At its meeting yesterday chaired by Pierre Pasquier, Sopra's (Paris:
SOP) Board of Directors approved its financial statements for first-half
2014. The Statutory Auditors conducted a limited review of the interim
consolidated financial statements.
1 Change calculated at constant exchange rates and group
structure.2 Operating profit on business activity
corresponds to profit from recurring operations before expenses related
to the bonus share allotment plan, stock options and amortisation
charges for allocated intangible assets.
Revenue for the first half of 2014 was €722.3 million, representing
total growth of 9.3% and organic growth of 4.5%. Following an excellent
first quarter, the Group maintained its strong start to the year,
recording revenue of €363.9 million for the second quarter, i.e. total
growth of 7.1% and organic growth of 4.7%.
Operating profit on business activity for the half-year period was €52.2
million, corresponding to a margin of 7.2%, a 100 basis point
improvement over the first half of 2013.
Profit from recurring operations was €48.4 million, representing a
margin of 6.7%, after €1.4 million in expenses relating to the bonus
share allotment plan (PAGA) and stock options, as well as amortisation
of allocated intangible assets in the amount of €2.4 million.
After other operating expenses, which came to €7.8 million in total, of
which €4.6 million were attributable to the tie-up with Steria and €3.2
million arising from restructuring, operating profit came to €40.6
million, representing a margin of 5.6% (first-half 2013: 9.6%). It
should be noted that in the first half of 2013, the Group recognised
negative goodwill with respect to the acquisition of HR Access. Without
that negative goodwill, last year's margin would have been 6.3%.
Net financial items came out to an expense of €4.6 million. Total tax
expense was €14.3 million.
The share of net profit from equity-accounted associates, corresponding
to Sopra's 25.61% shareholding in Axway, was €0.5 million.
Net profit was €22.2 million, representing a net margin of 3.1%.
Vincent Paris, Chief Executive Officer, commented: "Sopra turned in a
solid performance for this first part of the year, highlighted by growth
and improved profitability. The trust that our clients place in
us enables the Group to move forward and outperform in an economic
environment that remains very challenging. At this point in the
year, we are in a position to confirm all our annual targets."
Comments on business activity for Consulting & Services
In France, first-half revenue amounted to €393.3 million, representing
total growth of 3.2% and organic growth of 2.5%. Amidst a generally
lacklustre economic environment, the Group saw its pace of growth pick
up in the second quarter, buoyed by a high number of contracts renewed
with key accounts. While budgets changed only marginally, Sopra
generated growth by gaining market share. The public sector maintained
its wait-and-see attitude, but demand from the financial services and
manufacturing sectors was higher. Operating profit on business activity
came in at €32.7 million, representing a margin of 8.3% for the period,
compared with 7.5% in 2013.
In Europe, revenue was €129.9 million, representing total growth of 5.7%
and organic growth of 4.4%. Operating profit on business activity
totalled €2.7 million, representing a margin of 2.1% for first-half
2014, compared with 2.8% for the same period in the previous financial
year. In Spain, Belgium and Switzerland, growth and profitability came
in as hoped and the United Kingdom proved resilient, while adverse
economic conditions weighed on the performance of the Group's Italian
and German subsidiaries.
Comments on business activity for Solutions
Sopra Banking Software generated first-half revenue of €120.7 million,
representing total growth of 12.0% and organic growth of 1.6% for an
operating margin of 6.1% (€7.4 million). These results reflect a
strategy that reconciles, on the one hand, the investment effort needed
to bring the subsidiary's offering to the market and, on the other, its
target of double-digit profitability over the full year. While research
and development costs and the deployment of sales teams held back profit
margins in the first half of the year, a number of major projects
involving substantial licence sales at the end of the year should allow
the subsidiary to achieve its annual target of an operating margin of
The "Other Solutions" division, which combines revenue generated by the
Group's human resources and property management solutions, recorded
half-year revenue of €78.4 million, representing total growth of 59.0%
and organic growth of 22.3%. The margin of 12.0% validates the Group's
strategy, which was recently reflected in the acquisition of HR Access
Service (see press release dated 30 June 2014), aimed at
developing ancillary services to complement its solutions offerings.
Equity was €361.7 million. Net debt at 30 June 2014 was €197.3 million.
Net bank debt, which excludes the profit-sharing liability of €27.1
million, was €170.2 million. Consequently, the net debt to equity ratio
excluding employee profit sharing for the calculation of bank covenants
came to 47.0%.
The Group's financial position therefore remains excellent and its debt
is perfectly compliant with its banking covenants.
Today, Sopra is able to confirm the annual targets that were fixed
within the framework of its independent enterprise project, namely:
Offre Publique d'Échange (Public Exchange Offer) on
The proposed tie-up between Sopra and Groupe Steria is making good
progress: on 17 July 2014 the AMF confirmed the closing date for the
public exchange offer (set at 30 July 2014) following the European
Commission's decision on 14 July authorising the tie-up.
The shareholders of Groupe Steria have had, as of 26 June 2014 (opening
date of the public exchange offer), the opportunity to tender their
shares to the public exchange offer and thus to contribute to the
creation of a European leader in digital transformation.
Friday, 25 July 2014 at 15:30: presentation of the interim financial
statements at the Shangri-La Hotel in Paris.
Thursday, 30 October 2014 before market: publication of third-quarter
This press release has been disseminated for information purposes
only and does not constitute and should not be construed as constituting
an offer to acquire Steria or Sopra shares. The OPE is being carried out
exclusively in France and participation in the OPE is subject to legal
restrictions outside France. This press release is therefore not
intended to be disseminated in countries other than France and it is not
addressed, directly or indirectly, to persons subject to such
restrictions. Sopra and Steria disclaim all liability in the event of a
breach by any person of these legal restrictions applicable outside
This document is a free translation into English of the original
French press release. It is not a binding document. In the event of a
conflict in interpretation, reference should be made to the French
version, which is the authentic text.
3 Others countries: Germany, Belgium, Switzerland
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