Sopra Steria Group (SOP) H1 2024 earnings summary

Executive summary

• H1 2024 revenue reached €2,949.4m, up 3.8% year-over-year, with organic growth of 0.3% despite a challenging market and strategic refocusing.

• Operating margin on business activity improved to 9.7%, up 0.9 pts from H1 2023, reflecting transformation, cost control, and a shift toward higher value-added services.

• Net profit from continuing operations attributable to the Group rose 50.5% to €169.3m (5.7% of revenue); total net profit attributable to the Group was €123.2m, up 9.5%.

• Free cash flow was €44.0m, impacted by working capital requirements and delayed tax credit collection.

• Sale of Sopra Banking Software to Axway to be finalized in early September, with related carve-out and reclassification as discontinued operations.

Financial highlights

• Revenue: €2,949.4m (+3.8% year-over-year); organic growth 0.3% after restatements.

• Operating profit on business activity: €285.3m (9.7% margin, +0.9 pts year-over-year).

• Net profit from continuing operations: €169.3m (5.7% of revenue); net profit attributable to Group: €123.2m (4.2% of revenue).

• Free cash flow: €44.0m; would have been higher excluding delayed tax credits.

• Net financial debt: €1,057.0m, gearing at 53%, net debt/EBITDA at 1.6x.

Outlook and guidance

• Full-year 2024 targets: organic revenue stable, operating margin on business activity at least 9.7%, free cash flow around €350m.

• Group operating margin expected close to 10% for the year; margin improvement to continue midterm.

• Estimated tax rate for 2024 at around 23%.

• H2 priorities: profitability, cost control, integration management, and expansion in consulting and AI.