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09 Dec 2021
CFO Meeting - Feedback
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CFO Meeting - Feedback
SAP SE (SAP:ETR) | 0 0 0.0%
- Published:
09 Dec 2021 -
Author:
Slowinski Stefan SS | Castillo-Bernaus Ben BC -
Pages:
11
We recently met one on one with SAP CFO, Luka Mucic, to discuss SAP''s ESG credentials.
SAP a BNPP Exane ESG leader
We recently published a Global Software and IT Services ESG report, including materiality map (see link) where SAP was named as one of the 7 Leaders in the sector. The company was early to be 100% reliant on renewable energy in its data centers (in 2014, three years before Google) and has moved forward its carbon neutrality target to 2023, two years earlier than previously targeted. SAP also recently announced its entire 27,000 vehicle fleet will be electrified by 2030.
CFO highlights the sustainability advantages delivered by S/4HANA Cloud
SAP is increasingly helping its customers monitor and track their environmental, social and economic impact through the use of SAP''s S/4HANA Cloud solutions, including monitoring the impact along the supply chain and the procurement network. In addition, SAP is at the forefront of helping companies convert ESG data into financial reporting. We see these capabilities, along with the other benefits bundled into the SAP RISE offerings, as yet another driver that is pushing customers to upgrade to S/4HANA Cloud, a process that should accelerate in 2022.
Further improved financial communications key to a 2022 re-rating
We believe that SAP, with a new Head of IR, is working on continuing to improve financial communication in order to provide analysts and investors with greater visibility into the company''s accelerated Cloud transition. With 2021 and 2022 to be transition years, with limited revenue and EBIT growth as high margin license revenues decline, SAP will need to demonstrate progress on key Cloud migration signposts for investors to begin to look forward to revenue and EBIT growth acceleration as of 2023, with revenue growth approaching double digits by 2024. We note that Adobe and Microsoft started to re-rate 12 months ahead of their EPS growth acceleration during their Cloud migrations....