(Boursier.com) — Meeting on February 13 in Paris under the chairmanship of Paul Hermelin, the Board of Directors of Capgemini SE examined and approved the accounts of the Capgemini group for the financial year ended December 31, 2023. In 2023, Capgemini achieved a solid performance despite a gloomy economic context, with results superior to or in line with its financial objectives for the financial year .
“After two years of record growth, the persistence of macroeconomic pressures and the resurgence of geopolitical tensions led to a gradual deceleration of the market in 2023 and in line with our expectations” comments the management of Capgemini which achieved a turnover of 22,522 million euros, up +2.4% in published data compared to the 2022 financial year. This represents growth of +4.4% at constant exchange rates, which falls within the range of +4% at +7% targeted for the year. The impact of acquisitions on growth being +0.5 point, the Group’s organic growth (i.e. adjusted for scope and exchange rate effects) amounts to +3.9%.
Order intake amounts to 23,887 million euros, up +2.6% at constant exchange rates compared to 2022. The “book-to-bill” ratio thus stands at 1.06 for fiscal year 2023, and 1.18 for the 4th quarter. This reflects sustained commercial momentum despite the lengthening of decision cycles.
Large companies and organizations have maintained their digital and sustainable development ambitions, while giving priority to strengthening their operational agility and profitability. This translates into strong demand for transformation programs with a rapid return on investment, which rely on the high value-added services offered by the Group, particularly in the field of Intelligent Industry, as well as those based on Cloud, Data and Artificial Intelligence.
Quoting…
This continued evolution of Capgemini’s portfolio of offerings towards more value-creating services, combined with increased operational efficiency, resulted in a 40 basis point increase in gross margin despite inflationary pressures and slowdown in growth.
As a result, the operating margin reached 13.3% of turnover, or 2,991 million euros, up +4% in value compared to 2022. This improvement of 30 basis points is greater than the objective an increase of 0 to 20 basis points set for 2023.
Capgemini’s operating profit stood at 2,346 million euros, or 10.4% of turnover, compared to 2,393 million euros in 2022.
The financial result represents a charge of 42 million euros, compared to 129 million euros in 2022, this change mainly reflecting the increase in interest received in a context of rising rates.
Net income, Group share, increased by +7%
After taking into account the results of associated companies and minority interests, the Group’s share of net income increased by +7% year-on-year to reach 1,663 million euros. Earnings per share (undiluted) also increased by +7% to 9.70 euros. Normalized earnings per share reached 12.44 euros, compared to 11.09 euros in 2022 and 11.52 euros before recognition of the tax charge linked to the effect of the American tax reform.
Organic free cash flow amounted to 1,963 million euros, an amount higher than the objective of “around 1.8 billion euros” set for the financial year. In 2023, Capgemini devoted an amount of 343 million euros to its external growth operations. The Group paid 559 million euros in dividends (corresponding to 3.25 euros per share) and allocated 883 million euros excluding fees to share buyback programs. Finally, the 10th employee shareholding plan, which was very successful and thus contributed to maintaining employee shareholding between 8 and 9% of the capital, gave rise to a capital increase of a gross amount of 467 million dinars. ‘euros.
Proposed dividend of 3.40 euros per share
The Board of Directors has decided to propose to the General Meeting of May 16, 2024 the payment of a dividend of 3.40 euros per share. The distribution rate of net income, Group share, would thus be 35% in accordance with the Group’s historical distribution policy.
France (20% of the Group) recorded an increase in turnover of +6.1%, driven primarily by strong growth in the Industry and Consumer Goods & Commerce sectors. The TMT sector is the only one in decline in 2023. The operating margin rate improved by 50 basis points compared to the previous year, to reach 12.6%.
In the 4th quarter of 2023, order intake increased by +1.7% at constant exchange rates to reach 6,643 million euros, corresponding to a book-to-bill ratio of 1.18.
Declining workforce
As of December 31, 2023, the Group’s total workforce stood at 340,400 people, down 5% year-on-year.
The onshore workforce decreased slightly to 145,800 people, a drop of 2% over one year, and the offshore workforce fell by 7% to 194,600 employees – or 57% of the total workforce.
Capgemini continued to strengthen its financial structure in 2023 thanks to its strong cash generation.
As of December 31, 2023, the Group had cash and cash management assets totaling €3.7 billion. Taking into account outstanding financial debt of 5.7 billion euros and derivative instruments, the Group’s net debt* fell to 2 billion euros, compared to 2.6 billion euros at the end 2022.
For Aiman Ezzat, Managing Director of the Capgemini group: “2023 was a new year of growth for the Group, marked by an improvement in our profitability and high cash flow, in a context of slowdown in our sector. Our results thus reflect the strength of our positioning, our agility and our resilience.
The value we bring to our clients as a partner in their business and technological transformation is now recognized. In 2023, the Group continued its investments to strengthen its skills and develop solutions to support them in this transition to an increasingly digital and sustainable economy.
This is particularly the case in generative AI, a fundamental issue for all large organizations. Today we are a major player in this field. We enable our customers to explore, test and deploy solutions across their organizations that create undeniable value. As part of our two billion euro investment plan announced last July, we continue to strengthen our teams and improve their skills, invest in solutions, and rely on a vast ecosystem of partners technologies such as Microsoft, Google, AWS, Salesforce and Mistral AI.
Regarding our sustainable development offerings, we have also intensified our efforts in 2023. We help our customers accelerate each stage of their transition to net zero emissions, from defining their strategy to adapting their business model and their ability to design sustainable products and services. 2023 was also an important year in terms of ESG, with major actions taken towards a more sustainable and inclusive world.
The Group is well equipped to continue improving its performance in 2024 while the environment is expected to remain sluggish in the first half. This year again, the Group plans to grow, with a low point in growth in the first quarter, to strengthen its operating margin and to maintain its free cash flow generation at a high level.
OUTLOOK
For the 2024 financial year, the Group is targeting the following financial objectives:
Growth at constant exchange rates in turnover of between 0% and +3%;
An operating margin of between 13.3% and 13.6%;
A generation of organic free cash flow of around 1.9 billion euros.
The impact of variations in scope on growth should be minimal at the bottom of the target range and up to 1 point at the top of the range…