Q1 2025 Sopra Steria Group SA Corporate Sales Call Transcript

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

Question: Nicolas David - ODDO BHF - Analyst : On Q1, I just want to understand what the momentum was when it came to discretionary business, this type of contract, so consulting, technical assistance in Q1. Have we seen a recovery month-on-month? Or have we seen any impact of the tariffs in the U.S. And I would like to think about what the exit point will be? And then for Q2, what are the implications here? We saw that consensus was down too. Are you confident with regards to your level? And then we've got another question on renewals, contract renewals in the U.K. Is this all of the contracts that we had this year, the contracts that were mentioned in the press release, what does this actually reflect? What are the 6 contracts? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 6:30AM, SOPR.PA - Q1 2025 Sopra Steria Group SA Corporate Sales Call Could we have a bit more information on volume or prices for these?

Question: Emmanuel Parot - Gilbert Dupont - Analyst : I've got 2 points. So the extension or the renewal of FSCL and the arrangements here, could you give us a little more color on the conditions that have been proposed in terms of price and then things like AI, is there any more information that we could flag here for the current year? And then next point on recruitment. There was a slight acceleration in the drop in headcount over the quarter, which regions are more specifically impacted here? Perhaps we could think about perspective outlook for the coming quarters, coming semesters.

Question: Emmanuel Parot - Gilbert Dupont - Analyst : You've spoken about the pipeline, which seems to be well filled up. How is this transforming into orders? Have you got the same mindset here when it comes to pipeline? Has anything -- is anything more difficult? Has anything changed?

Question: Thomas Poutrieux - BNP Paribas - Analyst : Just to start Scandinavia, you said at the start of the year was slower than last year, growth rate was different. What about your pipeline? Are there any contracts that you're going to be ramping up over the year, which will accelerate in the coming quarters? And then next, for attrition, attrition increased slightly when compared with previous quarters, around 10% versus Q4. Or what's explaining this? Is it the market environment that's tough? And then the last question on NS&I. Could you just help us give some more information about the contract ramp-up? Would it be reasonable to expect 2, 3 additional points in the U.K. in Q2 or potentially an acceleration in terms of its contribution to the semester?

Question: Laurent Daure - Kepler Cheuvreux - Analyst : Several points that I'd like to address. One question on Aeroline, the fact that it's stabilizing quarter-on-quarter in Q1. Do you have visibility for H2 already? Is it reasonable to make the assumption that the stabilization that we've seen over the previous quarters that's going to continue to stabilize into Q3? Next point, could you give us an update on the end of the integration of Ordina against the backdrop of a deteriorating Dutch market? And then the last point, could you share some information, discussions that we've had with major customers? What's the up shoot from these discussions that you've had with customers recently?

Question: Derric Marcon - Bernstein - Analyst : Two questions, first of which on momentum in the defense and security sector in Q1. If you -- could you just give us a reminder of the momentum here and what you see happening in the next quarters? And then the underlying impact that this might have the different contracts that we've seen for the Rafale jets. Is this going to have an impact on your business activity? And then the next question is on the U.K. If we restate for SSCL and then NS&I, we shouldn't be far off something that's slightly positive. Could we -- what's the outlook for the coming quarters? So if we take out the negative impact of the SSCL and NS&I, if we take out the impact of the basis for comparison, what's your basic outlook for the U.K.? And then my third question, so we've seen a sequential improvement in growth for Aeronautics, U.K., France. Can we just have a bit more information by country what you're expecting?

Question: Derric Marcon - Bernstein - Analyst : Can I just add a question on public sector in France. We've spoken about a catch-up in the rest -- over the rest of the year given the slow start and orders that were coming in slowly when the budget hadn't been finalized yet. Is this scenario something that we can consider still? Or things are we going to make up for delays in the start of the year in France, things are uncertain. Obviously, other countries, slightly different scenario here. But if we focus on France, could we think about this catch-up? Is this scenario possible?

Question: Aditya Buddhavarapu - Bank of America - Analyst : This is Aditya from Bank of America. A couple of questions from my side. Firstly, Q1 itself, as you said, was slightly better than your own outlook range. So could you just maybe touch on what drove that? Second, could you maybe just add some color on Germany and Benelux, those two markets were weak. How much of that was just broader market weakness versus maybe some specific issues that you're seeing? And then finally, if you could just also add some color on the -- on Spain and Italy, you're seeing continue to outperform. So what's driving that as well?

Question: Aditya Buddhavarapu - Bank of America - Analyst : Yes. The last question was on Spain and Italy. You said those were up 5% to 8%. So if you could just give any color on the performance in those markets and what's driving that?

Question: Aditya Buddhavarapu - Bank of America - Analyst : Understood. Maybe just one quick follow-up. Have you seen any update you can give on the generative AI strategy? Anything you're seeing from clients in terms of willingness to implement new projects there, any impact on, let's say, pricing, et cetera?

Question: Wolfgang Specht - Berenberg - Analyst : Two additional ones from my end. The first one on workforce and utilization. Can you give us some information? We've seen the lowering of workforce, but how is the current structure? Are there still, let's say, material capacity sitting on the bench? Or are most consultants and coders fully utilized? That's the first one. And the second one also on the pipeline. This time to Germany, we've seen a massive budget by the German government for investments, including IT investments. Is this something you will be, let's say, trying to capture? Or are the types of projects that are, let's say, scheduled there rather out of your scale or not suitable for your organization?

Question: Derric Marcon - Bernstein - Analyst : So sorry, just for the follow-up, a question on France now. I'm really focusing on this, but can we have momentum by sector? What's the momentum for improvement in growth? Obviously, we've seen Airbus the improvement there. And then next question on staff is well what about Gen AI, automation? Is there a correlation with revenue here? What's the situation here?