DEVOTEAM (EPA:DVT) Devoteam Q3 2018 Revenue : Boosted recruitment and organic growth (+22.4%) see Devoteam revising upwards its guidance for the full year
Directive transparence : information réglementée Information financière du troisième trimestre
12/11/2018 19:54
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Q3 2018 Press Release
Boosted recruitment and organic growth (+22.4%) see Devoteam revising upwards
its guidance for the full year
- Q3 2018 revenue of EUR155.2 million, of which 67% SMACS, growing more than
30%
- Devoteam extends its leadership position on Open Source technologies in
Europe with an 8th country certified as "Red Hat Premier Business Partner"
Paris, 12 November 2018
In millions of euros
Q3 2018 Q3 2017 Q3 2017 9m 2018 9m 2017 9m 2017
restated(1) presented(2) restated(1) presented(2)
Revenue 155.2 119.2 125.2 461.7 363.0 381.7
Variation 30.3% 27.2%
L- f-l
variation(3) 22.4% 19.7%
(1)R e stated in a ccordance with IFRS 15 re lated to re venue from contracts
with customers. Impact currently being va lidated by the Gro up Auditors.
(2)In the FY 2017 press re lease.
(3)At co m parable perimeter a nd exchange ra tes.
Devoteam (Euronext Paris: DVT) reported revenues of EUR155.2 million for the
third quarter of 2018, growing 22.4% compared to the third quarter of 2017,
excluding changes in currency and scope.
At current exchange rates and perimeter, consolidated revenues increased by
30.3% during the third quarter. It included negative effects of currency for
0.2 point (Turkish lira and Norwegian crown, mainly). The changes in perimeter
had a positive impact of 8 points on the quarter growth, with a net
contribution to Group revenue of EUR9.5 million.
In line with Scale! 2020 plan, the Group continues to invest in its
technological partnerships.
Devoteam has been awarded by Salesforce "Platinum Consulting Partner" in
France, after only 18 months of partnership.
The Group has also become, two years after igniting the partnership with Red
Hat, "Premier Business Partner" in an 8th country (Czech Republic). The recent
acquisition by IBM confirms Red Hat as a key player in the Cloud and Open
Source ecosystem. Devoteam expects to benefit from the new business dynamic
that the deal should bring to Red Hat.
Analysis of Q3 2018 revenue by region
France was the main region driving the Group's performance. Its revenue grew by
more than 30% organically during the third quarter of 2018. It fully benefited
from the SMACS market performance, especially on the migration of clients'
legacy infrastructure to the Cloud.
The Northern Europe & Benelux region increased its revenue by 14% organically,
a slight increase compared to the first half of 2018. Starting 1 October 2018,
the region will integrate Jayway, a Creative Technology agency, which is
expected to contribute EUR6 million to Group revenue on the fourth quarter of
2018, slightly higher than the EUR5 million previously announced.
The Central Europe region improved its revenue by more than 20% excluding
changes in currency and scope. Following a delay in obtaining the approval from
the German anti -trust authorities, Alegri entered the consolidation scope as
of 1 September 2018 instead of 1 July 2018 as previously indicated. Taking into
account the missing two months of contribution to Group revenue and the current
company business dynamic, Alegri should bring around EUR10 million to the 2018
Group revenue (versus EUR20 million previously expected). The merge with the
existing German business of the Group is launched and should materialize in
2019. This should allow the entity to start growing again in 2020.
The Iberia & Latam region increased its revenue by 10.8% organically, driven by
Mexico and projects in partnership with Google. Starting 1 September 2018, the
region integrated Bold, an entity specialized in Digital Transformation in
Portugal. It contributed EUR2.3 million to Group revenue for the third quarter
of 2018; it also brought 22 net recruitments for September 2018, both exceeding
initial expectations.
Rest of the World increased its revenue by more than 15% organically driven by
the Middle East and Tunisia.
Headcount and utilization rate
On 30 September 2018, the Group employed 6 683 people, including 251 additional
employees for the third quarter of 2018 (versus 128 for the third quarter of
2017). This acceleration in headcount growth reflects Devoteam's attractivity
as a specialized company for Digital Transformation as well as its visibility
on the market. The attrition rate slightly decreased over the quarter, at 26.7%
(versus 28% in the first half of 2018 and in the third quarter of 2017).
The ratio of billable headcount to total headcount stood at 86.1% on 30
September 2018, almost stable year on year.
During the third quarter of 2018, the utilization rate of internal resources
slightly decreased compared to the third quarter of 2017 due to the increase of
hiring; it stood at 84%.
2018 outlook
Taking into account the third quarter organic growth and despite the delay in
the consolidation date of Alegri, the Group revises upwards its annual revenue
objective to EUR650 million, growing almost 27% compared to 2017. This
objective reflects:
- An organic growth between 17% to 18%;
- A negative impact of exchange rates of 0.6%;
- A contribution from the acquisitions (net from divestments) between 9 to 10%.
The Group confirms its operating margin objective of more than 11% of 2018
revenue.
Next press release
2018 full year results: March 12th, 2019 after market closing.
Appendix
Quarterly revenue by region
In millions of euros Q3 2018 Q3 2017 9m 2018 9m 2017
restated restated
France 76.6 54.9 232.3 174.5
Variation 39.5% 33.1%
L-f-l variation 32.0% 25.8%
Northern Europe &
Benelux 36.3 31.6 115.3 91.8
Variation 14.8% 25.6%
L-f-l variation 14.1% 13.2%
Central Europe 20.3 14.4 53.3 42.2
Variation 40.9% 26.2%
L-f-l variation 21.6% 19.3%
Iberia & Latam 10.5 6.8 26.4 20.7
Variation 54.3% 27.5%
L-f-l variation 10.8% 14.1%
Rest of the world 10.7 9.3 30.9 28.1
Variation 14.9% 10.3%
L-f-l variation 15.8% 17.4%
Corporate & other (0.5) 0.2 (2.2) 0.1
Divestments 1.3 1.8 5.6 5.5
Total 155.2 119.2 461.7 363.0
Variation 30.3% 27.2%
L-f-l variation 22.4% 19.7%
Currency impact -0.2% -0.8%
Perimeter impact 8.0% 8.3%
Of which impact of significant acquisitions:
In millions of euros Q3 2018 Q3 2017 9m 2018 9m 2017
France 4.1 12.7
D2SI, consolidated as of
1O ctober 2017 3.5 10.9
Progis, fully consolidated as of
1 January 2018 0.4 1.2
Altius Services, consolidated as
of 1 February 2018 0.2 0.6
Northern Europe & Benelux 0.3 12.3
TMNS, consolidated as of
1 July 2017 (estimate) 11.9
Paradigmo, consolidated as of
1 July 2018 0.3 0.3
Central Europe 2.8 2.8
Alegri, consolidated as of
1 September 2018 2.8 2.8
Iberia & Latam 3.0 3.0
New BIC , consolidated as of
1 July 2018 0.7 0.7
Bold, consolidated as of
1 September 2018 2.3 2.3
Utilization rate of internal resources
Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017 Q1 2018 Q2 2018 Q3
2018
83.2% 84.3% 85.4% 85.3% 84.6% 85.6% 84.4% 84.1%
Changes in exchange rates
For EUR1 Average rate Average rate
9m 2018 9m 2017 Variation
UAE dirham 4.386 4.091 -6.7%
Swiss franc 1.161 1.095 -5.7%
Czech koruna 25.574 26.548 3.8%
Danish krone 7.450 7.437 -0.2%
Pound sterling 0.884 0.873 -1.2%
Moroccan dirham 11.161 10.893 -2.4%
Mexican peso 22.738 21.009 -7.6%
Norwegian krone 9.588 9.236 -3.7%
Zloty 4.249 4.265 0.4%
Tunisian dinar 3.040 2.651 -12.8%
Turkish lira 5.510 4.003 -27.3%
US dollar 1.194 1.114 -6.7%
Glossary
Restated: restated in accordance with IFRS 15 related to revenue from contracts
with customers.
France: France.
Northern Europe & Benelux: Belgium, Denmark, United Kingdom, Luxembourg,
Netherlands including TMNS in Switzerland, Germany and Serbia, Norway and
Sweden.
Central Europe: Austria, Switzerland excluding TMNS, Czech Republic, Germany
and Poland.
Iberia & Latam: Spain, Mexico, Panama and Portugal.
Rest of the world: Middle East, Italy, Morocco, Tunisia and Turkey.
Corporate: headquarter activities which cannot be allocated directly to the
operational regions, and discontinued operations.
Revenue and group contribution: the revenue of a region is the contributive
revenue and is defined as the total revenue (internal and external) of the
region minus the costs of internal subcontracting. It reflects the contribution
of the region to the revenue of the Group produced with own resources. The sum
of the contributions of the regions corresponds to the consolidated revenue of
the Group.
Operating margin: current operating result excluding the amortization of
intangible assets resulting from acquisitions and the cost of share-based
payments.
Like-for-like or l-f-l variation: variation at comparable perimeter and
exchange rates. The currency impact is calculated by translating the accounts
for year N of subsidiaries having a functional currency different than euro
with N-1 exchange rates.
The impact of changes in the scope of consolidation is determined:
- for the year N acquisitions, by deducting from total revenue N, the amount of
revenue generated during year N by the acquired entities;
- for the year N-1 acquisitions, by deducting from total revenue N, the amount
of revenue generated during year N over the months during which the acquired
entities were not consolidated in N-1;
- for the year N disposals, by deducting from total revenue N-1, the amount of
revenue generated during year N-1 over the months during which the divested
entities were no longer consolidated in N;
- for the year N-1 disposals, by deducting from total revenue N-1, the amount
of revenue generated during year N-1 by the divested entities.
Utilization rate of resources: number of working days of billable employees
that were billed to a client compared to the total number of available days
excluding holidays.
SMACS: Social Mobile Analytics Cloud Security.
Attrition rate: number of billable employees leaving the Group during the
period compared to the average billable headcount over the same period.
ABOUT DEVOTEAM
At Devoteam, we deliver innovative technology consulting for business.
As a pure player for Digital Transformation of leading organisations across
EMEA, our 6,500+ professionals are dedicated to ensuring our clients win their
digital battles. With a unique transformation DNA, we connect business and
technology.
Present in 18 countries in Europe and the Middle East, and drawing on more than
20 years of experience, we shape Technology for People, so it creates value for
our clients, for our partners and for our employees.
Devoteam will achieve yearly revenues of EUR650 million in 2018 (e).
At Devoteam, we are Digital Transformakers.
ISIN: FR 0000073793, Reuters: DVTM.PA,
Bloomberg: DEVO FP
Executive Board
Stanislas de Bentzmann,
Co-CEO
stanislas.de.bentzmann@devoteam.com
Financial communication
Evelyne Broisin,
Group controlling & investor relations
Director
evelyne.broisin@devoteam.com
Perrine Angibault,
Group reporting & investor relations
Manager
perrine .angibault@devoteam.com
Press contacts
Le Public Système
Célina Da Silva,
cdasilva@lepublicsysteme.fr
+33 6 16 79 29 32
www.devoteam.com