SAP expects stronger cloud growth in 2024

WALLDORF (Dow Jones)–SAP’s cloud revenues are expected to increase in the coming year. In 2024, they are expected to increase by 24 to 27 percent, adjusted for currency effects, to 17.0 to 17.3 billion euros, as the Walldorf-based software group announced. In 2023 the growth was 23 percent. The combined cloud and software revenues are expected to increase by 8 to 10 percent to 29.0 to 29.5 billion euros.

SAP relies on a high order backlog. The so-called “Current Cloud Backlog”, which quantifies the secured orders over a year, increased by a quarter in 2023 to a record value of 13.75 billion euros.

The non-IFRS operating result is expected to be between 7.6 and 7.9 billion euros in 2024. Last year it was 8.7 billion euros. However, in 2024, share-based compensation will be included as an expense in the result for the first time. The comparative value for 2023 is therefore 6.5 billion euros. The currency-adjusted increase is expected to be between 17 and 21 percent.

Free cash flow is expected to fall to 3.5 billion euros from 5.1 billion euros. This takes into account restructuring costs of 2 billion euros from the restructuring program announced at the same time as the outlook, charges of 0.2 billion euros from a settlement with the US Securities and Exchange Commission due to bribery allegations and a negative effect of 0.2 billion euros from the termination of the Group’s program Receivables financing.

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(END) Dow Jones Newswires

January 23, 2024 7:25 p.m. ET (00:25 GMT)

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