Third Quarter 2006 Revenues - capgemini.com · 3 2006 Third Quarter Revenues Revenue by discipline Q3 2005 Consulting Services 11.3% Technology Services 33.8% Outsourcing Services

Third Quarter 2006 RevenuesParis, November 9, 2006

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2006 Third Quarter Revenues

Revenue evolution by quarter

Q1 2005 Q2 2005 H1 2005 Q3 2005 Q4 2005 H2 2005 FY 2005 Q1 2006 Q2 2006 H1 2006 Q3 2006

1 915 3 784

8.7%

9.0%

1 881

- 1.8%

- 1.9%

12.4%

2.5%

3.3%

8.6%

11.0% 13.5%

Amount in M€ (Published) 1 708 1 764 3 472 1 674 1 808 3 482 6 954 1 869

3.3%

4.3%

9.4%

10.0%

0.3%8.0%

7.4%

- 5,1%

- 4.0%

3.3%

2.3%

Sequential Current Growth

Sequential Organic Growth

Year-on-Year Current Growth

Year-on-Year Organic Growth

Revenue quarterly evolution in M€

1708

1764

1674

1808

18691915 1881

1400

1600

1800

2000

Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06

At constant rates and perimeter

2


Q3 06 / Q2 06 Q3 06 / Q3 05Consulting Services - 6.9%

- 4.8%CS / TS - 5.3% 9.9%

- 3.1%- 4.8%

2.6%- 1.9%

5.3%Technology Services 11.4%

Professional Services 8.4%Project & Consulting 9.4%

Outsourcing Services 20.0%TOTAL GROUP 13.5%

Revenue CS/TS related to mega deals recorded in Outsourcing

Discipline view

Q3 06 / Q2 06 Q3 06 / Q3 05Consulting Services - 5.9%

- 1.6%CS / TS - 2.5% 15.0%

- 3.1%- 2.7%- 0.2%- 1.9%

7.3%Technology Services 17.3%

Professional Services 8.4%Project & Consulting 13.3%

Outsourcing Services 13.8%TOTAL GROUP 13.5%At constant rates and perimeter

Revenue CS/TS related to mega deals recorded in CS/TS

3


Revenue by disciplineQ3 2005

ConsultingServices11.3%

TechnologyServices33.8%

OutsourcingServices39.0%

ProfessionalServices15.9%

Q3 2006

ConsultingServices10.4%

TechnologyServices33.2%

OutsourcingServices41.2%

ProfessionalServices15.2%


4


Current OrganicYear on Year Year on YearCurrent Sequential Sequential

Q3 2005 Q2 2006 Q3 2006 Q3 06 / Q2 06 Q3 06 / Q3 05 Q3 06 / Q2 06 Q3 06 / Q3 05

North America 332 334

1 581

U.K. & Ireland 432 556 553 - 0.4% 28.0% - 1.6% 29.2%France 392 434 424 - 2.5% 7.9% - 2.5% 7.9%

Benelux 228 258 250 - 3.1% 9.6% - 3.1% 9.6%Central Europe 113 122 126 3.5% 11.3% 3.7% 10.8%

Nordic 87 108 92 - 15.4% 5.0% - 15.3% 4.5%Iberia 50 65 56 - 13.1% 12.6% - 13.1% 12.6%

Italy 20 22 21 - 5.2% 3.8% - 5.2% 3.8%Asia Pacific 18 16 21 28.6% 14.0% 28.7% 27.9%

TOTAL 1 674 1 915 1 881 - 1.8% 12.4% - 1.9% 13.5%

338 1.3% 1.8% 2.7% 5.4%Europe & Asiaof which

1 342 1 543 - 2.4% 15.0% - 2.8% 15.4%

M€

Revenue evolution – Current & organic growth by geography

5


Revenue by geographyQ3 2005

Uk &Ireland25.8%

NorthAmerica19.3%

NordicCountries

5.3%

Central Europe6.9%

France23.7%

South Europe4.2%

AsiaPacific1.0%

Benelux13.8%

Q3 2006

UK & Ireland29.4%

NorthAmerica18.0%

NordicCountries

4.9%

Central Europe6.7%

France22.5%

South Europe4.1%

AsiaPacific1.1%

Benelux13.3%At constant rates and perimeter

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Booking evolution including mega deals

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 Q2 06 Q3 06

OutsourcingProject & 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

329

1 376


406

1 117

1 562

4 038

1 213

3 198

1 3961 716

1 273

2 391

2 990

1 7051 523

7


Project & Consulting : Bookings in key countries

Q3 2006 Year on YearNORTH AMERICAConsulting Services / Technology Services 177 9.5%

Consulting Services / Technology Services 185 19.5%

Local Professional Services 35 24.0%UK & IRELANDConsulting Services / Technology Services 109 15.4%NETHERLANDSConsulting Services / Technology Services 125 13.0%Local Professional Services 58 22.8%FRANCE

Local Professional Services 151 13.7%


8


Book to bill ratios Project & Consulting – Q3

Q3 2006 Bookings Revenue BBR

North America 212

905

1 117

180 1.18

Rest of the World 930 0.97

TOTAL 1 110 1.01

At budget rates

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September 2006 Results – Group headcount by geographyNORTH AMERICA GEO:• Opening: 6,351• Closing: 6,275• Change in Person: -76• Change in %: -1,2%

UK & IRELAND GEO:• Opening: 8,826• Closing: 9,023• Change in Person: +197• Change in %: +2.2%

ITALY GEO:• Opening: 1,277• Closing: 1,271• Change in Person: -6• Change in %: -0.5%

IBERIA GEO:• Opening: 4,314• Closing: 4,893• Change in Person: +579• Change in %: +13.4%

FRANCE GEO:• Opening: 19,866• Closing: 20,210• Change in Person: +344• Change in %: +1.7%

BENELUX GEO:• Opening: 8,613• Closing: 8,856• Change in Person: +243• Change in %: +2.8%

ASIA PACIFIC GEO:• Opening: 4,628• Closing: 6,842• Change in Person: +2,214• Change in %: +47.8%

CENTRAL EUROPE GEO:• Opening: 3,732• Closing: 4,538• Change in Person: +806• Change in %: +21.6%

NORDIC GEO:• Opening: 3,429• Closing: 3,530• Change in Person: +101• Change in %: +2.9%

TOTAL GROUP:Opening: 61,036 Closing: 65,438 Δ in P: +4,402 Δ in %: +7.2%

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KPIs by Discipline – ARVE evolution by quarter

50

60

70

80

90

62

67 6665

66

69

66

Q1 Q2 Q3 Q4 Q1 Q2 Q3

807978 79 7979

80

Q1 Q2 Q3 Q4 Q1 Q2 Q3

86 86 85 8685

8685

Q1 Q2 Q3 Q4 Q1 Q2 Q3

Consulting Services Technology Services Professional Services

2005 2006

At constant rates and perimeter – with India

2005 2006 2005 2006

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KPIs by discipline – COR evolution by quarter

300

600

900

1200

1500

1200 118812221257

1201 12051255

Q1 Q2 Q3 Q4 Q1 Q2 Q3

636 622 623 631 615 621 616

Q1 Q2 Q3 Q4 Q1 Q2 Q3

410 415 418 419 422 435 439

Q1 Q2 Q3 Q4 Q1 Q2 Q3


At constant rates and perimeter – with India

2005 2006 2005 2006 2005 2006

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KPIs by discipline – COR evolution by quarter

300

600

900

1200

1500

1200 118812221257

1201 12051255

Q1 Q2 Q3 Q4 Q1 Q2 Q3

661 652 662 673 663 677 682

Q1 Q2 Q3 Q4 Q1 Q2 Q3

410 415 418 419 422 435 439

Q1 Q2 Q3 Q4 Q1 Q2 Q3


At constant rates and perimeter – without India

2005 2006 2005 2006 2005 2006

Global Outsourcing MAP Update

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Agenda

1. MAP Program – A Reminder

2. 2006 Progress Against Plan

3. Roadmap to the Future

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Significant Growth of OS, as % Capgemini RevenuesFrom 22% in 2001 to 38% in 2005

“Margin Acceleration Program - MAP”

MAP was announced as a top Group priority in Nov ’05

Actions

Rebalance portfolio managementOptimize service lines worldwideRationalize industrial footprintGlobalize shared serviceAlign governance & KPI’s with ambition

Ambition

Drive OS Divisional Margin to 8% (circa 6.5% Operating Margin)Increase proportion of BPO and AM in business mixImprove productivity and cost efficiency

Business Return to be ImprovedOS Operating Margin at -1.2% in H1’05

Imbalanced Business MixPortfolio heavy in lower margin IM; sales growth fuelled by mega-deals

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The levers identified will help OS achieve 8% Divisional Margin

Objective: 8% Divisional Margin, c. 6.5% Operating Margin

Objective: 8% Divisional Margin, c. 6.5% Operating Margin

RevenuesRevenues

ProductionCosts

ProductionCosts

General ExpensesGeneral

Expenses Support FunctionSupport Function 1 – 1.5%1 – 1.5%

Rightshore™Rightshore™

IndustrializationIndustrialization

ProcurementProcurement

RenegotiationRenegotiation

Business MixBusiness Mix

1.5 – 2.0%1.5 – 2.0%

1 – 1.5%1 – 1.5%

1 – 1.5%1 – 1.5%

0.5%0.5%

TBDTBD

LeversLeversMid-termDivisional

Margin Impact

Mid-termDivisional

Margin Impact

Business MixValue-added offerings with industry focusIncreased proportion of high-margin servicesOptimal mix of deal size

RenegotiationRestructured agreements or solutions with select clients, partners and suppliers

ProcurementStrategically sourced procurementLimited number of contractors

IndustrializationConcentrated resources in strategic sitesStreamlined tools, methods and processesIncreased service line productivity

Rightshore™Increased Rightshore™ in new and existing contracts

Support CostsLeveraged regional synergies Simplified operations across geographies

17


Guidance for 2006 was clear

Objectives

4% Divisional Margin for full year (c. 2.6% OM)

5% Divisional Margin for second half (c. 3.4% OM)

Restructuring

€70m

90 / 95% Cash

15 month payback

18


Agenda




19


Zoom on OS profitability

H1 05 H2 05 H1 06 FY 06

Excluding Schneider 0.6%

-0.2%

6.0%5.6%

2.7% 3.3%

≤ 7.0%

Including Schneider ≃ 4.0%

Strong margin improvement excluding Schneider

Schneider still a significant drag on profitability

(at divisional margin level)

20


Restructuring

€70m On track

90 / 95% Cash 75 / 80% Cash

15 month payback 15 to 16

21


2006 MAP initiatives have succeeded in getting us over half of the way in our three year journey to 8% Divisional Margin

Creation of IM remote management center in Poland with 264 seats900 additional positions created in India since beginning ‘06

Mainframe and hardware rationalization in multiple regionsSoftware renegotiation within France and UKContractor price reductions in various countries and large accounts

Successful renegotiation of four service contractsEnding or already exited five service contractsBusiness extension or expansion within to improve overall account margin19/20 of 2005 bottom quartile accounts improved; nine fully profitable

Migration of internal F&A in UK to Rightshore™ location

People restructuring in select countriesClosure of sites in UK and Benelux regions

Objective: 8% Divisional MarginObjective: 8% Divisional Margin

Support FunctionSupport Function 1 – 1.5%1 – 1.5%

Rightshore™Rightshore™ 1.5 – 2%1.5 – 2%

IndustrializationIndustrialization 1 – 1.5%1 – 1.5%

ProcurementProcurement 1 – 1.5%1 – 1.5%

RenegotiationRenegotiation 0.5%0.5%

Business MixBusiness Mix TBDTBD

On TrackOn

Track

Achieved2006

Achieved2006

Achieved2006

Achieved2006

Visibility2007

Visibility2007

Visibility2007

Visibility2007

Acquisition of majority stake in Indigo, Unilever’s F&A platform in IndiaNIS outsourced to BTSold French Break/Fix business

LeversLeversMid-termDivisional

Margin Impact

Mid-termDivisional

Margin Impact

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62% Rightshore growth. Onshore to Offshore ratio from 5.0 to 3.2: 1

10000

12000

14000

16000

18000

January 06 December 06 est.

Onshore India Poland China/Spain/Aus.

+3%

+72%

+66%

+24%

2 626 FTE’s

4 262 FTE’s

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Agenda




24


We successfully completed year one of a three year plan to industrialize our operations

Siterationalization

Deployment of productivity measures

(OAE)

Tool rationalization

RightshoreTM

deployment

Some sites already closed

Strategic sites identifiedConvergence plan

OAE calibration Deployment on pilot sites

Global deployment

Automated measuresBest Practice Deployment

Best PracticeRefinement

Continuous & Incrementalimprovement

Strategic tools identified

RightshoreTM actions already launchedNew targets set

2006 2007 2008 2009Organized convergence & Tactical adjustments

(strategic sites & tactical sites)

Deployment of actions & Tactical adjustments

10 centreclosures

5 centreclosures

2x India33% Others

Full closure of site variance

Strategic 191 to 134Tactical 105 to 54Sunset 47 to 113

25


Guidance for 2007

Objectives> 7.5% full year Divisional Margin (approximately 5.5% Operating Margin) excluding Schneider5 - 5.5% full year Divisional Margin including Schneider

Restructuring

€ 35 m

90%-95% Cash

20 month payback

Third Quarter 2006 RevenuesParis, November 9, 2006

Documents

Third Quarter 2006 Revenues - capgemini.com · 3 2006 Third Quarter Revenues Revenue by discipline Q3 2005 Consulting Services 11.3% Technology Services 33.8% Outsourcing Services