Capgemini posts solid H1 2022 performance, raises growth projection
Capgemini SE
Sales of €10,688 million were up +22.7% in H1 2022 from a year earlier, with sales at constant exchange rates growing by 18.5% and 19.3% respectively. Operating margin rate was up 0.2 points to 12.2% and free cash flow increased to €193 million.
The Board of Directors of Capgemini SE, chaired by Paul Hermelin, convened today to review and adopt the accounts of the Capgemini group for the first half of 2022.
Aiman Ezzat, Chief Executive Officer of the Capgemini Group, commented: “The Group achieved a very good performance in the first half. This is the fifth consecutive quarter of double-digit growth and strong bookings demonstrating our strong momentum and market share gains. Our operating margin continues to improve while we kept on increasing our investments in talent and innovation.
These results illustrate the relevance of our strategy in a market driven by structural demand for digital transformation which will remain a priority for our clients in the coming years.
Recently, we supported our clients on major strategic and value-creating projects, leveraging our expertise in cloud, data and intelligent industry. We also enriched our portfolio of sustainability offerings.
The transition to ‘net zero’ is a priority. We therefore raise our targets for emissions reduction and are proud to be one of the first companies in the world to have its targets validated against the new SBTi standard.
Building on this excellent performance, we raise significantly our growth target for the year and confirm our operating margin and organic free cash flow targets.”
Capgemini generated revenues of €10,688 million in H1 2022, up +22.7% on a reported basis and +18.5% at constant exchange rates. Organic growth* (i.e. excluding the impacts of currency fluctuations and changes in Group scope) is +17.2%.
Group growth accelerated in Q2 to reach +19.3% at constant exchange rates and +18.1% organically, confirming the strong momentum observed in the previous quarter.
Intelligent Industry and Customer First business areas, as well as the activities driven by Cloud and Data, confirmed their strong momentum. This illustrates the importance of digital transformation for Group clients and the structural increase in their investments in technology.
Bookings totaled €11,607 million in the first half of 2022, up +22% year-on-year at constant exchange rates. The book-to-bill ratio is 1.09 for H1 and 1.11 for Q2, reflecting ongoing robust commercial momentum.
The operating margin* is €1,301 million, or 12.2% of revenues, an increase of +25% or +0.2 points year‑on-year. As expected, mix and pricing improvement offset the return of certain operating costs, such as travel expenses, and those of developing Group talent.
Other operating income and expenses represent a net expense of €233 million, virtually stable year‑on‑year.
As a result, Capgemini’s operating profit is up +32% to €1,068 million, or 10.0% of revenues.
The net financial expense is €71 million, down €14 million on H1 2021.
The income tax expense is €327 million and includes exceptional tax expenses[1] of €29 million, compared with €56 million last year. Adjusted for these expenses, the effective tax rate is 29.9%, compared with 31.0% in H1 2021 and 29.2% in FY 2021.
Net profit (Group share) is up +50% year-on-year at €667 million for the first six months of 2022. Basic earnings per share rose by +49% year-on-year to €3.91, while normalized earnings per share* increased +36% to €4.87. Normalized earnings per share adjusted for exceptional tax expenses rose +29% to €5.03.
The Group generated organic free cash flow* of €193 million, down as expected from €429 million in the same period of 2021.
Capgemini elevates its net zero targets, in line with the Science Based Target initiative (SBTi)’s new Net-Zero Standard. The Group’s new headline net zero target is to achieve a 90% reduction in all carbon emissions across scopes 1, 2 and 3 by 2040 compared to a baseline of 2019. At the same time, Capgemini has also set more ambitious near-term (2030) targets. These changes reflect its continued commitment to address climate change in line with the latest climate science, and puts Capgemini amongst the first companies globally to have their net zero targets validated against the new SBTi standard.
In addition, the Group has launched a unique Energy Command Center (ECC), which uses digitalization and the exploitation of measured and projected data to monitor and manage energy performance on its campuses in India, which account for about a quarter of the Group’s energy footprint. With an estimated 20% reduction in energy consumption since its launch, the ECC is making a material contribution to its sustainable development initiatives.
Finally, Capgemini continues its efforts to increase the diversity of its talent and to offer an inclusive work environment. As a result, the proportion of women in the Group’s global workforce rose by 0.7 points in the first half of 2022, to 36.5%. In addition, 94% of the Vice President population has completed inclusion and cognitive bias training in the past 18 months to strengthen the culture of inclusion across the Group. In recognition of its transparency and progress on Diversity & Inclusion, Capgemini was included in 2022 in the Gender Equality Index compiled annually by Bloomberg.
Source: Capgemini news
