Sage Group Plc · LSE:SGE
Sage — The Sage Group — H1 2017 Earnings Presentation
36 slides from Sage's earnings presentation, May 2017
Slide 1: Sage Group plc results for the six months ended 31 March 2017
Sage Group plc results for the six months ended 31 March 2017
Slide 2: Safe harbour
Safe harbour The following presentation is being made only to, and is only directed at, persons to whom business strategies and the environment in which the Company will such presentation may lawfully be communicated (“relevant persons”). Any person who is not a operate in the future. Such risks, un
Slide 3: Agenda
Agenda: • Summary Stephen Kelly • CFO review Chief Executive Officer • Progress @SKellyCEO • Outlook • Q&A 03 Sage Group plc interim results 2017 #SageResults
Slide 4: H1 17 Summary
H1 17 Summary The strategy is Strong foundations Q2 momentum working and road map continuing into H2 for accelerating growth 04 Sage Group plc interim results 2017 #SageResults
Slide 5: Steve Hare, Chief Financial Officer
Steve Hare Chief Financial Officer @SteveHareCFO 05 Sage Group plc interim results 2017 #SageResults
Slide 6: Organic and underlying revenue
Organic and underlying revenue H1 17 H1 16 Revenue Growth £m £m Organic* £838m £787m +6.4% Inorganic adjustments £74m £76m Underlying* £912m £863m +5.7% H1 17 H1 16 Operating Profit Margin % Change % % Organic 25.2% 25.6% -40bps Underlying 25.1% 25.5% -40bps *See appendix for definitions 06 Sage Gro
Slide 7: Financial summary
Financial summary H1 17 H1 16 Change Organic revenue £838m £787m +6.4% Organic operating profit £211m £201m +5.0% Organic Margin % 25.2% 25.6% -40bps Underlying EPS 14.5p 14.2p +2.0% Non-recurring items (exceptional costs) (£19m) (£29m) Recurring items (£12m) (£8m) Statutory Operating Profit £180m £
Slide 8: Strong capital metrics
Strong capital metrics Underlying Underlying cash flow from £229m £238m Opening net debt (£397m) operating profit operating activities Depreciation/ Free cash flow £166m £17m amortisation Interest (£10m) M&A (£87m) Share-based £5m payments Tax paid (£39m) Ordinary (£101m) dividends Change in working
Slide 9: Revenue categories
Revenue categories +6% +31% Software subscription +10% Recurring Revenue Other recurring -3% SSRS -8% Processing +11% H1 16 H1 17 09 Sage Group plc interim results 2017 #SageResults
Slide 10: Software subscriber growth
Software subscriber growth Software subscriber growth Growth in ASB of £82m to £618m over last 6 months £m 630 15% 2 11 610 590 22 570 34 550 13 530 618 510 490 536 470 450 Sep-16 Sage One Sage 50 Sage 200 Sage X3 Other Mar-17 10 Sage Group plc interim results 2017 #SageResults
Slide 11: Regional overview
Regional overview Northern Europe North Central America & Southern Europe International 11 Sage Group plc interim results 2017 #SageResults
Slide 12: Europe
Subscription penetration Europe Recurring Mix 35% H1 16: 31% What went well • Every major European country excl. France 78% H1 16: 75% growing above the group revenue growth rate • Northern Europe revenue growth of 8%, driven by: • Strong performance from Sage 50 Accounts, achieving 30% recurring re
Slide 13: North America
Subscription penetration Recurring Mix 22% North America 78% H1 16: 12% What went well H1 16: 76% • USA: X3 grew by 25% • USA: triple digit software subscription growth in Sage 50c & 200c • Canada: 9% growth, driven by Sage 50c and 200c Areas for improvement • USA subscription growth • USA focus on
Slide 14: International
International Subscription penetration Recurring Mix 55% 73% What went well H1 16: 51% • Brazil: 23% revenue growth, double digit recurring revenue growth H1 16: 72% • Africa: 14% X3 growth, 64% growth in Sage One revenue • Middle East: growing by 23%, with strong Sage X3 growth • Australia: 8% grow
Slide 15: Financial Discipline
Financial Discipline Annual savings secured in H1 17 Headcount £21m Other £7m Total savings £28m Total exceptional costs (£19m) 15 Sage Group plc interim results 2017 #SageResults
Slide 16: Organic operating profit margin: 12 month snapshot
Organic operating profit margin: 12 month snapshot 27.0% -0.5% -4.4% 4.5% 25.0% 23.0% 21.0% 25.6% 25.2% 19.0% 17.0% 15.0% Mar-16 Product Development Go to Market G&A Mar-17 16 Sage Group plc interim results 2017 #SageResults
Slide 17: H1 17 Summary
H1 17 Summary Focus on financial Strong foundations Q2 momentum discipline and road map continuing into H2 for accelerating growth 17 Sage Group plc interim results 2017 #SageResults
Slide 18: Stephen Kelly, Chief Executive Officer
Stephen Kelly Chief Executive Officer @SKellyCEO 18 Sage Group plc interim results 2017 #SageResults
Slide 19: Commitment to The Golden Triangle
Commitment to The Golden Triangle Payments People and Payroll Golden and Banking Triangle Accounting 19 Sage Group plc interim results 2017 #SageResults
Slide 20: Strategic Pillars
Strategic Pillars Customers Winning in for Life the Market One Sage Revolutionise Business Capacity for Growth 20 Sage Group plc interim results 2017 #SageResults
Slide 21: Revolutionise business
Revolutionise business More insights into our data In-the-moment Powerful accounting business apps Easy-to-use Invisible admin technology 21 Sage Group plc interim results 2017 #SageResults
Slide 22: Revolutionise business
Revolutionise business Cloud-first, mobile led Open API – Complete AI powered, enabling cloud solution invisible admin Intuitive dashboards Real time access to financial health 22 Sage Group plc interim results 2017 #SageResults
Slide 23: Revolutionise business: Strategic alliances
Revolutionise business Strategic alliances 23 Sage Group plc interim results 2017 #SageResults
Slide 24: Customers for Life
Customers for Life Transition to subscription Software subscriptions Renewal Rates Subscription Subscription On plan 1,240k 86% On plan 84% 840k Off plan Off plan H1 16 H1 17 H1 16 H1 17 H1 16 H1 17 24 Sage Group plc interim results 2017 #SageResults
Slide 25: Customers for Life – Sage 50c
Customers for Life – Sage 50c H1 17 Sage 50c revenue growth +25% Cloud enabled contracts >110k 25 Sage Group plc interim results 2017 #SageResults
Slide 26: Winning in the Market
Winning in the Market Enterprise Scale Up Start Up 26 Sage Group plc interim results 2017 #SageResults
Slide 27: Winning in the Market
Winning in the Market H1 16 UK & Product USA France Spain Germany Canada Brazil RSA Australia Ireland 27 Sage Group plc interim results 2017 #SageResults
Slide 28: Winning in the Market
Winning in the Market FY 17 UK & Product USA France Spain Germany Canada Brazil RSA Australia Ireland 28 Sage Group plc interim results 2017 #SageResults
Slide 29: Capacity for Growth
Capacity for Growth Financial discipline Profitable growth Efficient Capital Allocation 29 Sage Group plc interim results 2017 #SageResults
Slide 30: One Sage
One Sage Communication of Colleague Sage Foundation strategy and values engagement 30 Sage Group plc interim results 2017 #SageResults
Slide 31: Growth Drivers
Growth Drivers M&A M&A NCA NCA M&A NCA C4L C4L FY17 Further Acceleration 31 Sage Group plc interim results 2017 #SageResults
Slide 32: FY17 Outlook
FY17 Outlook Revenue Operating Exceptional growth margin charge not expected to exceed £75m 32 Sage Group plc interim results 2017 #SageResults
Slide 33: H1 17 Summary
H1 17 Summary The strategy is Strong foundations Q2 momentum working and road map continuing into H2 for accelerating growth 33 Sage Group plc interim results 2017 #SageResults
Slide 34: Q&A
Q&A #SageResults # 34 Sage Group plc interim results 2017 #SageResults
Slide 35: Glossary - revenue
Glossary - revenue Measure /Description Organic revenue Organic revenue neutralises the impact of foreign exchange in prior period figures and excludes the contribution from current and prior period acquisitions, disposals and assets held for sale. Underlying revenue Underlying revenue neutralises t
Slide 36: Glossary – profit and cash flow
Glossary – profit and cash flow Measure /Description Why we use it Underlying Prior period underlying measures are retranslated at the current year exchange rates to neutralise the effect of currency fluctuations. Underlying measures allow management and investors to compare performance without the