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France's Capgemini lifts 2022 growth outlook

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FILE PHOTO: The logo of Capgemini is seen at the company's headquarters in Paris
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By Elena Vardon and Lina Golovnya

(Reuters) -French IT consulting company Capgemini on Thursday raised its growth target for 2022 after demand for digital transformation services boosted first-half revenue.

The firm, which offers services to industries ranging from telecoms to aerospace, now expects revenue growth of 14-15% this year at constant currency, against previous guidance of 8-10%.

"We are very confident for the next semesters," Chief Executive Aiman Ezzat said in a call with journalists.

The company also confirmed its operating margin target of 12.9% to 13.1% for the full year and organic free cash flow target above 1.70 billion euros ($1.73 billion).

The high demand for IT specialists and shortage of available workers has left companies scrambling to attract new talent. Like its peers, Capgemini faces high levels of employee turnover.

It said its quarterly attrition rate reached 27% over the past 12 months, up from 26.2% at the end of the first-quarter, as rates have been stabilising for the past nine months.

"So it should become visible into the reported last 12-month figures sometime in H2," Chief Financial Officer Carole Ferrand said in a call.

The company, which operates in nearly 50 countries, said it had expanded its workforce by 11,400 people in the last quarter, reaching a headcount of 352,100 at the end of June.

The Paris-based group reported first-half revenue of 10.69 billion euros, up 22.7% year-on-year at constant exchange rates, driven by constant growth and high demand for all its business lines, namely in its application and technology services branch.

"This is the fifth consecutive quarter of double-digit growth and strong bookings demonstrating our strong momentum and market share gains," Ezzat said in a statement.

French peer Dassault Systemes on Tuesday also raised its annual forecasts, after a second-quarter sales beat driven by its industrial business.

($1 = 0.9846 euros)

(Reporting by Elena Vardon and Lina Golovnya; editing by David Evans and Susan Fenton)

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