ICN Direct Newswire

March 2003

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** LATEST NEWS IN THIS WIRE **

1. EDS ousts CEO
2. Accenture axes 760 staff
3. CSC names new president for Europe
4. Atos Origin plans European expansion
5. Getronics rolls out recovery plan
6. Further information - feedback/forward to a colleague/unsubscribe

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1. EDS OUSTS CEO

EDS has ousted its chairman and CEO Dick Brown after a string of disasters and lost "mega deals" that started when the company issued a surprise profits warning last September.

Brown was replaced immediately after a board meeting that agreed his dismissal by Michael Jordan, former chairman and CEO of CBS Corporation. Jordan said he would rethink EDS's entire business strategy based on a review that had already begun and will be concluded in about two months' time.

"EDS is a strong profitable company," he said. "I am confident we can address the challenges of the marketplace and grow through innovative new services, while continuing to deliver the superior service our clients have come to expect."

Jordan's credentials for what is seen as a turnaround task include 10 years as a consultant and principal with McKinsey, followed by executive roles at PepsiCo and Westinghouse Electric, which became media conglomerate CBS.

He is joined in the company's executive management team by Jeffrey Heller as president and chief operating officer. A 34-year EDS veteran, Heller returns from retirement to take up the role and is described by EDS director Roger Enrico as "the heart, soul and conscience of the company".

EDS claimed that Brown mutually agreed his departure on the grounds that it would be "in the best interests of the company to effect a leadership change at this time". Brown became CEO of EDS in 1998.

2. ACCENTURE AXES 760 STAFF

Accenture has cut 760 jobs - about 1% of its global workforce - in a continuing effort to reshape to meet client demand.

The company said the cuts were made predominantly in the US, but it did not exclude a limited number of job losses across Europe and elsewhere. The redundancies were at manager level and above, and across disciplines and practices.

They were not, Accenture said, related to recent management changes that included creating the new post of chief executive of business process outsourcing. However, analysts believe the latest changes are intended to take Accenture further away from the systems build market and deeper into business process outsourcing.

The company said it is continuing to recruit employees with technology skills across its 47 country markets and will finish its fiscal year at the end of August 2003 with a net gain in employee numbers.

At the close of fiscal 2002, Accenture employed 75,000 people and generated revenues for the year of $11.6 billion.

3. EDS PROFIT FALLS 18%

CSC NAMES NEW PRESIDENT FOR EUROPE Computer Sciences Corporation (CSC) has named George Bell as president of its European operations. Bell will return to Europe from Australia, where he is currently CSC managing director and chief executive, to take up the post.

He replaces Mike Laphen, who is returning to the US to replace retiring chief operating officer Edward Boykin and who is a potential successor to CSC chairman and CEO Van Honeycutt.

As COO, Laphen will be responsible for the company's global line organisations in Europe, Asia, Australia and the Americas. He will report to Honeycutt.

Commenting on the reshuffle, Honeycutt said: "Mike Laphen brings to the position of COO extensive international experience in both the public and private sector portions of our business. His balanced leadership experience, combined with an excellent track record of new wins in Europe, make him ideal for this vital role. George Bell, originally from the UK, has extensive experience working in Europe, Asia and Australia."

* CSC has secured an eight-year, $320 million outsourcing contract with Basell, the Netherlands-based provider of polypropylene and related products. CSC will provide Basell with global IT infrastructure support as well as outsourced helpdesk services.

4. ATOS ORIGIN PLANS EUROPEAN EXPANSION

France-based services vendor Atos Origin plans to expand its European operations - building on its acquisition of KPMG Consulting in the UK and partnering with clients in Germany.

Making his report on 2002 financial results, Atos Origin CEO Bernard Bourigeaud explained: "We intend to expand our activities further within the main IT service markets of Europe, especially in the UK and Germany. In the UK, this will be achieved organically, with a focus on expanding our presence in outsourcing. In Germany, we are interested in creating partnerships with the IT departments of large industrial and commercial organisations."

"The objective is to establish a balanced presence in Europe, ensuring a substantial proportion of recurring revenue business in each country, such as we have already established in France and The Netherlands."

Atos Origin reported 2002 net profit up 20.6% at $196 million, on revenues up a marginal 0.2% at $3.3 billion.

But goodwill amortisation crushed the profit figure, pushing it down 42.4% year-on-year to $77.1 million. The firm also admitted that without the consolidation of Atos KPMG Consulting from September, revenues declined by 1%. Operating profit rose 1.7% to $289 million, helping margins to ease forward from 8.6% to 8.7%.

Bourigeaud described the results as "satisfactory in a market where consulting and systems integration suffered significant volume and price pressure". Revenue from managed operations grew significantly, but Bourigeaud noted increasing competition in the continuing market downturn.

Looking forward, he said: "The full-year impact of consolidating Atos KPMG Consulting, combined with a reasonable number of prospects in the order pipeline, should enable the group to achieve modest revenue growth in 2003, although political and market circumstances are highly uncertain at this time."

5. GETRONICS ROLLS OUT RECOVERY PLAN

Amsterdam-based IT services provider Getronics has hatched a recovery plan aimed at reversing charges that it is on the brink of collapse.

The plan was formulated by the turnaround management team of chairman Axel Rückert and vice chairman Klaas Wagenaar, who replaced the Getronics board of management in early March.

After reviewing Getronics' financial position, the new leadership concluded that the company might be saved through asset divestiture and further cost cutting, rather than via a controversial debt-for-equity swap offered to bondholders in a bid to reduce its debt mountain. Shareholders have approved this plan, although the invitation to tender to bondholders remains in place and has been extended until May.

The debt will now be repaid through proceeds from the divestment or liquidation of non-core businesses - the profitable HR solutions business is first up - and the sale of under-performing assets. Under-performing country operations such as Italy will be turned around, claimed the management team, noting the appointment of Roberto Schisano as chairman of the Italian business in place of former general manager Paolo Ruzzini.

The change of heart on the debt-for-equity swap followed a management review of the company's performance that concluded: "Although Getronics is experiencing a very difficult market, the underlying fundamentals of the company are in better shape than originally thought. In particular, client loyalty has proved to be stronger than expected."

Recent financial results show net losses narrowing from $1.1 billion in 2001 to $446 million in 2002. Revenues last year were down 13.4% at $3.9 billion, with net debt at the close of 2002 almost halved at $348 million.

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