Release Date: December 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Wavestone SA (FRA:2WSA, Financial) reported a significant revenue increase of 69% in Q2 compared to the previous year.
- The company achieved a consolidated revenue of 457.8 million EUR for the first half of the fiscal year, marking a 65% total growth.
- Organic growth in Q2 was 3%, benefiting from a favorable working day impact.
- Demand remains strong in sectors such as energy, transport, and life sciences, particularly in France and Germany.
- Cybersecurity, cloud, and artificial intelligence are highlighted as resilient and promising topics for future growth.
Negative Points
- The market environment is more challenging than anticipated, with lower demand for consulting services across several sectors.
- There is a noticeable slowdown in the banking, automotive, retail, and public sectors, particularly in France.
- The luxury sector has experienced a slowdown due to difficulties in China.
- The company's order book has decreased to 3.7 months of work, down from 4.3 months at the end of the first quarter.
- Achieving the growth target and recurring operating margin of over 13% is becoming more demanding due to the difficult market conditions.
Q & A Highlights
Q: Can you provide an overview of Wavestone's financial performance for the first half of the fiscal year 2025?
A: Laurent, CFO, reported that Wavestone generated consolidated revenue of EUR 225.4 million in Q2, marking a 69% increase compared to the previous year on a pro forma basis. The organic growth in Q2 was 3%, benefiting from a favorable working day impact. For the first half, the consolidated revenue was EUR 457.8 million, reflecting a 65% total growth, with 1% on a constant scope and price basis.
Q: How has the market environment affected Wavestone's business activities?
A: Pascal, CEO, noted that the market is more challenging than anticipated due to lower demand for consulting services across various sectors and increased competition. The slowdown is particularly evident in banking, automotive, retail, and the French public sector. Additionally, the luxury sector has been impacted by difficulties in China. However, demand remains strong in sectors like energy, transport, and life sciences.
Q: What are the key topics and trends currently influencing Wavestone's business?
A: Pascal highlighted that cybersecurity, cloud services, SAP product lifecycle management, artificial intelligence, and sustainability are significant topics. These areas are showing resilience and momentum, although sustainability is still limited in volume.
Q: What is Wavestone's guidance for the fiscal year 2025?
A: The company aims to achieve a recurring operating margin of over 13%, although this target is becoming more challenging due to the difficult market environment. Wavestone plans to provide a more precise update on its annual financial objectives on December 4th.
Q: How is Wavestone managing its human resources in the current economic climate?
A: Laurent mentioned that the staff turnover rate was 13% at the end of September, stable compared to the previous year. The company is maintaining a cautious recruitment approach due to the uncertain economic environment, with a total of 5,875 employees at the end of September.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
