SAP reported a disappointing operating profit in Q4, with declining margins due to its shift into the less lucrative cloud business. In addition, cloud bookings grew at a slower pace over the fourth quarter compared to previous quarters. Management revised: i) its 2020 targets, with higher sales but non-IFRS operating profit unchanged, hence reflecting lower margins and, ii) 2023 targets provide less margin expansion than expected as well. A restructuring plan will be announced in 2019.

29 Jan 2019
Strong sales in Q4, but mixed margin outlook

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Strong sales in Q4, but mixed margin outlook
SAP SE (SAP:WBO) | 0 0 0.2% | Mkt Cap: 103,244m
- Published:
29 Jan 2019 -
Author:
Luis Pereira -
Pages:
3 -
SAP reported a disappointing operating profit in Q4, with declining margins due to its shift into the less lucrative cloud business. In addition, cloud bookings grew at a slower pace over the fourth quarter compared to previous quarters. Management revised: i) its 2020 targets, with higher sales but non-IFRS operating profit unchanged, hence reflecting lower margins and, ii) 2023 targets provide less margin expansion than expected as well. A restructuring plan will be announced in 2019.