Sopra Steria Group Sa · EURONEXT:SOP
Sopra Steria Group Sa — Sopra Group — FY2007 Earnings Presentation
40 slides from Sopra Steria Group Sa's earnings presentation, Feb 15, 2008
Slide 1: Presentation of the 2007 annual results
TALENTED TOGETHER Presentation of the 2007 annual results 15 February 2008 Annual results / 15 February 2008 1
Slide 2: Agenda
Agenda 2007 achievements Project 2003-2007 review 2008 business environment Project 2010 Annual results / 15 February 2008 2
Slide 3: 2007 achievements
TALENTED TOGETHER 2007 achievements Annual results / 15 February 2008 3
Slide 4: Revenue (€m)
Revenue (€m) 1,001.4 Growth: Year Q4 897.7 Total +11.6% +15.6% 43.9 Organic +9.4% +12.8% 41.0 Organic growth 2007 597.5 Management consulting +7.1% 537.9 SSI* France +10.9% SSI* Europe +4.4% Axway +12.0% 214.9 201.9 116.9 145.1 *SSI: Systems and Solutions Integration 2006 2007 Annual results / 15 Fe
Slide 5: Income statement
Income statement Full Year Full Year Change 2007 2006 (%) €m % €m % Revenue 1,001.4 897.7 + 11.6% Staff costs - Employees -647.9 -582.6 + 11.2% + 11.5% Staff costs - Contractors -80.7 -71.0 + 13.7% Operating expenses -167.4 -156.3 + 7.1% Depreciation and provisions -14.6 -12.8 + 14.1% Profit from re
Slide 6: Operating profit by division
Operating profit by division Full Year Full Year 2007 2006 PRO** PRO €m Revenue Revenue % margin % margin Group 1,001.4 90.8 897.7 75.0 9.1% 8.4% Consulting 43.9 4.5 41.0 4.0 10.3% 9.8% SSI* France 597.5 52.3 537.9 44.1 8.8% 8.2% SSI* Europe 214.9 19.5 201.9 15.1 9.1% 7.5% Axway 145.1 14.5 116.9 11.
Slide 7: Balance sheet
Balance sheet 31/12 31/12 €m 2007 2006 Goodwill 300.6 278.6 Other assets 38.2 37.6 Other assets and liabilities 40.3 -2.3 Assets 379.1 313.9 Equity (Group share) 248.8 216.2 Net debt 130.3 97.7 Capital invested 379.1 313.9 Annual results / 15 February 2008 7
Slide 8: Equity
Equity €m Position at 31 December 2006 216.2 Dividends - 15.5 Net profit - Group share 55.1 Capital increase through exercise of share options 4.7 Share-based payments 0.9 Actuarial differences - 5.0 Translation adjustments - 7.6 Position at 31 December 2007 248.8 Annual results / 15 February 2008 8
Slide 9: Change in net debt
Change in net debt €m 2007 2006 Net debt at opening (A) 97.7 128.7 Gross cash flow from operations before net financial 100.8 87.2 debt and tax Tax paid - 38.2 - 1.3 Changes in working capital requirements - 10.9 4.4 Net cash flow from operations 51.7 90.3 Capital expenditures - 13.8 - 13.1 Net fina
Slide 10: Financial ratios
Financial ratios 69% 52% 4.80 45% 2005 3.86 2006 3.25 2007 Basic earnings per Net debt / Equity share Annual results / 15 February 2008 10
Slide 11: Additional information on 2007
TALENTED TOGETHER Additional information on 2007 Annual results / 15 February 2008 11
Slide 12: Business sector and vertical market positioning
Business sector and vertical market positioning Group revenue by business sector (%) Group revenue by vertical market (%) Consulting Retail Fixed-price Banking Axway 4% 7% contracts Public Sector 6% 15% 24% 14% 16% Application 12% solutions 13% 6% Insurance 18% Staffing Telecoms 16% 30% 19% Services
Slide 13: Breakdown of 2007 growth
Breakdown of 2007 growth +12% +9% +16% +13% +12% +10% +11% +9% +7% +6% Total growth Organic growth Q1 Q2 Q3 Q4 Year 2006 rev 2007 rev Annual results / 15 February 2008 13
Slide 14: 2007 revenue by geographic segment
2007 revenue by geographic segment CSSI revenue* (%) Switzerland Italy Benelux Spain 5% 10% France United Kingdom Group revenue (%) 10% United States / Asia 75% 3% *CSSI: Consulting, Systems and Solutions Integration 30% Europe Axway revenue (%) excl. France Asia 67% France 2% United States 20% 42%
Slide 15: Axway: Focus on revenue
Axway: Focus on revenue Change in licence revenue (%) Revenue breakdown by type (%) +11% +44% +17% Services 36% 34% Licences 30% Maintenance 2004 2005 2006 2007(e) 2007 Annual results / 15 February 2008 15
Slide 16: Change in workforce (excluding contractors)
Change in workforce (excluding contractors) 11,320 9,910 9,100 7,580 6,550 6,750 excl. France France Group 3,740 3,160 2,550 December 2005 December 2006 December 2007 Annual results / 15 February 2008 16
Slide 17: 2007: An excellent year
2007: An excellent year High-quality performance In France, Paris and the regions Spain Italy Performance upturn For Orga Consultants In the United Kingdom Success of application solutions Success for Axway (despite the sub-prime crisis) Local acquisitions Annual results / 15 February 2008 17
Slide 18: 2007: A year of big investments
2007: A year of big investments Ongoing investments required for business transformation Tangible Intangible Nearshore / offshore Reinforcement of teams platforms HR Premises Operations department Tools Offerings department IT equipment Anticipation of recruitment needs, particularly for Consulting
Slide 19: Success of Project 2003-2007
TALENTED TOGETHER Success of Project 2003-2007 Annual results / 15 February 2008 19
Slide 20: Review of the project announced in 2003
Review of the project announced in 2003 2003 business environment Difficult S&S market and overall economic conditions Most IT services firms carry out major restructuring operations Reminder of Project 2007 Revenue of one billion euros Achieved Operating margin of 8% Exceeded from 2006 onwards Stro
Slide 21: Strong growth in revenue (€m)
Strong growth in revenue (€m) 1,001 Organic growth substantially 898 higher than the market average 757 +12% +9% 630 +19% +9% 525 +20% +20% +10% +13% Total growth Organic growth 2003 2004 2005 2006 2007 Annual results / 15 February 2008 21
Slide 22: Regular improvement in margins
Regular improvement in margins 9.1% 8.4% 7.4% 6.5% 6.1% 2003 2004 2005 2006 2007 Profit from recurring operations Operating profit Annual results / 15 February 2008 22
Slide 23: A strong integration capacity
A strong integration capacity Year Companies acquired by Sopra Group Country 2004 Inforsud Ingénierie France 2004 Valoris France, Spain, Belgium 2005 Newell & Budge UK, Ireland, India 2005 PROFit Spain 2007 Methosystem Italy 2007 Interface France 2007 Business Architects International Belgium 2008 C
Slide 24: Axway: a successful developer model
Axway: a successful developer model The Synchrony™ platform Strong development over 4 years coordinates the company’s internal and external exchanges 145 +24% State of the art technologies 117 +12% EAI, EDI, B2B, BAM, BPM, SOA, etc. +37% +16% 86 Vertical solutions 74 +15% Financial services +14% Pha
Slide 25: Market and priorities for 2008
TALENTED TOGETHER Market and priorities for 2008 Annual results / 15 February 2008 25
Slide 26: State of the market in 2008 (1/2)
State of the market in 2008 (1/2) Market still growing (6-7%) Growth more or less strong depending on the business Growth drivers Technology cycles Outsourcing Business combinations Annual results / 15 February 2008 26
Slide 27: State of the market in 2008 (2/2)
State of the market in 2008 (2/2) Every IT services company has made its own strategic choices Service lines - Offerings Economic sectors Geographic positions Business models are no longer comparable The big and mid-sized IT services companies are no longer directly comparable Annual results / 15 Fe
Slide 28: Sopra Group's business model
Sopra Group’s business model 4 big, separately identified divisions, with high-potential margins capitalizing on our current savoir-faire Axway Consulting 11% 15% Application Solutions Intégration Systems 12% Applicatives Solutions Integration de Systèmes & Application & 62% Outsourcing Applicatif A
Slide 29: Confirmation of our strategic choices
Confirmation of our strategic choices Vertical sectors Acceleration in Public Sector, Utilities and selected industrial groups (Top 3 in each sector) Geographic positioning Be one of the Top 3 in France Reinforce our presence in the European countries where we already have locations Targeted and/or
Slide 30: Pursuit of our major transformation programmes
Pursuit of our major transformation programmes Industrialisation Offerings, partnerships, major client accounts Banking solutions: a European ambition Axway: a global project Consulting: reinforce our positions European subsidiaries: amplify the successes Annual results / 15 February 2008 30
Slide 31: Industrialisation
Industrialisation Human resources Upgrade the production channels Support the transformation of our business sectors Methods, tools, processes and certification Take into account new needs Nearshore and offshore production platforms In France: 8 platforms Spain, Romania, Morocco, India Quality contr
Slide 32: Offerings, partnerships, major client accounts
Offerings, partnerships, major client accounts “Offerings” programme Anticipate and enhance the content of our services with value-added offerings “Partnerships” programme Manage our partners for their capacity to influence our clients directly or indirectly Exploit a significant additional source o
Slide 33: Banking solutions: a European ambition
Banking solutions: a European ambition Evolan banking solutions: rollout of a developer model Credit Payments Risks & Reporting Banking distribution Financial services: Sopra Group’s no. 1 economic sector Consulting Systems integration Proprietary solutions Outsourcing Annual results / 15 February 2
Slide 34: Axway: a global project
Axway: a global project Axway, a pure player with the Synchrony platform Software development Distribution Partnerships Continue excellent growth trajectory to reach revenue of €250m rapidly Desired acquisitions Annual results / 15 February 2008 34
Slide 35: Consulting: reinforcing our positions
Consulting: reinforcing our positions Drive Sopra Group towards more added value Strategic and management consulting offering Orga Consultants Consulting offering integrating business, solutions and technology dimensions Sopra’s Business Consulting activity Annual results / 15 February 2008 35
Slide 36: European subsidiaries: amplifying our successes
European subsidiaries: amplifying our successes Strong organic growth Cross-selling with France Proactive search for strategic acquisitions Local acquisitions Annual results / 15 February 2008 36
Slide 37: An ambitious project for 2010
TALENTED TOGETHER An ambitious project for 2010 Annual results / 15 February 2008 37
Slide 38: A new 2010 project: in a spirit of continuity
A new 2010 project: in a spirit of continuity Big ambitions for 2010 Double revenue in three years: 2 billion euros Rapidly reach an operating margin of 10% Make geographically-focused acquisitions to reinforce the current positioning Identify a major strategic acquisition Outlook for 2008 Organic g
Slide 39: Stock market performance 2007-2008
Stock market performance 2007-2008 Annual results / 15 February 2008 39
Slide 40: Presentation of the 2007 annual results
TALENTED TOGETHER Presentation of the 2007 annual results 15 February 2008 Annual results / 15 February 2008 40