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Sopra Steria fell back in the first quarter of FY 2025 buffeted by “challenging market conditions”, with revenue of €1,415m representing a -4.7% decline year-on-year. The organic contraction of -4.9% came in slightly better than the forecasted range of between -5% to -6%.
The European IT services provider faced headwinds across its different regions. France, their largest market at 43% of revenue, contracted by -4.9% amid political instability and delayed public sector decisions. The UK segment experienced a more pronounced -10.8% decline, though this was anticipated due to a high comparison base and contract timing issues. The Europe reporting unit posted a -3.3% organic contraction, with Spain and Italy showing encouraging growth of 5-8%, offsetting weakness in Scandinavia, Germany and Benelux.
CEO Cyril Malargé highlighted several positive developments. The aeronautics sector has stabilised since Q4 2024, while the NS&I programme in the UK (see NS&I proves a happy hunting ground for Sopra Steria), started on at the beginning of April, should boost Q2 performance. Additionally, six major SSCL platform contracts were extended last week for £300m over three years, securing business through 2028.
Looking ahead, Sopra Steria expects the negative growth trend to ease in Q2 2025 and has confirmed its full-year targets of between -2.5% to +0.5% organic growth and an operating margin between 9.3% and 9.8%. The company continues to pursue its 2028 strategic vision of establishing itself as a European leader in consulting and digital services.
Posted by: Marc Hardwick at 09:04
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