FT.com / Companies / IT - SAP boosted by strong sales growth in the US

FT.com / Companies / IT - SAP boosted by strong sales growth in the US

SAP boosted by strong sales growth in the US
By Gerrit Wiesmann in Frankfurt

Published: April 23 2007 15:27 | Last updated: April 23 2007 15:27

SAP, the world’s biggest maker of software for business, took a first step to restoring investor confidence by announcing strong growth in the first quarter of the year while pledging to face down a lawsuit from a rival.

The stock traded 2.5 per cent higher at €37 per share late on Friday after the German company said sales of software and related services hit €1.52bn early 2007, a 15 per cent rise when adjusted for currency effects.

Henning Kagermann, chief executive, said strong sales growth in the US helped push SAP’s market share to 25.1 per cent, up 0.6 points from late last year, and again vowed to raise software sales by 12-14 per cent 2007.

The Walldorf-based group that started with programmes to help big businesses manage inventories or customer details twice last year missed quarterly growth targets, raising fears it was failing to lure smaller companies.

SAP in February said profitability would suffer 2007 as it earmarked €400m over two years for a new web-based software service for small companies – a segment being contested by US rivals such as Oracle and Microsoft, too.

The German company’s share price fell by more than one fifth from €42 at the start of the year, a slide compounded by a lawsuit filed by arch-rival Oracle alleging SAP had stolen software ideas from its computer systems.

Mr Kagermann said SAP would “aggressively defend” itself against claims a subsidiary misused Oracle customer gateways. “We have no intention to settle,” he said when asked if SAP might see a quick resolution.

At the same time, he brushed off the recent departure of chief software developer and possible successor, Shai Agassi. He noted US success was the work of sales boss Léo Apotheker, now deputy chief executive.

Investors seemed so cheered by positive news and robust words from Walldorf that they appeared largely to forgive first effects of the investment programme for the “AS1” project announced two months ago.

Building computer centres to “host” customer data took €20m off earnings last quarter, SAP said. Operating income still rose 6 per cent to €433m as total sales climbed 6.1 per cent to €2.2bn, just shy of forecasts.


Copyright The Financial Times Limited 2007