Capgemini SE

PAR:CAP

Earnings Call Transcript 2018-Q3

[Operator]

Ladies and gentlemen, welcome to the Capgemini 2018 Q3 Revenue Conference Call. I'll now hand over to Mr. Paul Hermelin, Chairman and CEO. Sir, please go ahead.

[Paul Benjamin Hermelin, Chairman & CEO]

Thank you. Hello, everybody, and thank you for attending the presentation of our third quarter results. As usual, I will give you the highlights of our results; then Carole Ferrand, the Group Chief Financial Officer, will guide you through the details.For those that did not yet have the pleasure to meet Carole, wait a few days, since she will host our Capital Market Day with me, of course, on October 30 in London. I'm also physically here with Aiman Ezzat, and Thierry Delaporte is connected. The 2 of them will participate to our Q&A session at the end of the presentation. So let's start. The good momentum we had seen in H1 continued in the third quarter, and we delivered strong performance this quarter. Our revenue growth is 8.7% at constant currency. Our revenues amounted to EUR 3,228,000,000 this quarter and reached EUR 9.695 million for the first 9 months, for which the growth stands at 8.2%. This growth momentum continued since many quarters. Next, our bookings amounted to EUR 2.808 million this quarter, growing 6.7%. We have our traditional Q3 seasonality in bookings, and we do expect, as usual, a strong fourth quarter. We continue to strengthen our leadership in Digital and Cloud, which is our main growth engine. Our activity in this field grew by above 20% year-on-year, and we believe that strong growth in Digital is a long-term trend. Of course, while investing and innovating in this area, we focus also on the other parts of our portfolio as Application Development and Maintenance, which needs to be continuously upgraded and rejuvenated. To accelerate the buildup of our capability with specific competencies, we continue to execute in 2018 our agenda of targeted acquisition. We acquired LiquidHub, a digital customer engagement firm that specializes in developing and delivering compelling customer experience. LiquidHub is now the backbone of our U.S. Capgemini Invent, our new digital innovation, consulting and transformation global business line launched mid-September. We continued our focus on specialties acquisition. First, we expanded our network of digital design studios with the acquisition of the U.K.-based Adaptive Lab. Since the beginning of the month, we also acquired June 21, a consulting French firm specialized in digital marketing; and Doing, a full-service digital agency based in Italy. Finally, our intent remain to reinforce our capabilities in North America, notably through the acquisition of Leidos, a commercial enterprise security leader with proven critical infrastructure capabilities. And there, we wait for the CFIUS approvals. It showed you that we continue to execute our bolt-on acquisition agenda in a disciplined way, and we will continue. If I turn out to the geographical dimensions of our business, I'm very pleased to see that all our regions grew this quarter. Starting with North America, the cloud continues to drive the demand, and digital continued to grow, both in B2B and B2C. In terms of revenue, we posted a double-digit acceleration this quarter. This is a particularly good performance as the comparison base in Q3 last year is high. We are gaining traction, notably in Financial Service and also in Consumer and Retail, I mean beyond McDonald's, of course. Globally in Europe, strong demand for digital transformation continues as it is now an imperative for CEOs. For example, in marketing management or customer relationship management, digital manufacturing, cybersecurity, data governance and management are also on top of the agenda for our clients. We observed that our clients now choose agile and cloud-based model for their entire IT, not just their front office. And we are well-positioned for this complex transformation project that requires strong consulting, strong digital customer experience, solid DevOps and cloud migration capabilities. On the revenue side, good news in the U.K, which is now back to growth after several negative quarters. We are currently building the U.K. with several large opportunities driven by a desire to be more efficient and responsive to digital drivers, as more connections are made between business and IT. France has a strong progression this quarter with traction on the revenue side in Financial Service, Energy, Utilities and Chemical and Consumer and Retail. Rest of Europe is dynamic on Manufacturing and Consumer and Retail. Finally, second quarter in a row, Latin America is back to growth. If I look at sectors, in terms of revenue, Consumer and Retail is our most dynamic vertical with 16.8% growth in the last quarter, with a strong double-digit growth rate in Continental Europe and in North America. And I underline, it does not come only from internet. Energy, Utilities and Chemicals sector is accelerating with a 9.8% growth, with a strong quarter in France and the U.K., while North America remains flattish. It's a strong acceleration after the 2.9% growth reported in the first semester. Public sector posts another solid quarter at 9.2%, above H1 level, notably thanks to the recovery in the U.K. Our Financial Service strong performance continued with an 8.5% growth of our revenue driven notably by North America, France and Italy. Manufacturing is well-oriented with growth of 7.9%, mainly supported by Continental Europe and also in Asia-Pacific. Lastly, the telco, media and entertainment sector remains mute with a growth below 1%. Some important deals this quarter and to illustrate the current market evolution. Our clients have an insatiable appetite for digital, which means more business side buyers, a need for deep sector expertise and sector-specific solutions. On the other side, technologies are evolving at a rapid pace, and the progress of artificial intelligence, automation and as-a-service as a model are transforming our business. And as digital is maturing, we move from small project to large-scale deployment impacted the competitive positioning of our clients and their business success. Let me mention some of our main wins this quarter further to illustrate our strong Consumer and Retail momentum. A major supermarket chain in France, we are building for them an international customer loyalty system based on e-commerce, Salesforce Service Cloud and marketing cloud solution with optional customization by country. While for a major European airport, we are leading an ecosystem of partners to enable passenger facial recognition, driving customer satisfaction and security. EDF is an excellent example of digital manufacturing product life cycle management service being applied to drive the digital transformation of EDF's nuclear engineering and ecosystem. In partnership with Dassault Systèmes, we have signed a 20-year agreement to standardize, harmonize and modernize nuclear processes and engineering methods, including to design digital twins of EDF's nuclear plants. We continued to leverage our strong financial service sector expertise through new deals this quarter, including: YES Bank, where Capgemini has been chosen as a strategic technology partner for YES Bank, one of the top private sector banks in India; a small, yet important, deal with Crédit Agricole, the first Fahrenheit 212 project sold in France; and in this quarter, we also announced a strong positive development in our relationship with Crédit Agricole; our acquisition of a 20% stake in Azqore, an Indosuez subsidiary specializing in technology outsourcing and banking services for the wealth management sector. This equity investment confirmed the strategic ambition of the 2 groups to set a global benchmark in technology outsourcing services and banking transaction for the wealth management sector and midsized universal banks. Let me conclude with our reaffirmation of our 2018 objectives. As you see, we delivered a very good Q3 performance. For Q4, despite a high comparison basis last year, we target to reach an organic growth of 5%, plus a scope impact of 1.8%. This performance is consistent with our midterm ambition of growing organically between 5% and 7%. In H1, we announced that our growth guidance for 2018 was slightly above 17% -- 7%. With the strong result we just presented, we raise our growth guidance for 2018 to above 7.5% at constant currencies. And we confirm our other objective for 2018: first, to increase profitability with an operating margin of 12% to 12.2%, and we confirm, therefore, our ability to grow while increasing our profitability; and second, to generate an organic free cash flow in excess of EUR 1 billion. I now hand over to Carole, who will guide you through the details.

[Carole Ferrand, CFO & Member of Group Executive Board]

Thank you, Paul, and let's first have a look at the quarterly trends. We delivered a strong growth in Q3, with revenues of EUR 3,228,000,000. The year-on-year growth at constant currency stand at 8.7%. The organic growth was 6.3% in Q3, pretty much in line with the previous quarter's, which is a solid performance considering the tougher comparison basis, notably in North America. Scope effect in Q3 was 2.4 points. With a stronger U.S. dollar, the impact from currency fluctuation was only minus 1 point, leading to a reported growth of 7.7%. Let me add 2 points there. First, scope effect will mechanically come down to around 1.8 points in Q4, notably since Lyons Consulting was already consolidated in Q4 last year. This leads to a full year scope impact of around 1.8 points. Secondly, impact from currency on a full year basis is still expected to be limited to around minus 3 points with a headwind in Q4, probably below 1 point. On a year-to-date basis, the constant currency growth stands at 8.2% and the organic growth at 6.4%. Let's move on to our revenues by regions and focus on constant currency variation. In North America, which represents 1/3 of group revenues at the current U.S. dollar run rate, we achieved a robust growth of 12.9%. Our performance was mainly driven by this quarter by the Financial Services, Consumer and Retail sectors. It is also fueled by the acquisition that we completed in the digital business over the past quarters. U.K. and Ireland revenues, which represent 12% of group revenues, are back to growth as expected, with a 4% increase in revenues. This is driven by an acceleration in the Utilities sector and a rebound in the Public sector. France, with 21% of group revenues, enjoys a robust growth of 6.9% driven by the Energy, Financial Services, Consumer and Retail sectors. The Rest of Europe also delivered a strong growth of 7.7%, with growth around 10% in Germany and Nordics. The Manufacturing, Consumer and Retail sectors were the main driving forces during the quarter. Finally, Asia-Pacific and Latin America reported [ LC ] 7.5% growth in Q3. Latin America growth was led by the Financial Service sector. In Asia-Pacific, which accounts for 2/3 of the region, growth was mainly fueled by the Manufacturing and Public sectors. In a nutshell, all our regions demonstrate a great performance. Now looking at our revenues by business. Consulting Services record growth of 47.2%, which is primarily driven by our acquisitions in the digital business, but this also reflects a positive momentum in all our main regions. Financial Services and Manufacturing were the most dynamic sectors during the past quarter. Technology & Engineering Services report a solid 6.4% growth. North America remained definitely our most active region, but all our other regions have contributed to this growth in Q3. Application Services continued to grow at a robust pace with another quarter of double-digit growth, 10.7%, and with strong achievements in all our geographies. This business line, our largest one by far, broadly benefits from the unfading demand in Digital and Cloud. Our sectorial expertise allowed us to leverage the importance of digital transformation in all our key verticals. Lastly, Other Managed Services are still under pressure, down by 5.8% in the past quarter. The ongoing recovery of our Infrastructure Service business is actually shadowed by a slowdown in the business process outsourcing. Sector-wise, Manufacturing and Financial Services erosion has been partly offset by the rising demand coming from the Utilities. In the traditionally low Q3, bookings amounted this year to EUR 2.8 billion, up 6.7% at constant currency. This brings our 9-month bookings to EUR 9.5 billion, which represents a steady 10% growth at constant currency. And finally, moving to the headcount evolution. As expected and in line with the rest of the industry, attrition is up compared to 2017. We have identified the practices and [ grade, ] which are responsible for this temporary surge, and we have taken measures to reverse it. We expect to progressively see the benefit of these measures in the coming quarters. Total headcount reached 208,800 employees at the end of September, up 5.1% year-on-year. Offshore leverage is up 0.5 points year-on-year but still amounts to 57%. With this, I hand over back to Paul to open the Q&A session.

[Paul Benjamin Hermelin, Chairman & CEO]

So a short presentation. Operator, can you access the first question, please?

[Operator]

[Operator Instructions] We have one question from Mme. Stacy Pollard.

[Stacy Elizabeth Pollard, Head of Software and IT Equity Research]

Yes. A couple of quick ones for me. Just when we look at the nonorganic projection for 2019, can you kind of explain what portion, as we stand today, what is the kind of scope effect as we go into it? Is it the same sort of 1.8% to -- yes, 1.8% that you had for '18? Just trying to get a sense of that. Secondly, how would you characterize cloud adoption in Europe as compared to North America? And then a quick third one, just to -- make sure I understand what you said around Other Managed Services. Did you say that infrastructure was weak, but that some weakness was offset by BPO growth? Is that -- just to understand that.

[Paul Benjamin Hermelin, Chairman & CEO]

Okay. Just -- I will repeat what we said at the Capital Market Day I manned last year and that we will repeat on Tuesday. The target is to spend half of the EUR 1 billion on acquisition. As we buy kind of jewels, EUR 500 million translates in something in the range 1.5% of revenue. You should count that so in the midterm, acquisition should represent 1.5%. So it depends of the year. This year, we had the sizable LiquidHub in March but depends on the place and small acquisition, large acquisition. Long term should be a good 1.5%. On cloud adoption, Thierry, do you want to say something? Thierry is in charge of all our cloud initiative portfolio.

[Thierry Delaporte, Group COO & Member of Group Executive Board]

Yes. Definitely, we see an increase in adoption of the cloud in Europe. It was already true in America. It's accelerating also in Europe.

[Paul Benjamin Hermelin, Chairman & CEO]

And I would like to correct what you understood. We say that infrastructure decline has been stopped. We are now mildly growing because of the growth of cloud integration that offsets progressively some erosion of traditional infra-managed service. While on the BPO side, we move from offshore large-volume contract to RPA process automation with some revenue erosion.

[Operator]

We have another question from Mr. Charles Brennan from Crédit Suisse.

[Charles Brennan, Research Analyst]

Great. I've got a couple, actually. Firstly, just following on from Stacy's observation about 2019, it feels like we've spent 18 months talking about contract ramp-ups and contract ramp-downs, particularly at Aspire. As we move into 2019, is it a relatively clean picture? Or are there specific contract issues that we should be aware of that the store -- the comparatives? And then secondly just on the business, I see that you launched Capgemini Invent a few weeks ago. That seems to be blurring the lines again between IT and marketing and traditional agencies. Can you just update your thoughts on how often you're seeing those traditional agencies in competitive bids? And is this signaling more of an ambition to move into creative in a more substantial way?

[Paul Benjamin Hermelin, Chairman & CEO]

Thank you, Charles. Just clear, no contract issues, no termination. We should point that as being a headwind. So at this stage, we have a stable situation. On -- first, in London, we will show more precisely the scope of Capgemini Invent. But I will repeat, we want to sell to the Chief Marketing Officer, but we will sell our expertise in data, including in marketing, in customer loyalty program, in e-commerce. We do not intend to attack the branding and creative work. When we have creative studio, it is more for user interface and ergonomics. We do not plan to compete with other advertisement agency and creative work, but we want to be directly contracting with Chief Marketing Officer, which is why we are learning the language of these new categories of clients. And there, we will do more upstream work. I just want to stress that digital marketing has been the big motto of the early stage of digital, but Invent has wider digital ambition that covers digital manufacturing and digital operation. But digital is an extension of our former consulting that will be preside next Tuesday, so they do not deliver the large-scale implementation. They do -- they design the digital transformation. They design the prototype. They design the proof of concept, but there is no blurring between Invent and the rest of the group. Okay, Charles?

[Operator]

We have another question from Sir Vos Gerardus.

[Gerardus Vos, Senior Analyst]

Just a few. First, if I look on the line in growth, so if I strip out the impact from Aspire, it looks that it came down by around 1 percent point versus the kind of second quarter, and I was wondering if that was comp or if you see any weakness out there? Secondly, related to that, if you strip out the M&A impact in the U.S., that growth again, looks quite a dramatic slowdown versus the last quarter. Then again, related to the slowdown, digitalization rates weakened in consulting, and I was wondering if there was a specific reason for that or if it's simply a high for demand, what you see in kind of Q4. And then finally, on the measures to address attrition, I guess you pointed to some salary increases. Is that kind of limiting the scope for margin expansion, perhaps going into '19?

[Paul Benjamin Hermelin, Chairman & CEO]

Can I ask Aiman to answer?

[Aiman Ezzat, Group COO & Member of Group Executive Board]

And so North America, North America, we have been pointing out the fact that we had a much lower comparison base last year because last year, in H1, we were flat. And in the second half, we were growing by 10%. So de facto, you have a base effect in North America. So on the paper, yes, there's a deceleration of organic growth in North America, just because of the comparison effect. But it remains sustained overall. I don't see any slowdown from our North American business. It's just a base effect compare, H2 and H1 last year.

[Paul Benjamin Hermelin, Chairman & CEO]

If you remember our July comments, we were a little bit anxious about the impact of the base for comparison because Q3 was already better, and Q4, even better last year. So we are quite happy to maintain something north of 6% growth this quarter with North America organic, being in line with our ambition. I just want to say on utilization consulting, do remember that we have large recruitment in September. It's the season of joining, so it weighs on utilization in the third quarter. And we have a very large recruitment program because the growth is there. On attrition and salary adjustment, no impact on our profitability. It is well targeted. It's what Carole meant by saying there are pockets where we had big resignation serves, so we have addressed them. And the total cost and the total headcount is not significant.

[Operator]

We have another question from Mr. John King.

[John Peter King, Research Analyst]

Yes. Two for me as well. So the first one, Paul, you mentioned the digital projects are now finally getting a bit larger. So I'm just wondering if you could just explain -- dig into that comment a little bit more. I'm also -- I'm thinking about whether you're beginning to be able to offshore some of the workload in those projects, and therefore, what the kind of margins are starting to look like as those projects gets bigger. And then maybe just for Carole, if you could just give us a sense of the organic growth in North America in Q3, just given, obviously as Gerardus was referring to, there's quite a lot of the M&A comes through that region. So that would be useful.

[Paul Benjamin Hermelin, Chairman & CEO]

So first, you are right with the growth of the size of digital project they developed. They are now bringing together the IT department and the business. These are projects that last several quarters where we can bring some of offshore. And I think of a project where we have beaten some pure player of digital with a significant offshore contribution. So that starts to be the case. On the U.S., I would say we will not split a detailed figure, organic and constant currency. If not, we should not guide there. So I block my friend, Carole, to say our goal is to bring the U.S. in line with the rest of the group. So we always said 6% to 8%., and we are quietly getting there.

[Carole Ferrand, CFO & Member of Group Executive Board]

And U.S. is definitely part of the equation.

[Paul Benjamin Hermelin, Chairman & CEO]

Absolutely.

[Operator]

We have another question from Mr. Michael Briest.

[Michael Briest]

Yes. Also, a couple for me. If I look at this evolution in the headcount, offshore ratio has been steady at 57% for a year or so now. If I think about revenue per employee, are you seeing more upside there now? And is this one of the drivers of continuing strong growth in 2019? And then just, Paul, would you say that Q3 was in line with your internal budget or actually came in ahead? And if so, what were the areas that outperformed?

[Paul Benjamin Hermelin, Chairman & CEO]

So thanks, Michael. My first point I want to say that our Indian headcount was quite stable at the start of the year, and we have seen a rebound in the third quarter with some more demand for offshoring. So that's a rather good sign, actually. But you're right, overall -- but I think we said it, if you remember, when Aiman started saying we will grow, and we will move from low single digit to 5% to 7%. It is the end of the cannibalization of revenue. Consequently, the revenue per head is growing. You're absolutely right. And today, the growth is probably led by onshore headcount growth. On Q3, we will not share the budget per quarter. I will just say we had a good summer, notably in Europe. And Aiman insists -- has insisted that we give him the floor.

[Aiman Ezzat, Group COO & Member of Group Executive Board]

Just to add, I mean, the revenue per head is going up. It's going up as well because the mix is moving onshore, and the billing rates are going up onshore. So we said that basically one of the advantages of shift changes and mix is that, overall, even with the same offshore leverage, revenue per head go up because the billing rates onshore are going up because the mix is more towards development and higher-end skills.

[Paul Benjamin Hermelin, Chairman & CEO]

Okay. Michael, could you get it? Okay. Thank you, Michael.

[Operator]

We have another question from Mr. Alexander Tout.

[Alexander William Tout, Research Analyst]

Yes. I mean, when we think about the 5% to 7% target, on the one hand, we have an IT demand environment that is, I guess, probably as strong, if not stronger, than you could have hoped for when you set that target. On the other hand, you've referred to the base effect, the effect that, that's had in the second half and you'll have a whole year of a strong base next year. So I mean, what's the net of that? Can we expect you to be in the upper half of that 5% to 7% bracket? Or does the base effect make that challenging? Secondly, on infrastructure management, was there any Aspire impact in the third quarter there? And on BPO, did that reflect a large contract loss? Or was that more of a generalized effect from RPA, I think you mentioned?

[Paul Benjamin Hermelin, Chairman & CEO]

Frankly, it's too early to speak about 2019. We -- I think I said that we are confident we can deliver our midterm guidance of organic growth, 5% to 7%. I did not say we will move to the top of the range, and it's too early. We'll talk about that in February. I now just say that even in comparison with a very, very demanding Q4, we maintain our confidence to reach 5%. So I think that's notably what the market have not totally understood in July, if I remember. We will -- we have committed to grow, and we think we can grow. But there's no impact of Aspire in infra in the third quarter. And on Business Services, there are, as always, some contract wins, some contract losses. But it's more large contract replaced by small contracts often with the same clients. So it's not a big contract loss. It is the trend that where we replace large offshoring with something far more automated. So we, today, sign new logo, but the size of the new contract is materially smaller than the contract we used to sign a couple of years ago.

[Operator]

We have another question from Mohammed Moawalla from Goldman Sachs.

[Mohammed Essaji Moawalla, Equity Analyst]

Great. Paul, you mentioned at the beginning of the call that cloud and sort of the digital is here to stay. As you think of your business now versus sort of even 5 or 10 years ago where perhaps it was more cyclical and you look at the environment, first of all, what do you see from a macro standpoint in terms of customer decision-making? Clearly, the quarterly numbers don't indicate any slowdown. But how do you think the business can potentially hold up? Or where do you see the risks in the event of a sort of more adverse macro climate next year? And then related to that, in digital specifically, where you think the kind of incremental growth drivers are for you going forward.

[Paul Benjamin Hermelin, Chairman & CEO]

I will start with the digital. I can't imagine, even in front of a slowdown, I can't imagine retailer not having to respond to the Amazon threats. I can't imagine. Of course, they will have to be prudent with their investment, but my view, digital is there in many sectors, automotive with the connected vehicle and autonomous car. I just -- the digital is changing the rules of the business, so you can't spark it. So that will stay. This being said, my view is the group is stronger, notably because if a slowdown occurs, the fact that all our operations are in good shape. Usually, an operation in trouble in a good market really can -- is in risk of collapsing in a slowdown. Today, I will just say we have built a quite strong group. All the regions, most of the sectors, all of the sectors are in good shape. So I think we are significantly more resilient, and we'll probably speak about that next Tuesday. But I don't say that we'll be Nostredame, but if you look at the U.K., where the Brexit threat exists, we have focused Public sector and Energy & Utilities that are relatively immune, not directly impacted by the Brexit threats on European trade. And we will grow, and we will probably accelerate our growth in the U.K. So you need a diversified client base so that you attack that new clients. I will just say, in a slowdown, you must move from -- sometime B2C client to B2B or some Public sector. But I think the group is in a stronger position that -- it's the strongest position I have seen in the group for a very, very long time.

[Mohammed Essaji Moawalla, Equity Analyst]

Okay, great. And maybe if I can follow up, just on Energy & Utilities. I remember sort of at the back half of 2016, you had some setbacks. It seems like that sort of vertical is coming back. Digitization is also quite top-of-mind in those industries. You obviously had the EDF win. I mean, is there sort of an incremental tailwind you see in that vertical versus others?

[Paul Benjamin Hermelin, Chairman & CEO]

If you might remember I have said that it's still flattish in the U.S. So growth in Europe: France, U.K., I said, flattish in the U.K., even if with the barrel oil where it is, there are new investments in oil and gas upstream, so Houston is energized again. And then we signed and we have a pipeline of new investment in drilling. We are very strong in SAP for drilling. So -- but this quarter, it was flattish in the U.S., so potentially some hope there.

[Operator]

The last question is from Mr. Amit Harchandani.

[Amit B. Harchandani, Vice President and Analyst]

Can you hear me?

[Paul Benjamin Hermelin, Chairman & CEO]

Yes, Amit.

[Amit B. Harchandani, Vice President and Analyst]

Just a quick final question from my side. With respect to your operations in India, the rupee has weakened significantly recently. So is there any advice or any color you could give us in terms of how we should think about the potential implications of the rupee for you in terms of your margin guidance going into -- towards the end of this year and potentially into next year, please? And secondly, if I could have another follow-up, if I may. When you look at your performance over the course of Q3, have you seen any shift in decision-making by customers or any linearity as you're going through the quarter? That would be the second one from my side.

[Carole Ferrand, CFO & Member of Group Executive Board]

So on the first point, on the rupee depreciation, in short, no impact of course, in fiscal year 2018. I remind you that given our hedging policy exposure in a given fiscal year is really built up during the 2 or 3 preceding years. So as a consequence, there's obviously no impact on fiscal year 2018. Regarding fiscal year '19, the recent depreciation will contribute to a more favorable hedge rate for 2019. And of course, if the current trend remains true into next year, there will be an impact, a more clearer impact in 2020. That's all we can say right now. But I mean, at the end of the day, we always told you that the currency movements reflect inflation gap in the cost base. So if it's not the case, at the end of day, the selling price ends up adjusting. So it's -- we are just talking about temporary effects, not structural ones.

[Paul Benjamin Hermelin, Chairman & CEO]

Amit, your second question was around -- can you just rephrase it? It's around change in terms of decision-making?

[Amit B. Harchandani, Vice President and Analyst]

What I was really referring to was, as you've gone through the quarter, concerns around macroeconomic developments have certainly stepped up, be it trade wars or anything else. So I was just wondering have you seen any shift in customer decision-making? For example, could you have closed more deals than you ended up closing in the quarter because maybe there was some customer aversion due to macro? So just trying to get a sense of how things have moved.

[Paul Benjamin Hermelin, Chairman & CEO]

I'll give you my usual answer on these things, Amit. There is what everybody talks about and then when we look at our pipeline and we see what's in the pipeline and we see basically are things are slowing down, really, in terms of decision-making? I cannot say we have seen a significant change in terms of decision-making from our clients at this stage, okay. Now there's plenty of noise. But I like to look at the facts, and the facts are not there when we look at what's happening and decisions done by our clients. So we heard a lot of comments about the environment. As you see with our results, we have not seen any slowdown in decision process, and we are quite confident for the fourth quarter. So this closes our call. We will see you Monday night, certainly Tuesday in London, which will give us many occasion to flesh this further, color it and show our pretty solid momentum at this moment of 2018. Thank you, everybody, and see you Monday and Tuesday.

[Operator]

Ladies and gentlemen, this concludes the conference call. Thank you for all your -- for your participation. You may now disconnect.