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SAP Profits Tumble 21 Percent, Despite Strong Cloud Growth

The company is upgrading guidance for 2020

By CBR Staff Writer

SAP profits tumbled by over a fifth in 2019 — a fall the German software giant blamed on the costs of its Qualtrics acquisition and a global restructuring programme that has seen it lay off over 4,000 members of staff amid a “root and branch” overhaul.

(Despite the cuts it ended 2019 with 3,832 more staff than in Q4 2018).

IFRS profits fell 21 percent to €4.4 billion, but the company blamed one-off costs for the sharp reduction, and updated its guidance for 2020 on strong cloud performance, which saw new cloud bookings climb 25 percent through 2019 to hit €2.27 billion.

It now expects non-IFRS 2020 revenue be in the €29.2–€29.7 billion range.

Total 2019 revenues climbed eight percent to €8.04 billion. Overall cloud revenues climbed 39 percent. Software licenses and support revenue were up three percent.

See also: SAP Pledges Root and Branch Operational Overhaul

“Approximately 1,200 SAP S/4HANA customers were added in the quarter, taking total adoption to more than 13,800 customers, up 24 percent year over year,” the company said, referring to its flagship enterprise resource planning (ERP) software.

Predicting a robust 2020, SAP said that through 2018 to 2023 it expects to more than triple non-IFRS cloud revenue (2018: €5.03 billion) and grow overall to more than €35 billion in non-IFRS total revenue (2018: €24.74 billion).

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See also: User Group Conference Reveals Trust isWaning in SAP

Computer Business Review will update this report after an earnings call later today.

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