SAP Q1 2022: Income up 11%, Ukraine battle affect projected to be €300m

Dave April 23, 2022

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SAP has announced first-quarter income of more than €7.1bn, and the Ukraine battle is projected to accumulate a €300m affect for 2022

Brian McKenna

Brian McKenna,
Industry Applications Editor

Printed: 22 Apr 2022 16: 45

SAP has announced €7.077bn in first-quarter income, up 11% on 2021. Cloud income used to be €2.820bn, up 31%, and practically 40% of the provider’s total sales.

The battle in Ukraine has had a adversarial affect on the provider’s income. The affect is projected to amount to €300m for the year.

Its CEO, Christian Klein, effect out a commentary on 2 March, Standing in harmony, which expressed enhance for western govt economic sanctions towards the Russian Federation, and announced a battery of humanitarian assist efforts, including the hole up of SAP locations of work as shelter for refugees. The commentary additionally announced the stoppage of operations in Russia, and used to be updated, on 9 March, with an announcement of the suspension of sales in Russia and its ally Belarus.

In the quarterly commentary, the company acknowledged: “In the first quarter, SAP’s industry used to be impacted by the battle in Ukraine. At the origin of March, SAP stopped all recent sales in Russia and Belarus. Apart from to, SAP began to shut down its cloud operations and intends to cease the enhance and maintenance of its on-premise merchandise in Russia.

“Most modern cloud backlog used to be diminished by approximately €60m ensuing from the termination of present cloud engagements, and dealing income by approximately €70m ensuing from reduced on-premise revenues.”

SAP expects “a total adversarial income affect of approximately €300m from lack of recent industry and discontinuation of present industry, in explicit tool and enhance and companies”.

Right here is the 2nd year of the provider’s Upward push with SAP provider, launched at the tip of January 2021. Upward push has been billed as a “industry transformation” provider. It bundles managed cloud infrastructure and managed companies into one contract, and it delivers the ERP machine S/4 Hana, primarily primarily based on the in-memory, columnar Hana database, over the cloud – variously and mostly AWS, Google Cloud Platform and Microsoft Azure.

Upward push has been at the forefront of the provider’s messaging over the past 15 months, and in the outcomes commentary, it highlighted customer adoption.

Accenture, Canon Production Printing, Daimler Truck AG, Grupo Estrella Blanca, NEC Company and Wipro Exiguous were among the many worldwide possibilities cited as Upward push adoptees.

In the UK, logistics company Unipart has lately joined a roster that additionally involves Twinings Ovaltine; Briggs of Burton, a route of engineering company; Inchcape, a London-primarily primarily based automotive sector company; EG Crew, a petroleum establish of living and food retailer; and Asda.

SAP additionally famend in its commentary that Microsoft has announced this can change into the first public cloud provider to adopt Upward push with SAP and SAP S/4Hana to remodel its accumulate SAP ERP deployment.

SAP’s flagship ERP machine, S/4Hana, launched in February 2015, attracted 500 possibilities in the quarter, taking total adoption to more than 19,300 possibilities, up 18% year over year. 13,900 are are residing, some 72% of the total reduced in dimension.

Cloud income

S/4 cloud income used to be confirmed at €404m, up 78% on the linked year-previously quarter.

“Prospects powered one more quarter of solid cloud teach as they became to us for solutions to manufacture their agencies more sustainable, their supply chains more resilient and their enterprises more future-proof,” acknowledged Klein.

“Our signature ERP providing, SAP S/4Hana, grew at file ranges, demonstrating the arrogance possibilities plot in us to enhance their industry transformations.”

And Luka Mucic, chief monetary officer, acknowledged: “We’re off to a solid initiate to the year and our outlook remains solid. Irrespective of the present macroeconomic ambiance, cloud income teach accelerated additional, fuelling total income teach. Most modern cloud backlog grew at a healthy price and continues to enhance our self perception in our lengthy-term plans and outlook for the year.”

Also famend in the commentary is a partnership, announced on 22 March, between the provider and design consultancy BCG, oriented towards sustainability. This, it is acknowledged, will “again companies change into their industry units, change into sustainable enterprises and create the records transparency they wish to embed sustainability into their core industry”. This job is in a pilot section, with an expected broader open in the third quarter of 2022.