First comments on the FIRST-HALF RESULTS of the new Group CAP GEMINI ERNST & YOUNG
9 August 2000
After several months of preparation and ratification by the shareholders meeting on May 23rd, the integration of the consulting activities of Ernst & Young in the new Group is progressing quickly. From May 23rd, integration started immediately and the Group has been operating as one Group. The alignment of accounting principles has, however, proved to be more complicated than expected, thus delaying until mid-September the release of the final 2000 first-half results and sometimes making comparisons with the corresponding periods of the previous year difficult.
Based on the information available at this time, the following comments can be made:
- consolidated revenue (non-audited) that will be published by the new Group Cap Gemini Ernst & Young for the first six months of 2000 (including Ernst & Young Consulting revenue since May 23rd) should be 2,611 million euros, representing an increase of 18.6% over the 2,202 million euros published by Cap Gemini for the first six-months of 1999;
- based on the new structure, i.e. assuming that the consulting activities of Ernst & Young were integrated as of January 1st, revenue for the first-half of 2000 would have been 4,096 million euros, representing an increase of approximately 5.5% over the combined revenue for the first-half of 1999, the latter calculated on an approximated pro-forma basis;
- the average growth rate of 5.5% for the first-half is made up of 8.0% for the first quarter and 3.2% for the second, which reflects the new Group’s very strong focus on issues related to the integration and the reorganisation in process. Alignment of new structures and appointment of new responsibilities should be complete by October 1st. This, along with an improved orderbook and a favourable economic environment, should allow the new Group to achieve an increase in consolidated revenue for the year of approximately 10% over the pro-forma consolidated revenue realised by the two groups for the 1999 calendar year;
- the pro-forma operational margin for the first-half of 2000 should be around 10%, which is in line with the objective set for the year (margin between 10% and 11% on a pro-forma basis);
- the integration is proceeding well, and the results of the power of the new Group will be increasingly seen during the second half of this year.
For more information : www.capgemini.com
