Peachtree 2013 Annual Report Download - page 37

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Good performance driven
Total European underlying revenue contracted by
1% to £776.9m (2012: £788.4m). On an organic basis,
revenue grew by 2% (2012: 1%). Organic recurring
revenue grew by 5% (2012: 5%), and organic SSRS
revenue contracted by 2% (2012: 7% contraction).
Organic revenue in our French business was
flat, with weakness in SSRS offset by growth in
recurring revenue, albeit it was encouraging to see
a stronger performance in the second half. The weak
macroeconomic environment made the execution
of larger IT projects in the mid-market more difficult.
Performance across the rest of the business was more
encouraging, with Sage 100, in particular, achieving
good growth. The French business completed the
disposals of three non-core products in April 2013,
namely C&I, ATL and Automotive.
Our UK & Ireland business grew organically by 5%.
The business capitalised on the opportunity offered
by the implementation of Real Time Information (“RTI”).
Despite RTI going live during the first half of the year,
we continued to see strong demand for Sage 50 Payroll
and our training programmes in the second half. The
UK also delivered a very strong performance with Sage
One, with over 21,000 paying subscriptions at the year
end, an increase of more than three-fold in 12 months.
The UK & Ireland business also completed the disposal
of the UK Construction business in April 2013.
Our Spanish business contracted organically by 2%,
which is an improvement compared to last year, and
we are encouraged that by the year end the Spanish
business was exhibiting modest growth. New business
still remains particularly difficult due to the prevailing
Underlying revenue
(£m)
UK & Ireland 258.2
France 255.1
Spain 98.0
Germany 85.0
Sage Pay 27.6
Others 53.0
Regional performance continued – Europe
economic conditions. However, we were successful in
upgrading customers using the Logic Control family of
products to Sage Murano ERP. The Spanish business
also completed the sale of the non-core product Aytos
in April 2013.
Organic revenue in Germany grew by 1% during
the year, with the contraction in the first half offset
by a stronger second half performance. Our German
business faced a challenging grow-over comparator,
due to a successful one-time upgrade programme for
Classic Line customers during the 2012 financial year.
Our HR products continue to perform well, providing
some notable growth in SSRS revenue.
Our businesses in the rest of Europe all delivered
growth organically. Switzerland grew by 3% and
Poland by 7%. Portugal delivered organic revenue
growth of 17%, which was driven by new electronic
tax filing requirements.
Sage Pay performed strongly, with organic revenue
growth of 25% in the year, reflecting a price increase
in the second half of last year and growth in customer
numbers. Sage Pay also launched in Germany and
Spain during the year.
The EBITA margin for Europe was 28% (2012: 28%).
Highlights
– Increase in organic growth from 1% to 2%;
– Stand-out performance by the UK & Ireland, driven by legislative change;
– Over 21,000 Sage One paying subscriptions in the UK;
– Sage One launched in Germany, France and Spain;
– Launch of Sage 200 Online in the UK, and Sage Murano ERP Online in Spain;
– Launch of Sage Pay in Germany and Spain; and
– Disposal of European non-core products.
Key data
£m 2013 2012
Underlying revenue £776.9m £788.4m
EBITA £220.2m £222.0m
EBITA margin 28% 28%
Álvaro Ramírez
Chief Executive Officer, Europe
35The Sage Group plc | Annual Report & Accounts 2013
Financial statementsGovernanceStrategic report