SAP revenue grows 12% in 2019 and enhances guidance

SAP has reported revenue of €8.040 billion (+8 percent) in fourth quarter and €27.553 billion (+12 percent) in 2019.
SAP revenue in 2019
SAP generated revenue of €12,104 million from EMEA with Germany contributing €3,946 million and Rest of EMEA €8,158 million.

SAP Americas revenue touched €11,194 million with United States contributing €9,085 million and Rest of Americas €2,109 million.

SAP’s revenue from Asia Pacific Japan was €4,254 million with Japan revenue reaching €1,180 million and Rest of APJ €3,074 million.

Cloud revenue of SAP reached €6.934 billion (+39 percent) and Software licenses and support revenue touched €16.080 billion (+3 percent).

The number of employees at SAP has increased to 100,330 in 2019 as compared with 96,498 at the end of 2018. SAP has an employee base of 43,048 in EMEA 29,712 in Americas and 27,571 in Asia Pacific region.

Germany-based business software supplier has raised its annual revenue and profit outlook on Tuesday as new co-CEOs Jennifer Morgan and Christian Klein delivered a solid first set of quarterly results at the provider of business software.

Jennifer Morgan and Christian Klein became the co-CEO of SAP as the replacement for Bill McDermott, who left to join ServiceNow.

Europe’s most valuable technology company now expects adjusted operating profit to grow by between 8 percent and 13 percent in 2020, while confirming its ambition of achieving 35 billion euros ($38.8 billion) in revenue in 2023.

SAP, based in the small Rhineland town of Walldorf, has set a target of boosting margins by one percentage point a year. Acquisition-related costs slowed progress in 2019, but margin boosting should accelerate this year.

“We have great expectations for continued efficiency gains and expansion of our profitability in 2020,” said Chief Financial Officer Luka Mucic.

SAP forecast that non-IFRS operating profit will reach 8.9-9.3 billion euros in 2020, while revenues are expected to gain 6-8 percent to 29.2-29.7 billion euros.

At the mid-point of that guidance, margins would increase by 120 basis points to 30.9 percent in 2020, compared to an 80 basis point gain last year, he told reporters.

In the fourth quarter, non-IFRS operating margin at constant currency was 35.2 percent, up a percentage point from a year earlier.

Unadjusted profit fell, however, by 11 percent on account of the restructuring exercise and costs related to the $8 billion takeover in 2018 of Qualtrics, which specializes in measuring customer sentiment.

SAP clients

SAP revenue in Applications, Technology & Services (AT&S) segment rose 5 percent to €6.97 billion in Q4.

SAP added approximately 1,200 SAP S/4HANA customers in the fourth quarter, taking total adoption to more than 13,800 customers, up 24 percent.

SAP said approximately 40 percent of the additional SAP S/4HANA customers were net new in the fourth quarter.

Ford Motor, Zalando, die Autobahn GmbH, Decathlon, E.ON, Lockheed Martin, MINTH Group, and Roche selected SAP S/4HANA. Vodafone recently went live on a single global instance of SAP S/4HANA.

Additional go lives include BDO, Deutsche Telekom, Sandvik Mining and Construction, ARAMEX, Aareal Bank and PayPal Giving Fund.

Kubota Corporation, Gate Gourmet Switzerland, Centaur Holding and Tom Tailor are deploying SAP S/4HANA in part or entirely in the cloud. Mercedes Benz Formula E is now live on SAP S/4HANA Cloud.

More than 450 customers selected SAP SuccessFactors Human Experience Management solutions since their launch in May 2019. Landesbank Baden-Württemberg, Genting Hong Kong, and Universal Beijing Resort were some of many competitive wins and Eurobank, Computacenter and Chalhoub Group went live on SAP SuccessFactors this quarter.

The Nielsen Company, Royal Dutch Shell, Chevron, Carhartt, Intersport Deutschland, and Aldo Group all chose SAP C/4HANA solutions in Q4.

Barclaycard, Telecom Italia, GetYourGuide and Allegiant Travel Company selected SAP’s business technology platform and analytics cloud solutions in the fourth quarter.

Karcher, Electrolux, Coca-Cola Hellenic Bottling Company, GEA Group, Repsol, and New York Yankees chose SAP’s Intelligent Spend Group solutions in the fourth quarter.

SAP said Qualtrics segment revenue was €156 million.

Volkswagen Australia, JPMorgan Chase, Allianz, Alaska Airlines, ExxonMobil, Santander, Samsung and the Hearst Corporation and many others selected Qualtrics.

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