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MarketScreener Homepage  >  Equities  >  Xetra  >  SAP AG    SAP   DE0007164600

SAP AG

(SAP)
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SAP : says improving margins, cash flow to create scope for more buybacks

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11/15/2019 | 06:41am EST

Improving profit margins and cash flow at SAP will create room for further capital return to shareholders after a 1.5 billion euro (£1.3 billion) buyback the company plans for 2020, finance chief Luka Mucic said on Friday.

BARCELONA (Reuters) - Improving profit margins and cash flow at SAP will create room for further capital return to shareholders after a 1.5 billion euro (£1.3 billion) buyback the company plans for 2020, finance chief Luka Mucic said on Friday.

The German business software company, which has just hired Jennifer Morgan and Christian Klein as its new co-CEOs, earlier this year set a target of expanding margins by an average of one percentage point a year through to 2023.

Acquisition-related costs mean the gain will be slightly lower this year, followed by a catch-up next year and then a straight line progression after that, Mucic told the Morgan Stanley European Technology, Media and Telecoms Conference in Barcelona.

Those gains will in turn boost both operating and free cash flow, Mucic added, creating additional scope to return capital to investors on top of paying dividends and reducing debt.

Mucic forecast SAP would make 4.5 billion euros in free cash flow in 2020, predicting compound annual growth of 15%-25% after that as the company moves to rationalise its hardware infrastructure.

"This should give us considerable scope to consider further capital return in the years to come," he said.

SAP, which under former CEO Bill McDermott launched a string of multibillion-dollar takeovers, has now foresworn large-scale deals, instead focusing on integrating its existing products to improve the user experience of its customers.

"We have no intention and line of sight to consider large-scale acquisitions at this point in time," said Mucic, confirming the line taken at a capital markets presentation in New York earlier this week.

(Reporting by Douglas Busvine; Editing by Mark Potter)

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Financials (EUR)
Sales 2019 27 598 M
EBIT 2019 8 205 M
Net income 2019 3 488 M
Debt 2019 9 093 M
Yield 2019 1,26%
P/E ratio 2019 39,5x
P/E ratio 2020 28,2x
EV / Sales2019 5,58x
EV / Sales2020 5,09x
Capitalization 145 B
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Number of Analysts 35
Average target price 133,25  €
Last Close Price 121,74  €
Spread / Highest target 25,7%
Spread / Average Target 9,45%
Spread / Lowest Target -28,5%
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Managers
NameTitle
Christian Klein Co-Chief Executive Officer
Jennifer B. Morgan Co-Chief Executive Officer
Hasso Plattner Chairman-Supervisory Board
Luka Mucic Chief Financial Officer
Juergen Mueller Head-Innovation & Technology
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