SAP continues to rely on the cloud


SAP continues to rely on the cloud

The German software group SAP increased sales and profits by 2 percent each in the past financial year. The company now wants to grow, especially in the cloud business. But the bottom line is that the ERP manufacturer expects stagnating operating results.

SAP has presented figures for the 2021 financial year. The company achieved sales of 27.8 billion euros, which corresponds to an increase on the previous year (27.3 billion euros) .

The ERP manufacturer recorded a decline of 30 percent in operating profit, from 6.6 billion euros to 4.6 billion euros according to IFRS (International Financial Reporting Standards). The bottom line is a net profit of 5.38 billion euros, 2 percent more than the 5.28 billion euros of the previous year. For comparison: In the annual report of the previous year, SAP reported a profit growth of 567 percent.

SAP announced that the financial result exceeded market expectations. The Walldorf-based company specifically mentions the revenues in the cloud sector, which grew by 17 percent to 9.42 billion euros. Total cloud and software revenue increased 4 percent to €24.08 billion. 

Meanwhile, service revenues fell by 8 percent to 3.76 billion euros compared to the 2020 financial year. According to SAP, this is primarily due to the sale of the communications unit SAP Digital Interconnect, which contributed service revenues of EUR 282 million in the 2020 financial year.

SAP continues to buy

SAP expects the cloud business to accelerate further in the current financial year. Sales are expected to increase by 23 to 26 percent. According to the forecast, the non-IFRS operating result should be between 7.8 and 8.25 billion euros. This range would correspond to a stagnant growth rate up to a minus of 5 percent.

In a separate announcement, SAP also announced that it intends to take over the majority of US fintech Taulia. The aim is to help corporate customers improve the availability of liquid funds and optimize their cash flow. It is not known how much money SAP put into the transaction.

One of the new Swiss SAP customers is the Coop subsidiary Fust. The electronics retailer has shut down its self-made ERP software including peripheral systems, as you can read here .