To Our Stakeholders
SAP stock rose almost 50% in 2012 and thus clearly outperformed the significant benchmark indexes. In July 2012, SAP became the most valuable publicly traded German company on the Deutsche Aktienindex (DAX 30). Our dialog with investors focused on SAP’s growth strategy for SAP HANASAP HANAFlexible, data-agnostic, in-memory platform that helps organizations analyze their business operations, using huge volumes of detailed transactional and analytic information from virtually any data source. The platform provides the foundation for innovati and on the acquisitions of SuccessFactorsSuccessFactorsSAP completed its acquisition of SuccessFactors, an SAP company, in February 2012. The company is a leading provider of cloud-based business execution software, and delivers business alignment, team execution, people performance, and learning management s and
AribaAribaSAP’s acquisition of Ariba, Inc., a leading cloud-based business commerce network, was completed on October 1, 2012. All cloud-related supplier assets of SAP are now consolidating under Ariba., which further strengthened our cloud solutions growth area.
Stock markets weather debt crisis and economic concerns
The euro area debt crisis and anxiety about the global economy predominated the trading year 2012. Yet, despite these difficult conditions, share prices rose noticeably in most markets around the world during the course of the year.
German stocks started off the year better than expected: In mid-March, the DAX hit the 7,000-point mark for the first time since the end of July 2011. Overall, the index rose in the first six months from 5,898.35 points on December 30, 2011, to 6,946.83 points on March 30, 2012. The positive market sentiment was thanks first and foremost to a new rescue package for Greece, including the successful restructuring of the nation’s debt and cash flow injections made by the European Central Bank (ECB).
In the second quarter, however, the stock exchanges were increasingly weighed down by the political situation in Greece, financial problems with the Spanish banks, concerns about Spain’s financial stability, and worries about global economic growth. Spain’s refinancing problems at the beginning of June triggered unrest in the markets, causing the DAX to drop to 5,969.40 points on June 5, its lowest level for the year.
This was followed by an upward trend that lifted the DAX past 7,000 points in mid-August again. Worldwide share prices were given an additional boost at the beginning of September when the ECB decided to buy unlimited euro area government bonds (subject to specific conditions). Around the same time, the German Federal Constitutional Court approved the euro rescue package, while the U.S. Federal Reserve announced plans to stimulate the global economy by making substantial securities purchases and maintaining a low interest rate policy. Against this encouraging backdrop, the DAX rallied to 7,451.62 points, temporarily its highest level of the year, on September 21.
In the weeks that followed, concerns about the Spanish economy and fears of a global economic downturn curbed the markets, so that the DAX hovered in a comparatively narrow range of 260 points until the beginning of November. The conflict in the Middle East, the euro crisis, and U.S. budgetary concerns pushed the DAX back down below 7,000 points on November 16. However, this was soon followed by an optimism-driven stock market rally that pushed the DAX to its peak of the year at 7,672.10 points on December 20, which was also its highest level in five years. The index finished 2012 at 7,612.39 points.
SAP Stock Clearly Outperforms Significant Benchmark Indexes
In 2012, SAP stock rose 48.6%, thus clearly outperforming the significant benchmark indexes. This is the fifth largest increase among DAX-listed companies. The DAX 30 and Dow Jones EURO STOXX 50®, which cover 50 large companies from euro area countries, only gained 29.1% and 13.8% respectively,while the U.S. Dow Jones Industrial Average index managed to win just 7.3%. The S&P 500 improved by 13.4% and the S&P North American Technology Software Index rose 16.7%. Comparing across industries, SAP stock performed well above average here as well: The Technology Peer Group Index (TechPGI), which lists ten major technology companies, only gained 11.6% in 2012. In July 2012, SAP became the most valuable company listed on the DAX, with a market capitalization of €62.8 billion.
SAP stock started the first quarter of 2012 at €40.85, the Xetra closing price on December 31, 2011. It reached its lowest level for the entire year of €41.45 shortly thereafter on January 12. The announcement of our 2011 financial results – the best year ever in the company’s 40-year history to this point – then triggered an upwards trend that pushed SAP stock past the €50.00 mark on February 24. The last time the stock had moved to this level was in October 2000. In addition, SAP had one day earlier announced that in light of the record year and on the occasion of SAP’s 40th anniversary, it would recommend to the Annual General Meeting of Shareholders (subject to Supervisory Board approval) an increase in the dividend per share to €1.10, which included a special dividend of €0.35 per share to mark the company’s anniversary. This represented an overall increase of 83% over the previous year’s dividend. SAP’s successful showing at the annual CeBIT computer industryindustryAn economic sector characterized by a value chain, business processes, and a set of products and services that is typical or common for all companies belonging to this sector. fair in Hannover, Germany, and the announcement of additional investments totaling US$450 million in the Middle East and Africa region boosted the SAP share price even higher; it reached its peak of the first quarter on March 15 and 16, at €54.51, amid a positive market environment.
Key Facts About SAP Stock/SAP ADRs
|Germany||Berlin, Frankfurt, Stuttgart|
|United States (ADR)||New York Stock Exchange|
|IDs and symbols|
|NYSE (ADRs)||803054204 (CUSIP)|
|Reuters||SAPG.F or .DE|
|Weight (%) in indexes at 12/31/2012|
|DAX 30||8.30 %|
|Prime All Share||6.77 %|
|Dow Jones STOXX 50||2.02 %|
|Dow Jones EURO STOXX 50||3.51 %|
In the second quarter, SAP stock movement more or less mirrored overall market behavior. Doubts about Spain’s financial strength, coupled with ongoing political uncertainty in the euro area, caused the share price to fall below the €50.00 mark again. The publication of first-quarter earnings on April 25, however, ultimately nudged SAP stock back up to €50.51 on the trading days that followed. SAP stock consequently slid to €44.16, its low point of the quarter, on June 4, before eventually recovering somewhat to end the half year at €46.55.
Publication of strong second-quarter figures in the latter half of July led to a renewed upswing in the share price, which climbed to €52.30 on July 30. In August, it hovered in a comparatively narrow range of €51.26 to €52.90 until the markets perked up once again, pushing SAP stock to its high for the quarter of €56.69 on September 25.
The beginning of the fourth quarter was fraught with worries about Spain's sovereign debt, which put pressure on the markets. On October 23, SAP stock fell to €52.86, its lowest level of the quarter. The very next day, however, the announcement of record software revenue in the third quarter buoyed SAP stock upwards, which continued to climb until a lull in general stock sentiment in mid-November slowed the pace somewhat. On November 29, amid positive market sentiment, SAP stock broke the €60.00 barrier and on December 11, reached €61.43, its highest level for the year and best performance since March 2000. It closed the fourth quarter of 2012 at €60.69.
SAP stock fell below the €60.00 mark again in mid-January 2013, following the announcement of initial preliminary figures for the fourth quarter and for 2012 as a whole. SAP had produced record revenues and boosted its operating results (non-IFRS, at constant currencies) to €5.02 billion in 2012, yet a number of investors had apparently expected even better figures. Publication of the entire preliminary results and outlook on January 23, 2013, however, subsequently pushed SAP stock back up to €59.20.
Dividend Payout of €0.85 per Share
We believe our shareholders should benefit appropriately from the profit the Company made in 2012. We wish to continue our dividend policy, which is that the payout ratio should be more than 30% of the profit after tax of the Group.
Therefore, the Executive Board and the Supervisory Board will recommend that the shareholders approve a total dividend of €0.85 per share for fiscal year 2012 at the Annual General Meeting of Shareholders. For 2011, in addition to the regular dividend of €0.75 per share, SAP also paid a special dividend of €0.35 in celebration of SAP AG’s 40th anniversary. Without the consideration of the special dividend for 2011, this corresponds to a year-on-year dividend increase of €0.10, or 13%, in 2012. Based on this recommendation, the overall dividend payout ratio (which here means total distributed dividend as a percentage of profit) would be 36% (2011: 26% excluding the special dividend and 38% including the special dividend).
Capital Stock Increased
SAP's capital stock on December 31, 2012, is €1,228,504,232.00 (2011: €1,228,083,382.00). It is issued as 1,228,504,232 no-par shares, each with an attributable value of €1 in relation to the capital stock.
Larger Free Float
The proportion of our stock in free float increased again slightly in 2012. Applying the definition accepted on the Frankfurt Stock Exchange – which excludes treasury stock from the free float – on December 31, 2012, the free float stood at 74.4% (December 31, 2011: 73.3%). In January 2013, approximately 22.7% (January 2012: 23.6%) of the stock was under the control of three founders and their trusts and holding companies. U.S. institutions remained the next largest group of shareholders, holding around 19.4% (19.3%) of the stock. Institutions in the United Kingdom and Ireland held about 13.6% (12.9%), followed by Continental European investors outside Germany, who held approximately 12.8% (12.2%). Institutions in Germany held 7.8% (7.9%) and investors from the rest of the world held 3.0% (3.1%) of the stock in January 2013. Private or unidentified investors held 17.7% (17.8%). SAP held 3.0% (3.1%) of the stock in treasury.
Return on SAP Common Stock – WKN 716460/ISIN DE0007164600
Percent, unless otherwise stated
|Initial investment €10,000|
|Date of investment||12/31/2002||12/31/2007||12/31/2011|
|Period of investment||10 years||5 years||1 year|
|Value on 12/31/121) in €||36,415||18,538||15,211|
|Average annual return||13.8||13.1||52.1|
|DAX 30 Performance – total return index||10.2||–1.2||29.1|
|REX General Bond – total return index||4.9||6.4||4.6|
|S&P 500 Composite – total return index||4.7||3.8||14.2|
|S&P North American Technology Software Index – price index||7.1||6.8||15.6|
|1) Assuming all dividends were reinvested.
Return on SAP ADRs – 803054204 (CUSIP)
Percent, unless otherwise stated
|Initial investment US$10,000|
|Date of investment||12/31/2002||12/31/2007||12/31/2011|
|Period of investment||10 years||5 years||1 year|
|Value on 12/31/20121) in US$||45,202||16,760||15,396|
|Average annual return||16.3||10.9||54.0|
|S&P 500 Composite – total return index||7.1||1.7||16.0|
|1) Assuming all dividends were reinvested.|
Communication with Investors
Our directors and senior officers again aimed for the greatest possible transparency and openness in their continuous dialog with our shareholders. In several hundred one-on-one meetings held at SAP, during investor road shows worldwide, and at investor events, we answered inquiries from institutional investors and analysts about our business. We also held telephone conferences and analyst meetings when we published our quarterly results. Investor presentations at the SAPPHIRE NOWSAPPHIRE NOWSAP’s signature business technology event and the largest SAP customer-driven conference is held annually in several locations around the globe. The global event in the United States is co-located with the Americas’ SAP Users’ Group (ASUG) annual conferen... customer conferences, which took place in Madrid, Spain; in Orlando, Florida, in the United States; and in Beijing, China, were key elements of our communication with the financial markets. These events focused on the growth areas of mobile and cloud computingcloud computingGeneric term for flexible, IT-related services available through, or hosted on, the Internet for consumers and business, including storage, computing power, software development environments, and applications, combined with service delivery. Accessed as n, as well as SAP HANASAP HANAFlexible, data-agnostic, in-memory platform that helps organizations analyze their business operations, using huge volumes of detailed transactional and analytic information from virtually any data source. The platform provides the foundation for innovati. In addition, SAP engages in regular dialog with "socially responsible investors" (SRIs), by providing insight into SAP´s environmental, social, and corporate governance policies.
Comprehensive Service for Private Investors
Providing a full service for retail investors is a priority for SAP. Our services for private investors include the shareholder hotline, the e-mail contact at investor(at)sap.com, and investor relations information on our Web site. There is a range of information for investors about SAP and SAP stock online, including a text message service, press releases delivered by e-mail, Twitter feeds, and our quarterly SAP Investor magazine, which investors can subscribe to free of charge. We also publish an overview of the latest analyst assessments in collaboration with Vara Research. All key events at which members of our Executive Board speak to financial analysts and institutions are broadcast live on the Internet, and we post the presentation materials on the Investor Relations Web site and on other online slide hosting services. Our investor relations team presented information at stock exchanges, shareholder forums, and shareholder conventions in Germany and in the United States, for example, at the BetterInvesting National Convention in Houston, Texas.