Sopra Steria Group (SOP) H1 2024 TU earnings summary

Executive summary

• External factors in June led to a revision of 2024 revenue guidance, with organic growth now expected to be stable versus the previous +2%-4% target.

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

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

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

Financial highlights

• Preliminary H1 2024 unaudited revenue: €2,949.4 million, with organic growth of 0.3% and total growth of 3.8%.

• H1 2024 operating margin on business activity estimated at 9.7%, up 0.9 percentage points year-over-year.

• Net margin for continuing activities in H1 2024 is about 5.5%, compared to 4.3% in H1 2023.

Outlook and guidance

• 2024 organic revenue growth target revised to stable; previous guidance was +2%-4%.

• Operating margin target for 2024 confirmed at at least 9.7%, with a goal close to 10%.

• Sale of Sopra Banking Software (SBS) expected to be finalized before September 2024.

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