Preliminary Q2 2024 Sopra Steria Group SA Earnings Call Transcript

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

Question: Laurent Daure - Kepler Cheuvreux - Analyst : Good evening, gentlemen. Two questions. First question is on the UK contract. It's not the first time we've had a delay on the ramp-up of a contract. Back in the day, I understood it was linked to the previous service provider. Are we sure that in 2025, this contract is indeed going to start, and is the customer committed alongside you? So that's question number one. And the second question I have is on changes in business in the second half. Obviously, we're well aware of the factors in France and with Airbus. But we have other favorable impacts as well. Is your assumption that the French market is deteriorating structurally for six months given the impact of the elections, or is there something else in other regions which is the basis for this change?

Question: Laurent Daure - Kepler Cheuvreux - Analyst : And then the other regions, are there any concerns? Are there any temporary concerns in other regions?

Question: Emmanuel Parot - Gilbert Dupont - Analyst : Good evening. I've got several questions. Could you give us a reminder of the correlation with Airbus production and then order intake for you? Could you give us a reminder of the mechanics here? The second question, what enables you to uphold this operating margin rate when you've got less growth, how have you compensated for this and then with defense and how that impacted margin?

Question: Antonin Baudry - HSBC - Analyst : Good evening, gentlemen. Just a new question on the new growth target. What is this based on? Why do you know that this new guidance is achievable? And why you got this level of confidence with regards to obtaining this target in the future? And then obviously, you've spoken about 2025, if we finish Q4 flat, what's the outlook for 2025 at this stage?

Question: Derric Marcon - BERNSTEIN - Analyst : So several questions. The first is which is, could you quantify when we look at the forecast for an acceleration in growth in revenues that you've got for H2 compared with H1. So there was a 4% percentage difference here. Can you quantify the impact that Airbus could have -- quantify the impact of less business with Airbus on this target to accelerate growth in the second half? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 18, 2024 / 4:30PM, SOPR.PA - Preliminary Q2 2024 Sopra Steria Group SA Earnings Call Second question is on potential deals that have been postponed or which haven't started in Q2 or even Q3. And what are the impacts to your forecast for Q4? Are there some deals that wouldn't have been signed in Q3 that you'll get before the end of the year, the end of 2024? So what the outlook for Q4 besides from the prepayment of the contract in the UK? And then the last question is on France. Obviously, we know that the climate is difficult. But when we look sector by sector, we're seeing, obviously, impacts in the public sector. If this is not the case, what are the other sectors where you've got a significant amount of activity?

Question: Derric Marcon - BERNSTEIN - Analyst : So Etienne, can you give us the three blocks, 25% aero, 25% UK and --

Question: Nicolas David - Oddo Securities - Analyst : Hello, Cyril. Hello, Etienne. Two questions. Can you give us the revenue for SBS that was classified as activities held for sale? And are you confirming the EUR340 million annually? That's my first question. And then we haven't had that many comments on free cash flow, where you are at in the first half and what's your guidance for the full year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 18, 2024 / 4:30PM, SOPR.PA - Preliminary Q2 2024 Sopra Steria Group SA Earnings Call

Question: Nicolas David - Oddo Securities - Analyst : Anything new that we need to bear in mind? Any qualitative information on the free cash flow?

Question: Nicolas David - Oddo Securities - Analyst : Last question. We haven't spoken about the Benelux and Ordina and Tobania. What can you say about the first half? Has there been any postponements in this business? Are these regions that are holding up well?

Question: Nicolas David - Oddo Securities - Analyst : Okay. And then free cash flow. Is this linked to a problem with data?

Question: Nicolas David - Oddo Securities - Analyst : So we'll wait for that next Wednesday then. Okay. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 18, 2024 / 4:30PM, SOPR.PA - Preliminary Q2 2024 Sopra Steria Group SA Earnings Call

Question: Wolfgang Specht - Joh Berenberg Gossler & Co KG - Analyst : Hello, good afternoon. Can you shed some more light on at least 9.7% operating profit margin or margin of operating activities? Is this including or excluding the contribution from the SBS assets?

Question: Wolfgang Specht - Joh Berenberg Gossler & Co KG - Analyst : Okay. So your organic guidance is also falling a little bit on this level.

Question: Wolfgang Specht - Joh Berenberg Gossler & Co KG - Analyst : That means that the underlying guidance, which used to be 9.5% to 10% is also somewhat weakened because you're now excluding the contribution of SBS.

Question: Derric Marcon - BERNSTEIN - Analyst : Sorry to come back, I forgot two little questions. The usage rate, could you give us a night deal or a few qualitative comments on usage rate in the different quarters and then the postponement of the project start. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 18, 2024 / 4:30PM, SOPR.PA - Preliminary Q2 2024 Sopra Steria Group SA Earnings Call And then the two, we haven't working about the UK. Six months ago, you were quite confident with regards to the UK pipeline, major contracts. Is this still the case? Is your vision of H2, has it been impacted by anything? Has this changed your forecast for the UK?