Comments on Q1 2017 business activity
In the first quarter of 2017, Sopra Steria continued to benefit from its clients’ growing investments in digital as well as its well-positioned offerings.
Sopra Steria posted revenue growth of 4.4% for the first quarter of 2017. Changes in scope had a positive impact of €19.4 million, while currency fluctuations had an adverse impact of €22.8 million essentially due to the 10.4% drop in the pound-to-euro exchange rate relative to the same period a year earlier. At constant scope and exchange rates, revenue growth was 4.8%. The calendar effect (number of working days) was positive in most European countries.
In France, first quarter 2017 revenue was €410.4 million, representing organic growth of 5.0%.
- Consulting & Systems Integration (€360.2 million in revenue), which was affected by a high comparison basis for part of its revenue but also by a positive calendar effect (2 additional days), maintained a good level of organic growth at 5.8%, which was once again buoyed by growth of more than 10% in Consulting. The quarter’s best-performing vertical markets were transport, aeronautics, defence and the public sector.
- I2S (Infrastructure & Security Services) generated revenue of €50.2 million, representing slightly negative organic growth of 0.2%. Revenue saw negative growth of 1.4% in IT infrastructure management (90% of the entity’s revenue), which continued to strategically refocus on higher-added-value services, and strong growth in cybersecurity activities.
In the United Kingdom, first-quarter revenue (€205.2 million) equated to negative organic growth of 3.6%. The currency effect was negative for €24 million. Overall, the entity posted negative revenue growth of 13.5%. As previously announced, the transition phase that the SSCL joint venture will go through this year will lead to a decrease in revenue for financial year 2017 (see the press release on 2016 full-year results). Excluding SSCL and at constant scope and exchange rates, revenue should be stable with respect to 2016.
The Other Europe reporting unit posted robust positive organic revenue growth (15.9%), with revenue coming to €200.9 million. All the countries in this reporting unit recorded strong growth in their businesses, some of which were amplified by positive calendar effects. Particularly noteworthy was the clear upturn in growth in Germany, underpinned by renewed sales momentum and major deals won over the past several months.
Sopra Banking Software posted €85.9 million in revenue, representing total growth of 25%. At constant scope and exchange rates, first-quarter growth was 2.8%. Cassiopae’s specialist loans offering saw strong growth. Key milestones were reached during the quarter: the development of the Sopra Banking Platform for La Banque Postale in line with the product roadmap, the successful go-live decision of Sopra Banking Platform for the Crelan bank in Belgium, and the launch of the new version of Sopra Banking Amplitude (“Amplitude Up”).
Other Solutions generated revenue of €51.3 million, equating to organic growth of 4.1%. In Human Resources solutions and Property Management solutions alike, offerings show good development prospects and continued to be enhanced, particularly in the digital sphere.
At 31 March 2017, the Group’s total workforce consisted of 40,542 people (39,813 at 31 December 2016), with 17.8% working in X-Shore zones.
As a reminder, the Group’s targets for the 2017 financial year are as follows:
- Organic revenue growth of between 2% and 3%
- An operating margin on business activity of around 8.5%
- Free cash flow in excess of €150 million
The increase in operating margin should be more pronounced in the second half of the year than in the first half, due in particular to the distribution of licence sales throughout the year.
Tuesday, 13 June 2017: Annual General Meeting of Shareholders – 2:30 p.m. / Pavillon Dauphine, Paris (France).