Capgemini to shop in US to lower dependence on Europe

Describing its acquisition of iGate as a "huge success", Europe-focussed French software major Capgemini said it is keen to snap up some companies in the US to lower dependence on its home continent.
Capgemini acquired the US-focussed IT services company for USD 4 billion in 2015 and is in the process of integrating the firm with its operations, which is expected to be completed by the year-end.
Paul Hermelin, Group Chairman and Chief Executive of Capgemini, who is visiting India, indicated his company is open to inorganic growth, but said he must first complete integration of iGate successfully.
Terming the iGate buy as a "huge success", he said the markets are pleased with the cash-flow generation last year and "we have already raised cash flow expectations".

With Europe still accounting for 60 per cent of sales, he said the company will try and reduce it to 50 per cent going forward by acquiring companies that can boost its North America sales.
"There are some markets where we are still small. If you look at the group mix, we are 60 per cent Europe, which is a lot. So, I would like to bring it down to 50 per cent. Five years ago, it was 80 per cent. So, we will look at acquisitions that will increase our presence in North America and other territories to balance it," he said.

"The US market is more than 40 per cent of the world IT market. We are 31 per cent in the US," he said.

He said digital and innovation will be the priority areas for the company.
"Digital today is 22 per cent of the group revenue, growing at 23 per cent. Our next investment will be more in digital and innovation now. In terms of volume, I think we have what we need with 1,80,000 people, key clients, so we will look at more innovations," he said.
Elaborating on three main initiatives on the digital front, Hermelin said, "One is big data, second is digital customers which are all multi-channel and today our two main customers are consumer goods and retail, and the financial services. The last big thing that is new and emerging is digital manufacturing."

On digital revenue spend in the next three years, he said the company will organically move to 30-35 per cent.
"If we have to grow at 40 per cent, we will need some acquisitions," he reiterated.