Capgemini Se Ord

Thank you. Good afternoon. Good evening, everyone. Thank you for joining us for this call. And I'm joined today by Carol Ferrand, our CFO, and Olivier Sevilla, our COO. Our strong H1 results really illustrate the relevance of our strategy and market positioning. H1 revenues crossed 10 billion euros, growing at constant currency by 18.5%, with, as you can see, an acceleration in Q2 at 19.3%. Our bookings are robust, growing at 22% at constant exchange rate with a record H1 book-to-bill of 1.09. And after a very strong Q1, Q2 is again very healthy with a book-to-bill at 1.11, reflecting strong sales dynamics and positioning us for sustained top-line growth. I can say the momentum is definitely there. The operating margin at 12.2% is improving by 20 bps in spite of the high salary inflation. sustained investment in talents and offerings, and the resurgence of some pre-COVID costs. These were more than compensated by the pricing and higher value added offering mix that we have in the market. The normalized EPS increased by 36% year on year. That's supported by a 50% increase in net profits. And finally, free cash flow is positive in spite of significant working capital increase. That was, of course, anticipated. driven notably by strong top line acceleration and a high bonus outflow in the first half. We are clearly well positioned around the strategic needs of our clients and continue to gain market share globally. Now, if you look a bit at the performance by region, it is strong across the board. We have solid double digit growth in all geographies, businesses, and sectors. In Q2, all geographies have either maintained or accelerated their growth rates. In spite of a more demanding baseline, and minimal impact from acquisitions. In this impressive H1 landscape, UK reports a remarkable 23% constant currency growth, while France posed the strongest acceleration. We also continue to reap the benefits of our expansion plan in Asia Pacific and Latin America, with more than 40% increase in H1, supported by both strong organic growth and targeted acquisitions. All business lines posted double-digit constant currency growth rate, and I have to say the 30% growth in strategy and transformation is a clear indication of our positioning at clients on their most critical priorities. Growth is also broad-based in terms of sectors, with Q2 acceleration notably in financial services, energy utilities, and services. Now, the performance results from the combination of three items. First, our clients. They are increasingly relying on technology across the value chain of the company to drive both innovation, operation, but also client relationship. This is not anymore a cost play, but a growth and profit play. Putting it simply, our services represent an increasing share of clients' investments. And we are capturing, through that, more large end-to-end transformation deals. We also have a world-class innovative portfolio. that's really positioned around our clients' needs. Our leadership position in intelligent industry, our advanced value proposition in customer first, and our strong positioning in enterprise management with an industry focus meet our clients' expectations. Cloud, data, AI irrigate everything. These technologies are today at the heart of every business transformation, and this is supported as well by very solid technology partnership, notably with the hyperscalers. Last but not least, our talents. We continue to broaden our talent base, adding an additional 12,000 people in Q2 to cross the 350,000 mark. This is up 22% year on year and illustrates our ability to attract, grow, and retain the best talent in a still challenging market. We are continuously investing in building and upskilling our people, as well as adapting our approach to talent management. The share of women in our employees has continued to increase in H1, and I'm proud to say that we have been awarded several times in recent weeks for our efforts in the area of LGBTQ plus inclusion. Now, this combination of strengths, meaning strong demand, world-class portfolio, and great talents, is driving strong top line growth, as illustrated by the 15% organic growth in the last 12 months, and clearly positions us as a strategic partner of our client CXO. Now, this underlines our confidence for sustained growth in the coming years. Of course, we are closely watching the environment. We do not see any evolution in demand or decision making at this stage, which means demand remains strong and decision cycles are continue to be pretty fast. However, we have the agility to react. Our portfolio is broad and agile. We expect growth to accelerate in sustainability, in energy and utilities, as well as in cybersecurity and sovereignty, where we increased our investments. In addition, we have strong and upgraded defensive offering around cost reduction, both in outsourcing and consolidation. On the margin side, our agility continues to increase. We can count on higher level of industrialization. We also develop a value-oriented portfolio as opposed to pure capability-driven one. And we will increasingly benefit from the savings and the efficiency of our new normal operating model. We remain convinced that the structural demand for digital transformation will weather a potential downturn. However, would the environment significantly change, we are committed to demonstrate the ever-increasing resilience of the group, and we certainly aim at overperforming again. As I mentioned, sustainability is a strong growth platform for the group, this being further amplified by the increasing market demand we experience these days in terms of energy efficiency, circular economy, and renewable energy. The portfolio expansion is happening at full speed, with strong recognition from analysts, We have today seven sustainability offerings live. This will double by the end of the year, and we see an appetite for our industry-specific plug and play offerings. The business acceleration in H1 was very good, with a lot of traction coming from Europe. Clients in energy, manufacturing, and consumer products and retail are leading the way. The deal sizes remain still modest, but proliferating like digital five years ago. And in this nascent market, We signed several multi-million euro deals in the first half, including a fairly larger one. We are fully committed to sustainability. All our 350,000 employees will be upskilled by mid-2023 through our virtual sustainability campus. And we are proud of becoming one of the first companies in the world to have its net zero targets validated against the new and more demanding SBTI standards. This is an elevation of our ambitions. And it's supported by initiatives such as our New Energy Command Center in India, which uses digitalization and data to reduce by 20% our energy consumption across all our campuses. And that's a good showcase actually for our clients. We are fully committed to fighting climate change while making a significant business opportunity. Now the strong performance in H1 and the excellent dynamic in Q2 demonstrate the relevance of our strategy and our execution discipline. Based on the strong results and perspectives supported by our bookings pipeline, but also the discussion with clients, we are positive about 2022. We are raising our constant revenue growth guidance to 14% to 15% versus 8% to 10% previously, including around 1.5% contribution from acquisitions. The low end of the guidance allow for some softness in the environment in Q4. We confirm our operating margin target between 12.9 and 13.1 and our organic free cash flow target above 1.7 billion. Thank you very much for your attention and I now leave the floor to Olivier, our COO, for an update about clients and market.

Thank you, Ayman. I am also very proud of our excellent H1 sales and revenue growth. and also of our promising pipeline. We are definitely reaping the benefits of our clear go-to-market strategy, which is now delivering at full speed. We presented to you this focused go-to-market strategy during the Capital Markets Day last year. What are we doing? Within each of the sectors listed here, we selected industries in which we build distinctive capabilities and offerings. For each of those industries, we have also selected priority iconic clients with the ambition to become their strategic partner. Not only in volume, although we track that as well, but also in relevance and intimacy across the CXO level. With these clients, we are proactively shaping large end-to-end transformation deals to deliver impactful business value, supporting their growth, cost take-out, or innovation agendas. Those landmark references, then, fuel expansion throughout each selected industry. For the group, this results in an increasing number of large clients, in higher win rates, in greater resilience, and further industry relevance. We see strong results on a promising pipeline across all of our priorities, which confirms the relevance of our positioning, as my assignment said. More specifically, I would like to call out expected good news. We clearly see that when we combine our digital and engineering capabilities to deliver our unique intelligent industry value proposition, it's a real hit. in Europe, of course, and even more so in the US. Our momentum is visible in all our sectors, with double-digit growth in nearly all of them. Let me call out a couple. In manufacturing, would it be the automotive industry, aerospace and defense industry, or life sciences industry? Clearly, it's the largest contributor to our top-line acceleration in H1. Financial services also accelerated throughout H1, notably led by North America. And consumer goods and retail proved to be very dynamic across all regions. I would like also to comment a few examples of deals which demonstrate how we deliver strong business value to our clients across all of our priorities. I would like to call out three of them to illustrate the relevance of our value proposition. First, Fresenius. We have signed a multi-year cloud transformation and outsourcing deal with this leading life sciences company. This one is a multi-hundred million euros deal. Second, for UK Bank, at the crossroads of our data and sustainability offerings, we were selected to participate in the development and management of an ESG data store to measure and track financed co2 emissions this is of course a strategic project with high visibility at the c-suite finally an intelligent industry emblematic example for tier 1 automotive supplier in north america this large multi-year deal is focused on the development and testing of a digital cockpit system which is a strategic priority for these clients here again our engineering capabilities coupled with a strong expertise in automotive and digital, were instrumental to winning this year. In summary, our focused go-to-market strategy is delivering strongly, and looking at our sales pipeline, this virtuous cycle should go on. Thank you very much for your attention, and now I leave the floor to Carol, our Group CFO, to go through our detailed financial results.

Thank you, Olivier, and good evening or good afternoon, everyone. Let me now walk you through the financial highlights of our H1 results. Group revenues reached €10,688,000,000 in H1, a reported growth of 22.7% and 18.5% at constant currency. Our operating margin stands at 1,301,000,000 euros, or 12.2% of revenues, up by 20 basis points year-on-year. After the other operating expenses, financial and tax expenses, which I will further comment in a moment, the net profit for H1 reached 667,000,000 euros, up 50% year-on-year. The normalized EPS, as adjusted for transitional tax impact, reaches €5.03, up 29% year-on-year. Finally, we delivered in H1 a solid organic free cash flow of €193 million, in line with our roadmap for the full year. Let's have a look now at our quarterly revenues. Organic growth reached 18.1% in Q2, a further acceleration on the Q1 which was already strong. This brings our H1 organic growth to 17.2%. Taking into account the group scope impact, the constant currency growth reached 19.3% in Q2 and 18.5% in the first half. Ethics remained a strong tailwind this quarter leading to a 4.2% positive impact overall in H1 due to the strengthening of most currencies against the euro. Finally, our reported growth in Q2 and H1 reached 24.4% and 22.7% respectively. For the full year 2022, the M&A should contribute to around 1.5 points to our growth, while we expect FX to represent a tailwind, possibly approaching four points. Moving on to revenues by regions, all group regions reported strong double-digit constant currency growth rates in H1 2022, confirming the acceleration already observed in the first quarter. This growth was fueled by strong momentum in almost all the group sectors, as already explained by Olivier. More specifically, at constant currencies, the United Kingdom and Ireland region posted remarkable growth of 22.7% at constant exchange rates, boosted by a strong public sector, but also by the consumer goods and retail and energy and utility sectors, which were very dynamic. The North America and rest of Europe regions grew by 16.8% and 16.9% respectively. Here again, sector traction was broad-based, notably to the manufacturing sector, but also financial services in North America and consumer goods and retail in rest of Europe. France reported revenue growth of 12.8%, thanks notably to a robust momentum in the manufacturing and consumer goods and retail sectors. Lastly, revenues in the Asia-Pacific and Latin America regions increased sharply by 41.5%. The contribution of group acquisition in 2021 came on top of a strong organic momentum, notably in the manufacturing and financial services sectors. Considering now revenues by business line. All group business lines also reported robust double-digit constant currency growth rates in H1 2022. Both strategy and transformation and application and technology services continued to benefit from growth-based demand for digital transformation, posting growth in total revenue of 29.7% and 21.1% respectively. Operation and engineering services, 29% of group revenues grew at 13.4%, reflecting strong growth in engineering services as well as in cloud infrastructure services. Moving now to the headcount evolution. Our total headcount reached 352,100 employees at the end of H1, up 22% year-on-year. The offshore leverage reached 59% at the end of June, up by three points year on year, with visible progress in continental Europe. Finally, the last 12 months' attrition reached 27% in H1. However, quarterly attrition rates have now stabilized over the last three quarters, so it should become visible into the reported last 12-month figures sometime in H2. Now moving to our operating margin by regions. In North America, our operating margin is slightly down by 20 basis points year on year, but still very above group average. The operating margin of UK and Ireland reached a record level of 18.4% in H1 compared to 17.6% a year earlier. The rest of Europe regions reported a lower operating margin compared to the same period last year at 9.8% versus 11.5% on the back of some non-recurring items. The Latin America and Asia-Pacific region is also experiencing a lower operating margin than in H1 last year, down to 9.7% versus 12.5%. Lastly, I'm pleased to report that France delivered a marked improvement of its operating margin which rose by 3.2 points year-on-year to reach 10.7%. Moving now on to the analysis of our operating margin, as anticipated, our price and mix strategy is more than offsetting the higher cost of growing and training talents in this environment. After taking into account the return of some costs avoiding during the COVID, the gross margin is down by only 10 basis points. Our additional investments in sales and marketing are more than compensated by the operating leverage on the GNA. Overall, the operating margin increased by 20 basis points in H1, which is consistent with the 0 to 20 basis points improvement targeted for the full year. Moving on to the next slide. Net financial expenses are noticeably down to 71 million euros in H1 2022 compared to 85 million euros for the same period last year. Income tax expenses increased from 382 million euros in H1 last year to 327 million in H1 2022. This amount includes exceptional tax expenses for 29 million compared to 56 million euros last year. Setting aside the transitional item, our effective tax rate is down to 29.9% in line with what should be our normalcy each year in the medium term. Let's now turn to the recap of our P&L from the operating margin to the net income. The other operating income and expenses are almost stable year on year at €333 million. Our operating profit is up by 32% to €1.68 billion or 10% of our revenues. After financial expenses and taxes, our net profit amounts to €667 million, up 50% from the same period last year. Consequently, the basic EPS stands at €3.91, up 49% year-on-year. The normalized EPS is up 29% to €5.03 excluding the exceptional tax expenses previously discussed. Finally, a word on the evolution of our organic free cash flow and net debt. In H1, this year we have two specific working capital items at play. First, as discussed in last February, the reverse effect of the big positive impact we had in fiscal year 21. Second, the additional working capital required by our record 23 reported growths. Therefore, our H1 underlying free cash flow, which stands at around 50 million euros excluding our factoring program, is a strong achievement which supports our full year outlook of 1.7 billion euros. We close a limited number of M&A transactions in H1, leading to a net cash outflow of 34 million euros, Return to shareholders reached €926 million in H1, of which €409 million for 2021 dividend and €517 million for share buybacks. Given the seasonability of our cash flow generation, our net debt stands at €4.1 billion at the end of H1 compared to €4.8 billion a year ago and €3.2 billion at the end of 2021. Iman, back to you for some closing words.