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Capgemini Says Will Beat 2007 Operating Margin Goal

Europe's largest computer consultancy group Capgemini said on Wednesday it would exceed its 7 percent operating margin target for 2007.

The company expects to lift its operating margin to above 7 percent in 2007 from 5.6 percent in 2006, with like-for-like revenue growing by 9 percent, its chief executive said on Wednesday.

Capgemini also confirmed its "ambition" for a 2008 operating margin of 8.5 percent.

"The market is very solid. We confirm our target for like for like sales growth of 9 percent this year," Paul Hermelin told a conference call.

"We expect to achieve a margin of 8.5 percent as soon as the second half 2007," he said, adding the group now expected a 2007 margin "above 7 percent". Capgemini previously targeted a margin of 7 percent for 2007.

Hermelin also said Capgemini expected to book an extra 1.4 billion euros from the fourth quarter thanks to the extension of a large contract with British tax authorities.

But because Capgemini had granted a reduction in prices and volumes, representing savings of some 100 million euros per year for HM Revenue & Customs, this would translate into a decline of around 180 million euros in 2008 revenue from the HMRC deal, he said.