Capgemini keeps goals as Q3 sales rise

Reuters News
Posted: Nov 07, 2013 1:53 AM

By Dominique Vidalon

PARIS (Reuters) - French technology consultancy Capgemini kept its full-year sales and profitability goals on Thursday as revenue returned to positive growth in the third-quarter amid improving demand in Europe, notably in its core French market.

Capgemini reported a 1.6 percent rise in like-for-like sales to 2.45 billion euros ($3.32 billion), an improvement from a 0.4 percent decline in the second quarter.

"This year, we have reported steady improvement in our performance, quarter after quarter, a trend that should continue in the fourth quarter," Chief Executive Paul Hermelin said in a statement.

Europe's largest IT services group by market value said its outsourcing services returned to growth in the third quarter, while Asia and Latin America posted 14.6 percent growth, and North America, the second-largest contributor to revenue after France, grew 1.3 percent.

France, which had returned to growth in the second quarter, posted a 3.5 percent increase in revenue in the third, but Britain and Ireland contracted 2.5 percent due to a fall in public sector revenue. The rest of Europe grew 0.1 percent.

Bookings reached 1.965 billion euros in the quarter, down slightly from the third quarter of 2012.

Capgemini reiterated its objective of 2013 organic revenue growth in line with 2012 and of an increase in its operating margin of at least 30 basis points to 8.4 percent of sales.

Tech services groups have been facing strong pricing pressure and stiff competition as governments and companies, especially in Europe, cut their IT spending and delay projects in response to slower growth and macroeconomic worries.

The company's rivals also include IBM, Accenture and France's Atos.

Last week Atos posted a 1.8 percent sales fall on a like-for-like basis, hit by weak demand in Europe.

(Editing by James Regan)