Capgemini grows H1 profit by 37%

Date: 04-08-2008
Source: Consultant News

Capgemini grows H1 profit by 37.5%

At constant rates and perimeter, revenue growth for the first half of 2008 came in at 5.3% versus the first half of 2007 (and 7.0% for the second quarter alone) which was in line with the company's forecast.

Total bookings recorded during the first six months of the year reached €4,327 million, up by 3.9% compared to the first half of 2007 (at constant rates), and the "book-to-bill" ratio for Consulting, Technology and Local Professional Services was 115% on average.

Operating margin (7.6%) came in above that achieved for the whole of 2007 (7.4%) and up by 1.5 points compared to the first half of 2007 (6.1%). Operating profit (€288 million) was up by €59 million (25.8%) compared to the 1st half.

Taking into account net finance expense of €15 million and income tax expense of €42 million, profit for the period came in at €231 million, up by 37.5% compared to the first half of 2007. Earnings per share increased from €1.16 to €1.61.

Capgemini is now anticipating like-for-like revenue growth of between 4% and 5% for full-year 2008, and reaffirms its target operating margin of 8.5% in 2008 (versus 7.4% in 2007).

Capgemini attributed its North American revenue increase of 4.5% to "very good performance" by its Local Professional Services and the "dynamism" of its Outsourcing lines.

With the exception of the United Kingdom (which had to compensate for the programmed drop in revenues generated with the British tax authorities, HMRC), all regions posted growth. Benelux, driven by a strong performance from Outsourcing, registered growth of 10.8%; France (which has again become the company's main region) advanced by 7.0%, and the rest of Europe was up by 10.5%, thanks in particular to an excellent performance by the Nordic countries and Southern Europe. Similarly, all regions made profitability gains: operating margin in France returned to a respectable level (5.0%), and the United Kingdom and Ireland advanced by 1.5 points, while Benelux continued to deliver the company's best performance (14.4%) ahead of the rest of Europe (10.6%).

Local Professional Services (Sogeti) achieved the strongest growth for this half (+11.4%) and maintained a particularly sustained pace in North America, Benelux, Germany and the Nordic countries.

Consulting Services recorded growth of 7.6%, reaping the benefits of the introduction of a dedicated unit in North America, and strong performances in the United Kingdom, Benelux and countries in Southern Europe. This business achieved the best profitability for this half year (13.3%) and made the biggest advance compared to the first half of 2007 (+5.2 points).

Technology Services grew more modestly by 4.1% but actual growth was more than two points higher when the volume of business carried out for other Group disciplines is taken into account. Operating margin for this business improved by nearly 1.5 points to 9.2%, and progress was made in nearly all regions.

Outsourcing grew by 3.2%. The lower contribution from the HMRC contract was more than offset for by new bookings recorded across the company's regions, including the United Kingdom. Operating margin improved slowly but steadily, reaching 4.7% of revenues.

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