Groupe Steria: Q1 13 conference call feedback: back-end loaded recovery on margins
We reiterate our Buy rating following last Friday’s conference call. Despite weak Q1 13 sales negatively impacted by tough comps and utilisation rates under pressure in France, we are convinced Steria will see its op. margin recover significantly in 2013 thanks to the 3P plan launched during summer 2012. The weakness in France is likely to be offset by a strong performance in Scandinavia, and profitability increases in almost all geographies except France. Admittedly, the stock does not have enough immediate positive catalysts as the H1 13 op. margin should be flattish, but the prospect of a 1ppt surge in H2 should be a rerating trigger for the stock at the back-end of the year in our view.
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