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As expected, the Q3 23 showed a further growth slowdown. Organic revenue was up by +2%. North America was still the weakest geographic area with lower revenue at constant currency (-4%) due to customer investments reduced in the TMT sector and financial services. Inversely, the Europe and the rest of world regions saw growth. In Q4 23, revenue should be in the range -1.5%/+0.5% at constant currency. Regarding the operating margin, the high-end of the guidance (13.2% of revenue) is now expected.
Companies: Capgemini (CAP:EPA)Capgemini SE (CAP:PAR)
AlphaValue
Organic revenue growth slowed in Q2 23 (+4.7%), slightly above expectations. Capgemini was affected by the stable revenue at constant currency in North America. Conversely, the improvement in the operating margin (+0.2pt to 12.4% of revenue) was a good achievement in H1 23. The positive price and project mix effect more than offset cost inflation. 2023 guidance was reiterated, the only change being revenue growth in the mid-point of the target range instead of in the mid-point or above the mid-p
In Q1 23, the slowdown in growth was weaker than expected. Organic revenue growth (+10.1%) was driven by Europe. Manufacturing and the Public sector were the most dynamic verticals. There were delays and cost cutting in Financial services which impacted revenue growth in North America. A further slowdown should occur in Q2 23 vs Q1 23 as expected. Guidance is unchanged and Capgemini now anticipates revenue growth at the least in the mid-point of the guidance range.
In Q4 22, organic revenue growth was strong (+12.8%) and above expectations despite a sequential slowdown in all geographic areas. In 2022, the operating margin was 13% of revenue (+0.1pt), in line with guidance. This was the combination of a positive project mix, price increases, higher travel and facilities costs and wage inflation. Given the uncertain macro-economics and persisting inflation, 2023 guidance includes revenue growth of +4-7% at constant currency (+3.5-6.0% organically) and an op
In Q3 22, organic revenue increased strongly (+14.3%) thanks to high demand in digital transformation. The book to bill ratio reached 98% (vs 109% in H1 22). Q3 is generally lower than Q4 and the order intake has been going well since the beginning of Q4 22. Capgemini is confident that it can reach the high end of the revenue growth guidance in 2022 suggesting c.+10% organically in Q4 22. Capgemini anticipates slower growth in 2023 given the tougher macroeconomic backdrop which is hardly a surpr
Capgemini had a very strong Q2 22 with an acceleration in organic revenue growth sequentially (+18.1% vs +16.3% in Q1 22) and high bookings (+18.8% on constant currency). Price increases and a favourable service mix offset wage inflation, higher hiring and training costs and the return of operating costs like travel expenses. The operating margin improved (+0.2pt to 12.2% of revenue). The Group revised substantially higher its revenue growth guidance on constant currency.
Capgemini had a buoyant Q1 22 with organic revenue growth of +16.3%, high order intake and increasing attrition rate (26.2%). The digital transformation is driving IT services. Capgemini benefited from high demand for cloud services, data & AI, digital solutions (intelligent industry, customer first, enterprise management, sustainability) and cyber security services. 2022 guidance is unchanged.
Capgemini had a very strong Q4 21 with organic revenue growth of +13.2% and high bookings. In 2021, Capgemini delivered organic revenue growth (+10.2%) slightly above the high-end of guidance, a significant improvement in the operating margin (+1pt to 12.9% of revenue vs guidance >12.7% of revenue) and organic free cash flow of €1.87bn vs guidance >€1.7bn. A positive trend is expected in 2022 despite the shortage of skilled IT people in the market and wage inflation.
Capgemini had a very good Q3 21. Organic revenue growth surged by +13.2% and even accelerated sequentially (+12.9% in Q2 21). Revenue growth was widespread geographically, by verticals and business line. Capgemini is benefiting from strong customer demand for innovation and digital transformation and the group’s large services portfolio meets demand. 2021 guidance is upgraded at the top line (+14.5-15% at constant currency, including acquisitions), of which +9-10% organically, and the operating
Organic revenue growth accelerated in Q2 21 (+12.9%) thanks to strong demand for the digital transformation. Capgemini posted growth in all verticals, all geographic areas and all businesses. In H1 21, the operating margin reached 12% of revenue (1.2pt) thanks to the strong top line (+7.1% organically), higher utilisation rate and the cost synergies related to Altran. Capgemini revised upwards 2021 revenue growth at constant currency, the operating margin and organic free cash flow.
The trend in organic revenue (+1.7%) was better than expected in Q1 21, while the return to organic growth was anticipated in Q2 21. An improvement in activities was seen in all sectors and all geographic areas. The group employs a strong portion of employees in India and Brazil where the COVID-19 pandemic is severe. Capgemini has not had operational disruption up to now and does not see any issue in the coming weeks. 2021 guidance is maintained.
In Q4 20, the decrease in organic revenue slowed sequentially. The commercial activity was strong with a book-to-bill ratio of 121%. In 2020, Capgemini beat expectations with an operating margin of 11.9% of revenue (-0.4pt), which is above the high range of guidance. Organic free cash flow was strong (above €1bn). The outlook is positive with the confirmation of organic revenue growth returning in Q2 21 and an operating margin at 2019’s level in 2021.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Capgemini. We currently have 143 research reports from 4 professional analysts.
Journeo has confirmed record results for FY23A, in-line with recent upgraded expectations across the board. FY23A revenue increased significantly by 118% to £46.1m (including 20% organic growth) and Adj PBT increased 270% to £4m, representing a near doubling of the Adj PBT margin. Journeo has positioned itself for a period of sustained growth following the transformational Infotec acquisition, the bolt-on MultiQ acquisition and ongoing R&D in the existing business. Journeo looks compelling on an
Companies: Journeo plc
Cavendish
Craneware is the market leader in value cycle SaaS provision in the US with a 40% market penetration and the ambition to become ubiquitous in US hospitals. The shackles of Covid disruption, digestion of the Sentry acquisition, and the transitioning of its customers to the fully cloud based Trisus platform, have fallen away and opened up new sales opportunities for the group. While the shares have out-performed strongly, multiples look reasonable compared with peers. We calculate a DCF based fair
Companies: Craneware plc
Capital Access Group
In 2023, the company delivered strong 13% organic constant currency revenue growth and Adjusted EBITDA in line with expectations, even after including one-off inventory provisions.
Companies: Big Technologies PLC
Zeus Capital
Companies: CML Microsystems Plc
Shore Capital
Companies: FOG PEB KBT EMR TIME GETB JNEO
The trading update confirms revenues in line with our expectations. Excess inventory flow through and market softness in China have impacted CML’s core business, but Microwave Technologies Inc (MwT) is performing ahead of expectations. The net effect, along with MwT acquisition related costs, is that Reported PBT and EBITDA are to be lower than expectations, but not substantially so. The long-term investment case is founded upon the opportunity in next-generation wireless and, with £18m cash and
Progressive Equity Research
Companies: Nanoco Group PLC
Turner Pope Investments
Nanoco, the world-leading provider of cadmium-free Quantum Dot technology, has reported positive 1H24 results, and stated that FY24 performance is expected to be in-line with market expectations. We reiterate our FY24E forecasts. Operationally, the company has achieved strong progress over the past six months, and the interims statement includes further progress on the company’s next-generation revenue programmes being implemented post period end. We maintain our 60.2p price target.
GetBusy’s FY23 results show organic revenue growth of +10% to £21.1m, FY23 adjusted EBITDA +£0.1m ahead of our +£0.3m upgrade at the January trading update, and a promising outlook that leads us to reiterate our FY24E forecasts. At constant currency, ARR grew +10% yoy to £20.5m, recurring revenue grew +12% to £20.3m, and net revenue retention of 100.0% per month reflects upselling and price increases, with gross monthly churn of 0.8% per month vs 0.9% in FY22. Within SmartVault, the July 2023 la
Companies: GetBusy Plc
Companies: PMG DUKE CMCL BOOM
Companies: FOG TND BVXP ACC HDD
Broadcast playout automation solutions provider Pebble Beach has reported confident FY23 results to Dec 2023 in line with updated January trading update expectations, and has announced the much-anticipated Project Oceans will launch as PRIMA (Platform for Real-time Integrated Media Applications) in April 2024. This underpins a mid-term 80% recurring revenue ambition and expansion in addressable market. FY23 delivered +11% revenue growth to £12.4m, which benefitted from the unwind of defensive in
Companies: Pebble Beach Systems Group PLC
Companies: LPA SOLI NANO QTX
Companies: Windward Ltd.
Canaccord Genuity
Companies: BILN IGP RBN SBTX
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