2005 Financial Report - Capgemini

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2 FINANCIAL HIGHLIGHTS in millions of euros CONSOLIDATED FINANCIAL STATEMENTS 2004 2005 REVENUES 6,235 6,954 OPERATING EXPENSES 6,259 6,729 OPERATING MARGIN Amount (24) 225 % (0.4%) 3.2% OPERATING PROFIT/(LOSS) Amount (281) 214 % (4.5%) 3.1% PROFIT/(LOSS) FOR THE PERIOD (534) 141 NET MARGIN (%) EARNINGS/(LOSS) PER SHARE (8.6%) 2% Number of shares at December 31 131,383,178 131,581,978 Weighted average number of ordinary shares (diluted) 132,789,755 138,472,266 Diluted earnings/(loss) per share (in euros) (4.02) 1.06 NET CASH AND CASH EQUIVALENTS AT DECEMBER 31 285 904 AVERAGE NUMBER OF EMPLOYEES 57,387 59,734 TOTAL NUMBER OF EMPLOYEES AT DECEMBER 31 59,324 61,036 ANNUAL REPORT 2005 Capgemini
THE CAPGEMINI GROUP I – HISTORY Founded by Serge Kampf in Grenoble in 1967, Capgemini has grown to become one of the world’s leading consulting and information service companies by following a strategy of development and diversification that has combined both internal and external growth. Hence, the Group has progressively extended its activities in Europe, in particular with the acquisition of Programator in Scandinavia, Hoskyns in the United Kingdom (1990), and Volmac in the Netherlands (1992). At the same time, Capgemini has developed its management consulting activities due to the acquisition of two American companies - United Research and Mac Group - in the early 1990s, in addition to a German company - Gruber Titze & Partners - in 1993, and then Bossard, a French firm, in 1997. More recently, the acquisition of Ernst & Young Consulting (2000) strengthened the Group’s international profile, significantly increasing its presence in North America and in a certain number of European countries. The years 2001, 2002, 2003 and 2004 proved particularly difficult for the IT service sector and it became necessary to rebalance Capgemini’s portfolio of activities in favor of two of its disciplines – local IT services and outsourcing – and around the Rightshore TM concept. The acquisition of Transiciel, at the end of 2003, enabled Capgemini to double the size of Sogeti, an entity formed in 2001 in the local professional services domain and which contributed 16% of Group revenues in 2005. In the area of outsourcing, as of 2004 and 2005, the Group reaped the rewards from the efforts undertaken to establish its presence both in Europe and in North America due to a number of major contracts (HMRC, TXU, Schneider Electric). In addition, Capgemini became the first European company to take the offshore route. Capgemini chose to set itself apart from its major rivals by proposing an “à la carte” system for the production of its service, which is based on the following: the customer’s needs, the intended project itself and the client’s culture as well. This is the Rightshore TM concept. The Group’s profile has therefore changed significantly in a few years, demonstrating its ability to face up to the new challenges that the IT services and consulting industries present. The 2005 results evidence a confirmed recovery: net profit of €141 million, an operating margin of 3.2% of revenues which, at almost €7 billion, grew by 15% compared to 2004 (the exchange rate and scope remaining constant). II – THE CAPGEMINI DISCIPLINES Four Disciplines, One Mission Capgemini’s mission is to support its clients as they transform their businesses in order to improve performance. Present in some thirty countries, employing 61,000 people, the Group, which generated nearly €7 billion in revenues in 2005, offers a range of services harmoniously coordinated around its four disciplines and its sector expertise. These services extend from the drawing up of strategies to the maintenance of information systems. The Group’s offering consists of four major disciplines. Each of these acts as a specialist in its area. In addition, by combining their expertise, they are able to produce for clients, an integrated offering of transformation services. This is one of the Group’s key strengths: knowing how to bring together multiple skills in order to address projects that call for a crosswise approach, thereby satisfying the needs of clients who are looking for a commitment to achieve real, measurable, sustainable results. These four core areas of activity are organized into autonomous units, each with its own objectives, business models and recruitment processes. Capgemini’s fundamental disciplines include: • Consulting Services (CS): helping our clients to identify, structure and implement transformation projects that will have a lasting impact on their growth and competitive edge; • Technology Services (TS): systems integration and application development – formulating, developing and implementing all kinds of technical projects, from the very smallest to the very largest; • Outsourcing Services (OS): assisting our clients in the complete or partial outsourcing of their IT systems and other suitable activities; • Local Professional Services (LPS): offering a range of IT services adapted to local requirements in terms of infrastructures, applications and engineering. Capgemini is independent from any software publishing houses or hardware manufacturers. In an effort to provide its clients with truly the best products and know-how, the Group has formed a network of strategic alliances and partnerships. This enables it to remain objective yet fully ANNUAL REPORT 2005 Capgemini 3
Page 1: CONTENTS 02 Financial highlights 03
Page 5 and 6: gence of new players in the global
Page 7 and 8: tions and industry trends, and so o
Page 9 and 10: In fact, the requirement for banks
Page 11 and 12: Simplified organization chart for t
Page 13 and 14: and profitable growth, enabling a p
Page 15 and 16: Graduate Mobility scheme allowing g
Page 17 and 18: Chinese team members. The team is r
Page 19 and 20: Year Average headcount End of year
Page 21 and 22: In order to fine-tune its assessmen
Page 23 and 24: 6.3.5 Learning, a major priority Ge
Page 25 and 26: way dialog through its approach to
Page 27 and 28: In terms of women’s representatio
Page 29 and 30: • taking environmental impact int
Page 31 and 32: ties managed by leading financial i
Page 33 and 34: usiness interruption, arising from
Page 35 and 36: STOCK MARKET CAPITALIZATION From Ja
Page 37 and 38: MANAGEMENT REPORT PRESENTED BY THE
Page 39 and 40: - Consulting + 2.6% - Technology Se
Page 41 and 42: was more than offset by the investm
Page 43 and 44: fer of the special long-term capita
Page 45 and 46: i.e., 116% of his theoretical varia
Page 47 and 48: two convertible bonds mentioned abo
Page 49 and 50: XII - AUTHORIZATION TO BUY BACK THE
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some years the main corporate gover
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the list of the beneficiaries of th
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used in the Netherlands and the US,
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diarity and define three levels of
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forecasts for the next six months a
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GROUP CONSOLIDATED FINANCIAL STATEM
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CONSOLIDATED STATEMENTS OF INCOME F
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CONSOLIDATED STATEMENTS OF CASH FLO
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(1) See Note 1.K. (2) At December 3
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Intragroup transactions are elimina
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at the date of acquisition, which i
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Accounts and notes receivable Accou
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epresents a commitment to convert o
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NOTE 5~OTHER OPERATING INCOME AND E
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NOTE 8~INCOME TAX EXPENSE Income ta
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The Group has no contractual or imp
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NOTE 10~INTANGIBLE ASSETS Changes i
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NOTE 11~PROPERTY, PLANT AND EQUIPME
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Deferred tax assets over one year p
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Deferred tax liabilities can be ana
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NOTE 16~OTHER RECEIVABLES At Decemb
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usiness day) at a price of €41.90
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cisable by the TXU group during the
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B) Fair values At December 31 (in m
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NOTE 20~PROVISIONS FOR PENSIONS AND
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The total relating to other employe
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NOTE 23~ACCOUNTS AND NOTES PAYABLE
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Under IFRS, the sale of carry-back
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B) Analysis of depreciation, amorti
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II. SEGMENT REPORTING BY BUSINESS S
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NOTE 30~LIST OF CONSOLIDATED COMPAN
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Country Consolidated % interest Con
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III. RECONCILIATIONS BETWEEN THE FR
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C) Reconciliation between French GA
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E) Reconciliation between French GA
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G) Reconciliation between French GA
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I) Analysis of IFRS transition rela
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equity in the IFRS balance sheet at
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effective interest rate to the carr
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SUBSIDIARIES AND INVESTMENTS in mil
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STATUTORY AUDITORS’ SPECIAL REPOR
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ment for contributions in kind and
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TEXT OF THE DRAFT RESOLUTIONS PROPO
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the date hereof, for a term of two
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issuance costs against the related
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the Statutory Auditors, the General
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Appropriation and distribution of e
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Proposed renewals to financial auth
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exchange offer to acquire all of th
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Current ownership structure The own
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List of Directorships and other off
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FIRST OFFICES HELD IN 2005 OTHER OF
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DIRECTORS’ INTERESTS This informa
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DECLARATION BY THE PERSON RESPONSIB
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2005 Financial Report - Capgemini

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