SAP CFO says pipeline looks very healthy

Reuters News
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Posted: Jul 21, 2015 6:20 AM

By Harro Ten Wolde and Ilona Wissenbach

FRANKFURT/STUTTGART (Reuters) - SAP's order pipeline for the second half of the year is "very healthy" and will offset a decline in sales from its packaged software products, which will pose no threat to the company's full-year operating profit target, its finance chief said.

Europe's largest software company on Tuesday posted worse-than-expected sales of its high-margin packaged software business.

In the first six months, these software license revenues dropped by 4 percent, excluding currency effects.

But SAP's Chief Executive Luka Mucic told Reuters there was not threat to the company's full-year outlook for non-IFRS operating profit of between 5.6 billion euros and 5.9 billion euros at constant currencies.

"As part of our guidance, we have modeled a moderate decline of software licenses, so we are exactly where we wanted to be for the first half year," he said. "Our pipeline across cloud and software is looking very healthy for the second half."

Asked whether a 4 percent drop in software license revenues at constant currencies was an acceptable level for the second half, he said: "It is not that we think that we can't do better. We have seen in the first quarter that we can do better, but I think it is prudent planning."

"If we would remain at that level we absolutely would meet the guidance."

(Reporting by Harro ten Wolde; Editing by Georgina Prodhan)