SAP Raises 2021 Targets on Expected Cloud Push -- Update
21 Julio 2021 - 01:41AM
Noticias Dow Jones
By Mauro Orru
SAP SE said Wednesday that operating profit and revenue fell in
the second quarter, but the German software company raised its
targets for the year as it banks on cloud revenue growth as part of
its strategy to focus on a more predictable source of income than
software-licenses.
Reporting on a non-IFRS basis, SAP said operating profit for the
quarter slipped to 1.92 billion euros ($2.26 billion) from EUR1.96
billion for the second quarter of 2020, with its operating margin
falling to 28.8% from 29.1%.
However, net profit increased to EUR2.06 billion from EUR1.38
billion last year.
Total revenue fell to EUR6.67 billion from EUR6.74 billion, with
cloud revenue up to EUR2.28 billion from EUR2.04 billion but
software-licenses revenue down to EUR650 million from EUR773
million.
Concur, SAP's expense-accounting and travel-booking platform,
began stabilizing as the crippling effects of the coronavirus
pandemic on travel, especially in Europe and North America,
subside.
SAP is pivoting away from software-licenses sales, once its
biggest revenue stream, to subscription-based cloud services,
targeting a more profitable and predictable business model based on
recurring revenue.
The company is seeking a share of more predictable revenue of
about 75% in 2021, up from 72% last year. In the second quarter,
the share stood at 76%, a 3% increase from the second quarter last
year.
"This has been another strong quarter with accelerating growth
for SAP's cloud portfolio. We saw excellent customer momentum and
adoption and are raising our outlook for revenue and profit," SAP
Chief Financial Officer Luka Mucic said.
SAP now expects non-IFRS operating profit at constant currencies
between EUR7.95 billion and EUR8.25 billion. It previously guided
for operating profit between EUR7.8 billion and EUR8.2 billion.
Non-IFRS cloud revenue at constant currencies should come in
between EUR9.3 billion and EUR9.5 billion. SAP previously expected
cloud revenue between EUR9.2 billion and EUR9.5 billion.
Chief Executive Christian Klein, who became sole chief executive
of the business software group in April last year, said SAP is
seeing strong adoption of its cloud portfolio after the January
launch of Rise With SAP, a service for businesses to migrate their
IT systems to the cloud.
SAP closed deals with more than 250 customers in the second
quarter, including Etihad Airways and Siemens Energy AG, and the
company had factored in a decline in software-licenses revenue as
more customers transition to the subscription offering.
"We're seeing strong adoption of our cloud portfolio as
customers select SAP for their business transformation. Our
strategy is working," Mr. Klein said.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
July 21, 2021 02:33 ET (06:33 GMT)
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