SAP AG (SAP), the largest maker of business-management software, toppled Siemens AG (SIE) to become the most valuable publicly traded German company, overtaking the 164-year-old engineering giant for the first time.
SAP’s valuation reached 62.4 billion euros ($75.3 billion) at the close of trading in Frankfurt today, compared with Siemens’s 61.3 billion euros and Volkswagen AG (VOW)’s 59.9 billion euros, data compiled by Bloomberg show. SAP rose as much as 4.2 percent in Frankfurt trading after saying it’s taking market share amid a slowing industry.
Founded 40 years ago, SAP has added 25 percent this year, making the Walldorf-based company the second-best performer on Germany’s benchmark DAX Index. Siemens, founded in 1847 and Europe’s largest industrial company, has lost about 9 percent, while carmaker Volkswagen has added 14 percent.
“SAP has been really fast in occupying the most exciting fields in its industry,” said Mirko Maier, an analyst at Landesbank Baden-Wuerttemberg in Stuttgart, Germany, who has a hold rating on the shares. “Software is becoming ever more important when compared to hardware.”
SAP has added applications for mobile devices, the Hana database software and programs delivered via the Web to its arsenal to help edge out archrival Oracle Corp. (ORCL) Co-Chief Executive Officers Jim Hagemann Snabe and Bill McDermott have also stepped up the pace of acquisitions to fuel growth, agreeing to acquire Ariba Inc. (ARBA) in May for $4.3 billion.
“We are now taking very strong market share” with second- quarter sales growth exceeding 10 percent in “flat markets,” Snabe said in a Bloomberg Television interview. “While the worries are there about the euro, companies are still investing, and software is one of the areas they invest in to manage this new area of uncertainty.”
Siemens cut its full-year forecast in April after its transmission unit booked charges for delays in hooking up marine wind farms to the electricity grid. Chief Financial Officer Joe Kaeser said last month that there will be a “rocky road” to meeting the new targets.
Still, Siemens’s revenue dwarfs SAP’s. The Munich-based engineering company had sales of 73.5 billion euros in its latest fiscal year, compared with SAP’s 14.2 billion euros. SAP shares trade at 16.5 times estimated earnings, while for Siemens that ratio is 10.8, according to data compiled by Bloomberg.
SAP added 1.72 euros, or 3.5 percent, to close at 50.77 euros in Frankfurt. Siemens slid 26 cents, or 0.4 percent, to 67 euros. Preferred shares of Wolfsburg-based Volkswagen fell 1.40 euros, or 1.4 percent, to 132 euros.