What happened? Sopra Steria announced yesterday that Cyril Malarge, who was appointed CEO in January 2022 and has been with Sopra Steria for 23 years, will step down as CEO to ''pursue a new opportunity''. The Board will work on appointing a new CEO and in the meantime, the transition will be overseen by three Exco members including COO Dominique Lapere, Sponsor Aeroline (aero vertical) Xavier Pecquet, and Head of HR Louis Maxime Negre. BNPP Exane View: The news is unexpected and we believe will only add to investors'' concerns on the stock, which over the last few weeks have included a deterioration in the company''s message on business environment, macro/political situations in France and the UK, the impact of GenAI on pricing, and the reasons (and potential consequences) of the c. EUR200m rise of contract assets on the company''s balance sheet in H1 HoH. Additionally, Cyril Malarge introduced the company''s targets for 2028 at its last CMD in December 2024 (+2-5% organic growth post-2025, 10% adjusted EBIT margin, 5-7% FCF margin), so the market might be concerned about the sustainability of those now that he is stepping down. We note that although the PR confirms full-year targets for 2025, there is no mention of the midterm targets. We believe Cyril Malarge was well appreciated by the market, and although a move to become Alten''s CEO seems consistent with his career path, we expect Sopra Steria''s stock to react negatively today.