Focus on France ING - June 8, 2007
Philippe Donche-Gay CEO West Europe Luc-François Salvador, CEO Sogeti Philippe Tavernier, CEO Sogeti France Our 2007 Objectives
Improve operational efficiency Develop NA
Focus on low performing units New leaders development Further MAP roll-out Grow Consulting Services Favor offshore margin accretion Additional vertical offers Grow offshore leverage 1:3
Leverage Kanbay Integration Prepare for step changes in
FSI (NA, UK, test Continental Consulting Europe) BPO Non-FSI: regional adjustment India harmonization
This will lead us to: 9% growth & 7.0% operating margin in 2007 above market growth & 8.5% operating margin in 2008
1 Q1 was another strong quarter across the board
Q1 07 / Q4 06 Q1 07 / Q1 06 Consulting / Technology Services 3.7% 12.3% Kanbay 1.5% 26.9% Local Professional Services 4.6% 8.1% CS / TS / LPS / Kanbay 3.7% 12.0% Outsourcing Services 4.8% 18.1% TOTAL GROUP 4.1% 14.2%
At constant rates and perimeter, including Kanbay
2 IT Services today: a tale of two worlds
50% #1 Listed European IT Services Company Tata 1st European to move massively offshore: Infosys 40% +92% 2006 Satyam Q1’07 continues growth momentum: Wipro +18% revenues 30% Patni
20% Capgemini Accenture 10% Logica % Revenue Growth EDS
0% CSC ATOS5% IBM 10% 15% 20% 25% 30% -10% Operating Margin %
Rankings – Gartner IT Services Worldwide Market Metrics Database April 2007 Kathryn Hale. 3 The landscape is due to change
Revenue, Growth & Margin Price Pressure 25%
Offshore 20% Players Global Western 15% Leaders
10% Operating Margin % Revenue Growth 5%
0% The Pack 5% 10% 15% 25% -10% Operating Margin %
4 An in-depth transformation is needed
Higher Share of wallet Intimacy Better Retention Leveraging references
Industrialization Innovation
Lower costs Higher mark-up Higher productivity Sector dominance Consistent quality Faster diffusion
5 Intimacy : from Vendor to Partner for our largest Clients
1 Discipline 3 and 4 Disciplines 12%
30 Group / Country Managed 37% Accounts 2 Disciplines 51%
CMA 2006 Bring the full strength of our Group to our clients
1 Discipline 10% 2 Disciplines 3 and 4 20% 50% above average growth in the Disciplines Group 70%
CMA 2010
6 Industrialization is not just about offshore capacity
Capgemini India Kanbay Balanced Pyramid microcosm SMEs & Relationship Managers model 2006 PMs & Test Managers • Integrated “one team” concept BAs and Architects
• Balanced skill Senior Developers distribution
x 50 Developers 2001 • Relevant Industry Offshore Onsite 12 000 experience Certifications & Training • High onsite- Certification # offshore leverage Capital Markets trained 352 6000 Capital Markets certified 245 • High pyramid Industry certifications 86 3679 leverage Testing 14 1934 PM, Process 5 1126 • Full spectrum 412 226 of trainings & Programming conceptual 31 certifications: Database 11 2001 2002 2003 2004 2005 2006 technology, Java technologies 13 industry, leadership MS technologies 12
7 Industrialization will drive us towards the right model
Offshore leverage
Model 3: 60-80% BPO Kanbay strategic partnership Model 2: KPI alignment
30-60% NA
Model 1: people NLassignmentFr UK
0-30%
LPS One Team
Capacity Capability Partnership
8 But can be done smoothly assuming benign market conditions
Billing consultants 2010
2006
60,000 +3% y/y (60%) Onshore 54,300 (80%) Subs
Subs 40,000 13,300 +32% y/y (40%) Offshore (20%)
67,600 FTE 100,000 FTE
9 Innovation is “Top of the Mind” for our Clients
Innovation Productivity
Profitable Growth
Collaboration
Our clients are clearly back in a growth cycle
Commoditization is unavoidable in most Industries
Innovation is again central in the CXO’s agenda
10 Innovation: key to add value
I. InventII. Engage III. Exploit & Refresh
Identify Leverage/Accelerate Optimize/renew
Emerging Offerings
CM % Domain Expertise and Solutions “powered by India” Business/Technology Vision 2010
Time Process & IV. Governance
11 Focus on France ING - June 8, 2007 Capgemini is the #1 professional services provider in France
2 billion euros revenues (Q1 annualized)
6.6% Growth in Q1 07
Capgemini Revenue 2006
South Asia Europe Operating Margin North 1% America France FY 05 H1 06 H2 06 FY 06 4% 17% 24% CS-TS 7.9% 7.9% 10.1% 9.0%
OS -20.7% -33.3% -44.7% -39.4% 7% 28% Central LPS 5.2% 4.5% 6.9% 5.7% Europe 14% 6% UK TOTAL 2.6% 0.7% -0.1% 0.3% & Ireland Benelux Nordic
13 The financials situation has greatly improved !
Revenue evolution Operating margin
1000 100 75 750 CAGR 50 > 40% 500 25
250 0
0 -25 2003 2004 2005 2006 2003 2004 2005 2006
Utilization CS TS Support France Function Costs 82,2% 20% 84,0% 14,8% 15% 80,0% 10% 78,0% 10% `
74,0% 72% 5%
70,0% 0% H1 03 H2 03 H1 04 H2 04 H1 05 H2 05 H1 06 H2 06 H1 04 H2 04 H1 05 H2 05 H1 06 H2 06
14 Capgemini Consulting leads the pack in France
Market evolution * PANORAMA * Growth 5% 1 Capgemini Consulting 2500 year 2 McKinsey (dont BTO) 2000 3 Boston Consulting Group 4 Accenture 1500 5CSC 1000
6 IBM BCS 500 7 BearingPoint 0 8 AT Kearney 2005 2006 2007 2008 2009 9 Ineumconsulting 10 Sopra Group Thought leadership Transformation 11 Eurogroup 12 Roland Berger International practices 13 Bain 14 Mercer Management Consulting HR : Talent’s battle 15 Unilog Management
* Results from the PAC 2006 study "Panorama du conseil en France : Analyse du marché et positionnement des acteurs 2005-2009"
15 Grow in value : A differenciated strategy
Be recognized as Grow “Best in Class” market share In the market
Transformation & Operations Stratégie et Transformation
COR
Bobst
Nissan Véolia
Suez CA Unedic
PSA Michelin Groupama AirFrance Schneider Covea CE Total La poste MinFi BNP Volvo
EDF/GDF ATAC SNCF % Contribution
16 Capgemini “Rightshore” strategy is paying off
Lille Recent WIns Paris Nantes Clermont-Ferrand AM IM Packages CSD Grenoble Toulouse
MumbaiPune Kolkata Hyderabad Bangalore Chennai
Clermont-Ferrand (Cobol) Nantes (Finance Mainframe)
Grenoble (BI) Paris (ADC)
Lille (Oracle) Toulouse (SAP)
17 SOA is key to Financial Institutions
Before : Product centric model After : Customer centric model
Reduce cost Customers Customers Customers Customer
P
Real time intelligent
interaction - Distributor
P ProducteurP Differentiate
ProducteurP Third party
LOANS Mortgage Consumer ACCOUNT
PERSONAL factory Loans Third party CONSUMER MORTGAGE factory
18 The Three Related Worlds of IT
People
I The World Consumer The Internet Web 2.0 N Wide Web C T Internet U E S G T R O A Processes M T E E Enterprise R D nTier & Service Systems Client Server Components Oriented & E Architecture X U P S E E R Information R i E N Enterprise Data Master C Data Relational Warehousing E Data Base Data Management & BI Management
19 The priorities of transformation at TS France
OFFSHOREOFFSHORE -- AM AM
PRODUCTIVITYPRODUCTIVITY
APPLICATIONAPPLICATION CONSULTINGCONSULTING
BIBI -- DATA DATA MANAGEMENTMANAGEMENT
SAPSAP -- ORACLE ORACLE
20 Capgemini et Sogeti are building the IT of RWC 2007
21 Sogeti Geographical presence
− Revenues 2006 € 1.3 billion − A workforce of over 17,000 staff spread over 200 locations. − 2006 : opening of new geographies (Ireland, Denmark, UK).
U.S. (13.1%) Sweden (5.9%)
Netherlands (16.9%) Benelux Germany (0.4%) (7.1%) Switzerland France (0.6%) (52%) Spain (4%)
22 Sogeti business lines
High Tech Consulting Engineering R&D Embedded software Scientific calculation 15% Engineering sciences
HTC Application Services
Audit, Consulting, Project Management Software Development AS IS 33% Testing, ERP Application Management
Infrastructure Services 52 % Audit, Consulting, Project Management, Insourcing Security, Rollout, Help Desk
*Figures at 31/12/05
23 Sogeti Breakdown by sector
Sogeti Group revenues 2006 : € 1.309 billion
Bank & Insurance
26% Industry 35%
12%
Public & Utilities 9% 17%
Telecom Services
24 Sogeti Top 11 Clients
ALCATEL BNP PARIBAS CEGETEL EADS EDF FRANCE TELECOM GDF ING BANK PSA RENAULT SOCIETE GENERALE
Top 11 clients : 27 % of revenues in 2006. 25 Sogeti : an organisation on a human scale
− Flexibility and rapid adaptation to the market, − Entrepreneurial spirit, − 200 locations worldwide, P&L Responsability
B.U. manager Assistant A territory
Business Unit Client Representative A market sector
A business line Technical manager
26 Presentation Sogeti France
CA 2006 : 659 M€ (U 7,19 %) 8591 BILLING FTE
27% 29% HTC AS + 16 % + 4 % 2372 CSS 2333 CSS
IS +4,4 % 3806 CSS
44% PORTFOLIO MANAGMENT AND OFFERINGS IMPROVEMENT ON CONTRIBUTION, C.O.R.
GROWTH AT 8 % AND GOP IMPROVEMENT OF 1.5 pt
27 Focus on France ING - June 8, 2007