Capgemini to invest €2B in AI, H1 revenue rises on momentum in cloud, data and AI
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Capgemini (OTCPK:CAPMF) (OTCPK:CGEMY) said it plans to invest â¬2B in Artificial Intelligence (AI) while announcing its half-yearly results.
"We are developing a portfolio of industry-specific offers and signing strategic partnerships, notably with Google Cloud (GOOG) (GOOGL), and Microsoft (MSFT), while training most of our workforce through our Data & AI Campus to fully leverage the power of generative AI in our operations," said Aiman Ezzat, CEO, Capgemini.
Ezzat added that the company plans to double Data & AI teams to 60,000 in the next three years.
Normalized EPS in H1 grew 15.3% Y/Y to â¬5.80. Revenues in H1 increased +6.9% Y/Y (+7.9% at constant exchange rates - cc) to ~â¬11.43B.
Meanwhile, revenue in Q2 rose +5.2% cc Y/Y to ~â¬5.7B. 
The French IT consultancy company said that a challenging macro-economic environment led to a slowdown in line with Group expectations. The growth in Q2 was thus lower than in the first, +5.2% cc and +4.7% on an organic basis, despite a demanding comparison base (+19.3% cc in Q2 2022).
The performance was steered by momentum in Capgeminiâs high added-value services, especially in the area of Intelligent Industry, and in activities driven by Cloud, Data and AI.
Capgemini noted that momentum remained robust in the U.K., Ireland and Rest of Europe regions in Q2, due to strong growth in Manufacturing and Public Sector. Activity remained buoyant in France also helped by the Manufacturing sector.
However, as in the previous quarter, the deceleration in North America was stronger than at Group level. Revenues in the region were stable at cc on Q2 2022, penalized by the contraction recorded in Consumer Goods & Retail and TMT sectors, plus slowdown in Financial Services, according to the company.
Bookings were ~â¬11.97B in H1, growing +4% cc Y/Y. Operating profit increased 8% Y/Y to â¬1.15B, while operating margin was 12.4%, compared to 12.2% in H1 2022.
The company noted that as per expectations organic free cash flow generation was negative, at -â¬53M in H1.
Outlook:
Capgemini expects 2023 revenue growth to be between +4% and +7% at cc; Operating margin of 13.0% to 13.2% and Organic free cash flow of around â¬1.8B.
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