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.

The acquisition of CIMPA in October 2015 boosts its presence in the product lifecycle management (PLM) market. Following the acquisition of software developer Cassiopae, finalised in January 2017, three new companies joined the Sopra Steria Group in 2017: Kentor, 2MoRO and Galitt.

In 2018, the Group acquires the German IT services company BLUECARAT to strengthen its position in Germany and offer new growth opportunities for its local subsidiary, as well as Apak to expand its range of lending solutions. In 2019, Sopra Steria takes two important steps forward in the core banking market: the acquisition of SAB, finalised on 7 August 2020, and the partnership with seven German banks in the Sparda banking group, involving the construction of a digital platform. At the end of 2019, Sopra Steria also bolsters its operations and consolidates its strategy by launching its new digital transformation consulting brand, Sopra Steria Next. With the acquisition of Sodifrance in 2020, the Group created a market leader in digital services for insurers and social security providers. In the United Kingdom, Sopra Steria acquired cxpartners, bolstering its expertise in user experience and ergonomic design. Lastly, Fidor Solutions, the software subsidiary of next-generation bank Fidor Bank specialising in digital banking solutions, joined the Group on 31 December 2020. With this acquisition, Sopra Banking Software has significantly accelerated the pace of its development, in particular by augmenting user features as part of its Digital Banking Engagement Platform (DBEP).

In 2021, Sopra Steria was bolstered by the acquisition of French cybersecurity firm EVA Group. This acquisition is a key step toward positioning Sopra Steria as one of the top three players in the French cybersecurity market.

The Group also acquired two other companies in 2021: EGGS Design, which specialises in digital service design and has locations in Norway’s four biggest cities (Oslo, Bergen, Trondheim and Stavanger) as well as in Denmark (Copenhagen), and Labs, a Norwegian user experience consulting firm.

In 2022, the Group acquired Footprint, a Norwegian consulting firm specialising in environmental and sustainability issues, and announced plans to acquire Tobania in Belgium and CS Group in France.

Today, the Group ranks among the top 5 European digital transformation players, having earned a reputation for providing end-to-end solutions to address the core business needs of large companies and organisations, helping them remain competitive and grow.

Complementing each other in business strengths, strategic verticals and geographies while sharing a similar corporate culture, Sopra and Steria merge to give birth to Sopra Steria Group.

In 2001, the Internet bubble bursts accelerating market changes. Clients are looking for global players capable of assisting them in transforming their businesses.

Steria rises to these challenges by completing major strategic acquisitions, including Bull’s IT services business in Europe in 2001, Mummert Consulting in Germany in 2005 and the business process outsourcing (BPO) expert Xansa in 2007.

Given the maturity of the IT services market, Sopra reexamines its fundamentals and refocuses on systems integration and software development. Sopra completes its initial public offering in 1990. Steria prioritises the rationalisation and industrialisation of processes to reorganise its functional structure. After landing a number of major deals, Steria proceeds with its initial public offering in 1999.

Sopra combines internal and external growth to consolidate its European expansion and its areas of expertise: consulting, systems integration and solutions development. Axway, a subsidiary formed by bringing together the Group’s software infrastructure divisions, is floated in 2011.

Sopra and Steria are two distinct entities, making their way forward in the emerging IT services industry. They both strive to meet the needs of major clients with innovative products and services. Sopra invests in software development and opens new locations in various markets. At the same time, Steria racks up several contract wins in the public sector.

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 has chosen eight major vertical markets that constitute its areas of excellence and make up 90% of revenue. The Group has a comprehensive offering in each of these fields, meeting the specific challenges of its clients.

The banking and financial services sector has entered a new era, that of Open Banking. Client demands and regulatory pressures are constantly increasing and new market entrants (fintech companies, the “Big Four” tech companies, retail and telecoms players, etc.) are helping to accelerate transformations in this ecosystem, moving it toward greater openness, a paradigm shift often referred to as the Open Banking revolution.

Faced with these new challenges, Sopra Steria aims to be a partner for banks, helping to facilitate and accelerate this transformation.

With three core areas of expertise – understanding of the banking sector, its clients and the most innovative technologies – the Group offers powerful and agile software solutions, as well as their application by means of value-added use. The Group and its subsidiary Sopra Banking Software provide comprehensive solutions and turn changes in the banking world into opportunities for their clients, whether in risk management, regulatory compliance, data protection, improving the customer experience, optimising performance, delivering differentiation or identifying new sources of income.

Faced with new expectations from civil society and businesses, the need to optimise their expenditure, the obligation to keep up with regulatory changes and driven by a wave of reforms, public sector entities are continuing the broad-based transformation of their activities, organisations and the services offered to their users.

When digital technology is a force for change, Sopra Steria provides solutions in two main categories: (i) the digitisation of government services, the re-engineering of processes and, more generally, the modernisation of business-specific information systems via digital transformation programmes, and (ii) the pooling of support functions for central government agencies, local authorities, and key providers in the health and welfare sectors.

As a result, public sector organisations can ensure that they meet their targets and priorities at the lowest cost, while giving their information system the agility it requires to meet the high expectations from civil society and agents.

The aerospace sector is a particularly fertile ground for innovation. It is subject to constraints regarding reliability, availability, security and performance, which require suppliers to have full command of the technologies and processes implemented, as well as a thorough understanding of their different clients’ core businesses.

For optimal service, companies operating in this sector must align their capacities with the pace of production and optimise their processes and information systems while also improving profitability. Digital continuity and the ability to manage the product life cycle, from design to manufacture and after-sales services, are crucial. Sopra Steria’s acquisition in 2015 of CIMPA, a specialist in product lifecycle management, makes total sense in this context particularly as it was followed in 2017 by the acquisition of 2MoRO, extending the Group’s offering in aerospace maintenance activities.

To meet these challenges, Sopra Steria’s expertise comes into play through the Aeroline vertical in such critical areas as industrial efficiency, manufacturing and particularly the shop floor, supply chain, on-board systems and air traffic control.

In a tense geopolitical context, marked by the rise of new threats to states (high-intensity major conflicts, cybercrime, terrorism, etc.), defence departments face numerous challenges and must improve their effectiveness while taking into account budgetary constraints. It has become essential to ensure information superiority, data interoperability and critical operational systems security.

With over 40 years’ experience in supporting the military in Europe, Sopra Steria combines pragmatism and innovation, thanks to tailored technological and process solutions:

• reliability and interoperability of operational information and communication systems;
• efficiency and overall effectiveness of the armed forces;
• efficiency of the military supply chain (supply chain management);
• control over costs and the complexity of ensuring compliance for information systems.

As a company specialising in digital services, Sopra Steria does not engage in the manufacture, maintenance or marketing of controversial defence equipment.

Sopra Steria supports public authorities in meeting the challenges of homeland security. The Group operates in 24 countries, serving many different organisations: police, emergency services, border control, justice, customs and homeland security services.

Sopra Steria carries out large-scale, complex and critical projects on behalf of these organisations, concerning:

• ■survey management and information processing;
• ■road safety;
• ■automation of command-and-control solutions;
• ■management of identity documents, security credentials, and civil and criminal biometrics;
• ■modernisation of court- and prison-related administration;
• ■intelligent, distributed computer systems;
• ■infrastructure security;
• ■mobile technologies to optimise operations on the ground.

In addition, the Group has developed innovative solutions specific to the security sector, to meet the challenges and requirements of clients in this field (biometrics, mobile technology, fingerprint and genetic footprint search engines, implementing secure cloud solutions etc.).

The energy sector is in the midst of its most radical transformation, in Europe and in France, since the end of the Second World War. Public institutions, civil society and the private sector have taken into account Europe’s decision to achieve carbon neutrality by 2050, with the recent energy crisis in Europe sparking an increase in investment decisions.

Becoming carbon-neutral will require a thorough overhaul of the energy sector’s value chain, from production to marketing, with electricity replacing fossil fuels, and biogas and hydrogen acting as complementary forces, particularly for industry.

For energy providers, this raises a number of specific challenges:

• ■In production: striving for excellence in the field of low-carbon (especially nuclear) and renewable energy production, while mastering the technological, financial and societal challenges associated with accepting the many projects to be launched in the various regions;
• ■In transmission and distribution: spearheading a wave of investment in response to the need to scale up renewable energy production, connect production facilities to the grid, and operate those facilities under optimum conditions by modernising and digitalising management of the grid;
• ■In marketing: optimising the customer experience and creating offers that combine energy and services to retain and win over new customers, and to respond to new usage patterns (electric mobility, self-consumption, etc.).

Against this backdrop, Sopra Steria supports energy suppliers and utilities in their strategic responses to trends affecting a number of areas:

• ■Experience and client acquisition: reinventing customer relations and designing new services;
• ■Digital continuity of engineering: helping our major clients achieve their ambitions in developing new carbon-free, nuclear and renewable energy production sites;
• ■Power grid modernisation: ramping up the decentralisation and digitalisation of energy transmission and distribution grids;
• ■Modernisation and optimisation of information systems to enable energy transition investments;
• ■Transformation and resilience of organisations: facilitating changes in organisations and business lines to promote agility.

The telecoms, media and entertainment sector is at the centre of the digital revolution, for three reasons:

• ■it supports the digitisation of all the other verticals, in particular by feeding the data collected from billions of objects to algorithms;
• ■it also serves as the testing ground for the implementation of new technologies and uses as part of a platform-based business model;
• ■lastly, it plays a key role in ensuring economies are resilient, as demonstrated during the Covid-19 pandemic.

Sopra Steria serves the transformation goals of its clients in relation to the following main challenges:

• ■deployment of new infrastructures: Fibre and 5G to help meet countries’ industrial requirements by providing them with very high-speed fixed and mobile connectivity;
• ■infrastructure management: Moving from a configurable to a programmable approach for essential infrastructure, such as the cloud, SDN/NFV and most recently 5G;
• ■automation: So that the company is able to interact in real time, in particular thanks to AI, with all members of its ecosystem (customers, suppliers, partners, employees, infrastructures);
• ■greater business agility: Making it easier to readapt, readjust and realign the company and its organisational structures to better seize new opportunities and also to further improve the engagement of managers and their teams in service of clients;
• ■digitisation of services: Laying down the fundamentals of the platform-based business, thus moving to fully digital and end-to-end solutions, from client to infrastructure;
• ■core media business: Taking up new models, such as SVOD, AVOD, content aggregation, targeted advertising and 4K;
• ■core gaming business: Customer retention and churn, fraud reduction and control over cash flows, compliance with regulations, digitisation of distribution channels.

Given that the transport sector accounts for 30%(3) of GHG (greenhouse gas) emissions, all players in the sector will have to undergo major changes in the short-to medium-term to reduce their footprint. Meanwhile, mobility and logistical needs are constantly changing and must contend with new challenges: increased international traffic and interoperability, the development of platforms to facilitate access to mobility services in urban areas, the upgrading of infrastructure both in terms of capacity and modernity, and new approaches to urban logistics as the volume of goods driven by e-commerce explodes and last-mile services in densely populated areas require new approaches.

Faced with these major challenges, the transport industry will have to implement strategies, investments and services to encourage travellers to choose the most environmentally-friendly solutions by facilitating access to services, using “door-to-door” methods, offering seamless intermodality, integrating micro-mobility, and developing new payment and customer experience models. Transporters, infrastructure managers and logisticians will progressively update their operating and supervision models to integrate the new functionalities made possible by data and predictive models. Advances in autonomous driving and vehicles are a key issue in urban areas.

The energy crisis following the war in Ukraine is set to accelerate changes that were already underway in relation to energy efficiency: optimising processes, reducing energy consumption at industrial premises, continuing to develop clean transportation and developing green hydrogen solutions.

Sopra Steria Group is determined to be the partner of choice for leading players in the transport industry to help them achieve their digital transformation goals in three key areas of their value chain: transformation of the urban and multimodal experience; platformisation of operating and command-and-control systems, operational supervision and traffic management; and excellence of industrial operations and asset management.

The Group also aims to be a recognised player in mobility ecosystems: MaaS platforms, autonomous shuttles/vehicles, and smart cities.

Its expertise in the digital domain is recognised in the transport industry, particularly in relation to business consulting, digital expertise (Big Data, AI, IoT, etc.), cloud migration from consulting through to migration factory, integration of specialist solutions, and cybersecurity.

Sopra Steria is one of Europe’s top 10 digital services companies in business and information system transformation for major clients in the rail, urban transport, postal services, aviation and logistics sectors.

The insurance sector is fiercely competitive due to the increasing standardisation of offers, structurally low long-term interest rates and the escalating regulatory burden. At the same time, clients, and particularly millennials, are exhibiting new behaviours, with a shift in expectation toward the hyper-personalisation of products and services.

In this increasingly competitive global context, leading insurers continue to look to consolidation and transformation as the way forward. To set themselves apart, they are developing extended services and are taking into account the new risks associated with use (as opposed to ownership) of property, the rise of service business models, the sharing economy and cybersecurity.

Sopra Steria offers its clients a comprehensive solution for the implementation of new business models, support for strategic plans and digital transformation to put in place a platform-based approach, seen as essential to open the business and its information system to new partnerships and services across an extended value chain.

Retailers face a challenging business environment as well as profound and continual changes in the shopping habits of customers, who increasingly use digital technology. To remain competitive, transformation is essential. The aim is to secure and better manage retail business practices by offering a real ability to innovate to meet consumer demand for immediate and flexible services while respecting environmental issues.

Sopra Steria assists retailers with their digital transformation and has developed knowledge and experience in multi-channel commerce, optimisation of logistics chains and understanding customer experiences.

The Group has continued its R&D efforts, investing €114 million in 2022 (versus €137 million(4) in 2021) in developing and expanding its business solutions. These are gross amounts and do not take into account funding related to the French R&D tax credit (CIR).

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.”

The Group, currently France’s number-two enterprise software developer, confirms its medium-term target of continuing to grow its solution development and integration activities. Efforts will continue to be focused on enriching the Group’s solutions, adapting them to cloud systems, leveraging API-based access to data and services, integrating new digital technologies, developing managed services, and expanding operations into new geographic markets.

The development of Sopra Banking Software, whose aim is to conquer markets beyond Europe, remains a priority. The Group also continues to strengthen its leading position in human resource management and property management solutions. With organic growth as the preferred strategy, the Group remains on the lookout for acquisition opportunities.

Management at the Group’s three software entities (Sopra Banking Software, Sopra HR Software and Sopra Real Estate Software) confirmed the benefits of mapping out a Software Project that goes beyond merely setting up a reporting and control hub.

This resulted in the creation of a Software division spanning these three entities.

The first decision was to put in place, in 2021, a Design Authority Software (DAS) tasked with the following:

• ■defining mandatory requirements for all software entities and ensuring they are properly implemented;
• ■promoting knowledge-sharing: shared research, best practice, coordination of subject-specific communities, etc;
• ■developing and running tools and platforms on behalf of the three entities;
• ■managing key partnerships for the benefit of all.

In order to position itself even more securely with client decision-makers at the business department level, the Group is continuing its move up the value chain in consulting, and confirms its medium-term target of continuing to develop its activities in this area. To do this, it is gradually developing a range of consulting services and capacity in all of the regions in which it operates, using a model that favours synergies with the Group’s other business lines. The Group’s plan is to establish and develop a European consulting capability specialising in business transformation through technology. The Group aims to help its clients define and deliver on the promises they make to their own clients and employees by seizing opportunities offered by the ongoing digital, environmental and social transitions, in support of the Group’s strategy. The Group’s ambition is to be a powerful and widely recognised European consulting firm at the cutting edge of innovation in technology and management, offering tailored solutions designed to address specific business issues while honouring its clients’ culture and ESG(5) policy. The consulting business mainly operates in three segments: IT consulting; operational consulting, with a focus on Group clients’ core business; and strategy consulting, with a focus on digital services and associated marketing, innovation and data use.

The prominence of the Sopra Steria Next brand, created in 2019 to promote the Group’s digital transformation consulting expertise, has benefited from this. In France, it is also bolstered by the Group’s decision to integrate its CSR mission into its consulting activities. This mission, built around the idea of digital ethics, is backed by a dedicated communications plan.

Sopra Steria has successfully completed numerous digital projects. Its experience has allowed it to offer a holistic approach to digital transformation to the market, based on a series of best practices.

To step up its commitment to digital technology, the Group is continuing to invest with the goal of:

• ■being at the cutting edge of the market in all of its services and business models;
• ■strengthening its technology assets;
• ■transforming its operating models;
• ■educating all of its employees in digital culture, practices and skills;
• ■keeping an eye on the market in order to clarify its digital strategy and target the best digital partners.

The Group is adapting its software to factor in advances in digital technology in a number of key areas, such as the customer/user experience, analytics, AI, APIs, etc., and to take account in their architecture of changes in client needs, such as growing use of the (hybrid) cloud, increasing demand for Software-as-a-Service and the gradual adoption of the platform company model (particularly in the financial sector).

The same approach is being applied for each of the Group’s service activities – Consulting, Application Services (Build and Application Management), Infrastructure Management, Cybersecurity, Business Process Services – with the following Group objectives:

• ■using the potential of new technologies – analytics, AI/machine learning, smart machines, blockchain, IoT, augmented/virtual reality etc. – to benefit its clients through innovative applications;
• ■driving its clients’ transformation from its current position: For example, the Application Management offering has evolved to encompass the end-to-end transformation of processes and the corresponding modernisation of existing IT systems, including connecting digital technologies with legacy systems and migrating all or some of the IT system to the cloud;
• ■promoting new end-to-end approaches combining consulting and software: Providing IT strategy support for large companies and public authorities, implementing digital continuity in industrial value chains, building service platforms, overseeing the cloud-based and digital transformation of information systems, etc.

The digitisation of offerings and, more broadly speaking, changing client expectations, have led the Group to adapt its business models. The Group will thus be selling more and more solutions operated on behalf of clients and, in services, increasingly leveraging intellectual property (reusable components, implementation accelerators, etc.). It will thus generate more recurring revenue through its solutions, with less of a direct connection to the size of its workforce in services.

The Group is continually investing in the exploration of new ideas and expertise in architectures, and in emerging digital and cloud technologies and uses, relying on its teams of “digital champions” (experts led by the Group’s Chief Technology Officer).

At the same time, all necessary resources are being designed and put in place to rapidly develop and operate digital solutions on behalf of the Group’s clients that are natively designed to function in hybrid cloud environments:

• ■the Digital Enablement Platform (DEP), the technical foundation for building or modernising IT systems (designed to be able to interact with components of Amplify, Axway’s hybrid integration platform), an industrial DevOps chain and an environment to capitalise on and search for reusable software components, a private cloud that can be extended to the main public clouds;
• ■implementation accelerators for new digital technologies (smart machines, AI/machine learning, blockchain, IoT, etc.);
• ■digital factories to enable service offerings combining consulting and software (e.g. migrating information systems to the cloud).

The Group is gradually changing the operating model for its services and R&D activities (by integrating its aforementioned technology assets):

• ■extensive experience with agile projects (including many in collaboration with offshore and nearshore centres);
• ■roll-out of processes and resources (software and digital factories) for industrialisation, automation and reusable components developed to boost productivity and quality for IT services and R&D activities.

In particular, this involves greater use of smart machines (robotic process automation, intelligent automation, virtual assistants) in the Group’s recurring service activities (in connection with its Business Process Services, Infrastructure Management, Application Management and Support offerings) as well as expanding the reuse of existing technology- or industry-specific software components (IP blocks, open source) and the use of low-code/no-code development platforms for the building of solutions:

• ■transformation in line with the production model of each activity (distribution of roles between the onshore production teams, the service centres, and the offshore and nearshore R&D teams).

To accompany its transformation, the Group is making a considerable effort to train its employees and managers:

• ■strengthening its training offering: Introductory and more advanced courses on all digital/cloud technologies, training on new digital practices and new industrial environments, training on the digitised services provided by the Group.
• ■digitisation of training resources: virtual training rooms, in-house e-learning and access to MOOC-style learning platforms.

Numerous initiatives are being encouraged to promote and enhance innovation, such as the Group’s digital champions keeping an eye on technology advances and uses, innovation imperatives assigned to project teams, internal innovation competitions to develop new digital uses, hackathons open to clients and partners, as well as platforms for digital demonstrations, brainstorming, co-design, rapid development and technology intelligence open to clients, employees and partners (DigiLabs at all the Group’s major locations and a Next centre at its registered office), etc.

Special efforts are being made to establish targeted partnerships with leading players in the digital ecosystem by vertical and by major technology area (startups and niche players, institutions of higher education and research laboratories, top software development companies, tech giants, etc.). It is within this framework that a strategic partnership has been forged with Axway.

In order to ensure effective market intelligence, a collaborative startup observatory is made available to the Group’s teams of digital champions and all its managers.

In certain very specific cases relating to its digital strategy, the Group may directly or indirectly take equity stakes (through specialised funds) in young startups that it considers the most innovative in the market, applying a corporate venturing approach.

To support its positioning goals, the Group is continuing its policy targeting specific vertical markets, key accounts and business areas in all countries where it operates.

There are eight priority verticals that currently account for the majority of revenue: Financial Services; Public Sector; Aerospace, Defence & Security; Energy & Utilities; Telecoms, Media & Entertainment; Transport; Insurance; Retail.

For each vertical, the Group selects a small number of key accounts (fewer than 100 at Group level), focuses on a few different business areas in which it aims to secure a leading position and implements an inter-entity coordination system for the different countries and subsidiaries concerned.

Some of these verticals are considered particularly strategic. The Group has very clear strengths in several countries (broad position, IT and business expertise, replicable experiences etc.). The transformation needs of businesses, public authorities and ecosystems in place are considerable and rely on similar solutions from one country to the next. These verticals (Financial Services, Aerospace, Defence & Security, Public Sector) are eligible for corporate investment or external growth transactions.

Starting in 2021, the organisation of the financial services vertical has been bolstered in order to develop synergies between the various business lines and improve the Group’s positioning in Europe in this strategic market.

The financial services vertical includes:

• ■service businesses in France, the United Kingdom, Germany, Spain, the Benelux countries, Scandinavia, Italy and Switzerland, by Gallit and at the Group’s Service Centres;
• ■software and ancillary services supplied by Sopra Banking Software;
• ■software and ancillary services supplied by Sopra HR Software and Sopra Real Estate Software in the financial services market.

In order to achieve its leadership objective in its targeted verticals and business areas, the Group mobilises the development efforts of its various entities to build end-to-end value propositions as well as offerings of business solutions designed to address the business challenges faced by its major clients. As an example, the Group applies this approach to meet digital continuity challenges in the aerospace value chain.

Particular emphasis is placed on the financial services vertical, for which the Group offers comprehensive responses to productivity issues in the core banking and specialist lending sectors. These responses are based on Sopra Banking Software’s solutions and the Group’s full range of consulting activities and services.

In addition to regular targeted acquisitions in order to enhance its offering and expertise or strengthen its position in certain regions, the Group is ready to play an active role in market consolidation, which will inevitably be boosted by the end of the Covid-19 crisis. In this context, it will be able to carry out larger acquisitions.

To fulfil the mission it has adopted, achieve the targets set in this regard and respond to its clients’ growing demands, the Group is factoring social and environmental concerns into its strategy in three main areas:

• ■Digital ethics: Sopra Steria promotes a responsible approach in its consulting services;
• ■Green IT: The Group’s different business lines work to assess and optimise the environmental impact of the digital solutions they offer, build and operate for their clients (as part of a “green IT” approach);
• ■IT for Green: The Group’s activities in this area help clients address their sustainability priorities, using new technologies to develop innovative environmentally and climate-friendly solutions.

The Group’s strategy is built around its independent corporate plan focused on sustainable value creation for its stakeholders. This Europe-wide corporate plan is underpinned by expansion through organic and acquisition-led growth. Its goal is to generate substantial added value by leveraging a comprehensive range of end-to-end solutions, supported by the Group’s powerful consulting and software businesses and its combination of technology and sector-specific expertise.

This plan is set within an upbeat market for digital services, boosted by demand for digital transformation on the part of businesses and institutions looking to optimise their processes and increase their resilience.

Over the medium term, Sopra Steria is targeting compound annual organic revenue growth of between 4% and 6%, an operating margin on business activity of around 10%, and free cash flow of between 5% and 7% of revenue. 

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). 

Profit from recurring operations came in at €397.6 million equating to growth of 17.2%. It included a €23.2 million share-based payment expense and a €32.3 million amortisation expense on allocated intangible assets. 

Operating profit reached €361.3 million, representing an increase of 19.1%, after a net expense of €36.3 million for other operating income and expenses.

The tax expense totalled €83.2 million, an effective tax rate of 24.0%. 

The share of profit/loss from equity-accounted companies was a loss of €14.7 million (profit of €1.8 million in 2021). This includes an impairment loss (which is non-recurring and has no impact on cash) announced by Axway Software on 24 October 2022 in keeping with strategic decisions about its product portfolio and medium-term improvements in its operating performance.

After deducting €1.2 million in minority interests, net profit attributable to the Group came to €247.8 million, a rise of 32.0% on 2021. 

Basic earnings per share came to €12.23, up 31.9% (€9.27 in 2021).

Free cash flow was very strong, at €287.2 million (€264.4 million in 2021) in particular due to an increase in EBITDA of 8.2% (up €45.2 million) and strict management of the average payment period of trade receivables. 

Net financial debt totalled €152.0 million, down 53.5% from its level at 31 December 2021. As at end-December 2022, it was equal to 8% of equity and 0.31x pro forma EBITDA for 2022 before the impact of IFRS 16 (with the financial covenant stipulating a maximum of 3x). 

At the next General Meeting of Shareholders, to be held on 24 May 2023, Sopra Steria will propose the payment of a dividend of €4.30 per share (vs. €3.20 per share in respect of financial year 2021). The ex-dividend date will be 29 May 2023. The dividend will be payable as from 31 May 2023.

Over 13,000 new employees joined the Group in 2022.

The Group’s net headcount stood at 49,690 at end-December 2022 (up 4.7% year on year). 

Headcount at international service centres (in India, Poland, Spain, etc.) increased to 18.9% of the total workforce, notably as a result of a 14.2% increase in the workforce in India.

The subcontracting rate was once again close to its pre-pandemic level and 2 to 4 percentage points higher than at end-December 2020, depending on the region.

The workforce attrition rate was 17.0%, compared with 16.0% in 2021.

Sopra Steria sees its contribution to society as sustainable, human-focused and purposeful, guided by the firm belief that making digital work for people is a source of opportunity and progress.

With regard to the environment, CDP confirmed in December 2022 that Sopra Steria had made its A List – recognising the world’s most transparent and most proactive companies in the fight against climate change – for the 6th year in a row. This recognition notably reflects the Group’s target(8) of achieving an 85% reduction in its greenhouse gas emissions by 2040 (vs a 2015 baseline). As at end-December 2022, a reduction of 68%(9) had been achieved. By way of illustration, over the course of the year more than 19,000 Group employees received training in eco-friendly digital behaviours and more than 16,000 in issues relating to net-zero emissions.

In the field of social responsibility, in 2022 Sopra Steria secured GEEIS (Gender Equality European and International Standard) accreditation(10), which assesses firms’ human resources policies from a gender equality perspective. Other areas of progress in the year included signing the Corporate Parenthood Charter in France to promote a working environment and management culture conducive to work-life balance.

More generally, human resources is a key issue for Sopra Steria. The annual survey conducted in 2022 found that 78% of employees would recommend Sopra Steria as a great place to work (up 6 points from 2021), making virtually all the Group’s entities eligible for Great Place to Work® certification.

In a still uncertain economic environment, Sopra Steria has set itself the following targets for 2023:

• ■Organic revenue growth of between 3% and 5%
• ■Operating margin on business activity of slightly above 9%
• ■Free cash flow of at least €300 million

For 2024, Sopra Steria confirms that it is targeting an operating margin on business activity of around 10%.

During financial year 2022, Sopra Steria announced the following key transactions:

• ■On 11 July 2022, Footprint – a Norwegian consultancy specialising in environmental and sustainability solutions, which employs around twenty consultants – was added to the Group’s scope of consolidation.
• ■On 28 July 2022, Sopra Steria announced its plan to acquire CS Group (see the press release related to this transaction). Merger control and foreign investment approvals could be obtained by the end of February 2023, which should pave the way for the acquisition of controlling interests and the filing of a simplified public tender offer before the end of the first quarter of 2023. The company could be consolidated with effect from 1 March 2023. 
• ■The proposed acquisition of Tobania was announced on 17 November 2022 (see the press release related to this transaction). This acquisition should be finalised beginning of March and the company could be consolidated with effect from 1 March 2023.

A total of €55.3 million was invested in 2022 in infrastructure and technical facilities, as against €42.7 million in 2021.

Investments in facilities comprised the following:

• ■land and buildings: €0.0m;
• ■fixtures, fittings and furniture: €35.9m;
• ■IT: €19.4m.

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).

The Group’s organisation must retain flexibility in order to adapt to changes in its markets and ensure the successful completion of projects.

These are handled by temporary teams:

• ■within the entities;
• ■under the authority of a pilot entity, established to leverage synergies across several entities.

Each project is organised and carried out in order to meet fundamental objectives: client service, business success, and contribution to the overall growth of the Group.

Depending on their particularities (size, area of expertise, geographic area covered), large-scale projects can be managed at the business unit, division, subsidiary/country or Executive Management level. Certain large projects requiring the resources of several business units may involve the creation of a division.

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 table below shows the results of this assessment in terms of residual materiality on a scale of three levels, from least material () to most material ().

The management of this risk is integrated into the development of the Group’s strategy as well as its effective implementation. Each year, the Group conducts a strategy review and/or update, under the supervision of the Strategy Department, the Chairman and the Chief Executive Officer, with the assistance of the Group’s Executive Committee, covering some or all business lines and markets in which it operates. This exercise, which draws both on external studies and internal feedback from stakeholders in contact with clients, leads the Group to take a certain number of decisions, in particular involving the transformations to be undertaken or the acquisitions strategy. These decisions are applied, on the one hand, by the corporate functions, responsible in particular for investing on behalf of the entire Group in support of the planned transformations and, on the other hand, by all Group entities (countries and subsidiaries) as part of the updating of their three-year strategic plans. The Group-wide implementation of the transformations initiated by the central functions as well as the progress made on each entity’s strategic plan are monitored on a regular basis by the Chairman, the Chief Executive Officer and the Strategy Department, in liaison with the Group’s Executive Committee.

By way of illustration, the following were subject to additional review and/or monitoring in 2022:

• ■transforming the Group’s integration offerings, in particular those related to the cloud, AI and data and application services;
• ■seveloping consulting activities within the Group;
• ■Sopra Banking Software’s strategic plan and the structuring of the Software division;
• ■strengthening priority verticals, particularly the Financial Services vertical;
• ■the Group’s industrial policy;
• ■developing human resources;
• ■acquisitions.

Proposed acquisitions in the process of being identified, assessed or negotiated are reviewed on a regular basis by a dedicated committee. Due diligence procedures are implemented for all proposed acquisitions in order to identify the inherent risks of the potential deal. These audits – carried out in collaboration with external advisors – concern both financial aspects and the valuation of the target, as well as operating, legal and taxation aspects, human resources, governance, compliance and business ethics, and issues relating to the environment. All procedures associated with this upstream process are included in the “M&A Playbook”, which applies to M&A and corporate venture deals.

All acquisitions are then subject to an integration programme, making it possible to anticipate and then monitor all key stages of the process from a strategic, operating, financial and human perspective. These integration policies and procedures are in addition to the “M&A Playbook”.

The Group’s policy is to maintain a multi-client and multi-sector portfolio across multiple geographical operations and sites, in particular to avoid any uncontrolled concentration risk.

The Group’s strategy relating to key accounts is reviewed each year in accordance with country, business line and sector-specific strategic reviews in order to adapt this strategy to market developments. This is the object of a dedicated exercise with all concerned parties. A regular review at periodic steering committee meetings is also organised within the Group to monitor market developments.

Furthermore, swiftly implemented action plans help mitigate, if necessary, some of the effects of a reduction in business activity, such as transferring projects to the affected employment areas, reskilling of employees and limiting subcontractors.

The Group has set up a media monitoring system in order to be informed as soon as possible of any publications about it and be able to react. If any criticism of or allegations against the Group spread widely, crisis communication procedures may also be activated with the support of specialist agencies, with being able to fully guarantee that the negative effects of such attacks can be fully neutralised.

All risk prevention systems help to control crisis management. This concerns in particular those relating to human resources, management of projects and services and protection of IT systems and infrastructures. The Covid-19 pandemic has served as an opportunity to put the Group crisis management systems into effect. These are based on swiftly adapting the Group’s operations, with impetus provided at the highest level, in this case the adoption of dedicated governance with the aim of defining, coordinating and permanently monitoring remediation and crisis communication measures. These unified crisis management systems are also based on permanent interaction with entities’ management teams, who are in the front line in each country in which the Group operates, in order to react and quickly adapt the measures implemented by the Group. Despite this, the impact of a major external crisis of the same or a different nature, which is typically rapid and severe, remains a significant risk for the Group on a five-year horizon.

More specifically, as regards the business continuity plan to ensure our ability to meet our commitments to clients and internal operating requirements, definition of the policy and choice of implementation of the Group’s production sites depend on these factors. The decision to increase the number of countries and regions in which it operates is an integral part of this policy to maintain security and reduce risk exposure, allowing for the management of emergency plans. A redundancy principle is applied for critical infrastructures and system components. In the event of outsourcing or subcontracting, the same level of service is demanded of our suppliers. The Group has strict prevention and security procedures covering areas such as physical security, power cuts at critical sites, and data storage and backups. These procedures and technical measures are re-evaluated on a regular basis in order to adapt corrective measures.

Sopra Steria has established an information security policy in line with international standards and has put in place solid governance for this purpose, which is coordinated at the Group’s highest level.

The team leading the Group’s efforts in this area, which is coordinated and supervised by the Security Department, includes personnel from the Group’s Information Systems Department, along with cybersecurity experts from its Security Operations Centre (SOC), Computer Emergency Response Team (CERT) and chief information security officers (CISO) within entities. This organisational structure with its correspondents within entities, meeting different countries’ regulatory requirements and client needs as closely as possible, allows for in-depth knowledge of areas of risk and business demands. It is aimed at anticipating, preventing and managing cyber risks in relation to information systems, including both internal systems and those used for projects and services delivered, operated or managed on behalf of the Group’s clients.

The Group is continually investing in security awareness and training programmes covering employees (e-learning modules, awareness campaigns, videos, on-site and remote training), as well as in the constant improvement of protection, surveillance and detection systems and to expand the involved teams. The organisation therefore regularly reviews its procedures in terms of cyber threat monitoring, around-the-clock security event management, as well as vulnerability management, follow-up actions on computer emergency response team (CERT) reports, system obsolescence management, and the siloing and tightening of systems.

Sopra Steria ensures the reliability of existing systems by way of preventive testing plans and regularly conducts intrusion tests to assess the resilience of new systems put into service during the year. The entire system is verified on a regular basis, in particular by way of the annual audit programme and the certification audits for ISO 27001 and ISAE 34-02 covering the Group’s strategic and sensitive areas of operations. The Group reviews its policies and procedures, organisation and investments at least once a year, or as required whenever a security incident occurs, to adapt to changes in the context and risks, as despite everything these remain significant for the Group in view of the unprecedented escalation in threats.

Managing clients’ demands and maintaining production quality are central priorities for the Group. In order to ensure the quality of management and execution of services, the Group has developed a series of methods, processes and controls. In particular, the Group uses a Delivery Rule Book (a set of 32 mandatory rules covering everything from pre-sales to the end of the production phase for services).

The selection of Project Directors and of Project Managers responds to specific requirements and criteria according to the level of risk and project complexity. Particular attention is paid before any appointment is made. Project managers receive specific training. These courses are regularly updated to include issues meriting special attention and warnings relating to risks. In addition to project and line management, Industrial Managers under the authority of business unit/subsidiary managers and reporting functionally to the Group Industrial Department are responsible for monitoring all projects as well as the application of the production rules.

The review of proposals and contracts by line management, but also by the Industrial Department, the Legal Department and the Finance Department, is an integral part of the Group’s controls implemented to fulfil its commitments. Indicators known as pre-sales KPIs are used throughout the Group to monitor these milestones and ensure that they are achieved. In addition, projects are reviewed on a regular basis, at key phases in their production life cycle. These reviews, which are organised by the Industrial Department or by its local representatives, provide an external perspective on the status and organisation of the delivery. The achievement of milestones laid down in the Delivery Rule Book for the production cycle is notably measured via compliance reviews based on various checklists. Depending on its outcome, a compliance review may be supplemented by a more in-depth review of the project in question.

Monthly steering meetings facilitate an overview of quality at all levels, the monitoring of established annual quality targets and the determination of the appropriate action plans to continuously improve production performance and the quality of Sopra Steria products and services. The effective implementation of actions agreed during steering meetings, audits and reviews is checked by the Industrial Department.

As regards industrialisation, the Group has continued to invest heavily in the resources required to rapidly develop and operate digital solutions for its clients, designed to run in the cloud environment: the Digital Enablement Platform (DEP); implementation accelerators based on the build-to-reuse/reuse-to-build approach, which, as well as improving efficiency and productivity, aim to reduce the environmental impact of development; and digital factories to deliver service offerings combining consulting and software (e.g. cloud migration and modernisation of information systems).

Sopra Steria’s employees are the motor fuelling its growth and value creation. Employee recruitment and retention are two key focuses of the human resources policy. They have been translated into the following priorities:

• ■a sustained and pragmatic recruitment drive with recruitment numbers progressing strongly compared to 2021 levels (13,073 new hires in 2022, compared with 10,636) and surpassing pre-Covid-19 levels (10,844 in 2019);
• ■closer relationships with universities, with a focus on educational activities (classes, academic chairs, technology talks and presentations on business topics);
• ■an employer brand that conveys the image of an engaged and supportive Group with a singular and responsible collective ambition brought to life through iconic projects (HandiTutorat, Prix Étudiants awarded by Fondation Sopra Steria − Institut de France, etc.);
• ■a continuously improving candidate experience together with an optimised recruitment process and organisation;
• ■a specific induction process and related training programmes for each business line;
• ■regular checks on employee engagement, with a new edition of the Group survey in 2022 in partnership with Great Place to Work, with a higher level of participation and overall perception compared to 2021, respectively 84% (up 2 points) and 78% (up 6 points), and the implementation of action plans jointly developed with employees;
• ■a special focus on well-being in the workplace, through the Group’s preventive approach to occupational risks, for example.

To strengthen its balance and support its growth, Sopra Steria implements a human resources strategy centred on skills development, employability and the engagement of all employees. This strategy has several pillars:

• ■a regularly updated Core Competency Reference Guide, providing a shared framework for understanding the Group’s businesses, for employee evaluation, and for career development;
• ■a performance appraisal based on open communication between managers and their team members, shared with the human resources function and resulting in an individual development plan;
• ■a “people dynamics” approach, which involves identifying transformations in the Group’s businesses over a time frame of one to three years (emerging occupations, sustainable jobs, sensitive jobs, areas in which job offers exceed the number of applicants) and drawing up human resources action plans to integrate, maintain and develop the necessary current and future skills;
• ■a proactive training policy, whose objectives are reviewed and approved by the Group’s Executive Committee, supported by a Sopra Steria Academy training organisation committed to best practices, with adjustments made to its structure (governance, creation of specific Group and business line academies) as well as its offerings (more streamlined and international, management and leadership programme). A total of 1,537,505 hours of training were delivered in 2022, up 26% from 2021;
• ■an ongoing effort to support employees, including remote working agreements, local support for managers, mechanisms for listening to employees and monitoring risks associated with work-related stress, etc.

In order to support the Group’s development and respond to new regulatory requirements, the Internal Control Department, which covers business ethics and compliance, internal control and risk management, is supported in part by the network of Compliance Officers (who are also responsible for internal control) throughout the Group’s various geographical operations, the network of local representatives and local teams, as well as the expertise of functional divisions depending on their scope, in particular the Legal Department, Human Resources and the Finance Department. Developments in legislation and case law are monitored on a regular basis so as to plan ahead for any upcoming changes. Internal control rules and procedures are updated regularly to reflect these developments. The code of ethics, the code of conduct and the code of conduct for stock market transactions aim to prevent any activity or practices that do not comply with requirements (see Chapter 4, Section 4.1, “Put our values into effect and ensure the compliance of our actions” of this Universal Registration Document, pages 154 to 157).

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).

The internal control and risk management system applies across the entire Group, i.e. the parent company Sopra Steria Group, together with all fully consolidated companies.

Sopra Steria Group’s internal control and risk management system is founded upon the Group’s four-tier operational organisation as well as its centralised functional organisation. Each tier of the operational organisation is directly involved in the implementation of internal control and risk management practices. To this end, the Group has put in place a set of operating principles and rules, along with the appropriate delegations of authority. It is the responsibility of all Group employees to familiarise themselves with these rules and to apply them. For more information on the Group’s organisation, see Section 9, “Group organisation” of Chapter 1, “Business overview and strategies” of this Universal Registration Document (pages 36 to 37).

The management control system is designed not only to manage the dissemination of information, upwards to Executive Management and downwards to the operational and functional units, but also to guide, control and support the Group’s employees at every level. It involves steering meetings held at each of the different organisational levels, including the Group’s Executive Committee.

The management control system is the backbone of risk management within the Group, ensuring that risks are identified, assessed and managed at the right level of the organisation, ranging from specific contracts or projects to the overall issues affecting the Group, followed by the implementation of procedures to track progress on the related action plans.

These cycles are governed by specific standards (reporting timetable, participants, agenda, documents to be presented at the beginning and end of the meeting) and are supported by the management reporting system. Meetings are held according to a calendar, dependent on the organisational level and timeframe objectives:

• ■weekly meetings for the current month: Priority is given to the monitoring of sales, production and human resources;
• ■monthly meetings for the current year: In addition to the topics discussed at the weekly meetings, additional emphasis is placed on financial indicators (entity performance for the previous month, update of annual forecasts, actual vs. budget, progress report on actions in line with the medium-term strategy);
• ■annual meetings, looking ahead several years: The medium-term strategy and the annual budget process for the entities are discussed in the context of the Group’s overall strategic plan.

The implementation of this system at all operational and functional entities is a highly effective vehicle for cohesiveness, the sharing of values and practices throughout the Group, and control.

The Group’s communication and management applications are designed to standardise the documents produced by the Group. The production tools used or developed by the Group allow for the industrialisation of project delivery and of managed or operated services by improving the quality of deliverables.

The aims of the Group’s Code of Ethics, which is based on its core values, are to ensure compliance with international treaties, laws and regulations in force in all countries where it operates, and to reaffirm the Group’s ethical principles. This Code of Ethics is supplemented by a code of conduct for stock market transactions whose main aim is to reiterate and clarify the rules regarding sensitive information, insider information and the management of securities. Furthermore, the anti-corruption code of conduct sets out the rules and behaviours to be adopted to prevent corruption and influence peddling. For more details on the anti-corruption code of conduct, see Section 4.1 “Put our values into effect and ensure the compliance of our actions” in Chapter 4, “Corporate responsibility” of this Universal Registration Document, pages 154 to 157.

The framework of internal control rules, known as the Group Rules, constitutes the common core of operating rules applicable to all entities and is rolled out as early as possible in the integration process whenever a new company is acquired. With the aim of continuously improving internal control and better managing risks identified through the Group’s various risk mapping exercises, the Group Rules are regularly reviewed to ensure they remain relevant and supplemented to take into account, in particular, segment-specific developments, regulatory changes and internal audit findings.

The Group Rules include 164 items covering 14 areas corresponding to Group processes: governance and steering, human resources, pre-sales and contracting, production, information systems security, site management and security, purchasing, finance, legal structure of entities, insurance, mergers and acquisitions, corporate responsibility, marketing communications, and compliance. These rules may be adapted to suit the Group’s different geographies and subsidiaries provided they remain consistent with the framework laid down.

These fundamental rules are then broken down for each area in the form of detailed policies and procedures (e.g. Delivery Rule Book, Human Resources Policy, Information Security Policy, Purchasing Procedure, M&A Playbook, etc.). They are available on the Group’s intranet and are reinforced through the Group’s various training and communications initiatives.

As regards the production front, Sopra Steria’s Delivery Rule Book defines all the pre-sales, production, management and quality assurance processes required to successfully manage projects. The primary goal is to contribute effectively to producing the expected level of service that meets clients’ needs in line with time and budget constraints. It defines project management practices and processes suited to various environments and at different levels of management and supervision, as well as software engineering practices and processes. The Delivery Rule Book sits above all the Group’s quality systems. All quality systems in use within the Group are compatible with the Delivery Rule Book. The basic principles of the Quality Systems are described in a Quality Manual supplemented by procedural guides and operating manuals. UK, Scandinavia and CIMPA apply mechanisms that are similar but rely on specific methods geared to the primary characteristics of their activities.

Everyone in the Group has a part to play in risk management and internal control, from the governance bodies and senior management to the employees of each Group company.

The internal control and risk management system is approved and overseen by Executive Management, thus at the Group’s highest level. As the top level of authority and responsibility for the internal control and risk management system, it monitors the system’s continuing effectiveness and takes any action required to remedy identified shortcomings and remain within acceptable risk tolerance thresholds. Executive Management ensures that all appropriate information is communicated in a timely manner to the Board of Directors and to the Audit Committee.

The Group’s Audit Committee examines the main features of the internal control and risk management procedures selected and implemented by Executive Management to manage risks, including the organisation, roles and functions of the key actors, the approach, structure for reporting risks and monitoring the effectiveness of control systems. It has access to the elements necessary to reach an overall understanding of the procedures relating to the preparation and processing of accounting and financial information (presented in the following chapter).

Each year, the Audit Committee reviews the results of the Group’s risk mapping exercise and holds regular meetings with the Internal Control Department to monitor the implementation and adaptation of the Group’s rules and the internal control process.

The Audit Committee also monitors the activity of the Internal Audit Department through the following actions:

• ■approval of the annual internal audit plan;
• ■meeting with its Director once a year in the presence of the Statutory Auditors, but without the presence of management;
• ■biannual review of the results of internal audit assignments and follow-up on the implementation of action plans resulting from recommendations;

In accordance with the AMF reference framework, the internal control and risk management system put in place by Sopra Steria Group is structured around three lines of control, as presented below:

• ■first line of control: Front-line staff and operational management
• The first line of control for the internal control and risk management system consists of:
  • ●operational management, tasked with implementing the system defined at Group level for the area under its responsibility. This line of control makes sure that the internal control rules and procedures are effectively implemented, fully understood and consistently applied within its scope of operations,
  • ●the Group’s employees, who take due note of and apply all of the rules set out within the organisation;
• ■second line of control: Risk management and internal control;
• The aim of the second line of control is to monitor the internal control and risk management system on an ongoing and continuous basis to verify its effectiveness and coherence as well as the proper application of its rules and procedures;
  • ●internal Control Department and Compliance Officers at the entities

The internal control and risk management system is steered and coordinated by the Internal Control Department at Group level. In the context of risk management, it takes charge of the annual general risk mapping exercise, first by consolidating the information received from operational entities and functional departments and then by coordinating the necessary adjustments at the Group’s highest level. It monitors the action plans implemented as part of the Group’s risk management process, paying particular attention to those relating to its key risks. The integration of specific risks with the Group’s general risk mapping process (for example, corruption and influence-peddling risks, information systems security risks, risks relating to the duty of vigilance) and ensuring the overall consistency of the mapping process are also among its responsibilities in this area.

With regard to the risks that have been identified and assessed, the Internal Control Department defines and updates the internal control system’s various components. In carrying out these duties, the Internal Control Department works closely with all the Group’s functional and operational departments. The Group Internal Control Department consists of a team of four people.

The Group also has a network of Compliance Officers, appointed in each of the Group’s entities and across all its geographical operations. In 2022, there were 15 Compliance Officers. In the largest entities, they are assisted by a deputy. These Compliance Officers are responsible for adapting the guidelines and rules defined at Group level. In particular, they are tasked with making sure that all components of the internal control and risk management system as well as those of the Group’s compliance programme are effectively implemented, fully understood and consistently applied. They are also responsible for raising alerts in the event of difficulties encountered in the implementation of any of these components for their scope.

The Internal Control Department, supported by entity-level compliance officers, oversees monitoring of Group rules to ensure that they remain relevant and that any corrective action identified is properly implemented. Risk assessment campaigns are organised on a regular basis at the level of operational entities and functional departments, applying a methodological approach that combines self-assessment via questionnaires with joint assessments carried out in conjunction with the Internal Control Department.

• • Functional departments

The functional departments are key participants in the coordination of the internal control and risk management system. They assist the Internal Control Department in updating procedures specific to the processes under their responsibility.

Alongside the self-assessment and control procedures implemented by operational managers at every level, functional departments play a special role in the application of the rules for delegations of authority in force within the Group. They support operational staff in the area of risk management and, from a preventive standpoint, they may serve in an advisory capacity or perform ex-ante or detective controls on the application of rules.

The Finance Department is entrusted with specific responsibilities in the context of financial controls and the Industrial Department is responsible for control procedures relating to the management of its Quality System.

• - Finance Department

Financial Controlling falls under the responsibility of the Finance Department. Its main responsibilities include the consolidation and analysis of monthly results produced by the internal management system, controlling the consistency of monthly forecasts, verifying the application of Group rules, assisting operational managers, training management system users, and performing the reconciliation between the internal management accounts and the general ledgers.

As part of their control responsibilities, Financial Controllers identify and measure risks specific to each operational unit. In particular, they ensure that contractual commitments and project production are aligned with the revenue recognised. They raise alerts for projects that present technical, commercial or legal difficulties. They check that revenue is recognised in line with Group accounting rules as well as analysing any commercial concessions applicable and verifying their treatment in the operating accounts of the operational unit. They also ensure that the costs for the operational unit are completely and accurately recognised.

Financial Controllers devote particular attention to unbilled revenue and contractual milestone payments, and check that invoices issued are paid. In coordination with the manager at the relevant entity, they trigger payment collection, which is managed directly by the Finance Department. They check any credit notes issued.

Financial Controllers assess the organisation and administrative functions of operational units. They monitor compliance with rules and deadlines.

• - Industrial Department

Quality management relies upon the day-to-day interaction between the operational and quality structures and covers the methods for the production and application of professional standards.

Sopra Steria’s quality structure is independent of the project management and delivery operations. As such, it offers external quality assurance for projects with the objectives of assuring production and cost controlling, overseeing associated human resources, verifying production conformity and compliance with quality assurance procedures, and monitoring the quality assurance plan’s effectiveness.

Industrial managers under the authority of business unit/subsidiary managers and reporting functionally to the Group Industrial Department are responsible for monitoring the Quality System and all projects.

Reviews are performed so as to verify the application and effectiveness of the Quality System among the concerned Sopra Steria staff members (management, sales, operational quality unit). Projects are reviewed on a regular basis, at key phases in their life cycle. These reviews, which are organised by the Industrial Department, or by the quality structure’s local representatives, provide an external perspective on the status and organisation of projects.

Monthly steering meetings facilitate an overview of quality at all levels, the monitoring of annual quality targets established during management reviews and the determination of the appropriate action plans to continuously improve production performance and the quality of Sopra Steria products and services.

The effective implementation of actions agreed during steering meetings, audits and reviews is checked by the Industrial Department.

The Group has put in place a certification policy, covering all or a portion of its operations, depending on market expectations. This policy relates to the following standards or frameworks: ISO 9001, TickIT Plus, ISO 27001, ISO 22301, ISO 14001, ISO 20000, CMMI and TMMi.

• ■Third line of control: Assessment of the internal control system
  • ●Internal Audit Department

Under the internal audit charter adopted by the Group, the Internal Audit Department has the following tasks:

• ■independent, objective evaluation of the effectiveness of the internal control system via a periodic audit of entities
• ■formulation of all recommendations to improve the Group’s operations
• ■monitoring the implementation of recommendations

The work of the Internal Audit Department is organised with a view to covering the “audit universe” (classification of key processes) reviewed annually by the Audit Committee.

Internal Audit covers the entire Group over a cycle of a maximum of four years. Audits are performed more frequently for the main risks identified. To this end, Internal Audit carries out field audits while using self-assessment questionnaires for areas of lesser importance.

By carrying out work relating specifically to fraud and corruption, the Internal Audit Department has identified processes that are potentially concerned, associated risks, control procedures to be adopted (prevention and detection) and audit tests to be carried out. These are systematically integrated into internal audit programmes.

Internal Audit, which reports to the Chairman of the Board of Directors and operates under the direct authority of Executive Management, is responsible for internal control and monitors the system in place. It submits its findings to Executive Management and the Audit Committee. The Internal Audit Department consisted of a team of seven people at end-2022.

The Chairman of the Board of Directors validates the audit plan, shared with Executive Management, notably on the basis of risk information obtained using the risk mapping procedure, the priorities adopted for the year and the coverage of the “audit universe”. This plan is presented to the Audit Committee for review and feedback. Recommendations are monitored and compiled in a report provided to Executive Management and the Audit Committee.

The Internal Audit Department carried out 22 assignments in financial year 2022.

• ●External monitoring system

Furthermore, the internal control and risk management system is also monitored by the Statutory Auditors and the quality certification inspectors for the Quality System.

As part of their engagement, the Statutory Auditors obtain information on the internal control system and the procedures in place. They attend all Audit Committee meetings.

The Statutory Auditors are engaged throughout the year across the Group. Their involvement is not limited to interactions with the accounting department. To gain a more in-depth understanding of how operations and transactions are recorded in the accounts, the Statutory Auditors are in regular contact with operational managers, who are best placed to explain the Company’s business activity. These meetings with operational staff are structured around business unit, division or subsidiary reviews, during which the Statutory Auditors examine the main ongoing projects, progress made and any difficulties encountered by the business unit or subsidiary.

The audit procedure aims to ensure that the Quality System is both in compliance with international standards and is applied to the entire certified scope of operations.

Each year, quality certification inspectors select the sites to be depending upon an audit cycle and relevance of the activity in relation to the certification.

The purpose of this audit process is to identify ways in which the quality management system might be improved in order to ensure continuous improvement.

The internal control system and its operation are subject to internal and external assessments to identify areas for improvement. These may lead to implementation of action plans to strengthen the internal control system, under the oversight of the Group’s Audit Committee.

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).

All Group entities prepare a monthly budget, a monthly operating statement and revised monthly forecasts.

The budget process, which is short in duration, takes place in the last quarter of the year. This is a key stage. It provides an opportunity to apply the strategy approved by the Group’s Executive Committee, to adapt the organisation to developments in business segments and market demand, and to assign quantitative and qualitative objectives to all Group entities. Budgets, including detailed monthly operating forecasts, are prepared by each unit at this event.

Each Group entity prepares a monthly operating statement closed on the third business day of the following month. Management indicators (utilisation rate, selling prices, average salary, indicators relating to human resources, invoicing and receipts, etc.) are also reviewed on a monthly basis.

Finally, a revised operating statement prepared each month includes the results of the previous month and a revised forecast for the remaining months of the current year. This practice will be implemented on a quarterly basis in 2023.

Sales metrics (prospects, contracts in progress, signings, etc.), client invoicing and cash receipts are analysed at the management meetings organised by the management control system described above.

The results derived from the monthly management reporting documents are verified by Financial Controllers reporting to the Finance Department, who also reconcile this data with the quarterly accounting results in the general ledgers.

Each company establishes quarterly financial statements and prepares a consolidation pack.

For each of the companies falling within the scope of the audit of consolidated financial statements, the Statutory Auditors examine the interim and annual consolidation packs. Once approved, they are used by the Group Finance Department and the consolidated financial statements are examined by the Group’s Statutory Auditors.

The interim and annual consolidated financial statements are presented to Executive Management by the Finance Department.

As part of their annual accounts close-out at 31 December, the financial statements of Sopra Steria Group and its subsidiaries undergo a legal audit by the Statutory Auditors in order to be certified. A limited review is also performed on 30 June.

As part of its assignment to monitor the statutory audit of the financial statements, the Audit Committee takes note of the Statutory Auditors’ work and conclusions during the review of the interim and annual financial statements.

The Audit Committee examines the financial statements, notably in order to review the Company’s exposure to risks, verify that the procedures for gathering and controlling information guarantee its reliability, and ensure that accounting policies have been applied consistently and appropriately. It gathers comments from the Statutory Auditors.

The Group’s financial statements are then presented to the Board of Directors for approval.

The Financial Communications and Investor Relations Department, which is supervised by the Chairman of the Board of Directors, manages the Group’s financial communications.

The Group communicates financial information via several different means, notably:

• ■press releases;
• ■the Universal Registration Document and the various reports and disclosures that it contains;
• ■the presentation of the interim and annual financial statements.

The Group’s website has a dedicated “Investors” section that presents all of the aforementioned items as well as other regulatory or informative items.

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.

On the date at which this Universal Registration Document was published, the Board of Directors had 15 members with the right to vote, 12 of whom were directly appointed at the General Meeting. 3 Directors represent the employees and employee shareholders.

The renewal of three current terms of office will be proposed at the General Meeting to be held on 24 May 2023 (see the summary of resolutions, Chapter 9 “General Meeting” of this Universal Registration Document (pages 297 to 302). The Directors concerned are Michael Gollner, Sylvie Rémond and Jessica Scale.

Collectively, the members of the Board of Directors and the Chief Executive Officer hold 20% of the Company’s share capital.

The Nomination, Governance, Ethics and Corporate Responsibility Committee plays a central role throughout the four phases of the selection process for Independent Directors. The same process applies to Directors who are not independent as defined by the AFEP-MEDEF Code from Phase 3 as set out below.

Phase 1. This is the needs analysis phase. The Committee identifies the end dates of Directors’ terms of office and explores the possibility of renewing them. It takes into account the objectives of the diversity policy and the skills required. It accommodates imperatives arising from compliance with the law and with the Code of Corporate Governance. This analysis is undertaken for the Board of Directors itself and its committees. It focuses on the needs due to arise first and makes projections for the years ahead.

Phase 2. A list of potential candidates is drawn up based on the needs identified. This list is made up of the following:

• ■names put forward:
  • ●by members of the Nomination, Governance, Ethics and Corporate Responsibility Committee,
  • ●by members of the Board of Directors more generally;
• ■names put forward by recruitment firms;
• ■names proposed by Executive Management;
• ■unsolicited applications received by the Company.

The Chairwoman of the Nomination, Governance, Ethics and Corporate Responsibility Committee decides on the list of potential candidates. A file is put together based on publicly available information about the candidates.

After reviewing this file, the Nomination, Governance, Ethics and Corporate Responsibility Committee decides which candidates to contact and meet.

Phase 3. Members of the Nomination, Governance, Ethics and Corporate Responsibility Committee arrange meetings with the selected candidates. At their meetings, the Committee’s members compare their opinions. For each candidate, the Committee endeavours to assess the depth of their experience and how closely it fits the Company’s needs. What they would bring to the Board from a diversity perspective and their motivation are also considered. Lastly, the Committee checks their availability, whether they have any conflicts of interest, and whether they meet the independence criteria in the Code of Corporate Governance. Additional actions are agreed upon as necessary to complete the list of candidates.

Phase 4. The Board of Directors:

• ■is made aware of the findings of the previous phases;
• ■discusses the candidates put forward by the Nomination, Governance, Ethics and Corporate Responsibility Committee;
• ■decides which candidates will be put to the vote at a General Meeting of Shareholders.

In the specific case of Directors representing the employees and the Director representing employee shareholders, the Company decided to launch an extensive call for applications across the Group.

The Directors representing the employees are designated by the Sopra Steria Group Works Council.

The Director representing employee shareholders is elected at a General Meeting of Shareholders from among the candidates put forward by employee shareholders. After reviewing the candidates, the Nomination, Governance, Ethics and Corporate Responsibility Committee may recommend that the Board of Directors support an appointment resolution to be put to the shareholders at a General Meeting. The candidate elected is the one whose appointment resolution gains the required majority and the most votes, in the event of multiple candidacies.

The goal of the Board of Directors’ diversity policy is to bring together the perspective, skills and experience required for effective collective decision-making. It aims to meet the needs and reflect the characteristics of the Group while assembling a reasonably sized team. Each of its members must show good judgement and foresight, and uphold the standards of ethical conduct expected of a Director.

The impact on diversity and the integration of future Directors is considered every time a proposal is made to appoint Directors. The Nomination, Governance, Ethics and Corporate Responsibility Committee plays a key role in this regard.

Diversity is often assessed using measurable indicators related to gender equality, age and nationality.

With regard to gender equality, the Company aims to continue moving toward gender equality to the greatest extent possible. Each gender should account for at least 40% of the Directors. It is actively seeking to achieve gender equality in its Board committees.

Women currently account for five of the twelve appointments made at the General Meeting (42%). Two of the three committees are chaired by a female Director. The four female Independent Directors are members of at least one committee.

The targets for increasing the proportion of women in senior management positions are presented in Section 2.7.1, “Gender equality policy” of Chapter 4, “Corporate responsibility” of this Universal Registration Document (pages 123 to 125). They were reviewed and discussed at several meetings of the Nomination, Governance, Ethics and Corporate Responsibility Committee and adopted by the Board of Directors. They take into account the Group’s proactive approach to corporate social responsibility, its management needs, and the proportion of women in its business sector and at the Company. On Executive Management’s recommendation, the Board of Directors has approved targets, an action plan and practical arrangements that will make a real difference. They focus on delivering far-reaching action over the long term. The proportion of women in senior management positions forms part of those targets on which the Chief Executive Officer’s variable compensation is based.

Age is not a criterion that is considered. The Company has not set a minimum or maximum age requirement for directorships. However, the Articles of Association (Art. 14) limit the proportion of Directors aged over 75 to one third. The average age of the members of the Board of Directors is 63 (at 31/12/2022). Two out of 15 Directors are over 75 years old.

Given the international dimension of the Group’s business, it is considered desirable to have foreign nationals sitting on the Board of Directors. As far as possible, Directors who are foreign nationals come from or live in countries in which the Group operates or is seeking to develop business. To attract Directors living outside France, the internal rules and regulations of the Board of Directors permit Directors to take part in meetings using videoconferencing or conference call systems, and the Company can make payments to cover their travel costs. Furthermore, an adjustment to the method used to apportion compensation among Board members has been agreed to better reflect the constraints on foreign Directors. This consists of adding an additional 20% weighting to attendance at meetings of the Board and its committees for Directors living outside France. This does not apply to Directors who carry out their work within the Group. Four out of 15 Directors have at least one other than French nationality.

It is also a priority for the Board of Directors to have a diverse range of skills. The Company has identified 10 key competencies that it would like to be represented within the Board of Directors. These skills and areas of experience are as follows:

• ■knowledge of consulting, digital services, software development and the ability to promote innovation: This expertise will have been gained at a digital services company, software vendor or consulting firm, or in an industry sector focused on innovation in B2B services;
• ■knowledge of one of the Group’s key vertical markets: Ideally, this expertise will have been gained working for a client of the Group or one of its competitors. It may also be acquired through long sales experience in this market. It should be accompanied by knowledge of the services sector;
• ■entrepreneurial experience: Entrepreneurial experience will have been gained by starting up or taking over an industrial or commercial business and through contact with the various stakeholders (clients, employees, lending shareholders, suppliers, authorities);
• ■CEO of a large group: This presupposes past or current experience as a non-salaried executive company officer (Chairman, CEO or Deputy CEO) of a company established in more than one country or that employed more than 25,000 people;
• ■finance, control and risk management: This expertise requires professional experience gained in finance, audit or internal control or while holding a corporate office;
• ■CSR – Human resources and labour relations: This expertise requires professional experience gained in human resources, either in a company or as an external consultant, or while holding a corporate office;
• ■CSR – Environmental and social issues: This expertise presupposes familiarity with institutions, industry bodies, trade unions or public benefit or humanitarian organisations, or expertise in handling climate-related and environmental issues from a business perspective;
• ■international dimension: This indicates skills in cross-cultural management combined with being versed in more than one culture, working as an expatriate or holding corporate office in an international group;
• ■knowledge of Axway Software: Knowledge of Axway Software will have been gained through professional experience or corporate office at Axway Software or experience as a client or partner of Axway Software;
• ■operational experience within the Sopra Steria Group: This experience presupposes longstanding current or past service within the Sopra Steria Group, as an employee or equivalent, and in-depth knowledge of the Group, its working practices and its management. A corporate office of at least 4 years in a company recently acquired by the Group may also be taken into consideration.

Each of these 10 key areas of expertise and experience are currently represented on the Board of Directors by several Directors (see table below):

In addition to these ten key areas of expertise and experience, and given Sopra Steria Group’s ownership structure, the Nomination, Governance, Ethics and Corporate Responsibility Committee also considers experience of corporate governance within family-owned listed companies to be of benefit to potential Board members. Such experience promotes the use of key strengths and harnesses an understanding of the challenges faced by family-owned companies in pursuit of sustainable and profitable growth. It is primarily gained through serving as a corporate officer or senior manager in a company – either listed or with a broad shareholder base – whose main shareholder is either an individual or a family holding at least 10% of the voting rights and who either runs the company or has the ability to choose who runs it.

• ■Two Directors representing employees were designated on 23 September 2020 by the Sopra Steria Group Works Council. They are namely Hélène Badosa, a member of the Compensation Committee, and David Elmalem.
• ■A Director representing employee shareholders, Astrid Anciaux, was elected at the General Meeting of Shareholders held on 26 May 2021.

The Nomination, Governance, Ethics and Corporate Responsibility Committee also monitors the proportion of Independent Directors on the Board.

Eight Directors are considered independent by the Board of Directors. They account for around 67% of Directors appointed by the shareholders at a General Meeting.

A procedure has been laid down for selecting independent directors. See Section 1.2.2 of this chapter, page 57.

Every year, the Nomination, Governance, Ethics and Corporate Responsibility Committee and then the Board of Directors review the status of each member of the Board of Directors with respect to the requirements for Independent Directors set out in Article 10 of the AFEP-MEDEF Code of Corporate Governance for Listed Companies:

Like Sopra Steria Group, Axway Software is fully consolidated by Sopra GMT. The Nomination, Governance, Ethics and Corporate Responsibility Committee considers that a current term of office on Axway Software’s Board of Directors does not call into question the status of Independent Director:

• ■Sopra Steria Group’s Board of Directors is regularly informed of Axway Software’s operational and financial position. However, it does not discuss Axway’s routine operations and investments;
• ■the procedure for handling potential conflicts of interest applies to the consideration of any matters related to Axway Software;
• ■the Independent Directors present on both Sopra Steria Group’s and Axway Software’s Boards of Directors ensure that opinions independent of the core shareholder are heard on issues concerning both companies and their strategy.

The Directors in question are Marie-Hélène Rigal-Drogerys, Michael Gollner and Yves de Talhouët. Sopra Steria Group’s Board of Directors came to similar conclusions as the Nomination, Governance, Ethics and Corporate Responsibility Committee.

Members of the Board of Directors may hold an office or have an interest in companies that have potential business relationships with the Sopra Steria Group or its core shareholder. The Board of Directors shall assess whether the nature, purpose and significance of this affiliation may affect their standing as Independent Directors. It will draw, in particular, on the prior work done by the Nomination, Governance, Ethics and Corporate Responsibility Committee.

In the case of a business relationship, its significance is inferred by reference to various criteria, including in particular the following:

• ■whether the service provided is of a strategic nature;
• ■whether there is reciprocal dependence;
• ■the volume of business transacted (particularly where this equates to more than 1% of annual revenue);
• ■the selection procedure used and how often the business is put out to tender;
• ■whether the Director is involved in the business relationship.

A real estate investment trust held by André Einaudi owns the premises occupied by the Company for a number of years at its Aix-en-Provence site. The Board of Directors considers that these circumstances do not constitute a material business relationship. In reaching this conclusion, the Board took into account the age, term and amount of the lease, signed prior to André Einaudi’s appointment as a Director. It also noted that it is customary for the Group to rent its premises: apart from in exceptional circumstances, the Group does not own its premises. Lastly, the Board confirmed that no dependency is created for the lessor in relation to this lease.

The Company identified no other business relationships with Independent Directors.

The roles of Chairman of the Board of Directors and Chief Executive Officer have been separated. The Chairman of the Board of Directors is not regarded as independent under the AFEP-MEDEF Code. A change to the Board of Directors’ internal rules and regulations was proposed to appoint a Senior Independent Director responsible for handling conflicts of interest. The independent members of the Nomination, Governance, Ethics and Corporate Responsibility Committee unanimously voted against the Company’s proposal. They adopted this position on the grounds that conflicts of interest rarely arise within the Board of Directors. They also found that there have been no difficulties in managing any such conflicts. That said, the Committee has reserved the option of reviewing this proposal again in the future, in particular if the situation changes. The Board of Directors has endorsed its recommendation.

The Chairman of the Board of Directors is responsible for the Board’s shareholder relations.

Owing to their professional experience as well as activities pursued outside the Company, the members of the Board of Directors have all acquired expertise in the area of management and some of them also have gained expertise in the Company’s industry sector.

In addition, to the best of the Company’s knowledge, none has:

• ■any conflict of interest affecting the exercise of their duties and responsibilities;
• ■any family relationship with another member of the Board of Directors, with the exception of Éric Pasquier, who is related to Pierre Pasquier;
• ■any conviction during the last five years in relation to fraudulent offences;
• ■been incriminated and/or been the focus of an official public sanction issued by statutory or regulatory authorities, nor barred by a court from serving as a member of a supervisory board, board of directors or other management body of an issuer or from taking part in the management or conduct of an issuer’s business affairs at any point during the past five years;
• ■been involved in any bankruptcy proceedings or been subject to property sequestration during the last five years as a member of a board of directors, a management body or a supervisory board.

Furthermore, there are no service agreements binding the members of governing and management bodies to the issuer or to any one of its subsidiaries that provide benefits upon the termination of such agreements.

The organisation and working procedures of the Board of Directors are governed by law, the Company’s Articles of Association and the Board’s own internal rules.

Articles L. 225-17 et seq. and L. 22-10-2 et seq. of the French Commercial Code govern the working procedures of the Board of Directors.

The principal mission of the Board of Directors is to determine the strategic directions to be followed by the Company and to oversee their implementation.

The rules governing the organisation and procedures of the Board of Directors are set forth in Articles 14 to 18 of the Articles of Association. The Articles of Association are available on the Group’s website (Investors section).

The internal rules and regulations of the Board of Directors were last amended on 27 July 2022. The aim was to clarify the scope of the confidentiality obligation incumbent on a legal entity’s permanent representative.

The internal rules and regulations define the roles of the Board of Directors, its Chairman and the Chief Executive Officer. They specify the conditions under which their prerogatives may be exercised. They also provide that prior approval by the Board of Directors is required for certain 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”. The internal rules and regulations are available on the Group’s website (Investors section).

They also set out the purpose, composition and main provisions applicable to the three standing committees tasked with preparing certain matters for the Board of Directors:

• ■the Audit Committee;
• ■the Nomination, Governance, Ethics and Corporate Responsibility Committee;
• ■the Compensation Committee.

The internal rules and regulations allow for the possibility that these committees, in performing their respective duties and after having informed the Chairman, may:

• ■hear matters brought to them by the Group’s senior managers;
• ■call upon the services of outside experts at the Group’s expense.

They also provide that the Board of Directors may create one or more “ad hoc” committees.

The internal rules and regulations also address the following issues: summary of powers under applicable law and the Articles of Association, meetings, information received by the Board of Directors, training of its members, evaluation of the Board, travel expenses, Non-Voting Directors, Works Council representatives, confidentiality, discretionary obligations, including the specific case of permanent representatives of legal entities, and other ethical obligations, in particular regarding conflicts of interest, related-party agreements or stock exchange transactions. A procedure for assessing routine agreements has been added as an appendix. Each of the permanent Board Committees has adopted its own charter approved by the Board of Directors setting forth how it should operate. The selection procedure for Directors (independent and other) is appended to the Nomination, Governance, Ethics and Corporate Responsibility Committee’s Charter.

The annual work schedule, which is drawn up for the financial year, may be changed where justified by special events or deals. The Board of Directors met ten times in 2022, of which three meetings were not on the annual schedule.

The Board of Directors’ attendance rate in 2022 was 98% (with only three absences, two of which were for meetings not scheduled in the annual calendar).

All members of the Board of Directors agree to devote the time and attention necessary to fulfil their duties. Directors are required to be present at every meeting of the Board of Directors as well as those of its committees on which they serve, unless they are unable to attend due to an emergency situation or other legitimate reason.

All Board members also agree to resign from their positions should they feel they are no longer able to fully assume their responsibilities. They must inform the Chairman of the Board of Directors of any change in their professional situation that might affect their availability.

In accordance with the policy approved by shareholders at the General Meeting, the compensation stated in Article L. 225-45 of the French Commercial Code is allotted in full based on actual attendance at meetings of the Board of Directors and its committees.

The Board of Directors was kept regularly informed of the activities of the three standing committees. Their respective Chairmen presented reports on the work performed between the meetings of the Board of Directors.

The main items of business in 2022 were:

• ■Strategy and investment:
  • ●the Group’s strategy (seminar),
  • ●the strategy-related human resources policy,
  • ●various external growth transactions;
• ■Accounting and financial information:
  • ●approval of the financial statements for the year ended 31 December 2021,
  • ●approval of the interim financial statements for the first half of 2022,
  • ●2022 budget,
  • ●a project to raise medium-term finance from banks,
  • ●quarterly performance,
  • ●review of draft financial communications,
  • ●approval of management forecasts and corresponding reports,
  • ●management of the UK pension funds and arrangements for guaranteeing post-employment benefits,
  • ●review of the Audit Committee’s work and recommendations (in particular those concerning the financial statements and the finance policy, internal control and risks, external audit);
• ■Corporate governance, CSR:
  • ●appointment of the Chief Executive Officer,
  • ●review of the recommendations of the Compensation Committee, in particular those relating to:
    • —compensation policy for company officers,
    • —introduction of an employee share ownership and a performance share plan (LTI);
  • ●the financial and non-financial criteria used for the variable portion of the Chief Executive Officer’s compensation, and performance share plans (LTIs),
  • ●review of the work and recommendations of the Nomination, Governance, Ethics and Corporate Responsibility Committee, and in particular those concerning:
    • —the composition of the Board of Directors and its Committees (selection and appointment of new Directors, decisions on reappointing Directors whose term of office is expiring, composition of the committees),
    • —qualification of Independent Directors,
    • —operation of the Board of Directors and its evaluation,
    • —the company policy on workplace and pay equality and the targets for bringing more women into senior management positions,
    • —the opportunity to put forward a climate resolution for shareholders to consider;
  • ●the arrangement of a high-impact credit line (“Sustainability-linked Loan”) incorporating an environmental target (reduction in greenhouse gas emissions)
• ■Control and prior authorisations:
  • ●monitoring of routine agreements;
  • ●continuation of previously authorised agreements;
  • ●authorisation to guarantee commitments by subsidiaries controlled by the Group.

The composition and functioning of the Audit Committee are governed by the Board of Directors’ internal rules and regulations and by a charter that is reviewed at regular intervals by the Committee and was approved by the Board of Directors on 28 July 2021.

Its current members are:

• ■Marie-Hélène Rigal-Drogerys, Chairwoman (Independent Director);
• ■Michael Gollner (Independent Director);
• ■Éric Pasquier;
• ■Sylvie Rémond (Independent Director).

The Committee possesses the necessary expertise, including financial, accounting and risk management skills. The Committee also has knowledge of the Group and its businesses that is critical for a clear understanding of its activities, plus information security expertise. Three of the four members have spent all or part of their career in investment banking, lending or as a Statutory Auditor and have developed expertise in finance and risk management. The individual skills of each member of the Committee are set out in Section 1.2.4, “Skills required for the Board of Directors” of this chapter, pages 58 to 59. Their professional experience is summarised in Section 1.2.8, “Detailed presentation of the members of the Board of Directors” of this chapter, pages 62 to 76.

The Committee meets seven times a year on average and in any event no fewer than four times a year. They generally break down as follows:

• ■one meeting to review the interim financial statements and two for the annual financial statements, respectively;
• ■three meetings to monitor internal control and risk management systems and review internal audit;
• ■one meeting to review external audit.

Without prejudice to the expertise of the Board of Directors, the Audit Committee elucidates decisions through its work and recommendation and approves the provision of services other than the certification of the accounts. In the performance of its duties, the Committee may:

• ■receive any internal documentation necessary for its purposes;
• ■hear any person affiliated with or external to the Company;
• ■where applicable, retain the services of independent experts to assist it, at the Company’s expense;
• ■expedite an internal audit with the consent of the Chairman of the Board of Directors.

The Audit Committee Charter gives a precise definition of the Committee’s remit and explicitly states the principal matters excluded from that remit. The Committee’s main responsibilities cover:

• ■internal control and risk management;
• ■preparation of the accounting and financial information;
• ■the quality of non-financial reporting;
• ■critically examining management decisions and assessments relating to the Company’s financial statements, performance analyses and interim reports before they are submitted to the Board for approval and, where applicable, making recommendations to ensure their integrity;
• ■financial policy;
• ■internal audit;
• ■the Statutory Auditors;
• ■the green taxonomy;
• ■non-financial reporting;
• ■any one-off assignments and areas for attention identified by the Board.

The Committee met eight times in 2022, with one of these meetings spent considering the tender launched ahead of the mandatory switch away from Mazars at the 2024 General Meeting. One single absence was recorded. Except in specific cases, the Statutory Auditors, the Chief Financial Officer and his deputy, the Director of Internal Audit and the Director of Internal Control are invited to and attend all meetings as a matter of course.

Its meeting on the annual financial statements is held at least twenty-four hours before that of the Board of Directors. Prior to that, two preparatory sessions are held to address issues of methodology or specific points on the preparation and presentation of the financial statements as well as risk exposure, including social and environmental risks.

In 2022, the Audit Committee decided to consider human resources risk in greater depth.

The main items of business in 2022, dealt with either at the Company’s initiative or at the request of the Committee, were as follows:

• ■with regard to monitoring the procedure for preparing accounting and financial information and financial policy:
  • ●review of cash-generating units and asset impairment testing for 2021,
  • ●approval of the financial statements for the year ended 31 December 2021,
  • ●presentation by the Statutory Auditors of the results of the statutory audit, interim reviews and the accounting options adopted,
  • ●review of the 2022 interim financial statements,
  • ●Group refinancing,
  • ●off-balance sheet commitments and guarantees given under the delegated authority of the Board of Directors,
  • ●the Finance Department’s plans for 2022 and changes within the organisation,
  • ●priorities and procedures in relation to the green taxonomy,
  • ●renegotiations with the UK pension funds;
• ■with regard to knowledge of the business, monitoring the effectiveness of internal control and risk management procedures:
  • ●with regard to the Internal Control Department:
    • —review of the organisation and work by the department in charge of internal control and risk management,
    • —three risk mapping exercises (overall exercise, mapping of the risk of corruption and influence peddling and mapping of risk relating to CSR risks – duty of vigilance),
    • —review of the presentation of risk exposure, including social and environmental risks, for the draft 2021 Universal Registration Document,
    • —work on the risk appetite,
    • —an update on the performance and risk management indicators monitored by Executive Management,
    • —significant changes in the Company’s legal environment;
  • ●with regard to the Internal Audit Department:
    • —organisation of the internal audit function and the work programme for 2022,
    • —findings of internal audit reports,
    • —the “audit universe” (terminology used for the Group’s key processes),
    • —checks on the exhaustiveness of the internal audit function’s coverage of the Group,
    • —follow-up on implementation of recommendations from internal and external audit assignments;
• ■with regard to knowledge of the business:
  • ●presentation of Sopra Banking Software’s R&D organisation,
  • ●presentation concerning labour relations with employee representative bodies,
  • ●presentation of the Group’s presence in India and human resources in the country,
  • ●presentation of the changes in measures taken regarding information system security;
• ■with regard to the management of the statutory audit of the financial statements:
  • ●statutory audit engagement (scope, work schedule, fees for the past year, budget),
    • —the independence of the Statutory Auditors,
    • —rotation of the ACA Nexia partner signing off on audits of the financial statements,
    • —the tender process for the mandatory rotation away from Mazars at the 2024 General Meeting,
    • —prior authorisation for services other than the certification of the accounts;
• ■with regard to the Committee’s own organisation and activities:
  • ●overview of the Audit Committee’s activities in 2021,
  • ●key priorities for 2022,
  • ●the annual work schedule,
  • ●committee self-assessment.

The members of the Committee heard the Statutory Auditors, with no members of management in attendance. The same was true of the Director of Internal Audit.

Minutes are prepared after every meeting and are then approved at the beginning of the following meeting.

When requests by the Audit Committee cannot be satisfied immediately, they are subject to a formal follow-up procedure in order to ensure that they are addressed in full at the meetings scheduled throughout the year. Eighteen specific requests were formulated using this approach in 2022 and were, or will be, added to the meeting agendas established on the basis of the Committee’s annual work plan.

The Board’s internal rules and regulations and an operating charter govern the composition and functioning of the Nomination, Governance, Ethics and Corporate Responsibility Committee. The operating charter has been reviewed at regular intervals by the Committee and was approved by the Board of Directors on 25 February 2021. Its current members are:

Kathleen Clark Bracco, permanent representative of Sopra GMT – Chairwoman;

• ■Éric Hayat;
• ■Noëlle Lenoir (Independent Director);
• ■Pierre Pasquier;
• ■Jean-Luc Placet (Independent Director);
• ■Jessica Scale (Independent Director);
• ■Yves de Talhouët (Independent Director).

The Chairman of the Board of Directors sits on the Nomination, Governance, Ethics and Corporate Responsibility Committee. The Committee hears the Chief Executive Officer on the items of business as necessary.

The Committee has no decision-making powers of its own, but rather submits its findings and recommendations to the Board of Directors in support of the Board’s decisions. In the performance of its duties, the Committee may:

• ■receive any internal documentation necessary for its purposes;
• ■hear any person affiliated with or external to the Company;
• ■where applicable, retain the services of independent experts at the Company’s expense to assist it.

Minutes are prepared after every meeting and are then approved at the beginning of the following meeting.

The Committee’s main responsibilities are as follows:

• ■Nominations and governance:
  • ●selecting and preparing appointments of members of the Board of Directors, in accordance with the selection process, and of executive company officers,
  • ●proposing and managing changes it deems beneficial or necessary to the procedures or composition of the Board of Directors,
  • ●carrying out the annual review of the succession plan for unforeseen departures by the Chairman of the Board of Directors and the Chief Executive Officer,
  • ●evaluating the Board of Directors and the effectiveness of corporate governance,
  • ●verifying that good governance rules are applied at the Company and its subsidiaries,
  • ●assessing whether Board members may be deemed independent in view of deliberations by the Board of Directors on this subject;
• ■Business ethics and corporate responsibility (CSR):
  • ●verifying that the Group’s values are observed, defended and promoted by its company officers, executives and employees,
  • ●checking that there are rules of conduct which address competition and ethics,
  • ●ensuring that the anti-corruption framework operates effectively and that the Company’s Code of Conduct, training, whistleblowing framework and disciplinary system as provided for in French Law No. 2016-1691 of 9 December 2016 on transparency, the fight against corruption and modernisation of business life are all fit for purpose,
  • ●assessing Company policy on sustainable development and corporate responsibility and its alignment with the Sopra Steria Group’s commitments to human rights, international labour standards, the environment and the fight against anti-corruption,
  • ●ensuring that the Company has implemented an anti-discrimination and diversity policy:
    • —preparing for the Board of Directors’ annual review of the Company’s policy on workplace and pay equality,
    • —reviewing Executive Management’s proposed objectives, action plan and arrangements for increasing the proportion of women in senior management positions and tracking progress.

The Committee met five times in 2022, with an attendance rate of 97% (one absence). Items of business included:

• ■concerning appointments and governance:
  • ●appointment of the Chief Executive Officer,
  • ●the formal assessment process of the Board of Directors, the way it operates and its committees,
  • ●two proposals to amend the internal rules and regulations of the Board of Directors (role and status of the Senior Independent Director, clarification of the confidentiality obligation incumbent upon the permanent representative of a legal entity appointed as a Director),
  • ●members of the Board of Directors (see Section 1.2.2, “Selection process” of this chapter, page 57),
  • ●the search for new Directors,
  • ●the composition of the committees,
  • ●the organisation and operation of the Group’s governance,
  • ●verification of Company compliance with the AFEP-MEDEF Code,
  • ●qualification of Independent Directors,
  • ●annual review of the succession plan for unforeseen departures by the Chairman of the Board of Directors and the Chief Executive Officer,
  • ●review of the 2021 Universal Registration Document draft,
  • ●conclusions and recommendations set out by market bodies (Autorité des Marchés Financiers, Haut Comité de Gouvernement d’Entreprise, Institut Français des Administrateurs);
• ■concerning ethics and corporate responsibility:
  • ●the Company’s policy on workplace and pay equality, and the diversity policy,
  • ●action plan and results as regards the proportion of women in senior management positions,
  • ●analysis of the results of an employee satisfaction survey (“Great Place To Work”),
  • ●proposed climate-related resolution,
  • ●opportunity to set up a Board committee with sole responsibility for overseeing the CSR policy.

The composition and functioning of the Compensation Committee are governed by the Board’s internal rules and regulations and by a charter that is reviewed at regular intervals by the Committee and was approved by the Board of Directors on 25 February 2021. Its current members are:

• ■Jean-Luc Placet, Chairman (Independent Director);
• ■Hélène Badosa (Director representing the employees);
• ■Kathleen Clark Bracco, permanent representative of Sopra GMT;
• ■Éric Hayat;
• ■Sylvie Rémond (Independent Director);
• ■Jessica Scale (Independent Director).

The Committee has no decision-making powers of its own, but rather submits its findings and recommendations to the Board of Directors in support of the Board’s decisions.

In the performance of its duties, the Committee may:

• ■receive any internal documentation necessary for its purposes;
• ■hear any person affiliated with or external to the Company;
• ■where applicable, retain the services of independent experts at the Company’s expense to assist it.

The Committee’s main responsibilities are as follows:

• ■recommending to the Board of Directors compensation policies applicable to company officers;
• ■verifying the application of rules determined for the calculation of variable components of compensation;
• ■where applicable, offering recommendations to Executive Management on the compensation of the company’s principal executives;
• ■obtaining an understanding of pay policy and ensuring that this policy is in line with the Company’s interests and enables it to reach its objectives;
• ■preparing decisions related to employee share ownership and employee savings plans;
• ■preparing the policy for awarding performance shares;
• ■verifying the quality of the information communicated to shareholders concerning compensation, benefits in kind, and options received by executive company officers, and compensation in accordance with Article L. 225-45 of the French Commercial Code.

The Committee hears the executive company officers at the start of its meetings for general information and on each item of business as necessary.

Minutes are prepared after every meeting and are then approved at the beginning of the following meeting.

The Committee met five times in 2022, with an attendance rate of 100%. Items of business included:

• ■compensation policy of the Chairman of the Board of Directors;
• ■compensation policy for the Chief Executive Officer;
• ■the recommendations to the Board of Directors concerning compensation paid to the Chairman of the Board and the Chief Executive Officer in respect of financial years 2021 and 2022;
• ■compensation policy for members of the Board of Directors;
• ■review of plans to give managers and employees a stake in the Group’s capital;
• ■the consequences of inflation and how it can be addressed through the salary policy;
• ■the review of the draft Registration Document for 2021 and in particular the draft report on corporate governance;
• ■apportionment of compensation referred to in Article L. 225-45 of the French Commercial Code in respect of the previous financial year;
• ■conclusions and recommendations set out by market bodies (Autorité des Marchés Financiers, Haut Comité de Gouvernement d’Entreprise, Institut Français des Administrateurs);
• ■incorporation of policies and the conclusions from the Company’s dialogue with the main shareholders and proxy voting agencies.

• ■“Each member of the Board shall receive all information required in the performance of his/her mission and is authorised to request any documents deemed pertinent.
• ■In advance of each meeting of the Board, a set of preparatory materials shall be addressed to members presenting the items on the agenda requiring special analysis and preliminary reflection, provided that confidentiality guidelines allow the communication of this information.
• ■The members of the Board shall also receive, in the intervals between meetings, all pertinent and critical information concerning events or operations that are significant for the Company. This information shall include copies of all press releases disseminated by the Company”.

The members of the Board of Directors receive a monthly summary report on Sopra Steria Group’s share performance. This report describes and analyses developments in the share price and trading volumes. It puts this information into perspective by highlighting the main trends in macroeconomic and financial market data as well as comparisons with the largest companies in the industry.

Board members receive all press releases intended for investors. They are also sent certain internal publications.

They are invited to presentations of the annual and half-year results. They are also invited to the beginning-of-the-year meeting held for Group management.

An electronic platform is used to provide secure access to documentation on all types of devices: computers, tablets and smartphones. Members of the Board of Directors can view or download items made available for them or upload their own items for sharing or storage within this environment. This platform was set up following the findings of the formal assessment of the Board of Directors undertaken in 2016. Its installation was made possible by the availability of a high-performance cloud solution offering a sufficiently robust guarantee that access to stored data – even by technical staff – would be strictly controlled.

The Chief Executive Officer and the Chief Financial Officer are invited to Board meetings, subject to certain exceptions. Thanks to their participation, additional information that may be useful to discussions is made available. They do not take part in the consideration of matters that involve the Chief Executive Officer.

Depending on the items of business before a given Board meeting, other operational managers or outside consultants may be invited to attend. This is the case, in particular, for strategic presentations and discussions of external growth transactions.

The Audit Committee systematically includes in its annual work programme several presentations by operational managers giving it a deeper understanding of a risk factor from various angles and giving it more extensive knowledge about an issue within its realm of responsibility. Dialogue with these occasional discussion partners represents a channel for reporting information independently of management.

Article 5 of the internal rules and regulations states: “Any member of the Board may, on the occasion of their appointment or at any point during their term in office, engage in training they feel is necessary for the performance of their duties”.

Following the appointment of the Directors representing the employees, a specific training plan is implemented to orientate new Directors. The Board of Directors approves the content and format of this orientation training after consultation with the individuals concerned and with the Nomination, Governance, Ethics and Corporate Responsibility Committee.

This training was delivered by the Company or outside bodies, depending on Directors’ wishes and targets. In 2022, the Directors also updated their knowledge by attending meetings and seminars held by the various industry organisations (consulting firms, observatories, non-profits).

All Chairmen of Board Committees are members of the IFA (French Institute of Directors), as is the Secretary of the Board of Directors.

Directors are required to notify the Board of any conflict of interest, whether actual or potential. They shall refrain from taking part in any discussions and participating in the vote on corresponding topics.

Monitoring of related-party agreements is governed by law, the Company’s Articles of Association and the Board’s own internal rules. Proposed new agreements are reviewed prior to being signed. In addition, at the beginning of each financial year the Board of Directors reviews the purpose and application of agreements that will remain in effect. It checks whether they still meet the criteria on which their initial approval was based.

No new agreements were authorised during financial year 2022.

The Board of Directors regularly assesses whether agreements pertaining to routine transactions entered into at arm’s length meet the necessary criteria.

The procedure adopted by the Board calls for the following in particular:

• ■arrangements for identifying agreements subject to prior review by the Board of Directors.
• ■the assessment by the Board of Directors of agreements that have not been subject to such controls – any persons directly or indirectly affected by such an agreement may not take part in this assessment.

The Board has adopted the principle of annual assessments.

In accordance with the recommendations of the AFEP-MEDEF Code in this area:

• ■each year, at least one discussion by the Board of Directors is devoted to its operating procedures and ways in which they might be improved;
• ■at least every three years, a formal assessment is carried out;

The Board of Directors thus conducted a formal assessment of its operations at end-2022, overseen by the Nomination, Governance, Ethics and Corporate Responsibility Committee. The previous such assessment took place in 2019.

The Nomination, Governance, Ethics and Corporate Responsibility Committee proposed that the Board of Directors proceed with a self-assessment based on a questionnaire, with responses to be collected anonymously. To this end, the Committee drew up a draft questionnaire containing 35 items divided into five sections:

• ■members of the Board of Directors;
• ■information provided to Directors;
• ■meeting procedures and content;
• ■relations between the Board of Directors and its committees;
• ■assessment of individual contributions.

In particular, the aims of this questionnaire were to:

• ■evaluate to what extent the composition of the Board of Directors actually represents all shareholders and allows it to fulfil its role and responsibilities efficiently. The questionnaire also focused on the Directors’ contributions to meetings, any conflicts of interest, their complementarity, independence and level of commitment, as well as their understanding of the Company’s business activities, and the manner in which they update and refresh their skills and knowledge;
• ■ascertain the quality of the information made available to Board members;
• ■check their level of satisfaction with the responses provided to their questions and the handling of their requests;
• ■identify potential opportunities for improvements relating to the work procedures and encompassing all aspects, from the annual work schedule to the minutes of meetings;
• ■evaluate the preparation of discussions by the Board’s committees and the contribution of their work to the quality of exchanges at Board meetings.

After the questionnaire was approved by the Board of Directors, an overview of its findings was reviewed and discussed by the Nomination, Governance, Ethics and Corporate Responsibility Committee. The Committee also discussed an overview of its own self-assessment and the concurrent self-assessments undertaken by the Compensation Committee and the Audit Committee. It reported on its work to the Board of Directors at the Board meeting of 26 January 2023.

The Audit Committee has conducted its own self-assessment for a number of years using a questionnaire that covers its composition and its working procedures, the way in which its work is organised and its ability to fulfil its responsibilities. The Committee compares its procedures with the best practices established by similar bodies in other companies. Lastly, it familiarises itself with any changes in the regulatory environment. It takes into account the conclusions of this work to improve its own working procedures.

Self-assessment by the Board of Directors and its committees has identified opportunities for improvement, notably relating to its composition, and consideration of CSR (Corporate Social Responsibility) by the Board of Directors and its committees. Practical solutions were found to the areas requiring improvement that had been identified. These were then presented to the Board of Directors, which approved them. The process concluded with a meeting on 26 January 2023.

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.

The Compensation Committee made recommendations concerning the compensation policy for executive company officers, which was reviewed by the Board of Directors at its meeting on 22 February 2023.