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Thứ Năm, 16 tháng 1, 2014

SAP Sales Targets See Cloud on Horizon - Wall Street Journal

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Jan. 16, 2014 11:51 a.m. ET


FRANKFURT—Investors expect Germany's SAP AG SAP.XE -0.30% SAP AG Germany: Xetra 60.80 -0.18 -0.30% Jan. 16, 2014 5:35 pm Volume : 2.33M P/E Ratio 23.30 Market Cap €74.91 Billion Dividend Yield 1.40% Rev. per Employee €259,709 01/16/14 SAP Sales Targets See Cloud on... 01/10/14 SAP Operating Profit Grows on ... 01/07/14 HR Technology Startups Saw See... More quote details and news » SAP.XE in Your Value Your Change Short position to scrap its midterm sales and profitability targets on or around Tuesday, when it releases its earnings figures, because weak demand and changing customer preferences are transforming the business-software industry.


"I expect SAP to part with the targets for 2015," said Franz Weis, a fund manager with French asset management firm Comgest.


SAP—the world's third-largest software maker after Microsoft Corp. and Oracle Corp. ORCL +0.10% Oracle Corp. U.S.: NYSE $38.45 +0.04 +0.10% Jan. 16, 2014 11:59 am Volume (Delayed 15m) : 5.97M P/E Ratio 16.16 Market Cap $172.75 Billion Dividend Yield 1.25% Rev. per Employee $312,933 01/16/14 SAP Sales Targets See Cloud on... 01/08/14 Minnesota Governor Blasts IBM ... 01/08/14 HR Software Acquisitions Conti... More quote details and news » ORCL in Your Value Your Change Short position lost more than €3 billion ($4 billion) in market value last week when investors dumped shares after it disclosed sharply-slowed revenue growth. Revenue rose 3.6% last year, compared with 14% in 2012.


The company has targeted revenue of €20 billion for 2015, but analysts said that goal looked overly ambitious after the 2013 revenue came in at €16.81 billion.


SAP spokesman Daniel Reinhardt said the company "will comment on its guidance at the press conference on Jan. 21," but not before.


A year ago, both Chief Executive Bill McDermott and analysts predicted SAP would easily beat its 2015 target. But a sluggish world economy made customers reluctant to invest in SAP's software for accounting and customer relations management.


SAP is expanding aggressively into cloud applications, accessed via the Internet rather than installed on a customer's computers. Unlike traditional software, which is purchased upfront, cloud applications generate fees as they are used, which has shifted SAP's revenue stream into the future.


Cloud fees may ultimately exceed the price of equivalent software licenses, analysts say. But initially vendors' revenues drop. Cloud software also requires heavy initial development investments, depressing profitability.


"No one expects SAP to reiterate the revenue and margin targets for 2015," said Commerzbank analyst Thomas Becker.


Mr. Weis at Comgest said his €1.4 billion Growth Europe fund has cut SAP shares to around 4% of its holdings from 6%, after third-quarter figures indicated customers are moving more rapidly to cloud products than he had expected.


SAP's Mr. McDermott last year predicted revenue "could be €1 billion, €2 billion more" than the €20 billion target for 2015. Commerzbank's Mr. Becker estimates 2015 revenue could be €19.5 billion, compared with his previous prediction of €23 billion.


Swiss bank UBS UBSN.VX +0.53% UBS AG Switzerland: SWX Europe CHF18.93 +0.10 +0.53% Jan. 16, 2014 5:30 pm Volume : 13.63M P/E Ratio 111.35 Market Cap CHF72.34 Billion Dividend Yield 0.79% Rev. per Employee CHF598,949 01/10/14 UBS Hands High-Yield Deal Make... 01/09/14 Advisers See REIT Correlations... 12/24/13 Detroit, Banks Agree To New Te... More quote details and news » UBSN.VX in Your Value Your Change Short position said in a research note that it now sees sales at €18.64 billion next year and SAP's operating margin at just below 34%, missing the company's 35% goal. UBS predicted SAP will reach the targets only in 2017.


SAP isn't alone in experiencing a slowdown, Commerzbank's Mr. Becker noted. Rivals including Microsoft, Oracle and International Business Machines Corp. IBM +0.55% International Business Machines Corp. U.S.: NYSE $188.78 +1.04 +0.55% Jan. 16, 2014 11:59 am Volume (Delayed 15m) : 2.19M P/E Ratio 12.93 Market Cap $203.86 Billion Dividend Yield 2.02% Rev. per Employee $233,407 01/16/14 Canada Stocks to Watch: Bombar... 01/12/14 What's the Deal 01/11/14 Corporacion America Buying Bat... More quote details and news » IBM in Your Value Your Change Short position face similar situations.


Last year "was not a good year for SAP due to macroeconomic developments and due to the structural shift to the cloud," Mr. Becker said. As a result, investors are braced for a change in targets, he added.


"Institutional investors are focused on SAP's vision for 2017 and their adaption of the business model to the cloud," said Mr. Becker.


Write to Friedrich Geiger at friedrich.geiger@wsj.com







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