Sopra Steria Group (SOP) Q1 2025 TU earnings summary

Executive summary

• Q1 2025 revenue was EUR 1,415 million, down 4.7% year-over-year, slightly better than forecasted, with organic contraction of 4.9%.

• Challenging market conditions persisted, but performance was ahead of expectations and is projected to improve in Q2 2025.

• The aeronautics sector stabilized after previous declines, and the NS&I program in the U.K. began contributing from Q2.

• Six major SSCL contracts in the U.K. were renewed for three years, securing business until end-2028.

• Defense and security activities continued to develop well, with strong positioning in Europe and expedited efforts to leverage rearmament strategies.

Financial highlights

• Q1 2025 revenue: EUR 1,415 million vs. EUR 1,487.9 million in Q1 2024 (restated).

• Organic revenue contraction at constant scope and exchange rates was 4.9%.

• France: EUR 602.6 million revenue, down 4.9% organically, representing 43% of group business.

• U.K.: EUR 219.3 million revenue, down 10.8%, with public sector down and private sector up; new NS&I contract to boost Q2.

• Europe: EUR 512.1 million revenue, down 3.3% organically; Spain and Italy grew 5%-8%, while Germany and Benelux contracted.

Outlook and guidance

• 2025 annual targets for organic growth, operating margin, and free cash flow are confirmed.

• Organic revenue growth for 2025 expected between -2.5% and +0.5%.

• Operating margin on business activity targeted at 9.3% to 9.8%.

• Free cash flow expected between 5% and 7% of revenue.

• Margin and free cash flow expected to show greater seasonal variation, with stronger H2.