SAP's co-CEO Morgan to depart April 30, Klein becomes sole CEO
SAP has named Christian Klein sole CEO effective April 30 as co-CEO Jennifer Morgan will depart.
Morgan and Klein were named co-CEOs following the departure of Bill McDermott in October. McDermott later became CEO of ServiceNow.
The departure of Morgan, known for her strong sales and customer background, is unexpected so soon after her appointment last year. In a statement, SAP said that Morgan and the company's supervisory board both mutually agreed she should depart.
The company said the current environment requires agility and a "very clear leadership structure" so SAP will have a sole CEO model going forward. Klein is 39 years old.
Morgan has been with SAP since 2004 and before becoming co-CEO with Klein she was president of the company's cloud unit.
On a conference call with analysts, Klein was asked about how SAP would make up for Morgan's responsibilities for the cloud unit and sales know-how. Klein responded that the CEO has transition has just occurred but "now it's really the time, of course, to think about how we're going to set up SAP going forward."
Klein wouldn't get into potential management changes. He said:
We need some more time. And at the end, this is also a decision of the Supervisory Board. As you know, also, Stefan Ries will leave the company really soon. And of course, we are looking for a new Chief People Officer. And there will be news coming but please have a little bit patience with us.
However, Klein did give some color on the product strategy. He said:
First of all, we want to win the LOBs, especially those LOBs who are close to the core. HR against Workday, Procurement against Coupa. Also with Bob Stutz now on board with C/4HANA, we definitely also making our bets inmthe front office. And there, of course, we also want to have high competitive solutions. On the other hand, and you know that this was my home turf in the past, we are, of course, also a strong ERP company. Especially in times like this, when I talk now to this -- to many CEOs, but also to, to the public sector they now realize that the ERP is more relevant than ever. When these lockdowns happen. When the supply chains are getting disrupted, suddenly, you have a different kind of talk. We are not talking anymore about the back-end ERP and only automating transactional processes. Now it's about how do you can react to fast-changing demands in the front office and pushing this through a supply chain, which is highly resilient.
Hours after the announcement that Morgan would be leaving the company SAP reported first quarter earnings in line with its preannouncement. SAP did see some deals postponed due to COVID-19.
SAP's Q1 2020 earnings (statement) delivered revenues of €6.521 billion IFRS or €6.522 billion non-IFRS, up 7 percent year-over-year with basic earnings per share of €0.68 (€0.85 non-IFRS), an improvement in comparison to Q1 2019 IFRS, when investors were faced with earnings per share of -$0.10.
SAP reported an operating profit of €1.21 billion IFRS, up 1 percent (non-IFRS) and flat at constant currencies.
Related:
- SAP's software licensing took Q1 hit due to COVID-19 pandemic
- SAP reorganizes business units to align sales, product strategy
- SAP Q4 2019: SAP hits €8 billion revenue mark as cloud bookings surge
- SAP prepares for its next big challenge
- Bill McDermott's departure can help SAP refocus on customer priorities, also brings risk