Daily Management Review

Capgemini Forecasts Double-Digit 2020 Revenue Growth And A Recovery In Second Half


Capgemini Forecasts Double-Digit 2020 Revenue Growth And A Recovery In Second Half
The diversification of its business has helped the French consulting and IT services provider Capgemini to tide over the economic impact of the novel coronavirus pandemic which helped the company to forecast an expected double-digit revenue growth in 2020 along with forecasting a gradual recovery in the second half of the year.
At constant exchange rates, the company hopes to be able to achieve a revenue growth of between 12.5 per cent and 14.0 per cent for the complete year of 2020, the company said.
"We set objectives for 2020 that illustrate the resilience of our revenues, profitability and organic free cash flow," said the company’s Chief Executive Officer Aiman Ezzat in a statement.
The strength and resilience of its business has been reinforced by the company implementing a strategy of sector and geographic diversification of the client base over the past few years, Capgemini said.
The attainment of its objectives could however be undermined by any form of sharp deterioration in health conditions or the economic environment in the coming months, the group also warned at the same time.
Without offering any details of the targets, Ezzat had said in July this year that the French group expected "a gradual recovery" in its business during the third and fourth quarter of the current year.
With a range of services to a wide range of industries - telecom to aerospace, Capgemini currently has its business operations in almost 50 countries all around the world. With the aim of meeting n increase in demands from its customers of outsourcing engineers and engineering jobs as well as research and development teams, the French company had acquired a smaller rival Altran in June 2019.
Compared to the 2019 rate of 12.3 per cent, it expected an operating margin reduction of 0.6 to 0.9 points, Capgemini also said. There was also decline of 20 per cent in the company’s net profit to 311 million euros ($367.20 million) during the first half of the current year, the company said. It also confirmed a 3.4 per cent decline in an organic revenue growth in its preliminary figures in July.
In contrast to the outlook of Capgemini, a slashing of its fiscal 2020 revenue growth forecast to between 3.5 per cent and 4.5 per cent s made by its rival Accenture because of the impact of the novel coronavirus pandemic.