[Draft]

The Sage Group plc

Acquisition of Intacct Corporation

Stephen Kelly, CEO

Steve Hare, CFO

[x] July 2017

The Sage Group Plc

Acquisition of Intacct CorporationStephen Kelly, CEO

Steve Hare, CFO

25th July 2017

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Disclaimer

This document has been prepared by The Sage Group plc (Sage). It is a presentation of general background information about Sage’s activities

current at the date of the presentation. It is information in a summary form and does not purport to be complete. It is to be read in conjunction with

Sage’s other announcements released to investors and available at http://www.sage.com/company/investors/investor-downloads. It is not

intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial

situation or needs of any particular investor. These should be considered, with professional advice, when deciding if an investment is appropriate.

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securities in Sage.

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Context of the Acquisition

Strategic acquisition of Intacct positions Sage for accelerated cloud momentum

• Significant progress made in reducing overhead cost and reinvesting to

drive increased quality of revenue, whilst maintaining growth of 6% and

margins of 27%

• No M&A in early transformation (FY15 & FY16) whilst the business

realigned as a leaner, more global organisation

• Sage has conducted bolt-on M&A throughout FY17 (Fairsail, Compass,

North American Payments disposal), strengthening the golden triangle and

optimising the organisation for accelerating momentum

Sources of growth

• We now have the leadership, organisational alignment, brand and ability to

innovate in place to target more ambitious growth

• We are targeting new customer acquisition through cloud-first solutions

particularly in North America

• Supporting organic growth with selective bolt-on acquisitions of leading

technology solutions gives more choice to customers

• Intacct significantly enhances the Sage Business Cloud, providing the first and

last cloud Financial Management Solution a customer will ever need

• This strategy further strengthens our investment case of:

o High quality recurring revenue

o Superior operating margins

690K 1,240k

FY15 H1 17

Software subscriptions

84% 86%

FY 15 H1 17

Contract Renewal Rates

FY 15 H1 17

G&A ratio

19% 15%

Further AccelerationTransformation

M&A

C4L C4L

NCA

o Strong free cash flow

o Progressive dividendProgress of transformation

3

NCA

M&A

Transformation Why the acquisition of Intacct makes sense now

Net $

Renewal(4)

>107%

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Intacct Highlights

• Founded in 1999 and headquartered in San Jose, California

• Largest independent cloud Financial Management Solutions

provider worldwide, with demonstrated track record of strong

growth

• ‘Born in the cloud’ product and culture – a Gartner Visionary for

Core Cloud Financial Management Suites(1)

• Sophisticated and powerful cloud Financial Management Solution

targeted at growing businesses looking for process automation,

rich financial and operational insight, seamless integration with

their existing application ecosystem, cutting-edge features and user

experience

• Thousands of customers from scale-up to enterprise(5), award-

winning customer satisfaction

• Multi-channel go-to-market – direct, resellers, ISVs (independent

software vendors) and accountants

• Experienced senior management team to continue in roles

• The AICPA(6) and its subsidiary, CPA.com, named Intacct as a

preferred provider of financial applications

Company Overview Financial Snapshot

Strong Industry Partners & Awards

Key strategic

partners

Award Winning

25 Best Small Biz Apps

Customer Satisfaction

(1) Magic Quadrant for Cloud Core Financial Management Suites for Midsize, Large and Global Enterprises, Gartner 19 June 2017.

(2) Last twelve months (“LTM”) to June 2017, unaudited. See page 6 for detailed definition.

(3) See page 6 for definition.

(4) See page 6 for definition.

(5) Scale-up is defined as businesses of 10-200 employees, enterprise is defined as businesses of 200-2,000+ employees.

(6) American Institute of Certified Public Accountants.

Revenue(2)

$88mSubscription

>90%

3-Year

Revenue

CAGR(2)

33%+

ARR(3)

$96m

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Transaction Summary

• Consideration to be funded from cash on hand, existing revolving credit facility and a new $390m term loan

• Pro forma Net Debt / EBITDA will remain within the 1 – 2x corridor

• Expected to close within weeks - HSR approval obtained on 17 July 2017

• Acquisition of Intacct Corporation, largest independent cloud Financial Management Solutions provider, with

demonstrated track record of strong growth

• Transaction value of $850m (£654m(1)), to be paid in cash and rolled-over Sage options(2)

• Integration focused on maintaining and accelerating growth momentum, minimising go-to-market disruption

and bringing Intacct within the Sage Business Cloud

• Existing management team will run Intacct, ensuring continuity to customers, partners and employees

Transaction Outline

Financing & Timing

Seamless

Integration

(1) Exchange rate of £1.00 / $1.30.

(2) Approximately $43m of the transaction value (this being a fixed amount based on the difference between value per underlying share of Intacct common stock, the number of unvested options and the aggregate exercise prices of the rolled-

over options) due to unvested options to purchase shares of Intacct common stock held by management and employees, will be rolled over into options to purchase Sage shares at a fixed exchange ratio based on Sage’s share price in the

period prior to completion. Vesting will be conditioned on continued employment. Key members of the Intacct executive management are rolling a minimum of 25% of their proceeds into new Sage options, vesting in 12 months assuming

continued employment - in addition to other retention incentives being provided.

(3) Excluding any purchase price accounting adjustments, in particular fair value adjustments to deferred revenue upon acquisition.

• Management reconfirms current guidance of at least 6% organic revenue growth including contribution from

North American payments through to completion of disposal and underlying operating margin of at least 27%

• We expect Sage People (Fairsail), Intacct (to be known as Sage Intacct after completion) and Compass to

add approximately £20m of revenue in this financial year (3)

Guidance

• Demonstrates Sage’s commitment to accelerating its cloud-first strategy and winning in the US

• Strengthens Sage’s position as a leading cloud provider from start-up to global enterprise

• Intacct will be a platform for growth, funded from Sage’s ongoing cost saving initiatives

Compelling

Strategic Rationale

Strong Growth Profile

$39

$96

Jun-14 Jun-17

$37

$88

LTM June 2014 LTM June 2017

ARR ($m)(3) Revenue ($m)(1)

Highlights

• With revenues of $88m(1), Intacct has been consistently delivering revenue growth in excess of 30%

• Intacct’s solutions are only sold on subscription, with over 90% of revenues subscription-based

• Intacct sells through both direct & reseller channels as well as through accountants (as part of its AICPA partnership) and

ISVs integrating Intacct’s solution into their business management solution

• Attractive unit economics, over 107% dollar net renewal rate(2) driven by strong customer focus and product innovation

Revenue Split(1)

SSRS8%

Indirect33%

Direct59%

Recurring92%

(1) Unaudited, last twelve months to June 2017. Normalised for impact of one-off deferred revenue release resulting from renewal of a significant ISV relationship. Including this deferred revenue release revenues for LTM June 2017 are

$93m. LTM June 2014 revenues were similarly normalised upwards by $1.2m. Excluding these normalisations, 3-year revenue CAGR would be 37%.

(2) % of contracted monthly subscription revenue renewed at the renewal date plus the monthly subscription revenue added in that period from add-ons by existing customers. Average quarterly rate for FY16 and YTD FY17.

(3) Annualised recurring revenues, the total recurring revenue under contract from all current customers and ISVs over a one year period.6

Compelling Strategic Rationale

• Strengthens Sage’s positioning as the first and last cloud Financial Management Solution a customer

will ever need - from start-up to global enterprise

• Ensures Sage’s business partners and value added resellers can capture the cloud growth

opportunity with Sage

• Enhances Sage’s ability to benefit from the accelerating move to the cloud within the growing $9bn

North American market segment, where over half of our total addressable market is located, for

Financial Management Solutions used by scale-up and enterprise businesses(1)

• Shifting demand towards best of breed solutions with strong integration capabilities and away from

traditional monolithic ERP suites benefits Intacct as well as other Sage solutions like Sage Live

• Market remains very fragmented with a high number of ‘legacy’ on premise vendors

Favourable Market

Dynamics

Enhances the Sage

Business Cloud

Simple and powerful

accounting and

invoicing for start-ups,

small businesses, and

sole traders

Flexible and scalable

financial management

for growing businesses

Comprehensive and

highly configurable

financial management

for finance

professionals

Adaptable and

integrated business

management solution

for larger enterprises

$150-300

Typical ACV(2)

$3-7k

Typical ACV(2)

$20-30k

Typical ACV(2)

$50k+

Typical ACV(2)

(1) Source: Sage IDC model, market for accounting and business management solutions for businesses with 10-2000 FTE as of 2017.

(2) Typical annualised value of subscription for a direct customer – actual ACV will range depending on user numbers, modules adopted, etc. 7

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Compelling Strategic Rationale (Cont’d)

• Intacct is primarily sold in North America, and deployed across many international subsidiaries

• Sage has extensive expertise in localising products and the commercial capability to bring those

products to market, both directly and through its partner network

• Intention to launch Intacct into Sage’s other markets in the medium term, starting with English-

speaking geographies

• Potential cross-sell opportunities with Sage People given overlap in target customer size, geography,

verticals and cloud readiness; strengthening our commitment to the golden triangle

• Enhancing our Customer For Life strategy by providing our existing customers who are looking to migrate

to the cloud a comprehensive migration path within Sage.

• Fastest growing independent cloud Financial Management Solution in North America

• Intacct team brings significant expertise in building and scaling a cloud business

• Opportunity for Sage in North America as a leading provider of cloud Financial Management

Solutions from start-up to global enterprise

Platform for Market

Leadership

Potential for Global

Expansion

Cross-sell & Other

Considerations

Delivering Results for Customers

“Intacct has supported us as

we’ve expanded to over 20

countries internationally, and

worked seamlessly with all our

world-class cloud-based

applications. As a result, we can

focus on being true strategic

partners to our global product

leaders”

Customer A CFO

“Intacct is the perfect partner to

scale with us along the way. The

software delivers major productivity

improvements for our team, but

more importantly, it gives us access

to trusted financial data on a real-

time basis, which is a major benefit

across our organization”

“Because of the efficiency and visibility I

have in Intacct, I’ve been able to provide

more strategic value to the company

vs. spending most of my time on our day-

to-day accounting complexities. Now, I

can focus on business planning with our

CEO and board members, and work

more with our sales team on major deals”

Delivering 250%

ROI &

6 month payback

Empowering the

Finance

Professional

From Scale-up to

Global Enterprise

Note: Customer testimonial comments from Intacct website: https://us.intacct.com/financial-software-customers 9

Customer B CFO Customer C CFO

Intacct Strengthens Sage’s Strategic Pillars

• Demonstrated ability of winning customers at scale in the US

• Strong team with a solid track record of beating the competition who will continue to

lead the business

• Position Sage as a leading provider of cloud Financial Management Solutions from

start-up to global enterprise

• Committed to successful integration into Sage

• Proven value-creating business model, attractive area for re-investment of Sage

cost savings

• Both organisations are dedicated to customer success and innovation

• Enhances Sage’s ability to offer existing customers a path to the cloud

• Enhances the Sage Business Cloud

• Strong technology base and demonstrated innovation track record

Customers

for Life

One Sage

Capacity

for Growth

Winning in

the Market

Revolutionise

Business

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✓

✓

✓

✓

✓

© 2017 The Sage Group plc or its licensors. Sage, Sage logos, Sage product and service names mentioned herein are the trademarks of The Sage Group plc or its

licensors. All other trademarks are the property of their respective owners.

Q&A

© 2017 The Sage Group plc or its licensors. Sage, Sage logos, Sage product and service names mentioned herein are the trademarks of The Sage Group plc or its

licensors. All other trademarks are the property of their respective owners.

Appendix

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Powerful Cloud Financial Management Solution

• ‘Born in the cloud’ Financial

Management Solution targeted

at CFOs and financial

professionals looking for a

sophisticated and powerful

solution

• Best-of-breed cloud Financial

Management Solution:

o Automation for efficient

financial operations

o Easy integration to other

solutions

o Visibility for real-time

decision making

• Fresh & modern ‘Action’ user

interface, multi-dimensional

accounting, mobile and natively

social

All-In-One

cloud Financial

Management

Solution

Accounting

Franchise

Financial

Services

Healthcare

Hospitality

Nonprofit

Services

Software & SaaS

Wholesale

Contract Subscription

Billing

Contract Revenue

Management

Fixed Assets

Inventory

Management

Multi-Entity and Global

Consolidations

Project

Accounting

Sales and

Use Tax

Time and Expense

Management

Vendor Payment

Services

General

Ledger

Accounts

Payable

Accounts

Receivable

Cash

Management

Collaborate

Order

Management

Purchasing

Reports and

Dashboard

Core FinancialsAdditional Modules

Industry Specific Solutions

Partnering for Success

• Over 200 marketplace partners

whose solutions integrate

seamlessly with Intacct’s cloud

Financial Management Solution

• 75% of customers integrate with

2+ partners

• API-first(1) strategy, focused on

enabling seamless integration

• Over 50% of transactions are

posted through integrations with

third party solutions

(1) API = application programming interface, a set of clearly defined methods of communication between software components or solutions. 14

Strong Track Record of Innovation

• Pure cloud, multi-tenant solution

• Configuration only – no customisation,

single code base

• Support for major browsers, operating

systems and any device

• Flexible API architecture with 12 years

backward compatibility

• Highly scalable, able to serve large

Enterprise customers

• Continuous feature releases

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