German software maker SAP is preparing to restructure and has hiked sales and margin targets to prop up its sagging shares amid litigation woes, weekly Manager Magazin reported.
The company was dealt a blow when a U.S. judge in November ruled that SAP must pay rival Oracle Corp $1.3 billion for software theft, dwarfing SAP's own estimate of the damages.
SAP, which last week reported software sales had jumped by about a third in the fourth quarter, aims to lift sales to 20 billion euros ($26.94 billion) by 2015, compared with 12.5 billion euros now, the magazine wrote citing internal planning documents.
The targets are not a surprise and consistent with the annual growth rates the company has outlined, software analyst Jan Christian Goehmann at NordLB said. NordLB has a buy rating with target price of 45 euros.
By 2015, SAP wants to raise its operating margin to 35 percent from 30.5 percent and will restructure during the first quarter, the magazine added.
We need to act urgently, the magazine quoted a company-internal presentation as saying.
We will fail if we do not think and act as a single SAP, it said.
SAP's shares have had a rocky ride over the last few months, burdened by litigation uncertainty, and even sparking speculation of a takeover, despite the fact that SAP's staff and founding shareholders hold a blocking minority stake.
On Wednesday SAP shares traded 0.4 percent lower at 11:37 a.m. EST, at 40.57 euros apiece, outpacing the STOXX 600 European technology index which was down 1.5 percent.
SAP declined to comment on whether it would restructure but said it had long been known the company was aiming for a 35 percent operating margin. SAP further said it was targeting margin growth of 1 percentage point per year.
A spokesman for the Walldorf, Germany-based company added SAP had been targeting sustainable double-digit growth from software licenses and revenues from commissions for a long time.
Growth is expected to come from new markets, such as on-demand software and mobility, the magazine reported, but added that existing markets are also expected to generate significant revenue.
(Reporting by Josie Cox, Edward Taylor and Hendrik Sackmann; Editing by David Cowell)