Capgemini UK gathers pace

The improving top line momentum seen by Capgemini UK during the second half of FY24 stepped up further during Q125. Revenue in the region for the three months ended 31st March was up 3.8% yoy at constant currency to €728m, driven largely by increases in demand from clients in the financial services, energy & utilities and public sectors. Large wins in the latter during the period included the securing a place on the £1.2bn Digital Capability for Health 2 framework and a new a six-year call-off contract valued at up £100m with HMRC (see here).

The first quarter ended somewhat better than expected at the global level. Q125 turnover declined by just 0.4% yoy to €5.55bn (Q424: -1.1%). The number included a c.€55m contribution from recent acquisitions, most notably the purchase of enterprise data management software and services provider, Syniti last summer. While most of Capgemini’s vertical units delivered an uptick in performance during the period, the firm’s manufacturing sector unit, and within it sales of the firm’s engineering services, continued to struggle. Revenue in the segment was down 5.9% yoy to €1.5bn, albeit the pace of decline stabilised.

Bookings for the first three months of 2025 held up well. These improved by 2.8% yoy to €5.88bn. This was supported by accelerating sales of AI-related services which accounted for c.6% of the new business signed in Q1 (FY24: 4%).

Capgemini CEO, Aiman Ezzat reaffirmed the cautious view of the outlook for the business provided in February. He reported that the firm had not yet seen any material changes to buyer decision making and expects the H125 top line will, as previously anticipated, maintain the H224 cadence to decline by c.1% yoy. For the year as a whole, Capgemini’s revenue growth guidance remains unchanged at between -2.0% to +2.0% at constant currency in FY25. The broader than usual range reflects the uncertainties surrounding both where the USA’s tariff policy will land and what its impacts will be on global trade (see our recent US-UK Tariff Situation report for more detail). It will not be a surprise to see this projection changed come the publication of the H1 results in July.

Posted by: Duncan Aitchison at 08:55

Tags: results   IT+services