July 24 - SAP sticks to its full-year targets, but small and medium sized firms are struggling to finance investment says co-CEO Jim Hagemann Snabe. Julian Satterthwaite reports.
Crisis and austerity aren't hurting profits the way you might expect for some of Europe's big firms. Software giant SAP is sticking to a bullish outlook for the year, and co-CEO Jim Hagemann Snabe says there's growth even where you'd least expect it. SOUNDBITE: Jim Hagemann Snabe, SAP co-CEO saying (English): "If you look at our quarter we have seen global growth. 22 percent growth in europe with very strong growth coming out of the main countries, Germany, France, the UK - even Spain, solid double digit growth." SAP says operating profits are on track to rise by up to five-and-a-quarter billion euros this year. It's holding to the target thanks rising sales in sectors including manufacturing, finance and retail. But BGC Partners analyst Mike Ingram says it would be rash to see that as evidence for a broader recovery in Europe. SOUNDBITE: Mike Ingram, BGC Partners, analyst saying (English): "Also buried within the commentary from SAP this morning is that they are gaining market share, so I wouldn't necessarily read across from company's very good performance into the global economy." Like other tech firms, SAP is betting big on mobile data. The company bought cloud computing firm Success Factors for 3.4 billion dollars earlier this year, and says it expects the acquisition to drive gains of up to 12 percent in software and related services. But if big clients are looking profitable for SAP, Snabe says small and medium sized firms need more help: SOUNDBITE: Jim Hagemann Snabe, SAP co-CEO saying (English): "There we see a tendency that they want financing as part of the software contract, and I think in general we large companies need to make sure the small companies have the same chance." For now such financing problems may be confined to small firms. But as euro zone crisis deepens, SAP will have to hope that blue chip clients can prove more resilient. Julian Satterthwaite, Reuters