Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more details on the growth dynamics expected for 2025, particularly the impact of the UK and calendar effects? A: Cyril Malarge, CEO, explained that the first quarter will be the low point in terms of organic growth, with environmental factors in the UK and a high basis for comparison impacting results. The UKVI contract has ended, but the NS&I contract will start on April 1, 2025, which should help offset the impact. In France, a high basis of comparison with Airbus and a slow start in public administration projects are expected to improve in the second half of the year.
Q: What are the long-term growth prospects for Sopra Steria, and what can be expected for the exit rate in Q4 2025? A: Cyril Malarge, CEO, stated that while the market is expected to stabilize in 2025, long-term growth prospects remain positive due to new technologies like Gen AI driving transformation. Although visibility for 2026 is limited, the company expects to return to growth in the long term, with a plausible scenario of 3% to 5% growth.
Q: How will the additional social expenses in the UK and France impact margins, and can these costs be passed on to customers? A: Etienne du Vignaux, CFO, noted that the additional social expenses will directly impact margins, with half of the impact coming from France and half from the UK. While it is challenging to pass these costs directly to customers, the company is focusing on other areas to maintain profitability, such as business mix improvements and cost control.
Q: What is the status of the aerospace business, and how does it impact overall performance? A: Etienne du Vignaux, CFO, confirmed that the aerospace business, particularly with Airbus, remains stable with no recent changes. While other clients in the aerospace sector, like Dassault Aviation and Safran, show positive trends, they do not fully offset the impact of Airbus. The company has renewed important framework agreements with Airbus, ensuring continued collaboration.
Q: What is the impact of Gen AI on pricing, and what are the expectations for Q4 2025 growth? A: Etienne du Vignaux, CFO, mentioned that while Gen AI is leading to productivity gains, it has not yet significantly impacted pricing. The company expects Q4 2025 to benefit from a strong commercial pipeline and the ramp-up of the NS&I contract, providing confidence in improved performance during that quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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