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Edited Transcript of SOP.PA earnings conference call or presentation 26-Jul-19 7:00am GMT

Half Year 2019 Sopra Steria Group SA Earnings Call

Paris Aug 10, 2019 (Thomson StreetEvents) -- Edited Transcript of Sopra Steria Group SA earnings conference call or presentation Friday, July 26, 2019 at 7:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Étienne du Vignaux

Sopra Steria Group SA - CFO

* Vincent Paris

Sopra Steria Group SA - CEO

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Conference Call Participants

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* Laurent Daure

Kepler Cheuvreux, Research Division - Head of IT Software and Services Research

* Nicolas David

ODDO BHF Corporate & Markets, Research Division - Analyst

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Presentation

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Vincent Paris, Sopra Steria Group SA - CEO [1]

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Good morning, ladies and gentlemen. Welcome to this presentation of the First Half Results 2019 for Sopra Steria. Welcome to those who are connected remotely because I'd like to remind you that this presentation is webcast live and is translated, which means that everyone will be able to ask their questions during our Q&A session at the end of the presentation. Here in the room, we have Pierre Pasquier, Chairman of Sopra Steria; and we have members of the Board of Directors, members of the Excom. And as usual, I'll do this presentation with Étienne du Vignaux, our CFO.

So for this presentation, we have planned to have 4 different sections. First of all, the key events for the first half, then we'll have a presentation of our operating position, that is of June 2019. Third section will be presented by Étienne du Vignaux, so that's financial results. Then we will finish with our priorities for the coming period and our targets. Then obviously, we'll have a Q&A session afterwards.

So if we come back to the highlights, I think there are 4 key highlights for the first half of the year. The first of which is robust growth, then operating performance, which is in line with our full year targets. Third highlight is continuation of our implementation of the value enhancement strategy, and then we have confirmation of Sopra Banking Software's project. So I'd like to suggest that we focus on each of these highlights.

So growth. Growth was sustained, 7.4% organic growth. It's a little bit better in the second quarter than the first. So we did 7.3% in the first one and 7.5% in the second. So this is quite promising. This confirms that we have a promising market driven by digital transformation for our customers. It also proves that we're aligned with our expectations in terms of our solutions and their teams. So it's good news. And this means that we can perhaps increase our annual growth objectives.

The second highlight was that the performance in the first semester was fully in line with our full year targets. So for profitability, we -- for 2019, we wanted to make a slight improvement when compared with 2018, and the first semester was up when compared with first semester 2018. We've gone from 6.6% for operating margin on business activity to 6.8% this year. We can also say that this improvement is slightly more significant than what we saw when we launched the year, and there are 3 reasons for this. The first of which is that we've had slightly more growth. And there are 2 reasons which are kind of tipping points from the first semester to the second semester. We've had some licenses brought forward and we've had slightly stronger investment in the second semester. So it's slightly better than what we thought, but we are aligned with these improvements, so improving our profitability for 2019. And then the other indicator, which we're following closely, is an improvement in cash generation. So free cash flow. You can see the figures here. We've improved -- we've gone from minus EUR 77.3 million last year in our first half to minus EUR 21 million this year. So in these figures, obviously, we have EUR 55 million of improvement. There are some exceptional factors. We've collected EUR 20 million earlier, but this is nonetheless much better than last year.

The next -- so that's the second highlight; and third is our value enhancement strategy and we've been pushing this for years now, and it's important to make progress each semester. We're working on all topics, we're working at all levels within the company and all entities. Obviously, consulting is very important. We have to establish a strong consulting brand within agree -- with more added value, more volume, and we have to be stronger. So we're working on everything. While at the same time, we're talking about image being recognized on the market, but it's also our skills offering that we have to develop, and we have to ramp up the value over time. So we've been working on this. We've been working on common methods, hallmark, we've been working on tooling for the group even if there is still work to be done.

The second topic is that we want to be closer to our customers' expectations. So we're reorganizing our activity into verticals, in particular, in France, we're reorganizing at the beginning of the year so that we have a vertical approach across the region. We were vertical in Paris and then we had the foothold in the various regions, but we want to be more vertical so we're fully aligned with our customers' expectations and we can capitalize on our expertise. I think this is starting to pay off. It's one of the reasons for our growth. And then a third reason for which we decided to invest was tooling. All employees in the group must have the right tools, digital tools, which means that we can enhance productivity, we can reuse components. And so we've rolled out this approach and this is something that will be amplified in the coming semesters.

So all of this investment means the group can enhance its value. It's essential for 2 reasons. One, for our positioning, positioning that we could have in the future with our customers. So our long-term project, but it's also to improve our performance. So that was the third highlight. And the fourth is the confirmation of Sopra Banking Software as a project. This project is actually key within the group. It's a key differentiating factor that we want to build. We're talking about the group's #1 vertical, financial services. This is a vertical where we can have an international approach. We're talking about a vertical which is where we need to lower costs for customers. We're seeing the requirement to improve time to market, and this is obviously aligned with our product approach, with our assets. And we also need to align our capacity to roll out these assets, these products, within the structure of management with consulting to have an end-to-end offering. So this is what we're building for core banking activity. That's key for Sopra Banking Software. The market is banks of all sizes, Tier 1 to Tier 4. We're talking about retail banks in the EMEA market.

And against this backdrop, we've seen where we've got a digital offering, which is called the DxP. So this is shared by all our banking solutions. So we've got the Platform SAB and Amplitude. And this is a platform that we want to develop to open up our core banking systems to the digital world. And something that we are also pushing is the platform approach. And we're seeing more demand for this to respond to our challenges. So progress made in the core banking systems. In the first semester, the acquisition of SAB is very important. It confirms our leadership position in France. We have significant synergies in terms of digital, and it means that we can be more ambitious in terms of our offering and our geographies.

Then the next highlight, which we've already communicated on is our partnership with Sparda Bank in Germany. So we're building a digital platform for 7 banks in Germany. This confirms our strategy. It opens up the German market. And our objective is to use this core banking system and to transform it. So we have Sopra Banking Software at the heart of this new system. And in the future, we're hoping up -- to open up the market with this platform strategy. So those are 2 highlights for core banking systems. And as you know, with Sopra Banking Software, they're also focused on specialized lending. Our customers are subsidiaries of banks, but also subsidiaries of equipment manufacturers across the world. This is a global market, and it's also a very promising market. So offering is quite interesting because it's unique today in a fragmented market. We're #1 in terms of presence. Obviously, we've got potential to develop. But thanks to the -- we've got APAK and Cassiopae, which obviously add to this -- to our offering.

We've also had industrial issues last year which we are resolving. We have 2 action plans, which obviously have had an impact on our accounts. One of which is that we have to create one lead version for our software, so that's version 4.7. It is going to be state of the art, tested, configurated so that it can be rolled out. We're following our operational plan. We're following the roadmap but at the same time, we don't want to lose our customers who placed their trust in us a couple of years ago. So we are providing specific support for these customers at the same time. So I would say we're following our operational plan. It's not easy, but we have a big advantage, and that is product is well received and when it's rolled out, it's well received on the market even if it's not easy. We can say that APAK is in line with expectations. We've seen synergies. Obviously, once we finish stabilizing, Cassiopae will be more focused on this, but APAK is fully aligned with our plans.

So now a little focus on our industrial plan for the lead version of Cassiopae. As I said, we're fully aligned with the plan. We want to have it ready for the end of this year, finish the development and the tests and report the components that go around this version, then we'll have pilots with a few customers. And the aim is to resume sales in 2020. Obviously, I just want to be clear. We've never stopped selling, but we'll be targeting new customers, prospects, who want to get on board. And it's good because this product is well received on the market.

So that's everything we can say about the 4 key highlights for the first half of the year. Now what I'd like to suggest is that we look at all the different entities. So first of all, figures, EUR 2.237 billion, so organic growth of 7.4%. Operating profit on business activity at EUR 151 million, 6.8% of revenue. Net profit attributable to the group, EUR 60.9 million, so significant increase, nearly 60% when compared with last year. Free cash flow, as I've mentioned, is at minus EUR 21.8 million. Net financial debt at EUR 624.3 million, so 1.6x EBITDA. And the U.K. pension fund deficit is at EUR 149 million at the end of the first half. So those are the key figures. Here, you can see the performance of each division. And then at group level, at the bottom line, organic growth of 7.4% and operating profit on business activity, 6.8% compared with 6.6% last year.

So now if we look at all the major entities. France, good performance in the first half, growth was very good at 7.7%, driven by consulting, double-digit growth, also driven by IT infrastructure transformation and go to cloud. That's also part of our approach. So what's important is that we have these value enhancement strategies that I mentioned earlier on. So we've gone from 9% to 9.3% margin. Obviously, we can do better, but we're investing. And we hope to make a 1 percentage point in coming years.

Now with regards to the U.K., there's 2 key highlights for the first half. The first of which is that our 2 joint ventures that are built for the U.K. government, they're at a nominal level, they're well-established, NHS. And then this wasn't the case for SSCL, but it's important. Now we've got a return to growth and recurring profitability, so double-digit margin, which can drive the U.K. activity. That's the first highlight. And the second is that we've divested our recruitment activity. So low margin. But this means that management can concentrate on what's most important. So transformation of our organization in the U.K. has been underway now for a couple of semesters. We're very strong in the public sector, but we need to develop more business in the private sector. And we've also launched now, since a year, we've launched our consulting activity. We're making progress, but there is ground to be covered. In terms of figures, it's positive, significant growth at 11.4%. It was driven by the joint ventures, so that's roughly 18% organic growth for these 2 joint ventures. There are 2 reasons. Now we've got growth coming back, but also because we've got a favorable comparison effect in the first semester of last year. In the 2 JVs, we had a negative growth of minus 12. So obviously, we've benefited from this in our figures.

In terms of margins, slightly better than last year. We've gone from 4.5% top level of 6.1% this year. As I've explained, this is very much driven by the joint ventures and the other activities, making ongoing progress semester after semester.

Now for the rest of Europe, key highlight was the German market, which seems to have slowed down slightly, especially in the banking market, and we're impacted by this. They've reduced the subcontracting value. So negative growth in the banking market in Germany. Strong growth in the other verticals. So 0.7% organic growth in Germany. And then you can see the figures here, 7.3% across the board. Other countries are developing well, as was the case in previous semesters.

In terms of margin, it was slightly under last year. This is obviously because of Germany for the reasons I've just given. So the performance was slightly under last year, but the rest of the countries are very positive and things are improving.

Now Sopra Banking Software. I've spoken about it. What -- our performance isn't what's at stake. This year, we've got all of the other objectives and targets, which I've previously described. We want to -- that to be more profitable next year, but this year, we're very much focused on delivery and delivering our action plan.

Other solutions. A good first half, 3.7% organic growth, slightly under in terms of margin, 11.7%; whereas last year, we were very much boosted by the preparation of -- introduction of tax deduction and so from France. But we've still got a favorable situation with a good level of profitability as expected at the beginning of the year, and we continue to renew our offers and become more and more digital. So that's what we can say in terms of our operations.

Now I'd like to just -- to hand the floor to Étienne to talk about the financial results.

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Étienne du Vignaux, Sopra Steria Group SA - CFO [2]

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(foreign language) Thank you, Vincent. Good morning, ladies and gentlemen. First, we're going to have a look at the consolidated income statement. Vincent has already mentioned the most important aggregate is EUR 2.2 billion is what we have for revenue, organic growth is 7.4% for the first half, and we have EUR 151 million, that is 6.8% for operating profit on business activity, that is 20 basis points better than last year.

For the share-based payment expenses, it's a big drop, as we said, at the beginning of the year at EUR 4.3 million. Last year, we implemented, for the third year in a row, an employee share ownership plan. It wasn't the case during H1 2019. We expect EUR 9 million of expenses on this line. Then amortization of allocated intangible assets are increasing a little, EUR 2 million compared with H1 2018. That's due to the acquisitions made last year, IT Economics in Germany, sorry, APAK for Sopra Banking Software at the end of the last year, which means that if the profit from recurring operations is at EUR 133.1 million, 36%, and therefore, up 110 basis points from 2018.

I'll tell you more about other operating income and expenses later on, there's a slight decrease there compared with the results we obtained last year. And therefore, the operating profit that we have totaled EUR 115.3 million, that is 5.2% of our revenue. The cost of net financial debt is relatively stable at EUR 4.4 million. Well, in reality, if you look at what we have in the figure, the cost of the gross debt is flat. Compared with last year, the group this year and this half year benefited from very good financing conditions. I see the bank is in the room. And conversely, the proceeds -- cash proceeds have come down a little. We've repatriated stocks of cash that were in India in the past to protect the balance sheet of the group and, therefore, there's a slight decrease in cash income. And we have other financial income and expenses, minus EUR 7.7 million, and there's also a fair value to be included in this line, plus the interest paid on pensions. To this, we have to add this year the interest charges due to the leasing charges we have due to the implementation of the IFRS 16. As the tax expense is more or less the same as the one we had last year, EUR 34.4 million. And then the share of net profit from equity accounted companies reflect 1/3 of the actual results that reported yesterday. Therefore, the net profit group share, if we set aside minority interest, is at 60.9%. That is 2.8% of our revenue. That is up 58%, more or less, compared with H1 2018.

As usual, we're going to talk about other operating income and expenses. There are some expenses due to the combination of businesses and then the M&A activities that ended at the beginning of the second half of 2019, as we will see in a minute. And most of these expenses, as usual, is made up of restructuring and reorganization costs, as you can see, and there is the decrease of approximately a bit more than 20% compared with H1 2018. We had restructuring costs in the U.K., as you probably remember, that weighed on the H1 2018 results. For the year, what we expect is EUR 30 million, more or less to this line.

Then tax and the effective tax charge, as you can see here, at 33.4%. That's the effective tax rate. This year, we expect 35% of effective tax rate. There's also a negative effect here that I mentioned at the beginning of the year, which is due to the fact that we no longer have the French CICE. Now therefore, annually, what we're looking at is minus EUR 8 million. And therefore, what we have for the half year is EUR 4 million.

Now let's have a look at the debt, we'll start at the end of 2018, EUR 629.9 million. We have EUR 624.3 million at the end of June, plus the free cash flow impact, which is traditionally negative during the first half. Yet, we've improved and we've used up EUR 21.8 million, the other tax more or less offsetting each other. And then the effect of the first implementation of IFRS 16 for a total of a bit less than EUR 70 million. And therefore, we deconsolidated the financial debt -- the net debt. We deconsolidated the leasing contracts in the past that were included in financial debt. And now we have a separate line on the balance sheet, which is the debt on the leasing contract, the assets for which we have leases.

Let's have a look at cash generation now. As Vincent said before, there is an improvement restated from the sale of trade receivables. We had a negative EUR 77 million during the first half of 2018. And there's an improvement of working capital requirement, EUR 20 million. As Vincent said before, to be totally transparent, we benefited mainly in the U.K. from a good item. And a net improvement in EBITDA, EUR 30 million more or less and less cash out due to capital expenditure and reorganization. And this is how we get to a number of negative EUR 21.8 million of free cash flow for H1 2019. That's the best performance ever in the past 4 years for this indicator.

Then let's talk about the debt structure, we have diversified funding and comfortable liquidity. If you look at the net debt to equity, it's below 50% on the 30th of June, a bit more than EUR 1 billion of cash available at the end of June. And the debt structure is shown here at the end of June -- 30th of June. We have a bond that was reimbursed mid-July. I'll come back to this in a minute. Then we have the syndicated loan. We have the bank loans, plus also the commercial papers, midterm to longer term. And therefore, we have a rate environment that really is good for the group. As you know, we reported on the 25th of June. That is, we said, we refinanced part of the debt on the 6th of July, and we issued 2 bonds for a total of EUR 250 million at maturities of 7 and 8 years and upgrades of a bit less than 1.75% for the first tranche and 2% of the second tranche to be compared with the loan that we have here reimbursed on the 12th of July, with a maturity of 6 years at 4.25%. Therefore, we divide it by 2, the cost of our debt, and increased maturity is what -- which is really something we are happy with.

What we have on the following page is bank covenants, 1.6x EBITDA in June, that is 30th of June, 2019. Therefore, an improvement versus 30th of June in the previous 4 years, as you can see there on the left part of the slide. And the technical slide here, these are the dates for what's going to be entering and leaving the consolidation scope. Recruitment business in the U.K. that was divested on the 28th of June, 2019. SAB within -- was fully consolidated within Sopra Banking Software global integration on the 1st of July. The closing took place at the beginning of the year -- of the month. And the joint venture with Sparda Banken will be consolidated in our accounts global integration in the other Europe business during Q3 2019.

Now we're going to listen to Vincent to conclude before we continue with the Q&A.

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Vincent Paris, Sopra Steria Group SA - CEO [3]

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(foreign language) Thank you, Étienne. So what I'd like to suggest is that we look at our major priorities, and you can see there are no surprises here. We have the same priorities. Sopra Banking Software, I said this, we are very much focused on delivery. And we also are trying to improve to get all of our business lines working well together within the vertical. So semester after semester, we want to improve and reinforce our positioning.

The value enhancement, I said this is key for all our different entities. We have contrasting situations. But this is something that we're going to amplify in the future. Then the group structure. We've got to be a lot more offensive in the future, be more ambitious to laying the foundation for the future. And then the last priority is, obviously, corporate responsibility. We're working in a business where HR is absolutely essential. Human resources are key. So we have to be a benchmark employer. We have lots of initiatives within the group. We launched a Great Place to Work survey, which we'll follow up on year after year. And this will enable us to follow how we improve our management on a daily basis. And then we're also seeking to improve diversity and equal opportunities with various action plans.

In terms of figures for growth, we have increased our target. We were targeting organic growth between 4% and 6%. And now we won organic revenue growth, equal or greater than 6%, a slight improvement in operating margin on business activity and free cash flow above EUR 150 million.

Now if we look at our mid-term objectives, exactly the same as what we've specified at the beginning of the year. Organic growth between 4% and 6% per year. Given the market, as it is, we have a targeted acquisition strategy. So we will become more ambitious in the future. Operating margin on business activity of around 10%. And free cash flow of between 5% to 7% of revenue. So those are the key midterm objectives, which we are confirming. So that's what I wanted to share with you, results for the first semester. Now I'd like to suggest we answer your questions.

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Questions and Answers

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Unidentified Analyst, [1]

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I'd like to talk about SAB again, your acquisition. From what I gather, in 2018, SAB's performance rather, wasn't that good. I mean look at their profit. They didn't even meet their objectives at the end of the year. And had the previous management team decided to work on that before the acquisition? Did they have any plans? How are you going to improve the profit profile of this company? Could you tell us more about what you expect in 2019 and 2020 in terms of profit?

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Unidentified Company Representative, [2]

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But it's way too early to say anything about this, but we're sticking to our plans. There's no nasty surprise, and this is quite in line with what we thought, not far away from the group's objective. That's all I can say. No negative surprise, I can tell you, given what we saw before we acquired them. So everything is much in order.

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Nicolas David, ODDO BHF Corporate & Markets, Research Division - Analyst [3]

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I'm Nicolas David. I have 2 questions to ask. The first one is, could you tell us more about what's positive versus your guidance in -- for H1, what are the nice, the pleasant surprises that we're going to have according to you?

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Unidentified Company Representative, [4]

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Well, it's an addition of small things. These are not major changes. Growth, probably. Growth is a bit better. But it's also -- we expected a number of good news like more licenses during the first half that we thought would happen during H2. So this is reassuring us, to some extent, plus also other investments in the field of value enhancements. We'll have more of that in H2 than in H1 compared to what we thought initially at the beginning of the year. But these are not radical changes if you look at the annual trends, given what we said in our guidance.

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Nicolas David, ODDO BHF Corporate & Markets, Research Division - Analyst [5]

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What about banking software? Did you have good surprises as well in terms of costs and execution during H1?

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Unidentified Company Representative, [6]

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No, no. We have exactly what we expected. So we're following our plans. I couldn't say that there are very good surprises and bad ones, except that now Sparda is something we have done. We thought we would do it, and it was the case with Sparda during the first half. That's good news. And for the rest, we're following our plans, the plans that we develop at the time.

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Nicolas David, ODDO BHF Corporate & Markets, Research Division - Analyst [7]

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Okay. I have another question. About the banking sector. Could you tell us more about demand in Europe? What about the dynamics there? Some competitors are saying there's a slowdown for consulting. And could you also perhaps tell us more about Germany, that is when do you think you're going to go back to more dynamic type of approach?

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Unidentified Company Representative, [8]

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Well, the German market was the most buoyant one. That's the one that really suffered most. It was really sudden. And I must say that this probably had an impact on the financial institutions. We have German banks, you see, which are not probably as solid on that market as other European competitors elsewhere in Europe. So they probably suffered more than other banks and other -- more than in other countries. It's a thriving market with more differentiation today. There is pressure on commodities, it's -- there are decreases to the subcontractors. But this is a transformation that was necessary. The banks are still working on their transformation. This is the transition period, I think. I think that everybody is conservative given the macroeconomics and the general context. But I wouldn't say that there's a major turnaround. It's not as thriving as it was before, but it's still a good market. If you look at the financial sector vertical in the group, it's a growing vertical, it's not the one that's growing fastest -- the fastest, but it's still growing.

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Unidentified Analyst, [9]

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(inaudible) I have a couple of questions about Sparda, the activity ramp-up. Could you tell us more about their revenue for this captive and the ramp-up, that is the implementation of the Sopra Banking products in 2, 3 years?

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Unidentified Company Representative, [10]

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Well, of course, certainly. In the annexes, we have more detailed pages on that. EUR 100 million for the captive, more or less. EUR 1.3 billion is what we're looking at for 13 years to summarize the amount. And as I said at the beginning, when we took 51% of the captive -- we have 51%. And the core banking is not going to change for the 7 banks, which is the case today. And little by little, there's going to be a 2-level transformation. We're going to have the core banking of Sopra Banking platform that's going to be introduced progressively and, therefore, a transformational progress, a transformation. And then this GIE was dedicated to this bank. It's going to be a more offensive platform, thanks to its new banks. And there's a big market in Germany for midsize and smaller size banks that are looking for these platforms. And therefore, the model is changing. It will take 2, 3 and 4 years. Little by little, we'll go from what we see today to something like a cooperation with these 7 banks. We'd like to fund new banks again as we execute the contract.

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Unidentified Analyst, [11]

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And just one last point. With regards to the previous question, and perhaps slightly better than planned activity is good for the full year. So you're moving your guidance. Can you say that you're perhaps more confident than what you were some time ago with regards to potential?

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Unidentified Company Representative, [12]

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No, no, I would say, annually, we've got the same targets midyear. I'd prefer to say that we're slightly above what we said even if some things have been brought forward. So we have exactly the same targets, not more optimistic necessarily than previously. But things -- the situation is correct, midyear, but it's too soon to give you any other information.

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Laurent Daure, Kepler Cheuvreux, Research Division - Head of IT Software and Services Research [13]

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Laurent Daure, Kepler Cheuvreux. Can we have some more details on changes in cost of Sopra Banking Software? Last year, there were provisions. I think there was additional cost to produce the new version. But what I'd like to know is to see how things will go from 2019 to 2019. Have we had a drop in cost with regards to turnover assumptions? And then my second question would be for the U.K., more robust start of the year than what was expected perhaps. Can we have some more details on trends in the private sector? And then perhaps talk about a potential slowdown that might be in this region over the next 2 years.

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Unidentified Company Representative, [14]

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So with regards to Cassiopae, it's too soon to give clear objective for 2020. But quite clearly, I was explaining earlier on, building this lead version is something that we're looking at -- we're taking care of now. We're not talking about the same level of investment, though. But above all, we have all the projects that I've spoken about to customers who have placed their trust in us. And so we have to fulfill our commitments. And obviously, at the same time, gradually, over time, we're seeing improvement. R&D, which will be less significant than profit. Profitability is also improving. We're not going to have a miracle from 1 year to another, but we're going to see progressive improvement. And then obviously, we'll be resuming sales. So all of this will improve our global situation. It's too soon to give you specific improvement targets quarter-on-quarter, but we're seeing a general improvement.

If we look at the U.K. now, the improvement contacts in the private sector, well, we're getting stronger quarter-on-quarter. But we are a relatively small stakeholder in this market. So we need time. Consulting activity, we started from scratch 2 years ago. We've got over 200 consultants who are present in the U.K. market, and we are hoping to be about 300 by the end of the year. So we're continuing to develop this activity. So it's quite interesting and diversifying our businesses in more of a long-term approach. We have a new team. We've got an offensive approach. We're starting from the bottom up. We're improving things quarter-on-quarter.

With regards to the public sector, I was saying that the JVs are well established. It's quite difficult to give you a vision of the impact of Brexit, but we can see that there's already a wait-and-see attitude. There's not much new business. We've got quite robust, recurring activity. So we're not expecting a breakaway in the market. But in the public sector, it's obviously going to be calmer during this time. Then obviously, the activity will get going again because, obviously, there will be new regulations in the future. So that's what we want. But obviously, anything could happen in this context.

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Unidentified Company Representative, [15]

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So now we'll have a few questions that we received online. Three questions from Derric Marcon, Société Générale. First question, could you put a figure on the amount of signatures that I think were signed in the first semester that were brought forward? And how do you see the distribution for H1, H2 and licenses over the year -- the full year?

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Unidentified Company Representative, [16]

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I would say, we've had about EUR 15 million, which was brought forward, and with regards to distribution over the full year, I don't have the exact figure. 60% in the second half, whereas last year, we were at 20%, 80%. So we'll be more like 60%, 60-40 this year. So obviously I'm putting my trust in my CFO because I don't have a clear vision, specific vision of this.

So for SSCL, growth expected. The growth expected this year will carry on next year and as Brexit jeopardize growth for this entity. So I don't think we're going to have a hard Brexit because, obviously, we have -- we're talking about a delegation of public services. Brexit or no Brexit, we still have to deliver these public services. Even if there's a catastrophe, it would take a long time to pan out. So the risk is more with regards to a change in political context. Perhaps if they wanted to source everything in-house rather than outsourcing all those types of projects that we're doing there, that would be a risk. But I don't think Brexit is going to have a big impact.

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Unidentified Company Representative, [17]

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Third question from Derric Marcon. Do you think you can maintain your EBIT level in France despite the investments that you want to make this year? Should we -- should -- are these investments going to have impact on the margin in 2020 or will they already -- are we also going to see the impact of this in 2019, will there be a payback?

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Unidentified Company Representative, [18]

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So it's too early to answer this question. We're going through changes. Investments, obviously, not slowing down. But the more we establish our consulting brand with greater added value, with higher prices, then the more we're going to have a payback of this, semester on semester. So 2019, we're already seeing this. And we hope this for 2019. But in 2, 3 years' time, we want to change our positioning and we want to change the sector of our profitability. So perhaps if we could do things quicker, then that would be good, but that's not basically the plan that we have in mind.

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Unidentified Company Representative, [19]

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Question from (inaudible), independent analyst. The first question is, could you give examples of production tooling that are going to support your margin ambitions of above 10% in France? And the second question is, can you talk about the resources implemented to ensure value ramp up and how does this change the way the group operates?

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Unidentified Company Representative, [20]

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So first question, can you just give me a reminder. So tooling. Tooling, quite a simple principle. We're going to try and ensure that all the group's projects have a minimum level of tooling, which means that we can produce projects in the same way, make progress in the same way across the board. So this will be a regular improvement and we can see that we're in a world where we are reusing things that have already been made, that have already been produced in the past. That's something that's already in place. So we're talking about very concrete things. We're talking about tooling projects benefiting from all our expertise. This means we can go quicker when it comes to installing our platforms if we produce in the same way. And it means that we're also going to -- always going to be state of the art with regards to our production for our service centers as well. I mean they will produce in the same way. And that's what's important.

We've obviously got the topic of reusing everything that already exists within the group. So our platform approach and the tools that we're developing will mean that we can improve this. For the time being, I can't say that we're seeing this reflected in our figures for 2019. I think this is more of a long-term approach to improve productivity, become more professional and produce things quicker. That's what's really key.

The second question, can you talk about the resources implemented to ensure this value ramp-up. So the question is, well, first of all, we have to better understand our customers' requirement. We'll have to be more proactive. So obviously, this calls a lot of things into question; the way we sell, the way we produce, the way we behave on a daily basis. So we have to be more proactive with obviously an excellent state of the art delivery, but more proactive. And so this is our sales approach. We have to be more targeted. We have to target added value for our customers and increase our prices quite simply. So this is what we're building up all at the same time and, obviously, improving our margins over time.

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Étienne du Vignaux, Sopra Steria Group SA - CFO [21]

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(foreign language) Well, we have no more questions. So thank you. Thank you for coming, and enjoy your holiday. Thank you.