REG - Sage Group PLC - Update on financial reporting

SageAnnouncement

08/12/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221208:nRSH9821Ia&default-theme=true

RNS Number : 9821I  Sage Group PLC  08 December 2022

Update on financial reporting

 

8 December 2022

As announced in Sage's FY22 results on 16 November 2022, Sage intends to
evolve its financial reporting by giving greater emphasis to underlying
revenue and profit measures, and by amending the presentation of its regional
reporting. These changes will be introduced in Sage's Q1 23 trading update,
and will apply to Sage's future financial reporting. Further details are set
out below.

To facilitate comparison with prior periods, the appendix to this announcement
sets out key reporting figures for FY22 reflecting these changes. Sage's
primary annual and interim financial statements and notes to the accounts will
not be impacted.

Focus on underlying measures

In addition to statutory financial reporting measures, Sage also provides
non-GAAP Alternative Performance Measures (APMs) including underlying and
organic measures, to help assess financial performance. Underlying measures
allow management and investors to understand the performance of the Group on a
constant currency basis excluding recurring and non-recurring items, while
organic measures also adjust for the impact of acquisitions and disposals 1 
(#_edn1) .

Going forward, Sage will provide financial metrics and analysis including the
breakdown of revenue by category, by strategic product portfolio and by
region, together with Annualised Recurring Revenue (ARR), on an underlying
basis alongside organic growth rates.  Sage Business Cloud penetration and
subscription penetration will also be provided on an underlying basis.
Previously this information was provided primarily on an organic basis.
Certain organic revenue and profit measures including recurring and total
revenue by region will continue to be provided in the interim and full year
results.

Sage believes that these changes will enable a clearer understanding of both
the organic and inorganic performance of the Group.

Change to regional reporting

Sage also intends to amend the presentation of its regional reporting, to
reflect recent changes to the way in which the Group manages its operations.
Going forward, Sage will report performance across the following regions:
North America, comprising the US, Sage Intacct and Canada; UKIA, comprising
Northern Europe (UK & Ireland) and Africa & APAC; and Europe,
comprising France, Central Europe and Iberia.

 

 Enquiries:  Sage:               +44 (0) 7721 599502  FGS Global:  +44 (0) 20 7251 3801
             James Sandford, Investor Relations       Conor McClafferty
             David Ginivan, Corporate PR              Sophia Johnston

 

 

APPENDIX - FY22 underlying measures 2  (#_edn2)

 

 Underlying measures (£m)                    Q1 22  H1 22  Q3 22 YTD  FY 22

 Recurring revenue by portfolio 3  (#_edn3)
 Cloud native                                90     191    308        435
 Cloud connected                             190    385    589        842
 Sage Business Cloud                         280    576    897        1,277
 Products with potential to migrate          117    228    343        426
 Future Sage Business Cloud Opportunity      397    804    1,240      1,703
 Non-Sage Business Cloud                     35     70     105        142

 Recurring revenue by region
 North America                               174    357    562        787
 UKIA 4  (#_edn4)                            134    273    417        568
 Europe                                      124    244    366        490

 Recurring revenue by category
 Software subscription                       337    688    1,064      1,464
 Other recurring                             95     186    281        381

 Total recurring revenue                     432    874    1,345      1,845
 Other revenue (SSRS)                        31     61     84         104
 Total revenue                               463    935    1,429      1,949

 Underlying operating profit                        183               377

 Annualised Recurring Revenue (ARR)                 1,809             2,057
   of which cloud native                            448               560

 

Breakdown of revenue by region

                                     Recurring revenue     Total revenue

 Underlying measures (£m)
                                     H1 22      FY 22      H1 22    FY 22

 North America
 US                                  305        674        323      704
    of which Sage Intacct            102        231        105      237
 Canada                              52         113        54       115

 UKIA
 Northern Europe (UK & Ireland)      208        428        212      434
 Africa and APAC                     65         140        72       153

 Europe
 France                              128        258        136      273
 Central Europe                      56         112        71       136
 Iberia                              60         120        67       134

 

 1  (#_ednref1) APMs including underlying and organic measures are defined in
Appendix 1 (on pages 13 and 14) of Sage's FY22 full year results announcement,
dated 16 November 2022.

 2  (#_ednref2) The figures set out above are provided at FY22 exchange rates.
In line with Sage's APM definitions, they will be retranslated at current
period exchange rates when reported as comparator figures during FY23, to
enable the Group's performance to be assessed on a constant currency basis.

 3  (#_ednref3) As Other revenue (SSRS) now accounts for only 5% of total
revenue, the breakdown of revenue by strategic product portfolio will only be
provided on a recurring revenue basis going forward.

 4  (#_ednref4) United Kingdom, Ireland, Africa and APAC

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCFLFFAFFLDIIF