On April 15, 2004 we have changed our name to Capgemini.

Size: px
Start display at page:

Download "On April 15, 2004 we have changed our name to Capgemini."

Transcription

1 On April 15, 2004 we have changed our name to Capgemini. To help you achieve measurably faster, better and more sustainable results we have taken this opportunity to formalize our core strengths into what we call the Collaborative Business Experience. Our clients tell us that what makes Capgemini different is the unique, collaborative way in which we help them take advantage of opportunities and solve their problems. Collaboration has long been a recognized cornerstone of our approach to business and is part of our DNA. We believe that success and collaboration go hand in hand and we have been a pioneer in developing collaborative practices such as our innovative Accelerated Solutions Environment (ASE), which helps companies create rich strategic and technology solutions in record time. Why do we place so much emphasis on collaboration? We believe that collaboration is the business imperative of our time. For a decision to be both relevant and effective in today s complex and unpredictable environment, few companies can succeed alone. In our work with thousands of the world s best companies we have found that there are four key elements to successful collaboration: Targeting Value, Mitigating Risk, Optimizing Capabilities and Aligning the Organization. However, Capgemini s Collaborative Business Experience is not a one-size-fits-all approach. The more complex the challenge and the situation, the more collaboration is required. We adapt the level of collaboration based on the nature of your needs and complexity. The document you have downloaded, which refers to Cap Gemini Ernst & Young, was issued prior to our name change. It has not been modified to refer to Capgemini since it is part of our archives.

2 Analysts Meeting February 21, 2002 Paul Hermelin Chief Executive Officer

3 Agenda Introduction 2001 Financials Market & Business analysis CGE&Y in 2002 and beyond Paul Hermelin Chief Executive Officer Frédéric Lemoine Group Vice President, Chief Financial Officer Mark Hauser Group Vice President, Global Sectors, Alliances and Lines of business Paul Hermelin Chief Executive Officer 2001 Annual Results February 2002 / 2

4 2001 was the first full year for the new Group What happened in 2001 The organization had been designed for growing markets Our sector/geography/service offerings mix was not optimal Key figures Dec 31, 2001 Revenue ( mn) 8,416 Operating income ( mn) 423 Group s net income ( mn) 152 EPS (in ) 1, Annual Results February 2002 / 3

5 To face this tough environment: We started streamlining the complex organization inherited from the merger process We executed 2 major restructuring programs in order to adapt capacity and to respond to price pressure by reducing cost per billable employee. 2 nd Half 2001 as planned as announced actual (in mn) in Jan. 01 in June 01 Revenue 5,000 4,600 3,976 Operational costs 4,500 4,200 3,822 Operating income We continued to build capabilities (CRM, transformational outsourcing and centre-based global delivery) 2001 Annual Results February 2002 / 4

6 Our strategic vision is the right one: we will pursue it The right fundamentals for growth Value-added services combining industry knowledge and technology Strong client relationships Balanced international presence 3 major strategic execution guidelines Sign and deliver high visibility big/global deals Manage dynamically our services portfolio to match market demand real-time Tackle the fast growing Professional Services market segment through Sogeti, a dedicated organization 2001 Annual Results February 2002 / 5

7 Our objective: restore profitable growth In order to achieve this objective, we will keep on: ❶ Adjusting real time our strategy to market conditions/opportunities ❷ Improve the Group s responsiveness for better execution 2001 Annual Results February 2002 / 6

8 ❶ Tactical adaptations continue in 2002 Sectorial mix: we are actively managing our sector portfolio into resilient and growing sectors Business mix: while continuing to develop Project & Consulting core businesses, we will grow outsourcing with a 30% mix target within the next 3 years Geographical mix: ready to seize opportunities in under-represented areas 2001 Annual Results February 2002 / 7

9 ❷ Improve Group s responsiveness in 2001 in 2002 Matrix P&L responsibilities 13 Service Lines A leaner and more efficient organization On-going integration process 2/3 of newly appointed managers in new business units Structure simplification Regional P&L responsibilities 3 Lines of Business Sectors focused on sales generation more client-facing roles Align legal & operational structures Launch of Sogeti DONE DONE Stable organization & management 2001 Annual Results February 2002 / 8

10 ❷ Improve Group s responsiveness (cont d) in 2001 in dimensions Monthly reporting only Siebel under deployment Reporting No more dual reporting DONE Implementation of weekly reporting on: Bookings/Utilization rate/cash Siebel fully leveraged by salesforce Management control DONE No comparison reference affecting business awareness / ROI Sophisticated/complex bonus setting Year-on-year comparability Improved budget process and reliability Simplified bonus system 2001 Annual Results February 2002 / 9

11 Group governance CEO Central Team Finance Risk/Corporate Development People Relationships Mngt Communications Operations Team 4 Directors of Operations Finance Global priorities 5 Global Sectors Units 3 Lines of Business 11 Major business units 2001 Annual Results February 2002 / 10

12 2001 Results Frédéric Lemoine Group Vice President, Chief Financial Officer

13 Revenue evolution 2000 CONSOLIDATED ,931 M + 21,4 % 8,416 M PRO FORMA At current rates & structures 8,471 M -0,6% 8,416 M At 2001 rates & structures + 0,3 % 8,393 M 8,416 M 2001 Annual Results February 2002 / 12

14 Organic revenue evolution by geography in M Proforma at constant rates and structures North America ,1% UK & Ireland ,9% Nordic ,7% Benelux ,2% Central Europe ,4% France ,4% South Europe ,5% Asia Pacific ,9% TOTAL ,3% Europe + 4.3% 2001 Annual Results February 2002 / 13

15 Revenue split by geography Asia Pacific (3%) Nordic (7%) 7% Central Europe (7%) France (15%) 3% 6% 16% 5% Southern Europe (5%) UK (16%) 17% 12% Benelux (12%) 34% (in 2000) North America (35%) 2001 Annual Results February 2002 / 14

16 Operational costs and operating income in 2001 H H Full Year 2001 Revenue Operational Costs Operating income Operating margin 6.1% 3.9% 5.0% Utilisation and price: key drivers of margin throughout the year Cost reduction in H2 vs H1: 349 M September 11 events had a -19 M direct impact on H Annual Results February 2002 / 15

17 Operating income by geography in M 2001 Operating income 2001 Operating margin 2000 Operating margin North America 178 6,3% 8,5% UK & Ireland -3-0,2% 11,2% Nordic 10 1,7% * 5,8% Benelux ,4% 16,0% Central Europe 25 4,8% 13,1% France 83 6,1% 12,4% South Europe 12 2,7% 8,0% Asia Pacific -10-4,6% 0,0% TOTAL 423 5,0% 10,5% * w/o SPP refund 2001 Annual Results February 2002 / 16

18 2001 Restructuring costs 181 M in 2001 including : 85 M in H1 : 96 M in H M of 2000 provisions used in ,400 lay offs including : 4,400 gone as of December 31, 2001 : 1,000 still under notice in 2002 Loss making operations closed or down-sized Office space rationalization : US, UK, France, Germany, Holland, Australia, Singapore Capacity cut to fit expected demand Cost per billable employee reduced to face price pressure 2001 Annual Results February 2002 / 17

19 Headcount evolution by geography December 2000 June 2001 December 2001 North America UK & Ireland Nordic Benelux Central Europe France South Europe Asia Pacific TOTAL Without people leaving early January: Annual Results February 2002 / 18

20 2001 Other revenue & expenses (in M ) Restructuring costs (181) Vertex Capital Gain 32 Issy les Moulineaux building Capital Gain 21 Discount effect on North America tax asset 20 US investments depreciation (18) Others (disposals, exchange gain/losses, ) (13) Total (139) 2001 Annual Results February 2002 / 19

21 2001 Income Statement In M Consolidated Revenue Operating Income Operating Margin Financial Result Other & Restructuring Income Before Taxes Taxes effective tax rate Equity Minority Interests Goodwill Amortization Net Income Net profitability Fully diluted weighted average number of shares (in millions) Earnings per share (in euros) % % % Annual Results February 2002 / 20

22 2001 Income Statement - comparison vs consolidated 2000 In M Consolidated Revenue 2000 consolidated Operating Income Operating Margin Financial Result Other & Restructuring Income Before Taxes Taxes effective tax rate Equity Minority Interests Goodwill Amortization Net Income Net profitability Fully diluted weighted average number of shares (in millions) Earnings per share (in euros) % % % % % % Annual Results February 2002 / 21

23 2001 Full Year Income Statement - comparison vs pro forma 2000 In M Consolidated Revenue Operating Income Operating Margin Financial Result Other & Restructuring Income Before Taxes Taxes effective tax rate Equity Minority Interests Goodwill Amortization Net Income Net profitability Fully diluted weighted average number of shares (in millions) Earnings per share (in euros) 2000 pro forma % % % % % % Annual Results February 2002 / 22

24 2001 Balance sheet Assets (in M ) at 31 Dec at 31 dec Liabilities (in M ) at 31 dec at 31 dec Intangible assets Tangible assets Shareholders Equity Financial assets Minority Interests Total fixed assets Net Group Equity LT debts LT deferred tax assets Other LT liabilities Total non-current assets Total LT liabilities Trade receivables (net) Trade payables Other assets Other liabilities Cash & cash equivalent ST borrowings & overdrafts Total current assets Other liabilities TOTAL ASSETS TOTAL LIABILITIES Annual Results February 2002 / 23

25 2001 Cash evolution in M H1 H2 YE Opening cash & cash equivalent Operating cash flow Capital expenditure (net) Investment in Cap Gemini NV shares Investment in Vertex Other acquisitions / disposals of investments Capital increases (stock options) Dividends paid Net change in borrowings Translation & other TOTAL Variation Closing cash & cash equivalent Net cash position: 698 M 2001 Annual Results February 2002 / 24

26 2001 bookings: a disappointing year-end ,6 % H1: M M -12,6 % H2: M M Book-to-bill ratio Full year: Project & Consulting : 1.07 Outsourcing : Annual Results February 2002 / 25

27 Market and Business Analysis Mark Hauser Group Vice President Global Sectors, Alliances & Lines of Business

28 2001 Revenue Mix by Sector % of revenue Growth (%) Weighted growth (%) Telecom & Media 17 (7) (1.2) Financial Services 16 (19) (3.7) Consumer Products, Retail & Distribution Energy & Utilities Public & Other services High Tech & Automotive 9 (3) (0.3) Manufacturing & Other 9 (10) (1.0) Life Sciences & Chemical Health TOTAL 100% 0.3% 0.3% 2001 Annual Results February 2002 / 27

29 2002 sector priorities Temporary weaknesses Telco Focus on major operators, outsourcing and billing systems Financial Services & Insurance Shifting mix to transformational outsourcing, back office cost reduction and CRM Stabilizing High Tech & Automotive Leverage strong global account base, order-to delivery and AM outsourcing Consumer Products, Retail & Distribution Emphasis on transaction channels, distribution segment, AM outsourcing 2001 Annual Results February 2002 / 28

30 2002 sector priorities resilient and growing Energy, Utilities & Chemicals Utilities deregulation, customer management, ERP and outsourcing Life Sciences Strong global accounts and CRM expansion Health Leverage #1 position in U.S. and deep industry-specific offerings Public Growth in UK, France, Holland and expand in the U.S Annual Results February 2002 / 29

31 2001 Revenue by Line of Business Strategy & Technology Consulting Business Solutions & Technology (of which Sogeti 7%) % of mix 80 Project & Consulting 80% 76% Outsourcing 15% 63% 60 22% Outsourcing % 24% H1 H2 H1 H2 Growth 2001 vs 2000 H2 / H1 Growth (3%) (11%) 9% 13% 2001 Annual Results February 2002 / 30

32 2001 achievements and 2002 priorities 2001 achievements 2002 priorities Projects and consulting + Technology Consulting, CRM, B2B-Supply Chain CRM Magic Quadrant Siebel Market share B2B-Supply Chain #1 Build on Market leadership CRM B2B-Supply Chain Adaptive IT & Enterprise + New offerings Adaptive IT Offering Extended Enterprise Effectiveness (E3) Outsourcing + Secured leading outsourcing contracts + NA outsourcing doubled Transformational Outsourcing Bundling ( AM-Inside ) U.S. growth 2001 Annual Results February 2002 / 31

33 Productivity and Delivery Excellence Center-based network Distributed Global Delivery Methods and Tools On-site ASEs (14 centers) Accelerated Solutions Environment Off-site ADCs (14 hubs) Advanced Development Centers AMSCs (12 hubs) Applications Management Service Centers Near-shore Off-shore Deliver methods OTACE Reusable frameworks Engagement Mgnt Knowledge Mgnt 2001 Annual Results February 2002 / 32

34 2001 global accounts achievements % growth 2001 vs % Global accounts Entire sector 5% -19% -3% 16% 17% 28% 24% 45% FSI HTA E&U LSC CPRD 3% 23% of 2001 group revenue across 96 accounts (vs 20% in 2000) Market share gains 2001 Annual Results February 2002 / 33

35 Global Accounts Focus on Global Accounts 20% of Group Increase Account Size and Share Clients are consolidating relationships 70% of service lines active in one account Geographic coverage (more that 50 accounts operate in 3+ regions) Account Management Model Run as a business Top CGE&Y executives Develop Global Account teams 2001 Annual Results February 2002 / 34

36 Our Sales Channels Relationship Accounts (75%) MARKET Transaction Accounts (25%) Account Management PULL PUSH PLACE PUSH PLACE «Strategic Selling» Compelling business proposition Comprehensive offering «Solution Selling» SL/ SO Alliance Partners «Tactical Selling» Professional Services «Solution Selling» SL/ SO Alliance Partners «Tactical Selling» Professional Services A good mix of relationship and transaction accounts generates the optimal result 2001 Annual Results February 2002 / 35

37 Sogeti is focused on local IT professional services Local sales and delivery model Operations in France, Benelux and USA 550 M revenue base and over 5,000 people Service mix focused on high quality technical assistance 2001 Annual Results February 2002 / 36

38 2002 and beyond Paul Hermelin Chief Executive Officer

39 2002 working assumptions We start 2002 with: Massive cost reductions behind us Flat bookings due to negative impact of restructuring measures on H sales Headcount & costs structure geared for current markets Expected market rebound in 2002 supported by 4 key factors: Customers resume spending New technology & network economy still there Growing segments: CRM, Supply chain, Clarification with audit is an opportunity Main Challenge is Sales Effectiveness 2001 Annual Results February 2002 / 38

40 2002: remobilize for profitable growth Rebuilding the front-end of the company Simple organization focused on markets and clients Comprehensive allocation of bookings objectives No exclusive focus on large engagements but a re-balance towards: Professional Services with Sogeti Transaction sales Account relationships while maintaining permanent cost control through: A leaner structure Productivity campaign 2001 Annual Results February 2002 / 39

41 Beyond 2002 CGE&Y will be the adaptive Consulting and IT Services Group helping its customers to leverage technology and become themselves adaptive ❶ Combine empowerment and globality for innovative business solutions Leverage individual empowerment Reinforce line of business/sector global capabilities Develop the leaders of tomorrow 2001 Annual Results February 2002 / 40

42 Beyond 2002 (cont d) ❷ Build the Group around people Drive people development Enhance flexibility Foster teaming culture Sustain drive and mobilization to deliver our ambition ❸ Build the Group on innovation Compelling propositions for our clients combining industry content and technological expertise Adaptive IT/Entreprise Rewrite rules of project delivery Maximize speed, flexibility and focus 2001 Annual Results February 2002 / 41

43 We want our Group: to be «best in class» in achieving outstanding financial results to be recognized as a world-class innovator to set the standards in the market with our level of services to be the employer of choices 2001 Annual Results February 2002 / 42