Capgemini: growth momentum confirmed in Q3 2015

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Q3

2014

Q3

2015

Change at constant exchange rates and perimeter

Change at current exchange rates
and perimeter

Revenues

2,591

3,036

+1.5%

+17.2%

The Group achieved revenues of €3,036 million in Q3 2015, representing an increase of 17.2% compared to the one published for the third quarter of 2014. The difference between organic and current growth is due to the relative evolution of Group currencies compared to the Euro and the acquisition of IGATE finalized on July 1^st 2015. The performance of IGATE is in line with expectations and its integration is on schedule.

TRENDS BY BUSINESS

On a like-for-like basis, Consulting Services (4% of Group revenues) continue to accelerate, with an increase in revenues of 6.7% in Q3 vs. 4.4% in H1. Local Professional Services (Sogeti) (14% of Group revenues) is also slightly improving with growth of 1.4% (against 0.5% in H1). Application Services (60% of sales) which already had strong momentum in H1 with 5.1% growth, continues to support the Group’s growth. Revenue growth for the quarter, primarily driven by the acceleration of clients’ investment in digital and cloud projects, reached 8.2%. Other Managed Services (22% of Group revenues) see their activity decrease by 13.7% due to the anticipated decline in revenue of a major contract in the United Kingdom and an unfavorable economic environment in Brazil.

TRENDS BY MAJOR REGION

On a like-for-like basis, North America – now by far the Group’s largest region with 31% of revenues – grew by 5.2%, with a positive momentum in Financial Services as well as in CPRDT (Consumer Products, Retail, Distribution and Transportation), and a slowdown in energy and utilities. The UK and Ireland region continues to experience a reduction in revenues (-11.0%) due to the evolution of a major contract mentioned above. France is more dynamic than in H1 with a growth of 2.0% driven by a pick-up in projects business. Benelux, meanwhile, remained virtually stable (+ 0.6%). In the Rest of Europe, growth was 10.4%, accelerating compared to H1, with strength notably in Nordic countries and Germany. In Asia-Pacific and Latin America, growth was limited to 3.7% in Q3 due to the economic environment in Brazil, Asia Pacific, however, maintains a double digit growth.

HEADCOUNT

As of September 30, 2015 Group employees totaled 178,045 people. Offshore leverage, with over 96,000 employees in the Global Production Center network, stands at 54% of the total workforce.

BOOKINGS

New orders recorded in Q3 2015 amounted to €2,499 million. This represents a 20% increase at constant exchange rates compared to the level recorded in the same period of 2014.

2015 OUTLOOK

Thanks to the strong performance in Q3, the Group confirms its financial objectives for 2015. The group forecasts 2015 revenue growth of 12%, at current Group structure and exchange rates, and an operating margin rate of 10.3%. Organic free cash flow is expected to exceed €600 million.

HIGHLIGHTS

• Completion of the acquisition of the US company IGATE on July 1, 2015
• Increase in the Group’s majority stake, to above 70%, in its Brazilian subsidiary CPM Braxis, in line with its strategy to strengthen its presence in emerging countries 
• 5 year Infrastructure Services contract with Nationwide building society in the UK

Innovation & Digital:

• Launch of the new global offering “Cloud Choice” services; Microsoft is the first cloud service provider to partner in this program
• Opening of two new “Innovation Labs” in Munich and Mumbai after those of Paris, London, Utrecht, Melbourne, Toulouse and Lille
• Signing of a 5 years Insights and Data deal (based on SAP HANA^® platform and SAP^® Data Services ™ software) with German insurer Munich Re
• Partnership with the Dutch energy company Eneco focused on digital transformation.

About Capgemini

With 180,000 people in over 40 countries, Capgemini is one of the world’s foremost providers of consulting, technology and outsourcing services. The Group reported 2014 global revenues of EUR 10.573 billion. Together with its clients, Capgemini creates and delivers business, technology and digital solutions that fit their needs, enabling them to achieve innovation and competitiveness. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business Experience^TM, and draws on Rightshore^®, its worldwide delivery model.

Appendix

Revenue by business

	Organic variation Q3’15 / Q3’14	% of revenues
	Q3’14	Q3’15
Consulting Services	+6.7%	4%	4%
Local Professional Services (Sogeti)	+1.4%	14%	14%
Application Services	+8.2%	55%	60%
Other Managed Services	-13.7%	27%	22%
TOTAL	+1.5%	100%	100%

Revenue by geographic area

								Current	Organic
in M€	Q1’14	Q2’14	Q3’14	Q4’14	Q1’15	Q2’15	Q3’15	Q3’15 vs. Q3’14
North America	495	540	572	623	662	737	937	+63.8%	+5.2%
UK & Ireland	539	542	540	576	504	523	551	+2.1%	-11.0%
France	556	587	560	638	620	595	574	+2.5%	+2.0%
Benelux	265	264	256	289	267	264	259	+1.1%	+0.6%
Rest of Europe	466	458	425	500	471	493	478	+12.5%	+10.4%
APAC & LATAM	182	210	238	251	240	232	237	-0.4%	+3.7%
TOTAL	2,503	2,601	2,591	2,877	2,764	2,844	3,036	+17.2%	+1.5%

Year-to-date revenue by geographic area

	in M€	Current	Organic
	9 Months 2014	9 Months 2015	9 Months 2015 vs. 2014
North America	1,607	2,337	+45.4%	+9.1%
UK & Ireland	1,621	1,577	-2.7%	-14.0%
France	1,703	1,789	+5.0%	+0.6%
Benelux	785	790	+0.6%	+0.5%
Rest of Europe	1,348	1,442	+7.0%	+7.2%
APAC & LATAM	631	709	+12.4%	+10.7%
TOTAL	7,695	8,644	+12.3%	+1.4%

Utilization rates

	Q1’14	Q2’14	Q3’14	Q4’14	Q1’15	Q2’15	Q3’15
Consulting Services	65%	69%	64%	70%	71%	72%	68%
Local Professional Services	81%	82%	82%	82%	81%	82%	84%
Application Services	81%	82%	82%	82%	82%	84%	85%

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