Capgemini delivers another record performance in 2022
Media
relations:Victoire GruxTel.: +33 6 04 52 16
55victoire.grux@capgemini.com
Investor relations:Vincent
BiraudTel.: +33 1 47 54 50 87vincent.biraud@capgemini.com
Capgemini delivers another
record performance in 2022
-
Revenues of €21,995 million, up +21.1%
-
FY constant currency growth of +16.6% and organic
growth* of +15.3%
-
Q4 constant currency growth of +14.0% and organic
growth* of +12.8%
-
Operating margin* up 10 basis points to
13.0% of revenues
-
+34% increase in net profit, Group share, with normalized
earnings per share* up +25%
-
Organic free cash flow*
of €1,852 million
-
Proposed dividend of €3.25
per share
Paris, February 21, 2023 – The
Board of Directors of Capgemini SE, chaired by Paul Hermelin,
convened on February 20 in Paris to review and adopt the accounts1
of the Capgemini Group for the year-ended
December 31, 2022.
Aiman Ezzat, Chief Executive Officer of the
Capgemini Group, said: “This is another record year for our Group,
with 16.6% constant currency growth and 13.0% operating margin*. We
ended 2022 with good momentum despite a less favorable economic
environment. Therefore, we enter 2023 on a solid footing.
This excellent performance is the result of our
increased client intimacy and the remarkable commitment of our
360,000 team members.
In 2022, we accelerated our investments in
innovation, in digital & cloud and in our sustainability
services. We also reinforced our attractiveness to recruit the best
talents.
As part of our ESG commitments, the average
number of training hours per employee increased by 12% this year
and the carbon footprint per employee was 46% lower than in
2019.
The Group’s transformation over the past few
years enables us to be recognized as a business and technology
partner by our clients across their entire value chain. The Group
is now positioned as a major strategic player in this dual
transition towards a digital and sustainable world.
I am confident in our ability to further
strengthen our position with clients and expand our market
share.”
KEY FIGURES
(in millions of euros) |
2021 |
2022 |
Change |
Revenues |
18,160 |
21,995 |
+21.1% |
Operating margin* |
2,340 |
2,867 |
+22% |
as a % of revenues |
12.9% |
13.0% |
+10 basis points |
Operating profit |
1,839 |
2,393 |
+30% |
as a % of revenues |
10.1% |
10.9% |
|
Net profit (Group share) |
1,157 |
1,547 |
+34% |
Basic earnings per share (€) |
6.87 |
9.09 |
+32% |
Normalized earnings per share (€)* |
9.19 a |
11.52 a |
+25% |
Organic free cash flow* |
1,873 |
1,852 |
|
Net cash / (Net debt) * |
(3,224) |
(2,566) |
|
a Excluding a transitional tax expense of €73 million in 2022,
compared to €36 million in 2021. |
Capgemini recorded another year of strong
growth, with results exceeding or in line with 2022 financial
targets.
In a macroeconomic environment affected by the
war in Ukraine, inflationary pressures and rising interest rates,
the Group is benefiting from the structural demand from large
corporations and organizations for digital transformation projects
covering an increasing scope of their value chain, particularly in
the Intelligent Industry and Customer First areas.
Continued momentum in Cloud and Data reflects
the priority given by Group clients to their investments in
technology. These investments are increasingly made as part of high
added-value strategic projects requiring strong industry
expertise.
The Group reported revenues of
€21,995 million in 2022, up +21.1% vs. 2021 published figures.
Constant currency growth* was +16.6%, above the 2022 target range
of +14% to +15%, which was revised upwards on the publication of
the half-year results. As acquisitions contributed +1.3 points to
growth, organic growth* (i.e. excluding the impact of currency
fluctuations and changes in Group scope) reached +15.3%.
Despite a more demanding economic environment,
momentum exceeded expectations in Q4, with constant currency growth
of +14.0% and organic growth of +12.8%.
Bookings totaled
€23,719 million in 2022, a year-on-year increase of +16.8% at
constant exchange rates, representing a book-to-bill ratio for the
year of 1.08. In Q4, bookings rose +11.4% at constant exchange
rates to reach €6,685 million, corresponding to a book-to-bill
ratio of 1.16.
The operating margin* increased
by +22% to €2,867 million, representing 13.0% of revenues,
compared with 12.9% in 2021. This 10-basis point improvement is
consistent with the 2022 target of an increase of 0 to 20 basis
points. A shift in the project mix, towards more innovative and
value creating offers, more than offset the post-pandemic return of
some operating costs - such as travel and facilities costs - and
the higher cost of developing Group talent.
Other operating income and
expense is a net expense of €474 million, down from
€501 million in 2021.
Capgemini’s operating profit is
therefore up +30% at €2,393 million, or 10.9% of revenues.
The financial expense is €129
million, compared with €159 million in 2021.
The income tax expense is €710
million compared with €526 million last year. It includes €73
million due to the transitional impact of the 2017 US tax reform,
compared with €36 million in 2021. Adjusted for exceptional items,
the effective tax rate is down slightly at 28.1%, compared with
29.2% in 2021.
Net profit (Group share) is
therefore up by +34% year-on-year to €1,547 million, while
basic earnings per share increased by +32% to
€9.09. Normalized earnings per share* is €11.09.
Normalized earnings per share adjusted for the transitional tax
expense is €11.52, up +25% year-on-year.
Organic free cash flow* is
above €1,700 million, as targeted for 2022, and reaches €1,852
million.
In 2022, Capgemini invested €204 million in
acquisitions. The Group also paid dividends of €409 million
(€2.40 per share) and allocated €811 million (net) to
share buyback programs. Finally, the 9th employee share ownership
plan - which proved highly successful and thus contributed to
maintaining employee shareholding above 8% of the share capital -
led to a gross capital increase of €508 million.
The Board of Directors has decided to recommend
the payment of a dividend of €3.25 per share at the Shareholders’
Meeting of May 16, 2023. The corresponding payout ratio is 35% of
net profit (Group share), in line with the Group’s distribution
policy.
OPERATIONS BY REGION
Change in revenues at constant exchange rates |
|
|
Q42022 |
FY 2022 |
North America |
|
+12.3% |
+15.0% |
United Kingdom and Ireland |
|
+15.3% |
+19.4% |
France |
|
+11.9% |
+12.5% |
Rest of Europe |
|
+15.2% |
+16.1% |
Asia-Pacific and Latin America |
|
+19.6% |
+30.6% |
TOTAL |
|
+14.0% |
+16.6% |
All Group regions posted double-digit growth at
constant exchange rates in 2022, driven by strong underlying
momentum visible across almost all sectors.
Revenues in North America (31%
of Group revenues) grew by +15.0%, driven by strong momentum in the
Financial Services, TMT (Telecoms, Media and Technology) and
Manufacturing sectors. The operating margin rate remained virtually
stable at 15.6%, compared to 15.9% in 2021.
The United Kingdom and Ireland
region (12% of Group revenues) recorded another year of strong
growth, with revenues up +19.4%. The Public Sector was once again
very dynamic, as were the Consumer Goods and Energy & Utilities
sectors. The operating margin held at a record level of 18.0%, as
achieved in 2021.
France (19% of Group revenues)
revenues were up +12.5%, primarily fueled by the Manufacturing
sector and, to a lesser extent, the Consumer Goods sector. The
operating margin increased by 190 basis points year-on-year to
12.1%.
The Rest of Europe region (29%
of Group revenues) grew +16.1%, with the Manufacturing and Consumer
Goods sectors as the top contributors. The operating margin
contracted slightly to 11.6% from 12.3% a year earlier.
Finally, revenues in the Asia-Pacific
and Latin America region (9% of Group revenues) increased
sharply by +30.6%, boosted by 2021 Group acquisitions in the region
and solid underlying organic momentum in the Financial Services and
Manufacturing sectors. The operating margin was 10.6% compared with
11.5% in 2021.
Growth rates exceeded expectations in the final
months of the year while, as expected, they slowed slightly on
levels observed since the beginning of the year. This momentum was
visible in all Group regions as well as the main Group sectors.
OPERATIONS BY BUSINESS
Change in total revenues*at constant
exchange rates |
|
|
Q4 2022 |
FY2022 |
Strategy & Transformation |
|
+25.4% |
+28.2% |
Applications & Technology |
|
+14.4% |
+18.0% |
Operations & Engineering |
|
+13.0% |
+13.4% |
All Group business lines also reported
double-digit growth rates in 2022 at constant exchange rates.
Strategy & Transformation
consulting services (8% of Group revenues) reported a +28.2% rise
in total revenues, showcasing the Group’s ability to support
clients’ strategic projects.
Applications & Technology
services (63% of Group revenues and Capgemini’s core business)
reported an +18.0% increase in total revenues, driven by digital
transformation demand from large corporations and organizations
across a growing share of their value chain.
Finally, Operations &
Engineering total revenues (29% of Group revenues) grew
+13.4%, primarily driven by robust momentum in Engineering services
and supported by solid growth in Infrastructure and Cloud
services.
All Group business lines reported stronger than
expected growth in Q4, although slightly lower than in previous
quarters. Strategy & Transformation services
and Applications & Technology services
reported growth at constant exchange rates of +25.4% and +14.4%,
respectively. Operations & Engineering
services revenues grew +13.0% at constant exchange rates.
HEADCOUNT
At December 31, 2022, the Group’s total
headcount stood at 359,600. This 11% increase year-on-year, in a
skilled labor market that remained tight throughout 2022,
demonstrates Capgemini's ability to attract talent to fuel its
growth.
210,300 employees work in offshore centers, some
58.5% of the total headcount, up +0.5 points vs. December 2021.
BALANCE SHEET
Capgemini’s balance sheet structure changed
little in 2022.
At December 31, 2022, the Group had cash and
cash equivalents and cash management assets of €4.2 billion. After
accounting for borrowings of €6.8 billion and derivative
instruments, Group net debt* is €2.6 billion at December 31, 2022,
down compared with €3.2 billion at December 31, 2021.
CORPORATE
SUSTAINABILITY
In line with the commitments of its ESG
(Environment, Social and Governance) Policy presented in December
2021, Capgemini achieved significant progress during the year in
terms of corporate sustainability.
Firstly, in 2022 the Group strengthened its
position as a leader committed to fostering diversity and
inclusion. Regarding gender diversity in particular, the proportion
of women in the Group’s global workforce rose by over 2 points
for the second year running, making the Group one of the fastest
improving companies in its sector: the proportion of women in the
total workforce reached 37.8% at the end of 2022 compared with
35.8% a year earlier, and 24.4% among the Group’s executive leaders
compared with 22.4% at the end of 2021. Capgemini was also awarded
global EDGEplus certification by the EDGE (Economic Dividends for
Gender Equality) Certified Foundation, in recognition of the
Group’s commitment to intersectional equity in all its
dimensions.
In human capital development, the Group provided
17.4 million training hours to employees in 2022, compared with
12.8 million in 2021. This represents a 12% increase in the average
number of training hours per employee, well above the Group’s
commitment to an annual 5% increase. In addition, since 2018,
1.9 million individuals have now benefited from Capgemini’s
many digital inclusion initiatives, of which over 1 million in 2022
alone.
Regarding environmental sustainability,
Capgemini was one of the first companies globally to have its “net
zero emissions” targets validated according to the new tighter SBTi
(Science-Based Targets initiative) net-zero standard published at
the end of 2021. The Group has set more ambitious near-term (2030)
and long-term (2040) carbon footprint targets, with in particular a
90% reduction in all emissions (scopes 1, 2 and 3) by 2040. At the
end of 2022, carbon emissions had already fallen by 29% for the
Group as a whole and 46% per employee against the 2019 baseline set
by the SBTi. Of the many initiatives undertaken, Capgemini’s Energy
Command Center (launched in March 2022) achieved a 29% reduction in
energy consumption across the Group’s Indian campuses compared to
2019 and helped increase the share of renewable energies in the
Group’s electricity consumption - which reached 87% in 2022
compared with 53% in 2021.
Thanks to progress achieved by Capgemini in
2022, the Group was admitted to the Dow Jones Sustainability Index
(DJSI) Europe at the end of the year.
OUTLOOK
The Group’s financial targets for 2023 are:
- Revenue growth of +4% to +7% at
constant currency;
- Operating margin of 13.0% to
13.2%;
- Organic free cash flow around €1.8
billion.
The inorganic contribution to growth should be
0.5 points at the lower end of the target range and 1.0 point at
the upper end.
CONFERENCE CALL
Aiman Ezzat, Chief Executive Officer,
accompanied by Carole Ferrand, Chief Financial Officer, and Olivier
Sevillia, Chief Operating Officer, will present this press release
during a conference call in English to be held today at
8.00 a.m. Paris time (CET). You can follow this conference
call live via webcast at the following link. A replay will also be
available for a period of one year.
All documents relating to this publication will
be posted on the Capgemini investor website at
https://investors.capgemini.com/en/.
PROVISIONAL CALENDAR
May 4,
2023 Q1 2023
revenuesMay 16,
2023 Shareholders’
MeetingJuly 28,
2023 H1 2023
results
The dividend payment schedule to be submitted to
the Shareholders’ Meeting for approval would be:
May 30,
2023 Ex-dividend
date on Euronext ParisJune 1,
2023 Payment of the
dividend
DISCLAIMER
This press release may contain forward-looking
statements. Such statements may include projections, estimates,
assumptions, statements regarding plans, objectives, intentions
and/or expectations with respect to future financial results,
events, operations and services and product development, as well as
statements, regarding future performance or events. Forward-looking
statements are generally identified by the words “expects”,
“anticipates”, “believes”, “intends”, “estimates”, “plans”,
“projects”, “may”, “would”, “should” or the negatives of these
terms and similar expressions. Although Capgemini’s management
currently believes that the expectations reflected in such
forward-looking statements are reasonable, investors are cautioned
that forward-looking statements are subject to various risks and
uncertainties (including, without limitation, risks identified in
Capgemini’s Universal Registration Document available on
Capgemini’s website), because they relate to future events and
depend on future circumstances that may or may not occur and may be
different from those anticipated, many of which are difficult to
predict and generally beyond the control of Capgemini. Actual
results and developments may differ materially from those expressed
in, implied by or projected by forward-looking statements.
Forward-looking statements are not intended to and do not give any
assurances or comfort as to future events or results. Other than as
required by applicable law, Capgemini does not undertake any
obligation to update or revise any forward-looking statement.
This press release does not contain or
constitute an offer of securities for sale or an invitation or
inducement to invest in securities in France, the United States or
any other jurisdiction.
ABOUT CAPGEMINI
Capgemini is a global leader in partnering with
companies to transform and manage their business by harnessing the
power of technology. The Group is guided everyday by its purpose of
unleashing human energy through technology for an inclusive and
sustainable future. It is a responsible and diverse organization of
360,000 team members in more than 50 countries. With its strong
55-year heritage and deep industry expertise, Capgemini is trusted
by its clients to address the entire breadth of their business
needs, from strategy and design to operations, fueled by the fast
evolving and innovative world of cloud, data, AI, connectivity,
software, digital engineering and platforms. The Group reported in
2022 global revenues of €22 billion.Get the Future You Want |
www.capgemini.com
* *
*
APPENDIX2
BUSINESS CLASSIFICATION
- Strategy &
Transformation includes all strategy, innovation and
transformation consulting services.
- Applications &
Technology brings together “Application Services” and
related activities and notably local technology services.
- Operations &
Engineering encompasses all other Group businesses. These
comprise Business Services (including Business Process Outsourcing
and transaction services), all Infrastructure and Cloud services,
and R&D and Engineering services.
DEFINITIONS
Organic growth or like-for-like
growth in revenues is the growth rate calculated at
constant Group scope and exchange rates. The Group scope
and exchange rates used are those for the reported period. Exchange
rates for the reported period are also used to calculate
growth at constant exchange rates.
Reconciliation of growth rates |
Q1 2022 |
Q22022 |
Q32022 |
Q42022 |
FY2022 |
Organic growth |
+16.3% |
+18.1% |
+14.3% |
+12.8% |
+15.3% |
Changes in Group scope |
+1.4 pts |
+1.2 pts |
+1.4 pts |
+1.2 pts |
+1.3 pts |
Growth at constant exchange rates |
+17.7% |
+19.3% |
+15.7% |
+14.0% |
+16.6% |
Exchange rate fluctuations |
+3.3 pts |
+5.1 pts |
+6.3 pts |
+3.5 pts |
+4.5 pts |
Reported growth |
+21.0% |
+24.4% |
+22.0% |
+17.5% |
+21.1% |
When determining activity trends by business and
in accordance with internal operating performance measures, growth
at constant exchange rates is calculated based on total
revenues, i.e. before elimination of inter-business
billing. The Group considers this to be more representative of
activity levels by business. As its businesses change, an
increasing number of contracts require a range of business
expertise for delivery, leading to a rise in inter-business
flows.
Operating margin is one of the
Group’s key performance indicators. It is defined as the difference
between revenues and operating costs. It is calculated before
“Other operating income and expense” which include amortization of
intangible assets recognized in business combinations, the charge
resulting from the deferred recognition of the fair value of shares
granted to employees (including social security contributions and
employer contributions), and non-recurring revenues and expenses,
notably impairment of goodwill, negative goodwill, capital gains or
losses on disposals of consolidated companies or businesses,
restructuring costs incurred under a detailed formal plan approved
by the Group’s management, the cost of acquiring and integrating
companies acquired by the Group, including earn-outs comprising
conditions of presence, and the effects of curtailments,
settlements and transfers of defined benefit pension plans.
Normalized net profit is equal to profit for the
year (Group share) adjusted for the impact of items recognized in
“Other operating income and expense”, net of tax calculated using
the effective tax rate. Normalized earnings per
share is computed like basic earnings per share, i.e.
excluding dilution.
Organic free cash flow is equal
to cash flow from operations less acquisitions of property, plant,
equipment and intangible assets (net of disposals) and repayments
of lease liabilities, adjusted for cash out relating to the net
interest cost.
Net debt (or
net cash) comprises (i) cash and
cash equivalents, as presented in the Consolidated Statement of
Cash Flows (consisting of short-term investments and cash at bank)
less bank overdrafts, and also including (ii) cash management
assets (assets presented separately in the Consolidated Statement
of Financial Position due to their characteristics), less (iii)
short- and long-term borrowings. Account is also taken of (iv) the
impact of hedging instruments when these relate to borrowings,
intercompany loans and own shares.
RESULTS BY REGION
|
Revenues |
|
Year-on-year growth |
|
Operating margin rate |
|
2022(in millions of euros) |
|
reported |
at constant exchange rates |
|
2021 |
2022 |
North America |
6,737 |
|
+28.3% |
+15.0% |
|
15.9% |
15.6% |
United Kingdom and Ireland |
2,561 |
|
+20.4% |
+19.4% |
|
18.0% |
18.0% |
France |
4,276 |
|
+12.6% |
+12.5% |
|
10.2% |
12.1% |
Rest of Europe |
6,437 |
|
+15.7% |
+16.1% |
|
12.3% |
11.6% |
Asia-Pacific and Latin America |
1,984 |
|
+39.7% |
+30.6% |
|
11.5% |
10.6% |
TOTAL |
21,995 |
|
+21.1% |
+16.6% |
|
12.9% |
13.0% |
RESULTS BY BUSINESS
|
Total revenues* |
|
Year-on-year growth |
|
2022(% of Group revenues) |
|
At constant exchange rates in Total revenues*
of the business |
Strategy & Transformation |
8% |
|
+28.2% |
Applications & Technology |
63% |
|
+18.0% |
Operations & Engineering |
29% |
|
+13.4% |
SUMMARY INCOME STATEMENT AND OPERATING
MARGIN
(in millions of euros) |
2021 |
2022 |
Change |
Revenues |
18,160 |
21,995 |
+21.1% |
Operating expenses |
(15,820) |
(19,128) |
|
Operating margin |
2,340 |
2,867 |
+22% |
as a % of revenues |
12.9% |
13.0% |
|
Other operating income and expense |
(501) |
(474) |
|
Operating profit |
1,839 |
2,393 |
+30% |
as a % of revenues |
10.1% |
10.9% |
|
Net financial expense |
(159) |
(129) |
|
Income tax income/(expense) |
(526) |
(710) |
|
Share of profit of associates |
5 |
(4) |
|
(-) Non-controlling interests |
(2) |
(3) |
|
Profit for the period, Group share |
1,157 |
1,547 |
+34% |
NORMALIZED AND DILUTED EARNINGS PER
SHARE
(in millions of euros) |
2021 |
2022 |
Change |
Average number of shares outstanding |
168,574,058 |
170,251,066 |
|
BASIC EARNINGS PER SHARE (in
euros) |
6.87 |
9.09 |
+32% |
Diluted average number of shares outstanding |
173,899,033 |
176,019,736 |
|
DILUTED EARNINGS PER SHARE (in
euros) |
6.66 |
8.79 |
+32% |
|
|
|
|
(in millions of euros) |
2021 |
2022 |
Change |
Profit for the period, Group share |
1,157 |
1,547 |
+34% |
Effective tax rate |
29.2% |
28.1% |
|
(-) Other operating income and expense, net of tax |
355 |
340 |
|
Normalized profit for the period |
1,512 |
1,887 |
+25% |
Average number of shares outstanding |
168,574,058 |
170,251,066 |
|
NORMALIZED EARNINGS PER SHARE (in euros) |
8.97 |
11.09 |
+24% |
The Group recognized a tax expense of €73
million in 2022, compared with €36 million in 2021, in respect of
the transitional impact of the 2017 US tax reform.
Adjusted for this transitional tax expense,
normalized earnings per share is €11.52 in 2022:
(in millions of euros) |
2021 |
2022 |
Change |
Normalized earnings per share (in euros) |
8.97 |
11.09 |
+24% |
Transitional tax (income) / expense |
36 |
73 |
|
Average number of shares outstanding |
168,574,058 |
170,251,066 |
|
Impact of the transitional tax (income) / expense
(in euros) |
0.22 |
0.43 |
|
Normalized earnings per share – excluding the transitional
tax (income) / expense (in euros) |
9.19 |
11.52 |
+25% |
CHANGE IN CASH AND CASH EQUIVALENTS AND
ORGANIC FREE CASH FLOW
(in millions of euros) |
2021 |
2022 |
Net cash from operating activities |
2,581 |
2,517 |
Acquisitions of property, plant and equipment and intangible
assets, net of disposals |
(262) |
(283) |
Net interest cost |
(126) |
(71) |
Repayments of lease liabilities |
(320) |
(311) |
ORGANIC FREE CASH FLOW |
1,873 |
1,852 |
Other cash flows from (used in) investing and financing
activities |
(1,716) |
(1,118) |
Increase (decrease) in cash and cash
equivalents |
157 |
734 |
Effect of exchange rate fluctuations |
134 |
(58) |
Opening cash and cash equivalents |
2,828 |
3,119 |
Closing cash and cash equivalents |
3,119 |
3,795 |
NET DEBT
(in millions of euros) |
December 31, 2021 |
December 31, 2022 |
Cash and cash equivalents |
3,129 |
3,802 |
Bank overdrafts |
(10) |
(7) |
Cash and cash equivalents |
3,119 |
3,795 |
Cash management assets |
385 |
386 |
Long-term borrowings |
(6,654) |
(5,655) |
Short-term borrowings and bank overdrafts |
(87) |
(1,102) |
(-) Bank overdrafts |
10 |
7 |
Borrowings, excluding bank overdrafts |
(6,731) |
(6,750) |
Derivative instruments |
3 |
3 |
NET CASH / (NET DEBT) |
(3,224) |
(2,566) |
1 Audit procedures on the consolidated financial
statements have been completed. The auditors are in the process of
issuing their report.2 Note that in the appendix, certain totals
may not equal the sum of amounts due to rounding adjustments.
- Capgemini_-_2023-02-21_-_2022_Annual_Results
- Capgemini_-_2023_02_21_FY22_infographics
- Capgemini_-_2023_02_21_Q422_infographics
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