Annex Bulletin 2006-11                               February 25, 2006

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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

Bob Djurdjevic, Editor
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