Sopra Steria Group Sa · EURONEXT:SOP
Sopra Steria Group Sa — Sopra Group — FY2012 Earnings Presentation
37 slides from Sopra Steria Group Sa's earnings presentation, Feb 20, 2013
Slide 1: 2012 results presentation
2012 results presentation Paris, 20 February 2013
Slide 2: Contents
Contents 2012 Highlights Financial Results Market, Strategy & Objectives 2
Slide 3: Change in Group governance
Change in Group governance Significant transition for governance since August 2012 Pierre Pasquier is Chairman Pascal Leroy is Chief Executive Officer Ongoing coordination between the Chairman and the CEO ensuring the successful transition of this strategy Operational transmission well ini
Slide 4: Two distinct complementary roles
Two distinct complementary roles Pierre Pasquier Pascal Leroy Chairman Chief Executive Officer Oversees the strategy, including Helps formulate strategy mergers-acquisitions alongside the Chairman Leads corporate and financial Supervises the implementation of communication operations decisio
Slide 5: 2012, a key year for Sopra Group
2012, a key year for Sopra Group Solid performance and sustained growth over the year Positive Q4 for all of the Group’s entities Substantial improvement in the operating profit on business activity (+20 basis points) Active role in market consolidation Sopra Banking Software created, with
Slide 6: Solid performance in a tough context…
Solid performance in a tough context… 1,217 627 590 Revenue (€m) Operating profit on business activity (€m) 48 62 110 H1 H2 2012 Total growth +11.3% +20.5% +15.8% Organic growth +1.0% +3.8% +2.4% Operating profit on business activity 8.1% 9.9% 9.0% 6
Slide 7: …in line with announced objectives
…in line with announced objectives Revenue • Slight increase Operating profit on business • Slight improvement activity • Participate in market Market consolidation in Europe • Enrich our portfolio of Products solutions 7
Slide 8: …thanks to several major client deals
…thanks to several major client deals Along with many other projects in Europe! 8
Slide 9: …several acquisitions
…several acquisitions Callataÿ Financial solutions & 2012 pro forma revenue: €79m 600 employees Wouters Financial solutions Tieto 2012 pro forma revenue: €27m Solutions 250 employees Business Financial services & 2012 pro forma revenue: €35m Decision 250 employees 9
Slide 10: …and a strategic shift
…and a strategic shift Creation of a subsidiary dedicated to banking solutions European positioning in a high growth-potential market Capitalising on integrator expertise and 40 years’ experience in software development Evolan Delta Tieto Callataÿ Solutions & Wouters 10
Slide 11: …which has already born fruit
…which has already born fruit Q1 Q2 Q3 Q4 FY 2012 2012 2012 2012 2012 Revenue (€m) 28 47 43 54 171 Organic growth (%) 4.9% -11.0% -12.3% 6.9% -3.9% Total growth (%) +92.0% Margin (% revenue) 14.0% 2012 pro forma revenue (€m) 52 54 50 60 216 (Tieto + C&W consolidated ) Recognised by market analysts
Slide 12: Revenue by business line
Revenue by business line Business line o/w Software Real Estate 14% Human Resources 11% Software Sopra 75% Banking 21% Software o/w Consulting & Services Consulting Fixed-price 7% projects 79% 19% Technical assistance 35% Consulting & Application IT Services 39% outsourcing 12
Slide 13: Revenue by vertical market
Revenue by vertical market Verticals Services, Transport & Utilities Financial Retail Services Telecom & Media 5% 10% 33% Public +11% vs 2011 16% Sector Public Sector 16% 20% Manufacturing Services, Transport & Utilities +4% vs 2011 13
Slide 14: Revenue by region
Revenue by region Regions o/w Sopra Banking Software Rest of World 20% Rest of 42% France World 38% Europe 32% o/w Consulting & Services United Kingdom 68% 10% Spain 7% 6% Other France France 77% 14
Slide 15: Trends in our markets in 2012
Trends in our markets in 2012 France Europe (excl. France) + 3.7% vs 2011 +2.9% vs 2011 Sopra Banking Software Top 30 Clients (51% of sales) Q4: +6.9% -3.9% vs 2011 +6.8% vs 2011 15
Slide 16: Performance by subsidiary
Performance by subsidiary UNITED KINGDOM * Revenue: €104m BENELUX Margin: 9.9% Revenue: €11m Growth: -2.9% Margin: 2.7% Growth: +37.5% SWITZERLAND Revenue: €11m Margin: 12.4% SOPRA BANKING Growth: -6.7% SOFTWARE * FRANCE Revenue: €171m Revenue: €805m Margin: 14.0% Margin: 8.4% Growth: -3.9% Growth:
Slide 17: Constant increase in headcount
Constant increase in headcount World (excl. France) 14,310 France +109% Group vs 2004 10,795 9,380 7,665 +58% 6,850 vs 2004 5,935 4,930 3,130 +439% vs 2004 915 2004 2008 2012 17
Slide 18: Key figures for the financial year
Key figures for the financial year Revenue Organic growth €1217m +2.4% +€166m vs 2011 Total growth +15.8% Op. profit on business act. Net profit €110m €56m 9.0% of revenue 4.6% of revenue 18
Slide 19: Contents
Contents 2012 Highlights Financial Results Market, Strategy & Objectives 19
Slide 20: Solid results for the financial year
Solid results for the financial year 2011 2012 2012 (€m) (€m) (%) Revenue 1050.3 1216.7 Operating profit on business activity 92.5 109.6 9.0% Profit from recurring operations 91.7 0.081 103.2 8.5% Operating profit (EBIT) 97.9 0.081 91.3 7.5% Net profit - Group share 62.9 0.081 55.6 4.6% EPS (€) €5.2
Slide 21: Operating profit on business activity
Operating profit on business activity 2011 2012 2012/2011 (€m) (€m) (%) Revenue 1050.3 1216.7 15.8% Staff costs - employees -701.4 -811.8 15.7% Staff costs - contractors -95.8 -100.1 4.5% Staff costs - Total -797.2 -911.9 14.4% Operating expenses -147.0 -178.2 21.2% Depreciation, amortization and pr
Slide 22: Operating profit
Operating profit 2011 2012 2012 (€m) (€m) (%) Operating profit on business activity 92.5 109.6 9.0% Expenses related to stock options and bonus share awards -0.5 -2.2 Amortisation of allocated intangible assets -0.3 -4.2 Profit from recurring operations 91.7 103.2 8.5% Other operating income and exp
Slide 23: Net profit
Net profit 2011 2012 2012 (€m) (€m) (%) Operating profit 97.9 91.3 7.5% Cost of net financial debt -4.1 -7.2 Other operating income and expenses 0.6 -1.0 Tax expense -36.1 -33.6 Share of net profit from equity-accounted companies 6.0 6.1 Net profit before profit from discontinued operations 64.3 55.
Slide 24: Balance sheet
Balance sheet 2011 2012 (€m) (€m) Goodwill 190.9 314.6 Allocated intangible assets 1.3 56.5 Other fixed assets 44.1 45.8 Equity-accounted investments 109.4 113.8 Fixed assets 345.7 530.6 Trade accounts receivable (net) 345.0 384.3 Other assets and liabilities -370.4 -405.6 Operating assets and liabi
Slide 25: Change in net debt
Change in net debt 2011 2012 (€m) (€m) Net debt at beginning of period (A) 57.2 46.4 Gross cash flow from operations before net financial 100.5 112.2 Tax paid -38.7 -41.8 Changes in working capital requirements -1.3 -8.6 Net cash flow from operations 60.5 61.8 Change relating to operating investment
Slide 26: Bank covenants
Bank covenants PRO / Cost of net debt Net debt / Equity Must be Must be 39.07 >5 56% < 100% 25.13 17.27 9% 7% 2010 2011 2012 2010 2011 2012 Net debt / EBITDA (€118M) Net financial debt is adjusted for employee profit sharing (€32m) for the calculation of bank covenants Must be 1.46 <3 0.27 0.20 2010
Slide 27: Contents
Contents 2012 Highlights Financial Results Market, Strategy & Objectives 27
Slide 28: A rapidly changing IT market
A rapidly changing IT market Technology Avancée New New Nouvelles Advances Technologiques Uses Opportunities Opportunités 2 major challenges for our clients Maintenance quality and cost control of existing systems Develop & innovate to support growth and competitiveness Market increasingly r
Slide 29: Since 2004 our business model has evolved
Since 2004 our business model has evolved Revenue (€m) Operating profit on business activity (€m) Sopra 2015 Period of successive global crises, but: • Succesful spin-off of Axway • Margin protection Major transformations: • France as sanctuary • Industrialisation • Expansion in Europe • Improved de
Slide 30: Sopra 2015, an ambitious corporate project…
Sopra 2015, an ambitious corporate project… Ambition A coherent, independent European consulting, technology services and software development firm A market reference in terms of financial performance Positioning A benchmark partner for major companies and organisations – throughout all ve
Slide 31: …based on 4 major strategic initiatives
…based on 4 major strategic initiatives Provide support Accelerate for our clients’ Upscaling European business Europe development challenges and value based on a competitive reinforced Group edge culture Reinforce our Offer our clients position as Innovation the best usage of Software software & Of
Slide 32: …with the banking sector as a lever
…with the banking sector as a lever Sopra Group positioned as leader in this segment thanks to Our subsidiary Sopra Banking Software Our legacy positioning as an integrator Our international dimension Major ambitions in financial services Consulting Services Software 32
Slide 33: …and a new acquisition to be integrated
…and a new acquisition to be integrated Proposed acquisition of HR Access 900 people, mainly in France, Spain and Tunisia Highly-reputed product, at the leading edge of technology, installed in 54 countries 625 high-quality clients, including 50% of CAC 40 Strong strategic interest with nu
Slide 34: Sopra GMT, a commited reference shareholder
Sopra GMT, a commited reference shareholder In partnership with Sopra GMT, investment of the management team as shareholder Motivation and long-term commitment of key people Commitment for the Sopra 2015 Project, and beyond… 34
Slide 35: Objectives for 2013
Objectives for 2013 Organic growth for the financial year of between 2% and 5% Challenging first quarter -2 billable days compared with the previous year High comparison basis (organic growth Q1 2011: +4%) Given the proposed acquisition of HR Access Margin target: to be indicated in the
Slide 36: Forward-looking information
Forward-looking information This presentation contains forecasts in respect of which there are risks and uncertainties concerning the Group’s future growth and profitability. The Group highlights the fact that the signature of licence contracts, which often represent investments for clients, are m
Slide 37: Contacts
Contacts Investor relations team Kathleen Clark Bracco ( +33 (0) 1 40 67 29 61 Lima Abdellaoui ( +33 (0) 1 40 67 86 88 Arthur Carli ( +33 (0) 1 40 67 29 75 Sopra Group Financial communication 9 bis, rue de Presbourg 75116 Paris www.finance.sopragroup.com investors@sopragroup.com 37