SAP 2012 – A Year in Review
In April of 2012, SAP celebrated its 40th birthday — and its maturation from a startup brainchild of five ex-IBM engineers into the world’s leading provider of enterprise application software with more than 55,700 employees and nearly 200,000 customers in 120+ countries.
In July, as reported by Bloomberg, with a valuation of $75.3 billion, SAP took over the top spot as the most valuable publicly traded German company, toppling the 164-year-old engineering giant Siemens. Today, SAP remains a heavyweight on the German DAX and is one of the most actively traded German stocks on the NYSE.
In October, SAP reported its best-ever third quarter, delivering strong performance across its core innovation areas of HANA, mobility and the cloud and notching its eleventh consecutive quarter of double-digit non-IFRS software and software related service revenue growth.
SAP also confirmed its full-year non-IFRS operating profit forecast for 2012 to be in the range of $5.92 billion to $6.65 billion.
We’ll have to wait until SAP reports its Q4 earnings in late January to confirm that the company is sustaining its strong momentum, but myriad factors indicate that SAP’s growth will continue in 2013 and beyond.
As reported in October by Reuters, SAP co-chief executive Bill McDermott has gone on record with the claim that: “[SAP’s] ambition is to grow with double-digit numbers for a very long time to come.
In December, Standard & Poor’s Equity Research raised its DCF-based 12-month target price for SAP by $13 to $91 on increased confidence in SAP’s growth prospects in 2013 and beyond.
S&P increased its 2012 SAP earnings estimate of $0.11 to $3.55 and its 2013 earnings estimate for SAP by $0.76 to $4.41, citing SAP’s HANA, mobility and cloud initiatives as key drivers of SAP’s growth.
SAP certainly fired on all cylinders across these core innovation areas in 2012, and from what we see at Optimal, this strong momentum shows no signs of slowing.
SAP co-CEO Jim Hagemann Snabe cites SAP’s innovation, nimbleness and markedly faster capability to deliver new products as pillars to SAP’s current and future success, noting that SAP has reduced by nearly 50% the time it takes to move a new product through development and bring it to market. What took 15 weeks in 2010, according to Snabe, today is accomplished in seven-and-a-half weeks.
Commenting on the unpredictable nature of business, Warren Buffet notes that the rearview mirror is typically clearer than the windshield. However, at the beginning of 2013, it is perhaps worth spending some time reviewing the many impressive milestones and accomplishments SAP achieved in 2012. Here are two good sources for this:
Wishing all a happy and prosperous 2013!