The Capgemini Group reported Q1 2024 revenues of €5,527 million, -3.5% year-on-year at current exchange rates and -3.3% at constant exchange rates*.
Aiman Ezzat, Chief Executive Officer of the Capgemini Group, said: “As anticipated, the market continued to slow down in Q1, and we confirm the growth trough is now behind us. We expect the market to gradually pick up toward an attractive exit growth rate in Q4, setting up for a more tangible acceleration in 2025.
The pipeline continues to grow and the demand for large-scale digital transformation projects remains strong. Client focus remains on operational and cost efficiency programs, however we also see good traction for our high-added value services in Intelligent industry as well as for our sustainability offerings.
In generative AI, we launched a new platform to enable clients to experiment with industry-specific use cases, and to industrialize them, at a controlled cost.
In that context, we reiterate all our objectives for the full year.”
|
Revenues (in millions of euros) |
Change |
|||
|
2023 |
2024 |
Reported |
At constant exchange rates* |
|
|
Q1 |
5,729 |
5,527 |
-3.5% |
-3.3% |
In line with the Group’s expectations, Capgemini’s Q1 revenues were down year-on-year at -3.3% at constant exchange rates* and -3.6% organically (i.e., adjusted for Group scope and exchange rates).
In a macro environment which remains soft, large corporations and organizations are still prioritizing operational agility and cost efficiency programs with fast payback, at the expense of non-strategic and discretionary deals. In that context, Capgemini’s high value-added service offerings – most notably in Intelligent Industry, as well as in activities driven by Cloud, Data & Artificial Intelligence – enjoyed a solid traction in Q1.
OPERATIONS BY REGION
At constant exchange rates, revenues in the North America region (28% of Group revenues in Q1 2024) declined by -7.1% year-on-year, a rate similar to Q4 2023. The Financial Services and TMT (Telecoms, Media and Technology) sectors contributed the most to this decline, partly offset by growth in the Manufacturing sector.
Revenues in the United Kingdom and Ireland region (12% of Group revenues) were down -3.2%, mostly driven by the Financial Services and TMT sectors. Conversely, the Services and Energy & Utilities sectors enjoyed solid momentum, as did the Manufacturing sector to a lesser extent.
Activity in France (20% of Group revenues) declined by -2.8%, with some softness in the Manufacturing and Financial Services sectors and a dynamic Public sector.
Revenues in the Rest of Europe region (32% of Group revenues) were almost stable at -0.5%. The underlying performance by sector showed more contrast, with good momentum in the Energy & Utilities and Public sectors and a visible contraction of the TMT sector.
Finally, revenues in the Asia-Pacific and Latin America region (8% of Group revenues) were down -1.7% almost entirely driven by the Financial Services and TMT sectors, while the Consumer Goods & Retail sector proved quite dynamic.
OPERATIONS BY BUSINESS
At constant exchange rates, total revenues*of Strategy & Transformation services (9% of the Group’s total revenues in Q1 2024) were up +1.6% year-on-year at constant exchange rates. This growth reflects client focus on strategic initiatives to transform, optimize and adapt their business and operations to a challenging economic environment, as well as investment in Gen AI.
Total revenues of Applications & Technology services (62% of the Group’s total revenues and Capgemini’s core business) declined by -4.0%.
Lastly, Operations & Engineering (29% of the Group’s total revenues) total revenues contracted by -3.0%.
HEADCOUNT
The Group’s total headcount stood at 337,200 as at March 31, 2024, down 6% year-on-year. The offshore workforce represents 57% of the total headcount, i.e. 192,000 employees.
BOOKINGS
Bookings totaled €5,655 million in Q1 2024, down -3.5% year-on-year at constant exchange rates. The book-to-bill ratio of 1.02 is above the Q1 historical average.
OUTLOOK
The Group’s financial targets for 2024 are:
- Revenue growth of +0% to +3% at constant currency;
- Operating margin of 13.3% to 13.6%;
- Organic free cash flow of around €1.9 billion.
The inorganic contribution to growth should be marginal at the lower end of the target range, and up to 1 point at the upper end.
CONFERENCE CALL
Aiman Ezzat, Chief Executive Officer, accompanied by Nive Bhagat, Chief Financial Officer, and Olivier Sevillia, Chief Operating Officer, will present this press release during a conference call in English to be held today at 8.00 a.m. Paris time (CET). You can follow this conference call live via webcast at the following link. A replay will also be available for a period of one year.
All documents relating to this publication will be posted on the Capgemini investor website at https://investors.capgemini.com/en/.
