Sopra Steria Group: H1 2018 analysts' meeting feedback: another case of sharper seasonality
Sopra Steria Group: (BUY, Fair Value Fair Value EUR201 (+27%))H1 2018 analysts' meeting feedback: another case of sharper seasonality
We reiterate our Buy rating following the analysts’ meeting held on Friday last week. The share price fell by 9% on fears that Sopra Steria misses FY18 operating margin guidance (slightly above 8.6%) on the back of a 0.9ppt margin decline in H1 due to a unusual sales mix and higher costs for Sopra Banking Software. However, the mix is planned to reverse in H2 with 15% licence growth expected for H2. We calculate that 7-10% margin for SBS translates into a 8.4-8.8% margin for the group.
Sopra Steria Group is a global player in IT services, with operations in consulting, software development, and integration. In addition to France, Co. operates in the United Kingdom, Spain, Italy, Switzerland, Germany, and Belgium, assisting its clients in managing the transformation of their businesses and information systems. Co. divides its operation into three categories: Consulting, Systems and Solutions Integration, and Software Development; which it spreads among eight major verticals: Financial Services, Insurance and Social Welfare, Public Sector, Telecom Operators, Aerospace and Defense, Energy, Transport and Courier Services, and Retail.
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
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