Full Year 2024 Sopra Steria Group SA Earnings Call Transcript
Key Points
- Sopra Steria Group SA (SPSAF) reported a significant increase in net profit attributable to the group from continuing operations, up 68.4% to EUR309.3 million.
- The company achieved a strong free cash flow of EUR432 million, representing 7.5% of revenues.
- Operating margin on business activity improved to 9.8%, marking the best year since 2007 in terms of operating margin and cash generation.
- Sopra Steria Group SA (SPSAF) successfully renewed major contracts, including a EUR1.5 billion IT services agreement with Airbus and a EUR250 million contract with the French defense sector.
- The company launched a share buyback program worth EUR150 million, retiring 4.3% of its share capital, and declared a dividend of EUR4.65 per share.
- Revenue experienced an organic contraction of 0.5%, reflecting challenges in the market.
- The UK business faced specific quarterly factors impacting visibility, including the expiration of a significant contract and a delayed contract launch.
- The company anticipates unfavorable market conditions to continue into the first half of 2025, with a projected low point in Q1.
- Sopra Steria Group SA (SPSAF) faces increased social security contributions in the UK and France, impacting operating margins by 30 basis points in 2025.
- The aerospace sector, particularly with Airbus, showed a contraction, impacting overall growth and visibility.
(interpreted)
Good morning, ladies and gentlemen, and welcome to the Sopra Steria 2024 Annual Results Presentation for information, the conference will be recorded. (Operator Instructions)
I'll hand the floor to Cyril Malarge, CEO, to start the presentation.
Thank you. Good morning. Good morning, ladies and gentlemen. Welcome to this webcast for the Sopra Steria 2024 Annual Results Presentation. I will lead this conference with Etienne, who will present the details of the financial results for 2024. Then I'll conclude with midterm outlook and targets for the full year, and then I will finish with the Q&A session.
So let's start with the highlights of 2024. Firstly, our results were significantly up despite a wait-and-see market. Revenue held up well with an organic contraction of 0.5%. Operating margin on business activity was up at 9.8%, thus enabling us to hit our target set three years ago, so an ROA of roughly 10%.
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