France's Capgemini signals gradual recovery after lower Q1 sales

(Reuters) -French IT consulting group Capgemini reported lower first-quarter revenue on Tuesday because of an anticipated slowdown in the market, but said it expects a gradual recovery through the rest of the year.

CEO Aiman Ezzat said Capgemini expects the market to improve gradually and to reach an attractive exit growth rate by the fourth quarter, setting it up for an acceleration in 2025.

The first quarter likely marked a sales trough for the group, and improvement should start from there, though the second quarter will remain soft, Ezzat told analysts during a post-earnings call.

"We see also a trajectory to Q3, and we're still confident about our exit rate at the end of the year," he added.

Capgemini reiterated that it expects its sales to be flat or grow by up to 3% this year.

Its first quarter revenue fell 3.5% to 5.53 billion euros ($5.92 billion), from 5.73 billion euros a year earlier.

Revenue in North America, Capgemini's second-biggest market making up 28% of its sales, was down 7.1%, compared with a decline of 6.6% in the fourth quarter of 2023.

Order bookings also fell by 3.5% to 5.66 billion euros in the quarter.

The group's headcount was 337,200 at the end of March, a 6% decrease from to same time last year.

Capgemini's shares were down 1% at 203.40 euros per share at 0808 GMT, after rising slightly in early trading.

($1 = 0.9341 euros)

(Reporting by Lina Golovnya and Alban Kacher in Gdansk; Editing by Milla Nissi and Christian Schmollinger)