REG - Sage Group PLC - Update on financial reporting

SageAnnouncement

07/12/2023 07:00

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RNS Number : 9418V  Sage Group PLC  07 December 2023

Update on financial reporting

 

7 December 2023

As announced in Sage's FY23 results on 22 November 2023, The Sage Group plc.
("Sage" or the "Group") intends to simplify its revenue reporting to enable
continued, clear understanding of progress and performance given the recent
evolution of the Group, as set out below. These changes will be introduced in
Sage's Q1 24 trading update, and will apply to Sage's future financial
reporting.

Move from recurring to total revenue

Sage has previously provided revenue metrics and analysis based primarily on
recurring revenue. Going forward, Sage will focus its reporting on total
revenue, as total and recurring revenue growth rates increasingly converge as
a result of the reduction in other revenue (SSRS), in line with the Group's
strategy 1  (#_edn1) . To facilitate comparison with prior periods, the
appendix to this announcement sets out key total revenue figures for FY22 and
FY23. Annualised Recurring Revenue (ARR) growth will continue to be provided
as a strategic KPI.

Focus on revenue performance by region

Previously Sage has reported revenue performance by region, by portfolio and
by type. Reflecting the strong progress made in Sage's transition to
subscription and the cloud, revenue analysis by portfolio and by type,
together with cloud native ARR and Sage Business Cloud penetration 2  (#_edn2)
, will no longer be provided. In future, Sage will principally report total
revenue performance, including commentary on the drivers of growth, on a
regional basis. In addition, certain metrics including cloud native total
revenue, Sage Business Cloud total revenue and subscription revenue, will be
disclosed on a Group basis.

Sage's primary annual and interim financial statements and notes to the
accounts will not be impacted by these changes.

 

 Enquiries:  Sage:               +44 (0) 7341 479956  FGS Global:  +44 (0) 20 7251 3801
             James Sandford, Investor Relations       Conor McClafferty
             David Ginivan, Corporate PR              Sophia Johnston

 

APPENDIX - Underlying Total Revenue 3  (#_edn3)

 

 FY23 - Underlying total revenue (£m)   Q1 23  H1 23  Q3 23 YTD  FY 23

 North America                          242    483    724        973
 US 4  (#_edn4)                                420               846
 Canada                                        63                127

 UKIA                                   155    311    468        627
 UK & Ireland                                  233               471
 Africa & APAC                                 78                156

 Europe                                 143    293    438        584
 France                                        148               295
 Central Europe                                71                142
 Iberia                                        74                147

 Total revenue                          540    1,087  1,630      2,184

 Sage Business Cloud                    397    802    1,222      1,657
       of which cloud native            146    293    449        612

 

 FY22 - Underlying total revenue (£m)   Q1 22  H1 22  Q3 22 YTD  FY 22

 North America                          210    420    633        849
 US                                            363               734
 Canada                                        57                115

 UKIA                                   140    284    426        575
 UK & Ireland                                  213               435
 Africa & APAC                                 71                140

 Europe                                 143    285    422        558
 France                                        142               280
 Central Europe                                73                141
 Iberia                                        70                137

 Total revenue                          493    989    1,481      1,982

 Sage Business Cloud                    304    621    947        1,324
       of which cloud native            101    212    331        459

 

 1  (#_ednref1) Recurring revenue represented 96% and other revenue (SSRS)
represented 4% of total Group revenue in FY23.

 2  (#_ednref2) Sage's other strategic KPIs, including ARR growth, renewal
rate by value and subscription penetration, will continue to be provided.

 3  (#_ednref3) The above figures are provided at FY23 exchange rates. In line
with Sage's APM definitions, FY23 figures will be retranslated at current
period exchange rates when reported as comparator figures in FY24, to enable
performance to be assessed on a constant currency basis.

 4  (#_ednref4) Sage Intacct revenue performance will be included in the
narrative going forward and will no longer be tabulated.

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