Sopra Steria Group (SOP) H2 2024 earnings summary

Executive summary

• Revenue reached €5,776.8 million in 2024, down 0.5% organically, with operating margin on business activity rising to 9.8%, the highest since 2007.

• Net profit from continuing operations surged 68.4% to €309.3 million; total net profit attributable to the Group increased 36.6% to €251.0 million.

• Free cash flow was robust at €432.1 million (7.5% of revenue), and net financial debt was reduced by nearly 60% to €382.2 million.

• Strategic transformation included the sale of Sopra Banking Software, acquisitions, new business lines in Digital Platform Services and Cybersecurity, and a 32% increase in technology certifications.

• Major contract renewals and wins included Airbus (€1.5 billion over five years), French defense, Ministry of Justice, Gassco in Norway, and Metropolitan Police in the UK.

• AI adoption advanced with the rAIse program, full employee training, and a new partnership with Mistral to enhance GenAI offerings.

• Sustainability progress included a CDP 'A' rating for the eighth year and a 52.7% reduction in Scopes 1 & 2 emissions since 2019.

Financial highlights

• Revenue: €5,776.8 million, organic contraction of 0.5% year-over-year.

• Operating profit on business activity: €564.7 million (margin 9.8%, up 40 bps vs. 2023).

• Net profit from continuing operations: €318.2 million; group share €309.3 million, up 68.4%.

• Net profit attributable to the Group: €251.0 million, up 36.6%; basic EPS: €12.46, up 37.2%.

• Free cash flow: €432.1 million (7.5% of revenue), including a €45 million non-recurring positive in Germany.

• Net financial debt: €382.2 million, down nearly 60% from 2023; leverage ratio 0.61x EBITDA.

• Dividend: €4.65 per share; €150 million share buyback program (4.3% of share capital to be retired in 2025).

Outlook and guidance

• 2025 organic revenue growth targeted between -2.5% and +0.5%, with Q1 expected as the low point (-5% to -6%).

• Operating margin on business activity expected between 9.3% and 9.8%, impacted by 30 bps from higher social charges in France and UK.

• Free cash flow guidance: 5%-7% of revenue.

• 2026-2028 targets: organic growth 2%-5%, €1 billion external growth, operating margin 10%-11%, ROCE ~20%.