Capgemini Q1 Revenues Up, Cuts Dividend, Warns On Q2; CEO To Take Pay Cut

Capgemini Group (CAPP,CGEMY.PK), a consulting, technology and outsourcing services firm, reported Tuesday that its first-quarter consolidated revenues were 3.55 billion euros, up 3.1 percent from last year’s 3.44 billion euros.

Revenues grew 2.3 percent year-on-year at constant exchange rates.

The company said the first-quarter growth was in line with expectations despite the COVID-19 pandemic.

Digital and Cloud revenues grew 20 percent at constant exchange rates and accounted for over 50 percent of Group revenues.

Bookings totaled 3.40 billion euros, a 0.8 percent increase at constant exchange rates.

Further, the company said its Board of Directors decided to reduce the dividend proposed for approval at the next Shareholders’ Meeting by 29 percent to 1.35 euros per share from 1.90 euros per share.

Looking ahead, Paul Hermelin, Chairman and Chief Executive Officer, and Aiman Ezzat, CEO designate, said, “In this new environment, the Group expects the 2nd quarter to be challenging, before a gradual recovery in the 3rd and 4th quarters. ….However, considering the level of uncertainty, specifically the speed of demand recovery exiting the lockdown, Capgemini is not in position to commit to an outlook for 2020 at this stage.”

Furthermore, both Hermelin and Ezzat have decided to forgo 25 percent of their respective 2020 total compensation as executive directors.

In addition, during the period of implementation of partial unemployment in France, their unpaid compensation as executive directors will be transferred to the “Institut Pasteur” to finance research initiatives on COVID-19.

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