On Wednesday, SAP said it expects further growth in sales and operating profit this year, after reporting better-than-expected results for the 2023 financial year.

The German enterprise software giant says it expects sales, expressed at constant exchange rates, to increase by 8% to 10% in 2024, i.e. between 29 and 29.5 billion euros.

Growth should continue to be driven by cloud activities, which should generate revenues of between 17 and 17.3 billion euros this year, an increase of 24% to 27% at constant exchange rates.

Operating profit in non-IFRS terms is expected to rise by 17% to 21%, again at constant exchange rates, giving a target of between 7.6 and 7.9 billion euros.

In the past financial year, operating income rose by 13% at constant exchange rates, to 8.7 billion euros, exceeding both the targets communicated by the Group and consensus forecasts.

Annual sales rose by 9% at constant exchange rates, to 31.2 billion euros.

These figures, which were better than expected overall, were well received on the Frankfurt stock exchange, where SAP shares gained over 6% in early trading.

However, some analysts expressed concern about the company's free cash flow forecast for fiscal year 2024.

Due to the launch of a vast restructuring program, the cost of which is estimated at two billion euros, and which should result in the elimination of around 8,000 positions, the group says it is aiming for a free cash flow of just 3.5 billion euros this year, well below the 5.1 billion euros generated in 2023.

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