Elliott Management Supportive of SAP Initiatives Comprehensive Review and Operational Targets will Drive Significant Value

NEW YORK–(BUSINESS WIRE)–Elliott Management Corporation (“Elliott”), which manages funds that collectively own €1.2 billion in common stock and economic equivalents of SAP SE (the “Company” or “SAP”), today released a statement supporting SAP’s initiation of a comprehensive review, formation of a Special Executive Board Committee and implementation of new, multi-year operational targets. In the statement, Elliott Partner Jesse Cohn and Portfolio Manager Jason Genrich also praised CEO Bill McDermott and CFO Luka Mucic on the Company’s commitment to these initiatives:

“Elliott is highly supportive of the initiatives announced today, and we commend CEO Bill McDermott, CFO Luka Mucic and the entire SAP team for taking these steps. SAP is one of the great technology franchises in the world and one of the only scale software businesses with growing on-premise revenue alongside 30%+ growth in cloud revenue. The Company’s stock has been consistently undervalued relative to its revenue growth, and today’s announcement lays the groundwork for substantial value realization.

“With SAP’s key strategic acquisitions in place and a multi-year S4/HANA product cycle ahead, now is the time for focused execution on these operational opportunities. SAP has set the right targets with a 75% cloud gross margin and 500 basis points of operating margin improvement. These targets balance continued revenue growth and accelerating profitability. The operational review and Special Executive Board Committee should ensure that these targets are achieved, and we look forward to hearing further details and a specific timeline at the Special Capital Markets Day later this year. We believe SAP’s management team can drive toward a highly successful result.

“The combination of SAP’s growth profile, operational targets and forthcoming share repurchase analysis can generate tremendous earnings growth over the next several years. Elliott sees the potential for the Company to achieve earnings per share of €8.50 in 2023. This level of earnings growth can yield substantial returns to shareholders and realize a value-creation opportunity that is rarely available at SAP’s scale.”

About Elliott

Elliott Management Corporation manages two multi-strategy funds which combined have approximately $34 billion of assets under management. Its flagship fund, Elliott Associates, L.P., was founded in 1977, making it one of the oldest funds of its kind under continuous management. The Elliott funds’ investors include pension plans, sovereign wealth funds, endowments, foundations, funds-of-funds, high net worth individuals and families, and employees of the firm.

Disclaimer

Elliott intends to review its investments in the Company on a continuing basis and depending upon various factors, including without limitation, the Company’s financial position and strategic direction, the outcome of any discussions with the Company, overall market conditions, other investment opportunities available to Elliott, and the availability of Company securities at prices that would make the purchase or sale of Company securities desirable, Elliott may at any point in time (in the open market or in private transactions, including in the short term and since the inception of Elliott’s position) buy, sell, cover, hedge or otherwise change the form or substance of any of its investments (including any or all Company securities or related financial instruments) to any degree in any manner permitted by law and expressly disclaims any obligation to notify others of any such changes. Elliott also reserves its right to take any actions with respect to its investments in the Company as it may deem appropriate.

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