Pascal Houillon’s aggressive moves to turn around slumping sales at Irvine-based Sage North America appear to be paying off.
The company makes software that streamlines accounting, purchasing, payroll processing and other day-to-day tasks. Rivals include Intuit Inc. in Mountain View and big players such as Microsoft Corp., Oracle Corp. and SAP AG, which go after large and small businesses.
Houillon has initiated a series of tactical moves and a spate of executive changes since taking over as chief executive in North America nine months ago. Among his product-line moves: emphasizing newer products with growth potential such as payment-management and marketing software.
Payment-management software is used in credit- and debit-card processing, and for electronic checking, automated and mobile processing. Sage’s payment-management revenue jumped 14% on a year-over-year basis through Sept. 30, the end of its fiscal year.
And that helped Sage begin to shake two years of revenue stagnation.
“We had bad years,” Houillon acknowledged.
Sage, the North American unit of Britain’s Sage Group PLC, saw overall sales in the U.S., Canada, Mexico and the Caribbean climb 3% to more than $629 million for the 12 months through September.
Adjusted profit rose 11%, to more than $160 million.
Sage was hit hard during the global economic downturn, as many customers held off purchases. To reverse fortunes, Houillon also increased cross-selling of accounting and enterprise-management software.
“We released significant versions of our products in 2011 that allowed us to really boost our revenue,” Houillon said.
Growth Markets
Sage still has strides to make in the enterprise resource planning market, where it holds about 8% of market share, according to the latest data from Massachusetts-based IDC Corp. ERP software integrates every facet of an operation, including development, manufacturing, sales and marketing.
Sage also has boosted efforts to pick up business with existing clients that use customer-relationship management software. Services offered to clients include direct mailings, email campaigns, tracking new potential customers through a database and furthering communication ties, such as handling email complaints.
“It’s great for the future,” Houillon said. “We based a big part of our strategy on providing more features as a service to our customers.”
More than 6 million businesses use Sage products worldwide. More than 2 million use its products in North America, a 4% jump during its most recent fiscal year.
Irvine-based Blizzard Entertainment Inc.—the top online video game maker—surpassed Sage as Orange County’s biggest software company in sales a few years ago.
Sage’s North American operations primarily target small companies with 25 or fewer employees but also deal with larger companies, including some with 500 or more workers. About 70% of its revenue comes from subscriptions for administrative systems to manage payroll and track expenses.
Resellers Network
Its products generally are sold through a network of resellers, who install the software and provide service to businesses.
Initially Houillon set out to build the brand, shore up the executive team and refocus efforts on its core market of small and midsize businesses. The company, under his leadership, began rebranding its products to make the Sage name more prominent on products, packaging and collateral material.
By the end of this year, all the company’s products will have the Sage name, Houillon said.
Sage’s parent sold its U.S. healthcare unit in November to private equity firm Vista Equity Partners for $320 million. Sage took a $92 million loss on the deal, which was part of renewed efforts to focus on its core business, according to Sage Group chief executive Guy Berruyer.
