with NVIDIA, we also bring AI capabilities into our RISE with SAP journey via tool for consultants and tool for developers. With the latter, for example, users can generate, understand, and test modern SAP ABAP cloud code and boost productivity in coding by up to 30%. So our customers benefit from a significant increase in time to value. And SAP benefits, too, as every successful RISE with SAP journey is an opportunity to cross-sell and generate revenue across the portfolio.

[Christian Klein, CEO at SAP]

Customers will spend less on implementation and custom code, and they will spend more on building innovative applications on BTP. The momentum so evident at SAP Sapphire in Orlando and Barcelona carried us throughout the whole quarter. Let's see how far in concrete numbers. Current cloud backlog was 28% and came in at EUR 14.8 billion. Cloud revenue expanded 25% to EUR 4.2 billion. This expansion was driven by the Cloud ERP Suite, which came in 33% higher year-over-year and reached EUR 3.4 billion. Thanks to the increasing share of of cloud revenue, total revenue growth entered double-digit territory for the first time since Q1 2019. We also performed extremely well on the bottom line.

[Christian Klein, CEO at SAP]

Our operating profit jumped 35% to EUR 1.9 billion year-over-year, and the operating margin was 4.4 percentage points higher. The diligent and speedy implementation of our transformation program to date was a key factor here. Let me now share some of the customer stories behind these great numbers. ExxonMobil, a leader in the energy sector, has entered a long-term partnership with us to leverage RISE. The deal marks the next chapter in a multi-phase transformation journey with tangible business value in each phase. The overarching goal is to enhance ExxonMobil's operational efficiency and agility. As for GROW, about 60% of customers in Q2 were net new. Among the GROW deals were the international beverage company, Campari Group, and Fortera, a Silicon Valley firm working on cement production with zero emissions.

[Christian Klein, CEO at SAP]

GROW with SAP is driven by our fantastic reseller partners. To date, we have won almost 1,500 customers. Many of them started a journey with S/4 Public Cloud Finance and are now expanding their SAP ERP footprint. Let's now look at an example for business AI and the BTP. Lenovo is using business AI to identify supply chain and finance risks, reduce repetitive tasks, and optimize supply chain management. And with the BTP, Lenovo will integrate SAP and non-SAP solutions. As for our SAP business transformation suite, BASF, the world's largest chemical company, is adopting SAP Signavio. The strategic move underlines BASF's commitment to complete its massive ERP transformation quickly and confidently. Beyond these customer wins, we put our partnership with the global HR services leader, ADP, on a new footing just yesterday.

[Christian Klein, CEO at SAP]

Together, we will shift ADP's entire SAP on-premise payroll offering to a cloud-based solution. As always, you can find a summary of major customer wins in the quarterly statement. They all speak one language: SAP is the operating system of the global economy. Looking at the larger picture, our GROW formula is clearly working. We have the right ingredients in place in our Cloud ERP Suite. Just to reiterate, RISE brings best of suite ERP to our installed base, enabling large enterprises to transform deeply. GROW is the perfect choice for greenfield projects, for net new customers and subsidiaries of large companies, always in the public cloud. The BTP brings everything together as the leading platform for B2B transformation. Once we have landed with RISE, GROW, and the BTP, we go into the expand mode with our line of business solutions.

[Christian Klein, CEO at SAP]

Finally, business AI is infused everywhere and lifts the whole portfolio to a new level. All of these are SAP-sized opportunities. They will allow us to massively increase market share. Side by side with our GROW story, the transformation we launched earlier this year is gaining traction. In the second half of 2024, we are strongly focusing on simplifying our go-to-market even further. The goal is to strengthen our channel business and to promote our land and expand motions. At the same time, we are making major progress with the automation of internal processes through AI using the GenAI Hub on the BTP. The expected savings are in the triple-digit million EUR range.... Given the increased scope of our transformation program, we are confidently raising the operating profit ambition for 2025.

[Christian Klein, CEO at SAP]

In summary, our growth momentum in the cloud remains strong in Q2, and we continue to execute our transformation program with great discipline. Business AI is embedded in all our solutions and will boost success across the portfolio, with more powerful use cases on their way. Given our progress and our exciting product pipeline, we are confident that we will be able to achieve accelerating top-line growth through 2027. And with that, over to you, Dominik.

[Dominik Asam, CFO at SAP]

Thank you, Christian, and thank you all for joining us this evening. As you can see from the financial results Christian just shared, our strong performance continued into the second quarter. In the first half of the year, we have delivered impressive results, further reinforcing our confidence in the trajectory of the business. We continued to enjoy a robust demand for our solutions in Q2, driven by both net new customers and our broad installed base. This demand was fueled by a healthy pipeline, cloud conversions of existing customers, and substantial upselling and cross-selling opportunities. Our Business AI strategy is making progress, playing a key role in these opportunities and customer interactions, and is helping to drive pipeline growth. SAP solutions are an integral part of our global customers' core operations, and we are seeing a strong, unabated shift from on-prem to cloud.

[Dominik Asam, CFO at SAP]

Our building blocks are firmly in place, as evidenced by the growth of our current cloud backlog and cloud revenue, as well as the strong expansion of our non-IFRS operating profit. The company-wide transformation program we initiated in January continues to progress well, further enhancing our operational efficiencies and laying the groundwork for sustained long-term growth. All of this has paved the way for positive trend towards larger cloud transactions, with deals greater than EUR 5 million in volume, yet again contributing more than half of our cloud order entry. Now, let me go into further details regarding our financial highlights. We are on track to achieve our fiscal year 2024 top-line outlook and fiscal year 2025 ambition, as demonstrated by current cloud backlog, reaching EUR 14.8 billion, growing by 28% year-over-year.

[Dominik Asam, CFO at SAP]

Cloud revenue grew 25%, mainly driven by the continued strength of Cloud ERP Suite. Specifically, Cloud ERP Suite grew by 33% in Q2, its 10th consecutive quarter of growth in the thirties. This ongoing momentum reinforces our belief that Cloud ERP plays a pivotal role in our customers' digital transformation journey. Software licenses revenue decreased by 27% compared to the same period last year, demonstrating the continued shift towards cloud solutions. Finally, total revenue was EUR 8.3 billion in Q2, up 10% year-over-year, demonstrating the resilience of our overall business in the face of evolving market dynamics. Now, let's take a brief look at our regional performance. In the second quarter, SAP's cloud revenue performance was particularly strong in APJ and EMEA, and robust in the Americas region.

[Dominik Asam, CFO at SAP]

Brazil, Canada, Germany, India, Japan, and South Korea all had outstanding performances in the cloud revenue growth, while China, the US, and Saudi Arabia were particularly strong. Now, moving on to the bottom line. Our cloud gross profit grew by 29%, driven by cloud revenue growth and further efficiency gains. This resulted in cloud gross margin improving from the year-ago period, expanding by 2 percentage points to 73.3%. IFRS operating profit in the second quarter was down 11% to one euro, twenty-two cents-- Sorry, to one euro -- EUR 1.22 billion euros. This increase was driven by approximately... Sorry, this decrease was driven by approximately EUR 600 million in incremental restructuring expenses associated with the transformation program initiated at the beginning of this year. These additional expenses primarily resulted from the positive reception of the voluntary leave programs.

[Dominik Asam, CFO at SAP]

While restructuring expenses recorded in the first half of 2024 totaled EUR 2.9 billion, the overall expenses associated with the program are currently expected to be approximately EUR 3 billion. Finally, non-IFRS operating profit grew by 35% to EUR 1.94 billion, supported by strong revenue growth, continued operational efficiency, as well as disciplined execution of the 2024 transformation program. Non-IFRS earnings per share, basic in the quarter increased 59% to EUR 1.10. The IFRS effective tax rate for Q2 was 33.8%, and the non-IFRS tax rate was 33.6%. Now, on to our cash generation. Free cash flow in the second quarter increased by 114% to EUR 1.3 billion. The improvement was primarily attributable to increased non-IFRS profitability and enhanced working capital management.

[Dominik Asam, CFO at SAP]

Additionally, there was a timing benefit that contributed to the strong performance. While we paid out approximately EUR 500 million for restructuring this quarter, we expect the majority of payouts associated with the restructuring to occur in the second half of the year due to the phasing of the underlying programs. Now let's move on to the outlook. As you've seen in today's release, we keep our 2024 financial outlook unchanged. While we had a very good first half of 2024, Q4 is typically our largest quarter. Our Q4 performance will be crucial in achieving our full year targets and our 2025 ambitions. So we continue to be prudent and vigilant in terms of observing the evolving market dynamics, executing our strategic initiatives, and driving operational efficiencies. Where we intend to make some adjustments, though, is on our transformation program and its impact on our financial performance.

[Dominik Asam, CFO at SAP]

We now estimate that between 9,000 and 10,000 positions will be affected, with the corresponding impact on restructuring provisions, cash out, and run rate savings after completion of the program. As compared to what we had indicated in the first quarter, we added about EUR 800 million of restructuring expenses and cash out, now expecting a total of EUR 3 billion. This is expected to yield additional run rate savings of approximately EUR 200 million. A mid triple-digit million EUR amount of incremental cash out is expected to spill over into the year 2025, more than offsetting the cash contribution from the additional savings. It's important to note that the increase in the number of affected positions does not imply complete elimination of these roles, but allows us to refine our setup in terms of skills and locations.

[Dominik Asam, CFO at SAP]

By now, we've also made some progress on working capital measures and do see a path to nevertheless deliver the EUR 8 billion of free cash flow we've previously announced in our 2025 ambition. For the detailed outlook and Ambition 2025, please refer to our quarterly statement published earlier today on our Investor Relations website. To sum it up, we have demonstrated strong momentum in the first half of the year, underpinned by unabated growth momentum for our solutions and great progress on strategic transformation initiatives. This puts us into a strong starting position for the second half of 2024, thereby solidifying the bridge into our Ambition 2025. Thank you, and we will now be happy to take your questions.

[Alexandra Steiger, Head of Investor Relations at SAP]

Thank you very much, Dominik, and with that, we will now take your questions. I would like to kindly remind you to only ask one question when prompted. Operator, please open the line.

[Operator]

Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star, followed by one on their touch tone telephone. If you are using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star, followed by one at this time. One moment for the first question, please. We'll take our first question from Mark Moerdler with Sanford C. Bernstein & Co., LLC. Please go ahead.

[Mark Moerdler, Managing Director, Senior Vice President and Senior Research Analyst at Sanford C. Bernstein & Co]

Thank you very much, and Alexandra, welcome on board. Dominik, why do you think that you are not showing any signs of macro impact that others are calling out? Could this be a timing issue, in terms of the flow-through through the pipeline, and could it be a worry for next year, or is it just simply the way you're executing or the business model? Any color would be appreciated.

[Christian Klein, CEO at SAP]

Yeah, I mean, I can go first, and then please, Dominik, also share your feedback. I mean, Mark, indeed, I mean, we have seen a fantastic performance in half year one, and now entering half year two, we see a very healthy pipeline. And pipeline means sales pipeline, but also I see a very strong innovation pipeline now. When you sit together with our product owners and see what we are delivering on GenAI use cases and the customers who are sharing their feedback early on, it's pretty exciting. I mean, they see a ton of value, and you have seen now in Q2 already the first impact of business AI on our numbers. And then second, what I also see clearly working now is the best of suite.

[Christian Klein, CEO at SAP]

I mean, four years back, we were rightfully criticized, yeah, for having a, a bunch of best of breed, solutions. But when you want to have a high quality AI, when you want to steer your business end to end, when you want to connect your commerce and your omni-channel with supply chain, and when you want to connect your procurement with the warehousing, I mean, that all comes together on, on BTP, and I would say we are also, just at the beginning. I mean, please don't forget, when customers are using their ECC solution, so their on-premise monolithic ERP solution today, that doesn't mean that they use all the modules, you know, in the past. And now, with our land and expand strategy, we have really a, I mean, a motion.

[Christian Klein, CEO at SAP]

The customers are really, you know, landing, and then they get that they have to connect the different parts of their company and the different parts of the supply chain. That's why we also stay, you know, confident for the second half of the year. Dominik?

[Dominik Asam, CFO at SAP]

And maybe, maybe just to add some numbers. I mean, you have heard us talk and comment about this Cloud ERP Suite growth now at 33% in Q2, and above 30% for 10 quarters in a row. What I want to call out is that the dilutive effect of both the Extension Suite and Infrastructure as a Service is going down, just from a mix point of view. A year ago, these two items in the cloud revenue mix represented about 23%. Now, that's only 18%. And if you then look at the kind of delta and growth between the two, you will see that the dilutive effect last year...

[Dominik Asam, CFO at SAP]

I'm sorry, for this year, with the mix we had last year, you know, if you do a year-on-year comparison, you have to start with the mix last year and then look at the different growth rates. So the dilutive effect on past year's mix is 8 percentage points. Now, if you just apply to the same delta in growth between Cloud and SAP Suite, and just assume that the rest would continue to be in a similar growth rate on the other, now 18%, this dilutive effect would go down to 6%.

[Dominik Asam, CFO at SAP]

So, what you see here is that the mix is really playing our favor, and then combined with all the factors Christian has mentioned, and that very unique feature that we can convert all this installed base, which is really scrambling now for productivity and sees AI and the offering we have as a big driver for that.

[Operator]

The next question comes from the line of Adam Wood with Morgan Stanley. Please go ahead.

[Adam Wood, Managing Director and Head of European Software & Services Research at Morgan Stanley]

Hey, Christian. Hi, Dominik. Thanks for the question and my congratulations on another good quarter. Just on the business AI side, Christian, you know, you've clearly flagged this as a big driver. Is this a general desire of the customer base to be able to adopt the technologies that you deliver, given they're gonna have to migrate every few years, and they wanna start that now, and that's accelerating the S/4 move? Or are you seeing a couple of key use cases that are really resonating with the base, and if so, could you talk us through what they are, please? Thank you.

[Dominik Asam, CFO at SAP]

Yeah. I mean, Adam, what, what we clearly see resonating very well, I mean, we have now the first use cases live for Joule and the HR and the finance and the supply chain space. Everything what we do in order management is already enabled via Joule, and, you know, the end users will, you know, benefit a lot from efficiency gains. They do a lot of content search, no matter if it's HR content or actually travel or supply chain-related content. That is also, of course, a massive efficiency booster. And then last but not least, also what we see, everything, you know, around document management. I mentioned the Concur example, where 150,000 end users already benefit today from embedded AI, but really by, by itemizing, you know, the hotel bills and processing it real-time, automatically in the system.

[Dominik Asam, CFO at SAP]

And then second, everything what you do around supplier, contract management, employee contract, customer contract, I mean, we, by ourselves, I mean, I mentioned it, we see already now massive efficiency gains. Yeah, because all the contract, customer contracts are coming in, and there are many, which is positive. I mean, they are getting screened via our system, yeah? So we need way less people on, you know, all these compliance checks, the WAF work checks, you know, the document checks. Closing the books will become more easier, and these are the typical use cases. So document, content, analytics, and of course, you know, just by taking over, you know, certain tasks, which are pretty manual today, these are the GenAI use cases which resonate really well, Adam.

[Operator]

Our next question comes from the line of Michael Briest with UBS Limited. UBS Limited, sorry. Please go ahead, sir.

[Michael Briest, Research Analyst at UBS Limited]

Thanks. Good evening. Just in terms of the restructuring, I think at Sapphire, Dominik, you suggested it was higher take-up in the U.S. But just looking at the increased expense, it's EUR 1 billion for 1,000-2,000 employees. That feels more like a European program. Can you give some sense of where the people will be leaving from? And looking in the second half, you've banked a very strong profit performance and you're just beginning to see people leave now. You know, is there upside risks, you'd say, to 2024 profits as well as 2025, given the expanded program? Thanks.

[Dominik Asam, CFO at SAP]

I mean, the phasing, as we mentioned, has been very positive in Q2. Q2 is a little bit of a kind of abnormal quarter because we've seen a lot of reduction and, and you're right, especially in those countries where we had either fast voluntary measures, like in the U.S., but also non-voluntary measures, frankly. So these people have been, on average, leaving early May. So we have been seeing big relief for May, June, two months out of three in the quarter, while the hiring has been more gradual. And now you'll see the hiring actually accelerate because these kind of initiatives to hire are a little bit more back-end loaded. They take some time.

[Dominik Asam, CFO at SAP]

As you might have noticed that while we increased the reductions by 1,000-2,000 positions being affected, we are still keeping the target for the full year constant. So that means there is a significant ramp-up in headcount. So from that perspective, what we do see is that we have been, of course, seeing more departures on the relatively expensive German voluntary early retirement programs, but these are also expensive resources, and we also use the opportunity to think about skill mix, location mix, to improve the profitability, and based on that, we have increased now the ambition for 2025 by EUR 200 million. You've seen the press release. So, that's, that's the story. We, we feel pretty confident about our profitability this year. Yes, the remain to do doesn't look overwhelming, so maybe prudent.

[Dominik Asam, CFO at SAP]

I just wanna call out one thing. We had a reasonably still okay-ish decline in software, 27% decline in Q2, which was 24%, by the way, last year. So the comps have been kind of similar. Now, we had extremely favorable software mix last year with a 10% decline, and we anticipate that to decelerate. So now, of course, it's always hard to break software revenue, as you know, but I think we don't wanna kind of bet our guidance on a very frothy development there. So that gives us certainly some protection for this year. And it also puts us in a strong position to negotiate with customers on software, to be commercially robust, and to really push our strategic direction into the cloud.

[Christian Klein, CEO at SAP]

... And maybe, Michael, on the transformation program overall, I mean, we are very diligent, yeah, also on the future workforce planning of SAP. We really want to use this moment now to invest in a very targeted and future growth areas. Yeah, we are bringing on board data scientists, we are bringing on board all of these architects, yeah, to further, you know, enrich the RISE journey for our customers, while of course, also, like Dominik mentioned, we are optimizing our location mix. I mean, for many years, yeah, we worked on that, and now we have a unique chance, yeah, to really optimize also the location and the skill mix. And so far, I mean, the program is really a success, and we are very happy with the execution so far.

[Operator]

We'll move to our next question from Mohammed Moawalla with Goldman Sachs. Please go ahead.

[Mohammed Moawalla, Research Analyst at Goldman Sachs]

Good evening. Thank you. Hi, Christian. Hey, Dominik. My question, Dominik, is, you alluded to some working capital savings that you started to see as well. I'm curious on, as you look at the kind of free cash flow development, you've obviously been able to retain the EUR 8 billion, despite the additional restructuring charges, but also some of the improved EBIT improvements. I'm just curious to understand, you know, where we are. Are we still kind of early in that and the longevity around as more of the specific initiatives? And then sort of linked to that also, as you look to kind of reinvest and you talk about kind of reskilling, how do you look at sort of savings dropping to the bottom line versus the quantum of kind of reinvestment back into business over the next two years? Thank you.

[Dominik Asam, CFO at SAP]

I think, with regards to free cash flow, yes, you, you have seen that, the payouts for restructuring have increased, so to approximately EUR 3 billion, if everything is kind of added up for this wave, and we've done. Nevertheless, we keep both our, yeah, outlook for 2024 and the ambition for 2025. The restructuring has also some benefits, so that doesn't explain everything. You're right, there were also some working capital improvements. So we make good, good progress, maybe a little faster than what we thought. And now I would caution that beyond 2025, the cash conversion, is, is hard to improve rapidly because we are, we're really benefiting a lot from 2024, 2025 in that from a change on stock-based compensation.

[Dominik Asam, CFO at SAP]

That gives us a big boost on cash conversion, and then we are actually converting at a very, very good level. From there on, we actually need some gradual further improvement on working capital, to compensate the fact that this kind of tailwind from stock-based compensation as % of revenues will actually be diluted a little bit over time due to the strong growth, and we don't think that stock-based compensation will grow at the same rate as the top line. So that's the story on the cash flow. Now, the second close question was the skilling and how it's going with the cost. I mean, you recall that we said the big heavy lifting in terms of catch up is to get to 25.

[Dominik Asam, CFO at SAP]

The run rate savings, we believe, will be there pretty much first of January 2025. There's some later restructuring, but it's really moderate. We've accrued EUR 2.9 billion, so this means these offers are out to people. We've made commitments. There is a certain error range around it because we still don't have the firm commitment from all people. There are expectation values in there, but it's not a huge variance we expect. So line share will be done. For instance, in the largest country, the way it will work is that a lot of people will kind of still be on payroll through end of this year, so December 31, and on that basis, we'll have that flat headcount. But first of January, there will be a lot of people exiting.

[Dominik Asam, CFO at SAP]

So that gives us that big lift in 2025. So you see a line share of run rate savings in 2025 from the program, and then it will be a more gradual grinding, leveraging economies of scale, coming to a ratio of cost increase, total expenses increase to revenue increase, which is more in line with our competitors at about 80%-90%. That's the way we think about it. So don't expect that we can repeat that every year. It's really then a more gradual and slower increase, but come 2025, we think we've already made big strides in terms of closing the gap to where we see competition in terms of free cash flow and margin and also growth, frankly.

[Operator]

For our next question, we'll move to the line of Jackson Ader with KeyBanc Capital Markets. Please go ahead.

[Jackson Ader, Managing Director and Equity Research Analyst at KeyBanc Capital Markets]

All right. Thanks for taking our questions, guys. Mine is really about cloud migration activity. Christian, you mentioned, I think earlier in the year, that some customers were actually looking to pull forward their move to the Cloud ERP Suite. You know, maybe thinking about going in 2025, trying to go in 2024. And I'm just curious whether that type of pull forward demand is still holding up here as kind of, you know, some other software companies have seen the macro environment cool.

[Christian Klein, CEO at SAP]

Yeah. I mean, I already mentioned the very positive pipeline momentum we have, and that actually includes both. I mean, we see the installed base moving to the cloud.

[Christian Klein, CEO at SAP]

Sapphire helped, I have to say, in my 20 SAP Sapphires I experienced at SAP, there was never a better feedback from our customers about the product, the product itself, the best of suite, how everything comes together, and then also how SAP has now more skin in the game when it comes to the transformation. I mean, we are not sitting anymore on the sideline. We are actively helping, and that resonates extremely well. And then when you see the channel and I guess there's even much more room to grow going forward. SAP has a very solid channel business. This is also a highly profitable sales channel, but we see, you know, now way more opportunities to further expand that channel. There are a lot of resellers knocking on our door because they see this modular best of suite.

[Christian Klein, CEO at SAP]

This is also a highly profitable business for them, and so we are also expanding our partner territories. You know, we will, we will do that also throughout 2025. So both from an installed base move and as further to also accelerate our net new customer growth. We remain very optimistic, yeah, for the year and for 2025.

[Operator]

The next question is from the line of Toby Ogg with J.P. Morgan. Please go ahead.

[Toby Ogg, Managing Director and Equity Research Analyst at JPMorgan]

Yeah. Hi. Hi. Thanks, thanks for the question. Just coming back on the-- just coming back on the backlog growth of 28% in the quarter. Clearly, as we've talked about, there, there's obviously a difficult macro environment in software, and I know there are other factors like migration credits in the mix for you as well. So did you see any sort of incremental headwinds from the macro in the quarter? And did you see any tailwinds from the migration credits? And then just, just on the backlog for the second half, you know, what are the drivers of your confidence around the backlog growth into the second half and, particularly into Q4, where the comms start to get a little bit more difficult? Thank you.

[Christian Klein, CEO at SAP]

I mean, as every quarter, I mean, you, you win, a few upside deals, and you have a few slippages, but all of these slippages were not macro-related. Actually, we had a good start in July. We saw that, you know, some of the deals who slipped were already signed now. So we didn't see, you know, any kind of macroeconomic impact. Now, you're mentioning a good point, and the cloud backlog is super strong, but this also then gives us another opportunity. In the cloud backlogs, it's a ramp of RISE deals. First year, 10, 20% consumption, then we are going up to 40%, and then we do the rest in year three, year four. And what we typically also do is to upsell. I mean, these customers ideally are growing their business, so we, of course, you know, will on-board more users.

[Christian Klein, CEO at SAP]

But what we also do, what I mentioned, and that's now really coming together under Thomas Saueressig's leadership with the RISE methodology. So take Exxon. We start with SuccessFactors, you know, hundreds of thousands of users. We modernize payroll, we modernize their commission system, we go finance, then we go downstream, and then we are working our way through the supply chain. And what you see in such a transformation journey, if we explain it wide and if we lead them, if we guide them together with our SI partners, you can see that suddenly we are talking about transportation, we are talking about warehousing, we are talking about demand and supply. Capabilities which not were all, you know, used in the on-premise days. And so we see this land and expand. That's for the LE, for the large enterprise space.

[Christian Klein, CEO at SAP]

And now, when we talk about the SME, we are putting a lot of emphasis now in this transformation also on our channel. Because when you look at our sales ratio, the channel is key. We need more channel business in the mid-market. And there, we are now just enabling our customers to not only sell finance and sell HR, they say, "Let's do procurement." And then, because of the great integration capabilities, we have a seeding, a commercial model, where we seed in a few units, you know, for entering the procurement space, for entering the travel space, and then we can actually provision the system on the fly. So mid-market customers can be live after they landed with finance. They can be live on travel in two weeks from now, in procurement, you know, and then we're gonna move our way to expand our footprint.

[Christian Klein, CEO at SAP]

That's the same module, and this is where we are massively also now expanding our partner channel. And that works, and this is also, you know, somehow not yet reflected in the cloud backlog, because clearly, of course, there is way more business to also to gain during such a transformation journey. And maybe one thing on the cloud backlog, I mean, we always talk about renewal rates and the health of a business. I mean, you can rely on, you know, this statement that once, you know, a customer made this move to the cloud and you're running the most mission-critical systems of your company in the cloud, of course, this business is sticky.

[Christian Klein, CEO at SAP]

It was sticky in the on-premise days, and you see it in the support revenue, and it will be also sticky in on the cloud side of the house, despite, of course, it's now a very modular stack.

[Operator]

We'll move to our next question from Charles Brennan with Jefferies. Please go ahead.

[Charles Brennan, Senior Vice President of Equity Research at Jefferies]

Yeah, hi. Thanks for taking my question. Can I ask two, if I can? Firstly, just a question on the enterprise architects that you're gonna be allocating to your customers. There's some concern in the channel that you don't have enough of them. Can you give us some numbers around how many you've got today and how many you think you're gonna need, and how are you gonna close that gap? And then secondly, just as a financial follow-up, Dominik, you've given us some moving parts on the cash flow. If I think about your comments that it's gonna be hard to improve cash conversion, going into 2026, is there any reason that we don't take the EUR 8 billion starting number from 2025, add operating profit after tax?

[Charles Brennan, Senior Vice President of Equity Research at Jefferies]

... add some assumption for this mid triple-digit millions EUR restructuring spend in 2025 to get us to our 2026 number? Thank you.

[Christian Klein, CEO at SAP]

I can start with the question on the enterprise architects. I mean, important to mention is we don't start from zero. Now, when you look into, you know, our MaxAttention offering, we had architects. Now we need to reskill them. Yeah, so with BTP, our enterprise architect at the data layer, with Datasphere, the modular stack, we have to do reskilling and upskilling, but that works. And we already have also enterprise architects in our services team, so we are now moving them, you know, to our RISE customers. Second, we have great academies for sales, for services, for product engineering, and they are especially on the product academy and the services academy, we are now doubling down, especially on this enterprise architect skills. So there will be further, you know, resources now coming out of our academies.

[Christian Klein, CEO at SAP]

Plus, we are doing external hiring, and there, the truffle program of course helps a lot, and that we see higher attrition in places where we don't need the skills anymore in the future, and now we can lift and shift and, you know, further invest into the skills what we need, and one of those is of course the enterprise architect. And what is so important with the enterprise architect? Of course, Accenture, Deloitte, EY, PwC, they are delivering, and they are doing the migration itself. But it's also important for us, yeah, with regard to land and expand, that we are guiding the customer on how to build a semantic layer with SAP, on how to connect the dots on the business processes, and how to infuse, you know, workflow automation with SAP on the BTP, how to use the integration Suite. And the customers are so excited.

[Christian Klein, CEO at SAP]

I mean, the feedback was so, so good, and that also helps to make our RISE offer more attractive. Yeah, because others are hearing that and say, "Hey, SAP is really doing a business transformation. They are not only doing a technical migration." And so that was a great move, and the hiring machine is on, and we will further increase, you know, the coverage, you know, of our RISE customer base in the next months. Dominik?

[Dominik Asam, CFO at SAP]

Yeah, on, on the bridge, from 2025 into 2026, your logic is certainly quite, quite straightforward. Makes sense. But don't forget, if you take EUR 8.5 billion, so I add back basically the mid triple-digit million restructuring cash out. If you add kind of depleted for that EUR 8.5 billion free cash flow in 2025, and you divide that by 10.2, you come actually to 83% cash conversion. And of course, you will match the tax, the increment of operating profit has to be tax affected, and just the tax affecting gives you a lower cash conversion on that increment. Yeah, and that's the challenge, that you basically need to find other sources for that, not to see the cash conversion being actually diluted, so to speak. So that's the math.

[Dominik Asam, CFO at SAP]

So, your approach is actually a prudent approach, I would say.

[Operator]

Our next question comes from FrederickBoulan with Bank of America. Please go ahead.

[Fredrick Boulan, Managing Director at Bank of America]

Hi, good evening, Christian, Dominik, and Alexandra. If I, if I can come back on the, on the commentary in the release about Q4 being decisive, to, for cloud revenue growth in 2025, can you, clarify a little bit what you mean by that? Very specific caveat around, around that quarter. You will face a tougher comp in Q4, but the rest of the commentary is very bullish, so it would be great to hear a bit more what you're trying to say here in that, message around decisive. Thank you.

[Christian Klein, CEO at SAP]

Yeah, look, I mean, Q4 is always our biggest quarter with regard to order entry, so also for cloud bookings and, of course, our pipeline looks good. I mean, when I compare the pipeline coverage this year compared to last year, and last year we had a very strong half year two, it looks really good. But now we have to execute and, you know, and we want to see this execution now coming, and we executed really well in half year two, in half year one, and now let's do it again in half year two. But this is, you know, of course, still up, yeah, and so we have to do it, and that is comment related.

[Dominik Asam, CFO at SAP]

More acknowledging from our perspective, that all of you tell us, how difficult the market is out there, and we just want to acknowledge that, that we will really watch the market. But, for the time being, there's nothing that should come in our way, we think. But, if we don't want to skin the bear before we really killed it, it's clear that mathematically there is an impact of what we do in Q4 for 2025 and the full year. Actually, it's still the full year, not much, but also for 2024. But it's just to recognize that, that we don't want to come across as being completely carried away and thinking nothing can happen to us. We just want to be very cautious and prudent about what, what the environment is doing.

[Dominik Asam, CFO at SAP]

But so far, we don't see these bumps in the road that so many others are talking about.

[Christian Klein, CEO at SAP]

Yes.

[Operator]

We'll move to our next question from Sven Merkt with Barclays. Please go ahead.

[Sven Merkt, Equity Research Analyst at Barclays]

Great. Good evening. Thank you for taking my question. I was wondering if you can comment on the growth of the transaction-related cloud revenues in the quarter and the outlook for H2? I'm particularly interested if there is anything in terms of comps we should consider for the second half. Thank you.

[Dominik Asam, CFO at SAP]

In terms of comps?

[Christian Klein, CEO at SAP]

Yeah, the comps between half year one and half year two. I mean, what we are seeing in the forecast is actually U.S., we have a -2% growth in Q2 on transactional cloud revenue. So far, we see actually a similar trend in half year two, slightly better. What we see in the rest of the Concur business is actually really good on the subscription side. I mentioned the GenAI use cases, so Concur business subscription is doing well. On the transaction, it also depends a little bit on the economy. I mean, what do our customers do? How much do they travel? How much will they rely on contingent workers for Fieldglass? So far, what you can expect is more or less a similar, slightly better performance in half year two.

[Christian Klein, CEO at SAP]

That's what the current forecast says. The good news is, by the way, the transactional business-

[Operator]

Well, you see, are you-

[Christian Klein, CEO at SAP]

Sorry, let me just add that, please.

[Operator]

Sorry.

[Christian Klein, CEO at SAP]

The good news is the transactional revenues, as percent of revenues, given what Christian just described, are continuously diluted. So the impact, in the bridge from current cloud backlog to cloud revenues is getting smaller and smaller. We see that already in the first half of this year compared to last year's impact, and now moving to second half, it's getting smaller. Then, of course, in 25, it's getting even smaller because if you're not really kicking back into significant growth there, it becomes a smaller and smaller part. And I also want to highlight, at the risk of stating the obvious, these kind of, slightly down numbers in transaction revenues, they are within Cloud ERP Suite growth. So the 33% we print there is already absorbing that.

[Operator]

Our next question comes from Balaji Tirupati with Citi Investment Research. Your line is now open.

[Balaji Tirupati, Research Analyst at Citi Investment Research]

Hi. Thank you. Two questions from my side. Firstly, on the ongoing transformation program. Given the program would conclude in first half of 2025, would all the benefit of program be already visible in the year, or would it be fair to assume that some of the benefits will also move to 2026, and 2026 will be the year, first year where full benefit of the program will be visible? And a second question on AI side. We have seen some of the other global software peers of yours indicate that there have been some delay in big client decision-making as they have been weighing options with regard to AI development. Are you seeing any such signs from customer side as well? Thank you.

[Christian Klein, CEO at SAP]

The connection was not very good, but let me try to answer your question. I mean, first, I guess your question was around: is there any kind of restructuring, you know, left in 2025? And as Dominik said, the bulk of the program will be executed in 2024. Yes, there are some pieces left, but this is, you know, a smaller share of the overall program. On the wage savings, what you're gonna see is, of course, also the bulk of the wage savings will be realized in 2025. But it's very important that this is, you know, not just, you know, a one-off program for one year. What we are doing with this program is also optimizing the cost base of SAP.

[Christian Klein, CEO at SAP]

We are re-reducing a lot of skills, we are optimizing, you know, our location base, and we are reallocating some, not all, some of the investments to our strategic growth areas. So that will also then lead, you know, in 2026 to come, also in a better, more cost-efficient cost structure in our P&L. And then second, of course, also, it will help us to fuel further, you know, the growth on the top line. And the second question was really hard to understand. Can you, can you repeat it?

[Balaji Tirupati, Research Analyst at Citi Investment Research]

Yes, please. The second question was more on client decision-making process in wake of development around GenAI business, business AI use cases. Some of your global peers have alluded that there have been some delay in decision-making process on account of these developments, while you are seeing some acceleration or tailwind on, because of embedded GenAI in your offerings. So how should we see that, and what is working for SAP versus some of the other global software companies? Thank you.

[Christian Klein, CEO at SAP]

Okay. Okay, I guess I got the question now. I mean, first, when we are deciding on our AI roadmap on, especially also for GenAI now, what we are looking at is, first off, on the telemetry data and the activities of our customers, of our end users in the cloud, and we have a lot of insights. That's why a lot of the roadmap, what we are having for our AI copilot tool, is really built on what do our end users do? How much efficiency gains can we do if we put tool on top? What can we do on the analytics? Where do we see a lot of analytical requests in the system? Second, on the embedded AI use cases, and before we start coding it, we always test it.

[Christian Klein, CEO at SAP]

We have industry consortiums, and we then test it for, you know, what kind of use cases work for energy, for oil and gas? What kind of use cases work for retail? I mean, I mentioned, for example, returns claims management. It's actually, you know, a big cost driver for many retailers, and there we can help. There we can actually embed it in the order management, in the channel solutions of SAP. And so this is embedded. And then we actually do with Accenture, EY, Deloitte, and others, we have our GenAI Hub, where especially large customers are coming to us and say, "Hey, in this part of the supply chain, we could see a high value for a GenAI use case." And then we do a prototyping, and then we build it via the GenAI Hub.

[Christian Klein, CEO at SAP]

We give them native access to our data. We give them native access also to our data sources across our base. And then last but not least, of course, they can also benefit from the identity and the security layer, and there we do build together very individual use cases. So that's in a nutshell how we decide and develop our GenAI use cases.

[Operator]

We'll move to our next question from Ben Castillo-Bernaus with Exane BNP Paribas. Please go ahead.

[Ben Castillo-Bernaus, Executive Director at Exane BNP Paribas]

Good evening. Thanks very much for taking my question. Just on the headcount, just coming back to your comments there, obviously, an additional 1,000-2,000 impacted roles here, and you seem to be inferring that headcount will still end roughly flat, so, you know, more hiring, rehiring than, than initially planned. Curious what prompts that decision to hire more versus to drive further cost savings, given this is effectively a free pass within the existing restructuring plan? And in terms of where you are hiring on those additional roles, could you talk about where those incremental hires are? Is this in the same areas you initially planned, or is this in different areas? Thank you.

[Dominik Asam, CFO at SAP]

I mean, the way it works on the voluntary programs is, in Germany at least, that, employees register, their interest in participating, and then we can decide, whether we accept it or not. And then again, the employee has a right to say, "Okay, I'll ultimately take it on." We have some quite, yeah, good, precedent information on how that should pan out. We've seen higher, adoption, so to speak, than initially planned on voluntary program, also to some degree on voluntary early departure programs. And then on any of these cases, what we basically had to do is to judge whether, there would be certain critical skills leaving, and, they would simply need to rehire one for one, in which case we would, of course, decline because there's no business case.

[Dominik Asam, CFO at SAP]

If, however, we could combine it with a reskilling that we say, "Okay, maybe I can reduce that headcount now that I have the opportunity, but put it in a different skill set where you have even more scarcity or, consolidate certain teams in regions which are frankly, more cost-effective," we can use these. Of course, the efficiency of that kind of rehiring is not as high as not replacing at all, but it's still there, and the EUR 200 million we added are basically the kind of partial derivative of saying more restructuring costs, but also more savings. So the factor is a kind of 4x factor, which is pretty similar to the overall package.

[Dominik Asam, CFO at SAP]

It's not super quick because of the high cost of these restructuring programs and because we need to rehire in some areas, but we still have a business case on these incremental headcount reductions. Even if we rehire because we do it in a more cost-effective way than what was the status before, and sometimes we don't rehire at all.

[Operator]

We'll move to our last question from Johannes Schaller with Deutsche Bank. Please go ahead.

[Johannes Schaller, Head of European Software & IT Services Sector Team at Deutsche Bank]

Yeah, thanks for taking my question, another one on the efficiency program, I'm afraid. I wanted to understand a little bit better how you're thinking about this kind of more medium term and conceptually. I mean, I guess the increased number of people affected now is probably not that surprising. I think Christian already alluded maybe to that a little bit after Q1, that there may be some more areas of efficiency. But would you say we're really done now, or how should we think about this going forward? I mean, we're in a scenario where, you know, your required skill set keeps on changing in the workforce. Probably you're introducing more AI tools within SAP, becoming more effective. Is there scope to do more, or how should we think about this on a maybe five-year view?

[Christian Klein, CEO at SAP]

I would say, I mean... Yeah, thanks, first of all, for the question, Johannes. And I mean, the good piece is, I mean, we are never running out of ideas, also not on efficiency. I mean, when you look at what we did at the beginning of the year, when we combined all these decentralized COO teams in SAP, we centralized our cloud operations. And what we are going to see, and, you know, when you take, for example, the headcount, you know, out of the equation for a second, what we see, of course, we can gain huge synergies.

[Christian Klein, CEO at SAP]

I mean, when you see how we can streamline now operations, how we can expand our digital marketing channel, connect it to our, you know, reseller channel in sales, how we can connect it, you know, to our, you know, back office function, I mean, that will actually just unveil a lot of additional synergies, just, you know, by really wanting SAP more end-to-end. And then we're gonna infuse, of course, automation. When we talk about AI, coding, ABAP development, we'll see, you know, a huge productivity gain. When you look into our support or the ticketing, of course, we're gonna apply GenAI. We will automate a lot of the, the ticketing. Ticket solving will be done, of course, also via our copilot. And then, as I already mentioned in contracting, we're gonna apply it. We are now rolling it out.

[Christian Klein, CEO at SAP]

So overall, inside SAP, we are rolling out currently 30 AI use cases, and, that's the way to go. And on the cloud cost margin, as we centralized our cloud operations under Thomas Saueressig now, what we can do is, we can harmonize the patching, we can harmonize the onboarding, we can harmonize, you know, all the different steps in the cloud lifecycle management. And when you see that, when, when you see that we have, you know, 20 different, you know, core ERP products, that is, of course, also giving us, you know, more efficiency gains over the time. And so these are the things which are already, you know, in the making. Next to, of course, the whole, you know, transformation on the headcount side, with also the rehiring then in the strategic growth areas, yeah.

[Alexandra Steiger, Head of Investor Relations at SAP]

Great. Thank you very much, Christian, Dominik, and this concludes our call for today. Thank you very much for joining.

[Christian Klein, CEO at SAP]

Thanks, everyone.

[Dominik Asam, CFO at SAP]

Bye.

[Operator]

Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.

Participants

Executives

• Alexandra Steiger, Head of Investor Relations
• Christian Klein, CEO
• Dominik Asam, CFO

Analysts

• Adam Wood, Managing Director and Head of European Software & Services Research at Morgan Stanley
• Balaji Tirupati, Research Analyst at Citi Investment Research
• Ben Castillo-Bernaus, Executive Director at Exane BNP Paribas
• Charles Brennan, Senior Vice President of Equity Research at Jefferies
• Fredrick Boulan, Managing Director at Bank of America
• Jackson Ader, Managing Director and Equity Research Analyst at KeyBanc Capital Markets
• Johannes Schaller, Head of European Software & IT Services Sector Team at Deutsche Bank
• Mark Moerdler, Managing Director, Senior Vice President and Senior Research Analyst at Sanford C. Bernstein & Co
• Michael Briest, Research Analyst at UBS Limited
• Mohammed Moawalla, Research Analyst at Goldman Sachs
• Sven Merkt, Equity Research Analyst at Barclays
• Toby Ogg, Managing Director and Equity Research Analyst at JPMorgan