Late in March, German software program big SAP caught the world’s consideration when it overtook Novo Nordisk and LVMH as essentially the most invaluable firm in Europe. Ask SAP’s CFO about this novel numerical feat, although, and also you’re unlikely to be greeted with a lot fanfare.
“We is likely to be large in European phrases, however frankly, towards our most outstanding rivals, it’s not the case,” Dominik Asam, CFO of SAP, informed Fortune.
Europe’s most precious firm, SAP, barely breaches the highest 30 most precious corporations on the earth. The group, which sells companies’ back-end operations, lags nicely behind different U.S. tech giants.
SAP’s worth leapfrogged Novo Nordisk’s, the earlier golden baby of European markets because of its breakthrough weight-loss medication, in March. LVMH additionally held the highest spot at varied instances within the final 12 months. SAP’s profitable transformation to cloud computing, mixed with a growth in AI-related shares, has helped its market worth greater than triple since 2022.
Its closest firm in Europe in valuation as of April 24 is luxurious vogue home Hermès, a undeniable fact that brings Asam some amusement.
“I at all times jokingly say… productiveness is competing with magnificence for the highest spot in Europe,” mentioned Asam.
“However we’ve to match ourselves towards that sort of peer group, of these enterprise software corporations that ship productiveness to enterprises. And there may be nonetheless an enormous alternative.”
Asam described Europe as a “fragmented market” owing to regulation, which is why he thinks Europe’s most precious corporations aren’t populated by tech corporations.
“I’m deeply satisfied that Europe has to unite extra, to simplify, to create a extra standardized mannequin, to grow to be somewhat bit extra open to innovation, moderately than attempting to be the world champion of regulation. And these components have to return into place.”
Asam says SAP is focusing on traders throughout the pond the place there are “deeper pockets of capital” however maybe much less consciousness of European tech, after arguing “Europe is just about maxed out” for valuation progress. SAP has repeatedly breached the 15% cap that one firm could make up of Germany’s DAX inventory change, forcing a number of rebalances.
“For those who take a look at the market caps of a few of these different teams, we simply should persuade some traders to diversify somewhat bit away from them into shares like SAP, and that would give us a pleasant demand push.”
Tariffs
SAP has been aided in its ascent to the mantle of Europe’s most precious firm by a seismic commerce battle that has hobbled the share costs of consumer-facing manufacturers, together with LVMH and to a lesser extent Novo Nordisk.
Talking on the firm’s Q1 earnings name on Tuesday, SAP CEO Christian Klein mentioned there had been rising curiosity from purchasers within the firm’s provide chain administration techniques, which establish essentially the most aggressive suppliers throughout a number of sectors.
The group was toasting double-digit income progress and 29% progress in its cloud backlog, driving a ten% rise in gross sales whereas many European shares languished beneath tariff uncertainty.
In a press launch alongside earnings, Asam mentioned SAP was approaching the remainder of 2025 with “vigilance” amid international financial headwinds however remained optimistic about its present place as corporations attempt to navigate provide chain obstacles.
“AI provides an exquisite alternative to seek out options for these issues. From that perspective, I would say we’re centered on what we are able to management, versus catastrophizing a couple of scenario the place we do not even know precisely how dangerous it’d get.”
Whereas Asam made it clear he was not in favor of an unraveling commerce battle, including that an escalation would “solely eat the GDP of the world and scale back productiveness,” he did hope it’d present Europe a much-needed shake.
“Whereas the escalation has actually not helped, the query is, is there really additionally a constructive consequence that we are able to eradicate a few of these commerce boundaries, additionally among the regulatory pseudo commerce boundaries, I would say that exist in Europe?”
Asam criticized tit-for-tat taxes between the U.S. and Europe, together with threats from the French authorities to focus on digital companies as a part of its tariff retaliation towards Donald Trump.
“Perhaps this sort of commerce dispute is a wake-up name for Europe. We hope that at the very least it’s for Europe to say we’ve to vary the sport. As a result of there’s a lot nice expertise in Europe. There are such a lot of corporations that may compete successfully, however generally we’re our personal worst enemies by what we do there.
“And in that sense, I believe there may be some reality to among the criticism we presently obtain from the US, the place we must always pay attention very critically.”
This story was initially featured on Fortune.com
