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Results for the half-year ended 31 March 2005 - PowerPoint PPT Presentation
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Results for the half-year ended 31 March 2005. 10 May 2005. Financial highlights. Financial review. Revenue. Operating profit. +6%. +5%. é. é. Organic growth. Organic. Non-core. Acquisitions. £m at constant exchange rates. Revenue sources. Total revenue. Organic growth. Total 6%.
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Presentation Transcript
Revenue sources
Total revenue
Organic growth
Total
6%
62%
62%
Software
8%
Services
6%
38%
38%
At constant exchange rates
Profitability
Group operating profit margin 27% (2004: 27%)
Organic
80% of operating profit
Acquisitions and non-core
20% of operating profit
High-margin sales to existing customers (82% of revenue) sustained underlying profitability
Improved sales to existing customers
Increased investment
- Research & development
- Infrastructure
- Marketing
Cost efficiencies in research and development, administration
Operating margin -0.5pp to 28%
Operating margin +3.9pp to 24%
Revenue
UK- Organic revenue +5%
- growth in both small business and mid-market
- successful upgrade programmes
- Margin 38%
- high-margin sales to customer base
- infrastructure investment: £2m
£97m
£91m
38%margin
40%margin
Revenue
Mainland Europe- Organic revenue +6%
- stimulus from payroll legislation
- France (mid-market) the main growth driver
- migration to more sophisticated software and support
- Germany/Switzerland
- growth despite challenging market
- Acquisitions
- Simultan (January 2005)
- Symfonia (April 2005)
- Organic operating margin 23% (2004: 24%)
£101m
£90m
24%margin
23%margin
At constant exchange rates
North Americacontinued
- 7% organic revenue growth
- premium support take-up
- upgrade and add-on sales
- new sales channels: sales consultants
- Organic operating margin 23% (2004: 22%)
- Acquisitions and non-core: £40m revenue and £11m operating profit
- ACCPAC improved margins
- FLS augments payroll services business
£155m
£129m
24%margin
23%margin
Operatingprofit
Revenue
At constant exchange rates
Revenue
Rest of World- South Africa & Australia
- increasing support penetration
- upgrade programmes
- additional products for customer base, e.g. payroll
- South-East Asia
- profitable mid-market business
- Margins improved
- sales to existing customers
- cost efficiencies
- Developing small business divisions
£28m
£17m
19% margin
15% margin
At constant exchange rates
AcquisitionsFinancial trends
* Comparable period includes pre-acquisition results. All at constant exchange rates.
International Financial Reporting Standards
- IFRS reporting starts in 2006 H1
- Three principal impacts
- expense share-based payments
- capitalise and amortise different classes of intangible assets on acquisitions
- capitalise and amortise certain development expenditure
- Analyst teach-in, September 2005
Business portfolio
- Consistent revenue mix
- Growth in all segments
- Growth in all regions
- Growth in all product groups
- No competitor has this breadth
Decentralised structure
Local products
Accounting and business rules vary by country
Locally-based R & D ensures rapid response
Local support
Accounting queries require local knowledge
Support feedback drives R & D
Local marketing
Local brands dominate volume market
Local accountants and customers provide leads
Software
- Large base of businesses outgrowing original software
- Migration programmes generated 45,000 sales
- Continued investment in this activity
Support
- Extra support on existing solutions: 272,000 premium contracts
- Customers moving to new solutions with new support
- Higher support penetration in mid-market solutions
Total accounting customers
4,500,000
860,000
> 25 employees
660,000
Not using mid-market product
Total support contracts
1,300,000
Premium contracts
272,000
Software
- Assets: local model, customer base, resellers
- Addressing market in new sales channels
- Global vendors have partial coverage
- Outgrowing local vendors
Competitor
SAP
CORPORATE
MID-MARKET
Microsoft
LOCAL VENDORS
SMALL BUSINESS
Intuit
Support
- SMEs need IT partner
- Market-leading service
- Service demands becoming more sophisticated
MID-MARKET
SMALL BUSINESS
* Excluding CRM
* Excluding CRM
* Excluding CRM
* Excluding CRM
