Steria second quarter 2007 revenue: +8.8%, First half 2007 operating margin : +7.3%, First half 2007 attributable net profit: +8.4%
31/07/2007
First half 2007 operating margin was € 40.7 million, up by 7.3 % compared to the first half 2006.
Jul 30, 2007

  • Second quarter 2007 revenue was € 330.7 million, up 8.8% on a like-for-like basis.  
  • Before group costs of 1.3% of first half 2007 revenue, the operating margin rate rose by 0.16 points to 7.5 %.
  • Attributable net profit for the first half 2007 was € 23.7 million, up 8.4%.
On the 27th July 2007, the Steria Group SCA Supervisory Board examined the consolidated accounts submitted by Management.
 
 
First-half 2007 results
 
First half
 
2006
2007
Variation
Revenue
€ m
607.2
647.9
6.7%
Operating margin
as a % of revenue
€ m
%
38.0
6.3%
40.7
6.3%
7.3%
-
Operating income [1]
€ m
34.3
39.0
13.8%
Attributable net profit
€ m
21.9
23.7
8.4%
Diluted earnings per share
1.16
1.22
5.2%
Average weighted diluted number of shares
Mn.
18.92
19.41
2.6%
 
Net financial debt
€ m
79.6
43.9
-44.8%
 
 
Revenue
 
First half 2007 revenue
  
In € million
 
H1
2006
H1
 2007
Growth
Revenue
607.2
647.9
6.7%
Change in structure of consolidated group
-
 
 
Currency effect
+1.4
 
 
Pro-forma revenue
608.6
647.9
6.5%
 
  
First half 2007 revenue by geographic zone
  
In € million
H1
2006*
H1
2007
Organic growth
France
261.2
270.4
3.5%
UK
142.5
157.1
10.2%
Germany
92.8
106.3
14.5%
Other Europe
112.1
114.2
1.9%
Total
608.6
647.9
6.5%
 
  
First half 2007 revenue by business line
  
In € million
H1
 2006*
H1
2007
Organic growth
Outsourcing
259.6
278.9
7.4%
Consulting and Systems Integration
349.0
369.0
5.8%
* Revenue on a like-for-like basis (based on 2007)
 
  
Second quarter 2007 revenue by geographic zone
 
In € million
Q2 2006*
Q2 2007
Organic growth
France
131.0
133.7
2.0%
UK
70.5
82.6
17.1%
Germany
45.9
55.1
20.2%
Other Europe
56.7
59.3
4.7%
Total
304.1
330.7
8.8%
*  Revenue on a like-for-like basis (based on 2007)
 
 
Activity during the second quarter of 2007
 
In the second quarter of 2007, the group grew consolidated revenue by 8.8% on a like-for-like basis. 
 
In France, growth was 2% compared to Q2 2006 on a like-for-like basis reflecting greater selectivity of commercial opportunities in line with transformation efforts engaged with the aim of increasing value added and profitability.
  • In the UK, where quarterly variations can be significant due to the timing of the call off of orders already received under framework contracts, growth was 17.1% compared to the second quarter 2006.
  • In Germany, the combination of a strong environment, our well-positioned offers, the group’s appeal and favourable base effects allowed strong organic growth of 20.2% compared to the prior year period.
  • In the Other Europe zone, Q2 growth of 4.7% was driven especially by Scandinavia and Belgium.
   
 
First-half 2007 results
 
As at June 30, 2007, group costs were 1.3% of revenue compared to 1.1% as at June 30, 2006. This evolution results from the strengthening, during the first half of 2007, of three transversal functions (Business Development, Client Value Development, Technology and Innovation) and from the continued efforts of industrialisation (Global Service Centre) to step up the pace of the transformations with the aim of intensifying growth and increasing profitability. 
  • Before structural costs, the group’s operating margin rose by 0.16 points to 7.5% compared to H1 2006. This improvement was largely due to Germany where the operating margin rate before group costs rose by 1 point on H1 2006, to 7.4%. In France and the UK the operating margin rate before group costs remained high (9.2% vs. 9.2% in H1 2006 and 8% vs. 8.1%, respectively). In Other Europe, the operating margin rate before group costs was 3.2%, an increase of 0.1 points on H1 2006.
  • After factoring in central costs, operating margin rose by 7.3%, an increase in the operating margin rate of 6.3%.
  • Net financial debt as at June 30, 2007 was € 43.9 million, down 44.8% on June 30, 2006. The reduction reflects the strong performance in operating cash flow generation: Operating free cash flow as at June 30, 2007 was of the same order as at June 30, 2006 (‑€ 42.7 million compared to ‑€ 39.5 million) despite a € 16.7 million rise in tax payments in H1 2007 compared to the prior year period.
    
  
Appointment
 
Laurent Lemaire has been appointed Chief Financial Officer and will sit on the Steria Group Executive Committee. Before joining Steria, Laurent Lemaire (40 years old) worked at Danone Group where he was CFO for the global beverage division.
   
  
 
 
 
 
Enclosures:
 
 
 


Consolidated income statement as at June 30, 2007
 
EUR 000
30/06/2007
30/06/2006
Revenue
647 882
607 175
Consumed purchases and sub-contracting
(122 415)
(138 605)
Payroll charges
(367 613)
(325 277)
External expenses
(93 483)
(86 612)
Tax and duties
(12 309)
(10 295)
Inventory change
1 419
(60)
Sundry operating income/expenditure
2 140
2 450
Net depreciation and amortisation
(12 593)
(11 545)
Net allocations to provisions
(1 817)
970
Depreciation of current assets
(463)
(219)
Operating margin
40 748
37 981
Operating profitability
6.3%
6.3%
Other operating income and expenses
(1 760)
(3 730)
Operating profit
38 988
34 251
Net cost of financial debts
(1 503)
(1 931)
Other financial income and expenses
(39)
678
Financial result
(1 542)
(1 253)
Tax
(13 631)
(10 986)
Group share of profits from associated companies
15
320
Total net profit
23 830
22 332
 
 
 
Group share
23 742
21 896
Minority interests
88
435
Earnings per share (in EUR)
1.27
1.21
Fully diluted earnings per share (in EUR)
1.22
1.16
 
 
 
Consolidated balance sheet as at June 30, 2007
 
 
30/06/2007
30/06/2006
Goodwill
241 248
239 543
Intangible fixed assets
13 118
12 647
Tangible fixed assets
67 181
64 650
Investments in associated undertakings
176
2 871
Assets available for sale
2 360
2 351
Other financial assets
1 242
868
Deferred tax assets
33 980
40 301
Non-current assets
359 305
363 231
Inventories
16 860
5 717
Trade debtors and similar
248 664
255 477
Client receivables
188 270
159 606
Other current assets
15 693
15 560
Non-current assets less than one year
1 600
1 711
Due tax assets
8 917
1 046
Advance payments
25 769
23 077
Cash and cash equivalents
34 230
37 121
Current assets
540 003
499 315
Total assets
899 308
862 546
 
Group shareholders’ equity
345 154
276 226
Minority interests
1 232
951
Total shareholders’ equity
346 386
277 177
Loans and financial debt (> 1 year)
67 006
101 454
Pension commitments
69 917
79 043
Provisions for liabilities and charges (> 1 year)
6 380
7 666
Deferred tax liabilities
1 669
1 740
Other non-current liabilities
19
19
Non-current liabilities
144 991
189 922
Loans and financial debt (< 1 year)
11 161
15 279
Provisions for liabilities and charges (< 1 year)
13 528
11 045
Trade creditors and related accounts payable
116 465
116 575
Amounts owed to clients and advances received
75 728
78 384
Due tax liabilities
9 862
7 587
Other current liabilities
181 187
166 577
Current liabilities
407 931
395 447
Total liabilities
899 308
862 546
 
 
 
Simplified cash flow statement
 
 
30/06/2007
30/06/2006
Cash flow
o/w tax
34.0
(17.6)
43,3
(0,9)
Change in WCR (cash elements)
(61.1)
(63,3)
Operating cash flow
(27.1)
(20,0)
Net industrial investment
(12.2)
(10,8)
Restructuring
(3.4)
(8,7)
Free operating cash flow
(42.7)
(39,5)
Dividends
(7.9)
(5,4)
Net financial investment
4.5
8,7
Capital increase
5.9
0,4
Others (incl. pension commitments)
(4.6)
(5,4)
Free Cash flow
(44,7)
(41,2)
 
 
 
 


[1] Operating income includes additional expenses associated with stock options or bonus shares allocated to certain employees, restructuring expenses, capital gains on disposals, etc.