Sopra Steria Group (SOP) H1 2024 TU earnings summary

Executive summary

• External factors in June led to a revision of 2024 revenue guidance, now expecting stable organic revenue versus prior +2%-4% growth target.

• Preliminary H1 2024 results show operating margin in line with expectations, but organic revenue growth below target due to external headwinds.

• Decision delays in France, aerospace sector challenges, and a UK contract postponement are key drivers of the revised outlook.

• Operational transformation and cost optimization measures are supporting margin resilience.

Financial highlights

• Preliminary H1 2024 unaudited revenue: €2,949.4 million; organic growth of 0.3% year-over-year; total growth of 3.8%.

• H1 2024 operating margin on business activity: 9.7%, up 0.9 percentage points from H1 2023.

• Net margin for continuing activities in H1: over 5.5%, up from 4.3% in H1 2023.

• Full-year net margin for continuing activities estimated at 3.2%.

Outlook and guidance

• 2024 organic revenue expected to be stable; previous guidance was +2%-4%.

• Operating margin target for 2024 confirmed at at least 9.7%, excluding Sopra Banking Software (SBS).

• Sale of SBS expected to be finalized before September 2024.

• 2025 outlook supported by ramp-up of UK contracts and continued growth in Europe and solutions.