Full Year 2024 Sopra Steria Group SA Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Nicolas David - ODDO BHF - Analyst : A question on growth dynamics throughout the year. We've understood that the first half will be the low point, but can we have a bit more detail expected between the minus 5%, minus 6%. What will be the impact of the UK and the contract here and then also the calendar effect at a group level? And then what will growth be? And then could we have some information on the momentum for the rest of the year? What would be the midrange? What would be the scenario if we have a slight recovery with the UKVI? Do you have a concrete vision? Or do you not have a vision of the situation in terms of demand? And then the contract in the UK, there are two things I wanted to ask about UKVI. Is this all of the contract that has come to a close? Or is it just part of it? Is there a ramp down? Is there a ramp down in addition to what we've got currently? And then compared with your other contracts, which will enable you to renew growth, so NS&I, are there other contracts, multi-annual contracts that have already been signed? Or are you expecting contracts to be signed throughout the year? And then margins, the impact of tax on salaries. And then this comes out with a margin in the midrange. So that's not going up. So what about France? Is this just linked to utilization rates or has something stopped or has other impacts of prices or salaries?

Question: Nicolas David - ODDO BHF - Analyst : And what about the UK, the contracts? There's not just NS&I, there are others.

Question: Antonin Baudry - HSBC - Analyst : First question. In the long term, so 2025, we're seeing a contraction in business for the second year running. But what about the long-term effects? The market is a positive market, it's buoyant. And then at the end of the year, what can we expect for the exit rate Q4 2025? What type of growth can we expect in 2026? And then just one question, the 0.3 points on salaries. Is this a permanent impact?

Question: Antonin Baudry - HSBC - Analyst : Just the impact on margin for salaries, the 0.3%, Etienne?

Question: Emmanuel Parot - Gilbert Dupont - Analyst : Can we just come back to 2025 margin? So if I've understood, we've got the 30 basis points of the additional expenses. This will have an impact on margin, whereas your business is going down. So I wanted to know why you can sort of compensate for the drop in business. This impacts profitability, obviously. So that's my first question. My second is, could we have a reminder of the volume of contracts in the UK, so UKVI and then NS&I. And then finally, third question, could you help us in terms of the gap between EBITDA and everything that comes below this for 2025? Could we have some more information on financial expenses, restructuring, free shares? Could you just give us some more information?

Question: Emmanuel Parot - Gilbert Dupont - Analyst : Final question, please. You're saying that there are uncertainties in France, which is something we can understand. This is a general comment. But then if we look at your key accounts, I'd say or I think that some large accounts give you more visibility or more reassuring compared to other sectors where you have less visibility. Could you tell us more about this sectoral approach that you have in France?

Question: Laura Metayer - Morgan Stanley - Analyst : My first question is, what would you say about the impact of Gen AI on prices in the midterm and longer run? And question number two, back to your exit rate for Q4. I know that you have limited visibility, but could you give us more colors on that, the exit rate for Q4?

Question: Laura Metayer - Morgan Stanley - Analyst : I know you don't have much visibility during the second half of the year. But do you have any idea of a range or guidance you could give us for the growth that you could have in Q4?

Question: Laurent Daure - Kepler Cheuvreux. - Analyst : I have three questions to ask. First, can you tell us more about the aerospace business? You're saying that it's weak. Is it mainly due to Airbus? Or is it all the key players in this industry? And compared to the situation two or three months ago, when people were saying that it was more or less sequentially stable, is that confirmed? Or have you been disappointed recently? Second question, the large contracts, the visa contract was lost because it was reinsourced by the customers? Is that the reason? Or is it another bidder who won this contract? Or are there other such deals that you can renew in the months to come that could perhaps be a risk hovering on your outlook? And third question, the extra expenses that you've had connected to the UK and France. Can't we pass on this increase to the customers? Your assumption is that you will pay all these expenses and that will weigh on your margins?

Question: Laurent Daure - Kepler Cheuvreux. - Analyst : And do you have other contracts coming to their term in the UK? Is that a possible risk?

Question: Thomas Poutrieux - BNP Paribas - Analyst : I have a final question to ask about Airbus. Could you confirm EUR100 million, that's the decrease over one quarter. You said that during H2 2025, we could have an acceleration. Do you have more information so that you can say there's going to be an acceleration in 2025? And then Etienne mentioned a positive one-off in Germany to the tune of EUR45 million. Could you tell us more about this one-off item? And apart from the reversal you mentioned in 2025, what do you expect in terms of DSOs? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 7:30AM, SOPR.PA - Full Year 2024 Sopra Steria Group SA Earnings Call