Irvine-based Sage Software Inc. starts the second phase of a turnaround this week with a new chief executive.
Pascal Houillon takes over as chief executive of the business software maker, after running Sage’s Southern Europe division from France.
He now is in charge of the biggest piece of the company, part of Britain’s Sage Group PLC. The North American unit in Irvine has nearly $1 billion in yearly sales, or about 40% of its parent’s $2.2 billion in annual revenue.
While Houillon starts this week, he isn’t taking on full day-to-day responsibility just yet.
Outgoing Chief Executive Sue Swenson, who announced her retirement in December, is set to stay on for the transition.
Swenson, 62, said her departure is part of a broader restructuring that she endorsed.
“I know people think retirement is a euphemism for moving somebody along, but it really was my idea,” she said. “I think it’s a new era of bringing some stability to the organization.”
Swenson has been one of the county’s most high-profile female executives and the only one to head a major company here in recent years.
Larger Restructuring
The local shift follows changes at Sage’s British parent.
Last year, Chief Executive Paul Walker stepped down after 16 years in the top post and 26 years with the company.
Guy Berruyer, head of Sage’s Europe and Asia operations, succeeded Walker as head of Sage Group in October.
The company now is going through a reshuffling in a bid to promote from its own ranks, according to Swenson.
“Sage is really committed to developing its global talent,” she said. “We hadn’t done much of that previously.”
Other recent changes:
n Paul Stobart, a director and head of Sage’s British and Irish operations, became chief executive of Sage Northern Europe, which includes Britain, Ireland, Germany, Poland and Switzerland.
n Álvaro Ramírez, head of Sage’s Spain operations, replaced Houillon as head of Sage Southern Europe, which includes France, Spain, Portugal and Belgium. Ramirez also got a board seat.
n Ivan Epstein, head of Africa and Australia, added oversight of the Middle East and Asia.
n David Clayton, a director and head of strategy and acquisitions, tacked on corporate development to his role.
n Paul Harrison, a director and head of finance, now is handling acquisitions.
Sage’s software helps smaller companies streamline accounting, purchasing, payroll and other day-to-day operations.
Most of the company’s software is sold through resellers that install the software and provide service. Laguna Hills-based Blytheco LLC is the top reseller of Sage’s software.
Sage is the second-biggest software company in the county by sales, after No. 1 Blizzard Entertainment Inc., the Irvine-based maker of online video games.
Blizzard has yearly sales of $1.3 billion.
Sage was hit hard during the downturn as many of its small-business customers opted to hold on to their cash and defer purchases.
In December, Sage relocated its local operations to smaller space within the Irvine Spectrum after cutting hundreds of jobs in the past few years.
“Thoughtful Transition”
Swenson, who came on board in 2008, cut jobs across Sage’s disparate business units after nearly a dozen acquisitions in recent years.
She also hired a handful of executives in Irvine.
Swenson joined the company after Ron Verni, who led the North American unit from Atlanta, was ousted by Sage’s British board along with former chief financial officer Jim Eckstaedt.
The changes this time around are calculated moves, according to Swenson.
“It’s probably the first time we have had a really thoughtful transition plan. That means we are growing up,” she said.
Houillon, who’s worked for Sage for more two decades, is charged with growing the company after two years of flat sales.
Swenson leaves him a steady base. Profit margins rose a couple of percentage points in 2010, and the North American operations saw sales rise on a quarter-to-quarter basis during 2010.
The operation reported sales of $858 million for the 12 months through September, down 3% from a year earlier.
Earnings came to $190 million before interest, taxes, depreciation and amortization.
Parent Sage Group reported sales of about $2.2 billion and $571 million in earnings for the same period.
“We are on an upward trajectory for revenue and our profitability is now quite competitive,” Swenson said.
Not much is known about Houillon, who has an American wife and a young daughter.
He’s made unofficial visits to Sage’s local offices in recent weeks. He’s bought a house in Orange County and enrolled his daughter in school here.
Houillon joined Sage in 1989 in sales and held a number of management positions.
He has been head of Sage France since 1997. In 2005, he tacked on responsibility for Belgium, Brazil, Switzerland and Morocco.
Once Houillon makes the transition, Sage is likely to eye more acquisitions, Swenson said.
“M&A activity is back on the agenda,” she said. “We will look for opportunities to add to the portfolio, whether it’s expanding current businesses, adding a technology or something from a geographic perspective.”
Swenson, who lives in North San Diego County, said she’s looking forward to semi-retirement, with plans to go back to school, pick up some more board seats and spend time with friends and family.
“I do want to go back to school and take those things that I never had time to do,” she said. “I have been in contact with people about some additional board assignments.”
She currently serves on the board of Wells Fargo & Co.
