DEVOTEAM (EPA:DVT) Devoteam : Q1 2017 revenues
Transparency directive : regulatory news
16/05/2017 18:27
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Press release
Q1 2017 revenue at EUR150 million, strong organic growth of 14.5%(1)
Acquisition of TMNS in the Netherlands to strengthen the "Agile IT Platform"
offer of the strategic plan Scale!
Full-year guidance of revenue increased to nearly EUR600 million
Paris, May 16th 2017
In millions of euros Q1 2017 Q1 2016
Revenue 149.9 133.4
Variation 12.4%
L-f-l variation 12.9%
L-f-l variation
excluding Between 14.5%
L-f-l: at comparable perimeter and exchange rates.
Devoteam (Euronext Paris: DVT) reported revenues of EUR149.9 million for the
first quarter of 2017, a 14.5% increase compared to the first quarter of 2016,
excluding changes in currency, scope and Between impact.
At current exchange rates and perimeter, consolidated revenues have increased
by 12.4% during the first quarter. It included negative effects of currency for
0.1 point and perimeter for 0.4 point. The changes in scope comprised the
activities of Grimstad in Norway and Genesis in Switzerland, divested in 2016,
which contributed EUR2.6 million of consolidated revenues in the first quarter
of 2016. The impact of the divestments was balanced by Q-Partners, HNCO and
Globicon, the acquisitions consolidated as of July 1st 2016, which generated
revenues of EUR2.0 million in the first quarter of 2017 (estimates for HNCO and
Globicon).
(1) Excluding Between.
The number of working days in the first quarter of 2017 was 4% (2.2 days)
higher than last year with a positive impact on growth. Conversely, the second
quarter of 2017 will show 5% working days less (2.8 days) compared to the
second quarter of 2016.
Stanislas de Bentzmann, co-CEO of Devoteam, commented on the beginning of the
year: "Following the good trend of 2016, the Group has grown revenues strongly
in the first quarter of 2017 driven by the initiation of digital transformation
projects by our clients. In parallel, the Group focuses on the deployment of
its strategic plan Scale! with the acceleration of the SMACS activities growing
43% and the acquisition of TMNS in the Netherlands."
Analysis of Q1 2017 revenue by region
France reported revenues of EUR67.7 million in the first quarter of 2017,
growing 20.5%. This acceleration was supported especially by the
"cybersecurity" offer and the gain of many high value-added projects with
leading players of the financial sector. It resulted from a dynamic market and
the fact that Devoteam has been granted two French certificates, "CNIL
Gouvernance" and "PASSI", showing the consultants' expertise in IT security.
Northern Europe & Benelux (excluding Between) achieved revenues of EUR32.6
million, growing 10.7% at constant exchange rates and perimeter, driven
primarily in Denmark and Benelux.
The Central Europe region generated revenues of EUR13.7 million, representing
an organic growth of 11.0%, thanks to the steady recruitment, the opening of
new customer accounts in the finance sector and the growing business with
Deutsche Telekom.
Rest of the world reported revenues of EUR17.3 million, growing 5.4%
organically compared to the first quarter of 2016. The increase is mainly
explained by the consulting activities in the Middle East.
The revenue of Between, the broker activity in the Netherlands, stood at
EUR18.7 million in the first quarter of 2017 and grew 2.5% compared to last
year, in accordance with the Group's expectation.
Headcount and utilization rate
On March 31st 2017, the Group employed 4 370 people compared to 4 229 people on
December 31st 2016. The headcount increased by 141 people during the first
quarter, including the insourcing of 32 nearshore administration people in
Morocco.
The ratio of billable headcount to total headcount stood at 84.6% on March 31st
2017 and comprised a 0.6 point negative impact from the back-office incourcing.
Despite this impact, the ratio improved compared to March 31st 2016.
The strong increase in the headcount did not alter the utilization rate of the
Group. Excluding divested activities, the utilization rate was at 82.9% in the
first quarter of 2017, constant compared to the first quarter of 2016.
Changes in scope
Devoteam acquired a 80% stake in TMNS and strengthens its positioning in
Benelux, one of the four key areas of the strategy Scale!.
TMNS combines consulting and integration expertises in Enterprise Architect,
API management and Devops which are essential solutions for the transformation
and the urbanisation of core IT to enable the digitilization of the business.
The ability to bridge the legacy, predominantly on premise IT, with the Cloud
space and third parties applications is key in large organizations' capacity to
leverage past investments and existing assets while benefiting from new
powerful business accelerators.
TMNS has 200 employees nearly and achieved revenues of about EUR18 million in
2016 with a profitability in line with the Group. The acquisition is
consolidated as of June 1st 2017.
The transaction also includes the disposal of 20% stake in Devoteam Netherlands
to the management team of TMNS.
2017 outlook
Taking into account the growth dynamic and the acquisition of TMNS, the Group
increases its annual target of revenue to EUR595 million, representing a 8%
organic growth excluding Between, against EUR580 million disclosed at the begin
of the year. It includes a contribution of TMNS around EUR10 million over seven
months. The Group maintains its target of operating margin close to 9% given
that the profitability of TMNS is in line with the Group.
Financial calendar
Press release after market closed
Shareholders' meeting Dividend payment
Q2 2017 Q3 2017
September 6th 2017 November 14th 2017 June 16th 2017 July 3rd 2017
Appendix
Contribution of the regions to the revenue
In millions of euros Q1 2017 Q1 2016
France 67.7 56.2
Variation 20.5%
L-f-l variation 20.5%
Northern Europe & Benelux 32.6 28.4
Variation 14.5%
L-f-l variation 10.7%
Central Europe 13.7 11.5
Variation 18.8%
L-f-l variation 11.0%
Rest of the world 17.3 16.4
Variation 5.2%
L-f-l variation 5.4%
Corporate (0.1) (0.1)
Between 18.7 18.2
Variation 2.5%
L-f-l variation 2.5%
Divestments - 2.6
Total 149.9 133.4
Variation 12.4%
L-f-l variation 12.9%
L-f-l variation excluding Between 14.5%
Of which contribution of the acquisitions:
In millions of euros Q1 2017 Q1 2016
Northern Europe & Benelux 1.1 -
HNCO, consolidated as of July
1st 2016 (estimate) 0.6 -
Globicon, consolidated as of July
1st 2016 (estimate) 0.5 -
Central Europe 0.9 -
Q-Partners Consulting,
consolidated as of July 1st 2016 0.9 -
Utilization rate of internal resources exlcuding divested entities
Q1 2016 Q2 2016 Q3 2016 Q4 2016 2016 Q1 2017
82.9% 85.1% 85.5% 84.1% 84.4% 82.9%
Changes in exchange rates
For EUR1 Average rate Average rate Variation
Q1 2017 Q1 2016
UAE dirham 3.910 4.051 3.6%
Swiss franc 1.096 1.096 -
Czech koruna 27.021 27.038 0.1%
Danish krone 7.435 7.461 0.3%
Algerian dinar 117.472 119.018 1.3%
Pound sterling 0.860 0.770 -10.4%
Moroccan dirham 10.704 10.828 1.2%
Mexican peso 21.631 21.631 -
Norwegian krone 8.984 9.520 6.0%
Zloty 4.321 4.361 0.9%
Tunisian dinar 2.439 2.239 -8.2%
Turkish lira 3.937 3.247 -17.5%
US dollar 1.065 1.103 3.6%
Glossary
France: French operations.
Northern Europe & Benelux: Belgium, Denmark, United-Kingdom, Luxembourg,
Netherlands excluding Between, and Norway excluding divested activities.
Central Europe: Austria, Czech Republic, Germany and Poland.
Rest of the world: Middle East, Algeria, Spain, Italy, Morocco, Mexico, Panama,
Tunisia and Turkey.
Corporate: headquarter activities which cannot be allocated directly to the
operational regions. It also includes some non-significant remaining activities
of the discontinued businesses in France (mainly outsourcing).
Between: the "Between" subsidiary in the Netherlands, specializing in "
sourcing" of IT professionals, has a relatively volatile revenue to the extent
that, according to the contracts concluded and the type of missions carried
out, turnover recognized in the consolidated accounts is either gross margin
contracts or the entire client billing. Consequently, the Group separates this
activity to calculate its growth aggregates.
Divestments or divested entities: in 2016, divested activities include Grimstad
activities in Norway, deconsolidated as of May 1st 2016, and Devoteam Genesis,
deconsolidated as of July 1st 2016.
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 cost of share-based
payments and the amortization of intangible assets resulting from
acquisitions.
Like-for-like or l-f-l variation: variation at comparable perimeter and
exchange rates.
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.
ABOUT DEVOTEAM
At Devoteam, we deliver innovative technology consulting for business.
We are 4,400 professionals dedicated to ensuring our clients win their digital
battles.
Present in Europe and in the Middle East, drawing on 20 years of experience, we
improve business performance making their companies truly digital. We build IT
infrastructure for digital, and make sure people are along for the ride.
In 2016, Devoteam achieved revenue of EUR556 million.
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.fr