Software Maker SAP Eyes Continued Growth I 2012
-- SAP expects 2012 core revenue to rise between 10% to 12%
-- Also expects operating profit to rise this year
-- Company sticks to its mid-term targets
-- Seeking to expand database business
(Adds Co-CEO comment in paragraph four.)
Software and software-related service revenue, which includes new licenses and maintenance, is forecast to rise between 10% and 12% in 2012, said the company, whose software manages business tasks such as sales, inventory and accounting. Operating profit is expected to be between EUR5.05 billion and EUR5.25 billion, up from EUR4.71 billion last year.
SAP has been holding up well in the face of economic uncertainty and already reported a rise in fourth-quarter revenue and operating profit on Jan. 13 as license sales--the key number for software makers as they generate a stable flow of support revenue-- rose a better-than-expected 16% on the year to EUR1.74 billion in the final quarter.
The company, based in Walldorf in southwestern Germany, won "significant" market share last year, and Co-Chief Executive Bill McDermott said at a media conference in Frankfurt Wednesday that SAP's pipeline of potential contracts even stronger than a year ago.
Fourth-quarter profit after tax more than doubled to EUR1.2 billion, according to IFRS reporting standards, compared with EUR434 million a year earlier when the figures were burdened by a huge rise in provisions for the copyright litigation with archrival Oracle Corp. (ORCL), SAP said Wednesday. Those provisions have since been lowered again.
The software maker is targeting total annual revenue of more than EUR20 billion by 2015, up from about EUR14 billion last year, helped by new offerings including Internet-based subscription software, mobile solutions and technology that allows super-fast data analytics. The 2015 margin target stands at 35%.
SAP and Oracle are the two biggest makers of business application software. But the Redwood Shores, Calif.-based company also has a big database business, meaning SAP is not only a fierce competitor but also an important reseller of Oracle databases.
The German company said Wednesday it wants to expand its own database activities and strengthen ties with Sybase, a U.S.-based maker of database and mobile software it bought for $5.8 billion in 2010.
Last month, the company announced a $3.4 billion bid for SuccessFactors Inc. (SFSF), a provider of cloud-based software that helps companies manage their employees and carry out performance reviews.
Cloud services, which provide access to vast amounts of data and software stored on the Internet, are growing quickly as they are less expensive and easier to use than comprehensive on-site installations. SAP plans to close the SuccessFactors deal this quarter and said it aims to generate cloud revenues of EUR2 billion in 2015.
SAP's 2012 growth guidance for software and software-related service revenue includes a contribution of up to two percentage points from SuccessFactors, but the company already said in December the deal will dilute 2012 profits.
Software Maker SAP Eyes Continued Growth I 2012
SAP issues guidance on a non-IFRS basis, which includes some revenue that isn't recognized under IFRS and excludes certain costs and gains, and also adjusts its forecasts for currency swings.
By: http://online.wsj.com
-- SAP expects 2012 core revenue to rise between 10% to 12%
-- Also expects operating profit to rise this year
-- Company sticks to its mid-term targets
-- Seeking to expand database business
(Adds Co-CEO comment in paragraph four.)
By Philipp Grontzki Of DOW JONES NEWSWIRESFRANKFURT (Dow Jones)--German enterprise software giant SAP AG (SAP) said Wednesday it expects continued growth this year because of strong momentum in its business despite the backdrop of macroeconomic woes in Europe.
SAP has been holding up well in the face of economic uncertainty and already reported a rise in fourth-quarter revenue and operating profit on Jan. 13 as license sales--the key number for software makers as they generate a stable flow of support revenue-- rose a better-than-expected 16% on the year to EUR1.74 billion in the final quarter.
The company, based in Walldorf in southwestern Germany, won "significant" market share last year, and Co-Chief Executive Bill McDermott said at a media conference in Frankfurt Wednesday that SAP's pipeline of potential contracts even stronger than a year ago.
Fourth-quarter profit after tax more than doubled to EUR1.2 billion, according to IFRS reporting standards, compared with EUR434 million a year earlier when the figures were burdened by a huge rise in provisions for the copyright litigation with archrival Oracle Corp. (ORCL), SAP said Wednesday. Those provisions have since been lowered again.
The software maker is targeting total annual revenue of more than EUR20 billion by 2015, up from about EUR14 billion last year, helped by new offerings including Internet-based subscription software, mobile solutions and technology that allows super-fast data analytics. The 2015 margin target stands at 35%.
SAP and Oracle are the two biggest makers of business application software. But the Redwood Shores, Calif.-based company also has a big database business, meaning SAP is not only a fierce competitor but also an important reseller of Oracle databases.
The German company said Wednesday it wants to expand its own database activities and strengthen ties with Sybase, a U.S.-based maker of database and mobile software it bought for $5.8 billion in 2010.
Last month, the company announced a $3.4 billion bid for SuccessFactors Inc. (SFSF), a provider of cloud-based software that helps companies manage their employees and carry out performance reviews.
Cloud services, which provide access to vast amounts of data and software stored on the Internet, are growing quickly as they are less expensive and easier to use than comprehensive on-site installations. SAP plans to close the SuccessFactors deal this quarter and said it aims to generate cloud revenues of EUR2 billion in 2015.
SAP's 2012 growth guidance for software and software-related service revenue includes a contribution of up to two percentage points from SuccessFactors, but the company already said in December the deal will dilute 2012 profits.
Software Maker SAP Eyes Continued Growth I 2012
SAP issues guidance on a non-IFRS basis, which includes some revenue that isn't recognized under IFRS and excludes certain costs and gains, and also adjusts its forecasts for currency swings.
By: http://online.wsj.com
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