CAPGEMINI_REGISTRATION_DOCUMENT_2017

FINANCIAL INFORMATION

4.1 Analysis of Capgemini Group 2017 consolidated results

Comments on the Capgemini Group consolidated financial statements 4.1.2 and{outlook for 2018 Consolidated Income Statement

Operating profit is €1,183{million (9.2% of revenues), compared with €1,148{million in{2016 (9.2% of revenues). The net financial expense is €72{million, compared with €146{million in{2016. This improvement is mainly due to lower net finance costs following a reduction in the Group’s net debt and the refinancing of the 2011{bond issue with the more favorable 2016{bond issue, the recognition of a profit on the early unwinding of the EUR/USD fix-to-fix cross currency swaps in{2017 and the impact of the early redemption of the ORNANE{2013 bonds at the end of{2016. The income tax expense is €303{million, compared with €94{million in{2016. The effective tax rate is 27.3% in{2017, stable on{2016 excluding the tax income (net) of €180{million in respect of goodwill arising on legal restructurings. At December{31, 2017, the income tax expense includes the financial impact of the US tax reforms (€-312{million) and the recognition of deferred tax on US tax loss carried-forwards (€+299{million), to reflect the change in the taxable profit outlook since the last remeasurement of US deferred tax assets in{2015. Profit for the year attributable to owners of the Company is €820{million in{2017, compared with €921{million in{2016. This represents an increase of 11% year-on-year, after adjustment for the tax income (net) of €180{million in respect of goodwill arising on legal restructurings. Normalized earnings per share are therefore €6.22{based on an average of 168,057,561{ordinary shares outstanding in{2017, compared with €6.69{based on an average of 169,450,721{ordinary shares outstanding in{2016, including the tax income (net) of €180{million in respect of goodwill arising on legal restructurings.

Consolidated revenues total €12,792{million for the year ended December{31, 2017, compared with €12,539{million in{2016, up 2.0% on published figures. Excluding the Brazilian equipment resale activity, revenues increased 4.0% at constant exchange rates, with organic growth of{3.6%. Operating expenses total €11,299{million, compared with €11,099{million in{2016. An analysis of costs by nature highlights a €391{million increase in personnel costs (5.1%) to €8,002{million for{2017. Personnel costs represent 62.6% of revenues compared with 60.7% in{2016. The average headcount rose 6% in{2017 to{196,755, compared with{185,593 in{2016. Offshore employees represent 57% of the total Group headcount, compared with 56% in{2016. An analysis of costs by function reveals: the cost of services rendered is €9,408{million, or 73.5% of X revenues, down 0.2{points on{2016. The gross margin is 26.5% of revenues in{2017, compared with 26.7% in{2016; selling costs total €1,019{million, or 8.0% of revenues, a slight X percentage decrease on last year; general and administrative expenses total €872{million (6.8% X of revenues), a 0.2{point decrease on{2016 due to a strict cost control policy. The operating margin is therefore €1,493{million in{2017, compared with €1,440{million in{2016, representing a margin rate of 11.7% (11.5% in{2016). Other operating income and expense increased from a net expense of €292{million in{2016 to €310{million in{2017, due to higher restructuring costs and an increase in the performance share grant expense, partially offset by lower acquisition and integration costs.

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REGISTRATION DOCUMENT 2017 — CAPGEMINI