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Capgemini reports profits surge, focus on demand for engineers
AFP Capgemini reports profits surge, focus on demand for engineers

Paris (AFP) - French computer services consultancy Capgemini said net profit rose by a quarter last year, and highlighted a shortage of computer engineers in the expanding sector.

The figures, including staff numbers and recruitment, come a day after another European giant in the field Atos, had also reported strong results.

Both companies are expanding fast into emerging markets where demand for a broad range of computer services and systems is rising strongly, including for the financial sector, putting pressure on demand for engineers in various areas of information technology.

Capgemini said it expected a modest improvement in performance this year.

The company said that at the end of 2013 it employed 131,000 people around the world, up from 125,000 in 2012, and had recruited 32,000 people last year of whom 45.0 percent were young people.

Recruiting numbers are given in gross, since there is high turnover in this dynamic sector as engineers move on to other opportunities and higher salaries.

Capgemini said that of the total, 58,000 people worked outside France, an increase of 4.0 percent in the year.

Capgemini now generates 30 percent of its sales outside Europe.

On Wednesday, French group Atos reported a record net profit of 262 million euros ($360.4 million) for 2013 and said that at the end of the year it employed 76,320 people throughout the world, having recruited 10,806 people, of whom 62.0 percent were in emerging markets.

Capgemini said on Thursday that last year, business in the regions of Asia-Pacific and Latin America grew by 12.0 percent, "marked by an increase of sales in Brazil, the drive in the local market in India and the development of financial services in Asia," the company said.

Net profit rose by 25.0 percent to 442 million euros, although sales slipped by 1.7 percent to 10.09 billion euros.

Capgemini's chief executive Pierre Hermelin told a press conference that the sales fall reflected unfavourable currency factors, notably the movement of the dollar, sterling and Brazilian real.

Activity had slowed down at the end of 2012, and 2013 had turned out as expected with a progressive return to internal growth which reached 3.9 percent in the fourth quarter, the group said.

Sales fell in the first quarter, steadied in the second, and returned to growth in the third, Hermelin said.

Internal sales growth was 0.9 percent for the whole year.

- Dividend increase -

Hermelin said that despite a sluggish economic context, "we achieved better performance than we had expected, notably in terms of free-cash flow and operating margins, and this confirms our strategic choices."

The operating margin amounted to 857 million euros or 8.5 percent of sales, or 0.4 percentage points better than in 2012 and slightly better than the target.

The board said it would recommend increasing the dividend payout to shareholders to 1.10 euros per share from 1.0 euro, amounting to 40 percent of net profit.

Hermelin said: "This is rather more than the 35.0 percent usually distributed but we wanted to make this small upwards gesture."

For this year, the company expected a "modest acceleration" of growth and improved profitability.

It expected internal growth of sales of 2.0-4.0 percent and targeted an operating margin of 8.8-9.0 percent, generating free cash flow of more than 500 million euros.

The price of shares in the company was showing a gain of 3.53 percent to 55.8 euros. The overall French market as measured by the CAC 40 index was down 0.38 percent.

At brokers Bryan Garnier, analysts commented that "the results for 2013 and the outlook for 2014 are in line" with expectations, and they welcomed the strong cash flow, a measure of the speed with which money comes in before it has to be allocated.