Cap Gemini
Age: 46
Year named CFO: 2004
Number of employees: 91,621
2008 earnings: E451 million ($636 million)
Compensation: Undisclosed
Over the past five years, Cap Gemini has transformed itself from a loss-making also-ran in the race for a piece of corporate information technology budgets to a strong — and profitable — global competitor. But Europe’s largest IT consulting group by revenue isn’t immune to the recession that has gripped much of the rest of the industrialized world.
“The financial crisis hit us in January,” says Nicolas Dufourcq, the Paris-based company’s chief financial offider. Dufourcq immediately ordered a round of belt-tightening based on projections that revenue would fall by 2 percent this year. He imposed a hiring freeze, implemented a program to cut procurement costs by €18 million this year and ordered executives to hold tough against customer demands for lower prices.
“Cost-cutting has been heavy, and it allows us to protect the margins of the group,” says Dufourcq, who adds that he is comfortable with analyst estimates that Cap Gemini will achieve an operating profit margin of 7 percent this year, down from 8.5 percent in 2008.
Dufourcq has been open with investors and analysts about the company’s outlook, although he has not given any earnings guidance for the second half of this year, saying it is difficult to project earnings in the current environment. His cautious approach goes over well with many shareholders.
“They aren’t hiding behind the trees,” says Luc Mouzon, an analyst at Crédit Agricole Asset Management in Paris. “They are one of the few companies giving us lots of details about their cost base, contracts and what’s going on in the market.”
Dufourcq’s disciplined financial control is a major reason for Cap Gemini’s turnaround in recent years. The company posted a €534 million loss in 2004, when it was still reeling from the dot-com bust and the postmillennium drop in IT spending. Last year it reported a 2.5 percent rise in net income, to €451 million, on revenue that was flat, at €8.7 billion.
Cap Gemini has also been expanding its presence in India, catching up with such rivals as IBM Corp. and Accenture in that important IT service market. The company expects to have more than 40 percent of its employees in India by the end of the decade, a greater percentage than in its home market of France.
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