SAP Says Business Activity Improves; Confirms 2020 Outlook

(RTTNews) - SAP SE (SAP) said that business activity gradually improved over the course of the second quarter following the global emergence of the COVID-19 crisis primarily in the last month of the first quarter. The company also confirmed its 2020 outlook.

The company reported that its preliminary operating profit for the second quarter increased by 55% year over year to 1.28 billion euros on a IFRS basis and rose 8% to 1.96 billion euros on a non-IFRS basis and was up 7% on non-IFRS at constant currencies.

Total revenue for the quarter grew 2% year over year to 6.74 billion euros on IFRS basis, rose 1% to 6.74 billion euros on non-IFRS basis and rose 1% on non-IFRS at constant currencies.

In the second quarter, cloud revenue grew 21% year over year to 2.04 billion euros on IFRS basis, grew 19% to 2.04 billion euros on non-IFRS basis and rose 18% on non-IFRS at constant currencies.

Software licenses revenue was down 18% year over year to 0.77 billion euros on IFRS and non-IFRS basis and down 18% on non-IFRS at constant currencies.

The company confirmed its 2020 outlook. The outlook continues to be based on the assumption of a gradually improving demand environment in the third and fourth quarter as economies reopen further and population lockdowns ease.

Non-IFRS cloud revenue is still expected to be in a range of 8.3 billion euros to 8.7 billion euros at constant currencies, up 18% to 24% from last year at constant currencies.

Non-IFRS cloud and software revenue is still expected to be in a range of 23.4 billion euros to 24.0 billion euros at constant currencies up 1% to 4% from the prior year at constant currencies.

Non-IFRS total revenue is still expected to be in a range of 27.8 billion euros to 28.5 billion euros at constant currencies, up 1% to 3% at constant currencies.

Non-IFRS operating profit is still expected to be in a range of 8.1 billion euros to 8.7 billion euros at constant currencies, down 1% to up 6% from the previous year at constant currencies.

SAP said its full-year 2020 business outlook is at constant currencies, but actual currency reported figures are expected to be impacted by currency exchange rate fluctuations as the company progresses through the year.