Sage Group plc · LSE:SGE
Sage — DB European TMT Conference 2010
17 slides from Sage's conference presentation, Sep 9, 2010
Slide 1: DB European TMT Conference
DB European TMT Conference 9 September 2010
Slide 2: Overview of Sage
Overview of Sage • The world’s leading supplier of business management software and services to small and medium-sized enterprises (“SMEs”) – with a market share of 15% for businesses worldwide that have less than 1,000 employees* • World’s #3 supplier of Enterprise Resource Planning (“ERP”) softwar
Slide 3: What Sage does
What Sage does • From small start-ups to medium-sized organisations, Sage makes it easier for companies to manage their business processes • Revenue by sector (FY09): Payment processing CRM* 5% 4% HR and payroll 10% Accounting 55% Industry- specific 26% 2
Slide 4: Financial highlights
Financial highlights Half-year ended 31 March 2010 H1 FY10 Statutory Underlying Revenue £718.9m -4% -2%* Pre-tax profit £177.5m^ +15% +11%^ Earnings per share 9.59p^ +16% +12%^ Operating cash flow/EBITA† 130% Dividend per share 2.58p +3% *At constant exchange rates and on an organic basis ^Stated pr
Slide 5: Improving organic revenue trends
Improving organic revenue trends 10% 10% 8% UK 8% Mainland Europe North America 6% 5% Group 4% 2% 2% 0% 0% 0% 1% H1 FY08 H2 FY08 H1 FY09 H2 FY09 H1 FY10 -2% -2% -4% -2% -4% -4% -5% -6% -5% -5% -6% -8% -8% -10% -9% At constant exchange rates 4
Slide 6: Cost efficiency drives H1 margin
Cost efficiency drives H1 margin 26% +130 bps 25% • EBITA margin increased to +130 bps 25% 24% • Cost savings made in FY09 23% benefitting H1 FY10 25.3% 22% 24.0% • Planned investments fall 22.7% largely in H2 FY10 21% 20% Reported H1 FY09 EBITA margin H1 FY10 Reported EBITA margin cost of H1 FY09 m
Slide 7: Connected business services
Connected business services • The technology world is divided over where data and applications should reside – desktop vs web vs hybrid • We believe the future is connected business services • The desktop will remain relevant for most SMEs, complemented by web-enabled services - offers rich function
Slide 8: Examples of connected services
Examples of connected services Sage 100 Anywhere Sage Fundraising Online SalesLogix Cloud Edition Sage ERP X3 7
Slide 9: Delivering value to customers
Delivering value to customers • Different views of the same data in online solutions • Opening up data to non-accounting users such as sales reps, warehouse staff, external accountants etc, with web/mobile access Sage 100 Anywhere 8
Slide 10: Customers rely on Sage for support
Customers rely on Sage for support • Maintenance and support (M&S) renewal rates at 81%* • Higher renewals in mid-market where value is greater: Small business Mid-market Group M&S revenue* £148.4m £255.7m £404.1m Split 37% 63% M&S contracts 1,012 814 1,826 Split 55% 45% M&S renewal rates 76% 90% 81
Slide 11: Premium support
Premium support Evolution of support 100% 90% 36 33 33 80% 41 47 70% 59 60% 50% 40% 64 67 67 30% 59 53 20% 41 10% Basic 0% Premium FY05 FY06 FY07 FY08 FY09 H1 FY10 Split by volume of contracts 10
Slide 12: Global collaboration
Global collaboration • Common approach and technology standards for delivering connected business services • Sage brand features alongside local product names • Launched Sage ERP X3 across the Group to meet growing demand for Global solutions for upper mid- market • Decentralised structure enables u
Slide 13: Payment processing
Payment processing • Closely linked to ERP • Opportunities across our markets, but functionality will be linked to local payments ecosystem • Sage Pay in UK continued to grow rapidly, Sage Payment Solutions cross-sell in US gaining momentum • Announced acquisition of Netcash in South Africa, providi
Slide 14: Sage Healthcare Division
Sage Healthcare Division • Market leading US practice management and Electronic Health Records (EHR) solutions • Target the 1 to 25 physician practice segment • FY09 revenue: £169m with 17% margin • EHR stimulus expected from ARRA* *American Recovery and Reinvestment Act of 2009 13
Slide 15: M&A landscape
M&A landscape • Opportunities in existing and new markets • Connected services • Valuation criteria • Competition from Private Equity 14
Slide 16: Well positioned for long term profitable growth
Well positioned for long term profitable growth • Improving revenue trends and increase in margin • Pent up demand as markets recover • Longer term opportunity to provide connected business services to our customers 15
Slide 17: Q&A
Q&A