[caption id="attachment_85184" align="aligncenter" width="720"] Source: Company reports/Coresight Research
Adjusted results are non-International Financial Reporting Standards (IFRS) [/caption]   1Q19 Results SAP reported 1Q19 revenues of €6.12 billion, up 16.3% year over year and beating the €5.95 billion consensus estimate. Reported results were hurt by €886 million for restructuring in 2019, as well as acquisition-related charges and stock compensation from the Qualtrics acquisition (which closed January 23). Adjusted EPS was €0.90, up 24.4% and beating the €0.83 consensus estimate. Reported (International Financial Reporting Standards) EPS was €(0.10), compared to €0.59 in the year-ago quarter Performance by Segment Revenues in the company’s applications, technology & services (AT&S) business were €4.99 billion, up 12% year over year and up 9% in constant currencies. Contributors to growth included the following:

• SAP S/4HANA: The company’s enterprise resource planning (ERP) software for large companies optimized for its in-memory database HANA. Adoption grew 30% to more than 10,900 customers, and 40% of new customers in the quarter were first-time customers. Puma and German bank Banksparkasse Schwäbisch Hall started running on the platform during the quarter.
• Human Capital Management Solutions: The company’s total workforce management platform for permanent and contingent labor, which includes the flagship SAP SuccessFactors Employee Central platform, added more than 150 customers in the quarter to hit 3,200 customers globally.
• SAP Leonardo: Combines cutting-edge technologies such as artificial intelligence (AI), machine learning, Internet of Things (IoT), big data, advanced analytics and blockchain technology. New customers included Bumble Bee Foods and Premier Foods.
• Digital Platform: Includes SAP Cloud Platform and SAP Data Management Solutions and facilitates new app development, extensions and integration. New customers include Kontinental Hockey League.

Business Network (BN) revenues were €740 million, up 25% year over year and up 18% in constant currencies. American Express and SAP Ariba entered in a multi-year strategic partnership to offer buyers and suppliers new payment and financing options on the Ariba network. Omnicom selected SAP’s BN solutions during the quarter. Customer and Experience Management revenues were €305 million, up more than 100%.

• SAP C/4HANA: Solutions that serve both B2C and B2B and enable businesses to manage the front office in real time, this function includes sales, commerce, service, customer and data. Customers include Isuzu Motors South Africa, Groupe PSA Brazil and AmerisourceBergen.
• Experience Management Solutions (Qualtrics): With the acquisition of Qualtrics, SAP bought a business that combines experience management with end-to-end operational power to focus on four key areas: brand, customer, product and employee. New customers in the quarter include CVS Health and Cirque de Soleil.

Implications for Retail SAP’s intelligent enterprise framework for retail comprises three key components: an intelligent suite (including modules for customer experience, manufacturing and supply chain, digital core, people engagement and network and spend management), a digital platform including data management and the cloud and intelligent technologies that leverage AI/machine learning, IoT and analytics. Marquee customers include COOP, Maui Jim and Zalando. Outlook 2019 Guidance

• Reiterated adjusted cloud revenue of €6.7-7.0 billion (up 33-39%).
• Reiterated total adjusted cloud and software revenue of €22.4-22.7 billion (up 8.4-9.9%).
• Raised adjusted operating profit to €7.85-8.05 billion (from €7.7-8.0 billion), up 9.5-12.5% (at constant currencies).

2020 Guidance

• Reiterated adjusted cloud revenue of €8.6-9.1 billion.
• Reiterated total adjusted cloud and software revenue of €26.8-29.2 billion.
• Raised adjusted operating profit to €8.8-9.1 billion (from €8.5-9.0 billion).

The company also released goals for 2023 (called “Ambition 2023”):

• Adjusted cloud revenue of about €15 billion.
• Adjusted revenue of more than €35 billion.

Raise adjusted operating margins by one percentage point a year, representing an expansion of 500 basis points (i.e., to 39.5% from 34.3% in 2018.)