Financial releases

Feb 14, 2008

2007 Sales: EUR 1 416.2m. Overall growth +12.2% (including Xansa). Organic growth for Steria +4.2% [1]

  • Consolidated sales in 2007 including 2.5 months from Xansa, were EUR 1416.2m, up 12.2% on 2006. 
  • Excluding Xansa, Steria’s 2007 sales were EUR 1 306.9m, an organic growth of 4.2% in line with the guidance given at the time of the publication of the Q3 2007 revenue. 
  • Trading conditions in Q4 were brisk: the pipeline as of December 31 2007 rose by 7.7% over the year and order entry increased by 9.4% on Q4 2006. 
  • Excluding Xansa, Steria’s operating margin in 2007 , will be higher than 2006 (7.1%). In addition, Xansa’s sales over the 2.5 months in 2007 should generate an operating margin [2] above 7%. 
  • As of December 31 2007, bank covenants were largely respected. Estimated net financial debt is around EUR 310m and the pension fund deficits [3] both for Steria’s previous structure and Xansa are lower than the last published accounting valuation. 
  • The integration of Xansa is going according to plan and this allows the Group to confirm cost savings from the acquisition of around EUR 23m in FY 2008.
2007 consolidated sales:
 
(In € million)
 
12 months
2006
Reported
Change in accounting method [4]
12 months
2006
Restated
12 months
2007
Growth
Steria Revenue
1 262.0
-5.5
1 256.6
1 306.9
3.6% (published)
Change due to currency effect
 
 
-1.9
 
 
Sales at constant structure and exchange rates
 
 
1 254.7
1 306.9
4.2% (organic)
Xansa (Oct 17 – Dec 31)
 
 
 
110.5
 
Intercos (Steria > Xansa & Xansa > Steria)
 
 
 
-1.2
 
Consolidated group sales (including 2.5 months Xansa)
 
 
 
 
1416.2
 
 
Pro forma combined group sales (including 12 months Xansa)
 
1 807.2
 
-5.5
 
1 801.7
 
1878.4
 
4.3%(published)
Of which Xansa (Jan 1-Dec 31)
549.1
 
549.1
573.6
4.5%
(published)
 
  
2007 sales by geographic zone
  
(In € million)
12 months
2006*
12 months
2007
Organic growth
France
527.6
534.3
1.3%
UK
288.5
305.8
6.0%
Germany
203.2
227.7
12.1%
Other Europe
235.3[5]
239.0
1.6%[5]
STERIA previous perimeter
1 254.7[5]
1 306.9
4.2%[5]
Xansa (Oct 17 2007-Dec 31 2007)
 
110.5
 
 
  
2007 sales by business line
  
(In € million)
12 months
 2006*
12 months
2007
Organic growth
Facilities management
535.2
550.1
2.8%
Consulting and Systems Integration
719.4
756.8
5.2%
Xansa (Oct 17 2007-Dec 31 2007)
 
110.5
 
* Sales on constant currency and accounting basis (base 2007)
  
  
Activity during Q4 2007
  
Q4 2007 sales by geographical zone
  
(In € million)
Q4
2006*
Q4 2007
Organic growth
France
143.3
138.6
-3.3%
UK
68.0
75.1
10.5%
Germany
60.2
63.8
6.1%
Other Europe
76.1[5]
73.2
-3.8%[5]
STERIA previous perimeter
347.5[5]
350.7
0.9%[5]
Xansa (Oct 17 2007-Dec 31 2007)
 
110.5
 
Intercos (Steria > Xansa & Xansa > Steria)
 
-1.2
 
Consolidated group sales
 
460.0
 
* Sales on constant currency and accounting basis (base 2007)
 
  
In France, Q4 sales are in line with guidance given at the time of the publication of the Q3 2007 revenue and reflect the ongoing programme to move into higher value added businesses. In FY 2007, revenue from sub-contracted contracts was reduced by 40% compared to the previous financial year. Trading was however strong: sales on own resources rose by 9.3% during the year and the order entry to sales ratio was 1.08 at end December 2007.
 
In the United Kingdom, Q4 was marked by the beginning of the operational merger between the Steria and Xansa teams. In this context, trading remained good and allowed Steria to increase sales by 10.5% in Q4 2006 previous structure.
 
Germanyconfirmed in Q4 2007 its dynamism with organic growth of 6.1% despite an unfavourable comparison basis (sales in Q4 2006 had risen by 24.8%).
 
The performance of the Other Europe zone takes into account the sale in Q4 2007 of a non-strategic business in Norway (sales of EUR 2.2m in Q4 2006) as well as reduced hardware sales of EUR 4.9m.
 
Overall for Steria’s previous perimeter, Q4 business was brisk:
-        as of December 31, the pipeline was up 7.7% on December 31 2006.
-        order entry increased by 9.4% on Q4 2006.
-        the order entry to sales ratio was 1.06 as of December 31 2007.
 
Xansa has been fully consolidated since October 17 2007. Groupe Steria’s consolidated sales as of December 31 2007 thus include 2.5 months from Xansa (from Oct 17 2007-Dec 31 2007) for EUR 110.5m. For the FY 2007 (between Jan 1 and December 31) Xansa had sales of EUR 573,6m, an increase of 4.5% on the same period in 2006. As of December 31 2007, Xansa’s order bank remained at a high level of around GBP 550m. During the year, Xansa renewed and/or extended a certain number of its major contracts such as Co-operative Financial Services (April 2007), Tesco (May 2007), Thames Water (July 2007), BT (August 2007), and a major British Postal organisation (January 2008).
 
Outlook
The FY 2008 will not yet benefit from sales synergies arising from the acquisition of Xansa as these are planned to come on stream from 2009, but the Group is confident that it will be able to generate organic growth of at least equal to that of the European IT services market. The Group has confirmed a target operating margin[6] higher than 8% for 2008.

   
[1] On a constant currency, consolidation and accounting basis
[2] Before any amortization of intangible assets arising from business combinations. Unaudited figures
[3] Unaudited figures
[4] Diamis, 40% owned by Steria, is consolidated by the equity method in the 2007 accounts (proportional consolidation in the 2006 published accounts). Sysinter is considered as being in the process of being sold as at December 31 2007. (Fully consolidated in the 2006 published accounts). Diamis and Sysinter are part of the French perimeter.
[5] Other Europe not restated for the sale of the payment terminal business in Norway (2006 Sales: EUR 7m, Sales Q4 2006: EUR 2.2m). After restating 2006, organic growth for Steria's previous structure rose 4.7% in 2007 and 1.6% in Q4 2007.
[6] Before any amortization of intangible assets arising from business combinations.