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Together. Free your energiesCapgeminiPaul Hermelin, CEODB TMT conference9th of September 2010
Main highlights after H1 2010H1 results are above expectations across the board 2% organic growth in Q2 2010 compared to Q1 2010 Sogeti shows a strong acceleration: -8.1% (Q1 2010/Q1 2009) and 0.1% (Q2 2010/Q2 2009) Double digit growth for Financial Services in Technology services strongly driven by North America ( 30% in H1) 5,8% of operating margin with the same sales investment as in 2009, strong emphasis on the five Top Line InitiativesGood momentum into H2 2010, guidance improved In H1, Outsourcing has renewed and extended key contracts: Hydro One & Met Police, more recently two GM contracts In the other Businesses, the Book-to-Bill ratio in Q2 has significantly increased: 1.28 in Q2 2010 vs. 1.06 in Q1 2010 Improved outlook for the group: H2 2010 yoy organic growth 3 to 5%, FY 2010 operating margin above 6.5%Developing Capgemini global footprint Acquisition of 55% of CPM Braxis for 517 M R (233 M ) CPM Braxis is the largest Brazilian IT services Company, Brazil IT market over 10bnUSD growing above 10% A significant step in the implementation of Capgemini’s Growth Strategy Brazil will now be the 6th largest country in the Group by headcountTogether. Free your energies 2010 Capgemini. All rights reserved.2
Headcount Evolution by DisciplineConsulting ServicesTechnology Services45 5004 4004 2904 30044 27144 5004 20043 5004 10042 50041 6744 00041 50040 5923 9003 82740 5003 8003 7193 70039 5003 60038 500Jan 09Dec 09Jun 10Jan 09Local Professional Services18 900Dec 09Jun 10Outsourcing Services30 00018 83229 44729 50018 70029 00018 50028 50028 09018 30028 00027 50018 10017 95027 00017 88817 90026 50026 27517 70026 000Jan 09Dec 09Jun 10Jan 09Dec 09Jun 10Together. Free your energies 2010 Capgemini. All rights reserved.3
Offshore LeverageOffshore Penetration per unit (billable headcount)Together. Free your energies 2010 Capgemini. All rights reserved.4
Our Top Line Initiatives boost our growthApplication Lifecycle Services : Leadership position Target of 1,5bn bookings in 2010, with a double digit growth WARP1, the phase 1 Wide-Angle Rationalization Program received enthusiastic comments and was analyzed by Gartner as the best in the market SAP Lifecycle is seen as the most innovative of its kind and quoted in the joint SAP/Capgemini press release about our Pinnacle awardsBusiness Information Management : Advanced Solutions Rapid growth driven by demand for solutions to support improved decision making ( 48% bookings increase YTD) Strong progress to evolve industry solution portfolio : Smart energy analytics, FS credit risk, Media IP rights management, Public security ID management Trend towards enterprise wide BI programs and strategic partnering (eg wins at KPN, Canon)Infostructure Technology Services : Prepare PaaS future with cost reduction solutions New India team to lead sales and delivery Two offers to push in H2: BPOS with Microsoft and Immediate, our E-business Platform Our Private Cloud offerings are relevant in the Market: Airbus contract Investment in the “French National strategy for the digital age”Smart Energy Services : Geographic Expansion SES now has a balanced portfolio in NA and Europe, and a presence in China The FORTUM win and SKVADER acquisition positioning Capgemini as a market leader in managed business services for Smart Energy Services 50% of the SES sales and pipeline represent new logo accountsTesting Services : Offshore growth Very strong offshore growth to support the delivery of state-of-the-art testing solutions for customers Expand domain/industry-specific expertise and innovation using Test Labs Focus on North America , France, United Kingdom and Germany: clear opportunity to over performTogether. Free your energies 2010 Capgemini. All rights reserved.5
Our sector offers’ portfolio is fast followingmarkets needsSectorKey offersH1 / H1Bookings H2 FunnelH1 Key WinsConsumer Product Retail& Distribution Emerging market; Customeranalytic; Multichannel 66% Maxeda (Benelux); Royal Mail Group Ltd (UK); KraftFoods (NA); Inex (Finland); Premier Foods (UK);Groupe Hamelin (France)Energy, Utilities &Chemicals New entrants, networkengineering, Smart Grid;smart meters 56% Hydro one (NA); Fortum Distribution (Scandinavia);Shen Zhen Energy cooperation (China) Tax and security system 31% ? Metropolitan Police (UK); State of Nevada (NA);Department of Agriculture (NA) ; Prefecture dePolice (France); Futuro (Netherlands) Risk Regulation; multi l Services-4% HSBC (NA); Morgan Stanley (NA);Progressive (NA)Manufacturing Consolidation; PLM; Customerlifecycle management-5% Bluescope Steel (Australia)General Services Consolidation; Diversification;Rail network management- 8% Trainline (UK); SNCF (France)Telecom & Media Billing; smart phone; digitalmedia- 32% Telenor (Norway); Telekomunikacja Polska(Poland)Together. Free your energies 2010 Capgemini. All rights reserved.6
2 platforms are already deliveringdifferentiation and valueE-services PlatformProcurement Platform Strategic Procurement servicesBPO Procurement & Payables servicesOperational Procurement servicesSoftware as a Service (SaaS) technologyCapgemini Immediate is a fully integrated cloudservice that defines the best digital strategy for ourclients, and then selects, integrates and managesleading cloud suppliers on their behalfSourcing &CategoryManagementReportingProcurementas a ervicesPayablesManagementMajor Win: Kraft FoodMajor Win: Royal Mail GroupTogether. Free your energies 2010 Capgemini. All rights reserved.7
A significant step in the implementationof Capgemini’s Growth StrategyAcceleration of external growth in Fast Growing Economies Brazil is the most mature IT services market among the BRICs and the largest in Latin America. Gartner foresees 10% growth until 2014 for the IT services market in Brazil. Acquisition will enhance our existing Latin America presence from 2,600 to 8,100 employees.CPM Braxis is the largest Brazilian IT services Company Estimated revenue of 1 B R in 2010 (450 M ), with strong FS and Telco sector presence. A very strong 18% revenue CAGR and 25% bookings CAGR from 2008 to 2010. Full IT services provider : Applications (SI & OS), Infrastructure (Consulting, OS, HW / SW reseller). A very solid management team with experience in global IT companiesCapgemini acquires 55% of CPM Braxis for 517 M R (233 M ) Acquisition settled in two parts, a capital increase and a purchase of shares. All current shareholders including Bradesco, the largest shareholder, will maintain ownership in thecompany and have been proportionally reduced through the transaction.Brazil will now be the 6th largest country in the Group by headcountTogether. Free your energies 2010 Capgemini. All rights reserved.8
Capgemini’s journey towards globalizationis based on three majors pillars 1st Step : organic growth in China, India and BrazilStarted2 years agoFast GrowingEconomies 2nd Step : Acceleration with acquisition Brazil as a first priority : 11th IT Services marketwith double digit growth Shared client ownershipOffshoreEmpoweredmodelStarted6 years ago Full responsibility Transversal expertise Most competitive pricing 10 years experienceStarted10 years agoUS 19% of 2009 revenue 8,379 headcount 25% of revenue with Fortune 100 accountsTogether. Free your energies 2010 Capgemini. All rights reserved.9
The Brazilian IT services market isthe most attractive among the fast growing countriesIT professional services market (2009)( USD billions)Latin America IT Service Market Growth( USD billions)s GrrviceeSn ITaziliarBAGRC%11Source: Gartner Forecast: IT Services, Worldwide, 2000-2014, 2Q10 updateowthSource: 2010 Gartner Latin America IT Services Market GrowthCPM Braxis is the Largest Brazilian IT Services companyTogether. Free your energies 2010 Capgemini. All rights reserved.10
CPM Braxis has 60% recurring revenues andstrong technology depth & breadth of servicesApplications Outsourcing Infrastructure ServicesApps Assessment & PlanningApps DevelopmentApps Management ServicesTesting ServicesCode Factory% 2010 Revenues28% Infrastructure Assessment & PlanningManaged ServicesNetworking SolutionsHardware as a Service SolutionServers SolutionsData Center ServicesContact CenterInformation Security25%36%Infrastructure Integration 11%5,500 employeesHW/SW Reselling BusinessNetworking IntegrationServers & Storage SolutionsVirtualization SolutionsData Center SolutionsEnterprise Application Services ERP, CRM, BI ProjectsBPM-ECMMaintenance & SupportHelp DeskTogether. Free your energies 2010 Capgemini. All rights reserved.11
CPM Braxis has a solid local presencein Brazil and 200 client baseRoralmaAmapaAmazonaParaMaranhaoRio GtrandeDo nsRondoniaBahiaSergipeMato GrossoBrasilia (DF)Group HeadquartersGoias(Sao Paulo – 3,850, 68%)Technical PresenceCommercial PresenceDevelopment Centers Alphaville, SPBelo Horizonte, MG (275)Brasília, DF (210)Florianópolis, SCRio de Janeiro, RJ (720, 13%)Salvador, BA (338)São Paulo, SPVolta Redonda, RJMinas GeraisMato GrossoDo SulRevenues by sectorEspirito SantoSao PauloRio de JaneiroParanaFinancial Services (58%)Santa CatarinaTelecom (20%)Rio GrandeDo SulNote: CPM Braxis has small numbers of employees ( 1 or 2 FTEs) in 91 locations throughout Brazil to provide infrastructure field services support.Together. Free your energies 2010 Capgemini. All rights reserved.12
A very talented andexperienced management teamExecutivesBiographyExecutivesBiography Jair Ribeiro, Chairman, Executive Committee Former CEO & Co-Founder, Braxis Former CEO & Co-Founder, Banco Patrimonio Former CEO, Chase Manhattan (Brazil) Former MD, JP Morgan David Shpilberg, Vice Chairman, ExecutiveCommittee Former Partner, Bain & Co. – Head of Global ITStrategy Practice Former Vice-Chairman, Ernst & Young – GlobalHead of IT Consulting Former CIO, Goldman Sachs Equities & Asset Mgt. José Luiz Rossi, CEO Former GM IBM GBS, Southwest Europe Former head IBM GBS, LatAm Former head, PricewaterhouseCoopers, LatAm Founder, Result Systems Rogerio Brecha, COO Former CEO of Ernst & Young Consulting Brazil Former Managing Partner of Deloitte ConsultingBrazil Former VP and GM of Unisys Latin America Paulo Marcelo, VP of Sales Brazil Former Head of Industry Cluster at CPM Braxis Cofounder and former partner of Unitech Tecnologia Former CIO of Braskem, OAS and Vega Ambiental André Mesquita, CFO Former VP Cotia Trading Argentina Former COO/CFO Sertrading Veronika Falconer, Head of Human Resources Former Latin America HR Lead in Accenture Over 14 years experience in Human Resources 11 years of industry experienceTogether. Free your energies 2010 Capgemini. All rights reserved.13
CPM Braxis performs above the market2008 - 2010Bookings ( R millions)Revenues ( R mate)(Estimate)Together. Free your energies 2010 Capgemini. All rights reserved.14
CPM Braxis Financial EstimatesEstimates ( R millions)FY 2010ERevenue970Adjusted EBITDA8%Adjusted EBIT6% Revenues will grow 15% - 20% in 2011. Margins will continue to improve in the medium term. Extraordinary labor contingency provision in 2010 will be 91 M R. No further significant labor contingencies going forward.Together. Free your energies 2010 Capgemini. All rights reserved.15
Acquisition Completed at 1x2010 Estimated RevenueFV/ Revenues 2010LatAm IT & BPOIndian IT ServicesOffshore IT Services2010E Median: 1.6x2010E Median: 4.7x2010E Median: 2.2xFV/ EBIT 20102010E Median: 12.7xTotvsTivitSonda Contax2010E Median: 16.8xInfosysTCSWipro2010E Median: 16.1xCognizantGenpactSyntelEXLWNSCPMBraxisSource: CapitalIQ August 31, 2010 Market FiguresTransaction multiplescalculated on a FV of 970 M RTogether. Free your energies 2010 Capgemini. All rights reserved.16
CPM Braxis shareholders partnering withCapgemini guarantees successful developmentPre-Transaction Shareholder StructurePrivateEquity45.4%30.5%Post-Transaction Shareholder 10.5%11.9% Employees2.3%Total investment from Capgemini is 517 M R for 55% stake in CPM Braxis based on a firm value of 970 M R.The acquisition is settled in two parts, a capital increase of 287 M R and a 230 M R purchase of shares.From the 3rd to 5th years shareholders have call / put options to buy / sell remaining 45%.Capgemini will recognize a balance sheet liability representing the estimated value of the 45%.Together. Free your energies 2010 Capgemini. All rights reserved.17
We aim to over perform the marketthrough three main synergiesCapgemini will fully support its CMA accounts in Brazil through CPM Braxis.Approximately 50% of Capgemini’s CMA accounts have operations in Brazil todaygenerating more than 5 billionCPM Braxis can immediately begin to leverage Capgemini’s alliances and partnerships intheir own service offeringsCapgemini will help accelerate the sales of CPM Braxis’s Remote InfrastructureManagement (RIM) services in North America, which they have already begun to grow ontheir own.Together. Free your energies 2010 Capgemini. All rights reserved.18
Capgemini Expands Global FootprintTOTAL GROUP103,200 Local Developed Markets: 61,360 (59%) Delivery Centers: 33,376 (32%) Local Fast Growing Markets: 8,464 (8%)Europe: 56,916North America: 8,088 USA (Local): 6,832 Canada (Local): 1,256France (Local): 19,594Benelux (Local): 10,906UK (Local): 8,294Iberia (Local): 4,823Eastern Europe (Delivery): 3,762Eastern Europe (Local): 643Nordic (Local): 3,792Central Europe (Local): 3,496Italy (Local): 1,544Ireland (Local): 63Central America: 715 Guatemala (Delivery): 485 Mexico (Local): 230Asia Pacific: 29,825South America: 7,393 CPM Braxis Brazil (Local): 5,500Capgemini Brazil (Delivery): 598Capgemini Brazil (Local): 121Argentina (Delivery) : 403Argentina (Local): 247Chile (Delivery): 524Africa / Middle East: 262 Morocco (Delivery): 256 Middle East & Africa (Local): 6 India (Delivery): 26,287India (Local): 994PRC (Delivery): 753PRC (Local): 723Australia (local): 625Philippines (Delivery): 171Vietnam (Delivery): 137Singapore (Local): 93Hong Kong (Local): 42Together. Free your energies 2010 Capgemini. All rights reserved.19
Evolution of Group Remuneration Costs fromH1 09 to H1 10 2010 Average salary increase onshore: 1.3% 2010 Average salary increase offshore: 6.6%At current ratesAt constant rates Average remuneration increase onshore: 2.8% 2.0% Average remuneration increase offshore: 10.1% 1.7%- 1.6%- 2.9% Group average remuneration cost evolution: Despite increase in average remuneration cost onshore and offshore, the increase inoffshore leverage (from 27.1% in H1 09 to 31.5% in H1 10) reduces the overall Group averageremuneration costTogether. Free your energies
Together. Free your energiesCapgeminiPaul Hermelin, CEODB TMT conference9th of September 2010
Software as a Service (SaaS) technology Major Win: Royal Mail Group . Maintenance & Support Help Desk % 2010 Revenues 36% 25% 28% 11% 5,500 employees. Together. Free your energies Revenues by sector . DB TMT conference Capgemini - Deutsche Bank TMT Conference .
