CONTENTS - Capgemini

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2 ANNUAL FINANCIAL HIGHLIGHTS in millions of euros REPORT 2006 Capgemini CONSOLIDATED FINANCIAL STATEMENTS 2004 (1) 2005 2006 REVENUES 6,235 6,954 7,700 OPERATING EXPENSES 6,259 6,729 7,253 OPERATING MARGIN Amount (24) 225 447 % (0.4%) 3.2% 5.8% OPERATING PROFIT/(LOSS) Amount (281) 214 334 % (4.5%) 3.1% 4.3% PROFIT/(LOSS) FOR THE YEAR (534) 141 293 NET MARGIN (%) EARNINGS PER SHARE (8.6%) 2% 3.8% Weighted average number of ordinary shares 131,292,801 131,391,243 132,782,723 Basic earnings/(loss) per share (in euros) (4.07) 1.07 2.21 Number of shares at December 31 131,383,178 131,581,978 144,081,808 Earnings/(loss) per share at December 31 (in euros) (4.07) 1.07 2.03 Weighted average number of ordinary shares (diluted) 132,789,755 138,472,266 147,241,326 Diluted earnings/(loss) per share (in euros) (4.02) 1.06 2.07 NET CASH AND CASH EQUIVALENTS AT DECEMBER 31 285 904 1,632 AVERAGE NUMBER OF EMPLOYEES 57,387 59,734 64,013 TOTAL NUMBER OF EMPLOYEES AT DECEMBER 31 59,324 61,036 67,889 (1) Restated in accordance with IFRS.
THE CAPGEMINI GROUP I – COMPANY HISTORY Founded by Serge Kampf in Grenoble in 1967, Capgemini has grown to become one of the world’s leading consulting and information technology service companies by driving a strategy of development and diversification that has combined both internal and external growth. 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 with the acquisition of two American companies, United Research and Mac Group, in the early 90s, the German company, Gruber Titze & Partners, in 1993, followed by the French firm Bossard in 1997. More recently, the acquisition of Ernst & Young Consulting (2000) strengthened the Group’s global profile, significantly increasing its presence in North America and in a certain number of European countries. The years 2001, 2002, 2003 and 2004 proved to be 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% to Group revenues in 2005. In the area of outsourcing, from 2004/2005 onwards, the Group reaped the rewards from the efforts undertaken to establish its presence both in Europe and in North America by winning 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 provision of its services. The system is modulated according to the requirements, the project envisaged and the specific culture of the particular client. This is the idea behind Rightshore TM . The Group’s profile has therefore changed significantly in a few years, demonstrating an ability to respond to the new challenges arising in the IT services and consulting industries. The 2005 results evidenced this firm recovery. 2006 was a financial period of strong growth and increased profitability for the Group as shown by the dynamism of its disciplines, strengthened by its sector expertise. This year it posted net income of 293 million euros and revenues of 7.7 billion euros. Capgemini has regained its fighting spirit as demonstrated by the acquisitions of Kanbay, FuE and Indigo. In addition, due to the deep changes in the market, the Group has decided to launch an ambitious and demanding program of development and conquest. II – THE CAPGEMINI DISCIPLINES A - One mission, four disciplines The Capgemini mission: is to help its clients to transform in order to improve their performance. For this purpose, an integrated service offering, comprised of sector expertise and specific disciplines, is proposed to them accordingly. The four Capgemini disciplines are: Consulting Services (CS): helping our clients to identify, structure and execute their transformation projects, for a longlasting impact on their growth and competitive edge. Technology Services (TS or Integration): formulating, developing and implementing all kinds of technical projects, from the very smallest to the very largest. Outsourcing Services (OS): assisting our clients in complete or partial outsourcing of their information technology systems and other closely-related activities. Local Professional Services (Sogeti or LPS): offering a range of information technology services adapted to local needs in terms of infrastructure, applications and engineering. Present in thirty-two countries and with a workforce of 68,000, generating revenues of 7,7 billion euros in 2006, the Group offers a wide range of integrated services, organized around its four disciplines and sector expertise. Services range from strategy-making to the maintenance of IT systems. Each of the four business lines, comprising the Group’s service offering, exists as an autonomous unit with its own objectives, business models and recruitment processes. By combining the expertise of these units, integrated transformation services can be offered to our clients. Hence, the Group’s key strength lies in knowing how to interlink its multiple skills in order to respond to projects requiring a crosswise approach, thereby satisfying the needs of clients seeking commitment to the achievement of measurable, sustainable results. Capgemini is independent from any software publisher or hardware manufacturer. In an effort to provide our clients with the best products and know-how, the Group has formed a network of strategic alliances and partnerships. This enables us to freely and knowingly select and deliver reliable solutions, precisely tailored to each and every client’s needs. Capgemini ANNUAL REPORT 2006 Capgemini 3
Page 1: CONTENTS 02 Financial highlights 03
Page 5 and 6: Prospects for 2007. Demand should r
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Page 9 and 10: Professional IT Services Market Sha
Page 11 and 12: Simplified organization chart for t
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is based on the percentage of attai
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internal control procedures cannot
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specific issues relating to the fol
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Management and, above all, the Chai
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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) Restated in accordance with IFR
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Exchange differences arising on mon
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term growth rates for the period be
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Other financial liabilities With th
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NOTE 3 - CHANGES IN GROUP STRUCTURE
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In 2004 and 2005, restructuring cos
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The difference between the French s
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Fair value of options granted and i
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Dilutive impact of the June 24, 200
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Net value of goodwill At December 3
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Reconciliation of the acquisition c
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Deferred tax liabilities at Decembe
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Total accounts receivable net of ad
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Upon early redemption, the bonds ma
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The facility agreement includes cov
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Cap Gemini S.A. pays a variable rat
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B) Analysis of movements in provisi
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F) Contributions to plans in 2007 T
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NOTE 20 - CURRENT AND NON-CURRENT P
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At December 31, 2006, commitments r
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Results for 2004 break down as foll
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At December 31, 2005, assets and li
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NOTE 27 - NUMBER OF EMPLOYEES A) Av
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NOTE 29 - LIST OF CONSOLIDATED COMP
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Country Consolidated company % inte
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FIVE-YEAR FINANCIAL SUMMARY in mill
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STATUTORY AUDITORS’ SPECIAL REPOR
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STATUTORY AUDITORS’ SPECIAL REPOR
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TEXT OF THE DRAFT RESOLUTIONS PRESE
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Ninth resolution Authorization to b
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Meeting may decide to appropriate a
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Proposed renewals of financial auth
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Changes in the Company’s capital
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CORPORATE GOVERNANCE To avoid repet
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MEMBERS OF THE BOARD Yann DELABRIÈ
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MEMBERS OF THE BOARD Phil LASKAWY D
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DIRECTORS’ INTERESTS This informa
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Fees paid by the Group to the Statu
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CROSS-REFERENCE TABLE To facilitate
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CONTENTS - Capgemini

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