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] .

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                   Conor McClafferty 
  David Ginivan, Corporate                   Sophia Johnston 

APPENDIX - FY22 underlying measures [2]

 Underlying measures (GBPm)            Q1 22   H1 22   Q3 22   FY 22 
 Recurring revenue by portfolio 
 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]                                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 (GBPm)           H1 22      FY 22    H1 22    FY 22 
                                  ---------  ---------  -------  ------- 
 North America 
 US                                     305        674      323      704 
   o f which Sage Intacct               102        231      105      237 
 Canada                                  52        113       54      115 
 Northern Europe (UK & Ireland)         208        428      212      434 
 Africa and APAC                         65        140       72      153 
 France                                 128        258      136      273 
 Central Europe                          56        112       71      136 
 Iberia                                  60        120       67      134 
                                  ---------  ---------  -------  ------- 

[1] 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] 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] 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] 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 or visit 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.



(END) Dow Jones Newswires

December 08, 2022 02:00 ET (07:00 GMT)

Sage (LSE:SGE)
Historical Stock Chart
Von Aug 2023 bis Sep 2023 Click Here for more Sage Charts.
Sage (LSE:SGE)
Historical Stock Chart
Von Sep 2022 bis Sep 2023 Click Here for more Sage Charts.