EuroBusiness Media (EBM): Steria, a leading European provider of IT-enabled business services, reports its full-year results for 2011. François Enaud welcome, you are the Chairman and CEO of Steria. What are your comments on your 2011 performance, in particular in terms of revenue growth?
François Enaud: First of all, we achieved our target. We have increased our organic growth, versus what it was in 2010, by +3.3%. In the UK, the growth has been positive, as expected. In France, the growth has been very dynamic all over the year, at +4.4%. In Germany, +1% growth, despite the weak activity in the Banking sector. And finally, in other European countries we experienced a growth of +9%, very solid growth, particularly driven by the performance in Scandinavia. Interestingly, we had a good and solid Q4, despite the very challenging European environment, with +2.3% organic growth and with bookings at €550 million, very similar to 2010. For the full-year basis, our bookings were very similar to the year before.
EBM: And what about the growth of your profitability?
François Enaud: The profitability in 2011 was good, notably with an increase of the operating margin rate, at 7.4%, 30 basis points above 2010. We benefitted from this performance, from a very solid profitability in Germany, up by 110 basis points, a further improvement in the UK, and an improvement as well in France. Despite an increase of our restructuring costs during the year, we have significantly improved our net attributable result by +26%. And the fully diluted earnings per share have increased by +23%. It is important to notice that this €55 million net result is our highest historic performance.
EBM: And what were the main trends by geographical zone?
François Enaud: Starting with the UK, the growth has been driven by the Public Sector with +4% and the BPO (Business Process Outsourcing) with +16% growth. The bookings, notably in Q4, increased by +8%, with a book-to-bill for the full-year at 1. And importantly, our UK model remains very solid, with a new improvement of profitability at 10.6%, 20 basis points above 2010. In France, the growth has been supported by the Public Sector, Banking and Insurance. The bookings have increased by +11%, with an improvement of the operating margin of 10 basis points. In Germany, the growth has been supported by the Public Sector again, Telecommunications and Transportation as well, while the growth has been negative in the Finance sector. However, the bookings were excellent last year in Germany, up by more than +20%, notably in the Banking sector with our two new first successes for the Application Management contract for two large banks. And the profitability has increased by 110 basis points at 7.7%. For the other European countries, in Scandinavia, in Belgium, in Switzerland, the growth has been double digit, more than +10%, especially driven by the Public Sector again, while in Spain the decrease in revenue has been reduced to -5%.
EBM: Your financial structure has improved. What is your view of your balance sheet today?
François Enaud: That is right that the Group’s indebtedness has significantly decreased since 2007, the year of the acquisition of Xansa. Our net debt represents now only 0.8 times the EBITDA and 16% of our shareholders’ equity. We have also renegotiated our bank credit lines in June of last year, for a value of a total amount of €600 million, which enables us to secure the financing of the Group until June, 2016. Moreover, we’ve gained flexibility in this new contract, new credit lines, which enables us to envisage with full serenity the refinancing of our hybrid convertible bond in January, 2013.
EBM: And finally, what is your outlook, and what are your growth and margin targets for Steria in 2012?
François Enaud: First of all, the environment remains quite uncertain for 2012, especially for the first semester. Furthermore, we will finalise our transformation programmes engaged in 2010 to globalise all our processes, offerings and tools within the Group. In this context, our objectives for 2012 are to have a slight revenue organic growth, operating profitability above 7%, comparable to the ones of the last three years, and free cash flow back to a normative level.
EBM: François Enaud, Chairman and CEO of Steria, thank you very much.
François Enaud: You’re welcome.
