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Thursday 18 February 2021

Capgemini UK returns to organic growth

LogoThe firm-wide pick up in performance reported by Capgemini in Q320 gained momentum during the final quarter of the year. At a headline level, group revenue for the three months ended 31st December rose by 20.8% yoy on a constant currency basis to €4.26b. This brought total FY20 sales to €15.85b up 13.7% yoy. These figures, however, include the impact of the consolidation of recently acquired Altran’s financials. Excluding changes in Group scope, turnovers in the fourth quarter and the full year fell yoy by 2.4% (Q320: -3.6%) and 3.2% respectively. Operating margin for the twelve month period increased by 8% in value to €1.88b, albeit this was down by 40 bps yoy to 11.9% of revenues.

More importantly for the year ahead, bookings continued to increase during the fourth quarter increasing by over 30% sequentially to €5.15b equating to book-to-bill ratio of 121%. There was progress too on sales of digital and cloud related services. These grew by 15% yoy in Q420 and now account for 65% of Capgemini’s global revenue.

From a business portfolio perspective, Capgemini France, the Consulting line of business and the Manufacturing and Services verticals continued to contract organically during the final quarter. The company’s Asia Pacific and Latin America region delivered further robust growth while the company’s other mainland European operations remained stable in Q4. Firm-wide Public Sector sales sustained the pace of growth achieved in the third quarter and demand from the Financial Services accelerated again in the last three months of the year.

Encouragingly from a local perspective, Capgemini UK & Ireland was reported to have returned to yoy organic revenue growth in Q420. The full year operating margin here increased to 15.5% from 15.2% in 2019 to make this the company’s most profitable region.

Presenting the results yesterday, Capgemini CEO Aiman Ezzat was optimistic about the prospects for the coming year in an improving but still uncertain environment. The company anticipates that FY21constant currency revenues will increase by between 7% and 9%, within which c.4.5% will result from inorganic growth. Operating margin is expected to land in the 12.2% to 12.4% range.

Posted by: Duncan Aitchison at 09:22

Tags: results   systemsintegration  

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