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IT Outsourcing

10% organic growth in Q3 for Pentalog

Frédéric Lasnier
Frédéric Lasnier
Chief Executive Officer

Pentalog has reported an organic growth of 10% in Q3 compared to Q3 2011. This performance, more modest than we were accustomed to, can be explained by the fact that an important project was ended in our Delivery Center from Iasi (end of June). The number of commercial offers decreased as the crisis worsened at the beginning of the quarter before rising again in September. Besides, the Group faces a significant delay in developing a new, substantial contract (over 6 months). The cruising speed is usually between 20 to 30% and it is thus divided by almost 5. Q4 could descend even lower. Under these circumstances, the Group slowed the pace of its recruitments in order to maintain high occupancy levels and not reduce its profit in view of being financially ready to counterattack in the course of Q1 2013. Pentalog will carry out a few minor amendments regarding the agency staff depending on each individual situation.

However, this 10% performance is similar to the one obtained by the best players from the field. Many clients have indeed continued to increase the use of Pentalog’s offshore and nearshore delivery centers. Several software publishers and players in the cloud computing (retail, energy management) have substantially increased their orders. The same goes for the players in e-commerce and web services who keep on industrializing their services with Pentalog. The IT branch of a German car manufacturer steadily increases its call for Pentalog’s resources. There are now about ten engineers who have joined their projects in our delivery center from Iasi.

Pentalog has also gained substantial development budgets in the mobile applications. The Group’s clients are getting more interested in Android than in IOS. Thus, several Killer Apps from the fall and winter, in the field of connected objects under Android, would have been developed by Pentalog teams, mainly from Bucharest, Chisinau and Iasi. Several new clients in the industry field have entrusted Pentalog with their embedded developments. Incomes from consulting activities must rise. The first commitments are highly promising: senior DBA, technical Due Diligence, delegate Scrum mastering, system architecture etc. Volumes must be increased, as well as interactions with the offshore-nearshore activities.

At the moment, the efficiency of the consultancy-nearshore development tandem is close to be proved with a new client for significant commitments (Design-Build chain). Pentalog’s Cloud offers, that have already been traded for the existing clients, will be intensely promoted in the course of Q4. The Virtual Fanatic subsidiary stores up the first incomes from the Cloud that the two companies have built together. This is the very first revision of the Group’s forecasts to such a large extent. However, it does not affect our forecast regarding the profit margin that remains unchanged.

See also: Pentalog’s Business Model. The Cloud Software Factory offer. The e-Commerce offer. Pentalog Institute’s Audit and Technology Consulting offer. Pentalog’s financial performances in Q2 2012 and the video (in French). Our clients’ success stories and the videos.


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