European leader in consulting since its merger with the German Q_PERIOR, Wavestone recently published 2023/24 results beyond expectations, propelling its stock price to a record level. We met its founding director Pascal Imbert as well as Laurent Stoupy, in charge of the Group’s finances, during the annual conference organized by Portzamparc.
Pascal Imbert, how is the integration of the German firm Q_PERIOR going?
“As good as possible. While we could have feared a fluctuation at the commercial level at Q_PERIOR given the strong mobilization of its management on the merger, the firm demonstrated great resilience in its activity in the last quarter. This is explained in particular by the strong dynamics of the insurance and automobile sectors where German manufacturers continue to invest heavily in electric and connected vehicles. Moreover, turnover remained low at Q_PERIOR, at one level. annual rate of 11%, less than Wavestone’s 14%. Regarding commercial synergies, the teams are collaborating more and more, have already won around ten joint projects and pipe common commercial is very well stocked. At the end of May, we switched all teams to the Wavestone brand and brought together almost all of the more than 5,500 people from the new group in Paris in an exciting atmosphere.”
How is this acquisition transformative for Wavestone?
“This acquisition has allowed us to rise to the level of the major European consulting firms. We are one of the three European pure players with Bearing Point and Roland Berger. We are also in competition with six large international firms such as the Big Four, Accenture and Cap Gemini This change in category should allow us to win larger and more international projects with our existing clients, and to win over new global clients. The Group’s leading client is Deutsche Bahn (7% of turnover). transforms in depth to integrate more digital at all levels of its organization and to prepare for competition We have a visibility of 4-5 years on this project similar to what we have been doing for the SNCF for several years and which represented. 3% of our 2023/24 turnover. Strong nationally and now at European level, Wavestone must now strengthen its position in the United Kingdom and the United States to occupy a global position. “
Do you confirm that you are aiming for annual growth of 15% in the coming years?
“This is the level of growth that we are aiming for in the medium term. It is made up of organic growth in the medium term, of around 7% to 8% per year, and an additional amount from growth external Given the current wait-and-see attitude of most of our customers and despite a doubling of our commercial effort compared to 2022, we are expecting organic growth of 3% to 5% for the 2024/25 financial year. We do not expect any acceleration before the start of 2025. In addition, additional growth from acquisitions will remain modest over the current financial year. On the one hand, our priority is integration and continued growth. the improvement in the profitability of Q_PERIOR On the other hand because we prefer to have more visibility on the recovery to embark on new large-scale acquisitions. The targets currently studied are below €40 million in turnover. business The positive point is that the prices expected by sellers are more reasonable than in recent years and that the structuring of the financing of the Q_PERIOR operation has not compromised our acquisitive capacity. We can today mobilize €200 million in debt without exceeding a leverage ratio of 2x our gross operating surplus. The United Kingdom or the United States are among our priority research territories. “
Which sectors and areas of expertise remain dynamic currently?
“The most dynamic sectors currently and in which we are redoubling our commercial efforts to seek growth are Insurance, Transport, Energy and Luxury. As for expertise, the most dynamic are cybersecurity, the cloud , SAP consulting, sustainable development and AI.
How do you position yourself on artificial intelligence?
“At this stage, projects focused on this theme have only cost around €20 million for the 2023/24 financial year. However, we are currently working on around fifty projects, most of them in the start-up phase, and our turnover could at least double this year Wavestone is very well placed and identified on this theme given our technological DNA, where other large consulting firms are better identified on organizational subjects. , our positioning at the strategic and organizational level gives us an advantage over ESNs. The challenge today is for companies to move on, within 2 or 3 years, to an in-depth transformation of processes via AI and for. this we can, among other things, count on our partner Microsoft who has chosen us to support the deployment and acceleration of the adoption of Microsoft 365 Copilot within French companies. AI must also irrigate our way of working. work internally and, along with sustainable development, constitutes a priority in terms of training all of our consultants. “
Breakdown of proforma activity, financial year 2023/2024 (source: company)
You emphasize the sustainable development aspect of your missions. Can you explain its scope to us?
“Sustainable development is becoming an integral part of all our clients’ projects. Soon, not alerting the client to ESG topics or implications as part of a mission could become a failure of advice. Even if, in the short term, it matters Given economic constraints, sustainable development budgets have shifted from long-term sustainable development strategy towards compliance, particularly in terms of CSRD, our conviction is that these subjects will lead to a transformation of organizations as important as digitalization.”
Where is the Group’s managerial transition? How do you engage the next generation of leaders?
“Announced in 2021, the step back within the general management of Patrick Hirigoyen and myself was postponed a little with the acquisition of Q_PERIOR but the horizon remains 2025 or 2026. In fact, it is a question of bring in leaders from internally, including from Q_PERIOR. The major objective is to bring about a new general management by 2025 or 2026, by which time I will propose to take on the role of non-executive Chairman. Capitalistically, the group’s main shareholders, who represent just over 60% of the capital, entered into a lock-up commitment for 4 years at the end of 2023 following the acquisition of Q_PERIOR. We are interested in our directors through plans. performance shares and bonuses based on growth in operating income.
How do you plan to achieve 15% operating margin, and by what time frame?
“We are targeting 15% operating margin, a level already materialized in 2023/24 excluding Q_PERIOR and Aspirant Consulting, over the entire 2026/27 financial year. We therefore have around two points of operating margin to achieve. part by significantly reducing subcontracting at Q_PERIOR (from >30% to
Simplified income statement, financial year 2023/2024 (source: company)
The author of this article is a personal shareholder of the company
