Merrill Lynch TMT Conference June 5, Paul Hermelin CEO

Transcription

1 Merrill Lynch TMT Conference June 5, 2007 Paul Hermelin CEO

2 Agenda 2007 update Kanbay integration 1

3 Our 2007 Objectives Improve operational efficiency Focus on low performing units Further MAP roll-out Favor offshore margin accretion Develop NA New leaders development Grow Consulting Services Additional vertical offers Grow offshore leverage 1:3 Leverage Kanbay Integration FSI (NA, UK, test Continental Europe) Non-FSI: regional adjustment India harmonization Prepare for step changes in Consulting BPO This will lead us to: 9% growth & 7.0% operating margin in 2007 above market growth & 8.5% operating margin in

4 Q1 was another strong quarter across the board Consulting / Technology Services Kanbay Local Professional Services CS / TS / LPS / Kanbay Outsourcing Services TOTAL GROUP Q1 07 / Q % 1.5% 4.6% 3.7% 4.8% 4.1% Q1 07 / Q % 26.9% 8.1% 12.0% 18.1% 14.2% At constant rates and perimeter, including Kanbay 3

5 Agenda 2007 update Kanbay integration 4

6 Capgemini and Kanbay bring together unique, but highly complementary capabilities Clients: Access to significant client base Offers: More focused on business offers E.g., assessing banking multi-channel management Geography: Strongest in Europe Delivery: Local presence Positioning: Global presence Access to talent in India: Mumbai, Bangalore, Kolkata Clients: Ability to create long term relationships Offers: More focused on technology offers with domain strength E.g., cards processing Geography: Strongest in North America Delivery: One-team global delivery model Positioning: Domain knowledge down to the keyboards Access to talent in India: Pune, Hyderabad, Chennai Combined Capabilities Deliver end-to-end industry solutions (business and technical) capabilities to clients around the world, specifically in the Financial Services Provide our services seamlessly in one-team global delivery model 5

7 The integration process is fully on track Maintain highest levels of Customer Satisfaction while preserving g and leveraging Kanbay deep domain expertise and growth momentum Provide the same high quality services our customers expect. Business as usual Enhance clients experience as we integrate our product offerings and technological capabilities Financial Services India Platform to be leveraged by Capgemini European clients 2007 February 15 th Capgemini Year End Results Announcement Closing Date February 8th February Integration Phase I Begins February 21 st March April 2 nd FS SBU launched March 9 th Phase II Implementation plan Integration Balance of

8 Agenda 2007 update Kanbay integration 7

9 IT Services today: a tale of two worlds % Revenue Growth 50% 40% 30% 20% 10% #1 Listed European IT Services Company 1 st European to move massively offshore: +92% 2006 Q1 07 continues growth momentum: +18% revenues Capgemini Logica EDS Accenture Tata Infosys Satyam Wipro Patni 0% ATOS 5% CSC IBM 10% 15% 20% 25% 30% -10% Operating Margin % Rankings Gartner IT Services Worldwide Market Metrics Database April 2007 Kathryn Hale. 8

10 The landscape is due to change 25% Price Pressure Revenue, Growth & Margin % Revenue Growth 20% 15% 10% 5% Global Western Leaders Offshore Players Operating Margin 0% -10% The Pack 5% 10% 15% 25% Operating Margin % 9

11 An in-depth transformation is needed Industrialization New operating model Innovation Independence Domain Experts Cost Value Add Intimacy New relationship model 10

12 Intimacy: from Vendor to Partner to our largest Clients 30 Group or Country Managed Accounts From 10 to 20 Strategic relationships by 2009 And 10 more at that level by and 4 Disciplines 37% 1 Discipline 12% 2 Disciplines 51% Bring the full strength of our Group to our clients 1 Discipline 10% 2 Disciplines 3 and 4 20% Disciplines 70% CMA 2006 CMA % above average growth in the Group 11

13 Allow to build lasting relationships through collaboration Reduced Time to Market Global Expansion Reduced Business & Operational Risk Higher Business Agility Lowered TCO Responsive Resource Mgmt. Increasing Business Value Basic Governance Flexibility & responsiveness Consistent Quality Domain expertise Vendor Staff Augmentation Headcount on-demand (primarily onsite) In time resource availability assured Align model with client business strategy Ensure success of relationship transforming projects Coverage Preferred Vendor Transactional, non-critical offshoring Individual teams service separate business units Headcount and limited project-based time & materials and/or fixed bid Quality & cost of resources assured Highly Integrated teams Innovation Knowledge management Valued Partner Aligned teams, transformational projects Centralized teams managed across many BUs Extension of customer team into a lower cost talent pool Quality & cost of projects assured Accelerators Strategic Partner Multi-layered relationships, shared goals Strategically-aligned partners willing to share goals, risks and rewards Blend alternate channels of services delivery to create a highly adaptive model Quality & cost of engagement assure Timelines Short Term Mid Term Long Term Managed Growth 12

14 Innovation: key to add value I. Invent Engage Exploit & Refresh II. III. Identify Leverage/Accelerate Industrialize Emerging Technology bets CM % Business/Technology Vision 2010 Domain Expertise and Solutions powered by India (industrialization) DELIVERS IV. Process & Governance Time 13

15 Industrialization will drive us towards the right model Offshore leverage 60-80% BPO Kanbay Model 2: KPI alignment Model 3: strategic partnership 30-60% NA Model 1: people NLassignment Fr UK 0-30% LPS One Team Capacity Capability Partnership 14

16 And requires a deep transformation of our organization Onshore 3% 5% 6% 1% 1% Offshore Onshore transformation Transfer of bench and contractors offshore Sector expertise, engagement management, architecture, functional design 10% 9% 1% 2% Innovation 16% 14% 2% 4% 27% 22% 13% 12% 3% 12% 9% 25% Offshore transformation Stronger client and project management capabilities Moving from a capacity to a capability management logic 15

17 But can be done smoothly assuming benign market conditions Billing consultants Onshore 54,300 (80%) +3% y/y 60,000 (60%) Subs Offshore Subs 13,300 (20%) +32% y/y 40,000 (40%) 67,600 FTE 100,000 FTE 16

18 Conclusion: a strong ambition and the means to it Be part of Top 5 Global Leaders 2 North America + 1(?), 2(?) India Transformation plan Industrialization New operating model Innovation Independence Domain Experts Cost Value Add Intimacy New relationship model Roll-out plan : H2 07 through 09 ; From pilots to deployment Best, Sustainable Performance Throughout the Cycle 17

19 Merrill Lynch TMT Conference June 5, 2007 Paul Hermelin CEO