Capgemini Reports Lower Growth Compared To Previous Quarters In Q4

Capgemini on Tuesday reported that all its Group business lines reported stronger than expected growth in Q4, although slightly lower than in previous quarters. 

The company’s Strategy & Transformation services and Applications & Technology services reported growth at constant exchange rates of +25.4 per cent and +14.4 per cent, respectively. Operations & Engineering services revenues grew +13.0 per cent at constant exchange rates.

The French conglomerate posted revenues of EUR 21,995 million, up +21.1 per cent in 2022. The company’s FY constant currency growth was +16.6 per cent and organic growth was +15.3 per cent

The Q4 constant currency growth for Capgemini was +14.0 per cent and organic growth at +12.8 per cent. Also, its Operating margin was up 10 basis points to 13.0 per cent of revenues.

During the earnings call, Aiman Ezzat, Chief Executive Officer of the Capgemini Group, said,"Q4 growth came in a bit lower than the high- level of growth enjoyed in the previous quarters. As previously discussed, it reflects a certain level of cautiousness of some of our clients regarding discretionary spend or transformation projects.”

The company in its press note said that revenues in the Asia-Pacific and Latin America region (9 per cent of Group revenues) increased sharply by +30.6 per cent, boosted by 2021 Group acquisitions in the region and solid underlying organic momentum in the Financial Services and Manufacturing sectors. The operating margin was 10.6 per cent compared with 11.5 per cent in 2021.

Meanwhile, Capgemini’s revenues in North America (31 per cent of Group revenues) grew by +15.0 per cent, driven by strong momentum in the Financial Services, TMT (Telecoms, Media and Technology) and Manufacturing sectors. The operating margin rate remained virtually stable at 15.6 per cent, compared to 15.9 per cent in 2021.

As on December 31, 2022, the Group’s total headcount stood at 359,600. This is a 11 per cent increase year-on-year, in a skilled labor market that remained tight throughout 2022.

The company said that 210,300 employees work in offshore centers, some 58.5 per cent of the total headcount, up +0.5 points vs. December 2021.