H1 2018 results
Presentation for Analysts & Investors
ContentsI. H1 2018 highlights
II. Detailed performance
III. Outlook
IV. Conclusion
H1 2018 results2
01H1 2018 highlights
H1 2018 results3
H1 2018 Performance
Highlights
H1 2018 revenue:
€625m
+11.3% - organic growth of
+5.2%, o/w +4.2% in Q2
Return to strong growth
in France
Organic growth of +4.1%, of
which +2.9% in Q2
International activities
continue to drive
performance
+29.8% - organic growth of
+8,4%, o/w +8.0% in Q2
Sales activity still
sustained (B2B 1.23 in France)
Operating margin up
17% yoy
(+0.2bp as a % of revenue)
Constant transformation
of our portfolio and
delivery
Return to intensive M&A
activity, crowned by
Realdolmen transaction
International activities
now account for around
40% of pro forma
revenue
2020 objectives intact
4H1 2018 results
H1 2018 Performance
Key figures
Revenue Operating margin Net profit/(loss)
H1Reported
H1Organic
H1 2018€m/%
% change H1 2018 % change
France439.3+5.0%
+4.1%16.53.8%
+5.8%+0.1pp
International186.3+29.8%
+8.4%13.17.0%
+34.6%+0.2pp
Group625.5+11.3%
+5.2%29.64.7%
+16.9%+0.2pp
7.3 -12%
5H1 2018 results
H1 2018 Performance
Recovery in France confirmed
6
• Revenue in France rose to €439.3m from €418.5m at 30
June 2017, representing reported and organic growth of
5.0% and 4.1%, respectively.
• +4.4% in Q2, o/w 2.9% on an organic basis, comparable to
Q1 (excluding calendar impact) which benefited from 1
extra working day than the year before.
• Strong performance in Services business on the back of
growth in the activity rate and stable Average Day Rates
(ADR). Major contracts signed with top and mid-market
clients in the industrial and agro-food sectors.
• Consolidation of Business Solutions thanks to more
sustained growth and strong order book.
• Software Business revenue down in H1 due to high basis of
comparison but upturn expected in H2.
• Very intense sales activity in first-half making for 12-month
rolling book-to-bill ratio of 1.23 at 30 June.To
tal re
ven
ue &
gro
wth
Org
an
ic g
row
th
Comments
H1 2018 results
H1 2018 Performance
Operating margin growth in France
7
Op
era
tin
g m
arg
in
Comments
H1 2018 results
2016 2017
H1 H1H2 H2
H1/H
2 s
easo
nal im
pact
ch
an
ge
Slight increase in H1 Operating Margin (+€0.9m and
+10bp yoy) driven by:
• strong growth in Services and better positioning of
Business Solutions
• recruitment trends which remained favourable over the
period with the hiring of 1,144 new employees making
for a net increase of +171 in the total headcount
despite continued pressure in the recruitment market
and high turnover
Despite:
• a weaker performance in the Software division in H1
before expected upturn in H2
• continued investments, notably in Solutions, Digital and
Outsourcing
2018
H1
16.5
25,6 28,7 34,7
42,2 48,0
53,4 49,3
15,6
48,2
16,5
5,5% 5,8% 6,3% 6,7% 7,0% 7,0%
5,9%
3,7%
5,7%
3,8%
2010 2011 2012 2013 2014 2015 2016 H12017
2017 H12018OM (€m) OM (%)
H1 2018 Performance
International business: a key contributor
8
Comments
Revenue of €186.3m (29.8% of Group sales in H1), up 29.8%, of
which +8.4% on an organic basis. Operating margin also rose
sharply to €13.1m, equivalent to 7.0% of revenue (€9.7m and 6.8
% respectively in H1 2017)
• Iberia-LatAm: Revenue of €120.6m, up +9.8%, of which
+7.1% like-for-like. Operating margin narrowed to 6.1% from
6.7% in H1 2017 which benefited from a very high basis of
comparison, notably in Portugal. Operating margin in Spain
up sharply. Strong growth in LatAm.
• Northern and Eastern Europe (Benelux, Poland and
Switzerland): €55m revenue in H1 (vs. €26.1m in H1 2017)
underpinned by Realdolmen in June and strong organic
growth (+9.7%) reported by core activities in Belgium, Poland
and Switzerland. Operating margin surged to €5m from €2.2m
in H1 2017.
• Africa and Rest of the World : H1 2018 revenue of €10.7m, of
which €8.8m generated in Africa. Strong growth of +53.1% of
which +29.9% on an organic basis, coupled with acquisitions
of Cynapsys in Tunisia and Value Pass in Morocco.
Org
an
ic g
row
th
Inte
rnati
on
al
OP
In
tern
ati
on
al
H1 2018 results
H1 2018 Performance
Continued increase in value
9H1 2018 results
0.5
0%
0.3
7%
0.1
4%
0.3
6%
0.5
1%
0.1
3%
0.3
7%
0.5
1%
0.1
1%
0.3
8%
0.5
2%
0.1
0%
T & M F I X E D - P R I C E P R O J E C T S S O F T W A R E
2009 2016 2017 H1 2018
3.8
%
0.8
%
1.6
%
1.1
%
0.6
% 0.8
%
1.4
%
3.2
%
0.8
%
2.1
%
0.7
%
1.2
%
0.7
%
1.2
%
3.2
%
0.8
%
2.1
%
0.7
%
1.1
%
1.0
%
1.1
%
2.8
%
1.1
%
2.3
%
0.9
%
0.9
%
1.0
%
1.0
%
2009 2016 2017 H1 2018
› Growth in high value-added activities› Despite the Group's strong growth...
› … increased weight of Consulting, Expertise and Projet consulting in mix
02Detailed performance
H1 2018 results 10
Detailed results
Successful international strategy
11H1 2018 results
Detailed results
Strong growth in operating aggregates
12
Revenue : +11%
EBITDA : +16%
Operating Margin: +17%
Net operating income: +2%
Net income: - 12%
EPS : - 11%
Higher level of non-current elements:
- costs related to acquisition of four companies, including Realdolmen
- positive non-current elements booked in H1 2017 (notably the reversal of a provision for tax risk)
H1 2018 results
Summary income statement 06.30.18 06.30.17 ∆ ∆%
(in millions of euros)
Revenue 625,5 562,1 63,4 11%
EBITDA 41,2 35,4 5,8 16%
6,6% 6,3% 0,3% 5%
Depreciation and amortization net 11,5 10,0 1,5 15%
Operating margin 29,6 25,3 4,3 17%
Amortization of assigned intangible assets (1,2) (1,3) 0,1 -8%
Goodw ill impairment losses - - -
Other operating income and expenses (8,9) (4,9) (4,0) 80%
Operating Profit 19,5 19,1 0,4 2%
Financial result (3,0) (2,4) (0,6) 27%
Income tax expense (9,2) (8,4) (0,8) 9%
Net consolidated income 7,3 8,4 (1,0) -12%
Earning per share -0,01 -11%0,11 0,13
Detailed results
Strong performance despite seasonal trends
13
Net operating income
• PPA: -€1.2m
• Restructuring: -€4.7m
• Other: essentially acquisition costs
Financial result:
• Non-cash items:
-€0.3m (IFRS, discounting of LT loans, retirement accretion)
Income tax:
• of which CVAE: -€5.3m
- Restructuring controlled (-8%)
- Other income and expenses in H1 2018 impacted by costs related to acquisitions carried out over the period, whereas H1 2017 benefited from provision reversals
- The financial result factors in refinancing undertaken following the Realdolmen transaction (borrowing costs spread over the duration of the loans)
- A slightly higher tax charge, and unrecognised tax losses of €26m.
H1 2018 results
Income statement 06.30.18 06.30.17 ∆ ∆%
(in millions of euros)
Revenue 625,5 562,1 63,4 11%
OPERATING MARGIN 29,6 25,3 4,3 17%
Operating margin (% of revenue) 4,7% 4,5%
Amortization of intangibles identif ied on acquisitions (1,2) (1,3) 0,1 -8%
Restructuring costs (4,7) (5,1) 0,5 -9%
Gains (losses) on disposals (0,4) (0,1) (0,3) 485%
Goodw ill impairment losses - - - na
Other operating income and expenses (3,9) 0,3 (4,1) -1626%
OPERATING PROFIT 19,5 19,1 0,4 2%
Income from cash and cash equivalents 0,3 0,0 0,3 1510%
Cost of gross debt (3,0) (1,8) (1,3) 72%
COST OF NET DEBT (2,7) (1,7) (1,0) 55%
Other f inancial income (expenses) (0,3) (0,6) 0,3 -51%
Income tax expense (9,2) (8,4) (0,8) 9%
NET CONSOLIDATED INCOME 7,3 8,4 (1,0) -12%
Group stockholders' equity 7,1 8,1 (1,1) -13%
Non-controlling interests 0,3 0,2 0,1 35%
0,13 -0,01 -10%Diluted earnings per share (in euros) 0,11
0,2 point
Detailed results
Cash flow from operating activities controlled
14
• Net debt: €319m versus €138m at end-2017
• Increase of €181m
• Cash flow before financing costs and tax: €31m
(+15%)
(EBITDA up at €41.2m from €35.4m in H1 2017)
• WCR: -€16m
• Seasonal impact
• Tax paid: -€8m
• Capex: -€18m in line with 2017
• M&A costs: -€155m of which €138.8m for
Realdolmen, net of cash acquired
• Dividend payout: -€10m in line with 2017
H1 2018 results
(in thousands of euros) 06.30.18 06.30.17
Consolidated net income before income from discontinued operations 7 344 8 354
Depreciation, amortization 11 173 8 242
and other non-cash items
Fair value adjustments 789 275
Gains or losses on asset disposals 412 57
Dilution gain or losses - -
Operating cash flows after cost of net debt and income tax expense 19 718 16 928
Costs of net debt (adjusted for fair value adjustements) 1 977 1 620
Cost of sw aps 21 19
Tax charge 9 162 8 386
Operating cash flows before net cost of debt and income tax expense 30 878 26 953
Tax paid (7 949) (6 593)
- Change in w orking capital requirements for operations (15 745) (28 685)
I- NET CASH FROM OPERATING ACTIVITIES 7 184 (8 325)
- Disbursements as a result of acquisition of intangible assets (13 205) (12 198)
- Disbursements as a result of acquisition of property, plant and equipment (4 595) (4 449)
+ Proceeds on disposals of intangible assets and property, plant and equipment 65 16
- Disbursements as a result of acquisition of f i nancial investments 435 80
+/- Impact of changes in consolidation scope (154 810) (14 018)
+/- Changes in loans and advances (1 081) (1 492)
II - NET CASH FLOW FROM/(USED IN) INVESTING ACTIVITIES (173 191) (32 061)
+ Proceeds on issue of shares
• Subscribed to by the equity holders of the parent - 38
• Subscribed to by the minority interests of consolidated subsidiaries - -
+/- Repurchases and sales of treasury shares 96 (9)
- Dividends paid during the f inancial year - -
• to the equity holders of the parent (9 975) (9 963)
• to the minority interests of consolidated subsidiaries (44) -
+ New borrow ings note 6 252 499 -
- Repayment of borrow ings (80 935) (9 610)
+/- Change in factoring draw dow ns note 6 22 559 40 754
- Interest paid note 6 (1 078) (1 130)
- Cost of sw aps (21) (19)
III - NET CASH FLOW FROM/(USED IN) FINANCING ACTIVITIES 183 101 20 061
+/- Effect of changes in foreign exchange rates (922) (174)
CHANGE IN CASH FROM CONTINUING OPERATIONS 16 172 (20 499)
Detailed results
Balance sheet impacted by acquisitions but still solid
15
Equity
• Distribution of -€10m in H1 2018
• IFRS 15 booking entries: -€8.7m
• Net result: €7.3m
Goodwill: +€142m, including €132m related to
Realdolmen acquisition
Net debt: €319m
Gearing: 104%
Covenants complied with
H1 2018 results
Consolidated statement of financial position 06.30.18 12.31.17 ∆ ∆%
(in millions of euros)
Goodw ill 425,1 283,1 142,0 50%
Fixed assets 119,7 102,6 17,1 17%
Current and non current assets 655,7 533,5 122,2 23%
Cash and equivalent cash 74,7 29,7 45,1 152%
Total assets 1 275,2 948,9 326,4 34%
Net equity - Group share 306,8 321,1 (14,3) -4%
Minority interests 1,0 0,9 0,2 18%
Borrow ings 393,4 167,8 225,6 134%
Current and non current liabilities 543,8 451,9 91,9 20%
Financial liabilities and current provisions 30,2 7,2 23,0 319%
Total liabilities and shareholders equity 1 275,2 948,9 326,4 34%
Net Debt 318,7 138,2 180,5
Gearing 104% 43%
Working capital * 124,3 111,3 12,9
*excluded Income taxe debt and receivables
Consolidated statement of changes in equity
(in millions of euros) Group NCI Total
12.31.17 321,1 0,9 321,9
IFRS 15 (8,7) (8,7)
12.31.17 restated 312,4 0,9 313,3
Common stock issued - - -
2017 net income 7,1 0,3 7,3
Dividend paid (10,0) - (10,0)
Recognised income (expense) (0,4) - (0,4)
Treasury stock 0,1 - 0,1
Valuation of share-based payments 0,1 - 0,1
Change in consolidation scope (0,7) (0,1) (0,8)
Change in translation reserve (1,9) 0,0 (1,9)
06.30.18 306,8 1,0 307,8
12.31.17 138 156
Change in net cash position (16 172)
Repayment of borrow ings (80 935)
Syndicated loan 171 899
Bridge 85 000
Change in factoring draw dow ns 22 559
Other (1 852)
06.30.18 318 655
Debts on acquisition - Realdolmen 21 671
Other 1 493
Net debt for covenant 341 819
03Outlook
H1 2018 results16
› France› Although tension in the recruitment market persists the Group should benefit from the
different campaigns launched
› Thanks to strong sales growth, the Group confirms its 2018 forecast targeting organic growthat least in line with 2017 (restated for the 3SI impact)› 12-month rolling B-to-B ratio: 1.23
› Pipeline stable
› Backlog : +60% y-o-y
› The Group is pursuing its transformation strategy aimed at seizing opportunities related tothe IS transformation of our clients and the emergence of new usages, both for our TopAccounts and the Mid-Market, while continually improving our delivery efficiency
› International› Acquisition and integration of Realdolmen in the BeNeLux; Gfi's largest operation to date,
boosting pro forma revenue to over €1.4bn
› Growth remains strong in the Iberian-LatAm zone, driven by latest series of acquisitions(Efron, ROFF, Gesfor)
› Rapid growth in Eastern Europe (Poland and Romania)
› Seeking external growth opportunities in these markets
17
2018: revenue and operating margin growth in all zones
H1 2018 results
Segment trends
18H1 2018 results
› A globally dynamic market› Growth of 5.5% for our TOP 35 accounts
› Strong performance in most sectors
› EUC and TME down but more volatile due to high level of client concentration. Solid bookings
› Robust sales growth in all sectors (DSE performance underpinned by impact of large 2017 contracts)
› Breakdown by segment relatively stable over six months
6%
9%
-2%
14%15%
-1%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
20
40
60
80
100
120
140
160
180
200
Banking &Insurance
Distribution& Services
Energy,Utilities &Chemicals
Industry,Aerospace &
Transport
Public Sector Telecom &Media
Revenue at end-June (Group)
9%
-71%
63%
40%
-5%
21%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
0
20
40
60
80
100
120
140
160
Banking &Insurance
Distribution& Services
Energy,Utilities &Chemicals
Industry,Aerospace &
Transport
Public Sector Telecom &Media
Booking at end-June (Group)
% ch
ange
% ch
ange
29%
17%10%
15%
17%
12%
BFA D&S EUC IAT SPU TME
19
Acquisitions: Strategic build-up of our SAP activities in North Africa
H1 2018 results
› 68 consultants
› 2017 revenue: €5m
› Accretive performance
› Casablanca / Tunisia
Gold SAP Partner in North and West Africa
BUSINESSES
Clients Expertise
Synergies:› Strong growth in Africa with more
than 50 SAP projects carried out in 10 countries
› Build-up of nearshore capacity for Group's large-scale projects
Takeover bid: summary and update
20Presentation of the transaction
Key characteristics
Takeover Bid Friendly takeover in cash for 100% of the share capital of
Realdolmen
95.75% of shares tendered
Mandatory delisting
Squeeze out procedure launched after the results of takeover bid
Takeover bid launched 23 July 2018 closes 10 August 2018
Realdolmen shares to be delisted from the Euronext Brussels Stock Exchange at end of takeover bid
Provisional timetable
Summary review of Realdolmen
21Presentation of the transaction
› An independent ICT expert based in the BeNeLux region, Realdolmen was created in 2008 out of the mergerbetween Real Software and Dolmen
› €245m revenue in 2017, of which around 90% in Belgium
› Reference player on the mid-market with an integrated offering
› More than 1,500 clients in the BeNeLux region and over 1,450 professionals
› Six offices in Belgium and Luxembourg
Presentation of the transaction 22
The combination of Realdolmen’s capacities and Gfi’soperations in Belgium and Luxembourg has created:
- a new and solid European champion with revenue of morethan €1,400m and a wide European coverage: strongpresence in all regions and in particular France (€900m),Spain (€250m) and the BeNeLux region (€280m);
- a larger group with complimentary portfolios , both interms of clients and business offers, which offerssignificant synergy opportunities in the Public Sector,Distribution, Industry and Banking, notably byaccompanying our clients, which are by nature seeking toexpand in the BeNeLux;
- capacity to expand in the Netherlands in certain fields.
An international-growth acquisition
Gfi Informatique intends to focus on business continuity and developing joint actions in services offerings by
leveraging the skills and expertise of both companies
58%23%
9%
5%3%2% France
Iberia
Belux
Americas
Africa
Other Europe
Others
A major step in the international expansion and profile transformation of the Group
Breakdown of headcount at 30 June 2018
04Conclusion
H1 2018 results23
› With Mannai’s backing, Gfi has implemented its 3-year strategic plantargeting revenue of €2 billion, including strong international growth andoperating margin in line with sector leaders.
› Roadmap based on:› Market-share gains in our current regional scope
› Increased value via the integration of high value-added solutions› An organisation that enables the Group to better seize the growth potential of our
markets› Build-up of our recruitment strategy› Improved delivery efficiency (automation, near/offshoring, etc.)
› Potential sources of growth include:› Major operations in Europe (Iberia, BeNeLux, Italy, etc.) that will enable the Group to
target a leadership position› The addition or strengthening of high value-added Skills Centres (Digital
Transformation, Big Data, etc.) that will be leveraged at Group level› The build-up of the Group’s new markets offer strong growth potential and favourable
competitive environments (LatAm and/or Eastern Europe)
24
Conclusion
New expansion phase
H1 2018 results
FRANCE | SPAIN | PORTUGAL | BELGIUM | SWITZERLAND LUXEMBOURG | UK | POLAND | ROMANIA | MOROCCO | IVORY COAST | ANGOLA | USA | MEXICO | COLOMBIA | BRAZIL