Sopra Steria Group Sa · EURONEXT:SOP
Sopra Steria Group Sa — H1 2015 Earnings Presentation
40 slides from Sopra Steria Group Sa's earnings presentation, Aug 6, 2015
Slide 1: Presentation of First-Half 2015 Results
PRESENTATION OF FIRST-HALF 2015 RESULTS Paris, 6 August 2015 Delivering Transformation. Together.
Slide 2: Disclaimer
DISCLAIMER This presentation contains forward-looking statements subject to certain risks and uncertainties that may affect the Group’s future growth and profitability. Readers are reminded that licence agreements, which often represent investments for clients, are signed in greater numbers in the s
Slide 3: Agenda
AGENDA 1|Key events of the first half of 2015 2|Financial results of the first half of 2015 3|Market, strategy & medium-term targets 4|Question & answer session 5|Annexes 3 Presentation of first-half 2015 results - 06/08/2015 - Paris
Slide 4: Key Events of the First Half of 2015
KEY EVENTS OF THE FIRST HALF OF 2015 Vincent Paris – Chief Executive Officer 4 Presentation of first-half 2015 results - 06/08/2015 - Paris
Slide 5: First-Half 2015: Key Figures
FIRST-HALF 2015: KEY FIGURES Revenue Operating profit on business activity €1,768.1m €107.4m Growth* 6.4% i.e. 6.1% of revenue Organic growth** 2.0% Net profit attributable to the Group Cost synergies in H1 2015 €26.9m €20.0m i.e. 1.5% of revenue Ahead of initial planning Confirmation of a total cum
Slide 6: Update on the Sopra Steria Integration
UPDATE ON THE SOPRA - STERIA INTEGRATION THE MAIN PORTION OF THE INTEGRATION IS COMPLETE 1st phase of integration 2nd phase of integration Until June 2015 Starting June 2015 Major decisions: Monitoring alerts and Organisation improving security Governance Systems Assessing and continuously T
Slide 7: Operational Synergies Related to the Merger
OPERATIONAL SYNERGIES RELATED TO THE MERGER UPDATE AT 30/06/2015 Confirmation of the target of €62m in synergies for €65m in implementation costs €20m in savings generated in H1 Initial annual target for the 2015 financial year: €35m €25.5m in implementation costs recorded in H1 Initial annual targe
Slide 8: Updated 2015 Annual Targets
UPDATED 2015 ANNUAL TARGETS Organic revenue growth of around 2% vs. Announced on 19 March 2015: “organic revenue growth for the financial year” Operating margin on business activity of around 6.5% vs. Announced on 19 March 2015: “operating margin on business activity of around 6%” 8 Presentation of
Slide 9: Change in Group Revenue
CHANGE IN GROUP REVENUE ORGANIC GROWTH OF 2.0% IN H1 2015 1780 1,768.1 34.2 1760 1740 16.1 56.4 1720 Revenue (€m) 1700 1680 1,661.4 1660 Averages vs H1 2014: 1640 - EUR/GBP = +12.2% - EUR/NOK = +3.5% 1620 1600 Revenue H1 Currency effect Scope effect Organic growth Revenue H1 2014* 2015 * Base of com
Slide 10: Operating Performance by Division
OPERATING PERFORMANCE BY DIVISION KEY FIGURES IN FIRST-HALF 2015 Revenue Operating profit on business activity H1 2014 Organic H1 2014 H1 2015 H1 2015 Restated* growth Pro Forma (€m) (% of Rev.) (€m) (%) (% of Rev.) France 666.2 654.1 + 1.8% 8.0% 5.0% United Kingdom 518.3 523.4 - 1.0% 6.4% 9.4% Othe
Slide 11: France: Consulting & Systems Integration
FRANCE: CONSULTING & SYSTEMS INTEGRATION INTEGRATION PROGRESSING SMOOTHLY, STRONG BUSINESS ACTIVITY France: H1 2015 H1 2014 Pro forma Consulting & Systems Integration (C&SI) (€m) (% of Rev.) (€m) (% of Rev.) Revenue 562.8 545.2 Organic growth (%) + 3.1% Operating profit on business activity 53.8 9.6
Slide 12: France: I2S
FRANCE: I2S A CHALLENGING SITUATION, SLIGHT IMPROVEMENT IN THE FIRST HALF France : H1 2015 H1 2014 Pro forma Infrastructure and Security Services (I2S) (€m) (% of Rev.) (€m) (% of Rev.) Revenue 103.4 108.4 Organic growth (%) - 4.6% Operating profit on business activity - 0.5 -0.5% - 1.4 -1.3% Profit
Slide 13: United Kingdom
UNITED KINGDOM SOLID POSITIONING AND SIGNIFICANT OPPORTUNITIES H1 2015 H1 2014 Pro forma United Kingdom (€m) (% of Rev.) (€m) (% of Rev.) Revenue 518.3 468.2 Organic growth (%) - 1.0% Operating profit on business activity 33.3 6.4% 44.2 9.4% Profit from recurring operations 26.9 5.2% 38.5 8.2% Opera
Slide 14: Other Europe
OTHER EUROPE STABILISATION IN GERMANY, GROWTH IN SPAIN AND SCANDINAVIA H1 2015 H1 2014 Pro forma Other Europe (€m) (% of Rev.) (€m) (% of Rev.) Revenue 346.3 334.0 Organic growth (%) + 4.3% Operating profit on business activity 2.2 0.6% 9.6 2.9% Profit from recurring operations 1.7 0.5% 8.8 2.6% Ope
Slide 15: Sopra Banking Software
SOPRA BANKING SOFTWARE HIGH LEVEL OF INVESTMENT, MAJOR BUSINESS OPPORTUNITIES H1 2015 H1 2014 Pro forma Sopra Banking Software (€m) (% of Rev.) (€m) (% of Rev.) Revenue 138.3 127.2 Organic growth (%) + 7.5% Operating profit on business activity 9.9 7.2% 8.5 6.7% Profit from recurring operations 7.2
Slide 16: Other Solutions
OTHER SOLUTIONS CONTINUED POSITIVE TRENDS IN REVENUE AND MARGINS H1 2015 H1 2014 Pro forma Other Solutions (€m) (% of Rev.) (€m) (% of Rev.) Revenue 99.0 78.4 Organic growth (%) + 3.2% Operating profit on business activity 8.7 8.8% 9.4 12.0% Profit from recurring operations 8.7 8.8% 9.4 12.0% Operat
Slide 17: Financial Results
FINANCIAL RESULTS Laurent LEMAIRE – Chief Financial Officer 17 Presentation of first-half 2015 results - 06/08/2015 - Paris
Slide 18: Income Statement
INCOME STATEMENT FIRST-HALF 2015 H1 2014 H1 2014 H1 2015 H1 2015 Pro forma Pro forma (€m) (% of Rev.) (€m) (% of Rev.) Revenue 1,768.1 1,661.5 Operating profit on business activity 107.4 6.1% 104.3 6.3% Expenses related to stock options and related items - 0.4 - 1.6 Amortisation of allocated intangi
Slide 19: Other Operating Income and Expenses
OTHER OPERATING INCOME AND EXPENSES FIRST-HALF 2015 H1 2014 H1 2015 Pro forma (€m) (€m) Costs related to business combination - 0.9 - 4.7 Restructuring and reorganization costs - 30.4 - 16.9 Others - 0.1 - 2.8 Other operating income and expenses - 31.4 - 24.4 19 Presentation of first-half 2015 resul
Slide 20: Tax Expense
TAX EXPENSE FIRST-HALF 2015 H1 2014 H1 2015 Pro forma (€m) (€m) Profit before tax 54.3 53.2 Effective tax charge 25.2 14.3 Effective tax rate (%) 46.4% 26.9% Deffered tax net asset 146.5 Uncapitalised tax asset 53.1 20 Presentation of first-half 2015 results - 06/08/2015 - Paris
Slide 21: Change in Financial Net Debt
CHANGE IN FINANCIAL NET DEBT FIRST-HALF 2015 H1 2014 H1 2015 Pro forma (€m) (€m) Net debt at beginning of period (A) 442.4 348.7 Cash flow from operations before cost of net financial debt and tax* 102.2 100.1 Tax paid - 6.1 - 21.8 Change in operating working capital requirement - 226.0 - 117.0 Net
Slide 22: Marked Seasonality in Free Cash Flow
MARKED SEASONALITY IN FREE CASH FLOW FIRST-HALF TYPICALLY CASH CONSUMING Sopra Steria Sopra Steria 200 Objective + 162 ~ 155 + 149 150 + 134 H1 85 100 97 69 + 49 Free cash flow (€m) 50 Non-recurring +1 elements = €55m 78 65 76 38 52 - 83 -96 -55 0 -8 -24 -27 -30 -37 -31 -50 -75 -66 -100 H2 ~ €80m -
Slide 23: Sound Financial Position (1/2)
SOUND FINANCIAL POSITION (1/2) FIRST-HALF 2015 EBITDA leverage: 2.1x (max. 3.0x) Net financial debt at 30/06/2015 30/06/2015 Sopra Steria Gross financial debt 847.0 Cash and cash equivalents 228.9 Available undrawn amount: €1bn i.e. 54 % of authorised amount* Net financial debt 618.1 Long terms to m
Slide 24: Sound Financial Position (2/2)
SOUND FINANCIAL POSITION (2/2) FIRST-HALF 2015 30/06/2015 30/06/2015 Amount used Amount authorised (€m) (€m) Bond* 180.0 180.0 Syndicated loan - Tranche A € 200.0 200.0 Syndicated loan - Tranche B £ 112.5 112.5 Multi-currency revolving credit facility - 900.0 Finance leases 9.5 9.5 Overdrafts and Ot
Slide 25: Pension Fund Deficit Net of Tax (UK)
PENSION FUND DEFICIT NET OF TAX (UK) FIRST-HALF 2015 240 220.0 220 No change in engagements in 200.0 Deficit net of tax (€m) 200 local currency 180 Change in deficit due to currency effect (up €19m in first- 160 half 2015) 140 Annual additional cash contribution of £17m unchanged 120 through June 20
Slide 26: Simplified Balance Sheet
SIMPLIFIED BALANCE SHEET FIRST-HALF 2015 31/12/2014 30/06/2015 Adjusted* (€m) (€m) Goodwill 1,546.8 1,475.2 Allocated intangible assets 176.7 174.6 Other fixed assets 235.6 230.0 Equity-accounted investments 148.6 146.8 Fixed assets 2,107.7 2,026.6 Net deferred tax 146.5 146.6 Trade accounts receiva
Slide 27: Market, Strategy & Medium-Term Targets
MARKET, STRATEGY & MEDIUM-TERM TARGETS Vincent Paris – Chief Executive Officer 27 Presentation of first-half 2015 results - 06/08/2015 - Paris
Slide 28: Strategic Plan Launched
STRATEGIC PLAN LAUNCHED Digital Independent Strategic project wave project 5-year strategic plan construction Industry Creation of consolidation Governance Strategy Committee Working groups led by Pierre Pasquier Timeline April to Sept. 2015 End of 2015 2016 and beyond Work of the strategy First gui
Slide 29: Challenges of Digital Transformation (1/2)
CHALLENGES OF DIGITAL TRANSFORMATION (1/2) FOR OUR LARGE CLIENTS BPS BUSINESS LINE Mobile SSC platforms CHALLENGES Analytics Industry- Operational efficiency SaaS specific New client experience solutions Focusing on core business Knowledge/value for clients Connected objects Standardisation, B2B/Sup
Slide 30: Challenges of Digital Transformation (2/2)
CHALLENGES OF DIGITAL TRANSFORMATION (2/2) FOR OUR LARGE CLIENTS Need of a partner for transformation Business Solutions Supplier and Value Business-Line Service Manager Architect/Integrator for the digital world IT Value Driver of the Information System asset enhancement 30 Presentation of first-ha
Slide 31: First Guidelines of the Project
FIRST GUIDELINES OF THE PROJECT Differentiated positioning... European operator Integrated End-to-End provider ...and specific strengths Solutions Focus on Our key verticals Client proximity Our large clients Innovative Integrated End-to-End european partner for digital transformation 31 Present
Slide 32: First Priorities Retained
FIRST PRIORITIES RETAINED Strategic priorities Reinforce solutions Launch disruptive initiatives to make the digital wave a driver of transformation for our clients, especially in the financial sector Enhanced market intelligence Innovative partnerships Co-innovation B2B2C approach, etc. Rei
Slide 33: Reminder of Targets for 2017
REMINDER OF TARGETS FOR 2017 Revenue of between €3.8bn and €4.0bn Operating profit on business activity of between 8% and 9% 33 Presentation of first-half 2015 results - 06/08/2015 - Paris
Slide 34: Questions & Answers
QUESTIONS & ANSWERS 34 Presentation of first-half 2015 results - 06/08/2015 - Paris
Slide 35: Annexes
ANNEXES 35 Presentation of first-half 2015 results - 06/08/2015 - Paris
Slide 36: Sopra Steria 2014
SOPRA STERIA 2014 A EUROPEAN LEADER IN DIGITAL TRANSFORMATION €3.4bn More than 37,000 Present in A good in revenue employees over 20 countries business match Top 5 European digital services Top 10 operating in Europe companies Pro forma revenue at 31/12/2014 Retail Manufacturing BPS Energy Rest of U
Slide 37: Breakdown of Sopra Steria's 2014 Pro Forma Revenue
BREAKDOWN OF SOPRA STERIA’S 2014 PRO FORMA REVENUE BY COUNTRY GROUP PRO FORMA REVENUE AT 31/12/2014 SERVICES REVENUE AT 31/12/2014 (87% OF REVENUE) Rest of Other World Europe 23% 45% France €2,937m Other 2% Europe 23% 32% United Kingdom 46% France €3,370m SOLUTIONS REVENUE AT 31/12/2014 (13% OF REVE
Slide 38: Breakdown of Solutions Revenue in 2014
BREAKDOWN OF SOLUTIONS REVENUE IN 2014 SOPRA STERIA SOLUTIONS REVENUE AT 31/12/2014 BREAKDOWN OF SOLUTIONS REVENUE BY ACTIVITY €433m: 13% OF GROUP REVENUE Licences Property management 15% solutions Integration Services 49% ACTIVITIES Maintenance 24% 10% Sopra HR 30% Software 12% Managed Services SOL
Slide 39: Share Ownership Structure at 30/06/2015
SHARE OWNERSHIP STRUCTURE AT 30/06/2015 A STABLE SHAREHOLDER BASE FOR A SUCCESSFUL PROJECT Pasquier Odin Managers family family 2.4% 69.0% 28.6% Founders & Sopra GMT Shareholdings managed Treasury Management Soderi Free float 19.8% on behalf of employees shares 4.3% Shareholders’ agreement 24.1% 8.5
Slide 40: Change in Shareholding on 25/06/2015
CHANGE IN SHAREHOLDING ON 25/06/2015 SOPRA GMT INCREASES ITS STAKE IN THE GROUP’S SHARE CAPITAL Sopra GMT 3.4% i.e. 700,000 shares Société Générale Geninfo Sopra Steria Group 7.0% Private placement via accelerated bookbuild 1.5% i.e. 1,434,700 shares i.e. 300,000 shares Free float 2.1% i.e. 434,700