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SAP SE Q2 Profit Down, Revenue Up; Backs Outlook - Quick Facts

Software giant SAP SE (SAP) reported Thursday that its second-quarter profit after tax, on IFRS basis, declined 19 percent to 582 million euros from 718 million euros last year.

Basic earnings per share dropped 21 percent to 0.48 euro from 0.60 euro a year ago.

Adjusted profit after tax was 1.32 billion euros, compared to 1.17 billion euros a year ago. Adjusted basic earnings per share were 1.09 euros, compared to 0.98 euro last year.

Operating profit declined 21 percent year-over-year to 827 million euros. Operating margin declined 4.9 percentage points to 12.5 percent. Adjusted operating margin remained stable at 27.3 percent despite acquisition headwind.

Total revenue for the quarter increased 11 percent to 6.63 billion euros from 6 billion euros a year ago. Adjusted revenue was 6.66 billion euros, up 11 percent.

Luka Mucic, CFO, said, "With continued strong customer demand and our tight focus on profitability we remain as confident in our 2019 outlook as we are in our mid-term ambition."

Further, the company continues to expect fiscal 2019 non-IFRS operating profit in a range of 7.85 billion euros to 8.05 billion euros, up 9.5 percent to 12.5 percent at constant currencies.

SAP expects total revenues to increase strongly, at a rate lower than operating profit.

SAP still expects non-IFRS cloud and software revenue in a range of 22.4 billion euros to 22.7 billion euros, up 8.5 percent to 10 percent at constant currencies.

Looking beyond 2019, for 2020, SAP continues to expect 28.6 to 29.2 billion euros of non-IFRS total revenue, and 8.6 to 9.1 billion euros of non-IFRS cloud revenue. The company projects adjusted operating profit of 8.8 to 9.1 billion euros.

Over the period from 2018 through 2023, SAP continues to expect adjusted total revenue to grow to more than 35 billion euros from 24.74 billion euros in 2018. The company also projects to more than triple non-IFRS cloud revenue, and to grow non-IFRS operating margin by one percentage point per year on average, representing a total expansion of approximately 500 basis points.

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