(AOF) – Sopra Steria and Ordina (Dutch IT services company) announced that, considering that all the conditions of the offer have been met, the offeror declares the offer unconditional. Settlement of the offer will take place on October 4, 2023, on which date the offer price of 5.75 euros (dividend attached) per share will be paid. Ordina will be fully consolidated in the accounts of Sopra Steria from October 2023.
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Key points
– One of the European leaders in digital transformation born from the merger in 2014 of Sopra and Steria;
– – Company organized into 4 businesses generating €5.1 billion in revenue: consulting and systems integration for 2/3, ahead of solutions publishing, “business process services and infrastructure and cloud management;
– European presence, in France (40% of revenues), in the United Kingdom (18%), in other Europe with strong positions in Germany (29%) and the rest of the world;
– Business model: being, in Europe, the strategic partner of large administrations, financial and industrial operators and strategic companies by supporting them in their digital transformation and their digital independence;
– Shareholders’ agreement between the founding families Odin and Pasquier and the managers, i.e. 22.3% of the capital and 33.6% of the voting rights, ahead of the employees (4.8% and 7.8%), Pierre Pasquier chairing the board of directors of 15 members and Cyril Malargé being general manager;
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Very healthy balance sheet with a debt of €559 million at the end of June compared to equity of €1.8 billion and cash of €1.1 billion.
Challenges
– Strategy focused on a strong positioning in Europe, on the development of solutions (objective of 20% of revenues in the publishing and integration of solutions), on consulting (objective of 15% of revenues), the integration of digital and targeting in the medium term annual revenue growth between 4% and 6%, an operating margin of 10% and free cash flow between 5% and 7% of revenues;
– Innovation strategy:
– monitors the technologies and their uses provided by the Digital Champions, innovation missions given to project teams, hackathons open to customers and partners, demonstration, ideation and codedesign spaces,
– targeted partnerships (startups, universities, research laboratories, large publishers such as Axway and GAFAM, Campus Cyber France)
– entry into the capital of young companies;
– establishment of 2 development platforms, one for the cloud, the other for blockchain, artificial intelligence and machine learning;
– integration of generative AI on the Ingine development platform;
– 2040 environmental strategy validated by the SBTi:
– 85% reduction compared to 2015 in GHG emissions (- 68% in 2022),
– support for customers in their low-carbon transition;
– Benefits of the partnership with OVHCloud to offer a platform in Europe;
– One of the best positioned players in the promising segments of “cloud computing” and big data (management of data volumes), as well as in co-transformation projects such as Ecomouv or Transactif and in the cybersecurity;
– High visibility with recurring turnover (more than 40%) thanks to partnerships with strategic customers such as public services.
Challenges
– Integration of new employees – attrition of 15.7% and share of offshore centers of 17%;
– Continuation of the rapid integration in April of the acquisitions -CS Group (nearly €2 billion in revenues in defense & security) and Tobiana (€200 billion in revenues) – before the acquisition of the Dutch Ordina via takeover bid until at the end of September;
– After an 11.6% increase in revenues and stability in net income at the end of June, 2023 objective raised: turnover growth of at least 6%, operating margin rate of +9% and net flow of cash flow of +€300M;
Learn more about the Software Publishers industry
Beautiful dynamics
According to the latest Truffle 100 ranking, the sector’s total turnover in France jumped 15% last year to cross the 25 billion euro mark. The sector has benefited from an unprecedented growth rate and confirms its recovery after the health crisis. The average annual growth over fifteen years is 12 times higher than that of GDP! Dassault Systèmes retains first place with more than 5.6 billion euros in revenue last year. Cegid, specialist in software for accountants, and the fintech Murex are placed in second and third position with respectively 791 and 711 million euros in turnover. Polarization is one of the characteristics of the sector: the gap in turnover between the 50th and the 100th publisher has increased further in 2022 to reach almost 28 million euros. Performance was improved as the profitability rate (as a percentage of turnover) increased from 9.1% to 10.4%. The outlook is good because artificial intelligence, seen as revolutionary, is expected to drive the market in 2023, as is cybersecurity.
Find out more about the IT / ESN sector (digital service companies)
Cybersecurity blues
Gartner analysis reveals that nearly half of security leaders are expected to change jobs by 2025 due to high stress. Among them, a quarter should opt for completely different functions. The average seniority of a “CISO” (Chief information security officer) would be limited to 26 months. French companies, due to limited budgets, can only meet half of the required international standards. A shortage of talent is also to be deplored as the French digital market faces a shortage of around 15,000 people. Insufficient remuneration could explain this: remuneration would not exceed 200,000 euros in France, compared to around 800,000 euros in the Anglo-Saxon world for the best positions.