SAP shows strong APJ growth over 2016

Ending its fourth quarter on 31st December 2016, SAP displayed robust growth in the Asia Pacific Japan (APJ) region.

In the fourth quarter in APJ, cloud and software revenue was up 9% (IFRS) and 5% (non-IFRS at constant currencies), with cloud subscriptions and support revenue growing by 54% (IFRS) and 48% (non-IFRS at constant currencies). In APJ, SAP had double-digit software licenses revenue growth in India and Japan.

For the full year, cloud subscriptions and support revenue grew by 45% (IFRS) and 43% (non-IFRS at constant currencies). Cloud and software revenue in APJ grew by 8% (IFRS) and 6% (non-IFRS at constant currencies). Revenues totaled €3.377 Billion.

“Digitalization is reshaping the operating landscape for private and public organizations alike. It can be an economy of limitless opportunities for some or a matter of disruption and displacement for others. Our customers, large and small, continue to choose SAP to compete in the digital era. The Asia Pacific Japan region holds tremendous opportunity for SAP and we are focused on supporting our customers’ desire to more rapidly consume SAP innovation through our growing cloud portfolio,” said Adaire Fox-Martin, President, SAP Asia Pacific Japan.

Orica in Australia and JBF Industries in India have selected SAP S/4HANA to support their digital transformation journey.  Orica is the world’s largest provider of commercial explosives and innovative blasting systems to the mining, quarrying, oil and gas and construction markets. It chose SAP to support its business transformation journey by simplifying and standardizing its business processes across the globe and to gain greater visibility of its business. JBF Industries Limited is a leading polyester value chain company. It aims to be future-ready, adopt innovations such as Internet of Things by integrating machines with SAP S/4HANA, reduce human intervention in the areas of production, warehousing and dispatch, and to provide better employee experience by eliminating duplication and increasing productivity.

Business Outlook 2017

Based on the continued strong momentum in SAP’s cloud business the Company expects full year 2017 non-IFRS cloud subscriptions and support revenue to be in a range of €3.8 billion − €4.0 billion at constant currencies (2016: €2.99 billion), in line with the previous 2017 ambition which was raised at the beginning of 2016. The upper end of this range represents a growth rate of 34% at constant currencies.

SAP also expects;

  • Full year 2017 non-IFRS cloud & software revenue to increase by 6% − 8% at constant currencies (2016: €18.43 billion)
  • Full year 2017 non-IFRS total revenue in a range of €23.2 billion to €23.6 billion at constant currencies (2016: €22.07 billion). This is above the previous 2017 ambition which was raised at the beginning of 2016.
  • Full-year 2017 non-IFRS operating profit to be in a range of €6.8 billion − €7.0 billion at constant currencies (2016: €6.63 billion). This is above the previous 2017 ambition which was raised at the beginning of 2016.

Ambition 2020

Looking beyond 2017, SAP is also raising its 2020 ambition to reflect the Company’s consistent fast growth in the cloud, solid software momentum and operating profit expansion as well as the exchange rate development. Assuming an exchange rate environment comparable to 2016 SAP strives to reach the following in 2020:

  • €8.0 − €8.5 billion non-IFRS cloud subscriptions and support revenue (previously €7.5 − €8.0 billion)– €28 − €29 billion non-IFRS total revenue (previously €26 − €28 billion)
  • €8.5 − €9.0 billion non-IFRS operating profit (previously €8 − €9 billion)

SAP continues to expect the share of more predictable revenue (defined as the total of cloud subscriptions & support revenue and software support revenue) to reach 70% − 75% in 2020 and will discuss the key drivers behind the long-term growth aspirations at the Company’s Capital Markets Day in New York on February 9th, 2017.

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