Peachtree 2015 Annual Report Download - page 11

2015is a cornerstone year for Sage. We have seen another
year of improvement and I am pleased to announce that we
have met our long term key financial targets. Supporting
this headline progress, our recurring revenue growth,
driven by the move to subscription, underlines the quality
of our reported growth. This performance provides solid
foundations from which to build as we redefine our
ambition and target the next phase of growth.
When I joined Sage in 2012 I highlighted in my first report
that I was impressed by the fundamentals of Sage’s
business; our leading franchise with Small & Medium
Businesses, the recurring nature of revenues and the
strong cash generation. These remain core strengths for
Sage and are central to our plans for creating shareholder
value in the future. However, internally, I considered we
could improve the speed of decision making and our
go-to-market processes, and identified the need to leverage
the Group’s assets if Sagewas to be more than just the sum
of its international parts.
The Board
The composition of the board has been reconstructed
over recent years as we have sought to rebalance the
collective skillset, adding more technology knowledge,
more international experience, more understanding of
change management at pace and more financial depth.
The current board membership also provides options
for succession.
When Guy Berruyer stepped down as CEO at the start of
the financialyear, we conducted a focused and rapid search
looking for growth technology leadership skills, pace, drive
and ambition. From a global field of candidates I am
delighted that we found and appointed Stephen Kelly.
He has deep experience in running successful soware
companies, complemented by his focus on addressing
the needs of Small & Medium Businesses and puing
customers first. Together with Steve Hare as CFO, we
have two executive directors with proven track records
of successfully leading organisations through change.
Stephen is responsible for driving the next phase of our
strategy and he started by leading a comprehensive 100 day
review programme to inform our ambition and plans for the
future. The main learning point from this rigorous exercise
was that the existing strategy was soundly based but
execution needed to improve and accelerate. Put simply,
we need to raise our ambition. Stephen has reshaped his
executive commiee and has added the requisite global
experience whilst also ensuring continuity for our
customers by building on our existing talent pool.
Refreshed strategy to drive shareholder returns
Our strategy has been refreshed and remains consistent
with our belief in generating strong cash flows in order
to invest in the business and drive sustainable, profitable
growth. Our strong cash flow also continues to support
both our ability to grow with bolt-on acquisitions and our
progressive dividend policy.
The strategycomprises five strategic pillars which have
been agreed by the Board and are explored in detail within
the Strategy section of this Annual Report. This evolved
strategy recognises that we need to move from being a
decentralised product-centric organisation to a customer-
centric model that leverages our global scale. This is a
model based on earning customers for life and winning
market share, ultimately driving growth and shareholder
returns. New ways of working are required in order to realise
our potential, with a greater emphasis on international
collaboration, agile working and executing with measured
but determined pace. The development of Sage Live, our
brand new cloud solution for growing businesses with a
mobile first mind set, is the embodiment of these working
practices. Sage’s traditional development cycles were
redefined, as the product was taken by a multi country
team from idea to launch in just26 weeks.
Above all, it is the strength of our relationships with
customers, existing and new, and our ability to meet their
needs, which differentiates us in the market and provides
us with compelling opportunities to grow. This is where
investment will be prioritised. A key tenet therefore of
the strategyis to redeploy investment to strengthen our
capability to win in the market, but to do so in a manner
which is readily scalable.
The work we are doing also underpins the financial profile
of the business – driving organic recurring revenue growth
and maintaining margins whilst improving efficiency and
generating cash.
In summary
Nothing stands still at Sage; it has been a year of further
progress, particularly financially, but also a year of raising
our ambition and planning accordingly. There is a genuine
sense of anticipation throughout the organisation,
heightened by a measured injection of pace into the
decision making and implementation timelines. Much
work lies ahead in order to effect this transition, however
the opportunities to grow successfully are compelling.
As ever, we can only be successful with excellent people
and, on behalf of the Board, I would like to thank all our
employees and partners for their very considerable efforts
in the past year. I would also like to record the Board’s
appreciation for the work of Guy Berruyer who set the first
signals for the Group’s future development. Finally, I would
like to thank ourcustomers and look forward to building
on the momentum established in FY15, as we continue to
champion their cause.
Read more about
the Board on pages
60 and 61
Donald Brydon
Chairman
The Sage Group plc | Annual Report & Accounts 2015 9
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