Capgemini Press Release// Capgemini raises all its financial
targets for 2021 building on its strong growth momentum
Media
relations:Victoire GruxTel.: +33 6 04 52 16
55victoire.grux@capgemini.com
Investor relations:Vincent
BiraudTel.: +33 1 47 54 50 87vincent.biraud@capgemini.com
Capgemini
raises all its
financial targets for 2021
building on its strong growth momentum
-
Revenues of €8,711 million in H1
2021, up 14.9%
-
H1 constant currency growth of +17.9% and organic
growth* of +7.1%
-
Q2 constant currency growth of +12.4% and organic growth of
+12.9%
-
Operating margin rate* up 1.2
points to 12.0%
-
+42% increase in Net profit, Group share, with normalized
earnings per share* up
32%
-
Organic free cash flow1* up €323 million
to €429 million
-
Raising all
financial
targets for
2021:
-
constant currency growth of
+12.0%
to
+13.0%
-
operating margin
of
12.5%
to
12.7%
-
organic free
cash flow above
€1,500
million
Paris, July 28, 2021 – The
Board of Directors of Capgemini SE, chaired by Paul Hermelin,
convened on July 27, 2021 in Paris to review and adopt the
accounts2 of Capgemini Group for the first half of 2021.
Aiman Ezzat, Chief Executive Officer of the
Capgemini Group, said: "Capgemini has delivered an excellent 2021
first-half performance. Organic growth accelerated significantly in
Q2 reaching 12.9%, and H1 operating margin has materially
improved.
I would like once again to pay tribute to our
290,000 team members who continuously create value for our clients,
in a context that remains challenging in several regions.
These results are underpinned by two factors: a
structural acceleration in client demand for technology and the
relevance of our strategic direction, as outlined during our 2021
Capital Markets Day. They also exemplify our growth model based on
our intimacy with strategic clients, the success of our innovative
offerings, deep relationships with our technology partners and
significant investments in human capital. We are developing new
solutions to help our clients reduce their carbon footprint, and
have just launched our first offer for sustainable IT.
In light of this excellent performance and the
very solid prospects for the second half of the year, we have
decided to significantly raise our growth, operating margin and
free cash flow targets for 2021.”
1ST
HALF KEY FIGURES
(in millions of euros) |
H1 2020 |
H1 2021 |
Change |
Revenues |
7,581 |
8,711 |
+14.9% |
Operating margin* |
818 |
1,042 |
+28% |
as a % of revenues |
10.8% |
12.0% |
+1.2 pt |
Operating profit |
577 |
812 |
+41% |
as a % of revenues |
7.6% |
9.3% |
+1.7 pt |
Net profit (Group share) |
311 |
443 |
+42% |
Basic earnings per share (€) |
1.86 |
2.63 |
+42% |
Normalized earnings per share (€)* |
2.95 a |
3.91 a |
+32% |
Organic Free Cash Flow* |
106 |
429 |
+323 |
Net cash / (Net debt)* |
(6,008) |
(4,826) |
|
a Excluding exceptional tax expenses3 of €56 million in H1 2021 and
€26 million in H1 2020. |
Capgemini generated revenues of
€8,711 million in H1 2021. After a Q1 2021 already marked by higher
than expected growth, the Group accelerated strongly in the second
quarter. Organic growth* (i.e. adjusted for Group scope and
exchange rate impacts) was +12.9%, compared with +1.7% in the
previous quarter, with Q2 activity significantly exceeding
pre-crisis levels.
For the whole of H1, Group growth reached +14.9%
on a reported basis, +17.9% at constant exchange rates and +7.1%
organically. Digital and Cloud
services primarily underpinned this performance, accounting for
around two-thirds of activity4 and recording strong double-digit
year-on-year growth at constant exchange rates in H1.
Bookings totaled €9,128 million
in the first six months of 2021, a +20% increase at constant
exchange rates year-on-year. The book-to-bill ratio reached 105% in
H1 and 111% in Q2, demonstrating the Group's good business
momentum.
The operating margin* is €1,042
million, or 12.0% of revenues, an increase of 28% or 120 basis
points year-on-year.
Other operating income and
expenses represent a net expense of €230 million, down €11
million year-on-year.
Capgemini’s operating profit is
therefore up +41% at €812 million, or 9.3% of revenues.
The net financial expense is
€85 million, an increase of €21 million on H1 2020 with the
acquisition of Altran.
The income tax expense is €282
million and includes exceptional tax expenses2 of €56 million,
compared with €26 million last year. Adjusted for these expenses,
the effective tax rate is 31.0%, compared with 34.6% in H1 2020 and
33.0% in FY 2020.
Net profit (Group share) is up
42% year-on-year at €443 million for the first six months of 2021.
Basic earnings per share rose by 42% year-on-year
to €2.63, while normalized earnings per share*
increased 28% to €3.58. Normalized earnings per share adjusted for
exceptional tax expenses rose 32% to €3.91.
The Group generated organic free
cash flow* of €429 million, compared with
€106 million in the same period in 2020.
Return to shareholders totaled €329 million in
H1 2021, corresponding to the dividend payment (€1.95 per share).
Furthermore, the Group disbursed a net amount of €70 million on
external growth transactions during the period.
OPERATION BY REGION
|
|
Change in revenues vs. 2020 |
|
|
Q1 2021 |
Q2 2021 |
H1 2021 |
|
Growth at constant Group scope and exchange
rates |
|
+1.7% |
+12.9% |
+7.1% |
|
Impact of changes in Group scope |
|
+22.5 pts |
-0.5 pt |
+10.8 pts |
|
Growth at constant exchange rates |
|
+24.2% |
+12.4% |
+17.9% |
|
o/w: |
|
|
|
|
|
North America |
|
+16.1% |
+9.0% |
+12.3% |
|
United Kingdom and Ireland |
|
+24.1% |
+13.6% |
+18.5% |
|
France |
|
+23.2% |
+9.9% |
+16.2% |
|
Rest of Europe |
|
+35.3% |
+14.2% |
+23.7% |
|
Asia-Pacific and Latin America |
|
+17.3% |
+25.0% |
+21.3% |
|
Changes in Group scope had a significant impact
in Q1 2021 (+22.5 points at Group level), mainly due to the
acquisition of Altran, consolidated from April 1, 2020.
Given the very limited impact of scope changes
in Q2 (-0.5 points at Group level, due to the divestiture of Odigo
on December 30, 2020), constant currency growth rates are far more
representative of underlying organic trends (i.e. at constant Group
scope and exchange rates).
Organic growth across all Group regions
increased significantly on Q1 2021. In particular, France recorded
the fastest acceleration, reporting Q2 organic growth well above
10%. This acceleration is also visible across all Group sectors,
but especially in those heavily hit by the health crisis: Consumer
Goods, Services (including transportation, hospitality and
catering) and Manufacturing. The latter sector made a strong
recovery, returning in Q2 to an activity level comparable to the
pre-crisis period, as did the Consumer Goods sector in Q1.
At constant exchange rates, the Rest of
Europe (31% of Group revenues), United Kingdom and
Ireland (12% of Group revenues) and Asia-Pacific
and Latin America (7% of Group revenues) regions grew
significantly above 10%, while France (21% of
Group revenues) and North America (29% of Group
revenues) reported high single-digit growth.
These regional trends were fueled by relatively
global sector trends. At constant exchange rates, growth is high
double-digit in Consumer Goods
(13% of Group revenues), Manufacturing (25% of
Group revenues and also including Life Sciences),
Services (5% of Group revenues) and the
Public Sector (14% of Group revenues).
Financial Services (22% of Group revenues) and the
TMT sector (Telecom, Media and Technology, 13% of
Group revenues) came next. Only the momentum of the Energy
& Utilities sector (8% of Group revenues) fell
significantly short of that of the rest of the Group.
Given the magnitude of the Q2 acceleration, the
activity trends detailed above also apply to the entire half-year.
All Group regions reported double-digit growth rates year-on-year
at constant exchange rates. This performance takes into account the
impact of Altran’s consolidation, which is nonetheless limited to
Q1 as explained above.
Revenues in North America
therefore grew by +12.3% at constant exchange rates, driven mainly
by the underlying organic momentum of the Consumer Goods and
Manufacturing sectors. The operating margin rate improved further
to 15.7%, from 14.4% in the first half of 2020.
Momentum was even stronger in the United
Kingdom and Ireland region, with activity growth of +18.5%
at constant exchange rates. Public Sector and Financial Services
organic growth remained buoyant in the half-year, with Consumer
Goods accelerating steadily. The operating margin reached a record
level of 17.6%, compared with 14.3% a year earlier.
France revenues grew by +16.2%
at constant exchange rates. The Public Sector and Consumer Goods
contributed the most to organic growth during the period, while the
Manufacturing sector closed the period on a strong momentum. The
operating margin improved by 60 basis points year-on-year to
7.5%.
The Rest of Europe region grew
+23.7% at constant exchange rates. The Manufacturing, Consumer
Goods and TMT sectors reported the strongest organic trend. The
operating margin increased significantly to 11.5% from 10.2% one
year ago.
Finally, the Asia-Pacific and Latin
America region reported revenue growth of +21.3% at
constant exchange rates. Organically, the Financial Services,
Consumer Goods, TMT and Manufacturing sectors all reported
double-digit growth. The region reported a 2-point increase in its
operating margin to 12.5%, from 10.5% in H1 2020.
OPERATIONS BY BUSINESS
|
|
Change in total revenues* by business vs.
2020 at constant exchange rates |
|
|
Q1 2021 |
Q2 2021 |
H1 2021 |
|
Strategy & Transformation |
|
+25.2% |
+29.3% |
+27.3% |
|
Applications & Technology |
|
+5.7% |
+14.6% |
+10.1% |
|
Operations & Engineering |
|
+77.6% |
+7.7% |
+33.6% |
|
All Group business lines also showed a further
increase in organic growth in total revenues* compared with Q1. In
particular, organic growth was a solid double-digit in
Strategy & Transformation
services (8% of Group revenues) and Applications &
Technology services (61% of Group revenues and Capgemini's
core business), but also in Engineering services, which saw a
strong return to growth and Q2 activity levels comparable with the
pre-crisis period. This excellent performance, combined with strong
organic growth in Infrastructure and Cloud services, as well as in
Business Services (before the impact of the Odigo divestment),
brought organic growth in Operations &
Engineering services (31% of Group revenues) to above 10%,
compared with 7.7% at constant exchange rates.
For the whole of H1 and at constant exchange
rates, Strategy &
Transformation consulting services reported a
+27.3% rise in total revenues. Applications &
Technology total revenues increased +10.1%. Finally,
Operations & Engineering
total revenues grew +33.6% at constant exchange rates with the Q1
impact of the consolidation of Altran, which mainly delivers
Engineering services.
HEADCOUNT
At June 30, 2021, the Group’s total headcount
stood at 289,500, up +9.2% year-on-year, with
163,200 employees in offshore centers (56% of the total Group
headcount, up 3 points on June 30, 2020).
BALANCE SHEET
Capgemini’s balance sheet structure was
relatively unchanged in H1 2021.
At June 30, 2021, the Group had cash and cash
equivalents and cash management assets of €2.9 billion. After
accounting for borrowings of nearly €7.8 billion, Capgemini net
debt* stands at €4.8 billion at June 30, 2021, compared with €6.0
billion at June 30, 2020 and €4.9 billion at December 31, 2020.
OUTLOOK
Given the confirmed stronger than expected
momentum, the Group is raising all its targets for the fiscal year
and is now aiming in 2021 for:
- constant currency growth of +12.0%
to +13.0%, instead of +7.0% to +9.0% previously;
- an operating margin of 12.5% to
12.7%, instead of 12.2% to 12.4%;
- organic free cash flow above €1,500
million, compared with €1,300 million.
The inorganic contribution to growth is
anticipated at c. 5.0 points (4.5 points previously).
CONFERENCE CALL
Aiman Ezzat, Chief Executive Officer and Carole
Ferrand, Chief Financial Officer, will present this press release
during a conference call in English to be held today at
7.00 a.m. Paris time (CET). You can follow this
conference call live via webcast at the following link. A replay
will also be available for a period of one year.
All documents relating to this publication will
be placed online on the Capgemini investor website at
https://investors.capgemini.com/en/.
PROVISIONAL CALENDAR
October 28,
2021 Q3 2021
revenuesFebruary 14,
2022 FY 2021
resultsApril 28,
2022 Q1 2022
revenuesMay 19,
2022 Shareholders’
Meeting
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 Capgemini’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
Capgemini’s Universal Registration Document available on
Capgemini’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 Capgemini. 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, Capgemini 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.
About Capgemini
Capgemini is a global leader in partnering with
companies to transform and manage their business by harnessing the
power of technology. The Group is guided everyday by its purpose of
unleashing human energy through technology for an inclusive and
sustainable future. It is a responsible and diverse organization of
290,000 team members in nearly 50 countries. With its strong 50
year heritage and deep industry expertise, Capgemini is trusted by
its clients to address the entire breadth of their business needs,
from strategy and design to operations, fueled by the fast evolving
and innovative world of cloud, data, AI, connectivity, software,
digital engineering and platforms. The Group reported in 2020
global revenues of €16 billion.Get The Future You Want |
www.capgemini.com
* *
*
APPENDIX5
BUSINESS CLASSIFICATION
- Strategy &
Transformation includes all strategy, innovation and
transformation consulting services.
- Applications &
Technology brings together “Application Services” and
related activities and notably local technology services.
- Operations &
Engineering encompasses all other Group businesses. These
comprise Business Services (including Business Process Outsourcing
and transaction services), all Infrastructure and Cloud Services,
and R&D and Engineering Services.
DEFINITIONS
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 reported
period. Exchange rates for the reported period are also used to
calculate growth at constant exchange rates.
Reconciliation of growth rates |
Q1 2021 |
Q2 2021 |
H1 2021 |
Organic growth |
+1.7% |
+12.9% |
+7.1% |
Impact of changes in Group scope |
+22.5 pts |
-0.5 pt |
+10.8 pts |
Growth at constant exchange rates |
+24.2% |
+12.4% |
+17.9% |
Exchange rate fluctuations |
-3.8 pts |
-2.3 pts |
-3.0 pts |
Reported growth |
+20.4% |
+10.1% |
+14.9% |
When determining activity trends by business and
in accordance with internal operating performance measures, growth
at constant exchange rates is calculated based on total
revenues, i.e. before elimination of inter-business
billing. The Group considers this to be more representative of
activity levels by business. As its businesses change, an
increasing number of contracts require a range of business
expertise for delivery, leading to a rise in inter-business
flows
Operating margin is one of the
Group’s key performance indicators. It is defined as the difference
between revenues and operating costs. It is calculated before
“Other operating income and expenses” which include amortization of
intangible assets recognized in business combinations, the charge
resulting from the deferred recognition of the fair value of shares
granted to employees (including social security contributions and
employer contributions), and non-recurring revenues and expenses,
notably impairment of goodwill, negative goodwill, capital gains or
losses on disposals of consolidated companies or businesses,
restructuring costs incurred under a detailed formal plan approved
by the Group’s management, the cost of acquiring and integrating
companies acquired by the Group, including earn-outs comprising
conditions of presence, and the effects of curtailments,
settlements and transfers of defined benefit pension plans.
Normalized net profit is equal to profit for the
year (Group share) adjusted for the impact of items recognized in
“Other operating income and expense”, net of tax calculated using
the effective tax rate. Normalized earnings per
share is computed like basic earnings per share, i.e.
excluding dilution.
Organic free cash flow is equal
to cash flow from operations less acquisitions of property, plant,
equipment and intangible assets (net of disposals) and repayments
of lease liabilities, adjusted for cash out relating to the net
interest cost.
COVID-19: The impact of the
health crisis on the consolidated financial statements at June 30,
2021 is not isolated. The definition of the above alternative
performance measures is therefore unchanged and, in accordance with
past practice, these financial statements include in other
operating income and expenses a non-material amount of incremental
and non-recurring costs related to this crisis.
RESULTS BY REGION
|
Revenues |
|
Year-on-year growth |
|
Operating margin rate |
|
H1 2021(in millions of euros) |
|
Reported |
At constant exchange rates |
|
H1 2020 |
H1 2021 |
North America |
2,478 |
|
+3.3% |
+12.3% |
|
14.4% |
15.7% |
United Kingdom and Ireland |
1,018 |
|
+19.3% |
+18.5% |
|
14.3% |
17.6% |
France |
1,872 |
|
+16.2% |
+16.2% |
|
6.9% |
7.5% |
Rest of Europe |
2,710 |
|
+24.8% |
+23.7% |
|
10.2% |
11.5% |
Asia-Pacific and Latin America |
633 |
|
+16.4% |
+21.3% |
|
10.5% |
12.5% |
TOTAL |
8,711 |
|
+14.9% |
+17.9% |
|
10.8% |
12.0% |
RESULTS BY BUSINESS
|
Total revenues* |
|
Year-on-year growth |
|
H1 2021(% of Group revenues) |
|
At constant exchange ratesin Total
revenues*of the business |
Strategy & Transformation |
7% |
|
+27.3% |
Applications & Technology |
62% |
|
+10.1% |
Operations & Engineering |
31% |
|
+33.6% |
SUMMARY INCOME STATEMENT AND OPERATING
MARGIN
(in millions of euros) |
H1 2020 |
H1 2021 |
Change |
Revenues |
7,581 |
8,711 |
+14.9% |
Operating expenses |
(6,763) |
(7,669) |
|
Operating margin |
818 |
1,042 |
+28% |
as a % of revenues |
10.8% |
12.0% |
|
Other operating income and expense |
(241) |
(230) |
|
Operating profit |
577 |
812 |
+41% |
as a % of revenues |
7.6% |
9.3% |
|
Net financial expense |
(64) |
(85) |
|
Income tax income/(expense) |
(204) |
(282) |
|
(-) Non-controlling interests and share of profit of
associates |
2 |
(2) |
|
Profit for the period, Group share |
311 |
443 |
+42% |
NORMALIZED AND DILUTED EARNINGS PER
SHARE
(in millions of euros) |
H1 2020 |
H1 2021 |
Change |
Average number of shares outstanding |
167,646,025 |
168,453,627 |
|
BASIC EARNINGS PER SHARE (in euros) |
1.86 |
2.63 |
+42% |
Diluted average number of shares outstanding |
172,704,349 |
173,684,216 |
|
DILUTED EARNINGS PER SHARE (in euros) |
1.80 |
2.55 |
+42% |
|
|
|
|
(in millions of euros) |
H1 2020 |
H1 2021 |
Change |
Profit for the period, Group share |
311 |
443 |
+42% |
Effective tax rate, excluding exceptional tax expenses |
34.6% |
31.0% |
|
(-) Other operating income and expenses, net of tax |
158 |
159 |
|
Normalized profit for the period |
469 |
602 |
+28% |
Average number of shares outstanding |
167,646,025 |
168,453,627 |
|
NORMALIZED EARNINGS PER SHARE (in euros) |
2.80 |
3.58 |
+28% |
The Group recognized exceptional tax expenses of
€56 million in H1 2021, compared with €26 million in H1 2020. These
tax expenses relate to (i) the transitional impact of the 2017 U.S.
tax reform and (ii) the consequence of a 2021 change in a local tax
regulation on legal restructurings carried out in 2016.
Adjusted for these exceptional tax expenses,
normalized earnings per share is €3.91 in H1 2021.
(in millions of euros) |
H1 2020 |
H1 2021 |
Change |
Normalized earnings per share (in euros) |
2.80 |
3.58 |
+28% |
Exceptional tax expenses |
26 |
56 |
|
Average number of shares outstanding |
167,646,025 |
168,453,627 |
|
Impact of the exceptional
tax expenses (in euros) |
0.15 |
0.33 |
|
Normalized earnings per share – excluding
exceptional tax
expenses (in euros) |
2.95 |
3.91 |
+32% |
CHANGE IN CASH AND CASH EQUIVALENTS AND
ORGANIC FREE CASH FLOW
(in millions of euros) |
H1 2020 |
H1 2021 |
Net cash from operating activities |
362 |
765 |
Acquisitions of property, plant and equipment and intangible
assets, net of disposals |
(98) |
(83) |
Net interest cost |
(19) |
(92) |
Repayments of lease liabilities |
(139) |
(161) |
ORGANIC FREE CASH FLOW |
106 |
429 |
Other cash flows from (used in) investing and financing
activities |
(374) |
(698) |
Increase (decrease) in cash and cash
equivalents |
(268) |
(269) |
Effect of exchange rate fluctuations |
(66) |
48 |
Opening cash and cash equivalents, net of bank
overdrafts |
2,450 |
2,828 |
Closing cash and cash equivalents, net of bank
overdrafts |
2,116 |
2,607 |
NET DEBT
(in millions of euros) |
06/30/2020 |
12/31/2020 |
06/30/2021 |
Cash and cash equivalents |
2,149 |
2,836 |
2,623 |
Bank overdrafts |
(33) |
(8) |
(16) |
Cash and cash equivalents, net of bank
overdrafts |
2,116 |
2,828 |
2,607 |
Cash management assets |
332 |
338 |
322 |
Long-term borrowings |
(7,619) |
(7,127) |
(6,639) |
Short-term borrowings and bank overdrafts |
(866) |
(951) |
(1,131) |
(-) Bank overdrafts |
33 |
8 |
16 |
Borrowings, excluding bank overdrafts |
(8,452) |
(8,070) |
(7,754) |
Derivative instruments |
(4) |
- |
(1) |
NET CASH AND CASH EQUIVALENTS / (NET DEBT) |
(6,008) |
(4,904) |
(4,826) |
* The terms and Alternative Performance Measures
marked with an (*) are defined and/or reconciled in the appendix to
this press release.2 Limited review procedures on the interim
consolidated financial statements have been completed. The auditors
are in the process of issuing their report.3 These tax expenses
relate to (i) the transitional impact of the 2017 U.S. tax reform,
and (ii) the consequence of a 2021 change in a local tax regulation
on legal restructurings carried out in 2016.4 Group scope excluding
Altran. 5 Note that in the appendix, certain totals may not equal
the sum of amounts due to rounding adjustments.
- Capgemini_-_2021-07-28_-_H1_2021_Results
- Capgemini_-_2021-07-28_-_2021_H1_Infographics
- Capgemini_-_2021-07-28_-_2021_Q2_Infographics
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