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Oddo – High Tech ForumParis, May 15 2006
Nicolas Dufourcq, CFO
1
Oddo – High Tech Forum 2006
In 2005, Capgemini got back into the race1. Capgemini won market share
Q1 + 20.3%Q2 + 22.1%Q3 + 9.8%Q4 + 9.6%FY + 15.0%
Organic growth
2005/2004
3. Capgemini returned to profit
2. Capgemini has significantly improved operating performance
-4420
62
163
H1 2004 H2 2004 H1 2005 H2 2005
-1.5%
-600
-500
-400
-300
-200
-100
0
100
200
300
Operating margin
2004 2005
-534
+141
-24
+225
Net Income +675 ME
Operating margin+3,6 pt
4. Capgemini achieved its major goals
1 Consolidate Project & Consulting European recovery
2 Accelerate the North American turnaround
3 Drive sustainable, profitable growth in outsourcing
4 Change gears in RightshoreTM
+0.6%+1.8%
+4.7%
2
Oddo – High Tech Forum 2006
In 2005, Capgemini returned to profit
Project & Consulting Europe
TOTAL US
Incl. Consulting & Technology services US
Outsourcing
Operating Margin
European P&C levels of profitability are in line with our peersNorth America profitable in H2 2005 Outsourcing on a strong improvement trend, accelerated by MAP
Group Operating margin
Net Income (M€)
3.4% (e)- 8.0%
-11.9% (e)- 2.0%
8.7%2.8%
- 0.8%1.5%
2004
6.3%- 6.6%-8.2%- 1.2%
H1 2005 H2 2005
- 0.4% 1.8% 4.7%
-534 +58 +83
+141
3
Oddo – High Tech Forum 2006
In 2005, Capgemini launched the MAP initiative
Revenues
Production costs
Business Mix
Re-negotiation
Purchasing
Rightshore
Rationalization
General Expenses Support Function
TBD
0.5%
1 – 1.5%
1.5 – 2%
1 – 1.5%
1 – 1.5%
Impact on Op. MarginLevers
MAP in implementation phase since Dec. 2005Goal: divisional operating margin of 4% in 2006
Project : Governance structure in place Full time team of 14 people (OS+CS)
RationalizationNew organization in Service Line (Europe, US, BPO)Sale of hardware maintenance business France to Unisys
PurchasingGood start to the Cap 30 program
Rightshore : Growth led in 2006 by GM and Eli Lilly
Re-negotiation3 contracts currently under re-negotiation in Q1 2006
Support Functions:Closure of site in UK and NetherlandsBPO of F&A functions
4
Oddo – High Tech Forum 2006
In 2005 Capgemini increased “RightshoreTM” capability
Capgemini is the leading European company in offshoreTarget is to have 10,000 people in India by 2007
India
China
Poland
Spain
France
2,050
200
350
150
300
Headcount ‘04Country Headcount ‘05 Type
3,550
400
750
300
450
Offshore TS/OS/BPO
Offshore BPO
Nearshore BPO/OS
Nearshore OS
Local TS/OS
+80%
50% of offshore staff works for Europe
Outlook 2006Open Calcutta site (with BPO)Create a second site in Krakow (Poland) Oviedo gets stronger (Spain )Opening of Capgemini University in IndiaAccelerate on-campus recruitment at Indian universities
5
Oddo – High Tech Forum 2006
2006 Priorities
Focus on adding value to clients• Invest in innovation (SOA, 3rd generation ERP
Business Intelligence…) and competencies • Develop sector approach and improve portfolio
management• Grow RightshoreTM capability
Confirm North American turnaround
Implement MAP initiative• Develop BPO and Application Management• Target divisional margin of 4% in 2006
1
2
3
6
Oddo – High Tech Forum 2006
Q1 2005 Q2 2005 H1 2005 Q3 2005 Q4 2005 H2 2005 FY 2005 Q1 20063 482 6 954 1 869
3.3%
4.2%
9.4%
9.8%
1 808
8.0%7.3%
1 674
- 5,1%- 4.0%
1 708 1 764
3.3%
2.3%
Amount in M€ (Published) 3 472
Sequential Current GrowthSequential Organic Growth
Year-on-Year Current GrowthYear-on-Year Organic Growth
Revenue quarterly evolution in M€
1708
1764
1674
1808
1869
1400
1600
1800
2000
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
A strong start to the year
7
Oddo – High Tech Forum 2006
Q1 06 / Q4 05 Q1 06 / Q1 05Consulting Services 0.4%
3.4%5.7%3.4%5.6%4.2%
8.0%Technology Services 10.1%Professional Services 13.0%Project & Consulting 10.4%
Outsourcing Services 8.8%TOTAL GROUP 9.8%
Revenue CS/TS related to mega deals recorded in Outsourcing
Revenue CS/TS related to mega deals reclassified in CS/TSQ1 06 / Q4 05 Q1 06 / Q1 05
Consulting Services 1.9%4.1%5.7%4.0%4.6%4.2%
9.7%Technology Services 15.6%Professional Services 13.0%Project & Consulting 13.8%
Outsourcing Services 1.5%TOTAL GROUP 9.8%
Outsourcing is still a key growth driver for P&C
8
Oddo – High Tech Forum 2006
Revenue by disciplineQ1 2005
ConsultingServices13%
TechnologyServices34%
OutsourcingServices37%
ProfessionalServices16%
Q1 2006
ConsultingServices12%
TechnologyServices34%
OutsourcingServices37%
ProfessionalServices17%
At constant rates and perimeter
9
Oddo – High Tech Forum 2006
Year on Year Growth
SequentialGrowth
NORTH AMERICA - 4.0% - 1.8%
EUROPE & ASIA 13.3% 5.6%
5.9%
4.3%
-12.7%
10.9%
15.0%
17.1%
Consulting Services / Technology Services -2.0%
Local Professional Services 2.6%
Outsourcing -0.7%
Consulting Services / Technology Services 2.7%
Local Professional Services 5.5%
Outsourcing 6.5%
Significant growth in Q1
At constant rates and perimeter
10
Oddo – High Tech Forum 2006
Current Current Organic
Q1 2005 Q4 2005 Q1 2006 Sequential Year on Year SequentialYear on
Year
North America 342 336
1 472
U.K. & Ireland 423 442 484 9.7% 14.6% 12.4% 14.8%France 405 447 471 5.4% 16.4% 5.4% 16.4%
Benelux 231 259 256 -1.3% 11.0% -1.3% 11.0%Central Europe 108 114 122 7.7% 13.4% 6.6% 11.5%
Nordic 100 113 110 -2.7% 9.9% -2.8% 11.1%Iberia 56 57 63 9.8% 11.6% 9.8% 11.6%
Italy 24 23 21 -9.2% -14.4% -9.2% -14.4%Asia Pacific 19 17 16 -5.6% -16.2% -4.3% 2.0%
TOTAL 1 708 1 808 1 869 3.3% 9.4% 4.2% 9.8%
326 -3.0% -4.6% -1.8% -4.0%Europe & Asiaof which
1 366 1 543 4.8% 12.9% 5.6% 13.3%
M€
Europe is leading the pack
11
Oddo – High Tech Forum 2006
Revenue by geographyQ1 2005
Uk &Ireland24%
NorthAmerica20%
NordicCountries
6%
Central Europe
6%
France24%
South Europe
5%
AsiaPacific1%
Benelux14%
Q1 2006
UK & Ireland
27%
NorthAmerica17%
NordicCountries
6%
Central Europe
6%
France25%
South Europe
4%
AsiaPacific1%
Benelux14%At constant rates and perimeter
12
Oddo – High Tech Forum 2006
Revenue by global sector
Q1 2006
Energy & Utilities14%
Financial Services12%
OtherServices
8%
Government29%
Telecom, Media &
Networks10%
Manufacturing, Retail &
Distribution27%
Q1 2005
Energy & Utilities17%
Financial Services12%
OtherServices
8%
Government25%
Telecom, Media &
Networks10%
Manufacturing, Retail &
Distribution28%
At constant rates and perimeterSogeti excluded
13
Oddo – High Tech Forum 2006
Bookings evolution
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
OutsourcingProjet & Consulting
M€
484
2 860
284
1 943
277490
320
1 1171 760
1 078 1 178 929 1 255 1 119 1 226 953 1 274 1 230
1 562
4 038
1 213
3 198
1 3961 716
1 273
2 391
2 990
At constant rates and perimeter
14
Oddo – High Tech Forum 2006
Bookings evolution by zone
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Sequential Year on yearNorth America 207
1 189
1 396
216268265
1 451 1 005
1 716 1 2732 175
2 391
768
2 222
2 990
255.6%
2.2%
25.1%
271.0%
Rest of the World 86.9%
TOTAL 114.2%
At constant rates and perimeter
15
Oddo – High Tech Forum 2006
Project and Consulting (P&C): bookings in key countries
(M€) Q1 2006 Year on Year
North America
Consulting Services / Technology Services 186 27.1%Local Professional Services 46
Consulting Services / Technology Services 99 14.5%Netherlands
Consulting Services / Technology Services 142 4.9%Local Professional Services 58 18.0%
France
Consulting Services / Technology Services 213 13.9%Local Professional Services 160 10.0%
42.7%UK & Ireland
At constant rates and perimeter
16
Oddo – High Tech Forum 2006
Headcount evolution
Headcount as of Dec. 31, 2005 61 036
Recruits (*) 4 523
Acquisitions / Big Deals 117
Disposals - 608
Layoffs - 512
Leavers - 2 400
Headcount as of March 31, 2006 62 156
(*) out of which India 705
17
Oddo – High Tech Forum 2006
Focus on:
Green Transformation Plan• Doing what we advise our clients to do
Metropolitan Police• A key 2005 win - €500 million over 7 years
Airbus• More than one way to serve our clients
18
Oddo – High Tech Forum 2006
• Financial system (NOP) : from 15 different to one common system in 3 years• Procurement system (GPS) : implementation of a global sourcing and purchasing system• Infrastructure : consolidation of services (email, security, AM, telefony…) & globalisation of fleet management (PCs, devices, …)
ProjectGREEN
Principles & Rules
• TransFORM : IFRS & New business models• LTRM : Long term risk management of inflation & currency risk linked to Rightshore
Governance & Management
• Governance : Direct reporting lines in IT & Procurement communities• Support costs : Cross discipline management and review process• Cash : Appointment of Cash Officers – Cash culture revival
People
Career management of Finance people
Processes
• BPO : Transfer of transactional F&A to Polish and Indian centers• Netting : settlement of all intra-group transactions in one monthly flow• Closing : Shortening of timetable for published financials
IT Systems
19
Oddo – High Tech Forum 2006
scope of service
29,000 desktops
4,000 laptops 38,000 telephone extensions
1,900 fax machines
5,400 pagers
The management and support of user ICT equipment, including:
The provision of a high-quality service desk to manage faults and orders
Applications support and maintenance for a range of +50 MPS applications including CRIS, CRIMINT, METFIN, etc
Provision of secure, resilient, high-qualityservers hosting applications and services
8,500 mobile phones
The provision of remote-access servicesincluding PDAs and wireless laptops
ICT services not in scope include radio, in-vehicle ICT equipment and C&C.
These are covered by existing contracts.
Maintenance and support of MPS ICT systems including email, intranet and internet. @
20
Oddo – High Tech Forum 2006
organization
Capgemini is the primary contractor
responsible for overall relationship
management and contract governance.
• Application Management
• CRIS Hosting
• Desktop & Server Break-fix
• Service Governance& Management
• Service Desk• Desktop support• Server management• Data Centre hosting• Infrastructure Management
Control Centre (IMCC)• Programme Management• Procurement
• LANs• WANs• Mobility• Telephony
Unisys will deal with application management,
CRIS hosting and fixing issues with desktops and
servers on site
BT will support and deliver the
network, mobility and telephony aspects of the
service.
Capgemini, in collaboration with Unisys and BT, met the Outsource Programme strategic drivers and displayed knowledge and understanding of MPS business needs.
21
Oddo – High Tech Forum 2006
transition process
8 Jun 2006Transfer of ICT services from ATOS Origin
Step 1
Security Performance
Telephony Performance
ICT Performance
Email and service Desk
1 Oct 2006Transfer of CRIS services from EDS
6 Dec 2006Transfer of Telephony from Damovo
SECOND TRANSITION PERIODProgressively refine & enhance the service
FIRST TRANSITION PERIODEnsure smooth transfer of services without disruption
END OF SERVICE TRANSITIONSystems and technology to meet contract requirements and the MPS agenda for change
Step 2
Step 3
Step 4
December 2005 August 2007June 2006
22
Oddo – High Tech Forum 2006
Capgemini: a global partner
• Over 1 500 Capgemini professionals are servicing Airbus IT and operations worldwide in all Group disciplines (System Integration, Local Professional Services, R&D Outsourcing).
• System Integration: Capgemini is in charge of “configuration management” for the A380 program and has build Airbus internet portal both for supplier platform and resources management.
• R&D Outsourcing:− Outsourcing (Dedicated facilities (> 6000 m2), Private fiber optics
between Sogeti & Airbus,“Trusted zones” within Sogeti (Airbus network extensions).
− Engineer sciences (acoustics, aerodynamics, powerplant, electrical system design, tests).
− Software engineering (simulation, flight physics, aeronautical information systems).
• Local Professional Services: Infrastructure Management, Sogeti is the sole provider to supply and service all the aircraft manufacturer 9000 Unix workstations.
http://images.google.fr/imgres?imgurl=http://www.liv.ac.uk/researchintelligence/issue12/images/adding.gif&imgrefurl=http://www.liv.ac.uk/researchintelligence/issue12/e-strategies.html&h=158&w=200&sz=3&tbnid=-uQ9_0lcXf0J:&tbnh=78&tbnw=98&prev=/images%3Fq%3Dairbus%2Blogo%26hl%3Den%26lr%3D&start=3&sa=X&oi=images&ct=image&cd=3
Oddo – High Tech ForumParis, May 15 2006
Nicolas Dufourcq, CFO
Oddo – High Tech Forum� In 2005, Capgemini got back into the raceIn 2005, Capgemini returned to profitIn 2005, Capgemini launched the MAP initiativeIn 2005 Capgemini increased “RightshoreTM” capability2006 PrioritiesA strong start to the yearOutsourcing is still a key growth driver for P&CRevenue by disciplineSignificant growth in Q1Europe is leading the packRevenue by geographyRevenue by global sectorBookings evolutionBookings evolution by zoneProject and Consulting (P&C): bookings in key countriesHeadcount evolutionFocus on: scope of service organization transition processOddo – High Tech Forum�