F-1 1 tv502411-f1.htm FORM F-1 tv502411-f1 - none - 34.4730034s
As filed with the Securities and Exchange Commission on September 24, 2018
Registration No. 333-      ​
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Valtech SE
(Exact name of Registrant as specified in Its charter)
Not Applicable
(Translation of Registrant’s name into English)
England
(State or other jurisdiction of
incorporation or organization)
7371
(Primary Standard Industrial
Classification Code Number)
NOT APPLICABLE
(I.R.S. Employer
Identification Number)
46 Colebrooke Row
London, N1 8AF, England, United Kingdom
+44 (0) 20 7014 0800
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Valtech Solutions, Inc.
416 West 13th Street, Suite 309
New York, NY 10014
+1 212-366-1057
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Richard D. Truesdell, Jr.
Byron B. Rooney
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
David J. Goldschmidt
Ryan J. Dzierniejko
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.☐ __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐ __________
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐ __________
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☑
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered
Proposed maximum aggregate
offering price(1)(2)
Amount of
registration fee
Class A ordinary shares, par value €0.01 per share
$ 100,000,000 $ 12,450
(1)
Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
(2)
Includes Class A ordinary shares subject to the underwriters’ option to purchase additional Class A ordinary shares.
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Subject to completion, dated September 24, 2018
Prospectus
            shares
[MISSING IMAGE: lg_valtech.jpg]
Class A ordinary shares
This is the initial public offering, or IPO, of Valtech SE, a European public limited liability company (Societas Europaea, or SE) with our registered office in England. We are offering a total of            Class A ordinary shares of Valtech SE.
The underwriters may also purchase up to          Class A ordinary shares within 30 days to cover over-allotments, if any.
Prior to this offering, there has been no public market for our Class A ordinary shares. We expect the initial public offering price will be between $          and $          per Class A ordinary share. We intend to apply to list our Class A ordinary shares on the Nasdaq Global Market under the symbol “VTEC.” Upon completion of this offering, SiegCo SA, our controlling shareholder, will hold           Class B ordinary shares, which will entitle it to       % of the combined voting power of our ordinary shares (or       % if the underwriters’ option to purchase additional Class A ordinary shares from us is exercised in full). As long as SiegCo SA owns at least 50% of the voting power of our company, we will be a “controlled company” as defined under Nasdaq rules. We have no current intention to rely on the controlled company exemptions to the Nasdaq rules, but as a foreign private issuer expect to rely on the exemptions provided to foreign private issuers.
Upon consummation of this offering, we will have two classes of ordinary shares: our Class A ordinary shares and our Class B ordinary shares. The rights of the holders of Class A ordinary shares and Class B ordinary shares will be identical, except with respect to voting, conversion and transfer restrictions applicable to the Class B ordinary shares. Each Class A ordinary share will be entitled to one vote. Each Class B ordinary share will be entitled to 10 votes and will be convertible into one Class A ordinary share automatically upon transfer, subject to certain exceptions.
We have reserved up to       % of the Class A ordinary shares offered by this prospectus for sale, at the initial offering price, to certain persons associated with us. See “Underwriting.”
Neither the U.S. Securities and Exchange Commission, or the SEC, nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
We are an “emerging growth company” under the U.S. federal securities laws and will be subject to reduced public company reporting requirements. Investing in our Class A ordinary shares involves risks. See “Risk factors” beginning on page 18 of this prospectus.
Per share
Total
Initial public offering price
$       $      
Underwriting discounts and commissions(1)
$       $      
Proceeds, before expenses, to Valtech SE
$       $      
(1) See “Underwriting” for additional information regarding underwriting compensation.
Our Class A ordinary shares will be ready for delivery on or about            , 2018.
Joint Book-Running Managers
J.P. Morgan
Morgan Stanley​
Co-Managers
Cowen
Oddo BHF
William Blair​
           , 2018.

Table of contents
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F-1
Unless otherwise indicated or the context otherwise requires, all references in this prospectus to “Valtech” or the “Company,” “we,” “our,” “us” or similar terms refer to Valtech SE, together with its subsidiaries. Unless otherwise indicated, references to our "ordinary shares" include our Class A ordinary shares and Class B ordinary shares. References to “Pre-IPO ordinary shares” refer to ordinary shares before the creation of our dual class of ordinary shares.
We and the underwriters have not authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we may have referred you. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. Neither we nor the underwriters are making an offer to sell the Class A ordinary shares in any jurisdiction where the offer or sale is not permitted. This offering is being made in the United States and elsewhere solely on the basis of the information contained in this prospectus. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of the Class A ordinary shares. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus.
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For investors outside of the United States: We have not, and the underwriters have not, done anything that would permit this offering or possession or distribution of this prospectus or any free writing prospectus we may provide to you in connection with this offering in any jurisdiction where action for that purpose is required, other than the United States. Persons outside of the United States who come into possession of this prospectus or any such free writing prospectus must inform themselves about, and observe any restrictions relating to, the offering of the Class A ordinary shares and the distribution of this prospectus and any such free writing prospectus outside of the United States.
Trademarks
We own or have rights to trademarks, service marks and trade names that we use in connection with the operation of our business, including our corporate name, logos and website names. Other trademarks, service marks and trade names appearing in this prospectus are the property of their respective owners. Solely for convenience, some of the trademarks, service marks and trade names referred to in this prospectus are listed without the ® and ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to our trademarks, service marks and trade names.
Presentation of financial and other information
All references to “U.S. dollars,” “dollars” or “$” are to the U.S. dollar. All references to “Euros” or “€” are to the Euro. See “Exchange rates” for information regarding exchange rates for Euros since the year ended December 31, 2013. The translation rate applied to Euro amounts that have been translated into U.S. dollars was one Euro per $1.1677, the exchange rate last reported by the U.S. Federal Reserve as of June 30, 2018.
We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.
Financial statements
We maintain our books and records in Euros and prepare our consolidated financial statements in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or the IASB.
The financial information contained in this prospectus includes our consolidated financial statements as of December 31, 2016 and 2017 and for the years ended December 31, 2015, 2016 and 2017, which have been audited by Deloitte & Associés, as stated in their report included elsewhere in this prospectus, and our unaudited interim consolidated financial statements as of June 30, 2018 and for the six months ended June 30, 2017 and 2018.
Our fiscal year ends December 31. References in this prospectus to a fiscal year, such as “fiscal year 2017,” relate to our fiscal year ended on December 31 of that calendar year.
Non-IFRS financial measures
This prospectus contains certain financial measures that are not required by, or presented in accordance with, IFRS, namely, Adjusted EBITDA, Adjusted Net Income, Adjusted earnings per basic share and Adjusted earnings per diluted share. We refer to these measures as “non-IFRS financial measures.” We consider these non-IFRS financial measures to be useful measures for management and investors to facilitate operating performance comparisons from period to
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period by excluding potential differences caused by variations in capital structures, tax position, depreciation, amortization and certain other items that we believe are not representative of our core business. The non-IFRS financial measures we use herein are defined by us as follows:

“Adjusted EBITDA” is defined as net income (loss) attributable to equity holders of the parent before income (loss) from discontinued operations, cost of gross financial debt, income tax expense, depreciation and amortization, goodwill impairment, share-based payment expense, restructuring costs, costs related to mergers and acquisitions, currency gains and losses and other financial gains and losses.

“Adjusted Net Income” is defined as net income (loss) attributable to equity holders of the parent before amortization of acquired intangibles, share-based payment expense, restructuring costs and costs related to mergers and acquisitions.

“Adjusted earnings per basic share” is defined as Adjusted Net Income divided by the weighted average number of ordinary shares issued and outstanding.

“Adjusted earnings per diluted share” is defined as Adjusted Net Income divided by the weighted average number of ordinary shares issued and outstanding, accounting for the potential dilutive impact of outstanding equity or equity-linked instruments.
We believe that these non-IFRS financial measures can provide useful information to investors, securities analysts and the public in their review of our operating and financial performance. Adjusted EBITDA and Adjusted Net Income are widely used by investors and securities analysts to measure a company’s operating performance without regard to items that can vary substantially from company to company and from period to period, depending on their accounting and tax methods, the book value of their assets and the method by which their assets were acquired. However, this information should be considered as supplemental in nature and is not meant as a substitute for our results of operations as determined in accordance with IFRS. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as comparative measures. For more information regarding these non-IFRS financial measures, including reconciliations to comparable IFRS financial measures, see “Prospectus summary—Summary financial and other information”, “Management’s discussion and analysis of financial condition and results of operations—Key Performance Indicators” and “Management’s discussion and analysis of financial condition and results of operations—Quarterly financial information.”
Presentation of industry and market data
In this prospectus, we rely on, and refer to, information regarding our business and the markets in which we operate and compete. The market data and certain economic and industry data and forecasts used in this prospectus were obtained from internal surveys, our market research, governmental and independent industry publications, surveys and forecasts prepared by industry consultants and other publicly available information.
Certain market share information and other statements presented herein regarding our position relative to our competitors are not based on published statistical data or information obtained from independent third parties, but reflect our best estimates. We have based these estimates upon information obtained from our clients, trade and business organizations and associations and other contacts in the industries in which we operate.
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Prospectus summary
This summary highlights information contained elsewhere in this prospectus. This summary may not contain all the information that may be important to you, and we urge you to read this entire prospectus carefully, including the “Risk factors,” “Business” and “Management’s discussion and analysis of financial condition and results of operations” sections and our consolidated financial statements and notes to those statements, included elsewhere in this prospectus, before deciding to invest in our Class A ordinary shares.
Our Company
Valtech is a next-generation business transformation services provider focused on helping medium and large organizations as they embrace the digital age. We provide a streamlined portfolio of integrated offerings, encompassing strategy, design, technology and marketing. We engineer experiences across the whole customer journey and build and run our clients’ critical customer experience and e-commerce platforms while maintaining their brand consistency.
As our clients seek to effectively compete in the digital age, we provide tools and data-driven solutions that allow our clients to redesign their customer journeys and provide the experiences that consumers have come to expect, which we refer to as closing the “experience gap.”
We define “business transformation” as the approach of envisioning, creating, selling, delivering, servicing and consuming products and services with increased agility, time-to-market, reliability and scalability. This new approach impacts many aspects of our clients’ operating models, from the way investment decisions are made, measured and managed to the sales experience and engagement offered to our clients’ customers.
Our end-to-end offerings span all areas of business transformation across the digital world. We help our clients design and map the right interactions and touchpoints across the customer journey, focusing on enhancing the end-user experience. We use existing data to provide our clients with a comprehensive view of their customers’ behaviors, allowing them to better target and personalize consumer experiences with their brand. Using this targeted approach, we design, build and integrate customer experience platforms that access multiple digital as well as physical channels, or touchpoints, in a consistent manner, while increasing the interactions and touchpoints and continuously enhancing our clients’ knowledge of their customers. In addition to our ability to design and build these platforms, we provide a wide array of ongoing digital services (such as channel and campaign management, content creation, data and analytics, personalization and automation of services, as well as conversion rate optimization) to help our clients operate and maximize the value of these platforms.
We offer deep domain expertise across select industry verticals, including retail, automotive, government, financial services, travel and hospitality, media and healthcare. We understand the trajectories and trends of the verticals we service and deliver critical solutions to help keep our clients current and competitive within their respective industries. By focusing on developing key solutions across select verticals, we have developed proprietary tools and methodologies, intellectual property and capabilities that we believe can enhance the performance of our clients’ platforms while continuously advancing our own technological capabilities. We believe our innovative thinking, ability to develop comprehensive and integrated solutions and deep domain expertise in offering ongoing business transformation services provides us with superior operational skills that differentiate us in the marketplace.
Multi-national companies require trusted partners with the global reach and local presence to engage with them at their local offices, while simultaneously implementing a comprehensive business transformation coordinated across all regions in which they operate. Our
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multidisciplinary teams of engineers, programmers, business consultants, creative designers and marketers located, as of June 30, 2018, in 39 offices based in 16 countries across five continents consistently work together and collaborate to orchestrate omni-channel customer journeys that are tailored to the specific geographies of multi-national corporations. Our teams operate locally, in real-time and in the same languages as our clients. In doing so, we create higher-value partnerships and foster longer-lasting relationships with our clients.
Our clients primarily consist of medium and large corporations located across Europe, North America, South America, Asia and Australia, and include companies like Audi, Rolex, L’Oréal, Henkel, Comcast and Westcon. We define medium and large organizations as organizations with $200 million to $500 million and greater than $500 million in annual revenue, respectively. We believe our success in building an attractive client base in the selected industries we serve demonstrates the value proposition of our offering and the quality of our services.
We believe we have become one of the leading independent digital business transformation services providers in the world based on the composition of services we offer, with 2,416 employees as of June 30, 2018, and broad geographic and industry diversification. Our total revenue has grown from €184.9 million ($200.8 million) in the year ended December 31, 2015 to €207.8 million ($219.3 million) in the year ended December 31, 2016 and to €233.7 million ($280.9 million) in the year ended December 31, 2017, representing year-over-year annual growth rates of 12.4% and 12.5%, respectively. Our total revenue has grown from €114.7 million ($130.9 million) for the six months ended June 30, 2017 to €136.6 million ($159.5 million) for the six months ended June 30, 2018, representing a 19.1% increase.
On a constant currency basis, our total revenue growth was 15% for the year ended December 31, 2016 as compared to the year ended December 31, 2015, 14% for the year ended December 31, 2017 as compared to the year ended December 31, 2016 and 13% for the six months ended June 30, 2018 as compared to the six months ended June 30, 2017.
Market overview
Technology innovation and a shift towards a consumer-centric economy, the “economy of experience,” have created disruption for companies as they look to embrace the digital era that is driving business transformation. We believe the most significant challenge companies face today— particularly large and established global businesses—is the constant state of change in this new economy of experience, as it requires organizations to innovate and grow since cost-cutting measures are no longer sufficient to compete and drive value. Furthermore, the pressure for companies to become more agile and cope with digital disruption is increasing due to the rapid emergence of new technologies and shifting consumer demands which are giving rise to new forms of competition. The next era of the digital revolution requires business leaders to transition from a product-centric to a consumer-centric focus in order to increase the economic value of their goods and services for their customers.
As this transition continues, companies need to transform their operating models in order to find new ways of interacting with customers. In its 2016 CMO Spend Survey, Gartner, Inc., or Gartner, reported that marketing budgets increased for three consecutive years between 2014 and 2016, comprising on average 10%, 11% and 12% of companies’ revenues for 2014, 2015 and 2016, respectively. In its 2017 CMO Spend Survey, Gartner reported that marketing budgets as a percentage of revenue had declined to 2015 levels, but that two-thirds of company chief marketing officers, or CMOs, were planning to increase investment in digital marketing in 2018. We believe the impact of the new digital era on the economic performance of companies, while already significant, is at its early stages. As a result, we believe that marketing budgets, and more
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specifically the digital components of these budgets, are likely to continue increasing. Furthermore, the level of digital maturity of our clients is evolving at a slower pace than the disruption they experience, as they are burdened by legacy systems and siloed organizational structures. This, coupled with the arrival of the economy of experience, has created a large and growing market opportunity for a new type of service provider that has a deep understanding of these emerging technologies and related market trends and can offer a comprehensive approach to business transformation.
According to Gartner CMO Strategy Survey 2017, only half of CMOs regard themselves as effective at acquiring and managing technology. As the level of digital maturity of organizations increases, we believe executives will realize that they can no longer address IT, creative design and strategic thinking independently. Rather, they will have to look at these elements holistically in real-time and adapt to the increasing pace of innovation.
This comprehensive approach results in a large addressable market that represents the convergence of three large and growing sub-markets in which we operate. According to the 2017 IBIS World Global Management Consultants Industry report, the market for strategy and industry expertise is expected to grow at a 1.8% CAGR from 2017 to 2022, with the market representing a $660 billion opportunity by 2022. According to the 2018 IDC Worldwide Services Forecast, the market for services spending is expected to grow at a 4.3% CAGR from 2017 to 2022, representing a $1.2 trillion opportunity in 2022. According to the 2018 Technavio Global Ad Spending Market report, the market for creative / digital marketing is expected to grow at a 11.7% CAGR from 2017 to 2022, with the market representing a $362 billion opportunity by 2022.
We believe that as companies continue to embrace these market trends and adopt these emerging technologies, service providers that can combine strategic thinking with deep industry expertise, world-class engineering and creative design capabilities, such as Valtech, will be able to take advantage of a significant growth opportunity.
The Valtech approach
Delivering a unique and personal customer experience requires a vast range of capabilities. We have designed a new way of approaching business transformation. It is a digital-first approach that is based on our belief that companies of today need to be able to adapt to constantly evolving technologies and customer demands. Our approach allows our clients to seize the varied opportunities that digital technologies offer, providing rapid adaptability to changing economic conditions and granting them the ability to measure results, all while keeping their consumers at the center of every business strategy.
Based on our vision, we utilize a “Build” and “Run” approach to create effective multi-channel marketing, centralizing digital brand identity, product information and data on consumers on one unique platform.
Our Build and Run approach is designed around all different phases of the business lifecycle:
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discover new business opportunities based on unmet user needs;
2.
prove a critical hypothesis that underpins a business case;
3.
create digital products and services and the underlying customer experience platform; and
4.
grow business outcomes by running and optimizing the platform, content and campaigns.
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We have structured our services and solutions in a way that allows us to build long-standing and trusted relationships with our clients as they embark on their business transformations. To supplement our offerings, we partner with select players in the digital marketing ecosystem, in particular with software providers and innovative start-ups, helping us attain insights into future technologies, research and development projects and key consumer trends. We believe that these strong relationships provide us a more precise view of future technologies and consumer trends. Our partners provide fast and privileged access to new customers, which we believe will contribute to our future growth. This tailored approach to partnerships is pervasive across all of our offerings.
Our competitive strengths
We believe the following strengths will form the basis of our continued growth:

Comprehensive and seamless integration of strategic consulting, creative design and innovative technology capabilities across the business transformation process;

A vision rooted in innovation and technology, which allows us to consistently offer cutting-edge solutions for our clients;

Deep domain expertise across key verticals;

Deep and established relationships with clients; and

Global multidisciplinary teams with diverse skill sets.
Growth strategy
Medium and large organizations are increasingly challenged by disruption as we move deeper into the new digital age. By designing, building and running the platforms that deliver the most relevant and memorable customer experiences, we seek to be the partner of choice for companies embarking on their transformation journeys into the digital age. The key elements of our strategy for achieving our growth objectives are as follows:

Grow revenue with existing clients;

Target and acquire new clients by leveraging our global / local model;

Capitalize on the business opportunity in North America; and

Execute on a disciplined and impactful M&A strategy.
Risks associated with our business
Our ability to implement our business strategy is subject to numerous risks that you should be aware of before making an investment decision. These risks are described more fully in the section entitled ‘‘Risk factors,’’ immediately following this prospectus summary. These risks include the following, among others:

Our revenue is highly dependent on clients located in Europe and North America. Any weakening of economic conditions in these markets may adversely affect our business, results of operations and financial condition.

We may not be able to achieve anticipated growth.

Rapid growth may strain our limited resources, and a failure to manage this growth could have a material adverse effect on the quality of our services and client support.

Our revenue depends to a large extent on a limited number of clients and industries.

If we do not continue to innovate and remain at the forefront of emerging technologies and related market trends, we may lose clients and may not remain competitive.
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If we are unable to attract and retain highly-skilled IT professionals, or adapt the size of our teams in response to changes in demand, we may not be able to maintain client relationships and grow effectively.

Increases in wages and other compensation expense for our IT professionals could prevent us from sustaining our competitive advantage.

Our profitability will suffer if we are not able to maintain our resource utilization levels and productivity levels.

Our competitive position and future prospects depend on our senior management’s expertise, and our business operations may be severely disrupted if we lose their services.

If the pricing structures that we use for our client contracts are based on inaccurate expectations and assumptions regarding the cost and complexity of performing our work, our contracts could be unprofitable.
Company history and corporate structure
Valtech was founded in 1993 in France as an IT consultancy specializing in delivering complex software through early adoption of object-oriented developments and pioneering Agile methodologies. In its 2004 report, Offshore Outsourcing and Agile Development, Forrester Research, Inc., or Forrester, featured Valtech as one of the first companies to successfully apply Agile development processes to offshore projects. The Company was listed on the Paris stock exchange in 1999 and thereafter continued building a global presence and expanding its capabilities through several acquisitions.
In March 2010, our Chief Executive Officer, Argentinian entrepreneur Sebastian Lombardo, partnered with our Co-Chief Operating Officers, American executive Tomas Nores and French digital entrepreneur Olivier Padiou. Together, with the financial support of an affiliate of Verlinvest SA (a Belgian family-owned investment holding company currently holding direct and indirect ownership of Valtech, as discussed in “Principal shareholders”), they took control of the Company. Since then, alongside a talented management team, our focus has been on redefining our strategic objectives, divesting non-core assets and conducting targeted acquisitions geared towards complementing a comprehensive portfolio of offerings capable of addressing our clients’ critical customer engagement and e-commerce needs.
In December 2015, an initial tender offer to take the Company private was launched. A subsequent offer was launched in February 2017, successfully resulting in SiegCo SA, a holding company that is majority held by Verlinvest SA, controlling, together with Verlinvest SA, 100% of Valtech’s outstanding shares as of the end of March 2017.
Further expansion in the North American market is a key part of our growth strategy and we therefore consider the United States to be a strategically advantageous jurisdiction in which to list our Class A ordinary shares. We believe that our U.S. listing will aid us in building global recognition of our brand, providing us access to larger, top-tier customers.
In November 2014, we adopted the corporate form of a European public limited liability company (Societas Europaea, or SE), pursuant to the laws of the European Union, and became Valtech SE. Our principal executive offices are located at 46 Colebrooke Row, London, N1 8AF, England, United Kingdom. Our telephone number at this address is +44 (0) 20 7014 0800. Our registered office is located in England, where we are currently registered under the number SE000106. Our principal website is www.valtech.com. The information contained on our website is not a part of this prospectus.
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Recent developments
As part of our acquisition strategy, we are currently considering the acquisition of a digital transformation services company with offices located in the East Coast of the United States (the “Target”). We have entered into a letter of intent with the potential seller of the Target, and expect to progress due diligence on the Target shortly. Should we be successful in acquiring the Target, we expect the closing of such acquisition to occur in the fourth quarter of 2018. There can be no assurance, however, that our negotiations and due diligence efforts concerning the Target will result in an acquisition by the Company.
Negotiations concerning the acquisition of the Target and the terms of any such acquisition are in their early stages. Accordingly, there can be no assurance as to the purchase price of the Target. However, we currently expect the purchase price in millions of U.S. dollars to be in the mid-to-high single digits. There are a number of factors that impact purchase price as described below and, as a result, the actual purchase price for the acquisition of the Target, to the extent consummated, may materially differ from our current estimate. We do not expect the Target to constitute a “significant” acquisition as defined by the SEC’s Regulation S-X.
If successful in acquiring the Target, we intend to use available cash and our Class A ordinary shares as consideration. We currently expect the portion of the purchase price to be paid in the form of Class A ordinary shares to be approximately 25% of the purchase price. The Class A ordinary shares issued as part of the purchase price would be subject to a contractual lockup extending until at least 180 days after the date of this prospectus. In addition, we would expect to issue a number of warrants and/or other equity-based awards under our 2018 Plan to employees of the Target upon consummation. Lastly, the acquisition terms may include an earn-out component depending on the performance of the Target measured one year after the acquisition.
There are a number of factors that may impact our successful consummation of the acquisition of the Target or any other acquisition we may consider, including competition and the potential risks inherent in assessing the value, strengths, weaknesses, contingent or other liabilities, and potential profitability of acquisition candidates, and in integrating the acquired company. If our assessments, including the financial evaluation, of the Target prove to be inaccurate, we could overpay, achieve fewer potential synergies, and incur additional future costs. See “Risk Factors—Certain factors relating to our business and our industry—We may not be able to successfully identify and acquire target companies or integrate acquired companies into our company, and we may become subject to certain liabilities assumed or incurred in connection with our acquisitions that could harm our business, results of operations and financial condition.”
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Company organizational chart
A simplified organizational chart showing our directly and indirectly wholly-owned subsidiaries and majority-owned joint venture is set forth below. We also conduct direct operations in the United Kingdom and, through our Paris branch, in France.
[MISSING IMAGE: tv490061_chrt-org.jpg]
Implications of being an emerging growth company
As a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified exemptions from various requirements that are otherwise applicable generally to public companies in the United States. These provisions include:

an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; and

to the extent that we no longer qualify as a foreign private issuer, (1) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (2) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation, including golden parachute compensation.
We may take advantage of certain of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.07 billion in annual revenue, have more than $700 million in market value of our ordinary shares held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of the above-described provisions. For example, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. Given that we currently report and expect to continue to report under IFRS, as issued by the IASB, we have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required by the IASB. We have taken
7

advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies. References to an “emerging growth company” in this prospectus shall have the meaning associated with that term in the JOBS Act.
8

The offering
This summary highlights information presented in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all the information you should consider before investing in our Class A ordinary shares. You should carefully read this entire prospectus before investing in our Class A ordinary shares, including “Risk factors” and our consolidated financial statements.
Issuer
Valtech SE
Offering
We are offering          Class A ordinary shares.
Offering price
We expect that the initial public offering price per Class A ordinary share will be between $      and $     .
Over-allotment option
We have granted the underwriters the right to purchase up to an additional          Class A ordinary shares from us within 30 days of the date of this prospectus, to cover over-allotments, if any, in connection with the offering.
Listing
We intend to apply to list our Class A ordinary shares on the Nasdaq Global Market under the symbol “VTEC”.
Use of proceeds
We estimate that the net proceeds to us from the offering will be approximately $      , based upon an assumed initial offering price of  $      per share, which is the midpoint of the price range set forth on the cover of this prospectus. We intend to use the net proceeds from this offering for general corporate purposes, such as for working capital and for potential strategic acquisitions of, or investments in, other businesses or technologies that we believe will complement our current business and expansion strategies. See “Use of proceeds.”
Class A ordinary shares
outstanding after this offering
Immediately after the offering, we will have       Class A ordinary shares outstanding (          Class A ordinary shares if the over-allotment option is exercised in full).
Class B ordinary shares to be outstanding after this offering
    Class B ordinary shares.
Total ordinary shares to be outstanding after this offering
    ordinary shares (          ordinary shares if the over-allotment option is exercised in full).
Voting rights
Upon consummation of this offering, the holders of our Class A ordinary shares will be entitled to one vote per share, and the holders of our Class B ordinary shares will be entitled to ten votes per share.
Each Class B ordinary share may be converted into one Class A ordinary share at the option of the holder.
9

If, on the record date for any general meeting of the shareholders, the number of Class B ordinary shares then outstanding is less than   % of the aggregate number of all ordinary shares then outstanding, then each Class B ordinary share will automatically convert into one Class A ordinary share.
In addition, each Class B ordinary share will convert automatically into one Class A ordinary share upon any transfer, except for certain transfers to other holders of Class B ordinary shares or their affiliates as described under “Description of share capital and articles of association—Conversion and restrictions on transfer.”
Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all matters unless otherwise required by law.
Upon consummation of this offering, assuming no exercise of the underwriters’ option to purchase additional Class A ordinary shares, (1) holders of Class A ordinary shares will hold approximately      % of the combined voting power of our outstanding ordinary shares and approximately      % of our total equity ownership and (2) holders of Class B ordinary shares will hold approximately      % of the combined voting power of our outstanding ordinary shares and approximately      % of our total equity ownership.
If the underwriters’ option to purchase Class A ordinary additional shares from us is exercised in full, (1) holders of Class A ordinary shares will hold approximately      % of the combined voting power of our outstanding ordinary shares and approximately      % of our total equity ownership and (2) holders of Class B ordinary shares will hold approximately      % of the combined voting power of our outstanding ordinary shares and approximately      % of our total equity ownership.
The rights of the holders of Class A ordinary shares and Class B ordinary shares are identical, except with respect to voting, conversion, and transfer restrictions applicable to the Class B ordinary shares. See “Description of share capital and articles of association—Share capital” for a description of the material terms of our ordinary shares.
Dividend policy
We do not intend to pay dividends on our ordinary shares. We plan to retain any earnings for use in the operation of our business and to fund future growth.
Directed share program
At our request,        have reserved for sale, at the initial public offering price, up to     % of the Class A ordinary shares offered by this prospectus for sale to
10

certain persons associated with us. Any purchases of reserved shares by these persons would reduce the number of shares available for sale to the general public. Any reserved shares that are not so purchased will be offered by the underwriters to the general public on the same terms as the other shares offered by this prospectus. See “Underwriting.”
Lock-up agreements
We have agreed with the underwriters, subject to certain exceptions, not to offer, sell or dispose of any of our ordinary shares or securities convertible into or exchangeable or exercisable for any of our ordinary shares during the 180-day period following the date of this prospectus. Members of our board of directors and our executive officers, as well as substantially all of our existing shareholders, have agreed to substantially similar lock-up provisions, subject to certain exceptions.
Risk factors
See “Risk factors” and the other information included in this prospectus for a discussion of factors you should consider before deciding to invest in our Class A ordinary shares.
The number of ordinary shares to be outstanding after this offering is based on           Pre-IPO ordinary shares outstanding as of June 30, 2018 (on a pro forma basis, after giving effect to our             -for one share split) and excludes the following:

          Class B ordinary shares issuable upon the exercise of outstanding equity warrants, or warrants, as of June 30, 2018 having a weighted-average exercise price of  €3.43 ($4.01) per share;

        Class B ordinary shares issuable upon the exercise of warrants that were issued after June 30, 2018 having a weighted-average exercise price of  €17.43 ($20.35) per share;

        Class B ordinary shares that are expected to be issued as part of the purchase consideration for our acquisition of Non-Linear Creations Inc.;

        Class A ordinary shares underlying        restricted stock units granted to employees, non-employee directors, consultants and advisors in connection with this offering;

        Class A ordinary shares that may be issued under our 2018 Omnibus Incentive Plan, which we expect to become effective upon the completion of this offering; and

the deferred shares that will exist upon completion of this offering, when each existing ordinary share with a nominal value of €0.125347364 is subdivided into           Class B ordinary shares with a nominal value of €0.01 per share and deferred shares comprising the share capital not represented by the Class B ordinary shares (the “deferred shares”); the deferred shares will have no voting rights and effectively no economic rights and it is anticipated that, in accordance with their terms, the deferred shares will be transferred to Valtech SE following completion of this offering in accordance with applicable law and canceled.
Except as otherwise indicated, all information contained in this prospectus (other than the financial statements included herein) assumes or gives effect to:

a      -for one split of our ordinary shares to create Class B ordinary shares with a nominal value of €0.01 per share, which will occur immediately prior to the completion of this offering;
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the adoption of our amended and restated articles of association immediately prior to the completion of this offering;

the creation of our dual class of ordinary shares as a result of the issue of Class A ordinary shares, which will occur upon completion of this offering;

no exercise of the outstanding warrants described above after June 30, 2018;

no exercise by the underwriters of their option to purchase up to an additional           Class A ordinary shares to cover over-allotments, if any, in this offering; and

the transfer to Valtech SE and cancellation of the deferred shares.
12

Summary financial and other information
The summary income statement and balance sheet data of Valtech, presented in Euros, as of December 31, 2016 and 2017 and for the years ended December 31, 2015, 2016 and 2017 is derived from our audited consolidated financial statements prepared in Euros and included elsewhere in this prospectus. The summary income statement and balance sheet data of Valtech, presented in Euros, as of June 30, 2018 and for the six months ended June 30, 2017 and 2018 is derived from our unaudited interim consolidated financial statements prepared in Euros and included elsewhere in this prospectus, which, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the information for the periods presented. The results of operations for the six months ended June 30, 2017 and 2018 have been prepared by, and are the responsibility of, our management and have not been audited by our independent registered public accounting firm. The historical half-year results of prior periods are not necessarily indicative of the results of operations for a full year or any future period.
We maintain our books and records in Euros and prepare our consolidated financial statements in accordance with IFRS as issued by the IASB.
This financial information should be read in conjunction with “Presentation of financial and other information,” “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements, including the notes thereto, included elsewhere in this prospectus.
Year ended December 31,
Six months ended June 30,
2015
2016
2017
2017
2018
(in thousands)
Euros
Euros
Euros
U.S. dollars
(convenience
translation)*
Euros
Euros
U.S. dollars
(convenience
translation)*
Consolidated statements of income (loss):
Revenue
184,119 204,589 233,414 $ 272,558 114,673 136,469 $ 159,355
Other revenue
787 3,212 281 328 14 132 154
Total revenue
184,906 207,801 233,695 272,886 114,687 136,601 159,509
Cost of sales
(122,032) (135,872) (154,368) (180,256) (76,688) (88,184) (102,972)
Gross margin
62,874 71,929 79,327 92,630 37,999 48,417 56,537
Commercial costs
(11,462) (13,900) (16,523) (19,294) (8,071) (8,984) (10,490)
Administrative costs
(40,921) (43,259) (50,625) (59,115) (25,153) (29,251) (34,156)
Restructuring costs
(921) (1,360) (1,627) (1,900) (557) (158) (185)
Other income and expenses
428 (214) (126) (147) (893) (152) (177)
Goodwill impairment
(1,141) (1,332)
Operating result
9,997 13,196 9,285 10,842 3,325 9,872 11,528
Cost of gross financial debt
(168) (804) (2,378) (2,777) (948) (1,802) (2,104)
Interest income on cash and cash equivalents
25 51 127 148 39 22 26
Other financial income and expenses, net
218 (143) (1,219) (1,423) (840) 311 363
Income before tax from continuing operations
10,072 12,301 5,815 6,790 1,576 8,403 9,812
Income tax expense
(3,135) (3,416) (5,583) (6,519) (1,805) (3,440) (4,017)
Net income (loss) from continuing operations
6,937 8,885 232 271 (229) 4,963 5,795
Income (loss) from discontinued operations
(1,519) (4,703) (1,684) (1,966) (798) (1,664) (1,943)
13

Year ended December 31,
Six months ended June 30,
2015
2016
2017
2017
2018
(in thousands)
Euros
Euros
Euros
U.S. dollars
(convenience
translation)*
Euros
Euros
U.S. dollars
(convenience
translation)*
Net income (loss) attributable to equity
holders of the parent
5,418 4,182 (1,452) $ (1,696) (1,027) 3,299 $ 3,852
Earnings per basic share (attributable to
equity holders)
0.20 0.16 (0.05) (0.06) (0.04) 0.12 0.14
Earnings per diluted share (attributable
to equity holders)
0.19 0.14 (0.05) (0.06) (0.04) 0.11 0.13
Pro forma earnings per basic share (attributable to equity holders)(1)
Pro forma earnings per diluted share (attributable to equity holders)(1)
Pro forma as adjusted earnings per basic
share (attributable to equity
holders)(2)
Pro forma as adjusted earnings per diluted share (attributable to equity holders)(2)
*
Convenience translation calculated using the exchange rate last reported by the U.S. Federal Reserve as of June 30, 2018 at the rate of one Euro per $1.1677.
(1)
On a pro forma basis, to give effect to our          -for-one share split, which will occur immediately prior to the completion of this offering.
(2)
On a pro forma basis, as adjusted to give effect to (i) our          -for-one share split, which will occur immediately prior to the completion of this offering and (ii) the payment of dividends declared after June 30, 2018. See note 24 to our audited consolidated financial statements and unaudited interim consolidated financial statements included elsewhere in this prospectus.
14

Year ended December 31,
June 30, 2018
pro forma(1)
2016
2017
June 30, 2018
(in thousands)
Euros
Euros
Euros
U.S. dollars
(convenience
translation)*
Euros
Consolidated statements of financial position:
Goodwill
28,247 46,417 57,132 $ 66,713
Intangible assets, net
11,111 20,045 27,273 31,847
Tangible assets, net
7,411 8,339 8,724 10,187
Non-current financial assets, net
2,754 2,825 2,963 3,460
Other non-current assets
86 100
Deferred tax assets
3,559 2,008 1,972 2,303
Non-current assets
53,082 79,634 98,150 114,619
Accounts receivable and related
accounts
57,950 66,059 80,685 94,216
Other current assets
10,838 13,234 13,558 15,832
Cash and cash equivalents
48,577 61,703 51,457 60,086
Current assets
117,365 140,996 145,700 170,134
Total assets
170,447 220,630 243,850 $ 284,744
Total equity
63,529 62,884 80,418 $ 93,904
Provisions – non-current portion
1,572 2,854 2,413 2,818
Long-term borrowings
42,500 74,438 74,532 87,031
Other financial debt – non-current portion
3,298 16,671 16,789 19,605
Deferred tax liabilities
3,013 4,884 5,625 6,568
Non-current liabilities
50,383 98,847 99,359 116,022
Provisions – current portion
1,456 779 705 823
Short-term borrowings and bank
overdrafts
777 4,218 4,293 5,013
Accounts payable and related accounts
19,676 24,001 27,219 31,784
Other financial debt – current portion
7,399 3,377 1,787 2,087
Other current liabilities
27,227 26,524 30,069 35,112
Current liabilities
56,535 58,899 64,073 74,818
Total liabilities
106,918 157,746 163,432 190,849
Total equity and liabilities
170,447 220,630 243,850 $ 284,744
*
Convenience translation calculated using the exchange rate last reported by the U.S. Federal Reserve as of June 30, 2018 at the rate of one Euro per $1.1677.
(1)
See note 25 to our unaudited interim consolidated financial statements included elsewhere in this prospectus.
15

Year ended December 31,
Six months ended June 30,
2015
2016
2017
2017
2018
(in thousands)
Euros
Euros
Euros
U.S. dollars
(convenience
translation)*
Euros
Euros
U.S. dollars
(convenience
translation)*
Key performance indicators:
Adjusted EBITDA(1)
14,617 19,187 20,012 $ 23,368 8,066 15,498 $ 18,097
Adjusted Net Income(2)
7,418 6,655 3,237 $ 3,780 1,263 5,548 $ 6,478
Adjusted earnings per basic
share(2)
0.27 0.25 0.12 0.14 0.05 0.20 0.23
Adjusted earnings per diluted share(2)
0.24 0.22 0.11 0.13 0.04 0.18 0.21
*
Convenience translation calculated using the exchange rate last reported by the U.S. Federal Reserve as of June 30, 2018 at the rate of one Euro per $1.1677.
(1)
The following table shows a reconciliation of net income (loss) attributable to equity holders of the parent to Adjusted EBITDA for the periods indicated:
Year ended December 31,
Six months ended June 30,
2015
2016
2017
2017
2018
(in thousands)
Euros
Euros
Euros
U.S. dollars
(convenience
translation)*
Euros
Euros
U.S. dollars
(convenience
translation)*
Reconciliation of Adjusted
EBITDA:
Net income (loss) attributable to equity holders of the parent
5,418 4,182 (1,452) $ (1,696) (1,027) 3,299 $ 3,852
(Income) loss from
discontinued operations
1,519 4,703 1,684 1,966 798 1,664 1,943
Cost of gross financial debt
168 804 2,378 2,777 948 1,802 2,104
Income tax expense..
3,135 3,416 5,583 6,519 1,805 3,440 4,017
Depreciation and amortization
2,620 3,835 6,305 7,362 3,037 4,218 4,925
Goodwill impairment
1,141 1,332
Share-based payment expense(a)
1,129 1,040 699 816 518 151 176
Restructuring costs(b)
774 892 1,516 1,770 435 127 148
Costs related to mergers and acquisitions(c)
97 223 1,066 1,245 748 1,130 1,320
Currency gains and losses(d)
(196) 174 1,160 1,355 846 (310) (362)
Other financial gains and losses(e)
(47) (82) (68) (79) (47) (23) (27)
Adjusted EBITDA
14,617 19,187 20,012 $ 23,368 8,066 15,498 $ 18,097
*
Convenience translation calculated using the exchange rate last reported by the U.S. Federal Reserve as of June 30, 2018 at the rate of one Euro per $1.1677.
(a)
Share-based payment expense to-date has included costs associated with our warrant issuances.
(b)
Adjustments for restructuring costs do not include costs relating to unutilized offices.
(c)
Costs related to mergers and acquisitions mainly correspond to transaction costs incurred in connection with merger and acquisition activity such as due diligence costs.
(d)
See note 7 to our audited consolidated financial statements and unaudited interim consolidated financial statements included elsewhere in this prospectus.
(e)
Other financial gains and losses includes interest income and allowances to, and reversals of, provisions for financial risks and changes.
16

(2)
The following table shows a reconciliation of net income (loss) attributable to equity holders of the parent to Adjusted Net Income for the periods indicated:
Year ended December 31,
Six months ended June 30,
2015
2016
2017
2017
2018
(in thousands)
Euros
Euros
Euros
U.S. dollars
(convenience
translation)*
Euros
Euros
U.S. dollars
(convenience
translation)*
Reconciliation of Adjusted Net Income:
Net income (loss)
attributable to
equity holders of
the parent
5,418 4,182 (1,452) $ (1,696) (1,027) 3,299 $ 3,852
Amortization of acquired intangibles(a)
318 1,409 1,645 589 841 982
Share-based payment expense(b)
1,129 1,040 699 816 518 151 176
Restructuring
costs(c)
774 892 1,516 1,770 435 127 148
Costs related to mergers and acquisitions(d)
97 223 1,066 1,245 748 1,130 1,320
Adjusted Net Income
7,418 6,655 3,237 $ 3,780 1,263 5,548 $ 6,478
Average number of
basic shares
26,940 26,575 27,249 27,249 27,025 28,019
Average number of
fully diluted
shares
29,197 29,443 29,747 29,747 29,626 30,599
Adjusted earnings per basic share
0.27 0.25 0.12 0.14 0.05 0.20 0.23
Adjusted earnings per diluted share
0.24 0.22 0.11 0.13 0.04 0.18 0.21
*
Convenience translation calculated using the exchange rate last reported by the U.S. Federal Reserve as of June 30, 2018 at the rate of one Euro per $1.1677.
(a)
Amortization of acquired intangibles (technology and customer relationships), net of deferred taxes.
(b)
Share-based payment expense to-date has included costs associated with our warrant issuances.
(c)
Adjustments for restructuring costs do not include costs relating to unutilized offices.
(d)
Costs related to mergers and acquisitions mainly correspond to transaction costs incurred in connection with merger and acquisition activity such as due diligence costs.
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Risk factors
You should carefully consider the risks and uncertainties described below and the other information in this prospectus before making an investment in our Class A ordinary shares. Our business, results of operations and financial condition could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our Class A ordinary shares could decline and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business, results of operations and financial condition.
This prospectus also contains forward-looking statements that involve risks and uncertainties. See “Cautionary statement regarding forward-looking statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors described below and elsewhere in this prospectus.
Certain factors relating to our business and our industry
Our revenue is highly dependent on clients located in Europe and North America. Any weakening of economic conditions in these markets may adversely affect our business, results of operations and financial condition.
In the year ended December 31, 2017, 79.2% of our revenue was derived from clients located in Europe and 14.0% of our revenue was derived from clients located in North America and in the six months ended June 30, 2018, our revenue derived from clients located in Europe and North America was 79.7% and 12.4%, respectively. Any weakening of economic conditions in European economies or in North America could depress the pricing for our services and cause our clients in these markets to reduce or postpone their technology spending significantly, which may in turn lower the demand for our services and negatively affect our business, results of operations and financial condition. Additionally, if we are unable to successfully anticipate changing economic and other conditions affecting the markets in which we operate, in particular in Europe and in North America, we may be unable to effectively plan for or respond to those changes and our business, results of operations and financial condition could be negatively affected.
We may not be able to achieve anticipated growth, which could materially adversely affect our business, results of operations and financial condition.
We intend to continue our expansion in the foreseeable future to pursue existing and potential market opportunities. As we engage with new clients, introduce new services, enter into new markets and acquire new businesses, we may face new market, technological and operational risks and challenges with which we are unfamiliar, and we may not be able to mitigate these risks and challenges to successfully expand our business. We may not be able to achieve our anticipated growth, which could materially adversely affect our business, results of operations and financial condition.
Rapid growth may strain our limited resources, and a failure to manage this growth could have a material adverse effect on the quality of our services and client support.
We have recently experienced rapid growth and significantly expanded our business. Our total revenue has grown from €184.9 million ($200.8 million) in the year ended December 31, 2015 to €207.8 million ($219.3 million) in the year ended December 31, 2016 and to €233.7 million ($280.9 million) in the year ended December 31, 2017, representing year-over-year annual growth rates of 12.4% and 12.5%, respectively. Total revenue grew from €114.7 million ($130.9 million) in the six months ended June 30, 2017 to €136.6 million ($159.5 million) in the six months ended June 30, 2018, representing an increase of 19.1%. As of December 31, 2015, we had 1,590 employees, as compared to 2,416 employees as of June 30, 2018. We have also expanded
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geographically, broadening our operations from nine countries in 2014 to 16 countries in 2018. Our rapid growth has placed, and we expect it to continue to place, significant demands on our management and our administrative, operational and financial infrastructure. Continued expansion increases the challenges we face in offering our services in the following areas:

recruiting and retaining sufficiently skilled IT professionals, as well as marketing and management personnel;

training and supervision of our personnel to maintain our high quality standards;

the need for additional financing to fund our rapid growth;

developing financial and management controls; and

preserving our culture, values and entrepreneurial environment.
If we are unable to manage our rapid growth effectively, it may strain our limited resources and have a material adverse effect on the quality of our services and client support.
Our revenue depends to a large extent on a limited number of clients, and our revenue could decline if we lose a major client.
We have derived, and believe that in the foreseeable future we will continue to derive, a significant portion of our revenue from a small number of clients. In 2015, our largest client was the U.K. government, accounting for 12.6% of our revenue in that year; in 2016 our largest client was also the U.K. government, accounting for 9.5% of our revenue in that year; in 2017 our largest client was Audi, accounting for 7.7% of our revenue in that year; and in the first half of 2018, our largest client was also Audi, accounting for 8.0% of our revenue in that period. In 2015, 2016, 2017 and in the first half of 2018, our top 10 clients accounted for 37.1%, 34.5%, 31.9% and 34.5% of our revenue, respectively. The decrease in the percentage of our revenue attributable to the U.K. government between 2015 and 2017 is mostly due to a strategic decision by the Company to disengage from large public contracts and instead focus on growing in parallel with our private clients as well as the impact of foreign exchange fluctuations of the British Pound.
Our ability to maintain close relationships with these and other major clients is essential to the growth and profitability of our business. However, the volume of work performed for a specific client is likely to vary from year to year, especially since we generally are not our clients’ exclusive business transformation services provider and we do not have long-term commitments from any clients to purchase our services. A major client in one year may not provide the same level of revenue for us in any subsequent year. The business transformation services we provide to our clients, and the revenue and net income from those services, may decline or vary as the type and quantity of business transformation services we provide change over time. We may, for example, generate significant revenue from a client for services provided during the “build” phase of our engagement, when we design and implement our tailored offering for the client, which may decrease during the “run” phase, when we operate and improve the offering. Furthermore, our reliance on any individual client for a significant portion of our revenue may give that client a certain degree of pricing leverage against us when negotiating contracts and terms of service.
In addition, a number of factors other than our performance could cause the loss of or reduction in business or revenue from a client, and these factors are not predictable. For example, a client may decide to reduce spending on business transformation services from us due to a challenging economic environment or other factors, both internal and external, relating to its business. These factors, among others, may include corporate restructuring, pricing pressure, changes to an outsourcing strategy, switching to another business transformation services provider or bringing work in-house.
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The loss of any of our major clients, or a significant decrease in the volume of work they outsource to us or the price at which we sell our services to them, could materially adversely affect our revenue and our results of operations.
Our revenue is highly dependent on a limited number of industries, and any decrease in demand for outsourced services in these industries could reduce our revenue and adversely affect our results of operations.
A substantial portion of our clients are concentrated in seven specific industry verticals: retail, automotive, financial services, government, travel and hospitality, healthcare and media. In the year ended December 31, 2017, we derived 29.8%, 15.3%, 10.0%, 8.8%, 6.4%, 6.1% and 5.8% of our revenue, respectively, from clients operating in these seven industries and for the six months ended June 30, 2018, we derived 28.4%, 18.4%, 10.5%, 7.6%, 4.9%, 5.5% and 4.1% of our revenue, respectively, from clients operating in these industries. Our business growth largely depends on continued demand for our services from clients in these seven industry verticals.
A downturn in any of our targeted industries, a slowdown or reversal of the trend to outsource business transformation services in any of these industries or the introduction of regulations that restrict or discourage companies from outsourcing business transformation services, could result in a decrease in the demand for our services and materially adversely affect our business, results of operations and financial condition. For example, a worsening of economic conditions in the financial services industry and significant consolidation in that industry may reduce the demand for our services and negatively affect our revenue and profitability.
Other developments in the industries in which we operate may also lead to a decline in the demand for our services in these industries, and we may not be able to successfully anticipate and prepare for any such changes. For example, consolidation in any of these industries or acquisitions, particularly involving our clients, may decrease the potential number of buyers of our services. Our clients in a particular industry may experience rapid changes in their prospects, substantial price competition and pressure on their profitability. This, in turn, may result in increasing pressure on us from clients in these key industries to lower our prices, which could adversely affect our results of operations.
We face intense competition from next-generation IT services providers, digital agencies and design firms, large global consulting and outsourcing firms and traditional technology outsourcing IT services providers, and an increase in competition, our inability to compete successfully, pricing pressures or loss of market share could materially adversely affect our business, results of operations and financial condition.
The market for technology and IT services is intensely competitive, highly fragmented and subject to rapid change and evolving industry standards and we expect competition to intensify. We face competition primarily from next-generation IT services providers, digital agencies and design firms, large global consulting and outsourcing firms and traditional technology outsourcing IT services providers. Many of our competitors have substantially greater financial, technical and marketing resources and greater name recognition than we do. As a result, they may be able to compete more aggressively on pricing or devote greater resources to the development and promotion of technology and IT services. Competitors based in some emerging markets also present significant price competition due to their more favorable local cost structures and tax advantages.
In addition, as the technology services industry is not capital intensive or highly regulated compared to other industries, there are relatively few barriers to entry into our markets and we have faced, and expect to continue to face, competition from new digitial business transformation services providers. Further, there is a risk that our clients may elect to increase
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their internal resources to satisfy their service needs as opposed to relying on a third-party vendor, such as our company. The technology services industry is also undergoing consolidation, which may result in increased competition from larger firms that may have substantially greater financial, marketing or technical resources, may be able to respond more quickly to new technologies or processes and changes in client demands, and may be able to devote greater resources to the development, promotion and sale of their services than we can. Increased competition could also result in price reductions, reduced operating margins and loss of our market share. We cannot assure you that we will be able to compete successfully with existing or new competitors or that competitive pressures will not materially adversely affect our business, results of operations and financial condition.
If we do not continue to innovate and remain at the forefront of emerging technologies and related market trends, we may lose clients and we may not remain competitive, which could cause our business, results of operations and financial condition to suffer.
Our success depends on delivering innovative software solutions that leverage emerging technologies and emerging market trends to drive increased revenue. Technological advances and innovation are constant in the technology services industry. As a result, we must continue to invest resources in designing and structuring new offerings and services for our clients, as well as in research and development to stay abreast of technology developments so that we may continue to deliver solutions that our clients will wish to purchase. If we are unable to anticipate technology developments, enhance our existing services or develop and introduce new services to keep pace with such changes and meet changing client needs, we may lose clients and our revenue and results of operations could suffer. Our results of operations would also suffer if our innovations are not responsive to the needs of our clients, are not appropriately timed with market opportunities or are not effectively brought to market. Our competitors may be able to offer engineering, design and innovation services that are, or that are perceived to be, substantially similar or better than those we offer. This may force us to expend significant resources in order to remain competitive, which we may be unable to do.
Our business, results of operations and financial condition may be affected by the rate of growth in the use of digital marketing and technology in business and the type and level of spending in these areas by our clients and prospective clients.
Our business depends, in part, upon continued growth in the use of digital marketing and technology in business by our clients and prospective clients. In challenging economic environments, our clients or prospective clients may reduce or defer their spending on new marketing initiatives or technologies in order to focus on other priorities, or may choose to use their own internal resources rather than engage an outside firm to perform the types of services and solutions we provide. Downturns may be particularly pronounced in the area of marketing and communication because some companies react to a slowdown in economic activity by reducing their budgets in these areas to avoid missing performance targets. In addition, many companies have already invested substantial resources in their current digital platforms and marketing operations, and they may be reluctant or slow to adopt new approaches that could disrupt existing personnel, processes and infrastructures. If the growth of digital marketing and technology usage or our clients’ spending on technology declines, or if we cannot convince our clients or potential clients to embrace new technological solutions, our business, results of operations and financial condition could be adversely affected.
We may not be able to successfully identify and acquire target companies or integrate acquired companies into our company, and we may become subject to certain liabilities assumed or incurred in connection with our acquisitions that could harm our business, results of operations and financial condition.
Strategic acquisitions to complement and expand our business have been and will likely remain an important part of our competitive strategy. If we are unable to identify and complete
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acquisitions, or if we are inefficient or unsuccessful at integrating any acquired businesses into our operations, we may not be able to achieve our planned rates of growth or improve our market share, profitability or competitive position in specific markets or services. The process of integrating an acquired company has created, and will continue to create, operating difficulties. The risks we face include:

diversion of management time and focus from operating our core business to acquisition integration challenges;

excessive costs of deploying our business support and financial management tools in acquired companies;

failure to successfully integrate the acquired business into our operations, including cultural challenges associated with integrating and retaining employees;

failure to achieve anticipated efficiencies and/or benefits, including through the loss of key clients or personnel at the acquired business; and

failure to realize our strategic objectives for the acquired business or further develop the acquired business.
Although we conduct due diligence in connection with each of our acquisitions, there may be liabilities that we fail to discover, that we inadequately assess or that are not properly disclosed to us. In particular, to the extent that any acquired business (i) failed to comply with or otherwise violated applicable laws or regulations, (ii) failed to fulfill contractual obligations to clients or (iii) incurred material liabilities or obligations to clients that are not identified during the diligence process, we, as the successor owner, may be financially responsible for these violations, failures and liabilities and may suffer financial and/or reputational harm or otherwise be adversely affected. In addition, as part of an acquisition, we may assume responsibilities and obligations of the acquired business pursuant to the terms and conditions of agreements entered by the acquired entity that are not consistent with the terms and conditions that we typically accept and require. We also may be subject to litigation or other claims in connection with an acquired business, including claims from employees, clients, shareholders or other third parties. Any material liabilities we incur that are associated with our acquisitions could harm our business, results of operations and financial condition.
We cannot predict or guarantee that we will successfully identify suitable acquisition candidates, consummate any acquisition or integrate any acquired business. Any failure to do so could have an adverse impact on our business, results of operations and financial condition.
See “Management’s discussion and analysis of financial condition and results of operations—Acquisitions” for further discussion of our strategic acquisitions.
Goodwill and acquisition-related intangibles that we carry on our balance sheet could give rise to significant impairment charges in the future.
The amount of goodwill and intangible assets in our consolidated financial statements has increased significantly in recent years, primarily due to acquisitions. As of the six months ended June 30, 2018, the amount of goodwill and intangible assets in our consolidated financial statements was €84.4 million ($98.6 million), representing 34.6% of total assets. Goodwill and acquisition-related intangibles are subject to impairment review at least annually. Impairment testing under IFRS may lead to impairment charges in the future. Any significant impairment charges could have a material adverse effect on our results of operations.
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If we cause disruptions in our clients’ businesses or provide inadequate service, our clients may have claims for damages against us, which could cause us to lose clients, have a negative effect on our corporate reputation and adversely affect our business, results of operations and financial condition.
If our employees make errors in the course of delivering services to our clients or fail to consistently meet service requirements of a client, these errors or failures could disrupt the client’s business, which could result in a reduction in our revenue or a claim for damages against us. In addition, a failure or inability to meet a contractual requirement could seriously damage our corporate reputation and limit our ability to attract new business.
The services we provide are often critical to our clients’ businesses. Certain of our client contracts require us to comply with security obligations including maintaining network security and backup data, ensuring our network is virus-free, maintaining business continuity planning procedures and verifying the integrity of employees that work with our clients by conducting background checks. Any failure in a client’s system or breach of security relating to the services we provide to the client could damage our reputation or result in a claim for damages, which may be substantial, against us. Any significant failure of our equipment or systems, or any major disruption to basic infrastructure like power and telecommunications in the locations in which we operate, could impede our ability to provide services to our clients, have a negative impact on our reputation, cause us to lose clients and adversely affect our results of operations.
Under our client contracts, our liability for breach of our obligations is in some cases limited pursuant to the terms of the contract. Such limitations may be unenforceable or otherwise may not protect us from liability for damages. The successful assertion of one or more large claims against us in amounts greater than those covered by our current insurance policies could materially adversely affect our business, results of operations and financial condition. Even if such assertions against us are unsuccessful, we may incur reputational harm and substantial legal fees.
Our business, results of operations and financial condition could be negatively affected if we incur legal liability in connection with providing our services and solutions.
If we fail to meet our contractual obligations or otherwise breach obligations to our clients, we could be subject to legal liability. We may enter into non-standard agreements because we perceive an important financial opportunity by doing so or because our personnel did not adequately adhere to our guidelines. In addition, the contracting practices of our competitors may cause contract terms and conditions that are unfavorable to us to become standard in the marketplace. If we cannot, or do not, meet our contractual obligations to provide services and solutions, and if our exposure is not adequately limited through the enforceable terms of our agreements, we might face significant legal liability and our business, results of operations and financial condition could be adversely affected.
In the normal course of business and in conjunction with certain client engagements, we have entered into contractual arrangements through which we may be obligated to indemnify clients or other parties with whom we conduct business with respect to certain matters. These arrangements can include provisions whereby we agree to hold the indemnified party and certain of their affiliates harmless with respect to third-party claims, including matters such as our breach of certain representations or covenants, our infringement of the intellectual property of others or our gross negligence or willful misconduct. Payments by us under any of these arrangements are generally conditioned on the client making a claim and providing us with full control over the defense and settlement of such claim. It is not possible to determine our maximum potential exposure under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. If events arise requiring us to make payment for indemnification claims under our contractual indemnification obligations, such payments could have a material impact on our business, results of operations and financial condition.
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Additionally, some clients may perform audits or require us to perform audits and provide audit reports with respect to the controls and procedures that we use in the performance of services for such clients, especially when we process data belonging to them. Our ability to acquire new clients and retain existing clients may be adversely affected and our reputation could be harmed if we receive a qualified opinion, or if we cannot obtain an unqualified opinion, with respect to our controls and procedures in connection with any such audit in a timely manner. We could also incur liability if our controls and procedures, or the controls and procedures we manage for a client, were to result in an internal control failure or impair our client’s ability to comply with its own internal control requirements.
Our insurance coverage may not be adequate to protect us against all potential losses to which we may be subject, and this may have a material adverse effect on our business, results of operations and financial condition.
Our insurance policies cover physical loss or damage to the premises and equipment we use arising from a number of specified risks and certain consequential losses, including business interruption, arising from the occurrence of an insured event under the policies. We also maintain various other types of insurance, such as insurance covering our employees in their professional activities, but we are not fully insured against all risks. Notwithstanding the insurance coverage that we carry, the occurrence of an event that causes losses in excess of the limits specified in our policies, or losses arising from events not covered by insurance policies, could materially harm our financial condition and future operating results. There can be no assurance that any claims filed under our insurance policies will be honored fully or timely. Also, our financial condition may be affected to the extent we suffer any loss or damage that is not covered by insurance or which exceeds our insurance coverage.
If we are unable to attract and retain highly-skilled IT professionals, or adapt the size of our teams in response to changes in demand, we may not be able to maintain client relationships and grow effectively, which may adversely affect our business, results of operations and financial condition.
Our business is labor intensive and, accordingly, our success depends upon our ability to attract, develop, motivate, retain and effectively utilize highly-skilled IT professionals. We believe that there is significant competition for technology professionals in Europe, the United States and elsewhere who possess the technical skills and experience necessary to deliver our services, and that such competition is likely to continue for the foreseeable future. As a result, the technology industry generally experiences a significant rate of turnover of its workforce. Our business plan is based on hiring and training a significant number of additional technology professionals each year in order to meet anticipated turnover and increased staffing needs. Our ability to properly staff projects, to maintain and renew existing engagements and to win new business depends, in large part, on our ability to hire and retain qualified IT professionals. In addition, the competition for highly-skilled IT professionals may prevent us from being able to effectively increase the size of our teams in response to client requests or increases in demand. At the same time, concern over losing employees that may be difficult to replace may make it difficult to scale down the size of our teams should demand decrease.
We cannot assure you that we will be able to recruit and train a sufficient number of qualified professionals or that we will be successful in retaining current or future employees. Increased worldwide competition for skilled technology professionals, particularly in Europe and in the United States, may lead to a shortage in the availability of qualified personnel in the locations where we operate and hire. Failure to hire and train or retain qualified technology professionals in sufficient numbers could have a material adverse effect on our business, results of operations and financial condition.
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Increases in wages and other compensation expense for our IT professionals could prevent us from sustaining our competitive advantage.
Wage costs for IT professionals may increase at a faster rate than in the past, driven by increased competition for their services or other factors, which ultimately may make us less competitive unless we are able to increase the efficiency and productivity of our IT professionals as well as the prices we can charge for our services. Wages are our most significant operating expense and increases in wage costs may reduce our profitability. We may need to increase the levels of employee compensation more rapidly than in the past to remain competitive, and we may not be able to pass on these increased costs to our clients. In addition, the issuance of equity-based compensation to our IT professionals would also result in additional dilution to our shareholders. Unless we are able to continue to increase the efficiency and productivity of our employees as well as the prices we can charge for our services, wage inflation and increased wages may materially adversely affect our financial condition and results of operation.
Restrictions on immigration may affect our ability to compete for and provide services to clients, which could hamper our growth and cause our revenue to decline.
Our future success continues to depend on our ability to attract and retain employees with technical and project management skills, including those from developing countries. The ability of foreign nationals to work in the United States, Europe, Asia, Australia, Latin America and other regions in which we have clients depends on their and our ability to obtain the necessary visas and work permits for our personnel who need to travel internationally. If we are unable to obtain such visas or work permits, or if their issuance is delayed or if their length is shortened, we may not be able to provide services to our clients or to continue to provide services on a timely and cost-effective basis, receive revenue as early as expected or manage our business as efficiently as we otherwise could, any of which could have a material adverse effect on our results of operations and financial condition.
Immigration and work permit laws and regulations in the countries in which we have clients are subject to legislative and administrative changes as well as changes in the application of standards and enforcement. For example, President Donald Trump and members of his administration have indicated that they intend to re-examine immigration laws and regulations and President Trump has signed executive orders to restrict immigration into the United States from certain countries. In addition, the U.S. Congress has recently considered and may consider in the future extensive changes to U.S. immigration laws regarding the admission of high-skilled temporary and permanent workers. If such provisions are signed into law, our ability to attract and retain talent would be constrained and our cost of doing business in the United States would increase and that may discourage clients from seeking our services. Our international expansion strategy and our business, results of operations and financial condition may be materially adversely affected if changes in immigration and work permit laws and regulations or the administration or enforcement of such laws or regulations impair our ability to staff projects with professionals who are not citizens of the country where the work is to be performed.
Our profitability will suffer if we are not able to maintain our resource utilization levels and productivity levels.
Our profitability is significantly impacted by our utilization levels of fixed-cost resources, including human resources as well as other resources such as computers and office space, and our ability to increase our productivity levels. We have expanded our operations significantly in recent years through organic growth and strategic acquisitions, which has resulted in a significant increase in our headcount and fixed overhead costs.
Some of our IT professionals are trained to work for specific clients or on specific projects and some of our facilities are dedicated to specific clients or specific projects. Our ability to manage
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our utilization levels depends significantly on our ability to hire and train high-performing IT professionals and to staff projects appropriately. Our ability to manage our utilization levels also depends on the general economy and its effect on our clients and their business decisions regarding the use of our services. If we experience a slowdown or stoppage of work for any client or on any project for which we have dedicated IT professionals or facilities, we may not be able to efficiently reallocate these IT professionals and facilities to other clients and projects to keep their utilization and productivity levels high. If we are not able to maintain optimal resource utilization levels without corresponding cost reductions or price increases, our profitability will suffer.
Our results of operations could be materially adversely affected by fluctuations in foreign currency exchange rates.
Although we report our results of operations in Euros, a majority of our total revenue is denominated in currencies other than the Euro. Unfavorable fluctuations in foreign currency exchange rates, particularly with respect to the U.S. Dollar, the Swedish Krona, the British Pound, the Canadian Dollar and the Indian Rupee, could have a material adverse effect on our results of operations.
Because our consolidated financial statements are presented in Euros, we must translate revenue, expenses and income, as well as assets and liabilities, into Euros at exchange rates in effect during or at the end of each reporting period. Therefore, changes in the value of the Euro against other currencies will affect the value of balance-sheet items originally denominated in other currencies. These changes will also cause our results of operations stated in Euros to be higher or lower than our results of operations in local currency when compared against other periods.
As we continue to leverage our global delivery model, more of our expenses are incurred in currencies other than those in which we bill for the related services. An increase in the value of certain currencies against the Euro could increase costs for delivery of services at off-shore sites by increasing labor and other costs that are denominated in local currency. There can be no assurance that our contractual provisions will offset their impact.
Our competitive position and future prospects depend on our senior management’s expertise, and our business operations may be severely disrupted if we lose their services.
Our business is dependent on retaining the services of certain key members of the management team who have extensive experience in the technology services industry, in particular, Sebastian Lombardo, our Chief Executive Officer, and Olivier Padiou and Tomas Nores, our Chief Operating Officers. If a key member of the management team is unable or unwilling to continue in his or her present position, it could disrupt our business operations, and we may not be able to replace such a person easily, or at all. Competition for the services of such persons in our industry is intense, and our industry is characterized by the high mobility of its professionals. While we have entered into employment contracts or service agreements with our senior managers and have provided incentives for them to remain with us, including the issuance of warrants, we cannot guarantee the retention of their services. We currently do not maintain insurance against any damage that may be incurred in case of the loss or dismissal of our key specialists or managers. The loss of any key management may have an adverse effect on our business, results of operations and financial condition.
If any of our senior management or key personnel joins a competitor or forms a competing company, we may lose clients, suppliers, know-how and key technology professionals and staff members to them. Also, if any of our business development managers, who generally keep a
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close relationship with our clients, joins a competitor or forms a competing company, we may lose clients and our sales may be materially adversely affected. Additionally, such movement by senior management could result in unauthorized disclosure or use of our technical knowledge, practices or procedures, which may materially adversely affect our competitive position and, consequently, our business, results of operations and financial condition.
Our business depends on a strong brand and corporate reputation, and if we are not able to maintain and enhance our brand, our ability to expand our client portfolio will be impaired and our business, results of operations and financial condition will be adversely affected.
Our corporate reputation is a significant factor in our clients’ and prospective clients’ determination of whether to engage us. We believe the Valtech brand name and our reputation are important corporate assets that help distinguish our services from those of our competitors and also contribute to our efforts to recruit and retain talented IT professionals. However, our corporate reputation is susceptible to damage by actions or statements made by current or former employees or clients, competitors, vendors, adversaries in legal proceedings and government regulators, as well as members of the investment community and the media. There is a risk that negative information about our company, even if based on false rumor or misunderstanding, could adversely affect our business, results of operations and financial condition. In particular, damage to our reputation could be difficult and time-consuming to repair, could make potential or existing clients reluctant to select us for new engagements, resulting in a loss of business, and could adversely affect our recruitment and retention efforts. Damage to our reputation could also reduce the value and effectiveness of the Valtech brand name and could reduce investor confidence in us and result in a decline in the price of our Class A ordinary shares.
Most of our contracts with our clients are short-term and our business, results of operations and financial condition could be adversely affected if our clients terminate their contracts on short notice.
Consistent with industry practice, most of our contracts with our clients are short-term. A majority of our contracts can be terminated by our clients on short notice and without significant early termination cost. See “A majority of our client contracts contain provisions under which the client may terminate our services prior to the completion of the agreement on short notice and without significant early termination costs.” When contracts are terminated, we lose the anticipated revenue and might not be able to eliminate our associated costs in a timely manner. Consequently, our operating margins in subsequent periods could be lower than expected. If we are unable to replace the lost revenue with other work on terms we find acceptable or effectively eliminate costs, our business, results of operations and financial condition could be adversely affected.
There are a number of factors relating to our clients that are outside of our control which might lead them to terminate a contract or project with us, including:

changes in the business and financial condition of our clients, such as financial difficulties;

changes in ownership or management of our clients;

changes in economic or market conditions in general or specific to a client’s industry;

a change in strategic priorities, resulting in elimination of the impetus for the project or a reduced level of technology spending;

a change in outsourcing strategy resulting in moving more work to the client’s in-house technology department or to our competitors;
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the replacement by our clients of existing software with packaged software supported by licensors; and

mergers and acquisitions or significant corporate restructurings.
Failure to perform or observe any contractual obligations could result in cancellation or non-renewal of a contract, which could cause us to experience a higher than expected number of unassigned employees and an increase in our cost of revenue as a percentage of revenue, until we are able to reduce or reallocate our headcount. The ability of our clients to terminate agreements makes our future revenue uncertain. We may not be able to replace any client that elects to terminate or not renew its contract with us, which could materially adversely affect our revenue and thus our results of operations.
In addition, some of our agreements specify that if a change of control of our company occurs during the term of the agreement, the client has the right to terminate the agreement. If any future event, such as the sale of our shares by one of our principal shareholders, triggers any change-of-control provision in our client contracts, these agreements may be terminated, which would result in loss of revenue.
A majority of our client contracts contain provisions under which the client may terminate our services prior to the completion of the agreement on short notice and without significant early termination costs.
A majority of our client contracts provide that the client may terminate the contract without cause prior to the end of the term of the agreement by providing us with relatively short prior written notice of the termination and without significant early termination costs. As a result, the existence of contractual relationships with our clients is not an assurance that we will continue to provide services for our clients through the entire term of their respective agreements. If clients representing a significant portion of our revenue terminated their agreements unexpectedly, we may not be able to replace the revenue and income from such contracts, which would adversely affect our business, results of operations and financial condition. In the event of contract termination on short notice, we may be unable to reassign our IT professionals to new engagements without delay. The cancellation of an engagement could, therefore, reduce the utilization rate of our IT professionals, which would have a negative impact on our business, results of operations and financial condition. In addition, client contract terminations could harm our reputation which could negatively impact our ability to obtain new clients.
If the pricing structures that we use for our client contracts are based on inaccurate expectations and assumptions regarding the cost and complexity of performing our work, our contracts could be unprofitable, which could adversely affect our business, results of operations and financial condition from operation.
We perform our services primarily under time-and-materials contracts (where materials costs consist of travel and out-of-pocket expenses). We charge out the services performed by our employees under these contracts at daily or hourly rates that are agreed to at the time the contract is entered into. The daily or hourly rates and other pricing terms negotiated with our clients are highly dependent on the complexity of the project, the mix of staffing we anticipate using on it, internal forecasts of our operating costs and predictions of increases in those costs influenced by wage inflation and other marketplace factors. Our predictions are based on limited data and could turn out to be inaccurate. Typically, we do not have the ability to increase the daily or hourly rates established at the outset of a client project in order to pass through to our client increases in salary costs driven by wage inflation and other marketplace factors.
In addition to our time-and-materials contracts, we undertake some engagements on a fixed-price basis. Revenue from our fixed-price contracts represented 15.6%, 20.3% and 25.1% of
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total revenue for the years ended December 31, 2015, 2016 and 2017, respectively, and represented 26.2% of total revenue for the six months ended June 30, 2018. In the future, the share of total revenue which will be derived from fixed-price contracts may increase if we secure large fixed-price engagements. Our pricing in a fixed-price contract is highly dependent on our assumptions and forecasts about the costs we will incur to complete the related project, which are based on limited data and could turn out to be inaccurate. Any failure by us accurately to estimate the resources and time required to complete a fixed-price contract on time and on budget or any unexpected increase in the cost of our employees assigned to the related project, office space or materials could expose us to risks associated with cost overruns and could have a material adverse effect on our business, results of operations and financial condition. In addition, any unexpected changes in economic conditions that affect any of the foregoing assumptions and predictions could render contracts that would have been favorable to us when signed unfavorable.
If we are not successful in managing increasingly large and complex projects, we may not achieve our financial goals and our results of operations could be adversely affected.
To successfully market our service offerings and obtain larger and more complex projects, we need to establish close relationships with our clients and develop a thorough understanding of their operations. In addition, we may face a number of challenges managing larger and more complex projects, including:

maintaining high-quality control and process execution standards;

maintaining planned resource utilization rates on a consistent basis;

maintaining productivity levels and implementing necessary process improvements;

controlling costs; and

maintaining close client contact and high levels of client satisfaction.
Our ability to successfully manage large and complex projects depends significantly on the skills of our management personnel and IT professionals, some of whom do not have experience managing large-scale or complex projects. In addition, large and complex projects may involve multiple engagements or stages, and there is a risk that a client may choose not to retain us for additional stages or may cancel or delay additional planned engagements. Such cancellations or delays may make it difficult to plan our project resource requirements. If we fail to successfully obtain engagements for large and complex projects, we may not achieve our revenue growth and other financial goals. Even if we are successful in obtaining such engagements, a failure by us to effectively manage these large and complex projects could damage our reputation, cause us to lose business, impact our margins and adversely affect our business, results of operations and financial condition.
Our profitability could suffer if we are not able to maintain favorable pricing rates.
Our profitability and operating results are dependent on the rates we are able to charge for our services. Our rates are affected by a number of factors, including:

our clients’ perception of our ability to add value through our services;

our competitors’ pricing policies;

bid practices of clients and their use of third-party advisors;

the mix of onsite and offshore staffing;
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employee wage levels and increases in compensation costs, including timing of promotions and annual pay increases;

our ability to charge premium prices when justified by market demand or the type of service; and

general economic conditions.
If we are not able to maintain favorable pricing for our services, our profitability could suffer.
If we are unable to collect our receivables from, or invoice our unbilled services to, our clients, our results of operations and cash flows could be adversely affected.
Our business depends on our ability to successfully obtain payments from our clients of the amounts they owe us for work performed. We evaluate the financial condition of our clients and usually bill and collect on relatively short cycles. We maintain provisions against receivables and unbilled services based on our assessment of the risk of non-collection. Actual losses on client balances could differ from those that we currently anticipate and as a result we might need to adjust our provisions. There is no guarantee that we will accurately assess the creditworthiness of our clients. Macroeconomic conditions, such as a potential credit crisis in the global financial system, could also result in financial difficulties for our clients, including limited access to the credit markets, insolvency or bankruptcy. Such conditions could cause clients to delay payment, request modifications of their payment terms or default on their payment obligations to us, all of which could increase our receivables. Timely collection of fees for client services also depends on our ability to complete our contractual commitments and subsequently bill for and collect our contractual service fees. If we are unable to meet our contractual obligations, we might experience delays in the collection of or be unable to collect our client balances, and if this occurs, our results of operations and cash flows could be adversely affected. In addition, if we experience delays in billing and collection for our services, our cash flows could be adversely affected.
Our revenue, operating results or profitability may experience significant variability and our past results may not be indicative of our future performance.
Our operating results may fluctuate due to a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. You should not rely on our past results as an indication of our future performance. Factors that are likely to cause variations include:

the number, timing, scope and contractual terms of business transformation projects in which we are engaged;

delays in project commencement or staffing delays due to difficulty in assigning appropriately skilled or experienced IT professionals;

the accuracy of estimates of resources, time and fees required to complete fixed-price projects and costs incurred in the performance of each project;

changes in pricing in response to client demands and competitive pressures;

changes in the allocation of onsite and offshore staffing;

the business decisions of our clients regarding the use of our services;

the ability to further grow revenue from existing clients;

the available leadership and senior technical resources compared to junior engineering resources staffed on each project;
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seasonal trends, primarily our hiring cycle and the budget and work cycles of our clients;

delays or difficulties in expanding our operational facilities or infrastructure;

the ratio of fixed-price contracts to time-and-materials contracts in process;

employee wage levels and increases in compensation costs, including timing of promotions and annual pay increases;

unexpected changes in the utilization rate of our IT professionals;

unanticipated contract or project terminations;

the timing of collection of accounts receivable;

the continuing financial stability of our clients; and

general economic conditions.
In addition, such variability could make it difficult to make accurate financial forecasts, which could materially adversely affect our business, financial condition and results of operations.
We have incurred, and may continue to incur, share-based incentive expenses which could adversely impact our net income.
We have issued warrants under our equity incentive plans and entered into certain other share-based incentive arrangements in the past, as a result of which we have recorded €1.1 million ($1.2 million), €1.0 million ($1.1 million) and €0.7 million ($0.8 million) as share-based compensation expenses for each of the years ended December 31, 2015, 2016 and 2017, respectively and €0.2 million ($0.2 million) for the six months ended June 30, 2018.
IFRS prescribes how we account for share-based incentive arrangements, which could adversely or negatively impact our results of operations or the price of our Class A ordinary shares. IFRS requires us to recognize share-based payments as compensation expense in the statement of income (loss) based on the fair value of equity awards on the date of the grant, with compensation expense recognized over the period in which the recipient is required to provide service in exchange for the equity award. The expenses associated with share-based incentives may reduce the attractiveness of issuing equity awards under our equity incentive plan. However, if we do not grant equity awards, or if we reduce the number of equity awards we grant, we may not be able to attract and retain key personnel. If we grant more equity awards to attract and retain key personnel, the expenses associated with such additional equity awards could materially adversely affect our results of operations. In addition, the issuance of equity-based compensation would result in additional dilution to our shareholders.
Our computer networks may be vulnerable to security risks that could disrupt our services, and we could be held liable for damages or our reputation could suffer from security breaches or disclosure of confidential information or personal data.
We are dependent on information technology networks and systems to process, transmit and securely store electronic information and to communicate among our locations around the world and with our clients. Our information technology networks may be vulnerable to unauthorized access, computer hackers, computer viruses, worms, malicious applications and other security problems caused by unauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietary information, including personally identifiable information, or cause interruptions or malfunctions in our operations. In addition, many of our engagements involve projects that are critical to the operations of our clients’ businesses. The theft and/or unauthorized use or publication of our, or our clients’, confidential information or other proprietary business information as a result of such
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an incident could adversely affect our competitive position and reduce marketplace acceptance of our services. Although we intend to continue to implement security measures, any failure, unauthorized access or breach of the networks or computer systems used by us or our clients could result in a claim for substantial damages against us and significant reputational harm, regardless of our responsibility for the failure, unauthorized access or breach.
In addition, we often have access to or are required to manage, utilize, collect and store sensitive or confidential client or employee data, including personal data. As a result, we are subject to numerous U.S. and non-U.S. laws and regulations designed to protect this information, such as the EU General Data Protection Regulation, or GDPR, and various U.S. federal and state laws governing the protection of personal data. To protect proprietary information and other intellectual property, we require our employees, independent contractors, vendors and clients to enter into written confidentiality agreements with us. If any person, including any of our employees, negligently disregards or intentionally breaches controls or procedures with which we are responsible for complying with respect to such data or otherwise mismanages or misappropriates that data, or if unauthorized access to or disclosure of data in our possession or control occurs, we could be subject to liability and penalties in connection with any violation of applicable privacy laws and/or criminal prosecution, as well as significant liability to our clients or our clients’ customers for breaching contractual confidentiality and security provisions or privacy laws. These risks will increase as we continue to grow and to store and process increasingly large amounts of our clients’ confidential information and data and host or manage parts of our clients’ businesses, especially in industries involving particularly sensitive data such as the financial services industry and the healthcare industry.
As cybersecurity threats rapidly evolve in sophistication and become more prevalent across the industry globally, the associated risks described above may increase. Our (and our third party providers’) information technology systems and networks likely will be subject to advanced computer viruses or other malicious codes, unauthorized access attempts, denial of service attacks, phishing and other cyber-attacks. Given that the techniques used in cyber attacks change frequently and may be difficult to detect for periods of time, we (and our third party providers) may face difficulties in anticipating and implementing adequate preventative measures or mitigating harms after such an attack. We cannot guarantee that our security efforts or the security efforts of our third-party providers will prevent breaches or failures of our or our third-party providers’ databases or systems. Unauthorized disclosure of sensitive or confidential client or employee data, including personal data, whether through breach of computer systems, systems failure, employee negligence, fraud or misappropriation or otherwise, could damage our reputation and cause us to lose clients. Similarly, unauthorized access to or through our information systems and networks or those we develop or manage for our clients, whether by our employees or third parties, could result in negative publicity, legal liability and damage to our reputation, which could in turn have a material adverse effect on our business, results of operations and financial condition.
Our international operations involve risks that could increase our expenses, adversely affect our results of operations and require increased time and attention from our management.
We have operations and serve clients across Europe and North America and in other jurisdictions around the world including China, India, Singapore, Australia, Argentina and Ukraine. As a result, we may be subject to risks inherently associated with international operations, including fluctuations in foreign exchange and inflation rates, international hostilities, natural disasters, security breaches, and failure to maintain compliance with our clients’ control requirements. Our global operations also expose us to numerous and sometimes conflicting legal, tax and regulatory requirements, and violations or unfavorable interpretation by the respective
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authorities of these regulations could harm our business, results of operations and financial condition. In addition, emerging markets generally involve greater financial and operational risks than more mature markets such as the United States and Europe. Negative or uncertain political climates in countries or geographies where we operate could also adversely affect us.
On March 20, 2017, we executed a purchase and sale agreement to acquire certain business operations in Ukraine. In recent years, military activities in Ukraine and on its borders, including Russia asserting control over and declaring its annexation of the Crimean region, have combined with Ukraine’s weak economic conditions to create uncertainty about the future of Ukraine. Deterioration of Ukraine’s political and economic conditions, including a further outbreak of open hostilities with Russia, could impair our business operations in Ukraine and adversely affect our results of operations and financial condition.
In addition, our operations in Argentina expose us to risks associated with the unpredictable and significant levels of inflation Argentina has experienced in recent years. Our operating costs in Argentina are denominated in Argentine Pesos. Inflation in Argentina, without a corresponding Peso devaluation, could result in an increase in our operating costs without a commensurate increase in our revenue, which could adversely affect our results of operations and financial condition.
Additional risks associated with international operations include difficulties in enforcing contractual rights, the burdens of complying with a wide variety of foreign laws and potentially adverse tax consequences, including permanent establishment and transfer pricing issues, tariffs, quotas and other barriers and potential difficulties in collecting accounts receivable. In addition, we may face competition in other countries from companies that may have more experience with operations in such countries or with international operations. Additionally, such companies may have long-standing or well-established relationships with desired clients, which may put us at a competitive disadvantage. We may also face difficulties integrating new facilities in different countries into our existing operations, as well as integrating employees that we hire in different countries into our existing corporate culture. Our international expansion plans may not be successful and we may not be able to compete effectively in other countries. We cannot ensure that these and other factors will not impede the success of our international expansion plans or limit our ability to compete effectively in other countries.
Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violations of these regulations could harm our business, results of operations and financial condition.
Because we provide services to clients throughout the world, we are subject to numerous, and sometimes conflicting, legal rules on matters as diverse as import/export controls, content requirements, trade restrictions, tariffs, taxation, sanctions, government affairs, internal and disclosure control obligations, data privacy and labor relations. Violations of these laws or regulations in the conduct of our business could result in fines, criminal sanctions against us or our officers, prohibitions on doing business, damage to our reputation and other unintended consequences such as liability for monetary damages, fines and/or criminal prosecution, unfavorable publicity, restrictions on our ability to process information and allegations by our clients that we have not performed our contractual obligations. Due to the varying degrees of development of the legal systems of the countries in which we operate, local laws might be insufficient to protect our rights. Our failure to comply with applicable legal and regulatory requirements could have a material adverse effect on our business, results of operations and financial condition.
Among other anti-corruption laws and regulations, we are subject to the Foreign Corrupt Practices Act, which prohibits improper payments or offers of improper payments to foreign
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officials to obtain business or any other benefit, and the U.K. Bribery Act. Violations of these laws or regulations could subject us to criminal or civil enforcement actions, including fines and suspension or disqualification from government contracting or contracting with private entities in certain highly regulated industries, any of which could have a material adverse effect on our business, results of operations and financial condition.
In addition, strict labor regulations in certain of the jurisdictions in which we operate, including France, may make it difficult for us to make changes to our workforce in response to changes in demand for our services, which could materially adversely affect our business, results of operations and financial condition. The terms of certain national collective bargaining agreements that apply to all businesses within specific industries are applicable to certain of our French employees. Certain of our French employees are also represented by an elected works council with which we have entered into collective bargaining agreements that provide, among other things, for terms of employment that are mandated under French law. These collective bargaining agreements may limit our ability to make changes to the terms of employment of certain of our French employees, for example to reduce costs, which could materially adversely affect our business, results of operations and financial condition.
Our work with government clients exposes us to additional risks inherent in the government contracting environment.
Our clients include national, provincial, state and local governmental entities. Revenue from our government clients represents 16.0%, 12.7%, 8.8% and 7.6% of our total revenue for the years ended December 31, 2015, 2016 and 2017 and the six months ended June 30, 2018, respectively. Our government work carries various risks inherent in the government contracting process, which may affect our operating profitability. These risks include, but are not limited to, the following:

Government entities often reserve the right to audit our contract costs, including allocated indirect costs, and conduct inquiries and investigations of our business practices with respect to our government contracts. If the client finds that the costs are not chargeable, then we will not be allowed to bill for them or the cost must be refunded to the client if it has already been paid to us. Findings from an audit may also result in adjustments of previously agreed upon rates for our work and may affect our future margins.

If a government client discovers improper or illegal activities in the course of audits or investigations, we may become subject to various civil and criminal penalties and administrative sanctions, which may include termination of contracts, forfeiture of profits, suspension of payments, fines and suspensions or unilateral debarment from doing business with other agencies of that government. The inherent limitations of internal controls may not prevent or detect all improper or illegal activities, regardless of their adequacy, and therefore we can only mitigate, and not eliminate, this risk.

Government contracts are often subject to more extensive scrutiny and publicity than contracts with commercial clients. Negative publicity related to our government contracts, regardless of its accuracy, may further damage our business by affecting our ability to compete for new contracts among commercial and governmental entities.

Political and economic factors such as pending elections, changes in leadership among key governmental decision makers, revisions to governmental tax policies and reduced tax revenue can affect the number and terms of new government contracts signed.

Terms and conditions of government contracts tend to be more onerous and are often more difficult to negotiate than those for commercial contracts. For example, many of our government contracts may be terminated for convenience, and our government clients may terminate or decide not to renew our contracts with little or no prior notice.
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Government contracts may not include a cap on direct or consequential damages, which could cause additional risk and expense in these contracts.
We may need additional capital, and a failure by us to raise additional capital on terms favorable to us, or at all, could limit our ability to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges.
We believe that our available cash and cash equivalents, cash flows expected to be generated from operations, borrowings available to us and net proceeds from this offering will be sufficient to meet our projected operating and capital expenditure requirements for at least the next 12 months. We may, however, require additional cash resources due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If our resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain another credit facility in addition to our existing credit lines related to assignment of receivables. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including:

investors’ perception of, and demand for, securities of business transformation services companies;

conditions of the United States and other capital markets in which we may seek to raise funds; and

our future results of operations and financial condition.
Financing may not be available in amounts or on terms acceptable to us, or at all, which could limit our ability to grow our business and develop or enhance our service offerings to respond to market demand or competitive challenges.
We face risks associated with having significant resource commitments to provide services prior to realizing sales for those services.
We have a long selling cycle for our services, which requires significant investment of human resources and time by both our clients and us. Before committing to use our services, potential clients require us to expend substantial time and resources educating them on the value of our services and our ability to meet their requirements. Therefore, our selling cycle is subject to many risks and delays over which we have little or no control, including our clients’ decision to choose alternatives to our services (such as other business transformation services providers or in-house resources) and the timing of our clients’ budget cycles and approval processes. If our sales cycle unexpectedly lengthens for one or more large projects, it would negatively affect the timing of our revenue and hinder our revenue growth. For certain clients, we may begin work and incur costs prior to executing the contract. A delay in our ability to obtain a signed agreement or other persuasive evidence of an arrangement, to complete certain contract requirements in a particular quarter or to collect on work performed in a particular quarter could reduce our revenue in that quarter.
Implementing our services also involves a significant commitment of resources over an extended period of time from both our clients and us. Our clients may experience delays in obtaining internal approvals or delays associated with technology, thereby further delaying the implementation process. Our current and future clients may not be willing or able to invest the time and resources necessary to implement our services, and we may fail to close sales with
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potential clients to which we have devoted significant time and resources. Any significant failure to generate revenue or delays in recognizing revenue after incurring costs related to our sales or services process could materially adversely affect our business, results of operations and financial condition.
We may not be able to recognize revenue in the period in which our services are performed, which may cause our margins to fluctuate.
Our services are performed under both time-and-material and fixed-price contract arrangements. All revenue is recognized pursuant to applicable accounting standards. We recognize revenue when the following criteria are met: the amount of revenue can be measured reliably, it is probable that the economic benefit will flow to us, the stage of completion at the balance sheet date can be measured reliably and the costs incurred, or to be incurred, can be measured reliably. When the above criteria are not met, revenue arising from the rendering of services should be recognized only to the extent of the expenses recognized that are recoverable.
We recognize revenue from fixed-price contracts using the percentage of completion method of accounting, which involves calculating the actual costs incurred relative to estimated costs to complete in order to estimate the progress toward completion to determine the amount of revenue to recognize. In instances where final acceptance of the system or solution is specified by the client, revenue is deferred until all acceptance criteria have been met. In the absence of a sufficient basis to measure progress toward completion, revenue is recognized upon receipt of final acceptance from the client. Our failure to meet all the acceptance criteria, or otherwise meet a client’s expectations, may result in our having to record the cost related to the performance of services in the period that services were rendered, but delay the timing of revenue recognition to a future period in which all acceptance criteria have been met.
Pursuant to our 2018 Omnibus Incentive Plan that we intend to establish in connection with this offering, we may grant options and other types of awards, which may result in increased share-based compensation expenses.
In connection with this offering, we intend to establish a new omnibus equity incentive plan, which we refer to as the 2018 Plan in this prospectus, for the purpose of granting share-based compensation awards to employees, directors and consultants to incentivize their performance and align their interests with ours. The maximum number of ordinary shares initially available for issuance under equity incentive awards granted pursuant to the 2018 Plan is expected to equal      ordinary shares. On January 1, 2019 and on January 1 of each calendar year thereafter, an additional number of shares equal to 5% of the Company’s total outstanding shares on December 31 of the immediately preceding year (or any lower number of shares as determined by the Board of Directors) are expected to be issuable under the 2018 Plan under the discretion of the Board of Directors.
We recognize share-based compensation expenses in our consolidated statement of income in accordance with IFRS as issued by the IASB. We believe the granting of share-based compensation is important to our ability to attract and retain key personnel and employees, and therefore we expect to grant share-based compensation to employees in the future. As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations. In addition, the issuance of additional equity upon the exercise of options or other types of awards would result in further dilution to our shareholders.
In addition, in connection with the completion of this offering, we expect to issue        equity incentive awards to certain employees, including      awards to our executive officers, which we expect to result in €     million of share-based compensation expense, which we expect to recognize in                                     .
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Our effective tax rate could be materially adversely affected by a number of factors.
We conduct business globally and file income tax returns in multiple jurisdictions, including jurisdictions located in Europe, North America, Asia, Australia and Latin America. Our effective tax rate, results of operations and financial condition could be materially adversely affected by a number of factors, including changes in the amount of income taxed by or allocated to the various jurisdictions in which we operate that have different statutory tax rates; the resolution of issues arising from tax audits or examinations and any related interest or penalties; and changing tax laws, regulations and interpretations of such tax laws in multiple jurisdictions. Certain jurisdictions, including France, are actively contemplating tax reform and tax policy changes, which could adversely affect our business, results of operations and financial condition.
On December 22, 2017, the Tax Cuts and Jobs Act, or the Tax Act, significantly revised U.S. federal corporate income tax law by, among other things, reducing the U.S. federal corporate income tax rate to 21%, limiting the tax deduction for interest expense to 30% of adjusted earnings, allowing immediate expensing for certain new investments, imposing an alternative “base erosion and anti-abuse tax,” or BEAT, on certain corporations that make deductible payments to foreign related persons in excess of specified amounts, and, effective for net operating losses arising in taxable years beginning after December 31, 2017, eliminating net operating loss carrybacks, permitting indefinite net operating loss carryforwards, and limiting the use of net operating loss carryforwards to 80% of current year taxable income. The reduction in the U.S. federal corporate income tax rate is expected to be beneficial to us in future years in which we have net income subject to U.S. federal income tax. However, the reduction in the U.S. federal corporate income tax rate also resulted in a net downward adjustment of €1.2 million ($1.4 million) to the amount of deferred tax assets and deferred tax liabilities reflected in our financial statements, and adversely affected our overall effective tax rate for 2017.
There are a number of uncertainties and ambiguities as to the interpretation and application of many of the provisions in the Tax Act, including the provisions relating to the BEAT. In the absence of guidance on these issues, we will use what we believe are reasonable interpretations and assumptions in interpreting and applying the Tax Act for purposes of determining our cash tax liabilities and results of operations, which may change as we receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves over time. It is possible that the Internal Revenue Service, or the IRS, could issue subsequent guidance or take positions on audit that differ from the interpretations and assumptions that we previously made, which could have a material adverse effect on our cash tax liabilities, effective tax rate, results of operations and financial condition.
We report our results of operations based on our determination of the amount of taxes owed in the various jurisdictions in which we operate. We have certain intercompany arrangements among our subsidiaries in relation to various aspects of our business, including operations, marketing, sales and delivery functions that are subject to transfer pricing regulations of the respective jurisdiction.
We have significant tax benefits, the loss of which could materially adversely affect our results of operations, net income, cash flows and financial condition.
We enjoy tax incentives introduced by certain jurisdictions to partially offset the costs of research and development efforts by technology companies. In the past, we benefited from such tax benefits in Australia, Netherlands, Canada and France. We may try to benefit from similar tax incentives in other jurisdictions where we operate or will operate in the future. While we plan to continue our research and development effort in order to sustain our competitive advantage, there is a risk that currently existing tax benefits in the jurisdictions where we operate will be
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amended or withdrawn by the relevant jurisdictions, which would adversely impact our results of operations, net income, cash flows and financial condition. Tax attributes arising out of past research and development tax benefits may be challenged by tax authorities in the future, which could force us to pay additional taxes, interest and penalties and could adversely and materially impact our results of operations, net income, cash flows and financial condition.
In France and the United States, we have material tax losses that have been carried forward, some of which have been recognized as deferred tax assets. Should our net income be less favorable than what we anticipated when we determined the amount of deferred tax assets, we would be forced to impair the value of these deferred tax assets, which could adversely and materially impact our result of operations, net income, cash flows and financial condition.
Although we do not expect to be a “passive foreign investment company,” or a PFIC, for U.S. federal income tax purposes in 2018 or in the immediately foreseeable future, if we were a PFIC, U.S. shareholders may be subject to adverse U.S. federal income tax consequences.
Under the Internal Revenue Code of 1986, as amended, or the Code, we will be a PFIC for any taxable year in which, after the application of certain look-through rules with respect to subsidiaries, either (i) 75% or more of our gross income consists of passive income or (ii) 50% or more of the average quarterly value of our assets consists of assets that produce, or are held for the production of, passive income. Passive income generally includes dividends, interest, certain non-active rents and royalties, and capital gains. Based on our current operations, income, assets and certain estimates and projections, including as to the relative values of our assets, we do not expect to be a PFIC for our 2018 taxable year or in the immediately foreseeable future. However, there can be no assurance that the Internal Revenue Service, or IRS, will agree with our conclusion. In addition, whether we will be a PFIC in 2018 or any future years is uncertain because, among other things: (i) we will own after the completion of this offering a substantial amount of passive assets, including cash, and (ii) the valuation of our assets that generate non-passive income for PFIC purposes, including our intangible assets, is uncertain and may vary substantially over time. In particular, the calculation of the value of our intangible assets is based, in part, on the market value of our Class A ordinary shares, which is subject to change. Accordingly, there can be no assurance that we will not be a PFIC for any taxable year.
If we are a PFIC for any taxable year during which a U.S. investor holds Class A ordinary shares, we generally would continue to be treated as a PFIC with respect to that U.S. investor for all succeeding years during which the U.S. investor holds Class A ordinary shares, even if we ceased to meet the threshold requirements for PFIC status. Such a U.S. investor would be subject to adverse U.S. federal income tax consequences, including (i) the treatment of all or a portion of any gain on disposition as ordinary income, (ii) the application of a deferred interest charge on such gain and the receipt of certain dividends and (iii) compliance with certain reporting requirements. We do not intend to provide the information that would enable investors to take a qualified electing fund, or QEF, election that could mitigate the adverse U.S. federal income tax consequences should we be classified as a PFIC.
For further discussion, see “Taxation—Material U.S. federal income tax considerations for U.S. holders.”
If we fail to maintain an effective system of disclosure controls and procedures and internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
We must maintain effective internal control over financial reporting in order to accurately and timely report our results of operations and financial condition. In addition, as a public company listed in the United States, the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley
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Act, will require, among other things, that we assess the effectiveness of our internal control over financial reporting at the end of each fiscal year starting with the end of the first full fiscal year after the completion of the offering. However, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting for so long as we are an “emerging growth company,” which may be up to five fiscal years following the date of this offering. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not.
Ensuring that we have adequate disclosure controls and procedures, including internal controls over financial reporting, in place so that we can produce accurate financial statements on a timely basis is costly, time-consuming and needs to be re-evaluated frequently. We are in the process of documenting, reviewing and improving our internal controls and procedures in anticipation of being a public company listed in the United States and eventually being subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act. We will be required to comply with the internal controls evaluation and certification requirements of Section 404 of the Sarbanes-Oxley Act. Our management may conclude that our internal controls over financial reporting are not effective due to our failure to cure any identified material weakness or otherwise.
Moreover, even if our management concludes that our internal controls over financial reporting are effective, our independent registered public accounting firm may not conclude that our internal controls over financial reporting are effective. As a result, our accounting firm may decline to attest to the effectiveness of our internal controls over financial reporting or may issue a qualified report.
In addition, during the course of the evaluation, documentation and testing of our internal controls over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the SEC for compliance with the requirements of Section 404. If we fail to achieve and maintain the adequacy of our internal controls over financial reporting, as these standards are modified, supplemented or amended from time to time, we may be unable to report our financial information on a timely basis, we may not be able to conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with the Sarbanes-Oxley Act and we may suffer adverse regulatory consequences or violations of listing standards. There could also be a negative reaction in the financial markets due to a loss of investor confidence in the reliability of our financial statements.
The rules governing the standards that must be met for our management to assess our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act are complex and require significant documentation, testing and possible remediation. These stringent standards require that our audit committee be advised and regularly updated on management’s review of internal control over financial reporting. Our management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to us as a public company listed in the United States. If we fail to staff our accounting and finance function adequately or maintain internal control over financial reporting adequate to meet the demands that will be placed upon us as a public company listed in the United States, our business and reputation may be harmed and the price of our Class A ordinary shares may decline. In addition, undetected material weaknesses in our internal control over financial reporting could lead to restatements of financial statements and require us to incur the expense of remediation. Any of these developments could result in investor perceptions of us being adversely affected, which could cause a decline in the market price of our securities.
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We have identified a material weakness related to the design and operation of our control environment. If we fail to improve and maintain our internal controls over financial reporting, the accuracy and timeliness of our financial reporting may be adversely affected, which could hurt our business, lessen investor confidence and depress the market price of our securities.
Prior to the completion of this offering, as a private company and, before that, as a public company listed outside of the United States, we have not been subject to the requirements of the Sarbanes-Oxley Act, including the obligation to formally evaluate the effectiveness of our internal controls. In connection with our preparation for this offering, we have identified a material weakness related to the design and operation of the control environment, as evidenced by:

inadequate segregation of duties with respect to internal control over financial reporting, due to limited personnel in many subsidiaries of the company with sufficient accounting expertise (in particular for performing independent reviews of journal entries); and

insufficient written policies and control procedures that would limit discrepancies within our different subsidiaries worldwide in applying IFRS accounting standards, in performing control activities or in using the IT systems (in particular for revenue recognition).
A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.
We have taken steps to remediate the material weakness noted above. We have initiated or plan to initiate the following series of measures:

improve segregation of duties related to data entry and review of journal entries by hiring additional personnel with the adequate expertise; and

implement a new enterprise resource planning framework worldwide with the appropriate documentation of control procedures.
However, if we do not successfully remediate these issues or if we fail to design and operate effective internal controls in the future, it could result in material misstatements in our financial statements, result in the loss of investor confidence in the reliability of our financial statements and subject us to regulatory scrutiny and sanctions, which in turn could harm the market value of our Class A ordinary shares.
Changes in IFRS could have an adverse effect on our previously reported results of operations.
The standards comprising IFRS are subject to revision and interpretation by the IASB and by various bodies formed to promulgate and to interpret appropriate accounting principles including the International Financial Reporting Interpretations Committee and the Standard Interpretations Committee. A change in these standards or interpretations could have a significant effect on our previously reported results of operations and could affect the reporting of transactions completed before the announcement of a change.
In May 2014, the IASB issued a new revenue recognition standard under IFRS 15, “Revenue from Contracts with Customers,” which is applicable to annual periods beginning on or after January 1, 2018. IFRS 15 will replace the current standards on revenue recognition, in particular IAS 18, “Revenue,” IAS 11, “Construction Contracts” and the associated interpretations, when it becomes applicable. Under this new standard, revenue is recognized when promised goods or
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services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.
Also applicable beginning January 1, 2018, IFRS 9, “Financial Instruments,” modifies the recognition and measurement for hedging operations and the major accounting categories of financial assets and liabilities, as well as the recognition of credit risk on financial assets by considering expected losses versus losses incurred. Beginning January 1, 2019, we will be subject to IFRS 16, “Leases,” which changes the accounting for leases of tenants with the recognition of an asset and a liability representing the right to use upon delivery of the leased asset by the lessor. The new standard thus introduces a basis of separation between contracts with suppliers, based on a new accounting definition of a lease and a service contract.
In order to be able to comply with the requirements of IFRS 15, IFRS 9 and IFRS 16, we need to update and enhance our internal accounting systems, processes and our internal controls over financial reporting. This has required, and will continue to require, additional investments by us, and may require incremental resources and system configurations that could increase our operating costs in future periods.
We are in the process of identifying and analyzing the contracts subject to the application of IFRS 16. While we continue to assess the potential impact of this standard, we believe that the most significant impact will be related to the accounting for operating leases associated with office space. At this time, a quantitative estimate of the effect of the new standard has not been determined, but we anticipate a material impact to our statements of financial position due to the recognition of the present value of unavoidable future lease payments as lease assets and lease liabilities. The measurement of the total lease expense over the term of the lease is unaffected by the new standard; however, the required presentation on our consolidated statements of income will result in lease expenses being presented as depreciation of lease assets and finance costs rather than being fully recognized as general and administrative costs.
While we are continuing to evaluate the impact, we currently do not expect that the impact of adopting IFRS 15 and IFRS 9 will be material to our financial results. However, it is difficult to predict the exact impact of these or future changes to accounting standards or our accounting policies, any of which could negatively affect our results of operations.
Additionally, our assumptions, estimates and judgments related to complex accounting matters could significantly affect our financial results. IFRS and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business, including, but not limited to, revenue recognition, impairment of long-lived assets, leases and related economic transactions, intangibles, self-insurance, income taxes, property and equipment, litigation and equity-based compensation are highly complex and involve many subjective assumptions, estimates and judgments by us. Changes in these rules or their interpretation or changes in underlying assumptions, estimates or judgments by us (i) could require us to make changes to our accounting systems to implement these changes that could increase our operating costs and (ii) could significantly change our reported or expected financial performance.
An exit by the United Kingdom from the European Union may have a negative effect on global economic conditions and financial markets and on our business, results of operations and financial condition.
In June 2016, a majority of those voting in a national referendum in the United Kingdom voted in favor of the United Kingdom’s exit from the European Union, commonly referred to as “Brexit.” On March 29, 2017, the United Kingdom gave formal notice under Article 50 of the European
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Treaty of its intention to leave the European Union. The announcement of Brexit caused significant volatility in global stock markets and currency exchange rate fluctuations and has created political and economic uncertainty about the future relationship between the United Kingdom and the European Union and as to whether any other European countries may similarly seek to exit the European Union. The on-going process of negotiations between the United Kingdom and the European Union will determine the future terms of the United Kingdom’s relationship with the European Union, including access to European Union markets, either during a transitional period or more permanently. Brexit could lead to potentially divergent laws and regulations as the United Kingdom determines which European Union laws to replace or replicate. We have material operations in the United Kingdom and the rest of Europe and our global operations serve many clients with significant operations in those regions.
In addition, we are currently an SE with our registered office in England. We may be required or choose to change our corporate form or country of registration prior to or concurrently with the completion of Brexit, depending, among other factors, on what arrangements are negotiated between the United Kingdom and the European Union in connection therewith. A change to our corporate form would likely deprive us of certain of the advantages of being an SE, including the ability to transfer our registered office to another European Union jurisdiction with relatively few restrictions. A change to our country of registration would subject us to a new legal regime that may have disadvantages compared to English law. As a result of the foregoing factors, our financial condition and results of operation may be significantly impacted by the effects of Brexit and the uncertainties surrounding it.
For the year ended December 31, 2017, revenue from our clients in the United Kingdom and the rest of Europe represented 12.5% and 66.7%, respectively, of our consolidated revenue. For the six months ended June 30, 2018, revenue from our clients in the United Kingdom and the rest of Europe represented 12.9% and 66.8%, respectively, of our consolidated revenue. A significant portion of our revenue from clients in the United Kingdom is denominated in British Pounds. This exposure subjects us to revenue risk with respect to our clients in the United Kingdom as well as to risk resulting from adverse movements in foreign currency exchange rates. In addition, revenue from our financial services clients represented 10.0% of our consolidated revenue for the year ended December 31, 2017 and 10.5% of our consolidated revenue for the six months ended June 30, 2018. Uncertainty regarding future U.K. financial laws and regulations, the withdrawal terms of the United Kingdom from the European Union and the future trade terms between the United Kingdom and the European Union could negatively impact the financial services sector globally, including our clients in such sector, and as a consequence adversely impact our financial condition and results of operations. Further, it is uncertain what impact the withdrawal of the United Kingdom from the European Union will have on general economic conditions in the United Kingdom, the European Union and globally. Any of these factors could have a material adverse effect on our business, financial condition and results of operations.
Provisions in the U.K. City Code on Takeovers and Mergers may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our shareholders.
The U.K. City Code on Takeovers and Mergers, or the Takeover Code, applies, among other things, to an offer for an SE whose registered office is in the United Kingdom (or the Channel Islands or the Isle of Man) and whose securities are not admitted to trading on a regulated market in the United Kingdom (or the Channel Islands or the Isle of Man) if the company is considered by the Panel on Takeovers and Mergers, or the Takeover Panel, to have its place of central management and control in the United Kingdom (or the Channel Islands or the Isle of Man). This is known as the “residency test.” The test for central management and control under
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the Takeover Code is different from that used by the U.K. tax authorities. Under the Takeover Code, the Takeover Panel will determine whether we have our place of central management and control in the United Kingdom by looking at various factors, including the structure of our board of directors, the functions of the directors and where they are resident.
If at the time of a takeover offer the Takeover Panel determines that we have our place of central management and control in the United Kingdom, we would be subject to a number of rules and restrictions, including but not limited to the following: (1) our ability to enter into deal protection arrangements with a bidder would be extremely limited; (2) we might not, without the approval of our shareholders, be able to perform certain actions that could have the effect of frustrating an offer, such as issuing shares or carrying out acquisitions or disposals; and (3) we would be obliged to provide equality of information to all bona fide competing bidders.
International hostilities, terrorist activities, other violence or war, natural disasters, global health risks, pandemics and infrastructure disruptions could delay or reduce the number of new service orders we receive and impair our ability to service our clients.
International hostilities and acts of terrorism, violence or war, natural disasters, global health risks or pandemics or the threat or perceived potential for these events could materially adversely affect our operations and our ability to provide services to our clients. We may be unable to protect our people, facilities and systems against any such occurrences. Such events may cause clients to delay their decisions on spending for business transformation services and give rise to sudden significant changes in regional and global economic conditions and cycles. These events also pose significant risks to our people and to physical facilities and operations around the world, whether the facilities are ours or those of our clients, which could materially adversely affect our financial results. By disrupting communications and travel, giving rise to travel restrictions and increasing the difficulty of obtaining and retaining highly-skilled and qualified IT professionals, these events could make it difficult or impossible for us to deliver services to some or all of our clients. Travel restrictions could cause us to incur additional unexpected labor costs and expenses or could restrain our ability to retain the skilled IT professionals we need for our operations. In addition, any extended disruptions of electricity, other public utilities or network services at our facilities, as well as system failures at, or security breaches in, our facilities or systems, could also adversely affect our ability to serve our clients.
Certain factors relating to our intellectual property
Our services or solutions could infringe upon or otherwise violate the intellectual property rights of others and we may be subject to claims of infringement or other violation of third-party intellectual property rights that could be time-consuming and costly to defend and harm our ability to generate future revenue.
We cannot be sure that our products, services and solutions, or the solutions of others that we offer to our clients, do not infringe upon or otherwise violate the intellectual property rights of others. Third parties may assert against us or our clients claims alleging infringement or other violation of patent, copyright, trademark or other intellectual property rights in relation to technologies, processes or services that are important to our business. Any such claims may result in us initiating or defending potentially protracted and costly litigation on behalf of ourselves and our clients, regardless of the merits of these claims, and such claims are often not subject to liability limits or exclusion of consequential, indirect or punitive damages. Such claims could also harm our reputation and prevent us from offering certain products, services or solutions or utilizing certain technologies or processes. In our contracts, we generally agree to indemnify our clients for certain expenses or liabilities resulting from potential infringement of the intellectual property rights of third parties. In some instances, the amount of our liability under these
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indemnities could be substantial. Any claims that our products, services or processes infringe or otherwise violate the intellectual property rights of others, regardless of the merit or resolution of such claims, may result in significant costs in defending and resolving such claims and may divert the efforts and attention of our management and technical personnel from our business. In addition, as a result of such claims, we could be required or otherwise decide that it is appropriate to:

pay the third party making such claims (including to settle or otherwise resolve such claims);

discontinue using, licensing or selling particular products, services or solutions subject to such claims;

discontinue using the technology or processes subject to such claims;

develop other technology or processes not subject to such claims, which could be costly or may not be possible; or

license technology or processes from the third party claiming infringement or from other third parties, which license may not be available or may not be available on commercially reasonable terms.
The occurrence of any of the foregoing could result in unexpected expenses or require us to recognize an impairment of our assets, which would reduce the value of our assets and increase expenses. In addition, if we alter or discontinue our offering of affected products, solutions or services, our revenue could be affected. If any such claim were successful against us or our clients, an injunction might be ordered against our clients or our own services or operations, causing further damages.
We expect that the risk of infringement claims against us will increase if our competitors are able to obtain patents or other intellectual property rights for software products and methods, technological solutions and processes relevant to our business. We also may be subject to intellectual property infringement claims from certain individuals or companies (including non-practicing entities) that have acquired patent portfolios for the primary purpose of asserting such claims against other companies to obtain licensing revenue or other settlement payments. The risk of infringement claims against us may also increase as we continue to develop and license our intellectual property to our clients and other third parties. Any infringement claim or litigation against us could have a material adverse effect on our business, results of operations and financial condition.
We may not be able to enforce or protect our intellectual property rights, which may harm our ability to compete and harm our business.
Our future success will depend, in part, on our ability to protect our proprietary methodologies and other valuable intellectual property. We rely upon a combination of copyright, trademark and trade secret laws, as well as non-disclosure agreements and other contractual provisions and security measures to establish, maintain and protect our intellectual property rights. We intend to protect our intellectual property rights vigorously, however, there is no guarantee that these measures will, in all cases, be successful or that we will be able to obtain or maintain adequate protection or enforcement of our intellectual property rights. Additionally, we note that the laws of some foreign jurisdictions may not protect intellectual property rights to the same extent as the laws of Europe or the United States. The absence of internationally harmonized intellectual property laws may make it more difficult to ensure consistent protection and enforcement of our intellectual property rights.
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We rely on our trademarks, trade names, service marks and brand names to distinguish our services and solutions from the services of our competitors, and have registered or applied to register several of these trademarks. We cannot guarantee that our trademark applications will be approved. Not all of the trademarks that we currently use have been registered in all of the countries in which we do business, and we may not seek such registrations in some of these countries. Some countries’ laws do not protect unregistered trademarks at all, or make them difficult to enforce, and third parties may have filed for such trademarks or similar trademarks in countries where we have not registered, or will not register, our trademarks. Accordingly, we may not be able to adequately protect and enforce our trademarks in some countries in the world and our use of such trademarks may result in liability for trademark infringement, trademark dilution or unfair competition. Furthermore, third parties may oppose our trademark applications, or otherwise challenge our use or registration of our trademarks. In the event that our trademarks or our use thereof is successfully challenged, we could be forced to rebrand our services and solutions, which could result in loss of brand recognition, and could require us to devote resources to advertising and marketing new brands. Further, we cannot assure you that competitors will not infringe our trademarks, or that we will have adequate resources to enforce our trademarks in each such instance.
Although the laws, rules, regulations and treaties in effect in Europe, the United States and other countries in which we operate may provide meaningful protection from misappropriation, infringement or other unauthorized use of our intellectual property, there can be no assurance that these laws, rules, regulations and treaties will not change in ways that reduce such protection or otherwise prevent or restrict the transfer of software components, libraries, toolsets and other technology or data we use in the performance of our services. Furthermore, the existing laws of some countries in which we provide services may offer only limited protection of our intellectual property rights. There also can be no assurance that the steps we have taken to protect our intellectual property rights will be adequate to deter misappropriation, infringement or other unauthorized use, or that we will be able to detect misappropriation, infringement or unauthorized use of our intellectual property.
Unauthorized use of our intellectual property may result in development of technology, products or services that compete with our products and services and unauthorized parties may infringe upon or misappropriate our products, services or proprietary information. If we are unable to protect our intellectual property, our business may be adversely affected and our ability to compete may be impaired.
Depending on the circumstances, we might need to grant a specific client greater rights in intellectual property developed or used in connection with a contract than we normally do. In certain situations, we might forego all rights to the use of intellectual property we create and intend to reuse across multiple client engagements, which would limit our ability to reuse that intellectual property for other clients. Any limitation on our ability to provide a service or solution could cause us to lose revenue-generating opportunities and require us to incur additional expenses to develop new or modified solutions for future projects.
We may need to enforce our intellectual property rights through litigation. Litigation relating to our intellectual property may not prove successful and might result in substantial costs and diversion of resources and management attention.
Our ability to enforce our non-disclosure agreements, software license agreements, service agreements and other intellectual property rights is subject to general litigation risks, as well as uncertainty as to the enforceability of our rights in various countries. To the extent that we seek to enforce our rights, we could be subject to claims that an intellectual property right is invalid, otherwise not enforceable or licensed to the party against whom we are pursuing a claim. In
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addition, our assertion of rights may result in the other party seeking to assert alleged intellectual property rights or other claims against us, which could harm our business and result in substantial costs and diversion of resources and management attention. If we are not successful in defending such claims in litigation, we may not be able to sell or license a particular product, service or solution due to an injunction, or we may have to pay damages that could, in turn, harm our results of operations. In addition, governments may adopt laws or regulations, or courts may render decisions, requiring compulsory licensing of intellectual property to others, or governments may require that products meet specified standards that serve to favor local companies. Our inability to enforce our rights under these circumstances may harm our competitive position and our business.
We may be liable to our clients for damages caused by violations of intellectual property rights and the disclosure of other confidential or proprietary information or systems failures or errors and our insurance policies may not be sufficient to cover these damages.
We often have access to sensitive or confidential client information, including personally identifiable information. Many of the jurisdictions in which we operate have laws and regulations relating to data privacy, security and protection of information. To protect such information, as well as other proprietary information and intellectual property, we have a practice of requiring our employees, independent contractors, vendors and clients to enter into written confidentiality agreements with us. We also employ certain measures intended to protect our information technology systems from unauthorized access and disclosure of personally identifiable information and our and our client’s other confidential and proprietary information. However, there is no guarantee that the measures we have implemented will prevent all such unauthorized access. Despite measures we take to protect the intellectual property and other confidential information, proprietary information and personally identifiable information of our clients, unauthorized parties, including our employees and subcontractors and third parties, may attempt to misappropriate (or otherwise access, use or disclose in an unauthorized manner) certain intellectual property rights and information that are proprietary to us or our clients or otherwise breach our or our clients’ confidences. The agreements we enter into with employees, independent contractors, vendors and clients may not provide meaningful protection for trade secrets, know-how or other proprietary or confidential information in the event of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary or confidential information. Furthermore, policing unauthorized access and use of proprietary technology is difficult and expensive. The steps we have taken may be inadequate to prevent the misappropriation (or other unauthorized access and use) of our and our clients’ proprietary technology and information. Reverse engineering, unauthorized copying or other misappropriation of our and our clients’ proprietary technologies, tools and applications could enable third parties to benefit from our or our clients’ technologies, tools and applications without paying us or our clients for doing so. Unauthorized access or disclosure of sensitive or confidential client information, including personally identifiable information, or a violation of intellectual property rights, whether through employee misconduct, breach of our computer systems, systems failure or error or otherwise, may subject us to liabilities (including penalties, fines, litigation and other liabilities), damage our reputation and cause us to lose clients and harm our ability to obtain new clients. In addition, in the event we enforce our rights relating to such information through litigation, such litigation may not prove successful and might result in substantial costs and diversion of resources and management attention.
Our client contracts generally provide for indemnity for infringement of third party intellectual property rights that arise from our breach under such contracts. Although we attempt to limit our contractual liability for consequential damages in rendering our services, and provide limitation of liabilities for the amount of such liabilities, these limitations on liability may not
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apply in all circumstances, may be unenforceable in some cases or may otherwise be insufficient to protect us from liability for damages. There may be instances when liabilities for damages are greater than the insurance coverage we hold and we will have to internalize those losses, damages and liabilities not covered by our insurance. Furthermore, if any third party brings any claims against our clients, claiming that our work product or intellectual property transferred to our clients violates, or infringes upon, such third party’s intellectual property rights, any such claims could result in claims by our clients against us, which could result in substantial liabilities, costs and diversion of resources and management attention and the loss of such client, and could seriously damage our reputation, result in other clients terminating their engagements with us and make it more difficult to obtain new clients.
Our business is subject to evolving U.S. and foreign regulations regarding privacy and data protection. Changes in regulations regarding privacy and protection of customer data, or any failure to comply with such regulations, could adversely affect our business.
The collection, use, retention, protection, disclosure, transfer, and other processing of personal data are subject to a number of state, national, foreign and international laws and regulations. These privacy- and data protection-related laws and regulations are actively evolving, with new or modified laws and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations. Compliance with these laws and regulations can be costly and can delay or impede the development and offering of new products and services.
For example, in October 2015, the European Court of Justice invalidated the 2000 US-EU Safe Harbor program as a legitimate and legally authorized basis on which the companies could rely for the transfer of personal data from the European Union to the United States. Now that the European Union and the United States have implemented a successor privacy framework called the Privacy Shield, we are reviewing and documenting our practices under the Privacy Shield. However, this new framework also faces a number of legal challenges, is subject to an annual review that could result in changes to our obligations, and also may be challenged by national regulators or private parties. In addition, the GDPR, which became effective in May 2018, contains numerous requirements and changes, including more robust obligations on data processors and heavier documentation requirements for data protection compliance programs by companies. Furthermore, the GDPR will include significant penalties for non-compliance. Complying with the GDPR may cause us to incur substantial operational costs or require us to change our business practices. Despite our efforts to bring practices into compliance before the effective date of the GDPR, we may not be successful either due to internal or external factors such as resource allocation limitations or a lack of vendor cooperation. Furthermore, Brexit could require us to make additional changes to the way we conduct our business and transmit data between the United States, the United Kingdom, the European Union and the rest of the world.
If one or more of the legal bases for transferring personal data from the European Union to the United States is invalidated, or if we are unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services or adversely affect our business. Our failure to comply with applicable laws and regulations, or to protect personal data, could result in enforcement actions, significant penalties or other legal action against us or our clients, a loss of customer confidence, damage to our brand, and a loss of clients, which could potentially have an adverse effect on our business.
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Certain factors relating to our Class A ordinary shares and this offering
We do not know whether a market for our Class A ordinary shares will develop to provide you with adequate liquidity. If our share price fluctuates after this offering, you could lose a significant part of your investment.
If an active trading market for our Class A ordinary shares does not develop, you may have difficulty selling any of our Class A ordinary shares that you buy. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on the Nasdaq Global Market, or otherwise, or how liquid that market might become.
The initial public offering price for the Class A ordinary shares will be determined by negotiations between us and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell our Class A ordinary shares at prices equal to or greater than the price paid by you in this offering. In addition to the risks described above, the market price of our Class A ordinary shares may be influenced by many factors, some of which are beyond our control, including:

technological innovations by us or competitors;

actual or anticipated variations in our operating results;

the failure of financial analysts to cover our Class A ordinary shares after this offering;

changes in financial estimates by financial analysts, or any failure by us to meet or exceed any of these estimates, or changes in the recommendations of any financial analysts that elect to follow our Class A ordinary shares or the shares of our competitors;

announcements by us or our competitors of significant contracts or acquisitions;

future sales of our shares;

investor perceptions of us and the industries in which we operate; and

general market conditions in the technology services industry or in the economy as a whole.
In addition, the stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected. These broad market and industry factors may materially harm the market price of our Class A ordinary shares, regardless of our operating performance. In the past, following periods of volatility in the market price of certain companies’ securities, securities class action litigation has been instituted against these companies. This litigation, if instituted against us, could adversely affect our financial condition or results of operations.
We are controlled by SiegCo SA, whose interests in our business may be different than yours.
SiegCo SA, our controlling shareholder, will control approximately     % of the combined voting power of our ordinary shares (or     % if the over-allotment option is exercised in full) after the completion of this offering. As a result of their ownership of our Class B ordinary shares, each share of which entitles its holder to 10 votes per share. SiegCo SA will continue to have majority combined voting power of our ordinary shares even when they own less than a majority economic interest in us. This concentration of voting power with SiegCo SA may have a negative impact on the price of our Class A ordinary shares. SiegCo SA may not be inclined to permit us to issue additional Class A ordinary shares, including for the facilitation of acquisitions, if it would dilute their holdings below the threshold required to maintain control. For more information on SiegCo SA’s ownership of our ordinary shares and the ownership of SiegCo SA, see “Principal shareholders.”
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Additionally, SiegCo SA’s interests may not be fully aligned with yours, which could lead to actions that are not in your best interests. For example, SiegCo SA may have a different tax position from us, which could influence their decisions regarding whether and when we should dispose of assets or incur new or refinance existing indebtedness. In addition, the structuring of future transactions may take into consideration tax or other considerations even where no similar benefit would accrue to us. In addition, SiegCo SA’s significant ownership in us and resulting ability to effectively control us may discourage someone from making a significant equity investment in us, or could discourage transactions involving a change in control, including transactions in which you as a holder of our Class A ordinary shares might otherwise receive a premium for your shares over the then-current market price.
Our dual class structure may result in a lower or more volatile market price of our Class A ordinary shares.
We cannot predict whether our dual class structure, combined with the concentrated control of SiegCo SA, will result in a lower or more volatile market price of our Class A ordinary shares or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indexes. In July 2017, FTSE Russell announced that it plans to require new constituents of its indexes to have greater than 5% of the company’s voting rights in the hands of public shareholders, and S&P Dow Jones announced that it will no longer admit companies with multiple-class share structures to certain of its indexes. Because of our dual class structure, we will likely be excluded from these indexes and we cannot assure you that other stock indexes will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment by many of these funds and could make our Class A ordinary shares less attractive to other investors. As a result, the market price of our Class A ordinary shares could be adversely affected.
The disparity in the voting rights among the classes of our capital stock may have a potential adverse effect on the price of our Class A ordinary shares.
Each Class A ordinary share will entitle its holder to one vote per share on all matters submitted to a vote of our shareholders. Each holder of our Class B ordinary shares will be entitled to 10 votes per Class B ordinary share so long as the number of Class B ordinary shares is at least   % of the aggregate number of our outstanding ordinary shares on the record date for any general meeting of the shareholders. The difference in voting rights could adversely affect the value of our Class A ordinary shares by, for example, delaying or deferring a change of control or if investors view, or any potential future purchaser of our company views, the superior voting rights of the Class B ordinary shares to have value.
Future sales, or the possibility of future sales, of a substantial number of our Class A ordinary shares could adversely affect the price of the shares and dilute shareholders.
Future sales of a substantial number of our Class A ordinary shares, or the perception that such sales will occur, could cause a decline in the market price of our Class A ordinary shares. Following the completion of this offering, we will have           ordinary shares outstanding (assuming no exercise of the over-allotment option) based on           ordinary shares outstanding as of June 30, 2018 (after giving effect to our          -for-one share split). This includes the Class A ordinary shares in this offering, which may be resold in the public market immediately following the offering without restriction, unless purchased by our affiliates. Approximately          % of the ordinary shares outstanding are expected to be Class B ordinary shares held by existing shareholders. A significant portion of these ordinary shares will be subject to the lock-up agreements described in the “Underwriting” section of this prospectus. If, after the end of such
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lock-up agreements, these shareholders convert their Class B ordinary shares to Class A ordinary shares and sell substantial amounts of Class A ordinary shares in the public market, or the market perceives that such sales may occur, the market price of our Class A ordinary shares and our ability to raise capital through an issue of equity securities in the future could be adversely affected. We also intend to enter into a registration rights agreement upon consummation of this offering pursuant to which we will agree under certain circumstances to file a registration statement to register the resale of the Class A ordinary shares issued upon conversion of Class B ordinary shares held by certain of our existing shareholders, as well as to cooperate in certain public offerings of such ordinary shares. In addition, following the completion of this offering, we intend to cease any new grants under our existing equity incentive plans and to adopt the 2018 Plan under which we would have the discretion to grant a broad range of equity-based awards to eligible participants. We intend to register all Class A ordinary shares that we may issue under this equity compensation plan. Once we register these Class A ordinary shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates and the lock-up agreements described in the “Underwriting” section of this prospectus. If a large number of our Class A ordinary shares or securities convertible into our Class A ordinary shares are sold in the public market after they become eligible for sale, the sales could reduce the trading price of our Class A ordinary shares and impede our ability to raise future capital.
Transformation into a public company listed in the United States may increase our costs and disrupt the regular operations of our business, results of operations and financial condition.
This offering will have a significant transformative effect on us. Our business historically has operated as a public company listed on the Euronext in Paris and, most recently, as a privately owned company. We expect to incur significant additional legal, accounting, reporting and other expenses as a result of having publicly traded Class A ordinary shares listed in the United States. We will also incur costs in excess of what we have incurred previously, including, but not limited to, increased costs and expenses for directors’ fees, increased directors and officers insurance and various other costs of being a public company listed in the United States.
We also anticipate that we will incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as rules implemented by the SEC and Nasdaq. We expect these rules and regulations to increase our legal and financial compliance costs and make some management and corporate governance activities more time-consuming and costly, particularly after we are no longer an “emerging growth company.” These rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. This could have an adverse impact on our ability to recruit a qualified independent board.
The additional demands associated with being a public company listed in the United States may disrupt regular operations of our business by diverting the attention of some of our senior management team away from revenue producing activities to management and administrative oversight, adversely affecting our ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing our businesses. Any of these effects could harm our business, financial condition and results of operations.
English law differs from the laws in effect in the United States and may afford less protection to holders of our Class A ordinary shares.
We are an SE with our registered office in England. Therefore, we are treated to a large extent like an English public limited company and the rights of holders of our Class A ordinary shares are governed by English law, subject to certain provisions of European law, and by our articles of
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association (or statutes). These rights differ in certain respects from the typical rights of shareholders in U.S. corporations. For example, in certain cases, facts that would entitle a shareholder in a U.S. corporation to initiate a derivative action under U.S. law may not give rise to a cause of action under English law. See “English law considerations” in this prospectus for a description of the principal differences between the provisions of English law applicable to us and our shareholders and, for example, the Delaware General Corporation Law.
U.S. investors may have difficulty enforcing civil liabilities against our company, our directors or members of senior management and the experts named in this prospectus.
We are an SE with our registered office in England and our subsidiaries are incorporated in various jurisdictions, including jurisdictions outside the United States. A number of our directors and executive officers and some of the named experts referred to in this prospectus are not residents of the United States, and a substantial portion of our assets and the assets of such persons are located outside the United States. As a result, it may be difficult for investors to effect service of process on those persons in the United States or to enforce in the United States judgments obtained in U.S. courts against us or those persons based on the civil liability provisions of the U.S. securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of England and Wales may render you unable to enforce a judgment against our assets or the assets of our directors and executive officers. In addition, it is doubtful whether English courts would enforce certain civil liabilities under U.S. securities laws in original actions or judgments of U.S. courts based upon these civil liability provisions. Furthermore, because we are a foreign private issuer, our directors and executive officers will not be subject to rules under the Exchange Act that, under certain circumstances, would require directors and executive officers to forfeit to us any “short-swing” profits realized from purchases and sales of our equity securities. In addition, awards of punitive damages in actions brought in the United States or elsewhere may be unenforceable in England. An award for monetary damages under the U.S. securities laws would likely be considered punitive if it does not seek to compensate the claimant for loss or damage suffered and is intended to punish the defendant. The enforceability of any judgment in England will depend on the particular facts of the case as well as the laws and treaties in effect at the time. The United States and the United Kingdom do not currently have a treaty providing for recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters.
As a result of the above, public holders of our Class A ordinary shares may have more difficulty in protecting their interest through actions against our management, directors or major shareholders than they would as shareholders of a U.S. public company.
Shareholders may not be able to exercise their pre-emptive rights.
Our shareholders have approved the disapplication of pre-emptive rights until September 1, 2023. Additionally, in the future we intend periodically to obtain shareholder approval for the disapplication of pre-emption rights under English law and there can be no assurance that any shareholder will be able to participate in any future offering of our equity securities. Even if shareholders are as a general matter offered such securities in a future pre-emptive offering, holders of shares in certain jurisdictions may not be able to exercise their pre-emptive rights unless securities laws have been complied with in such jurisdictions with respect to such rights and the related shares, or an exemption from the requirements of the securities laws of these jurisdictions is available. We currently do not intend to register the shares under the laws of any jurisdiction other than the United States, and no assurance can be given that an exemption from the securities laws requirements of other jurisdictions will be available to shareholders in these jurisdictions. To the extent that such shareholders are not able to exercise their pre-emptive rights, the pre-emptive rights would lapse and the proportional interests of such holders would be reduced.
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As a European public limited liability company registered in England, certain capital structure decisions may require shareholder approval which may limit our flexibility to manage our capital structure.
English law applicable to us provides that a board of directors may only allot shares or grant rights to subscribe for, or convert any securities into, shares (other than shares or rights to subscribe for, or convert any securities into, shares in pursuance of an employee’s share scheme) with the prior authorization of shareholders, such authorization being subject to a maximum nominal amount of shares and maximum period of time (which must not be more than five years), each as specified in the articles of association or relevant shareholder resolution. This authorization would need to be renewed by shareholders on its expiration (i.e., at least every five years).
Applicable English law also generally prohibits a European public limited liability company from repurchasing its own shares without the prior approval of shareholders by ordinary resolution (a resolution passed by a simple majority of votes cast excluding, in certain circumstances, the votes of any shareholders to which the resolution relates) and other formalities. Such approval may be for a maximum period of up to five years.
Circumstances may arise that would cause the foregoing shareholder approval not to be obtained, which would deprive shareholders of substantial capital management benefits.
See the section entitled “Description of share capital and articles of association” of this prospectus.
English law will require the satisfaction of certain financial requirements before dividends can be declared or repurchases of shares can be made.
Under English law applicable to us, we will only be able to declare dividends, make distributions or repurchase shares (other than out of the proceeds of a new issuance of shares made for that purpose) out of  “distributable reserves.” Distributable reserves are a company’s accumulated, realized profits, to the extent that they have not been previously utilized by distribution or capitalization, less its accumulated, realized losses, to the extent that they have not been previously written-off in a reduction or reorganization of capital duly made. In addition, as a European public limited liability company registered in England, we may only make a distribution if the amount of our net assets is not less than the aggregate of our called-up share capital and undistributable reserves and if, and to the extent that, the distribution does not reduce the amount of those assets to less than that amount.
Our articles of association will permit shareholders by ordinary resolution to declare dividends provided that the directors have made a recommendation as to the amount. The dividend shall not exceed the amount recommended by the directors. The directors may also decide to pay interim dividends if it appears to them that the profits available for distribution justify the payment. When recommending or declaring the payment of a dividend, the directors will be required under applicable English law to comply with their duties, including considering our future financial requirements.
The Depository Trust Company, or DTC, may cease to act as depositary and clearing agent for our Class A ordinary shares
DTC will have discretion to cease to act as depositary and clearing agent for our Class A ordinary shares. If DTC determines at any time that our Class A ordinary shares are not eligible for continued deposit and clearance within their facilities, then we believe the Class A ordinary shares would not be eligible for continued listing on the Nasdaq Global Market and trading in our Class A ordinary shares would be disrupted. While we would pursue alternative
52

arrangements to preserve the listing and maintain trading, any such disruption could have a material adverse effect on the trading price of our Class A ordinary shares and there may be adverse U.K. stamp duty and/or U.K. stamp duty reserve tax consequences.
We will be a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be subject to the Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.
Upon consummation of this offering, we will report under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act and although we are subject to U.K. laws and regulations with regard to such matters and intend to furnish quarterly financial information to the SEC, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events. In addition, foreign private issuers are not required to file their annual report on Form 20-F until four months after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from the Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, you may not have the same protections afforded to shareholders of public companies that are not foreign private issuers.
As a foreign private issuer and as permitted by the listing requirements of Nasdaq, we will rely on certain home country governance practices rather than the Nasdaq corporate governance requirements.
We are a foreign private issuer. As a result, in accordance with Nasdaq Listing Rule 5615(a)(3), we comply with home country governance requirements and certain exemptions thereunder rather than complying with certain of the corporate governance requirements of Nasdaq.
English law does not require that a majority of our board of directors consists of independent directors. Our board of directors therefore may include fewer independent directors than would be required if we were subject to Nasdaq Listing Rule 5605(b)(1). In addition, we are not subject to Nasdaq Listing Rule 5605(b)(2), which requires that independent directors regularly have scheduled meetings at which only independent directors are present.
English law does not prescribe a minimum number of directors that must serve on our audit committee. In accordance with Nasdaq Listing Rule 5615 (a)(3), we may default to home country requirements with respect to the audit committee by having fewer than three audit committee members. Were we to do so, our practice would vary from the requirements of Nasdaq Listing Rule 5605 (c)(2)(A), which requires an audit committee of at least three members.
Similarly, we have adopted a compensation committee, but English law does not require that we adopt a compensation committee or that such committee be fully independent. As a result, our practice varies from the requirements of Nasdaq Listing Rule 5605(d), which sets forth certain requirements as to the responsibilities, composition and independence of compensation committees. English law does not require that we disclose information regarding third-party compensation of our directors or director nominee. As a result, our practice varies from the third-party compensation disclosure requirements of Nasdaq Listing Rule 5250(b)(3).
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In addition, as permitted by applicable English law, we have opted not to implement a standalone nominating committee. To this extent, our practice varies from the independent director oversight of director nominations requirements of Nasdaq Listing Rule 5605(e).
Furthermore, in accordance with English law, our statutes provide for quorum requirements applicable to general meetings of shareholders that differ from the requirement of Nasdaq Listing Rule 5620(c), which requires an issuer to provide in its bylaws for a generally applicable quorum, and that such quorum may not be less than one-third of the outstanding voting stock. English law does not have a regulatory regime for the solicitation of proxies applicable to us, thus our practice varies from the requirement of Nasdaq Listing Rule 5620(b), which sets forth certain requirements regarding the solicitation of proxies. In addition, we may opt out of shareholder approval requirements for the issuance of securities in connection with certain events such as the acquisition of stock or assets of another company, the establishment of or amendments to equity-based compensation plans for employees, a change of control of us and certain private placements. To this extent, our practice will vary from the requirements of Nasdaq Listing Rule 5635, which generally requires an issuer to obtain shareholder approval for the issuance of securities in connection with such events.
As a result of the above, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers.
We may lose our foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.
In order to maintain our current status as a foreign private issuer, either (a) at least 50% of our ordinary shares must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) at least half of our executive officers and directors must be non-U.S. citizens or residents, (ii) at least 50% of our assets must be located outside of the United States and (iii) our business must be administered principally outside the United States. If we lose this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and stock exchange rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we will incur as a foreign private issuer.
We will be a “controlled company” under Nasdaq corporate governance rules.
A “controlled company” pursuant to Nasdaq corporate governance rules is a company of which more than 50% of the voting power is held by an individual, group, or another company. Immediately after the completion of this offering, SiegCo SA will beneficially own          % of our Class B ordinary shares, representing    % of the voting power of our company. Following the completion of this offering and as long as SiegCo SA beneficially owns at least 50% of the voting power of our company, we will remain a “controlled company.” For more information on SiegCo SA’s ownership of our ordinary shares and the ownership of SiegCo SA, see “Principal shareholders.”
Though we have no current intention to do so, we may in the future elect to rely on the “controlled company” exemptions under the Nasdaq corporate governance rules, in particular in the event that we no longer qualify as a foreign private issuer and therefore cease to be eligible for the exemptions separately provided by such status. As a controlled company, we are eligible
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to and could elect not to comply with certain of the Nasdaq corporate governance standards. Such standards include the requirement that a majority of directors on our board of directors are independent directors and the requirement that we have a compensation committee consisting entirely of independent directors. In such a case, our shareholders would not have the same protection afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance standards.
We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our ordinary shares less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Given that we currently report and expect to continue to report under IFRS, as issued by the IASB, we have irrevocably elected not to avail ourselves of this extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required by the IASB. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
We could be an “emerging growth company” for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our ordinary shares held by non-affiliates exceeds $700 million as of any June 30 (the end of our second fiscal quarter) before that time, in which case we would no longer be an “emerging growth company” as of the following December 31 (our fiscal year end). We cannot predict if investors will find our ordinary shares less attractive because we may rely on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and the price of our ordinary shares may be more volatile.
We do not anticipate paying any cash dividends in the foreseeable future.
We currently intend to retain our future earnings, if any, for the foreseeable future, to fund the operation of our business and future growth. We do not intend to pay any dividends to holders of our ordinary shares. As a result, capital appreciation in the price of our Class A ordinary shares, if any, will be your only source of gain on an investment in our Class A ordinary shares.
If you purchase Class A ordinary shares in this offering, you will suffer immediate dilution of your investment.
The initial public offering price of our Class A ordinary shares is substantially higher than the as adjusted net tangible book value per ordinary share. Therefore, if you purchase Class A ordinary shares in this offering, you will pay a price per Class A ordinary share that substantially exceeds our as adjusted net tangible book value per ordinary share after this offering. To the extent outstanding warrants are exercised, you will incur further dilution. Based on the assumed initial public offering price of  $          per Class A ordinary share, which is the midpoint of the price range set forth on the cover page of this prospectus, you will experience immediate dilution of
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$          per ordinary share, representing the difference between our as adjusted net tangible book value per ordinary share after giving effect to this offering and the assumed initial public offering price. In addition, purchasers of Class A ordinary shares in this offering will have contributed approximately          % of the aggregate price paid by all purchasers of our ordinary shares but will own only approximately          % of our ordinary shares outstanding after this offering. See “Dilution.”
We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our Class A ordinary shares. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, results of operations and financial condition. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.
If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our Class A ordinary shares and our trading volume could decline.
The trading market for our Class A ordinary shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no or too few securities or industry analysts commence coverage of our company, the trading price for our Class A ordinary shares would likely be negatively affected. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our Class A ordinary shares or publish inaccurate or unfavorable research about our business, the price of our Class A ordinary shares would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our Class A ordinary shares could decrease, which might cause the price of our Class A ordinary shares and trading volume to decline.
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Cautionary statement regarding forward-looking statements
This prospectus contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this prospectus can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others.
Forward-looking statements appear in a number of places in this prospectus and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified under the section entitled “Risk factors” in this prospectus. These risks and uncertainties include factors relating to:

general economic, political, demographic and business conditions;

changes in economic conditions in the industries and countries in which our clients operate;

changes in market demand for, and level of spending on, digital marketing and technology;

the intensification of competition from next-generation IT services providers, digital agencies and design firms, large global consulting and outsourcing firms and traditional technology outsourcing IT services providers;

the levels of concentration of our revenue by geography, by industry vertical and by client and changes to such levels of concentration in the future;

our ability to implement our growth strategy, including identifying, acquiring and integrating strategic acquisition targets, and the demands we expect our rapid growth to place on our management and infrastructure;

the success of operating initiatives and our ability to continue to innovate and remain at the forefront of emerging technologies and related market trends;

the availability of skilled IT professionals in Europe and the United States and our ability to attract, retain and effectively utilize such personnel;

changes in wage rates in countries where we operate, particularly with respect to IT professionals, as well as changes in other operating costs;

our ability to retain the services of key management personnel;

changes in foreign exchange rates, especially relative changes in exchange rates between the Euro and the U.S. Dollar, the Swedish Krona, the British Pound, the Canadian Dollar and the Indian Rupee;

our ability to obtain new clients and generate repeat business from existing clients and to manage the length of our selling cycles with our clients;

changes in government regulation and tax matters; and

other risk factors discussed under “Risk factors.”
Moreover, new risks emerge from time to time as we operate in a very competitive and rapidly changing environment. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans,
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intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this prospectus, particularly in the ‘‘Risk factors’’ section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
The forward-looking statements in this prospectus represent our views as of the date of this prospectus. We anticipate that subsequent events and developments will cause our views to change. However, although we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this prospectus.
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Use of proceeds
We estimate that we will receive net proceeds of approximately $      from the sale of the Class A ordinary shares offered in this offering, or approximately $     if the underwriters exercise their option to purchase additional Class A ordinary shares in full, based on an assumed initial public offering price of  $     per share (the midpoint of the range set forth on the cover of this prospectus), after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.
Each $1.00 increase (decrease) in the assumed initial public offering price of  $     per share would increase (decrease) our net proceeds by $     million, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. A 1,000,000 share increase (decrease) in the number of shares we are offering would increase (decrease) the net proceeds to us from this offering, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, by approximately $     million, if the assumed initial public offering price stays the same.
The principal purposes of this offering are to (i) increase our capitalization and financial flexibility, (ii) increase our visibility in the marketplace and (iii) create a public market for our Class A ordinary shares. We currently expect to use the net proceeds from this offering for general corporate purposes, such as for working capital, potential strategic acquisitions of, or investments in, other businesses or technologies that we believe will complement our current business and expansion strategies, opening new offices and hiring additional employees.
However, we have no specific allocation for the use of the net proceeds to us from this offering, and our management retains the right to utilize the net proceeds as it determines. The actual allocation of our resources to the above or other uses will depend on the needs and opportunities that our management perceives at the time of allocation.
Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities. We do not expect that any proceeds will be used to fund dividends to ordinary shareholders.
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Dividends and dividend policy
The amount of any dividends will depend on many factors, such as our results of operations, financial condition, cash requirements, prospects and other factors deemed relevant by our board of directors. We currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay dividends will be made at the discretion of our board of directors and will depend on various factors, including applicable laws, our results of operations, financial condition, cash requirements, prospects and any other factors deemed relevant by our board of directors.
Additionally, we are subject to English law constraints that may affect our ability to pay dividends on our ordinary shares and make other payments. Under English law, we may pay dividends or make distributions only out of our accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less our accumulated, realized losses, so far as not previously written off in a reduction or reorganization of capital duly made. In addition, as a European public limited liability company registered in England, we will not be permitted to declare and pay a dividend or make a distribution if, at the time, the amount of our net assets is less than the aggregate of our called-up share capital and undistributable reserves and if, and to the extent that, the distribution does not reduce the amount of those assets to less than that amount.
At a meeting held on September 10, 2018 our shareholders approved, in accordance with our statutes, the payment of a dividend to SiegCo SA in the amount of  €970,000 for the purposes of discharging a statutory liability owed to us pursuant to certain provisions of the U.K. Companies Act 2006. This dividend was paid on September 10, 2018 and SiegCo SA then made a cash payment to us in the amount of  €964,065, which is equal to the amount of such statutory liability.
In addition, at a meeting held on September 14, 2018, our board of directors approved the payment of an interim dividend of  €0.25 per share, which was paid on            , 2018 in favor of all shareholders of record on such date. On            , 2018, SiegCo SA, our controlling shareholder, used funds received from the interim dividend to pay €             to Cosmoledo SPRL, one of its shareholders, which is owned by our Chief Executive Officer Sebastian Lombardo (indirectly through his ownership of A3 Investments SA), our Co-Chief Operating Officer Tomas Nores (indirectly through his ownership of Two Hundred SL) and our Co-Chief Operating Officer Olivier Padiou, to compensate such officers for their management of the Company in periods prior to this offering. See “Management Discussion & Analysis—Key components of our results of operation—Operating expenses—Administrative costs.”
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Capitalization
The table below sets forth our cash and cash equivalents and consolidated capitalization as of June 30, 2018:

on an actual basis; and

on an as adjusted basis to give effect to the creation of our          -for-one share split, our dual class of ordinary shares, our sale of the Class A ordinary shares in the offering and the receipt of approximately €             ($            ) in estimated net proceeds, based on an offering price of  €             ($            ) per Class A ordinary share (the midpoint of the range set forth on the cover of this prospectus), after deduction of the underwriting discounts and commissions and estimated offering expenses payable by us in connection with the offering, and the use of proceeds therefrom.
Investors should read this table in conjunction with our consolidated financial statements as well as “Use of proceeds,” “Exchange rates,” “Management’s discussion and analysis of financial condition and results of operations,” and the other financial information included in this prospectus. Our capitalization following the closing of the offering will be adjusted based on the actual initial offering price and other terms of the offering determined at pricing.
As of June 30, 2018
(in thousands, except share data)
Actual
As adjusted
Cash and cash equivalents(1)
51,457            
Borrowings from credit institutions (non-current portion)
74,532            
Borrowings from credit institutions (current portion)
4,293
Total borrowings
78,825
Pre-IPO ordinary shares (28,089,433 Pre-IPO ordinary shares issued
and outstanding on an actual basis and prior to our
         -for-one share split; no Pre-IPO ordinary shares issued and
outstanding on an as adjusted basis)
3,521
Class A ordinary shares (no Class A ordinary shares issued and outstanding on an actual basis;           Class A ordinary shares issued and outstanding on an as adjusted basis)
Class B ordinary shares (no Class B ordinary shares issued and outstanding on an actual basis;           Class B ordinary shares issued and outstanding on an as adjusted basis)
Reserves
66,086
Net Income loss attributable to equity holders of the parent
3,299
Non-controlling interests
7,512
Total equity(1)
80,418
Total capitalization(1)(2)
159,243            
(1) Does not reflect €          in dividends paid by the Company after June 30, 2018, net of a capital contribution to us of €964,065. See "Summary financial and other information" for statement of financial position information as of June 30, 2018 that is pro forma for the Company's payment of the dividends. See “Dividends and dividend policy.” Each $1.00 increase (decrease) in the offering price per Class A ordinary share would increase (decrease) our cash and cash equivalents, total equity and total capitalization by €            ($           ) , assuming the number of Class A ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. A 1,000,000 share increase (decrease) in the number of shares offered by us would increase (decrease) our cash and cash equivalents, total equity and total capitalization by €            ($           ).
(2) Total capitalization consists of total borrowings plus total equity.
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Dilution
At June 30, 2018, after giving effect to our          -for-one share split, we had a net tangible book value of  €     million ($     million), or €     ($    ) per share, based on             ordinary shares outstanding after giving effect to our          -for-one share split. Net tangible book value per share represents the amount of our total assets less our total liabilities, excluding goodwill and other intangible assets, divided by the total number of our ordinary shares outstanding.
After giving effect to our          -for-one share split and the sale by us of the             Class A ordinary shares offered by us in this offering, and based on an offering price of  €     ($    ) per Class A ordinary share (the midpoint of the range set forth on the cover of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our as adjusted net tangible book value estimated at June 30, 2018 would have been approximately €     million ($     million), or €     ($    ) per ordinary share. This represents an immediate increase in net tangible book value of  €     ($    ) per share to existing shareholders and an immediate dilution in net tangible book value of  €      ($    ) per share to new investors purchasing Class A ordinary shares in this offering. Dilution for this purpose represents the difference between the price per ordinary share paid by these purchasers and the as adjusted net tangible book value per Class A ordinary share after giving effect to the offering, immediately after the completion of the offering.
The following table illustrates this per share dilution to new investors purchasing ordinary shares in this offering:
Euros
U.S. dollars
(convenience
translation)*
Assumed initial public offering price
Net tangible book value per share at June 30, 2018 after giving effect to our          -for-one share split
Increase per share attributable to new investors
As adjusted net tangible book value per share after giving effect
to our          -for-one share split and this offering
Dilution per share to new investors
            $            
Percentage of dilution in net tangible book value per share for new investors
    %
    %​
*
Convenience translation calculated using the exchange rate last reported by the U.S. Federal Reserve as of June 30, 2018 at the rate of one Euro per $1.1677.
Each $1.00 increase (decrease) in the offering price per Class A ordinary share would increase (decrease) our as adjusted net tangible book value by €     ($    ) per ordinary share (assuming no exercise of the underwriters’ option to purchase additional Class A ordinary shares) and the dilution to investors in the offering by €     ($    ) per ordinary share, assuming the number of Class A ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.
If the underwriters exercise their option to purchase additional Class A ordinary shares in full, as adjusted net tangible book value per share as of June 30, 2018 will increase to €     ($    ) per share, representing an increase to existing shareholders of  €     ($    ) per share, and there will be an immediate dilution of  €     ($    ) per share to new investors.
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Furthermore, we may choose to raise additional capital through the sale of equity or convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. New investors will experience further dilution if any of our outstanding warrants are exercised, new options or warrants are issued and exercised under the 2018 Plan or we issue additional ordinary shares, other equity securities or convertible debt securities in the future. See ‘‘Risk factors—Certain factors relating to our Class A ordinary shares and this offering—If you purchase Class A ordinary shares in this offering, you will suffer immediate dilution of your investment.’’
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Exchange rates
A significant portion of our operating income is exposed to foreign exchange fluctuations, including fluctuations in the exchange rates among the U.S. dollar and the Euro. The following table sets forth, for the periods indicated, the high, low, average and period-end exchange rates for the purchase of U.S. dollars expressed in U.S. dollars per Euro. The average rate is calculated by using the average of the U.S. Federal Reserve’s reported exchange rates on each day for which such information is available during a monthly period and on the last day for which such information is available of each month during an annual period. As of            , 2018, the exchange rate for the purchase of U.S. dollars last reported by the U.S. Federal Reserve was $     per Euro.
The translation rate applied to Euro amounts that have been translated into U.S. dollars was one Euro per $1.1677, the exchange rate last reported by the U.S. Federal Reserve as of June 30, 2018.
(U.S. dollars per Euro)
Period-end
Average for
period
Low
High
Year ended December 31:
2013
1.3779 1.3303 1.2774 1.3816
2014
1.2101 1.3210 1.2101 1.3927
2015
1.0859 1.1032 1.0524 1.2015
2016
1.0552 1.1029 1.0375 1.1516
2017
1.2022 1.1297 1.0416 1.2041
Month ended:
March 31, 2018
1.2320 1.2334 1.2216 1.2440
April 30, 2018
1.2074 1.2270 1.2074 1.2384
May 31, 2018.
1.1670 1.1823 1.1551 1.2000
June 30, 2018
1.1677 1.1679 1.1577 1.1815
July 31, 2018
1.1706 1.1685 1.1604 1.1744
August 31, 2018
1.1596 1.1547 1.1332 1.1720
September   , 2018
64

Selected financial and other information
The selected income statement and balance sheet data of Valtech, presented in Euros, as of December 31, 2016 and 2017 and for the years ended December 31, 2015, 2016 and 2017 is derived from our audited consolidated financial statements prepared in Euros and included elsewhere in this prospectus. The selected income statement and balance sheet data of Valtech, presented in Euros, as of June 30, 2018 and for the six months ended June 30, 2017 and 2018 is derived from our unaudited interim consolidated financial statements prepared in Euros and included elsewhere in this prospectus. We maintain our books and records in Euros and prepare our consolidated financial statements in accordance with IFRS as issued by the IASB.
This financial information should be read in conjunction with “Presentation of financial and other information,” “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements, including the notes thereto, included elsewhere in this prospectus.
Year ended December 31,
Six months ended June 30,
2015
2016
2017
2017
2018
(in thousands)
Euros
Euros
Euros
U.S. dollars
(convenience
translation)*
Euros
Euros
U.S. dollars
(convenience
translation)*
Consolidated statements of
income (loss):
Revenue
184,119 204,589 233,414 $ 272,558 114,673 136,469 $ 159,355
Other revenue
787 3,212 281 328 14 132 154
Total revenue
184,906 207,801 233,695 272,886 114,687 136,601 159,509
Cost of sales
(122,032) (135,872) (154,368) (180,256) (76,688) (88,184) (102,972)
Gross margin
62,874 71,929 79,327 92,630 37,999 48,417 56,537
Commercial costs
(11,462) (13,900) (16,523) (19,294) (8,071) (8,984) (10,490)
Administrative costs
(40,921) (43,259) (50,625) (59,115) (25,153) (29,251) (34,156)
Restructuring costs
(921) (1,360) (1,627) (1,900) (557) (158) (185)
Other income and operating expenses
428 (214) (126) (147) (893) (152) (177)
Goodwill impairment
(1,141) (1,332)
Operating result
9,997 13,196 9,285 10,842 3,325 9,872 11,528
Cost of gross financial debt
(168) (804) (2,378) (2,777) (948) (1,802) (2,104)
Interest income on cash and cash equivalents
25 51 127 148 39 22 26
Other financial income and expenses, net
218 (143) (1,219) (1,423) (840) 311 363
Income before tax from continuing operations
10,072 12,301 5,815 6,790 1,576 8,403 9,812
Income tax expense
(3,135) (3,416) (5,583) (6,519) (1,805) (3,440) (4,017)
Net income (loss) from continuing operations
6,937 8,885 232 271 (229) 4,963 5,795
Income (loss) from discontinued
operations
(1,519) (4,703) (1,684) (1,966) (798) (1,664) (1,943)
Net income (loss) attributable to equity holders of the parent
5,418 4,182 (1,452) $ (1,696) (1,027) 3,299 $ 3,852
Earnings per basic share (attributable to equity
holders)
0.20 0.16 (0.05) (0.06) (0.04) 0.12 0.14
Earnings per diluted share (attributable to equity
holders) . . .
0.19 0.14 (0.05) (0.06) (0.04) 0.11 0.13
Pro forma earnings per basic share (attributable to equity holders)(1)
Pro forma earnings per diluted share
(attributable to equity holders)(1)
Pro forma as adjusted earnings per
basic share (attributable to equity
holders)(2)
Pro forma as adjusted earnings per diluted share (attributable to equity holders)(2)
65

*
Convenience translation calculated using the exchange rate last reported by the U.S. Federal Reserve as of June 30, 2018 at the rate of one Euro per $1.1677.
(1)
On a pro forma basis, to give effect to our       -for-one share split, which will occur immediately prior to the completion of this offering.
(2)
On a pro forma basis, as adjusted to give effect to (i) our          -for-one share split, which will occur immediately prior to the completion of this offering and (ii) the payment of dividends declared after June 30, 2018. See note 24 to our audited consolidated financial statements and unaudited interim consolidated financial statements included elsewhere in this prospectus.
Year ended December 31,
June 30, 2018
pro forma(1)
2016
2017
June 30, 2018
(in thousands)
Euros
Euros
Euros
U.S. dollars
(convenience
translation)*
Euros
Consolidated statements of financial position:
Goodwill
28,247 46,417 57,132 $ 66,713
Intangible assets, net
11,111 20,045 27,273 31,847
Tangible assets, net
7,411 8,339 8,724 10,187
Non-current financial assets,
net
2,754 2,825 2,963 3,460
Other non-current assets
86 100
Deferred tax assets
3,559 2,008 1,972 2,303
Non-current assets
53,082 79,634 98,150 114,619
Accounts receivable and related accounts
57,950 66,059 80,685 94,216
Other current assets
10,838 13,234 13,558 15,832
Cash and cash equivalents
48,577 61,703 51,457 60,086
Current assets
117,365 140,996 145,700 170,134
Total assets
170,447 220,630 243,850 $ 284,744
Total equity
63,529 62,884 80,418 $ 93,904
Provisions – non-current
portion
1,572 2,854 2,413 2,818
Long-term borrowings
42,500 74,438 74,532 87,031
Other financial debt – non-current portion
3,298 16,671 16,789 19,605
Deferred tax liabilities
3,013 4,884 5,625 6,568
Non-current liabilities
50,383 98,847 99,359 116,022
Provisions – current portion
1,456 779 705 823
Short-term borrowings and bank
overdrafts
777 4,218 4,293 5,013
Accounts payable and related accounts
19,676 24,001 27,219 31,784
Other financial debt – current portion
7,399 3,377 1,787 2,087
Other current liabilities
27,227 26,524 30,069 35,112
Current liabilities
56,535 58,899 64,073 74,818
Total liabilities
106,918 157,746 163,432 190,849
Total equity and liabilities
170,447 220,630 243,850 $ 284,744
*
Convenience translation calculated using the exchange rate last reported by the U.S. Federal Reserve as of June 30, 2018 at the rate of one Euro per $1.1677.
(1)
See note 25 to our unaudited interim consolidated financial statements included elsewhere in this prospectus.
66

Management’s discussion and analysis of financial condition and results of operations
The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements as of December 31, 2016 and 2017 and for the years ended December 31, 2015, 2016 and 2017 and our unaudited interim consolidated financial statements as of June 30, 2018 and for the six months ended June 30, 2018 and June 30, 2017 and the notes thereto, included elsewhere in this prospectus, as well as the information presented under “Presentation of financial and other information” and “Selected financial and other information.”
The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in “Cautionary statement regarding forward-looking statements” and “Risk factors.”
Our audited financial statements have been prepared in accordance with IFRS as issued by the IASB. All amounts are in Euros except where otherwise indicated.