In Q1 2025, SAP even recorded an unexpected, record high operating profit of €2.5 billion ($2.9 billion). This represents an astounding 58% year-on-year growth! This growth is a testament to the company’s successful tactics in a rapidly evolving, inflationary economic environment. SAP’s revenue at the same time period increased by 11%, reaching €9 billion. Meanwhile, their cloud backlog ballooned by 29% year over year. At the same time, things went in the opposite direction for Volvo as the net sales fell 7% year-over-year.
SAP’s performance has led it to surpass Novo Nordisk, making it Europe’s most valuable public company as of last month. Deutsche Bank analysts lauded SAP’s performance as a “masterclass in resilience.” Instead, they focused on the company’s superb business acumen, especially in such a highly competitive market. Christian Klein, SAP’s CEO, stated, “Our success formula is working,” reinforcing the company’s confidence in its operational approach.
Volvo, under the stewardship of President and CEO Martin Lundstedt—who for much of this time was President and CEO of Scania—struggled during that same quarter. Lundstedt pointed out a developing sense of ambiguity regarding the use of tariffs and their likely impacts on international trade. He explained how these factors led to the company’s drop in sales. Volvo investors are likely riding high on Volvo’s extraordinary operating income of 18.2 billion Swedish krona for Q1 2025. This translated into an operating margin of 13.8%, the same quarter as the prior year.
Even with these challenges, Lundstedt is upbeat about prospects going forward. He didn’t downplay the current challenges on international trade dynamics but stressed Volvo’s focus on being best-in-class in working through those challenges.
New trends in capital markets inform the larger picture of the economic climate. Most importantly, these improvements greatly increase our ability to understand the corporate outcomes. The Dow Jones Industrial Average surged by 750 points, or 2%, on Wednesday, while the S&P 500 and Nasdaq Composite climbed by 2.6% and 3.2%, respectively. These types of advances indicate a reassuring market optimism while negotiations between the U.S. and China over trade continue to make headlines.
This morning’s Treasury Secretary Scott Bessent on improving trade relations. While he hoped for a de-escalation, he insisted that China must make major concessions. He stated, “The country knows it needs to change. Everyone knows it needs to change. We want to help it change because we need rebalancing too.” His perspective really puts into focus some of the global economic negotiations still happening that could define market flippers for years to come.
Revenue at Heathrow Airport increased during the three months to March. This growth was achieved in no small part even driving operational disruptions from an electrical substation fire in early 2023 that temporarily shut down operations. The airport’s resilience is a microcosm of how the travel and logistics industries are pivoting toward a post-pandemic world.
Firms like SAP have built successful businesses on this new world. At the same time, Volvo’s story reminds us that major corporations are often caught in the crossfire of shifting global realities. The starkly different results from these two behemoths highlight the challenges of succeeding in today’s fast-moving market.
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