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SAP SuccessFactors Solutions Deployed by L'OCCITANE Group

Zacks Equity Research

SAP SE SAP recently announced that its SAP SuccessFactors solutions for human capital management ("HCM") were deployed by L’OCCITANE Group, a natural ingredient-based cosmetics and well-being producer.

L’OCCITANE believes that adoption of HCM solutions will enable it to drive digital HR transformation globally. The implementation of SAP SuccessFactors solutions has achieved an HR platform which offers better insight throughout the company’s retail operations as well as improved efficiency of its HR processes. With the solution, the group is better positioned to attract as well as retain best talent, aided by lower administration of core HR processes and a finest-in-class user experience for employees.

The company believes that global deployment of SAP SuccessFactors Employee Central and SAP SuccessFactors Recruiting solutions will allow L’OCCITANE’s store employees, managers, HR and corporate office to have direct access to employee data for better insights as well as decision-making. Additionally, all candidates benefit from the access of the same streamlined, user-friendly application process that is globally consistent.

Our Take

SuccessFactors Employee Central, which forms the backbone of the company’s Human Capital Management offerings, surpassed the 2,000-customer mark in third-quarter 2017. Robust market traction of these solutions remains a strong top-line growth driver for the company. In addition, the company is well poised against its key HCM peers, even in markets outside the United States.

Driven by solid market traction of cloud business, the company has raised mid-term outlook, signaling brighter days ahead. Opportunities for growth in support revenues are lucrative, which in turn, drives the company’s enthusiasm regarding the mid-term projection hike. Cloud subscriptions and support revenues are anticipated to surpass software license revenues in 2018, consequently supplementing its financial performance.

The company has been concentrating on expanding cloud business to become one of the leading players in the category. Further, SAP has a competitive edge over its cloud competitors as its processes are designed to be industry-specific and can be customized to meet corresponding business requirements.

Further, the Zacks Rank #2 (Buy) company’s Customer Engagement and Commerce solutions once again achieved double-digit growth in new cloud bookings as well as software revenues. Driven by solid market traction of cloud business, the company has raised mid-term outlook, signaling brighter days ahead. This apart, the company’s human capital management applications are gradually gaining extreme popularity, with many international organizations.

However, the company’s stock has yielded a return of 33.3% in a year, underperforming the industry’s growth of 34%. Continued investment in a standardized converged HANA-based cloud platform and expenses incurred for new technologies resulted in a revenue mix-shift effect between its cloud and on premise business.

Other Stocks to Consider

Some other top-ranked stocks from the same space include Nuance Communications, Inc. NUAN, PROS Holdings, Inc. PRO and Adobe Systems Incorporated ADBE. While Nuance Communications sports a Zacks Rank #1 (Strong Buy), PROS Holdings and Adobe Systems carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nuance Communications has surpassed estimates twice in the trailing four quarters, with an average positive earnings surprise of 11.6%.

PROS Holdings has outpaced estimates in the preceding four quarters, with an average earnings surprise of 11.7%.

Adobe Systems has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 7.8%.

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