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Capgemini revenues slip on European economic weakness

Paul Hermelin

Paris: Capgemini Group, Europe's biggest IT consulting firm, saw a 2.6% drop in revenues in the first quarter of 2013 to €2,499 million, blaming a weak economic environment in Europe and a "negative calendar impact" for the slip.

Consulting Services, Technology Services and Local Professional Services reported an average drop in revenues of 3%.

Emerging markets of Asia and Latin America reported the strongest growth (+6.3%) while the private sector lifted the United Kingdom and Ireland by 2%. Revenue was stable in North America following the slowdown in sales at the end of 2012. France, which remains the group's largest business in terms of revenues, was affected by the economic climate and reported a drop in revenues of 4.8%. The Benelux continued to suffer with revenues down8.7%, though the firm says that market is now stable.

Paul Hermelin, Chairman and Chief Executive Officer of Capgemini commented, "We maintain our annual objectives for revenue growth and operating margin improvement, in spite of the difficult economic climate, particularly in Europe, which is as expected. We continue to pursue the implementation of our three priorities: expanding our offering portfolio to address evolving client needs, recruiting young graduates to maintain a balanced age pyramid and industrializing our processes to increase our competitiveness.

"Thanks to the diversification of our offering portfolio, we are confident in our ability to address recent evolutions in client needs and manage the complexity of their requests."
The firm recorded bookings of €2,171 million in the quarter, similar to the same period in 2012. The combined book-to-bill ratio of Consulting Services, Technology Services and Local Professional Services remains positive at 1.07.

Capgemini says it continued to pursue a balanced approach to recruitment between its historical countries and "offshore" locations. On March 31, 2013, the total headcount of the Group was 126,429 employees. Offshore employees totaled 51,978 (including 41,900 employees in India), representing 41.1% of the total headcount.

The Group maintains its objectives for 2013 and continues to forecast like-for-like revenue growth in line with 2012 (+1.2%).

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