Capgemini Se · EURONEXT:CAP
Capgemini — Capgemini Se Ord — H1 2023 Earnings Presentation
39 slides from Capgemini's earnings presentation, Jul 28, 2023
Slide 1: H1 2023 Results
H1 2023 RESULTS JULY 28, 2023 Capgomini@
Slide 2: Disclaimer
DISCLAIMER This presentation 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 developme
Slide 3: Aiman Ezzat, Chief Executive Officer
Aiman EZZAT Chief Executive Officer
Slide 4: Capgemini reports strong half-year performance
CAPGEMINI REPORTS STRONG HALF-YEAR PERFORMANCE REVENUES BOOK-TO-BILL OPERATING MARGIN +7.9% cc YoY 1.05 12.4% € 11,426m 1.07 Q2 +0.2pts YoY NORMALIZED EPS ORGANIC FCF € 5.80 - € 53m +15% YoY H1 2023 Results | July 28, 2023 All numbers are H1 except stated otherwise © Capgemini 2023. All rights reser
Slide 5: With strong resilience in a more challenging environment
WITH STRONG RESILIENCE IN A MORE CHALLENGING ENVIRONMENT BUSINESSES SECTORS UK & Ireland North America +12% Strategy & Transformation Manufacturing +3% France Q2: +10% +12% +14% Q2: +0% +9% Rest of Europe Applications & Q2 : +6% Public Sector +11% Technology Asia Pacific & Latin America +8% +11% Q2
Slide 6: Ramping up significant investment in generative AI
RAMPING UP SIGNIFICANT INVESTMENT IN GENERATIVE AI DRIVING NEW BUSINESS ACCELERATING GENERATIVE AI READY TO DELIVER DATA & AI OUTCOMES THROUGH ADOPTION PROJECTS AT SCALE INDUSTRY SOLUTIONS GenAI Lab Hundreds of projects Pipeline with over 150 in strategy working with our clients to explore & transfo
Slide 7: 2023 Outlook
2023 OUTLOOK REVENUE GROWTH OPERATING MARGIN ORGANIC FCF +4.0% 13.0% around to +7.0% to 13.2% € 1.8 bn at constant exchange rates Inorganic contribution around 0.5 points at the lower end of the target range and 1.0 point at the upper end H1 2023 Results | July 28, 2023 © Capgemini 2023. All rights
Slide 8: Olivier Sevillia, Chief Operating Officer
Olivier SEVILLIA Chief Operating Officer
Slide 9: Q2 & H1 2023 Revenues by Sector
Q2 & H1 2023 REVENUES BY SECTOR Q2 2023 H1 2023 Services Energy Year-on-Year Year-on-Year & Utilities Constant Constant Manufacturing Currency Currency 5% Telco, Media 8% Financial Services +2.9% +6.0% & Technology 27% Energy & Utilities +4.4% +5.1% 11% Manufacturing +11.2% +13.9% H1 Consumer Goods
Slide 10: Bookings Evolution
BOOKINGS EVOLUTION ▐ in EUR billion (at reported rates) QUARTERS HALF-YEAR 6.7 12.0 12.0 11.6 6.1 6.1 5.7 5.9 5.5 5.4 10.0 4.9 9.1 4.6 4.2 7.8 8.0 7.1 6.0 4.0 2.0 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 H1 2019 H1 2020 H1 2021 H1 2022 H1 2023 Bookings (€b) 4.2 4.9 4.6 5.7 5.5 6.1 5.4 6.7 5.9 6.1 Bookings
Slide 11: High value-added transformation solutions that match our client needs
HIGH VALUE-ADDED TRANSFORMATION SOLUTIONS THAT MATCH OUR CLIENT NEEDS CLOUD DATA & AI GLOBAL US DEFENSE TIER-1 TELCO INTELLIGENT MEDICAL DEVICES MANUFACTURER OEM INDUSTRY Smart Infrastructure for Innovative R&D Digital Plant 5G Software Transformation Data for Electricity Distribution Center set-up
Slide 12: Carole Ferrand, Chief Financial Officer
Carole FERRAND Chief Financial Officer
Slide 13: Financial Overview
FINANCIAL OVERVIEW Constant ▐ in EUR millions H1 2022 H1 2023 Variation Currency Growth Revenues 10,688 11,426 +6.9% +7.9% Operating expenses -9,387 -10,013 Operating margin 1,301 1,413 +9% (in % of revenues) 12.2% 12.4% +0.2pts Other operating income and expenses -233 -262 Operating profit 1,068 1,
Slide 14: Quarterly Revenue Growth
QUARTERLY REVENUE GROWTH ▐ Revenues in EUR millions Constant currency growth 5,521 5,553 5,754 5,729 5,697 Q2: +5.2% YoY 5,167 H1: +7.9% YoY Q1 2023 Q2 2023 H1 2023 Year-on-Year Organic +10.1% + 4.7% + 7.3% Group scope +0.6pts +0.5pts +0.6pts Constant Currency +10.7% + 5.2% + 7.9% Currencies +0.2pts
Slide 15: Q2 & H1 2023 Revenues by Region
Q2 & H1 2023 REVENUES BY REGION Q2 2023 H1 2022 H1 2023 Variation APAC & LATAM Year-on-Year Revenues Year-on-Year UK & Rest of Europe Ireland 9% Constant Constant (in €m) (in €m) Reported Currency Currency 12% 30% North America +0.0% 3,170 3,288 +3.7% +3.0% UK & Ireland +10.2% 1,287 1,386 +7.7% +12.
Slide 16: Q2 & H1 2023 Revenues by Business
Q2 & H1 2023 REVENUES BY BUSINESS Strategy & Total Revenues Transformation Operations & Engineering 8% Q2 2023 H1 2023 Year-on-Year Year-on-Year 29% Constant Constant Currency Currency H1 Strategy & Transformation +9.1% +12.2% 2023 Applications & Technology +5.6% +8.1% Operations & Engineering +3.2%
Slide 17: Headcount Evolution
HEADCOUNT EVOLUTION Headcount Evolution Attrition -1% -6,700 +4,100 June 2022 June 2023 Attrition Variation LTM LTM Strategy & Transformation 22.8% 18.2% -4.6pts 352,100 349,500 Applications & Technology 27.5% 19.5% -8.0pts Operations & Engineering 26.7% 23.3% -3.4pts TOTAL 27.0% 20.9% -6.1pts Workf
Slide 18: Operating Margin by Regions
OPERATING MARGIN BY REGIONS H1 2022 H1 2023 Operating Operating Revenues Revenues Margin Margin (in €m) (in €m) (%) (in €m) (in €m) (%) North America 3,170 490 15.5% 3,288 500 15.2% UK & Ireland 1,287 237 18.4% 1,386 255 18.4% France 2,113 226 10.7% 2,308 257 11.1% Rest of Europe 3,161 311 9.8% 3,47
Slide 19: Operating Margin Analysis
OPERATING MARGIN ANALYSIS ▐ in EUR millions H1 2022 H1 2023 Revenues 10,688 11,426 Cost of services rendered -7,895 -8,438 in % of revenues -73.8% -73.8% Gross margin 2,793 2,988 in % of revenues 26.2% 26.2% Selling expenses -727 -803 in % of revenues -6.8% -7.0% General & Administrative expenses -7
Slide 20: Net Financial Expense and Income Tax
NET FINANCIAL EXPENSE AND INCOME TAX ▐ in EUR millions H1 2022 H1 2023 Interest on bonds -64 -63 Other interest income and expense 18 73 Net interest expense -46 10 Other financial income & expenses -25 -32 Net financial expense -71 -22 ▐ in EUR millions H1 2022 H1 2023 Income tax -327 -313 Effectiv
Slide 21: Net Profit Analysis
NET PROFIT ANALYSIS ▐ in EUR millions H1 2022 H1 2023 Operating margin 1,301 1,413 Other operating income and expenses -233 -262 of which _Restructuring costs -24 -68 _Amortization of intangible assets acquired through business combinations -68 -63 _ Acquisition and integration costs -43 -29 _Expens
Slide 22: Organic Free Cash Flow Generation
ORGANIC FREE CASH FLOW GENERATION ▐ in EUR millions 1,873 1,852 Net debt 1,288 1,071 1,080 1,160 1,119 €3.2bn as at June 30, 2023 815 vs. €2.6bn as at Dec 31, 2022 429 64 31 11 106 193 90 -86 -53 H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 202
Slide 23: Q&A
Q&A Aiman EZZAT Olivier SEVILLIA Carole FERRAND Chief Executive Officer Chief Operating Officer Chief Financial Officer
Slide 24: Appendix
APPENDIX Papaomini@
Slide 25: Alternate Performance Measures
ALTERNATE PERFORMANCE MEASURES ▐ Organic growth, or like-for-like growth, in revenues is the growth rate calculated at constant Group scope and exchange rates. The Group scope and exchange rates used are those for the published period. Exchange rates for the published period are also used to calcula
Slide 26: Net Cash Evolution
NET CASH EVOLUTION ▐ in EUR millions Operating Amortization Lease debt Working Net Organic Returns to Tax paid Capex net Others margin & Provisions repayment capital Interests FCF shareholders M&A Others FX 0 NET DEBT +293 -148 12/2022 -187 -2,566 NET DEBT 06/2023 -3,244 -1,227 +1,413 -24 -125 -48 -
Slide 27: Net Cash Evolution
NET CASH EVOLUTION ▐ in EUR millions H1 2022 H1 2023 Profit for the period 668 812 Depreciation, amortization and impairment of fixed assets and right-of-use 356 345 Change in provisions -18 -20 Losses on disposals of assets and others 13 17 Net finance costs 46 -10 Income tax expense / (income) 327
Slide 28: Bookings Evolution
BOOKINGS EVOLUTION ▐ in EUR million (at reported rates) 6,685 6,134 6,101 5,867 5,473 5,427 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 ▐ Constant currency growth YOY (in %) +26.5% +18.8% +12.5% +11.4% +6.5% +1.2% H1 2023 Results | July 28, 2023 © Capgemini 2023. All rights reserved | 28
Slide 29: Revenue Quarterly Evolution
REVENUE QUARTERLY EVOLUTION Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Revenues (in €m) 5,167 5,521 5,553 5,754 5,729 5,697 Year-on-Year organic growth +16.3% +18.1% +14.3% +12.8% +10.1% +4.7% Year-on-Year CC growth +17.7% +19.3% +15.7% +14.0% +10.7% +5.2% Year-on-Year CC growth by Region North
Slide 30: Q2 2023 Revenues by Regions
Q2 2023 REVENUES BY REGIONS APAC & LATAM Q2 2022 Q2 2023 Variation Revenues Year-on-Year Rest of Europe UK & 9% Constant Ireland (in €m) (in €m) Reported Currency 12% 30% North America 1,661 1,625 -2.2% +0.0% UK & Ireland 652 700 +7.4% +10.2% Q2 France 1,078 1,145 +6.1% +6.2% 2023 20% Rest of Europe
Slide 31: 2023 Revenue Mix by Sector / Business
2023 REVENUE MIX BY SECTOR / BUSINESS Revenues By Sector Revenues By Business (in % of Group Revenues) (in % of Total Revenues) Services Energy Strategy & & Utilities Transformation 5% Operations & Manufacturing Engineering 8% 8% Telco, Media 27% 29% & Technology 11% Q2 Q2 2023 2023 13% 22% 63% onsu
Slide 32: Operating Margin – Analysis by Type of Costs
ERATING MARGIN – ANALYSIS BY TYPE OF COSTS ▐ in EUR millions H1 2022 H1 2023 Revenues 10,688 11,426 Personnel costs -7,420 -7,969 in % of revenues -69.4% -69.7% Purchases and subcontracting expenses -1,444 -1,446 in % of revenues -13.5% -12.7% Travel expenses -109 -161 in % of revenues -1.0% -1.4% R
Slide 33: Offshore Leverage Evolution
FSHORE LEVERAGE EVOLUTION 56% 57% 58% 57% 58% 58.5% 58% 54% 54% 47% 44% 40% 35% 37% 31% 28% 24% 13% Dec. 06 Dec. 07 Dec. 08 Dec. 09 Dec. 10 Dec. 11 Dec. 12 Dec. 13 Dec. 14 Dec. 15 Dec. 16 Dec. 17 Dec. 18 Dec. 19 Dec. 20 Dec. 21 Dec. 22 Jun. 23
Slide 34: Utilization Rates Evolution
LIZATION RATES EVOLUTION Strategy & Transformation Applications & Technology * 78% 78% 78% 78% 78% 79% 69% 68% 69% 68% 66% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 * 2022 restated for comparison purposes
Slide 35: Balance Sheet
LANCE SHEET ASSETS EQUITY & LIABILITIES June 30, Dec. 31, June 30, June 30, Dec. 31, June 30, EUR millions 2022 2022 2023 ▐ in EUR millions 2022 2022 2023 Equity (1) 8,938 9,727 10,063 Non-controlling interests 15 16 17 Total equity 8,953 9,743 10,080 dwill 11,087 11,090 10,955 Long-term borrowings
Slide 36: Cash Flow Statement
SH FLOW ATEMENT ▐ in EUR millions H1 2022 H1 2023 Profit for the period attributable to owners of the Company 668 812 Depreciation, amortization and impairment of fixed assets and Lease right-of-use assets 356 345 Change in provisions -18 -20 Losses on disposals of assets and other 13 17 Expenses re
Slide 37: Comprehensive Income & Change in Equity
MPREHENSIVE INCOME & CHANGE IN EQUITY ▐ in EUR millions H1 2022 H1 2023 Actuarial gains and losses on defined benefit pension plans, net of tax (1) 247 -5 Remeasurement of hedging derivatives and net investment, net of tax (2) -18 89 Translation adjustments (2) 423 -102 OTHER ITEMS OF COMPREHENSIVE
Slide 38: Bond Debt Maturity Profile
ND DEBT MATURITY PROFILE EUR millions 1,200 1,000 1,000 , redeemed t maturity on 800 800 800 uly 3, 2023) 600 500 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 (Jul.) (Oct.) (June) (Apr.) (Apr.) (Apr.) (June) (Apr.) Notes issued prior to 2020 Notes issued in April 2020 Notes issued in June 2020
Slide 39: About Capgemini and Investor Relations contacts
t Capgemini Biraud, Vincent Massoni, Patrick Head of Investor Relations Senior Manager, Investor Relations ni is a global leader in partnering with companies to transform and manage their by harnessing the power of technology. The Group is guided everyday by its purpose of +33 1 4754 5087 +33 1 4754