Cap Gemini: First-Half 2009 Results in Line with Targets

PARIS--(Business Wire)--
Regulatory News:

The Board of Directors of Cap Gemini S.A. (Paris:CAP) was convened on July 29,
2009 under the Chairmanship of Serge Kampf to approve the consolidated financial
statements of the Capgemini Group for the first half of 2009. The Group`s key
figures for the period are as follows:

(in millions of euros) First-half First-half

2008
2009
Revenues 4,374 4,376
Operating margin(1) 332 287
as a % of revenues 7.6% 6.6%
Operating profit(2) 288 167
Profit for the period 231 78
Net cash and cash equivalents at June 30 533 576

The Group reported consolidated revenues of €4,376 million for first-half 2009,
virtually identical to first-half 2008. On a like-for-like basis (constant Group
structure and exchange rates), revenues suffered a modest 2.2% decline in line
with forecasts. Thanks to strong sales momentum and a diverse business
portfolio, the Group proved its resilience in a challenging economic
environment.

Bookings in the first six months of the year represented an amount of €4,433
million, once again mirroring the Group`s first-half 2008 figures (€4,497
million). Bookings surged 35% in Outsourcing, but were down 12% on average in
the Group`s three other businesses (Consulting Services, Technology Services and
Local Professional Services), which are more sensitive to changes in the
economic climate. However, the book-to-bill ratio for these businesses was 1.07.

Operating margin came in at 6.6% of revenues, down one percentage point on the
same year-ago period. The fall in operating profit was steeper, down to €167
million as a result of restructuring costs incurred in adapting the Group to the
changed economic landscape.

The sharp drop in short-term interest rates narrowed the return on cash
investments. Finance expense, net, came in at €39 million, up 160% on first-half
2008 (€15 million), while income tax expense for the period also rose a sharp
19% on the same year-ago period, to €50 million. This weighed heavily on profit
for the period,which slumped to €78 million.

In contrast, net cash and cash equivalents came in higher year-on-year by €43
million (€576 million versus €533 million at June 30, 2008). Net cash and cash
equivalents totaled €774 million at December 31, 2008, but naturally declined
following the payment of a €1 per share dividend (representing a total dividend
of €143 million) approved by the April 30 Shareholders` Meeting. The Group`s
financial strength has been reinforced by a new issue of
convertible/exchangeable bonds ("OCEANE"), an early refinancing of the OCEANE
bonds maturing on January 1, 2010 that thereby extends the maturity of the
Group`s debt.

Operations by region

* North America: revenues for the region advanced 3.1% on a reported basis but
shed almost 8% stripping out fluctuations in the dollar. Operating margin came
in at 5.1% of revenues (5.8% in first-half 2008).
* Europe and Rest of the World: France remains the Group`s largest region.
Revenues retreated 4.6%, although it should be noted that Technology Services
reported revenue growth. The United Kingdom and Ireland region, where
Outsourcing dominates, delivered strong 12.7% like-for-like growth. Benelux,
where the crisis has been particularly severe, saw revenues fall 6.5%, while
other regions reported a decline of 4.0% on average. Italy and Asia Pacific
turned in upbeat performances, but elsewhere the gloomy economic mood weighed on
results. With the exception of Benelux, which nonetheless posted respectable
profitability levels (7.5% of revenues), all regions focused on stemming the
decline in their operating margin. In France for example, operating margin came
in at 4.8% for the period, down only 0.2 percentage point on first-half 2008.

Operations by business segment

* Outsourcing Services delivered 2.6% revenue growth on a like-for-like basis
(constant Group structure and exchange rates), fulfilling its role as a
stabilizing force among the Group`s businesses. Operating margin performed
remarkably well, edging up nearly 2 percentage points to 6.5% of revenues.
* Technology Services saw revenues slip just 2.6% while profitability was 6.1%.
* Sogeti, especially sensitive to changes in the economic cycle, managed to stem
the decline in its revenues, which retreated 5.4% on the back of a sharp
industry downturn. Its operating margin was 9.1%.
* Consulting Services, also vulnerable to changes in the economic mood, saw
revenues slip 13.4%. In contrast, operating margin remained in double figures at
10.5% of revenues, thanks to a tight rein on operating performance indicators.

Headcount

At June 30, 2009, the Group had 89,453 employees, up 3.4% on June 30, 2008 but
down 2.4% on December 31, 2008. Based mainly in India, as well as Poland, China,
Morocco and Latin America, 28% of the workforce (25,027 employees) was based
offshore, versus 26% one year earlier. In the second half of 2009, Capgemini`s
Rightshore® solutions will be rolled out to Vietnam, with the integration of a
development and maintenance platform staffed by around 100 professionals serving
French clients in the insurance sector.

Outlook

During the period, the first signs emerged of a relative stabilization of
activity in some regions. In a few cases, there were even indications of an
upcoming upturn in demand. Out of prudence, however, the Group expects that
Outsourcing will be the only business to enjoy a relative degree of stability in
the six months to December 31. Its other business should continue to report a
decline in year-on-year revenues, accentuated by the revenue growth recorded in
the year-earlier comparative period. Overall, the Group`s revenues should
decline by between 4% and 6% in the second half on a like-for-like basis
(constant Group structure and exchange rates), resulting in a contraction of 3%
to 4% for the year as a whole. Tighter cost control should however permit the
Group to achieve operating margin of around 7% of revenues.

1 Operating margin, one of the Group`s key performance indicators, is defined as
the difference between revenues and operating expenses. Operating expenses are
the sum of the total cost of services rendered (costs incurred for the execution
of client projects), selling expenses, and general and administrative expenses.

2 Operating profit includes expenses relating to shares and stock options
granted to certain employees, and non-recurring income and expenses, notably
goodwill impairment, capital gains and losses on disposals, restructuring costs,
the costs of integrating companies recently acquired by the Group, and the
effect of curtailments and settlements relating to defined benefit pension
plans.

CAPGEMINI
Press:
Christel Lerouge, +33 1 47 54 50 76
or
Investor Relations:
Manuel Chaves d`Oliveira, +33 1 47 54 50 87

Copyright Business Wire 2009

http://www.businesswire.com/news/home/20090729006366/en