EMEA Outsourcing Market Data and Insights First Quarter 2011

Hosted by: Marc Geall, Deutsche Bank

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April 21, 2011

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Welcome to the 33rd Quarterly EMEA TPI Index Call

Covering the state of the outsourcing industry for global, commercial contracts with total contract value greater than million. 20

Duncan Aitchison
Partner & President, TPI EMEA

Bernd Schaefer
Partner & Managing Director, TPI Germany

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1Q11 HEADLINES
EMEA SOURCING MARKET28% from 4Q10, but NEW SCOPE PERFORMANCE WAS STEADY RESTRUCTURINGS DOWN after a record 2010, IMPACTING ITO VALUES A RESURGENCE OF BPO, 66% globally year over year, with ACTIVITY LEVELS AT A TWO YEAR HIGH IN EMEA O UTLOOK FOR 2011 is healthy based on
INCREASING LEVELS OF MARKET ACTIVITY
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At A Glance
SOURCING MARKET25% IN 1Q11 NEW SCOPE PERFORMANCE STEADY RESTRUCTURINGS DOWN, IMPACTING ITO & AMERICAS RESURGENCE OF BPO, ACTIVITY NEAR A 5 YEAR HIGH OUTLOOK FOR 2011 INDUSTRY ACTIVITY LEVEL UPSWING

SCORECARD
Global Broader Market Restructurings New Scope Americas EMEA Asia-Pacific ITO
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1Q11 TCV ( B)* 13.9 2.0 11.9 4.3 8.1 1.5 8.7 5.3

Q/Q Growth -25% -64% -7% 17% -28% -57% -46% 111%

Y/Y Growth -28% -73% steady -56% -5% -42% -47% 66%

BPO
*ITO and BPO Contracts with TCV > 20M

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Broader Market Contract Award Trends

EMEA TCV is down 28% Q/Q. Despite this, Q1 values are among the strongest in the last decade.

EMEA Broader Market Contract Awards TCV ( B)*

Quarter to Quarter Comparisons
15.4 7.1 6.7 5.9 8.5 6.6 5.8 8.1 11.2 - 28%

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

10 Years of First Quarters

5.4
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5.2

6.2

12.3

5.4

7.0

11.3

7.1

8.5

8.1

1Q02

03

04

05

06

07

08

09

10

1Q11

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* ITO and BPO Contracts with TCV > 20M

EMEA Contract Award Trends

TCV awarded in EMEA declined 5% Y/Y and 28% Q/Q.

EMEA Contract Awards TCV ( B)*

Quarter to Quarter Comparison
15.4 7.1 6.7 5.9 8.5 11.2 6.6 5.8 8.1 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 -28%

1Q09

2Q09

3Q09

Trailing 12 Months
2Q10-1Q11 2Q09-1Q10 2Q08-1Q09 2Q07-1Q08 2Q06-1Q07
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23.5 29.5 24.0 32.0 21.0 20.6

8.2 6.9 9.3 4.0 5.9 7.2

New Scope Restructuring

2Q05-1Q06

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*ITO and BPO Contracts with TCV > 20M

Comparing New vs. Restructuring Contracts Awarded

New Scope TCV in EMEA was down 10% Q/Q and TCV of restructurings fell by 76% Q/Q.

EMEA Broader Market New vs. Restructured Contracts TCV ( B)*

Quarter to Quarter Comparison
EMEA New TCV EMEA Restructured TCV
8.2 5.6 1.4 1Q09 2Q09 3Q09 4Q09 5.0 3.0 3.5 1Q10 2Q10 3Q10 4Q10 0.7 1Q11

7.4

- 10% - 76%

Restructuring TCV - 10 Years of First Quarters

3.5 1.3
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1.2

2.0 0.6 04 05

1.5

1.8 0.6 07 08

1.4

0.7 10 1Q11

1Q02

03

06

09

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*ITO and BPO Contracts with TCV > 20M

Americas Contract Award Trends

Contracting activity in the Americas increased this quarter, after having slowed during each of the past three quarters.

Americas Contract Awards TCV ( B)*

Quarter to Quarter Comparison
6.5 6.7 6.9 7.6 9.8 8.3 5.9 3.7

4.3

+ 16.7%

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

Trailing 12 Months
2Q10-1Q11 2Q09-1Q10 2Q08-1Q09 2Q07-1Q08 2Q06-1Q07
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15.8 19.9 19.4 18.4 20.4 29.2

6.4 11.2 6.5 6.1 5.4 15.7

New Scope Restructuring

2Q05-1Q06

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*ITO and BPO Contracts with TCV > 20M

Asia Pacific Contract Award Trends

TCV awarded in Asia Pacific was up 42% Y/Y, although it declined 57% Q/Q.

Asia Pacific Contract Awards TCV ( B)*

Quarter to Quarter Comparison
3.6 1.0 1Q09 2Q09 3Q09 4Q09 2.7 3.5 2.0 1.1 1.8 0.9 - 57 % 1.5 3Q10 4Q10 1Q11

No megarelationships in 1Q11

1Q10

2Q10

Trailing 12 Months
2Q10-1Q11 2Q09-1Q10 2Q08-1Q09 2Q07-1Q08 2Q06-1Q07
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6.0 7.0 7.6 5.9 5.3 5.2

1.8 2.4 0.9 1.2 2.1 1.2

New Scope Restructuring

2Q05-1Q06

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*ITO and BPO Contracts with TCV > 20M

EMEA: ITO Contract Award Trends

A lack of restructurings in the quarter led to a decline in ITO TCV awards of 52% Q/Q and 36% Y/Y. New scope increased 10% Y/Y.

10

EMEA ITO Contract Awards TCV ( B)*

Quarter to Quarter Comparison
12.1 5.5 5.4 5.1 7.6 5.2 3.8 4.9 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 10.3 - 52 %

Comparing First Quarters

New Scope 1Q11 1Q10 1Q09
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Restructuring 0.4 3.5 1.2

4.5 4.1 4.3

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*ITO Contracts With TCV > 20M

EMEA: BPO Contract Award Trends

BPO TCV rose substantially both Q/Q and Y/Y. This was EMEAs strongest quarter for BPO in the last two years.

11

EMEA BPO Contract Awards TCV ( B)*

Quarter to Quarter TCV Comparison
3.2 1.5 1.3 0.8 1.0 1.4 2.0 0.9 3Q10 4Q10 1Q11 3.2 + 365%

1Q09

2Q09

3Q09

4Q09 1Q10

2Q10

Quarter to Quarter Contracts Awarded Comparison

28 17 19 33 21 20

Includes the Saudi Telecom contact centre megarelationship and a large Shell-Logica loyalty cards processing agreement

14
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21

21

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

*Industrywide BPO Contracts With TCV > 20M

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EMEA: Industry Segments Contract Award Trends

Telecom & Media dominates market share in the first quarter of 2011, followed by Energy and Financial Services.

12

EMEA TCV ( Awarded by Industry M)*

Quarter to Quarter Comparison 1Q10
Telecom & Media Energy Financial Services Business Services Retail Healthcare & Pharma 40 Manufacturing Travel,Transport, Leisure
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1Q11
2,720 536 312 80

4Q10
400

560 126 395 80 176 128 112 112

367 20

1Q11 Share of TCV

Fin. Srvs. Other Energy

32 140 80

166 52

8% 13% 14%

Telecom & Media

66%

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* ITO and BPO Contracts with TCV > 20M

EMEA: 1Q11 Top 10 Service Providers by TCV

Although absent from the Top 10 list, Indian-Heritage Providers win more than 25% of EMEA TCV.

13

Accenture Aegis Capgemini Capita CSC EDB ErgoGroup HP IBM Logica T-Systems Indian-Heritage Providers won 25.5% of TCV in 1Q11

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14

Spotlight on Research First Quarter 2011

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In Case You Missed It, the India Providers Story

Looking back over the past 10 years, you may be surprised at the impressive growth achieved by India providers.

15

Market Share

growth

Revenue
Increasing Share of TCV Awarded Today 19%

Larger Share of a Growing Market Today 26%

# contracts

2% Ten Years Ago .1% Ten Years Ago

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The Chinese Service Provider Community

From a revenue perspective, the Chinese provider market is structurally similar to the India provider market of ten years ago.

16

10 Largest Chinese Providers

$
$
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85,000 2.4 billion Employees Revenues Camelot Chinasoft hiSoft Insigma iSoftStone Longtop Neusoft Rayoo Tech SinoCom VanceInfo
Highly Fragmented Market

$ $ $

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Changing Market Dynamics

Factors impacting all providers, including the Chinese. More Transactions Include 2x Offshore Delivery Than Ever 7 Yrs Ago Today 33% 69% Large Companies Leveraging Multi-sourcing More Than Ever % G2000 33% 10 Yrs Ago Number of Service Providers Making Up 75% Share of TCV 15 7 53%

17

Today 37

Continued Growth in Savings Realised through Outsourcing Today

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10 Yrs Ago

Today

7 Yrs Ago

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Chinese Provider Future Growth

What might help Chinese providers accomplish breakthrough growth?

18

Constraining
factors
Labour arbitrage advantages not unique Intellectual property and data privacy distraction U.S. firms look outside Asia Pacific for additional delivery centres Time lag to develop middle management
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Breakthrough
factors
Large, underpenetrated domestic market Scale and experience gained from domestic market wins supports big global deal wins Potential to acquire service centers from current external partners and subcontractors Chinese government as a potential buyer

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1Q11 TPI Index Summary

EMEA TCV down 28% from strong 4Q10
Broader

market

Restructurings down, fuelling ITO decline both in EMEA and

Globally

Low restructurings greatly impacted ITO TCV EMEA accounted for 57% of global ITO values
Major

BPO TCV remarkably strong Q/Q and Y/Y. Number of contracts in

EMEA is best in five years

sectors

Telecom & Media dominate EMEA market share

Steady market recovery supported by:

TPI
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outlook

Strong activity across all regions Increasing BPO interest Stable new scope performance

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20

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