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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 154 research reports from 4 professional analysts.
Interims to January are in line with the February TU, and materially unchanged forecasts for the FY July 2024. After the well flagged expected 1H24 revenue movement of -7% (vs 1H23 which had been strengthened by c£2m perpetual licence sales in the US), prospects for the second half are supported by several new contracts that will generate revenue in 2H24, in addition to material contract delivery milestones from existing large projects such as major TRACS Enterprise, Railhub deployments, and Rem
Companies: Tracsis plc
Cavendish
Eleco’s FY23 results show robust organic recurring revenue growth of +17% with recurring revenue +22% to £20.7m, adj EBITDA +2% ahead of the January update, and a confident outlook with Q1 ARR already at £24.5m vs £22.6m at FY23. At this point, the excellent start to FY24 leads us to reiterate our FY24-26E revenue, adj EBITDA, EFCF, and DPS, and we include the April 2024 acquisition of Vertical Digital in our FY24-26E net cash, as we explain below. As Eleco builds upon the successful acquisition
Companies: Eleco Plc
Made Tech has won a material expansion (worth up to £19.5m/2yrs) with a long-standing customer, The Department for Levelling Up, Housing and Communities (“DLUHC”). Coming off the back of a soft H1 bookings performance, we expect this win to materially boost investor sentiment and reassure how notwithstanding a tough backdrop (given an impending general election) MTEC continues to outcompete legacy providers and in-so-doing, grow its share of wallet with large/strategic customers. Landing near FY
Companies: Made Tech Group PLC
Singer Capital Markets
Companies: 88E CNC FTC TRCS HEIQ CREO ZAM
Companies: 1Spatial Plc
Liberum
Companies: Cerillion Plc
Following the updated guidance published last week, Alphawave reported a 74% YoY increase in revenue to US$321.7m for FY23 generating adjusted EBITDA of US$62.6m, up 34% YoY. As previewed, bookings in 1Q24 were strong at US$117.9m, up 20% YoY and ahead of guidance. The results release and conference call confirm that revised guidance mainly reflects a more conservative approach to revenue recognition under new CFO, Rahul Mathur, and an acceleration in the pace at which Alphawave is pivoting away
Companies: Alphawave IP Group PLC
Capital Access Group
tinyBuild’s FY23 results confirmed a sharp drop in revenue and swing into adjusted EBITDA losses, as well as asset impairments and high cash burn. After already making $10m of annualised cost savings, the company continues to run-down its cash balance and now relies on a H2-weighted release schedule to reduce cash outflows.
Companies: tinyBuild Inc.
Zeus Capital
Cerillion has announced a very solid update, as H1 sales and EBITDA are both up 10% y/y to £22.5m and £10.9m respectively, notwithstanding the exceptionally strong base period (sales and EBITDA +27% and +38% resp.). Results therefore point to continued strong customer demand, reflecting how Cerillion’s out-of-the-box product continues to resonate and gain adoption, particularly in a ‘budget conscious’ environment, by offering faster time to market, greater configurability and at a lower cost. Me
Companies: Synectics PLC
Shore Capital
24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi
Companies: FTC AGL SRT SOU G4M AOM SUP
Hybridan
As reported in March, underlying EBITDA profitability improved to record levels despite FX headwinds. Further platform and proposition developments were completed, key steps on its digital roadmap, and it has already won 7 contracts YTD. Alongside planned growth in private membership, this will at least offset the loss of one contract. Forecasts are left unchanged today and, as member engagement throttles back up, FX headwinds ease, and proof points of digital efficiency emerge, markets should b
Companies: Ten Lifestyle Group PLC
itim is a disruptive SaaS-based platform that enables store-based retailers to implement a proven Omni-channel solution. This morning, the group has announced an additional professional services contract with its long-standing client, The Entertainer. Following a year-long trial, The Entertainer is opening in over 800 Tesco stores across the UK & Ireland, alongside a supplier agreement for Tesco stores across Central Europe. Under the contract, The Entertainer will extend its use of itim's Unify
Companies: Itim Group PLC
WHIreland
Alphawave Semi has reduced guidance for FY23 and prospectively citing lower revenues from China, changes in expected revenue recognition from long-term contracts, and continuing investment in R&D. The share price has reacted negatively, giving up most of the gains since the trading statement at the end of January. Current consensus, which is a good match for pre-existing guidance, should be reduced, most likely following release of the FY23 results and full 1Q24 trading update due on 23 April. H
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