Half Year 2026 Sopra Steria Group SA Earnings Call Transcript
Key Points
- Sopra Steria Group SA (WBO:SOP) reported strong organic growth of 5.3% in Q2 2026, following a 4.4% increase in Q1.
- The company raised its annual growth target to between 2% and 2.5%, up from the previous range of 1% to 2%.
- There was significant growth in strategic verticals, with defense security space increasing by 14% and aerospace by 12%.
- The consulting business experienced its third consecutive quarter of growth, with an 11% increase driven by France, Germany, the UK, Spain, and Italy.
- Sopra Steria Group SA secured major contracts, including a framework agreement with the European Space Agency and a modernization contract with the UK's FCA.
- The Netherlands experienced a moderate contraction, although there is an outlook for improvement.
- Operating margin on business activity in France contracted due to higher use of subcontractors.
- The SFT program's wind-down is expected to have a more significant negative impact on growth in the second half of 2026.
- Free cash flow for the first half was negative at EUR143.6 million, although slightly better than the previous year.
- Restructuring and reorganization costs increased, reaching over EUR29 million, impacting the financial results.
Good morning, ladies and gentlemen. Welcome to this presentation of Sopra Steria's H1 2026 results. For the first part of the presentation, participants will be able to listen. (Operator Instructions) I hand the floor to Rajesh Krishnamurthy, CEO. Over to you.
Good morning, ladies and gentlemen. Welcome to this webcast to present Sopra Steria's H1 2026 results. I'll be leading this presentation with Etienne du Vignaux, Group CFO.
I'll start with a few comments on the highlights of the first half. Etienne du Vignaux will present the operational situation. In each of our reporting units and the details of the financial results over the first half. I'll then conclude with our priorities for the second half of the year and our annual financial targets.
We'll finish with a Q&A session. Let's start with the highlights of the first half.
Firstly, I'd like to drill down on the acceleration in business that we have recorded in Q2 with underlying organic growth of 5.3%,
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