ICN Direct Newswire

Previous Issue: December 2003

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** LATEST NEWS IN THIS WIRE **

1. Xansa quits mainland Europe
2. CGEY issues financial warning
3. Accenture forecasts 2004 growth
4. Getronics leadership change signals recovery
5. SchlumbergerSema gets fit for Athens Olympics
6. Further information - feedback/forward to a colleague/unsubscribe

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1. XANSA QUITS MAINLAND EUROPE

Xansa is pulling out of continental Europe because it claims the market is not ready for the large-scale IT outsourcing and business process outsourcing (BPO) solutions offered by its offshore model.

The decision to withdraw from France, Belgium and the Netherlands follows the closure of Xansa's Asia-Pacific operations and an office in Paris earlier in the year. The 40-50 staff affected by the withdrawal are in consultation with Xansa about their departure.

Xansa announced the cutback as it reported first-half results in line with expectations. Pre-tax profit dropped 6.8% to $23.8 million on turnover sliding 2.9% to $389 million. Taking account of exceptional items, including a $22 million contract settlement, Xansa showed a pre-tax loss of $23.3 million - a major improvement on the $242.4 million pre-tax loss it made in last year's comparable period.

UK revenues in the six months to 31 October were flat at $361.8 million, with Asia-Pacific down 56% at $1.9 million, continental Europe down 13% at $4.7 million and the US down 38% at $20.5 million. Both Asia-Pacific and continental Europe showed a loss in the six months.

Xansa chief executive Alistair Cox said: "Our UK business has grown despite the market remaining flat. In India, we are continuing to grow rapidly and have increased headcount by 36% to 1,426. The US has returned to break-even. We do not believe that the market in continental Europe is ready for large-scale outsourcing and BPO that leverage our offshore model, so it is our intention to exit these operations, keeping the option of re-entering when we believe the market is more developed."

Looking forward, he added: "The board is confident that the actions we are taking will allow us to compete in today's flat market. Simultaneously, we are rapidly establishing early positions in those areas most expected to deliver significant future value."

2. CGEY ISSUES FINANCIAL WARNING

Cap Gemini Ernst & Young (CGEY) has warned that its revenue for the second half of 2003 is likely to come in below that of the first half because "September bookings were below expectations due to delays in signature".

The financial warning was accompanied by CGEY's third-quarter revenue report, which showed an 18% fall in consolidated revenues to $1.6 billion. The company does not disclose profit figures on a quarterly basis.

Despite the warning, CGEY said: "The significant growth in the number and size of sales opportunities in the pipeline indicates that revenue should start to recover in 2004 and encourages the group to maintain its goals for next year."

In its first six months to 30 June, CGEY reported revenues down 19% at $3.3 billion and a net loss of $98.4 million including restructuring charges of $114.8 million. The company noted a 2.7% operating margin at the close of the first half and reduced its full-year operating margin forecast from 5% to 4%.

3. ACCENTURE FORECASTS 2004 GROWTH

Accenture is predicting revenue growth of 5-10% in fiscal 2004 on the basis of extra demand for improvements in existing IT systems and a surge in business process outsourcing (BPO) as clients continue to cut costs.

At a strategy briefing in New York, Accenture CEO and chairman Joe Forehand said companies need to use IT to react swiftly and differentiate themselves during the economic recovery, increasing market demand for IT services.

After two years in which Accenture reported new bookings of about $16 billion, its new bookings in the fiscal year to 31 August 2004 are expected to come in at between $16 billion and $18 billion, boosted by government business, BPO and emerging technologies such as radio frequency identification.

Accenture reported a revenue gain of 2% in fiscal 2003 to $11.8 billion. Its operating profit in the year to 31 August 2003 rose 10% to $1.6 billion for a margin of 13.1%. Full-year revenues were boosted by a strong performance in the fourth quarter, when Accenture's operating profit more than doubled to $350 million, on revenues rising 12% to $3 billion.

4. GETRONICS LEADERSHIP CHANGE SIGNALS RECOVERY

Getronics has chosen its long-term leadership following a tumultuous year in which it came close to collapse before being saved by a two-man turnaround team.

Claiming "successful implementation of our operational and financial recovery", the Amsterdam-based IT services and solutions company said that Klaas Wagenaar has been named as CEO and chairman of the board of management.

Wagenaar, who was previously vice chairman, was brought in as part of the two-man rescue team in February, alongside management board chairman Axel Rückert. Rückert is leaving the company to pursue other interests.

Wagenaar, a veteran of the IT services industry with stints at CAP Gemini Ernst & Young, Baan and Sonera Zed on his CV, will be joined on the board by the general managers of Getronics' largest and most successful operations. Oswald Coene steps up as general manager of the Netherlands operation, while Kevin Roche joins the board in charge of activities in North America.

The company's supervisory board said it expects to further extend the board of management in the near future.

5. SCHLUMBERGERSEMA GETS FIT FOR ATHENS OLYMPICS

SchlumbergerSema has started work on the Athens 2004 PC factory that will support next year's Olympic Games.

The company has a contract with the International Olympic Committee covering four summer and winter Olympic Games over eight years - the world's largest sports-related IT contract. Following its success at Salt Lake City in 2002, SchlumbergerSema is now preparing for the Athens games and will then move on to work on the games in Turin in 2006 and Beijing in 2008.

Under the contract, SchlumbergerSema has responsibility for consulting, systems integration, operations management, security and software applications. At the Athens games it will lead a consortium of technology suppliers and, during the games, will field a team of 3,250 IT professionals based in the technology operations centre, secondary data centres and 60 competition and non-competition venues.

The PC factory can configure 500 PCs or laptops a day and, by the start of the games in August 2004, will have configured and installed 10,000 servers, desktops and laptops, as well as hundreds of routers and switches.

Dimitris Beis, technology general manager for Athens 2004, explained: "Without a comprehensive system, it would be impossible to configure, ship and track several thousand pieces of hardware. SchlumbergerSema is implementing a sophisticated system that combines automation with an expert team to prepare the IT infrastructure for reliable deployment and operations under the highest security conditions."

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