SAPGF - Sequoia Fund -  SAP SE: We See A Clear Path To Enhanced Profitability

2024-03-23 06:00:00 ET

Summary

• After following SAP for many years, we bought shares in the company in 2022.
• A handful of years ago, SAP set about transitioning its core ERP software product suite from one typically run by customers on their premises to a cloud version delivered directly by SAP.
• In 2022, slowing ERP revenue growth and mounting temporary costs related to the ERP cloud transition gave some investors pause.
• A year and a half later, we remain optimistic about SAP's prospects.

The following segment was excerpted from this fund letter.

SAP SE ( SAP )

After following SAP for many years, we bought shares in the company in 2022. Since we have not covered SAP in much detail in prior communications, we will start with a little background. This Germany-based company boasts the leading global share in enterprise resource planning (ERP) software, or what one might consider the operating system for large businesses. This type of software performs critical functions for customers, related to bookkeeping, manufacturing, and supply chain. SAP also sells complementary modules that help customers manage human resources, procurement, and expenses. For multinational enterprises that make or move something in the physical world, SAP is just about the only game in town. As a result, SAP has retained many of its customers, particularly its biggest ones, for decades....

For further details see: