SAP posts second consecutive quarter decline in license sales
21 Oct 2013
SAP AG, the biggest business-management software maker, posted a second consecutive quarterly decline in license sales as currency volatility eroded revenue in Asia and the Americas.
Third-quarter software licenses, an indicator of future income, were down 5 per cent to €975 million according to a statement from Walldorf, Germany-based SAP.
Software sales from Asia Pacific were down 9 per cent, while sales in the Americas slid 13 per cent.
SAP and arch rival Oracle Corp are looking to sustain growth amid competition from smaller rivals Salesforce.com Inc (CRM) and Workday Inc (WDAY) whose web-based products are gaining popularity.
The company is looking to cloud programmes delivered over the internet to make up the slack demand for its older business-management software.
''SAP had a very strong performance in the third quarter, considering the mixed macroeconomic environment and the strong currency headwinds,'' chief financial officer Werner Brandt said in the statement. ''Our ongoing focus on operating discipline while successfully scaling our cloud business is paying off.''
SAP was down 12 per cent this year through 18 October, following four consecutive annual gains, even as Oracle declined 1.3 per cent.
Third-quarter reported revenue was up about 2 per cent to €4.05 billion as operating profit adjusted for some items rose 5 per cent to €1.3 billion.
SAP affirmed its outlook for 2013 operating profit of €5.85-5.95 at constant currencies, up 12-14 per cent from 5.21 billion in 2012.
The company further expects revenues from software and software-related services to increase at least 10 per cent this year, excluding exchange rate fluctuations.
However, according to commentators, if exchange rates remained at the September level for the rest of the year, fourth-quarter and full-year software and software-related service revenue growth could be about 5 percentage points lower than expected.
According to the company its operating profit growth, excluding special items, would see a negative impact of about 7 percentage points from currency effects.
According to Brandt, it was mainly the US dollar and the Japanese yen which impacted the company's overall performance, and there were some other currencies.
