Thursday, 31 July 2008

'Solid' results from IT Services players in Europe but worse in UK

We have now got the latest results from all the major IT Services players in Europe and they look pretty good ('solid' is the word most often used!) I've done a quick-and-dirty analysis of the European IT Services revenues announced by the biggies - IBM Global Services, EDS, Accenture, CSC, Capgemini, BT Global Services, Capita, Logica, Atos Origin. (Note - Fujitsu Services makes up the remaining company in the Top Ten. They are due to release results today but have indicated "strong growth in the IT services business" in the press statement put out a few minutes ago)

European IT Services organic growth, in constant currency, averaged 5.5% in the most recent quarter. Accenture was the undoubted 'star' with European revenues up 11% but IBM Global Services did pretty well too with an 7% increase. In real terms (ie excluding the effects of inflation) overall that equates to a real growth of c2.5%.

Overall UK growth was lower at around 3.5% with companies like Capgemini, BT Global Services, IBM and Logica (no growth at all) all reporting lower growth in the UK than in Europe (and RoW). In real terms (ie excluding the effects of inflation) that equates to no growth at all. Although, on the surface, that looks to be in line with my revised forecasts for 2008 (see repeat post of my chart above), I had expected better performance in H1 than in H2. If I was going to revise this chart now based on H1 actuals and outlook, I'd take it down by 0.5% -1% - ie I'd see real IT services growth in the UK going slightly negative for the year.

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