Sopra Steria Group SA (SOP) Earnings Call Transcript & Summary

[Interpreted] Welcome to the 2020 Annual Results Presentation of Sopra Steria Group. This presentation will be led by Vincent Paris, CEO; and Étienne du Vignaux, the group CFO. [Operator Instructions] This session is translated simultaneously into English. I will now hand the floor to Vincent Paris. Over to you.

So hello, everybody. Welcome to this annual results presentation, 2020 results of Sopra Steria. As per usual, I will be here with Étienne du Vignaux, our CFO. He will be giving part of the presentation. So this 2020 annual results presentation, as usual, has been organized in 5 sections. We'll look at the highlights for 2020. The second section will be the operating position by reporting unit. The third section will be the 2020 financial results commented by Étienne. The fourth section will cover our strategy and ambitions in the midterm. And the fifth section will be 2021 targets before answering your questions. So the highlights for 2020. I think 2020 highlighted 3 features within our company, so agility, resilience and responsibility. Agility first. Throughout the year, starting from the month of March, the start of the pandemic crisis, we were constantly adapting. We had to review our governance, our targets. Right from the start of the health crisis, we set our #1 priority, which is our employees' health, our customers and our partners. Our second priority was obviously service continuity. And then following this third priority was limiting the financial impact of this crisis. And that's what we did. Right away, we changed our working methods. In 1 week, we had 80% of the group working from home and this worked well. Right from the month of March, we took care of staffing, so our employees. It wasn't easy. We set ourselves a target. We said we had up until the end of the year to come back to a nominal situation. This is what we did. Obviously, we optimized operations across verticals and we stopped recruitment, so -- and we also reduced subcontracting. And the other important factor on the sales side was, more than ever, we remained close to our customers. We won certain market share. Obviously, there were certain deals that played out, and we had to win them. And we put together offers -- adapted to the environment very proactively. This wasn't a huge volume, but it was essential to make sure that we're fully aligned, fully adapted to our customers' concerns. And I think this has strengthened our positioning. And then the last area where we had to adapt quickly was obviously the cyberattack which came at a bad time for us. It was at the end of October, just at the start of the second pandemic wave. We identified this very quickly. We took decisions very quickly. We immediately decided to shut down our infrastructure, to cut off connections with our customers and take no risks. And then we immediately started a remediation plan to relaunch our infrastructure over several weeks. And we managed to fully complete this plan, thanks to the infrastructure and cybersecurity team's expertise. So this was the situation throughout the year. In terms of resilience, obviously, we're going to look at the figures. We was -- we were very resilient. Turnover was EUR 4.629 billion (sic) [ EUR 4.2629 billion ], so negative growth of 4.8%. The operating profit on business activity was EUR 300.2 million, 7% of revenue. The net result attributable to the group was EUR 106.8 million, so 2.5% of our revenue. Free cash flow, EUR 203.5 million. Net financial debt at the end of the year was EUR 425.6 million, down 17% when compared with 2019. And the U.K. pension fund deficit net of tax was EUR 119.4 million, so very close to the level that we had at the end of 2019 at EUR 112.6 million. Now if we focus on our revenue and the negative organic growth. It was limited to 4.8%, approximately 10 percentage points attributable to the pandemic and the cyberattack, 2 percentage points, a bit more specific, to Sopra Steria, so 2.5%. The first topic, obviously, regards the impact on the aerospace vertical where we're very present, 10% of our turnover. You can see the differences between the different quarters. First quarter, 11% growth, and then the 3 following quarters, between 20% and 30% negative growth. And then we also had the impact of the cyberattack, which was 1 percentage point focused on the last quarter of 2020. Now if we look at the quarterly breakdown of this growth. The first quarter generated organic growth of 3.3%. No surprises. The low point was hit in the second quarter at minus 8.4%. We started to increase in Q3, minus 5.9%. And then in the Q4, that's approximately 3.5% impact because of the cyberattack. And this -- we would have been at minus 4.2% in the fourth quarter. And obviously, I'll come back to the outlook for 2021. We're planning a first quarter in 2021 in keeping -- so negative growth but then a return to growth starting from the second quarter of 2021. Now in terms of operating margin, we were very resilient. We've limited this decline to 1%, going from 8% to 7%, with 0.2% linked to the cyberattack. Obviously, there's lots of different factors that enabled us to do this. So in operational terms, we maintained our prices, said we made a big effort to reduce our downtime as quickly as possible. This was well-executed because the situation is fully normal in Q4. And I'll come back to the Q1 in 2021. Then obviously, cost savings, so minus 62% with regards to travel and business expenses; minus 20% for administrative fees and advertising; minus 11% for project subcontracting. Now in terms of free cash flow, good performance here, EUR 203.5 million. Within this, with -- about EUR 50 million advanced collection but obviously, take into this account, we've still transformed our results above 50%. So this reflects an improvement in our practices over the last couple of years, and this is reflected in the DSO which was at 54 days at the end of 2020 compared with 55 days at the end of 2019. And then resilience is also our market positioning, good news here. Despite the difficult context, we have made progress. We have a better foothold than what we had a year ago. We're better positioned. We're well-established in France as the second #2 IT services company. We've established our new consultancy brand now for 1.5 years. We're positioning ourselves as a leader in digital transformation, and we're recognized as such. And then with our software activity, a lot of market recognition for software, especially for lending, which is a major strength for us. And then for Sopra HR Software, recognition in the payroll and human resources domain. And then the third topic as part of our highlights is corporate social responsibility. More than ever, in a time of crisis, this is important. This is something that's illustrated on a daily basis. And I was saying that we -- our major priority, #1 priority was protecting our employees' and our clients' and partners' health. Aside of the cyberattack, we're absolutely focused on protecting our customers and our own organization. And then with regards to environment, we have amplified our commitments, reducing greenhouse gas with new commitments which were made, and then we signed the digital responsibility charter. So that's what we can say about corporate and social responsibility. And so all of this effort is ongoing, and we've made progress since several years now. And this is reflected in the recognition from nonfinancial rating agencies. We can see here that we have made improvements since 2017 in terms of our rating. And obviously, we will carry on pushing this as part of corporate social responsibility. We will keep working in this direction. Now I would like to suggest, as per usual, if we look at the operational situation in each of our reporting units, we have a reminder of the figures. So EUR 4.269 billion (sic) [ EUR 4.262.9 billion ] with negative growth of 4.8% and an ROA of 7% compared with 8% in 2019. So if we start with France. France was clearly the geography which was the most impacted by the pandemic and by the cyberattack. You can see this in the figures, minus 10.2% growth. We lost 2 percentage points in terms of profitability from 9.6% (sic) [ 9.7% ] top level to 6.8% in 2020. The explanations are obviously our exposure by sector and business line. The aerospace sector, obviously, is an area where we suffered, and especially in France, where this is worth 20% of our turnover. Consultancy was down about 15%. And then obviously, the cyberattack, this is clearly our geography where we're working most on our infrastructure, with fixed price commitments. So this is where we were impacted the most. But there are a lot of things that we were satisfied and a lot of progress for the future. We were resilient in the public sector, good growth here and good growth in defense and governance. We have become the French leader in digital services for insurers and social security with the acquisition of Sodifrance, which is confirmed. And then more importantly, obviously, looking towards the future, 2021 is off to a good start. Consultant downtime is back to normal. We've restarted recruitment. So we can see a progressive return to growth in turnover starting from the second quarter. So off to a good start in France. Now for the U.K. In the U.K., we were very resilient. You can see organic growth of plus 1.9%, and we improved our top level margin, which went from 7.3% in 2019 to 8% in 2020. This was obviously driven by the 2 joint ventures which we have with the U.K. government, so NHS and SSCL, with average growth of 16%. And we withheld -- we withstood well in the defense and security sector and the government sectors. And as is aligned with our performance over the last several years, obviously, the private sector was under pressure, but we have gained new market share in the banking domain, so with HSBC and in a digital domain as well. Now for other Europe, resilient. Organic growth of plus 2.3%. We improved our profitability. Top level margin was at 6.7% in 2019, was at 8.1% in 2020. Growth was driven by Scandinavia and Belgium, but the other countries had a moderate decline. With regards to operating margin improvements, this applied across all countries in this division. So we're satisfied about this. And then the last comment on Sopra Financial Technology, so the joint venture we have with Sparda Bank is following its operating plan with a turnover of EUR 204.9 million. And the operating margin on business activity will be dilutive during the platform construction phase. Sopra banking software now. Moving on to software, negative growth in -- and turnover of 9.1%. We were resilient with regards to licenses. But as with our other activity, we saw a decline in service activities, especially during the first lockdown. But more important than the figures is the fact that we're expecting our operational plan in terms of product development. So for Sopra Banking Platform, we have continued to invest in core banking, continued to invest in opening up to digital. We've amplified and accelerated with the acquisition of Fidor Solutions. And as planned, following our operational plan, we've worked on Sopra Financing Platform with the Cassiopae road map, which was followed. This is reflected in an improvement in project margins. So this is good. We're still seeking to generate double-digit growth as quickly as possible but without too much pressure in the short-term because we have to transform our office. We've finalized acquisitions. We've had many acquisitions since several years now. So we don't want to put too much pressure on the short-term situation even if our target is to generate double-digit growth in the long term. Now for Other Solutions, organic growth of minus 8.9%. Margin, which was down 15.7% in 2019, went down to 8.8% in 2020. We saw a drop in license sales. And certain projects were postponed -- decisions were postponed, but this is -- obviously, we saw a net improvement of profitability, 12.7% compared with 5% in the first half. So we're not back to where we were a couple of years ago in terms of margin, but we're getting closer. And then another highlight, obviously, this is a key highlight for our HR activity, is that we successfully rolled out Source Solde. A lot of people thought we wouldn't be successful with this project, but we were successful. So 250,000 members of the French Army are using our solutions. So that's what we can say about all our different divisions in terms of our operational situation. Now I'd like to suggest we hand the floor to Étienne du Vignaux.

Ladies and gentlemen, now we're going to start with the consolidated income statement for our group. First, consolidated revenue at EUR 4,262.9 million, therefore, down 4.8% organically. And then the operating profit on business activities that Vincent described at EUR 300.2 million, therefore, margin of 7%, a drop of 100 basis points from 2019. Between the operating profit on business activity and profit from recurring operations, we can see as we saw in the first half a decrease in expenses in share-based payment expenses. In 2020, the group didn't initiate new plans based on share-based payments. And then we have had an increase in EUR 6 million versus 2019 with SAB and [ SSCL ] acquisitions made the year before and the acquisition of Sodifrance at the end of 2020. And this then includes an accelerated amortization of assets for PLM activities for aerospace. Then the operating profit from recurring operations is at 6.1% of revenues at EUR 261.2 million. The other operating income and expenses are at almost EUR 59 million. And therefore, the operating profit is at EUR 202.3 million, therefore, 4.7% of our revenue. Between this operating profit and the net profit, we've seen a stable financial result. The other financial income and expenses since 2019 include the interest linked to the debt and renting in compliance with IFRS 16. And the tax expense is decreasing of approximately EUR 60 million in absolute values. And after taking into account the share of net profit from equity-accounted companies, mainly Axway, and deducting minority interest, the net profit attributable to the group is at EUR 106.8 million to the group, therefore, 2.5% of our revenue. Let's have a look at other operating income and expenses. As you can see, for a total of almost EUR 59 million, there's EUR 21 million coming from the 2 events that impacted the group this year. EUR 15 million, more or less, due to the direct impacts of COVID crisis, and this includes restructuring, and a bit more than EUR 5 million, these are one-off net costs due to the cyberattack at the end of the year that had an impact on the last 3 months of the financial year. Then let's have a look at the tax. The tax effective level is at 34.1%, therefore, a slight increase from 2019. This tax includes, of course, company tax or corporate tax plus also production taxes, that is the contribution on the value-added of companies in France called CVAE, which is not very much sensitive to the changes in the profit level. This is why there's no decrease in the tax level each year. And as you can see on the slide here, given the evolution of corporate attacks and the decrease in CVAE in France, the effective tax rate will be 28% in 2021. A few words about net financial debt, it's down 17% to reach EUR 425.6 million at the end of the year, in the context, which was difficult due to COVID crisis and the cyberattack. We've seen the good performance in terms of cash generation of free cash flow at EUR 203.5 million. I will give you more information on that in a minute. Almost EUR 100 million invested in external growth, mainly EUR 34 million during the second half. And dividend flows, which this year is only for the dividends paid out to the minority shareholders in the joint ventures. Now more information about our free cash flow. As you can see, there's a change, thanks to which we reached a figure of EUR 203.5 million this year. That's free cash flow for 2020, of course, the decrease in the EBITDA. And if we look at the cash position, as you can see, we have one-off costs more than EUR 49 million -- or EUR 49.5 million. That includes, of course, restructuring, traffic restructuring plus the cyberattack. Conversely, we've seen an improvement in operating working capital for more than EUR 47 million. Good result that was obtained in a very special context at the end of the year because apart from the operating loss that was induced due to the cybercrisis, we had to stop billing for a little with a risk, of course, on our cash performance. But this didn't materialize due to the fact that our internal teams were mobilized and also the solidarity of both our private and public customers. I would like to thank them. The group in 2021 -- or 2020 rather benefited from anticipated payments that were due in 2021. And the amount -- the net amount is EUR 50 million for these anticipated payments. And of course, these are amounts that will not reoccur in 2021 on our cash position. And as that said, during the first half, this result was not obtained to the detriment of our supply. Since the beginning of the crisis, the group has made sure that we have a responsible policy to pay our subcontractors. And today, the group has paid all of its debt and let all of its social and tax obligations. And we have not transferred any of these debts during the financial year. We'll have a look at our financial structure. Now there are 3 key messages. First, the financing of the group is still diversified with bonds, as you can see, plus loans from the banks, plus we have the NEU CP and MTN. We have a bit more than EUR 1 billion that are undrawn. And as you can see, we have a number of maturities that are far away. We have no short-term maturities. The main maturities would be between 2023 and 2027. Of course, the environment is still uncertain. The COVID crisis is not yet over. Vincent will tell us more about the outlook, but we start 2021 with a stronger balance sheet. As you can see, if you look at the ratios on the slide now. The net debt-to-equity is at 29%. We were at 47% 2 years ago. And the net debt to EBITDA is 1.1 to be compared with ratio authorized that is a ratio of 3. Now I'll hand over to Vincent again, who's going to give us a reminder of our strategy and midterm ambition plus outlook for 2021.

Thank you, Étienne. So now if we look at our market context, we can talk about strategy and our mid-term approach. I think what we need to share is it's all very well. We're very lucky to be on a buoyant market. And we'll see growth in the coming years, generated by digital transformation. According to Gartner, this average growth could be around 5% per year. So this is very positive. What is going to drive digital transformation? Obviously, no surprises here. There are 3 factors: go to cloud, migrating IT systems to the cloud, mainly for time to market agility reasons for all of our customers in all verticals and all areas of activity; digitalization and automation of processes for companies and major administrations; and then obviously, cybersecurity, which is going to become a strategic differentiator with increase in threats. So obviously, resources are going to have to progress over time. So these 3 topics are going to drive the market. And the good news is that we are working on the heart of these topics within Sopra Steria. Our aims. We are confirming our ambition. We're confirming what we said 2 years ago. We still want to establish ourselves as a European leader in digital transformation. We want to be a benchmark partner for public authorities and major companies in Europe. That's the first factor. Our project hasn't changed, hasn't changed at all. It's an independent project. It's an ambitious project based on added value, a European project in the services domain and global and software, and it is a project-based on differentiators. So we have 3. We have software activity within an IT services company, which is very rare. it's not easy, but it's a real differentiating factor. Contribution to European digital sovereignty challenges. We are European, and we're going to carry on pushing in this domain. We've got lots of initiatives underway. And then our entrepreneurial culture and the close relationship we have with our customers based on trust, long-standing relationships. Obviously, in the period that we're going through, this is key. Our strategic levers are the same. We're going to be drawing on the same thing. So our focused strategy. We should remember that during the Sopra Steria merger in 2015, we decided to focus on 100 major European customers, and we've kept these customers since then. We're going to maintain them, and we will be focused on them. We've chosen 8 preferred verticals, which will keep them, and we try to improve every year in terms of our resources and the knowledge of our customers' business. And then obviously, we can't be champions everywhere, but -- so we'll focus on specific, 2, 3 specific business areas in each verticals. Our offer strategy is going to be focused on transforming digitalization offers, ramping up added value. And then a major differentiator is our end-to-end approach, which we want to roll out across the group so that we can consistently align all of our business lines. Production model. We have the same levers here. Industrialization in terms of methods and tools, reusing expertise and assets. This is going to be a strategic differentiator. And then, obviously, the X-shore model, which we will reinforce and we will be working on as we have done in previous years. In terms of software, same investment areas. So we have the 2 products Sopra Banking Platform and Sopra Financing Platform for software banking software. And then for HR and real estate, we have offer innovation, so opening up to digital and where possible making sure we are capable of rolling out an end-to-end approach within the group. So those are the levers which we will be drawing on. And then in terms of financial targets, once again, we have the same targets, no reason to change here. We are still targeting a business mix reflecting added values so 15% consulting, 20% for software and 65% for IT services. Organic performance in terms of growth. Now we're aiming between 4% and 6%. Operating profit on business activity, about 10% of revenue, and a free cash flow between 5% and 7% of revenue. And then another key factor is that we want to be an offensive player, we want to take part in consolidation offensively in the coming period. Our nonfinancial targets now are still focused on 3 areas, and we will be working on these 3 different domains. So climate change, we've made a commitment to net zero emissions in 2028. This reflects a clear trajectory where we've already made commitments. Boosting female representation in the workforce, we're aiming for 30% in the Executive Committee by 2025. And then the next topic is obviously, digital responsibility. So on a daily basis as part of our management methods, as a part of our business methods and customer management, we want to integrate digital responsibility. It's not something that runs on the side. It's at the heart of our offerings and our organization, and we've started working on this in real terms. So to finish, our financial targets for 2021, but just a few comments on the environment. And the context, obviously, as Étienne said, we have a changing environment contrast. We have an active market, but with limited visibility. From our point of view, we have sustained commercial activity, good portfolio of deals, but with limited visibility. Our vertical markets are contrasted, but no changes to what we had at the end of 2019. Aerospace and transport, we're not expecting a full recovery. But with current market conditions, we're expecting a stabilization, which is good news and then the public sector is off to a good start. Contrasting situations with our customers. Strong investment in digital transformation, but with cost saving plans which will be expanded to generate more room for maneuver and then, obviously, our internal situation. We've got the year after a good start. We've restarted recruitment but with less -- with fewer subcontractors than in the first quarter of 2020. Obviously, all of this is reflected in targets. Organic growth in revenues between plus 3% and plus 5% with the first quarter with negative growth. Operating profit on business activity between 7.5% and 8%, and a free cash flow of around EUR 150 million. So that's what we want to share with you. Those are the highlights and the key figures for 2020 and the outlook for 2021. So now I'd like to suggest that we move on to the questions.

[Operator Instructions] We've received the very first question from Nicolas David from Oddo Securities.

Congratulations for these good results in a tough environment, a complicated environment. I have 3 questions for. The first one on France. I'd like to understand the underlying dynamics in France. Can you tell us more about the Q4 growth that you would have expected? Setting aside the cyberattack, is there an improvement versus Q3? And also we had holidays -- number of days of holidays taken minus 10, I think -- minus 10 in Q3. Will you have an improvement in Q1 2021? And other solutions -- a question on other solutions. Can you tell us more about in Q4, a project that were postponed, is it one big project or several smaller projects? Can we expect some type of catch-up during Q1 of 2021? Or should we wait for the full 2021 year to be over? And finally, can you tell us more about your M&A strategy? Are you more offensive, which was the case before the crisis, looking for more important deals? Or are you targeting acquisitions in the way you have done more recently?

Now there are many questions that [indiscernible] and then Étienne will help me to give you more figures. Now what's important for France is that in terms of number of days of holidays are concerned, we're back to a normal situation at the beginning of 2021. We don't need to catch up in terms of holidays. This is quite nominal. The main topic as we said earlier on, is that we have fewer subcontractors. We now work in a more fluid way with aerospace to reallocate all of our people, and we managed to do this. This was the case at the end of the year. So this is quite positive for 2021. Of course, in 2020, we suffered. And then we suffered less and less during the year. Now the impact of the cyberattack is more or less 4 points growth. But given what I said about 2021, earlier on, I think we've been going to grow again, all the indicators are green. I was thinking also about our consultant downtown -- downtime, which is quite nominal. So there's no reason for us not to pick up again and recover, which was the case before. We cover our revenue and margin as well. We do this progressively. But this is more or less the general context in France.

Étienne du Vignaux. Now in France, for Q4, the organic growth that has been reported or de-growth is minus 14.6%. We feel there's 4.5 points of growth that we lost due to the cyberattack. That is the organic degrowth, otherwise would have been 10%. And for the other solutions, as you can see, they were quite effective -- affected. Organic de-growth is 18%, into -- and divided by 2 or halved that is below 10% without the cyberattack.

Vincent Paris. Now you've asked another question about other solutions. It's not just one project that's been postponed, it's more or less our portfolio, which is what I told you during the first half. And we were a bit more active during the second half, but there's always this type of lag and postponement in terms of signature, licenses that were impacted and services that were impacted as well. So this is the general context. Now how are we going to start this year? Well, more or less in the same way, that is we're not back to the levels we had when the years were really good for these 2 lines of products, but it's better than H1 2020. So it all depends on how quickly our customers make their decisions. And the third question has to do with M&A. That's true. We said we wanted to be offensive, but this was not at all a priority. It wasn't since March last year. But now we're a little more stronger after all of these crises. Well, we're very careful. The crisis is not yet over. As you can see, every single week, we look at COVID-19 and how things are changing. This has effect on us, but we could perhaps be a bit more offensive than we were in 2020. We're always looking for solutions so that we are active with our M&A policy. And ideally speaking, we want to strengthen Northern Europe. We want to focus on value added. And we're looking for targets, as always. We're looking for targets. But then what's going to happen? We don't know. We have to be pragmatic and in the years to come and we'll see if we could do this in 2020, but we want to be more sensitive with our M&A policy, I can confirm this.

Now we've received another question from Laurent Daure from Kepler Cheuvreux.

I have several questions to ask as well about your profit level. One about banking, your banking business. Can you tell us more about the overruns? Is it okay for you as you start 2021? Is everything solved? Or will there be still some problems to solve during the first quarter? And then other solutions, I have a question about other solutions. The margins are a lot better, but we're not back to your historic margin levels. Do you need a real improvement of the top line of this business activity so that you have margins at 14% or 15%? Or do you have other cost-cutting plans so that you reach this level quickly? And more generally speaking, also, if I look at the guidance of 7.5% or 8%, I'd like to know more about the headwinds? Because I was listening to your message about France and I think we can expect some type of improvement -- an improvement on the side of the margins, banking will improve. And so what could go down, and therefore, your margin could only improve by 3/4 of a point?

Okay. Vincent Paris. Now as far as banking is concerned, our plan with projects and Cassiopae, well, we've made considerable progress. We've been doing that for almost 2 years. We regularly improve. And is this over 100%? No, there are still some customers with whom the situation is complex. I can't say it's over yet. We did our job. We are close to meeting our objectives. We follow our plans. Yet, there might be some odd impacts in 2021. But what's very important is that with APAK and Cassiopae and Supra Financing Platform, we hope that the effects will be visible in 2022, but maybe a bit earlier than that. And for other solutions, what really is important is that we must renovate our offerings. We need to open up on digital technologies, and our customers are changing as well. So we have to be quite conservative, yet, we have to be offensive. We shouldn't just think about cost-cutting plans. We could pay high price for that. So of course, we'll have to go back to the margin levels we have before, but we don't want to compromise our future. That means that during perhaps a couple of half years, we're going to have the numbers not as good as we think, but we're going to try and meet our target, but it might take a bit more time than the months to come, the months ahead. And you had a question on margin as well, I think. Well, there are a couple of things I can tell you the [ SSCL ], the joint venture that we have with Sparda Bank. And this would be dilutive, of course, for the period to come, as I said before. That's one of the elements. And more generally, we need to change the group needs to be transformed. There are uncertainties as well. If you look at the markets, it's always very complicated to have anything that's certain as to what's going to happen in 2021, even though we think it's going to be much more positive than in 2020, there are still many questions in here. Looking to move forward little by little -- of course, our objective is to improve our performance, and we will do this without compromising our long-term project. And we need a lot of investment. We need to invest in training, and we will invest in these. So we need to consider continual improvement, but also, we need to do what we have to do so that we are in a leading position in the future. This is why we've given you this guidance.

I have another question about banking. You said there would be some type of improvement of your margin in 2021?

Vincent Paris. Well, yes, given the comments I gave you before. Now if we have to set priorities, this is the long-term project that is -- we want Sopra Banking Software to succeed. We're very ambitious with the Sopra Banking Software. So this is the margin we're going to have in 3 years. This is the position we're going to have. It's much more important than our margin in 2021. But in order to meet this objective, we need to consider regular improvement. Of course, we'll always give preference to our product plans and the transformation that's necessary in the group. We have to merge and acquire the companies nicely, and perhaps take a bit more time. And we make decisions monthly on that. It all depends on the context and how it changes and our customers as well. This is a hard thing you see. And this is in this order. So I'd rather be conservative. Of course, we will target what we confirmed before that is the first level of improvement and then we'd continue on the same tracks. But what's very important for us, that's our priority, is the long-term project.

Now what about -- what you have in the pipeline for licenses in 2021?

Well, my answer is more or less the same level that we had in 2020. That's our objective. And as far as the pipeline is concerned, we had a bit more than 2x the volumes of licenses we had last year at the same time. We're slightly below that level now, but it all depends on the decision-making cycles that our customers have. It's too early today to tell you more about what we expect with licenses. We need to wait a little. But we think we have a number of trump cards. Of course, we always have to look at the general context, which is usually the case of software.

We have another question from Gregory Ramirez from Bryan Garnier.

2 questions, the first is linked to 2021. So with regards to revenues, so 3% to 4% growth. Can we have a little bit more information on what could grow in -- grow quickly? Are there any areas where there's negative growth? I'm thinking about France. Perhaps is there going to be a strong recovery here or in the U.K. with a lesser impact, with the power of NHS and SSCL? And then with regards to -- the second question is on profitability. Once again, I understand that we could have a strong recovery in margin in France. With Sopra Banking Software, it's not that obvious. I'm not sure about the margin rates here. And then obviously, a recovery in other solutions. What could mean -- how could we balance out, obviously, the savings, which are lasting savings within -- so 0.5% improvement in 2021 margin, so how can we balance out this with the savings that were made in 2020, which we won't have again? Obviously, there might be -- travel might restart? And then when I'm talking about lasting savings and Savings Limited linked to premises, offices or perhaps some of the ongoing remote working. Obviously, this is not exclusive. And then also travel which will be limited in the long term, given this new flexible organization.

Okay. So with regards to your question on growth, all entities -- we've planned to have growth in all entities, would not plan to have very, very strong growth and then a negative growth in others. So obviously, the others -- some will be stronger than others, but they will all generate growth. In the U.K., for example, we've got activity in the public sector, where we think we have the possibility to have growth in all of our geographies and all of our entities broadly speaking. Now for margin. Margin, from my point of view, is going to be sustained from top down. When we talk about 3% to 4%, yes, obviously, we have room for maneuver here. This is good news. We're going to have more active business. And more broadly speaking, this should push up margins. And then with regards to savings plans, obviously, you spoke about offices, we will take the necessary steps. We will obviously take all measures that we have to take, but I'm expecting an improvement in margins, thanks to our business and a return to growth rather than savings plans. Obviously, we've already done a lot of things last year.

And in terms of the work and in terms of homeworking, where do you stand? What is your target for the year? And midterm, what is the percentage or the ratio of homeworking compared with those working in the offices in-person?

So today, 90%, basically nearly all of the workforce. And when we don't have people working from home, it's a confidentiality or security reasons or the customer requirements. But essentially, all of our employees are working from home at the moment. While the conditions -- the pandemic conditions are they've done today, obviously, our priority is going to be health. So we will operate with our employees working from home as we are today. We haven't really set ourselves any other targets. With regard to the system that you were talking about, the system for the future. Obviously, there's great contributions from working from home. It's meant that the company can continue on -- carry on working. Obviously, this is something that will be amplified in the future, but we can see the limits of this system in the long term. The big risk is that we lose our culture, collective intelligence. It's not the same. The fund that we have on a daily basis isn't the same. A lot of employees are -- just want to come back to the offices. So this is something that should be taken into account as well. And I don't think it's the right time to give a detailed answer to this question. Obviously, we're in the middle of a pandemic still. Basically, everyone is working from home. So obviously, we're going to have to invent things. It's not easy. We'll find a solution. We'll consolidate the situation over time. So a lot more homeworking, but obviously, we still need to be together collectively. And obviously, this varies from business line to business line. Consultancy is not the same as infrastructure or systems integrations. We don't have the same solution for young employees who are joining the group and then people who were with the group for over 20 years. And broadly speaking, we can see that depending on the different project phases, we won't have the same solution. So I don't want to give figures or ratios because the situation is actually more complicated. We're going to be pragmatic. We will push this, but we're going to try and take the best of each situation in the future. For 2021, I don't think this will change a lot with regards to the current situation which, unfortunately, is probably going to remain like this up until the summer, but we will keep adapting. That's what I can say about this.

And we have another question from Emmanuel Parot from Gilbert Dupont.

So just a few questions here. Can we have the license amount for Sopra Banking Software? I think you're talking about EUR 60 million last year? Second question on Sopra Banking Software, with regards to the margin around 15%. Obviously, can you tell us a bit more about the level of activity that you need to achieve this margin levels, the weighting of R&D and licenses? And then last question was more on cybersecurity. Could you give us a reminder of the weighting of this activity? So what is your offering? What are your differentiating factors? So just a bit more information in this domain?

So with regards to Sopra Banking Software, as you were saying, the license amount in 2019 was around EUR 60 million. It's about the same amount in 2020, so it's stable. The level of revenue that we need to be able to generate 15%. Obviously, we're not looking at it from this point of view. We're more looking at improving the ratio with more managed services, more maintenance, more recurring revenue when compared to services more broadly speaking. But we are capable of generating 15% regardless of the turnover that we will have, given the growth and the positioning that we have. This is quite feasible. It's there's more growth then all well and good. But we're going to rationalize R&D and then rebalance licenses, managed services and services to be able to address this matter. And that's what we're working on year-on-year. The last question was cybersecurity. So we're generating about EUR 100 million at group level. So we have an offering, which is comprehensive. We don't just do consultancy. We have an industrial approach with foundations. We run protection detection systems in real-time for our customers. And this is why we're -- legitimately, this is why we have expertise in this domain. Systems obviously moving very, very quickly. And we also do consultancy. So obviously, when we have the crisis, have to remain positive. We came out a bit on top, but this reinforces the trust that customers have in us because they're asking for our experience, our expertise. Following this crisis, they want to hear from our expertise. So we will carry on investing in this domain, which is a strategic differentiator. Unfortunately, we're just at the start of this threat. Everybody is aware of this, whether it be our competitors, our customers, everyone is looking at this closely. And we will reinforce our efforts, both for us and for our customers. As I've mentioned, this is a genuine lever, and it's essential when you're pushing cloud, when you're pushing digital, we have to manage this matter. And we're in a good position with prestigious customers who place their trust in us and partners in this domain.