Year-end results Financial Year 2018 Samantha Jameson Founder, Soapsmith #SageResults
Safe harbour The following presentation is being made only to, and is only directed at, persons to among others: Inherent difficulty in predicting customer behaviour; customers may whom such presentation may lawfully be communicated (“relevant persons”). Any not respond as we expected to our sales and marketing activities; the competitive person who is not a relevant person should not act or rely on this presentation or any environment; our ability to adapt to technological change; business interruption or of its contents. Information in the following presentation relating to the price at which failure of our systems architecture and communication systems; problems with relevant investments have been bought or sold in the past or the yield on such implementing upgrades to our applications and supporting information technology investments cannot be relied upon as a guide to the future performance of such infrastructure; any failure to properly use and protect personal customer investments. information and data; our ability to manage and maintain third party business partnerships; increased regulation of our businesses; any failure to process • This presentation does not constitute an offering of securities or otherwise transactions effectively; any failure to adequately protect against potential constitute an invitation or inducement to any person to underwrite, subscribe for or fraudulent activities; any significant quality problems or delays; the global macro- otherwise acquire securities in The Sage Group plc (the “Company”) or any economic environment; our inability to attract, retain and develop talented people; company which is a subsidiary of the Company our ability to repurchase shares; our inability to adequately protect our intellectual property rights; disruptions, expenses and risks associated with any acquisitions • The release, publication or distribution of this presentation in certain jurisdictions and divestitures; amortisation of acquired intangible assets and impairment may be restricted by law, and therefore persons in such jurisdictions into which charges; our use of debt to finance acquisitions or other activities; and the cost of, this presentation is released, published or distributed should inform themselves and potential adverse results in, litigation involving intellectual property, about, and observe, such restrictions. competition authority, shareholder and other matters. These forward-looking statements speak only as at the date of this presentation. Except as required by • Certain statements contained in this presentation constitute forward-looking the Financial Conduct Authority, or by law, the Company expressly excludes any statements. All statements other than statements of historical facts included in this obligation to update or revise publicly any forward-looking statement, whether as a presentation, including, without limitation, those regarding the Company’s financial result of new information, future events, or otherwise. Nothing in the foregoing is condition, business strategy, plans and objectives, are forward-looking statements. intended to or shall exclude any liability for, or remedy in respect of, fraudulent These forward-looking statements can be identified by the use of forward-looking misrepresentation. terminology, including the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will”, or “should” or, in each case, their negative or other • Rounding variations or comparable terminology. Such forward-looking statements involve As a result of rounding throughout this document, it is possible that tables may not known and unknown risks, uncertainties and other factors, which may cause the cast and change percentages may not calculate precisely. actual results, performance or achievements of the Company, or industry results, • Terminology to be materially different from any future results, performance or achievements Unless stated otherwise all references to revenue are organic. expressed or implied by such forward-looking statements. Such forward-looking • Materiality statements are based on numerous assumptions regarding the Company’s Only figures over £1m are considered to be material for the purposes of this present and future business strategies and the environment in which the Company presentation. will operate in the future. Such risks, uncertainties and other factors include, Sage Group plc Financial Year 2018 2 #SageResults
Steve Hare @SteveHare CEO Welcome Overview Financial review Strategy Outlook Q&A Sage Group plc Financial Year 2018 3 #SageResults
The vision To become a great SaaS business for customers and colleagues alike Sage Group plc Financial Year 2018 4 #SageResults
Derk Bleeker @BleekerDerk EVP Commercial Finance & Corporate Development Welcome Overview Financial review Strategy Outlook Q&A Sage Group plc Financial Year 2018 5 #SageResults
FY18 summary Challenging Strong Momentum FY18 Cash Flow into FY19 Sage Group plc Financial Year 2018 6 #SageResults
Revenue summary FY18 FY17 Growth Organic 1 revenue £1,819m £1,703m 6.8% Asset held for sale £38m £39m Organic revenue plus asset held for sale £1,857m £1,742m 6.6% Prior year organic adjustments - (£59m) FX adjustment - £37m Deferred income unwind of Sage Intacct (£11m) (£5m) Statutory revenue £1,846m £1,715m 7.6% Recurring revenue £1,441m £1,352m 6.7% 1 See appendix for definitions Sage Group plc Financial Year 2018 7 #SageResults
Margin summary FY18 FY17 Change 28.0% 1 Organic operating profit margin % 27.8% (0.2%) Underlying 2 operating profit margin % 27.2% 27.3% (0.1%) Non-recurring charge £10m £70m Underlying adjusted EPS 2 32.51p 28.46p 14.2% EBITDA 2 margin % 29.2% 29.4% (0.2%) 1 As reported 2 See appendix for definitions Sage Group plc Financial Year 2018 8 #SageResults
Operating profit margin bridge 30% 0.6% 2.2% 1.3% 25% 28.0% 27.8% 27.2% 25.8% 20% FY17 Organic Sage Intacct, Sage FY17 Pro Forma Uplift of Core FY18 Underlying Sage Payroll FY18 Organic Margin (as People & FX Margin Business Margin Solutions Margin reported) Sage Group plc Financial Year 2018 9 #SageResults
Strong cash flow metrics Underlying operating profit £504m Opening net debt (£813m) Free cash flow £356m Underlying cash flow from £482m Ordinary dividends (£171m) operating activities 1 M&A and exchange movements (£40m) Free cash flow 1 £356m Closing net debt (£668m) Free cashflow as a % of revenue 19% ROCE 1 23% Underlying cash conversion 1 96% Net debt leverage 1 1.2:1 1 See appendix for definitions Sage Group plc Financial Year 2018 10 #SageResults
Revenue categories +6.8% 79% Recurring mix Software FY 17: 79% +25% subscription +6.7% Recurring revenue Maintenance & 46% -12% Support +8% SSRS Software subscription +6% penetration Processing FY 17: 39% FY 17 FY 18 Sage Group plc Financial Year 2018 11 #SageResults
Progress in FY18 strategy: cloud connected Revenue FY18 ARR Growth Cloud connected 1 £280m 66% Cloud native 2 £153m 30% Sage Business Cloud £434m 51% 1 Cloud connected versions of Sage 50 and Sage 200 families 2 Sage Accounting, Sage Financials, Sage People, Sage Intacct & cloud version of Sage Enterprise Management Sage Group plc Financial Year 2018 12 #SageResults
Progress in strategy: cloud native Revenue FY18 ARR Growth Cloud connected 1 £280m 66% Cloud native 2 £153m 30% Sage Business Cloud £434m 51% 1 Cloud connected versions of Sage 50 and Sage 200 families 2 Sage Accounting, Sage Financials, Sage People, Sage Intacct & cloud version of Sage Enterprise Management Sage Group plc Financial Year 2018 13 #SageResults
Revenue categories +6.8% 79% Recurring mix Software FY 17: 79% +25% subscription +6.7% Recurring revenue Maintenance & 46% -12% Support +8% SSRS Software subscription +6% penetration Processing FY 17: 39% FY 17 FY 18 Sage Group plc Financial Year 2018 14 #SageResults
Our Journey to Subscription Software subscription 16% Software subscription 46% Recurring revenue Maintenance Software & Support subscription 85-90% Maintenance & Support SSRS and Processing SSRS and Processing SSRS and Processing FY14 1 FY18 Target 1 As reported Sage Group plc Financial Year 2018 15 #SageResults
Regional overview Sage Group plc Financial Year 2018 16 #SageResults
North America 48% 86% FY18 performance • Double digit organic and recurring revenue Software growth subscription • Strong progress in cloud connected and penetration Enterprise Management FY17: 35% • Intacct ARR around £100m, growing at 30% Recurring mix FY17: 85% Focus for FY19 Revenue FY18 FY17 Growth • Cloud connected migration Recurring £471m £417m +13% • Enterprise Management • Sage People & Intacct Processing £1m £1m -2% SSRS £74m £71m +4% Total £545m £489m +12% Sage Group plc Financial Year 2018 17 #SageResults
Recommend
More recommend
