Excerpts from analysis of Capgemini's 4Q05 results (Feb 25, 2006)

Annex Bulletin 2006-11 February 25, 2006

Excerpts from CONFIDENTIAL client edition

IT SERVICES

Updated 3/02/06, 10:00PM MST; adds chart

Analysis of Capgemini's 2005 Business Results

Capgemini Tops Rivals

Strong Finish to a Great Year; Revenues Up 12% (15% in Constant Currency)

MOSCOW, Feb 25 - Capgemini finished 2005 with a bang. Revenues surged by 11.5% (up 15% at constant currency) to €6,954 million ($8,345 million). More importantly, the company reported a €225 million operating profit, as compared to a €24 million operating loss in 2004. Net profit was €141 million compared to a €534 million loss the year earlier. Last but not least, net cash rose from €285 million to €904 million, and the company declared a €0.5 per share dividend.

[snip]

New Bookings

While the fourth quarter new bookings were an improvement over the third period results, they could not stave off a 41% drop in new contract signings for the year.

New outsourcing contracts almost matched those in the consulting and technology services in the fourth quarter (€1.1 billion vs. €1.3 billion), and by far exceeding the deals signed in the first three quarters of the year.

[snip]

Business Segment Results

Among the largest Capgemini countries, the U.K. and Ireland outperformed France last year growing its revenue by 3.8% to €1.74 billion versus a 2.6% rise to €1.67 billion for the company's home country.

[snip]

Outlook

Hermelin, the CEO, said he expected the IT services market to grow in the mid-single digit range in 2006. Capgemini should outgrow the market, he opined, forecasting a 6% to 7% increase in its revenues.

[snip]

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Volume XXII, Annex Newsflash 2006-11
February 25, 2006

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