Capgemini beats financial targets in 2023 despite market slowdown
PARIS: Capgemini, a global leader in consulting, technology and outsourcing services, announced its 2023 financial results on Tuesday, showing a solid performance in a challenging economic environment.
The Group reported revenues of €22.5 billion, up 2.4% year-on-year, and an operating margin of 13.3%, exceeding its target range. Net profit increased by 7% to €1.7 billion, and earnings per share rose by 7% to €9.70. The Group also generated organic free cash flow of €2 billion, above its target of €1.8 billion.
The Group attributed its success to its high value-added service offerings, especially in Intelligent Industry, Cloud, Data & Artificial Intelligence, which drove strong demand from large corporations and organizations seeking digital transformation and sustainability. Capgemini also benefited from its operational efficiency and its portfolio of acquisitions, which contributed 0.5 points to its growth.
The Board of Directors proposed a dividend of €3.40 per share, representing a payout ratio of 35% of net profit, in line with the Group’s historical distribution. The Group also announced its 2024 outlook, expecting revenue growth of 5% to 8% at constant exchange rates, and an operating margin of 13.5% to 14%.
Aiman Ezzat, Chief Executive Officer of the Capgemini Group, said: “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.
Our clients recognize the value we bring as their business and technology transformation partner. In 2023, the Group continued to invest in building the capabilities and solutions to help them transition to an increasingly digital and sustainable economy.
This was notably the case for generative AI, which is top of mind for all large organizations. We are positioned as a leading player enabling our clients to explore, test and scale solutions for tangible business impact. Through our €2 billion investment plan announced last July, we continue to strengthen and upskill our teams, invest in solutions and leverage a broad ecosystem of technology partners including Microsoft, Google, AWS, Salesforce and Mistral AI.
In terms of sustainability offerings, we also stepped up our efforts in 2023. We continue to help our clients accelerate their transition towards Net Zero through strategy definition, business model adaptation and design of sustainable products and services. 2023 was also an important year on our own ESG roadmap, with major progress achieved towards a more sustainable and inclusive world.
The Group is well-equipped to improve its performance in 2024, while the environment is expected to remain soft in the first half. This year again, the Group expects to grow, with the trough in Q1, improve its operating margin and maintain a superior free cash flow conversion.”
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