The Baden-Württemberg software group SAP achieved its annual targets in day-to-day business with a solid final quarter in the past financial year.
As the board of directors reported today from the company's headquarters in Walldorf, earnings before interest and taxes adjusted for special effects fell by 2 percent to 8.03 billion euros.
Annual sales rose by eleven percent to 30.9 billion euros, also thanks to the increasing business with cloud software for use over the network.
But without the weak euro, sales would only have increased by 5 percent.
The bottom line is that net profit fell by a good two-thirds to 1.71 billion euros, mainly because the risk investments in start-ups did not contribute as much valuation income as before.
SAP has set cautious financial targets for the new year.
Adjusted for special effects, earnings before interest and taxes are expected to increase by 10 to 13 percent to between 8.8 and 9.1 billion euros.
The company had already announced that the results in day-to-day business should again increase by double digits this year, after a lot of money was invested in the expansion of the cloud business with software for use over the network in previous years.
With the cloud software, SAP wants to make currency-adjusted sales between 22 and 25 percent more in the current year, and CEO Christian Klein expects an increase of between 6 and 8 percent in total product sales.
Selling Qualtrics in sight
Due to the results and prospects, Europe's largest software manufacturer sees itself forced to cut jobs.
SAP joins the latest wave of layoffs among technology companies around the world.
CEO Christian Klein announced that 3,000 jobs would be lost during the restructuring.
In Germany, 200 employees are said to be affected.
With the job cuts, SAP wants to concentrate on growth in the traditional area with software for corporate management (ERP), said Klein.
The cuts will come in other areas.
CFO Luka Mucic stated that there should also be layoffs.
The company wants to reduce the annual costs by 350 million euros with the step.
Most of these savings are not expected to take effect until 2024.
SAP is also considering selling its US subsidiary Qualtrics.
According to the board, a possible deal could allow the group to focus more on growth with cloud software and on profitability.
The consideration is in line with the strategic plan to streamline the portfolio.
A sale of Qualtrics has not yet been included in the forecast, but it should have positive consequences for profitability if it comes about, said CFO Luka Mucic in a conference call with journalists.
He expects a lot of interest from buyers in the company.
SAP acquired Qualtrics in 2018 for $8 billion.
The CEO at the time, Bill McDermott, had targeted US rival Salesforce, among others, and wanted to strengthen SAP's position in the customer and sales management business.
As early as 2021, under the new boss Christian Klein, SAP had detached itself from the subsidiary and brought parts of it to the stock exchange.
The company is currently valued at $6.6 billion on the stock exchange. According to Mucic, SAP currently owns 71 percent of the shares.
The project and a possible date have not yet been finally decided and depend on a number of factors, according to SAP.