FRANKFURT: German business software company SAP set ambitious new medium-term profit targets on Wednesday as it reported a first-quarter operating loss that chiefly arose from a restructuring charge.
CEO Bill McDermott, in a typically bullish answer to sceptics, said he was setting up a top team to drive margin expansion as the Walldorf-based company focus on organic growth while refraining from major takeovers. Activist investor Elliott Management Corp, which disclosed a 1.2 billion euro stake in SAP on Wednesday, said it supported management's strategy.The quarterly operating loss of 136 million euros chiefly resulted from an 886 million euro up-front charge in relation to the layoffs, which Chief Financial Officer Luka Mucic said were on track.
That came as investments in infrastructure upgrades rolled off, while further improvements should come as SAP completes the migration of its cloud applications to its HANA database engine, and works more with 'hyperscale' partners.