2014 KEY FIGURES
|In million of euros||2013||2014||% growth|
|Operating margin ||857||970||+13.2%|
|as a % of revenues||8.5%||9.2%||+70bp|
|as a % of revenues||7.1%||8.1%||+100bp|
|Net profit (Group share)||442||580||+31%|
|as a % of revenues||4.4%||5.5%||+110bp|
|Net cash and cash equivalents||678||1,218|
|Organic Free Cash Flow ||455||668|
The Group generated revenues of €10,573 million in 2014, up 3.4% like-for-like compared with 2013 (i.e. at constant Group structure and exchange rates). Adjusted for currency impacts and the acquisition of the French company, Euriware, revenues rose 4.8% on 2013 published figures. Organic growth reached 5.5% in Q4.
New orders recorded during the year totaled €10,978 million, an increase of 13% on 2013 on a like-for-like basis.
The 2014 operating margin rate is 9.2%, up 0.7 points on 2013, above the target of 0.3 to 0.5 points announced at the beginning of 2014. It even reached 10.4% in the second half of 2014. With stable restructuring costs (€68 million), the Group is able to report an operating profit of €853 million, thereby bringing the operating profit rate to 8.1%, compared with 7.1% in 2013.
The net financial expense is €70 million (€102 million in 2013). The income tax expense is €210 million compared with €182 million in 2013.
On this basis, net profit (Group share) of the Company is €580 million for 2014, up 31% year-on-year.
The Group generated organic free cash flow of €668 million compared to €455 million in 2013 (before the exceptional contribution to a United Kingdom pension fund).
The Board of Directors has decided to recommend the payment of a dividend of €1.20 per share in 2015 at the next Ordinary Shareholders’ Meeting, compared to €1.10 in 2014. In addition, the Board of Directors authorized the launch of a first tranche of share buyback of up to 100 million euros.
OPERATIONS BY BUSINESS
Local professional services (Sogeti) (14.9% of Group revenues) reported growth of 1.1% in revenues over 2014 on a like-for-like basis, in spite of a slight downturn in France, growth was prevalent in all other regions, particularly in North America. The operating margin rate is 9.9% compared with 10.6% in 2013. This slight decrease is due to the integration of part of Euriware activities and the weakness in demand in aerospace.
Application services (55.4% of Group revenues) reported revenue growth of 3.8% on a like-for-like basis in 2014. Growth was partly driven by innovation offerings particularly in SMAC (Social, Mobile, Analytics and Cloud) but also application maintenance. North America, the United Kingdom and the Asia-Pacific and Latin American region contributed substantially to this growth. The operating margin rate is 10.6%, up 0.9 points on 2013.
Other managed services (25.5% of Group revenues) reported a like-for-like increase in revenues of 5.3% in 2014 thanks to the growth of BPO (Business Process Outsourcing) and Infrastructure Services. North America and Benelux enjoyed double digit growth rates. The operating margin rate is 8.8%, representing a 1.7 point improvement on last year, partly due to the profitability improvement in Infrastructure Services.
OPERATIONS BY MAJOR REGION
The United Kingdom and Ireland reported revenues up 4.1% like-for-like for 2014 (and 9.7% including relative fluctuations in currencies). Growth was primarily driven by application services, notably in the private sector, and by other managed services which benefited from the delay in the scheduled decrease in revenues on a major contract. On this basis, the operating margin rate is 11.3%, up 2.6 points on 2013.
France reported revenues up 0.5% over the year (and 6.9% including the consolidation of Euriware), demonstrating slight growth despite a difficult economic environment. Local professional services (Sogeti) and application services slight contraction was offset by the return to growth of consulting services and the good performance of other managed services. The 2014 operating margin rate is 8.4% of revenues (9.3% of revenues in 2013).
Benelux is on its way to stabilization with a slight fall of revenues of 0.6% for the full year. Revenues generated by the other managed services business increased significantly (16.6%), while the local professional services business (Sogeti) remained stable. The other businesses progressively improved throughout the period. The operating margin rate is 10.5% of revenues, up 0.7 points on 2013.
The “Rest of Europe” grew 2.3% on a like-for-like basis (0.5% on published figures). Activity was strong in the Nordic countries, Italy and Portugal. It remained stable in Central Europe and contracted in Spain, with nonetheless an upturn in the second half of the year. The operating margin rate was 8.6%, up 0.9 points on 2013.
Finally, the Asia-Pacific and Latin America region reported a growth of 5.0% on a like-for-like basis (and contracted 2.5% based on published figures due to currency fluctuations). In Asia-Pacific, growth was close to 11% (like-for-like) and remains driven by the development of financial services and the local Indian market. In Latin America, activity was stable on a like-for-like basis, with as planned a return to double-digit growth in the fourth quarter. The operating margin is 6.1% of revenues, up 1.2 points on 2013.