Half year results 2019

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First-half 2019 performance in line with full-year targets

  • Revenue up 9.6% to €2,207.1 million. Organic growth of 7.4%,1 and 7.5% in Q2 2019
  • Operating margin on business activity of 6.8%, up 0.2 points from H1 2018
  • Net profit attributable to the Group of €60.9 million, up 58.8% from H1 2018
  • Improvement in free cash flow (outflow of €21.8 million vs. €77.3 million2 in H1 2018)
  • Full-year organic growth target lifted and other 2019 targets reiterated

Comments on H1 2019 activity

Strong business growth in the first half of 2019 powered a 9.6% increase in revenue. Changes in scope had a positive impact of €38.9 million, while currency fluctuations had almost no impact. At constant scope and exchange rates, revenue grew 7.4%. This performance reflects the effective positioning of Sopra Steria’s solutions in a market driven by clients’ digital transformation needs.

Operating margin on business activity came to €151.0 million, or a margin of 6.8%, up 0.2 points from its first-half 2018 level.

Sopra Steria pressed ahead with its strategy of raising the value of its offerings. To support this strategy, it invested in consulting, internal systems (DevOps platform on the Hybrid Cloud, Asset-based platforms), verticalisation of consulting and systems integration in France, and the Group’s brand platform. In addition, it sold a low-margin, non-core recruitment business in the United Kingdom.

Sopra Banking Software’s project was also strengthened in the first half. Two landmark deals were completed. The acquisition of French vendor SAB has significantly strengthened Sopra Banking Software’s position in France in core banking software, raising the prospect of product synergies being harnessed from the combined installed base, especially through digital offerings. The strategic partnership with seven Sparda Banken has unlocked greater potential for the Sopra Banking Platform product as it will underpin the transformation of their core banking system in Germany. This partnership will seek to attract additional banks, which will be able to join the common platform shared by these seven Sparda Banken. Moreover, the organisation, management and reporting of the specialised loans business were tightened up as part of a turnaround plan implemented in the first quarter. The plan is underpinned by the development during 2019 of a standardised version of the product. The aim is to bring this new version to market in the first quarter of 2020.