Capgemini has reported consolidated revenues of €4,376 million for first-half 2009, virtually identical to first-half 2008. On a like-for-like basis (constant company structure and exchange rates), revenues suffered a modest 2.2% decline in line with forecasts.
Bookings in the first six months of the year represented an amount of €4,433 million, once again mirroring the company’s first-half 2008 figures (€4,497 million). Bookings surged 35% in Outsourcing, but were down 12% on average in the Capgemini’s three other businesses (Consulting Services, Technology Services and Local Professional Services). However, the book-to-bill ratio for these businesses was 1.07.
Operating margin came in at 6.6% of revenues, down one percentage point on the same year-ago period. The fall in operating profit was steeper, down to €167 million as a result of restructuring costs incurred in adapting the company to the changed economic landscape.
Capgemini expects revenues to decline by between 4% and 6% in the second half on a like-for-like basis (constant company structure and exchange rates), resulting in a contraction of 3% to 4% for the year as a whole. Tighter cost control should however permit the company to achieve operating margin of around 7% of revenues.
Operations by region
North America - Revenues for the region advanced 3.1% on a reported basis but shed almost 8% stripping out fluctuations in the dollar. Operating margin came in at 5.1% of revenues (5.8% in first-half 2008).
Europe and rest of the world - France remains Capgemini’s largest region. Revenues retreated 4.6%, although it should be noted that Technology Services reported revenue growth. The United Kingdom and Ireland region, where Outsourcing dominates, delivered strong 12.7% like-for-like growth. Benelux, where the crisis has been particularly severe, saw revenues fall 6.5%, while other regions reported a decline of 4.0% on average. Italy and Asia Pacific turned in upbeat performances, but elsewhere the gloomy economic mood weighed on results. With the exception of Benelux, which nonetheless posted respectable profitability levels (7.5% of revenues), all regions focused on stemming the decline in their operating margin. In France for example, operating margin came in at 4.8% for the period, down only 0.2 percentage point on first-half 2008.
Operations by business segment
Outsourcing Services delivered 2.6% revenue growth on a like-for-like basis (constant Group structure and exchange rates), fulfilling its role as a stabilizing force among the Group’s businesses. Operating margin performed remarkably well, edging up nearly 2 percentage points to 6.5% of revenues.
Technology Services saw revenues slip just 2.6% while profitability was 6.1%. Sogeti, especially sensitive to changes in the economic cycle, managed to stem the decline in its revenues, which retreated 5.4% on the back of a sharp industry downturn. Its operating margin was 9.1%.
Consulting Services, also vulnerable to changes in the economic mood, saw revenues slip 13.4%. In contrast, operating margin remained in double figures at 10.5% of revenues, thanks to a tight rein on operating performance indicators.
At June 30, 2009, the Capgemini group had 89,453 employees, up 3.4% on June 30, 2008 but down 2.4% on December 31, 2008. Based mainly in India, as well as Poland, China, Morocco and Latin America, 28% of the workforce (25,027 employees) was based offshore, versus 26% one year earlier. In the second half of 2009, Capgemini’s Rightshore solutions will be rolled out to Vietnam, with the integration of a development and maintenance platform staffed by around 100 professionals serving French clients in the insurance sector.