Despite the corona crisis, SAP holds out the prospect of a solid balance sheet for the second quarter of 2020. According to preliminary results, sales between April and June of this year amounted to 6.74 billion euros – two percent more than in the same period last year. Once again, the cloud business saved the German software group’s balance sheet. Cloud revenues increased in the second quarter by 21 percent year on year to a good two billion euros.
In contrast, the software license business slumped again – by 18 percent to 770 million euros. At this point, the SAP managers spoke of a significant improvement compared to the first quarter of 2020. At the beginning of the year, Walldorf residents had still complained about a 30 percent decline in the licensing business. SAP’s operating profit increased eight percent year-on-year in the second quarter to EUR 1.96 billion (non-IFRS). The operating margin improved by 1.8 percentage points year-on-year to 29.1 percent (non-IFRS).
In view of the corona crisis, analysts had been waiting eagerly for the SAP figures and responded with relief. In view of the difficult general conditions, the second quarter went well for SAP, the general tenor. The software company has proven to be resistant to the economic effects of the pandemic.
The SAP management was also visibly pleased with the numbers. “I am very proud that our teams have successfully mastered the very difficult environment and achieved a better quarterly result than expected,” said CEO Christian Klein. It has been shown that customers rely on SAP’s strategy for the intelligent company. “Our portfolio therefore also plays a decisive role when it comes to enabling our customers to do the digital transformation they want,” said the SAP boss. This could help user companies emerge from the crisis stronger.

Photo: SAP
CFO Luka Mucic also pointed out that the SAP organization reacted quickly to the crisis in terms of costs. The group continues to operate efficiently with predominantly virtual sales and remote implementations, it said. In order to protect its profitability, SAP hired fewer new employees, reduced the short-term adaptable expenses and benefited from pandemic-related coercive measures such as fewer business trips or virtual events.
The SAP managers are confident about the rest of the financial year and do not expect further slumps in the business. They confirmed the outlook for 2020, which management had trimmed in view of the crisis after the first quarter of the year. As a result, Walldorf assumes that demand will gradually improve in the third and fourth quarters if the countries start their economies again and the restrictions on the population are relaxed.
Specifically, software developers from Baden are expecting cloud revenues of between 8.3 and 8.7 billion euros this year (2019: seven billion euros). Adjusted for currency effects, this would correspond to a growth rate of 18 to 24 percent. In total, cloud and software revenues are expected to amount to EUR 23.4 to 24.0 billion in 2020 (2019: EUR 23.1 billion) – an increase of one to four percent. SAP estimates annual sales for 2020 to be between 27.8 and 28.5 billion euros (2019: 27.6 billion euros). Adjusted for currency effects, this would correspond to a growth rate of one to three percent. That doesn’t sound like much, but it is at least a plus – not to be scoffed at in corona times.