Rachael Singh, Accountancy Age, Tuesday 27 July 2010 at 16:14:00

Second quarter results for German software giant SAP show a decline in cashflow


SAP, the financial software giant, has seen cash flow fall by 30% for thefirst six months of this year compared with the same period last year.

Financial results out today from the German IT company highlights cash flowhas declined 30% in H1 2010 to ?1.28bn (1.07bn) from ?1.82bn for the sameperiod in 2009.

The company said the year on year decrease is a result of receivingsignificantly more payments in 2009 than 2010. This is due to a surge in latepayments from 2008. SAP also attributed the decline to a one-time payment, inthe second quarter of 2010, from a settlement of a lawsuit with the insurancereimbursement expected later this year.

However, there was some good news. The business increased operating profit,under IFRS, by 21% to ?774m in the second quarter of 2010, up from ?641m for thesame period in 2009.

Profits after tax also increased in Q2 2010 to ?491m from ?426m Q2 2009;software related services increased 16% to ?2.26bn compared to the same periodin 2009; and software revenues grew 17% to ?637m from ?543m compared to thesecond quarter of last year.

Bill McDermott, Co-CEO of SAP said the increases to the top line was due togrowth in software and support revenue as well as "double digit growth" insubscription revenue.

The latest report excludes acquisition related charges and discontinuedactivities costing a total of ?66m.

The business managed to secure Delta Air Lines and Malaysia Airports ascustomers in the second quarter of 2010.

Further reading:

Doubledigit growth for SAP

SAP'sshares could fall following news of acquisition

SAPchairman admits customer trust was lost