Peachtree 2012 Annual Report Download - page 33

Operating results
Europe
Álvaro Ramírez, Chief Executive Officer, Europe
Strategic highlights
• Sage One gathered momentum in the UK & Ireland
• Four of the rst business apps for Windows 8 launched in the UK, Spain, Germany
and France
• Subscription pricing options launched in the UK, France, Spain and Germany
• Card holder present capability added to payments offering in UK & Ireland
following acquisition of Integral
Strategic priorities for FY13
• Hybrid cloud products for the SMB segment to be launched on the Azure platform
• Sage One to be launched in key European markets
• Sage Pay will launch into mainland Europe starting with Germany
Key data
£ m 2012 2011
Revenue £775.8m £765.1m
EBITA £219.1m £220.9m
EBITA margin 28% 29%
Country revenue
France 34%
UK & Ireland 33%
Spain 13%
Germany 11%
Sage Pay Europe 3%
Others 6%
Total Europe revenue grew by 1%* to £775.8m (2011: £765.1m*).
On an organic basis, this growth was also 1%* (2011: 4%*).
Organic subscription revenue grew at 5%* (2011: 5%*), with organic
software and software-related services revenue contracting by 7%*
(2011: 3%* growth).
Revenue in our French business was at* in the year, with licence
sales for our mid-market business in particular suffering from
a decline in business condence in the country. Subscription
revenue grew strongly in the year, particularly from Sage 100
and Sage ERP X3. We expect conditions in France to remain
challenging in the foreseeable future.
Our UK & Ireland business grew by 4%* in the year. This growth
was driven by a strong performance in maintenance and support,
particularly in Sage 50 and our Accountants’ Division. Our
mid-market business has also delivered good growth in the year
and Sage ERP X3 continued its momentum in the UK.
Our Spanish business contracted by 7%* with the bulk of the
contraction attributable to revenue shortfalls within the small
business division and software for local authorities. As we expected,
the market in Spain has remained challenging, with a decline in the
number of small and medium sized businesses and low business
condence. In response to the continued weakness in the Spanish
market, we restructured the business with an associated reduction
in headcount, resulting in a charge towards the end of the year
of £6.5m.
Revenue in Germany grew by 5%* with a solid performance in both
SSRS and subscription revenue. Our German business continued
to deliver good growth due to new releases of our core products
generating demand and a continued strong performance from our
HR products.
Swiss revenue contracted by 3%* and our Polish business
contracted by 20%* with a particularly difcult comparative due to
the one-off VAT stimulus in the prior year. Our Portuguese business
continued to benet from legislative changes with growth of 2%*
in the year.
Our Sage Pay business also performed very strongly, with organic
revenue growth of 25%* for the year, driven by new customers
and the successful introduction of pricing increases. The Integral
acquisition in February 2012 was another important development,
giving Sage Pay a cardholder present capability. This business has
been successfully rebranded to Sage Pay. The launch of Sage Pay
in Germany in October 2012 also represented a signicant milestone
in the roll-out of Sage’s payments capability across Europe.
The EBITA† margin for Europe was 28% (2011: 29%*), reecting both
the cost of the restructuring of our Spanish business and a focus on
protecting protability, notwithstanding challenging markets.
Overview
Performance
GovernanceFinancial statements
31
The Sage Group plc | Annual Report & Accounts 2012