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Author: Kate Hanaghan
Yesterday, French IT services company Steria released its Q1 revenue figures. Pro-forma growth was 8.6%, taking revenues to €303.2m in the quarter. In its home territory, revenues increased 13.4% to €130.2m. In the UK, its second-largest territory, revenues grew 10.9% to €70.3m, while Germany registered 5.9% growth to €47m. No profit figures were released - as is the norm for French companies - although the company did reiterate its intention to generate an operating margin of more than 7% in 2006.
Each of Steria's three main geographies registered significant improvements over Q1 2005. In the UK, growth of almost 11% came as a result of improvements towards the end of 2005 and into 2006. For FY 2005, the UK registered a revenue decline of 1.5%. Its £250m win at the UK's National Probation Service (October 2005) was not only welcome business, but further evidence of its increasing strength in criminal justice. Expect to see Steria move up our ranking of players in this area.
Germany also faired well, which reflects well on the company's decision to buy Mummert. However, it was France that really stole the limelight, with growth of 13.4%. Growth in the company's outsourcing business (which grew 9.8%) was driven partly by France and partly by the UK. Meanwhile, the consulting and SI business increased by 7.7% - compared with 4.6% for FY 2005 as a whole.
Clearly progress has been made in its three main geographies on an individual basis. But that in itself does not make Steria a "pan-European" force. We understand that internal efforts are underway to link up the countries more effectively, and we look forward to seeing how this plays out.
Steria says orders in Q1 showed a 'significant increase' and that its objective to hit an operating margin of above 7% remains in place. That's positive news, which bodes well for the remainder of H1.
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