Still life with candle - Volodia Popov

Group presentation

CAPGEMINI’S MARKETS

The Group’s services are normally delivered in an industry context, with offers tailored to clients’ exact needs, and often integrating capabilities from different disciplines. An overview of the main industries served by Capgemini helps understand the Group’s activities.

In the public sector, public administrations are transforming themselves to become efficient, low cost service providers, and Capgemini intends to be their partner of choice. As a result, the public sector’s weight in the Group’s business has expanded in the last few years and for 2004 reached 15 percent.

In 2005, it is expected that public administrations will keep pushing vigorously for improved services and higher efficiency, but also face new challenges, like a growing focus on public security. Budget constraints in information management will be met through outsourcing in a wider range of countries, the growing use of civilian technologies by defense departments, and increased emphasis on offshore development, previously a taboo subject in many countries.

The manufacturing, retail and distribution sector represents about a third of the Group’s business. It contributed half of European outsourcing bookings in 2004. Business Process Outsourcing is coming of age in manufacturing and life sciences, while the movement toward enterprise-wide applications and data management has resumed, with more new large projects than in recent years.

Apart from these general trends, each segment addresses specific client issues and opportunities. In retail and consumer products, for example, Capgemini is helping companies unlock the benefits of new enabling technologies, such as global data synchronization, radio frequency identification, mobility and in-store customer interaction. In life sciences, the emphasis is now on product lifecycle management, the fight against counterfeiting, quality management and the continuing transformation of research and development.

In 2005, work with partners in sector specific uses of their applications will contribute to growth in this sector. In China, Capgemini grows by supporting large firms to expand in the country, and by helping Chinese companies internationalize.

2004 was a great year for Capgemini in the energy, utilities and chemicals sector. TXU Corp. engaged in a major partnership with the Group (see page 32) which, together with earlier Canadian outsourcing deals, creates a powerful platform of competencies and capabilities for utilities in North America. The outsourcing of the whole “meter to cash” process sets utilities free to concentrate on their core businesses, making it easier for them to compete successfully in a deregulated marketplace.

In Europe, Capgemini has taken advantage of the July 1, 2004 opening of markets to expand its services, thus enabling its clients to comply with new legislation and be successful in this increasingly competitive environment.

For oil companies, the Group has reinforced its position in lubricants and in functions such as client relationship and human resources management.

In 2005, these favorable developments should continue, with an increased flow of know-how across the Atlantic.

In the financial services sector, clients have returned to strong and sustainable profitability and are focusing on revenue growth again. They are accelerating the launch of new products and services, investing in customer relationship applications, and pursuing acquisitions. They are also devoting more resources to compliance with new regulations - such as Basel II for banks, Solvency II for insurance companies, Sarbanes/Oxley for anti-money laundering provisions.

In this context, the Group has enriched its offerings in the fields of risk and compliance, and retail insurance, while reinforcing its leading edge position in wealth management, retail banking and transaction services.

For 2005, we expect the Group to benefit from its good positioning and capabilities in financial services.

In the telecom, media & entertainment sector, major players have regained substantial investment power and growth is again high on their agenda: this newly vibrant market opens up significant opportunities for Capgemini.

Convergence of fixed line, mobile communications and media is leading to major reorganizations. Application systems are undergoing massive change, too, for example to provide real time billing with a mix of prepaid and postpaid, digital rights management, and endto- end service provisioning and assurance. Applications management remains the main area for outsourcing, while business process outsourcing is growing in the United States. All of these developments promise a good level of demand in 2005.