May 15, 2019 / 9:57 AM / 2 months ago

SAP mulling multi-year share buybacks, CEO says

FILE PHOTO: SAP logo at SAP headquarters in Walldorf, Germany, January 24, 2017. REUTERS/Ralph Orlowski/File Photo

MANNHEIM, Germany (Reuters) - German business software firm SAP is considering a multi-year share buyback program, Chief Executive Bill McDermott told shareholders on Wednesday, after closing several billion-dollar deals in recent years.

Europe’s most valuable technology firm completed its $8 billion takeover of Qualtrics, a U.S. company that tracks customer sentiment online, in January, following on from its $2.4 billion purchase of cloud-based human resources software company Callidus in 2018.

“We will also take a disciplined approach to capital allocation, including evaluating a multi-year share repurchase program,” McDermott told shareholders at SAP’s annual general meeting in Mannheim.

SAP last bought back 500 million euros ($561 million) of its shares in 2017.

Wednesday’s shareholder meeting is expected to focus on SAP’s restructuring program, announced in January, that involves around 4,400 layoffs as part of efforts to reshape the company into a digital platform business.

The restructuring has led to several departures of high-profile executives with deep industry expertise, sparking some concerns of a knowledge outflow.

Last month, U.S. activist investor Elliott disclosed a $1.2 billion stake in SAP last month and said it supported a management efficiency drive to expand adjusted operating margins by a total of 5 percentage points through 2023.

McDermott has indicated there is no pressure from Elliott for retrenchment after a recent round of job cuts, and the activist investor, which purchased a stake of 1 percent in SAP, is not expected to speak at the shareholder meeting.

SAP co-founder Hasso Plattner, 75, is also seeking re-election as chairman at the meeting but only for three years instead of the usual five.

Reporting by Patricia Uhlig; Writing by Caroline Copley; Editing by Mark Potter

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