Sopra Steria Group (SOP) Q3 2024 TU earnings summary

Executive summary

• Q3 2024 revenue reached EUR 1,356.9 million, up 0.9% year-over-year, with stable organic growth despite a weak IT market.

• Annual targets for organic growth, operating margin (at least 9.7%), and cash generation are confirmed.

• The disposal of Sopra Banking Software was finalized, collecting over EUR 410 million, clarifying focus on digital services, and strengthening the balance sheet.

• Recognized as a leader in cloud infrastructure and AI services, and received a sustainability award.

Financial highlights

• Q3 2024 revenue: EUR 1,356.9 million, total growth of 0.9% compared to Q3 2023, with organic growth stable year-over-year.

• France revenue was EUR 571.2 million, down organically by 1.2%.

• U.K. revenue was EUR 240.2 million, up 2.3% organically; Europe revenue was EUR 467.7 million, down 0.5% organically.

• Solutions unit revenue was EUR 77.8 million, up 3.9% organically; HR Solutions up 7.5%, Real Estate/Property Management down 2.7%.

• 9M 2024 revenue: EUR 4,306.3 million, up 2.9% reported and 0.2% organic growth.

Outlook and guidance

• Annual objectives for organic growth, cash generation, and operating margin (at least 9.7%) are reaffirmed.

• Free cash flow guidance around EUR 350 million for the year.

• Q4 is expected to see slight negative growth due to a high comparison base, especially in the U.K. and Solutions.

• No recovery expected in the IT market or aerospace sector before H2 2025.