CSFB Eurotech Conference

1
Logica
Seamus Keating
Group Finance Director
2
Trading update - 10 May 2002

• Continued tightening of global technology market
• IT services business stable
• Trading conditions in Mobile Networks have
  worsened considerably
• Cutting costs to protect long term profitability
  and maintain platform for growth
• Expect full year revenues to be little changed,
  earnings per share significantly below last year,
  cash conversion to be significantly ahead of
  first half

3
Positioning Logica

• Consistent strategy delivering technology-based
  solutions at the heart of our customers
  businesses world-wide
• Broadly based by sector and geography
• Investing in products where we can be the market
  leader
• Delivering value-based business process
  outsourcing and services in our chosen markets

Targeting long term growth markets
4
Broadly based by sector
Revenues for financial year to 30 June 2001
1,133m Slide shows split at 31 December 2001
5
Mobile networks - current trading

• Indebted telecoms operators continue to delay
  decisions and accept lower service quality
• SMS traffic continues to grow globally - good
  opportunities in Eastern Europe, the Americas and
  parts of Asia
• Operators expectation of significant revenues
  from next generation services has been pushed out
• More aggressive competition from infrastructure
  providers on MMS - bundling and handset priority
• Expect significant H2 revenue decline in
  messaging,pre-pay flat

6
Mobile networks - regional performance
Revenues for first half to 31 December 2001
7
Mobile networks - restructuring

• Focused RD programme maintained
• Mobile networks management team strengthened to
  reinforce strategic development of business
• Reduction of cost base -
• headcount to reduce by 400
• consolidation of real estate in Japan, the UK and
  Ireland
• One time restructuring charge (15m) will deliver
  25m savings on an annualised basis (20m next
  FY)
• Platform for profitable business on a lower
  revenue outlook

8
Mobile networks - IT services overlap

• Pre-pay solutions already have a large SI content
• Pre-pay and post-pay solutions are converging
• Greater appetite for outsourcing across telecoms
  sector
• As messaging evolves from SMS to richer messaging
  solutions, the SI content increases rapidly

product
SMS
MMS
Pre-pay
IT services
systems integration services
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IT services

• Mission critical solutions for global customer
  base
• Over 50 of contracts fixed price, protecting
  margins
• Increasing customer demand for outsourcing drives
  longer term revenue streams

Systems Integration 41 (-7)
Consultancy / Professional Services 39 (22)
Business Process Outsourcing 20 (92)
Based on first half revenues to 31 December
2001 Figures in brackets show change over H1 2000
10
IT services - current trading

• Stable business despite contraction in core SI
  market
• Demand continues to weaken in some areas -
  particularly Telecoms and Financial Services,
  increasing pricing pressure
• Energy and Utilities business continues to
  perform, growth slower than first half
• Strong growth in Public Sector and Outsourcing
• Expect H2 revenue just ahead of first half,
  margins slightly below last year

11
UK
Revenues for first half to 31 December 2001
12
Continental Europe
Revenues for first half to 31 December 2001
13
Americas
Revenues for first half to 31 December 2001
14
Asia Pacific / Middle East
Revenues for first half to 31 December 2001
15
IT services - restructuring

• IT budgets under sustained pressure - we dont
  anticipate upturn in revenues in the short term
• Reduction of cost base to reflect weaker market
  environment
• headcount to reduce by 300, primarily in
  Continental Europe
• consolidation of real estate in the UK, US and
  Continental Europe
• One time restructuring charge (19m) will deliver
  15m savings on an annualised basis

16
Summary

• Logica remains well positioned with a clear
  strategy
• IT services business stable and continues to do
  better than many in the sector
• Logica remains confident of continuing to play a
  major role in the messaging market
• A strong company with a solid balance sheet
• Taking decisive action to protect profitability
  and maintain a platform for growth

17
Logica