German verbs must agree with the subject in person and number. 'Sie' (formal 'you') is third person plural in form, so the verb 'haben' (to have) conjugates as 'Haben'. 'Habe' is first person singular ('I have'), 'Hast' is second person singular informal ('you have'), and 'Hat' is third person singular ('he/she/it has'). The formal 'Sie' always takes the plural verb form.