SAP Systems Integration AG has claimed to be one of the most profitable international ERP services firms after recent cost-cutting and a rise in staff utilization levels drove bottom-line growth in its fourth fiscal quarter.
In the three months ending December 31, 2003, the Dresden, Germany-based company increased earnings before interest and tax by 10.8% to 13.3m euros ($16.6m) on revenue that grew 7.2% to 79.3m euros ($98.8m). This gave it an EBIT margin of 16.8%, which is significantly higher than that of larger, international consulting rival Accenture Ltd which made an EBIT margin of 15.5% in its first fiscal quarter ending November 2003.
In the full-year period, SAP SI grew net profit 78% to 26.4m euros ($32.9m) on revenue that fell 4.4% to 280.3m euros ($349m), which it blamed on the economic situation and exchange rate fluctuations. Revenue from applications hosting and management services grew 17.5% to 27.5m euros ($34.3m), but sales from Germany and Switzerland fell 2.6% to 250.8m euros ($312.6m).
SAP’s revenue growth has also been helped by recent acquisitions, which have expanded its skills in architecture consulting and integration services. In December 2003, it bought SPM Technologies Deutschland, a specialist in SAP’s NetWeaver integration platform, and last September, it acquired Swiss consulting company SLI Consulting.
On the back of these takeovers, SAP SI CEO Dr Bernd-Michael Rumpf expects revenue growth of between 8% to 12% in full-year 2004. Rumpf said: Although experts do not anticipate any significant growth in the global IT services market in 2004 either, we are convinced that we are excellently equipped to be able to reach these targets with the strategic expansion of our service portfolio and SAP NetWeaver as the technological basis for comprehensive integration projects.
This article is based on material originally published by ComputerWire