Capgemini SE: H1 2020 estimated results: Performance reflects the
Group’s resilience
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H1 2020 estimated results: Performance
reflects the Group’s resilience
- H1 2020 estimated revenues of €7,580
million
- Growth of +7.9% at constant exchange rates*
and organic growth* of -3.4%
year-on-year
- Operating margin* of 10.8%, down 0.6
point year-on-year
- Positive organic free cash flow*
of circa €100 million
Paris, July 28, 2020 – The
Board of Directors of Capgemini SE, chaired by Paul Hermelin,
convened today in Paris. At the proposal of Aiman Ezzat, Group
Chief Executive Officer, it authorized the publication of Capgemini
Group estimated results for the first half of 2020. This estimated
financial information is currently under review1 by the auditors.
The first half of 2020 results will be published as scheduled2 on
September 3, 2020. In the unprecedented context of the pandemic,
the Group considered that it may be useful to publish estimated
information covering its main financial indicators.
Aiman Ezzat, Chief Executive Officer of
Capgemini Group, said: “In today’s unique context, the Group has
been able to build on two key strengths: its agility and its
resilience. The entire Group mobilized quickly to meet the
challenges of this disrupted environment. The estimated results for
H1 2020 illustrate the strength of our operations, which have been
considerably reinforced since the 2009 financial crisis. The Group
therefore confirms the assessment of 2020 presented on the
publication of 1st quarter revenues and expects a gradual recovery
in the 3rd and 4th quarters.”
Summary H1 estimated financial data |
(in millions of euros) |
H1 2019 |
H1 2020 |
Change |
Revenues |
7,007 |
7,580 |
+8.2% reported growth+7.9% at
constant exchange rates*-3.4% at constant scope
and exchange rates* |
Operating margin* |
797 |
817 |
+2% |
as a % of revenues |
11.4% |
10.8% |
-0.6 point |
Organic Free Cash Flow* |
90 |
c. 100 |
|
Following the successful acquisition of Altran,
the results of Altran are fully consolidated in Group accounts as
of April 1st, 2020.
Revenues
Group revenues for H1 2020 are estimated at
€7,580 million, up +8.2% year-on-year on a reported basis and +7.9%
at constant currency.
Indeed, Q2 revenues rose sharply to 4,033
million as a result of the consolidation of Altran revenues. This
represents a year-on-year increase of +13.1% on a reported basis
and +13.4% at constant exchange rates. The organic growth which,
for Q2 2020, measures growth over to the sum of revenues published
by Capgemini and Altran3 for the same period in 2019, restated at
2020 exchange rates, was -7.7% and reflects the impact of the
pandemic on the Group's overall activity (‑6.9% on former Capgemini
scope and -11.6% on former Altran scope).
Over the first six months of the year, organic
growth* was -3.4%.
Reconciliation of estimated growth rates |
Q1 2020 |
Q2 2020 |
H1 2020 |
Organic growth |
+2.0% |
-7.7% |
-3.4% |
Changes in Group scope |
+0.3pt |
+21.1pt |
+11.3pt |
Growth at constant exchange rates |
+2.3% |
+13.4% |
+7.9% |
Exchange rate fluctuations |
+0.8pt |
-0.3pt |
+0.3pt |
Reported growth |
+3.1% |
+13.1% |
+8.2% |
Operating margin
The operating margin* for H1
2020 is estimated at €817 million or 10.8% of revenues. The
year-on-year decrease in the operating margin rate is limited to 60
basis points, in line with the Group’s plan to demonstrate in 2020
its greater resilience.
Organic Free Cash Flow
The organic free cash flow* is
estimated at circa €100 million in the 1st half, versus €90 million
in 2019, despite the increase in 2020 in finance costs and other
operating expenses with the acquisition of Altran. This confirms
the quality of the Group business model.
CALENDAR
Group results for the first half of 2020 will be
published as scheduled on September 3, 2020 at 7 a.m. (Paris time)
after the completion of the review process by the statutory
auditors. A conference call will be held by the Group on the same
day to present and comment on these results in detail.
September 3, 2020
Publication of H1 2020 resultsOctober 27, 2020
Publication of Q3 2020
revenues
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 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 consulting,
digital transformation, technology, and engineering services. The
Group is at the forefront of innovation to address the entire
breadth of clients’ opportunities in the evolving world of cloud,
digital and platforms. Building on its strong 50-year heritage and
deep industry-specific expertise, Capgemini enables organizations
to realize their business ambitions through an array of services
from strategy to operations. Capgemini is driven by the conviction
that the business value of technology comes from and through
people. It is a multicultural company of 270,000 team members in
nearly 50 countries. With Altran, the Group reported 2019 combined
global revenues of €17 billion.Visit us at www.capgemini.com.
People matter, results count.
* *
*
APPENDIX
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.
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.
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. Finance lease payments were included in repayments
of borrowings until December 31, 2018. From January 1, 2019, with
the adoption of IFRS 16, these payments are now included in the new
definition of organic free cash flow as repayments of lease
liabilities.
Covid-19: The impact of the
health crisis on the consolidated financial statements at 30 June
2020 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.
* The terms and non-GAAP measures marked with an (*) are defined
in the appendix to this press release.
1 For the publication of half year results, the report of the
statutory auditors is based on a limited review of the financial
statements.
2 When announcing on March 13, 2020, that the takeover of Altran
had taken effect, the Group advised that the publication of the
2020 first half results would be pushed back from July 28 to
September 3, 2020 due to Altran’s longer accounts publication
cycle.
3 2019 reference revenues also include other small acquisitions
announced in the past year, but almost the entire current period
impact concerns the Altran acquisition.
- Capgemini_-_2020-07-28_-_H1_2020_Estimated_Results
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