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Pentalog reporting an 18% increase in organic growth in Q4, slightly higher than in Q3

Monica Jiman
Monica Jiman
Chief Customer Success Officer Pentalog Europe & Asia

Q4 is very similar to the previous quarter, being also marked by a strong boost in project renewals for 2012 and fairly higher new biz order intentions.In France, just as in Q3, the growth is mainly due to the extension of existing contracts and very few new contracts signed in Q4. Our strategic trend towards e-Commerce has been strengthening , our efforts and the projects we have undertaken have assured us recognition as European experts in the field. The orders from a web services and e-commerce leader on the French market announced in Q3 have already increased by 25%. In Belgium, we have concluded a new collaboration agreement with with a digital native service company, for several .NET and Sharepoint projects.We have recently signed our first contract with an Italian client in the field of embedded R&D. At the end of 2011, this amounts to 10 countries where we have sold our services this year! The fact that we have local presence in 6 countries and commercial teams in only 3 of them is an unquestionable proof of effectiveness for the commercial virtualization (Digital Salesforce) strategy undertaken in collaboration with Virtual Fanatic.In Germany, 2 new clients have started their collaboration with Pentalog (IT services company). The 1st one is the e-commerce department of one of the largest European media groups, with more than 100,000 employees worldwide and a sales figures of 15 billion euro. They have entrusted us with the development of modules such as “payment gateway”. The 2nd-one, a German IT consulting company, has chosen our services for developing its Business Intelligence applications.Another German software publisher in the health sector, in Microsoft technologies, has practically doubled its investment with Pentalog.The sales activities undertaken in Vietnam and coordinated by the former Delivery Center Manager in Hanoi, Tuan Nguyen Quoc, are beginning to bear fruit. A first project, albeit small, for an insurance broker has been agreed upon at the beginning of this quarter. We target Vietnamese or foreign privately owned companies in the banking, industry, telecommunication and insurance sectors. Furthermore, we are in the process of developing on regional markets such as Japan, Korea, Singapore or Malaysia by preparing a roadshow during the first quarter of next year. We have recently attended the ASEAN forum at Kuala Lumpur. Our aim was to meet not only potential Malaysian clients for nearshoring, but also French-speaking companies who want to enter the Asian market, for offshoring.In accordance with the Q3 forecast, we have reached 700 Pentalog employees in Q4!The delivery center in Cluj will reach a number of 35 employees by the end of January. It is the delivery center which has reached its break-even point in the shortest period of time in our history. Bucharest and Iasi have constantly increased their workforce. Therefore, we have exceeded the number of 700 employees in 2011, without reaching the originally forecast number of 770 employees. This downturn is definitely related to the new economic crisis.Although the growth rate in S2 has reduced by 50% comparing to S1, once again we have maintained a double digit profitability level. Our annual growth under the Pentalog brand name amounts to 26%. It even exceeds 33% if we take into account the Pentalabbs’ (Incubator) contribution. There has been a commercial boost in December. Given the sharp increase of our recommendation rate which has reached a record of 94%, it is by no means surprising to see new leads emerging. We were pleased to welcome two of our major clients who visited us during Q4; they insisted on thanking the teams in person and on presenting their strategies for 2012, including the roles of Pentalog’s teams for accomplishing these strategies.2012 is expected to be a difficult year in our sector, and we approach it with prudent optimism, but with serenity. Our equity capital and our cash position have reached a record level and our profitability level is constantly 30% above the average in our business sector. Our key strategic elements remain focused on innovation, quality and ongoing effort towards customer satisfaction. We always bear in mind that these clear policy lines enabled Pentalog to outpace all its competitors in terms of growth and profitability in 2009, a dreadful year for many companies in the IT sector.

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