Sopra Steria Group Sa · EURONEXT:SOP
Sopra Steria Group Sa — H1 2016 Earnings Presentation
43 slides from Sopra Steria Group Sa's earnings presentation, Jul 28, 2016
Slide 1: Presentation of First-Half 2016 Results
PRESENTATION OF FIRST-HALF 2016 RESULTS Paris, 28 July 2016 Delivering Transformation. Together.
Slide 2: Disclaimer
DISCLAIMER This presentation 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
Slide 3: Introduction
INTRODUCTION Pierre Pasquier – Chairman 3 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 4: Agenda
AGENDA 1|Operating position at 30 June 2016 2|Financial results for the 1st half of 2016 3|New developments in the 1st half of 2016 4|Targets for 2016 and 2017 5|Question & answer session 6|Annexes 4 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 5: Operating Position at June 2016
OPERATING POSITION AT 30 JUNE 2016 Vincent Paris – Chief Executive Officer 5 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 6: Highlights of the 1st Half of 2016
HIGHLIGHTS OF THE 1ST HALF OF 2016 Operating position in line with objectives for 2017 Dynamic sales momentum Sopra Banking Software’s promising new position in payments An ongoing selective acquisitions policy Numerous digital initiatives 6 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 7: Discover Our New Apps
DISCOVER OUR NEW APPS 7 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 8: Key Figures for the 1st Half of 2016
KEY FIGURES FOR THE 1ST HALF OF 2016 1ST HALF-YEAR IN LINE WITH FULL-YEAR TARGETS Revenue Operating profit on business activity €1,878.8m €134.2m = organic growth* of 5.4% = 7.1% of revenue up 25% from 30/06/2015 Net profit attributable to the Group Net financial debt €54.0m €719.6m = 2.9% of revenu
Slide 9: Change in Revenue for the 1st Half of 2016
CHANGE IN REVENUE FOR THE 1ST HALF OF 2016 ORGANIC GROWTH OF 5.4% 1 900 1,878.8 95.7 1 850 IM Sweden = -€2.3m Cassiopae = +€12.1m CIMPA = +€45.1m 1 800 54.9 1,768.1 -39.8 Revenue (€m) 1 750 Averages vs. H1 2015: 1 700 GBP / € = -6.0% NOK / € = -8.2% 1 650 1 600 1 550 Revenue H1 Currency effect Scope
Slide 10: Operating Performance by Division
OPERATING PERFORMANCE BY DIVISION FIRST-HALF 2016 Revenue Operating profit on business activity H1 2015 Organic H1 2016 H1 2016 H1 2015 Restated* growth (€m) (% of Rev.) (% of Rev.) (€m) (%) France 778.8 711.1 + 9.5% 8.6% 8.0% United Kingdom 483.4 487.6 - 0.9% 7.3% 6.4% Other Europe 355.6 336.30 + 5
Slide 11: France: Consulting & Systems Integration
FRANCE: CONSULTING & SYSTEMS INTEGRATION A PATTERN OF MARKET SHARE GAINS H1 2016 H1 2015 France: Consulting & Systems Integration (C&SI) (€m) (% of Rev.) (€m) (% of Rev.) (Including CIMPA) Revenue 677.6 562.8 Organic growth (%)* + 11.5% Operating profit on business activity 66.3 9.8% 53.8 9.6% Profi
Slide 12: France: Infrastructure and Security Services (I2S)
FRANCE: INFRASTRUCTURE AND SECURITY SERVICES (I2S) IMPROVEMENT PROCEEDING ACCORDING TO PLAN France: H1 2016 H1 2015 Infrastructure and Security Services (I2S) (€m) (% of Rev.) (€m) (% of Rev.) Revenue 101.2 103.4 Organic growth (%)* - 2.1% Operating profit on business activity 0.5 0.5% - 0.5 -0.5% P
Slide 13: United Kingdom (1/2)
UNITED KINGDOM (1/2) RESILIENT CONTRACT TYPES UK revenue = 26% of Group revenue* Cyclical contracts 22% 78% of UK revenue is resilient TYPE Business Process Outsourcing, Infrastructure OF REV Management, Application Maintenance Multi-year contracts (3-10 years) 78% Resilient contracts Private Se
Slide 14: United Kingdom (2/2)
UNITED KINGDOM (2/2) BUSINESS STABLE OVERALL H1 2016 H1 2015 United Kingdom (€m) (% of Rev.) (€m) (% of Rev.) Revenue 483.4 518.3 Organic growth (%)* - 0.9% Operating profit on business activity 35.4 7.3% 33.3 6.4% Profit from recurring operations 29.3 6.1% 26.9 5.2% Operating profit 29.2 6.0% 25.2
Slide 15: Other Europe
OTHER EUROPE SIGNIFICANT IMPROVEMENT IN OPERATING MARGIN ON BUSINESS ACTIVITY H1 2016 H1 2015 Other Europe (€m) (% of Rev.) (€m) (% of Rev.) Revenue 355.6 346.3 Organic growth (%)* + 5.7% Operating profit on business activity 15.8 4.4% 2.2 0.6% Profit from recurring operations 13.9 3.9% 1.7 0.5% Ope
Slide 16: Sopra Banking Software
SOPRA BANKING SOFTWARE GROWTH AND CONTINUING INVESTMENTS H1 2016 H1 2015 Sopra Banking Software (€m) (% of Rev.) (€m) (% of Rev.) Revenue 160.2 138.3 Organic growth (%)* + 7.4% Operating profit on business activity 6.9 4.3% 9.9 7.2% Profit from recurring operations 2.6 1.6% 7.2 5.2% Operating profit
Slide 17: Other Solutions
OTHER SOLUTIONS IMPROVED OPERATING PERFORMANCE H1 2016 H1 2015 Other Solutions (€m) (% of Rev.) (€m) (% of Rev.) Revenue 100.7 99.0 Organic growth (%)* + 1.7% Operating profit on business activity 9.3 9.2% 8.7 8.8% Profit from recurring operations 8.7 8.6% 8.7 8.8% Operating profit 8.1 8.0% 6.4 6.5%
Slide 18: Financial Results for the 1st Half of 2016
FINANCIAL RESULTS FOR THE 1ST HALF OF 2016 Etienne du Vignaux – Chief Financial Officer 18 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 19: Income Statement
INCOME STATEMENT FIRST-HALF 2016 H1 2016 H1 2016 H1 2015 H1 2015 (€m) (% of Rev.) (€m) (% of Rev.) Revenue 1,878.8 1,768.1 Organic growth* 5.4% Operating profit on business activity 134.2 7.1% 107.4 6.1% Expenses related to stock options and related items - 10.2 - 0.4 Amortisation of allocated intan
Slide 20: Other Operating Income and Expenses
OTHER OPERATING INCOME AND EXPENSES FIRST-HALF 2016 H1 2016 H1 2015 (€m) (€m) Costs related to business combination - 1.0 - 0.9 Restructuring and reorganisation costs - 7.9 - 30.4 Other - 1.8 - 0.1 Other operating income and expenses - 10.7 - 31.4 20 2016 Half-Year Results Presentation - 28/07/2016
Slide 21: Tax Expense
TAX EXPENSE FIRST-HALF 2016 H1 2016 H1 2015 (€m) (€m) Profit before tax and share from equity-accounted companies 94.8 54.3 Effective tax charge 44.4 25.2 Effective tax rate (%) 46.8% 46.4% H1 2016 H1 2015 (€m) (€m) Net deferred tax assets 152.3 146.5 21 2016 Half-Year Results Presentation - 28/07/2
Slide 22: Change in Net Financial Debt for the 1st Half-Year
CHANGE IN NET FINANCIAL DEBT FOR THE 1ST HALF-YEAR IMPROVED FREE CASH FLOW 800 - 104.8 719.6 700 + 2.0 + 9.3 + 5.3 - 14.1 - 86.5 Net financial debt (€m) 600 vs. - €25.0m at 30/06/2015 530.8 500 vs. - €138.3m at 30/06/2015 Normal seasonality: 400 First-half typically cash consuming 300 200 Net financ
Slide 23: Sound Financial Position at 30/06/2016
SOUND FINANCIAL POSITION AT 30/06/2016 DEBT COVENANTS AND LIQUIDITY Net financial debt 30/06/2016 30/06/2016 at 30/06/2016: Amount used Amount authorised €719.6m (€m) (€m) Bond 180.0 180.0 Syndicated loan - Tranche A € 180.0 180.0 EBITDA leverage: Syndicated loan - Tranche B £ 87.1 87.1 2.2 (max. 3.
Slide 24: UK Pension Fund Deficit Net of Tax at 30/06/2016
UK PENSION FUND DEFICIT NET OF TAX AT 30/06/2016 DEFICIT OF ABOUT €200M 250 230 220 222 Deficit net of tax stable vs. 210 200 30/06/2015 Deficit net of tax (€m) 190 Increase in liabilities vs. 31/12/2015 170 due to reduced discount rate 150 Annual additional cash contribution 130 125 of £17m unchang
Slide 25: New Developments in the 1st Half of 2016
NEW DEVELOPMENTS IN THE 1ST HALF OF 2016 Vincent Paris – Chief Executive Officer 25 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 26: Major Contracts Won
MAJOR CONTRACTS WON 26 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 27: Numerous Digital Initiatives
NUMEROUS DIGITAL INITIATIVES Digital Transformation Office 1st IT company in IBM Watson ecosystem Digital Champions Microsoft Azure Gold Partner Digital Tour 2016 IoT Line Digital Transformation app Cloud Migration Factory Digilab’ app CloudOps Wazoku collaborative idea management 27 2016 Half-Year
Slide 28: A New and Improved Corporate Plan
A NEW AND IMPROVED CORPORATE PLAN OUR VALUES Priority on client Respect Proactive, positive service for others initiatives OUR ORGANISATIONAL AND GOVERNANCE PRINCIPLES THE ROLES OUR BUSINESS AND OF A MANGER MANAGEMENT FUNDAMENTALS Professional A sense of shared Open-mindedness excellence commitment
Slide 29: Continuing Strategic Development
CONTINUING STRATEGIC DEVELOPMENT AS PREVIOUSLY LAID OUT European leader in digital transformation 29 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 30: A Policy of Targeted Acquisitions
A POLICY OF TARGETED ACQUISITIONS Leading developer of An innovative startup Consulting firm specialising in specialised finance and developing digital solutions industrial and logistics property management for property management and organisation software, ranked 16 among optimisation No. 2
Slide 31: Targets for 2016 and 2017
TARGETS FOR 2016 AND 2017 Vincent Paris – Chief Executive Officer 31 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 32: Recap of Targets for 2016
RECAP OF TARGETS FOR 2016 Organic revenue growth of between 3% and 5% Operating margin on business activity of more than 7.5% Strong increase in free cash flow 32 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 33: Recap of Targets for 2017
RECAP OF TARGETS FOR 2017 Revenue of between €3.8bn and €4.0bn Operating margin on business activity of between 8% and 9% 33 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 34: Questions & Answers
QUESTIONS & ANSWERS 34 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 35: Annexes
ANNEXES 35 2016 Half-Year Results Presentation - 28/07/2016 - Paris
Slide 36: Sopra Steria at 30/06/2016
SOPRA STERIA AT 30/06/2016 EUROPEAN LEADER IN DIGITAL TRANSFORMATION 2015 revenue More than 39,000 Present in over 20 An end-to-end of €3.6bn employees countries offering Top 5 European digital services companies Top 10 operating in Europe Revenue at 30/06/2016 Rest of the World BPS Other 2% Retail
Slide 37: Revenue by Country
REVENUE BY COUNTRY FOR THE PERIOD ENDED 30/06/2016 SERVICES REVENUE, PERIOD ENDED 30/06/2016 SOLUTIONS REVENUE, PERIOD ENDED 30/06/2016 Other Europe H1 2016 revenue for Other Europe = €351m Rest of the World Germany = 33% Spain = 16% Italy = 8% Switzerland = 6% 12% BeLux = 9% Scandinavia = 28% 22% F
Slide 38: Solutions Revenue
SOLUTIONS REVENUE FOR THE PERIOD ENDED 30/06/2016 SOLUTIONS REVENUE BY PRODUCT SOLUTIONS REVENUE BY BUSINESS LINE Property Management Solutions Managed Services 10% 15% Licences Sopra HR 12% 29% €261M Sopra €261M 50% Software Banking 61% Software Integration 23% Maintenance services Sopra Banking So
Slide 39: Earnings per Share
EARNINGS PER SHARE FIRST-HALF 2016 H1 2016 H1 2015 (€m) (€m) Net profit - attributable to Group (€m) 54.0 26.9 Weighted average number of shares in issue 20.01 19.73 excluding treasury shares Basic earnings per share (€) 2.70 1.36 Theorical weighted average number of shares 20.06 19.80 Fully diluted
Slide 40: Change in Net Financial Debt
CHANGE IN NET FINANCIAL DEBT FIRST-HALF 2016 H1 2016 H1 2015 (€m) (€m) Net debt at beginning of period (A) 530.8 442.4 Cash flow from operations before cost of net financial debt and tax* 140.2 102.2 Tax paid - 33.0 - 6.1 Change in operating working capital requirement - 172.9 - 226.0 Net cash flow
Slide 41: Simplified Balance Sheet
SIMPLIFIED BALANCE SHEET 30/06/2016 30/06/2016 31/12/2015 (€m) (€m) Goodwill 1,571.9 1,586.9 Allocated intangible assets 172.1 186.5 Other fixed assets 160.9 162.8 Equity-accounted investments 192.6 154.4 Fixed assets 2,097.5 2,090.7 Net deferred tax 152.3 127.0 Trade accounts receivable (net) 1,118
Slide 42: Change in Exchange Rates
CHANGE IN EXCHANGE RATES FIRST-HALF 2016 Changes in exchange rates Average rate Average rate Change For €1 / % H1 2016 H1 2015 (%) (€m) (€m) Pound sterling 0.7788 0.7323 - 6.0% Norwegian krone 9.4197 8.6483 - 8.2% Swedish krona 9.3019 9.3401 - + 0.4% 0 Danish krone 7.4497 7.4562 - + 0.1% 0 Swiss fra
Slide 43: Share Ownership Structure at 30/06/2016
SHARE OWNERSHIP STRUCTURE AT 30/06/2016 A STABLE SHAREHOLDER BASE FOR A SUCCESSFUL PROJECT Pasquier Odin family Managers family 2.4% 69.0% 28.6% Founders & Sopra GMT Shares managed on behalf Treasury Management Soderi Free float 19.7% of employees shares 4.2% Shareholders’ agreement 23.9% 8.3% 0.5%