Wednesday, 28 October 2009

SAP software decline slows

(By Anthony Miller – Wednesday 28th October 2009 8:00am). SAP’s software revenues were still in steep decline in Q3, down 30% yoy (all percentages at constant currency) to €525m. But this was a little better than the 35% ytd decrease, suggesting a slight easing in market conditions in the quarter.

Total SRSS (software and software-related services) revenues ‘only’ fell 5% in Q3 to €1.94b (all hail the power of maintenance fees), and total revenues were down 10% to €2.51b. Margins expanded by 110bps yoy to 24.2% (26.9% ‘adjusted’). Management maintained its ‘adjusted’ FY margin guidance in the range 25.5%-27.0%. Given that the ytd ‘adjusted’ margin is 24.0%, it seems there’s more cost-cutting yet to do, as it’s hard to see how revenues are going to drive this number. Indeed, SAP has already spent €186m of the forecast €200m FY restructuring provision leaving only €14m for the rest of the year. I wonder if that’s enough?

A couple of interesting – perhaps confusing – messages in the press release over SAP’s mid-market hosted services. The company appears to be toasting its channel-driven success with the legacy All-in-One offering, but simply announced the availability of a new ‘feature pack’ for what we presumed was the successor product, Business ByDesign. No mention of success – or otherwise – on BBD sales. Don’t get me started.

Anyway, as ever, SAP’s results are a masterpiece of Germanic precision, so we will need some time to pore through the minutiae and listen to management’s sage words on the concall before bringing you more.

No comments:

Post a Comment