- Total growth of 10.1% and organic growth1 of
9.1%
- Process of integrating CS Group and Tobania
launched
- Request for review and approval of offer memorandum for
intended public offer for Ordina to be filed with the Dutch
Authority for the Financial Markets (AFM) no later than in the 2nd
half of May 2023
Regulatory News:
Sopra Steria (Paris:SOP) generated revenue of
€1,395.4 million in the first quarter of 2023, representing growth
of 10.1%. At constant scope and exchange rates, revenue grew
9.1%.
Sopra Steria: Consolidated revenue – Q1 2023 €m / %
Q1 2023 Q1 2022 Organicgrowth
Totalgrowth Revenue
1,395.4
1,267.7
9.1%
10.1%
Cyril Malargé, Chief Executive Officer of Sopra Steria Group,
commented:
“We had a good first quarter, during which, in line with our
expectations at the start of the year, we saw a brisker pace of
growth than our full-year growth forecast. In a market driven by
digital transformation, our momentum stayed strong in terms of both
sales volumes and prices. Our business lines serving defence and
homeland security, aeronautics and the public sector give us quite
a good level of visibility for the next several quarters. We
continued to focus on our strategy of moving up the value chain and
transforming our range of solutions. Reflecting this strategy, our
consulting business posted organic growth of around 15% in the
first quarter. Regarding acquisitions, we launched the process of
integrating CS Group and Tobania and began implementing the
associated organisational arrangements. The planned tie-up with
Ordina is proceeding according to schedule and we will file a
request for review and approval of the offer memorandum with the
Dutch Authority for the Financial Markets no later than in the
second half of May 2023.”
Comments on Q1 2023 business activity
Revenue came to €1,395.4 million, equating to total growth of
10.1% relative to Q1 2022. Changes in scope had a positive impact
of €34.1 million, and currency fluctuations had a negative impact
of €23.0 million. At constant scope and exchange rates, revenue
grew 9.1%.
The France reporting unit (42% of the Group total)
generated revenue of €589.9 million, representing organic growth of
9.6%. This performance was driven by the defence and homeland
security, transport, aeronautics and public sector business
segments, which posted double-digit growth. CS Group contributed
€29.6 million to the reporting unit’s first-quarter revenue.
Organisational changes have been implemented and the collaboration
process launched to achieve the anticipated commercial and cost
synergies.
The United Kingdom reporting unit (16% of the Group
total) posted revenue of €216.7 million, representing organic
growth of 4.3%. The aeronautics, defence and security segments saw
double-digit growth. Private-sector business grew by around 6%, and
the two joint ventures specialising in business process services
for the public sector (NHS SBS and SSCL) delivered average growth
of over 3%. The rest of the public sector was stable.
With €410.4 million in revenue, the Other Europe
reporting unit (29% of the Group total) turned in a solid 13.1% in
organic growth. The fastest growth was seen in Scandinavia, Benelux
and Spain, and to a lesser extent in Germany and Italy. Tobania
contributed €8.6 million to the reporting unit’s revenue. With
respect to Sopra Financial Technology (SFT), which posted €37.9
million in revenue, an agreement was reached with the seven Sparda
banks to wrap up the transformation programme and thereby reduce
the operational risks associated with the project. The Sparda
banks’ current system will continue to be operated by SFT until the
end of 2025.
Revenue for Sopra Banking Software (8% of Group revenue)
came to €107.7 million, representing organic growth of 5.2%.
This return to growth mainly resulted from the 12.2% increase in
subscriptions for digital solutions. Licence sales were stable.
Overall, software revenue (60% of total revenue) was up 2.8% and
services revenue was up 6.1%.
The Other Solutions reporting unit (5% of the Group
total) posted €70.6 million in revenue, representing organic growth
of 5.0%. Human resources solutions posted growth of 3.4%, while
property management solutions grew by 8.5%.
External growth transactions and changes in scope
Following the acquisition of controlling interests in CS
Group on 28 February 2023 (see the press release dated 28 July
2022 related to this transaction), this company has been
consolidated since 1 March 2023. A simplified public tender offer
was launched on 6 April and will end on 28 April 2023, at the unit
price of €11.50 per ordinary share. If the threshold enabling the
completion of a mandatory delisting is reached at the end of the
offer period, Sopra Steria will request the implementation of a
mandatory delisting procedure for CS Group securities from Euronext
Paris.
The acquisition of Tobania was finalised on 2 March 2023
(see the press release dated 17 November 2022 related to this
transaction). The company has been consolidated since 1 March
2023.
On 21 March 2023, Sopra Steria and Ordina announced that
they had reached conditional agreement on a recommended public
offer to be made by Sopra Steria for all the issued and outstanding
ordinary shares in the capital of Ordina (see the press release
dated 21 March 2023). As part of this transaction, supported by
Ordina’s management board and supervisory board, a request for
review and approval of the offer memorandum will be filed with the
Dutch Authority for the Financial Markets no later than in the
second half of May 2023. The offer is supported by Ordina’s two
largest shareholders, as well as the individual members of each of
the Ordina boards, together representing approximately 27% of
Ordina’s issued and outstanding ordinary shares. The offer is
subject to customary conditions and is anticipated to close in the
second half of 2023.
For further information, please refer to the joint press
releases by Sopra Steria and Ordina of 21 March 2023 and 17 April
2023.
Workforce
At end-March 2023, the Group’s net headcount stood at
53,724 people, compared with 48,114 people at 31 March 2022 and
49,690 people at 31 December 2022. Acquisitions in the first
quarter of 2023 contributed 3,372 people to the Group’s
headcount.
The workforce attrition rate was 16% (versus 17% on
average in 2022).
Targets for 2023
Sopra Steria confirms all its targets for financial year
2023:
- Organic revenue growth of between 3% and 5%
- Operating margin on business activity slightly over 9%
- Free cash flow of at least €300 million
Q1 2023 revenue presentation meeting
Revenue for the first quarter of 2023 will be presented to
financial analysts and investors via a bilingual (French and
English) conference call to be held on 28 April 2023 at 8:30 a.m.
CET:
- French-language phone number: +33 (0)1 70 37 71 66
- English-language phone number: +44 (0)33 0551 0200
Practical information about this conference call can be found in
the ‘Investors’ section of the Group’s website:
https://www.soprasteria.com/investors
Upcoming financial publications
Wednesday, 24 May 2023 at 2:30 p.m.: General Meeting of
Shareholders Thursday, 27 July 2023 (before market open):
Publication of H1 2023 results Friday, 27 October 2023 (before
market open): Publication of Q3 2023 revenue
Glossary
- Restated revenue: Revenue
for the prior year, expressed on the basis of the scope and
exchange rates for the current year.
- Organic revenue growth:
Increase in revenue between the period under review and restated
revenue for the same period in the prior financial year.
- EBITDA: This measure, as
defined in the Universal Registration Document, is equal to
consolidated operating profit on business activity after adding
back depreciation, amortisation and provisions included in
operating profit on business activity.
- Free cash flow: Net cash
from operating activities; less investments (net of disposals) in
property, plant and equipment, and intangible assets; less lease
payments; less net interest paid; and less additional contributions
to address any deficits in defined-benefit pension plans.
- Operating profit on business
activity: This measure, as defined in the Universal
Registration Document, is equal to profit from recurring operations
adjusted to exclude the share-based payment expense for stock
options and free shares and charges to amortisation of allocated
intangible assets.
- Profit from recurring
operations: Operating profit before other operating
income and expenses, which includes any particularly significant
items of operating income and expense that are unusual, abnormal,
infrequent or not foreseeable, presented separately in order to
give a clearer picture of performance based on ordinary
activities.
- Basic recurring earnings per
share: This measure is equal to basic earnings per share
before other operating income and expenses net of tax.
- Return on capital employed
(RoCE): (Profit from recurring operations after tax +
Profit from equity-accounted companies) / (Equity + Net financial
debt)
- Downtime: Number of days
between two contracts (excluding training, sick leave, other leave
and pre-sales) divided by the total number of business days.
Disclaimer
This document contains forward-looking information subject to
certain risks and uncertainties that may affect the Group’s future
growth and financial results. Readers are reminded that licence
agreements, which often represent investments for clients, are
signed in greater numbers in the second half of the year, with
varying impacts on end-of-year performance. Actual outcomes and
results may differ from those described in this document due to
operational risks and uncertainties. More detailed information on
the potential risks that may affect the Group’s financial results
can be found in the 2022 Universal Registration Document filed with
the Autorité des Marchés Financiers (AMF) on 17 March 2023 (see
pages 40 to 45 in particular). Sopra Steria does not undertake any
obligation to update the forward-looking information contained in
this document beyond what is required by current laws and
regulations. The distribution of this document in certain countries
may be subject to the laws and regulations in force. Persons
physically present in countries where this document is released,
published or distributed should enquire as to any applicable
restrictions and should comply with those restrictions.
About Sopra Steria
Sopra Steria, a European tech leader renowned for its
consulting, digital services and software development, helps its
clients drive their digital transformation and obtain tangible and
sustainable benefits. It provides end-to-end solutions to make
large companies and organisations more competitive by combining
in-depth knowledge of a wide range of business sectors and
innovative technologies with a fully collaborative approach. Sopra
Steria places people at the heart of everything it does and is
committed to putting digital to work for its clients in order to
build a positive future for all. With 50,000 employees in nearly 30
countries, the Group generated revenue of €5.1 billion in 2022.
The world is how we shape it. Sopra Steria (SOP) is listed
on Euronext Paris (Compartment A) – ISIN: FR0000050809 For more
information, visit us at www.soprasteria.com
Annexes
Sopra Steria: Impact on revenue of changes in scope and exchange
rates – Q1 2023 €m
Q1 2023
Q1 2022
Growth
Revenue
1,395.4
1,267.7
+10.1%
Changes in exchange rates
-23.0
Revenue at constant exchange rates
1,395.4
1,244.7
+12.1%
Changes in scope
34.1
Revenue at constant scope and exchange rates
1,395.4
1,278.8
+9.1%
Sopra Steria: Changes in exchange rates – Q1 2023 For €1
/ % Average rate Average rate Change Q1
2023 Q1 2022 Pound sterling
0.8831
0.8364
-5.3%
Norwegian krone
10.9901
9.9247
-9.7%
Swedish krona
11.2030
10.4807
-6.4%
Danish krone
7.4429
7.4407
-0.0%
Swiss franc
0.9925
1.0364
+4.4%
Sopra Steria: Revenue by reporting unit – Q1 2023 €m /
%
Q1 2023
Q1 2022
Q1 2022
Organic
Total
Restated*
growth
growth
France
589.9
538.4
513.2
+9.6%
+14.9%
United Kingdom
216.7
207.7
219.0
+4.3%
-1.0%
Other Europe
410.4
363.0
365.0
+13.1%
+12.5%
Sopra Banking Software
107.7
102.4
103.2
+5.2%
+4.3%
Other Solutions
70.6
67.3
67.3
+5.0%
+5.0%
Sopra Steria Group
1,395.4
1,278.8
1,267.7
+9.1%
+10.1%
* Revenue at 2023 scope and exchange rates
Sopra Steria:
Workforce breakdown – 31/03/2023 31/03/2023
31/03/2022 France
22,102
20,067
United Kingdom
7,684
7,045
Other Europe
13,880
11,726
Rest of the World
580
470
X-Shore
9,478
8,806
Total
53,724
48,114
_______________________________ 1 Alternative performance
measures are defined in the glossary at the end of this
document.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230427005727/en/
Investor Relations Olivier Psaume
olivier.psaume@soprasteria.com +33 (0)1 40 67 68 16
Press Relations Caroline Simon (Image 7)
caroline.simon@image7.fr +33 (0)1 53 70 74 65
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