Capgemini: growth momentum confirmed in Q3 2015

| Financial news
Paris – The Capgemini Group achieved revenues of €3,036 million in Q3 2015, up 17.2% at current Group structure and exchange rates compared to the same quarter in 2014. At constant Group structure and exchange rates, organic revenue growth was 1.5%.
For more information contact
  • Vincent Biraud

    Investor Relations
  • Christel Lerouge

    Press Relations
For Paul Hermelin, Chairman and CEO of Capgemini Group: "After the strong performance in H1, the Group continues on its momentum with a strong increase in revenues (+17.2%) and an organic growth of 1.5%. Customer demand was mainly driven by innovation, as evidenced by the 21% increase in revenues in SMAC. The Group has successfully launched its "Cloud Choice" offering during this quarter and multiplies new deals in Digital, imposing itself as one of the key partners in this field.
 
The integration of the US firm IGATE, whose acquisition was completed on July 1st, reinforces our status as a market leader with a strong presence in North America, where we now achieve 31% of our revenues, and a Global Production Center network with more than 96,000 employees. Furthermore, the combination of service offerings and capabilities of Capgemini and IGATE has already resulted in new business wins, notably in financial services and in consumer products and retail.
 
This good momentum and our bookings growth in the quarter lead us to confirm our guidance for 2015."
 

In millions of euros

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.

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

 

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

 

Q3'14

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%