Sopra Steria Group Un/Adr

Good morning, ladies and gentlemen, and welcome to this Soprasteria H1 2025 results announcement. All participants will be able to listen only, and there'll be a Q&A session at the end of the presentation. For your information, the conference is recorded. I will now hand the floor to Cyril Malaget, CEO. Over to you.

Thank you very much.

Good morning, ladies and gentlemen, and welcome to this webcast presenting the H1 2025 results. I'll be leading this presentation with Etienne Duvigneaux, Group CFO. I'll start by talking about the highlights of H1, then the operating position by reporting units. Etienne will present the details of the financial results. I'll conclude with our priorities for the second half of the year and our financial targets, our annual financial targets, and then we'll finish with a Q&A session. So, let's start with the key figures of the half year. Against a backdrop which we anticipated to be difficult, we held up well. The revenue was 2,843,000,000. so an organic contraction of 3.8%. Operating margin on business activity held up well and was 9.2%, a limited decrease of 0.5% compared with H1 in 2024. Net profit attributable to the group was up 15.3% and stood at 142 million euros. Net margin was up 0.8% when compared with H1 2024, to hit 5% of revenue. Net earnings per share were 7.29 euros, so an increase of 19.2%. The traditional seasonal effect in free cash flow was significant, and the free cash flow stood at a negative amount for this first half of the year. It was minus 145.9 million euros. The EBITDA leverage ratio was at 1.63 at the same time last year and stood at 1.17 this year. So let's just go over change in revenues. Obviously, the highlight was the confirmation that the first quarter represented a low point for 2025 as we announced at the start of the year. When we started the year, we anticipated the first quarter with negative growth of 5% to 6%. We did slightly better with a negative growth limited to 4.9%. In Q2, we saw an improvement with a level of negative growth at 2.7%. Aerospace stabilized since the fourth quarter of last year. we can consider that we'll return to a positive trend throughout the second half of the year. In the United Kingdom, the NS&I contract started on the 1st of April under good conditions, so this has contributed to an improvement in trends in Q2. We've also observed in France, after a very slow start to the year, we're seeing that things are returning to normal with orders coming in from the public sector and defense, and commercial activity has been buoyant in May and June, in various European countries. So based on this, we think the trends will continue to improve in the second half, and we should see a return to slight growth in revenue, and that's credible for Q4. So I've just mentioned buoyant commercial activity in the second half. We've had some good commercial success, so I'll talk about a couple of them. In Norway, for StatNet, for an oil company, and then for Equinor as well, we've won two framework agreements, so for application management for StatNet and then covering all activity for Equinor. for up to 250 euros per year. And then in Switzerland, we were chosen by the Swiss Railways. This is part of the list of suppliers. So we're registered for the next five years. So there's good development potential here. In the UK, five new customers in the Devon region have joined the NHS platform for a total value of 58 million pounds. For SSCL, six government departments have extended their contracts for three contracts. So that's for a value of around 300 million. In France, I just wanted to mention that we've won a service center. So for the SNCF passengers app, that's worth over 200 million euros over eight years. Good consulting assignment for the home office as well. Project commissioning support assignment as well. for the new portal aiming at digitalizing administrative procedures. So good success, which is going to feed into the second half and then beyond. So for the first half, we saw that there were market factors that are potentially going to underpin future trends. We've seen greater uncertainty, but also opportunities. So in the domain linked to sovereignty, and then also defense and security. Against this backdrop, Soprasteria has got a profile and a positioning that is highly favorable, concentrating on digital services with a level of recurring revenue almost 40%, European presence spread out over the different countries, activity concentrated on strategic verticals, public sector, 26% of revenues, aeronautics-based defense and security, 22% of revenues, and then financial services representing 20% of the group's revenues. And these three verticals alone represent 68% of the group revenue. Now, if we focus on defense, security, and space, In 2024, we did over $1 billion in turnover, and we're a highly legitimate partner on sovereignty and cybersecurity challenges in Europe. So I'd like to suggest that we just spend a couple of minutes talking about defense and sovereignty. So in defense, thanks to our longstanding position in this domain and then the recent acquisition of CS Group, Soprasteria is today one of the top 10 leaders in the DITB, so the industrial base. and then also a major member of the European EDITB, so supporting industrial players in defense and digital security. We work for ministries of defense, justice, and homeland securities in seven major European countries, We also work for NATO and the European Commission, and this represents over 4,000 experts specializing in this sector. So our business is focused on business solutions, critical solutions, which represent the specific challenges in this sector, so command and control, cyber defense, security, maintenance public security or then counter drone technology as well as information warfare we've also used our solutions to secure the last world cup in france but also the olympic games in paris 2024 and the efficiency was recognized by the army but also the police department and this is meant that we've won lois and orders for additional systems from the French DGA and KNDS. We're also an industrial partner, a preferred industrial partner for major industrial players, so like Airbus Defence and Space, Thales, Safran, Dassault Aviation, or even Naval Group. We're developing in the space sector as well, a sector that is coming increasingly close to defense priorities with customers like the ESA or the CNES. And then in the U.K., we also work back office for finance and HR processes, so back office support for major government departments, so defense departments. and the police departments as well. So you've understood that Soprissaria is well positioned to benefit from the increasing investments in Europe in defense. Beyond defense priorities, the geopolitical situation, increasing conflicts, the ramp-up of these imperialist inclinations means that sovereignty is becoming a priority in Europe. Confidence is changing. It's not just limited to data security. It's also resilience, and technological mastery. So it's becoming critical to ensure continuity for models and for activities, so managing technological dependencies in terms of infrastructure and software, protecting data. It means keeping the mastery of decisions through choice of algorithm as well, but also prevent cyber risks. So we're seeing there are new needs. for mission-critical operators, but for all organizations where it's critical to have a plan to be able to switch to trusted alternatives and to be able to reduce technological dependencies. So Soprasteria is highly legitimate on these matters. We are an independent group. Our strategy is developed in Europe for Europe. We have... expertise and the right solutions, things like hosting sensitive data, infrastructure for the Secnum Cloud. We've got sovereign solutions, integration of technologies in Europe, and then also in consulting and support for digital autonomy. We have got an active role in European initiatives. I can talk about Gaia-X, EUCS, Cyber Compass, and others. We've also got targeted partnerships, so with OVHcloud, Mistral, 3DS, OutScale, Candela. And then we've already got references, significant references in cloud solutions, AI, so counter drone, secure logistics chains as well, or even digital twins. And you've understood the way our offering are positioned with our expertise and our experts to support sovereignty priorities. And this is something that will set us out in the future. coming years. Now, when it comes to highlights for the first half, I also want to highlight the maturing of AI. Having trained all of our employees in 2024, we're carrying on in 2025 with new modules, and AI is becoming a tool to manage employee knowledge, and we've almost made this switch. We've got AI solutions for consultants with Cedric and then for business analysts with Maya. Project managers are using Heidi and then project developers are using DEP. And then for anticipating project warnings, we've got the Andy assistant as well. And these assistants are increasingly used. So this maturity... is obviously measured against the yardstick of AI standards, so using smaller, more frugal models and then seeking out case uses use cases that help to decarbonize a society. But it's also AI is also maturing with our customers and our revenue has changed. We've moved from producing pox to seeking out use cases at scale. So there are two key trends here. We've seen the rollout at scale for some key use cases. So contracts for a major financial services player in France. so managing customer complaints, or we're also working with DHL in Italy. And then we've seen projects being launched with a global overall AI strategy, which is transformative for the future. So one of our major customers is the Norwegian, the Sovereign Fund with a new AI governance, or then we've also got AB Dynamics as well. So that's for vehicles using AI in their solutions. We've also got strategic partnerships with Mistral and that's become operational now. Over 50 experts have been trained on Mistral technology. We're working on about 10 industrial projects with our major customers in several different countries. We've got a value proposition which we share and which is highly effective on our market. and it's based on our capacity to adapt LLMs to our customers' specific needs. Now I'd like to suggest that we move on to the operating position by reporting unit. Let's start with France. Revenue was down 3.7% on an organic basis and stood at 1,207,000,000. The second quarter saw an improvement, minus 2.4%, that was compared with Q1 at minus 4.9%. This change isn't explained by situations that are returning to normal in the public sector and defense. after a very slow start to the year. Energy in telcos also improved and the other verticals contracted. Operating margin on business activity was 9.2% compared with 9.5% in H1 2024. And this is also above the level it stood at in H2 2024 at 8.5%. Now for the UK. Revenue stood at 456.2 million euros, so an organic contraction of 7.7%. As planned, the second quarter stood at minus 4.7. This was marked by a significant easing in the contraction when compared with the first quarter, which stood at minus 10.8%. NS&I got off to a good start under good conditions. The NHS SBS platform recorded significant increase in its activity, and then SSCL had less unfavorable base effects when compared with the same time last year, and a return to organic growth in revenue is expected at the end of H1. Operating on margin on business activity was 9.5% compared with 11.6%, H1 2024. Now, if we move on to Europe, revenue stood at 1 billion and 15.2 million euros. So at constant scope and exchange rates, that was an organic contraction of 3.1%. Second quarter was at minus 3, slightly better than Q1 at minus 3.3%. positive organic growth in Spain, Italy, and Scandinavia, and the other geographies experience a contraction in their business. Most of the reporting units saw reduced profitability, but the operating margin on business activity stood at 8.1 compared with 9.3 in H1 2024. Now, let's move on to solutions. Solutions recorded revenue of €164.4 million, organic growth of 2.6%. The human resources solutions business, which represents two-thirds of the activity in this reporting unit, was at 2.7% growth. Operating margin on business activity was up clearly at 15.2% compared with the 7.6% from H1 2024. All the business in this reporting unit contributed to the improvement. Now I'll hand the floor to Etienne who will go over the financial results.