Results for the year ended 30 September 2006

1
Results for the year ended 30 September 2006

2
Agenda

• Overview of the year
• Financial and regional review
• Business review and outlook

3
Highlights of the year

• 2006 strong year, in both existing business and
  recently acquired businesses
• Strong organic growth of 7, recovered in H2 to
  8
• Strong performance by established product lines
• Line 50 (UK) up 13
• Line 100 (France) up 11
• MAS 500 (US) up 17
• Newer products and territories also contributing
  strongly
• South Africa and Australasia up 17
• Simply Accounting (Canada) up 15
• Spain up 10

4
Financial highlights
5
5-year growth in adjusted earnings per share
20
13
21
11
11
EPS 2002-2004 under UK GAAP EPS 2005-2006 under
IFRS
6
Significant year for acquisitions
7
Financial review
8
Organic revenue growth

• Improved growth rate over last 2 years
• Excludes strong contribution from 2005 and 2006
  acquisitions
• Acquisitions consolidated into organic growth
  after full year contribution

Acquisitions / disposals
Organic
Non-core
7
6
m at constant exchange rates
9
Revenue sources
Organic revenue
Total revenue
7
Services 8
65
62
Software 5
38
35
m at constant exchange rates
10
Growth in combined software/support services
revenue
2005
2006
Combined support contract revenue 53
Combined support contract revenue 51
Standard support contract revenue 47
Standard support contract revenue 49
At constant exchange rates
11
Earnings growth

• EBITA margin 27 (2005 27)
• EBITA is the most accurate measure
• Amortisation and capitalisation effects excluded
• Revenue growth and product and service
  investments both drive margin

At constant exchange rates
12
Acquisitions
Emdeon
Adonix
Verus
23
24
é
41m
é
29m
23m
33m
9m
US February 2006 Enterprise value 171m EBITA
margin 39
France November 2005 Enterprise value 75m EBITA
margin 18
US September 2006 Enterprise value 306m EBITA
margin 11
post acquisition
Revenue
m at constant exchange rates
13
Cash flow and net debt
14
Regional review
15
Global presence in 19 countries
GREENLAND
SWEDEN
ICELAND
RUSSIAN FEDERATION
FINLAND
CANADA
NORWAY
ESTONIA
LATVIA
UK IRELAND
GERMANY
DENMARK
LITHUANIA
BELARUS
POLAND
NETHERLANDS
BELGIUM
KAZAKHSTAN
FRANCE
AUSTRIA
MONGOLIA
US
SWITZERLAND
UZBEKISTAN
BULGARIA
SPAIN
GEORGIA
KYRGYZSTAN
NORTHKOREA
GREECE
TURKEY
TURKMENISTAN
TAHKISTAN
ITALY
PORTUGAL
CHINA
SOUTHKOREA
JAPAN
SYRIA
AFGHANISTAN
IRAN
IRAQ
MOROCCO
TUNISIA
PAKISTAN
ALGERIA
NEPAL
LIBYA
EGYPT
WESTERN SAHARA
UAE
SAUDIARABIA
MEXICO
TAIWAN
INDIA
OMAN
VIETNAM
CUBA
MYANMAR
MAURITANIA
LAOS
MALI
NIGER
CHAD
SUDAN
THAILAND
YEMEN
HONDURAS
GUATEMALA
SENEGAL
PHILIPPINES
NICARAGUA
CAMBODIA
BURKINA
GUINEA
NIGERIA
COSTA RICA
ETHIOPIA
VENEZUELA
PANAMA
GHANA
SRILANKA
COTEDIVOIRE
CENTRALAFRICAN REPUBLIC
LIBERIA
GUYANA
MALAYSIA
FRENCHGUIANA
CAMEROON
COLOMBIA
SURINAME
SOMALIA
UGANDA
KENYA
GABON
CONGO
ECUADOR
DEMOCRATICREPUBLIC OFCONGO
SINGAPORE
TANZANIA
PAPUANEW GUINEA
INDONESIA
BRAZIL
PERU
ANGOLA
ZAMBIA
BOLIVIA
MOZAMBIQUE
MADAGASCAR
ZIMBABWE
NAMIBIA
BOTSWANA
PARAGUAY
AUSTRALIA
SOUTHAFRICA
URUGUAY
CHILE
ARGENTINA
NEWZEALAND

• 23,000 business partners and certified
  consultants promoting our products
• 40,000 professional advisors recommending Sage
  product

16
Organic revenue H1 vs H2
17
UK

• Organic revenue 7
• strong growth in established products
• Line 50 up 13
• introduction of new products
• Line 1000, Start-up
• focus on integrated product suites
• successful combination of software/support
  contracts
• EBITA margin 37 (2005 37)

205m
193m
37margin
37margin
EBITA
Revenue
18
Mainland Europe

• Organic revenue 5
• Spain 10
• France 4
• Germany/Switzerland 2
• Poland 15 (y-o-y)
• Strong growth in CRM and industry-specific
  products
• EBITA margin 22 (2005 22)

300m
204m
22margin
22margin
EBITA
Revenue
At constant exchange rates
19
North America

• Organic revenue 6
• recovery in H2
• Small Business Division 10
• strong contribution from all products
• Peachtree, Simply, ACT! had a particularly strong
  year
• Mid-Market Division 4
• good performance from MAS 500 and ACCPAC products
• EBITA margin 24 (2005 24)
• excluding one-off gain on disposal

362m
312m
24margin
24margin
Revenue
EBITA excluding disposal profit
At constant exchange rates
20
Rest of World

• Organic revenue 17
• strong performances from South African accounting
  and payroll products
• Australia core products again strong
• growing presence in new markets
• EBITA margin 27 (2005 24)
• growth in organic revenue improved margin

69m
58m
24margin
27margin
Revenue
EBITA
At constant exchange rates
21
Business review and outlook
22
What is helping us grow?
Simplicity
Integrity
Agility
Trust
Innovation
23
Growing customer base

• 5.2 million customers
• 553,000 businesses added this year
• SME remains our focus
• Basis of our strong market position
• Dynamic source of migrations and upgrades
• Recurring revenues through service support
  contracts

Results from six months ended 31 March 2006
24
Global CRM

• Organic growth 8
• reorganised on a global basis end 2005
• Comprehensive range of products
• ACT! entry level
• Sage CRM and SageCRM.com hosted version
  mid-market
• SalesLogix industry-specific application

5
5
19
71
25
Technology initiatives

• We remain committed to developing local products
  for local markets
• Standardise on technologies where appropriate
• Offer choice where appropriate
• MySQL partnership announced October 2006

26
Acquisition strategy

• Clear and consistent acquisition strategy
• Based on our core competency knowledge and
  experience of the SME market
• Three principles to acquisition strategy
• Broaden our product lines
• Enter new geographic regions
• Add new industry-specific applications to our
  product lines
• More than accounting software provider 40 of
  revenues come from other products like CRM,
  industry-specific and payroll

27
Changing revenue mix of our products
2005
2006
28
Industry-specific market presence

• Health care
• Food distribution
• Transport
• Manufacturing
• Real estate/construction
• Accountancy practices
• Not-for-profit
• Retail

29
Sage Healthcare Division (SHD, formerly Emdeon)

• Doctors practices in the US are classic SMEs
• Time and resource constrained
• Require IT support to better manage business
  opportunities
• SHD concentrates on the small practices 1-10
  doctors
• 96 of practices in this market segment
• 90 of customers on combined software/support
  contracts
• Parallels with Sages practice management
  solutions for accountancy practices
• Application of Sages expertise in rationalising
  cost base
• Opportunity to cross-sell back-office products in
  future

30
Revenue mix

• Software
• Practice Management
• Electronic Health Records
• Support
• adoption and renewal rates gt 90
• Network services information and transaction
  tools
• eligibility assessment, insurance claim tracking,
  patient bill statements
• used by 64 of EPS customers

31
Verus and Protx Merchant Services

• Provision of payment services tailored to needs
  of SMEs
• Cost effective
• Easy implementation
• Designed to help SMEs manage their businesses
  better
• Front office application with tie-in to both
  front and back office functions
• CRM, POS, other payment services
• Stock control, invoicing, accounting
• Both growing strongly (y-on-y)

32
Objectives and outlook

• Build on current strong position in the SME
  market to sustain organic growth
• Maintain strong competitive positions in all
  markets
• Improve margins and growth at Sage Healthcare
  Division
• Integration of other 2006 acquisitions
• Expand merchant services business
• Initial implementation of MySQL
• Continue to pursue acquisition opportunities in
  the SME market

33
Supplementary information
34
Organic revenue growth
35
Operating profit by region
36
Revenue mix by region
Premium versions of small business accounts
products reclassed as mid-market
37
Support contracts
thousands
38
UK
Excluding ACT!
39
Mainland Europe
Excluding ACT!
40
North America
Excluding ACT! Excluding gain on sale of
2.7m
41
Rest of World
Excluding ACT!