Sopra Steria has completed the acquisition of Digital Product Simulation, a specialist in digital simulation and Product Lifecycle Management (PLM) solutions, through its subsidiary CIMPA. This move bolsters the French tech group’s end-to-end PLM capabilities, specifically enhancing its expertise in simulation and the 3DEXPERIENCE solution developed by Dassault Systèmes. The acquisition targets high-growth sovereign industries, including aeronautics, defence, and nuclear sectors.

Digital Product Simulation will be consolidated into Sopra Steria’s financial statements as of August 1, 2026. The target company employs over 115 expert engineers and generated approximately €12 million in revenue under International Financial Reporting Standards (IFRS) in 2025. This addition supports Sopra Steria’s strategy to provide comprehensive digital transformation services to large enterprises across nearly 30 countries.

Financial Profile of Digital Product Simulation

The financial structure of the acquired entity highlights a distinction between gross and net revenue recognition standards. While IFRS revenue stood at €12 million, non-IFRS revenue was higher at €17 million. The difference is attributed to software distribution activities where Sopra Steria acts as an agent.

Under IFRS 15, when Sopra Steria acts as an agent, only the net commission is recognized in the consolidated financial statements. Consequently, the nearly €6.3 million derived from software distribution is excluded from the IFRS top line but included in the non-IFRS figure. This accounting treatment provides clarity on the operational scale versus the recognized earnings contribution of the new unit.

Strategic Integration

Sopra Steria, which generated €5.6 billion in group revenues in 2025, views this acquisition as a key step in rounding out its PLM expertise for strategic clients. With 51,000 employees globally, the group aims to leverage Digital Product Simulation’s specialized engineering talent to support industrial clients in critical infrastructure and defence projects. The integration focuses on combining deep sector knowledge with innovative technologies to drive tangible benefits for clients in sovereign industries with strong growth potential.

Sopra Steria reported a 3.0% year-on-year increase in net profit attributable to the Group to €146.3 million for the first half of 2026, driven by accelerating underlying organic growth that reached 5.3% in the second quarter. The Paris-listed technology services group raised its full-year organic revenue growth target to between 2.0% and 2.5%, up from the previous guidance of 1.0% to 2.0%, citing strong momentum in vertical markets such as Aeronautics and Defence, Security & Space. This upward revision reflects management's confidence in its positioning within digital sovereignty and AI-driven transformation projects across Europe.

The company has made its half-yearly Financial Report for the period ended June 30, 2026, publicly available and filed it with the Autorité des Marchés Financiers (AMF). The report includes the business review, condensed consolidated financial statements, and the Statutory Auditors’ review report. At its meeting on July 28, 2026, the Board of Directors, chaired by Pierre Pasquier, approved the financial statements. Rajesh Krishnamurthy, Chief Executive Officer of Sopra Steria Group, attributed the performance to the solidity of the business model and increasing client trust in strategic markets.

Total revenue for H1 2026 stood at €2,958.9 million, representing a 4.1% total increase compared to €2,843.7 million in H1 2025. Organic revenue growth was 3.0%, while underlying organic growth—excluding the dilutive impact of the concluding SFT programme—reached 4.9%. Operating profit on business activity rose 8.8% to €284.5 million, with the operating margin expanding to 9.6% from 9.2% in the prior year period. Basic earnings per share increased 4.5% to €7.62.

The France reporting unit, contributing 44% of Group total, posted revenue of €1,315.6 million with organic growth of 7.1%. The United Kingdom unit generated €454.1 million in revenue, up 2.5% organically, driven by next-generation business process services. The Europe reporting unit saw an organic contraction of 2.0% primarily due to the conclusion of the SFT programme, which contributed only €37.0 million in revenue versus €85.8 million in H1 2025. Excluding SFT, the Europe unit grew organically by 3.0%.

What the Numbers Show

The divergence between reported organic growth (3.0%) and underlying organic growth (4.9%) highlights the significant tailwind provided by excluding the winding-down SFT programme. While the SFT conclusion created a 1.8-point dilutive impact on overall growth, it also improved margins in the Europe segment through provision reversals. Furthermore, the acceleration from 4.4% underlying growth in Q1 to 5.3% in Q2 suggests improving operational efficiency and demand strength in key verticals like Aeronautics (12% growth) and Defence, Security & Space (10% growth), offsetting moderate contractions in parts of Northern Europe.

Free cash flow remained negative at -€143.6 million, consistent with historical seasonal patterns in the first half of the year and including €29 million in non-recurring outflows related to tax and restructuring. Net financial debt stood at €618.7 million at June 30, 2026, equating to 1.1x pro forma 12-month rolling EBITDA, well below the 3x covenant maximum. On June 25, 2026, the Group entered into a €300 million Schuldschein loan agreement to refinance maturing Euro PP bonds, extending its debt maturity profile at a weighted cost of less than 4%.

Sopra Steria confirmed other 2026 targets, including an operating margin on business activity of at least 9.5% and free cash flow of around 5% of revenue. The Group’s headcount rose to 51,929 employees, up from 50,304 in June 2025, while the workforce attrition rate decreased to 14.3% from 16.1%.