Revenues of €12,792 million
•FY revenue growth of +4.0% at constant exchange rates and +6.2% in Q4
•Digital and Cloud revenues close to €5 billion (+24% year-on-year)
•Operating margin rate* of 11.7%, up 20 basis points
•Net profit Group share up 11% to €820 million
•Normalized EPS* of €6.22
•Organic Free Cash Flow* of €1,080 million
•Proposed dividend of €1.70 per share, up 15 cents

Paris – The Board of Directors of Capgemini SE, chaired by Paul Hermelin, convened in Paris on February 14, 2018 to review and authorize the issue of the accounts[1] of Capgemini Group for the year ended December 31, 2017.

For Paul Hermelin, Chairman and Chief Executive Officer of Capgemini Group: “Our excellent performance in 2017 reflects our ability to create value for our customers and capture – in particular – the demand fueled by their digital transformation agendas, while pursuing our profitable growth journey.

We announce a revenue growth (+4.0% at constant exchange rates) higher than the objective set and end the year with very good momentum (+6.2% in Q4), particularly in North America, the Group’s largest market. Digital and Cloud revenues reached close to €5 billion in 2017 and account for 40% of our business in the fourth quarter. Finally, in line with our business plan, our operating margin rate, at 11.7%, continued to progress towards our medium-term ambition.

We won significant contracts to help our customers, as global strategic partners, attain their objectives in terms of both productivity – leveraging our automation technologies – and innovation. We enriched our offerings in these areas with several bolt-on acquisitions, particularly in e-commerce and digital design, including the acquisition of the digital customer engagement firm, LiquidHub, announced last week.

In 2018, we will continue to develop our service portfolio, while strengthening our sector expertise. With 200,000 employees, 57% of whom are located in our global network of delivery centers, we will also continue to invest in our talent through sustained training. Finally, together with our Board of Directors, we have redefined our corporate social responsibility priorities with specific and quantifiable commitments in the areas we have selected: promoting diversity, environmental protection and fighting the digital divide, or as we call it ‘digital inclusion’.”

2017 KEY FIGURES

(in millions of euros) 2016 2017 Change
Revenues 12,539 12,792 +2.0%

+4.0% at constant currencies

Operating margin* 1,440 1,493
as a % of revenues 11.5% 11.7% +20bp
Operating profit 1,148 1,183
as a % of revenues 9.2% 9.2%
Net profit (Group share) 921 820 +11%a
Basic earnings per share (€) 5.44 4.88 +12%a
Normalized earnings per share (€)* 6.69 6.22 +11%a
Organic Free cash flow* 1,071 1,080 +9M€
Net cash and cash equivalents / (Net debt) (1,413) (1,209) +204M€
a Excluding exceptional tax income of €180 million recognized in 2016

The Group generated revenues of €12,792 million in 2017, up 2.0% compared with 2016. Growth is 4.0% at constant exchange rates*, above the 3.0% target set at the beginning of the year. Organic growth* (i.e. excluding the impact of currency fluctuations and changes in Group scope) is 3.6%. In Q4, growth reached 6.2% at constant exchange rates.

Digital and Cloud revenues continued to expand, growing 24% at constant exchange rates to reach €4.9 billion, representing 38% of 2017 revenues (40% in Q4 2017).

Bookings totaled €12,890 million during the year, up slightly (+1% at constant exchange rates) compared to €13,027 million in 2016. Book-to-bill ratio was 1.01 in 2017 and 1.14 in Q4.

The operating margin* is €1,493 million, or 11.7% of revenues, an increase of 4% or 20 basis points year-on-year, in line with annual objectives. Profitability continues to improve, reflecting the Group’s ability to pursue industrialization (rightshore model, standardization of operations, increased automation) while rapidly expanding its innovation businesses. Geographically, this improvement is driven primarily by higher profitability in Europe, combining remarkable Digital and Cloud growth and strong offshoring demand.

Other operating income and expenses total €310 million, compared with €292 million in 2016. Higher restructuring costs of €131 million are offset by lower acquisition and integration costs of €38 million.

Operating profit totaled €1,183 million, or 9.2% of revenues, compared with €1,148 million in 2016.

Financial expenses represent a net charge of €72 million, down from €146 million in 2016. This follows a reduction in interest charge on borrowings following the early redemption of the ORNANE bonds at the end of 2016 and the early unwinding of USD debt hedging instruments in 2017.

The Group recorded a tax expense of €303 million in 2017, representing an effective tax rate of 27.3%. This amount includes the net impact of changes in deferred tax assets in the United States[1], notably resulting from the changes to tax rates under the U.S. tax reform. In 2016, the tax expense was €94 million, following the recognition of non-cash tax income (net) of €180 million in respect of goodwill arising from legal reorganizations.

Net profit (Group share) amounted to €820 million for 2017, compared with €921 million for 2016. Basic EPS (earnings per share) is €4.88 and Normalized EPS* is €6.22, representing an increase (excluding one-off tax income) of 11% year-on-year.

Organic free cash flow* reached €1,080 million, exceeding the €950 million objective set at the beginning of the year. In 2017, Capgemini paid a dividend of €262 million, devoted €176 million to the multi-year share buyback program and spent a net amount of €238 million on acquisitions.

The Board of Directors decided to recommend the payment of a dividend of €1.70 per share at the next Shareholders’ Meeting on May 23, 2018, up 15 cents year-on-year. The corresponding payout ratio is 35% of net profit (Group share), in line with the Group’s distribution policy.

[1] See « BALANCE SHEET & TAX » on page 4
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