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Capgemini: growth momentum confirmed in Q3 2015

29 Oct 2015

In millions of euros

td>

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 1st 2015. The performance of IGATE is in line with expectations and its integration is on schedule.

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.

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

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 ExperienceTM, and draws on Rightshore®, its worldwide delivery model.

Appendix

Revenue by business

 Organic variation
Q3’15 / Q3’14
% of revenues
 Q3’14Q3’15
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

        CurrentOrganic
 in M€Q1’14Q2’14Q3’14Q4’14Q1’15Q2’15Q3’15Q3’15 vs. Q3’14
North America495540572623662737937+63.8%+5.2%
UK & Ireland539542540576504523551+2.1%-11.0%
France556587560638620595574+2.5%+2.0%
Benelux265264256289267264259+1.1%+0.6%
Rest of Europe466458425500471493478+12.5%+10.4%
APAC & LATAM182210238251240232237-0.4%+3.7%
TOTAL2,5032,6012,5912,8772,7642,8443,036+17.2%+1.5%

Year-to-date revenue by geographic area

 in M€CurrentOrganic
 9 Months 20149 Months 20159 Months
2015 vs. 2014
North America1,6072,337+45.4%+9.1%
UK & Ireland1,6211,577-2.7%-14.0%
France1,7031,789+5.0%+0.6%
Benelux785790+0.6%+0.5%
Rest of Europe1,3481,442+7.0%+7.2%
APAC & LATAM631709+12.4%+10.7%
TOTAL7,6958,644+12.3%+1.4%

Utilization rates

 Q1’14Q2’14Q3’14Q4’14Q1’15Q2’15Q3’15
Consulting Services65%69%64%70%71%72%68%
Local Professional Services81%82%82%82%81%82%84%
Application Services81%82%82%82%82%84%85%

DISCLAIMER This press release may contain forward-looking statements. Such statements may include projections, estimates, assumptions, statements regarding plans, objectives, intentions and/or expectations with respect to future financial results, events, operations and services and product development, as well as statements, regarding future performance or events. Forward-looking statements are generally identified by the words “expects”, “anticipates”, “believes”, “intends”, “estimates”, “plans”, “projects”, “may”, “would” “should” or the negatives of these terms and similar expressions.  Although Cap Gemini’s management currently believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking statements are subject to various risks and uncertainties (including without limitation risks identified in Cap Gemini’s Registration Document available on Cap Gemini’s website), because they relate to future events and depend on future circumstances that may or may not occur and may be different from those anticipated, many of which are difficult to predict and generally beyond the control of Cap Gemini. Actual results and developments may differ materially from those expressed in, implied by or projected by forward-looking statements. Forward-looking statements are not intended to and do not give any assurances or comfort as to future events or results. Other than as required by applicable law, Cap Gemini does not undertake any obligation to update or revise any forward-looking statement. This press release does not contain or constitute an offer of securities for sale or an invitation or inducement to invest in securities in France, the United States or any other jurisdiction.   Rightshore® is a trademark belonging to Capgemini