capgemini paul hermelin, ceo db tmt conference · capgemini paul hermelin, ceo db tmt conference....

Together. Free your energies

9th of September 2010

Capgemini

Paul Hermelin, CEO

DB TMT conference

Together. Free your energies2© 2010 Capgemini. All rights reserved.

Main highlights after H1 2010

H1 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 Initiatives

Good momentum into H2 2010, guidance improved

Developing Capgemini global footprint

• 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%

• 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 headcount


Headcount Evolution by Discipline

4 290

3 827

3 719

3 600

3 700

3 800

3 900

4 000

4 100

4 200

4 300

4 400

Jan 09 Dec 09 Jun 10

Consulting Services

41 674

40 592

44 271

38 500

39 500

40 500

41 500

42 500

43 500

44 500

45 500


Technology Services

18 832

17 888

17 950

17 700

17 900

18 100

18 300

18 500

18 700

18 900


Local Professional Services

26 275

28 090

29 447

26 000

26 500

27 000

27 500

28 000

28 500

29 000

29 500

30 000


Outsourcing Services


Offshore Leverage

Offshore Penetration per unit (billable headcount)


Our Top Line Initiatives boost our growth Application 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 awards

Business 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 accounts

Testing 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 perform


Public ▪ Tax and security system + ?▪ Metropolitan Police (UK); State of Nevada (NA);

Department of Agriculture (NA) ; Prefecture de Police (France ); Futuro (Netherlands )

+31%

Our sector offers’ portfolio is fast following

markets needs

Consumer Product Retail & Distribution

Key offers H1 / H1BookingsSector

Energy, Utilities & Chemicals

▪ Emerging market; Customer analytic; Multichannel

▪ Maxeda (Benelux ); Royal Mail Group Ltd (UK); Kraft Foods (NA); Inex (Finland ); Premier Foods (UK); Groupe Hamelin (France )

Manufacturing

General Services

Telecom & Media

H1 Key Wins

▪ Consolidation; PLM; Customer lifecycle management

▪ New entrants, network engineering, Smart Grid; smart meters

▪ Consolidation; Diversification; Rail network management

▪ Billing; smart phone; digital media

+66%

+56%

H2 Funnel

++

++

+

-5%

- 32%

- 8%

+

=

▪ Hydro one (NA); Fortum Distribution (Scandinavia ); Shen Zhen Energy cooperation (China )

Financial Services▪ Risk Regulation; multi channel

Consolidation/Standardisation -4% +++ ▪ HSBC (NA); Morgan Stanley (NA); Progressive (NA)

▪ Bluescope Steel (Australia )

▪ Trainline (UK); SNCF (France )

▪ Telenor (Norway ); Telekomunikacja Polska(Poland)


2 platforms are already delivering

differentiation and value

Procurement

as a Service

Sourcing & Category

Management

Sourcing & Category

Management

OperationalProcurement

Services

OperationalProcurement

Services

PayablesManagement

PayablesManagement

Compliance

Management

Compliance

Management

ReportingReporting

Procurement PlatformProcurement Platform

Major Win: Kraft Food

EE--services Platformservices Platform

• Strategic Procurement services

• BPO Procurement & Payables services

• Operational Procurement services

• Software as a Service (SaaS) technology

Major Win: Royal Mail Group

Capgemini Immediate is a fully integrated cloud

service that defines the best digital strategy for our

clients, and then selects, integrates and manages

leading cloud suppliers on their behalf


A significant step in the implementation

of Capgemini’s Growth Strategy

Acceleration of external growth in Fast Growing Eco nomies � 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 Com pany� 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 companies

Capgemini acquires 55% of CPM Braxis for 517 M$R (2 33 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 the company and have been proportionally reduced through the transaction.

8© 2010 Capgemini. All rights reserved.

Brazil will now be the 6 th largest country in the Group by headcount


� 1st Step : organic growth in China, India and Braz il

� 2nd Step : Acceleration with acquisition

� Brazil as a first priority : 11 th IT Services market

with double digit growth

� 10 years experience

� 19% of 2009 revenue

� 8,379 headcount

� 25% of revenue with Fortune 100 accounts

� Shared client ownership

� Full responsibility

� Transversal expertise

� Most competitive pricing

Capgemini’s journey towards globalization

is based on three majors pillars


Fast Growing Economies

Started2 years ago

US

OffshoreEmpowered

model

Started6 years ago

Started10 years ago


Latin America IT Service Market Growth($USD billions)

The Brazilian IT services market is the most attractive among the fast growing countries


Source: 2010 Gartner Latin America IT Services Market Growth

11% CAGR - Brazilian IT Services Growth

IT professional services market (2009)($USD billions)

CPM Braxis is the Largest Brazilian IT Services com pany

Source: Gartner Forecast: IT Services, Worldwide, 2000-2014, 2Q10 update


CPM Braxis has 60% recurring revenues and

strong technology depth & breadth of services


Applications Outsourcing� Apps Assessment & Planning� Apps Development� Apps Management Services� Testing Services� Code Factory

Infrastructure Services� Infrastructure Assessment & Planning� Managed Services� Networking Solutions� Hardware as a Service Solution� Servers Solutions� Data Center Services� Contact Center� Information Security

Infrastructure Integration� HW/SW Reselling Business� Networking Integration� Servers & Storage Solutions� Virtualization Solutions� Data Center Solutions

Enterprise Application Services� ERP, CRM, BI Projects � BPM-ECM� Maintenance & Support� Help Desk

% 2010 Revenues

36% 25%

11%28%

5,500 employees


Revenues by sector

CPM Braxis has a solid local presence

in Brazil and +200 client base


Development Centers• Alphaville, SP• Belo Horizonte, MG (275)• Brasília, DF (210)• Florianópolis, SC• Rio de Janeiro, RJ (720, 13%)• Salvador, BA (338)• São Paulo, SP• Volta Redonda, RJ

Note: CPM Braxis has small numbers of employees (~1 or 2 FTEs) in 91 locations throughout Brazil to provide infrastructure field services support.

Amazona

Roralma

Para

Amapa

Maranhao

Piaui

CearaRio GtrandeDo Norte

Paraiba

Pernambuco

Alagoas

SergipeBahiaTocantins

Mato Grosso

Brasilia (DF)

Goias

Minas GeraisEspirito Santo

Rio de Janeiro

Santa Catarina

Parana

Mato GrossoDo Sul

Sao Paulo

Rio GrandeDo Sul

Rondonia

Acre

Financial Services (58%)

Telecom (20%)

Commercial PresenceTechnical Presence

Group Headquarters(Sao Paulo – 3,850, 68%)


Executives Biography Executives Biography

A very talented and

experienced management team

� José Luiz Rossi , CEO� Former GM IBM GBS, Southwest Europe� Former head IBM GBS, LatAm� Former head, PricewaterhouseCoopers, LatAm� Founder, Result Systems

� André Mesquita , CFO� Former VP Cotia Trading Argentina� Former COO/CFO Sertrading

� Rogerio Brecha , COO� Former CEO of Ernst & Young Consulting Brazil� Former Managing Partner of Deloitte Consulting

Brazil� Former VP and GM of Unisys Latin America

� 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

� 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

� David Shpilberg , Vice Chairman, Executive Committee

� Former Partner, Bain & Co. – Head of Global IT Strategy Practice

� Former Vice-Chairman, Ernst & Young – Global Head of IT Consulting

� Former CIO, Goldman Sachs Equities & Asset Mgt.

� Veronika Falconer , Head of Human Resources� Former Latin America HR Lead in Accenture � Over 14 years experience in Human Resources� 11 years of industry experience

© 2010 Capgemini. All rights reserved. 13


CPM Braxis performs above the market

2008 - 2010

729

970

1,009

1,394

Bookings ($R millions) Revenues ($R millions)


38%

19%

1,655

12%

817

18%

(Estimate)(Estimate)


CPM Braxis Financial Estimates


FY 2010EEstimates ($R millions)

Revenue 970

Adjusted EBITDA 8%

Adjusted EBIT 6%

� Revenues will grow 15% - 20% in 2011.� Margins will continue to improve in the medium term .� Extraordinary labor contingency provision in 2010 w ill be 91 M$R. � No further significant labor contingencies going fo rward.


Acquisition Completed at 1x

2010 Estimated Revenue


FV/ Revenues 2010

LatAm IT & BPO Offshore IT Services

2010E Median: 1.6x

Indian IT Services

2010E Median: 4.7x 2010E Median: 2.2x

FV/ EBIT 2010

2010E Median: 12.7x 2010E Median: 16.8x 2010E Median: 16.1x

CPM Braxis

WNSEXLSyntelGen-pact

Cogni-zant

WiproTCSInfosysContaxSondaTivitTotvs

Source: CapitalIQ August 31, 2010 Market Figures

Transaction multiples calculated on a FV of 970 M$R


CPM Braxis shareholders partnering with

Capgemini guarantees successful development


Post-Transaction Shareholder StructurePre-Transaction Shareholder Structure

30.5%45.4%

3.3%20.8%

Private Equity Emplo-

yees

11.9%10.5%20.3%

Private Equity

2.3%

Emplo-yees55.0%

• 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%.


We aim to over perform the market

through three main synergies


Capgemini will fully support its CMA accounts in Br azil through CPM Braxis. Approximately 50% of Capgemini’s CMA accounts have operations in Brazil today generating more than € 5 billion

CPM Braxis can immediately begin to leverage Capgem ini’s alliances and partnerships in their own service offerings

Capgemini will help accelerate the sales of CPM Bra xis’s Remote Infrastructure Management (RIM) services in North America, which t hey have already begun to grow on their own.


Capgemini Expands Global Footprint


North America: 8,088� USA (Local): 6,832� Canada (Local): 1,256

Europe: 56,916� France (Local): 19,594� Benelux (Local): 10,906� UK (Local): 8,294� Iberia (Local): 4,823� Eastern Europe (Delivery): 3,762� Eastern Europe (Local): 643� Nordic (Local): 3,792� Central Europe (Local): 3,496� Italy (Local): 1,544� Ireland (Local): 63

Asia Pacific: 29,825� India (Delivery): 26,287� India (Local): 994� PRC (Delivery): 753� PRC (Local): 723� Australia (local): 625� Philippines (Delivery): 171� Vietnam (Delivery): 137� Singapore (Local): 93� Hong Kong (Local): 42

Central America: 715� Guatemala (Delivery): 485� Mexico (Local): 230

South America: 7,393� CPM Braxis Brazil (Local): 5,500� Capgemini Brazil (Delivery): 598� Capgemini Brazil (Local): 121� Argentina (Delivery) : 403� Argentina (Local): 247� Chile (Delivery): 524

Africa / Middle East: 262� Morocco (Delivery): 256� Middle East & Africa (Local): 6

� Local Developed Markets: 61,360 (59%)� Delivery Centers: 33,376 (32%)� Local Fast Growing Markets : 8,464 (8%)

TOTAL GROUP 103,200


Evolution of Group Remuneration Costs from

H1 09 to H1 10

� 2010 Average salary increase onshore: + 1.3%

� 2010 Average salary increase offshore: + 6.6%

� Average remuneration increase onshore: + 2.8% + 2.0%

� Average remuneration increase offshore: + 10.1% + 1.7%

� Group average remuneration cost evolution: - 1.6% - 2.9%

� Despite increase in average remuneration cost onsho re and offshore, the increase in

offshore leverage (from 27.1% in H1 09 to 31.5% in H1 10) reduces the overall Group average

remuneration cost

At current rates At constant rates


9th of September 2010

Capgemini

Paul Hermelin, CEO

DB TMT conference

capgemini paul hermelin, ceo db tmt conference · capgemini paul hermelin, ceo db tmt conference....

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