GSP has announced that this first quarter of 2019 it will have to write off a depreciation of between 800 and 950 million euros in its books. This is because it involves restructuring in order to achieve substantial cost savings in the longer term.
The idea is that the restructuring in 2019 will still ensure that some costs can be saved. It won’t be much, but in the course of 2020, the company expects to see it all over again. From that year onwards, savings of 750 to 850 million euros should be noticeable for the company.
Internal improvements
SAP has announced that it will be reassigning a number of employees to a new position. Other employees are also offered early retirement. Still, CFO Luka Mucic expects, he says during a conversation with journalists, that the number of employees will eventually be higher than last year.
This is not a cost reduction program – it’s a fitness program and a simplification, says Mucic to Reuters. The restructuring follows shortly after SAP presented its results in 2018. They were described by CEO Bill McDermott as extraordinary. However, they were disappointing compared to the turnover and profit that the company had expected to make on the whole.
The company is reported to have achieved 23 percent growth in the cloud area in the fourth quarter, compared to 37 percent in the previous quarter. However, the company expects cloud sales to continue to grow, and expects cloud sales to triple to 35 billion euros over the next four years. The company also expects to see its operating profit grow between 7.5 and 10 percent per annum.
Only recently, SAP completed the acquisition of Qualtrics. Before that, it was worth eight billion dollars and gives the opportunity to follow the sentiment of consumers. The impact of this has also been taken into account by SAP in its revenue forecast for 2019, which amounts to 28.6 to 29.2 billion euros.
This news article was automatically translated from Dutch to give Techzine.eu a head start. All news articles after September 1, 2019 are written in native English and NOT translated. All our background stories are written in native English as well. For more information read our launch article.