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CORRECTED-UPDATE 1-SAP warns China slowdown hurting software sales
July 18, 2013 / 5:46 AM / 4 years ago

CORRECTED-UPDATE 1-SAP warns China slowdown hurting software sales

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(Corrects last sentence to show the Q2 figure is below consensus, not above)

* Says Japan, Australia, New Zealand especially affected

* Curbs outlook for software and software-related service

* Affirms 2013 operating profit outlook

* Q2 operating profit 1.22 bln euros vs poll avg 1.26 bln

FRANKFURT, July 18 (Reuters) - Germany's SAP AG on Thursday trimmed its outlook for 2013 software revenue, blaming slowing economic growth in China and customers' move to cloud-based services.

It said it expected revenues from software and software-related services to grow by at least 10 percent this year, excluding exchange rate fluctuations, compared with a previous outlook for 11-13 percent growth.

"In the short run, the reduced growth rates in China are impacting not just China but all the countries around it," co-Chief Executive Jim Hagemann Snabe said.

China's GDP growth rate slowed to 7.5 percent in the second quarter - the ninth quarter in the last 10 that expansion had weakened - in a setback for companies around the world betting on a continued boom in the world's second-biggest economy.

Especially companies in Japan, Australia and New Zealand have become hesitant about investing in software, SAP's Snabe said.

SAP's biggest competitor, U.S.-based Oracle, last month blamed Asia and Latin America for its disappointing software sales and subscriptions.

Snabe said on Thursday a strong pipeline for Asia-Pacific indicated that the business software maker's business in the region would recover again, though it was hard to say when that would be. "We will continue to invest in Asia-Pacific," he said.

SAP affirmed its outlook for 2013 operating profit of 5.85-5.95 billion euros ($7.7-$7.8 billion) at constant currencies, up 12-14 percent from 5.21 billion in 2012.

In the second quarter, SAP's operating profit was up 10 percent at constant currencies, at 1.22 billion euros, broadly in line with average analyst expectations. Including currency effects, the figure was up only 4 percent.

Software and software-related service revenue grew 10 percent to 3.35 billion euros in the three months through June, a tad below consensus of 3.41 billion euros.

$1 = 0.7637 euros Reporting by Maria Sheahan; Editing by Christoph Steitz and David Cowell

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