For Subscribers

Get the complete article now!

TWST: Can we start with a brief historical sketch of your company (SOPR.PA) and work up to the things you’re doing now?

Mr. Pasquier: Sopra Group was created in France in 1968. From the outset, we were positioned in the IT services sector and soon became a key player in the French market. After an initial period of essentially organic growth and intensive innovation, we began to restructure our activities in 1985 and went on to become an international IT engineering firm. During this time, which marked the beginning of European expansion, we created the first subsidiary in Geneva. Sopra Group also embarked successfully on a number of large public projects, broke into the technical products market and developed our banking offer. In 1990, Sopra Group was listed on the Paris Bourse. From that time on, we have maintained a balance between organic growth and growth through acquisition. The group has remained in the IT services market throughout its 35-year history and has grown to include more than 6000 employees throughout Europe. The core of our consulting and systems integration market is located in France (73% of revenue) and in Europe (13% of revenue). Axway, the subsidiary for EAI technology, operates worldwide (14% of revenue). The total group revenue in 2002 was €531 million. This year, after a recent acquisition is finalized, revenue will be around €575-€580 million pro forma. Five years ago, our sector and this market experienced incredible growth. After that, of course, we saw quite a bit of decline. Things are pretty much stabilized now and 2004 is probably the beginning of a new growth period.

TWST: Is that your growth strategy, an acquisition strategy? Or is it one of organic growth?

Mr. Pasquier: The organic growth for the group is probably around 0% right now, but that's a good performance because, for nearly all of our competitors, it's been decreasing. Certainly, we have a strategy for organic growth. For the coming year (2004) we have targeted growth somewhere between 5% and 8%. However, organic growth is not sufficient to develop a good position outside of France. We need to buy, and I think that now is a good time to do so. We have one acquisition in the works as we speak (Inforsud Ingénierie) which will be finalized by the end of the year. A lot of big groups and a lot of competitors would like to sell their subsidiaries. It’s a good time to make acquisitions because these companies are not expensive. Generally, some restructuring has already been taken on by the companies and if you can buy a subsidiary of a large group, which is what we're in the process of doing right now, it can be a really good investment. If there is good, solid technology and good solid people inside the company, you can buy quality market share. This summarizes what we're doing, or what we would like to do—a combination of organic growth and growth by acquisition. Geographically speaking, our targets for growth by acquisition are France, the United Kingdom, and Spain.

TWST: Your competitors are: IBM, Accenture, AtosOrigin, CGEY and LogicaCMG; these are very branded competitors. How do you see yourself in the space with that type of competition?

Mr. Pasquier: We have two kinds of competitors: big and really big! The biggest one is IBM. CGEY is really big too but it's a French company. We compete at a level where there are a lot of good companies like LogicaCMG, like AtosOrigin, like Accenture.