At an investor event in New York, the new SAP CEOs Jennifer Morgan and Christian Klein presented measures to keep the Group on track. "There is a lot of scope to increase efficiencies and profitability," said Klein. He and his colleague Jennifer Morgan are working on a plan to realize cost benefits, he said.
"We know you want us to do what we announce," Morgan said. Above all, the long-weakening profitability in the business with software for rent and for use over the Internet should increase and increase the profits of the Dax heavyweight.
As a result, Europe's largest expects beyond the year 2020 good opportunities for additional distributions to shareholders. He sees the good development in the planned inflow of funds "pretty significant scope" for distributions, which went beyond the regular dividend payment, said CFO Luka Mucic. "We do not hoard cash."
In the coming year, SAP expects cash flow of around € 4.5 billion, compared to € 2.8 billion in 2018. By 2023, SAP wants to reach eight billion euros. The Group will decide annually on any share repurchases or special dividends, "if we have the money," said Mucic.
1.5 billion euros additional for shareholders
Although smaller acquisitions are possible, SAP is more likely to rely on growth from its own resources. For example, margins in the cloud segment should not be further burdened. Last week, the Group announced that it would divest up to € 1.5 billion in share repurchases or special dividends to shareholders in addition to the regular dividend. The SAP policy involves distributing 40 percent of net income as a normal dividend.
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While the cloud segment is to be strengthened, announced Mucic savings in marketing and sales. The purchasing should be streamlined and the number of suppliers to be reduced, said the CFO. This could save 100 million euros in the short term and up to 250 million euros a year in the longer term. In addition, administrative costs are also expected to decline. Mucic said after 2,500 redundancies in areas that, according to management, are unlikely to have a bright future, 2,500 employees left the company in January.
SAP wants to score with artificial intelligence
SAP also wants to score points with artificial intelligence among its customers. Technical processes in the applications of the group are to be automated, without a human hand or intervene, said Co-CEO Klein. "We want to increase the automation of our customers by at least 20 to 40 percent by using Artificial Intelligence."
Morgan stressed that they want to eliminate Silodenken in the Group and want to reduce duplication. The currently most valuable Dax company, which last employed nearly 100,000 people worldwide, should in future give a clearer focus on responsibilities.
Morgan and Klein had taken over the CEO in October from the surprisingly resigned Bill McDermott. "We've been in the job for four weeks now - and to be very honest, these four weeks sometimes feel like ten years," Klein said.