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SAP Q4 Profit Climbs; Expects Weak Adj. Operating Profit, Higher Cloud Revenue In FY21

German software major SAP SE (SAP), while announcing fourth-quarter results, said it expects fiscal 2021 adjusted operating profit of 7.8 billion euros to 8.2 billion euros, compared to last year's 8.28 billion euros. The outlook represents a 1 percent to 6 percent drop at constant currencies.

Further, SAP expects 9.1 billion euros to 9.5 billion euros non-IFRS cloud revenue, up 13 percent to 18 percent at constant currencies. The company projects 23.3 billion euros to 23.8 billion euros of non-IFRS cloud and software revenue, flat to up 2 percent at constant currencies.

SAP said its 2021 outlook reflects its solid business momentum and current estimates concerning the timing and pace of recovery from the COVID-19 crisis.

This outlook assumes the COVID-19 crisis will begin to recede as vaccine programs roll out globally, leading to a gradually improving demand environment in the second half of 2021.

Free cash flow is expected above 4.5 billion euros, compared to 6.0 billion euros last year.

SAP also confirmed its mid-term ambition which was previously published along with third quarter results.

In its fourth quarter, the company reported profit after tax on IFRS basis of 1.93 billion euros, up 18 percent from 1.64 billion euros last year. Non-IFRS profit after tax was 2.02 billion euros, compared to 2.19 billion euros a year ago.

Earnings per share was up 19 percent year over year to 1.62 euros from 1.36 euros last year. Adjusted earnings per share were 1.69 euros, compared to 1.82 euros last year.

FRS operating profit increased 26 percent year-over-year to 2.66 billion euros. Non-IFRS operating profit was down 3 percent to 2.77 billion euros, while operating margin increased 1.4 percentage points year over year to 36.7 percent.

Total revenue declined 6 percent to 7.54 billion euros from 8.04 billion euros a year ago. Total revenue was down 2 percent at constant currencies.

Cloud and software revenue fell 4 percent, while Cloud revenue grew 8 percent.

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