DEVOTEAM (EPA:DVT) Devoteam - Press Release on the revenue on the 3rd quarter 2019

Transparency directive : regulatory news

05/11/2019 18:01

Press release
#TechforPeople

EUR182.1 million of revenue, growing 17.3% over the third quarter

- Organic growth of 11.3% for Q3 2019

- ServiceNow rewards Devoteam: its "International Centre of Excellence" (ICE)
in the Czech Republic named "EMEA Outsourced Strategic Partner"

Paris, 5 November 2019

In millions of euros Q3 2019 Q3 2018  9m 2019  9m 2018
Revenue                182.1   155.2   555.4    461.7
Variation              17.3%           20.3%
L-f-l variation        11.3%           10.8%

L-f-l: at comparable perimeter and exchange rates.

Devoteam (Euronext Paris: DVT) reported revenue of EUR182.1 million in the
third quarter of 2019, with an organic growth of 11.3% compared to last year.
The positive change in working days of 1.1 day compared to the third quarter of
2018 represented 1.6 point in growth.

At current exchange rates and scope, consolidated revenues for the first nine
months of the year increased by 20.3%, including 0.2 point favorable currency
impact (United Arab Emirates dirham). The changes in perimeter also had a
positive impact of 9.2 points on the growth, with a net contribution to Group
revenue of EUR42.5 million.

Devoteam ICE ("International Centre of Excellence") recognized as ServiceNow
"EMEA Outsourced Strategic Partner"
Since its launch in 2018, Devoteam's ICE has been providing functional
ServiceNow consulting and integration services in SaaS mode across EMEA. This
recognition emphasizes the excellence of this team.

Launch of the Kubernetes DevOps academy in EMEA
Devoteam launched a Kubernetes DevOps academy across EMEA focused on training
our consultants on a large panel of Red Hat open source technologies, ranging
from Cloud, DevOps and Middleware. Over 150 consultants will be certified
across the Group by the end of the year. This academy allows Devoteam to
increase its expertise in the field of open source Kubernetes technologies, the
foundation of new generation  cloud applications.

Analysis of Q3 2019 revenue by region

France revenue was up 9.1% organically in the third quarter and continued to
improve its utilization rate.

The Northern Europe region delivered strong results over the quarter, with
organic growth of 15.8% driven by the activities in the United Kingdom, the
Netherlands and Norway. Belgium continued its solid performance started in the
first half of 2019.

The Central Europe region grew by 6.7% impacted by the entry of Alegri in the
organic scope which has offset partially the resurgence of the growth of
Devoteam Germany.

The Iberia & Latam region increased organically by 10.6%, driven by Devoteam
Spain and the Bold business in Portugal.

Excellent performance of the Rest of the World region, which rose by 28.4%
organically, due to the strong growth of activities in the Middle East and
Maghreb.

Headcount and utilization rate

At 30 September 2019, the Group employed 7 458 professionals. Excluding the
changes in scope, the headcount increased by 170 professionals during the third
quarter of 2019.

The ratio of billable headcount to total headcount stood at 85.4% at the end of
the period, increasing slightly compared to the end of June 2019.

In the third quarter of 2019, the Group utilization of internal resources stood
at 84.0%, an improvement of 0.9 point compared to the second quarter of 2019
with good progress of the management's action plans.

2019 outlook

Considering the pace of the utilization rate improvement and the current
visibility, the Group now expects revenue of circa EUR765 million and organic
growth close to 11%. It maintains its objective of operating margin around
10.3% of revenue for 2019.

Next press release

2019 full year results: March 10th 2020, after market close.

Appendix

Pro forma information of revenue and operating margin

Devoteam Poland has been sold and deconsolidated from 1 July 2019. The entity
has been reclassified from the Central Europe region to the Divestments
region.

In millions of euros
            Q1 2018  Q1 2018  Q2 2018 Q2 2018 Q3 2019  Q3 2019 Q4 2019 Q4 2019
           restated          restated         restated         restated
                   presented*        presented*      presented*     presented*
Central Europe
Group
contribution 12.9    13.2    12.1      12.4    14.8     15.2     22.0   22.3
Divestments
Group
contribution  6.4     6.1     6.8       6.6     7.4      7.1      4.3    4.1

In millions of euros
           H1 2018   H1 2018    9m 2018    9m 2018      2018       2018
          restated  presented*  restated  presented*  restated  presented*
Central Europe
Group
contribution 25.0     25.6        39.8       40.8        61.9       63.1
Operating
margin        2.8      2.8                                6.8        6.8
In % of Group
contribution 11.1%     3.1%                              11.0%      10.7%
Divestments
Group
contribution 13.3     12.7        20.7       19.8        25.0       23.8
Operating
margin        1.1      1.1                                1.6        1.7
In % of Group
contribution  8.5%  -120.9%                               6.6%       7.0%

In millions of euros
                   Q1 2019   Q1 2019    Q2 2019    Q2 2019
                  restated  presented*  restated  presented*
Central Europe
Group contribution   20.4      20.7       19.9      20.2
Divestments
Group contribution   0.4        0.1        0.4       0.1

In millions of euros   H1 2019 restated  H1 2019 presented*
Central Europe
Group contribution          40.4                40.9
Operating margin             1.3                 1.3
In % of Group contribution   3.2%                3.1%
Divestments
Group contribution           0.7                 0.2
Operating margin            (0.3)               (0.3)
In % of Group contribution -39.5%             -120.9%

*Central Europe region presented in September 2019 for Q1 2018 and 2019, Q2
2018 and 2019, H1 2018 and 2019; in May 2019 for Q3 2018, Q4 2018, 9m 2018 and
full year 2018.
Divestments region presented in September 2019.

Quarterly revenue by region

In millions of euros     Q3 2019    Q3 2018   9m 2019    9m 2018

France                     83.6       76.6       258.5     232.3
Variation                  9.1%                   11.3%
L-f-l variation            9.1%                   11.3%
Northern Europe & Benelux  47.6       35.7       147.3     113.7
Variation                  33.3%                  29.6%
L-f-l variation            15.8%                  11.9%
Central Europe             20.5       14.8        60.8      39.8
Variation                  38.3%                  52.7%
L-f-l variation             6.7%                   3.9%
Iberia & Latam             16.9       10.5        50.2      26.4
Variation                  61.3%                  89.9%
L-f-l variation            10.6%                   4.3%
Rest of the world          14.3       10.7        40.4      30.9
Variation                  33.2%                  30.7%
L-f-l variation            28.4%                  26.4%
Corporate & other          (0.8)      (0.5)       (2.7)     (2.2)
Divestments                  -         7.4         0.7      20.7
Total                     182.1      155.2       555.4     461.7
Variation                  17.3%                  20.3%
L-f-l variation            11.3%                  10.8%
Currency impact             0.2%                   0.2%
Perimeter impact            5.8%                   9.2%

Of which impact of significant acquisitions:

In millions of euros   Q3 2019   Q3 2018   9m 2019   9m 2018
Northern Europe &
Benelux                  6.5                  20.5
Paradigmo, consolidated
as of 1 July 2018                              0.8
Jayway, consolidated
as of 1 October 2018     5.0                  17.2
Avalon Solutions,
consolidated as of
1 April 2019             1.4                   2.5
Central Europe           4.6                  19.4
Alegri, consolidated
as of 1 September 2018   4.6                  19.4
Iberia & Latam           5.2                  22.4
New BIC, consolidated
as of 1 July 2018                              1.9
Bold, consolidated as
of 1 September 2018      5.2                  20.4

Utilization rate of internal resources

Q1 2018 Q2 2018 Q3 2018  Q4 2018  2018  Q1 2019 Q2 2019 Q3 2019
85.6%    84.4%    84.2%   82.7%  84.2%    82.3%   83.1%  84.0%

Changes in exchange rates

For EUR1     Average rate 9m 2019  Average rate 9m 2018   Variation
UAE dirham       4.127                4.386               6.3%
Swiss franc      1.118                1.161               3.9%
Czech koruna    25.702               25.574              -0.5%
Danish krone     7.464                7.450              -0.2%
Pound sterling   0.884                0.884               0.1%
Moroccan dirham 10.792               11.161               3.4%
Mexican peso    21.634               22.738               5.1%
Norwegian krone  9.771                9.588              -1.9%
Zloty            4.301                4.249              -1.2%
Serbian dinar  117.928              118.227               0.3%
Swedish kronor  10.568               10.237              -3.1%
Singapore dollar 1.533                1.600               4.4%
Tunisian dinar   3.317                3.040              -8.3%
Turkish lira     6.339                5.510             -13.1%
US dollar        1.124                1.194               6.3%

Glossary

France: France.

Northern Europe & Benelux: Belgium, Denmark, United Kingdom, Luxembourg,
Netherlands, Norway and Sweden. It also includes TMNS in Germany and in Serbia,
Jayway in the United States, Avalon Solutions in Poland, in Singapore and in
the USA.

Central Europe: Austria, Switzerland, Czech Republic, Germany and Slovakia.

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.

Divestments: in 2018, the region includes Shift deconsolidated from 1 September
2018 and Siticom GmbH deconsolidated from 31 December 2018. In 2019, it
includes NauOn (Bold) deconsolidated from 30 June 2019, and Devoteam Poland
deconsolidated from 1 July 2019.

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.

Attrition rate: number of billable employees leaving the Group during the
period compared to the average billable headcount over the same period.

SMACS: Social Mobile Analytics Cloud Security.

Free cash flow: operating cash flow reduced by the acquisition of tangible and
intangible assets. For comparability purposes, from 1 January 2019, the
operating cash flow is restated of IFRS 16 "leases" to maintain the lease
payments in operating cash flow.

Speedboat: new entity that offers a promising or potentially promising product
or service, outside of the Group's current range of activities in a given
country, which receives accelerated development assistance from one or more
associate managers with a view to reaching a critical size within three to five
years.

ABOUT DEVOTEAM

At Devoteam, we deliver innovative technology consulting for business.

As a pure player for Digital Transformation of leading organisations across
EMEA, our 7,200 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 achieved revenues of EUR652.4 million in 2018.

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

Vivien Ravy
Group controlling & investor relations
Director
vivien.ravy@devoteam.com

Perrine Angibault,
Group reporting & investor relations
Manager
perrine.angibault@devoteam.com

Press contacts

Le Public Système Séverine Picault,
s.picault@lepublicsysteme.fr
+33 6 19 45 68 29

www.devoteam.com

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25/10/2021 18:05

DEVOTEAM (EPA:DVT) Devoteam - Press Release on the revenue on the 3rd quarter 2019

Transparency directive : regulatory news

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