Printable Edition Click Here  :  Subscribe   :   Page  4  :    :  December 2005 
  Go to page:  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16           Previous Page      Next Page
Capgemini raises revenue forecast after strong Q3 growth
 
  
   
 
 
 
 
 
 
 
 forecasts remain
unchanged at 2.9%.
   Compared to the same
period last year,
outsourcing showed the
highest growth rate,
15%, and today
represents 39% of
Capgemini’s revenues.
Other parts of the
business posted a 7%
growth. Growth was
particularly strong in
Europe at 13% with a
slight revenue decrease
in North America at
-1.3%.
   Compared to the
previous quarter, and at
constant rates and
perimeter, Capgemini
posted an overall 4%
drop in revenues, which
the company said was in		 
 line with the historical
negative seasonality
effect. At current rates
and perimeter, Capgemini
said the additional 1%
decrease can be
explained by the sale of
the North American
Healthcare practice.
   North American
revenues, however,
showed a 1.4% increase.
Most analysts seem
convinced that the
recovery of Capgemini’s
North American business
is on track, and
management says the
business will be
profitable next year.
   Bookings for the
third quarter totalled
1,251m euros, up 1.3%
over the third quarter		 
 2004 (and up 8.6% in
outsourcing alone).
Capgemini said that, in
the United States, these
bookings have been in
constant progression for
three consecutive
quarters.
   In the second half of
2005, the outsourcing
business should post a
positive operating
profit, said the firm.
   Capgemini also
unveiled a plan to lift
the operating margin at
its outsourcing division
to 4% in 2006, after a
negative margin in the
first half of this year.
The plan, code-named MAP
for Margin Acceleration
Plan, will be launched
in January and could		 
 cost about 70m euros; it
will focus on
rebalancing outsourcing
contracts between large
and smaller-sized deals,
focusing more on
mid-sized deals.
   The plan also
involves cost-saving
initiatives at 70
production sites
worldwide, speeding up
the outsourcing push
outside North America to
India, reducing
purchasing spending and
the use of contractors,
and renegotiating
money-losing deals. Out
of a total of 515
contracts, 29 such deals
have been identified.
   		 
 Capgemini reported
consolidated revenue for
the third quarter of
2005 of 1.674bn euros
($1.96bn), up 10% in
like-for-like sales of
1.587bn euros for the
third quarter in 2004.
   Capgemini adjusted
its revenue forecast
upwards, towards a
like-for-like growth
rate close to 14% for
the full year, up from
an earlier forecast of
12%. Operating margin		 
 
Changing market puts pressure on outsourcers
 
 An IDC study of the top
100 outsourcing deals in
2004 reveals fundamental
changes in the
outsourcing marketplace,
including a dramatic
shift to more business
process outsourcing
(BPO), an increase in
the number of players,
and a reduction in total
deal value. These
developments reflect
increased competition
and expansion in the
marketplace, and create		 
 pressure for traditional
outsourcers to alter
their business models in
order to successfully
compete in the coming
years.
   The value of the top
100 outsourcing deals in
2004 decreased by 1.2%
from $69.1bn in 2003 to
$68.3bn in 2004.
However, qualifying for
the top 100 in 2004
required a minimum deal
value of $184m, a 5.1%
increase from 2003. The		 
 study also found that
the share of BPO and
processing services
deals in the top 100
outsourcing deals
increased from 15.2% in
2003 to 25% in 2004,
while the share of IT
outsourcing services
suffered a decline to
75% of the 2004 market.
   The study found that
the number of players
participating in the top
100 deals increased from
26 in 2003 to 34 in		 
 2004. While just three
players captured 55.6%
of the contract value
for the top 100 deals in
2003, seven were needed
to reach roughly the
same amount (55.9%) in
2004, with IBM leading
the way, followed by
CSC, EDS, Atos Origin,
HP, Accenture, and
Fujitsu.
   Geographically, the
value of deals captured
by Asia/Pacific
(APAC)-based contracts,		 
 though still small,
showed a jump from 0.7%
of total deal value in
2003 to 3.9% in 2004.
EMEA-based players, as
determined by
headquarters, increased
their take of these
deals from 21.7% in 2003
to 38.9% in 2004, while
vendors in the Americas
saw a decrease from
76.7% to 56.3% during
this same period.
   		 
  Consulting Times | Page 4 Previous Page     Next Page