Sopra Steria - 2018 Registration document

DETAILED PRESENTATION OF SOPRA STERIA Recent investments and developments

4.3. Medium-term strategic objectives

For each vertical, the Group selects a small number of key accounts (fewer than 100 at Group level) and focuses on a few different business areas in which it aims to secure a leading position. End-to-end vertical offerings In order to achieve its leadership objective in its targeted verticals and business areas, the Group mobilises the development efforts of its various business activities and countries to build end-to-end value propositions as well as offerings of business solutions designed to address the business challenges faced by its major clients. As part of this approach, particular emphasis is placed on the financial services vertical, for which the Group offers comprehensive responses to productivity issues and the challenges brought about by “platformisation” in the core banking and specialist lending sectors. These responses are based on Sopra Banking Software’s industry- specific assets, the Group’s technology assets and its full range of services. 4.2.5. ACQUISITION STRATEGY The Group will continue to play an active role in market consolidation, in a targeted manner. Its approach will focus on three main areas: solutions (with the priority on banking solutions), consulting, and strengthening its position in certain geographies.

The Group has reaffirmed its strategy through its independent, value-creating corporate plan based on expansion, added value and differentiation, particularly through its software business. With this in mind, and with the market being driven by digital transformation, Sopra Steria is confident in its ability to steadily and continually improve its performance. The Group is targeting annual organic revenue growth of between 4% and 6%, an operating margin on business activity of around 10%, and free cash flow of between 5% and 7% of revenue. With respect to the 2019 financial year, the Group’s targets are:

p organic revenue growth of between 4% and 6%;

p slight improvement in operating margin on business activity;

p free cash flow in excess of €150 million.

5. Recent investments and developments

5.1. Investments during the year

d. O.R. System On 4 April 2018, Sopra Banking Software completed the acquisition of O.R. System, the developer of a counterparty risk management solution for the banking sector and financial institutions. The company has been consolidated within Sopra Steria since the second quarter of 2018. 5.1.2. INFRASTRUCTURE AND TECHNICAL FACILITIES A total of €52.2 million was invested in 2018 in infrastructure and

5.1.1. ACQUISITIONS IN 2018 During 2018, the Sopra Steria Group announced the following acquisitions: a. Apak On 18 October 2018, through its subsidiary Sopra Banking Software, Sopra Steria acquired 100% of Apak, which develops specialised lending solutions for car loans and asset finance. Apak has been consolidated in Sopra Steria’s consolidated financial statements since October 2018. b. it-economics On 6 July 2018, Sopra Steria announced that it had finalised the acquisition of it-economics, a German digital consulting firm, on 5 July 2018. The planned acquisition had first been announced in a press release on 15 May 2018. it-economics has been consolidated within Sopra Steria since 5 July 2018. c. BLUECARAT On 4 May 2018, Sopra Steria announced that it had finalised its acquisition of BLUECARAT, a German IT services company, on 3 May 2018. The planned acquisition had first been announced in a press release on 8 January 2018. BLUECARAT has been consolidated within Sopra Steria since May 2018.

technical facilities, as against €44.5 million in 2017. Investments in facilities comprised the following:

p land and buildings: €2.1 million; p fixtures and fittings: €28.6 million; p IT equipment: €21.5 million.

5.1.3. RECENT DEVELOPMENTS On 10 April 2019, Sopra Steria announced its plans to acquire SAB – a French core banking developer that generated €64.4 million in revenue in 2018 – to bolster Sopra Banking Software’s strategy. This proposed acquisition is subject to customary closing conditions. 5.1.4. RATINGS GIVEN TO THE COMPANY BY CREDIT RATING AGENCIES The Company is not rated by any financial rating agencies.



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