Sopra Steria Group Sa · EURONEXT:SOP
Sopra Steria Group Sa — H1 2021 Earnings Presentation
45 slides from Sopra Steria Group Sa's earnings presentation, Jul 29, 2021
Slide 1: Presentation of H1 2021 results
Presentation of H1 2021 results PARIS, 29 JULY 2021
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: Agenda
Agenda 01 Return to H1 2019 level of business activity 02 Operating position by reporting unit at 30 June 2021 03 Financial results for H1 2021 04 2021 priorities and objectives 05 Q&A session 06 Annexes 3 Presentation of H1 2021 results – 29/07/2021
Slide 4: Return to H1 2019 level of business activity
01 Return to H1 2019 level of business activity Vincent Paris Chief Executive Officer 4 Presentation of H1 2021 results – 29/07/2021
Slide 5: Very active market, accelerating in the 2nd quarter
Very active market, accelerating in the 2nd quarter Digital transformation affecting all industries and all organisations Towards the platform enterprise model • Cloud migration of infrastructures and applications Powerful • Digitalisation & automation of processes growth drivers • Cybersecurity 5 P
Slide 6: Sales performance
Sales performance Major deals French financial institution 6 Presentation of H1 2021 results – 29/07/2021
Slide 7: Recovery in revenue in Q2 2021
Recovery in revenue in Q2 2021 Return to 2019 level of business activity Organic growth: +3.3 % -8.4 % -5.9 % -7.7 % -0.5 % +9.0 % 1,188 1,165 1,163 1,140 1,116 1,109 1,121 1,117 1,091 1,039 1,027 988 Q1 T1 Q2 T2 Q3 T3 Q4 T4 Q1 T1 Q2 T2 Q3 T3 Q4 T4 Q1 T1 Q2 T2 2019 2020 2021 Impact of changes in sco
Slide 8: Aeronautics sector improving despite being below its 2019 level
Aeronautics sector improving despite being below its 2019 level Return to growth in Q2 2021 Weekly change in global Change in revenue commercial air traffic in the aeronautics sector 900,000 800,000 Q1 2020 Q1 2020 +11% -26 % 700,000 -20% Q2 2020 600,000 500,000 -29% Q3 2020 400,000 -19% Q4 2020 300
Slide 9: Rebound in operating performance
Rebound in operating performance Return to 2019 margin level and continued improvement in free cash flow Operating margin on business activity (%) Free cash flow (€m) H1 2019 H1 2020 H1 2021 61.9(1) 7.2% 6.8% 6.1% 37.1(1) H1 2019 H1 2020 H1 2021 -21.8 (1) Including the favourable impact of €57m from
Slide 10: Reaffirming our ambitious corporate plan
Reaffirming our ambitious corporate plan Taking into account the post-Covid-19 environment Expanding European Organic growth …in services and worldwide in software External growth Independent Reference shareholder Employee shareholding Performance Added value Unique End-to-end approach
Slide 11: Progress made on medium-term trajectory
Progress made on medium-term trajectory New acceleration post-Covid crisis Digital Consulting Consulting Financial Financial services services Pickup in organic growth Governance reinforced to Expansion of the Digital and hiring accelerate synergies Expertise Centre Establishing the Continued develo
Slide 12: Operating position by reporting unit at 30 June 2021
02 Operating position by reporting unit at 30 June 2021 Vincent Paris Chief Executive Officer 12 Presentation of H1 2021 results – 29/07/2021
Slide 13: Key figures H1 2021
Key figures H1 2021 Revenue Operating profit on business Net profit attributable to the activity Group €2,328.3m €168.6m €85.1m +4.0% organic grow th* i.e. 7.2% of revenue vs €43.7m at 30 June 2020 Free cash flow Net financial debt Group workforce at 30/06/2021 €61.9m €422.7m 46,129 vs €37.1m in H1
Slide 14: Operating performance by reporting unit
Operating performance by reporting unit Operating profit on business Revenue activity H1 2020 Organic H1 2021 H1 2021 H1 2020 Restated* growth (€m) (% of Rev.) (% of Rev.) (€m) (%) France 914.8 914.4 + 0.0% 8.3% 8.2% United Kingdom 408.9 340.9 + 20.0% 8.7% 4.6% Other Europe 665.2 647.0 0 + 2.8% 0 6.
Slide 15: France
France Return to growth in Q2 2021 H1 2021 H1 2020 France (€m) (% of Rev.) (€m) (% of Rev.) Revenue 914.8 864.6 Organic growth (%) + 0.0% Operating profit on business activity 76.2 8.3% 70.8 8.2% Profit from recurring operations 73.2 8.0% 65.3 7.6% Operating profit 70.2 7.7% 58.6 6.8% Rebound in org
Slide 16: United Kingdom
United Kingdom Very strong growth in H1 2021, driven by the public sector H1 2021 H1 2020 United Kingdom (€m) (% of Rev.) (€m) (% of Rev.) Revenue 408.9 338.5 pact o S3 o d Organic growth (%) + 20.0% Operating profit on business activity 35.5 8.7% 15.5 4.6% Profit from recurring operations 29.8 7.3%
Slide 17: Other Europe
Other Europe Good momentum in most countries in the reporting unit H1 2021 H1 2020 Other Europe (€m) (% of Rev.) (€m) (% of Rev.) Revenue 665.2 638.8 Organic growth (%) + 2.8% Operating profit on business activity 42.3 6.4% 47.4 7.4% Profit from recurring operations 40.1 6.0% 45.2 7.1% Operating pro
Slide 18: Sopra Banking Software
Sopra Banking Software Recovery under way H1 2021 H1 2020 Sopra Banking Software (€m) (% of Rev.) (€m) (% of Rev.) Revenue 210.5 205.4 Organic growth (%) - 3.1% Operating profit on business activity 5.8 2.8% -6.7 -3.3% Profit from recurring operations -1.2 -0.6% -13.9 -6.8% Operating profit -0.6 -0.
Slide 19: Other Solutions
Other Solutions Rebound in growth in Q2 2021 H1 2021 H1 2020 Other Solutions (€m) (% of Rev.) (€m) (% of Rev.) Revenue 128.9 119.4 Organic growth (%) + 8.0% Operating profit on business activity 8.8 6.8% 5.9 5.0% Profit from recurring operations 8.3 6.4% 5.5 4.6% Operating profit 8.3 6.5% 5.3 4.5% R
Slide 20: Financial results for H1 2021
03 Financial results for H1 2021 Étienne du Vignaux Chief Financial Officer 20 Presentation of H1 2021 results – 29/07/2021
Slide 21: Income statement
Income statement H1 2021 H1 2021 H1 2021 H1 2020 H1 2020 (€m) (% of Rev.) (€m) (% of Rev.) Revenue 2,328.3 2,166.7 Organic growth 4.0% Operating profit on business activity 168.6 7.2% 132.8 6.1% Share-based payment expenses - 2.2 - 2.2 Amortisation of allocated intangible assets - 16.2 - 19.1 Profit
Slide 22: Other operating income and expenses
Other operating income and expenses H1 2021 H1 2021 H1 2020 (€m) (€m) Costs related to business combination - 0.2 - 0.5 Restructuring and reorganisation costs - 14.7 - 15.7 Other 5.7 - 7.5 Other operating income and expenses - 9.2 - 23.8 22 Presentation of H1 2021 results – 29/07/2021
Slide 23: Tax
Tax H1 2021 H1 2021 H1 2020 (€m) (€m) Profit before tax and share from equity-accounted companies 133.3 75.9 Effective tax charge - 44.6 - 23.7 Effective tax rate (%) 33.5% 31.2% Impact of the increased Expected 2021 tax rate in the UK effective tax rate: (19% -> 25%) ~30% Normative tax rate estimat
Slide 24: Net financial debt stable despite the dividend payment in H1 2021
Net financial debt stable despite the dividend payment in H1 2021 Structural improvement in free cash flow 425.6 -2.6 422.7 -43.6 €m -4.3 -8.5 +61.9 Net financial debt Free cash flow Changes in scope and Change in treasury Dividends Other Net financial debt at 31/12/2020 financial investments shares
Slide 25: Detail of movement in free cash flow (FCF)
Detail of movement in free cash flow (FCF) Improvement driven by the increase in EBITDA Including ~€60m in anticipated net cash +20.6 +3.7 receipts +10.5 +36.4 €m 61.9 -2.3 -44.1 37.1 Including the favourable impact of €57m from exceptional items Free cash flow Change in Change in CAPEX Tax Non-recu
Slide 26: Very solid financial position at 30/06/2021
Very solid financial position at 30/06/2021 Controlled debt ratios, diversified funding sources and comfortable liquidity 30/06/2021 30/06/2021 Net financial debt / Equity Amount Amount 26% used authorised (€m) (€m) Bond 250.0 250.0 Net financial debt / EBITDA Syndicated loan – Tranche A € 96.0 96.0
Slide 27: 2021 priorities and objectives
04 2021 priorities and objectives Vincent Paris Chief Executive Officer 27 Presentation of H1 2021 results – 29/07/2021
Slide 28: Key priorities for 2021
Key priorities for 2021 In a dynamic but volatile environment Human resources Recruitment Training Diversity Investments and acceleration of transformations under way Development of consulting activities Expansion of financial services Transformation of R&D Product plans External growth 28 Presentat
Slide 29: Full-year targets raised
Full-year targets raised Targets for financial year 2021 Organic revenue growth ≥ 6% (previously between 3% and 5%) Operating margin on business activity of between 7.7% and 8.0% (previously between 7.5% and 8.0%) Free cash flow of between €150m and €200m (previously around €150m) 29 Presentation of
Slide 30: Q&A session
05 Q&A session 30 Presentation of H1 2021 results – 29/07/2021
Slide 31: Annexes
06 Annexes 31 Presentation of H1 2021 results – 29/07/2021
Slide 32: Sopra Steria at 30/06/2021
Sopra Steria at 30/06/2021 A European leader in digital transformation Among the top 5 European digital services companies Among the top 10 operating in Europe 2020 revenue 46,000+ Operations in nearly End-to-end of €4.3bn employees 30 countries approach Revenue to 30/06/2021 2% 10% 15% 3% 24% 5% 31
Slide 33: Breakdown of Group revenue by country
Breakdown of Group revenue by country To 30/06/2021 SERVICES REVENUE – 30/06/2021 SOLUTIONS REVENUE – 30/06/2021 H1 2021 revenue Other Europe = €665m 13% o/w Germany = 31% o/w Scandinavia = 28% o/w SFT = 13% 33% o/w Spain = 12% o/w Benelux = 7% o/w Italy = 6% o/w Switzerland = 3% €1,989m €340m SERVI
Slide 34: Breakdown of Solutions revenue
Breakdown of Solutions revenue To 30/06/2021 SOLUTIONS REVENUE BY PRODUCT SOLUTIONS REVENUE BY BUSINESS LINE Sopra Banking Software 12% H1 2021 revenue = €210m o/w France = €89m 17% o/w outside France = €121m 8% €340m €340m SOLUTIONS SOLUTIONS 48% 26% 62% 27% Sopra Banking Software Integration Servi
Slide 35: Changes in exchange rates
Changes in exchange rates H1 2021 Changes in exchange rates Average rate Average rate Change For €1 / % H1 2021 H1 2020 (%) Pound sterling 0.8680 0.8746 + 0.8% Norwegian krone 10.1759 10.7324 + 5.5% Swedish krona 10.1308 10.6599 + 5.2% Danish krone 7.4368 7.4648 + 0.4% Swiss franc 1.0946 1.0642 - 2.
Slide 36: Change in revenue in H1 2021
Change in revenue in H1 2021 +89.4 2,328.3 Sodifrance = +€50.1m Fidor Solutions = +€12.1m +62.2 €m +10.0 2,166.7 Revenue Currency effect Scope effect Organic growth Revenue H1 2020 H1 2021 36 Presentation of H1 2021 results – 29/07/2021
Slide 37: Earnings per share
Earnings per share H1 2021 H1 2021 H1 2020 (€m) (€m) Net profit attributable to the Group (€m) 85.1 43.7 Weighted average number of shares in issue excluding treasury shares 20.25 20.23 Basic earnings per share (€) 4.20 2.16 Basic recurring earnings per share (€) 4.45 3.06 Theoretical weighted avera
Slide 38: Breakdown of change in net financial debt
Breakdown of change in net financial debt H1 2021 H1 2021 H1 2020 (€m) (€m) Operating profit on business activity 168.6 132.8 Depreciation, amortisation and provisions (excluding allocated intangible assets) 89.3 88.7 EBITDA 257.9 221.5 Non-cash items 2.8 3.2 Tax paid -32.8 -43.3 Change in operating
Slide 39: Simplified balance sheet
Simplified balance sheet 30/06/2021 30/06/2021 31/12/2020 (€m) (€m) Goodwill 1,877.1 1,843.2 Allocated intangible assets 147.8 161.5 Other fixed assets 226.1 241.1 Right-of-use assets 283.9 290.3 Equity-accounted investments 194.3 193.4 Fixed assets 2,729.2 2,729.6 Net deferred tax 102.9 0 113.4 0 T
Slide 40: UK pension fund deficit net of tax at 30/06/2021
UK pension fund deficit net of tax at 30/06/2021 149 Deficit net of tax (€m) 123 119 113 95 57 31/12/2018 30/06/2019 31/12/2019 30/06/2020 31/12/2020 30/06/2021 40 Presentation of H1 2021 results – 29/07/2021
Slide 41: Global workforce
Global workforce H1 2021 30/06/2021 30/06/2020 France 19,925 19,677 United Kingdom 6,675 6,741 Other Europe 11,011 10,807 Rest of the World 502 499 X-Shore 8,016 8,879 Total 46,129 46,603 41 Presentation of H1 2021 results – 29/07/2021
Slide 42: Ownership at 30/06/2021
Ownership at 30/06/2021 A reference shareholder backing the corporate plan Pasquier Odin Managers family family 3.4% 68.3% 28.3% Founders & Management Sopra GMT Shares managed on behalf Treasury shares Free float 2.7% 19.6% of employees Shareholders’ 6.1% 0.03% 71.6% agreement (8.1%) (58.0%) 22.3% (
Slide 43: Greater recognition from non-financial rating agencies
Greater recognition from non-financial rating agencies Confirmation of a continued rise in Sopra Steria’s ESG scores MSCI ESG RATINGS SUSTAINALYTICS RATINGS [CCC – AAA] AA Leader 75/100 AA Leader (7.4/10) 73/100 Leader A Average (7.3/10) 68/100 Outperformer 2020 2020 A Average (7.1/10) 64/100 Outper
Slide 44: Other Sopra Steria ESG rankings
Other Sopra Steria ESG rankings Awards in 2020–2021 Climate Change A-List Platinum medal for our Engagement Leader for our environmental sustainability in 2021, in the for engaging our suppliers in performance for the top 1% for the 3rd year relation to climate action 4th consecutive year running 2
Slide 45: 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 restated revenue for the same period in the prior financial year