Despite continued growth (+2%) in its dominant public sector business (>50% of the total) and growth in the Utilities, Transport and Telecoms sector (+1%), Steria’s UK revenues contracted by 1% (organic) in Q3 to €181m. The culprit was of course Banking sector, which remains in decline. To be fair, Steria's UK revenues in the year ago quarter grew by 6.4% so the ‘comp’ was always going to be a challenge. Book-to-bill, at 0.90x, was the lowest among Steria’s key markets, though in line with Q3 2011.
Across the board, Steria’s group revenues for the 3 months to 30th Sept. grew by 2.5% (organic) to €448m, lifting ytd revenues to €1.37bn, representing 7.6% headline growth and 3.0% organic growth. Infrastructure Management and BPO drove the business (+9.4%) while Consulting & SI provided the drag (-1.1%).
Management did not reiterate the specific FY revenue and margin guidance given at half-time (+2% to +3% on revenues and operating margin >6.0%) nor even moot that it was on track to hit the numbers (as it did in Q3 2011). You’ll have to read into that what you will. However, management confirmed its ‘aim’ to save €15-18m in 2013 through restructuring. The sale of Steria’s loss-making Iberica business to Munich-based private equity firm, AURELIUS, due to close soon, should not make a material difference to this year’s numbers.
So, we see again the diversity of performance among the players in the UK market, as Atos gains share (see Atos UK hits double-digit growth) at the expense of Steria. We’ll have to wait another week or so to see how larger peer, Capgemini, fares, and likewise the now Logica-enhanced CGI.