Capgemini reports muted growth in 2023

Revenue for the French reseller was up 2.4 per cent to €22.5bn

Capgemini has reported 2.4 per cent revenue growth to €22.5bn (£19.2bn) in its full-year results for 2023.

The French reseller also raised operating margins by 30 basis points to 13.3 per cent of revenues and increased net profit by seven per cent.

"2023 was another year of growth for the group with improving profitability and a strong cash flow conversion, despite a slowdown in our industry. Our results illustrate the strength of our positioning, our agility and our resilience," said Aiman Ezzat, CEO of Capgemini.

The results also showed organic free cash flow of €1.9bn and proposed dividend of €3.40 per share.

"In 2023, we continued to invest in building the capabilities and solutions to help them transition to an increasingly digital and sustainable economy," said Ezzat.

"This was notably the case for generative AI, which is top of mind for all large organisations."

Capgemini recently signed of a multi-year collaboration with AWS, designed to accelerate adoption of generative AI solutions.

The duo aims to help clients realise the business value of adopting genAI, while navigating challenges including cost, scale, and trust.

The solutions provider also announced a €2bn investment plan last July, which Ezzat said will continue to strengthen and upskill the company, investing in solutions and "leveraging a broad ecosystem of technology partners including Microsoft, Google, AWS, Salesforce and Mistral AI".

Headcount, however, was down in 2023. As of 31 December, Capgemini's workforce stood at 340,400, a five per cent decrease year-on-year.

Regional results

In the UK and Ireland - which represents 12 per cent of the group's revenues - Capgemini maintained momentum in 2023 with revenues growing 7.9 per cent at constant exchange rates.

The reseller said the performance was primarily driven by the public sector as well as the consumer goods & retail and manufacturing sectors, while activities in the financial services and TMT sectors were roughly stable year-on-year.

The operating margin reached 18.6 per cent compared with 18 per cent in 2022.

The rest of Europe region (30 per cent of group's revenues) also performed well with revenue growth of 7.6 per cent fuelled to a large extent by the public sector and the manufacturing sector.

The energy & utilities sector was also buoyant while growth in financial services was limited.

The operating margin was 11.7 per cent, up from 11.6 per cent a year earlier.

In France (20 per cent of the group's revenues) revenues went up by 6.1 per cent, mainly supported by strong growth in the manufacturing and consumer goods & retail sectors, while TMT was the only sector to contract in 2023.

The operating margin further improved by 50 basis points year-on-year to 12.6 per cent.

Q4 slow-down

As predicted by the service provider in its H1 2023 results, the more challenging macroeconomic environment led to a further slowdown through the year.

Group revenues in the final quarter of 2023 totalled €5.6bn, virtually stable at -0.2 per cent at constant exchange rates, and -0.9 per cent when adjusted for the group scope and exchange rate impacts.

Ezzat's post renewed

Alongside the results, Capgemini's board of directors also announced the unanimous decision to renew CEO Aiman Ezzat's term of office for a further four years.