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Trading update for the nine months ended 30 June 2015

The Sage Group plc (“Sage”) is today issuing its trading update for the nine months ended 30 June 2015.

Financial performance

For the first nine months of the year, Group organic revenue increased by 6.6%, with growth of 7.5% in Q3. Year to date growth rate is flattered due to non-recurring items occurring in the first half and by a relatively weak Q3 2014 included in the prior year comparative. Management is confident that the business remains on course for full year FY2015 guidance of 28% operating margin and at least 6% organic revenue growth.

Organic recurring revenue grew by 8.3% for the first nine months of the year with growth of 9.7% for the third quarter, primarily driven by organic software subscription revenue growth of 34.2% in the quarter, maintaining the subscription growth momentum reported in the 2015 interim results. Organic software and software-related services (“SSRS”) revenue grew by 2% for the first nine months of the year, with Q3 growth of 1.2% compared to a relatively weak Q3 in 2014 (3.4% contraction).

Steve Hare, Chief Financial Officer, commented:
“The Business performance in the quarter showed continued momentum in recurring revenue growth and overall the performance was encouraging, with the revenue growth rates flattered by a weaker Q3 last year.

As we continue to transition the business towards higher quality revenue growth, through Sage’s Customer for Life strategy we anticipate that some quarters will be stronger than others and we are committed to sustainable, profitable growth generating consistent operating margins, yielding strong free cash flow and progressive dividends.”

Financial position

The Group's operating cash generation remains strong. During the quarter, an interim dividend of £48m was paid to shareholders and there were no share repurchases or acquisitions. Net debt at 30 June 2015 was £467m (£510m as at 31 March 2015).

Foreign exchange

Exchange rate headwinds continued to be a feature in the third quarter, reflecting the strength of Sterling relative to a number of currencies in territories in which Sage operates, most notably, the Euro and the Brazilian Real.

Steve Hare, CFO of Sage will be hosting an analyst conference call at 08:30am BST today which will be webcast from a link on our investor relations website, www.sage.com/investors. The call may also be accessed using the dial-in number +44 (0) 20 3427 1903 and pin code: 6187603. A replay of the call will also be available for one week after the event: Tel: +44 (0) 20 3427 0598, pin code: 6187603#

Enquiries
The Sage Group plc +44(0) 191 294 3068

Steve Hare, Chief Financial Officer
Beth Crosier, Investor Relations

Tulchan Communications +44(0) 20 7353 4200
David Shriver
Jonathan Sibun

About The Sage Group plc
Sage energizes the success of businesses and their communities around the world through the use of
smart technology and the imagination of our people. Sage has reimagined business and brings energy,
experience and technology to inspire our customers to fulfil their dreams. We work with a thriving
community of entrepreneurs, business owners, tradespeople, accountants, partners and developers
who drive the global economy. Sage is a FTSE 100 company with 14,000 employees in 24 countries.