Sopra Steria Group: Achieves Further Substantial Increase in Operating Performance in Financial Year 2023
-
Revenue came to €5.805 billion, up 13.8%. Organic growth1 was 6.6% (target revised in
July 2023 to “at least 6%”). - Operating margin on business activity came in at 9.4%, up 0.5 points from 2022 (target: “slightly over 9%”).
- Free cash flow was very strong at €390.2 million, equating to 6.7% of revenue, significantly exceeding the initial target (“at least €300 million”).
-
Net profit attributable to the Group came to €183.7 million (€247.8 million in 2022). It included an €89 million non-recurring impairment charge on
Sopra Banking Software , with no impact on cash or on the dividend proposed in respect of financial year 2023. - Proposed dividend in respect of financial year 2023: €4.65 per share (€4.30 for 2022).
At its meeting on
|
2023 |
2022 |
|||||||||||
Amount |
Margin |
Change |
|
Amount |
|
Margin |
|||||||
Key income statement items | |||||||||||||
Revenue |
€m |
5,805.3 |
13.8% |
5,101.2 |
|||||||||
Organic Growth |
% |
+6.6% |
|
|
|||||||||
|
|
|
|
||||||||||
Operating profit on business activity |
€m |
548.2 |
9.4% |
21.0% |
453.1 |
8.9% |
|||||||
Profit from recurring operations |
€m |
467.2 |
8.0% |
17.5% |
397.6 |
7.8% |
|||||||
Operating profit |
€m |
329.9 |
5.7% |
-8.7% |
361.3 |
7.1% |
|||||||
Net profit attributable to the Group |
€m |
183.7 |
3.2% |
-25.9% |
247.8 |
4.9% |
|||||||
|
|
|
|
||||||||||
Weighted average number of shares in issue |
m |
20.22 |
-0.2% |
20.26 |
|||||||||
excl. treasury shares |
|
|
|
|
|||||||||
Basic earnings per share |
€ |
9.08 |
-25.7% |
12.23 |
|||||||||
Recurring earnings per share |
€ |
15.51 |
13.6% |
13.66 |
|||||||||
|
|
||||||||||||
Key balance sheet items |
|
|
|
||||||||||
|
|
||||||||||||
Net financial debt |
€m |
946.0 |
522.5% |
152.0 |
|||||||||
Equity attributable to the Group |
€m |
1,876.7 |
1.4% |
1,850.3 |
|||||||||
*Alternative performance measures are defined in the glossary at the end of this document |
_________________________________
1 Alternative performance measures are defined at the end of this document.
2 Audit procedures have been carried out and the audit report is being issued.
Cyril Malargé, Chief Executive Officer of
“Thanks to the commitment of our 56,000 employees, who work hard every day to advance their clients’ digital transformation,
We made significant headway with a range of transformative initiatives: developing our Consulting business, shifting our technology solutions further up the value chain, gradually adjusting our operating model, reinforcing our human resources policy and boosting our operational efficiency. We plan to keep scaling up our efforts in these areas over the coming quarters.
In the first half of 2023, we launched rAIse: a large-scale programme to embrace generative AI, which will feed into our internal development tools, our partnership strategy and everything our business consulting teams do.
With the acquisition of
Lastly, I’m very proud to share that
Our priorities for 2024 are clear: successfully integrate the companies we have acquired, execute the recently announced plan to dispose of our banking software activities, speed up our internal transformation initiatives and boost our performance.”
Details on 2023 operating performance
Consolidated revenue totalled €5,805.3 million, an increase of 13.8%. Changes in scope had a positive impact of €420.6 million, and currency fluctuations had a negative impact of €74 million. At constant scope and exchange rates, revenue growth was 6.6%.
Operating profit on business activity came to €548.2 million, up 21.0% relative to 2022. The operating margin on business activity increased by 0.5 points to 9.4% (8.9% in 2022).
In
Revenue for the
The Other
__________________________________
3 Every year, around 21,000 companies and organisations around the world provide details on their environmental performance to CDP for independent assessment against its scoring methodology for the benefit of investors, purchasers and other stakeholders.
Revenue for
The Other Solutions reporting unit (5% of the Group total) posted revenue of €288.2 million, representing organic growth of 5.9%. The Human Resources Solutions business grew by 6.7%. Property Management Solutions posted a 4.1% increase in revenue. The operating margin on business activity grew 0.7 points to 13.7% (13.0% in 2022).
Comments on the components of net profit attributable to the Group in 2023
Profit from recurring operations came in at €467.2 million, equating to growth of 17.5%. It included a €43.0 million share‑based payment expense, the increase in which was mainly due to the increase in the
Operating profit came to €329.9 million (compared with €361.3 million in 2022), after a net expense of €137.4 million for other operating income and expenses (€36.3 million in 2022), which included an €89 million asset impairment charge on
Net interest expense was €35.9 million (versus €14.4 million in 2022), driven by the increase in financial debt relating to financing for acquisitions and higher interest rates.
The tax expense totalled €111.7 million, for an effective tax rate of 38.0%. Restated for non-recurring items, the normative tax rate for 2023 is estimated at 25%.
Net profit from associates amounted to profit of €6.7 million (compared with an expense of €14.7 million in 2022).
Minority interests totalled €5.4 million. As SSCL is now wholly owned, following the acquisition of the remaining 25% stake previously held by the
Net profit attributable to the Group came to €183.7 million (€247.8 million in 2022).
Restated for the impairment charge on
Basic earnings per share came to €9.08 (€12.23 in 2022).
Restated for asset impairment, basic earnings per share would have been €13.48.
Proposed dividend in respect of financial year 2023
At the next General Meeting of Shareholders4,
Financial position at
Free cash flow was very strong, at €390.2 million, in particular due to a 21.2% increase in EBITDA, strict management of the average payment period of trade receivables and early net inflows.
Net financial debt totalled €946.0 million. It included the impact of outflows related to the acquisitions of
_________________________________
4 General Meeting to be held on Tuesday,
Strategy
Sopra Steria’s business model is focused on independence and sustainable value creation for its stakeholders.
Sopra Banking Software’s software business – developed since 2012 based on Sopra’s legacy banking software assets and acquisitions – is not a core strategic priority for a European digital services company like
This decision reflects Sopra Steria’s aim to expand its development of digital services and solutions in
Over the course of financial year 2024, the Group will draw up a new strategic plan for 2025–2027, with details and financial targets to be announced at a Capital Market Day in early
Workforce
At
The workforce attritionrate was 14.0%, compared with 17.0% in 2022.
Social and environmental footprint
With regard to the environment, CDP confirmed in
In the social arena, progress was made on the Group’s gender equality policy in 2023, with a 0.4-point increase in the proportion of women in the workforce (33.5%), a higher proportion of women hired and promoted, and a 1.1 point increase in the proportion of women in the 10% most senior positions (21.5%).
With regard to human resources, the annual
___________________________________
5 Target approved by the Science Based Targets initiative (SBTi) on
Targets for 2024
- Organic revenue growth of between 2% and 4%, including a relatively stable Q1
- Operating margin on business activity of between 9.5% and 10.0%, including a dilutive effect of around 0.2 points related to recent acquisitions
- Free cash flow in excess of €350 million
Meeting to report 2023 full-year results
The 2023 full-year results will be presented to financial analysts and investors in a French/English webcast on Thursday,
- Register for the French-language webcast here
- Register for the English-language webcast here
Or by phone:
- French-language phone number: +33 (0)1 70 37 71 66
- English-language phone number: +44 (0)33 0551 0200
Practical information about the presentation and webcast can be found in the ‘Investors’ section of the Group’s website: https://www.soprasteria.com/investors
Upcoming financial releases
Friday,
Tuesday,
Wednesday,
Thursday,
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
About
The world is how we shape it.
For more information, visit us at www.soprasteria.com
Annexes
|
||||||
€m |
2023 |
2022 |
Growth |
|||
Revenue |
5,805.3 |
|
5,101.2 |
|
+13.8% |
|
Changes in exchange rates |
|
|
-74.0 |
|
|
|
Revenue at constant exchange rates |
5,805.3 |
|
5,027.2 |
|
+15.5% |
|
Change in scope |
|
|
420.6 |
|
|
|
Revenue at constant scope and exchange rates |
5,805.3 |
|
5,447.9 |
|
+6.6% |
|
||||||
For €1 / % |
Average rate 2023 |
Average rate 2022 |
Change | |||
Pound sterling |
0.8698 |
0.8528 |
-2.0% |
|||
Norwegian krone |
11.4248 |
10.1026 |
-11.6% |
|||
Swedish krona |
11.4788 |
10.6296 |
-7.4% |
|||
Danish krone |
7.4509 |
7.4396 |
-0.2% |
|||
Swiss franc |
0.9718 |
1.0047 |
+3.4% |
|
||||||||||
Q4 2023 |
Q4 2022
|
Q4 2022 |
Organic growth |
Total growth |
||||||
|
617.5 |
|
603.6 |
|
537.4 |
|
+2.3% |
|
+14.9% |
|
|
249.1 |
|
220.0 |
|
219.1 |
|
+13.2% |
|
+13.7% |
|
Other |
548.9 |
|
511.1 |
|
393.0 |
|
+7.4% |
|
+39.7% |
|
|
124.7 |
|
117.0 |
|
117.1 |
|
+6.7% |
|
+6.5% |
|
Other Solutions |
79.6 |
|
73.8 |
|
73.8 |
|
+7.8% |
|
+7.8% |
|
|
1,619.8 |
|
1,525.5 |
|
1,340.5 |
|
+6.2% |
|
+20.8% |
|
* Revenue at 2023 scope and exchange rates |
|
||||||||||
|
|
2023 |
2022
|
2022 |
Organic growth |
Total growth |
||||
|
2,384.3 |
|
2,271.7 |
|
2,039.0 |
|
+5.0% |
|
+16.9% |
|
|
940.9 |
|
873.3 |
|
890.6 |
|
+7.7% |
|
+5.6% |
|
Other |
1,746.9 |
|
1,606.1 |
|
1,473.0 |
|
+8.8% |
|
+18.6% |
|
|
445.1 |
|
424.6 |
|
426.5 |
|
+4.8% |
|
+4.3% |
|
Other Solutions |
288.2 |
|
272.2 |
|
272.1 |
|
+5.9% |
|
+5.9% |
|
|
5,805.3 |
|
5,447.9 |
|
5,101.2 |
|
+6.6% |
|
+13.8% |
|
* Revenue at 2023 scope and exchange rates |
|
||||||||
2023 |
2022 |
|||||||
€m | % | €m | % | |||||
|
||||||||
Revenue |
2,384.3 |
2,039.0 |
||||||
Op. profit on business activity |
229.5 |
9.6% |
204.4 |
10.0% |
||||
Profit from recurring operations |
196.8 |
8.3% |
187.0 |
9.2% |
||||
Operating profit |
189.4 |
7.9% |
167.9 |
8.2% |
||||
|
||||||||
Revenue |
940.9 |
890.6 |
||||||
Operating profit on business activity |
103.2 |
11.0% |
93.8 |
10.5% |
||||
Profit from recurring operations |
89.4 |
9.5% |
80.7 |
9.1% |
||||
Operating profit |
79.1 |
8.4% |
91.6 |
10.3% |
||||
Other |
||||||||
Revenue |
1,746.9 |
1,473.0 |
||||||
Operating profit on business activity |
152.2 |
8.7% |
91.9 |
6.2% |
||||
Profit from recurring operations |
140.0 |
8.0% |
85.6 |
5.8% |
||||
Operating profit |
118.1 |
6.8% |
72.3 |
4.9% |
||||
|
||||||||
Revenue |
445.1 |
426.5 |
||||||
Operating profit on business activity |
23.9 |
5.4% |
27.6 |
6.5% |
||||
Profit from recurring operations |
4.5 |
1.0% |
11.1 |
2.6% |
||||
Operating profit |
-92.9 |
-20.9% |
-1.1 |
-0.3% |
||||
Other Solutions | ||||||||
Revenue |
288.2 |
272.1 |
||||||
Operating profit on business activity |
39.4 |
13.7% |
35.4 |
13.0% |
||||
Profit from recurring operations |
36.6 |
12.7% |
33.2 |
12.2% |
||||
Operating profit |
36.2 |
12.6% |
30.6 |
11.3% |
|
||||||||
2023 |
2022 |
|||||||
€m | % | €m | % | |||||
Revenue |
5,805.3 |
5,101.2 |
||||||
Staff costs |
-3,577.1 |
-3,150.5 |
||||||
Operating Expenses |
-1,501.4 |
-1,355.9 |
||||||
Depreciation, amortisation and provisions |
-178.6 |
-141.7 |
||||||
Operating profit on business activity |
548.2 |
9.4% |
453.1 |
8.9% |
||||
Share-based payment expenses |
-43.0 |
|
-23.2 |
|
||||
Amortisation of allocated intangible assets |
-38.0 |
|
-32.3 |
|
||||
Profit from recurring operations |
467.2 |
8.0% |
397.6 |
7.8% |
||||
Other operating income and expenses |
-137.4 |
|
-36.3 |
|
||||
Operating profit |
329.9 |
5.7% |
361.3 |
7.1% |
||||
Cost of net financial debt |
-19.5 |
|
-8.7 |
|
||||
Other financial income and expenses |
-16.3 |
|
-5.7 |
|
||||
Tax expense |
-111.7 |
|
-83.2 |
|
||||
Net profit from associates |
6.7 |
|
-14.7 |
|
||||
Net profit |
189.1 |
3.3% |
249.0 |
4.9% |
||||
Attributable to the Group |
183.7 |
3.2% |
247.8 |
4.9% |
||||
Non-controlling interests |
5.4 |
1.2 |
||||||
Weighted average number of shares in issue excl. treasury shares (m) |
20.22 |
20.26 |
||||||
Basic earnings per share (€m) |
9.08 |
12.23 |
|
||||||
2023 | 2022 | |||||
Operating profit on business activity |
548.2 |
453.1 |
||||
Depreciation, amortisation and provisions (excluding allocated intangible assets) |
176.1 |
144.4 |
||||
EBITDA |
724.3 |
597.5 |
||||
Non-cash items |
0.4 |
5.4 |
||||
Tax paid |
-82.6 |
-87.8 |
||||
Change in current operating working capital requirement |
44.9 |
6.1 |
||||
Reorganisation and restructuring costs |
-62.8 |
-17.8 |
||||
Net cash flow from operating activities |
624.2 |
503.4 |
||||
Change relating to investing activities |
-93.7 |
-94.1 |
||||
Lease payments |
-106.0 |
-94.5 |
||||
Net interest |
-22.0 |
-8.6 |
||||
Additional contributions related to defined-benefit pension plans |
-12.3 |
-18.9 |
||||
Free cash flow |
390.2 |
287.2 |
||||
Capital increases |
0.0 |
0.0 |
||||
Impact of changes in scope |
-1,049.2 |
-13.8 |
||||
Financial investments |
-11.8 |
-8.7 |
||||
Dividends paid |
-94.5 |
-71.6 |
||||
Dividends received from equity-accounted companies |
2.7 |
2.8 |
||||
Purchase and sale of treasury shares |
-26.1 |
-17.5 |
||||
Impact of changes in foreign exchange rates |
-5.2 |
-3.4 |
||||
Other changes |
0.0 |
0.0 |
||||
Change in net financial debt |
- 794.0 |
175.1 |
||||
Net financial debt at beginning of period |
152.0 |
327.1 |
||||
Net financial debt at end of period |
946.0 |
152.0 |
|
||||||
|
|
|||||
|
2,668.9 |
1,943.9 |
||||
Allocated intangible assets |
124.8 |
108.3 |
||||
Other fixed assets |
304.3 |
261.3 |
||||
Right-of-use assets |
457.1 |
359.9 |
||||
Equity-accounted investments |
185.9 |
183.5 |
||||
Fixed assets |
3,740.9 |
2,857.0 |
||||
Net deferred tax |
98.3 |
58.5 |
||||
Trade accounts receivable (net) |
1,372.4 |
1,104.2 |
||||
Other assets and liabilities |
-1,556.4 |
-1,347.6 |
||||
Working capital requirement (WCR) |
-184.0 |
-243.4 |
||||
Assets + WCR |
3,655.2 |
2,672.1 |
||||
Equity |
1,925.1 |
1,893.4 |
||||
Pensions – Post-employment benefits |
167.8 |
137.7 |
||||
Provisions for contingencies and losses |
113.3 |
98.5 |
||||
Lease liabilities |
503.0 |
390.5 |
||||
Net financial debt |
946.0 |
152.0 |
||||
Capital invested |
3,655.2 |
2,672.1 |
|
||||||
|
|
|||||
|
21,758 |
19,822 |
||||
|
7,779 |
7,440 |
||||
Other |
16,534 |
12,583 |
||||
Rest of the World |
560 |
435 |
||||
X-Shore |
9,202 |
9,410 |
||||
Total |
55,833 |
49,690 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240221944210/en/
Investor Relations
Olivier Psaume
olivier.psaume@soprasteria.com
+33 (0)1 40 67 68 16
Press Relations
caroline.simon@image7.fr
+33 (0)1 53 70 74 65
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