Sopra Steria: Adding up outages and ransomware cleanup, Ryuk attack will cost us up to €50m
French IT outsourcer says its overall losses will deepen as direct result
Sopra Steria has said a previously announced Ryuk ransomware infection will not only cost it "between €40m and €50m" but will also deepen expected financial losses by several percentage points.
The admission comes weeks after the French-headquartered IT outsourcing firm's Active Directory infrastructure was compromised by malicious people who deployed the Ryuk ransomware, using what the company called "a previously unknown strain."
In a statement issued this afternoon, Sopra Steria said: "The remediation and differing levels of unavailability of the various systems since 21 October is expected to have a gross negative impact on the operating margin of between €40m and €50m."
Ominously, it added: "The Group's insurance coverage for cyber risks totals €30m."
On top of that, the full financial impact of the ransomware attack and cleanup will deepen financial wounds caused by COVID-19, as the company explained:
After including the items mentioned above, for financial year 2020 Sopra Steria expects to see negative organic revenue growth of between 4.5 per cent and 5.0 per cent (previously "between -2 per cent and -4 per cent"), an operating margin on business activity of around 6.5 per cent (previously "between 6 per cent and 7 per cent"), and free cash flow of between €50m and €100m (previously "between €80m and €120m").
The attack compromised a substantial portion of Sopra Steria's internal networks, although the firm insisted that it was "rapidly blocked" and that it had "not identified any leaked data or damage caused to its customers' information systems."
"The secure remediation plan launched on 26 October is nearly complete. Access has progressively been restored to workstations, R&D and production servers, and in-house tools and applications. Customer connections have also been gradually restored," the company said.
In a matter of days, Sopra Steria's share price crashed from €135 – when reports of the 20 October attack first began leaking out – to €101.8 the day after it reported the attack.
Its previous 2020 high had been €160 in January, crashing in mid-March to €82 – coincident with the COVID-19 pandemic's full effect reaching Western Europe – before recovering to its October high. At the time of publication, the share price stood at €122.50. ®
Sopra Steria has eased at least one potential source of ongoing financial pain, however. Its High Court dispute with Interserve over a disputed IT outsourcing contract was settled at the start of November. A company spokesman told us at the time: "Interserve Justice and Sopra Steria have amicably reached a mutual agreement without the need to seek judgment from the courts. Sopra Steria continues to provide IT services to Interserve Justice and we are working together positively in a spirit of respect and co-operation."