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Capgemini
Philippe Donche-Gay
The stock market meets IT sector companies
Paris 2006
2The stock market meets IT vendors companies
Cash evolution
0200400600800
10001200
2000 2001 2002 2003 2004 2005 2006F
The recovery of Capgemini group
Group revenue evolution
0
2000
4000
6000
8000
2000 2001 2002 2003 2004 2005 2006
CAGR+10%
Restructuring Costs
0
100
200
300
400
500
2001 2002 2003 2004 2005 2006 F
Operating margin %
0,0%
2,0%4,0%
6,0%
8,0%10,0%
12,0%
1999 2000 2001 2002 2003 2004 2005 F 2006
3The stock market meets IT vendors companies
Back to basics everywhere
Average staff
30000
40000
50000
60000
70000
2000 2001 2002 2003 2004 2005 2006 F
Productivity rate
95,0
95,5
96,0
96,5
97,0
97,5
98,0
2 003 2 004 2 005 H1 2006 2006 F
Group TS
SupportFunction Costs
SBUs
5%
10%
15%
20%
H1 04 H2 04 H1 05 H2 05 H1 06 H2 06 F
`̀
4The stock market meets IT vendors companies
3 structural achievements
The Outsourcing play
The Rightshore acceleration
The renaissance of North America
5The stock market meets IT vendors companies
Outsourcing transformed the revenue mix
2001 Mix
22%
2005 Mix
38%
OS
6The stock market meets IT vendors companies
Rightshore : acceleration
x 50
Capgemini India
12 000
226 412 11261934
3679
6000
2001 2002 2003 2004 2005 2006
2001
2006
2001 Mix
22%
2005 Mix
38%
OS
7The stock market meets IT vendors companies
Renaissance of Capgemini North America
x 50
Capgemini India
12 000
226 412 11261934
3679
6000
2001 2002 2003 2004 2005 2006
2001
2006
2001 Mix
22%
2005 Mix
38%
OS
P&C Revenue
P&C GOP %
0
100
200
300
H1 2005 H2 2005 H1 2006
-10
-5
0
5
10
H1 2005 H2 2005 H1 2006
8The stock market meets IT vendors companies
Kanbay : A major acquisition underway
LondonDublin
Hong Kong
Singapore
Melbourne
New York
AtlantaBoston
MiamiTampa
Phoenix Washington, DC
ChicagoHeadquarters Office
Offshore delivery centerData center
Chennai
PuneHyderabad
India
Founded in 1989; US headquarters with 16 locationsApproximately 6,900 professionals (5,000 India, 1,600 US, 300 ROW) 3 offshore delivery centers & 2 world class data centers245 active clients
A leading sector focused IT services firm
9The stock market meets IT vendors companies
Capgemini France also managed a recovery
Divisional marginP&C Revenue
-25
0
25
50
75
100
2003 2004 2005 F 20060
250
500
750
1000
2003 2004 2005 F 2006
Utilization
70,0%
72,0%74,0%
76,0%
78,0%
80,0%
82,0%
84,0%
H1 03 H2 03 H1 04 H2 04 H1 05 H2 05 H1 06 H2 06 F
CS TS SupportFunction Costs
0%
5%
10%
15%
20%
H1 04 H2 04 H1 05 H2 05 H1 06 H2 06 F
`̀
10The stock market meets IT vendors companies
Capgemini Consulting leads the pack in France
* Results from the PAC 2006 study"Panorama du conseil en France : Analyse du marché et positionnement des acteurs 2005-2009"
PANORAMA *1 Capgemini Consulting2 McKinsey (dont BTO)3 Boston Consulting Group4 Accenture5 CSC6 IBM BCS7 BearingPoint8 AT Kearney9 Ineumconsulting10 Sopra Group11 Eurogroup12 Roland Berger13 Bain14 Mercer Management Consulting15 Unilog Management
Market evolution *
0
500
1000
1500
2000
2500
2005 2006 2007 2008 2009
Thought leadership Transformation
International practices
HR : Talent’s battle
Growth5% year
11The stock market meets IT vendors companies
Offshore is picking up in France
India Offshore seats August 2006
NA
19%
NEA19%
CSE1%NA OS +
CGE
33%
OSE20%
FRANCE 5%Sogeti3%
Grenoble (BI)
Clermont-Ferrand (Cobol)
Lille (Oracle)
Nantes (Finance Mainframe)
Paris (ADC)
Toulouse (SAP)
ParisLille
Toulouse
Nantes
Grenoble
Clermont-Ferrand
Mumbai Hyderaba
dChennai
Bangalore
KolkataPune
12The stock market meets IT vendors companies
Capgemini “Rightshore” strategy is paying off
Recent WIns
AM IM Packages CustomDevpt
Grenoble (BI)
Clermont-Ferrand (Cobol)
Lille (Oracle)
Nantes (Finance Mainframe)
Paris (ADC)
Toulouse (SAP)
ParisLille
Toulouse
Nantes
Grenoble
Clermont-Ferrand
Mumbai Hyderaba
dChennai
Bangalore
KolkataPune
13The stock market meets IT vendors companies
SOA is key to Financial Institutions
After : Customer centric model
-
Distributor
ProducteurP
Before : Product centric model
Customers Customers Customers
MO
RTG
AG
E
Third
par
tyC
ON
SUM
ER
LOA
NS
PER
SON
AL
AC
CO
UN
T
Reduce cost
Customer
Real time intelligent interaction
Third partyConsumer
Loansfactory
P
P
Mortgagefactory
DifferentiateProducteurP
14The stock market meets IT vendors companies
Are we in the upper part of a cycle ?
-6
-4
-2
0
2
4
6
8
10
95 96 97 98 99 '00 '01 '02' '03 '04 '05 '06 '07 '08 '09 '10
+10%volume
+7%a year
“e-bubble bursts”
ERP + Y2K
15The stock market meets IT vendors companies
IT is expanding everywhere !
MICRO-COMPUTERERA
MAINFRAME ERA
NETWORK ERAENTREPRISES
MOBILITY
OBJECT
3270 C/S
HTTPHTML
XHTMLCSS
16The stock market meets IT vendors companies
Internet evolution – Web 2.0
17The stock market meets IT vendors companies
DesignBusiness Processes
Design Execution
Of servicesbuild /bespoke services
Off the shelf
services
Task
Job
Expertise
Assemble:translate process
into services
Business analyst
Sectorialprocess knowledge
New job !Assembler
Business+ architectureunderstanding
Java.net,legacy
KM
Developer Sectorial KM Software architect
Engine (ESB,Netweaver,…)+ sectorialunderstanding
Software development : a new “assembly line”
Sector expertise is keySector expertise is key
Industrial (r)evolution of software development
18The stock market meets IT vendors companies
We are launching a transformation program
<<
Higher Share of walletBetter RetentionLeveraging references
Higher mark-upSector dominanceFaster diffusion
Lower costsHigher productivityConsistent quality
LeadershipGrowth
Profitability
InnovationIndustrialization
Intimacy
19The stock market meets IT vendors companies
Capgemini enables its clientsto transform and performthrough technologies.
Our Mission :