Broad and diversified services, geographic areas, and client bases--key success factors in the industry; Long-term demand growth prospects despite current softness in the market; and Conservative financial profile, supported by prudent financial policies and ample liquidity. Reliance on relatively volatile "projects and consulting" services, as opposed to "contract" revenues; Higher-than-peer-average decline in sales and profitability in 2001 and first-half 2002; and Substantial headcount reduction in 2001 and 2002, which led to heavy restructuring charges and could cause a surge in hiring costs when the market picks up. The rating on France-based Cap Gemini S.A. reflects the group's: Leading positions in the global IT services and consulting markets, Well-balanced presence between the large EU and U.S. markets, and Conservative financial profile.
