SAP declares 8% revenue growth in EMEA

SAP has declared 8% revenue growth in the EMEA region for the first quarter of 2014, “despite uncertainties in the CIS due to the Crimea crisis”.

SAP has declared solid 8% revenue growth in the EMEA region for the first quarter of 2014, “despite uncertainties in the CIS due to the Crimea crisis”. 

The supplier stated its conviction that its software via the cloud business is on the right track and that its in-memory database appliance, Hana, is delivering significant revenue.

Cloud subscriptions and support revenue rose 32% globally to €221m, compared with the first quarter of 2013. But that figure is not according to international financial reporting standards (IFRS) and is negatively affected by currency swings because of a strong euro. 

The EMEA region saw 39% growth in non-IFRS cloud subscriptions, SAP reported.

The supplier said it now has more than 3,200 Hana customers, nearly 1,000 for Business Suite (the supplier’s full ERP system) on Hana, and 1,200 start-ups developing on the Hana platform.

However, profit after tax is down for the first quarter, to €677m from €689m in the equivalent quarter last year, a fall of 3%. Total revenue was up 2% from €3.636bn to €3.701bn (non-IFRS).

Franck Cohen (pictured), SAP’s president for the EMEA region, said the Ukraine crisis is having a limited impact because less than 3% of SAP’s global revenue lies there [Russia and Ukraine]. But he added: “There is a bit of anxiety as to how far the crisis can go, especially if there is an overall change in the relationship between Russia and the rest of Europe.”

Cohen said southern Europe exhibited encouraging growth in the first quarter, with Iberia having its best-ever growth and Italy experiencing double-digit growth, too. He confirmed 39% growth in EMEA cloud revenue, with triple-digit growth in Spain and Italy.

The depth of the recession in southern Europe had been so severe that enterprise software investment had almost stopped, he said. “Now that there is light at the end of the tunnel, companies are investing again. It is a slow recovery, however, and 2015 will be better than 2014.”

Among the SME net new names to SAP in Europe, Cohen said “60% are adopting Hana as their standard database”.

He also said the recently announced availability of Business Suite on Hana in a subscription “opex mode” has been “positively received by customers” in Europe. “When you see a company the size of Nestlé doing that, it is an important message,” he said.

Africa is booming, said Cohen, and SAP is seeing uptake for its latest technology in that region, not just in South Africa, but Kenya, Nigeria and Angola.

Bill McDermott and Jim Hagemann Snabe, co-CEOs of SAP, said in a statement: “We are well on our way to becoming the cloud company. We offer our entire Business Suite in the cloud and are leading the market with the most comprehensive end-to-end HR cloud solution. Our customers can manage all workers, goods and services through the world’s largest business network in the SAP cloud.”

The company said that its 2013 acquisition, Hybris, a so-called omnichannel e-commerce platform, is, combined with SAP Cloud for Sales, seeing triple-digit growth in software and cloud subscriptions and support revenue.

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