Good afternoon. Thank you very much for having joined us, and welcome to the 2021 Capgemini Virtual Capital Markets Day. We're looking forward to spending the next few hours with you and various members of the Capgemini leadership team. We have exciting sessions lined up, during which we'll go through our strategy, our performance, and ambitions. As usual, you'll find the relevant material and documentation on the investor pages of our website, investors.capgemini.com. Before we proceed, this is a virtual event due, obviously, to the current context. We have guests here, but I would like just to state that we have taken all the necessary measures, distancing, testing, and so on, and that's why our speakers today will be quite far apart.
I'd also like to remind you that this information in this call contains forward-looking statements with regard to Capgemini's financial condition, results of operation, business, strategy, and plans. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, risks described in the documents Capgemini has filed with the IMF, the French Financial Markets Authority, and our universal registration document. To open, CEO Aiman Ezzat and CFO Carole Ferrand will outline our strategic direction, our financial ambitions, and our approach to environmental, social, and governance matters. This being said, and without further delay, I will hand the floor to our CEO, Aiman Ezzat, who will share with us his vision and strategy.
Hello everyone. Thank you for attending our Capital Markets Day. I am very happy to be with you today. In the next three hours, we will take you through some elements of our strategy and share our new midterm ambition. Before starting, I wanted to set the stage by saying a word about where we're coming from and what we have achieved in the last years, because a lot of things have changed in Capgemini, and I'm proud of that. We are now a much more global and diversified firm, not only geographically, but also by business line and by industry. We strengthened our global account management with the implementation of a unified go-to-market. We accelerated our offshore and industrialization drive to strengthen our competitiveness and made India a strategic business platform with 125,000 team members.
We massively shifted our portfolio to digital and cloud and constantly invested in innovation. We scaled our core capabilities organically and through acquisition, the last big one being Altran, which propelled us as a global leader in engineering and R&D. We developed a strong partner ecosystem, notably with the hyperscalers, turning it into a real growth engine. We elevated our game in terms of leadership and talent management, people being our most important asset. This ongoing transformation clearly yielded a growth, a robust margin progression, and a strong cash flow generation. Beyond financial, the group has demonstrated its resilience and agility during the pandemic. With our unique positioning, we are among the global leaders in enabling clients to transform through technology. There has never been a better time to be in this industry.
We thrive on change, and technology has become pervasive and is fundamentally transforming businesses and society at large. We see increasing wallet spends on consulting, IT, and technology. This will continue in the coming years. CXOs are at the heart of the transformation journey and now actively driving IT and technology spend. Cloud, data, and AI are everywhere, in every single product, service, or operation. Everything is becoming digital, with growing needs in terms of connectivity and softwarization. Finally, sustainability becomes a powerful engine for transformation and renewal in many sectors. At the same time, there is an evolution in terms of market requirement. Clients need deep industry expertise. We are beyond horizontal solutions that are easily adapted from an industry to another. Clients expect tailor-made solutions adapted to their industry. You need to be specific to be relevant.
We need a breadth of capabilities and partners to be able to address the transformation requirements of clients. It is without say that clients see cybersecurity as a significant risk, which is complex to manage. They need to work with trusted partners to help them manage the increasing exposure to cybersecurity. In this context, we are ideally positioned to take advantage of the fast-expanding use of technology across industries. We aim to be a strategic partner for the digital transformation of our clients. It's a new job in a certain way. Traditionally, we were mainly focused on IT services, with the CIO being our primary client, focused on providing capabilities to fulfill specific needs. Historically, IT was leveraged to help run companies more efficiently.
Today, our job is to enable clients to transform through technology, to create value, whether it is by creating new products and services, making them available for customers, or ensuring a great customer experience. We operate across the client's organization, from sales and marketing to R&D and operations. This is how we build strategic relationships with clients. If you look at all what comes under digital transformation and taking it through the eyes of a client, we see today three main opportunities in how we apply transformation through technology. First, enterprise management. This is mainly about optimizing the management of the company functional areas, such as finance, HR, logistics, and driving decision-making, of course, covering organizations, systems, and processes. To simplify, this was the traditional remit of the CIO.
Looking forward to winning this market, we need to drive cloud and data and AI, as well as application development and modernization, while keeping a very strong focus on cost. Agile, offshore, and automation will remain key here. This today represents a bit more than 50% of our revenues. This market will continue to grow in low single digits. Let's be clear, this is not what people call legacy. Second, customer-first. It is what people call digital marketing and customer experience, but it goes well beyond. It's focused on the relationship between our clients and their customers to improve customer experience and satisfaction, disrupt value chains with new business models, and to create new revenue streams through digital platforms. This gives us access to sales, marketing, and line CXOs. It's a growth engine for our clients, and it's how they connect and engage with their customers.
Now, this playing field I just defined is over 20% of our revenues, and this market is growing high single digit. Third, and of course, the most promising is intelligent industry. This is about bringing together engineering, IT, and digital. It goes beyond Industry 4.0, as you will see later today. It is a convergence between products, software, and services, between the physical and the virtual world. This is where we see the biggest acceleration in the market, a double-digit growth. Altran brings an important building block in engineering in several industries, which enables us to be a leader in the market. Intelligent industry addresses CXOs from R&D and engineering to manufacturing and supply chain, but they also address line CXOs and the CEO himself. This is where all our deep industry expertise and our capabilities play from invent, engineering, cloud, data, AI, or 5G, and application services.
Customer-first and intelligent industry are very exciting areas of growth. You will learn more about our capabilities later today. They require strong industry relevance, and they are what interests CXOs. This is where we will focus our energies, including in terms of acquisitions. To succeed in our journey, there are two pillars that are fundamental: cloud and data and AI. They are the primary drivers of technology and business evolution in the coming years. Cloud is, for us, the most disruptive value-creating technology. It is the platform for technology transformation, providing cost efficiency, scalability, and agility. It has become a prerequisite of any digital transformation. Even if people tend to think first about moving to cloud, it's just the first step in the cloud journey. The big opportunity lies in the digital transformation, new developments, and new businesses that follow a move to cloud.
We know the pandemic has significantly accelerated the cloud adoption. The other one, data and AI. We are truly convinced that data and AI-driven enterprises will create significantly more value and dominate markets and ecosystems. Data has taken a new dimension. It enables clients to dynamically create highly relevant products and services, to manage with a high level of precision the relationship with their clients, and to create highly personalized experiences. Based on the infinite potential application, specific industry knowledge and use cases are a must. On both pillars, we have scale, and our capabilities are well recognized by the market. They are critical to enabling the digital transformation of the markets we serve, whether we talk about enterprise management, customer-first, or intelligent industry. Both pillars, cloud and data and AI, are growing double-digit and present solid margin improvement opportunities.
Cybersecurity and sustainability are two critical components of the portfolio of offerings. They are both requirements for what we do for our clients. Sustainability is the key challenge of our generation. It requires a lot of industry specificity and leads to potentially massive transformation in every value chain. We are committed to embed sustainability in our offerings to enable our clients to reduce their carbon footprint. Cybersecurity is the biggest underlying risk in technology for all firms. Cyber is not anymore an IT issue. It's mission-critical for all firms. It remains a key investment priority as well as a strong market opportunity. Both topics are at the top of the CEO agenda and at the very center of our value proposition. As we expand in customer-first and even more so in intelligent industry, industry expertise is required to deliver digital transformation.
Our focus is to develop strong expertise in selected industries, enabling us to proactively bring digital transformation solutions to our global clients. We want to be recognized in our chosen industries in terms of expertise and relevance, becoming the strategic partner of our clients for that digital transformation journey. Now, to succeed in that journey, we're going to activate several levers. First and foremost, we are a talent company. So it's about our ability to attract, develop, and retain the best talents. Not only will we continue to upgrade our skills, propose rich career paths, and build proactive career management, we are creating a more agile and flexible workforce to adapt to a fast-evolving environment. We will also pursue the strengthening and globalization of our leadership team and increase our industry-specific skills.
On innovation, we really intend to boost it across all our offerings to provide the best solution to our clients. This is accelerated by recent assets we acquired with Altran, such as Frog and Cambridge Consultants, but also the development we have on partnerships and on our startup ecosystems. We also intend to leverage the strong portfolio management and investment we put in place three years ago. It enabled us, in terms of portfolio transformation, towards faster growth and higher profitability offerings. We will continue our drive, of course, towards industrialization and automation to further increase our competitiveness and ensure the scalability and the quality of our delivery. Finally, we want to leverage the new hybrid working model, delivering on our new normal operating model through a more flexible organization of work, reduced travel and office space, and enabling more efficient deployment of resources.
We want to make remote work for anyone to anywhere a reality. All these levers will support our growth, and coupled with Altran synergies, will lead to improved profitability. You will hear more about some of these topics later. Moving forward, we will build on the values, entrepreneurial culture, technology focus, and operational strengths of the group. I have a strong ambition for the group. By 2025, we aim to lead in intelligent industry, as demonstrated by the strength of our capabilities, our offering, our ecosystem of partners, and some real marquee wins, leveraging the power of Capgemini and Altran coming together. We will become the strategic partners of CXOs, leveraging our strong position in customer-first and our leadership in intelligent industry, and a sharp industry focus.
We intend to be a global leader in cloud and data and AI, grabbing a significant share of technology-driven investment in our strategic accounts. Of course, we will continue to expand globally in the Americas and in Asia-Pacific while building on our leadership in Europe. Finally, we intend to demonstrate clearly that we are helping our clients on their sustainability journey. We have consequently raised our midterm financial ambition. We will undertake a focused effort to accelerate growth. Our revenue growth ambition is 7%-9% constant currency CAGR between 2020 and 2025, visibly above what the traditional IT services market is doing. We intend to reach 14% operating margin by 2025, representing an average of 40 basis points of improvement per year. Thank you for your attention. Carole Ferrand, our CFO, will now take you through some of the details behind these figures.
Indeed. Thank you very much, Aiman. Indeed, I now have the pleasure of having Carole Ferrand, CFO of the Capgemini Group, join me here and to share with us how this translates into financial ambitions.
Thank you, Aiman. Good afternoon or good morning, everyone. It is with great pleasure that I will walk you through and give you more details on the key financial highlights that will lead us to our medium-term ambitions. Firstly, let's take a look back at our strong performance over the last cycle, which has been a very strong financial journey. We delivered a strong performance over the last six years. From 2014 to 2019, we grew our revenues at constant currency by 6.4% on average, while improving our operating margin by more than 300 basis points and almost doubling our organic free cash flow.
In 2020, and within the context of a global health crisis, as you know, we definitely demonstrated both agility and resilience with a very limited impact both on our organic growth and on our operating margins, thanks to a very well-diversified portfolio and much more agile and industrialized operations. In addition, we completed last year a landmark acquisition with Altran, positioning the group as the undisputed leader in the nation's intelligent industry market. As highlighted by Aiman, our growth will be strongly fueled by the adoption of new technologies and the accelerated IT consumptions by CXOs deploying industry solutions for their transformation. As shown on the left-hand side of the chart, we expect strong growth across our whole portfolio, driven by the continued acceleration of cloud, which is central for digital transformation, as well as data and artificial intelligence, data driving new insights and actions.
As you can see, these two pillars combined enable a significant part of our growth. Looking now at our markets on the right-hand side of the chart, enterprise management will continue its well-established growth, fueled by continued digitalization of companies and new technologies deployment. Despite a low single-digit growth rate, it still contributes to a visible part of our growth. We will leverage our position in the fast-growing customer-first market, where the focus is on the relationship between our clients and their own customers, and aim for a leadership position in intelligent industry, which is the fastest-growing market segment focused on intelligent products, intelligent operations, and intelligent platforms and ecosystems. Lastly, R&D, as a standalone business, is an active market growing by single digit that will benefit from a secular increase of R&D spend and outsourcing.
The Altran synergies of EUR 200 million-EUR 350 million of run rate by 2023 will [audio distortion]. Second lever, our continuous efforts to industrialize and automate our operation should continue to lift our margin in the future for less than half a point. Of course, overall, our improvement will be higher, but this is net of returns to clients. Third, the greater acceptance for hybrid working models will enable us to implement what I would refer to as a new normal operating model. Within this hybrid working model, we can scale faster our real estate optimization plan and target low travel expenses. This will generate around half a point. Fourth, our combined efforts to optimize resource deployment will also be accelerated. The expected margin improvement is less than one point.
It will mostly come from our unique capacity to leverage and enhance utilization rates, notably in Europe, with our anyone to anywhere program, thanks to a greater acceptance for hybrid working models from our clients. Half of a point should come from our new efficiencies, from our own digitalization, and a better absorption of our journey costs. Lastly, we will continue to invest in our portfolio offerings, our sector expertise, and our talent pool. We will continue our push for digitalization of the group and make the appropriate investments to adapt to the new normal. We are well on track to achieve the cost and efficiency synergies related to the Altran integrations. We announced run rate savings of EUR 70 million-EUR 100 million by 2023. They are included here in the expected contribution of industrialization, real estate, and GNL levers.
As you can see, these levers will not only allow us to improve our operating margin, but are also expected to have a positive impact on our gross margin. All in all, a 210 basis points operating margin improvement over a five-year period equates to an improvement of 40 basis points per year on average. Allow me now to focus on our capital allocation framework for a moment. As you know, our CapEx-like business model and strong internal focus on cash, which remains as key metrics to measure our long-term performance, have enabled us to deliver superior free cash flow conversions. Over the next five years, we should continue to deliver an organic free cash flow that is well in excess of our net income. In the future, we aim to maintain a balanced capital allocation policy.
This is in line with our practice over the last cycle of returning to shareholders roughly the same amount as dedicated to M&A. We also intend to bring down our net debt to normalized EBITDA ratio below 2 by the end of 2021. Our active share buyback policy will offset any dilution. Finally, regarding our 35% payout ratio policy, we expect to deliver an attractive dividend yield in the range of 1.5%-2%. Regarding M&A, in this growth environment, we can create value by scaling up in targeted high-growth technologies and industries. I remain fully committed to a strict financial discipline in executing this Bolton M&A strategy. Finally, to put it in a nutshell, the main driver of our earning growth will be our operating performance.
Our operating margin improvement will continue to be a solid driver of our earning growth, and the contribution from revenue growth will accelerate to become an even stronger lever going forward. Below the operating margin, we also have several well-identified levers to sustain our earning growth. First, we intend to maintain a strict control over our operating income and expenses. Second, thanks to our strong credit profile, we refinanced in 2020 the acquisition of Altran and its outstanding debts. We have secured an attractive cost of debt of 1.8% with an average maturity now extended to six years. Lastly, we expect our effective tax rate to progressively come down to 30% by 2023. Combining these levers together, we expect our earning growth to accelerate. Thank you for your attention. I will now hand over to Aiman, who will share with you his ESG priorities.
Thank you, Carole.
Thank you, Carole. Very clear. Our ambition is aligned with the values of the group, our strong sense of ethics, and our responsibility as a leader of the market. I now would like to share with you our current ESG priorities. Before we start, let us first watch the short video on our company purpose.
In 1967, a few of us got together in two small rooms to create something new: an IT services company. Today, there are thousands of us helping clients take advantage of the always-on technological innovations that transform the world we live in. This change in dimension reveals a strong message: technology is nothing without the human touch that brings sensitivity, intelligence, creativity, responsibility. By developing and stimulating this human potential, we engage a virtuous circle that creates value for our clients and the men and women that make up Capgemini.
We believe that by partnering around a project, these teams are releasing an unexpected energy that even the most intelligent machines cannot produce. Unleashed, it helps our clients transform themselves, becoming more agile and competitive. It becomes the indispensable weapon to combat the digital divide, exclusion, and inequality. Thanks to this energy, we are reducing our own carbon footprint and leveraging the best of technology to help our clients meet their environmental commitments. Here lies our raison d'être in the strength of the collective. Unleashing human energy through technology for an inclusive and sustainable future.
As you may remember, we adopted our company purpose in October. It was developed with our Capgemini team members as well as with clients, multiple stakeholders, and NGOs. It is one of the fundamentals of our group: acting as a compass for each employee.
Our purpose means that Capgemini intends to be a benchmark in terms of contribution to society, notably in the areas of sustainability, diversity, and inclusion. There has never been a better time to leverage technology and human capabilities to tackle ESG challenges. We in business must leverage our leadership and our operations to speed up the global transition toward a sustainable planet. We identified 11 sustainability development goals of the United Nations, which are relevant to our ESG strategy. Our strategy includes action on climate change, notably by helping our clients to tackle their environmental challenges. It includes investing in our talents and leadership teams and nurturing a diverse and inclusive environment. It also includes building a diverse and accountable governance with strong data protection. Let's review in more detail these priorities, starting with our environmental ambition.
Capgemini has a long-standing commitment to environmental sustainability, and we achieved great results in 2020, even before the pandemic. In January last year, we reached our target of reducing our carbon footprint emission per employee by 30% versus a 2015 baseline, nearly a decade ahead of our initial goal. That's why we decided to raise a bar. Climate change is probably the challenge of our generation. Action on climate change is one of the top strategic business priorities for the group. In July 2020, I decided that we must commit to achieving carbon neutrality no later than 2025 and net zero by 2030. This new net zero program, which covers all our operations, consists of three essential elements. First, we have set new science-based targets aligned with the 1.5 degrees global warming scenario, and they have been validated by SBTi.
Second, we will implement a strategy to reduce emissions in line with those targets. We are going to focus on actionable levers such as transitioning to 100% renewable electricity by 2025, switching all our corporate fleet to hybrid and electric vehicles, significantly reducing travel and creating sustainable workplaces. Last but not least, we are developing a new carbon offsetting program to offset residual emissions with a focus on high-quality projects such as reforestation, which not only removes the carbon emissions from the atmosphere but also delivers social impacts for the local communities. As a global responsible tech company, we have to ensure that the maximum impact is achieved for the planet through helping our clients tackle their own environmental challenges. Innovation and technology can play a crucial role in shaping the solutions, not just for today but for the future.
We will help our clients to measure and reduce the greenhouse gas emissions, and we will support and accelerate their transition towards a low-carbon future through our wide range of capabilities. We will soon reveal several specific offerings in that direction. Overall, I am confident that we can help our clients save 10 million metric tons of carbon by 2030, which is 20 times our own footprint. In terms of social responsibility, my priorities are primarily focused on the group men and women, which are at the heart of our ambition. With more than 600,000 employees or former employees over the past decade, I want Capgemini to be recognized as a school of excellence whose talents and skills resonate well beyond the company. As a service company, we have a strong responsibility.
To achieve our new midterm ambitions, we need to create an agile and flexible workforce adapted to the skills needed, attract and retain the top talent in our highly competitive industry, invest in the development of our teams offering notably motivating individualized learning and skills development paths. Our new global and digital learning platform Next will be a key asset to achieve this goal. We also need to foster employees' engagement and satisfaction. On that point, I'm pleased to report that our current employee engagement reached an all-time high despite the pandemic in 2020. It is also critical for our success that our people feel enabled, supported, and able to operate in a collaborative environment. Therefore, I will make sure we continue to build a diverse and inclusive environment of aligned entrepreneurs where every form of diverse talent thrives and brings the best value to our clients.
I would like to accelerate our diversity journey. In terms of gender diversity, we enjoyed in 2020 an increase of nearly two percentage points compared to 2019, excluding Altran. We have also various initiatives to support specific communities such as people of color, people with disabilities, or LGBTQ people. Finally, a word about governance, which I'm convinced is a core item of our responsibility. Leading with trust and transparency serves the long-term interests of Capgemini and its stakeholders. It relies on several factors. It first relies on implementing a diverse and accountable governance reflecting shared interests on companies' long-term performance. It includes bringing a plurality of expertise and diversity across directors and leadership teams. It also includes a constructive and balanced dialogue with stakeholders. This is key to creating value on the long term. Finally, it relies on our commitment to protecting infrastructures, identity, and personal data.
We have high standards in terms of data protection and cybersecurity, and we perform a holistic cycle of action to proactively prevent and effectively respond to all threats from all sources. This program involves not only our employees but also our clients and our suppliers to continue raising awareness on data and cybersecurity worldwide. For us, cybersecurity and data protection are a journey focused on continuous improvement. Fighting for environmental sustainability, committing to developing our people in a diverse and inclusive environment, leading with trust and transparency. These three pillars form the core of our ambition in terms of ESG action. They are at the heart of everything we do. All staff members are responsible for following these priorities with the support, direction, and commitment of our leadership. There has never been a better time to mobilize technology and to unleash the human capability to address ESG challenges.
We in business must leverage our leadership and operations to speed up the transition to sustainability. Of course, this was only a brief overview. Be sure that I will come back to you on these topics because in the world we live in, you can only lead with responsibility. Thank you very much for your attention. I'm excited about the direction and the ambition we shared today. Have a very good day.
Thank you very much, Aiman and Carole, for shedding light on your vision, strategy, and financial ambitions.