Sopra Steria Group Sa · EURONEXT:SOP
Sopra Steria Group Sa — Non-Deal Roadshow (May 2018)
32 slides from Sopra Steria Group Sa's roadshow presentation, May 2018
Slide 1: Roadshow USA
ROADSHOW USA CM-CIC MARKET SOLUTIONS May 2018 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: Content
CONTENT 1|Company overview 2|FY 2017 Highlights & Q1 2018 Performance 3|2018 Priorities & 2020 Ambition 4|Annexes 3 USA Roadshow - May 2018
Slide 4: Company Overview
COMPANY OVERVIEW 4 USA Roadshow - May 2018
Slide 5: Western Europe IT Services Market Structure
WESTERN EUROPE IT SERVICES MARKET STRUCTURE A MARKET OF € 226 BN Sopra Steria 2017 Market Share Market Sopra Steria Market Share Main competitors in Western Europe €bn / % 2017 2017 2017 Capgemini France 29.8 1.6 5.4% Accenture UK 69.8 0.8 1.1% CGI AtoS Germany 37.9 0.3 0.8% IBM Other West
Slide 6: Stock Market ID
STOCK MARKET ID SOPRA STERIA GROUP WEIGHT IN INDEXES (11/2017) CAC ALL SHARES 0.14% CAC ALL-TRADABLE 0.16% CAC MID 60 CAC MID&SMALL 1.50% 1.25% Reuters : SOPR.PA CAC SOFT. & C. S. 2.89% CAC TECHNOLOGY ESI EXC EUROPE 2.28% 0.08% Bloomberg : SOP:FP ESI EXC EUROPE VM 0.04% EURONEXT FAS IAS 4.24% NEXT 1
Slide 7: Ownership at 31/12/2017
OWNERSHIP AT 31/12/2017 A LEADING SHAREHOLDER AS THE PROJECT’S GUARANTOR Pasquier Odin Managers family family 2.4% 69.0% 28.6% Founders & Sopra GMT Interests managed on Treasury management Soderi Free float 19.6% behalf of employees shares 3.0% Shareholders’ agreement 22.6% 7.0% 0.1% 70.4% (33.2%) (
Slide 8: A Look Back Over 50 Years of History
A LOOK BACK OVER 50 YEARS OF HISTORY Creation of the banking solutions Initial banking know-how gained with the signing of a development business 1st major comprehensive managed services agreement Birth of Sopra 1982 1973 1971 1969 1968 Computerization of Agence France Presse with the Birth of Steri
Slide 9: Sopra Steria at 31/12/2017
SOPRA STERIA AT 31/12/2017 A EUROPEAN LEADER IN DIGITAL TRANSFORMATION Top 5 European digital services Top 10 operating in Europe companies 41,000+ Operations in End-to-end 2017 revenue of €3.8bn employees more than 20 countries approach Revenue to 31/12/2017 Rest of the World Business Process Servi
Slide 10: Sopra Steria Historical Performance
SOPRA STERIA HISTORICAL PERFORMANCE 3845 3741 3584 3370 Revenue (€m) Operating profit on business activity (€m) 1349 1216 1050 964 958 912 856 781 672 556 37 47 63 76 82 65 86 93 110 109 231 246 301 329 2014 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015 2016 2017 Pro forma** Total growth 23
Slide 11: Historical Net Profit & Dividend
HISTORICAL NET PROFIT & DIVIDEND 3 150 Net profit attributable to 2,4 Axway (€m) 2,5 130 2,2 Net profit attributable to the Group (€m) 110 1,9 1,9 1,9 2 Dividend (€) 1,7 1,7 1,65 1,65 90 Axway spin off 1,35 1,5 8 June 2011, Sopra Group AGM approved 70 8 the distribution by Sopra Group to its 1,1 sha
Slide 12: 2017 Highlights & Performance
2017 HIGHLIGHTS & PERFORMANCE 12 USA Roadshow - May 2018
Slide 13: Key Figures for 2017
KEY FIGURES FOR 2017 Revenue Operating profit on business Net profit – Group share activity €3,845.4m €329.8m €171.4m i.e. organic growth* of 3.5% i.e. 8.6% of revenue i.e. 4.5% of revenue 4.6% growth on a constant exchange rate basis up 9.5% relative to 31/12/2016 up 14.0% relative to 31/12/2016 Fr
Slide 14: 2017 Operating Performance by Reporting Unit
2017 OPERATING PERFORMANCE BY REPORTING UNIT STRONG IMPROVEMENT FOR THE OTHER EUROPE REPORTING UNIT Revenue Operating profit on business activity 2016 Organic 2017 2017 2016 Restated* growth (€m) (% of Rev.) (% of Rev.) (€m) (%) France 1,597.0 1,539.7 + 3.7% 8.6% 8.1% United Kingdom 801.7 868.2 - 7.
Slide 15: Change in Net Financial Debt in 2017
CHANGE IN NET FINANCIAL DEBT IN 2017 STABLE RELATIVE TO 2016 Includes €37m for sale of 506.0 trade receivables with deconsolidation -10.7 510.1 -41.7 -1.2 500 -98.8 450 €m 400 350 +148.4 €111.4m Excl. sale of trade receivables 300 Net financial debt Free cash flow Changes in scope and Dividends Chan
Slide 16: Q1 2018 Revenue Evolution by Reporting Unit
Q1 2018 REVENUE EVOLUTION BY REPORTING UNIT +3.8% ORGANIC GROWTH, IN LINE WITH TARGETS Revenue Q1 2017 Organic Total Q1 2018 Restated* growth growth (€m) (€m) (%) (%) France 426.3 418.6 + 1.8% + 3.8% 5.8% United Kingdom 188.4 197.9 - 4.8% - 7.4% Other Europe 231.6 204.3 + 13.4% + 15.7% Sopra Banking
Slide 17: 2018 Priorities & 2020 Ambition
2018 PRIORITIES & 2020 AMBITION 17 USA Roadshow - May 2018
Slide 18: 2020 Project
2020 PROJECT An independent project An ambitious project • Leading shareholder as the • Organic growth project’s guarantor over the long • Targeted external growth term • Focus on Europe for Services and • Significant employee share worldwide ambitions for ownership Software 2020 A project with adde
Slide 19: Ambitions for 2020
AMBITIONS FOR 2020 Operating margin on business activity around 10% Annual organic growth of between Free cash flow of between 5% to 7% 3% and 5% over the period of revenue 2020 19 USA Roadshow - May 2018
Slide 20: Priorities for 2018
PRIORITIES FOR 2018 Sopra Banking Completion of the Platform programmes for Tier 1 banks, strengthening of the Software software house model United Kingdom Success with the repositioning of Consulting and the private sector portfolio Investments Offerings / Digital / Human Resources / Sales / Struct
Slide 21: 2018 Targets
2018 TARGETS Organic revenue growth of between 3% and 5% Slight improvement in operating margin rate on business activity (gap between H1 & H2 more important than in 2018) Free cash flow >€170m (>€133m including 2017 sale of trade receivables) 21 USA Roadshow - May 2018
Slide 22: Annexes
ANNEXES 22 USA Roadshow - May 2018
Slide 23: Revenue by Country
REVENUE BY COUNTRY FOR THE PERIOD ENDED 31/12/2017 SERVICES REVENUE TO 31/12/2017 SOLUTIONS REVENUE TO 31/12/2017 2017 revenue Other Europe = €828m o/w Germany = 34% o/w Scandinavia = 29% Other Europe o/w Spain = 14% o/w Belux = 9% Rest of the World o/w Italy = 8% o/w Switzerland = 6% 13% 26% France
Slide 24: Solutions Revenue
SOLUTIONS REVENUE FOR THE PERIOD ENDED 31/12/2017 SOLUTIONS REVENUE BY PRODUCT SOLUTIONS REVENUE BY BUSINESS LINE Property Management Solutions Managed Services 9% 12% Licences 16% Sopra HR 26% €619M Sopra €619M Software SOLUTIONS SOLUTIONS 51% Banking 65% Software Integration 21% Maintenance Servic
Slide 25: Income Statement
INCOME STATEMENT FINANCIAL YEAR 2017 2017 2017 2016 2016 (€m) (% of Rev.) (€m) (% of Rev.) Revenue 3,845.4 3,741.3 Organic growth 3.5% Operating profit on business activity 329.8 8.6% 301.1 8.0% Expenses related to stock options and related items - 21.2 - 12.1 Amortisation of allocated intangible as
Slide 26: Earnings per Share
EARNINGS PER SHARE FINANCIAL YEAR 2017 2017 2016 (€m) (€m) Net profit attributable to the Group (€m) 171.4 150.4 Weighted average number of shares in issue excluding treasury shares 20.21 20.04 Basic earnings per share (€) 8.48 7.50 Basic recurring earnings per share (€) 9.29 8.45 Theoretical weight
Slide 27: Detail of Changes in Free Cash Flow in 2017 vs. 2016
DETAIL OF CHANGES IN FREE CASH FLOW IN 2017 VS. 2016 PERFORMANCE COMPARABLE TO 2016 BUT BELOW TARGET 180 One-off +13.5 unfavourable items 160 150.6 140 -15.6 +25.0 136.4 120 Incl. €20m 111.4 of one-off favourable -32.4 items -4.7 €m 100 80 60 One-off 2017 MPS -€15m 40 Other -€10m 20 0 Free cash flow
Slide 28: Breakdown of Change in Net Financial Debt
BREAKDOWN OF CHANGE IN NET FINANCIAL DEBT FINANCIAL YEAR 2017 2017 2016 (€m) (€m) Operating profit on business activity 329.8 301.1 Depreciation, amortisation and provisions (excl. allocated intangible assets) 19.6 42.9 EBITDA 349.4 344.0 Non-cash items - 1.6 - 0.9 Tax paid - 63.9 - 72.0 Change in o
Slide 29: A Sound Financial Position at 31/12/2017
A SOUND FINANCIAL POSITION AT 31/12/2017 DEBT COVENANTS AND LIQUIDITY Net financial debt 31/12/2017 31/12/2017 at 31/12/2017: Amount used Amount authorised €510.1m (€m) (€m) Bond 180.0 180.0 Syndicated loan – Tranche A € 144.0 144.0 EBITDA leverage ratio: Syndicated loan – Tranche B £ 64.9 64.9 1.44
Slide 30: Simplified Balance Sheet
SIMPLIFIED BALANCE SHEET 31/12/2017 31/12/2017 31/12/2016 (€m) (€m) Goodwill 1,590.6 1,557.0 Allocated intangible assets 161.5 179.7 Other fixed assets 179.7 160.8 Equity-accounted investments 189.1 202.3 Fixed assets 2,120.9 2,099.8 Net deferred tax 98.7 128.9 Trade accounts receivable (net) 1,137.
Slide 31: Changes in the Workforce
CHANGES IN THE WORKFORCE FINANCIAL YEAR 2017 31/12/2017 31/12/2016 France 18,649 18,227 United Kingdom 6,181 6,508 Other Europe 8,777 7,844 Rest of the World 281 231 X-Shore 7,773 7,003 Total 41,661 39,813 31 USA Roadshow - May 2018
Slide 32: Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES 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 the restated revenue for the same period in the prior financial