The Capgemini Group reported Q1 2022 revenues of €5,167 million, up 21,0% year-on-year at current exchange rates and 17.7% at constant exchange rates*.
Aiman Ezzat, Chief Executive Officer of the Capgemini Group, said: “Capgemini delivered an excellent start of the year with a further growth acceleration versus the previous quarter. This is the fourth consecutive quarter with double digit growth. It clearly demonstrates the change of the Group’s growth profile and our ability to gain market share.
We are taking full advantage of the strong alignment of our capabilities and offerings portfolio with the structural demand for digital transformation from our clients. Our digital transformation capabilities coupled with our strong industry focus enable us to be positioned as our clients’ key partner for their most ambitious transformations.
Our brand is strong. We attract and develop the best talent in a very competitive market. We increased our global workforce by 16,000 in the last quarter to reach 340,000 employees worldwide.
I also have a special thought for our Ukrainian colleagues, who are showing exceptional courage and resilience. I would like to thank all our employees around the world, particularly in Poland and Romania, for their great solidarity in these difficult times.”
(in millions of euros)
The Group’s activity experienced a further acceleration in Q1 2022, with growth of +17.7% at constant exchange rates*. The pace of growth has indeed strengthened compared to the 12.5% observed in Q4 2021, across all regions and sectors. Organic growth (i.e. adjusted for Group scope and exchange rates) reached +16.3%, up 3.1 points on Q4 2021.
This strong momentum was primarily driven by growth in Cloud and Data, as well as in the areas of Intelligent Industry and Customer First. Thanks to investment in these fields, the Group is able to capture the structural acceleration in client demand for digital transformation.
OPERATIONS BY REGION
All Group regions reported double-digit growth at constant exchange rates in Q1 2022, reflecting strengthened underlying organic momentum compared to Q4 2021 as observed in almost all regions.
The United Kingdom and Ireland region (12% of the Group revenues in Q1 2022) again enjoyed a particularly robust quarter with revenue growth of +21.3% at constant exchange rates, driven primarily by the Public Sector and Consumer Goods.
The North America (29% of Group revenues) and Rest of Europe (30% of Group revenues) regions grew at constant exchange rates +16.8% and +16.0% respectively. Those regions notably benefited from a stronger growth momentum in Financial Services.
France (20% of Group revenues) reported revenue growth of +11.1% at constant exchange rates, with a robust momentum in the Manufacturing and Consumer Goods sectors.
Finally, revenues in the Asia-Pacific and Latin America region (9% of Group revenues) increased sharply, by +42.6% at constant exchange rates, as Group acquisitions in the region added to strong organic growth.
This regional momentum was fueled by solid sector trends that remain relatively uniform on a global scale. All sectors posted improved growth rates on Q4 2021, in particular the Financial Services sector, as well as the Energy and Utilities sector which returned to growth after several quarters of slight contraction.
OPERATIONS BY BUSINESS
All of the Group’s businesses also accelerated, as Q1 annual growth rates outpaced those of Q4.
Strategy & Transformation (8% of Group revenues in Q1 2022) and Applications & Technology (63% of Group revenues and Capgemini’s core business) services continue to benefit from the broadbased demand for digital transformation, posting growth at constant exchange rates of +32.1% and +20.4%, respectively.
Operations & Engineering total revenues* (29% of Group revenues) grew +12.7% at constant exchange rates. This performance largely reflects strong growth in Engineering services. Infrastructure and Cloud services and Business Services continued to enjoy their solid underlying momentum observed at the end of 2021.
At March 31, 2022, the Group’s total headcount stood at 340,700, up +24% year-on-year. Workforce increased by 31% in offshore centers to 198,900 (58% of the total headcount) and by 16% onshore.
Bookings totaled €5,473 million in Q1 2022, up 26% year-on-year at constant exchange rates. The book-to-bill ratio also improved to 1.06, compared to 0.98 in Q1 2021.
SITUATION IN UKRAINE AND RUSSIA
As early as the end of 2021, Capgemini has proactively taken measures to ensure the safety of its teams and their families in Ukraine, and has implemented continuity plans for its clients. The Group continues to closely monitor developments in the conflict and to support its employees.
In Russia, the Group has clearly stated its intention to discontinue its presence – which is very limited in size and relates to very few international brands present in the country – while respecting the rights of its employees and in full compliance with the applicable legislation.
Capgemini’s exposure to Ukraine and Russia combined is very limited with significantly less than 1% of its revenues and less than 1% of its staff. At this stage, the Group has not identified any impact of this conflict on client demand.
In line with its capital allocation and active share capital management policy, the Group bought back shares totaling €287 million in the first quarter.
As announced last February, the Group’s financial targets for 2022 are:
- Revenue growth of +8% to +10% at constant currency;
- Operating margin of 12.9% to 13.1%;
- Organic free cash flow above €1,700 million.
The inorganic contribution to growth should be 1 point at the lower end of the target range and 2 points at the upper end.