Sopra Steria Group (SOP) CMD 2024 summary

Strategic vision and market positioning

• Aims to be a leading European consulting and digital services provider, targeting over €7 billion in revenue by 2028, with 60% of revenue from outside France and a balanced presence across five major European regions.

• Focuses on four strategic sectors: public sector, financial services, defense and security, and aeronautics, positioning as a credible alternative to global players with an emphasis on digital sovereignty and responsible technology.

• Plans to double the size of its consulting business to represent at least 12% of group revenue and increase digital services to at least 60% of revenue by 2028.

• Shifts from bespoke services to high value-added, industrialized offerings, embedding consulting, AI, cloud, and cybersecurity into solutions.

• Pursues a proactive acquisition policy, targeting around €1 billion in acquired revenue by 2028, focusing on medium-sized deals in key European geographies.

Transformation levers and operational model

• Implements transformation levers: industrialization of offerings, standardized operating model, HR modernization, and increased use of Gen AI for efficiency.

• Invests in training and upskilling, delivering 1.5 million hours of training, with a focus on developing internal leadership and increasing diversity.

• Enhances productivity through proprietary tools like the Digital Enablement Platform and AI agents for project management and consulting.

• Expands offshore capabilities, aiming to increase offshore workforce from 15% to 20% by 2028, primarily in India, Poland, and Spain.

• Consulting workforce to be expanded and upskilled, with a focus on AI and digital transformation expertise.

Financial guidance and capital allocation

• Targets revenue above €7 billion by 2028, with a CAGR of approximately 6% and organic growth of 2%-5% per year post-2025.

• Operating margin expected to reach 10%-11% by 2028, with consulting representing at least 12% and digital at least 60% of revenue.

• Free cash flow to represent 5%-7% of revenue, with ROCE of 20% by 2028 and a leverage ratio below 1.5x.

• Maintains a dividend payout ratio of 35% of net profit, with potential for share buybacks depending on operational performance.

• Acquisition policy focuses on medium-sized deals in Europe, prioritizing integration and value creation, with a clear exit from non-core software activities.