Peachtree 2012 Annual Report Download - page 22

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Our strategy
A vehicle for growth
Reviewing the segments we serve
We have undertaken a systematic assessment of the segments
that we serve in order to ensure that our portfolio of businesses
has the best possible fit with our strategic and financial objectives.
This assessment starts with a denition of core business.
• Our core business lies in providing accounting, ERP, payroll,
accountancy and related software and services to small and
medium sized businesses.
• We will add value to our core business by targeting adjacent
opportunities that are closely linked to the core and offer
genuine synergies. These might include new market segments,
new functionalities and new geographies. Typically, this occurs
where technology is highly integrated; for example payments
and CRM solutions.
As we assess existing and potential new businesses we
evaluate how close they are to our core business as well as the
potential for value creation. Our core businesses have a high
degree of commonality in the type of customer they serve; they
leverage our capabilities and technology in the provision of
accounting, payroll and related software and services; and they
are able to take advantage of our network of resellers and other
partners, particularly accountants. In addition, they have the
ability to sharecosts.
These criteria guide our management of our portfolio of
businesses: both additions and disposals. Through these
criteria we ensure the Group has the optimum portfolio of
businesses, with the maximum possible strategic synergies,
the biggest chance of success and the highest possible
potential for value creation.
At our Investor Day in July 2012, we set out our ambition to double our long-term average
organic revenue growth rate within the next three years, together with a targeted EBITA†
margin increase of 1 to 2 percentage points over the same period.
Our three growth cornerstones are set out below with more detail on how we are delivering.
Reallocating resources to our biggest opportunities
We have completed a comprehensive review of our core
product portfolio and are reallocating key resources to our
biggest opportunities.
All products within our core businesses have been categorised
as Invest, Harvest or Sunset:
• Invest products have the highest growth potential and will receive
additional investment to secure their future and lead Group
organic revenue growth.
• Harvest products are high margin, established products. Many
will continue to receive current levels of investment; others will
receive lower investment than in the past, as they have moved
into a lower revenue growth phase.
• Sunset products have lower growth potential and, in the large
majority, the needs they serve are better met by a more capable
product within our core portfolio. These products will begin a
sunset process and the associated investment will be redirected
to the Invest portfolio.
¹Focusing our business
Accelerating growth is our key
priority and we remain focused on
disciplined execution
Closeness
to Sage’s core
business
Potential
value
creation
Degree of overlap in:
• Target customers
• Capabilities or technology
• Channel partners
• Potential to share costs
† EBITA is dened as earnings before interest, tax, amortisation of acquired intangible assets and acquisition-related items and is after neutralising the impact
of foreign exchange movements.
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