Capgemini Se Ord

Good day and thank you for standing by. Welcome to the CAP Gemini full year 2022 results webcast and conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message that lies in your hand is raised. To answer your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ayman Azad, CEO. Sir, please go ahead.

Thank you. Good morning, and thank you for joining us for this full year 2022 results call. I'm joined today by Carol Ferrand, our CFO, and Olivier Sevilla, our COO. So we achieved a great performance in 2022. The results are either above or in line with our targets. With 16.6% constant currency growth and 15.3% organically, we delivered another record year. This comes after 15.1% in 2021, and this is largely ahead of market growth and our midterm CAGR of 7% to 9% constant currency. So we are clearly gaining market share, and we are well positioned to address the strategic needs of our clients. I'm also very proud of our team and would like to thank the 360,000 group talents who delivered this remarkable performance. Our bookings are robust, with growth of 16.8% at constant exchange rates, and this represents a book to build of 1.08%. The operating margin increased by 22% in value. At 13%, the operating margin rate is improving by 10 basis points year-on-year. This strong performance demonstrates the resilience of the group, considering inflation, talent scarcity, and the post-pandemic return of some operating costs. This results, of course, from our big shift towards more innovative and value-created offering. The normalized EPS increased by 25% year-on-year. Based on this performance, the board of directors is proposing a dividend of 3.25 euros per share, of course, to be approved at the annual general meeting. Finally, organic free cash flow at 1.85 billion is above the 1.7 billion as targeted for 2022. So we exit 2022 with a strong momentum, and in 2022, we demonstrated our agility, delivering a strong performance while investing in our people and portfolio. Now, when you look at the performance in 2022, it's strong across the board. We report solid double-digit growth across all regions, businesses, and almost every sector. All geographies report double-digit growth at constant exchange rates, the strongest being in Asia Pacific and Latin America at 31%, fueled by our acquisition, but also a strong underlying momentum. All group businesses delivered double-digit top-line progression, strategy and transformation, services reporting an impressive 28.2%, revenue growth confirming the group's strategic positioning, and our clients' continued appetite for digital transformation. And finally, on the sector side, growth was also broad-based. Of course, it's worth highlighting the 21% growth in manufacturing, where we are reaping the benefits of our leadership and investment in intelligent industries. In a more demanding economic environment, the Q4 growth as anticipated is lower than in previous quarter, but with constant currency growth rate ranging from 12% to 20% across region, and an exit rate is stronger than expected at 12.8% organic. Bookings grew at 11.4% as constant exchange rates in Q4, corresponding to a book-to-bill ratio of 1.16%. This strong sales dynamic also reflects the continued willingness of clients to invest in their technology-driven transformation. Now, this result, of course, illustrates the relevance of our strategy and market positioning. We have a clear plan. We are executing well, and it's paying off. This is outcomes of years of investment, but let's highlight a few items. First, it's about our journey to a fully centric client organization. We repositioned Capgemini as a strategic partner of CXOs, enabling us to shape transformational deals. It's also about the business and technology solution that match our client needs in this transition to a digital economy driven by digital and cloud. We deliver end-to-end industry-specific solutions from consulting to engineering through IT and digital. the latest being our investment in sustainability to address our client challenges in the transition to net-zero. On talent, we drove significant growth in the tight-skilled labor market thanks to our ability to attract, train, and upskill our people, and of course, providing them with an exciting growth path. We also play an increasing role in building the new talent for the digital economy. Finally, a word on our operation. Our delivery is recognized for its excellence and we strive to build an agile organization able to fully leverage our global footprint and continuously adapt to rapid changes in the environment. We are ultimately driven by one thing. It's creating substantial value for our clients. And the success goes beyond financial performance. We achieve significant progress as well during the year in terms of ESG, so some highlights. Regarding environmental sustainability, we were one of the first companies globally to have its net zero emission targets validated according to the new SBTI title standards published at the end of 2021. We are on the right trajectory. At the end of 2022, our carbon emissions fell by 46% per employee and 29% in absolute value against the 2019 baseline set by the SBTI. That's the result of many initiatives, of course. Let me highlight one. Thanks to an IoT-based architecture and data-driven approach, our energy command center has enabled a 29% reduction in energy consumption across our Indian campuses versus the 2019 baseline. It's an example that shows that digital transition and environmental transition go hand in hand. An increasing number of clients are interested by some of the solutions we implement. On the other pillars, we have some good progress as well. I highlighted a few minutes ago our capacity to invest in human capital development. With 51.4 hours per employee, we increased the average number of training hours by 12% in 2022, well above our commitment of annual increase of 5%. And regarding gender diversity, the proportion of women in the total workforce stood at 37.8 at the end of 2022. With two points improvement again this year, we are one of the fastest-moving companies in our industry. Progress is also visible on diversity among executive leaders, where we stand at 24.4%. This represents an eight-point increase compared to 2019, and we are aiming to reach 30% by 2025. So overall, let's now move and see a bit what's ahead of us. So as we enter 2023, on one side, the economic environment is obviously less supportive than in 2022, and we recognize that it might still evolve in the coming quarters. On the other side, the trajectory towards a more digital and sustainable economy cannot be reversed. So the world is transitioning to a digital economy. Digital and technology are reshaping businesses. Within and across industries, at lightning speed, the rules of the games are changing around how value is created and hence the business of our client, the way they innovate, the way they produce, the way they operate, and the way they engage with their customers. Also, sustainability is a challenge of our generation. The topic is at the top of all leaders' agenda. Being able to do business in a sustainable way is becoming more and more a question of survival for one's company. Now, these two transitions are intertwined. We are well positioned as a business and technology transformation partner of CXOs. We enable our clients to accelerate their transition towards a digital and sustainable world. This transition will result in a strong structural demand for years to come and hence a strong growth potential for the group. Now, of course, in the context of the economic environment for 2023, We target a revenue growth of 4% to 7% at constant currency, with 0.5 point scope impact at the bottom end and one point at the top end. An operating margin of 13% to 13.2%, so a 0 to 20 basis point improvement year on year, and an organic free cash flow around 1.8 billion euros. Thank you for your attention. I now leave the floor to Olivier Sevilla, our COO.

Thank you, Ayman, and good morning. everyone. First of all, like Ayman, I am very proud of what Capgemini teams achieved in 2022. Capgemini's 2022 results and our Q4 bookings and revenues have been excellent, despite the weakening global economic conditions. This illustrates once again our strength, the strength of our portfolio of authors, the strength of our partners' relationship, and the strength of our relationships with large clients in the global Fortune 500. I would like to highlight the traction that our offerings in customer-first and in intelligent industry created in 2022. This impacts in a visible manner many of our sectors, but I would like to call out Our growth in manufacturing in particular, where our intelligent industry offers, has today a very big and visible impact. In 2022, we enjoyed double-digit growth in almost all our sectors, illustrating our growing industry relevance. This success is also linked, as discussed before, to our focus on higher growth and selected large clients in each sector, for whom we deploy consistently our plans to become their business and technology strategic partner at CXO level. As anticipated, Q4 came a bit lower than the high-level growth enjoyed in the previous quarters. As previously discussed, it reflects a certain level of cautiousness of some of our clients regarding discretionary spend or transformation projects with longer ROI. However, It also came above our expectation, as we see that our clients are not slowing down their strategic digital transformation initiatives, which is our focused market and position. Looking a bit at bookings, Q4 was a record high for bookings. As in Q3, we experienced some slippage of deals at some clients, but as you can see from our results, it was not material. With close to 6.7 billions of bookings, the year-on-year constant currency growth stands at 11.4%, and the book-to-bill reaches a very solid 1.60%. This brings the full-year bookings growth to almost 17% on our book-to-bill, to a high of 1.08, which indicates a positive momentum as we enter 2023. Looking backwards a minute, those last eight quarters of sales and book-to-bill really illustrate both the relevance of our strategy and also our execution capabilities in transforming our go-to-market accordingly. Looking forward, our sales funnel remains strong, We see in particular that the demand for Intelligent Industry data and cloud remains high and that sustainability is really growing in importance. Let's talk a bit about emblematic wins over recent months. Q4 was again a strong quarter for emblematic and landmark wins that give a concrete illustration of our strategic journey. Our main wins are very well aligned with the various dimensions of our strategic framework, which proves, again, that the execution of our strategy is well underway. I would like to call out two examples to put those in context of our overall strategy. Starting with Becker-Hughes. Capgemini closed a strategic multi-year partnership with Becker-Hughes. The purpose is to enable Becker-Hughes oil and gas business accelerate their software products business that offers a set of specialized software products complementing their manufactured products and solutions. For this, Capgemini brings a combination of industry, software product engineering, and digital capabilities. Such a partnership is steered at CEO and chief digital officer level, a very good example of our intelligent industry value proposition. Another example is is Credit Agricole. We signed mid-2022 a very large multi-year partnership to support and accelerate their IT transformation. The partnership is built around the co-creation of three main assets. The platform and automation factory to increase efficiency of existing digital platforms while reinforcing security and resilience. The decarbonization platform. using multi-data sources to help their clients internally to track carbon consumption by services, by IT application, and reduce it. And the creation in several locations of centers of expertise supported by calcium and iron oil experts to develop skills and stimulate innovation. This industry landmark partnership will deliver tangible and measurable business outcomes and is still, again, at top executive level. So, thank you. I am over to Carla.