FILE PHOTO: SAP SE co-CEO Christian Klein attends the company’s annual results press conference in Walldorf, Germany, January 28, 2020. REUTERS/Ralph Orlowski/File Photo
April 21, 2020
BERLIN (Reuters) – The coronavirus pandemic brought a six-month experiment in dual leadership at SAP <SAPG.DE> to an abrupt end as the German business software group named Christian Klein as its sole CEO to provide clarity to its 400,000 clients.
Klein will assume full responsibility while Jennifer Morgan, who was appointed alongside him last autumn to jointly run the world’s largest enterprise software company, will leave on April 30.
“What we figured out is that we have a responsibility to give our customers clear guidance,” Klein, 39, told reporters on Tuesday.
American Morgan, 48, became the first woman CEO of a blue-chip German company but her tenure was cut short by the sudden slowdown that struck in March as coronavirus spread around the world.
SAP confirmed results pre-released on April 8, when it reported a 1% gain in quarterly operating profits and cut its forecast for earnings to show an expected decline this year of between 1% and 6%.
Finance chief Luka Mucic said demand would decline in the second quarter but anticipated an improvement from the third quarter as governments gradually lift lockdowns that have hurt economic activity.
SAP remains strongly cash generative and will slow hiring and restrict discretionary spending to ride out the crisis. It will not seek state aid or put any of its 100,000 on short-time work, Mucic said.
The company will conduct no further share buybacks in 2020 having completed a repurchase program worth 1.5 billion euros ($1.6 billion), he added.
SAP stood by its mid-term goal of expanding profit margins by one percentage point per year through 2023 as more customers switch to running business processes like finance or supply chain management on cloud-based servers.
“We are very confident that we will again emerge as a stronger company and clear leader after the crisis,” said Mucic, who recently received a contract extension.
(Reporting by Douglas Busvine; Editing by Michelle Martin and Edward Taylor)
