Capgemini fourth quarter sales beat estimates amid strong cloud demand

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Capgemini fourth quarter sales beat estimates amid strong cloud demand
Credit: © Reuters.

By Scott Kanowsky -- Capgemini SE (EPA: CAPP ) posted fourth quarter sales that came in above estimates, as client demand for cloud and data services remained strong despite larger macroeconomic headwinds.

Sales at the French information technology firm grew by 14% at constant exchange rates in the final three months of 2022, beating expectations of 12%.

Bookings also rose by 11.4% to €6.7 billion (€1 = $1.0669), corresponding to a book-to-bill ratio of 1.16. Analysts at ODDO BHF called the figure "solid."

The Paris-based group flagged persistent headwinds from rising interest rates, elevated inflation, and the war in Ukraine, but said it has still seen "structural demand" from large corporations and organizations for "digital transformation projects covering an increasing scope of their value chain."

"Continued momentum in Cloud and Data reflects the priority given by Group clients to their investments in technology," the company said in a statement. "These investments are increasingly made as part of high added-value strategic projects requiring strong industry expertise."

For 2023, Capgemini guided for revenue growth of between 4% to 7% at constant currency, with an operating margin of 13% to 13.2% and organic free cash flow of around €1.8B.

The ODDO BHF analysts said the outlook was roughly in line with its forecasts, but cautious enough to leave room for an annual earnings beat if the broader trading environment does not deteriorate dramatically.

Shares in Capgemini were higher in early European trading on Tuesday.

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