On Friday, French IT company Capgemini anticipated a surprising drop in yearly revenue, citing a downturn in the automotive and aerospace sectors, sending its shares down more than 9%
Capgemini’s shares experienced a 9.4% decline by 0728 GMT, resulting in their descent to the bottom of the CAC40 index. The Paris-based company has revised its organic sales projections 2024 to a drop of 0.5% to 1.5%, as opposed to the previously anticipated 0-3% increase.
“The slope of recovery in the second half will be affected by the recent deterioration of the outlook in the automotive and aerospace sectors and the slower recovery in financial services,” Aiman Ezzat, the CEO, stated.
Ezzat informed analysts that the aerospace industry had experienced a slowdown due to supply chain challenges; however, he also stated that this would only temporarily impact growth.
Capgemini disclosed a 3.7% decline in revenue in North America during the second quarter, less than the 7.1% decline observed during the initial three months of 2024. Revenue in North America experienced a 5.4% decline during the initial half of the year.
According to Ezzat, North America experienced the most robust recovery during the first and second quarters.
The market accounted for 28% of the group’s revenue in the year’s first half, making it the second largest. It also hurt Capgemini’s results last year, as it occurred during technological decline.
After June, the group’s total personnel was 336,900, representing a 4% decrease from the previous year.
Capgemini has experienced a decline in recruiting since 2023, resulting in a 5% decrease in resources compared to the previous year. This is the first time this has occurred since 2009.
The group’s revenue for the first half of the year was 11.14 billion euros ($12.09 billion), a 2.5% decrease from the previous year on a reported basis.
The organization reiterated its organic free cash flow and operating margin objectives 2024.
