Capgemini Reports Higher Half-Year Net Income Amid Regional Growth

The Tip Desk · June 30, 2010 · 2 min read

The consulting firm saw net income part of the group rise to 127 million euros in the first half of 2011.

Capgemini, the consulting and systems integration firm, reported a net income part of the group of 127 million euros for the first half of 2011, compared to 101 million euros for the same period in 2010. This result represents a result per share of 0.82 euro, up from 0.65 euro a share in the prior year.

Growth was strongest in North America, Brazil, and Asia. In North America, revenue rose 8.2%, or 12.1% at constant exchange rates and scope. The company said the financial sector, consulting, and Sogeti were particularly dynamic in this region, with those activities growing more than 20% at constant rates. The Asia Pacific region recorded the highest growth at 46.9% at current rates and 37.2% at constant rates.

In France, revenue grew 5.8%, which the company described as a clear acceleration over 2010. The operational margin in France rose to 7.6% from 5.1% in the first half of 2010. Conversely, the Benelux region remained affected by a depressed market, with revenue falling 0.4% in the first half of 2011.

By business line, systems integration remained the largest segment, representing 41.3% of revenue and growing 9.6% at constant rates. The company said financial sector services and business process outsourcing were also particularly strong segments during the half-year.

Operating margin for the group was 6,1% of revenue, totaling 289 million euros. The company attributed the limited progression of the margin rate to salary increases granted at the start of the year while selling prices had not yet generally risen. Half-year operating profit was 240 million euros, a 20% increase compared to 2010.

Net consolidated cash decreased by 894 million euros to 169 million euros as of June 30, 2011. This decline was driven by a 154 million euro dividend payment to shareholders, a negative cash flow from activities of 487 million euros, and an investment flow of 172 million euros.

Capgemini acquired six small companies since January 1, including Avantias and Artesys in France, CS Consulting in Germany, BI Consulting in the United States, Praxis (Beijing) Technology in China, and AIVE in Italy,. The company also reached an agreement to acquire Prosodie, a transaction expected to close in the third quarter.

Total headcount rose to 114,274 people as of June 30, 2011, compared to 95,586 on June 30, 2010.

For the second half of 2011, the company maintains an objective of 9 to 10% growth in consolidated revenue, including at least 5% organic growth. It also targets an improvement in the operating margin rate between 1/2 and 1 point higher than in 2010.