In the six months ended June 30, 2006, the Paris-based company increased operating profit 64.7% to 229m euros ($313m) while net profit more than doubled to 168m euros ($230m) from 71m euros ($97m) in the year-ago period.
The company’s operating margin continues to inch up, reaching 6.1% in the first half from 5.8% in full-year 2006, and it flagged up the increased sourcing of skills from India as a factor. Some 22% of the group’s 80,000 employees are now based in offshore locations, and it is aiming for a margin of 7% for 2007 as a whole.
Sales rose 16.2% to 4.4bn euros ($6bn), and by 11.5% on a constant currency and like-for-like basis. The company highlighted growth of 21.5% in the Nordic region, 13.6% in Southern Europe, and 12.5% in its recovering North American operation. The Benelux region was Capgemini’s most profitable territory with an operating margin of 14.3%, but problems persist in France where it posted a margin of only 2.5%.
Bookings were 4.2bn euros ($5.7bn), down 11% on the level of the year-ago period. New outsourcing orders totaled 1.2bn euros ($1.6bn) which included a 230m-euro ($314m) deal to lead a consortium to manage the IT infrastructure of Dutch water management body Rijkswaterstaat.
Capgemini said it is aiming to grow sales by at least 9% in 2007, which would take it up to 8.4bn euros ($11.5bn). The company’s cash resources fell 72% from the end of last year to 452m euros ($618m), due largely to the $1.25bn cost of acquiring US systems integrator Kanbay International.
Capgemini’s shares have fallen by just under 11% this week which can be partially attributed to the evaporation of the speculation that it is a takeover target for Indian services vendor Infosys Technologies, although investment analysts also said profitability had fallen slightly short of their expectations.
