Capgemini sees 2021 profitability above market expectations

(Reuters) – Capgemini on Wednesday said profitability would beat market expectations in 2021, after the group reported full-year results in line with consensus, boosted by growth in its digital and cloud services.

The French consulting and IT services provider expects revenue to rise 7% to 9% in constant currency terms in 2021 from the 15.85 billion euros ($19.07 billion) reported in 2020, with an operating margin of between 12.2% and 12.4%. That would be a return to pre-COVID levels and slightly above the 12.1% consensus view.

The COVID-19 pandemic has given IT services providers, such as Capgemini, a silver lining of an increasing number of companies expediting their move to the cloud to adapt better to a new flexible or exclusively remote working model.

“This (COVID-19) health crisis has clearly accelerated the digital transformation needs of companies across all sectors,” said chief executive Aiman Ezzat in a statement.

Capgemini said its digital and cloud services, which represented 65% of its business in October-December period, grew around 15% in 2020 thanks to clients prioritising spending on digital transformation projects.

The full-year 2020 operating margin dropped by less than the company had guided, to 11.9% from 12.3% the previous year, also beating the 11.7% expected in a company-provided poll.

($1 = 0.8310 euros)

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