On June 24, 2003, Standard&Poor's Rating Services revised its outlook on France-based IT services and consulting group Cap Gemini S.A. to negative from stable, following an annual review. At the same time, the 'BBB+' long-term corporate credit rating on the group was affirmed. The action reflects Standard&Poor's expectation that it will be difficult for Cap Gemini to rapidly increase its operating profitability and cash flow generation (after restructuring expenses) to a level more consistent with its rating category. Despite having healthy gross margins, the group continues to suffer from a high proportion of overhead costs (measured as a percentage of sales), and its revenues are in significant decline. First-quarter 2003 like-for-like sales (at a constant exchange
