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Capgemini posted Q1 2020 result with revenue growth of +2.3%

Posted by Capgemini

Capgemini Group posted consolidated revenues of €3,547 million in the first quarter of 2020, up 2.3% year-on-year at constant exchange rates.

Paul Hermelin, Chairman and Chief Executive Officer of Capgemini Group and Aiman Ezzat, who will become Chief Executive Officer of the Group following the Shareholders’ Meeting of May 20, 2020, commented: “In the unprecedented situation that we are currently navigating, the Group’s priority is the health and safety of our employees and the continuity of the services Capgemini provides to its clients. Above all, we would like to thank all Group team members for their strong mobilization. Thanks to their commitment and the swift implementation of our business continuity plan with, in particular, close to 95% of employees working from home, we were immediately able to offer our clients services tailored not only to their short-term challenges but also to their future environment. This is reflected in the quality of our first quarter growth performance.

This quarter is also marked by the completion of the Altran acquisition. It is a key moment in our history and opens up great prospects, as we firmly believe that innovation, spurred by connected devices and 5G, will continue to drive demand. 

In this new environment, the Group expects the 2nd quarter to be challenging, before a gradual recovery in the 3rd and 4th quarters. It can confidently rely on the higher resilience of its business model and sustained demand for digital and cloud services, as innovative technology becomes even more prevalent in our world.

However, considering the level of uncertainty, specifically the speed of demand recovery exiting the lockdown, Capgemini is not in position to commit to an outlook for 2020 at this stage. Finally, we would like to share the pride we take in our teams working on many solidarity initiatives with creativity and generosity.”

* The terms and Alternative Performance Measures marked with an (*) are defined and/or reconciled in the appendix to this press release.

Q1 revenues totaled €3,547 million, up 3.1% year-on-year. Growth at constant exchange rates* was 2.3%, with currency impacts mainly tied to the appreciation of the US dollar against the euro. Organic growth* (i.e. excluding the impact of currency fluctuations and changes in scope) was 2.0%. Digital and Cloud revenues continued to grow rapidly (approximately 20% at constant exchange rates) to account for over 50% of Group revenues.


As anticipated, regional trends were generally in line with Q4 2019.

North America revenues (32% of Group revenues) slipped slightly as expected, -0.6% at constant exchange rates compared to Q1 2019. Manufacturing and Energy & Utilities sectors weighed down, but Financial Services recorded a slight growth.

The United Kingdom & Ireland region (12% of Group revenues) reported a more modest contraction than in the previous quarter, decreasing 2.6% at constant exchange rates. Financial Services was the main contributor to this trend, while the Manufacturing sector was particularly buoyant.

France (21% of Group revenues) continued its growth trajectory, with revenues increasing 3.3% driven mainly driven by the Public Sector and Services.

Rest of Europe (28% of Group revenues) recorded another robust quarter, with a 5.1% increase in revenues at constant exchange rates. Activity was particularly strong in the Manufacturing and Consumer Goods & Retail sectors.

Finally, the Asia-Pacific and Latin America region (7% of Group revenues) maintained a double-digit growth rate. Revenues grew 11.2% at constant exchange rates, primarily boosted by the Financial Services, Consumer Goods & Retail and Energy & Utilities sectors.


Strategy & Transformation consulting services (7% of Group revenues), grouped under Capgemini Invent, recorded sustained growth of 9.6% at constant exchange rates in total revenues* compared to the same period last year. With no major acquisitions during the period, this growth mainly reflects strong demand from Group customers to support their digital transformation. Unsurprisingly, growth was stronger in the first two months of the year.

Applications & Technology services (71% of Group revenues), the Group’s core business, reported total revenue growth of 2.1% at constant exchange rates.

Finally, Operations & Engineering Services (22% of Group revenues) reported a 3.5% increase in total revenues at constant exchange rates, driven primarily by Cloud Infrastructure Services.


At March 31, 2020, the Group’s total headcount stood at 219,100, up 2.9% year-on-year, with a 2.4% increase in employees in offshore centers to 124,900 (57% of the total headcount).


Bookings totaled €3,403 million in Q1 2020, a 0.8% increase at constant exchange rates following a strong progression in 2019 (+11% for the full year).


As announced on April 2, 2020, Capgemini implemented a squeeze-out on the remaining Altran shares not yet held after its successful friendly tender offer closed on March 30, 2020. Following this procedure, Capgemini holds the entire share capital and voting rights of Altran Technologies and the Altran shares were delisted after the market closed on April 15, 2020. Altran group is fully consolidated in the Capgemini consolidation scope from April 1, 2020.

The Group has now gained access to all cost and operating model synergies. Cost and operating model synergies are anticipated to reach an annual pre-tax run rate between €70 and €100 million in 3 years. At that point in time, commercial synergies should generate between €200 million and €350 million in additional annual revenues, from cross-selling and the development of innovative sectorial offers.

In line with the financing strategy previously announced, Capgemini performed, on April 8, 2020, a €3.5 billion multi-tranche bond issue primarily to refinance the bridge loan in place. This bond offering was a great success with an oversubscription of about 4.5 times. This transaction also extended the average maturity of the Group’s debt by 2.5 years, bringing it to over 6 years. These bonds are rated BBB by Standard & Poor’s, in line with the BBB/stable outlook rating recently assigned to Capgemini.


In this unprecedented context of the global coronavirus pandemic, Capgemini’s priority is the health and safety of its employees and the continuity of services to its clients.

The Group therefore set up prevention and protection measures even before lockdown decisions were made, and is constantly monitoring the decisions and recommendations of local public authorities for their implementation. Through proper planning and timely execution, leveraging its internal investment in technology, Capgemini was among the fastest in the industry to massively deploy work-from-home (close to 95% of productive headcount as of today) across its activities worldwide.

Furthermore, the Group quickly implemented the business continuity plans for its clients, that were prepared well in advance. The Group has demonstrated its agility by being able to quickly offer new services to help its customers adapt their operations to this new environment.


The Group is in a position, particularly thanks to its digital capabilities, to provide all the services requested by its customers. It has already organized its operations for the phasing out of lockdown in certain countries and intends to take advantage of the new opportunities that will emerge.

However, as the uncertainties surrounding the development of the health crisis linked to the COVID-19 pandemic remain significant, the Group is not in a position to commit to an outlook for 2020 at this stage.

Beyond the strength of its financial structure, the Group has substantially improved the resilience of its operations since the financial crisis of 2009. Capgemini is confident on its ability to demonstrate its resilience thanks to :

  • an active management of the cost base, using all available levers;
  • a flexible operating model, based on an agile and decentralized delivery model and a large offshore base;
  • a diversified client base, both by sector and region, which contributes on average to 95% of the following year’s revenues;
  • a portfolio of offers well suited to the current context, with sustained digital and cloud demand and dedicated offers to help its customers cope with this crisis.


In view of this unique situation and the strict cost containment actions put in place, Capgemini has also taken several decisions aimed at building solidarity between the various stakeholders.

On April 27, 2020, the Board of Directors decided to reduce by 29% the dividend proposed for approval at the next Shareholders’ Meeting, from €1.90 to €1.35 per share.

Furthermore, Paul Hermelin and Aiman Ezzat have decided to go beyond the AFEP recommendations by taking two decisions regarding their compensation. They each forgo 25% of their 2020 total compensation as executive directors. In addition, during the period of implementation of partial unemployment in France, their unpaid compensation as executive directors will be transferred to the “Institut Pasteur” to finance research initiatives on COVID-19. These measures were approved by the Capgemini Board of Directors. Significant efforts have also been requested from all the Group’s senior executives with respect to their variable compensation.

Capgemini announced on April 24, 2020 the creation of a “social response unit” aimed at accelerating and amplifying the numerous initiatives already launched by the Group and its employees. The unit is initially focusing on the most urgent needs in terms of public health. It is also working on longer-term projects aimed at developing solutions to address the economic and social impacts on society in the aftermath of the pandemic.

―CT Bureau

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