Authors: Dimitri Rhodes and Leo Marchandon

(Reuters) – French software group Capgemini forecast a surprise decline in annual revenue on Friday, citing a downturn in the automotive and aerospace sectors, sending its shares down more than 9%.

Capgemini shares fell 9.4% by 0728 GMT, hitting the index’s lowest level, after the Paris-based group said it now expected its organic sales to fall by 0.5-1.5% in 2024, down from a previous forecast of growth of 0-3%.

“The slope of the recovery in the second half of the year will depend on the recent deterioration in the outlook in the automotive and aviation sectors and a slower recovery in financial services,” Chief Executive Aiman ​​Ezzat said in a statement.

Ezzat told analysts that supply chain problems had slowed the growth of the aerospace industry, but stressed that this would only affect growth in the tiny term.

Capgemini reported a 3.7% decline in North America revenue in the second quarter, a slower decline than the 7.1% decline seen in the first three months of 2024. In the first half of the year, North America revenue fell 5.4%.

Ezzat said North America showed the strongest recovery between the first and second quarters.

The market was the group’s second-largest, accounting for 28% of its revenue in the first half. It was also a drag on Capgemini’s results last year amid a recession in the technology sector.

The total number of employees in the group at the end of June was 336,900, down 4% compared to the previous year.

Capgemini has reduced hiring from 2023 and ended the year with 5% fewer employees than at the beginning, a first since 2009.

The group announced revenue of €11.14 billion ($12.09 billion) for the first half, down 2.5% year-on-year on a reported basis.

The Group confirmed its operating margin and free cash flow targets for 2024.

(1 dollar = 0.9211 euros)