France's Capgemini sees modest revenue growth in 2024 after quarterly beat

By Lina Golovnya

(Reuters) -French IT consulting group Capgemini on Wednesday posted better than expected quarterly revenue but forecast limited growth for 2024, seeing a soft business environment in the first half of the year.

The Paris-based firm expects a trough in the first quarter before a gradual recovery from the second quarter.

"We hope for slightly faster rebounds in the second half of the year in sectors such as financial services," CEO Aiman Ezzat told journalists in a media call.

Ezzat said he expected an improvement in the operating margin and the market looked at the positive elements in the statement, the shares jumping more than 5% to their highest level in more than two years.

Fourth-quarter revenue came in at 5.62 billion euros ($6 billion), down 0.9% organically but slightly better than the 1.3% decline expected by analysts, according to Stifel.

The company expects its full year revenue to remain flat or at best grow 3% in constant currency terms. It projected the operating profit margin to be in the range of 13.3% to 13.6% this year. Margin stood at 13.3% last year.

The outlook was "understandably conservative," Stifel said in a note.

Capgemini's full-year revenue rose 4.4% to 22.52 billion euros, settling near the lower end of its projected 4%-7% growth, as economic challenges and rising political tensions led to a gradual market slowdown last year.

Ezzat said the company expected to start to see improvement in the U.S. in the second quarter. The North American market, the group's second-biggest, was a drag on its results in the past year amid a tech sector downturn.

Revenues in North America were down 6.6% in the fourth quarter after 4.4% decline in the third quarter.

The group continued to slow hiring and its headcount stood at 340,400 workers at end-December, a 5% fall from a year earlier

The board proposed a full-year 2023 dividend of 3.40 euro per share, up from 3.25 euros per share for 2022.

($1 = 0.9334 euros)

(Reporting by Lina Golovnya in Gdansk; Editing by Jacqueline Wong, Dhanya Ann Thoppil, Miral Fahmy and Keith Weir)