German software giant SAP SE unveiled a share buyback program valued at up to €1.25 billion, aiming to boost investor confidence and enhance shareholder returns. The announcement, made on Friday, February 23rd, 2024, follows a period of strong financial performance for the company.
"This share buyback program underscores our commitment to returning excess capital to shareholders and our confidence in the future prospects of SAP," said Christian Klein, CEO of SAP. "We believe that this program, combined with our ongoing commitment to organic growth and strategic acquisitions, will create significant value for our shareholders."
The buyback program, which is expected to be completed by the end of December 2024, will be executed through repurchases on the Frankfurt Stock Exchange. The specific number of shares repurchased will depend on market conditions and the prevailing stock price.
SAP's decision to initiate a share buyback program comes amidst a backdrop of a healthy financial performance. The company reported strong revenue and earnings growth in its most recent quarter, driven by continued demand for its cloud-based enterprise resource planning (ERP) software and other digital transformation solutions.
Analysts welcomed the announcement, viewing it as a positive signal for investors. "This share buyback program is a vote of confidence from management in the company's future prospects," said one analyst. "It is also likely to be well-received by investors, who are always looking for ways to improve their returns."
The share buyback program is the latest in a series of measures taken by SAP to enhance shareholder returns. The company has also increased its dividend payout ratio in recent years. These initiatives reflect SAP's commitment to creating long-term value for its shareholders.
SAP's share price rose slightly on the news of the buyback program. The company's shares have outperformed the broader market in recent months, reflecting investor confidence in its growth prospects.