Capgemini Se · EURONEXT:CAP
Capgemini — FY2014 Earnings Presentation
42 slides from Capgemini's earnings presentation, Feb 19, 2015
Slide 1: 2014 Full Year Results
2014 Full Year Results Paris, February 19, 2015
Slide 2: Disclaimer
Disclaimer This presentation 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. This presentation contains forward-looking statements. Forward-looking statements are statements
Slide 3: Paul Hermelin
Paul Hermelin Copyright © Capgemini 2015. All Rights Reserved 3
Slide 4: Robust progression in 2014, finishing on a high note
Robust progression in 2014, finishing on a high note €10,573M Revenues, +3.4% organic growth +5.5 % in Q4 YoY Bookings growth +13% With remarkable success rate on larger deals 9.2% Operating Margin, +70 bps 10.4 % in H2 Total Headcount 143,600, YE 2014 Offshore headcount +17% €580M Net Profit (Group
Slide 5: Results since 2010 confirm our Champions' League status
Results since 2010 confirm our Champions’ League status + 22 % + 220 bps €10,573M 9.2% €8,697M Revenues €9,693M €10,264 €10,092M 8.1% 8.5% 7.0%(*) Margin 7.7% 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 (*) 2010 not restated with IAS 19 + 107% +86% Free cash-flow €580M €668M Net profit €394M €
Slide 6: Moving innovation into high gear
Moving innovation into high gear For our CLIENTS A trusted advisor able to accompany clients in their 1 transformation journey Capable to attract companies with flagship position on innovation in their own sector, opening new markets for us Innovation, a mandate For our PARTNERS to be at the 2 Strat
Slide 7: Innovation across our value chain
Innovation across our value chain What we sell How we sell Launching SMAC new offerings “Expert Connect” to engage via social media Accelerating Digital transformation consulting 30 Innovation Labs showcasing latest Developing IP-based solutions technologies and solutions Revamping existing offers w
Slide 8: Innovation in all our offers portfolio
Innovation in all our offers portfolio Innovation across Innovation with new Co-innovation with all disciplines offers our partners Digital transformation led by Cybersecurity Capgemini Consulting, 2,500 professionals leveraging synergies with 5 Security Operations Centers the Group and with partner
Slide 9: 2015 guidance
2015 guidance Current revenue growth 3% to 5% Operating margin between 9.5% and 9.8% > €600M organic free cash flow 2014 Full Year Results - Paris, February 19, 2015 Copyright © Capgemini 2015. All Rights Reserved 9
Slide 10: Paul Nannetti
Paul Nannetti Copyright © Capgemini 2015. All Rights Reserved 10
Slide 11: Strong sales year in 2014 – 13% bookings growth
Strong sales year in 2014 – 13% bookings growth, including 14% in Q4 Bookings evolution Highlights 3.4 Book to Bill 1.04 for year and 1.17 in Q4 3.3 2.7 2.9 Larger Deal (TCV > €20M) Win Rate over 50% - 2.1 2.3 underlining offering competitiveness 2.0 2.0 Strong progress in Strategic Offers (+18%) Ac
Slide 12: Revenue growth – by Sector
Revenue growth – by Sector Sector Revenues Others YoY Growth Telecom, Media Public Sector & Entertainment Sector Q4'14/ FY Q4'13 Energy, Utilities 5% & Chemicals 8% 22% Financial Services 9,2% 5,0% 12% Energy, Utilities & Chemicals 8,5% 10,8% Manufacturing, Automotive & Life Sciences -0,5% -1,6% 15%
Slide 13: Major Deals in 2014
Major Deals in 2014 Q4, renewal UK Multi towers Public Services Q4, renewal Infrastructure European Q4 renewal Services Insurance Renewal Renewal BPO Q4 European NA Media Postal & Entertainment Application Services Services Q4 NA Financial Global NA Telco Renewal Professional Services org Michelin S
Slide 14: Rapid alignment of our business to changing demand trends
Rapid alignment of our business to changing demand trends is driving our progress Customer Capgemini response Results expectations Large deals CV (>€50m) Cost NextGen AM, NextGen IM, Industrialized 2 500 competitiveness BPO, Managed Testing Services 2 000 and sourcing 1 500 flexibility Outcome based
Slide 15: Aiman Ezzat
Aiman Ezzat Copyright © Capgemini 2015. All Rights Reserved 15
Slide 16: Financial Overview
Financial Overview FY 2014 vs. in M€ FY 2013 FY 2014 FY 2013 Revenues 10 092 10 573 4.8% organic growth Operating expenses -9 235 -9 603 +3.4% Operating margin 857 970 (% Revenues) 8.5% 9.2% 0.7pt Other operating income and expenses -137 -117 Operating profit 720 853 (% Revenues) 7.1% 8.1% 1.0pt Net
Slide 17: Organic Free Cash Flow Generation
Organic Free Cash Flow Generation in M€ 668 496 455 (1) 359 164 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Net cash end 2014 = € 1 218 M (1) Before the €235M exceptional contribution to a UK pension fund 2014 Full Year Results - Paris, February 19, 2015 Copyright © Capgemini 2015. All Rights Reserved 1
Slide 18: Revenue Quarterly Evolution
Revenue Quarterly Evolution Organic growth YoY 5.5% 3.9% 3.0% 2.8% 2.3% 1.6% Q1 2014 Q2 2014 Q3 2014 Q4 2014 FY 2014 in M€ published 2 503 2 601 2 591 2 877 10 573 -0.4% -1.7% Sequential current -4.0% 3.9% -0.4% 11.1% growth Sequential organic -3.6% 1.9% -2.5% 10.0% growth Q1 2013 Q2 2013 Q3 2013 Q4
Slide 19: Q4 & FY 2014 Revenues by Main Geography
Q4 & FY 2014 Revenues by Main Geography APAC & LATAM France Benelux 8% 10% 22% 18% Rest of 21% Europe UK & Ireland 21% North America Year-on-Year Organic Current Current Organic in M€ Q4 14 / Q4 13 FY 2013 FY 2014 FY 14 / FY 13 FY 14 / FY 13 North America 10.3% 2 074 2 230 7.5% 8.5% UK & Ireland 5.9
Slide 20: FY 2014 Revenues by Business
FY 2014 Revenues by Business Consulting Services Local Professional Services 4% 15% Application Services 55% 26% Other Managed Services Organic Year-on-Year Q4 14 / Q4 13 FY 14 / FY 13 Consulting Services -1.1% -3.4% Local Professional Services 3.3% 1.1% Application Services 5.0% 3.8% Other Managed
Slide 21: Headcount Evolution
Headcount Evolution December 2013 to December 2014 145 000 +2 477 140 000 +9 736 135 000 +9.3% Offshore Headcount 143 643 Growth +17% YOY 130 000 131 430 125 000 120 000 Dec. 2013 Net Variation Off shore* Net Variation Onshore** Dec. 2014 Year-on-Year Attrition YTD Dec. 13 Dec. 14 variation Consulti
Slide 22: Offshore Leverage from 2006 to 2014
Offshore Leverage from 2006 to 2014 (Total Headcount) 47% 44% 40% 37% 35% 31% 28% 24% 13% Dec. 06 Dec. 07 Dec. 08 Dec. 09 Dec. 10 Dec. 11 Dec. 12 Dec. 13 Dec. 14 2014 Full Year Results - Paris, February 19, 2015 Copyright © Capgemini 2015. All Rights Reserved 22
Slide 23: Evolution of Remuneration Costs
Evolution of Remuneration Costs 2014 Average salary increase onshore : 3.1% 2014 Average salary increase offshore : 6.6% Pyramid effect onshore = -1.7% => average remuneration onshore = +1.4% At current rates & At constant rates & perimeter perimeter Group average remuneration costs evolution -3.1%
Slide 24: Operating Margin by Geography
Operating Margin by Geography FY 2013 FY 2014 Operating Operating in M€ Revenues % Revenues % margin Margin North America 2 074 255 12.3% 2 230 281 12.6% UK & Ireland 2 004 175 8.7% 2 197 249 11.3% France 2 190 204 9.3% 2 342 197 8.4% Benelux 1 080 105 9.8% 1 074 113 10.5% Rest of Europe 1 840 142 7
Slide 25: Operating Margin by Business
Operating Margin by Business FY 2013 FY 2014 Consulting Services 7.8% 8.2% Local Professional Services 10.6% 9.9% Application Services 9.7% 10.6% Other Managed Services 7.1% 8.8% Total Group 8.5% 9.2% 2014 Full Year Results - Paris, February 19, 2015 Copyright © Capgemini 2015. All Rights Reserved 2
Slide 26: Operating Margin Analysis by Destination
Operating Margin Analysis by Destination in M€ FY 2013 FY 2014 Revenues 10 092 10 573 Cost of services rendered -7 636 -7 960 % of Revenues -75.7% -75.3% Gross Margin 2 456 2 613 % of Revenues 24.3% 24.7% Selling Expenses -807 -855 % of Revenues -8.0% -8.1% General & Administrative Expenses -792 -78
Slide 27: Net Financial Expense and Income Tax
Net Financial Expense and Income Tax in M€ FY 2013 FY 2014 Interest on bonds -63 -36 Other interest expenses and income from cash 16 21 and cash equivalents Net interest expense -47 -15 Other financial income & expenses -55 -55 Net financial expense -102 -70(1) (1) The cash portion is €18M out of €7
Slide 28: Net Profit Analysis
Net Profit Analysis in M€ FY 2013 FY 2014 Operating margin 857 970 Other operating income and expenses -137 -117 of which Restructuring costs -68 -68 Amortization of intangible assets acquired through business combinations -30 -20 Operating profit 720 853 Net financial expense -102 -70 Income tax ex
Slide 29: Conclusion
Conclusion Priorities FY achievement Business model improvements: Portfolio, Gross margin up 40bps YoY Industrialization and Standardization OM up 70bps YoY FCF expansion: continuous cash discipline, low FY FCF improves €213M YoY restructuring and investment control Focus on successful integration o
Slide 30: 2015 Priorities
2015 Priorities Priorities FY achievement Industrialization program and globalization of Support the 10% OM shared services to support margin expansion trajectory Maintain cash discipline and investment control At least €600m FCF Active dilution management / €100m buy-back program Employee share-bas
Slide 31: Back Up
@® Capgemini CONSULTING.TECHNOLOGY.OUTSOURCING — People matter, results count.
Slide 32: Net Cash evolution
Net Cash evolution In M€ 97 196 135 5 142 119 126 60 62 970 1346 1218 678 CASH NET OF YTD Operating Amortization and Tax Other working Net interest CAPEX, net of Other Cash Net of Debt Dividends & Exchange rate diff. Debt increase & CASH NET OF DEBT - Opening margin Before CRA Provisions capital evo
Slide 33: Bookings Evolution
Bookings Evolution 3 450 3 299 2 905 2 670 2 251 2 134 1 978 2 029 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 2014 Full Year Results - Paris, February 19, 2015 Copyright © Capgemini 2015. All Rights Reserved 33
Slide 34: Q4 2014 Revenues by Main Geography
Q4 2014 Revenues by Main Geography APAC & LATAM Latam France Benelux 9% 22% 10% 17% Rest of Europe 22% North America 20% UK & Ireland Current Organic Current Sequential Year-on-Year Sequential Year-on-Year In M€ Q4 2013 Q3 2014 Q4 2014 Q4 14 / Q3 14 Q4 14 / Q4 13 Q4 14 / Q3 14 Q4 14 / Q4 13 North Am
Slide 35: Q4 2014 Revenue by Business
Q4 2014 Revenue by Business Consulting Local Services Professional Services 4% 15% Application Services 55% 27% Other Managed Services Organic Sequential Year-on-Year Q4 14 / Q3 14 Q4 14 / Q4 13 Consulting Services 15.6% -1.1% Local Professional Services 12.7% 3.3% Application Services 8.9% 5.0% Oth
Slide 36: H2 Revenue by Main Geography
H2 Revenue by Main Geography APAC & LATAM Latam Benelux France 9% 10% 22% 17% Rest of Europe 22% North America 20% UK & Ireland Current Organic Current Sequential Year-on-Year Sequential Year-on-Year In M€ H2 2013 H1 2014 H2 2014 H2 14 / H1 14 H2 14 / H2 13 H2 14 / H1 14 H2 14 / H2 13 North America
Slide 37: FY 2014 Revenues by Sector
FY 2014 Revenues by Sector Telecom, Media & Others Entertainment Public 5% Sector 8% Energy, Utilities 22% & Chemicals 12% Consumer Product, Retail, Distribution 15% and Transportation 22% Financial Services 17% Manufacturing, Automotive & Life Sc. Organic Year-on-Year FY 14 / FY 13 Q4 14 / Q4 13 Fi
Slide 38: Operating Margin Analysis
Operating Margin Analysis in M€ FY 2013 FY 2014 Revenues 10 092 10 573 Personnel costs -6 083 -6 301 % of Revenues -60.3% -59.6% Purchases and subcontracting expenses -2 159 -2 284 % of Revenues -21.4% -21.6% Travel expenses -428 -428 % of Revenues -4.2% -4.0% Rent, facilities and local taxes -329 -
Slide 39: Utilization Rates
Utilization Rates Consulting Services Local Professional Services 70% 83% 69% 69% 82% 67% 82% 82% 82% 82% 64% 65% 64% 81% 62% 80% Application Services 81% 82% 82% 81% 82% 82% 82% 80% Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 13 Q2 13 Q3 13 Q4
Slide 40: Net Cash Evolution
Net Cash Evolution In M€ FY 2013 FY 2014 Profit for the period 435 573 Depreciation, amortization and impairment of fixed assets 208 204 (1) Net charges to provisions -284 2 Gains and losses on disposals of assets 6 6 Net finance costs 47 15 Income tax expense 182 210 Other non-cash items 41 34 Cash
Slide 41: Balance Sheet
Balance Sheet In M€ Dec 31, Dec 31, Dec 31, Dec 31, ASSETS EQUITY & LIABILITIES 2013 2014 2013 2014 Goodwill 3 601 3 784 Equity* 4 458 5 057 Intangible assets 166 158 Non-controlling interests 33 26 Property, plant & equipment 494 515 Total equity 4 491 5 083 Deferred taxes 1 023 1 065 Long-term bor
Slide 42: Capgemini
@® Capgemini CONSULTING.TECHNOLOGY.OUTSOURCING - = People matter, results count.