presentation to analysts & investors results.pdf · iberia-latam (full-year revenue of...

Full-year 2017 results

Presentation to Analysts & Investors

ContentsI. Highlights of 2017

II. Outlook

III. Conclusion

Full-year 2017 results2

01Highlights of 2017


2017 performance

Highlights

2017 revenue of €1.132

billion

(up 11.5% overall, with 2%

organic growth of which +7.6%

in Q4)

Sound intrinsic

performance of 6.1%,

dampened by some

temporary factors

Strong growth in

international activity

which now represents

25.5% of

Group revenue

Business activity

continues to be buoyant (B2B ratio of 1.35 in France)

Transformation under

way that should allow us

to fully capture our

markets' growth…

...and improve the

efficiency of our delivery

Seeking opportunities for

growth through

acquisitions

The weight of

international business is

set to increase further

Ramping up of the

strategic plan with the

support of Mannai Corp.

4Full-year 2017 results

2017 performance

Key figures

Revenue Operating margin Net profit

FYReported

FYOrganic

2017€m/%

Chge. 2017 Chge.

France842.9+1.2%

+0.4%+3.0%*

48.25.7%

-2.2%-0.2pp

International289.0+58.2% +9.1%

20.87.2%

+67.0%+0.4pp

Group1,131.9+11.5% +2.0%

+4.1%*

69.06.1%

+11.8%-

37.3 +16.2%


*Organic growth restated for the foreseen impact of the 3SI outsourcing contract.

3,5% 1,8%

3,2%

5,9% 5,9%

8,3%

13,8%

7,4%

1,5% –

(4,8%)

(1,6%)

7,7%

2012 2013 2014 H1-15H2-15Q1-16Q2-16Q3-16Q4-16Q1-17Q2-17Q3-17Q4-17

• Up by 7.9%, with organic growth of 7.7% in Q4, and up by 1.2%

with organic growth of 0.4% over the full year.

• Stronger hiring momentum as from end-August and less

unfavourable base effect (calendar and 3SI Outsourcing)

• Reduced impact of 3SI in Q4 thanks to the new contract, signed

based on the solution recovered, with Kidiliz, demonstrating the

aptness of the Group's approach which has made it one of the

leading e-commerce players in France.

• Excluding the impact of the 3SI contract, organic growth in France

would have been of 3.0% over the full year

• Good business indicators at end-December: order book up 22.4%,

weighted pipeline up 13.3% and 12-month rolling book-to-bill ratio

of 1.35

• The main KPI have remained at the same high levels as last year

and are in line with expectations

• At 31 December 2017, the number of productive staff was 8,809,

i.e. an increase of 380 people year on year.

Comments

Tota

l re

ven

ue

an

d g

row

th

Financial data (France)

Gfi

's o

rgan

ic g

row

th

546,6 631,8 689,5

373,8 389,7 207,8 215,9 192,3 216,1 210,3 208,3 190,7 233,7

10,0%

15,6%

9,1% 13,1%

8,5% 10,8%

15,9%

8,1%

2,0% 1,2%

(3,5%)

(0,9%)

7,9%

2012 2013 2014 H1-15 H2-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17

CA (M€) Croissance totale

2017 performance

Growth accelerates in France


2017 performance

Calendar and base effects have a temporary impact in France

7

2,7% 3,5%

1,8%

3,2%

5,9%

7,5%

0,4%

2011 2012 2013 2014 2015 2016 2017

+ Significant catching up in H2

+ Upturn in net hires

+ E-commerce activity with signature of Kidiliz contract

+ Improved activity ratio

To

tal re

ven

ue a

nd

g

row

thO

pera

tin

g m

arg

inO

rgan

ic g

row

th

468,3 496,7 546,6

631,8 689,5 763,5

832,2 842,9

(3,0%) 6,1%

10,0% 15,6% 9,1%

10,7% 9,0% 1,2%

2010 2011 2012 2013 2014 2015 2016 2017

Revenue (€m) Total Growth

25,6 28,7 34,7

42,2 48,0 53,4 49,3 48,2

5,5% 5,8% 6,3% 6,7% 7,0% 7,0% 5,9% 5,7%

2010 2011 2012 2013 2014 2015 2016 2017

OM (€m) OM (%)

Performance Comments


3,0%**

(** organic growth excluding impact of 3SI)

2016 2017

S1 S1S2 S2

0,6%

(0,8%)

(3,3%)

(0,4%)

(12,0%)

(8,4%)

(5,6%)

2,1% 4,5%

1,0%

6,1%

2,4%

7,6%

12,3% 12,4%

9,1% 10,2%

20,0%

8,7%

12,3% 13,3%

9,3% 7,6% 7,4%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

International: Q4 revenue of €76.8 million, up by 17.1% with organic growth of 7.4%. Full-year revenue of €289 million, up by58.2% with 9.1% organic growth

Iberia-LatAm (full-year revenue of €219.4m): Q4 revenue of €57.3 million, up by +15.8%. Strong momentum combining organicgrowth of existing activities and successful integration of recent acquisitions (ROFF and Efron). Virtually flat performance in Spainin Q4 reflects negative calendar effect (one less working day than in 2016).

Northern and Eastern Europe (full-year revenue of €53.1m): Q4 revenue of €14.2 million with very robust organic growth of17.2% thanks to strong business momentum in Poland and the success of the Outsourcing operation in the Telecoms sector.

Morocco - Africa (full-year revenue of €12.7m) - Q4 revenue up by 31.2% to €4.3 million. The Group continues to roll out theoperating structure (sales and delivery) that will enable it to make the most of the potential of this region, promoting itsintegration services (particularly SAP) and software solutions.

Org. chg. yoy.

2012 2013 2014 2015 2016

Financial data (International)

2017 performance

International operations, a second pillar

8

2017


4,5%

1,0%

6,1%

2,4%

7,6%

12,3% 12,4%

9,1% 10,2%

20,0%

8,7%

12,3% 13,3%

9,3%

7,6% 7,4%

2014

2017 performance

International activities confirmed as growth drivers

9

Performance By country

1,12,9 2,4 3,0

4,0

8,49,7

11,1

1,9%

5,0%

3,8% 4,5%

5,1%

8,0%

6,8% 7,6%

H1-14 H2-14 H1-15 H2-15 H1-16 H2-16 H1-17 H2-17

MOP (M€) MOP (%)

Inte

rnati

on

al O

rgan

ic

gro

wth

Op

. m

arg

in

Inte

rnati

on

al

201720162015


Inte

rnati

on

al

Rev

en

ue

Op

. m

arg

in

Inte

rnati

on

al

2017 performance

Business trends


A globally dynamic marketPressure on margins in Banking sector in France and flat volumes but good momentum in Iberia

Long closing periods at international level and tension in the Telecoms sector

Very dynamic trend in Industry-Aerospace-Transport and in the Public and Retail-Servicessectors

Major investments in the Energy-Utilities sector in France and growth abroad

Innovation as growth acceleratorConcrete business successes:

L’Oréal Chatbots/SAREB (Spain): Package - Domotics -Mobility/Generali & BPCE: Blockchain and Domotics

Expansion of our Fablab network:Nantes, Lille, Lyon, Montpellier, Lisbon, Madrid, Brussels, etc.

Management talent - a key factor for growthFrance:

Turnover rate of 17.5% at the end of the year with an average of 16.8% over the year

Strong appeal: 2,000 hires

Good control of average salary: +1.35%

International:Stable turnover rate of 21.5% on average over the year

1,500 new hires of which 50% in Spain

A focal point at Group levelInnovation in recruitment processes and stronger teams

Reinforcing partnerships with schools

Investment to improve working conditions throughout our operations

Programme at Group level

02Outlook


Concrete factors of improvement...

Signing of major earnings-enhancing transactions

Catching up in Licences sales

Loss centres circumscribed and dealt with

ROI phase on international deployment of our solutions

Synergies on recent acquisitions (ROFF, Efron, Metaware, etc.)

Growing contribution to earnings from the most profitable countries

...but lag in H1 not fully offset

Pronounced seasonal difference between H1 and H2 with an incomplete catch-up

12Outlook

Profitability in 2017: improvement in France in H2 and growing contribution from international activities


FranceThe hiring difficulties in the market remain unchanged but Gfi Informatique should benefit from the various campaigns launched to follow on from H2 2017

Thanks to strong business momentum, for 2018 the Group is targeting organic growth at least equal to the one in 2017 (restated for 3SI impact)

12-month rolling B-to-B ratio: 1.35

Weighted pipeline: +13.3% y-o-y.

The Group is continuing its transformation with the goal of capturing all the opportunities linked to the transformation of our customers’ information systems and the emergence of new uses, both among our Top Accounts and in the Mid-Market, while constantly improving delivery efficiency.

International

Still strong momentum in the Iberia-LatAm zone leveraged by our latest acquisitions (Efron and ROFF)

Rapid expansion in Eastern Europe (Poland and Romania) and LatAm (Mexico and Brazil), particularly alongside our Top Accounts

Seeking acquisition opportunities in these markets

13Outlook

2018: good performance in France and booming international growth


14

Outlook

2018: Acquisitions: Tactical expansion in LatAm


450 consultants2016 revenue: €12mPositive contribution to earningsMexico City/Panama

Strengthening our operations in Mexico: €20 millionStrengthening our position with Spanish top accounts: BBVA, Santander, etc.Achieving critical mass in order to develop our ROFF-SAP solutions

BUSINESSES

Customers

Synergies:

PartnersCertifications

1. PROFESSIONAL OUTSOURCING

2. IT PROJECTS

3. BUSINESS INTELLIGENCE

4. BUSINESS CONTINUITY MANAGEMENT

5. CNBV AUTHORIZATION

6. CORE BANKING

15

Outlook

2018: Acquisitions: Tactical expansion in North Africa


150 consultants2017 revenue: €5mPositive contribution to earningsParis/Tunis

New nearshore shared services centreStronger Group sourcingAccess to the Tunisian market: Group customers and major local playersAn opening into French-speaking Africa

1. BUSINESS SOLUTIONS

2. DIGITAL SOLUTIONS

3. SOFTWARE AND PROJECT MANAGEMENT

4. CONSULTING

5. EMBEDDED | IoT | ROBOTICS

6. BDD & BIG DATA, MACHINE LEARNING

BUSINESSES

Customers Skills

Synergies:

03Detailed performance


Detailed performance

Successful international expansionIncrease in net profit



Growth at every level


Revenue: +11.5%

EBITDA: +10.1%

Op. margin: +11.8%

Operating income: +9.1%

Net profit: +16.2%

EPS: +15.1%

(1) EBITDA = Operating margin adjusted for non-cash items

Summary income statement 2017 2016 ∆

in euro '000

Revenue 1 131,9 1 015,4 116,5

EBITDA (1) 88,0 80,1 7,9

7,8% 7,9% + 0,1 point

Net depreciation and amortization net 19,2 18,4 0,8

Operating margin 69,0 61,7 7,3

Amortization of assigned intangible assets (2,4) (1,9) (0,5)

Goodw ill impairment losses - - -

Other operating income and expenses (10,8) (8,7) (2,0)

Operating income 55,8 51,1 4,7

Financial result (5,2) (4,3) (0,8)

Income tax expense (13,3) (14,7) 1,4

Net profit 37,3 32,1 5,2

0,56 0,07Diluted Earnings per share (in euros) 0,49


Robust business indicators

19

OM/EBITDA France OM/EBITDA International

in euro '000

2017 France International Spain Portugal Latam North and

Eastern Eur.

Africa-

Morocco

ROW

Revenue 1 131,9 842,9 289,0 127,0 76,7 15,7 53,1 12,7 3,9

Operating margin 69,0 48,2 20,8 6,6 7,8 0,7 5,0 0,4 0,2

Operating margin in % 6,1% 5,7% 7,2% 5,2% 10,2% 4,4% 9,5% 3,3% 3,9%

in euro '000 2016 France International Spain Portugal Latam North Eur. Row ROW

Revenue 1 015,4 832,2 183,2 103,0 30,4 39,4 10,5

Operating margin 61,7 49,3 12,4 5,4 2,9 3,0 1,1

Operating margin in % 6,1% 5,9% 6,8% 5,2% 9,7% 7,7% 10,2%


Income statement 2017 2016 ∆

in euro '000

Revenue 1 131,9 1 015,4 116,5

Operating margin 69,0 61,7 7,3

Operating margin % 6,1% 6,1% 0 point

Amortization of assigned intangible assets (2,4) (1,9) (0,5)

Restructurations (7,5) (5,6) (1,9)

Gains (losses) on disposals (0,0) 1,0 (1,0)

Goodw ill impairment losses - - -

Other operating income and expenses (3,2) (4,1) 0,9

Operating income 55,8 51,1 4,7

Income from cash and cash equivalents 0,1 0,1 (0,1)

Gross f inance costs (3,9) (3,3) (0,6)

Net finance costs (3,9) (3,2) (0,7)

Other f inancial income (expenses) (1,3) (1,1) (0,2)

Income tax expense (13,3) (14,7) 1,4

Net income 37,3 32,1 5,2

Attributable to the Group 37,1 32,2 4,9

Attributable to minority interests 0,2 (0,1) 0,3

0,07Diluted Earnings per share (in euros) 0,56 0,49


Good control of restructuring costs


Operating income:

• PPA: -€2.4m

• Restructuring: -€7.5m

• Other: expenses linked to acquisitions, bonus shares, moving premises

Financial income:

• Non-cash items: -€1.1m (IFRS, discounting LT loans, retirement undiscounting)

Corporation tax:

• -€10.4m of CVAE

• €4.0m in net activation of tax losses

• Stock of tax losses that can be activated in France > €12.3m

1.2% of revenue vs. 1%

Change in Net Debt 2017 2016

Ebitda 88 226 80 127

Others (1 371) (347)

Cash impact of restructuring costs (7 468) (5 619)

Cash impact of other operating expenses (6 087) (6 273)

Operational cash flow 73 300 67 888

Income tax expenses paid (3 672) (1 365)

CVAE paid (10 417) (10 770)

Tax paid (14 089) (12 135)

Change in w orking capital w ithout VAT litigation (35 496) (19 675)

VAT Litigation, amount paid - (2 520)

Change in working capital (35 496) (22 195)

I- NET CASH FROM OPERATING ACTIVITIES 23 715 33 558

Capex nets (28 179) (32 556)

Other investment cash flow (3 106) (2 041)

II - NET CASH FLOW FROM/(USED IN) INVESTING ACTIVITIES (31 285) (34 597)

Interest paid (3 590) (3 004)

Change in Accrued interest (9) (37)

Repurchases and sales of treasury shares (67) 150

NET FINANCIAL EXPENSES CASH (3 666) (2 891)

DEBT VARIATION before M&A, Dividends and Non Cash changes (11 236) (3 930)

New consolidation scope cash flow investment (15 158) (49 198)

New consolidation scope debt - (8 240)

M&A (15 158) (57 438)

- Dividends paid during the f inancial year (9 963) (10 109)

Non cash items

Non cash items IFRS (Océane…) (255) (232)

+ Proceeds on issue of shares - 2 250

Other (278) 111

OTHER (10 496) (7 980)

NET DEBT VARIATION (36 890) (69 348)


Cash flow: strong increase in free cash flow


• Net debt: €138m versus €101m

• Up by €37m

• WCR: -€35m, momentarily affected by:

• Strong organic growth of 7.9% in Q4 compared with 2.4% the previous year.

• Capex : -€28m

• M&A: -€15m

• Net debt/EBITDA: 1.57

+10%


A solid financial position combined with cash flows that enable additional borrowing


Equity of more than €300m

• €321m (+6%)

• Distribution of €9,9m in H1 2017

Goodwill: €283m

Net debt: €138m versus €101m

• +€10m linked to M&A efforts

Gearing: 43%

Consolidated statement of financial position 2017 2016 ∆

in euro '000

Goodw ill 283,1 280,9 2,2

Fixed assets 102,6 96,8 5,8

Current and non current assets 533,5 489,1 44,4

Cash and equivalent cash 29,7 28,9 0,8

Total assets 948,9 895,7 53,2

Net equity - Group share 321,1 300,6 20,5

Minority interests 0,9 0,0 0,8

Borrow ings 167,8 130,2 37,6

Current and non current liabilities 451,9 442,6 9,3

Financial liabilities and current provisions 7,2 22,3 (15,1)

Total liabilities and shareholders equity 948,9 895,7 53,2

Net debt 138,2 101,3 36,9

Gearing 43% 34%

Working capital (excludind Income tax debt) 111,1 81,7 29,4

Consolidated statement of changes in equity

in euro '000 Group NCI Total

12.31.2016 300,6 0,0 300,6

Capital increase - 0,2 0,2

2017 Net Income 37,1 0,2 37,3

Dividends paid (10,0) - (10,0)

Recognized income (expense) (2,6) - (2,6)

Treasury shares of the consolidating enterprise (0,1) - (0,1)

Valuation of share-based payments (0,5) - (0,5)

Changes in consolidated scope (1,9) 0,5 (1,4)

Change in translation reserve (1,6) - (1,6)

12.31.2017 321,1 0,9 321,9

Variation 6% 7%

04Conclusion


With the support of Mannai, Gfi is implementing its three-year strategic plantargeting revenue of €2 billion, underpinned by strong international growthand an operating margin in line with those of the sector leaders

A roadmap based on:Gaining market share in our existing marketsEnhancing value through integration of high value-added solutionsAn organisation that best captures our markets' growth potentialStrengthening our hiring strategy

Improving delivery efficiency (automation, near/offshoring, etc.)

Acceleration potential including:Major European deals (Iberia, BeLux, Italy, etc.) enabling us to target a leadership positionAdding or reinforcing Skills Centres with high AV (Digital Transformation, Big Data, etc.) and building on them Group-wideExpanding in recently entered markets (LatAm and Eastern Europe) with strong growth potential and a positive competitive environment.

24

Conclusion

A new expansion phase


presentation to analysts & investors results.pdf · iberia-latam (full-year revenue of...

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