全球IT服务行业-未来看起来很美好，但对一些人来说更光明

23 May 2022Deutsche BankResearch Europe France Technology IT Software & Services Industry Global IT Services Date Industry Update Global IT Services: The future looks bright but brighter for someCapgemini is more likely to come out of the crisis stronger vs peersIn this note, we take a global look at all major listed IT services providers with a focus on the key current themes in the market, including the strong demand environment, wage inflation/talent war, and potential macro headwinds ahead. We conclude that Capgemini is more likely to tackle challenges while benefiting from the strong demand momentum both in IT and OT services. A better setup for cost control (incl. personnel costs), exposure to digital and cloud (>66% of the group) as well as the lowest exposure to more cyclical consulting (~7%), should help the company to perform better than peers. With its very broad global offshore leverage (going well beyond India, partially thanks to Altran) and strong graduate program, Cap appears well positioned in this challenging hiring environment. As a result, our analysis sees scope for margin expansion in H1 and into H2, while almost all its peers have cut their margin guidance (including Accenture). Cap has already seen higher attrition rates than peers but can tackle the issue with rehiring and increasing utilization while we see attrition headwinds for some (Indian) ITS peers going forward. Capgemini has been outperforming its best in class peer Accenture by ~20% ytd. Looking at relative performance and valuation, Capgemini is growing faster (on EBITDA, EPS and FCF) while trading at a discount (on all metrics we look at it) to its peer group. The stock remains a top pick and we reiterate Buy.What are the major trends we see in IT services going forward:nAttractive demand environment: All the commentary and data suggest robust momentum ahead. While the size of the pie looks big enough (and growing), competition for higher market share remains a topic with the main players trying to further expand in the competition’s home market. However, to do so all these names need skilled talents and a differentiated offering - here we see major differences between vendors.nMargins at risk due to wage inflation: The labor market is very dynamic with attrition rates at their highs. On top of that, wage inflation does not make things easier for the ITS providers in balancing growth with margin expansion. We expect the margin picture to diverge meaningfully among players while all should grow well.nUnfavorable macro conditions another headwind?: We believe if macro conditions lead to a recession, there is a risk for IT services with high exposure to consulting while those that significantly expanded their exposure to digital and cloud can be the winners.Nooshin NejatiResearch Analyst+49-69-910-61797Johannes SchallerResearch Analyst+49-69-910-31731Bryan KeaneResearch Analyst+1-415-617-4246Yusuf JamalResearch AssociateGianmarco ContiResearch An