SAP cuts 2020, mid-term guidance due to COVID-19 hit

SAP SAPG.DE cut its guidance for 2020 and for the medium term on Sunday, saying the reimposition of coronavirus lockdowns had hit its business while hard-hit industries would now take longer than expected to recover.

The German business software group, a leader in enterprise applications ranging from finance to supply-chain management, said in an ad hoc filing that its earlier forecast that opening economies would revive demand now no longer held.

“While SAP continues to see robust interest in its solutions to drive digital transformation as customers look to emerge from the crisis with more resilience and agility, lockdowns have been recently re-introduced in some regions and demand recovery has been more muted than expected,” SAP said.

In particular, SAP added, it no longer anticipates a meaningful recovery in Concur, its business travel and expenses expenses application, for the remainder of this year.

SAP, headquartered in the southwestern town of Walldorf, now expects adjusted total revenue this year at 27.2 billion euros to 27.8 billion euros ($32.24-$32.95 billion), at constant currency, down from an earlier range of 27.8-28.5 billion euros.

Adjusted operating profit, also at constant currency, is now seen at between 8.1 and 8.5 billion euros. The earlier range had been 8.1-8.7 billion euros.

SAP had been due to publish third-quarter results on Monday morning but rushed them out on Sunday evening, as is required under German stock exchange rules requiring companies to publish guidance changes as quickly as possible.