Sopra Steria - 2019 Universal registration document



Risk description

Risk management

The risk of the loss of a client or a major contract remains a potential risk, particularly in view of rapid changes in the Group’s markets and possible consolidation within the various sectors. The loss of a client leads to the loss of the associated revenue and requires the reassignment of the project teams in place, a risk all the more difficult to manage if the loss of the client was not able to be predicted. In 2019, the Group’s top client accounted for 7.3% of revenue, the top five clients represented 19% and the top ten contributed 28%. Main clients include: in France: Airbus Group, Banque Postale, BNP Paribas, CNAM, p Crédit Agricole, EDF, Engie, Ministry of the Economy and Finance, Ministry of Defence, Société Générale; in the United Kingdom: Metropolitan Police, Ministry of Justice, p Home Office, Ministry of Defence and National Health Service.

The Group’s policy is to maintain a multi-client and multi-sector portfolio across multiple geographical operations and sites, in particular to avoid any uncontrolled concentration risk. The Group’s largest client is also a client across multiple business lines and geographical operations and the revenue generated with this client is based on a large number of contracts. The Group’s policy and strategy relating to key accounts are reviewed each year in accordance with country, business line and sector-specific strategic reviews in order to adapt this strategy to market developments. This is the object of a dedicated exercise with all concerned parties. A regular review at monthly steering committee meetings is also organised within the Group.


Risk description

Risk management

Major uncertainties remain concerning the terms of the United Kingdom’s departure from the European Union. Against this backdrop, the effects remain uncertain. Brexit could have an unfavourable impact on the economy and market conditions, as well as an impact in terms of instability on the financial markets and international forex markets. In addition, Brexit may result in legal uncertainties and have associated effects such as certain decisions being delayed while awaiting greater visibility. The most significant risks seem to involve political disturbances and uncertainties and macroeconomic impacts. Each of these effects, as well as others that are not yet known and cannot be anticipated, could have an unfavourable impact on the Group’s activities, performance and financial position. The Group’s operations in the United Kingdom contributed close to 19% of its 2019 revenue. It should be noted that although the Group may appear to be exposed to the increased volatility of euro and sterling exchange rates, which could have an impact in the consolidated financial statements of transactions carried out in the United Kingdom, the Group’s exposure to foreign exchange transaction risk seems limited insofar as its activities are conducted primarily by subsidiaries that operate in their own country and their own currency.

With respect to Brexit, Sopra Steria’s management in the United Kingdom and the Group’s Executive Committee are keeping a close eye on any political decisions made by the United Kingdom or the European Union in this area so as to take any requisite measures to reduce risk. Sopra Steria has set up a Brexit working group. This working group tracks and manages the potential risks identified in the following areas: human resources; financial, tax, legal, regulatory and IT systems; and data security. This involves an analysis by segment of Brexit’s implications for client requirements. Mitigation measures continued to be reviewed, including communications campaigns, and verifications of certain key suppliers, particularly with regard to the hosting of data and data flows. This subject and its developments are being addressed in regular exchanges with clients in the United Kingdom. The Group has not identified any logistics risk of service interruption. In fact, more than two-thirds of business activities in sales, services and solutions are recurring in nature, the majority of clients are local, and both resources and organisations remain local, with the exception of the service centre in India, whose activity is not affected by Brexit.



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