SAP reports double-digit growth, job losses

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SAP this morning posted double-digit growth figures in fourth quarter and year-end preliminary results that has defied the prevailing economic gloom.

The firm said fourth-quarter software and software-related service revenues were up eight per cent €2.7 billion (£2.5 billion) compared to the fourth quarter of 2007, largely meeting analyst expectations.

But excluding the contribution from it's Business Objects division, SAP’s business actually contracted six per cent to the constant currency growth of the software and software-related service revenues not adjusted for generally accepted accounting principles (GAAP) for the fourth quarter of 2008.

But Léo Apotheker, joint chief executive of SAP, said the company had weathered tough times and would do so again, alluding to the 3,000 job cuts also announced today.

He added: “We believe the cost containment measures will allow us to adapt to the tough market conditions and ensure the long term competitiveness of the company. Moreover, we expect 2009 to be a year of limited visibility, making it increasingly difficult to project sales in this environment.”

Nevertheless, the strong fourth quarter revenues helped push full-year software and software-related service revenues to €8.5 billion (£7.9 billion), representing an increase of 14 per cent compared to the previous year

Operating income for the 2008 full-year period was up four per cent to €2.8 billion (£2.6 billion) on 2007. And the full-year non-GAAP operating income excluded a non-recurring deferred support revenue writedown from last year’s acquisition of Business Objects and acquisition-related charges totalling €463 million (£430.8 million), was up 18 per cent to €3.3 billion (£3.1 billion) year-on-year.

The German software maker also said its operating margins were impacted by €32 million (£29.8 million) of expenses resulting from the settlement of litigations, which compared to $2 million (£1.86 million) in 2007 (before Oracle’s TomorrowNow lawsuit) and €35 million (£32.6 million) spent on integrating its $6.8 billion acquisition of Business Objects.

But it had still managed to increase its share of the core enterprise application vendor market by 4.4 per cent to 32 per cent during the last quarter, of which it said 0.9 per cent came from organic growth and 3.5 per cent from its Business Objects.

The company expected its full-year 2009 non-GAAP operating margin to be in the range of 24.5 to 25.5 per cent at constant currencies.

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