Media relations:
Victoire Grux
Tel.: +33 6 04 52 16 55
victoire.grux@capgemini.com
Investor relations:
Vincent Biraud
Tel.: +33 1 47 54 50 87
vincent.biraud@capgemini.com
- Revenues of €18,160 million, up 14.6%
- FY constant currency growth of +15.1% and organic growth* of +10.2%
- Q4 constant currency growth of +12.5% and organic growth* of +13.2%
- Operating margin* up by 1.0 point to 12.9% of revenues
- +21% increase in net profit, Group share, with normalized earnings per share* up 27%
- Organic free cash flow1* of €1,873 million, up €754 million
- Proposed dividend of €2.40 per share
We are positioned as the strategic partner for our clients to succeed in their digital transformation. Our ability to attract and develop talent is a major asset for our sustained growth. Our recently announced ESG policy enables us to leverage the potential of technology for an inclusive and sustainable future.
Building on a good year in 2021,
(in millions of euros) | 2020 | 2021 | Change |
Revenues | 15,848 | 18,160 | +14.6% |
Operating margin* | 1,879 | 2,340 | +25% |
as a % of revenues | 11.9% | 12.9% | +1.0 pt |
Operating profit | 1,502 | 1,839 | +22% |
as a % of revenues | 9.5% | 10.1% | +0.6 pt |
Net profit (Group share) | 957 | 1,157 | +21% |
Basic earnings per share (€) | 5.71 | 6.87 | +20% |
Normalized earnings per share (€)* | 7.23 a | 9.19 a | +27% |
Organic Free Cash Flow* | 1,119 | 1,873 | +€754 million |
Net cash / (Net debt)* | (4,904) | (3,224) | |
a Excluding a transitional tax expense of €36 million in 2021, compared to tax income of €8 million in 2020. |
In 2021, Capgemini’s results exceeded all its targets as further raised in October. In a context of strong global economic recovery, the past year highlighted the acceleration in the digital transformation of large corporations and organizations. The Group is reaping the benefits of its investment in innovate offerings and its positioning as a strategic partner for its clients. This performance is also supported by the successful integration of
The solid growth momentum observed earlier in the year continued in the last three months across all Group regions, both in terms of constant currency growth (+12.5%) and organic growth (+13.2%).
Digital and Cloud services – which account for around 65%3 of Capgemini’s activity – accelerated steadily throughout the year, reporting strong double digit growth at constant exchange rates, reflecting the priority given by Group clients to critical digital transformation projects. As expected, the Group also benefited from the synergies generated by the
Bookings totaled €19,462 million in 2021, a year-on-year increase of +15.8% at constant exchange rates, representing a book-to-bill ratio for the year of 1.07. Bookings rose +10.3% at constant exchange rates in Q4 to €5,726 million, corresponding to a book-to-bill ratio of 1.17.
The operating margin* is up by +25% to €2,340 million. At 12.9% of revenues, the margin rate is significantly above the minimum targeted rate of 12.7% as raised last October. This is 1.0 point higher than in 2020 and 0.6 point above the pre-pandemic level (12.3% for fiscal year 2019). This significant increase in the operating margin rate is underpinned by an improvement in the gross margin, supplemented by lower operating expenses driven by the
Other operating income and expenses represent a net expense of €501 million, up €124 million year-on-year. This increase is mainly due to the €120 million capital gain realized in 2020 on the divestment of
Capgemini’s operating profit is therefore up +22% at €1,839 million, or 10.1% of revenues.
The financial expense is €159 million, compared with €147 million in 2020. This slight increase is primarily due to the full-year impact of debt charge associated with the acquisition of
The income tax expense is €526 million compared with €400 million last year. It includes a transitional tax expense of €36 million as opposed to a €8 million income in 2020. Adjusted for exceptional items, the effective tax rate is 29.2%, compared with 33.0% in 2020.
Net profit (Group share) rises by +21% year-on-year to €1,157 million, while basic earnings per share increase by +20% to €6.87. Excluding the capital gain realized in 2020 on the sale of
Organic free cash flow* generation totaled €1,873 million, up €754 million on 2020, largely exceeding the €1,700 million target for 2021 as raised twice during the year. This performance primarily reflects the strong growth in Group revenues and the improvement in its operating margin during the year, combined with a marked reduction in working capital.
In 2021,
The Board of Directors has decided to recommend the payment of a dividend of €2.40 per share at the Shareholders’ Meeting of
OPERATIONS BY REGION
Change in revenues at constant exchange rates | |||
Q4 2021 | FY 2021 | ||
+11.1% | +12.0% | ||
+18.0% | +18.3% | ||
+4.3% | +10.3% | ||
Rest of | +12.7% | +17.6% | |
+35.8% | +27.3% | ||
TOTAL | +12.5% | +15.1% |
- For the full year:
All Group regions posted double-digit growth at constant exchange rates in 2021, reflecting the sharp acceleration in the Group's activities. This acceleration is also visible in most sectors, but particularly in Manufacturing and Consumer Goods which were heavily affected by the pandemic in 2020. Only the Energy & Utilities sector reported muted growth.
Revenues in
The
The Rest of
Finally, revenues in the
- Q4 2021:
Q4 trends are in line with the previous quarter despite a more demanding comparison basis. At constant exchange rates, the solid underlying momentum in
These regional evolutions are fueled by sector trends that are relatively consistent across regions. All sectors reported growth rates comparable to the previous two quarters, with the Manufacturing (25% of Group revenues), Consumer Goods (13% of Group revenues) and Services (5% of Group revenues) sectors still showing constant currency growth of around 20%. The Public Sector (14% of Group revenues) and TMT (Telecom, Media and Technology, 13% of Group revenues) sectors came next, with constant currency growth of around 10%. Momentum remained strong in Financial Services (22% of Group revenues), while the Energy & Utilities sector (8% of Group revenues) experienced a slight decline.
OPERATIONS BY BUSINESS
Change in total revenues* at constant exchange rates | |||
Q4 2021 | FY 2021 | ||
Strategy & Transformation | +26.0% | +27.0% | |
Applications & Technology | +16.0% | +13.1% | |
Operations & Engineering | +6.8% | +18.5% |
- For the full year:
All Group business lines also reported double-digit growth rates in 2021 at constant exchange rates.
Strategy & Transformation consulting services (7% of Group revenues) reported a +27.0% rise in total revenues, reflecting the strong recovery in Group client discretionary expenditure. Applications & Technology services (62% of Group revenues and Capgemini’s core business) reported a +13.1% increase in total revenues.
Finally, Operations & Engineering total revenues (31% of Group revenues) grew +18.5% at constant exchange rates, taking into account the acquisition of
- Q4 2021:
All Group business lines maintained solid momentum in the final quarter of 2021. Strategy & Transformation services and Applications & Technology services continued to benefit from robust Digital and Cloud demand, reporting growth at constant exchange rates of +26.0% and +16.0%, respectively. Operations & Engineering services again reported double-digit growth after adjusting for the scope effect of the
HEADCOUNT
At
In particular, 189,000 employees work in offshore centers, some 58% of the total headcount, up 4 points on the end of 2020 and above the level reached before the
As a testimony to the strong strategic and operational rationale of this acquisition and its successful integration, the Group has already achieved the expected revenue and cost synergies, ahead of the targeted three-year timeframe. Cost and operating model synergies reached a run rate of more than
BALANCE SHEET
Capgemini’s balance sheet structure changed little in 2021.
Given its strong gross cash position, the Group completed the early redemption of two bond tranches in 2021. A €500 million tranche maturing in
At
CORPORATE SOCIAL AND ENVIRONMENTAL RESPONSIBILITY
In a health context still marked by the pandemic,
In
The Group has also stepped up its human capital development initiatives: nearly 13 million training hours were provided to Group employees in 2021, an annual average of 45.7 hours per employee. This represents an annual increase of more than 5%, in line with the Group’s commitment.
Finally,
OUTLOOK
The Group’s financial targets for 2022 are:
- Revenue growth of +8% to +10% at constant currency;
- Operating margin of 12.9% to 13.1%;
- Organic free cash flow above €1,700 million.
The inorganic contribution to growth should be of 1 point at the lower end of the target range and 2 points at the upper end.
CONFERENCE CALL
All documents relating to this publication will be posted on the
PROVISIONAL CALENDAR
April 28, 2022 Q1 2022 revenues
May 19, 2022 Shareholders’ Meeting
July 28, 2022 H1 2022 results
The payment schedule of the dividend that will be submitted to the Shareholders’ Meeting for approval would be:
June 1, 2022 Ex-dividend date on Euronext Paris
June 3, 2022 Payment of the dividend
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
This press release does not contain or constitute an offer of securities for sale or an invitation or inducement to invest in securities in
ABOUT
Get The Future You Want | www.capgemini.com
* *
*
APPENDIX4
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 | Q3 2021 | Q4 2021 | FY 2021 |
Organic growth | +1.7% | +12.9% | +13.2% | +13.2% | +10.2% |
Changes in Group scope | +22.5 pts | -0.5 pt | -0.3 pt | -0.7 pt | +4.9 pts |
Growth at constant exchange rates | +24.2% | +12.4% | +12.9% | +12.5% | +15.1% |
Exchange rate fluctuations | -3.8 pts | -2.3 pts | +0.7 pt | +2.5 pts | -0.5 pt |
Reported growth | +20.4% | +10.1% | +13.6% | +15.0% | +14.6% |
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 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 | |||||
2021 (in millions of euros) | Reported | At constant exchange rates | 2020 | 2021 | |||
5,251 | +8.5% | +12.0% | 14.8% | 15.9% | |||
2,127 | +22.2% | +18.3% | 15.5% | 18.0% | |||
3,799 | +10.3% | +10.3% | 8.7% | 10.2% | |||
Rest of | 5,563 | +18.4% | +17.6% | 11.4% | 12.3% | ||
1,420 | +26.2% | +27.3% | 13.0% | 11.5% | |||
TOTAL | 18,160 | +14.6% | +15.1% | 11.9% | 12.9% |
RESULTS BY BUSINESS
Total revenues* | Year-on-year growth | ||
2021 (% of Group revenues) | At constant exchange rates in Total revenues* of the business | ||
Strategy & Transformation | 7% | +27.0% | |
Applications & Technology | 62% | +13.1% | |
Operations & Engineering | 31% | +18.5% |
SUMMARY INCOME STATEMENT AND OPERATING MARGIN
(in millions of euros) | 2020 | 2021 | Change |
Revenues | 15,848 | 18,160 | +14.6% |
Operating expenses | (13,969) | (15,820) | |
Operating margin | 1,879 | 2,340 | +25% |
as a % of revenues | 11.9% | 12.9% | |
Other operating income and expense | (377) | (501) | |
Operating profit | 1,502 | 1,839 | +22% |
as a % of revenues | 9.5% | 10.1% | |
Net financial expense | (147) | (159) | |
Income tax income/(expense) | (400) | (526) | |
Share of profit of associates | ‑ | 5 | |
(-) Non-controlling interests | 2 | (2) | |
Profit for the period, Group share | 957 | 1,157 | +21% |
NORMALIZED AND DILUTED EARNINGS PER SHARE
(in millions of euros) | 2020 | 2021 | Change |
Average number of shares outstanding | 167,620,101 | 168,574,058 | |
BASIC EARNINGS PER SHARE (in euros) | 5.71 | 6.87 | +20% |
Diluted average number of shares outstanding | 172,555,946 | 173,899,033 | |
DILUTED EARNINGS PER SHARE (in euros) | 5.55 | 6.66 | +20% |
(in millions of euros) | 2020 | 2021 | Change |
Profit for the period, Group share | 957 | 1,157 | +21% |
Effective tax rate | 30.1% | 29.2% | |
(-) Other operating income and expenses, net of tax | 263 | 355 | |
Normalized profit for the period | 1,220 | 1,512 | +24% |
Average number of shares outstanding | 167,620,101 | 168,574,058 | |
NORMALIZED EARNINGS PER SHARE (in euros) | 7.28 | 8.97 | +23% |
The Group recognized a tax expense of €36 million in 2021, compared with tax income of €8 million in 2020, in respect of the transitional impact of the 2017 US tax reform.
Adjusted for this exceptional tax expense, normalized earnings per share is €9.19 in 2021:
(in millions of euros) | 2020 | 2021 | Change |
Normalized earnings per share (in euros) | 7.28 | 8.97 | +23% |
+ Transitional tax (income) / expense | (8) | 36 | |
Average number of shares outstanding | 167,620,101 | 168,574,058 | |
Impact of the transitional tax (income) / expense (in euros) | (0.05) | 0.22 | |
Normalized earnings per share – excluding transitional tax (income)/expense (in euros) | 7.23 | 9.19 | +27% |
CHANGE IN CASH AND CASH EQUIVALENTS AND ORGANIC FREE CASH FLOW
(in millions of euros) | 2020 | 2021 |
Net cash from operating activities | 1,661 | 2,581 |
Acquisitions of property, plant and equipment and intangible assets, net of disposals | (204) | (262) |
Net interest cost | (47) | (126) |
Repayments of lease liabilities | (291) | (320) |
ORGANIC FREE CASH FLOW | 1,119 | 1,873 |
Other cash flows from (used in) investing and financing activities | (610) | (1,716) |
Increase (decrease) in cash and cash equivalents | 509 | 157 |
Effect of exchange rate fluctuations | (131) | 134 |
Opening cash and cash equivalents, net of bank overdrafts | 2,450 | 2,828 |
Closing cash and cash equivalents, net of bank overdrafts | 2,828 | 3,119 |
NET DEBT
(in millions of euros) | ||
Cash and cash equivalents | 2,836 | 3,129 |
Bank overdrafts | (8) | (10) |
Cash and cash equivalents | 2,828 | 3,119 |
Cash management assets | 338 | 385 |
Long-term borrowings | (7,127) | (6,654) |
Short-term borrowings and bank overdrafts | (951) | (87) |
(-) Bank overdrafts | 8 | 10 |
Borrowings, excluding bank overdrafts | (8,070) | (6,731) |
Derivative instruments | ‑ | 3 |
(4,904) | (3,224) |
* The terms and Alternative Performance Measures marked with an (*) are defined and/or reconciled in the appendix to this press release.
2 Audit procedures on the consolidated financial statements have been completed. The auditors are in the process of issuing their report.
3 Now measured over the entire Group scope, including
4 Note that in the appendix, certain totals may not equal the sum of amounts due to rounding adjustments.
Attachments
Capgemini _-_2022-02-14_-_2021_Annual_ResultsCapgemini _-_2022_02_14_FY_InfographicsCapgemini _-_2022_02_14_Q4_Infographics
© OMX, source