Friday, 2 August 2013

SAP includes e-commerce market to target - growth opportunities in China



The Walldorf software company SAP AG brought the day before the proposed acquisition of e-commerce specialist hybris successful conclusion. SAP announced in early June announced its intention to acquire the Swiss software company.


SAP includes e-commerce market to target - growth opportunities in China
SAP has paid how much for the Swiss company, was initially unclear. However, industry sources speak of a purchase price of 1.0 to 1.5 billion U.S. dollars. SAP Co-CEO Bill McDermott said in a recent conference call of "fair price", the SAP had paid for the company in the face of growth assets.

SAP sees opportunities in e-commerce technology

The Swiss hybris is considered very promising. The company offers an e-commerce platform that is capable of running both on-premise and in cloud environments. In addition, the hybris software suite is fit for use both on the web and on mobile devices. Through integration with its in-memory platform Hana, analysis and cloud applications and social software platform SAP Jam, SAP hopes to add real value for its customers and existing hybris clients to create.

Hybris already serving companies such as 3M, Nikon, Bridgestone, Proctor & Gamble and Thomson Reuters. The developed software enables companies of hybris information about customers, products and orders on many channels to view. De facto allows hybris a holographic view of the customer, which company should be helped to sell more products and services to customers.

The acquisition of SAP (WKN: 716460) is regarded as the answer Walldorf to the planned acquisition of Exact Target through Salesforce.com. The reason e-commerce technologies are increasingly important. The market volume in this area is already estimated at 37 billion dollars and is growing more than twice as fast as the entire retail industry.

SAP wants to maintain investment plans in China

Another construction is currently the Asia business at SAP. The software and cloud computing sales declined in the second quarter to seven percent over the previous year.

Precisely for this reason, SAP plans to invest further. The goal is to rise in the coming years among the top 5 companies in China. Chief Financial Officer Werner Brandt cancels against the Euro on Sunday, plans to invest 2.0 billion euros in China over the next few years until 2015. In 2015, SAP plans to implement a billion dollars in China.

Brandt then also confirmed problems in China, which is facing the German software house of a difficult to predict demand. There were also internal problems recently, after the forma-celled head of China Business Hera Siu indulged a break. Recently, we have not found a replacement, the new head of the business in China would resume Shortest already in his work, Brandt announced.

Short Profile

The in 1972 launched and based in Walldorf software company SAP AG increased, especially in the 80s and 90s, the world's leading provider of ERP software (Enterprise Resource Planning) on.

This enterprise software company allows customers important data in relation to business processes, such as production, accounting, human resources and sales within a company to keep in mind and to optimize business processes. Already put more than 30,000 companies in more than 120 countries worldwide on software from SAP.

With the advent of the Internet, SAP expanded its product range accordingly and offers its Internet portal mySAP.com with the complex software suite mySAP Business Suite to both solutions for electronic procurement systems (supply chain management) and customer relationship management (CRM).

With NetWeaver, SAP wants to open new business opportunities and market integration in the market for application server. With the project "Business By Design", SAP intends to strengthen the middle class and in the market for cloud-based offerings. With the in-memory database, HANA SAP plans to analyzing large volumes of data in seconds allow...

In order to effectively edit the individual markets such as IT services and e-procurement systems, founded in 1997, the SAP subsidiary SAP SI. SAP SI was later re-integrated back into the group. In recent years, SAP reinforced through a series of acquisitions. In the spring of 2006, SAP took over the software vendor Virsa Systems, and the software specialists Frictionless Commerce. Mid-2006, the software specialist practice was acquired software. In the spring of 2007, the Company purchased the Norwegian software company and the Finnish MaXware Wizcom Communications. In the area of ​​Business Intelligence, SAP reinforced by the acquisition of Pilot Software and Soft Outlook. After the takeover of its partner SAP Arabia, SAP swallowed in the fall of 2007 the French analysis software manufacturer Business Objects. In spring 2010, the Company bought the U.S. software specialist Sybase. Previously, the Company had already swallowed the longstanding partner TechniData. In autumn 2010, then founded the SAP Mobile Business Unit. Early 2011 were taken from SECUDE assets. The end of 2011, SAP took over the cloud specialists Success Factors, at the same time Steeb was repelled. In autumn 2012, the Company bought the U.S. software company Ariba. Mid-2013, the Company bought the logistics management specialist hybris.

In the area of ​​electronic procurement systems founded SAP together with Siemens, Bosch, INA, Continental AG and ZF Friedrichshafen AG SupplyOn the joint venture. Numbers

For the previous second quarter of 2013, SAP had in the year-ago quarter at constant currency by eight percent to 4.06 billion euros. The operating profit (EBIT) rose by ten percent growth to 988 million euros, so after tax stood at a five percent Risen on 724 million Euro profit in the books. The operating margin improved 0.6 percentage points to 24.3 percent. Each share in the second quarter accounted for a profit of 0.61 euros (0.55 euros).

In the software, the software company SAP suffered a decline of three percent to 982 million euros in the second quarter of the current fiscal year. Business with Cloud subscriptions and support exploded as expected with a growth rate of 171 percent to 159 million euros. The Software segment and cloud subscription could show sales growth of seven percent, reaching a value of 1.14 billion euros.

The Hana software sales, an important engine of growth for SAP, increased 21 percent year over year in the quarter, down from 102 million euros.


Market and Competition

SAP is the global ERP market with a market share of over 25 percent (source: Gartner) as the dominant provider. Despite the adoption of J.D. Edwards and PeopleSoft, Oracle takes in this area only in second place. Other rivals in the ERP segment consist primarily of the software provider NetSuite, which specializes in on-demand solutions.

Elsewhere SAP competes with Oracle's solutions. This is especially true in the area of ​​CRM software after Oracle CRM specialist Siebel Systems took over. SAP has recently displaced Oracle CRM segment from the top position. However, SAP sees itself through the U.S. specialist Salesforce.com afflicted, who claims to have taken over the top spot in 2011.

In the area of ​​business intelligence software, SAP acquired Business Objects is consistent with its in direct competition with IBM (Cognos) and Oracle (Hyperion) and with other smaller competitors such as Micro Strategy.

With its new medium-sized and rental software "Business By Design" the company wants to gain a stronger foothold in the market for small and medium-sized customers. In HCM SAP is increasingly competing with Workday.

Outlook

SAP continues to expect full-year 2013 Hana a turnover of 650 million to 700 million euros. Instead of a growth of 11 percent to 13 percent, as previously anticipated, the Company expects in 2013, a growth of only ten percent.

Analysts expect at SAP in 2013 with a net profit of 3.38 euros per share, which is planned to increase in the following year 2014 to 3.79 Euros per share. In 2015, expected a profit of 4.26 euros per share.

Review

SAP shares recently presented in New York at 74.08 U.S. dollars friendly, so this results in a market value of around 88 billion U.S. dollars for SAP shares. In Frankfurt SAP papers were last traded at 56 euros. Based on current earnings estimates for the year 2014, a price-earnings ratio (PER) of 22 results

Analysts at Evercore Partners recently reduced their price target on shares of SAP 77 to 75 euros; said analysts currently classify the papers with "equal weight".

Analysts at Barclays Capital Rate SAP shares to "equal weight", the analysts see a price target of 55 euros for the papers.

The experts at DZ Bank see the fair value of SAP shares at only 63 Euros, at the same time confirmed the bankers their buy recommendation on the paper.

At Citigroup to "neutral" is SAP shares continue to face. The analysts continue to see a price target of 58 euros for the papers. The analysts see a danger that it might take longer for the in-memory database will be a growth in the Group.

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