Sopra Steria sales rebound on defence and consulting spend, driving up shares
By Leo Marchandon
Strong First-Quarter Performance and Strategic Focus
April 29 (Reuters) - French IT group Sopra Steria reported a 3.2% organic rise in its first-quarter revenue to 1.5 billion euros ($1.8 billion) on Wednesday, a second consecutive quarter of growth driven by improvements in its core business, which sent its shares more than 11% higher.
Leadership and Market Positioning
Sopra Steria, which competes with Capgemini and Accenture, is turning a new leaf under CEO Rajesh Krishnamurthy, betting on its strengths in public and defence sector solutions and its focus on European clients.
CEO's Vision and Strategic Direction
"These results confirmed the relevance of our positioning in Europe, ... in particular with regard to artificial intelligence and issues related to systems and data sovereignty," said Krishnamurthy, who became the CEO in February.
Revenue Growth and Key Drivers
The first-quarter performance marked a significant rebound compared to the 4.9% decline in the same period last year.
Impact of Digital Transformation Contracts
The company said the completion of a digital transformation contract with Germany's Sparda banks, planned since 2023, weighed on organic growth figures. Excluding the impact of the programme, organic growth would have stood at 4.4%.
Sector Performance Highlights
Aeronautics and Defence Lead Growth
Quarterly growth was led by the Aeronautics business, which surged by 15%, and Defence, Security, and Space, where sales grew 7% globally.
France as a Key Market
France, Sopra Steria's largest market contributing 44% of total revenue, posted organic revenue growth of 7.2% to 650.1 million euros, a sharp acceleration against the 1.6% growth recorded in the previous quarter. Defence, Aeronautics and Public Sector activities drove the upswing.
Workforce Expansion and Outlook
Sopra Steria's headcount rose to 51,163 as of the end of March, from 50,106 a year earlier, reflecting the recent acquisitions of financial consultancy firm Aurexia and HR software provider Neocase.
Future Targets and Shareholder Initiatives
The group also confirmed the 2026 target for organic revenue growth of between 1% and 2% and announced a new 40-million-euro share buyback programme.
($1 = 0.8544 euros)
(Reporting by Leo Marchandon in Gdansk, editing by Milla Nissi-Prussak)