FINANCIAL REPORT 2010 REFEreNCE DOCUMENT CAPGEMINI REFERENCE DOCUMENT 2010 Contents The English language version of this report is a free translation from the original, which was prepared in French. All possible care has been taken to ensure that the translation is an accurate presentation of the original. However, in all matters of interpretation, views or opinions expressed in the original language version of the document in French take precedence over the translation. 1. 6. 1. FINANCIAL HIGHLIGHTS 5 6. CONSOLIDATED FINANCIAL STATEMENTS 113 6.1 Statutory auditors’ report on the consolidated financial statements 114 2. IntRODUctiON 2. 6.2 Consolidated income statement 115 TO thE CAPGEMini GROUP 7 6.3 Statement of income and expense 2.1 Major milestones in the Group’s history 8 recognized in equity 116 2.2 The Group’s activities 9 6.4 Consolidated statement of financial position 117 2.3 The market and competitive environment 11 6.5 Consolidated statement of cash flows 118 2.4 Return to growth in 2010 13 6.6 Consolidated statement of changes in equity 119 2.5 New conquests in 2011 19 6.7 Notes to the consolidated 2.6 Main Group subsidiaries financial statements 120 and simplified organization chart 22 2.7 The Group’s investment policy 24 2.8 Risk analysis 25 2.9 Cap Gemini S.A. and the Stock Market 29 7. caP GEMini S.A. FINANCIAL 7. STATEMENTS 177 7.1 Balance Sheet 178 3. CORPORATE SOCIAL 3. 7.2 Income Statement 180 RESPONSIBILITY 7.3 Notes to the Financial Statements 181 7.4 Subsidiaries and investments 196 & SUSTAINABILITY 33 7.5 Five-year financial summary 197 3.1 Our commitment and strategy 35 7.6 Statutory auditors’ reports 198 3.2 Ethics 40 3.3 Our people 42 3.4 Our stakeholders 56 3.5 The Group and the environment 67 8. TEXT OF THE DRAFT 8. RESOLUTIONS PRESENTED BY THE BOARD OF DIRECTORS TO THE COMBINED 4. MANAGEMENT REPORT 4. SHAREHOLDERS’ MEETING OF MAY 26, 2011 205 PRESENTED BY THE BOARD OF DIRECTORS 8.1 Resolutions presented at the Ordinary TO THE COMBINED SHAREHOLDERS’ MEETING Shareholders’ meeting 206 OF MAY 26, 2011 71 8.2 Resolutions presented at the Extraordinary 4.1 General comments on the Group’s activity Shareholders’ meeting 208 over the past year 72 4.2 Comments on the Capgemini Group Consolidated Financial Statements 9. and outlook for 2011 75 9. SPECIFIC INFORMATION 215 4.3 Comments on the Cap Gemini S.A. 9.1 Legal information 216 Financial Statements 77 9.2 Share capital 218 4.4 Environmental and social impact 9.3 Corporate governance 222 of the Group’s operations 87 9.4 Agreements with executive corporate officers 228 4.5 Financing policy and market risks 88 9.5 Employee profit-sharing and incentive plans 229 9.6 Group management structure 230 9.7 Persons responsible for the audit 5. of the financial statements 231 5. SPECIAL REPORT OF 9.8 Person responsible for information 232 THE CHAIRMAN OF THE BOARD 9.9 2011 provisional financial calendar 233 OF DIRECTORS 91 9.10 Declaration by the person responsible 5.1 The Board of Directors and its activities 93 for the Reference Document 234 5.2 Role and composition of the four specialized committees 97 5.3 Compensation of Directors, non-voting 10. Directors and executive corporate officers 100 10. CROSS-REFERENCE TABLE 235 5.4 General organization of the Group 101 10.1 Information required under Commission 5.5 Internal control and risk management Regulation (EC) no.809/2004 236 procedures 104 10.2 Information required in the Annual 5.6 Statutory Auditors’ report 111 Financial Report 236 http://www.capgemini.com/investor/welcome/ 3 REFERENCE DOCUMENT 2010 CAPGEMINI BOARD OF DIRECTORS Serge KAMPF, chairman Daniel BERNARD Yann DELABRIÈRE Laurence DORS Paul HERMELIN, vice-chairman, chief executive officer Michel JALABERT Phil LASKAWY Bernard LIAUTAUD Thierry de MONTBRIAL Ruud van OMMEREN Terry OZAN Pierre PRINGUET Bruno ROGER NON-VOTING DIRECTORS “CENSEURS” Pierre HESSLER Geoff UNWIN STATUTORY AUDITORS PricewaterhouseCoopers Audit represented by Serge VILLEPELET KPMG S.A. represented by Jean-Luc DECORNOY 4 1. FINANCIAL HIGHLIGHTS CONSOLIDATED FINANCIAL STATEMENTS in millions of euros 2006 2007 2008 2009 2010 Revenues 7,700 8,703 8,710 8,371 8,697 Operating expenses (7,253) (8,063) (7,966) (7,776) (8,110) Operating margin 447 640 744 595 587 % of revenues 5.8% 7.4% 8.5% 7.1% 6.8% Operating profit 334 493 586 333 489 % of revenues 4.3% 5.7% 6.7% 4.0% 5.6% Profit for the year 293 440 451 178 280 % of revenues 3.8% 5.1% 5.2% 2.1% 3.2% Earnings per share Number of shares at December 31 144,081,808 145,425,510 145,844,938 154,177,396 155,770,362 Earnings per share at December 31 (in euros) 2.03 3.03 3.09 1.16 1.80 Dividend per share for the year (in euros) 0.70 1.00 1.00 0.80 1.00* NET CASH AND CASH EQUIVALENTS AT DECEMBER 31 1,632 889 774 1,269 1,063 Average number of employees 64,013 79,213 86,495 90,238 97,571 Number of employees at December 31 67,889 83,508 91,621 90,516 108,698 * Subject to approval by the Combined Shareholders’ Meeting of May 26, 2011. http://www.capgemini.com/investor/welcome/ 5 1. FINANCIAL HIGHLIGHTS REFERENCE DOCUMENT 2010 CAPGEMINI 1 Financial Direction Deputy General Manager and Chief Financial Officer:N icolas Dufourcq to whom report directly : GROUP Functions Finance Director Alain de Marcellus Risk Management and Corporate Finance Lucia Sinapi-Thomas Business Control Anne Trizac Transformation Eric Jahn Mergers and Acquisitions José Gonzalo Financial Communications and Investor Relations Walter Vejdovsky STRATEGIC BUSINESS UNITS Application Services 1 Christophe du Vignaux Application Services 2 Eric Hanania Infrastructure Services Luc Bourguignon Consulting Michel Ginet BPO Oliver Pfeil Sogeti Laurent Llavall MAIN COUNTRIES United States Richard Plessner United Kingdom Tony Deans Netherlands Andy Berrens France Eric Michel India Cyrille Desjonquères 6 2. INTRODUctiON TO thE CAPGEMini GROUP 2. IntRODUctiON TO thE CAPGEMini GROUP 7 2.1 Major milestones in the Group’s history 8 2.2 The Group’s activities 9 2.3 The market and competitive environment 11 2.4 Return to growth in 2010 13 2.5 New conquests in 2011 19 2.6 Main Group subsidiaries and simplified organization chart 22 2.7 The Group’s investment policy 24 2.8 Risk analysis 25 2.9 Cap Gemini S.A. and the Stock Market 29 http://www.capgemini.com/investor/welcome/ 7 2. IntRODUctiON TO thE CAPGEMini GROUP REFERENCE DOCUMENT 2010 CAPGEMINI 2 2.1 Major milestones in the Group’s history 1967 Formation of SoGETI by Serge Kampf, on October 1, in Grenoble (France). 1970 SoGETI and OBM (Organization Bossard Michel) agree to combining IT and consulting services. 1971 Creation of Eurinfor, “facilities management” company, by SoGETI with the Cofradel Group and Lyonnaise de Banque. 1973 The 7th “Rencontres SoGETI” in Djerba (Tunisia), the last ‘Rencontres” to which all Group employees (440) are invited. 1974 SoGETI takes control of C.A.P. (the leading French IT service company at the time) and of Gemini Computer Systems (US). 1975 January 1 marks the official birth of the Cap Gemini Sogeti Group, which, with a headcount of 1,000, becomes Europe’s top IT services company. 9th “Rencontres” in Istanbul (Turkey), with 270 participants. 1976 The Group moves it headquarters to 17, avenue Georges V, Paris. The first Annual Report is published (financial year 1975). 1977 The French authorities veto EDS acquiring a stake in the Group. 1978 The Group takes on the US market and sets up its first “outpost” in Washington DC (Cap Gemini Inc.). 1980 After a long tussle with the SESA, the Group gets the DGT contract to produce the French electronic phonebook by the DGT. 1981 The sale of SORINFOR marks the Group’s withdrawal from processing activities. 1982 Revenues exceed the one billion French franc (150 million euros) mark, of which half is generated outside France. 1984 To general surprise, Serge Kampf declares that English is to be the Group’s official language. 1985 Spectacular initial public offering of the Group’s shares on the Paris stock exchange (with demand 123 times the offer). 1986 The group takes control of SESA, having held a 42% stake since 1982. 1989 The Group reports a year-end after-tax profit of 7.4%, a record not yet broken. 1990 17th “Rencontres” in Marrakesh (Morocco): the 550 participants decided on an aggressive strategy including, if necessary, joining up with an industrial group. Shortly after, the Group makes several acquisitions: SCS in Germany, Hoskyns, the European leader in ”outsourcing” activities, and two US companies (URC and Mac Group) to comprise the Group’s consulting “pole.” The invasion of Kuwait starts off a global economic crisis, which lasted four years. 1991 Daimler-Benz takes a 34% stake in the holding company Sogeti (which itself controls 60% of the Group). 1992 Acquisition of Volmac in the Netherlands (3,200 employees) and Progamator in Sweden (1,600 employees). At the 18th “Rencontres,” which unites 700 managers in Prague (Czechoslovakia), GENESIS is launched. This is Group’s first transformation program, and mobilizes up to 5,000 employees for over a year. By the year-end, Cap Gemini—after 25 years of consecutive growth—announces the first losses in its history (it will be a similar story in 1993 and 1994). 1996 Under the combined pressure of the two other major shareholders, Serge Kampf accepts the “amalgamation” of the two-tiered control of SKIP and SOGETI within the listed company Cap Gemini Sogeti.