SAP Targets Strong 2008 Outlook Despite Lag in US Market

June 5, 2008

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SAP expects that its 2008 targets will remain on track despite some hardships in the U.S. market. The company reaffirmed its 2008 outlook at its annual general meeting, with CEO Henning Kagermann calling SAP’s core business “very healthy.”

Germany-based SAP (NYSE: SAP) is planning to expand its business to help shore up its position as Europe’s biggest software group, company chief Henning Kagermann said Tuesday.

Speaking at the group’s annual general meeting in the west German city of Mannheim, Kagermann said: “We remain focused on the large and growing company software market.”

Despite difficulties in its key U.S. market, the German software giant also confirmed its 2008 outlook with Kagermann describing the group’s core business as “very healthy.”

Room for Improvement

The company expects product revenue to grow between 24 and 27 percent at constant currencies with an operating margin of between 28.5 and 29 percent.

“We still have room for improvement in our operating margin compared with our rivals,” Kagermann told shareholders.

Kagermann defended the group’s acquisition last year of the French software company Business Objects, saying it was “the right decision at the right time.”

Facing Criticism

SAP is stepping up moves to further integrate Business Objects in its operations this year, with the company indicating that it planned to expand its operations through organic growth.

The SAP group has faced criticism from shareholder groups that the 4.8 billion euros (US$7.4 billion) it paid for Business Objects was too high.

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