SAP, THE world’s biggest maker of business software, aims to set a fresh profit record this year as it banks on robust corporate spending on technology.
Investors have worried that they may have overestimated the resilience of corporate tech spending in a deteriorating global economy, especially after SAP’s big rival Oracle reported weak quarterly results last month.
But there have been increasing signs that the outlook may not be as dim as some feared. IBM, the world’s largest technology services company, brimmed with confidence for 2012 as it posted strong results last week.
The German company expects operating profit will rise to between €5.05 billion and €5.25 billion at constant currencies from a 40-year record level of €4.71 billion in 2011. SAP had already reported a better-than-expected rise in fourth-quarter sales and profit on January 13th.
It attributed the strong performance to demand for its biggest software products and growing demand for its HANA offering, which allows companies to analyse business data quickly, and said it had won market share overall.
SAP said it expects its 2012 revenue from software and software-related services to increase by 10 to 12 per cent in the full year, of which up to 2 percentage points will be contributed by the recently acquired SuccessFactors.
Most analysts had said they expected SAP to aim for 6 to 10 per cent revenue growth from software and software-related services this year.
SAP agreed to buy SuccessFactors for $3.4 billion last month to keep up with rivals in the race for cloud-computing business.
Its 2012 earnings will be diluted by the purchase, which will have a positive impact from 2013 on.
“We are well positioned to exceed our €20 billion revenue target and reach a 35 per cent operating margin in 2015,” chief financial officer Werner Brandt said. The company, based in Walldorf near Heidelberg, built its business on large, integrated software systems sold to many of the world’s biggest companies, such as Apple, GE, McDonald’s and Pepsi.
SAP has about 176,000 customers and bills itself as the world’s leading provider of software for managing supply chains and customer relations. – (Reuters)
