Good morning ladies and gentlemen and welcome to this quarter one 2026 revenue for Sopra Steria. For the first part of the conference participants will be able to listen-only. During the Q&A session, participants can ask a question by dialing # five on your telephone keypad. I now hand over the floor to Rajesh Krishnamurthy, CEO. Over to you.
Good morning, ladies and gentlemen. Welcome to this conference call to comment Sopra Steria's revenue in Q1 2026. I'm here with Etienne du Vignaux, Group CFO, with whom I will lead this session. I'll start with a few general comments on the quarterly performance. Next, I'll go over the figures for our four reporting units. Finally, we'll finish with a Q&A session.
Revenue in Q1 2026 stood at EUR 1.463002 billion growth, 3.4% when compared with Q1 last year. At constant exchange and scope, growth in revenue was 3.2%. As previously announced, the revenue in Q1 2026 includes the first significant impact of the conclusion, which has been planned for several years and announced in 2023 of the SST program with the Sparda-B ank. The negative impact, which is not recurring, of the conclusion of this program was 1.2 points over the quarter. Excluding the impact of the SST program, underlying organic growth for Q1 was 4.4%. Q1 2026 thus confirms the rebound in business activity, which we observed as of Q4 2025. Business momentum improved across most of our geographies.
All the group's reporting units, France, the U.K., Europe excluding SST and Solutions, saw growth in the first quarter. Even if the basis for comparison was favorable, Q1 2024 saw a contraction of 4.9%, we've seen an acceleration in the aeronautics sector, which showed growth of 15% over 12 months, and in defense, security and space, which posted growth of 7% over 12 months. The consulting business confirmed its rebound with organic growth of 5%. Business in Q1 2026 highlights that there is significant demand from our customers to implement transformation through technology. We've seen growing interest in terms of matters linked to AI, cyber security, and digital sovereignty. These are many topics where Sopra Steria is well-positioned.
I'd like to suggest that we move on to the detailed analysis of the performance by reporting unit. Let's start with France. In France, revenue stood at EUR 650.1 million. Organic growth in revenue experienced a clear acceleration, +7.2% over 12 months compared with the fourth quarter of 2025, which stood at 1.6%. With the exception of energy and telcos, which were still contracting, all the reporting units verticals demonstrated positive growth. The most buoyant verticals were transport, aeronautics, public sector, with growth rates above 10%. Defense, security, space, and financial services also experienced sustained growth between 5% and 10%. For the U.K. In the U.K., revenue stood at EUR 220 million. Organic growth was 4.2%.
The basis for comparison was particularly favorable because in Q1 2025, there was a contraction of 10.1%. This being said, the NHS SBS platform business was solid, so with the next-gen business process services, especially for recruitment, private sector and then financial services. For Europe, excluding SST, the division returned to growth in this quarter after having experienced an average quarterly contraction of around 2.6% in 2025. Organic growth was thus 1.6%. Italy, Switzerland, Scandinavia, and Spain demonstrated dynamic growth. Germany, Belgium, and the Netherlands posted a moderate contraction, but a lot less pronounced than in the fourth quarter of 2025. We're expecting ongoing improvement and a return to growth in these three countries over the coming quarters.
SST posted revenue of EUR 31.9 million compared with 47.7 in Q1 2025. This is aligned with expectations. In total, including SST, Europe generated revenue of EUR 507.8 million or an organic contraction of 1.6%. For Solutions. Solutions generated revenue of EUR 85.3 million, organic growth of 0.9%. The business focusing on human resources, which represents 2/3 of the unit's activity was stable, whereas the property management business was very buoyant. To conclude, Q1 2026 confirms the return to growth in our business that started in the fourth quarter of 2025. Our customers are still investing in a technology-driven transformation, they're displaying a growing interest in matters into AI, cybersecurity, and digital dependencies.
We've got a significant exposition to strategic sectors like aeronautics, defense, space, public sector, and finance and financial services, which represents 70% of revenue. This is where there's significant investment momentum. We're drawing on an entrepreneurial model which makes us agile and where most of our work is carried out under a fixed price or an outcome-based agreement, so 60% of revenue at the end of 2025. This enables us to ensure that we share the value created by our solutions with our customers. The environment is quite uncertain, even more so since the end of February. Our profile gives us a high level of resistance with an exclusively European presence, lack of exposure to sectors like industry or goods exporting companies, with the exception of aeronautics.
Strong foothold in public and parapublic sectors and a commercial strategy focused on close customer relationships and our top 100 customers. Based on this, we're confirming our goals for 2026 in terms of organic growth in revenue, operating margin, and cash generation, while recalling that quarterly seasonal impacts will be as pronounced as in 2025. I'd now like to suggest that we open the Q&A session.
If you'd like to ask a question, please dial # five on your telephone keypad. Please limit yourself to two or three questions max. The next question is from Nicolas David at ODDO. Your line is open. Over to you.
Good morning, Rajesh. Good morning, Etienne. Good start to the year. I've got two questions which are linked. The first is last February you were expecting Q1 to be aligned with the annual guidance. It's finally here, your Q1 is above your guidance. Where were the positive surprises when compared with the initial expectations? Then in February, you were expecting excluding SST. Obviously, that's going to increase over the next quarters. This implies an increasing growth, excluding SST, over the coming quarters at group level. Are you confirming that we can see an acceleration in growth, excluding SST at group level over the next quarters?
Thank you, Nicolas. We don't give quarterly guidance. We gave an indication at the start of last year. That was an exception. We're starting the year aligned with our forecast. You've obviously understood the annual guidance. In some geographies, Germany, Netherlands, Belgium, we're expecting an acceleration in growth, compared with what we've seen at the start of the year. An improvement on last year as well.
The business is volume related. France, U.K., we're not necessarily expecting acceleration here, but we've got a favorable basis for comparison in the first quarter, but that'll be less so in the coming quarters. With SST, obviously, you've got in mind, we've got the deflation impact which is gonna slow down. Obviously, Rajesh gave you the revenue, a few EUR 10 million in the first quarter. Obviously, that's gonna be eliminated. It'll be roughly EUR 5 million by quarter. Obviously, Rajesh has also reminded us that the environment is highly volatile. Today we ar e focused on our annual guidance target of growth between 1% and 2%, excluding SST 3%-4%.
Thank you. Just to understand, when you say Q1 is aligned with the guidance, this Q1 at 3%, does this contain any positive surprises?
We're not expecting to have to review our yearly guidance.
Okay. Thank you.
The next question comes from Michael Briest from UBS. Please go ahead.
Good morning. Two from me. Can you confirm the 2028 outlook is also intact and unchanged today? I noticed in terms of headcount, there was 800 people added in the international delivery centers, can you talk about the strategy around offshoring? I think previously you said you wanted to get to about 20%, by 2028 from those markets. Is that still the case? Thank you.
Thank you for your question. We haven't changed our 2028 outlook as mentioned in the press release. That was the first question. Now with regards to offshoring, I'll let Rajesh re-reply.
Obviously we're carrying on developing offshore, but we have to take into account the fact there's a strong acceleration in AI, and the efficiency that we can bring to our project. We're investing in our AI Backbone project, which enables us to accelerate and gain in efficiency. We'll be working with our customers on the acceleration of migration from the legacy to our new project. We're, we're looking at this very closely. We're looking at how we carry on using our offshore programs closely.
The next question comes from Laurent Daure at Kepler Cheuvreux. Your line is open over to you.
Good morning, gentlemen. Three questions from me. Firstly, clarification, Etienne. I had SST, which went down to EUR 5 million as of Q2. Now you're saying Q3. Is that being pushed back with regards to your initial expectations? What are you expecting from SST in Q2? Will that be at the same level as Q1? I just want to clarify that. Next, a question on the figures for France. I missed the start of the call, so perhaps you went over these details, but this 7.2%, if you could detail this. The basis for comparison and then the ramp-up of a certain contract that you won last year and then the boost from aeronautics. What does this look like? Or what would be the normative run rate for France for the coming quarters?
Last question, if you could just come back to the U.K. and Belgium, where there's been discussions with governments with regards to contracts. I just wanted a bit of reassurance with regards to what's going on, that this is not gonna impact the public sector business in Belgium and in the U.K.
Thank you, Laurent, for these three questions. For the first question, the impact of SST. I had the second half in mind, but we're talking about EUR 5 million in Q2 going forward. The growth rate in France. Yes, obviously, we're very happy with the performance in France. Rajesh gave the details for the group and for France. The vertical markets are not growing at the same speed. We're driven by Aeroline.
This obviously applies to the group and France growth here. A comparison basis, which was quite favorable. We started the year with a contraction last year, then growth came back throughout the year for Airbus. We've got this favorable basis for the comparison. Obviously, that's going to progressively be eliminated. Then for defense as well, that's holding up well. Defense, security, and space driven by our activities that came from the CS Group. Consulting is rebounding as well, struggling last year in France. With the public sector, obviously, we know the reason for this. The budget was voted late. This year, once again, the budget was voted late, our customers in the public sector have anticipated the matter.
We've got a clear round rebound in the public sector, which we observed as of Q4 last year, and it's been confirmed in Q1. It's difficult to give you the split, or give you the rebound or the basis for comparison. Perhaps in financial sector, we can say that the contract that we signed last year. We've got like a commercial momentum going here with positive momentum, linked to the good business that we started last year. The only sector that is slightly contracting but mid-single digit, that is energy and telcos, which is slightly below the other sectors.
For the nine months remaining, we should expect 4% or 5% organic?
No, there's mechanically, the basis for comparison will be less favorable, but we should expect a single-digit growth. The last question on the contract in the U.K. and Belgium. Today, we haven't really observed an issue linked to these projects. Belgium, the i-Police program that was unilaterally stopped by the federal police in Belgium. We've known about this for two years now, so there's very little revenue that's been recorded. I was in Belgium myself. I met some customers. It's more a political matter. Today we don't see an impact on Belgium. Or in the U.K. with regards to these matters.
Just to be clear, there's no other issues with other public sector tenders?
No, none at all. In the two regions? No.
Thank you. Next question comes from Derric Marcon at Bernstein. Your line is open. Over to you.
Good morning, gentlemen. I've got several questions. The first is on the U.K. Could you give us a little bit more detail on performance? You've given some qualitative comments on NHS, SBS, and NS&I, could we have a little bit of a breakdown that we usually get between the platforms, SSCL, NHS, private, public sector, a little bit more granularity with regards to the 4% growth in Q1. For Aeroline in France, is there a one-off impact here which won't last, which won't be ongoing into coming quarters? Or is investment restarting at Airbus and it's gonna be sustainable? Obviously some things were discontinued or stopped in 2025.
Are they going again in 2026? Then third question on headcount. When we look at the sequential, we don't see growth, we see a contraction. How can we link the good performance in terms of organic growth displayed in Q1 and the fact that in terms of sequential net hiring, we're not seeing the same trend. Could you give us some details on the strong increase in offshore that we've seen in previous quarters? What's linked to NS&I? What's linked to other customers? How is it working with your global delivery centers? Thank you.
I'll take the first question for the U.K. The growth rate in the U.K., 4.2%, isn't that different. NHS was a little bit above that, about 5%. For former SSCL and the rest of the business, this is about the level, about 4% for the U.K. For Aeroline in France, driven by Airbus, but not just Airbus. We already said at the start of the full-year publication, we've seen the recovery of Airbus starting from the summer of 2025. We've got midterm outlook. Perhaps you heard the Airbus call yesterday. We've got midterm outlook, which is positive. They've got some production issues to deal with in the short term. This is nothing new. That's well known. I think all of the value chain will benefit from this recovery, which isn't short term. Obviously, quarter by quarter, we'll have a comparison basis which is more favorable in Q1.
That will progressively be eliminated, but we should see growth in the coming quarters. That's what we think today. The third question on headcount. If we look at internal headcount, which are disclosed, they're up in the figures that you've had. We've also got subcontracting, and our subcontracting rate is up. We've had to ramp- up quite quickly on various contracts. We are recruiting significantly, but for obvious reasons, we have to be able to manage risks. We have to increase the subcontracting rate, which is up versus the end of last year and the end of this quarter. The last quarter on offshore. A significant part linked to NS&I, including the transfer of staff. Apart from that, we're not expecting a strong increase in offshore activity.
It will continue at a normal pace. I don't have all the history. We've got good momentum. Nothing exceptional going on here.
Clear. For the U.K., if we take all the business lines at about 4%. NHS slightly above that, we've seen contract ramp-ups, which could explain a Q1 performance, which explains why the performance is where it is, and it might continue in the coming quarters. Can we just have an explanation of the booster or a bit of information on the contracts that started last year? Where is the growth coming from? Is this something that's going to last throughout the year?
I'm gonna give you the same comment that Rajesh gave for the full-year. We've got like a bumpy year in the U.K. You don't need to look at a snapshot for the quarter. Take a step back. We're not expecting a standardized growth, a standard level of growth quarter- by- quarter. We've got a highly favorable basis for comparison in Q1. It'll be different in Q2. There's different factors that impact the U.K., NHS double-digit growth in Q2 2025 compared with 2024. We're expecting a flat year in the U.K. Very clear.
Thank you.
Just as a reminder, if you'd like to ask a question, please dial # five on your telephone keypad. The next question comes from Wolfgang Specht from Berenberg. Please go ahead.
Yes. Hello. Good morning. Two additional ones from my end. First one on local market, Germany, Belgium, and Netherlands. You expected improving trends in the coming quarters. Can you elaborate a little bit what are your expectations based on? Are there new contract starts or ramp-ups we should expect? On daily rates, do you see any potential for, let's say, selected improvements in some regional markets or in selected industries? Are customers currently rather reluctant to accept step-ups?
For the first question on growth rates expected in Germany, Netherlands, and Belgium. In these three entities, we saw a contraction throughout every quarter in 2025, even if the pace of this contraction did improve in Belgium at the end of the year. We're starting 2026 with a modest contraction, a lot lower than the levels we saw last year. Low single digits in terms of negative growth. We're expecting for these three entities, we're expecting a progressive improvement for Germany, Belgium, and the Netherlands, which could lead us to this, to growth in the second half of the year in these three geographies, so Germany, Belgium, and the Netherlands. That's my comment on those regions. Your second question on daily rates. We've got very low inflation at the moment in Europe.
Obviously, there are differences between the different countries, but they're about 1.5% France. Low inflation in terms of salaries. We're gonna have to be very disciplined here. The increase in daily rates is going to be moderate this year, same applies to the increase in our costs.
Thanks a lot
The next question comes from Laurent Daure from Kepler Cheuvreux . Over to you.
Thank you. Just a follow-up question. If you could just give us an update on Ordina on the two geographical regions. There were some integration issues in Belgium, between the three different subsidiaries. In Belgium, is everything under control in terms of organization? Then for the Netherlands, fewer integration issues, but the turnover had slipped. What means that today, you've got a recovery? Is it the market, or have you changed? I think there was a change in CEO. Has this enabled you to have more confidence?
Yeah. In Belgium, we had a difficult integration. There were three entities, Sopra, Tobania, and Ordina, of roughly the same size, so the integration here. We had a difficult context, but now the new organization is in place. We have the new CEO who's taken over since September and the new organization. I myself traveled to Belgium last week, and we confirm that the situation is under control and the contraction that we've experienced will be reversed. As Etienne said, we will return to growth. For the Netherlands, as you've said, we haven't had any integration issues, but there was a problem linked to the organization. There was a Benelux CEO. We've reorganized the activity. We've got a CEO in Benelux. We have a CEO for the Netherlands. We've recruited a new CEO who arrived in September as well. He got off to a great start within the company.
Today we, in the Netherlands, we've got lots of activities linked to resources, so with strong acquisition, obviously. Mechanically, this is linked to turnover if we haven't replaced people. We've seen a significant reduction, the attrition. This is under control. This is more linked to the changes we've made rather than market activity.
Okay. Thank you.
There are no more questions for the time being. I'll hand the floor back to Mr. Krishnamurthy for the conclusions.
Thank you very much for your questions, and we'll be seeing you in three months. Thank you very much and goodbye.