Half Year 2024 Capgemini SE Earnings Call Transcript
Key Points
- Capgemini SE (CAPMF) reported a stable operating margin of 12.4% year-on-year, demonstrating resilience in a soft demand environment.
- The company saw an improvement in revenue growth rates in Q2 across almost all businesses, sectors, and regions.
- Bookings totaled EUR11,793 million in H1, leading to a book-to-bill ratio of 1.06, indicating robust commercial momentum.
- Organic free cash flow generation improved significantly, amounting to EUR163 million in H1, up EUR216 million year-on-year.
- Capgemini SE (CAPMF) has increased its investment in go-to-market strategies and is well-positioned to capture the upturn in demand, particularly in generative AI projects.
- Revenues in H1 2024 were down 2.6% at constant exchange rates, reflecting a challenging demand environment.
- The company revised its growth outlook for the full year to a constant currency growth of minus 0.5% to minus 1.5%, down from the initial 0% to 3% guidance.
- The aerospace and automotive sectors experienced abrupt slowdowns, impacting overall growth expectations.
- The recovery in financial services is slower than anticipated, particularly affecting some of Capgemini SE (CAPMF)'s largest clients.
- The company faces ongoing price pressure in a competitive market, which could impact margins if not managed effectively.
Good morning, and thank you all for joining us for the H1 2024 results call. And today, I'll be joined by our CFO, Nivedita Bhagat and our COO, Olivier Sevillia. So as anticipated, the demand environment began to show some signs of improvement in Q2, most notably in North America, globally, clients continued to prioritize efficiency through cost transformation programs and the demand for this press release remained relatively tamed.
Revenues in H1 stands at EUR11,138 million, so down 2.6% at constant exchange rates and as previously stated, Q1 proved to be the trough and revenue growth rate improved in Q2 coming at minus 1.9% at constant exchange rate versus minus 3.3% in Q1.
Bookings totaled EUR11,793 million in H1, leading to a book-to-bill ratio of 1.06 for the period. The booking trends also improved in Q2. The book-to-bill in Q2 was 1.09, which is above historical average and reflect that there is still ongoing robust commercial momentum. The H1 operating
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