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How does SAP know business travel is back? Its expenses software unit is still breathing

Want to dust off that flash luggage set? We Concur, says German giant

Business travel is back – kinda – said SAP as it filed results showing total calendar Q2 revenue down 1 per cent year-on-year to €6.67bn.

The German software giant's reason for optimism on tiny inflight meals and misguided airport shopping was performance of its Concur software business, which had been kiboshed by the pandemic.

SAP said it had seen the "first signs of recovery in travel and expense management with the easing of global travel restrictions, which led to Concur stabilising its sequential performance for the first time since the pandemic began."

In its Q2 results, SAP said cloud revenues were up 11 per cent year-on-year to €2.28bn. Meanwhile, software licences revenue was down 16 per cent compared with the same period last year to €650m.

Services revenue was down 11 per cent year-on-year to €920m, although this decline was down to the $250m sell-off of SAP Digital Interconnect, the mobile communications division which contributed around €80m in Q2 2020, the application specialist said.

SAP also claimed it had good news about its RISE with SAP product, which works with partners to help customers lift and shift legacy on-prem systems to the cloud then migrate them to the latest SAP software.

Although the German-speaking SAP user group (DSAG) said last month the proposition had yet to prove its worth without concrete case studies, SAP itself said it is winning over customers.

AMD, Coop Switzerland, Etihad Airways, and Siemens Energy had all selected RISE with SAP, it said.

Likewise, around 600 customers bought into S/4HANA, the company's most recent ERP platform, in the quarter. Total adoption was up to 17,000 organisations, rising 16 per cent year-over-year, SAP said.

Sluggish adoption of S/4HANA, the make-or-break platform for convincing users to upgrade and shift to the cloud, was a principal criticism of SAP's strategy as users failed to latch on to the business case.

In autumn 2020, SAP shares crashed 23 per cent when it downgraded its business outlook for the year.

In SAP Q2 2021 results, the company made an operating profit of €980m, down 23 per cent on a year ago.

The company raised its full-year 2021 outlook, saying cloud and software revenue would be €23.6bn-€24.0bn, up between 2 per cent and 3 per cent. The previous range was €23.4bn-€23.8bn. ®

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