OREANDA-NEWS. Strong Growth in Capgemini Earnings in H1 2015.

Consulting Services (4% of Group revenues) benefited from the focus on “digital transformation”, reporting activity growth of 8% on a published basis and 4% like-for-like in the first-half 2015. This growth was driven by a double-digit increase in North America and the Rest of Europe, but activity also grew in France and Benelux. The operating margin rate improved 1.1 point year-on-year, reaching 8.1% for the first-half 2015.

Local Professional Services (Sogeti, 15% of Group revenues) reported 7% growth in revenues on a published basis, and 0.5% like-for-like. Activity growth in North America, the United Kingdom and Benelux was offset by a slowdown in the Rest of Europe region. The operating margin rate increased 0.5 point on the first-half 2014 to 8.7%.

Application Services (58% of Group revenues) were the main driver behind Group growth in the first-half 2015, with a year-on-year surge in revenues of 12% on a published basis and a like-for-like increase of 5%. Geographically, this growth was fueled by the North America, Rest of Europe, Asia-Pacific and Latin America regions. The operating margin rate increased 0.7 point on the first-half 2014 to 10.0%.

Other Managed Services (23% of Group revenues) reported revenues grew 6% year-on-year in the first-half 2015, this represents a 7% contraction on a like-for-like basis. The impact of the change in the structure of a UK public sector contract, announced in December 2014, largely offset the growth observed in France, North America and the Asia Pacific and Latin America region. The operating margin rate increased 0.9 point on the first-half 2014 to 8.2%. 

OPERATIONS BY MAJOR REGION

North America revenues (25% of Group revenues) surged 35% in H1 year-on-year, boosted by the strengthening of the US and Canadian dollars against the euro. Like-for-like growth was also strong at 11.8%. The operating margin rate increased 1.4 point to 13.3%. Once again, the performances reported this year bear witness to the Group’s growth potential in the world’s leading IT services market.

The United Kingdom and Ireland region (18% of Group revenues) reported a 5% drop in revenue on a published basis and a 15% fall like-for-like. This decrease is directly tied to the contract mentioned above. The operating margin rate increased 2.8 points on the first-half 2014 to 12.7%.

France (22% of Group revenues) reported an increase of 6% in revenue. At constant consolidation scope, in a market that still fails to show any tangible signs of recovery, revenues are stable overall despite a dip in the second quarter. The operating margin rate fell slightly to 6.2% compared with 6.7% in the first-half 2014.

Benelux revenues (10% of Group revenues) increased by 0.4% thanks to the positive results reported in the financial services sector although, as expected, the environment remains challenging overall. The operating margin rate is 8.4% compared with 8.9% in the first-half 2014.

The Rest of Europe (17% of Group revenues) reported robust growth of 4% and 6% like-for-like, reflecting a solid performance in Northern and Central Europe and an improvement in the growth profile of Southern European countries. Organic growth even reached 8.5% in the second quarter The operating margin rate for the half-year contracted slightly by 0.4 point year-on-year, standing at 7.5% for the first-half 2015.

The Asia-Pacific and Latin America region (8% of Group revenues) reported revenue up 20% year-on-year, and up 15% like-for-like. The operating margin rate improved 0.5 point on the first-half 2014, rising to 3.2% for the first six months of 2015. The seasonality of the operating margin remains significant in this region and the Group expects a higher margin rate in the second-half.

NET CASH AND CASH EQUIVALENTS

The consolidated net cash position at June 30, 2015 is €1,464 million, compared with €205 million at June 30, 2014 and €1,218 million at December 31, 2014. The €246 million increase in net cash in the first half is mainly due to the capital increase performed pursuant to the financing of the IGATE acquisition for a net amount of €500 million, partially offset by the return to shareholders of €220 million through the payment of a dividend of €1.20 per share and the share buyback of €22 million and the consumption of €86 million in organic free cash flow.

Following completion of the IGATE acquisition on July 1, 2015, which is a post H1 closing event, the net debt of the Group is estimated at €2.5 billion.

HEADCOUNT

At June 30, 2015, total headcount was 147,572 people, an increase compared to December 31, 2014 (143,643 employees). The proportion of the workforce 'offshore' is now 48%, up 1.4 points over 6 months. Following the acquisition of the US Company IGATE finalized on July 1, the Group now has 178,500 employees, including 96,000 in its global delivery centers.