Capgemini Q2 Headlines Look In Line But Revenue Guidance Cut On Auto/Aero Weakness; Credit Neg

Rating: NR/BBB+ EUR Spreads ~1bp Wider

• Credit negative report on broad-based weakness and guidance cut – three of the four largest segments saw Q2 revenue declines as did two of the three largest regions. Worsening sentiment around the auto, aero and fin services sectors is flagged as weighing on the H2 outlook.
  
  
• Q2 revenues -1.9% YoY cFX with three of the four largest sectors in decline; Manufacturing (around one-quarter of rev) -1.1%, Fin Services (one-fifth) -5.4%, Public Sector (15%) +3.6%, Consumer (15%) -3.2%.
• Most regions saw revenue decline with Europe (one-third) +0.4%, North America (one-quarter) -3.7%, France (one-fifth) -2.7%.
• H1 operating margin flat YoY at 12.4%; operating profit margin +20bps to 10.3%.
• H1 bookings -1.7% YoY cFX. Q2 bookings described as stable YoY with a book-to-bill ratio of 1.09 described as above the historical average.
• H1 oFCF was EUR 163mn from EUR -53mn in H123. ND rose to EUR 2.8bn from EUR 2bn at FY23 and EUR 3.2bn at H123