SAP: Profit through job cuts

Europe’s largest software manufacturer, SAP, benefited in the first quarter from its major job cuts in the previous year.

As many employees only left the company in the first few months of the year, the savings from job losses were largely felt in the first three months of this year. Adjusted for special effects, earnings before interest and taxes rose by 60 percent to 2.46 billion euros, as the DAX heavyweight announced on Tuesday evening after the close of the US stock exchange. This was significantly more operating profit than analysts had expected. The corresponding margin rose sharply to 27.1 percent.

Sales to customers continue to go well for the Walldorf-based company. Sales climbed by twelve percent to 9.01 billion euros, as cloud-based software offerings drove business. Bookings for apps from the web rose by 28 percent over the next twelve months. CEO Christian Klein confirmed the outlook for the year on a currency-adjusted basis – however, the company referred to higher exchange rate risks and the uncertain economic environment. The weak dollar resulting from US President Donald Trump’s erratic tariff policy could have a negative impact on business; the US is SAP’s largest market. The trade conflict also threatens to reduce economic output worldwide.

On the bottom line, SAP was once again able to report a profit, after the costs of job restructuring had had a negative impact in the same quarter of the previous year. Net profit for the quarter amounted to 1.80 billion euros.

dpa