Capgemini SE (CAP) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Capgemini First Half 2026 Results Webcast and Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Aiman Ezzat.

Thank you. Good morning. Thank you for joining us for our first half results call. I'm joined today by our CFO, Nive Bhagat. So our performance in the first half confirms that our strategy is translating into tangible results. We set out to make AI real for our clients, helping them move beyond experimentation and turn AI ambition into measurable business outcomes. That ambition is now materializing in the market in demand in growth and in market share gains. So I want to focus today on 3 areas. First. One is the strength of our H1 performance and what it says about our AI relevance. The second thing is the new AI value pools that are expanding our addressable market that we pointed to you at the Capital Market Day and then the role of WNS and cloud foreseeing accelerating our growth and strengthening our future positioning. So coming to H1, revenues, they reached EUR 12.08 million, up 11.3% year-on-year at constant currency, enabling us to outperform the market once again. Booking totaled EUR 12.602 billion, representing a book-to-bill ratio of 1.04 and reflecting solid commercial momentum. And this performance demonstrates the strength of our positioning and our growing relevance as organizations increasingly move from AI ambition to AI execution at scale. Now AI has become the leading driver of new demand. To capture this opportunity, we are building AI enterprise hubs around each of our core partners, bringing together our capabilities, assets and expertise to deliver enterprise scale outcome-driven AI transformation. We continue to enrich our portfolio of AI offerings to help our clients accelerate adoption and realize business value faster. We are also benefiting from the acquisition of Cloud4C and WNS, which I will come back to shortly. Now this momentum is translating into market share gains, both in emerging AI-driven demand and with new clients. It's visible with a strong performance of North America and the U.K., both growing around 20% and in strategy and transformation up 9.2% year-on-year. These results confirm that as AI reshaped the enterprise, Capgemini is increasingly the, partner clients choose to turn ambition into measurable business outcomes at scale. Turning to how the market is evolving. Clients continue to invest, but they are becoming increasingly disciplined in how they allocate capital. Across sectors, spending is being directed towards initiatives that deliver clear business value, measurable outcomes and tangible results. Now this is particularly evident in AI. Clients are moving beyond isolated use cases and pilots focusing instead on end-to-end business processes and enterprise-wide transformation program that can generate impact. Their ambitions remains intact, but the approach is increasingly outcome driven. And against this backdrop, the underlying demand drivers remain broadly consistent with previous quarters, and our momentum is the strongest precisely in these areas for strategic investment. A good example is intelligent business operation, our new global business line built around WNS, which delivered double-digit underlying growth in the first half. This validates our conviction that combining AI industry and domain knowledge as well as data operation expertise is becoming critical lever for enterprise transformation. We also continue to benefit from several structural trends that support our medium and long-term growth. Defense & Security, which now represents 7% of group revenue, and more than 11% of our business in Europe maintained strong momentum with double-digit growth in H1, reflecting sustained investment in resilience modernization and strategic autonomy. Also on sovereignty, which has become an increasingly important consideration for clients worldwide, what initially emerged in Europe and later expanded across the Middle East and Asia Pacific is now becoming a far more systematic requirement. Organizations are increasingly assessing sovereignty as part of a major technology decisions, seeking the right balance between resilience risk management, strategic objective and cost efficiency. Geographically, we continue to see encouraging signs across Continental Europe, which accelerated further in Q2 to reach 2.8% constant currency, demonstrating improving momentum across the region. Together, these growth areas provide support, clients continue to invest in transformation and AI but with greater focus on business outcomes, operational impact and value realization. This evolution plays directly to Capgemini's strengths given our ability to combine strategic technology, operation and industry expertise to deliver transformation at scale. Turning now to profitability and cash generation. We remain firmly on track to deliver our full year targets. Our operating margin performance in the first half is fully aligned with the trajectory we set at the beginning of the year. The anticipated margin contraction in France is compensated by North America and the U.K. France is a key focus area for the Fit-for-growth program, which is progressing well. We expect to see the first benefit materialize in the second half of the year, providing a foundation for further margin improvements through 2027. Turning to organic free cash flow at EUR 37 million. performance is fully consistent with seasonality of our business and leaves us on track to deliver our full year objective. Finally, normalized earnings per share came at EUR 5.29 compared with EUR 6 in the first half of last year, we taking higher financing and tax expense. Let me now turn to how we see the market expanding around AI. As we outlined at our Capital Markets Day, we have identified 5 major AI value pools that are reshaping technology and business transformation opportunities. Enterprise tech modernization around helping clients address years of accumulated technology debt and prepare the environment for AI scale, the reset of the tech stack, as application data platform and infrastructure are redesigned for AI native work, the agentic control plane, which provides the governance orchestration, security and observability required to deploy agentic AI at scale. Agentic products and services, enabling not to be new customer experience and offerings and revenue streams and the identification of enterprise processes where AI agents augment and increasingly orchestrate end-to-end business offering. Together, these 5 value pools significantly expand our addressable market and reinforce the relevance of Capgemini end-to-end capabilities across strategy, technology and operations. Now today, I'd like to focus on 2 of them, where we already see strong client demand. So let me start with enterprise technology modernization. Now every organization today wants to become agentic. But before they can become adjusting, they must become AI-ready and most are not. The case of accumulated technical debt have left many enterprises, which fragmented data, legacy systems and complex integration layers, limiting the ability to deploy AI at scale and realize its full value. What is changing is that agentic AI is transforming the economics of modernization itself. Modernization program is too costly or too complex, are becoming economically viable and deliver faster. And initiatives that were often viewed as optional have become strategic imperatives. As a result, we believe the industry is entering into a multiyear modernization super cycle driven by the need to establish a technology foundation required for AI native enterprises. And we are already seeing this reflected in a growing funnel of opportunities. For a major European automotive manufacturer, we are leading the modernization of a large-scale mainframe estate, rehosting and transforming legacy Cobal application onto AWS cloud. For HMRC in the U.K., we are migrating a critical tax platform to SCP S/4HANA on a sovereign cloud, creating a secure, resilient foundation ready to support future AI capabilities. And for AXA, we are delivering an AI-enabled cloud infrastructure modernization program designed to strengthen resilience, increase scalability and support group's long-term transformation agent. Now taken together, this program illustrates a broader shift. I is not only creating demand for new business capability. It's also accelerating the modernization of the technology foundation on which those capabilities depend. Let me now turn to agentic enterprise processes, including intelligent operations. Now this value pool is not about deploying AI for the sake of deploying AI. It is about embedding a few agents into processes that were originally designed for purely human workforce. This is about something much more profound, redesigning how enterprises operate. We work with clients to imagine end-to-end processes create step change in business outcomes and build operating models where humans NPI agents work together seamlessly. These agenic systems can understand context, make decisions, orchestrate workflows and increasingly execute actions autonomously. Put simply, organizations are moving from companies run by people supported by software to processes orchestrated by human AI workforce. Now this is where the real value lies, optimizing the total cost base that bundles operations and technology while improving speed, quality, resilience and customer experience. Now let me illustrate this with 2 examples. For a leading North American insurer carrier, we are delivering a month year transformation of underwriting and claims operation by moving from manual document-intensive workflows to real-time AI-driven decision making, we expect to reduce underwriting cycle time by 30% to 50% and claims cycle time by 20% to 40%, while improving consistency and service quality. And for a major North American automotive manufacturer, we are redesigning, integrating and operating enterprise shared services for an AI-enabled global business services model spanning finance, HR, procurement, supply chain and IT. And by moving from a fragmented operating environment to unified agent-enabled platform, we expect to deliver 50% to 54% productivity improvement over 7 years and generate up to $1 billion in cost savings with additional value creation opportunities in working capital, logistics, warranty management and compliance. Now this example demonstrates why we believe Agentic enterprise processes represented 1 of the largest value pools created by AI. The opportunity is not simply to automate existing activities is to redesign how work gets done across the enterprise and unlock a new level of business performance. We bring naturally to our value-realizing acquisition, and in particular, to WNS and the launch of Intelligent Business Operation, our new global business. Intelligent Business Operation combines 2 highly complementary strengths. On the 1 hand, WNS brings deep industry and process expertise built over decades of designing and operating critical business processes, leveraging an asset-led service model for leading global enterprises. And on the other, Capgemini contributes its global scale leadership in AI technology modernization and business transformation. Together, we have created a unique platform to have clients redesign, transform and operate their most critical processes in the age of AI. This business is organized around industry sectors, allowing us to speak our clients language and address the specific value change, regulatory environments and operational challenges that matter most to them. These capabilities are reinforced by horizontal functional expertise across areas such as finance, procurement, supply chain and HR, supported by proprietary assets, industry-specific platforms and air accelerator that can be deployed repeatedly and case. Now this combination positions us as a partner of choice for intelligent operations. Our ambition is not simply to run processes more efficiently on behalf of clients, it is to deliver measurable business outcomes with clear accountability for performance, productivity and value creation. And what we are seeing since the acquisition closed is strong early valuation of this. Our combined opportunity pipeline has expanded to EUR 13.3 billion reflecting growing client demand for this integrated proposition. The business is delivering double-digit like-for-like growth, demonstrating the strength of the underlying market opportunity and both revenue and cost synergies remain firmly on track, reinforcing our confidence in the value creation potential of this transaction. So more fundamentally, Intelligent Business Operation embodies what we believe is 1 of the most significant shifts taking place in our industry, the convergence of operation, technology and AI. As clients move towards a agentic and outcome-driven operating model, they increasingly need a partner capable of transforming and operating these processes end-to-end and this is exactly the position we have built with Intelligent Business Operations. So let me now turn to our outlook. So given the strong momentum we delivered in the first half, we are raising our revenue growth target for the year. We now expect constant currency revenue growth of 8.5% to 9% compared to our previous guidance of 6.5% to 8.5%. This includes an inorganic contribution narrowed to around 5 points. For the second half, this implies growth of 5.5% to 7% at constant exchange rates despite a significantly higher comparison base in the second half of 2025. Turning to profitability. Our Fit-for-growth program is progressing as planned, and we expect to see the first benefit contribute to margins in the second half. And this supports our confidence in delivering our operating margin of 13.6% to 13.8% representing an improvement of 30 to 50 basis points year-on-year. Finally, we are confirming our organic free cash flow target of approximately EUR 1.8 billion to EUR 1.9 billion for the full year. The overall -- our first half performance reinforces the confidence we expressed at the beginning of the year. We are benefiting from strong momentum in AI-driven transformation. Our recent acquisitions are performing well, and our operation initiatives are progressing according to plan. As a result, we entered the second half with confidence in our strategy, confidence in our execution and confidence in our ability to deliver on our commitments. And with that, I will hand over to Nevi.

Thank you, Aiman, and good morning, everyone. Before going into the details, the key message from H1 is clear. We're progressing in line with the trajectory that we set out earlier this year. Growth momentum is solid. Margin is resilient before the Fit-for-growth benefit, and we continue to make progress in the value pools that underpin our medium-term ambition. Starting with the H1 headline numbers. Revenues reached EUR 12,082 million, up 8.8% on a reported basis and 11.3% at constant currency. On profitability, Operating margin reached 12.5%, up 10 bps year-on-year. This is consistent with what we outlined for the year. A broadly stable margin in H1 with the benefits from our Fit-for-growth initiatives starting to come through progressively in H2 and building further in 2027. As expected, the fixed for growth initiatives also translated into higher restructuring costs. This is the main driver of the EUR 227 million increase in other operating income and expenses, which I will come back to shortly. As a result, group net profit came in at EUR 498 million with basic EPS at EUR 296 Normalized EPS, which excludes other operating income and expense items was EUR 5.29, down 11.9% year-on-year. And finally, organic free cash flow was EUR 37 million, in line with our usual seasonal [indiscernible]. Let's now look at the quarterly growth trend. After a good start to the year, Q2 was also slightly ahead of our expectations, both at constant currency and at constant scope. Constant currency growth reached 11.6% in Q2 and 11.3% for H1. This includes the scope contribution of around 6.5 points in each quarter. Before moving into the detailed H1 analysis, let me briefly touch on 2 factors that will affect reported revenue growth over the next couple of quarters. First, on FX, we continue to turn positive in H2 2026, bringing the full year FX headwind to slightly below 1 point. Second, on scope, the impact will mechanically reduce in Q4 as we annualize the consolidation of WNS and Cloud4C. For the full year, we now expect scope to contribute around 5 points. Turning to Bookings. We reached EUR 12.6 billion in H1 2026, including EUR 6.5 billion in Q2. At constant currency, bookings were up 9.2% in Q2 and 7.8% for H1, which is consistent with the good revenue momentum we are seeing. The book-to-bill was 1.07 in Q2, in line with our historical standards, bringing the H1 ratio to 1.04 overall. This sales momentum is already visible in some of the value pools that support our medium-term growth ambitions. As Aiman mentioned earlier, we notably see good traction in enterprise technology modernization and in genic enterprise processes. Overall bookings growth in generative and agentic AI are double digit. From a sector perspective, Q2 showed a clear improvement on a like-for-like basis. Financial Services, our fastest-growing sector in H1 remains strong. At the same time, sectors at the softer in Q1, notably, consumer goods and retail and manufacturing improved visibly. This performance was also supported by the contribution from the acquisitions of WNS, Cloud4C, which was most visible in services, financial services, energy and utilities and consumer goods and retail sectors. For H1 overall at constant currency, financial services and services remain the most dynamic sectors growing 20.5% and 19.1%, respectively. All other sectors posted mid- to high single-digit revenue growth. Geographically, the underlying growth trends remained robust in Q2, most notably, France returned to growth and rest of Europe continued to improve. North America and the U.K. and Ireland also maintained strong momentum, although slightly below the Q1 levels. The contribution from WNS, Cloud4C remains most visible in North America, the U.K. and Ireland and Asia Pacific. In Q2, this lifted their growth rates close to or above 20% at constant currency. For H1, overall at constant currency, North America was up 19.8% year-on-year with strong underlying performance, mainly supported by financial services and manufacturing. The U.K. and Ireland posted growth of 21.1%. Underlying performance was robust, driven by strong traction in public sector and consumer goods and retail sectors alongside a dynamic financial services sector. France was slightly positive at 0.4%, momentum in Financial Services and renewed growth in manufacturing more than offset weaker activity in the public sector. Rest of Europe grew by 2.6%. Public sector performed well alongside services and consumer goods and retail. Manufacturing remains soft, but the trend is improving. Finally, Asia Pacific and Latin America delivered the strongest growth at 26%, mainly supported by financial services, consumer goods and retail and energy and utility sector. On profitability, North America expanded its operating margin by 20 bps to 16.5%, while the U.K. and Ireland remained very strong at 18.1%. As previously outlined, France and rest of Europe did not yet benefit from the Fit for growth initiatives both regions, therefore, continue to be impacted by pockets of underutilization with operating margin down 230 bps and 80 bps, respectively, to 7.7% and 9.6%. And finally, Asia Pacific and Latin America delivered a strong improvement with operating margin up 410 bps to 14.2%. We also maintained good momentum in Q2 across all business lines, both at constant currency and on a like-for-like basis. Strategy and transformation accelerated to 12.2% from 6.2% in Q1. This is another encouraging sign that clients are looking at AI beyond their technical lens and to a broader business transformation needed to capture its value. And this is exactly where Capgemini's industry expertise and consulting capabilities are particularly relevant. For H1, overall at constant currency, strategy and transformation was 9.2% in H1 2026, with growth across the group's main regions. Applications & Technology grew by 5%, benefiting from the acceleration in technology modernization spending and clients' early investments to build new agentc tech stacks. Finally, Operations & Engineering posted a growth of 24.7% with double-digit like-for-like growth in intelligent business operations, which combines Capgemini and WNS's digital business process services. Coming to head count. Head count closed at 417,600, up 20% year-on-year, mainly reflecting the integration of WNS since Q4 last year. Offshore leverage stood at 66% at the end of June. Now since January 1, head count was down 5,800, including 2,400 onshore. Let me now update you on Fit-for-Growth. The initiatives are progressing according to plan. Important milestones have been passed in key countries and the benefits will start to come through from H2 and continue to build through 2027. As we reshape our capabilities, training and upskills remain at the core of our approach. This is complemented by the normal rotation of skills through attrition, which now stands at 18.6% over the last 12 months. It is also worth mentioning that we are using subcontracting selectively in fast growth areas, where we don't need these capabilities necessarily in the medium term. Let me now walk you through the operating margin bridge. Gross margin was 26.1% in H1, down 30 bps year-on-year. As discussed earlier, this mainly reflects pockets of underutilization weighing on profitability in France and rest of Europe. The benefits from Fit for Growth are not yet visible at this stage, but with important milestones now behind us, they will start to come through from H2 onwards. At the same time, we're seeing the benefit of initiatives launched in 2025 to improve the efficiency of our own operations, notably by simplifying some operating processes. This is visible in selling expenses, which are down 70 bps, while G&A reflects some technology investments and higher WN SG&A mix with temporary increase of remit. Operating margin, therefore, increased by 10 bps to 12.5%, which is consistent with the trajectory we outlined earlier this year for 2026. This puts us on track to margin expansion. We see traction in our AI and innovation portfolio, which is accretive to margins. Fit for Growth is progressing according to plan, and WNS synergies are on track to deliver their targeted run rate by the end of 2027. Together, these levers give us increasing flexibility to reinvest part of the benefits and accelerate our growth profile in the future. As we create more value for our clients, we aim to get our fair share and expand our margins. Moving on to financial result impact. We moved from a net financial income of EUR 16 million in H1 last year to a net expense of EUR 65 million in H1 2026. This was mainly driven by the increase in our financial debt over the period, including the EUR 4 billion bond issuance in September last year. On income tax, the effective tax rate increased year-on-year to 37.5%. This includes some items which means that H1 effective tax rate is not necessarily representative of the full year rate. Now moving from operating margin to the bottom line. As anticipated, other operating income and expenses increased year-on-year by EUR 227 million to EUR 628 million, this increase is mainly driven by restructuring costs, which rose by EUR 210 million in connection with the Fit for Growth initiatives. These initiatives are expected to bring the total restructuring costs to EUR 700 million over 2026, and 2027, and we remain on track for the majority of these soft to be incurred in 2026. This takes operating profit to EUR 878 million or 7.3% of revenues compared with 8.8% in H1 last year. After the financial tax impacts we have just discussed, group net profit stands at EUR 498 million compared with EUR 724 million in H1 2025. The Basic EPS was EUR 2.96 while normalized EPS was EUR 5.29, down 11.9% year-on-year. Turning finally to cash generation and capital allocation. We generated EUR 37 million of organic free cash flow in H1 2026 compared with EUR 60 million in H1 last year. This is in line with our normal seasonal pattern. As usual, cash generation will be heavily weighted towards H2. Now in terms of capital allocation in H1, the group paid EUR 570 million in dividends and used EUR 315 million for share buybacks under its multiyear program. On the balance sheet, we redeemed in full at maturity and EUR 800 million bond in April, which was successfully refinanced in May for a similar amount. We closed H1 with EUR 6.5 billion of net debt compared with EUR 5.3 billion at the end of 2025. So on that note, I will now hand back to you.

Thank you, Nevi. So let's now open the Q&A again, to allow a maximum number of people in the queue to ask questions, I kindly ask you to restrict yourself to 1 question and a single follow-up. Operator, could you please share the Q&A instructions. .

[Operator Instructions] first question, and it comes from the line of Sven Merkt from Barclays. .

Congrats on another good quarter. Maybe you can help us a little bit on the phasing in the second half. The comps are very different between Q3 and Q4. And then secondly, you were very clear that the gross margin was impacted by pockets of underutilization Can you help us here a bit understand how we should develop in the second half. Does the Fit for Growth initiative resolved as completely. Or do you require also some increase in demand in some of these areas where you have the underutilization? .

Yes. Thank you. So I mean, listen, it's clear that we're keeping some level of caution around the fourth quarter, okay? Because of global macro evolution, inflation, what's happening in the Middle East, et cetera. So we're going to remain cautious around Q4. I mean I think we are -- we're definitely going to have the impact of the base effect. Just to give you an idea, we were organic cash minus 0.4% in Q2 last year. We ended at 4%. So of course, it's going to play. But overall, we have good confidence on Q3 and Q4. But yes, comps will play and again, caution around basically what happened on the macro side. .

So Sven, on the gross margin, yes, you're absolutely right. The gross margin is, of course, impacted because of the under absorption in Continental Europe, as I just mentioned. And yes, as we start to see the Fit for Growth or benefits start to kick in, we'd expect gross margin to improve progressively. And I'd also say that will also be further supported by an improved utilization as well as a continued shift to higher value activities.

So yes, you should see improvement in the second half on for the full year compared to H1. .

Next question. And the question comes line of Frederic Boulan from Bank of America.

If I can follow up on the demand side and whether you've seen any macro competitive dynamics you're going to point out? Any comments around how pricing is evolving, considering 2 factors on AI deflation, but also new demand around agency capability and if you can share the level of margins you see on current contract, current RFPs versus where you've been historically, that would be great.

Yes. So I mean, listen, macro dynamics, I haven't seen much of evolution. Of course, there's always noise in the system with the inflation situation with the Middle East. Again, I remain cautious but so far, we haven't seen significant changes in decision-making, okay? I'm not saying a certain thing I've not been delayed by [indiscernible] always some of that where we have some right shift. But there's nothing that's substantial for the moment in the market. . Yes. On the pricing, there's no change. There's anticipation with AI. And yes, clients are anticipating some of the benefits. We price them and then we have to deliver them. And the maturity we're getting bit by bit in terms of how to make that happen is increasing. So I think we -- from my perspective, it's stable. We're seeing stabilization compared to expectations from that perspective. And whatever expectation came into the market, they have already been absorbed. And right now, I don't see an evolution quarter-on-quarter from that perspective. So let's see. Competitive but stable.

Now we're going to take our next question. And the question comes from line of Laurent Daure from Kepler Cheuvreux.

So 2 questions. The first is you said the Fit for Growth plan was on track. Could you be a bit more specific by the end of the year, how much do you think will be completed? And if it's fair to say that still the majority of the savings should come mostly in 2027, given that it's back-end loaded. And the second question is on the bookings that you have delivered in the first half, when you look at them and try to estimate the profitability they will bring in the coming quarters. Do you see some changes? I know you already commented on the pricing side, but overall, do you believe what you book today as at least the same profitability as what you've been delivering in past quarters? .

The first question is for Nive, driving the program. .

Yes. So in terms of the Fit for Growth initiatives, you're right, Laurent, we will see, of course, some benefits start to come through in H2. But as you can understand, because of the nature of some of the Continental European countries, some of the benefits will -- full benefits, you'll start to see more than 2026 than you will see in '26, but the plan is progressing according to plan. And we believe that we will be able to get those benefits in H2, but more in 2027.

So on the profit of new bookings, of course, it's important. We do an estimate always in terms of what we think the profitability of what we sell. We have seen pressure in previous years year-on-year because of the expectations of clients and our estimation of our ability to be able to deliver them. But right now, I think we see stability. That means today, we are pretty much aligned year-on-year in terms of what we see in terms of some of these new bookings cost. I think we can deliver better over time because, again, it's an estimation at the time when we signed the deal, but we don't have -- I mean, we had some erosion in previously and now it really starts to start to stabilize. One because more confident in our ability to deliver some of them. And the second thing is, our portfolio is also improving in terms of what we deliver. So I think we have back the trend and now we are getting more into stabilizing and potentially more positive territory as we move forward, Laurent.

Now we're going to take our next question. And the question comes from the line of Balajee Tirupati from Citi.

Congratulations on the good quarter from my side as well as. One question and 1 follow-up from my side as well, if I may. Firstly, on AI, we have started to see a shift in enterprise approach to option to focus more on efficient way of using the technology. Could you share how that is defining your engagement with customers and implications for IT services industry in general? And second, on the restructuring program, with almost half of the planned restructuring provision made in first half of 2026, could you share if the progress is as expected as you see or you see possibility to do more than you had initially expected?

Okay. On AI adoption. I think was selling, there are different things. First, I think everybody is realizing it's a lot more complex than what people initially thought and quick savings, some agents, small platform and suddenly the way it's going to change. And these people start to realize as we developed at the Capital Market Day, there are a lot of elements. People are first, it was, oh we need to get the data ready, not just a data ready. Now we need to create the contact sentiment, oh, there's a control plane or there is a cyber part or which model we should use or there's a sovereignty aspect. So people realize the complexity of this. And I think this is where our value also increases as people realize the complexity of the transformation, the need to see how to optimize multiple variables. There's a lot of arbitrage around different decisions to be made. And that's more and more our value becomes more pertinent to clients, and they realize that this is not as simple as some people portrayed at the beginning. So what is changing is there is a lot of subject being discussed with clients. because a lot of variables will be taken into account now as you make some of the decisions around AI is which platforms, which LLM, which solution, you go through SLM, you go through LLMs. What you put, how do you manage the control plane, you go for a big control plane you do for control initially by sub process. So there's flurry of decision-making that helps not only ensure that the program is successful, but also ensure that you have something that makes sense financially and from a risk perspective, and we are dealing with these complexities now as we really engage with clients. And that's why you cannot make small sensor saying I'm going to just introduce an agent on the process. Why? Because the amount of risk and complexity you're doing by just trying to do that is so high that it's much better to start looking end-to-end transformation because the amount of variable you have to deal with, whether the introduction agents or doing an intent transformation start to become similar. And that's really where people start realizing. And the second aspect, which I think is important because efforts were experiencing internally as client, it's good to have all of this, but where is the [indiscernible] and we realize that you need to redesign what need to have a very disciplined approach about how you do extract value. If you don't do that, you will not see any value coming out. So the realization of what it requires to drive these areas in terms of transformation and how what you need to put in to be able to capture the value is complex. And I think we're going up the learning curve, and that's what we're bringing to our clients.

So Balajee, coming back to your question on the restructuring. So clearly, we had announced EUR 700 million on over '26 and '27. And we had also said that the sooner we execute, take the sooner the benefits would start to contribute as we like the margin trajectory. So in that context, clearly, whatever we can do this year, we would do. The program, of course, is absolutely progressing to plan. But as I just sort of remind everybody that clearly when we when we book it in the P&L doesn't necessarily mean, of course, the benefits necessarily accrue at the same pace, so it comes later. So we see some benefits in H2. And of course, we will see more benefits as we go into 2027.