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Half-Year Results 2010

29 jul. 2010

The key figures are as follows:

(in millions of euros)H1 2009H2 2009H1 2010Change vs. H1 2009Change vs. H2 2009
Operating margin(1)
as a % of revenues
-0.8 point-1.9 points
Operating profit(2)167166200+19.8%+20.5%
Group share net profit
as a % of revenues
+0.6 point
-0.1 point
Net cash and cash equivalents at
the end of the half-year

Although the impact of the global economic crisis on demand for IT services has not been entirely erased, the stabilization of the main markets in which the Group operates is now established and is reflected by steadily improving activity levels. 2010 first-half revenues fell 3.8% compared to the first half of 2009 (and even 6.1% like-for-like, i.e. at constant Group structure and exchange rates) but increased 5.4% (1.8% likefor-like) on the previous half-year. In the 2nd quarter alone, revenues (€2,159 million) increased 5.2% (2.0% like-for-like) on the previous quarter.

Booking volumes also confirmed this positive trend, rising 14% like-for-like on the first half of 2009 (and even 32% in the 2nd quarter alone). Outsourcing Services recorded the greatest increase in bookings (+37%), thanks to the early renewal or extension of several major contracts. Bookings for the three other businesses (Consulting Services, Technology Services and Local Professional Services) increased 4% for the half-year, accelerating significantly in the 2nd quarter (+13%). The book-to-bill ratio for these three businesses was 1.17 for the half-year and 1.28 for the 2nd quarter alone.

Confirming their good match with its clients’ requirements, the five new service offerings(3) launched by the Group at the end of 2009 and the beginning of 2010, represented 36% of total bookings recorded in the first half of the year.

The operating margin (5.8%) is down on the first six months of 2009 (6.6%), but operating profit (€200 million) surged nearly 20% on the first half of 2009, which was affected by particularly high restructuring costs.

After deducting a net financial expense of €38 million and an income tax expense of €61 million, the Group profit for the period (€101 million) is up nearly 30% on the first-half of 2009.

Consolidated net cash and cash equivalents total €809 million at June 30, 2010, down some €460 million on December 31, 2009: this difference is mainly due to increased working capital requirements – usual at this time of year – the payment of the dividend (€0.80 per share, or €122 million in total) and the financing of several small acquisitions for a total net amount of €90 million (mainly IBX in Sweden and Strategic Systems Solutions, a company dedicated to the financial services sector and in which the Group has held a minority interest since the acquisition of Kanbay).

After a particularly tough 2009, the Group prepared itself to face an environment which remained difficult at the beginning of the year, but which it expected to improve steadily. First-half results, both in terms of growth and profitability, confirmed the appropriateness of decisions taken, while the dynamism of bookings validated the assumption that this improvement will continue in the second-half, despite ongoing macroeconomic concerns and significant stock market volatility. In this context, Capgemini Group forecasts revenue growth in the second-half of 2010 of 3 to 5%, like-for-like, on the second-half of 2009. For the year as a whole, the operating margin rate should exceed 6.5%.

Paul Hermelin, CEO of the Capgemini group, confirms that “Strengthened by this above-expectations performance and the marked increase in bookings, the Group will enjoy a return to growth in the second half of the year. We have now relaunched a dynamic recruitment policy and will focus particularly on our five global service lines, in order to satisfy the new expectations of our clients.”


Operations by major region:

France – which remains the Group’s leading “main region” – reported revenues down 2.7% on the first half of 2009, but up 4.4% on the previous half-year (second half of 2009), with the operating margin rate almost unchanged at 5.1%.

– Revenues in the United Kingdom/Ireland region dropped by 5.0%, essentially due to the renegotiation of the terms of a major contract entered into several years previously. The operating margin rate (7.3%), remains, however, one of the best in the Group.

– In North America, revenues for the first six months recorded – due to the termination (scheduled and announced) of a large outsourcing services contract – a drop of 3.9%. Sogeti (Local Professional Services), enjoyed a marked improvement, while Technology Services in the financial services sector experienced a veritable bounce (+30%). The operating margin rate decreased 1 point to 4.3%.

Benelux, where the crisis was the most acute, recorded a slump in revenues of 12.2% compared to the first half of 2009 but only 2.7% compared to the second half of 2009, thanks to the stabilisation of operations and signs of recovery for Technology Services. The restructuring carried out in 2009 enabled an increase in the operating margin rate of 1.5 points to 9.1%, while operating profit nearly tripled on the first-half of 2009, increasing from €18 to €51 million.

– The other regions reported revenue growth of 4.0%, with an operating margin rate of 7.7%.

Operations by business:

Technology Services recorded a drop in revenues (like-for-like) in line with that reported by the Group. This was principally due to the pressure on prices which heavily marked the second half of 2009 and has since decreased. Nevertheless, activity levels increased by 2.9% between the 1st and 2nd quarters of the year, announcing a significant improvement for the fiscal year. The operating margin rate (5.5%) is comparable to that of the Group.

– The drop in Outsourcing Services revenues (-6.3%) can be fully explained by the reduction in the volume of business under the two contracts referred to above, while the remaining operations (which were particularly dynamic in North America) recorded growth of 4.0%. Further, revenues also increased by 2.9% between the 1st and 2nd quarters of 2010. Thanks to the increasing use of offshore resources and strict control of costs, these operations maintained their operating margin rate (6.7%) at first-half 2009 levels.

Local Professional Services (Sogeti) achieved the Group’s best performance with a return in the 2nd quarter 2010 to 2nd quarter 2009 activity levels and reported a drop in revenues finally limited to 4.1% in the half-year and an operating margin rate down more than 2 points on the first half of 2009.

– As expected, Consulting Services is the business which recorded the greatest contraction in operations (-9.3%), however, extremely rigorous cost management enabled it to see an improvement in its margin rate to 11.1%.


On June 30, 2010 the Group’s total headcount was 95,586, an increase of 6% compared to December 31, 2009, thanks to an extremely dynamic recruitment policy which brought over 13,000 employees into the Group in the half-year (5,000 employees in the 1st quarter and 8,000 in the 2nd quarter). With 62,717 employees, the Group’s headcount in its traditional countries increased slightly on December 31, 2009. The strongest growth concerned offshore employees: principally located in India (26,000 employees at June 30), but also in other Asian countries, Eastern Europe, Latin America and North Africa, offshore staff comprises 32,869 employees and represents 34.4% of the Group’s total headcount.

(1) Operating margin, a key Group performance indicator, is defined as the difference between revenues and operating costs, these being equal to the cost of services rendered (expenses incurred during project delivery) plus selling and general and administrative expenses.
(2) Group operating profit incorporates the charges associated with shares or options granted to a large number of employees, as well as other nonrecurring income and expenses such as goodwill impairment, capital gains or losses on disposals, restructuring costs, acquisition and integration costs of recently acquired companies, as well as the impacts of the curtailment and/or settlement of defined benefit pension plans.
(3) Capgemini created five global service lines focusing particularly on the most promising market segments: data management (Business Information Management) and applications development and maintenance (Application Lifecycle Services) – two offerings launched at the end of last year -;applications testing (Testing Services), smart meters and networks (Smart Energy Services), virtualization and cloud computing (Infostructure Transformation Services) launched in the 1st quarter of 2010.

For more information, visit our results page