January 23, 2013 6:39 pm

Cloud and big data push boost SAP

By Bede McCarthy, Technology Correspondent

SAP on Wednesday said its momentum had “never been stronger” as it forecast continued double-digit growth this year, helped by its move into big data and the cloud.

The German business software maker said full-year software and software-related services revenue would increase 11 to 13 per cent in 2013 on its preferred non-IFRS measure, while full-year operating profit would climb to €5.85bn-€5.95bn from €5.2bn last year, when higher investment hit SAP’s margins.

The company reported revenues of €16.2bn on the IFRS measure, up 14 per cent year on year and slightly ahead of the company’s guidance.

The world’s third-largest software maker by market capitalisation achieved almost €400m in sales for Hana, its data-crunching technology that can be used in everything from risk profiling to energy smart meters. Half of those sales came in the last quarter of 2012, and the group expects sales to reach up to €700m in 2013.

Hana is a key part of SAP’s push into cloud and mobile computing, where it hopes to keep pace with rivals Oracle and IBM. Last year it acquired SuccessFactors and Ariba, two multibillion-euro acquisitions.

Operating margins fell 9.2 percentage points compared with 2011 to 25.1 per cent.

Jim Hagemann Snabe, co-chief executive, said the 2011 comparison was distorted after a legal dispute with Oracle cost less than the company had expected. Using a non-IFRS measure, which excludes such costs, its operating margin was down 1.1 percentage points compared with 2011.

Asked about growth in the company’s core business of software and analytics, Mr Snabe said cloud, Hana and mobile products would generate new customers. “At the end of the day, software and analytics is still what runs companies. What is happening is that is being revitalised by these new technologies.

“How we allocate that [growth] you can debate, but clearly it brings us more users and that was not the case before. Hana allows the core products to run in real-time and that makes the core very, very attractive.”

Daud Khan, an analyst at Berenberg, said the Hana sales were impressive, and that the 2013 guidance numbers appeared cautious when compared with the bravado of the management.

“If you extrapolate the stuff they are saying, either they are being conservative about the numbers or overconfident on the rhetoric,” he said.

The company reported earnings per share of €2.37, down from €2.89 in 2011. SAP’s shares closed up 2.4 per cent at €59.20 in Frankfurt