Paul Hermelin, Chairman and Chief Executive Officer of Capgemini Group, comments: “The Group achieved a good first-quarter performance with continued momentum in our business, particularly in Europe. We are successfully leveraging the investments in our innovation-driven portfolio and our position as a global leader in digital and cloud. These activities continue to develop, reporting growth of 20%. In this quarter, the Group further strengthened its foothold with the acquisition of Leidos Cyber, a cybersecurity leader in the United States.
With this first quarter performance, we confirm all our objectives for 2019.” Q1 revenues totaled €3,441 million, up 9.2% year-on-year. Growth at constant exchange rates* was 6.7%, with currency impacts essentially due to the appreciation of the US dollar against the euro. Organic growth* (i.e. excluding the impact of currency fluctuations and changes in Group scope) was 5.0%. Digital and cloud activities continued to grow rapidly (20% at constant exchange rates), to account for over 45% of the Group.
OPERATIONS BY REGION
North America revenues (32% of Group revenues) grew 7.0% at constant exchange rates. The Telecoms, Media & Technology (TMT) and Services sectors were especially dynamic, followed by the Financial Services and Energy & Utilities sectors. The performance of the United Kingdom & Ireland region (12% of Group revenues) was encouraging, with growth of 6.4% at constant exchange rates. The Energy & Utilities, Consumer Goods & Retail and TMT sectors reported double-digit growth, while the Public Sector continued the positive trends initiated in the previous quarters.
France (22% of Group revenues) continued on a healthy trend, with growth of 4.8% supported by strong momentum in the Manufacturing sector. By business, growth was driven by Applications & Technology services and Strategy & Transformation consulting services.
The Rest of Europe region (27% of Group revenues) maintained a robust growth rate, with revenues up 6.3% at constant exchange rates. This was mainly fueled by the strong performance of the Public sector, Energy & Utilities and Services.
Finally, growth continued to accelerate in the Asia-Pacific and Latin America region (7% of Group revenues). Revenues rose 13.7%, driven primarily by Financial Services, Manufacturing and Services.
OPERATIONS BY BUSINESS
Strategy & Transformation consulting services (7% of Group revenues), now grouped under Capgemini Invent, recorded a 29.7% increase at constant exchange rates in their Total revenues*. This growth reflects not only the contribution of acquisitions in this sector, but also continued high demand from the Group's customers to accompany their digital transformation.
Applications & Technology services (72% of Group revenues) are the Group's core business and continue to capitalise fully on digital and cloud demand in all Group regions. Total revenues* grew 7.1% at constant exchange rates.
Operations & Engineering services (21% of Group revenues) recorded a slight increase in Total revenues*, with growth of 2.1% at constant exchange rates. Again in Q1, Infrastructure Services and Business Services (Business Process Outsourcing and platforms) show stabilisation of their activity while Digital Engineering and Manufacturing services continued to grow.
At March 31, 2019, the Group’s total headcount stood at 212,800, up 4.6% year-on-year, with a 5.3% increase in employees in offshore centers to 122,000 (57% of the total headcount).
Bookings totaled €3,367 million in Q1 2019, a 2.7% increase at constant exchange rates on a particularly demanding Q1 2018 comparison basis, when bookings rose 15.3%.
For 2019, the Group targets revenue growth at constant exchange rates of 5.5% to 8.0%, improved profitability with an operating margin of 12.3% to 12.6% and stronger organic free cash flow - on a comparable basis - of over €1.1 billion.
This outlook takes into account the impact of the application of IFRS 16 from January 1, 2019 on the operating margin (around +5 basis points) and on the organic free cash flow definition (around -€50 million), as detailed in the appendix to the press release publishing this outlook, issued on February 14, 2019.
Paul Hermelin, Chairman and 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 6 p.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/results.
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