Capgemini Sees Double-Digit 2020 Revenue Growth, Second-Half Recovery
French consulting and IT services provider Capgemini said on Thursday it expected double-digit revenue growth in 2020 driven by a gradual second-half recovery, crediting diversification for its resilience during the coronavirus crisis.
The company said it planned to reach revenue growth at constant exchange rates of between 12.5% and 14.0% this year.
"We set objectives for 2020 that illustrate the resilience of our revenues, profitability and organic free cash flow," Chief Executive Officer Aiman Ezzat said in a statement.
Capgemini said the sector and geographic diversification of the client base developed in recent years have reinforced the resilience of its business.
The group, however, warned that a sharp deterioration in health conditions or the economic environment in the coming months could undermine the attainment of its objectives.
In July, Ezzat said the French group expected "a gradual recovery" in the third and fourth quarter, but offered no detailed targets.
Capgemini, which operates in nearly 50 countries, offers its services to industries ranging from telecom to aerospace. In June 2019, it took over a smaller rival Altran to respond to customers' needs to outsource engineers as well as research and development teams.
Capgemini also said it expected an operating margin reduction of 0.6 to 0.9 points compared to the 2019 rate of 12.3%. It said its net profit declined by 20% to 311 million euros ($367.20 million) in the first half of the year and confirmed an organic revenue decline of 3.4% reported in preliminary figures in July.
Capgemini rival Accenture narrowed its fiscal 2020 revenue growth forecast to between 3.5% and 4.5% amid the coronavirus-fueled economic slump.
(Reuters)
