URD 2022

Corporate name: Sopra Steria Group

Until 2 September 2014, the name of the Company was “Sopra Group”. As a result of the successful public exchange offer made by Sopra Group for the shares of Groupe Steria SCA (see press release dated 6 August 2014), the Board of Directors met on 3 September 2014, with Pierre Pasquier presiding, and recorded the entry into effect of several resolutions conditionally adopted at the General Meeting of 27 June 2014.

Among the consequences of the implementation of these resolutions was the change in the corporate name from “Sopra Group” to “Sopra Steria Group”.

Registered office: PAE Les Glaisins, Annecy-le-Vieux, 74940 Annecy – France. Phone: +33(0)4 50 33 30 30.

Executive Management: 6 avenue Kleber, 75116 Paris – France. Phone: +33(0)1 40 67 29 29.

Legal form: French société anonyme.

Company website: https://www.soprasteria.com

Date of incorporation: 5 January 1968, with a term of fifty years as from 25 January 1968, renewed at the General Meeting of 19 June 2012 for a subsequent term of ninety-nine years.

Country where the entity is incorporated: France

Country where registered office is located: France

Name of the parent company: Sopra Steria Group

Name of the controlling company: Sopra Steria Group

Principal entity: Sopra Steria Group

Corporate purpose: “The Company’s purpose is:

To engage, in France and elsewhere, in consulting, expertise, research and training with regard to corporate organisation and information processing, in computer analysis and programming and in the performance of customised work.

The design and creation of automation and management systems, including the purchase and assembly of components and equipment, and appropriate software.

The creation or acquisition of and the operation of other businesses or establishments of a similar type.

And, generally, all commercial or financial transactions, movable or immovable, directly or indirectly related to said corporate purpose or in partnership or in association with other companies or persons” (Article 2 of the Articles of Association).

Commercial registration: 326 820 065 RCS Annecy

Place where legal documents may be consulted: Registered office.

ISIN: FR0000050809

Legal Entity Identifier (LEI): 96950020QIOHAAK9V551

Financial year: From 1 January to 31 December of each year.

Explanation of the changes to the name of the entity presenting the financial statements after the end of the previous reporting period: N/A

Appropriation of earnings according to the Articles of Association

“An amount of at least five per cent shall be deducted from the profit for the financial year, reduced by prior losses, if any, in order to constitute the statutory reserve fund. Such deduction shall cease to be mandatory when the amount in the statutory reserve fund is equal to one-tenth of the share capital.

Profit available for distribution comprises the profit for the year less any losses carried forward and amounts allocated to reserves, pursuant to the law and the Articles of Association, plus retained earnings.

The General Meeting may deduct from this profit all amounts that it deems appropriate for allocation to all optional, ordinary or extraordinary reserves, or to retained earnings.

The balance, if any, is apportioned at the General Meeting between all shareholders in proportion to the number of shares that they own.

The General Meeting may also decide to distribute amounts deducted from the reserves at its disposal, expressly indicating the reserve items from which the deductions are made. However, dividends shall first be withdrawn from the profits for the financial year.”

(Excerpt from Article 37 of the Articles of Association).

Backed by our strong entrepreneurial culture and our sense of collective purpose, we work every day to deliver a range of solutions, from consulting to systems integration, on behalf of our clients. We aim to be the benchmark partner for large public authorities, financial and industrial operators, and strategic companies in the main countries where we operate. We focus on being relevant at all times and ensuring that our impact is a positive one, both for society and from a business perspective.

In 2022, the digital services market in Western Europe was worth an estimated $311 billion(1), up 9.5%(2). For 2023, Gartner predicts growth of 8.0% (at constant US dollars).

Three countries (the United Kingdom, Germany and France) account for 59% of IT services spending (1).

According to market research, in 2022 the market (1) grew by 9.3% (2) in France, 9.3% in Germany and 9.1% in the United Kingdom. For 2023, growth is expected to continue, amounting to 7.7% in France, 7.9% in Germany and 7.3% in the United Kingdom.

Gartner expects this trend to continue over the next few years, with market growth in Western Europe estimated at around 7% to 8% per year between 2023 and 2026.

In terms of business segments, according to Gartner, consulting was up 11.1% (2) in 2022 and implementation services grew by 11.8%. The Group’s other activities also experienced a year of growth: Outsourced infrastructure and cloud services were up 6.9%, with business process outsourcing up 9.7%.

For 2023, Gartner predicts growth of 9.2% in consulting, 6.9% in implementation services and 8.3% in outsourced infrastructure and cloud services. Business process outsourcing is expected to grow by 7.2%.

Furthermore, the IT services market remains fragmented despite some consolidation, with the leading player in the European market holding a 5% share. Against this backdrop, Sopra Steria is one of the 12 largest digital services companies operating in Europe (excluding software) with an average market share of just under 2%. In France (second in the market) and in Norway (fourth in the market), the Group’s market share is over 5%. In the other major European countries, its market share is around 1%.

Sopra Steria’s main competitors in Europe are: Accenture, Atos, Capgemini, CGI, DXC and IBM, all of which are present worldwide. It also faces competition from Indian groups, chiefly in the United Kingdom (such as TCS, Cognizant, Wipro and Infosys), and local companies with a strong regional presence (Indra in Spain, Fujitsu in the United Kingdom, Tietoevry in Scandinavia, etc.). Apart from its services business, listed rivals such as Temenos and Alfa Financials also command a significant presence in the software market, where Sopra Steria is also present, especially in banking.

Sopra Steria, a European leader in consulting, digital services and software development, helps its clients drive their digital transformation and obtain tangible and sustainable benefits, thanks to one of the most comprehensive portfolios of offerings on the market, encompassing consulting and systems integration, business and technology solutions, hybrid cloud and technology services, cybersecurity and business process services.

The Group provides end-to-end solutions to make large companies and organisations more competitive by combining in-depth knowledge of a wide range of business sectors and innovative technologies with a fully collaborative approach: from strategic analysis, programme definition and implementation, and IT infrastructure transformation and operation, to designing and implementing solutions and outsourcing business processes.

For Sopra Steria, helping clients succeed in their digital transformation means breaking down their strategic and business challenges into digital initiatives through an exclusive end-to-end offering. Thanks to very close relationships with its clients and its multi-disciplinary teams, the Group is able to continually innovate to guarantee that its offerings remain relevant to the strategic challenges of each of its vertical markets.

Sopra Steria’s teams are trained in the new microservices platforms, DevOps and cloud computing. They are also adopting new methods of designing, delivering and embedding teams. Sopra Steria is therefore able to offer the two key ingredients for successful digital transformation: speed of execution and openness to external ecosystems.

Sopra Steria Group is also the preferred partner of Axway Software, whose exchange and digital enablement platforms play an important role in modernising information systems and opening them up to digital technology.

Sopra Steria is an independent Group whose founders and managers control 22.3% of its share capital and 33.7% of its theoretical voting rights. With nearly 50,000 employees in nearly 30 countries, it pursues a strategy based on European key accounts.

Sopra Steria Next, the Group’s consulting brand, is a leading consulting firm. Sopra Steria Next has over 40 years’ experience in business and technological consultancy for large companies and public bodies, with over 3,000 consultants in France and Europe. Its aim is to accelerate the development and competitiveness of its clients by supporting them in their digital transformation while addressing their sustainability challenges in keeping with our clients’ Corporate Responsibility policies. This support involves understanding clients’ business issues using substantial sector-specific expertise, and then working to design transformation roadmaps (business processes, data architecture, change management, etc.) to make the most of new digital technologies. It involves supporting the information systems departments of our clients, grasping their new challenges, assisting them with their overall transformation projects as well as the modernisation of their legacy systems.

Systems integration is Sopra Steria’s original core business, and covers all aspects of the information system life cycle and major transformation programmes. Sopra Steria is equipped to address the full range of its clients’ software asset needs:

Sopra Steria’s teams help their clients implement agile and industrial-scale projects. The Group undertakes to design and deliver systems in line with business requirements that are flexible and adapted to the new requirements of digital transformation as well as sector-specific regulatory constraints. This is made possible by working closely with the Sopra Steria Next teams.

In addition to standard information systems maintenance, Sopra Steria takes a continuous transformation approach to these systems to guarantee optimised operational efficiency for its clients, suited to changes in their business. The transformation approach includes a well-equipped and documented procedure making it possible to combine the issues involved in reducing the time to market with improved competitiveness and continuity of service.

Once the systems and technologies are implemented, the information system gives access to reliable, relevant and critical data, offering better analysis of user satisfaction and optimisation of service performance.

With the increasing number of diverse data sources relating to fundamental changes in use, data is more valuable to the company than ever. To increase the value of this data, Sopra Steria has developed specific know-how and expertise to manage the exponential growth in data volumes and associated skills (data science, smart machines, automation, artificial intelligence) by integrating them in a global solution, securing the data regardless of its origin (mobile devices, smart objects, data privacy, the cloud, multimodal and multichannel systems, etc.) and using the data by means of contextualised algorithms.

The Group’s systems integration offering thus meets the challenges posed by both the obsolescence and modernisation of information systems, ensuring optimal flexibility and value creation.

CIMPA provides comprehensive expertise via its PLM offering, which covers all the various facets of PLM services:

• ■PLM strategy creation or optimisation;
• ■deployment of strategy-related tools, processes or methods;
• ■user training and support.

With over 6,000 experts worldwide and more than 15 years’ experience in developing our outsourcing service centres in Europe and India, Sopra Steria – a leader in the hybridisation of information systems and a major player in digital transformation – provides support for all technological, organisational and security-focused information system transformation projects. Our main activities encompass consulting, transforming infrastructure and operating models, and managing hybrid cloud activities.

Our area of expertise covers two service categories that are essential to support information system transformation for our clients:

• ■Hybrid IT Services: A comprehensive range of shared transformation services and innovative, customisable operations to help IT departments adopt a hybrid model that combines cloud-based solutions with legacy systems and achieve their goals in relation to agility, availability and performance. Our catalogue of integrated services lets us provide end-to-end management of our clients’ applications in hybrid environments, as well as changes to these applications and interconnections with applications hosted in public and sovereign cloud environments.
• ■User Experience Services: A smart shared services platform providing users with office and application support built around knowledge of their business and drawing on AI-based digital solutions to offer a seamless experience.

Our consultants and experts are able to co-manage and run complex transformation projects and design and help roll out innovative technology solutions in response to clients’ business issues.

With over 1,400 experts and several state-of-the-art cybersecurity centres in Europe and worldwide (France, United Kingdom, Singapore, Norway, Belgium, Poland, India), Sopra Steria has an international reach as a European leader in protecting critical systems and sensitive information assets for major institutional and private clients.

By absorbing EVA Group in 2022, Sopra Steria strengthened its capability in client-focused consulting and expertise and expanded its international presence (in the Asia-Pacific region, the US and Canada).

Through its comprehensive offering, the Group is able to address the entire cybersecurity value chain:

• ■Prevention: Drawing up a cybersecurity strategy that is adapted to the risks of the business and complies with the regulations in force, and spreading a culture of security within the organisation;
• ■Protection: Ensuring the continuous monitoring of assets by securing multi-cloud and hybrid environments, end-to-end encryption of applications and sensitive data;
• ■Detection and response: Adopting an overall defence strategy that mobilises all stakeholders to work together (detection, response, cyber threat intelligence, investigation, vulnerability management, etc.) towards a shared goal – recognising attackers and countering cyberattacks.

Drawing on this framework and our specific areas of expertise, we have developed offerings designed to address our clients’ priority concerns:

• ■Crisis management and cyber resilience, cloud security, industrial security, and IT and information systems security strategy

Sopra Steria’s business model based around value centres and products is designed to maximise the cyber value of the services delivered by the Group. It can be rolled out locally, through service centres (in France, nearshore in Poland and offshore in India) or in hybrid form, with “follow-the-sun” capability.

Sopra Steria offers its business expertise to clients via packaged solutions in three areas: banks and other financial institutions via Sopra Banking Software, human resources via Sopra HR Software, and real estate owners and agents with its property management solutions. The Group offers its clients the most powerful solutions, in line with their objectives and representing the state of the art in terms of technology, know-how and expertise in each of these three areas.

Drawing on its technologies and the strength of its commitment, Sopra Banking Software, a wholly-owned subsidiary of the Group, supports its clients – financial institutions – all over the world on a daily basis.

The customer experience, operational excellence, cost control, compliance and risk reduction are among the key transformation priorities for:

• ■banks in Europe and Africa: From direct- and branch-based retail banks and private banks to microfinance companies, Islamic financial institutions and centralised payment or credit factories;
• ■financing and lending institutions around the world: Serving individuals and companies, the automotive and capital goods sectors, as well as equipment and real estate leasing and even market financing.

With over 5,000 experts and more than 50 offices worldwide, Sopra Banking Software addresses its clients’ challenges across all geographies and in all business areas, covering issues such as communicating new offerings, the quality of customer relationships, production, accounting integration and regulatory reporting.

Sopra Banking Software offers two kinds of services: Sopra Banking Platform, intended to respond to banks’ day-to-day needs, and Sopra Financing Platform, which specialises in managing financing:

• ■Sopra Banking Platform is a banking processing platform that relies on an architecture of independent and pre-integrated business components. It makes it possible to manage all banking operations (deposits and savings, management of the loan life cycle, payments, reporting) and offers innovative features in a digital and mobile environment;
• ■Sopra Financing Platform is a flexible and robust financing management platform able to deal with all types of financing tools within the framework of advanced process automation.

These solutions can be used either on-site at the client’s premises, on the cloud (public or private) or in SaaS mode.

An end-to-end provider, Sopra Banking Software offers solutions as well as consulting, implementation, maintenance and training services. This means that financial institutions are able to maintain their day-to-day operations while shifting towards greater innovation and agility, with the aim of securing sustainable growth. Through its market-leading solutions backed by more than 50 years of experience in its field, Sopra Banking Software is committed to working with its clients and staff to build the financial world of the future.

Sopra Steria Group also develops human resource management solutions via Sopra HR Software (a wholly-owned subsidiary of Sopra Steria). Sopra HR Software is present in 10 countries, providing comprehensive HR solutions perfectly suited to the needs of human resources departments. Sopra HR Software currently has a workforce of 1,800 people and manages the payrolls of 900 clients with over 12 million employees.

Sopra HR Software is a partner for successful digital transformation of companies and anticipates new generations of HR solutions.

The Sopra HR Software offerings are based on the most innovative business practices and cover a wide range of functions, including core HR, payroll, time and activity tracking, talent management, staff experience, and HR analytics. The offering is based on two product lines, HR Access® and Pléiades®, aimed at large and medium-sized public or private organisations in any sector and of varying organisational complexity, irrespective of their location. In response to new hybrid working patterns, the new generation of Sopra HR 4YOU solutions offers a fully digital HR space that helps businesses stay closely connected with their employees and optimise HR performance and the quality of HR services.

Within Sopra HR Lab, Sopra HR anticipates the emergence of innovative HR solutions.

Sopra HR Software, a comprehensive service provider, offers a number of services linked to its solution offering and its HR ecosystem. Sopra HR Software supports its clients throughout their projects, from consulting through to implementation, including staff training, maintenance and business process services (BPS).

Sopra HR Software implements its own solutions either on-premise or in the cloud and also offers a wide range of managed services.

Sopra Real Estate Software is the leading developer, distributor, integrator, and service manager of property management software in France. Sopra Steria offers major public and private sector real estate players (institutional investors, social housing operators, property management firms, property managers and major users) comprehensive business software solutions providing a huge range of functionality.

Sopra Real Estate Software’s 700 real estate experts help our 400 clients realise their digital transformation so as to boost their return on assets, optimise practices and strengthen relationships with tenants and service providers.

Sopra Real Estate Software also offers a technical real estate asset management solution that is particularly well suited to helping our clients better understand their assets and manage their energy performance.

From property management to building information management, we offer a range of solutions built around providing digital real estate services to tenants and partners.

Sopra Real Estate Software supports its clients with an end-to-end service offering based on its solutions, from consulting to integration and managed services.

Sopra Steria offers a full range of business process services (BPS) solutions: consulting for the identification of target operating models, development of transition and transformation plans, and managed services.

Sopra Steria manages two of Europe’s largest shared services organisations. Shared Services Connected Limited (SSCL) is a unique joint venture between Sopra Steria and the UK Cabinet Office. Sopra Steria provides a full range of business support services to major government departments, the police and UK government agencies. NHS Shared Business Services is a joint venture between Sopra Steria and the Department for Health and Social Care that provides support services to NHS trusts and UK health bodies.

Our BPS offering goes hand in hand with digital transformation. Digital technologies have opened up opportunities for improving key business processes in all organisations. Whether they involve robotics, chatbots, automatic natural language processing (NLP) or artificial intelligence (AI) more widely, digital technologies can streamline the execution of processes, cut their costs and lead to new approaches.

Sopra Steria has forged relationships with major providers of digital solutions for BPS. 

Furthermore, we enjoy a strong presence in the technology ecosystem, both in France and worldwide. We thus have access to a dynamic network of partners as well as a singular ability to identify innovative solutions owing to our connections with the world of technology startups. We combine our own platforms with those of our technology partners to provide the right level of innovation within our design/production/operation services. Our specialised design teams work to ensure the best possible client experience for end-users and we offer our clients ways to considerably improve process efficiency by leveraging intelligent automation and machine learning. Thanks to our technology assets, we are helping to develop tomorrow’s operating models.

Sopra Steria employs many consultants and practising professionals with expertise in BPS and the digital sector. They help organisations make the best use of new digital technologies to transform their activities, from their operating models to their processes and end-user services. Our ability to handle transformation in both its human and business dimensions allows us to support our clients wherever their digital journey takes them, helping them to move from a theoretical perspective on possible solutions to a focus on specific technologies. We eliminate inefficient practices, reorganise tasks and improve results for each activity entrusted to us, whether it involves individual business processes or highly complex shared services. Added to this is the experience of our employees in change management, which is essential to the success of any transformation. In the various BPS areas, we can provide the services ourselves or work in tandem with the client’s personnel to carry out the engagement. In these cases, we invest in these individuals to help them become more effective and productive, sharing our best practices with them.

Sopra Steria operates two of the largest shared service centres in Europe, taking charge of multiple business processes each day on behalf of end-clients.

Sopra Steria’s ambition is to be a European leader in digital transformation. Its high value-added solutions, delivered by applying an end-to-end approach to transformation, enable its clients to make the best use of digital technology to innovate, transform their models (business as well as operating models), and optimise their performance.

The Group’s aim is to be the benchmark partner for large public authorities, financial and industrial operators and strategic companies in the main countries in which it operates.

To achieve this aim, Sopra Steria continues to strengthen its key competitive advantages:

• ■business software solutions which, when combined with the Group’s full range of services, make its offering unique;
• ■a position among the leaders in the financial services vertical (core banking and specialist lenders) bolstered by the success of the Sopra Banking Software solutions;
• ■very close relationships with its clients, thanks to its roots in the regions where it operates and its ability to meet core business requirements;
• ■a strong European footprint with numerous locations in many of the region’s countries which, when combined with these close relationships, raises its profile among large public authorities and strategic companies throughout Europe as a trusted and preferred partner for all projects involving digital sovereignty.

Lastly, the Group’s mission statement – formally adopted in 2019 – reflects both its values and its desire to help meet the Sustainable Development Goals of the Company and its stakeholders: “Together, building a positive future by making digital work for people.”

Cyril Malargé, Chief Executive Officer of Sopra Steria Group, commented:

“Our strong performance in 2022 puts us on track to achieve our medium-term goal: delivering an operating margin on business activity of around 10% in 2024 and being among the top-performing players in our sector. As regards the financial targets set at the beginning of the year, we achieved our profitability target and exceeded our growth and cash flow targets. We also ramped up implementation of our strategy in 2022. We began to strengthen our business in areas where sovereignty issues are becoming increasingly important (defence, space, energy, cybersecurity, etc.), and at the same time, we worked to grow our market share in those European countries we consider strategic for our future development. We reviewed our operating model and reinforced leadership in our consulting business. We boosted our operational efficiency on multiple fronts: through the value we deliver to our clients, efficient management of our human resources, optimisation of our costs and an increased return on capital employed. Lastly, I’m proud to point out that, alongside this uplift in performance, we once again improved our score on our annual Great Place To Work® survey and were confirmed as being on CDP’s A List(6) for the 6th year running."

Financial year 2022 brought a further uplift in the Group’s profitability. Six entities accounting for 74% of total revenue have now achieved an operating margin on business activity of 10% or higher. 

Consulting also delivered strong growth in 2022, with revenue up more than 18% at €435 million. Reflecting this strong trend, our average selling price increased by around 5% and the number of consultants rose by 400. The arrival of a Group Executive Director for consulting in October 2022 and a reorganisation to bring all our consultants in France together into a dedicated business unit will further boost our momentum and deliver higher added value.

The proposed acquisition of CS Group, announced in the middle of the year, is in line with our strategic goal of strengthening Sopra Steria’s positioning in digital sovereignty and trust for major European clients. The finalisation of this acquisition in 2023 will position the Group as a major player in defence and space (c. €700 million in revenue), aeronautics (c. €600 million), energy and utilities (c. €350 million) and cybersecurity (over €200 million).

The proposed acquisition of Tobania in Belgium will double the Group’s presence (over €200 million in revenue) in a country considered strategic in Europe in light of its market potential and the presence of European institutions.

We took a number of steps to boost our operational efficiency. We sought to move our offerings further up the value chain wherever possible and average selling prices rose across our business lines. We embarked on a programme to reduce our real estate footprint. We also ramped up the expansion of our offshore resources: the number of employees based in India rose by 14.2% in the year, compared with a 4.7% increase in the workforce as a whole. Consequently, resources at international service centres now account for 19% of the total workforce (up 0.6 points from 2021). These various factors contributed to the improvement in profitability and improved our return on capital employed, which rose 2.7 points to 14.1%(7).

Consolidated revenue totalled €5,101.2 million, an increase of 8.9%. Changes in scope had a positive impact of €46.9 million, and currency fluctuations had a positive impact of €12.2 million. At constant scope and exchange rates, revenue growth was 7.6%. The fourth quarter was one of the most buoyant in the year, with revenue up 8.0%.

Operating profit on business activity came to €453.1 million, up 19.5% relative to 2021. Operating margin on business activity increased by 0.8 points to 8.9% (8.1% in 2021).

The France reporting unit (40% of the Group’s revenue) generated revenue of €2,039.0 million, representing organic growth of 9.7%. Business remained buoyant in the fourth quarter, with revenue up 9.5%. This performance was driven throughout the year by product life cycle management, cybersecurity and consulting, including in the fourth quarter, when consulting revenue was up 22%. The best-performing vertical markets were aeronautics, defence and transport. The reporting unit’s operating margin on business activity improved by 1.4 points to 10.0%. 

Revenue for the United Kingdom (18% of the Group’s total) was €890.6 million, representing organic growth of 7.3%, while growth in 2021 had already been very high (13.9%). The two joint ventures specialising in business process services for the public sector (NHS SBS and SSCL) delivered average growth of 3.8%, with revenue coming in at €455.8 million. The defence and security sector was up 20.6% and the public sector 7.5%. The private sector posted full-year growth of 5.7%. The reporting unit’s operating margin on business activity improved by 1.4 points to 10.5%.

The Other Europe reporting unit (29% of Group revenue) posted organic revenue growth of 8.3% at constant scope and exchange rates to €1,473.0 million. The fastest growth was seen in Scandinavia and, to a lesser extent, Benelux, Spain and Italy. The situation in Germany normalised in the second half of the year. The reporting unit’s overall operating margin on business activity was 6.2% (7.8% in 2021). Countries in the reporting unit generated a full-year margin of almost 8% after the margin returned to nearly 10% in the second half. Sopra Financial Technology had a slightly more dilutive effect in 2021. 

Revenue for Sopra Banking Software (8% of Group revenue) came to €426.5 million, an organic contraction of 2.3%. This was mainly the result of a decline in services revenue. Meanwhile, software revenue rose 1.3%, notably thanks to a 6.1% increase in subscriptions and resilient licence sales relative to 2021 levels. Revenue from the SBP Digital Banking Suite was up 13%. The R&D transformation programme generated an €10 million saving on development costs in the year, helping the continued turnaround in the reporting unit’s profitability: operating profit on business activity came in at €27.6 million, giving a margin of 6.5% (vs 4.0% in 2021).

The Other Solutions reporting unit (5% of Group revenue) posted revenue of €272.1 million, representing organic growth of 5.6%. Human resources solutions posted growth of 7.2%, while property management solutions grew by 2.2%. Both businesses had a strong fourth quarter, delivering organic growth of around 6%. The operating margin on business activity improved substantially, rising 2.9 points to 13.0% (10.1% in 2021). 

The conditions precedent for the acquisitions of CS Group and Tobania described in Note 2.2 of the Chapter 5 "2022 consolidated financial statements" of this document (page 199) were met after 31 December 2022, on 28 February and 2 March 2023 respectively.

No other subsequent events occurred after the end of financial year 2022. 

Sopra Steria Group’s governance consists of a Board of Directors, Chairman and Chief Executive Officer.

The organisation is supported by a permanent operational and functional structure as well as temporary structures for the management of particular deals and projects.

Sopra GMT, the holding company that takes an active role in managing the Group, takes part in conducting Group operations through:

• ■Its presence on the Board of Directors and the three Board committees.
• ■A tripartite assistance agreement entered into with Sopra Steria and Axway, concerning services relating to strategic decision-making, coordination of general policy between Sopra Steria and Axway, and the development of synergies between these two companies, as well as consulting and assistance services, particularly with respect to finance and control.

The Group’s permanent structure is composed of four operational tiers and their associated functional structures.

On Wednesday, 12 January 2022, Sopra Steria announced the appointment of Cyril Malargé to succeed Vincent Paris as Chief Executive Officer.

Cyril Malargé has served as Chief Executive Officer since 1 March 2022.

The Executive Committee (ExCom) is led by the Chief Executive Officer and consists of the heads of the main operating and functional entities.

The 15 members of Sopra Steria Group’s Executive Committee supervise the Group’s organisation, management system, major contracts and support functions and entities. The Executive Committee is involved in the Group’s strategic planning and implementation. Three of its members are women.

• ■Cyril Malargé, Chief Executive Officer
• ■Laurent Giovachini, Deputy Chief Executive Officer, Business Strategy, Defence & Security
• ■Éric Pasquier, Software
• ■Fabrice Asvazadourian, Consulting – Sopra Steria Next
• ■Yvane Bernard-Hulin, Legal
• ■Éric Bierry, Sopra Banking Software
• ■Pierre-Yves Commanay, Continental Europe
• ■Perrine Dufros, Human Resources Development
• ■Dominique Lapère, Industrial Approach
• ■Fabienne Mathey-Girbig, Corporate Responsibility and Sustainable Development
• ■John Neilson, United Kingdom
• ■Xavier Pecquet, Key Accounts and Partnerships, Aeroline
• ■Mohammed Sijelmassi, Technology
• ■Étienne du Vignaux, Finance
• ■Grégory Wintrebert, France

The Group Management Committee consists of the members of the Group Executive Committee, together with 42 operational directors and functional directors. Eleven of the Group Management Committee’s members are women.

These are the main operating entities. Their scope corresponds to one of the following:

• ■a specific line of business (consulting and systems integration, development of business solutions, infrastructure management and cloud services, cybersecurity services and business process services);
• ■geographic area (country);
• ■these entities are managed by their own Management Committee, comprising in particular the Director and management of tier 3 entities.

Each country or subsidiary is made up of divisions based on two criteria:

• ■vertical market;
• ■geographic area (region).

Each division is made up of business units, which are the organisation’s primary building blocks. They operate as profit centres and enjoy genuine autonomy. They have responsibility for their human resources, budget and profit and loss account. Management meetings focusing on sales and marketing strategy and human resources are held weekly, and the operating accounts and budget are reviewed on a monthly basis.

The diagram below illustrates the four main tiers of the ongoing structure:

The operational organisation is strengthened by operational support entities responsible for managing major transformations:

• ■the Key Accounts and Partnerships Department (DGCP), responsible for promoting the Key Accounts policy and developing relations with partners. The role of this department is to coordinate the commercial and production approaches for our major clients, particularly when different entities are involved;
• ■the Digital Transformation Office (DTO), responsible for designing and managing the Group’s digital transformation. It also manages the Group’s innovation approach;

• ■the Industrial Department, responsible for industrialising working methods and organising subcontracting on X-shore platforms. It also checks that projects are properly executed.

The functional departments are the Human Resources Department, the Marketing and Communications Department, the Corporate Responsibility and Sustainable Development Department, the Internal Control Department, the Finance Department, the Legal Department, the Real Estate Department, the Purchasing Department, and the Information Systems Department.

These centralised functions ensure Group-wide consistency. Functional managers transmit and ensure commitment to the Group’s core values, serve the operational entities and report directly to Executive Management.

The Group’s functional structures standardise management rules (information system resources, IT systems, financial reporting, etc.) and monitor the application of strategies and rules. In this manner, they contribute to overall supervision and enable the operational entities to focus on business operations.

Sopra Steria manages complex and large-scale programmes and projects in a market where delivery commitments are increasing and becoming globalised. The Group has an increasingly wide range of skills to support multi-site projects that generate strong gains in productivity with delivery models that guarantee clients an optimal cost structure.

Sopra Steria applies an industrial production approach, supported by five levers:

• ■production culture: Transmission of know-how and expertise in the field;
• ■choice of personnel: Human resources are central to the approach, providing training, support and improved skills for each employee;
• ■organisation: The Industrial Department and its representatives in the business units control production quality and performance, identify and manage risks, support project managers and roll out industrialised production processes;
• ■state-of-the-art industrial-scale foundation: The Delivery Rule Book (DRB), the Digital Enablement Platform (DEP) and the Quality System across the Group’s various entities;
• ■global delivery model: Rationalising production by pooling resources and expertise within service centres, with services located based on the needs of each client (local services and skill centres in various entities, shared service centres nearshore in Spain and Poland, and offshore shared service centres in India).

Risks are identified and the implementation of associated mitigation plans assessed and monitored on an ongoing basis by the various operational and functional units via the risk management system. This system, a pillar of the Group’s risk management system, is based on regular weekly, monthly and annual cycles that are followed at every level of the organisation, corresponding to monthly, annual and multi-year planning horizons (see description in Section 3.3.2 of this chapter, page 47). These cycles help the Group maintain an overall view that takes into account opportunities and risks at every level (strategy, market, operations, social, compliance, etc.). They are synchronised so as to facilitate higher-level consolidation. All engineering methodologies used by the Group’s business lines are predicated on the risk-based approach, helping disseminate this culture at every level of the organisation.

Every year, when the annual cycles take place, information gathered at Group level is used to update the general mapping of risks. This exercise, coordinated by the Internal Control Department, consists of identifying the risks that could limit Sopra Steria’s ability to achieve its objectives and complete its corporate plan, as well as assessing their likelihood of occurrence and their impact should they occur, on a financial, strategic, operating and reputational level.

This assessment is based on contributors’ perceptions, analysis of historical and forecast data and monitoring of changes in the external environment. The main operational and functional managers are involved through interviews and validation workshops. The risk mapping covers all internal and external risks and includes both financial and non-financial issues. Non-financial risks are handled in the same way as other risks.

Risks are assessed on a scale of four levels: very low, low, possible, almost certain in terms of likelihood; and low, moderate, significant, critical in terms of impact. The time frame used is five years.

Specific mapping for corruption and influence-peddling risks and risks relating to duty of vigilance are used in this general risk mapping.

The results of the mapping are reviewed and approved by Executive Management and presented to the Audit Committee of the Board of Directors.

The most significant risks specific to Sopra Steria are set out below by category and in decreasing order of criticality (based on the crossover between likelihood of occurrence and the estimated extent of their impact), taking account of mitigation measures implemented. As such, this presentation of residual risks is not intended to show all Sopra Steria’s risks. The assessment of this order of materiality may be changed at any time, in particular due to the appearance of new external factors, changes in operations or a change in the effects of risk management measures.

For each risk, a description is provided explaining in what ways it could affect Sopra Steria as well as the risk management measures put in place, such as governance, policies, procedures and checks.

The Group’s insurance policy is closely linked to its risk prevention and management practices, in order to ensure coverage for its major risks. The Group’s Legal Department is responsible for the centralised management of its insurance programme.

The aim of Sopra Steria Group’s international insurance programmes is to provide, in compliance with local regulations, uniform and adapted coverage of the risks facing the company and its employees for all Group entities at reasonable and optimised terms. With this in mind, the Company set up its own captive reinsurance company in late 2021.

The scope and coverage limits of these various insurance programmes are reassessed annually in light of changes in the size of the Group, developments in its business activities as well as changes in the insurance market and based on the results of the most recent risk mapping exercise. The insurance programmes provide sufficient coverage for risks with high financial stakes.

All Group companies are insured with leading insurance companies for all major risks that could have a material impact on its operations, business results or financial position.

The most significant insurance programmes are:

• ■premises and operations liability and professional indemnity insurance
  • ●This programme covers all of the Group’s companies for monetary consequences arising as a result of their civil and professional liability in connection with their activities, due to bodily injury, material or non-material damage caused to its clients and third parties.
• ■property damage and business interruption insurance
  • ●This programme covers all of the Group’s sites for the direct material damage to property they may suffer as well as any consequential losses in the event of reduced business activity or business interruption occasioned by the occurrence of an insured event.

Other insurance programmes have also been put in place to cover, among other things, cyber risks, fraud, employer liability and civil liability of senior executives, company officers and employees on business trips.

This section of the report outlines Sopra Steria’s internal control and risk management systems. These systems are based on the reference framework issued by the AMF. A specific subsection addresses the preparation of accounting and financial information.

The management control system is one of the fundamental components of internal control at Sopra Steria. It supports the internal dissemination of information as well as the various reporting and risk management procedures, and the implementation of controls.

In order to address the identified risks presented in the preceding chapter, Sopra Steria has adopted a governance approach as well as a set of rules, policies and procedures together constituting its internal control and risk management system.

In accordance with the AMF reference framework, the internal control and risk management system, which is under the responsibility of the Group’s Chief Executive Officer, is designed to provide reasonable assurance regarding the achievement of objectives in the following categories:

• ■compliance with laws and regulations;
• ■implementation of instructions, guidelines and rules set forth by Executive Management;
• ■proper functioning of the Company’s internal processes, particularly those intended to safeguard its assets;
• ■quality and reliability of financial and accounting information.

The risk management system is designed to identify, analyse and manage the Company’s main risks.

More generally, the Group’s internal control and risk management system contributes to the control of its business activities, the effectiveness of its operations and the efficient use of its resources.

This system is updated on a regular basis, in application of a continuous improvement process, in order to best measure the level of risk to which the Group is exposed as well as the effectiveness of the action plans put in place to mitigate risks.

Nevertheless, the internal control and risk management system cannot provide an absolute guarantee that the Company’s objectives will be achieved and that all risks will be eliminated.

The Sopra Steria Group refers and adheres to the reference framework issued by the Autorité des Marchés Financiers (AMF, the French securities regulator).

By keeping the number of legal entities, and therefore accounting entities, relatively low, the Group can drive reductions in operating costs and minimise risks.

The activities of Sopra Steria’s accounting and finance function are overseen by the Group’s Finance Department, which reports directly to Executive Management.

The responsibilities of the Group Finance Department mainly include the production of the accounts, financial controlling, tax issues, financing and cash management, and participation in financial communications and legal matters.

Each subsidiary has its own finance team that reports functionally to the Group’s Finance Department.

The Finance Department reports to the Group’s Executive Management. As with all other Group entities, it follows the management reporting and controlling cycle described above: weekly meetings to address current business activities, monthly meetings devoted to a detailed examination of figures (actual and forecast), the organisation of the function and the monitoring of large-scale projects.

Executive Management is involved in the planning and supervision process as well as in preparing the period close.

The Board of Directors is responsible for the oversight of accounting and financial information. It approves the annual accounts and reviews the interim accounts. It is supported by the Audit Committee, as described in Section 1.3.3 of Chapter 3, “Corporate governance” of this Universal Registration Document, pages 78 to 80.

The configuration and maintenance of the accounting and financial information system are centralised at Group level. Central teams manage access permissions, and update them at least once a year. The granting of these permissions is validated by Finance teams at the subsidiaries.

All Group companies prepare, at a minimum, complete quarterly financial statements on which the Group bases its published quarterly revenue figures and interim financial statements.

Monthly cash flow forecasts for the entire year are prepared for all companies and consolidated at Group level.

The accounting policies applied within the Group are presented in the notes to the consolidated financial statements in this document. At each balance sheet date, the Audit Committee ensures that these policies and presentation have been applied by the Finance Department and the Statutory Auditors.

The proper use of the percentage-of-completion method to value ongoing projects is monitored on a permanent basis jointly by the Industrial Department and by the Finance Department (Financial Controllers).

This chapter describes the organisation and operation of governance as well as the compensation policy for company officers and its application during financial year 2022. It lists and explains any points of divergence from or partial compliance with the recommendations of the AFEP-MEDEF Code.(1)

On 19 June 2012, the Board of Directors decided to separate the roles of Chairman and Chief Executive Officer. It confirmed this decision in 2018 and 2021. It believes that this separation of roles remains the best way of addressing the Group’s strategic and operational priorities. Given the close relationship between the Chairman of the Board of Directors and the Chief Executive Officer, there is close collaboration and an ongoing dialogue between them. In summary, the current framework contributes to fluid and flexible governance arrangements. It means that the Group is able to act as quickly as needed and ensures decisions are taken with due care, while taking into account strategic priorities.

The Chairman is tasked with managing strategy, while the Chief Executive Officer is responsible for operations.

The Chairman:

• ■guides the implementation of the Group’s strategy and all related matters, including mergers and acquisitions;
• ■assists Executive Management with the transformation of the Group;
• ■oversees investor relations and manages the Board’s relations with shareholders.

The Chief Executive Officer:

• ■works with the Chairman to formulate strategy;
• ■supervises the implementation of decisions adopted;
• ■ensures the operational management of all Group entities.

The Nomination, Governance, Ethics and Corporate Responsibility Committee conducts an annual review of the succession plan for the Chairman of the Board of Directors and the Chief Executive Officer so any unforeseen vacancies can be dealt with appropriately. As part of this process, it meets with the Chairman of the Board of Directors. It makes sure the plan covers existing requirements and the Group’s culture. It assesses the relevance of the proposed changes. It approves the actions laid down in the short- to medium-term plan.

In 2022, the Nomination, Governance, Ethics and Corporate Responsibility Committee conducted its annual review of the succession plan and adapted it to accommodate changes in Group governance.

The Board of Directors is currently chaired by Pierre Pasquier.

The Chairman of the Board of Directors carried out activities on a full-time basis throughout the year. This involved steering the work of the Board and other assignments entrusted to him.

The Chairman’s assignments include the governance of strategy, acquisitions and the Board of Director’s shareholder relations as well as the supervision of matters which were identified early in the year in coordination with the Chief Executive Officer. These matters all relate to long-term preparations required for the Group’s transformation (HR, digital and industrial transformation; key organisational and operating principles for the Group; employee share ownership; promotion of Group values and compliance).

The Chairman is responsible for maintaining balance between the Group’s various stakeholders: shareholders, employees and the community. He ensures that the social and environmental implications of the Group’s business activities are suitably taken into account.

In crisis situations, the ability to rank priorities, uphold the Group’s values, and consider its options from a longer-term perspective thanks to the commitment provided by the core shareholder is absolutely critical.

The various matters placed under the Chairman’s responsibility require a perfect knowledge of operational realities. Close relations with the Chief Executive Officer and the Executive Committee foster information flows between them. It facilitates effective coordination on:

• ■decisions required for the delivery of the medium-term strategic plan;
• ■monitoring of the implementation of such decisions over the long term.

The separation of the roles of Chairman and CEO is based on:

• ■the roles defined in the internal rules and regulations of the Board of Directors;
• ■compliance with the respective prerogative powers of the Chairman and the Chief Executive Officer;
• ■a trust-based relationship established over the long term;
• ■a very good fit between the holders of these positions.

In carrying out all of his assignments, the Chairman may receive support from two advisors and draw on resources across the Group. He is supported by a permanent team of four individuals at the Sopra GMT holding company. Three of them have spent much of their careers with Sopra Steria Group. This team therefore has knowledge of the Group, its main managers and its organisational structure that an external service provider could not have. Its position within Sopra GMT means this team has an outside perspective and greater independence. These resources enhance the Board of Directors’ ability to oversee the smooth running of the Company.

The team was initially formed when Axway Software was spun off. It performs duties for Sopra Steria Group and Axway Software, in which Sopra Steria Group holds an ownership of approximately 32%. Sopra GMT provides both companies with its support and ensures synergies and best practices are implemented.

Sopra GMT’s employees carry out their own duties (oversight of acquisitions, corporate secretarial affairs for the Board of Directors and its Committees). They may also assist the Sopra Steria Group’s functional divisions. They are also active participants in various steering committees (acquisitions, corporate responsibility, internal control, internal audit, employee share ownership). They may join working groups tackling key issues for the Company. They provide the benefit of their technical expertise and an independent opinion.

The costs rebilled by Sopra GMT comprise the portion of payroll and related personnel costs allocated to the assignments performed for Sopra Steria Group. They also comprise, under the same conditions, any external expenses incurred by Sopra GMT (such as specialised advisors’ fees). As such, this organisational method does not increase the expenses borne by Sopra Steria Group. If the assignments handled by Sopra GMT’s employees were not entrusted to them, they would need to be reallocated within the Group.

Sopra Steria Group charges Sopra GMT fees for providing premises, IT resources, and assistance from the Group’s functional divisions as well as provision of appropriate expertise for Sopra GMT’s assignments.

The work performed by this team and the principle for the rebilling to the Company of the costs incurred are covered in a framework agreement for assistance. This agreement, approved as a related-party agreement by the General Meeting, is reviewed every year by the Board of Directors.

Pierre Pasquier’s compensation at Sopra GMT reflects his oversight of the assignments performed by the Sopra GMT team for Sopra Steria Group and Axway Software. It is not rebilled to these two companies.

Around 85% of Sopra GMT’s total operating expenses are rebilled. The remaining 15% comprises the expenses arising from Sopra GMT’s own internal operations. Expenses are rebilled on a cost-plus basis including a 7% margin. By definition, Sopra GMT generally records a small operating loss. The annual breakdown varies according to the respective needs of Sopra Steria Group and Axway Software. On average, since 2011, two thirds of the rebilling have concerned Sopra Steria Group.

Sopra Steria Group recorded the following income and expenses under this agreement in 2022:

• ■expenses: €1,473 thousand;
• ■income: €163 thousand.

The Board of Directors reviewed the implementation of this agreement at its meeting on 26 January 2023. It unanimously agreed to maintain the previously granted authorisation for the current financial year. The Directors directly or indirectly affected by this decision did not take part in either the discussion or the vote.

Cyril Malargé has served as Chief Executive Officer since 1 March 2022.

Cyril Malargé has been with the Company for almost 20 years. He has served as Managing Director of the France reporting unit and, for the 18 months prior to his appointment as Chief Executive Officer, as the Group’s Chief Operating Officer. He has been a member of the Executive Committee since 2015.

The Chief Executive Officer has authority over the entire Group. He directs, administers and coordinates all of its activities. To this end, he is supported by Executive Management, the Executive Committee and the Management Committee. These Committees comprise the Chief Executive Officer, Deputy Chief Executive Officer and other key operational and functional managers from Sopra Steria Group and its subsidiaries.

The Chief Executive Officer has the broadest possible powers to act in all circumstances in the name of Sopra Steria Group SA, the parent company of Sopra Steria Group. He represents the Company in its dealings with third parties.

Certain decisions relating to strategy implementation and internal organisation require prior approval by the Board of Directors or its Chairman. Decisions “that are highly strategic in nature or that are likely to have a significant impact on the financial position or commitments of the Company or any of its subsidiaries” are defined in the internal rules and regulations of the Board of Directors. See Chapter 8, “Additional information” of this Universal Registration Document (page 290).

Éric Hayat Conseil is a company controlled by Éric Hayat, a Director of Sopra Steria Group.

This agreement relates to the provision to Executive Management of consulting and assistance services. These services are provided in connection with strategic deals connected with business development among other areas. They are charged at a per diem rate of €2,500 (excluding taxes). The duties performed under this agreement are distinct from those performed by virtue of Éric Hayat’s directorship. For example, this may involve but is not limited to the following, in consultation with the Group’s operational managers:

• ■taking part in top-level market meetings;
• ■maintaining contacts with civil society;
• ■taking part in high-level meetings with certain key clients in France and abroad;
• ■preparing for and participating in delegations of corporate executives to priority countries for the Group.

This enables the Company to benefit from the experience and knowledge of the Group gained by Éric Hayat throughout his career. This knowledge extends to its environment and some of its major clients. Éric Hayat was a co-founder of Steria. He also previously chaired the digital sector employers’ organisation and subsequently the broader “Fédération Syntec”, and is a former member of MEDEF’s Executive Committee. His skills and experience are thus particularly well suited to the responsibilities entrusted to him, which mainly relate to major business opportunities.

This means that the number of Directors on the Board that are directly involved in addressing the Group’s priorities in terms of strategic and commercial positioning is increased, thus enriching the Board’s debates. Éric Hayat, in his capacity as a member of the Compensation Committee and the Nomination, Governance, Ethics and Corporate Responsibility Committee, provides these committees with the benefit of the knowledge of the Group’s operational managers accumulated and maintained in the course of these assignments. Lastly, he has access to information channels within the Company that are helpful for feeding information back to the Board of Directors and its Committees.

Sopra Steria Group recorded expenses under this agreement as follows in 2022:

• ■expenses: €181 thousand;
• ■the Board of Directors reviewed the implementation of this agreement at its meeting on 26 January 2023. It unanimously agreed to maintain the previously granted authorisation for the current financial year. The Director affected by this decision did not take part in either the discussion or the vote.

While paying particular attention to the stability of the principles used to determine and structure compensation for executive company officers, the Board of Directors re-examines their compensation packages on an annual basis to verify their fit with the Group’s requirements. In particular, the Board checks that compensation policy:

• ■continues to be in keeping with the Company’s best interests;
• ■contributes to the Company’s long-term success, takes into account its social and environmental priorities;
• ■is in keeping with the Company’s business strategy.

The Board also checks that compensation policy complies with the recommendations laid down in the AFEP-MEDEF Code. To this end, it is supported by the Compensation Committee, which helps it prepare its decisions in this area.

The Board of Directors considers that applying the compensation recommendations laid down in the AFEP-MEDEF Code of Corporate Governance protects the Company’s interests and encourages executives’ contribution to business strategy and the Company’s long-term success.

The Compensation Committee usually meets three to five times between October and February to help the Board prepare its decisions.

The Board of Directors generally discusses the strategic approach over the same period; this discussion has taken into account social and environmental issues associated with the Company’s business. For the past several years, the Group has been pursuing an independent, value-creating plan that combines growth and profitability. Priorities are adjusted each year based on the current state assessment undertaken at the end of the previous year.

The Committee reviews the current compensation policy applicable to company officers. It is then informed of estimates of how far the Chief Executive Officer has achieved their targets. These forecasts are refined in the course of the Committee’s various meetings. At the beginning of the year, the Compensation Committee determines the extent to which quantifiable targets set for the previous year have been achieved. It assesses the extent to which qualitative targets have been met. To this end, it meets with the Chairman of the Board of Directors and familiarises itself with any information that might be used in this assessment.

The Committee also takes into consideration the Group’s compensation policy and decisions on fixed and variable compensation payable to the members of the Group Executive Committee. It takes into account comparisons with other companies made available to it. However, sector consolidation has significantly reduced the number of companies allowing for a direct and relevant comparison.

The Committee also considers ways in which employees may be given a stake in the Company’s financial performance. It assesses the suitability of share ownership plans for all employees and long-term incentive plans for managers of the Company and its subsidiaries. The Board of Directors considers that employee and executive share ownership makes a lasting contribution to the Company’s priority focus on independence and value creation by ensuring that employees’ and executives’ interests are fully aligned with those of the company’s shareholders.

The Board of Directors has not, to date, fixed the number of shares that must be held and registered in the name of the Chairman of the Board of Directors who co-founded of the Company. Shares held directly or indirectly through Sopra GMT by the Chairman in a personal capacity or by the Chairman’s family group make up more than 10% of the Company’s share capital.

On the recommendation of the Compensation Committee, the Board of Directors set a requirement for the Chief Executive Officer to retain 50% of the performance shares actually awarded during his term of office. It also set a target for him to hold 50% of his compensation in the Company’s shares by the end of 2026.

When the Board of Directors reviews the budget for the current financial year, the company’s quantitative targets are a known quantity. The Compensation Committee takes them into account when determining the Chief Executive Officer’s quantitative targets for the financial year. It holds a further meeting with the Chairman of the Board of Directors to discuss potential qualitative targets.

The Compensation Committee then presents its recommendations to the Board of Directors, which deliberates without the interested parties in attendance. These recommendations relate to the Chief Executive Officer’s variable compensation for the previous financial year, fixed compensation payable to the Chairman of the Board of Directors, and the Chief Executive Officer’s fixed and variable compensation for the current financial year. The Committee also presents its observations on how compensation is apportioned among the Directors and any proposed adjustments. The total amount of the compensation referred to in Article L. 225-45 of the French Commercial Code subject to approval by the shareholders is agreed when the Board of Directors meets to prepare for the General Meeting of Shareholders.

As regards variable compensation, the Compensation Committee proposes the quantifiable criteria to be taken into account together with any qualitative criteria, as the case may be. It makes certain that the criteria adopted are mainly quantifiable and that criteria are precisely defined. As regards quantifiable criteria, it generally determines:

• ■a threshold below which variable remuneration is not paid;
• ■a target level at which 100% of compensation linked to the criterion in question becomes payable; and
• ■where applicable, an upper limit if there is the possibility that a target may be exceeded.

Performance is assessed by comparing actual performance with the target broken down into thresholds and targets, as the case may be. Where, by exception, compensation may exceed the target level, the extent to which it may do so is capped.

Based on the targets adopted, an amount equivalent to 60% of the annual fixed compensation cannot be exceeded. Even so, in the event of an outstanding performance relative to the quantitative targets, the Board of Directors may, after consulting the Compensation Committee, authorise the integration of targets being exceeding, subject to the cap on annual variable compensation set at 100% of annual fixed compensation. Effective payment of the Chief Executive Officer’s variable compensation will, in any event, be subject to shareholder approval at an Ordinary General Meeting.

Conversely, the Board of Directors may consider that the Group’s performance does not merit payment of variable compensation in respect of the financial year in question. That being the case, it does not take into account the extent to which qualitative targets have been met. It proposes to the shareholders that no variable compensation be paid in respect of that financial year.

Lastly, in the event of exceptional circumstances (such as an exogenous shock) leading to the suspension of the normal system of variable compensation for employees and Executive Committee members, the Compensation Committee would review the situation of the Chief Executive Officer. It could recommend to the Board of Directors that it ask the shareholders at the General Meeting to approve an improvement to the Chief Executive Officer’s variable compensation if that would serve the Company’s interests, subject to an upper limit of 60% of his annual fixed compensation.

Long-term incentive plans are based on awarding rights to shares. They are subject to the condition of being with the company over a period of time and performance conditions. The targets are set in the same way as for variable compensation.

Independently of the compensation policy, the company covers or reimburses company officers’ travel expenses (transportation and accommodation).

The Nomination, Governance, Ethics and Corporate Responsibility Committee and the Compensation Committee have four members in common. This overlap ensures that decisions are consistent between the two Committees.

The procedure for determining compensation policy applicable to executive company officers and the timing of that procedure are intended to ensure that all worthwhile information is taken into account when recommendations are drawn up and when the Board of Directors makes its final decision. This ensures that such decisions are consistent among themselves and aligned with the Company’s strategy.

The compensation policy applies to newly appointed company officers. However, in exceptional circumstances, such as to enable the replacement or appointment of a new executive company officer, the Board of Directors may waive application of the compensation policy. Such waivers must be temporary, aligned with the Company’s interests and necessary to secure the Company’s long-term success or viability. Furthermore, this option may only be adopted where there is consensus among the members of the Board of Directors as to the decision to be taken (i.e. no votes against). This may result in the awarding of components of compensation currently defined in the compensation policy as not applicable (severance pay, non-compete payment, supplementary pension plan), though any such items would be subject to approval at the following General Meeting.

Pierre Pasquier is the Chairman and CEO of Sopra GMT, the holding company for Sopra Steria Group. In respect of these duties (leading the Sopra GMT team and chairing the Board of Directors), he received compensation of €130,000 in 2022. In addition, he received compensation under Article L. 225-45 of the French Commercial Code in the amount of €14,400 in respect of financial year 2022. This compensation was paid by Sopra GMT and was not rebilled to Sopra Steria Group (see Section 1.1.4, “Overview of the activities of the Chairman of the Board of Directors in 2022” of this chapter, page 54).

As Chairman of the Board of Directors of Axway Software, as indicated in its Universal Registration Document, Pierre Pasquier also received fixed compensation from that company in the amount of €138,000 and compensation in respect of Article L. 22-10-14 of the French Commercial Code of €19,518.

On the recommendation of the Compensation Committee, the Board of Directors proposed to the General Meeting of Shareholders of 1 June 2022 a temporary amendment to the compensation policy, specifically in connection with the end of Vincent Paris’ term of office, and not to set any conditions on the payment of his variable compensation in respect of 2022 (amount at issue: €50k). This proposal was based on the quality of the handover between Vincent Paris and Cyril Malargé and the impossibility of determining meaningful quantitative or qualitative targets over a period of a month and a half. Payment of Vincent Paris’ variable compensation for 2022 remains subject to approval at the General Meeting of Shareholders to be held in 2023.

Additional information concerning the situation following the end of Vincent Paris’ appointment as Chief Executive Officer

After his appointment ended, Vincent Paris’ employment contract came back into force. It had been suspended following his appointment as a company officer. During the following months, efforts to find him a permanent position within the organisation failed to reach an outcome satisfactory to both parties, and so they agreed on an amicable parting of ways through termination of his employment contract.

Vincent Paris left Sopra Steria Group effective 31 July 2022. A statutory payment of €621,864 was made upon termination of his employment contract, without any compensation being paid.

In addition, the Board of Directors decided, in a departure from normal practice and on an entirely exceptional basis, to remove the condition of continued employment applicable to the grant of 3,000 rights to free shares he was awarded on May 26, 2021. For information about the factors leading to this decision and an assessment of the benefit granted, please refer to Section see Section 5 "Additional information about resolutions passed with a majority of less than 80% at the General Meeting of 1 June 2022" of Chapter 8 "Additional information" of this Universal Registration Document, page 318 to 319.

Cyril Malargé was appointed Chief Executive Officer with effect from 1 March 2022.

The relative proportions of fixed and variable compensation in the annual compensation awarded to the Chief Executive Officer (excluding benefits in kind) were 65% and 35%, respectively.

Performance criteria were applied as anticipated at the time they were determined on 23 February 2022. No compensation is due at the threshold; the amount due is calculated on a linear basis between the threshold and the target.

Total compensation is in keeping with the compensation policy and contributes to the Company’s long-term performance. It provides an incentive to drive profitable growth based on shifting the Group’s services toward higher-value offerings.

Qualitative targets incentivised the executive to take a medium-term view by improving how efficiently the Group is organised and taking account of corporate responsibility requirements.

The Compensation Committee, taking into account the opinion of the Nomination, Governance, Ethics and Corporate Responsibility Committee, noted that the Company is on track to achieve its targets in relation to greenhouse gas emissions (see Section 3.4, “Optimising resource consumption and reducing greenhouse gas emissions” of Chapter 4, “Corporate responsibility” of this Universal Registration Document, pages 137 to 142) and the proportion of women in senior management positions (see Section 2.7.1, “Gender equality policy” of Chapter 4, “Corporate responsibility” of this Universal Registration Document (pages 123 to 125); it thus considered the corresponding qualitative targets to have been 100% achieved. After hearing a presentation of the results and the recommendation by the Chairman of the Board of Directors, the Committee also considered the target related to the appointment of Cyril Malargé to have been 100% achieved.

The difference between the total amount of compensation stated in Article L. 225-45 of the French Commercial Code to be allocated for 2021 and 2022 (€500,000) and the totals shown in the table above is due to the amount awarded to Pierre Pasquier in respect of his role as Director (€27,192 in 2021 and €26,891 in 2022). These amounts are shown in Table 2, “AFEP-MEDEF Code of Corporate Governance for Listed Companies, December 2022”.

It should also be noted that:

• ■as regards Sopra GMT, a legal entity serving as a Director, the implementation of the tripartite framework agreement for assistance entered into between Sopra GMT, Sopra Steria Group and Axway Software in 2011 resulted in the invoicing to Sopra Steria Group by Sopra GMT of a net amount of €1,309,924 excluding VAT (see Section 1.1.5 of this chapter and the Statutory Auditors’ special report on related-party agreements provided at the end of Chapter 6 - “2022 parent company financial statements” of this Universal Registration Document (pages 292 to 293);
• ■Éric Hayat Conseil, a company controlled by Éric Hayat, provided consulting services for business development in strategic operations, billed in the amount of €181,000 excluding VAT under an agreement renewed in October 2018 (see Section 1.1.7 of this chapter and the Statutory Auditors’ special report on related-party agreements provided at the end of Chapter 6 - “2022 parent company financial statements” of this Universal Registration Document (pages 292 to 293).

None.

None.

The performance share plan put in place by the Group in 2022 has the following features:

• ■for all recipients, the granting of shares is subject to the condition of continued employment at the end of the three-year vesting period. However, depending on the circumstances, this condition may be waived in whole or in part, in derogation of the foregoing and on an entirely exceptional basis (in practice fewer than 3% of departures under previous plans);
• ■the performance condition is based on three criteria, equally weighted at 30% each: organic consolidated revenue growth, consolidated operating profit on business activity (expressed as a percentage of revenue) and consolidated free cash flow;
• ■strict targets were set over the entire plan period (the year of allotment and the two following years). These targets were at least equal to any publicly disclosed guidance or, for targets expressed as a range, at least the minimum level of the guidance range disclosed. The average annual rate of achievement of targets will determine the number of free shares to which beneficiaries are entitled;
• ■an additional condition, focused on corporate responsibility and weighted at 10% of total vesting conditions, relates to the proportion of women in senior management positions within the Group (defined as the two highest echelons, levels 5 and 6), which must reach 20% by 31 December 2025.

The Chief Executive Officer, Cyril Malargé, was subject to the same rules as all the other recipients under the 2022 plan. He was also required to retain at least 50% of the shares acquired under this plan throughout his entire term of office. Cyril Malargé undertook not to hedge his performance shares until the holding period had expired.

None.

None.

See Section 5.4 "Share‑based payments" of Chapter 5, “2022 Consolidated Financial Statements” and Section 4.2.2 "Staff costs and employee benefits" of Chapter 6, “2022 Parent Company Financial Statements” of this Universal Registration Document (on pages 212 to 214 and 265 to 266, respectively).

None.

Cyril Malargé was appointed Chief Executive Officer with effect from 1 March 2022. He does not hold any position as a company officer outside the Group. By way of an exception to the AFEP-MEDEF Code, his employment contract was not terminated and remains in abeyance.

Cyril Malargé has spent much of his career with the Company, which he joined in September 2002. The criteria used to determine and structure his variable compensation remain similar to those used for the Company’s senior managers.

At present, no commitments have been entered into by the Company with regard to termination benefits, a non-compete payment or a supplementary pension plan for Cyril Malargé. Cyril Malargé is not a member of the Board of Directors.

In light of his career within the Group, his length of service, his circumstances, his significant contributions and the components of his compensation, the decision not to terminate his employment contract still seems to be in the best interests of the Company. Any decision to terminate his employment contract would necessitate compensation (contractual termination pay). On the other hand, any disadvantages of holding Cyril Malargé’s employment contract in abeyance until his term of office expires have not been identified. Should his contract be reinstated, he would be entitled to claim retirement bonuses or termination benefits, as applicable. The employment contract in abeyance is a standard Sopra Steria Group employment contract identical to that signed by Group employees. It is governed by the Syntec collective bargaining agreement with no special provisions or notice period adjustment, even concerning termination or a change in position. No special payments are provided for. As things stand, only standard legal rights (droit commun) would apply upon termination of the employment contract.

Board members may be linked to the Company or any of its subsidiaries by an employment contract if the link in question was established before the Board member became a company officer. It is mandatory for Directors representing the employees and for Directors representing employee shareholders.

At its meeting of 22 February 2023, the Board of Directors noted the following departures from the guidelines set forth in the AFEP-MEDEF Code after hearing the report of the Nomination, Governance, Ethics and Corporate Responsibility Committee:

Sopra Steria’s corporate responsibility strategy and associated programme of actions are rooted in the Group’s values and convictions and underpinned by a high level of commitment from senior management and all Group managers and employees.

Our aim is to help create a more sustainable world by working together with all our stakeholders.

Our corporate responsibility approach is underpinned by the mission Sopra Steria set for itself: “Together, building a positive future by making digital work for people”

We firmly believe that digital technology can create opportunity and progress for all. When closely linked to humanity, it creates a virtuous circle that benefits society as a whole. Sopra Steria has chosen to be a “contributor” company involved in building a sustainable world in which everyone has a part to play.

We see our contribution as sustainable, human-centred and guiding.

Sustainable: We see our actions – whether in running our businesses or helping with the digital transformation of our clients – as part of a long-term approach. Our approach in support of a more sustainable world encompasses all our environmental, social, ethical and inclusive commitments.

Human-centred: Our activities are focused on implementing projects that foster digital inclusion, equal opportunity and social open-mindedness. For a number of years now, we have been committed to education for young people, inclusion for people with disabilities and professional development for women.

Guiding: Our contribution is rooted in our ability to anticipate, understand and translate the challenges posed by digital technology so as to be able to better assess their impacts on everyday life. We are thus able to help our clients meet their own sustainability challenges. We work with our stakeholder community and contributing to the debate on the impact of digital technology on society in order to inform our work on the responsible use of digital technology.

This strategy is based on our commitment to the United Nations Global Compact and on the materiality analysis that we use to assess the sustainability challenges faced by the Group.

Drawing on the Group’s business model (see the “Integrated presentation of Sopra Steria” section of this Universal Registration Document on pages 10-11) and the changing expectations of its stakeholders, Sopra Steria has defined seven key corporate responsibility commitments in respect of its materiality matrix updated in 2022:

• Being a leading employer that attracts the best talent and promotes positive labour relations, diversity and equal opportunity.
• Being a long-lasting, strategic partner for our clients, meeting their needs as effectively as possible by providing them with the best technology as part of a responsible and sustainable value-creating approach.
• Achieving net-zero emissions, protecting resources and helping combat climate change.
• Working with an expanded business ecosystem to collectively address key social issues that affect us all.
• Establishing ongoing constructive and transparent dialogue with our stakeholders.
• Acting ethically in our day-to-day operations and across all our business activities.
• Supporting local communities by stepping up our community engagement initiatives, notably in the area of digital inclusion.

In addition to our seven commitments, we have defined three ESG(1) priorities for 2023 as part of our roadmap. The related policies and their main results are presented in the corresponding sections of this Universal Registration Document.

The Group adheres to the principles and fundamental entitlements of the Universal Declaration of Human Rights adopted by the United Nations General Assembly in 1948 and to the European Union’s Charter of Fundamental Rights. It abides by the eight fundamental conventions of the International Labour Organization (ILO) and is committed to:

• ■complying with European Community and domestic labour law and collective bargaining agreements in each country where the Group operates or, if necessary, putting in place measures intended to improve labour relations;
• ■upholding, in particular, freedom of association and the right to collective bargaining in each relevant country, the elimination of forced or compulsory labour and the effective abolition of child labour.

It meets the United Nations Sustainable Development Goals and directly or indirectly contributes to Goals 3, 4, 5, 8, 9, 10 and 17.

In keeping with these commitments, it pursues a corporate responsibility policy aimed at safeguarding the health and safety of each of its employees and ensuring that everyone is treated with dignity and respect at work. The goal is to foster a caring work environment where everyone feels recognised and valued irrespective of origin, gender, age or disability

All matters relating to talent management, employee training and diversity are managed by the Group Human Resources Director, supported by a network of country and/or subsidiary Human Resources Directors.

Regarding matters related to health and safety and labour relations, each country and/or subsidiary is subject to its own local legislation. Health and safety committees in each country ensure that specific processes and measures are implemented at the local level. These measures cover, in particular, buildings (security of premises, furnishings, heating and air conditioning, etc.) and food (canteen, water, etc.). Dialogue between management and employees is driven by regular (weekly, monthly and annual) steering meetings attended by the various companies’ HR Directors to exchange ideas and ensure that the approach to labour relations is consistent with Group policy.

The Group Human Resources Director is a member of the Executive Committee and reports directly to Sopra Steria’s Executive Management.

Climate change is one of the biggest challenges facing humanity. As such, governments, businesses and civil society must work together to protect future generations.

The European Union has responded to the United Nations appeal aimed at keeping global warming below 1.5°C by passing a law that includes a requirement to achieve a net-zero emissions economy by 2050.

Over the past ten years, Sopra Steria’s environmental programme has focused on protecting the environment (reducing emissions, promoting the circular economy, fostering biodiversity and engaging with stakeholders) and ensuring that environmental best practice is integrated into the Group’s operations, services delivered to clients and supply chain. The Group has for several years been a leader on climate action and environmental protection.

Through our environmental roadmap, we are directly or indirectly contributing to the following SDGs: 6, 7, 8, 9, 11, 12, 13, 14, 15 and 17.

Sopra Steria endorses UN and EU objectives supporting the transition to a net-zero emissions economy by 2050. The Science Based Targets initiative (SBTi) validated the Group’s targets for reducing emissions from direct activities. Performance against these targets is independently audited every year. The Group is also a participant in the UN’s Climate Neutral Now programme in relation to its direct activities (offices, data centres and business travel) and achieved climate neutrality(2) for this scope.

Key milestones on the way to achieving SBTi’s near-term 1.5°C-aligned targets and long-term net-zero emissions targets (baseline: 2015).

For over 10 years, Sopra Steria has worked on reducing emissions from its direct activities (offices, data centres and business travel). Since 2017, Sopra Steria’s programme of actions has covered its entire value chain (Scope 3 greenhouse gases including purchases of goods and services – a category that accounts for over 80% of all emissions).

SBTi unveiled its first Net-Zero Standard at COP26 in Glasgow in late 2021. Sopra Steria was one of the companies invited to test the new standard. Since being actively involved in this testing, in 2022 the Group submitted its long-term 2040 net-zero emissions target, covering its entire value chain (with a maximum of 10% offsetting), to SBTi for approval. Sopra Steria will also continue to participate in the UN’s Climate Neutral Now programme in relation to its direct activities (offices, data centres and business travel). In 2022, the Group achieved Climate Neutral Gold status for the “Measure” and “Reduce” steps and Silver status for the “Contribute” step.

The Group’s objectives and targets are summarised below:

SBTi targets set and validated in 2019:

• ■SBTi target I (short-term, 1.5°C-aligned): Reduce absolute Scope 1 and 2 emissions by 42% by 2025 (baseline: 2015).
• ■SBTi target II (short-term, 1.5°C-aligned): Reduce absolute Scope 3 emissions in Categories 6 (business travel) and 8 (upstream leased assets: off-site data centres) by 42% by 2025 (baseline: 2015).
• ■SBTi target III (long-term, 1.5°C-aligned): Reduce Scope 1 and 2 emissions per employee in Categories 6 (business travel) and 8 (upstream leased assets: off-site data centres) by 85% and Scope 3 emissions per employee in Categories 6 (business travel) and 8 (upstream leased assets: off-site data centres) by 85% by 2040 (baseline: 2015).
• ■SBTi target IV (3) (short-term, 1.5°C-aligned): Supply chain
  • ●Over the period 2019-2023, assess the emissions of suppliers accounting for 70% of our supply chain’s GHG emissions. This assessment scope could reach 80% in 2022 and 100% by the end of 2023.
  • ●Over the period 2020-2025, measure the proportion of GHG emissions from suppliers (accounting for 70% of our supply chain emissions) actively monitoring their own emissions. This proportion could reach 30% in 2023, 65% in 2024 and 100% by the end of 2025.
  • ●Over the period 2020-2025, identify the proportion of suppliers (accounting for 70% of our supply chain emissions) that have set emissions reduction targets. This proportion may amount to 20% in 2023, 45% in 2024 and 90% by end 2025.

SBTi target submitted in 2022 for validation in 2023:

• ■SBTi target V (long-term, aligned with SBTi Net-Zero Standard): Achieve carbon neutrality (net-zero emissions) across the entire value chain by 2040 (baseline: 2019). 

The following activities within the Group’s environmental programme are aimed at achieving the above targets at a high level:

As a global digital services company, Sopra Steria’s corporate responsibility concerns the following:

• ■strict observance of ethical and compliance rules;
• ■responsible interactions with the Group’s stakeholders, particularly suppliers and subcontractors, through a responsible purchasing policy and vigilance plan;
• ■innovation to meet societal needs: Solutions to help our clients address their priorities with regard to the environment, digital sovereignty, digital ethics and the development of trustworthy artificial intelligence;
• ■protecting and securing data and operations;
• ■civic engagement to support struggling and highly vulnerable populations.

Benefits for the Group:

• ■developing relationships of trust and transparent dialogue with our stakeholders;
• ■boosting its appeal;
• ■developing new markets.

Through our commitments to society, we are directly or indirectly contributing to the following SDGs: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 16 and 17.

Sopra Steria has decided to bring together business ethics and compliance, internal control and risk management within the Internal Control Department, which reports directly to the Group’s Executive Management. This department appears before the Audit Committee and the Nomination, Governance, Ethics and Corporate Responsibility Committee at regular intervals.

This structure allows for centrally coordinated, Group-wide governance to deal with business ethics and compliance issues, compliance controls, risks and potential whistleblowing.

• ■The Internal Control Department oversees business ethics and compliance issues and coordinates all stakeholders involved in compliance and internal control across the Group. The Internal Control Director is the primary reference point for the whistleblowing system in her capacity as Group Compliance Officer. The Internal Control Department directly manages programmes aimed at preventing corruption, influence peddling and money laundering as well as those concerning economic sanctions and the duty of vigilance.
• ■This department is supported by the network of Internal Control & Compliance Officers. They are appointed to work with local teams in each Group entity.
• ■It also works with the Group-level functional and operational departments, each with expertise in its own area:
  • ●Human Resources Department: Human rights (Diversity and equal opportunity, working conditions, health and safety and labour relations),
  • ●Legal Department: Protection of personal data, competitive practices, stock market ethics,
  • ●Purchasing Department: Responsible purchasing,
  • ●Finance Department: Tax transparency, Green Taxonomy,
  • ●Security Department: Systems and data security,
  • ●Corporate Responsibility and Sustainable Development Department: combatting climate change, protecting natural resources, etc.

Each of these departments also have their own correspondents within the Group’s various entities.

Regular steering meetings bring together these departments and Executive Management to discuss programme implementation and changes to be instigated.

The Internal Control Department and the Internal Audit Department also meet regularly to exchange updated information, notably concerning the identification of associated risks and the audit plan.

As the Sopra Steria Group grows, it is committed not only to strictly complying with legislation and regulations in the countries in which it operates but also to applying ethical principles rooted in the Group’s culture and values (see “Integrated presentation of Sopra Steria” of this Universal Registration Document on page 5). These include, in particular, professional excellence, respect for others and a proactive approach.

The Sopra Steria Group’s code of ethics constitutes the reference framework within the Group operates. Sopra Steria’s status as a signatory to the United Nations Global Compact, in the Global Compact Advanced reporting category, reflects its ethical principles, which adhere to the principles and fundamental entitlements of the Universal Declaration of Human Rights of the United Nations and the Charter of Fundamental Rights of the European Union.

With a foreword written by the Chairman of the Board of Directors, it is supported by Group management, which is responsible for ensuring that these rules are observed. The code applies to all Sopra Steria employees. Managers who sit on the Group Management Committee and entity-level (country and subsidiary) management committees sign an annual digital declaration renewing their commitment to abide by and enforce the code of ethics within their scope of responsibility.

Sopra Steria regularly raises awareness among the relevant personnel to ensure that they buy into and abide by the Group’s values and fundamentals and the principles laid down in the code of ethics. This awareness-raising takes place principally through induction seminars, professional development sessions and events sharing the Group’s fundamentals, organised in particular by Sopra Steria Academy, the Group’s in-house training organisation.

Furthermore, Sopra Steria expects all those with whom it has a business relationship to abide by the spirit of its code of ethics, irrespective of legislation and regulations in the countries in which they operate.

The code of ethics is publicly available from the Ethics and Compliance page of Sopra Steria’s corporate website at www.soprasteria.com.

The code of ethics is supplemented by an anti-corruption code of conduct, a code of conduct for stock market transactions, a code of conduct for suppliers and partners and a common core of rules and procedures. (See Chapter 2, “Risk factors and internal control”, of this Universal Registration Document on pages 39 to 52.) As part of the compliance programme, work was undertaken at Group level in 2022 to continuously improve existing rules and clarify guidelines and procedures to ensure that regulatory changes are taken into account, best practice is adopted and these procedures are applied and controlled within the Group on an ongoing basis. For example, ten or so rules relating to compliance issues were either added to or further clarified within the Group Rules, which constitute the operating fundamentals applicable to all Group entities.

The whistleblowing procedure may be used to flag up situations that could be considered contrary to the law, the code of ethics or Sopra Steria’s code of conduct or that could harm Sopra Steria’s reputation or pose a threat to the public interest. Key areas covered by the whistleblowing procedure include corruption, fraud, financial offences, breaches of competition law and risks relating to human rights and fundamental freedoms, health and safety and environmental damage.

Any person may bring any concerns they have to the attention of their line manager, their line manager’s manager, their entity’s Compliance Officer, the Compliance Officer of the functional division to which their entity belongs or the Group Compliance Officer, as they see fit.

As an alternative to these usual communication channels, they may choose to use Sopra Steria’s whistleblowing procedure. An email address is provided within each entity, managed by a designated individual approved by the Group’s Internal Control Department, which is responsible for the whistleblowing procedure.

Concerns can also be raised directly with the Group’s Internal Control Department by writing to the following email address: ethics@soprasteria.com.

This reporting channel is also open to all external stakeholders, including in particular the Group’s clients, suppliers, subcontractors and business partners. It is available on the Ethics and Compliance page of the Group’s website at www.soprasteria.com.

Data security, integrity and confidentiality are assured. Sopra Steria guarantees that all information exchanged, including the identity of the whistleblower and any other relevant persons, will remain confidential.

Whistleblowers are protected against reprisals, discrimination and disciplinary sanctions of any kind related to their whistleblowing. This protection extends to any person related to the whistleblower or their whistleblowing.

Under the Group’s whistleblowing procedure, reports received are assessed for admissibility before a decision is made as to whether to conduct an internal investigation. Reports are handled within a reasonable time frame, according to the severity and/or complexity of the allegations.

Records of reports received under the whistleblowing procedure are kept in accordance with applicable legislation and/or regulations.

The Sopra Steria Group is committed to having measures in place to safeguard against risks arising from exposure to corruption and influence peddling. These measures help protect the Group’s reputation and maintain the trust of its internal and external stakeholders. To this end, the Group applies a zero-tolerance policy with respect to corruption and influence peddling.

In particular, the following measures are in place:

• ■a high degree of executive involvement in the implementation and monitoring of the Group’s programme to prevent corruption and influence peddling. This firm commitment takes shape in particular through the Group’s specific code of conduct covering these issues, the direct oversight of the programme at the Internal Control Department’s steering meetings, informational meetings for senior managers and regular communications campaigns targeting all Group employees: for example, each year Executive Management reiterates its commitment to all Group employees on International Anti-Corruption Day, which takes place on 9 December;
• ■a Group-wide organisational structure in charge of managing, monitoring and controlling the framework, through a network of Internal Control & Compliance Officers, who have responsibility for compliance, internal control and risk management issues within each entity;
• ■a specific mapping exercise to identify risks of corruption and influence peddling, updated every two years or as soon as is necessary following a major Group-level event. This risk mapping was updated as planned in the first half of 2022;
• ■a specific code of conduct for the prevention of corruption and influence peddling, including a foreword by the Chairman of the Board of Directors and the Chief Executive Officer and illustrated with real-world examples, as a supplement to the code of ethics. This code of conduct has been translated into 10 languages and covers all Group entities;
• ■a disciplinary regime based on the code of conduct enforceable against all employees since its inclusion in the Group’s internal rules and regulations, or through any other mechanism in force at Group entities;
• ■specific, formal procedures, allowing in particular for the implementation of the first- and second-level controls, in order to respond to situations identified as potentially exposed to risk. For example: policies on hospitality and gifts and procedures covering conflicts of interest, client events and export activities;
• ■a strict procedure for assessing third parties, including suppliers and subcontractors. In this regard, the Group implements its purchasing procedure and a code of conduct for suppliers and partners, which was revised at the begging of 2022, to ensure that all new regulations, and more specifically those connected with the “Sapin II” Act and the duty of vigilance, are covered. Specific procedures are also in place to assess export clients, beneficiaries of donations, sponsorship and patronage, and acquisition targets;
• ■a Group training programme aimed at raising awareness among all employees, using a practical and accessible approach, and training those segments of the workforce considered as the most exposed in light of the results of the risk mapping exercise for bribery and influence-peddling risks. This programme is based on the following:
  • ●a mandatory e-learning course for all employees: this course, renewed in 2021, is available in five languages. It is accessible to all employees via the website of Sopra Steria’s training organisation. This tailored course, designed in-house on the basis of risk information obtained using the risk mapping procedure, consists of eight interactive modules (Legal framework, code of conduct and key contact points; Invitations and gifts; Conflicts of interest; Public agents; Commercial intermediaries and international sanctions; Donations, sponsorship and patronage; Facilitation payments; Whistleblowing procedure) and ends with a mandatory knowledge assessment quiz that employees must pass to successfully complete the course. At 31 December 2022, 93% of Group employees had completed this e-learning module,
  • ●dedicated training for populations considered the most exposed: managers, sales staff, buyers;
• ■whistleblowing procedure (described above);
• ■strengthened control and audit procedures: The specific controls are covered in the procedures developed under the programme for the prevention of corruption and influence peddling and may be either ongoing or periodic. In addition to the first-level controls carried out in the form of self-checks by the employees concerned and by line managers, controls are mainly performed, depending on the area involved, by the functional departments concerned (Finance Department, Internal Control Department, Industrial Department, Legal Department, Human Resources Department). The procedures are also assessed by the Internal Audit Department when auditing the Group’s subsidiaries and/or divisions, by running through some 30 specific checks, and during specific compliance audits as part of the internal audit programme.

To the best of the Company’s knowledge at the time of writing this Universal Registration Document, neither Sopra Steria, nor its subsidiaries nor any member of an administrative or management body have been found guilty of corruption or influence peddling at any time in the last five years.

Furthermore, no confirmed incidents were recorded via the Group’s whistleblowing procedure in 2022.

In tax matters, Sopra Steria Group is committed to complying with the tax laws and regulations applicable in all of the countries in which it is present. Sopra Steria acts in line with its values and ethical principles of integrity, commitment and accountability.

Accordingly, the Group pays its taxes and duties in the countries where its operations are located and where value is created. This approach is pursued in accordance with international guidelines and standards, such as those of the OECD, particularly in relation to transfer pricing for cross-border transactions between Group companies. In this respect, the Group does not engage in tax evasion or any other practice contrary to its ethical standards.

Sopra Steria does not make use of aggressive tax planning or any structuring methods for its transactions that would detach the tax location from the location of business activity. The Group thus abstains from establishing operations in tax havens (uncooperative countries or territories on the official French list or the European Union’s blacklist), has no bank accounts at banks established in such countries or territories, and more generally abstains from creating any entities that have no economic substance or business purpose.

Sopra Steria Group is regularly audited by the competent tax authorities, with which it fully cooperates. The Group complies with the deadlines specified by tax authorities for providing responses to their queries, meets all of its reporting requirements and pays its taxes as required by law.

To limit tax risks relating to its activities, and to take advantage of existing tax incentives, exemptions and relief, in accordance with tax laws and the reality of its activities, the Group may enlist the services of outside tax consultants. All advice thus received is reviewed internally to ensure that any resulting application is consistent with the Group’s tax principles.

Sopra Steria is committed to managing its business in strict compliance with legislation and regulations relating to competition in all countries in which the Group operates. Employees are informed that if they have any questions or doubts about a competition-related topic, they must consult with their entity’s legal department. The Group Rules include instructions in this area. A project to update the associated training programme will begin in 2023.

As a company listed on the Euronext Paris exchange, Sopra Steria has a code of conduct for stock market transactions that sets out rules and protective measures relating to stock market transactions and the use or disclosure of inside information as defined in the European Market Abuse Regulation (Regulation 596/2014, known as MAR), i.e. any specific information that has not been made public and which, if made public, would be liable to significantly influence the share price.

Sopra Steria undertakes not to engage or participate in any practice that constitutes the laundering of assets, revenue or capital. Financial transactions are entered into in strict compliance with anti-money laundering legislation and regulations. The Group is thus committed to exercising special care in assessing third parties in countries considered high-risk. A system to automate and reinforce procedures for verifying third-party bank details, which was launched in 2021, continued its roll-out in 2022.

Sopra Steria undertakes to refrain from any activity that would contravene applicable national and international laws, regulations or standards in relation to economic sanctions imposing export controls, embargoes or other restrictions on trade. These topics are covered in the anti-corruption e-learning course. All third parties located in countries considered high risk are covered by compliance assessment procedures before any business relationship is entered into. Through its code of conduct for suppliers and partners, Sopra Steria also requires its suppliers and subcontractors to comply with economic sanctions.

As stated in its anti-corruption code of conduct, Sopra Steria does not provide support of any kind, financial or otherwise, to political parties, leaders or initiatives.

The Group reserves the right to engage in dialogue in connection with the development of regulations in the countries in which it operates and to participate in working meetings organised by industry bodies; such activities are undertaken by Executive Management or with its full knowledge. The company is registered in the European Union’s Transparency Register under number 148866148742-90.

The Corporate Responsibility Report, presented in the 2022 Universal Registration Document, aims to set out the non-financial information that is most relevant to the Group in the context of its business model, its activities, the main issues arising from the materiality matrix and the main risks facing the Group.

The information required to draw up this report is collected in accordance with a reporting procedure, available on request from Sopra Steria’s CR&SD Department. This procedure is reviewed annually to take into account changes in the Group’s scope and reporting approach and, with effect from 2018, new regulatory requirements arising from Ordinance 2017-1180 of 19 July 2017 on disclosure of non-financial information.

Based on regulations in force and taking into account the specific nature of its business activities, Sopra Steria measures the Group’s progress in four areas: Workforce, Society, Environment, Ethics and Compliance.

The environmental reporting presented complies with the framework proposed by the CDSB and with TCFD recommendations.

Furthermore, pursuant to the seventh paragraph of Article L. 225-102-1 of the French Commercial Code, Sopra Steria has appointed Mazars as independent third party to verify that the Statement of Non-Financial Performance complies with the provisions laid down in Article R. 225-105 of the French Commercial Code and that the information provided pursuant to point 3 of the first and second paragraphs of Article R. 225-105 of the French Commercial Code, disclosed in this report pursuant to Article R. 225-105-2 of the French Commercial Code, is truthful.

Unless otherwise indicated, indicators are calculated on the basis of numbers of employees on permanent and temporary contracts and internship agreements. The following definitions are used:

• ■permanent contract: Full-time or part-time employment contract entered into with an employee for an indefinite period;
• ■fixed-term contract: Full-time or part-time employment contract entered into with an employee and expiring at the end of a specific period or on completion of a specific task lasting an estimated period;
• ■frequency rate of workplace accidents in France: Calculated in business days, using the following formula: (Number of workplace accidents with work stoppage × 1,000,000)/Total number of hours worked by total workforce in the year;
• ■severity rate of workplace accidents in France: (Number of working days lost due to workplace accidents × 1,000)/Total number of hours worked by all employees during the year. Work stoppages continuing on from the previous year are not counted. Work stoppages continuing on as a result of workplace accidents that occurred the previous year are not counted;
• ■lost Time Injury Frequency Rate: Calculated in business days, using the following formula: (Number of workplace accidents with work stoppage × 200,000)/Total number of hours worked by total workforce in the year;
• ■total recordable injuries frequency rate: Calculated in business days, using the following formula: (Number of workplace accidents with or without work stoppage × 200,000)/Total number of hours worked by total workforce in the year;
• ■absence rate: Calculated in business days and on the basis of the average full-time equivalent workforce. It takes into account absences for illness, workplace accidents and accidents while travelling. It corresponds to the ratio of the number of actual calendar days’ absence and the number of work days theoretically available;
• ■percentage of employees with a disability: total employment units accounted for by employees with a declared disability (“disabled employment units” in France), multiplied by 1.5 where allowed under the rules applied by French government agency Agefiph (which promotes employment for people with disabilities), divided by the size of the relevant workforce. The workforce numbers used are also calculated according to the rules defined by Agefiph.

Information marked with the ✔ symbol has been audited by the independent third party to provide a reasonable assurance opinion.

The figures presented are rounded, which may result in slight discrepancies in some totals.