EuroBusinessMedia: Altran, the global leader in innovation and high-tech engineering consulting, held its Investor & Analyst Day in Cambridge, UK, to update on the progress of its strategic plan for 2012-2015 at the mid-way point today. Philippe Salle, welcome, you are the Chairman & Chief Executive of Altran. What is your update today on your progress in the strategic plan to 2015?
Philippe Salle: Well, we have first simplified the perimeter in 2011. We have got rid of a big chunk of Altran, which was Arthur D. Little. Then we have reinforced strategic positions in key countries, mainly in the UK and Germany, and we have pushed the strategic position of Altran in Asia, in China, in India, also in Malaysia. After that, globally, we have decided in fact to push two global solutions at worldwide level: Intelligence Systems on one side, and Life Cycle Experience on the other side.
EBM: What would you say are the next top priorities of the strategic plan now to 2015?
Philippe Salle: I think the most important thing for us now is to continue to push offshoring in India, which I think is a very important part of our delivery for our clients. And secondly, the two worldwide solutions should be more autonomous, have their own investment and continue to further push these solutions in the different countries of the Group.
EBM: There are other companies that position themselves in this space which is very fragmented and which sometimes gets confused with the IT Services sector. What would you say differentiates Altran from the competition?
Philippe Salle: First, Altran is a pure player in R&D. We are doing very little business in terms of IT. And second, versus the other R&D players, I think Altran is much more international. The delivery of a project can be done in several countries. And secondly, as more solution-focused versus the clients, we are doing little time and material, but the strategic way we are doing is really to push more and more end projects, solutions to the clients to answer their key questions.
EBM: You held your Investor & Analyst Day in Cambridge, which is the home of your subsidiary, Cambridge Consultants, which you wanted to showcase because you feel that Cambridge Consultants is a jewel within Altran that sometimes doesn’t get the publicity it deserves. What do you feel the market needs to know about Cambridge Consultants?
Philippe Salle: Well, Cambridge is a pure innovation body. It means that they are inventing new ideas or new products for any clients. Altran is more in the design phase; Cambridge is more in innovation. They come from an idea to the product. So for example, they have invented Bluetooth, which of course everybody knows right now in the world. They have made several innovations and have created a lot of companies that are using a lot of devices that they have invented.
EBM: And finally, what are your financial objectives for 2015 and how would you rate your ability to reach them?
Philippe Salle: We have three financial objectives at Group level. The first one is to reach €2 billion in revenues. And for this will need to continue to strengthen the position with acquisitions. We made a big acquisition in Germany last year and we are considering more opportunities right now in different markets. So we are in the middle in there in the sense that organic growth continues, of course, but we will need to continue to acquire companies in key markets: UK, Germany, India, for instance, or the US.
The second objective is profitability. We are looking at at least 11% of EBIT, so roughly operating results devided by our sales. We are not very far from 9% in 2013, coming from 5-6% two years ago, so I definitely think that we are also in the middle and we are quite well placed to reach this objective in the next two years.
The last one is free cash flow. We have given a target of 2-4%. We have been roughly at 3%; we will also be at 3% this year, but we are quite confident that we are going to exceed this target by 2015.
EBM: Philippe Salle, Chairman and Chief Executive of Altran, thank you very much.
Philippe Salle: You’re welcome.