Paris – The Board of Directors of Cap Gemini S.A., the parent company of the Capgemini Group, chaired by Paul Hermelin, convened in Paris on February 15, 2017 to review and authorize the issue of the accounts1 of Capgemini Group for the year ended December 31, 2016.

For Paul Hermelin, Chairman and Chief Executive Officer of Capgemini Group: “Capgemini’s strong performance in 2016, and particularly its organic free cash flow generation, attests the success of the transformations carried out in recent years. With more than 193,000 employees worldwide, the Group has the assets to continue on a successful path among industry leaders: a rich portfolio of innovative offerings in which it continues to invest, sector expertise and leading global production capabilities.

2016 confirmed the rapid development of Capgemini in innovation-driven market segments and its position as a partner of choice for the digital transformation of companies. We launched a “Digital Manufacturing” end-to-end service offering to accompany enterprises in the era of Industry 4.0. Our Digital and Cloud offerings contribute 30% of our revenues.

The successful integration of IGATE delivered higher synergies than expected and contributed to the further improvement in the operating margin in 2016. The combined Group portfolio of offerings – particularly in platforms – are a great success with clients and former IGATE top accounts show sustained growth.

In North America, where we generate 30% of our revenues, we announce two acquisitions that will enable us to accelerate the transition of our services portfolio in this region: Idean, a digital design firm based in Palo Alto, will boost our digital transformation consulting offering while TCube Solutions, specialized in Duck Creek Technologies insurance software, will strengthen our Financial services business.

Finally, in light of its annual objectives, the Group is targeting in 2017, the year of Capgemini’s 50th anniversary, a Normalized EPS* of around €6.10 per share2.”

 

2016 KEY FIGURES

(In millions of euros)

2015

2016

Change

Revenues

11,915

12,539

+5.2%

Operating margin*

1,262

1,440

+14%

as a % of revenues

10.6%

11.5%

+90bp

Operating profit

1,022

1,148

+12%

as a % of revenues

8.6%

9.2%

+60bp

Net profit (Group share)

1,124

921

-18%

Basic earnings per share (€)

6.67

5.44

-18%

Normalized earnings per share (€)*

4.84

5.62

+16%

Net cash and cash equivalents / (Net debt)

(1,767)

(1,413)

 

Organic free cash flow*

815

1 071

+31%

The Group generated revenues of €12,539 million in 2016, up 5.2% compared with 2015. Growth is 7.9% at constant exchange rates, in line with the 2016 guidance. Growth at constant Group scope and exchange rates stands at 2.6%; the difference arises mainly from the consolidation of IGATE’s 12-month revenues in 2016 compared with 6 months in 2015. Q4 growth was 1.9% at constant exchange rates.

Digital and Cloud revenues continued to expand rapidly with a growth of 29% at constant exchange rates in 2016, accounting for 30% of Capgemini revenues.

Bookings totaled €13,027 million during the year, compared with €11,538 million in 2015, with a book-to-bill ratio of 1.04. Book-to-bill for Q4 was 1.19.

Operating margin amounted to €1,440 million, or 11.5% of revenues, up 14% year-on-year. This 90 basis point improvement in profitability reflects the improvement in gross margin generated by the investments made in the innovation and industrialization of the Group’s operations. The 2016 operating margin is at the top end of the target range raised during the publication of the half-year results in July 2016.

Other operating income and expenses total €292 million. The increase compared to the €240 million recorded in 2015 is mainly due to expenses related to the acquisition and integration of IGATE, while restructuring costs at €103 million are in line with the envelope set for the year.

2016 operating profit increased to 9.2% of revenues or €1,148 million, compared with 8.6% in 2015.

The net financial expense is €146 million, up from €118 million in 2015, mainly due to the recognition of 12 months of interest on the debt raised in July 2015.

The Group recorded a tax expense of € 94 million, compared to a €203 million tax income in 2015. These amounts include a tax income of €476 million in 2015 following the reassessment of deferred tax assets on US tax loss carry-forwards and a tax income (net) of €180 million in 2016 related to goodwill arising from legal reorganizations. Adjusted for these non-recurring non-cash items, the effective tax rate is 27.3% in 2016 and 30.1% in 2015.

Net profit (Group share) is €921 million for 2016, compared with €1,124 million for 2015 and 2016 basic EPS (earnings per share) is €5.44. Prior to the recognition of the one-off tax profits, Normalized EPS increased 16% year-on-year to €5.62.

The Group generated an organic free cash-flow of €1,071 million, up 31% on 2015. In 2016, Capgemini paid a dividend of €229 million and devoted €340 million to the share buyback program.

The Board of Directors has decided to recommend the payment of a dividend of €1.55 per share in 2017 at the next Shareholders’ Meeting on May 10, 2017, up 20 cents year-on-year. The corresponding payout ratio is 35.9% of the Net profit (Group share) adjusted for the above mentioned non-recurring non-cash tax income.

  • Revenues of €12,539 million
  • Growth of +7.9% at constant exchange rates and +5.2% at current exchange rates
  • 30% of revenues in Digital and Cloud
  • Operating margin rate of 11.5%, up 90 basis points
  • Basic EPS of €5.44 and Normalized EPS of €5.62
  • 31% increase in organic free cash flow to €1,071 million